ML20237J683

North Carolina Electric Membership Cooperative Annual Rept, 1986

ML20237J683
Person / Time
Site:	Catawba
Issue date:	12/31/1986
From:	Hubbard J NORTH CAROLINA ELECTRIC MEMBERSHIP CORP.
To:
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ML20237J675	List: ML20237J672 ML20237J683 ML20237J695 ML20237J752
References
NUDOCS 8708180291
Download: ML20237J683 (25)

Text

l THEEMCAHUALREPORT1986

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On-line to serve you.That simple phrase, Reaching that milestone required the coopera ion which has been adopted as a symbolic theme for the and coordination of all member EMCs and all divisiors North Carolina statewide, characterizes the philosophy of the statewide to a degree never before contemplated underlying all statewide activities, in North Carolina. In reaching that important goal, all of All of us at the statewide are literally "on-line" us have gained a new appreciation for the value of work-to serve you. All of our efforts are focused on providing ing together to advance the cause of rural electrification.

important services to the 28 member cooperatives Other examples of our cooperatives cooperating across the state. with one another within the framework of the statewide The theme was selected by the Operations Re- organization emerged:

view Committee of the statewide boards from numerous

• When winter storms brought disruption of entries submitted by statewide employees. All statewide service in isolated areas, help was quickly employees are being encouraged to adopt this phrase as dispatched from other areas through the state-their personal work ethic. wide's emergency assistance program.

The phrase also serves as an appropriate theme

• When a portion of the total membership for this " accounting to our members" regarding 1986 needed the services of mobile substations, activities.The record of accomplishments for the past year, the board approved a program to fill tnat need.

as outlined on the following pages, gives testimony to our Meanwhile, the board also expended consider-commitment to continually be "on-line to serve you" able effort over an extended period in seeking consensus Among the goals attained in the past year, none on equity and fairness in rate policies.

is more significant than the strategic planning that was carried out by our stalf and adopted by our boards in 1986. ""~

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Through that process, the resources of the state- Q '

Ff" wide have been more sharply focused on the issues that P[

are most critical as the organization seeks to carry out b its intended mission. .g Chief among these issues is that of organiza- i\ '

tional effectiveness, in large measure, this translates into 4 managerial leadership that fosters both responsiveness >I- .N\

and accountability. We endeavor to offer such leadership by maintaining an organizational environment where "1 -- ' *.1 service to the members is ahvays paramount and where -[ [

the staff's performance is measured by results achieved r.  ;>

in their areas of accountability. s

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Our new theme is doubly appropriate for this {j report because Unit 2 of the Catawba Station went on-line {k j -

g in August,1986, marking the comp!ction of construction s ,

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on the largest project with which the statewide has been l associated thus far. *I i in addition, the statewide went on-line with the i final pieces of technology required for its k)ad manage- E

'h ment system. As a result, the system is now in place to

!y f coordinate the controlling of consumer appliances from -<

the mountains to the sea. s

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y+m gr Even though that issue remained unresolved at year's end, the time and energies that directors devoted to settling this question bodes well for the future of your federated power supply system. In the complex environ-ment in which the statewide must operate,it is not always possible to resolve every issue as every member would desire. However, that should not deter us from continuing to search for ways to improve the effectiveness of the total organization for the benefit of the member coopera-tives. Leaders of those cooperatives have clearly demon-strated a willingness to strive toward that end.

Meanwhile, another major achievement marking 1986 was the refinancing of a large portion of the G&T system's debt, reducing interest expense significantly.

Also,a great deal of progress was charted toward resolving the power supply needs of the EMCs in the Carolina Power and Light Company service area. How-ever, much remains to be done before this long-sought goal can be realized.

Major steps were taken in promoting the legis-lative interest of the membership at both state and federal levels.That progress was made because of your efforts at the grassroots level.Yet, much remains to be done as we face major legislative challenges in the months ahead.

Rising to those challenges in the interest of achieving our strategic objectives will require a prolonged effort on the part of "all hands" Finally, your support of the material supply and sales association allowed the organization to enter its second decade with record sales for 1986-in volume of merchandise shipped and in the total dollar-value of that merchandise.

Looking back,we believe the year 1986 left the EMCs and their statewide stronger and more effective than ever. As a result,we are allin a position to make great strides in the years ahead toward accomplishing our mission of service.The statewide staff is pledged to work toward that end,with your continued support and 9' :.-.f. gg.y VS -

direction,as we remain ahvays "on-line to serve you"

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,' fA JamesM.Hubbard Evecutive ViceIh>sident Q* . v 4

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ThellirectorsofMCAEC t

NCAECDfficers R W Blanchard,Itesident q '

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Dorris B. White, Vice4%esident EmmitI! Wood, Secretary-Treasurer

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AlbemarleEMC frenchBroadEMC RoanokeEMC Dorris B. White CharlesR 7biky Eugene tY Brown,Jr.

L.A. Harris, Jr. James \Y Ray Alatthew Grant f

BlueRidgeEMC Wayne D.Keller lialifaxEMC MichaelE Finney RutherfordEMC GaryA. Whitener

N JohnnieR Austin A.C Cox,Jr. Joseph N. Quinn N*

Ikuns.wickEMC liarkersislandEMC SouthRiverEMC DavidJ. Batten E liavisDavis Atarvin O. Alarshall FredA. Tedder Gearge L. Nelson KeslerC Buder NRECADirector CapellatterasIMC liaywoodEMC Surry3'adkinEMC Bob L. AfcDu/ Tie .

Clifton E Austin Jc>hn W Browning J.Kehy Hutchens RandalphEMC Jacks Gray Enunit R Wood Grady VNichols Carteretfraven EMC Jones:OnslowfMC TidelandEMC Eugene Claybome Alvin C Aforton Glenn A. Carowan

\VJ. Wynne, Jr. Hugh L. Batts CarrollAustin CenfralEMC Lumbee RivetEMC TrifountyIMC F L.ReidHarris Ronnie Hunt Roberts Hohnes Henry E Jones Elias Rogers LeslieJ. Bell CrescentEMC PeeDeeEMC UniouEMC DonaldD Rice EmmettS Patterson Philip L. Wally Henry C Gabriel RichardH. Johnson J. Grant Duncan ,

l DavidsonEMC PiedmaatEMC WaktEMC CEC. Director  !

H. \t'ayne Wilkins EarlJ. Ross JamesE Alangum,Jr; James H. Garner HasselB. Gann Richard C Roberts John A1.Ferrell RandolphEMC Edgecombe-Martinfo EMC Pitt&GreeneEMC Rudolph Sexton Alark A.Suggs W Kitchin Benson Horace Aloore EcurfnuntyEMC RandolphEMC EdwardE Brown,Jr. BobL. AlcDuffie R \VBlanchard,11: Charles 7eague

TheDirectorsofIICEMC NCEh1CDfficers RonnieE Hunt, Viceltesident WayneD.Keller, President y Fugene tV Brown, Jr., Secretary-Treasurer e ;0y t ",,",

l AlbemadeBiC DavidscaEMC Lumbee River EMC SoutttBivetEMC Danis B. tVhite H. tVayne \Vilkins RonnieHunt A1arvin O. Afarshall BlueRidgentC EdgecombeMarliaColMC PeeHenEMC SurtnYadkinEMC

\VayneD.Keller NoelLee,Jr. EmmettS Patterson J. KellyHutchens (

l BrunswickEMC Ecur County _EMC PiedmontEMC Tidelant.LEMC DavidJ. Batten EdwardE Brown, Jr. EarlJ. Ross Glenn A. Carawan CapellatterasEMC HalifaxB1C EitL&EreentEh1C Tri-CountylMC 1 Clifton E Austin AlichaelE Finney Afark A.Suggs Roberts Holmec 1

Carteret-CravenEMC Barkers.lslandEh1C RandolpbBiC UntonB1C David A1. Chadwick E HavisDavis Bob L. AlcDuffie Philip L. Wally CentralEMC Haywoodfh1C RoanokeBiC WakeIMC L. ReidHarris John W Browning Eugene W Brown,Jr. JamesE Alangum,Jr.

CrescentEMC Jones-Onslow EMC RuthedordEMC DonaldD. Rice Alvin C. Aforton Joseph N. Quinn TheDirectorsofTEMA -

TEMADfficers James E Alangum, Jr., Secretary-Heasurer RidtardH. Johnson, President

> ,, y gp Thomas Cockerham, ViceEyesident

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l BlueRidgeEMC Ecurfounty2MC CentralEMC 77tomas Cockerham R. \V Blandiard HenryE Jones Carteret-CravenEMC PeeDeeB1C TidelandEMC H. Eugene Claybome RichardH. Johnson Glenn A. Carowan DavidsonEMC RutherfordEMC WakeB1C HasselB. Gann Gary A. \Vhitener JamesE Alangum,Jr.

PowerSupply Drg; Leary

• Ibwer Supply Manager kpd Delivery of electric power on a reliable and cost- Load was centrally controlled in rate areas that competitive basis to the member EMCs has been the were bi' led on coincident peak.The EMCs in the Duke Power Supply Division's objective from the very beginning. Rate Area were already billed on that basis and the EMCs This objective has taken on real meaning since November in the NC Ibwer Rate Area were added in April 1986.

1983, when NCEMC became the power supplier for Plans call for the CP&L Rate Area EMCs to be converted 27 EMCs across North Carolina.1986 was a year in which at a later date. NCEMC controlled during the peak hours major power supply projects initiated several years ago in the Duke Rate Area 10 of 12 months,and 6 of 9 months were completed and became operational. in the NC Ibwer Rate Area.With the aid of the CCS, the Unit 2 of the Catawba project was completed and ability to predict and operate on all future monthly peaks began commercial operation on August 19,1986. (Earaer, will be enhanced.

on June 29,1985, Unit 1 became operational.) These After several years of discussion and negotiations, events culminated 14 years of construction beginning in NCEMC and CP&L arrived at an agreement in principle 1971.Under the Catawba Agreement,NCEMC purchased on plans for NCEMC to buy portions of three CP&L power 28.125 percent ownership (644 megawatts) of the plants and a load-ratio share of its bulk transmission Catawba Nuclear Station.The 10-year sellback schedule system.The agreement calls for buying a 13.2 percent called for the sale to Duke Power Company of 90 percent interest in the Brunswick Nuclear Plant and the coal. fired of the power output of Catawba l and 100 percent of Mayo Plant, and 10.7 percent interest in the Shearon Harris Catawba 2 in 1986. Prior to commercial operation of Nuclear Plant. NCEMC would also acquire 10.7 percent of Catawba 2, NCEMC received capacity and energy from CP&L's transmission facilities.The arrangements would McGuire's Unit 2 at one-half the capacity and output that provide significant savings for the EMCs and their NCEMC is now entitled to receive from Catawba 2. member / consumers, but just as important are the flexi-The first year of operation for the Catawbal unit bility and options that are opened up for other power ended approximately July 1,1986, with a capacity factor supply plans that could lower future power cost. lf the joint of 70 percent.The unit was taken off-line August 13 for its project can be worked out, NCEMC would add approxi-first refuel and maintenance outage that lasted 102 days, mately 400 megawatts to its present ownership of 644 causing the 1986 annual capacity factor to be 52 percent. megawatts of capacity purchased in 1981 from Duke Power Catawba 2,which had become commercial only 12 days Company. The agreement requires contract preparation earlier, experienced the failure of its main generator on to be completed sometime in mid-1987.

September 1.The unit was put back in service in a record The concern by EMCs in recent years for electric time of 77 days.The question of warranty coverage has system reliability, and in particular, the backup capability remained unresolved between General Electric, the for emergency outage of substation transformers, equipment vendor, and Duke Power Company. prompted NCEMC to seriously seek ways to provide that The Load Management project was another major service. Thirteen EMCs that have emergency coverage power supply project completed in 1986.The central needs, committed themselves to a pooling arrangement coordinating system (CCSj was installed in October and that incorporates the use of three existing mobile substa-became operational in December, completing all phases tions owned by EMCs,and the purchase of three new of the project. NCEMC now has in place a statewide mobile substation units. NCEMC will coordinate the use control system that has the capability to shed load during of these units, which are to be strategically located for opti-peak periods in each rate area, through 27 EMCs' load mum response to service needs. Plans call for the new management systems.The system may operate in a units to be purchased and placed in service the latter part remote or local mode, thereby preserving the indepen- of1987, along with existing units.

dence of each EMC. Over 30000 switches were installed in 1986, raising the cumulative total to 108,498.

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Growth in kilowatt demand was less than 1 per-cent on a total NCEMC basis in 1986.The NC Power Rate Ar ea experienced a 7 percent increase in load, but the other two rate areas had little change. However, KWH usage grew at a 9 percent rate over 1985.The 27 member EMCs were supplied their full service requirements with a moderate average increase in the revenue per KWH of 4.5 percent.This includes a reduction in the NC Power Rate Area of 8.9 percent.

1985 1986 1985 1986 Change From 1985 Rate Area M\JD MWD GWH GWH MWD GWH CP&L 783 794 3,022 3,351 1.4% 10.9 %

Duke 758 747 2,786 2,967 -1.5% 6.5%

NC Power 111 119 490 560 7.2% 14.3 %

NCEMC 1,6F2 1,660 6,309 6.878 .5% 9.0%

Average Cost ?/KWH 1985 1986 Change CP&l. 4.56 4.79 5.0 Duke 3.92 4.15 5.9 NC Power 3.94 3.59 -8.9 NCEMC 4.23 4.42 4.5

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There were a number of studies authorized by the p.

Board of Directors that were eitner in process from the D:::: J previous year, or actually approved in 1986:

(1) the NCEMC Rate Design Study, (2) Dual Fuel Heating,

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• Substantial progress was made in 1986 towards  :=:lll:=35555 iF ' '

achieving power supply objectives. Projects that were put 3 .5555 5 W in motion years ago became a reality. In other cases, plans and projects were begun in anticipation of supplying the

=M:::l:ll:  :::e ggjjj $ fe W total power needs of the membership.The mission is and 3:

g 0:gll;e ' % g@j' w%< " ' Q in7 will continue to be: delivery of electric power on a reliable x t .

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Finance & Accounting orric Italfi f*inannr & Arrouritirig Manager t - ')

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The Finance & Accounting Division provides accounting, tax, budgeting,and data processing support to the three statewide organizations (NCAEC, NCEMC and TEMA). Because of the magnitude of the dollars, the bulk of our time is normally spent on matters relating to NCEMv.

The initial construction phase of the Catawba Nuclear Station was basically completed in 1986. Unit 2 was placed in commercial operation on August 19, three months ahead of schedule. Under the terms of the applic-able contracts, NCEMC sold 90 percent of its entitlement from Unit 1, and 100 percent of its entitlement from Unit 2, to Dake Ibwer Company Total revenues for the year exceeded $484 million,of which almost $198 million was derived from Duke.

Tb date, we have borrowed approximately

$i.328 billion to finance the construction and initial fueling of the Catawba Nuclear Station.This amount is well below the revised loan budget of $1.501 billion.

Interest rates declined sharply during 1986. In March, NCEMC went long-term and fixed the interest rates on $998 million of FFB debt. At December 31,1986, the weighted average interest rate on this debt was 8.06 per-cent compared to 10.63 percent at the end of 1985.

Because of the revenue derived from Duke Ibwer Company, NCEMC is now subject to federal income taxes.

In 1986, we filed our first return, for the year enc ed December 31,1985. No taxes were currently payable, due to the use of accelerated depreciation for tax purposes.

This will be an area which will present continuing challenges to NCEMC.

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Tmn Bok h legal Counwl The year 1986 was highlighted by agreement,in years. Completion of Vepco's generating plant construction principle, between NCEMC and Carolina Ibwer and Light with the commercial operation of the company's Bath Company for purchase by NCEMC of interests in CP&L's County pumped storage project, federal income tax reduc-Harris, Brunswick and Mayo generating plants and of a tions resulting from theTax Reform Act of 1986 and load ratio interest in the bulk-transmission system in the declining interest rates were primarily responsible for the CP&L area. rate decreases.

A Memorandum of Understanding memorializing At year end,CP&L had jmt filed for a ietail rate the agreement was signed in mid-August,after months of increase of 13 percent and was preparing to file for a negotiations between the organizations.CP&L prepared wholesale rate increase of 16 percent to 18 percent.The the initial drafts of the four contracts that will flesh out the higher wholesale filing resulted from less Construction Memorandum of Understanding, delivering the last of the Work in Progress (_CW!P) being included in wholesale four contracts to NCEMC in mid-December. rates,all of which means that the retailincrease was lower, The NCEMC negotiating team is currently working since retail customers had already been paying higher on revisions to the CP&L drafts and is preparing for final rates, because of more CWIP in their rate base.

contract negotiations. Meanwhile, the antitrust suit against Ad valorem tax appeals during the year resulted CP&L was stayed by agreement of the parties, pending in considerable savings for those cooperatives who par-completion of the negotiations. ticipated.

By year end, agreement had been reached with Giving due consideration to all the accomplish-Virginia Electric and Ibwer Company (VEPCO) for the ments of NCEMC, NCAEC and TEMA,the year 1986 was third successive wholesale rate decrease in as many indeed a busy and productive year for the Legal Division.

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Association &CorporateServices David Wilhams

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. Association & Corp > rate services Manager 6 .

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As our organization continued to grow in 1986,so did the responsibilities of this division. During the year,we p[ - m w continued to see new names and faces in the member- S'g" f .,

ship, increasing the demr . ior administrative, manage- r '

M ment and technical training. L Throughout the year, this division worked closely M 4 with the Executive Vice President in developing and imple- <

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menting a sirategic plan for the statewide. Specific ' '

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responsibilities include training both within the statewide '

H and a nong the membership; implementation of participa- '

!i t : . d tory management progam; and revising the performance s 'f appraisal system?On LineTo Serve You" was chosen by the operations review committee as the theme for the  :

statewide employees. implementation of the theme will be i 4 an important activity in 1987. But far more important than the theme will be understanding and adhering to the con-cept that it promotes-the role of statewide employees in i serving member cooperatives.

Administration includes purchasing of office supplies, records management, receptionist, personnel, employee benefits and building maintenance services.We  ;-

have accomplished our goal of maintaining a minimum inventory of office supplies because of the availability of y vendors in the areaM'e continued to save money on paper .

supplies by negotiating bill-hold arrangements with sup- -

pliers. In the latter part of the year,a filing manual that meets the needs of all statewide divisions was approved 1 for implementation. -

Ibrsonnel Development conducted comprehen- -

4, sive orientation sessions for all new employees at the - Q statewide. it also administered the wage and salary plan and emioyee benefits and internal training. NRECA dental plan was implemented this year with premiums to be paid Job Training and Safety continued to deliver the by employees.The annual EMC wage and salary survey safety message that is so important in the rural electric )

was also conducted, compiled and returned to members program. Special emphasis was again placed on the who participated. apprentice schools for linemen which exceeded all ibrsonnel Development trained 734 employees in previous attendance records, with 127 linemen attend-14 programs, including the largest orientation session for ing. Safety is an important part of all technical schools new employees in several years. Orientation, conferences and conferences.

i anel training programs pointed up the large number of in 1986, over 1,100 member-employees attended new employees in the rural electric program in North 23 conferences and training programs offered through Carolina.We will continue to respond to the new genera- Association and Corporate Sersices. Nearly 400 safety tion of EMC employees,as well as all others participating visits were held at the 28 EMCs around the state.

in statewide training programs.

L_ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - - - - - - - - - - - _ - - - - - - - - - . -

MaledalSupply i Lewis nobson j Wieriat supply Wnager j s

l r 4 , ,

TheTarheel Electric Membership Association.the ay,x -

$yx4Kasy. 7 material supply division of the statewide association, j.

received revenues exceeding $25,000,000 during the past i d '

Wtt 4: '

year-our highest to date. Margins of $90'1,684 were ,y^? W 7.? W " + . ' . >

earned and will be returned to members in the form of ' 4-#Bf i . ' *j -

J

-J cash and patronage certificates. s .

During the year, seed notes totaling $338,000 were p .<;  !

retired to members,and the Board of Directors authorized Cl . .. 11j(Nbx

- :p the retirement of $747,873 to members and non-members

- for margins produced during the years 1978 and 1979. Total y' of fl " Y

,t ~@

fj operating expenses were well within budget projections f ' e N

't]. M; ?

and actually lower than the previous year,as we continued to assert our efforts toward efficiency and cost control. [

t

~

Member systems utilized the senices of the S

,. M~>~ . I s J central warehouse to the extent that on an average inven- g h tory value of $2,452,000, inventory turnover was achieved h* i .

f

every 71.5 daysJrwelve million pounds of conductor, trans-formers, hardware and related construction and main-PJ 1 %4WP*3 A . 1 ,

"~ -

tenance materials and supplies,were shipped to members from theTarheel Drive warehouse.This represented approximately 55 percent of our total revenue.

The above statistics ieflect the attitude of support _

~

by member systems and the success of the material -

supply program can be graded only by that support. C sf; Much emphasis has been placed on reacting to . .T 1.

the material supply and ser ice requirements of our mem- r _ fJ' -

bers so that they can respond to the local member /  ; 9u ~

1 #

consumers as efficiently as possible.The Emergency Work -

o .

Plan was implemented and coordinated by the TEMA -  :

staff,as construction crews from member systems com- 7 4.- . ,

bined efforts to assist neighbor cooperatives in reston,ng service when ice, freezing rain and wind storms down F- .

power lines. Battling the elements and difficult terrain, co-op personnel worked many long hours to restore electric , E service. -

We are most appreciative of the support afforded l

us by the member systems and continue our pledge of . .f ,

assistance to our members;We will use our best efforts to ~"

i 2

maintain,opeiate and develop your materials program in ' . .;

a most effective and efficient manner. In a very real sense

? j" you will find us"on line to serve you" - *- - '

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PublicAffairs Janes Lee Burrry l 7 ,

Public AlfWrs Markiger j

~ '

l In the Public Affairs Division,1986 was marked by Meanwhile, NCAEC once again mounted a suc-  ;

continued emphasis on assistance to member EMCs in cessful lobbying campaign in the North Carolina General  !

various areas of endeavor and by responses to critical Assembly to preserve the N.C. Rural Electrification Auth-state and national developments that could affect the rural ority as an agency of the N.C. Department of Commerce.

. electric program in North Carolina. Assistance to the EMCs ran the gamut from work-Government relations activities and information shop training programs for co-op member services per-services were regularly focused on these developments, sonnel to the preparation of a cookbook that will be sold as the statewide joined other elements of the rural electric to raise funds for the Women's Advisory Committee's movement in rallying support for the program in the face annualYouthTour scholarship, of opposition from within the federal government. The training took the form of a statewide member Among the projects undertaken in this context were: services conference, which drew 40 participants from 22

• Federal government relations efforts and a EMCs,and 11 mini-conference sessions covering four public information campaign were co-ordinated topics: annual meetings, newsletters, special programs in response to a misleading portrait of the and working with consumers.These sessions, which program that was presented to Congress and attracted a cumulative total of 140 participants, were held {

the American people.The campaign included at various EMCs across the state.

letters-to-the-editor that were published by in addition, a special workshop on telephone various newspapers,special news media etiquette was developed for use with co-op personnel releases and material in our own monthly and statewide employees.

consumer magazine, Carolina Country. The cookbook was compiled from recipes

• A concerted elfort was mounted in Congress to submitted by co-op employees and members of the buiki support for a proposal that would allow various EMC women's committees. Proceeds from the generating and transmission cooperatives,like sale of the book will support the Women's Advisory NCEMC, to refinance high-interest /long-term Committee's Gwyn B. Price Scholarship, a $1,000 award government loans at lower prevailing market which is presented annually to a participant in the rates. Congress adopted the legislation, but the previous year's Youth Tour to Washington.

administration has since established stringent Other activities related to the women's program regulations which have made refinancing an included coordination of the annual Women's Fall Forum option for only a few G&Ts across the country. workshop,which involved 45 participants from 10 EMCs. i e Another criticalissue that required attention in The workshop included a tour of the Catawba Nuclear Congress was the 1986 Tax Reform Act.Consid- Plant near Charlotte, a facility that is jointly owned by erable effort was expended to help minimize North Carolina EMC, Duke Power Company and others.

the adverse effects of this legislation on NCEMC and other G&Ts.

• Against this background of controversy, important relationships were established with candidates for the U.S. House of Representa-tives and the U.S. Senate through an extended election campaign.

1

Other emphases in the member services / prng  : myqqyr infonnation services area included: bt@p.- rmmngq::mgygrgmewgyyg y fag'@iH4p*,gybg

• Working with State Department of public N1%6 M '

< 49 w ea

~

• @4 instruction personnelin the preparation of a $ N!.

p[f^ '~@dil7%; <

video tape version of the historical slide presen- g$h ;g tation that was prepared in 1985 to mark the y at 8 50th Anniversary of the Rural Electrification Administration. L

• Establishment of a coordinated system for providing materials to EMCs from the state-wide's centrallibrary of films, audio-visuals and video tapes. In addition, the library was aug-mented through the purchase of new films.

• preparation of the 1986 Directory ofEMCsin a new binder format that facilitates periodic updating. y,

• Coordination was provided for the display of original art that is being given by the EMCs for a permanent collection for the statewide head- i quarters building. A painting from the collec-tion-Rasmussen's " Oyster Bay"-was made available on loan to the Greater Raleigh Chamber of Commerce for exhibit at the chamber's new headquarters in September.

• Newsletters were published regulady to keep various audiences within the rural electric family abreast of the activities of the statewide and niember cooperatives.

• A total of 38 young people representing 17 EMCs participated in the annual Rural Electric Youth'Ibur to Washington in June.The partici-pants set up their own " soda pop co-op" to supply themselves with sof t drinks during the trip, organizing a board of directors and naming a manager and an assistant manager to oversee the co-op. At trip's end, the co-op was dissolved and capital credits were returned to the members.

For Carolina Country, the past year was notably marked by extraordinary success in advertising sales, as ad revenues exceeded budget projections.The additional revenue effectively offset much of a huge increase in postage rates that went into effect in January,1986. In addition, subscription rates charged to the EMCs were

'; 1 ,

maintained comfortably below the established ceiling rate

".. p of $2.28 per year.

Meaawhile efforts to bolster ad sales yielded

' l;f significant results,with several new clients making com-mitments to multiple-issue contracts. Also, planning advanced substantially in regard to a new program that will market the magazine's ad soace,along with that of 5l several other rural electric publications,as part of a regional group.

The magazine's editorial content again focused WQ 4/'

primarily on local, state and national developments

-ram _.- .* A M* aflecting the rural electric program.Special coverage was The North Carolina Zoo in Asheboro has been served by provided for the primary and general elections, for the 10th Randolph EMC since 1977. Anniversary of the statewide's central purchasing and materials supply system and for the initial agreement on joint ownership of facilities by NCEMC and Carolina Ibwer and Light Company.

In economic and community development, the record of accomplishments for the EMCs in 1986 is out-

,, standing,especially in view of the fact that it was not a

, banner year for the state with regard to industrial /

i commercial plant locations.

Eight important new facilities were established in Several national honors were bestowed on EMC territories during 1986: projects of the statewide during1986.

o Crescent EMC,Statesville, managed to bring in The oral history project and resulting book, Living the choicest " catch" among the cooperatives History, received two awards: a first place NOVA award during 1986: the NCNB IndustriaVCommercial presented by the National Rural Electric Women's Associ-Park, north of Charlotte.The park's first client,a ation and a first place Gold Circle Award from the Ameri-Japanese manufacturer of frozen dough can Society of Association Executives.

products,is already in place.The $13 million Meanwhile, the statewide magazine, Carolina facility willemploy 250 people. Country, picked up honor; in two competitions.

Elsewhere in Crescent's territory, the co-op will The magazine won two awards in a contest spon-he serving a large facility of Jockey Intema- sored by the National Electric Cooperative Editorial tional. It's projected to employ several hundred. Association.They cited news articles and subject treat-

• I\vo plants were located in territory served by ment of rural electric issues.The publication also was Carteret-Craven EMC, Morehead City,They are rated sixth in the nation in the annual Haggard Award a polishing and close-tolerance manufacturing competition for statewide publications, sponsored by the operation serving the aero-space industries and National Rural Electric Cooperative Association.

a fiberglass boat manufacturing plant.The former,a facility of R. A. Precision Products of New Jersey, will provide jobs for 100 people in two shifts.The boat facility, built by Parker Marine Company, will employ 20 people.

• Piedmont EMC,Hillsborough,will serye the entire residential area of Treyburn,a planned i community that is projected to include 5,000 households. ,

• Lumbee River EMC, Red Springs,will serve t Hoke County Rubber Products, a manufacturer ,

j of tire envelopes.This three-shift operation,  ?

which has an average monthly demand of slightly less than 1,000 KW,will employ 100 people.

• Central EMC, Sanford, will serve the tc wer and transmitter for WKFI'-TV, Channel 40, which is based in Fayetteville. it operates wi'h an average monthly demand of 600 KW and an average monthly KWH of 407,000. *

• Randolph EMC, Asheboro,will serve a large * > - '

shopping center on the outskirts of Asheboro.

The 300,000-square-foot project will feature a variety of shops and food-related stores that willinvolve heavy use of refrigeration.

CreditUnion ~

t.ee Fogle Oedit thsm Manager W

t tf Progress continued at EMC Employees Credit Union during 1986.Your Credit Union's record of growth was as persistent this past year as in previous years.

Assets increased over 11 percent to $8 million; loans grew 20 percent to near $5.9 million; deposits increased steadily to $7.8 million, up 12 percent; and our member-ship increased 6 percent to 3,390.

Our Credit Union remains financially stable and sound with the book value of the savings dollar worth well over $1.03 This solvency has been maintained even through a year of low investment eamings due to extremely low interest rates, coupled with a partial write down of our insurance deposit with our former savings insurer.Your Credit Union continues to thrive and progress, even in our very complicated deregulated economic environment.

This certainly reflects well on the financial future of our organization.

Your Credit Union board, committees, manage-  !

ment and staff continue to be enthusiastically committed to long-term planning and goal-setting.We are making great strides in fulfilling our mission statement of providing "a full range of personalized financial senices through a friendly, courteous, competent and financially sound at ganization" During 1986, we accomplished 88 percent, or 29 of 33,of our short term goals,as we worked toward completion of our five-year plan.

Majm accomplishments this past year include:

improved marketing materials on services available to ,

members; an up-to-date audio / slide and video presenta- )

tion; a new minor's club for children age 6-12; increased 1 stalf training programs;implemaatation of a home equity i loan program; and the beginnings of a written history and l scrapbook. Pians in the immediate future call for research i into the possibility of offering a purchase money-mortgage  ;

loan program, and an increased co-op visitation program.

A recent membership survey, completed this fall.

' reveals an 80 percent membership approval rating of either good or excellent.This sort of success can only be achieved from the support your Credit Union receives from the statewide organization and the cooperatives.We sincerely appreciate this support and your cooperation.

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TheFinancialliighIghts ofilCAEC NORT H CAROLINA ASSOCIATION OF ELECTRIC COOPERATIVE S NORTH CAROLINA ASSOCIATION OF ELECTRIC COOPERATIVES STATEMENT OF OPERATIONS AND MEMBER EQUITY BALANCE SHEET For the years ended December 31,1986 and 1985 For the years ended December 31J986 and 1985 (Unaudited) (Unaudited) 1986 1985 ASSETS 1986 1985 Operating Income Current Aasets Dues. $1,083,662 1,014.475 Cash . $ 182,807 - 218.748 Publicationincone. . 975 168,6 877.74_6 Accounts Receivable (Net) . . 326,210 220,474 inventones . . 12,774 26.392 T;talOperatingincome . , _2 059,348 1.892.221 PrepaidExpenses . 17,411 11.460 Operating Expenses TotalCurrent Assets .

__53y0,2 477.074 Administrative and General. 1,239,789 1.261.299 Pubhcation Expense. 814,938 718.556 Fixed Assets Office Furniture and Fixtures . 123,677 113.811 T:talOperating Expenses . 2,054,727 1.979,855 Vehicles . . 70,125 61,427 Operatingincome (Losst 4,621 (87,634) 193,802 175.238 Otherincome(Expenses) '

Interestincome. 12,440 15.876 101,427 TotalFixed Aseets. 100.235 interest Expense. , (3,077) (3,130)

OtherAseeis T3talOthorincome (Expenses) . 9,363 12.746 Deferred Charges - Past Service Cost.

Pension Plan. 29,283 35.139 Net Margin (Loss) , 13,984 (74,888) Deferred Compensation Fund. 99,730 70.991 Membership Equity- Beginning of Year 40743 482.306 Membuship Certificates. 200 200 MImbership Equity-End of Year. $ 421/02 407,418 Totalother Assets , 129,213 106.330 Total Assets. 6,,_769842 683.639 LIABILITIES AND EQUITY Current Liabilities Note Payable-Current Portion . S 990 935 Accounts Payable- 120,499 79.913 Accrued Liabilities . 42,$20 38.691 Uneamed income. 30 600 30.600 TotalCurrent Liabilities. 194,609 150.139 Long Term Debt Note Payable . 54,391 55.326 Less CurrentPortion. 990 935 TotalLongTermDebt . 53,401 54.391 Deferred Compensation Reserve . 99,730 70.991 TotalLlabilities 347,740 __275.521, Equity MembershipFees . 700 700 Members' Equity _ 4212402 407418 TotalEquity . 422,102 408,118 TotalLlabilities and Equity $ 7692 842 683.639

TheFinancia liighIghts ofIICENC

' NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION NORTH CAROLINA ELECTRIC MEMBERSHIP CORPORATION STATEMENT OF OPERATIONS AND PATRONAGE CAPITAL BALANCE SHEET <

For the years ended Decembei 31,1986 and 1985 For the years ended December 31,1986 and 1985 l

.(Unaudited) (Unaudited) 1986 1985 ASSETS 1986 1985 Operzting Revenues Utility Plant Electricenergyrevenues . $484,511,854 352,799,062 Property. plant and equipment. $1,370,742,890 722.661,178 Otheroperatingre enue. 2,201 7,141 Less: Accumulated depreciation. (74,658,106) (22.857.397)

TotilOperating Revenues . 484,514,055 352.806.203 1,296,084,694 699.803,781 Oper: ting Expenses Production , , 37,981,359 17246.264 TotalUtility Plant . 1,313.084,951 1,289.515.991 Cost of purchased power . 293,068,510 263.699,073 Transmissionexpenses . 11,876,767 11,559,021 Other Assets Administrative and generalexpenses . 2,926,775 2,498.453 inve stmentsin associated 3,280,695 o banizations . 7,592,417 7.479.595 Maintenance . 13,664,563 Depreciation. . 37,006,788 13,576.419 Current Assets Taxes.otherthanincome taxes . 4,021,923 368,248 Cash . 144,986 1,482,186 400,446,685 312,828.173 Special deposits. 26,857,322 25.754.411 TottiOperating Expenses .

Temporary cash investmen's. 52,056,780 6.981,000 Opersting Margin . 84,067,370 39.978.030 Accounts receivable. 44,965,974 30.560,948 Other cunent assets . 27,793 47.520 Othtrincome Interest . 3,425,094 1.006,287 TotalCurrent Assets . 124,0521855 64.826,065 Other . 214,986 315.905 Deferred Charges . 21,389,814 8.005.294 TotzlOtherincome . 3,640,080 1.322.192 $1,466,120,037 1,369.826,945 Inttrsst Charges

- Totalinterest expense . 114,838.367 127,134.567 EOUlTIES AND LIABILITIES Less lnterestchargedtoconstruction. (34,712,734) (90.757.993)

Amorteahon of debt expense . 731195- 560.fi82 MembershipFees . $ 700 700 80,856,628 36,937.256 Patroriage Capitat. 15,594,331 8.743.509 TotilinterestChar9es .

6,850,822 4.362,966 TotalEquities . 15,595,031 8.744.209 N1t Mtrgin . ,

Patronage Capital- Beginning of Year . 8,743,509 4.380.543 Long Term Debt . 1,393,620,828 1.337,890.380 Patronage Capital-End of Year. $ 15,594,331 8.743.509 Notes papible . <

- 949,232 .

Accounts Payable-l Trade . 34,751,585 17.561,267 l_

AffikatedCompanies . 103,709 49.627 Interest accrued . 1,466,102 1.995.294 Otheraccruedexpenses . 944,153 334.389 TotalCurrent Liabilities 37,265,549, 20.889.809 Deferred Credits . 19,638829 2.302.547

$1,4_6612_0,037, 1.369,826.945 1

l-l ___-_____-____.____w

TheFinancia Highichts ofTEMA TARHEEL ELECTRIC MEMBERSHIP ASSOCIATION.INC. TARHEEL ELECTRIC MEMBERSHIP ASSOCIATION. INC.

8TATEMENT OF OPERATIONS AND PATRONAGE CAPITAL BALANCE SHEET For the years ended December 31,1986 and 1985 For the years ended December 31,1986 and 1985 (Unaudited) (Unaudited) 1986 1985 ASSETS _ 1986 1985 Siles(Nett. 1 , $25,020,818 21,827,341 Current Assets Cash . $ 374,006 1,167,789 Ccst of Goods Sold Accounts Receivable-Trado . 1,701,186 1,473,575 l Deginning inventory . 1,838,408 1,707,853 Accounts Receivable-Other . 13,688 3,759 {

Purchase (Net) . 23,879,737 20.609.915 Inventones , 2,095,445 1,838,408 penses . 222503 20 2 25,718,145 22.317,768 Less:Endinginventory , _2,095,445 1.838.408 Fixed Assets htalCost of Goods So,d . 23,622 3 20,479,360 Office Fumiture and Fixtures . 46,984 45.068 Vehicles 34,552 36,013 Gross Margin . 1,398,118 1,347,981 Warehouse Equipment. 101,403 88,197 Operating Expenses. 665,529 634,368 Buildings . 521,833 521,833 OperatingMargin . 732,509 713.613 704,772 692,011 Otherincome Less: Accumulated Depreciation . 295,527 270,502 interestincome. 78,810 95,285 409,245 421,509 Miscellaneousincome . 101,084 133.044 L.and. 157,250 157,250 TotalOtherincome . 1791894 228.329 TotalFixed Assets. 566,495 578,759 Intirest Expense. 7,799 71,119 Cther Assets . _.158,512 124.960 4 Net Margin . 904,684 870,823 Total Assets. $4,93_1835 2

5.207,511 PattonageCapital-Beginningof Year, 3,666,868 2,971.042 Change in ACRS Depreciation Reserve. (2,777) (1,040)

Less. LIABILITIES Retirement of Paltonage Certificates . 747,873 -

Current Liabilities Patronage CapitalReclassified to Netes Paya'a le-Current Portion . $ 22,000 338,000 CurrentLiabilities . 175,421 173,957 Accounts Payable. 1,022,480 956,823 P;tronage Capital-End of Year. $ 3,645,481 3.666.868 Accrued Liabilities . 62,567 48,755 Patronage CapitalPayable . 175,421 173.957  ;

TotalCurrent Liabilities. 1,282,468 1,517,535 Long Term Debt Note Payable to Members. -

22.000 TotalLong Term Debt . -

22.000 ]

Reserve for ACRS Depreciation - 3,186 408 TotalLlabilities _12285,654 1,539,943 Equity Membershipfees . 700 700 j Patronage Capital. 3,645,481 3,666,868  ;

Total Equity 3,6461181, 3,667,568 TotalLlabilities and Equity . $4,931835 1

5.207,511 l

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llorthCarolina's ElectricMembership Corporations

1. AlbemarleEAIC,Hertford - 15. Jones-Onslow EAIC, Jacksonville 2.BlueRidgeEAIC,Lenoir 16. LumbeeRiverEAIC,RedSprings

3. Brunswick EAIC,Shallotte Ii PeeDeeEAIC, tAbdesborv

4. CapeHatterasEAIC, Burton 18. PiedmontEAIC,Hillsborough

5. Car teret-Craven EA1C, Aforehead City 19. Pitt& GreeneEAIC,Farmville

6. CentralEA1C,Sanford 20. Randolph EAIC, Asheboro i CrescentEAIC,Statesville 21. RoanokeEAIC,RichSquare

8. Davidson EAll'Lexington 22. RutherfordEAIC, Forest City

9. Edgecombe-Alartin Co. EAIC, Tarboro 23. South RicciE91C,Dunn

10. FourCountyEAIC,Burgaw 24. SwryNadkin EAIC, Dobson

11. French BroadEA1C, Afarshall 25. TidelandEAIC, Pantego

12. IkditaxEAIC,Enfield 26. Tri-Conno'EAIC,Dudley

13. Harkers Island EAIC, Harkers Island 27 UnionEAIC, Afonroe

14. HayucodEAIC, \\bynesville 28 \YakeEAIC,\\bkeForest s

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North Camlina Association ofElectric Cooperatives. Inc North Carolina Electric Alembership Corporation 7brheelEk?ctrichtembership Association,Inc 3400 Sumner Blvd,20. Box 2D06, Raleigh, NC27611

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