Quarterly Report for Quarter Ending June 30, 2024 (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2024

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 number 000-50039

OLD DOMINION ELECTRIC COOPERATIVE

(Exact name of registrant as specified in its charter)

Virginia		23-7048405
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

4201 Dominion Boulevard, Glen Allen, Virginia		23060
(Address of principal executive offices)		(Zip code)

(804) 747-0592

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: NONE

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 ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☐
Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

Securities registered pursuant to Section 12(b) of the Act: NONE

The Registrant is a membership corporation and has noauthorized or outstanding equity securities.

GLOSSARY OF TERMS

The following abbreviations or acronyms used in this Form 10-Q are defined below:

Abbreviation or Acronym		Definition
ACES		Alliance for Cooperative Energy Services Power Marketing, LLC
Clover		Clover Power Station
EPA		Environmental Protection Agency
FERC		Federal Energy Regulatory Commission
GAAP		Accounting principles generally accepted in the United States
Louisa		Louisa Power Station
Marsh Run		Marsh Run Power Station
MMBTU		One Million British Thermal Units
Moody's		Moody's Investors Service
MWh		Megawatt hour(s)
North Anna		North Anna Nuclear Power Station
NYMEX		New York Mercantile Exchange
ODEC, We, Our, Us		Old Dominion Electric Cooperative
PJM		PJM Interconnection, LLC
S&P		Standard & Poor's Financial Services LLC
TEC		TEC Trading, Inc.
Wildcat Point		Wildcat Point Generation Facility
XBRL		Extensible Business Reporting Language

OLD DOMINION ELECTRIC COOPERATIVE

INDEX

		Page Number
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - June 30, 2024 (unaudited) and December 31, 2023		4
Condensed Consolidated Statements of Revenues, Expenses, and Patronage Capital (unaudited) - Three and Six Months Ended June 30, 2024 and 2023		5
Condensed Consolidated Statements of Cash Flows (unaudited) - Six Months Ended June 30, 2024 and 2023		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3. Quantitative and Qualitative Disclosures About Market Risk		23
Item 4. Controls and Procedures		23
PART II. Other Information		24
Item 1. Legal Proceedings		24
Item 1A. Risk Factors		24
Item 5. Other Information		24
Item 6. Exhibits		25

OLD DOMINION ELECTRIC COOPERATIVE

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30, 2024			December 31, 2023
		(in thousands)
		(unaudited)
ASSETS:
Electric Plant:
Property, plant, and equipment		$	2,578,112			$	2,566,211
Less accumulated depreciation			(1,205,363	)			(1,173,293	)
Net Property, plant, and equipment			1,372,749				1,392,918
Nuclear fuel, at amortized cost			19,353				16,340
Construction work in progress			79,526				80,088
Net Electric Plant			1,471,628				1,489,346
Investments:
Nuclear decommissioning trust			279,916				260,607
Unrestricted investments and other			2,280				2,314
Total Investments			282,196				262,921
Current Assets:
Cash and cash equivalents			23,769				31,284
Accounts receivable			3,728				3,371
Accounts receivable-members			110,609				108,160
Fuel, materials, and supplies			142,670				135,445
Prepayments and other			28,248				22,714
Total Current Assets			309,024				300,974
Deferred Charges and Other Assets:
Regulatory assets			60,344				94,274
Other assets			72,416				84,835
Total Deferred Charges and Other Assets			132,760				179,109
Total Assets		$	2,195,608			$	2,232,350
CAPITALIZATION AND LIABILITIES:
Capitalization:
Patronage capital		$	494,787			$	488,635
Non-controlling interest			6,680				6,586
Total Patronage capital and Non-controlling interest			501,467				495,221
Long-term debt			923,740				923,545
Revolving credit facility			100,000				191,000
Total Long-term debt and Revolving credit facility			1,023,740				1,114,545
Total Capitalization			1,525,207				1,609,766
Current Liabilities:
Long-term debt due within one year			49,041				49,041
Accounts payable			67,274				75,106
Accounts payable-members			81,910				44,540
Accrued expenses			7,230				6,321
Deferred energy			54,065				30,702
Total Current Liabilities			259,520				205,710
Deferred Credits and Other Liabilities:
Asset retirement obligations			199,891				196,747
Regulatory liabilities			158,123				142,101
Other liabilities			52,867				78,026
Total Deferred Credits and Other Liabilities			410,881				416,874
Total Capitalization and Liabilities		$	2,195,608			$	2,232,350

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

OLD DOMINION ELECTRIC COOPERATIVE

CONDENSED CONSOLIDATED STATEMENTS OF REVENUES,

EXPENSES, AND PATRONAGE CAPITAL (UNAUDITED)

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Operating Revenues		$	262,611			$	254,140			$	534,095			$	530,053
Operating Expenses:
Fuel			42,043				35,005				99,609				100,833
Purchased power			56,746				46,029				165,258				157,270
Transmission			49,189				42,519				99,052				84,588
Deferred energy			36,287				58,418				23,363				47,692
Operations and maintenance			29,332				22,829				47,295				41,487
Administrative and general			12,308				10,425				24,572				21,242
Depreciation and amortization			17,519				17,402				35,016				34,665
Amortization of regulatory asset/(liability), net			11,543				781				11,555				487
Accretion of asset retirement obligations			1,572				1,519				3,143				3,037
Taxes, other than income taxes			2,203				2,335				4,621				4,593
Total Operating Expenses			258,742				237,262				513,484				495,894
Operating Margin			3,869				16,878				20,611				34,159
Other income (expense), net			(57	)			(152	)			(1	)			(207	)
Investment income			13,439				2,515				15,313				3,907
Interest charges, net			(14,225	)			(15,940	)			(29,643	)			(31,208	)
Income taxes			(17	)			(14	)			(33	)			(79	)
Net Margin including Non-controlling interest			3,009				3,287				6,247				6,572
Non-controlling interest			(47	)			(40	)			(95	)			(197	)
Net Margin attributable to ODEC			2,962				3,247				6,152				6,375
Patronage Capital - Beginning of Period			491,825				479,210				488,635				476,082
Patronage Capital - End of Period		$	494,787			$	482,457			$	494,787			$	482,457

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

OLD DOMINION ELECTRIC COOPERATIVE

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

		Six Months Ended June 30,
		2024			2023
		(in thousands)
Operating Activities:
Net Margin including Non-controlling interest		$	6,247			$	6,572
Adjustments to reconcile net margin to net cash provided by operating activities:
Depreciation and amortization			35,016				34,665
Other non-cash charges			8,443				8,748
Change in current assets			(15,565	)			(16,828	)
Change in deferred energy			23,363				47,692
Change in current liabilities			38,838				(101,679	)
Change in regulatory assets and liabilities			44,254				(74,358	)
Change in deferred charges and other assets and deferred credits and other liabilities			(12,749	)			36,513
Net Cash Provided by (Used for) Operating Activities			127,847				(58,675	)
Investing Activities:
Purchases of available for sale securities			(15,000	)			-
Proceeds from sale of available for sale securities			15,000				-
Increase in other investments			(13,568	)			(2,534	)
Electric plant additions			(30,794	)			(26,058	)
Net Cash Used for Investing Activities			(44,362	)			(28,592	)
Financing Activities:
Draws on revolving credit facility			104,500				318,000
Repayments on revolving credit facility			(195,500	)			(235,000	)
Net Cash (Used for) Provided by Financing Activities			(91,000	)			83,000
Net Change in Cash and Cash Equivalents			(7,515	)			(4,267	)
Cash and Cash Equivalents - Beginning of Period			31,284				15,213
Cash and Cash Equivalents - End of Period		$	23,769			$	10,946

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

OLD DOMINION ELECTRIC COOPERATIVE

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We comply with the Uniform System of Accounts as prescribed by FERC. In conformity with GAAP, the accounting policies and practices applied by us in the determination of rates are also employed for financial reporting purposes. The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Actual results could differ from those estimates. We did not have any other comprehensive income for the periods presented.

OLD DOMINION ELECTRIC COOPERATIVE

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-looking Statements

Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding matters that could have an impact on our business, financial condition, and future operations. These statements, based on our expectations and estimates, are not guarantees of future performance and are subject to risks, uncertainties, and other factors. These risks, uncertainties, and other factors include, but are not limited to: general business conditions; demand for energy; federal and state legislative and regulatory actions, and legal and administrative proceedings; changes in and compliance with environmental laws and regulations; general credit and capital market conditions; weather conditions; the cost and availability of commodities used in our industry; disruption due to cybersecurity threats or incidents; and unanticipated changes in operating expenses and capital expenditures. Our actual results may vary materially from those discussed in the forward-looking statements as a result of these and other factors. Any forward-looking statement speaks only as of the date on which the statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made even if new information becomes available or other events occur in the future.

Critical Accounting Policies

As of June 30, 2024, there have been no significant changes in our critical accounting policies as disclosed in our 2023 Annual Report on Form 10-K. These policies include the accounting for regulated operations, deferred energy, margin stabilization, accounting for asset retirement and environmental obligations, and accounting for derivatives and hedging.

Basis of Presentation

The accompanying financial statements reflect the consolidated accounts of ODEC and TEC. See "Note 1-General" in Notes to Condensed Consolidated Financial Statements in Part 1, Item 1.

Overview

We are a not-for-profit power supply cooperative owned entirely by our eleven Class A member distribution cooperatives and a Class B member, TEC. We supply our member distribution cooperatives' energy and demand requirements through a portfolio of resources including generating facilities, long-term and short-term physically-delivered forward power purchase contracts, and spot market purchases. We also supply the transmission services necessary to deliver this power to our member distribution cooperatives.

Our results from operations for the three and six months ended June 30, 2024, as compared to the same periods in 2023, were primarily impacted by the increase in total revenues from sales to our member distribution cooperatives, the increase in transmission expense, and the decrease in deferred energy expense. Additionally, for the three months ended June 30, 2024, as compared to the same period in 2023, our results from operations were impacted by the increase in fuel expense and purchased power expense.

Factors Affecting Results

For a comprehensive discussion of factors affecting results, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Factors Affecting Results" in Item 7 in our 2023 Annual Report on Form 10-K.

Formula Rate

Our power sales are comprised of two power products - energy and demand. Energy is the physical electricity delivered through transmission and distribution facilities to customers. We must have sufficient committed energy available to us for delivery to our member distribution cooperatives to meet their maximum energy needs at any time, with limited exceptions. This committed available energy at any time is referred to as demand.

The rates we charge our member distribution cooperatives are regulated by FERC and FERC has granted us authority to charge our member distribution cooperatives utilizing a formula rate and market-based rates. In accordance with our wholesale power contracts with our member distribution cooperatives, we sell power to them utilizing a formula rate. An exception in the formula rate allows our member distribution cooperatives to elect to utilize market-based rates for new and expanding loads that meet certain criteria.

The rates we charge our member distribution cooperatives under the formula rate are intended to permit collection of revenues which will equal the sum of:

The formula rate identifies the cost components that we can collect through rates, but not the actual amounts to be collected. With limited minor exceptions, we can change our rates periodically to match the costs we have incurred and we expect to incur without seeking FERC approval.

Our margin requirement and additional equity contributions approved by our board of directors are recovered through our demand rates. We establish our demand rates to produce a net margin attributable to ODEC equal to 20% of our budgeted total interest charges, plus additional equity contributions approved by our board of directors. The formula rate permits us to adjust revenues from the member distribution cooperatives to equal our actual total demand costs incurred, including a net margin attributable to ODEC equal to 20% of actual interest charges, plus additional equity contributions approved by our board of directors. We make these adjustments utilizing Margin Stabilization.

As detailed in the table below, we utilized Margin Stabilization to reduce revenues for the three months ended June 30, 2024, and for the six months ended June 30, 2024 and 2023, and to increase revenues for the three months ended June 30, 2023.

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Margin Stabilization adjustment		$	80			$	(403	)		$	7,963			$	4,137

For further discussion of Margin Stabilization, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies-Margin Stabilization" in Item 7 in our 2023 Annual Report on Form 10-K.

Weather

Weather affects the demand for electricity. Relatively higher or lower temperatures tend to increase the demand for energy to use air conditioning and heating systems, respectively. Mild weather generally reduces the demand because heating and air conditioning systems are operated less. Weather also plays a role in the price of energy through its effects on the market price for fuel, particularly natural gas.

Heating and cooling degree days are measurement tools used to quantify the need to utilize heating or cooling, respectively, for a building. Heating degree days are calculated as the number of degrees below 60 degrees in a single day. Cooling degree days are calculated as the number of degrees above 65 degrees in a single day. In a single calendar day, it is possible to have multiple heating degree and cooling degree days.

The heating and cooling degree days for the three and six months ended June 30, 2024, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			Change			2024			2023			Change
Heating degree days			83				52				59.6	%			1,856				1,610				15.3	%
Cooling degree days			379				134				182.8				379				134				182.8

Power Supply Resources

We provide power to our members through a combination of our interests in Wildcat Point, a natural gas-fired combined cycle generation facility; North Anna, a nuclear power station; Clover, a coal-fired generation facility; two natural gas-fired combustion turbine facilities (Louisa and Marsh Run); diesel-fired distributed generation facilities; and physically-delivered forward power purchase contracts and spot market energy purchases. Our energy supply resources for the three and six months ended June 30, 2024 and 2023, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024		2023			2024		2023
		(in MWh and percentages)
Generated:
Wildcat Point		839,863		26.1	%	1,026,185		35.5	%		1,351,138		19.6	%	2,160,745		34.3	%
North Anna		457,768		14.2		491,463		17.0			871,551		12.7		981,419		15.6
Clover		79,883		2.5		-		-			256,768		3.7		35,489		0.6
Louisa		113,178		3.5		71,963		2.5			160,881		2.3		90,579		1.4
Marsh Run		99,359		3.1		50,027		1.7			124,192		1.8		70,966		1.1
Distributed Generation		708		-		746		-			1,021		-		1,053		-
Total Generated		1,590,759		49.4		1,640,384		56.7			2,765,551		40.1		3,340,251		53.0
Purchased:
Other than renewable:
Long-term and short-term		718,338		22.3		874,569		30.2			1,771,786		25.7		1,886,287		30.0
Spot market		704,445		21.9		234,429		8.1			1,942,017		28.2		686,089		10.9
Total Other than renewable		1,422,783		44.2		1,108,998		38.3			3,713,803		53.9		2,572,376		40.9
Renewable (1)		205,516		6.4		143,950		5.0			411,408		6.0		386,692		6.1
Total Purchased		1,628,299		50.6		1,252,948		43.3			4,125,211		59.9		2,959,068		47.0
Total Available Energy		3,219,058		100.0	%	2,893,332		100.0	%		6,890,762		100.0	%	6,299,319		100.0	%

Generating Facilities

Our operating expenses, and consequently our rates charged to our member distribution cooperatives, are significantly affected by the operations of our generating facilities, which are under dispatch direction of PJM. PJM balances its members' power requirements with the power resources available to supply those requirements. Based on this evaluation of supply and demand, PJM schedules and directs the dispatch of available generating facilities throughout its region in a manner intended to meet the demand for energy in the most reliable and cost-effective manner. Thus, PJM directs the dispatch of these facilities even though it does not own them. For further discussion of PJM, see "Business-Power Supply Resources-PJM" in Item 1 in our 2023 Annual Report on Form 10-K.

Operational Availability

The operational availability of our owned generating resources for the three and six months ended June 30, 2024 and 2023, was as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
Wildcat Point			77.2	%			77.1	%			88.2	%			87.7	%
North Anna			95.0				100.0				89.5				100.0
Clover			52.3				40.2				71.1				59.6
Louisa			96.5				95.8				97.1				97.9
Marsh Run			81.9				83.9				90.5				91.9

Capacity Factor

The output of Wildcat Point, North Anna, and Clover for the three and six months ended June 30, 2024 and 2023, as a percentage of maximum dependable capacity rating of the facilities, was as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
Wildcat Point			39.2	%			48.0	%			31.4	%			50.8	%
North Anna			95.5				102.5				90.9				103.0
Clover			8.7				-				14.0				1.9

Results of Operations

Operating Revenues

Our operating revenues are derived from sales of power and renewable energy credits to our member distribution cooperatives and non-members. ODEC sells excess purchased and generated energy not needed to meet the actual needs of our member distribution cooperatives to PJM, TEC, or other counterparties. Our financial statements represent the consolidated financial statements of ODEC and TEC and through the consolidation process, all intercompany balances and transactions have been eliminated and TEC's sales are reflected as non-member revenues. Our operating revenues and energy sales in MWh by type of purchaser for the three and six months ended June 30, 2024 and 2023, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Operating revenues:
Member distribution cooperatives:
Formula rate		$	246,739			$	234,357			$	507,168			$	494,977
Market-based rates			12,492				4,949				21,229				8,975
Total Member distribution cooperatives			259,231				239,306				528,397				503,952
Non-members (1)			3,380				14,834				5,698				26,101
Total Operating revenues		$	262,611			$	254,140			$	534,095			$	530,053
Energy sales to:		(in MWh)
Member distribution cooperatives - formula rate			2,859,484				2,319,457				6,239,601				5,222,007
Member distribution cooperatives - market-based rates			258,658				123,359				486,458				229,881
Non-members			84,601				433,351				130,250				808,595
Total Energy sales			3,202,743				2,876,167				6,856,309				6,260,483

Member Distribution Cooperatives

The rates we charge our member distribution cooperatives are regulated by FERC and FERC has granted us authority to charge our member distribution cooperatives utilizing a formula rate and market-based rates. In accordance with our wholesale power contracts with our member distribution cooperatives, we sell power to them utilizing a formula rate. An exception in the formula rate allows our member distribution cooperatives to elect to utilize market-based rates for new and expanding loads that meet certain criteria.

Formula Rate

Our operating revenues from sales to member distribution cooperatives - formula rate for the three and six months ended June 30, 2024 and 2023, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Member distribution cooperatives:
Formula rate:
Energy revenues		$	122,351			$	125,321			$	266,976			$	282,160
Renewable energy credits			91				90				201				173
Demand revenues			124,297				108,946				239,991				212,644
Total Formula rate revenues		$	246,739			$	234,357			$	507,168			$	494,977
Energy sales to:		(in MWh)
Member distribution cooperatives - formula rate			2,859,484				2,319,457				6,239,601				5,222,007
Average cost to member distribution cooperatives:		(per MWh)
Formula rate energy cost		$	42.79			$	54.03			$	42.79			$	54.03
Formula rate total cost		$	86.29			$	101.04			$	81.28			$	94.79

For the three and six months ended June 30, 2024, total formula rate revenues increased $12.4 million, or 5.3%, and $12.2 million, or 2.5%, respectively, as compared to the same periods in 2023. Formula rate energy revenues decreased $3.0 million, or 2.4%, and $15.2 million, or 5.4%, respectively, due to the decreases in our total energy rate, partially offset by the 23.3% and 19.5% increase in energy sales in MWh to our member distribution cooperatives - formula rate, respectively. The weather was milder in 2023 as compared to 2024 and contributed to the increase in 2024 energy sales in MWh. Formula rate demand revenues increased $15.4 million, or 14.1%, and $27.3 million, or 12.9%, respectively, substantially due to changes in PJM charges for network transmission services.

The following table summarizes the changes to our total energy rate since 2023, which were implemented to address the differences in our realized as well as projected energy costs:

Date		% Change
January 1, 2023			(1.5	)
August 1, 2023			(14.8	)
January 1, 2024			(7.0	)
July 1, 2024			(3.5	)

Market-based Rates

Our operating revenues from sales to member distribution cooperatives - market-based rates for the three and six months ended June 30, 2024 and 2023, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
Member distribution cooperatives:		(in thousands)
Market-based rates:
Energy revenues		$	9,803			$	4,390			$	17,255			$	7,875
Demand revenues			2,689				559				3,974				1,100
Total Market-based rates revenues		$	12,492			$	4,949			$	21,229			$	8,975
Energy sales to:		(in MWh)
Member distribution cooperatives - market-based rates			258,658				123,359				486,458				229,881

The increase in total market-based rates revenues is a result of load growth related to data centers. See "Member Distribution Cooperatives" above.

Operating Expenses

The following is a summary of the components of our operating expenses for the three and six months ended June 30, 2024 and 2023:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Fuel		$	42,043			$	35,005			$	99,609			$	100,833
Purchased power			56,746				46,029				165,258				157,270
Transmission			49,189				42,519				99,052				84,588
Deferred energy			36,287				58,418				23,363				47,692
Operations and maintenance			29,332				22,829				47,295				41,487
Administrative and general			12,308				10,425				24,572				21,242
Depreciation and amortization			17,519				17,402				35,016				34,665
Amortization of regulatory asset/(liability), net			11,543				781				11,555				487
Accretion of asset retirement obligations			1,572				1,519				3,143				3,037
Taxes, other than income taxes			2,203				2,335				4,621				4,593
Total operating expenses		$	258,742			$	237,262			$	513,484			$	495,894

Our operating expenses are comprised of the costs that we incur to generate and purchase power to meet the needs of our member distribution cooperatives, and the costs associated with any sales of power to non-members. Our energy costs generally are variable and include fuel expense, the energy portion of our purchased power expense, and the variable portion of operations and maintenance expense. Our demand costs generally are fixed and include the capacity portion of our purchased power expense, transmission expense, the fixed portion of operations and maintenance expense, administrative and general expense, and depreciation and amortization expense. Additionally, all non-operating expenses and income items, including investment income and interest charges, net, are components of our demand costs. See "Factors Affecting Results-Formula Rate" above.

Total operating expenses increased $21.5 million, or 9.1%, and $17.6 million, or 3.5%, respectively, for the three and six months ended June 30, 2024, as compared to the same periods in 2023, primarily as a result of the increase in transmission expense and amortization of regulatory asset/(liability), net, partially offset by the decrease in deferred energy expense. Additionally, total operating expenses increased for the three months ended June 30, 2024, as compared to the same period in 2023, as a result of the increase in fuel expense and purchased power expense.

Other Items

Interest Charges, Net

The primary factors affecting our interest charges, net are issuances of indebtedness, scheduled payments of principal on our indebtedness, interest charges related to our revolving credit facility (including fees), and interest paid to our member distribution cooperatives on prepayment balances. The major components of interest charges, net for the three and six months ended June 30, 2024 and 2023, were as follows:

		Three Months Ended June 30,			Six Months Ended June 30,
		2024			2023			2024			2023
		(in thousands)
Interest on long-term debt		$	(11,619	)		$	(12,305	)		$	(23,235	)		$	(24,608	)
Interest on revolving credit facility			(1,932	)			(2,205	)			(4,787	)			(3,874	)
Other interest			(1,261	)			(1,727	)			(2,739	)			(3,393	)
Total interest charges			(14,812	)			(16,237	)			(30,761	)			(31,875	)
Allowance for borrowed funds used during construction			587				297				1,118				667
Interest charges, net		$	(14,225	)		$	(15,940	)		$	(29,643	)		$	(31,208	)

Net Margin Attributable to ODEC

Net margin attributable to ODEC, which is a function of our total interest charges plus any additional equity contributions approved by our board of directors, was 8.8% and 3.5% lower for the three and six months ended June 30, 2024, as compared to the same periods in 2023, due to the decrease in total interest charges.

Financial Condition

The principal changes in our financial condition from December 31, 2023 to June 30, 2024, were caused by decreases in revolving credit facility, regulatory assets, and other liabilities; substantially offset by increases in accounts payable-members and deferred energy.

Liquidity and Capital Resources

Sources

Cash generated by our operations, periodic borrowings under our revolving credit facility, and occasional issuances of long-term debt provide our sources of liquidity and capital.

Operations

During the first six months of 2024, our operating activities provided cash flows of $127.8 million and during the first six months of 2023, our operating activities used cash flows of $58.7 million.

Revolving Credit Facility

We maintain a revolving credit facility to cover our short-term and medium-term funding needs that are not met by cash from operations or other available funds. Available funding under this facility totals $400 million and commitments under this syndicated credit agreement extend through December 7, 2028. As of June 30, 2024 and December 31, 2023, we had outstanding under this facility $100.0 million and $191.0 million in borrowings, respectively.

Financings

We fund the portion of our capital expenditures that we are not able to fund from operations through borrowings under our revolving credit facility and issuances of debt in the capital markets. These capital expenditures consist primarily of the costs related to the development, construction, acquisition, or improvement of our owned generating and transmission facilities. We continue to evaluate the issuance of additional long-term indebtedness in the near term to fund capital expenditures related to our existing generating and transmission facilities. Additionally, we are evaluating the need to construct new generating facilities, which could result in the issuance of additional long-term indebtedness. We believe our cash from operations, funds available from our revolving credit facility, and issuances of additional long-term indebtedness, will be sufficient to meet our currently anticipated future operational and capital requirements.

Uses

Our uses of liquidity and capital relate to funding our working capital needs, investment activities, and financing activities. Substantially all of our investment activities relate to capital expenditures in connection with our generating facilities. Additionally, we have asset retirement obligations in the future that are significantly offset by the nuclear decommissioning trust, which as of June 30, 2024, had a balance of $279.9 million. Our future contingent obligations primarily relate to power purchase and natural gas arrangements, and we have no off-balance sheet obligations. Some of our power purchase contracts obligate us to provide credit support if our obligations issued under the Indenture are rated below specified thresholds by S&P and Moody's. We currently anticipate that cash from operations, borrowings under our revolving credit facility, and potential issuances of long-term indebtedness will be sufficient to meet our liquidity needs for the near term, including planned capital expenditures, decommissioning trust obligations, and our contingent obligations as described above.

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

No material changes occurred in our exposure to market risk during the second quarter of 2024.

ITEM 4. CONTROLSAND PROCEDURES

As of the end of the period covered by this report, our management, including the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, concluded that our disclosure controls and procedures are effective in ensuring that all material information required to be filed in this report has been made known to them in a timely manner. We have established a Disclosure Assessment Committee comprised of members of our senior and middle management to assist in this evaluation.

There have been no material changes in our internal control over financial reporting or in other factors that could significantly affect such controls during the past fiscal quarter.

OLD DOMINION ELECTRIC COOPERATIVE

PART II. OTHER INFORMATION

ITEM 1. LEGALPROCEEDINGS

Other Matters

Other than certain legal proceedings arising out of the ordinary course of business that management believes will not have a material adverse impact on our results of operations or financial condition, there is no other litigation pending or threatened against us.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in "Risk Factors" in Part I, Item 1A in our 2023 Annual Report on Form 10-K, which could affect our business, results of operations, financial condition, and cash flows. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, results of operations, financial condition, and cash flows.

ITEM 5. OTHER INFORMATION

Recent EPA Developments

In May 2023, the EPA proposed performance standards for both new and existing generating units for reducing carbon dioxide emissions. The proposed standards included emissions guidelines that would set limits for new gas-fired combustion turbines, existing coal, oil, and gas-fired steam generating units, and certain existing gas-fired combustion turbines.

On May 9, 2024, the final rule, which contains requirements to either retrofit existing coal units with carbon controls or retire the asset, was published in the Federal Register and became effective July 8, 2024. Also beginning on May 9, 2024, multiple lawsuits were filed against the EPA to seek judicial review of the final regulation and multiple petitions were filed seeking to stay implementation of the rule. On July 19, 2024, the United States Court of Appeals for the District of Columbia Circuit denied requests to stay the rule. On July 23, 2024, multiple entities filed an emergency stay application with the United States Supreme Court and are currently awaiting a ruling. We are continuing to monitor this standard as it relates to our generating facilities, particularly Clover. We will be able to determine our compliance strategies after state implementation plans have been developed related to the rule. The expenditures to either implement additional emissions control measures or retire an asset could have a material impact on our results of operations, financial condition, or cash flows.

ITEM 6. EXHIBITS

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

SIGNATURE

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.

	OLD DOMINION ELECTRIC COOPERATIVE
		Registrant
Date: August 12, 2024		/s/ BRYAN S. ROGERS
		Bryan S. Rogers
		Senior Vice President and Chief Financial Officer
		(Principal financial officer)