6. Capital leases:

In 1985, we sold and subsequently leased back from four purchasers their 60% undivided ownership interest in Scherer Unit No. 2. The gain from the sale is being amortized over the terms of the leases. In June 2012, under the provisions of the leases, we executed irrevocable notices of renewal to the leases beyond their base terms, for a period of 14.5 years, through December 31, 2027, for three of the leases and for a period of 18 years, through December 31, 2031, for one of the leases.

In 2000, we entered into a power purchase and sale agreement with Doyle I, LLC (Doyle Agreement) to purchase all of the output from a five-unit generation facility (Doyle) for a period of 15 years.

The minimum lease payments under the capital leases together with the present value of the net minimum lease payments as of December 31, 2012 are as follows:



Year Ending December 31,		(dollars in thousands)

		Scherer Unit No. 2			Doyle			Total

2013	$	23,406		$	12,447		$	35,853
2014		14,949			12,447			27,396
2015		14,949			18,297			33,246
2016		14,949			–			14,949
2017		14,949			–			14,949
2018-2031		160,178			–			160,178

Total minimum lease payments		243,380			43,191			286,571
Less: Amount representing interest		(121,258	)		(4,064	)		(125,322	)

Present value of net minimum lease payments		122,122			39,127			161,249
Less: Current portion		(14,924	)		(10,382	)		(25,306	)

Long-term balance	$	107,198		$	28,745		$	135,943

For Doyle, the lease payments vary to the extent the interest rate on the lessor's debt varies from 6.00%. At December 31, 2012, the weighted average interest rate on the Doyle lease obligation was 5.90% as compared to 5.86% at December 31, 2011.

The Scherer No. 2 lease and the Doyle Agreement are reported as capital leases. For rate-making purposes, however, we include the actual lease payments in our cost of service. The difference between lease payments and the aggregate of the amortization on the capital lease asset and the interest on the capital lease obligation is recognized as a regulatory asset on the balance sheet. Capital lease amortization is recorded in depreciation and amortization expense.