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

                                     FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 19951996

                                         OR

         [ ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)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      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, 19951996

                                                                      PAGE NO.
                                                                      --------

PART I - FINANCIAL INFORMATION

    Item 1.   Financial Statements

        Condensed Balance Sheets atas of March 31, 19951996 (Unaudited)
        and December 31, 19941995                                             3

        Condensed Statements of Revenues and Expenses (Unaudited)
        for the Three Months Ended March 31, 19951996 and 19941995                5

        Condensed Statements of Cash Flows (Unaudited)
        for the Three Months Ended March 31, 19951996 and 19941995                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                                             12

   Item 6.   Exhibits and Reports on Form 8-K                           12


SIGNATURES                                                               13

                                        2



PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                          OGLETHORPE POWER CORPORATION
                            CONDENSED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                    ASSETS
AT ATPART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OGLETHORPE POWER CORPORATION CONDENSED BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 1994 ----------- ------------ (UNAUDITED)- ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ASSETS (Unaudited) -------------------------- ELECTRIC PLANT, AT ORIGINAL COST: IN SERVICE $5,104,420 $5,100,299 LESS ACCUMULATED PROVISION FOR DEPRECIATION (1,264,679) (1,231,818)In service $5,696,887 $5,699,213 Less: Accumulated provision for depreciation (1,389,588) (1,362,431) ---------- ---------- 3,839,741 3,868,481 NUCLEAR FUEL, AT AMORTIZED COST 100,483 105,683 PLANT ACQUISITION ADJUSTMENTS, AT AMORTIZED COST 6,010 6,275 CONSTRUCTION WORK IN PROGRESS 564,682 538,7894,307,299 4,336,782 Nuclear fuel, at amortized cost 96,075 94,013 Plant acquisition adjustments, at amortized cost 4,949 5,214 Construction work in progress 41,617 35,753 ---------- ---------- 4,510,916 4,519,2284,449,940 4,471,762 ---------- ---------- INVESTMENTS AND FUNDS: BOND, RESERVE AND CONSTRUCTION FUNDS, AT MARKET 53,694 64,163 DECOMMISSIONING FUND, AT MARKET 62,096 59,164 INVESTMENT IN ASSOCIATED ORGANIZATIONS, AT COST 16,735 17,371Bond, reserve and construction funds, at market 53,079 56,511 Decommissioning fund, at market 75,652 74,492 Investment in associated organizations, at cost 15,502 15,853 ---------- ---------- 132,525 140,698144,233 146,856 ---------- ---------- CURRENT ASSETS: CASH AND TEMPORARY CASH INVESTMENTS, AT COST 62,240 190,642 OTHER SHORT-TERM INVESTMENTS, AT MARKET 17,107 - RECEIVABLES 91,240 90,998 INVENTORIES, AT AVERAGE COST 103,367 95,076 PREPAYMENTS AND OTHER CURRENT ASSETS 11,392 14,857Cash and temporary cash investments, at cost 148,146 201,151 Other short-term investments, at market 89,118 79,165 Receivables 100,927 99,559 Inventories, at average cost 86,086 82,949 Prepayments and other current assets 17,325 14,325 ---------- ---------- 285,346 391,573441,602 477,149 ---------- ---------- DEFERRED CHARGES: PREMIUM AND LOSS ON REACQUIRED DEBT, BEING AMORTIZED 207,717 161,889 DEFERRED AMORTIZATION OF SCHERER LEASEHOLD 81,595 80,132 DISCONTINUED PROJECT, BEING AMORTIZED 25,885 26,342 DEFERRED DEBT EXPENSE, BEING AMORTIZED 21,683 20,936 OTHER 8,017 7,657Premium and loss on reacquired debt, being amortized 207,663 200,794 Deferred amortization of Scherer leasehold 87,994 87,134 Discontinued projects, being amortized 23,795 24,305 Deferred debt expense, being amortized 20,905 21,135 Other 15,772 9,361 ---------- ---------- 344,897 296,956356,129 342,729 ---------- ---------- $5,273,684 $5,348,455 ========== ==========$5,391,904 $5,438,496 ---------- ---------- ---------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS.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 ATOGLETHORPE POWER CORPORATION CONDENSED BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 1994 ---------- ------------ (UNAUDITED)- ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 EQUITIES AND LIABILITIES (Unaudited) ------------------------- CAPITALIZATION: PATRONAGE CAPITAL (NET OF UNREALIZED LOSSES OF $2,324 AT MARCHPatronage capital and membership fees (including unrealized gains of $2,488 at March 31, 1996 and $3,570 at December 31, 1995 AND $3,567 AT DECEMBER 31, 1994 ON AVAILABLE-FOR-SALE SECURITIES) $ 319,201 $ 309,496 LONG-TERM DEBT 4,148,284 4,128,080 OBLIGATION UNDER CAPITAL LEASES 300,108 303,749on available-for-sale securities) $346,797 $338,891 Long-term debt 4,181,779 4,207,320 Obligations under capital leases 295,779 296,478 ---------- ---------- 4,767,593 4,741,3254,824,355 4,842,689 ---------- ---------- CURRENT LIABILITIES: LONG-TERM DEBT AND CAPITAL LEASES DUE WITHIN ONE YEAR 85,761 90,086 DEFERRED MARGINS AND VOGTLE SURCHARGE TO BE REFUNDED WITHIN ONE YEAR 15,014 21,476 ACCOUNTS PAYABLE 41,822 52,921 ACCRUED INTEREST 20,229 100,010 ACCRUED AND WITHHELD TAXES 7,801 1,566 ENERGY COSTS BILLED IN EXCESS OF ACTUALS 883 2,125 OTHER CURRENT LIABILITIES 10,917 18,177Long-term debt and capital leases due within one year 98,485 89,675 Deferred margins to be refunded within one year 21,859 32,047 Accounts payable 39,759 48,855 Accrued interest 72,433 91,096 Accrued and withheld taxes 8,165 1,785 Other current liabilities 12,775 18,007 ---------- ---------- 182,427 286,361253,476 281,465 ---------- ---------- DEFFEREDDEFERRED CREDITS AND OTHER LIABILITIES: GAIN ON SALE OF PLANT, BEING AMORTIZED 62,624 63,209 SALE OF INCOME TAX BENEFITS, BEING AMORTIZED 56,217 58,236 ACCUMULATED DEFERRED INCOME TAXESGain on sale of plant, being amortized 60,283 60,868 Sale of income tax benefits, being amortized 48,186 50,194 Accumulated deferred income taxes 65,510 65,510 DEFERRED MARGINS AND VOGTLE SURCHARGE 15,568 15,568 DECOMMISSIONING RESERVE 100,944 96,291 OTHER 22,801 21,955Decommissioning reserve 115,688 114,049 Other 24,406 23,721 ---------- ---------- 323,664 320,769314,073 314,342 ---------- ---------- $5,273,684 $5,348,455 ========== ==========$5,391,904 $5,438,496 ---------- ---------- ---------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS.The accompanying notes are an integral part of these condensed statements. 4 OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF REVENUES & EXPENSES (UNAUDITED) (DOLLARS IN THOUSANDS)
OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, --------------------1996 AND 1995 1994 -------- ---------- ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ------------------------------ OPERATING REVENUES: SALES TO MEMBERS $227,849 $225,458 SALES TO NON-MEMBERSSales to Members $ 246,458 $ 227,849 Sales to non-Members 29,243 29,698 42,160 -------- ----------------- --------- TOTAL OPERATING REVENUES 275,701 257,547 267,618 -------- ----------------- --------- OPERATING EXPENSES: FUELFuel 48,240 47,517 51,232 PRODUCTIONProduction 30,369 32,243 32,118 PURCHASED POWERPurchased power 69,076 59,947 53,539 DEPRECIATION AND AMORTIZATIONPower delivery 3,658 3,921 Depreciation and amortization 36,526 32,884 33,051 TAXES OTHER THAN INCOME TAXESTaxes other than income taxes 7,384 5,891 6,105 OTHER OPERATING EXPENSES 10,383 9,691 -------- --------Other operating expenses 6,880 6,462 --------- --------- TOTAL OPERATING EXPENSES 202,133 188,865 185,736 -------- ----------------- --------- OPERATING MARGIN 73,568 68,682 81,882 -------- ----------------- --------- OTHER INCOME (EXPENSE): INTEREST INCOMEInterest income 4,060 3,312 2,951 AMORTIZATION OF DEFERRED MARGINSAmortization of deferred margins 10,188 6,462 6,641 ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTIONAllowance for equity funds used during construction 47 761 681 OTHEROther 2,642 2,834 5,475 -------- ----------------- --------- TOTAL OTHER INCOME 16,937 13,369 15,748 -------- ----------------- --------- INTEREST CHARGES: INTEREST ON LONG-TERM OBLIGATIONSInterest on long-term-debt and other obligations 82,031 83,008 86,302 ALLOWANCE FOR DEBT FUNDS USED DURING CONSTRUCTIONAllowance for debt funds used during construction (514) (9,419) (8,856) -------- ----------------- --------- NET INTEREST CHARGES 81,517 73,589 77,446 -------- ----------------- --------- NET MARGIN $ 8,988 $ 8,462 $ 20,184 ======== ========--------- --------- --------- ---------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS.The accompanying notes are an integral part of these condensed statements. 5 OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (DOLLARS IN THOUSANDS)
OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 1994 -------- --------- ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ----------------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET MARGINNet margin $ 8,4628,988 $ 20,1848,462 -------- -------- ADJUSTMENTS TO RECONCILE NET MARGIN TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DEPRECIATION AND AMORTIZATIONDepreciation and amortization 39,425 47,704 47,213 AMORTIZATION OF DEFERRED MARGINSAmortization of deferred margins (10,188) (6,462) (6,641) ALLOWANCE FOR EQUITY FUNDS USED DURING CONSTRUCTIONAllowance for equity funds used during construction (47) (761) (681) OTHEROther (859) (843) (4,690) 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) 727 INVENTORIESReceivables (1,368) (1,484) Inventories (3,137) (8,291) 1,207 PREPAYMENTS AND OTHER CURRENT ASSETSPrepayments and other current assets (3,000) 3,465 (6,937) ACCOUNTS PAYABLEAccounts payable (9,096) (11,099) (7,600) ACCRUED INTERESTAccrued interest 6,380 6,235 Accrued and withheld taxes (18,663) (79,781) (85,849) ACCRUED AND WITHHELD TAXES 6,235 (1,573) ENERGY COST BILLED IN EXCESS OF ACTUAL (1,242) (1,814) OTHER CURRENT LIABILITIESOther current liabilities (5,232) (7,260) (30,095) --------------- -------- TOTAL ADJUSTMENTS (5,785) (58,577) (96,733) --------------- -------- NET CASH USED INPROVIDED BY (USED IN) OPERATING ACTIVITIES 3,203 (50,115) (76,549) --------------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: PROPERTY ADDITIONSProperty additions (24,824) (36,086) (48,860) NET PROCEEDS FROM BOND, RESERVE AND CONSTRUCTION FUNDSNet proceeds from bond, reserve and construction funds 2,397 11,712 31,372 DECREASE IN INVESTMENT IN ASSOCIATED ORGANIZATIONSDecrease in investment in associated organizations 351 636 273 INCREASE IN OTHER SHORT-TERM INVESTMENTSIncrease in other short-term investments (10,000) (17,107) - (INCREASE) DECREASE IN DECOMMISSIONING FUNDIncrease (decrease) in decommissioning fund 729 (1,041) 1,842 OTHER - (3,434) --------------- -------- NET CASH USED IN INVESTING ACTIVITIES (31,347) (41,886) (18,806) --------------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: DEBT PROCEEDS, NETDebt proceeds, net - 88,545 243,989 DEBT PAYMENTSDebt payments (25,366) (124,534) (318,056) REFUND OF VOGTLE SURCHARGE - (1,005) OTHEROther 505 (412) 97 --------------- -------- NET CASH USED IN FINANCING ACTIVITIES (24,861) (36,401) (74,975) --------------- -------- NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS (53,005) (128,402) (170,330) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 201,151 190,642 244,173 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $148,146 $ 62,240 $ 73,843 ======== ======== CASH PAID FOR: INTEREST (NET OF AMOUNTS CAPITALIZED)Interest (net of amounts capitalized) $96,769 $149,265 $161,096 INCOME TAXESIncome taxes - -
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED STATEMENTS.The accompanying notes are an integral part of these condensed statements. 6 OGLETHORPE POWER CORPORATION NOTES TO THE CONDENSED FINANCIAL STATEMENTS MARCH 31, 19951996 AND 19941995 (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, 19951996 and 1994.1995. 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 GENERAL As a means of reducing the cost of power provided to the Members, on January 3, 1996, Oglethorpe entered into a power supply swap agreement with Enron Power Marketing, Inc. (EPMI). The agreement, effective January 4, 1996 through April 30, 1996, required EPMI to sell to Oglethorpe at a favorable fixed rate all the energy necessary to meet the Members' requirements. Pursuant to the agreement, Oglethorpe was required to sell to EPMI at cost, subject to certain limitations, upon request all energy available from Oglethorpe's total power resources. Under the agreement, Oglethorpe maintained the responsibility of operating the power supply system and continued to dispatch the generating resources to ensure system reliability. See "OPERATING REVENUES" and "OPERATING EXPENSES" below for a discussion of the impact of the power supply swap agreement on first quarter 1996 results of operations. On April 30, 1996, Oglethorpe and EPMI entered into an agreement which extended the term of this power supply swap agreement, with certain modifications, from May 1, 1996 through August 31, 1996. On February 7, 1996, Oglethorpe issued a Request for Proposals (RFP) to selected bidders for a long-term power supply arrangement. This RFP did not seek a specific amount of power; instead, it requested proposals for meeting the combined power needs of the Members with term options ranging from two to 15 years. Currently, discussions are focused on proposals from EPMI, LG&E Power Marketing Inc. and a joint proposal from Duke/Louis Dreyfus LLC & Georgia Power Company (GPC). The current four-month agreement with EPMI will provide the energy needed to serve the Members while Oglethorpe finalizes a long-term power supply arrangement. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1995 Oglethorpe's net margin for the quarter ended March 31, 19951996 was $8.5$9.0 million compared to $20.2$8.5 million for the same period of 1994. Historically, most of Oglethorpe's annual net 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 declined in the first quarter of 1995 compared to the first quarter of 1994 due to the change in the pattern of capacity cost recovery described above. 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 of 19951995. OPERATING REVENUES The increase in Member revenues for the three months ended March 31, 1996 compared to the same period of 1994.1995 was due to the recovery of additional fixed costs of the Rocky Mountain Project (Rocky Mountain) and the increased fixed cost responsibility resulting from the scheduled end of Sell-back revenues from GPC under the plant operating agreements (discussed below). Energy revenues from sales to Members for the three-month period of 1996 were virtually unchanged from the same period of the prior year despite the fact that megawatt-hour (MWh) sales increased 15.5% due to prolonged colder than normal weather. Oglethorpe achieved substantial savings in energy costs in the first quarter under the power supply swap agreement with EPMI which were passed through to the Members. Oglethorpe's average energy revenue per MWh for the first quarter of 1996 was 14% less than the same period of 1995. 8 Sales to non-Members arewere 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 of 1995three months ended March 31, 1996 and 1994:1995:
Three Months Ended March 31, ----------------------------1996 1995 1994 -------- ---------------------------------- (dollars in thousands) Plant operating agreements $ - $ 5,892 $19,094 Power supply arrangements 4,718 7,316 9,237 Transmission agreements 3,372 2,995 3,199 Other utilities 21,153 13,495 10,630 ------- ------- Total $29,243 $29,698 $42,160 ======= =======
8 The decrease inWhile total revenues from non-Members in the first quarter of 1995 compared towere virtually the same, period of 1994 was primarily attributable to lower revenues from sales to utilities other than GPC pursuant toincreased significantly and revenues from the plant operating agreements.agreements and power supply arrangements with GPC were significantly lower. Under the plant operating agreements, GPC purchasespurchased capacity and energy from Oglethorpe on a declining scale in the early years of operation of certain co-owned generating units. The decrease in revenues of this type was due toAs scheduled, reductions in sell-back percentages for both of the Plant Vogtle units. Effectiveeffective June 1, 1995, revenues from GPC pursuant to the 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 from energy sales 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 lower in the first quarter of 1996 compared to the same period of 1995. Revenues from othersales to non-Member utilities (other than GPC) increased substantially due to a 55%12.5% increase in MWh sales in the three months ended March 199531, 1996 compared to the same period of 1994.1995. As discussed under "General" above, this increase was due to EPMI marketing available energy from Oglethorpe's total power resources. Under the power supply swap agreement, sales to non-Member utilities are effectively transacted with EPMI while in 1995 these sales were made by Oglethorpe is continuing to pursue energy and capacitydirectly with the non-Member utilities. All profits on sales made by EPMI to other utilities as a means of reducing amounts that must be recovered from Members.Oglethorpe's resources accrue to EPMI. OPERATING EXPENSES The slight increase in operating expenses for the three months ended March 31, 1996 compared to the same period of 1995 was primarily attributable to an increase in purchased power. PurchasedIn 1996, purchased power expensesenergy costs and MWhs increased by 42% and 39%, respectively, as EPMI utilized purchased resources to provide Oglethorpe's Member load and for increased sales to other utilities. 9 Depreciation and amortization and taxes other than income taxes (property taxes) increased due to the commercial operation of Rocky Mountain in the first quarter of 1995 primarily 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, therefore, there were no corresponding purchasesJune 1995. OTHER INCOME Other income for the first quarter of 1994. In addition, there was a 7% increase in MWh purchases in 19951996 increased compared to 1994. OTHER INCOME The decrease in otherthe same period of 1995 primarily as a result of higher income was due to the completionfrom amortization 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. MEMBER CONTRACTS As stated in the Annual Report on Form 10-K for the fiscal year ended December 31, 1994, in response to an increasingly competitive utility environment, Oglethorpe has been discussing the need for a more flexible power supply arrangement with its Members. The Oglethorpe Board of Directors has authorized the study of several options which would alter the existing contractual relationships between Oglethorpe and the Members. Management and the Board of Directors are continuing to develop these options under which the existing "all- requirements" wholesale power contract would be changed to allow a Member to elect to meet its future capacity and energy requirements above current levels with Member-owned generation or through purchases from Oglethorpe or from other power suppliers. Management and 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 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 existing and committed resources among the 39 Members was approved by the Oglethorpe Board of Directors on May 8, 1995 for implementation as early as January 1, 1996. Since the Members must maintain responsibility for their allocated portions of all current financial obligations to Oglethorpe, Oglethorpe's future revenues associated with the Members' current obligations would be unaffected. However, to the extent the Members choose to secure their projected load growth from sources other than Oglethorpe, the growth in Oglethorpe's revenues would decrease as would the related expenses. The Board of Directors is expected to address these revisions to the existing wholesale power contract, withdrawal procedures and other implementation issues during the next several months; however, any actiondeferred margins. Oglethorpe's Board of Directors andauthorizes the amount of deferred margins to be returned to the Members might take relatingeach year. For 1996, the remaining amount of $32 million was authorized as compared to these options cannot be predicted at this time.$16 million for 1995. Interest income increased due to higher average cash balances during the first quarter of 1996 compared to the same period of 1995. INTEREST CHARGES The increase in net interest charges for the three months ended March 31, 1996 compared to 1995 resulted from Rocky Mountain becoming commercially operable in June 1995. FINANCIAL CONDITION Total assets and total equity andplus liabilities as of March 31, 19951996 were $5.3$5.4 billion which was $75$47 million less than the total at December 31, 1994. This reduction was the result of the payment of interest on long-term debt accrued at year-end on the first business day of January 1995. ASSETS Property additions for the first quarter of 1995 totaled $36 million. Construction of the Rocky Mountain Project (Rocky Mountain), a pumped storage hydroelectric facility, accounted for $18 million of this amount. Borrowings under the loan commitment for Rocky Mountain totaled $59 million in the first quarter of 1995. Rocky Mountain was approximately 99% complete as ofthree months ended 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 scheduled1996 totaled $25 million and included additions, replacements and improvements to be available for use during peak periods this summer. The decrease in bond, reservetransmission 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 which did not require a debt service reserve fund. 10 distribution facilities and existing generation facilities. The decrease in cash and temporary cash investments was primarilypartly due to the December 31, 1994 Federal Financing Bank (FFB) interest payment being made as dueproperty additions funded from cash, premiums paid on January 3, 1995refinanced debt and due to the prepayment of two FFB advances in January 1995. For a discussion of the refinancing transactions, see Note 5 of Notes to Financial Statements in Oglethorpe's Annual Report on Form 10-K for the year ending December 31, 1994.scheduled debt service payments. 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 correspondingDuring the first quarter of 1996, an additional $10 million was transferred into investments with maturities of more than three months. Prepayments and other current assets increased primarily due to a $3 million increase in 1994.the payment made to GPC for estimates of Plant Hatch and Plant Wansley operations and maintenance costs for April 1996 compared to the estimate paid for January 1996. The increase in the premium and loss on reacquired debtother deferred charges primarily resulted from premiums paid in connection with FFB note modificationsthe deferral of $6.3 million of nuclear refueling outage costs related to Vogtle Unit No. 1 and prepayments, and fromHatch Unit No. 1 which will be recovered through rates over a pollution control bond (PCB) refunding.period of eighteen months. 10 EQUITY AND LIABILITIES Deferred margins and Vogtle surcharge to be refunded within one year decreased by $6.4$10.2 million which is the amount that was refunded to the Members for the first three months of 1995.1996. Accounts payable declined as of March 31,199531, 1996 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 budgeted costs by $1.2 million. Other current liabilities decreased as a result ofpartly due to the year-end accrual for employee incentive pay (subsequently paid in March 1996) and partly due to normal activity. 11 PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION NEW OFFICER OF OGLETHORPE Gary M. Bullock was elected on March 31, 1995 as the new Secretary-Treasurer of Oglethorpe for a one-year term. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a)(A) EXHIBITS Number Description - --------- ----------- +4.10.4(d) Third Amendment to First Amended----------- *10.27(a) Extension and Restated LetterModification Agreement between Enron Power Marketing, Inc. and Oglethorpe, dated as of Credit Reimbursement Agreement, dated April 15, 1995, between Oglethorpe and Credit Suisse.30, 1996. 27.1 Financial Data Schedule (for SEC use only). ___________________ + Pursuant to 17 C.F.R. 229.601(b)(4)(iii),_______________________ * Certain portions of this document is nothave been omitted as confidential and filed herewith, howeverseparately with the registrant hereby agrees that such document will be provided to the Commission upon request. (b) Reports on FormSEC. (B) REPORTS ON FORM 8-K No reports on Form 8-K were filed by Oglethorpe for the quarter ended March 31, 1995.1996. 12 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, 199514, 1996 By: /s/ T. D. Kilgore ---------------------------------------------------------------------- T. D. Kilgore President and Chief Executive Officer (Principal Executive Officer) Date: May 12, 199514, 1996 /s/ Gary M. Bullock ---------------------------------------------------------------------- Gary M. Bullock Secretary-Treasurer (Principal Financial Officer) Date: May 12, 199514, 1996 /s/ Eugen Heckl ---------------------------------------------------------------------- Eugen Heckl Senior Vice President and Chief Financial Officer (Principal Financial Officer) 13