Dominion Power 2000 Annual Report Download - page 56

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Notes to Consolidated Financial Statements (continued)
The amount being accrued for decommissioning is equal to the
amount being collected from ratepayers and is included in depreci-
ation, depletion and amortization expense. The decommissioning
collections were $36 million per year for the period 1998 through
2000. The expense provisions were $36 million, $36 million and
$26 million in 2000, 1999 and 1998, respectively. Net earnings of
the trusts’ investments are included in Other income. In 2000,
1999 and 1998, net earnings were $20 million, $17 million and
$18 million, respectively. The accretion of the decommissioning
obligation is equal to the trusts’ net earnings and is also recorded
in Other income.
The accumulated provision for decommissioning, which is
included in Accumulated depreciation, depletion and amortization
in the Consolidated Balance Sheets, includes the accrued expense
and accretion described above and any unrealized gains and losses
on the trusts’ investments. At December 31, 2000, the net unreal-
ized gains were $268 million, which is a decrease of $23 million
over the December 31, 1999 amount of $291 million. The accumu-
lated provision for decommissioning at December 31, 2000 was
$851 million. It was $818 million at December 31, 1999.
The NRC requires nuclear power plant owners to annually
update minimum financial assurance amounts for the future decom-
missioning of the nuclear facilities. Dominion’s 2000 NRC minimum
financial assurance amount, aggregated for the four nuclear units,
was $1.0 billion. Financial assurance is provided by a combination of
surety bonds and the funds being collected and funded in the exter-
nal trusts.
FASB is reviewing the accounting for nuclear plant decommis-
sioning. FASB has tentatively determined that the estimated cost of
decommissioning should be reported as a liability rather than as
accumulated depreciation and that a substantial portion of the
decommissioning obligation should be recognized earlier in the
operating life of the nuclear unit.
Dominion’s proportionate share of jointly-owned utility plants at
December 31, 2000 follows:
Bath
County North
Pumped Anna Clover
Storage Power Power
(millions, except percentages) Station Station Station
Ownership interest 60.0% 88.4% 50.0%
Plant in service $1,067 $1,875 $538
Accumulated depreciation 294 1,135 69
Nuclear fuel 350
Accumulated amortization of nuclear fuel 335
Construction work in progress 233 3
The co-owners are obligated to pay their share of all future con-
struction expenditures and operating costs of the jointly-owned
facilities in the same proportions as their respective ownership
interest. Such operating costs are classified in the appropriate
expense category in the Consolidated Statements of Income.
Note 15 Short-Term Debt and Credit Agreements
Dominion and its subsidiaries have credit agreements with various
expiration dates and pay fees in lieu of compensating balances in
connection with these agreements. These agreements provided for
maximum borrowings of $4.4 billion and $5.1 billion at December 31,
2000 and 1999, respectively. At December 31, 2000 and 1999, $295
million and $2.3 billion, respectively, was borrowed under such
agreements.
Dominion and its subsidiaries’ credit agreements also supported
$2.7 billion and $1.2 billion of commercial paper at December 31,
2000 and 1999, respectively. A significant portion of the commercial
paper is supported by credit agreements that have expiration dates
extending beyond one year. Therefore, a total of $250 million and
$364 million of the commercial paper was classified as long-term in
2000 and 1999, respectively. These borrowings were used primarily
to fund the interim financing of the CNG acquisition and operational
needs at Dominion and its subsidiaries.
In June 2000, Dominion established a $1.75 billion credit facility
that supports its combined commercial paper programs. Subject to
the maximum aggregate limit of $1.75 billion, Virginia Power and
CNG may borrow up to the full commitment and Dominion may
borrow up to $750 million.
A summary of the amounts that are classified as short-term
debt at December 31 follows:
(millions, except percentages) 2000 1999
Weighted Weighted
Amount Average Amount Average
Outstanding Interest Rate Outstanding Interest Rate
Commercial paper $2,414 6.5% $813 5.3%
Term-notes 823 7.0% 57 9.7%
Total $3,237 $870