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{{#Wiki_filter:9 Omaha Public Power DistrictFort Calhoun StationDecommissioning ExternalTrust FundFinancial Statements as of and for theYears Ended June 30, 2014 and 2013, andIndependent Auditors' Report OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDTABLE OF CONTENTSPageINDEPENDENT AUDITORS' REPORT 1-2MANAGEMENT'S DISCUSSION AND ANALYSIS -(UNAUDITED)FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 3-4FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDEDJUNE 30, 2014 AND 2013Statements of Net Position 5Statements of Revenues, -Expenses and Changes in Net Position 6Notes to Financial Statements 7-9OTHER SUPPLEMENTARY INFORMATION 10Certification of Payments from the Fund Pursuant to Sections 5 and 6 of the Fort Calhoun StationDecommissioning Funding Plan for the Years Ended June 30, 2014 and 2013 11 D e lo itte .Deloitte & Touche LLPFirst National Tower1601 Dodge Street, Ste. 3100Omaha, NE 68102-1649USATel: +1 402 346 7788Fax: +1 402 997 7875www-deloitte-comINDEPENDENT AUDITORS' REPORTBoard of DirectorsOmaha Public Power DistrictOmaha, NebraskaWe have audited the accompanying financial statements of the Omaha Public Power District FortCalhoun Station Decommissioning External Trust Fund (the "Fund"), which comprise the statements ofnet position as of June 30, 2014 and 2013, and the related statements of revenues, expenses and changesin net position for the years then ended, and the related notes to the financial statements.Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.Auditors' ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. Weconducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the Fund's preparationand fair presentation of the financial statements in order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund'sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.Member ofDeloitte Touche Tohmatsu Limited OpinionIn our opinion, such financial statements referred to above present fairly, in all material respects, the netposition of the Omaha Public Power District Fort Calhoun Station Decommissioning External Trust Fundas of June 30, 2014 and 2013, and the revenues, expenses and changes in net position for the years thenended in conformity with accounting principles generally accepted in the United States of America.Required Supplementary InformationAccounting principles generally accepted in the United States of America require that the-management'sdiscussion and analysis on pages 3-5 be presented to supplement the basic financial statements. Suchinformation, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board who considers it to be an essential part of financial reporting for placing thebasic financial statements in an appropriate operational, economic, or historical context. We have appliedcertain limited procedures to the required supplementary information in accordance with auditingstandards generally accepted in the United States of America, which consisted of inquiries ofmanagement about the methods of preparing the information and comparing the information forconsistency with management's responses to our inquiries, the basic financial statements, and otherknowledge we obtained during our audits of the basic financial statements. We do not express an opinionor provide any assurance on the information because the limited procedures do not provide us withsufficient evidence to express an opinion or provide any assurance.Report on Other Supplementary InformationOur audits were conducted for the purpose of forming an opinion on the financial statements as a whole.The certification of payments from the Fund pursuant to Sections 5 and 6 of the Fort Calhoun StationDecommissioning Funding Plan on page 11 is presented for the purpose of additional analysis and is not arequired part of the financial statements. This supplementary information is the responsibility of theOmaha Public Power District's management and was derived from and directly relates to the underlyingaccounting and other records used to prepare the financial statements. Such information has beensubjected to the auditing procedures applied in our audits of the financial statements and certainadditional procedures, including comparing and reconciling such information directly to the underlyingaccounting and other records used to prepare the financial statements themselves, and other additionalprocedures in accordance with auditing standards generally accepted- in the United States of America. Inour opinion, such information is fairly stated in all material respects in relation to the financial statementsas a whole.September 30, 20142-OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDMANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)FOR THE YEARS ENDED JUNE 30, 2014 AND 2013OverviewThe Fort Calhoun Station (the "Station" or "FCS") is a pressurized water reactor nuclear plant. The Station isowned by the Omaha Public Power District ("OPPD") and was placed in commercial operation in September1973. It is located on the west bank of the Missouri River approximately 20 miles north of the City of Omahain the vicinity of Fort Calhoun, Nebraska. The Nuclear Regulatory Commission ("NRC") issued a renewedoperating license for the Station in November 2003 that enables the plant to continue operating until 2033.In February 1983, OPPD's Board of Directors authorized a plan for the decommissioning of the Station at theend of its operating license. The plan called for the allocation of the cost of decommissioning during theStation's life to the customers receiving the benefits. Accordingly, OPPD began funding for the Station inJuly 1983.In 1990, pursuant to NRC regulations, OPPD established an external trust fund based upon the NRC'sminimum funding requirements. To ensure that additional funds are available to pay decommissioning costs,a supplemental trust fund was established in 1992 ("1992 Fund"). The funds in the 1992 Fund are in excess ofthe NRC's minimum funding requirements and are not included in these audited financial statements. The netposition restricted for decommissioning costs in the 1992 Fund was $85.3 million and $80.7 million as ofJune 30, 2014 and 2013, respectively.FCS was taken out of service for normal refueling outage in April 2011. Outage activities were suspended inJune 2011 to protect facilities from rising river levels caused by the release of record amounts of water fromdams along the Missouri River by the U.S. Army Corps of Engineers. The NRC placed FCS into a specialcategory of their inspection manual, Chapter 0350, in December 2011. This Chapter is for nuclear powerplants that are in extended shutdowns with performance issues. OPPD contracts with Exelon GenerationCompany, LLC, the largest operator of nuclear stations in the United States, for operational and managerialsupport services. FCS resumed operations on December 21, 2013, after satisfactorily completing NRCrequirements and inspections.The unaudited Management's Discussion and Analysis should be read in conjunction with. the financialstatements and related notes. This document contains forward-looking statements based on OPPD's currentplans.Financial Position and Results of OperationsThe following were the Net Positions of the Omaha Public Power District Fort Calhoun StationDecommissioning External Trust Fund (the "Fund") at June 30 (dollar amounts in thousands):2014 2013Net position -restricted for decommissioning costs $272,532 $263,152 The following were the revenues of the Fund for the years ended June 30 (dollar amounts in thousands).2014 2013Investment income $ 5,429 $ 5,229Increase/(decrease) in fair value of investments 3,951 (5,028)Total revenues $ 9,380 $ 2012014 Compared to 2013Total revenues were $9.4 million for the twelve-month period ended June 30, 2014, with $5.4 million frominvestment income and $4.0 million from an overall increase in fair value of investments due to favorablemarket conditions. Total revenues were $0.2 million for the twelve-month period ended June 30, 2013, with$5.2 million from investment income and $5.0 million from an overall decrease in the fair value ofinvestments due to unfavorable market conditions.Funding PolicyOPPD annually reviews the funding requirements and cost projections for decommissioning activities. Costprojections are based on NRC formulas and indices and an independent engineering firm's estimates.Earnings rate projections are based on a composite of the forecasted yield on 5-year Treasury Notes and theactual yields on OPPD's Decommissioning Fund. Inflation rate projections are based on forecasts for theconsumer price index. All investment income earned is reinvested in the decommissioning fund.The present value of the minimum decommissioning amount ("MDA") required by the NRC was estimated at$441.0 million as of June 30, 2014. Given current escalation indices and projected earnings rates, the balanceof OPPD's Fort Calhoun Station Decommissioning External Trust Fund and the present value of futureearnings in this Fund are estimated to exceed the MDA, partly due to the Station's 20-year license extension.Accordingly, no funding was required for the fiscal years presented. The amount deemed in excess of theMDA will remain in the Fund to cover possible changes in escalation indices and projected earnings rates.Based on the 2014 cost estimate update and funding analysis, $7.7 million in additional funding will be madein 2015 to the 1992 Fund because of an increase in the estimated decommissioning costs and a decrease inexpected investment earnings due to lower rates of return on investments.Summary of the Financial StatementsThe financial statements, related notes, and Management's Discussion and Analysis provide informationabout the Fort Calhoun Station Decommissioning External Trust Fund's financial position and activities. TheStatements of Net Position present the Fund's net assets as of June 30, 2014 and 2013. The Statements ofRevenues, Expenses and Changes in Net Position present the Fund's revenues and expenditures for the yearsended June 30, 2014 and 2013. The Notes to Financial Statements provide additional detailed information.The basic financial statements, notes, and Management's Discussion and Analysis are designed to provide ageneral overview of the Fund's finances. Questions concerning any of the information provided in this reportshould be directed to Investor Relations, 402-636-3286. | |||
OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDSTATEMENTS OF NET POSITIONAS OF JUNE 30, 2014 AND 2013(Dollar amounts in thousands)2014 2013ASSETS-Investments, at fair value (Note 2) $272,256 $262,890Accrued interest receivable 276 262NET POSITION -RESTRICTED FOR DECOMMISSIONING COSTS $272,532 $263,152The accompanying notes are an integral part of the financial statements. | |||
OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR THE YEARS ENDED JUNE 30, 2014 AND 2013(Dollar amounts in thousands)2014 2013REVENUESInvestment income $ 5,429 $ 5,229Increase/(decrease) in fair value of investments 3,951 (5,028)Total revenues 9,380 201EXPENSES (Note 3) _ _EXCESS OF REVENUES OVER EXPENSES 9,380 201NET POSITION -RESTRICTED FOR DECOMMISSIONING COSTSBeginning of period 263,152 262,951End of period $272,532 $263,152The accompanying notes are an integral part of the financial statements.6 OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDNOTES TO FINANCIAL STATEMENTSAS OF AND FOR THE YEARS ENDED JUNE 30, 2014 AND 20131. ORGANIZATION OF FUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESOrganization of Fund -The Omaha Public Power District Fort Calhoun Station DecommissioningExternal Trust Fund (the "Fund" or the "1990 Fund") was established in accordance with NuclearRegulatory Commission ("NRC") regulations, for the purpose of discharging the Omaha Public PowerDistrict's ("OPPD") obligation to decommission, as defined by the NRC, its Fort Calhoun Station("Station"). For 1990 and subsequent years, OPPD's Board of Directors approved the collection ofnuclear decommissioning costs based upon the NRC's external minimum funding requirements. TheNRC's requirements are based on a general estimate of the cost to decommission radioactive portions ofa nuclear unit based on the size and type of reactor.Beginning in 1993, OPPD commenced funding on the basis of new decommissioning estimates whichresulted from a 1992 independent- engineering study and which exceeded NRC external minimumfunding requirements. The resultant Fort Calhoun Station Decommissioning Supplemental ExternalTrust Fund (the "1992 Fund") was established to retain funds in excess of the NRC's minimum fundingrequirements (not included herein). In 2003, the NRC granted a 20-year extension of the operatinglicense which will allow the Station to operate until 2033. The accompanying financial statements areonly for the 1990 Fund.The present value of the total decommissioning cost estimate for the Fort Calhoun Station as of June 30,201-4 and 2013 was approximately $869.2 million and $852.0 million, respectively, of which the NRCpresent value of the minimum decommissioning amount was approximately $441.0 million and$437.0 million, respectively. OPPD will periodically review and adjust, if necessary, the funding levelfor changes in the estimated costs of decommissioning the Station.Fair Value of Financial Instruments -The Fund reports investments at fair value in accordance withGovernmental Accounting Standards Board Codification Section In5, Investment Pools (External).Investment Income -Investment income is recorded, as earned, on an accrual basis.Use of Estimates -The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.Risks and Uncertainties -The Fund utilizes various investment instruments. Investment securities, ingeneral, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due tothe level of risk associated with certain investment securities, it is reasonably possible that changes inthe values of investment securities will occur in the near term and that those changes could materiallyaffect the amounts reported in the statements of net assets available for decommissioning costs. | |||
: 2. INVESTMENTSInvestments -The Fund's investments are held by the Fund's trustee, the First National Bank ofOmaha, in the Fund's name in accordance with the trust agreement. The weighted average maturity wasbased on the fair value of individual investments and investment type. As of June 30, 2014 and 2013, theFund's investments were as follows (dollar amounts in thousands):2014 2013Weighted WeightedAverage AverageFair Maturity Fair MaturityInvestments -at fair value as determined Value (Years) Value (Years)by quoted market pricesMoney market funds $ 1,949 $ 48U.S. government securities 104,959 3.1 105,051 3.4Corporate bonds 19,283 2.0 19,189 3.0Mutual funds 76,601 71,998Investments -at fair valueCollective investment fundsJP Morgan Institutional Core Bond Trust 69,464 66,604Total $ 272,256 $ 262,890Interest Rate Risk -The Fund's investment in relatively short-term securities reduces interest raterisk, as evidenced by its portfolio weighted average maturity of 2.9 and 3.3 years at June 30, 2014 and2013, respectively.Credit Risk -The Fund's investment policy is to comply with the Nebraska state statutes forgovernmental entities, which limit investments to investment grade fixed income obligations. Themajority of the investments held-by the Fund at June 30, 2014 and 2013 were rated AAA by Standard &Poor's Ratings Services and AAA by Moody's Investors Service.3. EXPENSES ON BEHALF OF THE FUNDTrustee fees of $32,000 were paid on behalf of the Fund by the Omaha Public Power District for each ofthe years ended June 30, 2014 and 2013.4. NUCLEAR REGULATORY COMMISSION OVERSIGHTThe NRC placed the Station into a special category of their inspection manual, Chapter 0350, inDecember 2011. This Chapter is for nuclear plants in extended shutdowns with performance issues. Theextended shutdown had no impact on the Fund. | |||
In August 2012, the Board of Directors authorized management to enter into a long-term operatingservice agreement with Exelon Generation, LLC (Exelon) to provide operating and management supportat FCS for 20 years. OPPD remains the owner and licensed operator of the station, while Exelon has theday-to-day operational authority at FCS, subject to oversight, and decision-making authority of OPPDfor licensed activities. The Exelon Nuclear Management Model is being used to improve and sustainperformance at FCS. This agreement has no impact on the Fund. Operations resumed in December 2013.-9 OTHER SUPPLEMENTARY INFORMATION OTHER SUPPLEMENTARY INFORMATIONCERTIFICATION OF PAYMENTS FROM THE FUNDPURSUANT TO SECTIONS 5 AND 6 OF THE FORT CALHOUN STATIONDECOMMISSIONING FUNDING PLANFOR THE YEARS ENDED JUNE 30, 2014 AND 2013No such payments were iiade during the years ended June 30, 2014 and 2013. | |||
Member ofDeloitte Touche Tohmatsu Limitedw}} |
Revision as of 17:48, 16 June 2018
ML14325A650 | |
Person / Time | |
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Site: | Fort Calhoun ![]() |
Issue date: | 11/07/2014 |
From: | Deloitte & Touche |
To: | Office of Nuclear Material Safety and Safeguards |
Shared Package | |
ML14325A643 | List: |
References | |
LIC-14-0130 | |
Download: ML14325A650 (15) | |
Text
9 Omaha Public Power DistrictFort Calhoun StationDecommissioning ExternalTrust FundFinancial Statements as of and for theYears Ended June 30, 2014 and 2013, andIndependent Auditors' Report OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDTABLE OF CONTENTSPageINDEPENDENT AUDITORS' REPORT 1-2MANAGEMENT'S DISCUSSION AND ANALYSIS -(UNAUDITED)FOR THE YEARS ENDED JUNE 30, 2014 AND 2013 3-4FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDEDJUNE 30, 2014 AND 2013Statements of Net Position 5Statements of Revenues, -Expenses and Changes in Net Position 6Notes to Financial Statements 7-9OTHER SUPPLEMENTARY INFORMATION 10Certification of Payments from the Fund Pursuant to Sections 5 and 6 of the Fort Calhoun StationDecommissioning Funding Plan for the Years Ended June 30, 2014 and 2013 11 D e lo itte .Deloitte & Touche LLPFirst National Tower1601 Dodge Street, Ste. 3100Omaha, NE 68102-1649USATel: +1 402 346 7788Fax: +1 402 997 7875www-deloitte-comINDEPENDENT AUDITORS' REPORTBoard of DirectorsOmaha Public Power DistrictOmaha, NebraskaWe have audited the accompanying financial statements of the Omaha Public Power District FortCalhoun Station Decommissioning External Trust Fund (the "Fund"), which comprise the statements ofnet position as of June 30, 2014 and 2013, and the related statements of revenues, expenses and changesin net position for the years then ended, and the related notes to the financial statements.Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.Auditors' ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. Weconducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor's judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud or error.In making those risk assessments, the auditor considers internal control relevant to the Fund's preparationand fair presentation of the financial statements in order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund'sinternal control. Accordingly, we express no such opinion. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of significant accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.Member ofDeloitte Touche Tohmatsu Limited OpinionIn our opinion, such financial statements referred to above present fairly, in all material respects, the netposition of the Omaha Public Power District Fort Calhoun Station Decommissioning External Trust Fundas of June 30, 2014 and 2013, and the revenues, expenses and changes in net position for the years thenended in conformity with accounting principles generally accepted in the United States of America.Required Supplementary InformationAccounting principles generally accepted in the United States of America require that the-management'sdiscussion and analysis on pages 3-5 be presented to supplement the basic financial statements. Suchinformation, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board who considers it to be an essential part of financial reporting for placing thebasic financial statements in an appropriate operational, economic, or historical context. We have appliedcertain limited procedures to the required supplementary information in accordance with auditingstandards generally accepted in the United States of America, which consisted of inquiries ofmanagement about the methods of preparing the information and comparing the information forconsistency with management's responses to our inquiries, the basic financial statements, and otherknowledge we obtained during our audits of the basic financial statements. We do not express an opinionor provide any assurance on the information because the limited procedures do not provide us withsufficient evidence to express an opinion or provide any assurance.Report on Other Supplementary InformationOur audits were conducted for the purpose of forming an opinion on the financial statements as a whole.The certification of payments from the Fund pursuant to Sections 5 and 6 of the Fort Calhoun StationDecommissioning Funding Plan on page 11 is presented for the purpose of additional analysis and is not arequired part of the financial statements. This supplementary information is the responsibility of theOmaha Public Power District's management and was derived from and directly relates to the underlyingaccounting and other records used to prepare the financial statements. Such information has beensubjected to the auditing procedures applied in our audits of the financial statements and certainadditional procedures, including comparing and reconciling such information directly to the underlyingaccounting and other records used to prepare the financial statements themselves, and other additionalprocedures in accordance with auditing standards generally accepted- in the United States of America. Inour opinion, such information is fairly stated in all material respects in relation to the financial statementsas a whole.September 30, 20142-OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDMANAGEMENT'S DISCUSSION AND ANALYSIS (UNAUDITED)FOR THE YEARS ENDED JUNE 30, 2014 AND 2013OverviewThe Fort Calhoun Station (the "Station" or "FCS") is a pressurized water reactor nuclear plant. The Station isowned by the Omaha Public Power District ("OPPD") and was placed in commercial operation in September1973. It is located on the west bank of the Missouri River approximately 20 miles north of the City of Omahain the vicinity of Fort Calhoun, Nebraska. The Nuclear Regulatory Commission ("NRC") issued a renewedoperating license for the Station in November 2003 that enables the plant to continue operating until 2033.In February 1983, OPPD's Board of Directors authorized a plan for the decommissioning of the Station at theend of its operating license. The plan called for the allocation of the cost of decommissioning during theStation's life to the customers receiving the benefits. Accordingly, OPPD began funding for the Station inJuly 1983.In 1990, pursuant to NRC regulations, OPPD established an external trust fund based upon the NRC'sminimum funding requirements. To ensure that additional funds are available to pay decommissioning costs,a supplemental trust fund was established in 1992 ("1992 Fund"). The funds in the 1992 Fund are in excess ofthe NRC's minimum funding requirements and are not included in these audited financial statements. The netposition restricted for decommissioning costs in the 1992 Fund was $85.3 million and $80.7 million as ofJune 30, 2014 and 2013, respectively.FCS was taken out of service for normal refueling outage in April 2011. Outage activities were suspended inJune 2011 to protect facilities from rising river levels caused by the release of record amounts of water fromdams along the Missouri River by the U.S. Army Corps of Engineers. The NRC placed FCS into a specialcategory of their inspection manual, Chapter 0350, in December 2011. This Chapter is for nuclear powerplants that are in extended shutdowns with performance issues. OPPD contracts with Exelon GenerationCompany, LLC, the largest operator of nuclear stations in the United States, for operational and managerialsupport services. FCS resumed operations on December 21, 2013, after satisfactorily completing NRCrequirements and inspections.The unaudited Management's Discussion and Analysis should be read in conjunction with. the financialstatements and related notes. This document contains forward-looking statements based on OPPD's currentplans.Financial Position and Results of OperationsThe following were the Net Positions of the Omaha Public Power District Fort Calhoun StationDecommissioning External Trust Fund (the "Fund") at June 30 (dollar amounts in thousands):2014 2013Net position -restricted for decommissioning costs $272,532 $263,152 The following were the revenues of the Fund for the years ended June 30 (dollar amounts in thousands).2014 2013Investment income $ 5,429 $ 5,229Increase/(decrease) in fair value of investments 3,951 (5,028)Total revenues $ 9,380 $ 2012014 Compared to 2013Total revenues were $9.4 million for the twelve-month period ended June 30, 2014, with $5.4 million frominvestment income and $4.0 million from an overall increase in fair value of investments due to favorablemarket conditions. Total revenues were $0.2 million for the twelve-month period ended June 30, 2013, with$5.2 million from investment income and $5.0 million from an overall decrease in the fair value ofinvestments due to unfavorable market conditions.Funding PolicyOPPD annually reviews the funding requirements and cost projections for decommissioning activities. Costprojections are based on NRC formulas and indices and an independent engineering firm's estimates.Earnings rate projections are based on a composite of the forecasted yield on 5-year Treasury Notes and theactual yields on OPPD's Decommissioning Fund. Inflation rate projections are based on forecasts for theconsumer price index. All investment income earned is reinvested in the decommissioning fund.The present value of the minimum decommissioning amount ("MDA") required by the NRC was estimated at$441.0 million as of June 30, 2014. Given current escalation indices and projected earnings rates, the balanceof OPPD's Fort Calhoun Station Decommissioning External Trust Fund and the present value of futureearnings in this Fund are estimated to exceed the MDA, partly due to the Station's 20-year license extension.Accordingly, no funding was required for the fiscal years presented. The amount deemed in excess of theMDA will remain in the Fund to cover possible changes in escalation indices and projected earnings rates.Based on the 2014 cost estimate update and funding analysis, $7.7 million in additional funding will be madein 2015 to the 1992 Fund because of an increase in the estimated decommissioning costs and a decrease inexpected investment earnings due to lower rates of return on investments.Summary of the Financial StatementsThe financial statements, related notes, and Management's Discussion and Analysis provide informationabout the Fort Calhoun Station Decommissioning External Trust Fund's financial position and activities. TheStatements of Net Position present the Fund's net assets as of June 30, 2014 and 2013. The Statements ofRevenues, Expenses and Changes in Net Position present the Fund's revenues and expenditures for the yearsended June 30, 2014 and 2013. The Notes to Financial Statements provide additional detailed information.The basic financial statements, notes, and Management's Discussion and Analysis are designed to provide ageneral overview of the Fund's finances. Questions concerning any of the information provided in this reportshould be directed to Investor Relations, 402-636-3286.
OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDSTATEMENTS OF NET POSITIONAS OF JUNE 30, 2014 AND 2013(Dollar amounts in thousands)2014 2013ASSETS-Investments, at fair value (Note 2) $272,256 $262,890Accrued interest receivable 276 262NET POSITION -RESTRICTED FOR DECOMMISSIONING COSTS $272,532 $263,152The accompanying notes are an integral part of the financial statements.
OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDSTATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONFOR THE YEARS ENDED JUNE 30, 2014 AND 2013(Dollar amounts in thousands)2014 2013REVENUESInvestment income $ 5,429 $ 5,229Increase/(decrease) in fair value of investments 3,951 (5,028)Total revenues 9,380 201EXPENSES (Note 3) _ _EXCESS OF REVENUES OVER EXPENSES 9,380 201NET POSITION -RESTRICTED FOR DECOMMISSIONING COSTSBeginning of period 263,152 262,951End of period $272,532 $263,152The accompanying notes are an integral part of the financial statements.6 OMAHA PUBLIC POWER DISTRICTFORT CALHOUN STATIONDECOMMISSIONING EXTERNAL TRUST FUNDNOTES TO FINANCIAL STATEMENTSAS OF AND FOR THE YEARS ENDED JUNE 30, 2014 AND 20131. ORGANIZATION OF FUND AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESOrganization of Fund -The Omaha Public Power District Fort Calhoun Station DecommissioningExternal Trust Fund (the "Fund" or the "1990 Fund") was established in accordance with NuclearRegulatory Commission ("NRC") regulations, for the purpose of discharging the Omaha Public PowerDistrict's ("OPPD") obligation to decommission, as defined by the NRC, its Fort Calhoun Station("Station"). For 1990 and subsequent years, OPPD's Board of Directors approved the collection ofnuclear decommissioning costs based upon the NRC's external minimum funding requirements. TheNRC's requirements are based on a general estimate of the cost to decommission radioactive portions ofa nuclear unit based on the size and type of reactor.Beginning in 1993, OPPD commenced funding on the basis of new decommissioning estimates whichresulted from a 1992 independent- engineering study and which exceeded NRC external minimumfunding requirements. The resultant Fort Calhoun Station Decommissioning Supplemental ExternalTrust Fund (the "1992 Fund") was established to retain funds in excess of the NRC's minimum fundingrequirements (not included herein). In 2003, the NRC granted a 20-year extension of the operatinglicense which will allow the Station to operate until 2033. The accompanying financial statements areonly for the 1990 Fund.The present value of the total decommissioning cost estimate for the Fort Calhoun Station as of June 30,201-4 and 2013 was approximately $869.2 million and $852.0 million, respectively, of which the NRCpresent value of the minimum decommissioning amount was approximately $441.0 million and$437.0 million, respectively. OPPD will periodically review and adjust, if necessary, the funding levelfor changes in the estimated costs of decommissioning the Station.Fair Value of Financial Instruments -The Fund reports investments at fair value in accordance withGovernmental Accounting Standards Board Codification Section In5, Investment Pools (External).Investment Income -Investment income is recorded, as earned, on an accrual basis.Use of Estimates -The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates.Risks and Uncertainties -The Fund utilizes various investment instruments. Investment securities, ingeneral, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due tothe level of risk associated with certain investment securities, it is reasonably possible that changes inthe values of investment securities will occur in the near term and that those changes could materiallyaffect the amounts reported in the statements of net assets available for decommissioning costs.
- 2. INVESTMENTSInvestments -The Fund's investments are held by the Fund's trustee, the First National Bank ofOmaha, in the Fund's name in accordance with the trust agreement. The weighted average maturity wasbased on the fair value of individual investments and investment type. As of June 30, 2014 and 2013, theFund's investments were as follows (dollar amounts in thousands):2014 2013Weighted WeightedAverage AverageFair Maturity Fair MaturityInvestments -at fair value as determined Value (Years) Value (Years)by quoted market pricesMoney market funds $ 1,949 $ 48U.S. government securities 104,959 3.1 105,051 3.4Corporate bonds 19,283 2.0 19,189 3.0Mutual funds 76,601 71,998Investments -at fair valueCollective investment fundsJP Morgan Institutional Core Bond Trust 69,464 66,604Total $ 272,256 $ 262,890Interest Rate Risk -The Fund's investment in relatively short-term securities reduces interest raterisk, as evidenced by its portfolio weighted average maturity of 2.9 and 3.3 years at June 30, 2014 and2013, respectively.Credit Risk -The Fund's investment policy is to comply with the Nebraska state statutes forgovernmental entities, which limit investments to investment grade fixed income obligations. Themajority of the investments held-by the Fund at June 30, 2014 and 2013 were rated AAA by Standard &Poor's Ratings Services and AAA by Moody's Investors Service.3. EXPENSES ON BEHALF OF THE FUNDTrustee fees of $32,000 were paid on behalf of the Fund by the Omaha Public Power District for each ofthe years ended June 30, 2014 and 2013.4. NUCLEAR REGULATORY COMMISSION OVERSIGHTThe NRC placed the Station into a special category of their inspection manual, Chapter 0350, inDecember 2011. This Chapter is for nuclear plants in extended shutdowns with performance issues. Theextended shutdown had no impact on the Fund.
In August 2012, the Board of Directors authorized management to enter into a long-term operatingservice agreement with Exelon Generation, LLC (Exelon) to provide operating and management supportat FCS for 20 years. OPPD remains the owner and licensed operator of the station, while Exelon has theday-to-day operational authority at FCS, subject to oversight, and decision-making authority of OPPDfor licensed activities. The Exelon Nuclear Management Model is being used to improve and sustainperformance at FCS. This agreement has no impact on the Fund. Operations resumed in December 2013.-9 OTHER SUPPLEMENTARY INFORMATION OTHER SUPPLEMENTARY INFORMATIONCERTIFICATION OF PAYMENTS FROM THE FUNDPURSUANT TO SECTIONS 5 AND 6 OF THE FORT CALHOUN STATIONDECOMMISSIONING FUNDING PLANFOR THE YEARS ENDED JUNE 30, 2014 AND 2013No such payments were iiade during the years ended June 30, 2014 and 2013.
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