ML20101S801

Annual Financial Rept 1983

ML20101S801
Person / Time
Site:	Comanche Peak
Issue date:	12/31/1983
From:	Mccaskill R, Parker W BRAZOS ELECTRIC POWER COOPERATIVE, INC.
To:
Shared Package
ML20101S784	List: ML20101S790 ML20101S801 ML20101S806 ML20101S812 TXX-4403, Forwards Annual Financial Repts for 1983 for Facility CP Holders
References
NUDOCS 8502050648
Download: ML20101S801 (36)

Text

M/,:'hAA

< < Y 8

6! $ $ ;yg, :

'ld u _?$ $_50R"-

?TOb g;n' M ",p;

+

5[h,p lWkf4f - f %';h sJ1..

I' 4

.a

,(p ,e, 41 p

h% '

4 N &'

jNgfI

, 3,,

u c 3 f; gem.

3,f[y;3h,

~ ' 4

• 5 s  %

g, s

'^

) x g,

i s b,

,:; e

.x .

Ys y.2,

's

)[

'y~,' ,7 s

m p

g i ;7

/

>- 'l*

• f

\

(.

,~-

w

.I' -

g P

g

, 3

• n

?

f .d5

& d'u.g

.'\

g. ' .

s .y :'. _>

f 's

l Tae 3razos System  !

razos Electric Power Cooperative, Inc. is a Bgeneration and transmisson elec organized in 1941 to provide electric distribution I

cooperatives with reliable electric power at the lowest possible cost. Brazos sells wholesale power to its 19 member cooperatives which serve consumers in 57 counties in Central Texas. The Cooperative also sells power to seven municipal electric systems and Texas A & M University.

i l

)

Summary of Consolidated Financial and 03erating Statistics 1983 1982 1981 TotalOperating Revenues (000's) $174,860 $173,107 $108,792 Tot'I Operating Expenses (000's) $172,479 $172,757 $108,919 Oper: ting Matgins(Loss)(000's) $ 2,381 $ 350 $ (127)

Tot;l Assets (000's) $351,987 $305,640 _ $261,999

.Tottl Equity (000's) $ 23,497 $ 20,753 $ 20,018 Times Interest Earned Ratio (TIER) 1.10 1.03 1.01 Debt Service Coverage (DSC) 1.15 1.09 1.03 Energy Sales (Megawatt hours)

Member Cooperatives 2,498,886 2,389,141 2,226,904 MunicipalInterchange Customers 230,628 226,982 218,956 Economy Sales 534,464 1,049,090 83,595 Tot:1 3,263,978 3,665,213 2,529,455 Peak Demand (Megawatts) 624 531 520 Revenues & Expenses (in S millions) Net Utility Plant (in Smillions) Energy Sales an matams ormesswatt twurs 170 300 2.5 2.50 r l" / ':

/ / -

g / / %53

1. f 7 7 i -- .23

'79 '80 '81 '82 '83 '79 80 '81 '82 '83 '79 '80 '81 '82 '83 Revenues Member Cooperatives Expenses M MunicipalInterchange Customers A verage FuelCost($perMCF) Ewrany Sales (includes transportation cost) Peak Demand (megawatts) 4o 3.83 650 -

j 624 3.5 600 so 25

, sso soo 2.0 450 7

is aoo

'79 '80 '31 '82 '83 '79 '80 '81 '82 '83 Terminology and Abbreviations Used in TWs Report K"! Kilowatt. l.000 watts MWH Megawatt hour._.l.000 blowatt hours heat damage.This figureis the A rneasure of demand for power. Tyr scal A measure ((energy. mattrmatkalproductof volta setunes light bulbs are rated at 60 and 100 w .tts. KV Kilovolt. I.000 volts current (amperck MW Megawatt Imillumwatts A measure of electncal potential. Household Lignite A low quahty coal.

A measure of demand for power. voltage a typically 115 volts. Md! One tenth of a cent K"'H Kilowatt hour I,000 matts med'or I hour KVA Kilovoit-ampere l.000 voit amperes A measure of cost of electriuty.

A measure of energy. Energy used n a 104 A measure of capability of electncal MCF l.000 cubic feet watt hght bulb darms ten hours. equipment to operate under load wahout Volumetnc ..-._..; used for natural gas.

I

1 ReJort to YemJers 1 J ur activities and accomplishments during 1983

have established our direction for many years to

.M ..,*,s -

come. Those actions of greatest significance improved our control of power cost. Following the May i

\ retirement of the San Miguel Electric Cooperative '

I

. . . general manager and pending appointment of a new

,, manager, we took an active management role at that cooperative. San Miguel plant operations improved notably, bringing the wholesale cost of power down by yearend. We will be able to carry the San Miguel 1983 g- margins forward to reduce power cost during 1984.

g ,',,<

s ' -

There is a well publicized glut of natural gas in the

-

• country. Its persistence has provided opportunities wi!11am c. Parker previously unavailable. During 1983, we initiated the planning for a natural gas pipeline. Brazos Electric will finance and build the project. Our subsidiary, Brazos Fuel Company, will operate it. This pipeline will remove our dependence on a single source of gas.

Moreover, it will enable us to buy gas competitively from pipelines and from the " spot" market. We anticipate its operation by the summer of 1984. Its economic and operational benefits will provide lasting I benefits.

I Working with the Mid-Tex Generation &

Transmission Cooperative members, we determined the optimum date for their membership in Brazos, as l l viewed by all parties. That date is January 1,1986. By

! early 1984, we expect to have requests for membership from five of these cooperatives. The board of directors will then consider these requests.

Our membership in the Texas Municipal Power ,

Pool has enabled us to delay the addition of a new lignite plant until the early 1990's. During 1983, we l conducted extensive studies to compare a new plant in i east Texas to a second unit at San Miguel. We  ;

continued to look for opportunities to participate jointly 1 2

l

\

l in generation projects with other utilities. A decision on the most economical course will be made early in 1984. ._..

From December 22 through December 27,1983, the utilities in the state suffered an acute power supply '

shortage due to extremely cold weather. The demand for electricity was unusually high. Statewide operation of generation units was impaired by severe, freezing conditions and by the curtailment of natural gas. Brazos - -

has historically seen its peak demand in the summer. i This year's record, summer peak of 560 megawatts was surpassed on December 24 by a peak of 624 megawatts.

Despite the adverse weather, we were well prepared. In j fact, we were able to assist other utilities in the state.

An emergency, this situation was uncommon by definition. Not uncommon was the superb response of --

our people. Furthermore, our employees' collective care Richard E. McCaskill and attention to day-to-day work had us fully prepared to respond. The emergency only highlighted their past performance.

At year-end G.W. Cates retired from the Brazos board after serving as the representative of Hill County Electric Cooperative since 1977. We will miss his counsel and wisdom. We wish him well in his retirement years. l l

M  ! t._

William G. Parker Richard E. McCaskill w ent g g g g nt ,

s 3

'983 Review i I

Finance and Administration was set at 4.125c per kilowatt hour c w. carpenter, uan.iger for power generated internally.

Since 1976, the Project S ales to ourand customers- Construction

, member and Engineering cooperatives municipal Division has been located in rented interchange customers -increase,d office space several miles from our i 4% to 2,730,000 megawatt hours in hedquarters building. After 1,983. Because economy sales were extensive studies, this past September significantly lower this year, we began construction which will operating revenuesincreased only expand and extend one wing of our j slightly to $175 milhon. offices. At that time, all headquarters Purchased power represented personnel will be in one building l

l over half the 1983 co,st of electne resultingin more efficient i service.The largest singleitem was communications and operations.

the 1,660,000 megawatt hours .

, The development of our most received f, rom San Miguel Electne valuable asset -our people - took Cooperative at a totalcost of $67 another step forward this year. After milhon. Naturalgas continues to be a a year of planning and development, significant expense itein, representing we presented a management approximately one-fourth of total development program in conjunction cost. with Baylor University's Hankamer Interest rates finally stabilized, School of Business.This program enablmg us to plan more effectively aims specifically at management in this area. We renewed severalof training for generation and our maturmg short-term debt notes at transmission cooperative personnel.

lower, long-term interest rates. O,ur It satisfies those training needs weighted average cost of money in not met by other activities.The 1983 was 9.93% first program was presented in During the last quarter of 1983, October with participation from we secured concurrent loans from, the several generation and Rural Electrification Administration transmission cooperatives.

and the National Rural Utilities l Cooperative Finance Corporation totalling $31,818,000.They will finance new transmission lines, i substations and modifications to exist-ing facilities to serve our members' needs.

We continued to sponsor the Member Prepayment Plan which resulted in benefits both to our member cooperatives and to Brazos.

Short-term cash needs throughout the year were provided,in part, by our rrmbers' participation in the plan. .

1 Base rates for wholesale power remained the same as in 1982.

However, the September 1 legislative ban of an automatic fueladjustment

'W, clause required us to use a fuel charge based on historic costs.That charge 4

7 5

"E m

.. ~_. ~ _ - ""

_.a Opemnons fag <

successful in reducing outages.

Our preventative maintenance 3

D. IL Swenke,Jr. Wn,yer

- M.

.i 9 programs began paying dividends @

]uring 1983, we met 65% of our g= y=b j$ during 1983 as average substation 1 -

J transmission system energy a outage time was reduced by 39%

requirements with lignite-fired from the previous year. T generation from the San Miguel . .

~ ~. "

In addition to routine j flant, dedicated hydralectric energy maintenance work, our transmission e ai d economy-lignite energy o r kW crews constructed three new _;

purchases. Our economic dispatch operations within the Texas Q? ph) s r1 distribution substations, accomplished system improvements C

a Municipal Power Pool iTM PP) were '@ fy in 26 substations, installed q

mstrumental in minhWzing fuel costs i microwave equipment at eight sites to 1 for Brazos and the aties of Bryan,

• upgrade the communications system, "

Denton, Garland and Greenville. and installed supervisory control and Economic dispatching is a program of data acquisition equipment in six Mii loading generating units in relation to substations. We also provided support -*

their fuel costs per kilowatt hour of MW on Saturday, December 24, services for construction and testing output to minimize the cost of 1983. This, our first winter peak of two distribution substations, two electricity. Through economic demand, was 11.4% above the 1983 345 KV transmission substations and dispatch operations we were also able summer peak and 17.5% above the 20 miles of 345 KV transmission line.

In 1984, we will continue m

to sell some of our excess gas, in the 1982 peak. 9 form of electric energy, to the TM PP On December 22,1983, the economic dispatch efforts ;vith a cities during the first half of 1983. We electric systems of the Electric TMPP to maximize the use of low = -

made changes to contractual gas Reliability Council of Texas cost fuels and to market excess -

volume requirements thereby experienced a shortage of available lignite-fired energy during periods of 3 improving the efficiency of economic generating capacity because of the low demand. 4 dispatch operations during the latter severe winter storm. Member utilities In addition to pole and fuse part of 1983. implemented the Emergency Electric maintenance and testing,our 1984 _

At our R.W. Miller Plant, we Curtailment Plan. Electric consumers objectives include: =

inspected and repaired the Unit # 1 and industrial customers were asked turbme generator and rebuilt the to limit their consumption of

. modifying 345 K V towers to i help reduce outages due to Unit # 1 air pre-heater. Plant electricity. The emergency situation personnel planned for cold weather continued through December 27. Our contamination 3 operations and mspected, repaired, gas fired generating plants and their e instituting a program of 2 -

inspection and modification of and upgraded freeze protection systems.

operating and maintenance personnel performed exceptionally well dur.mg reclosers to help reduce O C

equipment outages Our transmission system this penod. Not only were we able to e installing a redundant master S experienced a peak demand of 560 supply power to our customers .. for the supervisory control :iE MW dunng \ugust 1983, an increase reliably, we were also able to provice and data acquisition system 3 of 5.5% over the1982 peak demand. emergency assistance to other (remote control and Weather conditions throughout most utilities. Because of this severe test of of 1983 were relatively mild. our system,it became more apparent monitoring for our I E

transmission system).

However, the last two weeks of that our gas fired plants must be 9 December provided a severe test for maintained in top condition to be We also plan to replace the governor p our generation, transmission and available when needed during peg control system and inspect the low 3 pressure turbme and generator on substation facilities. The system loid periods.

experienced a peak demand of 624 We continued our; a n of R.W. Miller Unit #2 and to improve Ej pole inspection ber , c 182. the oil-firing capability and efficiency g of all our units.

Approximately 20 %

the transmission sy" em wen.

s on ] -

inspected, treated, reinforced or i replaced. We also initiated a program @

of fuse testing which proved 5 -

5 5

a Project Construction

• Reno-Cottondale - 9 miles of We continued major expansion of the andEngineering H-frame,138 KV radio communications and transmission line to provide microwave systems. Both should be B. w. Dyess, muger additionalstrength on our completed in 1984.These changes Bowie-North Texasline will provide substantially improved We incompleted numerous 1983, increasing our projectsduring system contingencies. voice and controlcommunications distribution substation capacity by

• Olney-Seymour - upgrading and system data acquisition. We also 75,125 KVA and transmission of 36 miles of single-pole, initiated activities on our solid state substation capacity by 490,000 KVA. 69 KV transmission line metering program which employs We energized 67 miles of new to meet new code state-of-the-art data acquisition for transmission line and upgraded, clearance requirements. use in systein planning. The program converted and rerouted 73 miles of a Knox Substation and Tap schedulesinstallation of metering line.The major transmission and Line - 4 miles of single-pole, packagesin approximately 150 distribution projects which we 69 KV transmission line and a Brazos substations from 1984 completedin conjunction with our 6250 KVA substation with through 1986. Individualcircuit Operations Division crews and 4 bays serving a high metering packages for individual outside contractors were: growth area of B-K distribution cooperatives will also be Electric Cooperative. installed during this time frame,as

• Elm Mott Whitney-20 miles of steel-tower,345 KV

• Scotland Substation and Tap their requirements are identified.

Line - 1 mile of single pole, We have continued to transmission line and the , ,

138 KV transmission ime and mvestigate and implement 450,000 KVA Whitney Substation to a 9375 KVA substation with progressive techniques,such as provide for entry of San 3 bays to accommodate, area computenzed scheduling and Migueland Comanche Peak growth fo,r J-A-C Electnc materials control, to improve our powerinto the Brazos System. Cooperative. efficiency and responsiveness to the Itis noteworthy that Whitney Highland Substation,- a needs of our members.

is our first 345 KV substation. 20,000 KVA substation and 4 o Hilltop Lakes-Bedias-Watson bays constructed for Denton County Electric Cooperative / gL ' 7.- { e2 Chapel- 27 and 5 miles, respectively,of H-frame 138 to serve a rapidly ,, c ,1 y;j 34;;

KV transmissionline and the

• developmg subdivision.

Winkler Substation-a 6250 i J*j 40,000 KVA Hilltop Lakes Substation providing 138 KV, KVA substation and 3 bays loop service with improved for Navarro County Electric voltage and reliability for the Cooperative to provide for =2 3

southern end of the system. normalload growth and . . ,

g .1 construction power for the

• Whitney-Windsor Windsor Tap-conversion of 27 miles Tarrant County Water 7 .;., _ 7; -

of H-frame and 7 miles of District's Richland 7-Reservoir Project. <

. ,b -

single-pole transmission line * "" ' ~~

• Talbertridge Substation -a -

from 69 KV to 138 KV with ~1-> -m' 6250 KVA substation and 4 associated substation improvements at Cayote, bays which will help serve a Bosque and Windsor.This steadilygrowingareaof ,

project is the first phase of our Bartlett Electric Cooperative.

conversion of the Whitney.

• Navasota Substation - a Belton transmission line from 6250 KVA substation and 4 69 KV to 138 KV. bays,providing additional service to Mid-South Electric Cooperative.

6

h 2

M

~E objective is to make our future power Public Relations cost as low as possible, we have F. M. Hushnal, Jr., transfer =

4 continued to kmk for and investigate --

opportunities to participate he major issue in the 1982 -

with other utilities in joint, gubernatorial campaign was electric utility rates. ( onsumers =

generation projects.

One of our major activities believed that their utility bills would a during the year was conducting be reduced and even that they might -

dFJJ w d studies which developed transmission not have to pay for fuel. In its 1983 d

d.T ..{.d

)gec -. / *^ }.; j u~" g g a construction 1984 and project requirements for session. the state legislature later. Based on those deliberated extensive changes to the Public Utility Regulatory Act at the

'.9 N studies, we have budgeted

[ insistence of the newly elected

) @  :

w. : '. approximately 524 million for 1984 governor. Consequently, public 1' I A y

.f,, a;ng .7.@ -f . .s transmission system improvements.

affairs became our predominate

[l The studies also justified delaying

~

some previously planned projects. activity in the first half of the year. _

Several members of the Mid-Tex Our specific assignment was to insure  ?

Corporate Planning Generation & Transmission that the amendments relating to fuel I' W. B. Tow nwnd, Jr. transger Cooperative have expressed interest cost did not jeopardize our ability to in joining Brazos. To determine the recover our costs. We made an O ur1983 major planning activities in benefits to both the interested intensive effort to insure that a focused on generation capacity needed to meet our load in cooperatives and to Brazos members, legislators understood our unique ,

we continued to conduct economic position: which power plants are on -

the early 1990's and on future lme affects our system fuel cost much transmission system growth to serve studies. We determined the date of --

membership which would give equal more than changes in cost of any our members reliablv.

Projections indicate that we wil benefits to the Mid-Tex cooperatives specific fuel. We had an uphill struggle and did not achieve all that need new generation capacity in the and to the existing Brazos members: January 1986. We we wanted. However, our efforts did  ;;

early 1990's. However, they must be bring recognition to our situation and verified by intensive study. During anticipate receiving applications the year, we worked on a new Power for membership in January 1984. We protected us from adverse legislation.

A legislative act which we Requirements Study for that purpose. will then be able to evaluate and =

For the first time, we departed from report the specific situations of those favored was an amendment to the cooperatives with a committed Electric Cooperative Corporation z historical methods and used Act. It " grandfathered" our j econometrics, demography and interest. .

relationship with our municipal i statistical analyses as tools. We in early 1984, the initial studies n new generation will be completed. customers by allowing us to serve  :

anticipate that the final report will be them through wholesale power available early in 1984. In conjunction with the generation ,

contracts. Our contracts have been We mentioned last year that we studies, a long-range transmission --

study will be prepared. We will interchange agreements which were conducting conceptual design 2 require these customers to maintain studies of two alternative projects: an incorporate both studies into a twenty-year plan for Brazos and the ability to generate power. -[

east Texas lignite project and San Miguel Unit #2. These studies were submit it to the Rural Electrification completed and we have continued Administration. We will continue the _

with supporting work related to modeling and projections of future power requirements. The results of  ;

future generation. Because our these studies will be used in i transmission studies to determine the  ;

long-term requirements for the Brazos System. e

=

i 7 Q m

Last year we developed and Brazos FuelCompany, Inc. Through our new pipeline we should published a formal plan for c. L sutin, umger be able to obtain three new sources of emergency action and , , gas: access to two major supply communications with our customers, .G rom some of our difficultiesin pipelines and to the " spot" market.

the media and the public during , 1983, we have developed Additionally,we may still retain power supply shortages.This plan sigmficant opportunities. dedication to our producers' wells proved very effective during a There is currently a natural gas because they are not subject to the thorough test created by the glut that some experts anticipate to curtailment policies of major extremely cold weather at year-end. last through 1986. At the price we pipelines.The persistence of the gas We operated in accordance with the pay our dedicated producers for glut has created conditions in which plan for a period of five days when natural gas, we were not able to find a renegotiating our present contracts power supplies were strained. market for production excesses may now be beneficial to all parties:

We anticipate several non- during our periods oflow producers, pipeline, and Brazos. The recurring activities considerable attention in which 1984: will require consumption. It became difficult toavoid Brazos Electric has"take-or-pay" been penal a a rate case in anticipation of we terminated purchasing 25% of studying two alternative lignite commercialoperation of the our gas requirements from the power plants for operation in the Comanche Peak Nuclear pipeline which serves us. We also early 1990's. We are currently Plant reduced purchases from our negotiating with a major coal

• initiation of a new lignite-fired producers by nominating our company for lignite reserves.

generation project, scheduled demands and then taking their gas Simultaneously, San Miguel Electric for operation in the early ~

ratably as required by the Railroad Cooperative is conducting a fuel 1990's. Commission's" ratable take" rule. study.Our goalis to determine if

• the possibility of more These actions brought some relief. the second unit at San Miguel cooperativesjoining Brazos. In the past few years, the daily would be more economical to build delivery capacity of our dedicated than a plant sited at an east y wells has declined due to their age -- Texas lignite reserve.

now generally eight to ten years. This jt y r#- ;g-- condition has significantly limited our W ma - ability to use the full capability of the R.W. Miller Plant, without burning

, , , , oil, for periods of peak demand. In

+-aan --* short, the max,i mum delivery NT E capability of our gas supply is too heEt iS A is low,and contractual minimums are bERVU  !@& igm too high.

MZ.'" W B 1. " We have been working on

,~

- - = *-- --

m*- several plans which willalleviate these problems. The first is to build a 12-inch natural gas pipeline from the R.W. Miller Plant to Huckabay, about 25 miles to the south. It will be able to provide sufficient gas for the Miller Plant to operate at full capacity. We have also been negotiating with natural gas pipeline companies for gas supply contracts.

8

• g" Treasurer's Re Jor: $C p ...

4 c. .

,,f y . .;

W; ; f , c "he Consolidated Statement of This year, totalassets exceeded $U:

1,@. -f. -

~ ~ ~ . / , .;. .A  %: ' f.e .. Revenue and Patronage $351 million. Total revenues were 11.

Capitaland Other Equities of the $175 million.The distribution of C. .

3 7^ J. i'.3 ? 4; yi Cooperative and its wholly owned revenuesindicates that purchased  :

' 7. . r.g 13 ,

.4.- -

j J subsidiary, the Brazos Fuel power continues to be the major cost i J..

~

E Company, Inc., reflects that item. We present below the

. ': , ~

5 -

' Af, J f operations produced net margins of distribution of both the 1982 and the J.: ?

e

. . .: ' r s $2,744,917 for the calendar year 1983 revenue dollars. F.- .

C ' -Y fr.4$ '

.f 1983. Margins improved significantly The Cooperative received Rural  ?

e 1 e compared to the net margins of Electrification Administration and ~:s J g4 / Y $734,995 reported in 1982. The Federal Financing Bank loan fund 4

%.. .. , . c we R., 6 Q1 margins from 1983 resulted in a advances of $50,355,000 during

. . . ;p.

2:.y::

gM ; Qw..y Times Interest Earned Ratio (TIER) 1983. Of these funds, $9,807,000 9.:

.,j d .,1 44. V { # ... .3 . .

( . j..

of 1.10 and a Debt Service Coverage were REA insured and $40,548,000

- '  ?'

/

(DSC) of 1.15.The TIER and DSC were REA guaranteed.These 1 D..f '

^

ratios are key financialindicators used by the Rural Electrification advances were used to finance the Ml Robert II. Bunting construction of transmission facilities 73q" Secretary-Treasurer Administration in assessing the and to finance the cost of our 3.8%  : o. . -

ability of the cooperative to meet its interest in the Comanche Peak .i... .

mortgage requirements. Nuclear Plant. Long-term debt at  : -

Operating margins from the year-end wasjust over $297 million. vs Cooperative's operations for 1983 The Cooperative's totalmargins -:

were $2,346,497. These margins have and equities of $23.4 million 3..;

been allocated,to customers on a represent 6.6% of the $351.9 million &.y patronage basis. totalassets.  ;.,

a :. .

O..

DISTRIBUTION OF 1982 DISTRIBUTION OF 1983 REVENUE DOLLAR REVENUE DOLLAR

( y g g g g g; --- -

- ggggggy -

! TJ W 9: 5 Mt M 955 3 MmWIWdb. , 1111.Ett 3515 DW M S "

l , *4E,i f Lj # A 79565199 C A

f9 bl f% K 063644M O "ff h{ '"

f "

1F *.

{ l M 19 $( & If r9 0; 7 K Di i3

- #~""'

I 11] y $ 2 i j bep ti l 7 n , g ,6 44

, U C 8,~ 4y

f. _ . . . ,

j . ...

s\

crait:"

& Arnmt-9: e=-

Int m:

5 Jm enl Taun m e Wages & Other rmts 1.ls fa e I uciCmt 33 H wages &OtherCats i Ie Generated Power 34 74 FuelCat 26 f t lg Generated Power 27 64 D

9

= - . .

_30 arc on trectors a

yye

.,3.~ .-.-

g .,., -

M -

6 a, ,. .

- 3Uf. ..

<cp W' . .

-g i ,

, ,,  ; c +-

,Q l :q _

l

~

p./ , .' Y. ~

n

~

.. 3.yl..;,. g- [ _, *

. _'.%._; f i .:;-5.~ .

, . .. 4

k. i .;^^. _ < . , .7 _ yj William G. Parker F. C.1.uedtke Robert II. Bunting President Vice-President Secretar> -Treasurer Comanche County McLennan County J-A C Electric Cooperative Electric Cooperative. Electric Cooperatise.

Association incorporated Incorporated Ad-

+# ?. -

' 's

-l e3 #>

' . i.c+i -  ;$.e . gP, y

. s. -

. ) \ , _. .-

.?, -) ..;$ f' c-: > .

.(>- <..;,,,., , . ;.

,.> . . - 2:

r w +. l%. ,

,YM g ; y~%,) y, O gadf r-j ...p. ., b>I , t A c;. ..

7. , /,.._

,Y ..,.

, . . r4 . 1., -

. M. ' ; '-.51  : E..

William Sanders Woodron liensarling ilorace R. LeNoir J. W. Richards, Jr.

Erath Count) Mid South Limestone County Roheinon Electne Cmperatne Eketnc Cooperatne Ekctnc Cmperatne. Ekctnc ( oogratne.

Association Awcation incorgwated incorporated

., - D .g, .-Q r>. .. g p ; >:

y,g, 8 ; yh..e *

,. 3'

. ;'i 5 ['- -

.. . g- g s .,

g.

Y f . / y 2 . ,; ~ 4-,; ., ; ' ...f'

~

E g,l- J..

/. ' ,,

.R , # '

..y ,! % >' "; .. Q

.) y'g' Y-Vg ,

.n'- ,,:..; & ' '

, . 3. _ .  :- >

l anrence Karl Grmer F. Furr J. F. llerring. Jr. G. W. Cates

• Bartlett Fort Belknap In County RilCouni)

Ekclnc Cmperatnc. Ekctnc Cooperatne. Ekctnc Cooperatne. Hetinc Cooperatne.

Incorporated incorpwated incornwated Incornwated 10

l l -. - ._ - . _ . . . .-

g '._y .y 4 - .,

7. . .

w, g .g

. , ih'n 3 .;..l. fr .-- .: e. ,."_*#a.f.f ^ ' hik.h

_ J'

• 2 . ,, .

_5 . 'J;.;y.?

g g ( , .

i' R .4 i

['. .;$ ...' . ,. l '%i g _ .

a

....,4.:.- ..>

5-

,;, r.f; h ,

p .. }> 3 '.:j.; l l' # > -

Y \ , I%l g

/

n s:*,",

.;; . ' . .

• M. ." . .i nd . f*4 i

/'_

v. .

n .,

M. E.llolicy Luther L Parks Joe Forman Jack Elam Billy J. Poland Melsin Jordan Ihnton County Belfalls Wise llamilton County Johnson County NavarroCounty ElectricCooperatisc. Electric Cooperative. EkctricCooperative. Ekctric Cooperatise ElectricCooperative Electric Cooperatise.

Incorsvated Incorporated incorporated Awriation Association Incorp> rated

.v.<. s. a.

• • ' * ' . 4

+

U a

.,.. ' . f.

.N. '*

Q ..ffyc y..

->bd..ffY

-ty'.k: 1 & L

,. . $, c. ; !*

4 ,.

Robert T. Lewis,Jr. Don Gregg Cooke County BK Ekctric Cooperatise Ekctric Cooperative.

Association incorp) rated

'Q

.~.'

p_fd} i 4;,

,s i;K

• d.j ..'M

' Reugned use retuement . hnuary 1.1984 Sam ikwon elected to the vacancy.

II

l Yanagemen:

Richard E.McCaskill Executive Vice President and General Manager Francis M. Bushnell, Jr.

Executive Assistant and Manager-Public Relations Clarence W. Carpenter Manager-Finance and Administration Billy W. Dyess Manager-Project Construction and Engineering Dan B.Swenke, Jr.

Manager-Operations William B. Townsend, Jr.

Manager-Corporate Planning Subs &ry Brazcs FuelCompany,Inc.

Clifford L.Sartin Manager-FuelOperations

'983 Financia Statement Brazos Electric Power Cooperative, Inc.

13

FinancialStatement The stemfinancial strength from its member and resilience cooperatives of thelisted and customers, Brazos System below. They serve consumers in rural, suburban, and urban areas totaling nearly 20% of Texas. This vast service area provides diversity for income sources of residential, agricultural and industrial loads. It also provides strong growth in energy sales.

Member Cooperatives Bartlett Electric Cooperative, Inc.

B-K Electric Cooperative,Inc.

Belfalls Electric Cooperative, Inc.

Comanche County Electric Cooperative Assn.

Cooke County Electric Cooperative Assn.

Denton County Electric Cooperative, Inc.

Erath County Electric Cooperative Assn.

Fort Belknap Electric Cooperative, Inc.

Hamilton County Electric Cooperative, Assn.

Hill County Electric Cooperative, Inc.

J-AC Electric Cooperative,Inc.

Johnson County Electric Cooperative, Assn.

Limestone County Electric Cooperative, Inc.

Mclennan County Electric Cooperative, Inc.

Mid-south Electric Cooperative Assn.

Navarro County Electric Cooperative, Inc.

Robertson Electric Cooperative, Inc.

Tri-County Electric Cooperative, Inc.

Wise Electric Cooperative,Inc.

MunicipalCustomers Bartlett Granbury Hearne Sanger seymour Weatherford Whitesboro Other Texas A & M University J

14

Comparative Summary of Electrical Operations 1979-1983

• 1983 1982 1981 1980 1979 (Mills per KWH)

Total Operating Revenue (1) 53.3 46.8 40.1 34.6 30.9 Operating Costs Production expenses (2) 43.4 39.5 34.1 29.1 24.8 Transmission expenses 2.5 2.2 1.6 .8 .8 Adm. and general expenses .6 .8 1.0 .9 .9 Dep'n., taxes, insurance, interest 6.0 4.1 3.4 3.2 3.7 Total Operating Costs 52.5 46.6 40.1 34.0 30.2 Net Operating Margin (Loss) .8 .2 (-) .6 .7 (1) Average sales price by class ,

Firm power sales Member Cooperatives 55.6 49.9 40.1 34.5 30.7 Cities 57.1 50.9 42.4 36.0 32.9 Utilityinterchange - - - -

34.8 p Surplus power sa'es Cities 40.3 38.4 33.9 34.5 29.5 i (2) Further analymd by source Generated power Cost of fuel 40.9 39.1 34.1 27.6 23.3 Wages and other costs 1.7 1.2 1.0 .6 .9 Purchased power For system 38.6 36.3 24.9 22.9 19.7 At isolated meter points 43.8 41.6 35.6 29.1 26.0

• Excludes operations of Brazos Fuel Company, Inc.

15

Comparative Summary of Electrical Operations 1979-1983 *

==

1983 1982 1981 1980 1979 Electricity Generated and purchased-In Megawatt Hours Generated at W.R. " Bob" Poage Plant - - - - -

Generated at North Texas Plant 8,814 22,890 71,897 99,986 4,262 Generated at Randle W. Miller Plant 1,118,547 1,499,573 1,494,217 1,782,357 1,513,456 Purchased for system

c. From San Miguel Electric Cooperative 1,668,411 1,654,877 366,664 - -

b. From other utilities 229,462 170,161 295,685 286,930 334,217 Purchased atisolated meter points 460,553 458,434 412,529 413,856 363,032 3,485,787 3,805,935 2,640,992 2,583,129 2,214,967 Electric Sales-In MegawattHours A. Firm Member Cooperatives 2,498,886 2,389,141 2,226,904 2,214,371 1,897,829 L.Ns-regularinterchange 230,628 226,982 218,956 224,843 _ 195,822 2,729,514 2,616,123 2,445,860 2,439,214 2,093,651 B. Economy Sales 534,464 1,049,090 83,595 23,748 33,150 3,263,978 3,665,213 2,529,455 2,462,962 __2 1 126,801 Electric Sales to Member Cooperatives-In Megawatt Hours Bartlett Electric Cooperative, Inc. 47,297 47,221 43,646 44,297 41,767 Belfalls Electric Cooperative, Inc. 39,125 42,317 46,837 42,859 32,874 B-K Electric Cooperative,Inc. 61,230 61,530 62,194 66,430 57,746 Comanche County Electric Cooperative Assn. 141,177 136,675 123,059 113,760 90,078 Cooke County Electric Cooperative Assn. 244,152 234,604 220,337 221,999 209,647 Denton County Electric Cooperative, Inc. 242,089 218,286 195,937 195,123 164,319 Er:th County Electric Cooperative Assn. 153,394 146,638 137,763 140,736 118,911 Fort Belknap Electric Cooperative, Inc. 105,013 94,726 84,994 75,466 67,637 _

Hamilton County Electric Cooperative Assn. 75,894 75,602 69,983 72,741 66,510 Hill County Electric Cooperative, Inc. 115,100 111,916 103,032 108,514 93,516 J-A-C Electric Cooperative, Inc. 87,038 82,017 73,085 66,765 60,554 Johnson County Electric Cooperative Assn. 299,957 286,371 259,155 262,235 228,898 Limestone County Electric Cooperative, Inc. 59,878 61,201 58,552 61,404 56,985 McLennan County Electric Cooperative, Inc. 77,712 77,009 75,815 74,774 63,282 Mid-South Electric Cooperative Assn. 155,889 156,657 141,804 117,957 93,040 Navarro County Electric Cooperative, Inc. 91,528 86,241 95,233 106,045 68,468 Robertson Electric Cooperative, Inc. 48,201 48,626 41,757 41,568 35,283 Tri-County Electric Cooperative, Inc. 323,536 301,061 283,580 290,372 252.767 Wise Electric Cooperative,Inc. 130,676 120,443 110,141 111,326 95,547 2,498 886 2,389,141 2,226,904 2 214,371 1 897,829 16

==_-. __ _

1983 1982 1981 1980 1979 Maximum Kilowatt Demand At Member Delivery Points 612,297 568,681 556,837 551,656 433,233 Annual Load Factor Percent Member Cooperatives 47 48 46 46 50 Electric Energy Sales Member Cooperatives $138,873,457 $119,214.939 $ 89.E3,467 $ 76,382,941 $ 58,230,463 Wholesale and other 34,699,138 51,976,783 11,830,747 8,848,000 7,332,682

$173,572,595 $171,191,722 $101,204,214 $ 85,230,941 $ 65,563,145 Other Electric Revenue 233,616 184,241 245,027 102,932 100,574 Total Operating Revenues $173,806,211 $171,375,963 $101,449,241 $ 85,333,873 $ 65,663,719 Operating Expenses Production Expense-Generated Power S 48,018,505 $ 59,530,029 $ 54,979,207 $ 53,184,446 $ 36,697,814 Production Expense-Purchased Power 93,506,213 85,265,221 31,174,730 18,633,493 16,031,402 Tr:nsmission Expense 8,264,545 8,121,976 4,092,502 1,962,736 1,719,860 Insurance and Welfare Expense 1,344,556 1,200,410 954,435 841,434 730,333 Other Administrative &

General Expenses 1,955,285 1,783,918 1,635,066 1,337,628 1,140,286 Depreciation and Amortization 5,631,674 5,126,312 3,826,420 3,519,135 3,588,702 Texes 1,046,208 1,082,647 1,014.270 913,757 819,521 Interest on Long-Term Debt 26,620,960 22,403,479 15,530,709 11,343,930 3,928,246 Other Interest 972,492 1,047,359 583,981 576,205 549,603 Less interest Charged to Construction (17,466,851) (14,735,721) (12.438,836) (8,462,767) (940,829)

Other Operating Deductions 1,566,127 144,739 179,555 3,779 -

TotalCost of Electric Service $171,459,7_14 $170,970,369 $101,532,039 $ 83,853,776 $ 64,264,944 Gain (Loss)in Operating Margins S 2,346,497 $ 405,594 $ (82,798) $ 1,480,097 $ 1,398,775 Non-Operating Margins 366,651 337,760 92,624 247,537 346,152 Gain (Loss)in Total Margins S 2,713,148 $ 743,354 $ 9,826 _$_1,727,634 $ 1,744,927

• Excludes operations of Brazos Fuel Company, Inc.

I7

ConsolidatedBalance Sheet i

Years Ended December 31,1983 and 1982 1983 1982 ASSETS (Note 2)

Utility Plant (Notes 1,3 and 13):

Electric plantin service, at cost $179,060,951 $164,518,537 Completed construction not classified 13,251,288 5,698,207 Construct,on workin progress 161,589,306 133,386,486 Nuclear fuelin process of refinement and enrichment 6,906,277 4,751,582 360,807,822 308,354,812 Less accumulated provision for depreciation and amortization 46,480,898 42,343,477 Utility plant, net 314,326,924 266,011,335 Other property and investments:

Investments in associated organizations:

Capital term certificates (Note 13) 5,666,914 4,847,198 Patronage capital (Note 1) 956,632 1,107,712 Other 6,250 11,453 Notes receivable - 4,409 Restricted assets and other investments:

Certificates of deposit 13,497 28,106 Other 17,500 22,500 6,660,793 6,021,378 Current assets:

Cash-general 1,754,488 831,788 Cash-loan funds 6,624 176,946 Specialdeposits 127,635 121,600 Temporary cashinvestments - 600,000 Accounts receivable 18,222,009 18,996,620 Fuelinventory, at average cost 771,732 1,232,774 Material and supplies, at average cost 6,629,439 7,023,056 Prepayments 84,090 211,654 Totalcurrent assets 27,596,017 29,194,438 Deferred debits:

Unrecovered purchased fuel costs,less allowance for unrecoverable gas of

$336,077 and $538,580 (Notes 1 and 13) 704,894 775,898 Fixed transmission costs,less amortization of $849,796 and $424,898 (Note 8) 1,228,062 1,652,960 Other 1,470,365 1,984,400 3,403,321 4,413,258

$351,987,055 $305,640,409

)

18

1983 1982 LIABILITIES Equity and margins:

Memberships S 95 $ 95 P: tronage capital and other equities (Note 4) 23,497,355 20,752,438 23,497,450 20,752,533 Long-term debt:

REA mortgage notes (Notes 4 and 5) 84,051,471 77,427,713 NRUCFC mortgage notes (Notes 4 and 6) 9,805,443 10,293.139 FFB mortgage notes (Notes 4 and 7) 203,487,000 162,939,000 297, 1,914 250,659,852 Current liabilities:

Current maturities of long-term debt 3,698,000 3,655,000 Accounts payable 16,997,734 23,936,313 Notes payable-NRUCFC(Note 9) 4,800,000 5,300,000 Notes payable-banks 17,500 22,500 Other accruedliabilities 5,412,438 1,045,951 Totalcurrentliabilities 30,925,672 33,959,764 Deferred credits (Note 1) 220,019 268,260

$351,987,055 $305,640,409 The accompanying notes are an integralpart of these financic' statements.

19 l . .

Consolidated Statement of Revenue and Patronage Caaital and Other Ec uities Ye:rs Ended December 31,1983 and 1982 1983 1982 Operating revenues:

Sales of electric energy (Notes 1 and 11) $173,572,595 $171,191,722 Salesof naturalgas 1,094,380 1,776,021 Other 193,449 139,139 174,860,424 173,106,882 Operating costs and expenses:

Cost of natural gas sold 1,057,943 1,721,270 Operating expense:

Operation expense:

Production-fuel (Note 1) 45,843,552 57,471,918 Production-other 998,341 1,011,801 Purchased power 93,506,213 85,265,221 Transmission 6,268,391 6,140,244 Distribution 268,835 301,953 Administrative and general 3,421.521 3,096,239 Maintenance expense:

Production 886,402 872,584 Transmission 946,474 884,504 Distribution 780,845 795,275 General plant 139,746 112,756 Depreciation and amortization (Note 1) 5,634,087 5,129,679 Taxes 1,055,956 1,095,051 Interest onlong-term debt 26,620,960 22,403,479 Otherinterest 950,131 1,046,240 Interest charged to construction (Note 1) (17,466,851) (14,735,721)

Other deductions 1,566,127 144,739 Totaloperating costs and expenses 172,478,673 172,757,232 Operating margins 2,381,751 349,650 Patronage capitalallocations 105,609 73,384 Nonoperating margins:

Interestincome 263,306 234,172 Other - 52,028 Margins before Federalincome tax 2,750,666 709,234 Federal income tax (benefit) (Note 12) 5,749 (25,761)

Net margins 2,744,917 734,995 Patronage capital and other equities, beginning of year 20,752 438_ 20,017,443 Patronage capital and other equities, end of year $_23,497 355_ $ 20,752,438 The accompanying notes are an integralpart of these financial statements.

20

Consolidated Statement of Changes in Financial Position Years Ended December 31,1983 and 1982 1983 1982 Working capital provided from:

Net margins S 2,744,917 $ 734,995 Depreciation and amortization 5,634,087 5,129,679 Patronage capital allocations (105,609) (73,384)

Gainson salesof assets - (49,851)

Working capital prnvided from operations 8,273,395 5,741,439 Advances from REA 9,807,000 65,000 Advances from FFB 40,548,000 37,145,000 Decrease in other property and investments - 99,161 Salvage value of retirements 284,203 970,092 Contributions for line removal and relocation 11,252 159,016 Decrease in unrecovered purchased fuel costs 71,004 273,810 Proceeds from sale of assets - 56,150 Decrease in deferred debits 514t035 -

Totalworking capital provided 59,508,889 44,509,668 Working capital used for:

Additions to utility plant 53,411,986 44,607,928 Payments on long-term debt to REA 3,183,242 3,230,695 Payments on long-term debt to CFC 487,697 704,651 Plant removalcosts 408,246 335,847 Decrease in deferred credits 48,241 44,533 increase in other deferred debits - 226,819 increase in other property and investments 533,806_ -

Totalworking capital used 58,073,218 _ 49,150,473 Increase (decrease) in working capital $ 1 14_35,6_71_ ($ 4,640,805)

Changesin working capital:

Increase (decrease)in current assets:

Cash 752,378 595,182 Temporary cash investments (600,000) (489,054)

Special Deposits 6,035 82,754 Accounts receivable (774,611) 3,339,598 Material and supplies (854,659) 1,548,424 Prepayments (12_7,564) (41,086)

_ (1,598,421) 5,035 818 1

Increase (decrease) in current liabilities:

Current maturities oflong term debt 43,000 194,000 Accounts payable (6,938,579) 10,871,540 Notes payable (505,000) (1,505,000)

Other accruedliabilities 4,3661487 116,083

_(3,03_4_t09_2) 9,676,623 Increase (decrease)in working capital _$_11 435,671 _($ 4,640,8J)

The accompanying notes are an integralpart of these Inancial statements.

21

Notes to Consolidated Financial Statements 1 -Summary of Significant Plant Additionsand Retirements Accounting Policies The cost of additions to electric PrinciplesofConsolidation plant in service represents the riginalcost of the contracted The consolidated financial ,

services, direct labor and material, statements include the accounts of lnterest on construction loans, and the Cooperative and its wholly-

.ndirect charges for engineering, owned subsidiary, Brazos Fuel supervision and similar overhead Company. Allintercompanyitems tems. Maintenance and repairs of have been eliminated in pr perty and replacements and consolidation.

renewals ofitems determined to be System ofAccounts less than units of property are Theaccountingrecordsof the charged to operations. For property Cooperative conform to the replaced or renewed, the original Uniform System of Accounts cost plus removalcost less salvage prescribed by the Federal Energy is charged to accumulated Regulatory Commission for Class provision for depreciation. The cost A and B electric utilities modified of related replacements and for electric borrowers of the Rural renewals is added to electric plant.

Electrification Administration Contributions in aid of (REA). construction are credited to the Electric Revenuesand FucICosts applicable plant accounts.

Electric revenues are recorded Interest Charged to Construction monthly as of the date meters are The Cooperative has read and accounts are billed. capitalized as a part of electric plant Fuelcosts are charged to the cost of borrowed funds used for production expense as fuelis such purposes, net of interest consumed. earned on " idle" advances of the borrowings.The procedure is in accordance with that prescribed by REA.

I 22

Depreciation royalties.The amount of gas paid

! Provision has been made for f rin advance is classified as a depreciation on a straight-line basis deferred debit. lJnpaid product, ion at annualcomposite rates as taxes and royalties, related to the f H ws: above contracts, are included in deferred credits until such time that the gas purchased and not taken Production plant 3.10 % willactually be recovered by the Transmission plant 2.75 % Cooperative.

Distribution plant 2.88 %

An allowance for Generalplant:

unrecoverable gasis provided for Structures and by charges to income. The improvements 2.50 % allowance is based upon a Transportation 15.50 %

determination by the Cooperative's Communications 6.50 % consulting engineers as to the Other generalplant 6.00 % volume of gas lossesin each well.

Patronage CapitalCertificates 2.gggeggygeggeg Patronage capital from

, Allassets are pledged as associated organizations is recorded security for the long-term debt to at the stated amount of the REA, National Rural Utilities certificates.

Cooperative Finance Corporation Unrecovered Purchased FuelCosts (CFC)and Federal Financing Bank Naturalgas purchased under (FFB).

the take or-pay terms of contracy with various individual producers is recorded at contract cost,which includes production taxes and a

23

Notes to Consolidated Financial Statements (continued) 3 - Utility Plant 4 - Patronage Capital and Other Listed below are the major classes Equities of utility plant as of December 31,1983 Detailof patronage capital:

and 1982:

C'" ' 3I' December 31, 1983 1982 1983 1982 Intangible plant 5 2,170 $ 2,170 59,936,639 59,914,595 Assignable 5 2.452,1 % $ 478,866 Production plant 74,356,782 Assigned 17,577,743 17,098.877 Transmission plant 84,391,302 Distribution plant 30,544,187 26,132,645 20,029,849 17,577,743 Generalplant 4,186,653 4,112,345 Detailof other equities:

Completed construction Capitalgains and losses 9,383 9,383 not classified 13,251,288 5,698,207 3,183,707 2,922,665 Nonoperating margins Electric plant Retained earnings of in service 192,312,239 170,216,744 subsidiary 274,416 242,647 Construction work 3,467,506 3,174,695 in progress 161,589,306 133,386,486 Totalpatronage capital Nuclear fuelin process $23,497,355 $20,752,438 and other equities of refinement endenrichment 6,906,277 4,751,582 5360,807,822 $308,354,812 Under the provisions of the Includedin construction work long-term debt agreements, until in progress at December 31,1983, ,

the totalof the equities and are costs of $144,558,890 for the margins equals or exceeds 40% of purchase of 3.8% ownershipin the the total assets of the Cooperative, Comanche Peak Nuclear Plant.

the return to patrons of captial The Cooperative's cost ofits 3.8%

contributed by them is limited sharein the Comance Peak generally to 25% of the patronage Nuclear Plant is estimated to be capitalor margins received by the

$205,000,000.

Cooperative in the next preceding year.

24

. _ . __ . . ~ . . . _ . _ . _ . . .- _ . . . .

The by-laws of the 6 - Long-Term Debt - CFC Cooperative do not provide for the Mortgage Notes assignment of nonoperating Long-term debt to CFC margins or earnings of subsidiaries. consists of 7% to 14% mortgage The by-laws were amended, notes payable with principal and effective January 1,1976, to interest installments of $321,500 permit the offsetting of current due quarterly with S488,000 year operating margins against principal payable within the next operating deficits of prior years. twelve months. The notes are 5 - Long-Term Debt - REA Mortgage scheduled to be fully repaid at Notes various dates from May 31,1989 to November 30,2016.

Mortgage notes to REA are 2% and 5%,35-year notes payable Unadvanced loan fundsof 58,688,000 at i 1 % are available with principal andinterest installments of approximately to the Cooperative on loan

$1,336,000 due quarterly. The debt commitments from CFC.

includes an estimated $3,210,000 of 7 - Long-Term Debt - FFB Mortgage principaland deferred interest Notes payable within the next twelve Long-term debt to FFB months.The notes are scheduled t consists of 9.824% to 14.907%,

be fully repaid at various dates 2- to 32-year notes payable with from March 10,1984 to September interest payments due quarterly.

12,2018. Unadvanced loan funds The notes are scheduled to be fully of $15,168,000 at 5% are available' repaid at various dates from to the Cooperative on loan January 24,1984 to December 31, commitments from REA. 2017.The Cooperative has an option to extend the due dates of the 2-year notes for a period not less than two years nor greater than seven years after the date of the advance;or to extend the maturity date to thirty-four years after the end of the calendar year in which the advance was made.

f 25 g

Notes to Consolidated Financial Statements (continued) lg jill ll l At December 31,1983, the 9 - Line of Credit Agreement Cooperative had $63,614,353 of The Cooperative has advances with short-term maturity established a line of credit, for dates which theyintend to short-term financing, with CFC refinance under the above options. for $25,000,000. At December 31, These advances have been 1983, the amount owed CFC classified aslong-term debt for under agreement was S4,800,000 financial statement purposes. due March I8,1984 at an annual Advancedloan funds of interest rate of 10 3/8%.

$99,514,000 are available to the 10 - Retirement Plan Cooperative on loan commitments from FFB. The Cooperative has a contributory retirement plan 8 - Deferred Debits covering substantially all ofits The Cooperative has employees. Total retirement costs constructed a 78-mile,345 KV charged to operations for 1983 and transmissionline from the San 1982, were $356,179 and Miguel Electric Cooperative,Inc. S332,724, respectively, and include generating plant (Plant) to a point charges for current and prior ofinterconnection with another service costs. The Cooperative's utility. Poweris transmitted from policy is to fund retirement cost the Plant to the point of annually as it is accrued.

interconnection andis wheeled by The actuarially computed other utilitiesinto the Brazos value of vested benefits at transmission system.Certain fixed December 31,1982 (date oflatest costs associated with the line,and information available)was charges from the other utilities for $4,735,845, which was exceeded wheeling services,were deferred by the book value of the pension pending commercialoperation of fund assets by $1,755,148.

the Plant which occured in early 1982.The deferred costs are being amortized to expense on a straight line basis over a period of 5 years.

j 26 l

) -

J

= = = _ _ _ _ _ - ..

_ = =

11-Transactions with Member Revenue Service resulting from a l Corperatives net operating loss of the subsidiary

The Cooperative has contracts in 1982,less $7,822 for additional with 17 ofits 19 member taxes resulting from an Internal distribution cooperatives, through Revenue Service examination of June 30,2020, for the sale of the subsidiary for the years 1977 .

wholesale electric energy. through 1979.

Contracts with the other 2 member 13 - Commitments and cooperatives are through the Contingencies i period June 30,2010. Sales of Unrecovered Purchased Fuel electric energy to the 19 members Costs

, were $138,873,457 and

$119,214,939 for 1983 and 1982, The Cooperative has 2

respectively. contracted to purchase gas from vanous individual producers,,n i 12 - FederalIncome Taxes addition to other suppliers.The Federalincome taxes are paid remaining term of the majority of on taxable income of the these contracts is approximately 10 subsidiary only. No provision has years. Under the terms of the been made for Federalincome contract agreements, the taxes for the Cooperative in Cooperative has agreed to reliance on a determination letter, purchase and receive,or pay forif dated March 12,1969, issued by available and not taken,an Internal Revenue Service,which average daily quantity of gas set states that in the opinion of the forth in the contracts. The Service the Cooperative meets the contracts provide for the recovery i requirements of Section 501(c)(12) of gas paid for, but not taken, over L of the Internal Revenue Code and the remaining life of the contracts.

.is entitled to exemption from It is the opinion of the l . Federalincome tax. management, that with proper l The tax benefit of $25,761 in monitoring of reservoir l the year ended December 31, performance and field surveillance

[ ~1982, represents a refund of of operating conditions, failure to

i. $33,583 due from Internal y

y

Notes to Consolidated Financial Statements (continued) l l

recover gas paid for but not taken OperatingAgreements above the allowance for Under the terms of operating unrecoverable gas,willbe minimal; agreements, the Cooperative has and that such failures,should they guaranteed the cities of occur,are a properincrement of Whitesboro and Sanger a the cost of actualgas delivered and minimum annualincome from the

therefore recoverable,under the operation of their electric systems.

Cooperative's rate structure, from Management is of the opinion that its customers, the Cooperative willincur no Construction Commitments liability as a result of such The Coopertive's expenditures guarantees.

forits 1984 construction program g.n m are estimated to be approximately --

$60,100,000 of which $58,200,000  !!IM'~~

l willbe financed by REA,CFC and FFB loan funds and $1,900,000 The Board of Directors Br z s Electric Power Cooperative. Inc.

willbe financed by general funds.

We haw exaniined the wnsolidated Approximately $24,725,000 of the balance sheet of Brazos Electne Power estimated 1984 construction cooperative, Inc. and subsidiary as or December 31,1983,and 1982,and the related program expendituresis for

""5 "d '*d S' "' "'S I '"""" "d additions ot the Comanche Peak patronage capital and other equities and Nuclear Plant. changes in financial position for the years then

. ended.Our examinations were madein Subsen.p tion Agreement accordance with generally accepted auditing st ndards and, accordingly, included such tests The Cooperativeis committed " '

under the terms of a subscription r edu """Ne*c'or

"[" s s [d r$ $sS"$',ll" agreement to purchase additional circumstances.

in our opinion, such financial statements CFC capital term certificates . present fairly the financial position of Brazos total.ing approximately $820,000 in Electric Power cooperative, lac. and 1984, subsidiary at December 31,1983 and 1982,and

the results of their operations and the changes in their financial position for the years then ended, in conformity and generally accepted accounting principles applied on a consistent basis.

he hbon March 1,1984 28

I 4 ,

god 4

~

razos Electric Power Brazos also provides electric power to \

Cooperative,Inc. is a the municipal systems of the cities of '

l generation and transmission Bartlett, Granbury, Ilearne, Sanger, i i cooperative which provides electric Seymour, Weatherford and power to its 19 member distribution Whitesboro and to Texas A & M i

cooperatives whose service areas University. Brazosis a memberof the cover 49,900 square miles of Texas. Texas Municipal Power Pool with the

Brazosandits citiesof Bryan, Denton, Garland and members Greenville. The combined generation comprise the capacityof theTexasMunicipal ,

Brazos System. Power Poolis 2130 megawatts.

) -

i r

4 i

i I

I I System Statistics Fuel Nameplate

• ranas l lleadquarters ligmte

• h1 uel 239MW 239 MW'

' R.W. Maler Plant N Gas Joe MW 391 MW Power Cooperative North Teus Plant N Ga 66 MW 75 $ Mw

• Member Cooperatives WR.ttot* Posse Piant N Gas 23 MW 24 MW llydrofby contrxt: 50MW $4 MW Mamares ..pmuman N MW * $ M*

KV 96 mdes 138 CIV _. 46$ mdes 69KV. 1191Ejb 2.192 m&$

MembrCooperatives 19 Muna;spalinterchangc Catomert 7 y .

Ultmete Consurnert 196AX)

• i ., -;

Countes 5ctved 57 L.

. Electric Power

! TrammissionSystem Generatbn Mants 4

i 345 KVTransmission Lines i i - 138 KV Trammission Lines $ N.".'b,,a.f.

u 4.na,,

\

69 KV Transmission Lines

,ga spana,o.,na

r l

l The Brazos System Brazos Electric Power Cooperative, Inc.

2404 LaSalle, P.O. Box 62%, Waco, Texas 76706 (817) 752-2501

g. '