SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549




                                    FORM 10-Q

(Mark One)

            [X}[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31,June 30, 2000

                                       OR


            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ___________ to _____________

                           Commission File No. 33-7591

                          Oglethorpe Power Corporation
                      (An Electric Membership Corporation)
             (Exact name of registrant as specified in its charter)

            Georgia                                                58-1211925
(State or other jurisdiction of                                (I.R.S. employer
incorporation or organization)                               identification no.)

     Post Office Box 1349
2100 East Exchange Place
     Tucker, Georgia                                               30085-1349
(Address of principal executive offices)                           (Zip Code)

Registrant's telephone number, including area code                (770) 270-7600


Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X  No

         Indicate the number of shares  outstanding of each of the  registrant's
classes of common stock, as of the latest  practicable date. The Registrant is a
membership corporation and has no authorized or outstanding equity securities.





                          OGLETHORPE POWER CORPORATION


                     INDEX TO QUARTERLY REPORT ON FORM 10-Q
                       FOR THE QUARTER ENDED MARCH 31,JUNE 30, 2000


                                                                        Page No.
                                                                        -------
PART I - FINANCIAL INFORMATION

     Item 1.  Financial Statements


               Condensed Balance Sheets as of March 31,June 30, 2000
               (Unaudited) and December 31, 1999                           3

               Condensed Statements of Revenues and Expenses and
               Comprehensive Margin (Unaudited) for the Three Months
               and Six Months ended March 31,June 30, 2000 and 1999                 5


               Condensed Statements of Cash Flows (Unaudited)
               for the ThreeSix Months Ended March 31,June 30, 2000 and 1999             6

               Notes to the Condensed Financial Statements                 7

      Item 2.  Management's Discussion and Analysis of
               Financial Condition and Results of Operations               8

      Item 3.  Quantitative and Qualitative Disclosures About
               Market Risk                                                1213



PART II - OTHER INFORMATION


      Item 6.  Exhibits and Reports on Form 8-K                           1314


SIGNATURES                                                                1415

                                       2





PART I -  FINANCIAL INFORMATION
Item 1.  Financial Statements

Oglethorpe Power Corporation
Condensed Balance Sheets
March 31,June 30, 2000 and December 31, 1999
- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           (dollars in thousands)

                                                                         2000                 1999
                               Assets                                 (Unaudited)
                                                                     -------------------------------------------------------------------------


Electric plant, at original cost:
  In service                                                            $4,856,774$4,862,550           $4,854,037
  Less:  Accumulated provision for depreciation                         (1,657,517)(1,689,412)          (1,625,933)
                                                                     ---------------        ---------------
                                                                                 3,199,257--------------       --------------
                                                                         3,173,138            3,228,104

  Nuclear fuel, at amortized cost                                           79,75181,090               84,565
  Construction work in progress                                             24,72045,923               18,299
                                                                     ---------------        ---------------
                                                                                 3,303,728--------------       --------------
                                                                         3,300,151            3,330,968
                                                                     ---------------        -----------------------------       --------------

Investments and funds:
  Decommissioning fund, at market                                          141,423141,732              135,703
  Deposit on Rocky Mountain transactions, at cost                           60,58361,588               59,579
  Bond, reserve and construction funds, at market                           28,08228,187               31,158
  Investment in associated organizations, at cost                           17,78817,782               17,919
  Other, at cost                                                             2,5102,094                2,535
                                                                     ---------------        ---------------
                                                                                   250,386--------------       --------------
                                                                           251,383              246,894
                                                                     ---------------        -----------------------------       --------------

Current assets:
  Cash and temporary cash investments, at cost                             165,022186,906              222,814
  Other short-term investments, at market                                   76,64877,850               75,482
  Customer receivables                                                     107,688128,172              109,705
  Notes receivable                                                         136,277150,873               94,070
  Inventories, at average cost                                              84,28481,793               89,766
  Prepayments and other current assets                                      21,46616,192               19,293
                                                                     ---------------        ---------------
                                                                                   591,385--------------       --------------
                                                                           641,786              611,130
                                                                     ---------------        -----------------------------       --------------

Deferred charges:
  Premium and loss on reacquired debt, being amortized                     191,269186,184              196,289
  Deferred amortization of Scherer leasehold                               101,705102,007              101,404
  Discontinued projects, being amortized                                    25,97423,928               28,020
  Deferred debt expense, being amortized                                    17,17816,998               17,070
  Other                                                                     31,04027,660               32,847
                                                                     ---------------        ---------------
                                                                                   367,166--------------       --------------
                                                                           356,777              375,630
                                                                     ---------------        ---------------
                                                                                $4,512,665--------------       --------------
                                                                        $4,550,097           $4,564,622
                                                                     ===============        =============================       ==============


The  accompanying  notes  are an  integral  part of  these  condensed  financial
statements.
3 Oglethorpe Power Corporation Condensed Balance Sheets March 31,June 30, 2000 and December 31, 1999 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- (dollars in thousands) 2000 1999 Equity and Liabilities (Unaudited) ----------------------------------------- Capitalization:----------------------------------- Capitalization: Patronage capital and membership fees (including unrealized loss of ($1,435)1,192) at March 31,June 30, 2000 and ($1,609) at December 31, 1999 on available-for-sale securities) $379,387$389,253 $370,025 Long-term debt 3,062,3763,040,934 3,103,590 Obligation under capital leases 273,280271,336 275,224 Obligation under Rocky Mountain transactions 60,58361,588 59,579 ---------------- ----------------- 3,775,626-------------- -------------- 3,763,111 3,808,418 ---------------- ------------------------------- -------------- Current liabilities: Long-term debt and capital leases due within one year 110,123111,411 129,419 Accounts payable 55,41153,380 69,555 Notes payable 130,253170,476 88,479 Accrued interest 14,48425,537 50,201 Accrued and withheld taxes 6,72413,406 26 Other current liabilities 8,0423,891 9,318 ---------------- ----------------- 325,037-------------- -------------- 378,101 346,998 ---------------- ------------------------------- -------------- Deferred credits and other liabilities: Gain on sale of plant, being amortized 55,18854,570 55,807 Net benefit of sale of income tax benefits, being amortized 16,01914,016 18,021 Net benefit of Rocky Mountain transactions, being amortized 85,20884,411 86,004 Accumulated deferred income taxes 63,485 63,203 Decommissioning reserve 169,505169,008 164,510 Other 22,59723,395 21,661 ---------------- ----------------- 412,002-------------- -------------- 408,885 409,206 ---------------- ----------------- $4,512,665-------------- -------------- $4,550,097 $4,564,622 ================ =============================== ============== The accompanying notes are an integral part of these condensed financial statements.
4 Oglethorpe Power Corporation Condensed Statements of Revenues and Expenses and Comprehensive Margin (Unaudited) For the Three and Six Months Ended March 31,June 30, 2000 and 1999 - -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- (dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2000 1999 -------------------------------------------- Operating revenues:2000 1999 ---------------------------- ---------------------------- Operating revenues: Sales to Members $264,705 $245,043$271,384 $262,540 $536,090 $507,583 Sales to non-Members 10,177 5,721 ------------- -------------13,642 11,377 23,820 17,099 ----------- ----------- ----------- ----------- Total operating revenues 274,882 250,764 ------------- -------------285,026 273,917 559,910 524,682 ----------- ----------- ----------- ----------- Operating expenses: Fuel 49,112 41,53555,597 46,606 104,709 88,141 Production 58,993 50,31151,994 52,559 111,096 102,847 Purchased power 72,514 63,00683,555 82,729 156,069 145,735 Depreciation and amortization 32,736 33,619 ------------- -------------32,894 33,681 65,631 67,300 ----------- ----------- ----------- ----------- Total operating expenses 213,355 188,471 ------------- -------------224,040 215,575 437,505 404,023 ----------- ----------- ----------- ----------- Operating margin 61,527 62,293 ------------- -------------60,986 58,342 122,405 120,659 ----------- ----------- ----------- ----------- Other income (expense): Investment income 8,949 7,455 Amortization of deferred gains 619 61911,614 10,610 20,563 18,064 Amortization of net benefit of sale of income tax benefits 2,799 2,799 5,597 5,597 Allowance for equity funds used during construction 12 2716 19 28 46 Other 259 191 ------------- -------------1,107 1,017 2,093 1,804 ----------- ----------- ----------- ----------- Total other income 12,638 11,091 ------------- -------------15,536 14,445 28,281 25,511 ----------- ----------- ----------- ----------- Interest charges: Interest on long-term debt and other obligations 65,076 65,74567,026 68,242 132,102 133,987 Allowance for debt funds used during construction (99) (460) ------------- -------------(128) 62 (227) (398) ----------- ----------- ----------- ----------- Net interest charges 64,977 65,285 ------------- -------------66,898 68,304 131,875 133,589 ----------- ----------- ----------- ----------- Net margin 9,188 8,0999,624 4,483 18,811 12,581 Net change in unrealized gain (loss) on available-for-saleavailable-for sale securities 174 (775) ------------- -------------243 (894) 417 (1,668) ----------- ----------- ----------- ----------- Comprehensive margin $9,362 $7,324 ============= =============$9,867 $3,589 $19,228 $10,913 =========== =========== =========== =========== The accompanying notes are an integralintregal part of these condensed financial statements.
5 Oglethorpe Power Corporation Condensed Statements of Cash Flows (Unaudited) For the ThreeSix Months Ended March 31,June 30, 2000 and 1999 - -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- (dollars in thousands) 2000 1999 -------------------------------------------------------------------------- Cash flows from operating activities: Net margin $ 9,18818,811 $ 8,099 ------------12,581 ------------- ------------- Adjustments to reconcile net margin to net cash provided by operating activities: Depreciation and amortization 51,244 38,108100,992 84,167 Allowance for equity funds used during construction (12) (27)(28) (46) Amortization of deferred gains (619) (619)(1,237) (1,237) Amortization of net benefit of sale of income tax benefits (2,799) (2,799)(5,597) (5,597) Deferred income taxes 283 - Other 2,337 3,2695,541 8,624 Change in net current assets, excluding long-term debt and capital leases due within one year and notes payable: Notes receivable 200 209(13) 415 Receivables 2,017 6,889(18,467) (14,914) Inventories 5,482 (6,676)7,973 (15,636) Prepayments and other current assets (2,174) (4,896)3,101 2,413 Accounts payable (14,144) 11,060(16,175) 14,700 Accrued interest (35,718) 4,331(24,665) 5,535 Accrued and withheld taxes 6,698 6,27013,380 12,740 Other current liabilities (1,277) (11,558) ------------(5,427) (9,630) ------------- ------------- Total adjustments 11,518 43,56159,661 81,534 ------------- ------------ ------------- Net cash (used in) provided by operating activities 20,706 51,660 ------------78,472 94,115 ------------- ------------- Cash flows from investing activities: Property additions (14,582) (18,632)(53,607) (32,454) Net proceeds from bond, reserve and construction funds 3,013 3302,964 92 Decrease in investment in associated organizations 131137 138 Increase in other short-term investments (930) (1,296)(1,944) (1,832) Increase in decommissioning fund (2,861) (4,467) ------------(6,673) (10,868) ------------- ------------- Net cash used in investing activities (15,229) (23,927) ------------(59,123) (44,924) ------------- ------------- Cash flows from financing activities: Long-term debt proceeds, net (2,957) (2,597)(1,710) (4,667) Long-term debt payments (60,685) (33,825)(81,014) (52,938) Increase in notes payable 41,774 39,89881,997 58,356 Increase in notes receivable under interim financing agreement (42,405) (48,908)(56,790) (70,435) Other 1,004 230 ------------2,260 964 ------------- ------------- Net cash used in financing activities (63,269) (45,202) ------------(55,257) (68,720) ------------- ------------- Net decrease in cash and temporary cash investments (57,792) (17,469)(35,908) (19,529) Cash and temporary cash investments at beginning of period 222,814 106,235 ------------------------- ------------- Cash and temporary cash investments at end of period $165,022$186,906 $ 88,766 ============86,706 ============= ============= Cash paid for: Interest (net of amounts capitalized) $140,325 $ 93,058 $ 52,415108,936 Income taxes - - The accompanying notes are an integral part of these condensed financial statements.
6 Oglethorpe Power Corporation Notes to Condensed Financial Statements March 31,June 30, 2000 and 1999 (A) The condensed financial statements included in this report have been prepared by Oglethorpe Power Corporation (Oglethorpe), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, the information furnished in this report reflects all adjustments (which include only normal recurring adjustments) and estimates necessary to present fairly, in all material respects, the results for the periods ended March 31,June 30, 2000 and 1999. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations, although Oglethorpe believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in Oglethorpe's latest Annual Report on Form 10-K, as filed with the SEC. Certain amounts for 1999 have been reclassified to conform with the current period presentation. The results of operations for the three and six month periodperiods ended March 31,June 30, 2000 are not necessarily indicative of results to be expected for the full year. (B) In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." The standard requiresIn June 2000, the Financial Accounting Standards Board issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," an amendment of SFAS No. 133. These standards require that all derivative instruments, with certain exceptions, be recognized as assets or liabilities and be measured at fair value. Oglethorpe is required to adopt SFAS No. 133 and SFAS No. 138 by January 1, 2001. Oglethorpe is currently assessing the impact that adoption of SFAS No. 133 and SFAS No. 138 will have on results of operations and financial condition. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations For the Three Months and Six Months Ended March 31,June 30, 2000 and 1999 - ---------------------------------------------------------------- Operating Revenues Revenues from sales to Oglethorpe's 39 retail electric distribution cooperative members (the Members) for the three months and six months ended March 31,June 30, 2000 were 8.0%3.4% and 5.6% higher than for the same periodperiods of 1999. Megawatt-hour (MWh) sales to Members were 9.5%11.5% and 10.5% higher in the current periodthree-month and six-month periods compared to the same periodperiods of 1999. The increase in MWh sales to Members in 2000 compared to 1999 was primarily due primarily to continued sales growth in the Members' service territories. The average revenue per MWh from sales to Members was 1.3% lower7.3% and 4.4% less for the current quarterperiods compared to the same periodperiods of 1999. The components of Member revenues for the three months and six months ended March 31,June 30, 2000 and 1999 were as follows: Three Months Six Months Ended March 31,June 30, Ended June 30, ------------------------ --------------------- 2000 1999 2000 1999 ---- ---- ---- ---- (dollars in thousands) Capacity revenues $155,316 $155,213$157,612 $155,210 $312,928 $310,424 Energy revenues 109,389 89,830113,772 107,330 223,162 197,159 -------- -------- ------- -------- Total $264,705 $245,043$271,384 $262,540 $536,090 $507,583 ======== ======== ======== ======== While capacity revenues from Members for the three months and six months ended March 31,June 30, 2000 compared to 1999 were virtually unchanged,increased slightly, energy revenues were 21.8%6.0% and 13.2% higher for the current quarterperiods compared to the same periodperiods of 1999. The increase in energy revenues in the current quarter of 2000 was partlyprimarily due to higher MWh sales and partly due to the pass-through of higher prices for purchased power energy and higher average fuel costs (see "Operating Expenses" below).sales. Oglethorpe's average energy revenue per MWh from sales to Members forwas 4.9% less in the current three-month period was 11.2% higher inof 2000 compared to 1999 and 2.4% higher for the six-month period of 2000 compared to 1999. The lower average energy revenue per MWh during the current quarter resulted primarily from lower average purchased power energy costs (see "Operating Expenses" below). 8 Sales to non-Members were primarily from energy sales to other utilities and power marketers. The following table summarizes the amounts of non-Member revenues from these sources for the three months and six months ended March 31,June 30, 2000 and 1999: Three Months Six Months Ended March 31, ------------------------June 30, Ended June 30, ----------------------- ------------------- 2000 1999 2000 1999 ---- ---- ---- ---- (dollars in thousands) Sales to other utilities $ 8,576 $3,826$11,768 $8,878 $20,345 $12,705 Sales to power marketers 1,601 1,8951,874 2,499 3,475 4,394 ------- ------- ------- ------ Total $10,177 $5,721$13,642 $11,377 $23,820 $17,099 ======= ============= ======= ======= Sales to other utilities represent sales made directly by Oglethorpe. Oglethorpe sells for its own account any energy available from the portion of its resources dedicated to Morgan Stanley Capital Group Inc. (Morgan Stanley) that is not scheduled by Morgan Stanley pursuant to its power marketer arrangement. Under the LG&E Energy Marketing Inc. (LEM) and Morgan Stanley power marketer arrangements, sales to the power marketers represent the net energy transmitted on behalf of LEM and Morgan Stanley off-system on a daily basis from Oglethorpe's total resources. Oglethorpe sold this energy to LEM at Oglethorpe's cost, subject to certain limitations, and to Morgan Stanley at a contractually fixed price. The volume of sales to power marketers depends primarily on the power marketers' decisions for servicing their load requirements. Operating Expenses Operating expenses for the three months and six months ended March 31,June 30, 2000 were 13.2%3.9% and 8.3% higher compared to the same periodperiods of 1999. This increase wasThese increases were primarily due to increaseshigher fuel costs for the current three-month and six-month periods compared to the same periods of 1999 and due to an increase in fuel, production and purchased power costs for the current quartersix-month period compared to the same quarterperiod of 1999. Fuel costs increased 18.2%19.3% and 18.8% for the current three-month and six-month periods compared to the same periods of 1999 primarily as a result of a 15.0% increaseincreases of 17.1% and 16.1%, respectively, in MWhs of generation. For the current quarter,three-month and six-month periods, nuclear generation was 15.4%13.8% and 14.7% higher and fossil generation was 11.6%19.5% and 15.8% higher as compared to the same periodperiods of 1999. The higher fossil generation resulted in a 2.9%1.9% and 2.3% increase in average fuel costs. The 17.3%8.0% increase in production costs for the six-month period ended June 30, 2000 was partly due to higher operations and maintenance (O&M) expenses for Plant Scherer and partly due to nuclear insurance costs.Plant Hatch and higher expenses incurred for special strategic projects. The higher O&M expenses for Plant Scherer resulted partly from a $1.6 million true up for sharing of O&M expenses between the owners of Units No. 1 and 2 (which include Oglethorpe) and the owners of Units No. 3 and 4 related to the burning of western coal. In addition,The higher O&M expenses for Plant Scherer Unit No. 2 incurred higher maintenanceHatch resulted from increased amortization of nuclear 9 refueling outage costs in the first quarter of 2000 compared to the same quarter of 1999. Also, O&M expenses in 1999 were lowered by a $2.1 million refund for nuclear insurance. Purchased power costs increased 15.1% in the current quarter compared to the same period of 1999 primarily as1999. Purchased power costs increased 1.0% and 7.1% for the three months and six months ended June 30, 2000 compared to the same periods of 1999. This was due to a result of a 23.7%33.9% and 29.2% increase in purchased MWhs. TheMWhs, offset by 24.6% and 17.1% lower average cost per MWh of total 9 purchased power was 7.0% lower in 2000 compared to the comparable periodperiods of 1999. Purchased power costs were as follows: Three Months Six Months Ended March 31, -----------------------June 30, Ended June 30, ---------------------- ------------------------ 2000 1999 2000 1999 ---- ---- ---- ---- (dollars in thousands) Capacity costs $21,611 $25,408$24,446 $26,941 $46,057 $52,349 Energy costs 50,903 37,59859,109 55,788 110,012 93,386 ------- ------- ------- ------ Total $72,514 $63,006$83,555 $82,729 $156,069 $145,735 ======= ======= ======== ======== Purchased power capacity costs for the three months and six months ended March 31,June 30, 2000 were approximately 14.9%9.3% and 12.0% lower than for the same periodperiods of 1999. These savings were primarily a result of a new power purchase agreement Oglethorpe entered into with Georgia Power Company (GPC) effective April 1, 1999 which replaced the Block Power Sale Agreement. Purchased power energy costs for the three-month periodand six-month periods of 2000 were 35.4%6.0% and 17.8% higher compared to the same periodperiods of 1999 primarily as a result of higher volume of purchased MWhs during the first quarter of 2000 compared to the first quarter of 1999. In addition, higherLower prices in the wholesale electricity markets during the current quarter, however, resulted in a 9.4% increase20.9% and 8.8% decrease in the average cost of purchased power energy per MWh for the three-month periodand six-month periods of 2000 compared to 1999. Other Income Investment income was higher forin the three-month periodthree-months and six-month periods of 2000 compared to the same periodperiods of 1999 partly due to interest earnings on the notes receivable from Smarr EMC relating to the Sewell Creek Energy Facility and partly due to higher cash and temporary cash investment balances and higher interest earnings on those investments. See "Financial Condition" for a further discussion of the Sewell Creek Energy Facility. Net Margin and Comprehensive Margin Oglethorpe's net margin for the three-month and six-month ended June 30, 2000 was $9.6 million and $18.8 million, respectively, compared to $4.5 million and $12.6 million for the same periods of 1999. The higher net margin resulted primarily from lower than budgeted fixed operations and maintenance (O&M) expenses. Comprehensive margin for Oglethorpe is net margin adjusted for the net change in unrealized gains and losses on investments in available-for-sale securities. 10 Financial Condition Total assetsCapital Requirements and total equity plus liabilities asSources of March 31, 2000 were $4.5 billion, which was $52 million less thanCapital - ------------------------------------------- As previously reported, Oglethorpe continues to plan for the total at December 31, 1999 due primarilyMembers' power requirements above owned and leased generating units and long-term power purchase contracts. The requirements for the Members have exceeded existing resources, and Oglethorpe expects the Members' requirements will continue to depreciationexceed existing resources over the next several years. Some of plant andthese requirements are now being met by combustion turbine facilities owned by Smarr EMC, a cooperative owned by 37 of Oglethorpe's 39 Members. Smarr EMC's 217 MW Smarr Energy Facility began operating in June 1999. Three of the decrease in cash and temporary cash investments, offset somewhat by an increase in the notes receivable for constructionfour units of Sewell Creek Energy Facility. TheSmarr EMC's 492 MW Sewell Creek Energy Facility were declared in commercial operation in June and July 2000. The fourth unit is being financed on anscheduled for commercial operation in the fall of 2000. Oglethorpe is providing the interim basis by Oglethorpe throughfinancing for the issuanceSewell Creek Energy Facility, and as of June 30, 2000, $145.5 million of commercial paper.paper was outstanding for this purpose. Smarr EMC has negotiatedarranged permanent financing for the Sewell Creek Energy Facility whichon a non-recourse basis to Oglethorpe. Oglethorpe expects will close shortly after it is placed into commercial operation (expected to occur in the summer of 2000). Oglethorpe expectsthat Smarr EMC to use the proceeds of this financing towill repay the notes to Oglethorpe and Oglethorpe will in turn repay the commercial paper issued in connection withfor the interim financing in the fall of the facility.2000. See "THE MEMBERS--Smarr EMC" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Financial Condition--Liquidity and Sources of Capital" in Items 1 and 7 of Oglethorpe's 1999 Annual Report on Form 10-K for a further discussion of Smarr EMC. 10 In addition, Oglethorpe has entered into agreements to construct six new combustion turbine units totaling 660 MW of capacity and has an option to construct a 520 MW combined cycle facility. Four of the combustion turbines are targeted for completion in 2002, with the other two to be completed in 2003. The combined cycle facility is targeted for completion in 2003. Oglethorpe estimates capital expenditures for these facilities, excluding interest during construction, will be approximately $88 million in 2000, $277 million in 2001, $129 million in 2002 and $22 million in 2003. The Members are considering participation in these facilities, through a subsidiary of Oglethorpe, Smarr EMC or a similar entity. Oglethorpe is providing some of the interim financing for these facilities and expects to arrange for construction and permanent financing either from the Rural Utilities Service or another lender. Oglethorpe is also evaluating options for constructing or contracting for additional capacity anticipated to be needed in 2004 and beyond. See "OGLETHORPE POWER CORPORATION--Relationship with RUS" in Item 1 of Oglethorpe's 1999 Annual Report on Form 10-K. General - ------- Total assets and total equity plus liabilities as of June 30, 2000 were $4.6 billion, which was $14.5 million less than the total at December 31, 1999. The decrease was due primarily to depreciation of plant and the decrease in cash and temporary cash investments, offset somewhat by an increase in the notes receivable for construction of Sewell Creek Energy Facility. Assets Property additions for the threesix months ended March 31,June 30, 2000 totaled $14.6 million$53.6 million. These additions 11 primarily forconsisted of costs related to the six combustion turbine units discussed above, purchases of nuclear fuel and for additions, replacements and improvements to existing generation facilities. The $27.6 million increase in construction work in progress was due primarily to the construction of the six combustion turbine units. The decrease in cash and temporary cash investments is a result of cash used in financing and investing activities, including property additions noted above and debt principal repayments, exceeding cash provided from operations. The increase in receivables resulted from significantly higher energy costs billed to Members at June 30, 2000 compared to the energy costs billed to Members at December 31, 1999. The increase in notes receivable resulted primarily from use of funds for interim financing activities related to the construction of the Sewell Creek Energy Facility. Prepayments and other current assets increaseddecreased primarily due to the estimated prepayments to GPC for Plant Hatch O&Mconstruction and nuclear fuel costs for AprilJuly 2000 being $3.3$3.9 million higherlower compared to the estimate for January 2000. The decrease in other deferred charges is primarily due to the 1999 refueling outage costs for Hatch Unit No. 1 being significantly higher than the refueling outage costs incurred for Hatch Unit No. 2 in spring 2000. Such costs are amortized to expense over the 18-month operating cycle of the unit. Equity and Liabilities Accounts payable decreased due to normal variations in the timing of payables activity. Notes payable represents commercial paper issued by Oglethorpe as interim financing primarily for costs incurred in the construction of Sewell Creek Energy Facility. Oglethorpe expects to be reimbursed for costs relating to the construction of Sewell Creek Energy Facility shortly after itthe last of the four units is placed into commercial operation, which Oglethorpe anticipates will beoccur in the summerfall of 2000. The balance of the outstanding commercial paper was issued as interim financing for the future generation facilities discussed above. The decrease in accrued interest resulted from the fourth quarter Federal Financing Bank interest payment being paid on January 3, 2000, whereas, the firstsecond quarter Federal Financing Bank interest payment was paid on March 31.June 30. Accrued and withheld taxes increased as a result of the normal monthly accruals for property taxes, which are generally paid in the fourth quarter of the year. The decrease in other current liabilities primarily resulted from year-end accruals for professional and legal services. 12 Forward-Looking Statements and Associated Risks This Quarterly Report on Form 10-Q contains forward-looking statements, including statements regarding, among other items, (i) anticipated trends in Oglethorpe's business and (ii) Oglethorpe's future power supply resourcescapital requirements and arrangements.sources of capital. These forward-looking statements are based largely on Oglethorpe's current expectations and are subject to a number of risks and uncertainties, certain of which are beyond Oglethorpe's control. For certain factors that could cause actual results to differ materially from those anticipated by these forward-looking statements, see "CERTAIN FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS--Miscellaneous--Competition" in Items 1 and 7 of Oglethorpe's 1999 Annual Report 11 on Form 10-K. In light of these risks and uncertainties, there can be no assurance that events anticipated by the forward-looking statements contained in this Quarterly Report will in fact transpire. Item 3. Quantitative and Qualitative Disclosures About Market Risk Commodity Price Risk Oglethorpe is exposed to electricity price risk relating to managing the supply of energy to the Members. Oglethorpe supplies substantially all of the Members' requirements from a combination of owned and leased generating plants and power purchased under long-term contracts with other power suppliers and power marketers. Therefore, only a small percentage of Oglethorpe's requirements is purchased in the short-term market, and further only a small portion of these requirements is covered by derivative commodity instruments. Oglethorpe's market price risk exposure on these instruments is not material. Oglethorpe utilizes a Risk Management Committee (RMC) to manage its risks including those related to energy trading. The RMC consists of senior executive officers including the Chief Executive Officer. The RMC has implemented risk management policies, which include trading authority limits and counterparty credit requirements for energy trading. The RMC plans to implement a comprehensive risk management policy in the third quarter of 2000. The RMC regularly reviews risk management reports and reports results to the Audit Committee of the Board of Directors. Oglethorpe has also entered into a service agreement with ACES Power Marketing (APM) under which APM acts as Oglethorpe's agent in the purchase and sale of short-term wholesale power. APM also provides related risk management services. APM is subject to Oglethorpe's risk management policies, including trading authority limits. APM is an organization owned by several generation and transmission cooperatives that provides energy trading services to rural electric cooperatives. Changes in Risk Exposure Oglethorpe's market risks have not changed materially from the market risks reported in Oglethorpe's 1999 Annual Report on Form 10-K. 1213 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Number Description 10.27 Employment Agreement, effective August 1, 2000, between Oglethorpe and Michael Price. 10.28 Employment Agreement, effective August 1, 2000, between Oglethorpe and William Clayton Robbins. 10.29 Employment Agreement, effective August 1, 2000, between Oglethorpe and Elizabeth Bush Higgins. 27.1 Financial Data Schedule (for SEC use only). (b) Reports on Form 8-K No reports on Form 8-K were filed by Oglethorpe for the quarter ended March 31,June 30, 2000. 1314 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Oglethorpe Power Corporation (An Electric Membership Corporation) Date: May 15,August 11, 2000 By: /s/ Thomas A. Smith ------------------- Thomas A. Smith President and Chief Executive Officer (Principal Executive Officer) Date: May 15,August 11, 2000 /s/ Mac F. Oglesby ------------------ Mac F. Oglesby Treasurer (Principal Financial Officer) Date: May 15,August 11, 2000 /s/ W. Clayton Robbins ---------------------- W. Clayton Robbins Senior Vice President, Finance and Administration (Principal Financial Officer) Date: May 15,August 11, 2000 /s/ Willie B. Collins --------------------- Willie B. Collins Controller and Chief Risk Officer (Chief Accounting Officer) 1415