SouthernCaliforniaPublic PouterAuthority1985-86AnnualRessort
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ManagementI r
PresidentGale A. Drews has beenelectrical utilitydirectorfor the city ofColtonsince 1978. He formerlyserved as vice president ofthe Authority.
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Vice PresidentN! E. Cameron has beendirector ofpublic services
for the city ofGlendalesince 19&/.
SecretaryEldon A. Cotton hasbeen employed by the LosAngeles Department ofWater and Power since1965 and has served as
the assistant chiefengineer-power since1985.
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DISIRIPALO VERDE
Assistant SecretaryFrank Salas has been
employed by the LosAngeles Department ofWater and Power formore than 20 years andhas been engineer ofpower contracts since1985.
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0 MEMBER AGENCIES
Executive DirectorArthur T. Devine has
been directing the man-agement of the Authoritysince 1982. He previouslyserved with the LosAngeles Department ofWater and Power as anelectrical engineer andthen as an assistant cityattorney.
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Gale A. Drcws,President
W. E. Cameron,Vice President
Eldon A. Cotton,Secretary
Frank Salas,Assistant Secretary
ArthurT. Devine,Exccut ivc Director
Introduction
One of the largest joint actionagencies in the nation, the South-ern California Public PowerAuthority was established in 1980to finance projects for the genera-tion or transmission ofelectricenergy for its members. All 11 pub-lic power agencies in SouthernCalifornia are members of theAuthority and benefit from thereliable and economical energybrought to their communitiesthrough the agency.
The Authority has issuedmore than $4 billion in bonds andnotes including refunding issuessince initiallygoing to the marketin 1982. This has been possibledue to the high level of acceptanceof the Authority by the financialcommunity.
Member agencies serve about1.7 million customers. Theyreceive in excess of$ 1.8 billion incombined annual revenue derived
from sales. The combined mem-bership has sales ofmore than 30million megawatt-hours,
which'ad
non-coincidental peakrequirements of more than 7,000megawatts.
The Authority is comprised ofthe Imperial Irrigation District andthe municipalities ofAnaheim,Azusa, Banning, Burbank, Col-ton, Glendale, Los Angeles, Pasa-dena, Riverside and Vernon.
President's Message
Since its formation six years
ago, the Southern California Pub-lic Power Authority has directed itsefforts toward meeting the futureenergy needs of its member agen-cies. It seems as ifthe future hasarrived for the Authority in theform of two projects which havecome on-line during the year toprovide power to the memberagencies.
The first and second units ofthe Palo Verde Nuclear GeneratingStation went into commercialoperation in January and Septem-ber 1986, respectively. Unit 3 is
scheduled for completion in thethird quarter of 1987. Ten of themembers are benefitting from thispower source.
In Jun'e 1986 the first unit ofthe Intermountain Power Projectin Utah brought energy and capac-
ity to six members over the South-ern Transmission System whichwas financed by the Authority. Inmid-1987 the second unit willgointo commercial operation.
Financing has taken place forthe Hoover Uprating Project. Sixmembers are among those financ-ing this project of the federal gov-ernment through the Authority toincrease the rating of the genera-tors at Hoover Power Plant. Com-pletion of the project is expected in1992.
The Authority is still studyinga direct current transmission sys-
tem that willoffer members access
to additional and more economical
energy resources in the Southwest.The Mead-Phoenix DC Intertiewould be constructed in the early1990s ifstudies prove the projectfeasible.
We have been able to takeadvantage of lower interest rates toissue refunding bonds on two proj-ects. These issues have reducedcosts by more than $500 millionover the lifeof the two projects.
I am proud that our two majorprojects began operation duringmy administration. I must sharethis honor with those who camebefore me and worked toward thisend, and with those who haveworked on a day-to-day basis toensure success.
My association with theAuthority has been a highlyrewarding one. This is mainly dueto the professionalism of the staff,Board ofDirectors and others.Through the hard work and coop-erative spirit of everyone associ-ated with the Authority, we willcontinue to maintain the reputa-tion of having an efficient organi-zation serving the needs of itsmembers.
Gale A. DrewsPresident
Member Cities Kenneth S. NollcrAssistant Power ManagerCoachella Power DivisionItnperial Irrigation DistrictImperial, California
Gordon KV. HoytGeneral ManagerAnaheim PublicUtilitiesDepartmentAnaheim, California
Imperial Irrigation District—Serving one of the most produc-tive agricultural areas in thenation, the Imperial Irrigation Dis-trict (IID)provides power to 60,000customers in Imperial and River-side counties.
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Imperial Imgation District provides powerto 60,000 customers in two counties.
The IIDwas formed in 1911 todeliver water to nearly 500,000acres of farmland in ImperialCounty from distribution canals.IIDentered the power business in1936 when hydroelectric plantswere developed along the water-ways. In 1943 the properties of a
private power company were pur-chased and IIDbecame the soledistributor ofelectric energy inImperial County and part of theCoachella Valley ofRiversideCounty.
In addition to its hydroelectricplants, IIDgenerates power fromoil-fired units, gas turbines anddiesel. It is receiving power fromthe Palo Verde Generating Station,has geothermal generation fromthe Heber Plant and purchasespower from other utilities in theSouthwest.
During the year, the IIDhada peak of 413 megawatts whileproducing and purchasing1,393,000 megawatt-hours.
Because of the extremely hotsummers and mild winters thatcharacterizes the desert regionserviced by IID, the power system
must accommodate a wide vari-ance between summer and winterpeak demands. The summer peakdemand generally is more thandouble that of the winter peak.The average power consumptionby its customers is one of the high-est in the nation since all homesand businesses are equipped withtemperature-controlled air condi-tioning which is needed through-out most of the year.
Anaheim —In 1894, true to thepioneer spirit of the immigrantGerman winegrowers who settledAnaheim 37 years earlier, the com-munity established one of the firstmunicipally-owned electric sys-tems in California. The city gener-ated its own power through theearly part of the century and againin the late 1920s. Since then,.untilthe early 1980s, the city reliedmostly on wholesale power pur-chased from Southern CaliforniaEdison.
The city became a generatingutilityonce again in 1983 with
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Joseph F. HsuDirector ofUtilitiesAtusa, California
Eldridge SinclairPublic Uti!itics DirectorBanning, California
power from its ownership interestin San Onofre Nuclear GeneratingStation Units 2 and 3. Buying 20%of its supply from non-firmsources, the city is also supplied bythe Intermountain GeneratingStation. The record system peakdemand is 483 megawatts. In fiscal1986, power purchases and genera-tion of2,199,000 megawatt-hourswere required to meet the needs ofAnaheim's 94,000 customers.
The same pioneer spirit thathelped build Anaheim more thana century ago is very much aliveand well today. Anaheim, located25 miles southeast ofLos Angeles,is nationally recognized as anaggressive community, its eco-nomic base firmlyanchored in thehigh-tech defense and tourismindustries. Anaheim's populationof238,000 ranks it as the largestcity in Orange County, one of thefastest growing population centersin the United States.
International fame came to thecity as a result of, ofall things, a
mouse. Mickey Mouse and hisfriends at the Magic Kingdom ofDisneyland attract millions oftourists each year. Nearby is anindustry consisting of hundreds ofhotel and motel rooms as well asrestaurants, the 685,000 grosssquare foot Anaheim ConventionCenter and the 70,500-seat Ana-heim Stadium, home of the Cali-fornia Angels of the AmericanBaseball League and the LosAngeles Rams of the NationalFootball League.
Azusa —Long before the Spanishexplorers and settlers caine to theregion, Azusa had a settlement. Atribe ofShoshonean Indians madetheir home near the mouth of theSan Gabriel Canyon in a villageknown as Asuksa-gna.
An Englishman named HenryDalton purchased a league of landcalled "El Suza" or "The Azusa" in1844. He built a rancho with a
winery, stable and flour mill, buthe soon lost his funds throughcourt battles over his land and itwas purchased by Jonathan Slau-son in 1886. He formed the AzusaLand and Water Company andbegan selling lots in the town ofAzusa in 1887. By 1898 the city ofAzusa had incorporated.
The city has a population of30,000, has 11 square miles and issituated about 20 miles east of LosAngeles. Its electric rates are set bycity council.
Azusa had been almost exclu-sively dependent on wholesalepower from Southern CaliforniaEdison until receiving its PaloVerde Generating Station entitle-ment to help displace some of thepurchases. Last year, the utilityhad a peak of %3 megawatts andsold approximately 167,000megawatt-hours.
A large Azusa nursery lies in the foothillsof the Angeles National Forest.
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IL ~"A small stream typiftes the beauty of thehills above Banning.
Banning —In 1824 the padresfrom San Gabriel Mission estab-lished a ranch and called it SanGorgonio. By 1854 an adobebuilding was built on the land andwas used as a stagecoach station.The little town that grew uparound the station was namedafter Gen. Phineas T. Banning,who had a stage line that operatedin the area.
The stagecoach was replacedby the railroad in 1876, but Ban-ning is still known as "StagecoachTown U.S.A." Located about 85miles east of Los Angeles, the cityis bordered by two scenic moun-tain ranges —the San Gorgonios tothe north and the San Jacintos tothe south. Agriculture, lightmanufacturing and recreationare the economic mainstaysfor Banning.
The city was incorporated in1913 and now has a population of14,000 living within its 17 squaremiles. Banning is governed andhas its electric rates set by the citycouncil.
The city has relied on South-ern California Edison as its onlyfirm supplier ofelectric powerwhich has been purchased atwholesale rates. Banning is using
Thomas H. McCauleyGeneral ManagerBurbank PublicService DcpartmcntBurbank, California
Gale A. DrewsElectrical UtilityDirectorColton, California
~ ME.CameronDirector ofPublicServiceGlendale PublicService DepartmentGlendale, California
its entitlement from the Palo VerdeGenerating Station to offset someof its purchased power. It had a
peak of 18 megawatts during theyear and sold approximately68,000 megawatt-hours.
Bttrbank —Nestled in the easternSan Fernando Valley along thebase of the Verdugo Mountains isthe city of Burbank. It was origi-nally part of a Mexican land grantwhich was purchased in 1870 byDr. David Burbank, a dentist fromNew Hampshire. He raised sheepon the property for 16 years beforeselling the land to the ProvidenciaLand, Water and DevelopmentCompany. His acreage was com-
casting Company, Warner Bros.,Columbia Pictures, the BurbankStudios and Lockheed Aircraft.Industry in Burbank employs70,000 people.
Burbank supplies electricity toits customers through a combina-tion ofoil-and gas-fueled generat-ing facilities in the Los AngelesBasin, entitlement from HooverPower Plant, Palo Verde Generat-ing Station, the IntermountainGenerating Station, and purchasesfrom the Bonneville Power Admin-istration and other utilities in theNorthwest and Southwest.
The city had a peak load of228 megawatts during the yearwhile generating and purchasing981,000 megawatt-hours of energy.
Col ton —Located about 55 mileseast of Los Angeles in San Bernar-dino County, Colton is known asthe "Hub City"since it is on themain line of three major railroads
return, the railroad was obligatedto make Colton its headquartersfor the area and to layout andimprove townsites while sharingthe proceeds of the sale of lots withthe original owner.
Wyatt Earp and his familymoved into the area in 1864 anddid much of their hunting inwhat was to become Colton. Hisbrother Virgilbecame marshal ofColton in 1887, the same year thecity was incorporated. Virgillaterretired from office to open up agambling hall in town.
Colton has a peak powerrequirement of35 megawatts andtotal energy requirements of143,000 megawatt-hours. The citypurchases the majority of itsenergy from Southern CaliforniaEdison and additional energyrequirements are met through itsentitlement in the Palo VerdeGenerating Station. The citycouncil establishes electric ratesfor Colton.
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Burbank is the home ofmovie andtelevision studios.
bined with other land to form thecity ofBurbank in 1887.
The city had a populationof400 when it was incorporated.In 1927 it adopted the presentcouncil-manager form ofgovernment.
Today Burbank boasts a popu-lation of about 85,000 within itsborders. It is the home ofWalt Dis-ney Productions, National Broad-
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Major railroads run throttgh the historiccity of Co!ton.
and the meeting point of threemajor highways. Colton has a pop-ulation of 28,000 and covers anarea of 16 square miles.
Colton took root as a city in1875 when one square mile of landwas deeded to the Southern PacificRailroad by an association. In
Glendale —The actual history ofGlendale began in 1798 whenCorporal Jose Maria Verdugoobtained title to the Rancho SanRafael from the King ofSpain.Many years later the rancho wasdivided and then split again intosmaller parcels.
Homes were being built in thearea and one of the parcels beingdeveloped was named Glendale in1884. Six individuals contributedland to create the original 150-acretownsite. By 1906 the city whichhad grown almost ten times in sizewas incorporated. Today, throughannexations, Glendale has grownto more than 30 square miles witha population in excess of 154,000.Located just north of Los Angeles,Glendale is still known as the"Jewel of the Verdugos".
Norman E. NicholsAssistant GeneralManager-PowerDepartment ofWaterand PowerLos Angeles, California
Henry C. LeeActing General ManagerPasadena Water andPower DeparnnentPasadena, California
Glendale purchased and gen-erated a total of approximately895,000 megawatt-hours in the fis-cal year and had a peak of232megawatts. Serving about 73,000customers, the city has its rates set
by the city council.The city most recently began
receiving its entitlement from theIntermountain Generating Stationand the Palo Verde GeneratingStation. It also has oil- and gas-
fueled generation in the LosAngeles Basin, hydroelectric gen-eration from Hoover Power Plantand purchases from the BonnevillePower Administration and otherutilities.
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Glendale boasts a vibrant commercialcenter.
Los Angel es —As the nation'ssecond largest city with a popula-tion of3.2 million, Los Angelesis one of the world's great metro-
polises. It is truly an internationalcity, with people from virtuallyevery country in the world callingLos Angeles home.
Airlines arrive and depart forall parts of the world from LosAngeles International Airport andships bringing cargo from thePacific Rim dock at the Port of LosAngeles on a regular basis. Thecity recently played host to theworld when it held the OlympicGames in 1984 which were themost successful in history. LosAngeles is represented in almostevery professional sport.
The Los Angeles DepartmentofWater and Power is the nation'slargest municipal utility. It serves
power to about 1.26 millioncus-tomers within a 065 square milearea. During the fiscal year a peakof4,713 megawatts was experi-enced while a total ofabout 23
millionmegawatt-hours wereproduced.
Los Angeles'tory starts morethan 200 years ago when a pueblowas founded in 1781 along the LosAngeles River. The city grewquickly, and after the turn of thiscentury, an aqueduct was built tobring water from the EasternSierra more than 250 miles northof the city. Power plants were builtfor aqueduct construction andlater hydroelectric plants werebuilt along the aqueduct. Thus thecity entered into the power busi-ness in 1916. Today Los Angelesreceives power from hydro, coal-fueled, oil-and gas-fueled andnuclear generating stations in four
Downtown Los Angeles paces thegrowth of the city.
states and makes purchases fromthe Pacific Northwest and South-west utilities for a net depend-able system capability of7,254megawatts.
The city is governed by a full-time elected mayor and 15-membercouncil who have final authorityon rates.
Pasadena shines on New Year's Daywith the Rose Parade and Rose Bowlfootball game.
Pasadena —Pasadena is recog-nized as a major economic, cul-tural, residential and recreationalcenter located northeast of LosAngeles at the foot of the SanGabriel Mountains.
The city of 130,000 people wasfounded in 1875 and incorporatedthe followingyear. Pasadena is bestknown for its Tournament ofRosesParade which began in the 1890s
and is held every New Year's Day.The Rose Bowl is the site ofone ofthe most prestigious college foot-ball post-season games also held onNew Year's Day.
Pasadena is the home of theCalifornia Institute ofTechnology,one of the world's major scientificresearch centers, the Jet PropulsionLaboratory, a division ofCal Techfunded by the National Aeronau-tics and Space Administration,and the Norton Simon Museum ofArt, containing one of the world'greatest collections.
Riverside PublicUtilities DepartmentRiverside, California
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BillD. CarnahanPublic Utilit Director
"i'ruce V. Malkenhorst
Executive Director ofLight 6. PowerVernon, California
Pasadena supplies electricitythrough a combination ofoil- andgas-fueled generation in the LosAngeles Basin, hydroelectric gen-eration from Hoover Power Plantand purchases from the BonnevillePower Administration as well asreceiving its entitlement from theIntermountain Generating Stationand Palo Verde Generating Station.
Its peak power requirementduring the year was 232 megawattsand it generated and purchased atotal of approximately I millionmegawatt-hours for the year.
Rieerside —Silkworms, waterand navel oranges all played a partin Riverside's history. Thc area wasfounded in 1774, but in 1868 aFrenchman tried establishing asilkworm colony there; it diedabout the same time the town ofRiverside was born in 1870.
The city was incorporated in1883 in order to annex lands
The old style architecture of Riverside isbest embodied in its churches.
owned by an irrigation companyto ensure an adequate water sup-ply. The present municipal utilitysystem, the oldest in California,had its beginning when a smallhydroelectric plant was opened ona canal in 1888, and in 1896 thecity started to distribute electricpower from a more modern hydro-electric plant.
Riverside is located about 45miles east of Los Angeles and is72 square miles in area with a pop-ulation of more than 175,000. It isthe home of the University ofCal-ifornia, Riverside.
The city has a council-manager form ofgovernment witha full-timeelected mayor.
The city had peak require-ments of323 megawatts and totalenergy requirements of 1.2 millionmegawatt-hours. It has more than1,600 circuit miles of subtransmis-sion and distribution lines as wellas 18 substations to meet the needsof its more than 75,000 customers.
Riverside purchases powerfrom Southern California Edisonat wholesale rates, has ownershipin units 2 and 3 of the San OnofreNuclear Generating Station, andreceives power from its entitlementin the Palo Verde Generating Sta-tion and the Intermountain Gen-erating Station.
Vernon —Incorporated in 1905,the city ofVernon was plannedfrom its inception as an industrialcity, the first in Southern Cali-fornia. The basic purpose of thecity, located four miles south ofdowntown Los Angeles, is to pro-vide a well-organized, hospitablecenter for industry ofall typeswithin its 5 square miles.
Vernon has residents number-ing in the hundreds but a working
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Murals decorate a meat packing plantin the industrial city of Vernon.
population ofabout 55,000. Thecity has more than 525 manufac-turing plants and another 400establishments engaged in thewholesale-retail trade. It is servedby four railroads operating 114
miles of line within the city. Virtu-ally every industry or business ison a direct transcontinental rail-line. In addition, 77 truckinglines have terminals in the city.
The city is only one of four inCalifornia to have its own healthdepartment. This is due to itsunique status ofserving the needsof industry.
The Vernon Electrical System,established in 1931, receives mostof its energy from Southern Cali-fornia Edison. The remainder is
supplied from its entitlemcnt inthe Palo Verde Generating Stationand a city operated diesel generat-ing plant. The city council estab-lishes rates for Vernon. During theyear Vernon had a peak require-ment of 193 megawatts and a totalenergy requirement of 1.15 millionmegawatt-hours.
AuthorityOperations
Palo Verde GeneratingStation —The first two units atthe Palo Verde Nuclear GeneratingStation (PVNGS) in Arizona were
placed in commercial operationduring 1986. Unit I went on linein January and Unit 2 in Septem-ber, providing electrical generationfor the first time to its memberagencies.
Fuel loading for Unit 3 is setfor the first quarter of 1987. Thegenerating station willbe essen-
tially completed in late 1987 whenUnit 3 is finished.
Each of the three generatingunits at the site, 50 miles west ofPhoenix, has a nominal capabilityof 1,270 megawatts. The Authorityhas a 5.91 percent interest inPVNGS and willreceive about 216
megawatts when the facility is
completed.Palo Verde is providing power
to 10 member agencies who havecontracted with the Authority forits entitlement. This capacity and
Palo Verde Project Participation
Participants
Los AngelesImperial
IrrigationDistrict
RiversideVernonBurbankGlendalePasadenaAzusaBanningColton
GeneratingProject Capability
Entitlement (Megawatts)
67.0% 145.04
65% 14075.4% 11.694.9% 10.61
9.539.53
4.4'/o 9.531.0% 2.161.0'/o 2.161.0% 2. 16
energy willbe used either to meetgrowth, replace more expensivepurchased power or to displace oil-or gas-fueled generation.
The project is managed andoperated by Arizona Public Ser-
Total 100.0% 216 48
vice Company. The Authority hasthe right to use a certain portion ofthe project transmission system.The switchyard portion of theproject is being operated by theSalt River Project ofArizona.
By the early 1990s, Palo Verdeis expected to have a net annualenergy output of more than 22 mil-lion megawatt-hours. It is pro-jected that the Authority's inter-est in the generating station willresult in the delivery of about207 megawatts ofcapacity and1,271,777 megawatt-hours ofenergy per year at the variouspoints ofdelivery.
Taking advantage of lowerinterest rates in 1985 and the firsthalf of 1986, the Authority issuedapproximately $600 million inrefunding bonds, resulting in a
savings of about $ 130 million tothe members over the life of theproject.
A total ofapproximately $408million in notes (ofwhich $75 mil-lion remains outstanding) andapproximately $958 million inbonds have been issued by theAuthority for financing its interestin Palo Verde. It is estimated thatabout $ 100 million in additionalfinancing is needed.
Soicthern TransmissionSystem —The ~ 500 kilovoltdirect current Southern Transmis-sion System (STS) has been com-mercially carrying power from Utahto Adelanto, California since June1986 when the first 800-megawatt
unit of the Intermountain PowerProject (IPP) went'nto operation.Power from IPP Unit 2 willalso betransmitted over the system whenit becomes available in mid-1987.
Six Authority members arebenefitting from STS powerbrought 490 miles across mountainand desert from the coal-fueledgenerating station in Utah. Whenthe generation station is com-pleted, as much as 1600 megawattswillbe sent to Southern Californiaover the STS from IPP.
Alternating current producedfrom the generating station ischanged into direct current at anadjacent converter station. Aftertransmission over the line, it ischanged back to alternating cur-rent at the Adelanto ConverterStation in Southern Californiabefore being delivered to projectparticipants.
Southern TransmissionProject Participation
Participants
Los AngelesAnaheimRiversidePasadenaBurbankGlendale
Total
TransmissionService Share
59.534%17.647%10.164%5.883%4.498%2.274%
The Intermountain PowerAgency (IPA), a political subdivi-sion of the State ofUtah, is theowner of the IPP. It appointed LosAngeles as project manager andoperating agent. A total of36utilities in California, Utah andNevada are receiving power fromthe generating station.
In 1983 the Authority agreedto make payments-in-aid ofcon-struction to IPA in return for therights to the entire capacity of theSTS. Transmission service utilizingthe entire capability of the systemwas sold by the Authority to the
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California IPP participants, all ofwhich are Authority members.
Power from the project willbeused by California participants tomeet load growth and displace LosAngeles Basin oil- and gas-fueledgeneration, and for some, toreduce purchases from SouthernCalifornia Edison.
As a result of the Authority'srefunding program for this project,three refunding sales have beencompleted in 1984 and 1986 total-ling approximately $ 1 billion,resulting in total savings amount-ing to about $HO millionover thelife of the project.
Hoover Uprating Project-New technology has made it possi-ble to increase the capacity of elec-trical generators by installingmodern stator windings and up-grading various auxiliary equip-ment, This is the premise behindthe plan to uprate the 17 origi-nal generators at the HooverPower Plant by the U.S. BureauofReclamation.
AnaheimRiversideBurbankAzusaColtonBanning
40.0 42.5530.0 31.9115.0 15.964.0 4.263.0 3.192.0 2.13
52,00039,000
5,0425,0004,0002,000
Total 94.0 100.00 107,%2
The Bureau, which willoper-ate the 50-year-old facilitybegin-ning in June 1987, has determinedthat the nameplate capacity of theplant can be increased from 1,450
megawatts to 2,039 megawatts at050 feet ofhead through uprating.
Six member agencies have con-tracted with the Authority tofinance their portion of the uprat-ing costs, and bonds were issuedfor approximately $30.5 million toadvance their costs to the Bureaufor their share of participation.The members financing throughthe Authority willbe allocated 94megawatts of the additional out-put when the project is completedin 1992. Participants willreceivethe uprate capacity beginning inJune 1987 and increasingly moreamounts as the project advan-ces until the fullentitlement is
received in 1992. The fullenergyentitlement willbe available inJune 1987.
Two of the generating unitshave already been uprated in a
pilot program. The remainingunits willbe uprated in groups
Hoover Upratingproject participation
AssociatedParticipants Contingent Firm
Capacity EnergyMiv 'Yo hDVh
under four or more contracts overthe next four years. Other modifi-cations to the power plant toincrease its efficiency include thereplacement ofexisting trans-former banks, consolidation ofcontrol rooms and modernizationto provide for automatic andremote control.
Mead-Phoenix DC IntertieProject —Studies continue bythe Authority and other South-west utilities as to the feasibility ofconstructing, owning and operat-ing a ~500 kilovolt, direct currenttransmission line. The intertiebetween Phoenix, Arizona, andBoulder City, Nevada, would havean initialcapacity of 1,600 mega-watts and could possibly extendinto Southern California. Itcould later be upgraded to 2,200megawatts.
The intertie ifbuilt would bescheduled for completion in theearly 1990s and would be used tocarry participants'ntitlement inPalo Verde and to make economyenergy/capacity exchanges withother utilities in the Southwest.Other study participants are SaltRiver Project ofArizona, M-S-RPublic Power Agency and theWestern Area Power Administra-tion. As presently structured theAuthority's members would beentitled to 2,062 megawatts ofcapacity in the line.
10
Financial Statements
October 10, 1986
To the Board of Directors ofSouthern California PublicPower Authority
In our opinion, the accompany-ing combined balance sheet andthe related combined statement ofchanges in financial positionpresent fairly the financial positionof Southern California PublicPower Authority at June 30, 1986and 1985 and the changes in itsfinancial position for the yearsthen ended, in conformity withgenerally accepted accountingprinciples consistently applied.Our examinations of these state-ments were made in accordancewith generally accepted'uditingstandards and accordingly in-cluded such tests of the accountingrecords and such other auditingprocedures as we considerednecessary in the circumstances.
In our opinion, the accompany-ing separate balance sheets of theAuthority's Palo Verde Project,Southern Transmission Project andMead-Phoenix Project, the relatedseparate statements ofchanges infinancial position and the separatestatement of operations of the PaloVerde Project present fairly thefinancial position of each of theProjects at June 30, 1986, thechanges in each of their financialpositions and the results ofopera-tions of the Palo Verde Project forthe year then ended, in conformitywith generally accepted account-ing principles consistently applied.Our examinations of these state-ments were made in accordance
with generally accepted auditingstandards and accordingly in-cluded such tests of the accountingrecords and such other auditingprocedures as we considerednecessary in the circumstances.
Our examinations were madefor the purpose of forming anopinion on the basic financialstatements taken as a whole. Thesupplemental financial data andschedules, as listed in the accom-panying index, are presented forpurposes of additional analysis andare not a required part of the basicfinancial statements. Such supple-mental financial data and sched-ules have been subjected to theauditing procedures applied in theexaminations of the basic financialstatements and, in our opinion,are fairly stated in all materialrespects in relation to the basicfinancial statements taken as a
whole.
~bc LJPrice WaterhouseLos Angeles, California
Southern California Public Power AuthorityCombined Balance Sheet(In thousands) June 30, l986
ASSETS
Utilityplant:ProductionTransmission
General
Less accuinulated provision for depreciation
Palo VerdeProject
$ 203,247
1,864
205,144
3,340
SouthernTransmission
Project
Mead-PhoenixProject Total
$ 203,247
1,864
33
205,144
3,340
June 30, l985Total
Utilityplant in service
Construction work in progress
Nuclear fuel, at amortized cost
Special funds (Notes C, D and E):
201,804
342,317 $ 636,706 $ 10,630
37,412
581,533 636,706 10,630
201,804
989,653 $ 1,042,281
37,412
1,228,869 1,042,281
Invcstmcnts 274,565 219,546 3,677 497,788 935,805
Interest rcceivab! c
Cash
2,268
198
2,27913
4,547211
26,456
267
277,031 221,825 3,690 502,546 962,528
Accounts receivableCosts recoverable from future billings to participants
(Note F)Dcfcrred costs:
5,419
7,340
13 10 5,442
7,340
6,675
Unamortized debt expenses, less accumulatedamortization of$ 18,502 and $9,061 in 1986 and 1985 118,963 197,121 15 316,099 58,745
Other deferred costs 1,972
120,935 197,121
1,972
15 318,071 58,745
$992,258 $ 1,055,665 $ H,345 $2,062,268 $2,070,229
LIABILITIES
Long.term debt:Revenue bonds (Notes C and E)
Bond anticipation notes
Bank loan payable (Note D)
$866,060 $ 998,385
75,000
$ 14,148 14, H814,148
$ 1,864,445 $ 1,617,892
75,000 275,000
941,060 998,385 14,148 1,953,593 1,907,040
Less long.term debt due within one year
Current liabilities (Notes C and D):
Long.term debt due within one year
Accrued interest payable
Accounts payable and accrued liabilities
75,000
866,060
75,000
41,983
9,215
126,198
998,385
49,717
7,563
57,280
14,148
62
135
197
75,000
1,878,593
75,000
91,762
16,913
183,675
1,90?,040
98,028
65,161
163,189
Commitments and contingencies (Note G)$992,258 $ 1,055,665 $ 14,345 $2,062,268 $2,070,229
The accompanying notes are an integral part of these financial statements.
12
Southern California Public Power AuthorityPalo Verde ProjectStatement of Operations(In thousands)
Operating rcvcnucsiSales ofelectricity to participants
Operating expcnscs:Nuclear fuel expense
Other operationMaintenanceDepreciationExpense charged to projects during construction
Total operating expenses
Debt cxpenscs:Interest on debt, netInterest charged to projects during construction
Nct debt expenses
Costs recoverable from future billings to participants (Note F)
Year endedJune 30, 1986
$ 10,&}2
$ 2,022
3,395
1,440
3,300
(1,056)
9,141
R,294(76,053)
8,241
17,382
(7,340)
$ 10,(H2
Thc Southern Transmission System Project and thc Mead.Phoenix Project were not in operation at June 30, 1986 and, therefore, are notincluded in this statement ofoperations; none of the projects were in operation at June 30, 1985.
Thc accompanying notes are an integral part of these financial statements.
13
Palo VerdeProject
Funds provided by (used for):
Southern California Public Power AuthorityCombined Statement of Changes in Financial Position(In thousands) Year Ended June 30, 1986
Southern Mead-Transmission Phoenix
Project Project Total
Year EndedJune 30, 1985
Tota!
OperationsRevenues
Expenses
Charges not involving funds:
Depreciation and amortizationOther, net
FinancingSale of revenue bondsSale ofrefunding bonds
Sale ofbond anticipation notes
$ 10,042
(17,382)
5,362
7,933
5,955
333,312 $ 1,010,213
$ 10,042
(17,382)
5,362
7,933
5,955
1,343,525
$433,395
205,918
75,000
Payment ofbond anticipation notes
Defeasance of revenue bonds
Defeasance ofbond anticipation notes
Reduction in long.term debt
Bond issue costs
UtilityplantOther, nct
Incrcasc (decrease) in fundsInvestmentsInterest receivable
CashAccounts receivable
Long-term debt due within one year
Accrued interest payable
Accounts payablc and accrued liabilities
(289,320) (841,609)
(200,000)
(75,000)
(57,653) (174,617)
(88,661) (206,013)
(87,465) (102,530) $ (1,955)
(1,972) 903 36
$(172,143) $(307,640) $ (1,919)
$ (94,031) $ (342,128) $(1,858)
(IZ,308) (9,602)
(56)
4,741
(75,000)
(5,984) 10
6,725 (472) 13
(2,214) 50,546 (84)
$(172,143) $(307,640) $ (1,919)
(312,875)
(1,130,929) (174,647)
(200,000)
(75,000)
(232,270) (52,891)
(294,674) 173,900
(191 950) (424 970)
(1,033) 167
$ (481,702) $(250,903)
$(438,017) $(203,003)
(21,910) (1,376)
(56) 112
(1,233) 6,675
(75,000)
6,266 (25,865)
48,248 (27,446)
$ (481,702) $(250,903)
The accompanying notes are an integral part of these financial statements.
Notes to Financial StatementsNOTE A—Organization and purpose:
Southern California Public Power Authority (the Author-ity), a public entity organized under the laws of the State ofCalifornia, was formed by a Joint Powers Agrccmcnt dated asofNovcmbcr I, 1980 pursuant to thc Joint Exercise ofPowersAct of thc State ofCalifornia. Thc Authority's mcmbcrshipconsists often Southern California cities and one public dis-trict of the State ofCalifornia. Thc Authority was formed forthe purpose ofplanning, financing, developing, acquiring,constructing, operating, and maintaining projects for thcgeneration or transmission ofelectric cncrgy. The JointPowers Agreement has a term of fiftyyears.
The Authority, pursuant to an assignment agrccmcntdated as ofAugust 14, 1981 with thc Salt River Project Agri-cultural Improvement and Power District (Salt River Project),has purchased a 5.91% interest in the Palo Verde NuclearGenerating Station (PVNGS), a 3,810 megawatt nuclear-fuelcd generating station being constructed near Phoenix,Arizona, and a 6.55% share of the right to use certainportions of the Arizona Nuclear Power Project ValleyTransmission System (collectively, the Palo Verde Project).Unit I of thc Palo Verde Project began commercial operationin January 1986; Unit 2, in Septcmbcr 1986. Unit 3 isscheduled for commercial operation in September 1987. ThcAuthority is also studying thc feasibility ofconstructing theproposed Mead-Phoenix DC Intcrtic Project (Mead-PhoenixProject), a transmission line from Arizona to Nevada. TheAuthority's present interest in thc Mead-Phoenix Projectis 93.75%.
The Authority, pursuant to an agreemcnt dated as ofMayI, 1983 with the Intermountain Power Agency (IPA), hasagreed to make payments-in-aid ofconstruction to IPA todefray thc costs of acquisition and construction of thc South-ern Transmission System Project (STS), a transmission linewhich willprovide for the transmission ofenergy from theIntermountain Power Project in Utah to Southern Califor-nia. The Authority entered into an agreemcnt also dated asofMay I, 1983 with six of its members pursuant to which'each member assigned its entitlement to capacity of theSouthern Transmission Project to thc Authority in return forthe Authority's agreement to make payments-in-aid ofcon-struction to IPA. STS commenced commercial operationJuly 1986.
In early 1986, six participant members of the Authorityentered into an interim agreement with thc Bureau ofRccla.mation of thc United States ofAmerica (Bureau) to makeadvance payments toward the cost ofuprating the HooverDam Facility's generating equipment. Construction is sched-uled for completion by September 1992. The Authority willhave an 18.68%%d interest in contingent capacity of the HooverUprate Project.
NOTE B—Summary of significant accounting policies:The Authority maintains its records substantially in
accordance with accounting principles and methods pre-scribed by the Federal Energy Regulatory Commission andthe California Public UtiliticsCommission. The Authorityis not subject to regulation by such commissions.
Utilityplant —Allexpenditures, including general,adininistrative and other overhead expenses, payments-in-aid ofconstruction, interest net of related investmcntincome, deferred cost amortization, and the fair value of testpower generated and delivered to thc participants are capital-
ized as utilityplant construction work in progress until afacilitybegins commercial operation.
During January 1986, Unit I ofPVNGS began commercialoperation; costs associated with this unit arc included asUtilityPlant in Service. Depreciation is provided using thestraight-line method over the estimated useful lifeof theassets. Nuclear fuel is amortized and charged to expense onthe basis of actual thermal energy produced relative to totalthermal energy expected to be produced over the life of thefuel. A contract has bccn cntcrcd into with thc United StatesDepartment ofEnergy for disposal of the spent fuel.
¹tclear decommissioning —Decommissioning ofPVNGS is projected to commence in approximately 35 to 40years. Estimated future decommissioning costs are providedover the commercial lifeofPVNGS through annual chargesto expense.
Deferred costs —Deferred costs are shown net ofaccu-mulated amortization. Unamortized bond and note discountand debt issue costs, including the cost of refunding, areamortized over the terms of the respective issues. Otherdeferred costs arc amortized generally over five years.
Investments —Investments include United States Gov-ernment and governmental agency securities and repurchaseagreements, collateralized by such securities. These invest-ments are stated at amortized cost. As discussed in Notes Cand D, all of thc investments are restricted as to their use.
Investments, in thousands, werc as follows:Junc 30>
Project
1986
CarryingValue Market
1985
CarryingValue Market
Palo Verde $ 270,565 $ 291>969 $368,596 $381,339Southern
Transmission 219,546 233,641 e 561,674 572,320Mead. Phoenix 3,677 3,679 5,535 5,560
$497,788 $529,289 $935,805 $959,219
Ree>enues-Revenues are billed to participants in accord-ance with the participation agreemcnts. Generally, revenuesare fixed at a level to recover all operating and debt servicecosts over the commercial life of the plant. (Sce Note F).
Debt expenses —Debt expenses include interest on debtand the amortization ofbond premiums and discounts, debtissue costs and thc deferred cost of refunding. Income frominvestments is rccordcd as a reduction ofdebt cxpcnses.
Reclassi fications —Certain reclassifications have beenmade in the prior year's financial statements to conform tothe classification used in the current year.
NOTE C—Revenue bonds payable and bond anticipa-tion notes payablc:
Palo Verde Project-To finance the purchase and con-struction of thc Palo Verde Project', the Authority has issuedPower Project Revenue Bonds and Power Project Bond Antic-ipation Notes pursuant to the Authority's Indenture ofTrustdated as ofJuly I, 1981 (Bond Indenture), as amended andsupplemented, and the Authority's Power Project BondAnticipation Note Resolution (Note Resolution) adoptedAugust 13, 1982, as amended and supplemented. See theSupplemental Schedule ofRevenue Bonds and Bond Antici-pation Notes Payable at June 30, 1986 for details related tooutstanding bonds and notes. The Bond Indenture providesthat the Revenue Bonds shall be special, limited obligationsof the Authority payable solely from and secured solely by (I)
15
proceeds from thc sale ofbonds, (2) all rcvcnues, incomes,rents and receipts at tributable to the Palo Vcrdc Project (sceNote D) and interest on all monies or securities (other thanin the Construction Fund) held pursuant to the Bond Inden-ture and (3) all funds established by the Bond Indenture(excluding the Decommissioning Account in the Reserveand Contingency Fund); subject to the provisions of thePalo Verde Project Bond Indenture providing for the appli-cation thereof. The Note Resolution provides that the BondAnticipation Notes shall be special, limited obligations ofthe Authority payable from the proceeds ofadditionalbonds, notes or loans obtained under the Revolving CreditAgree ment.
Alloutstanding Power Project Revenue Term Bonds, at theoption of the Authority, are subject to redemption priorto maturity.
The Bond Indenture requires mandatory sinking fundinstalments to be made beginning in 1998 for thc 1982 SeriesA Bonds, 1999 for the 1982 Series B Bonds and the 1983Series A Bonds, 2001 for the 1984 Series A Bonds and 1985Series A Bonds, 2005 for the 1985 Series B and 2003 for the1986 Series A Bonds. Scheduled principal maturities for thePalo Verde Project during the five fiscal years succeeding June30, 1986 are $8,%5,000 in 1989, $9,040,000 in 1990 and$ 11,050,000 in 1991. No principal maturities ofbonds out-standing at June 30, 1986 are scheduled for fiscal 1987and 1988.
The funds required by the Bond Indenture and NoteResolution contain balances, in thousands, as follows:
June 30,
1986 1985
Construction Fund-Initial Facilities Account
Debt Service Fund-Debt Service AccountDebt Service Reserve Account
Note FundBond Anticipation Note FundRevenue FundOperating FundReserve and Contingency FundGeneral Reserve Fund
$ 52,826 $ 63,595
105,47398,299
6,0802,7205,0166,272
345
194,09299,013
2,18812,318
6,2755,945
Bond Escrow Fund277,031539,261
383,426210,539
Total Palo Verde Project Funds $816,29Z $593,965
Southern Transmission Project-To finance payments-in.aid ofconstruction to IPA for construction of the South-ern Transmission Project, the Authority issues TransmissionProject Revenue Bonds and Transmission Project Bond Antici-pation Notes pursuant to the Authority's Indenture ofTrustdated as ofMay 1, 1983 (STS Bond Indenture), as supple-mented, and thc Authority's Transmission Project BondAnticipation Note Resolution (STS Note Resolution) adoptedJanuary 20, 1984. See the Supplemental Schedule ofRevenueBonds and Bond Anticipation Notes Payablc at June 30, 1986for details related to the outstanding bonds and notes. TheSTS bond Indenture provides that thc Revenue Bonds shallbe special, limited obligations of the Authority payablc solelyfrom and secured solely by (I) proceeds from the sale ofbonds, (2) all revenues, incomes, rents, and receipts attribut-able to the Southern Transmission Project (see Note E) andinterest on all monies or securities (other than in the Con-
1986 1985
Construction Fund—Initial Faciliiics Account
Debt Service Fund-Debt Service AccountDebt Service Reserve Account
Note Fund
Bond Escrow FundsNote Escrow Fund
Total Southern TransmissionProject Funds
$ 94,857 $310,027
35,705 129,7H91,262 93,320
40,063
221,824 573,554966,347204,823
$ 1,392,994 $ 573,554
Hoover Uprate Project-Subsequent to June 30, 1986,pursuant to the Authority's Indenture ofTrust dated as ofMarch 1, 1986 (Hoover Bond Indenture), the Authorityissued $34,435,000 ofHydroelectric Power Project RevenueBonds 1986 Series A to finance advance payments to theBureau for application to thc costs of the Project. The HooverBond Indenture provides that the Revenue Bonds shall bespecial, limited obligations of the Authority payable solelyfrom and secured solely by (I) the proceeds of the sale of thebonds, (2) all revenues and (3) all funds established by theIndenture ofTrust (except for the Interim Advance PaymentsAccount in thc Advance Payment Fund); subject to the pro-visions of'the Hoover Bond Indenture providing for thc appli-cation thereof.
The Hoover Upratc Project Revenue Bonds are subject toredemption prior to maturity at the option of the Authority.
The bonds mature between 1994 and 2017. The bondindenture requires mandatory fund instalments to be madebeginning 2002.
The Bond Indentures and Note Resolutions for the PaloVerde Project and for the Southern Transmission Project eachrequire certain funds to be established to account for theAuthority's receipts and disbursements. The monies andinvestments held in these funds are restricted in use to thepurposes stipulated in the bond indentures and note resolu-tions. A summary of these funds follows:
struction Fund) held pursuant to the STS Bond Indentureand (3) all funds established by the STS Bond Indenture; sub-ject to the provisions of the STS Bond Indenture providingfor the application thcrcof. The STS Note Resolution pro.vides that the Bond Anticipation Notes shall be special, lim-ited obligations of the Authority payable from the proceedsofadditional bonds, notes or loans obtained under theRevolving Credit Agreement.
Alloutstanding Transmission Project Revenue Term Bonds,at the option of the Authority, are subject to redemptionprior to maturity.
The STS Bond Indenture requires mandatory sinking fundinstalments to be made beginning in 2000 for the 1984 SeriesA Bonds and 2001 for the 1984 Series B Bonds and the 1985
Series A Bonds, 2003 for the 1986 Series A Bonds and 2002for the 1986 Series B Bonds. Scheduled principal maturiticsfor the Southern Transmission Project during the five fiscalyears succeeding Junc 30, 1986 are $2,260,000 in 1989,
$3,785,000 in 1990 and $7,905,000 in 1991. No principalmaturities ofbonds outstanding at June 30, 1986 arescheduled for fiscal 1987 and 1988.
The funds required by the STS Bond Indenture and the STS
Note Resolution contain balances, in thousands, as follows:June 30,
16
Fund Held by Purpose
Construction
Debt Scrvicc
Trustee
TfUs'ccc
To disburse funds for'he costofacquisition and construc-tion ofchc Project
To pay interest and principalrelated co the Rcvcnuc Bonds
Note Fiscal Agent To pay interest and principalrelated co chc Bond Anticipa-tion Notes
Bond AnticipationNote
Revenue
Trusccc
TrUstcc
To pay interest related co theBond Anticipation Notes
To initiallyreceive all reve-nues and disburse them toocher funds
Operating TrUsccc To pay operating expenses
Reserve andContingency
TIUStCC To pay capital improvementsand make up deficiencies inother funds and, in the caseof the Palo Verde Project,accumulate funds for decom-missioning
General Reserve Trustee To make up any dclicicncicsin other funds and any otherpurpose related to thc Project
Interim AdvancePayments
Tflls'ccc To disburse funds for chc costofconstruction of the projectduring the interim phase
Refunding bonds-In fiscal 1986 the Authority sold twoseries ofPower Project Refunding Bonds totaling $371,850,000to advance refund $292,215,000 of the Authority's Popover Pro-ject Revenue Bonds. In addition, thc Authority sold threescrics ofTransmission Project Refunding Bonds totaling$ 1,070,780,000 to advance refund $750,285,000 ofTransmis-sion Project Revenue Bonds, $97,430,000 ofTransmissionProject Refunding Bonds and $200,000,000 ofTransmissionProject Bond Anticipation Notes. The net proceeds of therefunding bonds, which have been placed in escrow accounts,have been invested in securities of thc Untied States Govern-ment. AtJune 30, 1986, $472,215,000 par value ofPower Pro-ject Revenue Bonds, $750,285,000 par value ofTransmissionProject Revenue Bonds, $97,430,000 par value ofTransmis-sion Project Refunding Bonds and $200,000,000 par value ofTransmission Project Bond Anticipation Notes are consideredextinguished for financial statement presentation.
NOTE D—Long.term bank loan payable:As ofJune 30, 1986, the Authority has borrowed
$ 14,148,000 to finance the feasibility study and developmentcosts of the Mead-Phoenix Project. This loan bears interest atapproximately 67% of the prime rate; however, the interestrate cannot exceed 12'. The average interest rate on thisloan was 6.13'nd 7.63 lo during 1986 and 1985. Interest ispaid on December I and Junc I ofeach year.
The proceeds of the loan were deposited in a DcvclopmcntFund for which the Icndcr is the trustee and can only be usedfor payment ofMead. Phoenix Project development costs,costs of issuance of the loan, including general and adminis-trative expenses of the Authority related to the Mead-Phoenix Project, and loan principal and intcrcst. AtJune30, 1986 and 1985, the balance in the Development Fundwas $3,690,000 and $ 5,548,000 ofwhich $3,677,000 and$5,535,000 were invested in sccuritics of the United StatesGovernment.
Ifthe Mead-Phoenix Project is terminated for any reasonprior to the issuance of long-term bonds to refinance theloan, ten California cities, the Salt River Project and theUnited States Department ofEnergy, Western Area PowerAdministration, have contracted to make payments to theAuthority based on their participation percentage sufficientto retire the loan and accrued interest thereon. The loan issecured solely by the restricted assets and thc abovementioned contracts.
The Authority has sold its entitlement to the output of thcPalo Verde Project pursuant to power sales contracts with tenmember participants (sce Note G). Under the terms of thepower sales contracts, the purchasers are entitled to poweroutput from the Palo Verde Nuclear Generating Station andare obligated to make payments on a "take or pay" basis fortheir proportionate share ofoperating and maintenanceexpenses and debt service on Power Project Rcvcnue Bondsand other debt, whether or not thc Palo Verde Project or anypart thereof has been completed, is operating or operable, orits output is suspended, intcrfcred with, reduced or curtailedor terminated. The contracts expire October 31, 2030 and, aslong as any Power Project Revenue Bonds arc outstanding,cannot be terminated or amended in any manner which willimpair or adversely affect the rights of the bondholders.
The Authority has entered into transmission service con-tracts with six member participants (see Note G). Under theterms of the transmission service contracts, the project partic-ipants are entitled to transmission service utilizing the South-ern Transmission Project and are obligated to make paymentson a "take or pay" basis for their proportionate share ofoper-ating and maintenance expenses and debt service on Trans-mission Project Revenue Bonds and other debt, whether ornot the Southern Transmission Project or any part thereofhas been completed, is operating or is operable, or its serviceis suspended, interfered with, reduced or curtailed or termi-nated. The contracts expire June 15, 2027 and, as long as anyTransmission Project Revenue Bonds are outstanding, cannotbe terminated or amended in any manner which willimpairor adversely affect the rights of the bondholdcrs.NOTE F—Costs recoverable from future billings toparticipants:
Billings to participants are designed to recover "costs" asdefined by the power sales and transmission service agree-ments. The billings are structured to systematically providefor the debt requircmcnts, operating funds and reserves inaccordance with these agreements. Those expenses, accord-ing to generally accepted accounting principles, which are notincluded as "costs" are deferred to such periods as they areintended to be rccovcrcd through billings.
NOTE G—Related party transactions:Under the terms of thc various contracts, the Authority
reimbursed the followingentities for work performed on therespective projects. The Department ofWater and Power ofthe City of Los Angeles has performed administrative andother work for the Authority totaling $310,000 and $379,000for thc years ended Junc 30, 1986 and 1985. Arizona PublicService Company (APS) as project manager of the Palo VerdeProject, billed thc Authority for various construction, oper-ating and maintenance costs totaling $50,101,000 and$35,252,000 for the years ended June 30, 1986 and 1985. IPAbilled the Authority for payments-in-aid ofconstructionrelating to the Southern Transmission Project $62,561,000and $321,388,000 for the years ended June 30, 1986 and 1985.Salt River Project, as development manager of the Mead-Phoenix Project, billed the Authority for various develop-
17
ment costs $ 1,165,000 and $299,000 for the years ended June30, 1986 and 1985.
Member participants have participation percentages as
follows:project participation percentage
Participant
City of Los AngelesCity ofAnaheitnCity ofRiversideImperial Irrigation
DistrictCity ofVernonCity ofAzusaCity ofBanningCity ofColtonCity ofBurbankCity ofGlendaleCity ofPasadena
HooverPalo Southern Mead. Uprate
Verde Transmission Phoenix Project
67.0% 59.5% 61.2%17.6 15.0 42.6%
5.4 10.2 6.0 3 1.9
6.54.9 3.01.0 — .6 0.21.0 — .6 2.1
1.0 — .6 3.24.5 5.0 16.0
4.0 2.3 5.05.9 3.0
100.0% 100.0% 100.0% 100.0%
NOTE H-Commitments and contingencies:The Authority estimated as ofJune 30, 1986 that the total
construction costs for the Authority's interest in the PaloVerde Project willbe approximately $470,000,000 ofwhich$366,000,000 had been expended as of that date.
The Authority estimated as ofAugust I, 1986 that the totalfinancing requirements for the Authority's interest in thc
Hoover Uprate Project willapproximate $34,435,000, ofwhich approximately $31,769,000 willbe expended for pay-ments for capacity and associated firmenergy and the aequi ~
sition ofcntitlements to capability. Construction is scheduledfor completion in September 1992.
The Authority is involved in various legal actions. In theopinion of manangement, the outcome of such litigation orclaims willnot have a material effect on the financial positionof the Authority or the respective separate projects.
Index to Supplemental SchedulesSupplemental Schedule ofRevenue Bonds and Bond Antici-
pation Notes Payable at June 30, 1986.
Palo Verde ProjectSupplemental Balance Sheet at June 30, 1986 and 1985.Supplemental Statement ofOperations for the Year Ended
June 30, 1986.Supplemental Statement of Changes In Financial Position for
the Years Ended June 30, 1986 and 1985.Supplemental Schedule of Receipts and Disbursements In
Funds Required By The Bond Indenture for the Year EndedJune 30, 1986.
Southern Transmission ProjectSupplemental Balance Sheet at June 30, 1986 and 1985.Supplemental Statement ofChanges In Financial Position for
the Years Ended Junc 30, 1986 and 1985.Supplemental Schedule ofReceipts and Disbursements In
Funds Rcquircd By Thc Bond Indenture for the Year EndedJune 30, 1986.
18
EffectiveInterest
Rate
Southern California Public Power AuthoritySupplemental Schedule Of Revenue And Refunding Bonds AndBond Anticipation Notes Payable AtJune 30, 1986(In thousands)
Dateof
Series SaleMaturityon
July I Total
Power Project Rcvcnuc and Rcfundin Bonds 1982A 8/13/82 8.18% 1988 to 2017 $ 141,3101982B 11/12/82 8.98% 1988 to 2017 44,4451983A 4/08/83 9.37% 1988 to 2017 150,0001984A 7/18/84 10.51% 1990 to 2004 42,0301985A 5/22/85 9.70% 1988 to 2014 208,3351985B 7/02/85 9.30% 1988 to 2017 214,2051986A 3/13/86 8.24% 1988 to 2015 157,645
957,970
Transmission Project Revenue and Refunding Bonds
Total Principal Amount
Unamortized Bond Discount:Power Project Revenue and Refunding BondsTransmission Project Revenue and Refunding BondsTotal Unamortized Bond Discount
1984A 2/09/841984B 10/17/841985A 8/15/851986A 3/IS/861986B 4/29/86
6.48% 1989 to 2021
8.01% 1988 to 2021
7.54% 1988 to 2023
6.52% 1990 to 2004
7.92% 1990 to 200065,945
18,770
121,620
371,720480,010
1,058,065
2,016,035
91,910
59,680
151,590Revenue and Refunding Bonds
Less Unamortized Bond Discount
Power Project Bond Anticipation Notes 1984A 7/18/84
$ 1,864,445
6/01/87 $ 75,000
Bonds which have been refunded have bccn omitted from this schedule.
19
Palo Verde ProjectSupplemental Balance Sheet(In thousands)
ASSETS
Utilityplant:ProductionTransmission
General
Less accumulated provision for depreciation
1986
$203,247
1,864
33
205,144
3,340
June 301985
Utilityplant in service
Construction work in progress
Nuclear fuel, at amortized cost
Special funds:InvestmentsInterest receivable
Cash
Accounts rcccivableCosts recoverable from future billings to participantsDeferred costs:
Unamortized debt expenses, less accumulated amortization of$ 10,959 and $ 5,581 in 19S6 and 1985
Other deferred costs
20I,M4342,317 $470,004
37,412 29,426
581,533 499,430
274,565 368,596
2,268 14,576
198 254
277,031 383,426
5,419 678
7,340
118,963 36,189
1,972
120,935 36,189
$992,258 $919,723
LIABILITIESLong. term debt:
Revenue bonds $866,060 $789,014
Bond anticipation notes 75,000 75,000
Less long.term debt due withinone year
941,060 864,014
75,000
Current liabilities:Long.term debt due within one year
Accrued interest payable
Accounts payablc and accrued liabilities
866,060
75,000
41,983
9,215
864,014
48,708
7,001
Commitments and contingcncics
126,198 55,709
$992,258 $919,723
20
Palo Verde ProjectSupplemental Statement Of Operations(In thousands)
Operating revenues:Sales ofclcctricity to participants
Operating cxpcnscs:Nuclear fuel expense
Other operationMaintenanceDepreciationExpense c)iarged to projects during construction
Total operating expenses
Debt expenses:Intcrcst on debt, nctInterest charged to projects during constructionNet debt expenses
Costs rccovcrable from future billings to participants (Note F)
Year endedJune 30, 1986
$ 10,(HZ
$ 2,022
3,395
I,HO3,340
(1,056)
9,141
84,294
(76,053)
8,241
17,382
(7,300)
$ 10,042
Palo Verde ProjectSupplemental Statement Of Changes ln Financial Position(In thousands)
Year ended June 30,
1986 1985
Funds provided by (used for):Operations
Revenues
Expenses
Charges not involving funds:Depreciation and amortizationOther, nct
FinancingSaic of revenue bonds
$ 10,042
(17,382)
5,362
7,933
5,955
$ 198,395Sale of refunding bondsSale ofbond anticipation notesPayment ofbond anticipation notesDcfcasance of revenue bondsReduction of long-term debtBond issue costs
UtilityplantOther, net
333,312 205,918
75,000
(112,875)
(289,320) (174,647)
(75,000)
(57,653) (47,960)
(88,661) 103,831
(87,065) (87,203)
(1,972)
$ (172,143) $ 56,628
Incrcasc (decrease) in funds:Investments
Intcrcst receivable
Cash
Accounts receivable
Long-term debt due within one year
Accrued intcrcst payable
$ (94,031) $ 67,096(12,308) 5,955
(56) 113
4,741 678
(75,000)
6,725 (15,329)Accounts payablc and accrued liabilities (2,214) (2,285)
$ (172, 103) $ 56,628
ZI
BondAnticipation Bond
Note Note 'scrotvFund Fund Fund
Palo Verde ProjectSupplemental Schedule Of Receipts And DisbursementsIn Funds Required By The Bond IndentureFor the year ended June 30, 1986(In thousands)
ConstructionFund.initial Deb!
Facilities ServiceAccottnt Fund
Reserveand
Contin- GeneralRevenue Operation gency Reserve
Fund Fund Fund Fund Total
Balance at June 30, 1985
Additions:$ 63,86Z $ 284,034 $ 4. $ 12,027 $210,539 $ 4- $ 6,014 $ 6,001 $ 4- $ 582,477
Bond and note proceeds
Bond and note interest received
Investtnent earnings
3,755
4,114 32,557
333,312
1,072 21,007
333,312
3,755
I 589 763 Z 60,105
Other incomeSales
Transfer-proceeds from sale ofinvestmcnts
88
2,563
(9,149) 9,149
9 105
8,646
202
11,209
Transfer-interest paymentsTransfer-power sales receipts
30,683 6,000 (6,000) (30,683)
1,806 (5,928) 3,325 455 342
Transfer-bond proceeds 563 (4,516) 3,953
TotalDeductions:
7,328 55,136 6,000 (4,928) 336,738 2,728 4,019 1,218 344 408,583
Construction expenditures 38,933 38,933
Operating expenditures
Property tax paidOtherFuel costs
Intcrcst paid
(2)
2,26228
4,131
224 110,028 6,000
4,319
10
4,317
2,262
28
4,179116,262
Financing costs/deposit repaid 2,618 8,016 10,634
Transfer of invcstmcnt earnings (30,390) 27,865 1,058 9 693 763 2
Total 17,804 137,893 6,000 1,058 8,016 9 5,070 763 2 176,615
Balance at June 30, 1986 $53,386 $201,277 $ -0- $ 6,041 $ 539,261 $2,719 $4,963 $6,456 $342 $814,445
This schedule summarizes thc receipts and disbursements in funds required under the bond indcnturc and has been prepared from thetrust statements. The balances in the funds consist ofcash and investmcnts at original cost. These balances do not include accrued intcrcstreccivablc of$2,268 and $ 14,576 at junc 30, 1986 and 1985, nor do they include total amortized net investment premiums of($4ZI) and
($3,088) at Junc 30, 1986 and 1985.
22
Southern %'ansmission ProjectSupplemental Balance Sheet(In thousands)
ASSETS
Utilityplant:
1986
June 30
1985
Construction work in progressSpecial funds:
Investments
Interest receivable
Accounts receivableDeferred costs:
Unamortized debt expcnscs, less accumulated amortization of$7,121 and $3,094 in 1986 and 1985
LIABILITIES
Long. term debt:Revenue bondsBond anticipation notes
Current liabilities:
$ 636,706 $ 534,176
219,546 561,674
2,278 11,880
221,824 573,55413 5,997
197,122 22,505
$ 1,055,665 $ 1,136,232
$ 998,385 $ 828,878
200,000
998,385 1,028,878
Accrued interest ayableAccounts payablc and accrued liabilities
Commit tnents and contingencies
49,717
7,563
57,280
09,245
58,109
107,354
$ 1,055,665 $ 1,136,232
23
Southern % ansmission ProjectSupplemental Statement Of Changes In Financial Position(In thousands)
Funds provided by (used for):Financing
Year ended june 30,
1986 1985
Sale of revenue bonds
Sale ofrefunding bonds
Payment ofbond anticipation notes
$ 1,010,213
$ 235,000
(200,000)
Defeasance ofbond anticipation notes
Defeasance of revenue bonds
Expense of issuing bonds
UtilityplantOther, net
Increase (decrease) in funds:Investments
Interest receivable
Accounts receivable
Accrued interest payable
Accounts payable and accrued liabilities
$ (342,128) $ (269,530)
(9,602) (7,331)
(5,984) 5,997
(472) (10,557)
50,506 (25,305)
$ (307,QO) $ (306,730)
(200,000)
(841,609)
(174,617) (0,878)
(206,013) 30,122
(102 530) (336 866)
903 14
$ (307,600) $(306,730)
Southern Transmission ProjectSupplemental Schedule Of Receipts And DisbursementsIn Funds Required By The Bond IndentureFor the year ended June 30, 1986(In thousands) Construction
Fund-Initial Debt Bondfacilities Service EscrowAccount Fund Note Fund Funds
NoteEscrowFund Total
Balance at Junc 30, 1985
Additions:$ 305,502 $219,710 $38,373 $ 4- $ 4- $ 563,585
Bond and note proceeds
Bond and note interest rcccivcd189,208 14,654
7 222
806,351 1,010,213
7,222Investment earnings 18,430 20,023 3,764 7,282 384 49,883Transfer for interest paymentTransfer of fundsTransfer of investmcntOther rcccipts
12,146
(340,248) (41,389)5,034
7,438(5,034)
173
(12,146)
177,194 204,443
7,611Total (120,138) 12,656 (1,097) 978,681 2(H,827 1,074,929
Deductions:Payments.in-aid ofconstruction and administrative costs aid 121,129 121,129Interest paidFinancing costs paidTransfer of investment earnings
659 93,647 13,500
7,925
(38,185) 14,405 23,776
12,334
107,806
20,259
TotalBalance at Junc 30, 1986
91,528 108,052 37,276 12,334 4 249,194
$ 93,836 $ 124,3 14 $ -0- $966,347 $204,823 $ 1,389,320
This schedule summarizes thc rcccipts and disburscmcnts in funds required under thc bond indcnturc and has bccn prepared from thetrust statements. The balances in the funds consist ofcash and investments at original cost. These balances do not include accrued interestreccivablc of$2,278 and $ 11,880 at June 30, 1986 and 1985, nor do they include total amortized net invcstmcnt premiums and discountsof$ 1,396 and ($ 1,911) at Junc 30, 1986 and 1985.
SOUTHERN CALIFORNIAPUBLIC POWER AUTHORITY613 E. Broadway, Room 300Glendale, California 91205
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