Progress Energy 2004 Annual Report Download - page 75

coverage, and $20.2 million for the incremental
replacement power costs coverage, in the event covered
losses at insured facilities exceed premiums, reserves,
reinsurance and other NEIL resources. Pursuant to
regulations of the NRC, each company’s property damage
insurance policies provide that all proceeds from such
insurance be applied, first, to place the plant in a safe and
stable condition after an accident and, second, to
decontaminate, before any proceeds can be used for
decommissioning, plant repair or restoration. Each
company is responsible to the extent losses may exceed
limits of the coverage described above.
Both PEC and PEF are insured against public liability for a
nuclear incident up to $10.8 billion per occurrence. Under
the current provisions of the Price Anderson Act, which
limits liability for accidents at nuclear power plants, each
company, as an owner of nuclear units, can be assessed
for a portion of any third-party liability claims arising from
an accident at any commercial nuclear power plant in
the United States. In the event that public liability claims
from an insured nuclear incident exceed $300 million
(currently available through commercial insurers), each
company would be subject to pro rata assessments of up
to $101 million for each reactor owned per occurrence.
Payment of such assessments would be made over time
as necessary to limit the payment in any one year to no
more than $10 million per reactor owned. Congress could
possibly approve revisions to the Price Anderson Act
during 2005 that could include increased limits and
assessments per reactor owned. The final outcome of
this matter cannot be predicted at this time.
Under the NEIL policies, if there were multiple terrorism
losses occurring within one year, NEIL would make
available one industry aggregate limit of $3.2 billion,
along with any amounts it recovers from reinsurance,
government indemnity or other sources up to the limits
for each claimant. If terrorism losses occurred beyond
the one-year period, a new set of limits and resources
would apply. For nuclear liability claims arising out of
terrorist acts, the primary level available through
commercial insurers is now subject to an industry
aggregate limit of $300 million. The second level of
coverage obtained through the assessments discussed
above would continue to apply to losses exceeding
$300 million and would provide coverage in excess of any
diminished primary limits due to the terrorist acts.
PEC and PEF self-insure their transmission and distribution
lines against loss due to storm damage and other natural
disasters. PEF accrues $6 million annually to a storm
damage reserve pursuant to a regulatory order and may
defer losses in excess of the reserve (See Notes 3 and 8A).
7. CURRENT ASSETS
Receivables
At December 31, receivables were comprised of:
Income tax receivables and interest income receivables
are not included in this classification. These amounts are
in prepaids and other current assets on the Consolidated
Balance Sheet.
Inventory
At December 31, inventory was comprised of:
8. REGULATORY MATTERS
A. Regulatory Assets and Liabilities
As regulated entities, the utilities are subject to the
provisions of SFAS No. 71. Accordingly, the utilities
record certain assets and liabilities resulting from the
effects of the ratemaking process that would not be
recorded under GAAP for nonregulated entities. The
utilities’ ability to continue to meet the criteria for
application of SFAS No. 71 may be affected in the future
by competitive forces and restructuring in the electric
utility industry. In the event that SFAS No. 71 no longer
applied to a separable portion of the Company’s
operations, related regulatory assets and liabilities would
be eliminated unless an appropriate regulatory recovery
mechanism was provided. Additionally, these factors
could result in an impairment of utility plant assets as
determined pursuant to SFAS No. 144.
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Progress Energy Annual Report 2004
(in millions) 2004 2003
Fuel for production $235 $210
Inventory for sale 230 167
Materials and supplies 517 530
Total inventory $982 $907
(in millions) 2004 2003
Trade accounts receivable $689 $705
Unbilled accounts receivable 271 293
Notes receivable 98 61
Other receivables 27 47
Unbilled other receivables 28 10
Allowance for doubtful accounts receivable (29) (32)
Total receivables $1,084 $1,084