ML20248E880
| ML20248E880 | |
| Person / Time | |
|---|---|
| Site: | Catawba  |
| Issue date: | 12/31/1988 |
| From: | Bauer J, Lanford J PIEDMONT MUNICIPAL POWER AGENCY |
| To: | |
| Shared Package | |
| ML20248E878 | List: |
| References | |
| NUDOCS 8910060084 | |
| Download: ML20248E880 (43) | |
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. t A N N U A L P '
R E P O R T .1
~ i ,a PIEDMONT LL MENICIPAL L :
L POWER 1 .
3
'. ~
f AGENCYL ?
i Sources of Funds ! .
- $174.1 Milflon .
1 c, ,
AilllEVII.LE u
CLIN 1UN EASI.EY g ,
l GAFFNEY l \ m l GREEll l LAURENS s Investmen'tu !.
NEWBERRY , 13.7% '
I l HOCK lilLL >
! -, ,-e UNION Uses of Funds; . .,
l $166.4 Million ; ,
4 '
WESTMINSTER 3Mmini.iraine -
. & General .
..e ! 9% : "
.
- Other' l
l'111% u asJormed as ajoint action apener andfirst delivered Q4N pouer in 1985 The ten-county region in South Carv!ina that is l'aYmcut*
, home to P.11/Ws ter, participating cities continues to gnne bnond ' jk,","l' the expectations ofplanners. This is reflected by increasing popu- \ - 1,4% :
lation and burgeoning industrini de,>elopment. P.111% is wildly Trans committed to assisting in the grou th < fall ten member cities. I"['y" t
4
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PMPA Members Dernand and Energy Growth Peak Demand (kW)
.3_ The Piedmont Municipal Power Agency provides a stable and reliable souxe of electric power at competitive rates to its ten member cities, making them more attractive to new industry and ws* -
. fostering economic development. The wbole region benefits from the presence of PMPA, which in turn benefits from the area's strong g ,c y + ,, . growth. In 1988, many new industries discovered the region's good
-- +
2oosio - business environment and existing industries prospered. PMPA is !
2 proud to be a vital part of this area's continuing success story.
PMPA began wben the ten municipalities of Abbeville, Clinton, umne -
Easley, Gaffney, Greer, Laurens, New berry, Rock 11i11, Union, and Westminsterjoined forces, forming the Agency to provide their communities with plentiful electric power under public control. In 1987 1988 1984, PMPA made the decision to purchase a 25-pervent oAl,16ctille 7,101 8.991 undivided interest in Unit #2 of Duke Power Company's Catawba e Clinton 21,437 '.'6.467 e Eoiey 37,688 42.372 Nuc! car Station, near Hock Hill. While 21 municipalities in South 4 Gaffnev 34,128 37,606 e Gree'r 30,267 32,063 Carolina depend on public power to meet their needs, PMPA is the Slaurenn 19,622 20,237 .
O Newl.crry 27.249 28,351 only municipal power supph.er uhich also has a share m. its actual O llock Ilill 88.811 96.360 production. PMPA now provides electricity to its member cities, o Union 26,715 28.819 O Wr*tminster 5.0't4 5.742 whkh then wilit through their own distribution systems.
PMPA Tetala 301.052 327,008 Hecause PMPA is owned by the communities it senes, it has a Special commitment to local needs. PMPA is an extension of the Energy Usage (MWh) i,5ouum - neighborhoods it serves. And PMPA tries to be a good neighbor.
Since PMPA is a non. profit municipal corporation, the funds stay in the communitv. These returned profits are used by PMPA e
t unisio - b .
Se: members for infrastructure improvements, lower p:operty taxes, and to provide city services that would otherwise not hme been mailable. These benefits enhance the quality oflife and create a S* ** - fasorable business environment, giving PMPA membcrs a com, 1
petitive edge from industry's perspective.
When industry seeks to expand, it considers many aspects of a
" community. Important factors include a quality work force, a sup-3937 }933 O Al l.crille 42,447 47,621 portive business environment, ready access to transportation, and a e Clinton i12,783 112,631
- Euley 187,423 194,570 good quality oflife. It also requires affordable and n> liable power,
& Gaffney 165,922 174,352 e Greer 147,432 150,281 0Iaurenn 88,521 86,942 0 Newl.crry 130,117 131,992 O Ilock llill 432,616 450,049 e Union 116,450 118,486
@ Westminster 25,6ft9 26.046 PMPA Totals 1,419,433 1,493.000
The PMPA region meets al8 of these qualifn:ations. No wunder, the n, that it is home to 36 plants b I :c Cng to Fortune 500 companies. And home-gmwn industries continue to prosper and expand.
In return, industrial growth can enrich a community, bringing jobs
> 1988 and brightening the economic outlook for the future. The infusion of Capital new capittd helps existing businesses flourish, while related industrie, investments and Jobs
) often move in, also contributing to growth. The community benefits Created from a broader tax base, and the citirnry enjoy a more stable, diver- by County
- 3 sified economy, less subject to the market fluctuations of a single in-dustry. Education, medical care, rec ~ational facilities, and quality of N "'"b"'
County ofJohn C"*"I(tt3"o"oo*") "eata life allimprove. The future of the community and its residents is secured. 9 Abbn ale 265 s i,295 5 Chrrokre 2 62 36,202
. Security can even come when a specific industry chooses to locate 3 Greenvale 1,746 230.hn 7 I.aurenn 22'l 32.630 outside the hervice territory of a PMPA member, but near the member to 3,.berr3 ici 9,223
. I Oconce 579 70.575 city. In this case, the en.y wdl std. l benefit from that plant and the 2 P a en. ni 6,97, resuhing increase in local economic activity. 4 4""""I"A 2 727 4123H Il l'nion 135 timb The PMPA region has an added advantage in attracting desirable 6 Yark 475 127,142 industry. Experts predict during the mid-1990s that there will be a 6 595 8935 159 serious shortage of electric power. The northeastern portion of the Um.ted States is already feeling the crunch, which wd. l soon extend to New and Expanding Companies Announcing Capitat investment most of the country. Only those communities with access to generating in PMPA Area By City,1988*
facilities, like PMPA's members, will have an abundance of affordable P]QFCC;R yyMF power. Those regions with a high dependence on fossil fuel plants, pb_Wbd n- cn vs r 7 Q {h Db k D,. n .,- xn , ,b ki w which is aPIiroximatelY75% of the country, will be hardest hit. PMPA's S ' Ch"a""mA.
ea u -
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me-W. mm.W.%L hee ma
~r C " (.aum, nna E 10 member cities have a low dependence on fossil fuels, which make 4 Cass% ey ' yN Janente~eiedeq ;. L~ ^; e;A 1 them very appealing to industry.
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, w. Mhlngr- .e cae in 1988, many firms, recognizing the benefits of locathg in the Q ,"l"3,f g ggy '
PMPA region, opened new plants and expanded existing operations. N' f AN Each week, more capital investment announcements are made, g ' _ ggy ' i strengthening the local economics and providing PMPA with desirabh, long-term customers.
p .. N Nf[Ganader" a L e, d %"; a w e h ,Tsarten h uah a il ha Air de
,gh weg I,MPA is proud to be part of the rep.on s growth, and is committed to YLeiaMmUp MQi;intasanconfessiET
, Lyy, annyn .s a g! L . u,m, m n n.m # ~ u ,m m a providing energy leadership for the continu:ng economic development pNewburylb Aenensesfiberan(n~W~m; y-L fk. nM,NlfQhOnine9WdneM., fg of allits member cities.
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- Source: South Caruhna State Develoinnent flourd
I W PMP4 region isfortunate to have I many eaktingindustrialgiants u hich har e l eapanded throughout the years, gis ing ]
economic strength and stability to the .
surn>unding area thn> ugh jobs and l investments. The past year saw healthy ,
gn>u th tu neu firms, recogruzing the available resources andfavoruble bruiness l climats chme to open neu facilitses in and around the region. 1 In addition, growth has spurred infra. _
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structure irnpnn ements ir+ ihe area. Impron- l ed roads and upgraded transportation
, l systerra only add to the region's I attractiveness. l
&onomic development also enhances the x y- py' ~ , j- b t, ef ,NR f n W ~ < + $y _I & ?&g/
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qunlity ofhfe. The PMP4 region's citizern > !
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tion, more places to shop and more mer- %g;
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A care and educational opporturuties, a better climatefor the arts, and increwed spending _"'/s, ~g nhf r 1 g&V I poscrr .
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tions US manufactur- Pelham Road All of ing plantin 1973 The the companfs U S. truck tires are manu- )
French company co+ manufactunng pl ants f actured in Spartan- track is situated on adated and moved except one are located burg in addition. 2.500 acres in Laurens.
its off aes from New in South Catchna Michehn's seme MARC, which stands York to Greenvme in Mrchehn is the largest tinished matenals for Michelin Amencas 1985 making Green. industnal taxpayer in plant. where rubber is Research and Develop-ville headquarters for the State. 5 The compounded and steel ment Corporation. is also kamd in the up-Michehn Tire Corpora- PMPA region benefits wire prepared for radial state 5 Michehn tion North Amenca from its c!ose proximity tire prodJction. is in employs more than The establishment o' to many of M;chehns Anderson Th:s plant 5.000 people ir. Its corporate head- operat:ons Radial feeds all of Mtchehns upstate operations for cuarters in Greenv*e passenger car tires are manufactunng plants a totalof apprommately resulted in a new $30 manufactured in in the U.S and Canada 7.000 people in the m@on. 271.000 square Greenvae and Lex- 5 Michehn's only state Michekn employs foot facihty at I-85 and ington, whde rad.at North Amer:cantest 10.000 people nat;onwide l _ . . . .
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, Club Built in 1988 com-h polition. a!ang with nine others The wtnner will be selected in November 1989 5 Musgrove Mill's September 1988 on memtwrs corne f ror-H;ghway 56 between Chnton Greenvile.and Clinton and Spartan- Spartanburg, as well bLV is the first target as Columtna. Florence, 5 Ba'lt for the love of golf course mahng uae and even Cakfornia the game of golf. of the natural surfoun- Many upstate indus, Musgrove MJi Golt dings and ter. - that thahsts enjoy a regular Club of!ers a world nas been built by game of golf on its class cahber golfing Arnold Palmer E Golf tody knks. and con-expenence to its 400 D< pest Magaane sidm it a part of the equity rnembers Ihe nominated Masgrove regran s many course. which opened Mill to # s Best Pr?vate attractions . .
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5 The Holland-based MECO Metal Finshing USA company opened a metal plating plant in Rock HAs A.rport in.
dustrial Park MECO specializes in elec-troplating pads for the electronics industry The company plates frames for computer chips, contacts, plugs.
arid other miniature electronic components E MECO employs nearly 40 people in Rock Hill, and their in-vestment in the area is approx;mately $3 million.
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B Cascace is an inter-national firm with operations in far away places irke New Zealand Japan, South Afnca. and the a Cascaae Corpora Netherianos The tion out of Port.and. Westminster plant pro-Oregon opened a auces custom tark I;ft state-of tSe art fork hft masts for maior mast r9anufactanng mandacturers in-plant in Westminster in ciudinD Komatzu, 1 1988 The 110.000 Cla k. Hyster, and sauare foot piant Baker B Cascade l emplor; 50 people, antcipates doubling and utilizes the latest in the s;7e of its West l robotc welders and minster plant and its computer technology number of employees l
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s The Greenville- b$Un = - 'd GId '
- Spartanburg Airport continues to expand.
providing necessary transportation for this parking spaces to growing area. A record shghtly more than number of passengers 3.000 E A $40 milhon was served in 193B, expansron is underway Enterg T Airknes. and and the projection for which will double the Unitec Express /
the Greenvme- terminars s:ze, and Presdent.al Airways Spartanburg Airpcrt s add a second story to in addition. exeng growth, a rate of 16% terminal concourses so came's added new is greater than the 12% that passenge's can routes 5 The predicted for the entire board and exit the air- Greenville Spadanburg state and tha 9% craft direct!y from the Airpon was one of the predicted for the na- building through first regional airports in tion. 5 The airport is covered Jetwavs. hke in the US whenit was expanding its facihbes airports in larger cities built in 1962 That to keep up with this 3 Three air ca'riers sa'ne vision ensures growth. An $8 milhon began service to the the planned growth parlung garage was Greenville Spartanburg vrtar to continuing completed in 1988, Airpod in 1988 economic deveiop-bringrng the number of No'thwest Airhnes, ment in this regron
71sese plwtographs capture only a small part ofthe Phil% region 1 healthy economic pictu.re. At least 26 companies announced nyansioru or neu capitalinnestments in the area in 1983. The.se mpansiorn mean nwrejobs, laryr tax bases, and more oppor-tunitiespr sen ice and related industries.
In addition, thesefigures reflect the desirable business climate in this region.
> Thh economic development promises to con-
. tinue inta the region'sfisture.
PSil% welcomes the many new industnes which have wiselv chosen to locate in the
" PAf1% region. P111% also congratulates ew W
- f isting industryfor the success evidenced by J ' its continuing expansion.
,_ PSI 1% is proud ofits contributions to this s .
. ' economic development that bene);ts allits member cities And P.111% is committed to
? L pron iding energs leadmhipfor the region today; lbmarrou. And flevond. 9
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West Virginia. and tains two sepa ate M:ssisstppt The center operating systems only ships to WaLMa't under one roof One stores a Wal Mart B in January 1988, system handles regular chose the Piedmont WaLMart opened the hard knes and basics, area of S C for this ma-largest warehouse in and the other handles for distnbution center South Carokna. a specialty items and because of its avadable 1586000 square foot clothing 5 The resources. bke the Laurens facihty serses i d:stnbution center in areas active work force LRJtens County The Louts;ana. Kentucky. and easy access to center employs over Fhnda, Virgrnia. North transportation, and its 1.000 peopie. and con- Carchna South potential for growtn
^ .
$$ While the rest of the country
~
~
faces potential critical power ;
shortages, the PMPA region is '
n . I sure of reliable, aburaciutt energy
- I wellinto the future.))
/
T i h
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1 CHAIRMAN'S MESSAGE /
Electricity, first made asailable in .
k the United States in the 1880s, has transformed our present and will -
continue to shape our future, in the -
beginning [rople m small cities and communities all across America 4'-
wanted and needed electricity, but it -
$h wasn't always available or affordable A.
from private companies. Public ,
power became the solution when hundreds of communities created their own power systems to sene jQ their needs. A Over 35 million Americans are ,/
served through 2,200 non-profit, community-owned, locally controlled attractive asset when considering an interest in Catawba Nuclear Station electric utilities. Prom the start, area of relocation. Public power Urut #2, extending local control to public power has been the ideal of makes it easy for new industry by the production of power. While the 4
democracy, with local [rople work- simplifyit g the relocation process. rest of the country faces potential ing together to meet local needs. It's. moch easier w ben industry only critical power hortages, the PMPA Consumers have a direct mfluence in has to deal with one agency for region is sure of reliabh, abundant the affairs of the public power water, sewer, permits, and power energy wellinto the future. This system, and can attend public supply. And like indisidual foresighted decision makes the whole meetings, vote, and have access to customers, industry is also drawn to region much more secum, and pro-the management, which is always public power's competitive rates, mises continuing economic close at hand, good service, and reliability. development.
Consumers benefit from public In 19M, PMPA took the next Public power was the key to small power in another way as well. Public logical step in the continuing evolu- tow.n America's transformation to the power is attracthe to new industry, tion of public power. In order to indusuial, electrified age. And and helps the economic development reduce dependency on wholesale PMPA, with its hands on the source, of the area it serves. New industry power suppliers, the ten communities is a guarantee for future economic condders public power a verv that make up PMPA bought an development.
5
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. [
I - $$ PMPA's member cities can expect continued benefits from the Agency,
$. whether from economic prosperity (3
~
.' {
brought by the attraction of a stable, reliable power source or through constantly improving services geared to the members' needs.)J f . x em.
e) , I b l'i!
l 11 1
4 PMPA's actual costs and provide incen.
g . , 4" , . tives for user demand limiting efforts.
P Depending on the success of this rate
< change, larger scale demand-side 3
management technology might be i nplemented at a later date in an effort to achieve maximum efficiency.
A number of developments took place in 1988 that willimprove the administra.
e
.* tion of PMPA for many years to come.
N., Design was mmpleted and construction N begun on PMPA s permanent her.d-quarters buikling. This building, sche-duled for completion in May 1989, will
, have 7,500 wiuare feet and can accom-modate up to 20 employees. PMPA expects that this building will meet it*
-Q , needs for the next 15 to 20 years.
The nuclear power stations themselves savings in the early years of PM PA were further examples of operating GENERAL MANAGER'S REPORT operations allows the Agency to success. The Cataw ba and McGu. ire sta-PMPA made strides in severalim- minimize rate increases during that tions continued to operate at above in-g portant areas in 1988, from the period ofincreasingly competitive dustry average levels during 1988.
money-saving restructuring of debt to pressures. The bonds that were Finally, PMPA continues to grow at a assisting in the progress of the indus- refunded had interest no s between rate exceeding the August 1984
> try's business enviror. ment. In addi- 9% to 9% percent. The refunded feasibility study projections. It is clear tion, PMPA is proud to announce bonds carried interest rates between that 1988 was a good year for PMPA, that the Catawba Station was rated as 5 to 7% percent. and that progress continues to be made
" Excellent" by the Institute of Nu- More goals for increased efficiency in reaching PMPA's ultimate goals.
clear Power Operations in late 1988. were instituted early in the year PMPA's member cities can expect con-Member cities can anticipate gains wben PMPA introduced a change to tinued benefits from the Agency, from PM PA's savings of over $27 its rate structunt This change should whether from economic prosperity raillion due to the two refinancing of reduce usage during times of peak brought by the attraction of a staMe, previously issued bonds. The bond demand resulting in a reduction in reliable power source or through con-issues were structured so that most the Agency's costs. Although stantly imprming services geared to the of the savings occur between 1989 rew nues will be the same, the rates members' needs. I look forward to even and 1998. Concentration of the charred more closely reflect more pn gress is 1989.
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i PMPA BO ARD OF DIR E C T O R S BOARD OF DIRECTORS OFFICERS Abbesille Chairrnan }
Dasid 11. Krumwiede. City Manager Q Joe it lanford. City Manager, Clinton City of Ito< k liill J. Itu sell Allen. Vice l'rnident, ID Vice Chairrnan Jacobs Prm, Inc. J. Itussell Allen, Vice President, y,,,g,y Jacobs Pn ss. Inc.
/ Itichard S. Hale, General Manager. GI secretary Combined Pubhc l'tihiies Kenneth M. Itarnett, Finance Director.
Ganney City of l'nion larrs A. Sos *arnon. SecretamTreasurer. Tren urer llrooksiew flouse, Inc. Neil J. Keane, fmance ihrr ctor.
Greer I'M PA Dasid V. Duncan, Comrni- iorrr. (2) j Commis ion of Pubhc Works STAFF General Manager l aurenn Coleman f. 5moak. Jr.. General Manager. O, Jarnes A. Ilauer Commiwion of Pubbc Erks Finance Director N"il3 h""""
.New ber n Stew D. Iteeses, Jr., l'tilities Director i O Inse*truent Manager Hock full 3"hn N. Glmer Joe it lanford, Gis Manager EDP Manager {
Paul Pochardt Union e ABHEVILLE . T.D Pherbert. Jr.. l'tihn Director it,i 5pteni Analpt 1jnda H. lilla e CIFION Westruinater L@ EASLEY Gary I.. Cobb. Nperintendent, Accounting Manager )
cAn3Ey Commi% ion of Public brks 5uzanne D. liarbre) e GREER- Accounting Clerk e LADtENS 1-U"roth) N. Carrel Esecutive Secretary
~
e NEWBERRY Sarah C. Greene 3 }
~~ ta rs :
e _N e WE3TMINSTt:H Tran M. Ilarton x) l 6 1
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4
~
yp"g REPORT OF INDEPENDENT 'N PU BLIC ACCOU NT ANTS bb A MEMB$R OF ARTHUR YOUNG INTERNATIONAL" i
Daniel Building. Suite 1900 ' '
301 North Main Street i Greerwille, South Carolina 29601-2178 k.
EE E UNh Telephone; (803) 271-9286 13' l
The Board of Dir-ctors Piedmont Municipal Power Agency
- Greer, South Carolina -
We have audited the accompanying balance sheets of Piedmont Municipal P(wer Agency at December 31,1988 and 1987, and the mlated statements of revenue and expenses and changes in retained earnings (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Agency's management. Our resp (msibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An ndit includes examining, on a test basis, evidence supporting the amotmts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the statements referred to above present fairly, in'all material respects, the financial position of Piedmont Municipal Power Agency at Decemh-r 31,1988 and 1987, and the results of operations and cash flows for the years then ended in conformity with generally accepted accounting principles.
Our audits have been made primarily for the purpose of expressing an opinion on the basic financial statements taken as a whole. The accompanying additional information on page 20 is presented for purposes of additional analysis and is not a required part of the basic financial statemer.ts. Such additional information has been subjected to the procedures ap. -
plied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
April 11,1989 4
--_-..m_ _ . - - _ . _ _ _ _,___.__._ __
')
j g_n T '
PIEDMONT Mt'NICIPAL l POWER 8 AL ANCE SHEETS AGENCY d
gg (dollarsin thousands) December 31, 1988 1987 'f Utility plant: ,
Electric plant in service.. . . . . . . . . . . . . $ 533,472 $ 533,667 i Nuclear fuel.. . . . . . . . . . . . ..... . . . . . . .. . 38,747 45.584 Construction work in progress.. . . . . . . . . . . . . . . .. 10,626 6,761 582.845 586,012 :i
'I less, accumulated depreciation and amortization.. . . . . . (67,109) (52.627)
M Net utility plant... . . . . . . . . . . . . . . . . . . . . 515,736
]
. . . . . .. . . . 533.385 1
P.estricted funds (Note 4).. . . . . . ... .. . . . .. . 322,305 490.306 ,
Current assets:
Revenue fund (Note 5).. . . . . . . . . . . . .. .. . . 256,151 195,453 Participant accounts receivable.... . . .. . . . . . . 4,662 4,333 Other accounts receivable.. . . . . . . . . . . 4,515 7,327 Materials and supplies.- . . . . . . . . 3.519 4,007 Total current assets.. . .... . ... . . .. 268,847 211,120 Deferred charges:
Unamortized debt issuance costs.... .. .. . . . .. .. . . . 23,614 24,136 Net deferred expenses to be recovered from future revenue.. 110,488 76.534 Ewess costs on advance rfundings of debt.. . . . . 183,958 159,850 Other.. .. .. . . . . . .. 283 296 ;
318.343 260,816
, Organization costs... .. . . . .. . . .. 1,04 8 _ 1,077 Total assets.. . . .. .. $ 1,426.279 $ 1,496,704 ,
1 LIABILITIES AND FtETAINED EARNINGS Iong-term debt: I Bonds .. .... . . .. . . . . .. . .. . $ 1,335,726 $ 1,306.510 l Unamortized discounts.. . . (76,484) (77,%9) I 1.259,242 1.228,541 !
. Notes .. . . . .. 100.000 100.000 ;
1 1,359,242 1,328.541 Restricted fund liabilities: I Current maturities of notes.. . . .. . 0 100.000 Accrued interest payable.. 44,561 51,808 i
Reserve for decommissioning.. .. . .. . 1,193 664 j Deferred compensation.. . . 110 75 ,
45,864 152,54_7_ !
k Current liabuities: 1 Accounts payable.. .... . . . . 4,278 6,408 Retained carnings.. .. . . . 16,895 9,208 Totalliabilities and retained earnings.. . $ 1,426,279 $ 1,496,704
]
See accompanying notes.
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(dollarsin thousands). .)i _ ~ "1988 1987" e l
^f lO;ierating revenue: q. , 1 , . . .
Sales of elec'tricity to participants.l..... .. .. ../..... .. .. .. ..... . .... .... ........ $ 61,016: .$. 56,986: w Sales of electricity to other utility...... . ........... . . ........ .........../ 89,191" 93,724 L,'<, .
> 150.207 150,710 : ~
v .
. 15L M Operating expenses: ,
i ,
, Operation and maintenance.. ..... .... .... . . . . . . . . . . . . . . . . . . . . . . - . . . . 27,048 24.582 H l. [ Nuclear fuel amortization.... .... .. . .......... .... ............ . :..... ..... . . :11,010 ' 10,459- '
, M ' ' Power supply servicesi., .. .
4
<f Purchased power..... ........ .... ...... . . . . . . . . . . .......... .38,410: _ 37,798 ,
, 4 Transmiseioni ..&....... ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... .3,309 3,465
)- '
'Other................................................................a............. 7,211 6.584
- Puyments in lieu of property taxes.... ... .. .a.... ~ 2.433 , m;
.. .. . . . . . . . . . . . . . . . . . . . . . . . 2.376 Ad ministrathe ahd g;eneral... ...... . .. . . . ..... .. . ... .......... ...... ... .. ... . 3,142 3,490 Depreciation... ....... .......... . ... .. ....... . ... ...
~
. . . . . . . . . . . . . . . . . . . . . . 17,774 ;17,762?
, 1 Decommissioning... ........... .. ..... .... . . . . . . . . . . . . . . . . . . . . - 529 370 m '
+
110,809' 106,943" 4 w .= ~
, - Net operating incomen . . . . . . . . . . . . ........-. . 39,398' , . '43,767 - ~ _
L Other (charges) and credits:
, ~
s ' Interr.st expense....... . . .. .. .. . . . . . . . . . . . . . . . . . . . . . . . . . (101,106) (109,473) c , Investment income.i..... ..... ..... .... ...... ... . . . . . . . . . . . . . . . . . . . . . . . = 45,556 52,193 7 Amortization expense.. .. .... . ........ .. . . . . . . . . - . . . . . . . . . . . . (10.115) (10,098)' (65,665) r .(67.378) Net deferred expenses to be recovend from future revenue .... . . . . . . . . . . . . . 33,954 ' 32,885 1 g i Revenue over expenses.; .. . ...... ...... . ......... .. ........ .. . . . ...... ... .... 7.687 - '9.274 Retained earnings (deficit), beginning of period... .. . .. . . . . . . . . . . . . 9.208 (66) , , s Retained camings, end of period... .. .. . ... . .. . . . . . . . . ...........$' 16,895 $ ' 9.208 ~ See' accompanying notes.
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I'IEDMONT Mt'NICIPAL POWI'R ST ATEMENTS OF CASH FLOWS AGENCY !
^
l i (dollarsin thousands) _ Year Ended December 31, ~ 1988 1987 Cash flows fmm operating activities: Revenue over expenses.. . . . .. . . . . . . . . . . . $ 7,687 $ 9,274 Adjustments to reconcile revenue over expenses to cash provided by operating activities: ! } 38,899, 38,319 Depreciation and amortization... . . . . . . . .. .. . .l Increase in participant accounts receivable., .. . .. (329) (422) l Decrease (increase) in other accounts receivable.. .. . .. 2,812 (1,829) ! 16 Decrease (incsrase) in materials and supplies... .. .. . . . . . . .. 488 (658)- Increase in deferred compensation.. . . . . . . . . . . . . . . . . . . . . 35 36- j
. Decrease in accounts payable.. . . .. . .. . (2,130) (3,209)
Total adjustments.. ... .. . .. . . . . . . .. . 39,775 - 32,237 Net cash provided by operating activities.. .. . . . . . . . . 47,462 '41,511 Cash flows imm investing activities: ; Purchase of marketable debt securities.. . .. . . . (556,101) _(506,666) l Sale of marketable debt securities... ... . .. . . . 550,226 624.300 -
~ Decrease (increase) in accrued interest receivable.. .. . .. .. (3,444) ' 3,078 l Issuance of bonds.. . . . . , . . . , . . . 235.361 0 Payment of notes... . . . .. . . (100,000) 0 Increase (decrease) in accrued interest payable.. . .. . (7.247) ' 10.698 Refunding of bonds... .. . . . . . ... (238,319) 0 Redemption of bonds.. . .. .. ... . 0 (7,739)
Net cash provided by (used in) investing activities.. . . .. (119.524) 123,671 , l Cash flows from financing activities: Additions to electric plant in service.. . . . . .. . (4) (214) Disposals of electric plant in service. . . . . . 199 0 Additions to nuclear fuel.. . . . . . . . (7,465) (6,336) Additions to construction work-in-progress.. . . . (3,865) (6,134) Deferral of expenses.. . . . . . . . .. ... (33,954) (32.885) Addition to reserve for decommissioning.. .. . 529 370 i Net cash used in financing activities.. . (44.560) (45,199) Net increase (decrease) in cash.. . . . . . . (116.622) 119.983 ! Cash at beginning of year.. . . . 162,003 42.020 Cash at end of year (Notes 4 and 5)... S 45.381 $ 162,003 l Supplemental disclosures of cash flow information: Cash received during the year fer: Interest.. . . . . . . $ 51,750 Cash paid during the year for: f Interest.. . . . . $ 108.353 1 ( Supplemental schedule of noncash investing and financing activities: q During the year ended December 31,1988 the Agency rerr.oved $14,302 of nuclear fuel and
$14,302 of related amortization from its books.
During the year ended December 31,1987, the Agency transferred $100,000 of notes payable from long-term debt to current. See accompanying rwtes.
s PIEDMONT y yn p ~ MUNICIPAL i POWER g AGENCY NOTES TO FINANCIAL STATEMENTS ' December 31,1988 and 1987 (dollarsin thousands)
- l. DESCRil'Il0N OF Tile ENTITY 3. UTIUTY PLANT
{ Piedmont Municipd Power Agency (the Agency) was incorporated in 1979 Major clases of de Agency's electric plant in service are as follows: under the South Camlina Joint Municipal Electne Power and Energy Act The Decemtwr 31, Act was adopted in April 1978 to enable municipalities in South Camhna to
' fonn ajoint agenry to plan, fmance, develop, own amt operate electric genera- 1988 1987 tion and transminion facihties. The Agencv in comprised of ten member land" $ 612 8 612 i
)
utihties owned by municipalities or municipal cornmmsions of public works 152,765 152,765 St uctures and irapmvements-(participants) located in northwestern South Carolina and represen a the Reactor plani equipnent.- 244,412 244,412 member utihties in deahng-, aith Duke Power Company (Duke) and other entities Turbo generator unita -- 69,311 69,311 , Accepory electric equipment... 50,445 50,445 in order to secure a relialde source of power for the armber utility con- 17 Miscellaneous plant equipment -- 11,120 11,120 sumeni, the Agency purchased a 25 percent undivided owrrrnhip interest in Duke's Catawba Nuclear Station Unit 2 amt its initial nuclear fuel core. The Station equipmers -- 4,735 4,735 Agency has no legal ownenhip in Unit I or the support facilities used bv both ' Other ..~ 72 267 umts. However, under the exchange agreements, the Agencv receives 121/2 ! percent of the output of Unit I and 12 !!2 iwreent of the output of Unit 2. TUIAL $ 533.472 8 533.667 j i Furthermore, the Agency's cosis for 25 percent legal ownenhip in Unit 2 are based on 12 !!2 percent of Duke's costs nunciated with both Unit I and Unit Nuclear fuel at Dwember 31,1988 and 1987 of $38,747 and $45,584, j i
- 2. Therefore, even though the Agerry has nolegal ownenhip rights in Unit 1, respectively, repments the cost of d e initial nuclear furt core, partial cost of for accounting purposes, the Agency does own a revenue producing irerest in reload fuel anemblies, and other nuclear fuci related costs. Nuclear fuelis Unit 1, and when Unit I legan commercial pmduction on June 29,1985, amortiud based on bum rates using a unit of production basis.
the Ageucy transferred approxunately one-half ofits total exp cted cuts for the Catada project imm construction work in progress to electric plant in ser. The cemstruction work in pmgren at Dewmler 31,1988 and 1987 of tice. Fmm June,1985 to August,1986, the Agency received electric output $10,626 and $6,761, respectively, is for the Catawba Nuclear Station as ex-thmugh eschang agreenrnts fmm Unit 1.On Aug at 19,1986, Unit 2 plained in Note 1. Certam direct and indirect capenditures alh> cable to the , began commercial production and substantially all rernaining construction Ageney's ownenhip interens in the pmject are capitalind as part of the cost m nally, the work in progress was tramferred to electric plant in service. Addit' of acquirmg or construding the utihty plant. The Agency also capitalizes net Agency is charged for its pm. rata portion (121/2 percent) of operation and interest costs on terrowings uned to fmance the construction. maintenance expenses of Unit 1 aml Unit 2. . . . FJectne plant in service, excluding nuclear fuel,is depmciated on a straight. I line beis at rates calculated to amortize the composite muets over their
- 2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting-lhe accounting records of the Agency a maintain- P" .c estimaird usefullives. Depreciat;on begins when aucts are placed "I"''' ed on an accrualbasis in conformance with the Federal Energy Regulatory Comminion* Uniform System of Awounts and generally accepted accounting Total accumulated depreciation and amortization from these components is as principles. (dlows: Certain items are included or excluded ins,ahe rates chard currendy to Dec-mber 31. participant for power balings. The Agemis rate structure in Fenerally 1988 1987 designed to cover debt service and operating costs as requurd under its . Depndatkn - 4ctne plant General ihmd Resolution. These rates are sufficient to cover depreciation now in senice.. $ 50,% 8 8 33,201 twing deferred. Amortaation of nudear fuel ~ 16,141 19,426 O,narnortised debt luuance costs - U,namortiwd debt imuance cosa at Decemler 31,1988 and 1987 of $23,614 and $24,136, mpectiwly,(net of $ 67,109 $ 52.627 accumulated amortization of $5,5% and $ 5.819, spectwelyl are being amortized on the bonds outstanding method.
- 4. HNRICTED FUNDS Exceu costs on advance refundings of debt - Exceu cuts on advance Restricted funds wre estabbshed by the Agency, m.accordance with the refundmg* of debt at December 31,1988 and 1987 of $183,958 and mapem Imnd and note resolutions, to account for proceeds of the Imnd and
$159.850, respectivciv. (net of accumulaird amortizmion of $13.916 and nw insuances. These funds are rearicted by the rendutions for payment of
$7.867, respectiwly) are being anmrtized on the bomis outstanding method.
construction cours debt service and other specifed purposea. Organization coats - Organization costs at Decemler 31,1988 and 1987 af 41,048 and $1,077, spectively,(net of accumulated amortization of $!!9 The restricted funds at December 31.1988 and 1987 consist of the following and $90, respectively) are leing amortird on ilw straight.line method over a anets swed ar emt, which appmximates market: period of 40 years. g,y,g,, 3 3, Discounts on bonds payable - The dmcounts on bonds payable ai 1988 1987 q Decemler 31,1988 and 1987 of $76.484 and $77,969, mpectively,(net of ! accumulaird amortiution of $5.509 and $5.314, respectively) are being G""tnaton .. $ 25.974 $ 33,604 ( emortized on the bonde outstanding method. Hond.. 152,985 205,643 1 Incame smace -The Agency is em'aipt imm federal income taxes under in. N* .. 0 12,569 Revrve and contmgency.._ 11,406 11,752 terna! Revenue Code Se+on 115. South Carolina ha adopted Sectinn 115 by reference; therefore, the Agenc5 si aho exempt Imm state income taxes. Decomminioning... 1,193 637 4 Spenal reserve .. 15.230 16,677 j Cash flows - For purposes of the statemena of cash flows, the Agency con. ) sidem cash to be e it is dischmed in footnotes 4 and 5. All highly huid debt Refundmg trust... 115,407 209,349 I instrumenin pesthaned with a maturity of three months or ira are considered Deferred compea ation .. . . . . . 110 75 to le marketable debt securities.
$ 322.305 8 490.306
e W r
- 4. RESTRICFED FUNDS (conanued) long term debt of the Agency at December 31,1987 is as follows: ~
. Funds are compr;.ed of:
Cash 8 39,307 $ 150.055 Unamortized Marketable deh securities 280.257 331,316 B nds: Principal Diacount Total Accrued intries receivable. ... . 2,741 8,935 Series 1984 $ 59.510 $ .17.349 8 42,161
$ 322.305 $ 490,306 Series 1985 137,970 7,628 130,342 l Series GB5B 248,000 0 248,000 The Agency is reouired by the baix! resolution to maintain minimum balances in ' 1985 Refunding Serin 155,155 13,702 141,453 certain restricted funds. At Decemler 31,1988 and 1987, the amounts in these 1986 Refundmg Series 342,140 18,995 323,145 )
restric:ed fundorre greater than or equal to the required minimum balances. 1986A RefundingSenes 363,735 20,295 343,440 j 1,306,510 77,% 9 1,228,541 The agency funds were established to account for the operations of the Agency and Note" consist of the folkwing assets stated at cost, which appnnimates market: Series 1984 . 200,000 0 200.000
- 3. December 31,
.lUTAL $ 1,506,f,10 $ 77,969 8 1,428,541 1988 1987 -
Revenue - $ 256.151 $ 195,453 Electric Revenue Bonds, Series 1984 18 Funds are comprised of; in December,1984, the Agency issued $530,000 d Electric Revenue Bonds,
- Cash . _ $ 6,074 $ 11,948 Series 1984 with an originalimue d scount of $23,500 for the purpose of financing Marketable deh securities.- 236.728 179,794 the Agency's investment in the Catawba Nuclear Station described in Note 1. An Accrued interest receivable - 13.349 3,711 described in Note 8, the Agerry defensed $395,400 and $74,600 of the Electric
$ 256.151 $ 195,453 Rmnue BonMnes 1984 in Nwmler.1985 and July,1986, respectively. On July 1,1987, the Agency redwmed prior to m:aurity $490 of the bonda. Thus, -
~ $59,510 of the bonds were remrded as outstandr.g at both December 31,1988 -
- 6. NET DEFERRED EXPENSES'IU BE RECOVERED and 1987.
FROM FUTl'RE REVENUE The bonds are special obligations d the Agency and are secured in~ future revenue
- As described in Note 2, rees charged to participants are structured to systematically an defined by the bond ruolution and other monics and securitin pledged under pnwide for the debt requinments and operating costs of the Agency. Nec es- the bond inclution.
penses and revenue which are not included in rates are deferred to such periods as they an intended to be covered by rates. The bonds bear an annual interest rate of 7 percent and mature on January li 2013. The bonds are redeemable a the option of the Agency at prices ranging from - Net deferred expenses so be recovered imm future rnenue include the following: 103 pement of the bond principal amount in 1995 to 100 percent in 1998 and Dwember 31. thereafter. 1988 1987 Change Electric Revenue Bonds, Series 1985 Expenses incurmt, not included in in May,1985, the Agency inmed $340,000 d Electric Revenue Ikmds, Series billings t partampania: 1985 with an origNalissue discount of $8,355 for Ue purpose of financing the interesi expense. $ 265.426 $ 206.878 $ 58.548 Agency's investment in the Catawba Nuclear Station described in Nte 1. As Depreciation expense._ 50,615 33,206 17,409 described in Note 8, the Agency defeased $200,895 and $111.265 of the Electric Amortization of excess costs on Revenue Bonds Series 1985 in July 1986 and March 1988, respectively. On July advance refundings ofdebt.. 13,173 7.123 6.050 1,1987 the Agerry redeemed prior to maturity $1,135 of the bonds. Thus. Anmrtization of bond decounts $26,705 and $137,970 of the bonds were recorded as outuanding at December 31, and debt issuance coms - 12.363 8,339 4.024 1988 and 1987. respectively.
. Nuclear fuel amortization 416 416 0 The bonds are special obligations of the Agency and are secured by future revenue litter of credit fws. 4,422 4.422 0 1,320 as denned by the bond resolution und other munin and securities ' pledged under Other . .. 2.503 1.133 the bond resolution. L'nder the terms of an existing insurance polry, the payment of 348,918 261.704 87,214 pnneipal and interest on the $81.245 bonds maturing on jaunary 1,2014 is Revenue received, not considered in binings to participants: The b<mds bear an annualinterest raie ranging from 7.5 percent to 9.5 percent with maturity does rangmg from January 1,2014 to Jaraary 1, 2018. The bowl. are lovestment income... .. . . . . (36,178) (41,169) 4.991 redeemable at the option of the Agency a prices ranging imm 103 percene of the Rate stabilizatwn (revenue rewived i bond principal anmunt in 1995 to 100 perrent in 1998 and thereafter.
reduce future billings to participants) .. (202.2521 (144.001) (58.2511 kt deferred expenses to be Electric Revenne Bonds, Series 1985B recovered from future revenue.. .. .. $ 110.488 8 76.534 $ 33.954 In November,1985, the Agency inued $250.000 of Electric Hevenue ik nds,
~
Serin 19858 due Januarv 1,2025 to provide the funds necessary to pay the
- 7. LONG-TERM DElff $100,000 principal amount of the Agency's 8.50 percent Electric Revenue Ihmd Long4erm debt of the Agency at December 31.1988 is as follows Anticipation Notes, Series 1984, mauring on January 1.1988, and tir $100,000 Unamortized principal plus a portion of the iruerent on the Agency's 9 percent Elcetric Revenue B,mds: Principal Di count 'lotal Bond Anticipation Notes Serie 1984, maturingon January 1,1990. On July 1 59,510 $ 1987 the Agenn redeemed prior to maturity 82,000 of the bonds Series 1984 $ 16.539 $ 42.971 Series 1985 26.705 5.576 21329 The bonds are special obligatiow of the Agency and are accured by future revenues 248,000 q Series 1985B 0 248.000 as defined by the bood ruolutum. The bonds are furder secured by an irrevocable .
1985 Refundmg Series 56,430 13.332 43,098 letter of creda which is in an annunt sufGcient to pay the principal and $11,875 ac. 1986 Nfundmg Series 342.140 18,463 323.677 crued internt on the bonda. No borrowings under the letter of credit have occurred 1986A RefundingSenen 363,735 19.713 314.022 as of December 31,1988. 1988 Refundmg Serin 124,502 575 123,927 The bonds will bear internt at a dalle weekly, monthly, long, or fixed rate as deter-1988A Refanding Series 114,704 2,286 112.415 nm d b 6 m W Tw Hm a rung Ageni deertrunn the rate of internt. I 1,335,726 76,484 1,259.242 The Agency's Baa d of Diredom determums the length of time. From the luue date Notes through Decend,cr 31,1988, the interest on the bonds has been at a weekly rate, j Senes 1984 Mla,000 0 H)0.000 For em yeam ended December 31,1988 and 1987, the average welly interni rate { 1.435,726 8 n e was penxm and 4.75 pen:ca, rupectively, Alm the bonds may
'IUfAL - 8 76.484 8 1.359.242 be permanently converted to a fixed rate. Anytine prior to their cutwenion to a fixed l
j
i< t ip 4, LONGTERM DEBT (crmtinand) ' as defined by the bond resolution and other monics and securitics pledged under 1: Electric Revenue Bonds, Series 19858 kontinued) the bond resolution. Under the terna of an existing irmurance policy, tir payment of rate, the'imnds are redeemable at ilw option d the Arney at a price equal to 100 Pri"ci Pal and intenst on de bonds when due is innued.
. percent of the knd principal amount plus any acerued interest si the date of
' The bonde irar an annual mierest mie ranging Imm 6.7 percent to 7,65 percent redemption. If the Imna har been converted to a fixed rate, tir bonds are - with maturity daten ranging Imm January 1,1998 to January 1,2019.Tir bonds redeemable at the option of the Agency at prima ranging froni 103 percent of the are edeemable at the option of the Agency at prices ranging Imm 102 percent of bnd principal amount from 1986 to 2013 to IN percent in 2024. the bond principal amount in 1998 to 100 peteent in 2000 and therraf er,
' Elcetrie Hevenue Bonds,1985 Refunding Series _
Electric Resenue Notes, Series 1984 In Decemler,1985, the Agency issued $445,325 of Electric Hmnue Bonds,1985 In December,1984, the Agency inued $200,000 of Electric Rewnue Bond An-Refundmg Serin at an onginal insur discount of $14,457 for the puque of pro- ticipation Nmes, Series 1984 for the purpose of financing the Catawba Nuclear Sta-ciding funds neccuary to refund $395.400 of Electric Revenue Bonds, Series 1984 tion descriled in te 1. described earlerin this footnoic. As described in Nde 8, the Agency defcased
$288,895 and $98,725 of the Electric Rmnue Bomis,1985 Refundmg Series in ne noin am special obligations of the Agency and are secured by a lien on future j! ' December 1986 and Nvemler 1988, respectively. On July 1,1987, the Agency revenue as dermed under the note resulunon.
' redeemed prior to maturity $1,275 of the bonddhus $5&430 and $155,155 of The hen on revenue securmg the mars is subordinate to the lien on revenue secur, -
the bemds were recorded as outstanding at Decemler 31,1988 arnt 1987, ing payments required under the band resolution. Tir notes am further secured by respectively. irrevocable letters of credit which are in amounti, sufficient to pay the principal of - The leds are special obligations of the Agency and are secured by future revenue the notes plus sewn months of accmed interesi. No bormwings under the letters of as defined by the imnd remdution and nther monies and securitin' pledged under credit have occuned as of Dmmler 31,1988. > 19 the bond resolution. Under the terms of an existing insurance policy, the payment of The noies consisted of two principal amounts of $100,000 each which imre annual
- principal and interest on the buna maturing on January 1,2019 is insured. - interent rates of 8.5 percent and 9 percent and matuwd on January 1,1988 and The bonds bear an annualinterest sie ranging from 7 percent to 9.25 percent with . 1990, respectively. These notes are not subject m optianal redemption by the Agen.
; maturity dates ranging from january 1,2019 to January 1,2025. The bonds are ey pri r to maturity. An descriled above, the Elmtric Revenue Bomis, Seres 1985B redeemable at the option of the Ageng ai prices ranging from 103 percent of the were maued m order to pmvide the funds necenary to pay the noes when they lxmd principal amount in 1996 to 100 percent in 1999 and thereafter, ""*
The $100,000 principJ amount which matured on January 1,1988 was paid on Electric Kevenue Hands,1986 Refunding Scriva that daic imm the funds pmvided by the issuame of the Electric Revenue Bona, in July,1986, the Agency inued $344,960 of Electric Revenue Nmis,1986 Series 1985R ' Refuading Series at an origmal inue discount J $19,778 Ior the purpose of pru. viding funds necemary to refund $74,600 of Electric Rmnue Ibnde, Series 1984 Principal debt and sinking fund requirements cad $200,895 of Electric Rmnue Bonds, Series 1985 described earher in this , The following is a summary of the scincipal debt and sinking fund quiremenin for footnote. On July 1,1987, the Agency redeemed prior to maturity $2,820 of the the b<mda payable at December 31,1988: bonds, Year Ended Year Ended The bonds are special obligations of the Agency and are secured by future revenue . December 31. Deten.her 31, ' Princim! Principal cs defined by the bond resolution and other monics and securities pledged under the bond resolution. 1989 8 350 2003 $ 27,058 1990 45J 2009 28,521 W bona bear an annual intuent mte ranging imm 5 percent to 8 percent with nourity dates ranging from January 1,19% to Jamary 1,2025, The bona are 1991 480 *9010 29*972 redeemable at the option of the Agency at prices ranging Imm 101.5 percent of the 1992 1,010 2011 31,649 bond principal amount in 1996 to 100 percent in 1999 and thereafter. 1993 1,565 2012 33,449 I 1994 1,655 2013 34,985 i Electrie Revenue Bonds,1986A Refunding Series 1995 2,230 20!4 47,132
' In December,1986, the Agency imued $363,735 of Electric Remme Nnds, B,925 1996 2015 51,600 1986A Refunding Series at an originalissue dimxmnt of $20,900 for the purpow of 1997 14,475 2016 56,665 prtwiding funds necessary to refund $288,895 d Electric Rmnue Bonds,1985 Refundmg Series described carber in this footnor. 1998 2017 60,625 1999 15[,940 1 650 2018 64,985 The bonde are special obligations of the Agency and are secured by future revenues 2000' 18,865 2019 68 030 ra defined by the bond resolution and other moniet and securities pledged under the twmd resolution. Under the terms of an custmg meurance pobey, the payment of 2001 20,260 2020 76,620 principal and imerest on the Imnds maturing on January 1,2013 is insured 2002 21.650 20E1 82,145 The bonds bear an annual interent rate ranging fmm 5.75 percent to 7,25 percent 2003 23,245 2022 88025 with maturity dates ranging from January 1,2013 toJanuary 1,2024. The bonds 2004 23,890 2023 91,460 are redeemable at the nption of the Agency al prim ranging from 102 percent of 2005 25,060 2024 100,380 the bond principal amount in 19 6 to 100 percent in 2000 and thereafter. 2006 26,918 2025 104,150 2007 33,642 Elcetrie Revenue Bonds,1988 Refunding Scrica in March 1988, the Agenq issued $124,502 of Electric Revenue Bondu 1988 Refunding Seres at an ongmalinue discount of $595 for the purpose of pmvidmg 8.1%50RSTANCE DEllT DEFEAMNCE funds neccanry to refund $111,265 of Electne Hewnue &mds, Series 198 h Deceniber,1985, the Agency purchased $423,024 in US governnrnt securities desen, bed carher in this footnote, and d"Iuited them in an irrevocable trust. The prirri ialI and interesi from these securities will be used solely for the purpoac of making interrat and principal
- The bonda sie special obligations of the A Fency and e'e accured by future revenue payments on the i,llowing Electric Revenue &mds, Series 1984: $27,475 of 11 ce defined in the lxmd resolution and other monies and securities pledged under
. the bemd resolution. Under the irrms of an existing insurance poliry, the payment of percent Wnds dur 2014, $100,000 of 10.5 percent bonds due 2019, an 3 principal and mterest on the bonds when due in msured. $267,925 of 11 percent bonds due 2025. The bonds will I a redeemed on January 1,1995, (the first optiorad redemption datel at the then appbcable redempion price l
- The bonds bear an annual interest mie ranging from 5 pement to 7.75 percent with of 103 pe rcers of their aggregar principal amount. The above descrilmd defemance maturity dates ranging from January 1,1989 to January 1,2018. The bon 6 are resuheJ in an extraordinary low, of $41,260 which in deferred as exceu cost on ad-j redeemable ai the option of the Agency at prices ranging imm 102 percent of dw vance refundmg of debt.
) bond principal anumr.1 in 1998 to 100 percent in 2000 and thereaher. In July,1986, the Agency punhased $327,338 'n U. S. Gowrnnent securities and Electric Revenue Bonds,1988 % Refunding $ cries deposited them in an inmaMe tmt & pritmipa' and interest fmm thew
' In November 1988, the Agency imued $114,704 of Dectric Remme knds, securities @e used solch for the purpow of snaking interest ami pnneipal 1988A Itefunding Series at an originalimue dirount of $2.293 for the purpose of paynents on & Mwing Dectne bime Bonds; Senes 1980 $44,600 d prmiding funds necemary to refund $98,725 d Electric Revenue &mds 1985 10.875 percent term bonds due 2004 and $30,000 of 10 percent term buna due l Refunding Series describ'ed earlier in tiis footnnte. 2012. Series 1985: $13,765 of 9 9.7 percent serialbona due1996 2000, The bonds are special obligatons of the Agency and are secured by future revenue 816,65,0 of 10 percent term bonds duc 2004, and $170,480 of 10.25 percent term bonds due 2025. The bonds willle redeemed on January 1,1995 (the first t.
t L . -
i f
- 8. IN-SUBSTANCE DEBT DEFEASANCE (continued) 9. RESERVE mR DECOMMISSIONING The reseve for decomminaioning is an amount that a being accumulated to pnwide optional redemption date) at the ndemption price of 103 percent of their aggregaic principal amount. This defeasance resuhed in an extraordinary loss of $62,194 for the expected cost of decommissioning (damantling) the nuclear facibty. The which is deferred as escens cost on advance refunding of debt. Agency's portion of decommissioning these jointly ovmed facihties is based on current price levels and ansumes decommissioning will occur prompdy after the in December 1986, the Agency purchased $344,871 in U. & Gowrnment umis are taken out of service and is estimated at appronmately $78,000 for the pre-
- securities and deponised them in an inevocable trust.The principal and interest ""' 'I from these securities will be used solely for the p me of making interest and prin- chang?""". plant mg prre levels in service. This estimate will be adjusted perio and technology, cipal payments on the following Electric Revenue I nds,1985 Refundmg Series: The balance in the reserve at December 31,1988 and 1987 is $1,195 and $664,
$25,175 of 9.625 percent tenn bonds due 2013,848,150 of 9.7 perceni term bonds duc 2016, and $215,570 of 9.7 percent term bonds due 2024. The bonds mpectively.
wiD be redeemed on January 1,199Mthe first optional redemptirm date) at the l redemption pice of 103 percent of their aggregate principal amount. This 10. DEFERRED COMPENSATION PLAN defeasance muhed in an extraordinary kms of $64,263 which is defened as excess The Agency has establmhed a deferred compermation plan for all emphryees, nat on advarxe refundmg of debt. Paymer.'s made by the Agency remain as assets of the Agency, m6 ject to its control - In March 1983, the Agency purchmed $117,763 in U.S Government securities and and right of withdrawn! until such time as the funda me d st in acmrdance with the provision of the plan. It in the Agency's policy to fund the deposited them in an irrevocale trust. The principal and intercat from these plan based on 10 percent of payroll cost as incurred.The deferred compensation securities will be used solely for the purpose of making interest and principal expenne at Deceniber 31,1988 and 1987 was $29 and $36, respectively. payments on the kilowing Electric Revenue Bonds; Series 1985: $80,110 of 9.375 percent term bonds duc 2014 and $31,155 of 9.5 penwnt irrm bonds duc 2018. j 20 11. CONTINGENCIES The bonds will be redeemed on January 1,1995, tihe rum uptional redempimn i The Agency, as a partial owner of Catawba, is charged a monthly fee by Duke for date) at the redenption price of 103 percent of their aegregate principal amount. This defcasarre resuhed in an extraordinary loss of $16,792 which is deferred as purthanes of reserve and supplemenrd power and other items wlated to Carawba , excess cost on advance refunding of debt. operations. During 1987, the Agency challeeged certain comp <ments of these costa , ine u in einon y ces pa uen ,6e Agency In November 1988, the Agency purchased $105,781 in U.S Government secunties wce a Mund as a mM a Ned Energy Re@w$mnum,a z and deposited them in an irrevocable trust. The principal and inteiest from theme WERC) decinin on a portin of the challenyd costs m dispute. Although Duke has securities will be used solely for the purpose of making interent and principal appeale mju4nent, a menia o t ecamn is not probable.Thus. the Agency payments on the following Electric Revenue Bonds; 1985 Refunding Series: has properly recorded th a settlement in 1987 an a reductmn of certain operating '
$98.275 of 9.25 reent term bonda due 2019. The bonds will be redeemed on January 1,1996,hhe first optional redemption daic) at the redemptionc1Penses price of 103 I At Pecanber 31,1988, the Agency man continuing trgotiations with Duke and percent of their agregate principal amount. This defeasance resuhed in an extraor-other anions for a refond of other challenged costs. %e outcome of these negotia- 1 dinary loss of $13,364 which is deferred an excess est on advance refunding of I tions and actions and amount of refunds, if any, cannot ba determined at this time.
dehe. The Agency has run recorded any benefit from these claims Each of the above transactions qualify as an in. substance debt defcasance; then fore, the government securities and applicable defeaned bond imues are not
- 12. SUBSEQUENT EVENT recorded on the halance sheet. The Agency defcaned the debt primarily to reduce As described in Note 7, $350 of the Electric Raenue Bonds, Series 1988 Refun. I.
debt service, thereby postponmg or reducmg future electne rae adjustments. See ding Senes matured and were paid on January 1,1989, from debt service ainlu.ng l Note 7. funds on hand at December 31,1988. A DDITIONA L INFORM A TION PtwMONT SCHEDULE OF REVENUE AND EXPENSES PER THE ]Q j BOND RESOLUTION AND OTHER AGREEMENTS AGENCY For The Year Ended December 31.1988 Revenuca: (dollarsin thousands) Salca of electricity to participants.. .. $ 61,016 Sales of ekctricity to other utility.. 89,191 Interest income - . 17,665 Available from other funds.. 6.204 TOTAL REVENCE 174,076 Expuses: Operation and maintenance.. . . . . 27,049 fuel deposit.. 11,010 Power supply servicca: Purchased power... .. 38,410 Transmission . . 3,309 Other.. . . . . 7,211 Payrnents in lieu of property taxes . 2,376 Administrative and general . , 3,142 Advances for project expenses inventory.. 143 Working evital.. . . . . 392 Special fund deposits: Debt service - principal... 350 Debt service - interest.. .. 42.162 Rate stabilization fund.. . . . _ . 26,070 Reserve and contingency fund.. . 4,236 Decommissioning fund.. 529 1UTAL EXPENSES.. 166,389 7.687 Revenues over expenoes.. . . . . . 8
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- SUPPLEMENTAL INFORMAT. ION u
FOR>THE' YEARS ENDED. DECEMBER 31; 1988: and t 1987. ;
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TABLE OF CONTENTS I I. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS I - EXHIBITS: I A - BALANCE SHEETS, DECEMBER 31, 1988 AND 1987 B - STATEMENTS OF OPERATIONS AND PATRONAGE CAPITAL, 1 YEARS ENDED DECEMBER 31, 1988 AND 1987 2 C - STATEMENTS OF CASH FLOWS, YEARS ENDED DECEMBER 31, 3 1988 AND 1987 I NOTES TO FINANCIAL STATEMENTS 4 ADDITIONAL INFORMATION: 1 - OFFICERS AND TRUSTEES 2 - SCHEDULE OF CASH INVESTMENTS, YEAR ENDED DECEMBER 31, 1988 3 - SCHEDULE OF ACCOUNTS PAYABLE, YEAR ENDED DECEMBER 31, 1988 4 - SCHEDULE OF ACCOUNTS RECEIVABLE, YEAR ENDED DECEMBER 31, 1988 5 - SCHEDULE OF PATRONAGE CAPITAL ASSIGNED, YEARS ENDED DECEMBER 31, 1988 AND 1987 6 - SCHEDULE OF
SUMMARY
OF FEDERAL FINANCING BANK NOTES, YEAR ENDED DECEMBER 31, 1988 I I - - - _ _ _ _
A MEMBER OF ARTHUR WUNG INTERNATIONAL Arthur Young DanielBuilding Suite 1900 x - h m>nSuee G reenville, South Carolina 29601 -2178 Telephone:(803)2719286 l REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS The Board of Trustees saluda River Electric Cooperative, Inc. We have. audited the accompanying balance sheets of Saluda River Electric Cooperative, Inc .., at December 31, 1988 and 1987, and the related state-ments of income, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Cooperative's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materia 1 ' misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to ' above present fairly, in all material respects, the financial position of Saluda River Electric Cooperative, Inc., at December 31, 1988 and 1987, and the results of operations and cash flows Tor the years then ended, in conformity with generally accepted accounting principles. l As more fully discussed in note 10, in 1987 the method of accounting for investment tax credits was changed f rom the flow-through method to the deferred method. Our examination has been made primarily for the purpose of expressing an opinion on the financial statements referred to above taken as a whole. The accompanying additional information is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such additional information has been subjected to the auditing procedures applied in the examination of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation ot the basic financial statements taken as a whole. January 2 , 1989 i ____.__________________________..___._______m
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1 1 j SALUDA RIVER ELECTRIC COOPERATIVE, INC. STATEMENTS OF OPERATIONS AND PATRONAGE CAPITAL l Year Ended December 31, i 1988 1987 Operating revenue: Electrical revenue $161,697,804 $161,995,976 Operating expenses (Note 2): Cost of power: Purchased 60,480,245 67,852,586 i Produced 28,817,152 25,474,423 Annual dues 179,435 151,275 Administrative expenses 188,602 291,034 Office expenses 125,290 65,850 Salaries . 394,881 349,732 Employee benefits 55,965 42,545 Miscellaneous expenses 607,893 548,142 Property taxes 1,858,821 1,889,280 Depreciation and amortization (Notes 2, 3 and 6) 17,175,287 16,864,754 ) Net operating margins 51,814.233 48,466,355 Non-operating margins: Interest income 4,418,169 3,554,720 Interest expense (41,497,519) (42,347,590) Deferred revenue (Note 9) (6,587,464) 797.401 (43.666,814) (37,995.469) Net margin before income taxes 8,147,419 10,470,886 8.147,419 10.470,886 Deferred income taxes (Note 10) Net income - - Patronage capital, beginning of year 9,867,021 9.867.021 Patronage capital, end of year $ 9.867.021 $ 9.867.021 1
/
l l See accompanying notes.
SALUDA RIVER ELECTRIC COOPERATIVE, INC. STATEMENTS OF CASH FLOWS Year Ended December 31, 1988 1987 Cash flows from operating ctivities: Net income $ -. Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 27,051,712 26,327,912 Changes in assets and liabilities: Receivables (12,566,643) (7,879,367) Prepaids (36,538) - Deferred charges 21,454 21,454 Accounts payable and accrued j liabilities 7,207,596 (4,318,027) i Deferred revenue 514,360 5,275,732 Deferred taxes 8.147,419 10.470,886 Net cash provided by (used in) operating activities 30,339,360 29.898,590 Cash flows from investing activities: Investments (3,793,056) (10,448,329) , Reserve funds (19,450) (18,422) 1 Purchase of property and equipment (12.099,300) (11,176.825) Net cash used in investing activities (15,911,806) (21,643,576) Cash flows from financing activities: Mortgage payable (1,089.378) (33,038,446) Net cash provided by (used in) financing activities 112S8.9,378) (93,038,411) Increase (decrease) in cash and cash equivalents 13,338,176 (24,783,432) Cash and cash equivalents, beginning of year 32,912.489 57,695,921 Cash and cash equivalents, end of year $ 46,250.665 $ 32,912.489 Supplemental disclosures of cash flow information: Cash paid during the year: Interest $ 21.210,619 $ 41.562.162 l 1 l See accompanying notes. _ _ ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . - _ _ _ . _ _ _ . _ . _ _ _ _ . _ _ . _ ____.____-.__..______._m _ . _ _ . _ ..A..
SALUDA RIVER ELECTRIC. COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1988 AND 1987
- 1. Description of the Entity The accounting records of Saluda River Electric Cooperative, Inc.
(the Cooperative) conform to the Uniform System of Accounts,
' prescribed by the U.S. Department of Agriculture as modified for electric borrowers of the Rural Electrification Administration (REA).
The Cooperative was formed in 1958 and is composed of five rural-electric cooperatives located in South . Carolina. 'The Cooperative-represents the member cooperatives in dealings with Duke power Company (Duke). Since November.1, 1983, the Cooperative has purchased . wholesale power from Duke for sale to the member coopera-tives. In order to secure a reliable source of-power for their consumers,
~
these members, through the Cooperative, purchased a portion of Duke's Catawba Nuclear. Station (Catawba), consisting of two nuclear reactors. Under the terms of the purchase ' Agreement between Duke and the Cooperative, the Cooperative legally owns 18.75 percent of Unit 1 and 9.375 percent of all Catawba support facilities, including land and related assets. However, under the terms of the Interconnection Agreement, the Cooperative it entitled to 9.375 percent of the power generated by both Unit 1 and Unit 2. Also under the terms of the purchase Agreement, ' a portion of the power produced by the Cooperative's share of each Unit is sold to Duke. During 1987, Duke purchased 90 percent of the Cooperative's share of power generated by Unit 2 and 80 percent of the Coopera-tive's . share of power generated by Unit 1. During 1988, Duke purchased 80 percent of the Cooperative's share of power generated I, by. Unit 2 and 70 percent of the Cooperative's share of power l generated by Unit 1. Duke's purcnase of power generated by the - 1 Cooperative's share of Units 1 and 2 will continue to decrease by 10 percent annually, subject to certain contractual limitations. Also, under the terms of the Operating and Fuel Agreement between Duke and the Cooperative, costs payable by the Cooperative are based upon a 9.375 percent interest in Unit 1, Unit 2 and the support facilities. As a result of the substance of these agreements, the Cooperative,' for financini reporting purposes, accounts for its investment based upon a 9.375 percent interest in the entire project.
- 2. Electric Plant in Service Major classes of the Cooperative's electric plant in ' service as of December 31, 1988 and 1987, are as follows:
1988 1987 l Structures, improvements and land $134,066,225 $ 132,981,148 Equipment 305,495,167 302,898,050 i Nuclear fuel 36,597,069 33,198,2.11 l L
$ 476.158.461 $ 469.077.442 l ,
4
l [ SALUDA RIVER ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31,-1988 AND 1987
?. Electric Plant in Service (continued)
Depreciation is computed based on the straight-line method with a half year of depreciation taken in the year of acquisition. Annual depreciation rates in effect in 1988 and 1987, were as follows: 1988 1987 Electric plant in service 4.0% 4.0% Mobile substation 3.2 3.2 Office furniture and fixtures 7.0 7.0 } Vehicles 17.0 17.0 The composito depreciation rate for electric plant in service includes a factor to provide for the expected cost of decommis-sioning. Individual component lives range from 30 years for structures and . improvements to 15 years for other general plant equipment. The Cooperative's portion of decommissioning these jointly owned facilities, based on current price levels and decommissioning promptly after the unit is taken out of service, is estimated at approximately $34,000,000. This estimate will be adjusted periodically to reflect changing price levels and technology. , Construction work-in-crocress Construction work-in-progress, consisting primarily of substations, is stated on the basis of cost which includes interest on borrowed funds.
- 3. Fuel Cost The cost of nuclear fuel is being amortized based on core burn. The total amortization expense was $9,892,805 in 1988 ano. $9,4 84,611 in 1987.
The Cooperative, in accordance with the terms of the Operation and Maintenance Agreement for Catawba, pays Luke a monthly fee for the disposal of spent nuclear fuel. This disposal fee is based on kilowatt hours of energy generated and is charged to operations and maintenance expense as a cost of produced power.
- 4. Lono-Term Investments Investments consist of general funds invested for longer than a one-year period and investments in associated organizations.
At December 31, 1988 and 1987, investments in associated organiza-tions consisted of $48,296 of Capital Term Certificates (CTC) with the Cooperative Finance Corporation (CFC). The CTC's are presently earning 4 percent interest and will be kept by the CFC until 2080. , 1 l . l . ____.__m_ __
SALUDA RIVER ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1988 AND 1987
- 5. Debt Service Reserve Funds - Pollution Control Bonds The reserve funds / pollution control bonds are restricted funds with the CFC and had the following balances:
Yenr Fnded December 31. 1988 1987 Pollution Contro) Bonds (PCB) $ 4,395,183 4,375,733 Subordinated Term Certificates (STC) 2.210.000 2.210.000
$ 6.605.183 $ 6.585.733 The PCB Reserve Fund was established to provide for deficiencies, if any, in the amount avai16ble to pay the principal and interest on the bonds and to provide for the final payments of principal and interest on the bonds. Investments in the PCB Reserve Fund earn interest at rates ranging from 8.35 percant to 10.375 percent.
The STC's represent a 5 percent compensating balance of the Coo' perative's Pollution Control Bonds, earn interest at 11.648 percent and are outstanding for the life of the bond issue.
- 6. Deferred Charegg Deferred charges consist of the following:
Year Ended December 31. 1988 1987 Unamortized debt expense: Federal Financing Bank (FFB) notes $ 36,577 $ 37,884 Pollution Control Bonds (PCB) 522.121 542.268
$ 558.69g $ 580.152 The unamortized debt expense of the FFB notes is being amortized based on the mortgage notes outstanding. The unamortized debt expense of the PCB consists primarily of underwriters and legal fees associated with the issuance of the PCB and is being amortized based on bonds outstanding.
Amounts above are net of accumulated amortization of $91,450 and
$87,676 for 1988 and 1987, respectively.
l
- 7. Lono-Term Debt
, Long-term debt consists of the following: l: t f Year Ended December 31. j 1988 1987 Mortgage notes - FFB $ 384,702,765 $ 385,792,143 Note payable - Duke Power 18,928,353 18,928,353 Pollution Control Bonds 44.200.000 44.200.000
$ 447.831.118 $ 448.920.496
SALUDA RIVER ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1988 AND 1987
- 7. Lono-Term Debt (continued)
Mortance Notes - FFB These mortgage notes payable to the federal F'nancing Bank (FFB) function basically as a line-of-credit with funds borrowed as needed for construction of Catawba. Unadvanced loan funds of $123,477,857 at December 31, 1988 and 1987, respectively, were available to the
' Cooperative under the current agreements. Interest rates vary from 7.325 percent to 11.118 percent. Substantially all assets of the Cooperative are pledged as security for this . debt, and under the terms of the debt agreement, the Cooperative is restricted as to the amount of patronage credit which can be distributed, along with restrictions of certain investment and capital activities. ,
I Maturity dates range from December 31, 2015 to December 31, 2019. i principal payments on the mortgage notes began in June 1988. The cash proceeds of the mortgage notes are restricted for the purchase of the Cooperative's interest in Catawba, nuclear fuel, and administrative and general expenditures associated with the construction. Note Pavable - Duke Power On February 6, 1981, the Cooperative executed an unsecured note payable to Duke Power Company in the amount of $18,928,353, which represents the Cooperative *s share of the negotiated cost of trans-ferred assets of Catawba at that date. This note is to be paid in 100 equal quarterly payments consisting of principal and interest over a term of 25 years. The first installment will be payable on June 29, 1995' 10 years after the date on which the first Unit of Catawba was put into service. Interest shall accrue and be payable on the principal balance at the j rate of 11.112 percent. l l l Pollution Control Bonds j On November 29, 1984, the Cooperative issued $44,200,000 of 30-year I Pollution Control Bonds. The funds are restricted to pay or ' refinance the co s t s- associated with certain . pollution control facilities at Catawba. The bonds bear a variable, semi-annual interest rate (5.875 percent at December 31, 1988 and 4.7 percent at December 31, 1987). Principal payments escalate and are to be made each year beginning with $650,000 in 1994 until $4,000,000 is due on the maturity date in 2014. l The Cooperative also has unadvanced loan funds of $12,000,000 available relating to commitments from the National Rural Utilities ( Cooperative Finance Corporation. The funds may be borrowed at any l tire during the twelve months ended November 26, 1989. As of December 31, 1988, no proceeds have been borrowed by the Cooperative under this agreement. In accordance with industry practice, portions of long-term debt due within one year are not segregated, and therefore, are not included under current liabilities. l 1 l t
) SALUDA RIVER ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS [ DECEMBER 31, 1988 AND 1987 l l
- 8. Patronace Caoital i
Net margins are allocated to patronage capital accounts in accordance with guidelines established by the Board of Directors for each member. In 1988 and in 1987, a net margin was not available to be allocated. Patronage capital credits may be paid to the Cooperative members at the discretion of the Board of Directors except as restricted by the debt agreements described in Note 7.
- 9. Deferred Revenue At times, the Cooperative sets rates with the intention of recovering certain costs expected to be incurred in the future.
Revenue related to these expected future costs are deferred until such time as these costs are incurred. i
- 10. Income Taxes South Carolina law exempts all electric cooperatives from state income taxes; consequently, the Cooperative is exempt from state income taxes. Whether or not a cooperative is exempt from federal income taxes is a function of certain tests under the Internal Revenue Service Code Section 501(c)(12) relating to the sources of revenne and is determined annually.
For the years ended December 31, 1988 and 1987, the Cooperative was deen ed a taxable entity for federal income tax purposes. Differences between income tax and financial reporting income result primarily frcm different treatment of methods of computing deprecia-tion. Investment tax credits are eccounted for as reductions of income tax expense in the year utilized, under the deferred method. In addition, as of June 30, 1988, due to Internal Revenue Service Regulations, unexpired investment tax credits were reduced by 35 percent. In 1987, the Cooperative changed from the flow-through method to the deferred method of accounting for investment tax credits. The deferred method amortized the investment tax credits over the estimated useful lives of the assets generating the credits while the flow-through method includes these credits as income in the year earned. This change was made primarily to conform to predominant practice in the electric utility industry. At December 31, 1988, the Cooperative had the following approximate amounts available for carryforwards to future years: Financial Income Tar _ Reoortino Investment tax credits (expiring in 2000) $ 22,000,000 $ 22,000,000 Net operating losses: Expiring in 2000 18,000,000 0 Expiring in 2001 49,000,000 0 Expiring in 2002 34,000,000 0 Expiring in 2003 33,000,000 0 l l l
i l l SALUDA RIVER ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1988 AND 1987 I l
- 11. E.tatement of Cash Flows I The Cooperative has adopted Statement of Financial Accounting Standards No. 95, Statement of Cash Flows. Prior years have been reclassified to conform to the 1988 presentation. For purposes of ,
this Statetnent, short term investments which have a maturity of one yea or less are considered cash equivalents. 1 l. f I I J I I I I I I I I I - = - - - - I I .I I I I I I I
I SCHEDULE 1 (UNAUDITED) SALUDA RIVER ELECTRIC COOPERATIVE, INC. OFFICERS AND TRUSTEES Joe L. White, President 200 Sunset Drive Abbeville, South Carolina 29620 W J. David Wasson, Jr., Vice President Route 3 Box 778 Laurens, South Carolina 29360 Charles E. Dalton, Secretary-Treasurer 117 East Baker Street Pickens, South Carolina 29671 Robert C. Carroll, Trustee i 119 Hillside Drive Gaffney, South Carolina 29340 ) J. A. Darby, Trustee Route 1 Box 63 Rock Hill, South Carolina 29730 j I Ralph Hendrix, Trustee Route 15 Greenville, South Carolina 29607 I Robert N. Parker, Trustee Route 6 Anderson, South Carolina 29621 I I I D. W. Stribling, Trustee Walnut Hill, Westminster, South Carolina 29693 Ralph Settle, Trustee 391 Old Settle Read Inman, South Carolina 29349 I- R. O. Williams, Trustee 1 i l 201 Oak Street I York, South Carolina 29745 Joseph W. Mulholland, Executive Vice President I . 106 Wilderness Lane I Lourens, Soutn Carolina 29360 Charles L. Compton, Vice President Corporate Relatione and General Counsel Leftbank Laurati, Soutn Carolina 29360 I I I I
__-__._____7_---_ SCHEDULE 2 SALUDA RIVER ELECTRIC COOPERATIVE, INC. SCHEDULE OF CASH INVESTMENTS YEAR ENDED DECEMBER 31, 1988 General fund investments: The palmetto Bank, Laurens, South Carolina: Sweep Account, variable _
$ 2,278,929 Certificate of Deposit #24,881 at 7.360%, due 6/20/89 100,000 South Carolina National Bank 18,173 Standard Federal, Columbia, South Carolina:
Certificate of Deposit #1-01-23276-6 at 8.25% 100,000 Cooperative Finance Corporation, Washington, D.C.: Note #88277025 at 8.150%, due 1/3/89 1,968,102 Note #88302135 at 8.225%, due 1/3/89 2,500,000 Note #88365034 at 8.500%, due 1/3/89 B,000,000 Note #88327067 at 8.550%, due 1/11/89 4,000,000 Note #88336008 at 9.125%, due 1/12/89 1,465,175 Note #88295156 at 8.175%, due 1/18/89 1,600,000 Note #88294178 at 8.175%, due 2/1/89 3,300,000 Note #88315041 at 8.275%, due 2/8/89 327,502 Note #88299082 at 8.200%, due 2/14/89 1,550,000 Note #88357016 at 9.000%, due 3/1/89 2,013,929 Note #88365035 at 8.875%, due 3/31/89 2,650,000 Note #88356091 at 9.00%, due 3/1/89 2,000,000 Note #88362040 at 9.00%, due 3/1/89 960,000 Note #88355172 at 9.00%, due 3/28/89 8,518,833 Bank of York, York, South Carolina: Certificate of Deposit #3263 at 7.300%, due 2/16/89 100,000 First Trident: Certificate of Deposit #52371 at 8.20%, due 2/6/89 100,000 Woodruff Federal, Woodruff, South Carolina: Certificate of Deposit #1-00-057040-3 at 7.60, due 2/16/89 100,000 NCNB, Abbeville, South Carolina: Certificate of Deposit #708000084436905 at 8.375%, due 2/22/89 100,000 - C & S, Gaffney, South Carolina: Certificate of Deposit #586829 at 7.70%, due 2/19/89 100,000 Citadel Federal, Charleston, South Carolina: 1 Certificate of Deposit #32512 at 8.00%, due 5/1/89 00,000 First National Bank of pickens Corn #y, EasleF, South Carolina; Certificate (f Deporit #201J 0f ? 4t A.25%, tue 5/20/S9 100,000 1 NCVB, Greenwood, South Carollae: l Certificate of Deposit #7C8000084436905 at 9.00% 100,000 l NCNB, Greenwood, South Carolina: l Certificate of Depcsit #708000094436916 at 8.95S 2,000,000 t First Unien, Laurens, South Carolina
- Certificate of Deposit #8670 at 7.750% 100,022 l General Fund Cash Equivalents 46,250,643 U. S. Treasury Note at 9.000%, due 11/15/93 1,000,000 U. S. Treasury Note at 8.375%, due 11/15/92 2,000,000 ,
SCHEDULE 2 - continurd SALUDA RIVER ELECTAIC COOPERATIVE, INC. SCHEDULE OF CASH INVESTMENTS YEAR ENDED DECEMBER 31, 1988 L l General fund investments (continued): U. S. Treasury Note at 9.000%, due 11/15/93 1,000,000 U. S. Treasury Note at 8.25%, due 2/15/93 6,000,000 U. S. Treasury Note at 9.00%, due 11/15/93 1,d00,000 l U. S. Treasury Note at 8.25%, due 8/15/92 2,465,000 l Unamortized discounts (23,615) Total general fund $60.402.02n Pollution Control Bond fund investments: Sovran Bank: Certificate of Deposit #845996-90-0 at 8.35%, due 2/15/89 $ 230,066 Treasury Bond #912810-DB-1 at 10.375%, due 11/15/12, face value $4,435,000 less discount of $269,883 4,165,117 Cooperative Finance Corporation, Washington, D.C.: Term Certificate #44 at 11.648%, due 8/15/14 2.210,000 Total Pollution Control Bond fund investments $ 6.605.183 l f I i
SCHEDULE 3 SALUDA PIVER ELECTRIC COOPERATIVE, INC. SCHEDULE OF ACCOUNTS PAYABLE YEAR ENDED DECEMBER 31, 1988 .q Allocated Allocated to to Operating Construction Ernense Total Duke Power Company (O & M) $ 0 $ 1,126,484 $ 1,126,484 Duke Power Company 0 7,796,543 7,796,543 78,400 Duke Power - construction ecsts 78,400 73,954 0 73,954 SCE&G 0 Southern Engineering 0 4,552 4,552 Broad River Electric 100,621 100,621 Cooperative, Inc 0 Flowers Enterprise 0 28,220 28,220 Utility Construction Company 0 58,160 f2,160 Carter & Crawley,-Inc. 0 54,476 54,476 York County Treasurer 0 1,856,121 1,856,121 Miscellaneous 0 36,472 36,472 Total accounts payable $23.422 $11.135.603 $11.214.003 S l
f SCHEDULE 4 l
'SALUDA RIVER ELECTRIC COOPERATIVE, INC. 3 SCHEDULE OF ACCOUNTS RECEIVABLE 4 YEAR ENDED DECEMBER 31, 1988 l l
I l f Blue Ridge Electric Cooperative, Inc. $ 2,582,710 1 Broad River Electric Cooperative, Inc. 1,140,768 York Electric Cooperative, Inc. 1,868,777 Little River Electric Cooperative, Inc. 527,176 l Laurens Electric Cooperative, Inc. 2,669,738 Contractors 227,615 Miscellaneous 1,139 Duke Power 40,325,377 Total accounts receivable $49.343.300 1 1 l l l I I 1 ~ _-.-_-_ ~ ~ ~ " - ~ ~ _ _ _ . _ _ _ _ _ _ _
L l U D t a 7 6 7 6 L 6 E o 8, 8, B H T C S 9 9 L 9 9 - 9 - 2 e 6 6 f2 r 4, 4, l t e t v 0 0 d 0 ii 9 9 9 L R 7 7 Z r 6 - 6 - 6 e 5 5 5 v 1, 1, 1 i R 0 0 L 1 1 1 1 d a 5, 5, 5 o r 1 1 L B 4 . 4 - 4 0 0 0 k 9, 9, 9 r Y o 4 3 4 3 1 8, 8, 8 1 1 L C N I
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l : - SCHEDULE 6 1
'SALUDA RIVER ELECTRIC COOPERATIVE, INC.
SCHEDULE OF
SUMMARY
OF FEDERAL FINANCING BANK NOTES 1" YEAR ENDED DECEMBER 31, 1988 Date'of Interest ~ . iInterest Note Nnmher Note Term Due_Date Rate Princioal F0120 12/01/82 Fixed 12/31/16 10.719% $ 1,500,000 F0125 -12/30/82' Fixed 12/31/16 10.535 10,569,000 F0011 02/06/83 Fixed 12/31/15 11.118 131,514,687 F0031 06/01/83 Fixed 12/31/15 10.980 927,295 F0036- 06/30/83 Fixed 12/31/15 11.092 6,441,012 F0270 07/01/85 Fixed ~12/31/19 10.483 12,336,000 F0275 .08/01/85 Fixed 12/31/19 10.734 996,000 F0040 08/05/85 Fixed 12/31/16 10.815 -1,817,721. F0045 09/03/85 Fixed 12/31/15 10.530 3,604,710 F0165 09/03/85 Fixed 12/31/17 10.521 5,637,000
-F0280 09/03/85 Fixed 12/31/19 10.514 948,000 F0285 09/30/85 Fixed 12/31/17 10.516 11,931,443 F0050 09/30/85 Fixed 12/31/15 10.525 6,989,732 F0170 09/30/85 Fixed 12/31/17 10.522 11,150,000 F0290 11/01/85 Fixed 12/31/17 10.296 304,185 F0175 11/01/85 Fixed 12/31/17 10.303 3,454,000 F0056 11/04/85 Fixed .12/31/15 10.267 1,728,000 F0061 12/02/85 Fixed 12/31/15- 9.907 1,000,000 F0180 12/02/85 Fixed 12/31/17 9.903 2,811,000 F0295 12/02/85 Fixed 12/31/17 9.897 775,744 F0300 12/30/85 ~ Fixed 12/30/17 9.330 11,129,683 F0185 12/30/85 Fixed 12/31/17 9.336 11,760,000 F0066 01/03/86 Fixed 12/31/15 9.3660 8,640,000 F0305- 01/03/86 Fixed 12/31/17 9.384 1,601,659 F0190 01/31/86 Fixed 12/31/18 9.3910 1,106,000 F0070 02/03/86 Fixed 12/31/l'6 9.3740 960,000 F0310 03/01/86 Fixed 12/31/17 8.316 1,273,908 F0075 03/03/86 Fixed 12/31/16 8.3180 2,565,000 F0195 03/03/86 Fixed 12/31/18 8.3190 4,907,000 F0315 03/31/86 Fixed 12/31/17 7.690 11,455,243 F0081 04/02/86 Fixed 12/31/16 7.5160 7,042,000 F0320 05/01/86 Fixed 12/31/17 7.537 153,287 F0085 05/05/86 Fixed 12/31/16 7.7030 1,793,000 F0325 06/02/86 Fixed 12/31/17 7.885 1,182,855 F0090 06/10/86 Fixed 12/31/16 7.3740 2,915,000 F0200 06/30/86 Fixed 12/31/17 7.3710 11,644,032 F0330 06/30/86 Fixed 12/31/17 7.371 11,530,577 F0095 07/02/86 Fixed 12/31/16 7.3250 8,646,000 F0335 08/01/86 Fixed 12/31/17 7.480 932,611 F0100 09/30/86 Fixed 12/31/16 7.6920 2,350,000 1 F0105 09/30/86 Fixed 12/31/16 7.6920 4,367,000 l
F0205 09/30/86 Fixed 12/31/17 7.6940 2,319,528 F0210 09/30/86 Fixed 12/31/17 7.6940 3,081,090 F0215 09/30/86 Fixed 12/31/17 7.6940 12,371,148 F0220 09/30/86 Fixed 12/31/17 7.6940 696,854 F0225 09/30/86 Fixed 12/31/17 7.6940 3,509,157 F0340 09/30/86 Fixed 12/31/17 7.6940 6,442,912 F0110 10/01/86 Fixed 12/31/16 7.6050 8,892,000 F0230 12/31/86 Fixed 12/31/17 7.4450 9,355,670 F0115 12/31/86 Fixed 12/31/16 7.4410 2,250,000 F0235 12/31/86 Fixed 12/31/17 7.4450 895,756 F0240 12/31/86 Fixed 12/31/17 7.4450 3,065,475 F0255 06/30/87 Fixed 12/31/17, 8.4780 242,615 l F0260 06/30/87 Fixed 12/31/17 8.4780 3,917,839 FP265 06/30/87 Fixed 12/31/17 8.4780 3.272.337 Total amount advanced $384.702.765 _ _ _ _ - _ . - _ _ _ - - _ - - _ - _ _ _ _ - _ _ _ _ - _ _ _ _ _ _ __-_ ______-__-__ _ _-__ _ _-_ _ _ -}}