-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NrQ1uZLhRagXdxReq/3ctf5IBZIJd0Rker48HhXz7YPPgSd5v1tBhqfo567/ke5B cswTnP1uZy68SaFOPb1/Dw== 0000927356-96-000080.txt : 19960228 0000927356-96-000080.hdr.sgml : 19960228 ACCESSION NUMBER: 0000927356-96-000080 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960227 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE CO OF COLORADO CENTRAL INDEX KEY: 0000081018 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 840296600 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03280 FILM NUMBER: 96525990 BUSINESS ADDRESS: STREET 1: 1225 17TH ST STE 300 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3035717511 MAIL ADDRESS: STREET 1: P O BOX 840 STE 300 CITY: DENVER STATE: CO ZIP: 80201 10-K 1 FORM 10-K DATED DEC. 31, 1995. 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. TABLE OF CONTENTS PART I
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
i
Item 4. Submission of Matters to a Vote of Security Holders...................... 21 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 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 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.......... 73
ii
Experts................................................. 75 Consent of Independent Public Accountants............... 76 Power of Attorney....................................... 76 Signatures.............................................. 77 Exhibit Index........................................... 79
iii TERMS The abbreviations or acronyms used in the text and notes are defined below:
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.
iv
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
v 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 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
Mw Contracted For at the Time of the Anticipated Generating Summer 1996 Net Firm Contract Company Source System Peak Demand Expiration - --------------------------------------- ------------------------ -------------------- ----------- 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 =========
____________ (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 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 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:
Weighted Average Coal* Gas All Fuels** ----------- ---------- ----------- Cost $ % Cost $ % Cost $ 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
* 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
MINIMUM MAXIMUM CONTRACT DELIVERY DELIVERY MAXIMUM PER CONTRACT YEAR PER CONTRACT YEAR SULFUR COAL SUPPLIER AND DELIVERY YEAR IN TONS IN TONS CONTENT - ------------------------------- ------------------ ----------------- --------- 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)
(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 6 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. 7 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 8 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. 9 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 10 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. 11 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 12 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). 13 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 14 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 CONSOLIDATED ELECTRIC OPERATING STATISTICS
YEAR ENDED DECEMBER 31, --------------------------------------------------------------- 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- 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
- ------------------------- (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 CONSOLIDATED GAS OPERATING STATISTICS
YEAR ENDED DECEMBER 31, ------------------------------------------------- 1995 1994 1993 1992 1991 -------- -------- --------- -------- -------- 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
- ------------------------- (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 MAP OF ELECTRIC TRANSMISSION INTERCONNECTED SYSTEM APPEARS HERE 18 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:
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 ------------------------ --------------- ----------------------- ------- 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 ======== ========
________________ * 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 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:
Utility Location - ------- -------- 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
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 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 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.
Dividends Price Range Year and Quarter Declared High Low - ------------------- --------- ----------- ------- 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
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 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.
YEAR ENDED DECEMBER 31, --------------------------------------------------------------- 1995 1994 1993 1992 1991 ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS-EXCEPT PER SHARE DATA & RATIOS) 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
- ------------------------- (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 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 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:
INCREASE (DECREASE) FROM PRIOR YEARS 1995 1994 ---------- ---------- (THOUSANDS OF DOLLARS) 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 ======= =======
The following table summarizes electric Kwh sales by major customer classes:
MILLIONS OF % CHANGE KWH SALES FROM PRIOR YEARS --------------- ---------------- 1995 1994 1995 1994 ------ ------ ------ ------ 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 ====== =======
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 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:
INCREASE (DECREASE) FROM PRIOR YEARS 1995 1994 ----------- ----------- (THOUSANDS OF DOLLARS) 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) ======= ========
26 The following table summarizes gas Mcf deliveries by major customer classes:
MILLIONS OF % CHANGE MCF DELIVERIES FROM PRIOR YEARS -------------- ------------------ 1995 1994 1995 1994 ------ ------ ------- --------- 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) ===== =====
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 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 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
1995 1994 1993 ------ ------ ------ Net cash provided by operating activities (in millions) $385.7 $245.7 $279.9
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.
1995 1994 1993 -------- -------- -------- Net cash used in investing activities (in millions) $(284.6) $(177.4) $(239.3)
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).
1995 1994 1993 ------- ------- ------ Net cash used in financing activities (in millions) $(92.3) $(80.5) $(73.7)
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 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:
1996 1997 1998 -------- -------- -------- (THOUSANDS OF DOLLARS) 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 ======== ======== ========
* 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 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 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 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 PUBLIC SERVICE COMPANY OF COLORADO AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (THOUSANDS OF DOLLARS) DECEMBER 31, 1995 AND 1994 ASSETS
1995 1994 ---------- ---------- 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 ========== ==========
The accompanying notes to consolidated financial statements are an integral part of these financial statements. 34 PUBLIC SERVICE COMPANY OF COLORADO AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (THOUSANDS OF DOLLARS) DECEMBER 31, 1995 AND 1994 CAPITAL AND LIABILITIES
1995 1994 ---------- ---------- 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 ========= =========
The accompanying notes to consolidated financial statements are an integral part of these financial statements. 35 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
1995 1994 1993 ---------- ---------- ---------- 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 ========== ========== ==========
The accompanying notes to consolidated financial statements are an integral part of these financial statements. 36 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
COMMON STOCK, $5 PREMIUM PAR VALUE ON -------------------- COMMON RETAINED SHARES AMOUNT STOCK EARNINGS TOTAL ---------- -------- -------- ---------- ----------- 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 ========== ======== ======== ========== ===========
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 PUBLIC SERVICE COMPANY OF COLORADO AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (THOUSANDS OF DOLLARS) YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ---------- ---------- ---------- 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 ========= ========= =========
The accompanying notes to consolidated financial statements are an integral part of these financial statements. 38 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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED) The following regulatory assets are reflected in the Company's consolidated balance sheets:
RECOVERY 1995 1994 THROUGH -------- -------- ------------ (THOUSANDS OF DOLLARS) 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 ======== ========
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 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:
1995 1994 1993 -------- -------- -------- (THOUSANDS OF DOLLARS) Income taxes... $ 58,662 $ 41,763 $ 49,196 Interest....... $140,823 $126,250 $129,844
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 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:
1995 1994 ---------- ---------- (THOUSANDS OF DOLLARS) 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 ======== ========
42 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 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 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 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 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 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.
PREFERRED STOCK 1995 1994 ---------------------- ---------------------- SHARES AMOUNT SHARES AMOUNT --------- ----------- --------- ----------- (THOUSANDS (THOUSANDS OF DOLLARS) OF DOLLARS) 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 ========= ======= ========= =======
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 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.
6. LONG-TERM DEBT 1995 1994 ----------- ----------- (THOUSANDS OF DOLLARS) 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 ========== =========
49 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):
YEAR MATURITIES SINKING FUND REQUIREMENTS TOTAL 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
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:
1995 1994 ---------- ---------- (THOUSANDS OF DOLLARS) 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 ======== ========
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 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 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 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 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 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 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:
REGIONAL QFS UTILITIES TOTAL ---------- ---------- ---------- (THOUSANDS OF DOLLARS) 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 ========== ========== ==========
Historically, all minimum coal, coal transportation, natural gas and purchased power requirements have been met. 56 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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED) Estimated future minimum lease payments at December 31, 1995 are as follows:
CAPITAL OPERATING LEASES LEASES -------- --------- (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 ========
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:
PLANT CONSTRUCTION IN ACCUMULATED WORK IN SERVICE DEPRECIATION PROGRESS OWNERSHIP % ------- ------------ ------------ ----------- (THOUSANDS OF DOLLARS) 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 ======== ======== ======
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED) The net pension expense in 1995, 1994 and 1993 was comprised of:
1995 1994 1993 ---------- --------- --------- (THOUSANDS OF DOLLARS) 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 ========= ======== ========
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:
APR -DEC JAN - MAR 1995 1994 1994 1993 ----- --------- ---------- ----- 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%
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.
1995 1994 ---------- ---------- (THOUSANDS OF DOLLARS) 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 ========= =========
Significant assumptions used in determining the benefit obligations at the end of each respective year were:
1995 1994 ----- ----- Discount rate..................................... 7.25% 8.75% Expected long-term increase in compensation level.. 4.0% 5.0%
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 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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED) The net periodic postretirement benefit cost in 1995, 1994 and 1993 under SFAS 106 was comprised of:
1995 1994 1993 --------- ---------- -------- (THOUSANDS OF DOLLARS) 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 ======== ======== ========
Significant assumptions used in determining net periodic postretirement benefit cost were:
APR -DEC JAN - MAR 1995 1994 1994 1993 -------- -------- -------- ------- 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%
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.
1995 1994 ------------ -------- (THOUSANDS OF DOLLARS) 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 ========= =========
Significant assumptions used in determining the accumulated postretirement benefit obligation at the end of each respective year were:
1995 1994 ----- ----- 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%
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 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.
1995 1994 -------------------- ---------------------- CARRYING FAIR CARRYING FAIR AMOUNT VALUE AMOUNT VALUE ---------- ---------- ---------- ---------- (THOUSANDS OF DOLLARS) 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
62 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:
1995 1994 1993 ------- ------- ------- (THOUSANDS OF DOLLARS) 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 ======= ======= =======
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 NOTES TO CONSOLIDTED FINANCIAL STATEMENTS-(CONTINUED) A reconciliation of the statutory U.S. income tax rates and the effective tax rates follows:
1995 1994 1993 --------------- ---------------- --------------- (THOUSAND OF DOLLARS) 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% ======= ==== ======== ==== ======= ====
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:
1995 1994 ---------- ---------- (THOUSANDS OF DOLLARS) 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 ======== ========
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED) 14. SEGMENTS OF BUSINESS
1995 ELECTRIC GAS OTHER TOTAL --------- ---------- -------- ------- ---------- (THOUSANDS OF DOLLARS) 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 ==========
(1) Includes additional expense of approximately $43.4 million for defueling and decommissioning. * Before income taxes. ** Includes allocation of common utility property. 65 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.
THREE MONTHS ENDED ----------------------------------------------------------- MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 -------- --------------- ------------------- ----------- 1995 (IN THOUSANDS-EXCEPT PER SHARE DATA) -------- 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
66 SCHEDULE II PUBLIC SERVICE COMPANY OF COLORADO AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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) 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 ========== ========= ========== ========== =======
- ----------------- (1) Uncollectible accounts subsequently recovered, transfers from customers' deposit, etc. (2) Uncollectible accounts written off. 67 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)
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- (THOUSANDS OF DOLLARS, EXCEPT RATIOS) 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 ======== ======== ======== ======== ========
68 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)
YEAR ENDED DECEMBER 31, ------------------------------------------------ 1995 1994 1993 1992 1991 -------- -------- -------- -------- -------- (Thousand of Dollars, except ratios) 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 ======== ======== ======== ======== ========
69 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):
Executive Officers Initial Effective Date - ------------------ ---------------------- 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
70 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
* 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 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 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 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 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 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 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
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
78 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:
PREVIOUS FILING: PREVIOUS FILING: FORM; DATE OR EXHIBIT FORM; DATE OR EXHIBIT DATED AS OF FILE NO. NO. DATED AS OF FILE NO. NO. - ------------------------ ----------------- ------------ ------------- -------------------- ----------- 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)
79 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:
PREVIOUS FILING: FORM; DATE OR EXHIBIT DATED AS OF FILE NO. NO. ----------------- ----------------- ----------- 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)
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 (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 EX-10.(A)(1) 2 SETTLEMENT AGREEMENT DATED FEB. 9, 1996 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 CONTENTS
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-
-i- 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)
-ii- 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. 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- 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- 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. -4- 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 -5- 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, -6- 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 -7- 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. -8- 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". -9- 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 -10- 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. -11- 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 -12- 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. -13- (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 -14- 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 -15- 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." -16- 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. -17- (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. -18- (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." -19- (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. -20- (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 -21- 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.). -22- (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; -23- (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). -24- THIS PAGE LEFT INTENTIONALLY BLANK. -25- (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. -26- 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- 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. -28- 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- 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. -30- 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 -31- 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- (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- (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- 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, -35- 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- 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- APPENDIX A Property Description and Plan Map -38- 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. 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. APPENDIX B Description of Spent Fuel and Source Material -39- 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 Attachment SF-1 Source Certification [SHIPPING DATA FORM OF MONSANTO RESEARCH CORPORATION APPEARS HERE] (CHART OF PERMISSABLE LEVELS OF NEUTRONS IN AIR APPEARS HERE) ATTACHMENT SF-2 Location of Spent Fuel in the ISFSI
- ------------------------------------------------------------------------------------------------------------------------------------ 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- - ------------------------------------------------------------------------------------------------------------------------------------ 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 - ------------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------- 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- - ---------------------------------------------------------------------------------------------------------------------------------- 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 - ----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ 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- - ------------------------------------------------------------------------------------------------------------------------------------ 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 - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ 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- - ------------------------------------------------------------------------------------------------------------------------------------ 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 - ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------- 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- - -------------------------------------------------------------------------------------------------------------------------------- 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 - --------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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- - ----------------------------------------------------------------------------------------------------------------------------------- 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 - -----------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------ 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- - ------------------------------------------------------------------------------------------------------------------------------ 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 - ------------------------------------------------------------------------------------------------------------------------------
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. Attachment SF-3 Copies of DOE/NRC Form 742C Physical Inventory Listing - ----------------------------------------------------------------------------------------------------------------------------------- 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
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------ 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 - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------ 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 - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------ 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 - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------ 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 - -----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -------- -------- -------------- -------------- ----------- ----- ---- ----- ---- ----- ------ ----- ----- ----------- ------ ------ 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 - -----------------------------------------------------------------------------------------------------------------------------------
Attachment SF-4 ISFSI Inventory ISFSI INVENTORY --------------- VAULT A -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT A -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT B -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT B -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT C -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT C -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT D -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT D -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT E -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT E -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT F -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT F -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 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
/ ---------------------------------- Initials Date ISFSI INVENTORY --------------- VAULT S -------
PREVIOUS STORAGE INVENTORY CURRENT INVENTORY LOCATION SEAL NUMBER SEAL NUMBER REMARKS - -------- ----------- ----------------- ------- 1 Empty N/A No Canister 2 Empty N/A No Canister 3 Empty N/A No Canister
/ ---------------------------------- Initials Date APPENDIX C Escrow Trust Account Agreement -40- 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 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 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 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 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 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 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 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 (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 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 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 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 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 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 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) 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) 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 APPENDIX D Coverage and Indemnity Under the Price Anderson Act -41- 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- (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- (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- 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- (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- 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- 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- 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- APPENDIX E Order Related to Dismissal of District of Columbia Civil Action #95-0328 -10- 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 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- EX-10.(E)(2) 3 OMNIBUS INCENTIVE PLAN AS AMENDED 1-1-96 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 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 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 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- 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. 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 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 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 (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 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 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 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 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. EX-10.(E)(4) 4 FORM OF KEY EXECUTIVE SEVERANCE AGREEMENT AS AMENDED 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 (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 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 3 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 4 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 5 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 (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 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 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 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 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 SCHEDULE TO FORM OF KEY EXECUTIVE SEVERANCE AGREEMENT, AS AMENDED ON AUGUST 22, 1995 AND NOVEMBER 27, 1995
ORIGINAL EFFECTIVE AMENDMENT EXECUTIVE DATE DATE(S) - ------------------------------ ----------------- -------------------- 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
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 EX-10.(G)(4) 5 EMPLOYMENT AGREEMENT CLEGG CRAWFORD 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. 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 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 EX-10.(G)(5) 6 AMENDMENT TO EMPLOYMENT AGREEMENT DELWIN HOCK 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: "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 EX-10.(G)(6) 7 ADMENDMENT TO EMPLOYMENT AGREEMENT WAYNE BRUNETTI 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 (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 EX-10.(G)(7) 8 ADMENDMENT TO EMPLOYMENT AGREEMENT PATRICIA SMITH 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 (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 EX-21 9 SUBSIDIARIES OF PUBLIC SERVICE OF COLORADO 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. EX-27 10 FINANCIAL DATA SCHEDULE UT
UT 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. 1,000 12-MOS DEC-31-1995 DEC-31-1995 PER-BOOK 3,480,712 24,282 468,587 380,714 0 4,354,295 316,791 680,315 346,539 1,343,645 41,289 140,008 1,195,553 45,800 0 242,250 82,836 2,576 53,702 9,776 1,260,338 4,354,295 2,110,601 95,357 350,093 1,788,851 321,750 1,012 322,762 143,906 178,856 11,963 166,893 128,587 85,832 385,699 2.65 2.65
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