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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

~~(Mark One)~~

x ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the quarterly period ended September 30, 2006~~

o ~~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 incorporation or organization)		58-1211925 (I.R.S. employer identification no.)
~~incorporation or organization~~		~~identification no.)~~
2100 East Exchange Place
Tucker, Georgia		~~30084~~
(Address of principal executive offices)		30084 (Zip Code)
~~Registrant’s~~ 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~~ xYes ý Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ~~“accelerated filer”~~"accelerated filer" and ~~“large~~"large accelerated ~~filer”~~filer" in Rule 12b-2 of the Exchange Act. (Check one):Large Accelerated FileroAccelerated FileroNon-Accelerated Filer xý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).~~Yes~~YesoNo xý

Indicate the number of shares outstanding of each of the ~~registrant’s~~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.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

Oglethorpe Power Corporation
Condensed Balance Sheets
~~September 30, 2006~~March 31, 2007 and December 31, ~~2005~~2006

(dollars in thousands)

2006

2005

(Unaudited)

Assets

Electric plant:

In service

$
5,796,667

$
5,804,772

Less: Accumulated provision for depreciation

(2,460,476
)
(2,377,671
)

3,336,191

3,427,101

Nuclear fuel, at amortized cost

99,058

94,159

Construction work in progress

49,763

26,721

3,485,012

3,547,981

Investments and funds:

Decommissioning fund, at market

221,842

206,364

Deposit on Rocky Mountain transactions, at cost

93,227

88,689

Bond, reserve and construction funds, at market

6,314

7,252

Investment in associated companies, at cost

40,431

38,696

Long-term investments, at market

82,980

46,265

Other, at cost

1,044

1,044

445,838

388,310

Current assets:

Cash and cash equivalents, at cost

161,952

170,734

Restricted cash and cash equivalents, at cost

—

16,156

Restricted short-term investments, at cost

49,580

222,328

Other short-term investments, at market

—

9,337

Receivables

102,203

96,486

Inventories, at average cost

131,964

94,574

Prepayments and other current assets

3,688

5,171

449,387

614,786

Deferred charges:

Premium and loss on reacquired debt, being amortized

111,983

121,431

Deferred amortization of capital leases

95,896

108,790

Deferred debt expense, being amortized

22,833

23,293

Deferred outage costs, being amortized

25,415

16,993

Other

3,772

6,491

259,899

276,998

$
4,640,136

$
4,828,075

			(dollars in thousands)
		2007			2006
			(Unaudited)
Assets
Electric plant:
	In service	$	5,774,981		$	5,769,129
	Less: Accumulated provision for depreciation		(2,525,168	)		(2,495,049	)

			3,249,813			3,274,080
	Nuclear fuel, at amortized cost		120,594			119,076
	Construction work in progress		85,895			68,145

			3,456,302			3,461,301

Investments and funds:
	Decommissioning fund, at market		239,278			233,309
	Deposit on Rocky Mountain transactions, at cost		96,371			94,772
	Bond, reserve and construction funds, at market		5,519			6,397
	Investment in associated companies, at cost		44,499			43,331
	Long-term investments, at market		107,661			118,281
	Other, at cost		1,478			1,478

			494,806			497,568

Current assets:
	Cash and cash equivalents, at cost		369,610			423,757
	Restricted cash and cash equivalents, at cost		—			18,312
	Receivables		104,022			91,360
	Inventories, at average cost		146,949			135,996
	Prepayments and other current assets		2,984			4,234

			623,565			673,659

Deferred charges:
	Premium and loss on reacquired debt, being amortized		108,557			112,147
	Deferred amortization of capital leases		94,418			95,450
	Deferred debt expense, being amortized		29,573			30,072
	Deferred outage costs, being amortized		36,984			25,782
	Deferred tax assets		96,000			—
	Other		6,284			5,766

			371,816			269,217

		$	4,946,489		$	4,901,745

The accompanying notes are an integral part of these condensed financial statements.

Oglethorpe Power Corporation
Condensed Balance Sheets
~~September 30, 2006~~March 31, 2007 and December 31, ~~2005~~2006

(dollars in thousands)

2006

2005

(Unaudited)

Equity and Liabilities

Capitalization:

Patronage capital and membership fees

$
507,778

$
479,308

Accumulated other comprehensive deficit

(31,116
)
(34,339
)

476,662

444,969

Long-term debt

2,918,221

3,048,442

Obligation under capital leases

289,127

304,897

Obligation under Rocky Mountain transactions

93,227

88,689

3,777,237

3,886,997

Current liabilities:

Long-term debt and capital leases due within one year

227,686

217,743

Accounts payable

31,246

56,516

Accrued interest

45,511

54,221

Accrued and withheld taxes

38,902

29,041

Members’ advances

—

74,471

Other current liabilities

9,483

9,293

352,828

441,285

Deferred credits and other liabilities:

Gain on sale of plant, being amortized

39,104

40,960

Net benefit of Rocky Mountain transactions, being amortized

64,503

66,892

Asset retirement obligations

280,420

267,406

Accumulated retirement costs for other obligations

56,526

56,913

Interest rate swap arrangements

30,852

34,910

Other

38,666

32,712

510,071

499,793

$
4,640,136

$
4,828,075

~~The accompanying notes are an integral part of these condensed financial statements.~~

			(dollars in thousands)
		2007			2006
			(Unaudited)
Equity and Liabilities
Capitalization:
	Patronage capital and membership fees	$	506,964		$	497,509
	Accumulated other comprehensive loss		(28,902	)		(28,988	)

			478,062			468,521
	Long-term debt		3,166,200			3,197,478
	Obligation under capital leases		278,141			283,816
	Obligation under Rocky Mountain transactions		96,371			94,772

			4,018,774			4,044,587

Current liabilities:
	Long-term debt and capital leases due within one year		236,007			234,621
	Accounts payable		25,848			31,662
	Accrued interest		42,773			54,489
	Accrued and withheld taxes		31,050			41,755
	Other current liabilities		4,426			9,167

			340,104			371,694

Deferred credits and other liabilities:
	Gain on sale of plant, being amortized		37,867			38,485
	Net benefit of Rocky Mountain transactions, being amortized		62,910			63,707
	Asset retirement obligations		253,617			249,575
	Accumulated retirement costs for other obligations		54,948			56,220
	Deferred asset retirement obligations		14,031			11,085
	Interest rate swap arrangements		28,617			29,417
	Long-term contingent tax liability		96,000			—
	Other		39,621			36,975

			587,611			485,464

		$	4,946,489		$	4,901,745

Oglethorpe Power Corporation
Condensed Statements of Revenues and Expenses (Unaudited)
For the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~

(dollars in thousands)

Three Months

Nine Months

2006

2005

2006

2005

Operating revenues:

Sales to Members

$
330,294

$
314,777

$
874,773

$
873,633

Sales to non-Members

312

7,958

1,084

24,888

Total operating revenues

330,606

322,735

875,857

898,521

Operating expenses:

Fuel

129,992

138,400

289,356

277,570

Production

64,888

62,062

189,793

188,222

Purchased power

53,381

69,879

146,907

197,877

Depreciation and amortization

36,376

38,291

120,866

114,790

Accretion

2,176

20,173

14,147

25,384

Gain on sale of emission allowances

—

(57,046
)
(39,529
)
(57,663
)
Total operating expenses

286,813

271,759

721,540

746,180

Operating margin

43,793

50,976

154,317

152,341

Other income (expense):

Investment income

6,763

8,611

29,415

25,174

Other

1,990

1,251

6,491

5,397

Total other income

8,753

9,862

35,906

30,571

Interest charges:

Interest on long-term debt and capital leases

50,137

50,892

149,924

152,127

Other interest

772

945

2,282

2,666

Allowance for debt funds used during construction

(1,042
)
(447
)
(2,272
)
(1,402
)
Amortization of debt discount and expense

3,939

3,948

11,819

11,834

Net interest charges

53,806

55,338

161,753

165,225

Net margin (deficit)

$
(1,260
)
$
5,500

$
28,470

$
17,687

				(dollars in thousands)
			Three months
			2007			2006
Operating revenues:
	Sales to Members		$	268,008		$	268,345
	Sales to non-Members			315			387

		Total operating revenues		268,323			268,732

Operating expenses:
	Fuel			81,766			67,132
	Production			63,670			61,259
	Purchased power			30,878			54,705
	Depreciation and amortization			36,366			47,720
	Accretion			4,933			3,818
	Gain on sale of emission allowances			—			(38,814	)

		Total operating expenses		217,613			195,820

	Operating margin			50,710			72,912

Other income (expense):
	Investment income			11,635			9,389
	Other			2,612			2,422

		Total other income		14,247			11,811

Interest charges:
	Interest on long-term-debt and capital leases			52,256			49,666
	Other interest			598			711
	Allowance for debt funds used during construction			(1,496	)		(600	)
	Amortization of debt discount and expense			4,144			3,940

		Net interest charges		55,502			53,717

Net margin			$	9,455		$	31,006

The accompanying notes are an integral part of these condensed financial statements.

Oglethorpe Power Corporation
Condensed Statements of Patronage Capital and Membership Fees
and Accumulated Other Comprehensive ~~Deficit~~Loss (Unaudited)
For the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~

(dollars in thousands)

Patronage

Accumulated

Capital and

Other

Membership

Comprehensive

Fees

(Deficit)

Total

Balance at December 31, 2004

$
461,655

$
(46,896
)

$
414,759

Components of comprehensive margin:

Net margin

17,687

17,687

Unrealized gain on interest rate swap arrangements

6,880

6,880

Unrealized gain on available-for-sale securities

943

943

Unrealized gain on financial gas hedges

1,792

1,792

Total comprehensive margin

27,302

Balance at September 30, 2005

$
479,342

$
(37,281
)

$
442,061

Balance at December 31, 2005

$
479,308

$
(34,339
)

$
444,969

Components of comprehensive margin:

Net margin

28,470

28,470

Unrealized gain on interest rate swap arrangements

4,799

4,799

Unrealized gain on available-for-sale securities

126

126

Unrealized loss on financial gas hedges

(1,702
)

(1,702
)
Total comprehensive margin

31,693

Balance at September 30, 2006

$
507,778

$
(31,116
)

$
476,662

		Patronage Capital and Membership Fees		Accumulated Other Comprehensive Margin (Loss)			Total
			(dollars in thousands)
Balance at December 31, 2005		$	479,308	$	(35,498	)	$	443,810

Components of comprehensive margin:
	Net margin		31,006					31,006
	Unrealized gain on interest rate swap arrangements				4,994			4,994
	Unrealized loss on available-for-sale securities				(29	)		(29	)

Total comprehensive margin								35,971


Balance at March 31, 2006		$	510,314	$	(30,533	)	$	479,781

Balance at December 31, 2006		$	497,509	$	(28,988	)	$	468,521

Components of comprehensive margin:
	Net margin		9,455					9,455
	Unrealized loss on interest rate swap arrangements				(33	)		(33	)
	Unrealized gain on available-for-sale securities				119			119

Total comprehensive margin								9,541


Balance at March 31, 2007		$	506,964	$	(28,902	)	$	478,062

The accompanying notes are an integral part of these condensed financial statements.

Oglethorpe Power Corporation
Condensed Statements of Cash Flows (Unaudited)
For the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~

(dollars in thousands)

2006

2005

Cash flows from operating activities:

Net margin

$
28,470

$
17,687

Adjustments to reconcile net margin to net cash provided by operating activities:

Depreciation and amortization, including nuclear fuel

177,089

169,320

Net accretion cost

14,147

25,384

Allowance for equity funds used during construction

(597
)
(265
)
Amortization of deferred gains associated with sales

(4,245
)
(4,245
)
Deferred outage costs

(24,777
)
(20,698
)
Other

725

689

Change in operating assets and liabilities:

Receivables

(5,039
)
(21,618
)
Inventories

(37,390
)
6,686

Prepayments and other current assets

325

262

Accounts payable

(25,270
)
10,913

Accrued interest

(8,710
)
(23,625
)
Accrued and withheld taxes

9,861

19,402

Other current liabilities

(352
)
5,620

Total adjustments

95,767

167,825

Net cash provided by operating activities

124,237

185,512

Cash flows from investing activities:

Property additions

(71,868
)
(48,870
)
Activity in bond, reserve and construction funds—Purchases

(176
)
(148
)

—Proceeds

1,178

924

Decrease in restricted cash and cash equivalents

16,156

11,781

Decrease (increase) in restricted and other short-term investments

182,218

(119,420
)
Increase in investment in associated companies

(1,987
)
(4,461
)
Activity in other long-term investments—Purchases

(299,748
)
(383,304
)

—Proceeds

263,994

405,065

(Decrease) increase in Members’ advances

(74,471
)
121,843

Activity in decommissioning fund—Purchases

(613,238
)
(539,290
)

—Proceeds

599,218

530,313

Decrease (increase) in equipment prepayments

1,128

(1,011
)
Net cash provided by (used in) investing activities

2,404

(26,578
)
Cash flows from financing activities:

Long-term debt proceeds

—

8,647

Long-term debt payments

(136,048
)
(150,753
)
Debt related costs

(1,911
)
(2,059
)
Other

2,536

2,764

Net cash used in financing activities

(135,423
)
(141,401
)
Net (decrease) increase in cash and cash equivalents

(8,782
)
17,533

Cash and cash equivalents at beginning of period

170,734

133,669

Cash and cash equivalents at end of period

$
161,952

$
151,202

Cash paid for:

Interest (net of amounts capitalized)

$
158,644

$
177,016

Income taxes

—

—

					(dollars in thousands)
				2007			2006
Cash flows from operating activities:
	Net margin			$	9,455		$	31,006

	Adjustments to reconcile net margin to net cash provided by operating activities:
		Depreciation and amortization, including nuclear fuel			55,805			64,618
		Accretion cost			4,933			3,818
		Amortization of deferred gains associated with sale-leasebacks			(1,415	)		(1,415	)
		Allowance for equity funds used during construction			(364	)		(153	)
		Deferred outage costs			(17,874	)		(14,861	)
		Other			1,502			(61	)
	Change in operating assets and liabilities:
		Receivables			(15,658	)		(7,982	)
		Inventories			(10,953	)		(15,378	)
		Prepayments and other current assets			1,597			1,857
		Accounts payable			(5,814	)		(34,292	)
		Accrued interest			(11,716	)		(45,684	)
		Accrued and withheld taxes			(10,705	)		(5,258	)
		Other current liabilities			(3,642	)		(2,123	)

			Total adjustments		(14,304	)		(56,914	)

Net cash used by operating activities					(4,849	)		(25,908	)

Cash flows from investing activities:
	Property additions				(39,573	)		(23,453	)
	Activity in decommissioning fund—Purchases				(143,596	)		(153,726	)
	—Proceeds				138,875			149,994
	Activity in bond, reserve and construction funds—Purchases				(46	)		(73	)
	—Proceeds				1,005			1,043
	Decrease in restricted cash and cash equivalents				18,312			16,156
	Decrease in other short-term investments				—			117,080
	Decrease in investment in associated organizations				175			189
	Activity in other long-term investments—Purchases				(181,123	)		(149,467	)
	—Proceeds				192,418			123,480
	Increase in Members' advances				—			(16,928	)
	Other				(1,074	)		686

Net cash (provided by) used in investing activities					(14,627	)		64,981

Cash flows from financing activities:
	Long-term debt proceeds				26,389			—
	Long-term debt payments				(61,956	)		(90,462	)
	Other				896			32

Net cash used in financing activities					(34,671	)		(90,430	)

Net decrease in cash and cash equivalents					(54,147	)		(51,357	)
Cash and cash equivalents at beginning of period					423,757			170,734

Cash and cash equivalents at end of period				$	369,610		$	119,377

Cash paid for:
	Interest (net of amounts capitalized)			$	63,074		$	95,461

The accompanying notes are an integral part of these condensed financial statements.

Oglethorpe Power Corporation
Notes to Condensed Financial Statements (Unaudited)
~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~

(A): ~~(A)~~General.The condensed financial statements included in this report have been prepared by Oglethorpe Power Corporation (Oglethorpe), 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 fairly state, in all material respects, the results for the periods ended ~~September 30, 2006~~March 31, 2007 and ~~2005.~~2006. 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~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, ~~2005,~~2006, as filed with the SEC. ~~Certain amounts for 2005 have been reclassified to conform to the current period presentation.~~ The results of operations for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 are not necessarily indicative of results to be expected for the full year. As noted in ~~Oglethorpe’s 2005~~Oglethorpe's 2006 Annual Report on Form 10-K, substantially all of ~~Oglethorpe’s~~Oglethorpe's sales are to its 38 electric distribution cooperative members (the Members) and, thus, the receivables on the accompanying balance sheets are principally from its Members. (See ~~“Notes~~"Notes to Financial ~~Statements”~~Statements" in ~~Oglethorpe’s 2005~~Oglethorpe's 2006 Annual Report on Form 10-K.)
(B)

Oglethorpe and its subsidiaries file a U.S. federal consolidated income tax return. The U.S. federal statue of limitations remains open for the year 2003 forward. State jurisdictions have statutes of limitations generally ranging from three to five years from the filing of an income tax return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states. Years still open to examination by tax authorities in major state jurisdictions include 2003 forward.

Oglethorpe adopted the provisions of FIN 48 effective January 1, ~~2007 and requires Oglethorpe to record any change in net assets that~~2007. As a result ~~from~~of the adoption of FIN 48, ~~as an adjustment~~Oglethorpe recognized a $96 million increase in the liability for unrecognized tax benefits. This change in the liability resulted in no decrease to the ~~opening~~January 1, 2007 balance of patronage ~~capital.~~

~~FIN 48~~capital as the effects were offset by recognition of deferred tax assets. Oglethorpe is ~~applicable~~carrying forward significant regular tax and alternative minimum tax (AMT) net operating losses (NOLs) and AMT NOLs. Therefore, any regular tax liability in the open years related to ~~all~~the uncertain tax position would be offset by regular NOLs. However, Oglethorpe would be liable for the portion of AMT for this period that is not allowed to be offset by the AMT NOLs. In the current open years, Oglethorpe's exposure is not material to its consolidated results of operations, cash flows, or financial position.

Oglethorpe recognizes accrued interest and penalties with uncertain tax positions accounted for under Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes”, and is not intended to be applied by analogy to other taxes, such as sales taxes, value-add taxes, or property taxes.

The scope of FIN 48 includes any position taken (or expected to be taken) on a tax return, including the decision to exclude from the return certain income or transactions. FIN 48 makes clear that its guidelines also apply to positions such as (1) excluding income streams that might be deemed taxable by taxing authorities, (2) asserting that a particular equity restructuring (e.g. a spin-off transaction) is tax-free when that position might be deemed uncertain, or (3) the decision not to file a tax return in ~~a particular jurisdiction for which such a return might be required.~~

~~FIN 48 requires that Oglethorpe make qualitative and quantitative disclosures, including discussion of reasonably possible changes that might occur~~interest expense in the ~~recognized~~condensed statements of revenues and expenses. As of March 31, 2007, Oglethorpe has recorded approximately $558,000 for interest and penalties in the accompanying balance sheet. It is expected that the amount of unrecognized tax benefits ~~over~~will change in the next twelve months; however, Oglethorpe does not expect the change to have a ~~description~~significant impact on its results of ~~open~~operations, its financial position or its effective tax ~~years~~rate.

(C): New Accounting Standards. In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities", including an amendment of SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This statement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. This statement also establishes presentation and disclosure requirements designed to facilitate comparison between entities that choose different measurement attributes for similar types of assets and liabilities. The statement provides entities with the opportunity to mitigate volatility in reported earnings caused by ~~major jurisdictions;~~measuring related assets and ~~a roll-forward~~liabilities differently without having to apply complex hedge accounting provisions. The provisions of this Statement apply only to entities that elect the fair value option however, the amendment to SFAS No. 115 applies to all ~~unrecognized tax benefits, presented as a reconciliation of the beginning~~entities with available-for-sale and ~~ending balances of the unrecognized tax benefits on a aggregated basis.~~trading securities. SFAS No. 159 is effective for Oglethorpe January 1, 2008. Oglethorpe is evaluating what impact, if any, the adoption of ~~FIN 48~~FASB No. 159 will have on ~~Oglethorpe’s~~Oglethorpe's financial position or results of operations.

~~(C)~~~~New Accounting Standard.~~ In September, 2006, the FASB issued SFAS No. 157, ~~“Fair~~"Fair Value ~~Measurements”~~Measurements" which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, the application of SFAS No. 157 may change the current practice for measuring fair value. SFAS No. 157 is effective

January 1, 2008 and Oglethorpe is evaluating the impact, if any, that the adoption of SFAS No. 157 will have on ~~Oglethorpe’s~~Oglethorpe's financial position or results of operations.

(D): ~~(D)~~Accumulated Comprehensive Deficit. The table below provides a detail of the beginning and ending balance for each classification of accumulated other comprehensive deficit along with the amount of any reclassification adjustments included in margin for each of the periods presented in the Statement of Patronage Capital and Membership Fees and Accumulated Other Comprehensive Deficit. There were no material changes in the nature, timing or amounts of expected (gain) loss reclassified to net margin from the amounts disclosed in ~~Oglethorpe’s~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, ~~2005.~~2006.

~~Oglethorpe’s~~

Oglethorpe's effective tax rate is zero; therefore, all amounts below are presented net of tax.

Accumulated Other Comprehensive Deficit

(dollars in thousands)

Interest Rate

Available-for-sale

Financial

Swap Arrangements

Securities

Gas Hedges

Total

Balance at December 31, 2004

($45,254
)

($1,506
)

($136
)

($46,896
)
Unrealized gain/(loss)

6,880

943

2,133

9,956

(Gain) loss reclassified to net margin

—

—

(341
)

(341
)

Balance at September 30, 2005

($38,374
)

($563
)

$
1,656

($37,281
)

Balance at December 31, 2005

($34,910
)

($588
)

$
1,159

($34,339
)
Unrealized gain/(loss)

4,799

252

(4,456
)

595

(Gain) loss reclassified to net margin

—

(126
)

2,754

2,628

Balance at September 30, 2006

($30,111
)

($462
)

($543
)

($31,116
)

Balance at December 31, 2005	($34,910	)	($588	)	($35,498	)

Unrealized gain/(loss)	4,994		(57	)	4,937
(Gain) loss reclassified to net margin	—		28		28

Balance at March 31, 2006	($29,916	)	($617	)	($30,533	)


Balance at December 31, 2006	($28,584	)	($404	)	($28,988	)

Unrealized gain/(loss)	(33	)	119		86
(Gain) loss reclassified to net margin	—		—		—

Balance at March 31, 2007	($28,617	)	($285	)	($28,902	)

(E): ~~(E)~~Environmental ~~matters~~Matters: Set forth below are environmental matters that could have an effect on ~~Oglethorpe’s~~Oglethorpe's financial condition or results of operations. At this time, the resolution of these matters is uncertain, and Oglethorpe has made no accruals for such contingencies and cannot reasonably estimate the possible loss or range of loss with respect to these matters.
: 1.General. As is typical for electric utilities, Oglethorpe is subject to various federal, state and local air and water quality requirements which, among other things, regulate emissions of pollutants, such as particulate matter, sulfur dioxide and nitrogen oxides into the air and discharges of other pollutants, including heat, into waters of the United States. Oglethorpe is also subject to federal, state and local waste disposal requirements that regulate the manner of transportation, storage and disposal of various types of waste.

In general, environmental requirements are becoming increasingly stringent. New requirements may substantially increase the cost of electric service by requiring changes in the design or operation of existing facilities. Failure to comply with these requirements could result in the imposition of civil and criminal penalties as well as the complete shutdown of individual generating units not in compliance. Oglethorpe cannot provide assurance that it will always be in compliance with current and future regulations.

2. Clean Air Act. In December 2002, the Sierra Club, Physicians for Social Responsibility, Georgia Forest Watch and one individual filed suit in Federal Court in Georgia against Georgia Power

Company (GPC) alleging violations of the Clean Air Act at Plant Wansley. The complaint alleges violations of opacity limits at both the coal-fired units, in which Oglethorpe is a co-owner, and other violations at several of the combined cycle units in which Oglethorpe has no ownership interest. This civil action requests injunctive and declaratory relief, civil penalties, a supplemental environmental project and ~~attorneys’~~attorneys' fees. In December 2004, the U.S. District Court for the Northern District of Georgia issued an Order holding GPC liable for certain violations of opacity limits at the coal-fired units. In March 2006, the US Court of Appeals for the Eleventh Circuit reversed the Order, remanding it back to the District Court for trial on the issues. ~~Additional~~In November 2006, additional briefs ~~have been~~were filed and oral argument was presented on the pending motions for summary ~~judgment was presented~~judgment. In January 2007, the District Court ruled in favor of GPC on ~~November 3, 2006. A ruling is expected~~all counts still pending that involved the units co-owned by Oglethorpe. The parties have now filed a

proposed consent decree on the other issue with the Court, which will resolve the case, if accepted and entered by the end of the year. While Oglethorpe believes that Plant Wansley has complied with applicable laws and regulations, resolution of this matter is uncertain at this time, as is Oglethorpe’s responsibility, if any, for a share of any penalties or other costs that might be assessed against GPC.Court.

In January 2003, the Sierra Club appealed an unsuccessful challenge to an air operating permit for the Chattahoochee combined cycle facility to the U.S. Court of Appeals for the Eleventh Circuit. Oglethorpe acquired this facility when it merged with Chattahoochee EMC in May 2003. Oglethorpe intervened in the appeal on behalf of the U.S. Environmental Protection Agency (EPA). In May 2004, the Court ruled in favor of the Sierra Club, invalidating ~~EPA’s~~EPA's denial of the petition and remanding the matter to EPA for further consideration. In November 2005, EPA issued an order denying Sierra ~~Club’s~~Club's petition to object to the Chattahoochee ~~facility’s~~facility's air operating permit. In January 2006, the Sierra Club filed an appeal of that order to the U.S. Court of Appeals for the Eleventh Circuit. Oglethorpe has again intervened in the appeal on behalf of EPA, briefing has been completed and oral argument has been ~~scheduled for~~completed and oral argument in the ~~last week~~case was held in March 2007, and a decision is expected before the end of ~~February, 2007.~~this year. Although Oglethorpe believes that the appeal will not affect facility operations pending further consideration and that favorable outcome in this matter is likely, an unfavorable ruling could temporarily affect the ability of the facility to continue operations.

In April 2007, the Sierra Club and the Coosa River Basin Initiative appealed two unsuccessful permit challenges involving operating permit renewals for Plants Scherer (co-owned by Oglethorpe Power), Bowen, Hammond and Branch to the U.S. Court of Appeals for the Eleventh Circuit. The permits were all challenged on the bases of not including compliance schedules to bring the sources into compliance with the opacity standards, not including an adequate statement of basis, and for Scherer and Bowen, not including compliance schedules to bring the sources into compliance with Prevention of Significant Deterioration requirements. Oglethorpe has filed a motion to intervene on behalf of EPA in the case. That motion has not been ruled on, and no schedule for proceedings in this case has yet been developed.

(F)

~~(F)~~Sale of SO₂ Allowances.SO2 ~~Allowances.~~ ~~For~~ During the three-month ~~and nine-month periods~~period ended ~~September 30,~~March 31, 2006, ~~and 2005,~~ Oglethorpe sold SO₂ allowances in excess of its needs to various third parties and received ~~approximately $0 and $39.5~~$38.8 million in net proceeds from these ~~sales compared to $57.0 million and $57.7 million for the same periods of 2005.~~sales. The 2006 gain on these sales is reflected in the ~~“Gain~~"Gain on sale of emission ~~allowances”~~allowances" in the accompanying Condensed Statements of Revenues and Expenses (Unaudited).

There were no sales in 2007.

(G)

~~(G)~~Ad Valorem Tax Matters.~~Subsequent Event.~~ ~~On October 12, 2006,~~ For each tax year 2003-2006, the Monroe County Board of Tax Assessors has issued its assessment of Oglethorpe's interest in Plant Scherer for an amount greater than the value determined by the Georgia Department of Revenue (DOR). Oglethorpe ~~issued $300,000,000 of First Mortgage Bonds, Series 2006 (the “Bonds”). The Bonds bear interest at 5.534 percent per year and pay interest semiannually on January 1 and July 1 of~~has appealed each ~~year, beginning on January 1, 2007. The Bonds will be subject to mandatory sinking fund redemption at a redemption price of 100%~~ of the ~~principal amount~~county's valuations by filing a notice of arbitration with the ~~Bonds being redeemed, plus accrued interest, commencing~~Monroe County Board of Tax Assessors. The arbitration for all four appeals are on ~~January 1, 2031 and on each January 1 afterwards,~~hold pending the outcome of a related case filed by GPC, which challenges the authority of Monroe County to ~~and including January 1, 2034. The Bonds~~change the values determined by the Georgia Department of Revenue. GPC obtained a ruling from the Georgia Court of Appeals that Monroe County did not have the authority to change the values determined by the Georgia Department of Revenues. However, Monroe County has filed a ~~final maturity due on January 1, 2035. The principal amount~~notice of intention to request the ~~Bonds being redeemed on each mandatory sinking fund redemption date and the principal amount payable~~Georgia Supreme Court to review that ruling. Depending on the final ~~maturity date is $60,000,000. The payment~~outcome of ~~principal of and interest on~~ the ~~Bonds when due is insured~~GPC appeal, the arbitration for Oglethorpe's four appeals will be heard by a ~~surety bond issued by Financial Guaranty Insurance Company.~~

~~On October 24, 2006,~~panel of arbitrators, with the ~~Development Authority of Burke County (Georgia) and the Development Authority of~~right to appeal first to Monroe County ~~(Georgia) (collectively,~~Superior Court and then to the “Authorities”) issued, on Oglethorpe’s behalf, $238,095,000 in aggregate principal amount of tax-exempt refunding bonds (the “Series 2006 Variable Rate Refunding Bonds”) for the purpose of refunding certain outstanding tax-exempt bonds issued by the Authorities on Oglethorpe’s behalf. Georgia ~~Transmission Corporation (An Electric Membership Corporation) assumed 100% of Oglethorpe’s obligations with respect to $40,150,000 of~~

~~the Series 2006 Variable Rate Refunding Bonds. The Series 2006 Variable Rate Refunding Bonds were issued as variable rate demand bonds and initially bear interest at a commercial paper rate. Payment~~appellate courts. None of the ~~principal of, and interest on,~~appeals have been sent to the Series 2006 Variable Rate Refunding Bonds when due is insured by Ambac Assurance Corporation, and payment of the purchase price of the Series 2006 Variable Rate Refunding Bonds that are tendered but not remarketed will be made from funds under a standby liquidity facility with arbitrators.Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank International,” New York Branch. In connection with the issuance of the Series 2006 Variable Rate Refunding Bonds, Oglethorpe issued separate promissory notes, secured under Oglethorpe’s Mortgage Indenture, that evidence Oglethorpe’s obligations to make payments that correspond to payments due under each series of the Series 2006 Variable Rate Refunding Bonds. The Series 2006 Variable Rate Refunding Bonds have bullet maturities in 2036, 2038, 2039, 2040 and 2041.

Also on October 24, 2006, the Authorities issued, on Oglethorpe’s behalf, $133,550,000 in aggregate principal amount of tax-exempt refunding bonds (the “Series 2006 Auction Rate Refunding Bonds”) for the purpose of refunding certain outstanding tax-exempt bonds issued by the Authorities on Oglethorpe’s behalf. The Series 2006 Auction Rate Refunding Bonds were issued initially as 7-day auction rate securities and have an initial interest payment date of November 2, 2006. Payment of the principal of, and interest on, the Series 2006 Auction Rate Refunding Bonds when due is insured by Ambac Assurance Corporation. In connection with the issuance of the Series 2006 Auction Rate Refunding Bonds, Oglethorpe issued separate promissory notes, secured under Oglethorpe’s Mortgage Indenture, that evidence Oglethorpe’s obligations to make payments that correspond to payments due under each series of the Series 2006 Auction Rate Refunding Bonds. The Series 2006 Auction Rate Refunding Bonds have bullet maturities in 2036 and 2037.

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

~~Results of Operations~~

For the Three Months Ended March 31, 2007 and ~~Nine Months Ended September 30,~~2006

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 transactions by Oglethorpe, and (ii) Oglethorpe's future capital requirements and sources of capital and (iii) achievement of a minimum 1.10 MFI Ratio. These forward-looking statements are based largely on Oglethorpe's current expectations and are subject to a number of risks and uncertainties, some of which are beyond Oglethorpe's control. For factors that could cause actual results to differ materially from those anticipated by these forward-looking statements, see Oglethorpe's 2006 Annual Report on Form 10-K, in particular Item 1A—Risk Factors. In light of these risks and ~~2005~~uncertainties, there can be no assurance that events anticipated by the forward-looking statements contained in this Quarterly Report will in fact transpire.

Net Margin

~~Oglethorpe’s~~Oglethorpe's net margin ~~(deficit)~~ for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 was ~~($1.3) million and $28.5~~$9.5 million compared to ~~$5.5 million and $17.7~~$31.0 million for the same ~~periods~~period of ~~2005.~~2006. The net margin variances for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 compared to the same ~~periods~~period of ~~2005~~2006 primarily ~~relates~~relate to the gain on sale of SO₂ allowances during the first quarter of 2006 as discussed in Note F to ~~Oglethorpe’s~~Oglethorpe's Condensed Financial Statements (Unaudited).

Throughout the year, Oglethorpe monitors its financial results and, with Board approval, makes budget adjustments when and as necessary to ensure that a net margin equivalent to the minimum 1.10 Margins for Interest (MFI) Ratio required under the Mortgage Indenture is achieved. ~~Oglethorpe’s~~Oglethorpe's management anticipates that the margin for the year ended December 31, ~~2006~~2007 will be approximately ~~$18~~$19 million,which will yield an MFI Ratio of ~~1.10, consistent with prior years.~~1.10. For additional information on ~~Oglethorpe’s~~Oglethorpe's margin requirement, see ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of Operations—Summary of Cooperative Operations—Rates and Regulation”" in ~~Oglethorpe’s~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, ~~2005.~~2006.

Operating Revenues

~~Oglethorpe’s~~Oglethorpe's operating revenues fluctuate from period to period based on factors including weather and other seasonal factors, load growth in the service territories of its Members, operating costs, availability of electric generation resources, ~~Oglethorpe’s~~Oglethorpe's decisions of whether to dispatch its owned or purchased resources or Member-owned resources over which it has dispatch rights and by ~~Members’~~Members' decisions of whether to purchase a portion of their hourly energy requirements from ~~Oglethorpe~~Oglethorpe's resources or from other suppliers.

Total revenues from sales to Members were ~~4.9% and 0.1% higher~~approximately the same for the three month period ended March 31, 2007 and ~~nine-month periods ended September 30, 2006, respectively, than such revenues for the same periods of 2005.~~2006. Megawatt-hour (MWh) sales to Members ~~increased 0.3%~~decreased 4.7% during the ~~current quarter of 2006 and decreased 3.3% for the nine months~~three month period ended ~~September 30, 2006~~March 31, 2007 compared to the same ~~periods~~period of ~~2005.~~2006. The average total revenue per MWh from sales to Members increased ~~4.6% and 3.6%~~4.9% for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006 compared to the same periods of 2005. For the current quarter of 2006~~March 31, 2007 compared to the same period of ~~2005, the increase in MWhs supplied to Members varied only slightly. For the nine-month period ended September 30, 2006 compared to the same period of 2005, the~~2006. The decrease in MWhs supplied by Oglethorpe to its Members was ~~partly~~primarily due to the discontinuation of its capacity and energy pool, through which Oglethorpe bought and sold short-term energy from/to non-Members for the benefit of Members participating in the pool. The capacity and energy pool was discontinued effective March 31, 2005. The termination effective March 31, 2006, of an agreement to purchase capacity and energy from Georgia Power Corporation (GPC) ~~also contributed to the~~. This decrease was primarily offset by an increase in MWhs generated and sold to Members. ~~The spreading of Oglethorpe’s fixed costs (which remain relatively unchanged except that this effect has been somewhat mitigated by the cash generated from the sale of SO~~2 ~~allowances as discussed below) over fewer MWhs sold has the effect of increasing Oglethorpe’s average cost of power.~~ For further discussion regarding purchased power costs and increase in generation, see “"Operating Expenses”" below.

The components of Member revenues for the three months ended March 31, 2007 and ~~nine months ended September 30,~~ 2006 ~~and 2005~~ were as follows (amounts in thousands except for cents per kilowatt hour):

Three Months

Nine Months

Ended September 30,

Ended September 30,

2006

2005

2006

2005

Capacity revenues

$
144,661

$
118,098

$
435,613

$
424,817

Energy revenues

185,633

196,679

439,160

448,816

Total

$
330,294

$
314,777

$
874,773

$
873,633

Kilowatt hours sold to Members

6,624,577

6,602,315

17,424,227

18,026,627

Cents per kilowatt hour

4.99¢

4.77¢

5.02¢

4.85¢

	Three Months Ended March 31,
	2007		2006
Capacity revenues	$	151,871	$	148,807
Energy revenues		116,137		119,538

Total	$	268,008	$	268,345

Kilowatt hours sold to Members		4,964,030		5,211,201
Cents per kilowatt hour		5.40¢		5.15¢

Capacity revenues for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 increased ~~22.5% and 2.5%~~2.1% compared to the same ~~periods~~period of ~~2005. The third quarter and year-to-date 2005 capacity~~2006. Capacity revenues for 2007 reflect reduced collections ~~from Members ($40.4 million)~~of approximately $1.3 million due to the termination of the GPC power purchase agreement as budgeted. ~~Year-to-date capacity~~Capacity revenues for 2006 reflect reduced collections from Members ($~~20.9~~7.0 million) as budgeted. ~~Both the~~The 2006 ~~and 2005~~ reduced revenue collections ~~relate~~are related to ~~gains~~the gain on sale of SO₂ allowances as discussed above. Energy revenues were ~~5.6% and 2.2%~~2.9% lower for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 compared to the same ~~periods~~period of ~~2005. Oglethorpe’s~~2006. Oglethorpe's average energy revenue per MWh from sales to Members was ~~5.9% lower~~2.0% higher for the current quarter ~~and 1.2% higher year-to-date 2006~~of 2007 as compared to the same ~~periods~~period of ~~2005.~~2006. The decrease in energy revenues for the current ~~quarter~~period of ~~2006~~2007 was primarily due to decreases in the pass through of lower purchased power costs ~~and lower~~offset somewhat by higher fuel costs. ~~(For~~For a discussion on purchased power costs and fuel costs see ~~“Operating Expenses”~~"Operating Expenses" below.) For the nine-month period ended September 30, 2006, as compared to the same period of 2005, an increase in fuel costs was more than offset by a decrease in the pass through of purchased power energy costs resulting partly from the discontinuation of Oglethorpe’s capacity and energy pool, effective March 31, 2005 and partly from expiration, effective March 31, 2006, of the GPC purchased power agreement.

Sales to non-Members for the three-month and nine-month periods ended September 30, 2005 consisted primarily of capacity and energy sales to Alabama Electric Cooperative under an agreement to sell 100 MW of capacity for the period June 1998 through December 2005. In addition, in the first quarter of 2005, Oglethorpe sold short-term energy to non-Members for the benefit of Members participating in its capacity and energy pool. As a result of the termination of the agreement with Alabama Electric Cooperative and the discontinuation of the capacity and energy pool, total non-Member revenues for the three-month and nine-month periods of 2006 were $312,000 and $1.1 million compared to $8.0 million and $24.9 million, respectively, for the same periods of 2005.

Operating Expenses

Operating expenses for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 (excluding the gain on the sale of SO₂ allowances of $0 and ~~$39.5~~$38.8 million for the three month period ended March 31, 2007 and ~~nine-month periods ended September 30,~~ 2006, ~~respectively, and $57.0 and $57.7 for the same periods of 2005,~~ respectively,) were ~~12.8% and 5.3%~~7.3% lower ~~for the current quarter and for the nine-month period of 2006~~ compared to the same ~~periods~~period of ~~2005.~~2006. The decrease in operating expenses for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 compared to the same ~~periods~~period of ~~2005~~2006 was primarily due to decreases in purchased power and accretion expenses. The decrease in the current quarter of 2006 was also attributable to a decrease in fuel expense. For the nine-month period of 2006 compared to the same period of 2005, the decrease in purchased power and accretiondepreciation expenses ~~were~~ offset somewhat by increases in fuel and ~~depreciation expenses.~~accretion costs.

For the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 compared to the same ~~periods~~period of ~~2005,~~2006, total fuel costs ~~decreased 6.1% and~~ increased ~~4.3%, respectively,~~21.8% while total generation increased ~~1.5% and 2.0%, respectively.~~2.5%. Average fuel costs increased 18.8% in 2007 compared to the same period of 2006. The ~~decrease~~increase in total ~~fuel costs of 6.1%~~ and ~~the decrease in~~ average fuel costs ~~of 7.5% in~~for the ~~current quarter of 2006~~three-month period ended March 31, 2007 as compared to the same quarter of ~~2005~~2006 resulted primarily from ~~significantly lower prices~~increased generation at the natural gas-fired Chattahoochee energy facility.

Total purchased power costs decreased 43.6% for ~~natural gas fuel costs. For~~ the ~~nine months~~three-month period ended ~~September 30, 2006~~March 31, 2007 compared to the same period of 2005, the increase in total fuel costs resulted from the mix in generation, with a higher percentage of generation from natural gas facilities in 2006 than in 2005. The higher natural gas generation, with its higher average fuel cost compared to coal and nuclear, yielded a 2.2% increase in average fuel cost2006. Purchased MWhs decreased 61.4% for the ~~nine-month period~~three months ended ~~September 30, 2006~~March 31, 2007 compared to the same period of ~~2005. Higher coal fuel costs also contributed to the increase in average fuel costs year-to-date 2006 compared to 2005.~~

Total purchased power costs decreased 23.6% and 25.8% for the three-month and nine-month periods ended September 30, 2006 compared to the same periods of 2005. Purchased MWhs decreased 35.0% and 41.4% for the three and nine months ended September 30, 2006, respectively, compared to the same periods of 2005.2006. The average cost per MWh of total purchased power increased ~~17.5% and 26.8%~~46.2% for the three ~~and nine~~ months ended ~~September 30, 2006, respectively,~~March 31, 2007 compared to the same ~~periods~~period of ~~2005.~~ 2006.

Purchased power costs were as follows:

Three Months

Nine Months

Ended September 30,

Ended September 30,

2006

2005

2006

2005

(dollars in thousands)

(dollars in thousands)

Capacity costs

$
10,305

$
15,086

$
35,172

$
45,120

Energy costs

43,076

54,793

111,735

152,757

Total

$
53,381

$
69,879

$
146,907

$
197,877

	Three Months Ended March 31,
	2007		2006
		(dollars in thousands)
Capacity costs	$	10,034	$	14,788
Energy costs		20,844		39,917

Total	$	30,878	$	54,705

Purchased power capacity costs decreased ~~31.7% and 22.1%~~32.2% for the three ~~and nine~~ months ended ~~September 30, 2006, respectively~~March 31, 2007 as compared to the same ~~periods~~period of ~~2005.~~2006. Purchased power energy costs for the three-month period ended March 31, 2007 were 47.8% lower compared to the same period of 2006. The decrease in purchased power capacity and energy costs for the current quarter of 2007 compared to the same quarter of 2006 resulted primarily from the termination of the GPC agreement as discussed above. Purchased power energy costs for the three-month and nine-month periods ended September 30, 2006 were 21.4% and 26.9% lower compared to the same periods of 2005. The decrease in purchased power energy costs for the current quarter of 2006 compared to the same quarter of 2005 resulted primarily from the termination of the GPC agreement. The decrease in purchased power energy costs for the nine months ended September 30, 2006 compared to the same period of 2005 resulted partly from the discontinuation of the capacity and energy pool effective March 31, 2005 and partly from the termination of the GPC agreement effective March 31, 2006. The average cost of purchased power energy for the three-month ~~and nine-month periods~~period ended ~~September 30, 2006~~March 31, 2007 was ~~20.9% and 24.9%~~35.3% higher compared to the same ~~periods~~period of ~~2005.~~2006. The termination of the GPC purchase power agreement with its favorable energy cost to Oglethorpe ~~contributed~~was the primary contributor to the increase in the average energy cost per MWh.

Accretion expense represents the change in the asset retirement obligations due to the passage of time. For nuclear decommissioning, Oglethorpe records a regulatory asset or liability for the timing difference in accretion recognized under SFAS No. 143, ~~“Accounting~~"Accounting for Asset Retirement ~~Obligations”~~Obligations", compared to the expense recovered for ratemaking purposes. The accretion expense recognized is equal to the earnings from both the decommissioning trust fund and the internal decommissioning fund. The earnings in ~~2006 have been~~2007 were $852,000 higher than in ~~2005. Additionally, in 2005~~ the ~~Board~~same period of ~~Directors approved the acceleration of the amortization of $16.6 million of deferred asset retirement costs.~~2006.

Depreciation and amortization expense ~~increased 5.3%~~decreased 23.8% (or $11.4 million) for the ~~nine-month~~three-month period ended ~~September 30, 2006~~March 31, 2007 compared to the same period of ~~2005~~2006. Depreciation and amortization expenses in 2006 were higher primarily as a result of ~~accelerated~~Oglethorpe's decision to accelerate amortization of deferred amortization of capital ~~leases.~~leases during that period.

Other Income

Investment income ~~decreased 21.5% and~~ increased ~~16.9%~~23.9% (or ~~($1.8) million and $4.2 million, respectively)~~$2.2 million) in the current three-month ~~and nine-month periods~~period in 2007 compared to the same ~~periods~~period of ~~2005.~~2006. The ~~decrease~~increase in the ~~third~~first quarter of ~~2006~~2007 compared to the same quarter of ~~2005~~2006 resulted partly from ~~a decrease~~an increase in earnings from ~~Oglethorpe’s~~Oglethorpe's decommissioning trust fund established in accordance with the regulations of the Nuclear Regulatory Commission (NRC) and partly due to lower earnings from funds deposited in the RUS Cushion of Credit Account resulting from lower average investment balances. The increase in investment income for the nine-month period ended September 30, 2006 compared to the same period of 2005 was due to higher earnings from Oglethorpe’s decommissioning trust fund, higher interest earnings on cash and cash equivalent investments principally as a result of higher ~~returns on these investments and from higher earnings on long-term investments due primarily to higher~~ average balances on these investments. ~~These increases were~~The higher investment balances resulted primarily from cash generated due to issuance of additional debt as discussed in interest charges below. This increase was offset somewhat by ~~lower~~the elimination of earnings from funds deposited in the ~~RUS~~Rural Utilities Service ("RUS") Cushion of Credit ~~Account resulting from lower average investment balance. As~~Account. These funds were utilized to pay debt service and as of September 30, 2006 there ~~are~~were no remaining ~~Members advances with Oglethorpe~~deposits invested in the ~~RUS Cushion of Credit Account,~~account; therefore, there will not be any additional income relative to these investments in subsequent periods.

Interest Charges

Interest on long-term debt and capital leases increased by 5.2% (or $2.6 million) in the three months ended March 31, 2007 compared to the same period of 2006. This increase resulted primarily from the issuance of $300 million in first mortgage bonds in October 2006; the proceeds are being used to fund installation of environmental controls facilities at Plant Scherer, one of Oglethorpe's coal-fired generating plants, and for general corporate purposes.

Balance Sheet Analysis as of ~~September 30, 2006~~March 31, 2007

General

Assets

Property additions for the ~~nine~~three months ended ~~September 30, 2006~~March 31, 2007 totaled ~~$71.9~~$39.6 million. Included in this total were expenditures of approximately $9 million ~~primarily~~ for ~~purchases of~~ nuclear fuel and approximately $9 million for environmental control projects. The remaining expenditures were primarily for normal additions ~~replacements,~~ and ~~improvements~~replacements to existing generation facilities. ~~Conversely, approximately $24.4 million of fully depreciated assets were retired during the period.~~

Construction work in progress increased by ~~$23.0~~$17.8 million in the ~~nine~~three months ended ~~September 30, 2006,~~March 31, 2007, primarily due to costs incurred for various replacement and improvement projects at existing generation facilities.

Long-term investments increased by $36.7 million in the nine months ended September 30, 2006, from $46.3 million to $83.0 million. The increase in long-term investments was largely due to the investment of $33.0 million in long-term securities. This investment, which relates to nuclear decommissioning funds held internally, was previously invested on a shorter term basis and included in cash and cash equivalents. Based on timing projections for the use of these funds, management decided to invest these funds in longer-term investments which should over time yield higher returns.

Cash and cash equivalents ~~and restricted short-term investments~~ decreased ~~$8.8~~$54.1 million ~~and $172.7 million, respectively,~~ principally due to the timing of certain debt and interest payments, payments to GPC, property tax payments and property additions. ~~The $39.5 million proceeds from the sale of SO~~2 ~~allowances (as discussed in Note F) essentially offset the $33.0 million transfer of funds into certain long-term investments.~~

Restricted cash and cash equivalents at December 31, ~~2005~~2006 represent a portion of the proceeds obtained from the refinancing of certain indebtedness associated with pollution control bonds (PCBs) in ~~November 2005. The~~October 2006. These proceeds, which were on deposit with a trustee, were subsequently used in the first quarter of ~~2006~~2007 to pay principal related to the refinanced PCB debt that matured in January ~~2006.~~2007.

AtThe December 31, ~~2005, other short-term investments consisted~~2006 receivables balance included approximately $10.1 million of ~~U.S. Treasury Notes.~~credits available to the Members for a Board approved reduction to 2006 revenue requirements. These ~~notes matured~~credits were realized by the Members during the ~~third~~first quarter of ~~2006.~~2007. This was the primary cause of the $12.7 million increase in receivables.

Inventories, which include fossil fuel and spare parts inventories, increased by $37.4 million or 39.5%. Coal fuel inventories increased by 278.6%, or $34.1 million. The increase is attributable to the build up of coal inventory during planned maintenance outages at Plant Wansley and Plant Scherer, reduction of generation at Plant Scherer during off peak hours in the months of April through May 2006, and improved performance of rail transportation suppliers (i.e., reduced time in delivering coal from the mines to the plants). As noted in “Fuel Supply” in Item 2 of Oglethorpe’s 2005 Annual Report on Form 10-K, coal inventory at Plant Scherer was lower than normal at year end due to rail transportation bottlenecksPrepayments and other ~~issues. Management expects inventory levels to be maintained at or near~~ current ~~levels throughout the remainder of 2006.~~

~~Deferred amortization of capital leases~~assets decreased ~~$12.9 million~~by 29.5% primarily due to ~~accelerating~~ the amortization of ~~the regulatory asset associated with Plant Scherer Unit No. 2 (approximately $11.0 million).~~prepaid insurance balances.

Deferred outage costs increased ~~$8.4~~$11.2 million (net of amortization), or ~~49.6%~~43.4%, largely as a result of the deferral of approximately ~~$9.6~~$8.8 million of refueling outage costs incurred at Plant Hatch Unit No. 12 and ~~$7.0~~$7.2 million at Plant Vogtle Unit No. 12 during ~~2006.~~the first quarter of 2007. In addition, ~~during 2005 Oglethorpe received approval from the RUS to defer~~approximately $1.9 million was deferred for scheduled major ~~scheduled~~ maintenance costs ~~at the coal units. As of September 30, 2006, approximately $8.0 million of coal unit outage costs incurred~~ at Plant Wansley Unit No. ~~2 and Plant Scherer Unit No. 1 were deferred in 2006.~~1. Deferred outage costs are amortized over the ~~plant’s~~plant's operating cycle.

~~Equity and Liabilities~~

The $3.2 million decrease in other accumulated comprehensive deficit was due to a $4.8 million decrease in the unrealized loss associated with the interest rate swap arrangements. The decrease in the loss related to the interest rate swaps was primarilyAs a result of ~~rising interest rates. Partially offsetting was~~the adoption of FIN 48, Oglethorpe has reversed the valuation allowance of a ~~$1.7~~$96 million ~~decrease in~~deferred tax asset. For further discussion regarding the ~~unrealized gain associated with the natural gas hedges.~~deferred tax asset see Note (B) of Notes to Condensed Financial Statements.

Equity and Liabilities

Accounts payable decreased ~~44.7%~~18.4%, or ~~$25.3~~$5.8 million, primarily as a result of a ~~$12.1~~$3.0 million decrease in the ~~payable~~purchase of natural gas in March 2007 as compared to ~~GPC for operation and maintenance costs. The payable~~December 2006. This decrease was due to ~~GPC largely represents true-up amounts for prior months’ expenditures and varies to~~decreased generation at the ~~extent that actual expenditures are different from estimated amounts provided by GPC.~~natural gas fired plants. In addition, ~~$7.2~~$1.0 million of the decrease ~~can be~~is attributed to ~~the expiration of~~ a ~~purchased power contract with GPC. As a result of a decrease~~reduction in ~~the cost of natural gas, payables for natural gas also decreased by $4.0 million.~~off system purchases.

The decrease in accrued interest was largely due to the timing of a principal and interest ~~payments for certain capital lease obligations. The December 31, 2005 accrued interest balance included an amount~~payment for the Plant Scherer Unit No. 2 capital lease obligation. The December 31, 2006 accrued interest balance included an amount for the lease that was due on January ~~3, 2006.~~2, 2007. These payments are made on a semi-annual basis, and the balance at ~~September 30, 2006~~March 31, 2007 includes three months of accrued interest.

Members’ advances represent amounts received from the Members for prepayment of their monthly power bills. At September 30, 2006 all prepayment amounts had been applied to the Members’ power bills.

The decrease in the interest rate swap arrangements liability was primarily due to rising interest rates since December 31, 2005. Oglethorpe recorded an unrealized loss related to these swap arrangements of $30.1Accrued and withheld taxes decreased $10.7 million ~~at September 30, 2006, which represents the estimated payment Oglethorpe would make if the swap arrangements were terminated.~~

The $6.0 million increase in other long-term credits was primarily due to a $2.5 million increase in funding for future overhauls and $2.3 million recorded for deferred Asset Retirement Obligations (ARO) credits. Oglethorpe receives payments from its Members to fund future overhauls of the combustion turbine plants. The costs associated with the major overhaul will be expensed as incurred and revenue recognized as the expenses are recorded. The $2.3 million deferred ARO credit was recorded primarily as a result of apayments made related to 2006 property taxes, which were paid when due. The decrease was net of monthly accruals for 2007 property taxes.

1615

~~$2.5~~Other current liabilities decreased by $4.7 million or 51.7%. The decrease was due in large part to a $2.1 million decrease in accrued payroll charges as a result of the payment of 2006 performance-based payroll charges. In addition, miscellaneous accounts payable accruals decreased by $1.3 million, and the liability associated with the unrealized loss for natural gas hedges decreased by $1.1 million. These hedges were in a net gain position at March 31, 2007, and a corresponding asset was recorded.

As a result of a $1.9 million increase in the unrealized gain associated with the nuclear decommissioning fund and an additional ~~$1.1 million~~$891,000 of accretion expense recorded as a result of decommissioning fund earnings, ~~(a $1.9 million~~ deferred ~~asset existed at December 31, 2005).~~ARO credits increased by $2.9 million. For further discussion regarding accretion expense see ~~“Operating Expenses”~~"Operating Expenses" above.

As a result of the adoption of FIN 48, Oglethorpe has recorded a $96 million long-term contingent tax liability. For further discussion regarding the long-term contingent tax liability see Note (B) of Notes to Condensed Financial Statements.

Financial Condition

Capital Requirements and Liquidity and Sources of Capital

Environmental Matters

~~Oglethorpe’s~~Oglethorpe's future capital expenditures depend in part on future environmental regulations, including future implementation of existing laws and regulations and how Oglethorpe and the other co-owners of coal-fired Plants Scherer and Wansley choose to comply with these regulations, once finalized. See ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—Capital Requirements”" in ~~Oglethorpe’s~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, ~~2005.~~2006.

Liquidity

As of ~~September 30, 2006,~~March 31, 2007, Oglethorpe had ~~$562~~$770 million of unrestricted available liquidity to meet short-term cash needs and liquidity requirements. This liquidity consisted of (i) approximately ~~$162~~$370 million in cash and cash equivalents, and (ii) $400 million available under three committed working capital line of credit facilities (see discussion below).

Oglethorpe also had ~~$29~~$48 million invested in auction rate securities at ~~September 30, 2006.~~March 31, 2007. These securities have maturities in excess of one year and as such are classified as long-term investments. However, most of these securities re-price in auctions that occur every 35 days or less, and Oglethorpe ~~has the option of liquidating~~could seek to liquidate these securities at the end of any auction period.

Oglethorpe has in place a $300 million committed working capital line of credit ~~that supports~~supporting its commercial paper ~~program. This facility~~program that matures in September 2007. Oglethorpe has plans to renew this facility prior to its expiration date, and may increase the size of the facility by $100 million or more. Oglethorpe also has in place two $50 million committed lines of credit, one with National Rural Utilities Cooperative Finance Corporation ("CFC") that matures in October 2008, and one with CoBank, ACB that matures in November 2008. Oglethorpe expects to renew the CFC and CoBank credit facilities, as needed, prior to their respective expiration dates. There are currently no amounts outstanding under any of these three facilities.

Planned Financings

Oglethorpe has embarked on a program to refinance or otherwise reamortize a portion of its FFB and PCB debt to extend the maturities of this debt in connection with the extension, in 2005, of its Member wholesale power contracts from 2025 to 2050. This program will include a fall 2007 refinancing of approximately $182 million of PCB debt, including $22 million scheduled to mature on January 1, 2008,

$122 million scheduled to mature on January 1, 2018 and $38 million scheduled to mature on January 1, 2024. The maturities on the $182 million of PCB refunding debt are expected to be placed in the approximate time frame of 2036 to 2041, and the debt will be secured under Oglethorpe's Mortgage Indenture.

Also in connection with this program, in mid-2007 Oglethorpe expects to ~~renew~~extend the maturities on approximately $430 million of existing FFB debt advances under a new option being provided by RUS which allows for a one-time extension of FFB debt while maintaining the current interest rate on the debt. When completed, Oglethorpe will achieve maturity extensions of between 13 and 20 years on these ~~credit facilities, as needed, prior to their respective expiration dates.~~FFB advances in connection with this transaction.

~~In addition to unrestricted available liquidity, Oglethorpe had $50 million in restricted short-term investments at September 30, 2006 relating to funds on deposit in a RUS Cushion of Credit Account.~~ For ~~further~~more detailed information on the ~~RUS Cushion~~transactions described above, as well as additional information on other planned financings of ~~Credit Account,~~Oglethorpe (including loan applications that are pending with the RUS), see ~~“Management’s~~"Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—~~Liquidity and Sources of Capital~~Financing Activities—~~Liquidity~~”" in ~~Oglethorpe’s~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, 2005. On October 2, 2006, the full amount on deposit was applied against quarterly RUS and FFB debt service due, leaving a zero balance in the account. Oglethorpe does not anticipate making any additional deposits into the Cushion of Credit Account in the near future.

~~Planned Financings~~2006.

In September 2006, the RUS approved $78 million of a pending $440 million loan application that was submitted to fund capital expenditures incurred or expected to be incurred in years 2004 through 2009 relating to compliance with certain environmental regulations. Oglethorpe expects that RUS will act on the balance of this loan application in 2007. This loan will be funded through the FFB and guaranteed by the RUS, and the debt will be secured under Oglethorpe’s Mortgage Indenture.

Oglethorpe submitted a $98 million loan application to RUS in October 2006 to fund certain general capital expenditures incurred or expected to be incurred in years 2006 through 2009 at its existing generation facilities. Oglethorpe does not expect RUS to act on this loan application until 2008 at the earliest. If approved, this loan would be funded through FFB and guaranteed by the RUS, and the debt would be secured under Oglethorpe’s Mortgage Indenture.

~~As more fully discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition—~~Critical Accounting Policy~~Financing Activities~~”

Oglethorpe's critical accounting policy have not changed from the policy reported in ~~Oglethorpe’s~~Oglethorpe's 2006 Annual Report on Form 10-K except for the ~~year ended December 31, 2005, Oglethorpe is evaluating various options to extend the maturities of a portion of its FFB and PCB debt~~estimate recorded in ~~connection~~conjunction with the ~~extension~~adoption of its wholesale power contracts from 2025 to 2050. In July 2006, Oglethorpe submitted to RUS a request for consideration that would allow it to extend the final maturity on approximately $850 million of existing FFB debt. Due to program limitations, it now appears that somewhere in the range of $450 to $600 million may ultimately be approved for extension. If approved, approximately 20 years will be added to the life of the FFB debt extended while keeping the interest rate unchanged.

In October 2006, Oglethorpe refinanced $372 million of existing tax-exempt PCB debt in two separate transactions, and issued $300 million of new taxable debt in a third transaction. The two tax-exempt refinancings were for the purpose of extending maturities of PCB debt, and the taxable debt issuance was for the purpose of financing capital improvements at Oglethorpe’s generating facilities and for other general purposes. A substantial portion of the proceeds of the taxable debt issuance are expected to be used to finance certain additional environmental control facilities at Plant Scherer Unit No. 2. For additional information on these three financing transactions, seeFIN 48. See Note GB of Notes to Condensed Financial Statements ~~herein.~~for further discussion.

New Accounting Interpretation and ~~Standard~~Standards

For discussion of FIN 48 and SFAS No. 159 and 157 see ~~Note~~Notes B and Note C of Notes to Condensed Financial ~~Statements, respectively.~~Statements.

~~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 transactions by Oglethorpe, and (ii) Oglethorpe’s future capital requirements and sources of capital and (iii) achievement of a minimum 1.10 MFI Ratio. These forward-looking statements are based largely on Oglethorpe’s current expectations and are subject to a number of risks and uncertainties, some of which are beyond Oglethorpe’s control. For factors that could cause actual results to differ materially from those anticipated by these forward-looking statements, see Oglethorpe’s 2005 Annual Report on Form 10-K, in particular Item 1A-Risk Factors. 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

~~Oglethorpe’s~~Oglethorpe's market risks have not changed materially from the risks reported in ~~Oglethorpe’s 2005~~Oglethorpe's 2006 Annual Report on Form ~~10-K and June 30, 2006 Quarterly Report on Form 10-Q.~~10-K.

Item 4. Controls and Procedures

As of ~~September 30, 2006,~~March 31, 2007, Oglethorpe had carried out an evaluation, under the supervision and with the participation of its management, including its President and Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on this evaluation, the President and Chief Executive Officer and the Chief Financial Officer concluded that ~~Oglethorpe’s~~Oglethorpe's disclosure controls and procedures are effective.

There have been no changes in ~~Oglethorpe’s~~Oglethorpe's internal control over financial reporting or other factors that occurred during the quarter ended ~~September 30, 2006~~March 31, 2007 that have materially affected, or are reasonably likely to materially affect, ~~Oglethorpe’s~~Oglethorpe's internal control over financial reporting.

1917

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Environmental Matters

For information about legal and regulatory proceedings regarding environmental matters that could have an effect on Oglethorpe, see Note ED to Notes to Condensed Financial Statements (Unaudited).

Item 1A. Risk Factors

There have not been any material changes in ~~Oglethorpe’s~~Oglethorpe's risk factors from those disclosed in Item 1A of ~~Oglethorpe’s~~Oglethorpe's Annual Report on Form 10-K for the year ended December 31, ~~2005.~~2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not Applicable.

Item 3. Defaults upon Senior Securities

Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not Applicable.

Item 5. Other Information

Oglethorpe is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Recent changes in securities laws and regulations impose new requirements on SEC filers. Oglethorpe is evaluating these requirements and the related cost of compliance. Preliminary indications are that it may not be cost-justified for Oglethorpe to continue as a voluntary SEC filer. Oglethorpe will monitor changes in these requirements and will continue to evaluate the cost-justification of complying with these requirements.None.

Item 6. Exhibits

Number		Description
31.1		Rule 13a-14(a)/15d-14(a) Certification, by Thomas A. Smith (Principal Executive Officer).
31.2		Rule 13a-14(a)/15d-14(a) Certification, by Elizabeth B. Higgins (Principal Financial Officer).
32.1		Certification Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Thomas A. Smith (Principal Executive Officer).
32.2		Certification Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Elizabeth B. Higgins (Principal Financial Officer).

~~SIGNATURES~~

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: ~~November 13, 2006~~ May 14, 2007	~~By:~~	By:	/s/ Thomas A. Smith
		Thomas A. Smith
		President and Chief Executive Officer
Date: ~~November 13, 2006~~ May 14, 2007			/s/ Mark Chesla
		Mark Chesla
		Vice President, Controller (Chief Accounting Officer)

						Page No.
PART I — FINANCIAL INFORMATION
	Item 1.		Financial Statements
			Condensed Balance Sheets as of ~~September 30, 2006~~March 31, 2007 (Unaudited) ~~(Unaudited)~~ and December 31, ~~2005~~ 2006	3
			Condensed Statements of Revenues and Expenses (Unaudited) for the Three Months ended March 31, 2007 and ~~Nine Months ended~~ ~~September 30,~~ 2006 ~~and 2005~~	5
			Condensed Statements of Patronage Capital and Membership Fees and Accumulated Other Comprehensive Deficit (Unaudited) for the ~~Nine~~Three Months ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~	6
			Condensed Statements of Cash Flows (Unaudited) For the ~~Nine~~Three Months ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~	7
			Notes to Condensed Financial Statements (Unaudited) For the ~~Nine~~Three Months ended ~~September 30,~~March 31, 2007 and 2006 ~~and 2005~~	8
	Item 2.		~~Management’s~~ Management's Discussion and Analysis of Financial Condition and Results of Operations	12
	Item 3.		Quantitative and Qualitative Disclosures About Market Risk	19	17
	Item 4.		Controls and Procedures	19	17
PART II — OTHER INFORMATION
	Item 1.		Legal Proceedings	20	18
	Item 1A.		Risk Factors	20	18
	Item 5.2.		~~Other Information~~ Unregistered Sales of equity Securities and Use of Proceeds	20	18
	Item 6.3.		~~Exhibits~~ Defaults upon Senior Securities	20	18
~~SIGNATURES~~	Item 4.	21	Submission of Matters to a Vote of Security Holders	18
	Item 5.		Other Information	18
	Item 6.		Exhibits	18
SIGNATURES				19

	(dollars in thousands)
	2006			2005
	(Unaudited)
Assets
Electric plant:
In service	$	5,796,667		$	5,804,772
Less: Accumulated provision for depreciation	(2,460,476		)	(2,377,671		)
	3,336,191			3,427,101
Nuclear fuel, at amortized cost	99,058			94,159
Construction work in progress	49,763			26,721
	3,485,012			3,547,981
Investments and funds:
Decommissioning fund, at market	221,842			206,364
Deposit on Rocky Mountain transactions, at cost	93,227			88,689
Bond, reserve and construction funds, at market	6,314			7,252
Investment in associated companies, at cost	40,431			38,696
Long-term investments, at market	82,980			46,265
Other, at cost	1,044			1,044
	445,838			388,310
Current assets:
Cash and cash equivalents, at cost	161,952			170,734
Restricted cash and cash equivalents, at cost	—			16,156
Restricted short-term investments, at cost	49,580			222,328
Other short-term investments, at market	—			9,337
Receivables	102,203			96,486
Inventories, at average cost	131,964			94,574
Prepayments and other current assets	3,688			5,171
	449,387			614,786
Deferred charges:
Premium and loss on reacquired debt, being amortized	111,983			121,431
Deferred amortization of capital leases	95,896			108,790
Deferred debt expense, being amortized	22,833			23,293
Deferred outage costs, being amortized	25,415			16,993
Other	3,772			6,491
	259,899			276,998
	$	4,640,136		$	4,828,075

	(dollars in thousands)
	Three Months						Nine Months
	2006			2005			2006			2005
Operating revenues:
Sales to Members	$	330,294		$	314,777		$	874,773		$	873,633
Sales to non-Members	312			7,958			1,084			24,888
Total operating revenues	330,606			322,735			875,857			898,521
Operating expenses:
Fuel	129,992			138,400			289,356			277,570
Production	64,888			62,062			189,793			188,222
Purchased power	53,381			69,879			146,907			197,877
Depreciation and amortization	36,376			38,291			120,866			114,790
Accretion	2,176			20,173			14,147			25,384
Gain on sale of emission allowances	—			(57,046		)	(39,529		)	(57,663		)
Total operating expenses	286,813			271,759			721,540			746,180
Operating margin	43,793			50,976			154,317			152,341
Other income (expense):
Investment income	6,763			8,611			29,415			25,174
Other	1,990			1,251			6,491			5,397
Total other income	8,753			9,862			35,906			30,571
Interest charges:
Interest on long-term debt and capital leases	50,137			50,892			149,924			152,127
Other interest	772			945			2,282			2,666
Allowance for debt funds used during construction	(1,042		)	(447		)	(2,272		)	(1,402		)
Amortization of debt discount and expense	3,939			3,948			11,819			11,834
Net interest charges	53,806			55,338			161,753			165,225
Net margin (deficit)	$	(1,260	)	$	5,500		$	28,470		$	17,687

	(dollars in thousands)
	Patronage			Accumulated
	Capital and			Other
	Membership			Comprehensive
	Fees			(Deficit)				Total
Balance at December 31, 2004		$	461,655		$	(46,896	)	$	414,759
Components of comprehensive margin:
Net margin		17,687						17,687
Unrealized gain on interest rate swap arrangements					6,880			6,880
Unrealized gain on available-for-sale securities					943			943
Unrealized gain on financial gas hedges					1,792			1,792
Total comprehensive margin								27,302

Balance at September 30, 2005		$	479,342		$	(37,281	)	$	442,061
Balance at December 31, 2005		$	479,308		$	(34,339	)	$	444,969
Components of comprehensive margin:
Net margin		28,470						28,470
Unrealized gain on interest rate swap arrangements					4,799			4,799
Unrealized gain on available-for-sale securities					126			126
Unrealized loss on financial gas hedges					(1,702		)	(1,702		)
Total comprehensive margin								31,693

Balance at September 30, 2006		$	507,778		$	(31,116	)	$	476,662

	Accumulated Other Comprehensive Deficit
	(dollars in thousands)
	Interest Rate			Available-for-sale			Financial
	Swap Arrangements			Securities			Gas Hedges				Total
Balance at December 31, 2004		($45,254	)		($1,506	)		($136		)	($46,896	)
Unrealized gain/(loss)		6,880			943			2,133			9,956
(Gain) loss reclassified to net margin		—			—			(341		)	(341	)

Balance at September 30, 2005		($38,374	)		($563	)		$	1,656		($37,281	)

Balance at December 31, 2005		($34,910	)		($588	)		$	1,159		($34,339	)
Unrealized gain/(loss)		4,799			252			(4,456		)	595
(Gain) loss reclassified to net margin		—			(126	)		2,754			2,628

Balance at September 30, 2006		($30,111	)		($462	)		($543		)	($31,116	)

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2006		2005		2006		2005
	(dollars in thousands)				(dollars in thousands)
Capacity costs	$	10,305	$	15,086	$	35,172	$	45,120
Energy costs	43,076		54,793		111,735		152,757
Total	$	53,381	$	69,879	$	146,907	$	197,877

Accumulated Other Comprehensive Deficit

(dollars in thousands)

Interest Rate
Swap Arrangements

Available-for-sale
Securities