In 1985, we sold and subsequently leased back from four purchasers their 60% undivided ownership interest in Scherer Unit No. 2. The gain from the sale is being amortized over a 36-year term, which includes the basic term and a guaranteed minimum extension term (of no less than 8.5 years) provided for in the leases. The renewal provisions provide that we may extend the leases for a period beyond the basic term by giving irrevocable notice of renewal by June 2012, subject to fulfilling certain contractual requirements included in the leases. The lease extension would begin June 2013.

In 2000, we entered into a power purchase and sale agreement with Doyle I, LLC (Doyle Agreement) to purchase all of the output from a five-unit generation facility (Doyle) for a period of 15 years.

The minimum lease payments under the capital leases together with the present value of the net minimum lease payments as of December 31, 2011 are as follows:



Year Ending December 31,		(dollars in thousands)

		Scherer Unit No. 2			Doyle			Total

2012	$	46,255		$	12,447		$	58,702
2013		24,093			12,447			36,540
2014		16,326			12,447			28,773
2015		16,326			18,297			34,623
2016		16,326			–			16,326
2017-2021		81,632			–			81,632

Total minimum lease payments		200,958			55,638			256,596
Less: Amount representing interest		(57,963	)		(6,733	)		(64,696	)

Present value of net minimum lease payments		142,995			48,905			191,900
Less: Current portion		(35,341	)		(9,778	)		(45,119	)

Long-term balance	$	107,654		$	39,127		$	146,781

For Doyle, the lease payments vary to the extent the interest rate on the lessor's debt varies from 6.00%. At December 31, 2011, the weighted average interest rate on the Doyle lease obligation was 5.86% as compared to 6.06% at December 31, 2010.

The Scherer No. 2 lease and the Doyle Agreement are reported as capital leases. For rate-making purposes, however, we include the actual lease payments in our cost of service. The difference between lease payments and the aggregate of the amortization on the capital lease asset and the interest on the capital lease obligation is recognized as a regulatory asset on the balance sheet. Capital lease amortization is recorded in depreciation and amortization expense.