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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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 Corporation)
(Exact name of registrant as specified in its charter)
Georgia 58-1211925
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Post Office Box 1349
2100 East Exchange Place
Tucker, Georgia 30085-1349
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 270-7600
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. The Registrant is a membership
corporation and has no authorized or outstanding equity securities.
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OGLETHORPE POWER CORPORATION
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2001
Page No.
--------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets as of March 31, 2001
(Unaudited) and December 31, 2000 3
Condensed Statements of Revenues and Expenses
(Unaudited) for the Three Months Ended
March 31, 2001 and 2000 5
Condensed Statements of Patronage Capital and Membership
Fees and Accumulated Other Comprehensive Margin
(Unaudited) for the Three Months Ended
March 31, 2001 and 2000 6
Condensed Statements of Cash Flows (Unaudited)
for the Three Months Ended March 31, 2001 and 2000 7
Notes to Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Oglethorpe Power Corporation
Condensed Balance Sheets
March 31, 2001 and December 31, 2000
- --------------------------------------------------------------------------------
(dollars in thousands)
2001 2000
Assets (Unaudited)
------------------------------------------
Electric plant, at original cost:
In service $ 4,885,727 $ 4,883,680
Less: Accumulated provision for depreciation (1,784,270) (1,752,176)
----------- -----------
3,101,457 3,131,504
Nuclear fuel, at amortized cost 79,546 83,470
Construction work in progress 33,164 24,841
----------- -----------
3,214,167 3,239,815
----------- -----------
Investments and funds:
Decommissioning fund, at market 143,858 148,300
Deposit on Rocky Mountain transactions, at cost 64,738 63,665
Bond, reserve and construction funds, at market 29,110 29,167
Investment in associated organizations, at cost 19,794 19,997
Other, at cost 1,513 1,513
----------- -----------
259,013 262,642
----------- -----------
Current assets:
Cash and temporary cash investments, at cost 274,284 330,622
Other short-term investments, at market 84,131 81,715
Receivables 102,951 143,353
Notes and interim financing receivables 121,107 38,548
Inventories, at average cost 84,191 75,389
Prepayments and other current assets 33,684 59,824
----------- -----------
700,348 729,451
----------- -----------
Deferred charges:
Premium and loss on reacquired debt, being amortized 171,955 175,944
Deferred amortization of Scherer leasehold 102,880 102,753
Discontinued projects, being amortized 8,731 9,490
Deferred debt expense, being amortized 16,662 16,968
Other 27,480 31,107
----------- -----------
327,708 336,262
----------- -----------
$ 4,501,236 $ 4,568,170
=========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Oglethorpe Power Corporation
Condensed Balance Sheets
March 31, 2001 and December 31, 2000
- --------------------------------------------------------------------------------
(dollars in thousands)
2001 2000
Equity and Liabilities (Unaudited)
-----------------------------------------
Capitalization:
Patronage capital and membership fees and accumulated
other comprehensive margin $371,668 $392,682
Long-term debt 2,976,318 3,019,019
Obligation under capital leases 265,313 267,449
Obligation under Rocky Mountain transactions 64,738 63,665
----------------- ----------------
3,678,037 3,742,815
----------------- ----------------
Current liabilities:
Long-term debt and capital leases due within one year 138,713 136,053
Accounts payable 57,633 114,964
Notes payable 130,317 78,482
Accrued interest 49,312 67,394
Accrued and withheld taxes 6,649 674
Other current liabilities 6,080 23,017
----------------- ----------------
388,704 420,584
----------------- ----------------
Deferred credits and other liabilities:
Gain on sale of plant, being amortized 52,714 53,332
Net benefit of sale of income tax benefits, being amortized 8,009 10,012
Net benefit of Rocky Mountain transactions, being amortized 82,022 82,819
Accumulated deferred income taxes 63,485 63,485
Decommissioning reserve 169,331 174,553
Interest rate swap arrangements 37,443 -
Other 21,491 20,570
----------------- ----------------
434,495 404,771
----------------- ----------------
$4,501,236 $4,568,170
================= ================
The accompanying notes are an integral part of these condensed financial
statements.
4
Oglethorpe Power Corporation
Condensed Statements of Revenues and Expenses (Unaudited)
For the Three Months Ended March 31, 2001 and 2000
- --------------------------------------------------------------------------------
(dollars in thousands)
2001 2000
----------- ------------
Operating revenues:
Sales to Members $296,506 $264,705
Sales to non-Members 10,101 10,177
----------- ------------
Total operating revenues 306,607 274,882
----------- ------------
Operating expenses:
Fuel 44,180 49,112
Production 54,221 58,993
Purchased power 111,838 72,514
Depreciation and amortization 32,113 32,736
----------- ------------
Total operating expenses 242,352 213,355
----------- ------------
Operating margin 64,255 61,527
----------- ------------
Other income (expense):
Investment income 10,249 8,949
Amortization of deferred gains 619 619
Amortization of proceeds from sale of income tax benefits 2,799 2,799
Allowance for equity funds used during construction 24 12
Other 682 259
----------- ------------
Total other income 14,373 12,638
----------- ------------
Interest charges:
Interest on long-term-debt and capital leases 53,558 55,237
Other interest 4,743 4,539
Allowance for debt funds used during construction (351) (99)
Amortization of debt discount and expense 5,395 5,300
----------- ------------
Net interest charges 63,345 64,977
----------- ------------
Net margin $15,283 $9,188
=========== ============
The accompanying notes are an integral part of these financial statements.
5
Condensed Statements of Patronage Capital and Membership Fees and
Accumulated Other Comprehensive Margin (Unaudited)
For the Three Months Ended March 31, 2001 and 2000
- --------------------------------------------------------------------------------
(dollars in thousands)
Patronage Accumulated
Capital and Other
Membership Comprehensive
Fees Margin (Loss) Total
---------------------------------------------------
Balance at December 31, 1999 $ 371,634 ($ 1,609) $ 370,025
Components of comprehensive margin:
Net margin 9,188 9,188
Unrealized gain on available-for-sale securities 174 174
---------
Total comprehensive margin 9,362
---------
--------- --------- ---------
Balance at March 31, 2000 $ 380,822 ($ 1,435) $ 379,387
========= ========= =========
Balance at December 31, 2000 $ 391,611 $ 1,071 $ 392,682
Components of comprehensive margin:
Net margin 15,283 15,283
Cumulative effect of accounting change to record unrealized
loss on interest rate swap arrangements as of January 1, 2001 (33,515) (33,515)
Unrealized loss on interest rate swap arrangements (3,928) (3,928)
Unrealized gain on available-for-sale securities 1,146 1,146
---------
Total comprehensive margin (loss) (21,014)
---------
--------- -------- ---------
Balance at March 31, 2001 $ 406,894 ($ 35,226) $ 371,668
========= ========= =========
The accompanying notes are an integral part of these condensed financial
statements.
6
Oglethorpe Power Corporation
Condensed Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2001 and 2000
- --------------------------------------------------------------------------------
(dollars in thousands)
2001 2000
---------------------------------------------
Cash flows from operating activities:
Net margin $15,283 $9,188
---------------- ---------------
Adjustments to reconcile net margin to net cash
provided by operating activities:
Depreciation and amortization 47,130 51,244
Allowance for equity funds used during construction (24) (12)
Amortization of deferred gains (619) (619)
Amortization of net benefit of sale of income tax benefits (2,799) (2,799)
Deferred income taxes - 283
Other (857) 3,341
Change in net current assets, excluding long-term debt
and capital leases due within one year and notes payable:
Notes receivable 121 200
Receivables 40,402 2,017
Inventories (8,802) 5,482
Prepayments and other current assets (2,804) (2,174)
Accounts payable (57,331) (14,144)
Accrued interest (18,082) (35,718)
Accrued and withheld taxes 5,975 6,698
Other current liabilities (16,937) (1,277)
---------------- ---------------
Total adjustments (14,627) 12,522
---------------- ---------------
Net cash provided by operating activities 656 21,710
---------------- ---------------
Cash flows from investing activities:
Property additions (11,075) (14,582)
Net proceeds from bond, reserve and construction funds 399 3,013
Decrease in investment in associated organizations 203 131
Increase in other short-term investments (1,613) (930)
Increase in decommissioning fund (3,100) (2,861)
Other-generation equipment deposits (4,784) -
---------------- ---------------
Net cash used in investing activities (19,970) (15,229)
---------------- ---------------
Cash flows from financing activities:
Long-term debt proceeds, net 325 (2,957)
Long-term debt payments (40,233) (60,685)
Increase in notes payable 51,835 41,774
Increase in notes receivable under interim financing agreement (48,951) (42,405)
---------------- ---------------
Net cash used in financing activities (37,024) (64,273)
---------------- ---------------
Net decrease in cash and temporary cash investments (56,338) (57,792)
Cash and temporary cash investments at beginning of period 330,622 222,814
---------------- ---------------
Cash and temporary cash investments at end of period $274,284 $165,022
================ ===============
Cash paid for:
Interest (net of amounts capitalized) $73,497 $93,058
Income taxes - -
The accompanying notes are an integral part of these condensed financial
statements.
7
Oglethorpe Power Corporation
Notes to Condensed Financial Statements
March 31, 2001 and 2000
(A) The condensed financial statements included in this report have been
prepared by Oglethorpe Power Corporation (Oglethorpe), without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). In the opinion of management, the information furnished
in this report reflects all adjustments (which include only normal
recurring adjustments) and estimates necessary to present fairly, in all
material respects, the results for the periods ended March 31, 2001 and
2000. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to SEC rules
and regulations, although Oglethorpe believes that the disclosures are
adequate to make the information presented not misleading. These condensed
financial statements should be read in conjunction with the financial
statements and the notes thereto included in Oglethorpe's latest Annual
Report on Form 10-K, as filed with the SEC. Certain amounts for 2000 have
been reclassified to conform with the current period presentation. The
results of operations for the three month period ended March 31, 2001 are
not necessarily indicative of results to be expected for the full year.
(B) Effective January 1, 2001, Oglethorpe adopted Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The standard establishes accounting and reporting
requirements for derivative instruments, including certain derivative
instruments embedded in other contracts, and hedging activities. It
requires the recognition of certain derivatives as assets or liabilities on
Oglethorpe's balance sheet and measurement of those instruments at fair
value. The accounting treatment of changes in fair value is dependent upon
whether or not a derivative instrument is classified as a hedge and if so,
the type of hedge. Oglethorpe has classified, pursuant to SFAS No. 133, the
interest rate swap arrangements as cash flow hedges. Accordingly, as of
January 1, 2001 Oglethorpe recorded as a cumulative effect adjustment an
unrealized loss in comprehensive margin of $33.5 million and a
corresponding increase in other liabilities.
The application of the new rules for SFAS No. 133 is still evolving and
further guidance from the Financial Accounting Standards Board is expected
which could further impact Oglethorpe's financial statements. In addition,
Oglethorpe will continue to evaluate use of derivatives, including their
effectiveness for hedging, and to apply appropriate procedures and methods
for valuing them.
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
For the Three Months Ended March 31, 2001 and 2000
- --------------------------------------------------
Net Margin
Oglethorpe's net margin for the three months ended March 31, 2001 was $15.3
million compared to $9.2 million for the same period of 2000. The higher net
margin for the current period resulted primarily from lower than budgeted
production expenses.
Operating Revenues
Revenues from sales to Oglethorpe's 39 retail electric distribution cooperative
members (the Members) for the three months ended March 31, 2001 were 12.0%
higher than such revenues for the first three months of 2000. Megawatt-hour
(MWh) sales to Members were 8.1% higher in the current three-month period
compared to the same period of 2000. The increase in MWh sales to Members in
2001 compared to 2000 was primarily due to continued sales growth in the
Members' service territories. The average revenue per MWh from sales to Members
was 3.6% higher for the current period than in the same period of 2000.
The components of Member revenues for the three months ended March 31, 2001 and
2000 were as follows:
Three Months
Ended March 31,
--------------
2001 2000
---- ----
(dollars in thousands)
Capacity revenues $158,478 $155,316
Energy revenues 138,028 109,389
-------- --------
Total $296,506 $264,705
======== ========
While capacity revenues from Members for the three months ended March 31, 2001
compared to 2000 increased slightly, energy revenues were 26.2% higher for the
current period compared to the same period of 2000. The increase in energy
revenues in 2001 was partly due to the pass-through of higher purchased power
energy costs and partly due to the increase in the volume of purchased MWhs (see
"Operating Expenses" below). Oglethorpe's average energy revenue per MWh from
sales to Members was 16.7% higher in the current three-month period compared to
the same period of 2000.
Sales to non-Members were primarily from energy sales to other utilities and
9
power marketers. The following table summarizes the amounts of non-Member
revenues from these sources for the three months ended March 31, 2001 and 2000:
Three Months
Ended March 31,
--------------
2001 2000
---- ----
(dollars in thousands)
Sales to other utilities $ 8,156 $ 8,576
Sales to power marketers 1,945 1,601
----- -----
Total $10,101 $10,177
======= =======
Sales to other utilities represent sales made directly by Oglethorpe. Oglethorpe
sells for its own account any energy available from the portion of its resources
dedicated to Morgan Stanley Capital Group Inc. (Morgan Stanley) that is not
scheduled by Morgan Stanley pursuant to its power marketer arrangement.
Sales to the power marketers represent the net energy transmitted on behalf of
LG&E Energy Marketing Inc. (LEM) and Morgan Stanley off-system on a daily basis
from Oglethorpe's total resources under the LEM and Morgan Stanley power
marketer arrangements. Oglethorpe sold this energy to LEM at Oglethorpe's cost,
subject to certain limitations, and to Morgan Stanley at a contractually fixed
price. The volume of sales to power marketers depends primarily on the power
marketers' decisions for servicing their load requirements.
Operating Expenses
Operating expenses for the first quarter of 2001 were 13.6% higher compared to
the same period of 2000. The increase was due to higher purchased power costs
for the three-month period ended March 31, 2001 compared to the same period of
2000, offset somewhat by decreases in fuel costs and production costs for the
first quarter of 2001 compared to the same period of 2000.
Purchased power costs increased 54.2% in the current quarter compared to the
same period of 2000. This was primarily due a 36.5% increase in purchased MWhs
in 2001 compared to the same period of 2000. In addition, the average cost per
MWh of total purchased power increased 13.0% in 2001 compared to the comparable
period of 2000. Purchased power costs were as follows:
Three Months
Ended March 31,
--------------
2001 2000
---- ----
(dollars in thousands)
Capacity costs $ 24,918 $ 21,611
Energy costs 86,920 50,903
------ ------
Total $111,838 $ 72,514
======== ========
10
Purchased power capacity costs for the three months ended March 31, 2001 were
15.3% higher than the same period of 2000. The higher capacity costs were
primarily a result of capacity charges incurred for new power purchase
agreements, including an agreement with Doyle I, LLC commencing in May 2000.
Purchased power energy costs for the three-month period of 2001 were 70.8%
higher compared to the same period of 2000. This increase primarily resulted
from the higher volume of purchased MWhs. In addition, higher prices in the
wholesale electricity markets during the first quarter of 2001 resulted in a
25.1% increase in the average cost of purchased power energy per MWh for the
three-month period of 2001 compared to 2000.
Production costs decreased 8.1% in the current quarter compared to the same
period of 2000. The lower production costs in 2001 resulted from lower operation
and maintenance (O&M) expenses at Plants Scherer and Wansley. O&M expenses for
Plant Scherer were higher in 2000 due to a $1.6 million true up for sharing of
O&M expenses between the owners of Units No. 3 and 4 related to the burning of
western coal. The lower O&M expenses in 2001 at Plant Wansley were due to lower
maintenance outage costs at Unit No. 2 in the first quarter of 2001 compared to
the same quarter of 2000.
For the current three-month period compared to the same period of 2000 total
fuel costs decreased 10.0% while total generation decreased only 1.1%. For the
current three-month period, nuclear generation was 8.1% higher and fossil
generation was 11.6% lower as compared to the same period of 2000. The larger
portion of nuclear generation, with its lower average fuel cost compared to
fossil generation, yielded a 9.1% decrease in average fuel cost.
Other Income
Investment income increased 14.5% in the current three-month period compared to
the same period of 2000 primarily due to higher cash and temporary cash
investment balances.
11
Financial Condition
Capital Requirements and Liquidity and Sources of Capital
- ---------------------------------------------------------
Under the Wholesale Power Contracts, Members can elect on an annual basis
whether to have Oglethorpe provide joint planning and resource management
services. See "OGLETHORPE'S POWER SUPPLY RESOURCES--Future Power Resources" in
Item 1 of Oglethorpe's 2000 Annual Report on Form 10-K. Oglethorpe is in the
process of arranging the necessary power supply for Members that currently
participate in joint planning and resource management services. In this regard,
Oglethorpe has entered into agreements to acquire and construct six gas-fired
combustion turbines designed to provide 618 MW of capacity and a gas-fired
combined cycle facility designed to provide 468 MW of capacity. Four of the
combustion turbines are scheduled for completion in 2002, with the other two to
be completed in 2003. The combined cycle facility is scheduled for completion in
2003. Oglethorpe expects that these facilities will ultimately be owned by two
separate entities, which will be owned by those Members who participate in these
facilities.
Oglethorpe is currently providing interim financing for the construction of
these facilities. As of March 31, $116.8 million of commercial paper was
outstanding for this purpose. Oglethorpe expects to issue the maximum amount of
its commercial paper ($260 million) by the fall of 2001 in conjunction with the
interim financing of these new generation facilities. Oglethorpe has submitted
loan applications to the Rural Utilities Service (RUS) to provide financing for
these projects and expects a response from RUS later in 2001. The loan
applications were made on behalf of any entity that may ultimately own these
facilities. If RUS funding is delayed or denied, Oglethorpe will continue to
finance these projects with funds from operations and will seek additional
construction financing until permanent financing is obtained.
Oglethorpe also continues to make payments under an agreement to purchase
equipment for a gas-fired combined cycle facility. As of March 31, 2001,
Oglethorpe had $14.3 million of commercial paper outstanding relating to
payments under this agreement. Oglethorpe is pursuing a sale of this equipment,
but will continue to make payments under the agreement until the equipment is
sold.
See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS--Financial Condition--Capital Requirements" and "--Liquidity and
Sources of Capital" in Item 7 of Oglethorpe's 2000 Annual Report on Form 10-K.
General
- -------
Total assets and total equity plus liabilities as of March 31, 2001 were $4.5
billion, which was $66.9 million less than the total at December 31, 2000. The
decrease was due primarily to depreciation of plant, and to decreases in
receivables and cash and temporary cash investments, offset somewhat by
additions to construction work in progress.
12
Assets
Property additions for the three months ended March 31, 2001 totaled $11.1
million primarily for purchases of nuclear fuel and for additions, replacements,
and improvements to existing generation facilities.
The decrease in cash and temporary cash investments was a result of cash used in
financing and investing activities, including debt principal repayments,
exceeding cash provided from operations.
The decrease in receivables is primarily due to a cold December, which resulted
in higher energy charges billed to Members at December 31, 2000 than at March
31, 2001.
The increase in notes and interim financing receivable is primarily due to the
construction of new generating facilities as discussed above. Oglethorpe expects
that these facilities will ultimately be owned by two separate entities, which
will be owned by those Members who participate in these facilities.
Inventories increased primarily as a result of the seasonal buildup of the coal
stockpiles at plants Scherer and Wansley in preparation for the summer peak
period.
The decrease in prepayments and other current assets was primarily due to the
reclassification of $33.8 million in equipment to notes and interim financing
receivables. See above for discussion of notes and interim financing
receivables.
The decrease in other deferred charges was due to the amortization of nuclear
outage costs exceeding additional nuclear outage costs.
Equity and Liabilities
Accounts payable decreased principally due to the accrual of lower off-system
energy charges at March 31, 2001 as compared to December 31, 2000. Due to the
cold weather in December, off-system energy purchases were significantly higher
in December. In addition, accruals for Georgia Power Company charges were lower
at March 31, 2001.
The increase in notes payable was attributable to commercial paper issued by
Oglethorpe as interim financing for costs incurred in the construction of the
future generation facilities discussed above. (See "Capital Requirements and
Liquidity and Sources of Capital" above for a discussion regarding permanent
financing of these projects.)
The decrease in accrued interest primarily resulted from an interest payment
associated with the lease of Plant Scherer Unit No. 2, and to a lesser extent,
interest payments associated with certain Pollution Control Bonds. These
payments were made January 2, 2001 for interest accrued during the previous six
months.
13
Accrued and withheld taxes increased as a result of the normal monthly accruals
for property taxes, which are generally paid in the fourth quarter of the year.
The decrease in other current liabilities resulted primarily from lower negative
cash balances at March 31, 2001 as compared to December 31, 2000, and for
payment of year-end accruals.
The interest rate swap arrangements represent an unrealized loss from adoption
of SFAS No. 133. For further discussion see Note B of Notes to Condensed
Financial Statements.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-Q contains forward-looking statements,
including statements regarding, among other items, (i) anticipated trends in
Oglethorpe's business and (ii) Oglethorpe's future capital requirements and
sources of capital. These forward-looking statements are based largely on
Oglethorpe's current expectations and are subject to a number of risks and
uncertainties, certain of which are beyond Oglethorpe's control. For factors
that could cause actual results to differ materially from those anticipated by
these forward-looking statements, see "OGLETHORPE'S POWER SUPPLY
RESOURCES--Future Power Resources," "FACTORS AFFECTING THE ELECTRIC UTILITY
INDUSTRY" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS--Miscellaneous--Competition" in Items 1 and 7 of
Oglethorpe's 2000 Annual Report on Form 10-K. In light of these risks and
uncertainties, there can be no assurance that events anticipated by the
forward-looking statements contained in this Quarterly Report will in fact
transpire.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Changes in Risk Exposure
In April 2001, Oglethorpe entered into two swap agreements with respect to
specified quantities of natural gas in 2002 and 2003. Under the agreements,
Oglethorpe pays the counterparty at a fixed price and receives a payment based
on a market price index for natural gas. These payment obligations are netted,
such that if the market price index is lower than the fixed price, Oglethorpe
will make a net payment, and if the market price index is higher than the fixed
price, Oglethorpe will receive a net payment. Oglethorpe will pass through an
applicable portion of the costs and benefits of this agreement to Smarr EMC and
to a new entity that will own the combustion turbines scheduled for completion
in 2002 and 2003. See "Financial Condition--Capital Requirements and Sources of
Capital" in Item 2 above and "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK--Commodity Price Risk" in Item 7A of Oglethorpe's 2000 Annual Report
on Form 10-K. Oglethorpe's market price risk exposure on these agreements is not
material. Oglethorpe may enter into similar agreements regarding natural gas in
the future.
14
Oglethorpe's market risks have not changed materially from the market risks
reported in Oglethorpe's 2000 Annual Report on Form 10-K. For information
regarding Oglethorpe's risk management policies, see Item 7A of Oglethorpe's
Annual Report on Form 10-K.
15
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by Oglethorpe for the quarter ended March
31, 2001.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Oglethorpe Power Corporation
(An Electric Membership Corporation)
Date: May 15, 2001 By: /s/ Thomas A. Smith
-------------------
Thomas A. Smith
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 15, 2001 /s/ Mac F. Oglesby
------------------
Mac F. Oglesby
Treasurer
(Principal Financial Officer)
Date: May 15, 2001 /s/ W. Clayton Robbins
----------------------
W. Clayton Robbins
Senior Vice President, Finance and Administration
(Principal Financial Officer)
Date: May 15, 2001 /s/ Willie B. Collins
---------------------
Willie B. Collins
Controller
(Chief Accounting Officer)
17