-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TcTWPQdH/OzPssRSkwCaBREAOPMABBpgkdDDXmEDrfgjYquYV0ULnUi76GNx0wkJ Yw5rGuyP8pwwv/Z0cpxrVA== 0000912057-96-009953.txt : 19960517 0000912057-96-009953.hdr.sgml : 19960517 ACCESSION NUMBER: 0000912057-96-009953 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OGLETHORPE POWER CORP CENTRAL INDEX KEY: 0000788816 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 581211925 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-07591 FILM NUMBER: 96567159 BUSINESS ADDRESS: STREET 1: 2100 EAST EXCHANGE PL STREET 2: P O BOX 1349 CITY: TUCKER STATE: GA ZIP: 30085-1349 BUSINESS PHONE: 4042707600 10-Q 1 FORM 10-Q ============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ 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, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO _____________ ____________________ COMMISSION FILE NO. 33-7591 OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP GENERATION & TRANSMISSION CORPORATION) (Exact name of registrant as specified in its charter) GEORGIA 58-1211925 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) POST OFFICE BOX 1349 2100 EAST EXCHANGE PLACE TUCKER, GEORGIA 30085-1349 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (770) 270-7600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject of such filing requirements for the past 90 days. YES X NO ----- ----- Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. THE REGISTRANT IS A MEMBERSHIP CORPORATION AND HAS NO AUTHORIZED OR OUTSTANDING EQUITY SECURITIES. ============================================================================== OGLETHORPE POWER CORPORATION INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996 PAGE NO. PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets as of March 31, 1996 (Unaudited) and December 31, 1995 3 Condensed Statements of Revenues and Expenses (Unaudited) for the Three Months Ended March 31, 1996 and 1995 5 Condensed Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 1996 and 1995 6 Notes to the Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 2
PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS OGLETHORPE POWER CORPORATION CONDENSED BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 - ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ASSETS (Unaudited) -------------------------- ELECTRIC PLANT, AT ORIGINAL COST: In service $5,696,887 $5,699,213 Less: Accumulated provision for depreciation (1,389,588) (1,362,431) ---------- ---------- 4,307,299 4,336,782 Nuclear fuel, at amortized cost 96,075 94,013 Plant acquisition adjustments, at amortized cost 4,949 5,214 Construction work in progress 41,617 35,753 ---------- ---------- 4,449,940 4,471,762 ---------- ---------- INVESTMENTS AND FUNDS: Bond, reserve and construction funds, at market 53,079 56,511 Decommissioning fund, at market 75,652 74,492 Investment in associated organizations, at cost 15,502 15,853 ---------- ---------- 144,233 146,856 ---------- ---------- CURRENT ASSETS: Cash and temporary cash investments, at cost 148,146 201,151 Other short-term investments, at market 89,118 79,165 Receivables 100,927 99,559 Inventories, at average cost 86,086 82,949 Prepayments and other current assets 17,325 14,325 ---------- ---------- 441,602 477,149 ---------- ---------- DEFERRED CHARGES: Premium and loss on reacquired debt, being amortized 207,663 200,794 Deferred amortization of Scherer leasehold 87,994 87,134 Discontinued projects, being amortized 23,795 24,305 Deferred debt expense, being amortized 20,905 21,135 Other 15,772 9,361 ---------- ---------- 356,129 342,729 ---------- ---------- $5,391,904 $5,438,496 ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these condensed statements. 3
OGLETHORPE POWER CORPORATION CONDENSED BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 - ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 EQUITIES AND LIABILITIES (Unaudited) ------------------------- CAPITALIZATION: Patronage capital and membership fees (including unrealized gains of $2,488 at March 31, 1996 and $3,570 at December 31, 1995 on available-for-sale securities) $346,797 $338,891 Long-term debt 4,181,779 4,207,320 Obligations under capital leases 295,779 296,478 ---------- ---------- 4,824,355 4,842,689 ---------- ---------- CURRENT LIABILITIES: Long-term debt and capital leases due within one year 98,485 89,675 Deferred margins to be refunded within one year 21,859 32,047 Accounts payable 39,759 48,855 Accrued interest 72,433 91,096 Accrued and withheld taxes 8,165 1,785 Other current liabilities 12,775 18,007 ---------- ---------- 253,476 281,465 ---------- ---------- DEFERRED CREDITS AND OTHER LIABILITIES: Gain on sale of plant, being amortized 60,283 60,868 Sale of income tax benefits, being amortized 48,186 50,194 Accumulated deferred income taxes 65,510 65,510 Decommissioning reserve 115,688 114,049 Other 24,406 23,721 ---------- ---------- 314,073 314,342 ---------- ---------- $5,391,904 $5,438,496 ---------- ---------- ---------- ----------
The accompanying notes are an integral part of these condensed statements. 4
OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF REVENUES AND EXPENSES (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 - ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ------------------------------ OPERATING REVENUES: Sales to Members $ 246,458 $ 227,849 Sales to non-Members 29,243 29,698 --------- --------- TOTAL OPERATING REVENUES 275,701 257,547 --------- --------- OPERATING EXPENSES: Fuel 48,240 47,517 Production 30,369 32,243 Purchased power 69,076 59,947 Power delivery 3,658 3,921 Depreciation and amortization 36,526 32,884 Taxes other than income taxes 7,384 5,891 Other operating expenses 6,880 6,462 --------- --------- TOTAL OPERATING EXPENSES 202,133 188,865 --------- --------- OPERATING MARGIN 73,568 68,682 --------- --------- OTHER INCOME (EXPENSE): Interest income 4,060 3,312 Amortization of deferred margins 10,188 6,462 Allowance for equity funds used during construction 47 761 Other 2,642 2,834 --------- --------- TOTAL OTHER INCOME 16,937 13,369 --------- --------- INTEREST CHARGES: Interest on long-term-debt and other obligations 82,031 83,008 Allowance for debt funds used during construction (514) (9,419) --------- --------- NET INTEREST CHARGES 81,517 73,589 --------- --------- NET MARGIN $ 8,988 $ 8,462 --------- --------- --------- ---------
The accompanying notes are an integral part of these condensed statements. 5
OGLETHORPE POWER CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995 - ------------------------------------------------------------------------------------- (dollars in thousands) 1996 1995 ----------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net margin $ 8,988 $ 8,462 -------- -------- ADJUSTMENTS TO RECONCILE NET MARGIN TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation and amortization 39,425 47,704 Amortization of deferred margins (10,188) (6,462) Allowance for equity funds used during construction (47) (761) Other (859) (843) CHANGE IN NET CURRENT ASSETS, EXCLUDING LONG-TERM DEBT DUE WITHIN ONE YEAR AND DEFERRED MARGINS TO BE REFUNDED WITHIN ONE YEAR: Receivables (1,368) (1,484) Inventories (3,137) (8,291) Prepayments and other current assets (3,000) 3,465 Accounts payable (9,096) (11,099) Accrued interest 6,380 6,235 Accrued and withheld taxes (18,663) (79,781) Other current liabilities (5,232) (7,260) -------- -------- TOTAL ADJUSTMENTS (5,785) (58,577) -------- -------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 3,203 (50,115) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property additions (24,824) (36,086) Net proceeds from bond, reserve and construction funds 2,397 11,712 Decrease in investment in associated organizations 351 636 Increase in other short-term investments (10,000) (17,107) Increase (decrease) in decommissioning fund 729 (1,041) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (31,347) (41,886) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Debt proceeds, net - 88,545 Debt payments (25,366) (124,534) Other 505 (412) -------- -------- NET CASH USED IN FINANCING ACTIVITIES (24,861) (36,401) -------- -------- NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS (53,005) (128,402) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 201,151 190,642 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $148,146 $ 62,240 ======== ======== CASH PAID FOR: Interest (net of amounts capitalized) $96,769 $149,265 Income taxes - -
The accompanying notes are an integral part of these condensed statements. 6 OGLETHORPE POWER CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS MARCH 31, 1996 AND 1995 (A) The condensed financial statements included herein have been prepared by Oglethorpe Power Corporation (Oglethorpe), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the information furnished herein reflects all adjustments (which included only normal recurring adjustments) necessary to present fairly, in all material respects, the results for the periods ended March 31, 1996 and 1995. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such SEC rules and regulations, although Oglethorpe believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in Oglethorpe's latest Annual Report on Form 10-K, as filed with the SEC. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL As a means of reducing the cost of power provided to the Members, on January 3, 1996, Oglethorpe entered into a power supply swap agreement with Enron Power Marketing, Inc. (EPMI). The agreement, effective January 4, 1996 through April 30, 1996, required EPMI to sell to Oglethorpe at a favorable fixed rate all the energy necessary to meet the Members' requirements. Pursuant to the agreement, Oglethorpe was required to sell to EPMI at cost, subject to certain limitations, upon request all energy available from Oglethorpe's total power resources. Under the agreement, Oglethorpe maintained the responsibility of operating the power supply system and continued to dispatch the generating resources to ensure system reliability. See "OPERATING REVENUES" and "OPERATING EXPENSES" below for a discussion of the impact of the power supply swap agreement on first quarter 1996 results of operations. On April 30, 1996, Oglethorpe and EPMI entered into an agreement which extended the term of this power supply swap agreement, with certain modifications, from May 1, 1996 through August 31, 1996. On February 7, 1996, Oglethorpe issued a Request for Proposals (RFP) to selected bidders for a long-term power supply arrangement. This RFP did not seek a specific amount of power; instead, it requested proposals for meeting the combined power needs of the Members with term options ranging from two to 15 years. Currently, discussions are focused on proposals from EPMI, LG&E Power Marketing Inc. and a joint proposal from Duke/Louis Dreyfus LLC & Georgia Power Company (GPC). The current four-month agreement with EPMI will provide the energy needed to serve the Members while Oglethorpe finalizes a long-term power supply arrangement. RESULTS OF OPERATIONS Oglethorpe's net margin for the quarter ended March 31, 1996 was $9.0 million compared to $8.5 million for the first quarter of 1995. OPERATING REVENUES The increase in Member revenues for the three months ended March 31, 1996 compared to the same period of 1995 was due to the recovery of additional fixed costs of the Rocky Mountain Project (Rocky Mountain) and the increased fixed cost responsibility resulting from the scheduled end of Sell-back revenues from GPC under the plant operating agreements (discussed below). Energy revenues from sales to Members for the three-month period of 1996 were virtually unchanged from the same period of the prior year despite the fact that megawatt-hour (MWh) sales increased 15.5% due to prolonged colder than normal weather. Oglethorpe achieved substantial savings in energy costs in the first quarter under the power supply swap agreement with EPMI which were passed through to the Members. Oglethorpe's average energy revenue per MWh for the first quarter of 1996 was 14% less than the same period of 1995. 8 Sales to non-Members were primarily made pursuant to three different types of contractual arrangements with GPC and from energy sales to other non-Member utilities. The following table summarizes the amounts of non-Member revenues from these sources for the three months ended March 31, 1996 and 1995:
Three Months Ended March 31, 1996 1995 -------------------------- (dollars in thousands) Plant operating agreements $ - $ 5,892 Power supply arrangements 4,718 7,316 Transmission agreements 3,372 2,995 Other utilities 21,153 13,495 ------- ------- Total $29,243 $29,698 ======= =======
While total revenues from non-Members were virtually the same, revenues from sales to utilities other than GPC increased significantly and revenues from the plant operating agreements and power supply arrangements with GPC were significantly lower. Under the plant operating agreements, GPC purchased capacity and energy from Oglethorpe on a declining scale in the early years of operation of certain co-owned generating units. As scheduled, effective June 1, 1995, revenues from GPC pursuant to the plant operating agreements ended. The second source of non-Member revenues is derived pursuant to power supply arrangements with GPC. These revenues are derived from energy sales arising from dispatch situations whereby GPC causes Plant Wansley to be operated when Oglethorpe's system does not require all of its contractual entitlement to the generation. These revenues compensate Oglethorpe for its costs since, under the operating agreements, Oglethorpe is responsible for its share of fuel costs any time a unit operates. Such sales were significantly lower in the first quarter of 1996 compared to the same period of 1995. Revenues from sales to non-Member utilities (other than GPC) increased substantially due to a 12.5% increase in MWh sales in the three months ended March 31, 1996 compared to the same period of 1995. As discussed under "General" above, this increase was due to EPMI marketing available energy from Oglethorpe's total power resources. Under the power supply swap agreement, sales to non-Member utilities are effectively transacted with EPMI while in 1995 these sales were made by Oglethorpe directly with the non-Member utilities. All profits on sales made by EPMI to other utilities from Oglethorpe's resources accrue to EPMI. OPERATING EXPENSES The increase in operating expenses for the three months ended March 31, 1996 compared to the same period of 1995 was primarily attributable to an increase in purchased power. In 1996, purchased power energy costs and MWhs increased by 42% and 39%, respectively, as EPMI utilized purchased resources to provide Oglethorpe's Member load and for increased sales to other utilities. 9 Depreciation and amortization and taxes other than income taxes (property taxes) increased due to the commercial operation of Rocky Mountain in June 1995. OTHER INCOME Other income for the first quarter of 1996 increased compared to the same period of 1995 primarily as a result of higher income from amortization of deferred margins. Oglethorpe's Board of Directors authorizes the amount of deferred margins to be returned to the Members each year. For 1996, the remaining amount of $32 million was authorized as compared to $16 million for 1995. Interest income increased due to higher average cash balances during the first quarter of 1996 compared to the same period of 1995. INTEREST CHARGES The increase in net interest charges for the three months ended March 31, 1996 compared to 1995 resulted from Rocky Mountain becoming commercially operable in June 1995. FINANCIAL CONDITION Total assets and total equity plus liabilities as of March 31, 1996 were $5.4 billion which was $47 million less than the total at December 31, 1995. ASSETS Property additions for the three months ended March 31, 1996 totaled $25 million and included additions, replacements and improvements to transmission and distribution facilities and existing generation facilities. The decrease in cash and temporary cash investments was partly due to property additions funded from cash, premiums paid on refinanced debt and scheduled debt service payments. Other short-term investments represent investments whose maturity periods exceed Oglethorpe's policy of three months for classification as cash equivalents. During the first quarter of 1996, an additional $10 million was transferred into investments with maturities of more than three months. Prepayments and other current assets increased primarily due to a $3 million increase in the payment made to GPC for estimates of Plant Hatch and Plant Wansley operations and maintenance costs for April 1996 compared to the estimate paid for January 1996. The increase in other deferred charges primarily resulted from the deferral of $6.3 million of nuclear refueling outage costs related to Vogtle Unit No. 1 and Hatch Unit No. 1 which will be recovered through rates over a period of eighteen months. 10 EQUITY AND LIABILITIES Deferred margins to be refunded within one year decreased by $10.2 million which is the amount that was refunded to the Members for the first three months of 1996. Accounts payable declined as of March 31, 1996 as a result of normal variations in the timing of payables activity. Accrued interest decreased primarily due to normal payments and accruals of interest. Accrued and withheld taxes increased as a result of the normal monthly accruals of property taxes, which are generally paid in the fourth quarter of the year. Other current liabilities decreased partly due to the year-end accrual for employee incentive pay (subsequently paid in March 1996) and partly due to normal activity. 11 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS Number Description - ----------- ----------- *10.27(a) Extension and Modification Agreement between Enron Power Marketing, Inc. and Oglethorpe, dated as of April 30, 1996. 27.1 Financial Data Schedule (for SEC use only). _______________________ * Certain portions of this document have been omitted as confidential and filed separately with the SEC. (B) REPORTS ON FORM 8-K No reports on Form 8-K were filed by Oglethorpe for the quarter ended March 31, 1996. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Oglethorpe Power Corporation (An Electric Membership Generation & Transmission Corporation) Date: May 14, 1996 By: /s/ T. D. Kilgore --------------------------------- T. D. Kilgore President and Chief Executive Officer (Principal Executive Officer) Date: May 14, 1996 /s/ Gary M. Bullock --------------------------------- Gary M. Bullock Secretary-Treasurer (Principal Financial Officer) Date: May 14, 1996 /s/ Eugen Heckl --------------------------------- Eugen Heckl Senior Vice President and Chief Financial Officer (Principal Financial Officer) 13 EX-10.27A 2 EXHIBIT 10-27A EXHIBIT 10.27(a) EXTENSION AND MODIFICATION AGREEMENT BETWEEN ENRON POWER MARKETING, INC. AND OGLETHORPE POWER CORPORATION Dated as of April 30, 1996 ACKNOWLEDGMENT REGARDING CONFIDENTIAL INFORMATION: Oglethorpe Power Corporation (An Electric Generation & Transmission Corporation) (the "Company") acknowledges that certain confidential information is contained throughout the Extension and Modification Agreement and the Exhibits attached thereto and therefore such confidential information has been omitted from the copy filed with this Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, and an asterisk (*) has been inserted indicating such omission at the exact place in the Agreement and the Exhibits where such confidential information has been omitted. A copy of this Agreement without any omission of confidential information has been filed separately with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. EXTENSION AND MODIFICATION AGREEMENT BETWEEN ENRON POWER MARKETING, INC. AND OGLETHORPE POWER CORPORATION. This Extension and Modification Agreement dated as of April 30, 1996 (this "Extension Agreement") is entered into by and between Oglethorpe Power Corporation (An Electric Membership Generation & Transmission Corporation), a corporation organized and existing under Title 46 of the Official Code of Georgia Annotated ("OPC"), and Enron Power Marketing, Inc., a corporation organized and existing under the laws of the State of Delaware ("EPMI"), and extends the term and modifies certain provisions of that certain agreement entitled "Master Power Purchase and Sale Agreement," dated as of January 3, 1996 by and between EPMI and OPC (the "Original Master Agreement") (the Original Master Agreement, as amended by this Extension Agreement is hereinafter referred to as the "Master Agreement"). W I T N E S S E T H: WHEREAS, OPC and EPMI are Parties to the Original Master Agreement; and WHEREAS, the Original Master Agreement specified a Termination Date (as defined in the Master Agreement) which is scheduled to occur on April 30, 1996; and WHEREAS, the Original Master Agreement provides in Section 2.3 that the Term may be extended upon terms mutually agreeable to the Parties and subject to the approval of the RUS, if required; and WHEREAS, OPC and EPMI now desire to enter into this Extension Agreement to extend the Term of the Original Master Agreement and to modify certain terms thereof; and WHEREAS, the Parties entered into that certain Confidentiality Agreement dated February 7, 1996 (the "February Confidentiality Agreement") covering New Confidential Information (as that term is defined in the February Confidentiality Agreement); and WHEREAS, the Parties understand and acknowledge that EPMI shall have and shall use New Confidential Information in the course of satisfying its obligations under, and in implementing the terms and conditions of, this Agreement; -2- NOW THEREFORE, in consideration of the premises and other good and valuable consideration and the mutual benefits, covenants and agreements set forth below, the Parties hereby agree as follows: ARTICLE I. DEFINITIONS All capitalized terms used in this Extension Agreement and not otherwise defined shall have the meanings set forth in the Master Agreement. ARTICLE II. EFFECTIVE DATE This Extension Agreement shall become effective on the date first written above (the "Extension Effective Date") provided that the delivery of Electric Energy pursuant to the Master Agreement as extended and modified by this Extension Agreement shall commence simultaneously with the scheduled expiration of the Original Master Agreement at one second prior to midnight EPT on April 30, 1996 (the "Extension Commencement Date") so that the Original Master Agreement shall not terminate and shall remain in effect until one second prior to 12:00 midnight EPT on August 31, 1996, unless earlier terminated pursuant to the Master Agreement. ARTICLE III. AMENDMENTS Section 3.1. GENERAL. All terms and conditions of the Original Master Agreement remain in full force and effect from the original Commencement Date until the Termination Date as defined in the Original Master Agreement, and, except as specifically modified by this Article III, all terms of the Original Master Agreement shall be in full force and effect from the Commencement Date, as defined in the Original Master Agreement, until the Termination Date as defined in the Master Agreement. Section 3.2. AMENDMENTS. During the period beginning with the Extension Commencement Date and ending on the Termination Date as defined in the Master Agreement, the Original Master Agreement shall be modified as set forth in this Section 3.2; PROVIDED, HOWEVER, that with respect to the period commencing on the Commencement Date and ending on the Termination Date, as defined in the Original Master Agreement, the following modifications shall not be effective, but instead the provisions of the Original Master Agreement shall, with respect to such period, remain in full force and effect. 1. The first paragraph of the Original Master Agreement shall not be applicable, and a new first paragraph, which shall be applicable, shall be added and shall read as follows: This Master Power Purchase and Sale Agreement dated as of January 3, 1996, as amended by an Extension and Modification Agreement dated as of April 30, 1996 ("Master Agreement," and together with all Transactions, collectively, -3- this "Agreement"), is entered into by and between Oglethorpe Power Corporation (An Electric Membership Generation & Transmission Corporation), a corporation organized and existing under Title 46 of the Official Code of Georgia Annotated ("OPC"), and Enron Power Marketing, Inc., a corporation organized and existing under the laws of the State of Delaware ("EPMI"). 2. Section 2.3 of the Original Master Agreement shall not be applicable, and a new Section 2.3, which shall be applicable, shall be added and shall read as follows: 2.3 EFFECTIVE DATE. This Master Agreement shall become effective on the date first written above (the "Effective Date") provided that the delivery of Electric Energy pursuant to this Master Agreement shall commence at one minute prior to 12:01 a.m. EPT on January 4, 1996 ("Commencement Date") and shall remain in effect until one second prior to 12:00 midnight EPT on August 31, 1996 (the "Termination Date"), unless earlier terminated pursuant to this Master Agreement (the "Term"), PROVIDED HOWEVER, that all Transactions shall terminate no later than such Termination Date. The applicable provisions of this Master Agreement shall continue in effect after the Termination Date in accordance with Section 13.4 hereof. 3. Section 3.5.7 of the Original Master Agreement shall not be applicable. and a new Section 3.5.7, which shall be applicable, shall be added and shall read as follows: 3.5.7 EMISSION ALLOWANCES. At no cost to EPMI, OPC shall surrender or cause to be surrendered all emission allowances necessary for the utilization, to the full extent Properly Requested by EPMI in accordance with this Master Agreement, of the Hal B. Wansley Plant (Units 1 and 2) and other jointly-owned OPC generating resources and to effect the purchase of energy under the block power purchase and sale agreement between OPC and Georgia Power Company. EPMI shall not be deemed to have acquired any sulfur-free generation for use in a reduced utilization plan by reason of entering into this Agreement. 4. Section 4.2 of the Original Master Agreement shall not be applicable and a new Section 4.2, which shall be applicable, shall be added and shall read as follows: 4.2 EPMI'S CONTRACT PRICE. Subject to Section 4.3 hereof, (I) with respect to sales of Electric Energy by EPMI to OPC relating to OPC Load, the Contract Price shall be equal to $[ ]* ("EPMI Sales Price"), and (ii) with respect to sales of Electric Energy by EPMI to OPC relating to OPC Off-System Sales, the Contract Price shall be as agreed to by the Parties (the "EPMI Off-System Sales Price"); PROVIDED that with respect to the OPC Off-System Sales Contracts listed on Exhibit 3.5.2 hereto, EPMI and OPC have agreed that the Contract Price shall be equal [ ]* 5. Section 4.3.1 of the Original Master Agreement shall not be applicable and a new Section 4.3.1, which shall be applicable, shall be added and shall read as follows: __________________________ * Indicates information that has been filed separately with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. 4.3.1 AVAILABILITY OF NUCLEAR OPC RESOURCES. (a) The EPMI Sales Price has been computed based upon certain assumptions relating to the expected availability of the nuclear OPC Resources during the four-month period commencing May 1, 1996 and ending on the Termination Date. Such price assumes (i) expected cumulative availability (measured in MWh) of [ ]* for Plant Hatch (Units 1 and 2 combined) and [ ]* for Plant Vogtle (Units 1 and 2 combined) and (ii) target cumulative availability (measured in MWh) of [ ]* for Plant Hatch (Units 1 and 2 combined) and [ ]* for Plant Vogtle (Units 1 and 2 combined), in each case for such period, as reflected on Exhibit 4.3.1 hereof. Adjustments to the amounts otherwise due to EPMI or OPC shall be made to reflect and take into account (i) the amount that the actual availability of Plant Hatch and Plant Vogtle, respectively, is less than the expected availability of such nuclear OPC Resources and (ii) the amount that the actual availability of Plant Hatch and Plant Vogtle, respectively, exceeds the target availability of such nuclear OPC Resources. If Plant Hatch or Plant Vogtle generates Electric Energy in excess of the target MWh availability, additional amounts (as described below) shall be payable by EPMI to OPC. Alternatively, if Plant Hatch or Plant Vogtle generates Electric Energy less than the expected MWh availability, then OPC shall owe additional amounts (as described below) to EPMI. (b) If the total actual OPC nuclear generation (in MWh) ("Total Actual OPC Nuclear Generation") for Plant Hatch or Plant Vogtle, respectively, shall exceed the total target OPC nuclear generation (in MWh) ("Total Target OPC Nuclear Generation") for the respective generation facilities ("Excess Generation"), then EPMI shall pay to OPC an amount equal to the product of: (i) the amount of such Excess Generation and (ii) [ ]* if the nuclear OPC Resource that shall have experienced Excess Generation is Plant Hatch and [ ]* if the nuclear OPC Resource that shall have experienced Excess Generation is Plant Vogtle. If the Total Actual OPC Nuclear Generation for Plant Hatch or Plant Vogtle is less than the total expected OPC nuclear generation (in MWh) ("Total Expected OPC Nuclear Generation") for the respective plants ("Generation Shortfall"), regardless of whether the Generation Shortfall results from or is the result of a scheduled or forced outage, a limited load operating condition or other event or condition that adversely affects the availability of such nuclear OPC Resource, then OPC shall pay to EPMI an amount equal to the product of: (i) the Generation Shortfall and (ii) [ ]* if the nuclear OPC Resource that shall have suffered a Generation Shortfall is Plant Hatch and [ ]* if the nuclear OPC Resource that shall have suffered a Generation Shortfall is Plant Vogtle. (c) The Total Actual OPC Nuclear Generation for Plant Hatch and Plant Vogtle shall be compared to Total Target OPC Nuclear Generation and Total Expected OPC Nuclear Generation, respectively, for the Plant Hatch and Plant Vogtle, respectively, computed on a cumulative basis from the Extension Commencement Date; PROVIDED, HOWEVER, that as set forth on Exhibit 4.3.1 hereof, the amount by which Total Actual OPC Nuclear Generation is less than Total Expected Nuclear Generation and the amount by which Total Actual OPC Nuclear __________________________ * Indicates information that has been filed separately with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. Generation exceeds Total Target OPC Nuclear Generation shall be compared at the end of each month during the four-month period commencing on the Extension Commencement Date and ending on the Termination Date and shall be settled financially between OPC and EPMI on a monthly basis. (d) Exhibit 4.3.1 sets forth the intended operation of this Section 4.3.1, reflecting possible variances in availability (in MWh) on a month-to-month basis, resulting in payments between the Parties on account of Excess Generation in certain months and Generation Shortfalls in others. (e) It is expressly agreed that any payments payable under Section 4.3.1, as such section read in the Original Master Agreement, and not paid on or before the Extension Commencement Date, shall remain payable and shall be paid in accordance with Section 4.3.1 as such section read in the Original Master Agreement. 6. Section 4.3.3 of the Original Master Agreement shall not be applicable, and a new Section 4.3.3, which shall be applicable, shall be added and shall read as follows: [ ]* 7. Section 4.3.4 of the Original Master Agreement shall be modified by adding a new sentence after the third sentence of Section 4.3.4, which shall read as follows: At the end of the Term, EPMI shall use its good faith efforts to cause the water level in the upper reservoir of Rocky Mountain to be approximately the same water level as the water level that existed in the upper reservoir of Rocky Mountain on the Commencement Date. 8. Section 4.3.5 of the Original Master Agreement shall cease to be applicable. 9. Article 5 of the Original Master Agreement shall be modified by adding a new Section 5.6, which shall be applicable and shall read as follows: 5.6 FEBRUARY CONFIDENTIALITY AGREEMENT; AUTHORIZATION TO USE INFORMATION. OPC expressly authorizes and grants its consent to EPMI to use New Confidential Information (as such term is defined in the February Confidentiality Agreement), whether acquired before or after the Effective Date, pertaining to, without limitation, OPC, OPC Resources, OPC Load, OPC Off-System Sales and the EMCs, for the purpose of exercising EPMI's rights under this Agreement, including EPMI's right to buy Electric Energy from OPC or any other person and to sell Electric Energy to OPC or any other person, whether Electric Energy is produced by or attributable to OPC Resources or other resources. __________________________ * Indicates information that has been filed separately with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. 10. The definition of "ITS Loss Factor" as set forth in Appendix A to the Original Master Agreement shall not be applicable and a new definition, which shall be applicable, shall be added by deleting the term "4.1931%" and substituting in lieu thereof the term "3.7271%". 11. Exhibits 3.2, 3.5, 3.5.2, 3.5.3(ii), 3.5.3(iii), and 4.3.1 to the Original Master Agreement shall not be applicable, and new Exhibits 3.2, 3.5, 3.5.2, 3.5.3(ii), 3.5.3(iii), and 4.3.1, respectively to this Extension Agreement shall be added in lieu thereof. 12. Exhibits 4.2 and 4.3.3 to the Original Master Agreement shall cease to be applicable. ARTICLE IV. ADDITIONAL EXTENSIONS OF THE TERM Section 4.1 REQUESTS FOR EXTENSIONS. Not later than thirty (30) days prior to August 31, 1996, or thirty (30) days prior to the end of any additional extension of the Master Agreement pursuant to this Article IV, OPC shall: (1) notify EPMI in writing whether OPC desires to extend this Agreement and the desired period of the extension; and (2) provide EPMI with operations and systems data necessary for EPMI to quote a revised EPMI Sales Price for the requested extension period. Any requested extension period shall be not less than thirty (30) days and not greater than one hundred and twenty (120) days. In no event shall any requested extension period extend past one second prior to 12:00 midnight EPT on December 31, 1996. Section 4.2 PRICING AND IMPLEMENTATION OF ADDITIONAL EXTENSIONS. Promptly after receipt of a request from OPC for an additional extension of the Master Agreement pursuant to this Article IV, EPMI shall request from OPC any additional documentation or information necessary to quote a Contract Price for the requested extension period. Not later than ten (10) days after receipt of OPC's request for an extension (or if such date falls on a weekend or holiday, the next Business Day), EPMI shall quote to OPC a Contract Price for the requested extension period. In the event OPC elects to extend this Agreement for the requested extension period, and OPC and EPMI mutually agree to the period of the extension and all terms and conditions thereof, OPC and EPMI shall, prior to the expiration of the Master Agreement, execute all documents necessary to give effect to the extension of the Master Agreement for the requested period. ARTICLE V. MISCELLANEOUS Section 5.1 MASTER AGREEMENT. The Parties mutually represent that the Master Agreement is a valid, binding agreement of the Parties as of the Extension Effective Date and that to the best of the knowledge of the Parties no Event of Default has occurred or is continuing, but the execution and delivery of this Extension Agreement shall not waive or ratify any breach of the Master Agreement which has occurred prior to the Extension Effective Date. Section 5.2 REPRESENTATIONS AND WARRANTIES. As of the Extension Effective Date, the Parties remake and renew each of the representations and warranties contained in Article 10 of the Original Master Agreement. Section 5.3 ENTIRE AGREEMENT. This Extension Agreement constitutes the entire agreement between the Parties hereto relating to the subject matter contemplated by this Extension Agreement. Section 5.4 SEVERABILITY. Any provision declared or rendered invalid, unenforceable, or unlawful by a court of law or regulatory agency with jurisdiction over the Parties hereto or deemed unlawful because of a statutory change will not otherwise affect the lawful obligations that arise under this Extension Agreement, and this Extension Agreement and the Master Agreement shall be construed and enforced as if such invalid, unenforceable, or illegal provision were not contained herein. Section 5.5 SUCCESSORS AND ASSIGNS. This Extension Agreement shall bind the permitted successors and assigns of the Parties. Section 5.6 APPLICABLE LAW. THIS EXTENSION AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES ARISING OUT OF THIS EXTENSION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAW. Section 5.7 AMENDMENT. No amendment or modification to this Extension Agreement shall be enforceable unless reduced to writing and executed by both Parties. Section 5.8 THIRD PARTIES. The provisions of this Extension Agreement shall not impart rights enforceable by any person or entity not a Party or not a permitted successor or assignee of a Party bound by this Extension Agreement. Section 5.9 WAIVER. No waiver by either Party hereto of any one or more defaults by the other in the performance of any of the provisions of this Extension Agreement or terms of any Transaction shall be construed as a waiver of any other default or defaults, whether of a like kind or different nature. IN WITNESS WHEREOF, the Parties hereto set their hands and seals this 29TH day of April, 1996. OGLETHORPE POWER CORPORATION By: /s/ T.D. KILGORE Attest: /s/ PATRICIA N. NASH --------------------------- ----------------------------------- Title: President and Chief Title: Assistant Secretary Executive Officer ENRON POWER MARKETING, INC. By: /s/ JOHN M. STOKES Attest: /s/ Elaine V. Overturf --------------------------- ----------------------------------- Title: Vice President Title: Corporate Secretary EXHIBIT 3.2 INTERCONNECTION POINTS WITH THE GEORGIA ITS Alabama Electric Cooperative Florida Power Corporation Florida Power & Light Company Duke Power Company Jacksonville Electric Authority South Carolina Electric & Gas Company South Carolina Public Service Authority Southern Companies Tallahassee Electric Department Tennessee Valley Authority EXHIBIT 3.2 (CONTINUED) OPC ALLOCATION OF FIRST CONTINGENCY TOTAL TRANSFER CAPABILITY (FCTTC) UNDER NORMAL OPERATIONG CONDITIONS (EFFECTIVE JANURAY-MAY, 1996)
FCTTC (MVA) Interface with Georgia ITS To Georgia ITS From Georgia ITS - -------------------------- -------------- ---------------- Florida 584 841 Sale to GPC 40 Sale to GPC 47 Sale to Entergy (3/1/96) 25 --- 729 Alabama Power 730 116 Duke Power 468 556 SC Public Service Authority 42 19 SC Electric and Gas 134 172 Savannah Power 32 0 Gulf Power 0 0 Tennessee Valley Authority 301 310 Purchase from GPC 70 --- 371 Alabama Electric Cooperative 17 47
EXHIBIT 3.2 (CONTINUED) OPC ALLOCATION OF FIRST CONTINGENCY TOTAL TRANSFER CAPABILITY (FCTTC) UNDER NORMAL OPERATIONG CONDITIONS (EFFECTIVE JUNE-AUGUST, 1996)
FCTTC (MVA) Interface with Georgia ITS To Georgia ITS From Georgia ITS - -------------------------- -------------- ---------------- Florida 444 841 Sale to GPC 40 Sale to GPC 47 Sale to Entergy (3/1/96) 25 --- 729 Alabama Power 730* 116* Duke Power 444 531 SC Public Service Authority 42 34 SC Electric and Gas 153 210 Savannah Power 32* 0* Gulf Power 0* 0* Tennessee Valley Authority 252 296 Purchase from GPC 70 --- 322 Alabama Electric Cooperative 17* 47*
*NOTE: THE NEW 1996 SUMMER PEAK AEC AND SOUTHERN COMPANY INTERNAL TRANSFER CAPABILITIES WILL BE UPDATED BY END OF MAY, 1996. THE 1995 TRANSFER CAPABILITY NUMBERS ARE LISTED AS OF 4/12/1996. EXHIBIT 3.5 OPC RESOURCES(1) TYPE OF RESOURCE OPC Resources that are NOT Must Run Minimum Maximum RESOURCES (MW) (MW) ----------------------------- Generating Units Rocky Mountain 1 110.0 212.0 ----------------------------- Rocky Mountain 2 110.0 212.0 ----------------------------- Rocky Mountain 3 110.0 212.0 ----------------------------- Scherer 1(2) 195.0 496.2 ----------------------------- Scherer 2(2) 195.0 498.0 ----------------------------- Tallassee N/A 2.0 ----------------------------- Wansley 1 121.0 253.8 ----------------------------- Wansley 2 122.0 253.8 ----------------------------- Wansley CT N/A 14.8 ----------------------------- OPE Resources that are Must Run Minimum Maximum RESOURCES (MW) (MW) ----------------------------- Generating Units Hatch 1 N/A 234.9 ----------------------------- Hatch 2 N/A 242.1 ----------------------------- Vogtle 1 N/A 348.6 ----------------------------- Vogtle 2 N/A 348.6 ----------------------------- QF N/A 27 ----------------------------- ________________________ (1) The figures contained in this Exhibit shall not serve to limit the actual output available from any OPC Resource. (2) Scherer minimum could be 330 MW if Georgia Power is not taking electric energy from its ownership share of the generating facility. EXHIBIT 3.5 (CONTINUED) Other OPC Minimum Maximum Resources (MW) (MW) ----------------------------- Purchased Power GPC Block 1(3) 100 215 ----------------------------- GPC Block 2(3) 100 215 ----------------------------- GPC Block 3(3) 100 215 ----------------------------- GPC Block 4(3) 100 215 ----------------------------- GPC Block 5(3) 0 107 ----------------------------- GPC Block 6(3) 0 108 ----------------------------- Big Rivers 25 100 ----------------------------- Entergy 25 100 ----------------------------- Hartwell 1 74 148 ----------------------------- Hartwell 2 74 148 ----------------------------- ____________________________ (3) 100% availability - minimum applies when energy is being scheduled under the particular block. EXHIBIT 3.5.2 POWER PURCHASE AND SALE AGREEMENTS UNDER WHICH OPC IS OBLIGATED TO SELL ELECTRIC ENERGY Letter of Commitment to sell power to Alabama Electric Cooperative beginning January 1, 1996, and extending through December 31, 1996, dated as of December 15, 1995. EXHIBIT 3.5.3(II) EXPECTED AVAILABILITY OF EACH OPC RESOURCE OPC RESOURCE PLANNED OUTAGES DUE TO FORCED LOSS SCHEDULED MAINTENANCE OUTAGE FACTOR AFFECTING THE TERM RATE FROM TO ------------------------------------------------------- Hatch 1(4) May 1 May 5 7.00% .9976 ------------------------------------------------------- Hatch 2(4) None 7.00% .9979 ------------------------------------------------------- Rocky Mountain * Unit 1 None 8.00% .9980 ------------------------------------------------------- * Unit 2 May 6 May 27 8.00% .9980 ------------------------------------------------------- * Unit 3 April 15 May 6 8.00% .9980 ------------------------------------------------------- Scherer 1 None 6.00% .9980 ======================================================= Scherer 2 None 6.00% .9980 ======================================================= Tallassee 1 & 2 None 1.00% .99015 ======================================================= Vogtle 1(4) None 6.00% .9965 ======================================================= Votgle 2(4) None 6.00% .9975 ======================================================= Wansley 1 None 6.00% .9978 ======================================================= Wansley 2 None 6.00% .9977 ======================================================= Wansley CT None 11.00% .9977 ======================================================= Hartwell None 5.00% 1.0000 ------------------------------------------------------- _______________________ (4) Nuclear planned outages exclude ramp down period prior to full expected planned outages above. EXHIBIT 3.5.3(III) [ ]* _________________________ * Indicates information that has been filed with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. EXHIBIT 4.3.1 [ ]* _________________________ * Indicates information that has been filed with the Secretary of the Commission as an attachment to a request for confidentiality with respect to the omitted information. EX-27.1 3 EXHIBIT 27.1
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OGLETHORPE POWER CORPORATION'S CONDENSED BALANCE SHEET AS OF MARCH 31, 1996 AND RELATED STATEMENTS OF REVENUES AND EXPENSES AND CASH FLOWS FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 PER-BOOK 4,449,940 144,233 441,602 356,129 0 5,391,904 0 0 346,797 0 0 0 4,181,779 0 0 0 93,005 0 295,779 5,480 469,064 5,391,904 275,701 0 202,133 202,133 73,568 16,937 90,505 81,517 8,988 0 0 0 53,761 3,203 0 0 $346,797 REPRESENTS TOTAL RETAINED PATRONAGE CAPITAL. THE REGISTRANT IS A MEMBERSHIP CORPORATION AND HAS NO AUTHORIZED OR OUTSTANDING EQUITY SECURITIES.
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