ML20134B696

North Carolina Electric Membership Corp,1984 Annual Rept

ML20134B696
Person / Time
Site:	Mcguire, Catawba, McGuire, 05000000
Issue date:	12/31/1984
From:	Hubbard J NORTH CAROLINA ELECTRIC MEMBERSHIP CORP.
To:
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ML20134B666	List: ML20134B664 ML20134B676 ML20134B696 ML20134B710
References
NUDOCS 8508160040
Download: ML20134B696 (21)

Text

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LeEMC Annual  :

Report .

1984 9

I ADO $5 h413 PDR

tm&ma Accounting toour Members '

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. Nonh Carolina's elecnic coopemtives con-duded an eventful and fast-paced year in 1984.

kwas thefustfullyearof operation for Nonh Carolinathegenerationand EMC, power supply and transmission ann of the orgaruzanon.The dose of the year saw $1.1 billion invested by our members in thejointly-owned Catawba NudearStanon. At year end, the Nudear Regulatory Commission had gmnted a full power license to Duke Power Company to commence the escalation ofpowerin Unit #1 of the station. Commercialoperation of the unitisexpectedbymid-year 1985.

Nonh Camlina EMC went to the publie market under tbe aus 3 ices ofCFC late in the year to market $140 million in floatin y' fixed-rate tax-exempt po! ution<ontml bonds to replace a ponion ofthe REA/FFB tinancing on Catawba.The G&T Board took this action to further reduce the cost of power to be produced by the plant. Other inno-vative methods of reducing the cost of ca 3 ital to our capital-intensive power-supply system will undoubtedly be required in t ae future.

Effons continued throughout the year to move the installation ofload manage-ment switches atlocal member systems to its fust stage of successful operation. As the g costofgeneratingcipacitycontinues to riseinto the forsceable future,theability to restmin the mte ofincrease in demand will save increasing millions of dollars in power cost for ourconsumer-members.

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Major effons were expended during the year to negotiate an equitable solution to the power supply needs in the CP&L-served areas of the state. At yearend, no progress in this regard could be reponed.

Exploratory contacts have been made with more than a dozen attemate power suppliers throughout the southeastem ponions of the nation. Any feasible adematives in this cffon are beingactively pursued by management in concen with the Power Supply Committee. Unfonunately, present fedeml law and the ahilosophy of the current Federal Energy Regulatory Commission offer essentially no he p in makingit possible for whole-sale customers ofmonopoly po ver suppliers to enter and share equitably in the bulk powerexchange market.

These are recognized as only the beginning steps in our effons to achieve effective influence, control, or ownership of an issured and adequate source of whole-sale power in order to provide, at the lowest possible cost, total elecnic service through-out ourassigned serviceareas.

During 1984, it became increasingly apparent to our Board and management that the pioneer legislative effons of the mid-60's to ensure tenitorial protection for the sparsely populated, high-cost mral areas ofour state were provinginadequate against the increasing frequency of encroachment by some municipal utilities in the state.We remain

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resolute in our determination to achieve and maintain tenitorial protection to assure the g&.g~y continued development ofeconomically sound systems able to adequately serve all present and future electric power requirements in eadi member system's service ,.

tenitory-regardless of the consumer's location or profitability. .,.

Our effons during the year, together with those of most of the nearly 1,000 6 elecuic co-ops across the nation, proved unsuccessful in reaching a legislative solution to the long-tenn problems facing the REA Insured Revolving Fund. A though reduced load growth (which tmnslates into the need for less funds for constmction of elecnic disnibution and tmnsmission facilities) and two successive annualinterest income short-

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fall appropriations to the Revolving Fund by the Congress may havepostponed the date when the Fund is depleted, an equitable solution to tlu's critical problem must yet be provided. Rural elecnic cooperatives must develop and maintain effective influence or control of assured and adequate sources of capital-not only for the needs of member systemsibut ofeven greater financial consequence, to meet the generation and bulk trans-mission requirements of the total system as well.That capital must also be obtained at the lowest cost possible, sufficient to enable mral consumers to continue to panicipate in the economic and social arogress afforded their more pros aerous and profitable urban neighbois. In concen wit t our fellow-cooperanves across ne nation, this issue will again be addressedfIhe need and thejustification remain.

f the program's future is to be as successful as it has been throughout its fust half-century, tumi elecnic members and their leaders must maintain active interest and panicipation in appropriate legislative and govemmental activities.

Participation in tmining and education progmms was at one of the highest levels ever achieved by statewide member systems.We remain convinced that well- -

trained and infonned board members and employees ensure the strength and viability of our organizations for the futurefIhis, we believe, omnslates into more economical and cost clTcctive service for the ultimate consumer / members.

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Your matedal supply program through Tarheel Electric Membership Associa-tion reached a record-high $21.1 million in member,atronage.The 28 member systems l availed themsch'es of a wide variety of materials anc. services to reach this high plateau.

Unhappily, those services induded calling on a long list ofcoopemtive constmetion and service crews that responded in the spdng to a devastanng senes of tomados that 3

wreaked havoc across the breadth of the eastem third of the state, and then in the fall, l

they again responded "down-east" when Hunicane Diana reversed course and flattened '

g - ponions of Brunswick County and adjoining areas. Out of these tragedies we are remmded afresh thatitisbyworkin ogether-as cooperatives- that we are able to accomplish thedifIlcuhtaskofele mralNonhCarolina.Each coo tiveboard, 1

manager, and employee panicipating in e contribution ofapproximatel $60,000 for the Amedcan Red Cross, as well as the Salvation Army, in their tomado terrelief W ' programs, should feel a sense of pride in the spidt ofgenerosity and helpfulness that areapparentin thisselfless act.

Anotherimponant pro [ect completed during theyear,and onelonganticipated and much appreciated by the stall, was the constmction of new North Carolina EMC headquaners facilities.This building is expected to provide efficiencies and improved service for the membership for many years into the future.

The yearjust past has been a good one for Altimugh we did not achieve every objective desired,your statewide organizat significant progress as an organizae '

tion has been made and economics were realized on a number of fronts by our member-ship.The dedication ofour board members, theirstaff,and that ofourstatewide employees made our progress possible.Thank you for your suppon and for your leadership.

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l James M. Hubbard Executwe VicePresident l

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l TheDirectors 1 1

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NCAECOfficers l,.

l HasselB.Gann, President RW Blandtard, Secretary-Treasurer Emmett Putterson VicePresulent d.. .

. Edgecombe-ManinCo.EMC

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" RudolphSocton .

_ - h ,, f g' , WK Benson NRECA Direcror

-r  ?<./ '+ ' FourCountyEMC Pitt &Greene EMC HoraceMoore LRBeverage MarkASuggs Pitt & Greene EMC l RW Blanchard,Jr. HoraceMoore

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French Broad EMC Randolph EMC

' Charles RTolley Bob L McDujie James W Ray THaroldTeny AlbemarleEMC HalifaxEMC RoanokeEMC i

DomsB. White Mid1aelE.Finney Eugene W Bnnvn,Jr.

LA Hanis,Jr. AC Cox,Jr. MatthewGrant '

BlueRideeEMC HarkersIslandEMC Rutherford EMC Wayne 1(eller E.Travis Davis GaryA Whitener JohnAustin OliverS.Gnfen Joseph Quinn Brunswick EMC Haywood EMC South RiverEMC DavidJ. Batten John' WBrowning Marvin O. Mar 5 hall FredATedder Emmit Wood KyleHanington ,

Caoe Hatteras EMC Tones-OnslowEMC Sunv-Yadkin EMC Clifton E. Austin ~Alvin C Morton J.KellyHutdiens JachS. Gray Hugh L Batts WE. Collins Caneret-Craven EMC Lumbee RiverEMC Tideland EMC EugeneClaybome RonnieHunt Glenn A Carawan WJ. Wynne,Jr. Elias Rogers CarrollAustin CentralEMC PeeDeeEMC Tri-County EMC L ReidHanis EmmettS.Pdtierson Roberts. Holmes '

HenryE. Jones RichardJohnson Leslie]. Bell Crescent EMC Piedmont EMC Union EMC DonaldD. Rice Earl].Ross PhilipL Wally  ;

HenryC Gabriel Rid 1ardRoberts J. Grant Duncan "

Davidson EMC WakeEMC , l ayne Wilkins James E.Mangum,Jr.

selB. Gann .: ,

John Ttrrell i

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TheDirectors- -

o NCuM[C G llaywood liMC iohn w uro ,ing NQMComcers Jones-Onslow EMC ,

klarvin O. htarshall. Istulcutt Min C. Morton 11rilip L Wally ViceI)csident l_umbec River EMC Wayne McIlcr.Scartary-Treasurer IkonnIcIlunt ^ ' ~ '

!gWfW PeeRec EMC 4' : - l munctt Pattenon ,

a ." 13cdmont EMC ~ '

Earl]. Ross EitL6tQceneRic Mark A Suggs [}pg Randolph EMC Bob L.McDuffic 0 fVbhr Albemarle EMC Roanoke R C BiMA Omccrs Danis B. White Eugenc W Broun,]r. JirnmyR Horton. President Blue RidgeEMC Rutherford EMC ~

Ridiard]ohnson.Vice President WayneKeller .josf51 N1. Qtli,~,], Eugenc Brown.Scartary-Treasurtr

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Bmnswick EMC So_uth River EMC 9 -

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David). Batten Manin O.Manhall Q , ,Q. \.

CapeBattems EMC Su 9'adkin EMC F"' '

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FredJ.Neuman J.Ke ly Hutchais Caneret-Craven EMC Tideland EMC /-

DavidM.Chadwich Glerm A Carowan V ,

CentralEMC Tri-County EMC  %+,

i L ReidHanis Roberts.Ilolmes I'.

Crescent EMC Union EMC Crescent EMC DonaldD. Rice PhilipL Wally JimmyR Horton l Davidson EMC Wake EMC Davidson EMC WayneWilkins James E. Mangum,Jr. HasselB.Gann

! , Edgecombe-Manin Co. EMC FourCounty EMC

. Noel Lee,Jr. RW Blancha'rd FourCounty EMC Pee Dee EMC LR Beverage,)r.

RichardJohnson Halifax EMC Pitt &Greene EMC

\ MichaelE.Finney HoraceMoore l HarkersIsland EMC Randolph EMC E. Travis Davis Bob L McDujie Roanoke EMC Eugene Brown i

So.Ath RiverEMC Charles Callier

' ULnionEMC Philip L Wally

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j 1984 was a year of transition. NGMC in November of 1983 became a fully j operanonal entity with the implementation of the Catawba Agreement with the Duke i Power Company.This became the first full year of operation as a power supplier to 27 l j EMCsacross Nonh Carolina.

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Under the Catawba Agreement, NCEMC is eligible to receive ca 3acity and i energy from Duke Power Company's McGuire i nuclear plant until Catawia I becomes

! operational.This power is received at substantial savings to the member cooperauves 2y through the wholesale full requirements contracts with NCEMC.

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Althou 1 the power fmm the McGuire and Catawba sta s in the Duke service area, the savings om the Catawba Agreement are passed through t le NCEMC rate stmc-h^ ,

! ture to all member systems on an equitable basis.The annual savings flowed to all mem-bers were $7,573,000.This represents an average of 2.9% savings for each cooperative. -

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! NGMC in 1984 met its full service requirements with its 27 member cooper- <

l anves by supplying power to meet a maximum monthly NCP demand ofl,384,004 KW, t and selling 5,875,235,084 KWHs ofenergy,generatingelectric revenuc of$ 254,439,832.

The average cost per KWH sold by rate area was as follows: CP&L 4.75c, Vepco 4.39c, and Duke Power 3.88c.The composite rate for NGMC was 4.33c.

, A long range goal of NGMC is to become self-sufficient with generation sources in supplying ah the member-long-tenn power needs. As pan of an on-going i elfort to achieve this goal and to provide power to members at a reasonable cost, negotia- t 1 tions continued with CP&L onjoint ownership ofgeneration and transmission facilities. '

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' 1 Two major constmction projects continued to move towards completion.The -

/ i l l Catawba Nuclear Generating Station beingconstmcted by Duke Power Company near -

i Charlotte,is panially owned by NGMC. Its 644 MWownership represents 56.25%

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{ share of the Catawba Unit No.1. Unit I constmetion was completed the latter pan of the s 7 - 5 year and received its low 3ower license from the Nuclear Regulatory Commission in i f, {

! December. lt is schedulec for commercial opemtion injune 1985.The second unit is '

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schedo'ed to be in service inJune 1987. Nm  :

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In an effon to assure that the constmetion and operation of the Catawba L Nuclear Plant is perfonned in the interest ofits member cooperatives, a Plant Monitoring

• Progmm was approved by the NCEMC Board of Directors. This will require on site f representatives by NCEMC stalTat the Catawba plant.

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The second major constmction project is the installation of a statewide load control system that will give the 27 membersystems the ability ro shed load dudng peak Dy i load pcdods. Over 16,000 switches were installed on residences ofmember-consumers 1 to manage water heater and air conditioning demand.The communication system that will supply the signal to cut off and on the switches was completed in 90% of the coop-eratives. Some load was managed by a few systems by use of Back-Up Controllers. All member cooperatives will have a load management system operational bySpringofl985.

He remaining phase of construction will be the Central Control System locited in Raleigh to be completed in 1986.Ris will give NGMC the capability to control peaks on each member's system in conceit with the peak occurring at the generadngsource.

He potential for controlling power cost is significant with this process.

The mission will continue to be the supplying of reliable power at the most economicil price. It is believed that the power supply project inprogress will provide a good foundation for achieving that objective in supplying the Iuture total power needs ofNGMCs membership.

Finance & Accounting 1984 was a landmark year for the three statewide organizations during which the Division of Finance & Accounting continued its support to strengthen the financial stability and intemal controls of NCAEC, NGMC and EMA.

.q TEMA's total revenues, which exceeded $21 million, set an all time high, while i f -

improving the number of times the inventory was tumed over to 6.2 times, upTrom 4.1

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.r- times in 1983. Both NCAECs income and expenses compared favorably with budget expectations. And NGMC completed its first full yearserving as power supplier for its 5 27 membercooperatives.

k' During 1984, the Director of Finance & Accounting concentrated primaril on NGMC related matters. As of year end, NGMCs total investment in the Catawba

.N Nuclear Plant exceeded $1.1 billion, while total operating revenues for the year exceeded bA a quarterofabillion dollars.

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Plans to finance the pollution control nion of the Catawba NuclearPlant culmmated in November,1984 with the sale of b40 million of Pollution Control Bo He bonds have a 30-year maturityand a variable interest rate ofwhich $40 million carry a weekly variable rate and $100 million cany a semi-annual interest rate.The initial rates on the issue were 5.9% and 6%% respectively.This had a beneficial effect on NGMCs imbedded interest rate which was 10.511% as of12/31/84 as compared to 12.299%

as of12/31/83.

NCEMC continues to monitor the plant consauction activities at Catawba, and as in prior years, has completed an audit of the associated costs.This audit has raised several charges with which NGMC does not agree. Dudng 1985 NGMC intends to pursue attempts to resolve these items equitably.

Noting that this is the first time ever that NGMC will have a generating plant in operation, the Division of Finance & Accountingconcentrated mucli ofits effons dunngl984 in anticipation oftheCatawba Nuclear Plantgoinginto commercialoperation duringJune,1985. NGMCs contractual obligation with Duke Power Company requires NGMC to provide several estimates to Duke conceming NQMCs fixed and variable costs forits ponion of the Catawba Nuclear Plant. NGMC has taken every preciution to ensure that the interest ofits member cooperatives has been safeguarded.

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l During 1984 the NGMC Board approved the purchasc of an IBM 4361 which t would enable NCEMC to bringits data processing m-house, tmprovingsystem reliability at reduced cost. N&MC took receipt of the new computer late in December,1984, and j anticipated that four to six months will be required to tmnsfer its application to it from ,

i theservicebureau. 5 Legal Negotiations with CP&L for ownership interests in generating plants and trans-mission lines hit a stalemate in 1984, but were later resumed when CP&L indicued that it was willing to modify its position on demand allocation methods for supplemental

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power. Talks were also had with Duke Power Company conceming the possibility of g/  : i purchasing power for use by NGMCs CP&L-served systems. l The antitrust case against CP&L moved into the final stages of discovery, with i lawyers from CP&L taking testimony under oath (depositions) from managers and fonner managers and board members and former board members of NGMCs CP&L-served systems. Trial of the case is expected to begin inJanuary 1986.

CP&L's wholesale rate increase for 1984 was setded when CP&L agreed to drop Phase 11 of the new rate, an $8 million per year increase that was supposed to beco 9 effcc,me effective27,1983.

tive on November on April 27,1984.

Meanwhile, Phase CP&L has filed 1, aa1985

$12.9 wholesale million annual rate case, increase, became li Phase I ofwhich ($14,686,788 or 10.2%) will become elTective February 14 and Phase 11 j of which ($7,738,072 or 5.4%) is scheduled to becona dectiveJuly 14.

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l The Vepco 1984 rate case was setded by Vecpco's a cement to reduce our -

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mtes by $270,000 per year.The Setdement Agreement was sti I awaitingapproval by the eg" 4W )

Federal Energy Regulatory Commission when this report went to press.Vepco said it # '

would file a 1985 wholesale mte increase on March 29.

Preliminary victories were obtained by the Cooperatives in the lawsuits

! brought by ElectriCities challenging our right to SEPA power from the Georgia- Alabama

! Projects and the Kerr-Philpott Projects. Appeals are pending in the Founh Circuit.

During 1984 die legpl depanment also concemed itself with ad valorem taxes, the Catawba deficiency loan and the pollution control bond issue, Gr.olinafountry i l collections and the myriad of daily problems that face your three statewide organizations. I '

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MaterialSuiyly Dt rin  !

P.F active vear, both'g 1984 Tarheel lilecnic Niembership Association experienced its in io!.il revenues and m.irgin production. Total revenues exceeded A -

, ;21.000.000 % ith margins of S810.000 Whi e total revenuesgrew hv more ihan 30o.,

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[ ,g $ }' over Ille previous \ c.lf. alid Ill.l! Mills Ilh Ic.tsed 20d0, We % illiessed ollfy a 400 illcre.14e i

t ef;.t in expenses to operate the program. I he Board of I)irectors' and N!anagement's goal to E.

y ellecovely maintain the materi.il supply progiam at the lowest possible cost consistent

% Ith good business practice. prova es Ihe membeis not only a competinve and rehable

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• Soltree lot thell~ lli.llen.Il requirements. hn: also.I retum on Iheir matenals purchased investment. N!.ugins. ire retumed to menibers in cash .ind patronage ceniticates

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mia n-a on mc~~pt llh ) 11 gt tilelllvill ol ( c!illlc.t!C letirenicill is tell ye.Il S. Ihe dunng 1070 tSINmHl).ind 107 7 rr ~de.dme - ~ ~.me,l - ,x, ,maumd

s.' Ul: h orin si iw. i y c. irs of oper.uion ihn lv ceni-lic.ite tentement .end the l.a L oi shor r ici m hon ou ed f unds icqturcinent .uv indic.nors lli.it t he ol t'.llllZ.itit 'll is * '!! still!Id li w ir rii;' .n tii liii.iiici. ills si.ihle L _ _ _ _ _ . _ _

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I Through communications with our members and the close observation of our material in the warehouse,we were able to achieve a rollover in our inventory value

! every sixty days, thereby reducing overhead costs for carrying charges associated with inventory mvestment. Apyroximately 65% of the total revenue production during the year by the material supp y program was achieved through shipments from our ware-house.Blis calculates to over 700 tmcidoads of hardware, conductor, transfonners and other products received at the warehouse, stored, and then shipped to member systems.

l It became evident early in the year that Nonh Carolina's constmction industry l would be building at record pace in many areas and our member systems would have to react to the requirement of providing reliable service by upgrading existinglines and building new extensions.Elis was achieved because of the commitment the 28 electric membership corporations have to their member-owners.This same commitment is .

shared by your statewide staff-to provide the member systems with products and 2 services for maintainence and construction in order that they may provide' optimum i T

service to theconsumer.

I During the year, many lives werc lost and property damage reached millions of I dolla, rs, when tomadoes and a hurricane ravaged our state,destroyinghomes, businesses i and cooperatives' lines.Through the emergency work plan for Nonh Carolina electric p cooperatives, neighbors assisted neighbors when EMC personnel aided those alTected  !

j by workingaround the clock to quicIdy rebuild lines and mstore service.

Itwasdoubl gratifying,immediatelyfollowin theMarchtomados,towitness f the additional financiafassistance totalhngapproximatefy $60,00 contributed to the the ..

Red Cross and the Salvation Army by member cooperatives and dicir employees. ,

This dedication is also employed by your statewide employees.We will con-tinue utilizin 3 our best efforts to maintain, operate, and develop your materials progmm 7 ' -;. N ._

with the guic ance of our member systems.We will provide the service expected ofthe f j,. - n- f _p_ ,; .

material supply program and we will react to the needs of our members. ' O.?

. :2 Weamappreciativeofthesupportofourmembersandcontinucourpledgeof [ h$1:.

assistance to our member systems in providing for the member-owners.

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Association and CorpomteServices i One of the most exciting projects during 1984 was the consuuction of the new '

headquaners building at 3400 Sumner Boulevard. Even though occupancy did not take place in '84, the majority of work was completed.

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• Our previous headquarters location at 3333 North Boulevard was sold, with closing scheduled for early 1985.The new constmetion, disposition of the old building, i

Q'i y q and related activities required substantial staff dme. In late December, the building was complete enough for the Credit Union to occupy space on the first floor.

) Dunng the year, Personnel conducted nearly 100 interviews to fill 18 vacancies.

./ 1 It also coordmated the revision and updating of the Employee Personnel Manual. As in

, previous years, a wage and salary sutvey was conducted by NCAEC for members.

Safety is ahvays a top pdonty in our indusay. Our orogram has condnued ,

o-aw h to successfully revolve around t ne safety-meedng concept.T aree safety specialists hold

,,m,m,L~yL ,,,m, l regular meedngs across the state and responded to special needs as reqmred. I In 1984 we completed a three-pan, seven-day StakingTechnician's School. l During the fall we held a Substation Maintenance School.We also held three Apprentice '

Lineman Schools and various annual conferences for EMC employees. l The REA WorkorderWorkshop and the Annual Directors' Conference topped the high mark for best-attended training programs in 1984.

The NCAEC Package Plan for NRECA courses continued for the third year  !

to enroll 25 EMCs in the program- the most EMCs ever enrolled, and attendance at the three NRECA courses in the plan totalled 170 panicipants.

The Pre-Retirement Seminarand the Data ProcessingConference,though new -

programs,were wellattended. ,

We appreciate the continued suppon and look fonvard to continued successes in the yearaheac.

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PublicAfain In the area ofgovemment relations, national issues were top priorities through-out1984,asweworked onle lation dut penained to our federal /financtng program.

Efforts were mounted to pass deralleghlation that would restrict the Federal Energy Regulatory Commission's policy to chargewholesale customers pan of theirconstmction-work-in-progress costs.We were successful in the House but the issue did not come before the Senate for consideration.

Member services activites included the statewide annual Member Services Conference and twelve mini-conferences.The statewide conference in Chapel Hill was attended by 40 EMC member service representatives.The mini-conferences, four on each subject, induded audio-visual production. newsletter production, and time manage-ment.These workshops were held in various locations thoughout the state, and involved 100 panicipants.

The load management promotion continued with updated materials retaining the" Volunteer to Shave" theme for the second phase of the campaign.

I Programs involving women and youth included the annualWomen's Fall '

Fomm with 50 participants, and the annualYouth to WashingtonTour with 35 young l

people from across the state.The Youth Tour Scholarship, sponsored by theWomen's Committee, is coordinated through NCAEC and is awarded annually to a Youth Tour panicipant.

In preparation for the celebration of the 50th Anniversary of REA, an oral history of the mral electrification movement in Nonh Carolina was conducted. Fifty volunteers and EMC staffmembers attended fourinterviewer trainingsessions across the state.Ta were collected and transcribed,and information from theintervi rovided materia fora 1985commemorativecalendar.Furtherinfomutionalmaterials ruse .O during the coming anniversary year will be provided through the oral history program.

In 1984, Carolina Country reduced the total number of pages published in response to declining advenising revenues. Even so, the magazine functioned as an im-u portant vehicle for the dissemmation ofinfomution on politicalissues of specialinterest toTarHeelco-op consumer-members.

Two specialeditions were largely devoted to coverage of the candidates in the .

statewideelections. Also,extensivespacethrou out the12 issues wasallocated to a repons on legislative elfons to revamp the mral lectric financing mechanism. l In other communications activities, the information wrvices staff provided l

l ar liaison with representatives of the news media in theii coverage of the financing I station as it would affect Nonh Carolina.

He staff also kept the media infonned about conditions in the affected EMC tenitories duringthe springtomadoes tlut swept through the state and duringHurricane Diana's attack on the coast. 4

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i The infonnation services stalTalso organized and coordinated a one-day work-shop forabout 40 EMC newslettereditors,o[Tering them specialized instmction in writing, editing and layout skills.The workshop, featuring a nationally recognized publicanons consultant, was developed especially for co-op communications personnel.

The economic and community development effons continued to progress as more and more EMCs were exposed to new industrial and commercial clients. Our exposure has been enhanced by new brochures describing the role of NGMC, and individualbrochures that picture cach EMC and its function. In addition,our nationaland state advenising campaign has staned to produce results which will end up in increased activity for our EMCs.The EMCs have responded to the challenge. However, their great-est successliesbefore us.

l Credit Union People helping people- how important that ideal is to us all. In this cooperative spint,your Credit Union continued to expenence vigorous growth and expansion of services during 1984. Our growth is evidence of our confidence and optimism that your Credit Union is cen. agofageduringa period ofmudi change within financial institutions. 1 Technology, deregulation, reregulation, taxation, and the cconomy are all factors within our environment that have influenced our coopemtive spirit during this past yeat.  ;

~ Consideringthese factors,and afterseveralintense planningsessions,the Board

, of Directors adoped our first long-range strategy plan during April,1984. Among the

^ more notable goals in this plan are: capitalization to 8% capital to assets within five years; l

c new organizational development and auman resource development to indude our move to the new NOMC building, new com puter hardwar e, and new staff and staff reorgani-zation; more communications and marketing,induding marketingto retirees and family members; and increased use of technology for delivery of present and new services.

i Of prime im :>onance within this last goal is the VISA Credit Card and Share DraftCardp -

adopted last year for implementation during mid-1985. Much Mu 9 progress towa fulfillment of this and many other goals was made during 1984 as we

""8" l accomplished 45 of 48, or 94%, of our shon-tenn, one-year goals contained within l ourstrategyplan.

l Our vivacious spirit and finanacial strength becomes evident, as 1984 was another record year ofgrowth. As of December 31,1984, our assets had grown to $6.3 million, an increase of 31% since 1983. I_oans increased by 24% to $3.9 million, and our 2,941 members had on deposit with our Credit Union a little over $6 million. Growth in capital also kept pace as we experienced increases in undivided cammgs of 51% and an increase of 30% in overall capital.

It is with a great amount ofsatisfaction and pride that we look back on 1984,and as we also look toward the  !

future of EMC Employees Credit Union.There's no doubt that the cooperative spirit is cenainly alive and well at our Credit Union.

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.ulet inGnClLL Oj r v NORTH CAROLINA ASSOCIATION OF ELECTRIC COOPERATIVES CTATEMENT OF OPERATIONS AND MEMBER EQUITY For the years ended December 31.1984 and 1983 (Unaudited) 1984 1983 Operatinglocome Dues.......... ..... ... . ......... . $ 820,401 859.311 Ptblicahon income . . . . . . . . . . . . . .......... . 827.677 834.985 Total Operating income . . . . . .... ... .. .. 1,648,078 1.694.296 Operating Expenses Administrative and General. . .. . ... 950,575 951.110 Publication Expense . . . . . . . . . . . . . 709,501 676.616 . 7 TotalOperating Expenses . 1,660,076 1.627.726

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Operating locome(Loss). . .. (11,998) 66.570 Otherincome(Expenses)

Interestincome . . ... . . ... . .. 25,837 27,095 Interest Expense . . . . . . . . .. ... . . . (3.180) (3.075) ,

TotalotherIncome (Expenses). .. ...... . 22,657 24.020 i

Net Margin . . . . . . .. .. . .... . .. 10,659 90.590  ;

Mt=TcmaisEquity-Degirnngof Year. . . . . 471,647 393.504 ,

MemberoNp Equity-End of Year . . . . ... . . $ 482,306 $ 484.094 ,.

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NORTH CAROLINA ASSOCIATION OF ELECTRIC COOPERATIVES BALANCE SHEET For the years ended December 31.1984 and 1983 (Unaudited)

ASSETS 1984 1983 Current Assets Cash. . . $ 275,921 $ 293.627 Accounts Receivable (Net) . 181,221 186.526 inventories. . 21,180 19.749 Prepaid Expenses. . .. 24,482 15.321 TotalCurrent Assets. . 502,804 515223 Fixed Assets Offce Furniture and Fixtures. 115,662 44.834 Whicles. . 56,679 56.451 172,341 101.285 Less: Accumulated Depreciation . 56,880 49.488 TotalFixed Assets. 115,461 51.797 Other Assets Deferred Charges - Past Servre Cost. Pension Plan . 40,996 46.852  :

Deferred Compensation Fund . 45,584 22.337 Membership Certifcates. . 200 200 TotalOther Assets. . . . . 86,780 69.389  !

Total Assets . . . . . . $ 705,045 $ 636.409 UABIUTIES AND EQUITY Current Uabilities NotePayable-CurrentPortion.. . . ... . $ 882 $ 832 Accounts Payable .. .. .. . . 58,514 14.652 Accruedbabilities. . . ... .. . . . .. . 37,998 33.698 Uneamedincome .. . . . . . 23,735 23.888 TotalCurrent uabilities . ... . . .. 121,129 73.070 Long Term Debt Note Payable. 56,208 57.040 Less: Current Portion. 882 832 Totallong Term Debt . 55,326 56.208 Deferred Compensation Reserve. . .. 45,584 22.337 Totaluebilities. .. .. . 222,039 151.615 Equity M-w hasupFees. .. .. .. 700 700 Membert Equity . . . . . 482,306 484.094 b Total Equity. . . . 483,006 484.794 TotaluebilitieaandEquity. . . .. . $ 705,045 $ 636.409

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NORTH CAROUNA ELECTRIC MEMBERSHIP CORPORATION -

STATEMENT OF OPERATIONS AND PATRONAGE CAPITAL For the years ended December 31.1984 and 1933 (Unaudited) 1984 1983 Oper; ting Revenues  !

Electric energy revenues. . . $ 254,447,734 $ 41.730.843 Other operating revenue. . . 12,478 1.059.990 Total Operating Revenues . . 254,460,212- 42.790.833 ,-

Operating Expenses Costd purchased power . . . 233,138,521 39.547.536 l Transmissionexpenses.. . .. .. 10,439,695 1.657.317 l Administrathe and general expenses . . .. . .. 2,258,572 1.058.845 Depreciation . . . . .. . ...... .. 35,186 29.348 Taxes.otherthanincometaxes. . . . .. 329,583 114.053 ,

TotalOperating Expenses .. . . .. . . . 252,201,557- 42.407.099 Operating Margin. . . . . . . . . . . . . . . . . .. 2,258,655- 383.734 i Otherincome 'I l Interest. . .... . .. .. . 367,731 44.762 i Other. . . . 2,450 1.836 l

l Totalotherancome .. . .. . 370,181- 46.598 4 Interest Charges ,(

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Totalinterestexpense .. ..... .... . .. 107,292,420 102.471.952 Less: Interest charged to construchon . . . . (107,272.113) (102.460.860) l Amovaationd detA expense.. . . .. .. . 5,736 1.543

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l Totalintereet Charges . . . . . . . . . . 26,043- 12.635 l Not Margin. . . . . . . . . . . . . . ... . . .. . 2,602,793- 417.697 l Patronage Capital-Beginning dWar . 1,777,750 1.360.053 ,

g l Patronage Capital-End d War . . . .. . .. . .. $ 4,380,543- $ 1,777.750 1 ,

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NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION BALANCE SHEET For the years ended December 31.1984 and 1981 (Unaudited)

ASSETS 1984 1983 Utility Plant Property. plant and equipment . $ 969,861 $ 941.469 Less: Accumulateddepreciation . (226,917) (184.400) 742,944 757.069 Construction workin progress. . 1,126,163,094 913.326.702 Total Utility Plant . 1,126,906,038- 914.083.771 Other Assets Investments in associated organizations . 7,109,061 21,613 Current Assets Cash. 230,926 37.148.152 Specialdeposts . . 24,997,328 -

Temporarycashinvestments . . 8,516,000 -

Accounts receivable . 22,672,601 23.863.343 Othercurrentass* . 794,953 73.939 TotalCurrent Assets. 57.211.808- 61.085.434 Deferred Charges . 6.772.047 1.828.995

$ 1.197.998.954- $ 977.020.013 EQUfT1ES AND UABlUTIES Equities b uiy @ Fees... ... ... . . .. . . $ 700 $ 700

, Patronage Capdal . . .. 4,380,543

. . 1.777.750 Total Equities . . ... 4,381,243- 1.778.450 Long Term Debt - Excluding Current Maturities . 1,167,920,021 924.949.978 Current Uabilities Current matunties oflong4erm debt. . . 3,345 3.121 1

Accounts Payable-Trade . ... 23,379,723 23.234.042 Affiliated Companes. 43,923 42.459 Interest accrued .

907,158 24.952.603 Other accrued expenses. . 91,593 97.035 TotalCurrent Uabilities . 24,425,742- 48.329.260 "

Deferred Credits . 1,271,948 1.962.325

$ 1,197,998,954 $ 977.020.013

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IheFinancial

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. j Hi nlignts 0 I TARHEEL ELECTRIC MEMBERSHIP ASSOCIATION,lNC.

STATEMENT OF OPERATIONS AND PATRON AGE CAPITAL For the years ended December 31.1984 and 1983 (Unaudited) 1984 1983 Sales (Net) . . . . . . . . . . . . . . . . $ 21,080,006 $ 16.381.004 Cost of Goods Sold Beginningirwentory .. .. 1,736,460 1.607.794 Purchase (Net) . . . .. . . ... 19,637,259 15.267.937 21,373,719 16.875.731 Less:Endingirwentory . . ....... . . 1,707,853 1.736.460 TotalCost of Goods Sold . . .. ...... .. ......... 19,665,866 15.139.271 t

Gross Margin . . . . . . . . . . . . . . . . . . . . ..... .. 1,414,140 1.241.733 ,

Operating. Expenses . . . . . . . . . . . . . .... . .. .. 640,677 609.658 {

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Operating Margin. . . . . . . . . .. . . 773.463 632.075 Otherincorne Interestincome ... ... .. . . .. ... . 72,916 56.359 MisceHaneous income . . . . . .. ... 58,668 75.754 Totalotherincome . .. . .. ..... .. . ... . 131,584 132.113 interest Expense . . .... . . . . . .. . . 74,606 77.403 .'1 Net Margin. . . . . . . . . . . . . . . . . . . . . . ... .. . 830,441 686.785 PatronageCaptal-Beginningof Year . . . 2,535,864 2.153.453 U"I Add

Decreasein ACRS DtywiResene. .. ... 7,424 (419) ,j p Less: Retirement of 1977 Patronage Cert 6 cates . . '

235,114 166.682 i.

Patronage Capdtal Reclassified to Current Uabilities . 167,573 137.273 Ji Patmnage Capital-End of Year . . . . ... . .... $ 2,971,042 $ 2.535.864 a

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- TARHEEL ELECTRIC MEMBERSHIP ASSOCIATION. lNC. '

BALANCE SHEET For the years ended December 31.1984 and 1983 (Unaudited)

ASSETS 1984 1983 ,

l Current Assets Cash. S 540,038 $

742.099 Accounts Receivable-Trade . 2,064,437 986.736 Accounts Receivable-Otner . 4,585 12.226 inventores. 1,707,853 1.736.460 Prepaid Expenses. 32,377 34.582 TotalCurrent Assets. 4,349,290 3.512.103 Fixed Assets Offce Furniture and Fixtures. 37,895 109298 Whicles. 25,378 25.157 Warehouse Equipment. 69,683 68.687 Buildings. 514,714 502.631 647,670 705.773 Less: Accumulated Depreciation . 232,675 227.523 414,995 478250 Land. 157,250 157250 TotalFixed Assets. 572,245 635.500 Other Assets. . 60,935 57.527 Total Assets . $ 4.982,470 $ 4205.130 I

UABluTIES Current Uabilitles Mortgage Payable-Current Portion. $ 3,758 $3.472 Accounts Payable. .

948,930 647.768 Accrued Liabihties. .. 74,302 52.706  ?

Patronage CapitalPayable . 167,573 137.273 TotalCurrent Uabilities . . . 1,194,563 841219 Longterm Debt Note Payable to Members- . . (38,900

_ 438.900

. Mortgage Payable. . . 381,654 385.126 Less: Current Portion. . .. 3,758 3.472 377,896 381.654 TotalLong Term Debt . 816,796 820.554 Reserve for ACRS Depreciation .

(631) 6.793 Totat uabilities. .

2,010,728 1.668.566 Equity Membership Fees.

700 700 Patronage Capital . 2,971,042 2.535.864 .,.

Lt TotalEquity. 2,971,742 2.536.564 Totaluabilities andEquity. S 4,982,470 $ 4205.130

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Nonh Carnlina

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ElectsicMembership Corporations I. AllenarleEMC,Ila1loni I1 Jones-Onslow EMC.Jad:sonville

2. Hluc Ridge EMC. Lenoir Ib. Luonhec RiverEMC, RedSpaings

3. Ununswid: EhtC,Shallotte 17. Pee Dec EMC,Wadeshon>

4. Cape Hattents E;4C, Huxton iS. lMechnont EMC, Hillsban> ugh

5. Guteret-Ouven EMC,Marchead City I9.Intt &Greenc EMC, Fannville

6. CentralEMC,Sanfoni 20.Randolph EMC, Asheboro

7. Crescent EMC,Statesville

21. Roanoke EMC, Rich Squarc

8. Davidson EMC, Lexington 22.RuthafoniEMC,Tvrest City

9. Edgecombe-Martin Co. EMC,Tcuboro 23. South RiverEMC, Dunn

10. FourCountyEMC, Burgaw 24.Suny-Yadkin EMC, Dobson l

11.Franch BroadEMC, Marshall 23. TidelandEMC,Pantego l

12. Halifax EMC,Enfield 26. Tri-County EMC, Dudley

13. Harkas tslandEMC, Harka51sland 27. Union EMC, Monn>c I4.HaymniEMC,Waynesvilic 28. WakeEMC, Wake Forest  ;

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k f North Can> lina Association ofElectric Cwiuntives, Inc.

North Carolina Elecnic Manivship Gnponulon h

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TaducclEletnicManleship Assaiation Inc.

.H00 Surnner Bhti., RO. Box 27.306, Raleigh. NC 276 II i

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