Plant acquisition:

12 Months Ended

Dec. 31, 2013

Plant acquisition:

Plant acquisition:

13. Plant acquisition:

Thomas A. Smith Energy Facility

    On April 8, 2011, we acquired the Smith Energy Facility, located near Dalton, Georgia. This facility consists of two natural gas-fired combined cycle units that have an aggregate summer planning reserve generation capacity of approximately 1,250 megawatts.

    As part of the acquisition, we assumed an existing power purchase and sale agreement with Georgia Power for the entire output of Smith Unit No. 1 that expired May 31, 2012. Our members generally plan to take the output of Smith beginning in 2016 in connection with their forecasted power requirements. Prior to our members' use of Smith, energy is being sold into the wholesale market in order to reduce the net cost of this facility to our members.

    We accounted for the transaction as a purchase business combination. In connection with the acquisition, which included acquisition related costs of approximately $1,962,000 (consisting primarily of legal and professional services which are recorded in the accompanying statement of revenues and expenses for the year ended December 31, 2011), we initially funded the entire $532,255,000 cash outlay by closing a $260,000,000 three-year term loan and by financing the remaining $272,255,000 through the issuance of commercial paper. In July 2013, we obtained permanent financing for the acquisition through the Rural Utilities Service-guaranteed Federal Financing Bank.

    The following amounts represent the identifiable assets acquired and liabilities assumed in the Smith acquisition:

		(in millions)
Recognized fair value amounts of identifiable assets acquired and liabilities assumed:
Property, plant and equipment	$	456.7
Inventory		34.0
Other current assets		4.6
Power purchase and sale agreement		40.4
Emission credits		0.2
Current liabilities		(5.6	)
Total identifiable net assets	$	530.3

    There was no goodwill associated with this acquisition.

    We have consolidated the financial position and results of operations of Smith as of April 8, 2011. Our revenues for the year ended December 31, 2013, 2012 and 2011 include $77,467,000 and $119,723,000 and $165,389,000, respectively, of non-member sales from Smith. Prior to our members taking the output from Smith, the net results of operations from Smith, including related interest costs, are being deferred as a regulatory asset as such amounts represent an additional cost incurred to acquire Smith. The regulatory asset will be amortized over the remaining life of the plant (estimated to be 30 years) beginning in 2016. For the years ended December 31, 2013, 2012 and 2011, we deferred net costs of $41,929,000, $17,582,000 and $3,536,000, respectively.