<PAGE>
==============================================================================
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.
==============================================================================
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
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)
--------------------------
<S> <C> <C>
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
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
3
<PAGE>
<TABLE>
<CAPTION>
OGLETHORPE POWER CORPORATION
CONDENSED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
- -------------------------------------------------------------------------------------
(dollars in thousands)
1996 1995
EQUITIES AND LIABILITIES (Unaudited)
-------------------------
<S> <C> <C>
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
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
4
<PAGE>
<TABLE>
<CAPTION>
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
------------------------------
<S> <C> <C>
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
--------- ---------
--------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed statements.
5
<PAGE>
<TABLE>
<CAPTION>
OGLETHORPE POWER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
- -------------------------------------------------------------------------------------
(dollars in thousands)
1996 1995
-----------------------
<S> <C> <C>
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 - -
</TABLE>
The accompanying notes are an integral part of these condensed statements.
6
<PAGE>
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
<PAGE>
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
<PAGE>
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:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1996 1995
--------------------------
(dollars in thousands)
<S> <C> <C>
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
======= =======
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
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-
<PAGE>
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-
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
EXHIBIT 3.2 (CONTINUED)
OPC ALLOCATION OF
FIRST CONTINGENCY TOTAL TRANSFER CAPABILITY (FCTTC)
UNDER NORMAL OPERATIONG CONDITIONS
(EFFECTIVE JANURAY-MAY, 1996)
<TABLE>
<CAPTION>
FCTTC (MVA)
Interface with Georgia ITS To Georgia ITS From Georgia ITS
- -------------------------- -------------- ----------------
<S> <C> <C>
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
</TABLE>
<PAGE>
EXHIBIT 3.2 (CONTINUED)
OPC ALLOCATION OF
FIRST CONTINGENCY TOTAL TRANSFER CAPABILITY (FCTTC)
UNDER NORMAL OPERATIONG CONDITIONS
(EFFECTIVE JUNE-AUGUST, 1996)
<TABLE>
<CAPTION>
FCTTC (MVA)
Interface with Georgia ITS To Georgia ITS From Georgia ITS
- -------------------------- -------------- ----------------
<S> <C> <C>
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*
</TABLE>
*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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK<F1>
<TOTAL-NET-UTILITY-PLANT> 4,449,940
<OTHER-PROPERTY-AND-INVEST> 144,233
<TOTAL-CURRENT-ASSETS> 441,602
<TOTAL-DEFERRED-CHARGES> 356,129
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,391,904
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 346,797
<TOTAL-COMMON-STOCKHOLDERS-EQ> 0
0
0
<LONG-TERM-DEBT-NET> 4,181,779
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 93,005
0
<CAPITAL-LEASE-OBLIGATIONS> 295,779
<LEASES-CURRENT> 5,480
<OTHER-ITEMS-CAPITAL-AND-LIAB> 469,064
<TOT-CAPITALIZATION-AND-LIAB> 5,391,904
<GROSS-OPERATING-REVENUE> 275,701
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 202,133
<TOTAL-OPERATING-EXPENSES> 202,133
<OPERATING-INCOME-LOSS> 73,568
<OTHER-INCOME-NET> 16,937
<INCOME-BEFORE-INTEREST-EXPEN> 90,505
<TOTAL-INTEREST-EXPENSE> 81,517
<NET-INCOME> 8,988
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 53,761
<CASH-FLOW-OPERATIONS> 3,203
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>$346,797 REPRESENTS TOTAL RETAINED PATRONAGE CAPITAL.
THE REGISTRANT IS A MEMBERSHIP CORPORATION AND HAS NO
AUTHORIZED OR OUTSTANDING EQUITY SECURITIES.
</FN>
</TABLE>
