ML20141A904
| ML20141A904 | |
| Person / Time | |
|---|---|
| Site: | Duane Arnold  |
| Issue date: | 12/31/1996 |
| From: | Drager E CORN BELT POWER COOPERATIVE |
| To: | |
| Shared Package | |
| ML20141A830 | List: |
| References | |
| NUDOCS 9705150044 | |
| Download: ML20141A904 (28) | |
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t:orn 13elt Ibtver Cooperalite, headquartered in llumboldt, lotra, is a generation and transmission electric cooperatise otvned by its incinber systerns. Corn llelt protides electric post er to 12 member distribution electric cooperatives and one municipal electric cooperative. (NI.\ll CA). Corn 13 cit serves farm members, rural residences, small totvns, and conunercial and industrial meinbers in 27 North Centrallatva counties.
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3 Calhoun County Eleciric electric utilities of; Cooperative Association 4 Franklin REC Alta Milford 5 Glidden REC 11ancroft New ilanipton G Grunih Coung REC Coon Rapidi Spencer 7 llancock Lounty REC Graettingei Sumner 8 lluinholdt County REC Grundy Center Webster City 9 lowa 1,akes Electric Cooperative 1.aurens West Bend 10 Midland Power Cooperathe 11 Sac County REC 12 Wright County REC
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l Corn Belt Ibwer Cooperative, headquartered in llumboldt, Iowa. is a generation and transmission electric cooperative owned by its memlier systems. Corn Belt provides electric power to 12 meml>cr distribution electric cooperatives and one municipal electric cooperative, (NIAfECA). Corn Belt serves farm members, rural residences, small towns, and commercial and industrial members in 27 Nortl, Centrallowa counties.
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.q 1 Iloone Valley Electric Cooperative North lowa Municipal Electric Cooperative 2 Butler County REC Association (NIMECA) includes municipal -
3 Calhoun County Electric electric utilities of:
Cooperative Association 4 Franklin REC Alta Milford 5 Glidden REC Bancroft New llampton G Grundy County REC Coon Rapids Spencer 7 Ilancock County REC Graettinger Sumner 8 Ilumboldt County REC Grundy Center Webster City D lowa I,akes Electric Cooperative 1,aurens West Bend 10 Midland Power Cooperative 11 Sac County REC 12 Wright County REC
N' N BUILb1NG A:
%7d N s rnAnEwong;
, As FOR THE' i
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N FUTURE
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hrough its many activities during 1996, r Corn Belt l'ower Cooperative worked to develop a " Framework for the Future,"
by building new transmission lines and _
'" substations to strengthen reliability, continuir.g to ~
promote economic development through housing 'x
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programs and other joint ventures with member xj cooperatives, and studying potential sharing alliances with neighboring utilities to allow Corn Belt to better serve its members into the 21st century. '
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Strengthening this framework for the future is new [j j'
! technology at Wisdom Station that will continue to O' '
keep the plant productive and viable as we pass the year 2000. New ly4ramed lines and substations will /
enable existing Industries to expand on co-op lines.
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Legislative, marketing and public relations '
activities carefully frame relationships with legisla-tors, members and the general public to ensure a positive business climate in tomorrow's competitive f marketplace.
I
'N As Corn Belt Power Cooperative prepares to
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- s. celebrate its 50th year of operation and as it positions itself for the next millennium,it not only ,
rests on the solid foundation of its past, but, more I[yg - importantly, builds on its " Framework for the
- /// b, Future."
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l continue to participate in economic development
'E~ efforts. We must increase sales by attracting new
@ LE=gss5EE:5 loads and helping existing loads expand.
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_; :- _=.===="==~ggEi a Sescral construction projects completed during M [ the year will reinforce Corn Belt's excellent *
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. .:m. i reliability record by offering additional transmis-sion paths for service. New construction of .
substations and transmission lines will also serse large new loads on our member distribution cooperatives' lines. Excellent system maintenance has always allowed Corn Belt to provide reliable service to its members and the practice of g ,~ keeping lines and substations well-maintained will continue well into the 21st century. Part of establishing tomorrow's framework for our conununities is the continued support of housing edkG '^ n'M- ecisions made by the t;orn initiatives deseloped by our member cooperatives.
Eunn;w o< c I'resulcut and B.e need adequate hotising to keep people in the 6cneral wnuer Belt Power Cooperative Board of coninlunity and to make room for UcW residents.
Directors strengthened the coopera-l're wlern f #T -
tise in 1996 by develoning a frame-uork for operating in tomorrow,s competitive Corn Belt participated in se\eral studies in 1996 to help guide its development for the future. A environment. power re(piirements study projected Corn Belt's growth in the future. An integrated resource plan Emphasis on increasing kilowatt-hour sales was .
(lRP) Was begun in 1996 to analvZe Corn Bell's rewarded with record-high sales to RECS during needs for meeting future load growth. This IRP 1996. The 1996 sales reflect \ery positisels on the -
uill be submitted to the Western Area Power hard work of the employees of Corn Belt, distribu-Administration as part of our commitment for tion co-ops and municipals to build futtire h\dropower.
existing load and attract commer-oa MEMBER REC COSTS 50 cial and mdustrialloads to our Yet another project focused not on the technical 45 system. A new system peak was side of operatior s but. just as importantl). on the
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e)"> of th" P""ple on y sersc. Resuits from ihis i i i > if I : i!! t r !11 iI tsn of 1992 a year w Hh a Un-j !!i/1li!lj!!t II j irnage surw) drow honu' the undisputed fact that buMing corn crop. REC memners are highly satisfied with their
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{>liljl'fi!!, I cooperatlws sersice, with owr 90 percent of (l-15 . :
In 1996 new industrial and g
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respondents agreeing that their expectations were
.jI i}ji fiji +jI j municipal loads came on line and r ! ' 1 I
fnel or e.xceeded b) their (hop.
g]!!! lIl!fl!t ! !i I;.{ some key existing loads announced 1976 1981 1986 1991 1996 major expansions. Corn Belt must hera,;e kli member wiew w~t m, tare udmutwn t bJrf 4 dlVU!J!rd dwrMr US rdif re(]rt is jd er w(d lo mmce. , nes to o n Corn Bell l'on er .1990 Annu.11 Report 2 l
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Service satisfaction alone will not be enough to The Corn Belt board began the process in 1996 of keep members on co-op lines in the competitive analyzing potential sharing alliances with other future, however, and the Corn Belt board knows neighboring utilities with a decision anticipated in that competitive rates are and will continue to be early 1997. An alliance would allow us to take
- necessary to succeed. At the end of 1996, the advantage of diversity since we peak at a different board approved a marketing rebate on the time of year than most. With an increasing peak December power bills. Directors also approved a load due to new industry, it would be beneficial to 1997 rate decrease of approximately 2.3 percent. have an extension on the time before we need to have a new power source. An alliance may not in 1996, the Corn Belt board reviewed the status result in substantial dollars saved, but could put of the cooperative's generation sources to estab-us in a better market position by offering a larger f99610 514,403kWh lish a framework for tomorrow's power supply power pool and the opportunity to keep rates 1995
- 987,186,268 kWh decisions. A new combustion control system competitive. When we look at our recent record installed at Wisdom Station will keep the plant a "
peak and record sales totals and consider the well-maintained. viable generation source. The 99 80 k amount of power we have available, we have to 1995:151,412 kW plant is not as low-cost to operate as other consider alliances to keep our operating condition sources, but is a reliable power supply when strong.
needed, and it is important to keep the plant in fCWe 0% 6hs):
1996 219,790kW top condition. The main objective of the Corn Belt Power 1995:180,414 kW Cooperathe Board of Directors is to provide The Duane Arnold Energy Center (DAEC) nuclear reliability at a competitive price. We must con-plant continues to present a challenge for the un 0 tinue to work together to serve our members in a Employees:86 future. Ilowever, in 1996. DAEC had an excellent well-managed manner so they are able to grow operating year. If this type of operation continues and remain competitive.
into the future, it will go a long way toward easing our concerns regarding the costs of this facility. The future of Corn Belt depends on the ability of our distribution cooperatives and municipals to The Corn Belt board qade decisions during 1996 remain competitive. The Board of Directors, that inactivated so.ne maintenance operations at management and staff are dedicated to making Ilumboldt Station, iteating of the plant was sure the future of our members is bright as we terminated, security functions were reduced and deal wlth some Corn Belt employees were reassigned t change in our CORN BELT 5YSTEM KILOWAIT HOUR SALES Wisdom Station.
Industry a no ,
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, Neal 4 and Council Bluffs 3 had excellent operat- ion ing records during 1996 and Corn Belt continued 95 to depend on these cost-efficient sources of power. !
in December, the board voted to purchase the to
- is remaining shares of the Allied Power Cooperative 70 farmland reserved for a future generating site in . . .
Western Iowa. * ****'*****""
=== 1996 - 1995 - 1994 Building A Framework For The Future
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i l review of 1996 includes activities , , n ,1,g y n .m / ; g l
l and events at Corn Belt Power -
Cooperative that developed a frame. Corn Belt Power sold a record number of kilowatt-work for future success in the hours of electricity in 1996 due most notably to ,
competitive marketplace of tomorrow. the addition of new commercial, industrial and i municipal loads. A large corn crop and colder in; ~~n wie;s . :
g, g g sales. The 1996 REC energy sales were 8.5 Corn Belt,s solid system maintenance program percent higher than the previous record set in paid off in 1996. Generation and transmission 1995. Like the RECS. Webster City and other systems operated by Corn Belt stood up to the NIMECA members also saw sales increases in worst that wm. ter could inflict in late January and 1996 of 1.2 percent and 3 percent, respectively.
! carly February, including high w.inds, heavy snowfall and bitterly cold temperatures, testifying A new system peak was reached in October, to the rewards of keeping power plants, transmis-totaling 220 megawatts, surpassing the previous
- sion lines and substations well-maintained.
peak of 215 megawatts set in October of 1992.
The cooperative's strong transmission system 1996 sales and the system peak were also boosted experienced another year of delivering a reliable by 12 months of operation of the Enron/ Northern power supply to its Natural Gas pumping station on Midland Power member cooperatives, Cooperative lines. Also, the tow n of 4m with year-end statis-Fredericksburg, a four-megawatt load served t y tics showing Corn Belt Butler County REC. came on line in December and i.- was on line to its used 2.5 miillon kilowatt-hours of electricity in members 99.99"6 of that month alone. The Murphy Family Farms feed the time during 1996.
mill on llumboldt County REC lines increased its power use during the year to more than 450,000 The deteriorating kilowatt-hours per month.
condition of the leased Emmetsburg Service increased sales contributed to increased margins Center prompted the for Corn Belt in 1996, resulting in the board of usom swma starr. ormes seterai nmes dunne nar roc urerator board to begin looking directors approving a marketing rebate of trammg at the possibility of $800,000 on the member cooperatives' December constructing a new power bills.
facility on Iowa Lakes Electric Cooperative lines south of town. The new building would provide better warehousing for transmission equipment and would allow room for maintenance work and future expansion.
Corn Belt 1%wer . I996 Annual Report \
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1996 may very well be remembered as the year of Due to growth and anticipated margins in 1997, new construction of Corn Bell Power lines and the Corn fMt board approved a rate decrease for substations, added to strengthen reliability of 1997 of approximately 2.3 percent. Sales to REC service to member cooperatives both today and in members in 1997 are predicted to be greater than the years ahead. Corn Belt crews completed the 6 percent above 1996 following construction projects: levels. Once again, the bulk of the E nine miles of 69 kV line built from \larathon to increase will be the !
I,aurens; this was phase two of a three-phase '
result of new large project to increase the reliability of power i
loads on member supplied to seseral small tow ns in t he area; it ,
g is a joint effort with IES l'tilities to strengthen c -op lines. -
both Corn Belt and IES transmission systems; Mi E one mile of 69 kV line plus a substation at -
\leadowbrook. located northwest of Sumner; this project was compicted at the request of Buller County REC to increase reliability and accommodate load growth in the area: e 5 two and one half miles of 69 k\ line built from ~
Corn Belt's Roland Substation to IES l:lilities' l'ernald Switching Station Io improve reliabil-ity and strengthen Corn Belt's ssstem in the
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area; fne different construction W ;f potec ts reqwred neu knes ' ' ' '
Jur!ng 1% another etunple * '
vihon the cwperaineis E one-half mile of 69 kV hne and two 69 kV budd;ng a Tramenoruir une t .
sllbstations built in the Estherville Industrial Park to increase the reliabilit) and ,
accommodate load grow th in Iowa I.akes
' lit 'lli'lil(lOll Electric Cooperatise's 3"rvice arca:
A new combustion control system was installed at E Ino miles of 69 LV line and a 69 kV sutntation Wisdom Station, Corn Belt's wholly-owned coal-built at Hobarton, west of Algona. to fired generating plant in Spencer, which will accommodate load growth in llumboldt County result in improved plant efficiency. Increased REC's sersice area and to improse reliability plant availability and lower generating costs.
in Corn Bell's s3 stem in the future. Installed during a sivweek outage in September and October, the new system includes chart recorders, transmitters, control positioners and HuiMina A Framework For The Future
1 micro-processor-based digital loop controllers. The availabilities, high capacity factors and low plant new controls are more versatile, accurate and maintenance and operating costs.
responsive compared to the original pneumatic The Corn Belt Power board made several deci-controls and will decrease the instrument air .
consumption at the sions in 1996 regarding the future of Ilumboldt plant. Station. The board voted in May to:
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E discontinue all maintenance activities at the Duane Arnold Energy plant except what is essential to provide Centtr Palo, the security; nuclear plant jointly-DM1:
owned by Corn Belt E discont' rue heating the plant; Power and two other discontinue any plant improvements including Ni *
- f utilities, experienced a new heating system:
q the fourth-longest continuous run for E install a perimeter fence and electronic ad u .m nuclear power plants security system:
The neu combustion rentrolsy stem at \Usdrun Stahan u eliresul* In Impiuthlplant etliclency incredwd plant asarlahihty andioser WOYlbW5 0 bY OU0E0t*
ceneraung rosa. E actively pursue proposals from parties who ing continuously for may be interested in salvaging the plant; ,
more than a year and generating billions of kilowatt-hours of electricity for lowans. In 1996 5 remove all PCB transformers from the plant alone, the plant generated 3.038.544 megawatt- site.
hours of electricity. Employees accumulated four million working hours without a lost time accident in another matter related to the future of generat-and the plant received its highest <ver ratings ing facilities, the Corn Belt board authorized the from the Nuclear Regulatory Commission. The purchase of the undivided interest of Central lowa plant inillated its regularly-scheduled refueling Energy Cooperative (CIECO) and Northwest lowa outage in October. During the outage, which was Power Cooperative (NIPCO)in Allied Power accomplished in a record time of only 36 days, Cooperative.The board approved purchase of the plant employees made maintenance and opera. remaining shares of the Western Iowa farmiand lions inspections and repairs and replaced about held for a future generating site because it is one a third of the plan!'s uranlum fuel bundles.The of the best locations for building a new riant in spent fuel bundles were moved into the fuel pool the future.
in the plant.
Neal 4 and Council Bluffs 3 continued to be
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among toe least expensise and most ef ficient coal-fired plants in the country. Low generation costs ,
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were the result of low fuci costs, high plant Duane \rnold Ervr;'y Center. the nuctrar
[vu er pl<mt pornil)-un ned by Corn fiell ' ' 1 *f
- f%u er and tu o other unkties.
eywrter,ced the f>with longest Cort) 13elt l'o'wr , I906 Alittilal la'inart ti conunuous run tor nuclear t>ou erpiants w orldulde.
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Three Corn Belt systems were awarded Rural l En goinn liet clopment.
1 Development grants to create revolving loan Board action during the year continued to funds for community and economic development l
- j. emphasize the importance of economic develop. projects in the region:
l ment both for today's bottom line and for i 5 Franklin REC received a $400.000 grant to 1 tomorrow,s competitive strength. In 1996, the
- fund a teleconnaunicalions distance learning .
Corn Belt board approved a wholesale power '
j project for a small rural school distric' :nd the , b ;c j agreement between Corn Belt and Butler County construction of a water system to serve exist- m Y <
REC for service to Fredericksburg Municipal Utilities. In other action during the year, directors inn business and industry nnd a new expan-sion to the llampton Industrial Park:
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1 approved several economic development inilla.
i E Calhoun County Electric Cooperatisc Associa-i tives that will increase load on RE,C lines thereby
! tion was awarded a $225.000 grant to fund furthering rate stabilization and beinging new jobs
{ lowa Communications Nehmk access and to rural areas. distance learning at three small schools in the i REC's area; and Corn Belt and member system partnerships corn seu mmerv stronc
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5 assisted in the: E Ihunboldt County REC was approved for a j """l"l"y]ll"l$'j',"jdl'
l,"' l l S200,000 grant to help build a speculative smer wi> to ns member l couteratnes, a uh year-end v E development of an industrial site in industrial building in the liumboldt Industrial stansucnhou ma corn sen nas on i .
hne to its members 99 99% of the
- F,redericksburg: Park. ,,me surme ivw.
i i B construction of a speculatise industrial As a service to member co-ops' commercial and building and development of an industrial park industrialloads, Corn Beh, through the Iowa Area in llampton; Development Group, began offering Questline, an 1 E expansion of facilities at Farmland Industries information service that provides technical j near Vincent; expertise to member cooperatives and to busi-I nesses and industries on their lines.
j E expansion of Maurer Manufacturing near Spencer;and Several large commercial and industrial loads l
l announced major expansion plans during the E expansion of lip.Capaca.v I,ngineering and g I' mn g n preparing for Farmland Manufacturing near Hulbboldt.
j Industries' plan to increase its power use four-fold l ; . at its anhydrous ammonia plant near Vincent that
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T is sened by Wright County REC. A new Corn Belt 3 S substation and four miles of new line are under
( jfkk construction with plans to energize the new l
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@ Q substation by June of 1997. The Enron/ Northern Natural Gas pumping station, located on Midland l
j } [h' b Corn seit fru er Cooleratn e creu s bmit four Fuhs!Jttuns durmg I9% to increase rehaN!n> and accommodate load erva th i Building A Frismets ork For Tlie Future M ~ ~a in memtwr splems'senIce territenes t _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ .
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Power Cooperative lines, also plans to expand its percent of the members surveyed from participat- j operations and increase its load approximately 30 ing comps said their expectations were met or ,
percent. ex9eded when they received service from their )
REC within the past two years. Dr. Dennis llein.
9 s tem .slinlio director of NRECA Market Research, the firm that conducted the image survey in April. commented.
Corn Belt Power Cooperative continues to develop "This is as strong a satisfaction and senice the framework for sening the future power needs number at the G&T level that I have seen. They of homes. farms and businesses in north central amaylg 'l ire )'omice. I M n's oub lowa. A power requirements study was completed standing.' "
in 1996 and an integrated resource plan is underway to assure a continued reliable power An integrated resource plan was begun near the i supply to Corn Belt member cooperatives well end of 1996 with preliminary results anticipated into the future. In March of 1997. Required by the Western Area Power Administration. the IRP will determine the The power requirements study was required as best method of supplying energy and capacity step in the application process for a new loan needs for customers. Included will be consider-from the Rural Utilities Service. Corn Belt applied ation of traditional resource options. demand side for the loan to help cover the anticipated cost of management programs, renewables and means for system additions and improvements to transmis-dealing with environmental externalities.
slon facilities, taking yet another step in establish-ing the framework for tomorrow's system needs. An end use survey was developed late in the year.
Based on the study's analysis. Corn Belt's total with results expecteri in early 1997. The study will system energy requirements and peak demand supply information about use of water heaters are projected to grow at average annual com- and heating and cooling systems and willidentify pound rates of 1.7 and 0.7 percent, respectively. future sales opportunities.
from 1994 through 2009. These projections of slow steady growth are driven by agricultural activities including grain, livestock and poultry operations.
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S For many of Corn Belt's members, large industries *
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have begun to make a growing impact on system ~~i e l .-
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An image study conducted by Corn Belt for its -- s
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member cooperatives looked at satisfaction levels I n Jg of the people served by the RECS. Ninety-six $ dn%.
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Corn Belt Ibn er sold a record number of kiknatt-hours of electricity la I9% due most notath to the addition and ewaashm of commercialandindustnalloads The twtvratise is preparm; for expanswa of two large kmds. Farmland Industries.
\lacent a member of unght County kE:C. and the Enrunnorthern Astural Gas Corn Belt Power.1996 AnnualReport n pumping stawn. pictured arme. located on urdians Ivser cooperaine nnes.
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g,g .gy The boardapproved
, phase two of the Marketing programs at Corn Belt continued to Sales Staff Assistance
, promote electric heating and cooling and electric Pmgram in 1990, water heating to boost sales. During 1990, the extending the first Power Olympics programs helped in the sale of phaseof theprogram 918 water heaters,2.830 kWof new resistance toinclude key heat and 489 tons of new heat pumps by Corn ccountsactivityand Bell member systems. Power Olympics is a Corn development of new Belt Pov.cr Cooperative systemwide program that services. The purpose encourages goal setting and increased REC of the program is to emplo)ce involvement in marketing and CuSlomer assist systl'msin "**mk ** k'm""r ""em '""o '"r * '"d '"**Nw &
Belt denloMt Ee hicinest Itmp Home procram m lW6 Ttse program service. Glidden REC eame out on top in Power ;' allocatingadditionalD a lAy"eny$gump g, '
iw umio cacaywmum n Olympics 1996 and was awarded both the top ,.
employee staff time to _ + 779.;f '
points honor for accumulating 14.000 points andj j electric salesand f) !
the top percent over 1995 recognition, for p economic des elopment. Corn Bell reimburses g 48 - w achieving 148 percent ofits 1995 total. Close h participatingmembersystemsonastaff-hour behind Glidden were Butler County REC with j j basis for eligible activities completed py member .
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14.355 points. Sac County REC with 13.812 pointy system employees. .
and Iowa Lakes Electric Cooperative with 13.337! + i!
so ig points. Combm.ed,all 11 participatmg co-ops Corn Belt sponsored the 1990 " Momentum is !. -
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. Building" conference along with other members of accumulated 110.372 points. an eight percent L 0 EIEEE
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!4 increase over 1995 totals. thc mr lowa Marketing G rou p, bringing information , W..
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. , about tu,e latestenergy efficient technology to 1 , e n o ww.
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Establishingtheirameworkforenergyefficient ,! [contractors t Imm across the state. r c.
, ;j housing for teay and tomorrow. Corn Belt initiated the Modellleat Pump ilome program in L h -
' jl996 POWER OLYMPKS Total Points -
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1996. With a goal of promoting electric healing and cooling technology using testimonials and 16'000 - - - - - - - - - - - - - -
first-hand experience, the program allows one H,000 - - - - - - -
12,000 - - - - - - ~-
model heat pump home to be built in each distribution co-op territory during a three-year 10,000 - - - - - - - - - - - - - - - - -
time period. The home must be all-electric, have a % 000 - - - - ~ - ~ - - ---
ground source heat pump and receive a high 6,000 - - - - - - - - - - - -
energy efficiency rating. An open house and 4,000 - - - - -r - - - - -
availability for home tours are included in the program. Three homes w ere completed and a 2,000 0
h7 ,---p fourth was started during the year.
H Huilding A Framework For The Future 1
l
L tiotponste kt I,ilions During the year, the board approved new wearing
,,,, s n A-, L,p ..., apparel for employees subject to exposure to -
F f Corn Belt's Government Relations Committee electric arcs. Flame resistant coveralls were lg ,
participated in several legislative activities with assigned to employees affected by the Occupa- ,
l . .
f both state and federal legislators. Committee tional Safety and llealth Administration regula-j members represented the c&op at REC Day on tion.
g.74 ,
. 7ij the Hill at the State Capitol, at NRECA's Legisla-Effective Jan.1,1996, all assets and accumulated 0 ] tive Rally in Washington in May and at individual Legislative Nights at locations throughout North plan benefits of Corn Belt Power's defined benefit 7 ,
Central lowa after the elections in November. pension plan were transferred to the National Rural Electric Cooperative Association Retirement A newly-developed home page on the World Wide and Security Program.
Web now communicates information about Corn Belt to audiences around the world. The site, Nh"7HN Ulh'"'
which can be accessed at the address During 1996, the Corn Belt board began a process www.cbpower.com, is packed with Information of reviewing options for future sharing opportuni-about Corn Belt Power, its members, its economic t.ies, including the option of developing a sharing development programs and energy efficiency. The alliance with other utilities. The board began Corn Belt Power Cooperative home page is an analyzing benefits to the coop, including financial active channel for providing information to REC savings, increased resources and strategic member systems and municipal utilities, legisla-positioning. A consultant was hired to ass!st Corn tors, potential new businesses and the general Belt with its strategic planning regarding future public, sharing alliances.
llHilhlfi Nt'.%IHil't:t \
Severallong-time employees retired from their positions at Corn Belt in 1996. From Wisdom Station, retirees were: Philip Rath, chief engmeer; Ralph Larsen, shift operator, Richard Wittrock, shift operator: and Ronald Potter, machinist /
welder. From the llampton Senice Center, William G!eisner, electrical maintenance foreman, retired. Each of these employees worked in excess of 30 years for Corn Belt, with Gleisner recording the longest employee tenure ever with 46 years of service. Robert Cadwallader was hired as plant manager at Wisdom Station.
199t1 mas an important year for nem constructkm of Corn Belt knes and substatwns. built to strengthen rehabihty of setsIce to memter cooperatises both talsy and in the years ahead Corn Belt Pon er. I996 AnnualReport 10
p..--.__. _ - - - -- .- - . - - . - . - - - - - _ _ _ - -
?
TOTALCORN BELTkWhSALES 1996 GENERATION
SUMMARY
Monthly Percent Change /1996 compared to 1995 reprcsents input from major resources and 100% ownership shares 30%
WISdGm 2ss '
l.9% DAK I 20% (21,565 an) 34.1 %
(39tuamni 15%
10%
. l l
, ss l
j' w -
l . ins
, CB 3 __
i , 10.8% wApA 45% $ 3 g 3 j 3 , y y g 3 j [ (124,240 mn) i indudes REG, Webster Gy, NIMEG & Sales to Others (139,078 mn) l 1
kW 60-Miiiute SySteiti Peak
, 220,000 , .
s 2.5 200,000 -
4 l 2y - - - - '
180,m
,l ,
- 1.54 H -E - -
160,000 - .['.
6 l ..
l 1; y -- 140,000 ..
g t
4 li-0.5 120,000 0
100,m ( ,, ,, , g ,, ,,, ,,, s,, ,, ,, ,,'
i E .- 1996 - 1995 === 1994 0.5 i 1 -~ - - - -
Corn leh System Puk = REG + Websta Gy x 1.06 of time of GPC/WC 60 minute System Peak
< . 4
'% V- J l .
1992 1993 1994 1995 1996 1996 kWh Billed by .a EQUITYA0TALASSETS (a'" 8'h *"
Percentage Beene v. 6,607,002 54.8 . 116 i
Beslw 111,075,462 1,770 4,605 Cahee. '
16 30,244,970 769 1,262
! j4 Freaksi. 40,324,970 815.6 1,518 39,164,530 150 1,281 12 -
49,046,793 ,915- 1,808 10 47,130,500 921 l 1,532 8 45,628,093 934 1,533 3
g .
232,080,487 - 4,604 8,930 107,475,926 2,792 6,440 l
f 21,589,933 483 793 2
3 101,891,883 1,082.4 2,010 0
! 1992 1993 1994 1995 1996 4
{
f II Building A Framework For The Future
BALANCE SHEETS December 31,1996 and 1995 ASSETS 1996 1995 -
ELECTRIC PLANT (Notes 2 and 6):
In service . . . . $ 206,509,008 $203,330,265 Less-accumulated depreciation . 116,349,862 109,217,282 90,159,146 94,112,983 Construction work in progress . . 906,588 1,941,721 Nuclear fuel, net of amortization (Note 2) .. 4,803,751 5.052.991 95.869.485 101.107.695 OTHER PROPERTY AND INVESTMENTS:
Nonutility property. . 343,766 380,070 Investment in the National Rural Utilities Cooperative Finance Corporation (Note 2) .. . 2,515,343 2,515,525 Land held for future use (Note 8) . . 2,963,060 1,585,350 Decommissioning fund (Note 2) . 11,457,176 9,716,390 Other investments and receivables (Notes 2 and 10) . . . 6,263,203 6.558.196 23,542,548 20.755.531 CURRENT ASSETS:
Cash and cash equivalents (Note 2). 6,400,701 7,477,797 Short term investments (Note 2) . 0 1,519,253 Member accounts receivable . 3,688,298 3,859,867 Other receivables . 368,465 195,680 Inventories -
Fuel, primarily coal, at last in, first-out cost . 1,253,028 1,108,683 Materials and supplies, at average cost . 2,654,819 2,513,751 Prepayments . . . . . 1,027,077 1.032.366 15,392,388 17.707,397 DEFERRED CHARGES:
Deferred Department of Energy decommissioning costs (Note 12) . 1,516,849 1,651,816 Deferred spent nuclear fuel disposal costs (Note 9) . . 240,264 400,440 Deferred refueling costs (Note 2). 1,372,185 1,217,289 Unamortized refinancing cost (Note 4) , 80,616 257,127 Other . . . .
209,755 1,378,565 3,419,669 4,905,237
$138,224,090 $ 144,475,860 The accompanying notes to the financial statements are an integral part of these statements.
Corn Belt Power.1990 AnnualReport 1'
BALANCE SHEETS December 31,1996 and 1995 MEMBERSHIP CAPITAL AND LIABILITIES
- 1996 1995 MEMllERSHIP CAPITAL:
Memberships, at $100 per membership . . $ 1,400 $1,400 Deferred patronage dividends, per accompanying statements (payment restricted as indicated in Note 3) . 7,857,518 7,347,255 Other equities, per accompanying statements . 14,629,256 13,052,120 Unrealized gain in market value ofinvestments (Note 2) .. . ... 642,900 445.627 23,131,074 20,846,402 LONG-TEIG1 DEBT (Note 4):
Rural Utilities Service . . 36,995,046 39,073,088 Federal Financing Ilank. . . 65,135,398 67,655,363 Capital lease obligations (Note 2) . 3,554,333 4,383,957 Pollution control revenue bonds . . 2,320,000 2.470,000 108,004,777 113,582,408 Less - Current maturities oflong-term debt . 5,297,862 5,092,058 l 102,706,915 108,490,350 OTHER LONG-TEIG1 LIAllILITIES:
Deferred Department of Energy decommissioning costs (Note 12) . 1,296,054 1,436,710 Deferred compensation . . 105,269 148,763 Other . .. .
191,100 _ _ _1 3_31,143
.1,5922 4_23 2.9.6.616 CURRENT LIABILITIES:
Current maturities oflong-term debt . . . . . 5,297,862 5,092,058 Accounts payable . . . . 2,742,895 3,022,528 Accrued property and other taxes. . 2,212,279 2,274,244 Accrued interest and other . .. .
540,642 1,833,662 10,793,678 12,222,492
~
$ 138,224,090 $144,475,860 l
l The accompanying notes to the financial statements are an integral part of these statements.
1
\; Building A Framework For The Future
. _ _ _ - - - -. - - . - _ - .. ~. .
STATEMENTS OF REVENUES AND EXPENSES For the Years Ended December 31,1996 and 1995 1996 1995 ,
j OPERATING REVENUES: l Sales of electric energy . . . . . $ 42,445,125 5 41,020,635 Other . .. . . . . . . . . . . . . . . . . .. . . . 31 077,584 2,930,329
- 45,522,709 43,950,964 OPERATING EXPENSES:
Operation -
Steam and other power generation . .. 14,852,868 15,228,763 Purchased power. net. .. . .. . . . 2,260,981 1,117,882 ;
Transmission. ... . .. .. .. 1,578,411 1,617,468 '
Sales . . . . . . . . . . . . 722,743 723,149 Administrative and general . . . . . 3,496,488 3,386,082 Maintenance -
Steam and other power generation . .. 3,595,540 3,565,812 Transmission. . . . . . . . . .. 624,176 602,119 General plant .. .. . . . . . .. . 19,786 36,773 Depreciation and decommissioning (Note 2) . .. 6,968,131 6,607,977 Property and other taxes ... . .. .. . . 2,281,030 2,412,392 36,400,154 35,298,417 Net Operating Revenues. . . . . . . . . . 9,122,555 8,652,547 INTEREST AND OTHER DEDUCTIONS:
Interest on long-term debt... . . . 7,189,255 7,475,567 Other interest (Note 2). . . . . 809,818 614,302 Interest during construction (Note 2) . . . .. (134,452) (131,616)
Provision for impairment ofland (Note 8) . .. 103,820 2,271,159 Other deductions. .. . .. . . . . . 3,536 1,115 Amortization of reacquired debt (Note 4)... . . . . 176,511 312,491 Amortization ofloan expense . . . . . . . 20,752 21.535 8.169.240 10.564.553 NET OPERATING MARGIN (DEFICIT) . . . . . 953.315 (1.912.006)
NON OPERATING MARGIN:
Interest and dividend income . . . . . . . 960,629 1,165,070 Other, net . . . . . . . ... 604,592 232,568 .
1,565,221 1,397,638 NET MARGIN (DEFICIT) ..... . .. . .. $ 2,518,536 $ (514,368)
The accompanying notes to the financial statements are an integral part of these statements.
Corn llelt Power.1996 AnnualReport fI
STATEMENTS OF CASH FLOWS For the Years Ended December 31,1996 and 1995 (Note 2) 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES:
Net margin (deficit) . . . . . . . . $ 2,518,536 $ (514,368)
Adjustments to rewncile net margin (deficit) to cash provided by operations:
Depreciation and amortization. . . . 6,165,553 6,113,678 Amortization ofnuclear fuel . .. . . 2,273,375 2,167,471 Amortization of deferred refueling costs.. 1,416,108 1,362,141 Amortization of spent nuclear fuel disposal costs .. . . . . . . . . . . . 160,176 160,176 Amortization of refinancing cost . . . 176,511 312,491
, Amortization of Department of Energy decommissioning costs. . . . . I15,391 112,020 Provision for impairment ofland held for fiiture use . . . . .. . 103,820 2,271,159 Changes in current assets and liabilities:
Accounts receivable.. . . . (1,216) (346,720)
Inventories . . .. . . (285,413) (513,694)
Prepayments . . . . . 5,289 (218,676)
Accounts payable . , . .. . . (279,633) 416,218 Accrued property and other taxes . . (61,965) (80,273)
Accrued interest and other liabilities . . (1,295,965) (71,692)
Payment to Department of Energy for decommissioning. . . (236,531) (l14,513)
Other . .. .. . . . . . (14,727) (93,732)
Net cash provided by operating activities . 10,759,309 10.961.686 CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment oflong-term debt . . . . . (5,577,631) (4,689,404)
Deferred patronage dividends paid . . (489,737) (470,000)
Cash provided from CTS fund (Note 10). ... . 86,128 2.040.661 Net cash used in financing activities . .
(5.981.240) (3,118.743)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to electric plant, net . . . . (1,313,731) (1,905,955)
Additions to nuclear fuel . (2,024,135) (384,481)
Change in deferred refueling costs . . (1,571,004) (2,267,648)
Sale ofnon utility plant. . . . . . . 36,304 42,061 Purchase ofland held for fiiture use . . . (1,481,530) 0 Additions to decommissioning fund . (1,543,513) (1,411,719)
Change in other investments . . 2,042,444 (1,368,342)
Net cash used in investing activities. . (5,855,165) (7,296,084)
Net increase (decrease) in cash and cash equivalents. . (1,077,096) 546,859 CASH AND CASH EQUIVALENTS AT:
Beginning of year.. . ... .. 7,477,797 6.930.938 End of year . . . .. $ 6,400,701 S 7,477,797 The accompanying notes to the financial statements are an integral part of these statements.
1- Building A Framework For The Future
STATEMENTS OF DEFERRED PATRONAGE DIVIDENDS AND OTHER EQUITIES For the Years Ended December 31,1996 and 1995 1996 1995 .
DEFERRED PATRONAGE DIVIDENDS:
Balance assigned beginning of year... . $ 7,347,255 $ 7,067,255 -
Net margin (deficit) . ... . . 2,518,536 (514,368) -
Revenue deferred patronage dividends . . . . 58,600 32,400 9,924,391 6,585,287 Patronage dividends paid . .. . (489,737) (470,000)
Appropriation of margin -
Reserve for contingent losses . . (1,327,136) 1,481,968 Statutory surplus . . . (250,000) (250,000)
Balance assigned end of year . $ 7,857,518 5 7,347,255 OTHER EQUITIES:
(Appropriated Margins)
Reserve for Statutory Contingent Surplus Losses _ Total Balance December 31,1994. $ 3,099,484 $ 11,184,604 $ 14,284,088 Appropriation of margin . 250,000 (1,481,968) (1,231,968)
Balance December 31,1995. 3,349,484 9,702,636 13,052,120 Appropriation of margin . 250,000 1,327,136 1,577,136 Balance December 31,1996. $ 3,599,484 $ 11,029,772 $ 14,629,256 The accompanymg notes to the financial statements are an integral part of these statements.
v.
Corn Belt Power.1996 Annual Report in
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 NOTE (1) ORGANIZATION:
, Corn Belt Power Cooperative (the Cooperative) is a Rural Utilities Service (RUS) financed
. generation and transmission cooperative created and owned by 12 distribution cooperatives and one municipal cooperative association. Electricity supplied by the Cooperative serves farms, small towns and commercial and industrial businesses across 27 counties in north central Iowa.
The Cooperative's Board of Directors is comprised of one representative from each member cooperative and is responsible for, among other things, establishing rates charged to the member cooperatives.
NOTE (2) SIGNIFICANT ACCOUNTING POLICIES:
The Cooperative maintains its accounting records in accordance with the Uniform System ofAccounts as prescribed by the RUS. The preparation of financial statements in confor-mity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial v.atements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant accounting policies are:
A. Electric Plant -
Electric plant is stated at original cost which includes payroll and related benefits, sales and use taxes, property taxes and interest during the period ofconstruction.
Costs in connection with repairs of properties and replacement ofitems less than a unit ofproperty are charged to maintenance expense. Additions to and replacements of units of property are charged to electric plant accounts.
B. Depreciation and Decommissioning -
Depreciation is provided using straight-line methods and RUS-prescribed lives.
These provisions, excluding nuclear facilitics, were equivalent to a composite depreciation rate on gross pbat of 2.72% and 2.76% for 1996 and 1995, respectively.
Under a joint-ownership agreement, the Cooperative has a 10% undivided interest in the Duane Arnold Energy C enter (DAEC), a nuclear-fueled generating station, which was placed in service in 1974. The Cooperative is depreciating its interest in the DAEC and each year's property additions subsequent to 1984 on a straight-line basis over the remaining term of
, the initial Nuclear Regulatory Commission license for DAEC (2014). The composite depreciation rate on gross plant for DAEC was 3.34% and 3.30% for 1996 and 1995, respectively.
A Nuclear Regulatory Commission estimate of the decommissioning costs of DAEC was updated in 1996. This report estimated the Cooperative's share of the decommissioning costs ofI)AEC to be approximately $39,950,000 (in 1996 dollars). The Cooperative is providing for overall nuclear decommissioning costs using a ftmding method which assumes a 5% rate of inflation and 3% real rate of return. The method is designed to accumulate a decommissioning reserve sufficient to cover the Cooperative's share of decommissioning costs by the year 2014.
Decommissioning costs are included in depreciation and decommissioning expense,in the Statements of Revenue and Expenses. Such costs were $1,051,066 and $785,851, for 1996 and 1995, respectively.
\i Building A Framework For The Future
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 The total decommissioning funds accumulated at December 31,1996, were
$11,457,176, of which 56,849,490 has been placed in a fund legally restricted for use in decommissioning DAEC. The remaining $4,607,686, while not legally restricted, has ,
been designated by the Cooperative for use in decommissioning DAEC. The interest ,
component shown as other interest was 5809,818 and $614,302 for 1996 and 1995, respectively.
C. Nuclear Fuel -
The cost of nuclear fuelis amortized to steam and other power generation expenses based on the quantity of heat produced tbr the generation of electric energy. Such amortization was
- $2,273,375 and $2,167,471 tbr 1996 and 1995, respectively.
D. Deferred Refueling Costs -
The Cooperative defers extraordinary operation and maintenance expenses incurred during refueling outages of DAEC. These costs are being amortized to expense based on the expected generation of the next fuel cycle which corresponds with the period the Cooperative is recovering these costs in its rates. Such amortization was $1,416,108 and $1,362,141 tbr 1996 and 1995, respectively.
E. Interest During Construction -
Interest during construction represents the cost of funds used for construction and nuclear fuel refinement. The average rate was 5.7% and 6.7% for 1996 and 1995, respectively, and is based on the Cooperative's levels and costs of financing.
F. Capital Lease -
The Cooperative has a long term lease agreement with the City ofWebster City (Webster City) under which Webster City has agreed to provide certain generation and transmission facilities to the Cooperative. In return, the Cooperative will pay a minimum charge which approximates the debt service on these facilities. The Cooperative has capitalized this lease and reflected it in electric plant and has reflected the related obligation as a capitallease obligation.
G. Income Taxes -
The Cooperative is exempt from federal and state income taxes under section 501(c)(12) of the Internal Revenue Code.
H. Statements of Cash Flows -
For the purpose of reporting cash flows, the Cooperative considers temporary cash invest-ments purchased with a maturity of three months or less to be cash equivalents. Cash paid for interest, net ofinterest capitalized, was $8,413,429 and $7,425,011 for 1996 and 199f, respectively.
Corn Belt l'ower.1996 Annual Report
1 i
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 I. Cash and Investments -
The Cooperative has cash and investments in the following:
1996 1995 Obligations of the U.S. government and its agencies $ 7,295,513 $ 7,658,264 Corporate bonds 646,660 1,166,245 Common and preferred stock 3,528,021 2,952,749 National Rural Utilities Cooperative Finance Corporation commercial paper 6,104,831 6,797,554 Cash and CDs deposited with federally insured fmancial institutions 302,350 721,094 Funds held in trust invested primarily with Iowa Public Agency Investment Trust 3,485,644 3,393 656 Economic development investments 2,674,865 2,444,333 Other investments 83,196 137,741
$24,121,080 $ 25,271,636 The above investments are included as follows in the accompanying balance sheets:
Decommissioning fund $ 11,457,176 $ 9,716,390 Other investments and receivables 6,263,203 6,558,196 Cash and cash equivalents 6,400,701 7,477,797 Short-:erm investments 0 1,519,253
$24,121,080 $ 25,271,636 The above amounts include $2,873,829 and $4,283,659 at December 31,1996 and 1995, respectively, which must be used to fund construction of electric plant.
The carrying amounts of cash and cash equivalents and short-term investments of
$6,400,701 and $8,997,050 at December 31,1996 and 1995, respectively, approximate the fair value because of the short maturity of these investments.The Cooperative's decommis-sioning fund investments, which include marketable debt and equity securities, are reported at fair value with unrealized gains and losses reported as a net amount in a separate compo-nent of membership capital until realized.
.. The fair value of the Cooperative's other investments and receivables are based on quoted market prices for those or similar investments, where available. The fair value and carrying costs of these investments are as follows:
1996 1995 Other invenments carrying value $ 2,977,793 $ 3,437,669 Other imestnents fair value $ 2,977,862 $ 3,449,576 11 Building A Frwework For The Future
NOTES TO FINANCIAL. STATEMENTS December 31,1996 anc! 1995 For other investments and receivables of $3,285,410 and $3,120,527 at December 31, 1996 and 1995, respectively, for which tiere were no quoted market prices, a reasonable estimate of fair value could not be made without incurring excessive costs. These investments ,
include $1,000,000 invested in the preferred stock of the Iowa Capital Corporation (ICC). .
The ICC is a for-pro'it corporation established for the purpose of advancing economic development in the state of Iowa. After payment of operating costs and certain reserves, the -
net proceeds ofICC will be paid to the preferred stockholders, including the Cooperative,
- until the preferred stock investment plus a 15% cumulative return has been returned. After which, any ren aining proceeds will be split 2/3 to the preferred stockholders and 1/3 to the common stockholders (the state ofIowa).
The Cooperative has an investment of $2,515,343 and $2,515,525, at December 31, 1996 and 1995, respectively, with the National Rural Utilities Cooperative Finance Corpo-ration (CFC). This investment is required in order to allow the Cooperative to borrow funds from CFC. The investment earns interest of 5% on $2,195,507 which matures between 2070 and 2080 and 3% on $319,289 which matures between 2007 and 2025.
NOTE (3) DEFERRED PATRONAGE DIVIDENDS AND OTHER EQUITIES:
In accordance with the Iowa Code, the Board of Directors is required to allocate a por-tion of the current year's net margin to statutory surplus until the statutory surplus equals 30% or total equity. No additions can be made to statutory surplus whenever it exceeds 50%
of total equity. The Board of Directors appropriated S250,000 of both the 1996 and 1995 net margins to statutory surplus. !
The equity designated " Reserve for contingent losses" in the Statements of Deferred ;
Patronage Dividends and Other Equities is an appropriation of equity by the Board of l Directors. The Board of Directors appropriated $1,327,136 of the 1996 net margin to !
reserve for contingent losses. In 1995, the Cooperative used $1,481,968 of the reserve for ;
contingent losses for the impairment of the land held for future use (see Note 8). There is no I statutory restriction of this equity. !
The Board of Directors is permitted by the Iowa Code to allocate the current year's net margin to deferred patronage dividends upon meeting certain requirements and is required l to nuke such allocations if the net margin for the year exceeds specified maximums. The Board of Directors has appropriated S1,000,000 of the 1996 net margin and $750,000 of the 1995 net margin to deferred patronage dividends. Deferred patronage dividends are to be paid in the future as determined by the Board of Directors. ,,
Under the conditions of the Cooperative's mortgages, deferred patronage dividends cannot be retired without approval of the RUS and the CFC un! css the remaining equity meets certain tests. The Cooperative does not meet these tests at December 31,1996.
However, the Cooperative received permission and retired $297,255 of the 1984 and
$192,482 of the 1985 patronage dividends during 1996. During 1995, $250,000 of the 1982 and $220,000 of the 1984 patronage dividends were retired.
l Corn Bell Power.1996 AnnualReport ~
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 NOTE (4) LONG-TERM DEBT:
, Long-term debt consists ofmortgage notes payable to the United States ofAmerica
, acting through the RUS and the Federal Financing llank (FFil), capital lease obligations, and notes issued in conjunction with the issuance of pollution control revenue bonds. Substantially all the assets and all rent, income, revenue and net margin of the Cooperative are pledged as collateral for the long-term debt of the Cooperative. long-term debt is comprised of:
1996 1995 Mortgage notes due in quarterly installments-RUS 2%, due 1997-2008 $ 12,225,255 $ 13,384,941 RUS 5%, due 1997-2019 24,769,791 25,688,148 FFil 5.5%-11.8%, due 1997-2019 .15.J 35.398 67.655.362 102,130.444 106.728.451 Capital lease obligations -
Webster City revenue bonds 5.6%7.5%, duc 1997-2002 3,554,333 4,383,957 Pollution control revenue bonds -
5.8W6.125%, due 1997-2007 2,320,000 2,470,000
$108,004,777 $113,582,408 Maturities oflong-term debt for the next five years are as follows:
Ye_ar Maturity 1997. . . . . . . . . . .. $ 5,297,862 1998 ... . . . . . . . . . .5,080,561 1999 .. . . . . . . . . . . . . . 5,366,319 2000 . ..... . . .. .. .. 5,550,459 2001. . . . . . . .. ... . . 5,882,890 hi connection with the mortgage notes, the Cooperative had available at December 31, 1996, $3,882,000 from CFC to meet future borrowing needs. The Cooperative had available at December 31,1996, an unused $12,000,000 line of credit with CFC of which $1,000,000 is available only in the event of a nuclear incident.
Ilased on the borrowing rates currently available to the Cooperative for debt with similar terms and maturities, the fair value of the longeerm debt was $114,690,129 and $119,244,019, at December 31,1996 and 1995, respectively.
NOTE (5) CONSTRUCTION COMMITMENTS:
Total construction expenditures for 1997, including expenditures for the jointly-owned units, are estimated to be $10,932,490, of which $2,361,370 is for the purchase of nuclear fuel at DAEC.
Buihling A Framework For The Future
NOTES TO FINANCIAL STMEMENTS December 31,1996 and 1995 NOTE (6) JOINT PIANT OWNERSHIP:
Under joint-ownership agreements with other Iowa utilities, the Cooperative had undivided ,
interests at December 31,1996 in three electric generating units as shown below: .
Council Neal #4 Bluffs #3 DAEC -
Total electric plant .... ... .. .. S 44,758,127 S 14,187,779 5 66,940,601
- Accumulated depreciation .. .. .. S 23,706,436 S 6,817,536 S 28,256,475 Unit accredited capacity (mW) . .. 624 675 530 Cooperative's share (%) .. .. ... . I1.3% 3.8% 10.0%
Each participant provided its own financing for its share of the unit. The Cooperative's share of direct expenses of the jointly-owned units is included in the operating and maintenance ex-penses on the Statements of Revenues and Expenses.
During 1991, the Cooperative, one ofits members, North lowa Municipal Electric Coopera-tive Association (NIMECA), and the City of Grundy Center (the City), a NIMECA member, en-tered into a long-term lease agreement for the use by the City of two megawatts of the Cooperative's capacity in the Neal #4 generation facilities. The Cooperative will continue to act as the Neal #4 partner on behalforthe City. The above plant statistics have been reduced to reflect the agreement.
NOTE (7) BENEFIT PLANS:
Effective January 1,1996, all assets and accumulated plan benefits of the Cooperative's deposit administration defined benefit plan, covering substantially all employees, were transferred to the National Rural Electric Cooperative Association (NRECA) Retirement & Security Program (the Program). The Program is a defined benefit pension plan qualified under Section 401 and tax exempt under Section 501 (a) of the Internal Revenue Code. Upon transfer to the Program, the Cooperative's accumulated plan benefits exceeded plan assets by S402,695. A moratorium in effect from January 1, 1996 was lifted during 1996 and the past service cost was paid to the Program in 1997. Additionally, in 1996 the Cooperative recorded a total current period service cost to the Program of $469,262. In this multi-employer plan, which is available to all NRECA member cooperatives, the accumulated benefits and plan assets are not determined or allocated separately by individual employer. The pen-sion expense recorded by the Cooperative in 1995 was equal to its funding contribution of $368,712.
The Cooperative also provides a 401 (k) plan, available to all employees with the Cooperative match-ing 25% of the employees' contributions up to 4% of the employees' wages.
NOTE (8) LAND HELD FOR FUTURE USE:
Allied Power Cooperative ofIowa (Allied) was organized to build a generation plant and related transmission facilities to pmvide for future power needs. Until 1996, the Cooperative was a 50%
participant in Allied. During 1995, the Cooperative concluded the carrying value of the investment did not approximate market value and recorded a non-cash charge of $2,271,159. The charge was recorded as an impairment ofland held for future use in the Statements of Revenues and Expenses and this portion of the Cooperative's 1995 margin was applied against the reserve fbr contingent losses. During 1996, the Cooperative purchased the remaining 50% of the Allied land for $1,481,530.
The book value of the previously-owned 50% of Allied was in excess of the purchased 50% interest.
As a result, the Cooperative recorded an impairment ofland held fbr future use of $103,820 in the Statements of Revenues and Eypenses for the year ended December 31,1996.
Corn Bek Power.1996 AnnualReport '
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 NOTE (9) LIABI.LITY FOR SPENT NUCLEAR FUEL DISPOSAL COSTS:
',- The Nuclean Waste Disposal Act of1982 gave approval to the federal government to con-struct a repository for the nation's civilian spent nuclear fuel. The Act stated that funding for this !
repository would be provided by assessing nuclear generating unit owners a one-time fee for spent
]
- nuclear fuel being stored on-site at each nuclear facility in April 1983, and by assessing all future ,
energy generated by nuclear facilities at a rate of 1.0 mill per kilowatt hour. The Cooperative is l paying the post-1983 fees on a current basis and such fees are being charged to steam and other i power generation expenses. The Cooperative has previously paid the one-time fee and is amortiz-ing it to expense over a 13-year period ending in 1998 which corresponds with the period the Cooperative is recovering these costs in its rates. In both 1996 and 1995, $160,176 was amor-tized to steam and other power generation expenses NOTE (10) NIMECA COMBINED TRANSMISSION SYSTEM:
In 1989, the Cooperative and one ofits members, NIMECA, entered into a joint transmis- )
sion agreement which allows several members of NIMECA an individual undivided ownership i interest in and access to the Cooperative's transmission system. The Cooperative has a receivable j of $2,872,524 from a trust established by NIMECA for ultimate payment to the Cooperative. j These funds can only be used to fund RUS approved transmission projects. The Cooperative will l continue to operate and maintain the system. NIMECA members will reimburse the Cooperative !
for the proportionate share of operating expenses of the system and will contribute proportion- l ately for all future capital additions of the system. The reimbursements of the 1996 and 1995 operating expenses were S543,401 and $540,334, respectively, and were recorded as operating revenues. Additionally, the Cooperative and NIMECA entered into a capacity sharing agreement which provides for the sharing of generating resources through at least 2009.
NOTE (11) CLEAN AIR ACT:
The Clean Air Act (Act), as amended, made significant changes in the nation's clean air laws.
The Act's specific amendments to acid deposition control (acid rain) make significant reductions in the amounts of sulfur dioxide and nitrous oxide emissions allowed on an annual basis nation-wide. The Cooperative's coal-fired generating stations are in compliance with the standards established by Phase I of the Act and management has begun implementing the program neces-sary to meet the compliance requirements of Phase II which will be effective in the year 2000.
l NOTE (12) NATIONAL ENERGY POLICY ACT:
The Federal National Energy Policy Act of 1992 requires owners of nuclear power plants to pay a special assessment into a " Uranium Enrichment Decontamination and Decommissioning Fund." The assessment is based upon prior nuclear fuel purchases and for the DAEC averages approximately $1,417,503 annually through 2007, of which the Cooperative's 10% share is
$141,750. The Cooperative's total assessment of $1,978,529, which will be recovered in rates, has been recorded as a liability, net of payments,in the balance sheets. This liability, totaling l $1,417,503 on December 31,1996, has been recorded with a corresponding deferred charge amortized over a 15-year period, beginning in 1992.
Building A Framework For The Future
NOTES TO FINANCIAL STATEMENTS December 31,1996 and 1995 NOTE (13) NUCLEAR INSURANCE PROGRAM:
The Cooperative, under the provisions of the Price-Anderson Amendments Act of1988 (the ,
1988 Act), has the benefit of $8.9 billion ofpublic liability coverage. The coverage consists of ,
$200,000,000 ofinsurance and $8.7 billion of potential retroactive assessments from the owners ofeach commercial nuclear power plant. Under the 1988 Act for losses relating to nuclear acci-dents in excess of$200,000,000, each nuclear reactor may be assessed a maximum of -
$79,300,000 per nuclear incident, payable in annual installments of not more than $10,000,000.
The Cooperative's assessment on its 10% ownership in DAEC may be up to $7,930,000 per nuclear incident with a maximum of $1,000,000 per year. These limits are subject to adjustments for inflation in future years.
Pursuant to provisions in various nuclear insurance policies, the Cooperative could be assessed retroactive premiums in connection with future accidents at a nuclear facility owned by a utility participating in the particular insurance plan. In addition, the Cooperative could be as-sessed annually $940,000 related to coverages for excess property damage if the insurer's losses relating to an accident exceed its reserves. While assessment may also be made for losses in certain prior years, the Cooperative is not aware of any losses in such years that it believes are likely to result in an assessment.
In the unlikely event ofa catastrophic loss at DAEC, the amount ofinsurance available may not be adequate to cover property damage, decontamination and premature decommissioning. Uninsured losses, to the extent not r(covered through rates, would be borne by the Cooperative and could have a material adverse effect on the Cooperative's financial position and results of operations.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS OF CORN BEIJr POWER COOPERATIVE:
We have audited the accompanying balance sheets of Corn Belt Power Cooperative (a coop-erative association incorporated in Iowa) as of December 31,1996 and 1995, and the related statements of revenues and expenses, cash flows and deferred patronage dividends and other equities for the years then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an opinion on these financial state-ments based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about -
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,in all material re-spects, the financial position of Corn Belt Power Cooperative as of December 31,1996 and 1995, and the results ofits operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
j ARTilUR ANDERSEN LLP Kansas City, Missouri February 28,1997 Corn Bek Power. I996 AnnualReport ;
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