Allegheny Power 2015 Annual Report Download - page 131
Download and view the complete annual report
Please find page 131 of the 2015 Allegheny Power annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.
114
12.SHORTTERMBORROWINGSANDBANKLINESOFCREDIT
FEandcertainofitssubsidiariesparticipateinthreefiveyearsyndicatedrevolvingcreditfacilitieswithaggregatecommitmentsof
$6.0billion(Facilities),whichareavailableuntilMarch31,2019.FirstEnergyhad$1,708millionand$1,799millionofshortterm
borrowingsasofDecember31,2015and2014,respectively.FirstEnergy’savailableliquidityundertheFacilitiesasofJanuary31,
2016wasasfollows:
Borrower(s)TypeMaturityCommitment
Available
Liquidity
(Inmillions)
FirstEnergy(1) Revolving March2019 $ 3,500
$ 1,595
FES/AESupply Revolving March2019 1,500
1,442
FET(2) Revolving March2019 1,000
1,000
Subtotal $ 6,000
$ 4,037
Cash —
63
Total $ 6,000
$ 4,100
(1)FEandtheUtilities
(2)IncludesFET,ATSIandTrAILassubsidiaryborrowers
Generally,borrowingsundereachoftheFacilitiesareavailabletoeachborrowerseparatelyandmatureontheearlierof364days
fromthedateofborrowingorthecommitmentterminationdate,asthesamemaybeextended.EachoftheFacilitiescontains
financialcovenantsrequiringeachborrowertomaintainaconsolidateddebttototalcapitalizationratio(asdefinedundereachofthe
Facilities)ofnomorethan65%,and75%forFET,measuredattheendofeachfiscalquarter.
The following table summarizes the borrowing sublimits for each borrower under the Facilities, the limitations on shortterm
indebtednessapplicabletoeachborrowerundercurrentregulatoryapprovalsandapplicablestatutoryand/orcharterlimitations,asof
December31,2015:
Borrower
Revolving
CreditFacility
SubLimits
Regulatoryand
OtherShortTerm
DebtLimitations
(Inmillions)
FE $ 3,500
$ —
(1)
FES 1,500
—
(2)
AESupply1,000
—
(2)
FET 1,000
—
(1)
OE 500
500
(3)
CEI500
500
(3)
TE 500
500
(3)
JCP&L 600
500
(3)
ME300
500
(3)
PN 300
300
(3)
WP 200
200
(3)
MP500
500
(3)
PE 150
150
(3)
ATSI 500
500
(3)
Penn50
100
(3)
TrAIL 400
400
(3)
(1)Nolimitations.
(2)NolimitationbaseduponblanketfinancingauthorizationfromtheFERCunderexistingmarketbasedratetariffs.
(3)Excludingamountswhichmaybeborrowedundertheregulatedcompanies'moneypool.
TheentireamountoftheFES/AESupplyFacility,$600millionoftheFEFacilityand$225millionoftheFETFacility,subjecttoeach
borrower’ssublimit,isavailablefortheissuanceofLOCs(subjecttoborrowingsdrawnundertheFacilities)expiringuptooneyear
115
fromthedateofissuance.ThestatedamountofoutstandingLOCswillcountagainsttotalcommitmentsavailableundereachofthe
Facilitiesandagainsttheapplicableborrower’sborrowingsublimit.
TheFacilitiesdonotcontainprovisionsthatrestricttheabilitytoborroworacceleratepaymentofoutstandingadvancesintheevent
ofanychangeincreditratingsoftheborrowers.Pricingisdefinedin“pricinggrids,”wherebythecostoffundsborrowedunderthe
Facilitiesisrelatedtothecreditratingsofthecompanyborrowingthefunds,otherthantheFETFacility,whichisbasedonits
subsidiaries'creditratings.Additionally,borrowingsundereachoftheFacilitiesaresubjecttotheusualandcustomaryprovisionsfor
accelerationupontheoccurrenceofeventsofdefault,includingacrossdefaultforotherindebtednessinexcessof$100million.
AsofDecember31,2015,theborrowerswereincompliancewiththeapplicabledebttototalcapitalizationratiocovenantsunderthe
respectiveFacilities.
TermLoans
FEhasa$1billionvariableratetermloancreditagreementwithamaturitydateofMarch31,2019.Theinitialborrowingunderthe
termloan,whichtooktheformofaEurodollarrateadvance,maybeconvertedfromtimetotime,inwholeorinpart,toalternatebase
rateadvancesorotherEurodollarrateadvances.TheproceedsfromthistermloanreducedborrowingsundertheFEFacility.
Additionally,FEhasa$200millionvariableratetermloanwithamaturitydateofMay29,2020.Eachofthetermloanscontains
covenantsandothertermsandconditionssubstantiallysimilartothoseoftheFEFacilitydescribedabove,includingthesame
consolidateddebttototalcapitalizationratiorequirement.
AsofDecember31,2015,FEwasincompliancewiththeapplicableconsolidateddebttototalcapitalizationratiocovenantsunder
eachofthesetermloans.
FirstEnergyMoneyPools
FirstEnergy’sutilityoperatingsubsidiarycompaniesalsohavetheabilitytoborrowfromeachotherandtheholdingcompanytomeet
theirshorttermworkingcapitalrequirements.AsimilarbutseparatearrangementexistsamongFirstEnergy’sunregulatedcompanies.
FESCadministersthesetwomoneypoolsandtrackssurplusfundsofFirstEnergyandtherespectiveregulatedandunregulated
subsidiaries,aswellasproceedsavailablefrombankborrowings.Companiesreceivingaloanunderthemoneypoolagreements
mustrepaytheprincipalamountoftheloan,togetherwithaccruedinterest,within364daysofborrowingthefunds.Therateof
interestisthesameforeachcompanyreceivingaloanfromtheirrespectivepoolandisbasedontheaveragecostoffundsavailable
throughthepool.Theaverageinterestrateforborrowingsin2015was0.84%perannumfortheregulatedcompanies’moneypool
and1.64%perannumfortheunregulatedcompanies’moneypool.
WeightedAverageInterestRates
Theweightedaverageinterestratesonshorttermborrowingsoutstanding,includingborrowingsundertheFirstEnergyMoneyPools,
asofDecember31,2015and2014,wereasfollows:
2015
2014
FirstEnergy
2.16
%
1.96
%
FES
—
%
3.34
%
13.ASSETRETIREMENTOBLIGATIONS
FirstEnergy has recognized applicable legal obligations forAROs and their associated cost primarily fornuclear power plant
decommissioning,reclamationofsludgedisposalponds,closureofcoalashdisposalsites,undergroundandabovegroundstorage
tanks, wastewater treatment lagoons and transformers containing PCBs. In addition, FirstEnergy has recognized conditional
retirementobligations,primarilyforasbestosremediation.
TheAROliabilitiesforFESprimarilyrelatetothedecommissioningoftheBeaverValley,DavisBesseandPerrynucleargenerating
facilities.FESusesanexpectedcashflowapproachtomeasurethefairvalueoftheirnucleardecommissioningAROs.
FirstEnergyandFESmaintainNDTsthatarelegallyrestrictedforpurposesofsettlingthenucleardecommissioningARO.Thefair
valuesofthedecommissioningtrustassetsasofDecember31,2015and2014wereasfollows:
2015
2014
(Inmillions)
FirstEnergy
$
2,282
$
2,341
FES
$
1,327
$
1,365