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. Three of the leases have lease terms through December 31, 2027, and one lease extends through June 30, 2031. The assumed interest rate at inception on the lease obligation is 11.05%.

The minimum lease payments under the capital leases together with the present value of the net minimum lease payments as of December 31, 2015 are as follows:


Year Ending December 31,		(dollars in thousands)

		Scherer Unit No. 2

2016	$	14,949
2017		14,949
2018		14,949
2019		14,949
2020		14,949
2021-2031		115,331

Total minimum lease payments		190,076
Less: Amount representing interest		(89,620	)

Present value of net minimum lease payments		100,456
Less: Current portion		(3,955	)

Long-term balance	$	96,501

The Scherer No. 2 lease is reported as a capital lease. 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 or regulatory liability on the consolidated balance sheet. Capital lease amortization is recorded in depreciation and amortization expense.

In 2000, we entered into a power purchase and sale agreement with Doyle I, LLC (Doyle Agreement), an affiliate of one of our members, to purchase all of the output from a five-unit generation facility (Doyle) for a period of 15 years, through August 24, 2015. We exercised our purchase option and acquired the facility on August 24, 2015.