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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

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

       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 ý No o

       Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

       Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No ý

       State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. None

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

       Documents Incorporated by Reference: None

OGLETHORPE POWER CORPORATION

2004 FORM 10-K ANNUAL REPORT

Table of Contents

i

SELECTED DEFINITIONS

        The following terms used in this report have the meanings indicated below:

ii

PART I

ITEM 1. BUSINESS

OGLETHORPE POWER CORPORATION

General

    Oglethorpe Power Corporation (An Electric Membership Corporation) ("Oglethorpe") is a Georgia electric membership corporation incorporated in 1974 and headquartered in metropolitan Atlanta. Oglethorpe is owned by 38 retail electric distribution cooperative members (the "Members"). Oglethorpe's principal business is providing wholesale electric power to the Members. As with cooperatives generally, Oglethorpe operates on a not-for-profit basis. Oglethorpe is the largest electric cooperative in the United States in terms of operating revenues, assets, kilowatt-hour ("kWh") sales and, through the Members, consumers served. Oglethorpe has 168 employees.

    The Members are local consumer-owned distribution cooperatives providing retail electric service on a not-for-profit basis. In general, the customer base of the Members consists of residential, commercial and industrial consumers within specific geographic areas. The Members serve approximately 1.5 million electric consumers (meters) representing approximately 3.7 million people. (See "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES.")

    From 1974 to 2004, Oglethorpe served 39 Members. However, effective January 1, 2005, Flint EMC withdrew from membership in Oglethorpe. (See "Competition" below.)

    Oglethorpe's mailing address is 2100 East Exchange Place, Tucker, Georgia 30084-5336, and its telephone number is (770) 270-7600.

Cooperative Principles

    Cooperatives like Oglethorpe are business organizations owned by their members, which are also either their wholesale or retail customers. As not-for-profit organizations, cooperatives are intended to provide services to their members at the lowest possible cost, in part by eliminating the need to produce profits or a return on equity. Cooperatives may make sales to non-members, the effect of which is generally to reduce costs to members. Today, cooperatives operate throughout the United States in such diverse areas as utilities, agriculture, irrigation, insurance and credit.

    All cooperatives are based on similar business principles and legal foundations. Generally, an electric cooperative designs its rates to recover its cost-of-service and to collect a reasonable amount of revenues in excess of expenses, which constitutes margins. The margins increase patronage capital, which is the equity component of a cooperative's capitalization. Any such margins are considered capital contributions (that is, equity) from the members and are held for the accounts of the members and returned to them when the board of directors of the cooperative deems it prudent to do so. The timing and amount of any actual return of capital to the members depends on the financial goals of the cooperative and the cooperative's loan and security agreements.

Power Supply Business

    Oglethorpe provides wholesale electric service to the 38 Members for a substantial portion of their requirements from a combination of its generation assets and power purchased from power marketers and other suppliers. Oglethorpe provides this service pursuant to long-term, take-or-pay Amended and Restated Wholesale Power Contracts, dated January 1, 2003 (the "Wholesale Power Contracts"). The Wholesale Power Contracts obligate the Members jointly and severally to pay rates sufficient to recover all the costs of owning and operating Oglethorpe's power supply business. Taking into consideration the approval requirements for future resources in the Wholesale Power Contracts, Oglethorpe anticipates that the Members will satisfy all of their requirements above their Oglethorpe purchase obligations with purchases from other suppliers. (See "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Member Power Supply Resources.")

    Oglethorpe has undivided interests in 24 generating units. These units provide Oglethorpe with a total of 4,744 megawatts ("MW") of nameplate capacity, consisting of 1,501 MW of coal-fired capacity, 1,185 MW of nuclear-fueled capacity, 632 MW of pumped storage hydroelectric capacity, 1,411 MW of gas-fired capacity (206 MW of which is capable of running on

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oil) and 15 MW of oil-fired combustion turbine capacity.

    Oglethorpe purchases a total of approximately 550 MW of power pursuant to long-term power purchase agreements. (See "OGLETHORPE'S POWER SUPPLY RESOURCES" and "PROPERTIES – Generating Facilities.")

    In 2004, two of Oglethorpe's Members, Jackson EMC and Cobb EMC, accounted for 12.0% and 10.1% of Oglethorpe's total revenues, respectively. None of the other Members accounted for as much as 10% of Oglethorpe's total revenues in 2004.

Wholesale Power Contracts

    Oglethorpe has a substantially similar Wholesale Power Contract with each Member extending through December 31, 2025. For information regarding a potential extension of these contracts, see "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – EXECUTIVE OVERVIEW." Under the Wholesale Power Contract, each Member is unconditionally obligated, on an express "take-or-pay" basis, for a fixed percentage of the capacity costs (referred to as a "percentage capacity responsibility") of each of Oglethorpe's generation and purchased power resources. Each Wholesale Power Contract specifically provides that the Member must make payments whether or not power is delivered and whether or not a plant has been sold or is otherwise unavailable. Oglethorpe is obligated to use its reasonable best efforts to operate, maintain and manage its resources in accordance with prudent utility practices.

    Percentage capacity responsibilities have been assigned to all of Oglethorpe's generation and purchased power resources. Percentage capacity responsibilities for any future resource will be assigned only to Members choosing to participate in that resource. The Wholesale Power Contracts provide that each Member is jointly and severally responsible for all costs and expenses of all existing generation and purchased power resources, as well as for any approved (as described below) future resources, whether or not such Member has elected to participate in such future resource. For resources so approved in which less than all Members participate, costs are shared first among the participating Members, and if all participating Members default, each non-participating Member is expressly obligated to pay a proportionate share of such default.

    To acquire future resources, Oglethorpe is required to obtain the approval of 75% of Oglethorpe's Directors, 75% of the Members and Members representing 75% of the patronage capital of Oglethorpe. Certain resource modifications can be made by Oglethorpe if approved by more than 50% of Directors and 50% of the Members.

    Under the Wholesale Power Contracts, Oglethorpe is not obligated to provide all of the Members' capacity and energy requirements. Individual Members must satisfy all of their requirements above their Oglethorpe purchase obligations from other suppliers, unless Oglethorpe and the Members agree that Oglethorpe will supply additional capacity and associated energy, subject to the approval requirements described above. (See "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Member Power Supply Resources.")

    Under the Wholesale Power Contracts, each Member must establish rates and conduct its business in a manner that will enable the Member to pay (i) to Oglethorpe when due, all amounts payable by the Member under its Wholesale Power Contract and (ii) any and all other amounts payable from, or which might constitute a charge or a lien upon, the revenues and receipts derived from the Member's electric system, including all operation and maintenance expenses and the principal of, premium, if any, and interest on all indebtedness related to the Member's electric system.

New Business Model Member Agreement

    In 2003, Oglethorpe and its Members entered into a New Business Model Member Agreement. The agreement requires Member approval for Oglethorpe to undertake certain activities. It does not limit Oglethorpe's ability to own, manage, control and operate its resources or perform its functions under the Wholesale Power Contracts.

    Oglethorpe may not provide services unrelated to its resources or its functions under the Wholesale Power Contracts if such services would require it to incur indebtedness, provide a guarantee or make any loan or investment, unless approved by 75% of Oglethorpe's Board of Directors, 75% of the Members, and Members representing 75% of the patronage capital of Oglethorpe. Oglethorpe may provide any other such service to a Member so long as (1) doing so would not

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create a conflict of interest with respect to other Members, (2) such service is being provided to all Members or (3) such service has received the three-part 75% approval described above.

Electric Rates

    Each Member is required to pay Oglethorpe for capacity and energy furnished under its Wholesale Power Contract in accordance with rates established by Oglethorpe. Oglethorpe reviews its rates at such intervals as it deems appropriate but is required to do so at least once every year. Oglethorpe is required to revise its rates as necessary so that the revenues derived from its rates, together with its revenues from all other sources, will be sufficient to pay all costs of its system, to provide for reasonable reserves and to meet all financial requirements.

    Oglethorpe's principal financial requirements are contained in the Indenture, dated as of March 1, 1997, from Oglethorpe to SunTrust Bank, as trustee (as supplemented, the "Mortgage Indenture"). Under the Mortgage Indenture, Oglethorpe is required, subject to any necessary regulatory approval, to establish and collect rates which are reasonably expected, together with other revenues of Oglethorpe, to yield a Margins for Interest Ratio for each fiscal year equal to at least 1.10. "Margins for Interest Ratio" is the ratio of "Margins for Interest" to total "Interest Charges" for a given period. Margins for Interest is the sum of:

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net margins of Oglethorpe (which includes revenues of Oglethorpe subject to refund at a later date but excludes provisions for (i) non-recurring charges to income, including the non-recoverability of assets or expenses, except to the extent Oglethorpe determines to recover such charges in rates, and (ii) refunds of revenues collected or accrued subject to refund), plus

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interest charges, whether capitalized or expensed, on all indebtedness secured under the Mortgage Indenture or by a lien equal or prior to the lien of the Mortgage Indenture, including amortization of debt discount or premium on issuance, but excluding interest charges on indebtedness assumed by Georgia Transmission Corporation ("Interest Charges"), plus

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any amount included in net margins for accruals for federal or state income taxes imposed on income after deduction of interest expense.

    Margins for Interest takes into account any item of net margin, loss, gain or expenditure of any affiliate or subsidiary of Oglethorpe only if Oglethorpe has received such net margins or gains as a dividend or other distribution from such affiliate or subsidiary or if Oglethorpe has made a payment with respect to such losses or expenditures.

    The formulary rate established by Oglethorpe in the rate schedule to the Wholesale Power Contracts employs a rate methodology under which all categories of costs are specifically separated as components of the formula to determine Oglethorpe's revenue requirements. The rate schedule also implements the responsibility for fixed costs assigned to each Member (that is, the Member's percentage capacity responsibility). The monthly charges for capacity and other non-energy charges are based on Oglethorpe's annual budget. Such capacity and other non-energy charges may be adjusted by the Board of Directors, if necessary, during the year through an adjustment to the annual budget. Energy charges reflect the pass-through of actual energy costs, including fuel costs, variable operations and maintenance costs and purchased energy costs. (See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Summary of Cooperative Operations – Rates and Regulation.")

    The rate schedule formula also includes a prior period adjustment mechanism designed to ensure that Oglethorpe achieves the minimum 1.10 Margins for Interest Ratio. Amounts, if any, by which Oglethorpe fails to achieve a minimum 1.10 Margins for Interest Ratio are accrued as of December 31 of the applicable year and collected from the Members during the period April through December of the following year. The rate schedule formula is intended to provide for the collection of revenues which, together with revenues from all other sources, are equal to all costs and expenses recorded by Oglethorpe, plus amounts necessary to achieve at least the minimum 1.10 Margins for Interest Ratio.

    Under the Mortgage Indenture and related loan contract with the Rural Utilities Service ("RUS"), adjustments to Oglethorpe's rates to reflect changes in Oglethorpe's budgets are generally not subject to RUS approval. Changes to the rate schedule under the Wholesale Power Contracts are generally subject to RUS approval. Oglethorpe's rates are not subject to the approval of any other federal or state agency or

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authority, including the Georgia Public Service Commission (the "GPSC").

Relationship with Smarr EMC

    Smarr EMC is a Georgia electric membership corporation owned by 36 of Oglethorpe's 38 Members. Smarr EMC owns two combustion turbine facilities with aggregate capacity of 709 MW. Oglethorpe provides, operations, financial and management services for Smarr EMC. (See "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Member Power Supply Resources.")

Relationship with GTC

    Oglethorpe, the 38 Members and Flint EMC are members of Georgia Transmission Corporation (An Electric Membership Corporation) ("GTC"), which was formed in 1997 to own and operate the transmission business previously owned by Oglethorpe. GTC provides transmission services to its members for delivery of the members' power purchases from Oglethorpe and other power suppliers. GTC also provides transmission services to third parties. Oglethorpe has entered into an agreement with GTC to provide transmission services for third party transactions and for service to Oglethorpe's own facilities.

    In 1997, GTC assumed certain indebtedness associated with pollution control bonds ("PCBs") originally issued on behalf of Oglethorpe. If GTC fails to satisfy its obligations under this debt, Oglethorpe would then remain liable for any unsatisfied amounts. (See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Financial Condition – Off-Balance Sheet Arrangements.")

    GTC has rights in the Integrated Transmission System, which consists of transmission facilities owned by GTC, Georgia Power Company ("GPC"), the Municipal Electric Authority of Georgia ("MEAG") and the City of Dalton ("Dalton"). Through agreements, common access to the combined facilities that compose the Integrated Transmission System enables the owners to use their combined resources to make deliveries to or for their respective consumers, to provide transmission service to third parties and to make off-system purchases and sales. The Integrated Transmission System was established in order to obtain the benefits of a coordinated development of the parties' transmission facilities and to make it unnecessary for any party to construct duplicative facilities.

Relationship with GSOC

    Oglethorpe, GTC and the 38 Members are members of Georgia System Operations Corporation ("GSOC"), which was formed in 1997 to own and operate the system operations business previously owned by Oglethorpe. GSOC operates the system control center and currently provides system operations services and administrative support services to Oglethorpe and to GTC. Oglethorpe has contracted with GSOC to schedule and dispatch Oglethorpe's resources. Oglethorpe also purchases from GSOC services that GSOC purchases from GPC under the Control Area Compact, which Oglethorpe co-signed with GSOC. (See "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Members' Relationship with GTC and GSOC.") GSOC provides support services to Oglethorpe in the areas of accounting, auditing, communications, human resources, facility management, telecommunications and information technology at cost-based rates.

    GTC has contracted with GSOC to provide certain transmission system operation services including reliability monitoring, switching operations, and the real-time management of the transmission system.

    GSOC, Oglethorpe and the Members are evaluating how GSOC implements the procedures for Members to schedule energy from Oglethorpe's resources. This evaluation could result in changes in the Operation Services Agreement between Oglethorpe and GSOC, as well as changes in the contractual relationships among GSOC and the Members. It would not, however, change the terms of Oglethorpe's Wholesale Power Contracts with the Members.

    Oglethorpe has a small amount of loans to GSOC and also has secondary liability on a small amount of GSOC indebtedness and GSOC contractual obligations.

Relationship with RUS

    Historically, federal loan programs administered by RUS have provided the principal source of financing for electric cooperatives. Loans guaranteed by RUS and made by the Federal Financing Bank ("FFB") have been a major source of funding for Oglethorpe. However, the availability and magnitude of RUS-guaranteed loan funds is subject to annual federal

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budget appropriations and thus cannot be assured. Currently, RUS-guaranteed loan funds are subject to increased uncertainty because of recent budgetary pressures faced by Congress. In addition, proposed and evolving policies within the Bush Administration and RUS may limit loan funds where the proceeds are slated for use in "urban" rather than "rural" areas, in certain circumstances where a generation and transmission ("G&T") cooperative's members are no longer RUS borrowers. As currently discussed, this particular new policy has the potential to affect Oglethorpe in a way that limits its ability to access RUS financing for new generation facilities more than other RUS borrowers because of its unique circumstances. Some of Oglethorpe's faster-growing suburban area Members are no longer RUS borrowers. Conversely, because Oglethorpe's Wholesale Power Contracts allow the Members to purchase power from other suppliers, Oglethorpe may also be less affected than other G&T borrowers. Because of these factors, Oglethorpe cannot predict the amount or cost of RUS-guaranteed loans that may be available to Oglethorpe in the future.

    Oglethorpe has a loan contract with RUS in connection with the Mortgage Indenture. Under the loan contract, RUS has approval rights over certain significant actions and arrangements, including, without limitation,

•

significant additions to or dispositions of system assets,

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significant power purchase and sale contracts,

•

changes to the Wholesale Power Contracts and the rate schedule contained therein,

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changes to plant ownership and operating agreements, and

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in limited circumstances, issuance of additional secured debt.

    The extent of RUS's approval rights under the loan contract with Oglethorpe is substantially less than the supervision and control RUS has traditionally exercised over borrowers under its standard loan and security documentation. In addition, the Mortgage Indenture improves Oglethorpe's ability to borrow funds in the public capital markets relative to RUS's standard mortgage. The Mortgage Indenture constitutes a lien on substantially all of the owned tangible and certain intangible property of Oglethorpe.

Relationship with GPC

    Oglethorpe's relationship with GPC is a significant factor in several aspects of Oglethorpe's business. All of Oglethorpe's co-owned generating facilities, except Rocky Mountain, are operated by GPC on behalf of itself as a co-owner and as agent for the other co-owners. GPC is one of Oglethorpe's suppliers of purchased power, and also supplies services to Oglethorpe and GSOC to support the scheduling and dispatch of Oglethorpe's resources, including off-system transactions. GPC and the Members are competitors in the State of Georgia for electric service to any new customer that has a choice of supplier under the Georgia Territorial Electric Service Act, which was enacted in 1973 (the "Territorial Act"). For further information regarding the agreements with GPC and Oglethorpe's and the Members' relationships with GPC, see "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Service Area and Competition" and "OGLETHORPE'S POWER SUPPLY RESOURCES – Power Purchase and Sale Arrangements – Power Purchases." Also see "PROPERTIES – Fuel Supply," "– Co-Owners of Plants – Georgia Power Company" and "– The Plant Agreements."

Competition

    Under current Georgia law, the Members generally have the exclusive right to provide retail electric service in their respective territories. Since 1973, however, the Territorial Act has permitted limited competition among electric utilities located in Georgia for sales of electricity to certain large commercial or industrial customers. The owner of any new facility may receive electric service from the power supplier of its choice if the facility is located outside of municipal limits and has a connected load upon initial full operation of 900 kilowatts or more. The Members are actively engaged in competition with other retail electric suppliers for these new commercial and industrial loads. While the competition for 900-kilowatt loads represents only limited competition in Georgia, this competition has given the Members the opportunity to develop resources and strategies to prepare for an increasingly competitive market.

    Some states have implemented varying forms of retail competition among power suppliers. No legislation related to retail competition has yet been enacted in Georgia, and no bill is currently pending in the Georgia legislature which would amend the Territorial Act or

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otherwise affect the exclusive right of the Members to supply power to their current service territories. The GPSC does not have the authority under Georgia law to order retail competition or amend the Territorial Act.

    Oglethorpe cannot predict at this time the outcome of the various developments that may lead to increased competition in the electric utility industry or the effect of such developments on Oglethorpe or the Members. Nonetheless, Oglethorpe has taken several steps to prepare for and adapt to the fundamental changes that have occurred or appear likely to occur in the electric utility industry and to reduce stranded costs. In 1997, Oglethorpe divided itself into separate generation, transmission and system operations companies in order to better serve its Members in a deregulated and competitive environment. Oglethorpe also has pursued an interest cost reduction program, which has included refinancings and prepayments of various debt issues, that has provided significant cost savings.

    Oglethorpe and/or the Members continue to consider a wide array of other potential actions to meet future power supply needs, to reduce costs, to reduce increasing risks of the competitive generation business and to respond to increasing competition. Alternatives that could be considered include:

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power marketing arrangements or other alliance arrangements;

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whether potential load fluctuation risks in a competitive retail environment can be shifted to other wholesale suppliers;

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whether power supply requirements will continue to be met by the current mix of ownership and purchase arrangements;

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potential participation in future power supply resources, and whether they will be owned by Oglethorpe or by other entities;

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whether disposition of existing assets or asset classes would be advisable;

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the effects of nuclear license extensions;

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ways to extend the maturity of existing indebtedness in connection with extension(s) of plant operating licenses;

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the potential to prepay debt;

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the effects of proliferation of non-core services offered by electric utilities;

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mergers or other combinations among distributors or power suppliers; and

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other regulatory and business changes that may affect relative values of generation classes or have impacts on the electric industry.

    Oglethorpe will continue to consider industry trends and developments, but cannot predict at this time the results of these matters or any action Oglethorpe or the Members might take based thereon. Such consideration necessarily would take account of and are subject to legal, regulatory and contractual (including financing and plant co-ownership arrangements) considerations.

    Many Members are also providing or considering proposals to provide non-traditional products and services such as telecommunications and other services. In 2002, the Georgia legislature enacted legislation empowering the GPSC to authorize Member affiliates to market natural gas. The GPSC is required to condition such authorization on terms designed to ensure that cross-subsidizations do not occur between the electricity services of a Member and the gas activities of its gas affiliates.

    Depending on the nature of the generation business in Georgia, there could be reasons for the Members to separate their physical distribution business from their energy business, or otherwise restructure their current businesses to operate more effectively.

    Further, a Member's power supply planning may include consideration of assignment of its rights and obligations under its Wholesale Power Contract to another Member or a third party. Oglethorpe has existing provisions for Wholesale Power Contract assignment, as well as provisions for a Member to withdraw and concurrently to assign its rights and obligations under its Wholesale Power Contract. Assignments upon withdrawal require the assignee to have certain published credit ratings and to assume all of the withdrawing Member's obligations under its Wholesale Power Contract with Oglethorpe, and must be approved by Oglethorpe's Board of Directors. Assignments without withdrawal are governed by the Wholesale Power Contract and must be approved by both Oglethorpe's Board and RUS.

    From time to time, individual Members may be approached by parties indicating an interest in purchasing their systems. The Wholesale Power Contracts provide that a Member may not dissolve,

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liquidate or otherwise wind up its affairs without Oglethorpe's approval. A Member generally must obtain approval from Oglethorpe before it may consolidate or merge with any person or reorganize or change the form of its business organization from an electric membership corporation or sell, transfer, lease or otherwise dispose of all or substantially all of its assets to any person, whether in a single transaction or series of transactions. The Member may enter such a transaction without Oglethorpe's approval if specified conditions are satisfied, including, but not limited to, an agreement by the transferee, satisfactory to Oglethorpe, to assume the obligations of the Member under the Wholesale Power Contract, and certifications of accountants as to certain specified financial requirements of the transferee.

    Effective January 1, 2005, one of Oglethorpe's members, Flint EMC, withdrew from Oglethorpe and assigned, with Oglethorpe's consent, its Wholesale Power Contract to Cobb EMC. A portion of the power supply resources covered by the Flint EMC Wholesale Power Contract were allocated to six other Members. Cobb EMC has also acquired Pataula EMC's distribution system and provided Oglethorpe a guarantee of Pataula EMC's payment obligations under its Wholesale Power Contract. Other Members could be considering similar arrangements.

Seasonal Variations

    The demand for energy by the Members is influenced by seasonal weather conditions. Historically, Oglethorpe's peak sales have occurred during the months of June through August. Energy revenues track energy costs as they are incurred and also fluctuate month to month. Capacity revenues reflect the recovery of Oglethorpe's fixed costs, which do not vary significantly from month to month; therefore, capacity charges are billed and capacity revenues are recognized in substantially equal monthly amounts.

OGLETHORPE'S POWER SUPPLY RESOURCES

General

    Oglethorpe supplies capacity and energy to the Members for a substantial portion of their requirements from a combination of its generating assets and power purchased from power marketers and other suppliers. Oglethorpe also has arrangements with power marketers to supply power and to reduce the cost of capacity and energy delivered to the Members.

Generating Plants

    Oglethorpe's 24 generating units consist of 30% undivided interests in the Edwin I. Hatch Plant ("Plant Hatch"), the Alvin W. Vogtle Plant ("Plant Vogtle") and the Hal B. Wansley Plant ("Plant Wansley"), a 60% undivided interest in the Plant Robert W. Scherer ("Plant Scherer") Unit No. 1 ("Scherer Unit No. 1"), and the Robert W. Scherer Unit No. 2 ("Scherer Unit No. 2"), a 74.61% undivided interest in the Rocky Mountain Pumped Storage Hydroelectric Facility ("Rocky Mountain"), a 100% interest in the Talbot Energy Facility ("Talbot"), a 100% interest in the Chattahoochee Energy Facility ("Chattahoochee") and a 100% interest in the Doyle I, LLC Generating Plant ("Doyle"), through a power purchase agreement that Oglethorpe treats as a capital lease, all totaling 4,744 MW of nameplate capacity.

    MEAG, Dalton and GPC also have interests in Plants Hatch, Vogtle and Wansley and Scherer Units No. 1 and No. 2. GPC serves as operating agent for these units. GPC also has an interest in Rocky Mountain, which is operated by Oglethorpe.

    See "PROPERTIES" for a description of Oglethorpe's generating facilities, fuel supply and the co-ownership arrangements.

Power Purchase and Sale Arrangements

Power Purchases

    Oglethorpe has an agreement with GPC to purchase capacity and associated energy on a take-or-pay basis. Under this agreement, Oglethorpe is purchasing and will continue to purchase 250 MW until March 31, 2006.

    Oglethorpe has a contract through 2019 to purchase approximately 300 MW of capacity from Hartwell Energy Limited Partnership, a joint venture between

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Centennial Energy Resources, LLC, a subsidiary of MDU Resources Inc., and American National Power, Inc., a subsidiary of National Power, PLC. This capacity is provided by two 150 MW gas-fired combustion turbine generating units on a site near Hartwell, Georgia. Oglethorpe has the right to dispatch the units.

    See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Financial Condition – Contractual Obligations" for a discussion of Oglethorpe's commitments under these power purchase agreements and "Note 4 to Notes to Financial Statements" regarding a power purchase agreement with Doyle I, LLC that Oglethorpe treats as a capital lease. Also see "PROPERTIES – The Plant Agreements – Doyle."

    In addition, Oglethorpe also purchases small amounts of capacity and energy from "qualifying facilities" under the Public Utility Regulatory Policies Act of 1978 ("PURPA"). Under a waiver order from the Federal Energy Regulatory Commission ("FERC"), Oglethorpe historically made all purchases the Members would have otherwise been required to make under PURPA and Oglethorpe was relieved of its obligation to sell certain services to "qualifying facilities" so long as the Members make those sales. Purchases by Oglethorpe from such qualifying facilities provided less than 0.1% of Oglethorpe's energy requirements for the Members in 2004. Under their Wholesale Power Contracts, the Members may make such purchases instead of Oglethorpe.

Long-Term Power Sales

    Oglethorpe has an agreement to sell 100 MW of base capacity to Alabama Electric Cooperative, Inc. through December 31, 2005.

Other Power System Arrangements

    Oglethorpe has interchange, transmission and/or short-term capacity and energy purchase or sale agreements with approximately 70 utilities, power marketers and other power suppliers. The agreements provide variously for the purchase and/or sale of capacity and energy and/or for the purchase of transmission service. Oglethorpe is currently actively trading with only about half of these counterparties due to Oglethorpe's risk management policies with respect to netting provisions and credit ratings. The development of and access to the Integrated Transmission System and the interconnections with other utilities, through transmission contracts with GTC and others, are key elements in Oglethorpe's and the Members' ability to make off-system sales and purchases.

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THE MEMBERS AND THEIR POWER SUPPLY RESOURCES

Member Demand and Energy Requirements

    The Members are listed below and include 38 of the 42 electric distribution cooperatives in the State of Georgia.

Altamaha EMC
Amicalola EMC
Canoochee EMC
Carroll EMC
Central Georgia EMC
Coastal EMC (d/b/a Coastal Electric Cooperative)
Cobb EMC
Colquitt EMC
Coweta-Fayette EMC
Diverse Power Incorporated, an EMC
Excelsior EMC
Grady EMC
GreyStone Power Corporation, an EMC
Habersham EMC
Hart EMC
Irwin EMC
Jackson EMC
Jefferson Energy Cooperative, an EMC
Lamar EMC (d/b/a Southern Rivers Energy)
Little Ocmulgee EMC
Middle Georgia EMC
Mitchell EMC
Ocmulgee EMC
Oconee EMC
Okefenoke Rural EMC
Pataula EMC
Planters EMC
Rayle EMC
Satilla Rural EMC
Sawnee EMC
Slash Pine EMC
Snapping Shoals EMC
Sumter EMC
Three Notch EMC
Tri-County EMC
Upson EMC
Walton EMC
Washington EMC

    The Members serve approximately 1.5 million electric consumers (meters) representing approximately 3.7 million people. The Members serve a region covering approximately 37,000 square miles, which is approximately 65% of the land area in the State of Georgia, encompassing 143 of the State's 159 counties. Sales by the Members in 2004 amounted to approximately 30 million megawatt hours ("MWh"), with approximately 66% to residential consumers, 32% to commercial and industrial consumers and 2% to other consumers. The Members are the principal suppliers for the power needs of rural Georgia. While the Members do not serve any major cities, portions of their service territories are in close proximity to urban areas and are experiencing substantial growth due to the expansion of urban areas, including metropolitan Atlanta, into suburban areas and the growth of suburban areas into neighboring rural areas. The 38 Members have experienced average annual compound growth rates from 2002 through 2004 of 3% in number of consumers, 3% in MWh sales and 4% in electric revenues.

    The following table shows the aggregate peak demand and energy requirements of the Members for the years 2002 through 2004, and also shows the amounts of energy requirements supplied by Oglethorpe. From 2002 through 2004, demand and energy requirements of the Members increased at an average annual compound growth rate of 3% and 4%, respectively. These amounts include the requirements of Flint EMC, who was a member of Oglethorpe until December 31, 2004.

⁽¹⁾

System peak hour demand of the Members measured at the Members' delivery points (net of system losses), adjusted to include requirements served by Oglethorpe and Member resources behind the delivery points.

⁽²⁾

Retail requirements served by Oglethorpe and Member resources, adjusted to include requirements served by resources behind the delivery points. (See "Member Power Supply Resources" below.)

⁽³⁾

Includes energy supplied to Members for resale at wholesale.

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Service Area and Competition

    The Territorial Act regulates the service rights of all retail electric suppliers in the State of Georgia. Pursuant to the Territorial Act, the GPSC assigned substantially all areas in the State to specified retail suppliers. With limited exceptions, the Members have the exclusive right to provide retail electric service in their respective territories, which are predominately outside of the municipal limits existing at the time the Territorial Act was enacted in 1973. The principal exception to this rule of exclusivity is that electric suppliers may compete for most new retail loads of 900 kilowatts or greater. The GPSC may reassign territory only if it determines that an electric supplier has breached the tenets of public convenience and necessity. The GPSC may transfer service for specific premises only if: (i) the GPSC determines, after joint application of electric suppliers and proper notice and hearing, that the public convenience and necessity require a transfer of service from one electric supplier to another; or (ii) the GPSC finds, after proper notice and hearing, that an electric supplier's service to a premise is not adequate or dependable or that its rates, charges, service rules and regulations unreasonably discriminate in favor of or against the consumer utilizing such premise and the electric utility is unwilling or unable to comply with an order from GPSC regarding such service.

    Since 1973, the Territorial Act has allowed limited competition among electric utilities in Georgia by allowing the owner of any new facility located outside of municipal limits and having a connected load upon initial full operation of 900 kilowatts or greater to receive electric service from the retail supplier of its choice. The Members, with Oglethorpe's support, are actively engaged in competition with other retail electric suppliers for these new commercial and industrial loads. The number of commercial and industrial loads served by the Members continues to increase annually. While the competition for 900-kilowatt loads represents only limited competition in Georgia, this competition has given Oglethorpe and the Members the opportunity to develop resources and strategies to operate in an increasingly competitive market.

    For further information regarding Member competitive activities, see "OGLETHORPE POWER CORPORATION – Competition."

Cooperative Structure

    The Members are cooperatives that operate their systems on a not-for-profit basis. Accumulated margins derived after payment of operating expenses and provision for depreciation constitute patronage capital of the consumers of the Members. Refunds of accumulated patronage capital to the individual consumers may be made from time to time subject to limitations contained in mortgages between the Members and RUS or loan documents with other lenders. The RUS mortgages generally prohibit such distributions unless (1) after any such distribution, the Member's total equity will equal at least 30% (40% in the case of Members that have the older form of RUS loan documents) of its total assets, or (2) distributions do not exceed 25% of the margins and patronage capital received by the Member in the preceding year and equity is at least 20% (the 20% equity requirement does not apply to Members that have the older form of RUS loan documents). (See "Members' Relationship with RUS" below.)

    Oglethorpe is a membership corporation, and the Members are not subsidiaries of Oglethorpe. Except with respect to the obligations of the Members under each Member's Wholesale Power Contract with Oglethorpe and Oglethorpe's rights under such Contracts to receive payment for power and energy supplied, Oglethorpe has no legal interest in, or obligations in respect of, any of the assets, liabilities, equity, revenues or margins of the Members. (See "OGLETHORPE POWER CORPORATION – Wholesale Power Contracts.") The revenues of the Members are not pledged as security to Oglethorpe but are the source from which moneys are derived by the Members to pay for power supplied by Oglethorpe under the Wholesale Power Contracts. Revenues of the Members are, however, pledged under their respective RUS mortgages or loan documents with other lenders.

Rate Regulation of Members

    Through provisions in the loan documents securing loans to the Members, RUS exercises control and supervision over the rates for the sale of power of the Members that borrow from it. The RUS mortgages of such Members require them to design rates with a view to maintaining an average Times Interest Earned Ratio and an average Debt Service Coverage Ratio of not less than 1.25 and an Operating Times Interest Earned Ratio and an Operating Debt Service Coverage Ratio of not less than 1.10, in each case for the two highest out of every three successive years.

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    The Georgia Electric Membership Corporation Act, under which each of the Members was formed, requires the Members to operate on a not-for-profit basis and to set rates at levels that are sufficient to recover their costs and to provide for reasonable reserves. The setting of rates by the Members is not subject to approval by any federal or state agency or authority other than RUS, but the Territorial Act prohibits the Members from unreasonable discrimination in the setting of rates, charges, service rules or regulations and requires the Members to obtain GPSC approval of long-term borrowings.

    Cobb EMC, Diverse Power Incorporated, an EMC, Mitchell EMC, Oconee EMC, Snapping Shoals EMC and Walton EMC have paid their RUS indebtedness and are no longer RUS borrowers. Each of these Members now has a rate covenant with its current lender. Other Members may also pursue this option. To the extent that a Member who is not an RUS borrower engages in wholesale sales or transmission in interstate commerce, it would be subject to regulation by FERC under the Federal Power Act.

Members' Relationship with RUS

    Through provisions in the loan documents securing loans to the Members, RUS also exercises control and supervision over the Members that borrow from it in such areas as accounting, other borrowings, construction and acquisition of facilities, and the purchase and sale of power.

    Historically, federal loan programs providing direct loans from RUS to electric cooperatives have been a major source of funding for the Members. Under the current RUS loan programs, interest rates are based on either Treasury rates or rates being paid on municipal bonds with comparable maturities. Certain borrowers with either low consumer density or higher-than-average rates and lower-than-average consumer income are eligible for special loans at 5%. Distribution borrowers are also eligible for loans made by FFB or other lenders and guaranteed by RUS. However, the availability and magnitude of RUS direct and guaranteed loan funds is subject to annual federal budget appropriations and thus cannot be assured. Currently, RUS loan funds are subject to increased uncertainty because of recent budgetary pressures faced by Congress. Oglethorpe cannot predict the amount or cost of RUS direct and guaranteed loans that may be available to the Members in the future.

Members' Relationships with GTC and GSOC

    GTC provides transmission services to the Members for delivery of the Members' power purchases from Oglethorpe and other power suppliers. GTC and the Members have entered into Member Transmission Service Agreements (the "MTSAs") under which GTC provides transmission service to the Members pursuant to a transmission tariff. The MTSAs have a minimum term for network service for current load until December 31, 2025. After an initial term ending in 2006, load growth above 1995 requirements may, with notice to GTC, be served by others. The MTSAs provide that if a Member elects to purchase a part of its network service elsewhere, it must pay appropriate stranded costs to protect the other Members from any rate increase that could otherwise occur. Under the MTSAs, Members have the right to design, construct and own new distribution substations. GTC has asked its members to execute extensions to the MTSAs to extend the terms to 2040. The extensions will also include similar opportunities for transmission service to be provided by others.

    GSOC has contracts with each of its members, including OPC and GTC, to provide to them the services that it purchases from GPC under the Control Area Compact, which Oglethorpe co-signed with GSOC. GSOC also provides operation services for the benefit of the Members through agreements with Oglethorpe, including dispatch of Oglethorpe's resources and other power supply resources owned by the Members.

    For additional information about the Members' relationship with GSOC, see "OGLETHORPE POWER CORPORATION – Relationship with GSOC."

Member Power Supply Resources

Oglethorpe Power Corporation

    Oglethorpe currently supplies a substantial portion of the Members' requirements. Each Member has a take-or-pay, fixed percentage capacity responsibility for all of Oglethorpe's existing resources. (See "OGLETHORPE POWER CORPORATION – Wholesale Power Contracts.") The Members are satisfying all of their requirements above Oglethorpe purchase obligations with purchases from other suppliers as described below.

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Contracts with SEPA

    The Members purchase hydroelectric power from the Southeastern Power Administration ("SEPA") under contracts that extend until 2016. In 2004, the aggregate SEPA allocation to the Members was 562 MW plus associated energy. Each Member must schedule its energy allocation, and each Member has designated Oglethorpe to perform this function. Pursuant to a separate agreement, Oglethorpe will schedule, through GSOC, the Members' SEPA power deliveries. Further, each Member may be required, if certain conditions are met, to contribute funds for capital improvements for Corps of Engineers projects from which its allocation is derived in order to retain the allocation.

Smarr EMC

    The Members participating in the facilities owned by Smarr EMC purchase the output of those facilities pursuant to long-term, take-or-pay power purchase agreements. Smarr EMC owns Smarr Energy Facility, a two-unit, 217 MW gas-fired combustion turbine facility (with 35 participating Members), and Sewell Creek Energy Facility, a four-unit, 492 MW gas-fired combustion turbine facility (with 31 participating Members). Smarr Energy Facility began commercial operation in June 1999, and Sewell Creek Energy Facility began commercial operation in June 2000.

GPC Block Purchase

    Twenty-nine Members have entered into long-term power supply contracts with GPC under which they will purchase an aggregate of 675 MW of capacity and associated energy. Delivery under the agreements began January 1, 2005.

Other Member Resources

    Members are obtaining their other power supply requirements from various sources. Thirty Members have entered into contracts with third parties for all of their incremental power requirements, with remaining terms ranging from 6 to 13 years. The other Members use a portfolio of power purchase contracts to meet their requirements.

    Oglethorpe has not undertaken to obtain a complete list of Member power supply resources. Any of the Members may have committed or may commit to additional power supply obligations not described above.

    For further information about Members' activities relating to their power supply planning, see "OGLETHORPE POWER CORPORATION – Competition."

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ENVIRONMENTAL AND OTHER REGULATION

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 or changes or delays in the location, design, construction or operation of new 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.

    Compliance with environmental standards will continue to be reflected in Oglethorpe's capital expenditures and operating costs. Oglethorpe made environmental-related capital expenditures of $4 million in 2004 and forecasts expenditures of approximately $6 million, $10 million and $43 million in 2005, 2006 and 2007, respectively, to maintain and achieve compliance with current and anticipated environmental requirements. For a further discussion of expected future capital expenditures to comply with environmental requirements and regulations, see "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Financial Condition – Capital Requirements."

Clean Air Act

    Environmental concerns of the public, the scientific community and Congress have resulted in the enactment of legislation that has had and will continue to have a significant impact on the electric utility industry. The most significant environmental legislation applicable to Oglethorpe is the Clean Air Act. One of the purposes of the Clean Air Act is to improve air quality by reducing the emissions of sulfur dioxide and nitrogen oxides from affected utility units, which include the coal-fired units at Plants Wansley and Scherer.

    Sulfur dioxide reductions are being imposed through a sulfur dioxide emission allowance trading program. Allowances are issued by the U.S. Environmental Protection Agency ("EPA") to impose stringent reductions on all affected units. The aggregate emissions of sulfur dioxide from all affected units are now capped at 8.9 million tons per year. Emission allowances, each of which gives the holder the authority to emit one ton of sulfur dioxide during a particular calendar year or thereafter, are issued 30 years in advance and are transferable. Oglethorpe is now complying with this program by using lower-sulfur fuel, coupled with the use of emission allowances (issued, banked or purchased, if needed). Installation of flue gas desulfurization equipment ("scrubbers") remains a possibility for compliance in the future, as is discussed in more detail below.

    Reductions in nitrogen oxides emissions are also being imposed, under Georgia's State Implementation Plan as part of Georgia's effort to bring the metropolitan Atlanta area, currently classified as a "severe nonattainment area" pursuant to the 1-hour National Ambient Air Quality Standards ("NAAQS") for ozone, into attainment. As part of this Plan, both Plants Wansley and Scherer were included in nitrogen oxides emissions averaging plans, which required the co-owners of the plants to install new control equipment at both plants. Significant reductions in nitrogen oxides emissions were achieved, due to the selective catalytic reduction systems installed at Plant Wansley and the separated overfire air systems installed at Plant Scherer.

    A number of recently finalized regulations, proposed regulations and other actions could result in more stringent controls on all emissions, including utility emissions. The actions that appear to be the most significant are described below.

    EPA has tightened the NAAQS for both ozone and fine particulate matter, an action that could affect any source that emits nitrogen oxides and sulfur dioxide, including utility units. With respect to the ozone NAAQS, EPA must harmonize provisions in the Clean Air Act imposing the old 1-hour ozone NAAQS with EPA's new 8-hour standard before implementing the new standard. Based on the last three years of monitoring data, the State of Georgia believes that the Atlanta area has now attained the 1-hour ozone NAAQS

13

and, therefore, on February 1, 2005, applied to EPA for redesignation as attainment.

    EPA has designated areas as attainment or nonattainment with these 8-hour NAAQSs. It also has published a portion of the rules implementing the new 8-hour NAAQS. The Atlanta ozone nonattainment area has been expanded from the original 13 counties (for the 1-hour NAAQS) to a 20-county area (for the 8-hour NAAQS). Macon, which has been separately designated as an 8-hour ozone nonattainment area, includes Plant Scherer within its boundaries. Under the implementation provisions of the new 2004 rule, EPA announced that the 1-hour ozone standard will be revoked on June 15, 2005. For the new 8-hour ozone nonattainment areas, state implementation plans, including new emission control regulations necessary to bring those areas into attainment could be required as early as 2007. Therefore, further reductions of nitrogen oxides from Plants Wansley and/or Scherer may be required. Some or all of these reductions may come through implementation of the interstate air quality rulemaking discussed below. The impact of these new designations will depend on the development and implementation of any other applicable regulations as needed for attainment and cannot be determined at this time.

    In January 2005, EPA issued its final nonattainment designations for the fine particulate matter NAAQS. Plants Wansley and Scherer were included in the designated areas. EPA plans to propose a fine particulate matter implementation rule in 2005 and to finalize such rule in 2006. In order to achieve compliance by 2010, if no extensions are granted, state implementation plans addressing the nonattainment designations may be due by 2008 and could require reductions in sulfur dioxide and nitrogen oxide emissions from power plants. The impact of the fine particulate matter designations will depend on the development and implementation of applicable state implementation plans and associated regulations and therefore cannot be determined at this time. In addition, the possibility exists that the fine particulate matter NAAQS may be tightened even further in the coming years, which could lead to more stringent controls for sulfur dioxide and nitrogen oxide emissions on power plants.

    In 1998, EPA issued a regulation calling for regional reductions in nitrogen oxides emissions from 22 states, including Georgia, which imposed a fixed cap on nitrogen oxides emissions from such states. In April 2004, EPA finalized a new regional nitrogen oxides reduction rule for Georgia, which specified a May 2007 compliance deadline. In October 2004, however, EPA announced that it would stay the implementation of this rule for Georgia, while it conducts a rulemaking to consider certain issues raised in a petition for reconsideration of the April 2004 rule. Georgia's implementation plan for this regulation will depend on how this proposed rulemaking is finalized. Therefore, it is not yet known what additional controls, if any, will be needed at Plants Wansley and/or Scherer to comply with this regional nitrogen oxides reduction program. However, to achieve the reductions that may be necessary under these rules, the co-owners of Plant Scherer converted Scherer Units No. 1 and No. 2 from bituminous coal to sub-bituminous coal, substantially reducing the nitrogen oxides emissions from these units.

    In March 2005, EPA finalized a clean air interstate rule for ozone and fine particulate matter that will require emissions reductions in sulfur dioxide and nitrogen oxides in most eastern states, including Georgia, by establishing a market-based cap and trading program with emission budget caps for each affected state. Although announced as final, the rule is still subject to challenge. One possible result of the rule may be to require year round reductions in emissions of sulfur dioxide and nitrogen oxides from power plants. The caps would be implemented in two phases. The first phase for nitrogen oxides caps would become effective in 2009 and for sulfur dioxide caps in 2010, each followed by a second phase in 2015. The rule may require additional controls at Plants Wansley and/or Scherer in order to comply with the state implementation plan to be developed to meet emission caps established in the rule for Georgia. The rule could affect Georgia's plans for attaining the NAAQS for ozone and fine particulate matter discussed above.

    In 1999, EPA promulgated a new regional haze rule, which would have affected certain sources that emit nitrogen oxides or sulfur dioxide and that may contribute to the degradation of visibility in mandatory federal Class I areas, including some utility units. As a result of challenges to this rule, however, the Court of Appeals has vacated part of the rule, remanding it back to EPA for further consideration consistent with its opinion. In response, EPA proposed revised rules in May 2004, which it announced it plans to finalize in April 2005. Until such rules are finalized and implemented by the State of Georgia, Oglethorpe will not know what controls, if any, must be installed at Plants Wansley and/or Scherer to comply with this rule.

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    Although EPA had decided not to impose a new NAAQS for sulfur dioxide, that decision has been remanded to EPA for further rulemaking, so it is still possible that a new short-term standard for sulfur dioxide could be established.

    In March 2005, EPA finalized a regulation that would control emissions of mercury, by creating a market-based cap and trade program that would reduce emissions of mercury in two phases, with the first phase becoming effective in 2010 and the second in 2018. Although announced as final, the rule is still subject to challenge. The rule could require additional controls at Plants Wansley and/or Scherer in order to comply with the state implementation plan to be developed to meet emission caps established in the rule for Georgia.

    Because (1) several of these proposed or final Clean Air Act regulations could require control of the same emissions, (2) the compliance requirements are uncertain, and (3) specific control technologies affect multiple emissions, Oglethorpe cannot determine the aggregate effect of these or future regulations. For a discussion of the factors that will affect future compliance decisions, see "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Financial Condition – Capital Requirements – Capital Expenditures."

    Congress is currently considering legislation to amend the Clean Air Act, some versions of which may impose more stringent emissions limitations on power plants. The impact of any amendment would depend upon the specific requirements enacted and cannot be determined at this time.

    Domestic efforts to limit emissions of carbon dioxide from power plants are increasing. For example, Attorneys General from eight states and the Corporation Counsel of New York filed a complaint in the U.S. District Court for the Southern District of New York against Southern Company and four other electric power companies in July 2004. The complaint alleges that the companies' emissions of carbon dioxide contribute to global warming, which the Plaintiffs claim is a public nuisance. Although not named in the complaint, Oglethorpe believes this claim is without merit. While the outcome of this matter cannot be determined at this time, an adverse judgment could result in substantial capital expenditures at Plants Wansley and/or Scherer, which Oglethorpe co-owns with Georgia Power Company ("GPC"), a subsidiary of the Southern Company.

    Pursuant to the Framework Convention On Climate Change, international discussions for limiting emissions of carbon dioxide continue. Whether such discussions will lead to limits for carbon dioxide in the U.S. in the future, through ratification of the Kyoto Protocol, other treaties or domestic legislation is unknown. Should such reductions be imposed in the future, substantial capital expenditures could be required at Oglethorpe's fossil fuel-fired facilities.

    On November 3, 1999, the United States Justice Department, on behalf of EPA, filed lawsuits against GPC and some of its affiliates, as well as other utilities. The lawsuits allege violations of the new source review provisions and the new source performance standards of the Clean Air Act at, among other facilities, Scherer Unit Nos. 3 and 4. Oglethorpe is not currently named in the lawsuits and Oglethorpe does not have an ownership interest in the named units of Plant Scherer. However, Oglethorpe can give no assurance that units in which Oglethorpe has an ownership interest will not be affected by this or a related lawsuit in the future. The resolution of this matter is highly uncertain at this time, as is any responsibility of Oglethorpe for a share of any penalties and capital costs required to remedy any violations at facilities co-owned by Oglethorpe.

    In December 2002, the Sierra Club, Physicians for Social Responsibility, Georgia Forest Watch and one individual filed suit in Federal Court in Georgia against 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 combined cycle units in which Oglethorpe does not have an ownership interest. This civil action requests injunctive and declaratory relief, civil penalties, a supplemental environmental project and 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 the opacity limits at the coal-fired units. However, in March 2005 the U.S. Court of Appeals for the Eleventh Circuit allowed an immediate appeal of the Court's Order. While Oglethorpe believes that Plant Wansley has complied with applicable laws and regulations, resolution of this matter is uncertain at this time, as is any responsibility of Oglethorpe for a share of any penalties or other costs that might be assessed against GPC.

    In January 2003, the Sierra Club appealed an unsuccessful challenge to an air operating permit for Chattahoochee to the United States Court of Appeals

15

for the Eleventh Circuit. Oglethorpe acquired this facility in the second quarter of 2003. (See "OGLETHORPE POWER CORPORATION – Power Supply Business.") Oglethorpe intervened in the appeal on behalf of EPA. In May 2004, the Court ruled in favor of the Sierra Club, invalidating EPA's denial of the petition and remanding the matter to EPA for further consideration. Although Oglethorpe believes that the order does not affect facility operations pending further consideration and that a favorable outcome in this matter is likely, an unfavorable ruling could temporarily affect the ability of the facility to continue operations.

    Depending on the final outcome of these developments, and the implementation approach selected by EPA and the State of Georgia with respect to environmental regulations, significant capital expenditures and increased operation expenses could be incurred by Oglethorpe for the continued operation of Plants Wansley and/or Scherer.

    Compliance with the requirements of the Clean Air Act may also require increased capital or operating expenses on the part of GPC. Any increases in GPC's capital or operating expenses may cause an increase in the cost of power purchased from GPC. (See "OGLETHORPE'S POWER SUPPLY RESOURCES – Power Purchase and Sale Arrangements – Power Purchases" and "THE MEMBERS AND THEIR POWER SUPPLY RESOURCES – Member Power Supply Resources – GPC Block Purchase.")

Other Environmental Regulation

    EPA determined in 2000 that although coal ash should continue to be considered non-hazardous under the Resource Conservation and Recovery Act, national regulations are warranted. Depending on the outcome of such rulemaking, which is now expected in 2007, substantial additional costs for the management of these wastes might be required of Oglethorpe.

    Under the Clean Water Act, EPA and state environmental agencies are developing total maximum daily loads ("TMDLs") for certain impaired state waters. The establishment of TMDLs and/or additional measures to control non-point source pollution may result in a tightening of limits in water discharge permits for power plants, including Plants Wansley and Scherer. As the impact will depend on the actual TMDLs and the corresponding permit limitations that are established, the effects of such developments cannot be predicted at this time.

    Oglethorpe is subject to other environmental statutes including, but not limited to, the Georgia Water Quality Control Act, the Georgia Hazardous Site Response Act, the Toxic Substances Control Act, the Endangered Species Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Emergency Planning and Community Right to Know Act, and to the regulations implementing these statutes. Oglethorpe does not believe that compliance with these statutes and regulations will have a material impact on its financial condition or results of operations. Changes to any of these laws, some of which are being reviewed by Congress, could affect many areas of Oglethorpe's operations. Although compliance with new environmental legislation could have a significant impact on Oglethorpe, those impacts cannot be fully determined at this time and would depend in part on the final legislation and the development of implementing regulations.

    Oglethorpe, or generating facilities in which Oglethorpe has an interest, are also subject, from time to time, to claims relating to operations and/or emissions, including actions by citizens to enforce environmental regulations and claims for personal injury due to such operations and/or emissions. Oglethorpe cannot predict the outcome of current or future actions, the responsibility of Oglethorpe for a share of any damages awarded or any impact on facility operations. Oglethorpe, however, does not believe that the current actions will have a material adverse effect on its financial position or results of operations.

Nuclear Regulation

    Oglethorpe is subject to the provisions of the Atomic Energy Act of 1954, as amended (the "Atomic Energy Act"), which vests jurisdiction in the Nuclear Regulatory Commission ("NRC") over the construction and operation of nuclear reactors, particularly with regard to certain public health, safety and antitrust matters. The National Environmental Policy Act has been construed to expand the jurisdiction of the NRC to consider the environmental impact of a facility licensed under the Atomic Energy Act. Plants Hatch and Vogtle are being operated under licenses issued by the NRC. All aspects of the operation and maintenance of nuclear power plants are regulated by the NRC. From time to time, new NRC regulations require changes in the design, operation and maintenance of existing nuclear reactors. Operating licenses issued by the NRC are subject to revocation, suspension or modification, and

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the operation of a nuclear unit may be suspended if the NRC determines that the public interest, health or safety so requires. The operating licenses issued for each unit of Plants Hatch and Vogtle expire in 2034 and 2038 and 2027 and 2029, respectively. The licenses for Plant Hatch were extended to their current expiration dates in January 2002.

    Pursuant to the Nuclear Waste Policy Act of 1982, as amended, the federal government has the regulatory responsibility for the final disposition of commercially produced high-level radioactive waste materials, including spent nuclear fuel. This Act requires the owner of nuclear facilities to enter into disposal contracts with the Department of Energy ("DOE") for such material. These contracts require each such owner to pay a fee, which is currently one dollar per MWh for the net electricity generated and sold by each of its reactors.

    Contracts with DOE have been executed to provide for the permanent disposal of spent nuclear fuel produced at Plants Hatch and Vogtle. DOE failed to begin disposing of spent fuel in 1998 as required by the contracts, and GPC, as agent for the co-owners of the plants, is pursuing legal remedies against DOE for breach of contract.

    Plants Hatch and Vogtle currently have on-site spent-fuel wet storage capacity and Plant Hatch has an on-site dry storage facility. The on-site dry storage facility for Plant Hatch became operational in 2000 and can be expanded to accommodate spent fuel through the life of the plant. Plant Vogtle's spent fuel pool storage is expected to be sufficient until 2015. Oglethorpe expects that procurement of on-site dry storage capacity at Plant Vogtle will commence in sufficient time to maintain full-core discharge capability to the spent fuel pool. (See Note 1 of Notes to Financial Statements.)

    For information concerning nuclear insurance, see Note 8 of Notes to Financial Statements. For information regarding NRC's regulation relating to decommissioning of nuclear facilities and regarding DOE's assessments pursuant to the Energy Policy Act for decontamination and decommissioning of nuclear fuel enrichment facilities, see Note 1 of Notes to Financial Statements.

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ITEM 2. PROPERTIES

Generating Facilities

    The following table sets forth certain information with respect to Oglethorpe's generating facilities, all of which are in commercial operation.

⁽¹⁾

These plants do not operate under operating licenses similar to those granted to nuclear units by the NRC and to hydroelectric plants by FERC.

⁽²⁾

Nominal plant capacity identified in the Power Purchase and Sale Agreement with Doyle I, LLC. (See "The Plant Agreements – Doyle" below.)

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Plant Performance

    The following table sets forth certain operating performance information of each of Oglethorpe's generating facilities: