Progress Energy 2006 Annual Report Download - page 86

N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
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Both of the Utilities are insured against public liability for
a nuclear incident up to $10.760 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 $100 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 $15 million per reactor owned.
Under the NEIL policies, if there were multiple terrorism
losses occurring within one year, NEIL would make
available one industry aggregate limit of $3.200 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 terrorist acts.
The Utilities self-insure their transmission and distribution
lines against loss due to storm damage and other natural
disasters. PEF maintains a storm damage reserve
pursuant to a regulatory order and may defer losses in
excess of the reserve (See Note 7C).
6. CURRENT ASSETS
A. Receivables
Income tax receivables and interest income receivables
are not included in receivables. These amounts are
included in prepaids and other current assets on
the Consolidated Balance Sheets. At December 31
receivables were comprised of:
B. Inventory
At December 31 inventory was comprised of:
Materials and supplies amounts above exclude long-
term combustion turbine inventory amounts included in
other assets and deferred debits for Progress Energy of
$44 million at December 31, 2006 and 2005.
Emission allowances above exclude $14 million of long-
term emission allowances included in other assets
and deferred debits at December 31, 2005. We did not
have any long-term emission allowance amounts at
December 31, 2006.
7. 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
could be affected in the future by competitive forces and
restructuring in the electric utility industry. In the event
that SFAS No. 71 no longer applies to a separable portion
of our operations, related regulatory assets and liabilities
would be eliminated unless an appropriate regulatory
recovery mechanism was provided. Additionally, such an
event could result in an impairment of utility plant assets
as determined pursuant to SFAS No. 144.
(in millions) 2006 2005
Trade accounts receivable $628 $661
Unbilled accounts receivable 227 227
Notes receivable 57 83
Other receivables 46 45
Allowance for doubtful accounts receivable (28) (19)
Total receivables $930 $997
(in millions) 2006 2005
Fuel for production $470 $321
Inventory for sale 34 61
Materials and supplies 443 406
Emission allowances 22 35
Total current inventory $969 $823