ML20137N660
| ML20137N660 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 04/30/1985 |
| From: | SALT RIVER PROJECT |
| To: | |
| Shared Package | |
| ML17299A821 | List: |
| References | |
| NUDOCS 8512040187 | |
| Download: ML20137N660 (33) | |
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Highlights Fiscal 1984 REVENUES / EXPENSES (See Page 20) Fiscal 1985 Total operating revenues ($000) . . . .. .. .... ... .. 785,032 683,993 Total operating expenses ($000) . .......... ... . . 559.504 484,728 Net operating revenues ($000) . . . . . ....... .. . 225.528 199,265 Financing costs (less AFUDC)($000). . . . .. .... . . 16,674 28,961 Total other income ($000) . . . . . . . . . . . . . . .. .. 6,823 (9,764) Extraordinary item ($000) . . . . . . . . . ..... . ...
.-. 27,636 Reinvested ($000) . . . . . . . . . . . . . . . . . . . ..... ... 215,6 '7 188,176 POWER OPERATIONS (See Page 27)
Energy customers at year end . ..... . ... .. .... .. 422,774 391,142 Total kilowatt. hour sales (000) . . . . . . ...... .. .. 14,130,952 12,612,241 Average annual kWh usage per residential customer . . . .. 12.963 12,535 Avg. annual kWh revenue / residential customer (cents) . . . . . 7.11 7.06 WATER OPERATIONS (See Page 26) Calendar 1984 Calendar 1983 Assessed water accounts . . . . . . . . . . . . . . 181,083 180,455 1,100,100 2,829,613 Water runoff (acre feet). . ........ .. . ...... Water in storage, Dec. 31 (acre feet) . . . . . . . ... .. . 1,781,671 1,717.407 Water deliveries (acre-feet) . . ... ........ ... . 881.501 1,014,772 SELECTED OTHER DATA (See Page 26) Fiscal 1985 Fiscal 1984 Gross plant investment ($000) . ... . . ... . 4,185,919 3,777,893 Long-term debt ($000.Page 23) . . . . . . . . . . . . . .. . 2,743,688 2,610,026 Taxes & tax equivalents ($000). .... . . .. .. .. 75,028 67,745 Electric. revenue contributions to support water operations ($000) . . . . . . ... .. .... 9,866 12,094 Employees at year end . . . . . . . ........ . .. . 5,568 5,434 BACKGROUND Salt River Project, named for the major river that supplies water to the Phoenix metropolitan area, has played a leading role in the growth of the Salt ggg{g River Valley, providing water and power to area
. residents. SRP is composed of two organizations-the Salt River Valley Water Users' Association (the Association) and the Salt River Project Agricultural 1 Message from Management improvement and Power District (the District).
The Association is a private Arizona 3 SRP Officers corporation. It participates in the management of the 13,000' square-mile watersheds of the Salt and 4 power Verde rivers,in cooperation with the U.S. Forest Service. The Association administers water rights of SRP's 240,000 acre area and operates and 8 Water maintains the irrigation transmission and distribution system which cames water to agricultural. 12 Community municipal. Industrial and residental users. /,..A. The District, a political subdivision of Arizona, ?1 .\ 16 Financial operates under contract with the United States and .
.,c' Pmvides electricity to residential, commercial, Y ,f 18 Combined Financial Statements industrial and agricultural power users in a 2,900- '.' .
square-mile service area in parts of Maricopa, Gila and Pinal counties. 4.k D.y 22 Notes to Comb.ined in line with the long standing reclamation principle, SRP uses a portion of its electric revenues M.hln p? Financial Statements 4 to help support its water operations. This practice ik r 28 Board and Council members helps keep water <lelivery charges to farmers, cities and homeowners at reasonable levels. At the same time. SRP maintains electric rates that are competitive with those of other utilities in the area. IN APPRECIATION Special thanks go to the staff at The Heard Museum, located in Phoenix, who selected and displayed the Indian artifacts for this report. Care was taken to use Southwest items representatise of the Salt Riser Project. Atxwe, top is a Navajo Indian rug with a lightning pattem we chose to indiate SRP's rbwer Group Also on the coser is a reproduction of a Hopi water anteen which represents our Water Group The individuals locked hand in hand encircling the Papago basket portray the importance of working with the community. And, tum-of-the-century Navajo jewelry stands for SRP's financial interests. i s
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- By all measures of corporate performance, the Salt River others to help promote the wise and efficient use of water in our Project experienced an exceptionally good year. semi-arid valley.
Perhaps the most important accomplishment was the We also are working diligent'y with all community interests successful implementation of a major reorganization concurrent toward completion of the Central Arizona Project and Plan 6. The with the retirement of Deputy General Manager Robert F. Amos. US Bureau of Reclamation continues to make good progress on After an extensive participative process, we produced a the CAP aqueduct, which will bring Colorado Riser water into reorganicion plan to improve management efficiency, further central and southem Arizona. CAP water deliveries into the develop younger executives and re emphasize customer service. Phoenix area will begin in the fall of 1985. The focus of the Salt River Project remains on our customers. Timely completion of Plan 6, which involves increasing the height of Theodore Roosevelt Dam on the Salt River and ; Our elected officials and the management team are dedicated to providing our customers reliable supplies of water and power at the c nstructing new dams on the Verde and Aqua Fria rivers, is a top lowest reasonable cost. At the same time, we are committed to c neem r he Sah bdauey Nn 6 d enaW mgdam aM quality service. Evidence of our commitment to service excellence c nservation storage for the CAP, wiH provide flood control on the \ Salt and Verde rivers, and will resolve safety of dams concems is reflected in a new Customer Service Pledge and an Employees, Goal Statement shown .in the Commun.ty i Section of th.is report. identified by the Bureau of Reclamation under unlikely, bM possible, floods and earthquakes. SRP is represented on Arizona These recognize that excellence in external relations goes hand in hand with open and honest intemal dealings. They als Govemor Bruce Babbitt's 17-member task force to evaluate the possibility of up-front local funding to assure the timely completion reflect our belief that, while we have recorded a string of very of Plan 6. good years, there are always opportunities for improvement. Recogn..izing the increasing public concem about water Another significant occurrence during fiscal year 198465 was quality, SRp's Board of Directors committed to assuming a greater the continued urbanization of the Salt River Valley. For the first time role in helping manage water quality on behalf of our shareholders, in the history of the Salt River Project, urban water deliveries on During fiscal year 1985 86, we will be developing specific objectives SRP member lands exceeded deliveries for farm uses 52.7 percent to achieve this goal. to 47.3 percent. As of Dec. 31,1984, only 89,268 acres of the Construction and start-up activities are going well for the Palo l 238.171 acres in the SRP water service territory received water l Verde Nuclear Generating Station west of Phoenix. The Nuclear deliveries for agricultural purposes-Regulatory Commission granted Arizona Public Service Co., Palo We also registered an 8 percent increase in the number of Verde managing partner, a full-power operating license for Unit 1. SRP electric customers. The 31,632 new customers added to our Progress to date indicates the APS Unit 1 commercial operation electric system brought the total number of retail customers served date of Dec. 31,1985 is a reasonable schedule. Construction of to 422,774. With the additional SRP customers and a robust local Palo Verde Unit 2 is 99 percent complete and is proceeding in the economy, we established a new high of 14.1 billion kilowatt-hours early start-up phase. Salt River Project s ultimate 17.49 percent of electricity sold and we reached a new electric system peak of interest in Palo Verde will provide nearly a 19 percent increase (641 2,487 megawatts Aug. 30. megawatts) in our electric generation resources, which is necessary Our financial performance mirrored the year's electric sales as to saush customer electric demand through the 1980s. we recorded a 14.6 percent increase in net revenues for a total of SRP's expected 4 percent annual load growth requires the
$215.7 million. Since SRP is a not-for-profit, quasi political addition of another base-load electric generating unit by 1991.
subdivision, net revenues are reinvested to replace equipment and During fiscal year 1984B5, we resumed design and procurement to finance construction of new facilities. Debt service coverage activities for a third,350Lmeg3 Wag [, CQal-fired unit at our Coronado ended at 2.09 and we further improved our debt equity mix to 70 Generating Station at St. Johns. We also are well along on studies percent and 30 percent, respectively. SRP remains financially to site another coal-fired generating station in Arizona to help sound, which contributed to our electric revenue bonds being fumish power our customers will require through the 1990s. (mong the highest rated in the country for a public power utility. On the first day of the fiscal year 198586, we brought on line Significantly, we were able to accomplish these excellent a new Financial Information System. The computer system, which financial results without an electric rate increase. We implemented took four years to design and install, provides SRP management our latest rate increase of about 5.5 percent in April 1983. We will current financial, accounting and performance information in a not need another rate increase before October 1985, and we are more convenient manner.The installation of this system represents committed to keep the proposed increase less than an average of a continuation of our desire to take full advantage of available 6 percent. technology. We also established an information management The short term water supply is excellent. Another wetter-than- department to better control data as a corporate resource. normal year filled SRP's six reservoirs in the spring.1.akes it, indeed, was a fine year for the Salt River Project and we contained more than 2 million acre-feet of water. Yet, despite the express our appreciation to our employees for their contributions to bountiful year, water conservation remains a priority goal. We are this record-setting year. We also express our appreciation to you, working v.ith the Arizona Municipal Water Users Association and our shareholders and bondholders, for your interest and support.
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Salt River Project President John R. lassen General Manager A. J. Pfister n'"'{F E44 :: 7, t 713 ,-', jg' .;. * {i;'
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bb # e s a e C Vice President Marcel J. Boulais l 2
OFFICERS Elected Offkers John R. Lassen President Martel J. Boulais Vice President Principal Officers and Other Executives
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isJ. Pfister General bbnager ' W ~' . J ' ' ,_ John R. McNamaru Associate General Afanager. ' Corporate Engineenng and Pbwer Group : Trent O. Meacham Assistant General blanager. P6wer
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) ,~_ j L John O. Rich Assistant General hknager. P6avr .
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Robert J. Conlon Asststant Genral Afanager. Corporate - = Engtrw nry
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Stephen M. Chalmers Derector. Engineenng Services " Phil G. Booker blanager. Project S1anagement & .
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q._.~5 . Q*Q.f, j " ' John M. Evans Afanager. Electoc System - 4.' . p 4d, ' l y e
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Timothy N. Stanton bbnager. Cie:I Engineenny Reid W. Teeples Asmiate General blanager. %'ater M n K W Namars k W kep h ha G bdm Group Associate General Monsger, Associate General Manager, Associate General Manager. Don L Weesner Assistant General hfanager. %'ater Corporate Engineering Water Group Corporate Services Operations & Flaintenance and Pkwer Group Richard Juetten Assistant General Afanager %'ater Resources & Services -
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Robest W. Mason Durector. %'ater Group blanagement . Staff . , Don G. Par 1ctt Associate General hbnager. Corporate , N Servuces Paul G. Ahler Assistant General Abnager. Human
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iA h' , 3 r Resources & %, '[ ^ James L Swartz Assistant General Afanager. : - -
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y Carroll M. Perkins Associate General Afanager. Customer. ' ' [ Financial & Infc 7 nation Serruces ;
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John D. Jacobs Assistant General Sfanager. .. . . _. ..:_ . . . , .. ; _ _ .. . .
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C M. Arrkins foray MichaelJr. Stanley E. Hancock Oren D. Th son Assustant General Fisnager.
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Customer, Financial Planning & Resources Communications Mark B. Bonsall Corporaic Treasurer. Treasurer's g ,,f,,,,,,,, S,,y,,,, g p,gy,, pff,,,, Office a Leroy Michael Jr. Associate General Abnager. PIanning , ,
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Darrei E. Smith Durector. Resource Planning ; . Stanley E. Hancock Assistant Gen. ral Afanag(>r. : - Communucations & Put>lec Affairs
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D. Michael Rappoport Assistant General Afanager. .
, Gowrnment Allarn Richard H. Silverman Awstant General Abnager. Law f 'S 4 =
Land - u-l C.A. Howlett Director. Specul Projects _-
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Paul D. Rice Corporate Secretanj q . -
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Consultants - L - ' t 4 l
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Legal Adersers Jennings. Strouss & Salmon
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Auditors Arthur Andersen & Co. O MichaelRappoport Richard H. Silverman C A. Howlett Bond Counsel Mudge Rose Guthrie Alexander & Ferdon Assistant General Manager, Assistant General Manager, Director, I Financul Cortsultant Lazard Vreres & Co. Government Affairs law & Land Special Projects
- Joined SRP June 1985 3
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S 69 BCIILDING ACTIVITY LEADS TO RECORD ENERGY DEMAND ~ ~ _ _ _._. - x-- - _r- - fij p " . b'bhJ l5:
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Coronade Generating Station sent St. Johns inc/unirs stat > sithe-art envitenmental Pretection equipment. year 1983-84. SRP installed about 130 miles of Palo Verde reaches milestones new merhead electric distribution line,427 miles SRP management is counting on the Palo of underground conductor and five electric Verde Nuclear Generating Station west of Phoenix distribution substations, to help meet increasing electric demand. SRP will While new customers came on line, demands be entitled to 17.49 percent (641 MW) of the three on the electric generation system grew SRP 1,222 MW PVNGS units, or nearly a 19 percent remrded a new system peak of 2,487 megawatts increase in generating capacity. (MW) on August 30, surpassing the previous high Under the management of Arizona Public of 2,451 MW established just 56 days earlier on Servim Ca, work at PVNGS reached sewral July 5. The peaks shattered a threeyear-old record milestones during fisal year 1984-85. Signifiantly, pp.,f ,,,,truerien ,ng at the beginning of the fiscal period, Unit 1 began maintenance werAers insts//eg M low-power physics testing. Other milestones sheet /J# miles af overhead included; e/octric gistribution fines, g Growth in the SRP . in Juiy, the nuciear Reguietory service territoru o is
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during demonstration tests, expected to outpace . Sept. 26, APS successfully displayed its ability to communicate timely information to local population increases in eme,gency.se,, ice, ,,encie, ena mem3e,, or tne the overall Phoenix area. news media. The NRC validated APS' Emergency Response Plan.
- Dec. 31, the NRC issued an operating license for Unit 1.
of 2,266 MW established in August 1981. e Jart 7, fuel loading began on Unit 1. All Winter peak demand records broke, as well. of the 241 reactor core fuel assemblies were Customer electric demand reached 2,143 MW on installed by Jart 11. Fets 1, which topped the previous winter demand high of 1,822 MW established in January 1984. PS ed W h MM M 1 commercial operation date of Dec. 31,1985. Work Total kilowatt hour sales to SRP customers during the year increased by more than 15 bilhon I"8 kWh to 14.1 billion kWh. c nstruction activities at 99 and 97 percent geci,/,ns res,y to h,/p meet . complete, respectively, Units 2 and 3 are scheduled the energy needs this reeng With reliable servim and competitive electric to be available for cornmercial operation by late p,if inili neeg in ye,r, to rates, customer growth in the SRP service territory 1986 and mid1987. cama. is expected to outpace population increases in the ' overall metropolitan Phoenix area. SRP planners During the year, the Arizona Corporation predict a 6 percent increase in the number of new Commission raised the specter of possible customers during the new fiscal year, compared to construction misappropriations at Palo Verde. The - tbout 4 percent growth forecast areawide by Arizona commission, with the backing of utility Maricopa County population planners, regulatory agencies in other Palo Verde participation Employee productivity will be put to the test, states, requested a construction audit. . because power construction and maintenance As a not-for-profit, municipal-type electric e workload is expected to increase 50 percent. More utility, Salt River Project is not regulated by the ACC. i than 35,000 new residential hook ups are foremst. But, in an effort to maintain public confidence in i which will require 26 miles of 69-kilomit Palo Verde, the SRP board of directors voted to fund transmission line and eight new distribution N%'"'# up to $1.2 million in costs associated with a planned substations during the year. construction audit. The funding ceiling is (continued) S
proportionate with SRP's 17.49 percent ownership SRP is prospecting for coal of the power facility. Even after commercial power is available from the Palo Verde Nuclear Generating Station, low-sulfur Western coal will remain the mainstay of SRP's fuel diet. In 1988, when power from all three SRP will need additional sources of power b """ * * * * ' * ' ' " in addition to the Palo Verde Nuclear pewent of Ws generadon d & New h coal Generating Station. SRP must plan timely, affordable To keep up with increasing need for coal, sources of power to satisfy ratepayers' needs in the SRP hired a consulting firm to design a potential 1990s and beyond. test mine on a 320-acre coal exploration site in At the beginning of the 1985-86 fiscal year. western New Mexico. The design work is part of an the SRP board of directors selected Black & Veatch ng ing eff rt t study the feasibility of large-scale of Overland, Kan. as construction managers of a third 350LMW coal-fired unit at the Coronado
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sc I leases on ME acres of Generating Station at St. Johns. I nd near Fence Lake. N.M., which is 40 miles east With a flexible construction schedule Unit 3 f the Coronado Generating Station. SRP is still in a can be ready for commercial operation in 1990 or 1991, depending on need. The new unit will include some design enhancements not found in Units 1 and 2. Design of the first two Coronado generatiag units occurred in the early 1970s with the best technology available at that time. With state-of-the-art technology, the The Mead-Phoenix DC third unit is expected to redu e boiler fuel costs by p FON about $30 million during the 35-year life of the unit. SRPs commitment to protect the SRP'S ability to environment continues with its plan to further improve the pollution-control system on Unit 3. Still. 8%CbaN96 6U6TQM Wflb more than $200 million was spent for airquality-control equipment on Coronado Units 1 and 2, olb6T WBSl6TH Ulfl[l[6S. making them among the cleanest in the country. It generally takes a decade to plan. license, construct and start up a new generating station. With that in mind, SRP's employees already are undertaking preliminary siting studies for another dus/ity workesaship helps tudy phase in the region, but it a 100.000 ton-a-coal fired power station.
};1 keep SAP / sci /ities in top year test mine seems economically and environmentally feasible, SRP will take further steps il c5wditian.
to develop this resource. e
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,. s DC line would help cany power e SRP completed technical studies for a high-
. voltage direct current (DC) transmission system
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which would link the Phoenix area with existing bulk 4
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transmission facilities in southern Nevada. The 500-
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C. Scottsdale s April 30, Hydro' Gas Oil Coala F1uclear Purch. D. Tempe 1982 83 10.8 0 79.4 0 13 h.'.G lt ert G Chandler " 1983 11 3 5.8 0 81.1 0 1.6 1984 15.8 3.9 03 78.6 0 1.2 y ' 1985 12.8 8.9 0.4 762 0 1.7 yf, M 1 includes hydro purchases 2 includes %APA tiavajo Entidement
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HAYDEN j Electric Service Area Served Exclusively by Salt River Project. Salt River Project Provides Full Power Requirements of Arizona Public Service for Resale. Project Makes Direct Sales to Customers for All Mining 1.oads. 4- :.' - Salt River Project Provides Full Power 4
,. i j Requirements of Arizona Public Service
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Electric Service Arees Not Served by Salt River Project. agent for federal hydroelectric power. building. When fully equiped and staffed in 1986 the The 240-mile system is proposed to carry 68,45& square-foot structure will contain the latest in energy between the Mead Receiving Station near computer technology to control energy from the Hoover Dam and Phoenix. If completed, it would generating station to individual customers' homes Advanced communicarians improw SRP's ability to exchange energy with other and businesses. techniques, exempil/ied by the Westem electric utilities and may reduce the need microwave repeater tower, sid , The number of employees and the need for to add new generating stations. Further, DC power utilitr e//iciencr. transmission could save considerably more money new office technology will expand as the number of than a conventional altemating current transmission
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- require a new facility for SRP's computer service line. Advantages include better control of power employees. In March, SRP awarded a contract to ,
flow, more compact transmission construction and enhanced system reliability. esign an n rma n systans Wng to W Feasibility studies begc.a during the fiscal year I ca ed on h new{ acquired Legend City propelty to determine the potential for extending the DC line from Boulder City, Nev., to a Los Angeles SRP also awarded a contract to design the Department of Water & Power switchyard in Tolleson Regional Center in the west Valley. Southern Califomia. Regional centers enable SRP to cut response time s to customer service areas in the sprawling Salt River i
] Valley. Scheduled to open in December 1986, the 130,000Lsquare-foot Tolleson facility will provide SRP adds facilities to meet customer growth A4 J
space for field and shop employees, transportation r :- In December, some employees began and warehouse facilities, a business office, customer working at the new $14 million Power Operations service office and an employee credit union. g m
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. u ossw . . .. egigw TRICKLE TCIRNS TO TORRENT IN A YEAR OF EXTREMES N "n o g .. L. s e gr e , s . . ,
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The sxwpack on SBP's wit rshed det:rmiaes hsw much water is in storage the next season,
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watt in storage. Uncharacteristically. the supply of Water operations continue to improve
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water in the reservoirs decreased through spnng. Emergency operations were in effect the latter ,. But at year's end, the reservoirs contained portion of the year. first coping with locally heavy 1,781,671 af, which is 88 percent of capacity and summer rains, J1en contending with winter storms YC 172 percent of normal. and rapidly filling reservoirs. A quick response k > Fortunately, the abundance of surface water according to SRP s Emergency Reservoir O.,erating k. ( promises to help reduce the need to pump Procedure is essential to reduce the chances of - : groundwater during 1985. Reduced pump operating flooding downstream of the dams. r ., . : expenses can help hold down future water charges. Sound decision-making requires a continual i At the same time Valley residents move closer to flow of updated weather and runoff information. . 6 the state mandated goal of balancing underground SRP worked closely with the National Weather pumping and water recharge. Service and the U.S. Soil Conservation Service to produce accurate weather forecasts and improved ^A-( 3 , estimates of potential nyer flows on the watershed. p t m,. . N Water use pattems are changing In additi n. SRP purchased equipment to help em
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Significantly. water usage is shifting as the au mate wa eNauging sysh Valley urbanizes. For the first time in the 81 year Theodore Roosere/t Bem an e en "W We Sn
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history of the Salt River Valley Water Users- the Ss/t #irer he/ps meet the Association, annual water delivenes to urban users The equipment is linked to satelhte-relay gaug ng stations capable of updating SRP on SRP member lands outpaced agricultural deliset es by nearly 40.000 af. Urban dehvenes to t *'"'9""*"I"***" " * * " Project lands totaled 393.851 af compared to agricultural dehvenes of 353.916 af. The trend is expected to continue with httle agricultural water demand in the Valley after the year 2035. SRP CrelDS Complete Water supplies to municipal, industrial and agncultural users in 1984, including decreed a [Our-liear Canai delivenes to non-member lands, totaled 881.501 af, ImPrOuement program i compared with 1.014.772 af the year before. ,,,,,,,,,,,,,,,,,,,, Deliwnes to the cities totaled 281.439 af, a 12.0 recrestions/ opportunities, toa percent increase from 1983. Although agncultural acreage decreased oy yeqqngy 6.3 percent to 89268 acres in 1984. crops produced in the SRP area increased in value to NNSQMy yp - conditions on the 13.000-square-mile watershed. *%t > ' g g , $92.3 million from $87 0 million the previous year. SRP continued its long term war against water The increase in value is attnbuted to a reduction in losses. Dunng the annual canal dryups. SRP lined the federally funded Payment in Kind program, about four miles of major canals with concrete which restricted some crop production. matenal at a cost of about $2.6 milhon. To date. In November, the SRP Board of Govemors SRP has improwd more than 50 percent of its 131 increased water charges for 1985 to help keep pace miles of major canals and 85 percent of its 880 with the rising costs of water dehvery. Pump water miles of smaller water laterals rates increased 5 percent, from $26.75 to $28 per in related work. SRP crews completed a four-acre-foot. Water dehvery fees increased 9 percent year canal improvement program by instalhng a from $27.92 to $30.46 per account plus the existing record 342 safety steps and 146 ladders Although 21 cents per acre. The board voted to keep the entrance into SRP waterways is prohibited. these existing water assessment rate of $16 per acre devices provide the pubhc and stray animals a quick Payment entitles landowners to use two acre-feet of exit from SRP canals in the event of an emergency. water per acre. (continued)
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Groundwater quality is an emerging issue options developed by the Central Arizona Water throughout Arizona. Control Study as the best way to provide CAP water
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. ." alarm about organic groundwater contaminants. modifications. The plan calls for:
'y- - q' ' -^> The ADHS ' ordered scores of Maricopa and Yuma e a New Waddell Dam and an enlarged Lake county water companies to conduct groundwater Pleasant on the Agua Fria River;
[' - . tests similar to those performed voluntarily by SRP e Cliff Dam on the Verde River. Horseshoe Dam
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{j... y since 1979. will be breached when Cliff Dam is completed; j Past dumping of industrial solvents and and
, g j m,c 4~ . . j misuse of chemical sprays have led to detectable e an enlarged Roosevelt Dam and structural s levels of some suspected carcinogerw. Traces of 9"JP Dibromochloropropane (DBCP), Trichloroethylene modifications to Stewart Mountain Dam on the
_ . Salt River. (TCE), Trichlorethane (TCA) and
, SRP management actively is involved with Tetrachloroethylene (PERC) have been d.iscovered Arizona Govemor Bruce Babbitt's 17-member task in SRP and non-SRP water wells.
.. > SRP groundwater production has not been
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affected. The natural dilution process of mixing groundw te wth large quan&s of surfau wate g gy gggjygjy pyygygg Contral Arizons Project canal
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construction continues noor SRP's Granito Rorf Diversion Dant. Cleaning up the underground water supplies 5 is a community concern, and SRP is offering TF10dl[lCallOT1S technical expertise to help strike at the root of the problem. SRP employees serve on numerous Valley flood <ontrol and water conservation elements of the task forces aimed at identifying sources of
$1.1 billion Plan 6.
po lutants, studying the extent of groundwater SRP actively is pursuing safety of dams contamination and determining future actions. modifications, too. For the first time, the U.S. Bureau of Reclamation appointed an outside agency (SRP) to a development team. The team is responsible for design work conceming Roosevelt CAP water, dam safety are top concems and Stewart Mountain dams. Nearly two decades after passage of Shortly before the end of the fiscal year, the authorizing legislation, Colorado River water is about federal Office cf Management and Budget approved to flow into Central Arizona. In cooperation with SRP's Safety of Dams Modification report for the Valley CAP interests, the SRP Board of Govemors in Salt and Verde rivers. Congressional approval will the fall approved a CAP-SRP interconnection of send more than $271 million in construction funds water-delivery facilities. Construction activity is to Arizona. proceeding near the Granite Reef Diversion Dam Recognizing the importance of timely east of Phoenix in anticipation of CAP flow in early completion of needed dam repairs, SRP agreed to 1986. provide nearly $2 million in up-front funding for During the past year, the first of three phases work on Stewart Mountain Dam. The appropriation
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to formulate a computer simulation model of the erubled the U.S.B.R. to do drilling and pre design existing reservoir system was completed to study r.ctivities as part of preliminary work on the federally potential elements of the Central Arizona Project owned dam. The funds will be credited to SRP's ' Plan 6. share of local cost-sharing for the project. O
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M - , ,1 ' , During the year, preliminary results of , , SQ PHOENCE -_ + research on the Salt and Verde rivers indicated #D q_, some historic floods were indeed large enough to
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77 4 g' create safety hazards for SRP-operated dams if the ; .e . ', 1 YERAPEl_ {-f floods occurred today. The information confirmed .. , ; ; ,( the need to proceed promptfy with flood <ontrol ' [ M measures. g. 'W A University of Anzona professor leading the I
/ " CHANDLER research said the studies involved inspection of flooddeposited evidence datable for almost 2,000 _ _ . _ _ _ _ _ _ _ _ _ _ f years. According to the paleoflood studies, histonc l flows reached approximately 240.000 cfs on the Salt ,- !
River and about 200.000 on the Verde River. By companson, the largest upstream flow this , . century occurred on the Salt Riwr in March 1978. l C-i - 1i i1 A with 170.000 cfs recorded near Roosevelt Dam. 1 l 1984 1983 change Follow-up studies will be performed on the % ' Chandler 6.739 4.665 + 44 5% two rivers during 1985. If the research is validawt i
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the U.S. Bureau of Reclamation proposes to include Mesa 39108 35.203 + 11.1% Pe ' the results among information being analyzed in ' Ph lx 17 7 15 . 6 2 *5 federal Safety of Dams studies. scottsdale 4.253 4.639 83%
"- Salt River Project irrigated Area Tempe 31.716 29.271 +8.3%
Total 281,439 251,110 + 12.0'. g 13.000 Sq Mile y ng,, , ,,, y,, yy m,,g gng %, Project Watershed SRP shares information on an international scale SRP eagerly greets opportunities to share the Water Use and Management Program. The experience and technical know-how that have made exchange of SRP managers and Egyptian officials it a success. SRP management confirmed the enhanced the friendly relationship enjoyed by the importance of shanng these on an intemational United States and Egyot. scale when it opened the Office of International Phase I of PEEP (Apnl 1982 through June Affairs in January 1984. 1984) provided a forum for exchange of water The OIA staff coordinates tours of SRP operation procedures and management practices. A facilities for foreign visitors; arranges on-the-job proposed Phase 11 involves concentration on Egypt's training programs about water and power technical needs and management development. operations and management; and develops employee exchange programs with other countnes. e 4m.s.. g. ' 4 -y wf N During its first year, the office hosted more than 3 1. ' _
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400 visitors and presented 11 training programs to representatives of 53 countries around the world. .. Among SRP's proudest international * %- accomplishments is the Professional Employees - [ Exchange Program (PEEP) with the Ministry of g~ ~ - Irrigation in Egypt. The program began in 1981 k, p a, under the auspices of the U S. Agency for ; -h .
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l' Plnge resinnts einelore war en trash. And, a Novejo Generating Station employee and his son (inset) pitch in. runners participated in an SRP sponsored Coronado Generating Station Run. Proceeds resulted in a $660 to 48 outstanding high school seniors from around the state. And, a Phoenix area community college g %4 g contribution to the St. Johns Senior Citizen student received SRP's first Young Adult of the Year our isinter met /beser Catasurs: Association. Award for work with the handicapped. Salt River Project helped sponsor an anti-litter program in Page that was so successful it won first e To k W m a m m ' Excellence was a part of doing the job e To pavide prompt, relishle end plac2 in the 1984 Keep America Beautiful awards Beginning with the general manager's staff, a courteous sendca - competition. About 3,300 Page residents-65 program of achieving and recognizing outstanding .
- To treet you as we would went to percent of the population-picked up 91 tons of performance reverberated throughout SRP. The he treeted.
trash in the community. Because of work with th Keep America Beautiful organization and focus of a continuing executive management social e To listen to your concerns and to ivicother c? . issues lecture series shifted at the beginning of the react roepensibly undertakings, the City of Page-Lake Powell Chamber fiscal year to motivational tones intended to "make ' e To keep you infersned of Commerce named SRP Sr. Information Specialist excellence happen" e To be senemve to costs in el we Jerry Jones its Citizen of the Year. And, happen it did. . da = A citizens' advisory panel picked 15 SRP Employees' performance improved through e To eserch for new ways to de sur employees to receive Karl F. Abel Volunteer an expanded " quality circles" program. Workers jobs better.' Recognition Awards. Abel awards are presented attended weekly meetings to help find solutions to e We make this pledge se 'that you (nnually to individuals who distinguish themselws work place problems. In its first full year, the wil kasw esectly what you con con-- through community efforts. The award is named program grew to 26 from four quality circles. tinue to sepect from us. after the retired SRP president, who remains an Some suggestions paid dividends. As part of ' TM EartMEES M active participant in civic and community the general excellence program, management TM SAT m tyluMFCT organizations. ' ~ ^ emphasized an improved suggestion program. During the year,34 employees received awards of up to $1,000 for ideas about how to improve SRP honors 48 Productivity and save costs. Employees camed a total of $9,400 for cost savings estimated at more cut. standing students. than $2w.0w. Training and development opportunities continued to increase. A record 1,046 workers-about 20 percent of the work force-participated in Employees further pledged their time through employee development programs including , trade and civic organizations such as the Better supervisory training and advanced management Business Bureau,the Arizona Alliance of Business classes. Interviewing by a management steering M are seeW sur Maut te rnd the American Public Power Association, as well committee continued at year's end to select a ' d'I" # ""* e Employees are indleduesy and as e ss functioned as loaned executives to three Valley second group of 10 employees for a management United Way agencies. SRP workers also assisted dewlopment rotation program. Those selected earn '"'" 8""i"'d 'l"I'Y "'I ccience-minded high school students in the SRP- valuable supervisory experience through four, six. sponsored Tempe Scout Explorer Post. month job rotations.
- Emidsyns m trated wh diessy in another community endeavor, SRP and Another 1,938 employees took part in '"d N"'-
Arizona Public Service Co. co sponsored the Sixth computer-related courses to keep up with e W nuds and upsetatius of m. Annual Energy Fair. A total of 104 young scientists burgeoning administrative and technical needs. ployms m a mju conesdaten in helped celebrate 106 years of energy progress since Computer technology is helping SRP employees 'A' d"""II"E P" Thomas Alva Edison invented the incandescent save manhours and increase productivity on the job. e h epimu and hs of m-light bulb. The number of computer terminals in service pleyws m rougued a messed
> 13.2 in the year, the limelight shifted to the increased to about 1,650 from approximately 1,180 to meting the gode end ehiscens thirdennual Spotlight on Excellence program. SRP during the year. That number is expected to expand of me Seh h Pmjus provided a pat on the back for academic excellence to about 2.900 by the end of 1986. . SM MAAldNT _
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The American Public Power Association are compatible with community needs. For instance, ranked SRP third nationally in annual safety the City of Tempe honored SRP with an award of competition among member utilities. Significantly, distinction for planning and landscaping at the new E SRP employees camed the rating during a swirl of Tempe Regional Center, work station for
, y, activity in connection with a record number of new construction, maintenance and customer service electric customers. However, the death of an employees. Public input will be sought dunng the employee during storm clean-up in April 1985 was new fiscal year for a planned Tolleson Regional J .
a tragic reminder of the risks associated with Center in the west Valley. Other community services included: g- . h providing electric service, and the need to keep
,- employee safety the top prionty.
- Project Outreach. SRP business offices
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) provided free credit counseling to 8,632 customeis with credit problems. As a result of this referral semce S mst mers receiwd about WM in Customers pleased with SRP federal energy funds administered by the state Survey results show 95 percent of SRFs during the fiscal year.
A young SAP swsed recipient electric customers served in March rated SRPs I h:s her dsy. service good to excellent. And, although it may seem impossible, our goal is to satisfy every e Power Saver Service Home Audits. At 1,166 thorough home inspections to determine customer. l Excellent service includes a responsibility to i associated with energy conservation l help save our resources. SRP customers leamed recommendations typically far exceed the $15 ways to conserw water and power through billing dhd inserts and brochures. The public also received e Project S.HAR.E. SRP collected $128,913 answers to energy questi, ns through employees at g SRFs Customer Information Center and businest . thousands of needy residents with energy expenses. Joggers in SRFs second-annual 10-kilometer SRFs Power Saver Store presented formal "StH.AR.E. Affair" run contributed another $2,011, a
"* '# "' three-fold increase from $650 in the inaugural year.
The I'ower Saver Store rotated among major The Salvation Army administers SRP and Arizona shopping centers where employees offered expert Public Service Co. customer donations for the advice about the efficient use of our water and Service to Help Arizonans with Relief on Energy. power. Approximately 10,000 area residents received do-it yourself tips about how to install insuiation, weatherstripping, caulking, water heater jackets and other conservation materials. SRP Research and development hold promise of conducted microwave cooking classes and tomorTow discussed water sprinkler systems, with methods to Salt River Project explores research cnd improve household water efficiency. dewlopment options today to assist power Valley residents learned about water and customers in getting the most for their future power conservation through a record number of energy dollars. That commitment includes speakers' bureau presentations and school continued solar research to try to take advantage of i Fraviding in/armation seaut energy conservarian technigues education programs. During the year SRPs all. an abundance of sunshine in central Arizona. is part el S#F's job. volunteer speakers' bureau members addressed Solar energy is proving to be an efficient, 42,959 residents dunng 759 talks on a variety of costeffective way to meet the hot water needs of subjects. About 70,000 schoolchildren participated many Arizona families. in 675 water and power safety discussions. Last fall, SRP began a two-year project testing SRP listened, as well. Management solicited a residential energy system designed to reduce peak public comments during the various planning and load on an SRPowned test home. The system
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@ licensing phases of major projects to ensure plans Produces and stores thermal energy in the form of in N
7- 7f 1 chilled water dunng lower electnc demand hours. The stored energy later satisfies part of the home's ccoling needs during SRPs high energy use p2 nods. I the system does help reduce peak electric C demand, it can be refined for resKiential and e "=. vw, - commercial applications-possibly mass-produced. It 4- ' ~ may prove economical and efficient for SRP and its q - customers, especially those on experimental bmeof- 'Wj an u
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With bmeofday rates, the cost of electncity is sua ao a r 10 - + 4-k;f lower dunrs off-peak hours of the day, when electric demand is lowest. Conversely, rates are higher ---
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{ during on-peak hours, when demand is highest and " " " " " it's more costly for SRP to produce power. During or -peak hours SRP must supplement less-expensive cosl-fired and hydroelectnc generabng units with more expensive oil- and gas-fired generation. A 50-ton solar air conditioning experiment # * #' ' by a photovoltaic array into altemating current. SRP that began in 1981 to cool an SRP administrabon is testing the compatibility with correntional AC building concluded in 1984. Results indicate solar electnc systems. ## #"# ####' ###" #"I energy units can stand up to the demands of ## I"## # # Salt River Project continued to meet its goal commercial electnc usage, but equipment and "## """ ### # * ' of exploring new technologies through contnbutions installation costs art high. The federal Department to the Electric Powr Research Insbtute, the '# #### ## # ####' of Energy underwrote about half of the $750,000 #*### ### " research arm of the electric utility industry. research project and tumed the equipment over t Owrall, EPRI managed 1,500 active research SRP for continued operaboa projects representing in excess of $1.7 billion owr five years. Participation in EPRI avoids costly duplication of research and allows extensive development far beyond the capabilities of any one SRP conim, ues to ut,,,,y. r gg g EPRI, founded in 1973, recorded savings of more than $300 million in 1984 alone for SRP and technologies the other 472 member utilities. These savings wre j accomplished by the use of EPRI developed equipment, power plant maintenarce and operabon procedures and improwd technolcgies. SRP contributed $1,920,986 last year. The equipment will continue to fumish a SRP also renewed its membership in a portion of *e air conditioning requirements of the nationwide energy research effort sponsored by the ' facility. Amencan Public Powr Administration. The j For the third par, SRP contnbuted $100,000 program, called DEED (Demonstration of Energy- i under a five-year commitment to energy research Efficiency Developments), focuses on near term I endeavors at Arizona State University. And, research development of technologies that increase public l continues on an 18-month joint SRP/Sandia power system efficiency and costeffectiwness. l Laboratones photovoltaic solar research project involving tests of up to six powr conditioning units. Power conditioners conwrt dired current produced 15
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. $i HIGH BOND RATINGS HIGHLIGHT A BANNER YEAR
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needs - not issue stock or pay dividends. Net revenues are reinvested to 1981-82 1884 85 yggy,gy help replace equipment and finance construction of new facilibes. g7 [,k 1883 84 .h SRP took advantage of the high bond ratings and reasonable f.k f,g interest rates to sell $100 million in revenue bonds in January at an effective rate of 9.% percent. ((d Arizona residents purchased an additional $231 million of $500 denomination "minibonds" in February at an effective rate of 9.30 h percent. The bonds had a face value of $42.2 milhon. These included $6.7 million of zero coupon minibonds with a face value of
$25.8 million. Zero coupon bonds pay no semi-annual interest, as other bonds do. Instead they are purchased at a discount and interest income is included in the face value receiwd at matunty.
SRFrs tax-free minibonds are proving popular among Anzona's smaller investors with more than $65 million worth issued by fiscal year end. Another minibond sale may take place in late 1985, but an additional revenue bond sale to finance continuing SRP _ construction is not expected until calendar year 1986. In August, the SRP board of directors authonzed an increase to $300 milhon from $275 million in the maximum combined Revenues from residential sales, which totaled $340.3 milhon, amount of taxexempt commercial paper and credit-line borrowings. accounted for most of the increase in revenues. Commercial and Pioneered among public utihties by SRP, this short term financing industrial sales rose 17 percen' to $297.7 million, compared to method provides low interest funds for construction work in $253.5 milhon the year before. progress and for fuel inventones. A strong economy helped electnc sales for resale rebound SRP's debt tcrtotal-capitalization ratio continued to improve, as from fiscal year 1983-84. Revenues from this customer class rose it has since 1977. The ratio equals 69.7 percent, ccsmpared to 72.7 16 percent to $103.4 mil! ion for the fiscal year, an increase from percent a year ago. SRP established a goal of lowering the ratio to $89.3 milhon the year before. between 60 percent and 65 percent in the coming years. Dunng the year, SRP added 31.632 new customers. SRP electnc customers totaled 422,774 at year's end, compared to Electric rates holding; water fees increase 391,142 Apnl 30,1984. Average electnc use per residential Electnc rates remained unchanged for the second consecutive custome increased to 12,%3 kWh from 12.535 kWh. Due to the year. But, SRP management told the board of directors that an shght inc ease in the fuel cost adjustment factor, the average cost electnc rate increase averaging less than 6 percent will be needed of electn. ity for residential customers was 7.11 cents per kWh in next October. If the board approves a rate increase, it will be SRP's fiscal yea - 1984-85, compared to 7.06 cents the previous year. first since Apnl 1983, when rates rose an average of 5.5 percent. Res enues from water deliveries increased 32 percent to $ 7.0 The increase is necessary to help meet increased costs of milhon, up from $5.3 milhon the previous fiscal year. The increase doing business since spring 1983 and ease the impact of is attnbuted to the 1985 nse in water charges and revenues from construction financing. Management cited two wage and salary additonal water entitlements dunng the year. incre.ses awraging 6 percent each and anticipated financing czts Costs of operation increased, due largely to additional of building new coal-fired facilities customers, increased demand and the effects of inflation. Total SRP Water charges increased on Jan. I to keep pace with the operating expenses increased to $559 5 milhon from $484 7 milhon. nsing costs of dehvenng water. Expenses for fuel and purchased power rose to $229.5 milhon from Water dehvery fees rose 9 percent to $30.46 per account, plus $185.5 milhon. Increases in the cost of matenals, supphes and labor the existing rate of 21 cents per acre. Valley cities recemng water contnbuted to a $9 4 milhon increase in other operating expenses to under contract with SRP, or cities acting as agents for landowners $116.8 milhon. within their boundaries still are charged dehvery fees of $2.13 per During the fiscal year. SRP paid about $635.500 to 2,657 account. indmduals through an SRP shareholder compensation program. The SRP Board of Governors approved an increase in pump Average payment was $239. Shareholders are pnvate landowners water rates to $28 from $26.75 per acre-foot. The board kept the within the SRP water service temtory whose land was pledged as ensting water assessment rate of $16 per acre, which entitled collateral for borrowings to build SRP facihties. Some receive landowners to use two acre-feet of water per acre each year An electncity from Arizona Public Service Co in 1928. SRP amended , acre foot equals 325.850 gallons its bylaws to provide compensation for shareholders who pay ) The assessment helps pay the cost of SRP water operations. substantially more for APS electncity than they would for SRP All 238,171 acres of member land within SRf7s water service area power The courts ruled that the substantial difference is 15 percent are assessed at the same rate regardless of whether the water is or more. ) used for municipal, industnal or agncultural purposes Payments were made to ehgible SRP shareholders who were APS electnc customers from Jan 1,1%9 to Dec 31,1981. In Operating revenues rise-so do expenses total SRP received 13.693 apphcations under the program An 8 percent increase in the number c,f Salt River Project Deadhne for fihng apphcations was June 21,1985. SRP is electnc customers and stabihnng effects from the nse in the fuel beginnirw] to process appbcations for a similar compensation cost adjustment factor contnbuted to operating revenues of $785 0 program covenng calendar year 1983. millu>n. up from $684.0 milkon in fiscal year 1983 84 Maintenance expenses grew by $12.3 milhon to $68.4 milhon Electnc operating revenues, which wre 99 percent of total for the year, and uncontrollable expenses such as in lieu and ad revenues, increased 15 percent to $7 78 0 milhon, up from $678.7 valorem taxes, sales and payroll taxes and depre< iation rose 591 milhon the year before milhon to $144 9 milhon 17
Salt River Project Aaricultural improvement and Pbwer District and its agent. Salt River Valley Water Users' Association Combined Balance Sheets As of April 30,1985 and 1984 Assets ($000) 1985 1984 UTILITY PLANT, at original cost (Notes 1,2. 3 and 41: Plant in service Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................. ................ 82.072.124 $1.975.073 Irrig ation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 80.498 79.061 General..................................................................... 107.381 92.704 Total plant in service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.260.003 2.146.838 Less . Accumulated depreciation on plant in service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 616.008 550.725 1.643.995 1.596,113 Construction work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.925,916 1.631.055 3.569.911 3.227.168 SEGREGATED FUNDS, consisting of cash and U.S. Govemment obligations set aside in accordance with resolutions of bond issues: Debt service funds, excluding $59.718.000 in 1985 and $59.563.000 in 1984 for payment of accrued interest (Note 5)...................................................................... 101.355 96.556 CURRENT ASSETS: Cash ............................................................................ 543 6.571 Temporary investments at cost. held primarily for construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212.934 199.441 Deposit in debt service fund for payment of accmed interest on bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,718 59.563 Trade and other accounts receivable, less reserves of 81.298,000 in 1985 and 49,439 40.086
$ 1.363.000 in 1984 for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fuel stocks, at last-in, firstout cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.193 65.092 Materials and supplies, at average cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.190 38.375 Prepayments, interest receivable and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.019 8.243 419.036 417.371 DEFERRED CHARGES AND OTHER ASSETS 69,380 59,092 h (Note 1)....................................................................... 84,159.682 83.800.187 ( 1he accompanying notes are an integral part of these combined balance sheds. Il
Capitalization and Uabilities ($000) 1985 1964 LONG TERM DEBT (mte 51: Electric system revenue bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,433,328 $2.324,108 ; Commercial paper and other. . . . . . . . . . . . . ............... ................ 310,360 285,918 2.743,688 2,610,026 ACCUMULATED NET REVENUES, invested principally in utility plant: Balance, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 977,911 789,735 Net revenues for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................. 215,677 188,176 Balance, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.193.588
- 977,911 Total capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.937.276 3,587,937 CURRENT LIABILITIES, excluding $17,626,000in 1985 and
$12.861,000 in 1984, representing current portion of longterm debt which is to be paid from segregated funds: I Accounts paya ble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,724 65,743 Accrued taxes and tax equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,361 36,131 Accrued inte rest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.215 61,445 Customers' deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,407 13,324 l C;her current and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 18.094 1 203,707 194,737 DEFERRED CREDITS AND RESERVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,699 17,513 COMMITMENTS AND CONTINGENCIES
(&tes 3 and 6) i 84,159.682 $3,800,187 ) 19 i S
Salt River Project Agriculturzl Improvement and Power District and its agent. Salt River Valley Water Users' Association Combined Statements of Net Revenues For the Years Ended April 30,1985 and 1984 O g ($000)
*' 1985 1984 OPERATING REVENUES:
$777.993 $678,698 Electric.........................................................................
Water and irrigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,039 5.295 Total operating revenues . . . . . . . . . . . . . . . . . . .................................. 785,032 683,993 OPERATING EXPENSES: Power purchase. ........................................... ............. ..... . 27,839 26,456 Fuel used in electo generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201.645 159,025 Other operation expenws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116.792 107.370 Maintenance...................................................................... 68.359 56.086 Depreciation and amortization (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,841 68.046 Taxes and tax equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,028 67.745 Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559.504 484.722 Net operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225,528 199,265 FINANCING COSTS: Interest on bonds at coupon rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171.979 159,129 Amortizatior, of bond discount issue and refinancing expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970 2.765 Interest on other obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,646 15,833 Interest cam wi on investments and deposits (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (52.024) (35,101) Net financog costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140.571 142.626 Less . Allowan:e for funds used during construction (AFUDC) (dote 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (123,897) (113.665) Financing cc sts less allowance for funds used during construction . . . . . . . . . . . . . . . . . . . . . 16,674 28.961 OTHER INCON.E (DEDUCTlONS): Other deductions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................ (619) (9,764) Gain on sale of electric generating facilities (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,442 Totalother................................................................... 6.823 (9,764) NET REVENUES BEFORE EXTRAORDINARY ITEM . . . . . . . . . . . . . . . . . . . . . . . . . . . 215.677 160,540 EXTRAORDINARY ITEM: 27,636 Gain on defeasance of bonds (Note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N ET REVEN U ES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $215.677 s188,176 O % The accompanying notes are an Integralptrt of these comhned statements. N A,
L Salt River Project Agricultural improvement and Power District and its agent. Salt River Valley Water Users' Association - Combined Statements of Changes in Financial Position For the Years Ended April 30,1985 and 1984
.1
($000) 1985 1984 SOURCES OF FUNDS: , Funds generated from operations before debt service-4 Net operating revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add-Depreciation and other charges not requiring
$225,528 $199.265 g ,
current fund s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,661 74.139 Total funds generated from operations before debt service . . . . . . . . . . . . . . . . . . . . . . . . . . 303.189 273,404 Funds obtained from financing-Proceed s of bond issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120.784 282,226 Other long term borrowings, net of repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,267 25.307 increase in accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770 10,926
, Total funds obtained from financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,821 318,459 Other items providing funds-Proceeds from sale of electric generating facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,089
' Contributions in aid of construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.528 14.757 Interest earned on investments and deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,024 35.101 Decrease (increase) in fuel stocks and matenal and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,084 (6,796)
- l Changes in other liabilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,175 13,629 Increa se in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 981 21.343 Miscellaneou s rewnue s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,915 1,772 Total funds obtained from other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,796 79,806 -
Total net funds available before debt service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564.806 671,669 APPLICATION OF FLINDS: Debt service-Repayment of principal and interest on bonds and U.S. debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,008 185,207 ! Repayment of principal and interest on short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 18,646 15,833
- Defeasance of General Obligation Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121.752 Total application of funds for debt service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204.654 322.792 1
Other items requiring funds-Gross additions to utility plant. net of AFUDC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323,682 298,669 Gross additions to non utility plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,414 Decrease (increase) in accrued taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.770 (16,127) Other expen ses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.534 11,536 Increase in other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,902 6,661 Total application of funds for other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347.888 324.153 Total net application of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552.542 646,945 INCREASE IN CASH, TEMPORARY INVESTMENTS AND SEG REGATED FUN DS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.264 24.724 BALANCE AT BEGINNING OF YEAR IN CASH, TEMPORARY INVESTMENTS AND SEGREGATED FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302.568 277,844 , BALANCE AT END OF YEAR IN CASH, TEMPORARY INVESTMENTS AN D SEGREGATED FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8314,832 $302.568 The accompentyng notes are an integral part of these combined statements 21
Salt Rivzr Project Agricultursl Improvsment and Power District and its egent, Salt River Wiley Wster Users' Associztion 5, Notes to Combined Financial Statements For The Years Ended April 30,1985 and 1984 1, (1) Summary of Significant 2 Accounting Policies (a) Principles of Combination s985 1984 d The combined financial statements include the accounts of the Salt River Project Agricultural gg** vested . . . . . 593.787.% 3 $78.058.944 Improvement and Power District (the District) and the Nonwsted . , 9.918.192 14 339,446 ]2 accounts of its agent, the Salt River Valley Water Users' s103.706.is5 s92398390 F Association, together referred to as the Salt River Project (the g,,,,,,,,,,,,i,,,, J Project), and a wholly owned subsidiary, Salt River Generating for benems. . s i so.30s.2s2 s129.462.565 _ Company. All significant intercompany transactions have been eliminated. 3 The average assumed rate of return used in p (b) The District's Board of Directors serves as its determining the actuarial present value of accumulatej y regulatory agent. plant benefits was 8% for the plan years ended Deceraber (c) Utility Plant, Depreclation and Maintenance 31,1984 and 1983. 2 The accounting records of the Project are maintained in addition to providing pension benefits, the District ) substantially in accordance with the Uniform System of provides certain health care and life insurance benefits for retired employees. Substantially all of the District's y Accounts prescribed for electric utilities by the Federal employees may become eligible for those benefits if they y = Energy Regulatory Commission. Utility plant is stated at reach normal retirement age while working for the the historical cost of construction. Construction costs U Include labor, materials, services purchased under company. The cost of retiree health care and life insurance 3 contract, and allocations of indirect charges for benefits is recognized as expense as the premiums andJbr deposits to the Trustee are paid. For 1985, those costs h engineering, supervision, transportation, and administrative expenses. totaled $1,030,641. An allowance for funds used to finance construction (f) Revenues
- work in progress is capitalized as a part of the electric and Meters for residential, commercial and small industrial 3 general plant. This allowance is deducted from net customers are read cyclically and sales recorded only g financing costs in the combined statements of net when billed. This system of billing results in earned but revenues and Mded to utility plant. Capitalization rates of unbilled revenues which amounted to $17,300,000 at April da 97% and M t were used for the years ended April 30, 30,1985, and $16.200,000 at April 30,1984. For large
.985 and 1%, respectively. Industrial customers, meters are read near monthend and
] g Depreciation expe...e is computed on the straight.line basis over estimated useful lives of the various classes of billings recorded on the accrual basis. Electric revenue billings are adjusted periodically for changes in costs of plant. Rates in effect resulted in provisions approximating fael and purchased power. Revenues from water and b 3.28% for 1985 and 3.44% for 1984 on the average cost irrigation operations are recorded when earned. 3 of depreciable electric plant, and 138% for 1985 and 1.99% for 1984 for depreciable irrigation plant. Several (g) Electric Rates
- ] depreciation rates were changed during the year as a result of a comprehensive study. When property Under Arizona law, the District Board of Directors has the exclusive authority to establish electric rates. The District is required to follow certain procedures, including
] _ representing a retirement unit is replaced, removed, or abandoned, the cost of such property is credited to the certain public notice requirements and holding a special Board meeting, before implementing any changes in the l appropriate utility plant account, and such cost, together standard electric rate schedules. No rate increases have c with removal costs less salvage, is charged to accumulated been Implemented since April 1,1983.
- depreciation.
The Project charges to maintenance expense the cost of labor, materials, and other expenses incurred in the repair, (2) Possession and use of restoration of condition and replacement of minor items of ggll ggh property. (d) Bond Expense The United States of America retains a paramount right d) Bond discount, premium and bond issues expenses are or claim in the Project which arises from the original n being amortized over the terms of the related bond issues. construction and operation of the Project's facilities as a
'***" *9 '*
(e) Employees' Retirement Plan Possession and use of, and to all revenues produced by, N The Project has a retirement plan covering substar'tlally t j all employees. The Plan is funded entirely from employers, contributions and the earnings of the invested assets. te i ed S ate l 3 i Contributions to this plan and the related expense totaled
$11,690,909 for fiscal year 1985, and $10.927,225 for fiscal year g $
hg 1984, and include amortization of past service costs over the period ending in 2012. A comparison of accumulated plan (a) Balances shown for construction work in progress represent expenditures for new facilities required to service _- benefits and plan net assets is presented below anticipated customer needs, and consist of: 3, !! A N
- m 0000)
'98' '"
(4) Interest in jointly owned Electnc generating facdities. electric utility plants: 81.789.436 81.536.823
- T - ss nand - eu ~ . . 75.iO8 48224 Imgation plant . . 12.472 9.128 (
Other constructen . 48.900 36.780 The District has entered into various agreements with (q e Total . . .. . 81.925.916 81.631.055 other electric utilities for the joint ownership of electric generating and transmission facilities. Each participating owner in these facilities must provide for and furnish the Construction expenditures planned for fiscal years 1986 financing for its ownership share. The following schedule _ through 1990 are shown below. In 1987 construction reflects the District's ownership interest (at cost) in jointly a expenditures are shown net of estimated proceeds i owned electric utility plants at April 30,1985: resulting from the Los Angeles Department of Water and Power (LADWP) exchange as explained in Note 3(b). ('" *'*"' ) Accumuested ork (In Thousands) Plant Flame Percent Service Deprecletion Progress Construction Use dng ns on Total Four Carews - 1986 1987 8374.019 111.105 8133.153 58.666 8507.172 169.771
$Yd>[
rievapo (Aruona) ... N 2t70 3N 2073 63.2 N73 1988 338323 40.556 378.879 Heyden(colorado) .. 5000 650 19 6 t.4 1989 490.453 35,130 525.583 Coronado (Aaaonal . . 70 00 651.8 107 4 22.8 , 1990 507.191 51343 558.534 C g' y Q j. 29 00 223 6 34 7 1.1 (twe J). . 23.19 182 1.4 13873 Construction of Coronado Unit 3, a planned 350,000 kW coal-fired unit, which is wholly owned by the District. The District acts as the operating agent for the is proceeding on a schedule for commercial operation participants in the Navajo and Coronado Projects, and, as I during the first half of calendar year 1991. The total operating agent, pays the costs of operations for each J estimated construction costs for Unit 3, including project and bills each participant including itself for its allowance for funds used during construction (AFUDC), is share of such costs. approximately $893 million. The District's share of direct expenses of the jointly These expenditures will be financed in part from the owned plants is included in the corresponding operating sale of certain of the District's properties, from funds expenses in the attached combined statements of net ] currently on hand and from future net revenues. The revenues. balance of required funds will be provided by the sale of revenue bonds. At April 30,1985, necessary commitments had been (5) Long term debt: 1 entered into for delivery of materials and services on sedes construction projects. In addition, various firm 8 e '"' } uu
, ,d 4 1965 N commitments exist under coal and fuel oil supply 1973 A 6 B . . 5 to 6.5% 8131.190 8133.625 1986 2011 contracts. 1974 A 6 B . . . .
. . 5.7 to 7.6 136.600 137.850 1986 2012
. 5 to 7.2 397.400 399220 1986 2016 (b) The District has a 23.19% interest in Palo Verde 'gB C,6, g D;. , . ,
Nuclear Generating Station (PVNGS). In 1986, the District ing 6 C . . . . . . 4 5 to 6125 383.915 3e6215 1986 2017 anticipates paying LADWP an estimated $300.2 million for 1978 AB 6 C.. . 4 9 to 7 309390 311335 1986 2018 LADWP's share of Coronado Generating Station and the District anticipates receiving an estimated $486.2 million
'9 p y ,,j y S' , ,9 7g 2
g 1981 A. B 6 C(b) . 9 to 14 86.266 86366 19862021 from LADWP in exchange for a 5.7% ownership Interest in 1983 A. B. C 6 D . 6 to 9 625 254.836 255.115 1 % 92023 PVNGS. The LADWP exchange results in a net settlement 1984 A(b) . 8.6 to 9625 150.000 150.000 19952023 of $186.0 million. The Nuclear R?gulatory Commission 1985 A. B. c C. . ..a4 to 9.75 19952025 (NRC) Issued construction permits for all three PVNGS unamortaed bond discount. . (40.436) (39 740) units in May,1976. On May 30,1985, the NRC lssued the Totai eiectnc system roenue full power operating license for Unit 1. It is anticipated bonds octandng. . 2.433328 2324.108 that Unit I will be fully commercial by or before Aprl!, United states cowemmers debt. 1986. " '""'""t beanng . 9M1 10266 19852W Units 2 and 3 are scheduled fo commercial operation Ciong""""'YN25 n 25% later in 1986 and 1987, respectively. (tvare h . . . 299.981 274.979 1985 Projected construction expenditures include Other. 9.llt to 10.5%. . 938 673 19851988 contingency allowances to reflect potential cost increases. Totat iongterm debt . 82.743.688 82.610.026 (continued) 23
^u
'A (a) Electric system revenue bonds are secured by a pledge increased future operating costs or a possible loss in the of, and a lien on, the revenues of the electric system after operational reliability of certain generating plants. All of these effects would increase the costs to be passed on to ) deducting " operating expenses" as defined in the bond resolutions, subject to amounts due the United States of customers through increased electric rates.
$9,441,295. In all years to date electric revenues, after
]- , deducting " operating expenses" as defined in the bond Navajo Tax: in 1977 and 1978, the Navajo Tribe promulgated three resolutions, have been more than sufficient to meet all tax resolutions affecting electric generating stations in debt service requirements. which the District has an interest, located on the Navajo q The debt service coverage ratio is used by bond rating Reservation. The District and other participants in the agencies to help determine the financial health of the affected generating stations filed lawsuits challenging the 2 District and other bond issuers. For the years ended April 30,1985 and 1984, the debt service coverage was resolutions in Federal District Courts for Arizona and New g calculated as follows: Mexice. As a result of action by the Tribe to honor its ($000) convenants not to tax the participants in the electric 7 439.3 $33 4 gn aWg stahns on de reseWahn, @e Mzona lawsd Revenues available for debt service . Total debt service requirements . 187,141 182.185 was dismissed as moot. No taxes are currently being )_ Debt service coverage ratio , 2.09 1.85 Imposed on the District. g Hopi Tax: j (b) $170,405,000 of general obligation bonds were defeased on February 9,1984, by using a portion of the The Hopi Tribal Council has proposed a Coal Severance License Ordinance. The intent of this ordinance is to tax proceeds from the 1984 Series A electric system revenue the mining activities of the coal supplier for generating 3 bonds. As the District has chosen to recognize all gains stations in which the District owns an interest. p and losses that result from defeasances of debt in the While the contracts with the coal supplier may permit period incurred, the gain on defeasance of $47,565,000 is such taxes to be passed through in whole or in part to the yM shown net of unamortized refinancing expenses of owners of the generating stations, the ultimate effect of T $ 19,929,000 relating to the defeasance of certain electric such taxes cannot be determined at this time. All such 3 system revenue bonds issued in 1977 and 1978. Although the tien of the general obligation bonds on revenues has taxes, if passed on to the District, would then be passed on to customers as increased fuel costs. been defeased, the general obligation bonds continue to Other Litigation: S be general obligations of the District, secured by a lien in the normal course of business, the Project is a upon the real property included in the District, a defendant in various matters involving litigation. In j1 guarantee by the Salt River Valley Water Users. Association, and by the District's taxing authority. As of management's opinion, the ultimate resolution will not E April 30,1985, the amount of defeased general obligation have a significant adverse effect on the Project's financial position or results of operations. h , bonds outstanding was $156,900,000. The annual maturities of bonds and other long term Payments to Association Shareholders debt outstanding (excluding commercial paper) as of April Served Electric Power by Others: ]" 30,1985, due in each of the fiscal years ending April 30. The Articles of incorporation of the Association provide U 1986, through 1990 are $25,569,000, $17,764,000, that certain shareholders served electric power by others ]
$24,590,000, $24,502,000 and $29.045,000, respectively.
Interest and amortization of discount on the various will be compensated if they are required to pay substantially more for power used for domestic or ordinary Issues outstanding during the year resulted in an effective farm purposes than would be paid by them if they were rate of 7.33% for 1985 and 6.97% for 1984. This rate furnished electric power by the Assochtion. This provision P approximates 7.84% over the remaining terms of the in the Arti.les has been adjudicated by the Courts of the State of Arizona and found to be valid. ]w bonds. The debt service portion of segregated funds Payments are currently being made covering the years includes $5,000,000 at April 30,1985 and 1984, restricted 1969 through 1981. A reserve for these payments has 3 for operating reserve requirements under bond been established which, in the opinion of management, p resolutions. adequately covers the Project's liabilty as of April 30, y- Electric system revenue bonds totaling $74,903,760 principal amount are authorized, but unissued. Electric 1985. N system refunding revenue bonds not to exceed
$747,331,260 principal amount are also authorized, but (7)Revolv,ng credit i V unissued. agreement / commercial ,
d (6) Litigation and other Paper program: The District has a revolving credit agreement (the 7 s cont *ngenc*es. i i . Ag,eement, ,ith e g,,ug of ,,enty.one sanx, led sy pi,,, j > i Environmental: Interstate Bank of Arizona, N.A. Under the terms of the M Various pending litigation or administrative proceedings Agreement, the District may borrow up to $300,000,000 T involving environmental matters could affect interests of until August 15,1986. If the Agreement is not renewed 77 the Project in present and proposed generating facilities. prior to August 15,1985, the District may continue to in general, these lawsuits seek to impose higher air quality borrow but must reduce its outstanding borrowings to not k standards for generating plants. If ultimately decided more than $225,000,000 by August 14,1986, and to adversely to the interest of the Project, the outcome of the $ 125,000,000 by August 14,1987. Following August 14, "J lawsuits could result in increased construction costs, 1987, the District may not make additional borrowings a 7 24 l 3 b dj l
g P cnd must repay all outstanding borrowings by August 15, used for construction expenditures and to finance the 1988. Borrowings under the Agreement initially bear District's fuel inventories. As of April 30,1985, the District ]_, intertst at a rate equal to 70 times the weekly average had no borrowings outstanding under the Agreement. As -" rite for three month Certificates of Deposit as published in the Wall Street Journal, plus certain adjustments (the of April 30,1985, the District had $299,981,000 of the Notes outstanding at an average interest rate of 4.85% d 25 percentage required to cover the costs of Federal Deposit Insurtnce Corporation insurance premiums and the Borrowings under both the Agreement and Piomissory Notes are being accounted for by the District as long-term g. reserves required by Regulation D of the Board of debt. Z Gov 2rnors of the Federal Reserve System on an amount The District's Board has limited the total amount of 3 equal to the outstanding borrowings). No compensating indebtedness which may be outstanding at any one time g btI:nces are required under the Agreement. A under the Agreement and in the tax. exempt commercial y commitment fee of 1/4 of 1% per annum is payable on the paper market to an aggregate of $300,000,000. M unborrowed portion of the $300,000,000 principal amount. - The District's Board I.as authorized the issuance of up to $300,000,000 in short term promissory notes (the (8)lfrigation and Water 7' Promissory Notes). The Promissory Notes are being so'd in the tax exempt commercial paper market. The operations: e-Promissory Notes will mature in no more than 270 (ays Irrigation and water operation expenses, including )g from the date of issuance and ;n no event after Aupast 15, depreciation, exceeded the assessments, delivery fees, and 3 1987. The Promissory Notes are issued in minimur., other revenues therefrem by approximately $9,866,000 for 1985 and $12,094,000 for 1984. These amounts do not g dInominations of $50,000, in bWer or registered form .. without coupons, and bear interest from their dat an include expenditures for additions and improvements to J annual interest rate not to be in excess of 15% irrigation plant and repayment of long. term debt. @ The indebtedness of the District evirkced 6.er by the Q Promissory Notes or berrowings under the Agreement is an unsecured obilgation of the District payable from the (9) Sale of the Coronado y general funds of the District la. fully available therefor, Ral1 road Spm y subjtet in all respects to the p<icr Hen of U.S. Government in December 11/34, the District sold a significant Loxns, Revenue Bonds and othe tradebtedness of the - District secured by revenucior essets of the District. No share of its interest in the Coronado Railroad Spur to 3 Tucson E!ectric Power Company. This sale resulted in a specific revenues or assm of the District are pledged to gain of $2.601.000 and interest income of $14,327,000. CJ y the payment of the Promissory Notes or borrowings under The interest income recognized in the current year, the Agreement and the Promissory Notes and such accrued over five years due to delays in completion of the M borrowings are not payable f 9m faxes. sales agreement. The net book value of the property sold 1 Proceeds from the sas of the Promissory Notes are was $10,450,969. s Auditors' Report 4 D , To the Board of Directors, Salt River Project Agricultural improvement
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and Power District, and Board of Governors, gl N Salt River Valley Water Users' Association: - T We nave examined the combined balance sheets of SALT RIVER PROJECT ;- - AGRICIILTURAL IMPROVEMENT AND POWER DISTRICT (a political subdivision of the State -j of Arizona) and its agent, SALT RIVER VALLEY WATER USERS' ASSOCIATION, together referred to as the SALT RIVER PROJECT, as of April 30,1985 and 1984, and the related combined statements of net revenues a.td changes in financial position for the years then 41 ended. Our examinations were made in accordance with generally accepted auditing J standards and, accordingly, included such tests of the accounting records and such other 2 auditing prciedures as we considered necessary in the circumstances. r) in our opinion, the financial statements referred to above present fairly the financial position of the Salt River Project as of April 30,1985 and 1984, ard the results of its g _ operations and the changes in its financial position for the years then ended, in conformity % with geni ally accepted account:ng princ!ples applied on a consistent basis. g Phoe ilx, Arizona. Arthur Andersen & Co. June 26,1985
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7.- Statistical Review ($000) Project General 12 Months Ended April 30 12 Months Ended December 31 j 1985 1984 1979 1974 l Operating revenues . . . . . . . . . . . . . . . . . . . . . 785,032 683,993 417,789 169,585 Electric . . ......... ................ 777,993 678,698 413,066 166.972 Water and irrigation. . . . . . . . ........... 7,039 5,295 4,723 2,613 Operating expenses . . . . . .... ........... ' 559,504 484,728 291,610 148,958 Net financing costs less capitalized interest . . . 16,674 28,961 25,170 11,397 Other deductions (revenues), net . . . . . . . . . . (6,823) (17,872) 574 372 ' Net revenues . . . . . . .................... 215,677 188,176 100,435 8,858 1 Gross additions to plant, , excluding allowances for funds used during construction . . . . . . . . . . . ..... 323,682 298,669 394,728 165,761 Utility plant, gross . . . . .................. 4,185,919 3,777,893 2,355,783 830,592 Contributions of electric revenues to support water operations . . . ........ ... 9,866 12,094 6,183 9.971 Taxes and tax equivalents . . . . . . ..... ... 75,028 67,745 42,859 18,949 Employees at year end . . . . . . . . . . . . . . . . . . . . 5,568 5,434 4,197 3,187 Water
- 1984 1983 1979 1974 Total storage and pumping capacity (acre. feet) . 2.853.519 2.838,906 2,858,261 2,884,556 Storage capacity (six reservoirs) . . . . . . . . . . 2.019,102 2,019,102 2,063,948 2,072,050 installed pumping capacity . . . . . .. .. . 834,417 819,804 794,313 812,506 Water in storage January 1 (acre-feet) . . . . . . . . 1,717,407 1,631,411 1,839.399 1,498,629 Project storage only . . . . . . . . . . . . . . . . . . 1,455,375 1,345,252 1,548,741 1,201,943 Runoff (acre feet) . . . . . . . . .. .. ......... 1,100,100 " 2.829,613 2,402,641 441,582 Water in storage December 31 (acre feet) . . . . . 1,781,671 1,717,407 1,563,309 1,054,710 Project storage only . . . . . . . . . . . . . . . . . . . . 1,543,571 1,455,375 1,290,971 789,158 Sources of water for deliveries (acre feet) . . . . . 999,979 1,171,097 1,338,008 1,238,484 G ravity supply . . . . . . . . . . . . . . . . . . . . . . . 758,295 " 1,124,554 1,264,344 872,007 Groundwater supply (pumping by SRP). . . . . 221,165 43,248 65.596 361,002 Groundwater supply (pumping by others) . . . 20,519 3,295 8,068 5,475 Use of water (acre feet). . . . . . ......... . . 881,501 1,014,772 1,100,467 861,699 l
Agricultural . . . . . . .................. 353,916 454,516 535,046 441,088 Urban............................ .. 393.851 364,435 334,309 269,636 City domestic . . . . . . . . . . . . . . . . . . . . . . . 281,439 251.110 222.098 160,343 Subdivision irrigation . . . . . ....... . . 61,019 58,988 55,063 54,070 Other non. agricultural irrigation (schools, parks, churches, etc.) . ...... 51,394 54,338 57,148 55,223 Decreed deliveries . . . ..... .......... 51,704 52,298 64,505 56,541 Contract deliverles . . . . . . . . ........... 19,263 6,177 10,929 18.595 Seepage and evapotranspiration . .... . 156,313 156.325 237,541 376,785 Canals, total (miles) . . . . . . . . . . . . . . .. . 132 132 131 131 l Li n e d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 71 64 56 Laterals, total (miles) . . . ... .... ....... 890 887 880 875 Lined o r piped . . . . . . . . . . . . . . . . . . . .... 777 766 740 683 Drainage and waste ditches (miles) . . ..... 240 244 247 263 Lined or piped . . . . ...... .......... . 75 70 58 53 Assessed area (acres) . . . . . . . . ....... ... 238,171 238,172 238.221 238,264 Number of assessed accounts . ...... . ... 181,083 180,455 174,603 161,596 Number of times water delivered to water users 467,984 468,802 444,157 516,485
' Water statistics are cornputed on a calendar year basis. " Based on USGS provisional records and are subject to adjustrnent.
26
l l l l bWM 12 Months Ended April 30 12 Months Ended December 31 1985 1984 1979 1974 Energy Sources (kWh) Net steam generation * . . . . . . . . . . .... 11,859,199,000 10,655,441,000 8,335,201,000 4,473,608,000 Net combustion turbine generation . . . . . . . 52,209,000 19,399,000 65,867,000 252,506,000 Net evnbined cycle generation . . . . . . . . . . 657,328,000 190,299.000 165285,000 129.429,000 Net run of river generation . . . . . . . . . . . . 594,515,000 521.180,000 581,793,000 333,822,000 Pumped storage generation. . . . . . . . . . . . 200,451,000 206,036,000 79,674,000 176,128,000 T;tal net generation * . . . . . . . . . . . . . . . 13.363,702,000 11,592,355,000 9227,820,000 5,365,493.000 P u rc ha sed . . . . . . . . . . . . . . . . . . . . . . . . . 2,082.962216 2.262,454,908 ")078,926,504
, 3,257,052229 Intachange received . . . . . . . . . . . . . . . . 63,848,104 69,424,000 182.335,000 207,521,040 Wheeling received . . . . . . . . . . . . . . . . . . . 15,419,880 18,970,092 7,778,496 42,534,731 Total energy sources * . . . . . . . . . . . . . . . 15,525,932.200 13,943.204,000 11,496,860,000 8.872,601,000 Energy disposition (kWh)
Re:idential . . . . . . . . . . . . . . . . . . ...... 4,783,148,400 4,290,081.354 3,583,579,831 2.751,862,961 Commercial & Industrial . . . . . . . . . . . . 5,764,993,287 4,880 684,473 4,319,978,092 3,191,339,884 Irrigation pumping . . . . . . . . . . . . . . . . . . . 260223,618 260,180,664 195,422,631 308,554,192 Street G highway light!ng . . . . . . . . . . . . . 83,646,296 85,698,006 42,194,885 38,756,879 Public authorities. . . . . . . . . . . . . . ..... 241,468,602 232,660,889 291.489,443 239,776,522 Int:rdepartmental . . . . . . . . . . . . . . . . . . . 114,109.620 73,212,740 64,785,898 194.652239 Sales for resale . . . . . . . . . . . . . . . . . . .. 2.883,361,835 2,789,722,423 1.923,770250 903,560,899 T:tal sales . . . . . . . . . . ............. 14,130,951,658 12,612240,549 10,421,221,030 7,628,503,57C Int:rchange delivered . . . . . . . . . . . . . . . . 82,226,000 54,666,000 224,507,000 255,85?/* 3 Wheeling delivered . . . . . . . . . . . . . . . . . . 14,154,972 15,450,467 7,101,769 39,599,tu5 Energy losses . . . . . . . . . . . . . . . . . .... 1,012240,570 966,513,984 728,465,201 694,923,589 En:rgy for pumped storage op . . . ..... 286,359,000 294,333,000 115,565,000 253,722,000 Total disposition of energy . . . . . . . . . . . 15,525,932,200 13,943204,000 11,496,860,000 8,872,601,000 Peak overall power system (kWh) . . . . . . . . . . 2,967,000 2,605,000 2,437,000 2,408,000 Date and time (MST) . . . . . . . . . . . . . . . . . July 5. 6 pm. Sept. 2. 6 pm. Sept. 5, 6 pm. June 27,6 pm. Peak Project customer (kWh) . . . . . . . . . . . . . 2,487,000 2,260,000 1,911,000 1,645,000 Date and time (MST) . .............. Aug. 30, 5 pm. Aug. 31. 5 pm. June 27. 5 pm. June 27,6 pm. Generating capability (kW)** Stea m' . . . . . . . . . ................. 2.211250 2211,250 1,553,250 1,019,150 l Combustion turbines . . . . . . . ......... 393.000 393,000 393,000 362.800 Combined cycle . . . . . . . . . ......... 288,000 288,000 288,000 225,000 Hydroelectric conventional . ......... 96,400 96,400 95,000 94,300 Hydroelectric pumped storage. . . . . . . . . . 137,000 137,000 137.000 147200 Total operating capability * , . . . . . . . . . 3,125.650 3,125,650 2,466250 1,848,450 C ntract purchase at peak. . . . . . . . . . . . . 329.547 329,547 328,661 629,725 Total resourees* . . ................. 3,455,197 3,455,197 2,794,911 2,478,175 Electric customers-year end Resid e ntial . . . . . . . . . . . . . . . . . . . . . . . . . 382,090 353,115 287,293 221,808 Commercial & Industrial . . . . . . . . . .. 32,508 29,924 20,766 16,393 Other... ... ..................... 8,176 8,103 1,643 1230 Total...... .............. .. .. 422,774 391,142 309.702 239,431 Average annual kWh use Residential . . . . . . . . . . . , . . . . . . . . . . 12,963 12.535 13.038 12.808 Average annual kWh revenue Residenttal (cents /kWh) . . . . ..... .. 7.11 7.06 5.07 2.62
- Includes SRP participation in jointly owned projects
** Unit capabilities during surnmer peak 27
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l I Scit River Protect Board Members ifront row left to right' Bruce B Brooks Stanford f Hartman Joe Bob Neely Dwayne E 00bson and William W Arnett Back row left to right' John l Burton Jr Thomas P Hurley Gilbert R Rogers fred J Ash Clarence C Penaergast Jr John M Williams Jr l A isikin fitch and Rudolph Johnson tot pictured is William P Schtsder thud Memt>ers Distn(t 1 Dt*tnct 7 b ,r s s s - - s A , s- a Distn(t 2 Distnct 8 s " ' ' '
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Council Members Distdct I Dbtdct 4 The councils enact and amend byiaws Robert L. Cook Wiley R. Baker relating to the management and conduct of SRPs Howard W. LydK Levi H. Reed business affairs. Emil M. Rowy Ivy Wilson Jr. Three council members are elected by SRP District 2 Distdct 5 District 7 Distdct 9 shareholders to two-year terms in each of the 10 Timothy A. Conovaloff Roy W. Cheatham Wayne A Manetta W. Curtis Dana areas of the Salt River Valley Water Users' Wayne A. Hart Edmund Navarro Lester Mowry Olen Sharp Association. Three council members are elected to 1.arry D. Rowy Carl E. Weiler George B. Willmoth Lee Tregaskes staggered four year terms in each of the 10 dMsions of the Salt River Project Agncultural District 3 District 6 District 8 District 10 improwment and Power Distnct. James 14 Accomano James L Diller Martin Kempton Orland R. Hatch Traditionally, Association council members John E. Anderson Dean W. Lewis Thomas M. Owens Jr. L Max Pace seek identical positions on the Distnct Council. Elvin E. Fleming James R. Nrshall Mark V. Pace C. Dale Willis SRP Council Members (sosted, left to right) Howard W lydic, lorry Q SRP Council Members (sested, left to righti Olen Sharp, Orland R. dotch. Rever. Timothy A. Conovaloff and Thomas M. Owens Jr. (Standing, left to James M Accomazzo and C Osle WiHis. (Standing, left to right) George B. right) Wayne A. Hart, Roy W. Cheatham. Edmund Movstra Elvin E. Fleming Willmoth, l. Max Paes John E. Anderson and inster Mowry. and Ivy Wilson Jr.
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[ . , '~-. . DESIGN AND LAYOUT
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,s an Equal Opportunity Empionr SRP Council Manhers (sested Arft to right) Dean W lowis Carl E. Writer, Lee Trepsshes and Mark V Poca IStanding. left to right) James R.
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