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                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                            ___________________________________

                                 FORM 10-Q

(MARK ONE)

[x](Mark One)

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                   THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31,SEPTEMBER 30, 1995

                                      OR

[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO _____________

                         COMMISSION FILE NO. 33-7591
                            ___________________________________

                         OGLETHORPE POWER CORPORATION

         (AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION)
            (Exact name of registrant as specified in its charter)

             GEORGIA                                          58-1211925
  (State or other jurisdiction of                          (I.R.S. employer
  incorporation or organization)                           identification no.)

       POST OFFICE BOX 1349
     2100 EAST EXCHANGE PLACE
         TUCKER, GEORGIA                                       30085-1349
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code            (404)(770) 270-7600

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject of
such filing requirements for the past 90 days.    YES X[X] NO -----      -----[ ]

     Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.  THE REGISTRANT
IS A MEMBERSHIP CORPORATION AND HAS NO AUTHORIZED OR OUTSTANDING EQUITY
SECURITIES.

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                       OGLETHORPE POWER CORPORATION

                  INDEX TO QUARTERLY REPORT ON FORM 10-Q
                 FOR THE QUARTER ENDED MARCH 31,SEPTEMBER 30, 1995


                                                                     PAGE NO.Page No.
                                                                     --------
PART I - FINANCIAL INFORMATION

     Item 1.   Financial Statements

          Condensed Balance Sheets at March 31,September 30, 1995 (Unaudited)
          and December 31, 1994                                          3

          Condensed Statements of Revenues and Expenses (Unaudited)
          for the Three Months and Nine Months Ended
          March 31,September 30, 1995 and 1994                                    5

          Condensed Statements of Cash Flows (Unaudited)
          for the ThreeNine Months Ended March 31,September 30, 1995 and 1994          6

          Notes to the Condensed Financial Statements                    7

     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operations             8

PART II - OTHER INFORMATION

     Item 5.   Other Information                                        1214

     Item 6.   Exhibits and Reports on Form 8-K                         1214

SIGNATURES                                                              1315


                                    2





PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS


                            OGLETHORPE POWER CORPORATION
                              CONDENSED BALANCE SHEETS
                               (DOLLARS IN THOUSANDS)

                                       ASSETS

AT AT MARCH 31,SEPTEMBER 30, DECEMBER 31, 1995 1994 ------------------------ ------------ (UNAUDITED) ELECTRIC PLANT, AT ORIGINAL COST: IN SERVICE $5,104,420$5,681,416 $5,100,299 LESS ACCUMULATED PROVISION FOR DEPRECIATION (1,264,679)(1,329,698) (1,231,818) ---------- ---------- 3,839,741----------- ----------- 4,351,718 3,868,481 NUCLEAR FUEL, AT AMORTIZED COST 100,48394,095 105,683 PLANT ACQUISITION ADJUSTMENTS, AT AMORTIZED COST 6,0105,479 6,275 CONSTRUCTION WORK IN PROGRESS 564,68236,329 538,789 ---------- ---------- 4,510,916----------- ----------- 4,487,621 4,519,228 ---------- --------------------- ----------- INVESTMENTS AND FUNDS: BOND, RESERVE AND CONSTRUCTION FUNDS, AT MARKET 53,69452,942 64,163 DECOMMISSIONING FUND, AT MARKET 62,09668,980 59,164 INVESTMENT IN ASSOCIATED ORGANIZATIONS, AT COST 16,73516,161 17,371 ---------- ---------- 132,525----------- ----------- 138,083 140,698 ---------- --------------------- ----------- CURRENT ASSETS: CASH AND TEMPORARY CASH INVESTMENTS, AT COST 62,240183,574 190,642 OTHER SHORT-TERM INVESTMENTS, AT MARKET 17,10769,239 - RECEIVABLES 91,24081,734 90,998 INVENTORIES, AT AVERAGE COST 103,36786,340 95,076 PREPAYMENTS AND OTHER CURRENT ASSETS 11,39216,772 14,857 ---------- ---------- 285,346----------- ----------- 437,659 391,573 ---------- --------------------- ----------- DEFERRED CHARGES: PREMIUM AND LOSS ON REACQUIRED DEBT, BEING AMORTIZED 207,717202,861 161,889 DEFERRED AMORTIZATION OF SCHERER LEASEHOLD 81,59585,615 80,132 DISCONTINUED PROJECT, BEING AMORTIZED 25,88524,814 26,342 DEFERRED DEBT EXPENSE, BEING AMORTIZED 21,68321,116 20,936 OTHER 8,0178,730 7,657 ---------- ---------- 344,897----------- ----------- 343,136 296,956 ---------- ---------- $5,273,684----------- ----------- $5,406,499 $5,348,455 ========== ===================== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS. 3 OGLETHORPE POWER CORPORATION CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS) EQUITY AND LIABILITIES
AT AT MARCH 31,SEPTEMBER 30, DECEMBER 31, 1995 1994 ----------------------- ------------ (UNAUDITED) CAPITALIZATION: PATRONAGE CAPITAL (NET OF UNREALIZED LOSSES OF $2,324$ 1,391 AT MARCH 31,SEPTEMBER 30, 1995 AND $3,567$ 3,567 AT DECEMBER 31, 1994 ON AVAILABLE-FOR-SALE SECURITIES) $ 319,201351,084 $ 309,496 LONG-TERM DEBT 4,148,2844,169,025 4,128,080 OBLIGATION UNDER CAPITAL LEASES 300,108300,799 303,749 ---------- ---------- 4,767,5934,820,908 4,741,325 ---------- ---------- CURRENT LIABILITIES: LONG-TERM DEBT AND CAPITAL LEASES DUE WITHIN ONE YEAR 85,761102,347 90,086 DEFERRED MARGINS AND VOGTLE SURCHARGE TO BE REFUNDED WITHIN ONE YEAR 15,0144,827 21,476 ACCOUNTS PAYABLE 41,82233,164 52,921 ACCRUED INTEREST 20,22980,275 100,010 ACCRUED AND WITHHELD TAXES 7,80122,687 1,566 ENERGY COSTS BILLED IN EXCESS OF ACTUALS 883(615) 2,125 OTHER CURRENT LIABILITIES 10,91712,292 18,177 ---------- ---------- 182,427254,977 286,361 ---------- ---------- DEFFERED CREDITS AND OTHER LIABILITIES: GAIN ON SALE OF PLANT, BEING AMORTIZED 62,62461,454 63,209 SALE OF INCOME TAX BENEFITS, BEING AMORTIZED 56,21752,201 58,236 ACCUMULATED DEFERRED INCOME TAXES 65,510 65,510 DEFERRED MARGINS AND VOGTLE SURCHARGE 15,568 15,568 DECOMMISSIONING RESERVE 100,944111,199 96,291 OTHER 22,80124,682 21,955 ---------- ---------- 323,664330,614 320,769 ---------- ---------- $5,273,684$5,406,499 $5,348,455 ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS. 4 OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF REVENUES & EXPENSES (UNAUDITED) (DOLLARS IN THOUSANDS)THOUSAND)
THREE MONTHS ENDED MARCH 31, --------------------NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------ 1995 1994 1995 1994 -------- ----------------- -------- -------- OPERATING REVENUES: SALES TO MEMBERS $227,849 $225,458$284,476 $244,390 $764,793 $699,005 SALES TO NON-MEMBERS 29,698 42,16033,060 22,428 91,519 98,466 -------- -------- -------- -------- TOTAL OPERATING REVENUES 257,547 267,618317,536 266,818 856,312 797,471 -------- -------- -------- -------- OPERATING EXPENSES: FUEL 47,517 51,23262,813 57,887 164,484 157,719 PRODUCTION 32,243 32,11830,578 28,719 92,443 91,774 PURCHASED POWER 59,947 53,53985,706 60,905 207,220 172,097 DEPRECIATION AND AMORTIZATION 32,884 33,05135,820 32,375 102,959 98,648 TAXES OTHER THAN INCOME TAXES 5,891 6,1057,181 5,920 19,601 17,952 OTHER OPERATING EXPENSES 10,383 9,69112,489 12,925 35,924 33,609 -------- -------- -------- -------- TOTAL OPERATING EXPENSES 188,865 185,736234,587 198,731 622,631 571,799 -------- -------- -------- -------- OPERATING MARGIN 68,682 81,88282,949 68,087 233,681 225,672 -------- -------- -------- -------- OTHER INCOME (EXPENSE): INTEREST INCOME 3,312 2,9514,806 2,842 12,717 7,976 AMORTIZATION OF DEFERRED MARGINS 6,462 6,6415,229 4,011 16,649 15,284 ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTION 761 68168 718 1,635 2,074 OTHER 2,834 5,4753,242 5,157 9,505 16,452 -------- -------- -------- -------- TOTAL OTHER INCOME 13,369 15,74813,345 12,728 40,506 41,786 -------- -------- -------- -------- INTEREST CHARGES: INTEREST ON LONG-TERM OBLIGATIONS 83,008 86,30286,429 85,127 254,961 255,317 ALLOWANCE FOR DEBT FUNDS USED DURING CONSTRUCTION (9,419) (8,856)(791) (8,698) (20,186) (25,940) -------- -------- -------- -------- NET INTEREST CHARGES 73,589 77,44685,638 76,429 234,775 229,377 -------- -------- -------- -------- NET MARGIN $ 8,46210,656 $ 20,1844,386 $ 39,412 $ 38,081 ======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS. 5 OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREENINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 1995 AND 1994 (DOLLARS IN THOUSANDS)
1995 1994 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: NET MARGIN $ 8,46239,412 $ 20,18438,081 -------- -------- ADJUSTMENTS TO RECONCILE NET MARGIN TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATION 47,704 47,213149,588 141,986 AMORTIZATION OF DEFERRED GAINS (1,756) -- AMORTIZATION OF DEFERRED MARGINS (6,462) (6,641)(16,649) (15,284) ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTION (761) (681)(1,635) (2,074) OTHER (843) (4,690)1,340 (14,216) CHANGE IN NET CURRENT ASSETS, EXCLUDING LONG-TERM DEBT DUE WITHIN ONE YEAR AND DEFERRED MARGINS AND VOGTLE SURCHARGE TO BE REFUNDED WITHIN ONE YEAR: RECEIVABLES (242) 7279,264 (8,037) INVENTORIES (8,291) 1,2078,736 (4,132) PREPAYMENTS AND OTHER CURRENT ASSETS 3,465 (6,937)(1,915) (1,498) ACCOUNTS PAYABLE (11,099) (7,600)(19,757) (8,597) ACCRUED INTEREST (79,781) (85,849)(19,735) (85,541) ACCRUED AND WITHHELD TAXES 6,235 (1,573)21,121 11,999 ENERGY COST BILLED IN EXCESS OF ACTUAL (1,242) (1,814)(2,740) (5,143) OTHER CURRENT LIABILITIES (7,260) (30,095) -------(5,885) (28,368) -------- -------- TOTAL ADJUSTMENTS (58,577) (96,733) -------119,977 (18,905) -------- -------- NET CASH USED INPROVIDED BY OPERATING ACTIVITIES (50,115) (76,549) -------159,389 19,176 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: PROPERTY ADDITIONS (36,086) (48,860)(107,989) (152,136) NET PROCEEDS FROM BOND, RESERVE AND CONSTRUCTION FUNDS 11,712 31,37213,397 29,190 DECREASE IN INVESTMENT IN ASSOCIATED ORGANIZATIONS 636 2731,210 1,176 INCREASE IN OTHER SHORT-TERM INVESTMENTS (17,107) -(69,239) -- (INCREASE) DECREASE IN DECOMMISSIONING FUND (1,041) 1,842 OTHER - (3,434) -------(5,254) 38 -------- -------- NET CASH USED IN INVESTING ACTIVITIES (41,886) (18,806) -------(167,875) (121,732) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: DEBT PROCEEDS, NET 88,545 243,989142,341 294,092 DEBT PAYMENTS (124,534) (318,056)(139,730) (350,233) REFUND OF VOGTLE SURCHARGE - (1,005)-- (2,031) OTHER (412) 97 -------(1,193) 3,209 -------- -------- NET CASH USED INPROVIDED BY (USED IN) FINANCING ACTIVITIES (36,401) (74,975) -------1,418 (54,963) -------- -------- NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS (128,402) (170,330)(7,068) (157,519) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 190,642 244,173 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $183,574 $ 62,240 $ 73,84386,654 ======== ======== CASH PAID FOR: INTEREST (NET OF AMOUNTS CAPITALIZED) $149,265 $161,096$239,485 $308,003 INCOME TAXES - --- --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS. 6 OGLETHORPE POWER CORPORATION NOTES TO THE CONDENSED FINANCIAL STATEMENTS MARCH 31,SEPTEMBER 30, 1995 AND 1994 (A) The condensed financial statements included herein have been prepared by Oglethorpe Power Corporation (Oglethorpe), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the information furnished herein reflects all adjustments (which included only normal recurring adjustments) necessary to present fairly, in all material respects, the results for the periods ended March 31,September 30, 1995 and 1994. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations, although Oglethorpe believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in Oglethorpe's latest Annual Report on Form 10-K, as filed with the SEC. (B) In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". This Statement imposes stricter criteria for regulatory assets by requiring that such assets be probable of future recovery at each balance sheet date. Oglethorpe anticipates adopting this standard on January 1, 1996 and does not expect that adoption will have a material impact on the financial position or results of operations based on the current regulatory structure in which Oglethorpe operates. See Note 1.m. of Notes to Financial Statements in Oglethorpe's Annual Report on Form 10-K for the year ending December 31, 1994 for a summary of Oglethorpe's regulatory assets and liabilities. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED MARCH 31,SEPTEMBER 30, 1995 Oglethorpe's net margin for the quarter ended March 31,September 30, 1995 was $8.5$10.7 million compared to $20.2$4.4 million for the same period of 1994. Historically, most of Oglethorpe's annual netNet margin was earned by May 31 of each year. This pattern of earnings occurred because non-Member revenues declined significantly on June 1 of each year through the end of such year due to scheduled reductions in capacity sell-back to Georgia Power Company (GPC) while monthly fixed costs recovered from the Member Systems (Members) remained virtually unchanged throughout the year. (See discussion of non-Member revenues from GPC under "Operating Revenues" below.) Oglethorpe's capacity revenues from the Members reflect recovery in nearly equal monthly amounts of all budgeted fixed costs plus the annual net margin goal, less fixed costs projected to be recovered from GPC pursuant to plant operating agreements. The capacity sell-back arrangement with GPC will expire on May 31, 1995. The minimal non-Member revenues from GPC in 1995 has resulted in net margins being earned in a more even manner throughout the year as opposed to being earned primarily during the first five months in prior years. Oglethorpe's budgeted net margin for the year 1995 is approximately the same level as 1994. OPERATING REVENUES Total operating revenues have declinedhigher in the firstthird quarter of 1995 compared to the firstthird quarter of 1994 primarily due to increased capacity revenues from Members resulting from the unusually warm weather and to savings in purchased power capacity and decommissioning expenses. Oglethorpe's net margin for the nine months ended September 30, 1995 was $39.4 million compared to $38.1 million for the first nine months of 1994. Net margin for the first nine months of 1995 exceeded the net margin goal by $23 million resulting from, in addition to those savings mentioned above, unbudgeted savings from continued capitalization of fixed costs of the Rocky Mountain Project (Rocky Mountain) due to the changedelay in commercial operation of the patterninitial unit from April 1995 to June 1995 and savings in fixed production costs. Net margin for the same period of capacity cost recovery described above.1994 was higher than the 1994 net margin goal due to savings in interest expense as a result of debt refinancing efforts. OPERATING REVENUES - ------------------ The increases in Member revenues increased slightly during the first quarter of 1995 compared to the first quarter of 1994. Energy sales were virtually unchanged for the first quarter ofthree-month and nine-month periods ended September 30, 1995 compared to the same periods of 1994 were due primarily to increased billings of fixed costs resulting from the decline in Sell-back revenues from Georgia Power Company (GPC) under the plant operating agreements (as discussed below) and due to the additional fixed costs of Rocky Mountain. Energy revenues from sales to Members for the three-month and nine-month periods of 1995 were 15.5% and 4.5% higher than the same period of 1994.the prior year, however, megawatt-hour (MWh) sales increased 25.2% and 12.5%, respectively. The lower percentage increase in revenues compared to MWhs was due to the pass-through of lower net energy costs in 1995, as discussed under "Operating Expenses" below. Sales to non-Members are primarily made pursuant to three different types of contractual arrangements with GPC and from energy sales to other non-Member utilities. The following table summarizes the amounts of non-Member revenues from these sources for the first quarter ofthree months and nine months ended September 30, 1995 and 1994:
Three Months Ended March 31,Sept. 30, Nine Months Ended Sept. 30, ---------------------------- --------------------------- 1995 1994 -------- --------1995 1994 ---- ---- ---- ---- (dollars in thousands) Plant operating agreements $ 5,892 $19,09489 $ 5,557 $10,096 $39,076 Power supply arrangements 7,316 9,23712,139 4,237 30,712 19,696 Transmission agreements 2,995 3,1993,770 2,771 9,377 8,503 Other utilities 13,495 10,63017,062 9,863 41,334 31,191 ------- ------- ------- ------- Total $29,698 $42,160$33,060 $22,428 $91,519 $98,466 ======= ======= ======= =======
8 The decreaseincrease in revenues from non-Members infor the first quarter ofthree months ended September 30, 1995 compared to the same period of 1994 was primarily attributable to higher revenues from power supply arrangements and from sales to other utilities. For the nine months ended September 30, 1995 compared to 1994, revenues from non-Members decreased due to lower revenues from GPC pursuant to plant operating agreements. Under the plant operating agreements, GPC purchases capacity and energy from Oglethorpe on a declining scale in the early years of operation of certain co-owned generating units. The decreasedecreases in revenues of this type waswere due to scheduled reductions in sell-backSell-back percentages for both of the Plant Vogtle units. Effective June 1, 1995, revenues from GPC pursuant to plant operating agreements will end.ended. The second source of non-Member revenues is derived pursuant to power supply arrangements with GPC. These revenues are derived, for the most part, from energy arising from dispatch situations whereby GPC causes Plant Wansley to be operated when Oglethorpe's system does not require all of its contractual entitlement to the generation. These revenues compensate Oglethorpe for its costs since, under the operating agreements, Oglethorpe is responsible for its share of fuel costs any time a unit operates. Such sales were significantly higher in the third quarter of 1995 compared to the same period of 1994. Revenues from other non-Member utilities increased substantially due to a 55%16% increase in MWh sales in the three months ended MarchSeptember 30, 1995 and a 33% increase in MWh sales in the nine months ended September 30, 1995 compared to the same period of 1994. Oglethorpe is continuing to pursue energy and capacity sales to other utilities as a means of reducing amounts that must be recovered from Members. OPERATING EXPENSES - ------------------ The slight increase in operating expenses for the three months and nine months ended September 30, 1995 compared to the same period of 1994 was primarily attributable to an increase in purchased power.power required due to the additional Member and non-Member sales. Purchased power expenses increased in the first quarter of 1995 primarilypartly as the result of capacity and energy purchases from Hartwell Energy Limited Partnership (Hartwell). The agreement to purchase capacity and energy from Hartwell commenced in April 1994,1994; therefore, there were no corresponding purchases for the first quarterthree months of 1994. In addition,Additionally, there was a 7%significant increase in purchases from utilities other than GPC. Overall, there was a 39% increase in MWh purchases from all sources in 1995 compared to the first nine months of 1994. However, the net per unit variable costs of fuel, production and purchased power was 4.7% lower in the first nine months of 1995 compared to 1994. Such decrease arose from lower prices of purchased power and savings in fuel costs and maintenance expenses. OTHER INCOME The decrease in other- ------------ Other income wasfor the three-month and nine-month periods ended September 30, 1995 varied 9 slightly compared to the same periods of 1994. However, the caption "other" decreased due to the completion of amortization in October 1994 of a gain on the sale of Plant Scherer common facilities. For a discussion of the gain on the sale of Plant Scherer common facilities, see Note 6 of Notes to Financial Statements in Oglethorpe's Annual Report on Form 10-K for the year ending December 31, 1994. Interest income throughout the nine-month period ended September 30, 1995 increased due to higher earnings from the decommissioning fund. INTEREST CHARGES - ---------------- The increase in net interest charges for the three-month and nine-month periods of 1995 compared to 1994 resulted from the three units of Rocky Mountain becoming commercially operable in June and July 1995; therefore, allowance for debt funds used during construction decreased, accordingly. MEMBER CONTRACTS AND WITHDRAWAL ACTIVITIES As stated in the Annual Report on Form 10-K for the fiscal year ended December 31, 1994,previously reported, in response to an increasingly competitive utility environment, Oglethorpe has been discussing the needtaken actions to provide its Members with various options for a more flexiblemeeting their power supply arrangement with its Members. The Oglethorpeneeds. During June and July 1995, Oglethorpe's Board of Directors has authorizedapproved a plan that allows for substantial changes to the studyCorporation's contractual relationship with its Members to provide them with greater flexibility in their power supply arrangements and, at the same time, established the method by which Oglethorpe will recover the costs of severalexisting resources. The new plan offers the Members a choice of service options which would alterthat can help them better meet the existing contractual relationships betweenindividual needs and load characteristics of their systems. Options offered to the Members range from having Oglethorpe continue to perform all power supply functions, to performing some or all of those functions themselves, or to withdrawing from membership in accordance with the process, provisions and the Members. Management andconditions approved by the Board of Directors are continuing to develop these options under whichDirectors. Members who sign the existing "all- requirements"new wholesale power contract would be changedwill have the option to allow a Memberown dispersed generation for customer reliability and competitive advantage and to elect to meet its future capacity and energy requirements above current levelsengage in bilateral transactions with Member-owned generation or through purchases from Oglethorpe or from other power suppliers. Managementsuppliers so long as all of their load and resources are committed to the dispatch of a new power pool. Oglethorpe's and any Member-secured resources will be committed to economic dispatch (pooled) for the benefit of all the pool participants. The pool cost settlement methodology will price at market rates the hourly differences between a participating EMC's allocation of power supply resources and its load. This power pool arrangement will also allow the participants to pool resource reserves. The pool participants will invite other utilities to participate in the pool and will pursue additional customers. Operation of the power pool will be directed by the Pool Operation Consultants or "the POC". The POC will determine operating policies for the pool, such as targets for planning reserves, the energy cost settlement methodology and other administrative functions. The pool participants have selected the following individuals for the POC: - - Newton A. Campbell, retired Chairman and CEO, Burns & McDonnell Engineering Company - - John A. Casazza, Chairman, CSA Energy Consultants - - Duejean C. Garrett, partner in the law firm of Baker & Daniels - - Thomas N. Hand, retired Executive Manager, East Central Area Reliability Coordination Agreement (ECAR) - - Royce Lyles, retired Chief Executive Officer, Jacksonville Electric Authority 10 Under each of the service options approved by the Board of Directors, also are continuing to develop specific implementation procedures for the existing bylaw provision that 9 grants a Member the right to withdraw from membership in Oglethorpe upon satisfying certain conditions. Oglethorpe's willingness to consider the above changes in its power supply arrangements with its Members is predicated on the Members' commitment to honor their current financial obligations to Oglethorpe under their existing wholesale power contracts. Under the options currently being evaluated, each Member or withdrawing Member would remain financially responsible for the costs of, and required to purchase, all capacity and related energy from Oglethorpe's existing plants committed projects and existing power supply contracts based on a fixed percentage allocation. The methodology for allocating costs of existingallocation and committed resources among the 39 Members wasa formulary rate approved by the Board to recover all of Oglethorpe's costs for existing commitments. Under this approved methodology, a withdrawing Member could satisfy its existing financial obligation to Oglethorpe Board of Directors on May 8, 1995 for implementation as early as January 1, 1996.by entering into a 30-year power sale agreement. Since the Members and any withdrawing Member must maintain responsibility for their allocated portions of all current financial obligations to Oglethorpe, Oglethorpe's future revenues associated with the Members'its current obligations would be unaffected. However, to the extent the Members or any withdrawing Member choose to secure their projected load growth from sources other than Oglethorpe, the growth in Oglethorpe's revenues would decrease as would the growth in related expenses. TheTo date, Oglethorpe has received signed new wholesale power contracts from 25 Members and four Members have indicated by resolution of their Board of Directors is expectedthey intend to address these revisions to the existingmaintain their current all-requirements wholesale power contract,contract. Seven Members, including, as previously reported, Cobb EMC, Snapping Shoals EMC and Walton EMC, have indicated by resolution of their Board of Directors their desire to withdraw from membership. Some of the Members that have given withdrawal proceduresnotices and several other implementation issues duringEMCs are continuing to evaluate their options. It is not certain at this time how many Members will withdraw from Oglethorpe or how many will remain Members. Several of the next several months; however, any actionMembers who are desiring to withdraw have proposed a concept for withdrawal in lieu of the one approved by Oglethorpe's Board of DirectorsDirectors. These Members desire to acquire a percentage interest in Oglethorpe's assets equal to their allocated share of costs responsibility and to assume the same share of Oglethorpe's debt. Oglethorpe's management has serious questions as to whether the conceptual approach put forward by these Members is feasible but has indicated a willingness to discuss such a concept as well as other options. The parties are utilizing the services of a mediator to facilitate their discussions and to assist in reaching a mutually agreeable solution. Representatives of the Rural Utilities Service (RUS) are also participating in these discussions and have expressed a willingness to explore alternative concepts, including a transfer of assets and assumption of debt. Due to unresolved issues relating to Member withdrawal, RUS has indicated that it may not approve for implementation as of January 1, 1996 the new energy pool settlement process and its cost allocation methodology. RUS desires that Oglethorpe and all Members achieve a stronger consensus before it will take action on the new arrangements. It is uncertain what effect the delay in implementing the new power supply arrangements and the disagreements among the Members might take relatingwill have on Oglethorpe and its Members. 11 POWER PURCHASE ARRANGEMENTS Oglethorpe currently purchases 1,250 megawatts (MW) of capacity and associated energy from GPC under the Block Power Sale Agreement. Because Oglethorpe intends to these options cannot be predicted at this time.obtain more economical alternatives, it has, pursuant to the terms of the Agreement, given notice (in August 1994 and 1995) of its election to reduce its purchases from GPC by 250 MW beginning September 1, 1996, and by an additional 250 MW beginning September 1, 1997. FINANCIAL CONDITION Total assets and total equity andplus liabilities as of March 31,September 30, 1995 were $5.3$5.4 billion which was $75$58 million lessmore than the total at December 31, 1994. This reduction wasASSETS - ------ The increase in electric plant in service resulted from the resultcommercial operation of the paymentthree units of interest on long-term debt accrued at year-end on the first business day of JanuaryRocky Mountain totaling $546 million during June and July 1995. ASSETSConstruction work in progress decreased by this amount. Property additions for the first quarter ofnine months ended September 30, 1995 totaled $36$108 million. Construction of the Rocky Mountain Project (Rocky Mountain), a pumped storage hydroelectric facility, accounted for $18$52 million of this amount.amount Borrowings under the loan commitment for Rocky Mountain totaled $59$98 million in the first quarternine months of 1995. Rocky Mountain was approximately 99% complete as of March 31, 1995. The initial unit of Rocky Mountain is currently scheduled for commercial operation on June 1, 1995. All three units of Rocky Mountain are scheduled to be available for use during peak periods this summer. The decrease in bond, reserve and construction funds resulted primarily from the utilization of a portion of the debt service reserve funds for debt service payments. The available funds resulted from an interest rate swap refinancing project in early 1995 which did not require a debt service reserve fund. 1012 The decreaseincrease in total cash and temporary cash investments was primarily due to the December 31, 1994 Federal Financing Bank (FFB) interest payment being made as due on January 3, 1995 and due toeffects of the prepaymentrate options selected by 11 Members which resulted in planned over-collections of two FFB advances in Januarycapacity revenues of $41 million during the third quarter of 1995. For a discussion of the refinancing transactions,this rate option, see Note 5"Management's Discussion and Analysis of Notes to Financial StatementsCondition and Results of Operations" in Oglethorpe's Annual Report on Form 10-K for the year endingended December 31, 1994. Other short-term investments represent investments whose maturity periods exceed Oglethorpe's policy of three months or less for classification as cash equivalents. There were no corresponding investments at the end of 1994. Prepayments and other current assets increased primarily due to a $3.7 million increase in 1994.the payment made to GPC for estimates of Plant Hatch O&M for October 1995 compared to the estimate paid for January 1995. The increase in the premium and loss on reacquired debt resulted from premiums paid in connection with FFBFederal Financing Bank (FFB) note modifications and prepayments, and from a pollution control bond (PCB) refunding. EQUITY AND LIABILITIES - ---------------------- Long-term debt due within one year increased due to normal maturities of PCBs and mortgage notes payable to the FFB. Deferred margins and Vogtle surcharge to be refunded within one year decreased by $6.4$16.6 million which is the amount that was refunded to the Members for the first threenine months of 1995. Accounts payable declined as of March 31,1995September 30, 1995 as a result of normal variations in the timing of payables activity. Accrued interest decreased as discussed under cashprimarily due to normal payments and temporary cash investments above.accruals of interest. Accrued and withheld taxes increased as a result of the normal monthly accruals of property taxes, which are generally paid in the fourth quarter of the year. Energy costs billed in excess of actuals decreased as a result of actual energy costs exceeding budgetedbilled costs by $1.2 million.$2.7 million during the nine months ended September 30, 1995. Other current liabilities decreased as a result ofpartly due to the year-end accrual for performance pay (subsequently paid in March 1995) and partly due to normal activity. 11The increase in other liabilities resulted primarily from normal accruals for Oglethorpe's portion of GPC's post-retirement benefits related to the co-owned plants. 13 PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION NEW OFFICER OF OGLETHORPE Gary M. Bullock was electedCHANGE IN MANAGEMENT - -------------------- The Board of Directors has been advised by Tom Kilgore, its President and Chief Executive Officer, that he intends to leave Oglethorpe to pursue other business opportunities. While Kilgore has not resigned and continues in his position, he requested that the Board begin the process for selecting his successor. Kilgore has placed no time limit on March 31, 1995 ashis continued tenure and intends to remain with Oglethorpe to assist in the new Secretary-Treasurer of Oglethorpe for a one-year term.transition. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITSExhibits -------- Number Description - ------------------- ----------- +4.10.4(d) Third Amendment to First Amended and Restated Letter of Credit Reimbursement Agreement, dated April 15, 1995, between Oglethorpe and Credit Suisse. 27.1 Financial Data Schedule (for SEC use only). ___________________ + Pursuant to 17 C.F.R. 229.601(b)(4)(iii), this document is not filed herewith, however the registrant hereby agrees that such document will be provided to the Commission upon request. (b) Reports on Form 8-K No reports------------------- A report on Form 8-K weredescribing a change in Oglethorpe's certifying accountant from Arthur Andersen LLP to Coopers & Lybrand L.L.P. was filed by Oglethorpe for the quarter ended March 31,on September 14, 1995. 1214 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Oglethorpe Power Corporation (An Electric Membership Generation & Transmission Corporation) Date: May 12,November 14, 1995 By: /s/ T. D. Kilgore -------------------------------------KILGORE ------------------------------------------ T. D. Kilgore President and Chief Executive Officer (Principal Executive Officer) Date: May 12,November 14, 1995 /s/ GaryGARY M. Bullock -------------------------------------BULLOCK ------------------------------------------ Gary M. Bullock Secretary-Treasurer (Principal Financial Officer) Date: May 12,November 14, 1995 /s/ Eugen Heckl -------------------------------------EUGEN HECKL ------------------------------------------ Eugen Heckl Senior Vice President and Chief Financial Officer (Principal Financial Officer) 1315