<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
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 number 1-3280
PUBLIC SERVICE COMPANY OF COLORADO
(Exact name of registrant as specified in its charter)
COLORADO 84-0296600
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1225 17TH STREET, DENVER, COLORADO 80202
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 571-7511
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
COMMON STOCK, PAR VALUE $5 PER SHARE New York, Chicago and Pacific
RIGHTS TO PURCHASE COMMON STOCK New York, Chicago and Pacific
CUMULATIVE PREFERRED STOCK, PAR VALUE
$100 PER SHARE
4 1/4 Series American
7.15% Series New York
CUMULATIVE PREFERRED STOCK ($25),
PAR VALUE PER SHARE
8.40% Series New York
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
CUMULATIVE PREFERRED STOCK, PAR VALUE $100 PER SHARE
(TITLE OF CLASS)
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 TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [_]
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [X]
THE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK, $5.00 PAR
VALUE (THE ONLY CLASS OF VOTING STOCK), HELD BY NON-AFFILIATES WAS
$2,264,862,654 BASED ON THE LAST SALE PRICE THEREOF REPORTED ON THE CONSOLIDATED
TAPE FOR FEBRUARY 20, 1996.
AT FEBRUARY 20, 1996, 63,798,948 SHARES OF THE REGISTRANT'S COMMON STOCK,
$5.00 PAR VALUE (THE ONLY CLASS OF COMMON STOCK), WERE OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
PORTIONS OF THE REGISTRANT'S 1996 PROXY STATEMENT ARE INCORPORATED BY REFERENCE
IN PART II, ITEM 9 AND PART III, ITEMS 10, 11, 12 AND 13 OF THIS FORM 10-K.
<PAGE>
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
<S> <C>
Item l. Business....................................... 1
The Company.......................................... 1
Electric Operations.................................. 1
Peak Load.......................................... 2
Purchased Power.................................... 2
Construction Program............................... 4
Fort St. Vrain..................................... 5
Electric Fuel Supply................................. 5
Coal............................................... 5
Natural Gas and Fuel Oil........................... 6
Natural Gas Operations............................... 6
Gas Supply......................................... 7
YGSC............................................... 7
WGI................................................ 8
WGT................................................ 8
Fuelco............................................. 8
e prime............................................ 8
Regulation and Rates................................. 8
1995 Merger Rate Filings........................... 8
State Regulation................................... 9
CPUC............................................. 9
Electric and Gas Adjustment Clauses.............. 9
Incentive Regulation and Demand Side Management.. 10
1993 Rate Case................................... 10
IRP - Electric................................... 10
WPSC............................................. 11
Federal Energy Regulatory Commission............... 11
Environmental Matters................................ 12
Competition.......................................... 13
Industry Outlook................................... 13
State Regulatory Environment....................... 13
Electric........................................... 14
Natural Gas........................................ 14
Franchises........................................... 14
Employees & Union Contracts.......................... 14
Research and Development............................. 15
Consolidated Electric Operating Statistics........... 16
Consolidated Gas Operating Statistics................ 17
Electric Transmission Map............................ 18
Item 2. Properties..................................... 19
Electric Property.................................... 19
Nuclear Property..................................... 19
Transmission and Distribution Property............... 19
Gas Property......................................... 20
Other Property....................................... 20
Property of Subsidiaries............................. 20
Character of Ownership............................... 21
Item 3. Legal Proceedings.............................. 21
</TABLE>
i
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<TABLE>
<CAPTION>
<S> <C>
Item 4. Submission of Matters to a Vote of Security Holders...................... 21
<CAPTION>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.... 22
Item 6. Selected Financial Data.................................................. 23
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations...................................................... 24
Industry Outlook............................................................... 24
Corporate Overview............................................................. 24
Earnings....................................................................... 25
Electric Operations............................................................ 25
Gas Operations................................................................. 26
Non-Fuel Operating Expenses.................................................... 27
Financial Position............................................................. 28
Recently Issued Accounting Standards Not Yet Adopted........................... 28
Commitments and Contingencies.................................................. 28
Common Stock Dividend.......................................................... 29
Liquidity and Capital Resources................................................ 29
Cash Flows................................................................... 29
Prospective Capital Requirements............................................. 30
Capital Sources.............................................................. 30
Item 8. Financial Statements and Supplementary Data.............................. 33
Report of Independent Public Accountants....................................... 33
Consolidated Balance Sheets.................................................... 34
Consolidated Statements of Income.............................................. 36
Consolidated Statements of Shareholders' Equity................................ 37
Consolidated Statements of Cash Flows.......................................... 38
Notes to Consolidated Financial Statements..................................... 39
Schedule II....................................................................... 67
Exhibit 12(a)..................................................................... 68
Exhibit 12(b)..................................................................... 69
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure............................................... 70
<CAPTION>
PART III
Item 10. Directors and Executive Officers of the Registrant....................... 70
Item 11. Executive Compensation................................................... 72
Item 12. Security Ownership of Certain Beneficial Owners and Management........... 72
Item 13. Certain Relationships and Related Transactions........................... 72
<CAPTION>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.......... 73
</TABLE>
ii
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<TABLE>
<CAPTION>
<S> <C>
Experts................................................. 75
Consent of Independent Public Accountants............... 76
Power of Attorney....................................... 76
Signatures.............................................. 77
Exhibit Index........................................... 79
</TABLE>
iii
<PAGE>
TERMS
The abbreviations or acronyms used in the text and notes are defined below:
<TABLE>
<CAPTION>
<C> <S>
ABBREVIATION OR ACRONYM TERM
- -------------------------------------------------------------------------------
AFDC................................Allowance for Funds Used During Construction
Amax..........................................................Amax Coal Company,
a subsidiary of Cyprus/Amax Coal Company
Arapahoe..............................Arapahoe Steam Electric Generating Station
BLM....................................................Bureau of Land Management
Boulder District Court...........District Court in and for the County of Boulder
Cameo....................................Cameo Steam Electric Generating Station
CCT3...................................................Clean Coal Technology III
CERCLA......Comprehensive Environmental Response, Compensation and Liability Act
Cherokee..............................Cherokee Steam Electric Generating Station
Cheyenne..................................Cheyenne Light, Fuel and Power Company
COLI..............................................Corporate-owned life insurance
Colorado Supreme Court....................Supreme Court of the State of Colorado
Comanche..............................Comanche Steam Electric Generating Station
Company..............Public Service Company of Colorado (excluding subsidiaries)
COM...................................................Continuous opacity monitor
CPCN.............................Certificate of Public Convenience and Necessity
CPUC........................Public Utilities Commission of the State of Colorado
Craig....................................Craig Steam Electric Generating Station
CWIP...............................................Construction Work in Progress
CWQCD....................................Colorado Water Quality Control Division
Denver District Court....District Court in and for the City and County of Denver
DOE....................................................U.S. Department of Energy
DSM.......................................................Demand Side Management
DSMCA.....................................Demand Side Management Cost Adjustment
e prime............................................................e prime, inc.
ECA.......................................................Energy Cost Adjustment
EIS...............................................Environmental Impact Statement
EPAct.........................................National Energy Policy Act of 1992
EPA.........................................U.S. Environmental Protection Agency
EWG...................................................Exempt Wholesale Generator
FASB........................................Financial Accounting Standards Board
FERC........................................Federal Energy Regulatory Commission
FERC Order 636...................................FERC Order Nos. 636-A and 636-B
Fort St. Vrain................Fort St. Vrain Nuclear Electric Generating Station
Fuelco............................................Fuel Resources Development Co.
GCA..........................................................Gas Cost Adjustment
Hayden..................................Hayden Steam Electric Generating Station
IBM..............................................................IBM Corporation
Interstate.......................................Colorado Interstate Gas Company
IPPF.......................................Independent Power Production Facility
IRP.....................................................Integrated Resource Plan
IRS.....................................................Internal Revenue Service
ISFSI................................Independent Spent Fuel Storage Installation
ISSC....................................Integrated Systems Solutions Corporation
KN Energy........................................................KN Energy, Inc.
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
Merger Agreement...............Agreement and Plan of Reorganization by and among
the Company, SPS, and NCE, as amended
Natural Fuels..........................................Natural Fuels Corporation
NCE...................................................New Century Energies, Inc.
NOPR...............................................Notice of Proposed Rulemaking
NOx...............................................................Nitrogen Oxide
NRC................................................Nuclear Regulatory Commission
OCC..........................................Colorado Office of Consumer Counsel
OPEB......................................Other Postretirement Employee Benefits
PCB.....................................................Polychlorinated biphenyl
Pawnee..................................Pawnee Steam Electric Generating Station
Pawnee 2.............Pawnee Steam Electric Generating Station, Unit 2 (proposed)
Pool...........................................................Inland Power Pool
PRPs.............................................Potentially Responsible Parties
PSCCC.............................................PS Colorado Credit Corporation
PSCO Gas Companies..........Gas Operations of Public Service Company of Colorado
(excluding subsidiaries) and Cheyenne Light, Fuel
and Power Company
PSRI.......................................................PSR Investments, Inc.
PUHCA.................................Public Utility Holding Company Act of 1935
QF...........................................................Qualifying Facility
QFCCA.............................Qualifying Facilities Capacity Cost Adjustment
SEC...........................................Securities and Exchange Commission
SFAS 71.....................Statement of Financial Accounting Standards No. 71 -
"Accounting for the Effects of Certain Types of Regulation"
SFAS 106...................Statement of Financial Accounting Standards No. 106 -
"Employers' Accounting for Postretirement
Benefits Other Than Pensions"
SFAS 107...................Statement of Financial Accounting Standards No. 107 -
"Disclosures about Fair Value of Financial Instruments"
SFAS 109...................Statement of Financial Accounting Standards No. 109 -
"Accounting for Income Taxes"
SFAS 112...................Statement of Financial Accounting Standards No. 112 -
"Employers' Accounting for Postemployment Benefits"
SFAS 121...................Statement of Financial Accounting Standards No. 121 -
"Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of"
SO2...............................................................Sulfur Dioxide
SPS..........................................Southwestern Public Service Company
Synhytech........................................................Synhytech, Inc.
Tri-State................Tri-State Generation and Transmission Association, Inc.
Valmont................................Valmont Steam Electric Generating Station
WGG......................................................WestGas Gathering, Inc.
WGI.....................................................WestGas InterState, Inc.
WGT..................................................WestGas TransColorado, Inc.
WPSC........................................Public Service Commission of Wyoming
WSCC........................................Western Systems Coordinating Council
Young Storage....................................Young Gas Storage Company, Ltd.
YGSC...................................................Young Gas Storage Company
Zuni......................................Zuni Steam Electric Generating Station
</TABLE>
v
<PAGE>
PART I
ITEM 1. BUSINESS
THE COMPANY
The Company, incorporated through merger of predecessors under the laws of
the State of Colorado in 1924, is an operating public utility engaged, together
with its subsidiaries, principally in the generation, purchase, transmission,
distribution and sale of electricity and in the purchase, transmission,
distribution, sale and transportation of natural gas. The Company provides
electricity or gas or both in an area having an estimated population of 2.9
million people of which approximately 2.1 million are in the Denver metropolitan
area. The Company's operations are wholly within the State of Colorado.
On August 22, 1995, the Company, SPS, a New Mexico corporation, and NCE, a
newly formed Delaware corporation, entered into a Merger Agreement providing for
a business combination as peer firms involving the Company and SPS in a "merger
of equals" transaction. As part of the agreement, NCE would become the parent
company for the Company and SPS. On January, 30, 1996, NCE filed its
application with the SEC to be a registered public utility holding company. The
shareholders of the Company and SPS approved the Merger Agreement on January 31,
1996. Further information on the merger is provided in Note 3. Merger in Item
8. Financial Statements And Supplementary Data.
As of December 31, 1995, the Company owned all of the outstanding capital
stock of Cheyenne, WGI, e prime, Fuelco, YGSC, 1480 Welton, Inc., PSRI, PSCCC
and Green and Clear Lakes Company. In addition, the Company owned 80% of the
capital stock of Natural Fuels. These subsidiaries are included in the Company's
consolidated financial statements as is WGT, whose interest in the TransColorado
Project was sold and the company subsequently dissolved, effective December 1,
1995 (see "Natural Gas Operations - WGT").
Cheyenne is an electric and gas utility operating principally in Cheyenne,
Wyoming; WGI is a natural gas transmission company operating in Colorado and
Wyoming; e prime is engaged or intends to engage in energy-related activities
and the provision of consumer services which include, but are not limited to
electric and gas brokering, energy consulting and project development services
and information processing and other technology based services; Fuelco has been
engaged in the exploration for, and the development and production of, natural
gas and oil principally in Colorado; YGSC owns a 47.5% interest in the Young
Storage partnership which owns and operates a gas storage facility in
northeastern Colorado and, effective February 1, 1996, became a subsidiary of e
prime; 1480 Welton, Inc. is a real estate company which owns certain of the
Company's real estate interests; PSRI owns and manages permanent life insurance
policies on certain past and present employees, the benefits from which are to
provide future funding for general corporate purposes; PSCCC is a finance
company that finances certain of the Company's current assets; Green and Clear
Lakes Company owns water rights and storage facilities for water used at the
Company's Georgetown Hydroelectric Station; and Natural Fuels sells compressed
natural gas as a transportation fuel to retail markets, converts vehicles for
natural gas usage, constructs fueling facilities and sells miscellaneous fueling
facility equipment. The Company also holds a controlling interest in several
other relatively small ditch and water companies whose capital requirements are
not significant and which are not consolidated in the Company's financial
statements or statistical data.
Information regarding industry segments is set forth in Note 14. Segments
of Business in Item 8. Financial Statements And Supplementary Data.
ELECTRIC OPERATIONS
In the Company's IRP, which was approved by the CPUC in 1994 (see
"Regulation and Rates - State Regulation - IRP - Electric"), and its IRP Annual
Progress Report filed with the CPUC in October 1995, the Company proposes to use
the following resources to meet its net dependable system capacity: 1) the
Company's
1
<PAGE>
electric generating stations (see Electric Property in Item 2.
Properties); 2) purchases from other utilities and from QFs and IPPFs; 3)
demand-side options and 4) new generation alternatives, including repowering
Fort St. Vrain.
PEAK LOAD
During 1996, net firm system peak demand for the Company and Cheyenne is
estimated to be 4,187 Mw, assuming normal weather conditions. Net dependable
system capacity is projected to be, after accounting for 68 Mw of demand-side
options, 5,097 Mw (generating capacity of 3,313 Mw and firm purchases of 1,784
Mw) at the time of the anticipated 1996 system peak (summer season), resulting
in a reserve margin of approximately 22%.
The net firm system peak demand for the Company and Cheyenne for each of
the last five years was as follows:
1991 1992 1993 1994 1995
----- ----- ----- ----- -----
Net Firm System Peak Demand* (Mw) 3,568 3,757 3,869 3,972 4,248
______________
* Excludes station housepower, nonfirm electric furnace load and controlled
interruptible loads (of which approximately 162 Mw, 156 Mw, 164 Mw, 160 Mw
and 148 Mw in the years 1991-1995, respectively, was not interrupted at the
time of the system peak).
The net firm system peak demand for the Company and Cheyenne for the years
1991-1995 occurred in the summer. The net firm system peak demand for 1995,
which occurred on August 11, 1995, was 4,248 Mw. At that time, the net
dependable system capacity totaled 4,911 Mw (generating capacity of 3,186 Mw,
together with firm purchases of 1,725 Mw), which represented a reserve margin of
approximately 16%. Net dependable system capacity is the maximum net capacity
available from both Company-owned generating units and purchase power contracts
to meet the net firm system peak demand.
PURCHASED POWER
The Company purchases capacity and energy from various regional utilities as
well as QFs and an IPPF in order to meet the energy needs of its customers.
Capacity, typically measured in Kws or Mws, is the measure of the rate at which
a particular generating source produces electricity. Energy, typically measured
in Kwhs or Mwhs, is a measure of the amount of electricity produced from a
particular generating source over a period of time. Purchase power contracts
typically provide for a charge for the capacity from a particular generating
source, together with a charge for the associated energy actually purchased from
such generating source. The Company and Cheyenne have contracted with the
following sources for the firm purchase of capacity and energy at the time of
the anticipated summer 1996 net firm system peak demand through the expiration
of the contracts:
2
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<TABLE>
<CAPTION>
Mw Contracted
For at the Time
of the Anticipated
Generating Summer 1996 Net Firm Contract
Company Source System Peak Demand Expiration
- --------------------------------------- ------------------------ -------------------- -----------
<S> <C> <C> <C>
Basin Electric Power Cooperative, Laramie River Station
Agreements 1 and 2 (a) (b) Units 2 and 3 175 2016
PacifiCorp (c) PacifiCorp System 134 2000
PacifiCorp (d) PacifiCorp Resource Pool 176 2011
Platte River Power Authority (a) (e) Craig Units 1 and 2; 197 2004
Rawhide Unit 1
Tri-State 475 (f)
Agreements 1, 2, 3 and 4 (a) (f) Laramie River Station
Units 2 and 3;
Craig Units 1, 2 and 3
Agreement 5 (a) (f) Laramie River Station
Units 2 and 3;
Craig Units 1, 2 and 3;
Nucla Units 1, 2, 3 and 4
Various Owners (a) QFs & IPPF 627 Various dates
---------
1,784
=========
</TABLE>
____________
(a) These contracts are contingent upon the availability of the units listed as
the generating source. These contracts are take and pay contracts. Based
upon the terms of these agreements, if the capacity is available from these
units, the Company is obligated to pay for capacity whether or not it takes
any energy. However, the Company has historically satisfied the minimum
energy requirements associated with these agreements and anticipates doing
so in the future. Additionally, if these units are unavailable, the
supplying company has no obligation to furnish capacity or energy and the
capacity charge to the Company is reduced accordingly.
(b) The Company has entered into two agreements with Basin Electric Power
Cooperative. The first agreement is for 100 Mw of capacity through March
31, 2016. The second agreement is for 75 Mw of summer season capacity
through March 31, 2016 and 25 Mw of winter season capacity through March
31, 2010.
(c) The current Cheyenne contract originally expired April 1, 1997. However, a
new Cheyenne contract was executed in 1995 with an effective date of
January 1, 1997. As in the previous contract, the new contract calls for
PacifiCorp to sell to Cheyenne the total electric capacity and energy
requirements associated with the operation of Cheyenne's service area.
(d) The current agreement with PacifiCorp expires October 31, 2022. However,
the agreement provides the Company the opportunity to exercise an
irrevocable option to terminate the agreement on December 31, 2011,
provided the Company gives notice to PacifiCorp no later than March 1,
2002.
(e) The amount of capacity to be made available for each summer and winter
season is agreed upon prior to such season to the extent that Platte River
Power Authority has excess capacity for such season.
(f) The Company has entered into five agreements with Tri-State. Agreements 1,
2 and 5 are contracts for 100 Mw each of capacity and expire in 2001, 2017
and 2011, respectively. Agreement 3 is a contract for 25 Mw of summer
season capacity and 75 Mw of winter season capacity and expires in 2016.
Agreement 4 expires in 2018 and the related capacity is for the following
amounts: 1996 - 150 Mw, 1997 through 2000 - 200 Mw and 2001 through 2018 -
250 Mw; however, either party may elect to reduce the Agreement 4 capacity
by up to 50 Mw each year, except for 2001, effective in the year 1999. If
the full 50 Mw reduction is taken each year, the capacity associated with
Agreement 4 from 1999 on would be as follows: 1999 - 150 Mw, 2000 through
2001 - 100 Mw, 2002 - 50 Mw with no commitments thereafter. The Company
has notified Tri-State of its intent to reduce the capacity associated with
Agreement 4 to 150 Mw for 1999.
3
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See Note 9. Commitments and Contingencies-Purchase Requirements in Item 8.
Financial Statements And Supplementary Data for information regarding the
Company's financial commitments under these contracts. See Transmission and
Distribution Property in Item 2. Properties for a discussion of the Company's
interconnections with these sources.
Based on present estimates, the Company and Cheyenne will purchase
approximately 36% of the total electric system energy input for 1996, the same
as in 1995. In addition, based on the capacity associated with the purchase
power contracts described above, approximately 35% of the total net dependable
system capacity for the estimated summer 1996 net firm system peak demand for
the Company and Cheyenne will be provided by purchased power, compared to
approximately 35% in 1995.
In accordance with the Public Utility Regulatory Policies Act of 1978
("PURPA"), the Company is obligated to purchase at "avoided cost" capacity and
energy from QFs. The Company has had tariffs in effect since 1984 for these
purchases.
In December 1987, the CPUC issued an order imposing a moratorium during
which the Company was no longer required to continue to execute additional QF
contracts due to the fact that excess generating capacity would be created if
additional contracts were executed. Although a comprehensive QF bidding
procedure was adopted by the CPUC in 1988, which allowed the Company to purchase
the most competitively priced QF power, all of the QF capacity purchased by the
Company, including approximately 5 Mw of additional capacity scheduled to come
on line in the future, is being purchased under contracts entered into prior to
the adoption of such procedure. Based on the 1988 comprehensive QF bidding
criteria, QFs could provide up to 20% of the Company's net firm system peak
load. The CPUC has circulated proposed new rules that would supplant the 1988
comprehensive QF bidding criteria whereby long-term future resource needs would
be selected through a competitive bidding process. In 1995, approximately 14%
of the Company's summer net firm system peak demand was provided by QFs.
In addition to long-term and QF and IPPF purchases, the Company also made
short-term and non-firm purchases throughout the year to replace generation from
Company owned units which were unavailable due to maintenance and unplanned
outages, to provide the Company's reserve obligation to the Pool, to obtain
energy at a lower cost than that which could be produced by higher-cost resource
options, including Company-owned generation and/or long-term purchase power
contracts, and for various other operating requirements. Short-term and non-
firm purchases accounted for approximately 3% of the Company's total energy
requirement in 1995.
Based on current projections, the Company expects that purchased capacity
will continue to meet a significant portion of system requirements at least for
the remainder of the 1990s. Such purchases neither require the Company to make
an investment nor afford the Company an opportunity to earn a return. Further
discussion related to recovery of purchased capacity costs can be found in
"Regulations and Rates - State Regulation - Electric and Gas Adjustment
Clauses."
The Company is a member of the Pool which is composed of members each of
which owns and/or operates electric generation and/or transmission systems which
are interconnected to one or more other member systems. The objective of the
Pool is to provide capacity which is categorized as: 1) immediately accessible;
2) accessible within ten minutes; and 3) accessible within twelve hours, as
required. As a result of membership in the Pool, the Company can supply and
protect its electric system with less aggregate operating reserve capacity than
otherwise would be necessary; emergency conditions can be met with less
likelihood of curtailment or impairment of electric service; and generation and
transmission facilities and interconnections can be used more efficiently and
economically.
CONSTRUCTION PROGRAM
At December 31, 1995, the Company and its subsidiaries estimated the cost
of their total construction program, including AFDC, to be approximately $323
million in 1996, and approximately $308 million in both
4
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1997 and 1998 (see Item 7. Management's Discussion And Analysis Of Financial
Condition And Results Of Operations).
FORT ST. VRAIN
See Note 2. Fort St. Vrain in Item 8. Financial Statements And
Supplementary Data.
ELECTRIC FUEL SUPPLY
The following table presents the delivered cost per million Btu of each
category of fuel consumed by the system for electric generation of the Company
and its utility subsidiaries during the years indicated, the percentage of total
fuel requirements represented by each category of fuel and the weighted average
cost of all fuels during such years:
<TABLE>
<CAPTION>
Weighted
Average
Coal* Gas All Fuels**
----------- ---------- -----------
Cost $ % Cost $ % Cost $
<S> <C> <C> <C> <C> <C>
1995...... 0.992 99 1.521 1 0.998
1994...... 1.038 99 2.069 1 1.053
1993...... 1.078 98 2.319 2 1.097
1992...... 1.091 99 2.065 1 1.105
1991...... 1.176 98 1.991 2 1.198
</TABLE>
* The average cost per ton of coal, including freight, for years 1991 through
1995 shown above was $22.40, $21.14, $21.03, $20.57 and $19.06,
respectively.
** Insignificant purchases of oil are included.
COAL
The Company's primary fuel for its steam electric generating stations is
low-sulfur western coal. The Company's coal requirements are purchased
primarily under seven long-term contracts with suppliers operating in Colorado
and Wyoming, the largest of which is with Cyprus/Amax Coal Company, which
operates the Belle Ayr and Eagle Butte Mines near Gillette, Wyoming and the
Foidel Creek and Empire Energy mines in northwestern Colorado.
Long-term contracts presently in existence provide for a substantial
portion of future annual coal requirements for existing plants through 1997.
Any shortfall will be provided by purchases on the spot market. During the year
ended December 31, 1995, the Company's coal requirements for existing plants
were approximately 8,721,970 tons, a substantial portion of which was supplied
pursuant to long-term supply contracts. Coal supply inventories at December 31,
1995 were approximately 55 days usage, based on the average peak burn rate for
all the Company's coal-fired plants.
The following table is a synopsis of the basic supply provisions of the
existing long-term contracts, which provide a minimum delivery of approximately
86 million tons of low-sulfur coal over their remaining life (see Note 9.
Commitments and Contingencies-Purchase Requirements in Item 8. Financial
Statements And Supplementary Data ).
5
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<TABLE>
<CAPTION>
MINIMUM MAXIMUM CONTRACT
DELIVERY DELIVERY MAXIMUM
PER CONTRACT YEAR PER CONTRACT YEAR SULFUR
COAL SUPPLIER AND DELIVERY YEAR IN TONS IN TONS CONTENT
- ------------------------------- ------------------ ----------------- ---------
<S> <C> <C> <C>
Amax (1)
1988 through Pawnee 2 completion.. 3,960,000 (2) 0.50%
Pawnee 2 completion through 2013... 3,600,000 (3) 0.50%
Colowyo Coal Company
1992 through 2017.................. 79,429 (4) 79,429 0.70%
Cyprus Coal Company
1988 through 1997.................. 1,700,000 1,900,000 0.60%
Mountain Coal Company
1993 through 2000.................. 600,000 (5) 800,000 0.67%
Powderhorn Coal Company
1995 through 1999.................. 150,000 350,000 0.69%
Seneca Coals, Ltd (6)
1992 through 2004.................. 439,800 (7) 1.00%
Trapper Mining, Inc.
1992 through 2014.................. 189,108 (8) 189,108 (9)
</TABLE>
(1) The contract term is completed upon delivery of 144,843,970 tons regardless
of the year in which delivery is completed. From January 1, 1976 through
December 31, 1995, 75,103,562 tons have been delivered.
(2) Coal requirements of Comanche and Pawnee.
(3) Coal requirements of Pawnee and Pawnee 2.
(4) The contract minimum quantity varies by year during the agreement from
79,429 tons in 1995 to 124,810 tons in 2017.
(5) The contract term is completed on December 31, 2000 or upon delivery of
3,200,000 tons. As of December 31, 1995, 1,583,587 tons have been
delivered.
(6) The contract term is completed upon total delivery of 31,250,000 tons to
Hayden from and after January 1, 1983. As of December 31, 1995, 19,039,334
tons have been delivered. Delivery is expected to be completed in the year
2004.
(7) Coal requirements of Hayden.
(8) The contract minimum quantity varies by year during the agreement from
189,108 tons in 1995 to 140,621 tons in 2014.
(9) Not specified in the contract.
Each coal contract contains adjustment clauses which permit periodic price
increases or decreases. See Note 9. Commitments and Contingencies - Purchase
Requirements in Item 8. Financial Statements And Supplementary Data for
information regarding the Company's financial commitments under these contracts
as well as coal transportation contracts.
NATURAL GAS AND FUEL OIL
The Company uses both firm and interruptible natural gas and standby oil in
combustion turbines and certain boilers. Natural gas supplies for the Company's
power plants are procured under short-term contracts on a competitive basis to
provide an adequate supply of fuel.
NATURAL GAS OPERATIONS
During the period 1991-1995, the PSCo Gas Companies experienced growth in
the number of commercial and residential customers ranging from 1.3% to 3.1%
annually. Since 1991, commercial and residential gas volumes sold have averaged
152.7 Bcf annually, while industrial volumes sold have declined from 2.5 Bcf in
1991 to 0.05 Bcf in 1995. The growth of commercial and residential sales has
been moderate to strong
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due primarily to economic conditions in Colorado and Wyoming. Industrial sales
have declined primarily because a majority of industrial customers have switched
to purchasing gas directly from suppliers. In most cases, the PSCo Gas Companies
transport gas from the suppliers to such industrial customers through the PSCo
Gas Companies' transmission and distribution facilities. Fees for this
transportation service, which are paid by these industrial customers,
substantially offset the effect on net income of the revenue loss from decreased
sales of gas to these industrial customers. During 1995, transportation services
of the PSCo Gas Companies generated revenues of $23.8 million compared to $23.5
million in 1994 and $23.2 million in 1993.
The Company recognizes that the divestiture of its existing gas business or
certain non-utility ventures is a possibility under the new registered holding
company structure proposed as part of the merger with SPS (see Note 3. Merger in
Item 8. Financial Statements And Supplementary Data), but is seeking approval
from the SEC to maintain these businesses. If divestiture is ultimately
required, the SEC has historically allowed companies sufficient time to
accomplish divestitures in a manner that protects shareholder value.
Additionally, in the event that divestiture of the gas business is required, the
Company will pursue an alternative corporate organizational structure that will
permit retention of the gas business.
GAS SUPPLY
The PSCo Gas Companies have attempted to maintain low cost, reliable gas
supplies by optimizing the balance between long- and short-term gas purchase
contracts. During 1995, the PSCo Gas Companies purchased 137.0 Bcf (at 14.65
pounds per square inch) from approximately 77 suppliers, including the following
major suppliers: Interstate (38.2 Bcf); Amoco (10.5 Bcf); Barrett Resources
(5.9 Bcf); Coastal Gas Marketing (5.3 Bcf); and KN Gas Supply Services, Inc.
(5.1 Bcf). In 1995, the average delivered cost per Mcf for the PSCo Gas
Companies was $2.31 compared to $2.86 per Mcf in 1994 and $2.82 per Mcf in 1993.
As indicated above, Interstate was the largest supplier to the PSCo Gas
Companies in 1995. During 1993, the PSCo Gas Companies entered into two non-
regulated supply agreements, as allowed under FERC Order 636. Under the
agreement with Interstate, which covers the period from October 1, 1993 through
September 30, 1996, the annual quantities to be purchased declined from 44 Bcf
in the first year to 33 Bcf in the second year and are declining to 22 Bcf in
the third year. Under the agreement with KN Gas Supply Services, Inc., which
covers the period from September 1, 1993 through August 31, 1996, the annual
quantities to be purchased are fixed at 4 Bcf. The Company is in the process of
evaluating its future gas contract requirements and related opportunities.
This continued purchase of gas quantities from Interstate and KN Gas Supply
Services, Inc. will eliminate any Gas Supply Realignment costs otherwise
applicable under FERC Order 636. See Note 9. Commitments and Contingencies -
Purchase Requirements in Item 8. Financial Statements And Supplementary Data for
information regarding the Company's financial commitments under these contracts.
YGSC
On June 27, 1995, the Company purchased all the outstanding common stock of
YGSC. YGSC, as a general partner, owns a 47.5% interest in Young Storage, a
partnership between YGSC, CIG Gas Storage Company (a 47.5% general partner), and
the City of Colorado Springs Department of Public Utilities (a 5% limited
partner). Young Storage owns and operates an underground gas storage facility
in northeastern Colorado. The Young Storage facility, when fully developed by
1998, will have a maximum working gas capacity of 5.3 Bcf and a maximum daily
deliverability of 200,000 Mcf. Effective February 1, 1996, the outstanding
common stock of YGSC was transferred to e prime.
On September 13, 1993, the Company signed a thirty year contract with Young
Storage for natural gas storage services with a maximum available capacity of
4.77 Bcf and a maximum daily injection/withdrawal capacity of 180,000 Mcf per
day. The remainder of the storage capacity has been contracted by the City of
Colorado Springs. Young Storage is subject to FERC regulation.
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WGI
WGI is engaged in transporting gas to Cheyenne, Wyoming via a thirteen mile
connecting pipeline between Chalk Bluffs, Colorado and Cheyenne, Wyoming. Gas
transportation volumes were approximately 3.1 Bcf for 1995.
WGT
WGT held a one-third interest in the TransColorado Project, a partnership
for developing a pipeline to transport natural gas out of western Colorado and
the Rocky Mountain Regions into major western and midwestern markets. On
September 25, 1995, WGT sold its interest in the TransColorado Project to El
Paso Natural Gas Co at book value. WGT was dissolved effective December 1, 1995.
(See Note 4. Divestiture of Nonutility Assets - WestGas TransColorado, Inc. in
Item 8. Financial Statements And Supplementary Data.)
FUELCO
Fuelco has been engaged principally in the exploration for, and the
development and production of, natural gas and crude oil. Fuelco also marketed
and brokered natural gas to re-marketers and directly to end users. As part of
the Company's strategy to focus its efforts on its core electric and gas
businesses, during 1994 and 1993, the Company disposed of certain assets related
to the Company's investment in Fuelco and its wholly-owned subsidiary,
Synhytech. The Company is pursuing the divestiture of Fuelco's remaining
assets, which is expected to be completed in 1996 (see Note 4. Divestiture of
Nonutility Assets - Fuel Resources Development Co. in Item 8. Financial
Statements And Supplementary Data).
E PRIME
e prime is engaged or intends to engage in energy related activities and
the provision of consumer services which include, but are not limited to,
electric and gas brokering and marketing, energy consulting and project
development services and information processing and other technology based
services. e prime has filed an application with the FERC requesting all
requisite approvals and waivers to act as a power marketer.
REGULATION AND RATES
The Company is subject to the jurisdiction of the CPUC with respect to its
facilities, rates, accounts, services and issuance of securities. Cheyenne is
subject to the jurisdiction of the WPSC. The Company is subject to the
jurisdiction of the DOE through the FERC with respect to its wholesale electric
operations and accounting practices and policies. The Company is also subject
to the jurisdiction of the NRC with respect to the decommissioning of Fort St.
Vrain. Although the Company is a "holding company" under the PUHCA, it has
filed an annual exemption statement pursuant to Rule 2 of the SEC under that Act
and is, therefore, currently exempt from all of the provisions of such Act and
the Rules thereunder, except Section 9(a)(2) thereof. Such exemption is subject
to termination under Rule 6 of PUHCA. On January 30, 1996, as part of the
merger of the Company with SPS, NCE filed its application with the SEC to be a
registered public utility holding company, which would subject the Company and
its subsidiaries to regulation under PUHCA. The Company holds a FERC
certificate which allows it to transport natural gas in interstate commerce
pursuant to the provisions of the Natural Gas Act, the Natural Gas Policy Act of
1978 and FERC Order Nos. 436 and 500 without the Company becoming subject to
full FERC jurisdiction. WGI holds a FERC certificate which allows it to
transport natural gas in interstate commerce pursuant to the provisions of the
Natural Gas Act. WGI is subject to FERC jurisdiction.
1995 Merger Rate Filings
In connection with the merger with SPS, on November 9, 1995, the Company
filed comprehensive proposals with the CPUC, the FERC and the WPSC to obtain
approval from such regulatory agencies. The CPUC proposal included, among other
things, implementing an electric rate moratorium for five years, allowing for
the sharing of
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earnings in excess of 12.5% return on equity (determined by utilizing the
combined operations of the electric, gas and steam departments) on a 50/50 basis
between shareholders and customers, retaining the Company's ECA, GCA, and QFCCA
mechanisms, implementing quality of service measures and recovering costs
incurred in connection with the merger (see Note 3. Merger in Item 8 Financial
Statements And Supplementary Data). The quality of service measures included in
the CPUC proposal relate to the following four areas: 1) customer complaints, 2)
phone response time to customer inquiries, 3) response time to customer-
initiated gas odor complaints, and 4) electric service availability. In the
event that the Company does not meet the proposed quality of service measures,
earnings may be reduced by up to $4 million on an annual basis. Additionally,
the proposed sharing of earnings in excess of 12.5% return on equity would
supersede the QFCCA earnings test discussed below. The CPUC has scheduled
hearings on this matter for July and August 1996. The FERC and WPSC have not yet
scheduled any proceedings related to the proposed merger. However, during
January 1996, the FERC issued a Notice of Inquiry concerning its merger policy
under the Federal Power Act to determine whether the criteria and policies for
evaluating mergers need to be revised.
STATE REGULATION
CPUC
The CPUC consists of three full-time members appointed by the Governor and
approved by the Colorado Senate. Only two members may be from the same
political party.
Electric and Gas Adjustment Clauses
The Company's ECA was revised and a new QFCCA was implemented on December
1, 1993, along with the base rate changes resulting from the 1993 rate case (see
"1993 Rate Case"). Under the revised ECA, fuel used for generation and
purchased energy costs from utilities, QFs and IPPFs (excluding all purchased
capacity costs) to serve retail customers, are recoverable. Purchased capacity
costs are recovered as a component of base rates, except as described below.
The ECA rate is revised annually on October 1 and whenever total costs
recoverable through the ECA change by $0.001 per kilowatt hour or more.
Recovered energy costs are compared with actual costs on a monthly basis and
differences, including interest, are deferred. Under the QFCCA, all purchased
capacity costs from new QF projects, not otherwise reflected in base rates, are
recoverable similar to the ECA.
With respect to the QFCCA, the CPUC issued a final decision in January 1996
which required the following: 1) an earnings test be implemented with a 50/50
sharing between the ratepayers and shareholders of earnings in excess of 11%,
the Company's authorized rate of return on regulated common equity; 2) the
calculation will be based on the Company's electric department earnings only;
and 3) implementation will be on a prospective basis effective October 1, 1996,
utilizing a test period for the prior twelve months ended June 30, 1996, unless
superseded by a CPUC decision prior to the effective date. The Company intends
to address this issue in connection with the merger rate filing discussed above.
The Company, through its GCA, is allowed to recover the difference between
its actual costs of purchased gas and the amount of these costs recovered under
its base rates. The GCA rate is revised annually on October 1 and as needed, to
coincide with supplier rate changes. Purchased gas costs and revenues received
to recover such gas costs are compared on a monthly basis and differences,
including interest, are deferred.
The Company and Cheyenne are required to file applications with their
respective state regulatory commissions for approval of adjustment mechanisms in
advance of the proposed effective date. The applications must be acted upon
before becoming effective. In addition, the CPUC holds hearings to review the
Company's adjustments made during preceding time periods, and the Company is
required to file quarterly reports on matters relevant to the adjustments.
During 1994, the CPUC initiated proceedings for reviewing the justness and
reasonableness of GCA and ECA mechanisms used by gas and electric utilities
within its jurisdiction. On April 14, 1995, the CPUC issued a final order which
retained the GCA with no modifications and closed its investigation of the GCA
mechanism.
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With respect to the ECA, in compliance with an order issued by the CPUC in March
1995, the Company completed a filing in September 1995 requesting the CPUC to
open a docket to investigate its ECA. The CPUC opened a docket to review whether
the ECA should be maintained in its present form, altered or eliminated. On
January 8, 1996, the CPUC combined this docket with the merger docket discussed
above.
Incentive Regulation and Demand Side Management
The Company, in a collaborative process with public interest groups,
consumers and industry, has developed DSM programs (programs designed to reduce
peak electricity demand, shift on-peak demand to off-peak hours and provide for
more efficient operation of the electric generation system), including incentive
and cost recovery mechanisms. The CPUC approved the programs in 1993 along with
a schedule to be implemented over a three-year period. Effective July 1, 1993,
the Company implemented a DSMCA clause which permits it to recover deferred DSM
costs over seven years while non-labor incremental expenses, carrying costs
associated with deferred DSM costs and certain incentives associated with the
approved DSM programs are recovered on an annual basis.
The CPUC subsequently opened a separate docket to investigate issues
involving alternative annual revenue reconciliation mechanisms and incentive
mechanisms related to the Company's DSM programs. The investigation was
completed in 1995 and a final order issued. The major provisions of the final
order, effective December 27, 1995, included: 1) not to proceed with any of the
proposed mechanisms; 2) to reduce the recovery period for certain costs of the
Company's DSM programs from seven to five years for expenditures made on or
after January 1, 1995; 3) not to establish DSM targets for 1997 and 1998; 4) not
to adopt a penalty for failure to achieve DSM targets; and 5) to approve the
Company's proposal to forego incentive payments for DSM programs.
Under a separate CPUC order issued in December 1992, the Company has
implemented a Low-Income Energy Assistance Program. The costs of this energy
conservation and weatherization program for low-income customers are recoverable
through the DSMCA.
In addition, on June 8, 1994, the CPUC approved the recovery of certain
"energy efficiency credits" from retail jurisdiction customers through the DSMCA
(see Note 9. Commitments and Contingencies - Regulatory Matters in Item 8.
Financial Statements And Supplementary Data).
1993 Rate Case
In November 1993, the CPUC issued its final written decision regarding the
Company's 1993 rate case, authorizing the Company to earn a return on regulated
common equity of 11% and an annual rate of return on regulated rate base of
9.4%, lowering the Company's annual base rate revenue requirement by
approximately $5.2 million (a $13.1 million electric revenue decrease partially
offset by a $7.1 million gas revenue increase and a $0.8 million steam revenue
increase). The new rates became effective December 1, 1993.
The Phase II proceedings of the 1993 Rate Case addressed cost allocation
issues and specific rate changes for the various customer classes based on the
results of the Phase I decision. The CPUC approved a settlement agreement
related to gas rates and the new gas rates were implemented effective October 1,
1995. A final CPUC decision on rehearing, reargument and reconsideration for
the Phase II proceedings related to electric rates was issued in February 1996
with new rates expected to be effective in early 1996.
IRP - Electric
The Company filed its first IRP pursuant to the Electric Integrated
Resource Planning Rules of the CPUC in October 1993. It was subsequently
approved in 1994. The Company's IRP described the mix of resources to be
utilized and/or acquired by the Company for the following three years, including
the repowering of Fort St. Vrain as a gas fired combined cycle steam plant (see
Note 2. Fort St. Vrain in Item 8. Financial Statements And Supplementary Data).
In addition, certain DSM measures were identified and programs implemented which
are intended to reduce the amount of additional capacity required to be supplied
by the Company in the
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future (see "Electric Operations"). The Company's next IRP is scheduled to be
filed with the CPUC in October 1996.
WPSC
In June 1993, Cheyenne filed gas and electric IRPs with the WPSC pursuant
to a settlement agreement. The WPSC has not formally acted on these filings.
The WPSC has approved adjustment mechanisms for Cheyenne which are similar
to the Company's ECA and GCA.
FEDERAL ENERGY REGULATORY COMMISSION
On March 29, 1995, the FERC issued a NOPR on Open Access Non-Discriminatory
Transmission Services by Public Utilities and Transmitting Utilities and a
supplemental NOPR on Recovery of Stranded Costs.
The rules proposed in the NOPR are intended to facilitate competition among
electric generators for sales to the bulk power supply market. If adopted, the
NOPR on open access transmission would require public utilities under the
Federal Power Act to provide open access to their transmission systems and would
establish guidelines for their doing so. A final rule would define the terms
under which independent power producers, neighboring utilities, and others could
gain access to a utility's transmission grid to deliver power to wholesale
customers, such as municipal distribution systems, rural electric cooperatives,
or other utilities. Under the NOPR, each public utility would also be required
to establish separate rates for its transmission and generation services for new
wholesale service, and to place transmission services, including ancillary
services, under the same tariffs that would be applicable to third-party users
for all of its new wholesale sales and purchases of energy.
The supplemental NOPR on stranded costs provides a basis for recovery by
regulated public utilities of legitimate and verifiable stranded costs
associated with existing wholesale requirements customers and retail customers
who become unbundled wholesale transmission customers of the utility. The FERC
would provide public utilities a mechanism for recovery of stranded costs that
result from municipalization, former retail customers becoming wholesale
customers, or the loss of a wholesale customer. The FERC will consider allowing
recovery of stranded investment costs associated with retail wheeling only if a
state regulatory commission lacks the authority to consider that issue.
On June 26, 1995, the Company filed transmission tariffs with the FERC that
are intended to meet the comparability of service requirements as set out in the
NOPR ("PSCo Tariffs"). Concurrently with the comparability filing, e prime, a
non-regulated energy services subsidiary of the Company, filed a power marketer
application with the FERC. Subsequently on August 18, 1995, Cheyenne filed
transmission tariffs with the FERC that are intended to meet the NOPR
comparability of service requirements ("Cheyenne Tariffs"). In an order issued
on October 13, 1995, the FERC accepted the PSCo Tariffs and the Cheyenne
Tariffs, subject to modification based on the outcome of the NOPR proceeding,
effective as of August 25, 1995. It is anticipated a final rule, which could be
modified from the current proposal, could take effect in 1996. The FERC also
set the rates in the PSCo Tariffs and Cheyenne Tariffs for hearing. On January
24, 1996, e prime filed with the FERC an amended power marketer application. On
January 26, 1996, PSCo and Cheyenne filed revised tariffs containing terms and
conditions conforming to the FERC's pro forma tariffs as set out in the NOPR.
The Company filed a rate case with the FERC on December 29, 1995,
requesting a slight overall rate increase (less than 1%) from its wholesale
electric customers. This filing, among other things, requested approval for
recovery of OPEB costs under SFAS 106, postemployment benefit costs under SFAS
112 and new depreciation rates based on the Company's most recent depreciation
study.
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ENVIRONMENTAL MATTERS
See Note 9. Commitments and Contingencies - Environmental Issues in Item
8. Financial Statements And Supplementary Data for a discussion of the impact
on the Company of environmental site clean-up, the Clean Air Act Amendments of
1990 and other environmental matters not discussed below.
At December 31, 1995, the estimated 1996, 1997 and 1998 expenditures for
environmental air and water emission control facilities were $8.8 million, $23.1
million and $23.4 million, respectively. These figures include estimated
expenditures to install SO2 and NOx reduction equipment for the years 1996, 1997
and 1998 of $2.4 million, $5.1 million and $12.8 million, respectively.
The Metro Denver Brown Cloud II Study, designed to investigate the
formation of secondary particulates in the Denver metropolitan area, began in
July 1990 and the results were released in December 1993. The study was
inconclusive and did not offer any policy recommendations. As a result, the
study will not impact the Company's current programs to reduce SO2 and NOx
emissions. However, the Metro area brown cloud continues to be of concern and
the Company is participating in the Metro Area Brown Cloud III Study.
The Company continues to research and implement various SO2 and NOx
emissions reduction projects, including two CCT3 projects. The CCT3 projects are
part of a larger DOE Clean Coal Program, which co-funds developing technologies
aimed at more efficient and environmentally acceptable methods of burning coal.
Research and implementation continues on the two CCT3 projects, which involve
Arapahoe Unit 4 and Cherokee Unit 3. Testing at Cherokee Unit 3 was completed in
1995 and testing at the Arapahoe Unit 4 has been extended and is expected to be
completed in July 1996.
The Mount Zirkel Wilderness Area Reasonable Attribution Study, which is
designed to ascertain the contribution of various emission sources to visibility
impairment in the Mount Zirkel Wilderness Area began in 1994. The Company is a
participant in the Hayden and Craig generating stations, in the nearby Yampa
Valley. Additionally, as a result of certain litigation among the joint owners
of the Hayden facility and a conservation organization (see Note 9. Commitments
and Contingencies - Environmental Issues in Item 8. Financial Statements And
Supplementary Data) a settlement is expected to be achieved in the near-term
which the Company believes will result in a requirement to install certain
additional pollution control equipment at the plant.
Pursuant to the requirements of the Federal Clean Water Act, as amended,
and the Colorado Water Quality Control Act and regulations issued thereunder,
the Company receives National Pollution Discharge Elimination System permits to
discharge effluents into various streams and waters of the State of Colorado for
each of its generating stations. These permits, which have a five-year life,
are issued by the CWQCD, but are subject to review by the EPA. The Company
believes it is presently in compliance with such discharge permits.
Renewed wastewater discharge permits have been issued for: 1) Fort St.
Vrain, effective May 1, 1993; 2) Cherokee, effective July 1, 1993; 3) Zuni,
effective August 1, 1993; 4) Hayden, effective August 1, 1994; 5) Valmont,
effective October 1, 1994; 6) Arapahoe, effective December 1, 1994 and 7) Cameo,
effective December 1, 1994. Permit renewal applications were submitted for the
Comanche generating station and Leyden Gas Storage prior to the expiration of
their existing permits. All discharge permits that are not renewed by the CWQCD
prior to their expiration date automatically receive an administrative extension
pending the issuance of a final permit.
The Company has completed the preparation of applications for Operating
Permits as required by Title IV of the 1990 Clean Air Act Amendments. Permits
were submitted to the state health department to meet 1995 submittal deadlines.
Environmental regulations at the Federal, state and local levels, including
the Clean Air Act Amendments of 1990, some of which are discussed in Note 8.
Commitments and Contingencies - Environmental Issues in Item 8. Financial
Statements And Supplementary Data, are expected to have a continuing impact on
the Company's operations. The Company continues to strive to achieve compliance
with all environmental
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regulations currently applicable to its operations. However, it is not possible
at this time to determine when or to what extent additional facilities or
modifications of existing or planned facilities will be required as a result of
changes to environmental regulations, interpretations or enforcement policies
or, generally, what effect future laws or regulations may have upon the
Company's operations.
COMPETITION
INDUSTRY OUTLOOK
Unprecedented change has begun to occur in the electric utility industry
nationwide, furthering the development of a competitive environment. In
general, the economics of the electric generation business have fundamentally
changed with open transmission access and the increased availability of electric
supply alternatives. Such alternatives will ultimately serve to lower customer
prices, particularly in areas where only higher cost energy is currently
provided. Customer demands for lower prices and supplier choices, coupled with
the availability of alternative supplies (IPPFs, QFs, EWGs and power marketers),
have created significant pressure for open access to the utility transmission
grid and the creation of a commodity market for bulk electric supply. The EPAct
directly addressed this issue by giving the FERC the authority to require
utilities to provide non-discriminatory open access to the transmission grid
for purposes of providing wholesale customers with direct access. In response
to such authority, in 1995, the FERC issued a NOPR on Open Access Non-
Discriminatory Transmission Services by Public Utilities and a supplemental NOPR
on the Recovery of Stranded Costs (together, the "FERC Mega NOPR").
Furthermore, an increasing number of states have recently begun to evaluate or
pursue regulatory reform in an effort to proactively respond to this changing
business environment and address the issue of retail wheeling.
The presence of competition and the associated pressure on prices may
ultimately lead to the unbundling of products and services similar to what has
evolved in the natural gas industry. The concept of a vertically integrated
utility, coupled with current regulatory practices, remain increasingly
incongruent with the economic forces shaping the industry. Today's market view
of the future envisions an unbundled electric utility industry consisting of at
least four major business segments: energy supply, transmission, distribution
and energy services- each having a different driving force.
The SEC has also responded to increasing competition in the utility
industry, changes in state and federal utility regulation, and changes in
federal securities laws and securities markets. In June 1995, the SEC issued
its report which focused on both legislative and administrative options for the
reform of public utility holding company regulation. The report presented three
possible recommendations for legislative reform of PUHCA: 1) conditional repeal
of PUHCA, 2) unconditional repeal of PUHCA, and 3) PUHCA remains unmodified, but
grants the SEC broader exemptive authority under PUHCA. Any changes in
regulation will be determined by Congress.
Further discussion can be found in Item 7. Management's Discussion and
Analysis Of Financial Condition and Results Of Operations.
STATE REGULATORY ENVIRONMENT
Colorado law permits the CPUC to authorize rates negotiated with individual
electric and gas customers which have threatened to discontinue using the
services of the Company, so long as the CPUC finds that such authorization: 1)
in the case of electric rates, will not affect adversely the Company's remaining
customers and 2) in the case of gas rates, will not affect the Company's
remaining customers as adversely as would the alternative. In response to the
increasingly competitive operating environment for utilities, the regulatory
climate also is changing. The Company continues to participate in regulatory
proceedings which could change or impact current regulation. The Company
believes it will continue to be subject to rate regulation that will allow for
the recovery of all of its deferred costs (see Note 1. Summary of Significant
Accounting Policies - Business and Regulation - Regulatory Assets and
Liabilities and Note 9. Commitments and Contingencies - Regulatory Matters in
Item 8. Financial Statements And Supplementary Data).
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ELECTRIC
The wholesale electric business faces increasing competition in the supply
of bulk power due to provisions of the EPAct and Federal and state initiatives
with respect to providing open access to utility transmission systems. Since
1992, the Company has had a FERC-approved transmission tariff, which provides
for open access, with certain limitations. In response to the FERC Mega NOPR,
the Company and Cheyenne have filed tariffs containing terms and conditions
conforming to the FERC's pro forma tariffs as set out in the FERC Mega NOPR.
The Company does not anticipate that these provisions will have a material
impact on its operations in the near-term. For 1995, the Company's wholesale
revenues totaled approximately 9% of total electric revenues. A substantial
portion of these revenues related to firm sales contracts, which are expected to
continue at current levels for a minimum of 11 years.
Today, the retail electric business faces increasing competition from
industrial and large commercial customers who have the ability to own or operate
facilities to generate their own electric energy requirements. In addition,
customers may have the option of substituting fuels, such as natural gas for
heating, cooling and manufacturing purposes rather than electric energy, or of
relocating their facilities to a lower cost environment. While the Company
faces these challenges, it believes its rates are competitive with currently
available alternatives. The Company is taking actions to lower operating costs
and is working with its customers to analyze the feasibility of various options,
including energy efficiency, load management and co-generation in order to
better position the Company to more effectively operate in a competitive
environment.
NATURAL GAS
Historically, gas utilities have competed with suppliers of electricity and
fuel oil, as well as, to a lesser extent, propane, for sales of gas to customers
for heating and/or cooling purposes. In the 1980s, industrial and large
commercial customers began to "by-pass" the local gas utility through the
construction of interconnections directly with, and the purchase of gas directly
from, interstate pipelines, thereby avoiding the additional charges added by the
local gas utility. In addition, industrial and commercial customers sought to
purchase less expensive supplies of natural gas directly from producers,
marketers and brokers. The Company has been actively involved for several years
in providing transportation services for those industrial and large commercial
customers who chose to purchase gas directly from suppliers. In addition, the
Company has provided flexible transportation rates for several years. The per-
unit fee charged for transportation services, while significantly less than the
per-unit fee charged for the sale of gas to a similar customer, provides an
operating margin approximately equivalent to the margin earned on gas sold.
Therefore, increases in such activities will not have as great an impact on gas
revenues as increases in deliveries from the sale of gas, but will have a
positive impact on operating margin.
FRANCHISES
The Company and its subsidiaries held nonexclusive franchises to provide
electric or gas service or both services in 119 incorporated cities and towns at
December 31, 1995. These franchises consist of 68 combined gas and electric
service franchises, 28 electric service franchises and 23 gas service
franchises. The Company is currently providing gas and electric service to one
previously franchised municipality while a new franchise is being negotiated.
In 1996, the Company expects to renegotiate two additional franchise agreements
which will be expiring. The Company's franchise with the City of Denver will
expire in 2006. The Company and its subsidiaries supply electric or gas service
or both services in about 114 unincorporated communities in which franchises are
not required.
EMPLOYEES AND UNION CONTRACTS
The number of employees of the Company and its subsidiaries decreased from
5,160 at December 31, 1994 to 4,776 at December 31, 1995. The primary reason for
the decrease was the outsourcing of approximately 370 positions as part of a
ten-year agreement with ISSC, a subsidiary of IBM, to manage most of the
Company's information technology systems and network infrastructure.
Approximately, 2,150 employees, or 45% of the
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Company's total workforce, are represented by the International Brotherhood of
Electrical Workers, Local 111. The number of employees covered by collective
bargaining agreements at December 31, 1995 approximated 2,340.
In early December 1995, the Company's contracts with the International
Brotherhood of Electrical Workers, Local 111 expired. Previously, an arbitrator
had rejected the Company's attempt to cancel the contract. The parties have been
unable to reach agreement through the negotiation process and, as a result, will
enter binding arbitration on March 20, 1996, as required under the provisions of
the contracts. Contract provisions will be determined as part of the binding
arbitration process including the length of the contract extension and wages.
In addition, the International Brotherhood of Electrical Workers, Local 111 has
filed a grievance relating to the employment of certain non-union personnel to
perform services for the Company, which matter is currently in arbitration.
RESEARCH AND DEVELOPMENT
The Company and its utility subsidiaries spent approximately $3.6 million
in 1995, $3.8 million in 1994 and $4.3 million in 1993 on research and
development. The major portion of those expenditures went to utility
associations which engage in research projects to benefit the electric and gas
industries as a whole. The balance of the expenditures went for smaller
internal and external projects dealing with such areas as pollution control and
alternative fuels research.
15
<PAGE>
CONSOLIDATED ELECTRIC OPERATING STATISTICS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Energy Generated, Received, & Sold (Thousands of Kwh):
Net Generated:
Steam, Fossil........................................... 16,053,928 15,949,980 15,470,247 14,972,688 13,164,941
Combustion Turbine...................................... 5,251 41,705 39,228 47,194 7,643
Pumped Storage.......................................... 68,400 126,721 118,593 79,609 68,988
Hydro................................................... 208,104 176,264 198,272 175,010 147,686
----------- ----------- ----------- ----------- -----------
Total Net Generation.................................. 16,335,683 16,294,670 15,826,340 15,274,501 13,389,258
Energy Used for Pumping................................. 109,632 201,744 185,850 126,266 111,008
----------- ----------- ----------- ----------- -----------
Total Net System Input................................ 16,226,051 16,092,926 15,640,490 15,148,235 13,278,250
Purchased Power and Net Interchange...................... 9,794,968 9,653,067 9,631,982 8,663,339 8,738,907
----------- ----------- ----------- ----------- -----------
Total System Input.................................... 26,021,019 25,745,993 25,272,472 23,811,574 22,017,157
Used by Company......................................... 64,885 66,348 60,396 64,125 71,506
Other(1)................................................ 1,526,358 1,670,591 2,001,832 1,932,333 1,493,291
----------- ----------- ----------- ----------- -----------
Total Energy Sold..................................... 24,429,776 24,009,054 23,210,244 21,815,116 20,452,360
=========== =========== =========== =========== ===========
Electric Sales (Thousands of Kwh)(2):
Residential............................................. 6,281,911 6,119,914 5,969,529 5,747,048 5,699,374
Commercial.............................................. 9,284,577 8,931,962 10,797,272 10,350,155 10,307,829
Industrial.............................................. 5,747,534 5,726,837 3,289,501 3,375,638 3,334,405
Public Authorities...................................... 188,363 187,939 186,397 187,500 184,315
Other Utilities(3)...................................... 2,927,391 3,042,402 2,967,545 2,154,775 926,437
----------- ----------- ----------- ----------- -----------
Total Energy Sold..................................... 24,429,776 24,009,054 23,210,244 21,815,116 20,452,360
=========== =========== =========== =========== ===========
Number of Customers at End of Period(2):
Residential............................................. 936,759 913,582 898,752 894,217 880,676
Commercial.............................................. 123,277 120,886 120,317 120,198 119,118
Industrial.............................................. 378 384 157 194 179
Public Authorities...................................... 79,154 77,842 76,476 647 660
Other Utilities(3)...................................... 17 18 20 34 29
----------- ----------- ----------- ----------- -----------
Total Customers...................................... 1,139,585 1,112,712 1,095,722 1,015,290 1,000,662
=========== =========== =========== =========== ===========
Electric Revenues (Thousands of Dollars)(2):
Residential............................................. $ 477,740 $ 453,614 $ 433,521 $ 413,655 $ 403,095
Commercial.............................................. 552,905 519,340 602,187 572,780 568,588
Industrial.............................................. 257,189 252,552 142,146 148,951 147,997
Public Authorities...................................... 23,029 21,950 20,828 20,221 19,256
Other Utilities (3)..................................... 114,514 120,238 116,937 80,290 35,480
Other Electric Revenues................................. 23,719 32,142 21,434 24,872 6,085
----------- ----------- ----------- ----------- -----------
Total Electric Revenues............................... $ 1,449,096 $ 1,399,836 $ 1,337,053 $ 1,260,769 $ 1,180,501
=========== =========== =========== =========== ===========
Average Annual Kwh Sales per Residential Customer........ 6,794 6,770 6,717 6,533 6,563
Average Annual Revenue per Residential Customer.......... $516.70 $501.82 $487.81 $470.26 $464.17
Average Residential Revenue per Kwh...................... 7.61c 7.41c 7.26c 7.20c 7.07c
Average Commercial Revenue per Kwh....................... 5.96c 5.81c 5.58c 5.53c 5.52c
Average Industrial Revenue per Kwh....................... 4.47c 4.41c 4.32c 4.41c 4.44c
Average Other Utilities Revenue per Kwh.................. 3.91c 3.95c 3.94c 3.73c 3.83c
</TABLE>
- -------------------------
(1) Primarily includes net distribution and transmission line losses.
(2) Comparison of energy sales, customers and electric revenues between
periods is impacted by: 1) a change in criteria for counting customers
resulting from the implementation of a new customer information system
during 1993, and 2) effective January 1, 1994, a reclassification to
include large commercial customers (>1,000 Kw demand) within the industrial
category, to be consistent with recommended utility industry guidelines.
(3) Includes sales to four additional wholesale customers, resulting from the
April 1992 Colorado-Ute asset acquisition.
16
<PAGE>
CONSOLIDATED GAS OPERATING STATISTICS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Natural Gas Purchased and Sold (Thousands of Mcf)(1):
Purchased from Interstate.............................. 45,248 53,337 64,494 69,309 68,398
Purchased from Others.................................. 118,431 104,102 103,609 92,302 96,358
Purchased for e prime Marketing........................ 277 - - - -
-------- -------- -------- -------- --------
Total Purchased..................................... 163,956 157,439 168,103 161,611 164,756
Company Use............................................ 1,555 2,817 2,750 3,041 2,262
Other(2)............................................... 6,616 4,515 (2,111) 7,070 2,628
-------- -------- -------- -------- --------
Total Gas Sold....................................... 155,785 150,107 167,464 151,500 159,866
======== ======== ======== ======== ========
Gas Deliveries (Thousands of Mcf)(1):
Residential............................................ 96,126 92,036 98,350 87,560 91,807
Commercial............................................. 59,250 57,366 62,193 57,321 61,266
Industrial............................................. 48 118 1,097 1,772 2,468
Public Authorities..................................... - - 88 141 134
Other Utilities........................................ 361 587 5,736 4,706 4,191
-------- -------- -------- -------- --------
Total Gas Sold...................................... 155,785 150,107 167,464 151,500 159,866
Transported Gas........................................ 88,543 78,194 71,922 60,404 54,214
Gathered and Processed Gas(3).......................... 1,627 29,889 42,010 33,052 18,622
-------- -------- -------- -------- --------
Total Deliveries..................................... 245,955 258,190 281,396 244,956 232,702
======== ======== ======== ======== ========
Number of Customers at End of Period:
Residential............................................ 872,777 845,464 820,521 808,722 792,646
Commercial............................................. 89,033 87,077 86,202 85,954 85,317
Industrial............................................. 3 26 25 237 331
Public Authorities..................................... - - - 1 1
Other Utilities........................................ - 8 8 8 9
-------- -------- -------- -------- --------
Total................................................ 961,813 932,575 906,756 894,922 878,304
Transported Gas and Other.............................. 952 786 619 416 275
-------- -------- -------- -------- --------
Total Customers...................................... 962,765 933,361 907,375 895,338 878,579
======== ======== ======== ======== ========
Gas Revenues (Thousands of Dollars):
Residential............................................ $383,719 $375,406 $366,445 $329,406 $343,692
Commercial............................................. 200,490 202,873 201,693 185,851 198,160
Industrial............................................. 223 438 2,887 5,213 7,765
Public Authorities..................................... - - 240 302 371
Other Utilities........................................ 4,961 7,319 13,966 10,099 9,198
Transported Gas........................................ 23,769 23,495 23,176 20,638 18,966
Gathered and Processed Gas............................. 443 8,335 10,575 8,023 5,465
Other Gas Revenues..................................... 10,980 7,056 9,342 9,354 3,992
-------- -------- -------- -------- --------
Total Gas Revenues.................................. $624,585 $624,922 $628,324 $568,886 $587,609
======== ======== ======== ======== ========
Average Annual Mcf Sales per Residential Customer...... 111.87 110.59 120.85 109.5 116.8
Average Annual Revenue per Residential Customer......... $446.58 $451.09 $450.29 $411.94 $437.40
Average Residential Revenue per Mcf..................... $3.992 $4.079 $3.726 $3.762 $3.744
Average Commercial Revenue per Mcf...................... $3.384 $3.536 $3.243 $3.242 $3.234
Average Transport Gas Revenue per Mcf................... $0.268 $0.300 $0.322 $0.342 $0.350
</TABLE>
- -------------------------
(1) Volumes are reported at local pressure base.
(2) Primarily includes distribution and transmission line losses and net
changes to gas in storage.
(3) In August 1994, the Company sold its investment in WGG which resulted in
the decline in gathered and processed gas deliveries.
17
<PAGE>
MAP OF
ELECTRIC TRANSMISSION
INTERCONNECTED SYSTEM
APPEARS HERE
18
<PAGE>
ITEM 2. PROPERTIES
ELECTRIC PROPERTY
The electric generating stations of the Company and its subsidiaries
expected to be available at the time of the anticipated 1996 net firm system
peak demand during the summer season are as follows:
<TABLE>
<CAPTION>
Net Dependable
Capacity
Installed (Mw)
Gross at Time of Anticipated Major
Name of Station Capacity 1996 Net Firm System Fuel
and Location (Mw) Peak Demand* Source
------------------------ --------------- ----------------------- -------
<S> <C> <C> <C>
Steam:
Arapahoe-Denver........................... 262.00 246.00 Coal
Cameo-near Grand Junction................. 77.00 72.70 Coal
Cherokee-Denver........................... 784.00 723.00 Coal
Comanche-near Pueblo...................... 725.00 660.00 Coal
Craig-near Craig.......................... 86.90 (a) 83.20 Coal
Fort St. Vrain - near Platteville......... 130.00 (b) 126.00 Gas
Hayden-near Hayden........................ 259.47 (c) 236.90 Coal
Pawnee-near Brush......................... 530.00 495.00 Coal
Valmont-near Boulder (Unit 5)............. 188.00 178.00 Coal
Zuni-Denver............................... 115.00 107.00 Gas/Oil
-------- --------
Total................................... 3,157.37 2,927.80
Combustion turbines (6 units-various locations).. 209.00 171.00 Gas
Hydro (14 units-various locations) (d)........... 53.35 36.55 (e) Hydro
Cabin Creek Pumped Storage-near Georgetown....... 324.00 (f) 162.00 Hydro
Diesel generators (7 units-various locations).... 15.50 15.50 Oil
-------- --------
Total................................... 3,759.22 3,312.85
======== ========
</TABLE>
________________
* A measure of the unit capability planned to be available at the time of the
system peak load net of seasonal reductions in unit capability due to weather,
stream flow, fuel availability and station housepower, including requirements
for air and water quality control equipment.
(a) The gross maximum capability of Craig Units No. 1 and No. 2 is 894 Mw, of
which the Company has a 9.72% undivided ownership interest.
(b) It is anticipated that Phase 1A will come on-line in May 1996.
(c) The gross maximum capability of Hayden Units No. 1 and No. 2 is 202.01 Mw
and 285.96 Mw, respectively, of which the Company has a 75.5% and 37.4%
undivided ownership interest, respectively.
(d) Includes one station (two units) not owned by the Company but operated
under contract.
(e) Seasonal Hydro Plant net dependable capabilities are based upon average
water conditions and limitations for each particular season. The
individual plant seasonal capabilities are sometimes limited by less than
design water flow.
(f) Capability at maximum load.
NUCLEAR PROPERTY
Fort St. Vrain, near Platteville, the Company's only previous nuclear
generating station, ceased operations on August 29, 1989 (see Note 2. Fort St.
Vrain in Item 8. Financial Statements And Supplementary Data) and is in the
process of being repowered as a gas fired electric generating station.
TRANSMISSION AND DISTRIBUTION PROPERTY
On December 31, 1995, the Company's transmission system consisted of
approximately 112 circuit miles of 345 Kv overhead lines; 1,864 circuit miles of
230 Kv overhead lines; 15 circuit miles of 230 Kv underground lines; 65 circuit
miles of 138 Kv overhead lines; 996 circuit miles of 115 Kv overhead lines; 20
circuit miles of 115 Kv underground lines; 344 circuit miles of 69 Kv overhead
lines; 143 circuit miles of 44 Kv overhead lines; and 1 circuit mile of 44 Kv
underground lines. The Company jointly owns with another utility approximately
342
19
<PAGE>
circuit miles of 345 Kv overhead lines and 360 miles of 230 Kv overhead
lines, of which the Company's share is 112 miles and 147 miles, respectively,
which shares are included in the amounts listed above.
The Company's transmission facilities are located wholly within Colorado.
The map on page 18 illustrates the Company's transmission interconnected system.
The system is interconnected with the systems of the following utilities with
which the Company has major firm purchase power contracts; capacity and energy
are provided primarily by generating sources in the locations indicated:
<TABLE>
<CAPTION>
Utility Location
- ------- --------
<S> <C>
Basin Electric Power Cooperative.......... Southeast Wyoming
PacifiCorp................................ West & Northwest U.S.
Northwest Colorado
Platte River Power Authority.............. Northcentral Colorado
Tri-State................................. Southeast Wyoming and
Northwest Colorado
</TABLE>
The Company has wheeling agreements with the above, and with other
utilities and public power agencies, which are utilized to provide capacity and
energy to the Company's system from time to time.
The Company is a member of the WSCC, an interstate network of transmission
facilities which are owned by public entities and investor-owned utilities.
WSCC is the regional reliability coordinating organization for member electric
power systems in the western United States.
At December 31, 1995, the distribution systems consisted primarily of
approximately 12,927 miles of overhead line, 1,068 miles of which are located on
poles owned by other utilities under joint use agreements. The Company also
owned approximately 7,629 cable miles of underground distribution system
(excluding street lighting) located principally in the Denver metropolitan area.
The Company owned 218 substations (four of which are jointly owned) having an
aggregate transformer capacity of 18,619,300 Kva, of which 4,145,827 Kva is
step-up transformer capacity at generating stations.
GAS PROPERTY
The gas property of the Company at December 31, 1995 consisted chiefly of
approximately 14,977 miles of distribution mains ranging in size from 0.50 to 30
inches and related equipment. The Denver distribution system consisted of 8,522
miles of mains. Pressures in the low pressure system are varied to meet load
requirements and individual house regulators are installed on each customer's
premises to provide uniform flow of gas to appliances.
OTHER PROPERTY
The Company's steam heating property at December 31, 1995 consisted of 10.5
miles of transmission, distribution and service lines in the central business
district of Denver, including a steam transmission line connecting the steam
heating system with Zuni. Steam is supplied from boilers installed at the
Company's Denver Steam Plant which has a capability of 295,000 pounds of steam
per hour under sustained load and an additional 300,000 pounds of steam per hour
is available from Zuni on a peak demand basis. The Company also owns service
and office facilities in Denver and other communities strategically located
throughout its service territory.
PROPERTY OF SUBSIDIARIES
The book value of the properties of the consolidated subsidiaries of the
Company aggregates approximately 3% of the total book value of the properties of
the Company and such subsidiaries combined. Such properties consist largely of
electric and gas properties similar in character to the properties of the
Company, except for the exploration, development and production properties still
held by Fuelco (see Note 4. Divestiture of
20
<PAGE>
Nonutility Assets - Fuel Resources Development Co. in Item 8. Financial
Statements And Supplementary Data). Unregulated subsidiary property is
approximately 2% of the total book value of the properties of the Company and
consolidated subsidiaries combined. 1480 Welton, Inc. owns two buildings that
are used by the Company.
CHARACTER OF OWNERSHIP
The steam electric generating stations, the majority of major electric
substations and the major gas regulator stations owned by the Company and its
subsidiaries are on land owned in fee. Approximately half of the compressor
stations and a limited number of town border and meter stations are also on land
owned in fee. The remaining major electric substations and compressor stations
and the majority of gas regulator stations and town border and meter stations
are wholly or partially on land leased from others or on or along public
highways or on streets or public places within incorporated towns and cities.
The Company's Cabin Creek Pumped Storage Hydroelectric Generating Station, its
Shoshone Hydroelectric Generating Station and a portion of the related intake
tunnel are located on public lands of the United States. As to substantially
all property on or across public lands of the United States, the Company or its
subsidiaries hold licenses or permits issued by appropriate Federal agencies or
departments. The Leyden gas storage facility is located largely on leased
property under leases expiring December 31, 2040. The Company and its utility
subsidiaries have the power of eminent domain pursuant to Colorado law to
acquire property for their electric and gas facilities. The electric and gas
transmission and distribution facilities are for the most part located over or
under streets, public highways or other public places and on public lands under
franchises or other rights, and on land owned by the Company or others pursuant
to easements obtained from the record holders of title. The water rights of the
Company and its subsidiaries are owned subject to divestment to the extent of
any abandonment thereof.
Substantially all of the utility plant and other physical property owned by
the Company and its utility subsidiaries is subject to the liens of the
respective indentures securing the mortgage bonds of the Company and its utility
subsidiaries.
ITEM 3. LEGAL PROCEEDINGS
See Note 2. Fort St. Vrain and Note 9. Commitments and Contingencies in
Item 8. Financial Statements And Supplementary Data.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On January 31, 1996, the Company held a Special Meeting of Shareholders at
which shareholders were asked to approve the Merger Agreement pursuant to which
the holders of Company common stock and holders of SPS common stock will become
holders of the common stock of NCE upon the completion of the merger. The merger
was approved by the shareholders. Of the shares voted, 50,934,837, 1,366,283,
and 824,460 votes were cast for, against, and abstained, respectively (see Note
3. Merger in Item 8. Financial Statements And Supplementary Data).
Approximately 72% of the Company's outstanding shares of common and preferred
stock were voted in favor of the merger. An affirmative vote of two-thirds of
the outstanding shares was required for approval.
21
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is listed on the New York, Chicago and Pacific
Stock Exchanges. The following table sets forth for the periods indicated the
dividends declared per share of common stock and the high and low sale prices of
the common stock on the consolidated tape as reported by The Wall Street
Journal.
<TABLE>
<CAPTION>
Dividends Price Range
Year and Quarter Declared High Low
- ------------------- --------- ----------- -------
<S> <C> <C> <C>
1995
First Quarter... $.51 $31 1/2 $ 29
Second Quarter.. .51 32 7/8 29 1/4
Third Quarter... .51 34 1/2 30 5/8
Fourth Quarter.. .51 35 7/8 33 3/8
----
$2.04
1994
First Quarter... $ .50 $32 1/8 $28 1/2
Second Quarter.. .50 29 3/4 25 3/8
Third Quarter... .50 27 7/8 24 3/4
Fourth Quarter.. .50 30 1/8 25 7/8
----
$2.00
</TABLE>
At December 31, 1995, the book value of the common stock was $21.21 per
share. At February 20, 1996, there were 60,704 holders of record of the
Company's common stock.
The dividend level is dependent upon the Company's results of operations,
financial position and other factors and is evaluated quarterly by the Board of
Directors. The Company is subject to numerous uncertainties, including the
approval by various regulatory agencies of the merger between the Company, SPS
and NCE. See Item 7. Management's Discussion And Analysis Of Financial
Condition And Results Of Operations.
On February 26, 1991, the Company's Board of Directors declared a dividend
of one common share purchase right ("right") on each outstanding share of the
Company's common stock. All future common shares issued will contain this
right. Each right stipulates an initial purchase price of $55 per share and
also prescribes a means whereby the resulting effect is such that, under the
circumstances described below, shareholders would be entitled to purchase
additional shares of common stock at 50% of the prevailing market price at the
time of exercise. The rights are not currently exercisable, but would become
exercisable if certain events occurred related to a person or group acquiring or
attempting to acquire 20% or more of the outstanding shares of common stock of
the Company. On August 22, 1995, in connection with the proposed merger (see
Note 3. Merger in Item 8. Financial Statements And Supplementary Data), the
Company's Rights Agreement was amended to provide that NCE will not be deemed an
"Acquiring Person" as a result of the execution, delivery, and performance of
the Merger Agreement.
In the event a takeover results in the Company being merged into an
acquiror, the unexercised rights could be used to purchase shares in the
acquiror at 50% of market price. Subject to certain conditions, if a person or
group acquires at least 20% but no more than 50% of the Company's common stock,
the Company's Board of Directors may exchange each right held by shareholders
other than the acquiring person or group for one share of common stock (or its
equivalent).
If a person or group successfully acquires 80% of the Company's common
stock for cash, after tendering for all of the common stock, and satisfies
certain other conditions, the rights would not operate. The rights expire on
March 22, 2001; however, each right may be redeemed by the Board of Directors
for one cent at any time prior to the acquisition of 20% of the common stock by
a potential acquiror. For a description of the rights and their terms see the
Company's Rights Agreement as amended, which is an exhibit to this Form 10-K.
22
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The following selected consolidated financial data of the Company and its
subsidiaries for each of the five years in the period ended December 31, 1995
should be read in conjunction with the consolidated financial statements and the
management's discussion and analysis of financial condition and results of
operations appearing elsewhere herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
(IN THOUSANDS-EXCEPT PER SHARE DATA & RATIOS)
<S> <C> <C> <C> <C> <C>
Operating revenues:
Electric............................................ $1,449,096 $1,399,836 $1,337,053 $1,260,769 $1,180,501
Gas................................................. 624,585 624,922 628,324 568,886 587,609
Other............................................... 36,920 32,626 33,308 32,618 26,794
---------- ---------- ---------- ---------- ----------
Total.......................................... 2,110,601 2,057,384 1,998,685 1,862,273 1,794,904
Total operating expenses................................ 1,788,851 1,786,592 1,717,752 1,612,646 1,551,326
Operating income........................................ 321,750 270,792 280,933 249,627 243,578
Total interest charges.................................. 143,906 132,134 130,337 121,116 101,537
Net income.............................................. 178,856 170,269 157,360 136,623 149,693
Dividend requirements on preferred stock................ 11,963 12,014 12,031 12,077 12,234
Earnings available for common stock..................... 166,893 158,255 145,329 124,546 137,459
Per share data applicable to common stock (a):
Earnings............................................ $ 2.65 $ 2.57 $ 2.43 $ 2.16 $ 2.48
Dividends declared.................................. $ 2.04 $ 2.00 $ 2.00 $ 2.00 $ 2.00
Shares of common stock outstanding:
Weighted average.................................... 62,932 61,547 59,695 57,558 55,471
Year-end............................................ 63,358 62,155 60,457 58,477 56,294
Rate of return earned on average common equity
(net to common)..................................... 12.8% 12.9% 12.7% 11.7% 13.8%
Ratio of earnings to fixed charges (b).................. 2.78 2.53 2.54 2.43 2.94
Total assets............................................ $4,354,295 $4,207,832 $4,057,600 $3,759,583 $3,462,668
Total net plant......................................... 3,480,712 3,291,402 3,193,136 3,077,509 2,745,800
Total construction expenditures......................... 285,516 317,138 293,515 261,666 260,704
AFDC.................................................... 7,095 7,158 12,667 11,302 9,437
Cash generated internally as a percent of
construction expenditures (c)....................... 87.4% 35.4% 52.2% 57.5% 69.4%
Total common equity..................................... $1,343,645 $1,267,482 $1,184,183 $1,101,047 $1,034,433
Preferred stock:
Not subject to mandatory redemption................. 140,008 140,008 140,008 140,008 140,008
Subject to mandatory redemption at par
(including amounts due within one year)........ 43,865 45,241 45,454 45,654 46,368
Long-term debt (including amounts due within one year).. 1,278,389 1,180,580 1,193,668 1,199,779 993,965
Notes payable & commercial paper........................ 288,050 324,800 276,875 250,626 200,640
</TABLE>
- -------------------------
(a) Earnings per share are based on the weighted average number of shares of
common stock outstanding.
(b) See Exhibit 12(a) herein.
(c) Calculated as cash provided by operations net of cash used for dividends,
divided by construction expenditures net of AFDC equity-component.
23
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INDUSTRY OUTLOOK
The electric utility industry is continuing to experience unprecedented change
which, in turn, has heightened competitive pressures that are expected to
further increase in the future. In general, the industry is transitioning to a
deregulated environment as discussions on retail wheeling and alternative forms
of regulation are occurring in the majority of states across the country.
However, to date, only a few states have made substantial progress in
establishing competitive markets. Additionally, several factors have
contributed to such change including the EPAct, the FERC's NOPR on Open Access
Non-Discriminatory Transmission Services and an increase in the number of power
marketers which are accelerating the development of a competitive power supply
market. Most recently federal legislation related to deregulation of the
electric utility industry was introduced. During 1995, the SEC completed its
study and recommendations for the reform of PUHCA, the law which regulates the
ownership and operation of public utility holding companies.
Furthermore, customers are focusing on their energy costs and are demanding
lower prices, reliable service and more energy service options. Utilities and
regulators are concerned about meeting customers' needs and maintaining
financial stability during this time of change. In order to survive and succeed
in the increasingly competitive environment, utilities are implementing
strategic plans to cut costs and lower prices. Many of the strategic plans
include restructuring, realigning existing operations or merging with other
utilities to achieve economies of scale and increase overall productivity and
efficiency. While no one can predict how and when this will all be achieved,
the future changes are certain to have a major impact on the industry as we know
it today.
CORPORATE OVERVIEW
The Company is continuing to proactively assess the changes in the industry
and has taken several steps over the past few years which have focused on
improving the Company's overall competitive position. In August 1995, the
Company, SPS and NCE entered into a Merger Agreement providing for a business
combination as peer firms involving the Company and SPS in a "merger of equals"
transaction. The Company believes that the combination with a strong low-cost
utility will better position the Company to take advantage of opportunities in
its core utility and related non-utility businesses. In addition, the merger
will permit the Company to derive benefits from the more efficient and economic
utilization of combined facilities and personnel. Shareholders are expected to
benefit over the long-term from the Company's greater financial strength and
flexibility. The combined service territories will be larger and more diverse,
reducing the Company's exposure to changes in economic, competitive or climatic
conditions. Purchasing savings, increased economical use of generation capacity
and reduced administrative costs are anticipated as well. These benefits are
discussed in more detail in Note 3. Merger in Item 8. Financial Statements And
Supplementary Data.
In 1994, the Company reduced its workforce by approximately 1,100 management
and staff positions, or 17% of its total workforce. This was accomplished
through an early retirement/severance program in early 1994 and an internal
restructuring and involuntary severance program which was completed at the end
of 1994. The net labor and employee benefit cost savings during 1995 from this
downsizing was approximately $26 million. Other cost reduction and marketing
initiatives during 1995 included: 1) the organization of e prime, a wholly owned
subsidiary, to develop and market energy products and services in a non-
regulated environment, 2) the consolidation of customer service offices and 3)
the installation of automated meter reading equipment. Operating priorities in
1996 will continue to be focused on reducing costs and developing new business
opportunities.
Competition in the wholesale energy market, and to a lesser extent in the
retail market, has become more evident within the region served by the Company.
Wholesale electric prices have decreased as the number of energy suppliers,
including power marketers, have entered the market and utilities have become
more aggressive in their pricing. One of the Company's largest wholesale
customers received approval from the CPUC to build a combined-cycle generating
facility in southern Colorado. Previously, this wholesale customer had notified
the Company of its intent to reduce firm and peaking power purchases in the
future. The Company is exploring various opportunities with this customer
related to the construction of the proposed generation facility and the
24
<PAGE>
customer's on-going future purchases of electric energy from the Company to
minimize the impact of the potential loss of sales beginning in 1998.
The regulatory environment within Colorado is a primary focus for the Company
and the outcome of the Company's 1995 merger rate filings will likely have long-
term effects on the Company's future financial performance (see Note 9.
Commitments and Contingencies - Regulatory Matters in Item 8. Financial
Statements And Supplementary Data). The Company strongly believes that all
potentially stranded costs resulting from changes in laws or regulation should
be recoverable. Additionally, the Company believes that it will continue to be
subject to rate regulation that will allow for the recovery of all of its
deferred costs.
EARNINGS
Earnings per share were $2.65, $2.57 and $2.43 during 1995, 1994 and 1993,
respectively. The improved earnings in 1995 are primarily attributable to
increased electric and gas margins resulting from higher sales and lower
operating and maintenance expenses resulting from the cost containment efforts
that were implemented in 1994 and 1995. Earnings in 1994 were favorably
impacted by higher electric sales and the net effects of three one-time items
which increased earnings for that period by approximately $0.22 per share.
These one-time items included: 1) the gain recognized on the sale of WGG, 2) a
tax accrual adjustment, which positively impacted earnings, and 3) additional
expenses associated with the defueling and decommissioning of Fort St. Vrain.
ELECTRIC OPERATIONS
The following table details the annual change in electric operating
revenues and energy costs as compared to the preceding year:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
FROM PRIOR YEARS
1995 1994
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Electric operating revenues:
Retail....................................................................... $ 63,407 $48,774
Wholesale.................................................................... (5,724) 3,301
Other (including unbilled revenues).......................................... (8,423) 10,708
------ -------
Total revenues.............................................................. 49,260 62,783
Fuel used in generation....................................................... (16,123) 3,200
Purchased power............................................................... 44,871 40,134
------ -------
Net increase in electric margin............................................... $ 20,512 $19,449
======= =======
</TABLE>
The following table summarizes electric Kwh sales by major customer classes:
<TABLE>
<CAPTION>
MILLIONS OF % CHANGE
KWH SALES FROM PRIOR YEARS
--------------- ----------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
Residential................................................................... 6,282 6,120 2.6% 2.5%
Commercial and Industrial..................................................... 15,032 14,659 2.5 4.1
Public Authority.............................................................. 189 188 0.2 0.8
------ -------
Total Retail................................................................ 21,503 20,967 2.6 3.6
Wholesale..................................................................... 2,927 3,042 (3.8) 2.5
------ -------
Total....................................................................... 24,430 24,009 1.8 3.4
====== =======
</TABLE>
Electric operating revenues increased in 1995, when compared to 1994,
primarily due to higher retail sales resulting from customer growth and
additional revenues related to collection of QF purchased power capacity costs.
Wholesale revenues decreased in 1995 as a result of lower wholesale Kwh sales.
The demand for wholesale energy during 1995 has been negatively impacted by an
available supply of low-cost non-firm energy in
25
<PAGE>
the region. Electric operating revenues and electric sales were higher in 1994,
when compared to 1993, primarily due to customer growth and favorable weather,
as 1994 was significantly warmer than normal. Electric revenues increased
because of the additional collection of purchased power, decommissioning, and
DSM costs and were negatively impacted by the reduction in retail rates which
resulted from the Company's last retail rate case.
Base rates are changed only through rate proceedings of the Company's and
Cheyenne's regulatory agencies. Effective December 1, 1993, in connection with
the final 1993 rate decision issued by the CPUC, the Company reduced its retail
rates by approximately $5.2 million. This $5.2 million is comprised of a $13.1
million electric revenue decrease, a $7.1 million gas revenue increase and a
$0.8 million steam revenue increase. Also, effective July 1, 1993, a $13.9
million annual revenue increase associated with the recovery of nuclear
decommissioning costs was implemented.
The Company and Cheyenne currently have cost adjustment mechanisms which
recognize the majority of the effects of changes in fuel used in generation and
purchased power costs and allow recovery of such costs on a timely basis. As a
result, the changes in revenues associated with these mechanisms in 1995, 1994
and 1993 had little impact on net income.
Fuel used in generation expense decreased $16.1 million, or 8.1% during
1995, as compared to the prior year, primarily due to lower coal and coal
transportation costs from the renegotiation of certain contracts as generation
levels were about the same for both years. Fuel used in generation expense
increased 1.6% in 1994, when compared to 1993, due to higher generation levels.
Purchased power expense increased 10.3% in 1995 and 10.1% in 1994,
primarily due to increased purchases from QFs as mandated by the CPUC. Electric
energy purchased from QFs is over 50% higher per Kwh than that purchased from
other suppliers. A majority of purchased power costs associated with QFs have
historically been collected through the QFCCA, a cost adjustment mechanism;
however, the future recovery of costs under the QFCCA was recently modified by
the CPUC and will be subject to an earnings test, beginning October 1, 1996.
The Company intends to address this issue in connection with the merger rate
filing. This earnings test, if not changed or eliminated, may negatively impact
the ability of the Company to earn a rate of return on common equity in excess
of its current 11% allowed return in the electric department (see Note 9.
Commitments and Contingencies-Regulatory Matters in Item 8. Financial Statements
And Supplementary Data).
GAS OPERATIONS
The following table details the annual change in gas operating revenues and
gas purchased for resale as compared to the preceding year:
<TABLE>
<CAPTION>
INCREASE (DECREASE)
FROM PRIOR YEARS
1995 1994
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Gas operating revenues................................... $ (337) $ (3,402)
Less: gathering, processing and transportation revenues.. (7,618) (1,921)
------- --------
Revenues from gas sales.................................. 7,281 (1,481)
Gas purchased for resale................................. (5,197) 13,484
------- --------
Net increase (decrease) in gas sales margin.............. $12,478 $(14,965)
======= ========
</TABLE>
26
<PAGE>
The following table summarizes gas Mcf deliveries by major customer classes:
<TABLE>
<CAPTION>
MILLIONS OF % CHANGE
MCF DELIVERIES FROM PRIOR YEARS
-------------- ------------------
1995 1994 1995 1994
------ ------ ------- ---------
<S> <C> <C> <C> <C>
Residential................ 96.1 92.0 4.4% (6.4)%
Commercial and Industrial.. 59.3 57.5 3.2 (9.2)
Other...................... 0.4 0.6 (38.6) (89.9)
----- -----
Total Sales............. 155.8 150.1 3.8 (10.4)
Gathering and Processing... 1.6 29.9 (94.6) (28.9)
Transportation............. 88.6 78.2 13.2 8.7
----- -----
Total.................... 246.0 258.2 (4.7) (8.2)
===== =====
</TABLE>
Gas sales margin increased in 1995 and declined in 1994 primarily due to
changes in retail gas sales resulting from weather variations. There were
approximately 17% more heating degree days in 1995, as compared to 1994, and
approximately 16% fewer heating degree days in 1994, as compared to 1993.
Moderate customer growth has favorably impacted all periods. The approximate
$7.1 million base rate increase, effective December 1, 1993 (as discussed above)
mitigated some of the effects of lower sales in 1994, compared to the prior
year. The decrease in gathering and processing revenues and deliveries in 1995
and 1994 was primarily due to the sale of WGG in August 1994 (See Note 4.
Divestiture of Nonutility Assets in Item 8. Financial Statements And
Supplementary Data). Gas transportation deliveries have increased in each of
the past two years primarily because of service provided to new QF customers.
The Company and Cheyenne have in place GCA mechanisms for natural gas
sales, which recognize the majority of the effects of changes in the cost of gas
purchased for resale and adjust revenues to reflect such changes in cost on a
timely basis. As a result, the changes in revenues associated with these
mechanisms in 1995 and 1994, when compared to the respective preceding year, had
little impact on net income. However, the fluctuations in gas sales impact the
amount of gas the Company must purchase and, therefore, affect total gas
purchased for resale along with increases and decreases in the per-unit cost of
gas. The $5.2 million decrease in gas purchased for resale for 1995 is
primarily due to lower per unit cost of gas offset, in part, by a slight
increase in gas purchases. The increase in gas purchased for resale for 1994
reflects the higher price of gas purchased from the Company's major suppliers.
NON-FUEL OPERATING EXPENSES
Other operating and maintenance expenses decreased approximately $22
million or 5% in 1995, as compared to 1994, primarily due to lower labor and
employee benefit costs resulting from the Company's cost containment efforts
which included the restructuring and downsizing accomplished in 1994
(approximately a $26 million reduction) and the recognition of approximately
$8.7 million of involuntary severance costs in 1994. This restructuring and
downsizing was completed in two phases: 1) effective April 1, 1994, the Company
reduced its workforce by approximately 550 employees through an early
retirement/severance program, and 2) during the last six months of 1994, the
Company eliminated approximately 550 management and staff level positions in
connection with an internal restructuring and involuntary severance program.
These decreases in 1995 were offset, in part, by $4.0 million of costs related
to the merger (see Note 3. Merger in Item 8. Financial Statements And
Supplementary Data), the $2.5 million write-off of software costs due to the
cancellation of a materials management project, three months of additional
amortization of the early retirement/severance program costs totaling $2.2
million and $2.2 million of additional repair costs associated with an early
winter snow storm.
Other operating and maintenance expenses decreased $16.7 million during
1994 as compared to 1993, primarily due to lower labor costs resulting from the
early retirement/severance program, decreased maintenance expenses at the
Company's steam generating plants and lower Fuelco operation costs. These
decreases were offset, in part, by increased OPEB costs and the severance costs
associated with the Company's involuntary workforce reduction.
27
<PAGE>
During 1994, the Company recognized additional expenses aggregating
approximately $43.4 million for increased costs associated with the defueling
and decommissioning of Fort St. Vrain and the impairment of certain Fort St.
Vrain related property and inventory. The additional expense was primarily
associated with radiation levels in the reactor core being higher than
originally anticipated and increased uncertainty related to spent fuel disposal
issues (See Note 2. Fort St. Vrain in Item 8. Financial Statements And
Supplementary Data).
Taxes (other than income taxes) decreased $5.1 million in 1995 primarily
due to lower payroll related taxes resulting from the 1994 downsizing.
The $46.9 million increase in income taxes during 1995, as compared to
1994, is primarily due to higher pre-tax income and the effects of two items
recorded in 1994 which served to lower tax expense during that period. These
items included: 1) an adjustment associated with the adoption of full
normalization which was provided for in a CPUC rate order (approximately $21.3
million), and 2) the true-up of the tax accrual related to the filing of the
1993 tax return (approximately $5.1 million). The $12.5 million decrease in
income tax expense in 1994, as compared to 1993, was primarily due to the two
1994 items previously discussed (See Note 13. Income taxes in Item 8. Financial
Statements And Supplementary Data).
Other income and deductions decreased $30.6 million during 1995 as compared
to the preceding year, primarily due to the net effects of the pre-tax gain of
approximately $34.5 million recognized on the sale of WGG in 1994 (See Note 4.
Divestiture of Nonutility Assets in Item 8. Financial Statements And
Supplementary Data) and the 1994 reversal of the $3.0 million gas search award,
as the Colorado Supreme Court reversed the incentive award previously granted by
the CPUC. Other income and deductions increased $24.8 million in 1994, as
compared to 1993, primarily due to the gain on the sale of WGG offset, in part,
by lower AFDC and the reversal of the gas search award.
Interest charges increased $11.8 million during 1995 as compared to 1994.
Other interest increased due to higher interest rates and an increased level of
short-term borrowings in 1995, the recognition of interest costs related to the
over-collection of expenses under the Company's cost adjustment mechanisms and
higher interest on COLI contracts, while the net costs associated with long-term
debt decreased slightly. Interest charges increased $1.8 million in 1994, as
compared to 1993, primarily due to increased levels of short-term borrowings
offset, in part, by a decrease in interest on long-term debt, net of
amortization costs because the Company refinanced certain long-term debt issues
with lower-cost debt.
FINANCIAL POSITION
Accounts receivable decreased at December 31, 1995 as compared to 1994,
despite overall sales growth, due to the lower gas costs and because a portion
of the gas refund made late in 1995 was applied directly to customers' accounts.
The decrease in accounts payable is primarily due to lower gas costs and the
implementation of certain cost reduction strategies during 1995.
RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED
In March 1995, the FASB issued SFAS 121, which requires the Company to
review long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. This statement also imposes stricter criteria for continued
recognition of regulatory assets by requiring that such assets be probable of
future recovery at each balance sheet date. The Company adopted this standard
on January 1, 1996, the effective date of this new statement, and such adoption
did not have a material impact on the Company's results of operations, financial
position or cash flow.
COMMITMENTS AND CONTINGENCIES
Issues relating to Fort St. Vrain, the merger with SPS, and regulatory and
environmental matters are discussed in Notes 2, 3 and 9, respectively, in Item
8. Financial Statements And Supplementary Data.
28
<PAGE>
These matters and the future resolution thereof, may impact the Company's future
results of operations, financial position and cash flows.
COMMON STOCK DIVIDEND
In the first quarter of 1995, the Company increased the quarterly dividend
on its common stock from $0.50 per share to $0.51 per share. The Company's
common stock dividend level is dependent upon the Company's results of
operations, financial position, cash flow and other factors. The Board of
Directors will continue to evaluate the common stock dividend level on a
quarterly basis.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Net cash provided by operating activities (in millions) $385.7 $245.7 $279.9
</TABLE>
Cash provided by operating activities increased $140.0 million in 1995.
Approximately $47.5 million of this increase relates to the collection of
purchased gas and electric energy costs during 1995, as the Company went from an
undercollected position at December 31, 1994 to an overcollected position at
December 31, 1995. During late 1995, the Company made gas refunds totaling
approximately $81 million, including interest. Portions of these refunds were
applied directly to customers' accounts which decreased the accounts receivable
balance at year-end and, accordingly, will result in lower cash receipts in
early 1996. Higher earnings and lower decommissioning and defueling
expenditures in 1995 also contributed to the improved operating cash flows.
At December 31, 1995, the Company's decommissioning liability, excluding
defueling, was approximately $24.0 million. The expenditures related to this
obligation are expected to be incurred over the next year with final completion
of such activities anticipated in 1996. The annual decommissioning amount being
recovered from customers is approximately $13.9 million which will continue
through June 2005. At December 31, 1995, approximately $97.8 million remains to
be collected from customers and is reflected as a regulatory asset on the
consolidated balance sheet. Accordingly, operating cash flows will continue to
be negatively impacted until the decommissioning of Fort St. Vrain is complete.
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net cash used in investing activities (in millions) $(284.6) $(177.4) $(239.3)
</TABLE>
Cash used in investing activities for construction expenditures, net of
AFDC, was approximately $281.7 million, $314.0 million and $285.4 million for
1995, 1994 and 1993, respectively. Additionally, in 1995 the Company purchased
YGSC which invested approximately $6 million in Young Storage. Cash used in
investing activities was higher in 1995, as compared to both 1994 and 1993,
primarily due to the sale of WGG in 1994 and the sale of certain Fuelco
properties during 1994 and 1993 (See Note 4. Divestiture of Nonutility Assets in
Item 8. Financial Statements And Supplementary Data).
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
Net cash used in financing activities (in millions) $(92.3) $(80.5) $(73.7)
</TABLE>
Cash used in financing activities increased slightly in 1995 over each of
the past two years. Proceeds from the sale of common stock under the Company's
dividend reinvestment and stock purchase plan were $28.0 million, $38.1 million
and $47.9 million for 1995, 1994 and 1993, respectively. The decrease in these
proceeds has reduced the cash proceeds from financing activities. Long-term
debt refinancing activity decreased in 1995, compared to 1994 and 1993, as a
result of higher interest rates. The use of short-term borrowing over the last
several years has increased slightly, however, short-term borrowing levels were
reduced in late 1995 with an issuance of $80 million of medium-term notes by
PSCCC.
29
<PAGE>
PROSPECTIVE CAPITAL REQUIREMENTS
At December 31, 1995, the Company and its subsidiaries estimated cost of
their construction programs and other capital requirements for the years 1996,
1997 and 1998 are shown in the table below:
<TABLE>
<CAPTION>
1996 1997 1998
-------- -------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Company:
Electric
Production *................................ $ 58,731 $68,197 $112,047
Transmission................................ 25,372 16,669 21,600
Distribution................................ 71,734 82,435 76,443
Gas............................................ 53,135 54,802 53,893
General**...................................... 103,346 81,532 39,987
-------- ------- --------
Total Company............................... 312,318 303,635 303,970
Subsidiaries................................... 11,044 4,250 3,931
-------- -------- --------
Total construction expenditures............. 323,362 307,885 307,901
Less: AFDC..................................... 9,193 7,863 4,842
Add: Sinking funds and debt maturities......... 78,811 70,854 52,905
Add: Fort St. Vrain decommissioning and
defueling.................................... 29,625 333 343
-------- -------- --------
Total capital requirements................. $422,605 $371,209 $356,307
======== ======== ========
</TABLE>
* Capital requirements for Electric Production include $84 million for Fort St.
Vrain repowering.
** Capital requirements in the "General" category include assets leased under a
leasing program. The 1996 and 1997 amounts include approximately $92 million
of expenditures for automated electric and gas meter reading equipment.
The construction programs of the Company and its subsidiaries are subject
to continuing review and modification. In particular, actual construction
expenditures may vary from the estimates due to changes in the electric system
projected load growth, the desired reserve margin and the availability of
purchased power, as well as alternative plans for meeting the Company's long-
term energy needs. In addition, the proposed merger with SPS, the Company's
ongoing evaluation of merger, acquisition and divestiture opportunities to
support corporate strategies, and future requirements to install pollution
control equipment may impact actual capital requirements (See Note 3. Merger,
Note 4. Divestiture of Nonutility Assets and Note 9. Commitments and
Contingencies-Environmental Issues in Item 8. Financial Statements And
Supplementary Data).
CAPITAL SOURCES
At December 31, 1995, the Company and its subsidiaries estimated that their
1996-1998 capital requirements will be met principally with a combination of
funds from external sources and funds from operations. The Company and its
subsidiaries may meet their external capital requirements through the issuance
of first collateral trust bonds, preferred and/or common stock, by increasing
the level of borrowing under PSCCC's medium-term note program or through the
issuance of commercial paper or through short-term borrowing under committed and
uncommitted bank borrowing arrangements discussed below. The financing needs
are subject to continuing review and can change depending on market and business
conditions and changes, if any, in the construction plans of the Company and its
subsidiaries.
On August 30, 1995, the Company filed a registration statement with the SEC
for the issuance of 3 million shares of common stock and 3 million rights to
purchase common stock appurtenant thereto to be issued under the Company's
Automatic Dividend Reinvestment and Common Stock Purchase Plan ("Dividend
Reinvestment Plan") for the purpose of funding its construction program and
other general corporate purposes. The Dividend Reinvestment Plan allows its
shareholders to purchase additional shares of the Company's common
30
<PAGE>
stock through the reinvestment of cash dividends and the purchase of additional
shares of common stock with optional cash payments.
In 1990, the Company filed a registration statement with the SEC for the
issuance of $500 million principal amount of first mortgage bonds of which $200
million was designated for a secured medium-term note program. As of December
31, 1995, $191.5 million principal amount of medium-term notes had been issued,
and $250 million of first mortgage bonds had been issued. In 1993, the Company
filed a registration statement with the SEC for the issuance of $322,667,000
principal amount of first collateral trust bonds for the purpose of refunding
outstanding debt securities and for the payment of short-term indebtedness
incurred for such purposes, of which $212,667,000 principal amount has been
issued.
On August 2, 1994, the Company filed a registration statement with the SEC
for the issuance of first collateral trust bonds and cumulative preferred stock
for the purpose of funding its construction program, refunding certain issues of
its cumulative preferred stock and other general corporate purposes. The
aggregate principal amount of first collateral trust bonds, plus the aggregate
par value of shares of cumulative preferred stock, will not exceed $306.0
million. To date none of these registered securities have been issued.
The Company's Indenture dated as of December 1, 1939 (the "1939
Indenture"), which is a mortgage on the Company's electric and gas properties,
permits the issuance of additional first mortgage bonds to the extent of 60% of
the value of net additions to the Company's utility property, provided net
earnings before depreciation, taxes on income and interest expense for a recent
twelve month period are at least 2.5 times the annual interest requirements on
all bonds to be outstanding. The 1939 Indenture also permits the issuance of
additional bonds on the basis of retired first mortgage bonds, in some cases
with no requirement to satisfy such net earnings test. At December 31, 1995,
the amount of net additions would permit (and the net earnings test would not
prohibit) the issuance of approximately $357 million of new bonds (in addition
to the $200 million principal amount of secured medium-term notes discussed
above) at an assumed annual interest rate of 7.25%. At December 31, 1995, the
amount of retired bonds would permit the issuance of $890 million of new bonds.
The Company's Indenture dated as of October 1, 1993 (the "1993 Indenture")
is a second mortgage on the Company's electric properties. Generally, so long
as the Company's 1939 Indenture remains in effect, first collateral trust bonds
will be issued under the 1993 Indenture on the basis of the deposit with the
trustee of an equal principal amount of first mortgage bonds issued under the
1939 Indenture. If the bonds issued under the 1939 Indenture are to be issued
on the basis of property additions, first collateral trust bonds may be issued
under the 1993 Indenture only if net earnings before depreciation, taxes on
income, interest expenses and non-recurring charges for a recent twelve-month
period are at least 2 times annual interest requirements on all first mortgage
bonds (other than bonds held by the trustee under the 1993 Indenture) and all
first collateral trust bonds to be outstanding. As of December 31, 1995,
coverage under the net earnings test was in excess of 6 times such annual
interest requirements.
The Company's Restated Articles of Incorporation prohibit the issuance of
additional preferred stock without preferred shareholder approval, unless the
gross income available for the payment of interest charges for a recent twelve
month period is at least 1.5 times the total of: 1) the annual interest
requirements on all indebtedness to be outstanding for more than one year; and
2) the annual dividend requirements on all preferred stock to be outstanding.
At December 31, 1995, gross income available under this requirement would permit
the Company, if allowed under provisions of the Company's Restated Articles of
Incorporation, to issue approximately $2.8 billion of additional preferred stock
at an assumed annual dividend rate of 6.60%. Coverage of gross income to
interest charges was 5.49 at December 31, 1995.
The Company's Restated Articles of Incorporation prohibit, without
preferred shareholder approval, the issuance or assumption of unsecured
indebtedness, other than for refunding purposes, greater than 15% of the
aggregate of: 1) the total principal amount of all bonds or other securities
representing secured indebtedness of the Company, then outstanding; and 2) the
total of the capital and surplus of the Company, as then recorded on its books.
At December 31, 1995, the Company had outstanding unsecured indebtedness,
including subsidiary
31
<PAGE>
indebtedness with the credit support of the Company, in the amount of $150.6
million. The maximum amount permitted under this limitation was approximately
$393.2 million at December 31, 1995.
The Company and certain subsidiaries have available committed and
uncommitted lines of credit to meet their short-term cash requirements. The
Company, PSCCC, and certain subsidiaries have a credit facility, with several
banks which provides $300 million in committed bank lines of credit and is used
primarily to support the issuance of commercial paper by the Company and PSCCC,
and provide for direct borrowings thereunder. Under the facility Cheyenne, 1480
Welton, Inc., Fuelco, e prime and PSRI are provided access to the credit
facility with direct borrowings guaranteed by the Company. At December 31,
1995, $12.0 million remained unused under this facility. Generally, the banks
participating in the credit facility would have no obligation to continue their
commitments if there has been a material adverse change in the consolidated
financial condition, operations, business or otherwise that would prevent the
Company and its subsidiaries from performing their obligation under the credit
facility. This facility expires on November 17, 2000. Also, the Company has
individual arrangements for uncommitted bank lines of credit which totaled $100
million, and all remained unused at December 31, 1995. These individual
arrangements expire on December 31, 1996. The Company may borrow under
uncommitted preapproved lines of credit upon request; however, the banks have no
firm commitment to make such loans (see Note 8. Bank Lines of Credit and
Compensating Bank Balances in Item 8. Financial Statements And Supplementary
Data).
PSCCC may periodically issue medium-term notes (in addition to the short-
term debt discussed above) to supplement the financing/purchase of the Company's
customer accounts receivable and fossil fuel inventories. As of December 31,
1995, PSCCC had issued and had outstanding $80.0 million in medium-term notes.
The level of financing of PSCCC is tied directly to daily changes in the level
of the Company's outstanding customer accounts receivable and monthly changes in
fossil fuel inventories, and will vary minimally from year to year although
seasonal fluctuations in the level of assets will cause corresponding
fluctuations in the level of associated financing.
32
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO PUBLIC SERVICE COMPANY OF COLORADO
We have audited the accompanying consolidated balance sheets of Public Service
Company of Colorado (a Colorado corporation) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of income, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1995. These financial statements and the schedule referred to below are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Public Service Company of
Colorado and subsidiaries as of December 31, 1995 and 1994, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
As more fully discussed in Notes 11 and 13 to the consolidated financial
statements, effective January 1, 1993, the Company changed its methods of
accounting for postretirement benefits other than pensions and for income taxes
and, effective January 1, 1994, the Company changed its method of accounting for
postemployment benefits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index of
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in our audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.
We have also audited, in accordance with generally accepted auditing standards,
the consolidated balance sheets as of December 31, 1993, 1992 and 1991 and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the two years in the period ended December 31, 1992, (none of which
are presented herein) and have expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the selected
financial data for each of the five years in the period ended December 31, 1995
appearing in Item 6 of this Form 10-K, other than the ratios and percentages
therein, is fairly stated, in all material respects, in relation to the
financial statements from which it has been derived.
ARTHUR ANDERSEN LLP
Denver, Colorado
February 15, 1996
33
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF DOLLARS)
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Property, plant and equipment, at cost:
Electric......................................................................... $3,751,321 $3,641,711
Gas.............................................................................. 989,215 867,239
Steam and other.................................................................. 88,446 86,458
Common to all departments........................................................ 380,809 369,070
Construction in progress......................................................... 192,580 187,577
--------- ---------
5,402,371 5,152,055
Less: accumulated depreciation................................................... 1,921,659 1,860,653
--------- ---------
Total property, plant and equipment............................................. 3,480,712 3,291,402
--------- ---------
Investments, at cost.............................................................. 24,282 18,202
--------- ---------
Current assets:
Cash and temporary cash investments.............................................. 14,693 5,883
Accounts receivable, less reserve for uncollectible accounts ($3,630 at December
31, 1995; $3,173 at December 31, 1994) (Schedule II).......................... 124,731 163,465
Accrued unbilled revenues (Note 1)............................................... 96,989 86,106
Recoverable purchased gas and electric energy costs - net (Note 1)............... - 37,979
Materials and supplies, at average cost.......................................... 56,525 67,600
Fuel inventory, at average cost.................................................. 35,654 31,370
Gas in underground storage, at cost (LIFO)....................................... 44,900 42,355
Current portion of accumulated deferred income taxes (Note 13)................... 19,229 20,709
Regulatory assets recoverable within one year (Note 1)........................... 40,247 39,985
Prepaid expenses and other....................................................... 35,619 16,312
--------- ---------
Total current assets............................................................. 468,587 511,764
--------- ---------
Deferred charges:
Regulatory assets (Note 1)........................................................ 321,797 335,893
Unamortized debt expense.......................................................... 10,460 11,073
Other............................................................................. 48,457 39,498
--------- ---------
Total deferred charges........................................................... 380,714 386,464
--------- ---------
$4,354,295 $4,207,832
========== ==========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
34
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF DOLLARS)
DECEMBER 31, 1995 AND 1994
CAPITAL AND LIABILITIES
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Common stock (Note 5).................................................... $ 997,106 $ 959,268
Retained earnings........................................................ 346,539 308,214
---------- ----------
Total common equity.................................................... 1,343,645 1,267,482
Preferred stock (Note 5):
Not subject to mandatory redemption..................................... 140,008 140,008
Subject to mandatory redemption at par.................................. 41,289 42,665
Long-term debt (Note 6).................................................. 1,195,553 1,155,427
---------- ----------
2,720,495 2,605,582
---------- ----------
Noncurrent liabilities:
Defueling and decommissioning liability (Note 2)........................ 23,115 40,605
Employees' postretirement benefits other than pensions (Note 11)........ 51,704 42,106
Employees' postemployment benefits (Note 11)............................ 23,500 20,975
---------- ----------
Total noncurrent liabilities.......................................... 98,319 103,686
---------- ----------
Current liabilities:
Notes payable and commercial paper (Note 7)............................. 288,050 324,800
Long-term debt due within one year...................................... 82,836 25,153
Preferred stock subject to mandatory redemption within one year (Note 5) 2,576 2,576
Accounts payable........................................................ 156,109 177,031
Dividends payable....................................................... 35,284 34,078
Recovered purchased gas and electric energy costs - net (Note 1)........ 9,508 -
Customers' deposits..................................................... 17,462 17,099
Accrued taxes........................................................... 55,393 54,148
Accrued interest........................................................ 32,071 32,265
Current portion of defueling and decommissioning liability (Note 2)..... 24,055 36,365
Other................................................................... 78,451 62,640
---------- ----------
Total current liabilities............................................. 781,795 766,155
---------- ----------
Deferred credits:
Customers' advances for construction.................................... 99,519 96,442
Unamortized investment tax credits...................................... 113,184 118,532
Accumulated deferred income taxes (Note 13)............................. 508,143 485,668
Other................................................................... 32,840 31,767
---------- ----------
Total deferred credits................................................ 753,686 732,409
Commitments and contingencies (Notes 2 and 9)............................
---------- ----------
$4,354,295 $4,207,832
========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
35
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Operating revenues:
Electric.............................................. $1,449,096 $1,399,836 $1,337,053
Gas................................................... 624,585 624,922 628,324
Other................................................. 36,920 32,626 33,308
---------- ---------- ----------
2,110,601 2,057,384 1,998,685
Operating expenses:
Fuel used in generation............................... 181,995 198,118 194,918
Purchased power....................................... 481,958 437,087 396,953
Gas purchased for resale.............................. 392,680 397,877 384,393
Other operating expenses.............................. 350,093 369,094 376,686
Maintenance........................................... 64,069 67,097 76,229
Defueling and decommissioning (Note 2)................ - 43,376 -
Depreciation and amortization......................... 141,380 139,035 140,804
Taxes (other than income taxes)....................... 81,319 86,408 86,775
Income taxes (Note 13)................................ 95,357 48,500 60,994
---------- ---------- ----------
1,788,851 1,786,592 1,717,752
---------- ---------- ----------
Operating income....................................... 321,750 270,792 280,933
Other income and deductions:
Allowance for equity funds used during construction... 3,782 3,140 8,119
Gain on sale of WestGas Gathering, Inc. (Note 4)...... - 34,485 -
Miscellaneous income and deductions - net............. (2,770) (6,014) (1,355)
---------- ---------- ----------
1,012 31,611 6,764
Interest charges:
Interest on long-term debt............................ 85,832 89,005 98,089
Amortization of debt discount and expense less premium 3,278 3,126 2,018
Other interest........................................ 58,109 44,021 34,778
Allowance for borrowed funds used during construction. (3,313) (4,018) (4,548)
---------- ---------- ----------
143,906 132,134 130,337
---------- ---------- ----------
Net income.............................................. 178,856 170,269 157,360
Dividend requirements on preferred stock................ 11,963 12,014 12,031
---------- ---------- ----------
Earnings available for common stock..................... $ 166,893 $ 158,255 $ 145,329
========== ========== ==========
Shares of common stock outstanding (thousands):
Year-end............................................... 63,358 62,155 60,457
========== ========== ==========
Weighted average....................................... 62,932 61,547 59,695
========== ========== ==========
Earnings per weighted average share of common stock
outstanding.......................................... $ 2.65 $ 2.57 $ 2.43
========== ========== ==========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
36
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(THOUSANDS OF DOLLARS, EXCEPT SHARE INFORMATION)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
COMMON STOCK, $5 PREMIUM
PAR VALUE ON
-------------------- COMMON RETAINED
SHARES AMOUNT STOCK EARNINGS TOTAL
---------- -------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993.... 58,476,805 $292,384 $560,938 $ 247,725 $1,101,047
Net income.................... - - - 157,360 157,360
Dividends declared
Common stock, $2.00 per
share...................... - - - (119,722) (119,722)
Preferred stock, $100
par value.................. - - - (9,088) (9,088)
Preferred stock, $25 par
value...................... - - - (2,940) (2,940)
Issuance of common stock
Employees' Savings Plan..... 329,220 1,646 7,716 - 9,362
Dividend Reinvestment Plan.. 1,651,350 8,257 39,907 - 48,164
---------- -------- -------- ---------- -----------
Balance at December 31, 1993.. 60,457,375 302,287 608,561 273,335 1,184,183
Net income.................... - - - 170,269 170,269
Dividends declared
Common stock, $2.00 per
share...................... - - - (123,379) (123,379)
Preferred stock, $100 par
value...................... - - - (9,071) (9,071)
Preferred stock, $25 par
value...................... - - - (2,940) (2,940)
Issuance of common stock
Employees' Savings Plan..... 334,223 1,671 8,439 - 10,110
Dividend Reinvestment Plan.. 1,355,104 6,775 31,308 - 38,083
Omnibus Incentive Plan...... 7,892 39 188 - 227
---------- -------- -------- ---------- -----------
Balance at December 31, 1994.. 62,154,594 310,772 648,496 308,214 1,267,482
Net income.................... - - - 178,856 178,856
Dividends declared
Common stock, $2.04 per
share...................... - - - (128,587) (128,587)
Preferred stock, $100 par
value...................... - - - (9,004) (9,004)
Preferred stock, $25 par
value...................... - - - (2,940) (2,940)
Issuance of common stock
Employees' Savings Plan..... 310,546 1,553 8,152 - 9,705
Dividend Reinvestment Plan.. 889,331 4,447 23,575 - 28,022
Omnibus Incentive Plan...... 3,657 19 92 - 111
---------- -------- -------- ---------- -----------
Balance at December 31, 1995.. 63,358,128 $316,791 $680,315 $346,539 $1,343,645
========== ======== ======== ========== ===========
</TABLE>
Authorized shares of common stock were 160 million at December 31, 1995 and 1994
and 140 million at December 31, 1993.
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
37
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF DOLLARS)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Operating activities:
Net income......................................................... $ 178,856 $ 170,269 $ 157,360
Adjustments to reconcile net income to net
cash provided by operating activities (Note 1):
Depreciation and amortization.................................... 145,370 142,843 143,940
Defueling and decommissioning expenses........................... - 43,376 -
Gain on sale of WestGas Gathering, Inc........................... - (34,485) -
Amortization of investment tax credits........................... (5,348) (5,799) (4,917)
Deferred income taxes............................................ 39,170 34,234 33,435
Allowance for equity funds used during construction.............. (3,782) (3,140) (8,119)
Change in accounts receivable.................................... 38,734 (16,281) (3,813)
Change in inventories............................................ 4,246 10,007 (25,378)
Change in other current assets................................... 7,618 (1,695) (14,619)
Change in accounts payable....................................... (20,922) (35,364) 31,909
Change in other current liabilities.............................. 24,230 (39,730) (5,439)
Change in deferred amounts....................................... (20,385) (33,920) (17,483)
Change in noncurrent liabilities................................. (5,367) 15,321 (14,759)
Other............................................................ 3,279 92 7,762
--------- --------- ---------
Net cash provided by operating activities....................... 385,699 245,728 279,879
Investing activities:
Construction expenditures.......................................... (285,516) (317,138) (293,515)
Allowance for equity funds used during construction................ 3,782 3,140 8,119
Proceeds from sale of WestGas Gathering, Inc....................... - 87,000 -
Proceeds from disposition of property, plant and equipment......... 2,470 49,438 43,120
Purchase of other investments...................................... (10,249) (955) (5,660)
Sale of other investments.......................................... 4,898 1,148 8,678
--------- --------- ---------
Net cash used in investing activities........................... (284,615) (177,367) (239,258)
Financing activities:
Proceeds from sale of common stock (Note 1)........................ 28,030 38,086 47,894
Proceeds from sale of long-term notes and bonds (Note 1)........... 101,860 250,068 257,913
Redemption of long-term notes and bonds............................ (44,713) (281,835) (274,829)
Short-term borrowings - net........................................ (36,750) 47,925 26,249
Redemption of preferred stock...................................... (1,376) (213) (200)
Dividends on common stock.......................................... (127,352) (122,531) (118,732)
Dividends on preferred stock....................................... (11,973) (12,016) (12,033)
--------- --------- ---------
Net cash used in financing activities........................... (92,274) (80,516) (73,738)
--------- --------- ---------
Net increase (decrease) in cash and temporary cash investments.. 8,810 (12,155) (33,117)
Cash and temporary cash investments at beginning of year........ 5,883 18,038 51,155
--------- --------- ---------
Cash and temporary cash investments at end of year.............. $ 14,693 $ 5,883 $ 18,038
========= ========= =========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
38
<PAGE>
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS, UTILITY OPERATIONS AND REGULATION
The Company is an operating public utility engaged, together with its utility
subsidiaries, principally in the generation, purchase, transmission,
distribution and sale of electricity and in the purchase, transmission,
distribution, sale and transportation of natural gas primarily in the Denver
metropolitan area. The Company is subject to the jurisdiction of the CPUC with
respect to its retail electric and gas operations and the FERC with respect to
its wholesale electric operations and accounting policies and practices.
Approximately 90% of the Company's electric and gas revenues are subject to CPUC
jurisdiction. Cheyenne and WGI are subject to the jurisdiction of the WPSC and
the FERC, respectively.
Regulatory assets and liabilities
The Company and its regulated subsidiaries prepare their financial statements
in accordance with the provisions of SFAS 71. In general, SFAS 71 recognizes
that accounting for rate regulated enterprises should reflect the relationship
of costs and revenues introduced by rate regulation. As a result, a regulated
utility may defer recognition of a cost (a regulatory asset) or recognize an
obligation (a regulatory liability) if it is probable that, through the
ratemaking process, there will be a corresponding increase or decrease in
revenues.
In response to the increasingly competitive environment for utilities, the
regulatory climate also is changing. The Company continues to participate in
regulatory proceedings which could change or impact current regulation. However,
the Company believes it will continue to be subject to rate regulation that will
provide for the recovery of all of its deferred costs. Although the Company
does not currently anticipate such an event, to the extent the Company concludes
in the future that collection of such revenues (or payment of liabilities) is no
longer probable, through changes in regulation and/or the Company's competitive
position, the Company may be required to recognize as expense, at a minimum, all
deferred costs currently recognized as regulatory assets on the consolidated
balance sheet.
In March 1995, the Financial Accounting Standards Board issued SFAS 121 which
imposes stricter criteria for the continued recognition of regulatory assets on
the balance sheet by requiring that such assets be probable of future recovery
at each balance sheet date. The Company adopted this standard on January 1,
1996, the effective date of the new statement, and such adoption did not have a
material impact on the Company's results of operations, financial position or
cash flow.
39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The following regulatory assets are reflected in the Company's consolidated
balance sheets:
<TABLE>
<CAPTION>
RECOVERY
1995 1994 THROUGH
-------- -------- ------------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Nuclear decommissioning costs (Note 2)........ $ 97,801 $107,374 2005
Income taxes (Note 13)........................ 110,617 125,832 2006
Employees' postretirement benefits
other than pensions (Note 11)................ 47,600 37,573 2013
Early retirement costs (Note 11).............. 24,366 33,124 1998
Employees' postemployment benefits (Note 11).. 23,500 20,975 Undetermined
Demand-side management costs.................. 30,188 20,831 2002
Unamortized debt reacquisition costs.......... 21,940 22,360 2024
Other......................................... 6,032 7,809 1999
-------- --------
Total....................................... 362,044 375,878
Classified as current......................... 40,247 39,985
-------- --------
Classified as noncurrent...................... $321,797 $335,893
======== ========
</TABLE>
Certain costs associated with the Company's DSM programs are deferred and
recovered in rates over five to seven year periods through the DSMCA, which was
implemented July 1, 1993. Non-labor incremental expenses, carrying costs
associated with deferred DSM costs and incentives associated with approved DSM
programs are recovered on an annual basis.
Costs incurred to reacquire debt prior to scheduled maturity dates are
deferred and amortized over the life of the debt issued to finance the
reacquisition or as approved by the regulator.
Recovered/Recoverable purchased gas and electric energy costs - net
The Company's and Cheyenne's tariffs contain clauses which allow recovery
of certain purchased gas and electric energy costs in excess of the level of
such costs included in base rates. These cost adjustment tariffs are revised
periodically, as prescribed by the appropriate regulatory agencies, for any
difference between the total amount collected under the clauses and the
recoverable costs incurred. The cumulative effects are recognized as a current
asset or liability until adjusted by refunds or collections through future
billings to customers.
Other
Property, plant and equipment includes approximately $18.4 million and
$25.4 million, respectively, for costs associated with the engineering design of
the future Pawnee 2 generating station and certain water rights located in
southeastern Colorado, also obtained for a future generating station. The
Company is earning a return on these investments based on the Company's weighted
average cost of debt and preferred stock in accordance with a CPUC rate order.
Non-utility subsidiaries
The Company's net investment in its non-utility subsidiaries approximated
2.5% of common equity at December 31, 1995. The subsidiaries are principally
involved in non-regulated energy services, the management of real estate and
certain life insurance policies and the financing of certain current assets of
the Company.
40
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
MANAGEMENT ESTIMATES
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CONSOLIDATION
The Company follows the practice of consolidating the accounts of its
significant subsidiaries. All intercompany items and transactions have been
eliminated. Certain prior year amounts have been reclassified to conform to the
current year's presentation.
REVENUE RECOGNITION
The Company and Cheyenne accrue for estimated unbilled revenues for
services provided after the meters were last read on a cycle billing basis
through the end of each year.
STATEMENTS OF CASH FLOWS
For purposes of the consolidated statements of cash flows, the Company and
its subsidiaries consider all temporary cash investments to be cash equivalents.
These temporary cash investments are securities having original maturities of
three months or less or having longer maturities but with put dates of three
months or less.
Income taxes and interest (excluding amounts capitalized) paid:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Income taxes... $ 58,662 $ 41,763 $ 49,196
Interest....... $140,823 $126,250 $129,844
</TABLE>
Non-cash transactions:
Shares of common stock (310,546 in 1995, 334,223 in 1994 and 329,220 in
1993), valued at the market price on date of issuance (approximately $9.7
million in 1995, $10.1 million in 1994 and $9.4 million in 1993), were issued to
the Employees' Savings and Stock Ownership Plan of Public Service Company of
Colorado and Participating Subsidiary Companies. The estimated issuance values
were recognized in other operating expenses during the respective preceding
years. Shares of common stock (3,390 in 1995 and 7,892 in 1994), valued at the
market price on the date of issuance ($0.1 million in 1995 and $0.2 million in
1994), were issued to certain executives pursuant to the applicable provisions
of the executive compensation plans. These stock issuances were non-cash
transactions and are not reflected in the consolidated statement of cash flows.
A $40.5 million capital lease obligation was recognized in 1995 in
connection with a 30-year gas storage facility agreement. Additionally, other
capital lease obligations totaling approximately $0.1 million were recognized in
1995. A $16.8 million capital lease obligation was incurred for computer
equipment in 1994.
Changes in certain balance sheet accounts, resulting from the sale of WGG
in 1994, have been recognized as non-cash activity.
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
PROPERTY AND DEPRECIATION
Replacements and betterments representing units of property are
capitalized. Maintenance and repairs of property and replacements of items of
property determined to be less than a unit of property are charged to operations
as maintenance. The cost of units of property retired, together with cost or
removal, less salvage, is charged against accumulated depreciation.
Provisions for depreciation of property for financial accounting purposes
are based on straight-line composite rates applied to the various classes of
depreciable property. Depreciation rates include provisions for disposal and
removal costs of property, plant and equipment. Depreciation expense, expressed
as a percentage of average depreciable property, approximated 2.6% for the years
ended December 31, 1995 and 1994 and 3.0% for the year ended December 31, 1993.
The average rate for 1995 and 1994 reflects the effects of using a longer
estimated depreciable life for the Company's electric steam production
facilities based on the Company's most recent depreciation study, as approved by
the CPUC. For income tax purposes, the Company and its subsidiaries use
accelerated depreciation and other elections provided by the tax laws.
ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION
AFDC, as defined in the system of accounts prescribed by the FERC and the
CPUC, represents the net cost during the period of construction of borrowed
funds used for construction purposes, and a reasonable rate on funds derived
from other sources. AFDC does not represent current cash earnings. The Company
capitalizes AFDC as a part of the cost of utility plant. The AFDC rates or
ranges of rates used during 1995, 1994 and 1993 were 7.97%, 6.81%-8.75% and
10.21%, respectively.
INCOME TAXES
The Company and its subsidiaries file consolidated Federal and state income
tax returns. Income taxes are allocated to the subsidiaries based on separate
company computations of taxable income or loss. Investment tax credits have
been deferred and are being amortized over the service lives of the related
property. Deferred taxes are provided on temporary differences between the
financial accounting and tax bases of assets and liabilities using the tax rates
which are in effect at the balance sheet date (see Note 13).
GAS IN UNDERGROUND STORAGE
Gas in underground storage is accounted for under the last-in, first-out
(LIFO) cost method. The estimated replacement cost of gas in underground
storage at December 31, 1995 and 1994 exceeded the LIFO cost by approximately
$5.3 million and $12.5 million, respectively.
CASH SURRENDER VALUE OF LIFE INSURANCE POLICIES
The following amounts related to COLI contracts, issued by one major
insurance company, are recorded as a component of Investments, at cost, on the
consolidated balance sheets:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Cash surrender value of contracts............ $311,097 $267,445
Borrowings against contracts................. 308,833 265,568
-------- --------
Net investment in life insurance contracts.. $ 2,264 $ 1,877
======== ========
</TABLE>
42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
2. FORT ST. VRAIN
OVERVIEW
In 1989, the Company announced its decision to end nuclear operations at
Fort St. Vrain and to proceed with the defueling of the reactor to the ISFSI,
which has been completed, as discussed below in the section entitled
"Defueling". The Company is currently decommissioning the facility as described
below in the section entitled "Decommissioning".
Fort St. Vrain is being repowered as a gas fired combined cycle steam
plant consisting of two combustion turbines and two heat recovery steam
generators totaling 471 Mw. The CPCN, which was received in July 1994, provides
for the repowering of Fort St. Vrain in a phased approach as follows: Phase 1A
- - 130 Mw in 1996, Phase 1B - 102 Mw in 1999 and Phase 2 - 239 Mw in 2000. The
repowering of Phase 1A is substantially complete and it is expected to be on-
line in the second quarter of 1996. The phased repowering allows the Company
flexibility in timing the addition of this generation supply to meet future load
growth.
DEFUELING
The Company has entered into two separate agreements with the DOE for (a)
the temporary storage of segments 1-8 at a DOE facility located in the State of
Idaho (such contract includes a provision to store additional spent fuel
segments if storage space exists) and (b) the disposal of segment 9 at a Federal
repository. Resolution of spent fuel disposal issues has been substantially
delayed due to failure by the DOE to meet legal requirements relating to
storage. It is currently estimated that the Federal repository will not be open
until 2010. While the plant was operating and as part of routine refueling
procedures, three spent fuel segments (segments 1 - 3) were transported to the
Idaho facility. Currently, six segments of Fort St. Vrain's spent nuclear fuel
(segments 4-9) are stored in the ISFSI located at the plant site.
During the last several months, the Company and the DOE have had various
discussions regarding the issues related to the disposal of Fort St. Vrain's
spent nuclear fuel. During January and February 1996, the discussions focused on
the drafting and execution of a contract to resolve these issues and, on
February 9, 1996, the parties executed such contract. In summary, the primary
provisions of the agreement include the following.
- On February 9, 1996, the DOE assumed title to fuel segments 4 - 9, which,
as noted above, currently are stored in the facility.
- The DOE agreed to pay the Company $16 million for settlement of claims
associated with the ISFSI. Title to the ISFSI will pass to the DOE at such
time as all applicable legal requirements for title transfer (including NRC
approval) are met. The DOE deposited $14 million of the $16 million into an
interest bearing escrow account. The initial $2 million was paid to the
Company on February 13, 1996.
- Until the time title to the ISFSI transfers to the DOE, the Company will
be entitled to payments of $2 million per year (escalated annually based on
the Consumer Price Index) plus ISFSI operating and maintenance costs
including licensing fees and other regulatory costs, facility support and
reasonable insurance costs. On the date title transfers, the Company will
be entitled to the remaining funds (principal and interest) in the escrow
account and the agreement will be terminated.
- The term of the agreement will be for a period of up to 15 years, with
one 5 year option to extend. If such option to extend is exercised, the
annual payments increase to $4 million (unescalated). The DOE has the
option to terminate the agreement after the first 8 years.
- Upon termination or expiration of the agreement, the DOE will be
responsible for the defueling and decommissioning of the ISFSI with the
Company being responsible for costs only up to the amount contained in
43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
its existing NRC required escrow account. Such amount at December 31, 1995
was approximately $1.7 million.
- The Company provided to the DOE a full and complete release of claims
against the DOE arising out of prior contracts discussed above related to
spent fuel disputes.
In accordance with the 1991 CPUC approval to recover the early
dismantlement/decommissioning costs described below, 50% of any cash amounts
received from the DOE as part of a settlement, net of costs incurred by the
Company, including legal fees, the amount of which has not yet been determined,
is to be refunded or credited to customers.
During 1994, as a result of increased uncertainties related to the ultimate
disposal of Fort St. Vrain's spent nuclear fuel, the Company had recognized an
additional $15 million defueling reserve, determined on a present value basis.
This amount represented the additional estimated cost of operating and
maintaining the ISFSI until 2020 (if required), the earliest date the Company
believed a Federal repository will be available to accept the Company's spent
nuclear fuel. These estimated expenditures were escalated for inflation using
an average rate of 3.5% and discounted to present value at a rate of 8%.
DECOMMISSIONING
The Company has been pursuing the early dismantlement/decommissioning of
Fort St. Vrain following the 1991 CPUC approval of the recovery from customers
of approximately $124.4 million (plus a 9% carrying cost) for such activities,
as well as the 1992 NRC approval of the Company's early
dismantlement/decommissioning plan. The decommissioning amount being recovered
from customers, which began July 1, 1993 and extends over a twelve-year period,
represented the inflation-adjusted estimated remaining cost of the early
dismantlement/decommissioning activities not previously recognized as expense at
the time of CPUC approval. At December 31, 1995, approximately $97.8 million of
such amount remains to be collected from customers and, therefore, is reflected
as a regulatory asset on the consolidated balance sheet. The amount recovered
from customers each year is approximately $13.9 million.
The Company has contracted with Westinghouse Electric Corporation and MK-
Ferguson, a division of Morrison Knudsen Corporation, for the early
dismantlement/decommissioning of Fort St. Vrain. At February 9, 1996, the
physical decommissioning work activities had been substantially completed with
only NRC site release remaining to be addressed. It is expected that such NRC
site release activities will be completed in 1996 resulting in the Company's
Part 50 license being terminated.
The decommissioning contract stipulates a fixed price, based on a defined
work scope; however, such price has been and could be further modified due to
changes in work scope related to the final NRC site release described below.
Since the initiation of decommissioning activities, the decommissioning
contractors have notified the Company of several scope changes which were
primarily related to the identification of higher radiation levels in the
reactor core than originally anticipated and regulatory changes related to site
release as discussed below.
On October 25, 1994, the Company and the decommissioning contractors
reached an agreement resolving all issues and claims related to identified and
certain possible future changes in scope of work covered by the contract, with
certain exceptions. In order to complete all decommissioning activities related
to such scope changes, the Company recognized an additional $15 million in
decommissioning expense during 1994.
The significant exceptions to the agreement, which were also areas for
potential changes in the defined work scope under the decommissioning contract,
include changes in law, radioactive material created by activation in the lower
portion of the reactor, as well as changes in the methodology requirements and
guidance established by the NRC for final site release. On January 26, 1995,
the Company received NRC approval of its Final Survey Plan for Site Release
reducing the future uncertainty related to this issue.
44
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
During the third quarter of 1995, the Company and the decommissioning
contractors reached an agreement resolving all issues related to the
identification of radioactive material created by activation in the lower
portion of the reactor. As part of this agreement, the Company paid the
contractors an additional $8 million. While the Company agreed to this change
in work scope, a revision in the defueling and decommissioning liability was not
required as the then cost estimate, prior to such change, included a contingency
provision. Such provision was sufficient to cover the cost of the additional
scope change.
At December 31, 1995, approximately $314.6 million had been spent for
defueling and decommissioning activities with a remaining $47.2 million
defueling and decommissioning liability reflected on the consolidated balance
sheet. While the Company is currently evaluating the financial impact of the
recent DOE settlement, including amounts expected to be refunded to customers as
described above as well as the final evaluation of the remaining decommissioning
costs, it is expected that such settlement will have a positive impact on the
Company's first quarter 1996 pre-tax operating income ranging from approximately
$15 million to $20 million.
FUNDING
Under NRC regulations, the Company is required to make filings with, and
obtain the approval of, the NRC regarding certain aspects of the Company's
decommissioning proposals, including funding. On January 27, 1992, the NRC
accepted the Company's funding aspects of the decommissioning plan. The Company
has also obtained an unsecured irrevocable letter of credit totaling $125
million that meets the NCR's stipulated funding guidelines including those
proposed on August 21, 1991 that address decommissioning funding requirements
for nuclear power reactors that have been prematurely shut down. In accordance
with the NRC funding guidelines, the Company is allowed to reduce the balance of
the letter of credit based upon milestone payments made under the fixed-price
decommissioning contract. As a result of such payments, at December 31, 1995,
the letter of credit had been reduced to $43 million.
NUCLEAR INSURANCE
The Price Anderson Act, as amended, limits the public liability of a
licensee for a single nuclear incident at its nuclear power plant to the amount
of financial protection available through liability insurance and deferred
premium assessment charges, currently approximately $8.9 billion, which includes
a 5% surcharge. The Act requires licensees to participate in an assessable
excess liability program through an indemnity program with the NRC. Under the
terms of this indemnity program, the Company could be liable for retrospective
assessments of approximately $79 million per nuclear incident at any nuclear
power plant. Also, it is provided that not more than $10 million could be
payable per incident in any one year. The Company's primary financial
protection for this exposure was provided in the amount available ($200 million)
by private insurance. In consideration of the shutdown and defueled status of
Fort St. Vrain, the Company requested exemption from the indemnification
obligations under the Act. The NRC granted the Company's request for exemption
from participation in the indemnity program for nuclear incidents occurring
after February 17, 1994 and reduced the amount of primary liability insurance
required to $100 million.
In addition to the Company's liability insurance, Federal regulations
require the Company to maintain $1.06 billion in nuclear property insurance.
Effective February 1, 1991, the NRC granted the Company's exemption request to
reduce the nuclear property insurance coverage from $1.06 billion to a minimum
of $169 million. This lower limit would cover stabilization and decontamination
expenses resulting from a worst case accident. However, on June 7, 1995, the
NRC granted the Company an exemption from the requirement to maintain nuclear
property damage insurance following an environmental assessment and finding of
no significant impact. Accordingly, the Company has reduced such insurance
coverage to $10 million, which is related only to the ISFSI, the obligation for
which will also transfer when title to the ISFSI transfers to the DOE under the
provisions of the February 9, 1996 agreement discussed above.
3. MERGER
On August 22, 1995, the Company, SPS, a New Mexico corporation, and NCE, a
newly formed Delaware corporation, entered into a Merger Agreement providing for
a business combination as peer firms involving the
45
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Company and SPS in a "merger of equals" transaction. On January 30, 1996, NCE
filed its application with the SEC to be a registered public utility holding
company and the parent company for the Company and SPS.
On January 31, 1996, the shareholders of the Company and SPS approved the
Merger Agreement. Additionally, the Merger is subject to customary closing
conditions, including the receipt of all necessary governmental approvals and
the making of all necessary governmental filings, including approvals and
findings of state utility regulators in Colorado, Texas, New Mexico, Wyoming and
Kansas as well as the approval of the FERC, the NRC, the SEC, the Federal Trade
Commission and the U. S. Department of Justice. Applications to the state
regulatory commissions and the FERC have been completed and, on November 28,
1995, the Kansas Corporation Commission issued an order granting SPS's request
for authority for the issuance of common stock to NCE pursuant to the Merger
Agreement. It is expected that the Merger will be completed in the third
quarter 1996; however, the timing of the effective date of the merger is
primarily dependent upon the regulatory process (see Note 9).
Under the terms of the Merger Agreement, each outstanding share of the
Company's Common Stock will be canceled and converted into the right to receive
one share of NCE Common Stock, and each outstanding share of SPS Common Stock
will be canceled and converted into the right to receive 0.95 of one share of
NCE Common Stock. As of December 31, 1995, the Company had 63.4 million common
shares outstanding and SPS had 40.9 million common shares outstanding. Based on
such capitalization, the Merger would result in the common shareholders of the
Company owning 62% of the common equity of NCE and the common shareholders of
SPS owning 38% of the common equity of NCE. The Merger Agreement and the Merger
will not affect the debt, including mortgage bonds, and shares of preferred
stock of the Company and SPS which are outstanding at the time of the Merger.
It is anticipated that NCE will adopt the SPS dividend payment level, adjusted
for the exchange ratio, resulting in a pro forma dividend of $2.32 per share on
an annual basis, following completion of the Merger. The actual dividend level
will be dependent upon NCE's results of operations, financial position, cash
flows and other factors, and will be evaluated by NCE's Board of Directors.
Based on 1995 results, NCE would have proforma combined annual revenues of
approximately $3 billion and total assets of over $6 billion. The Company and
SPS project net synergy savings of approximately $770 million, net of costs to
achieve the merger, in the first 10 years after the transaction is completed.
The Company and SPS estimate that approximately 50 percent of the total
projected savings would result from labor cost savings through the elimination
of duplicate functions. It is expected that employee reductions would be
approximately 8% of the combined work force, or approximately 550 to 600
positions. The remainder would fall under non-labor savings, which would include
approximately 20 percent through deferral of additional capacity and 20 percent
from efficiencies in fuel procurement. The proposed allocation of the net
savings between customers and shareholders was submitted to regulatory agencies
in connection with the November 9, 1995 merger rate filings as discussed in Note
9. The analyses employed to develop estimates of potential savings as a result
of the Merger were necessarily based upon various assumptions which involve
judgments with respect to future national and regional economic and competitive
conditions, inflation rates, regulatory treatment, weather conditions, financial
market conditions, interest rates and future business decisions and conditions,
all of which are difficult to predict and many of which are beyond the control
of the Company and SPS. Accordingly, although the Company and SPS believe that
such assumptions are reasonable for developing estimates of potential savings,
there can be no assurance that these assumptions will approximate actual
experience or the extent to which such savings will be realized.
A transition management team, consisting of executives from each company, has
been formed and is working toward the common goal of creating one company with
integrated operations to achieve a more efficient and economic utilization of
facilities and resources. It is managements' intention that the consolidated
company begin realizing certain savings upon the consummation of the Merger and,
accordingly, costs associated with the Merger and the transition planning and
implementation are expected to negatively impact earnings during 1996 and 1997.
During 1995, the Company recognized approximately $4 million of costs associated
with the Merger. The Merger is expected to qualify as a tax-free reorganization
and as a pooling of interests for accounting purposes.
46
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The Company recognizes that the divestiture of its existing gas business or
certain non-utility ventures is a possibility under the new registered holding
company structure, but is seeking approval from the SEC to maintain these
businesses. If divestiture is ultimately required, the SEC has historically
allowed companies sufficient time to accomplish divestitures in a manner that
protects shareholder value. Additionally, in the event that divestiture of the
gas business is required, the Company will pursue an alternative corporate
organizational structure that will permit retention of the gas business.
4. DIVESTITURE OF NONUTILITY ASSETS
WESTGAS TRANSCOLORADO, INC.
In September 1995, WGT sold its one-third interest in the TransColorado Gas
Transmission Company for $3.8 million, which approximated net book value.
WESTGAS GATHERING, INC.
In August 1994, the Company sold all of its outstanding common stock of WGG,
its wholly-owned subsidiary, and certain related operating assets of the Company
which were used by WGG for approximately $87 million, subject to certain final
closing adjustments. The Company recognized a pre-tax gain of approximately
$34.5 million ($19.5 million after-tax or approximately 31 cents per share). In
the first quarter of 1995, the Company recognized $2.1 million of this gain as
an amount to be refunded to customers in accordance with a March 30, 1995
settlement agreement with the OCC. The refund was completed in late 1995.
FUEL RESOURCES DEVELOPMENT CO.
In June 1993, the Company's Board of Directors approved pursuing the
divestiture of Fuelco, a wholly-owned subsidiary primarily involved in the
exploration and production of oil and natural gas. In the fourth quarter of
1993, the Company recorded the estimated effects of the disposition of all
properties, including all costs expected to be incurred through the close of
operations. The effects of these transactions had no material impact on the
Company. The Company has continued to operate one group of assets, the San Juan
Coal Bed Methane properties, which has a book value of approximately $19.3
million at December 31, 1995. The Company believes that the remaining
investment in these assets is realizable and is pursuing the divestiture of
these assets, which is expected to be completed in 1996.
5. CAPITAL STOCK
COMMON STOCK
The Company has filed a registration statement with the SEC relating to the
registration of 1,000,000 common stock shares, $5 par value, and 1,000,000
common share purchase rights. These shares and rights are associated with the
Company's Omnibus Incentive Plan discussed in Note 11.
During 1991, the Company's Board of Directors declared a dividend of one
common share purchase right ("right") on each outstanding share of the Company's
common stock. All common shares issued will contain this right. Each right
stipulates an initial purchase price of $55 per share and also prescribes a
means whereby the resulting effect is such that, under the circumstances
described below, shareholders would be entitled to purchase additional shares of
common stock at 50% of the prevailing market price at the time of exercise.
These rights are not currently exercisable, but would become exercisable if
certain events occurred related to a person or group acquiring or attempting to
acquire 20% or more of the outstanding shares of common stock of the Company.
On August 22, 1995, in connection with the proposed merger (see Note 3), the
Company's Rights Agreement was amended to provide that NCE will not be
considered an "Acquiring Person" as a result of the execution, delivery, and
performance of the Merger Agreement.
47
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
In the event a takeover results in the Company being merged into an acquiror,
the unexercised rights could be used to purchase shares in the acquiror at 50%
of market price. Subject to certain conditions, if a person or group acquires
at least 20% but no more than 50% of the Company's common stock, the Company's
Board of Directors may exchange each right held by shareholders other than the
acquiring person or group for one share of common stock (or its equivalent).
If a person or group successfully acquires 80% of the Company's common stock
for cash, after tendering for all of the common stock, and satisfies certain
other conditions, the rights would not operate. The rights expire on March 22,
2001; however, each right may be redeemed by the Board of Directors for one cent
at any time prior to the acquisition of 20% of the common stock by a potential
acquiror.
<TABLE>
<CAPTION>
PREFERRED STOCK
1995 1994
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
(THOUSANDS (THOUSANDS
OF DOLLARS) OF DOLLARS)
<S> <C> <C> <C> <C>
Cumulative preferred stock, $100 par value:
Authorized................................... 3,000,000 3,000,000
========= =========
Issued and outstanding:
Not subject to mandatory redemption:
4.20% series.............................. 100,000 $ 10,000 100,000 $ 10,000
4 1/4% series (includes $7,500 premium)... 175,000 17,508 175,000 17,508
4 1/2% series............................. 65,000 6,500 65,000 6,500
4.64% series.............................. 160,000 16,000 160,000 16,000
4.90% series.............................. 150,000 15,000 150,000 15,000
4.90% 2nd series.......................... 150,000 15,000 150,000 15,000
7.15% series.............................. 250,000 25,000 250,000 25,000
--------- -------- --------- --------
Total.................................... 1,050,000 $105,008 1,050,000 $105,008
========= ======== ========= ========
Subject to mandatory redemption:
7.50% series.............................. 216,000 $ 21,600 216,000 $ 21,600
8.40% series.............................. 222,652 22,265 236,412 23,641
--------- -------- --------- --------
438,652 43,865 452,412 45,241
Less: Preferred stock subject to mandatory
redemption within one year................ (25,760) (2,576) (25,760) (2,576)
--------- ------- --------- -------
Total.................................... 412,892 $41,289 426,652 $42,665
========= ======= ========= =======
Cumulative preferred stock, $25 par value:
Authorized................................... 4,000,000 4,000,000
========= =========
Issued and outstanding:
Not subject to mandatory redemption:
8.40% series.............................. 1,400,000 $35,000 1,400,000 $35,000
========= ======= ========= =======
</TABLE>
The preferred stock may be redeemed at the option of the Company upon at
least 30, but not more than 60, days' notice in accordance with the following
schedule of prices, plus an amount equal to the accrued dividends to the date
fixed for redemption:
CUMULATIVE PREFERRED STOCK, NOT SUBJECT TO MANDATORY REDEMPTION:
$100 par value, all series: $101 per share.
$25 par value, 8.40% series: $25.25 per share.
48
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
CUMULATIVE PREFERRED STOCK, SUBJECT TO MANDATORY REDEMPTION:
7.50% series: $102 per share on or prior to August 31, 1996, reducing each
year thereafter by $0.25 per share until August 31, 2003, after which the
redemption price is $100 per share; 8.40% series: $102.25 per share on or prior
to July 31, 1996, and reducing each year thereafter by $0.25 per share until
July 31, 2004, after which the redemption price is $100 per share.
In 1996 and in each year thereafter, the Company must offer to repurchase
12,000 shares of the 7.50% series subject to mandatory redemption at $100 per
share, plus accrued dividends to the date set for repurchase, and 13,760 shares
of the 8.40% series subject to mandatory redemption at $100 per share, plus
accrued dividends to the date set for repurchase. Consequently, this preferred
stock to be redeemed is classified as preferred stock subject to mandatory
redemption within one year in the December 31, 1995 consolidated balance sheet.
In 1995, 1994 and 1993, the Company repurchased 13,760 shares, 2,133 shares and
2,000 shares, respectively, of the 8.40% cumulative preferred series subject to
mandatory redemption. No other changes in preferred stock occurred in the
three years ended December 31, 1995.
<TABLE>
<CAPTION>
6. LONG-TERM DEBT
1995 1994
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Public Service Company of Colorado:
First Collateral Trust Bonds:
6% - 6 3/8% series, due January 1, 2001 - November 1, 2005...................... $237,167 $237,167
7 1/4% series, due January 1, 2024.............................................. 110,000 110,000
First Mortgage Bonds:
5 3/8% - 6 3/4% series, due May 1, 1996 - July 1, 1998......................... 95,000 95,000
8 1/8% series, due March 1, 2004................................................ 100,000 100,000
8 3/4% - 9 7/8% series, due July 1, 2020 - March 1, 2022........................ 225,000 225,000
Pollution Control Series A, 5 7/8%, due March 1, 2004........................... 23,000 23,500
Pollution Control Series F, 7 3/8%, due November 1, 2009........................ 27,250 27,250
Pollution Control Series G, 5 5/8% - 5 7/8%, due April 1, 2008 - April 2, 2014.. 79,500 79,500
Pollution Control Series H, 5 1/2%, due June 1, 2012............................ 50,000 50,000
Secured Medium-Term Notes, Series A:
6.35% - 9.25%, due January 11, 1995 - October 30, 2002........................ 151,500 149,500
Unsecured promissory notes:
11.60% - 12.875%, retired May 1, 1995........................................... - 15,000
Unamortized premium............................................................... 24 43
Unamortized discount.............................................................. (4,568) (5,105)
Capital lease obligations, 6.68-14.65%, due in installments through May 31, 2025.. 53,567 17,093
--------- ---------
1,147,440 1,123,948
Cheyenne Light, Fuel and Power Company:
First Mortgage Bonds:
7 7/8% series, due April 1, 2003................................................ 4,000 4,000
7.50% series, due January 1, 2024............................................... 8,000 8,000
Industrial Development Revenue Bonds, 7.25%, due September 1, 2021.............. 7,000 7,000
PS Colorado Credit Corporation, Inc.:
Secured Medium-Term Notes, Series A:
5.75% - 6.03%, due November 24, 1997 - December 1, 1998......................... 80,000 -
1480 Welton, Inc.:
12.50% secured promissory note, due in installments through March 1, 1998......... - 5,480
13.25% secured promissory note, due in installments through October 1, 2016....... 31,814 32,083
Fuel Resources Development Co.:
Capital lease obligations, 7.09%, due in installments through March 1, 1995....... - 13
Natural Fuels Corporation:
Capital lease obligations, 4.21-11.11% , due in installments through
October 1, 2000.................................................................. 135 56
--------- ---------
1,278,389 1,180,580
Less: maturities due within one year............................................... 82,836 25,153
--------- ---------
$1,195,553 $1,155,427
========== =========
</TABLE>
49
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Substantially all properties of the Company and its subsidiaries, other
than expressly excepted property, are subject to the liens securing the
Company's First Mortgage Bonds and First Collateral Trust Bonds or the mortgage
bonds and notes of subsidiaries. Additionally, there is a second lien on the
electric property securing the Company's First Collateral Trust Bonds. The
Company's First Collateral Trust Bonds are additionally secured by an equal
amount of First Mortgage Bonds which bear no interest.
The aggregate annual maturities and sinking fund requirements during the
five years subsequent to December 31, 1995 are (in thousands of dollars):
<TABLE>
<CAPTION>
YEAR MATURITIES SINKING FUND REQUIREMENTS TOTAL
<S> <C> <C> <C>
1996 $ 82,836 $1,160 $ 83,996
1997 135,064 810 135,874
1998 77,270 560 77,830
1999 29,231 560 29,791
2000 1,659 560 2,219
</TABLE>
The Company and Cheyenne expect to satisfy substantially all of its
sinking fund obligations through the application of property additions.
7. NOTES PAYABLE AND COMMERCIAL PAPER
Information regarding notes payable and commercial paper
for the years ended December 31, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Notes payable to banks (weighted average interest rates of 6.12% at
December 31, 1995 and 6.34% at December 31, 1994)................... $ 45,800 $107,850
Commercial paper (weighted average interest rates of 6.21% at
December 31, 1995 and 6.22% at December 31, 1994)................... 242,250 216,950
-------- --------
$288,050 $324,800
======== ========
Maximum amount outstanding at any month-end during the period........ $329,475 $333,865
======== ========
Weighted average amount (based on the daily outstanding balance)
outstanding for the period (weighted average interest rates of
6.18% for the year ended December 31, 1995 and 4.58% for the year
ended December 31, 1994)............................................ $292,226 $273,015
======== ========
</TABLE>
8. BANK LINES OF CREDIT AND COMPENSATING BANK BALANCES
Arrangements by the Company and its subsidiaries for committed lines of
credit are maintained entirely by fee payments in lieu of compensating balances.
Arrangements for uncommitted lines of credit have no fee or compensating balance
requirements.
On November 17, 1995, the Company, PSCCC, and certain subsidiaries entered
into a new credit facility with several banks providing $300 million in
committed bank lines of credit. The credit facility, which is used primarily to
support the issuance of commercial paper by the Company and PSCCC, alternatively
provides for direct borrowings thereunder. Under the facility, which was
amended January 31, 1996, Cheyenne, 1480 Welton, Inc., Fuelco, e prime and PSRI
are provided access to the credit facility with direct borrowings guaranteed by
the Company. The facility expires November 17, 2000.
50
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Individual arrangements for uncommitted bank lines of credit totaled $100
million at December 31, 1995, of which all remained unused. The Company may
borrow under uncommitted preapproved lines of credit upon request; however, the
banks have no firm commitment to make such loans.
9. COMMITMENTS AND CONTINGENCIES
REGULATORY MATTERS
1995 Merger Rate Filings
In connection with the merger with SPS, on November 9, 1995 the Company
filed comprehensive proposals with the CPUC, the FERC and the WPSC to obtain
approval from such regulatory agencies. The CPUC proposal included, among other
things, implementing an electric rate moratorium for five years, allowing for
the sharing of earnings in excess of 12.5% return on equity (determined by
utilizing the combined operations of the electric, gas and steam departments) on
a 50/50 basis between shareholders and customers, retaining the Company's ECA,
GCA, and QFCCA mechanisms, implementing quality of service measures and
recovering costs incurred in connection with the merger (see Note 3). The
quality of service measures included in the CPUC proposal relate to the
following four areas: 1) customer complaints, 2) phone response time to customer
inquiries, 3) response time to customer-initiated gas odor complaints, and 4)
electric service availability. In the event that the Company does not meet the
proposed quality of service measures, earnings may be reduced by up to $4
million on an annual basis. Additionally, the proposed sharing of earnings in
excess of 12.5% return on equity would supersede the QFCCA earnings test
discussed below. The CPUC has scheduled hearings on this matter for July 1996.
The FERC and WPSC have not yet scheduled any proceedings related to the proposed
merger. However, during January 1996, the FERC issued a Notice of Inquiry
concerning its merger policy under the Federal Power Act to determine whether
the criteria and policies for evaluating mergers needs to be revised.
Electric and Gas Cost Adjustment Mechanisms
The Company's ECA was revised and a new QFCCA was implemented on December
1, 1993, along with the base rate changes resulting from the 1993 rate case.
Under the revised ECA, fuel used for generation and purchased energy costs from
utilities, QFs and IPPFs (excluding all purchased capacity costs) to serve
retail customers, are recoverable. Purchased capacity costs are recovered as a
component of base rates, except as described below. The ECA rate is revised
annually on October 1. Recovered energy costs are compared with actual costs on
a monthly basis and differences, including interest, are deferred. Under the
QFCCA, all purchased capacity costs from new QF projects, not reflected in base
rates, are recoverable similar to the ECA.
With respect to the QFCCA, the CPUC issued a final decision in January 1996
which required the following: 1) an earnings test be implemented with a 50/50
sharing between the ratepayers and shareholders of earnings in excess of 11%,
the Company's authorized rate of return on regulated common equity; 2) the
calculation will be based on the Company's electric department earnings only;
and 3) implementation will be on a prospective basis effective October 1, 1996,
utilizing a test period for the prior twelve months ended June 30, 1996, unless
superseded by a CPUC decision prior to the effective date. The Company intends
to address this issue in connection with the merger rate filing discussed above.
During 1994, the CPUC initiated proceedings for reviewing the justness and
reasonableness of GCA and ECA mechanisms used by gas and electric utilities
within its jurisdiction. On April 14, 1995, the CPUC issued a final order which
retained the GCA with no modifications and closed its investigation of the GCA
mechanism. With respect to the ECA, in compliance with an order issued by the
CPUC in March 1995, the Company completed a filing on September 1, 1995
requesting the CPUC to open a docket to investigate its ECA. The CPUC opened a
docket to review whether the ECA should be maintained in its present form,
altered or eliminated. On January 8, 1996, the CPUC combined this docket with
the merger docket discussed above.
51
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(COINTINUED)
The CPUC approved the recovery of certain energy efficiency credits from
retail jurisdiction customers through the DSMCA in June 1994. In December 1994,
the OCC filed an appeal of the CPUC's decision in the Denver District Court.
The Denver District Court approved the collection of these credits in June 1995,
subject to refund. Accordingly, effective July 1, 1995, the Company began
collection of the December 31, 1994 balance of unbilled revenue related to these
credits. To date, the Company has recognized approximately $9.6 million of
revenue related to these credits ($6.5 million unbilled). The Company believes
the CPUC's decision will be upheld, however, if the OCC is successful in its
appeal, the Company could be required to reverse these unbilled revenues and
refund to customers the amounts previously collected. It is expected that this
matter will be decided in early 1996 by the Denver District Court based on the
written pleadings submitted in October 1995.
Incentive Regulation and Demand Side Management
The CPUC's investigation into alternative annual revenue reconciliation
mechanisms and incentive mechanisms related to the Company's DSM programs was
completed in 1995. The major provisions of the final order, effective December
27, 1995, included: 1) not to proceed with any of the proposed mechanisms; 2)
to reduce the recovery period for certain costs of the Company's DSM programs
from seven to five years for expenditures made on or after January 1, 1995; 3)
not to establish DSM targets for 1997 and 1998; 4) not to adopt a penalty for
failure to achieve DSM targets; and 5) to approve the Company's proposal to
forego incentive payments for DSM programs.
Rate Cases
In November 1993, the CPUC issued its final written decision regarding the
Company's 1993 rate case, lowering the Company's annual base rate revenue
requirement by approximately $5.2 million (a $13.1 million electric revenue
decrease partially offset by a $7.1 million gas revenue increase and a $0.8
million steam revenue increase) with new rates effective December 1, 1993.
The Phase II proceedings of the 1993 rate case addressed cost allocation
issues and specific rate changes for the various customer classes based on the
results of the Phase I decision. The CPUC approved a settlement agreement
related to gas rates and the new gas rates were implemented effective October 1,
1995. A final decision on rehearing, reargument and reconsideration for the
Phase II proceedings related to electric rates was issued in February 1996 with
new rates expected to be effective in early 1996.
The Company filed a rate case with the FERC on December 29, 1995,
requesting a slight overall rate increase (less than 1%) from its wholesale
electric customers. This filing, among other things, requested approval for
recovery of OPEB costs under SFAS 106, postemployment benefit costs under SFAS
112 and new depreciation rates based on the Company's most recent depreciation
study.
Federal Energy Regulatory Commission
On March 29, 1995, the FERC issued a NOPR on Open Access Non-Discriminatory
Transmission Services by Public Utilities and Transmitting Utilities and a
supplemental NOPR on Recovery of Stranded Costs.
The rules proposed in the NOPR are intended to facilitate competition among
electric generators for sales to the bulk power supply market. If adopted, the
NOPR on open access transmission would require public utilities under the
Federal Power Act to provide open access to their transmission systems and would
establish guidelines for their doing so. A final rule would define the terms
under which independent power producers, neighboring utilities, and others could
gain access to a utility's transmission grid to deliver power to wholesale
customers, such as municipal distribution systems, rural electric cooperatives,
or other utilities. Under the NOPR, each public utility would also be required
to establish separate rates for its transmission and generation services for new
wholesale service, and to place transmission services, including ancillary
services, under the same tariffs that would be applicable to third-party users
for all of its new wholesale sales and purchases of energy.
52
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The supplemental NOPR on stranded costs provides a basis for recovery by
regulated public utilities of legitimate and verifiable stranded costs
associated with existing wholesale requirements customers and retail customers
who become unbundled wholesale transmission customers of the utility. The FERC
would provide public utilities a mechanism for recovery of stranded costs that
result from municipalization, former retail customers becoming wholesale
customers, or the loss of a wholesale customer. The FERC will consider allowing
recovery of stranded investment costs associated with retail wheeling only if a
state regulatory commission lacks the authority to consider that issue.
On June 26, 1995, the Company filed transmission tariffs with the FERC that
are intended to meet the comparability of service requirements as set out in the
NOPR ("PSCo Tariffs"). Concurrently with the comparability filing, e prime, a
non-regulated energy services subsidiary of the Company, filed a power marketer
application with the FERC. Subsequently on August 18, 1995, Cheyenne filed
transmission tariffs with the FERC that are intended to meet the NOPR
comparability of service requirements ("Cheyenne Tariffs"). In an order issued
on October 13, 1995, the FERC accepted the PSCo Tariffs and the Cheyenne
Tariffs, subject to modification based on the outcome of the NOPR proceeding,
effective as of August 25, 1995. It is anticipated that a final rule, which
could be modified from the current proposal, could take effect in 1996. The
FERC also set the rates in the PSCo Tariffs and Cheyenne Tariffs for hearing.
On January 24, 1996, e prime filed with the FERC an amended power marketer
application. On January 26, 1996, PSCo and Cheyenne filed revised tariffs
containing terms and conditions conforming to the FERC's pro forma tariffs as
set out in the NOPR.
ENVIRONMENTAL ISSUES
Overview
As described below, the Company has been or is currently involved with the
clean-up of contamination from certain hazardous substances. In all situations,
the Company is pursuing or intends to pursue insurance claims and believes it
will recover some portion of these costs through such claims. Additionally,
where applicable, the Company intends to pursue recovery from other potentially
responsible parties. To the extent such costs are not recovered, the Company
currently believes it is probable that such costs will be recovered through the
rate regulatory process. However, as part of its merger filings (see discussion
in "Regulatory Matters - 1995 Merger Rate Filings"), the Company has proposed
implementing an electric rate moratorium for five years, and if its regulatory
authorities accept this proposal, the likelihood of the recovery of such clean-
up costs through the regulatory process may be diminished. To the extent any
costs are not recovered through the options listed above, the Company would be
required to recognize an expense for such unrecoverable amounts.
Environmental Site Cleanup
Under the CERCLA, the EPA has identified, and a Phase II environmental
assessment has revealed, low level, widespread contamination from hazardous
substances at the Barter Metals Company properties located in central Denver.
For an estimated 30 years, the Company sold scrap metal and electrical equipment
to Barter for reprocessing. The Company has completed the cleanup of this site
which began in November 1992. The cost of such clean-up was approximately $9
million as of December 31, 1995. On January 3, 1996, in a lawsuit by the
Company against its insurance providers, the Denver District Court entered final
judgment in favor of the Company in the amount of $5.6 million for certain clean
up costs at Barter. One of the insurance providers has appealed the Court's
judgment to the Colorado Court of Appeals. The insurance provider has posted
supersedeas bonds in the amount of $9.7 million ($7.7 million attributable to
the Barter judgment). Previously, the Company has received certain insurance
settlement proceeds from other insurance providers for Barter and other
contaminated sites and a portion of those funds remains to be allocated to this
site by the trial court. In addition, the Company expects to recoup additional
expenditures by sale of the Barter property.
PCB presence was identified in the basement of an historic office building
located in downtown Denver. The Company was negotiating the future cleanup with
the current owners; however, on October 5, 1993, the owners filed a civil action
against the Company in Denver District Court. The action alleged that the
Company was responsible for the
53
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
PCB releases and additionally claimed other damages in unspecified amounts. On
August 8, 1994, the Denver District Court entered a judgment approving a $5.3
million offer of settlement between the Company and the building owners
resolving all claims between the Company and the building owners. In December
1995, complaints were filed by the Company against all applicable insurance
carriers in Denver District Court.
The Ramp Industries disposal facility, located in Denver, Colorado has been
designated by the EPA as a Superfund hazardous waste site pursuant to CERCLA
and, on November 29, 1995, the Company received from the EPA a Notice of
Potential Liability and Request for Information related to such site. The EPA
is conducting an investigation of the contamination at this site and is in the
process of identifying the nature and quantities of hazardous wastes delivered
to, processed and currently stored at the site by PRPs. The Company has
responded to the EPA's request. The estimated cost to investigate and remediate
site contamination is not available as the EPA is in the initial stages of its
investigation. At this time, the Company cannot estimate the amount, if any, of
its potential liability related to this matter.
In addition to these sites, the Company has identified several sites where
cleanup of hazardous substances may be required. While potential liability and
settlement costs are still under investigation and negotiation, the Company
believes that the resolution of these matters will not have a material effect on
its financial position, results of operations or cash flows. The Company fully
intends to pursue the recovery of all significant costs incurred for such
projects through insurance claims and/or the rate regulatory process.
Other Environmental Matters
Under the Clean Air Act Amendments of 1990, coal burning power plants are
required to reduce SO2 and NOx emissions to specified levels through a phased
approach. The Company is currently meeting Phase I emission standards placed on
SO2 through the use of low sulfur coal and the operation of pollution control
equipment on certain generation facilities. The Company will be required to
modify certain boilers by the year 2000 to reduce NOx emissions in order to
comply with Phase II requirements. The estimated costs for future plant
modifications total approximately $51.4 million. The Company is studying its
options to reduce SO2 emissions and currently does not anticipate that these
regulations will significantly impact its operations.
In April 1992, the Company acquired interests in the two generating units
at the Hayden Steam Electric Generating Station located near Hayden, Colorado.
The Company currently is the operator of the Hayden station and owns an
undivided interest in each of the two generating units at the station which in
total average approximately 53%.
On August 18, 1993, a conservation organization filed a complaint in the
U.S. District Court for the District of Colorado pursuant to Section 304 of the
Federal Clean Air Act, against the Company and the other joint owners of the
Hayden station. The plaintiff alleges that: 1) the station exceeded the 20%
opacity limitations in excess of 19,000 six minute intervals during the period
extending from the last quarter of 1988 through mid-1993 based on the data and
reports obtained from the station's COM's, which measure average emission stream
opacity in six minute intervals on a continuous basis, 2) the station was
operated for over two weeks in late 1992 without a functioning electrostatic
precipitator which constituted a modification of the station without the
requisite permit from the Colorado Department of Public Health and Environment,
and 3) the owners failed to operate the station in a manner consistent with good
air pollution control practices. The complaint seeks, among other things, civil
monetary penalties and injunctive relief. The joint owners of the station
contest all of these claims and contend that there were no violations of the
opacity limitation, because pursuant to the Colorado state implementation plan,
visual emissions are to be measured by qualified personnel using the EPA's
visual test known as Method 9 and not by any measurements from the station's
COMs as alleged by the plaintiff.
Discovery was completed and oral arguments on summary judgment motions were
heard in mid-May 1995. On July 21, 1995, the U.S. District Court entered
partial summary judgment on liability issues in favor of the plaintiff in
regards to the claims described in items 1) and 3) above and denied the
plaintiff's motion in regards to the claims described in item 2) above. On July
31, 1995, the joint owners filed a petition for an interlocutory appeal with the
10th
54
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Circuit Court of Appeals. On August 21, 1995, the joint owners' petition
for permission to appeal was denied. Subsequent to the denial of the joint
owners' petition, the U.S. District Court dismissed the plaintiffs claims
described in item 2) above. The joint owners are pursuing a settlement with the
conservation organization, the Colorado Department of Public Health and
Environment and the EPA. If settlement is not reached, court hearings for
injunctive relief, scheduled for May 1996, and the determination of penalties in
connection with the litigation, not yet scheduled, will be held. Further
appeals could be pursued by the joint owners if settlement is not achieved.
In December 1995, the conservation organization filed a motion for summary
judgment which would require the joint owners to come into compliance with the
opacity requirements identified in the August 1993 compliant within 60 days or
submit a plan for the installation of additional pollution control equipment.
On January 26, 1996, the joint owners and the conservation organization reached
an agreement providing for a stay of such litigation for 30 days to allow the
parties to concentrate their efforts on settlement. If settlement is not
achieved by the end of the stay, the Company cannot predict whether litigation
activities would resume, however, it anticipates that settlement discussions
would continue even if litigation activities did resume.
Additionally, the Company had received and responded to a request from the
EPA for information related to the plant and, on January 18, 1996, the EPA
issued a notice of violation stating the plant had exceeded the 20% opacity
limitations in excess of 10,000 additional six-minute intervals during the
period extending from mid-1993 to mid-1995. It is expected that the joint
owners will be able to resolve the issues related to this notice of violation as
part of the settlement discussions previously mentioned.
At this time, the Company is not able to estimate the amount, if any, of
its potential liability for penalties. The plaintiff has requested, among other
things, that the joint owners "pay to the EPA to finance air compliance and
enforcement activities, as provided for by 42 U.S.C. section 7604(g) (1), a
penalty of $25,000 per day for each of their violations of the Clean Air Act."
The statute provides for penalties of up to $25,000 per day per violation, but
the level of penalties imposed in any particular instance is discretionary. In
setting penalties in its own enforcement actions, the EPA relies, in part, on
such factors as the economic benefit of noncompliance, the actual or possible
harm of noncompliance, the size of the violator, the willfulness or negligence
of the violator and its degree of cooperation in resolving the matter. The
Company cannot predict the level of penalties, if any, or the remedies that the
court or the EPA may impose if settlement is not reached or if the joint owners
are unsuccessful in a subsequent appeal.
It is expected that additional pollution control equipment and practices
will be required at the station. The additional equipment and practices would
be designed to address particulate matter, SO2 and NOx emission concerns raised
by this litigation and by the Mt. Zirkel Wilderness Area Reasonable Attribution
Study, which is expected to be finalized during 1996. The Company is evaluating
the economic impact of adding such pollution control equipment and practices on
future plant operations.
The Company believes that, consistent with historical regulatory treatment,
any costs for pollution control equipment to comply with pollution control
regulations would be recovered from its customers. However, no assurance can be
given that this practice will continue in the future.
PURCHASE REQUIREMENTS
Coal purchases and transportation
At December 31, 1995, the Company had in place long-term contracts for the
purchase of coal through 2017. The minimum remaining quantities to be purchased
under these contracts total 86 million tons. The coal purchase prices are
subject to periodic adjustment for inflation and market conditions. Total
estimated obligations, based on current prices, were approximately $769 million
at December 31, 1995.
The Company has entered into long-term contracts for the transportation of
coal by railroad in Company-owned or leased railcars to existing power plants.
These agreements, expiring in 2000, provide for
55
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
a minimum remaining transport quantity of 21 million tons. Coal transport
contract prices are negotiated based on market conditions and are adjusted
periodically for inflation and operating factors. Total estimated obligations,
based on current prices, were approximately $50 million at December 31, 1995.
Natural gas purchases and transportation
The Company and Cheyenne have entered into long-term contracts for the
purchase, firm transportation and storage of natural gas. These contracts,
excluding the thirty year contract with Young Storage which has been accounted
for as a capital lease, expire on various dates through 2001. In compliance
with the rules established by FERC Order 636, the Company renegotiated contracts
during 1993 with its two primary gas pipeline suppliers and committed to
continue purchasing gas through 1996. The Company will not incur any gas supply
realignment costs otherwise applicable under FERC Order 636. At December 31,
1995, the Company and Cheyenne have minimum obligations under such contracts of
approximately $46 million in 1996 declining thereafter for a total estimated
commitment of approximately $97 million.
Purchased power
The Company and Cheyenne have entered into agreements with utilities and
QFs for purchased power to meet system load and energy requirements, replace
generation from Company-owned units under maintenance and outages, and meet the
Company's operating reserve obligation to the Pool.
The Company has various pay-for-performance contracts with QFs having
expiration dates through the year 2026. In general, these contracts provide for
capacity payments, subject to the QFs meeting certain contract obligations, and
energy payments based on actual power taken under the contracts. The capacity
and energy costs are recovered through base rates, the ECA and QFCCA.
Additionally, the Company and Cheyenne have long-term purchased power contracts
with various regional utilities expiring through 2018. In general, these
contracts provide for capacity and energy payments which approximate the cost of
the sellers. These costs have historically been recoverable through the ECA;
however, effective December 1, 1993, the Company's capacity costs were reflected
in base rates. Total capacity and energy payments associated with such
contracts were $445 million, $427 million, and $366 million in 1995, 1994 and
1993, respectively.
At December 31, 1995, the estimated future payments for capacity that the
Company and Cheyenne are obligated to purchase, subject to availability, are as
follows:
<TABLE>
<CAPTION>
REGIONAL
QFS UTILITIES TOTAL
---------- ---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
1996................. $ 144,019 $ 176,712 $ 320,731
1997................. 144,102 185,127 329,229
1998................. 143,818 186,733 330,551
1999................. 143,794 178,860 322,654
2000................. 141,878 168,372 310,250
2001 and thereafter.. 1,146,656 1,426,895 2,573,551
---------- ---------- ----------
Total.............. $1,864,267 $2,322,699 $4,186,966
========== ========== ==========
</TABLE>
Historically, all minimum coal, coal transportation, natural gas and
purchased power requirements have been met.
56
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Other purchases
Commitments made for the purchase of materials, plant and equipment
additions, DSM expenditures and other various items aggregated approximately
$599 million at December 31, 1995.
EMPLOYEE LITIGATION
Several employee lawsuites have been filed against the Company involving
alleged sexual/age/race/disability discrimination. The Company is actively
contesting all such lawsuits and believes the ultimate outcome will not have a
material impact on the Company's results of operations, financial position or
cash flow.
In one of the cases, certain employees terminated as part of the Company's
1991/1992 organizational analysis asserted breach of contract and promissory
estoppel with respect to job security and breach of the covenant of good faith
and fair dealing. Of the 21 actions filed, the trial court directed verdicts in
favor of the Company in 19 cases. Two cases went to a jury, which entered
verdicts adverse to the Company. All 21 decisions are currently on appeal, but
the Company believes its liability, if any, will not have a material impact on
the Company's results of operations, financial position or cash flow.
UNION CONTRACTS
In early December 1995, the Company's contracts with the International
Brotherhood of Electrical Workers, Local 111 expired. Previously, an arbitrator
had rejected the Company's attempt to cancel the contract. The parties have
been unable to reach agreement through the negotiation process and, as a result,
will enter binding arbitration on March 20, 1996, as required under the
provisions of the contracts. Contract provisions will be determined as part of
the binding arbitration process, including the length of the contract extension
and wages. In addition, the International Brotherhood of Electrical Workers,
Local 111 has filed a grievance relating to the employment of certain non-union
personnel to perform services for the Company, which matter is currently in
arbitration. Approximately 2,150 employees or 45% of the Company's total
workforce, are represented by Local 111.
LEASING PROGRAM
The Company and its subsidiaries lease various equipment and facilities used
in the normal course of business, some of which are accounted for as capital
leases. Expiration of the capital leases range from 1998 to 2025. The net book
value of property under capital leases was $53.7 million and $17.1 million at
December 31, 1995, and 1994, respectively. Assets acquired under capital leases
are recorded as property at the lower of fair-market value or the present value
of future lease payments, and are amortized over their actual contract term in
accordance with practices allowed by the CPUC. The related obligation is
classified as long-term debt. Executory costs are excluded from the minimum
lease payments.
The majority of the operating leases are under a leasing program that has
initial noncancellable terms of one year, while the remaining leases have
various terms. These leases may be renewed or replaced. No material restrictions
exist in these leasing agreements concerning dividends, additional debt, or
further leasing. Rental expense for 1995, 1994 and 1993 was $23.5 million, $29.7
million and $28.1 million, respectively.
57
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
Estimated future minimum lease payments at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
-------- ---------
<S> <C> <C>
(THOUSANDS OF DOLLARS)
1996............................................. $ 9,776 $ 19,953
1997............................................. 9,586 19,947
1998............................................. 9,379 19,053
1999............................................. 7,904 13,320
2000............................................. 5,096 11,643
All years thereafter............................. 86,212 22,041
-------- --------
Total future minimum lease payments.......... 127,953 $105,957
========
Less amounts representing interest........... 74,251
--------
Present value of net minimum lease payments.. $ 53,702
========
</TABLE>
The Company has in place a leasing program which includes a provision whereby
the Company indemnifies the lessor for all liabilities which might arise from
the acquisition, use, or disposition of the leased property.
FORT ST. VRAIN
See Note 2 for certain contingencies relating to Fort St. Vrain.
10. JOINTLY-OWNED ELECTRIC UTILITY PLANTS
The Company's investment in jointly-owned plants and its ownership percentages
as of December 31, 1995 is:
<TABLE>
<CAPTION>
PLANT CONSTRUCTION
IN ACCUMULATED WORK IN
SERVICE DEPRECIATION PROGRESS OWNERSHIP %
------- ------------ ------------ -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Hayden Unit 1................................... $ 37,846 $28,971 $ 702 75.50
Hayden Unit 2................................... 58,039 31,894 116 37.40
Hayden Common Facilities........................ 1,870 349 891 53.10
Craig Units 1 & 2............................... 57,057 22,426 627 9.72
Craig Common Facilities Units 1 & 2............. 7,702 2,957 775 9.72
Craig Common Facilities Units 1,2 & 3........... 8,383 3,159 387 6.47
Transmission Facilities, Including Substations.. 79,069 20,811 111 42.0-73.0
-------- -------- ------
$249,966 $110,567 $3,609
======== ======== ======
</TABLE>
These assets include approximately 320 Mw of net dependable generating
capacity. The Company is responsible for its proportionate share of operating
expenses (reflected in the consolidated statements of income) and construction
expenditures.
11. EMPLOYEE BENEFITS
PENSIONS
The Company and Cheyenne maintain a noncontributory defined benefit pension
plan covering substantially all employees.
58
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The net pension expense in 1995, 1994 and 1993 was comprised of:
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Service cost................................... $ 11,659 $ 16,169 $ 15,868
Interest cost on projected benefit obligation.. 46,570 45,518 38,106
Actual return on plan assets................... (123,531) 5,844 (52,369)
Amortization of net transition asset........... (3,674) (3,674) (3,674)
Other items.................................... 75,521 (56,996) 8,219
--------- -------- --------
Net pension expense........................... $ 6,545 $ 6,861 $ 6,150
========= ======== ========
</TABLE>
The pension plan was amended in 1994 (as discussed below) requiring the use
of two sets of assumptions in the calculation of the 1994 net periodic pension
cost. Significant assumptions used in determining net periodic pension cost
were:
<TABLE>
<CAPTION>
APR -DEC JAN - MAR
1995 1994 1994 1993
----- --------- ---------- -----
<S> <C> <C> <C> <C>
Discount rate................................................. 8.75% 8.0% 7.5% 8.2%
Expected long-term increase in compensation level............. 5.0% 5.0% 5.0% 5.5%
Expected weighted average long-term rate of return on assets.. 9.75% 10.5% 10.5% 11.0%
</TABLE>
Variances between actual experience and assumptions for costs and returns
on assets are amortized over the average remaining service lives of employees in
the plan.
A comparison of the actuarially computed benefit obligations and plan
assets at December 31, 1995 and 1994, is presented in the following table. Plan
assets are stated at fair value and are comprised primarily of corporate debt
and equity securities, a real estate fund and government securities held either
directly or in commingled funds. The Company and Cheyenne's funding policy is
to contribute annually, at a minimum, the amount necessary to satisfy the IRS
funding standards.
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested........................................ $523,539 $410,117
Nonvested..................................... 31,678 30,136
-------- --------
555,217 440,253
Effect of projected future salary increases....... 91,810 87,079
--------- ---------
Projected benefit obligation for service rendered
to date.......................................... 647,027 527,332
Plan assets at fair value......................... (588,314) (491,735)
--------- ---------
Projected benefit obligation in excess of plan
assets........................................... (58,713) (35,597)
Unrecognized net loss............................. 62,092 33,650
Prior service cost not yet recognized in net
periodic pension cost............................ 30,063 32,368
Unrecognized net transition asset at January 1,
1986, being recognized over 17 years............. (25,716) (29,390)
--------- ---------
Prepaid pension asset............................. $ 7,726 $ 1,031
========= =========
</TABLE>
Significant assumptions used in determining the benefit obligations at the
end of each respective year were:
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Discount rate..................................... 7.25% 8.75%
Expected long-term increase in compensation level.. 4.0% 5.0%
</TABLE>
On January 25, 1994, the Board of Directors approved an amendment to the
Plan which offered an incentive for early retirement for employees age 55 or
older with 20 years of service as well as a Severance Enhancement Program
("SEP") option for these same eligible employees for the period February 4, 1994
to April 1, 1994. The Plan amendment generally provided for the following
retirement enhancements: a) unreduced early
59
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
retirement benefits, b) three years of additional credited service, and c) a
supplement of either a one-time payment equal to $400 for each full year of
service to be paid from general corporate funds or a $250 social security
supplement each month up to age 62 to be paid by the Plan.
The SEP provided for: a) a one-time severance ranging from $20,000 -$90,000,
depending on an employee's organization level, b) a continuous years of service
bonus (up to 30 years), and c) a cash benefit of $10,000.
Approximately 550 employees elected to participate in the early
retirement/severance enhancement program, of which approximately 370 employees
elected the early retirement benefit. The total cost of the program was
approximately $39.7 million. These costs were deferred and, effective April 1,
1994, are being amortized to expense over approximately 4.5 years in accordance
with rate regulatory treatment. This amortization period represents the
participants' average remaining years of service to their expected retirement
date.
During 1993, the Board of Directors of the Company approved amendments that:
1) eliminated the minimum age of 21 for receiving credited service, 2) provided
for an automatic increase in monthly payments to a retired plan member in the
event the member's spouse or other contingent annuitant dies prior to the
member, and 3) provided for Average Final Compensation to be based on the
highest average of three consecutive years compensation. These plan changes
increased the projected benefit obligation by approximately $24.6 million.
INVOLUNTARY SEVERANCE PROGRAM
During 1994, in a continuing effort to lower operating costs, the Company
implemented an involuntary severance program which reduced management and staff
levels by approximately 550 employees. Approximately $10.7 million of
involuntary severance costs were accrued, of which $8.7 million reduced pre-tax
earnings.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company and Cheyenne provide certain health care and life insurance
benefits for retired employees. A significant portion of the employees become
eligible for these benefits if they reach either early or normal retirement age
while working for the Company or Cheyenne. Historically, the Company has
recorded the cost of these benefits on a pay-as-you-go basis, consistent with
the regulatory treatment. Effective January 1, 1993, the Company and Cheyenne
adopted SFAS 106 costs based on the level of expense determined in accordance
with the CPUC and WPSC. SFAS 106 requires the accrual, during the years that an
employee renders service to the Company, of the expected cost of providing
postretirement benefits other than pensions to the employee and the employee's
beneficiaries and covered dependents. The adoption of SFAS 106 did not have a
material impact on the Company's consolidated results of operations, financial
position or cash flow.
The Company is transitioning to full accrual accounting for OPEB costs
between January 1, 1993 and December 31, 1997, consistent with the accounting
requirements for rate regulated enterprises. All OPEB costs deferred during the
transition period will be amortized on a straight line basis over the subsequent
15 years. Effective December 1, 1993, the Company began recovering such costs as
provided in the Fort St. Vrain Supplemental Settlement Agreement. On January 13,
1995, the CPUC approved the 1994 revision to the Supplemental Settlement
Agreement, which accelerated the recovery of OPEB costs to comply with SFAS 106
and approved other changes to certain ratemaking principles. The change in
recovery was retroactive to January 1, 1994, and accordingly, resulted in an
increased OPEB expense for that year and subsequent years.
The Company filed a FERC rate case in December 1995 which included a request
for approval to recover all electric wholesale jurisdiction SFAS 106 costs.
Effective January 1, 1993, Cheyenne began recovering SFAS 106 costs as approved
by the WPSC. The Company and Cheyenne fund SFAS 106 costs in external trusts
based on the amounts reflected in cost-of-service, consistent with the
respective rate orders.
60
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The net periodic postretirement benefit cost in 1995, 1994 and 1993 under
SFAS 106 was comprised of:
<TABLE>
<CAPTION>
1995 1994 1993
--------- ---------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Service cost.............................................................................. $ 6,027 $ 6,101 $ 4,943
Interest cost on projected benefit obligation............................................. 24,761 24,111 20,828
Return on plan assets..................................................................... (2,578) (938) (164)
Amortization of net transition obligation at January 1, 1993
assuming a 20 year amortization period.................................................... 12,710 12,710 12,710
-------- -------- --------
Net postretirement benefit cost required by SFAS 106...................................... 40,920 41,984 38,317
OPEB expense recognized in accordance with current regulation............................. (30,893) (30,266) (12,462)
-------- -------- --------
Increase in regulatory asset (Note 1)..................................................... 10,027 11,718 25,855
Regulatory asset at beginning of year..................................................... 37,573 25,855 -
-------- -------- --------
Regulatory asset at end of year........................................................... $ 47,600 $ 37,573 $ 25,855
======== ======== ========
</TABLE>
Significant assumptions used in determining net periodic postretirement benefit
cost were:
<TABLE>
<CAPTION>
APR -DEC JAN - MAR
1995 1994 1994 1993
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Discount rate.......................................................................... 8.75% 8.0% 7.5% 8.2%
Expected long-term increase in compensation level...................................... 5.0% 5.0% 5.0% 5.5%
Expected weighted average long-term rate of return on assets........................... 9.75% 10.5% 10.5% 10.5%
</TABLE>
A comparison of the actuarially computed benefit obligations and plan
assets at December 31, 1995 and 1994 is presented in the following table. Plan
assets are stated at fair value and are comprised primarily of corporate debt
and equity securities, a real estate fund, government securities and other
short-term investments held either directly or in commingled funds.
<TABLE>
<CAPTION>
1995 1994
------------ --------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees and eligible beneficiaries............... $122,395 $95,382
Other fully eligible plan participants............ 93,161 71,683
Other active plan participants.................... 102,739 86,505
--------- --------
Total.............................. 318,295 253,570
Plan assets at fair value, excluding amounts
funded in a non-qualified trust, totaling $2.5
million at December 31, 1995...................... (38,623) (18,114)
--------- ---------
Accumulated benefit obligation in excess of
plan assets....................................... 279,672 235,456
Unrecognized net gain (loss)....................... (11,905) 35,423
Unrecognized transition obligation................. (216,063) (228,773)
--------- ---------
Accrued postretirement benefit obligation.......... $ 51,704 $ 42,106
========= =========
</TABLE>
Significant assumptions used in determining the accumulated postretirement
benefit obligation at the end of each respective year were:
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
Discount rate..................................... 7.25% 8.75%
Ultimate health care cost trend rate.............. 4.5% 6.0%
Expected long-term increase in compensation level. 4.0% 5.0%
</TABLE>
The assumed health care cost trend rate for 1996 is 9.5%, decreasing to 4.5%
in 2006 in 0.5% annual increments. A 1% increase in the assumed health care
cost trend will increase the estimated total accumulated benefit obligation by
$41.6 million, and the service and interest cost components of net periodic
postretirement benefit costs by $5.1 million.
61
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
POSTEMPLOYMENT BENEFITS
The Company and Cheyenne adopted SFAS 112 on January 1, 1994, the effective
date of the statement. SFAS 112 establishes the accounting standards for
employers who provide benefits to former or inactive employees after employment
but before retirement (postemployment benefits). At December 31, 1995 and 1994,
the Company had recorded a $23.5 million and $21.0 million regulatory asset
(see Note 1) and a corresponding liability on the consolidated balance sheet,
assuming a 7.25% and an 8.0% discount rate, respectively. The Company has
historically recorded these costs on a pay-as-you-go basis. The Company filed a
FERC rate case in December 1995 which included a request for recovery of all
electric wholesale jurisdiction SFAS 112 costs. The Company believes it is
probable that it will receive FERC and other regulatory approvals to recover
these costs in the future.
INCENTIVE COMPENSATION
The Omnibus Incentive Plan provides for annual and long-term incentive awards
for officers and management employees. One million shares of common stock have
been authorized for awards under the Plan as it allows for the issuance of
restricted shares and/or stock options. Cash, restricted stock and stock option
awards were made under the Omnibus Incentive Plan during 1995, 1994 and 1993.
The stock options are issued at the fair market value of the Company's common
stock at the date of issue and vest over a three-year period. During 1995, 1994
and 1993, 161,000, 149,700 and 58,544 options to purchase stock were granted
with weighted-average exercise prices of $30.29, $28.73 and $28.125,
respectively. During 1995, 267 options were exercised at a price of $29.00 per
share. There were no options exercised in 1994 or 1993. At December 31, 1995,
347,931 options were outstanding with a weighted-average exercise price of
$29.33 of which 125,931 shares were exercisable at a weighted-average exercise
price of $28.52. In the event the Company is subject to a change in control,
all stock-based awards, such as options and restricted shares, will vest 100%
and all performance awards will be paid out immediately in cash, as if the
performance objectives have been obtained through the effective date of the
change in control.
The Employee Incentive Plan provides for cash awards to all employees based on
the achievement of corporate goals. Certain performance goals were met in each
of the last three years.
The expenses accrued under the Omnibus Incentive Plan and the Employee
Incentive Plan totaled approximately $6.4 million in 1995, $6.0 million in 1994
and $5.2 million in 1993.
12. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying amounts and fair values of the
Company's significant financial instruments at December 31, 1995 and 1994. The
carrying amount of all other financial instruments approximates fair value.
SFAS 107 defines the fair value of a financial instrument as the amount at which
the instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale.
<TABLE>
<CAPTION>
1995 1994
-------------------- ----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
---------- ---------- ---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Investments, at cost............................. $ 10,083 $ 10,131 $ 7,308 $ 7,283
Preferred stock subject to mandatory redemption.. 43,865 45,184 45,241 45,518
Long-term debt................................... 1,229,231 1,307,128 1,168,480 1,119,391
</TABLE>
62
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
The fair value of the debt and equity securities included in Investments,
at cost is estimated based on quoted market prices for the same or similar
investments. The debt securities are classified as held-to-maturity and the
equity securities are classified as available-for-sale. The unrealized holding
gains and losses for these debt and equity securities are not significant.
The estimated fair values of preferred stock subject to mandatory
redemption and long-term debt are based on quoted market prices of the same or
similar instruments. Since the Company and Cheyenne are subject to regulation,
any gains or losses related to the difference between the carrying amount and
the fair value of these financial instruments would not be realized by the
Company's shareholders.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
In accordance with NRC decommissioning funding requirements for nuclear
power reactors, the Company has a $43 million irrevocable letter of credit which
bears a market interest rate. The NRC is the beneficiary of this letter of
credit. At December 31, 1995 and 1994, no amounts were outstanding under this
letter of credit. In general, such letter of credit may be exercised by the NRC
in the event the Company is in default of its performance obligations under the
decommissioning plan.
YGSC, a wholly-owned subsidiary, and the Company have guaranteed 50% of
amounts financed under a $32 million Credit Agreement among Young Gas and
various lending institutions entered into on June 27, 1995. This debt financing
is for the development, construction and operation of an underground natural gas
storage facility in northeastern Colorado.
CONCENTRATION OF CREDIT RISK - ACCOUNTS RECEIVABLE
No individual customer or group of customers engaged in similar activities
represents a material concentration of credit risk to the Company and its
subsidiaries.
13. INCOME TAXES
The provisions for income taxes for the years ended December 31, 1995, 1994
and 1993 consist of the following:
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Current income taxes:
Federal.............................. $58,728 $22,081 $34,684
State................................ 2,807 (2,016) (2,208)
------- ------- -------
Total current income taxes......... 61,535 20,065 32,476
------- ------- -------
Deferred income taxes:
Federal.............................. 38,006 31,042 27,929
State................................ 1,164 3,192 5,506
------- ------- -------
Total deferred income taxes........ 39,170 34,234 33,435
------- ------- -------
Investment tax credits - net............. (5,348) (5,799) (4,917)
------- ------- -------
Total provision for income taxes......... $95,357 $45,500 $60,994
======= ======= =======
</TABLE>
During 1994, as a result of a detailed analysis of the income tax accounts,
the Company recorded a decrease in its income tax liabilities, which served to
reduce Federal and state income tax expenses by approximately $21.3 million, or
34 cents per share. The detailed analysis was completed in conjunction with the
Company's implementation of the full normalization method of accounting for
income taxes as provided for in a rate order from the CPUC.
63
<PAGE>
NOTES TO CONSOLIDTED FINANCIAL STATEMENTS-(CONTINUED)
A reconciliation of the statutory U.S. income tax rates and the effective
tax rates follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------------- ---------------- ---------------
(THOUSAND OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Tax computed at U.S. statutory rate on
pre-tax accounting income................. $95,975 35.0% $ 76,569 35.0% $76,424 35.0%
Increase (decrease) in tax from:
Allowance for funds used
during construction....................... (2,495) (0.9) (2,449) (1.1) (4,369) (2.0)
Amortization of investment tax credits...... (5,348) (1.9) (5,792) (2.6) (4,889) (2.2)
Cash surrender value of life
insurance policies........................ (9,546) (3.5) (7,643) (3.5) (6,386) (2.9)
Capitalized software, net of amortization... - - - - (4,820) (2.2)
Capitalized overheads....................... - - - - 7,170 3.3
Lease amortization.......................... - - - - 3,692 1.7
Amortization of prior flow-through amounts.. 10,509 3.8 10,509 4.8 934 0.4
Adoption of SFAS 109........................ - - - - (1,911) (0.9)
Tax accrual adjustment...................... - - (21,262) (9.7) - -
Other-net................................... 6,262 2.3 (1,432) (0.7) (4,851) (2.2)
------- ---- -------- ---- ------- ----
Total income taxes........................ $95,357 34.8% $ 48,500 22.2% $60,994 28.0%
======= ==== ======== ==== ======= ====
</TABLE>
The Company and its subsidiaries adopted SFAS 109 on January 1, 1993. The
impact of adoption was not material to the consolidated results of operations
and, therefore, was not reflected as the cumulative effect of a change in
accounting principle.
The Company and its regulated subsidiaries have historically provided for
deferred income taxes to the extent allowed by their regulatory agencies whereby
deferred taxes were not provided on all differences between financial statement
and taxable income (the flow-through method). To give effect to temporary
differences for which deferred taxes were not previously required to be
provided, a regulatory asset was recognized. The regulatory asset represents
temporary differences primarily associated with prior flow-through amounts and
the equity component of allowance for funds used during construction, net of
temporary differences related to unamortized investment tax credits and excess
deferred income taxes that have resulted from historical reductions in tax rates
(see Note 1).
Effective December 1, 1993, pursuant to a CPUC order, the Company adopted
full income tax normalization for rate regulatory purposes with the regulatory
tax asset being recovered over a thirteen year period. Effective January 1,
1993, Cheyenne began recovering SFAS 109 costs as approved by the WPSC.
The tax effects of significant temporary differences representing deferred
tax liabilities and assets as of December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Deferred income tax liabilities:
Accelerated depreciation and amortization............ $376,468 $332,222
Plant basis differences (prior flow-through)......... 152,631 188,194
Allowance for equity funds used during construction.. 50,411 49,824
Pensions............................................. 36,583 35,975
Other................................................ 50,760 41,792
-------- --------
Total............................................... 666,853 648,007
Deferred income tax assets:
Investment tax credits............................... 69,751 73,270
Contributions in aid of construction................. 55,654 47,832
Other................................................ 52,534 61,946
-------- --------
Total............................................... 177,939 183,048
-------- --------
Net deferred income tax liability.................... $488,914 $464,959
======== ========
</TABLE>
As of December 31, 1995, the Company has cumulative AMT carryforwards of
approximately $5.3 million and state tax credit carryforwards of approximately
$2.3 million. A valuation allowance has not been recorded as the Company
expects that all deferred income tax assets will be realized in the future.
64
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
14. SEGMENTS OF BUSINESS
<TABLE>
<CAPTION>
1995 ELECTRIC GAS OTHER TOTAL
--------- ---------- -------- ------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C>
Operating revenues.......................... $1,449,096 $624,585 $36,920 $2,110,601
---------- -------- ------- ----------
Operating expenses, excluding depreciation
and income taxes.......................... 1,005,432 539,636 7,046 1,552,114
Depreciation and amortization............... 109,498 29,901 1,981 141,380
---------- -------- ------- ----------
Total operating expenses*................... 1,114,930 569,537 9,027 1,693,494
---------- -------- ------- ----------
Operating income*........................... 334,166 55,048 27,893 417,107
========== ======== ======= ==========
Plant construction expenditures**........... 198,341 86,482 693 285,516
========== ======== ======= ==========
Identifiable assets:
Property, plant and equipment**........... 2,645,045 777,420 58,247 3,480,712
Materials and supplies.................... 47,636 8,886 3 56,525
Fuel inventory............................ 35,509 - 145 35,654
Gas in underground storage................ - 44,900 - 44,900
Other corporate assets.................... 736,504
----------
$4,354,295
==========
1994
-----------
Operating revenues......................... $1,399,836 $624,922 $32,626 $2,057,384
---------- -------- ------- ----------
Operating expenses, excluding depreciation
and income taxes (1)...................... 1,032,396 558,929 7,732 1,599,057
Depreciation and amortization............... 107,769 29,078 2,188 139,035
---------- -------- ------- ----------
Total operating expenses*................. 1,140,165 588,007 9,920 1,738,092
---------- -------- ------- ----------
Operating income*........................... 259,671 36,915 22,706 319,292
========== ======== ======= ==========
Plant construction expenditures**........... 223,773 91,492 1,873 317,138
========== ======== ======= ==========
Identifiable assets:
Property, plant and equipment**............ 2,543,267 674,974 73,161 3,291,402
Materials and supplies.................... 55,756 11,782 62 67,600
Fuel inventory............................ 31,225 - 145 31,370
Gas in underground storage................ - 42,355 - 42,355
Other corporate assets.................... 775,105
----------
$4,207,832
==========
1993
---------
Operating revenues......................... $1,337,053 $628,324 $33,308 $1,998,685
---------- -------- ------- ----------
Operating expenses, excluding depreciation
and income taxes.......................... 953,049 560,593 2,312 1,515,954
Depreciation and amortization............... 109,958 28,305 2,541 140,804
---------- -------- ------- ----------
Total operating expenses*................. 1,063,007 588,898 4,853 1,656,758
---------- -------- ------- ----------
Operating income*........................... 274,046 39,426 28,455 341,927
========== ======== ======= ==========
Plant construction expenditures**........... 205,153 86,867 1,495 293,515
========== ======== ======= ==========
Identifiable assets:
Property, plant and equipment**............ 2,413,585 695,456 84,100 3,193,141
Materials and supplies.................... 64,674 12,993 65 77,732
Fuel inventory............................ 35,337 - 147 35,484
Gas in underground storage................ - 41,130 - 41,130
Other corporate assets.................... 710,113
----------
$4,057,600
==========
</TABLE>
(1) Includes additional expense of approximately $43.4 million for defueling
and decommissioning.
* Before income taxes.
** Includes allocation of common utility property.
65
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
15. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following summarized quarterly information for 1995 and 1994 is
unaudited, but includes all adjustments (consisting only of normal recurring
accruals) which the Company considers necessary for a fair presentation of the
results for the periods. Information for any one quarterly period is not
necessarily indicative of the results which may be expected for a twelve-month
period due to seasonal and other factors.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- --------------- ------------------- -----------
1995 (IN THOUSANDS-EXCEPT PER SHARE DATA)
--------
<S> <C> <C> <C> <C>
Operating revenues.......................... $620,596 $498,699 $468,453 $522,853
Operating income............................ $ 91,689 $ 62,634 $ 81,069 $ 86,358
Net income.................................. $ 53,644 $ 28,255 $ 45,819 $ 51,138
Earnings available for common stock......... $ 50,643 $ 25,255 $ 42,828 $ 48,167
Weighted average common shares outstanding.. 62,513 62,846 63,077 63,291
Earnings per weighted average common share.. $ 0.81 $ 0.40 $ 0.68 $ 0.76
1994
--------
Operating revenues.......................... $612,436 $477,563 $431,954 $535,431
Operating income............................ $ 78,430 $ 58,027 $ 47,601 $ 86,734
Net income.................................. $ 46,529 $ 23,875 $ 49,054 $ 50,811
Earnings available for common stock......... $ 43,524 $ 20,870 $ 46,051 $ 47,810
Weighted average common shares outstanding.. 60,919 61,425 61,779 62,064
Earnings per weighted average common share.. $ 0.71 $ 0.34 $ 0.75 $ 0.77
</TABLE>
66
<PAGE>
SCHEDULE II
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
ADDITIONS
-----------------------
BALANCE AT CHARGED CHARGED TO DEDUCTIONS BALANCE
BEGINNING TO OTHER FROM AT END
OF PERIOD INCOME ACCOUNTS(1) RESERVES(2) OF YEAR
---------- --------- ------------- ------------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Reserve deducted from related assets:
Provision for uncollectible accounts:
1995................................. $3,173 $7,815 $ 4 $7,362 $3,630
========== ========= ========== ========== =======
1994................................. $3,276 $8,533 $132 $8,768 $3,173
========== ========= ========== ========== =======
1993................................. $3,388 $6,878 $ 13 $7,003 $3,276
========== ========= ========== ========== =======
</TABLE>
- -----------------
(1) Uncollectible accounts subsequently recovered, transfers from customers'
deposit, etc.
(2) Uncollectible accounts written off.
67
<PAGE>
EXHIBIT 12(A)
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS
TO CONSOLIDATED FIXED CHARGES
(NOT COVERED BY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(THOUSANDS OF DOLLARS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C>
FIXED CHARGES:
Interest on long-term debt.............................. $ 85,832 $ 89,005 $ 98,089 $ 92,581 $ 81,666
Interest on borrowings against COLI contracts........... 34,717 29,786 25,333 18,312 8,144
Other interest.......................................... 23,392 14,235 9,445 12,357 14,574
Amortization of debt discount and expense less premium.. 3,278 3,126 2,018 1,790 1,827
Interest component of rental expense.................... 6,729 6,888 6,824 7,904 6,892
-------- -------- -------- -------- --------
Total............................................... $153,948 $143,040 $141,709 $132,944 $113,103
======== ======== ======== ======== ========
EARNINGS (BEFORE FIXED CHARGES AND TAXES ON INCOME):
Net income.............................................. $178,856 $170,269 $157,360 $136,623 $149,693
Fixed charges as above.................................. 153,948 143,040 141,709 132,944 113,103
Provisions for Federal and state taxes on income,
net of investment tax credit amortization............. 95,357 48,500 60,994 53,149 69,288
-------- -------- -------- -------- --------
Total............................................... $428,161 $361,809 $360,063 $322,716 $332,084
======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES......................... 2.78 2.53 2.54 2.43 2.94
======== ======== ======== ======== ========
</TABLE>
68
<PAGE>
EXHIBIT 12(B)
PUBLIC SERVICE COMPANY OF COLORADO
AND SUBSIDIARIES
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS
TO CONSOLIDATED COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(NOT COVERED BY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(Thousand of Dollars, except ratios)
<S> <C> <C> <C> <C> <C>
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS:
Interest on long-term debt.............................. $ 85,832 $ 89,005 $ 98,089 $ 92,581 $ 81,666
Interest on borrowings against COLI contracts........... 34,717 29,786 25,333 18,312 8,144
Other interest.......................................... 23,392 14,235 9,445 12,357 14,574
Amortization of debt discount and expense less premium.. 3,278 3,126 2,018 1,790 1,827
Interest component of rental expense.................... 6,729 6,888 6,824 7,904 6,892
Preferred stock dividend requirement.................... 11,963 12,014 12,031 12,077 12,234
Additional preferred stock dividend requirement......... 6,377 3,422 4,662 4,699 5,662
-------- -------- -------- -------- --------
Total................................................. $172,288 $158,476 $158,402 $149,720 $130,999
======== ======== ======== ======== ========
EARNINGS (BEFORE FIXED CHARGES AND TAXES ON INCOME):
Net income.............................................. $178,856 $170,269 $157,360 $136,623 $149,693
Interest on long-term debt.............................. 85,832 89,005 98,089 92,581 81,666
Interest on borrowings against COLI contracts........... 34,717 29,786 25,333 18,312 8,144
Other interest.......................................... 23,392 14,235 9,445 12,357 14,574
Amortization of debt discount and expense less premium.. 3,278 3,126 2,018 1,790 1,827
Interest component of rental expense.................... 6,729 6,888 6,824 7,904 6,892
Provisions for Federal and state taxes on income,
net of investment tax credit amortization.............. 95,357 48,500 60,994 53,149 69,288
-------- -------- -------- -------- --------
Total................................................. $428,161 $361,809 $360,063 $322,716 $332,084
======== ======== ======== ======== ========
RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS......................... 2.49 2.28 2.27 2.16 2.54
======== ======== ======== ======== ========
</TABLE>
69
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Does not apply.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning the directors of the registrant is contained under
Election Of Directors in the registrant's 1996 Proxy Statement, which
information is incorporated herein by reference.
Executive Officers (at December 31, 1995 except as noted):
<TABLE>
<CAPTION>
Executive Officers Initial Effective Date
- ------------------ ----------------------
<S> <C>
D. D. Hock, Age 60 *
Chairman of the Board................................................ February 28, 1989
and Chief Executive Officer......................................... October 1, 1988
Chairman of the Board, Cheyenne Light, Fuel and Power Company........ September 21, 1988
Chairman of the Board, Fuel Resources Development Co................. March 22, 1989
Chairman of the Board, 1480 Welton, Inc.............................. September 26, 1988
President, 1480 Welton, Inc.......................................... March 22, 1990
Chairman of the Board and President, PSR Investments, Inc............ March 22, 1990
Chairman of the Board and President, PS Colorado Credit Corporation.. March 22, 1990
Chairman of the Board, Green and Clear Lakes Company................. December 6, 1988
Chairman of the Board, WestGas InterState, Inc....................... April 22, 1993
Chairman of the Board, Natural Fuels Corporation..................... June 11, 1993
President, Natural Fuels Corporation................................. November 5, 1993
Chairman of the Board, e prime, inc.................................. January 30, 1995
Chairman of the Board, Young Gas Storage Company..................... June 27, 1995
Company Service: September, 1962
Wayne H. Brunetti, Age 53 *
President and Chief Operating Officer................................ June 28, 1994
President, Young Gas Storage Company................................. June 27, 1995
President, WestGas InterState, Inc................................... April 19, 1995
President, Fuel Resources Development Co............................. April 27, 1995
President, Green and Clear Lakes Company............................. December 5, 1995
Company Service: June, 1994
Richard C. Kelly, Age 49
Senior Vice President, Finance, Treasurer............................ June 28, 1994
and Chief Financial Officer......................................... January 23,1990
Vice President, Fuel Resources Development Co........................ April 26, 1990
Treasurer, Fuel Resources Development Co............................. August 5, 1994
Vice President, PSR Investments, Inc................................. September 22, 1986
Vice President, PS Colorado Credit Corporation....................... March 30, 1987
Treasurer, Cheyenne Light, Fuel and Power Company.................... July 15, 1994
Treasurer, 1480 Welton, Inc.......................................... July 15, 1994
Treasurer, Green and Clear Lakes Company............................. July 15, 1994
Treasurer, WestGas Interstate, Inc................................... July 15, 1994
</TABLE>
70
<PAGE>
<TABLE>
<S> <C>
Vice President and Treasurer, e prime, inc............................ January 30, 1995
Vice President and Treasurer, Young Gas Storage Company.............. June 27, 1995
Company Service: May, 1968
Patricia T. Smith, Age 48
Senior Vice President and General Counsel............................ December 5, 1994
Company Service: December, 1994
W. Wayne Brown, Age 45
Controller........................................................... November 24, 1987
Corporate Secretary.................................................. November 23, 1993
Secretary, Cheyenne Light, Fuel and Power Company.................... December 15, 1993
Secretary, 1480 Welton, Inc.......................................... December 16, 1993
Secretary, PSR Investments, Inc...................................... December 16, 1993
Secretary, PS Colorado Credit Corporation............................ December 16, 1993
Secretary, Green and Clear Lakes Company............................. December 7, 1993
Secretary, Fuel Resources Development Co............................. January 27, 1994
Secretary, WestGas InterState, Inc................................... May 2, 1994
Secretary, e prime, inc.............................................. January 30, 1995
Secretary, Young Gas Storage Company................................. June 27, 1995
Company Service: June, 1972
A. Clegg Crawford, Age 63
Vice President, Engineering and Operations Support................... June 28, 1994
Company Service: May, 1989
Ross C. King, Age 54
Vice President, Gas and Electric Distribution........................ June 28, 1994
President, Cheyenne Light, Fuel and Power Company.................... July 15, 1994
Company Service: February, 1966
Earl E. McLaughlin, Jr., Age 55
Vice President, Retail Energy Services............................... June 28, 1994
Vice President, Cheyenne Light, Fuel and Power Company............... March 24, 1994
Company Service: August, 1960
Ralph Sargent III, Age 46
Vice President, Production and System Operations..................... June 28, 1994
Company Service: July, 1978
Marilyn E. Taylor, Age 53
Vice President, Human Resources...................................... June 28, 1994
Company Service: December, 1987
</TABLE>
* On December 19, 1995, the Company announced that D. D. Hock would step
down as Chief Executive Officer ("CEO"), effective January 1, 1996, but would
remain as Chairman of the Board. Wayne H. Brunetti was elected by the board of
directors to succeed Mr. Hock as CEO, effective January 1, 1996.
Each of the above executive officers, except Mr. Brunetti and Ms. Smith,
has been employed by the Company and/or its subsidiaries for more than five
years in executive or management positions. Prior to election to the positions
shown above and since January 1, 1991:
71
<PAGE>
Mr. Hock has been Chief Operating Officer and President;
Mr. Brunetti has been President and Chief Executive Officer of Management
Systems International from June 1991 through July 1994 and Executive Vice
President of Florida Power & Light Company from 1987 through May 1991;
Mr. Kelly has been Vice President, Financial Services, Principal Accounting
Officer and Senior Vice President, Finance and Administration;
Ms. Smith has been Vice President and General Counsel for South Carolina
Electric and Gas Company from May 1992 through December 1994 and Vice President,
Regulatory Affairs and Purchasing from 1988 through May 1992;
Mr. Crawford has been Vice President, Nuclear Operations and Vice President,
Electric Production;
Mr. King has been Manager, Denver Metro Region; Vice President, Regional
Customer Operations and Vice President, Metropolitan Customer Operations;
Mr. McLaughlin has been Vice President, Marketing, Customer Services and Support
Services;
Mr. Sargent has been Executive Assistant to Chairman, President and Chief
Executive Officer and Vice President, Finance, Planning and Communications and
Treasurer;
Ms. Taylor has been Vice President, Human Resources and Vice President
Administrative Services.
There are no family relationships between executive officers or directors
of the Company. There are no arrangements or understandings between the
executive officers individually and any other person with reference to their
being selected as officers. All executive officers are elected annually by the
Board of Directors.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning executive compensation is contained under
Compensation Of Executive Officers And Directors in the registrant's 1996 Proxy
Statement, which information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning the security ownership of the directors and officers
of the registrant is contained under Election Of Directors in the registrant's
1996 Proxy Statement, which information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning relationships and related transactions of the
directors and officers of the registrant is contained under Certain
Relationships And Related Transactions in the registrant's 1996 Proxy Statement,
which information is incorporated herein by reference.
72
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules, and Exhibits.
Page
----
1. Financial Statements:
Report of Independent Public Accountants.............................. 33
Consolidated Balance Sheets, December 31, 1995 and 1994............... 34
Consolidated Statements of Income for each of the three
years in the period ended December 31, 1995...................... 36
Consolidated Statements of Shareholders' Equity for each
of the three years in the period ended December 31, 1995......... 37
Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1995...................... 38
Notes to Consolidated Financial Statements............................ 39
2. Financial Statement Schedules:
II Valuation and Qualifying Accounts and Reserves
(Consolidated) for each of the three years in the period
ended December 31, 1995.......................................... 67
All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the consolidated
financial statements or the notes thereto.
Financial statements of several unconsolidated majority-owned subsidiaries
are omitted since such subsidiaries, considered in the aggregate as a single
subsidiary, would not constitute a significant subsidiary.
3. Exhibits:
Exhibits are listed in the Exhibit Index.............................. 79
The Exhibits include the management contracts and compensatory plans or
arrangements required to be filed as exhibits to this Form 10-K by Item 601 (10)
(iii) of Regulation S-K.
(b) Reports on Form 8-K:
A report on Form 8-K, dated August 22, 1995, was filed on August 23, 1995.
The item reported was Item 5 - Other Events, which presented information on: 1)
the Merger Agreement dated August 22, 1995, by and among the Company, SPS and
NCE (formerly M-P New Co.), a newly formed Delaware corporation, to serve as the
holding company, 2) a joint press release announcing the proposed merger, and 3)
an amendment, dated August 22, 1995 to the Rights Agreement dated as of February
26, 1991 between Public Service Company of Colorado and Mellon Bank, N.A.
A report on Form 8-K, dated December 19, 1995, was filed on December 20,
1995. The item reported was Item 5 - Other Events, announcing that effective
January 1, 1996, D. D. Hock, Chairman and Chief Executive Officer (CEO) of
Public Service Company of Colorado would step down from the CEO position but
73
<PAGE>
would remain as Chairman of the Board. Wayne H. Brunetti was elected by the
board of directors to succeed Mr. Hock as CEO, effective January 1, 1996.
A report on Form 8-K, dated January 18, 1996, was filed on January 29,
1996. The item reported was Item 5 - Other Events, which presented updated
information related to litigation, a notice of violation issued by the EPA and
environmental matters associated with the operations of the Hayden Steam
Electric Generating Station.
A report on Form 8-K, dated January 31, 1996, was filed on February 1, 1996.
The item reported was Item 5 - Other Events, which reported that on January 31,
1996, at separate meetings of shareholders, the holders of Company Common Stock,
Company Preferred Stock, and SPS Common Stock approved the Merger Agreement.
74
<PAGE>
EXPERTS
The consolidated balance sheets of the Company and its subsidiaries as of
December 31, 1995 and 1994, the related consolidated statements of income,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1995, and the related financial statement schedule, appearing
in this Annual Report on Form 10-K, have been audited by Arthur Andersen LLP,
independent public accountants, and the selected financial data for each of the
five years in the period ended December 31, 1995, appearing in Item 6 of this
Annual Report on Form 10-K, other than the ratios and percentages therein, have
been derived from the consolidated financial statements audited by Arthur
Andersen LLP, as set forth in their report appearing elsewhere herein. The
consolidated financial statements, the related financial statement schedule and
the selected financial data appearing in Item 6 other than the ratios and
percentages therein, which are included in this Annual Report on Form 10-K, are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
75
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our report included in this Form 10-K, into the Company's
previously filed Registration Statement (Form S-3, File No. 33-62233) pertaining
to the Automatic Dividend Reinvestment and Common Stock Purchase Plan; the
Company's Registration Statement (Form S-3, File No. 33-37431), as amended on
December 4, 1990, pertaining to the shelf registration of the Company's First
Mortgage Bonds; the Company's Registration Statement (Form S-8, File No. 33-
55432) pertaining to the Omnibus Incentive Plan; the Company's Registration
Statement (Form S-3, File No. 33-51167) pertaining to the shelf registration of
the Company's First Collateral Trust Bonds and the Company's Registration
Statement (Form S-3, File No. 33-54877) pertaining to the shelf registration of
the Company's First Collateral Trust Bonds and Cumulative Preferred Stock and to
all references to our Firm included in this Form 10-K.
ARTHUR ANDERSEN LLP
Denver, Colorado
February 27, 1996
EXHIBIT 24
POWER OF ATTORNEY
Each director and/or officer of Public Service Company of Colorado whose
signature appears herein hereby appoints W. H. Brunetti and R. C. Kelly, and
each of them severally, as his or her attorney-in-fact to sign in his or her
name and behalf, in any and all capacities stated herein, and to file with the
Securities and Exchange Commission, any and all amendments to this Annual Report
on Form 10-K.
76
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, PUBLIC SERVICE COMPANY OF COLORADO HAS DULY CAUSED THIS
REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED
ON THE 27TH DAY OF FEBRUARY, 1996.
PUBLIC SERVICE COMPANY OF COLORADO
By /s/ R. C. Kelly
_________________________________
R. C. KELLY
Senior Vice President,
Finance, Treasurer and
Chief Financial Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF PUBLIC
SERVICE COMPANY OF COLORADO AND IN THE CAPACITIES AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
________________________________________________________________________________
/s/ W. H. Brunetti
__________________________________ Principal Executive February 27, 1996
W. H. Brunetti Officer and Director
President and Chief Executive
Officer
/s/ R. C. Kelly
__________________________________ Principal Financial February 27,1996
R. C. Kelly Officer
Senior Vice President,
Finance, Treasurer and
Chief Financial Officer
/s/ W. Wayne Brown
__________________________________ Principal Accounting February 27,1996
W. Wayne Brown Officer
Controller and Corporate Secretary
77
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
________________________________________________________________________________
/s/ D. D. Hock
__________________________________ Chairman of the Board February 27, 1996
Delwin D. Hock and Director
/s/ Collis P. Chandler
__________________________________ Director February 27, 1996
Collis P. Chandler
/s/ Doris M. Drury
__________________________________ Director February 27, 1996
Doris M. Drury
/s/ Thomas T. Farley
__________________________________ Director February 27, 1996
Thomas T. Farley
/s/ Gayle L. Greer
__________________________________ Director February 27, 1996
Gayle L. Greer
/s/ A. Barry Hirschfeld
__________________________________ Director February 27, 1996
A. Barry Hirschfeld
/s/ George B. McKinley
__________________________________ Director February 27, 1996
George B. McKinley
__________________________________ Director February 27, 1996
Will F. Nicholson, Jr.
/s/ J. Michael Powers
__________________________________ Director February 27, 1996
J. Michael Powers
/s/ Thomas E. Rodriguez
__________________________________ Director February 27, 1996
Thomas E. Rodriguez
__________________________________ Director February 27, 1996
Rodney E. Slifer
/s/ W. Thomas Stephens
__________________________________ Director February 27, 1996
W. Thomas Stephens
__________________________________ Director February 27, 1996
Robert G. Tointon
</TABLE>
78
<PAGE>
EXHIBIT INDEX
2(a)* Merger Agreement and Plan of Reorganization dated August 22, 1995
(Form 8-K dated August 22, 1995, File No. 1-3280 - Exhibit 2).
3(a)1* Restated Articles of Incorporation of the Registrant dated July 9,
1990 (Form S-3, File No. 33-54877 - Exhibit 3(a)).
3(a)2* Articles of Amendment of the Restated Articles of Incorporation of
the Registrant dated May 11, 1994 (Form S-3, File No. 33-54877 -
Exhibit 3(b)).
3(b)* By-laws dated November 30, 1992 (Form 10-K, 1993 - Exhibit 3(b)).
4(a)(1)* Indenture, dated as of December 1, 1939, providing for the issuance
of First Mortgage Bonds (Form 10 for 1946- Exhibit (B-1)).
4(a)(2)* Indentures supplemental to Indenture dated as of December 1, 1939:
<TABLE>
<CAPTION>
PREVIOUS FILING: PREVIOUS FILING:
FORM; DATE OR EXHIBIT FORM; DATE OR EXHIBIT
DATED AS OF FILE NO. NO. DATED AS OF FILE NO. NO.
- ------------------------ ----------------- ------------ ------------- -------------------- -----------
<S> <C> <C> <C> <C> <C>
Mar. 14, 1941 10, 1946 B-2 July 1, 1968 8-K, July 1968 2
May 14, 1941 10, 1946 B-3 Apr. 25, 1969 8-K, Apr. 1969 1
Apr. 28, 1942 10, 1946 B-4 Apr. 21, 1970 8-K, Apr. 1970 1
Apr. 14, 1943 10, 1946 B-5 Sept. 1, 1970 8-K, Sept. 1970 2
Apr. 27, 1944 10, 1946 B-6 Feb. 1, 1971 8-K, Feb. 1971 2
Apr. 18, 1945 10, 1946 B-7 Aug. 1, 1972 8-K, Aug. 1972 2
Apr. 23, 1946 10-K, 1946 B-8 June 1, 1973 8-K, June 1973 1
Apr. 9, 1947 10-K, 1946 B-9 Mar. 1, 1974 8-K, Apr. 1974 2
June 1, 1947 S-1, (2-7075) 7(b) Dec. 1, 1974 8-K, Dec. 1974 1
Apr. 1, 1948 S-1, (2-7671) 7(b)(1) Oct. 1, 1975 S-7, (2-60082) 2(b)(3)
May 20, 1948 S-1, (2-7671) 7(b)(2) Apr. 28, 1976 S-7, (2-60082) 2(b)(4)
Oct. 1, 1948 10-K, 1948 4 Apr. 28, 1977 S-7, (2-60082) 2(b)(5)
Apr. 20, 1949 10-K, 1949 1 Nov. 1, 1977 S-7, (2-62415) 2(b)(3)
Apr. 24, 1950 8-K, Apr. 1950 1 Apr. 28, 1978 S-7, (2-62415) 2(b)(4)
Apr. 18, 1951 8-K, Apr. 1951 1 Oct. 1, 1978 10-K, 1978 D(1)
Oct. 1, 1951 8-K, Nov. 1951 1 Oct. 1, 1979 S-7, (2-66484) 2(b)(3)
Apr. 21, 1952 8-K, Apr. 1952 1 Mar. 1, 1980 10-K, 1980 4(c)
Dec. 1, 1952 S-9, (2-11120) 2(b)(9) Apr. 28, 1981 S-16, (2-74923) 4(c)
Apr. 15, 1953 8-K, Apr. 1953 2 Nov. 1, 1981 S-16, (2-74923) 4(d)
Apr. 19, 1954 8-K, Apr. 1954 1 Dec. 1, 1981 10-K, 1981 4(c)
Oct. 1, 1954 8-K, Oct. 1954 1 Apr. 29, 1982 10-K, 1982 4(c)
Apr. 18, 1955 8-K, Apr. 1955 1 May 1, 1983 10-K, 1983 4(c)
Apr. 24, 1956 10-K, 1956 1 Apr. 30, 1984 S-3, (2-95814) 4(c)
May 1, 1957 S-9, (2-13260) 2(b)(15) Mar. 1, 1985 10-K, 1985 4(c)
Apr. 10, 1958 8-K, Apr. 1958 1 Nov. 1, 1986 10-K, 1986 4(c)
May 1, 1959 8-K, May 1959 2 May 1, 1987 10-K, 1987 4(c)
Apr. 18, 1960 8-K, Apr. 1960 1 July 1, 1990 S-3, (33-37431) 4(c)
Apr. 19, 1961 8-K, Apr. 1961 1 Dec. 1, 1990 10-K, 1990 4(c)
Oct. 1, 1961 8-K, Oct. 1961 2 Mar. 1, 1992 10-K, 1992 4(d)
Mar. 1, 1962 8-K, Mar. 1962 3(a) Apr. 1, 1993 10-Q, June 30, 1993 4(a)
June 1, 1964 8-K, June 1964 1 June 1, 1993 10-Q, June 30, 1993 4(b)
May 1, 1966 8-K, May 1966 2 Nov. 1, 1993 S-3, (33-51167) 4(a)(3)
July 1, 1967 8-K, July 1967 2 Jan. 1, 1994 10-K, 1993 4(a)(3)
Sept. 2, 1994 8-K, Sept. 1994 4(a)
</TABLE>
79
<PAGE>
4(b)(1)* Indenture, dated as of October 1, 1993, providing for the issuance
of First Collateral Trust Bonds (Form 10-Q, September 30, 1993 -
Exhibit 4(a)).
4(b)(2)* Indentures supplemental to Indenture dated as of October 1, 1993:
<TABLE>
<CAPTION>
PREVIOUS FILING:
FORM; DATE OR EXHIBIT
DATED AS OF FILE NO. NO.
----------------- ----------------- -----------
<S> <C> <C>
November 1, 1993 S-3, (33-51167) 4(b)(2)
January 1, 1994 10-K, 1993 4(b)(3)
September 2, 1994 8-K, Sept. 1994 4(b)
</TABLE>
4(c)(1)* Rights Agreement dated as of February 26, 1991, between the
Registrant and Mellon Bank, N.A. (Form 8-A, filed on March 1,
1991 - Exhibit 1).
4(c)(2)* Amendment to the Rights Agreement dated August 22, 1995 (Form 8-K
dated August 22, 1995, File No. 1-3280 - Exhibit 99(b)).
10(a)(1) Settlement Agreement dated February 9, 1996 between the Company
and the United States Department of Energy.
10(a)(2)* Settlement Agreement dated June 27, 1979 between the Registrant
and General Atomic Company (Form S-7, File No. 2-66484 - Exhibit
5(a)(1)).
10(a)(3)* Services Agreement executed June 27, 1979 and effective as of
January 1, 1979 between the Registrant and General Atomic Company
(Form S-7, File No. 2-66484 - Exhibit 5(a)(3)).
10(c)(1)* Amended and Restated Coal Supply Agreement entered into October 1,
1984 but made effective as of January 1, 1976 between the
Registrant and Amax Inc. on behalf of its division, Amax Coal
Company (10-K, 1984 - Exhibit 10(c)(1)).
10(c)(2)* First Amendment to Amended and Restated Coal Supply Agreement
entered into May 27, 1988 but made effective January 1, 1988
between the Registrant and Amax Coal Company (10-K, 1988-Exhibit
10(c)(2).**
10(e)(1)*+ Supplemental Executive Retirement Plan for Key Management
Employees, as amended and restated March 26, 1991 (10-K, 1991 -
Exhibit 10(e)(2)).
10(e)(2)+ Omnibus Incentive Plan, as amended on January 1, 1996.
10(e)(3)*+ Executive Savings Plan (10-K, 1991 - Exhibit 10(e)(5)).
10(e)(4)+ Form of Key Executive Severance Agreement, as amended on August
22, and November 27, 1995.
10(f)(1)*+ Form of Director's Agreement (10-K, 1987 - Exhibit 10(f)(1)).
10(f)(2)*+ Form of Officer's Agreement (10-K, 1987 - Exhibit 10(f)(2)).
10(g)(1)*+ Employment Agreement dated April 8, 1994 between the Company and
Mr. Delwin D. Hock (10-Q, March 31, 1994 - Exhibit 10).
10(g)(2)*+ Employment Agreement dated July 18, 1994 between the Company and
Mr. Wayne H. Brunetti
80
<PAGE>
(10-Q, September 30, 1994 - Exhibit 10).
10(g)(3)*+ Employment Agreement dated December 5, 1994 between the Company
and Ms. Patricia T. Smith (10-K, 1994 - Exhibit 10(g)(3)).
10(g)(4)+ Employment Agreement dated March 1, 1994 between the Company and
Mr. A. Clegg Crawford.
10(g)(5)+ Amendment to Employment Agreement dated August 22, 1995 between
the Company and Mr. Delwin D. Hock.
10(g)(6)+ Amendment to Employment Agreement dated August 22, 1995 between
the Company and Mr. Wayne H. Brunetti.
10(g)(7)+ Amendment to Employment Agreement dated August 22, 1995 between
the Company and Ms. Patricia T. Smith.
12(a) Computation of Ratio of Consolidated Earnings to Consolidated
Fixed Charges is set forth at page 68 herein.
12(b) Computation of Ratio of Consolidated Earnings to Consolidated
Combined Fixed Charges and Preferred Stock Dividends is set forth
at page 69 herein.
21 Subsidiaries
23 The Consent of Arthur Andersen LLP is set forth at page 76 herein.
24 Power of Attorney is set forth at page 76 herein.
27 Financial Data Schedule UT
_________________
* Previously filed as indicated and incorporated herein by reference.
** Confidential Treatment.
+ Management contracts of compensatory plans or arrangements required to be
filed as exhibits to this Form 10-K by Item 601(10)(iii) of Regulation S-K.
81
<PAGE>
Exhibit 10(a)(1)
CONTRACT NO. DE-AC07-96ID13425
SETTLEMENT AGREEMENT MODIFYING CONTRACT AT (04-3)-633,
AS AMENDED, AND AGREEMENT NO. DE-SC07-79ID01370, AS AMENDED
between
UNITED STATES DEPARTMENT OF ENERGY
and
PUBLIC SERVICE COMPANY OF COLORADO
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
I. DEFINITIONS -1-
II. RECITALS -5-
III. MODIFICATION TO THE 1965 CONTRACT AND 1370 AGREEMENT -6-
IV. TRANSFER OF TITLE, ESCROW ACCOUNT, AND ANNUAL PAYMENTS -6-
A. Title to Fort St. Vrain Spent Nuclear Fuel and Source Materials -6-
B. Title to the ISFSI and ISFSI Property -7-
C. Escrow Account -10-
D. Annual Payments -10-
V. ACTIVITIES, COSTS, AND OBLIGATIONS -12-
A. Operation and Maintenance (O&M) Activities -12-
B. Subcontracts -13-
C. Obligation of Funds -14-
D. Price Anderson Indemnification -17-
E. Insurance -- Litigation and Claims -17-
F. Allowable Costs -22-
G. Prompt Payment -23-
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
VI. RELEASE OF CLAIMS -27-
A. Certified Claim -27-
B. Federal District Court Lawsuit -27-
VII. GENERAL CONDITIONS -27-
A. DOE Authority -27-
B. Enforcement of Agreement -28-
C. Execution of Agreement -29-
D. Continuation of Agreement -29-
E. Integration -29-
F. Amendments -29-
G. Notices -30-
H. Term of Agreement and Option to Extend -30-
I. Termination -31-
J. Decontamination and Decommissioning -32-
Appendix A - Property Description & Plat Map(s)
Appendix B - Description of Spent Fuel and Source Material
Appendix C - Escrow Trust Account Agreement
Appendix D - Coverage and Indemnity Under the Price Anderson Act
Appendix E - Order Related to Dismissal of District of Columbia Civil
Action #95-0328
Exhibit A - Statement of Cost (Example)
</TABLE>
-ii-
<PAGE>
SETTLEMENT AGREEMENT MODIFYING CONTRACT AT (04-3)-633, AS
AMENDED, AND AGREEMENT NO. DE-SC07-79ID01370, AS AMENDED
This Settlement Agreement (the "Agreement") modifying Contract AT (04-3)-
633, as amended, and Agreement No. DE-SC07-79ID01370, as amended, is entered
into between the United States Department of Energy and Public Service Company
of Colorado as of the dates set forth in the signature blocks below, and in
accordance with the terms and conditions set forth herein:
- -----------------------------
I. DEFINITIONS
The following definitions apply for purposes of this Agreement:
A. "PSC" means Public Service Company of Coloardo and its owned,
controlled, affiliated, parent and subsidiary companies and their respective
directors, officers, employees, agents, representatives, and assigns, as well as
their respective predecessors and successors.
B. "DOE" means the United States Department of Energy and its predecessors
and successors, and any duly authorized representative thereof, including the
Contracting Officer.
C. "Contracting Officer" means the person executing this Agreement on
behalf of DOE, and any other authorized employee who is a properly designated
Contracting Officer of DOE; and the term includes the authorized representative
of a Contracting Officer acting within the limits of his or her authority.
<PAGE>
D. "ISFSI" means the Independent Spent Fuel Storage Installation currently
owned by PSC in Weld County, Colorado, including all equipment, records, tools,
or other devices in PSC's possession incident to the loading, unloading, and
maintenance of spent nuclear fuel and other material contents of the facility.
Records shall include the controlled drawings, specification, calculations, and
quality control inspection reports associated with the design, construction, and
operation of the ISFSI.
E. "ISFSI property" means the parcel of land in Weld County, Colorado on
which the ISFSI is located. The ISFSI property is located adjacent to the
parcel of land on which the decommissioned Fort St. Vrain Nuclear Generating
Station (prior to its conversion) is located. General legal descriptions and
plat maps of the ISFSI property, the ISFSI controlled property (as applicable),
and the ISFSI right of way (as applicable) are attached hereto as Appendix A.
F. "ISFSI controlled property" means the property within the "ISFSI
controlled area boundary" that is delineated on the map attached hereto in
Appendix A, over which controls need to be established per the requirements of
the Nuclear Regulatory Commission ("NRC") license.
G. "ISFSI right of way" means the provision for required and reasonable
access to the ISFSI across private property as is necessary to provide for
normal and emergency ingress and egress for operation, maintenance, and
environmental monitoring. Such access shall be between the ISFSI and the
nearest usable public transportation corridor or right of way.
-2-
<PAGE>
H. "The 1965 Contract" means Contract AT(04-3)-633 Between the United
States Atomic Energy Commission, Public Service Company of Colorado and General
Dynamics Corporation, entered into on July 1, 1965, and all subsequent
amendments and modifications thereto.
I. "The 1370 Agreement" means Agreement No. DE-SC07-79ID01370 Between the
United States Department of Energy, Public Service Company of Colorado and
General Atomic Company For Receipt by DOE of Certain Irradiated Reactor Material
In Furtherance of Contract AT(04-3)-633, entered into on April 1, 1980, and all
subsequent amendments and modifications thereto.
J. "NRC license" means the current license covering the ISFSI issued to
PSC by the Nuclear Regulatory Commission ("NRC") pursuant to Part 72 of Title 10
of the Code of Federal Regulations ("C.F.R."), and includes any future
requirements of that license.
K. "Operation and Maintenance Costs" or "O&M costs" means all reasonable
and allowable costs relating to the ISFSI and spent nuclear fuel therein and the
ISFSI property, including costs of operation and maintenance of the ISFSI and
ISFSI property in a manner consistent with the NRC license and all other
federal, state, and local requirements, costs relating to security, quality
assurance, applicable and necessary permitting and health physics requirements,
licensing fees, facility support and maintenance, overhead, reasonable bond and
insurance costs (including any deductible), and reasonable associated litigation
costs.
-3-
<PAGE>
L. "Reasonable and Allowable costs" are those costs directly allocable to
and actually incurred by PSC in the performance of this Agreement which meet the
following criteria: (a) costs which are necessary and appropriate based on
prudent business judgement; (b) costs which are necessary to satisfy all
applicable regulatory and other legal requirements for the operation and
maintenance of the ISFSI; (c) costs which constitute equitable charges under
generally accepted accounting principles and practices; and (d) costs which are
specifically agreed upon by the parties to this Agreement; or (e) costs which
are otherwise stated by PSC to be necessary and are determined to be allowable
by the DOE Contracting Officer. Prior to execution of this Agreement, the
Contracting Officer will review PSC's 1996 estimated costs and those costs
actually incurred by PSC from December 1, 1995 through the execution of this
Agreement. Based on this review, the Contracting Officer will reach an advance
agreement with PSC upon the reasonableness and allowability of such costs. This
advance agreement will be used for purposes of establishing a benchmark to
administer this Agreement in order to avoid disputes over cost reasonableness
and allowability. This advance agreement will also establish the allowability
of existing contracts, bonds and insurance.
M. "Relate" or "relating to" means, without limitation, consisting of,
referring to, arising out of, reflecting or having any logical or factual
connection with the matter discussed.
N. "Spent Nuclear Fuel" means 1464 irradiated fuel elements from the
former Fort St. Vrain Nuclear Generating Station currently stored in the ISFSI.
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II. RECITALS
A. PSC is currently storing spent nuclear fuel originating from its Fort
St. Vrain Nuclear Generating Station, including spent fuel Segments 4 through 9,
in the ISFSI. PSC also is maintaining source materials that are used for
instrument calibration in connection with the operation and maintenance of the
ISFSI. The spent fuel and calibration source materials that are the subject of
this Agreement are fully described in Appendix B attached hereto.
B. PSC submitted to DOE's Contracting Officer on June 1, 1995 a Certified
Claim alleging certain breaches of the 1965 Contract and the 1370 Agreement
relating to the Fort St. Vrain spent nuclear fuel (the "Certified Claim"). PSC
sought, among other things, reimbursement for certain costs relating to the
spent nuclear fuel and the ISFSI.
C. PSC also filed an independent action against DOE in the United States
District Court for the District of Columbia, Public Service Company of Colorado
V. Hazel R. O'Leary, Civil Action No. 95-0328 (Sporkin, J.), in which PSC
claimed that it was not liable under the Energy Policy Act of 1992 for certain
special assessments on the Fort St. Vrain spent nuclear fuel ("Civil Action No.
95-0328").
D. PSC and DOE entered into a bilateral Agreement in Principle on October
19, 1995, which set forth in general the terms of an agreed upon settlement of
the claims arising out of previous contracts between the parties, including
those delineated in PSC's June 1, 1995 certified claim. Without admission of
liability of the part of either party, PSC and DOE intend by this Agreement to
settle PSC's claims described in the
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Certified Claim, as well as the claims in Civil Action No. 95-0328 relating to
the special assessments.
NOW, THEREFORE, in consideration of the promises, mutual covenants and
agreements set forth herein, PSC and DOE hereby agree as follows:
III. MODIFICATION TO THE 1965 CONTRACT AND 1370 AGREEMENT
This Agreement between PSC and DOE supersedes and rescinds the 1965
Contract and the 1370 Agreement in their entirety. The prior obligations of PSC
and DOE under the 1965 Contract and the 1370 Agreement, therefore, are
discharged, and this Agreement is substituted for the 1965 Contract and the 1370
Agreement.
IV. TRANSFER OF TITLE, ESCROW ACCOUNT, AND ANNUAL PAYMENTS
A. TITLE TO FORT ST. VRAIN SPENT NUCLEAR FUEL AND SOURCE MATERIALS
(1) Upon execution of this Agreement, DOE assumes title to the Spent
Nuclear Fuel currently stored in the ISFSI, as well as the calibration source
materials, now located (or to be stored) in the ISFSI. Under no circumstances,
including termination, expiration or future rescission of this Agreement, will
title pass back to PSC. A PSC statement describing the Spent Nuclear Fuel and
the calibration source materials that are the subject of this paragraph is
attached hereto as a part of Appendix B. By execution of this Agreement, PSC
hereby states that, to the best of its knowledge, all such materials now stored,
or to be stored in the ISFSI, are or will be in compliance with the NRC license
and any applicable local,
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state, and/or federal regulatory requirements. DOE accepts title to the Spent
Nuclear Fuel and the source materials as is, and PSC makes no further warranty
in connection therewith.
(2) In accepting title to the spent nuclear fuel currently stored in the
ISFSI, DOE assumes responsibility for all payments into the Nuclear Waste Fund
required under the Nuclear Waste Policy Act of 1982 (Pub.L. 97-425, 42 U.S.C.
10101 et. seq.) which were formerly the responsibility of PSC, specifically
--- ----
Segment #9. All payments that have been made to date by PSC shall be credited
toward meeting DOE's obligations for Segment #9, as they evolve.
B. TITLE TO THE ISFSI AND ISFSI PROPERTY
(1) DOE will purchase the ISFSI and ISFSI property from PSC for $1 (to be
paid directly by DOE to PSC), with title to the ISFSI and ISFSI property,
including any future contents of the ISFSI described in section V.A. below
entitled "Operation and Maintenance (O&M) Activities," passing to DOE at a
closing to take place within 7 business days after compliance with all
applicable legal requirements, including the transfer to DOE of the NRC license.
DOE also will pay PSC a total of $15,999,999 plus accumulated interest before or
at the time of such closing in settlement of all claims for costs related to the
ISFSI pursuant to the terms of the escrow account described in section IV.C
below entitled "Escrow Account."
(2) Both PSC and DOE will use their best efforts to facilitate transfer of
the NRC license to DOE (including transfer to DOE of all necessary and
appropriate records in PSC's possession, subject to any existing confidentiality
agreements, as and when required) and to
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finalize the transfer of title to the ISFSI and ISFSI property from PSC to DOE
as soon as practicable. PSC and DOE intend that such transfer of title will
occur no later than December 31, 1996. Both PSC and DOE recognize that the title
transfer is subject to prior approval of the Attorney General, or her designee,
and that the ISFSI NRC license transfer is subject to approval of the NRC,
processes over which neither DOE nor PSC has any control. PSC will provide DOE
with easements to the ISFSI controlled property as may be required by the NRC
for successful transfer of the NRC license (to DOE) and the ISFSI's continued
operation. PSC and DOE will also grant each other the rights of way described in
Appendix A along the road going into, and through, the ISFSI property. DOE
intends to submit to the NRC an application pursuant to 10 C.F.R. (S)72.50 for
transfer of the NRC license from PSC to DOE on or before June 30, 1996, to the
best of DOE's ability. DOE will provide in its application the necessary
information described in 10 C.F.R. (S)72.22 and (S)72.28 and otherwise take such
steps needed to satisfy the requirements of 10 C.F.R. (S)72.50. Prior to the
closing of the purchase of, and transfer of title to, the ISFSI and ISFSI
property as required by this section, PSC will provide DOE with U.S. Government-
required real property surveys and legal descriptions of the ISFSI property, the
ISFSI controlled property (as applicable), and the ISFSI right of way (as
applicable). Following transfer of the NRC license for the ISFSI to the DOE, PSC
will continue to provide support to the DOE and will enter into agreements (as
necessary) with the DOE to ensure cooperation between the parties for the
operation of the ISFSI, the Fort St. Vrain Power Generating Station, and any
future activities to be sited on PSC property in the vicinity of the ISFSI, as
deemed necessary by the NRC.
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In addition, both before and after the transfer, PSC will not install new
gas or oil pipelines within one-half mile of the ISFSI before DOE obtains
approval from the NRC. If requested to do so by PSC, DOE will use its best
efforts to obtain such approval.
(3) DOE's and PSC's execution of this Agreement is based on a good faith
understanding between the parties that, to the best of their knowledge, the
ISFSI and ISFSI property are in good order, satisfactory condition, and are
compliant with all requirements of the NRC license. Prior to execution of this
Agreement, PSC shall disclose, in writing, any known defects or areas of
noncompliance existing in the ISFSI, the ISFSI property, or the contents of the
ISFSI, or, PSC shall otherwise provide a statement to DOE that no such known
defects or noncompliances exist. DOE will accept title to the ISFSI and ISFSI
property subject to PSC's disclosure, NRC approval of the transfer of license,
and U.S. Government required real property surveys, legal descriptions, title
searches, and title insurance. No promise to alter, remodel, or improve the
premises has been made by PSC or DOE, other than that necessary for continuation
or transfer of a valid NRC license. If such modification to the premises is
necessary pursuant to NRC requirements, the reasonable and allowable costs
associated therewith will be reimbursed by DOE to PSC under this Agreement. PSC
makes no additional warranty relating to the ISFSI or ISFSI property, other than
warranty of free and clear title.
(4) DOE and PSC agree that they will not at any time add any additional
spent nuclear fuel to the ISFSI, and PSC will not add or remove any other
materials without notice to DOE as required by section V.A. entitled "Operation
and Maintenance (O&M) Activities".
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C. ESCROW ACCOUNT
Within 5 working days of the date of either the execution of this Agreement
or upon the establishment of the trust agreement, DOE will direct deposit $14
million into an escrow account established by PSC. As set forth in the terms of
the escrow account, attached hereto as Appendix C, the trustee pursuant to
instructions of PSC will invest only in obligations guaranteed by the United
States. The withdrawal of escrow funds will occur only as contemplated by this
Agreement and the terms of the escrow account. On the date of the closing when
unencumbered title to the ISFSI and ISFSI property is transferred to DOE, PSC
will be entitled to receipt of all funds (principal and interest) in the escrow
account.
D. ANNUAL PAYMENTS
Until such time as title to the ISFSI and ISFSI property is transferred to
DOE, or until Decontamination and Decommissioning per Section VII.J is complete,
PSC will be entitled to Annual Payments escalated each year pursuant to the
Consumer Price Index, which is defined below in this paragraph (the "Annual
Payments"). The Annual Payments will be separate from and in addition to the
payments by DOE to PSC of costs described in section V.F. below entitled
"Allowable Costs." The first Annual Payment will be $1,999,999.00 and will be
made directly by DOE to PSC within 5 working days of the date of execution of
this Agreement. Thereafter, the Annual Payments will be made to PSC on the
anniversary date of this Agreement, or on the first business day immediately
following the anniversary of this Agreement. For the first seven such
subsequent years, Annual Payments of $2 million will be paid to PSC from the
escrow account. The remaining portion
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of the Annual Payments during these first seven years, which would be the
escalated amount pursuant to the U.S. City Average Consumer Price Index for All
Urban Consumers, known as the CPI-U For All Items, published by the Secretary of
Labor, or its future equivalent ("CPI"), will be made directly by DOE to PSC.
Annual Payments reflecting escalation pursuant to the CPI will be calculated as
the product of the prior year's Annual Payment and
THE CURRENT LEVEL OF CPI-THE LEVEL OF CPI AT THE TIME OF PRIOR PAYMENT .
1+ ---------------------------------------------------------------------- =
THE LEVEL OF CPI AT TIME OF PRIOR PAYMENT
If title to the ISFSI and ISFSI property has not transferred to DOE during the
first eight years of the Agreement, such that the principal in the escrow
account has been depleted by the Annual Payments, then all further Annual
Payments of $2 million, similarly escalated, will be made in full directly by
DOE to PSC. If, after fifteen years from the date of execution of this
Agreement, DOE exercises a one-time option to extend this Agreement for an
additional five years pursuant to section VII.H. below entitled "Term of
Agreement and Option to Extend," then the Annual Payments by DOE to PSC will be
$4 million, which amount will not during such five year period be escalated for
inflation. If, after twenty years from the date of execution of this Agreement,
title to the ISFSI and ISFSI property has not transferred to DOE and DOE has not
completed its responsibilities under Section VII.J.(1) of this Agreement
regarding decontamination and decommissioning, then the $4 million Annual
Payments will continue and will be escalated per the formula above, such
escalation starting with the first such payment due on the twenty-first
anniversary of this Agreement.
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V. ACTIVITIES, COSTS, AND OBLIGATIONS
A. OPERATION AND MAINTENANCE (O&M) ACTIVITIES
(1) Pursuant to this Agreement, until the date of transfer of title to
the ISFSI and ISFSI property to DOE or until decontamination and decommissioning
is complete, whichever comes first, PSC will operate and maintain the ISFSI and
ISFSI property in a manner consistent with its NRC license and all other local,
state and/or federal requirements, including security, quality assurance, and
applicable and necessary permitting and health physics requirements. PSC will
furnish such personnel, facilities, equipment, materials, supplies, and services
and otherwise take actions deemed necessary for, or incident to, such operation
and maintenance activities. DOE recognizes that until such time as DOE takes
title to and control of the ISFSI and ISFSI property, or otherwise until DOE
performs all its obligations under this Agreement, including those described in
section VII.J. below entitled "Decontamination and Decommissioning," all
reasonable and allowable costs to PSC and other costs reasonably incurred by PSC
relating to operation and maintenance activities are for the benefit of DOE.
(2) Until the date of transfer of title to the ISFSI and ISFSI property to
DOE, PSC will have access to the ISFSI and ISFSI property for the purpose of
performing its obligations under this Agreement. PSC also will have access to
and use of the ISFSI and ISFSI property for the purpose of storing any
radioactive material or waste in accordance with applicable permits that has
been or may be generated by the operation and maintenance activities associated
with the ISFSI all in accordance with the NRC license and any other
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regulatory requirements. PSC shall notify DOE of waste(s) accumulated in the
ISFSI by type, quantity, and regulatory status on an annual basis. PSC shall
give notice to DOE, at least quarterly, of any changes in the inventory of
radioactive material or waste it is storing in the ISFSI. DOE agrees to manage
all such radioactive waste, and all other radioactive contents of the ISFSI, as
set forth in section VII.J. below entitled "Decontamination and
Decommissioning." While normal operation of the ISFSI is not anticipated to
generate any radioactive waste, DOE will also manage any such wastes as needed
for PSC to operate and maintain the ISFSI under this Agreement.
B. SUBCONTRACTS
(1) PSC may fulfill any of its obligations, or take any action, under this
Agreement either directly or through subcontractors pursuant to any limitations
imposed by its NRC license. DOE will cooperate fully in PSC's efforts to
perform this Agreement whether through its own efforts or the efforts of
subcontractors. In the event that new subcontracts for services or equipment
are required, the costs of which PSC will seek reimbursement from DOE as
allowable costs, DOE shall review the requirements with PSC and provide written
consent to such subcontract(s). Such written consent shall not be unreasonabaly
delayed or withheld. PSC will assist DOE with this review by providing
supporting documentation, including information on proposed costs to PSC of
subcontractors, thus allowing DOE to make an informed decision regarding the use
of subcontracts.
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(2) PSC may award subcontracts without prior notice to the Contracting
Officer as necessary to respond to emergencies or as necessary to take immediate
actions to preserve licensing of the ISFSI. Subsequent notification to the
Contracting Officer should be made within 72 hours when possible.
C. OBLIGATION OF FUNDS
(1) Obligation of funds. The total estimated cost for ISFSI activities,
-------------------
other than annual payments per Section IV.D entitled "Annual Payments", during
the 15-year base term of this Agreement is estimated not to exceed $24.5 million
(1996 dollars). Of this total estimated cost, the amount presently obligated by
DOE is $1.1 million for the balance of DOE fiscal year 1996 (ending September
30, 1996). This amount is available for payment of reasonable and allowable
costs incurred from the effective date of this Agreement through September 30,
1996 (and beyond that date to the extent funds remain). The obligated amount
may be increased unilaterally by DOE by written notice to PSC and may be
increased or decreased by written agreement of the parties (whether or not by
formal modification of this Agreement). DOE will use its best efforts to
obligate any additional funds needed to cover PSC's costs.
(2) Incremental funding. Until the date of transfer of title to the ISFSI
-------------------
and ISFSI property, this Agreement provides for an incrementally funded cost-
reimbursement arrangement between PSC and DOE for ISFSI activities. It is
estimated that the cost of performing ISFSI activities, not including annual
payments per Section IV.D entitled "Annual Payments", during the 15-year base
term of this Agreement will not exceed the
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estimated cost specified in subparagraph (1) above. The parties contemplate that
DOE will periodically allot additional funds incrementally to the contract as
needed to perform its obligations under this Agreement. PSC agrees to use its
best efforts to perform the required activities pursuant to the conditions of
its NRC license and to satisfy all its obligations within the estimated cost.
The not-to-exceed estimate in subparagraph V.C.(1) above is an estimate only.
(3) Limitation on payment by DOE. Except for costs which may be incurred
----------------------------
by PSC pursuant to section VII.I. entitled "Termination," or section VII.J.
entitled "Decontamination and Decommissioning," payment by DOE under this
Agreement on account of allowable costs shall not, in the aggregate, exceed the
amount obligated with respect to this Agreement. Payment on account of those
costs excepted in the preceding sentence and any other allowable costs which are
in excess of the amount obligated with respect to this Agreement shall be
subject to the availability of funds which DOE may legally use for such purpose,
provided DOE will use its best efforts to obtain the appropriation of funds for
this purpose if not otherwise available.
(4) Notices -- Contractor excused from further performance. PSC shall
------------------------------------------------------
notify DOE in writing whenever the unexpended balance of funds available under
paragraph (1) above is, in PSC's best judgment, only sufficient to continue
contract operations at the programmed rate for 30 more days and to cover PSC's
outstanding commitments and liabilities on account of costs allowable under this
Agreement at the end of such period. Whenever the unexpended balance of funds
available under paragraph (1) above is, in PSC's best judgment, either
sufficient only to liquidate outstanding commitments and liabilities on
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account of costs allowable under this contract or is equal to zero, PSC shall
immediately notify DOE and, unless the parties otherwise agree, PSC shall be
excused from further performance of its obligations to DOE under this contract
(except such performance as may become necessary in connection with termination
by DOE). Thereafter, the performance of all work hereunder will be deemed to
have been terminated for the convenience of DOE, when permitted, in accordance
with section VII.I below entitled "Termination."
DOE recognizes that PSC may have continuing obligations to the NRC under
its NRC license to operate and maintain the ISFSI which are independent from its
obligations to DOE and which will continue even if Congress does not appropriate
funding to DOE for activities under this Agreement. Therefore, DOE agrees and
acknowledges that because DOE will be the owner of the spent nuclear fuel and
source materials in the ISFSI, all reasonable and allowable O&M costs and other
costs incurred by PSC for activities covered by this Agreement are for the
benefit of DOE. DOE further agrees and acknowledges that such costs would not
be incurred for the benefit of PSC. DOE agrees and acknowledges that PSC may
have a right of action in law or equity against the United States to recover
such costs in the unlikely event that DOE does not receive additional
appropriations for these amounts.
(5) DOE's right to terminate not affected. The giving of any notice under
-------------------------------------
this section shall not be construed to waive or impair any right of DOE to
terminate this Agreement under section VII.I. entitled "Termination."
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D. PRICE ANDERSON INDEMNIFICATION
(1) DOE will provide PSC with full and complete coverage and indemnity
under the Price Anderson Act, as amended, 42 U.S.C. (S) 2210, et seq. (section
-------
170d of the Atomic Energy Act of 1954, as amended) as set forth in Appendix D
hereto, to the extent that Price Anderson coverage is not provided by the NRC
under subsections b, c, or k of the Act.
(2) In consideration of providing indemnification under the Price Anderson
Act, PSC will take steps necessary to ensure that DOE is provided copies of all
correspondence between PSC and the NRC regarding the ISFSI. In addition, PSC
will notify DOE immediately (in accordance with the timeframes required by the
NRC) of any situation which PSC determines could possibly incur a liability to
DOE under the Price Anderson Act.
E. INSURANCE -- LITIGATION AND CLAIMS
(1) PSC may, with the prior written authorization of the Contracting
Officer, and shall, upon the direction of the Contracting Officer, initiate
litigation or legal proceedings, including proceedings before administrative
agencies, in connection with this Agreement. PSC shall proceed with such
litigation or proceedings in good faith and as directed from time to time by the
Contracting Officer, and in accordance with DOE-approved contractor litigation
management procedures. The reasonable and allowable costs relating to such
litigation or legal proceedings will be reimbursed by DOE.
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(2) PSC shall give the Contracting Officer immediate notice in writing of
any action, including any proceeding before an administrative agency, filed
against PSC arising out of the performance of this Agreement, and of any claim
against PSC, the costs and expenses of which PSC would propose to submit as a
claim for allowable costs under section V.F. of this Agreement entitled
"Allowable Costs." Except as otherwise directed by the Contracting Officer in
writing, PSC shall furnish immediately to the Contracting Officer copies of all
pertinent papers received by PSC with respect to such action or claim. PSC,
with the prior written authorization of the Contracting Officer (which
authorization will not be unreasonably withheld), shall proceed with such
litigation in good faith and as directed from time to time by the Contracting
Officer, and in accordance with DOE-approved contractor litigation management
procedures. The reasonable and allowable costs relating to such litigation or
legal proceedings will be reimbursed by DOE.
(3) (a) Except as provided in paragraph (3)(b) of this section, PSC shall
procure and maintain such bonds and insurance that are reasonable
and are otherwise required in writing by the Contracting Officer.
PSC shall obtain the Contracting Officer's approval to secure
new, or to renew existing bonds and insurance that are not
required by law or regulation, and for which PSC seeks
reimbursement from DOE. The Contracting Officer's disapproval
will be limited to the allowability of costs.
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(b) PSC may, with the approval of the Contracting Officer, maintain a
self-insurance program; provided that, with respect to workers'
compensation, PSC is qualified pursuant to statutory authority.
The reasonable cost of such program will be an allowable cost.
(c) All bonds and insurance required by the Contracting Officer shall
be in a form and amount and for those periods as the Contracting
Officer may require or approve and with sureties and insurers
approved by the Contracting Officer.
(4) PSC agrees to submit for the Contracting Officer's approval, to the
extent and in the manner required by the Contracting Officer, any other bonds
and insurance that are maintained by PSC in connection with the performance of
this Agreement and for which PSC seeks reimbursement.
(5) Except as provided in subparagraphs (7) and (8) of this section, or
specifically disallowed elsewhere in this agreement, PSC shall be reimbursed ---
(a) For the reasonable cost of bonds and insurance required in
accordance with the terms of this Agreement or approved under
this section, and
(b) For liabilities (and expenses incidental to such liabilities,
including litigation costs) to third persons not compensated by
insurance or otherwise without regard to and as an exception to
section IV.D of this Agreement entitled, "Obligation of Funds."
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(6) DOE's liability under paragraph (5) of this section is subject to the
availability of appropriated funds. Nothing in this Agreement shall be
construed as implying that Congress will, at a later date, appropriate funds
sufficient to meet deficiencies.
(7) Notwithstanding any other provision of this Agreement, PSC shall
not be reimbursed for liabilities (and expenses incidental to such liabilities,
including litigation costs, counsel fees, judgment and settlements)--
(a) Which are otherwise unallowable by law or the
provisions of this Agreement; or
(b) For which PSC has failed to insure or to maintain
insurance as required by law, this Agreement, or by the
written direction of the Contracting Officer.
(8) Notwithstanding any other provision of this Agreement, PSC's
liabilities to third persons, including employees, (and any expenses incidental
to such liabilities, including litigation costs) are not allowable if such
liabilities were caused by the willful misconduct or lack of good faith of PSC's
managerial personnel.
(a) Punitive damages are not allowable unless PSC
demonstrates to the Contracting Officer that the act or
failure to act which gave rise to the liability
resulted from compliance with specific terms and
conditions of this Agreement or written instructions
from the Contracting Officer.
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(b) The cost of insurance obtained by PSC to cover third-
party liabilities, referenced in paragraph (8) above,
is unallowable.
(9) PSC may, at its own expense and not as an allowable cost, procure for
its own protection insurance to compensate for any unallowable or unreimbursable
costs incurred in connection with its performance.
(10) If any suit or action is filed or any claim is made against PSC, the
cost and expense of which is to be reimbursed to PSC under this Agreement, and
the risk of which is then uninsured or is insured for less than the amount
claimed, PSC shall ---
(a) Immediately notify the Contracting Officer and promptly
furnish copies of all pertinent papers received;
(b) Authorize DOE representatives to collaborate with: in-
house or DOE-approved outside counsel in settling or
defending the claim; or counsel for the insurance
carrier in settling or defending the claim when the
amount of the liability claimed exceeds the amount of
coverage, unless precluded by the terms of the
insurance contract; and
(c) Authorize DOE representatives to settle the claim or to
defend or represent PSC in and/or to take charge of any
litigation, if required by DOE, when the liability is
not insured or covered by bond. In any action against
more than one DOE contractor, DOE may require the
contractors to be represented by common counsel.
Counsel for PSC
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may, at PSC's own expense, be associated with DOE
representatives in any such claim or litigation.
(11) For purposes of this section, the term "litigation costs" includes but
is not limited to the following: administrative and clerical expenses; the cost
of legal services, whether performed by in-house or DOE-approved private
counsel; the costs of the services of accountants, consultants, or others
retained by PSC to assist it; all elements of compensation, related costs, and
expenses of employees, officers, and directors; and any similar costs incurred
before, during, and after commencement of a judicial or administrative
proceeding which bear direct and substantial relationship to the proceedings.
F. ALLOWABLE COSTS
(1) In addition to making the Annual Payments described in section IV.D
above entitled "Annual Payments," DOE will promptly reimburse PSC for reasonable
and allowable ISFSI operation and maintenance (O&M) costs, to include those
defined in section I.K above and the costs of ISFSI subcontracts, bonds,
insurance, and litigation incurred in compliance with the corresponding sections
of this section V, as provided in section V.G below entitled "Prompt Payment.".
DOE will reimburse PSC for such reasonable and allowable O&M costs incurred
beginning February 1, 1996, if this Agreement is executed on or before February
29, 1996. Upon review and agreement of the Contracting Officer, DOE will
reimburse PSC for any costs on a pro-rata basis paid prior to February 1, 1996,
to the extent that such costs cover ISFSI activities occurring after February 1,
1996 (e.g., prepayment of NRC license fees, taxes, insurance, etc.).
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(2) PSC shall provide to the Contracting Officer an itemized list of
estimated costs on an annual basis no later than August 1 preceding the next DOE
fiscal year (October 1 through September 30).
(3) The parties agree that the Federal Acquisition Regulations (FAR) Part
31 will serve as a guide regarding the "allowability" or "reasonableness" of
costs, but is not determinative of what is a reasonable cost under the
circumstances.
G. PROMPT PAYMENT
(1) DOE will make invoice payments under the terms and conditions specified
in this section. Payment will be considered as being made on the day a check is
received by PSC, or an electronic funds transfer is made. An invoice is PSC's
bill or written request for payment under this Agreement submitted to the
Contracting Officer or a designated billing office specified by the Contracting
Officer.
(2) The due date for making invoice payments by DOE will be the 30th day
after the Contracting Officer or designated billing office has received an
invoice from PSC. DOE will pay interest at the U.S. Treasury Renegotiation Rate
on any amount not paid on time.
(3) An invoice must include the following items:
(a) PSC's name and address;
(b) Invoice date;
(c) Agreement number;
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(d) Invoice number;
(e) Identify billing period covered;
(f) Invoice amount
(g) Name and address of PSC official to whom payment is to be sent;
and
(h) Name, title, phone number and mailing address of person to be
notified in event of a defective invoice;
(i) The Statement of Cost shall be completed substantially as shown
in exhibit A, making due allowance for PSC's cost accounting
system. Costs claimed shall be only those recorded costs
authorized for billing as reasonable and allowable costs under
this Agreement. Indirect costs claimed shall reflect actual
experience, but in no event shall exceed those approved for
billing purposes by a cognizant federal agency. Additional
supporting data for claimed costs shall be provided in such form
and reasonable detail as an authorized representative of the
Contracting Officer may require.
(4) Billing Period. An invoice shall be submitted no more frequently than
--------------
monthly (unless prior written consent of the Contracting Officer for more
frequent billing is obtained).
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<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK.
-25-
<PAGE>
(5) Submission.
----------
(a) PSC shall submit an original plus two copies of the
Statement of Cost,
to:
U.S. Department of Energy
Idaho Operations Office
850 Energy Drive, MS-1242
ATTN: Financial Services Division
Idaho Falls, Idaho 83401-1563
(b) The Statement of Cost must be signed by an authorized
official of PSC.
(6) If the invoice does not comply with these requirements, PSC will be
notified of the defect within 7 calendar days after DOE receives the invoice.
If DOE fails to make prompt notification within this 7 calendar day period, an
increment of time equal to the number of days beyond 7 days will be subtracted
from the 30 day period allowed for payment once the corrected invoice is
received.
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<PAGE>
VI. RELEASE OF CLAIMS
A. CERTIFIED CLAIM
PSC hereby releases and discharges DOE from any and all claims arising out
of the subject contracts [Contract No. AT (04-3)-633, as amended, and Agreement
No. DE-SC07-79ID01370, as amended], including any claims for costs delineated in
PSC's certified claim dated May 26, 1995, which was submitted to DOE's
Contracting Officer in the Idaho Operations Office on June 1, 1995.
B. FEDERAL DISTRICT COURT LAWSUIT
PSC will cause its lawsuit in the federal district court for the District
of Columbia (Civil Action No. 95-0328) against DOE relating to the SWU
assessments ("separative work units") to be dismissed with prejudice. PSC
hereby relinquishes its right to any claim for refund of SWU assessments
pursuant to the Energy Policy Act, 28 U.S.C. (S)2297g-1. A copy of the Order
relating to such dismissal is attached hereto as Appendix E.
VII. GENERAL CONDITIONS
A. DOE AUTHORITY
(1) To the best of its knowledge and belief, DOE represents that all
provisions of this agreement are lawful and enforceable and that it has
authority to enter into this Agreement, including authority to provide Price
Anderson Act indemnification to PSC. Such authority includes that granted by
Congress under section 170d of the Atomic Energy Act of 1954 as described in
section V.D above; the Price Anderson Act, 42 U.S.C. (S)2210d; the
-27-
<PAGE>
DOE Organization Act, Pub. L. 95-91, 42 U.S.C. (S)7101, et seq.; and the Nuclear
------
Waste Policy Act of 1982, Pub. L. 97-425, 42 U.S.C. 10101, et seq., and other
------
statutes.
(2) DOE and PSC have agreed that this Agreement is not subject to the
Federal Acquisition Regulation ("FAR") pursuant to FAR 1.104 and 2.101, 48
C.F.R. (S)(S) 1.104 and 2.101.
(3) The parties have agreed that nothing in this Agreement abrogates the
authority of the Comptroller General under 41 U.S.C. (S) 254d.
B. ENFORCEMENT OF AGREEMENT
(1) If any provision or part of this Agreement is deemed unenforceable,
e.g., because of a lack of obligated or available funds, then PSC may seek
monetary recovery from DOE for services rendered, and, may seek (i) reformation
of the Agreement to delete those portions of the Agreement allegedly entered
into without authority from the remainder of the Agreement and/or (ii) rescision
of the Agreement.
(2) If either DOE or PSC fail to meet any of their obligations under this
Agreement, either party may seek redress therefrom, and seek enforcement of this
Agreement, as well as seek recovery of any damages, costs and attorneys fees
associated therewith, in any court or board of contract appeals having competent
jurisdiction.
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<PAGE>
C. EXECUTION OF AGREEMENT
PSC and DOE hereby represent that the person executing this Agreement on
their behalf is fully authorized and empowered to enter into the terms and
conditions of the Agreement and to execute the same.
D. CONTINUATION OF AGREEMENT
Each term of this Agreement is binding on, and inures to the benefit of,
PSC and DOE and their respective successors, transferees, assigns,
representatives, principals, agents, officers, directors, and employees.
E. INTEGRATION
This Agreement prevails over prior communications regarding the matters
contained herein between PSC and DOE or their representatives. This Agreement
is an integrated agreement and contains the entire agreement regarding the
matters herein and no representations, warranties, or promises have been made or
relied upon other than as set forth herein. This Agreement was drafted by
counsel for PSC and DOE and shall not be a presumption or construction against
either party; each party expressly waiving the doctrine of contra proferentum.
F. AMENDMENTS
This Agreement may not be amended or modified except by a written
instrument signed by the duly authorized representatives of PSC and DOE.
-29-
<PAGE>
G. NOTICES
Any statements, communications or notices to be provided under this
Agreement shall be sent by overnight courier, or by fax and regular mail, as
follows:
Contracting Officer
Procurement Services Division
U.S. Department of Energy, Idaho Operations Office
850 Energy Drive
Idaho Falls, ID 83401-1563
A. Clegg Crawford
Vice President
Engineering and Operations Support
Public Service Company of Colorado
P. O. Box 840
Denver, CO 80201-0840
H. TERM OF AGREEMENT AND OPTION TO EXTEND
The term of this Agreement is for a period of up to 15 years from the date
the Agreement is executed, except that DOE has the right to exercise one option
to extend the term of the Agreement for an additional five years. At least
twenty four months prior to the date on which this Agreement would otherwise
expire, DOE will provide written notice to PSC that it intends to exercise the
5-year option to extend.
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<PAGE>
I. TERMINATION
(1) Notwithstanding section VII.H above entitled "Term of Agreement and
Option to Extend," this Agreement will terminate on the date title to the ISFSI
and ISFSI property transfers to DOE.
(2) If title to the ISFSI and ISFSI property cannot be transferred to DOE
because the Nuclear Regulatory Commission (NRC) does not approve transfer of the
PSC license to DOE or because of any other legal impediment prohibiting transfer
of title, then this Agreement will expire in accordance with section VII.H above
entitled "Term of Agreement and Option to Extend."
(3) DOE may elect to terminate this Agreement for default or convenience at
any time, except that DOE waives its right to terminate those provisions of this
Agreement which directly relate to and are specifically funded through the
escrow account established in section IV.C. entitled "Escrow Account", until
funds in the escrow account are exhausted, or until eight years after the date
this Agreement is executed, whichever comes first. No termination or expiration
of this Agreement will affect DOE's or PSC's responsibilities to perform their
executory obligations under this Agreement, including those under section VII.J.
below entitled "Decontamination and Decommissioning."
(4) Upon termination or expiration of this Agreement (including any
extension), PSC will discontinue work and the placing of orders for materials,
facilities, supplies, and services in connection with the operation and
maintenance of the ISFSI except as provided in paragraph VII.J.(1)(e) below and,
to the extent directed by the Contracting Officer, will
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<PAGE>
cancel, promptly settle or otherwise transfer to DOE existing orders,
subcontracts and commitments pertaining to this Agreement. In accordance with
section V.F. of this Agreement entitled "Insurance -- Litigation and Claims,"
DOE will assume responsibility for any and all obligations, commitments, and
claims that PSC may have undertaken or incurred, the costs of which are
reasonable and allowable in accordance with section V.B. of this Agreement
entitled "Allowable Costs."
(5) If title to the ISFSI and ISFSI property has not transferred to DOE,
upon termination of the Agreement, the interest payments remaining in the
trust/escrow account will be remitted to the Miscellaneous Receipts Account of
the United States Treasury Department. Any principal remaining in the escrow
account will be transferred to PSC.
J. DECONTAMINATION AND DECOMMISSIONING
(1) If title to the ISFSI and ISFSI property has not transferred to DOE, at
the expiration or termination of this Agreement (including any extension), as a
condition of such expiration or termination DOE shall:
(a) Remove, transport and dispose of all spent nuclear fuel and the
calibration source materials from the ISFSI and ISFSI property;
-32-
<PAGE>
(b) Decontaminate and decommission the ISFSI in a manner that
satisfies all federal, state and local laws and regulations and
in a manner that complies with the decontamination and
decommissioning plan approved by the NRC;
(c) Remove and dispose of all waste from the ISFSI and ISFSI
property, including any low or high level waste, mixed waste or
greater-than class-C waste, or waste created by the operation,
maintenance, decontamination or decommissioning of the ISFSI;
(d) Take all necessary steps to support PSC's termination of its NRC
license and relieve PSC from any obligations relating to the
ISFSI, including all regulatory obligations, and reimburse PSC
for any costs associated with the termination of NRC license
requirements; and
(e) Reimburse PSC for all reasonable and allowable costs for
operation and maintenance of the ISFSI under their NRC license,
including the reasonable and allowable cost of associated
regulatory fees until decontamination and decommissioning is
complete. In addition, DOE will pay PSC annual payments in
accordance with section IV.D. above entitled "Annual Payments"
until decontamination and decommissioning is complete.
-33-
<PAGE>
(2) If title to the ISFSI and ISFSI property has not transferred to DOE, at
the expiration or termination of this Agreement (including any extension), DOE
will begin performance of the above obligations, (a) through (e), at such time
as is necessary to complete these obligations prior to termination of PSC's NRC
license under 10 C.F.R. (S) 72.54. In consideration of DOE's obligations above,
PSC agrees to cooperate with the DOE by renewing its NRC license for the ISFSI
in the unforseen event that neither an NRC-licensed monitored retrievable
storage (MRS) installation (under 10 C.F.R. (S) 72) nor geologic repository is
available for accepting the spent nuclear fuel stored in the ISFSI at least 5
years prior to the expiration of PSC's current NRC license for the ISFSI. The
reasonable and allowable costs of such renewal of PSC's NRC license will be
reimbursed by the DOE.
(3) DOE will provide PSC with at least three months prior notice of DOE's
intent to begin fulfilling its responsibilities under Section VII.J.(1), so that
PSC can notify the NRC pursuant to 10 C.F.R. (S)72.54(d) (or any subsequent
regulatory requirement). DOE, consistent with its responsibilities under this
Agreement, including its responsibility for decommissioning the ISFSI, will
prepare an appropriate final decommissioning plan for submission by PSC to the
NRC within nine months following PSC's notice to the NRC. Consistent with 10
CFR. (S)72.54 and other regulatory requirements, DOE will begin decommissioning
the ISFSI upon approval of the final decommissioning plan by the NRC, and will
complete decommissioning as soon as practicable, but no later than twenty four
months following approval of the plan. DOE will assist PSC in making any
necessary certifications and submissions of information to the NRC required by
10 C.F.R. (S)72.54(k)
-34-
<PAGE>
and (l) and other regulatory requirements, and will take all other steps
necessary to cause the NRC to terminate the NRC license.
(4) Upon transfer of title to the ISFSI and ISFSI property to DOE, or
within five business days following commencement of DOE's obligations under
paragraph (1) above, or prior to either event, as mutually agreed to between PSC
and DOE, PSC will transfer to DOE title to the two TN-FSV spent fuel shipping
casks owned by PSC that were purchased for the purpose of decommissioning the
ISFSI. PSC will furnish DOE with any pertinent existing documentation such as
certification, design, manufacturing, testing and licensing documents (subject
to any existing confidentiality agreements) necessary for the use of the
shipping casks and/or transfer to DOE, or acquisition of appropriate licenses
and/or approvals for use. DOE shall be responsible for requesting and effecting
transfer of such licenses or approvals relating to the shipping casks. All of
PSC's reasonable and allowable costs directly associated with maintaining the
shipping casks and transferring the casks to DOE will be allowable costs under
this Agreement.
(5) Whether or not title to the ISFSI and ISFSI property transfers to DOE,
PSC will contribute to the cost of decontaminating and decommissioning the ISFSI
and ISFSI property by paying DOE the full amount contained in the prefunded
escrow account required by the NRC for purposes of decommissioning the ISFSI
(less any escrow fees which may be outstanding if normally paid from escrow
funds). PSC will transfer this amount to DOE (or provide necessary access to
these funds consistent with NRC requirements) within 7 business days after NRC
approval of the final decommissioning plan if title to the ISFSI and ISFSI
property has not transferred to DOE prior to termination or expiration of this
Agreement, or,
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<PAGE>
PSC will transfer this amount to DOE on the date title to the ISFSI and ISFSI
property is transferred to DOE, whichever is first to occur. DOE will be
responsible for all other costs relating to the decontamination and
decommissioning of the ISFSI. This Agreement requires PSC to maintain this
amount in an escrow account, per NRC requirements, until such funds are
transferred to DOE. If subsequent to the execution of this Agreement, the NRC
requires PSC to place additional funds in the ISFSI decommissioning escrow
account, or otherwise to set aside additional funds for the purposes of
decommissioning the ISFSI, or for purposes related to the ISFSI or spent nuclear
fuel therein, then the costs of doing so will be a reasonable and allowable cost
under this Agreement.
-36-
<PAGE>
IN WITNESS WHEREOF, DOE and PSC have executed this Agreement by their duly
authorized representative.
- ------------------------------------------------------
United States Department of Energy
By: /s/ Brad G. Bauer
---------------------------------------------------
Brad G. Bauer
Title: Contracting Officer, Idaho Operations Office
------------------------------------------------
Date: February 9, 1996
-------------------------------------------------
- ------------------------------------------------------
Public Service Company of Colorado
By: /s/ A. Clegg Crawford
---------------------------------------------------
A. Clegg Crawford
Title: Vice President, Engineering
and Operations Support
------------------------------------------------
Date: February 9, 1996
-------------------------------------------------
-37-
<PAGE>
APPENDIX A
Property Description and Plan Map
-38-
<PAGE>
APPENDIX A TO SETTLEMENT AGREEMENT
DESCRIPTION OF PROPERTY
DESCRIPTION OF ISFSI PROPERTY, ISFSI CONTROLLED PROPERTY, AND ISFSI RIGHT OF
----------------------------------------------------------------------------
WAY.
----
The attached survey, supplemented by the descriptions below, describes the ISFSI
property and easements contemplated by this settlement agreement. Such
transfers will be accomplished, and easements granted, at the time of the
closing (transfer of title of the ISFSI to DOE) that is described in this
settlement agreement
DEEDED PROPERTY:
"Parcel A" is the ISFSI property, which consists of a parcel of land of
approximately 3.83 acres. Legal papers will be prepared by PSC for the purpose
of conveying Parcel A to DOE at the time of the closing (transfer of title of
the ISFSI to DOE) that is described in this settlement agreement. Such
conveyance will not include water rights or any subsurface mineral rights.
EASEMENTS GRANTED BY PSC:
The following easements will be granted by PSC to DOE consistent with controlled
property requirements anticipated to be necessary by the NRC for transfer of the
ISFSI 10 CFR (S) 72 license to DOE. Granting of these easements is consistent
with providing DOE with ISFSI controlled property and right of ways consistent
with that established in the current NRC 10 CFR (S) 72 license held by PSC.
. "Easement Parcel B" pertains to approximately 7.23 acres of land north and
east of the ISFSI property, Parcel A, described above. The land extends
out from the ISFSI property to the ISFSI controlled area boundary described
in connection with the NRC license. This easement will expire upon
eventual termination of the 10 CFR (S) 72 license for the ISFSI held by
DOE, its assigns, or successor organizations. Ownership of the land
described in Easement Parcel B remains with PSC.
. "Easement Parcel C" pertains to approximately 1.18 acres of land located
southwest of the ISFSI property, Parcel A, described above. The land
extends out from the ISFSI property to the ISFSI controlled area boundary
described in connection with the NRC license. This easement will expire
upon eventual termination of the 10 CFR (S) 72 license for the ISFSI held
by DOE, its assigns, or successor organizations. Ownership of the land
described in Easement Parcel B remains with PSC.
. "Access Easement D" will convey a 40 foot wide access easement (right of
way) along the road approaching the northwest corner of the ISFSI property
and entering into the ISFSI property from the north. This easement would
survive termination of the 10 CFR (S) 72 license. Ownership of the land
described in Access Easement D remains with PSC.
<PAGE>
EASEMENT GRANTED BY DOE:
The following easement will be granted by DOE to PSC in order to provide
PSC with north access to their Fort St. Vrain Generating Station, and is
consistent with controlled property requirements anticipated to be
necessary by the NRC for transfer of the ISFSI 10 CFR (S) 72 license to
DOE.
. "Access Easement E" will convey a 40 foot wide access easement (right of
way) along the road entering the ISFSI property from the north and exiting
the southwest edge of the ISFSI property. This easement would survive
termination of the 10 CFR (S) 72 license. Ownership of the portion of the
land described in Access Easement E within Parcel A remains with DOE.
<PAGE>
APPENDIX B
Description of Spent Fuel and Source Material
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<PAGE>
APPENDIX B TO SETTLEMENT AGREEMENT
DESCRIPTION OF SPENT FUEL AND SOURCE MATERIAL
Attached is documentation concerning the quantity and location of irradiated
reactor fuel at the Fort St. Vrain independent Spent Fuel Storage Installation
(ISFSI) and a copy of the source certification for the Americium-Beryllium
source to be stored at the ISFSI (Attachment SF-1, Source Certification).
Attachment SF-2, location of Spent Fuel in the ISFSI, is a listing of each fuel
storage well in the ISFSI which contains irradiated reactor fuel from Fort St.
Vrain Nuclear Generating Station and the fuel handling units (FHU or "fuel
blocks"). This information is summarized from plant records and provides
reference to appropriate procedural and reporting data.
Attachment SF-3, DOE/NRC Form 742C, Physical Inventory Listing, identifies the
total quantity of special nuclear material (SNM) in accordance with the
reporting requirements of 10 CFR 74 and includes indication of total quantity of
SNM by owner.
Attachment SF-4, ISFSI inventory, is a copy of the latest inventory of the ISFSI
storage wells and is used to identify those wells which (1) contain irradiated
reactor fuel as indicated by a seal number, (2) are empty, and (3) those
containing an empty fuel storage canister (FSC).
Additional information concerning FSV irradiated reactor fuel can be found in
plant files and the following documents submitted in accordance with Agreement
No.: DE-SCO7-79IDO1370:
(1) letter, Fuller to Petrollo, Transmittal of Spent Fuel Shipping Data,
dated February 11, 1991 (P-91073)
(2) letter, Fuller to Petrollo, Response to DOE Comments on the Fort St.
Vrain Fuel Receipt Criteria, Part A, dated December 29, 1990 (P-90368)
(3) letter, Fuller to Ofte, Transmittal of Spent Fuel Shipping Data, dated
August 31, 1989 (P-89346)
Signed:
/s/ Steven M. Goebel 02/09/1996
- -------------------------------------------------------
Steven M. Goebel, Nuclear Materials Custodian
<PAGE>
Attachment SF-1
Source Certification
<PAGE>
[SHIPPING DATA FORM OF MONSANTO RESEARCH CORPORATION APPEARS HERE]
<PAGE>
(CHART OF PERMISSABLE LEVELS OF NEUTRONS IN AIR APPEARS HERE)
<PAGE>
ATTACHMENT SF-2
Location of Spent Fuel in the ISFSI
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter #
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 A45 400-A45 12/27/91 35 0001 6-4507 5-5821 1-5888 1-4050 5-4013 6-5716 91453
- ------------------------------------------------------------------------------------------------------------------------------------
2 A44 400-A44 12/30/91 26 & 35 0002 5-5697 1-5718 5-1038 6-2723 6-2866 1-1063 91462
- ------------------------------------------------------------------------------------------------------------------------------------
4 A43 400-A43 12/31/91 30 0003 2-1319 5-1599 1-0040 1-1713 5-1020 5-2033 91465
- ------------------------------------------------------------------------------------------------------------------------------------
3s A42 400-A42 01/01/92 26 & 30 0004 5-1244 5-0448 5-1633 1-1703 2-0437 1-2784 92002
- ------------------------------------------------------------------------------------------------------------------------------------
6 A41 400-A41 01/01/92 20 & 30 0005 5-2876 1-1019 5-1693 7-0807 5-2176 5-0397 92002
- ------------------------------------------------------------------------------------------------------------------------------------
5 A40 400-A40 01/02/92 30 0006 5-0514 5-1064 1-2009 1-2316 1-4572 1-5891 92002
- ------------------------------------------------------------------------------------------------------------------------------------
7 A39 400-A39 01/02/92 20 & 35 0007 6-5701 1-2027 1-2921 6-0729 5-1141 5-2118 92005
- ------------------------------------------------------------------------------------------------------------------------------------
9 A38 400-A38 01/03/92 30 & 35 0008 5-2764 5-0507 2-2644 5-0710 1-5890 5-4485 92005
- ------------------------------------------------------------------------------------------------------------------------------------
8 A37 400-A37 01/03/92 20 & 30 0009 8-0091 1-1478 3-1980 2-0780 1-2217 1-0454 92008
- ------------------------------------------------------------------------------------------------------------------------------------
10 A36 400-A36 01/04/92 20 & 30 0010 5-1731 1-2526 1-0628 1-1048 5-0818 5-0274 92008
- ------------------------------------------------------------------------------------------------------------------------------------
12 A35 400-A35 01/04/92 26 & 34 0011 1-2395 1-2387 1-2472 1-2782 5-0830 5-2590 92008
- ------------------------------------------------------------------------------------------------------------------------------------
13 A34 400-A34 01/05/92 20 0012 5-1414 1-2448 6-2774 1-2716 5-0709 1-1783 92008
- ------------------------------------------------------------------------------------------------------------------------------------
11 A33 400-A33 01/06/92 26 & 30 0013 5-1168 2-0496 1-1905 1-2625 6-2593 1-1441 92008
- ------------------------------------------------------------------------------------------------------------------------------------
14 A32 400-A32 01/06/92 36 0014 5-5856 5-5841 1-4307 1-6008 1-1422 5-2517 92010
- ------------------------------------------------------------------------------------------------------------------------------------
15 A31 400-A31 01/07/92 30 & 34 0015 2-1831 5-0838 1-1199 5-0788 5-0972 5-0059 92010
- ------------------------------------------------------------------------------------------------------------------------------------
16 A30 400-A30 01/09/92 37 0016 2-2164 5-2506 5-0371 5-2006 1-1352 1-0270 92016
- ------------------------------------------------------------------------------------------------------------------------------------
17 A29 400-A29 01/09/92 37 0017 5-2103 5-2136 4-2435 4-0929 1-0635 5-0376 92025
- ------------------------------------------------------------------------------------------------------------------------------------
18 A28 400-A28 01/10/92 37 0018 1-2007 2-1539 5-2117 5-0999 1-0879 1-1427 92025
- ------------------------------------------------------------------------------------------------------------------------------------
19 A27 400-A27 01/10/92 37 0019 1-0924 1-0750 1-2555 5-2626 2-2892 5-1246 92019
- ------------------------------------------------------------------------------------------------------------------------------------
20 A26 400-A26 01/11/92 37 0020 1-1548 1-1644 5-0767 2-2197 5-1868 5-1431 92019
- ------------------------------------------------------------------------------------------------------------------------------------
22 A25 400-A25 01/11/92 37 0021 5-4312 1-1363 1-4983 1-6004 5-0893 3-0809 92019
- ------------------------------------------------------------------------------------------------------------------------------------
21 A24 400-A24 01/12/92 37 0022 1-1883 5-1598 2-1477 5-1995 5-0256 1-1885 92019
- ------------------------------------------------------------------------------------------------------------------------------------
24 A23 400-A23 01/15/92 24 0023 1-1609 2-5154 1-1645 8-0133 5-0992 5-0706 92023
- ------------------------------------------------------------------------------------------------------------------------------------
23 A22 400-A22 01/16/92 24 0024 2-1603 1-0280 5-0906 5-2083 5-1784 1-0605 92023
- ------------------------------------------------------------------------------------------------------------------------------------
25 A21 400-A21 01/16/92 24 0025 1-0872 5-1060 5-0626 5-0781 1-0671 1-0016 92024
- ------------------------------------------------------------------------------------------------------------------------------------
26 A20 400-A20 01/17/92 24 0026 5-1419 5-2546 1-0164 1-1893 2-0986 1-1194 92024
- ------------------------------------------------------------------------------------------------------------------------------------
28 A19 400-A19 01/17/92 24 0027 1-2647 1-2487 2-1232 1-0220 5-1047 5-0988 92026
- ------------------------------------------------------------------------------------------------------------------------------------
27 A18 400-A18 01/17/92 24 0028 5-2680 1-0936 1-1377 2-1964 1-0060 5-0741 92026
- ------------------------------------------------------------------------------------------------------------------------------------
29 A17 400-A17 01/18/92 24 0029 5-1884 5-0692 5-1798 1-1659 1-2212 3-0774 92026
- ------------------------------------------------------------------------------------------------------------------------------------
30 A16 400-A16 01/20/92 31 0030 5-0408 2-1933 1-0264 1-2287 1-2502 5-0978 92030
- ------------------------------------------------------------------------------------------------------------------------------------
32 A15 400-A15 01/21/92 31 0031 4-0758 4-0737 1-0267 5-0979 5-0105 5-2700 92031
- ------------------------------------------------------------------------------------------------------------------------------------
33 A13 400-A13 01/22/92 31 0032 1-2340 5-1124 5-0638 5-1469 2-1547 1-2536 92031
- ------------------------------------------------------------------------------------------------------------------------------------
31c A12 400-A12 01/22/92 31 0033 2-1859 1-0075 1-1241 1-1587 5-2240 5-0076 92033
- ------------------------------------------------------------------------------------------------------------------------------------
36 A11 400-A11 01/23/92 31 0034 1-0639 1-0391 5-0679 5-0104 5-0821 3-1794 92034
- ------------------------------------------------------------------------------------------------------------------------------------
35 B45 400-B45 01/24/92 31 0035 5-1200 5-0714 2-0102 1-0934 1-2639 1-1827 92035
- ------------------------------------------------------------------------------------------------------------------------------------
34c B44 400-B44 01/25/92 31 0036 5-1853 5-1395 5-0583 2-1258 1-0664 1-1007 92035
- ------------------------------------------------------------------------------------------------------------------------------------
37 B43 400-B43 01/26/92 23 0037 5-0748 1-2483 1-2690 6-0985 5-1068 5-0258 92035
- ------------------------------------------------------------------------------------------------------------------------------------
38 B42 400-B42 01/27/92 23 0038 5-1778 5-0817 1-2512 1-4387 6-0672 5-0334 92035
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter #
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
39 B41 400-B41 01/27/92 23 0039 1-2402 1-1132 6-2702 5-1935 5-0227 1-0483 92037
- ----------------------------------------------------------------------------------------------------------------------------------
40 B40 400-B40 01/28/92 23 0040 1-0656 6-0937 5-1159 5-1569 1-1384 1-2113 92037
- ----------------------------------------------------------------------------------------------------------------------------------
41 B39 400-B39 01/31/92 23 0041 6-0682 5-2122 5-1379 1-0707 1-1757 7-1630 92040
- ----------------------------------------------------------------------------------------------------------------------------------
42 B38 400-B38 01/31/92 32 0042 5-6054 1-5798 1-6006 5-4537 6-5422 5-5252 92044
- ----------------------------------------------------------------------------------------------------------------------------------
43 B37 400-B37 01/31/92 32 0043 1-2744 5-5850 6-4564 5-5336 1-0691 1-4099 92045
- ----------------------------------------------------------------------------------------------------------------------------------
44 B36 400-B36 01/31/92 32 0044 1-5393 1-2226 5-6057 6-5406 5-2304 1-2955 92045
- ----------------------------------------------------------------------------------------------------------------------------------
45 B35 400-B35 02/01/92 32 0045 5-5254 6-4101 5-2837 1-5866 1-0435 5-5881 92045
- ----------------------------------------------------------------------------------------------------------------------------------
46 B34 400-B34 02/01/92 32 0046 6-5721 5-5243 1-1655 1-2431 5-5691 7-5789 92045
- ----------------------------------------------------------------------------------------------------------------------------------
47 B33 400-B33 02/03/92 13 0047 115082 115143 115105 115123 114083 115116 92045
- ----------------------------------------------------------------------------------------------------------------------------------
48 B32 400-B32 02/03/92 13 0048 115135 115065 215021 114044 114144 114183 92046
- ----------------------------------------------------------------------------------------------------------------------------------
49 B31 400-B31 02/04/92 13 0049 115144 215151 114143 115174 114012 115071 92046
- ----------------------------------------------------------------------------------------------------------------------------------
50 B30 400-B30 02/05/92 13 0050 215042 114023 115132 113153 115165 115044 92050
- ----------------------------------------------------------------------------------------------------------------------------------
51 B29 400-B29 02/05/92 13 0051 114086 113072 113152 114071 114074 315163 92050
- ----------------------------------------------------------------------------------------------------------------------------------
52 B28 400-B28 02/06/92 13 0052 113144 113133 114065 113043 215103 113024 92056
- ----------------------------------------------------------------------------------------------------------------------------------
53 B27 400-B27 02/06/92 13 0053 114174 114175 114171 215072 114141 113123 92056
- ----------------------------------------------------------------------------------------------------------------------------------
54 B26 400-B26 02/08/92 19 0054 4-2740 1-1662 1-0271 1-0783 1-1900 4-0855 92060
- ----------------------------------------------------------------------------------------------------------------------------------
56 B25 400-B25 02/09/92 19 0055 1-2347 2-2372 1-0617 1-0933 1-0331 1-0355 92065
- ----------------------------------------------------------------------------------------------------------------------------------
57 B24 400-B24 02/09/92 19 0056 2-2704 1-1743 1-0770 1-1689 1-0320 1-2565 92065
- ----------------------------------------------------------------------------------------------------------------------------------
55c B23 400-B23 02/10/92 19 0057 1-1034 1-0465 2-2883 1-0387 1-0399 1-1407 92065
- ----------------------------------------------------------------------------------------------------------------------------------
58 B22 400-B22 02/11/92 19 0058 1-1306 1-1494 1-1409 1-0134 1-0388 3-2498 92066
- ----------------------------------------------------------------------------------------------------------------------------------
59 B21 400-B21 02/11/92 19 0059 1-1581 1-2507 1-0848 1-0290 2-2025 1-2299 92066
- ----------------------------------------------------------------------------------------------------------------------------------
60 B20 400-B20 02/12/92 19 0060 1-2467 1-2227 1-0964 2-0942 1-2451 1-2786 92067
- ----------------------------------------------------------------------------------------------------------------------------------
61 B19 400-B19 02113/92 12 0061 1-1390 1-1399 1-0182 1-0815 4-2463 1-2291 92069
- ----------------------------------------------------------------------------------------------------------------------------------
62 B18 400-B18 02114/92 12 0062 1-0403 1-2418 2-1175 1-0511 1-1665 1-0631 92070
- ----------------------------------------------------------------------------------------------------------------------------------
63 B17 400-B17 02/14/92 12 0063 1-0229 2-0078 1-0125 1-1327 1-0520 1-0046 92070
- ----------------------------------------------------------------------------------------------------------------------------------
64 B16 400-B16 02/14/92 12 0064 2-0967 1-1745 1-2875 1-2675 1-0213 1-1420 92073
- ----------------------------------------------------------------------------------------------------------------------------------
65 B15 400-B15 02/15/92 12 0065 1-0093 1-1732 1-1699 1-0402 1-0025 3-2858 92073
- ----------------------------------------------------------------------------------------------------------------------------------
67 B14 400-B14 02/15/92 12 0066 1-1281 1-2322 1-0321 2-1840 1-2505 1-0545 92073
- ----------------------------------------------------------------------------------------------------------------------------------
66 B13 400-B13 02/16/92 12 0067 1-0523 1-0312 1-1158 1-0374 2-1391 1-0433 12073
- ----------------------------------------------------------------------------------------------------------------------------------
68 B12 400-B12 02/18/92 18 0068 114184 113126 114172 114173 114166 113071 92073
- ----------------------------------------------------------------------------------------------------------------------------------
69 B11 400-B11 02/18/92 18 0069 114131 114123 215115 113146 114093 114151 92073
- ----------------------------------------------------------------------------------------------------------------------------------
70 B10 400-B10 02/19/92 18 0070 113101 215101 113112 113076 114091 113035 92074
- ----------------------------------------------------------------------------------------------------------------------------------
71 B9 400-B9 02/19/92 18 0071 215061 113042 113074 113171 113103 114105 92074
- ----------------------------------------------------------------------------------------------------------------------------------
72 BB 400-B8 02/20/92 18 0072 114106 113066 114102 114124 113125 315033 92076
- ----------------------------------------------------------------------------------------------------------------------------------
74 B7 400-B7 02/20/92 18 0073 113064 113175 114031 215086 113122 113034 92076
- ----------------------------------------------------------------------------------------------------------------------------------
73 B6 400-B6 02/21/92 18 0074 114115 113044 114153 113105 213165 115076 92077
- ----------------------------------------------------------------------------------------------------------------------------------
75 B5 400-B5 02/22/92 11 0075 1-0149 4-2523 4-2219 1-1602 1-2799 1-0338 92077
- ----------------------------------------------------------------------------------------------------------------------------------
77 B4 400-B4 02/24/92 11 0076 1-0370 2-1166 1-0080 1-2488 1-0438 1-1674 92078
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter#
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in SFSI Region YVB-XLO- P-
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
76 B2 400-B2 02/25/92 11 0077 1-1557 1-2913 2-2727 1-0096 1-1002 1-2522 92080
- ------------------------------------------------------------------------------------------------------------------------------------
79 B1 400-B1 02/26/92 11 0078 1-0260 1-1259 1-0703 1-0151 1-2547 3-1889 92080
- ------------------------------------------------------------------------------------------------------------------------------------
78 C45 400-C45 02/26/92 11 0079 2-0786 1-1629 1-1772 1-2924 1-0366 1-1944 92083
- ------------------------------------------------------------------------------------------------------------------------------------
81 C44 400-C44 02/27/92 11 0080 1-0899 1-1588 1-2301 2-2233 1-0032 1-0560 92089
- ------------------------------------------------------------------------------------------------------------------------------------
80 C43 400-C43 02/29/92 11 0081 1-1430 1-1348 1-1781 1-0203 2-2152 1-1418 92090
- ------------------------------------------------------------------------------------------------------------------------------------
82 C42 400-C42 02/21/92 11 0082 1-4152 1-4534 1-1236 1-5384 1-5892 1-2318 92090
- ------------------------------------------------------------------------------------------------------------------------------------
83 C41 400-C41 03/01/92 17 0083 1-5300 1-4022 2-4131 1-5589 1-2576 1-5411 92690
- ------------------------------------------------------------------------------------------------------------------------------------
83 C40 400-C40 03/01/92 17 0084 1-4128 2-2056 1-5726 1-2050 1-4523 1-5777 92090
- ------------------------------------------------------------------------------------------------------------------------------------
85 C39 400-C39 03/01/92 17 0085 2-5820 1-6064 1-4267 1-4057 1-1635 1-2948 92090
- ------------------------------------------------------------------------------------------------------------------------------------
86 C38 400-C38 03/02/92 17 0086 1-5875 1-4580 1-5299 1-5669 1-5356 3-5680 92101
- ------------------------------------------------------------------------------------------------------------------------------------
87 C37 400-C37 03/03/92 17 0087 1-5724 1-5897 1-4147 2-4512 1-4483 1-4156 92101
- ------------------------------------------------------------------------------------------------------------------------------------
88 C36 400-C36 03/05/92 17 0088 1-5410 1-4486 1-5297 1-5671 2-4001 1-5771 92103
- ------------------------------------------------------------------------------------------------------------------------------------
89 C35 400-C35 03/05/92 8 0089 1-5203 1-6000 1-4433 1-4222 1-4214 1-5097 92105
- ------------------------------------------------------------------------------------------------------------------------------------
90 C34 400-C34 03/06/92 8 0090 1-5200 1-1631 2-4642 1-0404 1-0266 1-4709 92105
- ------------------------------------------------------------------------------------------------------------------------------------
91 C33 400-C33 03/06/92 8 0091 1-2949 2-5812 1-6053 1-1496 1-4274 1-1708 92106
- ------------------------------------------------------------------------------------------------------------------------------------
92 C32 400-C32 03/06/92 8 0092 2-4087 1-4215 1-4155 1-2343 1-5137 1-4646 92106
- ------------------------------------------------------------------------------------------------------------------------------------
93 C31 400-C31 03/07/92 8 0093 1-0600 1-6058 1-5676 1-4070 1-4900 3-5347 92106
- ------------------------------------------------------------------------------------------------------------------------------------
94 C30 400-C30 03/07/92 8 0094 1-0423 1-4809 1-4673 1-2649 2-4469 1-5088 92106
- ------------------------------------------------------------------------------------------------------------------------------------
95 C29 400-C29 03/08/92 8 0095 1-0479 1-4762 1-2806 2-4532 1-0301 1-1668 92106
- ------------------------------------------------------------------------------------------------------------------------------------
96 C28 400-C28 03/10/92 14 0096 1-0085 1-1537 1-1370 1-0432 1-0185 4-0914 92113
- ------------------------------------------------------------------------------------------------------------------------------------
97 C27 400-C27 03/11/92 14 0097 1-0662 1-1188 2-2264 1-0875 1-1195 1-0759 92113
- ------------------------------------------------------------------------------------------------------------------------------------
98 C26 400-C26 03/11/92 14 0098 1-2311 2-2348 1-2378 1-2595 1-2503 1-2564 92116
- ------------------------------------------------------------------------------------------------------------------------------------
99 C25 400-C25 03/11/92 14 0099 2-2444 1-2133 1-0584 1-2833 1-2018 1-2204 92116
- ------------------------------------------------------------------------------------------------------------------------------------
100 C24 400-C24 03/12/92 14 0100 1-0596 1-1206 1-0887 1-2271 1-0969 3-1996 92116
- ------------------------------------------------------------------------------------------------------------------------------------
101 C23 400-C23 03/12/92 14 0101 1-1793 1-1110 1-1029 1-1238 2-2429 1-1804 92118
- ------------------------------------------------------------------------------------------------------------------------------------
102 C22 400-C22 03/13/92 14 0102 1-2706 1-2397 1-0073 2-1449 1-1470 1-1467 92118
- ------------------------------------------------------------------------------------------------------------------------------------
103 C21 400-C21 03/14/92 9 0103 1-0540 1-2686 2-1866 1-0902 1-0232 1-0124 92119
- ------------------------------------------------------------------------------------------------------------------------------------
104 C20 400-C20 03/15/92 9 0104 1-1448 2-1350 1-0950 1-0287 1-0509 1-2677 92119
- ------------------------------------------------------------------------------------------------------------------------------------
105 C19 400-C19 03/15/92 9 0105 2-0254 1-2770 1-1387 1-0142 1-1848 1-0565 92119
- ------------------------------------------------------------------------------------------------------------------------------------
106 C18 400-C18 03/15/92 9 0106 1-2398 1-2410 1-0849 1-1759 1-1983 3-2600 92119
- ------------------------------------------------------------------------------------------------------------------------------------
107 C17 400-C17 03/16/92 9 0107 1-1813 1-2874 1-2116 1-1878 2-1909 1-1712 92120
- ------------------------------------------------------------------------------------------------------------------------------------
108 C16 400-C16 03/16/92 9 0108 1-0041 1-2409 1-0313 2-2743 1-1830 1-1149 92120
- ------------------------------------------------------------------------------------------------------------------------------------
109 C15 400-C15 03/18/92 15 0109 1-4868 1-4078 1-5206 1-5727 1-4423 1-1394 92124
- ------------------------------------------------------------------------------------------------------------------------------------
110 C14 400-C14 03/19/92 15 0110 1-4567 1-4597 2-4170 1-4735 1-0808 1-0341 92124
- ------------------------------------------------------------------------------------------------------------------------------------
111 C13 400-C13 03/20/92 15 0111 1-2974 2-5762 1-4910 1-4563 1-6009 1-0634 92125
- ------------------------------------------------------------------------------------------------------------------------------------
112 C12 400-C12 03/20/92 15 0112 2-4059 1-4549 1-5408 1-5415 1-6052 1-5774 92127
- ------------------------------------------------------------------------------------------------------------------------------------
114 C11 400-C11 03/21/92 15 0113 1-1738 1-1005 1-2971 1-0468 2-4584 1-0187 92127
- ------------------------------------------------------------------------------------------------------------------------------------
113c C1O 400-C10 03/22/92 15 0114 1-2300 1-4940 1-0846 1-2562 1-6076 3-4585 92127
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter #
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
115 C9 400-C9 03/23/92 15 0115 1-0460 1-0505 1-5780 2-1580 1-2078 1-0318 92134
- ------------------------------------------------------------------------------------------------------------------------------------
116 C8 400-C8 03/27/92 10 0116 1-1162 4-2399 1-4732 1-4075 1-4511 1-5692 92142
- ------------------------------------------------------------------------------------------------------------------------------------
117 C7 400-C7 03/27/92 10 0117 1-4102 8-0199 2-1500 1-4030 1-5291 1-4047 92146
- ------------------------------------------------------------------------------------------------------------------------------------
118 C6 400-CS 03/27/92 10 0118 1-5707 2-5738 1-5854 1-5288 1-5787 1-2251 92146
- ------------------------------------------------------------------------------------------------------------------------------------
119 C5 400-CS 03/28/92 10 0119 2-4527 1-0995 1-0779 1-5307 1-2508 1-5248 92146
- ------------------------------------------------------------------------------------------------------------------------------------
120 C4 400-C4 03/28/92 10 0120 1-4449 1-5293 1-6073 1-4014 1-6072 3-2612 92146
- ------------------------------------------------------------------------------------------------------------------------------------
122 C2 400-C2 03/29/92 10 0121 1-5737 1-4074 1-4474 2-5702 1-4482 1-5298 92146
- ------------------------------------------------------------------------------------------------------------------------------------
121c C1 400-Cl 04/03/92 10 0122 1-4526 1-4040 1-5838 1-4459 2-5708 1-4031 92153
- ------------------------------------------------------------------------------------------------------------------------------------
123 D45 400-D45 04/03/92 16 0123 1-1279 1-1234 1-2365 4-0841 1-1102 1-2651 92154
- ------------------------------------------------------------------------------------------------------------------------------------
124 D44 400-D44 04/04/92 16 0124 1-4329 1-5003 2-0776 1-0325 1-0847 1-1611 92154
- ------------------------------------------------------------------------------------------------------------------------------------
125 D43 400-D43 04/04/92 16 0125 1-0358 2-2247 1-0170 1-1154 1-0763 1-5205 92154
- ------------------------------------------------------------------------------------------------------------------------------------
126 D42 400-D42 04/05/92 16 0126 2-0084 1-1734 1-2401 1-4928 1-0719 1-0842 92154
- ------------------------------------------------------------------------------------------------------------------------------------
127 D41 400-D41 04/05/92 16 0127 1-0970 1-0487 1-0246 1-0949 1-0112 3-0923 92154
- ------------------------------------------------------------------------------------------------------------------------------------
128 D40 400-D40 04/06/92 16 0128 1-0625 1-1211 1-0590 1-0018 2-0461 1-0753 92154
- ------------------------------------------------------------------------------------------------------------------------------------
129 D39 400-D39 04/06/92 16 0129 1-0966 1-0081 1-2861 2-1888 1-2252 1-2912 92155
- ------------------------------------------------------------------------------------------------------------------------------------
130 D38 400-D38 04/09/92 2 0130 1-2910 1-1371 1-2129 1-2497 1-4817 1-5115 92160
- ------------------------------------------------------------------------------------------------------------------------------------
132 D37 400-D37 04/11/92 2 0131 1-2131 2-2661 1-2537 1-2374 1-1252 1-1310 92161
- ------------------------------------------------------------------------------------------------------------------------------------
133 D36 400-D36 04/11/92 2 0132 2-2090 1-0421 1-1067 1-0473 1-0083 1-0555 92161
- ------------------------------------------------------------------------------------------------------------------------------------
131c D35 400-D35 04/11/92 2 0133 1-0289 1-2511 2-2863 1-0864 1-2375 1-0977 92161
- ------------------------------------------------------------------------------------------------------------------------------------
135 D34 400-D34 04/12/92 2 0134 1-2855 1-2789 1-2545 1-0894 2-2452 1-1270 92161
- ------------------------------------------------------------------------------------------------------------------------------------
134 D33 400-D33 04/12/92 2 0135 1-2030 1-2753 1-1187 1-1795 1-0055 3-0800 92161
- ------------------------------------------------------------------------------------------------------------------------------------
136 D32 400-D32 04/13/92 2 0136 1-2705 1-1753 1-1155 2-2162 1-0888 1-0306 92161
- ------------------------------------------------------------------------------------------------------------------------------------
137 D31 400-D31 04/14/92 5 0137 1-4506 1-4711 1-4217 1-5730 1-4011 1-5837 92163
- ------------------------------------------------------------------------------------------------------------------------------------
138 D30 400-D30 04/15/92 5 0138 8-0210 1-2205 2-6074 1-5085 1-5585 1-4468 92163
- ------------------------------------------------------------------------------------------------------------------------------------
139 D29 400-D29 04/15/92 5 0139 1-5815 2-2266 1-4565 1-0346 1-2331 8-0150 92164
- ------------------------------------------------------------------------------------------------------------------------------------
140 D28 400-D28 04/16/92 5 0140 2-5720 1-0913 1-5752 1-0451 1-0253 1-0056 92164
- ------------------------------------------------------------------------------------------------------------------------------------
141 D27 400-D27 04/18/92 5 0141 1-5222 1-5141 1-6070 1-5231 1-6078 3-4146 92167
- ------------------------------------------------------------------------------------------------------------------------------------
142 D26 400-D26 04/18/92 5 0142 1-4051 1-5710 1-5493 1-5321 2-5786 1-0519 92167
- ------------------------------------------------------------------------------------------------------------------------------------
143 D25 400-D25 04/19/92 5 0143 1-4169 1-5801 1-4015 2-4107 1-4578 1-5700 92167
- ------------------------------------------------------------------------------------------------------------------------------------
144 D24 400-D24 04/19/92 7 0144 1-0502 1-1317 1-1425 1-1358 1-2388 1-2184 92167
- ------------------------------------------------------------------------------------------------------------------------------------
145 D23 400-D23 04/20/92 7 0145 1-0489 1-0752 2-1545 1-1300 1-1752 1-1392 92168
- ------------------------------------------------------------------------------------------------------------------------------------
146 D22 400-D22 04/20/92 7 0146 1-2635 2-2236 1-1789 1-2804 1-1454 1-2297 92168
- ------------------------------------------------------------------------------------------------------------------------------------
147 D21 400-D21 04/21/92 7 0147 2-0244 1-2717 1-1879 1-0218 1-0201 1-1765 92168
- ------------------------------------------------------------------------------------------------------------------------------------
148 D20 400-D20 04/21/92 7 0148 1-0826 1-2810 1-0883 1-1364 1-0106 3-1755 92169
- ------------------------------------------------------------------------------------------------------------------------------------
150 D19 400-D19 04/22/92 7 0149 1-2405 1-0133 1-1579 2-0217 1-1326 1-1762 92172
- ------------------------------------------------------------------------------------------------------------------------------------
149c D18 400-D18 04/23/92 7 0150 1-0361 1-1466 1-0897 1-2426 2-1226 1-2805 92172
- ------------------------------------------------------------------------------------------------------------------------------------
151 D17 400-D17 04/25/92 4 0151 1-4686 1-5745 1-0356 1-4386 1-6050 1-4045 92173
- ------------------------------------------------------------------------------------------------------------------------------------
152 D16 400-D16 04/25/92 4 0152 1-0971 2-4010 1-4119 2-4068 1-2958 1-4844 92173
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter #
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C> <C> <C> <C>
153 D15 400-D15 04/26/92 4 0153 1-6007 1-5672 1-4425 1-5090 1-5143 1-2950 92173
- --------------------------------------------------------------------------------------------------------------------------------
154 D14 400-D14 04/26/92 4 0154 2-5350 1-2959 1-4979 1-5342 1-1939 1-6010 92173
- --------------------------------------------------------------------------------------------------------------------------------
155 D13 400-D13 04/26/92 4 0155 2-4509 1-0973 2-5426 1-4501 1-5259 1-5818 92173
- --------------------------------------------------------------------------------------------------------------------------------
156 D12 400-D12 04/27/92 4 0156 1-4379 1-6049 1-4624 3-1432 1-4175 1-2972 92175
- --------------------------------------------------------------------------------------------------------------------------------
157 D11 400-D11 04/29/92 4 0157 1-2742 1-2552 1-5417 1-5431 1-4049 1-5068 92179
- --------------------------------------------------------------------------------------------------------------------------------
159 D10 400-D10 04/30/92 1 0158 1-0896 1-2904 2-2884 1-1242 1-0383 1-1237 92184
- --------------------------------------------------------------------------------------------------------------------------------
160 D9 400-D9 05/01/92 1 0159 1-2141 2-1982 1-1718 1-0823 1-1445 1-0939 92184
- --------------------------------------------------------------------------------------------------------------------------------
162 D8 400-D8 05/02/92 1 0160 1-2762 1-2489 1-2036 1-1929 1-2828 3-1090 92185
- --------------------------------------------------------------------------------------------------------------------------------
158c D7 400-D7 05/03/92 1 0161 1-0310 1-2454 1-0708 1-2843 1-2915 1-0015 92185
- --------------------------------------------------------------------------------------------------------------------------------
163 D6 400-D6 05/03/92 1 0162 1-1360 1-1507 1-2060 1-0001 2-2761 1-2442 92185
- --------------------------------------------------------------------------------------------------------------------------------
161c O5 400-D5 05/03/92 1 0163 2-1260 1-1723 1-0486 1-1770 1-2808 1-1453 92185
- --------------------------------------------------------------------------------------------------------------------------------
164 D4 400-D4 05/04/92 1 0164 1-1173 1-0189 1-1672 2-2477 1-0458 1-2450 92185
- --------------------------------------------------------------------------------------------------------------------------------
165 D2 400-D2 05/06/92 6 0165 1-2500 1-1263 1-0866 1-1736 1-0144 4-0697 92186
- --------------------------------------------------------------------------------------------------------------------------------
166 D1 400-D1 05/07/92 6 0166 1-0987 1-1763 2-0548 1-1042 1-0257 1-0307 92186
- --------------------------------------------------------------------------------------------------------------------------------
167 E45 400-E45 05/07/92 6 0167 1-2812 2-2739 1-2363 1-1710 1-1214 1-1139 92187
- --------------------------------------------------------------------------------------------------------------------------------
168 E44 400-E44 05/07/92 6 0168 2-2413 1-1907 1-2533 1-1769 1-1174 1-1100 92187
- --------------------------------------------------------------------------------------------------------------------------------
169 E43 400-E43 05/08/92 6 0169 1-1746 1-2296 1-1508 1-0173 1-0155 3-2421 92188
- --------------------------------------------------------------------------------------------------------------------------------
170 E42 400-E42 05/09/92 6 0170 1-1902 1-1368 1-1265 1-1443 2-2694 1-1193 92188
- --------------------------------------------------------------------------------------------------------------------------------
171 E41 400-E41 05/09/92 6 0171 1-2114 1-0235 1-1157 2-1774 1-2273 1-2469 92188
- --------------------------------------------------------------------------------------------------------------------------------
172 E40 400-E40 05/10/92 3 0172 113023 113115 113075 113046 114142 1-2476 92188
- --------------------------------------------------------------------------------------------------------------------------------
173 E39 400-E39 05/11/92 3 0173 113132 115136 215045 113111 114066 113135 92188
- --------------------------------------------------------------------------------------------------------------------------------
174 E38 400-E38 05/11/92 3 0174 115032 215166 114185 114103 114081 114045 92191
- --------------------------------------------------------------------------------------------------------------------------------
175 E37 400-E37 05/11/92 3 0175 215126 114112 115051 115164 115054 114084 92191
- --------------------------------------------------------------------------------------------------------------------------------
176 E36 400-E36 05/12/92 3 0176 114043 113173 114056 114156 114164 315085 92193
- --------------------------------------------------------------------------------------------------------------------------------
177 E35 400-E35 05/12/92 3 0177 115106 114133 115093 114063 215053 113033 92193
- -------------------------------------------------------------------------------------------------------------------------------
178 E34 400-E34 05/13/92 3 0178 114104 114051 115153 215122 114026 113083 92193
- --------------------------------------------------------------------------------------------------------------------------------
180 E33 400-E33 05/14/92 36 0179 3-5086 5-5260 5-4037 1-5761 1-5378 1-5428 92195
- --------------------------------------------------------------------------------------------------------------------------------
181 E32 400-E32 05/15/92 36 0180 5-5396 5-6068 1-2960 1-5136 1-5046 5-5857 92195
- --------------------------------------------------------------------------------------------------------------------------------
179c E31 400-E31 05/15/92 36 0181 5-4471 5-6084 1-5725 1-2975 1-5813 5-5279 92197
- --------------------------------------------------------------------------------------------------------------------------------
182 E30 400-E30 05/15/92 25 0182 2-4462 1-4040 5-6080 5-5452 5-5394 1-4978 92197
- --------------------------------------------------------------------------------------------------------------------------------
183 E29 400-E29 05/16/92 25 0183 1-4923 5-5326 5-5234 5-5227 1-5578 1-4275 92197
- --------------------------------------------------------------------------------------------------------------------------------
184 E28 400-E28 05/16/92 36 0184 2-5722 5-1474 5-1958 1-4964 1-5353 1-5424 92197
- --------------------------------------------------------------------------------------------------------------------------------
185 E27 400-E27 05/16/92 25 0185 3-5670 1-5089 5-5908 5-4487 5-4731 1-5675 92197
- --------------------------------------------------------------------------------------------------------------------------------
186 E26 400-E26 05/17/92 25 0186 1-4582 5-1061 5-5327 5-5844 1-0674 1-2655 92197
- --------------------------------------------------------------------------------------------------------------------------------
187 E25 400-E25 05/17/92 25 & 36 0187 5-6083 2-0859 5-5229 2-4094 1-6079 2-5848 92197
- --------------------------------------------------------------------------------------------------------------------------------
188 E24 400-E24 05/17/92 21 & 25 0188 1-4364 1-1962 1-1934 2-4023 1-0622 2-4129 92197
- --------------------------------------------------------------------------------------------------------------------------------
189 E23 400-E23 05/18/92 28 & 21 0189 5-1857 1-1492 2-5715 5-5678 5-5855 5-5377 92197
- --------------------------------------------------------------------------------------------------------------------------------
190 E22 400-E22 05/18/92 28 0190 1-0020 2-5746 1-2023 1-1802 5-5379 5-0103 92198
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ISFSI Date From Transaction P-Letter #
LOAD ISFSI Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
191 E21 400-E21 05/19/92 21 0191 1-5859 3-2411 5-5272 5-4024 5-1493 1-0718 92198
- -----------------------------------------------------------------------------------------------------------------------------------
192 E20 400-E20 05/19/92 21 0192 2-1219 5-5381 5-5803 5-4130 1-4541 1-5900 92200
- -----------------------------------------------------------------------------------------------------------------------------------
193 E19 400-E19 05/19/92 21 0193 5-5335 5-5241 5-5302 1-4467 1-1181 1-5839 92200
- -----------------------------------------------------------------------------------------------------------------------------------
194 E18 400-E18 05/20/92 21 & 27 0194 2-2076 1-0522 1-2029 5-0861 5-0693 5-2465 92200
- -----------------------------------------------------------------------------------------------------------------------------------
195 E17 400-E17 05/20/92 21 0195 5-4499 5-0895 5-2168 1-1696 1-0466 1-5719 92202
- -----------------------------------------------------------------------------------------------------------------------------------
196 E16 400-E16 05/21/92 21 0196 5-6060 5-1481 1-0051 1-0410 1-1426 2-2356 92202
- -----------------------------------------------------------------------------------------------------------------------------------
197 El5 400-El5 05/21/92 25 0197 5-2052 5-6081 5-5269 1-0482 1-4054 2-5380 92202
- -----------------------------------------------------------------------------------------------------------------------------------
198 E14 400-E14 05/21/92 25 0198 5-5315 5-5807 1-4461 1-4895 2-2267 1-4335 92203
- -----------------------------------------------------------------------------------------------------------------------------------
199 E13 400-E13 05/21/92 21 & 25 0199 1-6065 1-4426 2-0527 5-5735 1-5176 5-5339 92203
- -----------------------------------------------------------------------------------------------------------------------------------
200 E12 400-E12 05/22/92 33 0200 1-5779 2-5689 1-5367 5-4058 5-5414 1-1125 92203
- -----------------------------------------------------------------------------------------------------------------------------------
201 E11 400-E11 05/22/92 33 0201 6-4350 1-4060 5-6082 5-5395 5-5368 1-4244 92204
- -----------------------------------------------------------------------------------------------------------------------------------
202 E1O 400-E10 05/22/92 33 0202 1-4504 1-4157 4-0474 5-4104 1-5811 1-5802 92204
- -----------------------------------------------------------------------------------------------------------------------------------
203 E9 400-E9 05/23/92 33 0203 1-4601 5-5755 1-1366 1-4002 1-1229 2-5751 92204
- -----------------------------------------------------------------------------------------------------------------------------------
204 E8 400-E8 05/23/92 33 0204 5-5806 5-2721 1-4065 1-4073 2-5409 1-4103 92204
- -----------------------------------------------------------------------------------------------------------------------------------
205 E7 400-E7 05/23/92 33 0205 5-4006 1-4053 1-4392 2-5349 1-4243 1-4887 92204
- -----------------------------------------------------------------------------------------------------------------------------------
206 E6 400-E6 05/24/92 34 0206 1-5809 1-5677 3-4018 1-5372 5-5271 4-2701 92204
- -----------------------------------------------------------------------------------------------------------------------------------
207 E5 400-E5 05/24/92 34 0207 3-2215 5-2645 4-2459 4-2591 1-0309 5-1240 92204
- -----------------------------------------------------------------------------------------------------------------------------------
208 E4 400-E4 05/25/92 34 0208 5-0755 1-0568 1-2390 1-0620 5-1845 5-2026 92204
- -----------------------------------------------------------------------------------------------------------------------------------
209 E2 400-E2 05/25/92 34 & 16 & 22 0209 1-1248 1-1863 1-1619 5-1092 5-1661 2-2170 92204
- -----------------------------------------------------------------------------------------------------------------------------------
210 E1 400-El 05/25/92 34 0210 1-1724 5-1179 5-2860 2-4925 1-2796 1-4046 92204
- -----------------------------------------------------------------------------------------------------------------------------------
211 F45 400-F45 05/26/92 34 0211 5-2673 5-2484 2-5007 5-2473 1-1634 1-2734 92204
- -----------------------------------------------------------------------------------------------------------------------------------
212 F44 400-F44 05/26/92 0212 5-0917 2-1811 5-2911 1-2666 1-0925 1-1681 92205
- -----------------------------------------------------------------------------------------------------------------------------------
213 F43 400-F43 05/27/92 22 0213 1-4133 1-4153 1-1953 1-1114 1-4533 7-6067 92205
- -----------------------------------------------------------------------------------------------------------------------------------
214 F42 400-F42 05/27/92 22 0214 1-5419 1-5404 5-5768 5-5733 5-1221 2-5784 92205
- -----------------------------------------------------------------------------------------------------------------------------------
216 F41 400-F41 05/28/92 22 0215 1-2957 1-4876 1-4391 1-4242 2-5747 1-1573 92207
- -----------------------------------------------------------------------------------------------------------------------------------
215s F40 400-F40 05/28/92 22 0216 1-1683 5-5354 4-2211 5-5889 2-4095 1-5775 92207
- -----------------------------------------------------------------------------------------------------------------------------------
217 F39 400-F39 05/28/92 22 0217 1-1351 4-0740 4-1991 1-0582 2-7023 1-5698 92207
- -----------------------------------------------------------------------------------------------------------------------------------
218 F38 400-F38 05/29/92 22 & 3 0218 1-5808 1-4647 113151 2-2617 1-5731 1-4531 92207
- -----------------------------------------------------------------------------------------------------------------------------------
219 F37 400-F37 05/29/92 28 & 6 0219 1-4465 1-1089 3-1860 1-4106 1-5343 5-5816 92210
- -----------------------------------------------------------------------------------------------------------------------------------
220 F36 400-F36 05/30/92 28 0220 5-5817 5-5371 5-4502 1-4003 2-0417 1-5429 92210
- -----------------------------------------------------------------------------------------------------------------------------------
221 F35 400-F35 05/30/92 22 & 28 0221 1-4086 1-5810 1-4273 5-5433 1-4522 1-0944 92210
- -----------------------------------------------------------------------------------------------------------------------------------
222 F34 400-F34 05/30/92 28 0222 5-4542 5-5274 1-1733 5-5264 5-1600 5-5690 92210
- -----------------------------------------------------------------------------------------------------------------------------------
223 F33 400-F33 05/31/92 10 & 28 0223 1-4105 2-1941 1-6063 1-5383 5-5783 5-6090 92210
- -----------------------------------------------------------------------------------------------------------------------------------
224 F32 400-F32 05/31/92 28 & 22 0224 2-5790 1-1561 1-1190 5-4097 5-5341 1-1955 92210
- -----------------------------------------------------------------------------------------------------------------------------------
225 F31 400-F31 06/01/92 27 0225 1-2495 1-2242 5-0803 5-0756 5-0857 1-2668 92210
- -----------------------------------------------------------------------------------------------------------------------------------
226 F30 400-F30 06/01/92 27 0226 1-0154 5-2504 5-2048 5-1754 1-1255 2-2302 92211
- -----------------------------------------------------------------------------------------------------------------------------------
227 F29 400-F29 06/01/92 28 & 27 0227 5-2627 5-0534 1-4066 1-0832 2-2775 1-0687 92211
- -----------------------------------------------------------------------------------------------------------------------------------
228 F28 400-F28 06/02/92 27 0228 5-0273 1-2558 2-4108 8-0125 1-0291 5-2269 92211
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
ISFSI Date Form Transaction P-Letter #
LOAD Procedure Loaded Core Number Fuel Element Serial Numbers (To DOE)
SEQ. Vault FHPWP- in ISFSI Region YVB-XLO- P-
- ------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C> <C> <C> <C>
229 F27 400-F27 06/02/92 27 0229 1-0868 2-0011 1-2490 1-0544 5-2885 5-0539 92213
- ------------------------------------------------------------------------------------------------------------------------------
230 F28 400-F26 06/02/92 27 0230 3-1922 1-2730 1-0219 5-2040 5-0726 5-2295 92213
- ------------------------------------------------------------------------------------------------------------------------------
231 F25 400-F25 06/03/92 35 0231 1-5361 1-2947 1-4096 1-2954 5-6056 5-5223 92218
- ------------------------------------------------------------------------------------------------------------------------------
232 F24 400-F24 06/03/92 35 0232 6-4591 5-5334 5-5363 5-5694 1-4473 1-1777 92218
- ------------------------------------------------------------------------------------------------------------------------------
233 F20 400-F20 06/04/92 35 0233 5-5247 5-5273 6-2559 7-1992 5-5805 1-4196 92218
- ------------------------------------------------------------------------------------------------------------------------------
234 F19 400-Fl9 06/04/92 20 & 29 0234 1-2664 1-1930 1-5819 1-6055 2-1353 1-5392 92219
- ------------------------------------------------------------------------------------------------------------------------------
236 F15 400-Fl5 06/05/92 27 & 35 & 20 0235 5-1993 5-2544 1-0982 2-0513 1-5772 5-0853 92219
- ------------------------------------------------------------------------------------------------------------------------------
237 Fil 400-F11 06/05/92 29 0236 1-0165 2-5430 1-4034 2-5399 1-5814 1-5673 92220
- ------------------------------------------------------------------------------------------------------------------------------
235c FlO 400-F10 06/05/92 20 0237 6-1065 5-0845 6-0935 5-0869 1-2697 5-1160 92220
- ------------------------------------------------------------------------------------------------------------------------------
238 F9 400-F9 06/06/92 29 0238 5-5781 5-5782 2-5773 1-5674 1-4035 2-5778 92220
- ------------------------------------------------------------------------------------------------------------------------------
240 F8 400-F8 06/06/92 29 & 20 0239 1-4055 1-0927 1-1735 5-0784 1-5423 5-5800 92220
- ------------------------------------------------------------------------------------------------------------------------------
239 F7 400-F7 06/06/92 36 0240 5-6077 1-4965 1-2956 1-5244 5-5788 2-5427 92220
- ------------------------------------------------------------------------------------------------------------------------------
241 F6 400-F6 06/08/92 29 & 20 & 36 0241 1-5382 1-2185 5-2583 6-2598 2-5728 5-5246 92226
- ------------------------------------------------------------------------------------------------------------------------------
242 F5 400-F5 06/08/92 29 0242 5-1216 4-0959 1-4539 1-0029 1-4810 1-1846 92226
- ------------------------------------------------------------------------------------------------------------------------------
243 F2 400-F2 06/10/92 34 & 29 & 16 & 9 0243 1-0445 1-5413 112768 1-1942 111143 1-0418 92229
- ------------------------------------------------------------------------------------------------------------------------------
244 F1 400-F1 06/10/92 34 & 29 & 22 & 15 0244 5-1127 7-2434 1-2973 1-5723 1-4349 1-6062 92229
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
(1) SOURCE BLOCKS 112768 AND 111143 ARE LISTED AS S-2768 AND S-1143 IN THE FSV
FUEL ACCOUNTABILITY SYSTEM.
(2) SOURCE BLOCKS (8 FOR ALL SEGMENTS) CONTAINED SPECIAL SLOT FOR NEUTRON
STARTUP SOURCE. ALL SOURCES WERE REMOVED PRIOR TO SHIPMENT TO IDAHO OR
ISFSI.
<PAGE>
Attachment SF-3
Copies of DOE/NRC Form 742C
Physical Inventory Listing
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
DOE/NRC FORM 742C U.S. DEPARTMENT OF ENERGY APPORVED BY OMB
- -----------------------------------------------------------------------------------------------------------------------------------
(9-91) AND NOS. 1810-0800
MANDATORY DATA COLLECTION U.S. NUCLEAR REGULATORY COMMISSION AND 3150-0068
AUTHORIZED BY 10 CFR 30,40,50,70,75,150
PUBLIC LAWS 83-703,93-438,95-91 PHYSICAL INVENTORY LISTING EXPIRES 9-30-94
- -----------------------------------------------------------------------------------------------------------------------------------
1. NAME 2. DOE/NRC FORM 740M ATTACHED 4. REPORTING IDENTIFICATION SYMBOL (RIS)
PUBLIC SERVICE COMPANY OF COLORADO ( )YES (X)NO XLO
---------------------------------------------------------------------------------
16805 WELD COUNTY ROAD 19 1/2 3. INVENTORY DATE 5. LICENSE NUMBER(S)
PLATTEVILLE CO 80651-9298 09/30/1995 SNM-2504
- -----------------------------------------------------------------------------------------------------------------------------------
6. BATCH DATA
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K. L.KEY M. MEASUREMENT ID N.
MATERIAL COMP/FAC ELEMENT WEIGHT ISOTOPE WEIGHT DOE PROJECT SCRAP WT % OWNER SEQ BATCH NO.OF MEAS. MEAS. OTHER MEAS. MEAS. ENTRY
TYPE CODE NO. PRGM ISOI CODE NO. NAME ITEMS POINT BASIS POINTS METHD STATS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
E2 861 22,264 3,629 J 01
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
34 861 1,912 646 A 02
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
E3 861 767,337 375,144 J 03
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
E3 861 83 31 R 04
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
E4 861 30,905 25,080 J 05
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
7. TOTALS 822,501 404,530
- ------------------------------------------------------------------------------------------------------------------------------------
TO THE BEST OF MY KNOWLEDGE AND BELIEF, THE INFORMATION GIVEN ABOVE AND IN ANY ATTACHED SCHEDULES IS TRUE, COMPLETE, AND CORRECT.
8. SIGNATURE (SEE INSTRUCTIONS FOR PROVISIONS REGARDING CONFIDENTIALLY.) 9. TITLE 10. DATE
NUCLEAR MATERIALS MANAGER
- -----------------------------------------------------------------------------------------------------------------------------------
WARNING: FALSE STATEMENTS IN THIS CERTIFICATE MAY BE SUBJECT TO CIVIL AND/OR CRIMINAL PENALTIES NRC REGULATIONS REQUIRE THAT
SUBMISSIONS TO THE NRC AS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS 18 U S C SECTION 1001 MAKES IT A CRIMINAL OFFENSE TO
MAKE A WILLFULLY FALSE STATEMENT OR REPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHEN ITS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
DOE/NRC FORM 742C U.S. DEPARTMENT OF ENERGY APPORVED BY OMB
- -----------------------------------------------------------------------------------------------------------------------------------
(9-91) AND NOS. 1810-0800
MANDATORY DATA COLLECTION U.S. NUCLEAR REGULATORY COMMISSION AND 3150-0068
AUTHORIZED BY 10 CFR 30,40,50,70,75,150
PUBLIC LAWS 83-703,93-438,95-91 PHYSICAL INVENTORY LISTING EXPIRES 9-30-94
- -----------------------------------------------------------------------------------------------------------------------------------
1. NAME 2. DOE/NRC FORM 740M ATTACHED 4. REPORTING IDENTIFICAT ON SYMBOL (RIS)
PUBLIC SERVICE COMPANY OF COLORADO ( )YES (X)NO XLO
---------------------------------------------------------------------------------
16805 WELD COUNTY ROAD 19 1/2 3. INVENTORY DATE 5. LICENSE NUMBER(S)
PLATTEVILLE CO 80651-9298 09/30/1995 SNM-2504
- -----------------------------------------------------------------------------------------------------------------------------------
6. BATCH DATA
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K. L.KEY M. MEASUREMENT ID N.
MATERIAL COMP/FAC ELEMENT WEIGHT ISOTOPE WEIGHT DOE PROJECT SCRAP WT % OWNER SEQ BATCH NO.OF MEAS. MEAS. OTHER MEAS. MEAS. ENTRY
TYPE CODE NO. PRGM ISOI CODE NO. NAME ITEMS POINT BASIS POINTS METHD STATS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
50 861 369 290 J 01
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
7. TOTALS 369 290
- ------------------------------------------------------------------------------------------------------------------------------------
TO THE BEST OF MY KNOWLEDGE AND BELIEF, THE INFORMATION GIVEN ABOVE AND IN ANY ATTACHED SCHEDULES IS TRUE, COMPLETE, AND CORRECT.
8. SIGNATURE (SEE INSTRUCTIONS FOR PROVISIONS REGARDING CONFIDENTIALLY.) 9. TITLE 10. DATE
NUCLEAR MATERIALS MANAGER
- -----------------------------------------------------------------------------------------------------------------------------------
WARNING: FALSE STATEMENTS IN THIS CERTIFICATE MAY BE SUBJECT TO CIVIL AND/OR CRIMINAL PENALTIES NRC REGULATIONS REQUIRE THAT
SUBMISSIONS TO THE NRC AS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS 18 U S C SECTION 1001 MAKES IT A CRIMINAL OFFENSE TO
MAKE A WILLFULLY FALSE STATEMENT OR REPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHEN ITS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
DOE/NRC FORM 742C U.S. DEPARTMENT OF ENERGY APPORVED BY OMB
- -----------------------------------------------------------------------------------------------------------------------------------
(9-91) AND NOS. 1810-0800
MANDATORY DATA COLLECTION U.S. NUCLEAR REGULATORY COMMISSION AND 3150-0068
AUTHORIZED BY 10 CFR 30,40,50,70,75,150
PUBLIC LAWS 83-703,93-438,95-91 PHYSICAL INVENTORY LISTING EXPIRES 9-30-94
- -----------------------------------------------------------------------------------------------------------------------------------
1. NAME 2. DOE/NRC FORM 740M ATTACHED 4. REPORTING IDENTIFICAT ON SYMBOL (RIS)
PUBLIC SERVICE COMPANY OF COLORADO ( )YES (X)NO XLO
---------------------------------------------------------------------------------
16805 WELD COUNTY ROAD 19 1/2 3. INVENTORY DATE 5. LICENSE NUMBER(S)
PLATTEVILLE CO 80651-9298 09/30/1995 SNM-2504
- -----------------------------------------------------------------------------------------------------------------------------------
6. BATCH DATA
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K. L.KEY M. MEASUREMENT ID N.
MATERIAL COMP/FAC ELEMENT WEIGHT ISOTOPE WEIGHT DOE PROJECT SCRAP WT % OWNER SEQ BATCH NO.OF MEAS. MEAS. OTHER MEAS. MEAS. ENTRY
TYPE CODE NO. PRGM ISOI CODE NO. NAME ITEMS POINT BASIS POINTS METHD STATS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
74 861 1,912 772 A 01
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
70 861 820,506 235,203 J 02
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
70 861 83 30 R 03
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
7. TOTALS 822,501 236,005
- ------------------------------------------------------------------------------------------------------------------------------------
TO THE BEST OF MY KNOWLEDGE AND BELIEF, THE INFORMATION GIVEN ABOVE AND IN ANY ATTACHED SCHEDULES IS TRUE, COMPLETE, AND CORRECT.
8. SIGNATURE (SEE INSTRUCTIONS FOR PROVISIONS REGARDING CONFIDENTIALLY.) 9. TITLE 10. DATE
NUCLEAR MATERIALS MANAGER
- -----------------------------------------------------------------------------------------------------------------------------------
WARNING: FALSE STATEMENTS IN THIS CERTIFICATE MAY BE SUBJECT TO CIVIL AND/OR CRIMINAL PENALTIES NRC REGULATIONS REQUIRE THAT
SUBMISSIONS TO THE NRC AS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS 18 U S C SECTION 1001 MAKES IT A CRIMINAL OFFENSE TO
MAKE A WILLFULLY FALSE STATEMENT OR REPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHEN ITS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
DOE/NRC FORM 742C U.S. DEPARTMENT OF ENERGY APPORVED BY OMB
- -----------------------------------------------------------------------------------------------------------------------------------
(9-91) AND NOS. 1810-0800
MANDATORY DATA COLLECTION U.S. NUCLEAR REGULATORY COMMISSION AND 3150-0068
AUTHORIZED BY 10 CFR 30,40,50,70,75,150
PUBLIC LAWS 83-703,93-438,95-91 PHYSICAL INVENTORY LISTING EXPIRES 9-30-94
- -----------------------------------------------------------------------------------------------------------------------------------
1. NAME 2. DOE/NRC FORM 740M ATTACHED 4. REPORTING IDENTIFICAT ON SYMBOL (RIS)
PUBLIC SERVICE COMPANY OF COLORADO ( )YES (X)NO XLO
---------------------------------------------------------------------------------
16805 WELD COUNTY ROAD 19 1/2 3. INVENTORY DATE 5. LICENSE NUMBER(S)
PLATTEVILLE CO 80651-9298 09/30/1995 SNM-2504
- -----------------------------------------------------------------------------------------------------------------------------------
6. BATCH DATA
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K. L.KEY M. MEASUREMENT ID N.
MATERIAL COMP/FAC ELEMENT WEIGHT ISOTOPE WEIGHT DOE PROJECT SCRAP WT % OWNER SEQ BATCH NO.OF MEAS. MEAS. OTHER MEAS. MEAS. ENTRY
TYPE CODE NO. PRGM ISOI CODE NO. NAME ITEMS POINT BASIS POINTS METHD STATS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
83 861 11.9 5.1 A 01
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
83 861 1,512.6 1,512.6 J 02
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
83 861 2 0.3 R 03
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
7. TOTALS 3,719.5 1,518.0
- ------------------------------------------------------------------------------------------------------------------------------------
TO THE BEST OF MY KNOWLEDGE AND BELIEF, THE INFORMATION GIVEN ABOVE AND IN ANY ATTACHED SCHEDULES IS TRUE, COMPLETE, AND CORRECT.
8. SIGNATURE (SEE INSTRUCTIONS FOR PROVISIONS REGARDING CONFIDENTIALLY.) 9. TITLE 10. DATE
NUCLEAR MATERIALS MANAGER
- -----------------------------------------------------------------------------------------------------------------------------------
WARNING: FALSE STATEMENTS IN THIS CERTIFICATE MAY BE SUBJECT TO CIVIL AND/OR CRIMINAL PENALTIES NRC REGULATIONS REQUIRE THAT
SUBMISSIONS TO THE NRC AS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS 18 U S C SECTION 1001 MAKES IT A CRIMINAL OFFENSE TO
MAKE A WILLFULLY FALSE STATEMENT OR REPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHEN ITS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
DOE/NRC FORM 742C U.S. DEPARTMENT OF ENERGY APPORVED BY OMB
- -----------------------------------------------------------------------------------------------------------------------------------
(9-91) AND NOS. 1810-0800
MANDATORY DATA COLLECTION U.S. NUCLEAR REGULATORY COMMISSION AND 3150-0068
AUTHORIZED BY 10 CFR 30,40,50,70,75,150
PUBLIC LAWS 83-703,93-438,95-91 PHYSICAL INVENTORY LISTING EXPIRES 9-30-94
- -----------------------------------------------------------------------------------------------------------------------------------
1. NAME 2. DOE/NRC FORM 740M ATTACHED 4. REPORTING IDENTIFICAT ON SYMBOL (RIS)
PUBLIC SERVICE COMPANY OF COLORADO ( )YES (X)NO XLO
---------------------------------------------------------------------------------
16805 WELD COUNTY ROAD 19 1/2 3. INVENTORY DATE 5. LICENSE NUMBER(S)
PLATTEVILLE CO 80651-9298 09/30/1995 SNM-2504
- -----------------------------------------------------------------------------------------------------------------------------------
6. BATCH DATA
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
A. B. C. D. E. F. G. H. I. J. K. L.KEY M. MEASUREMENT ID N.
MATERIAL COMP/FAC ELEMENT WEIGHT ISOTOPE WEIGHT DOE PROJECT SCRAP WT % OWNER SEQ BATCH NO.OF MEAS. MEAS. OTHER MEAS. MEAS. ENTRY
TYPE CODE NO. PRGM ISOI CODE NO. NAME ITEMS POINT BASIS POINTS METHD STATS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
88 861 41 A 01
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
88 861 13,862 J 02
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
88 861 2 R 03
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
- -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------
7. TOTALS 13,905
- ------------------------------------------------------------------------------------------------------------------------------------
TO THE BEST OF MY KNOWLEDGE AND BELIEF, THE INFORMATION GIVEN ABOVE AND IN ANY ATTACHED SCHEDULES IS TRUE, COMPLETE, AND CORRECT.
8. SIGNATURE (SEE INSTRUCTIONS FOR PROVISIONS REGARDING CONFIDENTIALLY.) 9. TITLE 10. DATE
NUCLEAR MATERIALS MANAGER
- -----------------------------------------------------------------------------------------------------------------------------------
WARNING: FALSE STATEMENTS IN THIS CERTIFICATE MAY BE SUBJECT TO CIVIL AND/OR CRIMINAL PENALTIES NRC REGULATIONS REQUIRE THAT
SUBMISSIONS TO THE NRC AS COMPLETE AND ACCURATE IN ALL MATERIAL RESPECTS 18 U S C SECTION 1001 MAKES IT A CRIMINAL OFFENSE TO
MAKE A WILLFULLY FALSE STATEMENT OR REPRESENTATION TO ANY DEPARTMENT OR AGENCY OF THE UNITED STATES AS TO ANY MATTER WITHEN ITS
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Attachment SF-4
ISFSI Inventory
<PAGE>
ISFSI INVENTORY
---------------
VAULT A
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 Empty N/A
2 Empty N/A
3 Empty N/A Canister Present
4 Empty N/A
5 Empty N/A
6 Empty N/A
7 Empty N/A
8 Empty N/A
9 Empty N/A
10 Empty N/A
11 0111 0111
12 0112 0112
13 0113 0113
14 Empty N/A
15 0115 0115
16 0116 0116
17 0117 0117
18 0118 0119
19 0119 0119
20 0120 0120
21 0121 0121
22 0122 0122
23 0123 0123
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT A
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0124 0124
25 0125 0125
26 0126 0126
27 0127 0127
28 0128 0128
29 0129 0129
30 0130 0130
31 0131 0131
32 0132 0132
33 0133 0133
34 0134 0134
35 0135 0135
36 0136 0136
37 0137 0137
38 0138 0138
39 0139 0139
40 0140 0140
41 0141 0141
42 0142 0142
43 0143 0143
44 0144 0144
45 0145 0145
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT B
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 0201 0201
2 0252 0252
3 Empty N/A Canister Present
4 0254 0254
5 0205 0205
6 0206 0206
7 0257 0257
8 0258 0258
9 0209 0209
10 0210 0210
11 0261 0261
12 0212 0212
13 0213 0213
14 0214 0214
15 0215 0215
16 0216 0216
17 0217 0217
18 0218 0218
19 0219 0219
20 0220 0220
21 0221 0221
22 0222 0222
23 0223 0223
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT B
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0224 0224
25 0225 0225
26 0226 0226
27 0227 0227
28 0228 0228
29 0229 0229
30 0230 0230
31 0231 0231
32 0232 0232
33 0233 0233
34 0234 0234
35 0235 0235
36 0236 0236
37 0237 0237
38 0238 0238
39 0239 0239
40 0240 0240
41 0241 0241
42 0242 0242
43 0243 0243
44 0244 0244
45 0245 0245
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT C
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 0301 0301
2 0352 0352
3 Empty N/A Canister Present
4 0354 0354
5 0305 0305
6 0356 0356
7 0357 0357
8 0358 0358
9 0309 0309
10 0310 0310
11 0311 0311
12 0312 0312
13 0313 0313
14 0314 0314
15 0315 0315
16 0316 0316
17 0317 0317
18 0318 0318
19 0319 0319
20 0320 0320
21 0321 0321
22 0322 0322
23 0323 0323
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT C
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0324 0324
25 0325 0325
26 0326 0326
27 0327 0327
28 0328 0328
29 0329 0329
30 0330 0330
31 0331 0331
32 0332 0332
33 0333 0333
34 0334 0334
35 0335 0335
36 0336 0336
37 0337 0337
38 0338 0338
39 0339 0339
40 0340 0340
41 0341 0341
42 0342 0342
43 0343 0343
44 0344 0344
45 0345 0345
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT D
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 0401 0401
2 0452 0452
3 Empty N/A Canister Present
4 0454 0454
5 0455 0455
6 0406 0406
7 0457 0457
8 0458 0458
9 0409 0409
10 0410 0410
11 0411 0411
12 0462 0462
13 0413 0413
14 0414 0414
15 0415 0415
16 0416 0416
17 0417 0417
18 0418 0418
19 0419 0419
20 0420 0420
21 0421 0421
22 0422 0422
23 0423 0423
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT D
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0424 0424
25 0425 0425
26 0426 0426
27 0427 0427
28 0428 0428
29 0429 0429
30 0430 0430
31 0431 0431
32 0432 0432
33 0433 0433
34 0434 0434
35 0435 0435
36 0436 0436
37 0437 0437
38 0438 0438
39 0439 0439
40 0440 0440
41 0441 0441
42 0442 0442
43 0443 0443
44 0444 0444
45 0445 0445
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT E
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 0501 0501
2 0502 0502
3 Empty N/A Canister Present
4 0504 0504
5 0505 0505
6 0506 0506
7 0507 0507
8 0508 0508
9 0509 0509
10 0510 0510
11 0511 0511
12 0512 0512
13 0513 0513
14 0514 0514
15 0515 0515
16 0516 0516
17 0517 0517
18 0518 0518
19 0519 0519
20 0520 0520
21 0521 0521
22 0522 0522
23 0523 0523
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT E
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0524 0524
25 0525 0525
26 0526 0526
27 0527 0527
28 0528 0528
29 0529 0529
30 0530 0530
31 0531 0531
32 0532 0532
33 0533 0533
34 0534 0534
35 0535 0535
36 0536 0536
37 0537 0537
38 0538 0538
39 0539 0539
40 0540 0540
41 0541 0541
42 0542 0542
43 0543 0543
44 0544 0544
45 0545 0545
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT F
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 0601 0601
2 0602 0602
3 Empty N/A Damaged Canister
4 Empty N/A No Canister
5 0605 0605
6 0606 0606
7 0607 0607
8 0608 0608
9 0609 0609
10 0610 0610
11 0611 0611
12 Empty N/A Canister Present
13 Empty N/A Canister Present
14 Empty N/A Canister Present
15 0615 0615
16 Empty N/A No Canister
17 Empty N/A No Canister
18 Empty N/A Canister Present
19 0619 0619
20 0620 0620
21 Empty N/A No Canister
22 Empty N/A Canister Present
23 Empty N/A Canister Present
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT F
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
24 0624 0624
25 0625 0625
26 0626 0626
27 0627 0627
28 0628 0628
29 0629 0629
30 0630 0630
31 0631 0631
32 0632 0632
33 0633 0633
34 0634 0634
35 0635 0635
36 0636 0636
37 0637 0637
38 0638 0638
39 0639 0639
40 0640 0640
41 0641 0641
42 0642 0642
43 0643 0643
44 0644 0644
45 0645 0645
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
ISFSI INVENTORY
---------------
VAULT S
-------
<TABLE>
<CAPTION>
PREVIOUS
STORAGE INVENTORY CURRENT INVENTORY
LOCATION SEAL NUMBER SEAL NUMBER REMARKS
- -------- ----------- ----------------- -------
<S> <C> <C> <C>
1 Empty N/A No Canister
2 Empty N/A No Canister
3 Empty N/A No Canister
</TABLE>
/
----------------------------------
Initials Date
<PAGE>
APPENDIX C
Escrow Trust Account Agreement
-40-
<PAGE>
TRUST AGREEMENT
AMONG
PUBLIC SERVICE COMPANY OF COLORADO
FIRST INTERSTATE BANK OF DENVER, N. A.
AND
UNITED STATES OF AMERICA, ACTING BY AND THROUGH THE
DEPARTMENT OF ENERGY
THIS TRUST AGREEMENT (together with any amendments and supplements hereto,
this "Agreement"), dated February 13, 1996, is among Public Service Company of
Colorado (together with its successors and assigns), (PSC), the First
Interstate Bank of Denver, N. A. (together with its successors and assigns)
(First Interstate), and the United States of America, acting by and through the
Department of Energy ("DOE"), the Executive Department of the United States
established by the Department of Energy Organization Act.
RECITALS
WHEREAS, First Interstate exists and functions by virtue of the laws of the
United States and the State of Colorado and is empowered to receive, manage,
disburse, transfer, safekeep, and invest funds and securities; and
WHEREAS, PSC has entered or will enter into a Settlement Agreement
(Contract No. DE-AC07-96ID13425) with DOE relating to the settlement of PSC's
claims against DOE, as set forth in its certified claim filed with DOE on June
2, 1995, and PSC's claims against DOE now pending in the United States District
Court for the District of Columbia in Civil Action No. 95-0328; and
WHEREAS, the purpose of this Agreement is to create an escrow account for
funds as might be disbursed by DOE to PSC in accordance with this agreement and
the Settlement Agreement; and
WHEREAS, DOE has agreed to transfer $14,000,000.00 into an escrow account
at First Interstate established by PSC pursuant to the terms of the Settlement
Agreement; which provides, among other things, that DOE shall pay to PSC
$16,000,000.00 of the costs of the Independent Spent Fuel Storage Installation
(ISFSI) and in settlement of associated claims, with title to the ISFSI passing
to the DOE at such time as all applicable legal requirements for transfer are
met; and
<PAGE>
WHEREAS, PSC and DOE have determined to select and appoint First
Interstate, to receive such latter amount and to hold, manage, disburse,
transfer, safekeep, and invest funds and securities for the benefit of both PSC
and DOE under the provisions of the Settlement Agreement, and the laws of the
United States and the State of Colorado; and
WHEREAS, First Interstate is aware that earnings on the funds held in the
escrow account shall be disbursed to the Miscellaneous Receipts Account of the
United States Treasury unless disbursed to PSC as provided hereunder.
NOW, THEREFORE, in consideration of the mutual undertaking, promises and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
contract and agree as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
------------------------------
SECTION 1.01. DEFINITIONS. The following terms shall have the
--------------------------
respective meanings specified below for all purposes of this Agreement:
"Account" or "Accounts" shall mean the account or accounts within the
Escrow Trust Fund, which may be created and established pursuant to Section 2.01
hereof.
"Agreement" is defined on page 1 hereof.
"Authorized Investments" shall mean, with respect to the Escrow Trust Fund,
direct obligations of or obligations the principal and interest which are
guaranteed by the United States and/or money market funds that are entirely
comprised of U. S. Government securities.
"Authorized Representative of PSC" shall mean the President or a Vice
President of PSC, or any other Person specifically authorized in writing to
execute instructions and take other necessary actions under this Agreement on
behalf of PSC. The specimen signature of the Person or Persons designated as
Authorized Representative of PSC shall be contained in or be attached to such
designating instrument, and such designation shall be furnished to the other
parties. The designation of an Authorized Representative of a party shall remain
effective until a new written instrument is filed with or actual notice is given
to the other parties that such designation has been revoked.
"Authorized Representative of DOE" shall mean the Person designated in
writing by DOE to act for and on behalf of DOE pursuant to the Settlement
Agreement and/or this Agreement. The specimen signature of the Person or
Persons designated as Authorized
2
<PAGE>
Representative of DOE shall be contained in or be attached to such designating
instrument, and such designation shall be furnished to the other parties. The
designation of an Authorized Representative of a party shall remain effective
until a new written instrument is filed with or actual notice is given to the
other parties that such designation has been revoked.
"Authorized Representative of First Interstate" shall mean any employee of
First Interstate specifically authorized to take action on behalf of First
Interstate by a resolution of its Board of Directors.
"Beneficiaries" are DOE and PSC.
"DOE" is defined on page 1 of this Agreement.
"Escrow Release Date" is defined in Section 2.04 hereof.
"Escrow Trust Fund" shall mean the Public Service Company of Colorado ISFSI
Escrow Trust Fund, created and established pursuant to Section 2.01 hereof.
"First Interstate" shall mean the First Interstate Bank of Denver, N. A.
and its successors and assigns.
"ISFSI" shall mean the Independent Spent Fuel Storage Installation
currently owned by PSC in Weld County, Colorado, including all records,
equipment, tools, or other devices incident to the loading, unloading, and
maintenance of spent nuclear fuel and other material contents of the facility.
"ISFSI property" means the parcel of land in Weld County, Colorado, on
which the ISFSI is located. The ISFSI property is adjacent to the parcel of
land on which the decommissioned Fort St. Vrain Nuclear Generating Station
(prior to its conversion) is located.
"Letter of Instructions" shall mean a written authorization and direction
to First Interstate signed by Authorized Representatives of the Beneficiaries.
"Person" shall mean any individual, private or public corporation, and any
partnership, association, firm, trust, estate, or any other entity whatsoever.
"PSC" is defined on page 1 of this Agreement.
"Settlement Agreement" is defined on page 1 of this Agreement.
SECTION 1.02. INTERPRETATION. This Agreement and all of the terms and
-----------------------------
provisions hereof shall be liberally construed to effectuate the purposes set
forth herein.
3
<PAGE>
SECTION 1.03. TITLES AND HEADINGS. The titles and headings of the
----------------------------------
articles and sections of this Agreement have been inserted for convenience of
reference only and are not to be considered a part hereof and shall not in any
way modify or restrict the terms hereof.
ARTICLE II.
CREATION AND OPERATION OF ESCROW TRUST FUND
SECTION 2.01. CREATION OF ESCROW TRUST FUND. Pursuant to the Settlement
--------------------------------------------
Agreement, there is hereby created and established an account known and
designated as the Public Service Company of Colorado ISFSI Escrow Trust Fund
(the "Escrow Trust Fund"), to be held by First Interstate Bank. The purpose for
the creation of the Escrow Trust Fund is to hold in trust and administer certain
money received or to be received by First Interstate from DOE pursuant to the
terms of the Settlement Agreement. The Escrow Trust Fund established hereunder
shall be maintained by First Interstate as a separate and distinct trust fund
and all money and securities therein shall be held, administered, invested and
disbursed solely in accordance with the provisions of this Agreement for the
Beneficiaries and shall be immune from any levy, attachment or lien for the
benefit of any creditor of PSC, including First Interstate, and also shall be
immune from levy, attachment or lien for the benefit of any creditor of First
Interstate or DOE.
SECTION 2.02. INITIAL DEPOSIT. Pursuant to the terms of the Settlement
------------------------------
Agreement, DOE has agreed to transfer $14,000,000.00 to First Interstate. Upon
receipt of such amount, First Interstate shall immediately deposit the amount so
received into the Escrow Trust Fund.
SECTION 2.03. ANNUAL REMITTANCE. Subject to the "Escrow Release Date"
--------------------------------
provided for in Section 2.04, PSC shall be entitled to annual remittances of
$2,000,000.00 from the principal in the Escrow Trust Fund. The first annual
Remittance will be made to PSC on the first anniversary of the execution of the
Settlement Agreement, or on the first business day immediately following the
first anniversary if the first anniversary is not a business day. Subsequent
annual remittances will be made on subsequent anniversaries of the Settlement
Agreement, or on the first business day following such anniversaries.
SECTION 2.04. MONEY TO BE HELD IN TRUST. All money which is the subject
----------------------------------------
of this Agreement shall be held by First Interstate in trust for the benefit of
PSC and DOE, as their interests may appear. In managing the Escrow Trust Fund,
First Interstate shall be charged with the duty of care which applies to First
Interstate as a trustee of funds.
All money and investments in the Escrow Trust Fund shall remain in the
Escrow Trust Fund (less the annual remittances authorized in Section 2.03 and
subject to authorized investments and reinvestment therein) and shall not be
disbursed or transferred out of the Escrow Fund for any purpose until the
"Escrow Release Date." The "Escrow Release Date"
4
<PAGE>
shall be the earliest to occur of the following: (i) the date upon which First
Interstate receives a certificate executed by an Authorized Representative of
DOE, in the form of Exhibit A hereto, certifying that title to the ISFSI and the
ISFSI property has vested in DOE; or (ii) the date upon which First Interstate
receives a certificate executed by an Authorized Representative of DOE, in the
form of Exhibit B hereto certifying that the Settlement Agreement has been
terminated pursuant to its terms.
If the Escrow Release Date occurs pursuant to the provisions of clause (i)
above, First Interstate shall hold all amounts, including investment and
interest income therein, in the Escrow Trust Fund for the sole account of PSC,
and shall disburse and transfer all amounts, including investment and interest
income therein, in the Escrow Trust Fund pursuant to written instructions
provided to First Interstate by an Authorized Representative of PSC.
If the Escrow Release Date occurs pursuant to the provisions of clause (ii)
above, First Interstate, on the business day next following the Escrow Release
Date, shall transfer to the Miscellaneous Receipts Account of the U. S.
Treasury, pursuant to the written instructions jointly prepared by Authorized
Representatives of DOE and PSC, all investment and interest income in the Escrow
Trust Fund, and shall transfer to PSC, pursuant to the written instructions of
an Authorized Representative of PSC, all remaining principal, if any, in the
Escrow Trust Fund.
SECTION 2.05. SECURITY OF CASH BALANCES. Cash balances on deposit in the
----------------------------------------
Escrow Trust Fund from time to time, may not exceed the amount insured by the
Federal Deposit Insurance Corporation or a successor federal agency or
instrumentality.
SECTION 2.06. SEPARATION OF FUNDS. Funds and Authorized Investments of
----------------------------------
the Escrow Trust Fund shall be maintained separate and apart from all other
funds and investments held by First Interstate. When and to the extent
authorized in advance in writing by the Beneficiaries, the money and investments
of the Escrow Trust Fund may be commingled with other funds held by First
Interstate for investment purposes, only to the extent required, in the judgment
of First Interstate, to obtain the highest and best investment yield then
available to the Escrow Trust Fund as a whole, taking into account anticipated
or required withdrawals of money that may restrict investment opportunities.
5
<PAGE>
ARTICLE III
INVESTMENT OF FUND BALANCES
---------------------------
SECTION 3.01. INVESTMENT OF MONEY IN FUND ACCOUNTS AND SUBACCOUNTS. To
-------------------------------------------------------------------
the extent commercially feasible, money held in the Escrow Trust Fund, Account,
and Subaccounts shall be promptly and fully invested at all times and reinvested
by First Interstate in Authorized Investments, selected pursuant to instructions
by an Authorized Representative of PSC. First Interstate shall not act on any
instructions from PSC to invest in other than Authorized Investments. In the
event First Interstate is so instructed, First Interstate will inform DOE
immediately. In the absence of instructions, at any time and as to all amounts
held in the Escrow Trust Fund, First Interstate is authorized to invest in
Authorized Investments selected at its own discretion, using prudent investment
standards. Each investment security shall at all times be a part of the Escrow
Trust Fund, Account or Subaccount from which the money was applied to acquire
such investment security. In computing the amount in the Escrow Trust Fund for
purposes of this Agreement, such Authorized Investments shall be valued at their
market value. Subject to the provisions of Sections 2.03 and 2.04 hereof, First
Interstate shall make funds available whenever necessary in order to provide
money for payment of any amounts requested to be paid from the Escrow Trust
Fund.
SECTION 3.02. EARNINGS AND LOSSES FROM INVESTMENTS. All earnings and
---------------------------------------------------
profits and losses from Authorized Investments shall be accounted for and
maintained separately in a subaccount. DOE shall not be liable for any loss of
interest, interest penalties or loss of principal incurred as a result of
investments, reinvestment, or withdrawals from the Escrow Trust Fund. The
principal of the Escrow Trust Fund shall not be charged for any loss of
interest, interest penalties, or loss of principal incurred as a result of
investments, reinvestment, or withdrawals from the Escrow Trust Fund.
SECTION 3.03. LIABILITY. First Interstate shall not be held liable for
------------------------
any action or omission to act pursuant to this Agreement that does not
constitute a breach of trust unless such action or omission to act is due to
gross negligence (negligence in the case of a breach of trust) or willful
misconduct. Neither PSC nor its directors, officers or employees shall be held
liable to DOE or any other Person for any act or omission to act with regard to
investment of amounts in the Escrow Trust Fund.
6
<PAGE>
ARTICLE IV.
RECORDS, REPORT AND EXPENSES
----------------------------
SECTION 4.01. RECORDS. First Interstate shall keep books of records and
----------------------
accounts in which complete and correct entries shall be made of all transactions
relating to the receipts, disbursements, allocations and applications of the
money and Authorized Investments deposited to the Escrow Trust Fund and all
proceeds thereof in accordance with generally accepted accounting principles.
Such books shall be available for inspection by PSC or DOE at any time during
normal business hours. First Interstate shall permit PSC and DOE, at any time
during normal business hours, to copy all or any portion of such books and
records, and shall furnish to PSC and DOE such information as PSC and DOE may
reasonably request, all as may be reasonably necessary for assuring compliance
with the requirements of this Agreement.
SECTION 4.02. REPORTS. First Interstate shall submit to PSC and DOE,
----------------------
promptly after the end of each calendar quarter, a report of its transactions
during such quarter relating to the funds and securities held under this
Agreement.
First Interstate shall furnish PSC and DOE with such other information
relating to the Escrow Trust Fund, and the money and securities held therein as
PSC or DOE may reasonably request from time to time.
SECTION 4.03. FEES AND EXPENSES. PSC shall and hereby agrees to pay First
--------------------------------
Interstate from time to time an amount to compensate for the service of
performing its duties under this Agreement, as established by the schedule
attached to this Agreement as Exhibit C. First Interstate shall provide PSC
each calendar quarter with an itemized invoice and shall advise PSC of any
amendment to Exhibit C at least ten business days prior to the effective date of
such amendment.
ARTICLE V.
FIRST INTERSTATE
SECTION 5.01. CERTAIN DUTIES AND RESPONSIBILITIES OF FIRST INTERSTATE.
----------------------------------------------------------------------
First Interstate undertakes to perform such duties and only such duties as are
specifically set forth in this Trust Agreement and no implied covenants or
obligations shall be read into this Trust Agreement against First Interstate.
In the absence of bad faith on its part, First Interstate may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to First Interstate
and conforming to the requirements of this Trust Agreement; but in the case of
any such certificates or opinions which by any provision
7
<PAGE>
hereof are specifically required to be furnished to First Interstate, First
Interstate shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement.
First Interstate shall not be held liable for any action taken by it in the
performance or administration of the trust herein created that does not result
from its own gross negligence (negligence in the case of a breach of trust) or
willful misconduct, and no provision of this Trust Agreement shall be construed
to relieve First Interstate from liability for its own grossly negligent action
(negligent action in the case of a breach of trust), its own grossly negligent
failure to act (negligent failure to act in the case of a breach of trust), or
its own willful misconduct, except that:
(1) this paragraph shall not be construed to limit the effect of the
first paragraph of this Section;
(2) First Interstate shall not be liable for any error of judgment made
in good faith, unless it shall be proved that First Interstate was grossly
negligent (negligent in the case of a breach of trust) in ascertaining the
pertinent facts; and
(3) no provision of this Trust Agreement shall require First Interstate
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or indemnity satisfactory to it
against such risk of liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to First Interstate shall be subject to the provisions of this
Section.
SECTION 5.02. CERTAIN RIGHTS OF FIRST INTERSTATE. Except as otherwise
-------------------------------------------------
provided in Section 5.01:
(1) First Interstate may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(2) any request or direction of PSC or of DOE shall be sufficiently
evidenced by a certificate signed by an Authorized Representative of PSC or
of DOE, as the case may be;
8
<PAGE>
(3) whenever in the administration of this Trust Agreement First
Interstate shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, First
Interstate (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon a certificate signed by
an Authorized Representative of PSC or of DOE, as the case may be;
(4) First Interstate may consult with legal counsel appointed by it
with due care and the written advice of such legal counsel or any opinion
of counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by First Interstate
hereunder in good faith and in reliance thereon;
(5) First Interstate shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond or other paper or document, but First Interstate, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if First Interstate shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of PSC, personally or by agent or attorney;
(6) First Interstate may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys appointed with due care by it hereunder;
(7) First Interstate shall not be obligated to pay interest on any
money received by it and held in cash except as expressly provided herein
and except as First Interstate may expressly agree in writing;
(8) It shall not be the duty of First Interstate, except as expressly
herein permitted, to see that any duties or obligations herein imposed upon
PSC, DOE or other Persons are performed, and First Interstate shall not be
liable or responsible because of the failure of PSC, DOE or other such
Persons to perform any act required of them by this Trust Agreement;
(9) First Interstate shall not be accountable for the use or
application of any money paid to PSC or DOE pursuant to the provisions
hereof;
(10) In the event of any dispute with respect to the disposition of
funds hereunder, First Interstate is hereby expressly authorized to comply
with and obey any and all orders, judgments or decrees of any court, and in
case First Interstate obeys or complies with any such order, judgment or
decree of any court it shall not be liable to any of the parties hereto or
any other person, firm, or corporation by reason of such compliance,
notwithstanding any such order, judgment or decree be
9
<PAGE>
subsequently reversed, modified, annulled, set aside or vacated, or found
to have been entered without jurisdiction; and
(11) In the event of any dispute with respect to the disposition of
funds hereunder, the First Interstate may in its sole and absolute
discretion, deposit the property described herein or so much thereof as
remains in its hands with the appropriate federal court having jurisdiction
hereof, and interpleading parties hereto, and upon so depositing such
property and filing its complaint in interpleader it shall be relieved of
all liabilities under the terms hereof as to the property so deposited, and
furthermore, the parties hereto for themselves, their heirs, legal
representatives, successors and assigns do hereby submit themselves to the
jurisdiction of said federal court and do hereby appoint the then Clerk, or
acting clerk, of said federal court as their agent for the service of all
process in connection with such proceedings. The institution of any such
interpleader action shall not impair the rights of First Interstate.
SECTION 5.03. RESIGNATION AND REMOVAL OF FIRST INTERSTATE; APPOINTMENT OF
--------------------------------------------------------------------------
SUCCESSOR. No resignation or removal of First Interstate pursuant to this
- ---------
Section shall become effective until the acceptance of appointment by the
successor to First Interstate rights, duties and obligations under this
Agreement, such appointment to be made under Section 5.04 hereof.
First Interstate may resign from its duties hereunder at any time by giving
written notice thereof to PSC and DOE, but only if there shall be another Person
legally qualified, willing to accept the duties to be resigned by First
Interstate. If an instrument of acceptance by a successor to First Interstate
hereunder shall not have been delivered to First Interstate within 30 days after
the giving of such notice of resignation, First Interstate may petition any
court of competent jurisdiction for the appointment of a successor to First
Interstate's duties hereunder, to the extent permitted by applicable law.
First Interstate may be removed from its duties hereunder at any time
following payment in full of all accrued but unpaid First Interstate's fees and
expenses, upon the delivery of a notice of removal by PSC and DOE to First
Interstate, but only if there shall be another Person legally qualified pursuant
to applicable law and willing to accept the duties to be resigned by First
Interstate.
If First Interstate shall resign, be removed or become incapable of
discharging its duties hereunder, PSC and DOE shall promptly appoint a successor
to First Interstate hereunder, which shall be legally qualified pursuant to
applicable law and willing to accept the duties to be resigned by First
Interstate.
10
<PAGE>
SECTION 5.04. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TO FIRST INTERSTATE
-------------------------------------------------------------------------
HEREUNDER. Every successor to First Interstate appointed hereunder shall
- ---------
execute, acknowledge and deliver to PSC, DOE and the retiring First Interstate
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring First Interstate shall become effective and such
successor to First Interstate hereunder, without any further act, deed or
conveyance, shall become vested with all the estates, properties, rights,
powers, trusts and duties of the retiring First Interstate.
Notwithstanding the preceding paragraph of this Section, on request of PSC,
DOE or the successor to First Interstate hereunder, such retiring Person having
been appointed as a successor trustee shall execute and deliver an instrument
conveying and transferring to such successor to First Interstate hereunder upon
the trusts herein expressed all the estates, properties, rights, powers and
trusts of the retiring First Interstate, and shall duly assign, transfer and
deliver to such successor to First Interstate hereunder all property and money
held by such retiring First Interstate.
Upon the request of any such successor to First Interstate hereunder, PSC
and DOE shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor to First Interstate hereunder all
such estates, properties rights, powers and trusts.
No successor to First Interstate hereunder shall accept its appointment
unless at the time of such acceptance such successor to First Interstate
hereunder shall be qualified and eligible under applicable law to accept such
duties and shall have been approved in writing by DOE and PSC.
11
<PAGE>
ARTICLE VI.
MISCELLANEOUS
-------------
SECTION 6.01. NOTICES. Any notice, authorization, request, or demand
----------------------
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when mailed by registered or certified mail,
postage prepaid addressed as follows:
To PSC:
Richard C. Kelly
Senior Vice President Finance, Treasurer
and Chief Financial Officer
Public Service Company of Colorado
1225 17th Street Plaza
Denver, CO 80202-5533
or
P. O. Box 840
Denver, CO 80201-0840
To First Interstate:
First Interstate Bank of Denver, N. A.
Corporate Trust Department
633 Seventeenth Street, 21st Floor
Denver, CO 80270
Attention: Bruce F. Lewis
To DOE:
Brad G. Bauer
Contracting Officer, Idaho Operations Office
United States Department of Energy
850 Energy Drive
Idaho Falls, Idaho 83401-1563
A United States Post Office registered or certified mail receipt showing
delivery of the aforesaid shall be conclusive evidence of the date and fact of
delivery. Any party hereto may change the address to which notices are to be
delivered by giving to the other parties not less than ten calendar days prior
notice thereof.
SECTION 6.02. AMENDMENTS. This Agreement may be amended or supplemented
-------------------------
only if evidenced in a writing signed by all parties.
12
<PAGE>
SECTION 6.03. TERMINATION. On or prior to the business day next following
--------------------------
the Escrow Release Date, this Agreement may be terminated only by written
agreement of DOE, PSC and First Interstate. After the business day following
the Escrow Release Date, this Agreement may be terminated by PSC or First
Interstate, with or without cause, by tendering thirty (30) days prior written
notice to the other and to DOE in the manner set forth in Section 6.01 hereof.
SECTION 6.04. LIMITATION OF RIGHTS. With the exception of the rights
-----------------------------------
herein expressly conferred, nothing in or to be implied from this Agreement is
intended or shall be construed to give any person other than the parties hereto
(and their successors and assigns) any legal or equitable right, remedy or claim
under or in respect to this Agreement or in any of the covenants, conditions and
provisions herein contained; this Agreement and all of the covenants, conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto (and their successors and assigns) as provided for
herein. First Interstate shall not be liable for any losses from investments
made and transfers made in accordance with the standards and procedure set forth
in this Agreement except as specifically set forth herein.
SECTION 6.05. BINDING AGREEMENT. This Agreement shall be binding upon
--------------------------------
PSC, DOE and First Interstate and their respective successors, assigns and legal
representatives, and shall inure solely to the benefit of PSC, DOE, and First
Interstate and their respective successors, assigns and legal representatives.
SECTION 6.06 SEVERABILITY. In case any one or more of the provisions
-------------------------
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, but this Agreement
shall be construed as if such invalid or illegal or unenforceable provision had
never been contained herein.
SECTION 6.07 GOVERNING LAW. This Agreement shall be governed by and
--------------------------
construed in accordance with the laws of the State of Colorado, except where
federal law requires a different result with respect to the rights and
obligations of DOE, and is performable in Denver County, Colorado.
SECTION 6.09. MULTIPLE COUNTERPARTS. This Agreement may be executed in
------------------------------------
multiple counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument.
13
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Trust Agreement to be
executed by their respective duly authorized officers effective as of the date
late written below.
PUBLIC SERVICE COMPANY OF COLORADO
By:
-----------------------------------------------------------
A. Clegg Crawford Date
Vice President, Engineering and Operations Support
FIRST INTERSTATE BANK OF DENVER, N. A.
By:
-----------------------------------------------------------
Bruce F. Lewis Date
Vice President and Trust Officer
UNITED STATES OF AMERICA
ACTING BY AND THROUGH THE DEPARTMENT OF ENERGY
By:
-----------------------------------------------------------
Brad G. Bauer Date
Contracting Officer, Idaho Operations Office
<PAGE>
EXHIBIT A
CERTIFICATION OF TITLE TRANSFER
-------------------------------
The undersigned, a duly authorized representative of the U.S. Department of
Energy, hereby certifies to First Interstate Bank of Denver, N.A. that,
effective , 199 , title to the Independent Spent Fuel Storage
---------------- -
Installation (ISFSI) and the ISFSI property has been transferred from the Public
Service Company of Colorado to the U.S. Department of Energy.
______________________________
(Name)
______________________________
(Title)
U.S. Department of Energy
______________________________
(Date)
In witness hereof:
___________________________
(Name)
___________________________
(Title)
___________________________
(Organization)
<PAGE>
EXHIBIT B
CERTIFICATION OF TERMINATION
----------------------------
The undersigned, a duly authorized representative of the U.S. Department of
Energy, hereby certifies to First Interstate Bank of Denver, N.A. that,
effective , 199 , the Settlement Agreement executed between
------------ -
the Public Service Company of Colorado and the U.S. Department of Energy on
February 9, 1996, was terminated in accordance with its terms.
______________________________
(Name)
______________________________
(Title)
U.S. Department of Energy
______________________________
(Date)
In witness hereof:
__________________________
(Name)
__________________________
(Title)
__________________________
(Organization)
<PAGE>
First Interstate Bank
of Denver, N.A.
633 Seventeenth Street
First Denver, CO 80270
Interstate 303-293-2211
Bank
EXHIBIT C
---------
Fees for serving under the escrow trust agreement are as follows:
Administration fee: $2,500.00 quarterly, billed in
advance, commencing 2/1/96
Out-of-pocket expenses: as incurred, reflected on
quarterly invoices
Dated: as of 2/7/96
<PAGE>
APPENDIX D
Coverage and Indemnity Under the Price Anderson Act
-41-
<PAGE>
APPENDIX D TO SETTLEMENT AGREEMENT
COVERAGE AND INDEMNITY UNDER THE PRICE ANDERSON ACT, AS AMENDED, 42 U.S.C. (S)
2210, ET SEQ. (SECTION 170D OF THE ATOMIC ENERGY ACT OF 1954, AS AMENDED)
------
(a) Authority and Applicability. This clause is incorporated into this
Agreement pursuant to the authority contained in subsection 170d. of
the Atomic Energy Act of 1954, as amended (hereinafter called the Act)
and shall apply only if PSC is not subject to Nuclear Regulatory
Commission (NRC) financial protection requirements under section 170b.
of the Act or NRC indemnification under section 170c. or k. of the Act
for activities under this Agreement.
(b) Definitions. The definitions set out in the Act shall apply to this
clause.
(c) Financial protection. Except as hereafter permitted or required in
writing by DOE, PSC will not be required to provide or maintain, and
will not provide or maintain at Government expense, any form of
financial protection to cover public liability, as described in
paragraph (d)(2) below. DOE may, however, at any time require in
writing that PSC provide and maintain financial protection of such a
type and in such amount as DOE shall determine to be appropriate to
cover such public liability, provided that the costs of such financial
protection are reimbursed to the contractor by DOE.
(d) Indemnification.
-1-
<PAGE>
(1) To the extent that PSC and other persons indemnified are not
compensated by any financial protection permitted or required by
DOE, DOE will indemnify PSC and other persons indemnified against
(i) claims for public liability as described in subparagraph
(d)(2) of this clause; and (ii) such legal costs of PSC and other
persons indemnified as are approved by DOE provided that DOE's
liability, including such legal costs, shall not exceed the
amount set forth in section 170e.(1)(B) of the Act in the
aggregate for each nuclear incident or precautionary evacuation
occurring within the United States or $100 million in the
aggregate for each nuclear incident occurring outside the United
States, irrespective of the number of persons indemnified in
connection with this Agreement.
(2) The public liability referred to in subparagraph (d)(1) of this
clause is public liability as defined in the act which (i) arises
out of or in connection with the activities under this Agreement,
including transportation; and (ii) arises out of or results from
a nuclear incident or precautionary evacuation, as those terms
are defined in the Act.
(e) Waiver of Defenses.
(1) In the event of a nuclear incident, as defined in the Act,
arising out of nuclear waste activities, as defined in the Act,
PSC on behalf of itself and other person indemnified, agrees to
waive any issue or defense as to charitable or governmental
immunity.
-2-
<PAGE>
(2) In the event of an extraordinary nuclear occurrence which:
(i) Arises out of, results from, or occurs in the course of the
construction, possession, or operation of a production or
utilization facility; or
(ii) Arises out of, results from, or occurs in the course of
transportation of source material, by-product material, or
special nuclear material to or from a production or
utilization facility; or
(iii) Arises out of or results from the possession, operation, or
use by PSC or its subcontractor(s) of a device utilizing
special nuclear material or by-product material, during the
course of the Agreement activity; or
(iv) Arises out of, results from, or occurs in the course of
nuclear waste activities, PSC, on behalf of itself and other
persons indemnified, agrees to waive:
(A) Any issue or defense as to the conduct of the claimant
(including the conduct of persons through whom the
claimant derives its cause of action) or fault or
persons indemnified, including, but not limited to:
1. Negligence;
2. Contributory negligence;
-3-
<PAGE>
3. Assumption of risk; or
4. Unforeseeable intervening causes involving the
conduct of a third person or an act of God;
(B) Any issue or defense as to charitable or governmental
immunity; and
(C) Any issue or defense based on any statute of
limitations, if suit is instituted within three years
from the date on which the claimant first knew, or
reasonably could have known, of his injury or damage
and the cause thereof. The waiver of any such issue or
defense shall be effective regardless of whether such
issue or defense may otherwise be deemed jurisdictional
or relating to an element in the cause of action. The
waiver shall be judicially enforceable in accordance
with its terms by the claimant against the person
indemnified.
(v) The term extraordinary nuclear occurrence means an event
which DOE has determined to be an extraordinary nuclear
occurrence as defined in the Act. A determination of
whether or not there has been an extraordinary nuclear
occurrence will be made in accordance with the procedures in
10 C.F.R. part 840.
-4-
<PAGE>
(vi) For the purposes of that determination, "offsite" as that
term is used in 10 C.F.R. part 840 means away from "the
Agreement location" which phrase means any DOE facility,
installation, or site at which activity under this Agreement
is being carried on, and any contractor-owned or controlled
facility, installation, or site at which PSC is engaged in
the performance of activity under this Agreement.
(3) The waivers set forth above:
(i) Shall be effective regardless of whether such issue or
defense may otherwise be deemed jurisdictional or relating
to an element in the cause of aciton;
(ii) Shall be judicially enforceable in accordance with its terms
by the claimant against the person indemnified;
(iii) Shall not preclude a defense based upon a failure to take
reasonable steps to mitigate damages;
(iv) Shall not apply to injury or damage to a claimant or to a
claimant's property which is intentionally sustained by the
claimant or which results from a nuclear incident
intentionally and wrongfully caused by the claimant;
(v) Shall not apply to injury to a claimant who is employed at
the site of and in connection with the activity where the
-5-
<PAGE>
extraordinary nuclear occurrence takes place, if benefits
therefor are either payable or required to be provided under
any workers' compensation or occupational disease law;
(vi) Shall not apply to any claim resulting from a nuclear
incident occurring outside the United States;
(vii) Shall be effective only with respect to those obligations
set forth in this clause and in insurance policies,
contracts or other proof of financial protection; and
(viii) Shall not apply to, or prejudice the prosecution or defense
of, any claim or portion of claim which is not within the
protection afforded under (A) the limit of liability
provisions under subsection 170e. of the Act, and (B) the
terms of this Agreement and the terms of insurance policies,
contracts, or other proof of financial protection.
(f) Notification and litigation of claims. PSC shall give immediate written
notice to DOE of any known action or claim filed or made against PSC or
other person indemnified for public liability as defined in paragraph
(d)(2). Except as otherwise directed by DOE, PSC shall furnish promptly to
DOE, copies of all pertinent papers received by PSC or filed with respect
to such actions or claims. DOE shall have the right to, and may collaborate
with, PSC and any other person indemnified in the settlement or defense of
any action or claim and shall have the right to (1) require the prior
approval of DOE for the
-6-
<PAGE>
payment of any claim that DOE may be required to indemnify hereunder;
and (2) appear through the Attorney General on behalf of PSC or other
person indemnified in any action brought upon any claim that DOE may
be required to indemnify hereunder, take charge of such action, and
settle or defend any such action. If the settlement or defense of any
such action or claim is undertaken by DOE, PSC or other preson
indemnified shall furnish all reasonable assistance in effecting a
settlement or asserting a defense.
(g) Continuity of DOE obligations. The obligations of DOE under this
clause shall not be affected by any failure on the part of PSC to
fulfill its obligation under this Agreement and shall be unaffected by
the death, disability, or termination of existence of PSC, or by the
completion, termination or expiration of this Agreement.
(h) Effect of other clauses. The provisions of this clause shall not be
limited in any way by, and shall be interpreted without reference to,
any other clause of this Agreement, and any provisions that are later
added to this Agreement as required by applicable Federal law,
including statutes, executive orders and regulations, to be included
in Nuclear Hazards Indemnity Agreements.
(k) Inclusion in subcontracts. PSC shall insert this clause in any
subcontract which may involved the risk of public liability, as that
term is defined in the Act and further described in paragraph (d)(2)
above. However, this clause shall not be included in subcontracts in
which the subcontractor is subject to Nuclear Regulatory Commission
(NRC) financial protection requirements
-7-
<PAGE>
under section 170b. of the Act
or NRC agreements of indemnification under section 170c. or k. of the
Act for the activities under the subcontract.
(1) Communications. In consideration of providing
---------------
indemnification under the Price Anderson Act, PSC will take
steps necessary to ensure that DOE is provided copies of all
correspondence between PSC and the NRC regarding the ISFSI.
In addition, PSC will notify DOE immediately (in addition to
the NRC) of any situation which PSC determines could
possibly incur a liability to DOE under the Price Anderson
Act.
-8-
<PAGE>
APPENDIX E
Order Related to Dismissal of District of Columbia Civil Action #95-0328
-10-
<PAGE>
IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF COLUMBIA
- -----------------------------------
PUBLIC SERVICE COMPANY OF ) FILED
COLORADO, ) FEB 1, 1996
)
Plaintiff, ) NANCY MAYER-WHITTINGTON CLERK
) U.S. DISTRICT COURT
v. )
) Civ. Action No: 95-0328
HAZEL R. O'LEARY, Secretary of the ) (Sporkin, J.)
UNITED STATES DEPARTMENT OF )
ENERGY, in her official capacity, )
)
Defendant )
)
- -----------------------------------
ORDER
The parties to this lawsuit have requested additional time to pursue
settlement discussions relating to this matter beyond the time set forth in the
Court's December 14, 1995 Order. The Court hereby
ORDERS that the time within which plaintiff may refile this lawsuit is
extended to February 29, l996. It is further
ORDERED that, if Plaintiff does not refile the lawsuit on or before
February 29, 1996, Plaintiff's Complaint will be deemed to have been dismissed
with prejudice.
Date: 1/31/96
------------
/s/ Stanley Sporkin
-------------------------
Stanley Sporkin
United States District Court
<PAGE>
EXHIBIT A
STATEMENT OF COST (EXAMPLE)
---------------------------
Date (2)
---------------------------
Company Name (1) Agreement No. (3)
------------------- -------------------
Address (1) Projected Period (4) to (4)
------------------------- ---------------
Telephone No. (1) Voucher No. (5)
------------------- ---------------------
Amount Authorized for
Agreement Amount (face value): Expenditure (Obligated):
- ----------------------------- ---------
Agreement Amount $ Basic Agreement $
------------ ------------
Cost Share $ All Modifications $
------------ ------------
Total $ Agreement to Date $
------------ ------------
Period of performance covered by this billing: (6)
---------------------
Claimed for this Cumulative Claimed
Billing Period Through Billing Period
------------------ ------------------------
Direct Labor
Fringe Benefits @ %
-----
Overhead @ %
-----
Materials & Supplies
Travel
Subcontract
Other Direct Costs
Total Costs (less G&A)
------------------ ------------------------
G&A @ %
---------- ------------------ ------------------------
Total Costs ------------------ ------------------------
Total Amount Claimed ------------------ ------------------------
STATEMENT: I state that, to the best of my knowledge, this invoice is correct
and in accordance with the terms of the Agreement and that the costs included
herein have been incurred, represent payments made by PSC except as otherwise
authorized in the payments provision of the Agreement, and properly reflect the
work performed.
- ---------------------------------- ---------------------------------------
(Signature) (Title)
Name and Address of preparer: Name:
-----------------------------------
Company: Telephone:
-------------------------- ------------------------------
Address:
--------------------------
-9-
<PAGE>
Exhibit 10(e)(2)
OMNIBUS INCENTIVE PLAN
Effective as of January 1, 1992
Revised as of October 25, 1994
Revised as of January 1, 1996
Article 1. General
1.1 ESTABLISHMENT OF THE PLAN.
Public Service Company of Colorado, a Colorado corporation (the "Company"),
hereby establishes this Omnibus Incentive Plan (the "Plan").
1.2 PURPOSE.
The purpose of the Plan is to (i) recognize, reward and retain management
employees of the Company whose performance, contribution and skills promote the
achievement of the Company's long-term financial and business objectives, (ii)
align the interests of shareholders and management of the Company with each
other, (iii) attract and retain high-quality employees, and (iv) improve the
earnings of the Company.
1.3 ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of the Company's
Board of Directors or such other committee as the Board may appoint to
administer the Plan (the "Committee"), provided that such committee shall be
constituted, to the extent required, such that the Plan complies with the
applicable rules under Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "1934 Act"). The Committee shall have full and final authority in
its discretion to:
(a) select the Participants (as defined herein) to receive awards under the
Plan;
(b) to make awards in such forms and amounts as it shall determine;
(c) impose such limitations, restrictions and conditions upon such awards as it
shall deem appropriate;
(d) conclusively interpret the Plan and decide all questions of fact arising
from its application;
(e) adopt, amend, and rescind the Plan and rules and regulations relating to
the Plan, subject to any required approval of shareholders; and
(f) correct any defect or omission or reconcile any inconsistency in the Plan
or in any award granted hereunder.
It is the intent of this provision to give the Committee the broadest possible
discretion in administering the Plan and carrying out its duties hereunder,
including designating an
<PAGE>
administrator of the Plan for day to day operations (the "Plan Administrator").
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the quorum shall be sufficient for the taking of any action on the
Plan. No member of the Committee shall be liable for any act done or
determination made in good faith under the terms of the Plan.
1.4 SHARES SUBJECT TO THE PLAN.
Up to 1,000,000 shares of the Company's common stock, $5.00 par value (the
"Shares"), may be issued under the Plan. The Shares will be from authorized, but
unissued, Common Stock, treasury stock or stock purchased on the open market. If
any Award terminates, expires or lapses, any Shares associated therewith will
again become available under the Plan to the maximum extent possible under the
then applicable rules under Section 16 of the 1934 Act. The number of Shares
subject to the Plan and subject to Awards under the Plan will be adjusted in
accordance with paragraph 5.2 upon any stock dividend or split,
recapitalization, reclassification, merger, consolidation, combination or any
similar corporate change.
1.5 TYPE OF AWARDS.
Awards under the Plan may be in the form of: (i) options to purchase Shares,
including but not limited to incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"); (ii)
Shares subject to certain restrictions (the "Restricted Shares"); or (iii)
performance awards entitling the holder thereof to cash, Shares or a combination
thereof if certain performance goals are met during the applicable performance
period (the "Performance Awards").
1.6 PARTICIPANTS.
Persons eligible to participate shall be those management employees, including
officers, who are employed by the Company or a subsidiary in which 50% or more
of the outstanding common stock is owned by the Company, and whose performance,
contribution and skills promote the achievement of the Company's long-term
financial and business objectives. Those employees who are selected by the
Committee to receive an award under and pursuant to the terms of the Plan are
"Participants" hereunder.
Article 2. Options
2.1 AWARD OF OPTIONS.
The Committee may, from time to time, award options to purchase Shares to any
Participant, subject to the terms of the Plan and such other terms and
conditions as the Committee may determine. Such awards of options shall be
evidenced by stock option agreements containing terms and conditions consistent
with this Plan and as the Committee may approve from time to time.
2.2 PRICE.
The purchase price assigned to each Share under each option shall be at least
100% of the Fair Market Value of the Share at the
<PAGE>
time the option is granted. The time of grant is the date on which the number of
stock options is determined and credited to a Participant's account or awarded
to a Participant. For purposes of the Plan, "Fair Market Value" means the
closing price of the Shares on the New York Stock Exchange as of the date an
award is granted to a Participant, or, if no sale was made on such date, the
next preceding day on which the Shares were traded on that Exchange.
2.3 EXERCISE OF OPTIONS.
Each option granted under the Plan may be exercised in accordance with the
specific terms and conditions relating thereto as set forth in a stock option
agreement, provided that the period for exercise of the option shall not
commence earlier than six months after the date of grant and shall end on a date
after the date of grant of the option as selected by the Committee at the time
of the grant, which date shall be a date at least one year following the date of
grant. Such six month limitation shall not apply in the event of a Participant's
death or Disability (within the meaning of the Company's Long-Term Disability
Income Plan or any successor plan thereto). In addition to such other procedures
for the exercise of options as the Committee may establish, written notice of
exercise shall be required and, upon exercise, the Shares purchased shall be
paid for in full either in cash or shares of Common Stock valued at the Fair
Market Value on the date of exercise or a combination thereof as the Committee
may permit. The Committee may Permit payment to be made through shares of Common
Stock currently owned, Share withholding or cashless exercise. As soon as
practicable after exercise and payment, the Company shall deliver to the
Participant a certificate or certificates evidencing the Shares purchased.
2.4 INCENTIVE STOCK OPTIONS.
In the event the Committee awards incentive stock options under Section 422 of
the Code, such options shall be subject to the following additional conditions
or such other conditions as may be required under the Code with respect to
incentive stock options at the time of grant:
(i) During any calendar year, the aggregate Fair Market Value of the Shares
subject to incentive stock options exercisable for the first time by a
Participant shall not exceed $100,000;
(ii) All incentive stock options must be granted within 10 years from the date
the Board of Directors of the Company adopted the Plan;
(iii) Unless sooner exercised, terminated or canceled, all incentive stock
options must expire no later than 10 years from the date of grant; and
(iv) Any incentive stock option awarded under the Plan shall contain such other
terms and conditions as the Committee may
<PAGE>
determine to be necessary to qualify the incentive stock options under Section
422 of the Code.
2.5 EXPIRATION OF OPTIONS.
If a Participant ceases to be employed by the Company for any reason (voluntary
or involuntary), except for termination because of such employee's death,
Disability, or Retirement (within the meaning of the Company's Employees'
Retirement Plan, or any successor thereto), all stock option awards held by such
Participant shall terminate immediately, unless otherwise approved by the
Committee. In the event of the death or Disability of a Participant, such
Participant's unvested stock options shall vest and all vested options held by
such Participant shall be exercisable at any time within one year following the
date of the death or Disability (but not Retirement) of such Participant, but in
no event after expiration of such options. In the event of Retirement of a
Participant, unvested options shall vest at the time of Retirement, and such
Participant may exercise all options previously awarded in accordance with their
terms. However, for grants made on or after January 1, 1996, upon the death of a
Participant subsequent from the Company, all outstanding stock options of the
Participant shall be exercisable for a period up to one year but in no event
after expiration of such options.
Article 3. Restricted Shares
3.1 AWARD OF RESTRICTED SHARES.
Restricted Shares may be granted to Participants by the Committee, subject to
the terms and conditions of the Plan and as the Committee may determine. Each
certificate for Restricted Shares shall be registered in the name of the
Participant and shall bear any restrictions upon its face.
3.2 RESTRICTIONS.
Restricted Shares may not be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated for a period of two years from the date of grant, or
such longer period of time as established by the Committee at the time of grant.
Holders of Restricted Shares may exercise full voting rights of those shares and
shall be entitled to all dividends and other distributions paid on such shares.
Upon fulfillment of the restriction period and any other restrictions imposed by
the Committee, a Participant will receive fully transferable certificates with
no restrictions.
3.3 TERMINATION OF EMPLOYMENT.
In the event a Participant's employment is terminated by reason of death,
Disability or Retirement, the restrictions on the Restricted Shares held by such
Participant shall lapse, allowing the Restricted Shares to become freely
tradable. If a Participant's employment is terminated for any other reason
before the end of a restriction period, the Participant's Restricted Shares
previously awarded are forfeited and the Participant shall promptly surrender to
the Company all non-
<PAGE>
vested Restricted Shares awarded under the Plan. The Committee may, however,
waive any such forfeiture provisions.
Article 4. Performance Shares
4.1 GRANT OF PERFORMANCE AWARDS.
The Committee may grant to any Participant Performance Awards. A Performance
Award gives the Participant the right to be paid a defined value if pre-
established performance objectives of the Company are met at the end of a stated
performance period. Each Performance Award shall be evidenced by a signed
written agreement containing such terms and conditions as the Committee may
determine from time to time.
4.2 PERFORMANCE ACCOUNTS.
At the time of a Performance Award to a Participant, the Company shall establish
an account for the Participant. The Committee may credit Performance Awards to
such account solely for accounting purposes, and the Company shall not be
required to set aside a fund for the payment of any Performance Award until it
is earned at the end of the applicable performance period.
4.3 TERMS.
The Committee shall establish the performance period, which shall be no less
than one year, performance objectives for the performance period (or each year
within the performance period), using such measures of performance as the
Committee may select, and the value of the Performance Award that would be
payable at the end of the performance period if 100% of the performance
objectives are achieved. In addition, the Committee shall establish minimum
performance objectives and maximum performance objectives on which Performance
Awards may be earned. Failure to meet the minimum performance objectives will
earn no Performance Award. At the end of a performance period, the degree of
achievement of the range of performance objectives will determine the value of
the Performance Award earned by each Participant; provided, however, the
Committee may adjust a Participant's Performance Award based upon such
Participant's own performance as recommended to the Committee by the supervisor
of such Participant. The Committee may change the performance objectives during
any year of a performance period, but only in the event that the Committee
determines that unforeseen circumstances have occurred during the period which,
had they been known, would have materially affected the establishment of the
objectives. There may be more than one Performance Award outstanding at any one
time and performance periods may differ.
4.4 PAYMENT.
Payments on the Performance Awards may be made in cash or Shares or a
combination thereof as determined by the Committee and set forth in the
agreement. In any event, all payments shall be made as soon as practical
following the end of a performance period.
4.5 TERMINATION OF EMPLOYMENT.
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In the event a Participant's employment is terminated by reason of death,
Disability or Retirement during a performance period, the Participant will be
entitled to receive a pro rata portion of the value of the Performance Award
earned, payable at the conclusion of the Plan year in which termination occurs.
Such value shall be determined based on the achievement of performance
objectives for the Plan year in which death, Disability or Retirement occurs and
performance for any previous years in the Performance period. The Participant
shall receive the pro rata portion of the value of the Performance Award earned
based on the number of full months worked during the performance period divided
by the number of full months in the performance period. If a Participant's
employment is terminated for any other reason during a performance period, the
Participant's right to payment under a Performance Award shall be terminated.
The Committee may, however, permit the Participant to receive the pro rata
portion of the value of the Performance Award earned, calculated as set forth
above.
Article 5. Miscellaneous
5.1 CHANGE IN CONTROL.
In the event the Company is subject to a change in control, all stock-based
awards, such as options and Restricted Shares, shall vest 100% and all
Performance Awards shall be paid out immediately in cash, as if the performance
objectives have been obtained through the effective date of the change in
control or as the Committee may otherwise determine. For purposes of the Plan,
change in control shall mean (i) receipt by the Company of a report on Schedule
13D filed pursuant to Section 13(d) of the 1934 Act or knowledge of facts on
which a Schedule 13D is required to be so filed, disclosing that the person
filing, or who should be filing, the Schedule 13D is a beneficial owner,
directly or indirectly, of 20% or more of the Company's outstanding common
stock; (ii) when any person becomes the owner, directly or indirectly, of 20% or
more of the Company's outstanding common stock pursuant to a tender or exchange
offer by such person; (iii) a change within a 24-month period in 51% or more of
the directors making up the Board provided, however, that if the election or
nomination of a director elected subsequent to the beginning of such 24-month
period is approved by a vote of at least two-thirds of the initial directors
then still in office, such director shall be considered to have been a member of
the Board as of the beginning of such 24-month period; or (iv) approval by the
shareholders of a dissolution of the Company or an agreement to merge,
consolidate or sell substantially all the assets of the Company pursuant to
which the Company is not the surviving entity.
5.2 ADJUSTMENTS FOR OTHER CHANGES.
In the event of a stock dividend or stock split or combination or other increase
or reduction in the number of the Company's outstanding common stock, the
Committee may, to prevent the dilution or enlargement of rights under any
awards, make such adjustments in the number and type of Shares authorized by
this
<PAGE>
Plan, the number and type of Shares covered by, or by which payments are
measured under, outstanding awards and the exercise prices therefor as may be
determined to be appropriate and equitable. The Committee may provide for
adjustments to outstanding awards in the related agreements therefor to prevent
dilution or enlargement of rights thereunder or to provide for acceleration of
benefits thereunder in the event of merger, consolidation, reorganization,
recapitalization, sale or exchange of substantially all assets or dissolution
of, or spin off, or similar transaction by, the Company, as well as the change
in control provisions stated above in paragraph 5.1.
5.3 NON-TRANSFERABILITY.
No award or right thereto granted under the Plan may be sold, assigned,
transferred, pledged or hypothecated, other than by will or by the laws of
descent and distribution. In the case of a death of a Participant, payment of
any outstanding award pursuant to the terms of the Plan shall be made to the
designated beneficiary of such Participant. Any transfer contrary to this
provision will result in forfeiture of the award.
5.4 AMENDMENT, SUSPENSION AND TERMINATION.
The Committee or the Board of Directors may, at any time, terminate or, from
time to time, modify, amend or suspend, and if suspended, reinstate, in whole or
in part, any or all of the provisions of the Plan, except to the extent
restricted by the Code, the federal securities laws, or the rules of any
exchange upon which the Shares are listed; provided, however, that if any
amendment requires shareholder approval under the then applicable rules of
Section 16(b) of the 1934 Act, such amendment shall be subject to the approval
of the Company's shareholders. No termination, amendment, suspension or
modification may adversely affect the rights of a Participant under any
outstanding award without the consent of such Participant.
5.5 TAX WITHHOLDING.
The Company shall have the right to deduct from all payments in cash under the
Plan any taxes required by law to be withheld with respect to such cash payments
and in the case of any noncash payment or exercise of a stock-based award, the
Participant shall be required to pay to the Company the amount of any taxes
which the Company is required to withhold with respect to such payment or
exercise. Tax withholding may, if requested by the Participant or beneficiary,
and at the discretion of the Committee, be made by tendering shares of Common
Stock currently owned, Share withholding or cashless exercise. Such election
must be made by the Participant prior to the date on which the tax obligation
arises and, to the extent required, shall be effected in accordance with Section
16(b) of the 1934 Act.
5.6 NO RIGHT TO EMPLOYMENT OR PARTICIPATION.
Nothing in this Plan shall interfere with or limit in any way the right of the
Company to terminate or change a Participant's employment at any time, or confer
upon any participant, any right
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to continue in the employ of the Company for any period of time or to continue
such Participant's present or any other rate of compensation. No Participant in
a different performance period for Performance Awards, or other employee of the
Company at any time, shall have the right to be selected for participation in a
current or future performance period for Performance Awards.
5.7 INDEMNIFICATION.
The Company's Board of Directors and each person who is or was a member of the
Board of Directors or the Committee or who is or was an employee of the Company
shall be indemnified and held harmless by the Company against and from any loss,
cost, liability or expense, including, without limitation, fees and expenses of
legal counsel, that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit or proceeding to which
such person may be a party or in which such person may be involved by reasons of
any action taken or failure to act under the Plan and against and from any and
all amounts paid by such person in settlement thereof, with the Company's
approval or paid in satisfaction of any judgment in any such action, suit or
proceeding against such person, provided that such person shall give the Company
an opportunity, at its own expense, to handle and defend the same before such
person undertakes to handle and defend it on the person's own behalf The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.
5.8 BENEFICIARY.
Each participant under the Plan may name any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit under the Plan
otherwise due to the Participant may be paid in the case of the Participant's
death before receiving any or all of such benefit. Any subsequent designation
shall revoke all prior designations by the same Participant. Each designation
shall be in a form prescribed by the Committee and shall be effective only when
filed by the Participant with the Committee. If the Participant does not
designate a beneficiary, or the designated beneficiary does not survive the
Participant or exist at the time of the Participant's death, any benefit payable
under the Plan shall be paid in the following order of priority
(a) the personal representative of the Participant's estate, if an estate
proceeding is open at the time for the benefit payment under the Plan;
(b) those persons or entities who would receive the remainder of Participant's
estate under Participant's last will, if any; or
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(c) those persons who would inherit Participant's properly under the Colorado
laws of intestate succession.
5.9 NON-EXCLUSIVITY.
Nothing contained herein is intended to amend, modify or rescind any previously
approved compensation plan or program entered into by the Company. The Plan
shall be in addition to any and all such plans or programs. Neither the adoption
of the Plan by the Company's Board of Directors nor the submission of the Plan
to the Company's shareholders for approval shall be construed as creating any
limitations on the power or authority to adopt such other additional incentive
or other compensation arrangements as the Board may deem necessary or desirable.
5.10 NON-UNIFORM DETERMINATIONS.
The Committee's determinations under the Plan, including, without limitation,
the selection of Participants, the determination of the form, amount and timing
of awards, the terms and conditions of the awards, the agreements evidencing the
awards and the establishment of objectives, need not be uniform and may be made
by it selectively among Participants who receive, or who are eligible to
receive, awards under the Plan whether or not such persons are similarly
situated.
5.11 LISTING, REGISTRATION AND LEGAL COMPLIANCE.
Each award shall be subject to the requirement that if at any time the Committee
shall determine, in its discretion, that the listing, registration or
qualification of such award, or any Shares or other property subject thereto,
upon any securities exchange or under any foreign, federal or state securities
or other law or regulation, or the consent or approval of any governmental body
or the taking of any other action to comply with or otherwise with respect to
any such law or regulation, is necessary or desirable as a condition to or in
connection with the granting of such award or the issue, delivery or purchase of
Shares or other property thereunder, no such award may be exercised or paid in
Shares or other property unless such listing, registration, qualification,
consent, approval or other action shall have been effected or obtained free of
any conditions not acceptable to the Committee and the holder of the award will
supply the Company with such certificates, representations and information as
the Company shall request and shall otherwise cooperate with the Company in
effecting or obtaining such listing, registration, qualification, consent,
approval or other action. In the case of officers and other persons subject to
Section 16(b) of the 1934 Act, the Committee may at any time impose any
limitations upon the exercise, delivery or payment of any award which, in the
discretion of the Committee, are necessary or desirable to comply with Section
16(b) of the 1934 Act and the rules and regulations thereunder. If the Company,
as part of an offering of securities or otherwise, finds it desirable because of
foreign, federal or state legal or regulatory requirements to reduce the period
during which options may be exercised, the Committee may, in its
<PAGE>
discretion and without the holders' consent, so reduce such period upon not less
than 15 days' written notice to the holders thereof.
5.12 LOANS.
The Committee may provide for the Company or any subsidiary of the Company to
make loans to finance the exercise of any option as well as the estimated or
actual amount of any taxes payable by a Participant as a result of the exercise
or payment of any option and may prescribe, or may empower the Company or such
subsidiary to prescribe the other terms and conditions (including but not
limited to the interest rate, maturity date and whether the loan will be secured
or unsecured) of any such loan.
5.13 GOVERNING LAW.
The Plan shall be construed in accordance with the laws of the State of
Colorado.
5.14 TERM.
The Plan shall be effective as of January 1, 1992, subject to (i) the approval
of the holders of a majority of the Shares present at the 1992 annual meeting,
(ii) the approval of the Colorado Public Utilities Commission of the issuance by
the Company of the securities under the Plan, and (iii) the registration of the
securities under the Plan with the Securities and Exchange Commission. No awards
under the Plan shall be made after December 31, 2001.
5.15 CLAIMS PROCEDURE.
With respect to claims under the Plan, the following procedure shall apply:
(a) FILING. If a Participant or a beneficiary believes that a benefit payable
under the Plan has not been properly calculated or paid, the Participant or
beneficiary may file a claim for benefits with the Plan Administrator within 90
days after the payment is due, which period may be extended at the discretion
of the Plan Administrator for reasonable cause. All claims for benefits shall
be filed in writing by the Participant, the beneficiary, or the authorized
representative of Such Participant (hereafter a "claimant), by completing such
procedures as the Plan Administrator shall require. Such procedures shall be
reasonable and may include the completion of forms and the submission of
documents and additional information.
(b) TIME FOR NOTICE OF CLAIM DENIAL. If a claim is denied, notice of denial
shall be furnished by the Plan Administrator to the claimant within 90 days
after receipt of the claim by the Plan Administrator (or receipt of the
requested additional information, if later), unless special circumstances
require an extension of time for processing the claim, in which event
notification of the extension shall be provided to the claimant
<PAGE>
and the extension shall not exceed 90 days from the end of the initial period.
(c) CONTENT OF NOTICE OF CLAIM DENIAL. The Plan Administrator shall provide
adequate notice, in writing, to any claimant whose claim has been denied,
setting forth the specific reasons for such denial, specific reference to
pertinent Plan provisions, a description of any additional material or
information necessary for the claimant to substantiate the claim and an
explanation of why such material or information is necessary, all written in a
manner calculated to be understood by the claimant. Such notice shall include
appropriate information as to the steps to be taken if the claimant wishes to
submit the claim for review.
(d) REVIEW PROCEDURE. The claimant or the claimant's authorized representative
may request such a review by the Committee upon written application. The
claimant may review pertinent documents and may submit issues or comments in
writing. The claimant or the claimant's duly authorized representative must
request such review within 60 days of receipt of notification of the claim
denial unless the Committee extends this period of time for good cause. A
decision on review shall be rendered within 60 days after the receipt of the
request for review by the Committee. If special circumstances require a further
extension of time for review, a decision shall be rendered as soon as possible,
but not later than 120 days following the Committee's receipt of the request
for review. If such an extension of time of review is required, written notice
of the extension shall be furnished to the claimant before the extension period
commences. The decision of the Committee shall be to the claimant in writing
and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, as well as specific references to
the pertinent Plan provisions on which the decision is based.
Additional Information
Compensation Committee
Members of the Compensation Committee are outside directors of the Company and
are selected annually by the Board of Directors.
Common Stock Restrictions
Shares of Common Stock acquired pursuant to the Plan by "affiliates" of the
Company, as that term is defined in the Securities Act of 1933 (the "1933 Act"),
may be resold only pursuant to the registration requirements of the 1933 Act or
pursuant to an exemption therefrom.
Acquisitions and dispositions of Common Stock by an officer or director of the
Company who is an insider for purposes of Section 16 under the 1934 Act within
any six-month period may give rise to the right of the Company to recapture any
profit from such transaction pursuant to Section 16(b) of the 1934 Act. Insiders
<PAGE>
should consult with Company General Counsel prior to making any transactions in
Company Common Stock pursuant to the Plan.
Federal Income Tax Consequences
The following is a summary of the federal income tax treatment of the various
forms of awards that may be granted under the Plan:
NONQUALIFIED STOCK OPTIONS.
The grant of a nonqualified stock option will have no immediate tax consequences
to the Company or to a Participant. The exercise of a nonqualified stock option
will require such Participant to include in gross income that amount by which
the fair market value of the shares acquired on the exercise date exceeds the
option price. Such fair market value becomes such Participant's tax basis of the
Common Stock so acquired. Upon a subsequent sale or taxable exchange of the
Common Stock acquired upon a nonqualified stock option exercise, a participant
will recognize long or short-term capital gain or loss equal to the difference
between the amount realized on the sale and the tax basis of he shares sold or
exchanged. Provided the applicable withholding requirements are met, the Company
will be entitled to a tax deduction in the same amount and at the same time as
the participant is in receipt of income in connection with the exercise of a
nonqualified stock option (but not in connection with the taxation of the
subsequent sale or taxable exchange of the Common Stock).
INCENTIVE STOCK OPTIONS.
Neither the grant nor the exercise of an incentive stock option will have an
immediate tax consequence to the Company or a Participant. If a Participant
exercises an incentive stock option and does not dispose of the acquired Common
Stock within two years after the grant of the option or within one year after
the date of the transfer of the Common Stock to such Participant (a
"disqualifying disposition"), the Company will not be entitled to a tax
deduction, such Participant will realize no compensation income, and any gain or
loss that is realized on a subsequent sale or taxable exchange of the Common
Stock will be treated as long-term capital gain or loss equal to the difference
between the amount realized on the sale or exchange on the option price of
shares sold or exchanged. The spread between the option price and the fair
market value of the Common Stock on the date of an incentive stock option
exercise is an adjustment for purposes of computing the Participant's
alternative minimum tax (if any).
In the event of a disqualifying disposition of the Common Stock acquired upon
exercise of an incentive stock option, a Participant's and the Company's tax
treatment will be the same as if such Participant exercised a nonqualified stock
option, with one exception. Such Participant must still treat the spread between
the option price and fair market value of he Common Stock on the date of
exercise of the incentive stock option as an adjustment for purposes of the
alternative minimum tax, unless
<PAGE>
the disqualifying disposition occurs in the same tax year as the incentive stock
option is exercised.
RESTRICTED SHARES.
The Company will receive a tax deduction at the time that all restrictions lapse
on the Restricted Shares held by a Participant. The tax deduction will be equal
to the fair market value of the Restricted Shares at that time. Because the
Restricted Shares are subject to a substantial risk of forfeiture (the
requirement that employment be continued for the restriction period), the
Participant will have no income until all of the restrictions lapse. However, a
Participant who is awarded Restricted Shares may elect, in accordance with
Section 83(b) of the Code (an 83(b) election"), to be taxed in the year of grant
on the fair market value of the Shares at the date of grant.
Dividends are taxable to the Participant upon receipt. The Company will receive
a tax deduction for dividends paid on Restricted Shares unless the Participant
has made an 83(b) election with regard to such shares.
PERFORMANCE AWARDS.
A Participant will be taxed at the time of payment of a Performance Award, for
the amount of cash and the fair market value of any Common Stock received. The
Company will receive a deduction at the same time such Participant is paid the
Performance Award.
The Plan is not qualified under Section 401(a) of the Internal Revenue Code.
Incorporation of Certain Documents by Reference
The Company hereby undertakes to provide without charge to each person to whom
this document is delivered, upon the written or oral request of any such person,
a copy of any or all of the documents (i) incorporated by reference in Item 3 of
part II of the Company's latest Registration Statement on Form S8 relating to
the Plan (such documents are hereby incorporated by reference into the Section
10(a) prospectus) and (ii) required to be delivered pursuant to Rule 428(b) of
Regulation C under the 1933 Act.
Requests for such documents should be directed to Richard C. Kelly, Senior Vice
President, Finance, Treasurer and Chief Financial Officer by mail at Suite 900,
1225 17th Street, Denver, Colorado 80202-5533, or by telephone at (303) 571-
7511.
<PAGE>
Exhibit 10(e)(4)
FORM OF SEVERANCE AGREEMENT
BETWEEN
PUBLIC SERVICE COMPANY OF COLORADO
AND
(EXECUTIVE NAME)
THIS AGREEMENT, effective this 27th day of November, 1995, by and between
Public Service Company of Colorado, a Colorado corporation (the "Company") and
(Executive Name) (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is a valuable employee of the Company and an integral
part of its management who is a key participant in the decision making process
relative to short-term and long-term planning and policy for the Company; and
WHEREAS, the Company wishes to encourage the Executive to continue his career
and services with the Company for the period during and after an actual or
threatened Change in Control; and
WHEREAS, the Board of Directors of the Company, at its meeting on August 22,
1995, determined that it would be in the best interests of the Company and its
shareholders to assure continuity in the management of the Company's
administration and operations in the event of a Change in Control by entering
into this Severance Agreement with the Executive;
NOW THEREFORE, it is hereby agreed by and between the parties hereto as
follows:
1. Definitions.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean the Executive's fraud or dishonesty which has resulted
or is likely to result in material economic damage to the Company, as determined
in good faith by a vote of at least two-thirds of the non-employee directors of
the Company at a meeting of the Board at which the Executive is provided an
opportunity to be heard.
"Change in Control" shall mean:
1
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(i) either (A) receipt by the Company of a report on Schedule 13D, or an
amendment to such a report, filed with the Securities and Exchange Commission
pursuant to Section 13(d) of the Securities Exchange Act of 1934 (the "1934
Act") disclosing that any person (as such term is used in Section 13(d) of the
1934 Act) ("Person"), is the beneficial owner, directly or indirectly, of twenty
(20) percent or more of the outstanding stock of the Company, or (B) actual
knowledge by the Company of facts, on the basis of which any Person is required
to file such a report on Schedule 13D, or to make an amendment to such a report,
with the SEC (or would be required to file such a report or amendment upon the
lapse of the applicable period of time specified in Section 13(d) of the 1934
Act) disclosing that such Person is the beneficial owner, directly or
indirectly, of twenty (20) percent or more of the outstanding stock of the
Company;
(ii) purchase by any Person, other than the Company or a wholly-owned
subsidiary of the Company, of shares pursuant to a tender or exchange offer to
acquire any stock of the Company (or securities convertible into stock) for
cash, securities or any other consideration provided that, after consummation of
the offer, such Person is the beneficial owner (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of twenty (20) percent or more of the
outstanding stock of the Company (calculated as provided in paragraph (d) of
Rule 13d-3 under the 1934 Act in the case of rights to acquire stock);
(iii) approval by the shareholders of the Company of (a) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of stock of the Company would be
converted into cash, securities or other property, other than a consolidation or
merger of the Company in which holders of its stock immediately prior to the
consolidation or merger have substantially the same proportionate ownership of
common stock of the surviving corporation immediately after the consolidation or
merger as immediately before, or (b) any consolidation or merger in which the
Company is the continuing or surviving corporation but in which the common
shareholders of the Company immediately prior to the consolidation or merger do
not hold at least a majority of the outstanding common stock of the continuing
or surviving corporation (except where such holders of common stock hold at
least a majority of the common stock of the corporation which owns all of the
common stock of the Company), or (c) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all or substantially
all the assets of the Company, or (d) any merger or consolidation of
2
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the Company where, after the merger or consolidation, one Person owns 100% of
the shares of stock of the Company (except where the common holders of the
Company's stock immediately prior to such merger or consolidation own at least
90% of the outstanding stock of such Person immediately after such merger or
consolidation); or
(iv) a change in the majority of the members of the Board within a 24-month
period unless the election or nomination for election by the Company's
shareholders of each new director was approved by the vote of at least two-
thirds of the directors then still in office who were in office at the beginning
of the 24-month period.
"Compensation" shall mean the sum of (i) the Executive's annual rate of base
salary on the last day the Executive was an employee of the Company, including
any elective contributions made by the Company on behalf of the Executive that
are not includible in the gross income of the Executive under Section 125 or
402(a)(8) of the Internal Revenue Code of 1986, as amended (the "Code") or any
successor provision thereto, (ii) the target incentive award for the Executive
under the short-term component of the Annual Incentive Plan of the Company for
the current year, (iii) the economic equivalent value of any long-term incentive
awards (including dividend equivalents) the Executive would have received had he
remained employed for the remaining term of this Agreement, based upon the
awards received in the calendar year preceding termination, (iv) an amount equal
to any Company matching or special contribution allocated to the Executive's
account for the calendar year preceding termination under the Employees' Savings
Plan or stock ownership plan.
"Constructive Discharge" shall mean a good faith determination by the
Executive that there has been any (i) material change by the Company of the
Executive's functions, duties or responsibilities which change would cause the
Executive's position with the Company to become of less dignity, responsibility,
importance, prestige or scope, including, without limitation, the assignment to
the Executive of duties and responsibilities inconsistent with his positions,
(ii) assignment or reassignment by the Company of the Executive without the
Executive's consent to another place of employment more than 50 miles from the
Executive's current place of employment, (iii) liquidation, dissolution,
consolidation or merger of the Company, or transfer of all or substantially all
of its assets, other than a transaction or series of transactions in which the
resulting or surviving transferee entity has, in the aggregate, a net worth at
least equal to that of the Company immediately
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<PAGE>
before such transaction and expressly assumes this Agreement and all obligations
and undertakings of the Company hereunder, or (iv) reduction which is more
than de minimis in the Executive's total compensation or benefits or any
component thereof, by written notice to the Company, specifying the event
relied upon for such termination and given at any time within six months after
the occurrence of such event. Notwithstanding any provision herein to the
contrary, during the 30-day period following the one year anniversary of the
Transaction Completion Date the Executive may elect to terminate employment
for any reason and such termination of employment shall be considered a
Constructive Discharge; provided, however, for purposes of determining the
benefits under Paragraph 3.a. hereof, `two years' shall be substituted for
`three years.' The Company and Executive, upon mutual written agreement, may
waive any of the foregoing provisions which would otherwise constitute a
Constructive Discharge.
"Transaction Completion Date" shall mean the date on which occurs subparagraphs
(i), (ii) or (iv) of the definition of Change in Control in paragraph 1 or
occurs the transaction which was the subject of shareholder approval pursuant to
subparagraph (iii) of the definition of Change in Control in paragraph 1."
2. Term. This Agreement shall be effective as of the date above written and
shall continue thereafter until 36 full calendar months following the
Transaction Completion Date. This Agreement shall remain in effect until all of
the obligations of the parties hereunder are satisfied.
3. Severance Benefit.
a. If the Executive's employment hereunder is terminated by the Company for
any reason other than cause, death or disability, or by the Executive in the
event of a Constructive Discharge, at any time during the Coverage Period, then,
within five business days after such termination, the Company shall pay to the
Executive (if the Executive has died before receiving all payments to which he
has become entitled hereunder to the estate of the Executive) (i) accrued but
unpaid salary and accrued but unused vacation and (ii) severance pay in a lump
sum cash amount equal to three years of the Executive's Compensation. During
the three year period which begins on the date of employment termination the
Executive shall receive (i) full benefits coverage for welfare plans in place
and operational on the date of termination and (ii) full perquisites for all
perquisites in place and operational on the date of termination. The Company
shall pay to Executive the
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<PAGE>
present value of the benefits that would have accrued under the qualified
retirement plans in place and operational on the date of termination if the
Executive had received credit for the three year period of severance under
this Agreement. The Company shall treat the Executive as if he had continued
participation and benefit accruals under the Company's Supplemental Retirement
Income Plan or a successor plan (as in effect upon the Change in Control)
during the three year period. The Company shall treat the Executive as
employed by the Company for purposes of exercising stock options during the
three year period. The Coverage Period shall begin on the Starting Date and
end on the Ending Date. The Starting Date shall be the earlier of (i) the date
on which a public announcement is made by the Company of its intention to
participate in a transaction which constitutes a Change in Control, or (ii)
the date on which a Change in Control occurs. The Ending Date shall be the
earlier of (i) the date on which a public announcement is made by the Company
of its intention to abandon a Change in Control transaction, or (ii) the date
which is 36 full calendar months following the Transaction Completion Date.
The Executive's termination of employment with the Company to become an
employee of a corporation which owns 100% of the Company shall not be
considered a termination of employment for purposes of this Agreement. The
subsequent termination of Executive's employment from such corporation shall
be considered a termination of employment for purposes of this Agreement.
b. For a period commencing with the month in which termination of
employment as described in paragraph 3.a. above shall have occurred, and ending
36 months thereafter, the Executive shall be entitled to all benefits under the
Company's welfare benefit plans (within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended), as if the
Executive were still employed during such period, at the same level of benefits
and at the same dollar cost to the Executive as is available to all of the
Company's senior executives generally and if and to the extent that equivalent
benefits shall not be payable or provided under any such plan, the Company shall
pay or provide equivalent benefits on an individual basis. The benefits provided
in accordance with this paragraph 3.b. shall be secondary to any comparable
benefits provided by another employer.
c. (i) If Independent Tax Counsel shall determine that the aggregate
payments made to the Executive pursuant to this Agreement and any other payments
to the Executive from the Company which constitute "parachute payments" as
defined in Section 280G of the Code (or any successor provision thereto)
("Parachute
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Payments") would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount (determined by
Independent Tax Counsel) such that after payment by the Executive of all taxes
(including any Excise Tax) imposed upon the Gross-Up Payment and any interest
or penalties imposed with respect to such taxes, the Executive retains from
the Gross-Up Payment an amount equal to the Excise Tax imposed upon the
payments. For purposes of this Paragraph 3.c., "Independent Tax Counsel" shall
mean a lawyer, a certified public accountant with a nationally recognized
accounting firm, or a compensation consultant with a nationally recognized
actuarial and benefits consulting firm, with expertise in the area of
executive compensation tax law, who shall be selected by the Executive and
shall be reasonably acceptable to the Company, and whose fees and
disbursements shall be paid by the Company.
(ii) If Independent Tax Counsel shall determine that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
that the Executive has substantial authority not to report any Excise Tax on the
Executive's Federal income tax return. If the Executive is subsequently required
to make a payment of any Excise Tax, then the Independent Tax Counsel shall
determine the amount (the amount of such additional payments are referred herein
as "Gross-Up Underpayment") of such payment and any such Gross-Up Underpayment
shall be promptly paid by the Company to or for the benefit of the Employee. The
fees and disbursements of the Independent Tax Counsel shall be paid by the
Company.
(iii) The Executive shall notify the Company in writing within 15 days of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. If the Company notifies the
Executive in writing that it desires to contest such claim and that it will bear
the costs and provide the indemnification as required by this sentence, the
Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,
6
<PAGE>
(C) cooperate with the Company in good faith in order to effectively
contest such claim, and
(D) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. The Company shall control all
proceedings taken in connection with such contest; provided, however, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest or
penalties with respect thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such advance.
(iv) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Paragraph 3.c.(iii), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall within 10
days pay to the Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto).
d. In the event of any termination of the Executive's employment described
in paragraph 3.a., the Executive shall be under no obligation to seek other
employment, and there shall be no offset against amounts due the Executive under
this Agreement on account of any remuneration attributable to any subsequent
employment.
4. Source of Payments.
All payments provided for in paragraph 3. above shall be paid in cash
from the general funds of the Company; provided, however, that such payments
shall be reduced by the amount of any payments made to the Executive or his
dependents, beneficiaries or estate from any trust or special or separate fund
established by the Company to assure such payments. The Company shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if the Company
7
<PAGE>
shall make any investments to aid it in meeting its obligations hereunder, the
Executive shall have no right, title or interest whatever in or to any such
investments except as may otherwise be expressly provided in a separate written
instrument relating to such investments. Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company and
the Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company such right shall be no greater than
the right of an unsecured creditor of the Company.
5. Litigation Expenses: Arbitration.
a. Full Settlement, Litigation Expenses; Arbitration. The Company's
-------------------------------------------------
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement. The Company agrees to pay, upon written demand
therefor by the Executive, all legal fees and expenses which the Executive
may reasonably incur as a result of any dispute or contest (regardless of
the outcome thereof) by or with the Company or others regarding the validity
or enforceability of, or liability under, any provision of this Agreement,
plus in each case interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Code. In any such action brought by the Executive
for damages or to enforce any provisions of this Agreement, he shall be
entitled to seek both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company's obligations
hereunder, in his sole discretion. If the parties hereto so agree in
writing, any disputes under this Agreement may be settled by arbitration.
The obligation of the Company under this paragraph 5. shall survive the
termination for any reason of this Agreement (whether such termination is by
the Company, by the Executive, upon the expiration of this Agreement or
otherwise).
b. In the event of any dispute or difference between the Company and
the Executive with respect to the subject matter of this Agreement and the
enforcement of rights hereunder, the Executive may, in his sole discretion
by written notice to the Company, require such dispute or difference to be
submitted to
8
<PAGE>
arbitration. The arbitrator or arbitrators shall be selected by agreement of the
parties or, if they cannot agree on an arbitrator or arbitrators within 30
days after the Executive had notified the Company of his desire to have the
question settled by arbitration, then the arbitrator or arbitrators shall
be selected by the American Arbitration Association (the "AAA") in Denver,
Colorado upon the application of the Executive. The determination reached
in such arbitration shall be final and binding on both parties without any
right of appeal or further dispute. Execution of the determination by such
arbitrator may be sought in any court of competent jurisdiction. The
arbitrators shall not be bound by judicial formalities and may abstain from
following the strict rules of evidence and shall interpret this Agreement
as an honorable engagement and not merely as a legal obligation. Unless
otherwise agreed by the parties, any such arbitration shall take place in
Denver, Colorado, and shall be conducted in accordance with the Rules of
the AAA.
6. Income Tax Withholding.
The Company may withhold from any payments made under this Agreement all
federal, state or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
7. Entire Understanding.
This Agreement contains the entire understanding between the Company and
the Executive with respect to the subject matter hereof and supersedes any prior
severance agreement between the Company and the Executive, except that this
Agreement shall not affect or operate to reduce any benefit or compensation
inuring to the Executive of any kind elsewhere provided and not expressly
provided for in this Agreement including without limitation, any benefit or
compensation under the Company's Annual Incentive Plan, Supplemental Benefit
Plan for Key Management Employees, and any excess or supplemental plan to the
Employees' Savings and Stock Ownership Plan.
8. Severability.
If, for any reason, any one or more of the provisions or part of a
provision contained in this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement
not held so invalid, illegal or unenforceable, and each other provision or part
of a
9
<PAGE>
provision shall to the full extent consistent with law continue in full force
and effect.
9. Consolidation, Merger, or Sale of Assets.
If the Company consolidates or merges into or with, or transfers all or
substantially all of its assets to, another corporation the term "the Company"
as used herein shall mean such other corporation and this Agreement shall
continue in full force and effect.
10. Notices.
All notices, requests, demands and other communications required or
permitted hereunder shall be given in writing and shall be deemed to have been
duly given if delivered or mailed, postage prepaid, first class as follows:
a. to the Company:
Public Service Company of Colorado
P.O. Box 840
Denver, Colorado 80201-0840
Attention: Senior Vice President and
General Counsel
b. to the Executive:
EXECUTIVE NAME
STREET ADDRESS
CITY, STATE ZIP CODE
or to such other address as either party shall have previously specified in
writing to the other.
11. No Attachment.
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
12. Binding Agreement.
10
<PAGE>
This Agreement shall be blinding upon, and shall inure to the benefit of,
the Executive and the Company and their respective permitted successors and
assigns.
13. Modification and Waiver.
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto. No term or condition of this Agreement
shall be deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written instrument
signed by the party charged with such waiver or estoppel. No such written
waiver shall be deemed a continuing waiver unless specifically stated therein,
and each such waiver shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.
14. Headings of No Effect.
The paragraph headings contained in this Agreement are included solely for
convenience of reference and shall not in any way affect the meaning or
interpretation of any of the provisions of this Agreement.
15. Governing Law.
This Agreement and its validity, interpretation, performance, and
enforcement shall be governed by the laws of the State of Colorado without
giving effect to the choice of law provisions in effect in such State.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its officers thereunto duly authorized, and the Executive has signed this
Agreement, all effective as of the date first above written.
PUBLIC SERVICE COMPANY OF COLORADO
By: _____________________________
_________________________________
EXECUTIVE NAME
11
<PAGE>
SCHEDULE TO FORM OF KEY EXECUTIVE SEVERANCE AGREEMENT, AS AMENDED
ON AUGUST 22, 1995 AND NOVEMBER 27, 1995
<TABLE>
<CAPTION>
ORIGINAL
EFFECTIVE AMENDMENT
EXECUTIVE DATE DATE(S)
- ------------------------------ ----------------- --------------------
<S> <C> <C>
Delwin D. Hock November 26, 1991 August 22, 1995
November 27, 1995
Wayne H. Brunetti July 18, 1994 August 22, 1995
November 27, 1995
Richard C. Kelly November 26, 1991 August 22, 1995
November 27, 1995
Patricia T. Smith December 5, 1994 August 22, 1995
November 27, 1995
W. Wayne Brown August 22, 1995 November 27, 1995
Ross C. King August 22, 1995 November 27, 1995
Earl E. McLaughlin, Jr. August 22, 1995 November 27, 1995
Ralph Sargent III August 22, 1995 November 27, 1995
Marilyn E. Taylor August 22, 1995 November 27, 1995
</TABLE>
NOTE: The terms of the severance agreements that were executed with each of the
above executives are substantially identical, except for the date of
execution.
12
<PAGE>
Exhibit 10(g)(4)
AGREEMENT
---------
THIS AGREEMENT, effective as of March 1, 1994, by and between Public
Service Company of Colorado ("Company") and A. Clegg Crawford ("Employee").
RECITALS:
Company and Employee have previously entered into an Employment Agreement
dated May 10, 1989 (the "Employment Agreement"). The parties desire to terminate
the Employment Agreement and to provide for the payment to Employee of the
benefits described in this Agreement, subject to the terms and conditions set
forth in this Agreement.
AGREEMENTS:
NOW THEREFORE, the Company and Employee agree as follows:
1. Effective date: Termination of Employment Agreement: This Agreement
-----------------------------------------------------
shall be effective as of March 1, 1994 (the "Effective Date"). The Employment
Agreement is terminated as of the Effective Date and Company and Employee agree
that all of their obligations under the Employment Agreement are terminated.
2. Employment Relationship: Employee is subject to the same terms and
-----------------------
conditions of employment and is entitled to the same benefits as other regular
full-time employees of the Company, except as specifically set forth in
Paragraphs 3 and 4 of this Agreement and except that Employee is not entitled to
participate in the Company's Supplemental Executive Retirement Benefit Plan.
Nothing contained in this Agreement shall be construed to create an obligation
on the part of the Company to employ Employee for any definite period of time.
3. Benefits: The Employee is entitled to vacation, insurance and other
--------
benefits as provided in the Company's Employee Benefit Plans in accordance with
the terms of those plans. For the purposes of accrual of vacation allowance and
sick leave time, the Employee has been credited with 20 years of service as of
May 29, 1989, and thereafter Employee has and will continue to accrue benefits
in the same manner as any other regular full-time employee of the Company.
4. Severance Pay: If Company terminates the employment of Employee
-------------
because Employee's position has been eliminated, Company will pay to Employee
severance pay in an amount equal to twenty-six (26) weeks of pay at Employee's
rate of pay immediately prior to termination, less all applicable state and
federal withholding taxes. The determination as to whether Employee's position
has been eliminated will be made in the sole and exclusive discretion of
Company. Employee is not entitled to severance pay upon termination of
employment other than as specifically set forth in this paragraph.
5. Deferred Compensation Plan: The Company agrees to provide the
--------------------------
following deferred compensation in accordance with the plan set forth below:
a. Deferred Compensation - Age 62: If the Employee remains employed with
------------------------------
the Company on or after his 62nd birthday, the Company agrees to pay the
Employee monthly benefits beginning on the first day of the month following the
Employee's termination of employment with the Company for a period of 240
months, 40% of the Employee's monthly rate of salary at the time of termination.
b. Integration with Public Service Retirement Plan: Deducted from any
-----------------------------------------------
amounts provided in subparagraph a above will be any benefits calculated at the
highest optional monthly benefit rate which the Employee is entitled to receive
under the Employee's Retirement Plan of the Company at the Employee's normal
retirement date under such plan.
<PAGE>
c. Disability: If the Employee, while in the employ of the Company, by
----------
reason of accident or illness becomes totally permanently disabled, as
determined by the Board of Directors of the Company, the Company shall pay
monthly to the Employee an amount to be calculated as if the Employee had
retired on the date of Board of Directors declares the Employee to be disabled.
d. Death Prior to Termination of Employment: For the purposes of this
----------------------------------------
Agreement, if the Employee dies prior to his termination of employment with the
Company, the Employee will be deemed to have terminated his employment on the
last day of the month prior to his death and his beneficiary shall be entitled
to the benefits provided in subparagraph e below.
e. Death After Termination of Employment: If the Employee dies after
-------------------------------------
termination of employment, the Company shall pay to the Employee's designated
beneficiary beginning the first day of the month following the Employee's death,
50% of the monthly benefits provided for in subparagraphs a or b above for the
remaining duration of the benefits. If no individual has been designated at the
time of the Employee's death, the beneficiary will be deemed to be his spouse.
f. Source of Payments: This deferred compensation plan is an unfunded,
-------------------
non-qualified Plan. It is a condition of this Agreement, and the Employee
herein expressly agrees, that he shall look solely to the Company for the
payment of benefits under the Plan. Such payments shall be made from the
general funds of the Company. The Employee or other person or persons having or
claiming a right to payments hereunder shall rely solely on the unsecured
promise of the Company set forth herein. Nothing in this Agreement shall be
construed to give the Employee or any other person a right, title, interest or
claim in or to any specific asset, fund, reserve account or property of any kind
whatsoever, owned by the Company or in which the Company may have any right,
title or interest now or in the future. Further, to the extent, if any, that
the Company purchase life insurance upon the life of the Employee, all ownership
and beneficial rights to the insurance policies rest in the Company; the
policies will be subject to the claims of the Company's creditors; neither
Employee nor any beneficiary shall have any ownership in or claim to such policy
or policies; and no representations exist that the Employee or beneficiary is
secured by any such policy or policies or can control payment of any policy
proceeds. However, the Employee or beneficiary shall have the right to enforce
his claim against the company in the same manner as any other unsecured creditor
of the Company.
g. Forfeiture for Cause: No benefits shall be payable to either the
--------------------
Employee or his beneficiary hereunder if the Employee shall be found, after
review of all relevant facts, to have while employed by the Company or after
termination of employment by the Company, engaged in gross misconduct materially
detrimental to the legitimate interests of the Company. The good faith
determination of the Board of Directors of the Company that an act of this sort
has occurred with respect to the Employee shall be conclusive, whether or not
there shall be related public proceedings and without regard to the outcome
thereof.
h. No Alienation: The benefits provided hereunder shall not be subject to
-------------
alienation, assignment, pledge, anticipation, attachment, garnishment,
receivership, execution or levy of any kind, including liability for alimony or
support payments, and any attempt to cause such benefits to be so subject shall
not be recognized except to the extent as being required by law.
i. Appointment of Person to Receive Payment: If , within one year after
----------------------------------------
written notice from the Company or the Board of Directors mailed to any person
entitled to a payment hereunder at such person's last known address as shown on
the Company records, such person or his legal representative shall not have
presented himself to the Company or the Board of Directors or notified the
Company or Board of Directors in writing of his address, then the Board of
Directors may in its discretion appoint one or more of the spouse, the blood
relative or the legal representative for such person to receive such amount,
including any amount hereafter becoming due to such person (or his estate), in
proportions determined by it. Any action by the Board of Directors taken
hereunder in good faith shall be conclusive upon all persons.
j. Incapacity of Payee: If the Board of Directors determines that the
-------------------
Employee or beneficiary to whom the benefit is payable is legally incapacitated,
the Board of Directors may direct that any payment becoming due to such person
(unless claim shall be made therefore by a duly appointed legal representative)
be applied for his benefit, or paid to or applied for the benefit of his spouse,
children, a parent or other blood relative, or paid to a
<PAGE>
person with whom such incompetent person resides, and any such payment or
application so made shall be a complete discharge to the Board of Directors.
6. Arbitration: Any controversy or claim arising out of or relating to
-----------
this Agreement shall be settled solely by arbitration in the City and County of
Denver in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
7. Colorado Law: This Agreement has been made and entered into in the
-------------
State of Colorado, and it is intended that this Agreement shall be construed in
accordance with the laws of the State of Colorado.
8. Severability: If it is determined that any provision of this Agreement
------------
is invalid or of no force and effect, this shall not impair the remainder of
this Agreement and all other provisions shall remain in full force and effect.
9. Text to Control: The headings which are used through out this
---------------
Agreement are inserted for convenience only and do not change the meaning of the
paragraphs which follow.
10. Waiver, Complete Agreement and Modification:
-------------------------------------------
a. A waiver of any breach of this Agreement shall not be construed as a
waiver of any subsequent breach of the Agreement.
b. This Agreement contains the full and complete agreement between the
parties, concerning the employment of the Employee and supersedes all prior
statements, agreements, understandings, and representations with respect to the
employment of the Employee.
c. This Agreement may only be modified by written amendment, signed by
both the Employee and the Company.
This Agreement is effective as of March 1, 1994, regardless of the date of
execution.
PUBLIC SERVICE COMPANY OF COLORADO
/s/ D. D. Hock
By: ___________________________
D. D. Hock, Chairman,
President and
Chief Executive Officer
/s/ A. Clegg Crawford
__________________________
A. Clegg Crawford
<PAGE>
Exhibit 10(g)(5)
AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN
DELWIN D. HOCK AND PUBLIC SERVICE COMPANY OF COLORADO
THIS AMENDMENT is made, entered into and is effective as of this 22nd day of
August, 1995, by and between Public Service Company of Colorado, a Colorado
corporation (the "Company"), and Delwin D. Hock (the "Executive"). The
Employment Agreement between Company and Executive (the "Agreement") executed
on April 8, 1994, is amended as follows:
1. Section 7.6 is deleted in its entirety and rewritten to read as follows:
"7.6 TERMINATION AFTER ANNOUNCEMENT OR CHANGE IN CONTROL. In connection
with a Change in Control (as defined in the Severance Agreement), during
the Coverage Period (as defined in Section 3.a of the Severance
Agreement) the Executive shall be entitled to the greater of (a) the
payments he would otherwise be entitled to receive for the remaining
term of this Agreement; or (b) those payments provided under the
Severance Agreement. If it is determined that payments will be made
pursuant to this Agreement in connection with a Change in Control, the
Executive shall be entitled to tax-free reimbursements of any excise
taxes that may arise as a result of such payments."
2. The following language shall be added to the Agreement as Section 7.7:
<PAGE>
"7.7 EMPLOYMENT BY PARENT. The Executive's termination of employment
with the Company to become an employee of a corporation which owns 100%
of the Company shall not be considered a termination of employment for
purposes of this Agreement. The subsequent termination of Executive's
employment from such corporation shall be considered a termination of
employment for purposes of this Agreement."
PUBLIC SERVICE COMPANY OF COLORADO
/s/ Wayne H. Brunetti
By:__________________________________
EXECUTIVE
/s/ Delwin D. Hock
By:__________________________________
Delwin D. Hock
<PAGE>
Exhibit 10(g)(6)
AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN
WAYNE H. BRUNETTI AND PUBLIC SERVICE COMPANY OF COLORADO
THIS AMENDMENT is made, entered into and is effective as of this 22nd day of
August, 1995, by and between Public Service Company of Colorado, a Colorado
corporation (the "Company"), and Wayne H. Brunetti (the "Executive"). The
Employment Agreement between Company and Executive (the "Agreement") executed
on July 18, 1994, is amended as follows:
1. The phrase "Section 7.4 herein" contained in Section 4.1(b) shall be
deleted in its entirety and rewritten to read "Section 7.3 herein."
2. The sentence in Section 4.1 of the Agreement commencing with "For
purposes of this Agreement . . ." shall be deleted in its entirety and rewritten
to read as follows:
"For purposes of this Agreement, a Change in Control shall have the same
meaning as defined in the severance agreement between the Executive and
the Company (the "Severance Agreement")."
3. Section 7.4 is deleted in its entirety and rewritten to read as follows:
"7.4 TERMINATION AFTER ANNOUNCEMENT OR CHANGE IN CONTROL. In connection
with a Change in Control (as defined in Section 4.1 herein), during the
Coverage Period (as defined in Section 3.a of the Severance Agreement)
the Executive shall be entitled to the greater of
<PAGE>
(a) the payments he would otherwise be entitled to receive for the
remaining term of this Agreement; or (b) those payments provided under
the Severance Agreement. If it is determined that payments will be made
pursuant to this Agreement in connection with a Change in Control, the
Executive shall be entitled to tax-free reimbursements of any excise
taxes that may arise as a result of such payments. In addition, for
purposes of Section 4.1 of this Agreement, if there is a termination of
employment during the Coverage Period, the restrictions on the shares
referred to in Section 4.1 shall lapse and such shares shall become
freely tradable, subject to any transfer restrictions under applicable
federal and state securities laws."
4. The following language shall be added to the Agreement as Section 7.5:
"7.5 EMPLOYMENT BY PARENT. The Executive's termination of employment
with the Company to become an employee of a corporation which owns 100%
of the Company shall not be considered a termination of employment for
purposes of this Agreement. The subsequent termination of Executive's
employment from such corporation shall be considered a termination of
employment for purposes of this Agreement."
PUBLIC SERVICE COMPANY OF COLORADO
/s/ D. D. Hock
By:__________________________________
EXECUTIVE
/s/ Wayne H. Brunetti
By:__________________________________
Wayne H. Brunetti
<PAGE>
Exhibit 10(g)(7)
AMENDMENT TO EMPLOYMENT AGREEMENT BETWEEN
PATRICIA T. SMITH AND PUBLIC SERVICE COMPANY OF COLORADO
THIS AMENDMENT is made, entered into and is effective as of this 22nd day
of August, 1995, by and between Public Service Company of Colorado, a Colorado
corporation (the "Company"), and Patricia T. Smith (the "Executive"). The
Employment Agreement between Company and Executive (the "Agreement") executed on
December 5, 1994, is amended as follows:
1. The phrase "Section 7.4 herein" contained in Section 4.1(b) shall be
deleted in its entirety and rewritten to read "Section 7.3 herein."
2. The sentence in Section 4.1 of the Agreement commencing with "For
purposes of this Agreement . . ." shall be deleted in its entirety and rewritten
to read as follows:
"For purposes of this Agreement, a Change in Control shall have the same
meaning as defined in the severance agreement between the Executive and
the Company (the "Severance Agreement")."
3. Section 7.4 is deleted in its entirety and rewritten to read as follows:
"7.4 TERMINATION AFTER ANNOUNCEMENT OR CHANGE IN CONTROL. In connection
with a Change in Control (as defined in Section 4.1 herein), during the
Coverage Period (as defined in Section 3.a of the Severance Agreement)
the Executive shall be entitled to the greater of
<PAGE>
(a) the payments she would otherwise be entitled to receive for the
remaining term of this Agreement; or (b) those payments provided under
the Severance Agreement. If it is determined that payments will be made
pursuant to this Agreement in connection with a Change in Control, the
Executive shall be entitled to tax-free reimbursements of any excise
taxes that may arise as a result of such payments. In addition, for
purposes of Section 4.1 of this Agreement, if there is a termination of
employment during the Coverage Period, the restrictions on the shares
referred to in Section 4.1 shall lapse and such shares shall become
freely tradable, subject to any transfer restrictions under applicable
federal and state securities laws."
4. The following language shall be added to the Agreement as Section 7.5:
"7.5 EMPLOYMENT BY PARENT. The Executive's termination of employment
with the Company to become an employee of a corporation which owns 100%
of the Company shall not be considered a termination of employment for
purposes of this Agreement. The subsequent termination of Executive's
employment from such corporation shall be considered a termination of
employment for purposes of this Agreement."
PUBLIC SERVICE COMPANY OF COLORADO
/s/ D. D. Hock
By:__________________________________
EXECUTIVE
/s/ Patricia T. Smith
By:__________________________________
Patricia T. Smith
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF
PUBLIC SERVICE COMPANY OF COLORADO
AS OF DECEMBER 31, 1995
SUBSIDIARY STATE OF INCORPORATION
---------- ----------------------
1. Cheyenne Light, Fuel and Power Company Wyoming
2. e prime, inc Colorado
3. Fuel Resources Development Co. Colorado
4. Green and Clear Lakes Company New York
5. Natural Fuels Corporation Colorado
6. New Century Energies, Inc. Delaware
7. PS Colorado Credit Corporation Colorado
8. PSR Investments, Inc. Colorado
9. 1480 Welton, Inc. Colorado
10. WestGas InterState, Inc. Colorado
11. Young Gas Storage Company Delaware
The names of several majority-owned subsidiaries are omitted since such
subsidiaries, considered in the aggregate as a single subsidiary, would not
constitute a significant subsidiary as of December 31, 1995.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PUBLIC
SERVICE COMPANY OF COLORADO AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS OF
DECEMBER 31, 1995 AND CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE
YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,480,712
<OTHER-PROPERTY-AND-INVEST> 24,282
<TOTAL-CURRENT-ASSETS> 468,587
<TOTAL-DEFERRED-CHARGES> 380,714
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,354,295
<COMMON> 316,791
<CAPITAL-SURPLUS-PAID-IN> 680,315
<RETAINED-EARNINGS> 346,539
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,343,645
41,289
140,008
<LONG-TERM-DEBT-NET> 1,195,553
<SHORT-TERM-NOTES> 45,800
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 242,250
<LONG-TERM-DEBT-CURRENT-PORT> 82,836
2,576
<CAPITAL-LEASE-OBLIGATIONS> 53,702
<LEASES-CURRENT> 9,776
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,260,338
<TOT-CAPITALIZATION-AND-LIAB> 4,354,295
<GROSS-OPERATING-REVENUE> 2,110,601
<INCOME-TAX-EXPENSE> 95,357
<OTHER-OPERATING-EXPENSES> 350,093
<TOTAL-OPERATING-EXPENSES> 1,788,851
<OPERATING-INCOME-LOSS> 321,750
<OTHER-INCOME-NET> 1,012
<INCOME-BEFORE-INTEREST-EXPEN> 322,762
<TOTAL-INTEREST-EXPENSE> 143,906
<NET-INCOME> 178,856
11,963
<EARNINGS-AVAILABLE-FOR-COMM> 166,893
<COMMON-STOCK-DIVIDENDS> 128,587
<TOTAL-INTEREST-ON-BONDS> 85,832
<CASH-FLOW-OPERATIONS> 385,699
<EPS-PRIMARY> 2.65
<EPS-DILUTED> 2.65
</TABLE>
