ML18192B802
| ML18192B802 | |
| Person / Time | |
|---|---|
| Site: | Palo Verde  |
| Issue date: | 07/11/2018 |
| From: | Salt River Project |
| To: | US Atomic Energy Commission (AEC) |
| References | |
| Download: ML18192B802 (28) | |
Text
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page Highlights 4, background. 1 Letter from management.
Review of the year..
Financial section.. .... .... .... .. 1 1 Statistical review.. .20and 21 Board and Council members. 23 and 24 Project service area, watershed-map... .... inside back cover
OPERATIONS 1974 1973 Assessed water accounts. 161,596 157,578 Water runoff (acre-feet). 441,582 2,514,341 Water storage, year-end (acre-feet) .... 1,054,710 1,498,629 Water diverted into canals and pumped (acre-feet). 1,238,484 1,471,580 Number of power customers 239,431 , 225,921 Average annual use per residential customer (kwh). 12,808 13,182 Average annual kwh cost per residential customer (cents). 2.62 2.23 Energy generated, purchased, interchanged and wheeled (kwh) ... 8,872,601,000 7,583,538,900 Peak load for Project customers (kw). 1,645,000 1,448,000 REVENUES Electric. $ 166,971,981 $ 128,334,924 Water and irrigation. 2,613,184 1,578,819 Total operating revenues $ 169,585,165 $ 129,913,743 Taxes and tax equivalents. $ 18,948,704 $ 12,691,099 Total operating expenses. 148,957,645 105,486,982 Net revenues. 8,858,430 17,459,416 Plant investment, year-end 830,591,704 662,055,948 Long-term debt 637,227,196 464,745,966 BACKGROUND The Salt River Project, the first multi-purpose project authorized under the Federal Reclamation Act of 1902, is comprised of the Salt River Project Agricultural Improvement and Power District and the Salt River Valley Water Users'ssociation.
The District is an agricultural improvement district organized under the laws of the State of Arizona. It operates the Salt River Project under contracts with the United States of America, and provides electric service to residential, commercial, industrial and agricultural power users in a 2,900 square-mile service territory in parts of Maricopa, Gila and Pinal counties.
The Association, a private Arizona corporation, encourages and participates in the management of the 13,000 square-mile watershed of the Salt and Verde rivers, in cooperation with the U.S. Forest Service. The Association administers water rights of the Project's 250,000 acre area, and operates and maintains the irrigation transmission and distribution system which provides Project water for agricultural, municipal and industrial uses.
Following the long-standing reclamation principle, the Project uses electric revenues to support its water and irrigation operations, thereby keeping water delivery charges at reasonable levels. At the same time, the Project maintains competitive rates for the electric service it provides.
The year 1974 was not a particularly healthy one economically for the nation or the utility industry. But at the Salt River Project it was a successful year due in large part to an intensive cost-cutting program. The program unfortunately included the first large-scale layoff in the Project's history, a reduction in desirable but nonessential services and cuts in capital, operating and maintenance expenditures.
For 1974, operating revenues totaled $ 169,585,165 and net revenues reached $ 8.8 million.
Also during the year, the Project retained its high rating on bonds and sold $ 180 million in electrical revenue bonds to help finance electric system construction improvements. The sale brought the long-term debt to $ 637.2 million. Total plant value at year-end reached $ 831 million.
The number of electric customers continued to grow during the year but at a slower pace than in 1973, increasing from 225,921 to 239,431 during 1974; SRP planners expect the number to climb to 249,212 during 1975 and 338,838 by 1980.
Total demand for water remained relatively constant but the cities'emand for water increased from 152,626 acre-feet in 1973 to 160,342 acre-feet in 1974.
This is a summary of 1974. It was a hard and complex year, but still successful. EVe remain confident that the Project's stability and financial integrity will continue in the future.
Rod J. hlchkullin, General hlanager; Karl F. Abel, President; John R. Lassen, Vice President
near St. Johns. This coal-fired station, which is utilize one of the West's most abundant and econom-expected to cost $ 991 million, is scheduled to have ical energy sources.
three 350,000 kw units. The first unit is scheduled to For the same reasons, the SRP is also turning to begin commercial production in 1979 and the second unit a year later. The schedule for the third unit has nuclear energy for the production of electricity.
Together, nuclear power and coal will produce
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not been finalized. majority of power for SRP customers during the The Secretary of the Interior authorized studies 1980's and 1990's.
and independent analysis of the environmental impact statement for Kaiparowits Generating Station in southern Utah during 1974. The Project is a 10 RESEARCH AND DEVELOPMENT-percent participant in this three million kilowatt, SEARCHING FOR NEW SOLUTIONS coal-fired station. The first of the station's four units During the year, the Project continued to con-is scheduled to begin operation in 1981. tribute to utility research and development in two The environmental report and preliminary safety principal areas: the search for new sources of energy analysis report for Arizona's first nuclear generating and efforts to make present generating systems more station were filed in 1974. The Project is participating environmentally acceptable. During 1974, SRP in the construction of Palo Verde Generating Station invested $ 2,371,129 towards these programs; in where three 1,270,000 kw pressurized water nuclear addition, $ 1.3 million was spent for environmental reactor units are to be built. Palo Verde, located near impact studies.
Wintersburg, Arizona, will produce power from the The Project made a third contribution of $ 108,023 first unit in May 1982; the second and third units are towards fulfilling a pledge of $ 1.08 million for scheduled to be on line in May 1984 and 1986. development of the first liquid metal fast breeder reactor demonstration plant in the United States.
The Project contributed $ 77,750 to support the COAL, A MAJOR SOURCE OF ENERGY research and development projects of the American By the 1980's, 80 percent of the energy delivered Public Power Association (APPA) and the Electric to Project customers will come from coal-fired Power Research Institute (EPRI). Studies are being generating units, compared to 39 percent during made in the areas of solar, geothermal and nuclear 1974. This switch to coal is being made because of its energy as well as in advanced transmission and availability and cost. distribution systems.
Natural gas became so scarce in 1974 that it SRP also supported the efforts of the Western supplied only 13 percent of the Project's fuel Energy Supply Transmission (WEST) Associates. This requirements; in 1975 it will supply only four percent investment, which was for $ 10,028, went to the of those requirements. By 1976, it will be unavailable development of environmental technology. The as boiler fuel. studies of WEST are coordinated with those of APPA The cost of the replacement fuel, oil, nearly and EPRI.
doubled during 1974. At the end of 1973, oil costs As a participant in the Navajo and the proposed were between $ 7 and $ 8 per barrel, including delivery Kaiparowits generating stations, the Project paid charges. By the end of 1974, the average cost per $ 41,807 to Northern Arizona University and Brigham barrel was $ 13.65. Young University for continuing environmental And, although the SRP had adequate quantities of studies in the area of the two generating stations.
oil to meet 1974 generating requirements, potential Environmental studies were also conducted at the shortages exist for future years, particularly if new Coronado Generating Station at a cost of $ 1.3 oil-fired units are constructed. Hence the emphasis on million.
development of coal-fired generating stations, which As a participant in the Navajo and Mohave power projects, the SRP paid $ 2.01 million in 1974 toward the development and testing of sulfur dioxide re-moval equipment for generating stations which burn PROJECT FUEL SOURCES low sulfur coal. Some $ 30 million has been spent on Misc. this project to date by the participants. The research Hydro~ Gas Oil Coal Purchase includes the construction and operation of two 1974 19% 12% 19% 39% 1 1% full-scale test modules at the Mohave Station. One of 1975 11 4 29 50 6 the modules is to be moved in early 1975 to the Four 1976 10 31 59 Corners Generating Station in northwest New Mexico 1977 9 27 63 1 for further testing.
1978 8 19 72 1 Other research and development programs were 1979 8 -- =16 76 significant but required less funding. These included:
1980 7 13 80 support of geothermal-exploration by SRP and other
Accomplishment was the keynote of 1974 for the conventional combustion turbines now in use. Cost of Salt River Project. Some of the more significant the four units is projected to be $ 57.5 million.
achievements, which are documented in this report, Two new combustion turbine generators were were: the production of commercial power from the installed at Agua Fria Generating Station in 1974 at a first unit of the Navajo Generating Station; start-up cost of $ 13,873,000. These units can supply a total of the Santan Generating Station; siting approval for of 124,000 kw of peaking power. Four other com-the Coronado Generating Station; completion of bustion turbines with a total capacity of 238,800 kw supervisory control facilities for the water trans- are located at the Kyrene Generating Station. An mission system; and net revenues of $ 8.8 million additional 62,000 kw unit is under construction at earned despite economic adversity.
At the $ 647 million Navajo Generating Station near Page, Arizona, the first 750,000 kilowatt (kw) generating unit began commercial operation on schedule in May. The second unit produced first power on December 2, 47 days ahead of schedule.
Commercial operation of the second unit began in early April, 1975, rather than at the end of May as originally scheduled. During the test period of the coal-fired unit, electricity produced saved SRP "l II 425,000 barrels of oil which would be burned at another generating station to produce power for tb project customers.
At year-end, the third unit was 45 days ahead of schedule and is expected to be ready for commercial K.Z.
operation in April, 1976.
When the three units at the station are completed, Navajo will have a capacity of 2.25 million kw. Salt River Project, which is construction manager and C operating agent, owns 21.7 percent of the station's capacity. The Project received another 11.3 percent of the first unit's capacity in 1974 through the Three 75,000 kw combined cycle units began operation during 1974 at Santan Generating Sration. A fourth unit went into operation early in purchase of portions of the U.S. Bureau of Reclama- 1975 at thc low-profile station.
tion's entitlement, which will not be needed until the Central Arizona Project is completed. Agua Fria and is expected to produce power in 1975.
The Project, in participation with Colorado-Ute Electric Association, Inc., is building a second coal-fired unit at the Hayden Generating Station, at POWER PRODUCED AT Hayden, Colorado. The 250,000 kw unit is scheduled SANTAN GENERATING STATION for completion in 1976. The Project will initially Three 75,000 kw combined cycle units came on receive 80 percent, or 200,000 kw, of the $ 116.5 line during 1974 at the Santan Generating Station million unit's output with the amount diminishing to near Gilbert, Arizona. A fourth unit is scheduled for 125,000 kw in 1982.
completion in 1975. These combined cycle generators Ground breaking took place in 1974 for the Craig are comprised of a combustion turbine and a steam Generating Station at Craig, in northwest Colorado.
turbine on a common shaft. The heat from the The Project will own 29 percent of the station, and oil-fired combustion turbine, which is usually lost receive 110,000 kw from each of the two 380,000 kw into the atmosphere, is used to produce the steam for generating units. The units are scheduled to begin the second turbine. Each unit generates 52,000 kw operation in 1978 and 1979.
from the combustion turbine and 23,000 kw from During 1974, the environmental impact statement the steam turbine. These units have an efficiency was filed and siting was approved for SRP's wholly rating of approximately 60 percent higher than owned 1,050,000 kw Coronado Generating Station
CUSTOMER GROWTH BELOW PROJECTIONS were reductions in construction and maintenance The total number of electric customers increased planned for the canal and lateral systems; postpone-13,510 during 1974, however the increase was 26 ment of construction of various electrical trans-percent below projections due to the sagging Valley economy. Customers at year end totaled 239,431, mission lines; placing a freeze on all new hiring; eliminating 117 positions which included 55 em-
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short of the 242,938 that had been predicted in 1973, ployes laid off; and paring expenses such as postage, but 6 percent more than total customers in 1973. travel, transportation and office equipment.
The additional customers, coupled with 7 days In addition, all departments were directed to with temperatures over 115'nd 18 days over reduce operating and maintenance expenses by 10 the early summer, caused peak demand to reach 110'uring percent; most overtime was eliminated, except in a new high of 1,645,000 kw on June 27, at 6 p.m., cases of service emergencies; and the Project began compared with the peak of 1973 of 1,448,000 kw. reevaluating policies and practices including electric Also this year, electric sales to customers totaled generation and expansion needs, rate structure for 7.6 billion kwh compared to 6.9 billion kwh in 1973. both water and power, and the level of service to However, due to mild winter conditions and conser- customers.
vation efforts on the part of customers, the average Some desirable but nonessential services to cus-residential. usage decreased to 12,808 kwh from tomers were eliminated, reduced or modified. These 13,182 kwh in 1973. included: elimination of the budget billing plan; During the year, the reliability of electric service to suspension of the publication of PROJECTION, a Project customers was 99.98 percent. quarterly magazine for electric customers; initiation of a new schedule of charges for the services of the Agriculture Division; and an increase in charges for EFFECTIVE ENERGY USE PROMOTED the Project's appliance repair service.
Marketing programs continued to advise con-sumers, architects, engineers, equipment dealers and builders of ways to use electricity more effectively. FUEL COSTS Avcragc, pcr milton BTU Messages advocated avoiding energy waste, shifting load to reduce peak and utilizing efficient appliances 1970 1972 such as the heat pump for space heating. Off-peak load building efforts continued, primarily through Oil Gas
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$ .72
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$ .94
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$ 1.04
.53 1974
$ 2.17
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promotion of security lighting and heat pumps. Coal .15 .17 .19 .21 .22 ECONOMY FORCES RATE INCREASE, BUDGET CUTS Fuel costs were another strain on economic plan-Inflationary pressures caused SRP to increase water ning. Oil prices more than doubled and availability of charges by 12 percent and raise electric rates seven low-cost natural gas essentially disappeared.
percent in 1974. But even these higher rates and Due to the fluctuating prices for fuel, the Project's record electric sales during the year could not keep fuel cost adjustment factor changed twice during up with the rising costs faced by the Project. 1974. In May, the factor was lowered from 3.91 to Project, taxes charged to expenses for 1974 were 3.62 mills per kilowatt-hour of electricity used. This
$ 18.9 million with an additional $ 2.5 million de- change reflected the higher percentage of the
,ferred to future periods. This is a total of $ 21.4 Project's power being produced by coal-fired gen-million that SRP contributed to various governmental erators, primarily because the first unit at the Navajo taxing entities. Also during the year wages went up Generating Station began commercial operation.
12 percent. Other factors included greater availability of natural From mid-1973 to mid-1974, the cost of most gas and hydroelectric power during the summer. All materials doubled. Some wooden power poles in- of these energy sources produce power less ex-creased in price from $ 72 to $ 142 during the period. pensively than by burning oil.
Aluminum wire costs jumped from eight to 14 cents In October, the factor increased to 6.20 mills per per foot; gasoline prices went up more than 38 kilowatt-hour. This increase was primarily, a result of percent. Concrete pipe increased as much as 80%, in a drop of natural gas available for power generation.
some cases increasing as much as 15% in a two-week The SRP received 5,483 million cubic feet of natural period. gas from November 1973 to April 1974 but only To help counteract rising costs the Project acceler-. 1,840 million cubic feet was expected to be available ated its cost cutting program in August with the from November 1974 through April 1975. As a result result that more than $ 22 million was trimmed from the amount of oil needed to operate SRP generators the 1974 budget and an additional $ 29.3 million was is expected to nearly double.
cut from the 1975 budget. Included in the cutbacks Then in November these and other cost increases
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A bove, engineering new electrical distribution and transmission facilities must be done years ahead to en-sure completion by the time t hey are needed. SR P planners predict that Project electric customers will num-IX ber 338,838 by 1980. Left, llew clccitfle meters afe spo't tested, before installation, in the meter shop located in the rcccntly completed $ 4.9 million Crosscut Construc-tion and Maintenance com-plex. Bclotv, chemists con-tinually monitor the water Pi for purity at Santan Gener-t
~,I ating Station and other facil-ities with steam turbine generators.
State University designed to monitor the effects of and ten others were enlarged to serve new customers.
the pumped-storage system on the ecology of SRP Cost of transmission and distribution lines during lakes; and a fossil fuel ambient air sampling and 1974 totaled $ 34,259,231 compared with modeling program for Phoenix-Tucson, supported by $ 43,221,710 the previous year.
SRP and other Arizona utilities. Construction during 1974 also included an expan-sion at the Crosscut Construction and Maintenance complex. The $ 4.9 million facilities, which are ENVIRONMENT IMPORTANT located south of the administration building in AT ALLSRP FACILITIES Tempe, will be ready for occupancy in 1975; they A decorative enclosure wall at Christy Substation will be headquarters for nearly 300 employes.
was completed and the exterior landscaping was To help pay for electrical system construction and designed for installation during 1975. During 1974, improvements, the Project sold $ 180 million in bonds 176 pipeline structures, 5 wellsites were completed, during 1974. SRP bonds continued to receive high and 5,389 security and streetlights installed. Substa- ratings established in May 1973: "A-1" by Moody tions and other facilities are planned to harmonize Investors Services, Inc. and "A" by Standard and with the environment in which they are placed. Other Poor's Corporation.
aspects of SRP's award-winning beautification pro-gram include underground distribution lines.
ELECTRIC CUSTOMERS %of CONSTRUCTION OF POWER LINES GROWS 1974 1973 Change Construction of new transmission lines totaled 205 Residential 221,808 209,334 6 miles compared to 129 miles during 1973. Also Commercial &, industrial 16,393 15,443 6 during 1974, 76 miles of distribution lines were built Other 1,230 1,144 8 above ground compared to 56 miles of overhead Total 239,431 225,921 6 during 1973. Underground, 1,143 cable miles were Average annual kwh use, laid, compared to the 1,000 miles of underground residential 12,808 13,182 (3) during 1973. Average annual kwh price, Three distribution substations were constructed residential (cents) 2.62 2.23 17
/zi /All The president, vice president, board and council of SRP arc publically Equipment and parts for many SRP facilities are fabricated in the shops in elected by landowners biannually. Returns from precincts arc tallied by thc ncw Crosscut Construction and hiaintenance complex. hfore than 300 employes in the Project Secretary's Offi<e. employcs arc hcadquartertxl there.
prompted the SRP's board of directors to authorize a rate increase for 1975. The increase averaged 19 percent, the largest increase in Project history, and was needed to raise an additional estimated $ 21 million in 1975 revenues.
t Also in 1974 the SRP suffered a wildcat strike over a change in work schedule for some of the electric line crews. During the illegal strike, 785 workers left their jobs, some for as much as a week. The strike, the first at SRP in 20 years, was settled with the assistance of a federal mediator.
In October, an agreement was signed with Local Union 266 of the International Brotherhood of Electrical IVorkers extending their existing labor contract from March 31, 1975, to December 31, 1975. The agreement also eliminated the existing cost of living escalator, granted an immediate six percent cost of living increase, provided for a six percent pay raise effective January 1, 1975, and set guidelines for a cost of living increase of up to three percent to be Three electrical distribution substations werc constructed and ten others paid beginning in June, 1975. werc enlarged during the year.
TRAININGFOCUS FOR AFFIRMATIVEACTION During 1974, the Affirmative Action Division of the Project was incorporated into the Training and Development Division to concentrate more of their efforts in retention, mobility and training of minor-ities, women and veterans.
The aim of the Affirmative Action Program is to assure fair and impartial consideration in recruitment and placement; education and training; transfers and upgrading; and compensation and benefits without regard to race, religion, creed, color, national origin, sex or age.
A $ 4.2 million addition to the Project's administration building was completed in 1974. The new expansion provides office facilities for expected growth through 1980.
SUPERVISORY CONTROL COMPLETED delivery fee plus the regular assessment of 95 cents Water personnel completed a five year installation for one-fifth acre. This total is up from $ 7.85 in program for the supervisory control facilities on the 1973.
water transmission system. The $ 3.3 million system The price of pump water was set at $ 8 per makes it possible for an operator, sitting at a acre-foot.
computer console, to electronically monitor canal The annual water delivery charges were increased water levels and flows by raising and lowering 205 from $ 14 to $ 15 for active field accounts and from gates at 79 sites, and to control 52 pumps. With $ 7 to $ 8 for active subdivision accounts served on a supervisory control, water handling is improved, group basis.
particularly during storms. The facilities improve The 1974 budget for the operation of the water water conservation and free water personnel for other storage and delivery system was $ 21.2 million com-responsibilities. pared to $ 20.9 million in 1973.
CONSTRUCTION AND MAINTENANCE WATER USE EFFORTS INCLUDE CANAL LINING In acre-feet Other water construction and maintenance during %of 1974 1973 Change 1974 included guriite lining on nearly two miles of canals, and installation of two water radial gate Agriculture 441,087 642,134 (31) structures and lateral headgates. Cost of the work Municipal-domestic 160,342 152,626 5 totaled $ 666,300. Other, nonagricultural 54,990 49,366 11 Subdivision irrigation 54,302 51,761 5 ASSESSMENT INCREASES 12 PERCENT Total 710,723 895,886 (21)
The Project board of governors approved a 1974 water assessment of $ 4.75 per acre, an increase from 1973 when the assessment was $ 4.25. This assessment WATER DELIVERIES DECLINE t
covers the first two acre-feet of water. Water deliveries during 1974 declined sharply from The total cost to irrigate a residential lot of the preceding year but were nearly equal to the one-fifth acre became $ 8.95, representing an $ 8 average of the past 30 years.
tVater levels and flows at control gates and pumps throughout the Project's canal system can be monitored and operated by one employe at the supervisory control console.
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Maximum water storage during 1974 was 1,553,749 af on Feb. 1, 1974, which is 75 percent of capacity. By comparison, in 1973 the maximum in storage, which set a new record, totaled 2,065,876 af on May 21; which is 99.7 percent of capacity. Total contents at the end of 1973 were 1,498,620 af. At year-end 1974, the six SRP reservoirs contained a total of 1,054,710 af or 51 percent of capacity.
WATERSHED MONITORED FROM THE SKY Project personnel maintained a continual watch on watershed conditions with the help of the Earth Resources Technology System (ERTS) satellite, sponsored by NASA and the U.S. Geological Survey.
The satellite receives information on the amount of snowfall and river flow conditions daily. This enables Project personnel to better plan water operations and
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COURT RULES SRP NOT LIABLE II
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Ir." tt] FOR FLOODING In December, Judge Edwin Thurston, Maricopa
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j County Superior Court, directed a verdict in favor of SRP in a damage suit filed by 34 property owners in the Cudia Wash area. The property owners contended t i,~
The Project encourages and participates in the management of the 13,000 square-mile watershed of the Salt and Verde rivers, in cooperation with the U.S. 1'orest Service, helping to develop new sources of water for the Valley and the state as a whole.
During the year, deliveries totaled 767,264 acre-that damage resulting from the overflowing of canals during the June 22, 1972, flood was due to negli-Project forces, like this SRP zanjero, delivered 710,723 acre-feet of water during 1974, 37.9 percent of which svas for urban usage.
feet (af). In 1973 deliveries were 968,613 af, due principally to that year's heavy runoff which per-mitted large extra deliveries at no charge to users.
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Although total deliveries declined, non-agricultural usage increased from 253,753 af in 1973 to 269,636 af during 1974. This increase was partially attributa- P ble to greater municipal usage. During the year, water delivered to eight cities in accordance with municipal water contracts totaled 160,343 af. In comparison, deliveries to the cities totaled only 152,626 af during 1973. Water charges to cities are the same as to other users; although costs vary depending upon the pro-portion of pump and surface water consumed, the cities paid an average of $ 3.17 per af for Project water. Other nonagricultural uses, including residen- g ~ I tial irrigation, parks and playgrounds, required 109,293 af during 1974, up from 1973 consumption of 101,127 af. Agricultural water orders totaled 441,088 af, a decrease of 201,047 af compared to the t
642,135 af in 1973.
Of the total water required during 1974, 57 percent was from SRP lakes compared to 92 percent during 1973. The remainder both years came from the Project's deep well pumps. The percentage drawn -~)
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contents. I
gence on the part of SRP. Earlier in the year, a exceeding the old record of $ 750 per acre set last Maricopa County Superior Court jury verdict favored year. Part of the reason for this increased value was Scottsdale homeowners whose homes had been soaring prices on a national level.
flooded as a result of a 1970 storm; an appeal has Of the total in 1974, $ 53 million was attributable been filed in that case. to livestock and $ 95.3 million to crops.
CROPS, LIVESTOCK HELP VALLEY'SECONOMY DOMESTIC WATER USE Land within the Project area continued its transi- In acre-feet '7c of tion from agriculture to urban usage. During 1974 1974 1973 Change agricultural acreage declined 5,178 acres from Phoenix 122,974.1 118,574.5 4 129,551 at yearwnd of 1973 to 123,373 acres at Tempe 19,814.0 17,470.5 13 year-end of 1974. Glendale 9,994.9 8,888.9 Despite this decline, livestock and crops raised Mesa 3,313.2 2,875.8 15 during 1974 in the SRP area injected $ 148.37 million Scottsdale 2,470.9 2,648.4 (7) into the Valley's slumping economy. This was a Chandler 706.9 989.1 (29) decrease of $ 170,000 from 1973's total value of Peoria 763.7 665.4 15
$ 148.55 million. The gross value of crops produced Gilbert 304.4 5 12.9 (41) within the Project's service area was $ 816 per acre, Total 160,342.1 152,625.5 5 re h, -I Representatives from thc Project's Agriculture Section aided 117 cooperating farmers during 1974, providing soil petiole, and irrigation analysis for
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61,011 acres. The cooperative program is designed to help irrigators make the most cfficicnt use of water.
OPERATING REVENUES UP 30.6 PERCENT was increased by the State Legislature from 40 to 50 Operating revenues for 1974 totaled $ 169.6 mil- percent of full cash value, resulting in an increase in lion, an increase of 30.6 percent over the $ 129.9 taxes of $ 3 million. Also, the state sales or trans-million for 1973. action privilege tax rate was increased from three to Sale of electric energy produced $ 167 million of four percent.
this total, an increase of 30 percent from 1973. This Other operation and maintenance expenses rose reflects, in part, additional electric customers, up six $ 6.2 million to $ 41.2 million during 1974. This is a percent, and a 10 percent increase in kilowatt-hour reflection of wage and salary increases, and higher sales. A total of $ 35.6 million of the operating reve- costs for materials and supplies. Reduction in author-nues were recovered through fuel escalation charges. ized strength and the first general layoff in Project Water revenues contributed $ 2.6 million, up from history helped to hold down those expenses.
$ 1.6 million in 1973. Interest paid on long-term bonds rose from $ 19.7 Also, electric rates and water assessments were million in 1973 to $ 29.2 million in 1974, an increase increased during 1974. An electric rate increase, of 48 percent.
averaging seven percent, was effective with bills mailed in January 1974, and produced $ 6.7 million NET REVENUES AT $ 8.9 MILLION of additional revenues during the year. In November Net revenues during 1974 were $ 8.9 million, 1974, the board again approved an electric rate compared with $ 17.5 million in 1973, a decrease of increase, averaging 19 percent, to produce an addi- 49 percent. This decline reflects the effect of general tional $ 21 million in 1975. Water assessments were economic conditions. Also, in 1973, earnings were increased an average of 12 percent during 1974 and unusually good because exceptionally heavy runoff 21 percent for 1975. into Project reservoirs provided approximately four t OPERATING EXPENSES CLIMB TO $ 149 MILLION Operating expenses were strongly influenced by the energy crisis and the continuing inflation. Oper-ating expenses increased by $ 43.5 million to a new extra months of low cost hydro-electric generation than is normally available.
DEBT CLIMBS TO $ 637.2 MILLION Long term debt climbed from 1973's $ 464.7 million to $ 637.2 million in 1974. This rise is a result high of $ 149.0 million. The principal increases were of three bond sales, totaling $ 180 million, during in the costs of fuel and purchased power, which 1974. The Project sold $ 90 million in bonds during together amounted to $ 71.8 million, up $ 28.3 million at an effective interest rate of 5.75 percent, 'anuary from 1973. $ 50 million in May at 6.36 percent, and $ 40 million Fuel used in electric generation cost $ 44.1 million, in September at 7.75 percent.
up $ 15.4 million. The quantity of purchased power increased 54 percent over 1973, to 3.3 billion PLANT VALUEUP $ 168.5 MILLION kilowatt-hours; this expense rose $ 13 million to $ 27.7 During 1974, the Project's gross plant, including million, partially due to higher prices. construction work in progress, grew from $ 662.1 Natural gas for generation of electricity was cur- million in 1973 to $ 830.6 million. Of plant in service, tailed from contract by 5,281,747 MCF during 1974. at cost, electric plant increased by $ 145.2 million, Costs of oil, the substitute fuel, rose to an average of irrigation plant by $ 6.8 million, and general plant by
$ 13.65 per barrel compared with $ 6.75 per barrel in $ 9.7 million. Total capital expenditures during 1974 1973. This impact was only partially offset by the were $ 177.1 million.
fuel cost adjustment factor, which was 3.91 mills per kilowatt-hour during January through April, 3.62 mills for May-October, and 6.20 mills for November SOURCES OF REVENUES In hfillions on into winter. Additional fuel costs resulting from %of new generating units going into operation are not 1974 1973 Change Electric t
reflected in the fuel cost adjustment factor and must be recovered by standard rates. Residential ........... $ 72.2 $ 58.9 22.6 Taxes and tax equivalents increased by $ 6.3 Commercial and million to $ 18.9. This increase was due, in part, to an industrial .......... 62.9 48.9 28.6 increase in the assessed valuation of the Project's real Other.................... 31.9 20.5 55.6 property because of new construction. Water........................ 2.6 1.6 62.5 At the same time, the assessment ratio for utilities Total .................... $ 169.6 $ 129.9 30.6 11
COMBINED STATEMENT OF
~et jI'evermez Salt River Project Agricultural Improvement and Power District and its agent, Salt River Valley IVater Users'ssociation For the years ended December 31, 1974 and 1973 OPERATING REVENUES: 1974 1973 Electric. $ 166,971,981 $ 128,334,924 IVater and irrigation.. 2,613,184 1,578,819 Total operating revenues. $ 169,585,165 $ 129,913,743 OPERATING EXPENSES:
Power purchased $ 27,705,014 $ 14,746,135 Fuel used in electric generation. 44,074,595 28,694,459 Other operation expenses. 29,390,114 25,546,385 Maintenance....... 11,845,338 9,456,018 Depreciation and amortization (Note 1). 16,993,880 14,352,886 Taxes and tax equivalents (Note 5). 18,948,704 12,691,099 Total operating expenses. $ 148,957 645 $ 105 486 982 Net operating revenues. $ 20 627 520 $ 24 426 761 FINANCING COSTS:
Interest on bonds at coupon rates. $ 29,151,707 $ 19,673,195 Amortization of bond discount 486,365 435,622 Amortization of bond issue expense. 144,768 133,085 Interest on other obligations 1,259,712 297,911 Interest earned on investments and deposits..... (8,310,470) (6,313,813)
Net financing costs. $ 22,732,082 $ 14,226,000 Less - Allowance for funds used for construction (Note 1) (11,335,298) (6,967,752)
Financing costs less allowance for funds used for construction. $ 11,396,784 $ 7 258 248 OTHER DEDUCTIONS (REVENUES), NET....... $ 372,306 $ (290,903)
NET REVENUES FOR THE YEAR $ 8,858,430 $ 17,459,416 The accompanying notes to combined financial statements are an integral part of this statement 12
COMBINED STATEMENT OF sources of fuza6e FOR ADDITIONS TO UTILITYPLANT Salt River Project Agricultural Improvement and Power District and its agent, Salt River Valley Water Users'ssociation For thc years ended December 31, 1974 and 1973 1974 1973 GROSS ADDITIONS TO UTILITYPLANT .... $ 177,096,264 $ 171,144,625 FUNDS GENERATED FROM OPERATIONS:
Net revenues for the year... $ 8,858,430 $ 17,459,416 Depreciation and other charges not requiring current funds. 20,114,309 16,925,011 Total funds generated from operations before retirement of debt $ 28,972,739 $ 34,384,427 Less - Repayment of long-term debt 8,964,999 7,913,157 Net funds generated from operations. $ 20,007,740 $ 26,471,270 FUNDS OBTAINED FROM FINANCING:
Proceeds of bond issues. $ 178,138,610 $ 148,507,206 Advances from U.S. Government for rehabilitation of irrigation plant. 648,392 786,569 Other advances and contributions in aid of construction. 4,909,099 4,647,041 Long-term contract, net of repayments. 2,410,168 Short-term borrowing, net of repayments. 19,750,000 19,750,000
$ 205,856,269 $ 173,690,816 Less-Increase in segregated funds set aside for debt service ........................... (15,486,507) (12,011,592)
Reduction (increase) in segregated funds set aside for construction. (145,276) 162,942 Increase in temporary investments held primarily for construction. (7,592,816) (12,521,199)
Net funds obtained from financing...... $ 182,631,670 $ 149,320,967 CHANGES IN OTHER ITEMS AFFECTING FUNDS:
Increase in fuel stocks. $ (9,597,403) $ (6,295,028)
Increase in materials and supplies. (6,227,714) (1,987,048)
Increase in debt service fund for payment of accrued interest on bonds.............. (4,785,578) (3,221,150)
Decrease (increase) in other assets and liabilities, net. (4,932,451) 6,855,614 Net change in other items... $ (25,543,146) $ (4,647,612)
FUNDS USED FOR ADDITIONS TO UTILITYPLANT..... $ 177,096,264 $ 171,144,625 I
Thc accompanying notes to combined financial statements are an integral part of this statement 13
COMBINED Salt River Project Agricultural Improvement and Power District and its agent. Salt December 31, 1974 and 1973 aSSetS 1974 1973 UTILITYPLANT, at original cost (Notes 1, 2 and 3)
Plant in service Electric.... $ 517,459,324 $ 372,215,35 I Irrigation. 60,763,852 53,958,879 General. 35,412,147 25 704,188 Total plant in service $ 613,635,323 $ 451,878,418 Less - Accumulated depreciation on plant in service 151,398,751 136 509,334
$ 462,236,572 $ 315,369,084 I
Construction work in progress. 216,956,381 210,177,530
$ 679,192,953 $ 525,546,614 SEGREGATED FUNDS, consisting of cash and U.S.
Government obligations set aside in accordance with resolutions of underlying bond issues:
Debt service funds, excluding $ 15,900,974 in 1974 and $ 11,115,396 in 1973 for payment of accrued interest (Note 7). S 60,132,372 S 44,645,865 Construction funds . 283,774 138 498 S 60,416,146 S 44,784,363 CURRENT ASSETS:
Cash, including $ 6,000,000 restricted by line of credit (Note 8) . $ 6,828,388 S 4,592,901 Temporary investments, at cost, held primarily for construction. 45,411,557 37,818,741 Deposit in debt service fund for payment of accrued interest on bonds. I 5,900,974 11,115,396 Accounts receivable, less reserves of
$ 802,000 in 1974 and $ 642,000 in 1973 for doubtful accounts.. 16,179,043 13,881,592 Fuel stocks, at average cost 17,249,725 7,652,322 Materials and supplies, at average cost. 13,294,125 7,066,411 Prepayments, interest receivable and other..... 2,609,038 1,857,109
$ 117,472,850 S 83,984,472 OTHER ASSETS:
Advances for dedicated capacity in electric plant owned by others, less accumulated straight-line amortization over 39 years S 12,627,615 $ 10,763,179 Nonutility plant, less accumulated depreciation of $ 414,000 in 1974 and $ 400,000 in 1973 1,268,538 1,239,513 Bond expense being amortized Miscellaneous deferred charges ...........
1,961,264 6,985,219 S 22,842,636 1,689,652 4879 536 18,571,880
~ '
$ 879,924,585 $ 672,887,329 The accompanying notes to combined financi 14
Riv Valley IVater Users'ssociation Capitalization and liabilities 1974 1973 LONG-TERM DEBT (Note 7):
General obligation bonds. $ 296,977,898 $ 304,872,729 Electric system revenue bonds........ 326,787,909 148,548,103 Obligations to U.S. Government. 11,231,655 11,256,911 Other obligations. 2,229,734 68,223
$ 637,227,196 $ 464,745,966 ACCUMULATEDNET REVENUES, invested principally in utility plant:
Balance beginning of year. $ 127,122,737 $ 109,663,321 Net revenues for the year 8,858,430 17,459,416 Balance end of year $ 135,981,167 $ 127,122,737 Total capitalization, consisting of long-term debt, and accumulated net revenues. $ 773,208,363 $ 591,868,703 t CURRENT LIABILITIES,excluding $ 9,389,000 in 1974 and $ 8,950,000 in 1973 representing current portion of long-term debt which is to be paid from segregated funds:
Notes payable to banks (Note 8)
Accounts payable ............................................
$ 61,000,000 14,259,890
$ 41,250,000 18,016,469 Accrued taxes and tax equivalents (Note 5) .... 7,742,820 4,047,535 Accrued interest 16,446,059 11,250,233 Customers'eposits. 1,837,381 1,656,334 Other current and accrued liabilities............ 2,449,080 1 956 105
$ 103,735,230 $ 78,176,676 COMMITMENTS AND CONTINGENCIES (Notes 3,4,5 and 6)
DEFERRED CREDITS AND RESERVES:
Irrigation assessments levied for subsequent year.. $ 1,639,943 $ 1,353,241 Advances for construction. 731,371 866,112 Other. 609 678 622 597
$ 2,980,992 $ 2,841,950
$ 879,924,585 $ 672,887,329 ements are an integral part of this balance sheet.
15
Zlollc8 TO COMBINED FINANCIALSTATEMENTS Salt River Project Agricultural Improvement and Power District and its agent, Salt River Valley Water Users'ssociation 0
(I ) SUMilIARYOF SIGNIFICANT (c) Deferred Charges ACCOUNTING POLICIES: Bond discount, premium, and bond issue expense (a) Principles Underlying Combined Statements are being amortized over the terms of the related The combined financial statements include the bond issues.
accounts of the Salt River Project Agricultural Im- (d) Employes'etirement Plan provement and Power District and the accounts of its The Project has a retireinent plan covering sub-agent, the Salt River Valley Water Users'ssociation, stantially all employes. The plan is funded entirely together referred to as the Salt River Project, and a from employers'ontributions and the earnings of wholly owned subsidiary Salt River Generating the invested assets. The estiinated unfunded past Company. All significant intercompany transactions service liability based on the "entry age normal" have been eliminated. actuarial cost method was approximately $ 9,938,000 (b) Utility Plant, Depreciation and Maintenance at July 1, 1974, and will be funded over a period The accounting records of Salt River Project are ending in 2001. The employers'ash contributions to inaintained substantially in accordance with the this plan totaled $ 3,483,000 in 1974, and $ 2,706,000 Uniform System of Accounts prescribed for electric in 1973.
utilities by the Federal Power Commission. Utility As of July 1, 1973, a change was made in the plant is stated at the historical cost of construction. actuarial cost method of valuing the retirement plan's Construction costs include labor, materials, services investments from the cost basis to a modified market purchased under contract, and allocations of indirect method. The effect of this change was to increase charges for engineering, supervision, transportation, employers'ontributions in 1974 to a rate of 10.83%
and administrative expenses. of total basic salary rates of participants. Under the An allowance for funds used to finance con- previously used actuarial method, the struction work in progress is capitalized as a part of in 1974 would have been at a rate of employers'ontributions the electric and general plant. The cost of funds so 10.04%.
used is deducted from net financing costs in the com- The excess of the actuarially computed value of bined statement of net revenues. A capitalization rate vested benefits at July 1, 1974 over the total at of 6% has been consistently used for several years. December 31, 1974 of the market value of the plan's Depreciation expense is computed on the straight- assets plus contributions receivable from employers line basis over estimated useful lives of, the various was $ 6,740,000.
classes of plant. Rates in effect during the years 1974 The Pension Reform Act of 1974 requires the and 1973 resulted in provisions approximating 3.42% Association to amend its retirement plan to conform for 1974 and 3.49% for 1973 on the average cost of with certain provisions of the Act, which will become depreciable electric plant, and 2.31% for 1974 and mandatory in 1976. Management believes that the 2.45% for 1973 for depreciable irrigation plant. When effect of such amendment on annual retirement plan property representing a retirement unit is replaced, costs will not be significant.
removed, or abandoned, the cost of such property is (e) Revenues credited to the appropriate utility plant account, and Meters for residential, commercial and small indus-such cost together with removal costs less salvage is trial customers are read cyclically and sales recorded charged to accumulated depreciation. when billed. For large industrial customers, meters The Project charges to maintenance expense the are read near month-end and billings recorded on the cost of labor, materials, and other expenses incurred accrual basis. Revenues from water and irrigation in the repair, restoration of condition and replace- operations are recorded when earned.
ments of minor items of property.
The Federal Power Commission has ordered com- (2) POSSESSION AND USE OF UTILITYPLANT:
panies subject to its jurisdiction to adopt a method of The United States of America retains a paramount accounting whereby the balances of contributions in right or claim in the Salt River Project which arises aid of construction are offset against utility plant. from the original construction and operation of the While Salt River Project is not subject to this order, Project's facilities as a Federal Reclamation Project.~
its management adopted such accounting on January The Project's right to the possession and use of, and %P 1, 1974. To effect comparability between 1974 and to all revenues produced by, these facilities is 1973, contributions in aid of construction have been evidenced by contractual arrangements with the reclassified against utility plant at December 31, 1973. United States.
16
(3) CONSTRUCTION PROGRAM: posed generating facilities and transmission lines. In Balances shown for construction work in progress general, these lawsuits seek to impose higher air represent expenditures for the new facilities required quality standards for generating plants, delay or halt to serve anticipated customer needs and consist of the construction of transmission lines, or invalidate coal leases. If ultimately decided adversely to the December 31 interest of Salt River Project these lawsuits could 1974 1973 result in increased construction costs, increased Electric generating future operating costs, and a possible loss in the facilities................. $ 174,124,250 $ 161,312,356 operational reliability of certain generating plants. All Transmission and of these effects would increase the costs to be passed distribution .......... 35,463,106 40,356,532 on to customers through increased electric rates.
Irrigation plant ......... 2,528,863 3,873,943 Other construction ... 4,840,162 4,634,699 (5) PROPERTY VALUATIONLITIGATION:
Total ................ $ 216,956,381 $ 210 177,530 Salt River Project makes voluntary contributions to taxing bodies in lieu of payment of property taxes.
Construction expenditures planned for 1975 The Department of Property Valuation of the State approximate $ 175 million, which includes $ 134 of Arizona has filed suits (since consolidated into one million expended in 1975 on the following major suit) against the Project to increase the value used in projects (shown below): the computation of the voluntary contributions for Significant operating problems are being experi- the years 1970, 1971 and 1972. This suit would have enced on the Navajo Project coal haul railroad. had the effect of increasing contributions by $ 2.25 Although the matter is under intensive analysis, million for these three years. In 1973, the Superior studies to date indicate that remedial action involv- Court of Arizona granted judgment on this suit in ing capital expenditures in the range of $ 20 to $ 30 favor of the Salt River Project. This decision has been million may be required. These costs would be for appealed by the Department of Property Valuation.
reconstruction and modification and would not in- The Department has also filed suits against the Salt crease the coal delivery capacity of the railroad. To River Project to increase the valuations for 1973 and the extent not recovered from third parties, the costs 1974 which would increase the contributions by will be shared by the participants in the same approximately $ 1.4 million.
proportion as their participation in the Navajo Since all legal findings to date have been favorable Project. Salt River Project's share of such costs would to the Project, no reserve for additional contributions be 21.7% and are not included in the expected has been provided at December 31, 1974.
expenditures shown below.
(6) OTHER LITIGATION:
(4) ENVIRONMENTALLITIGATION: Principally as a result of certain water flooding in Various pending lawsuits involving environmental 1972, various lawsuits and claims have been filed matters could affect interests owned by Salt River against Salt River Project alleging that the Project has Project in present generating facilities and in pro- a responsibility in regard to flood control and a EXPECTED CONSTRUCTION EXPENDITURES (Note 3)
Expected ($ 000)
Power facility In-Service Expected Expenditures Date Overall In 1975 Navajo Generating Station. 1974-76 $ 171,456 $ 23,959 Hayden Generating Station. 1976 91,529 24,737 Craig Generating Station. 1978-79 157,845 21,109 Coronado Generating Station. 1979-83 990,865 40,376 Palo Verde Nuclear Station. 1982-86 947,450 8,457 Santan Combined Cycle Units. 1974-75 60,547 6,989 Coronado Transmission System. 1979 108,234 8,280 Palo Verde Transmission System 1982 31,295 242
$ 2,559,221 $ 134,149 17
liability in regard to flood damage. The ultimate included in the District, and the bonds and the liability, if any, is not determinable, but management interest thereon are payable from the levy of taxes on expects that a significant portion of any liabilities which might result from flood damage claims will be covered by insurance.
such real property unless the net electric revenues, as defined in the bond resolutions, are sufficient to meet the principal and interest payments.
~
%F j The Salt River Pima-Maricopa Indians have brought Electric system revenue bonds are secured by a two lawsuits against Salt River Project claiming pledge of, and a lien on, the net revenues of the damages for trespass on various property originally electric system, subject to prior liens of general held by the U.S. Government and used by the Project obligation bonds and amounts due the United States.
under a 1917 agreement with the U.S. Government. In all years to date net electric revenues have been Management believes that the Project will be able to more than sufficient to meet all debt service sustain its position with regard to its entitlement to requirements.
the use of the major properties involved in these suits. Long-term debt outstanding at December 31, 1974, and December 31, 1973, was as follows (shown (7) LONG-TERM DEBT: below):
Bonds outstanding are general obligation bonds The annual maturities of bonds and other long-and electric system revenue bonds. General obligation term debt outstanding as of December 31, 1974, due bonds are additionally secured by a pledge of in each of the years 1975 through 1979 are $9,389,000; revenues from the operation of the electric system. $ 10,156,000; $ 14,861,000; $ 15,227,000 and These bonds are a lien upon the real property $ 15,957,000, respectively.
LONG-TERM DEBT OUTSTANDING (Note 7)
Interest Issued Outstanding December 31, Future General Obligation Bonds- Rate in Year 1974 1973 Maturities Refunding Bonds 3 194447 $ 223,000 $ 398,000 1975 Issue No. 4 2-5/8 to 2-3/4 1950 1,900,000 2,300,000 1975-77 Issue No. 5 2-3/8 to 2-1/2 1951 3,500,000 4,000,000 1975-80 Issue No. 6 2-3/4 to 3-5/8 1953 8,900,000 9,300,000 1975-82 Issue No. 7 3.1 0 to 3.40 1956 7,445,000 7,595,000 1975-87 Issue No. 8 3-3/5 to 3-5/8 1959 4,090,000 4,170,000 1975-87 Issue No. 9 1 to 4-1/4 1960 24,750,000 25,875,000 1975-92 Issue No. 10 1 to 3.60 1962-65 17,415,000 18,245,000 1975-94 Issue No. 11 3-1/4 to 3-1/2 1965 11,850,000 12,070,000 1975-87 Issue No. 12 3 to 5 1968-69 40,300,000 41,950,000 1975-99 Issue No. 13 4to 5 1969 8,600,000 8,950,000 1975-99 Issue No. 14 3-1/2 to 6 1970-72 172,200,000 174,600,000 1975-2003
$ 301,173,000 $ 309,453,000 Unamortized bond discount (4,195,102) (4,580,271)
Total general obligation bonds outstanding $ 296,977,898 $ 304,872,729 Electric system revenue bonds 1973 Series A 5 to 6-1/2 1973 S 75,000,000 $ 75,000,000 1976-2010 1973 Series B 5 to 6-1/2 1973 75,000,000 75,000,000 1977-2011 1974 Series A 5.7 to 7.2 1974 90,000,000 1983-2012 1974 Series B 6.1 to 7.6 1974 50,000,000 1983-2012 1974 Series C 6-1/2 to 7-3/4 1974 40,000,000 1983-2012
$ 330,000,000 $ 150,000,000 Unamortized bond discount (3,212,091) (1,451,897)
Total electric system revenue bonds outstanding $ 326,787,909 $ 148 548 103 Total bonds outstanding $ 623,765,807 $ 453,420,832 Obligation to U.S. Gov't for irrigation plant None 1935-74 11,231,655 11,256,911 1975-99 Equipment contract 6.875 1974 2,172,862 1975-82 Other obligations None 1950 56,872 68 223 1975-79 Total long-term debt $ 637,227,196 $ 464 745 966 18
On January 8, 1975, the District sold bonds in the principal amount of $ 60,000,000 at an effective interest rate of 8.11%. These bonds were the first installment of $ 170 million of electric system revenue zuGMezz'eyez6 bonds authorized October 29, 1974, to finance the 1975 construction program.
Interest and amortization of discount on the various issues outstanding during the year resulted in an effective annual rate of 5.26% for 1974. This rate approximates 5.90% over the remaining terms of the bonds, after giving effect to the bonds sold on January 8, 1975.
The debt service funds portion of segregated funds includes $ 15,717,000 at December 31, 1974, and
$ 10,787,000 at December 31, 1973, restricted for operating reserve requirements under bond resolutions.
(8) LINE OF CREDIT:
The District, with the Association joining as guarantor, maintains a line of bank credit in the To the Board of Directors, amount of $ 60,000,000. The full amount available Salt River Project Agricultural Improvement was borrowed at December 31, 1974, and at that date and Power District, and carried an interest rate of 7.00%. Under terms of the line of credit, a $ 6,000,000 non interest bearing Board of Governors, compensating balance is required. Other bank Salt River Valley Water Users'ssociation:
borrowings total $ 1,000,000 at an interest rate t of 6.50%. The average interest rate on bank borrowings for the year was 6.26%
(9) IRRIGATION AND WATER OPERATIONS:
~
The expenses, including depreciation, for irrigation and water operations exceeded the assessments, de-
~
We have examined the combined balance sheet of SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT (a political subdivision of the State of Arizona) and its agent, SALT RIVER VALLEYWATER livery fees, and other revenues therefrom by approxi- USERS'SSOCIATION, together referred to as mately $ 9,971,000 in 1974 and $ 7,187,000 in 1973. the SALT RIVER PROJECT, as of December 31, These amounts do not include expenditures for 1974, and December 31, 1973, and the related com-additions and improvements to irrigation plant and bined statements of net revenues and sources of for repayment of long-term debt. funds for additions to utility plant for the years then ended. Our examination was made in accordance with generally accepted auditing standards, and ac-cordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the financial position of the Salt River Project as of December 31, 1974, and December 31, 1973, and the results of its operations and sources of funds for additions to utility plant for the years then ended, in conformity with gen-erally accepted accounting principles consistently applied during the periods.
Arthur Andersen Sc Co.
Phoenix, Arizona February 24, 1975 19
Project General 1974 1973 1969 1964 Operating revenues.. S 169,585,165 S 129,913,743 S 65,231,040 S 42,470,372 Electric. 166,971,981 128,334,924 63,783,829 40,241,583 IVater & irrigation ..................... 2,613,184 1,578,819 1,447,211 2,228,789 Operating expenses........................ 148,957,645 105,486,982 55,509,026 34,578 r244 Net financing costs Less capitalized interest............. 11/96,784 7,258,248 2,158,993 2,605,797 Other deductions (revenues), net. 372,306 (290,903) 660,806 96,562 Net revenues. 8,858,430 17,459,416 6,902,215 5,189,769 Construction expenditures ............ 177,096,264 171,144,625 43,156,232 10,327,955 Electric & irrigation plant.............. 830,591,704 662,055,948 317,811,604 209 801 785 Contribution of power revenues to support water operations ...... 9,971,000 7,187,000 8,600,000 5,300,000 Taxes &, tax equivalents................. 18,948,704 12,691,099 7,658,728 2,421,376 Employes at year-end.................... 3,187 3,021 2,262 1,859 tVater 1974 1973 1969 1964 Total storage and pumping capacity (acre-fee t). 2,884,556 2,840,943 2,865,302 2,814,703 Storage capacity (six reservoirs) ......... 2,072,050 2,072,050 2,072,050 2,076,713 Installed pumping capacity................. 812,506 768,893 793,252 737,990 IVater in storage January 1 (acre-feet)... 1,498,629 1,4347947 1,468,205 796,150 Project storage only............................ 1,201,943 1,051,824 1,160,088 550,663 Runoff (acre-feet) . 441,582* 2,514,341 1,069,758 532,019 Released from storage (acre. feet) ........... 866,476* 1,313,692 1,127,402 681,961 IVater in storage December 31 (acre-feet).. 1,054,710 1,498,629 1,365,502 608,941 Project storage only............................ 789,158 1,201,943 1,046,630 359,447 IVater diverted into canals and pumping (acre-feet) ............................ 1,238,484 1,471,580 1,401,635 1,121,645 From gravity sources .......................... 872,007 1,392,150 1,103,486 670,174 From pumping by Association pumps 361,002 76,537 291,726 446,763 From pumping by others.................... 5,475 2,893 6,423 4,708 Contract deliveries (acre-feet)................. 132,458 198,669 132,608 96,990 From gravity sources.......................... 111,991 178,437 109,955 73,927 From pumping .. 20,467 20,232 22,653 23,063 Canals, total (miles)................................ 131 131 131 138 Miles lined. 56 54 48 46 Laterals, total (miles) ............................. 875 876 881 866 Miles lined or piped............................ 683 653 534 387 Drainage &, waste ditches (miles) ............ 263 267 283 284 Miles lined or piped ............................ 53 49 46 31 Assessed area. 238,263.90 238,263.90 238,261.50 238,251.90 Number of assessed accounts.................. 161)596 157,578 140,072 132,486 Number of individual water deliveries. 516,485 512,964 488,854 577,628
- Based on U.S.G.S. provisional records and subject to adjustment.
20
Power 1974 1973 1969 1964 t Sources: (ksvh)
Net steam generation..........................
Net diesel generation ..........................
Net combustion turbine generation Net combined cycle generation ..........
4,473,608,000*
252,506,000 129,429,000 4,360,347,000¹ 332,325,000 2,325,016,000* 2,074,311,000 3,200 Net run-of-river hydro generation** 333,822,000¹¹ 610,571,000¹¹ 264,197,000 211,176,000 Net pumped storage generation.......... 176,128,000 21,133,000 Total net generation. 5,365,493,000* 5,324,376,000* 2,589,213,000¹ 2,285,490,200 Purchased 3,257,052,229 1,940,568,367 1,608,677,185 251,211,778 Interchange received............................... 207,521,040 277,927,048 366,746,833 748,931,114 Wheeling received 42,534,731 40,667,485 38,806,382 1,443,956 Total energy 8,872,601,000 7,583,538,900 4,603,443,400 3,287,077,048 Disposition: (kwh)
Residential 2,751,862,961 2,640,917,384 1,508,158,739 783,098,756 Commercial & industrial..................... 3,191)339,884 2,894,899,907 1,950,372,606 1,090,615,121 Irrigation pumping ............................. 308,554,192 218,566,804 238,492,639 242,568,241 Street & highway lighting................... 38,756,879 38,974,096 27,714)212 19,463,531 Public authorities ............................... 239,776,522 201,267,802 180,874,830 193,735,482 Interdepartmental .............................. 194,652,239 62,477,382 145,000,900 217,583,687 Sales for resale.............................. 903,560,899 855,118,667 126,492,829 457,930,882 Total sales .. 7,628,503,576 6,912,222,042 4,177,106,755 3,004,995,700 Interchange delivered ............................. 255,852,000 112,973,600 110,932,948 31,065,457 Wheeling delivered. 39,599,835 37,536,087 36,090,376 1,314,000 Energy losses .......................................... 694,923,589 489,467,171 279,313,321 249,701,891 Energy for pumped storage operations 253,722,000 31,340,000 Total . 8,872,601,000 7,583,538,900 4,603,443,400 3,287,077,048 Peak overall power system (kw)............. 2,408,000 1,759,000 1,043,000 781,000 Date and time (MST).......................... June 27, 6 p.m. July 2, 6 p.m. Sept. 8, 6 p.m. Sept. 9, 9 p.m.
Peak, Project customers (kw) ................. 1,645,000 1,448,000 944,000 547,000 Date and time (MST).......................... June 27, 6 p.m. June 28, 6 p.m. July 31, 6 p.m. July 28, 6 p.m.
Generating capabilityat year~nd and con-tracted purchase at time of peak(kw)
Steam. 1,019,150* 850,400¹ 611,200>> 532,200 Diesel . 7,900 Combustion turbine........................ 362,800 238,800 Combined cycle.............................. 225,000 Hydroelectric-conventional ............ 94,300 94,400 62,400 64,000 Hydroelectric-pumped storage........ 147,200 147,200 Total operating capability .................. 1,848,450* 1,330,800¹ 673,600¹ 604,100 Contracted purchase........................... 629,725 582,145 530,012 134,000 Total resources ............................... 2,478,175 1,912,945 1,203,612 738,100 Transmission &, subtransmission lines - total circuit miles ..................... 1,107* 902¹ 808 652 Distribution lines - primary &, secondary Cable miles underground ................ 4,425 3,282 589 83 Circuit miles overhead .................... 4,856 4,780 4,446 4,132 SRP transmission substations ................. 19* 16* 12 10 SRP distribution substations .................. 112 109 80 62 Customer-owned distribution subs......... 2 2 6 6 Electric customers, year-end Residential. 221,808 209,334 146,463 113,880 Commercial &. industrial..................... 15,443 t
16@93 11,781 10,421 Other. 1,230 1,144 958 833 Total ......................................... 239,431 225,921 159,202 125,134 Average annual kwh use-residential. 12,808 13,182 10,685 7,111 Average annual kwh price-residential (cents)............................... 2.62 2.23 1.934 2.035
- Includes SRP participation in jointlywwned projects. '*Includes run-of-river generation by pumped storage units.
THE REVENUE DOLLAR Other 1$ Reinvested in Project assets tVater & irrigation Agricultural pumping, street &, highway lighting, and public authorities 7) Maintenance Sales for resale 13) Net interest on indebtedness Depreciation
- 10) and amortization Taxes, (sales, payroll, Commercial & industrial contributions electric sales 37) ad valorem)
- 16) Purchased power Other
- 17) operation expenses Residential clcctric sales 43]
Fuel used
- 27) for generation SOURCES USES THE IMPACT OF FUEL AND PURCHASED POWER COSTS ON THE ELECTRIC REVENUE DOLLAR fuel cost fuel cost fuel cost 27% 34% 43%
1970 1973 1974 22
BOARD MEMBERS (picturfxl left)
The Board of Governors of the Salt River Valley Water Users'ssociation and the Board of Directors of the Salt River Project Agricultural Improvement and Power District consist of 10 members each, elected from c among the shareholders and members for two.year "r terms. The boards establish the policies for the management of the Project and for the conduct of its
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COUNCILMEN (Pictured on the following pago)
Three Councilmen are elected for two.year terms Bill Rousseau, No. 3, Tom lrinlcy, No. 10, Larkin Pitch, No. 9 from among the shareholders in each of the tcn district areas of the Salt River Valley Water Users'ssociation and from among the members in each of the tcn division areas of the Salt River Project Agricultural Improvement E
and Power District. The councils enact and amend bylaws relating to the management of thc Project and to the conduct of its business affairs.
ELECTED OFFICERS Karl F. Abel = President John R. Lassen =Vice President OTHER OFFICERS &, EXECUTIVES Rod J. McMullin= General Manager Robert F. Amos = Associate Gcncral Manager, Finance and Operations Services Gcrrnain ll. Ball, No. I, Thomas P. llurlcy, No. 6, Alex M. Conovalolf, No. 2, A.J. Pfister == Associate General Manager, Power Lco C. Smith, No. 4 Reid W. Teeples -= Associate General Manager, Water Carl T. Eyring ==- Assistant Gcncral Manager, Power Construction and Maintenance T. M. Morong, Assistant General Manager, Power Engineering, and Chief Engineer, Power Vaughan A. Pierce Assistant General Manager, Marketing and Commercial Scrviccs John O. Rich Assistant General Manager, Power Operations Stanley E. Hancock- Director, Communications and Public Affairs Leroy Michael, Jr. ==- Director, Legal Services
- Frank G. Scussel = Director, Project Planning
&Policy Administration E.W. Yorke Director, Personnel Francis E. Smith Secretary KennethJ. Knauer Treasurer Don Wecsner Chief Engineer and Staff Coordinator, Water
<<Retires June 30, 1975 John S. lloopcs, No. 8, John h1. tvilliams, Jr., No. S, IVitliam P. Schradcr, No. 7 Legal Advisors Jennings, Strouss & Salmon Auditors Arthur Andersen & Co.
Numbers indicate District and Division from Bond Counsel Mudge Rose Guthrie & Alexander which Board members were clcctcd. Financial Consultant Smith, Barney &, Co., Incorporated 23
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t E(trs1 r J J Numbers indicate District and Division from which Councilmen werc elected.
A Thomas M.Owens, Jr., No. 8;IViley R. Baker, No.4 g B Orland R. Ilatch, Otto B. Nccly, L. Max Pace, No. 10 C Carl E. tVcifer, R.C. Jones, Edmund Navarro, No. 5 D A. )Varren Austin, George B. tViflmoth, No. 7 5 +(8 E Cal A. Sutton, hfarcef J. Boulais, C.C. Pendergast, Jr., No 2 F Ray C. Roles, James L. Diller, No. 6
~a G Ivy IVilson, Jr., Levi ll. Rccd, No. 4 H J.B. Neely, Dwaync E. Dobson, No. 8 I James R. Marshall, No. 6; william ll. Goettl, No 7 J M. B. Brooks, Jr., Thayer Collier, Elvin E. Fleming, No. 3 K tV. Curtis Dana, Robert fV. Birchett, Olen Sharp, No. 9 L Rudolph Johnson, lloward tV. Lydic, Emil hf. Rovey, No. I 24
SALT RIVER PROJECT WATERSHED, IRRIGATED AREA IIlld ELECTRICAL SERVICE AREA I
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Ofc IAXI Electrical Sevra Area Served Kxdfnively by Sait Rryer Project Salt River Project Pnwidel Full Power RCQulfCflWITIOf Affrcre Publrc Sofvfa fcf RITIXX,Pibfett Motel OrteCt Solel lo Customart for Atl Mrnrno Loadt Sail River Protect Provrdef Full Power Retuirementl of Aritona Public Serwco for Relole SNctrrcof Sevke Atoll riot Served by Selt Reer Prefect soll fliver project trrrolted Aroo SCale Of Mrfet
SALT RIVER PROJECT 8ULK RATE U.S. POSTAGE PAID PHOENIX, ARIZONA P.O. BOX 1980/ PHOENIX, AZ. 85001/ RETURN REQUESTED Permit No. 395