ML20009B623

Annual Financial Rept 1980

ML20009B623
Person / Time
Site:	Grand Gulf
Issue date:	07/09/1981
From:	SOUTH MISSISSIPPI ELECTRIC POWER ASSOCIATION
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ML20009B613	List: ML20009B612 ML20009B614 ML20009B615 ML20009B616 ML20009B617 ML20009B618 ML20009B620 ML20009B621 ML20009B623
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NUDOCS 8107160455
Download: ML20009B623 (30)

Text

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ELECT I OWER TION Annual Report 1980 D ADO OOO

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Mr. Hubert M. Little, a member of the board of directors of South Mississippi Electric Power Association representing Southwest Mississippi Electric Power Association, died on January 17,1981.

The board of directors at its January board meeting adopted a resolution commemoratirg the life of Mr. Little.

l Mr. Little had served in the interest of 4 l rural electrification since the inception of the program. He was a long time member of the board ofdirectors .' Southwest Mississippi Electric Power Association at Lorman, Mississippi -

and was for many years active in the Electric Power Association's of Mississippiin addition to ,

his role as director for South Mississippi Electric Power Association. s The dedication, consistency, skill and friendship of Mr. Little will be missed by the board of director = and the employees of the Association.

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3 A WORD OF APPRECIATION During 1980, R. D. Morrow, Sr., resigned from the board of directors of South Mississippi Electric Power Association after more than a quarter of a century of servbe. His resignation culminates a long and distinguished career in the rural electrification program.

Mr. Morrow was elected to tl.e board of directors of South Mississippi Electric Power Association in July of 1956, and was elected president of the board of directors soon atter. His leadership has enabled South Mississippi Electric Power Association to compile an enviable record of growth.

Mr. Morrow received a bachelor's degree in General Agriculture from Mississippi State University in 1922. He received a master's degree from that University in 1925. While at Mississippi State University, Mr. Morrow was president of his senior class, vice-president of the "M" Club and a consistent track star running for more than a dozen championships. He served as captain of the track team in 1921 and was later named to the Mississippi State University Sports Hall of Fame.

Mr. Morrow got his Orst taste of politics on a large scale by serving as Senator John Stennis' first campaign manager. Eight years later, in 1956, Mr. Morrow was elected State Treasurer. The state treasury had a $100 million surplus under Mr. Morrow's leadership. When his term ended, he continued to serve the state as B_ank Comptroller.

Mr. Norrow has served as the president of the State Wildlife Federation and Forest Owners Irc. He served as chairman of the Mississippi Citizens Council on Education for five years. He was an officer for the Mississippi and Industrial Development Corporation, Pearl River Basin Development District, and the Andrew Jackson Boy Scout Council. He has served as president of the Board of Trustees of the Institutions of Higher Learning, president of Mississippi State Alumni Association, chairman of the Rankin County School Board, state commander of the American Legion and the American Legion's National Executive Committee.

Mr. Morrow was also a founder and director of the Mississippi Chemical Corporation and of the First Mississippi Corporation, among a dozen state companies he has served as director.

Mr. Morrow has been honored in many waya for his distinguished service to his fellow man. He got the First Federal Award, given annually to four Mississippi doers; the Distinguished American Award given by the Central Mississippi Chapter of the National Football Foundation and Hall of Fame; the Distinguished Service Award of the Mississippi Farm Bureau; the Distinguished Service and Life Membership Award of the American Legion, and, tl e Governor's Mineral Conservatior Award.

In recognition of the many accomplishments el Mr. Morrow, the board of directors of South Mississippi Electric Power Ass,ciation named the coal fired generating plant near Purvis, Mississippi the R. D. Morrow, Sr.

Generating Plant.

His leadership will be missed. His accomplishments, which are many, are most appreciated.

l 4

e W-BOARD OF DIRECTORS (S anding)

Ilcrece II. Twiford, Jr. - Coahoma .;

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.) " "? Electric Power Assn., Joe W. Noble -

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• E Southwest Mississappi Electric Power {J G Assn., W. T. Shows - Pearl River Valley j>

N Nh 3 e. Electric Power Assrt, W. T. Ruffin - '

I (N Southern Pine Electric Power A ssn.,

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Robert St. John Southwest - 1 Mississippi Electric Power Assn. .M ,. A f .' h' * ' ,1.

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W. C. Mc Kamy. Jr. - Twin County h

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'I' Electric Powei Assn., Giles Bounds - ., 3 M

,a j g h Coahoma Electric Power Assn., Floyd 1 -_.. m. i A i g- Lynk - Twin County Electric Power W ,

A ssn., Claude Parker - Magnolia

• J. T. Dudley, Sr.

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Electr.c Power Assn. Singing River Electric Power Assn.

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Robert I , Graham - Dixie Electric h:l;\]V /-

Power Assn., Louis M. Aden - Yazoo

}- Valley Electric Power Assn., L. R.

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Parker - Yazoo Valley Electric Power A ssn.

i 11. M. Little Southwest Mississippi Electric Power Assn.

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7 > I (Standing) j L. C. Spencer - Delta Electric Power

.~/. Assn., Jack Ware Singing River ' 4 Electric Power Assn.

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• IIenry C. Waterer, Jr. - Delta Electric 4 Power Assn., IIenry L. Thomas -

% Coast Electric Power Assn., Blaine d II. Eaton -Southern Pine Electric

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Power Assn., James A. Rester Coast

• Joe Stevens Electric Power Assn. Coahoma Electric Power Assn.

I e C. C. Clark, Vice President - Magnolia .

Electric Power Assn., L. G. Pierce, 5

Assistant Secretary - Dixie Electric

Power Assn.. D. R. Ware, Secretary - ,

Singing River Electric Power Assn.,

W. W. Bond, President - Pearl River

• R. D. Marrow, Sr.

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. Valley Electric Power Assn. Southern Pine Electric Power Assn.

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5 PRESIDENT'S MESSAGE a

It is with a great deal of emotion that I write this first President's Report since being elected president of the Association. It is a _

privilege to serve in this capacity, but it is an humbling experience to try to fill the shoes of a R. D. Morrow, Sr. who has served as president of this Association for the last quarter of a century. Mr. Morrow's accomplishments have been many, and he has given n'uch direction to the development of the Association. I commend Mr. Morrow for the splendid leadership he has provided and will make every effort to continue the fine tradition that he has estab-lished for the presidency of this issociation.

As I look back over the year 1980, I recognize immediately that it has be n a year of grave change. In fact,it has been a year of transition.

This Association made the transition into =

the nuclear field with the purchase of a 10% undivided interest in the Grand Gulf Nuclear Plant being cons

• ucted near Port Gibson, Mississippi. This represents a new source of power for the Association and a new direction. As a result of that purchase, the Association ac-cepted four new members and the additionalload requirements for those members. This expands the power supply responsibility and creates a tremendous challenge for us. _

with the addition of the new member _

cooperatives came the expansion of the board of directors. The total number of directors increased from 14 to 22 during the year. This expansion of our board of directors gives a -

broader base from which policy decisions can be made. -

The board of directors lost several valuable members during the year. Mr. R. D. Morrow, Sr., who has served so willingly for so long, retired during the year. Mr.J. T. Dudley, Manager of Singing River Electric Power Associ- ,

ation, retired during the year. Mr. Dudley led the fight for the very existence of this Association for many years and served as its first rr.anager from 1958 to 1967. The year also took from us Mr. H. M. Little. Director from Southwest Mississippi Electric Power Association. who served for many years as a conscientious member of the board of directors.

His death will not erase the many contributions that he has made to the board of directors -

and to South Mississippi Electric Power Association. All three of these men will be sorely missed. .

The year 1980 also saw a drastic change in

,

R[f,q., the mood of the American public. The election of Ronald Reagan as President of the 4 ij..,' . ..

United States strongly points out the desire of the American public for a more conservative

,}ji Si... approach to federal government. Although there are many favorable things that will come Y.., of this more conservative approach, one major obstacle has been placed before us. As I l . .Y  ::: write t'.ese very words, there is danger oflosing some portions of the opportunities afforded 5 j  :! '!! us under the Rural Electrification Act. J U ., . <!j So that brings me to where we always seem ]

jf j:. to be. In r viewing the annual reports from 1970 through the present, there is one thing ]

, ;;4q . .q;.0 s j[ that is apparent. Each year brings its share of major problems and concerns. However, each

> "," year alw seems to bring with it solutions and challenge. Ar we appicach the new year, we do so with excitement and enthusiasm. We know that our many friends in the national

.:,: 9! congress will work with us to insure that cur consumers receive the best available service at =

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, ' the least cost possible in today's situation. We acknowledge their contribution and the con-tributions of the many employees of REA, NRrCA and CFC and of our friends in the state

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and local governments with whom we are privileged to work. _

> The year 1980 brought with it its share of _

.jg - s . probl~ns.1981 will do likewise, I am sure. However, with the fine board of directors, g =, management, staff and employees working together, success will be ours. We will continue g Ni' ;Q - to provide reliable service to our members at the least possible cost. 4

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6 GENERAL MANAGER'S REPORT Changes brought about by the acquisition of a ten per cent interest in the Grand Gulf Nuclear Plant during 1980 affect most all facets of the Association's organization and activities. Loan commitments more than doubled;the number of member cooperatives increased from seven to eleven; the nunioer of consumers served by member cooperatives increased from 175,951 to 218,671; the electricalload con-tracted to be served directly from the Association's generating plants increased from 317 MW to 607 MW (1980 loads); the Association's responsibility for direct power supply went into 31 counties not previously supplied; delivery points to be metered by the Association increased from 69 to 133;and the board of dioctors increased from 14 members to 22 members.

l South Mississippi Electric Power Association, with these additions, has become a major source of electnc power for the citi-zens of Mississippi. All the generating capacity owned by the Association is now being full yutilized and attention is now being given to the development of additional gener-ating resources.

Load Growth Load growth, as measured by kilowatt hour (KWH) sales to members, has been very sporadic over the last decade. Extremely hot weather during the summer months of 1980 c*vercame the effect of high costs and conservation efforts to result in a net load growth of 8.28 per cent for the year. This brings the compound rate of load growth from 1972 through 1980 to 6.95 per cent.

Act al percentage load growth as a function of KWH sales for those years is shown below:

(These figures represent growth of the member cooperatives over the load of the same coop-eratives for the previous year and do not include the effect of adding new cooperative members.)

1 j  % Increase Over Year Previous Year l 1973 9.92 1974 4.70 1975 9.55 1976 7.85 1977 9.24 1978 6.59 1979 (0.19) 1980 8.28 l

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7 Cost of Power The actual cost to the Association of producing power increased by 6.32% over 1979, but the revenue derived from the rate in effect decreased by 0.5% (this accounts for the deficit position of the Association for 1980).

The tabulation of revenue actually derived, as shown below, reflects the increases in cost of power to the member systems for the last several years.

Revenue in Mills  % increase Over Ys.n per KWH Previous Year 1973 11.61 28.3 1974 16.83 45.0 1975 20.47 21.6 1976 23.97 17.1 1977 27.29 13.9 1978 31.49 15.4 1979 37.45 18.9 1980 37.26 ( 0.5)

The costs to the Association are broken down on page 220f this report. A study of the chart on that page will reveal the areas of cost increases during the last several years.

Construction Construction activities took a secondary position in the work of the Association during 1980. Only three such activities are listed here as being noteworthy.

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j , ' ' 1. Modifications to the scrubbers at Plant Morrow included the installation g :3 . ,;' 7, . of a chlorobutyl rubber lining in the scrubber modules and the installa.

' ^ tion of Hastelloy G steel plate in the inlet and outlet ducts of the scrubber.

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g.,v,jj.i. Finishing touches were put on the coal preparation plant in Kentucky,

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and it was placed in operation during January,1980.

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.. p. 3. Transmission line construction was very lean during the year. The only

. ., , . ;;- line constructed was a 4.9 mile tap to serve the Oak Grove substation

, of Pearl River Valley Electric Power Association.

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8 Grand Gulf Nuclear Plant Mississippi Power & Light Company announced the construction of the Grand Gulf Nucl ar Plant by press release on January 22, 1972. Immediately thereafter, this Association expressed an interest in purchasing a portion of that plant. Although conversations were carried on with representatives of MP&L through the years, serious negotiations actually began on Septernber 22,1975. These negotiations culminated in the writing and signing of six separate contracts as follows:

1. Interconnection Agreement between Mississippi Power & Light Company and South Missisa ppi Electric Power Association, dated July 18,1979.

2. Coordination Agreement between Mississippi Power & Light Company and South Mississippi Electric Power Association, dated July 18,1979.

3. Grand Gulf Nuclear Stat! Joint Construction, Acquisition and Ownership Agreement between Middle South Energy, Inc. and South Mississippi Electric Power Association, dated May 1,1980.

4. Income Tax Indemnification Agreement between Middle South Energy, Inc. and South Mississippi Electric Power Association, dated May 1,1980.

5. Grand Gulf Nuclear Station Operating Agreement between Middle South Energy, Inc. and South Mississippi Electric Power Association, dated May 1,1980.

6. Grand Gulf Nuclear Station Substitute Power Agreement between Mississippi Power & Light Company, Middle South Energy, Inc. and South Mississippi Electric Power Association, dated May 1,1980.

The purchase and operating agreements, the tax indemnification agreement and the substitute power agreement were approved by the Association's board of directors on April 16; a loan guarantee commitment was made by Rural Electrification Administration on October 2; and the contracts were clued and the first funds advanced toward the purchase on October 31.

These agreements provide, smong other things, for:

An interconnection to be established betw:en SMEPA and MP&L Co.,

and provisions for buying and selling power betwes n those organizations.

. A coordination cu:.imittee to be established for the purpost of coor.

dinating the planning activities of SMEPA and MP&L Co.

. The acquisition by SMEPA of a 10% undivided ownership interest in the Grand Gulf Nuclear Station. This acquisition is made through a tax partnership agreement under which SMEPA actually pays the total

. cost for the construction of the plart untilits share of ownership equals

( 10% and 10% of all construction costs and e%ses of operation there-after. The Association is entitled to 10% of all powes and energy pro-

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duced by the plar_t and agrees to bear 10% of the costs and expenses.

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. The purchase by SMEPA from MP&L Co. d power in the event the Grand Gulf units are not finished within certai'n time frames.

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9 An additional considerarton of the purchase involved the transfer of all the Electric Power Association load served by MP&L Co. to this '

Association. The agreement calls for the transfer to take place on the following schedule:

Junel,1930 - 140 MW June 1,1981 - 100 MW June 1,1982 -

Balance (approximately 50 MW)

This load assumption by the Association will have absorbed all the Association's surplus generating capacity with the June 1,1981 transfer, ,

and the Astaciation will be in slight deficit position until Unit 1 of Grand Gulf comes on line, now estimated to occur in late 1982. (This deficit will be covered by short-term purchases of power from other utilities.)

Fuel and Power Purchases

. The Association received the first train load of washed coal from the new

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coal preparation plant on March 11,1980.

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.iP ' a,f: . The cost of coal at the mine increased from $24.97 per ton to $30.49 per 4y y.m y;g ton during the year.

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j;;(,, . . The unit train freight rate increased from $11.51 per ton to $13.28 per

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.* Raw coal mined on the property owned by the Association in Kentucky V N..".g 'em y -; . .K L came to 1,327,414 tons during the year.

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. Banks & Associates, transportation consultants of Washington, D. C.,

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of the unit train freight rate.

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.: A report, dated July 16,1980, from Banks & Associates indicated that c..

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the freight rate being charged the Association was higher than it 7

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.# a,j [ should be under current regulations of the Interstate Commerce

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Commission.

h . [ y f,; . . ' , : . 'is i The Staggers Rail Act of 1980, which deregulates the nation's railroads,

.T*h E was passed and went into effect on October 1.

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. The Association carried on extended negotiations with Sandy Fork Mining

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, , d 5. . Company to compensate Sandy Fork for the " rejection factor" caused by 2 .

,. ,4 j* . $ ; } ., the placing in operation of the coal preparation plant. These negotiations

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g resulted in approval by the board of directors on November 19 of $30.00 iJ. per ton for clean coal, effective April 1,19'"). A method of escalat;ng the

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- J . allowance for the rejection factor has not been agreed upon as yet.

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- i . The gas contract with United Gas Pipeline was amended April 15 to pro-

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vide for a new (and higher) rate based upon the price of No. 6 oil.

iJ , t. f .4 .3 . % '7 -pVg . The first purchase of emergency energy from Big Rivers Electric Corpora-tion in Kentucky was consummated on May 17. This resulted from months of negotiations with TVA on the part of Big Rivers and MP&L Company on the part of this Association to deliver power from Big Rivers through the systems of TVA and MP&L Company to serve this Association's load.

10 Finances

. Advances received from the Federal Financing Bank (FFB) during the

, year totaled $92,605,000 at an average rate of 13.645%

. FFB notes maturing and " rolled over" totaled $85,104,000. The average interest rate on these notes increased from 8.476% before extensions to 11.241% after the extensions.

. Total FFB advances through 1980 amount to $225,259,000 at an Yl) average interest rate of11.744% At the year's end, all these advances were either two or three year notes.

. The Association received a loan guarantee from REA in the amount l of $400,000,000 for use toward the purchase of a 10% undivided interest in the Grand Gulf Nuclear Plant. As of the end of the year, l

', $89,210,000 had been advanced under this Ictn guarantee.

.f The Association continued to maintain an open line of credit with CFC and increased the amount from $12,000,000 to $25,000,000.

The Association allocated capital credits for 1979 to its members in l

the total amount of $3,413,822. Refund of these capital credits was not made because of the Association's failure to meet requirements of I REA as prerequisites for such refunds.

. The Association applied for a loan from the New Orleans Bar.k for Cooperatives in the amount of $60,000,000, but, at year's end, this

, loan had not been approved.

g Planning i *

. Dames & Moore continued work on the site selection study and the fuel

,' study. At year's end, these studies were drawing to a close, but reports i had not been received on either of them.

. A report was received from Buford Goft & Associates recommending l changes in the radio communications system of the Association, l . Planning and environmental work continued during the year on the

-; proposed interconnection with Alabama Electric Cooperative. Public I-  ? ?

hearings were held both in Alabama and Mississippi on the proposed routing of the line, and the Association submitted an environmental

, report to REA.

k Organi7ation

. A staff attorney was empt oyed for the first time during 1980.

3 . A second double-wide trailer, known as Annex II, was purchased and placed into position at the rear of the headquartsrs building.

Wage adjustments of 3.38% and 4.0% were made in May and November respectively. (The 4.0% increase was not received by employees in the bargaining unit represented by the IBEW.)

. A new Harris general purpose computer was purchated and delivued during the year. This computer will be placed in service during 1981 and will be used for accounting, engineering, materials management, other general purpose and technical uses and as a supplement to the control computer in the control center.

. The number of the employees of the Associaton increased from 203 to 215 during the year.

11 Safety

. 18 reportable accidents were experienced by the Association during the year, a reduction of 57.1% from 1979.

. The number oflost time accidents was reduced by 80% and the number oflost time days was reduced by 78.6% both figures from 1979. r

. As of December 31,98% of employees had completed both first aid and CPR courses taught by the Arsociation.

. A safety committee, representing all departments of the Association, meets on a regular basis, and makes many recommendations for im- (

proving the safety program. Awareness of safety problems and procedures is high among both management and non-management employees, and the entire organization seems to be working toward improvingits safety program. .

Miscellaneous

. The Association received certification by the Mississippi Bureau of

. Pollution Control as to the lawful operation of the air pollution control equipment at Plant Morrow, and permits were issued accordingly.

. All environmental permits to operate the coal preparation plant

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in Kentucky were ob*ained, and the responsibility for operating

', ' ' ,l under those permits was transferred to Sandy Fork Mining F -

Company.

. : A lease was signed with Cabot Oil Corporation for the oil and gas h ,

j rights on the property owned by the Association in Kentucky. As of year's end, this lease had not been approved by REA, but

. I% ' approval was being sought.

. Approximately 124 miles of transmission line (10% of the system) 7 - was groundline inspected and treated during the year.

256 m3es of transmission line was inspected by walking patrol

- during the year.

. 386 miles of transmission right of way were recleared during the .

year.

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- y An appeal by the Association to the Fifth Circuit Court of Appeals

,,.8 on the certification of the IBEW to represent certain employees of the

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A"ociation was lost during the year. As a result, a negotiating com-y- mittee was established and regotiations were undertaken with Local

! - _n'$ t,, 903 of the IBEW. Those negotiations were continuing at year's end.

In conclusion, I would like to personally ,

thank the board of directors for its outstandingleadership during the year and to thank each employee for his or her faithfulness and dedication to thejcb which we share together. The dedication and loyalty of the men and women employed by the Assodation make possible its successful operation arid the providing of dependable service to all our members at the e lowest possible cost.

W-- _ _ _ _ _ _ _ _ _ _ _ _

12 BALANCE SlIEET Assets (Note 2) Deccinber 31,1979 and 1980 1979 1980 Utility Plant (Notes 1 and 3)

Electric Plant in Service - at cost $261,320,835 $ 283,748,343 Construction Work in Progress 16,928,498 91,237,467 Total Utility Plaat $278,249,333 $ 374,985,810 Less: Accumulated Provision for Depreciation 21,305,619 29,447,020 Net Utility Plant $256,943,714 514%53R,790 Other Property and Investruents Investments in Associated Organizations

$ 4,374,040 $ 4,992,701 (Note 11)

Other Investments, including Temporary Investments 1,212,500 862,600 Special Deposits (Note 4) 391,189 417,800

$ 5.977.729 5 6.273.101 Current Assets Cash - General Funds S 388,269 $ 103.890 Cash - REA/FFB Lcan Funds 141,442 9,942 Deposits - Pollution Control Bond Proceeds (Note 5) 2,106,412 2.257,763 Accounts Receivable - Member Consumers 8.136,953 11,792,364 Accounts Receivable - Other (Nate 15) 707,423 122,849 Fuel Stock, Materials and Supplies (Note 1) 12,276,079 16.431,247 Other Current and Accrued Assets 470,442 527,523

$ 24,227,020 5 31,245,578 Deferred Charges (Notes 8 and 10) $ 3,571,470 5 3.o16 192

$290,719,933- 5 W.073.661

13 m

Liabilities and Other Credits (Notes 8,9 and 11) 1979 1980 Equitics and Margins (Notes 6 and 7)

Memberships $ 35 $ 55 Patronage Capital 3,413,822 51,543 Other Equities 535,436 $ 535,436

$ 3.949,293 $ SR7.034 Long-Term Dcht (Notes 1 and 8)

REA Mortgage Notes $ 63,824,394 $ 63,902,382 Other Long Term Debt 209,7C 5.132 303,7;6.927

$273,530,526 5367.659.309 Current and Accrued Liabilities (Note 1)

Notes Payable - Lines of Credit (Note 9) $ 59,239 $ 2,900,000 Accounts Payable - General 6,754,492 10,267,783 Accounts Payable - Retainage 5,379,923 4,781,886 Accrued Taxes 63,965 85,106 Accrued Interest 630.125 1,377,963 Other Current and Accrued Liabilities 170,293 237,386

$ 13.058.037 s 19po.424 Deferred Credits (Note 10) $ 182,077 $ 176,894

$290,719,933 $ 388.07 3.661 The accompanying notes are an integral part of this statement.

14 REVENUE & PATRONAGE CAPITAL For the Year Ended December 31 1979 1980 Operating Revenue and Patronage Capital Electric Energy Revenues (Note 14) $95,938,935 $108.389,316 Income from Leased Property - Net 1,111,895 1.010,451

$97,050.830 $109.399.767 Operating Deductions Operating Expense (Notes 1 and 15)

Production - Steam $28,232,809 5 41,660,211 Other Power Generation 327,956 123,062 Cost of Purchased Power 37,582,696 37,511,186 Transmission 451,314 1,438,895 Consumer Accounts 13,160 19,932 Administrative and General 1,611,8M 1,946d11 Operation Expense Total _ $ 68,219,7 51 5 82.599,743 Maintenance Expense Production $ 1,138,781 S 1,571,563 Transmission 616,613 922,129 General Plant 59,705 100.987 Maintenance Expense Total $ 1,815.099 S ' 59* 679 Depreciation Expense (Note 3) $ 7.225.336 5 7 %'a69 Tax Expense $ 219,556 S 233.915 Total Operating Deductions $77,479,742 5 92,791,206 Interest Expense 17,617.744 22,335,810 Interest Charg, d to Construction - Credit I t ,12 2.6 50) < 1.677.0R c )

• • ) $93.974,836 5113.449,931 Net Operating Margins (Loss) $ 3,075,994 5 ( 4,050,164)

Non Operating Margins 337.828 687.as s Net Patronage Capital or Margins (Notes 1 and 6) $ 3.413 R22 5 / 3. % 2.279)

The accompanying notes are an integral part of this statement.

1 15 l

l CHANGES IN FINANCIAL POSITION l l

For the Year Ended December 31 1979 1980 Funds Were Provided By I Net Margins (Loss) $ 3,413,822 $ ( 3,362,279)

Add: Expenses not Requiring an Outlay Of Working Capitalin Current Period:

l Depreciation, Depletion and Amortir. tion 7,545,871 8.103.414 i Additions To Insurance Loss Deductible Reserve, $60,000,less Losses Charged Thereto (Net) 59,489 ( 5,183)

NRUCFC and Other Capital Credits (Non Cash) (6.584) ( 1.449)

Increase in Long Term Debt - REA Advances 431,000 1,762,000 Increase in Long Term Debt - REA Other (Note 8) 167,866 Increase in Long Teun Debt - Other Advances -

FFB 16,716,000 92,605,000 Gross Proceeds from Pollution Control Revenue Bond Issues 2,455,000 Inc case in Long Term Debt - Other - Sandy Fork Train Loading Facility, Kentucky 267,000 Salvage Credits, Less Retirement Costs 7,621 139.295 Increase in Membership Fees 5 20 Decrease in Deferred Credits (1,083) 0-Decrease in Special Deposits - Kentucky Utilities (Note 4) 38,855 74,449

_ $ 2 8.372.8 62 5102.037.262 Funds Were Used For Extension and Replacement of P; ant $10,314,595 5 96,837,785 Transmission Facilities Acquired from Distribution Cooperative (Note 8) 167,866 Payments on Lorg Term Debt - REA 1,534,728 1,666,719 Payments on Long Term Debt - RisA - Other 14,144 17,293 Payments on Long Term Debt - Other 577,567 1,276,205 Payment of Capital Credits 2,439,937 Increase in Investments - Associated Organizations 474,575 617,212 Increase in Other Investments (Decrease) 912,167 ( 349,900)

Increase in Special Deposits - Other 4,93 101,060 increase in Deferred Charges 60,354 1,444,722 Increase in Working Capital 11,872,466 426,171

$ 28.372.862 f l02.037. 267 The accompanying notes are an integral part of this statement

16 Net Changes in Working Capital 1979 19

• Increase (Decrease)in Current Assets Cash -General Funds and Lot.n Funds $ 313,653 $ ( 415,879)

Unadvanced Funds - Pollution Control Revenue Rond Proceeds ( 1,839,936) 151,351 Accounts Receivable - Consumers 2,524,056 3,655.411 Accounts Receivable - Other 375,402 ( 584,574) katerial, Supplies and Fuel Oil 7,524,040 4,155,168 Prepayments and Other Currents Assets ( 88,912) 57,081 1 8.803.303 $ 7 018 558 Increase (Decrease)in Current Liabilities Notes Payable - CFC $( 2,805,761) $ 2,840,761 Accounts Payable - General and Retainage ( 266,767) 2,915,254 Accrued Taxes ( 6,130) 21,441 Accrued Interest (52,370) 747,838 Other Current and Accrued Liabilities 66,865 67,093 2 3,064,163) $ 6,59 2. 3 A7 Net increase in Working Capital s t i R 77 .166 1 426.171 The accompanying notes are an integral part of this statement.

l l

l l

l t

17 NOTES TO FINANCIAL STATEMENTS

1) Summary of More Significant ( 2) Assets Pledged Depreciation is computed monthly on Accountmg Policies straight line con.posite rates for GT Plant Substantially all assets are pledged as accounts as fo!!ows:

C) The accounting records of South security for long term debt.

Mi=alanippi Electric Power Association (MMEPA, South Missis- ( 3) Electric Plant, Depreciation and sippi or Association) conform to the Depletion Procedures Tf

~

Uniform System of Accounts pre-scribed by the Federal Energy Following are the m jor classes of utility h - Len 1M Regulatory Commission for Class A and B electric utilities modified for plant as of December 31,19 7 9 and 19 8 9 : [,*",',"""""**""*

< r.+ 4, a.,

[

clectric borrowers of the R ural h 4-*~~ W Electrification Administration.

(t,) P;rpetual inventory records are main. C N tained for meterials and supplies. The ra n 2 e mm s e.:n various inventory items, including W N' '*d U- * **

fuel supplies are priced at averagia ""*""d"'"""' u"n w 7 x *a No depreciation Las been taken in the tost. Transfers of materials and sus- .I. '.*,N,7 g y current or prior years on Land and Land Rights.

plies to construction and operating T- - w**

• Na m ***.o costs are :: corded monthly.

" " * ' '"O '*" *

(c) The portion of long term debt due in

• ' " ' ' ' ' " ' " General Plant assets are also depreciated one year is not reflected as a current 4+"~~  % monthly, on yearly straight line composite liability in the balance sheet.

1. '"a.d m u n. Eo~ rates as follows:

n ri... . u - sm man im anin Of total long terra debt of '~~*d*~6 - " * * " o "

$ 3 41,8 6 9,3 0 9 shown as uutstanding E l l$ D M tt December 31,1980, following are principal amounts budgeted to be *-a ad %-~~-n **s

""**"""""'*d paid as principal reductions during thi calendar year enhng December g r .C.I., r re 31,1981. ' a tem- T4 w, -d expense allocated to this account in *a %, .m 1972. r 'a=~~'a N= --* Sa'***

(b) Includes $ 6 31,2 38 at December 31 jC", q,y,,,,,

, *[

h. ,y a3 19 7 9 associated with construction of re ,- c .,,,,,,4 i p i tor,s R. D. Morrow, Sr. Generating Plant 7*j , ' p, y at Purvis.

,m.-. a. n (c) SMEPA and Middle South Energy,

' ' "ca d Inc. (M S E), a subsidiary of

((,[ ,,-,

Mid,Scuth Utilities entered into a Depletion of cost of Kents.cky coal joint construction, acquisition and reserves is computed on a " tonnage sold"

' ' e% m 'a ownership agreement on or about basis calculated to fully amortize such

[ ' " "' , May 1,198 0, whereby SMEPA and costs when estimated coal reserves have MSE Greed to construct the Grand been recovered. This property is presently

'- im Gulf Nuclear Station (GGNS) in leased to an independent coal producing Claiborne Cot.nty, Mississippi. When company for a royalty based on selling complete, SMEPA will own an undi- price per *on.

vided 10 5 interest in GGNS. MSE's (d) A portion of interest on borrowed undivident interest upon completion ( 4) Special Depoalt funds for construction, less income will be t e t from invested construction funds, is SMEPA advanced to Kentucky Utilities c pitall:ed as a component of the GGNS includes all land and rights, Company $ 372,2 4 3 in 1919 to cover the ec4 of constru; tion of utility plant units numbers 1 and 2 and all reac- estimated cost to Kentucky Utiaties of until such construction is placed in tors, generators including buildings constructing facilities necessary to supply housing sold equipment, inventories electric service to SMEPA's coal prepara-service and is reflect

• as a reduction of interest expense. states used for of materials, supplies, fuel, nuclear tion facility in Kentucky, Kentucky cnpitalization are equivalent to actual fuel and any and all other property Utilities is applying this deposit toward rites paid. If SMEPA had not api- for use in connection therewith in- electrical services furnished SMEPA at the t:lized such interest, net patronage cluding additional land, facilities rate of 20% of its electrical bill per year c:pital or margins would have been and other properties as may be effective January 1,1980. Electric energy l reduced by 81,122,660 and acquired, constructed, replaced and furnished SMEPA is being billed at installed provided och fmcilities are Kentucky Utilities' regular rate for like

$ 1,617.0 8 5 for the years 1979 and 19 8 0, respectively, for the common use of MSE and consumers except that total charges per (1) Rxvenue from energy sold to SMEPA. At December 31, 1980 calendar year may not be less than Mississippi Power Company and SMEPA's accumulated costs in such $163,500. The maximum period for property shown here as " Construe- which SMEPA rectives credits against this Mississippi Power and Light Com.

pany is offset in the secounts against tion Work in Progiess" totalled oeposit for energy used is five (5) years, 388*198,667. Anticipated total con, after which time any remaining unused cost of energy purchased from out-side suppliers. struction costs by SMEPA are esti- deposit will be forfeited. Kentucky mated to be approximately Utilities applied $ 3 6,4 2 0 toward electrical 8400,000,000 upon completion. service billed while SMEPA expensed

$ 7 4,4 4 9 (2 0 %of deposit) in 19 8 0.

t 18

( 5) Deposits Pollution Control Bond Rural Electrification Administration . United S tates of America acting Proceeds Other . Electric Plant Purchased through the Administrator of REA.

During years prior to l t s e. SMEPA These mortgages wul also secure This account includes the unadvanced agreed to purchase, subject to REA other debt of SMEPA to REA, and, portion of proceeds and accrued interest approval, certain transmission facu- in eerisin cases, to CFC. Interest from Pollution Co.strol Revenue Bond itses of Singing River (SREPA) and is due semi-annually (except as noted issues guaranteed by National Rural Porthern Pine (SPEPA) electric above regarding Series 19 8 0 C funds)

Utilities Cooperative Finance Corporation power assocf ations. Entries were on each of the bond inaues. In.erest a (CFC) in 19 f f,19 78 and 1980. These made in the accounts of SMEPA ar.J pdscipal will be tendered to CFC funds are on deposit m various trust setting up these assets at SREPA's for transmittal 4 the trustees for the accounts of Morgan Guaranty Trust and SPEPA's net book values at the bondholders, 8.lorgan Guaranty Trust Company of New York and Deposit acquisition dates. Balances owed on Company .nd Deposit Guaranty G uaranty National Bank (Mississippi), these notes at December 81, 1980 National flank ,

invested in short term CD's bearing in. totalled 8508,111 and is included terest at rates ranging up to 18.2 6 % at in the balance sheet as Long Term The serial bonds associated with these Deceinber 21,1980. Advances are ree- Debt-REA Mortgage Notes. Neither issues began matunns semi-annually ulaittoned from these fo wls as required. transaction had been finanied with in 19 8 0. Principal pay menta in 19 8 0 E approval by REA at the audit report were 8640,000 (1977 Series),

( 6) Detail of Net Patronage Capital Or date. 840,000 (1978 A Series) and u Margins 810,000 (1918 A-I Series). Term Federal Financing Bank (FFil) bonds of ali issues mature in the g Net reflected in other long term years 2 0 0 7 (8 21,12 0,0 0 0 ) and 2 0 0 4 debt is unadvanced portion ($ 1,0 0 0,0 0 0 ). M andatory semi-L (8854,464,000) of notes esecuted annual sinking fund payments

since 19 7 4 to FFB. The proceeds 7 required in connection with term A r, from FFB were or are being used for bond maturities begin in 19 9 8. None

% i., o

.s., , n. completion of R. D. Morrow, Sr. of the bonds of any series represent Generating Plant at Purels. a general obligation of the imN,

, , , , Missisalppi and payment of retainages Lamar County, P16ssissippi, nor of the

- . , . t j a y_ associated therewith, purchase of rail- State of Mississipet, not are they a

' ~ ' ' road cars used to transport coal frost

-_ '{ charge against the credit or taming

[ lta Kentucky properties ta its Purvis power of such County or State, o Plant, to finance the cost of coal pre * (See also 1977 and 1978 audit paration facilities constructed on its reports for additional specific infor-1 land in Kentucky arwi to finance the mation).

Margins assigned to members for all construction of an undivided let year through Decembi t- 81, 1918 were interest in G rand Gulf Nuclear Couriset far the cooperative advise, I retired by cash payr wt in 1919. Martins Station in Claibome County, that all financing documents,in addi-for year 19 79 were assigned to members Mississippi (See NcJe 8(c)). These tion to those named above, relative

<!urhg 19 8 0. notes are for periods of appremi* to all bond f ar es ir.cluding certain mately 86 years each and principal g uaran ty, assignment and agency L- ( 7) Other Equities payments are deferred for seven (f) agreements between CFC and the years from the date funds are trustees have IWn properly executed.

The balance in this account at the Jates advanced under toe notes executed.

E indicated represents contributions made p by present and former patrons during CFC Pollution Control Bond lasue pre-operating years and is carried in the This account represchts principal Oh W h M h M&

7% notes totalling 8643,424 at genera 11 edger as Donated Capital. balance due on bond issues of CFC Control December 31,1980 payabk in con-l- Guaranteed Pollution nection with Kentucky coal properties

( 8) Long Term Debt Revenue Bonds, Series 19 71,1918 A,

& 1978 A1 and 1980 C lasued by purchased in 1914. These notes are E Lamar County, Mississippi total. payable over a ten (10) year period

' Rural Electrification Administration from 1974 and are secured by mort-(REA) ling 8 4 4,2 8 0,0 0 0. Series 198 0 C is Eages on real property purchased.

_ Unadvanced funds on notes executed referred to as " Interim Series 198 0 to RFA not reflected in long term C", a short term issue of 8 2.4 5 5,0 0 0 debt totalled 86,410,000 at maturing in two (2 ) years, payable Other 9 Also reflected as long-term debt at December 31, 1980. Long term to CFC. Funds are being used for 2 lining pollution control equipment December 31, 1980 are notes with debt to REA is represented by 25 I and 6 5 mortgage notes payable to (scrubber) with hastelloy metal and laalances due totalling 8808.426 to member cooperatives under pro-the United States of America. The rubber. Interest is equal to 45 % of visions of power equalization or U notes are for pe 1ods of 85 years each. I' rime, is adjusted monthly and bllied supply agreements for construction E quarterly, A ccrued interest at

- Under the proWsions of ths loan December 31, 1960 was computed of transmission facilities leased to agreements, principal payments are at December 31,1980 was computed Mississippi Power and Light at 11.5 4 5 rat s of prime of 17.15 5). Company, an amount SMEPA a& reed deferred for the (8) or five (5) years from the date of execution of to pay Breeder Reactor Corporation SMEPA is regired to pay all princi-tBREEDER) for its pro-rata postion the notes. pal and interest installments on

= these obligations as they become due of estimated cost of research to develop a liquid metal fast breeder Principal repaid during the year and CFC has unconditionally guaran-totalled $ 1,6 8 4,011 and inWest on teed these payments both as to prin-reactor to produce electric enny (8140,261) and a contractual agree-these obligations c.mountee to cipal and interest. SMEPA's obli-

$ 1.8 8 6,14 7, sation to make such payments $s mes.1 (an amendment to Coal Supply it is estimated that Agreement between SMEPA and its payments of principal of 81,7 4 0,2 s t evidenced by Pollution Control Notes issued to CFC and secured by Supple- e al producer) to pay a fee for loading F will be made to REA in 1981 its (SMEP A's) coal far shipment to i together with interest totalling mental Mortgage and Security agree-p o approatmately81,988.918. Lents among SMEPA, CFC and the f o 8 ,

g nt

--m-- - -s - - - - - -

19 at December 31,1980, the cont.act eration plant coverages. This reserve was (15 ) Refund Receivable Mississippi

. balance of which is in Deferred established in accordance with generally Power Cofrpany Charges). During December 19 80 accepted industry accounting practices.

SMEPA determined that approzi- Charges to income (and credits to the in February 1981, the Mississippi Public mately $ 2 6 7,0 0 0 additional cost had reserve) of $ 4 0,0 0 0 were made while Service Commission approved a settle-been incurred over the original esti* $65,183, representing losses, were ment of litigation involvint damages mate and have accordingly added charged to the reserve in 19 S t. awarded Missisupt Power Compans such amount to the debt to be (MPCO) from Feabody Coal Company amortized beginning sometime in (11 ) Contingent Liabilities (Peabody) by the U. S. District Court 1981, and the American Arbitration Association The Association entered into a binding related to coal purchases by MPCO from Regarding BREEDER referred to agreement to subscribe to CFC unsecured Peabody during the years 19 75 throuf;h above, in 19 7 7 BR EEDER suspended subordinated CTC's commencing in 1980. MPCO proposes to pass on such requirements that yearly fiayments 19 7 8 through 19 8 3. Purchases are made damages, less litigation expenses plus of participants in this program be annually in amounts appronLnating 0.7 % accrued interest, to its customers which made when the United States of of operating revenues. The balance of include SM EPA and cert ain of it's America curtailed its financial parti- the subscription obligation at December (SMEPA's) member cooperahves who are cipation in this program. Charges 31, 1980 is established at $ 8,9 0 0,0 0 0, parties to SM EP A's ** Af.reament for against income of 82 8,376 in each of Equalisation of Power Costs."

the years 1978 through 19 80 ( and After reviewing correspondence regarding concurrent credits to Deferred asserted claims and pending litigation in SMEPA espects to receiva, directly and Charges) were recewled although no which the cooperative is a defendant and indirectly through its mer bers, approzi-payments were made to BREEDER. discussing all such claims and litigation mately 84.5 mulfor. as a result of this Future payments to BREEDER will with General Counsel and management of settlement, which amount was :ecorded be dependent upon the government's the Association, we concur in the opiruons in ;he general books of accounts in March essential involvement in the program, of counsel ana management that the oug. 1981 (after we completed our audit If and when the project goes forward come of such actions currently pending , field work) as a receivable from MPCO (the G AO issued a report in 19 80 will not have a material adverse effect on with an offsetting credit to deferred supportmg continuation of the the operation of the Association. credits. This credit will be properly Clinch River Project) the currently disposed of as a credit to prior' years deferred installments will be called (12 ) Restatement of1979 Financial margins or amortized and credited against for as weu as other installments as Statements future years operating expense as soon as they become due, additional and more precise information

. In some cases the 19 7 9 financial statemmts can be obtained and discussed with

( 9) Notes Payable - Lines of Credit as shown in the 19 7 9 audit report may management and REA.

have been restated in the enclosed report SMEPA had an established short term due to reclassification of certain accounts Other Notes line of credit of $ 2 5,0 0 0,00 0 with on the general books of account in 19 79 CFC which matures November t o, and/or for con.parative purposes of 19 79 .'ncome Tax Status - More than 8 6% of the 1981, Interest rate is prime whlch at with 19 8 0. AJociation's income is couected frem its members.

December al. 1980 was 17 3 /d %. Exemption from federal income tax has been SMEPA had drawn 82,900,000 (14 ) Sales to Major Customers (Member obtained and Internal Revenue Forms 990 have against this line of credit at Consumers) been timely filed.

December 3 I,19 8 0. SMEPA also has j a commitment forcredit with Deposit SMEPA is ar electric energy ger.eration Guaranty National Bank (DGND) up and transmission (GT) association and as to 8 3,0 0 0,0 0 0 to cover temporary such, normally sells its energy to rela 'v working capital needs, each advcnce few member consumers. Sales comprising payable within four (4) days from more than 10 % of total revenue to single date of advance, at DGNB's prime consumers were made during 19 7 9 and rate. This commitmeet is supported 1980 to five (5 ) member consumers 17  %

by a conditional . 'I order of

$ 3,0 0 0,0 6 6 against the above refer-ranging in amounts from 8 2 3.6 million  %%& m red to credit line with CFC and down to $ 10.4 million in 1979 and from 825.3 million to 811.4 million in 19 8 0.

%ct 4

• • • • % .e .oL ey D4'w-matures A ugust .2, 1981. No '"

y*'..w .%

advances asainst this line were payable **

• at December 31st. . ?.$* ******

(10 ) Deferred Credits a,,,

so. ,,,,, o%u,.

The balance in this s - ant represerats royalties on rieposit (s41,977) in an ,;.,',*E,1, * = , *l

, , *f,"n

,'""ha *"ne e%.,

sserow bank account received from sale of coal on certain land, title .a which is 4. ,jg in dispute (the bank account bclance is .,",1Pa'r ,*.' [%.@

o~ p.=r. .%,,

included in deferred charges) and an ** no *e 5 .s%, ,,,,,

insurance reserve totalling 8131J06 at

'"*=n,,, e*4[*y'*a,',"* ."", ;ad,*uE,*,.,,..'.$'.

"'y[. E *[, "*l .. Po ,

DJcember 31 1980. Th.s insurance lQ, Z,E.*q

• reserve is being increased at the .te of ' 4 .,,'y e% .J,,".w;*".e '*

840,000 per year until such reserve reaches '% ' '%n.4 J'***""*"U, ard. '"'

,*Pt,I/.'!['"Ie tpproaimately 8800,000, it was estab- ,Qaa. an , I *

lished primaruy to compensate for the lirse insurance loss deducitibles on gen.

.DD. *p,*e,d'

'4e .,5,S$"

Qh ar so U'% Man.%.,*,,'*;**==te n.'UPg,,r

• • as , ,*"8 enna, . ,,r,,.= *

. ,O.',4*'f*"

• "p*

,,,,,q

,.r r ,. **' men

'Fuly ,

~~~ :: w .,:

.~.

W.W  %-,,J J

l

l 20 1980 OPERATING EXPENSES Chart *W' A & G Expense 1.8 s mm/KWil - 4.46 %

Transmission Expense f.f t mh/KWit - 6.51 S Other Power Supply ( .8 8 )mh/KWil - ( 2.0 8) 1 f

7 Other Prod. Expense 15.7 8 mW/KWII- 87.88 %

Fuel 22.44 mh/ K WII - 68.14 5 42.14 mm/KWit - 10 0.4 0 5 Chart "B" Contract Maintenance .89 mh/KWit - .98 5 Other 1.81 mills /KWil - 4.80 5 Interest 11.67 mh/KWil - 21.4 5 %

Depreciation 4.2 8 mh!KWII- 10.08 %

Payroll. Benefits & Taxes 2.88 mW/ KWii - 5.64 %

Purchased Power ( .88) mills /KWil- ( 2.08) s Fuel 2 2.6 4 mm/K%1t - 5 8.18 %

42.14 mm/KWII - 10 0.0 0 %

These two pie charts show the actual 1980 expenses of the generation and transmission system operated by SMEPA (without the " Borderline" Transactions). Chart A shows these expenser broken down by major accounting categories. Chart B shows the same expenses broken down differently in order to clearly show the types of expenses.

1 21 Chart "C" i A & O Expense 1.18 mills /KWil- 2.93 5 -

Transmission Expense 1.10 mm/KWit - 4.38 5 Other Power Supply 11.89 mills /KWII- 3 3.13 5 Othet Prod. Expense 9.41 mits/KWit - 2 4.4 8 5 Fuel 73.49 mills /KWII - 84.11 S 3 8.9 3 mills /KWil - i t 6.4 0 5 1

Chart "D" Contract hf aintenanc e .34 mills /KWil - .61 3 Other 1.10 mills /KWII - 1J3 %

Interest 1.06 mills /K%11 - 11.99 s '

/ Depreciation 2.5 6 mh/KWit - 6.59 5 Payroll. Benefits & Taxes 1.44 mills /KWit - 3.49 %

Purchased Power 12.8 9 mills /KWII- 3 3.13 5 Fuel 13.49 mills /KWII - 35.11 5 3 8.9 2 mu.s/KWil -100.00 5

• 2 These two pie charts show the actual 1980 expenses of the generation and transmission systern operated by SMEPA (including the " Borderline" Transactions). Chart C shows these 4

expenses broker down by major accounting categories. Chart D shows the same expenscs broken down differently in order to clearly show the types of expenses.

i

=

22 ELEMENTS OF COST I. SMEPA's Own Generation & Transmission System 1975 1976 1977 1978 1979 1980 Cost ot' Fuel Burned in SMEDA's Plants - /MMBTU 131.15 160.32 177.03 175.30 181.87 196.72 Production Costs and Purchased Power / Interchanged Power mills /KWil 16.60 20.29 22.42 22.15 21.54 23.78 Trantmission O&M-mills /KWil .48 .49 .74 .89 .87 1.34 A & G Expenses.miUs/KWH .59 .61 .75 1.00 1.37 1.11 Depreciation & Amort.. mills /KWil 1.37 1.40 1.41 3.40 5.P 6 4.18 Interest - mills /KWH 1.12 1.25 1.08 5.57 13.10 11.57 Taxes and Others - mills /KWH .11 .09 .35 .27 .25 .16 20.27 24.13 26.75 33.28 42.99 42.14 II. Ilorderline System 1975 1976 1977 1978 1979 1980 Purchased Power / Interchanged Power mills /KWil 20.55 23.39 27.39 28.09 30.61 33.94 Transmission O & M - mills /KWH .01 .01 .02 .03 -

Depecciation & Amort. mills /KWH .04 .04 .05 .05 .04 .02 Interest - mills /KWil .03 .03 .06 .06 .05 .03 TOTAL - mills /KWH 20.63 23.47 27.52 28.23 30.70 33.99 III. Total System 1975 1976 1977 1978 1979 1980 Production Costs and Purchased Power / interchanged Power. mills /KWH 18.35 21.67 24.68 24.82 26.26 27.80 Transmission O & M - mills /Kwll .27 .27 .41 .50 .42 .81 A & G Expenses- mills /KWH .33 .34 .41 .55 .66 .68 Depreciation and Amortization - mills /KWH .78 .80 .79 1.89 2.83 2.53 Interest - mills /KWH .64 .71 .62 3.10 6. ',0 7.00 Taxes and Other - mills /KWH .06 .05 .19 .15 .12 .10 TOTAL-mills /KWil 20.43 23.84 27.10 31.01 36.59 38.92

23 COMPARATIVE

SUMMARY

su ENERGY SOURCES - MWH 1975 1976 1977 1978 1979 1980 l Gen rit,ed:

Sterm 514,545 479,771 779,$72 1,228,110 1,282,352 1,837,173 Other Generation 6,501 5,846 20,117 23,930 7,975 1,794 521,046 485,617 799,689 1,252,040 1,290,327 1,838,967 7

l Purchased:

Firm, Protective & Unintentional 508,090 619,932 395,125 74,270A 78,150 83,801

( Borderline 793,124 860,756 960,978 43,927A 75,416 86,642 1,301,214 1,480,688 1,356,103 118,197 153,566 170,143 Interchanged Power 924,93?A 1,156,683 964,703 Total 1,822,260 1,966,305 2,155,792 2,295,176 2,600,576 2,974,113 SALES - MWH Southwest Mississippi EPA 165,478 185,646 241,433 254,388 254,046 266,854 Dixie EPA 136,925 254,539 283,556 325,892 316,449 335,904 Pearl River V.lley EPA 216,602 229,617 244,581 266,292 280,759 308,089 Singing River EPA 466,085 501,061 545,442 562,480 543,743 594,207 Southern Pine EPA 536,285 587,603 611,838 642,224 634,255 678,457 Magnolia EPA 165,431 177,535 178,268 192,592 197,845 219,749 Coast EPA -- 334,848 406,025 68,553

. Yazoo Valley EPA 5,2 -?.8 Coahoma EPA _

Delta EPA 18,255 Twin County EPA __

7,781 Mississippi Power Company 235 175 8,372 Total 1,787,041 1,927,178 2,113,490 2,243,868 2,561,945 2,909,142 TOTAL SYSTEM DEMAND-KW 417,139 445,817 473,251 520,432 619,162 742,680 (A) Accounting Method changed in 1978.

24 COMPARATIVE OPERATING REPORT l

REVENUE 1975 1976 1977 1978 1979 1980 Sales of Energy $36,581,399 $46,195,188 $57,399,015 $70,655,998 $95,938,935 5108,389,31-140,631 172,778 272,888 289,147 1,111,895 1.010.4s Other Total Revenue 36,722,030 46,367,966 57,671,903 10,945,145 97,050,830 109,399,76' EXPENSE Operation Expense:

Production Fuel Cost 8,370,788 9,571,057 16,770,261 26,160,937 26,973,759 39,810,41(-

Other Production Expenses 411,795 452,645 458,811 1,201,621 i,587,006 1,972,854 Purchased Power 23,806,259 31,492,395 34,429,746 27,721,339 37,582,696 37,511,186 Transmission 172,436 207,643 382,677 487,997 451,314 1,438,895 Consumer Accounts 10,243 9,504 12,342 10,679 13,160 39,937 Administrative & General 557,429 611,472 818,011 1.175,735 1,611,816 1.846.457 Totel operation Expense 33,328,950 42,344,716 52,871,848 56.758,308 68.219,751 82,599.743 Maintenance Expense:

Production 208,428 192,450 494,113 604,850 1,138,781 1.571,563 Transmission 335,783 342,217 488,335 637,655 616,613 922,129 General Plant 13,901 26,619 37,110 43,792 59,705 100,987 Total Maintenance Expense 558.112 561,286 1,019.558 1,286,297 1,815.099 2,594,679 Depreciation 1,371,296 1,504,568 1,648,309 4,224,653 7,225,336 7,362,869 Taxes 64,433 71,493 96,883 161,134 219,556 233,915 Interest Expense (Net) 1,495,090 1,676,134 1,895,200 7,362,657 16,495,094 20,658,725 Total Expense 36,817,881 46,158,197 57,531,798 69,793,049 93,974,836 113,449,931 NET OPERATING MARGINS (95,851) 209,769 140,105 1,152,095 3,075,994 (4,050,t64 NON-OPERATING MARGINS 53,961 52,795 82,130 138,308 337,828 687,885 NET MARGINS (Loss) $ (41,8901 $ 262,564 $ 222,235 $ 1,290,404 $ 3,413,822 $ (3.362.27(.

)

Y

25 LOAN COMMITMENT SOURCES j Loan Commitments 8488.533.000 E

E If il L

F I

Actual Advar:es Against Loans i

500 RuralElectrffication Act Amended May 11.1913 400 Outstar. ding Los 1 N 800 Commitments by F.F.B.

Loans guaranteed by h.E.A.

a 200 F.F.B. Loans (12 -314 0 )

150 Guaranteed by R.E.A.

Average interest as of 12-814 0 10.74%

100 Pollution Control Bonds

' ~ '

Average Interest Rate - 6.2 %

$ 3 6.14 2.0 0 0 Loans from Others - 5.7 %

,, R.E.A. Insured Loans - 5 %

,\\ N N N N N N R.E.A. Direct Loans - 2 %

:  : :  : = =  : : : : : : :

j rr

[

1 l

MANAGER PRODUCTIOl4

(

MANAGER OF TRANSMISSION MANAGER OF FINANCE & ACCTNG.

MAN AGER OF TUPPORT SERVICES I

PRODUCTION TRANSMISSION FINANCE & ACCTNG. SUPPORT SERVICES DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT 122 employees 48 employees 9 employees 18 employc>s 1 Manager 1 Manager 1 Manager 1 Manager 1 Dir. of Fuels 6 Control Center 1 Chief Accountant 2 Personnel 35 riant Moselle 1 R/W Maintenance 7 Accounting Clerks 3 Purchasing 85 Plant Morrow 3 Vehicle Main. 2 Computer Analysts 2 Buildings & Grounds 2 Material Cletks 15 Line Section 1 Job Training & Safety 20 Electronics & 1 Office Helper

.iubstations 6 Secretaries

27 ORGANIZATION MEMBER SYSTEMS ASST, TO THE GEMERAL MANAGEk GENERAL MANAGER l

s 4

MANAGER OF MANAGER OF MANAGER OF STAFF LAND ENGINEERING ENVIRONMENTAL ATTORNEY AFFAIRS L

LAND DEPARTMEi4T ENGINEERING ENVIROMENTAL AFF. STAFF A'1TORNEY DEPARTMENT DEPARTMENT 2 employees 12 ernployees 1 employee 1 employee 1 Manager 1 Manager 1 Manager 1 Attorney 1 R/W Agent 4 Engineers 3 Draftsmen 1 Construc: ion Supervisor 1 Work Order & Billing clerk 2 Co-op Students 215 Employees (December 31,1980) 1

28 SERVICE AREA

1. Coahoma Electric Power Assn.

2. Delta Electric Power Assn.

8. Twin County Electric Power Assn.

-M 4. Yazoo Valley Electric Power Assn.

6. Southwest Miss. Electric Power Assn.

6. Southern Pine Electric Power Assn.

7. Magnolia Electric Power Assn.

8. Pearl River Valley Electric Power Assn.

9. Dizie Electric Power Assn.

10. Singing River Electric Power Assn.

11. Coast Electric Power Assn.

Transmission System Load Responsibility Off System Load G

n

f SOUTH MISSISSIPPI ELECTRIC FUWER ASSOCIATION Tm Lght m 'tw Forear

- _ _ - _ . . _ _ _ _ _ .