ML19259C497
| ML19259C497 | |
| Person / Time | |
|---|---|
| Site: | 05000484 |
| Issue date: | 12/31/1978 |
| From: | COOPERATIVE POWER ASSOCIATION |
| To: | |
| References | |
| NUDOCS 7906220206 | |
| Download: ML19259C497 (25) | |
Text
- j~y_ '
W
};. %- q;,]. ;,
m ; ;p g j>h, ', 1: 11
. s , j::ve :
Cooperative Power e
,/O! .~
a_
Association
'/,; a; ' ps
~1978 Annual Report ![I i [;s
/
- ). -i -
'y
) -
g ofY qy
. ]: n)~- c,
[M h : -
\
2281 130 og Jy .
e Mf
- m. Le
- .g
~ ~~
3 j
,. -,/
~
^% W IS i * ' ' - -
t
,r = ' c, B;;E6._
~ ~ ' ~
^' ' - ~ ~
, f 7 T'~ 1 ~ f. > ,, , -
%-,, J3 .
%., t , <
y
{T ,-h kQ ..,
wh ,
g ' p,
'y
'y ,
- ws, hi
. . + .. ,
'?f% %_;,
u
%m i
.sg
,FO7- ;g,~
.~' ,. s u _. , ,.
Q. Y,
}q*["'~~~.w.R: ,# gA '
.--b p .
y r,.S..xl' sl -
~
N.
m
(+; %g ,. ! n
) I
\\\ l B1 W:?: ,.
M h ~'
p% cuwd.A_
LEE w = .- g.y,><.
._e s,
.H t;
u st
~..
gff. %
~
, $ ij fQ ~,
w__ n .emm m 3 g mcuw ~ ,4 o upu . - >.y , $ 208 :202ctu7
TABLE OF CONTENTS Board of Directors . . 2 General Managers . . . . . 3 Member Cooperatives . .. . .3 CPA's 10 Member Systems .. . . 4 Report of the President and General Manager . . 5 Financial Highlights . 7 Treasurer's Report . .. .. 8 10 Year Summary . . . . . . 10 Accountants' Opinion 12 Balance Sheets . 13 Revenues and Members' Patronage Capital . 14 Changes in Financial Position . 15 Notes to Financial Statements. . Io Fuels for Generation . Io 2281 131 l
Cooperative Power Association 523 E. Bismarck Avenue Coal Creek Station 331o West 6eth Street Bismarck, ND 58501 P.O. Box 780 Minneapolis, MN 55435 Underwood, ND 5857o I
i - - - -
, n sh.4 %;
IL a w A: n'
... n1 ;
r 04 g. Q ,i (4, n .N; r
ju :
4 .
-r -
4 R' . e h. + .y
.a 1 i e4 P ,>;
1 I ~
4
& y;}'s ns ,'( $,,w w& 1 ,h' j :,ir,,'.wn w wr :qmy3my 4
o ps: t A .. f f
.er s y .o; a .v 4 aq f -
't r 6.3 c , y ,,'a scht P> g .. . ' ..
9
,,, I is
., - w1 -
y . #
4[msH [- My
- o pg,b)yv .<ig f
'4 Mg (ip,Q.M,s(f?Qf ?m '
- ,?; m p
.o . e .
,G sf _. s . . -
,-a
~
y.
/
~
[%l)
- n. :'
y < u g h, xy. w - .
w:~~./
=
sys 4n r
.. u n ~; w .n m {e u
- \'N4 "
, %v.
m % N?~72% ,K "gnn..m
,((w&~p.::%7 m -
sQ
^
, ~. .g " w s- ~ ~ ~?* '
~~ # ' ~ ' ' . *'* e ~ ' l il ;\ S ) ' _
T 9 - ,a , t un u ,,,,, .
i : gr; _
m
. ~ - . . _. -. . . _ _ , - - -
q . ~ .p. ;..,7.
. (. W"""""""" >
~
k
- t. .
s Q \- ,,
g
\
. m ,
.m .
%Nws '
,m fh. ,C,Ih fe e
. &p:"; M" %%.h-: %
71 *N,
. p. -
p;.'.w v, ed f
W g 3~ JtQ ..e 'r
' :: 2 -j A m'..u n,
^ *
, - r; Q_% - 4h i h- '4~u W iQX.,b'm COOPERATIVE POWER ASSOCIATION BOARD OF DIRECTORS I m mo,e ,o im im m, m ,,_ w . . ,c,o m n,m h - on m m,om i<a,,, m m o a
\ur l'iisu! cot south ( rntral lle.tro \s oi iation 5t lames n (,cr a!J stes ens Un m n ( ou n t s liu r al i in t r u \ s sin ia t ion %!ctTs I s e \ r t \1 h im nn's. l)ak ota l in t r n \ ssos ia tion I .t r m mut o n : ()f sille l. I ipke
\1i l i od ( ooperu n e Pon er \ s soi r a t nin (=lenior-lImer \ % heltert stn ic h asn a ( ooperat n e I in t r i, t in aton na \1artin Iohmann ( .oodh ue ( ount s ( oope r at n e flestru \ ssoi ia t m n. / t.m br ot a : 1)ar n in
\ nder sim Runestiuic lIntru \ ssin ia t u m \ le s.ind r ia. ( ilbe r t % hmit/ lin! n i sod I let '. r n l ooper atn e.
( Ic me n t s l{ i c h t front lei b.n k ( harles I \ nder son. I'r csiJe n t. \1erk er ( inipt r atis e I inht and l'on ri \ss u la t om I i ti h t iclJ. Pa ul los t ist \ n e-l'resalent \ cr alite ( ooper a tis c Henson-( Ir m e n s t Ib r n h t. Ircasnier f rJer atcJ Rur al i In tr u \ssin iat ion. i u k son h illiam h hit nes li l ar ibault ( ounts ( ooperatis c l In tr n
\ s soi i a t o m I r es t - 1 J u.o \1cs et Iake Regiim ( ooper atis e ! !n t r a \ s s ot i a t io n. Pel n .m R.i pid s l io n I r an k hauset \1mncsota \ alln f In t r u ( ooper a t n e lor da n: h. Ji u s o s, %tearns ( ooperat n e l ln t r a
\ssosiatnin \1cirose i nni 5tenerl h e!!s l in t r n \ ssin iat u m h rlls \1n haci lhorson l oJJ h aJena i In t r u ( ooper at n e haJena
\ ot Pu tur nl: ( .o r do n I'ms k r. Hl \l ( ) i In t r a \ ssui ra t io n \1a n k a t o
, MEMBER COOPERATIVES l
~ ~
Pvllf013Til@@-a {a s
- o I.
~
.d, we u Qy
'{
j
a g. .,
$h.
y 4,*
ff ,
3.
h bj
, h ' ' " ^
Y' ,~. , $ M i l
! e ar q ,,
, J. ,
( "~ j b . . . _ . t L.; + :
MEMBER GENERAL MANAGERS Front, lef t to right: William J. Motl, Wells Electric Association, Wells; Jon Heligowan,Todd-Wadena Electric Cooperative, Wadena Hen Janowski, McLeod Cooperative Power Association, Glencoe; Vernon Jutila, Runestone Electric Association, Alexandria.
Back, left to right: Albert Lennick, Redwood Electric Cooperative, Clements: Donald H. Larson, Steele Waseca Cooperative Electric, Owatonna: Donald E. Amundson, HENCO Electric Association, Mankato; Ramon Millett, Agralite Cooperative, Henson; Francis Fiebelkorn, Minnesota Valley Electric Cooperative, Jordan; leslie R. Schrupp, Hrown County Rural Electric Association, Sleepy Eye.
Not Pictured: C. Osca Soderlund, Dakota Electric Association, Farmington; Marvin J. Johnson, Federated Rural Electric Association, Jackson; Duane llenkelman, Meeker Cooperative Light & Power Association, Litchfield: Clarence Peterson, Lake Region Cooperative Electric Association, Pelican Rapids: Eugene P.
Sullivan, Stearns Cooperative Electric Association, Melrose; LeRoy O. Nelson, South Central Electric Association, St. James; Douglas E. Wallace, Nobles Cooperative Electric, Worthington: Cecil lloising, Goodhue County Cooperative Electric Association, Zumbrota.
2281 133 3
A REVIEW OF CPA'S 19 MEMBER SYSTEMS kWh % of kWh Miles of Number of Purchased increase Line Consumers During 1978 over 1977 Agralite Cooperative, Benson Ramon Millett, General Manager
- 2,724 4,401 ,
90,890,058 53%
BENCO Electric, Mankato Donald Amundson, General Manager 1,894 o,337 ,107,864, 492 8.1 Brown County Rural Elect. Ass'n.,
Slecpy Eye Leslie R. Schrupp, Jr., General Manager 1,310 0,281 73,436,424 o.0 Dakota Electric Ass'n., Farmington Oscar Soderlund, General Manager 1,804 2o,3o3 452,937,692 14.8 Faribault County Coop. Elect. Ass'n., Frost Donald Amundson, General Manager co2 1,3 o7 24,034,640 3.7 Federated Rural Electric Ass'n. Jackson Marvin Johnson, General Manager . 2,0o4 4.721 98,826,771 8.3 -
Goodhue County Coop. Electric Ass'n.,
Zumbrota Cecil 11olsmg, General Manager. 1,010 3,402 65,466,418 3o Lake Region Co-op Electrical Ass'n.,
Pelican Rapids Clarence Peterson, General Manager . 4,80o 17,052 209,391,337 8.4 McLeod Coop. Power Ass'n., Glencoe flernard Janowski, General Manager. 1,710 5,04o 98,388,560 5.1 Meeker Coop. Light & Power Ass'n.,
Litchfield Duane lienkelman, General Manager
- 1,004 5,847 103,638,384 o.5 Minnesota Valley Electric Coop., Jordan Francis Fiebelkorn, General Manager . 2,077 10,412 169,989,208 0.0 Nobles Cooperative Electric, Worthington Douglas Wallace, General Manager. 2,075 4,774 87,325,598 5.0 Redwood Electric Cooperative, Clements Albert Lennick, General Manager . 1,103 2,475 50,602,888 o.7 Runestone Electric Ass'n., Alexandria Vernon Jutila, General Manager
- 2,5oo 8,2o0 119,822,008 8.o South Central Electric Ass'n., St. James LeRoy Nelson, General Manager . 1,082 3,881 101,698,106 o.7 Stearns Coop. Electric Ass'n., Melrose Eugene Sulhvan, General Manager . 2,872 12,12o 202,257,659 7.8 Steele Waseca Coop. Electric, Owatonna Donald Larson, General Manager 1,704 o,003 94,643,880 4.7 Todd-Wadena Electric Coop., Wadena ,
Jon llellgowan, General Manager. 1,800 5.490 96,616,833 9.2 Wells Electric Ass'n., Wells William Mott, General Manager. 258 608 11,305,605 3.2 Total 3o,340 131,054 2,250,138,561 8o%
' Assumed position January 1,1970
, 228l 134
REPORT OF THE PRESIDENT AND GENERAL MANAGER nv-,w- , .-, v e,m e- --
Y-' l l L 1
[ t i
t.
f '
% t-f 7 .
- f. -Q 4 ';ase. .
/
8 9.g n l ,'
k%.~ A d:;; A _ m Lm e ey m i?[aA
?
Charles Anderson T.V. Lennick Presiden t _ ,
_ General Managcr
\., .
=
During the past year, Cooperative Power Associa- that we will have an adequate power surply in 1o80.
tion made significant strides in meiting its members Construction continued through the year with major energy demands through successful construction advances made on Units I and 2 and on common progress and organizational development. In many equipment. The water pretreatment, demineralizer, respects, it has been one of the most productive auxiliary boilers and most coal conveying equipment periods in our history. were turned over for CPA operation. A number of We completed the construction of the St. Bonifacius Problems during the year such as the emergency Peaking Plant, our first combustion turbine unit. The generator failure and the col conveyor motor failure 47 megawatt generator, designed to produce a sma!j were successfully ove rcome, amount of electricity to satisfy demand during peak We encountered some construction delays that caused Unit I commercial operation to slip while the load periods, provides for emergency power needs and has greatly increased the flexibility of our system.
abnormally severe winters of '77 and '78 also contributed to additional delays.
The plant was completed on schedule and under To alleviate some of the impact of these delays, Unit budget - a significant accomplishment when con.
struction delays and escalating costs are becoming the I was put on mechanical and electrical construction overtime from June through December. By the end of norm.
December, major construction on Unit I was nearing After the many long delays in the construction of completion. Chemical cleaning and steam blow were the Minnesota segment of the de transmission line, completed in early spring 1970 and we feel confident the last structure was erected on September 26,1978. that Unit I will be commercial by the target date of Testing of the line began almost immediately and is July 1.
continuing in preparation for commercial operation. Unit 2 construction continued with major progress Our only disappointment is that vandalism on theline being made on the steam generator and turbine continues, costing our members millions of dollars in generator assembly. The majority of the steel has extra labor and materials. Despite this problem been set with as.:mMy of the water wallscontinuing.
though, we anticipate that the line will be transmit- The turbine rotors have been installed for alignment ting power to two-thirds of rural Minnesota by late and blade clearances. This continued progress should summer 1970 lead to the scheduled commercial operation date of Progress at the Coal Creek Station is assuring us November 1,1980.
2281 135 8
In preparation for the operation of the plant, coal Tyrone unit that may well force us to change our mining at the Falkirk Mine began in late 1o78. The plans. We have joined in an appeal to the Wisconsin assembly of the coal handling equipment was com- courts to reverse the Wisconsin Public Service pleted on schedule and the conveyors are now moving Commission ruling and we will monitor the progress approximately 20,000 tons of lignite coal per week to of the appeal and assess our position continuously to the plant where it is being stockpiled for future use. determine if the Tyrone Energy Park remains a viable Since an average of oooo tons of coal will be needed option for our capacity needs.
every 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> when Unit I goes on line, production Declining oil, gas and fossil fuel reserves are at the mine will increase greatly this summer. creating a major change in the pmver supply industry Though our members will be assured of a reliable and causing us to search for alternative sources of and adequate source of power from the Coal Creek power. CPA is continuing to study the possibilities of Station, the price for that Service wili not come as the breeder reactor, heat storage and methanol fuel cheaply as it has in the past. When the plant goes on conversion. In addition, we are participating in an line, ra tes will increase. This is due to the overwhelm- experimental wind generating project to determine ingly high cost of building new power plant % whether solar energy could become a more viable Construction costs have soared 300 percent in the source of power in the future.
past 12 years due to inflation, pollution control The complexities of power supply in the rapidly regulations and high interest rates on borrowed changing world today can of ten create additional capital. In 1907, a utility could plan, design and problems and demands for a utility. With our rapid construct a generating facility for as little as $150 growth these past few years and with a maior power
$1o0 per kilowatt of installed capacity. Today, plant coming on line next year, CPA has been subject utilities are paying $700,$800 and even more per to many changes and developments within the kilowatt of installed capacity. organization. Last year we hired the management The final cost of Coal Creek will be about $700 per consulting firm of Theodore Barry & Associates to kilowatt of installed capacity. Though this cost is examine our operations and goals to ensure that we high, it is still below the national average of about have continued to function efficiently throughout
$850 per kilowatt. If present trends continue, coal our rapid development. Their report reflected many fired plants may cost as much as $1000 per kilowat t of of the frustrations and intricacies we face as a power installed capacity in the early lo80's. It is evident, supplier and as a growing organization and recom-then, that rate increases will be needed to continue mended several areas for improvement. Many of providing the dependable electric service we have these recommendations are being implemented in the become accustomed to. hope that CPA will become a more unified and With these rising costs in energy, it is necessary efficient organizatmn.
tha t we continue to prat tite c onservation and become One of the more visible changes we will be making involved in load management. CPA is pursuing its is a move to a new headquarters building. Presentlyin voluntary conservation program whith enwurages the planning stage, a new building will give us needed members to reduce their use of elet tritity during peak space for a growing staff and a new computer system periods. New load management programs are being that will help monitor loads and control generation.
developed to assist our members in the wise use of We are confident that this improvement, and others, energy. The success of these programs indicates that wdl allow us to better serve our quarter of a million our members realize the power problems we face and members.
are willing to maximize their use of each kilowatt The major acmmplishments this year - and many hour of the smaller yet still important ones lef t unmen-Conservation alone, however, is not eliminatmg tioned - were achieved only through the dedication the growth in electrical useage. During 1o78, CPA's and expertise of our directors, managers and staff.
energy sales rose S A percent over the previous year. We are grateful for their service. As we continue in If this trend continues, additional generation will be our functions and responsibilities of the past and required for the mid 1080's. enter into the new projects and challenges of the CPA recoginites its responsibility in meeting its wming year, we will depend even more on the skills members' f uture power needs and is currently and professionalism of our employees and the examining its alternatives. Our long-range plans wisdom and foresight of those who determine the include the possibility of building anothergenerating policies of CPA.
plant, purchasing power from other utilities or becoming joint owners in another plant in the area. Respectfully, Our most mncrete plan, the Tyrone Energy Park, suffered a maior setback recently when the Wisconsin Public Service Commission denied the construction permit application for this 1100 megawatt nuclear h g[ ,
/
s Anderson unit. Combined with the difficulties experienced at g"a I C"' ' U"d "
the Three Mile Island nuclear plant in Pennsylvania, we are faced with a very difficult decision to make.
While we firmly believe that the answer to the energy yj e <W problem includes increased development of nuclear T. V. Lennick power, we are faced with potential delays on the General Manager o
2281 136
FINANCIAL STATEMENTS 1978 ANNUAL REPORT COOPERATIVE POWER ASSOCIATION IINANCI AL lilGilLIGilTS (lX)l.l. ARS IN TIIOUSANDS) o o
1978 1977 CIIANGL Operations:
Operating Revenues . $ 40,041 $ 37,083 + 7. 8 c ,
kWh Delivered (in milhons) 2,250 2,081 + 8oc kW Peak Demand (in thousands) 480 488 + 0 20 Port hased Power . $ 32,117 $ 30,400 + 5.3e ,
Net N1argins 5 2,421' $ 2,003 + 20.oc <
financial Position:
I lettric Utility I'lant $512,783 $310,45o + 50 oo Construction Work in Progress-CU Projet t . $455,312 $201,378 + 51 7' Coal Niine $ 52,343 21,23o + 115 ON Outstanding Long-term I)cbt. $550,573 $328.130 + o 7. 8 <
N1 ember and l'atron Equities 5 8,385 $ 5,004 + 40.oc 2281 137 E d (IM)I$$$$,
TFEASURER'S REPORT The nnantial statements of Cooperative Power the Coal Creek Project and various other CPA Association together with the auountant's opinion projet ts under t onstruction. Long-term financing for f rom l)cloitte liaskins & Sells appear on pages 12 to these projects had been obtained primarily through
- 18. loans insured or guaranteed by the Rf A. Ilowever, The statements for 1078 show once again a during 1978, a tax-exempt pollu tion (ont rol bond resumption of the stronger energy consumption issue amounting to $50 milhon was sun essf ully trend that prevailed during the last ten years. Af ter a pined as one of a grouping of issues guaranteed by modest increase approximating 5% in 1077, kdowatt CfC. In addition, the first phase of a leveraged lease hour dehveries to member systems rose 8.0%in 1078 finanting for t ertain (oal mining equipment was
~I his rise reflet ts a 5.29 inc rease in average usage per t oncluded in 1978 with (ompletion of another larger tonsumer while the nun ber of wnnet ted tonsumers portion sought for 1o70 1:ach of these finanting continues to show a consistent mcrease,34 m lo78. alternatives has at hieved significant interest (ost Revenues were up 7.8% for 1o78, whghtly less than reductions for the tonsumer.
the int rease in ki!owatt hours delivered, indicating a As CPA's capital retpurements grow, we intend to f rat tional de(line in the overall average tost per kWh expa nd on these opport unities or seek other f mant ing for the first time sinte 100 0. Sinc e the enJ of last yea r, alternatives m an ongoing ef f ort to provide power at rate int reases for 1070 flave been institutcJ to reflect the lowest tost for our member systems and for their t osts incurred in the Coal Creek Projet t. Operating t onsu mers.
margins were slightly higher than last year, and total margins rose 21" reflecting higher interest income Sin (crely, Iates and larger i redits for CPA's own capital used in g er hnant mg projet ts Juiing t onst rut tion. px
[-@
( onstrut tion at twity continues at a very high level as (onstruction expenditures totaled $202 million of Clemem Ulbrit ht which $18f nulhon represented CPA's share of the construt tion c osts of the Coal Cicek Prolet t f or the -#
generating plan t, the t ra ns mission lines, and the -
finanting of the wal mine. 'I he remaining $14 mdhon are prmcipally expenditures for the Tyrone Energy '
l
}
44 l' ark Nuticar I'lant, an oil-fired peaking plant at St.
lionif at ius, various transmission extension projec ts, b a nti a nut rowave t ommt.nitations net work and a load jl \ ~ :d monitoring system. The Tyrone Energy Park wn- c.
st rut tion schedule has sint e suf fered a serious setbat k when, m March lo70, the Pubhc Service
,y 4
Commission of Wisconsm Jenied the applitation for a '
Certificate of Need for the Fyrone Nutlear Projet t. g '
!)uring the last year, lines of cretlit obtained %p[ p through the National Rural Utihties Cooperative f' e -
finante Corporation (CFC) were expanded to $70 Ol. }
j '. ' I'f N
/
million to provide interim wnstrut tion imancing for f '
f o,
} fi@
2281 l')B g t COOPERATIVE POWER ASSOCIATION 8
,OV
,OE ENERGY sat ES INCREASE INC R E ASE g: A ll 1003 78
- m. 84
.---- -- - ------ ----- ----r---
v
, 3 v
4 i y
-RATE Of GROWTilIN kWh DEllVI RED FOR YE AR 0
e gaes jo73 10 8 Of ( ONSUNIE RS 'Of INCRE ASI. INCRIASE o
joen 73
\\t. 3a n
._--- ------------ ~ .-----------------
, 2
~
R ATE OF GROWT11 IN
[ NUMBER Of CONNICTED CONSUMI.RS AT END OF T EAR (,
g l Og , ,% !a"3 ! b E N E R( ;' . ER CONSLt.\1ER ,gy INCRE AS! INCREASE s ',
s goo--
4i A_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _T\(. #___ ,
--RATE Of GROWTil AVERAGE kWh DEllVERED 0
I'ER CONSUMER (based on v average c onsumers at beginnmg and end of year)
<,i (l
jong lo73 1479 t 3 0
CDOPERATIVE PC A'ER
^** " ^ *
- 10 YEAR
SUMMARY
POWER SllPPLY SYSTEA1:
for the Year: 1978 1977 197o 1975 Revenue from member systems (c) , $ 40,o23 $37,038 $30,802 $24,332 Total operating margin (deficit) (c) $ 1,548 $ 1,47o $ 1,o75 $ 872 kWh delivered (in millions) 2,250 2,081 1,075 1,705 Cost per kWh delivered (in mills) 18.1 18.2 15.o 13.o kW peak demand (in thousands) (a) 480 488 438 412 At Year End:
Miles of transmission line 1,232 1,223 1,200 1,180 Cost of utility plant in service (d $41,75o $31,248 $28,815 $2o,o20 Number of employees . 218 141 50 28 AIEA1BER DiSTRIBllTION SYSTEA15:
For the Year:
Number of member systems . Io to lo lo Combined revenues (c) . $ 70,230 So 2,083 $52,305 $ 42,570 Avt rage kWh per consumer (b) 17,374 1o,522 1o,217 15,218 At Year End:
Miles of distribution line 3o.340 35,047 35,522 35,087 Number of substations . 221 215 210 20o Number of connected consumers. 131,054 128,084 123,814 110,753 Number of employees. o4o o4o o05 Sol NOTES:
(a) liased on demand billed to member systems. 9t (b) Based on average number of consumers at beginning and end of year. } d b' iI 'I 0 (c) Dollars in thousands _. , , . , . , . ,
Ly[]h! : 'l) In ,Di ,(jifs hl iS! H J WMn lEMUhulidel; a 10
1974 1973 1972 1971 1970 1960 19o8
$ 17,013 $ 1 o,247 $ 13,875 $ 12,27o $ 10,520 $ 7,041 5 7,718
$ 753 $ (2) $ (22) $ 105 $ (1) $ (50o) $ 25 1,o23 1,505 1,455 1,311 1,224 1,032 451 11.0 10.8 0.5 0.4 8o 7.7 8.1 3o3 334 335 300 282 245 220 1,141 1,0o0 070 0o4 854 741 So4
$24,351 $ 20,587 $ 10,043 $ 17,885 $ 14,130 $ 0,o31 $ 5,073 17 11 10 10 0 8 7 10 10 10 10 lo 18 18
$35,2o5 $30,701 $28,047 $25,585 $23,120 $21,054 $ 18,474 14,221 13,005 13,818 13,014 12.c4 8 11,815 11,248 34,740 34,351 34,088 33,854 33,371 31,080 30,844 203 102 181 174 170 158 140 110,150 112,112 107,o81 102,008 08,570 04,070 00,373 58o So2 555 541 55o 525 484 9
O !h )1 l', '
([ ! 'fi Aj j,'i
, jj Q)] j\ d; Am 2281 141 11
COOPERATIVE POWER
~ ^~
ACCOUNTANTS' OPINION To the lhiard of Directors of Cooperative Power Association:
We have examined the balance sheets of Coop-erative Power Association as of December 31,1078 and 1077, and the related statements of revenues and members' patronage capital and changes in financial position for the years then ended. Our examinations were made in anordance with generally auerted aud. ting standards and, accordingly, included suc h tests of the a(counting records and such other a uditing procedures as we considered nec essary in t he
( irc u m s ta nt es.
In our opinion, the aforementioned financial statements present fairly the financial position of the Association at December 3I,1o78 and 1077, and the results of its operations and thanges in its financial position for the years then endcJ,in conformity with generally aucpted auounting principles applied on a (onsistent basis.
Deloitte Ilaskms & Sells Minneapolis, Minnesota April 10,1970 mmrl ud I42
^ m o w pnrg g g ue -a U_,u dL&Gus 12
BALANCE SHEETS December 31 ASSETS 3,73 jo77 ELECTRIC UTILITY PL ANT (Notes I and 3):
Plant in service .
$ 41,755,754 $ 31,247,801 Construction work in progress . , 471,027,038 300,208,488 Less accumulated provision for depreciation and amortization. (7,115,387) (o,051,314:
Electric utihty plant - net , 505,667,405 334,404,075 COAL MINE (Note 3):
Coal leaseholds 2,3oo,004 Equipment under construction 23,028,402 o,724,oS3 Advantes to Falkirk Mining Company for development of coal mine 2o,053,4 o 4 14,511,280 Coal mine 52,34 2,8oo 24,235,033 OTiiER ASSETS AND INVESTMENTS:
Funds held by trustee - Pollution Control Revenue Bonds (Note 4)-
Construction fund 21,925,738 Debt servne reserve fund. 5,078,7o6 Investments - at cost (Note 5). 4,142,044 1,2o7,108 Total other assets and investments 32,04o,548 1,2o7,108 CURRENT ASSETS:
Cash - general . 200,204 250,585 Cash - restricted . 401,750 403,473 Au ounts reteivable o,520,107 1,852,54o Coal inventory (Note 3) 800,520 Fuel oil inventory - at average (ost 175,185 Deferred power costs (Note 2) 1,422,470 444,889 Prepa ymen t s . 172,731 1o0,287 Total current assets . o,702.114 o,111,780 UN AMORTIZED DEBT EXPENSE , 1.055,750 __
TOTAL ASSETS. So00,814,o77 _$3co,014,88o LIABILITIES MEMBER AND PATRON EQUITIES:
Membership, $ 2,100 $ 1,000 Patronage capital . o,307,oo0 5,887,000 Members' contributions for debt service 74,8o6 74,f,5o Total member and pation equities . 8,384,65o 5,063,7eo LONG-TERM DEBT (Note 3). 550,573,005 328,135,o84 CURRENT LIABILITIES:
Long-term debt due within one year. 725,000 717,000 Accounts payable. 10,18o,727 15,822,846 Construction retaina>;es payable 1o,708,107 12,535,102 Mr .mbers' deposits 1,630,003 1,630,003 Property taxes accrued 1,178,213 036,190 interest accrued . 2,120,387 103,181 Other expenses accrued 200,300 16o,634 Total current liabilities 41,856,02o 31,020,136 TOTAL LIABILITIES. So00,814,o77 $3eo,010,886 See aaompanyng Noto Is Finanaal Statonents. l tr ' d 3' ~ Ri m G
! U f - ! i
,,hlu'll'
.~ .-
13
COOPERATIVE POWER ASSOCIATION STATEMENT OF REVENUES AND MEMBERS' PATRONAGE CAPITAL Year ended December 31 1978 1977 REVENUES:
llilled revenues and patronage capital $ 42,100,528 $38,o78,804 Less billed revenues in excess of power costs (Note 2). 1,1o5,852 00o,100 Net revenues . . 40,94 0,o7e 37,982,o74 OPERATING EXPENSES:
Purchased power . 32,11 o,oo8 30,40o,254 Generation costs . 238,oo l Transmission of electricity by others. . I,788,002 2,182,123 Transmission expense - operation 253,105 231,721 Transmission expense - maintenance 234,887 284,o77 Administrative and general expense 1,479,o43 1,100,547 Depreciation and amortization 1,058,531 744,045 Property and payroll taxes 1,340,074 882,740 Interest and amortization of debt expense - net of interest earned on construction funds held by trustee. 32,528,497 15,022,340 Interest (harged to construction - credit (Note 1) . (31,oS I ,827) (15,420,048)
Total operating expenses . 39,392,331 3o,50o,308 Ol'ERATING MARGIN . 1,548,345 1,47o,3oo OTilER INCOME:
Allowance for funds used during construction (Note 1). 501,0o0 308,707 Interest income 200,354 82,738 Distribution and financing cooperative capital credits. 80,022 44,922 Total other income . . 872,345 52o,307 NET MARGIN. . . 2,420,o00 2,002.733 PATRONAGE CAPITAL AT llEGINNING Of YEAR . 5.887,000 3,884,2o7 PATRONAGE CAPITAL AT END OF YEAR . $ 8,307,ooo $ 5,887,000 See auempanying Notes to Financial Stateme
\f 14
STATEMENT OF CHANGES IN FINANCIAL POSITION Year ended December 31 1978 1977 FUNDS WERE PROVIDED BY:
Net margin . . . . .. $ 2,420,oco $ 2.002,733 ltems not requiring outlay of working capital in current period:
Depreciation and amortization .
1,058,531 754,735 Amortization of debt expense 3o,018 Distribution and financing cooperative capital credits . (80,022) (44,922)
Interest earned on debt service reserve fund held by trustee (lo7, loo)
Funds provided by operations 3,268,051 2,712,54o Repayment of advances by Falkirk Mining Company . 02,00o Proceeds from issuance of:
Long +erm debt (net of funds held by trustee) . . 181,1o5,087 173,olo,000 Notes payable - to be refinanced 15,300,000 13,500,000 Memberships 200 Total 100,82o,004 180,828,54o FUNDS WERE USED FOR:
Electric utility plant and coal mine expenditures 201,567,879 20o,528,501 Reductions of long-term debt 718,889 711,501 increase in investments . 2,704,824 283,003 Debt issue expense on Pollution Control Revenue Bonds 1,001,768 fotal 20o,173,3o0 207,523,005 (DECREASE) IN WORKING CAPITAL . $ (6,34o,45o) $ ( 17,oo5,440)
DETAll Of (DECREASE)IN WORKING CAPITAL:
Cash and temporary cash investments . 5 (43,005) $ (4,710,18o)
Accounts receivable 1.oo7,561 1,023,565 Inventory. 075,714 Deferred power cests. 477,500 (70,252)
Prepa ymen t s . 12,474 135,707 I ong-term debt due within one year. (8,000) (14,000)
Accounts payable. (3,3o3,881) (5,077,087)
Construction retainages payable . (4,173,005) (8,010,081)
Interest accrued . (2,026,200) (18,739)
Property taxes and other expenses accrued . (3os,oo8) (45,376)
TOTAL. $ (o,34o,456) $ (17,o05,449)
Su accompanying Notes to Financial Statements.
A q{4 4 #=
m
,6 4
, - um p : fTa p "l rm s,., ,
i
) !
NOTES TO FINANCIAL COOPER ATIVF~
STATEMENTS co m ASSOCIATION
- 1.
SUMMARY
OF SIGNIflCAN T ACCOUN11NG POEICIES System of Accounts - T he au ounting reuirds of Cooperative 1%ver Assotiation (CI'A) ainform to the uniform system of auounts prescribed by the Federal Energy Regulatory Commision and the Rural Elet trification Administ ration (REA).
Under sut h system, utihty plant is statcJ at original (ost and thetost of additionsincludes(ontrat ted work, dire (t labor and materials, allotable overheads, interest (harged to constru(tion, and allowante for funds used during construt tion.
Interest (harged to (onstruction (borrowed funds) and allowante for funds (other than borrowed funds) used f or (onstrut tion is in(luded in tonstrut tion work in progress and t rediteJ to operating expenses and ot her intome, respe(tively The rates appheJ to (onstruc tion work in progress relict: the at tual mterest rates for borrowed funds (reduted by the ef fc(t of interest earned on tonstru(' ion f unds held by trustee)and the prevailing short-term investment rates for other than borrowed funds.
CPA is exempt f rom federal and state mcome taxes.
Depreciation and Amortiration -- The prove > ions for depreciation and amorti/ation of elettric utihty plant are provided on the straight-line methoJ based on estimated servite lives of the property. Such provisions as a per(ent of the atcrage balan(e of depreuable proper ty were 3.17% in io78 and 2.08 N in lo77 Reclassifications - Certain ret tassifications have been made to 1077 finantial statements to uinform to the lo78 presentation.
- 2. MEMill:R Si RVICE CON TRAC TS CPA has long-term wholesale power (ontrat ts with eac h of its members whereby it agrees to provide allof the power required by the member system to the ( xtent that CPA has sut h power available. Power is pro-vided to its members at tost and, at t ordingly, any variation between (ost (def med as power u>,ts int urred less t ertam deferred power t osts inc urrcJ in Dnember af ter the billing to its members) and t he aggregate amounts t olln ted is incluJcJ in attounts ret ewable or att ounts payable In addition to tbe tost of powcr, the members agree to pay a billing rate whit h is prolet ted to (over all other(osts and netessary reserves (operat-ing margins) 3 POWER SLfPPI Y EXPANSION AND FINANCING CU Project - CPA is partiopating to the extent of Som in the omstru(tion of two 500 megawatt generating units in North Dakota and related transmission faohties (CU Project). The first omt is sc heduled for completion in lo7o with t he snond unit to follow in 1080 (See Note o). The unuscJ finanting (ommitment from REA for either msured or guaranteed loans for the CU Project is $108 mdhon at Dnember 31,1o78 (ot whic h CPA's share is $11I million).
Coal Mine - CPA and the other co-owner United Power Association, have entered into an agreement with Falkirk Mming Company forits development ef a wal mine adja(ent to t he CU Projn t wha b will supply the plant's fuel supply. The to-owners are required to provide finanung for all wsts associated with the development of the mine CPA's iJvan(es at Dec ember 31,1978 have been uscJ by Falkirk Mming Company as follows:
Coal lands and leascholds $ 1,010,750 Coal mine equipment 4,201,701 Eess allowante for depreaation, depletion and amortiration . (o2. coo)
Construction in progress . 10,203,4 l o Mine development wsts 1,445,152 Working capital 3,223,018 Total advances -.. -...
$ 2 0,053,4 o 4
.^
m rm WsuhW, G L rm P h 2281 146
NOTES TO FINANCIAL STATEMENTS C()N11NUFD Coal wdl be purthased f rom Falkirk N1 ming Company at the wst of produt tion (including depreciation, Jepletion and anmrtuation) plus an agreed profit, Prite of u>al Juring the development perioJ is set bascJ on the per ton wst of produt tion estimatcJ to be int urrcJ af ter the development period plus an agreed profit.
Production costs in cuess of this prite (less an agreed profit) are intladed m mine Jeselopment costs.
Falkirk Niimng Company will repay the advantes to CPA in an amount equal to the depretiation,Jepletion, and amortvation Coal mine eqmpment is amortized on a straight-hne methoJ over their estimated useful liv es. Amortvation of (oallanJs is t alt ulated on the unit s-of-produc tion method based on estimatcJ rn over-able tonage . N1:nc development (osts will also be amorti/cd, af ter the des elopment perioJ, on the units-of-prod ut tion method.
'I he (o-ow ners are also having ter tain t oal minmg equipmen t t onst rut tco The equipment is present!y under tonstrut tion at the ioal mine anJ the to-on ners tentatively plan to finante the eqmpment on a long-term basis through arrangements for a les erancJ lease The(o-owners have also unt onditionally guaranteed a leverage lease whah was entered mto by the 6oal nunmg wmpaue for approximately $5 nulhon tot wha h CPA's share of the guarantee is $2 8 milhont I yrone i nergy Park Nuclear Plant - In 107~ CPA entered into a partiopatmn agreement with Northern States Power Company and two other clet tra utihties providmg f or a 17 l' ownership by ( PA in the I'vrone Energy Park project, an 1100 megawatt nuclear unit to be wnstrut tcJ near 1)urand, Emnsin. A I078 supplement to the agreement hmits t PA's potential (ommitment toinvest m the pro:n t to $12,000,000.
When this amount teases to represent a 17-I ' pro-rata share of total projet t (ommitments, t hen C PA's per-t entage ownerslup will be r educ ed pro rata CPA (an dnide at a ny time to int rease the $12.000,000 hmit.
( PA has tmantcJ the projet t on an mterim basis through a term loan wha h is due m 1082 f rom National Rural Utihties Cooperative I mant e Corporatmn (Cl C L If the nutlear pla nt is approved by t he Pubia Servac
( omnussion of htonsm Nec Note o regardmg t urrent Comnussmn demal of approval), CPA has a loan guarantee wmmitment of $221 nulhon f rom RE A
- 1. I ON( Ul l R N11)Lli r
!b ember 31 1078 iC~
N!ortgage notes payable to UmtcJ States of America:
2 ' due through 2011 $ 2 3,0 83,010 $ 21,MIM81 5 . due 1o70 through 2011 3. 370,1 l o 2,105.000 l ederal f inant ing Itink Promi-ory Not es - f r o m 7 12 ' to 003~ Jue 1o82 through 2012 130.o38.000 2s1,403.000 CIC ter m loan due 1082. mterest at !!2 ' . over prime 7,100,000 City of Underwood, North I)akota, Pollution Control Revenue llonJv Serial lionds - f rom 5 00' to o ~5' = duc 1o80 through 1000 20,005,000 Ferm llonJ,7 00' Jue 2008 20,305,000 Notes payable - to be refinant ed . 35.000,000 20.000.000 Total 531,208.005 328,852 081 I ess due withm one year . 725.000 717,000 lotal $550,573.005 $328,135.o8 8 CPA has hnes of tredit of $70 nulhon from CFC for interim finanang fo its power supply proiet ts Out-standing notes payable have been classified as long-term Jebt sin (c wmmit ments have been obtaincJ f rom the RE A for long-term financmg of the maior power supply proiet t under construttion The Pollution Control Revenue liond, are unconditionally guaranteed by CFC. The bond agreement requires that the unexpenJed portion of the bond proteeds t e held in est row by a trustee in a wnstrut tion fund to reimburse CPA for wsts when inc urred m wnstru(tion of the pollution wntrol faahties at the CU Proin t. T he agreement also requires that a debt service reserve f und be estabhshed for the last principaland intere3t payment of the term bonAghg tgm bonds are subiect to smking fund redemption at 100% of the
'HI J>! 17 A' il M I'A ij lf ,
H) Wi il [ !W, ' j" 2 .2 8 ', 14
NOTES TO FINANCIAL STATEMENTS CON ~IINUED principal amount prior to their stated maturity date beginning in 1000 through 2008.
All assets of CPA are pledged as collateral to the long-term debt.
- 5. CAPITAL TERM CERTiflCATES When CPA joined CFC in 1070 they agreed to pi ahase 3% Capital Term Certificates of CFC tnrough 1984. I'uture annual purchases, which are based on operating revenues, are estimated by management to aggregate $4,511,000. In addition to this agreement, the Pollution Control Revenue Bonds agreement re-quired CPA to purchase 3wertificates in the amount of $2,515,000in lo78. Investmentsin 34 Capital Term Certificates amounted to $3,005,773 at December 31,1o78 and $1,200,o53 at December 31,1977.
- o. CON flNGENCIES AND LITIGATION On March o,197o the l'ublic Service Commission of Wisconsin issued an order denying the application for a (ertificate of need for the proposed Tyrone Energy Park Nucle e Plant in whic h Cooperative Pmver Asso-(iation is a participant (Note 3). An appeal of this decision has teen filed in court. CPA has included
$o,lo2,000 (culuding $ 1,015,000 of interest charged to umstruction .:nJ other charges) in construction work in progress at December 31,1978 for this plant. Under the participatien agreement CPA will be liable for an additmnal $2,808,000. In the opinion of management, if the nuclear plant is abandoned, CPA will transfer the uists to deferred (harges and amortire the oists to expense over a period of time and recover such amortiration through bilhngs to its members.
A lawsuit has been instituted by opponents of the CU Project in the United States Ibtritt Court for the District of Minnesota. The defendants in the lawsuit were the United States of America, the Secretary of Agriculture, the Administrator of the REA, the District Engineer of the U.S. Army Corps of Engineers, United Power Assotiation, and CPA. T he object of the lawsuit is to obtain a dctermination that the govern-ment proteedeJ improperly in approving the CU Projett and in providing the cooperatives with loans or loan guarantees for the finanting of the proicct and the financing of the development of the toal supply.
The plaintiffs sought a temporary restraming order to prevent any work en the project or any further fundmg of the project during the pendency of thelawsuit. This wa, denied. Thereaf ter the plaintif fs sought a preliminary injun(tion for the same purposes and on Marc h 10, t078 this was also denied, the court findmg, among other things, that the plaintiffs had failed to demonstrate substantial probability of suucss on the merits and that the plaintiffs' delay in filing the a(tion would bar the plaintiffs from the iniunctive relief sought. In the opinion of CPA's legal counsel there is not a substantial probability that the plaintiffs will suu eed on the merie in this ac tion. If the courts should ultimately determine that RE A loans or loan guaran-tecs are not available for coal mine development, however, it would be ne(essary for the tooperatives to repay funds advanced for that purpose and to arrange alternative finanting.
In December 1977 a second at tion was brought in the same court by opponents of the CU Proictt, naming CPA, United Power Association, and a number of other parties as defendants. The lawsuit asserts claims under the federal Civil Rights Act,(laiming that the defendants have deprived plaintilfs (landowners and citizens along the transmission line right-of-way) of their umstitutional rights by instituting civil and criminal actions against them in the state tourts. T he civil actions complained of have indudcJ condemnation pro-(eedings to autuire the nec essary ry.ht-of-way for the transmission line, ac tions to enjoin interference with construction, and tlamage (laims for such interferente. A motion for a preliminary injunction in this proceeding has been denied and many of the defendants (although neither of the cooperatives) have been dismissed from the lawsuit in the opinion of CPA's legal counsel, the plaintiffs are not hkely to prevailin this action.
Actions and proceedings are pending to acquire right-of-way by eminent domain in Minnesota and to restrain opponents of the CU Project from interference with construction.
In the opinion of t he management, should any litigation or proceedmgs postpone the sc heduled completion date of the CU Project, suth delay could significantly increase the costs of the project and, subsequently, increase the rates necessary to reawer the higher costs.
CPA has a long-term purchase power agreement with a Wisconsin Cooperative. On June 30,1o78, the Wisconsin Department of Revenue notified the Wistonsin Cooperative of an additional assessment of sales tax on sales of power under this agreement. An appealis being prepared to the Tax Appeals Commission of Wisconsin. The outcome of this case is uncertain at this time. If the appeal is unsuccessful, CPA may be required to pay; approximately $g0 00 Such an amount wouhl be reuwered through billians to its members. . !It d I lh i 18 N;U;M bl!'11!!;;'!nUh]t]M., 220 $b
RESEA RCil CONSERVATION When the cost of energy began to ri>e and ou r sou rces of traditional Coorerative Power Association belieres two effective ways of fuel > sta rted to diminish, power suppliers bega n sea rching for new easing our energy problems is consumer conservation and load energy resnus. Some of the potential resouras being researched management. Afember-consumers are encouraged to restrict their and developed are as old as the wind. Others are the result of energy use during real periods and !o wisely use off real power modern technology. whenever possible. Not only will this help save fuel re>ou rces. but Some of our newer energu options are not yet technologically il ""IE "I'0 "'55'0"*"* "' 5" ""I'0II5"E '5'5"E I W " '"I*
Education programs enwuraging the use of insulation andenngy feasible or economically practical while more conventional efficient applianus have also ban dweloped to help our membus sources are becoming so regulated by government agencies and so adapt to the change in energy useage.
wstly that they are nearly impossible to develop.
Ollier load management efforts a re being developed by the pown Resnach is still continuing, however, and with it has emerged a supply industry and if pronn sucassful, will provide us with new philosophy - the wise use of power. For many years. energy signWcant sanngs in gennating w>l in the future.
vererres were thought to be abundant and power suppliers encouraged the world to male u,e of them. Talay. rower surpliers beliere that we should continue to use and benefit f rom our energy INCREASING ELECTRICAL DEhlAND supplies, but that we should use them wisely.
Though con > creation has slowed load growth across the country.
It has not stcrped the increase in electrical demand. Adequate generating systems must be built to meet this growth. The fuels
, s available for ge naation a re guiding power surpliers' decisions in V
. , Q }l\ the installation of new plants and influencing the nation's future lD,hh
(
) l) J , ! L-~
- )d e
Yu ] energy supplies.
.. - . . . . . _ _ - . _ _ . . . . . . . . . . _ . ___ _ _ . - ~
_.__-._s
.i mwwa" ?
. "4 2
- 4 3 ,
4 ,.,
>u a s . s y
~
- g. y 9
g ^' ; ,
- ^
W- . , ,_
e +
- ,~ . .
~ -
, 1 j;
, ,^
~ =
y .
~ .a r m js.a. 7.y /< '.'*.1'
- . . 1,
,i; , ,
, , l t
y r s ~. .- e
- i :, 4 s
~
7 g 9 f.r. g "*. /' "* , . ' ,
[,.
/ 1
- v.,1Q"* s %ggy L , gd M ,mc ?
, - x; ;
, h
- g.
a N+
d
,s- ,- t cr i p t %: 4
.y w v t O ;.. %.; #. c9 %f i
t p.v.
e V. _ . 8~
" . - %79 L5h Sv~~ * *
?
N y.;' ss
, /
Y .
n ; y y$fQ f gf" ' - -
M;
. d y ;,
. .. ; .. 1 ...- : ' - .. % , * '
v ..
- ' ,y4 , ' ?l l , ,
E, '
, .g ,
(- ) ] .
- y to .
.o - .- ,
l .. @
j N',,, ,P ,e [ g;.w- ~ ' -
('- i v
6,' y a < w j
- y a % y yj
. . . . j~,- % .
+~ .
's % b . 5. . e
- g. -a -- ~ '
'*e'y , +3 . ,
'.'E, T : .
g,yy,, g _g __, , [
d
- x
. .- y i
- . w w
,' , . 3,
- s. p *- :
~ s , ,
4 , , y ,
. ~' ' ~
f , . 4 y
}
e ,
l *.
, 'e
%.W y m .
-.4 3 ,
y 4
e n
c j
./ y
~ ~ ,, d, ,) ' - "
. ~
s.~ ~ ~ .
_e r._. , _
Ihe Dickinwn Converter Station,near Buffalo, Minnesota. At the Terminals. Current from the 1400 l' e, s con erged toac power before it is distributed to rural Minnesota. q 19
9 v.
- e. ,
- Y g
+ %
- # ( 'l *N f 1 )
r . ,
Y ' I * ". $
/ s he. ,
'g?** ,* y firs ^Q/", - y ', --Q Lh 4 '.s ,# .
p;-(*
s.
3,
- i s
' s s .'
< #5 b ee
/
9 v.
- * ^ - , . . .. . .
'f g,,, . $W~
4 s, I M* , ~ .
h'^c l g'/.~ . . T M :2>"sef .
,,, , . #:s -- # .e #'
+,-p' .'
x a- w . .e ,
' ik ^ ~l _f.
The Coal Creek Station, an 1100 megawatt lignite fired generating plant near Underwood, North Dakota.
) I a l W-l,e _ Gru b 1
1+
,uh 20
COAL '
Minnesota relies heavily on coal as a fuel for generation because of the extensive reserves found in the nation and the reasonable cost. in lo72, the state's
.___ _ n total coal use was 13.2 million tons. By 1985, it is expected to increase to 25.2 million tons, due to the nation's attempts to withdraw from its dependance on expensive foreign oil and natural gas. It is estimated that there are enough coal reserves in the country to last 300 years at the current rate of use.
For CPA, vast lignite coal reserves in North Dakota presented the most economical fuel source available for a large generating plant. Over 300 million tons of lignite covermg 18,000 acres will provide fuel for the projected 40 year life span of the Coal Creek Station.
, f.gy a' These extensive reserves are not subject to the severe D,4 supply and price difficulties affecting oil and gas, allowing CPA to provide reliable electric power for the people served by the project.
Coal, too, provides a certain flexibility in genera-tion. As loads either increase or decrease to certain levels, the amount of electricity generated can be controlled by the amount of coal burned. This flexibility can provide tremendous savings in fuel costs.
- % 4 A heavy dependance on coal, however, can affect
-- y m-__ 2 air and water quality, increase the number of land use problems and produce a tremendous impact on the rail system.
- Sulphur dioxide, ash and other undesirable emis-sions are produced from coalcombustion and must be virtually eliminated by expensive pollution control equipment. Covernment regulation of these emis-sions is costly, and though desirablein many respects, has severely limited the practicality of coal as a primary fuel source. Energy suppliers must spend b eight to ten years planning, securing permits and building coal fired plants to meet regulations, many of which are costly, time consuming and ineffectual.
Mining regulations have also restricted the acces-sibility of coal. Existing reclamation laws govern the length of time land can be used for mining purposes and environmentalists are advocating more extensive government regulations. Presently, federalleasing of coal lands has ceased, further restricting available minable land.
An extensive use of coal can also increase the number of coal trains used to transport it. Additional trains result in increased use of petroleum and can be disruptive to the many communities the trains must pass through.
( 2281 151 21
NUCLEAR WIND ENERGY CONVERSION Nuclear power has the potential of being the SYSTEMS world's major source of electricity. llecause of Wind powered dc generators equipped w.th iruported oil price increases, many nations have turned to nudear power for comparatively inexpen- battMes to ston 6e pnduced enna wne comrnon sive and abundant energy. Franceis oneof theleaders on farms many years ago. Tsey were low voltage independent systems that supplied electricity primar-in nuclear power with the Phenix 250 megawatt breeder reactor now in service and the Superphenix dy for lighting or small motors. As ac electricity 1200 megawatt breeder under construction. became available to the rural areas through the Rural The United States has oo commercial nuclear pla nts Electrification Administration, the wind powered de over 150 megawatts capacity presently in operation. systems baarne uneconondcal and less neaW The safety record of nuclear plants the world over has Today, as the cost of producing electrical energy been outstanding. The recent Three Mile Island continues to rise and some of the common fuels such accident has proven that potentially destructive and as gas and oil become more scarce, wind power may dangerous situations can be controlled and that become a more potential source of energy for the nuclear power presents no more of a threat to the fu ture. The technology is available for designing large nation that other forms of energy. and small wind driven generators, although the Nuclear plants produce a minimal amount of air " I ' I '" ' ' " ' '" " " " ' " I " " " 'E Y I'"* ' *I"d """'8Y pollution and their sites remain clean of ash, soot and convnsmn system OVECS) depends on wind velocity, dust. Low operational and f uel costs result in the ef fectiveness of mill blades m catchmg the wind inexpensive power, saving the wnsumer money. As and theefficiencyof the gear trains and thegenerator.
with coal, nuclear power can assist the nation in its The development of a storage system is necessary attempts to become independant of foreign oil. Vast before the y ECS can be used on an extensive prac tical basis. Since wind genera ted electric amounts of f uel for nuclear plants are obtainable with reprocessing of spent fuel rods and with the breeder avadable when the wind is blowing, WLCS(tyison owners reactor, a system that produces fuel as it uses it. As "N" '", back-up power from a utility, reducing the fossil fuel reserves become scarce, reprocessing and " Y "'" * ** ' d I" ' N" "" '
the breeder reactor assure us of adequate fuel b".me of the WECS units now available are supplies in the future. CPA has contributed funds for n atwely high priced and do not yet compete with the the research and development of the breeder and will cost of other forms of power. A wind generator with ,
continue to support future program Jevelopments. tower and inverter that could heat a farm electrically Anti nuclear movements, however, are dimming costs about $20,000 to mstall. This results in an the prospects of this energy soune in the United """'8Y cost roughly twice the current rate of States. Opponents have blocked construction of eintna.ty produced by steam generators.
several nuclear projects around the country and have Enugy costs with the WECS do not escalate, succeeded in passing legislation that will further however, as they do with the more conventional restrict the construction of future plants. '""' " ' "I X" ""' ' i"" I"I I" ' I"" "" " ' '"I *' f " "I '"
The lack of a firm commitment to nuclear power by general inflation, and energy demand versus supply the federal government has created further difficul- all inflate the price of fossd fuel or nuclear produced ties for the industry. The government's failure to power. Once a WECS is mstalled, the cost remains establish a procedure for storing spent fuel rods and relatively fixed, increasing the wind alternative s other nuclear wastes has increased public disapproval '"'i"""""""8Y'"""'
of nuclear power. Wind power is essentially pollution free. The land The Tyrone Energy Park in Wisconsin has been used for a WECS could continue to be used for crops seriously affected by these developments. The 1100 and grazing or for other purposes as well. A poorly megawatt facility, of which CPA owns 17 percent, designed system could, however, mterfere with radio was planned to serve the increasing electric demand and television reception, while larger WECS units of consumers in Minnesota and Wisconsin in thelate * 'Y 'I' hazardsm? high b
e visually 1080's. The Wisconsin Public Service Commission, wmds.unattractive, noisy or safety however, recently denied a construction permit Ilecause of the high mvestment cost, WECS at the application for the plant, halting further progress utility level requires considerable planning. Many tntil the participating utilities' court appeal has been utilities, however, are experimenting with WECS decidd while continuing to assess wind energy system During the last year, only two reactors were designs.
ordered for future nuclear units in this country. This growth is considerably below earlier predictions and until permit processes and regulations allow the construction of nuclear facilities, the nation may 152 experience a severe shortage of power within the 2281 next ten years.
22
l h j@' ; {, }; f}QRg 1 1: , ; , p .1 ; j / !
' * * " " technology. Presently, only 10 percent of the sun's
" rays can be converted into useful energy.
, 4 ; Both active and passive solar systems can convert j'R[b. i.y g~ M L sunlight into a useable energy source. An unlimited M ' a l N _ . ., supply of sunlight and the minimalamount of airand h
,[,.7 " } $,[ water pollution associated with it makes solar energy one of the most attractive sources for heating and
.C ' -Mi?
1$ cooling.
$@d,%
Q 0 .,
5 f' , in passive systems, enhanced building design is the
& W " most efficient means of collecting solar energy.
I d dg Proper building placement, large southern exposure
+:0 V.is windows, landscaping anJ shades and drapes assist in M? heating space and reducing thermalloss. For cooling,
- wM r My j' roof ponds on the structure allow the sun to
%"'i@% < <
,' . 1 evaporate wa ter from the building, ther eby removing N .W.- , t .,; g #
t* ;, heat.
M@M
, "p u c- Active systems use a series of collectors to trap the i%., 1-g d ..t f sun's rays and heat either circulating water or air for
$[&U M i h $. %Mk E
"; n T ., . D space and water heating. Because of the hardware
'4 ..
M ig 2i1 T
Nf 3 currently available, active systems are of ten problem prone. Freezing. leakage and corrosion of water pipes IMh]y 'M and collectors reduce the efficiency of the active
)
% 49 i water system.
Yh I
i i
Both systems are highly dependent on good weather. The energy produceJ by solar systems must be stored for nigh ts and cloudly days, and though long 3'
- 1. N s term storage is being researched, current design provides for only one to three days of thermal F*
j storage. Back-up systems using traditional sources of
~d' fuel must therefore be installed for the times the solar
.' %, system does not function. For these reasons, solar 3 h sytems can of ten use more energy than they save w since conventional power plants and transmission lines must be built in addition to the solar equipment.
Though the expense of passive solar can of ten be
- y. ;y' abserbed through construction costs, the high initial fpg&, 3 expense of instalhng active solar equipment of ten
) .. .4 '
makes this soune impractical. Without generous tax e - E ,
exemptions, the pay-back period is so slow that solar f g
. [.g q does not appear to be cost effective when replacing r k ,( traditional fuels. Developing technology, federal and g ;9[N, T D a
g state tax credits and increasing prices for fossil fuels, f ..
.W % v however, may eventually make this source more
~
'I [.k.4kp .--
.A dj}g ; . competitive.
g
,~
h ,R p f % k.($[L ,'%
- 'Q%)}f:}
Since sola r ene rgy provides new possibilities for the future, the electric utility industry is researching and
- ..(g #
developing passive and attive solar design. A number
- i ". j i
[ #y*.e@((
4 of experimental homes have been built to test new
[. designs and to develop more effective heat storage J. f 4 v/l ' . } ' '
i
- f. t I dq/hA m
i' ,
met hods.
y Also being reserrched is solar electric photovol-
$' Ss% - l -
.r.A% taics. Through solar cells; sunlight can be directly converted to electricity. An unlimited source of fuel and the low cost have prompted further study in this area, but the initial high expense of the system has SOLAR ENERGY preventea extensive experi m entation. photovoitaic electricity costs about $2000 per kilowatt compared It has been estimated that if all the radiant energy to approximately $700 per kilowatt of electricity Minnesota re(eives from the sun in one year could be produced in newer steam generating plants. Since the harnesseJ, the state's total energy demand could be source is weather dependent,it could not be used for a satisfied a hundred times over.The potential for solar base load system, but could, however, be useo as energy is tremendous for residential, industrial and supplementary power. Industry officials believe a agricultural users, but wide-spread efficient applica- significant breakthrough in photovoltaics must be tion is, at the present time, limited by current discovered before research in this area is extended.
2281 153 "
' ~
- x . - . .
3
~. , .b i*
lu *M *
(. s . - w
..' _ s
. a' ss .
p -
'c..
,. ~.,
s,. ; '.T N
F
, .. . ,- , ^ .~4,,.
x,+. ,4 .
c .
-e ~
.._~ , .
. . :, a .s ,:
.. m .*.m s.
s
.'~ g
- 4 , ,, , , .;p
+*
.. . .u.' '
s
.s, . m.
~
m;sm.t- i, . .k ' J.i l $ ' '
i'6 J i' ' +1 4
.n e , .
m
, a; % ,'
~
. . ; ~. - - ..~
- n s~. , -
/
~i@v. .-
- Js.~.% , . m' %. . . -
. . - . .,, , . .. - . .,. xcsin . . . , ,
. .- n. :n_; .s ,. . w :
.?- ,
4
..s ~
.% , ny~--
%. . . u. ,r
, ~ . , ..
~~. ..
- a.. p wr
-rg.ey. :p .QgS jm ' f . ,
9 y W , " gJ
- ~
a.- -
.a.
.w % pegw.m.#.
, s, r. mf.u .v
. . . . . . : ~
, ^ .
~.
.. Y_.
r::! L~%.e , m* %,
~ 'r2* 1 nw:Q..-
- f*: a-v y.. , ~t;- a;, ,.w s, qc . g. ~ ~.1,m. w.
( ;.Q G, yy lt4.,.:'fpj: ,j - :'. f y;e%@
'g p -> y ' :;~;;s$.+u4 .g un- m: W s
f&
. y , ;sa yg'. ,*.c .y ' g. e s
. . , A 2
.Wy y,%f:e., .:m . rc .
.v .
3
- c. :- , % 3
~
~ -
i ~ ti ... { y
- l l
- Q << q ?u,$ L I $ pf*'k -W,$U?f.. g>:p:m;;j; k,s, v.$. _ ;[ m.y._,._
- _ff m.W (..
,r
. . .. O s 7'- rJ'. s -r-t L - ?A JNf'.-p^ TC
%',.:.T . ', '.* = -
. ( I J-
.K L, Mj".;3)Dh A:
- 2m ~ , m ,.. c ,s 4;; &'n f' syL.;
?L Q, i. -sh p:y ,p w n.. u ,'CG v L.4 Q- . , ana, - , w:?pt u :y,w
- , a e~~m,esy.m.a. v.gw;nw yy c. c . w7 _:.:. .,gy -;,m.; . . nn;y, n,,'
y ..
.x a , . , ,~ -2 am ., . .
( HI \ \l) N \ l i R .\ l ( ..\ s
.