ML20217H843
| ML20217H843 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 01/31/1997 |
| From: | Legan P, Von Rosenberg SAN ANTONIO, TX |
| To: | |
| Shared Package | |
| ML20217H818 | List: |
| References | |
| NUDOCS 9710170097 | |
| Download: ML20217H843 (38) | |
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I m FACTS M M YEAR I Grosi rectiue increased $ 1W.465,(no to . . . . . . $1.024.3tl,(KO l uel and og raung and maink narne npenws increawsi $ 33.638,(km to , $488.342,(F0 Ot) papnent incrtwJ $14,666(WiO to .$13?,5k'4,010 14mg-uttu deld wryke requirements on imnds increa.ed $b,2K8.(km to . . . . $ 217,3(NIMO hiasimum elet1ric estem load increawd Ib?,((0 L1 to , , ,
. 3.346.(K0 kW I
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' , $28,739 9,470 electric cushimers wete adiksi to total . , , .. ., ,
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k%11 sales increaxsl 7.1% to , ,. .. . .15,26?,505,481 L511 i
' /e 4 Geit to rnidetilld customer NT k%l'increaMsl 0 N% to . . ,, , . .64M .
i 1,0lk ps customers sete added to told . . . , , , 3(0,185 7_
MCI sales increawd 5 9"(, to ,, , ,. .... . 26,786,340 MCI ,
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. . $6.35 E Dril to rt$idelltid clistonwr NT M(1. . .. . .. . .. ..
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W fuel, purchasedMmer, and rnale gas. . .$255,055 m' .s, other operating and general expenv5, ,,, , , ,, . .161,874 m
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Matutenance of the astems, ,, , .. . 71,423 g gg;
, , $246,530 For debt requirements and other interest . . ,
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Interest <harrd to construction. 3.654
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N1 debt n quirenwnts and other interest , ,, , . .. , $h2,8'6 Papuents to the Oty of San Antonio . . . , , . 137,588 tidance Inim operauons nallable for construction . . .154.199 l
l Tool , .. . , . , . $ 1,0N,315 Gnns amount spent for replacement, impnnunents and expansion of gas and chctnc estems . . , , , , $ 172,268 Funds obtained from.
Optations . . . . , , . . ,, , , , . , , , $ 155,199 er*Pm W #'
e .., mum IWod Q nstruccon fund . , , , ,, , , , . 57,157 Impnnements and Omangencies Fund . . .(47,316)
Q ntribudons and advances in aid of construction . ,,, . 6,928 lotal ,, , . .. . . . . $ 172,268 l ._ _
PROFEE W CITY N N i
i City Public Service is one of the largest nunicipal utilities in the country, serving 528,739 electric customers throughout its I,$M square mile service area.
l l 'lhe gas system supplies 300,1H5 customers in the San Antonio urban area.
1 CPS generates power for its customers ai two coal-fired f^ and five natural gavfired plants with a combined j capacity of 3,8t5 megawatts in the San Antonio area.
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- lhe utility also owns 2H percent of the SouthTexas
- -) / Project nuclear plant on the Texas coast,which adds another 700 megawatts of capacity. 'lhe gas system is
[ comprised of 4,06H miles or gas lines through which A
natural gas is delivered to CPS customers.
The C15 goal is to produce reliable,lowrest energy to
} serve the San Antomo area,which has a populat!on of
- approximately 1.4 million. Tourism. manufacturing, construction, insurance,trtailing and medical care have been the traditional econoaile mainstays,along w th one
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of the largest concentrations of military instahations in i the U.S. In recent years, San Antonki has broadened its n economic base to include numerous firms in the fields
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of electronics. data processing, biotechnology and m '
% telemarketing.
Purchased by the City of San Antonio in 1942,the
. %. , mm %. utility is governed by a five-member lloard ofTrustees, which includes the Ma)or of San Antonio.
City Public Service had 3,427 employees as of January 31,1997.
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E SM TNE CNAIRMAN ANO SENERAL MANAGER City Public Service has completed another successful year with gmd financial results, continued low rates and gomi service provided to customers. While these successes have become somewha: routine for CPS, they certainly take on greater importance each year as changes occur in the utihty industry.
1hc Ikiard of Trustees and Management of C1% believe that the success CPS has enjoyed in the past puts the utility in a good position to meet the challenges of competition. And those challenges already have bettun in Texas.
CPS has participated in work groups addressing issues of open access. Some of thc key issues and actions at the state level include:
+ 1he Public Utility Regulatory Act of 1995 requires unrestricted use of transmission lines for wholesale transactions,inchahng use by power brokers / marketers and wholesale generators. The legislation also requires infc nxi >i, to t e provided to the Texas legislature for use in drafting future testructuring legislation.
- TheTexas Public Utility Commission adopted a new transmission rate structure, formed the Independent System Operator, initiated the 13ectronic Transmission Information Network and pre.
paw i av on potendal levels of stranded investn nt under a variety of restructuring scenarios.
- The fed My o1 :e veloping an AC interconucction between the Electric Reliability Council ot' Texas and the Southwest Power Ibol is being studied.
These actions have made changes in the whoicsale side of the electric utility industry inTexas and point to the potential for other changes,such as retail competition, Ln the future, With the 1997 Texas legislature m session,C15 is following developments carefully to assure any discussion of retail competition takes municipal utility concerns into account. CPS management suggests a cautious approach to changes on the retail side, px; tring to allow regulators and the industry time to evahiate the changes already made in wholesale ce petition before taking the next major step.
Impending change has given C1% an opportunity to assess the omanization and evaluate strengths that will continue to be important in the future. Following this assessment, C15 reorganized in four business units to allow separation of genervion from the corporate services, distribution and transmission segments of the business. Assessments will continue, helping to assure that the utility is fully prepared to continuc serving its customers' needs.
CPS will continue to build on its strengths; a financial position which is the envy of many utilities, rates that are among the lowest in the state and nation and service in a dynamic and growing community.
Additionally, CPS enjoys a unique position as both a natural gas and electric utility.
These qualities provide a sound basis for even greater achievements in the future, ccomplishments that become possible through the talents ?ad dedication of an excellent work force. The future is positive for CPS and the utility hmks forward to the challenges ahead.
& A!!? 7 Pat Irgan Arthur von Rosenberg Chairman General Manager l
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1hc secret to winning a chess match is in positioning - having the playing pieces in an advantageous arrangement. Planning, flexibility and a contingency plan are important in positioning for success. Competing in a deregulated electric utility marketplace can be like a highly <ontested chess match for even the most skilled player. City Public Service,5an Antonio's natural gas and electric utility,is analyring every move as it positions itself for competition.
1he most important piece in the game is the king.1he match revolves amund strategies for safeguarding the king and climinating the competition. In a dengulated electric utility industry, tbc customer will dictate the characteristics of pnwtucts or services and,in essence,will be the king. Customers will expect high quality pnxtucts and services at the lowest cost with added value and built in convenience.1he pmvider that p>sitions itself to fill th's need will
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win the contest for market share.
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, For more than 50 years, City public Service has responded to the needs of customers by providing reliable,quahty gas and electric services at low rates. In a deregulated i environment in which the customer can select an energy provider,C15 wul retain its customers by continuing to meet their needs. To this end,the utility will continue to use its strengths to safeguard the interests of its customers.
The 19%97 fiscal year proved to be a year of p>sitioning Cis for competition. CPS increased flexibility and began preparation for a deregulated wholesale market by restructuring the organization into core business units: Corporate Services and Finance, Customer and Distribution Services, System lingineering and F.ngineering Senices and Ihluction. Inw rates,added value through technoh>gy and multi-fuel capabilities will allow CPS to build on its past strengths, thus increasing sales potential for the future, lhe utility continues to emphasize hiring and retaining the highly skilled and experienced work force needed to out perform the competition and enhance its imrstment in the community through economic initiatives, employee donations and voluntecrism.
With the stage set and the players prepared,C15 began pattioning itself for competition. success will assure that the customer remains king and C15 becomes a grandmaster of competition as the industry moves from a regulated environment to a market <! riven one.
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t TE A REX 15tE Stt4NilATitRAL STROCT58E in chess,a skilled player will adyn nce hh defenshe strategy by balancing the configuration of his pieces with the conditions of the game. During the past ibcal year, CPS restructured its organization into business units to comply with new open transmission access rules and to balance the organiza-tion with anticipated markets, creating a more flexible anJ advantageous position fr,m which to serve customers. Cl3 established an adminhtration core and three business units,each of which can generatt resenue and achieve greater efficiencies to enhance the financial management of CPS. In addition, CPS redesigned budgeting and accounting systems for the four business units.
Jamic Rochelle heads Corporate Services and Finance, which pmvides core corporate services to the other business t. nits. The uma encompasses the Financial Senices,Irgal Services, Administrative Services,Iluman Resources, Work Force Fuhey and Planning,Information and Communication Services and Materials Management departments, as well as the Internal Auditing and Governmental Affairs divisions and the Economic Development Section. The main objective of the administrative core is to assist the other business units and the utility as a whole in remaining competitive.
Internally,the business unit enhances the competitive stance of Cl3 by providing support in unbundling services and prices, implementing revenue enhancement pmgrams and assisting in cost control strategie>. Externally, Corporate Senices and Finance personnel participate in the formulation of national and state policy on utility industry deregulation to assure CI5 has a voice.
Assistant General Manager for Customer and Distribution Services Ken Fiedler now oversees the Distribution,Custon . Services,Special Distribution Projects and Public Relations and Marketing departments. This unit serves as the utility's point of contact with customers and seeks to satisfy the customer by delivering gas and electric services in a safe, reliable and cost <ffective manner. This function involves not only building, maintaining and operating the gas and electric distribution systems but also assuring that CPS provides energy services desired by customers. The unit will aggressively market CPS services and secure multi-year contractual commitments from existing and future customers.
Engineering was consolidated into System Engineering and Engineering Services headed by Assistant General ManagerJoe Trevino, lia areas of responsibility include Gas, Transmission and Distribution Engineering and Field Administration. This unit plans the development of the electric and gas systems, constructs and maintains electric transmission systems, manages field contracts and provides the company with cost <ffective fleet vehicle services.
Senior Manager for Production Ildl Gunst heads the unit responsible for generating electricity, including both wholesale off-system power marketing and fuel acquisition. Mr. Gunst oversees the Production, Generation Control and Marketing and Fuels departments,in addition to the Nuclear Division. This business unit purchases fuch, operates and maintains CPS power plants in compliance with emironmentally sound practices and buys and sells wholesale bulk power when economically beneficial.
Each business unit is initiating changes which allow CPS to better serve its market niche and give both the individual business units and the integrated utility a competitive edge. For example,in
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Customer and Distribution Senices,Cl4 twgan restructuring the Distribution Department to better wrve customers. Cl4 decentrallied certam planning functions by moving centrally located commercial and residential sales representatives to one of its three centers serving C15 customers. Ily the end of 1997,CI5 will convert its three centers to full +ervice, onc+ top facilities which will coordinate directly with customers needing energy services. l'ach service center,under the dirrction of a superintendent,will design and construct new facilities, maintain electric distribution service and manage the awociated costs and revenues. lly simplifying work and appn val processes and by climinating excessive specialization, the one-stop concept is designed to Imth reduce costs and shorten the leng'i of most projects fn>m weeks to days.
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l The City Public Sere ice neanagernent tearn collectturly has I$0 Svars of utility experience. Frvon left to righ* are:13/11 Gunst. Senior Alanagerfor IMuluction; Ken llettles: Assistant General Afanagerf>r Customer and IMsuribution Services;)arnie Rochelle, Assistant General Slanagerfor Corpotute Sers ices and Finance; Arthur unn Rosenberg, General afanager:andJoe Tret trk Assistant General blanagerfior Systern Engineering and I:ngineering Services.
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1 ABVANTAGE TR005tN LOW RATES Businesses,like chess players, build on advantages and often utilire maneusers which have proven effective in the past. In a market <triven environment, competitive pricing will be the most effective advantage.
Cl3 has a history of providing low <ost and reliable natural gas and electric service. During the 199697 fiscal year Cl4 customers paid some of the lowest rates in the state and the nation. The CPS residential gas and electric bill ranked second lowest among the 20 largest cities in the country.
The average monthly electric bill for 1,000 kilowatts of electricity in majorTexas cities during the year was $77.14,while C15 customers paid $63.63 C15 has twen able to maintain low rates due to its favorable fuel prices, low production costs at its power plants and sound financial management. The CPS fuel diversification program, which allows the utility to use coal, natural gas and nuclear fuel, helped to maintain low fuel costs.
Record performance levels in 1996 at the SouthTeus Project nuclear plant helped keep fuct costs and therefore bills low. The STP generated .dv>ut 20.7 billion net kilowatt hours of electricity for the 1996 calendar year, placing it among the top producing nuclear plants. Unit 2 ranked second while Unit 1 placed third among 109 operating nuclear plants in the United States. Worldwide, Unit 2 and Unit i placed sixth and seventh, respectively,when compared to the electrical genera-tion of 435 nuclear plants.
The utility alm benefited from good performance at its coal-fired plants. In a report prepared by the Utility Data Institute,theJ.T Decly Plan, ranked nineteenth for its five-year production cost Realdengel Ses and Doctric B51s for the 20 Largest ILS. Cities Averses for heelve 49enths Endles lemmary 1997 Based se 5 lect and 1.000 IGRAI wrc 20Q . -
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among the 700 U.S.stcanwiectric power plants. The plant averaged $13.08 per net megawatt hour through 1995 and was the onlyTexas plant to rank among the top twenty. UDI included fuel costs la the calculation of production costs.
Improvements at the J.T. Decly Power Plant during the year included water lances in the power plant imiler, chemical cleaning of the turbine and an on-line performance monitoring system in the control room. 'the utility installed water lances,high pressure water blasting systems used to remove ash f rom the boiler wall, to help maintain the heat transfer efficiency of the boiler. The installation of water lances significantly decreased the number of load reductions for destag.
ging at the Decly Plant.
As a result of chemically cleaning the high pressure turbine,an essential component in the pro 'uction of electricity, CPS regained 40 megawatts of capacity on each of the units at theJ.T.Deely Plant. *lhis process, unique to the power plant industry, has helped keep the plant capacity factor at an all time high.
Another improvement at the Deely Plant included an on-line performance monitoring system for the two units. 'Ihrough a software program CPS control room operators can monitor the plant heat rate in the steam generator cycle and then make efficiency adjustments which lower the tuel cost by using less coal in the pnxtuction of electricity.
Though not included in the UDI Report,the J. K. Spruce Plant, which begar commercial operation in November 1992, has shown good performance. Acconting to statistics compiled by CPS, the Spruce Plant averaged 512A3 per megawatt hour during three years and two months of operation through 1995.
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1 NANCE PERf0RMANCE ANR SERVICE THROUSN TECHNet08Y The utilization of playing picces or
- resources"can determMe the outcome of a chess game. In a deregulated market,the use of technology will enhance the utilitfs resources and competithe viabill:y. CIS has historically utilized technology to manage the delbery of gas and electric services.
Keeping pace with innovation,the utility continues to pursue the use of technology as a means of improving service reliability for customers while adding value to service.
During the 199697 fiscal 3ear,C15 continued la upgrade its cc umunications infrastructure, which will enhance internal operations and allow the utility to communicate directly with its customers.
CI5 communications infrastructure includes the state of the-art fiber optics backlmne and the application of wireless communications and computer technology at all electric substations, power plants and office facilitiet A total of 3"'7 miles of single mode, liber optic cable will make up the nacklmne of the communica-tions infrastructure. Ily year end, CPS had installed nearly 37 percent,or 140 mikn.of the fiber optic network, which will be operational in 199R l'ther optics and computer technohrty will allow CIS to more effectively manage the electric and gas distribution systems. Presently,the C15 central comrol features extend to the electric generation and transmission s) stet". In the future,the expanded conuuunication facihties will provide for similar conttut features within the electric distribution infrastructure. This new capabihty will facihtate reduced system losses,more reliable setsice and improved long-term utilization of distribution facilities, creating the opportunity to defer some capital investment on the Cl3 electric system. Communication and computer technologies also will offer M nost limitless possibdities in electronic information transfer,such as real-time product pricing, automated meter reading and customer outage information. Technical and business management tools available to Cl3 on its information super highway will include numerous high speed protective relaying channels, computer networks and data exchange, security video and voice applications.
Since it is impractical to use fiber to reach all customers, wireless technology also will play a vital role in the CPS communications infrastructure. During the past fiscal year, CPS added 30 new monopole communication towers to its existing 26 towers. In the future, CPS will use the towers as elements within the widespread communications network that will allow continual direct interface with the customer and will provide the communications infrastructure needed for wider application of distribution automation. This communications platform will enable CPS to utilize two way communications with any device or customer in its service territory. As an additional benefit to the community,other communications service providers will be able to lease space for their equipment on Cl3 towers, creating a revenue stream and aiding the City of San Antonio by reducing sisual clutter across the city. In accordance with a recently-passed City ordinance, CPS is providing sufficient capacity to offset the need for at least 115 additional towers.
Ci 3 initiated a pilot program which will use the new communications infrastructure to test customer applications through the $11 million electric distribution automation pilot project,)ointly sponsored by C15 and the ucctric Power Research Institute. During 199697, CPS selected sendors to proside the computer system and distribution equipment which will allow Cl3 to fully monitor and control y two distribution feeder circuits in cast llexar County via the expanded C15 fiber optic network. The
datribution automation equipment is scheduled to be instalkd by the siammer of 1997, allowing Cl3 the capability of monitoring and controlling the distribution circuits remotely. Icatures will include control of various distribution system l devices, voltage and power factor tuonitoring and customer outage detection. Alw in the not so distant future, Cl3 will set up residential and commercial customer sites which will receive automated energy services, such as electronic meter reading, current billing infornration, energy usage monitoring of residential appliances and energy conservation guidance through a customer interface.
CI5 also is using the communications infrastructure to improve customer service. The Integrated Mobile Data Communications System, which uses satellite global positioning,is a prime example of the expanded application of wireless technology. The project will largely automate the dispatch of field personnel responding to customer needs and will enhance crew efficiency and safety. Presently, crews receive broadcast voicerommunicated orders from the Cl3
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d Karl t!rbanski, Tester III, inspectsfiber optic cable on the siistriburton rack which sernes as a terminalfor the glass strands which transferinformation betueen t'PSfactitties. f
control center and writteti orders from the service centers. Le stateofahe. art pMeet consists of a series of integrated mobile work force management programs which comider order scheduling, work load distribution and Cl3 customer service needs. Field staff in vehicles will receive text and data field senice orders on vehicle-mounted screens utilizing radio technology broadcast from the array of communications towers. De system will route available p(rsonnel on the basis of customer need and job priority, lob skill requirements, existing work loads and the proximity of the crew to the job.
Cost savings in the malmenance of Cl4 facilities and in response to customer service needs will be achieved through better utilization of the C15 work force and equipment. The system will facilitate a" dispatched-from-home" work force in some cases,further eliminating significant administrative and travel costs. CPS anticipates savings of $1.4 million per
} ear through the application of this technology.
During the 19(X>97 fiscal year,Cl3 selected a vendor for the Mobile Data Communications System.11y the second quarter of 1997,the system will be installed in 150 CI5 vehicles and will be phased into 100 more vehicles shortly thereafter.
Technology alm provided added conveniences for customers and at the same time increased productivity for the utility.
A year ago, customers began obtaining CPS account information and reporting outages through the automated telephone answering system One service provides access to basic customer billing information,as well as office hours and locations. The second service allows customers to report outages by eliciting responses from callers and recording utilitv problems.
During the 199697 fiscal year,C15 added a new feature to the automated telephone answering system. Customs rs can now request extra time to pay their bills. The automated credit extension line handled an average of approximately 14,%0 calls per month, freeing the customer service representatives to answer more complex customer inquiries.
Available in English and Spanish 24-hours-a< lay,the automated telephone answering system processed 372,574 calls during the 199697 fiscal year, equivalent to 21 percent ;
of the total number of calls answered.
Another avenue for communicating with customers is the Cl3 web site on the internet. Incal students began accessing information about the gas and electric systems,while customers learned more about CPS services, energy conservation and gas and electric safety. The CPS web site is located at http://wwwci. sat.tx.us/ cps.
Mike Gonralez,Journeyrnan Linernan, serifies the next address u bers be u ill restors fmust By the end of 1997, CPS u til use 250 Mobile IMta Cornununications Systerns, like the one pictured hers, to autornatically dispatchfield personnel,
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in the electric utility industry,wime electric utilities have prepared for competition by acquiring a gas utility. By providing both electricity and natural gas,Clas already has both that advantage and the longer term knowledge and experience in the joint development of gas and electric infrastructure, l'or more than 50 years, City Public Service has played a Ley role in providing the infrastructure for a growing city. During the fiscal year, CPS added 9,470 electric and 1,0l8 gas customers. Ily 2021, the population of Ilexar County is expected to increase 45 percent,from approximately 1.33 million currently to 1.93 million, resulting in about 265,000 new households.
To meet the continued growth in the San Antonio metropolitan area and to offer customers the I
flexibility of future energy choices, CPS continues to expand the gas system. As of January 31,1997, CPS completed approximately 24 percent of the $12.5 million second outer gas loop which will encircle San Antonio by the year 2000. This new component of the gas distribution system will extend service to areas with substantial gas market growth potential. The eastern leg of the new kx>p connects the north central area to northeast San Antonio while the western leg will join northeast San Antonio with the western part of the city.
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Ikgle llaese, Gas amt General Construction inspector; monitors the installation of a 16tnch gas main part of the secomi tmter loop u bich will encirste San Antonio by lit) war ZXX), making both gas ami eles tric sers ice aussilable in ; north flexar Cemnty f a
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( A highly + killed chess player is known as a
- master? As competition becomes commonplace in the electric utility industry, highly + killed employees will play a ma}or role in the determination of utility
- masters." At C15,cflicient and conscientious employees are the fotmdation for the 54 years of demonstrated success the utility has experienced in .erving the San Antonio area. Excellent and reliable gas and electric service and low rates result from the efforts of a talented and diligent work force.
in a market-based environment, CPS employees will continue to be key players. The work force understands customer expectations and needs and is in a position to respond well to the interests of customers.
With an attrition rate of approximately 3.5 percent, CPS has a stable work force with an average of 14 years of utility experience, in addition, employees are well educated,with to percent holding undergraduate and graduate degrees.
The CPS management staff brings a wealth of knowledge and an average of 22 years of utility experience, CPS management is recognized by its peers an<l acknowledged by the top rating agencies in the country as among the best in the utility industry.
CPS considers training essential to the competitive viability of the organization. The Training Didslon develops classes to focus on management and employee needs, organizational and utility industry changes and training trends. A comprehensive training program keeps employees abreast of new technology and work processes which better serve customers. During the 1996 97 fiscal year, CPS offered 71 courses on writing. supervisory skills, customer service and compu*er skals to 920 employees. In addition,374 employees in power plant instrumentation and maintenance,erwironmental hazards and safety,as well as electric and gas operations completed 22 training courses.
CPS also encourages emplo)ees to pursue higher education through the CPS tuition reimbursement program. The utility reimburses students who successfully complete courses which will help them on the job. During the thcal year,98 employees registered in undergraduate courses,while 35 enrolled in graduate studies. During the last live years,70 employees received their degrees through the reimbursement program.
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Stateo Camaryn instrument Slaintenance Trainer: demonstmtes inmer plant instrurnent contnds toJoe beente, Barry litdes aat!
l Lonnie Benson. InstrumentJourneymen,11w 1+rutuction ikpartment uses training to upgrade the skills ofits e mpic9tes.
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TAY CitSE TO TNE CBST8MER8 ANO CSMMONITY Sk.illful chess players also nnd it beneficial to have key pieces guard the king since
- Ling safety
- is one of the primary elements of chess. In a competitive envinmment,a close relationship with the customer and,by extemion,the community pays dividends. During its 54 years as a municipal utility,Clas has made community investment a top priority, serving as a catalyst for economic development and for improving the quality of life in San Antonio.
C1% also provides an added benefit to citizens of han Antonio through payments to the City of San Antonio. Fach year,CI5 transfers 14 percent ofits grms revenues to the City of San Antonio general fund which pays for City services. The $137.6 million payment for the 199697 nscal year represents the largest source of income for the City of han Antonio,approximately one third of the City's general fund. Since 1942, CPS has contributed more than $2 billion to the municipal government with the City's equity in the utility standing at $1.8 billion.
1 During the past year,the close relationship between CPS and its customers tramlated into an added tmnus. Through an out<>f<ourt settlement with llouston 1.ighting & Power,IllAP guaranteed CI5
$225 mi!! ion in cash and operational savings during a ten-year period. The claims arose from cost overruns during the construction of tne southTexas Project nuclear plant near liay City and the shut down of the plant during 1993-94.
The settlement included $75 million in cash which the CIS lioaal of Trustees voted to return to CPS customers who had paid higher utility bills as a result of the STP outage in 199.&94. After paying $11 million in litigation-related expenses,CI5 distributed $64 million to more than ilI,tMx) utihty customers. Customers received approximately 63 percent of theirJuly cycle electric bill.
Thme with current accounts received a check,while customers who owed the utility received a cretht. CPS mailed approximately 427,tKK) checks ranging Imm $6 to $125,tKK) with the averagt totaling $76. Some N6,(xx) customers received credit to their accounts.
Customers benented from lower energy costs arising out of the joint operation of Cl3 end tilAP power plants. CPS will xccive $150 million during the next 10 years from savings resulting from using the most cost effective of each utility's power plants. The settlement stipulates that yearly cumulative savings must be at least $10 million,with tilAP making up any difference in cash.
Joint operation of the two utilities' power plants began on June 25,1996.
CPS continued to work closely with the San Antonio Economic Development Foundation to attract new industry to San Antonio. During the fiscal year,19 companies announced they would locate in the Alamo City, bringing approximately 2 900 jobs. The larger ones include Unihase Technology, Inc., which specializes in data processing and will employ 900 employees, and ilA11N Technology Corp.,which prints instant lottery tickets,with 400 employees. Pacificare,a regional insurance service center with 320 employees,and Norwest flanks Regional Operations Center,a financial institution with 300 employees,aho estabhshed offices in San Antonio.
CPS contributes to the local economy by purchasing services and prmlucts from San Antonio ,
companies. The CPS Small Ilusiness Office increased bidding by kical firms through outreach 3
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cfforts. For the accond consecutive ) ear, the United States Small ilusiness Administration awarded C15 the highest ratMg among utilities for increased participation of snull and dindvantaged businesses.
l Cl3 employees also helped improve the totality of life whh contributions to United Way,an organization which funds human service agencies benefiting one fourth of the poptdation in ikxar County. More than H5 percent of the active Cl3 work force and i19 Cl3 retirees contributed to the Cl3 United Way campaign which raised $466,345. Under the
- Volunteers in Public Service program,C15 employees conated 14.0% hours and raised about $ 15,%0 for non-profit
( organizations and community projects.
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Angie .%dinas, Am>unting Gerk I and tblunteer in hoblic Service representattsv. chats n'ith senior citizen alts. Guadalupe Galindo at the I:Ider flouse of Cenim del Eksvria, a United tray ageruy Galindo is bolding tun of the 18 sbau s Salinas cmchetedfor senior citizens at the adult day center ?
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e usion As Cl3 mmes its pieces forward on the chess board,the electric utility industry will continue to define itself With w holesale competition instituted in 1996 and retail comgwtition on the horizon, I'
the rtdes of the game have cha sged and will require new strategies. C15 has positioned itwlf for competition in a derrgulated market and will continue to watch developments in legislation affecting the industry. As the utility analyzes each move,it will remain flexihte and take advantages of opportunities that result from changes. The utthty's objective in this hightv<omgwtitive match will be to protect the interests of its customers. In the end,the most valuable piece on the chess Imard, the customer, will reap the benefits of low rates, quality gas and electric service and community investment for years to come.
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6 ers SPERATIONAl ANS flNANClAl REVIEW IOR 1998-91 City Public Senice achieved record gross revenue and electric sales during the ELECTRIC SALES 199(>97 fiscal year, which also marked continued nnancial strength and low rates for the utility's customers. In line with management obbetives to reduce costs,
,, . operating expenses were less than pmjected and lower than the previous year.
j gNq construction spending was slightly more than last ) car but was reduced from the projection through careful planning and timing for major projects. Costs of gas it for generation of ekctricity and resale were greater than a year ago and also somewhat above projections,due to the national trend in natural gas prices throughout the year. Gas sales for the year were the highest since the fhcal year ending January 1990.
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CPS assets totaled $ 4 6 billion which reflects that the utihty is financially strong.
h"g $g[]% ne City of San Antonio's $1.8 billion equit) centinued to grow, rising $72 million from the prior year. The record gross revenue for 19(X>97 resulted in a record payment of $137 million to the City's general fund. CPS has provided more than
$2 billion in payments and services to the City of San Antonio since 1942 while maintaining rates that are among the lowest in the state and the nation. During this time, CPS also has maintained a very sound financial condition and high credit ratings.
GAS SALES m mon ucr ne year's successes included financial benefits from settling legal action against
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y llouston IJghting & Power Co.(IllAP) concerning mismanagement of the South TexasProjectnuclearplantandcostoverrunsduringitsconstruction.The settlement included $75 million in cash and the guarantee of at least $150 million ao in savings during the next 10 years by jointly dispatching electricity from the two "l
l ,lcI l utilities' generating plants. CPS distributed $64 million of the cash proceeds to customers and used $1I million to pay litigation expenws. According to the agreement, CPS will recche 90 percent of the savings resulting from greater efficiencies and lower overall fuel costs from joint operations. During fiscal 1996 97, CPS received $17.5 million in benefits from the joint operating agreement. In April 1996, CPS rebated a small portion of these savings to its customers through lower fuel costs. All remaining joint operations savings have been set aside pending an evahiation and review of possible future uses by the CPS Doard ofTrustees.
SPEESTIt#8 The SouthTexas Project nucNar plant.of which CPS is a 28 percent owner, performed at record levels in 199(>97. CPS received 36 6 percent of its ELECTRIC GENERATION & PURCHASED POWER gerv 'ation from the nuclear plant. STP operating expenses,while essentially as g > wn a l' ted for 199697,were at a lower level than the prior year.since only one
_seling was conducted.
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Other STP achievements during 1996 inchide:
E q.g 3 _ Unit I set a world record of 22.6 days for the briefest refueling for a 14.3 pressurized water reactor plant.
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n _ New records were established for the number of consecutive days on line
- ' t 13.5 with 309 days for Unit 2 and 205 days for Unit 1.
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_ ne capacity factors were 93 percent and 95 percent,respectively,for y 3 Unit I and Unit 2.
mutu coat cas. cat svwsw mm STP received the highest rating awarded by the Institute of Nuclear Ibwer Operations, an organization dedicated to promoting excellence in nuclear
- Excludes lomt system operations generation plant operations.
_ The plant received superior marks in maintenance and plant support and Fiscal Years Ending January 31 gomi marks in operations and engineering in the 1996 Nuclear Regulatory Commission's Standard Assessment of Licensee Performance.
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GROSS REVENUE 1he C15 coal-fired units abo performed well, producing 50 percent of the
- * * * *
- util+/s generrtion. The average cost for coal was $10.15 per megawatt hour cmnpared to $11.38 the previous year.1he overall average cost for generation f ." *
> 1,024 fuel and purchased power was $10.83 per megawatt hour, a small increase for m7 I] 022 W his2 C rs jm915 the year.
Im YAE88CZA 893 During 1996,C15 set an hourly peak demand record of 3,356 megawatts and a ms *h_,.M y_ d 24-hour usage record of 62,674 megawatt hours. The hourly peak demand record
, qmitigegg set on June 19 exceeded the 1995 record by 3.3 percent,while the 24-hour f --
- 847 record set on June 20 represented a 3 percent increase from the preuous record.
. im yCd.NEn A winter hourly peak demand of 2,495 megawatts set on January 13,1997,
- u. m on m.mpw.tmo exceeded last winter's record by H.3 percent.
N,mm n.wnu. nennu.
REVEME AND SMES Grow revcnue set an all-time record, reaching raore than $1 billion. The 12 percent increase from last year vw riue primarily to greater fuel and gas cost recowries and increased sales fo< - -h the electric and gas systems. I'.lectric fuel recoveries rose $23.6 million,wtN _ cost recoveries advanced $33.1 million; 4 t price of gas. lacreased sales GROSS REVENUE AND APPLICATION OF REVENUE both were affected by the overall lo. -
m mons o'Dokvs accounted for $40.4 million of the electric revenue and $2.3 milhon of the gas revenue.
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agggggg; 57 915 Electric sales increased 7.1 percent, reaching 15 billion kilowatt hours and setting a new record. C15 served an average of 9.470 more electric customers f 7 893 than the previous year. Usage per customer increased by 4.6 percent,as ms 'h2 temperatures during the summer of 1996 were much warmer than in the hgy g 831 previous year. For the second consecutive year,C15 reported strong off+ystem sales to otherTexas utilities and power marketers. Gas sales increased 5,9 f1 gnyf;
- 647 percent due to a colder than normal winter,and the overall average usage per customer increased 5.3 percent.
arms o.ta cry nmni ememe nequw.m.nes Pennen Amu. ror reum a etner int.<nt consinaan CPS derived 85 percent of its operating revenue from electric sales and approximately 15 percent from the gas system. Average revenue of 5.6 cents per kilowatt hour and $5.49 per MCF were 1.8 percent and 28.9 percent higher, n spectivel), than last Scar as a result of higher fuct and resale gas prices. Other sources of revenue included interest on investments and miscellaneous income which contributed $35 million *o gmss revenue, en increase of $6 million.
PER Omon.A. c o ,.TING & MAINTENANCE EXPENSES EKPENSES Operating and maintenance expenses for the fiscal year totaled $488.4 million,a 1987 "Esell& M F ; 488 net increase of 533.6 million from the previous Sear. Generation fuel and gas for resale cost $255.1 million,$51.8 million more than last year,due to higher unit
, aggg prices and more usage. Non-fuel operating and maintenance expenses were $7.4 f' ; 448 million less than last year as a result of management's commitment to cost 1ess % #
containment as one of the utility's strategic initiatists.
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- 515 teu '%2e052. SouthTexas Project maintenance and operating costs, excluding fuel,were $79.4
,,,; million. The $10.8 million decline in spending resulted from completion of one k refueling outage in 1996 compared with two refueling outages the previous > car.
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Fiscal Years Ending January 3t y
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CONSTR8CileN HNANCING Construction expenditures of During January 1997,the last Old Series ikmd pa> ments were made and $16.6
$172.1 million incerased $4.8 million in reserve fund assets were returned to CPS by the Trustee. These assets million from last year. Capital were transferred to the New Series ikmd Reserse Fund to reduce future principal projects included additions to lxith P3)ments.1his year, CPS did not have any new long- or short-term debt o'ferings. '
the gas and electric distribution CIS mntinued to reduce its outstanding debt by redeeming $17.3 million of sptems to support customer commercial paper principal and $88,7 million of Imnd principal.
growth and continued building of the fiber optic network. Revenue m continues to maintain the highly favorable AA+ Imnd rating by Iitch from operations provided 63 Investors Service Aal Imnd rating by Moody's Investor Services and AA bond percent of the fundmg for rating by Standard & lbor's Corporatiott The commercial paper pnigram construction. lhe Nosemtwr twi continues to carry the highest ratings issued for v9riable rate debt by all three bond issue funds financed 33 rating agencies. These ratings place C15 among the highest rated municipal percent of the construction costs, utilities in the country, which resuhs in lower financing costs to C15 and its C"**"*Cf 5-and the remainder came from customer contributions.
In their review of competitivencss based on management's strategic plam.:ng capabliities and legal and regulatory issues, twth Fitch and Standard and INior's have ranked Ch among the most competitive. The Fitch Competitive Indicator FUNDING OF CAPITAL PROJECTS placed m thini among 86 pubhc twer and investor owned utihties in the mam.or posa nation. In the Standard & lbor's liusiness position Indicator rating,CIS rmked fifth among 62 public power utilities. In addition, C15 was classified as m7 idDetIEEE omew at above average" and ranked the best in this category.
,, 2RtW2In3L11L IUTURE PLANS I'2ag -
4 125 C15 continues to rnake a concerted effort to sign long term contracts with its largest customers, including its municipal customers. As the electric utlhty
<1es4 El industry is deregulated,large customer retention and tuarketing efforts will g;g7 E n o potn ong he uWs strate $ hthes.
im epe customer comn=cw son
- C15 continues to focus on customer needs and improved service through an C*""'"'""*
- automated 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> telephone $ptem, quicker response to inquiries and outages, additional community 3ervice programs,increa. sing use of fiber optics technology and aesthetically pleasing construction features.
CPS expects to fund future capital needs t ith greater use of fixed and variab!c mte debt.although some construction will continue to be funded by internally generated funds. In the spring of 1997,CIS expects to begin securing bond financing to fund construction requirements for the next two years. Included CAPITAL EXPENDITURES with the new financing will be refunding bonds that will add to the $ RS million msons or Dean in interest savings already realized since 1985 through refinancing strategies.
- 172 1s97 N j ggg g g g As C15 continues working to maintain its cost competitisenen,the utility also f W 167 is positioning itself to continue providing the highest quality service to its im *CE1M EEC)R customers. Throughout the company, employees continue to remain focused on ms k . 151 customers while taking on additional responsihihties as the overall number of BXhY employees is declining This strong commitment to the communities and the
- 3. engg people served will continue to be emphasized as the industry moves into the f @' 4 172 competitive marketplace.
1993 gdMlE!AD..
O D* e t $iP J.K. Spruce Fiscal Years Endng January 31 8
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}ers January 31, ASSETS 1997 1996 (in thmsands) trillJIY PIANT, at cost (Notes 1. 3, and 9):
Plant in wrvice -
13cetrie. . . .... . . .. . . $ 4,544,452 $ 4,427,212 Gas. . . . .. .. . .. . .. , , 322,611 302,619 General . ... .. . . .. . 133,353 127.682 Total plant in wrvice . . ..... . ..... . . 5,000,416 4.H57.513 Imaccumulated depreciation . . . . .. . .. .. . 1,402,9"1 1.269.710 Plant in service, net. . . . . . ... . 3,% i,465 3,5N7.H03 Construction work in progress . . .. . . . . 182,958 175.lM duclear fuel.less accumulated amortizaGon of $143,760 in 1997 and
$I16,298 in 1996. . . . .. ... . . 54,256 60.229 Ileid for future use . ... . .. . ... . . 31,384 303M1 Utility plant, net ,. ... .. , 3,866.063 3.H53,%6 RESTRICTED LASil AND INVESTMENTS (Notes I, 2, J, and 4):
llond ccmtruction fund . ... . .. . 51,735 108.h91 Ikired fund current requirements -
Old scries . . . .... .. . , .... . .. . 0 933 New series .. . . . .. 30 23 I
ikind reserw -
Old series , ...... . . .., ,, . .. .. 0 16,639 New series . .. . . ,
215.432 199.205 Improvemer.ts and continget.cies fuad. . . 134,572 93.305 Overhead conversion fund . .... .. 27,CIO 20.851 CPS joint operations savings fund Giote 9). . 15,626 0 Other. . . . ... 18.610 18.357 Total restricted cash and investments . . . . 463,045 458.2m CURRENT ASSETS:
Cash and temporary investments (Notes 1 and 2) . . 41.064 30,6 %
Cash restricted for customer ervice deposits papble 26,122 25,776 Customer accounts receivable,less allowance for doubtful accounts of $2,524 in 1997 and $2,431 in 1996 . . . . .. 69,661 54,424 Other receivables , . . . . ...... . 13,804 12,383 Inventories and supplies,at average cost -
Materials and supplies . .. .. .,, 58.429 57,611 Fuel stock. . .. . . 29,877 32,761 Prepayments and other. , , .. . 7.881 _
5.336 Total curxnt assets. .. . .. 246,838 218.981 y DEFERRED DElllTS AND UriiER (Notn 1 arul 6) . 38,838 46.203 TOTAL , . . $ 4,614,7M $ 4,*76.9M Tiw accornfunnying notes arv an integrso!fxm of thesefinancialstaternents
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January 31, EQUITY AND IJABILITIES 1997 1996 (in thottsands)
LONG-TERM D13tT: '
Revenue txinds (Notes 1,,3, and 4) -
New series , , . . .,,, , ,,, , .. , ,, , . , , . . . . . . . $ 2.694,770 $ 2,787,915 Deductions -
Unamortired discount on new series txinds. . . . . (67,168) (72,577)
Unamortized discount on capital appreciation txinds. (236,864)- (254,7'H)
Unamortised costs of lxind reacquisition , . . . ,,. (166,386) (183.568)
Revenue Ixinds, net , ,,,,,.. ., ...., ,,. 2,224,352 2,270,991 '
Commercial paper (Note 5) , .. ,, ... .. ..,..... 250,800 277 H00 Inng-term debt, net . . , ,,.. . . . ... . 2,475,152 2,554,792 '
EQUITY; 4
Appropriated retained earnings (Note 3) -
Ik>nd fund current requirements -
Old series, . . . . . . . ... ,
0
, ,,,, ... 933 F New series. .. .. , . ........... .. 30 23-Ikmd reserve - .
Old scries. ........... ,
... .. ... O lu.639 !'
New series , , .. ., ,. . ... .. 162,974 146,747 Improvements and contingencies fund . . . ,,, . . , 134,$h 93,305 Overhead conversion fund . , ,. .. ., ,, 27,040 20 H5I
- Total.ppropriated trtained earnings ,,,. .. . 324,616 278,498 Reinvested rarnmgs, ,, , .. .., , 1.509,367 1,4H2,H32 Total equity .,, .. , ,,.. . , 1,833,983 1,761.330 CURRENT IJAllllJTIES:
- Current maturities of revenue bonds (Note 4). . . . , , ... 93,145 H8,700
- Current portion of commercial papet redemption (Note 5). _ 27,000 17,300 Acco mts payable and accrued liabilities . , , , ,,,, 83,459 72,103 Customer service deposits, . .. , ,. . .. 26,122 25,"76 Total current liabilities . .. , ,. . 229,726 203,H79 DEFERRED CREDffS AND OrilER (Note 1):
Customer adunces for construction , ,, .. . . 12,149 11,669 Other . ..... . . .
. . .. . . , 63,774 45.294 Total deferred credits and other , , .. .. . 75.923 50,903 COMMITMENTS AND CONTINGENCIES (Notes J. 6, 7,9, and 10) .
TOTAL. . . ... . . . ,. . $ 4.614.784 -$ 4.576,964 The acctnnpanying notes arv an Integralpart of thesefinancialstatements
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. 3 ers _
Years EndedJanuary 31, 1997 1996 (in thousands) llOND CURRENT REQUIREMEN13,old series beds:
Niance,beginning of year, , , , ...... . .,, 8 933 $ h13 Additions - Transfer to pi ide for debt service. . . . . ... . , , ,
14,445 14,678 Deductions - Payms. of old . cries principal and interest with reserve transfers. .. . . ... . .... (14,445) (l4,55)
Deductic,s -Transfer remaining funds to CPS , , (933) O tblance, eno year. ,, , ,,. . ... .,. . . $ 0 $ 933 IlOND RESIME,old series bonds:
llalance, beg ning of year . . . , , .. . .. ... . $ 16,639 $ 16,725 Additions - Allocate carnings to reserve ... . 947 948 Ivductions - Fu. current debt service requirements . (1,034) (t,034)
Deductions -Unsfer of remaining assets to new series reserve (16,552) o llalance,end of year . . . .. .... $ 0 $ 16.639 IlONI) CURRENT REQUIREMENTS, new series bonds:
11a1. M,beginning of year, , , ,,, . .. $ 23 $ 17 ,
Additions - From impovements and contingencies fund for debt service 203,788 ;96,335 Deductions - Payment of new series principal and interest . . .. . (203,781) jl96329) 11alance,end of year. , , ,. . . $ 30 5 23 IlOND RESERVE,new series bonds:
llalance,beginning of year, ,, , . $ 146,747 $ 147,368 Additions - Allocate earnings to reserve. .. . 12,126 12.158 Additions -Transfer from old series rmrve , 16,552 0 4 Deductions - For current debt service requirements . , (12,451), (12."9)
Mlance,end of year. . . , , $ 162.974, $ l eH' COMMERCIAL PAPER REDEMl'FION FUND:
llalance, beginning of year. . . . , $ 0 $ 56 Additions - From improvements and contingencies fund for principal and interest . , , .. . . . 22.975 23,746 Deductions - Payment of principal and interest . . . . (22,975) (23.802) 11alance,end of year. . . . . $ 0 $ 0 OVER! LEAD CONVERSION FUND:
llalance,beginning of year. . ., , $ 20,851 $ 14.150 Additions - From improvements and contingencies fund . 7,563 6,701 Deductions - Payments from overhead conversion fund . (1,374) 0
. Italance,end of year. . . .. $ 27,040 $ 20Mi The occurnpsonying notes arv an integrtdfutrt of thesef!nancialstaternents.
- ya , _
Years Ended January 31, 1997 1996 fin thousands)
IMPROVEMEN13 AND CON 11NGINCll3 IUND: +
llalance, beginning of year. ., , , ... ,...... . . , 8 93.305 $ i10,416 Additions -
From application of revenue -
Minimum requirement (121/2 percent of gross tesenue) . . . . 128,039 114.356 Italance of available net rewnue . . . . .. ... . . 253,897 e&4.799 i rom overhead conversion fund ... . . . ... , . . . . 1374 0 Total . . . .. .. . .. . , ,
_ 383,310 319,155 Deductions -
New series bonds -
Net (additions) deductions to reserve . . , , , . 325 62i Payment of bond interest. . .. ....... (128,581) (127,269)
. Payment of lxmd principal . . . . . . . . . . . (75,207) (69,067)
Commercial paper -
Payment of commercial paper redemption interest . . ............. (5,675) (7,102)
Payment of commercial paper redeemed. ... . .. .., , (17,300) (16.700)
Deductions (additions) to commercial paper redernption fund . . .. 0 56 Construction expenditures . .. .... , (108,042) {l10,104)
Transfer to overhead conversion fund . .. .. . . (7.563) (6"'01)
Total..... ... . . .... , . . . . .. (342,043) (336.266)
!!alance,end of year . . . . . . ..., ,. . ... .. $ 134,572 $ 93.305 REINVESTED EARNINGS:
11alance,beginning of year . .. . . .. .,.. $ 1,482.332 $1.4 % 509 Additions -
From improvements and contingencies fund -
For construction . ,, ,,, . ... . 108,042 110,104 For new series bonds principal payments . . 75,200 69.060 For commercial paper principal payments. . . . . 17,300 16,7(N)
From application of earnings -
For old series bonds principal payments . . 13,500 12,750 Proceeds from sale of property , ......... . . . 0 34 Total . . . , . . ., . ... 214.042 20H44H Deductions -
Depreciation . . .. . .. .... .. (146,559) (142,102)
Amortization of discount on capital appreciation txmds. , . . , , , (17,913) (16,705)
Amortization of bond reacquisition costs and debt issue expenses. . . . . . (17,626) (18,069)
Amortization of discount on new series bands. ., ,. . (5d09) (5.449)
Total . ..... . . ..... .. . , (187,507) (182,325)
Italance,end of year . . . .. ... ... . . .. $ 1,509.367 51,4H2.H32 1be acwonpanying notes arv an integnapart ofIbesefinancialstatenwnts.
7
p..-..,...,-........
~ ers svamsurrs e usaurs ass amscanes e anmans Years Ended January 31, 1997 1996 (in Ilwunsands)
REXENUE (Note 1);
Electric. . . , . . . .. . . .. $ 841,699 $ 777,657 Gas. . .. .. .. . . . 147,900 108.625 Interest and other income . . . . 34,636 2HMH Gross revenue . . . .. .. . . 1,024,315 914.850 EXPENS13 (Note 1):
1:uel, purchased power and resale gas. . . . . 255,055 203,337 Other operating and general, . . . .. . . .. 161,874 172,745 Maintenance. . . . . 71,423 78,632 Deprtsision. ... . .. 146,559 142,102 Interest and debt expense . . . 182,817 182,718 Allowance for intcrest used during construction (Deduction) . (3,654) (2,818)
Tax equivalent to City of San Antonio (Note #1. 15,154 13 696 Total Expenses . . .. H29,228 7m 412 13 CESS OF RESTRUFS OVER 13PENSES , , . 195,087 124,438 i
ADD:
Deprect.ition. , , . 146,559 142,102 Amortization of discount on capital apprecution bonds . .. . 17,913 16,705 Amortization oflxind reacquisition costs and debt issue expenses , . 17,626 18,069 Amortization of discount on new ser es Imnds . 5,409 5,449 Interest requirements on new series Imnds. . . . . . 128,581 127,269 Interest requirements for commercial paper redemption . 5,675 ?,102 AVAll.AllLE FOR APPI CAllON. .. $ 516,850 $ 441.I34
- APP!JCATION:
To pay long-term debt requirements (Note Ji, Old series bonds -
Principal payments. . , ,, $ 13,500 $ 12,750 Current requirc ments (Deductions) Additions (933) 90 Bond rewrve (Deduction) . . ,
(87) (87)
To improvements and contingencies fund Minimum requirements (121/2 percent of gross revenue) . . 128,039 114,356 Additional cash payments to and services for the City of San Antonio (Note B) 122,434 109,226 To improvements and contingencies fund lialanceof available net revenue. . , 253,897 2M.799 1UTAL APPlJCAllON . . . . . .. .. .
$ 516,850 5 441.134 The s.ccornpcmying notes are an integral;wrt of thesefinancialstaternents.
P 8 ,
ers .
. svaraserts er casu rises l
Years Ended January 31, 1997 1996 (in thousands)
CASil 110WS FROM OPERATING AC11VITIES:
- Excess of revenues over expenses . . ... . .. . $ 195,087 $ 124.438 Noocash items included -
Allowance for interest used during construction . ... . . .. (3,654) (2,818)
Depreciation expense . . . ., , .... 146,559 142,102 Amortization expense -
Ik>nd reacquisition costs and debt issue expenses . . 17,626 18,069 Discount on new series bonds. . . . , , , ,, ,, 5,409 5,4 19 Discount on capital appreciation bonds . . .... ,,. ,. 17,913 16,705 Additional cash payments to and services for the City of San Antonio. (122,434) (109,226)
Changes in current assets and current liabilities (Note 1) . . . . (5,441) (26,911)
(lacrease) decrease nn other assets. , .. . . .. .. 16,419 15,910 Increase (decrease) in other liabilities . . . .. 14.956 2,7%6 Net cash provided by operating activities . , .. .. 282,440 1%s(H CASil FLOWS I" ROM CAPITAL AND ". ELATED FINANCING ACTIVITIES:
Additions to utility plant , , , ,.
.. .. .. ... (171,467) (l67,082)
Allowance for interest used during construction , ,.... ,,. 3,654 2,818 Contributions in aid and customer advances for construction . . . , . . 6,928 7,727' Sale of revenue bonds . . . . ,, ..... ... O 125,000 Sale of commercial paper. . .. . .. . ,,. O 30,300 Principal payments on revenue bonds . , ,,.... , ,. . (88,700) (81,810)
Commercial paper redeemed. ... ,. . . . ,, , (17,300) (16,700)
Debt issue expenses .. . , .. ... 0 (254)
Old series bond rescrw defeasance . ... , ,. .., (16,552) 0 New series bond reserve asset transfer , ,, . .. . 16.552 0 Net cash used for capital and related financing methities. (266,885) (l(nool)
NIT INCREASE (DECREASE) !N CASil AND CASil EQUIVA1.ENTS $ 15,555 $ 86,504 CASil, CURRENT RESTRICTED CASil ANDTEMPORARY INVESTMENTS.
Beginning of year. . , . .. . ,, $ 56,472 $ 67,450 End of year . . . . . . . , ,,. 67.186 56,472 Net increase (decrease). . .. ,, ., 10,714 (10 97H)
RESTRICTED CASil AND INVESTMENTS:
Beginning of year. .. . . .. . .. 458,204 360.723 End of year . . ... . , , ,. . 463.045 498.204 Net increase (decrease). . . .., . 4,841 97,481 NET INCREASE (DECREASE) IN CASil AND CASil EQUIVAIENTS . $ 15,555 $ 86,50.4 ne accompanying notes are an integnapart of thesefinanctsa statements.
. ers - mens se emuuscena sistussurs numanav ar- essa ano esse
- 1. Significant Accounting Policies salvage,are charged to accumulated depreciation. The main-tenance of property,as well as replacements and renewals ORGAhuATION - City Public Senice (CPS),a municipal of items determined to be less than a unit of property, are utihty owned by the City of San Antonk)(the City),provides charged to maintenance expense. General utility plant electricity and natural gas to San Antonio and surrounding assets consist of land, buildings, and equipment for general areas. As a municipal utility, CPS is exempt from payment of and administrative pu< poses that are used commonly in income axes, state franchise and sales taxes, and real and electric and gas operations.
personal ptuperty taxes. CPS pnnd 'es certain payments _ ,
- and benefits to the City as described more fully in Notc M. CPS compute., depreciation using the straight 4ne method over the estimated senice lives of the various classes of HASIS OF ACCOUNTLNG 'lhe financial statements of depreciable property as determined by periodic engineer-CPS are presented in accordance with generally accepte<i ing studies. Depreciation as a percentage of average depre-accounting principles for ate-regulated enterprises.1hc ciable plant was 2.95 percent in 1997 and 1996.
accounting records of CPS follow the Uniform System of Accounts for Gas and Dectric Utilities issued by the RESTRICTED CASil AND INVESTMILNTS -These funds National Association of Regulatory Utility Commissioners. are generally restricted as to use for other than current Also, CPS has elected not to follow the pronouncements of operations or are designated for expenditures la the acqui-the Financial Accounting 5tandards lloard (FASil) issued sition or construction of non current assets. Funds consist i after November 30,1989, which is an ahernathe of the primarily of unspent bond issue proceeds, debt service and Governmental Accounting Standards Ikiard (GASli) reserves required for Old and New Series Nnds and com-Statement No. 20, &countinu and rinancial Renortine for mercial paper, and funds for future construction or contin-Proprietary Funds and Other Gosernmental Entities hat gencies. The Overhead Conversion Fund was established in Use Proprietary Fund Accountina. *ihis election avoids con- 1995. This fund includes I percent of the prior thcal year's flicts created when the FASil issues standards that conflict electric revenue from cttles in the CPS service area. The cur-with GASin pronouncements. rent amount represents the unused balance from 1994 through January 31,1997.
FISCAL YEAR -The fiscal year ended January 31,1997,is referred to hemin a* 1997;the fiscal) ears ended January 31, As of February 1,1997, the Old Sc Nnds were fully 1996, January 31,199% andJanuary 31,1994 as 1996,1995, defeased.The remaining balance in the Old Series Ikmd and 1994 respectively. Reserve was transferred to the New Series liond Resene.
For further discussion regarding the Old Series llands, New REVENUE AND EXPENSES - Revenue is recognized as Series ikmds,and their correspondmg reserves,see Note 3 billed on a cycle basis. Rate schedules include fuel and gas cost adjustment clauses that permit recovery of fuel and gas Also included in the restricted cash category is the CPS Joint costs in the month incurred. CPS recognizes fuel and resale Operations Savings Fund, which was established in 1997 gas costs on the same basis as it recognizes revenue. This fund represents the restricted portion of CPS'cumula-tive savings as a result of the joint systems operations agree-CPS amortizes its share of nuclear fuel for the South Texas ment with flouston Ughting and Power; the amount is Project (STP) to fuel expense on a unit.of-pnxtuction being restricted until it is determined how these funds will method. Unden the NGlear Waste Policy Act of 1982, the be disbursed, federal government assumed resp <msibility for the perma-nent disposal of spent nuclear fuel. CPS is charged a fee for CPS customer assistance program funds, insurance reserves, disposal of spent nuclear fuel, which is included in fuel and short-term investments of tax <xempt commercial u
expense,in the amount of $01X)093 per generated kilowatt paper proceeds are also included m this category.
hour (KWII) for its share of electricity pnnluced by STP For further discussion regarding the STP, see Note A Inve-tments are A .ted at cos ,vhich approximates market value. The specific identification method is used to deter-UllLITY PIANT - Utility plant is stated at the cost of con- mine cost in computing gain or has on sales of securities.
struct;an, including costs of contracted services, direct Amortization of premium and accretion of discount are material and labor, indirect costs, including general engi- recorded over the terms of the investments, neering, labor and material overhead,and an' allowance for interest used during construction (AIUDC). CPS computes DEFERRED DElllTS AND OTilER -Thest amounts con-AIUDC using rates representing the cost of borrowed funds sist primarily of the unamortized balances of debt issuance on projects estimated to cost in excess of $250,tXXL expenses, nuclear fuel assessment and STP litigation Retirements of utility plant,together with removal cost less expenses and noncurrent litigation settlement receivables.
)
I
'% l
- v. M, -
Amortization of debt expense is recoTleJ over the period tions by Trust Indenture, Ordinances, and State law,-
of the outstanding tonds. Also inclujed are assets of an Investments carried at amortized cost plus accrued interest employee deferred compematian plan held by a trustee, were $524.6 million with a market value of $530.1 million at January 31,1997,and werc $507.3 million with a market DEFERRED CREDITS AND OTHFR 'these amo'ints value af $514.1 million at January 31,1996.
consist primarily of liabilities relating to employee deferred compensation. nuclear fuct assessment. customer asistance 3. Revenue ik nd Indenture Requirements program contributions, customer advances for construc-tion,and the CPS ' .lt Operations Savings Fund. Operating The trust indenture executed by the City in conjunctioe reserves for property insurance and injuries and damages . with the issuance of the revence bonds dated Fels uary 1, are also included in this category. 1951, through August 1,1974,(Old Series ik> mis) contains, among others,the following provisions:-
STATEMENT OF CASil FII)WS - For purposes of report-ing cash flows, CPS comiders all highly liquid debt instru- - (1) All of the assets of the gas and electric systems,togeth-ments purchased with a maturity of approximately three er with the net revenues of the systems,as defined,are mont.% or less to be short term investments. Accordingly, pledged with the llarris Trust and Savings 11ank of CP$' temporary investments and retricted cash and invest. Chicago,Ilhnois,as CorporateTrustee,to secure the pay.
ments are cash equivalents. No material noncash investing ment of the Old Series Ikmds, or noncapital financing transactions occurred during 1997 and 1996. - (2) Gross revenues of the gas and electric systems shall be applied to:(a) expenses of operating and maintaining To determine net cash p ovided by operating activities, net the systems,(b) debt service and reserve requirements camings have been adjusted by changes in cuirent assets on the Old Series Ikmds.(c) payment of an 'in lieu of -
and current liabilities, excludinh changes in cash and tem- tax
- amount to the City [ tax equivalent],(d) an amount -
porary imrstments and current maturities of long-term equal to 12 1/2 percent of gross revenues to the debt. Changes shown as an (increase) decrease in current improvements art contingencies fund, (c) addithnal assets and as an increase (decrease)in current liabibiles are benefits and payments to the City to bring City benefits as folk)ws: and paymenta to 14 percent of gross resenues,(f) addt-tional payments to the impnwements and contingen-IM' l'd clea lund untd sucl. fund equals 20 percent of the value cuniumer accounu =ceivst* . . 8 (1 >$$49s) of fixed capital assets,and (g) the balance to a surplus
- other receival*s. . . , (1,433) gm,3 fund.
Inventertes and supphes , 2,066 (ll,2HM Papayments and other . (2,590)
Accounu payaNe and accrued tuNbucs .
It,5SS (l.lsh (3) The following funds are established: (a) general fund, anim Customer nervice depostas. H6 207 (b) improvements and contingencies fund, (c) btmd chaners in cwnni asieu and curnne luhaines. . g) st26.9 tis construction fund (containing the proceeds of revenue txmds),(d) principal and interest current requirements Cash interest paid by CPS, net of AiUDC,was $ 138,300 and (containing the monthly payments of annual debt -
$137,954 in 1997 and 1996,respectively. requirements), and (e) bond roerve fund (containing an amount equal to the next fiscal year's principal and
- 2. Cash and Temporacy investments interest requirements). These funds may be invested with authorized depository banks or in U.S. government CPS cash deposits at January 31,1997, and 19(X>, were securities.
entirely insured or collateralized by banks for the account of CPS, For deposits that were collateralized,the secunties lleginning with the nscal year ended January 31,1976, new were U.S. Government obligations held in book entry form series electric and gas systems revenue improvement lxmda by a third party in CPS' name. CPS' cash Imok values were (New Series Ikmds) were issued. These Imnds are junior
$5.6 million at January 31,1997, and 1.PS' bank balances and subordinate to the 0;d Series Ikmds. The bond ordi-were $11.7 million also at year end. nances authorizing these issues provide that no further bonds or obligatiom will be authorized or issued under the L At January 31,1997, and IW6, CPS' investments, Imth terms of the trust indenture for Old Series ikmds. While any restricted and unrestricte;, were all in U.S. Government of the Old Series ikmds are outstanding, the New Series obligations and were held in imok entry form by a third ikmds are payable solely from the net revemics of the sys-party in CPS' name. CPS' imrstments are generally limited tems (1) deposited and available for deposit in the improve-to U.S.Goveniment or U.S. Government guaranteed obliga. ments and contingencies fund and (2) from funds payable f
l
pw .. & i ~. - 4 x .w. wu-to the City. At such time as the trust indenture covering the __ . In prior years, CPS refunded certain previously issued and Old Series Bonds becomes inoperative, revenues will he' outstanding New Series lionds through the issuance of New appued as follows: (nor maintenance and operating: Series Revenue Refunding ik>nds.The refunded bonds and , :
expenses of the systems j) for payments of the New Series ' related trust accounts are not included in CPS financial-Ik>nds,(c) for the paynsent of any obligations inferior in lien . statements. At January 31,1997, portions of the bonds (in -
to the New Series ikmda which may be issued,(d) for an thousands) widch have been defcased were still outstand- -
amount equal to 6 percent of the gross revemies of the; ing as follows: .
systems to be deposited in a repair and replacement fund,' .
-- (c) for cash payments and benefits to the City not to exceed Fiscal year 1988 refunding , . . . , , , . .. . . . . . , , . $ 79,350 14 percent of the gross resenues of the systems,and (f)any Fiscal year 1992 refunding , , . . . . . . . , . . . . . . 4,100 remaining revenaes to the repair and replacement fund. Fiscal year 1993 refunding . , , , . . , , , , , , , , , . . - 160,205 Ihc New Series Ikinds ordinances acquLe that a bond Fheal ycar 1995 refunding . . . . . . . . . . . . . . . . . 100,990 reserve fund at least equal to the average annual principal
- and interest requirements of all outstanding New Series in 1996, CPS issued $125.0 million of New Series 1995 Bomis he established. Revenue ikinds at an average interest cost of 5.50 percent, with delivery on November 16,1995. Some of the proceeds
- As of January 31,1997, bond reserve requirements for the - from these bonds are still available and will be used for CPS'
. New Series ik nds have ten met. As of February 1,1997, construction programs in 199tt
' the Old Series ik>nds were totally defeased and the provi- . . .
sions set forth by the bond ordinances fi>r New Series : In February 1994, CP3 issued New Series Bonds which -
Ikmda became effective, included $37 million of london Interbank offered Rate
- (LISOR) Floater ik>nds, the rates on which are reset semi-4 Ilevenue Bossda annually. CPS entered into a rate hedge contract with a counterparty which resulted in the 1.!BOR Floater Bonds A summary of revenue bonds is as follows: being a fixed rate payment obligation fo." CPS, At the option 1 of the bondholders,$36 million of the IJBOR Floater Bonds .
Wlhed*mit" i were converted to flued rate obligations during fiscal3 rar 3""5 8d" . 1995,with the remaining $ 1 million being cc wcrted by ti. *
'"k"E :
y bondholders to nxed rate on February 1,1995.The bo.a Mamnues knuary 31,14n 1997 - t+at, holders' converted rates are higher than CPS' contract fixec
. p,s hussado . rate. During the 1996 fiscal year, CPS was exposed to mini-
. Old sedes,1974 -
$ - $ - 13,500 mal market risk.This risk is equivalent to the 61fference
' New 5erics Sena! Bonds, , between CPS' contract flued rate and the converted fixed
- 1977
- 1995 19NI 2018 sh W ; 3,295,350 1 =2,%0,550J rate on these bonds fi>r one interest period. CPS does not t'nanmetiml Nes senrs anticipate nonperformance by the contract counterparty, l Roads issue dbcount _(67,168) - (72,577) who is rated AAA by Standard & Poor's Corporation.
New Series Capaal Apexiation Ikmds,
- 19N9 and 19)I 2002 2012 501/65 - 502,%5;
>.(
- %,,ng cq,,g p .5. Commeccial Paper i : Ikmd dhcount - (2na64) (25 F M)- - - -
i; .
. SSWA - 2,483,as3 2,549,260 - in October 19H8, the City Council of San Antonio, Texas
. less.Cumat nueuraies elbonds . 93,145 88 ?00 : (City Council) adopted an ordinance authorizing the-
- t'nanonued ust afined reaccedsulon - 166.3e6 IRM68 issuance of up to $300 million in Tax Exempt Commercial Resenne lumds, net l Paper (TECP). . This ordinance as amended provides for-of current mamruies - $ 2,224,352 8 2.2'6.w2 j funding to assist in t'ae financing of eligible projects,includ. -
-
- All new actics honds,inchaling capital appreciattor. tmnds uct a gu s n and caphal impnwements to the umy systems (the Systems), and to refinance or refund any out-standing obligations which are secured by and payable from :
. - Principal amounts due (in thousands) for the next live years -
e "
a lien on and/or a pledge of net revenues of the Systems. +
The program's scheduled maximum maturities will not
.Icar Ndw Series Ik>nds . extend beyond November 1,2028.
1998- $ 93,145 Based upon the revised ordinance authorization, CPS issued 1999 94,555 $21I million of TECP to call long-term bonds during fiscal 2
2000 102,890: year 1994. CPS has self-imposed a schedule to pay off the j 2001 120,545 balance of the principal used for the redemption of long-2002 109.122
'C
, . . - . . - - -- . . _ , ,wa. 4 - - -- -- ,. 7 - y -
pg, term debt. Under this payback, $17.3 million of the $211 The actuarially determined contribution requicement as of million was redeemed during 1997; $16.7 millic.a was December 31,1996, was computed using an assumed rate redeemed during 1996; $ 16,9 million was redeemed during of return of 8.5 percent. For IW7 the pastwrvice costs 1995; and $5.6 milhon was redeemed during 199 4. In fiscal were amortized user 15 ) cars, as compared to a 2aycar 1998, the principal payment scheduled is $270 million amortization for 1996 and 1995,and a 34) car amortization with slightly greater amounts 1.cheduled for the following for prior years. There were no changes in actuarial awump-two fiscal ) cars. tions or cost methods from 19'Xi to 1997 As of January 31,1997, $ 277.8 million in principd amount On December 1,1996, the Plan was amended to increase was outstanding, with a weighted average interest rate of the inwrvice death benefit for active employees, who were approximately 3.48 percent and an average hfe of approxi- chgible to retire at their date of death. 'ihe effect of this mately 105 days. change was an increase in the December 31,1996 Pension Itenefit Obligath ,f $1.6 million and an increase in the
'the TICP has been classified as long term in accor lance actuarially determined contribution requirement beginning alth the retinancing terms under a revolving credit agree- February 1,1997 of $263 thousand with a 15 year funding ment with a consortium of banks which supports the com. assutrption for fiscal year 1997 98.
mercial paper. Under the terms of the agreement, Cl4 may borrow up to an aggregate amount not to exceed $300 mil- CPS contributions amounted to i1.4 percent of covered lion for the purpose of paying amour's due under the'lICP. payrollin 1997,and 12.2 percent in 19%,and 11.8 percent The credit agreement has a term of two ) cars, currently in 1995, Of the amounts contributed during years 1997, extended until November 1,1998,and may be renewed for 1996,and 1995,approximately $14 7 million,$13.9 million, additioaal periods. and $ 13.4 million,respectively,was to fund the normal costs of the Plan each year. The remaining contribution in each
'lhere hase been eo borrowings under the credit agree- year was to fund the amortization of the unfunded actuari-ment as ofJ.muary M,1997, TheTI:CP is secured by the net al accrued liability.
revenues of the Systems. Such pledge of net revenues is subordinate and inferior to t)w pledge securing payment of GASin Statement No.5, Disclosure of Pemion Infur.ma&2nhy the Old Series ihmds, the New Series ihmd3 and any New Public Employee Retirement Syggms and State and ingd Series lkmds to be twued in the future. GovernmenhlLEmdlym, requires that a pension benefit obligation be measured using the actuarial present value of
- 6. Ilenefit Plans credited projected benefits,as adjt.sted for projected salary increases. This measure is independent of the funding CPS has a wif.auministered, defined-benefit contributory method used to determine contributions to the Plan; how-pension plan (Plan) covering substantially all employees ever,the significant actuarial assumptions used to compute who havt completed one year of service. The Plan assets the contribution requirement are the same as those ased to are held in a separate trust that is periodically audited and compute the pension benefit obligation.
which statements include historical trend information.
Generally, participating employees contribute 5 percent of Under GASH Statement No.5,the following represents CIT their total compensation and are normally fully vested in pension benefit obligation (in thousands) as of CPS' contribution after completing 15 years of credited ser. December 31,1-)96,and 1995 vice. Normal retirement is age 65;however,early retirement g
is available with 25 years of benefit senice. Retirement Fw nm WSm and m benefits are based on length of service and compensation. pnripnm , $ MMI $ 03,*.4 and b .nclits are reduced for retirement before age 55. For actne partidpnts:
Emphner and employee fmancesi ested benents . 240,115 M 608 The total employer and employee pension funding, which F.mphner Snanted noneted tumefits , n oic 92327 includes amortization of past service costs using the unit Taal penson benc6: obliption. 487,206 455331 credit cost actuarial method,is summarized as follows: het assets available for plan tuments (4:1,ur marlas salue) . SI5A% 4Rus 1997 tw6 Oberfmaledul nfunded penson benefit obhgatmo . f(77,830) $ 13 m (In than uds)
Emphnee conmbutmos . $ 6,MI $ 5,738 Net awets available for plan ben.ilts were 105.7 percent of CPS contnbutmns , 14,267 I LON total pension benetit obligation m 1996, as compared with Totalcontributmns . $ 20328 j lel6 99.7 percent in 1905 and 83 percent in 1994. Net assets Cosered payroll . j 125.173 $ liig exceeded the pension benefit obligation for 1996 by 22.2 Total pamdi . $ 124,764 E** "" ED #"""" E#" " "'
$ 125315 l
l
1=
abligation was equal to 1.2 gwr(ent of anntul antard spouws enrolled in Medicarr Part il in 19'Xi and $43.HO pa) mil in 1999, as compared with 61 lwrtent in 199 6. effective January 1,1997.
Prior to GAhlt $iatement No. 9. CPS triwted the Plan status Retired emphiyces and covered degxndents contributed as the actuarial present value of accumulated pla twncfits. $925 thousand and $762 thouund for their heahh carc and Unoct 6ah mettmd,the actuarial prewnt value of acct mu- life msurance twntfits in f1wal IW7 and 19Wi, respectively, lated plan tenefits using an assumcd rate of rtturn of in f1wal 1997.there were approximattly 1,734 retirres and H i perterst was $3923 'nillion at Decomurr 31,1990 with covered dc[wndents cligible for health tare and life insur.
not awets of Hli0 mlition at fair matiet value, As of an(c tenefits, as compart d to appmstmately 1,63H in 19m Detemtwr 31,1999,the actuarial prewnt va9ue of accumu.
lated plan twnC/tts was $M 3 2 mt!! ion as compared to net in view of the potential econon.ic significarice of these awete. of $1%i 0 mdllon. t"ntfits,CPh has reviewed the present value of the postom-plo) ment tienefit obligations for current retitros. W ThpSH en who retired prior to 15t43 ate trceiving annuity January 1,1997, valuations are $3H 4 tuillion for health and payments ini,n an insurance t'arrier as well as rocciving $ 14 9 million for life insurance bentihn. the actnarial analy-some tenefits dirt etly from CPS CP5 (tnts for fiscal 1997 sis of the present value of postemployment lenefit obliga-and 1996 err 6447 thonund and $49H thousand,res[wc. tions for other partkipants fully (ligible for benefits Nr t*rk,and* <
retorded w ben paid. estimated to bc $31.9 million for health,$4 3 million for hic i.nurance and $2.1 million for diubility twntfits. CPS twgan Mfenrd Om/weanthm /%m partial accrual and funding of projected futurr tienefits in 1992. l'unding totaled 5% million in flwal Scar 1997, CPS of fers its mphsp en a deferred compcnution plan cre. $7 million per year in 1996.and $% million per > car for 1993 ated in accord nce with mternal ite enue Code Section thmugh 199%,
1 457. & plan receives no coLtributions from CP5. It is available to all CP5 emplo)ces and [ n rmits them to d(fer a H. Payments to the City tuttion of their salary until futute )rart. l'unds are man.
- ged by an todep ndent trustre.1hc dferred compensa- Ihe tmst indenture provides for lwncfits and ser ices total-tion is not available to emplo)ces until termination, ing l4 pertent of CPS grtas ; venues,an defined,to be paid retirement.or death.or due to an unfarrweable emergency. or p.ovided to the City, Pa)ments to the City for 1997 and 1996 th thouundo, bawd on allowable revenue, were as As a result of the $ mall ilusiness Joh Pmtcrtion Act of 1996 followr (the Act). certain provisions of the Internal Revenue C<wp A 27 tune twen amended that are applicahic to CPY 1997 t%
deferred comjwnution plan. Und-r the amended provi- taughalent . . .. $ 15,154 $ in n Wons,all aucts of the plan are to be held in a trust for the kehul ps anil ekrinc memos . 17,109 tMr exclustre benefit of participants and their teneficiatics; gga,n,i c,,i, gn . , 3g,95 ga g, however,the aswis do not have to be placed in a trust until 3 gg ,, pg,, ,,g t january 1,1999. In compliance with the Act, CP5 has ofil-cially amended and trstated its deferred compenution plan to provide that a trmt to hold all aswin of the plan for the 9. South Texas Project (STP) exctmive benefit of the participants and twnciklartes shall become effective on or twfotr January 1,1999. CPS is one of four participants in the STP,which comists of two 1,2%0 megawatt nuclear generating units in Matagorda
- 7. Other Ptntemployment lienefits County,Texat the other participants in the project are the project manager, llomton 1.ighting & Power Company cps provtdra certain health care and life insurance benefits (IllAPL Central Power and I.ight Company (CPI), and the for retired emplo) cts. All former CPS employees are eligi- City of Austin (Amtin). l'ull power operating licenws were ble for thew twncfits ugwm retirement from CPS.1hc annu- tourd by the Nuclear Regulatory Commission (NRC) on al omt of retirte health care and hfe insurance benefits Mmh 22,1988, for Unit I and March 28,1989, for Unit 2.
funded by CP5 is recognlied as an expeme of CPS as inwrvice dates for STP were August 19HH for Unit I and employer contributiom are made to the programs These June 1989 for Unit 2. CPS' 2& percent ownership in the STP cmts approximated 62.4 million and $2.0 million for 1997 reprewnts 70n rnegawatts of plant capacity. At January 31, and 1996, respectively. CP$ trimbursed $1230 per month 1997,CPY investment in the STP utility plant was approxi-D for Medicare supplement for certain retirees and their mately $1.7 billion. net of accumulated depreciation.
3
l 1-Under the tertm of the current $1r Partkipation with the financial protectioa n quittments of the Price.
Agreement, S11' is maintained and operated by lilAP as Anderum Act.
Pniject Manager and each parikipant prinides funding for its share of expenditurcs.1hr p4rticipants ime agreed to A Master Worker Ninicar ljability polky, with a maximum (scate a new operating company which would replace limit of $400 millhm for the malcar indmtry as a whole, lilAP as Project Manager and twoome the operating provides protection from mnlear-rtlated claims of wotLers licenwe of S'sP An /.tnend'd and licstattti Partkipation emplo)rd in the nuclear indmtry af ter January 1,19$m who Agtrement, broing forth rua new terms and wnditham of do not me the workers'compemat on s)htem as unic reme-the operation b) the participants,h expected to replace the dy and bring huit agalmt another party, $11' could tw current Participation Agrooment duritig fiscal Joat 1997 9H. awowed tip us approximately $3 H millkm to pay its hharc 1he respomibihty for sharing omts in proportion to own- for this liability cmcrage during the life of the plant.
crnhlp interests would remain unt hanged.
NRC regulatium require lkemets of nuclear p(mer plants 12TIGA110N - CIS and IPAP entered into a joint opera. to obtain on $lte property damage imuramt in a minimum tkms agrtement tiftetive July 1,1996 which traohrd CIT amount of $1M billion. NRC regulathus also require that claims agalmt lilAP wntorning the shutdown of the STP the pnx ceds from this imurance he uwd firnt to emurt mnlear plant during fiscal 1994 and omt overruns during that the licensed tractor h in a safe and stable rondition ho the STP comtrmtion perknl.1hc total amount of the No prevent any hignificant rkk to the public health or nafe-nettlement was for $22% inithon. ty, and then to complete any decontamination operations that may be ordered by the NRC. Any funds remaining CIS rtschrd the initial $79 million of the artilement in would then tr available for rmtring direct iowes tu property, cash proceeds during the summer of fiscal 1997,of whkh
$11 million was uwd to trimburse Cl5 for htigation 1he owners of STP currently maintain $2.7% billion of exlwnwn incurtrd 11w remaining $61 ruillion was directly nuclear property imurance, which h abmr the legally refunded to the ratepayers during September 1996 requirrd amount of $1.06 billion, but h less than the total amount available for such lowen 1hc $2,7% billion of 1hc he*tlement aho imiudes an agreement to jointly di& nuclear property imurance comhts of $%m million in pri-patch ClY and lilAP s generating plants to take advantage mary prolwrty damage imurance,along with $2.29 billion of the most tillcient plants and favorable fuel prices of cach of excess property damage insurance that ir subject to a ret-utility 1his joint olwratiom agreement must result in at nnpecthe asws%aent twing paid by each electric utthty least $10 milhon in cumulathe havings per ) ear to CI5,or whkh h a me Wor of Nuclear Iketric Insurance ljmited lilAP will make up the differente in cash. A similar (NI.lll in the cient that property losses as a result of an payment will be made by fil AP to imure lwnclits to 015 of accident at the nuclear plant of any utility imured by NI'll.
$150 milhon in navings during the ten year life of the joint exceed the accumulated fund availabic to NIL a retro-operating agreement. sporthe aswwment rotJd occur.1hc maximum aggregate dwwment under currrnt polkien h $ltH million defing NUCLl;AR INSURANCE -lhe Price Anderson Act, a com. an) one policy p ar.
prehenshr statutory arrangement pnwiding limitatium on nuclear habihty and governmental indemnitica, h in vtkct NUCIIAR DI:COkthil%SIONING - In July 199", C15, until August 1,2002. The limit of liabiht) under the Prke- together with the other owness of the STP, filed with the Anderson Act for licenwes of nuclear power plants b NRC a certlficate of financial awuratu e for the decommi+
$H 92 billkm per incident.1he maximum amount that each nioning of the miclear power plant.1hc tertificate awures licemce may be awened following a nuclear irwident at ariy that CPS will meet the minimurn decemmtwioning fending imured facility is $73.4 million,whkh may tw ad imted for requirements mandated by the NRC.1hc STP owners inflation, for cach licemed reactor, but not enore than agreed in the financial awuran(c plan that their estimate of
$ 10 milhon per reactor for each nuclear incident in any one decommioloning cmts would tw reviewed end updated
) car. CP5 and ca(h of the other participants of STP are sult perkwhcally, in 199L the owners onducted a review of ject to such awcuments. CP5 and the other participants de(ommtwinning cmtt 1he traults r$timated CIT hhare of have agreed that any much awcwments will tw borne on the decommiwinning cmts at approximately $270 million in basis of their respecthe ownership interr>ts in 51P CAT 19mkillars, w hkh aho rwenled NRC minimum trquirranentt ownership interest in S1P is 2H percent, for purpows of these anewments STP ha two licemed tractortlhe par- In 1991, CIS started accumulating the decommioloning ticipants have purchawd the maximum limits of nuclear lia- funds in en external tret,in accordance with the NRC $
bility imurance, as required by law, and have executed regulatium The trmt accounts and related decommtwion-indemnification agreements with the NRC,in accordance ing liability are not included in CIT financial statements.
. y P
1-At January 31,1997, CPS has accumulated approxinutdy commitment under thew uintracts
$57.1 mHlion of decommtwloning funds in the external trust. Itased upm the 1996 decommluioning coat Mudy, # " "# '""I '*"d"I"" #O "" ## h E'""*
the annual levellied fundmg increaw to $H H mulion for E d " * " #' d E" d I" "#E " "h ' N ' #
1996 lus remaltw6 the kame for 1997.
changes adecung &c utH4 induury %c hansudulon Pricing and Actc$s Rule (Rule) nundJtes that electric utill-
- 10. Ottumitnients and Contingetwlen #' ' 'T " " * "# * "'# #"E""'"'""'""
access according to a formula luwd 70 pcrtent on a single
' "" E " " "" # """""
in the normal umrw of business, CPS is invohrd in other imiuct of open act est on cath electric utility inTexat 1his legal proceedings related to alleged personal and property m eum muauy would m4 CPS $15 Mhm m danuges,bren h of contract t ondemnation appeals and di*
in Wdiuonal transmiwlon costs that will ciletthcly crimination caws in addition,Cl5 power generation activ-itics and other utihty operations are subkot to extensive whh niv. W muides with h!gher transmiwlon g .g ppg s Rule indudes a rate-moderation plan that 6 tate and lederal environmental regulation. In the opinion will minimlic the impact of the new pricing met hanism for of management of CPS, the outcome of such proceedings will not have a material adscrse ellect on the financial dw h tW nus h k M* is in CHM UW dds p,g p3 out for calendar year 1997 would be 10 penent p USion or results of operadons of CPS.
of h* unal 4 nuond Amce fw 199H and WN would be 20 percent and 30 penent of the alune cost, Purthaw and con truction commitments amounted to
, cd dy. 05 bs puond du PUC to mmd k RW approximatdy $988 million at January 31,1997. This and has challenged the Rulci validity in state Dhtrict Court, amount indudes approximately $66% million that is g,S h also fHM an wal from the PUC*n determination expected to be paid for natural gas purthaws to be made as to Mc I d ohnnhim mus m ng mim un&r under the contracts currently in dicct thnmgh the Star & PUC's RWe, 2tM12;the actual amount to be paid will be dependent upon CPS' actual requirements during the contract perimi and 1hc utimate cHect of the Rule and other developments in the price of gat Also induded is $37 million for (oal the restructuring of the electric industry is unknown at this purchases through 2000, $203 million for coal time, CPS is continuously monitoring devdopments as it transportation through 2001, and $14 mulion for treated pmitions itwlf to maximlic potential benents and mitigate cooling water through 200%, based uptm the minimum firm detrimental ef fects u here powilite, i1. Segment Information 1997 1996 llectr6c t,as 1otal 1:lectric Gas Total (in thouwruh) (in thouwndst HlYl'NUI'. , ,, , ,, ,, , $ 841,699 $ 147,980 $ 969,679 $ ~'?h%? $ 108 62% $ HH6,2H2 IIPlWS11 Opt rating and maintenance expchsen. 379,219 109,133 4ot1,352 374,46H 80.266 454,714 Ocpreciation, , , , , , , 136,343 10,216 146,559 132c113 9AH9 142,102 Total expenses , , . . 515,562 119,349 634,911 %06 HMi H9,93 % %96 Hl6 OPl. RATING INCOMIT, , . , $ 326,137 $ 28,631 354,768 $ 2?o,??6 $ IHJM1 289,466 IntercM and other income, , 34,636 2H,46H Net interest and debt expenw and tax equivalent to the City of San Antonio , (194,317) (193.596)
IXCl35 OI: RITIWUl3 OVI.R l XPlWS!3 $ 195,087 $ 121,438 CAPITAL.11P1WD111 Rf A . ,
, , j_1317Z1, $ 40191 L J]L26g .$EQQ4 6 21J21 L1W26 Identifiable awets . ,, . $ 3,742,H91 $ 297,625 $ 4,040,516 $ 3,760,128 $ 260.441 $ 4,021,022 General awets . . 574,268 %%%.912
(' TOTAL. AS$lTS , 8 4.614,784 $ 4 %'6.96 I w
{ars -
BERNsla \buNc til' *^"'^ * **C'^ s co Corided Nt:4c Acco,rtants m
lloard of Tnistern City 15sblic $rrvice We base audited the accompanying balance shorts of City Puhur Senke as of .lanuary 31. IW7 and IW6, and the related ntatements of revenuta and application of restnues,thangen in equity, and cash flows for the yrars then ended *ihr>r financial statements are the respomththty of the management of City Public Senice, Our renpomibility is to caprrat an opinion on thew financial statements hawd on our audits.
We condtuted our audits in accordan(c with generally accepted auditing standank 1how standarth require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of saatrrtal nmstatement. An audit inchalen examisiirig, on a trat basis, eviderite supporting the amounts and shsclosuren in the financial statements, An utnht also inclutlen assensing the accounting principien used and nignificant (Wimaten made by management,as well as evaluating the overall sinancial statement presentation We believe that our audits pnnide a reasonable basis for our opinion.
In our opinion, the financial statements rc ferred to above prewnt fairty,in all material traptcts, the financial post" i of City Public Service an ofJanuary 31. IW7 and lipxi,and the renuits of its operations and its cash flows for the ) carn then ended in conformity with generally accepted accounting principics.
h ty #
LLP M Wa r-* 6)* 4 *E han Antonio Texas Mart h 14, IW7 7
e p .t. _
Years Inded January 31, (in Ilmenands)
(l'naudited) 1997 1996 199% 1996 1993 klTlWUE AND APPIKA110N Ros enurs:
1.lectric hates . . . ,,. .., 4 841,699 $ 777,657 $ 7%7,937 $ ?Hl h61 $ 708,257 Gas $ ales . . . , , ,,,.... . 147,900 10H,625 110h9) 12%,491 112,611 Interest and other income , 34.636 2H.96H. 2 M2% 2m4 2630H_
Totat tesenues . ..... , , , $ 1,024,315 $ 914MO $ H93,1 % $ 930,%0} $ M 47,576 Revenuen applied.
Cost of operaung sptemt l'uct, purt hased pow t r and renale gan. , , 4 255,055 $ 203.337 $ 210,%03 $ 260,215 $ 201 499 Other operating and general expenws. . . , 161,874 172,74% 164,HH9 166,054 143,753 Maintenance .. ...,,...,,, 71.423 *HA12 72,H 4H HH,92H 6 ( 12 0 Total. . . . . . . . . . . $ 488.352 $ 4%4,714 $ 4 4H,236 $ 911.797 $ 410A22 Debt requirtinents for Old $ctics lkmdv Interest expenw , . . . . . . . $ 945 $ l .83H $ 2h78 $ 3,390 $ 4,067 Principal requirrturnts, ,.. 12,567 12,840 12.23% 13.112 12,306 Resen c rcquirements ' .. 4 (16,639) (87) (327) (366) (239)
Dcht empenw. . . . .. 1 ,1 1 6 7 Tota! . . . . . . . . . . . . . . $ (3,126) $ 14,%v i $ 14,990 $ 16.162 $ 16,141 Payments and services to City:
Tau equivalent to City of San Antonio. $ 15,154 $ 13,696 $ 12,736 $ I 1,H17 5 11,24i Refunds for services, .,,, 17,109 16,5H7 16,163 16A64 16,387 Additional payment , , , ,, 105,325 92,639 90,953 96 601 HiyM4 Total .. . .,,. .., , $ 137,%8N. $ 122,922 $ I 19,H52 $ 12 4.HH2 $ I13,919 Debt requirements for New $crien ihmdVother:
Interest cxpenw . , , , , , $ 128,581 $ 127,26H $ 129,H99 $ 150,588 $ 199,169 Principal trquirements. , , . . . . . . . 7I,207 69,067 66,597 66A60 69,96%
Resenr requirementh ' ,, . . . 16,227 (621) 1,150 1,239 %,56H Debt expense. ,,,, , , 28 17 14 42 69 Other interest .., , . , , , , , , 6,638 6.267 3,721 3,252 5,39i Commercial paper redemption requirements, 22,975 23,746 22,79% H,429 0 Total. ., . . . , 8 249,656 $ 22%.74 $ 222.173 $ 230,010 $ 2 40. lb%
Allowance for interest uwd during construction $ (3,654) $ (2.HlH) $ (3,072) $ (1,977) $ (29.09%)
Additions to plant:
Gnns construction for year . . . $ 172,268 $ 153,326 $ 149.519 $ 124.162 $ 171,952 less construction funds provided by nources other than revenues 64.226 44 R HH 'y] %9_6"9 7H.0H9 Revenues uwd for additions to plant . $ 108,042 $ I10,104 $ 60,727 $ 6 4,4H3 $ 93,H63 Additions to improvements and Omtingencies rund. . . 41,268 (17,111) 16,497 (17,H52) 2,12%
Net additions to Overhead Conversion I und (Paid by LAC I und). 6.189 6 "01 14.150 0 0 Total. . . ... . . $ 155.422, 1 99M1 $ 9tr4 $ 46M1 $ 912Hti Total resenues applied . . $ 1,024,315 $ 914.850 $ H93,196 $ 930,505 $ 847,376 Ital.ANCE $lil~lT DA1 A Utility plant at cost. . . . $5,269,014 $ s,123,286 $ 4,313,020 $ 4,911,599 $ 1,793,976 Gnns construction. . . . . 172,268 153.326 149,519 124,162 171,952 Accumulated depreciation . ., , , . 1,402.952 1,269,710 1,159,999 1,012,l" A 917,783 Annual depreciation allowant c. . . , , , , . 146,559 142,102 13H,939 136,957 120,H79 Ilond principal and interest coverage , 2.47x 2 INx 2.12s 1,78x 1.7Nx
- Old Series Reserts Requirrmentsfur 1997 imludes a transfer tof vernalning assets of $16.112 to the Neu' Series Reserts at)varend Neu' Series Reserte RequirementsJiar 1997 avflects this added transfer y
o Yeats Imled January 31, iln lin>usands)
(Unaudited) 1997 1996 19M 1994 IW3 Ol'1 RATING RITlWUI3 Ilectrie:
Residt-ntial, . . ..... ,. . $ 3%061 $ 360,484 $ 3 66,396
$ 350 %H3 $ 320.067 Omunercial and industrial . .., ,
'ih.c % 3013790 301,319 31%,156 284.289 Street lighting ............ ? t# ' 10.762 10,45i 10,46H 9,H15 Puhlle Authorities. ...... . fA At -i HO.H12 7H,404 H6.370 7H,06l
$ ales for resale . . ........ l.,zN 9.966 9,316 9,611 H,% 16 Off-sptem ules * . ... .... 6,868 9.%HO %.923 3.958 2.259 MiwetLncous . , , . ........ 6.386 9M (>jo25, 9.5_]6 9.190 Total electric. . . . ... . . 8 841,699 _$ 777,657 $ 7%7.937 $ 7HI,662 $ 70H.2%7 Gas:
Residenttal . . . ......... $ 87.362 $ 69.66H $ 65,965 $ 75,70H $ 6H,20H O>mmercial and industrial . . .. . 30,360 36.30% 37.9H2 41,944 37,332 Public Authorities. . .. ,.. 9,284 5,763 5,H21 6.905 6,283 Miweltanmus .....,... .... 974 HH9_ 923 931 78H lotal gas . . ............ 6 147,980 -
$ 10H,62% $ 110.69 i $ I25.491 $ 112.611 SAIJ3 (In thousands) '
llectric - KWil:
Resident tal . . . . . . . . . . . . . . . 6,142,014 5,606,699 5.2H7.4H3 $JM)$,292 4,H31,79 i O>mmercial and industrial . . 6,409,606 6.090,M7 5,HHl 461 i,601.4 l H 9,420,3H3 Street lighting . . ... . 97,339 99,42H 92,392 90.619 H7,567 Public Authorities. . ... .... 1,946,948 1.N54,042 1,765,72H 1,66H,HH i 1.619,005 hales for resale . . ..... .. ... 290,265 261,325 239,900 213,765 205,758 Off-sptem sales ' . . ... .. 381.331 347.129 236 M i 142.399 122.7N9 Total.........,. .... . 15,267.505 14,2 % ,290 134 W,92H I2.725.377 12,2H7.296 2
Gas - MCI:
Realdential. . . . . .. ... 13,752 12,902 12.488 13,921 13,397 Osmmercial and industrial . . .... .. 10,963 IO.6H3 10,%66 10.584 10,166 1%hlic Authorities. . . . . 2.071 ]1714, l.639 1.HO3 1.800
- Ibtal. . . . . ........ 26,786 -
29.303 24.693 26,30H 25,363 PURCllASI:1OR RI3AIA Iketric (1000) KWil " . . 438,107 345,107 327,0H2 70.977 292,686 Gas (ItXXI) MCF . . ..... . 27,673 25,927 21,975 27,I12 29.326 111CllllC GINI RAllON -
(1000) KWil ' & "' . . . . 15,659,321 14,761,996 13,945,516 13,431,916 12,710,278 Ilectric Gen. Capacity, KW (Gas) . . 2,430,000 2,430jMM) 2,100 AxW) 2,400fMM) 2,400AM M) llectric Gen. Capacity, KW (Gial). 1,385,000 1,3HijMM) 1,336,000 1,336JMMI 1.336JKM)
Ikctric Gen Capacity,KW(Nuclear) . . 700,000 700jMM) 700fMM) 700AMMI 700j100 111(TRIC PF.AK DEMAND - KW . 3,356,000 3.249,(XX) 3,0523100 2.90HJMM) 2 Hl7AMM)
NUMBER OF CUSTOMERS:
Iketric ... .. ...... . , . 528,739 919.269 506,646 491.?mi 4Hi,345 Gas.... . ........... . 300,185 299,167 2 %,200 292.241 290,497 R131DIATIAI. AVERAGl3:
Ikttric:
Rett nue per customer. . .,,
$ 862.33 $ 799.26 $ 786.6i $ Hl4.4 4 $ 7%6.5 i KWil per customer . . . . . . . . 13,306 12,431 12,007 11.62H I1.420 Reverme per KWil. ..,.. . , 6.484 6 434 6 Mt 7.004 6.62 <
Gas:
Revenue per customer. . . .. . $ 313.44 $ 237.20 $ 240.75 $ 279.13 $ 25396 MCF per customer . .. ... 49.3 46.6 4% 6 51.3 49.9 Revenue per MCF
, ..... $ 6.35 $ 9 09 $ 5.2H $ 5.44 $ 5 09
- Ifry7 includes $1w tin tinmsamts) amt 6h t10 Mall ofI'uelsuppited erwry tranu ttons wab a ulndesale cust<mwr
- 1993 includes Test I nery of 22tMi MallforJK Spruce PrrCommercial testing
- *
- 1997 does md include 2.259,699 Mttligerwration powided as part of thejoint hystems Operuting Agnsment with lil&l'
m W M TIES e
s h$
I'at Irgan N
Dr. I' rank Ilryant Chatnnan i1ce Chatnnan legan Iwperties l'hpician
' h Arthur Hojas I:merwn Gloria lealllernander TntstN Yntstee KVDFlY Suchy's 110wers and Gifts William IL Thornton IM1tficia Tntstee wg Mayor of San Antonio
l l
E E Arthur von Rosenberg General.tlanager Jasule A. Rochelle Assistant Genenst \lanager for Corporate hers tces and l'inance Kenneth J. I'ledler Assistant General.11anager for Custorner and l>istril>ution Servises Williasu C. Gunst hentor.11anager for Prwinction Joe O.Trevlho Assistant General.\lanager for hystens 1:ngineering and 1:ngineering hers ices Ralph IL Alonzo Wallace ll. Gel **ler Customer Sersices l'un is les hsmw tronard lilli l)istribullan """*"'""""
I)istrituution I:ngineering Steven tiralmer,Jr.
Administratter hers ices C liutchinson
, , ,., ,,,g,, a ng (9,,y,,,,,,(a,49,, Se,,4(,,,
Martin Clausewitz Generation Contmland.\larketing John J. leal Wirrk ik>rre Polity and Plarusing Anthony C. I'.dwards Donald R. schnitz iluman Resourres Gas inu I~leckenstein Nelson Clare
.tlaterials .\lanagement legal Sers ices Nick I' lores llarhara K. Stover Speciall>tstritmtion Pmjects Public Relations and.\larketing Paul Garu Donald S. Thomas l'Irld Administration l'inancial Services h Printed on Recycled Paper
- ee 44'
_i W s [.
IM5Ilox 1771
- San Antonio, Texas 78269 Phone:(210)97&2481 GeneralInformation * (210)97&2345 FinancialInformation
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