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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
/ /
X
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
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
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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 30085-1349
TUCKER, GEORGIA (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (404) 270-7600
Securities registered pursuant to Section 12(b) of the
Act: None
Securities registered pursuant to Section 12(g) of the
Act: None
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
State the aggregate market value of the voting stock held by nonaffiliates
of the registrant. None
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.
Documents Incorporated by Reference:
None
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OGLETHORPE POWER CORPORATION
1993 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Item Page
- ---- ----
PART I
1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Oglethorpe Power Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Members of Oglethorpe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Power Supply System. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Co-owners of the Plants and the Plant and Transmission Agreements. . . . . . . . . . . . 19
2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4 Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . . . . 24
PART II
5 Market for Registrant's Common Equity and Related Stockholder Matters. . . . . . . . . . . 25
6 Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7 Management's Discussion and Analysis of Financial Condition and Results of Operations. . . 26
8 Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . . . . . . . . . 32
9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . 49
PART III
10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . 49
11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . 63
13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . 63
PART IV
14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . . . 64
i
SELECTED DEFINITIONS
When used herein the following terms will have the meanings indicated
below:
Term Meaning
- ---- -------
ADSCR Annual Debt Service Coverage Ratio
AFUDC Allowance for Debt and Equity Funds Used During Construction
BPSA Block Power Sale Agreement
CFC National Rural Utilities Cooperative Finance Corporation
CoBank National Bank for Cooperatives
Commission Securities and Exchange Commission
CSA Coordination Services Agreement
Dalton City of Dalton, Georgia
DOE United States Department of Energy
DSC Debt Service Coverage Ratio
EPA United States Environmental Protection Agency
EPI Entergy Power, Inc.
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
FFB Federal Financing Bank
G&T Generation and Transmission Cooperative
GEMC Georgia Electric Membership Corporation
GPC Georgia Power Company
GPSC Georgia Public Service Commission
ITS Integrated Transmission System
ITSA Revised and Restated Integrated Transmission System Agreement
kWh Kilowatt-hours
Members The 39 retail distribution cooperatives that are members of Oglethorpe
MEAG Municipal Electric Authority of Georgia
MW Megawatts
MWh Megawatt-hours
NRC Nuclear Regulatory Commission
Oglethorpe Oglethorpe Power Corporation
PURPA Public Utility Regulatory Policies Act
REA Rural Electrification Administration
SEPA Southeastern Power Administration
SONOPCO Southern Nuclear Operating Company
TIER Times Interest Earned Ratio
TVA Tennessee Valley Authority
ii
PART I
Item 1. BUSINESS
OGLETHORPE POWER CORPORATION
GENERAL
Oglethorpe Power Corporation (An Electric Membership Generation &
Transmission Corporation) ("Oglethorpe") is an electric generation and
transmission cooperative ("G&T") incorporated in 1974 in the State of Georgia.
It is headquartered in metropolitan Atlanta. Oglethorpe is entirely owned by its
39 retail electric distribution cooperative members (the "Members"), who, in
turn, are entirely owned by their retail consumers. Oglethorpe is the largest
G&T in the United States in terms of operating revenues, assets, kilowatt-hour
("kWh") sales and, through the Members, consumers served. It is one of the ten
largest electric utilities in the United States in terms of land area served. As
of February 28, 1994, Oglethorpe had 505 full-time and 43 part-time employees.
As with cooperatives generally, Oglethorpe operates on a not-for-profit
basis. Oglethorpe's principal business is providing wholesale electric service
to the Members. The Members are local consumer-owned distribution cooperatives
providing retail electric service on a not-for-profit basis. In general, the
membership of the distribution cooperative Members consists of residential,
commercial and industrial consumers within specific geographic areas. As of
December 31, 1993, the Members served approximately 1 million electric consumers
(meters) representing a total population of approximately 2.3 million people.
Each Member purchases capacity and energy from Oglethorpe pursuant to a
long-term, "all-requirements" wholesale power contract between Oglethorpe and
the Member (each a "Wholesale Power Contract" and collectively the "Wholesale
Power Contracts"). Oglethorpe supplies the capacity and energy requirements of
the Members from a combination of owned and leased generating plants and from
power purchased under long-term contracts with other power suppliers,
principally Georgia Power Company ("GPC"), a wholly owned subsidiary of The
Southern Company.
MEMBER CONTRACTS
Each Wholesale Power Contract will remain in effect through the year 2025
and thereafter until terminated by three years' written notice by Oglethorpe or
the respective Member. Each Wholesale Power Contract provides that, except for
power purchased from the Southeastern Power Administration ("SEPA"), Oglethorpe
shall sell and deliver to the Member, and the Member shall purchase and receive
from Oglethorpe, all electric capacity and energy that the Member requires for
the operation of its system to the extent that Oglethorpe has capacity and
energy and facilities available. In 1993, the aggregate SEPA allocation to the
Members was 542 megawatts ("MW") plus associated energy, representing
approximately 13% of total Member peak demand and approximately 6% of total
Member energy requirements. Because the amount of capacity and energy available
from SEPA is not expected to increase in an amount sufficient to serve a
material portion of the projected growth in the Members' requirements, such
growth is expected to be served primarily through Oglethorpe's resources. (See
"Member Demand and Energy Requirements--DISPERSED GENERATION" and "THE MEMBERS
OF OGLETHORPE--Contracts with SEPA" herein.)
Each Wholesale Power Contract provides that, without the approval of both
Oglethorpe and the Rural Electrification Administration ("REA"), no Member may
reorganize, consolidate or merge, or sell, lease or transfer all or a
substantial part of its assets (or make any agreement therefor), so long as
Oglethorpe has notes outstanding to REA and the FFB, without first paying such
portion of any such outstanding notes as may be determined by Oglethorpe with
the prior written consent of REA and otherwise complying with such reasonable
terms as Oglethorpe and REA may require.
1
MEMBER DEMAND AND ENERGY REQUIREMENTS
The following table shows the aggregate peak demand and energy requirements
of the Members for the years 1991 through 1993 and also shows the amounts of
such requirements supplied by Oglethorpe and SEPA. For the years 1991 through
1993, demand and energy requirements increased at an average annual compound
growth rate of 8.1% and 7.3%, respectively.
DEMAND (MW) ENERGY REQUIREMENTS (MWh)
-------------------------------------- -----------------------------------------
TOTAL TOTAL
REQUIRE- SUPPLIED BY SUPPLIED BY REQUIRE- SUPPLIED BY SUPPLIED BY
MENTS(1) OGLETHORPE(2) SEPA(3) MENTS OGLETHORPE(2) SEPA(3)
-------- ------------- ----------- -------- ------------- -----------
1991 . . . . . . . . . 3,664 3,122 542 15,029,976 14,022,213 1,007,763
1992 . . . . . . . . . 3,865 3,323 542 15,562,495 14,466,943 1,095,552
1993 . . . . . . . . . 4,283 3,736 542 17,313,313 16,253,283 1,060,030
<FN>
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(1) System peak demand of the Members measured at the Members' delivery points
(net of system losses).
(2) Includes purchased power. (See "THE POWER SUPPLY SYSTEM--Power Sales to
and Purchases from GPC--POWER PURCHASE ARRANGEMENTS" and "--Other Power
Purchases".)
(3) Supplied by SEPA through existing contracts with the Members. (See "THE
MEMBERS OF OGLETHORPE--Contracts with SEPA".)
Prior to 1993, no Member accounted for 10% or more of Oglethorpe's total
revenues. In 1993, however, Cobb EMC accounted for approximately 10% of
Oglethorpe's total revenues.
SEASONAL VARIATIONS
Although the demand for energy by the Members is influenced by seasonal
weather conditions, Oglethorpe's rate structure is designed to cause capacity
revenues, which include margins, to remain relatively level throughout the year.
Energy revenues, which do not include margins, track energy costs as they are
incurred. Although energy charges, which are based on variable costs, fluctuate
from month to month, capacity charges, which are based on annual peak demands,
do not fluctuate based on a Member's usage during a given year. Historically,
Oglethorpe's peak demand occurs during the months of June through September.
CONSERVATION AND LOAD MANAGEMENT
Oglethorpe and the Members have implemented various demand management
programs. The program goal, developed in conjunction with Oglethorpe's
integrated resource planning process, is to modify demand patterns so that
current resources are used efficiently and the need for additional generating
resources is delayed. The programs that have been implemented include an energy
efficient home program (the "Good Cents Home" program), remote-controlled
switching of air conditioners, water heaters and irrigation pumps, residential
energy audits and public appeals to encourage consumers to use less energy
during periods of peak demand. The demand management programs have reduced, and
are expected to continue to reduce, the growth of peak demand and have resulted
in an increase in off-peak sales. (See "THE POWER SUPPLY SYSTEM--Future Power
Resources--OTHER FUTURE RESOURCES".)
DISPERSED GENERATION
Oglethorpe and the Members have been discussing the desire of a number of
the Members to make greater use of dispersed generation units. If permitted by
REA, such units would be used to maintain reliability of electric service during
emergencies on a Member's distribution system, to serve specific customer needs
and otherwise to be available to Oglethorpe to serve the demands of Members on
its system. The installation and use of dispersed generation units by any Member
would be governed by policies and procedures, consistent with the Wholesale
Power Contract, designed to
2
ensure system reliability and prevent any material adverse effect on
Oglethorpe's revenues or on any other Member's power costs.
ELECTRIC RATES
Each Member is required to pay Oglethorpe for capacity and energy furnished
under its Wholesale Power Contract in accordance with rates established by
Oglethorpe. Oglethorpe reviews its rates at such intervals as it deems
appropriate but is required to do so at least once every year. Oglethorpe is
required to revise its rates as necessary so that the revenues derived from such
rates will be sufficient, but only sufficient, with its revenues from all other
sources to pay operating and maintenance costs, the cost of purchased power, the
cost of transmission services, and principal and interest on all indebtedness
(including capital lease obligations) of Oglethorpe and to provide for the
establishment and maintenance of reasonable reserves. Rates are also required to
be established so as to enable Oglethorpe to comply with all requirements
(including coverage ratios) under the Consolidated Mortgage and Security
Agreement dated as of September 1, 1993 (the "REA Mortgage") among Oglethorpe,
as mortgagor, and the United States of America acting through the Administrator
of REA, the National Bank for Cooperatives ("CoBank"), Credit Suisse, acting by
and through its New York Branch ("Credit Suisse"), and Trust Company Bank
("Trust Company"), as trustee under certain pollution control bond indentures
identified in the REA Mortgage. (See "General--RATES AND FINANCIAL COVERAGE
REQUIREMENTS" in Item 7.)
Oglethorpe's current monthly rate for electric service for capacity and
energy delivered to each Member includes energy charges that recover fuel and
variable operation and maintenance costs, adjusted semiannually to assure full
recovery of such costs, and capacity charges. The rate also includes a provision
to reflect the amortization of the deferred margins accumulated from 1985
through 1993, which amounts will be fully amortized by the end of 1995. (See
Note 1 of Notes to Financial Statements in Item 8.) Oglethorpe's rate policy
provides for a number of separate rates for certain qualified consumer loads,
which are designed to have a favorable impact on the Members' competitiveness
for certain new industrial and commercial loads. (See "THE MEMBERS OF
OGLETHORPE--Service Area and Competition".)
Oglethorpe's rates, as established by its Board of Directors, are subject
to review and approval by REA. Oglethorpe is required under the REA Mortgage to
implement rates designed to maintain a Times Interest Earned Ratio ("TIER") of
not less than 1.05, Debt Service Coverage Ratio ("DSC") of not less than 1.0 and
an Annual Debt Service Coverage Ratio ("ADSCR") of not less than 1.25.
Oglethorpe has always met or exceeded the TIER, DSC and ADSCR requirements of
the REA Mortgage. (See "General--RATES AND FINANCIAL COVERAGE REQUIREMENTS" in
Item 7.)
The Wholesale Power Contracts provide that no rate revision shall be
effective unless approved by REA, but such rate revisions are not subject to the
approval of any other Federal or state agency or authority, including the
Georgia Public Service Commission (the "GPSC"). To date, REA has not reduced or
delayed the effectiveness of any rate increase proposed by Oglethorpe.
For information regarding future rates, see "Results of Operations--
OPERATING REVENUES--SALES TO MEMBERS" in Item 7.
CERTAIN FACTORS AFFECTING THE UTILITY INDUSTRY IN GENERAL
The electric utility industry is becoming increasingly competitive as a
result of deregulation, competing energy suppliers, technologies, and other
factors. The Energy Policy Act of 1992 (the "Energy Policy Act") amended the
Federal Power Act and the Public Utility Holding Company Act to allow for
increased competition among wholesale electricity suppliers and increased access
to transmission services by such suppliers. A number of other significant
factors have affected the operations of electric utilities. They include the
availability and cost of fuel for the generation of electric energy, fluctuating
rates of load growth, compliance with environmental and other governmental
regulations, licensing and other delays affecting the construction, operation
and cost of new and existing facilities, and the effects of conservation, energy
management and other governmental regulations on the use of electric energy. All
of these factors present an increasing challenge to companies in the electric
utility industry, including Oglethorpe and the Members, to reduce costs and
improve the management of resources. (See "THE POWER SUPPLY SYSTEM--General",
"--Future Power Resources" and "--Environmental and Other Regulations".)
3
RELATIONSHIP WITH GPC
Oglethorpe's relationship with GPC is a significant factor in several
aspects of Oglethorpe's business. GPC is Oglethorpe's principal supplier of
purchased power, and Oglethorpe is one of GPC's largest customers. In 1993,
Oglethorpe derived 15% of its total revenues from sales to GPC, making GPC
Oglethorpe's largest customer. Substantially all of Oglethorpe's generating
facilities were purchased at various stages of construction from GPC and were
constructed and are now operated by GPC. Oglethorpe is the construction and
operating agent for the Rocky Mountain Project, a pumped storage hydroelectric
facility ("Rocky Mountain"), in which it acquired an interest from GPC.
Oglethorpe purchases coordination services from GPC to schedule its power
resources and its off-system purchases and sales. Oglethorpe, through the
Members, is one of GPC's principal competitors in the State of Georgia for
electric service to new customers that have a choice of supplier under the
Georgia Territorial Electric Service Act (the "Territorial Act"). Likewise, GPC
is the principal competitor of the Members for such customers. Oglethorpe and
GPC also own transmission facilities that are part of the Integrated
Transmission System (the "ITS"). GPC provides system operator services and
performs most of the required maintenance of Oglethorpe's transmission
facilities. GPC and Oglethorpe are parties to an agreement that makes allowance
for the joint planning of future generation and transmission facilities. For
further information regarding the various relationships and agreements with GPC,
see "THE MEMBERS OF OGLETHORPE--Service Area and Competition", "THE POWER
SUPPLY SYSTEM--General", "--Fuel Supply", "--Power Sales to and Purchases from
GPC", "--Future Power Resources--ROCKY MOUNTAIN", "-Transmission and Other
Power System Arrangements", "CO-OWNERS OF THE PLANTS AND THE PLANT AND
TRANSMISSION AGREEMENTS--Co-Owners of the Plants--GEORGIA POWER COMPANY", "--The
Plant Agreements", "--Agreements Relating to the Integrated Transmission
System", and "--The Joint Committee Agreement".
RELATIONSHIP WITH REA
Federal loan programs administered by REA have provided the principal
source of financing for electric cooperatives. Direct loans from REA have been a
major source of funding for the Members, while loans guaranteed by REA and made
by the Federal Financing Bank ("FFB") have been a major source of funding for
Oglethorpe. Through provisions of the REA Mortgage, REA exercises substantial
control and supervision over Oglethorpe in such areas as accounting, issuing
secured indebtedness, rates and charges for the sale of power, construction and
acquisition of facilities, and the purchase and sale of power.
In recent years, there have been legislative, administrative and budgetary
initiatives intended to reduce or, in some cases, eliminate federal funding for
electric cooperatives. In addition, the REA loan and guarantee programs have
been characterized by the imposition of increasingly problematic terms and
conditions and extended delays in access to necessary funding.
The President's budget for fiscal year 1995 proposes to set the level of
funding for the 100% guarantee program at $275 million, which if sustained at
that level in future years would not likely provide adequate funding for the
transmission and power supply needs of REA borrowers. Congress historically has
increased Administration-proposed lending levels to those necessary to meet
borrower demand. Notwithstanding historical practices, however, the future cost,
availability and magnitude of REA-guaranteed loans cannot be predicted. See "THE
MEMBERS OF OGLETHORPE-Members' Relationship with REA" for a discussion of the
impact of the budget proposal on the direct loan program.
REA continues to re-evaluate its regulatory and lending relationship with
its borrowers through what it has described as a comprehensive rule-making
project. The purpose of the project is to improve the credit-worthiness of
loans made or guaranteed by REA. In addition to adopting new rules regulating
policies and procedures for insured and guaranteed loans and lien
accommodations, REA has published a proposed rule describing a new form of
wholesale power contract and has, in an advance notice of proposed rule-making,
requested suggestions for revisions to its standard form of mortgage. Many of
these rule-makings have taken many months or years to complete and the outcome
4
of these various rule-making initiatives, whether others may be forthcoming,
whether any of such rule-making initiatives may achieve the objectives stated by
REA, or the extent to which such initiatives may affect Oglethorpe or the
Members cannot be predicted.
The Clinton Administration has proposed that the Department of Agriculture,
which includes REA, be reorganized to improve its efficiency. Legislation has
been introduced that would authorize the Secretary of Agriculture to implement
this reorganization. Under the proposed reorganization, the electric and
telephone programs of REA would be included in a new Rural Utilities Service.
The rural development functions of REA would be included in a Rural Business and
Cooperative Development Service. Both agencies would report to an Under
Secretary for Rural Economic and Community Development. Oglethorpe's management
does not believe that the reorganization, if implemented as proposed, will have
a significant adverse effect on it or the Members.
5
THE MEMBERS OF OGLETHORPE
SERVICE AREA AND COMPETITION
The Members are identified in Item 10(a) of this Report and include 39 of
the 42 electric distribution cooperatives in the State of Georgia. As of
December 31, 1993, the Members served approximately 1 million electric consumers
(meters) representing a total population of approximately 2.3 million people.
The Members serve a region covering approximately 40,000 square miles, which is
approximately 70% of the land area of Georgia served by the owners of the ITS,
encompassing 150 of the State's 159 counties. Sales by the Members in 1993
amounted to approximately 16.2 million megawatt-hours ("MWh"), with 74% to
residential consumers, 24% to commercial and industrial consumers and 2% to
other consumers. No single consumer of any Member constituted more than 1% of
the Members' aggregate sales in 1993. The Members are the principal suppliers
for the power needs of rural Georgia. While the Members do not serve any major
cities, portions of their service territories are in close proximity to urban
areas and are experiencing growth due to the expansion of urban areas, including
metropolitan Atlanta, into suburban areas and the growth of suburban areas into
neighboring rural areas. The Members have experienced average annual compound
growth rates from 1991 through 1993 of 4.5% in number of consumers, 6.9% in MWh
sales and 8.9% in electric revenues.
The Territorial Act regulates the service rights of all retail electric
suppliers in the State of Georgia. Pursuant to the Territorial Act, the GPSC
assigned substantially all areas in the State to specified retail suppliers. The
Members have the exclusive right to provide retail electric service in their
respective assigned territories, which are predominately outside of municipal
limits. The GPSC may not reassign territory or transfer service except in
limited circumstances provided by the Territorial Act. The GPSC may transfer
service for specific premises only: (i) upon a determination by the GPSC, after
joint application of electric suppliers and proper notice and hearing, that the
public convenience and necessity require a transfer of service from one electric
supplier to another; or (ii) upon a finding by GPSC, after proper notice and
hearing, that an electric supplier's service to a premise is not adequate or
dependable or that its rates, charges, service rules and regulations
unreasonably discriminate in favor of or against the consumer utilizing such
premises and the electric utility is unwilling or unable to comply with an order
from GPSC regarding such service. The GPSC may reassign territory only if it
determines that an assignee electric supplier has breached the tenets of public
convenience and necessity.
The territorial assignments under the Territorial Act are also subject to
an exception that permits the owner of any new facility located outside of
existing municipal limits and having a connected demand upon initial full
operation of 900 kilowatts or greater to receive electric service from the
retail supplier of its choice. The Members, with Oglethorpe's support, are
actively engaged in competition with other retail electric suppliers for these
new industrial and commercial loads. The number of commercial and industrial
loads served by the Members has increased in recent years.
COOPERATIVE STRUCTURE
The Members operate their systems on a not-for-profit basis. Accumulated
margins derived after payment of operating expenses and provision for
depreciation constitute patronage capital of the consumers of the Members.
Refunds of accumulated patronage capital to the individual consumers may be made
from time to time subject to limitations contained in mortgages between the
Members and REA. These mortgages generally prohibit such distributions unless,
after any such distribution, the Member's total equity will equal at least 40%
of its total assets, except that distributions may be made of up to 25% of the
margins and patronage capital received by the Member in the preceding year.
As a general matter, the Members distribute accumulated patronage capital from
time to time subject to their respective financial policies and in conformity
with their respective REA mortgages.
Oglethorpe is a membership corporation, and the Members are not
subsidiaries of Oglethorpe. Except with respect to the obligations of the
Members under each Member's Wholesale Power Contract with Oglethorpe and
Oglethorpe's rights under such contracts to receive payment for power and energy
supplied, Oglethorpe has no legal interest in, or obligations in respect of, any
of the assets, liabilities, equity, revenues or margins of the Members. (See
"OGLETHORPE POWER CORPORATION--Member Contracts".) The revenues of the Members
are not pledged as security
6
to Oglethorpe but are the source from which moneys are derived by the Members to
pay for power supplied by Oglethorpe under the Wholesale Power Contracts.
Revenues of the Members are, however, pledged under the respective REA mortgages
of the Members.
RATE REGULATION OF MEMBERS
Through provisions in the loan documents securing loans to the Members, REA
exercises control and supervision over the Members in such areas as: (i)
accounting; (ii) borrowings; (iii) rates and charges for the sale of power; (iv)
construction and acquisition of facilities; and (v) the purchase and sale of
power. The individual REA mortgages of the Members require them to design rates
with a view to maintaining an average TIER of not less than 1.50 and an average
DSC of not less than 1.25 for the two highest out of every three successive
years.
Although the setting of the rates of the Members is not subject to approval
of any Federal or state agency or authority other than REA, the Territorial Act
prohibits the Members from unreasonable discrimination in the setting of rates,
charges, service rules or regulations.
CONTRACTS WITH SEPA
In addition to energy received from Oglethorpe under the Wholesale Power
Contracts, the Members purchase hydroelectric power under contracts with SEPA.
In 1993, the aggregate SEPA allocation to the Members was 542 MW plus associated
energy, representing approximately 13% of total Member peak demand and
approximately 6% of total Member energy requirements. (See "OGLETHORPE POWER
CORPORATION-Member Contracts" and "-Member Demand and Energy Requirements" and
the table thereunder.)
In September 1993, SEPA issued a Notice of Intent to revise its marketing
policy for the Georgia-Alabama-South Carolina system of projects, from which
the Members purchase SEPA power. This policy will govern the renewal of SEPA's
contracts with the Members, which are subject to renewal on May 31, 1994.
Although Oglethorpe does not anticipate that such revised policy will result in
a significant change, the final marketing policy and its effect on the Members'
allocations of capacity and energy cannot be predicted with certainty.
MEMBERS' RELATIONSHIP WITH REA
Federal loan programs providing direct loans from REA to electric
cooperatives have been a major source of funding for the Members. On November 1,
1993, the President signed into law the Rural Electrification Loan Restructuring
Act of 1993, which contains significant revisions to the REA loan program
utilized by the Members. The Members previously relied on the 5% insured loan
program, under which the REA Administrator could require that up to 30% of a
borrower's capital needs be obtained from private sources. The 1993 Act provides
for loans to be made at an interest rate equal to that being paid on municipal
bonds with comparable maturities. Certain borrowers with either (i) low
consumer density or (ii) higher than average rates and consumers having lower
than average incomes will have borrowing rates capped at 7%. The 1993 Act
continues to make 5% loans available for hardship cases. Loans will also be
available to fund demand-side management and conservation programs. Although the
1993 Act will reduce the Government's cost associated with the REA loan program,
there is no guarantee that further changes in the cost and availability of the
REA lending program will not be made, since the level of funding will remain
subject to the Congressional budget and appropriation processes. The President's
budget proposal for the fiscal year 1995 includes a proposal to replace most of
the "municipal bond rate" program with higher-cost loans made at the cost to the
United States Department of the Treasury. The outcome of this budget proposal
and the future cost, availability and amount of REA direct and guaranteed loans
cannot be predicted.
For further information regarding the REA program, see "OGLETHORPE POWER
CORPORATION-Relationship with REA".
7
THIRD-PARTY INTEREST IN MEMBER SYSTEMS
From time to time, utilities may be approached by other utilities or other
parties interested in purchasing their systems. Some of Oglethorpe's Members
have been approached in the past by third parties indicating an interest in
purchasing their systems. The Wholesale Power Contract between Oglethorpe and
each Member provides that no Member may reorganize, consolidate or merge, or
sell, lease or transfer all or a substantial portion of its assets (or make any
agreement therefor), so long as Oglethorpe has notes outstanding to REA and the
FFB, without first paying such portion of any such outstanding notes as may be
determined by Oglethorpe with the prior written consent of REA and otherwise
complying with such reasonable terms and conditions as Oglethorpe and REA may
require. The enforceability of the REA form of wholesale power contract has been
consistently upheld by the courts in several jurisdictions. In addition, REA has
recently stated its policy that it will not encourage or facilitate the buyout
of borrowers by third parties and that it will expect cooperative distribution
utilities to retire a proportionate share of the associated G&T indebtedness and
to pay other appropriate costs and expenses of the G&T as a condition of a
buyout.
Oglethorpe's management is unable to predict what transactions, if any,
might result from the past third-party interest or whether any other proposals
will be made to the Members. Oglethorpe has received an opinion of its counsel
that each of the Wholesale Power Contracts is a valid, binding and enforceable
obligation of each respective Member. Based on this opinion and other factors,
Oglethorpe's management believes that no sale or transfer of Member assets would
have a material adverse effect upon its financial condition or results of
operations.
8
THE POWER SUPPLY SYSTEM
GENERAL
Oglethorpe supplies the capacity and energy requirements of the Members
from a combination of owned and leased generating plants and power purchased
under long-term contracts with other power suppliers. These resources are
scheduled and dispatched so as to minimize the operating cost of Oglethorpe's
system. In addition, Oglethorpe purchases and sells capacity and energy in the
bulk power market to make the best use of its resources and thus minimize the
cost of capacity and energy delivered to the Members.
The following table sets forth certain information with respect to the
generating facilities in which Oglethorpe currently has ownership or leasehold
interests, all of which are in commercial operation except for Rocky Mountain,
which is under construction. The Edwin I. Hatch Plant ("Plant Hatch"), the Hal
B. Wansley Plant ("Plant Wansley"), the Alvin W. Vogtle Plant ("Plant Vogtle")
and the Robert W. Scherer Units No. 1 and No. 2 ("Scherer Units No. 1 and No.
2") are co-owned by Oglethorpe, GPC, the Municipal Electric Authority of Georgia
("MEAG") and the City of Dalton ("Dalton"). GPC is the operating agent for each
of these plants, except Rocky Mountain. Rocky Mountain is co-owned by Oglethorpe
and GPC, and Oglethorpe is the construction and operating agent. Oglethorpe is
the sole owner of the Tallassee Project at the Walter W. Harrison Dam
("Tallassee"). (See "CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION
AGREEMENTS--The Plant Agreements".)
OGLETHORPE'S
SHARE OF NAME- COMMERCIAL LICENSE
PERCENTAGE PLATE CAPACITY OPERATION EXPIRATION
TYPE OF FUEL INTEREST(1) (MW) DATE DATE
------------ ----------- -------------- ---------- ----------
FACILITIES IN SERVICE:
Plant Hatch (near Baxley)
Unit No. 1 Nuclear 30 243.0 1975 2014
Unit No. 2 Nuclear 30 246.0 1979 2018
Plant Vogtle (near Waynesboro)
Unit No. 1 Nuclear 30 348.0 1987 2027
Unit No. 2 Nuclear 30 348.0 1989 2029
Plant Wansley (near Carrollton)
Unit No. 1 Coal 30 259.5 1976 N/A(3)
Unit No. 2 Coal 30 259.5 1978 N/A(3)
Combustion Turbine Oil 30 14.8 1980 N/A(3)
Plant Scherer (near Forsyth)
Unit No. 1 Coal 60 490.8 1982 N/A(3)
Unit No. 2 Coal 60 490.8 1984 N/A(3)
Tallassee (near Athens) Hydro 100 2.1 1986 2023
-------
Total in Service 2,702.5
-------
FACILITIES UNDER CONSTRUCTION:
Rocky Mountain Pumped Storage
(near Rome) Hydro 75(2) 635.9 1995 2027
-------
Total Ownership 3,338.4
-------
<FN>
- -------------------------
(1) Oglethorpe has an ownership interest in all of the facilities except
Scherer Unit No. 2. The 60% interest in Scherer Unit No. 2 is leased under
leases that expire in 2013, subject to options to renew for a total of 8.5
years.
(2) Represents Oglethorpe's estimated ownership interest upon completion.
Oglethorpe's ultimate ownership interest is proportional to its investment
in the project relative to GPC's investment. (See "Future Power
Resources--ROCKY MOUNTAIN" herein.)
(3) Coal-fired units and combustion turbines do not operate under operating
licenses similar to those granted to nuclear units by the Nuclear
Regulatory Commission and to hydroelectric plants by the Federal Energy
Regulatory Commission.
9
Upon completion of Rocky Mountain, Oglethorpe will own or lease 1,500.6 MW
of coal-fired capacity, 1,185 MW of nuclear-fueled capacity, an estimated 635.9
MW of pumped storage hydroelectric capacity, 14.8 MW of oil-fired combustion
turbine capacity and 2.1 MW of hydroelectric capacity.
Oglethorpe and the other co-owners of the above plants also own
transmission facilities which together form the ITS. Through agreements, common
access to the combined facilities that compose the ITS enables the owners to use
their combined resources to make deliveries to their respective consumers, to
provide transmission service to third parties and to make off-system purchases
and sales. (See "Transmission and Other Power System Arrangements" herein and
"CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION AGREEMENTS--Agreements
Relating to Integrated Transmission System".)
PLANT PERFORMANCE
The following table sets forth certain operating performance information of
each of the major generating facilities in which Oglethorpe currently has
ownership or leasehold interests, except for Rocky Mountain which is not yet in
commercial operation:
EQUIVALENT AVAILABILITY(1) CAPACITY FACTOR(2)
-------------------------- --------------------
UNIT 1993 1992 1991 1993 1992 1991
- ---- ---- ---- ---- ---- ---- ----
Plant Hatch
Unit No. 1 . . . . . . . 76% 95% 73% 77% 95% 72%
Unit No. 2 . . . . . . . 75 70 74 75 70 74
Plant Vogtle
Unit No. 1 . . . . . . . 85 96 78 86 96 78
Unit No. 2 . . . . . . . 87 80 92 87 80 92
Plant Wansley
Unit No. 1 . . . . . . . 88 92 84 71 76 64
Unit No. 2 . . . . . . . 90 92 94 73 77 73
Plant Scherer
Unit No. 1 . . . . . . . 88 95 98 36 17 25
Unit No. 2 . . . . . . . 95 100 100 37 29 16
<FN>
- -------------------------
(1) Equivalent Availability is a measure of the percentage of time that a unit
was available to generate if called upon, adjusted for periods when the
unit is partially derated from the "maximum dependable capacity" rating.
(2) Capacity Factor is a measure of the output of a unit as a percentage of the
maximum output, based on the "maximum dependable capacity" rating, over
the period of measure.
The nuclear refueling cycle for Plants Hatch and Vogtle exceeds twelve
months. Therefore, in some calendar years the units at these plants are not
taken out of service for refueling, resulting in higher levels of equivalent
availability and capacity factor.
Although Plant Scherer is designed for base load operation, it has
primarily operated in peaking service due to the historically higher cost of its
fuel supply (low-sulfur coal under long-term contracts) relative to the cost of
Oglethorpe's other resources. Thus, the capacity factors for Scherer Units No. 1
and No. 2 have been lower than those typical of base loaded units. With the
planned acquisition of lower cost low-sulfur coal and expected increases in
Member sales, Oglethorpe's management anticipates higher utilization of Scherer
Units No. 1 and No. 2 in the future.
10
FUEL SUPPLY
Coal for Plant Wansley is purchased under long-term contracts, which are
estimated to be sufficient to provide the majority of the coal requirements of
Plant Wansley through 1997, with the remainder being provided through spot
market transactions. To comply with the requirements of the Clean Air Act, as
amended (the "Clean Air Act"), Plant Wansley is being modified to burn
low-sulfur coal. As of February 28, 1994, there was a 20-day coal supply at
Plant Wansley based on nameplate rating.
Low-sulfur "compliance" coal for Scherer Units No. 1 and No. 2 is purchased
under long-term contracts and spot market transactions. As of February 28, 1994,
the coal stockpile at Plant Scherer contained a 29-day supply based on nameplate
rating. Further, Plant Scherer is being converted to burn both sub-bituminous
and bituminous coals, and a separate stockpile of sub-bituminous coal is being
built in addition to the stockpile of bituminous coal.
The coal supply at Plants Scherer and Wansley is lower than normal due to
(i) higher than expected use of Plant Scherer during the summer of 1993 and the
winter of 1994 because of abnormal temperatures, (ii) transportation
interruptions resulting from severe weather conditions, and (iii) deferred
deliveries because of higher replacement prices due to the United Mine Workers
of America strike. The supply is planned to be replenished as needed and as
competitively priced coal becomes available.
The Scherer ownership and operating agreements were amended effective
October 1993 to allow each co-owner (i) to dispatch separately its respective
ownership interest in conjunction with contracting separately for long-term coal
purchases procured by GPC and (ii) to procure separately long-term coal
purchases. Oglethorpe elected to dispatch separately in November 1993. Pursuant
to the amendments, GPC is expected to implement separate dispatch by May 1,
1994. Oglethorpe intends to continue to use GPC as its agent for fuel
procurement. In anticipation of these changes, Oglethorpe formed a wholly owned
subsidiary to acquire rail cars designed for hauling coal from the western coal
mining regions. The subsidiary, Black Diamond Energy, Inc., has acquired 115
cars, and Oglethorpe anticipates the acquisition of approximately 350 additional
cars during the next three years for both Plants Scherer and Wansley. Oglethorpe
has entered into an initial 15-year lease with the subsidiary which obligates
Oglethorpe to pay all of the ownership and operating expenses of the subsidiary
relating to the leased rail cars during the lease term. The co-owners are
currently negotiating a similar amendment to the Plant Wansley operating
agreement.
For information relating to the impact that the Clean Air Act will have on
Oglethorpe, see "Environmental and Other Regulations" herein.
GPC, as operating agent, has the responsibility to procure nuclear fuel for
Plant Hatch and Plant Vogtle. GPC has contracted with Southern Nuclear Operating
Company ("SONOPCO") to provide nuclear services, including nuclear fuel
procurement. SONOPCO employs both spot purchases and long-term contracts to
satisfy nuclear fuel requirements. The nuclear fuel supply and related services
are expected to be adequate to satisfy current and future nuclear generation
requirements.
Plants Hatch and Vogtle currently have on-site spent fuel storage capacity.
Based on normal operations and retention of all spent fuel in the reactor, it is
anticipated that existing on-site pool capacity would not be sufficient in 2003
and 2009, respectively, to accept the number of spent fuel assemblies that would
normally be removed from the reactor during a refueling. Contracts with the
Department of Energy ("DOE") have been executed to provide for the permanent
disposal of spent nuclear fuel produced at Plant Hatch and Plant Vogtle. The
services to be provided by DOE are scheduled to begin in 1998. However, the
actual year that these services will begin is uncertain. If DOE does not begin
receiving the spent fuel from Plant Hatch in 2003 or from Plant Vogtle in 2009,
alternative methods of spent fuel storage will be needed. One option available
is expansion of spent fuel storage at the plant sites. (See "Environmental and
Other Regulations" herein for a discussion of the Nuclear Waste Policy Act and
Note 1 of Notes to Financial Statements in Item 8 regarding nuclear fuel cost.)
11
PROPOSED CHANGES TO NUCLEAR PLANT OPERATING ARRANGEMENTS
In September 1992, GPC filed applications with the Nuclear Regulatory
Commission (the "NRC") to add SONOPCO to the operating license of each unit of
Plants Hatch and Vogtle and designate SONOPCO as the operator. The application
is currently pending before the Atomic Safety and Licensing Board. SONOPCO, a
subsidiary of The Southern Company specializing in nuclear services, currently
provides certain operating, maintenance, and other services to GPC in accordance
with the Amended and Restated Nuclear Managing Board Agreement (the "Amended and
Restated NMBA") and the agreements referenced in the Amended and Restated NMBA.
The co-owners have agreed to a Nuclear Operating Agreement between GPC and
SONOPCO, which will be entered into in the event the NRC approves the
application. (See "CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION
AGREEMENTS--The Plant Agreements--HATCH, WANSLEY, VOGTLE AND SCHERER".)
POWER SALES TO AND PURCHASES FROM GPC
A significant portion of Oglethorpe's sales are made to GPC and a
significant portion of Oglethorpe's purchased power is obtained from GPC. The
following table sets forth a summary of Oglethorpe's electric purchases from and
sales to GPC and all other utilities as a group:
MWh
------------------------------
1993 1992
---------- ----------
Sources of Energy:
- -----------------
Owned or Leased Generation . . . . . . . . 14,575,920 13,805,683
Purchased -- GPC . . . . . . . . . . . . . 5,198,356 4,669,282
-- Others. . . . . . . . . . . . 2,422,459 1,563,980
---------- ----------
Total Sources. . . . . . . . . . . 22,196,735 20,038,945
---------- ----------
---------- ----------
Distribution of Energy:
- ----------------------
Members. . . . . . . . . . . . . . . . . . 16,253,283 14,466,943
Non-Members -- GPC . . . . . . . . . . . . 3,432,542 4,621,675
-- Others. . . . . . . . . . . 1,617,684 272,314
Transmission Losses. . . . . . . . . . . . 893,226 678,013
---------- ----------
Total Distribution . . . . . . . . 22,196,735 20,038,945
---------- ----------
---------- ----------
The sales to GPC are made under the GPC Sell-back (as herein defined) and
the Coordination Services Agreement (the "CSA"). The purchases from GPC are made
under the Block Power Sale Agreement (the "BPSA") and the CSA.
GPC SELL-BACK
Pursuant to the contractual arrangements with GPC, Oglethorpe has an
obligation to sell to GPC, and GPC has an obligation to buy from Oglethorpe,
commencing with the commercial operation of each co-owned unit (other than Rocky
Mountain) and extending for various periods, a declining percentage of
Oglethorpe's entitlement to the capacity and energy of such unit (the "GPC
Sell-back"). The GPC Sell-back has expired in accordance with its terms for
Plants Wansley, Hatch and Scherer Units No. 1 and No. 2 and continues to decline
for Plant Vogtle. The GPC Sell-back will expire for Unit No. 1 of Plant Vogtle
at the end of May 1994 and for Unit No. 2 of Plant Vogtle at the end of May
1995. For 1993, the GPC Sell-back represented 6% of total energy sales by
Oglethorpe. Capacity and energy revenues from the GPC Sell-back represented 10%
of Oglethorpe's total revenues in 1993.
As GPC's entitlement to capacity and energy under the GPC Sell-back has
decreased and continues to decrease, Oglethorpe's increased entitlement to the
output of each unit has been and will continue to be used to serve its
12
own requirements. The increased costs thereof will be recovered through Member
rates and through off-system sales transactions. The historical ability of
Oglethorpe to sell power from new units to GPC under the GPC Sell-back while at
the same time purchasing power from GPC under lower-cost arrangements has
enabled Oglethorpe to moderate the effects of the higher costs associated with
new generating units on Oglethorpe's costs of service, and therefore on the
rates charged the Members. (See "Other Power Purchases" herein, and "CO-OWNERS
OF THE PLANTS AND THE PLANT AND TRANSMISSION AGREEMENTS--The Plant Agreements--
HATCH, WANSLEY, VOGTLE AND SCHERER" and Note 1 of Notes to Financial Statements
in Item 8.)
The following table sets forth the contractual schedule for the fractional
portion of capacity and energy retained by GPC for the units for which GPC is
currently making GPC Sell-back payments:
CONTRACT YEAR ENDED MAY 31,
---------------------------
OPERATING UNIT 1994 1995 1996
-------------- ---- ---- ----
Vogtle Unit No. 1. . . . . . . . 4/30 -- --
Vogtle Unit No. 2. . . . . . . . 8/30 4/30 --
POWER PURCHASE ARRANGEMENTS
Oglethorpe purchases 1,250 MW of capacity and associated energy from GPC on
a take-or-pay basis under the BPSA. The contract expires December 31, 2001. The
BPSA, along with the Revised and Restated Integrated Transmission System
Agreements (the "ITSA") and the CSA, were entered into in 1990 and made
effective in 1991 as part of a comprehensive restructuring of the way Oglethorpe
plans for and meets the Members' power requirements. These agreements have
improved Oglethorpe's ability to buy and sell power and transmission services in
the bulk power markets.
The capacity purchases under the BPSA are from six Component Blocks (as
defined in the BPSA), composed of four Component Blocks of 250 MW each
(coal-fired units) and two Component Blocks of 125 MW each (combustion turbine
units). Although Oglethorpe may not increase its purchases under the BPSA, it
may reduce its purchases by eliminating one or more Component Blocks upon
written notice to GPC. Oglethorpe may reduce up to 250 MW with two years'
notice, above 250 to 500 MW with four years' notice, and more than 500 MW with
seven years' notice. Oglethorpe is entitled to extend the purchase of one or
more Component Blocks one additional year at a time under the same notice
conditions. The capacity in one or more Component Blocks may, however, be less
than 250 MW, as the result of scheduled retirement of units or retirements due
to force majeure events. All units in the combustion turbine Component Blocks
are scheduled to be retired by 2003.
Under the CSA, Oglethorpe schedules and directs GPC to dispatch and
coordinate power from all of Oglethorpe's generation and purchased power
resources through December 31, 1999. The CSA requires Oglethorpe to give GPC one
hour's notice in order to schedule any off-system transactions, which will limit
Oglethorpe's ability to compete with GPC for short-term energy transactions
requiring less than one hour's notice. Oglethorpe may elect to establish its
own control area and terminate regulation services under the CSA upon one year's
notice to GPC. Upon such termination, the parties will, if necessary, negotiate
new service schedules and applicable rates. In order to optimize its use of
coordination services, Oglethorpe is currently installing the equipment that
would be necessary to operate its own control area.
For a further discussion of the new power supply arrangements, see "Other
Power Purchases", "Future Power Resources", and "Transmission and Other Power
System Arrangements" herein, and "CO-OWNERS OF THE PLANTS AND THE PLANT AND
TRANSMISSION AGREEMENTS--The Plant Agreements--HATCH, WANSLEY, VOGTLE AND
SCHERER".
13
OTHER POWER PURCHASES
Oglethorpe has entered into power purchase contracts with Entergy Power,
Inc. ("EPI") and Big Rivers Electric Corporation ("Big Rivers"), each for the
purchase of 100 MW, extending through June and July 2002, respectively. The EPI
contract is subject to the approval of REA. The availability of capacity under
the EPI contract is dependent on the availability of two specific generating
units available to EPI. The Tennessee Valley Authority ("TVA") provides the
transmission service to deliver the power from the Big Rivers electric system to
the ITS. TVA and Southern Company Services, as agent for Alabama Power Company
and Mississippi Power Company, provide the transmission service necessary to
deliver the power from EPI to the ITS. (See "Transmission and Other Power System
Arrangements" herein and Note 10 of the Financial Statements in Item 8.)
In addition to the purchases from GPC, Big Rivers and EPI, Oglethorpe also
purchases small amounts of capacity and energy from "qualifying facilities"
under the Public Utility Regulatory Policies Act of 1978 ("PURPA"). Under a
waiver order from the Federal Energy Regulatory Commission ("FERC"), Oglethorpe
will make all purchases the Members would have otherwise been required to make
under PURPA and Oglethorpe was relieved of its obligation to sell certain
services to "qualifying facilities" so long as the Members make those sales.
Oglethorpe provides the Members with the necessary services to fulfill these
sale obligations. Purchases by Oglethorpe from such qualifying facilities
provided 0.4% of Oglethorpe's energy requirements for the Members in 1993.
FUTURE POWER RESOURCES
Oglethorpe uses an integrated resources planning process to study regularly
the need for and feasibility of adding additional generation facilities. This
planning process also considers demand-side management options that could be
implemented by the Members as well as off-system sales of capacity and energy to
optimize the use of Oglethorpe's resources. Oglethorpe's current resources (both
owned or leased generation and purchased power) consist predominately of
resources that can be best used in base-load operation. As a result, all of
Oglethorpe's currently planned resource additions are for peaking capacity. To
further optimize the use of its resources, Oglethorpe is seeking to sell certain
amounts of base capacity and associated energy and to replace it with the
acquisition of peaking capacity when necessary (see "Future Long-Term Power
Sales" herein).
ROCKY MOUNTAIN
Rocky Mountain, which is currently under construction by Oglethorpe, is a
pumped storage hydroelectric facility with no conventional hydroelectric
capability. The facility is designed to consist of three units with a combined
nameplate rating of 847.8 MW at maximum head and a FERC-licensed capacity of 760
MW at minimum head. Under optimal operations, the maximum output of the plant
will decline steadily over a period of approximately eight hours as the upper
reservoir is emptied.
In 1988, Oglethorpe acquired from GPC an undivided ownership interest in
Rocky Mountain. Under the Rocky Mountain ownership arrangement, Oglethorpe, as
agent, is responsible for the design, construction and operation of Rocky
Mountain.
The license issued by FERC for Rocky Mountain expires in 2027. Among other
conditions, the license requires that construction be completed by June 1, 1996.
As of February 28, 1994, Rocky Mountain was approximately 92% complete. Rocky
Mountain is currently scheduled to begin commercial operation in early 1995.
Construction at Rocky Mountain is currently on schedule and under budget.
Under the Ownership Participation Agreement (as hereinafter defined), GPC
has not been required to expend any funds for construction of Rocky Mountain
since December 15, 1988, and is not required to make any additional
contributions. Oglethorpe is required to finance and complete Rocky Mountain.
(See "Liquidity and Capital Resources" in Item 7.) Each party's undivided
interest in Rocky Mountain is equal to the proportion that its respective
investment bears to the total investment in Rocky Mountain (excluding each
party's cost of funds and ad valorem taxes). (See "CO-OWNERS OF THE PLANTS AND
THE PLANT AND TRANSMISSION AGREEMENTS--The Plant
14
Agreements--ROCKY MOUNTAIN".) As of December 31, 1993, Oglethorpe's ownership
interest in Rocky Mountain was approximately 70%. Based on current arrangements,
Oglethorpe's ultimate ownership interest in Rocky Mountain is estimated to be
approximately 75%, with GPC owning the remaining 25%.
Oglethorpe, GPC and certain third parties have had preliminary discussions
regarding alternatives by which Oglethorpe may acquire the output of GPC's
remaining interest in Rocky Mountain. Options being discussed include a
long-term lease or power purchase arrangement with a third party which would
purchase GPC's interest or a purchase of such interest directly by Oglethorpe.
The nameplate rating of GPC's ultimate ownership interest is estimated to be
approximately 212 MW, and if any such transaction is consummated, such output
would satisfy a portion of Oglethorpe's long-term capacity needs. The outcome of
these discussions cannot be determined at this time.
HARTWELL PURCHASE
In 1992, Oglethorpe entered into a contract for the purchase of
approximately 300 MW of capacity with Hartwell Energy Limited Partnership
("Hartwell"), a partnership owned 50% by Destec Energy, Inc. and 50% by American
National Power, Inc., a subsidiary of National Power, PLC. The contract has a
term of 25 years, commencing upon commercial operation, which by contract is
scheduled to be no later than June 1994. Under the contract, Hartwell is
constructing two 150 MW gas-fired turbine generating units on a site near
Hartwell, Georgia. Oglethorpe intends to use the units for peaking capacity but
has the right to dispatch the units fully. If Hartwell misses any of a specified
list of project milestones, Oglethorpe may terminate the contract and, if it so
chooses, purchase the project at fair market value. Hartwell has provided an
irrevocable letter of credit payable to Oglethorpe in the amount of $10,360,000,
which can be drawn upon if the project is not in service by the scheduled date
or as liquidated damages in case of a default by Hartwell. Hartwell has advised
Oglethorpe that it expects to begin deliveries of power to Oglethorpe prior to
June 1994.
OTHER FUTURE RESOURCES
In its current integrated resource plan, Oglethorpe has identified a
potential need for additional peaking capacity in the late 1990s. In November
1993, Oglethorpe issued a Request for Proposals for the purchase of up to 600 MW
of long-term peaking capacity to be available by June 1, 1999. Proposals were
due March 29, 1994. Oglethorpe has reserved the right to reject any and all
bids, and should it do so, Oglethorpe may construct that capacity itself.
Oglethorpe has also agreed to purchase from Florida Power Corporation 50 MW of
peaking capacity during the summer of 1997 and 275 MW of peaking capacity during
the summer of 1998. This purchase is subject to regulatory approval.
TRANSMISSION AND OTHER POWER SYSTEM ARRANGEMENTS
As of February 28, 1994, Oglethorpe owned approximately 2,186 miles of
transmission line and 404 substations of various voltages. Oglethorpe provides
power and energy to the Members through the ITS consisting of transmission
system facilities owned by Oglethorpe, GPC, MEAG and Dalton. As a result of its
participation in the ITS, Oglethorpe is entitled to use any of the transmission
facilities included in the system, regardless of ownership. Oglethorpe's rights
and obligations with respect to the system are governed by the ITSA. (See "Power
Sales to and Purchases from GPC--POWER PURCHASE ARRANGEMENTS" herein and
"CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION AGREEMENTS--Agreements
Relating to Integrated Transmission System".)
In addition to the interconnections available to Oglethorpe through the
ITS, Oglethorpe has interconnection, interchange, transmission and/or short-term
capacity and energy purchase or sale agreements with Alabama Electric
Cooperative, Cajun Electric Power Cooperative, Big Rivers, Seminole Electric
Cooperative, Entergy Services (as agent for the Entergy operating companies),
TVA, Florida Power Corporation, Jacksonville Electric Authority, Tampa Electric
Company, Louisville Gas & Electric Company, Florida Power & Light Company, SEPA,
South Carolina Electric & Gas (subject to approval by FERC), South Carolina
Public Service Authority, Arkansas Electric Cooperative Corporation and East
Kentucky Power Cooperative. The agreements provide variously for the purchase
and/or sale of capacity and energy and/or for transmission service.
Implementation of such contracts and other off-system transactions are
accomplished by the CSA (see "Power Sales to and Purchases from GPC--POWER
PURCHASE ARRANGEMENTS" herein).
15
In addition, Oglethorpe has sold to GPC a portion of its entitlement to the
interface capability between the ITS and the Florida electric system through May
1994. Oglethorpe has purchased from GPC sufficient entitlement to the interface
between the Integrated Transmission System and TVA to implement the purchases
from Big Rivers and EPI. Oglethorpe regularly buys and sells power in the
short-term bulk power market.
FUTURE LONG-TERM POWER SALES
Oglethorpe has signed a Letter of Intent with Alabama Electric Cooperative
for the sale of 100 MW of base capacity beginning June 1, 1998, and extending
through December 31, 2005. This arrangement is subject to the approval of a
definitive agreement by the Boards of Directors of each party. The agreement
would also be subject to approval by REA. No assurances can be given that such
definitive agreement will be consummated. Oglethorpe has also submitted bids to
various formal and informal solicitations for capacity sales. Whether any such
bid will be successful is uncertain.
ENVIRONMENTAL AND OTHER REGULATIONS
GENERAL
As is typical in the utility industry, Oglethorpe is subject to Federal,
State and local air and water quality requirements which, among other things,
regulate emissions of particulates, sulfur dioxide and nitrogen oxide into the
air and discharges of pollutants, including heat, into waters of the United
States. Oglethorpe is also subject to Federal, State and local waste disposal
requirements which regulate the manner of transportation, storage and disposal
of solid and other waste. In general, environmental requirements are becoming
increasingly stringent, and further or new requirements may substantially
increase the cost of electric service by requiring changes in the design or
operation of existing facilities as well as changes or delays in the location,
design, construction or operation of new facilities. Failure to comply with such
requirements could result in the imposition of civil and criminal penalties as
well as the complete shutdown of individual generating units not in compliance.
There is no assurance that the units in operation or under construction will
always remain subject to the regulations currently in effect or will always be
in compliance with future regulations.
Compliance with environmental standards or deadlines will continue to be
reflected in Oglethorpe's capital and operating costs. Oglethorpe's direct
capital costs to achieve compliance with air and water quality control
facilities were approximately $6.5 million in 1993 and are expected to be
approximately $3.1 million in 1994, $4.1 million in 1995 and $8.6 million in
1996.
CLEAN AIR ACT
The Clean Air Act seeks to improve the ambient air quality throughout the
United States by the year 2000 and beyond. The acid rain provisions of Title IV
require the reduction of sulfur dioxide and nitrogen oxide emissions from
affected units, including coal-fired electric power facilities. The sulfur
dioxide reductions required by Title IV will be achieved in two phases. Phase I
addresses specific generating units named in the Clean Air Act. Both units of
Plant Wansley are "affected units" under Phase I. Scherer Units No. 1 and No. 2
are not "affected units" under Phase I but are affected units under Phase II. In
Phase II, the total U.S. emissions of sulfur dioxide will be capped at 8.9
million tons by the year 2000, using a "tradeable allowance" plan. Final Phase
II sulfur dioxide allocations have been published by Environmental Protection
Agency ("EPA") regulations. Compliance with the Clean Air Act will require
expenditures for monitoring, annual permit fees, and in some instances may
involve increased operating or maintenance expenses or capital expenditures for
pollution control and continuous monitoring equipment.
Capital improvements, of which Oglethorpe's share is approximately $6.4
million, are in progress at Plant Wansley. Scheduled to be completed in 1994,
these improvements are designed to bring the plant into compliance with
anticipated requirements for both Phase I and Phase II. Approximately $500,000
in capital improvements, to be completed in 1994, will be made at Plant Scherer.
The estimated cost of additional improvements at Plant Wansley and Plant Scherer
are
16
dependent upon the chosen compliance plan and may be affected by future plan
amendments and future regulation. In addition, the final capital cost of
improvements and any effect on operating costs will be determined by the
compliance plan as finally implemented and any applicable regulatory changes.
Title I of the Clean Air Act requires the State of Georgia to conduct
specific studies and establish new rules regulating sources of nitrogen oxide
and volatile organic compounds. The new rules must be promulgated by November
1994, with attainment demonstrated by November 1999. Metropolitan Atlanta is
classified as a "serious non-attainment area" with regard to the ozone ambient
air quality standards. Plant Wansley is near although not in this non-attainment
area. The results of these studies and new rules could require nitrogen oxide
controls more stringent than those required for Title IV compliance. The Clean
Air Act also requires that several studies be conducted regarding the health
effects of power plant emissions of certain hazardous air pollutants. The
studies will be used in making decisions on whether additional controls of these
pollutants are necessary. The effect of any of these potential regulatory
changes under Title I, including new rules under the amended provisions, cannot
now be predicted.
The Clean Air Act requires the EPA to review all National Ambient Air
Quality Standards ("NAAQS") periodically, revising such standards as necessary.
EPA continues to evaluate the need for a new short-term standard for sulfur
oxides (measured as sulfur dioxide). Preliminary results from an EPA study
indicate that a new short-term NAAQS for sulfur dioxide might require numerous
power plants to install emission controls, perhaps in addition to any required
under Title IV of the Clean Air Act. These controls could result in substantial
costs to Oglethorpe. EPA is also evaluating the need to revise the NAAQS for
nitrogen dioxide and will be updating the criteria document used in its recent
decision not to revise the NAAQS for ozone. EPA is not currently formally
revising the particulate matter NAAQS but is gathering information which may be
used in a revision. The impact of any change in the ozone, sulfur dioxide,
nitrogen dioxide or particulate matter NAAQS cannot now be determined because
the effect of any change would depend in part on the final ambient standards.
Although Oglethorpe's management is currently unable to determine the
overall effect that compliance with requirements under the Clean Air Act will
have on its operations, it does not believe that any required increases in
capital or operating expenses would have a material effect on its results of
operations or financial condition.
Compliance with requirements under the Clean Air Act may also require
increased capital or operating expenses on the part of GPC. Any increases in
GPC's capital or operating expenses may cause an increase in the cost of power
purchased from GPC. (See "Power Sales to and Purchases from GPC--POWER PURCHASE
ARRANGEMENTS" herein.)
CLEAN WATER ACT
Oglethorpe is subject to provisions of the Clean Water Act, as amended. As
a result of the 1987 Amendments to the Clean Water Act, the State of Georgia has
amended its State Water Quality Standards to make them more stringent. These
amendments will cause an increase in Oglethorpe's cost to comply. These costs
include capital expenditures for improvements at Plant Scherer to comply with
Georgia's new clean water regulations covering waste water discharge.
Oglethorpe's share of these improvements, completed in early 1994, was
approximately $2 million.
Congress is considering reauthorizing the Clean Water Act. If that occurs,
Oglethorpe's operations could be affected. However, the full impact of any
reauthorization cannot now be determined and will depend on the specific changes
to the statute, as well as to any implementing state or federal regulations that
might be promulgated.
NUCLEAR REGULATION
Oglethorpe is subject to the provisions of the Atomic Energy Act of 1954,
as amended (the "Atomic Energy Act"), which vests jurisdiction in the NRC over
the construction and operation of nuclear reactors, particularly with regard to
certain public health, safety and antitrust matters. The National Environmental
Policy Act has been construed to expand the jurisdiction of the NRC to consider
the environmental impact of a facility licensed under the Atomic Energy Act.
Plants Hatch and Vogtle are being operated under licenses issued by the NRC. All
aspects of the operation and maintenance of nuclear power plants are regulated
by the NRC. From time to time, new NRC regulations require changes in the
design, operation and maintenance of existing nuclear reactors. Operating
licenses issued by the NRC are
17
subject to revocation, suspension or modification, and the operation of a
nuclear unit may be suspended if the NRC determines that the public interest,
health or safety so requires. (See "Proposed Changes to Nuclear Plant Operating
Arrangements" herein.)
Pursuant to the Nuclear Waste Policy Act of 1982, as amended, the Federal
government has the regulatory responsibility for the final disposition of
commercially produced high-level radioactive waste materials, including spent
nuclear fuel. Such Act requires the owner of nuclear facilities to enter into
disposal contracts with DOE for such material. These contracts require each such
owner to pay a fee which is currently one dollar per MWh for the net electricity
generated and sold by each of its reactors. (See "Fuel Supply" herein.)
For information concerning nuclear insurance, see Note 9 of Notes to
Financial Statements in Item 8. For information regarding NRC's regulation
relating to decommissioning of nuclear facilities and regarding DOE's
assessments pursuant to the Energy Policy Act for decontamination and
decommissioning of nuclear fuel enrichment facilities, see Note 1 of Notes to
Financial Statements in Item 8.
OTHER ENVIRONMENTAL REGULATION
Oglethorpe is subject to other environmental statutes including, but not
limited to, the Toxic Substances Control Act, the Resource Conservation &
Recovery Act, the Endangered Species Act, the Comprehensive Environmental
Response, Compensation and Liability Act, and the Emergency Planning and
Community Right to Know Act, and to the regulations implementing these statutes.
Oglethorpe does not believe that compliance with these statutes and regulations
will have a material impact on its operations. Changes to any of these laws
could affect many areas of Oglethorpe's operations. Furthermore, compliance with
new environmental legislation could have a significant impact on Oglethorpe.
Such impacts cannot be fully determined at this time, however, and would depend
in part on any such legislation and the development of implementing regulations.
The scientific community, regulatory agencies and the electric utility
industry are examining the issues of global warming and the possible health
effects of electric and magnetic fields. While no definitive scientific
conclusions have been reached regarding these issues, it is possible that new
laws or regulations pertaining to these matters could increase the capital and
operating costs of electric utilities, including Oglethorpe or entities from
which Oglethorpe purchases power.
ENERGY POLICY ACT
The Energy Policy Act creates a new class of utilities called Exempt
Wholesale Generators ("EWGs"), which are exempt from certain restrictions
otherwise imposed by the Public Utility Holding Company Act. The effect of this
exemption is to facilitate the development of independent third-party generators
potentially available to satisfy utilities' needs for increased power supplies.
(See "Future Power Resources--OTHER FUTURE RESOURCES" herein.) Unlike purchases
from qualifying facilities under PURPA (see "Other Power Purchases" herein),
however, utilities have no statutory obligation to purchase power from EWGs.
Furthermore, EWGs are precluded from making direct sales to retail electricity
customers.
The Energy Policy Act also broadens the authority of FERC to require a
utility to transmit power to or on behalf of other participants in the electric
utility industry, including EWGs and qualifying facilities, but FERC is
precluded from requiring a utility to transmit power from another entity
directly to a retail customer.
18
CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION AGREEMENTS
CO-OWNERS OF THE PLANTS
Plants Hatch, Vogtle, Wansley and Scherer Units No. 1 and No. 2 are
co-owned by Oglethorpe, GPC, MEAG and Dalton, and Rocky Mountain is co-owned by
Oglethorpe and GPC. Each such co-owner owns, and Oglethorpe owns or leases,
undivided interests in the amounts shown in the following table (which excludes
the Plant Wansley combustion turbine). GPC is the construction and operating
agent for each of these plants, except for Rocky Mountain for which Oglethorpe
is the construction and operating agent. (See "The Plant Agreements" herein.)
NUCLEAR COAL-FIRED PUMPED STORAGE
------------------------------ -------------------------------- --------------
PLANT PLANT PLANT SCHERER UNITS ROCKY
HATCH VOGTLE WANSLEY NO. 1 & NO. 2 MOUNTAIN(3) TOTAL
------------- ------------- ------------- --------------- --------------- -----
% MW(1) % MW(1) % MW(1) % MW(1) % MW(1) MW(1)
---- ----- ---- ----- ---- ----- ---- ----- ---- ----- -----
Oglethorpe . . . 30.0 489 30.0 696 30.0 519 60.0(2) 982 75(4) 636 3,322
GPC. . . . . . . 50.1 817 45.7 1,060 53.5 926 8.4 137 25(4) 212 3,152
MEAG . . . . . . 17.7 288 22.7 527 15.1 261 30.2 494 -- -- 1,570
Dalton . . . . . 2.2 36 1.6 37 1.4 24 1.4 23 -- -- 120
----- ----- ----- ----- ----- ----- ----- ----- --- --- -----
Total. . . . . . 100.0 1,630 100.0 2,320 100.0 1,730 100.0 1,636 100 848 8,164
----- ----- ----- ----- ----- ----- ----- ----- --- --- -----
----- ----- ----- ----- ----- ----- ----- ----- --- --- -----
<FN>
- -------------------------
(1) Based on nameplate ratings.
(2) Oglethorpe leases its interest in Scherer Unit No. 2 pursuant to long-term
net leases.
(3) Rocky Mountain is currently under construction and scheduled to be in
commercial operation in early 1995.
(4) Represents Oglethorpe's and GPC's estimated ownership interests upon
completion. (See "The Plant Agreements--ROCKY MOUNTAIN" herein.)
GEORGIA POWER COMPANY
GPC is a wholly owned subsidiary of The Southern Company, a registered
holding company under the Public Utility Holding Company Act, and is engaged
primarily in the generation and purchase of electric energy and the
transmission, distribution and sale of such energy within the State of Georgia
at retail in over 600 communities (including Athens, Atlanta, Augusta, Columbus,
Macon, Rome and Valdosta), as well as in rural areas, and at wholesale to
Oglethorpe, MEAG and three municipalities. GPC is the largest supplier of
electric energy in the State of Georgia. (See "OGLETHORPE POWER CORPORATION--
Relationship with GPC".)
GPC is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended, and, in accordance therewith, files reports and other
information with the Securities and Exchange Commission (the "Commission").
Copies of this material can be obtained at prescribed rates from the
Commission's Public Reference Section at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. Certain securities of GPC are listed on the New York
Stock Exchange, and reports and other information concerning GPC can be
inspected at the office of such Exchange.
MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA
MEAG, an instrumentality of the State of Georgia, was created for the
purpose of providing electric capacity and energy to those political
subdivisions of the State of Georgia that owned and operated electric
distribution systems at that time. MEAG has entered into power sales contracts
with each of 47 cities and one county in the State of Georgia. Such political
subdivisions, located in 39 of the State's 159 counties, collectively serve
approximately 268,000 electric customers.
19
CITY OF DALTON, GEORGIA
The City of Dalton, located in northwest Georgia, supplies electric
capacity and energy to consumers in Dalton, and presently serves more than
10,000 residential, commercial and industrial customers.
THE PLANT AGREEMENTS
HATCH, WANSLEY, VOGTLE AND SCHERER
Oglethorpe's rights and obligations with respect to Plants Hatch, Wansley,
Vogtle and Scherer are contained in a number of contracts between Oglethorpe and
GPC and, in some instances, MEAG and Dalton. Oglethorpe is a party to four
Purchase and Ownership Participation Agreements ("Ownership Agreements") under
which it acquired from GPC a 30% undivided interest in each of Plants Hatch,
Wansley and Vogtle, a 60% undivided interest in Scherer Units No. 1 and No. 2
and a 30% undivided interest in those facilities at Plant Scherer intended to be
used in common by Scherer Units No. 1, No. 2, No. 3 and No. 4 (the "Scherer
Common Facilities"). Oglethorpe has also entered into four Operating Agreements
("Operating Agreements") relating to the operation and maintenance of Plants
Hatch, Wansley and Vogtle and Scherer, respectively. The Operating Agreements
and Ownership Agreements relating to Plants Hatch and Wansley are two-party
agreements between Oglethorpe and GPC. The other Operating Agreements and
Ownership Agreements are agreements among Oglethorpe, GPC, MEAG and Dalton. The
parties to each Ownership Agreement and each Operating Agreement are referred to
as "Participants" with respect to each such agreement.
In 1985, in four separate transactions, Oglethorpe sold its entire 60%
undivided ownership interest in Scherer Unit No. 2 to four separate owner trusts
established by four different institutional investors. (See Note 4 of Notes to
Financial Statements in Item 8.) Oglethorpe retained all of its rights and
obligations as a Participant under the Ownership and Operating Agreements
relating to Scherer Unit No. 2 for the term of the leases. (In the following
discussion, references to Participants "owning" a specified percentage of
interests include Oglethorpe's rights as a deemed owner with respect to its
leased interests in Scherer Unit No. 2.)
The Ownership Agreements appoint GPC as agent with sole authority and
responsibility for, among other things, the planning, licensing, design,
construction, renewal, addition, modification and disposal of Plants Hatch,
Vogtle, Wansley and Scherer Units No. 1 and No. 2 and the Scherer Common
Facilities. Under the Ownership Agreements, Oglethorpe is obligated to pay a
percentage of capital costs of the respective plants, as incurred, equal to the
percentage interest which it owns or leases at each plant. GPC has
responsibility for budgeting capital expenditures subject to, in the case of
Scherer Units No. 1 and No. 2, certain limited rights of the Participants to
disapprove capital budgets proposed by GPC and to substitute alternative capital
budgets.
Each Operating Agreement gives GPC, as agent, sole authority and
responsibility for the management, control, maintenance, operation, scheduling
and dispatching of the plant to which it relates. However, as provided in the
recent amendments to the Plant Scherer Ownership and Operating Agreements,
Oglethorpe has elected to dispatch separately its ownership share of Scherer
Units No. 1 and No. 2. (See "THE POWER SUPPLY SYSTEM--Fuel Supply".) In 1990,
the co-owners of Plants Hatch and Vogtle entered into the NMBA which amended
the Plant Hatch and Plant Vogtle Ownership and Operating agreements, primarily
with respect to GPC's reporting requirements, but did not alter GPC's role as
agent with respect to the nuclear plants. In 1993, the co-owners entered into
the Amended and Restated NMBA which provides for a managing board (the "Nuclear
Managing Board") to coordinate the implementation and administration of the
Plant Hatch and Plant Vogtle Ownership and Operating Agreements and provides for
increased rights for the co-owners regarding certain decisions and allowed GPC
to contract with a third party for the operation of the nuclear units. In
connection with the recent amendments to the Plant Scherer Ownership and
Operating Agreements, the co-owners of Plant Scherer entered into the Plant
Scherer Managing Board Agreement which provides for a managing board (the "Plant
Scherer Managing Board") to coordinate the implementation and administration of
the Plant Scherer Ownership and Operating Agreements and provides for increased
rights for the co-owners regarding certain decisions, but does not alter GPC's
role as agent with respect to Plant Scherer.
20
The Operating Agreements provide that Oglethorpe is entitled to a
percentage of the net capacity and net energy output of each plant or unit equal
to its percentage undivided interest owned or leased in such plant or unit,
subject to its obligation to sell capacity and energy to GPC as described below.
Except as otherwise provided, each party is responsible for a percentage of
Operating Costs (as defined in the Operating Agreements) and fuel costs of each
plant or unit equal to the percentage of its undivided interest which is owned
or leased in such plant or unit. For Scherer Units No. 1 and No. 2, each party
will be responsible for variable Operating Costs in proportion to the net energy
output for its ownership interest, while responsibility for fixed Operating
Costs will continue to be equal to the percentage undivided ownership interest
which is owned or leased in such unit. GPC is required to furnish budgets for
Operating Costs, fuel plans and scheduled maintenance plans subject to, in the
case of Scherer Units No. 1 and No. 2, certain limited rights of the
Participants to disapprove such budgets proposed by GPC and to substitute
alternative budgets. (See "THE POWER SUPPLY SYSTEM--Proposed Changes to Nuclear
Plant Operating Arrangements".)
During the first seven years of Commercial Operation (as defined in the
Operating Agreement for Plant Vogtle) of Plant Vogtle, GPC is entitled to a
declining percentage of Oglethorpe's capacity and energy for all or a portion of
each contract year ending May 31. (See "THE POWER SUPPLY SYSTEM--Power Sales to
and Purchases from GPC--GPC SELL-BACK" and Note 1 of the Financial Statements
in Item 8.) Regardless of the amount of capacity available, GPC is obligated to
pay Oglethorpe monthly for the capacity of each unit to which it is entitled,
if any, an amount derived by a formula set forth in the Operating Agreement
based upon an average of GPC's annual fixed costs and Oglethorpe's annual fixed
costs with respect to each unit. In addition, GPC is responsible for the same
percentage of Oglethorpe's share of the Operating Costs and fuel-related costs
incurred.
The Ownership Agreements and Operating Agreements provide that, should a
Participant fail to make any payment when due, among other things, such
nonpaying Participant's rights to output of capacity and energy would be
suspended.
TERMS. The Operating Agreement for Plant Hatch will remain in effect with
respect to Hatch Units No. 1 and No. 2 until 2009 and 2012, respectively. The
Operating Agreement for Plant Vogtle will remain in effect with respect to each
unit at Plant Vogtle until 2018. The Operating Agreement for Plant Wansley will
remain in effect with respect to Wansley Units No. 1 and No. 2 until 2016 and
2018, respectively. The Operating Agreement for Scherer Units No. 1 and No. 2
will remain in effect with respect to Scherer Units No. 1 and No. 2 until 2022
and 2024, respectively. Upon termination of each Operating Agreement, GPC will
retain such powers as are necessary in connection with the disposition of the
property of the applicable plant, and the rights and obligations of the parties
shall continue with respect to actions and expenses taken or incurred in
connection with such disposition.
ROCKY MOUNTAIN
Oglethorpe's rights and obligations with respect to Rocky Mountain are
contained in several contracts between Oglethorpe and GPC, the co-owners of
Rocky Mountain. Pursuant to Rocky Mountain Pumped Storage Hydroelectric
Ownership Participation Agreement, by and between Oglethorpe and GPC (the
"Ownership Participation Agreement"), on December 15, 1988, Oglethorpe acquired
a 3% undivided interest in Rocky Mountain, together with a future interest in
the remaining 97% undivided interest. In connection with this acquisition,
Oglethorpe and GPC also entered into the Rocky Mountain Pumped Storage
Hydroelectric Project Operating Agreement (the "Rocky Mountain Operating
Agreement").
Under the Ownership Participation Agreement, Oglethorpe has responsibility
for financing and completing the construction of Rocky Mountain. As Oglethorpe
expends funds for construction, GPC's ownership interest decreases and
Oglethorpe's ownership interest increases. At all times, each party's undivided
interest in the project is equal to the proportion that its respective
investment bears to the total investment in the project (excluding each party's
cost of funds and ad valorem taxes). Except as described below in respect of the
exercise by GPC of its option to retain a minimum ownership interest, GPC is not
required to expend any funds for construction. GPC's prior investment is
determined in "as-spent" dollars, while Oglethorpe's investment is discounted to
constant 1987 dollars (computed using a semi-annual Handy-Whitman Index).
21
The Ownership Participation Agreement appoints Oglethorpe as agent with
sole authority and responsibility for, among other things, the planning,
licensing, design, construction, operation, maintenance and disposal of Rocky
Mountain. The Ownership Participation Agreement provides that Oglethorpe must
use its reasonable best efforts in accordance with Prudent Utility Practices (as
defined therein) to have Rocky Mountain in commercial operation by June 1, 1996.
The Rocky Mountain Operating Agreement gives Oglethorpe, as agent, sole
authority and responsibility for the management, control, maintenance and
operation of Rocky Mountain. In general, each co-owner is responsible for
payment of its respective ownership share of all Operating Costs and Pumping
Energy Costs (as defined in the Rocky Mountain Operating Agreement) as well as
costs incurred as the result of any separate schedule or independent dispatch. A
co-owner's share of net available capacity and net energy is the same as its
respective ownership interest under the Ownership Participation Agreement. GPC
will schedule and dispatch Rocky Mountain on a continuous economic dispatch
basis, on behalf of itself and Oglethorpe, and will notify Oglethorpe in advance
of estimated operating levels, until such time as Oglethorpe may elect to
schedule separately its ownership interest. The Rocky Mountain Operating
Agreement will terminate on the fortieth anniversary of the Completion
Adjustment Date (as defined therein).
AGREEMENTS RELATING TO THE INTEGRATED TRANSMISSION SYSTEM
Oglethorpe and GPC have entered into the ITSA to provide for the
transmission and distribution of electric energy in the State of Georgia, other
than in certain counties, and for bulk power transactions, through use of the
ITS. The ITS, together with transmission system facilities acquired or
constructed by MEAG and Dalton under agreements with GPC referred to below, was
established in order to obtain the benefits of a coordinated development of the
parties' transmission facilities and to make it unnecessary for any party to
construct duplicative facilities. The ITS consists of all transmission
facilities, including land, owned by the parties on the date the ITSA became
effective and those thereafter acquired, which are located in the State of
Georgia other than in the excluded counties and which are used or usable to
transmit power of a certain minimum voltage and to transform power of a certain
minimum voltage and a certain minimum capacity (the "Transmission Facilities").
GPC has entered into agreements with MEAG and Dalton that are substantially
similar to the ITSA, and GPC may enter into such agreements with other entities.
The ITSA will remain in effect through December 31, 2012 and, if not then
terminated by five years' prior written notice by either party, will continue
until so terminated.
The ITSA is administered by a Joint Committee established by a Joint
Committee Agreement, summarized below. Each year, the Joint Committee determines
a four-year plan of additions to the Transmission Facilities that will reflect
the current and anticipated future transmission requirements of the parties.
Oglethorpe and GPC are each required to maintain an original cost investment in
the Transmission Facilities in proportion to their respective Peak Loads (as
defined in the ITSA).
Oglethorpe and GPC are parties to a Transmission Facilities Operation and
Maintenance Contract (the "Transmission Operation Contract"), under which GPC
provides System Operator Services (as defined in the Transmission Operation
Contract) for Oglethorpe. In addition, GPC is required to provide such
supervision, operation and maintenance supplies, spare parts, equipment and
labor for the operation, maintenance and construction as may be specified by
Oglethorpe. GPC is also required to perform certain emergency work under the
Transmission Operation Contract. Oglethorpe is permitted, upon notice to GPC, to
perform, or contract with others for the performance of, certain services
performed by GPC. Absent termination or amendment of the Transmission Operation
Contract, however, GPC will continue to perform System Operator Services for
Oglethorpe. The term of the Transmission Operation Contract will continue from
year to year unless terminated by either party upon four years' notice.
Oglethorpe is required to pay its proportionate share of the cost for the
services provided by GPC.
THE JOINT COMMITTEE AGREEMENT
Oglethorpe, GPC, MEAG and Dalton are parties to a Joint Committee
Agreement. In the past, the Joint Committee coordinated the implementation and
administration of the various Ownership Agreements and Operating
22
Agreements, the various integrated transmission system agreements, and the
various integrated transmission system operation and maintenance agreements
among the parties. However, the Nuclear Managing Board has assumed such
responsibilities for Plants Hatch and Vogtle, the Plant Scherer Managing Board
has assumed such responsibilities for Plant Scherer and, if agreed by the
co-owners, an operating committee would also assume such responsibilities for
Plant Wansley. (See "The Plant Agreements--HATCH, WANSLEY, VOGTLE AND SCHERER"
herein.) The Joint Committee Agreement also makes allowance for the joint
planning of future transmission and generation facilities.
23
ITEM 2. PROPERTIES
Information with respect to Oglethorpe's properties is set forth under the
caption "THE POWER SUPPLY SYSTEM" included in Item 1 and is incorporated herein
by reference.
ITEM 3. LEGAL PROCEEDINGS
Oglethorpe is a party to various actions and proceedings incident to its
normal business. Liability in the event of final adverse determinations in any
of these matters is either covered by insurance or, in the opinion of
Oglethorpe's management, after consultation with counsel, should not in the
aggregate have a material adverse effect on the financial position or results of
operations of Oglethorpe.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
24
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Not Applicable.
ITEM 6. SELECTED FINANCIAL DATA
- -----------------------------------------------------------------------------
(dollars in thousands)
1993 1992 1991 1990 1989
- ---------------------------------------------------------------------------------------------------------------------------------
- -
OPERATING REVENUES:
Sales to Members . . . . . . . . . . . . . . . . $ 899,720 $ 816,000 $ 763,657 $ 710,607 $ 631,966
Sales to non-Members . . . . . . . . . . . . . . 200,940 268,763 300,293 390,535 367,183
----------- ----------- ----------- ----------- -----------
Total operating revenues . . . . . . . . . . . . 1,100,660 1,084,763 1,063,950 1,101,142 999,149
----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . 176,342 167,288 165,168 209,971 180,698
Production . . . . . . . . . . . . . . . . . . . 129,972 115,915 130,041 125,506 97,266
Purchased power. . . . . . . . . . . . . . . . . 271,970 230,510 229,898 213,311 202,778
Depreciation and amortization. . . . . . . . . . 128,060 126,047 135,152 134,021 123,614
Taxes. . . . . . . . . . . . . . . . . . . . . . 25,148 19,634 42,422 41,798 31,541
Other operating expenses . . . . . . . . . . . . 44,876 50,578 49,373 41,755 33,301
----------- ----------- ----------- ----------- -----------
Total operating expenses . . . . . . . . . . . . 776,368 709,972 752,054 766,362 669,198
----------- ----------- ----------- ----------- -----------
OPERATING MARGIN. . . . . . . . . . . . . . . . . 324,292 374,791 311,896 334,780 329,951
OTHER INCOME, NET . . . . . . . . . . . . . . . . 38,741 45,928 113,441 94,471 70,297
NET INTEREST CHARGES. . . . . . . . . . . . . . . (350,652) (393,247) (396,892) (400,712) (379,820)
----------- ----------- ----------- ----------- -----------
MARGIN BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
PRINCIPLE. . . . . . . . . . . . . . . . . . . . 12,381 27,472 28,445 28,539 20,428
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES. . . . . . . . . . . 13,340 - - - -
----------- ----------- ----------- ----------- -----------
NET MARGIN. . . . . . . . . . . . . . . . . . . . $ 25,721 $ 27,472 $ 28,445 $ 28,539 $ 20,428
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
ELECTRIC PLANT, NET:
In service . . . . . . . . . . . . . . . . . . . $ 4,054,956 $ 4,122,411 $ 4,196,966 $ 4,268,440 $ 4,275,770
Construction work in progress. . . . . . . . . . 450,965 322,628 178,980 102,045 103,729
----------- ----------- ----------- ----------- -----------
$ 4,505,921 $ 4,445,039 $ 4,375,946 $ 4,370,485 $ 4,379,499
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . $ 5,323,890 $ 5,359,597 $ 5,246,435 $ 5,200,762 $ 5,288,673
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
CAPITALIZATION:
Long-term debt . . . . . . . . . . . . . . . . . $ 4,058,251 $ 4,095,796 $ 4,093,218 $ 4,094,246 $ 4,112,892
Obligation under capital leases. . . . . . . . . 303,458 302,061 300,833 299,783 298,929
Patronage capital and membership fees. . . . . . 289,982 264,261 236,789 217,895 194,233
----------- ----------- ----------- ----------- -----------
$ 4,651,691 $ 4,662,118 $ 4,630,840 $ 4,611,924 $ 4,606,054
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
PROPERTY ADDITIONS. . . . . . . . . . . . . . . . $ 235,285 $ 232,283 $ 225,021 $ 200,257 $ 226,709
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
ENERGY SUPPLY (MEGAWATT-HOURS):
Generated. . . . . . . . . . . . . . . . . . . . 14,575,920 13,805,683 12,686,323 13,387,572 12,079,706
Purchased. . . . . . . . . . . . . . . . . . . . 7,620,815 6,233,262 6,915,758 6,198,434 5,664,919
----------- ----------- ----------- ----------- -----------
Available for sale . . . . . . . . . . . . . . . 22,196,735 20,038,945 19,602,081 19,586,006 17,744,625
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
MEMBER REVENUE PER kWh SOLD . . . . . . . . . . . 5.47 cents 5.55 cents 5.36 cents 5.01 cents 4.84 cents
<FN>
CERTAIN PRIOR YEAR AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM WITH CURRENT YEAR
PRESENTATION.
25
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
MARGINS AND PATRONAGE CAPITAL
Oglethorpe operates on a not-for-profit basis and, accordingly, seeks only
to generate revenues sufficient to recover its cost of service and to generate
margins sufficient to establish reasonable reserves and meet certain financial
coverage requirements. Revenues in excess of current period costs in any year
are designated in Oglethorpe's statements of revenues and expenses and patronage
capital as net margin. Retained net margins are designated on Oglethorpe's
balance sheets as patronage capital, which is allocated to each of its 39 retail
electric distribution cooperatives (Members) on the basis of its electricity
purchases from Oglethorpe. Since its formation in 1974, Oglethorpe has
generated a positive net margin in each year and, as of December 31, 1993, had a
balance of $290 million in patronage capital.
Patronage capital constitutes the principal equity of Oglethorpe. As a
means of accumulating additional equity, Oglethorpe's Board of Directors amended
in 1992 the patronage capital retirement policy for returning margins to the
Members to extend the retirement schedule from 13 years to 30 years after the
year in which the margins were generated. Pursuant to such policy, no patronage
capital would be retired until 2010, at which time the 1979 patronage capital
would be returned. Any distributions of patronage capital are subject to the
discretion of the Board of Directors and approval by the Rural Electrification
Administration (REA).
Oglethorpe's equity ratio (patronage capital and membership fees divided by
total capitalization) increased from 5.7% at December 31, 1992 to 6.2% at
December 31, 1993.
RATES AND FINANCIAL COVERAGE REQUIREMENTS
Oglethorpe's policy is to design its rates to generate sufficient revenues
to recover its Member cost of service and produce net margins at such levels as
Oglethorpe's Board of Directors determines to be consistent with sound financial
practice. Rate revisions by Oglethorpe are subject to the approval of the REA
and, to date, the REA has not reduced or delayed the effectiveness of any rate
increase proposed by Oglethorpe. Oglethorpe has entered into a wholesale power
contract with each of its Members that requires rates to be designed to recover
all costs as described in such contracts. Oglethorpe's rates include an energy
charge that is set annually and adjusted at mid-year to recover actual fuel and
variable operations and maintenance costs. Oglethorpe reviews its rates at
least annually to ensure that its fixed costs are being adequately recovered
and, if necessary, adjusts its rates to meet its net margin goals.
Oglethorpe utilizes a Times Interest Earned Ratio (TIER) as the basis for
establishing its annual net margin goal. TIER is determined by dividing the sum
of Oglethorpe's net margin plus interest on long-term debt (including interest
charged to construction) by Oglethorpe's interest on long-term debt (including
interest charged to construction). The REA Mortgage requires Oglethorpe to
implement rates that are designed to maintain an annual TIER of not less than
1.05. In addition to the TIER requirement under the REA Mortgage, Oglethorpe is
also required under the REA Mortgage to implement rates designed to maintain a
Debt Service Coverage Ratio (DSC) of not less than 1.0 and an Annual Debt
Service Coverage Ratio (ADSCR) of not less than 1.25. DSC is determined by
dividing the sum of Oglethorpe's net margin plus interest on long-term debt
(including interest charged to construction) plus depreciation and amortization
(excluding amortization of nuclear fuel and debt discount and expense) by
Oglethorpe's interest and principal payable on long-term debt (including
interest charged to construction). ADSCR is determined by dividing the sum of
Oglethorpe's net margin plus interest on long-term debt (excluding interest
charged to construction) plus depreciation and amortization (excluding
amortization of nuclear fuel and debt discount and expense) by Oglethorpe's
interest and principal payable on long-term debt secured under the REA Mortgage
(excluding interest charged to construction). Oglethorpe has always met or
exceeded the TIER, DSC and ADSCR requirements of the REA Mortgage.
TIER, DSC and ADSCR for the years 1991 through 1993 were as follows:
- -----------------------------------------------------------------------------
1993 1992 1991
- -----------------------------------------------------------------------------
TIER 1.07 1.07 1.07
DSC 1.23 1.22 1.28
ADSCR 1.26 1.25 1.31
- -----------------------------------------------------------------------------
In 1992, as part of a plan to build additional equity, Oglethorpe's Board
of Directors revised its annual net margin goal to be the amount required to
produce a TIER of 1.07 in each year through 1995, 1.08 in 1996, 1.09 in 1997 and
1.10 in 1998 and thereafter. Historically, by setting rates to meet the TIER
goals established by Oglethorpe's Board, the DSC and ADSCR requirements of the
REA Mortgage have always been met or exceeded. Based on Oglethorpe's current
financial projections, however, rates based on these levels of TIER may not be
sufficient to meet the ADSCR requirement of the REA Mortgage. In that event,
rates sufficient to meet the ADSCR requirements would have to be established.
HISTORICAL FACTORS AFFECTING FINANCIAL PERFORMANCE
Over the past several years, the most significant factor affecting
Oglethorpe's financial performance has been the mechanisms Oglethorpe has
utilized to moderate the financial impact of new generating plants. During this
period, Oglethorpe's Members absorbed much of the cost of its ownership
interests in Plant Vogtle and Scherer Units No. 1 and No. 2.
26
The mechanisms used by Oglethorpe to mitigate the rate impact of absorbing
these costs have included both long-term contractual arrangements with Georgia
Power Company (GPC) and Board of Directors policies that have resulted in the
gradual absorption of costs over several years.
Contractual arrangements with GPC provide that Oglethorpe sell to GPC and
GPC purchase from Oglethorpe a declining percentage of Oglethorpe's entitlement
to the capacity and energy of certain co-owned generating plants during the
initial years of operation of such units (GPC Sell-back). The GPC Sell-back will
expire for Plant Vogtle Unit No. 1 as of May 31, 1994, and for Plant Vogtle
Unit No. 2 as of May 31, 1995. The GPC Sell-back for Scherer Unit No. 1 expired
in May 1991 and for Scherer Unit No. 2, in May 1993. (See Note 1 of Notes to
Financial Statements.) The historical ability of Oglethorpe to sell power from
new units to GPC under the GPC Sell-back has enabled Oglethorpe to moderate the
effects of the higher costs associated with new generating units on Oglethorpe's
cost of service and therefore on the rates charged Members. Furthermore, the
GPC Sell-back has enabled Oglethorpe to obtain the generating capacity needed to
serve anticipated increases in Member loads while minimizing the risks and costs
of excess generating capacity.
Prior to the completion of the first unit of Plant Vogtle in 1987,
Oglethorpe's Board of Directors implemented policies that have resulted in the
gradual absorption of the costs of Plant Vogtle by the Members. In each of the
years 1985 through 1993, Oglethorpe exceeded its net margin goal. The Board
adopted resolutions in each of these years requiring that these excess margins
be deferred and used to mitigate rate increases associated with Plant Vogtle. In
each year beginning with 1989, a portion of these margins has been returned to
the Members through billing credits. (See Note 1 of Notes to Financial
Statements.)
Furthermore, during 1986 and 1987, Oglethorpe's rates to its Members
included a one mill per kilowatt-hour (kWh) charge (Vogtle Surcharge). The
Vogtle Surcharge represented a pre-collection of charges prior to commercial
operation of Plant Vogtle the effect of which was to mitigate future rate
increases. In addition, two of the Members elected to increase the level of this
charge for their systems during this period.
As of December 31, 1993, Oglethorpe held a balance of approximately $48
million from deferred margins and the voluntary Vogtle Surcharges to two Members
which will be utilized for future rate mitigation. Oglethorpe's Board of
Directors and the two Members intend to utilize these amounts as offsets to
rates charged during 1994 and 1995. By the end of 1995, all costs associated
with Plant Vogtle will be included in Member rates.
RESULTS OF OPERATIONS
OPERATING REVENUES
Oglethorpe's operating revenues are derived from sales of electric services
to the Members and non-Members. Revenues from Members are collected pursuant to
the wholesale power contracts and are a function of the demand for power by the
Members' consumers and Oglethorpe's cost of service. Historically, most of
Oglethorpe's non-Member revenues have resulted from various plant operating
agreements with GPC as discussed below. For the period 1991 through 1993,
although total revenues have remained virtually unchanged, the scheduled
reduction of the GPC Sell-back has resulted in the planned decrease of non-
Member revenues from GPC of almost $130 million. As expected, the capacity and
energy no longer being sold to GPC have been used by Oglethorpe to meet
increased Member requirements. In addition to increasing sales to Members,
Oglethorpe has increased revenues from energy sales and transmission sales to
other utilities in order to mitigate the need to recover from the Members costs
which were previously recovered through sales to GPC.
SALES TO MEMBERS. Revenues from sales to Members increased 10.3% in 1993
compared to 1992, and increased 6.9% in 1992 compared to 1991. These increases
reflect two factors: first, higher capacity rates, offset by the pass-through of
savings in energy costs (see discussion of savings in fuel costs under
"OPERATING EXPENSES" herein); and second, increased amounts of energy sold.
Concerning the first factor, as non-Member revenues from GPC have declined,
Oglethorpe has increased rates to Members to recover the fixed costs which had
previously been recovered from GPC through the GPC Sell-back. Since December 28,
1990, Oglethorpe has placed into effect four rate changes, as set forth below:
- -----------------------------------------------------------------------------
EFFECTIVE DATE RATE CHANGE (1)
- -----------------------------------------------------------------------------
January 1, 1994 -4.5%
January 1, 1993 1.7%
December 27, 1991 8.8%
December 28, 1990 4.8%
<FN>
(1) After credit for deferred margins. (See Note 1 of Notes to Financial
Statements.)
- -----------------------------------------------------------------------------
Oglethorpe was able to implement a rate reduction for 1994 because the
anticipated additional revenues to be derived based on the increase in the
Members' 1993 peak demand more than offset the reduction in revenues from the
GPC Sell-back.
Oglethorpe's wholesale rate to the Members sets forth the manner in which
energy costs are to be recovered. Oglethorpe's rate provides that actual energy
costs be passed through to the Members such that energy revenues equal energy
costs.
The following table summarizes the amounts of kilowatt-hours sold to
Members during each of the past three years:
- -----------------------------------------------------------------------------
KILOWATT-HOURS
(in thousands)
- -----------------------------------------------------------------------------
1993 16,253,283
1992 14,466,943
1991 14,022,213
- -----------------------------------------------------------------------------
27
The net impact of the above capacity and energy rate factors, combined with
the spreading of fixed capacity costs over an increasing number of kWh sold each
year, have resulted in the following average Member revenues:
- -----------------------------------------------------------------------------
CENTS/KILOWATT-HOUR
- -----------------------------------------------------------------------------
1993 5.47 cents
1992 5.55
1991 5.36
- -----------------------------------------------------------------------------
Oglethorpe is reducing the need to recover from Members the additional
costs resulting from reductions to the GPC Sell-back by increasing revenues from
off-system sales and reducing fixed and operating costs.
In addition to the impact of reductions in GPC Sell-back revenues, future
Member rates will also be affected by such factors as fixed costs relating to
the Rocky Mountain Project, a pumped storage hydroelectric facility (Rocky
Mountain), the cost of adding to Oglethorpe's existing transmission system,
changes in fuel costs, environmental and other governmental regulations
applicable to Oglethorpe and its suppliers and the completion in 1995 of the
amortization of deferred margins. Oglethorpe's future rates will also be
affected by its ability to forecast accurately its future power resource needs
and by its ability to obtain and manage its power resources, including its
purchases and construction of generating capacity and its procurement of coal.
SALES TO NON-MEMBERS. Sales of electric services to non-Members are
primarily made pursuant to three different types of contractual arrangements
with GPC and from off-system sales to other non-Member utilities. The following
table summarizes the amounts of non-Member revenues from these sources for the
past three years:
- -------------------------------------------------------------------------------
1993 1992 1991
(DOLLARS IN THOUSANDS)
- -------------------------------------------------------------------------------
Plant operating agreements $106,146 $171,686 $235,851
Power supply arrangements 44,904 61,602 45,662
Transmission agreements 13,549 29,586 17,203
Other utilities 36,341 5,889 1,577
------- ------- -------
Total $200,940 $268,763 $300,293
------- ------- -------
------- ------- -------
- -------------------------------------------------------------------------------
Revenues from sales to non-Members declined in 1993 compared to 1992, and
in 1992 compared to 1991. These decreases were primarily attributable to
scheduled reductions in plant operating agreement revenues attributable to the
GPC Sell-back with respect to Plants Vogtle and Scherer.
The second source of non-Member revenues is power supply arrangements with
GPC. These revenues are derived, for the most part, from energy sales arising
from dispatch situations whereby GPC causes co-owned coal-fired generating
resources to be operated when Oglethorpe's system does not require all or part
of its contractual entitlement to the generation. These revenues essentially
represent reimbursement of costs to Oglethorpe because, under the operating
agreements, Oglethorpe is responsible for its share of fuel costs any time a
unit operates. The greater amount of such revenues in 1992 compared to 1993 and
1991 was largely attributable to GPC's operational decisions causing a higher
level of generation at Plant Scherer in 1992.
The third source of non-Member revenues is payments from GPC for use of the
Integrated Transmission System (ITS) and related transmission interfaces. GPC
compensates Oglethorpe to the extent that Oglethorpe's percentage of investment
in the ITS exceeds its percentage use of the system. In such case, Oglethorpe is
entitled to income as compensation for the use of its investment by the other
ITS participants. In addition, beginning in 1991, GPC purchased the right to use
the majority of Oglethorpe's share of the interface capability between the ITS
and the Florida electric system through May 1994.
The higher amount of transmission agreement revenues in 1992 compared to
1993 and 1991 was partially attributable to the receipt by Oglethorpe in 1992 of
a payment of $10.5 million from GPC as a result of adjustments of transmission
income for the years 1990 through 1992.
Other revenues from non-Members increased significantly in 1993 compared to
1992 and 1991. This increase reflects greater revenues from off-system energy
sales. Oglethorpe is continuing to seek to make off-system sales to non-Members.
OPERATING EXPENSES
Oglethorpe's operating expenses increased 9.4% in 1993 compared to 1992 and
decreased 5.6% in 1992 compared to 1991. The increase in operating expenses in
1993 compared to 1992 was primarily attributable to higher production expenses,
purchased power expenses and taxes other than income taxes. The decrease in
operating expenses in 1992 compared to 1991 was primarily due to declines in
production expenses, depreciation and amortization, taxes other than income
taxes and income taxes.
Generally, over the years 1991 through 1993, the Members have received the
benefit of declining average fuel costs of Oglethorpe's generating resources
through the pass-through of lower energy costs. The average fuel costs of
Oglethorpe's nuclear and fossil generating resources for the last three years
are as follows:
- -------------------------------------------------------------------------------
CENTS/KILOWATT-HOUR
-------------------
NUCLEAR FOSSIL
- -------------------------------------------------------------------------------
1991 .80 cents 2.08 cents
1992 .66 2.04
1993 .61 1.96
- -------------------------------------------------------------------------------
Much of the reduction in average fuel costs was attributable to
Oglethorpe's nuclear units. Fuel savings were particularly significant at Plant
Vogtle where average fuel costs declined by 29% in 1993 compared to 1991. The
decline was primarily due to the lower cost of replacement fuel relative to the
cost of the initial core loading of fuel. These initial fuel supplies were
purchased well in advance of commercial operation of these units
28
and carried a significantly higher amount of capitalized interest than
subsequent fuel reloads. Additionally, as a result of purchases of nuclear fuel
in the spot market, Oglethorpe's costs for nuclear fuel in the last three years
have been favorably impacted.
The lower amount of production expenses in 1992 compared to 1993 and 1991
was attributable to a reduced number of nuclear refueling outages in 1992. Two
of Oglethorpe's nuclear units underwent planned outages in 1992, as compared to
three units in both 1993 and 1991.
The increase in 1993 in purchased power expenses was the result of a 22%
increase in kWh purchases. This increase was, for the most part, necessitated by
the greater energy needs of the Members (see "OPERATING REVENUES - SALES TO
MEMBERS" herein) and by Oglethorpe's increased off-system energy sales (see
"OPERATING REVENUES - SALES TO NON-MEMBERS" herein).
The decline in power delivery expenses from 1991 through 1993 was due to
the lengthening of maintenance cycles, particularly on substation equipment, and
to delays in 1993 by GPC, Oglethorpe's primary transmission maintenance
contractor, in performing authorized work. Additionally, in 1991 Oglethorpe
incurred a transmission charge of $3.8 million resulting from a greater
percentage use of the ITS compared to its projected percentage of investment.
(This amount was subsequently returned to Oglethorpe in 1992. See discussion of
transmission income adjustment in 1992 under "OPERATING REVENUES - SALES TO NON-
MEMBERS" herein.)
The increase in sales, administrative and general expense in 1992 compared
to 1991 was primarily attributable to increases in property insurance for
co-owned plants, expanded marketing programs, and the expenses associated with
one-time payments made to separated employees and to the utilization of
consultants in a workforce reduction undertaken in 1992.
Decreases in depreciation and amortization, income taxes and taxes other
than income taxes also contributed to the decrease in total operating expenses
in 1992 compared to 1991. These lower expense categories also directly
contributed to the substantial amount of margins earned in excess of the 1992
TIER-based goal. (See the discussion below under "OTHER INCOME" concerning the
disposition of this excess.)
As a result of depreciation studies undertaken by GPC as operating agent in
the fall of 1991, Oglethorpe implemented lower depreciation rates for all
co-owned generating units. The lower rates are primarily due to a plant life
extension program undertaken by GPC for the co-owned units.
Property taxes, which constitute the majority of taxes other than income
taxes, decreased in 1992 as a result of the favorable resolution of Oglethorpe's
property tax appeal with the State of Georgia for the years 1985 through 1988.
The negotiated settlement of this appeal resulted in a reduction of 1992
property tax expense in the amount of approximately $7.5 million.
Income taxes were substantially lower in 1992 compared to 1991 due to
several factors, including lower interest income, less gain in 1992 than in 1991
from the sale of debt service reserve fund securities (see "OTHER INCOME" below)
and increased energy sales to GPC and other utilities. These sales to GPC were
$16 million higher in 1992, and sales to other utilities were $3 million higher.
(See "OPERATING REVENUES - SALES TO NON-MEMBERS" herein.) Oglethorpe deducts
both fixed and variable costs from the revenues from these energy sales which
generated tax losses resulting in lower taxable income from non-Member sales.
OTHER INCOME
Interest income decreased in 1993 and in 1992, as a result of lower average
interest rates on investments. In 1992 and 1991, Oglethorpe realized the capital
appreciation on securities invested for its debt service reserve funds by
selling investments bearing coupon yields which were higher than prevailing
market rates. The securities sold in 1991 had been held for a number of years
and their average rates were substantially higher than market rates at the time
of the sale. The 1992 gain captured only the capital appreciation resulting
from declining interest rates during the 12 months following the 1991 sale.
In 1993, 1992 and 1991, Oglethorpe's Board of Directors authorized the
retention of approximately $5 million, $40 million and $12 million,
respectively, in excess of the 1.07 TIER margin requirement as deferred margins.
The remaining amounts will be available in 1994 and 1995 to mitigate rate
increases. Amortization of deferred margins for 1993 was set by Oglethorpe's
Board of Directors at $4 million, significantly less than the amounts utilized
in 1992 and 1991. (See Note 1 of Notes to Financial Statements for a discussion
of deferred margins and amortization of deferred margins.)
INTEREST CHARGES
Net interest charges declined in 1993 compared to 1992, and in 1992
compared to 1991. The decrease in interest on long-term debt and capital leases
in 1993 was due, for the most part, to the refinancing efforts discussed under
"LIQUITY AND CAPITAL RESOURCES" herein. Allowance for debt and equity funds
used during construction (AFUDC) increased in 1993 and in 1992 as a result of
increased construction activity at Rocky Mountain. The decrease in other
interest expense in 1993 was primarily due to higher interest expense in 1992
associated with the settlement of the property tax appeal and the federal income
tax case. Additionally, Oglethorpe paid a premium in 1992 in connection with
its repricing of Federal Financing Bank (FFB) advances at reduced rates. In
order to modify the FFB advances, Oglethorpe paid a premium equal to
approximately one year's interest on these repriced advances.
LIQUIDITY AND CAPITAL RESOURCES
In the past, Oglethorpe, like most other G&Ts, has obtained the majority of
its long-term financing from REA-guaranteed loans funded by the FFB. Oglethorpe
has
29
also obtained a substantial portion of its long-term financing requirements from
tax-exempt pollution control bonds (PCBs).
In addition, Oglethorpe's operations have consistently provided a sizable
contribution to the financing of construction programs, such that internally
generated funds have provided interim funding or long-term capital for nuclear
fuel reloads, new generation, transmission and general plant facilities, and
replacements and additions to existing facilities.
Oglethorpe's investment in electric plant, net of depreciation, was
approximately $4.5 billion as of December 31, 1993. Expenditures for property
additions during 1993 amounted to approximately $235 million, of which $198
million was provided from operations. These expenditures were primarily for the
construction of Rocky Mountain and replacements and additions to generation and
transmission facilities.
As part of its ongoing capital planning, Oglethorpe forecasts expenditures
required for generation and transmission facilities and related capital
projects. Actual construction costs may vary from the estimates below because
of factors such as changes in business conditions, fluctuating rates of load
growth, environmental requirements, design changes and rework required by
regulatory bodies, delays in obtaining necessary Federal and other regulatory
approvals, construction delays, and cost of capital, equipment, material and
labor. The table below indicates Oglethorpe's estimated capital expenditures
through 1996, including AFUDC:
- -------------------------------------------------------------------------------
CAPITAL EXPENDITURES
(DOLLARS IN THOUSANDS)
Year Generation(1) Transmission Rocky Mtn.(2) General Total
- -------------------------------------------------------------------------------
1994 $ 84,982 $ 60,966 $118,055 $20,384(3) $284,387
1995 85,389 52,319 61,493 5,015 204,216
1996 90,231 53,285 882 3,239 147,637
-------- -------- -------- ------- --------
Total $260,602 $166,570 $180,430 $28,638 $636,240
-------- -------- -------- ------- --------
-------- -------- -------- ------- --------
<FN>
(1) CONSISTS OF CAPITAL EXPENDITURES REQUIRED FOR REPLACEMENTS AND ADDITIONS
TO FACILITIES IN SERVICE, COMPLIANCE WITH ENVIRONMENTAL REGULATIONS, NUCLEAR
FUEL RELOADS AND THE PURCHASE OF RAILCARS.
(2) INCLUDES RELATED TRANSMISSION FACILITIES AND ADDITIONS, RENEWALS AND
REPLACEMENTS TO ROCKY MOUNTAIN AFTER ITS IN-SERVICE DATE.
(3) CONSISTS PRIMARILY OF DEVELOPMENT COSTS RELATED TO AN ENERGY CONTROL
SYSTEM.
- -------------------------------------------------------------------------------
Based on its current construction budget, Oglethorpe anticipates that it
will fund all capital expenditures through 1996, other than for Rocky Mountain,
from operations.
In 1988, Oglethorpe acquired from GPC an undivided ownership interest in
Rocky Mountain and assumed responsibility for its construction and operation.
As of December 31, 1993, Rocky Mountain was approximately 90% complete and
Oglethorpe's investment in the project was $414 million. Oglethorpe is
financing its share of Rocky Mountain from the proceeds of an REA-guaranteed
loan funded through the FFB. As of December 31, 1993, $248 million had been
advanced under this loan and $459 million remained available to be drawn as
permanent financing for Rocky Mountain. Oglethorpe intends to finance all
direct expenditures and capitalized interest associated with the construction of
Rocky Mountain through such FFB loan, and management believes the amounts
remaining to be drawn under such loan are more than adequate to complete the
project. The obligation to advance funds under this loan, however, is subject
to certain conditions, including the requirement that Oglethorpe maintain an
annual TIER of at least 1.0 and that the REA shall not have determined that
there has occurred any material adverse change in the assets, liabilities,
operations or financial condition of Oglethorpe or any circumstances involving
the nature or operation of the business of Oglethorpe. In management's opinion,
no such material adverse change has occurred. The current schedule anticipates
commercial operation in early 1995.
Oglethorpe has a commercial paper program under which it may issue
commercial paper not to exceed $355 million outstanding at any one time. The
commercial paper may be used as a source of short-term funds and is not
designated for any specific purpose. Oglethorpe's commercial paper is backed
100% by a committed line of credit provided by a group of banks for which Trust
Company Bank acts as agent. Historically, Oglethorpe has not relied on
commercial paper for short-term funding due to the availability of internally
generated funds and has never utilized the backup line of credit. Oglethorpe
has also arranged one committed and two uncommitted lines of credit to provide
additional sources of short-term financing. As of December 31, 1993,
Oglethorpe's short-term credit facilities were as follows:
- --------------------------------------------------------------------------------
SHORT-TERM CREDIT FACILITIES AUTHORIZED
AMOUNT
- --------------------------------------------------------------------------------
Commercial Paper . . . . . . . . . . . . . . . . . . . . . $355,000,000
National Bank for Cooperatives (CoBank). . . . . . . . . . 70,000,000
National Rural Utilities Cooperative
Finance Corporation (CFC). . . . . . . . . . . . . . . . 50,000,000
Trust Company Bank (Committed) . . . . . . . . . . . . . . 30,000,000
- --------------------------------------------------------------------------------
The maximum amount that can be outstanding at any one time under the
commercial paper program and the lines of credit totals $425 million due to
certain restrictions contained in the CFC and Trust Company Bank line of credit
agreements. As of December 31, 1993, no commercial paper was outstanding and
there was no outstanding balance on any line of credit.
As part of a March 1993 PCB refinancing transaction involving two forward
interest rate swap agreements, Oglethorpe is obligated to maintain minimum
liquidity in an amount equal to 25% of the principal amount of the variable rate
refunding bonds issued or to be issued in connection therewith. This minimum
liquidity requirement currently equals $81 million and will decrease
proportionately as such variable rate refunding bonds are retired. The minimum
liquidity must consist of (a) any combination of (i) amounts available under
committed lines of credit and commercial paper programs to pay termination
payments, if any, due upon early termination of the forward interest rate swap
transactions, (ii) cash, (iii) United States government securities, and (iv)
accounts receivable due within 30 days, less (b) monetary
30
obligations due within 30 days. As of December 31, 1993, Oglethorpe had
approximately $467 million of such liquidity available to meet this requirement.
Oglethorpe's scheduled maturities of long-term debt over the next five
years total $425 million. Of this amount, $299 million, or seventy percent,
relates to the repayment of REA and FFB debt.
REFINANCING TRANSACTIONS
Over the past few years, Oglethorpe has implemented a program to reduce its
interest costs by refinancing or prepaying a sizable portion of its high-
interest PCB and FFB debt. Several transactions were completed in 1993 and early
1994, covering approximately $1.3 billion in existing PCB and FFB debt (See Note
5 of Notes to Financial Statements.) The net result of the 1993 transactions was
to reduce the average interest rate on total long-term debt from 8.18% at
December 31, 1992 to 7.94% at December 31, 1993. The average interest rate was
further reduced to 7.13% as a result of the transactions completed in early
1994.
In March 1993, Oglethorpe entered into two forward interest rate swap
agreements totaling $322 million to refinance $364 million of existing high-
interest PCBs. Through this forward swap transaction, Oglethorpe arranged
synthetic fixed rate financing at an average effective rate of 6.15% for $200
million of variable rate refunding bonds which were issued on November 30, 1993
and $122 million of variable rate refunding bonds to be issued in the fall of
1994. Interest savings totaling $9.1 million and an additional $4.3 million will
occur during the first full year following each respective issuance.
In February 1994, Oglethorpe refunded $205 million of PCBs through an
issuance of $195 million of fixed rate refunding bonds. With an effective
interest rate of 4.8%, this transaction will generate net interest savings of
about $10.5 million during the first full year. Oglethorpe expects to achieve
additional interest savings through a $35 million current refunding of PCBs in
the fall of 1994.
In addition to these refinancings, Oglethorpe has also recently taken
certain actions to reduce the interest expense on its FFB debt. In January 1993,
Oglethorpe prepaid six FFB advances totaling $75 million with interest rates
exceeding 10%. These advances, which had become at least 12 years old, were
prepaid with one year's interest premium. The net annual average savings in the
first full year are $6.9 million.
During 1993, Oglethorpe pursued refinancing all of its approximately $3
billion in outstanding REA and FFB debt (the REA Indebtedness) through the
issuance of bonds in the public market which would have resulted in Oglethorpe
exiting the REA program (the REA Refinancing). In January 1994, FFB advised
Oglethorpe that the Department of the Treasury would not take certain actions
requested to facilitate the REA Refinancing. Oglethorpe continues to believe
that an REA Refinancing is in its long-term best interest and will continue to
evaluate options to exit the REA program. If the REA Refinancing were to be
consummated, it would require, among other things, a substitution of the REA
Mortgage with a trust indenture which would secure all of Oglethorpe's first
lien indebtedness, regulation of Oglethorpe's rates by the Federal Energy
Regulatory Commission, and certain amendments to the wholesale power contracts
between Oglethorpe and each of its Members. Oglethorpe's management is unable to
give any assurance at this time that Oglethorpe will be able to effect the REA
Refinancing, or, if so, on what terms and conditions.
Although Oglethorpe continues to pursue the REA Refinancing, it has taken
advantage of an option currently available to reduce the interest expense on its
FFB debt. At the beginning of 1994, Oglethorpe had over $1 billion of advances
that had been outstanding for more than 12 years under notes to the FFB that
were eligible to be modified to reduce their interest rates. In two separate
transactions in early 1994, Oglethorpe modified certain FFB notes and thereby
reduced the interest rates on approximately $795 million of advances. In
connection with such note modification, a premium was paid in an amount equal to
one year's interest on the advances of approximately $64 million, which will be
expensed over the longest remaining life of the subject advances, which is 22
years. These transactions will generate net interest savings of $18.5 million in
the first full year. Oglethorpe may elect to reduce the interest rates on
approximately $250 million of additional FFB advances through this note
modification process. The timing of such election depends on the magnitude of
the interest rate savings that can be achieved.
Oglethorpe is also evaluating and may seek to reduce its interest expense
by refinancing certain of its other FFB notes upon payment of a premium as
permitted under the recently enacted Section 306C of the Rural Electrification
Act. Under 306C, an FFB borrower is able to refinance its outstanding
indebtedness at interest rates based on the then current Treasury rates upon
payment of a premium. Based on current interest rates and the premium that would
be due under Section 306C, Oglethorpe is evaluating refinancing a portion of its
FFB indebtedness and financing at least a portion of the premium. Oglethorpe's
management has not determined whether Oglethorpe will avail itself of such
refinancing option.
MISCELLANEOUS
As with utilities generally, inflation has the effect of increasing the
cost of Oglethorpe's operations and construction program. Operating and
construction costs have been less affected by inflation over the last few years
because rates of inflation have been relatively low.
The implementation of recently released pronouncements of the Financial
Accounting Standards Board, including Statement No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" and Statement No. 112, "Employer's
Accounting for Postemployment Benefits", are not expected to have a material
effect on Oglethorpe's results of operations.
31
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
OGLETHORPE POWER CORPORATION
INDEX TO FINANCIAL STATEMENTS
Page
----
Statements of Revenues and Expenses, For the Years Ended December 31, 1993,
1992 and 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Statements of Patronage Capital, For the Years Ended December 31, 1993,
1992 and 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Balance Sheets, As of December 31, 1993 and 1992 . . . . . . . . . . . . . . . . 34
Statements of Capitalization, As of December 31, 1993 and 1992 . . . . . . . . . 36
Statements of Cash Flows, For the Years Ended December 31, 1993,
1992 and 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . 38
Report of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . 48
32
STATEMENTS OF REVENUES AND EXPENSES
- -------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
OPERATING REVENUES (NOTE 1):
Sales to Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 899,720 $ 816,000 $ 763,657
Sales to non-Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,940 268,763 300,293
--------- --------- ---------
TOTAL OPERATING REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,100,660 1,084,763 1,063,950
--------- --------- ---------
OPERATING EXPENSES:
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,342 167,288 165,168
Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,972 115,915 130,041
Purchased power (Note 10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271,970 230,510 229,898
Power delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,286 17,804 20,443
Sales, administrative and general. . . . . . . . . . . . . . . . . . . . . . . . . 30,590 32,774 28,930
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . 128,060 126,047 135,152
Taxes other than income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 23,328 15,668 22,827
Income taxes (Note 1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,820 3,966 19,595
--------- --------- ---------
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 776,368 709,972 752,054
--------- --------- ---------
OPERATING MARGIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,292 374,791 311,896
--------- --------- ---------
OTHER INCOME (EXPENSE):
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,316 29,218 40,814
Gain on sale of debt service reserve fund securities . . . . . . . . . . . . . . . - 3,884 32,449
Amortization of deferred gains (Notes 2 and 6) . . . . . . . . . . . . . . . . . . 12,532 12,486 12,482
Amortization of proceeds from sale of
income tax benefits (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . 8,102 8,102 8,102
Amortization of deferred margins (Note 1) . . . . . . . . . . . . . . . . . . . . 4,138 35,973 31,000
Deferred margins (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,083) (40,464) (11,703)
Co-owner inventory settlement (Note 7) . . . . . . . . . . . . . . . . . . . . . . - (4,827) -
Allowance for equity funds used during
construction (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,278 1,377 782
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,542) 179 (485)
--------- --------- ---------
TOTAL OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,741 45,928 113,441
--------- --------- ---------
INTEREST CHARGES:
Interest on long-term debt and capital leases . . . . . . . . . . . . . . . . . . 367,439 392,454 398,999
Other interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,539 17,049 7,357
Allowance for debt funds used during construction (Note 1) . . . . . . . . . . . . (29,988) (20,255) (13,111)
Amortization of debt discount and expense . . . . . . . . . . . . . . . . . . . . 4,662 3,999 3,647
--------- --------- ---------
NET INTEREST CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350,652 393,247 396,892
--------- --------- ---------
MARGIN BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING PRINCIPLE . . . . . . . . . . . . . . . . . . . . . . . . 12,381 27,472 28,445
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,340 - -
--------- --------- ---------
NET MARGIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,721 $ 27,472 $ 28,445
--------- --------- ---------
--------- --------- ---------
STATEMENTS OF PATRONAGE CAPITAL
- -------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
PATRONAGE CAPITAL AND MEMBERSHIP FEES-BEGINNING
OF YEAR (NOTE 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 264,261 $ 236,789 $ 217,895
NET MARGIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,721 27,472 28,445
PATRONAGE CAPITAL RETIREMENTS DECLARED . . . . . . . . . . . . . . . . . . . . . . - - (9,551)
--------- --------- ---------
PATRONAGE CAPITAL AND MEMBERSHIP FEES-END OF YEAR. . . . . . . . . . . . . . . . . . $ 289,982 $ 264,261 $ 236,789
--------- --------- ---------
--------- --------- ---------
<FN>
CERTAIN PRIOR YEAR AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM WITH CURRENT YEAR
PRESENTATION.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
33
BALANCE SHEETS
- -------------------------------------------------------------------------------
DECEMBER 31, 1993 AND 1992
- ---------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
ASSETS 1993 1992
- ---------------------------------------------------------------------------------------------------------------------
ELECTRIC PLANT (NOTES 1, 2, 5 AND 6)
In service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,047,739 $ 4,980,279
Less: Accumulated provision for depreciation. . . . . . . . . . . . . . . . . (1,110,296) (989,892)
------------ ------------
3,937,443 3,990,387
Nuclear fuel, at amortized cost . . . . . . . . . . . . . . . . . . . . . . . 110,177 123,627
Plant acquisition adjustments, at amortized cost. . . . . . . . . . . . . . . 7,336 8,397
Construction work in progress . . . . . . . . . . . . . . . . . . . . . . . . 450,965 322,628
------------ ------------
4,505,921 4,445,039
------------ ------------
INVESTMENTS AND FUNDS, AT COST:
Bond, reserve and construction funds (Note 4) . . . . . . . . . . . . . . . . 110,390 163,964
Decommissioning fund (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . 56,911 47,921
Investment in associated organizations (Note 3) . . . . . . . . . . . . . . . 19,123 19,909
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486 644
------------ ------------
186,910 232,438
------------ ------------
CURRENT ASSETS:
Cash and temporary cash investments, at cost (Note 1) . . . . . . . . . . . . 244,173 275,624
Other short-term investments, at cost . . . . . . . . . . . . . . . . . . . . - 66,165
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,274 75,146
Inventories, at average cost (Note 7) . . . . . . . . . . . . . . . . . . . . 86,468 93,640
Prepayments and other current assets. . . . . . . . . . . . . . . . . . . . . 14,763 17,132
------------ ------------
427,678 527,707
------------ ------------
DEFERRED CHARGES:
Premium and loss on reacquired debt, being amortized (Note 5) . . . . . . . . 91,981 48,076
Deferred amortization of Scherer leasehold (Note 2) . . . . . . . . . . . . . 71,559 61,880
Deferred debt expense being amortized . . . . . . . . . . . . . . . . . . . . 21,527 24,735
Discontinued project, being amortized (Note 6). . . . . . . . . . . . . . . . 18,314 19,722
------------ ------------
203,381 154,413
------------ ------------
$ 5,323,890 $ 5,359,597
------------ ------------
------------ ------------
<FN>
CERTAIN PRIOR YEAR AMOUNTS HAVE BEEN RECLASSIFIED TO CONFORM WITH CURRENT YEAR
PRESENTATION.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE BALANCE SHEETS.
34
- ---------------------------------------------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
EQUITY AND LIABILITIES 1993 1992
- ---------------------------------------------------------------------------------------------------------------------
CAPITALIZATION (SEE ACCOMPANYING STATEMENTS):
Patronage capital and membership fees (Note 1). . . . . . . . . . . . . . . . $ 289,982 $ 264,261
Long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,058,251 4,095,796
Obligation under capital leases (Note 2). . . . . . . . . . . . . . . . . . . 303,458 302,061
------------ ------------
4,651,691 4,662,118
------------ ------------
CURRENT LIABILITIES:
Long-term debt due within one year. . . . . . . . . . . . . . . . . . . . . . 78,644 133,136
Deferred margins and Vogtle surcharge to be
refunded within one year (Note 1). . . . . . . . . . . . . . . . . . . . . 26,777 5,738
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,186 64,535
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,702 59,323
Accrued and withheld taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 9,401 3,660
Energy cost billed in excess of actual (Note 1`). . . . . . . . . . . . . . . 11,456 29,318
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 40,234 22,456
------------ ------------
337,400 318,166
------------ ------------
DEFERRED CREDITS AND OTHER LIABILITIES:
Gain on sale of plant, being amortized (Notes 2). . . . . . . . . . . . . . . 65,550 67,892
Gain on sale of Scherer common facilities, being amortized (Note 6) . . . . . 7,644 17,835
Sale of income tax benefits, being amortized (Note 6) . . . . . . . . . . . . 66,838 74,939
Accumulated deferred income taxes (Note 1). . . . . . . . . . . . . . . . . . 65,510 77,225
Deferred margins and Vogtle surcharge (Note 1). . . . . . . . . . . . . . . . 21,083 42,777
Decommissioning reserve (Note 1). . . . . . . . . . . . . . . . . . . . . . . 90,476 77,490
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,698 21,155
------------ ------------
334,799 379,313
------------ ------------
COMMITMENTS AND CONTINGENCIES (NOTES 2,6,9 AND 10)
$ 5,323,890 $ 5,359,597
------------ ------------
------------ ------------
35
STATEMENTS OF CAPITALIZATION
- -------------------------------------------------------------------------------
DECEMBER 31, 1993 AND 1992
(dollars in thousands)
1993 1992
- ------------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT (NOTE 5):
Mortgage notes payable to the Federal Financing Bank (FFB)
at interest rates varying from 6.61% to 10.95% (average rate
of 8.367% at December 31, 1993) due in quarterly installments . . . . . . . . . . . . . . $ 3,040,767 $ 3,111,160
Mortgage notes payable to the Rural Electrification Administration (REA)
at an interest rate of 5% due in monthly installments . . . . . . . . . . . . . . . . . . 23,927 24,365
Mortgage notes issued in conjunction with the sale by public authorities of
pollution control revenue bonds:
- Series 1978
Serial bonds, 6.00% to 6.40%, due serially through 1999 . . . . . . . . . . . . . . 5,440 6,180
Term bonds, 6.80%, due 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,700 16,700
- Series 1982
Serial bonds, 10.00% to 10.60%, due serially through 1997. . . . . . . . . . . . . . 23,195 27,740
- Series 1984
Serial bonds, 9.50% to 10.50%, due serially through 2000 . . . . . . . . . . . . . . 61,800 67,790
Term bonds, 7.00% to 10.63%, due 2004 to 2014. . . . . . . . . . . . . . . . . . . . 119,135 270,965
- Series 1984B
Serial bonds, 9.75% to 10.50%, due serially through 2000 . . . . . . . . . . . . . . 11,530 25,910
Term bonds, 10.50%, due 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 69,080
- Series 1985
Serial bonds, 8.50% to 9.50%, due serially through 2001. . . . . . . . . . . . . . . 29,290 31,770
Term bonds, 7.50% to 9.88%, due 2005 to 2017 . . . . . . . . . . . . . . . . . . . . 141,890 141,890
- Series 1992A
Adjustable tender bonds, 2.10% to 2.65%, due 2025 . . . . . . . . . . . . . . . . . 216,925 216,925
Serial bonds, 3.85% to 6.80%, due serially from 1994 through 2012. . . . . . . . . . 143,710 143,710
- Series 1992
Term bonds, 7.50% to 8.00%, due 2003 to 2022 . . . . . . . . . . . . . . . . . . . . 92,130 92,130
- Series 1993A
Adjustable tender bonds, 3.10%, due 2016 . . . . . . . . . . . . . . . . . . . . . . 199,690 -
National Bank for Cooperatives (CoBank) notes payable:
- Headquarters note payable: $5.4 million fixed at 7.40% through April 1995,
$0.5 million fixed at 6.35%-7.35% to April 1995; due in quarterly
installments through January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . . 5,938 6,328
- Transmission note payable: fixed at 7.40% through April 1995;
due in bimonthly installments through November 1, 2018 . . . . . . . . . . . . . . . 2,296 2,310
- Transmission note payable: fixed at 7.25% through April 1995;
due in bimonthly installments through September 1, 2019 . . . . . . . . . . . . . . 8,751 8,798
---------- -----------
4,143,114 4,263,751
Less: Unamortized debt discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,219) (34,819)
---------- -----------
Total long-term debt, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,136,895 4,228,932
Less: Amount due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (78,644) (133,136)
---------- -----------
TOTAL LONG-TERM DEBT, EXCLUDING AMOUNT DUE WITHIN ONE YEAR . . . . . . . . . . . . . . . . . . 4,058,251 4,095,796
OBLIGATION UNDER CAPITAL LEASES (NOTE 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 303,458 302,061
PATRONAGE CAPITAL AND MEMBERSHIP FEES (NOTE 1) . . . . . . . . . . . . . . . . . . . . . . . . 289,982 264,261
---------- -----------
TOTAL CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,651,691 $ 4,662,118
---------- -----------
---------- -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
36
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,721 $ 27,472 $ 28,445
-------- -------- --------
Adjustments to reconcile net margin to net cash
provided by operating activities:
Cumulative effect of change in accounting for income taxes . . . . . . . . (13,340) - -
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 180,221 188,285 203,770
Amortization of deferred gains . . . . . . . . . . . . . . . . . . . . . . (12,532) (12,486) (12,482)
Deferred margins and amortization of deferred margins. . . . . . . . . . . 945 4,491 (19,297)
Amortization of proceeds from sale of income tax benefits. . . . . . . . . (8,102) (8,102) (8,102)
Interest on decommissioning reserve . . . . . . . . . . . . . . . . . . . 7,356 5,443 5,850
Gain on sale of bond fund investments . . . . . . . . . . . . . . . . . . - (3,884) (32,449)
Allowance for equity funds used during construction. . . . . . . . . . . . (2,278) (1,377) (782)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 1,625 2,459 19,595
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (3,066) 1,118
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,128) 371 (3,956)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,172 (1,670) (6,865)
Prepayments and other current assets . . . . . . . . . . . . . . . . . 2,369 (3,043) 109
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,349) 1,106 19,109
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,379 (1,238) (147)
Accrued and withheld taxes . . . . . . . . . . . . . . . . . . . . . . 5,741 (14,505) (55)
Energy cost billed in excess of actual . . . . . . . . . . . . . . . . (17,862) 29,318 -
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . 15,542 (7,532) (3,993)
-------- -------- --------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206,746 174,570 161,423
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . 232,467 202,042 189,868
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (235,285) (232,283) (225,021)
Net proceeds from bond, reserve and construction funds . . . . . . . . . . . . 53,574 15,957 35,024
Decrease in investment in associated organizations . . . . . . . . . . . . . . 786 1,213 824
Decrease (increase) in other short-term investments . . . . . . . . . . . . . 66,165 (66,165) -
Release of safe harbor lease indemnity fund . . . . . . . . . . . . . . . . - - 120,000
Increase in decommissioning fund . . . . . . . . . . . . . . . . . . . . . . . (8,990) (6,841) (7,259)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 (158) (486)
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . (123,592) (288,277) (76,918)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt proceeds, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232,675 579,938 51,157
Debt payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (369,962) (554,029) (40,550)
Patronage capital retirements . . . . . . . . . . . . . . . . . . . . . . . . - (9,551) (4,877)
Return of Vogtle surcharge . . . . . . . . . . . . . . . . . . . . . . . . . . (1,600) (5,085) (990)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,439) (144) (203)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES . . . . . . . . . . . . . . (140,326) 11,129 4,537
-------- -------- --------
NET INCREASE (DECREASE) IN CASH
AND TEMPORARY CASH INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . (31,451) (75,106) 117,487
CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF YEAR . . . . . . . . . . . . 275,624 350,730 233,243
-------- -------- --------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF YEAR . . . . . . . . . . . . . . . $ 244,173 $ 275,624 $ 350,730
-------- -------- --------
-------- -------- --------
CASH PAID FOR:
Interest (net of amounts capitalized) . . . . . . . . . . . . . . . . . . . . $ 289,255 $ 388,117 $ 386,450
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,658 43 -
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
37
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. BASIS OF ACCOUNTING
Oglethorpe Power Corporation (Oglethorpe) follows generally accepted
accounting principles and the practices prescribed in the Uniform System of
Accounts of the Federal Energy Regulatory Commission (FERC) as modified and
adopted by the Rural Electrification Administration (REA).
B. ELECTRIC PLANT
Electric plant is stated at original cost, which is the cost of the
plant when first dedicated to public service, plus the cost of any subsequent
additions. Cost includes an allowance for the cost of equity and debt funds
used during construction. The cost of equity and debt funds is calculated at
the embedded cost of all such funds. The plant acquisition adjustments
represent the excess of the cost of the plant to Oglethorpe over the original
cost, less accumulated depreciation at the time of acquisition, and are being
amortized over a ten-year period.
Maintenance and repairs of property and replacements and renewals of
items determined to be less than units of property are charged to expense.
Replacements and renewals of items considered to be units of property are
charged to the plant accounts. At the time properties are disposed of, the
original cost, plus cost of removal, less salvage of such property, is
charged to the accumulated provision for depreciation.
C. OPERATING REVENUES
Sales to Members consist primarily of electricity sales pursuant to
long-term wholesale power contracts which Oglethorpe maintains with each of
its 39 retail electric distribution cooperatives (Members). These wholesale
power contracts obligate each Member to pay Oglethorpe for capacity and
energy furnished in accordance with rates established by Oglethorpe. Energy
furnished is determined based on meter readings which are conducted at the
end of each month.
For the year ended December 31, 1993, revenues from Cobb EMC, one of
Oglethorpe's Members, accounted for 10.3% of Oglethorpe's total revenues.
Prior to 1993, no individual Member accounted for 10% or more of Oglethorpe's
total revenues.
Sales to non-Members consist primarily of capacity and energy sales to
Georgia Power Company (GPC) under terms of sell-back agreements entered into
when Oglethorpe purchased interests in certain of GPC's generation
facilities. Pursuant to these agreements, GPC purchases from Oglethorpe a
declining fractional part of the capacity and energy during the first seven
to ten years of an applicable generating unit's commercial operation. The
portion of Oglethorpe's capacity and energy retained by GPC is shown as
follows:
- ----------------------------------------------------------------------------
Fractional Part of Capacity and Energy Retained by GPC during Contract Year
Ended May 31
- ----------------------------------------------------------------------------
Generating Unit 1994 1993 1992 1991
- ----------------------------------------------------------------------------
Plant Scherer,
Unit No. 1 -- -- -- 6/60
Plant Scherer,
Unit No. 2 -- 6/60 12/60 18/60
Plant Vogtle,
Unit No. 1 4/30 8/30 11/30 14/30
Plant Vogtle,
Unit No. 2 8/30 11/30 14/30 17/30
- ----------------------------------------------------------------------------
Pursuant to these sell-back agreements and to other contractual
arrangements with GPC, revenues from GPC accounted for approximately 15%,
24%, and 28% of Oglethorpe's total revenues in 1993, 1992, and 1991,
respectively.
D. DEPRECIATION
Depreciation is computed on additions when they are placed in service
using the composite straight-line method. Annual depreciation rates in effect
in 1993, 1992 and 1991 were as follows:
- ----------------------------------------------------------------------------
1993 1992 1991
- ----------------------------------------------------------------------------
Steam production 2.66% 2.66% 2.73%
Nuclear production 2.83% 2.74% 3.09%
Hydro production 2.00% 2.00% 2.00%
Other production 1.09% 1.09% 1.14%
Transmission 2.75% 2.75% 2.75%
Distribution 2.88% 2.88% 2.88%
General 2.00-17.00% 2.00-17.00% 2.00-17.00%
- ----------------------------------------------------------------------------
Oglethorpe's portion of the cost of decommissioning co-owned nuclear
facilities, based on current price levels and decommissioning promptly after
the unit is taken out of service, is estimated at approximately $71,000,000
for Hatch Unit No. 1, $93,000,000 for Hatch Unit No. 2, $79,000,000 for
Vogtle Unit No.1 and $99,000,000 for Vogtle Unit No. 2. The depreciation
rate for nuclear production includes a factor to provide for such expected
cost of decommissioning. Oglethorpe accounts for this provision for
decommissioning as depreciation expense with an offsetting credit to a
decommissioning reserve. Imputed interest calculated based on current
investment rates is applied to the decommissioning reserve balance and
charged to interest expense. The estimates for the expected cost of
decommissioning and the corresponding decommissioning factor in the
depreciation rate are adjusted periodically to reflect changing price levels
and technology.
38
In compliance with a Nuclear Regulatory Commission (NRC) regulation,
Oglethorpe maintains an external trust fund to provide for a portion of the
cost of decommissioning its nuclear facilities. The NRC regulation requires
funding levels based on average expected cost to decommission only the
radioactive portions of a typical nuclear facility. Investment earnings
generated from the external trust fund increase the decommissioning fund and
interest income.
E. NUCLEAR FUEL COST
The cost of nuclear fuel, including a provision for the disposal of
spent fuel, is being amortized to fuel expense based on usage. The total
nuclear fuel expense for 1993, 1992 and 1991 amounted to $49,647,000,
$55,804,000 and $62,349,000, respectively.
Contracts with the U.S. Department of Energy (DOE) have been executed to
provide for the permanent disposal of spent nuclear fuel for the life of
Plant Hatch and Plant Vogtle. The services to be provided by DOE are
scheduled to begin in 1998. However, the actual year that these services will
begin is uncertain. The Plant Hatch spent fuel storage is expected to be
sufficient into 2003. The Plant Vogtle spent fuel storage is expected to be
sufficient into 2009. If DOE does not begin receiving spent fuel from Plant
Hatch in 2003 or from Plant Vogtle in 2009, alternative spent fuel storage
will be needed.
The Energy Policy Act of 1992 requires that utilities with nuclear
plants be assessed, over the next 15 years, an amount which will be used by
DOE for the decontamination and decommissioning of its nuclear fuel
enrichment facilities. The amount of each utility's assessment is based on
its past purchases of nuclear fuel enrichment services from DOE. Based on its
ownership in Plants Hatch and Vogtle, Oglethorpe has recorded a nuclear fuel
asset of approximately $20,000,000, which is being amortized to nuclear fuel
expense over the 15-year assessment period. Oglethorpe has also recorded,
net of sell-back, an obligation to DOE which approximated $14,000,000 at
December 31, 1993.
F. PATRONAGE CAPITAL AND MEMBERSHIP FEES
Oglethorpe is organized and operates as a cooperative. The Members paid
a total of $195 in membership fees. Patronage capital is the retained net
margin of Oglethorpe. As provided in the bylaws, any excess of revenue over
expenditures from operations is treated as advances of capital by the Members
and is allocated to each of them on the basis of their electricity purchases
from Oglethorpe.
The margin and patronage capital retirements policy adopted by the
Oglethorpe Board of Directors in 1992 extended from 13 years to 30 years the
period that each year's net margin will be retained by Oglethorpe. Pursuant
to the previous 13-year patronage capital retirement schedule, 1978 patronage
capital assignments were retired in 1992, and 1977 assignments in 1991. Under
the new 30-year retirement schedule, no patronage capital would be returned
to the Members until 2010, at which time the 1979 patronage capital would be
returned.
G. INCOME TAX ACCOUNTING
Oglethorpe is a not-for-profit membership corporation subject to
Federal, State of Georgia and State of Alabama income taxes. For years 1981
and prior, Oglethorpe claimed tax-exempt status under Section 501(c)(12) of
the Internal Revenue Code of 1954, as amended (the Code). In 1982, Oglethorpe
reported as a taxable entity as a result of income received by it from GPC
under the capacity and energy sell-back agreement applicable to Scherer Unit
No. 1. In connection with its 1985 tax return. Oglethorpe made an election
under Section 168(j)(4)(E)(ii) of the Code to remain taxable from 1985 until
at least 2005 without regard to the amount of its income from GPC or other
non-Members. As a taxable electric cooperative, Oglethorpe has annually
allocated its income and deductions between Member and non-Member activities.
Any Member taxable income has been offset with a patronage exclusion.
As of January 1, 1993, Oglethorpe prospectively adopted the provisions
of Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes". In adopting SFAS No. 109, Oglethorpe recorded a
$13,340,000 reduction in accumulated deferred income taxes and an increase in
income from the cumulative effect of a change in accounting principle. SFAS
No. 109 requires the recognition of deferred tax assets and liabilities for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Deferred tax assets and liabilities are
determined based on the differences between the financial and tax bases using
enacted tax rates in effect for the year in which the differences are
expected to reverse.
A detail of the provision for income taxes in 1993, 1992 and 1991 is
shown as follows:
- ---------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992 1991
- ---------------------------------------------------------------------------
Current
Federal $ -- $ -- $ --
State 195 1,507 --
--------- -------- --------
195 1,507 --
--------- -------- --------
Deferred
Federal 1,820 4,127 17,541
State (195) (1,668) 2,054
--------- -------- --------
1,625 2,459 19,595
--------- -------- --------
Income taxes charged
to operations $ 1,820 $ 3,966 $ 19,595
--------- -------- --------
--------- -------- --------
- ---------------------------------------------------------------------------
39
The difference between the statutory federal income tax rate on income
before income taxes and accounting changes and Oglethorpe's effective income tax
rate is summarized as follows:
- ------------------------------------------------------------------------------
1993 1992 1991
- ------------------------------------------------------------------------------
Statutory federal income tax rate 35.0% 34.0% 34.0%
Patronage exclusion (35.1%) (21.6%) 4.3%
Other 0.1% 0.7% (1.8%)
Effect of increase in
statutory rate 12.8% 0.0% 0.0%
---- ---- ----
Effective income tax rate 12.8% 13.1% 36.5%
---- ---- ----
---- ---- ----
- ------------------------------------------------------------------------------
The components of the net deferred tax liabilities as of December 31, 1993
were as follows:
- -----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993
- -----------------------------------------------------------------------------
Deferred tax assets:
Net operating losses $ 471,069
Member loss carryforwards 363,140
Accounting for safe harbor leases 102,886
Tax credits 252,701
Patronage exclusions available 39,149
Accounting for asset dispositions 38,381
Accrued nuclear decommissioning
expense 29,324
Other 8,002
---------
1,304,652
Less: Valuation allowance (252,701)
---------
1,051,951
---------
Deferred tax liabilities:
Depreciation (1,068,396)
Accounting for debt
extinguishment (34,114)
Other (14,951)
---------
(1,117,461)
---------
Net deferred tax liabilities $ (65,510)
---------
---------
- -----------------------------------------------------------------------------
Oglethorpe has federal tax net operating loss carryforwards (NOLs) and
unused general business credits (consisting primarily of investment tax credits)
as follows:
- -------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Expiration Date Tax Credits NOLs
- -------------------------------------------------------------
1997 $ 11,197 $ -
1998 6,934 -
1999 37,206 -
2000 3,198 -
2001 7,264 -
2002 130,392 146,362
2003 652 253,665
2004 55,669 114,285
2005 189 213,080
2006 - 209,009
2007 - 86,779
2008 - 102,262
-------- ---------
$ 252,701 $1,125,442
-------- ---------
-------- ---------
- -------------------------------------------------------------
Based on Oglethorpe's historical taxable transactions and the timing of the
reversal of existing temporary differences, management believes it is more
likely than not that Oglethorpe's future taxable income will be sufficient to
realize the benefit of the NOLs existing at December 31, 1993 before their
respective expiration dates. However, as reflected in the above valuation
allowance, management does not believe it is more likely than not that the tax
credits will be utilized before expiration.
During 1992 and 1991, deferred income taxes were provided for significant
timing differences between revenues and expenses for tax and financial statement
purposes. The source and deferred tax effect of these differences are summarized
as follows:
- ----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1992 1991
- ----------------------------------------------------------------------------
Excess of tax over book depreciation $ 16,524 $ 75,042
Difference in recognition of gain/loss
on asset dispositions 6,475 6,832
Difference in accounting for safe harbor leases 6,022 5,487
Accrued nuclear decommissioning expense (558) (740)
Difference in accounting for debt extinguishment 6,956 -
Adjustments to book accrued liabilities 3,514 (425)
Difference in recognition of cost of
discontinued project (532) 8,178
Other (67) (464)
Portion of the above differences not reflected
in expense due to net operating losses (35,875) (74,315)
------- -------
$ 2,459 $ 19,595
------- -------
------- -------
- ----------------------------------------------------------------------------
H. MARGIN POLICY
Oglethorpe's margin policy is based on the provision of a Times Interest
Earned Ratio (TIER) established annually by the Oglethorpe Board of Directors.
For 1993, 1992, and 1991, the margin goal was the amount required to produce a
TIER of 1.07. Oglethorpe's Board of Directors adopted a new margin and patronage
capital retirements policy in 1992. Pursuant to the new policy, the annual net
margin goal will be the amount required to produce a TIER of 1.07 each year
through 1995, 1.08 in 1996, 1.09 in 1997 and 1.10 in 1998 and thereafter.
The Oglethorpe Board of Directors adopted resolutions annually requiring
that Oglethorpe's net margins for the years 1985 through 1993 in excess of its
annual margin goals be deferred and used to mitigate rate increases associated
with Plant Vogtle. In addition, during 1986 and 1987, Oglethorpe's wholesale
electric rate to its Members provided for a one mill per kilowatt-hour charge
(Vogtle Surcharge), also to be used to mitigate the effect of Plant Vogtle on
rates. In addition, two of Oglethorpe's Members, with the concurrence of REA,
elected to increase the level of this charge for their systems during this
period.
40
Pursuant to rate actions by Oglethorpe's Board of Directors, specified
amounts of deferred margins and Vogtle Surcharge were returned in 1989 through
1993 and will be returned in 1994. A summary of deferred margins and Vogtle
Surcharge as of December 31, 1993 and 1992 is as follows:
- ---------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992
- ---------------------------------------------------------------------------
Deferred margins:
1985-90 $ 113,385 $ 113,385
1991 11,703 11,703
1992 40,464 40,464
1993 5,083 -
-------- --------
170,635 165,552
Vogtle Surcharge:
1986-87 36,613 36,613
-------- --------
Subtotal 207,248 202,165
Less: Amounts returned in:
1989-90 (80,602) (80,602)
1991 (31,990) (31,990)
1992 (41,058) (41,058)
1993 (5,738) (5,738)
1994 (26,777) -
-------- --------
Balance* $ 21,083 $ 42,777
-------- --------
-------- --------
<FN>
* THE PORTION RELATING TO AMOUNTS PROVIDED VOLUNTARILY BY TWO OF OGLETHORPE'S
MEMBERS WAS APPROXIMATELY $3,320,000 OF THE BALANCE AT DECEMBER 31, 1993.
- ---------------------------------------------------------------------------
I. CASH AND TEMPORARY CASH INVESTMENTS
Oglethorpe considers all temporary cash investments purchased with a
maturity of three months or less to be cash equivalents. Temporary cash
investments with maturities of more than three months are classified as other
short-term investments.
J. ENERGY COST BILLED IN EXCESS OF ACTUAL
Oglethorpe's wholesale power rate sets forth the manner in which energy
costs are to be recovered from its Members. The rate in effect for 1993 and
1992 provided that an energy rate be determined based on projected costs and
kilowatt-hour sales and that the resulting rate be used to bill Members for a
six-month period. Actual energy costs were compared, on a monthly basis, to the
billed energy costs, and an adjustment to revenues was made such that energy
revenues were equal to actual energy costs. The offset to this adjustment is a
payable to or receivable from Members for over or under-collected energy costs.
The rate further provides that any cumulative over or under-collection for the
previous six-month period be utilized to adjust projected costs for the next
six-month period. Therefore, the amounts owed to Members as of December 31,
1993 and 1992 will be and have been utilized to reduce Member billings in 1994
and 1993, respectively.
2. CAPITAL LEASES:
In December 1985, Oglethorpe sold and subsequently leased back from four
purchasers its 60% undivided ownership interest in Scherer Unit No. 2. The gain
from the sale is being amortized over the 36-year term of the leases. The
minimum lease payments under the capital leases together with the present value
of net minimum lease payments as of December 31, 1993 are as follows:
- -----------------------------------------------------------------------------
YEAR ENDING DECEMBER 31, (DOLLARS IN THOUSANDS)
- -----------------------------------------------------------------------------
1994 $ 33,258
1995 36,016
1996 38,142
1997 35,239
1998 37,302
1999-2021 682,454
-------
Total minimum lease payments 862,411
Less: Amount representing interest (558,953)
-------
Present value of net
minimum lease payments $ 303,458
-------
-------
- -----------------------------------------------------------------------------
The capital leases provide that Oglethorpe's rental payments vary to the
extent of interest rate changes associated with the debt used by the lessors to
finance their purchase of undivided ownership shares in Scherer Unit No. 2. The
debt of three of the lessors is financed at fixed interest rates averaging
9.58%. As of December 31, 1993, the variable interest rates of the debt of the
remaining lessor ranged from 5.93% to 8.25% for an average rate of 7.27%.
Oglethorpe's future rental payments under its leases will vary from amounts
shown in the table above to the extent that the actual interest rates associated
with the fixed and variable rate debt of the lessors vary from the 11.05% debt
rate assumed in the table.
The Scherer Unit No. 2 lease meets the definitional criteria to be reported on
Oglethorpe's balance sheets as a capital lease. For rate-making purposes,
however, Oglethorpe treats this lease as an operating lease; that is, Oglethorpe
considers the actual rental payment on the leased asset in its cost of service.
Oglethorpe's accounting treatment for this capital lease has been modified,
therefore, to reflect it rate-making treatment. Interest expense is applied to
the obligation under the capital lease; then, amortization of the leasehold is
recognized, such that interest and amortization equal the actual rental payment.
Through 1994 the level of actual rental payments is such that amortization of
the Scherer Unit No. 2 leasehold calculated in this manner is less than zero.
Thereafter, the scheduled cash rental payments increase such that positive
amortization of the leasehold occurs, and the entire cost of the leased asset is
recovered through the rate-making process. The difference in the amortization
recognized in this manner on the statements of revenues and expenses and the
straight-line amortization of the leasehold is reflected on Oglethorpe's balance
sheets as a deferred charge.
41
In 1991 and 1992, all four of the lessors received Notices of Proposed
Adjustments from the IRS proposing adjustments to the tax benefits claimed by
these lessors in connection with their purchase and ownership of an undivided
interest in Scherer Unit No. 2. The proposed adjustments, if ultimately upheld,
would have the effect of reducing the lessors' tax benefits resulting from the
sale and leaseback transactions. The lessors filed responses contesting the
IRS's assertions as contained in the Notices of Proposed Adjustments.
In February 1994, the IRS issued a revised Notice of Proposed Adjustments
to one of the lessors which reduced the proposed adjustments to the tax benefits
claimed by this lessor in connection with its purchase and ownership of an
undivided interest in Scherer Unit No. 2. The IRS has indicated that it will
take consistent positions with the other three lessors. If the IRS's current
positions regarding the sale and leaseback transactions were ultimately upheld,
Oglethorpe would be required to indemnify the four lessors. Oglethorpe's
potential indemnification liability in this event is estimated to be
approximately $1,200,000 as of February 1994.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS:
A detail of the estimated fair values of Oglethorpe's financial instruments
as of December 31, 1993 and 1992 is as follows:
- -----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992
---------------- ----------------
Carrying Fair Carrying Fair
Amount Value Amount Value
- -----------------------------------------------------------------------------
Cash and temporary
cash investments $244,173 $244,173 $275,624 $275,624
Other short-term
investments -- -- 66,165 66,165
Bond, reserve
and construction funds 110,390 112,015 163,964 164,135
Decommissioning fund 56,911 56,686 47,921 48,508
Long-term debt 4,058,251 4,525,248 4,095,796 4,564,262
- -----------------------------------------------------------------------------
Oglethorpe uses the methods and assumptions described below to estimate the
fair value of each class of financial instruments. For cash and temporary cash
investments and other short-term investments, the carrying amount approximates
fair value because of the short-term maturity of those instruments. The fair
values of bond, reserve and construction funds and the decommissioning fund are
estimated based on quoted market prices for the investments held in the
respective funds. The fair value of Oglethorpe's long-term debt is estimated
based on the quoted market prices for the same or similar issues or on the
current rates offered to Oglethorpe for debt of similar maturities.
Investment in associated organizations was as follows at December 31, 1993
and 1992:
- --------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992
- --------------------------------------------------------------------------------
National Rural Utilities
Cooperative Finance Corp. $ 13,476 $ 13,476
National Bank for Cooperatives 5,546 6,362
Other 101 71
---------- ----------
Total $ 19,123 $ 19,909
---------- ----------
---------- ----------
- --------------------------------------------------------------------------------
As a member of National Rural Utilities Cooperative Finance Corporation
(CFC), Oglethorpe was obligated to purchase CFC Capital Term Certificates
annually through 1984. Such certificates begin maturing in the year 2075 and
bear interest at 5%. As a borrower from the National Bank for Cooperatives
(CoBank), Oglethorpe is obligated to purchase capital stock in that bank. Under
CoBank's capitalization plan, Oglethorpe is required to maintain an investment
in the bank equal to 7%-13% of its five-year average loan volume with the bank.
The required investment of 1993 was 11.5% of Oglethorpe's five-year average loan
volume. It is not anticipated that Oglethorpe will be required to make any
additional investments during 1994. The investments in these associated
organizations are similar to compensating bank balances in that they are
required in order to maintain current financing arrangements. Accordingly, there
is no market for these investments.
4. BOND, RESERVE AND CONSTRUCTION FUNDS:
Bond, reserve and construction funds for pollution control bonds are
maintained as required by Oglethorpe's bond agreements. Bond funds serve as
payment clearing accounts, reserve funds maintain amounts equal to the maximum
annual debt service of each bond issue and construction funds hold bond proceeds
for which construction expenditures have not yet been made. As of December 31,
1993 and 1992, substantially all of the funds were invested in U.S. Government
securities.
5. LONG-TERM DEBT:
Long term debt consists of mortgage notes payable to the Unites States of
America acting through the FFB and the REA, mortgage notes issued in conjunction
with the sale by public authorities of pollution control revenue bonds and notes
payable to CoBank. Oglethorpe's headquarters facility is pledged as security for
the CoBank headquarters note; substantially all of the owned tangible and
certain of the intangible assets of Oglethorpe are pledged as security for the
FFB and REA notes, the remaining CoBank notes and the notes issued in
conjunction with the sale of pollution control revenue bonds. The detail of the
notes is included in the statements of capitalization.
42
Oglethorpe currently has ten REA-guaranteed FFB notes of which
$3,040,767,000 and $3,111,160,000 were outstanding at December 31, 1993 and
1992, respectively, with rates ranging from 6.61% to 10.95%.
In March 1993, Oglethorpe entered into two forward interest rate swap
arrangements obligating Oglethorpe to sell $199,690,000 of variable rate
refunding bonds in the fall of 1993 and $122,740,000 of variable rate refunding
bonds in the fall of 1994, the proceeds of which, together with certain other
funds provided or to be provided by Oglethorpe, have been and will be used in
January 1994 and January 1995, respectively, to refund certain pollution control
revenue bonds previously issued. At December 31, 1993, Oglethorpe accounted for
the pending January 1994 retirement of $233,010,000 of previously issued bonds
as an in-substance defeasance. Therefore, debt service reserve funds, bonds
payable, and the premium and loss on reacquired debt are stated as though the
event of retiring the refunded bonds had occurred in 1993.
In connection with the March 1993 swap transaction, Oglethorpe recorded
redemption premiums which, combined with unamortized transaction costs, totaled
$38,128,000. This amount has been reported as a deferred charge on the balance
sheets and is being or will be amortized over the life of the related new
bonds.
Pursuant to the forward interest rate swap arrangements, Oglethorpe makes
payments to the counterparty based on the notional principal at a fixed rate and
the counterparty makes payments to Oglethorpe based on the notional principal
and on the existing variable rate of the refunding bonds. The differential to
be paid or received is accrued as interest rates change and is recognized as an
adjustment to interest expense. For the fall 1993 transaction, the notional
principal was $199,690,000 and the fixed swap rate is 5.67% (the variable rate
at December 31, 1993 was 3.10%). With respect to the fall 1994 transaction,
the notional principal will be $122,740,000 and the fixed swap rate is 6.01%.
The notional principal amount is used to measure the amount of the swap
payments and does not represent additional principal due to the counterparty.
The swap arrangements extend for the life of the refunding bonds, with
reductions in the outstanding principal amounts of the refunding bonds causing
corresponding reductions in the notional amounts of the swap payments.
The annual interest requirement for 1994, based upon all debt outstanding
at December 31, 1993, will be approximately $339,000,000.
Maturities for the long-term debt through 1998 are as follows:
- --------------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1994 1995 1996 1997 1998
- --------------------------------------------------------------------------------
FFB and REA $56,224 $52,095 $57,725 $63,625 $69,008
CoBank 460 468 478 489 502
1978 Bonds 780 830 880 930 980
1982 Bonds 4,985 5,485 6,050 6,675 --
1984 Bonds 6,540 7,160 7,850 8,640 9,520
1984B Bonds 2,500 2,730 3,000 3,300 --
1985 Bonds 2,685 2,915 3,170 3,445 3,760
1992A Bonds 4,470 4,640 4,840 5,070 5,330
1992 Bonds -- -- -- -- 2,085
1993A Bonds -- -- -- -- 2,265
------- ------- ------- ------- -------
Total $78,644 $76,323 $83,993 $92,174 $93,450
------- ------- ------- ------- -------
------- ------- ------- ------- -------
- -----------------------------------------------------------------------------
Oglethorpe has a commercial paper program under which it may issue
commercial paper not to exceed a $355,000,000 balance outstanding at any time.
The commercial paper may be used as a source of short-term funds and is not
intended for any specific purpose. Oglethorpe's commercial paper is backed 100%
by a committed line of credit provided by a group of banks for which Trust
Company Bank (Trust Company) acts as agent. As of December 31, 1993 and 1992, no
commercial paper was outstanding.
Oglethorpe has arranged for uncommitted short-term lines of credit with
CoBank and CFC, and a committed line of credit with Trust Company. The CoBank
line amounts to $70,000,000; the CFC line amounts to $50,000,000; and the Trust
Company line amounts to $30,000,000. The maximum amount that can be outstanding
under these lines of credit and the commercial paper program at any one time
totals $425,000,000 due to certain restrictions contained in the CFC and Trust
Company line of credit agreements. No balance on any of these three lines of
credit was outstanding at either December 31, 1993 or 1992.
In January 1994, Oglethorpe completed a note modification pursuant to which
it repriced $590,909,000 of FFB advances. In connection with such modification,
Oglethorpe paid a premium of $50,745,000. This amount will be reported as a
deferred charge on the balance sheets and will be amortized over 22 years, the
longest remaining life of the subject advances.
43
6. ELECTRIC PLANT AND RELATED AGREEMENTS:
Oglethorpe and GPC have entered into agreements providing for the purchase
and subsequent joint operation of certain of GPC's electric generating plants
and transmission facilities. A summary of Oglethorpe's plant investments as of
December 31, 1993 is as follows:
- -----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
ACCUMULATED
PLANT INVESTMENT DEPRECIATION
- -----------------------------------------------------------------------------
In-service:
Owned property:
VOGTLE UNITS NO. 1 & NO. 2
(NUCLEAR - 30% OWNERSHIP) $ 2,773,510 $ 453,918
HATCH UNITS NO. 1 & NO. 2
(NUCLEAR - 30% OWNERSHIP) 510,670 173,992
WANSLEY UNITS NO. 1 & NO. 2
(FOSSIL - 30% OWNERSHIP) 165,977 78,057
SCHERER UNIT NO. 1
(FOSSIL - 60% OWNERSHIP) 427,377 165,387
TALLASSEE (HARRISON DAM)
(HYDRO - 100% OWNERSHIP) 9,277 1,286
WANSLEY (COMBUSTION TURBINE-
30% OWNERSHIP) 3,665 955
TRANSMISSION AND
DISTRIBUTION PLANT 749,366 143,123
OTHER 108,972 27,146
Property under capital lease:
SCHERER UNIT NO. 2
(FOSSIL - 60% LEASEHOLD) 298,925 66,432
----------- -----------
Total in-service $ 5,047,739 $ 1,110,296
----------- -----------
----------- -----------
Construction work in progress:
ROCKY MOUNTAIN
(HYDRO - 70% OWNERSHIP*) $ 414,187
GENERATION IMPROVEMENTS 19,067
TRANSMISSION AND
DISTRIBUTION PLANT 16,287
OTHER 1,424
-----------
Total construction work in progress $ 450,965
-----------
-----------
<FN>
* ESTIMATED OWNERSHIP PERCENTAGE AS OF DECEMBER 31, 1993. OWNERSHIP PERCENTAGE
AT PROJECT COMPLETION IS EXPECTED TO BE APPROXIMATELY 75%.
- -----------------------------------------------------------------------------
In 1988, Oglethorpe acquired from GPC an undivided ownership interest in
the Rocky Mountain Project, a pumped storage hydroelectric facility (Rocky
Mountain). Under the Rocky Mountain agreements, Oglethorpe assumed
responsibility for construction of the facility, which construction was
commenced by GPC. Under the agreements, GPC retained its current investment in
Rocky Mountain. The ultimate ownership interests of Oglethorpe and GPC in the
facility will be based on the ratio of each party's direct construction costs to
total project direct construction costs with certain adjustments. It is expected
that the ownership interests of Oglethorpe and GPC in Rocky Mountain at project
completion will be approximately 75% and 25%, respectively. Rocky Mountain is
subject to a license issued by FERC to Oglethorpe and GPC. This license requires
that construction be completed by June 1, 1996. The current schedule anticipates
commercial operation in early 1995. Rocky Mountain was approximately 90%
complete as of December 31, 1993.
Oglethorpe is financing its share of Rocky Mountain from the proceeds of an
REA-guaranteed loan funded through the FFB. As of December 31, 1993, a total of
approximately $459,000,000 remained available to be drawn as permanent financing
for Rocky Mountain. Such amount is considered more than adequate by Oglethorpe
to complete the project. The obligation to advance funds under the FFB loan
commitment, however, is subject to certain conditions, including the requirement
that Oglethorpe maintain an annual TIER of at least 1.0 and that the REA shall
not have determined that there has occurred any material adverse change in the
assets, liabilities, operations, or financial condition of Oglethorpe or any
circumstances involving the nature or operation of the business of Oglethorpe.
In management's opinion, no such material adverse change has occurred.
Oglethorpe is engaged in a continuous construction program and as of
December 31, 1993, estimates property additions (including capitalized interest)
to be approximately $284,000,000 in 1994, $204,000,000 in 1995 and $148,000,000
in 1996, primarily for construction of Rocky Mountain and replacements and
additions to generation and transmission facilities.
Primarily as a result of its ownership of a majority interest in Rocky
Mountain, Oglethorpe has determined that the Pickens County Pumped Storage
Hydroelectric Project is not needed within its present planning horizon.
Accordingly, Oglethorpe is amortizing the accumulated project costs in excess of
the value of the land purchased. The remaining unamortized project costs of
approximately $18,314,000 are reflected as deferred charges on the accompanying
balance sheets. Oglethorpe's Board of Directors has authorized that these
projects costs be amortized and fully recovered through future rates over a
period of 15 years beginning in 1992.
In April 1992, Oglethorpe sold to three purchasers certain of the income
tax benefits associated with Scherer Unit No. 1 and related common facilities
pursuant to the safe harbor lease provisions of the Economic Recovery Tax Act of
1981. Oglethorpe received a total of approximately $110,000,000 from the safe
harbor lease transactions. Oglethorpe accounts for the proceeds as a deferred
credit, sale of income tax benefits, and is amortizing the amount over the 20-
year term of the leases.
In October 1989, Oglethorpe sold to GPC a 24.45% ownership interest in the
Plant Scherer common facilities as required under the Plant Scherer Purchase and
Ownership Agreement to adjust its ownership in the Scherer units. Oglethorpe
realized a gain on the sale of $50,600,000. The REA and Oglethorpe's Board of
Directors approved a plan whereby this gain was deferred and is being amortized
over 60 months beginning in October 1989.
44
Oglethorpe's proportionate share of direct expenses of joint operation of
the above plants is included in the corresponding operating expense captions
(e.g., fuel, production or depreciation) on the accompanying statements of
revenues and expenses.
7. INVENTORIES:
Oglethorpe maintains inventories of fossil fuels for its generation plant
and spare parts for certain of its generation and transmission plant. These
inventories are stated at weighted average cost on the accompanying balance
sheets.
For its co-owned generating plants, Oglethorpe accounts for inventories on
the basis of information furnished by its operating agent, GPC. GPC has
historically accounted for spare parts at its generating plants on an expensed-
as-purchased basis. Prior to the commercial operation of Vogtle Unit No. 1 in
1987, GPC established a spare parts inventory for that generating facility and
used an expensed-as-consumed method of inventory accounting. Subsequently, the
spare parts inventories at Plants Hatch, Wansley and Scherer were converted to
an expensed-as-consumed method. In connection with these conversions, other
income totaling $18,877,000 was recorded by Oglethorpe in 1988 and 1989.
In 1992, GPC completed a study the objective of which was to determine the
original accounting for spare parts inventory at all of its generating plants,
including Plants Hatch, Wansley and Scherer. As a result of this study,
Oglethorpe recorded an adjustment of $4,827,000 to the original conversion which
reduced other income and plant investment.
A detail of Oglethorpe's investment in inventories at December 31, 1993 and
1992 is as follows:
- -----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992
- -----------------------------------------------------------------------------
Fossil fuels:
Plant Scherer $ 13,481 $ 15,366
Plant Wansley 2,264 7,733
Plant Wansley Combustion Turbine 96 113
Other generation plant fuel oils 361 121
------- -------
Total fossil fuels 16,202 23,333
------- -------
Spare parts:
Plant Vogtle 23,173 24,892
Plant Hatch 22,947 18,125
Plant Wansley 8,415 8,070
Plant Scherer 5,947 5,513
Plant Tallassee 86 86
Transmission plant 9,672 13,606
General plant 26 15
------- -------
Total spare parts 70,266 70,307
------- -------
Total inventories $ 86,468 $ 93,640
------- -------
------- -------
- -----------------------------------------------------------------------------
8. EMPLOYEE BENEFIT PLANS:
Oglethorpe has a noncontributory defined benefit pension plan covering
substantially all employees. Oglethorpe's pension cost was approximately
$1,038,000 in 1993, $362,000 in 1992 and $1,113,000 in 1991. For 1992, pension
cost was reduced by $539,000 by a net gain from a plan curtailment. The plan
curtailment resulted from a workforce reduction undertaken in the second quarter
of 1992. Plan benefits are based on years of service and the employee's
compensation during the last ten years of employment. Oglethorpe's funding
policy is to contribute annually an amount not less than the minimum required by
the Internal Revenue Code and not more than the maximum tax deductible amount.
The plan's funded status and pension cost recognized in Oglethorpe's
financial statements as of December 31, 1993 and 1992 were as follows:
- -----------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1992
- -----------------------------------------------------------------------------
Actuarial present value
of accumulated plan benefits:
Vested $ 5,237 $ 3,385
Nonvested 407 344
------ ------
$ 5,644 $ 3,729
------ ------
------ ------
Projected benefit obligation $(9,920) $(6,973)
Plan assets at fair value 6,911 6,364
------ ------
Projected benefit obligation in
excess of plan assets (3,009) (609)
Unrecognized net loss (gain) from
past experience different from
that assumed and effects of
changes in assumptions 390 (1,013)
Prior service cost not yet recognized
in net periodic pension cost 693 747
Unrecognized net asset at transition
date being recognized over 19 years (145) (158)
------ ------
Pension accrual $(2,071) $(1,033)
------ ------
------ ------
Pension cost was comprised of the
following:
Service cost -- benefits earned
during the year $ 884 $ 854
Interest cost on projected benefit
obligation 617 535
Actual return on plan assets (698) (424)
Net amortization and deferral 247 (64)
Net gain from a plan curtailment (12) (539)
------ ------
Net pension cost $ 1,038 $ 362
------ ------
------ ------
- -----------------------------------------------------------------------------
The discount rate and rate of increase in future compensation levels used
in determining the actuarial present value of the projected benefit obligations
shown above were 7.5% and 5.0% in 1993, and 8.5% and 5.5% in 1992, respectively.
The expected long-term rate of return on plan assets was 8% in 1993 and 1992,
and the discount rate used in determining the pension expense was 8.5% in 1993
and 1992.
45
Oglethorpe has a contributory employee thrift plan covering substantially
all employees. Employee contributions to the plan may be invested in one or more
of three funds. The employee may contribute up to 10% of his compensation.
Oglethorpe will match the employee's contribution up to one-half of the first 6%
of the employee's compensation, as long as there is sufficient net margin to do
so. Oglethorpe's contributions to the plan were approximately $503,000 in 1993,
$503,000 in 1992 and $491,000 in 1991.
In December 1990, the FASB issued Statement No. 106 on postretirement
benefits other than pensions. The new statement requires the accrual of the
expected cost of such benefits during the employees' years of service.
Oglethorpe has no postretirement benefits other than pensions available to
retirees.
9. NUCLEAR INSURANCE:
GPC, on behalf of all the co-owners of Plants Hatch and Vogtle, is a member
of Nuclear Mutual Limited (NML), a mutual insurer established to provide
property damage insurance coverage in an amount up to $500,000,000 for members'
nuclear generating facilities. In the event that losses exceed accumulated
reserve funds, the members are subject to retroactive assessments (in proportion
to their participation in the mutual insurer). The portion of the current
maximum assessment for GPC that would be payable by Oglethorpe, based on
ownership share adjusted for sell-back, is limited to approximately $8,600,000
for each nuclear incident.
GPC, on behalf of all the co-owners of Plants Hatch and Vogtle, is also a
member of Nuclear Electric Insurance Limited (NEIL), a mutual insurer, and has
coverage with American Nuclear Insurers and Mutual Atomic Energy Liability
Underwriters, which provide insurance to cover decontamination, debris removal
and premature decommissioning as well as excess property damage to nuclear
generating facilities of up to $2,250,000,000 for losses in excess of the
$500,000,000 NML coverage described above. Under the NEIL policy, members are
subject to retroactive assessments in proportion to their participation if
losses exceed the accumulated funds available to the insurer under the policy.
The portion of the current maximum assessment for GPC that would be payable by
Oglethorpe, based on ownership share adjusted for sell-back, is limited to
approximately $8,000,000 for each nuclear incident.
For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies issued or
annually renewed on or after April 2, 1991 shall be dedicated first for the sole
purpose of placing the reactor in a safe and stable condition after an accident.
Any remaining proceeds are next to be applied toward the costs of
decontamination and debris removal operations ordered by the NRC, and any
further remaining proceeds are to be paid either to the company or to its bond
trustees as may be appropriate under the policies and applicable trust
indentures.
The Price-Anderson Act, as amended in 1988, limits public liability claims
that could arise from a single nuclear incident to $9,400,000,000, which amount
is to be covered by private insurance and agreements of indemnity with the NRC.
Such private insurance (in the amount of $200,000,000 for each plant, the
maximum amount currently available) is carried by GPC for the benefit of all the
co-owners of Plants Hatch and Vogtle. Agreements of indemnity have been entered
into by and between each of the co-owners and the NRC. In the event of a nuclear
incident involving any commercial nuclear facility in the country involving
total public liability in excess of $200,000,000, a licensee of a nuclear power
plant could be assessed a deferred premium of up to $79,275,000 per incident for
each licensed reactor operated by it, but not more than $10,000,000 per reactor
per incident to be paid in a calendar year. On the basis of its sell-back
adjusted ownership interest in four nuclear reactors, Oglethorpe could be
assessed a maximum of $89,320,000 per incident, but not more than $11,270,000 in
any one year.
Oglethorpe participates in an insurance program for nuclear workers that
provides coverage for worker tort claims filed for bodily injury caused at
commercial nuclear power plants. In the event that claims for this insurance
exceed the accumulated reserve funds, Oglethorpe could be subject to a total
maximum assessment of $3,750,000.
10. POWER PURCHASE AGREEMENTS:
Oglethorpe has entered into long-term power purchase agreements with GPC,
Big Rivers Electric Corporation (Big Rivers), and Entergy Power, Inc. (EPI).
Under the agreement with GPC, Oglethorpe will purchase on a take-or-pay basis
1,250 megawatts (MW) of capacity through the period ending December 31, 2001,
subject to reductions or extension with proper notice. The Big Rivers agreement
commenced in August 1992 and is effective through July 2002. Oglethorpe is
obligated under this agreement to purchase on a take-or-pay basis 100 MW of firm
capacity and certain minimum energy amounts associated with that capacity. The
EPI agreement commenced in July 1992, has a term of ten years and represents a
take-or-pay commitment by Oglethorpe to purchase 100 MW of capacity. The EPI
contract is subject to approval by REA.
Oglethorpe has a contract with Hartwell Energy Limited Partnership
(Hartwell), a partnership 50% owned by Destec Energy, Inc. and 50% owned by
American National Power, Inc., a subsidiary of National Power, PLC, for the
purchase of approximately 300 MW of capacity from two 150 MW gas-fired turbine
generating units, now under construction, for a 25-year period commencing no
later than June 1994. Under the terms of this contract, Oglethorpe does not have
responsibility for constructing or financing this project.
46
As of December 31, 1993, Oglethorpe's minimum purchase commitments under
the above agreements, without regard to capacity reductions or adjustments for
changes in costs, for the next five years are as follows:
- --------------------------------------------------------------------------------
Year Ending December 31. (dollars in thousands)
- --------------------------------------------------------------------------------
1994 $ 140,009
1995 150,956
1996 154,976
1997 159,296
1998 163,311
- --------------------------------------------------------------------------------
Oglethorpe's power purchases from these agreements amounted to
approximately $192,059,000 in 1993, $192,321,000 in 1992 and $88,500,000 in
1991.
11. QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial information for 1993 and 1992 is as follows:
- --------------------------------------------------------------------------------
First Second Third Fourth
(dollars in thousands) Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
1993
Operating revenues $272,143 $283,319 $284,737 $260,461
Operating margin 93,807 85,945 76,515 68,025
Net margin 30,090 10,020 (43) (14,346)
1992
Operating revenues $260,817 $272,307 $290,845 $260,794
Operating margin 97,630 91,331 93,455 92,375
Net margin 21,083 15,899 20,387 (29,897)
- --------------------------------------------------------------------------------
Oglethorpe's business is influenced by seasonal weather conditions. The
negative net margin for the fourth quarter of 1993 was attributable to the
deferral of excess margins and to the incurrence of certain non-recurring
expenses. The negative net margin for the same period of 1992 was primarily due
to the deferral of excess margins. For a discussion of the amounts of excess
margins deferred see Note 1.
47
REPORT OF MANAGEMENT
The management of Oglethorpe Power Corporation has prepared this report and
is responsible for the financial statements and related information. These
statements were prepared in accordance with generally accepted accounting
principles appropriate in the circumstances and necessarily include amounts that
are based on best estimates and judgements of management. Financial information
throughout this annual report is consistent with the financial statements.
Oglethorpe maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the books and records
reflect only authorized transactions. Limitations exist in any system of
internal control based upon the recognition that the cost of the system should
not exceed its benefits. Oglethorpe believes that its system of internal
accounting control, together with the internal auditing function, maintains
appropriate cost/benefit relations.
Oglethorpe's system of internal controls is evaluated on an ongoing basis
by its qualified internal audit staff. The Corporation's independent public
accountants (Arthur Andersen & Co.) also consider certain elements of the
internal control system in order to determine their auditing procedures for the
purpose of expressing an opinion on the financial statements.
Arthur Andersen & Co. also provides an objective assessment of how well
management meets its responsibility for fair financial reporting. Management
believes that its policies and procedures provide reasonable assurance that
Oglethorpe's operations are conducted with a high standard of business ethics.
In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flow
of Oglethorpe Power Corporation.
/s/T.D. Kilgore
T.D. Kilgore
President and Chief Executive Officer
/s/Eugen Heckl
Eugen Heckl
Senior Vice President and
Chief Financial Officer
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Oglethorpe Power Corporation:
We have audited the accompanying balance sheets and statements of
capitalization of Oglethorpe Power Corporation (a Georgia corporation) as of
December 31, 1993 and 1992 and the related statements of revenues and expenses,
patronage capital, and cash flows for each of the three years in the period
ended December 31, 1993. These financial statements and the schedules referred
to below are the responsibility of Oglethorpe's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standard require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit included examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements (pages 33 through 47) referred to
above present fairly, in all material respects, the financial position of
Oglethorpe Power Corporation as of December 31, 1993 and 1992 and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1993 in conformity with generally accepted accounting
principles.
As explained in Note 1 of notes to financial statements, effective
January 1, 1993, Oglethorpe Power Corporation changed its method of accounting
for income taxes.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index in Item
14 are presented for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, fairly state in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
/s/Arthur Andersen & Co.
Arthur Andersen & Co.
Atlanta Georgia,
February 11, 1994.
48
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) IDENTIFICATION OF DIRECTORS:
Oglethorpe is governed by a Board of 39 Directors, 13 of whom are elected
each year for a three-year term. Each of the 39 Members nominates one Director
who must also be on the Member's Board of Directors. The Directors are then
elected by the Members at their annual meeting. The Members also elect Alternate
Directors. Each Alternate Director must serve as the manager of a Member to be
eligible to serve as an Alternate Director. Under Oglethorpe's Bylaws, Alternate
Directors may attend all Board meetings, but can be counted for quorum purposes
and can exercise the powers and duties of a Director only during the period when
the directorship for whom he is the alternate is vacant or at any meeting of the
Board of Directors when the Director for whom he is the alternate is absent. The
Board of Directors generally meets monthly.
Six standing committees are appointed by the Chairman of the Board and
include both Directors and Alternate Directors. Two of these Committees, the
External Affairs Committee and the Human Resources Management Committee, are
joint committees of Oglethorpe and Georgia Electric Membership Corporation
("GEMC"), an affiliated trade organization, and include directors of GEMC.
Special committees, as deemed necessary, are also appointed by the Chairman of
the Board or the Board of Directors. Committee recommendations and management
recommendations, subject to the approval of the Board of Directors, determine
the policies and activities of Oglethorpe.
The Directors and Alternate Directors of Oglethorpe are as follows:
ALTAMAHA EMC
Jmon Warnock--Director, age 68, is a farmer. He has served on the Board of
Directors of Oglethorpe since September 1974. His present term as a Director
will expire in March 1995. He is a member of the Finance Committee of
Oglethorpe. Mr. Warnock is the President of Altamaha EMC and a Director of GEMC.
James D. Musgrove--Alternate Director, age 47, is the General Manager of
Altamaha EMC. He has served as an Alternate Director of Oglethorpe since May
1989, with his present term to expire in March 1995. Mr. Musgrove is a Director
of Montgomery County Bankshares in Ailey, Georgia.
AMICALOLA EMC
Charles R. Fendley--Director, age 48, is a Vice-President of Jasper Yarn
Processing, Inc., which processes yarn. He has served on the Board of Directors
of Oglethorpe since November 1993, with his present term to expire in March
1995. Mr. Fendley is the President of Amicalola EMC. He is also a Director of
GEMC and a Director of Crescent Bank & Trust Co. in Jasper, Georgia.
John S. Dean, Sr.--Alternate Director. For a description of Mr. Dean's
background and experience, see "Identification of Executive Officers and Senior
Executives" below.
49
CANOOCHEE EMC
George C. Martin--Director, age 76, is the owner and operator of a farm in
Ellabell, Bryan County, Georgia where he raises beef cattle. He also manages
timberland in Bryan County, Georgia and rental properties in Savannah and
Pembroke, Georgia. He has served on the Board of Directors of Oglethorpe since
March 1977, with his present term to expire in March 1995. From March 1978 to
March 1984, he served as Vice President of Oglethorpe.
Donald F. Kennedy--Alternate Director, age 64, is the General Manager of
Canoochee EMC. He has served as an Alternate Director of Oglethorpe since 1985,
with his present term to expire in March 1995. He is a member of the
GEMC/Oglethorpe External Affairs Committee. Mr. Kennedy is also a Director of
the Tattnall Bank in Reidsville, Georgia.
CARROLL EMC
J. G. McCalmon--Director, age 76, is the owner of a farm in Carrollton,
Georgia, where he raises chickens and beef cattle. He has served on the Board of
Directors of Oglethorpe since September 1974, with his present term to expire in
March 1996. He is Chairman of the Board of Carroll EMC. Mr. McCalmon is also a
Director of GEMC, a Director of the Farm Bureau, a Director of Carroll County
Sales Barn, and a Director of the Carroll County Chamber of Commerce.
Gary M. Bullock--Alternate Director, age 52, is President and Chief
Executive Officer of Carroll EMC. He has served as an Alternate Director of
Oglethorpe since June 1978, and his present term will expire in March 1996. He
is a member of the Operations Committee. Mr. Bullock is also the Secretary of
Southeastern Data Cooperative, Inc., a member of the Institute of Electrical and
Electronic Engineers, a Trustee for the GEMC Workers' Compensation Fund, a
Director for the Georgia Council of Farmer Cooperatives, a Director of the
Carroll County Chamber of Commerce, and a Director of Carrollton Federal Savings
& Loan Association in Carrollton, Georgia.
CENTRAL GEORGIA EMC
D. A. Robinson, III--Director, age 53, is the owner and operator of a dairy
farm in Griffin, Georgia. He has served on the Board of Directors of Oglethorpe
since March 1984, and his term will expire in March 1995. He serves as
Secretary-Treasurer of Central Georgia EMC.
George L. Weaver--Alternate Director, age 46, has been the President of
Central Georgia EMC since 1989. Prior to that time he was General Manager,
Manager of Accounting, and Financial Manager. He has served as an Alternate
Director of Oglethorpe since 1983, and his present term will expire in March
1995. He is a member of the Operations Committee. He is also a Director of
Federated Rural Electric Insurance Corporation in Shawnee Mission, Kansas and
serves on the Advisory Board of NationsBank of GA, N.A.
COASTAL EMC
James E. Estes--Director, age 58, has served on the Board of Directors of
Oglethorpe since March 1982, with his present term to expire in March 1994. He
is a member of the Executive Committee. He is also Vice President of the Board
of Directors of Coastal EMC. Additionally, he works in avionic maintenance for
Georgia Air National Guard, is President of Ways Company, Inc., a real estate
development company in Richmond Hill, Georgia, and is a proprietor of Estes Tax
Service, an income tax service in Richmond Hill, Georgia.
Wayne Collins--Alternate Director, age 43, is the General Manager of
Coastal EMC and has served as an Alternate Director of Oglethorpe since March
1977. His present term as an Alternate Director will expire in March 1994.
50
COBB EMC
Larry N. Chadwick--Director, age 53, is the owner of Chadwick's Hardware in
Woodstock, Georgia. He has served on the Board of Directors of Oglethorpe since
July 1989, with his present term to expire in March 1995. He is Chairman of the
Board of Cobb EMC. He is Chairman of the Operations Committee.
Dwight Brown--Alternate Director, age 48, is President and Chief
Executive Officer of Cobb EMC. He previously served as Vice President of
Engineering and Operations for Cobb EMC. He has served as an Alternate Director
of Oglethorpe since October 1993, with his present term to expire in March 1995.
COLQUITT EMC
Simmie King--Director, age 50, is the owner and operator of a farm. He has
served on the Board of Directors of Oglethorpe since March 1991, with his
present term to expire in March 1996.
R. L. Gaston--Alternate Director, age 46, is the General Manager of
Colquitt EMC. From January 1985 to January 1990, he was Manager of Engineering
and Operations for Colquitt EMC. He has served as an Alternate Director of
Oglethorpe since February 1990, with his present term to expire in March 1996.
He is currently a member of the Planning and Construction Committee.
COWETA-FAYETTE EMC
W. F. Farr--Director, age 81, is a banker. He has served on the Board of
Directors of Oglethorpe since March 1975, with his present term to expire in
March 1995. He is currently the Chairman of the GEMC/Oglethorpe Human Resources
Management Committee. He has been President of Coweta-Fayette EMC since 1974. He
previously served as President of the Fayette State Bank in Peachtree City,
Georgia and as a Director and Consultant for Citizens and Southern National
Bank, South Metro Board in Atlanta, Georgia. Since June 1985, he has been the
owner and President of Pioneer Financial Associates, Inc. in Peachtree City,
Georgia.
Michael C. Whiteside--Alternate Director, age 51, has been General Manager
of Coweta-Fayette EMC since August 1983. He previously served as Administrative
Assistant of Coweta-Fayette EMC. He has served as an Alternate Director of
Oglethorpe since September 1983, with his present term to expire in March 1995.
He is currently a member of Oglethorpe's Planning and Construction Committee.
EXCELSIOR EMC
Vacant--Director
Gary T. Drake--Alternate Director, age 45, is the General Manager of
Excelsior EMC. He has served as an Alternate Director of Oglethorpe since
January 1979, with his present term to expire in March 1994. He was
Secretary-Treasurer of Oglethorpe from March 1984 through March 1989. He is
currently a member of the Operations Committee. Mr. Drake is also a Director of
GEMC and a Director of Pineland State Bank in Metter, Georgia.
FLINT EMC
Jeff S. Pierce, Jr.--Director, age 62, has served on the Board of Directors
of Oglethorpe since June 1992, with his present term to expire in March 1994.
He has served as a Director of Flint EMC since 1964. He previously served 28
years as Chief Executive Officer and as a Director for the First Federal
Savings and Loan Association in Warner Robins, Georgia. He is also a Director
of GEMC.
Harold B. Smith--Alternate Director, age 57, has been employed as General
Manager of Flint EMC since November 1978. He has served as an Alternate Director
of Oglethorpe since 1978, with his present term to expire in March 1994. He is
currently a member of the Planning and Construction Committee of Oglethorpe and
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Chairman of the GEMC/Oglethorpe External Affairs Committee. Mr. Smith is also
the Chairman of the Board of the Food and Energy Council.
GRADY EMC
Donald C. Cooper--Director, age 63, is the owner, operator and President of
Cooper Farms, Inc., a farm in Grady County, Georgia where he grows row crops and
raises cattle. He has served on the Board of Directors of Oglethorpe since March
1975, with his present term to expire in March 1996.
Thomas A. Rosser--Alternate Director, age 46, has been employed as General
Manager of Grady EMC since January 1992. He has served as an Alternate Director
of Oglethorpe since January 1992, with his present term to expire in March 1996.
Mr. Rosser is also a Director of the Cairo Banking Company in Cairo, Georgia.
GREYSTONE POWER CORPORATION, AN EMC
J. Calvin Earwood--Director. For a description of Mr. Earwood's background
and experience, see "Identification of Executive Officers and Senior Executives"
below.
Tim B. Clower--Alternate Director, age 57, is President and Chief Executive
Officer of GreyStone Power Corporation, an EMC. He has served as an Alternate
Director of Oglethorpe since September 1974, with his present term to expire in
March 1995. Mr. Clower serves on the Boards of Directors of Citizens & Merchants
State Bank and GEMC Workers' Compensation Fund.
HABERSHAM EMC
Herbert Church--Director, age 57, is a logging contractor. He has served on
the Board of Directors of Oglethorpe since August 1991, with his present term to
expire in March 1996. He has been a Director of Habersham EMC since 1977.
William E. Canup--Alternate Director, age 58, is the General Manager of
Habersham EMC. Mr. Canup was Manager of Engineering/Operations of Habersham EMC
from 1979 to 1984 and served as Assistant Manager of Habersham EMC from 1984 to
1986. He has served as an Alternate Director of Oglethorpe since July 1986, with
his present term to expire in March 1996.
HART EMC
Mac F. Oglesby--Director, age 61, served as Assistant Secretary-Treasurer
of Hart EMC from July 1986 through December 1987, when he was appointed
President. He has served as a Director of Oglethorpe since February 1987, with
his present term to expire in March 1994. He is currently a member of the
Planning and Construction Committee of Oglethorpe. He also was a U.S. Postal
Service Rural Carrier for 30 years.
Grooms Johnson--Alternate Director, age 64, has been the General Manager
of Hart EMC since March 1991. Prior to that time, he served as Assistant Manager
of Hart EMC. He has served as an Alternate Director of Oglethorpe since March
1991, with his present term to expire in March 1994. Mr. Johnson is also a
Director of Bank of Hartwell in Hartwell, Georgia.
IRWIN EMC
Benny W. Denham--Director. For a description of Mr. Denham's background and
experience, see "Identification of Executive Officers and Senior Executives"
below.
Harold Randall Crenshaw--Alternate Director, age 42, has been the General
Manager of Irwin EMC since February 1988. He has served as an Alternate Director
of Oglethorpe since February 1988, with his present term to expire in March
1995. He is a member and past Vice Chairman of the Finance Committee of
Oglethorpe.
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JACKSON EMC
E. L. McLocklin--Director, age 81, is a cattle farmer. He is also Chairman
of the Board of Directors of Jackson EMC. He has served as a Director of
Oglethorpe since October 1989, with his present term to expire in March 1996.
Randall Pugh--Alternate Director, age 50, is President and Chief Executive
Officer of Jackson EMC. From August 1984 to January 1988 he was General Manager
of Jackson EMC. He was also General Manager of Walton EMC from 1977 to August
1984. He has served as an Alternate Director of Oglethorpe since 1977. His
present term as Alternate Director will expire in March 1996. He is currently
the Chairman of the Finance Committee. Mr. Pugh is also a Director of the First
National Bank of Jackson County in Gainesville, Georgia.
JEFFERSON EMC
Sam Rabun--Director, age 62, is part owner of a livestock farm. He has
served as a Director of Oglethorpe since March 1993 with his present term to
expire in March 1996. Mr. Rabun is the President of Jefferson EMC.
Ralph E. Lewis--Alternate Director, age 49, has been the General Manager of
Jefferson EMC since 1979. He has served as an Alternate Director of Oglethorpe
since 1979, with his present term to expire in March 1996. He is also Vice
President of the GEMC Workers' Compensation Fund.
LAMAR EMC
E. J. Martin, Jr.--Director, age 66, is the owner of the Country Kitchen
restaurant in Barnesville, Georgia. He is a retired tax assessor and appraiser
for Lamar County. He has served on the Board of Directors of Oglethorpe since
March 1982, with his present term to expire in March 1994. He is a member of the
GEMC/Oglethorpe Human Resources Management Committee. Mr. Martin is the
President of Lamar EMC and a Director of GEMC.
J. Raleigh Henry--Alternate Director, age 43, is General Manager of Lamar
EMC. Prior to becoming General Manager, he served as Office Manager of Lamar
EMC. He has served as an Alternate Director of Oglethorpe since 1990, with his
present term to expire in March 1994.
LITTLE OCMULGEE EMC
J. D. Williams--Director, age 81, is currently retired. He has served on
the Board of Directors of Oglethorpe since March 1986, with his present term to
expire in March 1994. He is a member of Oglethorpe's Planning and Construction
Committee. He previously served as President, then as Vice President of Little
Ocmulgee EMC. Mr. Williams is also a Director of Security State Bank in McRae,
Georgia, and a Director of Farmers State Bank in Dublin, Georgia.
A. Arnold Horton--Alternate Director, age 47, is the General Manager of
Little Ocmulgee EMC. He previously served as Manager of Engineering and
Operations, and has been with Little Ocmulgee EMC since 1983. He has served as
the Alternate Director of Oglethorpe since March 1993, with his present term to
expire in March 1994.
MIDDLE GEORGIA EMC
Ronnie Fleeman--Director, age 59, is a self-employed land and timber
developer. He has served on the Board of Directors of Oglethorpe since 1990. His
present term as a Director will expire in March 1995. He is a member of the
GEMC/Oglethorpe Human Resources Management Committee.
Charles Hugh Richardson--Alternate Director, age 40, has been General
Manager of Middle Georgia EMC since June 1983. From January 1983 to June 1983,
he was Acting General Manager of Middle Georgia EMC, and
53
from September 1976 to January 1983, he was Manager of Engineering at Middle
Georgia EMC. He has served as an Alternate Director of Oglethorpe since 1983,
with his present term to expire in March 1995.
MITCHELL EMC
D. Lamar Cooper--Director, age 58, operates a dairy farm. He has served on
the Board of Directors of Oglethorpe since September 1974. His present term as a
Director will expire in March 1996. He is a member of the Operations Committee
of Oglethorpe.
Gerald Freehling--Alternate Director, age 50, has been General Manager of
Mitchell EMC since September 1987. Since that time, he has served as an
Alternate Director of Oglethorpe. His present term expires in March 1996. He
previously served as General Manager of Steuben Rural Electric Cooperative in
Bath, New York.
OCMULGEE EMC
Barry H. Martin--Director, age 45, is a farmer. He has served on the Board
of Directors of Oglethorpe since March 1983. His present term as a Director
expires in March 1994. Mr. Martin is the President of Ocmulgee EMC.
Dennis Grenade--Alternate Director, age 53, has been employed by Ocmulgee
EMC since December 1957. He has been General Manager since October 1987 and was
previously Acting Manager and Manager of Operations. He has served as an
Alternate Director since October 1987 and his present term expires in March
1994. He is a member of the Finance Committee.
OCONEE EMC
John B. Floyd, Jr.--Director, age 51, has served on the Board of Directors
of Oglethorpe since March 1980, with his present term to expire in March 1996.
He is currently a member of the Finance Committee. He is the Vice Chairman of
the Board of Oconee EMC and is a Director of CFC. Mr. Floyd also serves as First
Vice President of The Four County Bank, as Vice President of The Four County
Insurance Agency, Inc., and as President of Twiggs Gin, Inc., a home
construction company in Allentown, Georgia.
Preston L. Johnson--Alternate Director, age 59, is President and Chief
Executive Officer of Oconee EMC. He has served as an Alternate Director of
Oglethorpe since September 1974, with his present term to expire in March 1996.
He was Secretary-Treasurer of Oglethorpe from September 1974 to March 1984.
OKEFENOKE RURAL EMC
Steve Rawl, Sr.--Director, age 47, has been President of Rawls, Inc., a
gift shop, since 1972. He has served as a Director of Oglethorpe since September
1993, with his present term to expire in March 1994. He is also a Director of
GEMC.
W. Don Holland--Alternate Director, age 43, is General Manager of Okefenoke
Rural EMC. He has served as an Alternate Director of Oglethorpe since 1979, with
his present term to expire in March 1994. He was formerly General Manager of
Little Ocmulgee EMC. He is currently Chairman of the Planning and Construction
Committee of Oglethorpe.
PATAULA EMC
James Grubbs--Director, age 71, is a farmer. He is involved with fertilizer
and chemical sales, and operates an air spray service and a peanut purchasing
plant. He has served on the Board of Directors of Oglethorpe since March 1983.
His present term as a Director will expire in March 1996. He is a member of the
Finance Committee of Oglethorpe.
54
Gary W. Wyatt--Director, age 41, is General Manager of Pataula EMC. He has
served as an Alternate Director of Oglethorpe since July 1986, with his present
term to expire in March 1996. He previously was Operations Manager and
Assistant Operations Superintendent of Coosa Valley Electric Cooperative.
PLANTERS EMC
Sammy M. Jenkins--Director, age 67, is in the farm machinery business and
has been President of Jenkins Ford Tractor Co., Inc. since 1973. He has served
on the Board of Directors of Oglethorpe since March 1988, with his present term
to expire in March 1994. He is Vice President of Planters EMC. He was Vice
Chairman of the Board of Oglethorpe from March 1989 to March 1990.
Ellis H. Lovett--Alternate Director, age 58, is General Manager of Planters
EMC and has served as an Alternate Director of Oglethorpe since 1983. His
present term as an Alternate Director will expire in March 1994. He is a member
of the Operations Committee of Oglethorpe.
RAYLE EMC
J. M. Sherrer--Director, age 58, is the owner of a grocery, hardware, gas
and feed store. He has served on the Board of Directors of Oglethorpe since
September 1993, with his present term to expire in March 1994.
Wayne Poss--Alternate Director, age 48, has served as General Manager of
Rayle EMC since December 1992. Prior to that time, he served as Manager of
Engineering for Rayle EMC. He has served as an Alternate Director to Oglethorpe
since February 1993, with his present term to expire in March 1994. He is a
member of the GEMC/Oglethorpe External Affairs Committee.
SATILLA RURAL EMC
Jack D. Vickers--Director, age 76, is the owner and operator of a farm in
Coffee County, Georgia. He has served on the Board of Directors of Oglethorpe
since March 1975. His present term will expire in March 1994.
R. Lehman Lanier--Alternate Director, age 74, is President and Chief
Executive Officer of Satilla Rural EMC. He has served as an Alternate Director
of Oglethorpe since September 1974, and his present term expires in March 1994.
He is a member of the Operations Committee of Oglethorpe. He is also a Director
of Southeastern Data Cooperative, Inc.
SAWNEE EMC
C. W. Cox, Jr.--Director, age 66, is the owner of Cox Digging & Grading, a
general contracting sole proprietorship. He has served as a member of the Board
of Directors of Oglethorpe since February 1987, with his present term to expire
in March 1994. He is a member of the Planning and Construction Committee.
Michael A. Goodroe--Alternate Director, age 37, is Executive Vice President
and General Manager of Sawnee EMC. He previously served as Assistant General
Manager of Sawnee EMC. He has served as an Alternate Director of Oglethorpe
since 1990, with his present term to expire in March 1994. He is a member of the
GEMC/Oglethorpe External Affairs Committee.
SLASH PINE EMC
Johnnie Crumbley--Director, age 71, is President of Slash Pine EMC. He
retired in 1982 from the Seaboard Coastline System. He has served as a member of
the Board of Directors of Oglethorpe since March 1978, with his present term to
expire in March 1996. He is also a Director of GEMC.
Edward Teston--Alternate Director, age 59, is Manager of Slash Pine EMC. He
has served as an Alternate Director of Oglethorpe since 1985, with his present
term to expire in March 1996.
55
SNAPPING SHOALS EMC
Jarnett W. Wigington--Director, age 61, is a self-employed wallpapering
contractor. He has served on the Board of Directors of Oglethorpe since 1990.
His present term expires in March 1994. He is a member of the Executive
Committee of Oglethorpe.
J. E. Robinson--Alternate Director, age 74, is President, Cheif Executive
Officer and Manager of Snapping Shoals EMC. He has been Manager of Snapping
Shoals EMC since 1953. He has served as an Alternate Director of Oglethorpe
since September 1974, with his present term to expire in March 1994. Mr.
Robinson is also a Director of the First National Bank of Newton County.
SUMTER EMC
Bob Jernigan--Director, age 66, is a manager for Mike L. Moon Enterprises
in Columbus, Georgia, which among other things, is involved in real estate
development and wholesale and retail women's apparel. He has served as a
Director of Oglethorpe since March 1976, with his present term to expire in
March 1996. He served as Vice Chairman of the Board of Directors of Oglethorpe
from March 1990 to March 1993. He is currently a member of the Executive
Committee. He is the President of Sumter EMC and a Director of GEMC.
James T. McMillan--Alternate Director, age 44, has been General Manager of
Sumter EMC since 1984. Prior to that time, he served as Manager of the Staff
Services Department of Sumter EMC, Manager of the Construction and Maintenance
Department of Sumter EMC, and Manager of the Office Services Department of
Sumter EMC. He has served as an Alternate Director of Oglethorpe since 1984,
with his present term to expire in March 1996.
THREE NOTCH EMC
C. Willard Mims--Director, age 47, is a farmer. He has served on the Board
of Directors since 1991, with his present term to expire in March 1996. He is a
member of the GEMC/Oglethorpe External Affairs Committee. He is also a Director
of GEMC.
Carlton O. Thomas--Alternate Director, age 46, has been General Manager of
Three Notch EMC since 1990. Prior to that time, he served as Office Manager of
Three Notch EMC. He has served as an Alternate Director of Oglethorpe since
1990, with his present term to expire in March 1996. He is also a Director of
First Federal Savings Bank of Southwest Georgia.
TRI-COUNTY EMC
James E. Dooley--Director, age 67, is self-employed in the real estate
business. He has served on the Board of Directors of Oglethorpe since November
1986, with his present term to expire in March 1996. Prior to his retirement in
1982, he was employed as a Director in the U.S. Department of Agriculture.
Carol Robertson--Alternate Director, age 45, is the General Manager of
Tri-County EMC. She has served as an Alternate Director of Oglethorpe since July
1988, with her present term to expire in March 1996. She is a member of the
GEMC/Oglethorpe External Affairs Committee.
TROUP EMC
Willis T. Woodruff--Director, age 68, is a self-employed cattleman. He has
served on the Board of Directors of Oglethorpe since March 1987, with his
present term to expire in March 1995. He is also a Director of GEMC.
Wayne Livingston--Alternate Director, age 42, has been the Executive Vice
President and General Manager of Troup EMC since September 1987. Prior to that
time, he was General Manager of Ocmulgee EMC. He has served
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as an Alternate Director of Oglethorpe since 1978, with his present term to
expire in March 1995. He is a member of the Finance Committee.
UPSON COUNTY EMC
Hubert Hancock--Director, age 77, has been President of the Upson County
EMC for the past 33 years. He has served as a Director of Oglethorpe since
September 1974, serving as Vice President from 1975 to 1978, as President from
March 1984 to July 1986, and as Chairman of the Board from July 1986 to March
1989. His present term as Director expires in March 1995, and he currently
serves on the Executive Committee of Oglethorpe. Prior to his involvement with
Oglethorpe and Upson County EMC, Mr. Hancock was a general farmer as well as a
peach farmer and cattle farmer. Mr. Hancock is also a Director of West Central
Georgia Bank in Thomaston, Georgia, Chairman of Upson County Hospital Authority,
and a member of the Thomaston Upson County Industrial Authority.
Walter E. Hammond--Alternate Director, age 62, is General Manager of Upson
County EMC. He has served as an Alternate Director of Oglethorpe since 1978, and
his present term will expire in March 1995.
WALTON EMC
Bob J. Dickens--Director, age 67, retired in 1988 from Thornton Brothers
Paper Company, Inc. in Athens, Georgia. He has served on the Board of Directors
of Oglethorpe since March 1987, and his present term expires in March 1995. He
is a member of Oglethorpe's Operations Committee.
D. Ronnie Lee--Alternate Director, age 45, has been General Manager of
Walton EMC since August 1993. Prior to that time, he served as Manager of
Engineering and Operations from January 1979 to August 1993 for Walton EMC. He
has served as an Alternate Director of Oglethorpe since September 1993, with his
present term to expire in March 1995.
WASHINGTON EMC
W. W. Archer--Director, age 62, is a self-employed insurance agent and
cattle farmer. He has served on Oglethorpe's Board of Directors since September
1987, and his present term expires in March 1995. He is also a Director of the
Bank of Hancock County in Sparta, Georgia.
Robert S. Moore, Sr.--Alternate Director, age 64, has been General Manager
of Washington EMC since April 1982. Prior to that time, he was Assistant General
Manager of Washington EMC. He has served as an Alternate Director of Oglethorpe
since 1982, with his present term to expire in March 1995. He is a member of the
Planning and Construction Committee of Oglethorpe.
(b) IDENTIFICATION OF EXECUTIVE OFFICERS AND SENIOR EXECUTIVES:
Oglethorpe is managed and operated under the direction of a President and
Chief Executive Officer, who is appointed by the Board of Directors. The
executive officers of Oglethorpe and their principal occupations are as follows:
J. Calvin Earwood, Chairman of the Board, age 52, has served as a principal
executive officer of Oglethorpe since March 1984 (from March 1984 to July 1986,
as Vice President; from July 1986 to March 1989, as Vice Chairman of the Board;
and since March 1989, as Chairman of the Board). Mr. Earwood has served as a
Director of Oglethorpe since March 1981, with his present term to expire in
March 1995. He is currently the Chairman of the Executive Committee of
Oglethorpe and a member of the GEMC/Oglethorpe Human Resources Management
Committee. He was previously a member of the Operations Review Committee of
Oglethorpe. From 1965 through 1982, Mr. Earwood was a salesman and part owner
of Builders Equipment Company. Since January 1983 he has been the owner and
President of Sunbelt Fasteners, Inc., which sells specialty tools and fasteners
to the
57
commercial construction trade. He is also Chairman of the Board of Directors of
Community Trust Bank in Hiram, Georgia and a Director of GreyStone Power
Corporation.
Benny W. Denham--Vice Chairman of the Board, age 63, has served as a
principal executive officer of Oglethorpe since March 1993. He has served as a
member of Oglethorpe's Executive Committee and on the Board of Directors of
Oglethorpe since December 1988. His present term will expire in March 1995. He
was previously a member of the Power Planning and Technical Advisory Committee
of Oglethorpe. He is also the past President of GEMC and currently serves on
GEMC's Executive Committee and is a Director of Community National Bank in
Ashland, Georgia. Mr. Denham is a Director of Irwin EMC.
John S. Dean, Sr., Secretary-Treasurer, age 54, has served as
Secretary-Treasurer of Oglethorpe since March 1989. He has served as an
Alternate Director of Oglethorpe since 1975, with his present term to expire in
March 1995. He is currently a member of the Finance Committee and an ex officio
member of the Executive Committee. He previously served on Oglethorpe's
Operations Review Committee. Mr. Dean has been General Manager/Chief Executive
Officer of Amicalola EMC since 1974. Prior to his employment with Amicalola EMC,
he was Controller of Pickens General Hospital. Currently, he is on the Board of
Directors of Southeastern Data Cooperative, Inc., Crescent Bank & Trust Company,
CoBank, and GEMC Workers' Compensation Fund. Mr. Dean has a Bachelor of Arts
degree in Accounting from the University of Georgia.
T. D. Kilgore, President and Chief Executive Officer, age 46, has served as
an executive of Oglethorpe since July 1984 (from July 1984 to July 1986, as
Division Manager, Power Supply; July 1986 to July 1991, as Senior Vice
President, Power Supply; and since July 1991, as President and Chief Executive
Officer). Mr. Kilgore served as Executive Vice President of GEMC from December
1991 to June 1992. He has served as President and Chief Executive Officer of
GEMC from June 1992 until the present. Mr. Kilgore has over 20 years of utility
experience, including five years in senior management positions with Arkansas
Power & Light Co. and seven years as a civilian employee with the Department of
the Army in positions ranging from reliability engineering to construction
management. Mr. Kilgore has served on various industry committees including
Electric Power Research Institute's Board of Directors and its Advanced Power
Systems Division and Coal System Division Advisory Committees. He has also
served on the Boards of Directors of the U.S. Committee for Energy Awareness,
the Advanced Reactor Corporation, on the Edison Electric Institute's Power Plant
Availability Improvement Task Force and the Nuclear Power Oversight Committee,
an organization of industry executives which considers policy issues for the
nation's nuclear power industry. Mr. Kilgore currently serves on the Board of
Directors of the Georgia Chamber of Commerce and on the National Rural Electric
Cooperative Association's Power and Generation Committee. Mr. Kilgore has a BS
degree in mechanical engineering from the University of Alabama, where he has
been recognized as a Distinguished Engineering Fellow, and a ME degree in
industrial engineering from Texas A&M.
The senior executives assisting Mr. Kilgore, their areas of responsibility
and a brief summary of their experience are as follows:
Charles T. Autry, Senior Vice President and General Counsel, age 45, has
served as an executive of Oglethorpe since February 1986 (from February 1986 to
July 1986, as Corporate Counsel; from July 1986 to December 1989, as General
Counsel; from December 1989 to November 1991, as Senior Vice President,
Governmental Affairs and General Counsel; from November 1991 to February 1994,
as Senior Vice President, Corporate Services and General Counsel; and since
February 1994, as Senior Vice President and General Counsel). Prior to that
time, Mr. Autry served as Staff Attorney from August 1979 to January 1985 and as
Corporate Attorney from January 1985 to February 1986. Mr. Autry joined
Oglethorpe in August 1979 after five years of military and private practice
experience. He has been admitted to practice before all State Courts in Georgia
as well as the Federal District Court for the Northern District of Georgia, and
the Fifth and Eleventh Circuit Courts of Appeal and the U. S. Tax Court. He has
a BA degree from the University of Georgia, a JD degree from the University of
Alabama School of Law, a LLM degree in Taxation from Emory University School of
Law, and an MBA degree from Georgia State University.
58
Eugen Heckl, Senior Vice President and Chief Financial Officer, age 59, has
served as an executive of Oglethorpe since March 1975 (from March 1975 to July
1986, as senior finance and accounting executive; from July 1986 to February
1994 as Senior Vice President, Finance; and since February 1994, as Senior Vice
President and Chief Financial Officer). Mr. Heckl has approximately 30 years of
experience, including ten years as a consultant and auditor to electric
utilities with Arthur Andersen & Co. and two years as Secretary-Treasurer of
Davis Brothers, Inc. Mr. Heckl is a Certified Public Accountant in Georgia and
has a BS degree in accounting from Samford University and an MBA degree from
Emory University. Mr. Heckl has served as a Director of the GEMC Federal Credit
Union since 1983, and as its Chief Financial Officer since 1984.
G. Stanley Hill, Senior Vice President, External Affairs, age 58, has
served as an executive of Oglethorpe since October 1975 (from October 1975 to
November 1988, as Director of Planning, Director of Power Supply and Planning,
Division Manager, Power Supply and Engineering, Division Manager, Engineering,
Senior Vice President, Planning and System Operations; from November 1988 to
November 1991, as Senior Vice President, Administration; from November 1991 to
February 1994, as Senior Vice President, Marketing and Customer Service and
since February 1994, as Senior Vice President, External Affairs). Mr. Hill has
approximately 36 years experience with electric utilities, including four years
in the Engineering Department of the South Carolina Public Service Authority and
11 years as engineer and senior engineer with Southern Engineering Company of
Georgia, a consulting engineering firm. Mr. Hill is a registered Professional
Engineer and a certified Cogeneration Professional in Georgia and has a BS
degree in electrical engineering from Clemson University and an MBA degree from
Georgia State University. Mr. Hill is presently an Oglethorpe representative on
the Joint Committee. For information about the Joint Committee, see "CO-OWNERS
OF THE PLANTS AND THE PLANT AND TRANSMISSION AGREEMENTS-The Joint Committee
Agreement" in Item 1.
W. Clayton Robbins, Senior Vice President and Group Executive, Support
Services, age 47, has served as an executive of Oglethorpe since December 1991
(from December 1991 to February 1994, as Vice President, Corporate Performance,
and since February 1994, as Senior Vice President and Group Executive, Support
Services). Prior to that time, Mr. Robbins served as Department Manager, Project
Services, from September 1986 to November 1988; as Program Director, Marketing
Research and Analysis, from November 1988 to December 1989; and as Vice
President, Marketing Research and Analysis, from December 1989 to December 1991.
Before coming to Oglethorpe, Mr. Robbins spent 17 years with the
Stearns-Catalytic World Corporation and various subsidiaries, including 13 years
in management positions responsible for Human Resources, Information Systems,
Contracts, Insurance, Accounting, and Project Controls. Mr. Robbins has a BA
degree in Business Administration from the University of North Carolina at
Charlotte.
David L. Self, Senior Vice President and Group Executive, Generation, age
65, has served as an executive of Oglethorpe since August 1991 (from August 1991
to November 1991, as Senior Vice President, Power Supply; from November 1991 to
February 1994, Senior Vice President, Operations; and since February 1994, as
Senior Vice President and Group Executive, Generation). Mr. Self joined
Oglethorpe in February 1988 as the corporation's on-site representative at Plant
Hatch after 30 years in the United States Navy and five years with Illinois
Power Company. He is a member of the Board of Trustees of Southern Tech
Foundation, Inc. He has a BS degree from Saint Mary's College in California. Mr.
Self is presently the Oglethorpe representative on both the Nuclear Managing
Board and the Plant Scherer Managing Board, and is an Oglethorpe representative
on the Joint Committee. For information about the Managing Boards and the
Joint Committee, see "CO-OWNERS OF THE PLANTS AND THE PLANT AND TRANSMISSION
AGREEMENTS-The Plant Agreements" and "-The Joint Committee Agreement" in Item 1.
Nelson G. Hawk, Vice President and Group Executive, Marketing, age 44,
joined Oglethorpe in February 1994 after almost 24 years of electric utility
experience. Prior to coming to Oglethorpe, he held various management positions
with Florida Power & Light Company and related subsidiaries, including as
Director of Regulatory Affairs at Florida Power & Light from October 1993 to
January 1994; as Director of Market Planning from July 1991 to September 1993;
and as Director of Strategic Business and President of FPL Enersys Services,
Inc. (a utility subsidiary providing energy services to commercial/industrial
customers) from April 1989 to June 1991. Mr. Hawk has a BS degree in Electrical
Engineering from Georgia Institute of Technology and an MBA degree from Florida
International University.
59
Wylie H. Sanders, Vice President and Group Executive, Transmission, age 57,
joined Oglethorpe in January 1994 after 35 years of utility experience,
including 20 years in management positions with Florida Power & Light Company.
Prior to coming to Oglethorpe, he served as Division Commercial Manager from
April 1973 to August 1983; as District General Manager from August 1983 to July
1991; and as Director of Transmission from July 1991 to September 1993 with
Florida Power & Light. Mr. Sanders has a Bachelor's degree in Industrial
Engineering from Georgia Institute of Technology and has participated in Harvard
University's postgraduate Program for Management Development.
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ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for Oglethorpe's President and Chief
Executive Officer and the four most highly compensated senior executives all
compensation paid or accrued for services rendered in all capacities during the
years ended December 31, 1993, 1992 and 1991. Amounts included in the table
under "Bonus" represent payments based on an incentive compensation policy. All
amounts paid under this policy are fully at risk each year and are earned based
upon the achievement of corporate goals and each individual's contribution to
achieving those goals. In conjunction with this policy, base salaries remain
fairly stable and are targeted below the market valuations for similar
positions.
ANNUAL
COMPENSATION
NAME AND ------------ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(3) COMPENSATION
- ------------------ ---- -------- -------- ------------
T. D. Kilgore 1993 $211,250 $ 0 $6,256(1)
President and Chief Executive Officer 1992 195,000 0 5,891
1991 181,147 0 (2)
Eugen Heckl 1993 142,114 12,228 5,103(1)
Sr. Vice President and Chief 1992 142,114 19,135 4,079
Financial Officer 1991 142,114 0 (2)
G. Stanley Hill 1993 140,000 12,580 4,905(1)
Sr. Vice President, 1992 140,000 18,195 4,391
External Affairs 1991 134,872 0 (2)
Charles T. Autry 1993 139,750 10,991 4,326(1)
Sr. Vice President and 1992 139,750 16,950 4,232
General Counsel 1991 139,750 0 (2)
David L. Self 1993 135,000 12,143 5,077(1)
Sr. Vice President and 1992 131,800 18,286 4,168
Group Executive, Generation 1991 110,067 0 (2)
<FN>
- -------------------------
(1) Includes contributions made in 1993 by Oglethorpe under the 401(k)
Retirement Savings Plan on behalf of Messrs. Kilgore, Heckl, Hill, Autry and
Self in the amounts of $4,497, $4,497, $4,200, $4,193 and $4,050, respectively,
and above market amounts of interest earned by Messrs. Kilgore, Heckl, Hill,
Autry and Self on deferred compensation amounts paid by Oglethorpe in the
amounts of $1,759, $606, $705, $133, and $1,027, respectively.
(2) In accordance with the transition provision applicable to the Commission's
new rules regarding executive compensation disclosure, Oglethorpe is not
required to provide any information for fiscal year 1991.
(3) Mr. Kilgore is not a participant in the incentive compensation program. His
compensation is governed solely by the Board of Directors.
61
PENSION PLAN TABLE
YEARS OF CREDITED SERVICE
--------------------------------
AVERAGE COMPENSATION 15 20 25 OR MORE
- -------------------- ------ ------ ----------
$125,000 . . . . . . . . . . . . . . $35,592 $47,456 $ 59,320
150,000 . . . . . . . . . . . . . . 43,092 57,456 71,820
175,000 . . . . . . . . . . . . . . 50,592 67,456 84,320
200,000 . . . . . . . . . . . . . . 58,092 77,456 96,820
225,000 . . . . . . . . . . . . . . 65,592 87,456 109,320
250,000 . . . . . . . . . . . . . . 68,844 91,792 114,740
The preceding table shows estimated annual straight life annuity benefits
payable upon retirement to persons in specified compensation and
years-of-service classifications assuming such persons had attained age 65 and
retired during 1993. For purposes of calculating pension benefits, compensation
is defined as total salary and bonus, as shown in the above Summary Compensation
Table. Because covered compensation changes each year, the estimated pension
benefits for the classifications above will also change in future years. The
above pension benefits are not subject to any deduction for Social Security or
other offset amounts.
As of December 31, 1993, the years of credited service under the Pension
Plan for the individuals listed in the Summary Compensation Table are as
follows:
YEARS OF
NAME CREDITED SERVICE
---- ----------------
Mr. Kilgore. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Mr. Heckl. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mr. Autry. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Mr. Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Mr. Self . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
COMPENSATION OF DIRECTORS
Oglethorpe pays its Directors a per diem fee of $200 for meetings attended
or $50 for meetings conducted by conference call. Additionally, Oglethorpe
reimburses its Directors for out-of-pocket expenses incurred in attending a
meeting. Alternate Directors serving as a Director at any meeting receive
neither the per diem payment nor the expense reimbursement to which a Director
is entitled. The Member of which the Alternate Director is the manager receives
reimbursement for the Alternate Director's out-of-pocket expenses.
The Chairman of the Board is also paid at least one day's per diem of $200
each month for time involved in carrying out his official duties in addition to
the regularly scheduled Board Meeting.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
W. F. Farr, J. Calvin Earwood, Ronnie Fleeman, E. J. Martin, Jr. and
Robert A. Reeves serve as members of the GEMC/Oglethorpe Human Resources
Management Committee which functions as Oglethorpe's compensation committee.
J. Calvin Earwood has served as an executive officer of Oglethorpe since 1984
and has served as the Chairman of the Board since 1989.
62
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Not applicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
63
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
PAGE
----
(a) LIST OF DOCUMENTS FILED AS A PART OF THIS REPORT.
(1) FINANCIAL STATEMENTS (Included under "Item 8. Financial
Statements and Supplementary Data")
Statements of Revenues and Expenses, For the Years
Ended December 31, 1993, 1992 and 1991. . . . . . . . . . 33
Statements of Patronage Capital, For the Years Ended
December 31, 1993, 1992 and 1991. . . . . . . . . . . . . 33
Balance Sheets, As of December 31, 1993 and 1992 . . . . . 34
Statements of Capitalization, As of December 31, 1993
and 1992. . . . . . . . . . . . . . . . . . . . . . . . . 36
Statements of Cash Flows, For the Years Ended December
31, 1993, 1992 and 1991 . . . . . . . . . . . . . . . . . 37
Notes to Financial Statements. . . . . . . . . . . . . . . 38
Report of Management . . . . . . . . . . . . . . . . . . . 48
Report of Independent Public Accountants . . . . . . . . . 48
(2) FINANCIAL STATEMENT SCHEDULES
Schedule I -- Marketable Securities--Other Security
Investments, As of December 31, 1993 78
Schedule V -- Utility Plant, Including Intangibles, For the
Years Ended December 31, 1993, 1992 and 1991 79
Schedule VI -- Accumulated Provision for Depreciation
of Utility Plant, For the Years Ended
December 31, 1993, 1992 and 1991 82
Schedule X -- Supplementary Income Statement
Information, For the Years Ended
December 31, 1993, 1992 and 1991 85
(3) EXHIBITS
NUMBER DESCRIPTION
- ------ -----------
*3(i) -- Restated Articles of Incorporation of Oglethorpe, dated as
of July 26, 1988. (Filed as Exhibit 3.1 to the Registrant's
Form 10-K for the fiscal year ended December 31, 1988, File
No. 33-7591.)
*3(ii) -- Bylaws of Oglethorpe as amended November 8, 1993. (Filed as
Exhibit 3.2 to the Registrant's Form 10-Q for the quarterly
period ended September 30, 1993, File No. 33- 7591.)
*4.1 -- Serial Facility Bond (included in Collateral Trust Indenture
listed as Exhibit 4.2).
*4.2 -- Collateral Trust Indenture, dated as of October 15, 1986,
between OPC Scherer Funding Corporation, Oglethorpe and
Trust Company Bank, a banking corporation, as Trustee.
(Filed
64
NUMBER DESCRIPTION
- ------ -----------
as Exhibit 4.2 to the Registrant's Form S-1 Registration
Statement, File No. 33- 7591, filed on October 9, 1986.)
*4.3 -- Refunding Lessor Notes. (Filed as Exhibit 4.3.1 to the
Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*4.4(a) -- Nonrecourse Promissory Secured Note, due June 30, 2011, from
Wilmington Trust Company and William J. Wade, as Owner
Trustees, to Columbia Bank for Cooperatives. (Filed as
Exhibit 4.3.4 to the Registrant's Form S-1 Registration
Statement, File No. 33- 7591, filed on October 9, 1986.)
*4.4(b) -- First Amendment to Nonrecourse Promissory Secured Note,
dated as of June 30, 1987, by Wilmington Trust Company and
The Citizens and Southern National Bank, as Owner Trustee
under Trust Agreement No. 1 with IBM Credit Financing
Corporation, to Columbia Bank for Cooperatives. (Filed as
Exhibit 4.3.4(a) to the Registrant's Form 10-K for the
fiscal year ended December 31, 1987, File No. 33-7591.)
*4.5(a) -- Indenture of Trust, Deed to Secure Debt and Security
Agreement No. 2, dated December 30, 1985, between Wilmington
Trust Company and William J. Wade, as Owner Trustees under
Trust Agreement No. 2 dated December 30, 1985, with Ford
Motor Credit Company and The First National Bank of Atlanta,
as Indenture Trustee, together with a Schedule identifying
three other substantially identical Indentures of Trust,
Deeds to Secure Debt and Security Agreements. (Filed as
Exhibit 4.4(b) to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*4.5(b) -- First Supplemental Indenture of Trust, Deed to Secure Debt
and Security Agreement No. 2 (included as Exhibit A to the
Supplemental Participation Agreement No. 2 listed as
10.1.1(b)).
*4.5(c) -- First Supplemental Indenture of Trust, Deed to Secure Debt
and Security Agreement No. 1, dated as of June 30, 1987,
between Wilmington Trust Company and The Citizens and
Southern National Bank, collectively as Owner Trustee under
Trust Agreement No. 1 with IBM Credit Financing Corporation,
and The First National Bank of Atlanta, as Indenture
Trustee. (Filed as Exhibit 4.4(c) to the Registrant's Form
10-K for the fiscal year ended December 31, 1987, File No.
33-7591.)
*4.6(a) -- Lease Agreement No. 2 dated December 30, 1985, between
Wilmington Trust Company and William J. Wade, as Owner
Trustees under Trust Agreement No. 2, dated December 30,
1985, with Ford Motor Credit Company, Lessor, and
Oglethorpe, Lessee, with a Schedule identifying three other
substantially identical Lease Agreements. (Filed as Exhibit
4.5(b) to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.6(b) -- First Supplement To Lease Agreement No. 2 (included as
Exhibit B to the Supplemental Participation Agreement No. 2
listed as 10.1.1(b)).
*4.6(c) -- First Supplement to Lease Agreement No. 1, dated as of June
30, 1987, between The Citizens and Southern National Bank as
Owner Trustee under Trust Agreement No. 1 with IBM Credit
Financing Corporation, as Lessor, and Oglethorpe, as Lessee.
(Filed as Exhibit 4.5(c) to the Registrant's Form 10-K for
the fiscal year ended December 31, 1987, File No. 33-7591.)
65
NUMBER DESCRIPTION
- ------ -----------
*4.7(a) -- Amended and Consolidated Loan Contract dated as of June 1,
1984 between Oglethorpe and the United States of America, as
amended and supplemented, together with eleven notes
executed and delivered pursuant thereto. (Filed as Exhibit
4.6 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.7(b) -- Amendments, dated October 17, 1986, and January 9, 1987, to
Amended and Consolidated Loan Contract dated as of June 1,
1984 between Oglethorpe and the United States of America.
(Filed as Exhibit 4.6(a) to the Registrant's Form 10-K for
the fiscal year ended December 31, 1986, File No. 33-7591.)
*4.7(c) -- Amendment, dated September 30, 1988, to Amended and
Consolidated Loan Contract dated as of June 1, 1984 between
Oglethorpe and the United States of America. (Filed as
Exhibit 4.6(b) to the Registrant's Form 10-K for the fiscal
year ended December 31, 1988, File No. 33-7591.)
*4.7(d) -- Amendment, dated March 20, 1990, to Amended and Consolidated
Loan Contract dated as of June 1, 1984 between Oglethorpe
and the United States of America. (Filed as Exhibit 4.6(c)
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1989, File No. 33-7591.)
*4.7(e) -- Amendment, dated July 1, 1991, to Amended and Consolidated
Loan Contract dated as of June 1, 1984 between Oglethorpe
and the United States of America. (Filed as Exhibit 4.6(d)
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1991, File No. 33-7591.)
*4.7(f) -- Amendment, dated April 6, 1992, to Amended and Consolidated
Loan Contract dated as of June 1, 1984 between Oglethorpe
and the United States of America. (Filed as Exhibit 4.6(e)
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1992, File No. 33-7591.)
*4.7(g) -- Amendment, dated June 12, 1992, to Amended and Consolidated
Loan Contract dated as of June 1, 1984 between Oglethorpe
and the United States of America. (Filed as Exhibit 4.6(f)
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1992, File No. 33-7591.)
*4.7(h) -- Amendment, dated October 20, 1992, to Amended and
Consolidated Loan Contract dated as of June 1, 1984 between
Oglethorpe and the United States of America. (Filed as
Exhibit 4.6(g) to the Registrant's Form 10-K for the fiscal
year ended December 31, 1992, File No. 33-7591.)
*4.7(i) -- Amendment, dated February 25, 1993, to Amended and
Consolidated Loan Contract dated as of June 1, 1984 between
Oglethorpe and the United States of America. (Filed as
Exhibit 4.6(h) to the Registrant's Form 10-K for the fiscal
year ended December 31, 1992, File No. 33-7591.)
4.7(j) -- Amendment, dated August 26, 1993, to Amended and
Consolidated Loan Contract dated as of June 1, 1984 between
Oglethorpe and the United States of America.
66
NUMBER DESCRIPTION
- ------ -----------
*4.8.1(a) -- Mortgage and Security Agreement made by Oglethorpe to United
States of America dated as of January 8, 1975. (Filed as
Exhibit 4.12(b) to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*4.8.1(b) -- Supplemental Mortgage made by Oglethorpe to United States of
America dated as of January 6, 1977. (Filed as Exhibit
4.12(a) to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.8.2(a) -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America
and Trust Company Bank, as trustee under certain indentures
identified therein, Mortgagees, dated as of November 1,
1978. (Filed as Exhibit 4.11(c) to the Registrant's Form S-1
Registration Statement, File No. 33- 7591, filed on October
9, 1986.)
*4.8.2(b) -- Confirmation of Execution And Delivery of Notes And First
Amendment to Consolidated Mortgage and Security Agreement,
dated as of January 11, 1979. (Filed as Exhibit 4.11(b) to
the Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*4.8.2(c) -- Supplement and Second Amendment to Consolidated Mortgage and
Security Agreement made by and among Oglethorpe, Mortgagor,
and United States of America and Trust Company Bank, as
Trustee, Mortgagees, dated April 30, 1980. (Filed as Exhibit
4.11(a) to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.8.3 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America
and Trust Company Bank, as trustee under certain indentures
identified therein, Mortgagees, dated as of September 15,
1982. (Filed as Exhibit 4.10 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on October
9, 1986.)
*4.8.4 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
Columbia Bank for Cooperatives, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of June 1, 1984. (Filed as Exhibit 4.9
to the Registrant's Form S-1 Registration Statement, File
No. 33-7591, filed on October 9, 1986.)
*4.8.5 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
Columbia Bank for Cooperatives, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of December 1, 1984. (Filed as Exhibit
4.8 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.8.6(a) -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
Columbia Bank for Cooperatives, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of October 15, 1985. (Filed as Exhibit
4.7 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*4.8.6(b) -- First Supplement and Amendment to Consolidated Mortgage and
Security Agreement made by and among Oglethorpe, Mortgagor,
and United States of America, Columbia Bank for
67
NUMBER DESCRIPTION
- ------ -----------
Cooperatives, and Trust Company Bank, as trustee under
certain indentures identified therein, Mortgagees, dated as
of November 1, 1988. (Filed as Exhibit 4.7(a) to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1988, File No. 33- 7591.)
*4.8.7(a) -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
National Bank for Cooperatives, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of December 1, 1989. (Filed as Exhibit
4.19 to the Registrant's Form 10-K for the fiscal year ended
December 31, 1989, File No. 33-7591.)
*4.8.7(b) -- Supplement to Consolidated Mortgage and Security Agreement
made by and among Oglethorpe, Mortgagor, and United States
of America, National Bank for Cooperatives, and Trust
Company Bank, as trustee under certain indentures identified
therein, Mortgagees, dated as of November 20, 1990. (Filed
as Exhibit 4.19(a) to the Registrant's Form 10-K for the
fiscal year ended December 31, 1990, File No. 33-7591.)
*4.8.8 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
National Bank for Cooperatives, Credit Suisse, acting by and
through its New York branch, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of April 1, 1992. (Filed as Exhibit
4.21 to the Registrant's Form 10-K for the fiscal year ended
December 31, 1992, File No. 33-7591.)
*4.8.9 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
National Bank for Cooperatives, Credit Suisse, acting by and
through its New York branch, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of October 1, 1992. (Filed as Exhibit
4.22 to the Registrant's Form 10-K for the fiscal year ended
December 31, 1992, File No. 33-7591.)
*4.8.10 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
National Bank for Cooperatives, Credit Suisse, acting by and
through its New York branch, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of December 1, 1992. (Filed as Exhibit
4.23 to the Registrant's Form 10-K for the fiscal year ended
December 31, 1992, File No. 33-7591.)
4.8.11 -- Consolidated Mortgage and Security Agreement made by and
among Oglethorpe, Mortgagor, and United States of America,
National Bank for Cooperatives, Credit Suisse, acting by and
through its New York branch, and Trust Company Bank, as
trustee under certain indentures identified therein,
Mortgagees, dated as of September 1, 1993.
++4.9.1 -- Loan Agreement, dated as of October 1, 1992, between
Development Authority of Monroe County and Oglethorpe
relating to Development Authority of Monroe County Pollution
Control Revenue Bonds (Oglethorpe Power Corporation Scherer
Project), Series 1992A.
++4.9.2 -- Note, dated October 1, 1992, from Oglethorpe to Trust
Company Bank, as trustee acting pursuant to a Trust
Indenture, dated as of October 1, 1992, between Development
Authority of Monroe County and Trust Company Bank.
68
NUMBER DESCRIPTION
- ------ -----------
++4.9.3 -- Trust Indenture, dated as of October 1, 1992, between
Development Authority of Monroe County and Trust Company
Bank, Trustee, relating to Development Authority of Monroe
County Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Scherer Project), Series 1992A.
+4.10.1 -- Loan Agreement, dated as of April 1, 1992, between
Development Authority of Burke County and Oglethorpe
relating to Development Authority of Burke County Adjustable
Tender Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1992A.
+4.10.2 -- Note, dated April 1, 1992, from Oglethorpe to Trust Company
Bank, as trustee acting pursuant to a Trust Indenture, dated
as of April 1, 1992, between Development Authority of Burke
County and Trust Company Bank.
+4.10.3 -- Trust Indenture, dated as of April 1, 1992, between
Development Authority of Burke County and Trust Company
Bank, as trustee, relating to Development Authority of Burke
County Adjustable Tender Pollution Control Revenue Bonds
(Oglethorpe Power Corporation Vogtle Project), Series 1992A.
+4.10.4 -- First Amended and Restated Letter of Credit Reimbursement
Agreement, dated as of June 1, 1992, as amended by First
Amendment to First Amended and Restated Letter of Credit
Reimbursement Agreement, dated as of September 15, 1993,
between Credit Suisse and Oglethorpe relating to an
Irrevocable Letter of Credit issued in connection with the
Development Authority of Burke County Adjustable Tender
Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1992A.
+++4.11.1 -- Loan Agreement, dated as of December 1, 1992, between
Development Authority of Burke County and Oglethorpe
relating to Development Authority of Burke County Adjustable
Tender Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1993A.
+++4.11.2 -- Note, dated December 1, 1992, from Oglethorpe to Trust
Company Bank, as trustee acting pursuant to a Trust
Indenture, dated as of December 1, 1992, between Development
Authority of Burke County and Trust Company Bank.
+++4.11.3 -- Trust Indenture, dated as of December 1, 1992, from
Development Authority of Burke County to Trust Company Bank,
as trustee, relating to Development Authority of Burke
County Adjustable Tender Pollution Control Revenue Bonds
(Oglethorpe Power Corporation Vogtle Project), Series 1993A.
+++4.11.4 -- Interest Rate Swap Agreement, dated as of December 1, 1992,
by and between Oglethorpe and AIG Financial Products Corp.
relating to Development Authority of Burke County Adjustable
Tender Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1993A.
+++4.11.5 -- Liquidity Guaranty Agreement, dated as of December 1, 1992,
by and between Oglethorpe and AIG Financial Products Corp.
relating to Development Authority of Burke County Adjustable
Tender Pollution Control Revenue Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1993A.
69
NUMBER DESCRIPTION
- ------ -----------
+4.11.6 -- Standby Bond Purchase Agreement, dated as of November 30,
1993, between Oglethorpe and The Industrial Bank of Japan,
Limited relating to Development Authority of Burke County
Adjustable Tender Pollution Control Revenue Bonds
(Oglethorpe Power Corporation Vogtle Project), Series 1993A.
*4.12.1 -- Loan Agreement, Loan No. T-840901, between Oglethorpe and
Columbia Bank for Cooperatives, dated as of September 14,
1984. (Filed as Exhibit 4.14.1 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*4.12.2 -- Promissory Note, Loan No. T-840901, in the original
principal amount of $8,995,000 from Oglethorpe to Columbia
Bank for Cooperatives, dated as of November 1, 1984. (Filed
as Exhibit 4.14.2 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*4.13.1 -- Loan Agreement, Loan No. T-831222, between Oglethorpe and
Columbia Bank for Cooperatives, dated as of December 30,
1983. (Filed as Exhibit 4.16.1 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*4.13.2 -- Promissory Note, Loan No. T-831222, in the original
principal amount of $2,376,000 from Oglethorpe to Columbia
Bank for Cooperatives, dated as of June 1, 1984. (Filed as
Exhibit 4.16.2 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*4.14.1 -- Loan Agreement, Loan No. T-830404, between Oglethorpe and
Columbia Bank for Cooperatives, dated as of April 29, 1983.
(Filed as Exhibit 4.18.1 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*4.14.2 -- Promissory Note, Loan No. T-830404-1, in the original
principal amount of $9,935,000, from Oglethorpe to Columbia
Bank for Cooperatives, dated as of April 29, 1983. (Filed as
Exhibit 4.18.2 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*4.14.3 -- Security Deed and Security Agreement, dated April 29, 1983,
between Oglethorpe and Columbia Bank for Cooperatives.
(Filed as Exhibit 4.18.3 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.1.1(a) -- Participation Agreement No. 2 among Oglethorpe as Lessee,
Wilmington Trust Company as Owner Trustee, The First
National Bank of Atlanta as Indenture Trustee, Columbia Bank
for Cooperatives as Loan Participant and Ford Motor Credit
Company as Owner Participant, dated December 30, 1985,
together with a Schedule identifying three other
substantially identical Participation Agreements. (Filed as
Exhibit 10.1.1(b) to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.1.1(b) -- Supplemental Participation Agreement No. 2. (Filed as
Exhibit 10.1.1(a) to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.1.1(c) -- Supplemental Participation Agreement No. 1, dated as of
June 30, 1987, among Oglethorpe as Lessee, IBM Credit
Financing Corporation as Owner Participant, Wilmington Trust
Company and The Citizens and Southern National Bank as Owner
Trustee, The First National Bank of Atlanta, as Indenture
Trustee, and Columbia Bank for Cooperatives, as
70
NUMBER DESCRIPTION
- ------ -----------
Loan Participant. (Filed as Exhibit 10.1.1(c) to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1987, File No. 33-7591.)
*10.1.2 -- General Warranty Deed and Bill of Sale No. 2 between
Oglethorpe, Grantor, and Wilmington Trust Company and
William J. Wade, as Owner Trustees under Trust Agreement No.
2, dated December 30, 1985, with Ford Motor Credit Company,
Grantee, together with a Schedule identifying three
substantially identical General Warranty Deeds and Bills of
Sale. (Filed as Exhibit 10.1.2 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on October
9, 1986.)
*10.1.3(a) -- Supporting Assets Lease No. 2, dated December 30, 1985,
between Oglethorpe, Lessor, and Wilmington Trust Company and
William J. Wade, as Owner Trustees, under Trust Agreement
No. 2, dated December 30, 1985, with Ford Motor Credit
Company, Lessee, together with a Schedule identifying three
substantially identical Supporting Assets Leases. (Filed as
Exhibit 10.1.3 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.1.3(b) -- First Amendment to Supporting Assets Lease No. 2, dated as
of November 19, 1987, together with a Schedule identifying
three substantially identical First Amendments to Supporting
Assets Leases. (Filed as Exhibit 10.1.3(a) to the
Registrant's Form 10-K for the fiscal year ended December
31, 1987, File No. 33-7591.)
*10.1.4(a) -- Supporting Assets Sublease No. 2, dated December 30, 1985,
between Wilmington Trust Company and William J. Wade, as
Owner Trustees under Trust Agreement No. 2 dated December
30, 1985, with Ford Motor Credit Company, Sublessor, and
Oglethorpe, Sublessee, together with a Schedule identifying
three substantially identical Supporting Assets Subleases.
(Filed as Exhibit 10.1.4 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.1.4(b) -- First Amendment to Supporting Assets Sublease No. 2, dated
as of November 19, 1987, together with a Schedule
identifying three substantially identical First Amendments
to Supporting Assets Subleases. (Filed as Exhibit 10.1.4(a)
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1987, File No. 33-7591.)
*10.1.5 -- Tax Indemnification Agreement No. 2, dated December 30,
1985, between Ford Motor Credit Company, Owner Participant,
and Oglethorpe, Lessee, together with a Schedule identifying
three substantially identical Tax Indemnification
Agreements. (Filed as Exhibit 10.1.5 to the Registrant's
Form S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.1.6 -- Assignment of Interest in Ownership Agreement and Operating
Agreement No. 2, dated December 30, 1985, between
Oglethorpe, Assignor, and Wilmington Trust Company and
William J. Wade, as Owner Trustees under Trust Agreement No.
2, dated December 30, 1985, with Ford Motor Credit Company,
Assignee, together with Schedule identifying three
substantially identical Assignments of Interest in Ownership
Agreement and Operating Agreement. (Filed as Exhibit 10.1.6
to the Registrant's Form S-1 Registration Statement, File
No. 33-7591, filed on October 9, 1986.)
*10.1.7 -- Consent, Amendment and Assumption No. 2 dated December 30,
1985, among Georgia Power Company and Oglethorpe and
Municipal Electric Authority of Georgia and City of Dalton,
Georgia and Gulf Power Company and Wilmington Trust Company
and William
71
NUMBER DESCRIPTION
- ------ -----------
J. Wade, as Owner Trustees under Trust Agreement No. 2,
dated December 30, 1985, with Ford Motor Credit Company,
together with a Schedule identifying three substantially
identical Consents, Amendments and Assumptions. (Filed as
Exhibit 10.1.9 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.1.7(a) -- Amendment to Consent, Amendment and Assumption No. 2, dated
as of August 16, 1993, among Oglethorpe, Georgia Power
Company, Municipal Electric Authority of Georgia, City of
Dalton, Georgia, Gulf Power Company, Jacksonville Electric
Authority, Florida Power & Light Company and Wilmington
Trust Company and NationsBank of Georgia, N.A., as Owner
Trustees under Trust Agreement No. 2, dated December 30,
1985, with Ford Motor Credit Company, together with a
Schedule identifying three substantially identical
Amendments to Consents, Amendments and Assumptions. (Filed
as Exhibit 10.1.9(a) to the Registrant's Form 10-Q for the
quarterly period ended September 30, 1993, File No.
33-7591.)
*10.2.1 -- Section 168 Agreement and Election dated as of April 7,
1982, between Continental Telephone Corporation and
Oglethorpe. (Filed as Exhibit 10.2 to the Registrant's Form
S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.2.2 -- Section 168 Agreement and Election dated as of April 9,
1982, between National Service Industries, Inc. and
Oglethorpe. (Filed as Exhibit 10.3 to the Registrant's Form
S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.2.3 -- Section 168 Agreement and Election dated as of April 9,
1982, between Rollins, Inc. and Oglethorpe. (Filed as
Exhibit 10.4 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.2.4 -- Section 168 Agreement and Election dated as of December 13,
1982, between Selig Enterprises, Inc. and Oglethorpe. (Filed
as Exhibit 10.5 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.3.1(a) -- Plant Robert W. Scherer Units Numbers One and Two Purchase
and Ownership Participation Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of
Georgia and City of Dalton, Georgia, dated as of May 15,
1980. (Filed as Exhibit 10.6.1 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.3.1(b) -- Amendment to Plant Robert W. Scherer Units Numbers One and
Two Purchase and Ownership Participation Agreement among
Georgia Power Company, Oglethorpe, Municipal Electric
Authority of Georgia and City of Dalton, Georgia, dated as
of December 30, 1985. (Filed as Exhibit 10.1.8 to the
Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*10.3.1(c) -- Amendment Number Two to the Plant Robert W. Scherer Units
Numbers One and Two Purchase and Ownership Participation
Agreement among Georgia Power Company, Oglethorpe, Municipal
Electric Authority of Georgia and City of Dalton, Georgia,
dated as of July 1, 1986. (Filed as Exhibit 10.6.1(a) to the
Registrant's Form 10-K for the fiscal year ended December
31, 1987, File No. 33-7591.)
*10.3.1(d) -- Amendment Number Three to the Plant Robert W. Scherer Units
Numbers One and Two Purchase and Ownership Participation
Agreement among Georgia Power Company,
72
NUMBER DESCRIPTION
- ------ -----------
Oglethorpe, Municipal Electric Authority of Georgia and
City of Dalton, Georgia, dated as of August 1, 1988. (Filed
as Exhibit 10.6.1(b) to the Registrant's Form 10-Q for the
quarterly period ended September 30, 1993, File No.
33-7591.)
*10.3.1(e) -- Amendment Number Four to the Plant Robert W. Scherer Units
Number One and Two Purchase and Ownership Participation
Agreement among Georgia Power Company, Oglethorpe, Municipal
Electric Authority of Georgia and City of Dalton, Georgia,
dated as of December 31, 1990. (Filed as Exhibit 10.6.1(c)
to the Registrant's Form 10-Q for the quarterly period ended
September 30, 1993, File No. 33-7591.)
*10.3.2(a) -- Plant Robert W. Scherer Units Numbers One and Two Operating
Agreement among Georgia Power Company, Oglethorpe, Municipal
Electric Authority of Georgia and City of Dalton, Georgia,
dated as of May 15, 1980. (Filed as Exhibit 10.6.2 to the
Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*10.3.2(b) -- Amendment to Plant Robert W. Scherer Units Numbers One and
Two Operating Agreement among Georgia Power Company,
Oglethorpe, Municipal Electric Authority of Georgia and City
of Dalton, Georgia, dated as of December 30, 1985. (Filed as
Exhibit 10.1.7 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.3.2(c) -- Amendment Number Two to the Plant Robert W. Scherer Units
Numbers One and Two Operating Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of Georgia
and City of Dalton, Georgia, dated as of December 31, 1990.
(Filed as Exhibit 10.6.2(a) to the Registrant's Form 10-Q
for the quarterly period ended September 30, 1993, File No.
33-7591.)
*10.3.3 -- Plant Scherer Managing Board Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of
Georgia, City of Dalton, Georgia, Gulf Power Company,
Florida Power & Light Company and Jacksonville Electric
Authority, dated as of December 31, 1990. (Filed as Exhibit
10.6.3 to the Registrant's Form 10-Q for the quarterly
period ended September 30, 1993, File No. 33-7591.)
*10.4.1(a) -- Alvin W. Vogtle Nuclear Units Numbers One and Two Purchase
and Ownership Participation Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of Georgia
and City of Dalton, Georgia, dated as of August 27, 1976.
(Filed as Exhibit 10.7.1 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.4.1(b) -- Amendment Number One, dated January 18, 1977, to the Alvin
W. Vogtle Nuclear Units Numbers One and Two Purchase and
Ownership Participation Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of Georgia
and City of Dalton, Georgia. (Filed as Exhibit 10.7.3 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1986, File No. 33-7591.)
*10.4.1(c) -- Amendment Number Two, dated February 24, 1977, to the Alvin
W. Vogtle Nuclear Units Numbers One and Two Purchase and
Ownership Participation Agreement among Georgia Power
Company, Oglethorpe, Municipal Electric Authority of Georgia
and City of Dalton, Georgia. (Filed as Exhibit 10.7.4 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1986, File No. 33-7591.)
73
NUMBER DESCRIPTION
- ------ -----------
*10.4.2 -- Alvin W. Vogtle Nuclear Units Numbers One and Two Operating
Agreement among Georgia Power Company, Oglethorpe, Municipal
Electric Authority of Georgia and City of Dalton, Georgia,
dated as of August 27, 1976. (Filed as Exhibit 10.7.2 to the
Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*10.5.1 -- Plant Hal Wansley Purchase and Ownership Participation
Agreement between Georgia Power Company and Oglethorpe,
dated as of March 26, 1976. (Filed as Exhibit 10.8.1 to the
Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*10.5.2 -- Plant Hal Wansley Operating Agreement between Georgia Power
Company and Oglethorpe, dated as of March 26, 1976. (Filed
as Exhibit 10.8.2 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.5.3 -- Plant Hal Wansley Combustion Turbine Agreement between
Georgia Power Company and Oglethorpe, dated as of August 2,
1982 and Amendment No. 1, dated October 20, 1982. (Filed as
Exhibit 10.18 to the Registrant's Form S-1 Registration
Statement, File No. 33-7591, filed on October 9, 1986.)
*10.6.1 -- Edwin I. Hatch Nuclear Plant Purchase and Ownership
Participation Agreement between Georgia Power Company and
Oglethorpe, dated as of January 6, 1975. (Filed as Exhibit
10.9.1 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*10.6.2 -- Edwin I. Hatch Nuclear Plant Operating Agreement between
Georgia Power Company and Oglethorpe, dated as of January 6,
1975. (Filed as Exhibit 10.9.2 to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on October
9, 1986.)
*10.7.1 -- Rocky Mountain Pumped Storage Hydroelectric Project
Ownership Participation Agreement, dated as of November 18,
1988, by and between Oglethorpe and Georgia Power Company.
(Filed as Exhibit 10.22.1 to the Registrant's Form 10-K for
the fiscal year ended December 31, 1988, File No. 33-7591.)
*10.7.2 -- Rocky Mountain Pumped Storage Hydroelectric Project
Operating Agreement, dated as of November 18, 1988, by and
between Oglethorpe and Georgia Power Company. (Filed as
Exhibit 10.22.2 to the Registrant's Form 10-K for the fiscal
year ended December 31, 1988, File No. 33-7591.)
*10.8.1(a) -- Wholesale Power Contract dated September 5, 1974, between
Oglethorpe and Planters Electric Membership Corporation and
all schedules thereto, the Supplemental Agreement dated
September 5, 1974, between Oglethorpe and Planters Electric
Membership Corporation, relating to such Wholesale Power
Contract, and Amendment No. 1 to Wholesale Power Contract
dated May 12, 1980, between Oglethorpe and Planters Electric
Membership Corporation, together with a Schedule identifying
37 other substantially identical Wholesale Power Contracts,
and an additional Wholesale Power Contract that is not
substantially identical (filed herewith to reflect update to
Schedule A to Wholesale Power Contract). (Filed as Exhibit
10.10 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*10.8.1(b) -- Amended and Consolidated Wholesale Power Contract, dated as
of December 1, 1988, between Oglethorpe and Planters
Electric Membership Corporation and all schedules thereto,
and the Amended and Consolidated Supplemental Agreement,
dated December 1, 1988,
74
NUMBER DESCRIPTION
- ------ -----------
between Oglethorpe and Planters Electric Membership
Corporation, together with a Schedule identifying 37 other
substantially identical Wholesale Power Contracts, and an
additional Wholesale Power Contract that is not
substantially identical. (Filed as Exhibit 10.10(a) to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1988, File No. 33-7591.)
*10.9 -- Transmission Facilities Operation and Maintenance Contract
between Georgia Power Company and Oglethorpe dated as of
June 9, 1986. (Filed as Exhibit 10.13 to the Registrant's
Form S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.10(a) -- Joint Committee Agreement among Georgia Power Company,
Oglethorpe, Municipal Electric Authority of Georgia and the
City of Dalton, Georgia, dated as of August 27, 1976. (Filed
as Exhibit 10.14(b) to the Registrant's Form S-1
Registration Statement, File No. 33-7591, filed on October
9, 1986.)
*10.10(b) -- First Amendment to Joint Committee Agreement among Georgia
Power Company, Oglethorpe, Municipal Electric Authority of
Georgia and the City of Dalton, Georgia, dated as of June
19, 1978. (Filed as Exhibit 10.14(a) to the Registrant's
Form S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.11 -- Interconnection Agreement between Oglethorpe and Alabama
Electric Cooperative, Inc., dated as of November 12, 1990.
(Filed as Exhibit 10.16(a) to the Registrant's Form 10- K
for the fiscal year ended December 31, 1990, File No.
33-7591.)
*10.12 -- Oglethorpe Deferred Compensation Plan for Key Employees, as
Amended and Restated January, 1987. (Filed as Exhibit 10.19
to the Registrant's Form 10-K for the fiscal year ended
December 31, 1986, File No. 33-7591.)
*10.13.1 -- Assignment of Power System Agreement and Settlement
Agreement, dated January 8, 1975, by Georgia Electric
Membership Corporation to Oglethorpe. (Filed as Exhibit
10.20.1 to the Registrant's Form S-1 Registration Statement,
File No. 33-7591, filed on October 9, 1986.)
*10.13.2 -- Power System Agreement, dated April 24, 1974, by and between
Georgia Electric Membership Corporation and Georgia Power
Company. (Filed as Exhibit 10.20.2 to the Registrant's Form
S-1 Registration Statement, File No. 33-7591, filed on
October 9, 1986.)
*10.13.3 -- Settlement Agreement, dated April 24, 1974, by and between
Georgia Power Company, Georgia Municipal Association, Inc.,
City of Dalton, Georgia Electric Membership Corporation and
Crisp County Power Commission. (Filed as Exhibit 10.20.3 to
the Registrant's Form S-1 Registration Statement, File No.
33-7591, filed on October 9, 1986.)
*10.14 -- Distribution Facilities Joint Use Agreement between
Oglethorpe and Georgia Power Company, dated as of May 12,
1986. (Filed as Exhibit 10.21 to the Registrant's Form 0-K
for the fiscal year ended December 31, 1986, File No.
33-7591.)
*10.15.1 -- Long Term Firm Power Purchase Agreement, dated as of July
19, 1989, by and between Oglethorpe and Big Rivers Electric
Corporation. (Filed as Exhibit 10.24.1 to the Registrant's
Form 10-K for the fiscal year ended December 31, 1989, File
No. 33-7591.)
*10.15.2 -- Coordination Services Agreement, dated as of August 21,
1989, by and between Oglethorpe and Georgia Power Company.
(Filed as Exhibit 10.24.2 to the Registrant's Form 10-K for
the fiscal year ended December 31, 1989, File No. 33-7591.)
75
NUMBER DESCRIPTION
- ------ -----------
*10.15.3 -- Long Term Firm Power Purchase Agreement between Big Rivers
Electric Corporation and Oglethorpe, dated as of
December 17, 1990. (Filed as Exhibit 10.24.3 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1990, File No. 33-7591.)
*10.15.4 -- Interchange Agreement between Oglethorpe and Big Rivers
Electric Corporation, dated as of November 12, 1990. (Filed
as Exhibit 10.24.4 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1990, File No. 33-7591.)
*10.16 -- Block Power Sale Agreement between Georgia Power Company and
Oglethorpe, dated as of November 12, 1990. (Filed as Exhibit
10.25 to the Registrant's Form 8-K, filed January 4, 1991,
File No. 33-7591.)
*10.17 -- Coordination Services Agreement between Georgia Power
Company and Oglethorpe, dated as of November 12, 1990.
(Filed as Exhibit 10.26 to the Registrant's Form 8-K, filed
January 4, 1991, File No. 33-7591.)
*10.18 -- Revised and Restated Integrated Transmission System
Agreement between Oglethorpe and Georgia Power Company,
dated as of November 12, 1990. (Filed as Exhibit 10.27 to
the Registrant's Form 8-K, filed January 4, 1991, File No.
33-7591.)
*10.19 -- ITSA, Power Sale and Coordination Umbrella Agreement between
Oglethorpe and Georgia Power Company, dated as of
November 12, 1990. (Filed as Exhibit 10.28 to the
Registrant's Form 8-K, filed January 4, 1991, File No.
33-7591.)
*10.20 -- Amended and Restated Nuclear Managing Board Agreement among
Georgia Power Company, Oglethorpe Power Corporation,
Municipal Electric Authority of Georgia and City of Dalton,
Georgia dated as of July 1, 1993. (Filed as Exhibit 10.36 to
the Registrant's 10-Q for the quarterly period ended
September 30, 1993, File No. 33-7591.)
*10.21 -- Supplemental Agreement by and among Oglethorpe, Tri-County
Electric Membership Cooperation and Georgia Power Company,
dated as of November 12, 1990, together with a Schedule
identifying 38 other substantially identical Supplemental
Agreements. (Filed as Exhibit 10.30 to the Registrant's
Form 8-K, filed January 4, 1991, File No. 33-7591.)
*10.22 -- Unit Capacity and Energy Purchase Agreement between
Oglethorpe and Entergy Power Incorporated, dated as of
October 11, 1990. (Filed as Exhibit 10.31 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1990, File No. 33-7591.)
*10.23 -- Interchange Agreement between Oglethorpe and Arkansas Power
& Light Company, Louisiana Power & Light Company,
Mississippi Power & Light Company, New Orleans Public
Service, Inc., Energy Services, Inc., dated as of
November 12, 1990. (Filed as Exhibit 10.32 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1990, File No. 33-7591.)
*10.24 -- Interchange Agreement between Oglethorpe and Seminole
Electric Cooperative, Inc., dated as of November 12, 1990.
(Filed as Exhibit 10.33 to the Registrant's Form 10-K for
the fiscal year ended December 31, 1990, File No. 33-7591.)
76
NUMBER DESCRIPTION
- ------ -----------
*10.25.1 -- Excess Energy and Short-term Power Agreement between
Oglethorpe and Tennessee Valley Authority, effective as of
January 23, 1991. (Filed as Exhibit 10.34.1 to the
Registrant's Form 10-K for the fiscal year ended
December 31, 1990, File No. 33-7591.)
*10.25.2 -- Transmission Service Agreement between Oglethorpe and
Tennessee Valley Authority, effective as of January 23,
1991. (Filed as Exhibit 10.34.2 to the Registrant's Form
10-K for the fiscal year ended December 31, 1990, File No.
33-7591.)
*10.26 -- Power Purchase Agreement between Oglethorpe and Hartwell
Energy Limited Partnership, dated as of June 12, 1992.
(Filed as Exhibit 10.35 to the Registrant's Form 10-K for
the fiscal year ended December 31, 1992, File No. 33-7591).
22.1 -- Subsidiary of Oglethorpe (not included because the
subsidiary does not constitute a "significant subsidiary"
under Rule 1-02(v) of Regulation S-X).
- -------------------------
* Incorporated herein by reference.
+ Pursuant to 17 C.F.R. 229.601(b)(4)(iii), this document is not filed
herewith, however the registrant hereby agrees that such documents will be
provided to the Commission upon request.
++ For the reason stated in footnote (+), this document and eight other
substantially identical documents are not filed as exhibits to this
Registration Statement.
+++ For the reason stated in the footnote (+), this document and another
substantially identical document are not filed as exhibits to this
Registration Statement.
All other schedules and exhibits are omitted because of the absence of the
conditions under which they are required or because the required information is
included in the financial statements and related notes to financial statements.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed by Oglethorpe for the quarter ended
December 31, 1993.
77
SCHEDULE I
OGLETHORPE POWER CORPORATION
MARKETABLE SECURITIES--OTHER SECURITY INVESTMENTS
AS OF DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
NAME OF ISSUER AND PRINCIPAL MARKET CARRYING
TITLE OF EACH ISSUE AMOUNT COST VALUE AMOUNT
------------------- --------- ---- ------ --------
BOND, RESERVE AND CONSTRUCTION FUNDS:
United States Government
securities . . . . . . . . . . . . . $ 58,416 $ 57,622 $ 59,247 $ 57,622
Repurchase agreements. . . . . . . . . 52,768 52,768 52,768 52,768
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . $111,184 $110,390 $112,015 $110,390
-------- -------- -------- --------
-------- -------- -------- --------
DECOMMISSIONING FUND:
United States Government
securities . . . . . . . . . . . . . $ 37,112 $ 40,182 $ 39,694 $ 40,182
Corporate bonds. . . . . . . . . . . . 8,305 8,669 8,932 8,669
Cash and money market securities . . . 8,060 8,060 8,060 8,060
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . $ 53,477 $ 56,911 $ 56,686 $ 56,911
-------- -------- -------- --------
-------- -------- -------- --------
CASH AND TEMPORARY CASH INVESTMENTS:
Financial institution commercial
paper. . . . . . . . . . . . . . . . $ 55,700 $ 55,593 $ 55,593 $ 55,593
Other corporate commercial paper . . . 160,920 152,793 152,793 152,793
CFC commercial paper . . . . . . . . . 9,935 9,935 9,935 9,935
Repurchase agreements. . . . . . . . . 25,549 25,549 25,549 25,549
Cash and money market securities . . . 303 303 303 303
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . $252,407 $244,173 $244,173 $244,173
-------- -------- -------- --------
-------- -------- -------- --------
78
SCHEDULE V
OGLETHORPE POWER CORPORATION
UTILITY PLANT, INCLUDING INTANGIBLES
FOR THE YEAR ENDED DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
BALANCE AT OTHER BALANCE
BEGINNING ADDITIONS CHANGES AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS(1) DEBIT/(CREDIT) OF PERIOD
- -------------- ---------- --------- -------------- -------------- ---------
Plant in service:
Intangible . . . . . . . . .$ 8,002 $ 1,214 $ - $ - $ 9,216
Production plant
Steam. . . . . . . . . . . 889,989 2,818 (354) (174)(4) 892,279
Nuclear. . . . . . . . . . 3,271,428 19,566 (2,553) (4,261)(4) 3,284,180
Hydro. . . . . . . . . . . 10,344 5 (8) - 10,341
Other. . . . . . . . . . . 3,665 - - - 3,665
Transmission plant . . . . . 469,275 7,455 (2,407) - 474,323
Distribution plant . . . . . 243,233 37,537 (5,727) - 275,043
General plant. . . . . . . . 72,624 13,971 (2,996) - 83,599
Construction work in
progress . . . . . . . . . . 322,628 128,337(2) - - 450,965
Plant held for future use. . . 11,720 3,375(3) - - 15,095
Plant acquisition
adjustments. . . . . . . . . 34,832 - - - 34,832
Nuclear fuel . . . . . . . . . 269,476 35,547 (73,773) - 231,250
---------- -------- -------- ------- ----------
Total Utility Plant. . . . .$5,607,216 $249,825 $(87,818) $(4,435) $5,764,788
---------- -------- -------- ------- ----------
---------- -------- -------- ------- ----------
- -----------------
<FN>
Notes:
(1) Retirements have been charged to accumulated provision for depreciation
(Schedule VI).
(2) CWIP additions represent transfers to plant in service of $(72,512) and
additions and other miscellaneous transfers of $200,849.
(3) Plant held for future use additions represent transfers to plant in service
of $(66) and additions and other miscellaneous transfers of $3,441.
(4) Amounts represents an adjustment related to a change in inventory methods
at jointly owned generating plants. Certain items of spare parts inventory
were originally charged to plant investment.
79
SCHEDULE V
OGLETHORPE POWER CORPORATION
UTILITY PLANT, INCLUDING INTANGIBLES
FOR THE YEAR ENDED DECEMBER 31, 1992
(DOLLARS IN THOUSANDS)
BALANCE AT OTHER BALANCE
BEGINNING ADDITIONS CHANGES AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS(1) DEBIT/(CREDIT) OF PERIOD
- -------------- ---------- --------- -------------- -------------- ---------
Plant in service:
Intangibles. . . . . . . . .$ 7,925 $ 77 $ - $ - $ 8,002
Production plant
Steam. . . . . . . . . . . 894,904 1,465 (2,017) (4,363)(4) 889,989
Nuclear. . . . . . . . . . 3,270,823 13,016 (3,348) (9,063)(4) 3,271,428
Hydro. . . . . . . . . . . 10,327 17 - - 10,344
Other. . . . . . . . . . . 3,867 (202) - - 3,665
Transmission plant . . . . . 444,678 28,342 (3,745) - 469,275
Distribution plant . . . . . 216,326 28,927 (2,020) - 243,233
General plant. . . . . . . . 69,328 3,764 (468) - 72,624
Construction work in
progress . . . . . . . . . . 178,980 143,648 (2) - - 322,628
Plant held for future use. . . 11,803 (83)(3) - - 11,720
Plant acquisition
adjustments. . . . . . . . . 34,796 36 - - 34,832
Nuclear fuel . . . . . . . . . 309,102 51,992 (91,618) - 269,476
---------- -------- --------- -------- ----------
Total Utility Plant. . . . .$5,452,859 $270,999 $(103,216) $(13,426) $5,607,216
---------- -------- --------- -------- ----------
---------- -------- --------- -------- ----------
- ------------------
<FN>
Notes:
(1) Retirements have been charged to accumulated provision for depreciation
(Schedule VI).
(2) CWIP additions represent transfers to plant in service of $(62,280) and
additions and other miscellaneous transfers of $205,928.
(3) Plant held for future use additions represent transfers to plant in service
of $(165) and additions and other miscellaneous transfers of $82.
(4) Amount represents an adjustment related to a change of inventory accounting
methods at jointly owned generating plants. Certain items of spare parts
inventory were originally charged to plant investment.
80
SCHEDULE V
OGLETHORPE POWER CORPORATION
UTILITY PLANT, INCLUDING INTANGIBLES
FOR THE YEAR ENDED DECEMBER 31, 1991
(DOLLARS IN THOUSANDS)
BALANCE AT OTHER BALANCE
BEGINNING ADDITIONS CHANGES AT END
CLASSIFICATION OF PERIOD AT COST RETIREMENTS(1) DEBIT/(CREDIT) OF PERIOD
- -------------- ---------- --------- -------------- -------------- ---------
Plant in service:
Intangibles. . . . . . . . .$ 7,642 $ 283 $ - $ - $ 7,925
Production plant
Steam. . . . . . . . . . . 894,045 872 (13) - 894,904
Nuclear. . . . . . . . . . 3,254,930 21,298 (5,405) - 3,270,823
Hydro. . . . . . . . . . . 9,482 845 - - 10,327
Other. . . . . . . . . . . 3,867 - - - 3,867
Transmission plant . . . . . 422,946 22,838 (1,106) - 444,678
Distribution plant . . . . . 175,012 46,030 (4,716) - 216,326
General plant. . . . . . . . 67,311 2,152 (135) - 69,328
Construction work in
progress . . . . . . . . . . 102,045 76,935 (2) - - 178,980
Plant held for future use. . . 22,325 (10,522)(3) - - 11,803
Plant acquisition
adjustments. . . . . . . . . 34,588 208 - - 34,796
Nuclear fuel . . . . . . . . . 309,643 41,229 (41,770) - 309,102
---------- -------- -------- ---- ----------
Total Utility Plant. . . . .$5,303,836 $202,168 $(53,145) $ - $5,452,859
---------- -------- -------- ---- ----------
---------- -------- -------- ---- ----------
- ----------------
<FN>
Notes:
(1) Retirements have been charged to accumulated provision for depreciation
(Schedule VI).
(2) CWIP additions represent transfers to plant in service of $(93,151) and
additions and other miscellaneous transfers of $170,086.
(3) Plant held for future use additions represent transfers to deferred debits
of $(21,131) and additions and other miscellaneous transfers of $10,609.
81
SCHEDULE VI
OGLETHORPE POWER CORPORATION
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE YEAR ENDED DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
BALANCE RETIREMENTS ADJUSTMENTS BALANCE
BEGINNING ANNUAL LESS NET AND AT END
DESCRIPTION OF PERIOD ACCRUALS(1) SALVAGE(2) TRANSFERS OF PERIOD
- ----------- ---------- ----------- ----------- ----------- ---------
Production plant:
Steam. . . . . . . . . . . $ (285,448) $ (24,830) $ 402 $ - (309,876)
Nuclear. . . . . . . . . . (546,748) (85,612) 4,450 - (627,910)
Hydro. . . . . . . . . . . (1,261) (252) 8 - (1,505)
Other. . . . . . . . . . . (915) (40) - - (955)
Transmission plant . . . . . (103,602) (11,057) 2,027 - (112,632)
Distribution plant . . . . . (27,105) (6,681) 3,295 - (30,491)
General plant. . . . . . . . (18,887) (4,240) 2,931 - (20,196)
Nuclear fuel . . . . . . . . (145,850) (48,996) 73,773 - (121,073)
Plant acquisition
adjustments. . . . . . . . (26,435) (1,061) - - (27,496)
Other miscellaneous. . . . . (5,926) (805) - - (6,731)
----------- --------- ------- ---- -----------
Total Accumulated
Provision For
Depreciation . . . . . . $(1,162,177) $(183,574) $86,886 $ - $(1,258,865)
----------- --------- ------- ---- -----------
----------- --------- ------- ---- -----------
- ----------------
<FN>
Notes:
(1) Amount of annual accrual charged to:
Expense $(171,431)
Other accounts (12,143)
---------
$(183,574)
---------
---------
(2) Property Retirements:
Book cost $ 87,581
Removal cost 2,617
Salvage materials (3,312)
---------
$ 86,886
---------
---------
82
SCHEDULE VI
OGLETHORPE POWER CORPORATION
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE YEAR ENDED DECEMBER 31, 1992
(DOLLARS IN THOUSANDS)
BALANCE RETIREMENTS ADJUSTMENTS BALANCE
BEGINNING ANNUAL LESS NET AND AT END
DESCRIPTION OF PERIOD ACCRUALS(1) SALVAGE(2) TRANSFERS OF PERIOD
- ----------- ---------- ----------- ----------- ----------- ---------
Production plant:
Steam. . . . . . . . . . . $ (262,639) $ (24,924) $ 2,115 $ - $ (285,448)
Nuclear. . . . . . . . . . (466,631) (84,093) 3,976 - (546,748)
Hydro. . . . . . . . . . . (1,010) (251) - - (1,261)
Other. . . . . . . . . . . (873) (42) - - (915)
Transmission plant . . . . . (96,070) (10,795) 3,263 - (103,602)
Distribution plant . . . . . (22,134) (6,165) 1,194 - (27,105)
General plant. . . . . . . . (15,469) (3,921) 503 - (18,887)
Nuclear fuel . . . . . . . . (181,833) (55,635) 91,618 - (145,850)
Plant acquisition
adjustments. . . . . . . . (25,229) (1,206) - - (26,435)
Other miscellaneous. . . . . (5,025) (901) - - (5,926)
----------- --------- -------- ---- -----------
Total Accumulated
Provision For
Depreciation . . . . . . . $(1,076,913) $(187,933) $102,669 $ - $(1,162,177)
----------- --------- -------- ---- -----------
----------- --------- -------- ---- -----------
- ----------------
<FN>
Notes:
(1) Amount of annual accrual charged to:
Expense $(170,916)
Other accounts (17,017)
---------
$(187,933)
---------
---------
(2) Property Retirements:
Book cost $103,215
Removal cost 1,538
Salvage materials (2,084)
---------
$102,669
---------
---------
83
SCHEDULE VI
OGLETHORPE POWER CORPORATION
ACCUMULATED PROVISION FOR DEPRECIATION OF UTILITY PLANT
FOR THE YEAR ENDED DECEMBER 31, 1991
(DOLLARS IN THOUSANDS)
BALANCE RETIREMENTS ADJUSTMENTS BALANCE
BEGINNING ANNUAL LESS NET AND AT END
DESCRIPTION OF PERIOD ACCRUALS(1) SALVAGE(2) TRANSFERS OF PERIOD
- ----------- ---------- ----------- ----------- ----------- ---------
Production plant:
Steam. . . . . . . . . . . $(237,102) $ (25,603) $ 66 $ - $ (262,639)
Nuclear. . . . . . . . . . (379,311) (93,931) 6,611 - (466,631)
Hydro. . . . . . . . . . . (756) (254) - - (1,010)
Other. . . . . . . . . . . (829) (44) - - (873)
Transmission plant . . . . . (86,901) (10,301) 1,132 - (96,070)
Distribution plant . . . . . (19,493) (5,229) 2,588 - (22,134)
General plant. . . . . . . . (11,731) (3,856) 118 - (15,469)
Nuclear fuel . . . . . . . . (169,122) (54,481) 41,770 - (181,833)
Plant acquisition
adjustments. . . . . . . . (23,970) (1,259) - - (25,229)
Other miscellaneous. . . . . (4,137) (888) - - (5,025)
--------- --------- ------- ---- -----------
Total Accumulated
Provision For
Depreciation . . . . . . $(933,352) $(195,846) $52,285 $ - $(1,076,913)
--------- --------- ------- ---- -----------
--------- --------- ------- ---- -----------
- ----------------
<FN>
Notes:
(1) Amount of annual accrual charged to:
Expense $(184,094)
Other accounts (11,752)
---------
$(195,846)
---------
(2) Property Retirements:
Book cost $ 53,047
Removal cost 1,631
Salvage materials (2,393)
---------
$ 52,285
---------
---------
84
SCHEDULE X
OGLETHORPE POWER CORPORATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN THOUSANDS)
COLUMN A COLUMN B
- -------- -----------------------
CHARGED TO COSTS AND EXPENSES
-----------------------------
ITEM 1993 1992 1991
---- ---- ---- ----
Maintenance & repairs. . . . . . . . . . . . . . $67,572 $57,890 $74,050
Taxes other than payroll and income taxes:
Real & personal property taxes . . . . . . . . 21,992 14,640 22,431
J
- -
85
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the 31st day of
March, 1994.
OGLETHORPE POWER CORPORATION
(AN ELECTRIC MEMBERSHIP GENERATION &
TRANSMISSION CORPORATION)
By: /s/ J. CALVIN EARWOOD
-----------------------------------------
J. CALVIN EARWOOD, CHAIRMAN OF THE BOARD
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. CALVIN EARWOOD Chairman of the Board, March 31, 1994
- --------------------------- Director (Principal Executive
J. CALVIN EARWOOD Officer)
/s/ T. D. KILGORE President and Chief Executive March 31, 1994
- --------------------------- Officer (Principal Executive
T. D. KILGORE Officer)
/s/ JOHN S. DEAN, SR. Secretary-Treasurer (Principal March 31, 1994
- --------------------------- Financial Officer)
JOHN S. DEAN, SR.
/s/ EUGEN HECKL Senior Vice President and Chief March 31, 1994
- --------------------------- Financial Officer (Principal
EUGEN HECKL Financial Officer)
/s/ LARRY N. BROWNLEE Controller March 31, 1994
- --------------------------- (Principal Accounting Officer)
LARRY N. BROWNLEE
/s/ JMON WARNOCK Director March 31, 1994
- ---------------------------
JMON WARNOCK
/s/ CHARLES R. FENDLEY Director March 31, 1994
- ---------------------------
CHARLES R. FENDLEY
/s/ GEORGE C. MARTIN Director March 31, 1994
- ---------------------------
GEORGE C. MARTIN
86
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. G. MCCALMON Director March 31, 1994
- ---------------------------
J. G. MCCALMON
/s/ D. A. ROBINSON, III Director March 31, 1994
- ---------------------------
D. A. ROBINSON, III
/s/ JAMES E. ESTES Director March 31, 1994
- ---------------------------
JAMES E. ESTES
/s/ LARRY N. CHADWICK Director March 31, 1994
- ---------------------------
LARRY N. CHADWICK
/s/ SIMMIE KING Director March 31, 1994
- ---------------------------
SIMMIE KING
/s/ W. F. FARR Director March 31, 1994
- ---------------------------
W. F. FARR
/s/ GARY T. DRAKE Alternate Director March 31, 1994
- ---------------------------
GARY T. DRAKE
/s/ JEFF S. PIERCE, JR. Director March 31, 1994
- ---------------------------
JEFF S. PIERCE, JR.
/s/ DONALD C. COOPER Director March 31, 1994
- ---------------------------
DONALD C. COOPER
/s/ HERBERT CHURCH Director March 31, 1994
- ---------------------------
HERBERT CHURCH
/s/ MAC F. OGLESBY Director March 31, 1994
- ---------------------------
MAC F. OGLESBY
/s/ BENNY W. DENHAM Director March 31, 1994
- ---------------------------
BENNY W. DENHAM
/s/ E. L. MCLOCKLIN Director March 31, 1994
- ---------------------------
E. L. MCLOCKLIN
/s/ SAM RABUN Director March 31, 1994
- ---------------------------
SAM RABUN
/s/ E. J. MARTIN, JR. Director March 31, 1994
- ---------------------------
E. J. MARTIN, JR.
87
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J. D. WILLIAMS Director March 31, 1994
- ---------------------------
J. D. WILLIAMS
/s/ RONNIE FLEEMAN Director March 31, 1994
- ---------------------------
RONNIE FLEEMAN
/s/ D. LAMAR COOPER Director March 31, 1994
- ---------------------------
D. LAMAR COOPER
/s/ BARRY H. MARTIN Director March 31, 1994
- ---------------------------
BARRY H. MARTIN
/s/ JOHN B. FLOYD, JR. Director March 31, 1994
- ---------------------------
JOHN B. FLOYD, JR.
/s/ STEVE RAWL, SR. Director March 31, 1994
- ---------------------------
STEVE RAWL, SR.
/s/ JAMES GRUBBS Director March 31, 1994
- ---------------------------
JAMES GRUBBS
/s/ SAMMY M. JENKINS Director March 31, 1994
- ---------------------------
SAMMY M. JENKINS
/s/ J. M. SHERRER Director March 31, 1994
- ---------------------------
J. M. SHERRER
/s/ JACK D. VICKERS Director March 31, 1994
- ---------------------------
JACK D. VICKERS
/s/ C. W. COX, JR. Director March 31, 1994
- ---------------------------
C. W. COX, JR.
/s/ JOHNNIE CRUMBLEY Director March 31, 1994
- ---------------------------
JOHNNIE CRUMBLEY
/s/ JARNETT W. WIGINGTON Director March 31, 1994
- ---------------------------
JARNETT W. WIGINGTON
/s/ BOB JERNIGAN Director March 31, 1994
- ---------------------------
BOB JERNIGAN
/s/ C. WILLARD MIMS Director March 31, 1994
- ---------------------------
C. WILLARD MIMS
/s/ JAMES E. DOOLEY Director March 31, 1994
- ---------------------------
JAMES E. DOOLEY
/s/ WILLIS T. WOODRUFF Director March 31, 1994
- ---------------------------
WILLIS T. WOODRUFF
88
SIGNATURE TITLE DATE
--------- ----- ----
/s/ HUBERT HANCOCK Director March 31, 1994
- ---------------------------
HUBERT HANCOCK
/s/ BOB J. DICKENS Director March 31, 1994
- ---------------------------
BOB J. DICKENS
/s/ W. W. ARCHER Director March 31, 1994
- ---------------------------
W. W. ARCHER
89
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.
The registrant is a membership corporation and has no authorized or outstanding
equity securities. Proxies are not solicited from the holders of Oglethorpe's
public bonds. No annual report or proxy material has been sent to such
bondholders.
90