ML20205S054

1986 Omaha Public Power District Annual Rept

ML20205S054
Person / Time
Site:	Fort Calhoun
Issue date:	12/31/1986
From:	Andrews R, Mark Miller OMAHA PUBLIC POWER DISTRICT
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
LIC-87-208, NUDOCS 8704060510
Download: ML20205S054 (25)

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CONTENTS 1986 HIGHLIGHTS 3

I j

OPPD Service Area Map.

2 Operating Revenues l

1986 Highlights.

3 Operating revenues for 1986 were $311,498.000, J

Chairman's Report..

4-5 an increase of $8,462,000, or 2.8%, over 1985 operating revenues of $303,036,000.

Board of Directors..............

5 n

President's Report......

6-7 Operation and Maintenance Expenses Vice Presidents.....

7 Operation and maintenance expenses for 1986

)

1986 Operations Review.

8-10 were $188,099,000, an increase of $15,661,000, or 9.1%, over 1985 operation and maintenance Financing.

11 expenses of $172,438,000.

Auditors' Opinion.....

11 Balance Sheets.

12-13 Net Operating Revenues Statements of Net Earnings and Accumulated Net operating revenues, before depreciation and Earnings Reinvested in the Business....

14 decommissioning, were $112,431,000, a decrease of $8,060,000, or 6.7%, under 1985 net operating Statements of Sources of Funds revenues of $120,491,000.

)

for Construction...

15 Notes to Financial Statements..

. 16-18 Net Earnings Reinvested in the Business Net Receipts and Debt Service Coverage.

18 Net earnings reinvested in the business totaled l

1986-1985 Comparisons.....

19

$28,016,000, a decrease of $12,240,000, or 30.4%, under 1985 net earnings reinvested in the Electric System Revenue Bonds business of $40,256,000.

l Outstanding..

. 20-21 Electric Statistics.

22 General Business Sales OPPD Corporate Officers.

23 General business sales to District customers were 5,794,115,000 kilowatt-hours in 1986, an increase of 328,729,000, or 6.0%, over 1985 sales of 5,465,386,000 kilowatt-hours.

Average Number of Customers The District served an average total of 233,649 customers in 1986, an increase of 4,549, or 2.0%,

over the 1985 average total of 229,100 customers.

Average Residential Use p

Average annual use per residential customer in l

1986 was 10,263 kilowatt-hours, an increase of l

513, or 5.3%, over the 1985 average of 9,750 kilowatt-hours.

Average Residential Cost The District's residential customers paid an average of 5.76c per kilowatt-hour during 1986 compared to 3.39c per kilowatt-hour in 1946.

OPPD's initial year of operation.

1986 Construction Expenditures Expansion and improvement of system facilities during 1986 required construction exoenditures of

$74,162,100.

e e

CHAIRMAN'S REPORT M

l For the Omaha Public Power Dis-This reduction, together with trict,1986 was a year of financial lower coal and transportation h

stability. We charted and main-costs, represents a decrease of 9r k tained a steady course as we

$22.8 million in the value of the

[. aNw e s

, [

geared the company and its inventory at Nebraska City.

.f h

people to meet the challenges Another important financial

' g@

of 1987 and beyond. These.

step was taken in May with the l

7 challenges include the continued a

advance refunding of the

(

slow growth of energy markets.

$60 million in Electric Service and an ever-increasing competi-s Reverue Bonds that were issued tion for providing energy-related n January 1985. The more

_p 7:

favorableinterest rate achievedin 4

seruces.

Operating revenues for 1986 the process will save more than were $311.5 million, resulting

$2 million for our customer-J w

j in net earnings for 1986 of owners in 1986 dollars.

T

$28 million, a 6.4 percent return Another sign of the stability 4g' on equity. We consider this to be enjoyed by this utility is the fact satisfactory. Energy sales totaled that electric rates have not nearly 6.2 billion kilowatt-hours, increased since March 1984.

C-N/

3.4 percent more than total Further good news is that no y

sales for the previous year.

increases are planned for 1987.

e~

i Akt[

In 1987, we expect operating rev-Our residential customers paid l

taal enues to total S303 million and an average 5.76 cents per earnings of $27.2 million, a 5.8 kilowatt-hour for their electricity percent return on equity. This in 1986, more than 22 percent is in keeping with our long range less than the national average.

strategic planning target for Our commercial and industrial return on equity.

rates also compared favorably.

Several important accomplish-An independent rate study ments in 1986 contributed to the commissioned by OPPDwas com-stability of the company during pleted in 1986. We were pleased l

the year and will have positive that the study found our cost of impact for many years to come.

service and rate design activi-In February, a new agreement ties to be generallyin accordance was reached for the transporta-with industry standards. A com-tion of coal to the North Omaha prehensive follow-up on recom-and Nebraska City power plants.

mendations included in the That agreement is expected study report will be conducted to save our customer-owners during 1987.

approximately $171 million over

+

the 13-year life of the contract.

A major redistricting of our service area was completed in in August, a three-year program 1986, adding a fourth subdivi-to reduce the coalinventory at sion and an eighth member to our Nebraska City Station was the Board of Directors. Fred J.

completed. The inventory was Ulrich was appointed by Gover.

reduced from a peak of 1.34 mil-nor Robert Kerrey as the eighth lion tons in November 1983 to director and then sought and won 400,000 tons, which is about a a six-year term in the November 60-day supply. This was accom-general election. Director Keith piished by reducing deliveries to B. Edquist, who now represents minimum levels in the coal con-the newly created Suburban tract and by diverting contract Subdivision, was re-elected to a coal to the North Omaha Station.

six-year term.

Richard R Jeffries, a director since 1981 and Chairman of the Board in 1984 and 1985, did not seek re-election. We shall miss his legal and business expertise.

John K. Green, an Omaha attor-3 ney, was elected to a six-year D '.

I, 1

ij #

term in November, replacing y

Mr. Jeffries as a representative j

'y f

of the Omaha Subdivision.

.,/'

With Directors Dennis D.

Jorgensen, Gene R Spence, Warren R. Swigart and Frank J.

6,

~

Wear continuing to serve this utility well, with strong senior management directing the oper-ations, and with well-trained and highly motivated employees,

'p l

we are well equipped to face the I

challenges of the future.

s, N

I commend employees and

{'<

M..

management for their continuing d

efforts to enhance customer service throughout 1986 while maintaining the sound operating practices of a successful public utility.

In 1987, we shall continue to operate in a professional and MS y

businesslike manner. We shall M

continue to maintain the financial

(..

integrity of this utility, and we p

shall continue to remain atten-l

9* N M,. Ag, tise to the interests and needs 3'

i of our customer-owners. Beyond that, we shall strengthen the gY/J

}

p position of this utility as the j

energy leader in this market with customer service our driving o

force.

, S~

t-r Morris F. Miller l

Chairman of the Board

\\

'N 1

L

I PRESIDENT'S REPORT Forty years ago, in December 220,000-square-foot office build-1946, the Omaha Public Power ingisscheduled for October 1988.

District brought public power to eastern Nebraska, pledging to Energy Plaza will have a maintain the sound business state-of-the-art thermal storage principles of its privately owned system for cooling and electric predecessor.

heat pumps for heating. There 4

will be solar heating of water l

y Today,40 years later, we take for domestic use, computerized 2-

._s pridein having done just that. We monitoring of all energy manage-4 f.

7 gF u /*% '

d are also proud that our customer-ment functions, and extensive t

owners have long benefited from use of naturallighting.

j d

1 the low-cost, reliable electric 4

1 service offered by this publicly Another major construction pro-sd' Y

'~

owned utility.

Ject, the Elkhorn Service Center

[l just west of Omaha,is nearing

-( '

Although we are proud, we are completion. The 135,000-square-not complacent. Today, for foot facility will consolidate more example, our strategic planning than 200 line, underground, process clearly defines a slow-stores, substation, transportation, growth environment for this and customer service employees utility in the foreseeable future.

who serve western Omaha and smaller communities and rural C

e J,

With that slow growth will come areas to the north and west.

p

/g& '

new challenges, largely because q

^

Q / d.

e c c -f of new government policies, Likewise, OPPD's new Energy s

A. *,

?7 ample energy supplies, greater Control Center has been com-

~

l' 3 j%;j' access to alternative fuels, and pleted in central Omaha and e. * *,

r

'J '

emerging new technologies.

is being phased into operation Meeting these challenges will in 1987. System operations require new and innovative ways and line dispatching will function of doing things.

in this building, which will also house OPPD's new Energy in 1986, we provided the building Management System. This I

blocks for continued success in sophisticated computer system this new and challenging environ-will be the nerve center for ment. Through our Performance production, transmission, and 100% program, we placed distribution activities.

renewed emphasis on customer service excellence throughout Two additional customer service the company. We introduced offices were opened in Omaha 9

programs designed to increase during 1986 for the convenience j

productivity by providing ways of customers wanting personal for employees to propose and service in paying bills, order-implement new and better ways ing electric service or seeking of doing their jobs, and we also energy information and assis-moved decisively forward on tance. Also during the year, l

many physicalimprovements to OPPD's new Customer Informa-enhance customer service.

tion and Meter Records Systems were fully implemented. These Ground was broken in August for two systems provide faster pro.

Energy Plaza, the expansion of cessing of service orders, OPPD's corporate headquarters reduce the time between meter facilities in downtown Omaha.

reading and billing, and allow Construction is well under way, faster response to customer and completion of the 11-story information requirements. All of

these projects respond to the

1. N goal of competing through cus-k e

tomer service excellence.

i a

From an operations standpoint, 1986 was also a very good year.

All three major generating sta-

[

N y

tions contributed substantially to

{

g, meeting our customers' energy

' is g'

needs. The Fort Calhoun Station,

.M OPPD's nuclear power plant, was a workhorse, providing 49 percent of our total generation.

Our newest plant, the coal-fired Nebraska City Station, supphed 31 percent; and the North Omaha Station, operating in a cycling mode,20 percent.

, /'

Employees responded with enthusiasm to intensified training g

4/

ff g

in 1986, particularly in customer 4

I k'

service philosophy. Response v=

v was also good to personalgrowth t,y "M

and development programs.

1

• Safety education also paid off in g s..

g?T 5

1986 with a 17 percent reduction g

i

~,

in on-the-job injuries compared T:

to 1985.

[

In conclusion, I am pleased to report that our customer-owners

~

7 continued to enjoy a reliable N-supply of electricity at an afford-able cost in 1986. They shall continue to do so in 1987 and 4

I' b

_[j beyond as we plan for and meet j

the competitive challenges e

, -/

s.

ahead.

W.i n=-e t

Bernard W. Reznicek President Chief Executive Officer

1986 OPERATIONS REVIEW

<w Service. That's what customers updated and expanded orienta-

/

.p, g-W4 District are looking for today, customer service.

of the Omaha Public Power tion program stressing improved e

j

~

N 3-yW>

and that's what they have come

- 1 to expect.

Another successful Performance 4*

100% program initiated in 1986

@(-

OPPD has always paid close pairs employees who ordinarily e

attention to the service needs of do not have direct customer con-

}(

its customers. But the competi-tact with employees whose tive marketplace of the '80s primaryjob is to handle customer demands that the company work concerns. This in-the-field expe-even harder to satisfycustomers rience allows a wider base of through service excellence,while employees to get the feel for maintaining product reliability working face to face with yg and rate stability.

customers.

4

..e M

C Through a new corporate-wide In addition to enhancing customer

,( O f yy r-program launched in late 1985, service, Performance 100% has

' pt OPPD made customer service as a pnmary goal to improve the v -

&,N4 '

an even more important busi-quality of work life for employ-ness strategy than in the past.

ees. OPPD's Quality of Work

.,. M /

A number of programs were initi.

Life (OWL) program was

~

f

_hp k*' g;' y@;

47 ated during 1986 to carry out the launched in 1986 to provide customer service goals outlined employees with new opportuni-

=

in the Performance 100% plans.

ties to achieve personal

.< Y satisfaction on the job. Through

//"[

p$

An important first step was to find this program, employees con-X, T

out just what customers need tribute their ideas, energies, and and want in the way of service support to help the company 9,,: *; A from their electn,c utility. New meet its goals.

f surveys were developed to solicit feedback from customers. These A OWL Task Force, comprised surveys give OPPD specific of employees throughoutthe com-information that is being used to pany, was appointed to solicit and improve the quality of service evaluate employee concerns provided to customer-owners.

and suggestions and to make k

a recommendations for improve-

[

tilla Also in 1986, OPPD initiated and ments. OWL teams, small "O

conducted focus group discus-groups of employees from the sions on several energy-related same basic work area, provide m

A%A topics. Through these discus-the foundation for an on-going sions, the company gained a communication network among mai deeper understanding of key employees, management, and issues from the customers' per-the OWL Task Force.

qw spective.The expanded customer-feedback programs, together Many employees also had the with regular customer surveys, opportunityin 1986 to participate help OPPD see itself through in Resources Management the customers' eyes and better (RM), a program which helps understand their concerns.

improve productivity through development of employee ideas.

New training programs were Designed to respond to "There developed in 1986 to increase must be a better way," the RM emphasis on customer service.

program is changing the way More than 400 employees OPPD is doing many things.

attended telephone-skills work-While RM participants enjoy the shops, and 200 now and present satisfaction of seeing a project workers participated in an idea through to completion, the

company benehts through the enhance the training activities at cost savings associated with the Fort Calhoun Station.

{

e improved efficiency.

In 1986, the Nuclear Regulatory By the end of 1986, approxi-Commission commended mately 450 employees had Fort Calhoun Station for the a

participated in RM, and that num-exceptionally low number of ber will more than double during safety-related automatic shut-L 1987. Savings from the 212 pro-downs of its reactor system -

jects completed at year's end one-tenth the national average are estimated to total $2.8 million over a four-year period. And in annually.

June, employees of the Nuclear Production Division achieved Another highly successful com-a record one million man-hours ponent of Performance 100% in

- 18 months of work -without Is terms of improved service and a disabling injury.

[

.,A employee involvement is the j-Customer Service improvement Work continued during 1986 on an Program. This program recog-extensive project to extend the nized and rewarded employ-usefullifetime of OPPD's largest ces who submitted suggestions and oldest generating plant -

for bettering customer service the North Omaha Station. A p#'W h p

- whether that service came on cost-effective program of sched-

,Wh the phone, in the field or over the uled maintenance and replace-counter. In 1986, more than 500 ments is now under way at the Qr g

employee suggestions were 615,000-kilowatt plant. The pro-

,d

'.g considered for implementation.

gram, called Life Extension, will I j' 4

g customer satisfaction, but the be needed.

' d lk"1 l ;

help delay the time when costly

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Excellent service is the key to new generating sources will f

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backboneof thebusiness remains the production and distribution The 585,000-kilowatt coal-fired

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k, of electricity.

Nebraska City Station underwent Ei " 1.M ys I fq pl

• Ol r iM a scheduled outage in the final Qy

1. M.;h.h g+pffu [ bg h,b

' i That process begins for OPPD quarter of 1986. While the plant at one of three major generatin9 was out of service for three h" W s F F,.3 I III:llily i

l

%PUy stations - coal-fired plants in months, major improvements k

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$)h;kw&;,. f p:Q.g p-,_"

hh 1A e

Nebraska City and Omaha and were made to the generator and a nuclearplant near Fort Calhoun.

the turbine.

OPPD is committing many The importance of these three resources toward upgrading the major generating stations was 476.000-kilowatt Fort Calhoun underscored during a July heat Station over the next three years.

wave,particularlyonJuly28 when Projects include additions to the a new system peak of 1,435,600 secunty building, maintenance kilowatts was established.

shop, lockc r room, and the chemical and radiation protec.

The summer weather also pro-tion facility. The administration vided an excellent opportunity building will be expanded and for OPPD to evaluate an experi-renovated, and a new ware-mental program called Time Off.

house will be constructed. A Under the program, approxi.

now training center will house a mately 230 customers allowed simulator that replicates the OPPD to cycle off their air con-plant's control room. The fully ditioners for varying periods of equipped center and additions time on hot days when demand to the nuclear training staff are for electricity was exceptionally in keeping with OPPD's goal to high. Besides enabling OPPD to i

1986 OPERATIONS REVIEW (CONTINUED) test the reliability of the radio-purpose of protecting lines from j'

controlled cycling system, the lightning. By integrating fiber-volunteers provided valuable optic cable in the shieldwire,it

.y information about the potential also becomes a part of the com-acceptance of such a program on munication system. This allows a system-wide basis. The test OPPD to direct the transmission 1

1~

Eb willcontinue through the summer and distribution of electricity of 1988.

through computerized controls 3

and to transmit other data over

/

I e, l Major efforts were made during its own telecommunications l

the year to improve service to system.

g

' c(,

C severalof OPPD'sindustrial customers. Three 69,000-volt cir-OPPD is now planning to expand

^

W cuits, which interconnect Offutt the use of fiber optics to link a 3

Air Force Base and Arcadian number of substations and Corporation, were rebuilt. A major facilities. Owning and t

+

N complete overhaul was made on operating primary sections of its

'N major portions of the electric telecommunications system will "N'

system serving Mutual of prove more economical and Omaha to improve service reliable than continuing to lease reliability.

this type of equipment.

O OPPD completed rebuilding a An all-company safety record r,,

W G M _i 32-mile section of the " Kansas was established by employees

• GIU5f0 fit

~,

Line," a 270-mile 161,000-volt in the Metering Services Depart-

' T g $.

I r

'~

line from Omaha to Midian, ment - 60 consecutive years Kansas. When it was first ener-without a disabling injury.

gized in 1942, the " Kansas Line" was the second longest trans.

The major strides toward service mission line in the world. OPPD and operations excellence in began rebuilding its 85-mile por.

1986 were accomplished through f

tion of the line in August 1982, the contributions and support and work is scheduled for com.

of OPPD's work force, now 2,000 i

g pletion this fallon the final 12 mile strong. These men and women section near the Kansas border.

are meeting the challenge and

}

making the changes which will Line crews spent three weeks put OPPD in the strong competi-i working 16-hour days in north-tive position necessary for eastern Nebraska repairing success in the years ahead.

damage caused by a midsum-mer tornado. Restoration work included replacement of eight l

transmission line structures.

OPPD worked almost a year to repair damage to a midtown Omaha substation following the worst switchgear fire in the com-pany's 40-year history. The fire occurred on August 2,1985, and the substation was returned to service June 28,1986.

Fiber-optic shieldwire was used by OPPD for the first time in 1986 for transmission line con-struction. Historically, metal shieldwire has served the single I

i 1

FINANCING AUDITOR 5' OPINION II in December 1946, Omaha Public Power District Omaha Public Power District:

funded the purchase of The Nebraska Power We have examined the balance sheets of Company with a bank loan for $42,000,000. Reve-Omaha Public Power District as of December 31, nue bonds were issued in February 1947 to pay.

1986 ar J 1985 and the related statements of net off this loan. Since then, $1,487,930,000 of addi' tional revenue bonds have been sold.

earnings and accumulated earnings reinvested in the business and of sources of funds for con-1' In May 1986, the District sold $70,730,000 of struction for each of the three years in the period Electric System Revenue Bonds (the 1986 Series ended December 31,1986. Our examinations A Bonds) at an effective interest rate of 7.67%

were made in accordance with generally accepted The proceeds of the issue were used primarily for auditing standards and, accordingly, included such the purpose of refunding the $60,000,0001985 tests of the accounting records and such other Series A Bonds and for other corporate purposes.

auditing procedures as we considered necessary in the circumstances.

The District retired $13,840,000 of revenue bonds in 1986. These retirements bring the total of in our opinion, such financial statements present bonds redeemed and refunded through 1986 to fairly the financial position of the District at

$652,985,000, leaving outstanding bonds of December 31,1986 and 1985, and the results of

$876,945,000 at December 31,1986. During 1986, its operations and the sources of funds for con-

$50,817,000 of interest expense was charged to struction for each of the three years in the period operations on outstanding bonds, representing enried December 31,1986, in conformity with an average annual rate of 5.8%

generally accepted accounting principles applied on consistent basis.

Outstanding commercial paper at December 31, 1986, was $47,500,000, and $7,500,000 was drawn against the supporting revolving line of credit 4N)gX[

agreement. During 198S, $2,590,000 of interest 1

expense was charged to operations on outstand-t ing commercial paper, representing an average DELOITTE HASKINS & SELLS annual rate of 4.7% Outstanding notes and sub-Omaha, Nebraska ordinated obligations at December 31,1986, February 20,1987 totaled $5,394,000. During 1986, $475,000 of

(

interest expense was charged to operations on outstanding notes and subordinated obligations, representing an average annual rate of 8.8%

Gross Electric Plant amounted to $1,389,645,000 and Nuclear Fuel (at amortized cost) amounted to

$172,315,000 at December 31,1986. Accumulated earnings reinvested in the business increased

$28,016,000 to a totalof $462,616,000 during 1986 while total assets increased $38,677,000 to a total of $1,485,843,000.

P l

\\

l 6

I OMAHA PUBLIC POWER DISTRICT 12 BALANCE SHEETS, DECEMBER 31,1986 AND 1985 ASSETS NOTES 1986 1985 (thousands)

UTILITY PLANT-At cost:

2,9 Electric plant (includes construction work in progress of $73,745,000 and $63.253,000, respectively).............

$1,389,645

$1,325,902 Less accumulated depreciation...

403,311 369,358 Electric plant - net...............

986,334 956,544 Nuclear fuel - at amortized cost.....

172,315 169,352 Utility plant - net.

1,158,649 1,125,896 SPECIAL PURPOSE FUNDS (primarily at amortized cost):

3,4 Construction fund....................................

4,143 3,836 Electric system revenue bond fund (net of current portion).........................

48,074 48,880 Debt service fund..................................

8,376 9,908 Segregated fund (see contra)..

3,755 4,146 Revenue fund - decommissioning.......................

14,597 9,903 Deferred compensation fund......

7,144 3

Total special purpose funds.

86,089 76,673 CURRENT ASSETS:

j Revenue fund - cash..

4 38 30 Revenue fund - U.S. Government securities (at amortized cost)..

4 67,979 64,240 Electric system revenue bond fund - current portion........

3,4 28,704 26,502 Accounts receivable - net......

25,216 18.933 Unbilled revenues..................

11,718 14,200 Fossil fuels - at average cost..

10,246 20,033 Materials and supplies - at average cost 22,584 21,572 1

Deferred production costs...........

3,210 5.607

)

Other.......................

3,710 4,117 Total current assets........

173,405 175,234 DEFER RED C H ARGES..............................

5 67,700 69,363 1

W e

TOTA L........................

g5,843

$1.447,166 Soo notes to financialstatements, d

I3 LIABILITIES NOTES 1986 1985 (thousands)

LONG-TERM DEBT:

2 Electric system revenue bonds - net of current portion:

Serial bonds. 3.5% to 7.4% due annually from 1987 to 2001.......................

$ 220,605

$ 233,005 Term bonds. 5%% to 7%% due at various dates from 1995 to 2017...................

641,000 633,210 Total electric system revenue bonds...................

861,605 866,215 Electric revenue notes - commercial paper series...........

6 55,000 55,000 Subordinated notes due December 1990. 6%%..............

520 520 Subordinated obligations................................

4,831 4,874 Total..............................................

921,956 926,609 Less unamortized discounts...

11,936 9,514 Long term debt - net..................................

910,020 917,095 COMMITMENTS AND CONTINGENT LIABILITIES 9,10 LIABILITIES PAYABLE FROM SEGREGATED FUND (see contra)...

3 3,755 4,146 CURRENT LIABILITIES:

3 Current portion of electric system revenue bonds.............

2 15,340 13.840 Current portion of subordinated obligations..................

43 40 1

Accounts payable.....................................

22,513 22.954 Accrued payments in lieu of taxes........................

10,064 9,199 Accrued interest....................................

22,077 22,616 Other..................................

10,882 6.787 Total current liabilities................................

80,919 75.436 OTHER LIABILITIES:

Decommissioning costs..................................

14,597 9,903 Deferred compensation...............................

8 7,144 Other.................................................

6,792 5,986 Total other liabilities....................................

28,533 15,889 5

ACCUMULATED EARNINGS REINVESTED IN THE BUSINESS........................

462,616 434,600 TOTAL.................................................

,$34_85A43

$1,447,166

\\

STATEMENTS OF NET EARNINGS AND ACCUMULATED EARNINGS REINVESTED IN THE BUSINESS 14 FOR THE THREE YEARS ENDED DECEMBER 31,1986 1986 1985 1984 (thousands)

OPERATING REVENUES...............................

$311,496

$303,036

$305,999 OPERATING EXPENSES:

Operation:

d Fuel.................................................

70,325 74,775 90,456 Other production......................................

40,138 28.831 18,751 Transmission.........................................

1,881 1,756 1,572 l

Dist ribution..........................................

10,415 9,684 9,002 Customer accounts...................................

7,646 6,950 6,516 Customer service and information.......................

2,674 2,396 2,265 Administrative and general.............................

25,573 22,474 20,698 Mainte nance...........................................

29,447 25,572 27,741 Total operation and maintenance..........................

188,099 172,438 177,001 Depreciation...........................................

39,883 38,515 37,279 Decommissioning.......................................

3,866 3,602 3,531 Payments in lieu of taxes.................................

10,968 10,107 10.292 Total operating expenses................................

242,406

_224,662 228,103 i

OPERATING INCOME...................................

64,692 78.374 77,896 OTHER INCOME CREDITS (CHARGES):

In te res t income.......................................

12,321 15,332 14,791 Allowance for funds used during construction...............

3,675 2.850 2,382 j

Allowanco for funds used for nuclear fuel...................

6,034 5.391 5,321 Amortization of cancelled project costs....................

(5,181)

(5,181)

(5.181)

Othe r - no t............................................

(1,081)

(894)

(390)

Total other income credits - net..........................

15,768 17,498 16,923 EARNINGS BEFORE INTEREST EXPENSE................

84,460 95,872 94,819 INTEREST EX PENSE...................................

56,444 55,616

_ 54,812 NET E A RNING S........................................

28,016 40,256 40,007 ACCUMULATED EARNINGS REINVESTED IN THE BUSINESS, BEGINN4NG OF T HE Y EAR.......................................

_ 434,600

_ 394,344

_354,337 ACCUMULATED EARNINGS REINVESTED IN THE BUSINESS, END OF THE YEAR.................

S462 616

$434,600

$394 344 1

See notes to financialstatements.

l

1 STATEMENTS OF SOURCES OF FUNDS FOR CONSTRUCTION FOR THE THREE YEARS ENDED DECEMBER 31,1986 15 1986 1985 1984 (thousands)

SOURCES OF FUNDS:

)

From operations:

Net ea rnings.........................................

S 28,016

$ 40,256

$ 40,007

)

Charges (credits) to operations not affecting funds:

Depreciation.......................................

39,843 38.515 37,279 Amortization of nuclear fuel..........................

23,263 21,634 14.340 Allowances for funds used............................

(9,709)

(8.241)

(7,703)

Amortization of cancelled project costs................

5,181 5,181 5,181 Funds from operations...................................

_86,634 97,345 89,104 From financings:

Long term borrowings.................................

66,809 114.077 4.950 increase (decrease) in shott term borrowings.............

1,503 (104,451) 75,176 Long term debt reduction..............................

(75,383)

(13,880)

_ (88.331)

Funds applied to financings - net.........................

_ (7,071)

(4,254)

(8,205)

Funds from (applied to):

Decrease (increase) in net current assets (excluding short-term borrowings and current portion of long term debt).....................

5,800 (6,320)

(3,047)

Decrease (increase) in special purpose funds.............

(9,807) 8.972 14,892 Decrease (increase) in deferred charges.............,...

(3,517)

(7.893) 196 increase (decrease) in other liabilities....................

14,142 1,270

_(23,095)

Funds from (applied to) - not............................

6,627

_ (3,971)

(11,054)

Allowances for funds used................................

9,700 8,241 7,703 TOTAL.............................................

S 95 899

$ 97,361

$_73548 1

USES OF FUNDS FOR CONSTRUCTION:

Electric plant......

8 69,673

$ 69,032 5 57,426 N uclear fuel...........................................

_ 26,226

__28.329

__ 20,122 TOTAL..........................................

_$ 95 899

$9 m.7 361am

_$ 77,548 h

i See nctes to financialstatements.

l l

k

NOTES TO FINANCIAL. STATEMENTS 16 FOR THE THREE YEARS ENDED DECEMBER 31,1986

1.

SUMMARY

OF SIGNIFICANT Deferred Financing Costs - Debt discount ACCOUNTING POUCtES and expenso and amortizable charges relating Organization and Business - Omaha Public to refunded debt are amortized ratably over the Power District. a pohtical subdivision of the Stato lives of the related issues to which they portain, c

of Nebraska, is a public utility engaged solely in Deterred Cancelled Project Costs - Fori the generation, transmission, and distribution Calhoun Station - Unit No. 2 - Costs aris-of electric power and energy and other related ing from the termination of contracts relating to

[

activities. The Board of Directors is authorized to Fort Calhoun Station - Unit No. 2 are being establish ratos. The District is not liable for Fodoral amortized over ton years through 1989.

and stato incomo or ad valorem taxes on property; Nucisar Fuel Disposal Costs - Permanent however pa monts in lieu of taxes are made to various loca governments.

disposal of spent nuclear fuot is the responsiLlity of the Federal Government under an agreement Basis of Accounting - The accounting records ontored into with the United States Department of of the Distr 6ct are maintained generally in accor-Energy (DOE). Under the agreement, the District dance with the Uniform System of Accounts is subject to a one mill por net kilowatt hour fee on proscribed by the Federal Energy Regulatory all nuclear energy generation, which is paid quar-Commission.

torly to the DOE. _he spent nuclear fuel disposal T

Accounting for Revenues - Motors are road costs are included in the Distnct's nuclear fuel and bills are rondored on a c cle basis. Revenues amomzation and are collected from customers earned after motors are roa aro estimated and as part of fuol costs.

accrued as unbilled revenues at tho end of each accounting penod.

2. LONG TERM DEST Utility Plant - The costs of proporty additions.

The District utilizes procoods of debt issues replacements of units of property, and bottormonts primanly in financing its construction program, are charged to electnc plant. Maintenance and replacements of minor items are charged to oper.

Electric System Movenue Bonds - Matunties of ating expenses. Costs of depreciablo units of electnc system revenue bonds outstandi at electric plant retirod are ohminated from electric December 31.1986, duo 1987 through 19 1 aro plant accounts by char as foHows (in thousandst removal expensos, to tbos. loss salvago plus accumulated deprecia-198 7....................... $ 15.340 t,on ccount, iD88...................... 510.0i0 h9hl','*'l',';l',;;ll'l*

,h An anowance for funds used, approximati the Distnct a current cost of financing electric ant 1991...................... $ 18.4 4 0 construction and the purchase of nuclear uol. is capitalized as a component of the cost of the util-The District's bond indentures provido for cortain sty plant. This allowanco was computed at 6 6%,

rostrictions, the most significant of which aro; 6.0% and 6 3% for both construction work in prog-Additional bonds may not bo issued unless ross and nuclear fuel for the years onded in 1980, estimated not recotpfs (as definod) for each 1985 and 1984, respectively.

futuro year will equal or orcoed 1.4 times the Depreciation and Amortiration - Depreciation debt service on all bonds outstanding including is computed on the straight kno basis at ratos the additional bonds being issued or to bo I

based on the estimated usoful hvos of the various issued in the caso of a power plant (as definod) classos of property. Deprociation expenso has being financed in incromonts.

avera0ed approximately 3.4% of deprociablo An amount at loast equivalent to 12%% of property in each of the throo years onded gross operating revenuo (as defined) must bo December 31,1980.

spent annually for maintonanco, replacoments,

)

Amortization of nucioar fuelis based upon tho or additions to the cloctric system, or if not so 1

cost thoroof, which is pro rated by fuel assembly spent is to bo placed in a special fund to bo in accordanco with the thermat onorgy that each usod for such purposos or for retiromonts of orig-assembly producos.

inat bonds (as dohnod)in advance of maturity.

In any throu year period, at loast 7%% of gon.

Deferred Production Costs - Cortain production oral busanoss incomo (as defined) must tm costs are recovorod under the Fuoi and Production spent for replacements, renowals or additions Cost Adjustment (FPA) clauso of the District's rato to tho electric system. Any deficiency is to be actmdulos. Thoso costs are doforrod until they ato spent within two years thoroaffor for such pur-collected by FPA bilkngs.

posos or if not so spent is to be used for bond Deferred Charges - Cortain costs and char 00s retirements in advanco of maturity.

are doforrod and amorlized over the ponod that in May 1980. the Distnct issued $70.730,000 ratopayors ato expected to bonofit. The most sig.

Electric Systom Revenuo Bonds. Substantially all nihcant items aro; proconds of this lasuo have tmon placed in an i

I7 irrevocable trust to be used solely for satisfying

_l980_ _W8L schedufed payments of pnncipal, redemption pro-(thousands) meum and interest on the outstanding 1985 Senos Deferred financing costs

$38,441 $32,007 A Electric System Revenue Bonds. Accordingly, Deferred cancelled project the 1985 Senes A Electric System Revenue costs-Fort Calhoun Sta-Bonds and the related trust are not recorded in tion - Unit No. 2 11,655 18,836 the accompanyi financial statements at Other

,_17,604 _20,520 December 31,1 Total jp7dOO,$,693 3 Subordinated lone -The subordinated Ihr hntrosf,"t h2 4

6. ELECTRIC REVENUE NOTES - COMtER-CIAL R4PER SERES

3. SPECIAL PURPOSE FUNOg The Dstrict has authorized the issuance of tax.

exempt commercial paper of up to $75,000,000 Special purpose funds of the Dstnct are as which is su ted by a revolving credit agree-follows:

ment, espiri in May 1987, with four financial The Construction Fund is to be used for capital institutions.

Distnct intends to extend this pro-improvements, additions and betterments to and Oram dunng 1987, At December 31,1986 and ent:nsions of the Dstrict's electric system, or for 1985, the L% strict had $47,500,000 of commercial payment of pnncipal and intorest on Eicctnc paper issued and outstanding with $7,500,000 System Revenue Donds, drawn against the revolving credit agreement. The The Electr6c System Revenue Bond Fund and average borrowing rates al December 31,1986 Dzbt Sorvice Fund are held by Trusteos for the and 1985 were 4.1% and 5.8%

retiremont of term and sonal bonds and the pay.

mont of the related interest.

7. PENSION PLAN The Segregated Fund represents customer Substantially all Dstrict employees are members deposits and refundable advancos.

of its contnbutory pension plan and are not cov.

The Revenuo Fund - Decommissioning was cred by Social Secunty Generally, the plan established to cover the estimated cost of decom-providos for benefits at age 65 with reduced bene-missioning Fort Calhoun Station - Unit No. I fits for earlier rotaroments. Provision is made when its operating license orperos in 2008. The annually for actuarially computed current costs, fund was created as a result of a decommission-which woro $4,708,000, 54,829,000 and ing plan adopted by the Distnct and additions are

$4,811,000 for 1986,1985 and 1984, respectively.

mado to the fund monthly The Dstrict's policy is to fund ponsion costs The Doforrod Compensation Fund is vatuod at accrued. Accumulated plan benefits and nel market value and is used to account for emptnyoo assots at January 1,1986 and 1985 were as contnbutions and related carnings pursuant to follows:

the Dstrict a deferrod componsation plan (800

._ 980_ __198 L.

Noto 8).

(thousarx!s)

Actuarial prosent value of (ccu ufated plan benefits 4, DEPOSITS ANDINVESTMENTS

,t The Dstricta bank accounts and investments Non vosted

_ 1449 _ 0.690 included in the Construction Fund, Electric Sys-Total

$ 8052},$ E 558 tom Rovonuo Bond Fund, Debt Sorvico Fund, Segregated Fund, Revonuo Fund - Decommis-Net assets availablo for sioning and the Revonuo Furxf are hold by the bondits pg2j] $ygg Dstrict a agents in the Dstnct a namo in accor-The assumed ratos of return used in computing dance with the Dstrict a bond covonants arx!

the actuarial prosent value of plan bonofits woro stato statutos. The investmonts nre comprised 10 0% for retirod members arxj 9.3% for all other pomarity of secuntes of U. S. Government and members of the plan at January 1,1986 and 1985, related agencies arwl repurchase agrooments (collateralitod by Government secuntios). The aggregato market valuo of the Dstnct a invest.

8. DEFERRED COMPENSAfl0N PLAN rnents at December 31,1980 is $180,608.000.

The Dstrict has establishod a doforrod compen.

sation plan for all ol@ble employees. All

5. DEFERRED CHARGES contnbutions to the plan are made by the omtWoy.

cos. Dy agrooment, contnbutions arx! related The composition of doforrod chargos nt earnmqs urxlor the plan romain the property of the December 31,1000 and 1985 was as follows:

Dstrict until an omployco lonvas the Dstoct.

NOTES TO FINANCIAL STATEMENTS 18 FOR THE THREE YEARS ENDED DECEMDER 31.1986 (CONTINUED)

9. C00000lTRIENTS

10. CONTINGENT LIABILITES The Dstrict's Construction Budoet provides for Under the provisions of the Federa! Price-expenditures of approximately $88,677,000 during Anderson Act, the Dstrict and all other licensed 1967 and $45,484.000 during later years, of which nuclear power plant operators could each be approximately $42.000,000 was under contract at assessed for claims in the event of a nuclear incl.

December 31,1986, dont in amounts not to enceed $5.000.000 per it.e Dstrict has a coal supply contract which incident to a maximum of $10.000,000 in any one o(tends through 1998 with minimum future pay, calendar year, ments of $117.300.000. The Dstrict also has a The Dstrict is e aged in routine litigation inci-coal transportation contract with minimum future dental to the c uct of its business and, in the payments of $136,000.000. These contracts are opinion of its General Counsel the aggregate subject to pnce escalation adjustments.

amounts recoverable from or to the Dstrict, taking Contracts with estimated future payments of into account estimated amounts provided in the

$19.864.000 are in effect for nuclear fuel. In addi.

financial statements and insurance coverago, are lion, contracts with estimated future payments of not material.

$143.856.000 'or the furnishing of uranium enrich -

ment servi',es extend to the year 2008.

I NET RECEIPTS AND DEDT SERVICE COVERAGE FOR THE FIVE YEARS ENDED DECEMDER 31.190G (UNAUDITED) 1986 1985 1984 1983 1982 (thousands)

Oporating revonuos...................

$311,498 $303.036 $305.999 $272.847 $233,319 Operation and maintenance orpensos..........................

104.099 172,438 177,001 156.950 145.666 Paymonts in lieu of Iasos...............

10,964 10dO7 10J92 0034 7.565 1

Not oporating rovenues................

112,431 120,491 118,706 106.863 80,088 inyostmont income (1).................

546_1, _ 52 80 5,012 Sj58 5 307 1

Not receipt s..........................

$11s 282 $1,26,271 {1233 8 {1 g 2j @ 9 t

Total dobt sorvico (2)..................

8 48,188 $ 65,060 $ 60.162 $ 60,528 $ 60,470 Debt service coverago.................

1.70 1.94 2.05 1.84 1.41 til in,w. o nv.s enri a ev.umnew m.v. m m D.a n.,ve rwe e,e. #h.<ve Amw or u ri.o,e sy i.m th,v.<w th=: rwe welpf lhe Digtf til bysj trwienfipH (f howAAwrt PM 19 Ary! rhev4;f. ort fits l'84)

M) % del De@ Fierww e km ty#t thrwAdm PM f4 snit fh,*AAgn th tr#4 [hrt e euttawl oft a talordar year tiets prmi# 10 the targmtat. ort of feet rbe egdt Inie,.,4 hswhf fnset turvi prot mode 14 rvd retabt rl haji D*fA Betvue l

f

~

l 19861985 COMPARISONS 19 l

mdlions of dollars OPERATING REVENUES Nrcere 311.5

<trousana) of 306 0 twe,ene w,,

o g,,

Classkatm 1986 Total 1965 (Decrease) 23 '

227.0 Ik$**al.

$12t 541 39 0

$ t H.975 85 Gererat Service - Sma'll 105 445 33 9 97.321 83 Gerwral Serv <e - Large 57.776 18 5 55.360 44 Cnwenment ami MJuccal 7 574 24 7,388 25 j 47,j Other EWtre Utdites.

17.395 56 21 451 118 9)

(#'N' J

U D 120.6 futal tWtric flovenuen

$307.249 96 6

$298 995 28 Miscotlanerus Nwenues.

4 {49 14 4 041 5t 11_

fi

.r

&>tal Opersong Nwenues.

J111494 100 0 1101 036 28 mdhons of A4wift hours KILOWATT. HOUR SALES 9

(thousants) 6.220 6,200 Cla5& Maim 5.633 5'553 Gereval Serv (e - Sm'all

.073 447

• '8'936 34 0

1. 3 2

33 4 1 926 16 Geretal Sar w o - larga.

I.5M819 24 8 1,497.052 26 Caernnent ars! Mawopal 75 356 12 75.279

.1 4,810

• • ' E *'. toc utait..

_4gs,_5L2 66 529 759 J13 5j 5d' I'*"" 8#"

"M##

' 0 9-iM*3 3*

j mdhons of do/41rs OPERATION AND 188.1 MAINTENANCE EXPENSES 177.0 ~

Ittwsarvnt 145.7 -

Ctawltatm 135 6 s i

~

Generatituj f spense 66 2 Pischael arsi interchatujm1.

$t26 483 612

$124 458 16 4

hwer 2 339 13 15 263) 144 4 66.7 ??

• f'an=***'nn artf D*"cutm 22 942 12 2 21 m 89

&~~~

Cuntmer Acuwts 1646 41 6 950 t0 0 ry' 'j.

• phpp i,

[.

Custerner Servire amt inh smatm 2674 14 2.396 11 6 Atminntratw are Gerwai.

J,015 118_

_22)ne 13 9

..%,e,#

, i 0 ' '

blal overaim arut

~ L VI.V1991 1984.1984L Mummarv:a t er-nws.

.t ip o<n 100 0 Jt 7t41s of Irvusands of customers AvtnAGE NUMBE11 233 6 OF CUSTOMERS

• 224 5 cas*Aatm 216 rws+nt,ai 20s Sin 88 0 toi u2 19 gg g 'g Generat Ferno - Stewt 27 621 11 8 26 9tio 24 Gereral serww e - L atye 7

4,6 75 t3 20,5 other g

2 y>T

_18, n,6 l.;

196 Aver.p custm+rs

.Jn34?

,1co_g_

_n9,t rn!

_Lq.

n. h

. &M.

hm -lb.6,)$

n au H

?

%erop % twelve %fhs ir&t Dmemter

(

20 ELECTRIC SYSTEM REVENUE BONDS OUTSTANDING (in Thousands) as of December 31,1986 i

1958 ISSUE 1961 tSSUE 1966 ISSUE 1968 ISSUE 1969 ISSUE 1972 tSSUE Matmty Date irst int.

Int.

Int.

Int int.-

retruary 1 Rate Amt Rate Amt.

Rate Amt.

Rate Amt.

Rate Amt.

Rate Amt.

1987 Jie 500 3%

".000 43 1.150 4%.

2.2CD 4M 950 4 90 3.910 1908 3Ne 500 3%

1,000 4'i 1.250 4%

2.200 4 90 990 t

5 4.125 1909 3%

1.000 4's 1.400 4%

2.200 4 90 1.000 4.350 1990 3%

1.000 4's 1.425 4%

2,300 5

1,000 5.10 4.590 1991 3%

1.000 4's 1.500 4%

2.300 5

1.000 5 10 4.845 1992 4's 1.500 4%

2.300 5

1000 5 20 5,110 t993 4'i t.500 4%

2.300 1.000 5 20 5.390 1994 4's 1.500 44 2.400 5 10 1.100 5 20 6.685 1995 4'i 1.500 4%

2.400 5 10 t, t 00 5%*

6.000 1996 4

1.500 4%

2.400 5 10 t.100 5%*

6.330 1997 4%

2.400 5 10

t. t 00 5%*

6.660 1996 4

2.500 4%

1. t 00 5%*

7.045 19 %

44 1.t 00 5%*

7.430 2000 5%*

7.840 2008 S h*

8,275

+

2002 1

5%*

6.725 2003 2004 5%*

9.205 5%*

9.715 2005 5%*

10.250 2000 5%*

10.810 2007

.M 20V) 2010 2011 2012 20t3 i

2014 2015 2016 i

2011

%Aal Outstehng t 000 5.000 14 225 27.900 13 540 136.3 to (krsts hvfesmnt to 12 3t 96 6 000 12.000 10 775 17,100 1

6.460 33.690 Oronal lasue 1000 17.0M 25 000 45 000 20Orm 170.000

'kem thnwis "Dwe 19 tis Setes A (kn11%m was rehsvf=1 by the t')fif) Sets s A Iwm

21 7_.

t m

p

+

r -,q 1977 ISSUE 1977 ISSUE 1977 ISSUE i

1986 ISSUE

?y 1973 ISSUE SERIES A SERIES B SERIES C I

SERIES A" l

']

1mm j

t i

[

Pnnceal Annualued 1 Int.

trt Int Int.

Int a

Melunhoe Debt

?

1 Rate Amt.

t Rate Amt.

Rate Amt.

6 Race Amt.

Rate Amt (Feb.1)

Service f

5 10 710 5

4 40 1,300 4.80

' 2.500 4%

1.040 15.340.

46,808 J 7

5 15 745 L

4 90 1,500 4 46 -

2.860 5

1.050 i

14.010 06,887,

e 5 20 780 5

2.000 4.96 2.925 5W 1,105 f

it,700

, 86,879 x

514 820

' 5.15 2.250

}

5 3.015 a

5%

1,170

?

17,570 '

06,897 1

5 30 860

- 5.30 2.600 l

5.05 3,100 5%

1.235 18,440 86,900 1

I 5 30 905 s

5 40 3.850 5.10 3.300 6

1.310 19,386' I 86.5 6 t

4 5 40 950 5%

4,150 5.20 3.420 6%

1.400

[

20.310 46,N4 - s 5 40 1.000 7 ' 5.70

' 4.900 5 30 3,970 6%

1,595 22,516 06.808 5 60 4.500 5%

3.720 t

6%

1.495

?-

~ 21,400 86,938.j 5%*

1.050 1

5 %*

1,110 5%

5.350 5.40

'4.170 7

1.715 23,875

' 06,858 l

'1 s

5 %*

1,170 5 80 ~

7.300 5.45 4.486 7.10 1.835 t

24.970 e6.884 x ~

5 %*

1,235 5.85 7.900

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i i Omaha Public Power District 1623 Harney Omaha. Nebraska 68102 2247 402/536-4000 April 1, 1987 LIC-87-208 U. S. Nuclear Regulatory Commission Document Control Desk Washington, DC 20555

Reference:

Docket No. 50-285 Gentlemen: Attached is one (1) copy of Omaha Public Power District's 1986 annual financial report, as required by 10 CFR 50.71(b). Sincerely, R. L. Andrews Division Manager Nuclear Production RLA/me cc: LeBoeuf, Lamb, Leiby & MacRae 1333 New Hampshire Ave., N.W. Washington, DC 20036 W. A. Paulson, NRC Project Manager P. H. Harrell, NRC Senior Resident Inspector d t i \\ 4s sin ompioum.n g g ognonuonu _ -. --.....-_-.. - -.}}