ML20112G364
| ML20112G364 | |
| Person / Time | |
|---|---|
| Site: | Cooper  |
| Issue date: | 12/31/1995 |
| From: | Boyd W, Mayben W, Mueller J NEBRASKA PUBLIC POWER DISTRICT |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| NLS960097, NUDOCS 9606110375 | |
| Download: ML20112G364 (50) | |
Text
,
COOPER NUCLEAR STATION j j P.O. BOX 98, BROWNVLLE. NEBRASKA 88321 TELEPHONE (402p3811 l Nebraska Pubh.c Power Distn.c t r= -
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1 NLS960097 June 7, 1996 i
U. S. Nuclear Regulatory Commission Document Contro: Desk Washington, DC 20555 i
Subject:
Nebraska Public Power District I 1995 Annual Financial Report NRC Docket Noi 50-298, DPR-46 )
Gentlemen: )
- In accordance with the requirements of 10CFR50.71(b) , the Nebraska Public j Power District submits its Annual Financial Report for calendar year 1995.
Copies of this report are being distributed in accordance with 10CFR50.4.
)
1 Should you have any questions or require additional information, please I contact me. I I
i
' j Sincerely, ;
1 !
i 1 J. H. Mueller Site Manager Enclosure i
j cc: Regional Administrator w/ enclosure l
)
l USNRC - Region IV l NRC Resident Inspector w/ enclosure
! Cooper Nuclear Station Senior Project Manager w/ enclosure USNRC - NRR Project Directorate IV-1 !
J. T. Gilliland (NRC) w/ enclosure NPG Distribution w/o enclosure 9606110375 951231 PD.9 ADOCK 05000298 I
PDR i
110047 1
- Powerful Pride in Nebraska ~ .
m ___ __
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LIST OF NRC Col @!ITMENTS ATTACHMENT 3 i
l Correspondence No:NLS960097 The following table identifies those actions committed to by the District in this document. Any other actions discussed in the submittal represent intended or planned actions by'the District. They are described to the NRC for the NRC's information and are not regulatory commitments. Please notify the Licensing Manager j j
at Cooper Nuclear Station of any questions'regarding this document or any associated .
regulatory commitments.
)
COMMITTED DATE COMMITMENT OR OUTAGE
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l PROCEDURE NUMBER 0.42 l REVISION NUMBER 1 l PAGE 9 OF 11 l l PROCEDURE NUMBER 0.42 l REVISION NUMBER 1.1 l PAGE 8 OF 11 l
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NEBRASKA1995PUBL1C POWER :D 15 T R I C T ANNUAL REPORT
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. .L.A . - A REFERENCE GUIDE Year at a Glance 3 The District 3 ,
I Afessagefnnn the Chairman of the Boani 4 Alessagefrom the Pn'sident and CEO 6 1995 in Review 8 1995 Statistical Review I8 Electric System 20 Power Supply System 3I Nuclear Facility 37 Afap 43 Boani of Directors 45 Senior Afanagement 46 i
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YEAR AT A GLANCE Kilowatt hour Sales (Electric System) 12.5 Billion Kilowatt hour Sales to MidAmerican Energy Company (Nuclear Facility) 2.1 Billion Operating Revenues (Electric System) $452.4 Million Operating Revenuesfmm Sales to MidAmerican Energy Company (Nuclear Facility) $101.3 Million Cost of Power Pwthased and Generated (including Nuclear Facility and Power Supply System) $329.7 Million
- Other Opemting Expenses $102.9 Million Net Revenues $10.1 Million Debt Service Coverage Ratio 1.84:1
. THE DISTRICT Nebraska Public Power District is a public corporation and political subdivision of the State of Nebraska.
Control of the District and its operations is vested in an Il-member Board of Directors popularly elected from -
subdivisions within the District's chartered territory, which includes all or parts of 91 of the state's 93 counties.
The District operates an integrated electric utility system, including facilities for generation, transmission and i distribution of electric power and energy for sale at wholesale and retail, and a surface water irrigation system.
< MESSAGE FROM THE CHAIRMAN
. : T.
.f er ; e OF THE BOARD
. - As we prepare for competition, we are encouraged by the results of 1995. ,
.. .- It was a year of record-setting accomplishments that will strengthen our
- g competitive position within the region.
Operating revenues and kilowatt hour sales during the year were at all-time .
highs. Gerald Gentleman Station, our major coal-fired power plant, set a generation record. Our customers established the highest peak demand ever on the system during the summer and then also established an all-time winter peak. For the first time in our history, energy sales exceeded one billion kilowatt hours in a single month-and this occurred in both July and August.
In addition to these records, we experienced a considerable improvement in the operation of Cooper Nuclear Station. The progress has been remarkable, but we realize that there is room for additional improvement. Buoyed by new management and employee culture change, the facility returned to service in February following a long and difficult outage and operated at a capacity factor of nearly 99 percent during the crucial summer months. A regular refueling and maintenance outage was completed before the end of the year and should help make Cooper Station available throughout 1996.
Our financial position remains positive. The ratings accorded our outstanding revenue bonds by Moody's and Standard & Poors were retained at Al and A+, respectively. These ratings reflect such positive factors as our diversified generating resources, the adequacy of our generating capacity to meet projected loads, our strong management team, our long-term wholesale and retail contracts and our current competitive positioning strategy.
The debt service coverage ratio is another key financial performance indicator. The debt service coverage ratio reflects the amount of Electric System net revenues available to meet the annual debt service payments on the outstanding revenue bonds. We have been able to maintain a coverage in the 1.6:1 to 1.8:1 range for the past three years, even with the unfavorable weather patterns we experienced in 1993 and 1994.
We have also embarked on an aggressive program to prepare for competition. A major reorganization will put us in position to better serve our customers, present and future.
To cap this eventful year, Directors selected William R. Mayben as the President and CEO to lead this thriving organization into the future. We believe his vision accurately reflects ours and will result in a competitive utility that will become Nebraska's energy leader.
Wayne E. Boyd Chairman of the Board of Directors N
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MESSAGE FROM THE
- g. 1 PRESIDENT AND CEO l
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Since joining Nebraska Public Power District (NPPD) in late 1995, my already high opinion of this utility continues to rise. While with ,
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R.W. Beck, I had the opportunity to be associated with NPPD during its c
formative years and on other projects during the past 20 years. Now 4 that I have gained an insider's perspective on the operation, I firmly believe that NPPD will measure up under a price and services competitive business environment.
Prior to becoming president in November, I was provided with a copy of the Competitive Positioning Strategy Phase Il Report. This document was the result of a six-month internal review.
I was impressed that the organization chose to take an in-depth look at itself before it was faced with competition. The 24 opportunities for improvement pointed to ways that the utility could become more efficient and effective. Six of these opportunities are already in the implementation phase.
Creation of a Strategic Plan, which was a comprehensive effort by customers, employees, the Board of Directors and the general public is our vision statement for the 21st century. This document is our guiding force as we move closer to competition and to our goal of being a leader in the electric utility industry.
In early 1996, we began the process of restructuring our business to better mesh with the l changing industry. We now have two senior vice president level staff members and seven other vice presidents who, along with the General Counsel, make up the executive team. The senior l vice president of energy supply will oversee all aspects of the electrical generation side of the business. It is our belief that intense price competition will exist at the generation level, thus the increased emphasis on this core area of our business.
The senior vice president of operations will concentrate efforts on delivering value to our customers. Value, to us, means the best combination of pricing and service unique to the i customer needs-a decision that can only be made in close working relationship with customers.
l Since this is such a delicate balance, this core business area merits expanded executive management attention.
The restructuring will continue through mid-1996. Our intention is to move toward a performance based management system. That means, along with shifting personnel, we will move decision-making down to the level in the organi.>ation where adequate information and expertise exists to make the best decision for the benefit of the customer. We expect to eliminate some layers of middle management during the restructuring process. Our downsizing goal is to create the ideal organizational structure for the competitive environment in which we . j will be doing business. ;
We are committed to bring the benefits of competition to our customers. If another utility can l
deliver electricity to customers at a lower price than we can, we owe it to our customers to pass those benefits along to them. We would then market excess capacity, from lost sales, outside of Nebraska and the revenues would help keep our rates stable.
I
2 Our planning for the future goes beyond traditional electrical services. During the past several
. years, we have been assisting customers in many ways.
The customer accounting system we offer helps our communities' governments run more smoothly.
Economic development is made easier with our Forte program, a software system that assists community leaders in targeting the type of industry that is best suited for them.
We have begun assisting our customers with gaining a presence on the Internet's World Wide Web. During the first two weeks of offering this service, more than 60 communities signed up.
By providing Web Page development services, we are helping our customers learn about the Internet and use it to promote the development of their communities. As a result of customer requests, we are studying the feasibility of becoming an Internet service provider.
We look toward the future and will continue our quest to provide value for our customers. New services and more efficient operations will result in value. We are proud to be Nebraska's energy leader.
William R. Mayben President and Chief Executive Officer i
NEW PRESIDENT AND CEO NAMED William R. Mayben was selected by the Board of Directors during 1995 as the new President and CEO. Ronald
. W. Watkins left in March for a position with Old Dominion Power Cooperative in Virginia. Robert L. Gangel had l' served as Acting i resident and CEO until the appointment of Mr. Mayben, which became effective November 1.
' I Mayben was the former managing partner and CEO of the nationally recognized consulting firm of R.W. Beck.
Mayben has an extensive background in power marketing, finance and inter-utility relationships in the electric utility industry. R.W. Beck is a nationally known, privately owned engineering and consulting finn specializing in public power matters. l R
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l operating Revenues POSITIONED FOR THE Electric 5ystem pgyggg sm- ,
450 -
400 - e" Operating Revenue & KWH Sales Hit Records In July, our total requirements wholesale and retail customers j 350- 'As we position ourselves for set the all-time peak demand on ,
E 300- the future, it is important to note the system of 1,939 megawatts.
j 250- that we are a thriving utility with Although that record was not j 2m- record-setting usage by our exceeded, the peak load in August 8 150 - customers in the cities and villages did reach 1,912 megawatts for IW-and rural areas of Nebraska. Our a one-hour period. The previous 50 -
revenue continues to keep pace- peak demand record was 1,819 0-91 92 93 4 95 with our requirements, megawatts that had stood since In 1995, we had record operating July 1991.
revenue of $452.4 million and These record numbers are particu-record kilowatt hour sales of larly impressive because about half Net Revenues Electric System g 12.5 billion. of our total requirements whole-i I
to- These numbers, by themselves, sale customers were contro!!ing 9- are impressive but what is equally loads when these peaks were 8- important is our ability to provide reached. Our Control Center j 7- electric energy with an enviable personnel at Doniphan detennine E 6-a mix of fuel sources to our growing when control of loads should be
{5e customer base and deliver that initiated. Load controls are initiated energy over an extensive and reliable only during expected peak load 83- a transmission and distribution system. periods or in the event of a system 2- {
emergency. This allows electric 1 i- Peak, Energy Records Fall pump irrigators and those who I 9, 9, 93 94 95 have electric water heaters and air A return to more normal
- g; weather patterns produced new g ;
records m peak demand and Debt Service Ratio . Our wholesale customers have Electric System energy sales. This had a s.ignificant,
- g; 2.m - positive impact on our fmancial i.90 -
approximately 390 megawatts g condition to the ultimate benefit 1.80 -
of load. This includes irrigation, of our customers.
1.70 - m . air conditioning, water heating, For the first time in our history, ..
1.60 - mumcipal pumps, commercial /
July electricity sales exceeded on 1.50 - industrial load, and voltage control.
billion kilowatt hours. But, that 1.40 - record was exceeded during m a mu I
1.30 - peaking utility, due largely to elec-August, in July, sales were 1.01
- l 20 - tric irrigation pumping and air billion kilowatt hours and during j 1.m- conditioning, our load balancing August sales rose to 1.07 bilhon
" l*~ activities are beginning to reap 91 92 93 94 95 kilowatt hours.
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dividends. Customers set a new to address the challenges for Average Revenue per KWh Sold
"" * "*'* " "' "M winter peak demand in January of rural areas in Nebraska. We have
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1,475 megawatts. This exceeded a continuing interest in rural
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the previous record cf 1,454 economic development. M 3.60 M megawatts set in January 1994. We have an investment m excess ,
However, that winter peak has of $2 billion in plant and equipment g g_
been exceeded four times in 1996. dedicated to providing electric g_
Several days of sub-zero tempera- service to much of the state's rural gno-tures hit our service area and area. The size and geographic d 160-resulted in an estimated record distribution of the communities go_
winter peak of 1,603 megawatts we serve, either at wholesale or 7,o _
in February. retail, contribute to our significant zog_ i During 1995, our customers interest in rural development 9i 92 93 94 9s l installed 2,337 units of electric issues Moreover, our past experi-space heating equipment totaling ences have emphasized the need 38,413 kilowatts. Along with our for proactive wholesale and retail Average Revenue per KWh Sold (Retail-All Casses) wholesale customers, we continue programs to enhance economic to offer an incentive program. development opportunities in our m
. 5.80- m M incentive payments for the space service area. , ,
heating equipment totaled more Our service area has experienced _
than $1 million during the year. significant growth in manufacturing g gg_
employment, and the positive t ~
Commitment To Economic effect of this growth has been Development ,
$c4.80-reflected by increasing population 6*-
Our activities in economic develop-trends throughout the service area. 4 40 -
ment continue to be beneficial m.
increasing loads. 4"2U-Lower Rates To Be in Effect The economic goals include For 1996-1997 *-
9, 9, 93 9, 93 increasing electric sales, increasing To be competitive, we must awareness of Nebraska's locational continue to be a low-cost provider.
advantages, encouraging new Sales in 1995 and the efficiency only slightly based upon their business investment in the state, of our generating facilities will load characteristics.
and maintaining the present load have a positive impact on rates A reduction in the Production and businesses. charged to our wholesale customers Cost Adjustment (PCA) factor Various economic development during the 1996-1997 rate period, for 1996 will result in reducing programs focus on rural economic Overall, the basic rates for v, hole. the cost of wholesale power and development issues. We cooperate sale power sersice in 1996-1997 energy between 2 and 4 percent with the Nebraska Rural wili be virtually the same as the for most total requirements Development Commission and rates in effect during 1994-1995. customers. The return to operation the Northern Great Plains Rural The adjustments that were made to of Cooper Nrclear Station from Economic Development the wholesale rates will result in an extended outage in 1994-1995 Commission (a federal multistate costs for individual wholesale enabled us to reduce the PCA l
commission) in their efforts customers to increase or decrease charge during 1996.
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Gerahl Gentleman Stati- ., two 630 megawatt units burned a record 4,7YO.333 tons
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of ccxd and set a new generation record of 8.030,683 megawatt. hours in 1995. l A Record Year At record of 768,325 megawatt hours in August.
Gentleman Station in August. During the year the These accomplishments collee-Gerald Gentleman Station, the Station's two units set monthly tively have contributed directly to state's largest electric generating generating records in April, added revenue in 1995 through plant with two 650 megawatt units August, October, November and off-system energy sales and have (gross), had net generation of December. helped improve our competitive 8,030,683 megawatt hours in The largest ever coal burn, position. Improving on accom-1995, which is a new annual 4,790,353 tons, occurred during plishments such as these in the production record. The previous 1995. The previous record was future will help assure a strong record was 6,879,639 megawatt 4,074,457 tons burned during 1993. position in a deregulated, highly hours in 1993. Employees at the Station worked competitive utility industry.
The Station set an all-time all of 1995 without a disabling Within the next five ycars, -
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monthly net generation record of or days-away-from-work injury Gentleman Station is expected 776,591 megawatt hours in l and achieved I million employee- to rank among the top Hve December after setting the previous hours without a disabling injury power plants in the nation in 1
terms of production costs per will total $4.4 million over the the $43.5 million outstanding megawatt hour. This will be next 20 years. Electric System 1978 Series bonds brought about through a combination Sheldon Station continues in early 1996 and issue short-term oflower fuel costs, higher capacity to burn a mix of two percent commercial paper to refinance the
! factors and lower operation and tire-derived-fuel (TDF) with the debt. The savings are expected to
. maintenance costs. coal at a cost comparable to coal be between $3.7 and $6.4 million, costs. This rids Nebraska of depending on the rate of interest Sheldon Station Has approximately 500,000 discarded for the commercial paper.
Excellent Year tires each year out of an estimated The Sheldon Station coal-fired CPS Targets Six issues one and one-half million tires facility continues to steadily Our Competitive Positioning accumulated annually.
improve its operating performance. Strategy (CPS) project, initiated in The plant had net generation New Revenue Bonds late 1994, entered its implementation of 1,318,517 megawatt hours in issued; Others Are Called phase in 1995 and six of the 24 1995 which was exceeded only by In June we issued $154 million major opportunities were selected the 1.342,959 megawatt hours in revenue bonds in a negotiated for near-term implementation.
generated in 1973, before our sale with Bear, Stearns & Co. Inc., The six issues are performance Cooper Nuclear Station and as lead underwriter. measurement, fossil fuel procure-Gerald Gentleman Station were on A $78 million Electric System ment, human resources management, line. While achieving that near. bond issue will pay the costs of internal customer service, fossil record generation, Sheldon Station repair to the transmission and engineering support and trans-had a zero percent forced outage subtransmission system damaged portation. A core group of CPS rate for Unit I and 0.25 percent in storms during the past several Team members was identified forced outage rate on Unit 2. years. A portion of those costs to act as a facilitation group.
Equivalent availability factors were paid from federal funds. Scoping documents outline how 3
were 88.77 percent for Unit I and Some of the bond proceeds will each of the teams will proceed i 93.17 percent for Unit 2, another pay for refurbishing the 115 kV with the development of action plans.
ontstanding performance. transmission system and other During the year, Sheldon Station capital costs, installed a fly ash reburn system A $76 million Power Supply Ener Sales which will significantly reduce System issue will pay for acquiring Electnc System ash disposal cost, reduce fuel costs the Canaday Station from The 14 -
by burning the carbon that is in the Central Nebraska Public Power j u_
fly ash and reduce the amount of and Irrigation District, as part of a j high BTU coal that is required. transfer of facilities, and for building 5 The system is currently in the testing stage and an application has been the 96-mile,345 kV Pauline-Moore transmission line and related
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." made for an operating permit. When substation equipment. 5 in operation, this system will further The bonds were insured and as a j 4-improve the cost-effectiveness of result were rated "AAA." The true E 2-this facility. It is estimated that interest cost was 5.62 percent for 2 g_
savings from disposal costs and the entire issue. vi 92 93 94 95 reduced high BTU coal burning A decision was made to refund S hrm Energy kles h Additional Energy kle l
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before the Nebraska Power y
Review Board. The settlement
{J l agreement also called for negotiation on a new transmission service
- agreement. A new transmission service agreement was negotiated J -
R ' A" ^ .4 k' . t and became elTective March 1,1996.
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we reached agreement on contract s~ W< J h~ J , ya '---
issues that reinforce and redefine
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, relationships with The Central i
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_ iiri Y 1rrigation District. The agreements gf w, ' "' gg-yQ)]7pT] a
,p - 4 ;,, 4 provide for continuation of a long-standing relationship and u ;
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h4 transfer of some facilities. Past 4* r , sj? ' W billing disputes involving various gp ^
C OOPEP. NUCLEAP. STATIOH $ power supply contracts were settled
'(xjM;; , W f and future relicensing cost alloca-M < MNM . . , _ . -
7 tions were agreed upon.
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-fH 350 miles of transmission lines s' s."
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= = - - -- %a were an integral part of our trans-mission system. We will continue cooper suclear siation s reorgani ation included transfer of the to purebase the power and energy nuclear engineering division finon the General ODice to the plant site in 1995.
produced from Central's four This results on onore eficient and efective enginaring eports. .
hydroelectric plants.
All six implementation teams Settlements Reached With Two Entities Cooper Stat. ion Has An involved employees from all Excellent Year levels of the organization in the A settlement agreement regarding
. . Cooper Nuclear Station operated process. Action plans detail what a dispute involving transmission
,35 consecutive days following changes are required, the expected services was reached with the plant restart in February. The improvement as a result of the Mum..cipal Energy Agency of February startup ended a nine-month changes and how the project Nebraska (MEAN). l shutdown to address performance l will be pursued. MEAN agreed to withdraw its .
issues at the plant. The facility This project reflects organization- transmission access application .
. implemented I,hase 2 of .its wide commitment to improving document filed with the Federal Performance improvement Plan our performance and becoming the Energy Regulatory Comm.ission that provided the performance low-cost energy supplier for and we agreed to d.ismiss our . . ,
improvement in. .itiatives to be I nonmetropolitan Nebraska. pending actions in state court and ..
l completed during the transition l
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1 from the extended shutdown to the procedure changes have also being considered a " downward scheduled refueling outage which resulted in well-defined Corrective trending" plant and that it appears began in October. For the year, Action and Self Assessment the corrective actions being taken Cooper Station established a Programs that will allow the facility are addressing the NRC's concerns, capacity factor of 61.7 percent. to continually assess its performance Pauh,ne Moore L,ne i
. To strengthen plant support and and take advantage of opportunities ,
overall effectiveness, the nuclear to improve.
Construction Underway
. . Construction on the 96-mile, engineering division was reorga- A s.igmficant safety milestone 345 kilovolt transmission line from mzed and transferred from the was achieved when workers
. the Pauline Substation to the Mark General Office to the plant site, reached 5 m.lh.on i hours without a
. . . . . Moore Substation in southeastern This new organization has resulted lost-time accident or days-away-
. . . .. Nebraska was well underway in more efficient and effective from-work injury.
. . at year's end. In early 1996, engineering support of Cooper Another of the sigmficant we used a helicopter to place Nuclear Station. achievements during the year was the tower structures on the bases During the refueling outage, the notification from the Nuclear
. . that had previously been anchored efforts were focused not only on Regulatory Comm.ission in June .
in c nemte.
preparing the plant to perform that Cooper Station is no longer reliably for the next 18-month fuel 7 -- -- -
f cycle, but also on improving outage ,, h; ?..
performance. Innovation resulted
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4 in cost savings during the 77-day outage. One process improvement U
!- f allowed personnel to work on the turbine deck and portions of the 14 -
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refueling floor as radiologically ,
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clean, reducing the dress out '
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requirements, cutting laundry
, l and waste costs, and improving , :
worker efficiency. Improvements l in the work planning process &
included input from workers in . ;(
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time systems. Another major outage .
achievement was worker radiation !M .
k, y dose reduction, which came in at t
" . . g %g 168 rem, significantly less than the -
projected 215 rem. f All of the Cooper Station operator i
training programs were reaccredited p by the Institute of Nuclear Power 2 --W Operations' National Academy for Powdery 11 1 ash. Once considered a pesky waste product. is reburned at Nuclear Training. Process and
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also burns about half a unillion shrrdded discarded tires annually.
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y Gentleman Station, reduced depen-
, dence on other generating facilities 1
_. l and increased sales opportunities.
! Rare Birds To Benefit From I s e' Third Sand Pit l Success of two managed Platte .
'< River sand pit nesting habitats for
, ; l j l the endangered least tern and l y ,
threatened piping plover prompted
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the commitment to voluntarily i develop and manage a third sand pit for the 1996 nesting season.
Since 1991, managed sand pits l r g ,
along the Platte River have l
. ! produced i17 least tern chicks and 42 piping plover chicks which matured sufficiently to fly away. In i contrast, three in-river islands that c .
have been developed under a federal order, have fledged only 21 l least tern chicks and four piping
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4 plover chicks during that time.
The Federal Energy Regulatory l A helicopter sets the top portion of a 123-foot steel tower during construction of the Wmile-long Pauline-Moore 345 kilovolt transmission line. The giant craft placed all Commission (FERC) in i990, at m towers in two w"ks. savins time and reducing site restoration costs- the request of the Platte River Whooping Crane Trust and the We also began utilizing a heli- constraints in the system.
U. S. Fish and Wildlife Service, copter to transfer personnel Additionally, the line will address ordered the construction of eight between structures to place bell rapid growth in the demand for in-river nesting islands for the insulators and begin the wire electricity in southeast Nebraska.
terns and plovers. Our Board of stringing process. Unfortunately, a Load growth in that area is occurring l Directors decided to voluntarily wire stringing helicopter that was at an average rate of 2.5 percent, develop and manage the two sand I transporting workers to towers annually, due largely to increased pit habitats to compare the relative apparently hit a tower during the agricultural need, compared with a success of the pits and islands in process, in February, killing the statewide rate of about 1.5 percent.
producing birds.
person in the helicopter and one of Approximately 400 steel structures Our decision to manage a third the workers on the tower. will support the conductor for the ~
pit is an indication of our The transmission line, to be $57 million project.
commitment to the successful completed by May 1,1996, will Customer benefits over 35 years reproduction of these birds that greatly enhance the reliability of are estimated to be $213 million will aid recovery of the species.
our current electric transmission (in 1993 dollars) based on liigh natural flows in the Platte system and will eliminate existing increased generating capability for River during the spring and summer l
l
of 1995 extensively eroded the 4 percent on January 1,1996, Fuel For Electricity (1995) three in-river islands, completely largely due to the loss of revenues c,s on, o,,,
washing away one of them. when a Natural Resources District co.i The National Hydro Association curtailed the amount of water TE presented us its 1995 Hydro we had contracted to deliver.
. Achievement Award for the sand Another significant impact can pit efforts in helping to meet the be attributed to the cost necessary N I ar biological needs of the least terns to replace some sand dams when and piping plovers. the Platte River flooded during Our total effort to acquire a long- the summer. owned by Central generated nearly term license from FERC for the 384 million kilowatt hours and the North Platte Project continues on y o Electric Generation two Loup hydros generated nearly multiple fronts. 144 milli n kilowatt hours.
Nebmskyenemted hdro power During 1995, power produced by Irrigation Water Deliverect Provided an increased amount of the hydros provided about seven to 35,000 Acres the electricity for our system during 1995. Percent of our customas' total Despite the unusually wet spring electrical usage. Coupled with and flooding on the Platte River, Increased water availability in hydro purchases from the Federal approximately 196,900 acre feet the Platte River system resulted of water was diverted to irrigate in much higher generation from es yn Area Pown Admmistration (WAPA), hydro 35,000 acres served by our three hydro-electric plants situated Power accounted for approximately irrigation canals. Additionally on canals and reservoirs along 17 percent of the total electricity w pmvided 3,500 acre feet of that river.
"# 'ustomers used in 1995. The supplemental storage water to Our customers benefited from .
additional power we provided other canals. nearly 668 million kilowatt hours c me fr m c 1 (65.9 percent),
Irrigation rates for water delivery of renewable hydro generation in nuclear (17 percent), and gas, oil service from our three irrigation 1995, compared to 517 million and diesel (0.1 percent).
canals were m.ereased approximately kilowatt hours m. 1994.
In addition to our four hydro Merging With The i generating plants, we purchase information Highway Estimated Loads and Resources (Summer Season) the generation from hydro plants By developing and launching 2.5m- owned and operated by The our own Internet home page Central Nebraska Public Power (http://www.nppd.com), we began 2.u-and Irrigation District and the disseminating information to a 2.3m- Loup Power District. global audience. The home page s Our Ncrth Platte hydro generated includes summaries of Board of
{ 2.2m- more than 126 million kilowatt Director meetings, news releases, hours of electricity during the annual report information, customer year, up from 87 million in 1994. information, educational resources, 2fxio- The other three small hydros power plant information and a generated 13 million kilowatt wealth of economic development
- ~
95 96 97 98 99 hours. Paced by the state's largest data, which is updated regularly.
$ gy, 4, 9 Net Resounes Awailable hydro, the four hydro plants l
l
) Within days oflaunching the area. By helping customers establish
- page, we began receiving economic a presence on the Internet, we
- development leads via the page, believe it gives a global audience i proving that the Web is a viable and valuable information about the state.
l worthwhile tool in business today. The response from customers for In addition to establishing a Web this service is overwhelmingly .
, page, steps were taken to give more positive, with communities and i employees access to the Intemet utilities we serve eagerly accepting j
PJana.
from their desktop. Employees are encouraged to become more productive and efficient by exploit-the offer to help them advertise information about themselves, whether it be economic development i ing the communication and potential, travel and tourism j information capabilities that the information or information about
. Internet provides. their electric rates.
l l We also began to offer World Just as we helped Nebraskans, i j Wide Web page development to especially rural Nebraskans, in I
the list of services our wholesale the electrification of America, l
- customers and retail communities we are now poised to lead our t
can choose. This is a valuable customers into the 21st century l resource in our large, rural service of information technology.
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( ,, ,, _ _ - __. ..h. -w Augers and storage bins at Frito-lov's new Gothenburgfardsty wdl soon nune mdlioru of bushels of Nebraska u hire < orn anta Ament a'sford < hain. The snat k food giant is one of many corporations that have found the Cornhusker State to be a goodplace in a hi< h to Jo business.
4 _ . , ,. __ _ _ . __ _ _ .
I'
.. 1995 STATISTICAL REVIEW Electric System, Nuclear Facility and Power Supply System Combined Revenues from Average Electric Sales
^
Number of MWH Sales (Thousands)_
SALES Customers Amount % Amount %
Retail: ,
Residential 84,635 910,989 7.3 $ 65,567 14.5 Rural & Farm 3,159 58,899 0.5 4,424 1.0 Commercial 18,925 781,092 6.3 48,902 10.8 Industrial 68 888,694 7.1 32,866 7.3 -
Public Lighting 254 25,270 0.2 2,359 0.5 Municipal Power 195- 42,992 0.3 2,637 .0.6
. Miscellaneous Municipal 2,783 110,559 0.9 5,499 1.2 Total Retail 110,019 2,818,495 22.6 5 162,254 35.9 Wholesale:
'48 Municipalities (Total Requirements) 1,388,006 11.1 $ 51,694 11.4 21 Municipalities (Interconnections & Partial Requirements) 50,104 0.4 1,648 0.4 25 Public Power Districts & Cooperatives (Total Requirements) 4,15L569 33.3 140d81 31.0 _
Total Wholesale Sales (Excluding Nonfirm and Participation Sales) _._5,591,679 44.8 $ 193,823' 42.8 Total Retail and Wholesale Sales (Excluding Nonfirm and Participation Sales) 8,410,174 67.4 $ 356,077 78.7 Uun Utilities (Firm and Nonfirm) 1,766,962 14.2 25,377 5.6
_ Participation Sales .(_l) _ 2,301,757 18.4 67,267 14.9 Tota.1 Reyenues from Electric Energy _ Sales 12,478,893 $_448J21 99.2 _
1_00._0~~
Other OperatiniRevenues (N6t of Defer ~ reil) _$ _ ),681 0.8
-Total Electric System Operating Revenues $ 452,402 100.0 l
Production Costs .
MWH (Thousands)
GEN _ERATION Amount % Amount %_ !
Production:
Electric System (Including Interchange) 1,522,211 11.5 $ 29,265 8.9 Purchased:
Power Supply System (1) 8,145,330 61.7 $ 159,601 48.4 l Nuclear Facility (1) 2,063,803 15.7 107,005 32.4 Other 1,466,096 11.1 33,851 10.3 Total Power Purchased i1,675,229 88.5 $ 300,457 91.1 Total Power Produced and Purchased 13,197,440 100.0 $ 329,722 100.0 (l) The Electric System purchases 100% of the net generation and power purchases of the Power Supply System and 50% of the Nuclear Facility based upon the total costs of the respective systems. Pursuant to the Power Sales Contract, MidAmerican Energy Company purchased 2,063,888 AfWHfrom the Nuclear Facility; AfidAmerican Energy Company participation is not included in the table.
l Increcse GENERAL 1995 1994 (D; crease)_ __
(Thousands)
Utility Plant (at cost): (1)
Electric System $ 892,069 $ 857,762 $ 34,307 Power Supply System 817,689 765,542 52,147 Nuclear Facility 717,273, 694,382 2_2,891
==== Total ypjty PlanL__ __ _ _ $ 2,427A31_ __ $__2,317,686
- $ 109,345
= = _ = = _ _ _
Outstanding Debt Electric System (2) $ 390,889 $ 363,023 $ 27,866 Power Supply System 881,765 830,765 51,000 Nuclear Facility 232,360 _ _ _254,725 (22,365)
_y= ToQOutstanding Debt. _
_ _ _ _ _$_1.,505,014_ $ 1 448,513 _ $_ _5.6,501____
Accredited Number of Capability Percent
_PI_an_ts_(3)_ .Jwy_ _ of Tptal_
Production Plant Facilities:
Steam - Conventional 2 1,503 57.4 %
Steam - Nuclear (4) 1 769 29.4 Hydro 10 159 6.0 Diesel 9 39 1.5 Peaking Turbine 3 149 5.7
_ Total Production Plant _ Facilities _
25 2,619 l__00.0 %
(1) Net of retirements (2) Includes Ta& Exempt Commercial Paper (3) includes six hydro plants and nine diesel plants under contract to the District (4) includes 50% of Af W contracted to AfidAmerican Energy Company Miles of Transmission Line in Service 6,241 Number of Permanent Employees 2,212 1995 Contractual and Tax Payments (Thousands):
Lease Payments to Retail Towns $ 15,161 5% Gross Revenue Tax $ 5,354 In Lieu of Tax Payments 5 207 How NPPD's Dollar Works For You-1995 V '
- l. Cost of Production-Power Supply System 35.4 %
, MM 2. Cost of Production-Nuclear Facility 23.1%
i ,,,_,,,,,,j i/ N P 1
' .y s ,, 3. Cost of other Operation and Maintenance Expenses
- {g 13.6 %
. m' oe- =
"' IO b Ng . Y i . 4. Bond Retirements. Cemstruction From Revenues, Etc. 9.9%
s -
- 5. Cost of Purchased Power-Other 1.$'4 1J74431503A t .- "', p
{p }O Y A 'w]he,y . N }O ' 6. Cost of Production-Other 6.5%
[
k L .- i.a ~ ul x ax n
&M 2 C. w.D u.w w .a u.. s, A
- 7. Interest. Other income Deductions and Taxes
!"et ofinterest imvme and other revenuen 3.4%
. .- .- . - . ~ . . . -
C'PP3 ELECTRIC CYUTEM Report ofIndependent Accountants To the Board of Directors Nebraska Public Power District:
We have audited the accompanying balance sheets of the Electric System of Nebraska Public Power District (a public corporation and political subdivision of the State of Nebraska) as of December 31,1995 and 1994, and the related statements of revenues and expenses and accumulated net revenues, and cash flows for each of the three years in the period ended December 31,1995. These financial statements are the responsibility of the District'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 Government Auditing Standards. Those standards require 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 disclosures in the financial 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 the Electric System of Nebraska Public Power District as of December 31,1995 and 1994, and the results ofits operations and its cash flows for each of the three years in the period ended December 31,1995, 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 supplemental schedules of the calculation of the debt service ratios in accordance with the Electric System Bond Resolution for each of the three years in the period ended December 31,1995, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report dated March 9,1996 on our consideration of Nebraska Public Power District's internal control structure and n report dated March 9,1996 on its compliance with laws and regulations.
Coopers & Lybrand L.L.P.
Omaha, Nebraska March 9,1996 '
___R
' WPP3 ELECTRIC GY? TEM Balance Sheets - December 31,1995 and 1994 1995 1994 (Thousands)
ASSETS
' Utility Plant, at Cost $ 892,069 $ 857,762 Less-Reserve for depreciation and amortization (Note 1) 437,537 405,667
$ 454,532 $ 452,095 Debt Reserve Account (Note 1) $ 41,825 $ 34,830 Receivables from Sale of Property $- 3,438 $ 4,129 Current Assets:
Cash and investments (Note 1) $ 101,013 $ 62,353 Receivables,less reserves 47,557 44,052 Materials and supplies, at average cost 10,178 10,260 Prepayments and other assets 502 611
$ 159,250 $ 117,276 Deferred Compensation Plan Assets (Note 6) $ 14,080 $ 13,028 Deferred Charges:
Nuclear Facility billings (Note 1) $ 16,931 $ 22,221 Unamortized financing costs (Note 1) 2,802 2,062 Other 373 1,341
$ 20,106 $ 25,624
$ 693,231 $ 646,982 LIABILITIES AND CAPITAL Accumulated Net Revenues (Note 1) $ 240,748 $ 230,637 Long-Term Debt (Note 3) $ 364,974 $ 307,108 l Commercial Paper Notes (Note 2) 25,915 55,915
$ 390,889 $ 363,023 Less--Current maturities (Note 3) 19,103 18,274
$ 371,786 $ 344,749 Current Liabilities:
Current maturities $ 19,103 $ 18,274 Accounts payable 15,489 18,739 Accrued lease payments 3,402 3,327 Other 9,494 9,298
$ 47,488 $ 49,638 Deferred Compensation Plan Liabilities (Note 6) $ 14,080 $ 13,028 Deferred Revenues (Note 1) $ 18,662 $ 8,338 Unamortized Payment Received for Refinancing Costs (Note 1) $ 467 $ 592
. $ 693,231 $ 646,982 The accompanying notes tofinancial statements are an integralpart of these statements.
l
NPPD ELECTRIC SYSTEM -
Statements of Revenues and Expenses and Accumulated Net Revenues for each of the 'Ihree Years in the Period Ended December 31,1995 1995 1994 1993 (Thousands)
. Revenues and Expenses:
Operating Revenues (Note 1) $ 452,402 $ 433,253 $ 396,012
^
Operating Expenses:
Power purchased-
~
Nuclear Facility and Power Supply System (Note 1) $ 266,607 $ 241,669 $ 225,517 Other 33,851 47,740 35,583 Production-Fuel 12,888 13,050 10,529 -
Operation and maintenance 16,376 - 15,274 14,677 Other operation and maintenance 46,059 44,775 42,126 Lease payments (Note 1) 15,235 14,771 14,071 Depreciation and amortization (Note 1) 35,624 33,173 31,920 Payments in lieu of taxes 5,935 5,580 5,360 Total operating expenses S 432,575 $ 416,032 $ 379,783 Net operating revenues $ 19,827 $ 17,221 $ 16,229 Interest and Other Revenues:
Allowance for funds used during construction $ 1,742 $ 1,574 $ 1,587 Interest and other 7,159 5,650 7,189 Total interest and other revenues $ 8,901 $ 7,224 $ 8,776 Net revenues before other deductions $ 28,728 $ 24,445 $ 25,005 Other Deductions:
Bond interest $ 16,382 -$ 17,115 $ 18,172 Other interest 2,235 1,845 1,684 Total other deductions $ 18,617 $ 18,960 $ 19,856
' Net Revenues Before Extraordinary Charges (Note 1) $ 10,111 5 5,485 $ 5,149 Extraordinary Charges Due to Early Extinguishment of Debt ,
(Note 10) - - 3,169 Net Revenues $ 10,111 $ 5,485 $ 1,980 Accumulated Net Revenues (Note 1):
Beginning balance 230,637 225,152 223,172 '.
Ending balance $ 240,748 $ 230,637 $ 225,152 ,
The accompanying notes tofinancial statements are an integralpart of these statements.
.-- -.. . . = . . - - _ , - - . . - - - - - .. - . - . _ . - -
- j. NPPD CLECTRIC GYOTEM Statements of Cash Flows for each of the Three Years in the Period Ended December 31,1995 1995 1994 1993
- i. Cash flows provided by (used in) opetating activities: - (Thousands)
- Net operating revenues $ 19,827 $ 17,221 - $ 16,229 Adjustments to reconcile net operating revenues to net cash
(. provided by operating activities:
Depreciation and amortization 35,624 33,173 31,920 Vehicle depreciation charged to operations and capital 1,331 1,363 1,127 Reduction of deferred charges-Nuclear Facihty 15,708 1,333 -
. Changes in assets and liabilities:
Advance to Power Supply System - - 6,100 .
Receivables,less reserves (3,505) 26,090 (19,192)
Materials and supplies 82 1,463 (1,527)
Prepayments and other assets 109 2 (8)
Addition to deferred charges-Nuclear Facility (10,418) (3,905) (3,123)
Other deferred charges %8 (48) (753)
Accounts payable and accrued leased payments (3,176) (1,099) 1,040 Deferred revenues 10,324 (20,489) (3,315)
Other liabilities 669 (420) (462)
Net cash flows provided by operating activities $ 67,543 $ 54,684 $ 28,036 ,
. Cash flows provided by (used in) capital and related financing activities:
Utility plant additions $ (38,404) $ (49,800) $ (41,336)
Other non-operating revenues 1,432 1,343 1,700 Proceeds from notes receivable for sale of property 691 885 905 Repayment of long-term debt - principal (18,385) (17,537) (14,213)
Payment of interest on long-term debt (16,121) (16,839) (17,883)
Repayment of notes payable - principal (30,000) - -
Payment ofinterest on notes payable (2,235) (1,845) (1,684)
Net change in Debt Reserve Account (6,995) .(63) 421 Issuance of long-term debt 75,879 - 115,491 Issuance of notes payable - 10,000 -
Early extinguishment of long-term debt - - (116,798)
Net cash flows (used in) capital and related financing activities $ (34,138) $ (73,856) $ (73,397) i Cash flows provided by (used in) investing activities: I I
Interest on cash and cash equivalents $ 408 $ 369 $ 829 Interest from investments 5,320 3,938 4,660 Sale of available-for-sale securities 329,768 192,411 179,491 Purchase of available-for-sale securities (376,579) (181,093) (153,321)
Amortization of accrued interest (666) - -
Net change in gross unrealized gains on available-for-sale securities (279) - -
Net change in gross unrealized losses on available-for-sale securities (1) - -
Net cash flows provided by (used in) investing activities 5 (42,029) $ 15,625 $ 31,659 Net (decrease)in cash $ (8,624) $ (3,547) $ (13,702)
Cash beginning of year 26,088 29,635 43,337 Cash end of year $ 17,464 $ 26,088 $ 29,635 The accompanying notes tofinancial statements are an integralpart of these statements. ,
I I
i I
NPPD ELECTRIC CYLTEM Supplemental Schedules-Calculation of Debt Service Ratios in accordance with the Electric System Bond Resolution for each of the Three Years in the Period Ended December 31,1995 1995 1994 1993 (Thousands)
Operating revenues (Note 1) $ 452,402 $ 433,253 $ 396,012 Operating expenses (Note 1)* (432,575) (416,032) (379,783)
Net operating revenues $ 19,827 $ 17,221 16,229 Interest and other revenues 8,90' 7,224 8,776 Interest deductions (18,617) (18,960)
(19,856)
Extraordinary charges due to early extinguishment of debt - -
(3,169)
Net revenues $ 10,111 $ 5,485 1,980 Add:
Accrued revenues included in operating revenues (Note 1) $ 8,303 $ (19,775) $ (3,315)
Interest deductions 18,617 18,960 19,856 Depreciation and amortization 36,955 34,536 33,047 Extraordinary charges due to early sxtinguishment of debt - - 3,169
$ 63,875 $ 33,721 $ 52,757 Deduct:
Provision for operating expense reserve (Note 1)** $ 8,303 $ (19,775) (3,315)
Allowance for funds used during construction 1,742 1,574 1,587 Investment income retained in construction funds 439 717 1,274
$ 10,484 $ (17,484) $ (454)
Net revenues available for debt service under the Electric System Bond Resolution (Note 1)* $ 63,502 $ 56,690 $ 55,191 Amounts deposited in the Electric System Debt Service Account:
Principal $ 18,100 $ 17,365 $ 14,045 Interest 16,382 17.115 18,172
$ 34,482 $ 34,480 $ 32,217 Ratio of net revenues available for debt service to debt service deposits (Note 1) 1.84 1.64 1.71 The accompanying notes tofinancial statements are an integralpart of these statements.
The reduction of deferred charges is reflected in these summary statements as Operating Expenses to avoid overstating Net revenues. These deferred charges werefunded by commercialpaper notes and other matured '
short-term indebtedness, which constitute subordinated indebtedness under the Electric System Bond Resolution.
The Electric Resolution requires subordinated indebtedness to be paidfrom the General Reserve Fund created under the Electric Resolution. ,
" The Electric Resolution defines Operating Expenses to includepayments into reserves in the Operating Fundfor the payment offuture operating expenses. The provistanfor operating expense reserve represents the net change in the cumulative surplus revenues in each respective yearfrom both wholesale and retail service.
f
EPPD ELECTRIC CYCTEM Notes to Financial Statements The District has long term lease agreements with 203 municipalities. Rese lease agreements obligate the District to make lease payments and pay for normal
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING property additions dunag the term of the lease. The POLICIES: District has recorded provisions, net of retirements, for amortization of leased plant additions of $9.1 million in A. Organization- 1995, $8.1 million in 1994, and $7.2 million in 1993.
The District has three separate divisions for These leased plant additions, which are fully reserved, accounting purposes as follows: totaled $93.2 million at December 31, 1995, and
$83.3 million at December 31,1994.
Electric System The District charges maintenance and repairs, Power Supply System including the cost of renewals and replacements of minor Nuclear Facility items of property, to maintenance expense accounts.
Renewals and replacements of property (exclusive of As required by Bond Resolutions, separate records are minor items of property, as set forth above) are charged to maintained for each division. The Electric System utility plant accounts. Upon retirement of property financial statements exclude the Nuclear Facility and subject to depreciation, the cost of property is removed Power Supply Sysym, for which financial statements are from the plant accounts and charged to the reserve for presented separately herein. The Electric System depreciation, along with the removal costs, net of salvage.
financial statements should be read in conjunction with I such other financial statements. C. Allowance for Funds Used During Construction Nebraska Public Power District, a public corporation (AFUDC)-
and a political subdivision of the State of Nebraska, is an This allowance, which represents the cost of funds electric utility which sells electric energy to wholesale and used to finance construction, is capitalized as a retail customers in the Midwest. The District's contracts component of the cost of utility plant and is credited to l and rate schedules specify the time period in which Interest and Other Revenues. The capitalization rate billings are to be paid after services are rendered. depends on the source of financing. The rate for j Accounting guidance followed in preparation of these construction financed with revenue bonds is based upon financial statements is provided by the Governmental the interest cost of each bond issue less interest income.
Accounting Standards Board (GASB). Absent GASB The rate for construction financed by revenues is based
{ standards on any particular situation, the pronouncements upon the weighted average rate of interest of the current of the Financial Accounting Standards Board (FASB) are outstanding borrowings. Construction financed on a presumed to apply, short-term basis with tax-exempt commercial paper The preparation of financial statements in conformity (TECP)is charged a rate based upon the weighted average with generally accepted accounting principles requires of TECP outstanding. For the periods presented herein, l management to make estimates and assumptions that the AFUDC rates for construction funded by revenue affect the reported amounts of assets and liabilities and bonds or revenues vary from 5.1% to 6.2%. For i disclosure of contingent assets and liabilities at the date of construction financed on a short-term basis with TECP, the financial statements and the reported amounts of the rate charged was 3.9% in 1995, and less than 3.0% in
, revenues and expenses during the reporting period. 1994 and 1993.
. Actual results could differ from those estimates.
D. Deferred Charges-B. Depreciation, Amortization and Afaintenance- Deferred charges as of December 31,1995, represents The District records depreciation over the estimated $16.9 million of Nuclear Facility billings for certain useful life of the property. Depreciation on Utility Plant capital additions. The District has written off deferred was approximately 3% in each of the years charges of $15.7 million in 1995, $1.3 million in 1994, ended December 31,1995,1994, and 1993. and $0 in 1993 and included such reductions in power purchased expense. Future write-off of deferred charges
EPPD ELECTRIC CYCTEM are expected to be as follows: 1996 - $9.1 million; tables. The specific identification method was used in 1997 - $7.8 million. computing realized gains or losses.
E. Unamorti:ed Fmancing Costs- AVAILABLE-FOR-SALE SECUdlTIES These costs represent issuance expenses on all bonds and are being amortized over the life of the respective DEBT SECURITIES ISSUED BY TiiE bonds using the bonds outstanding method. U.S. TREASURY ANDOTilER ,
U.S. GOVERNMENT CORPORATIONS AND AGENCIES F. Unamortized Payment Received for Refinancing Costs- December 31,1995 This reimbursement from the Nuclear Facility was for Debt Reserve certain refinancing costs of the Electric System incurred Investments Account in 1968 and is being, amortized over the life af the (Thousands) 1968 Revenue Bond issue using the bonds outstanding Amonized Cost $ 83,289 $ ?9,926 method. Gmss Unrealized Gains 296 1,896 Gross Unrealized Losses 36 8 G. Cash andInvestments-December 31. 1995 December 31,1994 1994 (Thousands) Debt Reserve Debt Service Fund $ 4,275 Investments Acount Revenue Fund 12,478 21,085 (Thousands)
Operating Fund 4,737 4,706 Amortized Cost $ 36,304 $ 34,627 Construction Funds 38,897 12,679 Gr ss Unrealized G ins 26 312 Gross Unrealized Losses 46 116 Commercial Paper Account 9,067 8,870 Approximate Market Value 5 36.284 5 34.823 Reserve and Contingency Fund 1,281 1,267 General Reserve Fund 30,278 13,746 The U. S. Treasury and Government Agencies Securities, at
$ 101,013 $ 62,353 December 31,1995, have maturity ranges as shown below:
Investments Debt Reserve Account Maturity Market Amortized Market Amortized Funds consist of $83.5 million of investment Range value cost value cost securities and $17.5 million of cash deposits at Less than (Thousands)
December 31,1995, and $36.3 million of investment 1 year $ 75,890 $ 75,789 $ 13,583 $ 13,349 sectaities and $26.1 million of cash deposits at 1 - 5 years 7.659 7.500 28.231 26.577 December 31,1994.
TOTAL $ 83,549 $ 83,289 $ 41,814 $ 39,926 On January 1,1994, the District adopted the provisions of Statement of Financial Accounting Cash deposits, primarily interest bearing, at Standards No. I15 (FAS I15), " Accounting for Certain December 31,1995, and throughout much of the year, Investments in Debt and Equity Securities." In were covered by federal depository insurance or accordance with the Statement, prior period financial unregistered U.S. Government and municipal securities statements have not been restated to reflect this change in held by various depositories. Investments at December 31,
- accounting principle. The cumulative effect of adopting 1995, were in unregistered U.S. Government securities this Statement was considered immaterial and there was and Federal Agency obligations held in the District's name ,
no impact on Net Revenues. by the custodial banks. .
Unrealized holding gains and losses for securities The Debt Reserve Account is valued semi-annually at classified as available-for-sale are reponed in Deferred January I and July I at the lower of cost or market in Revenues until realized. accordance with requirements of the Electric System The carrying amounts and approximate market values Revenue Bond Resolution (Electric Resolution).
of investment securities are summarized in the following
NPPD ELECTRIC SYSTEM II. DeferredRevenues- Construction Funds which is not subject to the deferred As provided in the Electric Resolution, the District revenue accounting described in Note IH. This interest covenants to charge rates for wholesale and retail electric income was S .8 millicn in 1995, $.7 million in 1994, and service so that revenues will be sufficient to pay annual $1.3 million in 1993.
operating expenses including: 1) Nuclear Facility and Power Supply System charges, 2) operating expenses 2. COMMERCIAL PAPER NOTES:
other than depreciation,3) debt service, and 4) certain capital additions. The District is authorized to issue up to $75.0 million Variations between actual energy costs (primarily fuel) of commercial paper notes. A credit agreement is and the estimated energy costs included in the basic rates maintained with a bank to support the sale of the are recovered by a Production Cost Adjustment (PCA). commercial paper notes. This credit agreement expires in Billings for the PCA provide for the recovery of the September 1997. The effective interest rates on variation in energy costs either in current or future years. outstanding notes for 1995 and 1994 were 4.1% and In the event the District's rates for wholesale and retail 2.8%, respectively, service, excluding the PCA, result in a surplus or deficit The proceeds of these notes are being used (1) to in revenues during a rate period, such surplus or deficit is finance certain capital additions of the Nuclear Facility, taken into account in projecting estimated revenue (2) to provide short-term financing for certain capital requirements for future rate periods. Such treatment of additions of the Electric System, and (3) for other lawful wholesale revenues is stipulated by the District's purposes of the District.
long-term wholesale power supply contracts. In 1995, $30.0 million of commercial paper notes The surpluses and deficits which arose in current and were retired. The $25.9 million of commercial paper prior years from the PCA, wholesale, and retail notes outstanding at December 31,1995, are anticipated service have been accounted for in these f'mancial to be retired by future collections through electric rates statements by either a deferral or an accrual of revenue. and long-term borrowings. The carrying value of In addition, unrealized gains and losses related to commercial paper notes approximates market.
investments held for sale are included in deferred In January 1996, the District issued an additional revenues. The cumulative surplus at December 31,1995, $30.0 million of commercial paper notes. The proceeds to be reflected in future revenue requirements is from this issue, together with other available funds, were approximately $18.7 million. used to currently refund the Electric System Revenue Bonds,1978 Series A. The amount outstanding at
- 1. Revenue Recognition- December 31,1995, for this Series was $43.5 million.
Wholesale revenues are recorded in the period in which service is rendered, and retail revenues are 3. LONG-TERM DEBT:
recorded in the month retail customers are billed.
Consequently, revenues applicable to service rendered to In June 1995, the District issued Electric System retail customers from the period covered by the last billing Revenue Bor.ds, 1995 Series A, in the amount of in a year to the end of the year are not recorded as $78.0 million for the principal purpose of paying the costs revenues until the following year. Operating revenues are of acquisition and construction of various improvements also impacted by the surplus or deficit in revenues as and additions to the Electric System. Proceeds of the
, described in Note IH. 1995 Series A Bonds, together with other available funds, were also used to increase the Debt Reserve Account to an J. Accumulated Net Revenues- amount equal to the maximum annual debt service on all
- Accumulated net revenues consist primarily of outstanding Electric System Revenue Bonds.
cumulative operating revenues collected for utility plant In March 1996, the District called the 1978 Series A additions net of related accumulated depreciation. The Bonds as indicated in Note 2.
remaining accumulated net revenues will be fully offset by The debt service payments of the Electric System future depreciation expense. In addition, accumulated net Revenue Bonds, including the effect of refunding the revenues include cumulative interest income earned on 1978 Series A Bonds, are $33.9 million in 1996, and
NPPD ELECTRIC CYGTEM
$34.6 million for each of the years 1997 through 2000 and 4. RETIREMENT PLAN:
principal payments, as a component of debt service payments, are $16.5 million, $18.2 million, $19.1 million. The District has a retirement income plan covering its
$20.0 million, and $21.0 million for each of the years regular full-time employees, substantially all of whom 1996 through 2000, respectively. have elected to participate. Employee's contributions to The fair value of existing debt at December 31,1995, the plan are based on salary, and the District's is determined using rates currently available to the contributions are allocated to each employee's trust
- District.The fair value is estimated to be $372.2 million. account based on the employee's contributions to the plan.
The plan provides for retirement income equal to the total December 31. 1995 1994 of the employee's trust account, including trust earnings.
(Thousands) The District's contribution was $7.8 million for 1995, Revenue Bonds: $7.8 million for 1994, and $7.6 million for 1993.
1995 Series A Serial Bonds 5. POSTRETIREMENT BENEFITS:
1997-2009 4.10% - 6.00% $ 18,735 $ -
Term Bonds The District, for employees hired on or prior to 2010-2012 5.50% 6,475 -
December 31, 1992, pays the entire cost of certain 2013-2014 5.40 % 4,930 -
hospital-medical and life insurance premiums for these 2015-2027 5.25 % 47,935 -
employees when they retire. Substantially all of the l 1993 Series A District's retired and active employees are eligible for Serial Bonds such benefits. Currently, the cost of these benefits is 1995-2009 3.90 % - 5.40 % 97,490 104,635 recognized as expense as the premiums are paid. The 1992 Series A total cost of postretirement hospital-medical and life Serial Bonds insurance benefits was $2.0 million for 1995; $2.0 million 1995-2002 4.90 % - 5.70 % 46,255 51,645 for 1994, and $2.4 million for 1993.
Term Bonds The District amended tiie' plan effective January 1, 2003-2005 6.00 % 25,920 25,920 1993. Employees hired on or after that date must 2006-2021 6.25 % 49,450 49,450 participate in the plan as an active employee the last five years of employment in order to quahfy for these benefits.
1978 Series A In addition, employees hired on or after January 1,1993, Serial Bonds are subject to a contribution cap that limits the District's 1995-2007 5.50 % - 5.75 % 43,505 45,990 portion of the cost of such coverage to the full premium I973 b*,
- the year the employee or retired employee reached age 65, or the year in which the employee retires if older than Serial Bonds age 65. Any increases in the cost of such coverage in 1995-2002 5.00 % 3,900 4,350 subsequent years would be paid by the retired employee.
1968 Series Statement 12, Disclosure of Information on Term Bonds Postemployment Benefits Other Than Pension Benefits by 1995-2002 5.10% 22,565 25,195 State and Local Governmental Employees (OPEB), issued by the GASB provides that entities should provide certain
$367,160 $307,185 .
minimum disclosures regarding the OPEB provided. -
Lease Purchase Paysbles- Additionally, Statement 12 provides for differing methods 2.00%, due 1995 to 2005 1,889 2,064 for financing OPEB. The District, as indicated above, Unamortized Bond Discount (4.075) (2,14 l } currently funds OPEB on a " pay-as-you-go" basis and has
$364,974 $307,108 n t elected to fund OPEB through advance funding on an actuarially determined basis. The District does not contemplate any changes to the method for funding OPEB
NPPD ELECTRIC SYSTEM until results of the GASB's project on recognition and 8. CAPITAL ADDITIONS:
measurement of OPEB are available for analysis.
The Electric System construction plan includ s
- 6. DEFERRED COMPENSATION PLAN: authorization for estimated expenditures of $55.5 million for 1996. These expenditures will be funded from The District offers its employees a deferred revenues, proceeds from the 1995 Series A Bonds, and compensation plan created in accordance with Internal other available funds.
Revenue Code Section 457. All amounts of compensation
- 9. FERC HYDROELECTRIC PROJECT LICENSES:
deferred under the plan, all property and rights purchased with su;h amounts, and all income attributable to such The District is currently seeking a new long-term amounts, property, or rights are (until made available t license from the Federal Energy Regulatory Commission the employee or other beneficiary) solely the property and (FERC) for the District's hydroelectric Project No. I835.
rights of the District (without being restricted to the Project No.1835 includes the North Platte hydroelectric provisions of benefits under the plan), subject only to the generating station and related facilities which are part of claims of the District's general creditors. The District has the Electric System. Lands and waters of Project recorded the assets of its deferred compensation plan and No.1835 are utilized by Gerald Gentleman Station for the corresponding liability to reflect its fiduciary cooling water purposes. Gerald Gentleman Station is part responubility under the plan. In the past, the plan assets of the Power Supply System.
have been used for no purpose other than to pay benefits.
The Central Nebraska Public Power & Irrigation The District believes it is unlikely that it will use the District (Central) is currently seeking a new long term assets to satisfy the claims of general creditors in the license for FERC Project No.1417. Project No.1417 future. The plan is administered by The Equitable Life includes the Kingsley Dam, Lake McConaughy, four Assurance Society of the United States.
hydroelectric generating plants and related facilities.
The relicensing of both projects is addressing numerous
- 7. LITIGATION:
environmental issues including, among other things, species protected under the Endangered Species Act. In On May 19,1995, MidAmerican Energy Company, a order to obtain these new long-term licenses, the District 50 percent participant in the District's Cooper Nuclear and Central could be required to meet certain terms and Station, filed suit against the District alleging that the conditions which may adversely impact the operations of District failed to operate and maintain Cooper Nuclear the project facilities and Gerald Gentleman Station. The Station in accordance with the Power Sales Contract. On District is unab!e to predict the nature of the terms and May 23,1995, Lincoln Electric System, a 12.5 percent conditions that will be contained in the new licenses for participant in the District's Cooper Nuclear Station, filed the projects, suit, making similar allegations. The District has been As of December 31,1995, $19.0 million of costs and intends to continue defending these cases vigorously; incurred related to obtaining the new long-term license for however, no assurance can be given at this time as to the Project No.1835 are being capitalized. When the license outcome of either case. The District has not accrued any s obtained these costs will be amortized over the life of amount for these claims, which in the aggregate, could the license, total $41 million.
A number of other claims and suits are pending against
- 10. EXTRAORDINARY CHARGES DUETO EARLY
, the District for alleged damages to persons and property EXTINGUISHMENT OF DEBT:
and for other alleged liabilities arising out of matters usually incidental to the operation of a utility such as the The District issued $116.6 million of Electric System
- District. In the opinion of management, the exposure Revenue Bonds,1993 Series A, on March 1,1993. The under these claims and suits would not materially affect 1993 Series A Bonds were issued to refund the District's l the financial position of the District as of December 31, outstanding Electric System Revenue Bonds,1970 Series, 1995. 1977 Series A and 1979 Series A. The difference
- between the reacquisition price and the net carrying amount of the extinguished debt of $3.2 million was recognized as an extraordinary charge in 1993.
NPPD POWER CUPPLY CYCTEM Report ofIndependent Accountants To the Board of Directors Nebraska Public Power District:
We have audited the accompanying special-purpose statements of assets and liabilities of the Power Supply System of Nebraska Public Power District (a public corporation and political subdivision of the State of Nebraska) as of December 31,1995 and 1994, and the related special-purpose statements of revenues and costs for each of the three years in the period ended December 31,1995. These financial statements are the responsibility of the District'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 Government Auditing Standards.Those standards require 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, evid:nce supporting the amounts and disclosures in the financial 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.
The accompanying special-purpose financial statements referred to above have been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Power Supply System Revenue Bond Resolution adopted by the District on September 29,1972, as supplemented, as described in Note IB, and are not intended to be a presentation in conformity with generally accepted accounting principles.
In our opinion, the accompanying special-purpose financial statements of the Power Supply System of Nebraska Public Power District present fairly, in all material respects, the assets and liabilities as of December 31,1995 and 1994, and its revenues and costs for each of the three years in the period ended December 31,1995, on the basis of accounting described in Note IB.
In accordance with Government Auditing Standards, we have also issued a report dated March 9,1996 on our consideration of Nebraska Public Power District's internal control structure and a report dated March 9,1996 on its compliance with laws and regulations.
Coopers & Lybrand L.L.P.
Omaha, Nebraska March 9,'1996 .
9
NPPD POWER CUPPLY CYSTEM Statements of Assets and Liabilities December 31,1995 and 1994 Prepared Pursuant to Requirements of the Power Supply System Revenue Bond Resolution 1995 1994
('Ihousands)
ASSETS Utility Plant, at Cost (Note 1) $ 817,689 $ 765,542 ,
Less-Reserve for depreciation (Note 1) 154,031 131,195 Amounts funded from revenue (Note 1) 16,114 18,687
$ 647,544 5 615,660 Prepaid Capital Costs (Note 3) $ 71,531 5 73,119 Cash and Investments (Note 1): )
Debt reserve account $ 47,642 $ 43,486 Debt service fund 4,290 -
Reserve and contingency fund 20,005 16,032 Additions and improvements account 12,862 10,634 Construction funds 24,451 -
Revenue fund 733 694 Operating fund 24,031 22,113 General reserve fund 13,604 25,499
$ 147,618 $ 118,458 Accounts Receivable $ 296 $ 1,644 Interest Receivable $ 2,672 $ 1,488 Fuel Inventory, at average cost $ 6,668 $ 6,9 %
Deferred Charges and Other Assets (Note 1) $ 38,143 $ 38,239
$ 914,472 $ 855,514 LIABILITIES Revenue Bonds (Notes 4 and 5):
1993 Series Serial 1995-2009 4.30 % 6.10 % $ 172,065 $ 180,385 Term 2010-2014 6.125 % 96,080 96,080 2015-2019 5.75 % 58,890 58,890 1993 Series C Serial 1995-2007 3.70 % - 5.30 % 75,450 80,160 Term 2008-2013 5.25 % 47,120 47,120 1993 Series C Serial 1995-2009 3.50 % - 5.00 % 236,130 248,435 Term 2010-2016 5.00 % 119,695 119,695 1995 Series A Serial 1998-2010 4.10 % - 6.00 % 18,325 -
i . Term 2011-2012 5.50% 6,330 -
- 2013 2014 5.375 % 4,815 -
2015-2021 5.25 % 21,365 -
2022-2027 5.25 % 25,500 -
$ 881,765 $ 830,765 Accounts Payable and Other Accrued Liabilities $ 18,531 $ 10,727 Operating Reserves (Note 1) $ 14,176 $ 14,022
$ 914,472 5 855,514 The accompanying notes tofinancial statements are an integralpart of these statements.
A
EPPD POWER SUPPLY C,YCTEM Statements of Revenues and Costs for each of the 'Ihree Years in the Period Ended December 31,1995 Prepared Pursuant to Requirements of the Power Supply System Revenue Bond Resolution 1995 1994 1993 (Thousands)
Revenues (Notes I and 2):
Sales to the Electric System $ 159,380 $ 161,184 $ 142,782
- Investment and other income 7,970 6,387 14,371 Total revenues $ 167,350 $ 167,571 $ 157,153 Costs (Note 1):
Operating expenses-Production-Fuel (Note 7) $ 70,673 $ 62,574 $ 62,922 Operation and maintenance (Note 3) 22,744 30,693 25,656 Provisions for operating reserves (Note 1) - - -
General and admimstrative 6,117 6,500 14,929
$ 99,534 $ 99,767 $ 103,507 Debt service-Principal (Note 1) 25,335 24,470 5,130 Interest 42,481 43,334 48,516 Total costs $ 167,350 $ 167,571 $ 157,153 The accompanying notes tofinancial statements are an integralpart of these statements.
Notes to Financial Statements B. Basis ofAccounting-Revenues are recognized and billed at an amount
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING equal to costs as defined by the Power Supply System POLICIES: Revenue Bond Resolution (Power Supply Resolution) which include operating expenses - (excluding A. Organization- depreciation), and debt service on the revenue bonds, less The District has three separate divisions for investment income. Revenues are computed and billed so accounting purposes as follows: that no equity is accumulated in the Power Supply System.
Revenues and costs as defined by the Power Supply Electric System Resolution differ in the following respects from generally
- Power Supply System accepted accounting principles:
Nuclear Facility (i) Amortization of the debt principal is included as a cost in the accompanying Statements of Revenues -
As required by Bond Resolutions, separate records are and Costs as " Debt service-Principal."
maintained for each division. The Power Supply System Depreciation is not recorded as a cost. Had the financial statements exclude the Electric System and District provided straight-line depreciation over a Nuclear Facility, for which financial statements are 40-year life rather than including amortization of debt presented separately herein. The Power Supply System principal over the same period, costs would have financial statements should be read in conjunction with decreased $4.4 million in 1995, decreased such other financial statements. $4.5 million in 1994, increased $13.6 million in 1993,
NPPD POWER CUPPLY CYLTEM and accamulated depreciation through December 31, D. Cash andInvestments-1995, would have increased costs approximately Funds consist of $134.0 million of investment
$74.0 million. The reserve for depreciation shown on securities and $13.6 million of cash deposits at the Statements of Assets and Liabilities was provided December 31,1995, and $103.0 million of investment by recording amounts equal to repayment of debt securities and $15.5 million of cash deposits at principal. Upon retirement of property subject to December 31,1994.
depreciation, the cost of property is removed from Cash deposits, primarily interest bearing, at plant accounts and charged to the reserve for Isecember 31,1995, and throughout much of the year, depreciation, along with the removal costs, net of were covered by federal depository insurance or salvage. unregistered U.S. Government and municipal securities (ii) Previous billings to provide capital for held by various depositories. Investments at December 31, unewals and replacements of property and capital 1995, were in unregistered U.S. Government securities additions are included in the accompanying statements and Federal Agency obligations held in the District's name as " Operating Reserves" and "Provisior.s for operating by the custodial banks.
reserves." Under generally accepted accouging The Debt Reserve Account and the Reserve Account principles, capital additions and provisions for in the Reserve and Contingency Fund are valued renewals and replacements are not expenses but semi-annually at January I and July I at the lower of cost (exclusive of minor items of property) are charged to or market in accordance with requirements of the Power utility plant. Renewals and replacements of property Supply Resolution. Gains or losses on valuations are and capital additions funded from revenues are fully included in investment income.
reserved. Renewals and replacements and capital additions are currently being funded from existing E. Mmemarges-Costs arising from the termination of incomphte bond proceeds that have been transferred to the generation and transmission projects are being amortized General Rescue Fund.
ver the life of the bonds, the proceeds of which were (iii) Interest income on construction fund used in part to pay these costs. This amortization is investments is credited to utility plant. Under included as part of debt service cost.
generally accepted accounting principles, such income would have increased revenues $0.8 million in 1995, 2. RATE COVENANT:
$0 in 1994, and $0.7 million in 1993.
(iv) Investment securities are classified as being The District is required under the Power Supply available-for-sale and are recorded at cost. Interest Resolution to charge rates for electric power and energy income on these investments is recognized ratably from the Power Supply System so that revenues will be at over the term of the securities. Under generally least sufficient to pay operating expenses, aggregate debt accepted accounting principles, the difference between service on the Power Supply System Revenue Bonds, the carrying value of the securities and the fair value amounts to be paid into the Debt Reserve Account and is to be recognized as a net amount in equity. Had this Reserve and Contingency Fund, and all other charges or method been followed, Cash and Investments as of liens payable out of revenues of the Power Supply December 31, 1995, would have increased by System. The debt service payments of the Power Supply
$2.7 million and Accounts Receivable would have System Revenue Bonds are $71.9 million in 1996 and decreased by $2.7 million as the Power Supply System $72.9 million per year 1997 through 2000 and principal has no equity as stated above. payments, as a component of debt service payments, are l.
$26.3 million, $28.4 million, $29.6 million, C. Utility Plant- $30.8 million, and $32.2 million for each of the years
. Interest expense, less interest earned on investment 1996 through 2000, respectively, securities, all financing costs and all other costs related to construction projects are capitalized- 3. PREPAID CAPITAL COSTS:
Prepaid capital costs are associated with the purchase of the capacity of a 50 MW hydroelectric generating
i C' PPD POWER CUPPLY CY3 TEM facility owned and operated by The Central Nebraska In June 1995, the District issued Power Supply System Public Power and Irrigation District (Central). The Revenue Bonds,1995 Series A, in the amount of prepayment is being amortired over the life of the bonds, $76.3 million. Proceeds from the bond issue were used for the proceeds of which were used to pay these costs. The the purchase of the Canady Station Steam Plant from amortization is included as part of debt service cost. As Central and construction costs associated with the mentioned in Note 4, certain costs were incurred during Pauline-Moore Transmission Line. Net interest expense 1993 to refund Power Supply System Revenue Bonds. A through December 1996 and bond issuance costs of $2.7 -
portion of these bond issuance costs ($9.1 million) which million are being treated as construction and acquisition were associated with the refunding of the original bonds costs. Proceeds of the 1995 Series A Bonds, together with used for the prepayment of capacity were capitalized. other available funds, will also be used to increase the These costs will be amortized over the remaining life of Debt Reserve Account to an amount equal to maximum the bonds as a component of debt service. annual interest on all Power Supply System Bonds to be The District has an agreement whereby Central makes outstanding after issuance of the 1995 Series A Bonds.
available all of the production of the facility and the The fair value of existing debt at December 31,1995 District pays all costs of operating and maintaining the is determined using rates currently available to the facility plus a charge based on the amount of energy District. The fair value is estimated to be $879.8 million.
delivered to the District. Costs of $1.0 million in 1995,
$0.8 million in 1994, and $1.0 million in 1993 are 5. DEFEASANCE OF DEBT:
included in " Production-Operation and maintenance."
The Power Supply System Revenue Bonds,
- 4. LONG TERM DEBT: 1986 Series, were defeased by placing a portion of the proceeds from the 1993 Series Bonds in an irrevocable In January 1993, the District issued Power Supply trust account with an escrow agent. Such funds were used System Revenue Bonds,1993 Series in the amount of to purchase direct obligations of the Ur.ited States
$346.4 million for the purpose of refunding Power Supply Government, the principal of and interest on which is System Revenue Bonds,1978 Series A and advance sufficient to pay for all future debt service payments on refunding Power Supply System Revenue Bonds, the old bonds. The defeased bonds are treated as 1986 Series. In March 1993, the District issued Power extinguished debt for financial reporting purposes and Supply System Revenue Bonds,1993 Series B in the have been removed from the Statements of Assets and amount of $132.6 million for the purpose of refunding the Liabilities. The defeased ba ds were called and Power Supply System Revenue Bonds,1976 Series B. In redeemed from proceeds in the iaevocable trust account addition, in September 1993, the District issued Power on January 1,1996.
Supply System Revenue Bonds,1993 Series C in the The Power Supply System Revenue Bonds, amount of $381.4 million to refund Power Supply System 1986 Series were issued to advance refund the outstanding Revenue Bonds,1972 Series and 1977 Series A. Power Supply System Revenue Bonds,1985 Series. The Bond issuance costs for all issues totaled $36.2 million 1985 Bonds were defeased by placing the proceeds from consisting of $16.0 million for original issue discount, the 1986 Bonds in an irrevocable trust account with an
$6.0 million for underwriting fees, $1.0 million for escrow agent to provide for all future debt service issuance costs, and $13.2 million for call premiums. Of payments on the old bonds. Accordingly, the trust this amount $8.6 million has been presented in the account assets and the liability for the defeased bonds are Statements of Revenues and Costs under " Production - not included in the District's financial statements. The .
Operation and maintenance." If this transaction had been defeased bonds were called and redeemed from proceeds recorded under generally accepted accounting principles, in the irrevocable trust account on January 1,1995, the charge in 1993 would have been $30.3 million. The
- issuance of the bonds will result in cumulative gross debt 6. CAPITAL ADDITIONS:
service savings of approximately $86.8 million and the District will obtain an economic gain (difference between The Power Supply System construction plan includes the present value of the debt service of the refunded and authorization for estimated expenditures of $17.6 million refunding bonds) of approximately $47.2 million. for 1996. These expenditures will be funded from existing
Y NPPD PCWER SUPPLY SYSTEM bond proceeds that have been transferred to the General Reserve Fund and proceeds from the 1995 bond issue.
- 7. LOAL SUPPLY AND TRANSPORTATION AGREEMENTS:
The District has in existence a coal supply agreement which permits the District to purchase coal for an initial
. terrn ending December 31,1996. The agreement provides for the District to purchase a minimum of 2,700,000 tons and all requirements up to a maximum of 3,800,000 tons through 1996. The District also has in existence two agreements which provide for, among other things, transportation of coal to Gerald Gentleman Station. One contract expires December 31,1996, and the other expires December 31,2002. Both transportation contract rates are escalated or de-escalated pursuant to an index promulgated by the Interstate Commerce Commission.
- 8. LITIGATION:
A number of claims and suits are pending against the District for alleged damages to persons and property and for other alleged liabilities arising out of matters usually incidental to the operation of a utility such as the District.
In the opinion of management, the exposure under these claims and suits would not materially affect the financial position of the District as of December 31,1995.
O 4
NPP3 EUCLEAR FACILITY Report ofIndependent Accountar..e To the Board of Directon Nebraska Public Power District:
We have audited the accompanying special-purpose statements of assets and liabilities of the Nuclear Facility of ,
Nebraska Public Power District (a public corporation and political subdivision of the State of Nebraska) as of December 31,1995 and 1994, and the related special-purpose statements of revenues and costs for each of the three years in the period ended December 31,1995. These financial statements are the responsibility of the District'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 Government Auditing Standards. Those standards require 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 disclosures in the financial 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.
The accompanying special purpose financial statements referred to above have been prepared for the purpose of complying with, and on the basis of, accounting requirements specified in the Nuclear Facility Revenue Bond Resolution adopted by the District on August 22,1968, as supplemented, as described in Note IB, an( are not intended to be a presentation in conformity with generally accepted accounting principles.
In our opinion, the accompanying special-purpose financial statements of the Nuclear Facility of Nebraska Public Power District present fairly, in all material respects, the assets and liabilities as of December 31,1995 and 1994, and its revenues and costs for each of the three years in the period ended December 31,1995, on the basis of accounting described in Note 1B.
In accordance with Government Auditing Standards, we have also issued a report dated March 9,1996 on our consideration of Nebraska Public Power District's internal control structure and a report dated March 9,1996 on its compliance with laws and regulations.
Coopers & Lybrand L.L.P.
Omaha, Nebraska March 9,1996 .
I
NPPD CUCLEAR FACILITY Statements of Assets and Liabilities December 31,1995 and 1994 Prepa:ed Pursuant to Requirements of the Nuclear Facility Revenue Bond Resolution 1995 1994 (Thousands)
ASSETS Utility Plant, at Cost 5 717,273 $ 694,382 Less-Reserve for depreciation (Note 1) 252,688 230,239 Amounts funded from revenue (Note 1) 307,242 284,757
$ 157,343 $ 179,386 Nuclear Fuel-Net of Amortization (Note 1) $ 81,209 $ 97,290 Cash and Investments (Note 1):
Debt service fund 5 6,421 $ 6,140 Debt reserve account 19,736 19,631 Reserve and contingency fund 16,499 22,956 Additions and improvements account 2,779 1,471 General reserve fund 595 1,654 Construction fund 4,632 3,470 Fuel reserve account 52,877 35,494 Operating fund 17,741 10,492 Revenue fund 256 387 Decommissioning fund (Note 4) 29,120 27,264
$ 150,656 $ 128,959 Accounts Receivable $ 18,090 $ 19,851 Interest Receivable $ 1,858 $ 1,436 Deferred Charges and Other Assets $ 18,536 $ 20,809 External Decommissioning Fund (Note I and 4) $ 69,766 $ 48,306
$ 497,458 $ 496,037 LIABILITIES Revenue Bonds (Note 9):
1992 Series Serial 1995-2003 4.00 % - 5.70 % $ 145,790 $ 158,070 1968 Series Term 1995 '002 5.10% 86,570 96,655
$ 232,360 $ 254,725 Operating Reserves (Note 1) $ 156,676 $ 154,357 Accounts Payable and Other Accrued Liabilities (Note 1) $ 20,704 $ 18,859 External Dec ggissioning Fund (Note 1 and 4) $ 69,766 $ 48,306 DOE Facilitic. Ox.. mmissioning Assessment (Note 8) $ 17,952 $ 19,790
$ 497,458 $ 496,037 The accompanying notes tofinancial statements are an integralpart of these statements. \
N l
NPPD EUCLEAR FACILITY -
Statements of Revenues and Costs for each of the Three Years in the Period Ended December 31,1995. Prepared Pursuant to e
' R_cguirements of the Nuclear Facility Revenue Bond Resolution 1995 1994 1993 (Thousands)
Revenues (Notes I and 2):
Sales-Electric System $ 101,290 $ 82,720 $ 85,569 MidAmerican Energy Company 101,290 82,719 85,568 Investment and other income 7,903 6,067 5,302 Total revenues $ 210,483 $ 171,506 $ 176,439 Costs (Note 1):
Operating expenses-Production-Fuel (Note 1) $ 22,158 $ 11,067 $ 18,914 Operation and maintenance 98,403 83,061 83,360 Provisions for operating reserves (Note 1) 42,848 28,693 26,615 General and administrative i1.693 13,308 13,334
$ 175,102 $ 136,129 $ 142,223 Debt service-Principal (Note 1) 22,613 21,660 19,722 Interest 12,768 13,717 14,494 Total costs $ 210,483 $ 171,506 $ 176,439 The accompanying notes tofinancial statements are an integralpart of these statements.
Notes to Financial Statements statements should be read in conjunction with such other financial statements.
1,
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES: B, Basis ofAccounting-Revenues are recognized and billed at an amount A. Organization- equal to costs as defined by the Nuclear Facility Revenue The District has three separate divisions for Bond Resolution (Nuclear Resolution) which include accounting purposes as follows: _ operating expenses (excluding depreciation), and debt service on the revenue bonds, less investment income.
Electric System Revenues are computed and billed so that no equity is Power Supply System accumulated in the Nuclear Facility, Nuclear Facility Revenues and costs as defined by the Nuclear Resolution differ in the following respects from generally As required by Bond Resolutions, separate records are accepted accounting principles: -
maintained for each division. The Nuclear Facility (i) Amortization of the debt principal is included financial statements exclude the Electric System and as a cost in the accompanying Statements of Revenues Power Supply System, for which financial statements are and Costs as " Debt service-Principal."
presented separately herein, The Nuclear Facility financial
NPPD NUCLEAR FACILITY Depreciation is not recorded as a cost. Had the (v) As part of a 1989 settlement agreement with District provided straight-line depreciation over a General Electric Company (GE), the District will 30-year life rather than including amortization of debt receive discounts on future purchases of certain principal over the same period, costs would have equipment and services for Cooper Nuclear Station decreased $9.0 million in 1995, decreased (CNS) and will receive credits and discounts under an
$8.0 million in 1994, and decreased $6.1 million in
%mendment to the fuel fabrication contract. The 1993. Accumulated depreciation through District amortized over a two-year period ending in December 31, 1995, would have increased costs 1991 the entire amount of the benefits allocated to approximately $16.8 million. The reserve for operations. Under generally accepted accounting depreciation shown on the Statements of Assets and principles, such benefits would be recognized when Liabilities was provided by recording amounts equal received which in the case of the settlement would be to repayment of debt principal. Upon retirement of over the next 15 years. This difference results in an property subject to depreciation, the cost of property increase in revenues during the two-year amortization is removed from plant accounts and charged to the
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period and increased costs thereafter. Negotiations reserve for depreciation, along with the removal costs, held with GE to determine the extension of discounts net of salvage. for future purchases of cenain equipment and services (ii) Billings to provide capital for renewals and that were to expire in 1994 resulted in a portion of the replacements of property, capital additions, and discounts being extended beyond 1994 and a write nuclear fuel are included in the accompanying down of the related receivable for a portion of the statements as " Operating Reserves" and " Provisions unused discounts that expired in 1994. The agreement for operating reserves." Under generally accepted stipulates that the dollar value of the settlement should accounting principles, capital additions and provisions not be disclosed.
for renewals and replacements are not expenses but (exclusive of minor items of property) are charged to C. Nuclear Fuel-utility plant. Provisions for working capital for The District has entered into several long term nuclear fuel are not expenses under generally accepted contracts for the various nuclear fuel components of accounting principles until the fuel is used. Renewals uranium concentrates, conversion, enrichment, and and replacements of property and capital additions fabrication. Nuclear fuel in the reactor is being amortized funded from revenues are fully reserved. on the basis of energy produced as a percentage of total (iii) Interest income on construction fund energy expected to be produced. Fees for disposal of fuel investments is credited to utility plant. Under in the reactor are being provided as part of the fuel cost Eenerally accepted accounting principles, such and collected through revenues of the Nuclear Facility.
income would have increased revenues $0.2 million in 1995,50.1 million in 1994, and $0.2 million in 1993. D. Cash andinvestments-(iv) Investment securities are classified as being Funds consist of $141.0 million of investment available for-sale and are recorded at cost. Interest securities and $9.7 million of cash deposits at income on these investments is recognized ratably December 31,1995, and $118.0 million of investment over the term of the securities. Under generally securities and $11.0 million of cash deposits at accepted accounting principles, the difference between December 31,1994.
the carrying value of the seccrities and the fair value Cas5 deposits, primarily interest bearing, at
, is to be recognized as a net amount in equity. Had this Decembtr 31,1995, and throughout much of the year, method been followed, Cash and Investments as of were covered by federal depository insurance or December 31, 1995, would have increased by unregistered U.S. Government and municipal securities
$2.2 million and Accounts Receivable would have held by various depositories. Investments at December 31, decreased by $2.2 million as the Nuclear Facility has 1995, were in unregistered U.S. Government securities no equity as stated above. Additionally, the External and Federal Agency obligations held in the District's name Decommissioning Fund would have increased by by the custodial banks.
$2.4 million had this method been followed. The Debt Reserve Account and the Reserve Account j in the Reserve and Contingency Fund are valued I
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NPP3 EUCERAR FACILITY semi-annually at January l 'and July 1 at the lower of cost beyond that necessary to terminate the District's operating or market in accordance with requirements of the Nuclear license. For purpose- of accumulating amounts for Resolution. Gains or losses on valuations are included in complete dismantlement and site restoration of CNS, the investment income. District is estimating the total decommissioning costs, in 1993 dollars, to be approximately $424 million.
- 2. RATE COVENANT: It is expected that the costs of decommissioning will be funded from revenues, certain reserve funds -
The District is required under the Nuclear Resolution established under the Nuclear Resolution, and surplus ;
to charge rates for electric power and energy from the funds derived from the ownership and operation of the. l Nuclear Facility so that revenues will be at least sufficient Nuclear Facility. The District anticipates sufficient funds to pay operating expenses, aggregate debt service on the will be available in accordance with the NRC Nuclear Facility Revenue Bonds, amounts to be paid into decommissioning rules to decommission CNS at the end -
' the Debt Reserve Account and Reserve and Contingency of its useful life. The District intends to periodically Fund, and all other charges or liens payable out of review the costs and methods of funding as a result of revenues of the Nuclear Facility. The debt service. changing conditions and requirements for payments of the Nuclear Facility Revenue Bonds are decommissioning. The next review is scheduled to be
$35.1 million per year for the years 1996 through 1998 performed in 1996.
and $35.0 million for the years 1999 and 2000 and principal payments, as a component of debt service 5. CAPITAL ADDITIONS:
payments, are $23.4 million, $24.5 million, I
$25.7 million, $26.9 million and $28.3 million for each of The Nuclear Facility construction plan includes the years 1996 through 2000, respectively. authorization for estimated expenditures of $11.3 million for 1996. These expenditures will be billed to participants
- 3. POWER SALES CONTRACTS: as " Provisions for operating reserves" on the basis of estimated cash flow requirements.
Under terms of a power sales contract with MidAmerican Energy Company (MEC), the District 6. CONTINGENCIES:
makes available one-half of the production of CNS to MEC with the balance available to the District's Electric Under the provisions of the Federal Price-Anderson System. MEC and the District's Electric System each pay Act, the District and all other licensed nuclear power plant a proportionate share of the nuclear fuel costs (based on operators could each be assessed for claims in amounts up energy actually delivered) plus one-half of all other costs ' to $79.3 million per unit owned in the event of any
- of the facility, nuclear incident involving any licensed facility in the The District has also agreed to make available, nation, with a maximum of $10.0 million per year per through its Electric System,12.5% of the output of CNS incident per unit owned. MEC would be liable to the to the City of Lincoln, Nebraska.
District for one-half of such assessment under the Power Sales Contract. To satisfy the obligation, the District has
- 4. PLANT DECOMMISSIONING COSTS: obtained a $5.0 million line of credit and MEC has deraonstrated its financial integrity and responsibility for Pursuant to regulations promulgated by the Nuclear $5.0 :eillion.
Regulatory Commission (NRC), the District established in As pan of the 1989 settlement agreement between GE -
July 1990, an external trust fund segregated from the and the District GE has agreed to store at its facility at District's assets in which amounts accumulated to pay the Morris, Illinois, the 1,056 sgnt nuclear fuel assemblies decommissioning costs of CNS are to be deposited. The from the first two core loadings et no cost to the District NRC prescribed minimum amount to be accumulated by until May 2002, which is the ext ration i of the current the District in said fund for decommissioning costs, in license for the GE facility. After tha. date, storage will be 1994 dollars, is approximately $383.6 million. This at no cost to the District so long as GE can maintain, amount does not include the cost of removal and disposal without certain additional costs, the NRC license for the of spent fuel or of nonradioactive structures and materials facility. If after May 2002, storage of the
NPPJ NUCLEAR FACILITY 1,056 a3semblies results in certain additional costs to GE 9. LONG-TERM DEBT:
then the District shall be responsible for such costs. Such costs would be collected through revenues of the Nuclear The fair value of existing debt at December 31,1995, Facility as part of fuel costs. is determined using rates currently available to the District. The fair value is estimated to be $236.5 million.
- 7. LOW-LEVELRADIOACTIVEWASTEDISPOSAL:
. 10. GENERALCONDITIONS:
The Low-Level Radioactive Waste Policy Amendments Act of 1985 (the "1985 Act") requires each On January 27,1994, at a public meeting, the Nuclear state to be responsible for providing for the availability of Regulatory Commission (NRC) identified CNS as a plant capacity for the disposal of low-level radioactive wastes with performance trending downward. On May 25,1994, generated within its borders except for certain defense CNS was voluntarily shut down by the District due to related radioactive wastes. Among other things, the concerns with plant equipment. On June 23,1994, at 1985 Act authorizes and encourages states to enter into another public meeting, the NRC updated the status of interstate compacts, subject to Congressional consent, to nuclear power plants under their jurisdiction. CNS was provide for the establishment and operation of regional identified as one of three plants which received a disposal facilities for low-level radioactive waste follow-up " trending" letter from senior NRC management generated within the states entering into a compact. discussing the continuing need to make improvements to Pursuant to the 1985 Act, Nebraska has entered into resolve NRC concerns about declining performance the Central Interstate Low-Level Radioactive Waste trends.
Compact (the " Central Interstate Compact") with the During the shut down period, the District incurred states of Arkansas, Kansas, Louisiana, and Oklahoma. certain non-budgeted, extraordinary operations and The Central Interstate Compact has been approved by maintenance costs in responding to operating and l each of said states and by Congress. regulatory concerns. In accordance with the Nuclear The District is a party to an agreement under which Resolution, these extraordinary costs can be funded by partial funding for the prelicensing costs of a amounts in the Reserve and Contingency fund.
proposed disposal facility has been provided by the Accordingly, the total costs reflected in the Statement of owners / operators of nuclear plants within the Central Revenues and Costs for the period ended December 31, Interstate Compact. 1994, do not include $6.1 million of extraordinary costs associated with the shut down. These costs were charged
- 8. DEPARTMENT OF ENERGY FACILITIES to Operating Reserves in the Statement of Assets and ASSESSMENT: Liabilities. These costs were originally paid with Operating funds. These amounts were reimbursed to the Under the provisions of the National Energy Policy Operating fund from the Reserve and Contingency fund Act adopted in 1992, the District is subject to assessments subsequent to year-end.
estimated to be $1.67 million per year (to be adjusted for On February 22,1995, CNS returned to commercial inflation) for a period up to 15 years for the purpose of generation of electricity with the NRC's concurrence. In ,
paying the costs of decontaminating and decommissioning June 1995 the NRC notified the District that CNS was no )
Department of Energy operated uranium enrichment longer a " downward trending" plant and that it appeared i facilities. Such assessments commenced in 1993 with two the corrective actions being taken were addressing the
.. scheduled payments made in 1994. The present value for NRC's concerns. Since returning to operation, CNS has such annual assessments for the 11 remaining years is operated at or near capacity based on an accredited approximately $18.0 rnillion. The District has recorded capability of 778 MW. A regular refueling and on the Nuclear Facility financial statements, the present maintenance outage was completed before the end of value of such annual assessments by recording a liability 1995 and should help make CNS available throughout and a matching deferred charge of approximately 1996, i
$18.0 million as of December 31,1995, and $19.8 million l' as of December 31,1994.
41
EPPD EUCLEAR FACILITY l1. LITIGATION:
A number of claims ano suits are pending against the District for alleged damages to persons and property and for other alleged liabilities arising out of matters usually incidental to the operation of a utility such as the District.
In the opinion of management, the exposure under these -
claims and suits would not materially affect the financial position of the District as of December 31,1995.
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i 4 KANSAS d msmission Network - 1995 9606110375-ol.
l BOARD OF DIRECTORS i
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Wayne E. llayd Chairman, Asturney, South Sioux City, sening since March I982 l Warren R. Cook First Mce Chairman. Ilusinessman. Norfolk, sening since January I987
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i b Doralene E. Weed Second Vice Chairman, Businesswomadflomemaker, Kearney. sening since January 1993 l Darreti ). Nelson Secretary, Farmer / Rancher: Oconto, serving since January 1985 e David L Unren CPA, Columbus, sening since January 1973 Q.Na
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$:* 3 'v. . s l l%ruce W. Gustafson Farmer / Rancher, lloidrege serving since January I983
- John D. Ifamilton Railroad Employce, Lincoln, l serving since January 1991
- Ralph E. flolitaster Agribusinessmadfarmer, Paxton, serving since January 1981 l
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. Rafph D. Johnson Economist. Lincoln, serving since January 1985 il Exs S. Tuplor Businessman. krk, serving since January 1979 e Gary G. Thompson Attorney, Beatrice, serving since January 1993
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SENIOR MANAGEMENT 1995 g
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William R. Mayhen President and CEO e Rohert L Gangel We President Finance and Administrati<m i
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L ,A A A William A. Merrill Vice President Operations e Guy R. florn bice President Nuclear e John R. McPhail General Counsel
, Mr. Gangel was Acting President and CEO from March to November.
- Mr. Gangel and Mr. Mernil have retired from NPPD.
SENIOR MANAGEMENT 1996 i hir. Ilorn was named Senior Vice President Energy Supply. In addition to Mr. llorn and Mr. McPhail, the following were appointed by Mr. Mayben as Senior Managers in 1996.
l Dennis C. Grennan Senior \ ice President Operations
- Marsin L Rict tice President Retail e Gary S. Westphal Vice President Wholesale Ronald D. Au he Lice Presideout Corporate Services e John it. Muriler Lice Presidens Nuclear
- William J. Fehrman \1ce President FossJ William Pa.! rata will awume the position of Vice Preddent lluman Resources & External Affairs etTectise April 1,1996.
The position of Vice President Corporate Planning & Development / Marketing has not yet been filled.
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