6. Capital leases:

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 the terms of the leases. In June 2012, we renewed the leases beyond their base terms. Three of the leases were extended for a period of 14.5 years through December 31, 2027 and one lease was extended for a period of 18 years through June 30, 2031.

In 2000, we entered into a power purchase and sale agreement with Doyle I, LLC (Doyle Agreement), an affiliate of one of our members, to purchase all of the output from a five-unit generation facility (Doyle) for a period of 15 years, through August 24, 2015. We have an option to purchase the facility at the end of the term of the agreement at a fixed price. This option must be exercised no later than August 24, 2014.

The minimum lease payments under the capital leases together with the present value of the net minimum lease payments as of December 31, 2013 are as follows:



Year Ending December 31,		(dollars in thousands)

		Scherer Unit No. 2			Doyle			Total

2014	$	14,949		$	12,447		$	27,396
2015		14,949			18,298			33,247
2016		14,949			–			14,949
2017		14,949			–			14,949
2018		14,949			–			14,949
2019-2031		145,230			–			145,230

Total minimum lease payments		219,975			30,745			250,720
Less: Amount representing interest		(108,508	)		(2,000	)		(110,508	)

Present value of net minimum lease payments		111,467			28,745			140,212
Less: Current portion		(7,459	)		(11,022	)		(18,481	)

Long-term balance	$	104,008		$	17,723		$	121,731

For Doyle, the lease payments vary to the extent the interest rate on the lessor's debt varies from 6.00%. At December 31, 2013, the weighted average interest rate on the Doyle lease obligation was 5.94% as compared to 5.90% at December 31, 2012.

The Scherer No. 2 leases 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.