ML19318D178

Annual Financial Rept 1979

ML19318D178
Person / Time
Site:	Seabrook
Issue date:	02/22/1980
From:	TAUNTON MUNICIPAL LIGHTING PLANT
To:
Shared Package
ML19318D157	List: ML19318D156 ML19318D158 ML19318D159 ML19318D163 ML19318D165 ML19318D167 ML19318D168 ML19318D169 ML19318D172 ML19318D173 ML19318D175 ML19318D177 ML19318D178 ML19318D180 ML19318D184 ML19318D188
References
NUDOCS 8007080033
Download: ML19318D178 (19)

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FINANCIAL STATEMENTS AND AUDITORS' REPORT i TAUNTON MUNICIPAL LIGHTING PLANT ..

December 31, 1979

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CONTENTS Page AUDITORS' REPORT 3 FINANCIAL STATEMENTS BALANCE SHEET 4 STATEMENT OF EARNINGS S STATEMENT OF SURPLUS _

6 STATEMENT OF CHANGES IN FINANCIAL POSITION 7 NOTES TO FINANCIAL STATEMENTS 8~

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SUPPLEMENTAL INFORMATION AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION 13

( . UTILITY PLANT 14 UTILITY PLANT - ACCUMULATED DEPRECIATION 16 OPERATING EXPENSES 18 t-

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1 Alexander Grant a COMPANY INTERN ATIONAL FIRM CERTIFIED PUBLIC ACC OU N TA N TS ALEXANDER GRANT TANSLEY WITT 4

Municipal Light Commission of the City of Taunton Taunton, Massachusetts We have examined the balance sheet of Taunton Municipal Lighting Plant, (a department of the City of Taunton) as of December 31, 1979, and the related statements of earnings, surplus T

and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered neces-

. sary in the circumstances.

In our opinion, the financial statements referred to a

above present fairly the financial position of Taunton Municipal Lighting Plant at December 31, 1979, and the results of its opera-tions and changes in its financial position for the year then ended, e-in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

Boston, Massachusetts

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February 22, 1980 99 HIGH STREET BOSTON, MA 02110 (617)357-5787

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Taunton Municipal Lighting Plant

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BALANCE SHEET December 31, 1979 ASSETS UTILITY PLANT - AT COST Plant in service $51,608,168 Less accumulated depre-ciation (note A2) 20,937,325 Net utility plant in service 30,670,843 Construction work in -

progress (note D) 3,000,734 Total utility plant $33,671,577 f

DEPRECIATION FUND -

Cash, including $50,000 of certificates of deposit (note F) 2,975,508 CURRENT ASSETS Cash (note F)

Operating fund $ 279,880- -

Petty cash fund 1,700 281,580 Special deposits (note F) ~

Customer deposit fund 175,347 Customer deposit interest fund (469) 174,878 Accounts receivable Customers 4,656,914 Other 184,374 Municipality 188,631 .

5,029,919 Less allowance for doubtful receivables (646,909) 4,383,010 Inventory of materials and supplies - at cost (average and first-in, first-out methods) 1,443,133 Prepaid insurance 33,700 I

Total current assets 6,316,301 -

. $42.963.386  !

The accompanying notes are an integral part of this statement. )

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LIABILITIES.

SURPLUS Appropriated surplus Loans repayment $ 8,902,000 Appropriation for construction repayment 32,434 8,934,434 Unappropriated surplus 6,742,889 Total surplus -

$15,677,323 LONG-TERM DEBT Bonds 3.00%, payable $100,000 annually on January 1, 1980 to 1985 inclusive, plus interest 600,000 3.10%, payable $45,000 annually on August 15, 1980 to 1985 inclusive, plus interest .

270,000 Electric loan, Act of 1969 (note C) 23,432,479 24,302,479 Less current maturities 400,000 Total long-term debt 23,902,479

' CURRENT LIABILITIES Accounts payable 1,959,844 Customer deposits 175,347 ,

Current maturities of bonds payable 400,000 Accrued liabilities payroll 69,088 Interest 779,305 Total current liabilities 3,383,584 COMMITMENTS AND CONTINGENCIES (notes D and E) -

$42.963.386

'Taunton Municipal Lighting Plant

. STATEMENT OF EARNINGS Year ended December 31, 1979 Operating revenues Sales of electricity Residential $ 7,250,913 Commercial and industrial 9,021,099 Municipal 1,423,361 Sales for resale (note D) 11,737,464 $29,432,837 Other operating revenues Sales of steam 307,286 Total operating revenues 29,740,123 Operating expenses Power production Operation $13,771,618 Maintenance _ 866,277 Purchased power' 7,448,134 22,086,029 Transmission Operation 82,558 Maintenance 1,609 84,167 Distribution Operation 421,648 Maintenance 344,992 766,640 1 Customer accounts expenses Operation 420,175 Administrative and general 4 -

Operation 1,484,555 Maintenance 59,975 1,544,530 Depreciation (note A2) 2,030,184 Total operating expenses 26,G31,725 Earnings from operations 2,808,398 Other income (deductions)

Interest 16,131 Other (18,845)

Abandoned construction work in progress (note D) (177,372) (180,086):

2,628,312 Interest charges j Interest on bonds and notes 1,866,756 Other 7,297 1,874,053 NET EARNINGS BEFORE PROVISION FOR PAYMENT IN LIEU OF TAXES 754,259 Provision for payment to the City of Taunton in lieu of taxes (note B) 789,891 EXCESS OF PAYMENTS TO CITY OF TAUNTON OVER NET EARNINGS S (35.632)'

The accompanying notes _are an integral part of this statement.

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-Taunton Municipal Lighting Plant STATEMENT OF SURPLUS

4 Year ended December 31, 1979

. Appropriated Surplus Appropriation for Loans Construction Unappropriated Repayment Repayment Surplus

. Balance at January 1, 1979 $8,522,000 $32,434 $7,158,521 Add or (deduct)

Transfer from unappropri-ated surplus of amount of bonds paid off during J year 380,000 (380,000)

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Excess of payments to City of Taunton over net I

earnings (35,632) n Balance at December 31, 1979 $8.902.000 $32.434 $6.742.889 0

The accompanying notes are.an integral part of this statement.

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Taunton Municipal Lighting Plant STATEMENT OF CHANGES IN FINANCIAL POSITION Year ended December 31, 1979 Sources.of working capital From operations Net earnings before payment in lieu of taxes $ 754,259 Charges (credits) to earnings not using (providing) working capital Depreciation of utility plant (note A2) 2,030,184 Amortization of bond premium (3,354)

Funds from operations before payment in lieu of taxes 2,781,089 Provision for payment to City in lieu of taxes (note B) 789,891 Net working capital provided from operations 1,991,198 Applications of working capital Plant. additions - net 1,041,379

~ Increase in depreciation fund 1,049,422 Current maturities of long-term debt (note C) 400,000 2,490,801 DECREASE IN WORKING CAPITAL (499,603)

Working capital at January 1, 1979 3,432,320 Working capital at December 31, 1979 $2.932.717 Changes in components of working capital Increase (decrease) in current assets Cash $ (534,421-)

Special deposits 14,130 Accounts receivable - net 623,651 Inventories (126,063)

Prepaid insurance (7,141)

(29,844)

(Increase) decrease in current liabilities ,

(459,645)

Accounts payable Customer deposits (20,880)

Current maturities of bonds payable (20,000) :

Accrued-liabilities 30,766 (469,759)

DECREASE IN WORKING CAPITAL $ (499.603)

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The accompanying notes are an integral part of this statement. j i

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( l Taunton Municipal Lighting Plant

. NOTES TO FINANCIAL STATEMENTS

, December 31, 1979 NOTE A -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES A summary of the Plant's significant accounting policies consist-

' ently applied in the preparation of the accompanying financial statements follows.

1. Rates Rates charged by the Plant are not subject to the approval

'. t of regulatory agencies. Pursuant to state laws, rates must be such that the resulting net earnings less bond payments do not exceed 8% of the cost of utility plant.

2. Depreciation I

( Pursuant to state laws, depreciation was computed at 4%

of the cost of depreciable property at January 1,.1979.

The amount transferred from the operating fund to the depreciation fund during the year was $4,100,184.

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- Depreciation Fund cash is used in accordance with state laws for replacements and additions to the electric plant in service.

3. Pension plan Substantially all employees of the Municipal Lighting Plant are covered by a contributory pension plan ad-ministered by the City of Taunton in conformity with State hetirement Board requirements. In addition, a number of retired employees, not eligible under the State

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Retirement Board plan, receive pension benefits directly from the Lighting Plant. During 1979, the pension

-benefits paid to these retirees and. charged to plant operations amounted to $25,511. -

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Taunton Municipal Lighting Plant NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 1979 NOTE B - CONTRIBUTION TO THE CITY OF TAUNTON IN LIEU OF TAXES By vote of the Municipal Light Commission in 1978 and 1979, the Plant agreed to contribute $789,891 in 1979 to the City of Taunton in lieu of taxes. All contributions to the City are voted by the Municipal Light Commission and are voluntary.

NOTE C - LONG-TERM DEBT Pursuant to Chapter 857 of the Electric Loan Act of 1969, the i City of Taunton issued $24,000,000 of general obligation bonds dated February 1, 1976. The bonds vary in principal amount and mature annually each February 1 from 1977 to 2006. Interest is payable semi-annually on February 1 and August 1 at rates which vary from 7% to 8.5%. The bonds are not callable prior to maturity.

The bonds were sold at a premium of $100,615, which is being amortized over the life of the bond issue. The unamortized balance of $87,479 is included in bond principal.

j NOTE D - COMMITMENTS 1

Interconnection Agreement l The City of Taunton, acting by vote of its Municipal Lighting Plant Commission, has entered into an agreement with Montaup i Electric Company, dated July 31, 1970, as amended, concerning interconnection of electrical operations, purchase and sale of kilowatt capacity, and construction by Taunton of a generating unit of approximately 110 megawatt capability. The agreement is for a t3riod of twelve years following the commencement of operations of Unit No. 9 on December 1, 1975._ Under the inter-W connection agreement, the City agrees to sell and Montaup agrees to purchase all capacity of Unit No. 9 not utilized by the City with a maximum not to exceed 95 megawatts in the first year 6f operation and on a declining scale in subsequent years. It is estimated that by the twelfth year following commencing of regular operations, Taunton will recapture all of Unit No. 9 capacity. The Plant credited to sales for resale approximately

$10,663,000 of capacity and energy charges billed to Montaup Electric Company in 1979 for its share of power under the inter-connection agreement. This agreement includes a provision which provides that Taunton will purchase 8.2163% of the capacity and associated energy from Montaup's Somerset No. 6 generating unit for the period November 1, 1978 through October 31, 1984 and l 1.7123% of the capacity and associated energy from the Canal No. 2 generating unit, 50% of which is owned by Montaup, for the period. November 1, 1978 through October 31, 1982.

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Taunton Municipal Lighting Plant NOTES TO FINANCIAL STATEMENTS - CONTINUED December 31, 1979 NOTE D - COMMITMENTS - Continued Entitlements The Plant has entered into agreements to participate as a joint owner in two nuclear generating units as follows:

Ownership Lead Expenditures as Unit Share Participant Location of December 31, 1979 Pilgrim Unit Boston .. Plymouth ,

No. 2 .6% Edison Mass. $1,778,123 Seabrook Units No. 1 Public Seabrook, and No. 2 .10034% Service N.H.

Company of New Hampshire 896,162 S2.674.285 The expenditures of $2,674,285 are included in construction work in progress as of December 31, 1979. Due to delays in obtaining required regulatory approvals, it is not possible to estimate when the nuclear generating units will be completed or the total expenditures to be incurred by the Plant for its share of con-struction costs.

As the result of an adverse court decision upholding the General

' Services Administration?s decision to preclude nuclear develop-ment of the Charlestown, Rhode Island site, New England Power Company, as lead participant of Charlestown Units No. 1 and No. 2 has cancelled construction of the units pursuant to Section 23 of the Joint Ownership Agreement NEPCO Nuclear Units, as amended.

Costs to date, amounting to $177,372, were charged to operat' ions in 1979. The Plant will be billed for its share-(.5%) of all costs resulting from the cancellation. Such costs are not deemed to be material.

Leases The Plant leases data processing equipment under operating leases  !

expiring during the next three years. The annual rental, charged to operations, is $40,428.

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1 Taunton Municipal Lighting Plant NOTES TO FINANCIAL STATEMENTS - CONTINUED Lecember 31, 1979 NOTE E - CONTINGENCIES i Several contractors have' initiated litigation to recover additional costs alleged to have been incurred during the construction of Unit No. 9. The Lighting Plant has disputed these claims which total approximately $282,000. Although it is not'possible to determine the outcome of this litigation, management of the Lighting Plant does not anticipate that the ultimate disposition of these suits, even if adversely decided, will have a material adverse effect on earnings or financial position of the Plant since such amounts would be capitalized to the cost of Utility Plant.

NOTE F - CASH Municipal Lighting Plant cash is in the custody of the City of Taunton Treasurer and is commingled with other city funds.

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t AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION i

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Tr.unton Municipal, Lighting Plant Our examination was made primarily to enable us to express an overall opinion on the basic financial statements of Taunton Municipal Lighting Plant for the year ended December 31, 1979, which are presented in che preceding section of this report. The supplemental information presented hereinafter, i

although not considered essential for a fair presentation of financial position, results of operations and changes in finan-cial position, has been subjected to the audit procedures

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• applied in the examination of the basic financial statements.

In our opinion, the supplemental information is fairly presented in all material respects in relation to the basic financial state-ments taken as a whole.

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Boston, Massachusetts h &

February 22, 1980 i

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, . Taunton Municipal Lighting Plant UTILITY PLANT Year ended December 31, 1979 Balance ,

December 31, '

1978 Utility plant in service Steam production plant Land and land rights S 245,509 Structures and improvements 5,577,902 Boiler plant equipment 13,795,282 Turbo-generator units 12,403,854 Accessory electric equipment 2,504,210 Miscellaneous power plant equipment 171,798 Total steam production plant 34,698,555 Other production plant Fuel holders, producers, and accessories 519,864 Generators 82,607 Accessory electric equipment 402,423 Total other production p] ant 1,004,894 Transmission plant Land and land rights 209,298 Clearing land and rights of way 22,601

- Structures and improvements 129,128 Station equipment 1,822,316 Towers and fixtures 849,092 Poles and fixtures 271,802 Overhead conductors and devices 213,154 Underground conduit 3,104 Underground conductors 2,009 Total transmission plant 3,522,504 Distribution plant Land and land rights 189,056 Structures and improvements 101,704 Station equipment 1,658,260 Poles, towers and fixtures 1,781,637-Overhead conductors and devices 1,677,362 Underground conduit Electric 1,359,083 Steam 98,072 Underground conductors and devices Electric 1,448,490 Steam - 129,727 ,

Line transformers 1,072,230  !

Services 249,013 l Meters - electric 913,462 l Meters - steam 34,760 Street lighting and signal systems ,

562,568 i Total distribution plant 11,275,424 Forward 50,501,377 14 1

Balance December 31, Additions Retirements 1979

$ 245,609

$ 1,459 5,579,361 31,930 13,827,212 20,813 12,424,667 155 2,504,365

__ 25,935 197,733 80,292 34,778,847

$ 12,700 507,164 82,607 402,423 12,700- 992,194 7,000 216,298 22,601 129,128 49,213 1,871,526 849,092 271,802 76 213,230 3,104 4,104 6,113 60,393 3,582,897

. 189,056 101,704 4,350 1,662,610 44,148 1,410 1,824,375 ,

117,195 1,738 1,792,819 10,196 1,369,279 98,072 6,016 1,454,506 129,727 32,134 1,500 1,102,864 15,397 264,410 31,957 945,419 34,760 20,635 583,203

~282,028 267,207 11,290,245 l

422,713 279,907 50,644,183

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Taunton Municipal Lighting Plant UTILITY PLANT - CONTINUED Year ended December 31, 1979 Balance December 31, 1978 Forwarded $50,501,377 General plant Land and land rights 35,691 Structures and improvements 280,191 Office furniture and equipment 100,205 Transportation equipment 419,048 Stores equipment -

1,740 Tools, shop and garage equipment 13,313 Laboratory equipment 14,888 Power operated equipment 14,538 Communication equipment 67,668 Miscellaneous equipment 8,085 Total general plant 955,367 Total utility plant in service 51,456,744 Construction work in progress 2,395,385

$53.852.122 i

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Balance December 31, Additions Retirements 1979

$ 422,713 $279,907 $50,644,183 35,691 1,774 281,965 8,731 21,437 87,499 21,165 8,339 431,874 1,740 -

220 13,093 14,888 14,538 5,424- ,

73,092 1,520 9,605 38,614 29,996 963,985 461,327 309,903 51,608,168 782,720 177,371 3,000,734

$1.244.047 $487.274 $54.608.902 s ,

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Taunton Municipal Lighting Plant UTILITY. PLANT - ACCUMULATED DEPRECIATION Year ended December 31, 1979 Balance December 31, 1978 Utility plant in service Steam production plant Structures and-improvements $ 2,056,120 Boiler plant equipment 4,399,475 Turbo-generator units 3,832,524 Accessory electric equipment 1,331,946 Miscellaneous power plant equipment 45,536 Total steam production plant 11,665,610 Other production plant Fuel holders, producers and accessories 51,386 Generators 8,257 Accessory electric equipment 40,042 Total other production plant 99,685 Transmission plant Structures and improvements 2,211 Station equipment 121,305 Towers and fixtures 81,004 Poles and fixtures 17,663

. Overhead conductors and devices 14,940 Underground conduit 98 Underground conductors - electric Total transmission plant 238,121 Distribution plant Structures and improvements 91,848 Station equipment 1,128,221-Poles, towers and fixtures 1,377,683 Overhead conductors and devices 695,506 Underground conduit .

. Electric 802,160 Steam 98,072 Underground conductors and devices Electric 717,097 Steam 129,727 Line transformers 622,415 Services 59,600 Meters - electric- 566,333 Meters - steam 34,760 Street lighting and signal systems 254,886 Total distribution plant 6,578,308 Forward 18,581,724 16

Current Balance Year December 31, Provision Retirements 1979

$ 255,850 S 2,311,979 601,468 5,000,943 398,978 4,231,502 117,713 1,449,659 7,350 52,886 1,381,359 13,046,969 20,794 S 1,808 70,372 3,304 11,561 16,096 56,138 40,194 1,808 138,071 5,165 7,376 72,892 194,197 33,963 115,867 10,872 28,535 8,526 23,466 124 222 80 80 131,622 __

369,743 20 91,868 66,330 1,194,551 71,265 440 1,448,508 67,094 444 762,156 54,363 856,523 98,072 57,939 775,036 l 129,727 ,

42,889 390 664,914 9,960 69,560 36,538 602,871 34,760 22,502 277,388 428',900 263,833 6,743,375 1,982,075 265,641 20,298,158 l

Taunton Municipal Lighting Plant UTILITY PLANT - ACCUMULATED DEPRECIATION - CONTINUED Year ended December 31, 1979 Balance December 31, 1978 Forwarded $18,581,724 General plant Structures and improvements 213,765 Office furniture and equipment 45,836 Transportation equipment 294,129 i Stores equipment 1,669 Tools, shop and garage equipment 13,313 Laboratory equipment 7,100 Power operated equipment 8,940 Communication equipment 18,181 Miscellaneous equipment 7,090 Total general plant 610,023

$19.191.747 1

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Current Balance Year December 31, Provision Retirements 1979

$1,982,075 $265,641 $20,298,158 5,600 219,368 4,008 10,404 39,440 33,523 8,339 319,313 4 1,673 220 13,093 893 7,993 872 9,812 2,706 20,887 500 2 7,588 48,109 18,965 639,167

$2.030.184 $284.606 $20.937.325 i

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,e Taunton Municipal Lighting Plant OPERATING EXPENSES 4

Year ended December 31, 1979 Power production expenses Steam power generation Operation Supervision and engineering $ 215,618 Fuel 12,858,003 Labor and expenses 697,997 $13,771,618 Maintenance Supervision and engineering 45,745 Structures 22/674 Boiler plant 611,649 Electric plant 185,050 Miscellaneous steam plant 1,159 866,277 Other power supply expenses Purchased power 7,448,134 Total power production expenses $22,086,029 Transmission expenses Operation - rents 82,558 Maintenance 1,609 Total transmission expenses 84,167 Distribution expensec Operation Supervision and engineering 93,290 Labor 178,641 Supplies and expenses 39,227 Street lighting and signal system expenses 161 Meter expenses - electric 42,805 Meter expenses - steam 2,531 Miscellaneous distribution expenses 64,993 421,648 Maintenance

• Lines - electric 262,042 Lines.- steam 11,718 Street lighting and signal system 39,142 Meters - electric 22,481 Meters - steam 35 Structures and equipment 5,636 Line transformers 735 Miscellaneous distribution plant 3,203 344,992 Total distribution

-expenses 766,640 Forward 22,936,836 18

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Taunton Municipal Lighting Plant OPERATING EXPENSES - CONTINUED Year ended December 31, 1979 Forwarded $22,936,836 Customer accounts expenses Operation Meter reading labor and expenses $ 84,699 Accounting and collecting labor and expenses 287,928 Uncollectible accounts 42,000 Miscellaneous customer accounts 5,548 Total customer accounts expenses 420;175 Administrative and general expenses Operation Administrative and general salaries $ 136,093 Office supplies and expenses 61,722 Outside services employed 319,366 Property 3--"-ance 167,419 Injuries _ ages 179,066

. Employee , asions and benefits 534,862 Regulatory commission expenses 2,901 Miscellaneous general expenses 16,232 Transportation expenses 66,894 1,484,555 Maintenance

, General plant 59,975 Total administrative and general expenses 1,544,530 Depreciation expense 2,030,184

$26.931.725 4

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