* This report has been discontinued; summary 2001 data are available in the new Electric Power Annual 2001; detailed data will be available in database files on the Internet.

Financial Statistics of
Major U.S. Publicly Owned Electric Utilities 2000

About The Industry

The U.S. electric power industry is a combination of electric utilities (investor-owned, publicly owned, cooperatives, and Federal) and nonutility power producers. Investor-owned electric utilities account for over three-fourths of the sales of electricity and revenue in the industry. Historically, the investor-owned electric utilities served the large consolidated markets and operated in all States except Nebraska. Hawaii is the only State in which all electricity is supplied by investor-owned electric utilities.

Publicly owned electric utilities are nonprofit operations that have been established to serve their communities and nearby consumers at cost. The publicly owned electric utilities in this publication include municipals, public power districts, State authorities, irrigation districts, and other State organizations. Publicly owned electric utilities are exempt from taxes and can obtain new financing at lower rates than investor-owned electric utilities.

The publicly owned electric utilities are divided into generators and nongenerators (in contrast, virtually all investor-owned electric utilities own and operate generating capacity). Generators are those electric utilities that have investment in electric utility plant and production to supply some or all of their consumer needs. However, many generators can supplement their demand by purchasing power. The nongenerators cannot produce electric power for end use and rely exclusively on purchasing power. Their primary function is to transmit and distribute electricity to their consumers. The nongenerators comprise over half of the total number of major publicly owned electric utilities.

Cooperative electric utilities are owned by their members and are established to provide electricity to those members. The Rural Electrification Administration (prior to the Rural Utilities Service), U.S. Department of Agriculture, was established under the Rural Electrification Act of 1936 with the purpose to extend electric service to small rural communities (usually under 1,500 consumers) and farms where it was more expensive to provide service. The National Rural Utilities Cooperative Finance Corporation, the Federal Financing Bank, and the Bank for Cooperatives are the most important sources of debt financing for Cooperatives. Cooperative borrowers (680 of 894 in 2000 total cooperatives) currently operate in 46 States. Financial data for the cooperative borrowers are found in the Statistical Report, Rural Electric Borrowers published by the Rural Utilities Service of the U.S. Department of Agriculture. Summary tables for the cooperative borrowers are provided in Appendix A.

Federal electric utilities are also presented in this publication and include the four Federal power marketing administrations, the Tennessee Valley Authority, and the U.S. Bureau of Indian Affairs. The four Federal power marketing administrations are the Bonneville Power Administration, the Southeastern Power Administration, the Southwestern Power Administration, and the Western Area Power Administration. Electric power produced by Federal electric utilities is generated primarily by water resources. This power, which is not produced for profit, is primarily sold in the wholesale market to other electric utilities rather than being distributed to ultimate consumers. As required by law, publicly owned and cooperative electric utilities are given preference in the purchase of this less expensive power produced by the Federal electric utilities.

Industry Profile

Key facts of sales and revenues in 2000 are:

• The 2,009 publicly owned electric utilities, which accounted for close to two-thirds of all electric utilities, accounted for 14.7 percent of all revenues from sales to ultimate consumers and 19.3 percent of all revenues from sales for resale.
• The 894 cooperative electric utilities, more than a quarter of all electric utilities, accounted for 9.1 percent of all revenues from sales to ultimate con-sumers and 17.3 percent of all revenues from sales for resale.
• The 9 Federal electric utilities accounted for 0.6 percent of all revenues from sales to ultimate consumers and 12.8 percent of all revenues from sales for resale.
• The average ultimate consumers revenue per kilowatthour ranged from 2.5 to 6.9 cents depending on the type of electric utility servicing them. The overall average was 6.8 cents.
• The average sales for resale revenue per kilowatthour ranged from 3.6 to 4.5 cents, depending on the type of electric utility making the sale. The overall average was 4.1 cents.

Factors Affecting Major U.S. Publicly Owned Electric Utilities During 2000

Overview
Summary financial statistics are provided for major U.S. publicly owned electric utilities. These statistics include data for:

• 506 electric utilities for 2000
• 493 electric utilities for 1999
• 487 electric utilities for 1998
• 544 electric utilities for 1997
• 515 electric utilities for 1996

Economic Context. Economic growth characterized 2000 with the real gross domestic product (GDP) growing by 4.1 percent, the same as 1999. Economic expansion maintained considerable momentum during 2000. This is the fifth year in a row in which the Federal Reserve used minimal intervention to stimulate the economy. Another sign of the sturdy economy was that industrial production indexes increased a robust 5.7 percent last year. The consumer price index (CPI) rose a slight 3.4 percent during 2000, up slightly from 2.2 percent in 1999. Capacity utilization was 82.1 percent for 2000. This represents the ninth year in a row where the measure of economic activity as a percent of capacity has been over 80 percent.

Weather. Heating plus cooling degree-days actually averaged close to normal levels. Degree-days are relative measurements of outdoor air temperature with cooling-degree days being the number of degrees that the daily average temperature rises above 65 degrees and conversely, heating degree-days the number of degrees the average daily temperature falls below 65 degrees Fahrenheit. Heating degree-days were 2.5 percent below normal in 2000 and cooling degree-days 4.4 percent above normal. Variations in weather can significantly contribute to departures from normal by month and by geographical region and the subsequent effect on electricity demand, primarily in the residential sector.¹

Generator Electric Utilities versus Nongenerator Electric Utilities

The next section of the publication discusses generator and nongenerator electric utilities separately. The two groups are distinct because of operational differences resulting in significantly different financial profiles. For example, significant plant production expenses would not exist for nongenerator electric utilities because existing production plant expenses are mainly maintenance costs for standby plants. It should be noted that both generator and nongenerator electric utilities report according to varying fiscal years that are determined by their political localities.

Because nongenerator electric utilities purchase all their power needs, they have less plant investment than generator electric utilities per dollar of revenue generated. In 2000, generator electric utilities had $3.28 of electric utility plant and adjust (without nuclear fuel) per dollar of electric utility operating revenue, compared with $1.25 for nongenerator electric utilities.

Operation and maintenance (O&M) expenses represent very different costs between the two groups of electric utilities. Purchase power expenses, which comprise the majority of nongenerators' O&M expenses, contain all the associated costs for the generating plants from which the power was purchased, including depreciation. This causes nongenerators' O&M expenses to appear higher than generators' O&M expenses on a mills per kilowatthour basis. In 2000, nongenerators' O&M expenses were 88.0 percent of revenues and depreciation was only 3.9 percent. For generators, depreciation of plant is shown directly, since all or some of their generating needs are met by their own plants. Generators' O&M expenses represented only 67.2 percent of revenues, but depreciation was 10.8 percent of revenues.

Financing is also different for the two groups. Generator electric utilities, with their larger plant investments per dollar of revenue, have more debt per dollar of revenue than nongenerator electric utilities. The large amount of debt creates greater interest expense. Interest expense represented 12.8 percent of revenues in 2000 for the generators versus just 1.1 percent of revenues for the nongenerators (Tables 7 and 18).

Endnotes

Questions and comments may be directed to:

Roger L. Sacquety
Project Manager
(202/287-1745) or Fax (202/287-1946)
Internet E-Mail: Roger.Sacquety@eia.doe.gov

Linda Bromley
Project Coordinator
(202/287-1748) or Fax (202/287-1946)
Internet E-Mail: Linda.Bromley@eia.doe.gov

Specific information about the data may be directed to:

Karen McDaniel
Mathematical Statistician
(202/287-1799) or Fax (202/287-1944)
Internet E-Mail: Karen.McDaniel@eia.doe.gov