ML17266A171

Forwards General Info Section of Application for OL

ML17266A171
Person / Time
Site:	Saint Lucie
Issue date:	03/24/1980
From:	Robert E. Uhrig FLORIDA POWER & LIGHT CO.
To:	Harold Denton Office of Nuclear Reactor Regulation
Shared Package
ML17208A465	List: ML17208A464 ML17266A171
References
L-80-102, NUDOCS 8004220239
Download: ML17266A171 (100)

Text

FLORIDA POWER II, LIGHT COMPANY March 24, 1980 L-80-102 Mr. Harold R. Denton, Director Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C. 20555

Dear Mr. Denton:

Re: St. Lucie Unit 2 Docket No. 50-389 Application for Operating License Final Safety Analysis Report and Environmental Re ort - 0 eratin License In accordance with the Atomic Energy Act of 1954 as amended, and the rules and regulations issued pursuant thereto, Florida Power 5 Light Company submits the following information as required by 10 CFR 50.30, 10 CFR 50.33, 10 CFR 50.34, and 10 CFR 50.51.

Very truly yours, Robert E. Uhrig Vice President Advanced Systems 8 Technology REU/JRP/ah cc: Harold F. Reis, Esquire PEOPLE... SERVING PEOPLE

BEFORE THE UNITED STATES NUCLEAR REGULATORY COMMISSION Docket No. 50-389 In the Matter of Florida Power R Light Company APPLICATION FOR LICENSES V

UNDER THE ATOMIC ENERGY ACT OF,1954 AS AMENDED for ST. LUCIE PLANT UNIT NO. 2 March , 1980

FLORIDA POWER 2 LIGHT COMPANY APPLICATION FOR OPERATING LICENSE AND OTHER APPROPRIATE LICENSES AS REQUIRED General Information

1) Name of A licant Florida Power 2 Light Company

2) Address of A licant 9250 W. Flagler Street (P. O. Box 529100 Miami, Florida Miami, Florida 33152)

3) Descri tion of Business and Or anizationof A licant Applicant is engaged in the electric utility business in the State of Florida. Applicant provides electric service in most of the territory along the east and lower west coasts of Florida including the Gape Canaveral area, the agricultural area around southern and eastern Lake Okeechobee, and portions of central and north central Florida (except most of the Jacksonville area, most of two other municipalities, and all of six other municipalities which have municipal systems).

1 As of December 31, 1979, Applicant served a total of 2,140,587 customers. As of the same date, net,utility plant after depreciation was $ 4,421,847,000 including nuclear fuel in process of refinement, conversion, enrichment and fabrication. Revenues for the year ending December 1979 were $ 1,933,937,000.

Applicant is a corporation duly authorized and existing under the laws of the State of Florida. The names and post office addresses of its directors and principal officers, all of whom are citizens of the United States, are as follows:

NAMES AND ADDRESSES OF DIRECTORS M.-P. Anthony, President, Anthony', Inc., Post Office Box=-2886, West Palm Beach, Florida 33402 George F. Bennett, President, State Street Investment Corporation, 225 Franklin Street, Boston, Massachusetts 02110 David Blumberg, President, Planned Development Corporation, 1440 Brickell Avenue, Miami, Florida 33131 Jean McArthur Davis, President, McArthur Dairy, Inc., 6851 N.E. 2 Avenue, Miami, Florida 33138 John J. Hudiburg, President, Florida Power R Light Company, 9250 West Flagler Street, Post Office Box 529100, Miami, Florida 33152 Robert B. Knight, 220 Arvida Parkway, Coral Gables, Florida 33156 John M. McCarty, 111 Boston Avenue, Ft. Pierce, Florida 33450 Marshall McDonald, Chairman of the Board, Florida Power 2 Light Company, 9250 West Flagler Street, Post Office Box 529100, Miami, Flor ida 33152 Ed H. Price, Jr. President, The Price Company, Inc. (Ellis First National Bank Building of Bradenton, Suite N417), Post Office Box 9270, Bradenton, Florida 33506 Lewis E. Wadsworth, Post Office Box 428, Bunnell, Florida 32010 Gene A. Whiddon, President, Causeway Lumber Company, Inc., Post Office Box 21088, Ft. Lauderdale, Florida 33335 NAMES AND ADDRESSES OF OFFICERS Marshall McDonald Chairman of the Board J. J. Hudiburg President E. A. Adomat Executive Vice President H. L. Allen Senior Vice President D. K. Baldwin Vice President E. L. Bivans Vice President M. C. Cook Vice President B. L. Dady Vice President 4 Assistant Secretary H. J. Dager, Jr. Vice President Tracy Danese . Vice President J. H. Francis, Jr. Vice President R. J. Gardner Vice President L. C. Hauck Vice President J. L. Howard Vice President R Treasurer L. C. Hunter Senior Vice President W. M. Klein Vice President A. D. Schmidt Vice President J. G. Spencer, Jr. Senior Vice President R. E. Talion Group Vice President R. E. Uhrig Vice President R. W. WaQ, Jr. Senior Vice President R Assistant Secretary

Astrid Pfeiffer Secretary H. P. Williams, Jr. Comptroller T. R. Crook, Jr. Assistant Comptroller R. A. Anderson Assistant Treasurer S. P. Kemp Assistant Secretary J. E. Moore Assistant Secretary The address of the above Officers is 9250 West Flagler Street, Post Office Box 529100, Miami, Florida 33152.

Applicant is not owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, and is not acting as agent or representative of any other. persons in making this Application; The Applicant's stock transfer agent has certified that as of the close of business December 31, 1979, records indicate that 173 foreign stockholders held 68,391.81 shares of common stock. Foreign stockholders constituted 0.48% of total common shareholders and-foreign-held stock constituted 0.16% of total common shares outstanding.

4) Class and Period of License A lied for Applicant requests a class 103 operating license for a period of 40 years from date of issuance. Applicant requests such additional source, special nuclear and by-product material licenses as may be necessary and appropriate to the operation of this facility.

5) Descri tion of Facili and Use to Which Facilit Will Be Put Applicant proposes to operate a nuclear reactor which will supply a turbine generator with a capability of 890 Mwe gross with associated-transformer, switchyard, supporting buildings and additional auxiliary systems and facilities as required for a Unit No. 2 output of 802 Mwe net. The nuclear steam supply system is a pressurized water reactor whose maximum output is 2700 Mwt. The design of the'balance of plant and related facilities will be such as to accommodate the maximum

thermal output of the nuclear steam supply system, consequently the major systems and components which bear significantly on the acceptability of the site, includin'g the engineered safeguards systems and the containment, have been evaluated for operation at a power level of 2700 Mwt. This project will be located on Hutchinson Island on the east coast of Florida. The project, (Units,1 R 2) and possible future additions will occupy approximately 100 acres of the site: the remainder willbe set aside for a conservation development program.

Attached hereto and made a part hereof is a Final Safety Analysis Report and an Environmental Report - Operating License which contain a description of the site and the facility; an analysis and evaluation of structures, systems, and components; and other material in accordance with the requirements of Sections 50.34 and 51.21 of the regulations of the Nuclear Regulatory Commission.

The proposed power plant is a necessary part of Applicant's continuing expansion of its facilities to provide for a steadily increasing demand for electric power by its customers.

6) Financial Qualifications Applicant's 1979 Annual Report and Financial 4 Statistical Repor t are set forth in attached Exhibit I.

The entire cost of the Applicant's share of the project will be paid for by Applicant from funds available from normal and regular sources for construction of additions to all types of its utility properties. Such funds're (1) treasury funds on hand; (2) funds available from internal sources, principally retained earnings, deferred taxes, investment tax credits - net and provisions for depreciation; (3) short term bank loans

and commercial paper; and (4) the sale of permanent securities when and as required.

Attached hereto as Exhibit II is a tabulation of the estimated cost of operating the facility.

At the end of the plant's useful lifetime, FPL will prepare a proposed decommissioning plan based on the available information and requirements. FPL has given serious consideration to the matter to date and estimates a decommissioning cost of approximately

$ 100,000,000. However, in order to maintain some degree of flexibility among the various decommissioning options, no specific plan has been chosen.

Applicant is able to borrow on a short term basis at the prime rate of interest or less. Bond issues sold since 1974 have been rated A by Moody's Investors Service and A+ by Standard dc Poor's Corporation (A since 1971, A+ since 1978).

Applicant will obtain appropriate property and liability insurance for this project and its fuel.

The above demonstrates Florida Power R Light Company's ability to obtain the funds necessary to cover the estimated costs of operation plus the estimated costs to safely decommission the facility.

V) Technical Qualifications Applicant has in operation two nuclear power units of 666 Mwe capacity each, known as Turkey Point Units No. 3 and No. 4, one nuclear power unit of VVV Mwe capacity known as St. Lucie Unit No. 1.

The extensive training program for engineering-and operating personnel for the Turkey Point Project and St. Lucie Unit 01 has been. expanded and continued as required to train personnel for St. Lucie Plant Unit 02.

Applicant has contracted with Combustion Engineering Corporation to design and fabricate the nuclear steam supply system. The turbine generator will be supplied by Westinghouse Electric Corporation.

Ebasco Services Incorporated will provide engineering and procurement services for the majority of items not furnished by Combustion Engineering and Westinghouse. Florida Power R Light will be responsible for construction services and. the administration of the Ebasco, Combustion Engineering and Westinghouse Contracts.

Combustion Engineering will supply the initial core (Batches A, B, and C) as well as Batches D, E, and F.

The technical qualifications of Combustion Engineering and Ebasco are summarized in Exhibit III attached.

The fuel load date of this unit is estimated to be October,30, 1982; the expected commercial operation date is estimated to be May 30, 1983.

The regulatory agencies having jurisdiction over the rates and services incident to the proposed activity is:

Federal Energy Regulatory Commission 825 North Capitol Street, ¹E.

Washington, D.C. 20426 Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32304

10) Publications Circulated in the Area (a) Trade Publications:

ELECTRIC LIGHT R POWER 1301 South Grove Avenue Barrington, Illinois 60010 ELECTRICAL SOUTH 1760 Peachtree Road, N.W.

Atlanta, Georgia 30309 ELECTRICAL WORLD 1221 Avenue of the Americas New York, New York 10020 (b) Daily News Publications:

COMMERCIAL RECORD 416 Clematis St.

West Palm Beach, Florida 33402 NEWS TRIBUNE P. O. Box 69 Fort Pierce, Florida 33450 PALM BEACH DAILYNEWS 265 Royal Poncianna Palm Beach, Florida 33480 PALM BEACH POST 2V51 South Dixie Highway West Palm Beach, Florida 33402 PALM BEACH TIMES 2V51 South Dixie Highway West Palm Beach, Florida 33402 MELBOURNE TIMES 2015 South Waverly Place Melbourne, Florida 32901 THE MIAMIHERALD 1 Herald Plaza Miami, Florida 33101 BOCA RATON NEWS P.O. Box 580 Boca Raton, Florida 33432

(c) Weekly News Publications:

COURIER HIGHLIGHTS P.O. Box 1486 Jupiter, Florida 33458 JENSEN BEACH MIRROR P.O. Box 787 Jensen Beach, Florida 33457 VERO BEACH PRESS-JOURNAL P.O. Box 1268 Vero Beach, Florida 32960

11) Restricted Data Pursuant to Section 50.37, Applicant agrees not to permit any individual to have access to Restricted Data until the Civil Service Commission shall have made an investigation and report to the Commission on the character, associations, and loyalty of such individual, and the Commission shall have determined =that permitting such person to have access to Restricted Data will not endanger the common defense and security.

12) Communications All communications to Applicant pertaining to this Application should be sent to Dr. R. E. Uhrig, Vice President, Florida Power dc Light Company, P.O. Box 529100, Miami, Florida 33152, with a copy to Mr.

Harold Reis of Lowenstein, Newman, Reis, Axelrad 4 Toll, 1025 Avenue, N.W., Washington, D.C. 20036. 'onnecticut FLORIDA POWER Bc LIGHT COMPANY By R. E. Uhrig

STATE OF FLORIDA )

) SS COUNTY OF DADE )

R. E. Uhrig, being first duly sworn, deposes and says: That he is Vice President of .FLORIDA POWER dc LIGHT COMPANY, the Applicant herein; and that the statements made in this Application are true and correct to the best of his knowledge, information and belief; and that he is authorized to execute the Application on behalf of said Applicant.

DATED: This 25th day of March, 1980.

Signed Subscribed and sworn to before me this 25th day of March, 1980.

Notary Public in and for the County of Dade, State of Florida IIOTAIIY PVBUC STATE OP FLORIOA et LAIIGC MY COMMISSIOII EXPIRES AUQVST 24, My Commission expires

EXHIBIT I 1979 Annual Report from the People of Florida Power & Light Company FPL: Generating Faith in the Future .,

About Our Business Of Our Future Florida Power & Light Company (FPL) to more than 2.1 million customers who There is a saying in the electric utility has been engaged in the electric utility live and work in FPL's 27,650-square- industry: "Today's power is yesterday' business since Dec. 28, 1925, the date of mile service area. Total capability of the foresight."

its incorporation under laws of the State 10 operating plants and two plants on With lead times for the planning and of Florida. The formation brought under reserve is 11,328 Mw. The average price construction of new generating facilities one banner an unlikely grouping of small per KWH for residential service in 1979 running up to 12 years, with regulation businesses electric generating plants, was 4.66 cents, indicative of many and inflation making new capacity almost ice houses, street car systems, a steam economies introduced over the years. prohibitively expensive and with fuel laundry and even an ice cream factory. It is this demonstrable effort to sources a matter of growing worldwide A crazy-quilt realm of 58 assorted provide the public with the best possible concern, that statement never has been enterprises, the new firm began service at the lowest feasible cost that more axiomatic than it is right now.

delivering electricity that first year to keeps FPL ahvays on the lookout for Amid that backdrop of unpleasant some 86,500 scattered customers. At better and more efficient ways to current events, FPL is pressing foward the time, total generating capacity was produce electricity in the decades ahead. in its public responsibility of anticipating 156 Megawatts (Mw), and average price Ifthis brief history shows anything at and meeting tomorrow's energy needs.

for residential service was 8.01 cents per all, it is that the 1980s, once they arrive, To this visionary task, FPL pledges its Kilowatt Hour (KwH). are apt to be as different from the '70s as continuing investment of the time, the From that modest beginning, FPL has the Depression-ridden '30s were from talents and the energies of the emerged as one of Ainerica's foremost the Roaring '20s. Maybe better, maybe Company's employees, officers and investor-owned electric utilities. worse, but certainly not without directors. For more about these Today, the Company supplies service challenge and opportunity. concerted efforts, please turn to page 4.

In Our Report Northeastern 2 Chairman's Letter Division 4 Preview: FPL Enters the Eighties 8 Review: The Year 1979 ~ Putna 17 Five-Year Summary of Operations ~ Palalka 18 Discussion of Operating Results 19 Opinion of Accountants Daytona Beach 19 Financial Section Contents 36 Information for Investors Corporate Leadership inside back cover Sanford I

Concerning Our Photography apo Canaveral 0

Throughout this report, the Corporate character of FPL is embodied in the theme, "Generating Faith in the Future." To illustrate the magnitude of the building done in the past by those who created our present, photos of each plant in the Company's generating system are presented on pages 8-15.

Then, to augment that pictorial series, another set of photos on pages 5 and 7 shows some of the groundwork being laid at FPL today by those who are planning and building our future.

a Manatee Pastern St.i.ucio Western DivisIon n On Our Cover Division A splendid new day dawns over Fort Mycrs Power Martin qiviora Plant on the Caloosahatchec River in Florida's Sarasota 0 prospering southwest region. West Palm Beach Here's Our Address Fort Myors Florida Power & Light Company Network of FPL 9250 tv. Flagler St. Generating Plants P.O. Box 529100 ~ Division Offices 'outheastern s audordalo Miami, Fla. 33152 Division For Lauderdale Telephone: 305/552-3552 ~ Generating Plants

~ Port Southern r Eve rgfados Dlvfsion Cutler rkoy Point

Financial Highlights Percentage (Thousands Except Per Share Data) 1979 1978 Change Operating Revenues . $ 1,933,937 $ 1,647,226 17 Fuel Expenses . $ 812,898 $ 551,376 47 Total Operating Expenses.............. $ 1,632,133 $ 1,328,529 23 Operating Income $ 301,804 $ 318,697 (5)

Net Income . $ 204)668 $ 211,241 (3)

Common Shares Outstanding Average .. 40,524 40,120 1 Earnings Per Share......... $ 4.22 $ 4.54 (7)

Dividends Paid Per Share .............. $ 2.32 $ 2.00 16 Total UtilityPlant $ 5,458,513 $ 4,983,794 10 Capital Expenditures . $ 574,825 $ 472,830 22 External Funds . $ 249,220 $ 151,866 64 Book Value Per Share $ 34.31 $ 32.49 6 Market Price Per Share (High).......... 28 7/8 29 3/8 Market Price Per Share (Low) .......... 24 1/8 23 5/8 Statistical Highlights Cost of Oil Burned (Per Barrel) ......... $ 17.47 $ 12.33 42 Customers Year End . 2,140,587 2,032,298 5 KwH Sales (Thousands) ...............

41,965,810 40,602,076 3 KwH Use Per Customer Residential ... 11,354 11,790 (4)

Revenue per KwH Residential (Cents) . 4.GG 4.10 14 Employees Year End . 10,337 9,750 6 Mw Capability at Time of Summer Peak .. 10,957 10,886 1 Mw Peak Load Summer ............. 8,G50 8,345 4 Mw Peak Load Winter .............. 8,791 8,617 2 Percentage Oil Generation............. 55.2 50.8 Percentage Nuclear Generation......... 26.0 29.9 Percentage Natural Gas Generation ..... 18.8 19.3 The FPL Dollar / Where It Comes From 1978 35'5ir 1979 Reeideedel 664 51ir Residential Commercial Commercial IeduelIIel 64 h 6ir Industrial Other 9e 8ir Other The FPL Dollar / Where It Goes Fuel 411!

tge Taxes Taxes 15it 12ir Payroll and Benefits Payroll and Benefits 11S Depreciation gs Depreciation 8'nterest art Interest 6ir 7'ividends 6e Dividends Retained Earnings 4rr 6e Retained Earnings Other art 7e Other 1/FPL

My Fellow Investors Looking back on 1979, we can see by management analysis and decision. In and 19 percent natural gas. This has ample evidence that FPL continued to your own enlightened self-interest you consistently produced for our residential operate soundly and the Florida economy should participate actively with us in the customers electric rates that run at or remained healthy. That's the good news. political process. below the national average. Compared However, there is bad news too. The Nowhere is this need for cooperative with other Florida utilities, our rates present fuel adjustment clause prevents and coordinated activity greater than in have consistently ranked among the our Company from recovering millions of the political processes that affect fuel lowest one-third.

dollars of fuel price increases. This is decisions. Last year we reported fuel Now, however, circumstances largely due to the lag in application of the costs that represented about one-third of threaten the adequate, reliable and fuel adjustment. In theory, recovery the outgoing FPL dollar. Today that economical electric service we'e long would come with a corresponding decline figure is over 40 percent. delivered to our customers. These in fuel costs to pre-1979 levels. But I In the past, FPL's fuel planning was circumstances are largely political, haven't heard one rational observer generally dictated by geography and our statutory and regulatory. And they seem predict such a decline. desire to ho! d down the rates paid by to penalize us for the very same policies You will find details of our stewardship customers. Geography precluded coal. we adopted to benefit our customers.

over your investment in the following And since imported oil used to be a For example, we could have had pages of this 1979 Annual Report. But as bargain, it was economical for us to build national legislation to encourage you read, remember that your for imported oil as our primary fuel. exploration for and production of Company's operations and results are Economics and foresight also led to domestic oil. Instead, we have legislation often more greatly influenced by political our diversified fuel mix. Currently we the so-called "windfall profits tax" opportunists and bureaucratic diAtat than use 55 percent oil, 26 percent nuclear that willactually strengthen OPEC.

We could have had legislation and regulation designed to expedite the approval and construction of nuclear plants. Instead, we have legislation that encourages frivolous intervenor delays by offering to pay the w~

intervenors'xpenses out of taxpayer money. And we have Administration spokesmen damn the nuclear option with faint No wonder construction of additional prai~

nuclear plants is considered an unacceptable financial risk by almost all American utilities today.

This brings us to coal. And we are told U.S. coal resources may equal a 400-year supply. We at FPL have planned that plants we start in the 1980s willbe coal-fired. But there are several major concerns about heavy reliance on coal.

~ First, the Administration is a house divided. While DOE pushes forward on coal, EPA and OSHA hold back.

Excessively restricting safety and environmental regulations hobble the increased use of coal.

~ Between coal in the ground and coal in the hopper car comes the miner.

And a union tom by charges of past FFL Chairman Marshall McDonald taking firsthand look at fhmpa Electric Company's Big Bend coal plant.

Special credit is extended to Tampa Electric Co.

for its cooperation.

2/FPL

ption and present weakness. limit. The first course would leave many will actually increase demand for ildcat" strikes have been customers out of work and in the dark. electricity. Voluntary conservation can commonplace. And in dealing with The second would incur hundreds of only moderate the increasing need.

labor, the Washington Administration millions of dollars in penalties, an added Mandatory conservation might do has shown little sign of spine. cost that would burden customers with somewhat better. But the price would be

~ Ifthe coal does get mined, it must be much higher bills. an intolerable erosion of personal liberty, transported on railroad facilities and We must plan with the possibility ever and a cruel drop in the quality of life.

equipment that are already creaking before us that such proposals can All this clearly indicates that our does not have what it really needs-nation'till and groaning. Can railroads raise become law. How, for example, could we capital needed for construction and meet this 1990 deadline? Must we just a policy that focuses on energy improvement? Can they do it in time? write off something like $ 1.5 billion of production. A policy that coordinates

~ Coal can be burned only under undepreciated investment in oil-fired regulatory actions, and measures them environmental restrictions so plants? Must we rush to build new coal by cost/benefit standards. A policy that excessive that they cause staggering units at an estimated cost of $ 10 billion? replaces exotic energy fantasies with the increases in capital and operating When we consider Florida's growth, the here-and-now realities of coal and costs. These increases fuel inflation link between electricity and living nuclear energy. A policy that allows and swell bills paid by ultimate standards, and the capital and resource Americans to make their own free customers. requirements for such a program, it is choices in a market environment, where

~ These same excessive requirements only honest to say, "We just can't get energy prices truly reflect energy costs.

raise physical and chemical there from here." How can we get such a positive policy?

obstacles, too. As a result, new coal Still, we must do what we can. We'e The answer lies in one fortunate fact:

plants are often available for rising to the challenge in several this is a national election year.

service less than 60 percent of the time innovative ways. One way is by testing a This gives you, as an individual, an

~ There is opposition to coal-fired technology to modify our oil-burning opportunity to move our government plants that is just as well organized units to burn a mixture of finely toward a sane energy policy.

and unreasoning as the opposition to powdered coal suspended in oil. We'e You can demand of incumbent nuclear plants. It usually involves the pioneering with coal-oil proportions well officeholders that"oppressive and costly very same people. Their obvious beyond those tried before. We'l invest restrictions which hobble energy 1 isn't really a "dean-energy" more than $ 14 million on this test, but it production be removed.

ion; their goal is a "no-energy" could save our customers as much as $ 87 You can ask each candidate for office ation, to match their no-growth, million per year. And our dependence on how he stands on energy matters. Press back-to-the-1800s philosophy. imported oil could be reduced by 16 for specifics. Don't swallow the usual

~ The Interstate Commerce miHion barrels a year. campaign generalities. Listen for key Commission indicates that railroad One way the customer can help is words and phrases that simply tariffs should make the delivered energy conservation. Our campaigns camouflage new taxes, new regulations, cost of coal equal the delivered cost directed at builders and customers are ~

new subsidies and new bureaucracies to of oil at the same destination. Add showing measurable effects. We hope to administer them.

the cost of over-regulation and coal achieve a sufficient reduction by 1990 to Then, vote your convictions. If energy won't give utility customers any equal the production of two generating is not important enough to your personal bargains. plants. By not having to build those life, to your economic well-being, for you The very nature of the utility business plants, the company's capital burdens will to express concern about it to candidates and today's fuel crises underscore the be eased... and so willour customers'uture for office, you can only expect more of importance of careful planning. But the bills. the muddle-headed fumbling thus far government, which should be facilitating However, we must not delude displayed by our political establishment.

the process, keeps getting in the way of ourselves into thinking our country or sound planning and productive action. our state can conserve its way out of One recent Administration proposal the energy crisis. Population grows.

would have forced utilities like FPL to Demand grows. Declining oil supplies reduce our oil use 50 percent by 1990. Marshall McDonald Otherwise we would have faced a harsh Chairman of the Board choice: generate less electricity than our February 8, 1980 customers need, or use more oil than the e

FPL/3

Charting a Course into the Eighties Building for the future is a ticklish had done years earlier along a succession iVIoreover, the wise use of business business. of westward-moving frontiers, they profits benefits everyone in American It ahvays has been and probably succeeded in turning those Great society stockholders, employees, ahvays will be. American dreams of a better tomorrow consumers, producers and, yes, even Because it takes foresight and into a self-fulfillingprophecy. government by providing income for fortitude two decidedly uncommon Sure, there were to be problems along pension and insurance funds and tax virtues, rarely found in combination the way. There ahvays are. And revenue for-our Federal Government.

plus lots of planning, a little luck and, solutions would be neither easy nor For all the criticism of profit usually, a substantial bit of teamwork. painless. They never are. nowadays, the country needs more, not Together, these are what have made Yet, through it all, the fruit ofthose less, because more profit means more America click. labors still endures today, as does the employment and more productivity Certainly, it took just such a mixture to get FPL humming back in 1925 when the FPL goal unchanged after 54 years- which, in turn, means less inflation.

of finding improved ways to produce As all of us know only too well, there' new Company unified a collection of electricity for a growing population. an enormous inflation problem in our properties described by one observer as land. President Carter acknowledged "held together with wire and rust." Only the times somehow have changed. that in his 1979 economic message to The venture entailed obvious risk. Congress, saying, "The corrosive effects Uncertainty, then as now, was imposing; Many Challenges Remain of inflatio eat away at the ties that bind know-how, lacking; lights, flickering; and While we still face challenges plenty us together as a people."

the work itself, as mind-boggling as it of them, in fact we as a people seem to That notwithstanding, it remains in was back-breaking. have lost sight of how "pioneering spirit" high political style for the American Still, the outlook was considered once coped with adversity. citizenry, stung by progressively bigger downright promising. An air of optimism Essentially, the farsighted vision bites of inflation, to demand greater overshadowed everything else. America had of its future at one time has governmental "safeguards" and for been reduced to tunnel vision, a view government to respond by passing Manifest Destiny narrow enough to reveal just that which regulations to "protect" general welfare.

After all, wasn't the purpose of the is politically fashionable and expedient for new Company to provide reliable power The regulatory decrees which the short term. invariably follow, inevitably take money and light service to an area so For example, it has become politically geographically blessed that its destiny which otherwise could be spent on new chic for businesses, FPL among them, to plants, on new research and, in the long was manifest? be attacked for being "too profitable." run, on the creation of new jobs.

It was precisely the kind of challenge What's overlooked is that profit Or, on building for the future....

which would lead America to become the remains after all expenses are paid. It not most productive nation on earth and only is the return to those who invest Costly Tradeoff Americans to enjoy the highest standard money in the Company, but also provides This tradeoff has not been beneficial.

of living anywhere in the world. the means for modernizing and Owing largely to such exercises in Driven by hopes for brighter days expanding facilities, investing in new political expediency, a major portion of ahead, the early-day FPL pioneers technology and equipment and, what we as a nation save and invest in persisted in dreaming their impossible ultimately, providing more jobs and the future has been lost. And with it, dreams. And, just as waves of settlers ensuring greater future productivity. many of our ambitions and aspirations.

Customers Average KwH Sales (Biliions)

(MiBions) 2.65 2.40 49. 27 50 2.17 43.71 2.07 40.60 40 37. 53 i.80'88 34'3 1.74

'969

'75 '76 '77 '78 79 '80 '83 '86 '89 1969 75 '76 '77 '78 '79 '80 '83 '86 '89 4/FPL

Management's Discussion and Analysis of Operating Results 13.5% of the increase in 1979 operating property additions. The increase in revenues and reflect the rapid escalation maintenance expense in 1978 reflects in fuel costs in 1979. the first annual refueling, overhaul and Average revenue per KwH, including inspection of St. Lucie Unit No. l. An fuel adjustment revenue, for total extended outage to repair the turbine customers rose to 4.57 cents in 1979. rotor at Turkey Point Unit No. 3 and This compares to 4.02 cents in 1978, the additional expenditures for safety first full year the present rates were in reviews, investigations and regulations effect, and to 3.87 cents in 1977. resulting from the Three Mile Island Operating Expenses incident are reflected in 1979 expenses.

Total operating expenses increased by Net interchange power purchases wer'e

$ 304 million, or 23%, in 1979 and by $ 4.2 million in 1979, while in 1978

$ 163 million, or 14%, in 1978. The interchange deliveries, which are increases were primarily in fuel, other recorded as a reduction of other production including net interchange, production expenses, were $ 18.6 maintenance, depreciation and other tax million.

expenses. Depreciation Fuel Expense Increases in depreciation expense reflect The greater use of more expensive new properties placed in service.

oil-fired generation to meet the growing Depreciation expense in 1979 and 1978 system demand and to replace includes $ 4. 6 million and $ 5.8 million, generation during the refueling outages respectively, of amortization of the President John J. Hudiburg cancelled South Dade project costs of the Company's three nuclear units Despite substantial underrecovery of resulted in a 47.4% increase in fuel described in Note 6 Construction expense in 1979 following an 11% Program.

fuel costs in 1979, earnings per share were $ 4.22, as compared to $ 4.54 for increase in 1978. Ihxes 1978. Grow th in KwH sales and the rate The oil portion of fuel expense Fluctuations in total income taxes are relief granted in 1977 were primarily increased by $ 241.6 million, or 53.8%, in generally related to changes in income responsible for the improved earnings in 1979. A 3.1 million barrel (8.5%) excluding income taxes and the 1978. The following discussion focuses increase in consumption accounted for allowance for other funds used during on factors that have significantly affected $ 38.4 million of this increase, while construction. Income tax provisions the Company's results of operations for $ 203.2 million was due to a 41.6% were also affected by the reduction in the 1979 and 1978 when compared to the increase in the average price of oil federal corporate income tax rate from preceding year. burned. In 1978 the oil portion of fuel 48% to 46% effective in 1979. Taxes expense was $ 39 million higher than in other than income taxes have increased Operating Revenues 1977. The amount of oil consumed was primarily as a result of increased Increases in operating revenues are due up 4.7 million barrels (15%), but was revenues and additions to property.

to the following factors: partially offset by a temporary drop in Allowance for Funds Used

% Increase in the price of oil burned. During Construction (AFUDC)

Operating Revenues Higher unit prices for natural gas Total AFUDC increased in 1979 and 1978 1979 1978 added $ 13.3 million and $ 12 million, as a result of higher amounts of KwH sales 3.4% 8.2% respectively, to fuel expense in 1979 and construction work in progress (CWIP).

Fuel adjustment 1978. A new interruptible natural gas At December 31, 1979 the investment in and rate changes 13.9 4.2 supply contract was entered into in April St. Lucie Unit No. 2 and Martin Units Other 0.1 0.1 1979 at rates substantially higher than Nos.1 and 2 included in CWIP aggregated Total 17.4% 12.5% those under an expired contract, but less $ 932 million, up $ 256 million over a year than equivalent oil prices. ago. In addition, beginning in 1978 KwH sales increased primarily as a The monthly fuel adjustment charge is AFUDC was capitalized on nuclear fuel.

result of growth in the number of based on the cost of fuel used for Interest Charges and customers of 5.4% in 1979 and 4.9% in generation in the second previous Preferred Dividend Requirements 1978. KwH usage per customer declined month. This mismatch led to an Sales of long-term debt and preferred 2.1% in 1979, reflecting conservation underrecovery of fuel costs of $ 47.5 stock in 1979 and 1978, to finance a efforts of customers, following a 3. 3% million ($ 0.60 per share) in 1979, as portion of the Company's construction increase in per customer usage in 1978. compared to $ 3. 9 million in 1978. program, resulted in higher interest Residential customers used 3. 7% less Other Operation and expense and preferred dividend energy in 1979. 111aintenance Expenses requirements, portions of which were Fuel adjustment revenues in 1979 These expenses increased due to higher capitalized through AFUDC. Interest were $ 260.9 million, up $ 224.1 million, payroll and related employee benefits charges in 1977, 1978 and 1979 were or over 600% of the 1978 total of $ 36.8 costs, increases in the number of affected by a change in the method of million. These increases accounted for customers and the amount of electricity recording AFUDC.

generated, and the maintenance of new 18/FPL

Florida Power & Light Company and Subsidiaries Consolidated Summary of Operations, The Past Five Years (Thousands of Dollars Except Per Share Data) 1979 1978 1977 1976 1975 OPERATING REVENUES $ 1,933 987 $ 1.647.226 $ 1,464,584 $ 1.189,680 $ 1,182,644 OPERATING EXPENSES:

Fuel. 812,898 551,376 497,015 482,347 461,335 Other Operation. 263,732 216,653 187,011 178,127 160,151 Maintenance 99,490 85,865 67,579 67,062 59,646 Depreciation . 150,195 144,267 125,166 88,591 82,322 Income Taxes 156,044 198,163 171,098 85,368 114,822 Taxes Other Than Income Taxes.............. 149,774 132,205 117,807 96,972 87,558 Total Operating Expenses ................. 1 682 138 1.328,529 1,165,676 998,467 965,834 OPERATING INCOME . 301 804 318,697 298,908 191,213 216,810 OTHER INCOME (DEDUCTIONS):

Allowance for Funds Used During Construction .. 65,497 48,486 Allowance for Other Funds Used During Construction 30,006 20,319 16,009 Income Taxes . (34) 827 (1,558) 5,350 Other Net 1 209 3,382 (1,731)

(298) 1,005 (850)

Other Income Net .... 31,181 24,528 12,720 66.204 52,986 INCOME BEFORE INTEREST CHARGES...... 382 085 343,225 311,628 257,417 269,796 INTEREST CHARGES:

Interest Expense . 157,158 146,096 144,083 140,572 124,575 Allowance for Borrowed Funds Used During Construction (28,841) (14,112) (12,893)

Interest Charges Net . 128 817 131,984 131,190 140,572 124,575 ET INCOME . 204,668 211,241 180,438 116,845 145,221 REFERRED DIVIDENDREQUIREMENTS.... 33 711 29,138 27,653 22,378 20,066 ET INCOME APPLICABLE TO COMMON STOCK $ 170,957 $ 182,103 $ 152,785 $ 94,467- $ 125,155 Average Number of Common Shares Outstanding (in Thousands) . 40,524 40, 120 40,050 39,542 35,940 Earnings Per Share of Common Stock ........... $ 4.22 $ 4.54 $ 3.81 $ 2.39 $ 3.48 Common Stock Data Shares Outstanding, Year End Thousands .... 40,819 40,315 40,050 40,050 37,050 Dividends Paid Per Share . $ 2.32 $ 2.00 $ 1.66 $ 1.56 $ 1.435 Dividend Rate Year End. $ 2.40 $ 2.08 $ 1.76 $ 1.56 $ 1.46 Dividend Payout Percentage 55.0 44.1 43.6 65.3 41.2 Price/Earnings Ratio Year End ............. 5.9 5.8 7.1 11.6 7.7 Book Value Per Share End.............

Year $ 34.31 $ 32.49 $ 29.97 $ 27.81 $ 27.21 Operating and Financial Statistics KwH Sales Thousands 41,965,810 40,602,076 37,529,397 34,929,541 34,110,898 Customers Year End 2,140,587 2,032,298 Revenue per KwH Residential KwH per Customer Residential 4.66>

11,354

4. 10<

11,790 3.96'.50/

1,927,668 11,370 1,840,043 10,968 1,772,304 3.53>

11,127 Net Warm Weather Capability, Kw-Year End 10,957,000 10,941,000 10,644,000 9,740,000 8,927,000 Peak Load, Summer, Kw 60-minute . '........ 8,650,000 8,345,000 7,841,000 7,598,000 7,076,000 Peak Load, Winter, Kw 60-minute .......... 8,791,000 8,617,000 8,606,000 7,287,000 5,807,000 Reserve Capability Percentage-at Time of Summer Peak 26.7 30.4 23.0 13.8 27.4 t

Nuclear Generation, KwH Thousands 11,615,095 13,273,383 13,452,276 8,647,474 8,369,810 Total UtilityPlant Thousands .............. $ 5,458,513 $ 4,983,794 $ 4,525,916 $ 4,181,839 $ 3,724,270 Capital Expenditures (including nuclear fuel and AFUDC) Thousands. $ 574,825 $ 472,830 $ 375,360 $ 469,750 $ 497,233 External Funds Thousands ................ $ 249,220 $ 151,866 $ 33,240 $ 272,540 $ 418,925 Employees Year End 10,337 9,750 9,415 9,865 9,911 FPL/17

service with only brief limitations placed on output due to the steam generators.

To date, 19.4 percentof the tubes in Unit No. 3 and 20.6 percent of the tubes in Unit No. 4 have been plugged. The Company has been authorized to plug up to 25 percent of the tubes in each unit.

The Company has established a planning date of late 1980 to begin making permanent repairs to Unit No. 4, although no firm decision has been made.

Replacement parts for one unit are already on site. Parts for the other unit are scheduled for delivery in the first quarter of 1980. The work will take an estimated 6-9 months and cost $ 61 million per unit. Amendments to the operating licenses will be required.

In 1979, the Nuclear Regulatory Commission (NRC) allowed a petition for intervention by one individual in the matter of steam generator repairs.

Hearings will be held but have not been scheduled yet.

A suit for damages was filed in 1978 against Westinghouse, the supplier of the steam generators.

As a result of the accident at Three Mile Island Plant in Pennsylvania and consequent NRC safety reviews, investigations and regulations, FPL is making certain modifications to its nuclear units, increasing personnel and intensifying personnel training.

In Retrospect...

It was a trying year...

...and a year of trying...

...a year of tackling problems head on...

...a year of trying to increase efficiency by working...

...by working smarter, using time more wisely and improving ways of doing things...

...so that brighter days may lie ahead in the decade before us.

That's important. Because, historically, big challenges have resulted in big progress.

Overcoming our present problems will do no less.

The afternoon sun sinks behind Manatee Plant (L628 Mw), 17 miles northeast of Bradenton.

The plant has two fossil units (1976, 1977),

and the man.made reservoir in the foreground covers 4,400 acres at an average depth of 12 feet.

16/FPL

e re 100 percent thereafter. The balance distillate fuel oil for the gas turbine units Nuclear Fueled Power of residual oil requirements was expired in February 1980. A substantial In 1979, a portion of a lawsuit was settled obtained on the open market. portion of distillate requirements wil! be with Westinghouse Electric Corp. in In order to burn the higher sulfur oil in, supplied under provisions of the residual connection with the fuel supply and some plants, it was necessary to obtain oil contract with Exxon. escalation portions of a contract for both authorization from regulatory authorities Remaining oil requirements will be Turkey Point nuclear units. Under the to exceed emission standards. acquired through competitive settlement, Westinghouse paid FPL In August, the Florida Environmental open-market purchases or new $ 26 million in cash and agreed to provide Regulatory Commission approved a contracts. goods and services on favorable terms petition by the Florida Electric Power Natural Gas Deliveries through 1994. The compensation Coordinating Group, of which the Gas, a sulfur-free and clean-burning fuel, ultimately will be passed on to customers Company is a member, to permanently is playing an important role in Company in the form of lower costs.

relax the State's opacity standards. FPL efforts to reduce oil consumption and to FPL's dispute with Westinghouse over also was granted a variance from existing increase reliance on domestic resources. spent fuel removal from 1brkey Point has opacity, particulate and sulfur dioxide The primary source for natural gas is a been tried and a decision of the court is emission standards. contract with Amoco Production Co. that pending.

In both cases, public health standards is providing 200 million cubic feet The first and second nuclear fuel cores were unaffected. (MMCF) per day of firm gas delivery. (approximately a 5-year fuel supply Both the change in opacity standards Of particular significance to FPL in through the 1981 reload) for St. Lucie and the variance must be approved by 1979 was a 10-year interruptible gas Unit No. 1 are under contract with the Environmental Protection Agency supply contract signed with Florida Gas Combustion Engineering Inc. The (EPA). Unless or until EPA approval is Transmission Co. following expiration Company is negotiating with Combustion obtained, the Company may be unable to of the Company's firm contract with Engineering for a nuclear fuel contract use higher sulfur oil and comply with Sun Oil Co. for St. Lucie Unit No. 2.

emission standards at certain units at Under the new pact, deliveries Additionally, there are uranium certain times, and unless the Company is averaging 51 MMCF per day were made contracts with three other suppliers able to obtain adequate supplies of low in the last half of 1979 on an interruptible International Minerals and Chemical iifur oil, it will have to remove these basis. Corp. (which will provide uranium its from service for indefinite periods The Company in December 1979 extracted from phosphates), United time or be subjected to substantial civil began receiving natural gas under an States Steel Corp. and Caithness Corp.

and criminal penalties. interruptible contract with Consumers The Company also has a lease New oil burners which, because of Power Co. Under the contract, arrangement for a portion of the nuclear their greater efficiency, reduce opacity deliveries are subject to gas and pipeline fuel for St. Lucie Unit No. l.

and particulate emissions are already in availability and continuance of Federal At year end, the Company's inventory place on seven units at four plants. permits. of uranium was approximately 800,000 In the year ahead, more high- The Company has obtained poullds.

efficiency burners are scheduled for exemptions under the Fuel Use Act The 1brkey Point steam generators installation at 1brkey Point, Port which allow the burning of natural gas in have been experiencing problems. A Everglades, and Riviera plants. gas turbine units; however, exemptions program of preventative plugging of the FPL's contract with Belcher Oil Co. for sought for fossil units are pending. steam generators has kept the units in Opposite Page: Being maintained on cold standby status is Cutler Plant (264 Mw) which, when built, had only trees for neighbors. Now located in the heart of suburbia about 15 miles south of downtown Miami, the plant's three fossil units (1952, 1954, 1955) have been painted shades of blue and green to blend esthetically with natural surroundings.

This Page: Union gunboats once plied the St. John' River in the vicinity of Palatka Plant (107 Mw) where FPL also is holding two fossil units (1951 ~

1956) on reserve. It is directly across the highway from Putnam Plant.

Jl'fl~Qil 7

. ':, hei + ,lynil:

FPL/15

10 operational plants stood at 10,957 Mw. of 292 Mw, 208 Mw and 104 Mw in 1985, funds needed for construction were Another 371 Mw was available at two 1986 and 1987, respectively. derived from operations.

plants on cold standby status. Should Also, discussions are proceeding with External financing needs will increase circumstances warrant and necessary the Jacksonville Electric Authority sharply in 1980. FPL estimates such permits be obtained, they could be concerning joint ownership of two coal needs to be $ 450 million, including the activated in 6-12 months. units in northeast Florida with a possible repayment of $ 32 million of short-term System capability is expected to rise in-service date in the late 1980s. debt outstanding at year end 1979 and to 11,732 Mw by year-end 1980 with Thus, plans are to introduce coal into the retirement of a $ 50 million 8i/s completion of Martin Unit No. 1. the FPL generation mix in three ways- percent bond issue maturing in August Construction via purchase, partnership and sole 1980.

Construction aimed at providing ownership. Perhaps four ways.... A portion of 1980 financing will additional generation to meet anticipated The Company also is experimenting with involve the planned sale of $ 125 million of demand in the early 1980s is proceeding a mixture of oil and coal (see Chairman's first mortgage bonds in early March.

at Martin Plant and on the Company's Letter, pages 2-3). Ifthe testing at The Company also intends to raise fourth nuclear unit, St. Lucie No. 2. Sanford Plant goes well, the mixture, equity capital by issuing common stock in The Martin project consists of two consisting of perhaps as much as 50 connection with employee benefit plans.

oil-burning units of 775 Mw each with percent pulverized coal, might be Oil Supplies planned in-service dates of late-1980 and suitable for use in other units. That The Company has a contract with Exxon mid-1981. would enable the Company to substitute Co. U.S.A. that is intended to provide a A rupture in the bank, of the 6,700-acre coal for expensive imported oil. substantial portion of residual oil reservoir at the site in October resulted In another area, FPL has begun requirements through 1981. The contract in loss of the cooling water. Cause of the preliminary discussions with Georgia continues year-to-year thereafter, until break is not definitely known. Resulting Power Co. regarding possible purchase cancelled by either party. Ifeither party design modifications, repair of the dike of up to a 200 Mw interest in each of two elects to cancel by giving notice in 1980 and refilling the lake have delayed by nuclear units that firm has under or in any later year, the contract would several months the planned in-service construction at the Vogtle Plant near continue at full quantity through the date of the first unit. EVaynesboro, Ga. The units are subsequent calendar year and then be Cost of both Martin units is estimated scheduled to be in commercial operation phased out over a 3-year period at to be $ 645 million, including necessary by 1984 and 1987. reduced quantities.

design modifications to the reservoir. Construction Budget As a result of the worldwide oil At St. Lucie, estimated cost of the 802 The Company estimates expenditures situation, Exxon in March 1979 began Mw nuclear unit scheduled for 1983 has under its 1980-82 construction program allocating deliveries of low sulfur residual been revised upward from $ 925 million will approximate $ 2 billion, excluding oil. From April through July, Exxon also to $ 1.1 billion. The new cost figure amounts related to the discussions with allocated total deliveries.

reflects escalation and "scope" changes. Georgia Power Co. which still are in an During the year, allocations of low There are continuing negotiations with early stage. Capital expenditures are sulfur oil ranged from 53-65 percent of various municipal utilities and budgeted for $ 620 million in 1980. contract quantity. Total deliveries, cooperatives over the sale of a portion of In 1979, $ 575 million was invested in including higher sulfur oil delivered in lieu the unit. An approximate 13 percent new facilities. of low sulfur oil, ranged between 93 and interest in the unit is the minimum As with all forecasts, the construction 95 percent from April through July and expected to be sold. budget is subject to continuing scrutiny The Nuclear Regulatory Commission and adjustment.

has held hearings on grid stability and Financing indicated it will conduct hearings on Throughout the course of 1979, $ 188.5 antitrust:issues related to the unit. million was raised through the issuance Parti'j'ys'a result of revised growth of new securities. Involved were 30-year projecfiohs, the Company has amended first mortgage bonds with 12'/s percent its construction plans, deferring for two interest rate ($ 75 million), a privately years scheduled completion dates for placed issue of 8.70 percent preferred twin 700 Mw coal units planned for the stock ($ 50 million), a 3-year term loan Martin Plant site. They now are from three major New York banks ($ 50 scheduled for 1987 and 1989. million) and issuance of common stock in Another factor in the deferral was a connection with employee benefit plans contract signed with Tampa Electric Co. ($ 13. 5 million).

to purchase output from a coal unit now In addition, approximately $ 61 million under construction at Tampa's Big Bend was received from sale of nuclear fuel to Plant. The agreement covers purchase the St. Lucie Fuel Co. to implement a lease arrangement providing nuclear fuel for St. Lucie Unit No. l.

In the period 1975-79, 62 percent of 14/FPL

Above: Cape Canaveral Plant (729 Mw), situated across the Indian River from the Kennedy Space Center where America raced to the stars, has a pair of fossil units (1965, 1969). Below: Stacks of Port Everglades Plant (1,58L5 Mw) dwarf a commercial jetliner taking off from nearby Fort Lauderdale-Ilollywood International Airport. The plant named after its homesite at Florida's largest

~

deepwater port, has four fossil units (1960, 1961 ~

1964, 1965) and 12 gas turbines (1971). Opposite Page: Four miles inland from Port Everglades is Lauderdale Plant (1, 126 Iiiw)where two fossil units (1957, 1958) and 24 gas turbines (1970, 1972) are in operation. The enclosed portion of the plant dates back to 1926.

FPL/13

identified as being "not directly affected the South Florida area, particularly, are contributing to increased saturation by customer growth or mandated by a ~ benefited from a heavy influx of Latin of energy-efficient homes and legal requirement." American visitors. appliances.

Management Southeast Florida continues to gain Growth projections for customers and Several key management changes were stature as an international trade center. KwH sales remain about the same as made in the past year. Miami now has a Free Trade Zone in before 3.2 percent for customers and In January 1979, directors named operation which is expected to generate 3.6 percent for sales.

Marshall McDonald as Chairman of the substantial overseas business. Energy Conservation Board and Chief Executive Officer. At For new residents, there were more A major aspect of the Company's the same time, John J. Hudiburg, an FPL job opportunities. Light manufacturing program to lessen oil dependence is the veteran of 28 years, was elected and agriculture two other major promotion of conservation. Simply put, President, Chief Operating Officer and segments of the state economy what the Company does not have to member of the Board. continued to make strong contributions. generate avoids the use of fuel oil.

With the election of Hudiburg and Population of the state increased to Activities initiated by FPL in load Gene A. Whiddon, Fort Lauderdale 9.25 million, a gain of 3.1 percent management and energy conservation business executive, Board membership over'1978. include promotion of Watt-Wise Living

ll grew to directors, all but one of whom Meanwhile, estimated population of FPL's service territory climbed to 4.8 homes, new efficient "energy code" live in the FPL service area. homes, homes "retrofitted" through an In May, Vice President R.E. Talion million, a hike of 4.5 percent over 1978. FPL energy audit and energy-efficient was elected Group Vice President. Accompanying the increase in new appliances.

In June, Executive Vice President residents was stepped-up demand for The Company estimates that most F.E. "Gene" Autrey left FPL after housing. Florida housing starts were major appliances such as air accepting the position of President of running 21 percent ahead of last year. conditioners and water heaters are Middle South Utilities Inc., a major Florida currently appears to be in replaced every 10 years. With mandatory electric utility holding company based in much better position to weather bad federal efficiency codes taking effect, New Orleans. times than it was when substantial replacement appliances, even at the Also in June, McDonald began a speculation and overbuilding led to the lower end of the price scale, will be year-long term as Vice Chairman of Florida recession of 1974-75. That higher in efficiency than the appliances Edison Electric Institute (EEI), the situation does not exist today, because being replaced.

association of America's investor-owned the hobsing construction industry has In another conservation venture, FP electric utilities whose officers act as been much more cautious and in 1979 introduced its energy van, a industry spokesmen on subjects of construction appears to be in line with mobile unit showing people many things national importance. the healthy demand. they can do to save energy.

In October, B.L. Dady was named Thus, it appears any slowdown Florida The goal of all these conservation Vice President of Management Control might experience will be prompted by efforts is to reduce growth in energy and Services and Assistant Secretary. national events, not by problems within demand, thereby lessening the nation's Promoted to Vice President-Treasurer the Florida construction industry. dependence on foreign oil and delaying in December was J.L. Howard, who also Peak Demand the need to build new power plants.

was named the Company's Chief Because of heavy air-conditioning Generating Capacity Financial Officer. requirements, FPL continues to build for At year's end, system capability of FPL's At the Board of Directors meeting in summer peak projections.

January 1980, L.C. Hauck was elected Last summer, peak demand of 8,650 Vice President, Legal Affairs. Mw was reached July 19. It was 3.7 Service Area Economy percent greater than the 1978 summer One constant in the changing economic peak of 8,345 iVIw.

scene is Florida's appeal as a place to , A record peak, a wintertime demand call home. Another is its desirability as a of 9,217 Mw, was established on Feb. 4, tourist destination. 1980.

In 1979, people continued to move Load Forecast into, and to tour, the State in significant In its forecasting, FPL projects growth numbers. rates in high, low and most probable Tourism, long a staple in the Florida ranges.

economy, registered a gain of 4 percent. In November 1979, these figures were State tourism officials placed the number revised downward slightly.

of arrivals at 35. 5 million. In terms of the "most probable,"

The oil situation had an impact on summer peak load through 1990 is tourism, especially arrivals by car, but expected to grow at a compound annual there was an increase in the number of rate of 3.8 percent, compared to tourists arriving by air. previous estimates of 4.1 percent.

Per-capita spending rose, as well, and The reduction indicates the Company's various energy conservation programs 12/FPL

ngthening its financial base. 1979, rising 17 percent over the Employees Capitalization ratios at year's end were preceding year. Of the increase, about At year end 1979, the Company was 50 percent long-term debt, 38 percent 13.5 percent could be traced to increased serving 367,000 more customers with common equity, 3 percent preferred fuel adjustment revenue and 3.4 percent approximately the same number of stock with sinking funds and 9 percent to increased sales resulting primarily employees as in mid-1976. Total preferred stock without sinking funds. from new customers. employment was 10,337, about 40 FPL's long-term goal is a mix of 50-52 percent of whom were represented by percent long-term debt, 38-42 percent Energy Sales the International Brotherhood of common equity and approximately 10 KwH sales rose to 41.97 billion in 1979. Electrical Workers (IBEW).

percent preferred stock. The increase resulted from a 5 percent A new collective bargaining agreement While not wishing to publicly sell increase in the total number of with the IBEW was ratified by the member-common stock at current below-hook customers and a 2 percent decline in use ship on February 15, 1980. The two-year market prices, the Company is, in per customer. Use per residential agreement, effective November 1, 1979, calls President Hudiburg's words, "looking at customer declined 4 percent to 11,354 for increased wages and improved benefits.

the question with more open- KwH, compared to last year's 11,790. In the year ahead, overall employment mindedness." The decision will be is expected to rise slightly in response to influenced by market conditions, by Customers government regulation and to the service interest rates and by capital More Floridians than ever before are needs of more customers.

requirements. being served by FPL. The Company Included among Corporate objectives Operating Revenues added over 108,000 customers in 1979, for 1980 is a limit in the net growth of Revenues passed the $ L9 billion mark in bringing the total to 2.1 million. certain staff positions which have been

pace with current fuel expenses. In 1979, It would have taken 18 million barrels of $ 2.40, from $ 2.08), commencing with this mismatch led to unrecovered fuel oil at an increased cost of $ 284 million to the June 15, 1979, quarterly payment.

costs of $ 47.5 million. produce an equivalent amount of power. Total dividend payments were $ 2.32 The Florida Public Service Still, the proportion of nuclear per share in 1979, compared tvith $ 2.00 Commission (FPSC) has scheduled generation fell to 26 percent from 30 the previous year.

hearings in February 1980 for percent the year before, a figure For the past 5- and 10-year periods, consideration of its proposed revisions to reflective of refueling and maintenance the Company's dividend growth rate the fuel adjustment clause. Under the schedules. Oil provided 55 percent of ranks among the fastest in the industry.

proposed revisions, the monthly fuel generation; natural gas, 19 percent. FPL's dividend increases in 1978 and adjustment charge would be based on Since FPL first began nuclear 1979 recognize the growing investment 6-month projections, contain an incentive generation in 1972, fuel savings of $ 1.2 by common shareholders through the factor based on generating performance billion have been realized through reinvestment of a large portion of and include a "true-up" feature to nuclear contributions. earnings. Increases not only provide a eliminate the over- or under-recovery of Regulation return on this additional investment, but fuel expense. FPL has supported similar Retail rates, which provide also reflect the Company's desire to concepts in past hearings before the approximately 96 percent of FPL move closer to the industry ratio of FPSC and is hopeful a new method can revenues, are regulated by the FPSC dividends to earnings.

be implemented soon. which on Jan. 2, 1979, was expanded to Financial Strategy Fuel Expense five members and became an appointed, An attractive dividend policy and a sound Fuel expense climbed to $ 813 million, a rather than elected, panel. The capital structure are key elements in the figure representing one-half of total commissioners have staggered terms of Company's long-range plans for further operating expenses. Primary culprit was office. The term of one member expires increased cost of oil, coupled with in January 1981, two terms expire in greater use of oil to meet growing January 1982 and two in January 1983. V system demand and to replace nuclear FPL does not have a request for a rate generation during refueling and increase pending before the FPSC.

maintenance outages of nuclear units. In looking at future needs for rate On Dec. 31, 1979, contract price at increases, the Company willstrive to Port Everglades Terminal for low sulfur achieve its long-term goal of keeping residual oil was $ 26.69 per barrel. increases in base rates at or below the Higher sulfur oil was $ 21.21. The rate of inflation.

corresponding amounts one year earlier The timing of FPL's next rate case were $ 14.13 and $ 11.06. Prices on hinges on such factors as KwH sales February 1, 1980 were $ 28.40 for low growth, inflation and the in-service date sulfur oil and $ 22.02 for higher sulfur oil. of the first unit at Martin Plant.

One relatively bright spot in this Dividends ~ g t otherwise bleak fuel picture was the Dividends on common stock were raised performance of the Company's nuclear to a quarterly rate of 60 cents per share units, which generated 11.6 billion IGvH. from 52 cents (an effective annual rate of Above: Riviera Plant (653 Mw), on the western shore of Lake Worth in suburban West Palm Beach, has four fossil units (1946, 1953, 1962. 1963).

Below: Putnam Plant (446 Mw), the Company's newest, is in a heavily wooded area flanking U.S.

Highway 17 near Palatka. The plant features twin combined. cycle fossil units (1977, 1978). Opposite Page: Day breaks over the Fort hfyers Plant (1, 176 Mw) with two fossil units (1958, 1969) and 12 gas turbines (1974) on the Caloosahatchee River eight miles east of Fort Myers.

,~ ~ ",!

%y

~

10/FPL

Applying Finishing Touches to the Seventies e ability to face problems and still increases in the Consumer Price Index... 375 miles of Florida's Atlantic Coast, function effectively requires a positive ~ to avoid having to sell common stock most outages were restored within 12-24 attitude. Without it, there'd be little under unfavorable market conditions... hours and virtually all but the most alternative but to quit. ~ and to show a measurable increase in serious shortly thereafter.

With Iran, Soviet adventurism and the number of customers who regard FPL employees again worked around over-a-dollar-a-gallon gasoline FPL responsive to their service needs. the clock to aid families displaced from dominating news headlines, it would be Year-end performance appraisal their homes October 31 when water understandable for people simply to give showed progress was made on all three pouring from a break in the Martin Plant up out of frustration. fronts. Strict limitations on spending reservoir flooded portions of the But that's not'the way most people satisfied the first two objectives, while surrounding countryside. In addition to work. Most people keep on trying. customers responding to a random providing emergency financial aid, the Within FPL ranks, at least, that is attitude survey adjudged FPL service to Company undertook efforts to provide considered the acceptable way to deal be "good" on the whole. medicine, to replace lost or broken with problems. Responsiveness eyeglasses, to make special garbage FPL President John J. Hudiburg said FPL had its work cut out for it in 1979 as pickups, to provide sanitary facilities as much in his inaugural address to torrential rains, a major hurricane and a and, in general, to settle damage claims stockholders at the Company's 1979 flood tested the Company's ability to promptly and courteously.

Annual Meeting. respond in emergencies. FPL affirmed its commitment to serve "For us, coming to work is like going The first stern test came on April 25 in numerous little ways, as well.

to the supermarket," he noted. "Every when record rains fell over extensive For example, when Ward Robinson, a time you do it, you encounter a whole portions of South Florida, including 17 Delray Beach customer, said he could new set of higher prices. It becomes inches in Miami within a 24-hour period. not read a portion of his electric bill and more and more difficultto find new Some 125 FPL workers from as far away suggested the use of darker lettering, places to save." as Sarasota were rushed to the FPL listened. As things turned out, the Still, he assured the audience, "FPL storm-stricken area to assist local crews, light lettering had been required by never stops trying." and virtually all service was restored by computer billing equipment which would Those words not only heralded FPL's the next morning. have been "confused" by bold lettering.

ntry into the 1980s, as described on Hurricane David's trek up the But new equipment had been installed, es 4-7, but also set the tone for the peninsula over the Labor Day weekend and it could accommodate the change. As sing of the '70s, a chapter in American was no less challenging. During the a result, it was no problem to institute iistory dominated by economic storm, more than 300,000 customers the change and make bills more readable.

uncertainties and shrunken dreams. were without service in the Company's Another example of the Company's Performance Goals four East Coast divisions. In order to readiness to respond to customer needs In keeping with the perpetual quest to repair damage and restore service, FPL was seen in the elimination of the service enhance the Company's business called in every available crew from the charge for changing a name following capabilities and the value of its services unaffected Western Division and then marriage or divorce.

to the public, Corporate objectives for added 370 workers from neighboring While these particular changes may 1979 were three-fold: utilities and 290 more from local seem minor, their underlying meaning is

~ to keep increases, if any, in cost of contractors. Despite the prolonged of major significance, for they offer a service per customer in line with period of the storm's impact, felt along all solid demonstration of FPL's goal to increase responsiveness.

Earnings The dramatic increase in the price of oil had a pronounced negative effect on earnings per share in 1979. Earnings per share slipped 7 percent to $ 4.22 from

$ 4.54 in 1978.

Although increased fuel costs are reflected in the Company's fuel adjustment charge, there is a 2-month lag between the use of increasingly expensive fuel and the Company's ability to recover costs from consumers. Fuel adjustment revenues thus fail to keep FPL/9

1 FPL at work recapturing visions of yesterday which paved pathways of progress to the present.

Photos throughout this section feature each of FPL's generating plants, caHing attention to the adage, "Today's power is yesterday's foresight."

Above: Sanford Plant (861 Mw) has three fossil units (1959, 1972, 1973) located along the St. John' River five miles northwest of the City of Sanford.

Below: St. Lucio Plant (777 Mw) rises above the mangrove swamps of Hutchinson Island midway between Fort Pierce and Stuart. It consists of Nuclear Unit No. 1(1976) and a second unit (right) under construction. Opposite Page: lhrkey Point Plant (2,079.5 Mw) with its two fossil units (1967, 1968) and two nuclear units (1972, 1973) is silhouetted by the early-morning sun over Biscayne Bay 25 miles south of Miami.

8/FPL

ium extracted from phosphates as ownership of two coal units planned for secondary product of sugar cane refining ie by-product of a fertilizer-processing late in the decade... operations of United States Sugar Corp.

plant at Mulberry, Fla.... ~ exchanging power through the in south central Florida under a

~ announcing plans to build two Company's first direct interconnection co-generation agreement believed to be coal-fired units, scheduled for 1987 and with Georgia... the first of its kind in the state...

1989 completion, at Martin Plant... ~ utilizing a new System Operations ~ maintaining a leadership role in

~ undertaking experiments aimed at Control Facility, a nerve center industry-wide efforts to encourage the finding the most economical way to use employing the latest computer conscious, conscientious and widespread coal, including a test project at Sanford technology to monitor and maximize practice of conservation...

Plant to determine ifit is economical and generation, transmission and distribution ~ and showing, in the process, that the technically feasible to use a high economies... energy dilemma has answers.

proportion of pulverized coal mixed with ~ using all the natural gas available to Because there must be. Othenvise, oil as boiler fuel in generating station the Company... there'd be no future to build for.

units designed to burn oil... ~ cooperating with Dade County, in Yes, FPL is working... and working

~ conducting research into a number of the development of a solid waste disposal hard... not only to continue to provide other energy sources, including solar and facility which, when completed in 1981, dependable electric power, but also to wind. ~ ~ will save money for taxpayers by manage the course of change in such a

~ contracting to buy coal power from furnishing steam for electricity manner that it willinstill confidence in Tampa Electric Co., starting in 1985... production at competitive costs those whose lives we touch.

~ discussing, with the Jacksonville without subsidization... Generating faith in the future, we Electric Authority, possible joint ~ obtaining electricity produced as a call it.

Clearly, our nation desperately needs an uncertain sense of national purpose." about to be bolstered by the addition to reverse the tide of inflation, to What's needed, the Hearst publishing of coal...

re-establish "the ties that bind us organization contends and FPL concurs, ~ a management fully committed to together as a people," to refresh our is for us Americans to stop wringing our sound fiscal policy and guided by downtrodden spirits and to revive the hands and instead concentrate on all the objectives for which accountability is American vision of great expectations. things we have going for us. Because, maintained by a governing Board of Somewhere along the line since FPL's plainly, we must, as a nation, restore our Directors...

perspective and, with it, our confidence ~ a Corporate reputation for financial founding in 1925, self-fulfillingdreams have been shunted out of the mainstream in the future. integrity, backed by investment grade of American thought, only to be replaced The sooner, the better! bond ratings...

~ a level of operating performance by near-gleeful forecasts of gloom Positive Look at '80s which has generated dividend growth...

Every day, it seems, someone else So, for a refreshing change, let' ~ a healthy, and thus far productive, conducts a survey, predicts a downturn examine a few of FPL's many positive points as the brand new decade of the involvement in research and in the economy and then proudly Eighties dawns. development aimed at expanding and announces that the public is losing faith A representative sampling might optimizing energy resources...

in the future. ~ a determination to solve problems, A self defeating activity, ifever there include:

~ a modern, integrated system of thereby creating opportunity for were one.... stockholders and economical energy for electric generation, transmission and Problems are of the Mind distribution facilities, including 10 power customers...

As The Hearst Corp., paying all due ~ a verifiable flair for innovation in the plants in service and two others on respect to the profession of economic reserve... never-ending search for better ways to forecasting, recently pointed out, ~ a construction program supported by do things...

"We'e not facing a recession. We'e internal cash generation which helps ~ and human resources that won't quit!

creating one. avoid excessive reliance on capital Add to these assets some of our many "Sure we have an energy problem. markets... other blessings as a nation, and any And solving it is going to take a lot of work and more than a little pain.

"Sure we have an inflation problem.

And there's no way to lick it without giving up something. But we don't have

~ a service territory universally perceived as a desirable place to be...

~ a growing base of customers...

~ a declining pattern of per-capita energy consumption, a sign that rational person has to wonder what all the crying is about.

Obviously, what's needed is for us to stop singing the blues and get on with work at hand.

t~ ~

to give up anything really important.... residential customers are responding to And that's exactly what we'e doing at All we really have to give up is wasting, the Company's 9-year conservation FPL.

whether it's in overheated homes, program... Take the monumental oil problem in overcomplicated regulations or ~ a generating capacity ample to meet our country, for instance.

overblown bureaucracies. peak demand which is growing at a rate FPL is trying to help solve the "Our problems are not the soul- slower than previously anticipated, again problem, working to cut down on the use searing ones that beset so much of indicating that consumers are conserving of oil, by:

mankind: the ravages of war, starvation, energy... ~ completing the Company's fourth homelessness, lack of basic resources. ~ a diversity of fuels residual oil, nuclear unit, St. Lucie No. 2...

Ours are mostly in the mind: timidity and distillate oil, natural gas and nuclear + purchasing, beginning in 1980, Opposite Page: The shimmery moon offers a Mw Capability Year End Mw Peak Load Summer poignant reminder of the ebb and flow of fuel (Thousands) (Thousands) cycles. These two oil units at Martin Plant east of 15 Lake Okeechobee near indiantown were started in 1973 and willadd1,550 Mw of capability when they enter service in 1980 and 1981. However, FPL has 12.61 a commitment to coal that is destined to take shape 15 51 11.33 in the form of two coal-fired units to be built adjacent to the nearly completed oil units. 15 13.45 Scheduled for 1987and 1989, the coal units will be 13.25 in the 700 Mw size range. 10 ih73 tcs 10.gi 10.64 97 10 5 J.

75 76 '77 '78 '79 '80 '83 '86 '89 1969 '75 76 '77 '78 79 '80 '83 '86 '89 1969 6/FPL

FPL at work generating faith in the future. Above:

In the futuristic setting of FPL's System Control Center, which became operational late in 1979, power dispatchers have at their fingertips mstantaneous control of the Company's electrical system. The center's computerized energy management system promises to increase the economy of operations by optimizing operating efticiency. Below: Bird'-eye vievv of progress on St. Lucie Nuclear Unit No. 2. When completed in 1983, the 802 Mw unit on Hutchinson Island will produce additional fuel cost savings and further reduce FPL's oil dependency.

Special credit is extended to The Hearst Corp. for sharing copyrighted materials used in this section.

FPL/5

Florida Power 8 Light Company Financial Statements gs Per Share Contents

$5 20 Balance Sheets 22 Statements of Capitalization 23 Statements of Income 8381 24 Statements of Retained Earnings 25 Statements of Changes in Financial Position 2 26 Schedule of Taxes

$ 1.85 28 Schedule of Allowance for Funds Used During Construction 29 Notes to Consolidated Financial Statements 1969 '75 '76 "l7 '78 '79 The Consolidated 5-Year Summary of Operations appears on page 17, immediately preceding Management's Discussion and Dividends Paid Per Share Analysis of Operating Results.

$ 1.66

$ 1.435

$ 0.955 Opinion of Independent Certified Public Accountants To the Board of Directors and Shareholders, 1969 75 '76 77 '78 79 Florida Power & Light Company:

We have examined the consolidated balance sheets and statements of capitalization of Fuel Expense Florida Power & Light Company and subsidiaries as of December 31, 1979 and 1978 (5)illion8) and the related consolidated statements of income, retained earnings and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included

$ 812,9 750 such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

600 In our opinion, such consolidated financial statements present fairly the financial position of the Company and its subsidiaries as of December 31, 1979 and 1978 and 4 $ 497.0 the results of their operations and the changes in their financial position for the years 450 $ 461.3 $ 482.3 then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

150 DELOITTE HASKINS & SELLS

$ 72.9 Miami, Florida 1969 '75 '76 77 '78 '79 February 8, 1980 FPL/19

Florida Power & Light Company and Subsidiaries Consolidated Balance Sheets, December 31, 1979 and 1978 (Thousands of Dollars) 1979 1978 Assets ELECTRIC UTILITYPLANT (Notes 1 and 6):

At original cost $ 4,237,288 $ 4,025,649 Less accumulated depreciation . 1 008 365 869,887 Net 3,233,923 3,155,762 Construction work in progress . 1,119,820 806,471 Nuclear fuel (less accumulated amortization of $ 33,300 at December 31, 1979 and $ 21,673 at December 31, 1978) (Note 7) . 68 104 130,001 Electric utilityplant net 4 421 847 4,092,234 INVESTMENTS:

Storm and property insurance reserve fund (Note 1) 9,562 15,099 Other . 2 499 6,354

~I Total investments 12 061 21,453 CURRENT ASSETS:

Cash(Note3) . 6,663 4,952 Temporary investments (at cost, which approximates market). 28,701 Accounts receivable:

Customers (less allowance for uncollectible accounts of $ 3,978 at December 31, 1979 and $ 3,478 at December 31, 1978) . 109,552 93,454

, Employees and miscellaneous 20,640 6,838 Materials and supplies at average cost . 74,906 61,765 Fossil fuel stock at average cost 142,681 85,145 Prepaid expenses 20,864 21,471 Other 5 846 14,742 Total current assets 381 152 317,068 DEFERRED DEBITS:

Unamortized cancelled project costs (Note 6) . 10,275 14,842 Accumulated deferred income taxes (Note 1) . 8,808 7,997 Unamortized debt expense and loss on reacquired debt 5,402 5,653 Other 7 987 898 Total deferred debits . 82 472 29,390 Total $ 4 847 532 $ 4.460,145 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

20/FPL

Florida Power 8 Light Company and Subsidiaries Consolidated Balance Sheets, December 31, 1979 and 1978 (Thousands of Dollars) 1979 1978 Liabilities CAPITALIZATION(See Statements of Capitalization):

Common shareholders'quity . $ 1,400,395 $ 1,309,862 Preferred stock without sinking fund requirements. 311,250 311,250 Preferred stock with sinking fund requirements . 12i,250 75,000 Long-term debt 1,838,426 1,766,861 Total capitalization . 3,671,321 3,462,973 CURRENT LIABILITIES:

Current maturities of long-term debt and preferred stock 55,200 62,618 Notes payable commercial paper (Note 3) 32,000 Accounts payable trade G2,761 46,480 Customers'eposits 89,98G 79,120 Income taxes (Notes 1 and 6) . 12,623 57,257 Other taxes 72,700 35,118 Interest accrued . 40,520 39,055 Pension cost accrued (Note 1) . 27,6G6 31,919 Tax collections payable 15,533 13,882 Other 54,626 44,753 Total current liabilities . 4G3,615 410,202 EFERRED CREDITS:

Accumulated deferred income taxes (Note 1) . 448,215 370,329 Unamortized investment tax credit (Note 1) .. 229,608 176,883 Other 18 854 14,939 Total deferred credits G91,177 562,151 RESERVES:

Storm and property insurance (Note 1) 9,562 15,099 Injuries and damages and other 11 857 9,720 Total reserves 21,419 24,819 COMMITMENTSAND CONTINGENCIES (Notes 6 and 7)

Total . $ 4,847,532 $4,460, 145 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

FPL/21

Florida Power & Light Company and Subsidiaries Consolidated Statements of Capitalization, December 31, 1979 and 1978 (Thousands of Dollars) 1979 1978 COMMON SHAREHOLDERS'QUITY:

Common Stock, no par, authorized 100,000,000shares in1979and 50,000,000 shares in 1978; outstanding 40,819,178 shares in 1979 and 40,314,552 shares in 1978 (Note 4)......... $ 770,350 756,841 Capital stock premium and expense (4,038) (3,751)

Retained earnings 634,083 556,772 Total common shareholders'quity 1,400,395 1,309,862 PREFERRED STOCK $ 100 Par Value, authorized December 31, 1979 5,000,000 shares (Note 4): Shares Redemption Outstanding Price Preferred stock without sinking fund requirements:

4'A% Series 4152% Series A 42/2% Series 8 100,000 50,000 50,000

$ 10LOO 101.00 101.00 10,000 5,000 5,000 10,000 5,000 5,000 4122% Series C 62,500 103.00 6,250 6,250 4.32% Series D ............................. 50,000 103.50 5,000 5,000 4.35% Series E .................................... 50,000 102.00 7.28%

7.40%

Series Series F

G

...................... 600,000 106.57 5,000 60,000 5,000 60,000 400,000 106.23 40,000 40,000 9.25% Series H 500,000 107.00 50,000 50,000 8.70% Series K 750,000 109.85 75,000 75,000 8.84% Series L 500,000 109.84 50,000 50.000 Total . 311,250 311,250 Preferred stock with sinking fund requirements:

10.08% SeriesJ . .................................. 744,000 111.50 74,100 75,000 8.70% Series M 500,000 108.70 50,000 Less current maturities (3,150)

Total . 121 250 75,000 LONG-TERM DEBT (Notes 1 and 4):

First Mortgage Bonds:

Maturing through 1984 3% Due June 1979 10,000 82/s% Due August 1980 . 50,000 50,000 3/s% Due November 1981 . 10,000 10,000 8/s% Due May 1982 ........................... 100,000 100,000 3/s% Due April 1983 15,000 15,000 9'/s% Due May 1984 100,000 100,000 32/s% Due November 1984 . 10,000 10,000 Maturing 1985 through 1994 3'/s% to 5% 150,000 150,000 Maturing 1995 through 2004 4s/s% to 82/a% . 765,000 765,000 Maturing 2005 through 2009 93/s% to 12'% 386,289 311,289 Pollution Control Series A, 6.10% Due January 2008 19,400 19,400 10a/4% Notes Due November 1981 . 125,000 125,000 Note, 1% over Prime Due February 1982 .. 4,536 6,048 Bank Notes (under term loan agreement) Due March 1982 50,000 Bank Notes (under term loan agreement) Due June 1979 . 50,000 Installment Purchase and Security Contracts 5.40% to 6.15% due 2004 through 2007 .. 92,090 92,090 Promissory Notes 6% to 82/4% Due Various to September 1987 3,294 4,145 Unamortized Premium and Discount . 3,464 4,922 Promissory Notes of Subsidiaries 7'%o 92/s% Due Various to December 1995...... G,403 6.585 Total long-term debt 1,890,47G 1,829,479 Less current maturities. (52,050) (62,618 Long-term debt excluding current maturities 1,838 526 1,766,861 Total capitalization 88,671 321 $ 3,462,973 22/FPL The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

Florida Power & Light Company and Subsidiaries Consolidated Statements of Income for the years ended Oecember 31, 1979 and 1978 (Thousands of Dollars, except per share amounts) 1979 1978 OPERATING REVENUES (Notes 1 and 5) $ 1,933,937 $ 1,647,226 OPERATING EXPENSES:

Operations:

Fuel 812,898 551,376 Other production including net interchange .. 47,134 17,031 Transmission and distribution 50,910 46,176 Customers . 49,660 42,839 Administrative and general 116,028 110,607 Maintenance . 99,490 85,865 Depreciation (Notes 1 and 6) . 150,195 144,267 Income taxes (Note 1) . 15G,044 198,163 Taxes other than income taxes . 149,774 132,205 Total operating expenses . 1,632,133 1,328,529 OPERATING INCOME . 301,804 318,697 OTHER INCOME (DEDUCTIONS):

Allowance for other funds used during construction (Note 1) 30,006 20,319 Income taxes (Note 1) . (34) 827 Other net 1,209 3,382 Other income net . 31,181 24,528 COME BEFORE INTEREST CHARGES 332,985 343,225 NTEREST CHARGES:

Interest on first mortgage bonds . 117,715 116,446 Interest on other long-term debt . 27,1G3 24,031 Other interest 12,280 5,619 Allowance for borrowed funds used during construction (Note 1) (28,841) (14,112)

Interest charges net 128,317 131,984 NET INCOME . 204,G68 211,241 PREFERRED DIVIDENDREQUIREMENTS 33,711 29,138 NET INCOME APPLICABLE TO COMMON STOCK $ 170,957 $ 182,103 Average number of common shares outstanding (in thousands) 40,524 40,120 Earnings per share of Common Stock $ 4.22 $ 4.54 Dividends per share of Common Stock $ 2.32 $ 2.00 The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

FPL/23

Florida Power & Light Company and Subsidiaries Consolidated Statements of Retained Earnings for the years ended December 31, 1979 and 1978 (Thousands of Dollars) 1979 i978 BALANCEAT BEGINNING OF YEAR $ 556,772 $ 454,529 NET INCOME 204,668 211,241 Total 761 440 665,770 DEDUCT:

Cash dividends:

Preferred stock:

4'Mo Series ($ 4.50 a share) . 450 450 4V2% Series A ($ 4. 50 a share) 225 225 4'A% Series B ($ 4.50 a share) 225 225 4'%eries C ($ 4.50 a share) 281 281 4.32% Series D ($ 4.32 a share) 216 216 4.35% Series E ($ 4.35 a share) 218 218 7.28% Series F ($ 7.28 a share) 4,368 4,368 7.40% Series G ($ 7.40 a share) 2,960 2,960 9.25% Series H ($ 9.25 a share) 4,625 4,625 10.08% Series J ($ 10.08 a share) 7,560 7,560 8.70% Series K ($ 8.70 a share) 6,525 6,525 8.84% Series L ($ 8.84 a share) 4,420 1,117 8.70% Series M ($ 2.562 a share) . 1,281 Common stock 94,002 80,228 Total dividends. 127,356 108,998 Preferred stock redemption costs BALANCEAT END OF YEAR $ 634,083 $ 556,772 Dividend Restrictions The Charter, Mortgage and Deed of Trust and 10'/4% Note Indenture contain provisions which, under certain conditions, restrict the payment of dividends and other distributions to common shareholders. Under the most restrictive of these provisions approximately $ 532 million of retained earnings was available for payment of dividends on Common Stock at December 31, 1979. In the event that the Company should be in arrears on its sinking fund obligations, commencing in 1980 for the 10.08% Series J Preferred Stock and in 1985 for the 8.70% Series M Preferred Stock, the Company may not pay dividends on Common Stock.

The accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

Florida Power & Light Company and Subsidiaries Consolidated Statements of Changes in Financial Position for the years ended December 31, 1979 and 1978 (Thousands of Dollars) 1979 1978 SOURCE OF FUNDS:

Current operations:

Net income . $ 204,668 $ 211,241 Depreciation . 150,195 144,267 Amortization of nuclear fuel assemblies 11,992 11,081 Deferred investment tax credit net 52,725 35,646 Deferred income taxes 77,075 67,695 Allowance for other funds used during construction (30,006) (20,319)

Total 466,649 449,611 Sale of first mortgage bonds . 73,895 75,202 Reimbursement by trustee from pollution control and industrial development financings for construction expenditures 18,476 Issuance of other long-term debt 50,081 Issuance of common stock . 13,508 7,466 Sale of preferred stock . 49,825 50, 134 Proceeds from nuclear fuel suit . 26,000 Sale of nuclear fuel 60,712 Other sources . 22,462 20,825 Decrease in working capital 14,164 Total $ 763,132 $ 635,878 APPLICATION OF FUNDS:

Construction expenditures* $ 509,627 $ 432,586 Nuclear fuel* 35,556 19,925 Retirement, redemption and current maturity of long-term debt and preferred stock 55,810 71,617 Dividends. 127,356 108,998 Other applications . 24,112 2,752 Increase in working capital . 10 671 Total $ 763,132 $ 635,878 CHANGE IN WORKING CAPITAL EFFECTED BY:

Increase (Decrease) in current assets:

Cash and temporary investments $ (26,990) $ 29,829 Accounts receivable 29,900 13,990 Fossil fuel stock. 57,536 19,063 Other changes net 3,638 17,107 Decrease (Increase) in current liabilities:

Notes payable and current maturities of long-term debt and preferred stock (24,582) (49,925)

Accounts payable (16,281) (6,972)

Customers'eposits . (10,866) 5,387 Income taxes 44,634 (12,383)

Other changes net (46 818) (30,260)

INCREASE (DECREASE) IN WORKING CAPITAL . $ 10,671 $ (14,164)

• Excluding Allowance for other funds used during construction.

fhe accompanying Schedules and Notes to Consolidated Financial Statements are an integral part of these statements.

FPL/25

Florida Power & Light Company and Subsidiaries Schedule of Taxes for the years ended December 31, 1979 and 1978 (Thousands of Dollars) 1979 1978 Income Taxes FEDERAL:

Charged to operating expenses:

Current . $ 8,887 $ 73,659 Deferred Accelerated depreciation . 52,429 53,220 Debt component of AFUDC 10,276 6,405 Repair allowance . 4,863 5,117 Estimated revenue refunds . (188) (854)

Other . 6,915 (763)

Deferred in prior years Accelerated depreciation . (2,879) (1,934)

Debt component of AFUDC (770) (662)

Repair allowance (1,078) (931)

Estimated revenue refunds. 765 Other ....... (1,428) 2,002 Deferred investment tax credit 66,790 47,535 Amortization of investment tax credit . (5,291) (4,695)

Total 139,291 178,099 Charged to other income:

Current (33)

Deferred net 42 (212)

(585)

Total federal . 139,300 177,302 STATE:

Charged to operating expenses:

Current 8,629 13,320 Deferred Accelerated depreciation 6,113 5,835 Debt component of AFUDC . 1,176 702 Repair allowance 561 561 Estimated revenue refunds... (22) (94)

Other 784 (84)

Deferred in prior years Accelerated depreciation . (310) (198)

Debt component of AFUDC . (86) (73)

Repair allowance (119) (102)

Estimated revenue refunds 84 Other (57) 197 Total 16,753 20,064 Charged to other income:

Current . 21 34 Deferred net . 4 (64)

Total state 16 778 20,034 Total income taxes. $ 156,078 $ 197,336 26/FPL

Florida Power & Light Company and Subsidiaries SChedule Of TaXeS (Concluded) e Total income taxes differ from the amount computed by applying the statutory federal income tax rate to income before income taxes. The reasons for the differences are as follows:

1979 1978 4/4 Of 4/4 Of Pre-tax Pre-tax Amount Income Amount Income Computed at statutory rate . $ 1G5,943 46.0%%uo $ 196,117 48.0%%uo Increases (Reductions) in income taxes resulting from:

Allowance for other funds used during construction ...... (IG,252) (4.5) (9,753) (2.4)

State income taxes net of federal income tax benefits... 9,0GO 2.5 10,418 2.6 Other net (2,673) (0.7) 554 0.1 Total income taxes 8155 078 43 3o/o $ 197,336 48.3%%uo Other Taxes Taxes other than federal and state income taxes: 1979 1978'11,343 Federal and state payroll $ 13,928 Real and personal property 41,705 41,308 State gross receipts 2?,981 23,955 Franchise charges. G6,86G 55,862 Miscellaneous . 17 220 14,907 Total other taxes. $ 167,709 $ 147,375 Charged to:

Operating expenses other taxes $ 149,774 $ 132,205 Utility plant and other accounts . 17,935 15,170 Total . $ 167,709 $ 147,375 FPL/27

Florida Power & Light Company and Subsidiaries Schedule of Allowance for Funds Used During Construction (AFUDC) for the years ended December 31, 1979 and 1978 (Millions of Dollars) 1979 1978 Monthly average Construction work in progress (CWIP) . $ 970.1 $ 669.9 Less:

Fixed amount included in rate base 200.0 200.0 AFUDC previously capitalized and included in monthly average CWIP 97.9 60.9 Other 53.2 76.9 CWIP base for computing AFUDC . 619.0 332.1 Nuclear fuel base for computing AFUDC. 30.5 46.3 Total base for computing AFUDC 649.5 378.4 Capitalization rate (1) 9.06%%uo 9.10%%uo Total AFUDC charged to CWIP and nuclear fuel 58.8 34.4 Amounts credited to interest charges (2) 28.8 14.1 Amounts credited to other income (2) $ 30.0 $ 20.3 (1) The AFUDC rate is determined by a formula set by the Florida Public Service Commission (FPSC). The rate is calculated by applying the capital ratio of each component of capital to its current embedded cost, except common equity, for which the rate allowed in the Company's last retail rate case is used as its embedded cost. The debt component is not reduced by the applicable income taxes. A formula is also provided by the Federal Energy Regulatory Commission (FERC) for computing the maximum AFUDC rate. The rate used by the Company to compute AFUDC does not exceed the maximum established by FERC.

(2) In 1978 the allocation of total AFUDC between borrowed funds and other funds was based on the respective proportions of the borrowed funds component and the other funds component of the total AFUDC amount determined by using the formula set by the FPSC. In 1979, as a result of a FERC directive, the Company began allocating total AFUDC between borrowed funds an other funds by computing the borrowed funds component using the FERC formula, with the residual AFUDC being reported a the other funds portion; thus, while the FPSC formula is still utilized to compute the total amount of AFUDC, the borrowed funds portion in 1979 is identical to that which would be reported if the FERC formula were being used. The FERC formula differs from the FPSC formula in that it includes short-term borrowings and assumes that such borrowings are the first source of funds for construction, but excludes accumulated deferred income taxes. The Company has continued to provide deferred income taxes on the borrowed funds portion of AFUDC determined by the FPSC formula.

28/FPL

Florida Power & Light Company and Subsidiaries Notes to Consolidated Financial Statements or the years ended December 31, 1979 and1978

~ Summary of Significant The weighted annual composite reinvested in the fund. Securities held in Accounting and Reporting Policies depreciation rate was approximately the fund are recorded at cost which 3.7% in 1979. The nuclear production approximates market value.

Regulation: Accounting and reporting plant rates include estimated negative Storm damage and service restoration policies of the Company are subject to net salvage values of approximately 20% costs related to Hurricane David regulation by the Florida Public Service for certain components, reflecting aggregating $ 6.8 million were paid from Commission (FPSC) and the Federal estimated decommissioning costs. The the fund in 1979 and charged to the Energy Regulatory Commission transmission and distribution plant rates reserve. Income tax benefits related to (FERC). The following summarizes the include negative net salvage values. the costs will be restored to the fund more significant of these policies. Substantially all utility plant is subject when realized.

Basis of Consolidation: The to the lien of the Mortgage and Deed of Employee Benefit Plans: The consolidated financial statements include Trust (as supplemented) securing the Company has a non-contributory the accounts of the Company and its First Mortgage Bonds. employees'ension plan covering wholly-owned subsidiaries. All significant Amortization of Nuclear Fuel: The substantially all employees. The intercompany balances and transactions cost of nuclear fuel is amortized to fuel Company's policy is to fund each year' have been eliminated. expense on a unit of production method. accrued pension costs, including Rates and Revenues: Revenues are No provision for estimated future spent amortization of the estimated unfunded recognized based on monthly cycle fuel storage or disposal costs is presently prior service costs. Pension costs for included in fuel expense. The suppliers 1979 and 1978 were $ 27.7 million and billings to c>>stomers. Retail and wholesale rate schedules are approved of the nuclear fuel are under contract to $ 26.2 million, respectively. The provide spent fuel removal. The estimated unfunded prior service cost of by the FPSC and the FERC, respectively. The rate schedules contain suppliers have refused to honor their the pension plan at January 1, 1979 was a fuel adjustment clause which gives commitments. The Company has approximately $ 91.5 million using the effect to changes in efficiency, the cost of expanded its spent nuclear fuel storage entry age normal cost method. There el as well as the fuel component of facilities and has adequate facilities for was no excess of vested benefits over urchased power, the total energy cost storage of spent fuel until the mid-1980's the fund balance as of January 1, 1979.

of economy interchange and the under normal refueling conditions. The Employee Thrift Plan provides for generation mix of fossil and nuclear fuels. basic contributions by eligible employees Allowance for Funds Used During of up to 6% of their base salaries, which Generally, the changes are reflected in Construction: The Company are matched 50% by the Company.

customer billings about two months after capitalizes as an additional cost of Supplemental contributions by they occur.

property an allowance for funds used employees may be made up to an Electric UtilityPlant and during construction (a non-cash item) additional 6%. The Company matching Depreciation: The cost of additions, which represents the allowed cost of contributions for 1979 and 1978 were replacements and renewals of units of capital used to finance a portion of CWIP $ 2.1 million and $ 2.0 million, property is added to utility plant. The and nuclear fuel. The portion of AFUDC respectively.

cost (estimated, if not known) of units of attributable to borrowed funds is In 1976 an Employee Stock Ownership property retired, less net salvage, is recorded as a reduction of Interest Plan (ESOP) was adopted pursuant to charged to accumulated depreciation. charges and the portion attributable to the TaxReductionActof1975. TheAct Maintenance and repairs of property, and other funds as Other income. See the permits the Company to claim an replacements and renewals of items Schedule of AFUDC for detailed additional 1% investment tax credit, determined to be less than units of information. provided that the entire amount of the property, are charged to operating credit is contributed to an employee expenses maintenance. Storm and Property Insurance stock ownership plan and invested in Book depreciation is provided on a Reserve and Related Fund: The storm and property insurance reserve Company Common Stock for the benefit straight-line service-life basis by primary of employees. In 1978 the Board of accounts as directed by the FPSC using fund is maintained at an amount equivalent to the reserve. The reserve Directors amended the ESOP to enable the following rates: the Company to claim a further Steam production plant ....... 3. 2%-4. 6% provides coverage of storm damage investment tax credit up to Vi% to the Nuclear production plant ...... 3.2%-6.2% costs and possible public liabilitylosses extent that the Vi'fo credit is matched by ther production plant........ 5.0%-6.5% stemming from a nuclear incident.

voluntary contributions by participating ansmission plant ........... l. 5'7o-3. 3% Earnings from the fund, net of taxes, are employees pursuant to the Tax Reform Distribution plant............ 2. 0%-6. 6%

General plant ............... 2. 1%-7. 8% Act of 1976. Since the payments to the Transportation equipment ..... 9.0%

FPL/29

Florida Power & Light Company and Subsidiaries Notes to Consolidated Financial Statements (continued)

Plan are in lieu of income tax payments, 4. Capitalization there is no effect on net income.

Provisions for Company contributions to Common Stock: The Company has reserved 1 million shares of Common Stock the ESOP were $ 8.8 million and $ 7.2 for issuance in connection with the Employee Thrift Plan and Employee Stock million in 1979 and 1978, respectively. Ownership Plan. In 1979 the Company issued 152,900 shares for $ 4.1 million under the Thrift Plan and 351,726 shares for $ 9.4 million under the ESOP. In 1978 Income Taxes: Deferred income taxes the Company issued 49,600 shares for $ 1.4 million under the Thrift Plan and are provided on all significant book-tax shares for $ 6.1 million under the ESOP. '14,952 timing differences as permitted for In April 1979 the number of authorized shares was increased from 50 million rate-making purposes by the FPSC.

shares to 100 million shares.

Investment tax credits used to reduce current federal income taxes are Preferred Stock AVith Sinking Fund Requirements: The 10.08% Series J Preferred Stock is entitled to a sinking fund to retire beginning April 1, 1980 deferred and amortized to income at a through April 1, 1999 a minimum of 37,500 shares and a maximum of 75,000 rate approximating the lives of the shares annually at $ 101.50 per share, plus accrued dividends.

related property. See the Schedule of The 8.70% Series M Preferred Stock is entitled to a sinking fund to retire Taxes.

beginning April 1, 1985 through April 1, 1999 a minimum of 18,000 shares and a

2. Subsidiaries maximum of 45,000 shares annually, and beginning April 1, 2000 through April 1, The Company's wholly-owned 2004 a minimum of 46,000 shares and a maximum of 115,000 shares annually at subsidiaries, Fuel Supply Service, Inc. $ 100 per share, plus accrued dividends.

(FSS) and Land Resources Investment Minimum annual sinking fund requirements are approximately $ 3.8 million for Co. (LRIC), are engaged in activities each of the next five years. In 1979, 6,000 shares of the 10.08% Series J Preferred complementary to those of the Stock were purchased and retired in anticipation of the 1980 sinking fund Company. FSS is engaged in fuel requirement.

exploration ventures and proprietary fuel The changes in each series of Preferred Stock With Sinking Fund Requirements research and development projects. FSS for 1978 and 1979 are shown below (in thousands):

is not subject to regulation by the FPSC 10.08% Series J ~ 8.70% Series M or FERC. LRIC holds real properties Shares Amount Shares Amount used or to be used by the Company in its Balances, January 1, 1978 .. 750 $ 75,000 utilityoperations for the purpose of Sales in 1979............. 500 $ 50,000 increasing financing options beyond Current maturity in 1979 .... (37) (3.750) those permitted by the Company's Bahnces, December 31, 1979 713 $ 71 250 500 $ 50,000 Mortgage and Deed of Trust.

3. Short-Term Debt Long-'Ibrm Debt: Certain series of the Unused available bank credit aggregated approximately $ 227.3 million at Company's First Mortgage Bonds have December 31, 1979, and is based on informal arrangements which are subject to sinking fund requirements through 1995 cancellation without notice. Compensating balances maintained in connection with which may be satisfied by certification of these credits arise in the normal course of business and are not material to the property additions at the rate of 167% of such requirements. Such requirements Company's financial position and borrowing costs.

are approximately $ 4 million for each of Additional information regarding short-term borrowing for the years ended the next five years. Annual maturities of December 31, 1979 and 1978 is shown below: long-term debt are approximately $ 52 1979 1978 miHion in 1980, $ 137 million in 1981, (Thousands of Dollars)

$ 152 million in 1982, $ 16 million in 1983 Commercial Bank Commercial Bank and $ 111 million in 1984.

Paper Borrowiaaa ~Pa r Borrowio24 Average aggregate borrowings Interest on the Bank Notes due June

$ 45.527 $ 20.405 $ 4,566 $ 300 1979 was based on the current Maximum month-end bahnces $ 107,050 $ 92,000 $ 37.300 $ commercial loan interest rate up to a Weighted daily average interest rate 10.7% 11.7% 7.7% 7a6% maximum average interest rate of 774%

Weighted average interest rate on over the term of the loan. Interest on the amounts outstanding at end of year... 13.5% Bank Notes due March 1982 is based on Maximum combined borrowings at any the current commercial loan interest rat month-end $ 199,050 $ 37.300 30/ FPL

nges in Capital Accounts: The changes in Common Stock, Preferred operating expenses were $ 14. 9 million Stock Without Sinking Fund Requirements and Capital Stock and $ 15.4 million, respectively. The Premium and Expense for 1978 and 1979 are shown below (in thousands): Company is committed to pay a minimum Preferred Stock annual charge per nuclear unit of Capital tvithout Stock $ 1,260,000 under the 11trkey Point Sinking Fund nuclear fuel services contract; however, Premium Common Stock Requirements and annual charges on a usage basis may be Shares Amount Shares Amount Expense substantially in excess of the minimum Balances, January 1, 1978 ..... 40,050 $ 749,375 2,612 $ 261,250 $ (3,715) charge and are subject to escalation for Sales in 1978 500 50,000 (30) increases in certain costs to the supplier.

Issued to benefit plans in 1978 .. 265 7,466 (6)

The present value of the minimum Balances, December 31, 1978 .. 40,315 756,841 3,112 311,250 (3,751) lease commitments, including the Sales in 1979 (287) nuclear fuel services contract, and the Issued to benefit plans in 1979 .. 13,509 (1)

Preferred stock redemption.... 1 impact on net income if certain leases Balances, December 31, 1979 .. 40,819 $ 770,350 3,112 $311.250 $ (4.038) and the nuclear fuel services contract had been capitalized, are not material The Company's Charter authorizes the issuance of 10 million shares of Preferred and, therefore, not presented.

Stock, no par value, and 5 million shares of Subordinated Preferred Stock, no par In June 1979 the Company completed a lease arrangement with a non-affiliated value, to be known as "Preference Stock." None of these shares is outstanding.

lessor to provide a portion of the nuclear fuel for St. Lucie Unit No. 1. At the commencement of this arrangement the

5. Revenues and material costs.

Company sold to the lessor and A request for a rate increase on sales to In 1977 the Company cancelled the subsequently leased back $ 27.4 million of istomers for resale filed with FERC in two nuclear units previously proposed nuclear fuel loaded in the spring 1979 was placed in effect March 1, 1978 for a South Dade Site and deferred the refueling of this unit. In the second half of ect to refund with interest. A rate costs, including cancellation penalties, of 1979 the Company sold to the lessor an settlement with the Company's the project of approximately $ 14.9 million additional $ 33.3 million of nuclear fuel in wholesale customers has been approved before income taxes. The Company various stages of enrichment for by FERC, under which the Company will obtained authorization from the FPSC to eventual leaseback to the Company. The receive increased annual revenues of amortize these amounts over a five-year FPSC has approved classification of this approximately $ 3.7 million. Adequate period. In 1978 an additional $ 7.9 million lease as an operating lease for financial provision has been made for refunds of costs related to the project were accounting purposes. Ifthe lease had which are required to effect final determined to be not recoverable. These -

been treated as a capital lease the settlement. costs were added to the original amount Company's balance sheet at of cancelled project costs and are being December'1, 1979 would have reflected additional

6. Commitments and amortized over the same five-year Contingencies nuclear fuel of approximately $ 24 million amortization period. Depreciation with a corresponding capitalized lease Construction Program: expense in 1979 and 1978 includes $ 4.6 obligation. Quarterly lease payments Commitments in connection with the million and $ 5.8 million, respectively, of consist of a burn-up factor computed on amortization'of these costs.

construction program for electric utility the basis of energy production plus the plants, generating units and related Rental and Nuclear Fuel Expense: lessor's financing costs and certain facilities were estimated at The annual lease expense and the administrative expenses. The Company approximately $ 1.3 billion at December minimum rental commitments under real willcontinue to have full responsibility 31, 1979 including $ 350 million for property and equipment leases are not for management of the fuel and will nuclear fueL These estimates are based material. maintain property and liability insurance.

on the presently proposed construction The Company has various contracts The lease arrangement expires in 2029 program and are not necessarily for supplies of fuel including a contract but may be terminated earlier by the contractual obligations. Certain of these for nuclear fuel services for its two lessor upon the occurrence of certain commitments are also subject to Turkey Point Plant nuclear units. Expenses events and, upon three years prior ation for increases in labor, services under the nuclear fuel services contract notice, may be terminated in 1984 or in for 1979 and 1978 which were charged to any later year. The Company may FPL/31

Florida Power & Light Company and Subsidiaries Notes to Consolidated Financial Statements (continued) terminate the lease arrangement at any the steam generators in Unit No. 3 and NRC allowed a petition for interventi time. Under certain conditions of approximately 20.6% in Unit No. 4. The by one individual and indicated that public termination, the Company willbe Company has NRC approval to plug up to hearings would be held. It is impossible required to purchase, within 270 days, all 25% of the tubes in each unit without to determine the length of these nuclear fuel (in whatever form) then reducing their output. However, pending hearings. Power resources could be existing under the lease arrangement at a reevaluation of the emergency core inadequate and the southern part of the a price that will allow the lessor to cooling systems, output may be limited Company's system could be without recover its net investment cost for brief periods from time to time to adequate power from time to time during (approximately $ 65 million at December 93% and 94% of capacity for Units Nos. any period that both units were 31, 1979). 3 and 4, respectively. Unless an simultaneously out of service. The Nuclear Insurance: The Company is a extension is granted, each unit is Company's financial position could be member of Nuclear Mutual Limited, required to be shut down and the steam adversely affected.

which provides insurance coverage generators inspected once every six In May 1978 the Company filed suit for months. NRC approval must be obtained damages in the U.S. District Court for against property damage to members'uclear before the unit may be returned to the Southern District of Florida against generating facilities. The service following each inspection. Unit Westinghouse Electric Corporation Company could be subject to a maximum No. 4's next inspection is required by late (Westinghouse), the supplier of the assessment of approximately $ 58 million, based on current premiums, in the event March 1980, unless a request for an above steam generators. Westinghouse's losses occur at a nuclear plant of a extension to April 1980, the unit's next motion to discuss the suit was denied.

member utility, and is self-insured for scheduled outage, is approved and Unit The matter is pending.

No. 3's is required by July 1980. Ifa any such loss at any one of its nuclear significant pattern of leaks occurs in a St. Lucie No. I During routine plants in excess of $ 300 million. inspection at the spring 1978 refueling of The Company maintains private steam generator of either unit, an inspection must be performed. Unit No. this unit, corrosion was detected in the insurance and agreements of indemnity steam generators. During the spring 3's next scheduled refueling date is early with the Nuclear Regulatory 1979 refueling outage work was done 1981 and Unit No. 4's is late 1980.

Commission (NRC) to cover third-party minimize future corrosion. The Comp liabilityarising from a nuclear incident The Company has contracted for new steam generator tube bundles. Delivery has approved an expenditure of $ 15 which might occur at the Company's million for a program designed to nuclear power plants. In the event a of new tube bundles for one unit was made in July 1979, with delivery of tube mitigate the corrosion. Portions of this public liabilityloss arising from a nuclear work are scheduled to be performed at incident at a facility currently covered by bundles for the other unit anticipated in the first quarter of 1980. The new steam the unit's next refueling outage government indemnification exceeds scheduled for spring 1980.

generator tube bundles incorporate

$ 160 million, under the Price-Anderson Act the Company will be obligated to pay different materials and design which the St. LucieNo. 2 The Company has a deferred premium of up to $ 5 million Company anticipates will prevent a undertaken to sell, under certain recurrence of the present problems. The conditions, to certain cooperatives and per incident for each of its three licensed reactors but not more than $ 10 million in planning date for the repair of Unit No. 4 municipalities a minimum of 13% of St.

is late 1980, but no firm decision has Lucie Unit No. 2. Other municipalities a calendar year for each of its three licensed reactors. The Company could been made as to the timing of the have demanded the right to purchase a be assessed up to approximately $ 30 repair. The cost to replace the tube significant portion of this unit.

million in a year. bundles is estimated at approximately

$ 61 million per unit of which an aggregate Spent Nuclear Fuel: Currently, there Nuclear Units: of $ 37 million has been expended are no spent nuclear fuel reprocessing Turkey Point Units Nos. 8 and 4 At its through December 31, 1979. The balance plants in commercial operation in the United States. The President of the Turkey Point Plant the Company has of these costs has been included in the been experiencing for several years and construction program commitments. United States has announced that the continues to experience problems with Repair of the steam generators will Administration proposes that commercial the steam generators in its two nuclear require each unit to be out of service for reprocessing be deferred indefinitely. In a separate announcement the units, Units Nos. 3 and 4, and has had to about six to nine months and the NRC plug approximately 19.4% of the has stated that amendments to the Department of Energy has proposed that pressurized water circulation tubes in the U.S. government take title to and operating license for each of the Turkey Point units will be required. An possession of spent nuclear fuel for a environmental impact statement could also be required. In August 1979 the 32/FPL

he event the government's plan does At issue in the case on remand is Alleged Antitrust Violations: On not materialize, the Company willbe whether an agreement, understanding or October 31, 1979 fifteen Florida forced to seek other arrangements for concert of action, to which the Court of municipalities filed a suit against the long-term storage of spent nuclear fuel. Appeals found the Company was a party, Company in the United States District was a substantial factor in Court for the Southern District of Federal Income 'Ihxes: The Internal to obtain an interconnection. Ifthe plaintiffs'ailure Florida, alleging violation of the antitrust Revenue Service (IRS) has examined the jury should find in favor of plaintiffs, it laws and certain other laws. The Company's income tax returns for 1971, will then have to assess what damages, if complaint seeks damages in amounts not 1972 and 1973 and has proposed any, plaintiffs sustained. yet determined, but in excess of $ 1 additional income taxes aggregating The Company has been advised by its million and $ 15,000 per municipality, and

$ 22.1 million, exclusive of interest. The counsel that it is impossible to predict additionally seeks various forms of principal issue is the taxability of the outcome of this litigation at the equitable relief, including access to the customer deposits. Ifthe Company is present time because, among other Company's nuclear units. The Company unable to reach a favorable settlement things, of the ambiguities in the opinion is unable to predict the ultimate outcome with the Appellate Division of the IRS, of the Court of Appeals and the of this matter but believes that it has the Company will pursue all uncertainty as to how the trial judge wiH acted in compliance with the law, and administrative and legal remedies. These interpret the law in charging the jury. intends to defend this action vigorously.

include paying taxes and interest However, based on the facts as it knows Based on its discussions with its various aggregating approximately $ 27.5 million, them at this time and on its discussions counsel, the Company is of the opinion filing a claim for refund and, ifsuch claim with its counsel, the Company does not that the ultimate outcome of this matter is rejected, filing a lawsuit seeking believe that it will incur a liabilitythat will will not have a material adverse effect on recovery of the amounts paid. In the be material in relation to its consolidated its consolidated financial position.

opinion of legal counsel, customer financial position.

deposits are not includable in taxable income and it is probable that a decision his effect will be obtained in federal rt. 8. Quarterly Data (Unaudited)

7. Legal Proceedings For the periods shown below, the Operating Revenues, Operating Income, Net Income and Earnings per share of Common Stock (after dividend requirements on Nuclear Fuel Suit: In November 1979 Preferred Stock) are as follows:

a settlement between the Company and Earnings per Westinghouse resolved the uranium Operating Operating Net share of supply and escalation issues that had Quarter Ended Revenues Income Income Common Stock been the subject of a suit related to the (Thousands of Dollars)

Company's nuclear fuel services contract March 31, 1978..... $ 371,901 $ 74,555 $ 48,679 $ 1.04 for its two Turkey Point nuclear units. A June30, 1978....... 371,185 57,241 29,594 0.57 cash payment of $ 26 million was received September 30, 1978 . 496,785 104,304 76,774 1. 73 in December 1979 and applied as a December 31, 1978 .. 407,355 82,597 56,194 1.20 reduction of the Company's investment March 31, 1979 ..... 377,089 62,445 39,261 0.77 June 30, 1979....... 440,003 41,966 17,062 0.22 in nuclear fuel. The Company's dispute September 30, 1979 . 614,964 109,678 84,208 1.87 with Westinghouse over spent fuel December 31, 1979 .. 501,881 87,715 64,137 1.35 removal has been tried but the trial court has not yet made a decision.

In the opinion of the Company all adjustments (consisting of only normal recurring accruals) necessary to present a fair statement of such amounts for such periods Gainesville Antitrust Suit: A treble have been made.

damage suit was brought in 1968 against The Company is of the opinion that quarterly comparisons may not give a true the Company, seeking damages of indication of overall trends and changes in the Company's operations and may be approximately $ 12 million, before misleading to an understanding of the results of operations as the revenues and trebling. The case was tried in 1975 and expenses of the Company are subject to periodic fluctuations due to changes in resulted in a jury verdict for the weather conditions, customer usage, number of customers and the proportion of Company. Plaintiffs appealed to the U.S. generation by various fuels.

urt of Appeals for the Fifth Circuit. In y 1978 the Court of Appeals ruled that certain matters pertaining to the case should be re-tried by the District Court.

FPL/33

Florida Power & Light Company and Subsidiaries NOteS to COnSOlidated FinanCial StatementS (Concluded)

9. Effects of Changing Prices therefore, the resulting measurements supplies are not held for sale and do not (Unaudited) should be viewed in that context and not give rise to a cost of goods sold, but are The Company has estimated the effects as precise indicators of the effects of used principally in utility plant of changing prices on its operations on inflation. construction. For these reasons the basis prescribed in Financial Fuel inventories, the cost of fuel used inventories were treated as monetary in generation, and materials and supplies assets.

Accounting Standards Board Statement No. 33, "Financial Reporting and have not been restated from their The supplementary data below are Changing Prices" (Statement).

historical cost in nominal dollars. presented in response to the Statement The two different methods prescribed Regulation limits the recovery of fuel and are not intended to replace historical costs to actual costs. Materials and cost information.

by the Statement for measuring the effects of changing prices were used in calculating the information which follows. SUPPLEMENTARY STATEMENT OF INCOME ADJUSTED FOR EFFECTS The first method provides data OF CHANGING PRICES adjusted for "general inflation" using the For the year ended December 31, 1979 Consumer Price Index for All Urban (Thousands of Dollars)

Consumers as the broad-based measure Constant Current of the general inflation rate. The Conventional Dollar Cost objective of this approach is to provide Historical (Average (Average Cost 1979 Dollars) 1979 Dollars) financial information in dollars of equivalent value or purchasing power Operating revenues $ 1,933,937 C$ 1,933,937 C$ 1,933,937 (constant dollars). Financial data are made more comparable by reporting the Operating expenses excluding depreciation 1,481,938 1,481,938 1,481,938 amounts in terms of a common unit of

~

Depreciation 150,195 262,899 387,838 measure of purchasing power.

~

Operating income . 301,804 189,100 64,161 The second method of measurement Other income net 31,181 31,181 31,181 adjusts for "changes in specific prices." Interest charges net 128,317 128,317 128,317 The objective of this method is to reflect Income (loss) from continuing the effects of changes in the specific prices (also referred to as "current operations (excluding reduction to net recoverable amount) $ 204.668 CS 91,964 '$ (32,975) costs") of the resources actually used in Reduction to net recoverable amount ... C$ (415,350) the Company's operations. Measures of Increase in current cost of electric these resources and their consumption utilityplant during 1979" .......... C$ 563,'380 reflect the current cost of replacing these Effect of increase in general price level .. (1,085,824) resources, rather than the historical cost Excess of increase in general price amounts actually expended to acquire level over increase in current cost .... (522,444)

Gain from decline in purchasing power them. of net amounts owed. 363.104 363.104 Both of these methods inherently Net. C$ (52,246) C$ (159,340) involve the use of assumptions, approximations, and estimates, and C$ = average 1979 dollars.

'Including the reduction to net recoverable amount, the loss from continuing operations on a constant dollar basis would have been $ 323,386 for 1979.

"AtDecember 31, 1979, current cost of electric utilityplant, net of accumulated depreciation, was $ 8,994,000, while historical cost recoverable through depreciation was $ 4,422,000.

34/FPL I

IVE-YEAR COMPARISON OF SELECTED SUPPLEMENTARY FINANCIALDATA production facilities to the number of ADJUSTED FOR EFFECTS OF CHANGING PRICES megawatts of each fuel type in the (Thousands of Average 1979 Dollars, except per share amounts) Company's present generation mix.

Years ended December 31 ~

Under both methods the adjustment 1979 1978 1977 1976 1975 for depreciation was calculated by applying the rates and methods used for Historical cost information adjusted for general intlation: computing book depreciation to the revenues........ C$ 1,933,937 C$ 1,828,421 C$ 1.757,501 C$ 1.510.894 C$ 1 596,569 restated plant amounts.

Operating ~

The rate regulatory process limits the Income from continuing Company to recovery of the historical operations (excluding reduction to nct recoverable cost of electric utility plant. Therefore, amount) ................ C$ 91,964 the excess of restated value of electric Income per common share utility plant over historical cost is not (excluding reduction to net presently recoverable in rates as recoverable amount) ...... C$ 1.44 depreciation, and is reflected as the Net assets at year-end at net reduction to net recoverable amount.

recoverable amount....... C$ 1,324,254 As prescribed by the Statement, Current cost information:

income taxes were not adjusted.

The gain from the decline in Income (loss) from continuing operations .............. CS (32.975) purchasing power of net amounts owed represents the net effect on the Income (loss) per common share................. C$ (1.65)

Company of holding monetary assets and liabilities. During periods of inflation Excess of increase in general monetary assets such as cash and claims price level over increase in rrent cost ............. CS 522.444 to cash lose purchasing power because they will be able to purchase less at a ssets at year-end at net recoverable amount....... C$ 1.324,254 future date; while monetary liabilities, primarily long-term debt, will be paid General information:

with dollars having less purchasing Gain from dedine in purchasing power. Since the Company has more power of net amounts owed C$ 363, 104 monetary liabilities than monetary assets Cash dividends per common it has a net monetary gain. This gain is share .................. C$ 2.32 C$ 2.22 C$ 1.99 C$ 1.98 CS1.94 not realizable by the Company but is Market price per common simply an estimate of the effect on the share at year-end....... C$ 24'h CS29 C$ 32t4 C$ 35 CS20~/s Company of holding monetary items.

Average consumer price index 217.4 195.4 181.5 170.5 161.2 The primary effect of general inflation CS ~ average 1979 dollars. on the Company is reflected in the rapidly increasing cost of constructing Substantially all electric utility plant historical cost of plant by vintage year. electric plant. This negative effect is (which consists of electric utility plant in Current cost of electric utility plant was offset by the fact that the Company will service and construction work in restated by applying the Handy Whitman pay its long-term debt with dollars progress, including land and intangibles, Index of Public UtilityConstruction having declining purchasing power and and nuclear fuel) was restated to dollars Costs or other appropriate indexes to relatively less of the Company's having equal purchasing power (constant substantially all electric utility plant resources will be required in future years dollars) using the Consumer Price Index excluding production plant. Current cost to retire long-term debt.

for'AllUrban Consumers applied to the of production plant was restated by applying. the estimated construction cost per megawatt of each fuel type of FPL/35

Information for Investors Annual Meeting Transfer Agent The 1980 Annual Meeting of FPL Transfer agent, registrar and dividend shareholders willbe in Fort Myers, Fla., disbursing agent for FPL stock is:

on Tues., April 15. Formal notice of the The First National Bank of Boston meeting, together with a proxy Shareholder Services Division statement and form of proxy, will be P.O. Box 644 mailed to shareholders on or about Boston, Mass. 02102 March 13, at which time proxies will be Telephone 617/434-6562 requested by management. Dividends The 1979 session at Sandpiper Bay On Feb. 11, 1980, the Board of Conference Center in Port St. Lucie Directors declared a regular quarterly attracted an estimated 500 persons, the dividend of 60 cents, the Company's largest turnout in a decade. During the 137th consecutive quarterly dividend. It meeting, stockholders elected the 11 is payable March 17 to holders of record directors currently serving, ratified the as of February 29.

appointment of Deloitte Haskins & Sells The following table indicates dividends as auditors, approved a charter paid previously on common stock:

amendment doubling to 100 million the authorized shares of common stock and 1979 1978 defeated a shareholder proposal on First Quarter $ 0.52 $ 0.44 cumulative voting. Second Quarter $ 0.60 $ 0.52 More than 86 percent of outstanding Third Quarter $ 0.GO $ 0.52 shares of common stock were voted. Fourth Quarter $ 0.60 $ 0.52 F~orm 10-K for 1979 Dividend Reinvestment Plan Sandpiper Bay Conference Center at Port St. Lucie A copy of FPL's Annual Report on Form Shareholders may elect to have their was site of the 1979 Annual Meeting of 10-K filed with the Securities and Stockholders. Aftcnvard, stockholders took a dividends automatically reinvested in sightseeing tour of FPL's St. Lucie Plant, which is Exchange Commission is available, additional FPL shares through a low-cost visible on the horizon.

without charge, to interested Automatic Dividend Reinvestment stockholders. Requests must be in Service offered by The First National writing and should be addressed to J.E. Annual Report Bank of Boston. Participants in the plan The Company's 1978 Annual Report to Moore, Director of Stockholder also have the option of making Information, Florida Power & Light Stockholders was adjudged to be the supplemental cash deposits of up to best among investor-owned electric Company, P.O. Box 529100, Miami, Fla.

$ 3,000 per quarter for investment. utilities having operating revenues in 33152. Shareholders, using this convenient Company Ownership excess of $ 600 million annually. The method of increasing their FPL holdings, competition, sponsored by Reddy At the end of 1979, the Company had invested an additional $ 629,000 during 40,819,178 shares of common stock Communications Inc., cited FPL for the past year. "covering all the bases in a clear and outstanding, owned by 35,425 holders of Information and enrollment cards may record. These shareholders include concise manner" and for producing the be obtained by writing the bank's individuals and institutions, such as report "at a unit cost about half the Automatic Dividend Reinvestment and national average for all industry."

foundations, insurance companies and Cash Stock Purchase Plan, P.O. Box pension funds, which in turn hold large 1681, Boston, Mass. 02102.

blocks of stock on behalf of still more Auditors Investor Communications Deloitte Ilaskins & Sells individuals. Florida Hi-Lig/its, a newsletter prepared Through acquisition of shares in the Certified Public Accountants especially for holders of common and 1 Southeast Third Ave.

FPL Thrift and Employee Stock preferred stock, is published several Miami, Fla. 33131 Ownership Plans, virtually all employees times each year.

maintain ownership in, and therefore General Counsel A similar publication is sent Steel Hector & Davis have direct interest in, the Company.

periodically to bondholders. Southeast First National Common Stock Data Also, a Financial and Statistical Report Bank Building Principal market for FPL common stock containing comprehensive data for the Miami, Fla. 33131 is the New York Stock Exchange. Ticker years 1969-79 is distributed to symbol is FPL. Newspaper listings Principal Company Offices professionals in the investment Florida Power & Light Company generally use FlaPL. community and is available to others as a 9250 lV. Flagler St.

The following table indicates the range supplement to this report. P.O. Box 529100 (high/low) of trading prices for the past Inquiries concerning the Company's Miami, Fla. 33152 vo years

~,

1979 1978 activities and requests for publications, Telephone 305/552-3552 including Quarterly Consolidated First Quarter 287/8/26i/s 27N/23% Financial Statements, should be directed Second Quarter 28K/26 27~/e/24Vi to the FPL Stockholder Information Third Quarter 28'/s/2578 29%/26/8 Dept. (Telephone 305/552-4046) in care Fourth Quarter 26'A/24'/>> 28Vi/25% of the Principal Company Offices.

36/FPL

Principal Officers Directors rshall McDonald hairman of the Board and Chief Executive Officer I.

John J. Hudiburg President and Chief Operating Officer II E.A. Adomat Executive Vice President H.L. Allen Senior Vice President L.C. Hunter Senior Vice President J.G. Spencer Jr.

Senior Vice President R.lV. IUall Jr.

Senior Vice President and Assistant Secretary R.E. Mlon Group Vice President D.K. Baldwin Vice President, Corporate Services E.L. Bivans Vice President, System Planning ill.C. Cook Pictured recently at a regular monthly meeting of the Florida Power 8: Light Coinpany Board of Directors Vice President, Fuel Resources and were (clockwise, from foreground) Chairman McDonald and Directors Davis, Knight, tvhiddon, McCariy, Hudiburg, tVadsworth, Price, Anthony, Blumberg and Bennett.

Corporate Development B.L. Dady Vice President, Management Control and *M.P. Anthony John M. McCarty Services, and Assistant Secretary EUest Palm Beach, Fla. President, Fort Pierce, Fla. Attorney. Serving since

.J. Dager Jr. Anthony's Inc., a chain of ladies apparel 1973.

e President, Engineering, Projects and retail stores. Serving since 1977.

tMnrshall McDonald nstruction tGeorge F. Bennett Miami, Fla. Chairman of the Board of

'I'.E. Danese Boston, Mass. President and Chief Directors of the Company since Jan. 15, Vice President, Public Affairs Executive Officer of State Street 1979. Formerly President and Chairman of J.H. Francis Jr. Investment Corp. and of Federal Street Meetings of the Board. Serving since 1971.

Vice President, Corporate Communications Fund Inc., investment companies; Managing Partner of State Street Research 'Edgar H. Price Jr.

R.J. Gardner Bradenton, Fla. Chairman of the Board and and Management Co.; Chairman, Vice President, Strategic Planning President of The Price Co. Inc., a Managing General Partner, State Street L.C. Hauck Exchange Fund. Serving since 1970. consulting firm. Serving since 1972.

Vice President, Legal Affairs

'David Blumberg tLewis E. Wadsworth J.L. Howard Bunnell, Fla. Engaged in timber and cattle Vice President-Treasurer, Financial Miami, Fla. President, Planned Development Corp., a building and businesses. Serving since 1970.

IV.ill. Klein development firm. Serving since 1973. Gene A. 1Vhiddon Vice President, Economic Development Jean MeArthur Davis Fort Lauderdale, Fla. President, A. D. Schmidt Causeway Lumber Co. Inc., engaged in Vice President, Power Resources Miami, Fla. President, McArthur Dairy Inc. and McArthur Farms Inc., engaged in the sale of lumber and building materials.

R. E. Uhrig Serving since January 1979.

Vice President, Advanced Systems and the production and distribution of dairy Teclmology products. Serving since 1977.

Astrid E. Pfeiffer tJohn J. Hudiburg tExecutive Committee Secretary Miami, Fla. President ofthe Company 'Audit Committee H.P. williams Jr. since Jan. 15, 1979. Formerly Executive Comptroller Vice President, Finance. Serving since January 1979.

Robert B. Knight Coral Gables, Fla. Chairman, National Food Services Inc., a restaurant management company. Serving since 1977.

BULK RATE FLORIOA POWER d LIGHT COMPANY U.S. POSTAGE 9250 lV. Flagler St. PAID P.O. Box 529100 MIAMI,FL Miami, Fla. 33152 PERMIT NO. 75 Telephone 305/552-3552

Consolidated Statement of Income 1979 1978 1977 1976 1975 1974 1969 (Thousands of Dollars)

OPERATING REVENUES Revenue from electric energy sales ....... $ 1,918,713 $ 1,634,111 '1,453,502 $ 1,181,093 $ 1,174,365 $ 943,297 $ 367,794 Other revenues . 15,224 13,115 11,082 8,587 8.279 7,758 1,716 Total operating revenues......... 1,933,937 1,647,226 1,464,584 1,189,680 1,182,644 951.055 369.510 OPERATING EXPENSES:

Fuel Oil .. 691,043 449,420 410,394 403,115 391,770 338,695 35,111 Fuel Gas 88,666 75,457 60,259 61,487 53,731 47,748 37,797 Fuel Nuclear 33,189 26,499 26,362 17,745 15,834 13,672 Total fuel . 812,898 551,376 497,015 482,347 461,335 400,115 72,908 Other production operation ............. 42,891 35,628 28,480 26,116 20,641 20,725 6,280 Interchange power net................. 4,243 (18,597) (13,771) (10,110) (1,803) (4,215) (1,051)

Transmission operation ................ 6,725 6,169 4,978 4,662 3,943 3,982 2,042 Distribution operation.................. 44,185 40,007 37,975 40,739 32,356 30,844 17,851 Customers 44,907 38,729 33,738 31,055 29,705 26,837 16,057 Administrative and general...... ~ ~ " ~ ~ 116,028 110,607 91,267 79,753 66,828 52,351 25,462 Provision for uncollectible accounts ....... 4,753 4,110 4,344 5,912 8,481 6,998 689 Maintenance . 99,490 85,865 67,579 67,062 59,646 57,472 23,476 Total operation and maintenance .. 1 176,120

~ 853,894 751,605 727,536 681 132

~ 595,109 163,714 Depreciation 150,195 144,267 125,166 88,591 82,322 74,775 38,247 Income taxes . 156,044 198,163 171,098 85,368 114,822 51,306 50,847 Taxes other than income taxes............ 149,774 132,205 117,807 96,972 87,558 71,241 31,365 Total operating expenses ........ 1,632,133 1,328,529 1 ~ 165,676 998,467 965,834 792,431 284,173 OPERATING INCOME 301.804 318,697 298,908 191,213 216,810 158,624 85,337 OTHER INCOME (DEDUCTIONS):

Allowance for funds used during construction . 65,497 48,486 39,907 Allowance for other funds used during construction 30,006 20,319 16,009 Income taxes . (34) 827 (1,558) (298) 5,350 11,676 (547)

Other net . 1,209 3,382 (1,731) 1,005 ~(850 (1,734) 1,160 Other income net 31,181 24,528 12.720 66,204 52,986 49,849 613 INCOME BEFORE INTEREST CHARGES .. 332,985 343,225 311,628 257,417 269,796 208,473 85,950 INTEREST CHARGES:

Interest on first mortgage bonds .... 117,715 116,446 113,530 110,637 96,161 78,723 30,359 Interest on other long-term debt..... 27,163 24,031 22,947 22,261 22,271 9,892 248 Other interest . 12,280 .6,619 7,606 7,674 6,143 14,384 1,916 Allowance for borrowed funds used during construction (28,841) (14,112) ~((2,893 Interest charges net ..... 128,317 131,984 131,190 140,572 124,575 102,999 32,523 NET INCOME 204,668 211,241 180,438 116,845 145,221 105,474 53,427 Preferred dividend requirements .... 33,711 29,138 27,653, 22,378 20,066 11,654 1,615 NET INCOME APPLICABLE TO COMMON STOCK. $ 170,957 $ 182,103 $ 152,785 $ 94,467 $ 125,155 $ 93,820 $ 51,812 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (000) ... 40,524 40,120 40,050 39,542 35,940 34,050 27,876 EARNINGS PER SHARE OF COMMON STOCK $ 4.22 $4.54 $ 3.81 $ 2.39 $ 3.48 $ 2.76 $ 1.86 DIVIDENDS PER SHARE OF COMMON STOCK. $ 2.32 $ 2.00 $ 1.66 $ 1.56 $ 1.435 $ 1.325 $ 0.955 I

13

Consolidated Statement of Changes in'Financial Position Total Total 1979 1978 1977 1976 1975 1975-1979 1970-1979 (Thousands of Dollars)

SOURCE OF FUNDS:

Current operations:

Net income . . $ 204>668 $ 211,241 $ 180,438 $ 116,845 $ 145,221 $ 858,413 $ 1,300,490 Depreciation ...... )

150,195 144,267 125,166 88,591 82,322 590,541 872,551 Amortization of nuclear fuel assemblies ..... 1'1,992 11,081 49,487 1,105 33,665 33,665 Deferred investment tax credit net ........ 52,725 35,646 35,513 48,144 10,332 182,360 213,205 Deferred income taxes 77,075 67,695 91,660 85,438 44,527 366,395 427,110 Allowance for funds used during construction'otal.

, (30,006) (20,319) (16,009) (65,497) (48,486) (180,317) (294,681) 466,649 449,611 426,255 274,626 233,916 1,851,057 2,552,340 Sale of first mortgage bonds ................. 73,895 75,202 125,950 276,146 551,193 1,197,960 Reimbursement by trustee'from'pollution control and industrial development financings for construction expendituies ......'........... 18,4)6 32,291 1,894 16,284 68,945 117,856 Issuance of other long-teim debt ............. 50,081 9,000 200 5,314 64,595 267,778 Issuance of common stock 13,508 7,466 72,543 62,925 156,442 321,106 Sale of preferred stock* ...,..........,......... 49,825 506134 75,000 75,000 249,959 400,051 Sale of nuclear fuel . 60,712 60,712 60,712 froin nuclear fuel

'roceeds suit............... 26,000 26,000 26,000 Other sources 22,462 , 20,825 12,524 6,911 8,830 71,552 103,683 Decrease in'working capital 14,164 59.706 73,870 263,652 Total. ...:........................ $ 763,132 $ 635,878 $ 539,776 $ 557,124 $ 678,415 $ 3,174,325 $ 5,311,138 APPLICATION OF FUNDS:

Construction expenditures (excluding AFUDC)'... $ 509,627 $ 432,586 $ 316,434 $ 372,870 $ 422,151 $ 2,053,668 $ 3,841,634 Nuclear fuel (excluding AFUDC)'................. 35,556 19,925 42,917 31,384 31,141 160,923 184,774 Retirement,'edemption and current maturity of long-term debt and preferred stock ........... 55,810 71,617 76,405 11,687 70,032 285,551 344,178 Dividends 127,356 108,998 94,136 83,142 71,589 485,221 689,205 Other applications . 24,112 2,752 9,884 6,001 867 43,616 67,271 Increase in working capital 10,671 52.040 82,635 145,346 184,076 Total. $ 763,132 $ 635,878 $ 539,776 $ 557,124 $ 678,415 $ 3,174.325 $ 5,311 138

~

CHANGE IN WORKING CAPITALEFFECTED BY:

Increase (Decrease) in current assets:

Cash and temporary investments............... $ (26,990) $ 29,829 $ (4,824) $ (3,807) $ 9,482 $ 3,690 $ (20,105)

Accounts receivable . 29,900 13,990 (29,687) 45,068 3,968 63,239 105,924 Fossil fuel stock 57,536 197063 12,545 13,952 1,664 104,760 139,329 Other changes net. 3,638 17,107 (4,929) (1,370) 13,051 27,497 67,829 Decrease (Increase) in current liabilities:

Notes payable and current maturities of long. term debt and preferred stock ........... (24,582) (49,925) 19,029 3,490 108,853 56,865 (86,768)

Accounts payable (16,281) (6,972) (8,208) (5,722) 9,644 (27,539) (53,162)

Customers'eposits . (10,866) 5,387 (13,563) (11,060) (9,051) (39,153) (57,753)

Income taxes 44,634 (12,383) (37,064) 41,066 (42,640), (6,387) 721 Estimated revenue refunds

.................... 24,558 (24,558)

Other changes net . ~(46,318 ~(30,260 ~((7,563 (5,019) ~((2,336 ~(((,496) (175,591)

INCREASE (DECREASE) IN WORKING CAPITAL ... 8 10,671 ~$ '((4,(64 $ (59.706) S 52.040 $ 82,635 8 71,476 $ (79.576)

'Effective January 1, 1977 the Company adopted the policy of deducting only the portion of AFUDC included in Other income from funds provided from Current operations and from Construction expenditures and, commencing In 1978, Nuclear fuel. The Company had previously deducted total AFUDC.

14

0

~j. ~g. Qjjg ~ ~i~

11

Consolidated Balance Sheet (Year End) 1979 1978 1977 1976 1975 1974 1969 (Thousands of Dollars)

ASSETS:

Electric UtilityPlant (at original cost):

In service ........... $ 4,126,955 $ 3,917,301 $ 3,710,825 $ 3,447,151 $ 2,622,669 $ 2,461,325 $ 1,268,966 Held for future use .................... 110,333 108,348 110,984 45,831 52,528 51,481 12,701 Less accumulated depreciation......... 1,003,365 869,887 741,862 625,102 544,440 486,212 266,393 Net . 3,233,923 3,155,762 3,079,947 2,867,880 2,130,757 2,026,594 1,015,274 Construction work in progress .......... 1,119,820 806,471 574,813 602,481 994,081 715,740 148,256 Nuclear fuel . 101,404 151,674 129,294 86,376 54,992 23,851 Less accumulated amortization ......... 33,300 21,673 10,592 1,105 Electric utility plant net 4,421,847 4.092,234 3,773.462 3,555,632 3,179,830 2,766,185 1,163,530 Investments:

Storm and property insurance reserve fund.................... 9,562 15,099 14,406 13,838 13,838 13,838 11,268 Construction funds held by trustee ...... 858 232 743 2,637 18,921 Other 2,499 5.496 7,893 5,480 1,556 2,651 475 Total investments ............... 12,061 21,453 22,531 20,061 18,031 35,410 11,743 Current Assets:

Cash 6,663 4,952 3,824 4,648 2,543 2,972 6,920 Temporary investments................ 28,701 4,000 9,912 19,847 Accounts receivable:

Customers, less allowance........... 109,552 93,454 80,130 69,428 67,409 63,127 21,655 Employees and miscellaneous ....... 20,640 6,838 4,496 6,232 3,512 3,826 2,612 Incometaxrefunds .................

1,676 40,329 Materials and supplies at average cost . 74,906 61,765 66,662 68,211 68,851 60,852 29,914 Fossil fuel stock at average cost ...... 142,681 85,145 66,082 53,537 39,585 37,921 3,352 Other 26,710 36,213 14.209 17,589 18,320 13,268 3,875 Total current assets ............. 381,152 317,068 237,079 263,974 210,132 181,966 88,175 Deferred Debits 32,472 29,390 38,230 26,326 8,945 8,869 625 Total $ 4.847,532 $ 4,460,145 $ 4,071,302 $ 3,865,993 $ 3,416,938 $ 2,992,430 $ 1,264,073 LIABILITIES:

Common stock $ 770,350 $ 756,841 $ 749,375 $ 749,375 $ 676,832 $ 613,907 299,242 Capital stock premium and expense ...., .. (4,038) (3,751) (3,715) (3,612) (3,393) (3,090) (2,039)

Retained earnings 634,083 556,772 454,529 368,227 334,524 260,892 172,800 Total common shareholders'quity.... 1,400,395 1,309,862 1,200,189 1,113,990 1,007,963 871.709 470,003 Preferred stock without sinking fund ....... 311,250 311,250 261,250 261,250 186,250 186,250 36,250 Preferred stock with sinking fund.......... 121,250 75,000 75,000 75,000 75,000 Long-term debt 1,838.426 1,766,861 1,744,243 1,779,771 1,665,698 1,454,591 600,926 Total capitalizqtion .............. 3,671,321 3,462,973 3,280,682 3,230,011 2,934,911 2,512,550 1 ~ 107,179 Current Liabilities:

Current maturities of long. term debt and preferred stock ................. 55,200 62,618 12,693 11,687 1,713 11,597 Notes payabie 32,000 20,035 33,500 132,469 36 Accounts payable trade.............. 62,761 46,480 39,508 31,300 25,578 35,222 10,008 Customers'eposits .................. 89,986 79,120 84,507 70,945 59,884 50,833 32,233 Income taxes 12,623 57,257 44,874 '7,810 48,876 6,236 13,344 Othertaxes 72,700 35,118 33,485 28,618 28,976 30,666 10,781 Interest accrued 40,520 39,055 34,405 34,943 34,266 31,086 5,746 Estimated revenue refunds ............ 24,558 Other . 97,825 90,554 66,577 53,342 48,643 37,796 18,914 Total current liabilities ........... 463,615 410,202 316,049 283,238 281,436 335,905 91.062 Deferred Credits:

Accumulated deferred income taxes..... 448,215 370,329 299,722 219,733 118,240 73,009 12,296 Unamortized investment tax credit ...... 229,608 176,883 141,237 105,724 57,580 47,248 16,864 Other . 13,354 14,939 11,040 6,784 6,927 7,854 13,107 Total deferred credits ............ 691,177 562,151 451,999 332,241 182,747 128,111 42,267 Reserves:

Storm and property insurance .......... 9,562 15,099 14,406 13,838 13,838 13,838 11,268 Injuries and damages and other ........ 11,857 9,720 8,166 6,665 4,006 2.026 2,184 Total reserves .................. 21,419 24,819 22,572 20,503 17,844 15,864 13,452 Contributions in aid of construction ........ 10,113 Total . $ 4,847,532 $ 4,460,145 $ 4,071,302 $ 3,865,993 $ 3,416,938 $ 2,992,430 $ 1,264,073 12

Q Joseph P. Cresse (term expires January I, 1983)

Capital Expenditures Gerald L. Gunter 1980-1984 Estimated 5 Mtttona (term expires January 1. 1983)

Robert T. Mann, Chairman (term expires January I, 1982)

John R. Marks, III 707 (term expires January 1. 1982)

William T. Mayo 575 (term expires January I, 1981) 97 470 Under provisions of Florida's Sunset 375 375 Legislation. the statutory authority of the FPSC is being reviewed by the state 250 ,251 legislature. The legislature must re-enact the FPSCS authority before July I, 1980.

The legislature is expected to complete 70 71 72 73 74 75 78 77 78 79 80 Nate: tndudee nudeet lect end csee ence tte tunas used dulna ~81 82 83 84 its review during the regular session in the Spring.

In early March, 1980 the Florida Public Service Commission approved changes to In 1979 the Company entered into a annuaHy from United States Steel the fuel adjustment clause for Florida nuclear fuel lease arrangement with St. Corporation, under a five-year contract utilities. Effective April I, 1980 the fuel Lucie Fuel Company. a non-affiliated which commenced in June 1979. A adjustment factor willbe a levelized corporation, for a portion of the nuclear five-year contract with Caithness amount and willbe based on six-month fuel for St. Lucie Unit No. 1. Under the Corporation specifies deliveries of projections of fuel costs and KWH sales.

lease arrangement. St. Lucie Fuel 200.000 pounds of uranium annually. The six-month periods willrun Company purchased. in 1979, April-September and October-March.

approximately $ 61 million of nuclear fuel In 1975 FPL filed suit against A true-up of under or over recoveries from FPL for eventual lease back to the Westinghouse Electric Corporation resulting from the difference between Company. Nuclear fuel expenditures by concerning its contract for the nuclear actual and projections willbe made. The St. Lucie Fuel Company in 1980 are fuel requirements and related services, true-up amount from the previous six estimated at $ 51 million. including removal of spent fuel. for the months willbe determined in the second

'Ibrkey Point Units. With respect to the month and willbe collected or refunded Under the terms of a contract signed in uranium issue, a settlement was reached during the last four months of each 1978, International Minerals and, in late 1979. Under the terms of the succeeding six-month projected period.

Chemical Corporation willbe a major settlement. FPL received $ 26 million in Under or over recoveries during the supplier of the Company's nuclear fuel cash from Westinghouse and willbe period willbe deferred. Carrying charges, requirements. In 1980, IMC willprovide provided goods and services on favorable based on the commercial paper rate. will 500.000 pounds of uranium as a terms through 1994. The Company's be applied to under or over recoveries.

by-product of a phosphate fertilizer dispute with Westinghouse over spent There is no change in the types of fuel operation. In 1981 through 1992, one fuel removal has been tried and is costs to be Included in the clause. The million pounds willbe supplied annually. awaiting a decision by the court. Commission has provided for "special" Initial deliveries are anticipated in April hearings to deal with unusual situations 1980. by considering whether modification of .

Florida Public Service Commission the approved charges should be made.

The first and second nuclear fuel cores (FPSC)

(approximately a 5-year supply through 1981) for St. Lucie Unit No. I are under The FPSC became an appointed contract with Combustion Engineering commission in January 1979. Its five Inc. A similar contract is being members have staggered terms of office.

negotiated for St. Lucfe Unit No. 2. The term of William T. Mayo expires in January 1981, and the Governor' There are two additional contracts for appointment to fillthis position is likely uranium supply. The Company will during late 1980. The five Commissioners receive 300,000 pounds of uranium are:

A transition adjustment willtake into Commission has indicated it will the fuel adjustment dause. After being consideration the fuel expense that was reinstate the present fuel adjustment adjusted for unrecovered fuel, FPL's 1979 incurred in February and March but will dause. rate of return was 8.78'Yo only slightly not have been recovered as a result of the Future Rate Relief Needs below its authorized rate of 9.08.9.24/o.

two-month lag in the old clause. This The Company expects that future rate The test year on which the rates are amount willbe based on the difference relief needs willbe In line with FPL's goal based was 1976.

between the fuel expenses for February to keep increases in base rates over time and March and the fuel costs at or below the rate of inflation. Federal Energy Regulatory incorporated in the base rates. This total The timing of the Company's next rate Commission (FERC) amount willbe spread over a case depends on several factors. These A request for rate increase on sales to twelve. month period beginning April 1. factors indude the growth In KWH sales. customers for resale filed with FERC in 1980.

the rate of inflation, and the in-service 1977 was placed in effect March 1, 1978 The fuel adjustment dause to be dates of Martin Units Nos. 1and 2. Based subject to refund with interest. A rate implemented April 1 willnot indude an on budgeted costs and FPLs present settlement with the Company's "incentive" feature. The companies and allowed rate of return. the revenue wholesale customers has been approved the Commission'8 staff are directed to requirements are $ 77 million for Martin by FERC, under which the Company will develop incentive proposals for No. 1 and 440 million for Martin No. 2. receive increased annual revenues of consideration by the Commission prior The FPSC historically has disallowed approximately $ 3.7 million. Adequate to May 1, 1980. Unless an incentive unrecovered fuel in setting base rates, provision has been made for refunds feature is adopted and incorporated into taking the position that recovery of fuel which are required to effect final the new clause at a future date, the costs should be accomplished through settlement.

Rate Increase History FPSC 1977 1975 1973 Amount Granted $ 195.5 Million(1) $ 107 Million(2) $ 14.6 Million

$ 40.1 Million

$ 6.2 Million Effective Date of Increase July 8, 1977 May 1, 1975 January 31 1973

~

May 10, 1973 November 30, 1973 Test Year 1976 1974 1971 1972 Date Filed October 1976 August 1974 December 1971 Amount Requested $ 335 Million $ 143 Million $ 79.9 Million Interim Increase:

Granted $ 87.9 Million $ 69 Million(3)

Effective March 14, 1977 January 28, 1975 Rate of Return Allowed-% 9.08-9.24 9.04-9.20 8.57-8.76 Return on Equity Allowed % 13.50-14.00 13.50-14.00 12.75-1 3.25 (1) Orders allowed S200 million of CWIP in rate base with no AFUDC charged, normalization of current book tax timing differences. and included higher depreciation rates and annuaiizatlon of depreciation and certain fixed costs for St. Lucio No. 1.

(2) Order allowed $ 200 million ot CWIP In rate base with no AFUDC charged and full normalization of current book tax timing differences. Includes soparato collection of franchise fees equal to approxlmatoly $30 million.

(3) Portion was refunded following a Florida Supremo Court order ln December 1976.

Plants Under Construction or Planned Scheduled Net Warm Weather Completion Capability Plant FuelType- Date MW Martin Plant Unit No. 1 Oil 1980 775 Unit No. 2 Oil 1981 775 Unit No. 3 Coal 1987 700 Unit No. 4 Coai 1989 700 St. Lucie Plant Unit No. 2 Nucleary 1983 802(')

Dade County 1981 40 Resource Recovery Jacksonville Electric Authority Unit No. 1 Coal 1987 300('I Unit No. 2 Coal 1989 300(')

(1) Includes approximately 13/o which Is the minimum expected to be sold to various cooperatives and munldpaiities.

(2) FPL's share of output from proposed units to be Jointly owned with Jacksonville Electric Authority.'Combination of joint ownership and firm power purchases. Dates shown are for planning purposes. Contract between JEA and their architect-engineer specifies in service dates of 1986 and 1987.

Also planned for late in the decade are stand. by status which can be reactivated. An additional test is scheduled for two coal-fired units to be Jointly owned Reactivation would require six months to implementation in late 1980. A with the Jacksonville Electric Authority a year and obtaining certain required bi.directional telephone system willbe (JEA). The contract between JEA and permits. Current plans call for used to test customers on a time-of-day their architect-engineer specifies reactivation of 264 MW in 1988. rate, a demand rate, and load control.

in-service dates of 1986 and 1987; One thousand customers willparticipate Load Management in the two-year program.

however. In. service dates of 1987 and 1989 are used for FPL's planning As part of its planning to meet increasing demand for electricity, FPL is Capital Expenditures and Finandng purposes. Discussions are continuing with JEA regarding the two-unit plantv analyzing energy consumption by its The Company expects expenditures which willlikely be located in northeast customers and the use of various load under Its 1980-1984 construction Florida. The output of each 600 MW unit management techniques. Time-of-day program to total approximately $ 3.25 is expected to be shared on a 50/50 basis rates and utility load control are two billion. External financing in 1980 Is composed of part ownership and firm techniques under consideration as expected to total $ 450 mIHIon. This total methods of shifting electricity usage includes repayment of $32 million of power purchases.

from peak periods to off-peak periods. short-term debt outstanding at year-end Other sources of generation for the 1980's include Dade County's Resource The Company is conducting a load and $ 50 million of 8.V89o first mortgage Recovery Fadlity, which willpr9vide control test jointly with Florida Power bonds maturing in August 1980. The Corporation. The two.year test, which February 1980 sale of $ 125 million of steam to FPL for electrical generation.

Completion of the 40 MW, two-unit plant began in May 1979, utilizes a 15'irst mortgage bonds initiated the bi-directional communication system. 1980 financing program.

is scheduled for 1981. The Company also Presently 120 customers are participating FPL's long-term capitalization ratio has a co.generation agreement with U.S.

in the test by permitting FPL to control goals are 50.5Zlo long term debt. 8-Ilo Sugar Corporation to purchase power produced from the waste residue of the water heaters and air conditioning preferred stock. and 38-42% common sugar cane plant. In addition. FPL has 371 systems. The Company is analyzing test equity.

MW of fossil-fired capacity on cold results to determine possible demand reduction during peak periods.

Oil Supplies 53% to 65% during 1979, while total Company for a firm 200,000 mcf per day A contract with Exxon Company. deliveries. including deliveries of higher to June 1983. Thereafter gas supplied to U.S.A. is intended to provide a sulfur oil in lieu of 1% sulfur oil. ranged June 1988 willbe limited to gas from substantial portion of the Company's between 93% and 95% from April to July certain wells, which are supplying gas to residual oil requirements through 1981. 1979. Total deliveries were 100% the Company in June 1983. but no greater After 1981 the Exxon contract will thereafter. than 200,000 mcf per day. Transportation continue year to year until canceHed by FPL normally burns gas and low sulfur of the gas is provided by Florida Gas either party. Ifeither party elects to oil in most of its fossil-fired units in 'Bansmission Company under a firm cancel. the contract willcontinue at full order to comply with air quality contract covering the period of the quantity through the subsequent standards. In seven of its units the supply contract. In April 1979 FPL signed calendar year and then willbe phased Company has installed new oil burners a ten-year contract with Florida Gas for out over a three year period at reduced which. because of their greater efficiency, interruptible supplies of natural gas.

quantities. The Company's contract for a reduce opacity and particulate emissions. Deliveries under this contract averaged substantial portion of its distillate fuel Installation of new burners in four 51,000 mcf per day in the second half of requirements expired in February 1980. additional units is scheduled for 1980. 1979. In December 1979 deliveries of Under the terms of the residual oil In order to burn higher sulfur oil in natural gas began under an contract. Exxon is now FPL's supplier of some of the plants it was necessary to interruptible contract with Consumers distiHate oil. Additional fuel supply obtain authorization from regulatory Power Company. Under the contract, contracts are currently under negotiation. authorities to exceed emission standards. deliveries are subJect to gas and pipeline Any oil in excess of contract amounts The Company sought and obtained availability and continuance of federal needed to meet system demand willbe temporary relaxation of the state rules permits.

acquired on the open market. limiting stack emissions. Longer-term Nuclear Fuel Supply

,On March 1, 1980, contract prices at has also been obtained. State 'elief FPL's operating nudear units require Port Everglades were $ 27.49 per barrel regulatory authorities approved permanent relaxation of the State' approximately one milBon pounds of for L% sulfur oQ and $ 20.36 per barrel for uranium per year. Uranium inventory at higher sulfur oiL opacity standards. In addition, State authorities and the EPA have approved a year-end was approximately 800,000 As a result of the worldwide shortage variance for FPL from current opacity, pounds.

of crude oil, Exxon notified its customers particulate and sulfur dioxide emission Nudear fuel expenditures in 1980 are in February 1979 that it would aHocate standards. budgeted at $ 38 miHion. During the deliveries of low sulfur residual oil until period 1980 through 1984, the Company further notice. The allocation program Natural Gas Supplies estimates that nuclear fuel purchases will was continued through the year. Natural gas is supplied under a total $ 395 million, exduding purchases Allocations of 1% sulfur oil ranged from contract with Amoco Production by St. Lucie Fuel Company.

~

~ Coal Nuclear Generation by Fuel Type Percent 1980.1989 Projected

~

I,:..:t Natural Gas Oil 7.. t 58 I'13 26 28 21 22 31 30 28 27 l 15 t14

,'4 22 I 19

17

13 '3 )

,'9 i 12, 47 51 57 64 57 58 57 59 75 78 77 78 79 80 81 82 83 84 85 88 87 88 89 Nolo: Assumes o<nsns<e rsoslrs ot 7<story point stssrn esrerstors In test sr<4 I ese<

Various conservation efforts, including The test willbe conducted for 120 "full The second nuclear unit at St. Lucie Is the Watt-Wise' and Home Energy Audit power burn" days. The program could scheduled for completion in 1983. Unit programs, account for a substantial last as long as one year if multiple test No. 2 has a net waim weather capacity of reduction in the projected 1989 summer periods are utilized. The Company has 802 MW, of which approximately 139's peak. The projected 1989 summer peak received approvals from the State' the minimum expected to be sold. under has been lowered by a total of 1,705 MW environmental authorities to conduct the certain conditions, to various due to conservation. test. The application to obtain EPA cooperatives and municipalities. The approval is in process. Inclusion of the total cost of the unit is now estimated at Generation Expansion Plan project's operating and capital costs in $ 1.1 billion, up from $ 925 million. This Several changes were made in 1979 in the calculation of the monthly fuel increase reflects escalation and scope the generation expansion plan for the adjustment charge has been approved by changes. The Atomic Safety and next decade. During the year the the Florida Public Service Commission. Licensing Appeal Board held a public Company also began preparing for a test Should the experiment prove hearing to consider grid stability in late project that may provide another means financially and technically feasible, a 1979, and a decision is pending.

of introducing coal to its system. coal/oil mixture may be used in certain In the Spring of 1980. the Company other oil-burning units. thus reducing willbegin experimenting with a fuel FPL's dependency on oil. However, the Number of Tourists Visiting Florida Mririaas mixture of finely pulverized coal Company is unable to predict what O lA suspended in oil. The coal/oil mixture capital expenditures may be required to (COM) wiH be tested as a boiler fuel in satisfy environmental requirements Sanford Unit No. 4, which is designed to before the mixture could be used as a burn oiL This willbe the first test fuel in its plants.

conducted to determine the effects of Construction continues on the two rl O CV using COM in a boiler designed to burn oil-burning units at the Martin Plant.

oil. Other utilities have tested COM in with completion of Unit No. 1 expected oilers originally designed to burn coal. in late 1980 and Unit No. 2 In mid-1981.

Since there are no commercial The cost of the plant is now estimated at manufacturers of COM who can supply $ 645 million. Both units have been its needs. FPL is constructing a fuel classified as "existing" facilities pursuant preparation plant at Sanford. Certain to the Revised Interim Rules under the modifications to Unit No. 4 willalso be Power Plant and Industrial Fuel Use Act, required for the test. The coal willbe and willbe allowed to burn oil as a boiler transported to the site from Virginia by rail. It willthen be pulverized to the consistency of talcum powder and mixed with oil.

fuel.

Late in 1979 a break occurred in the embankment of the cooling reservoir at the Martin Plant, resulting in the loss of 69 70 77 73 73 74 76 78 Sooroo: Rccido Dooorooool or r979 9rorewary

~

77 78 79 the cooling water and flooding of FPL has signed a contract with Tampa Manufacturing Employment surrounding areas. Soil erosion may have Electric Company to purchase power Rorida hoUsaad9 been the cause of the break, but the from one of its coal-fired units so cause of the erosion has not been called "coal by wire". Big Bend No. 4 is IA cO definitely determined. Design scheduled to be in commercial operation n

oo ro c9 modifications to the reservoir are in the second quarter of 1985. The rf estimated to cost about $ 37 million. The Company anticipates receiving 292 MW, planned in-service date for Unit No. 1 will 208 MW, and 104 MW in the years be delayed from June to late 1980. Based 1985-1987. respectively.

on the projected 1980 summer peak of Due to the revised load forecast and to 8.990 MW. system reserves for the the contract for power from Tampa summer should be adequate. Electric, FPL has been able to defer the completion dates of its planned coal units. The two 700 MW units were planned for the Martin site in 1985 and 1987. but are now scheduled for 1987 and 1989. The estimated cost of the first coal unit has been revised to $ 1.1 billion 69 70 7r Sooroo:

73 73 74 76 76 forao Depaneow or ~

77 78 79 to reflect the later completion date.

Net Capability<< ) and Peak Load Megawatts n

C3 Purchase power from Tampa MW Electric Company 17,000 O

CA 16,000 O

JEA No. 2 15,000 cu Martin No. 4

~ 60 Minute Net Peak Load Cutler(2) 14,000 1980-1990 JEA No.1 CV Projected Mid-Point co Martin No. 3 13,000 ot Forecast Band cu St. Ludo No. 2 Martin No. 2 and 12,000 Dade County Resource Recovery Martin No. 1 11,000 zm 10,000 IA n Crt cr)

Summer Peak Load c.

Crr I~

co@A MW 60 Minute Net 9,000 CA 1980.1990 Projected 9 1969 4,329 8,000 r

1970 5,001 CA g cu 1971 5,378 1912 6,011 7,000 1973 6,894 O 1974 7,235 O~

n CA 1975 7,076 6,000 I co CA CA 1976 1977 1978 7,598 7,841 8,345 5,000 1979 8,650 1980 8,990 1981 9,250- 9,490 4,000 1982 9)520 - 10,015 1983 9,795- 10,575 3,000 1984 10,080 - 11,160 1985 10,370- 11,780 1986 10,670- 12,435 2,000 1987 10,980 - 13,125 1988 11,300- 13,885 1989 11,575 - 14,305 1,000 1990 11,850- 14,775 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 (1) Rated at continuous capability beeinntne 197B.

+ Winter peak (2) Reactivation trout cold-standby status. 9,732 MW March 1980

approximately $ 61 million was received Regulatory Commission (NRC) approval

~

from the sale of nuclear fuel to the St. to plug up to 25% of the tubes in each Residual Fuel Oil Lucie Fuel Company in connection with unit without reducing output.

Cost per Barret-Port Bverelades Month End Prico the implementation of a nuclear fuel New steam generator tube bundles.

lease for a portion of the fuel for St. Lucie which are needed for permanent repairs.

nuclear Unit No. 1. were delivered for one unit in 1979.

At year-end, the Company's Delivery of tube bundles for the other capitalization was 50.1% debt. 11.8%o unit is anticipated in the first quarter of preferred stock and 38.1%o common 1980. The Company has set a planning equity. Short-term debt outstanding date of late 1980 for the repair of Unit totaled $ 32 million. Capital expenditures No. 4. but no firm decision has been for the year totaled $ 575 million. made. The repairs are expected to take six to nine months per unit. The cost of Operating Nuclear Units the repairs is estimated at $ 61 million per FPL's three operating nuclear units, unit.

'Itirkey Point Units Nos. 3 and 4 and St.

Lucie Unit No. 1. provided 26% of total generation for the year. As a result of the UtilityPlant Investment ep>>, Mpr. June Sept Op>>.

78 78 78 7Q 78 accident at Three Mile Island. the Nptp; Epecpvp pup>>pry 21, 1140 prlpl por p<<lpr

<<pi32748rpr trrpl pp>>12042rpr2rnppa Company has made certain modifications to its units and increased personnel. and 55 intensified personnel training. 50 Allowance for Funds Used During 45 Construction (AFUDC) 40 Total AFUDC increased in 1979 due to Capitalization Ratios 35 Percent igher amounts of construction work in progress (CWIP). Total CWIP at year-end 2.5 was $ 1.1billion, an increase of $ 313 2.0 million over 1978. At year-end the Company's investment in St. Lucie Unit No. 2 and Martin Units Nos. 1 and 2 totaled $ 932 million. up $ 256 million 0.$

from the 1978 figure. 0 68 70 71 72 73 74 7578 77 '78 78 Dividends The Company's quarterly dividends on common stock were increased in 1979 to 60(7 per share. The 15/o increase brought Amendments to the operating licenses the effective annual rate to $ 2AO. This are required. During 1979 the NRC action reflects FPL's goal of moving closer allowed a petition for late intervention to the industry ratio of dividends to 63 70 71 72 73 74 7S 78 77 78 by one individual. Public hearings are earnings. Dividends have grown at a required but hearing dates have not been compound annual rate of IP/o since 1974. set.

Financing and Capital Expenditures Minor corrosion in the steam The Company has been experiencing generators of St. Lucfe No. 1 had been External financing for the year totaled problems with the steam generators in detected in 1978. During the Spring 1979

$ 188.5 million. Included in this total the two 'Iiirkey Point Units. and has were a $ 50 million bank term loan. $ 50 refueling outage, work was done to plugged certain of the pressurized water minimize future corrosion. A $ 15 million million of 8.70% preferred stock. $ 75 circulation tubes. A program of million of 12-1/8% first mortgage bonds. program to further mitigate corrosion has preventive plugging has kept the units in been approved. and portions of this and $ 13.5 million raised through the service, with no leaks between refueling issuance of common stock in connection program willbe done during the Spring outages for several years. Currently, 19.4% 1980 refueling outage.

with employee benefit plans. In addition. of the tubes in Unit No. 3 and 20.6% of the tubes in Unit No. 4 have been plugged. The Company has Nuclear

The Economy The ten-year forecast of customer and The nineteen. seventies was a decade sales growth remains about the same as Construction Contracts Let of extremes for the Florida economy. Numtter Of DWelrrntt Unttd last year's forecast, with the most Auspicious beginnings were reversed by State ol Rorkta Tttotrdanrtd probable compound annual growth rates 1975, when Florfda experfenced one of at 3.2% and 3.6%o. respectively.

its worst recessions ever. 7ypfcaHy, the In late 1979 the Company completed Florida economy tracks the U.S. economy its first direct interconnection with with approximately a one. year lag on the Georgia Power Company. vfa a 240 kv downside. Thus, the bottom of the last transmission line. The intertfe will sertous recession felt at the national level enable FPL and Georgia Power to fn 1974 was not experienced in Florida exchange power during emergencies.

until one year later. thus improving the reliability of each Recovery began in 1976. Population system. In addition. FPL has been growth, tn.migratIon. a strong tourist purchasing economy power from Georgia industry, industrial growth and a healthy Power since the interconnection was real estate market have all come together completed.

to aHow the Florida economy to close out Forecast of Summer Peak the decade on a strong note. Load'ompound Annual Florida's strong population growth Growth Rate 69 70 7t 72 76 76 7$ 76 77 76 76 conttnues to be the keystone that dourea McGraw NIL F,W, oooto Dhlsion Most provfdes the fundamental strength to the Low Probable ~Ht h economy. In 1970 the state population stood at 6.8 million. At the close of this Most professional forecasters are Five Year Rate decade population stood at 9.3 million. caHtng for a national recesston fn 1980 (1979-1984) 3.1 3.9 5.2 This is a compound annual growth rate with a variety of vfewpoints as to the Ten Year Rate of 3.5%o which compares to an annual rate length and severity of any such (1979-1989) 3.0 3.8 5.2 of 0.8% at the national level. During the downturn. FPL forecasts that the Florida Fifteen Year Rate next two decades, Florida's population is economy willexperience a slowdown (1979-1994) 2.8 3.6 4.5 expected to continue growing at a rate 1% during the first two quarters of 1980 but a recession will, fn all likelihood, be

• The possible addition of certain new to 2% above the national rate. major wholesale customers fs not In 197g the tourist industry averted. Most indicators show the Florida economy continuing to expand included in the forecast.

contributed an estimated $ 16 billion to

. the Florfda economy. Hotel/motel but at a decreasing rate.

FPL fs continuing fts nine-year occupancy rates have recovered from the Load Forecast program to promote energy conservatfon.

slowdown brought on by fuel shortages FPL continues to study the economic. An increasing number of building fn the spring of 1979, while afr travel and Jurisdictions throughout FPL's service demographic. technologfcal and soctal internatfonal tourism continue to thrive. factors which influence the demand for area are considering incorporating the Total employment reached 3.399.200 Company's Watt-Wise' program as an electricity. As part of this continuing at the end of 197g, an increase of 4.9%o study, the Company's forecasts of equivalent to the state's energy effictency over 1978, while manufacturing customers. sales and peak load were code. The Company anticipates that 35%o employment grew 5.2%, reaching a level reviewed during the year. The peak load of new single-family homes added to fts of 465.600. Manufacturing continued its forecast was revised downward slightly. system fn 1989 willbe Watt-Wise' ever-growing role in creating jobs. In Summer peak load through 1990 is now homes. The proJected 1989 summer peak 1979 one out of every seven new Jobs fn has been reduced 155 MW due to the projected to grow at a compound annual the state was fn manufacturing.

rate of 3.8%, compared to the previously impact of the Watt-Wise' program.

The construction industry experienced projected rate of 4.1%o. The downward The Company also expects 1.5/o of tts strong growth in 1979. especially the reviston reflects various energy residential customers, in the years 1980 housing industry in south Florida. Total conservation measures. including an through 1985, willtake advantage, of fts residential housing starts for the state expected greater saturation of energy Home Energy Audit program. A 75%o were 196,000 which was 22.1% greater efffctent homes and appliances. A record foHow-up rate is expected. The impact of than fn 1978. The speculatton and summer peak of 8,650 MW occurred on the audit program on the projected 1989 overbulldfng characteristic of the 1975 summer peak has been a reduction of the July 19, 1979, a 3.7/o increase over the recession do not exist today, because 1978 summer peak. FPL's highest peak to projected peak by an addittonal 50 MW.

builders have been much more cautious date was a winter peak of 9,732 MW, set and construction appears to be in line on March 3, 1980. l with the healthy demand.

G@g$ 93 1979 Compound Annual vs 1978 Growth Rates Percent Percent 1979 1978 Change 5 Year 10 Year Earnings Per Share $ 4.22 $ 4,54 (70) 89 85 ividends Paid $ 2.32 $ 2.00 16.0 11.9 93 Operating Revenues (000) $ 1,933.937 $ 1,647,226 17A 15.3 18 0 Net Income (000) $ 204.668 $ 211,241 (3. I) 14.2 14A Customers Year End (000) 2.141 2,032 53 45 58 KWH Sales (millions) 41,966 40.602 34 5.1 7.5 Use Per Residential Customer KWH- 11354 11,790 (3.7) 0.2 1.5 Revenue Per KWH Residential 4.66< 4.10/ 13.7 9.6 Utility Book Value Per Common Share $ 34.31 $ 32A9 5.6 6.0 7.9 Capital Expenditures (millions) $ 575 $ 473 21.6 External Funds (millions) $ 249 $ 152 638 Plant Investment (000) $ 5.458,513 $ 4,983.794 95 10.9 14.3 Net Warm Weather Capability at

'IIme of Summer Pea+ MW 10,957 10.886 0.7 4.0 8.0 immer Peak Load MW 8.650 8,345 7.2 (60 minute net)

Customers and Sales The increased fuel prices and the During 1979 FPL added 108,289 greater use of oil impacted the Earnings per Share and customers. At year-end the Company Dividends Paid per Share Company's fuel expense. Fuel expense was serving 2.140.587 customers, a 5.3/0 increased 47A/0 or $ 261.5 million over 3 Per Snrre increase over 1978. This increase in the 1978. Fuel expenses are reflected ln number of customers. along with a 2% revenues, after a two month lag. through decline in use per customer, resulted in a the fuel adjustment clause. Because of 3 4/0 increase in KWH sales for the year. this lag, underrecovery of fuel costs for FPL's residential customers reduced NINGS the year totaled $ 47.5 million ($ 0.60 per consumption in 1979. Average use per share) compared to $ 3.9 million ln 1978.

residential customer was 11.354 KWH. Other Operation and Maintenance some 3.7/0 less than the corresponding Expenses figure for 1978.

These expenses reflect increases in the DENOS number of customers served and the amount of electricity generated. higher New Customers Added Thousands payroH and related employee benefit costs. and the maintenance of property.

69 70 71 72 73 76 75 78 77 78 79 In addition, expenditures for safety 115 reviews and response to increased

~ 108 regulations resulting from the accident at Three Mlle Island in Pennsylvania are 87 88 Earnings included ln these expenses.

Earnings per share were $ 4.22, down A part of the increase ln expenses ls 7/0 from $ 454 in 1978. Net income was due to net interchange. In 1978 interchange deliveries, which are

$ 204.7 million, a decrease of 3/0 from the previous year. The primary reason for the recorded as a reduction of other decline in earnings ls the two month lag production expense. were $ 18.6 million.

in the Company's fuel adjustment clause, In 1979 net interchange power purchases which resulted in underrecovery of fuel were $ 4.2 million. This resulted in a costs. (See FPSC. Page 9) $ 22.8 million difference between the two years.

69 70 71 72 73 76 75 76 77 78 79 Fuel Expense Oil prices rose dramatically during 1979. The contract price for low sulfur Sources of Funds for Construction Percent oil: which was $ 14.13 per barrel at the Revenue beginning of 1979, had dlmbed to $ 26.69 The growth in KWH sales was per barrel by year.end.

reflected ln increased revenues for the Natural gas prices also increased year, as were higher fuel adjustment during the year. An interruptlble contract 60 79 25 38 revenues. For 1979, operating revenues for natural gas was signed in April 1979.

increased 17.4'r $ 287 million over FPL's contract with Sun Gas Company 1978. Much of the increase was due to expired in June. Unit prices under the fuel adjustment revenues, which were new contract are substantially higher

$ 224 million higher than those recorded than those under the expired contract.

for 1978. but still less than equivalent oil prices.

An additional lnterruptlble contract for natural gas was signed and deliveries began in December. (See Natural 40 21 Gas Supplies). Despite these actions, it was necessary to burn more oil to meet 69 70 71 72 73 76 75 76 77 78 79 increasing system demand and to replace nudear generation during refueling and maintenance outages. Oil usage increased by 3;1 million barrels.

(thz93i Page F&ORCA POWER & UGHT COMPANY Principal Offices:

9250 West Flagler Street. Miami Review of 1979 2 *c Math PO. Box 529100 Economy . 4 Miami. Florida 33152 Load Forecast 4 Phone: 305/552.4073 Generation Expansion Plan........... 5 Capital Expenditures and Financing Fuel Supply .

Regulation r E

Balance Sheet 12 Statement of Income . 13 Statement of Changes in Financial Position . 14 Retained Earnings Statement ......... 15 Quarterly Information 15 Coverage Ratios . 15 Long. term Debt 16 Schedule of Preferred Stock .......... 17 Capitalization Ratios . 17 Common Stock Statistics . 17 Schedule of Income 'Ihxes 18 Schedule of Other Ttxes . 19 This booklet has been prepared Schedule of AFUDC 19 primarily for the tnformatton Financial Statistics 20 of security analysts and UtilityPlant Statistics . 21 Institutional investors and is avatlable to other interested Customers. Sales and Revenue ........ 22 Generating Statistics . 24 persons. It Is not tntended Capability and Load 24 for use In connection wtth Substations and Miles of Line......... 2&

('I any sale. or offer for sale.

or soltcttatton of an offer Fuel Statistics .

to buy any securities. Payroll Statistics .

All financial statements Summary of Significant shown should be considered Accounting and Reporting Policies ...

0 tn con]unction with notes Officers . 27 in the Company's annual Directors .

reports. System Map .

Florida Poser R Light Company Financial R Statistical Report Supplement to 1979 Annual Report

Retained Earnings, Quarterly Financial Information, and Coverage Statistics 1979 1978 1977 1976 1975 1974 1969 CONSOLIDATED STATEMENT OF ETAINED EARNINGS (Thousands of Dollars)

Balance at beginning of year $ 556,772 $ 454,529 $ 368,227 $ 334,524 $ 260,892 $ 212,107 $ 147,537 204,668 211,241 180,438 116,845 145,221 105,474 53,427 Net income .

Total. 761,440 665,770 548,665 451,369 406,113 317,581 200,064 Deduct:

Cash Dividends:

Preferred stock:

1,181 1,181 1,181 1,181 1,181 1 181 1,181 4.50% (all series) ~

4.32% series D 216 216 216 216 216 216 216 218 218 218 218 218 218 218 4.35% series E 7.28% series F '4,368 4,368 4,368 4,368 4,368 4,368 7.40% series G 2,960 2,960 2,960 2,960 2,960 3,264 9.25% series H 4,625 4,625 4,625 4,625 4,625 2,326 10.08% series J 7,560 7,560 7,560 7,560 5,875 8.70% series K 6,525 6,525 6,525 706 8.84% series L 4,420 1117 8.70% series M 1,281 Total preferred stock 33,354 28,770 27,653 21,834 19,443 11,573 1,615 Common stock 94,002 80,228 66,483 61,308 52,146 45,116 26,549 Total dividends......... 127,356 108,998 94,136 83,142 71,589 56,689 28,164 Preferred stock redemption costs ..

Balance at end of year $ 634,083 $ 556,772 $ 454,529 $ 368,227 $ 334,524 $ 260,892 $ 172,800 Dividend Restrictions of The Charter, Mortgage and Deed of Trust and,f074% Note Indenture contain provisions which, under certain conditions, restrict the payment dividends and other distributions to common shareholders. Under the most restrictive of these provisions $ 532 million of retained earnings is available for obligations, payment of dividends on Common Stock at December 31, 1979. In the event the Company should be in arrears on its sinking fund commencing in 1980 for the 10.08% Series J Preferred Stock and in 1985 for the 8.70% Series M Preferred Stock, the Company may not pay dividends on Common Stock.

QUARTERLYINFORMATION OPERATING REVENUES First quarter $ 377,089 $ 371,901 $ 334,590 $ 273,555 $ 235,009 $ 183,848 $ 81,121 Second quarter 440,003 371,185 307,517 265,935 285,864 223,704 85,137 Third quarter 614,964 496,785 468,099 357,742 365,355 285,970 109,234 Fourth quarter 501,881 407,355 354,378 292,448 296,416 257)533 94,019 NET INCOME First quarter $ 39,261 $ 48,679 S 42,907 $ 36,644 S 34,819 $ 19,842 S 11,273 Second quarter 17,062 29,594 16,599 16,650 18,799 20,460 10,981 Third quarter, 84,208 76,774 73,108 41,004 56,519 29,808 18,204 Fourth quarter . ~ 64,137 56,194 47,824 22,547 35,084 35,364 12,969 EARNINGS PER quarter SHARE'irst

$ 0.77 $ 1.04 $ 0.90 $ 0.83 $ 0.90 $ 0.52 $ 0.39 Second quarter 0.22 0.57 0.24 0.28 0.38 '0.52 0.38 Third quarter 1.87 1.73 1.65 0.89 1.38 0.78 0.64 Fourth quarter 1.35 1.20 1.02 0.40 0.80 0.94 0.45

'May not add to total for year due to rounding.

TIMES INTEREST EARNED Before Taxes Interest onmortgage bonds . 4.2 4.6 4.3 3.1 3.9 3.2 4.5 Interest on long term debt 3.4 3.8 3.5 2.6 3.2 2.8 4.5 Total interest charges . 3.1 3.7 3.4 2.4 3.0 2.4 4.2 After Taxes Interest on mortgage bonds . 2.8 2.9 2.7 2.3 2.8 2.6 2.8 Interest on long-term debt 2.3 2.4 2.3 1.9 2.3 2.4 2.8 Total interest charges 2.1 2.3 2.2 1.8 2.2 2.0 2.6 FIXED CHARGE COVERAGE (SEC basis) .. 3.24 3.75 3.40 2.41 2.99 2.37 4.17 TIMES INTEREST AND PREFERRED DIVIDENDS EARNED (After Taxes) . 1.7 2.0 1.8 1.6 1.9 1.8 2.5 MBEDDED COST OF LONG-TERM DEBT 8.08 7.72 7.64 7.72 7.61 7.27 5.36

(%).YEAR END EMBEDDED COST OF PREFERRED 8.38 8.33 8.27 8.27 8.14 7.33 4.49 STOCK (%).YEAR END 15

Long-Term Debt December 31, 1979 (Thousands of Dollars)

Principal Series Due Amount Florida Power & Light Company:

First Mortgage Bonds (1):

8Ve% August 1980 S 50,000 3'%r/e%

November 1981 10,000

. May 1982 100,000 3'/e% . April 1983 15,000 9'/s% . May 1984 100,000 3'/s% November 1984 10,000 3'% April 1986 15,000 4Vs December 1986 15,000 4e/s% . May 1987 15,000 4'/s% . April 1988 20,000 5% June 1989 25,000 4V August 1992 25,000 4'%'% April 1994 35,000 March 1995 40,000 December 1995 40,000 6% December 1996 40,000 6e/4% December 1997 60,000 7% . June 1998 60,000 December 1998 50,000 8%. June 1999 50,000 Ye% . January2001 80,000 September 2001 100,000 7%% . June 2002 50,000 7Vs% . January 2003 70,000 8Ve% . January2004 125,000 10'/s% . March 2005 61,289 9;85% November 2005 50,000 9 June 2006 125,000 9Vs% ................................... ~ ~ ~ ~ January2008 75,000 Pollution Control Series A, 6.10% (2) January2008 19,400 12Vs% . November 2009 75,000 Total first mortgage bonds . 1,605,689 10e/4% Notes . November 1981 125,000 Note, 1% over prime February 1982 4,536 Bank Notes (under term loan agreemont) (3) .. March 1982 50,000 Installment Purchase and Security Contracts:

Dade County, 5.40% October 2007 33,850 St. Lucio County, 6%.......,................. January2004 25,000 St. Lucie County, 6.15% January2007 10,250 Manatee County, 5.90% September 2007 17,510 Putnam County Development Authority, 5.90/o September 2007 5,480 Promissory Notes:

6%-8V4% Various to September 1987 3,294 Unamortized premium and discount . 3,464 Promissory Notes of Subsidiaries:

71/2%-9Vs% . Various to December 1995 6,403 Total long-term debt 1,890,476 Less current maturities (4) 52,050 Long. term debt excluding current maturities $ 1,838,426 (1) Certain series of the Company's First Mortgage Bonds have sinking fundrequirements through1995whichmay be satisfiedby certification of property additions at the rate of 167% of such requirements. Such requirements are approximately $ 4 million for each of the next five years.

(2) Concurrently with tho execution by tho Company of an installment purchase contract relating to the financing of certain pollution control facilitios, the Company issued and pledged Pollution Control Series A First Mortgage Bonds as security for payment of pollution control revenue bonds issued by Martin County, Florida, to provide the pollution control financing to the Company.

(3) Interest is based on the current commercial loan interest rate.

(4) Annual maturities af long;term debt aro approximately $ 52 million in 1980, $ 137 million in 1981, $ 152 million in 1982, $ 16 million in 1983, and $ 1 11 million in 1984.

16

Schedule of Preferred Stock, Capitalization Percentages and Common Stock Statistics S CHEDULE OF PREFERRED STOCK, DECEMBER 31, 1979

($ 100 PAR VALUE, 5,000,000 SHARES AUTHORIZED)

Shares Series Outstanding Amount'Thousands)

Preferred stock without sinking fund requirements:

4.50% (including A, B, C) . 262,500 $ 26,250 4.32% D 50,000 5,000 4 35% E 50,000 5,000 7.28% F . 600,000 60,000 7.40% G 400,000 40,000 9.25% H 500,000 50,000 8.70% K 750,000 75,000 884%L 500,000 50,000 Total 3,112,500 311,250 Preferred stock with sinking fund requirements:

10.08% J 744,000 74,400 8.70% M 500,000 50,000 Less current maturities . ~(3(.500 ~(3.(50 Total. 1,212,500 121,250 Total preferred stock 4,325,000 $ 432,500 The 10 08% Series J Preferred Stock is entitled to a sinking fund to retire beginning April 1 1980 through April 1, 1999 a minimum of 37 500 shares and

~

a maximum of 75,000 shares annually at $ 101.50 per share, plus accrued dividends.

The 8.70% Series M Preferred Stock is entitled to a sinking fund to retire beginning April1, 1985 through April 1,1999 a minimum of 18,000 shares and a maximum of 45,000 shares annually, and beginning April 1, 2000 through April 1, 2004 a minimum of 46,000 shares and a maximum of 115,000 shares annually at $ 100 per share, plus accrued dividends.

Minimum annual sinking fund requirements are approximately $3.8 million for each of the next five years. In 1979, 6 000 shares of the 10 08% Series J Preferred Stock were purchased and retired in anticipation of the 1980 sinking fund requirement.

The Company's Charter authorizes the issuance of10 million shares of Preferred Stock, no par value, and 5 million shares of Subordinated Preferred tock, no par value, to be known as "Preference Stock." None of these shares is outstanding. I 1979 1978 1977 1976 1975 1974 1969 CAPITALIZATIONPERCENTAGES YEAR END Long-term debt (excluding current portion) ...... 50.1 51.0 53,2 55.1 56.8 57.9 54.3 Preferred stock (excluding current portion) ...... 11.8 11.2 10.2 10.4 8.9 7.4 3.3 Common equity . 38.1 37.8 36.6 34.5 34.3 34.7 42.4 COMMON SHARES OUTSTANDING Shares year end (000) 40,819 40,315 40,050 40,050 37,050 34,050 29,200 Shares weighted average (000) . 40,524 40,120 40,050 39,542 35,940 34,050 27,876 DIVIDENDS Dividends paid per share $2.32 $ 2.00 $ 1.66 $ 1.56 $ 1.435 $ 1.325 $ 0.955

%change . 16.0 20.5 6.4 8.7 8.3 14.2 6.7 Dividend payout,% 55.0 44.1 43.6 65.3 41.2 48.1 51.3 Dividend rate at year end $ 2.40 $ 2.08 $ 1.76 $ 1.56 $ 1.46 $ 1.36 $ 1.00

%change . 15.4 18.2 12.8 6.8 7.4 11.5 6.4 MARKETVALUE (NYSE)

High 28r/s 29Vs 28Ve 28r/s 27% 29'/3 38y4 Low 24'/s 23Ys 21'/e 20s/3 15%i 13t/s 32ye Close 25 26'/s 26r/e 27% 263/e 15'/e 34 PRICE EARNINGS RATIO (CLOSE) 5.9 5.8 7.1 11.6 7.7 5.6 18.3 BOOK VALUE END OF YEAR $ 34.31 $ 32.49 $ 29.97 $ 27.81 $ 27.21 $ 25.60 $ 16.10 NUMBER OF SHAREHOLDERS 35,425 32,089 31,264 31,975 31,047 30,297 27,096 EXTERNAL FUNDS $ MILLIONS $ 249 $ 152 $33 $273 $ 419 $ 425 $ 94 INTERNALGENERATION OF FUNDS FOR CONSTRUCTION  % 62 75 92 47 36 21 44 17

Schedule of Income Taxes 1979 1978 1977 1976 1975 1974 1969 (Thousands of Dollars) )

FEDERAL:

Charged to operating expenses:

Current $ 8,887 $ 73,659 $ 37,573 $ (49,374) $ 52,711 $ 12,736 $ 49,386 Deferred:

Accelerated depreciation ......... 52,429 53,220 46,521 53,375 29,437 22,960 Debt component of AFUDC ....... 10,276 6,405 5,983 13,357 7,691

-Repair allowance . 4,863 5,117 8,913 20,472 Estimated revenue refunds ....... (188) (854) (11,198)

Other 6,915 (763) 2,583 1,628 4,956 3,701 Deferred in prior years:

Accelerated depreciation ......... (2,879) (1,934) (3,078) (862) (628)

Debt component of AFUDC ....... (770) (662) (526) (54)

Repair allowance . (1,078) (931) (709) (764)

Estimated revenue refunds ....... 765 11,198 Other (1,428) 2,002 2,371 902 (1,426) (886) (923)

Charge equivalent to the investment tax credit 66,790 47,535 46,628 51,230 12,527 9,254 3,024 Amortization of investment tax credit .... ~5.291 (4,695) (3,655) ~2.139 2,19 ~(I,78 ~640(

Total 139,291 178,099 153,802 76,573 103,073 45,978 50,847 Charged to other income:

Current (33) (7,878) 245 (4,849) (10,539)

Deferred net 42 (585) 9,247'212)

Totalfederal 139,300 177,302 155,171 76,818 98,224 35,439 51,394 STATE:

Charged to operating expenses:

Current . 8,629 13,320 9,155 212 7,252 2,405 Deferred:

Accelerated depreciation .... 6,113 5,835 5,099 5,851 3,228 2,518 Debt component of AFUDC .. 1,i176 702 665 1,484 855 Repair allowance . 561 561 977 2,245 Estimated revenue refunds .. (22) (94) (1,228)

Other 784 (84) 284 178 543 405 Deferred in prior years:

Accelerated depreciation .... (310) (198) (332) (53) '69)

Debt component of AFUDC .. (86) (73) (58) (6)

Repair allowance . (119) (102) (78) (84)

Estimated revenue refunds .. 84 1,228 Other (6tl 197 356 196 (60)

Total 16,753 20,064 17,296 8,795 11,749 5,328 Charged to other income:

Current 34 Deferred net .

16,778 21 4 ~64 '.014'0,034 17,485 (825) 8.848 (501) 11,248 (1,137) 4,191 state 'otal TOTAL INCOME TAXES $ 156,078 $ 197,336 $ 172,656 $ 85,666 $ 109,472 $ 39,630 ~ $ 51,394

'Deferred federal and state income tax provisions charged to Other income in 1977 related to cancelled project costs.

INCOME TAXES (as percent of pre-tax income)

Computed at statutory rate . 46.tP/o 48 00/0 48 0'/0 48'/0 48 tP/0 48.0 /o 52.8%

Increases (Reductions) in Income tax resulting from:

Pension costs and taxes capitalized ...... (3.3) (0.4)

Allowance for funds used during construction . (4.5) (2.4) (2.2) (8.6) (6.0) (13.2)

Depreciation (0.1) (3.5) (1.6)

State income taxes net of federal income tax benefits............ 2.5 2.6 2.6 2.3 2.3 ~ 1.5 Other net joO 0.1 0.5 0.6 (1.2) (2 2)

Total income taxes . 43.3% 48.3% 48.90/o 42.3% 43.0% 27.3%

Schedules of Other Taxes and Allowance for Funds Used During Construction (AFUDC)

SCHEDULE OF OTHER TAXES 1979 1978 1977 1976 1975 1974 1969 (Thousands of Dollars) axes other than Federal and State income taxes:

Federal and State payroll .... $ 13,928 $ 11,343 $ 9,506 $ 8,888 $ 7,366 $ 6,971 $ 2,283 Real and personal property .. 41,705 41,308 38,848 30,272 24,864 20,939 14,1 12 State gross receipts ........ 27,981 23,955 21,125 18,040 16,832 13,949 5,427 Franchise charges.......... 66,866 55,862 47,967 40,650 38,748 30,022 10,045 Miscellaneous ............. 17,229 14,907 7,929 8,532 12,450 15,230 2,843 Total other taxes...... $ 167,709 $ 147,375 $ 125,375 $ 106,382 $ 100,260 $ 87,111 $ 34,710 Charged to:

Operating expenses other taxes ... $ 149,774 $ 132,205 $ 117,807 $ 96,972 $ 87,558 $ 71,241 $ 31,365 Utilityplant and other accounts ...... 17,935 15,170 7,568 9,410 12,702 15,870 3,345 Total..................... $ 167,709 $ 147,375 $ 125,375 $ 106,382 $ 100,260 $ 87,111 $ 34,710 SCHEDULE OF AFUDC 1979 1978 1977 1976 1975 1974 1969(5)

(Dollars in Millions)

Monthly Average Construction Work in Progress (CWIP) . $ 970.1 $ 669.9 $ 625.2 $ 1,068.0 $ 854.3 $ 608.8 Less:

Fixed amount included in rate base (1) ...... 200.0 200.0 200.0 200.0 150.0 Pollution control projects 23.2 25.9 9.3 AFUDC previously capitalized and includedinmonthlyaverageCWIP ....... 97.9 60.9 60.3 126.7 91.9 52.9 Other 53.2 76.9 53.4 31.1 65.5 50.3 CWIP base used for computing AFUDC ......... 619.0 332.1 311.5 687.0 521.0 496.3 Nuclear fuel base for computing AFUDC (3)...... 30.5 46.3 Total base for computing AFUDC 649.5 378.4 311.5 687.0 521.0 496.3 Capitalization rate (2) 9.06% 9.1IP/o 9.28'/o 9.33% 9.04% 8.00/o Total. 58.8 34.4 28.9 64.1 47.1 39.7 Interest on pollution control revenue bonds charged to specific projects 1.4 1.4 2 Total AFUDC charged to CWIP and nuclear fuel .. 58.8 34.4 28.9 65.5 48.5 39.9 mount credited to interest charges (3).......... 28.8 14.1 12.9 Amount credited to other income (3) t ............ $ 30.0 $ 20.3 $ 16.0 $ 65.5 $ 48.5 $ 39.9 Tax effect of debt portion of AFUDC (4):

(1) charged to operating expenses (current provision for income taxes) and credited to other income (taxes on other income) .. $4.6 $ 10.8 (2) for which deferred taxes have been provided .. $ 11.5 $ 7.1 $ 6.6 $ 14.8 $ 8.5 AFUDC RATIOS:

Net AFUDC per share (included in earnings per share) $ 1.17 $ 0.68 $ 0.56 $ 1.28 $ 1.11 $ 1.17 Percent of Net income Applicable to Common from AFUDC % . 27.7 15.0 14.6 53.6 31.9 42.5

( 1) Commencing April 1, 1975 the Company has included $ 200 million of CWIP in its rate base as permitted by the FPSC in the 1975 and 1977 rate orders.

(2) The AFUDC rate is determined by a formula set by the FPSC. The rate prior to March 31, 1975 was based upon the actual capital ratios at the beginning of each year for each component of capital applied td its cost ratio with the Interest component being reduced by the applicable income taxes and common equity being based on a reasonable estimate. Effective April 1,1975 the rate is calculated by applying the capital ratio of eaclicomponent of capital to its current embedded cost, except common equity, for which the rate allowed in the Company's last retail rate case is used as its embedded cost. The debt component is not reduced by the applicable income taxes. A formula is also provided by FERC for computing the maximum AFUDC rate. The rate used by the Company to compute AFUDC does not exceed the maximum established by FERC.

(3) The Uniform System of Accounts was revised effective January 1, 1977 to require recording the portion of AFUDC attributable to borrowed funds as a reduction of interest charges and the portion attributable to other funds as Other income. The order did not require retroactive reclassification of AFUDC.

Commencing in 1978 the Company, with FPSC approval, capitalized AFUDC on its investment in nuclear fuel in excess of the amount in the Company's rate base.

In 1977 and1978 the allocation of total AFUDC between borrowed funds and other funds was based on the respective proportions of the borrowed funds component and the other funds component of the total AFUDC amount determined by using the formula set by the FPSC. In1979, as a result of a FERC directive, the Company began allocating total AFUDC between borrowed funds and other funds by computing the borrowed funds component using the FERC formula, with the residual AFUDC being reported as the other funds portion; thus, while the FPSC formula is still utilized to compute the total amount of AFUDC, the borrowed funds portion in 1979 is identical to that which would be reported If the FERC formula were being used. The FERC formula differs from the FPSC formula in that it assumes short-term borrowings are the first source of funds for construction, but excludes accumulated deferred income taxes. The Company has continued to provide deferred income taxes on the borrowed funds portion of AFUDC determined by the FPSC formula.

(4) Allowed by the FPSC as an operating expense for rate making purposes.

(5) Effective May 1, 1971, the Company commenced capitalization of AFUDC.

19

Financial Statistics DISTRIBUTION OF INCOME BEFORE 1979 1978 1977 1976 1975 1974 1969 INTEREST PERCENT Interest charges net 38.5 38.4 42.1 54.6 46.2 49.4 37.8 Preferred dividend requirements ........ 10.1 8.5 8.9 8.7 7.4 5.6 Net income applicable to common stock . 51.4 53.1 49.0 36.7 46.4 45.0 60.3 PERCENT OF OPERATING REVENUE Operating Expenses Fuel oil . 35.7 27.3 28.0 33.9 33.1 35.6 9.5 Fuel-gas . 4.6 4.6 4.1 5.1 4.6 5.0 10.2 Fuel nuclear 1.7 1.6 1.8 1.5 1.3 1.5 Total fuel 42.0 33.5 33.9 40.5 39.0 42.1 19.7 Other generation expenses 8 interchange .. 2.4 1.0 1.0 1.3 1.6 1.7 1.4 Transmission operation ................ .4 ,4 .4 .4 .3 .4 .6 Distribution operation . 2.3 2.4 2.6 3.4 2.7 3.2 4.8 Customers and administrative

& general operation 8.6 9.3 8.8 9.8 8.9 9.1 11.4 Maintenance . 5.1 5.2 4.6 5.6 5.1 6.0 6.4 Depreciation . 7.8 8.8 8.6 7.5 7.0 7.9 10.3 Taxes other than income taxes............ 7.7 8.0 8.0 8.2 7.4 7.5 8.5 Income taxes . 8.1 12.1 11.7 72 9.7 5.4 13.8 Total operating expenses .......... 84.4 80.7 79.6 83.9 81.7 83.3 76.9 Operating income 15.6 19.3 20.4 16.1 18.3 16.7 23.1 Other income net 1.6 1.5 .9 5.5 4.5 5.2 .2 Income before interest 17.2 20.8 21.3 21.6 22.8 21.9 23.3 Interest charges net 6.6 8.0 9.0 11.8 10.5 10.8 8.8 Net income . 10.6 12.8 12.3 9.8 12.3 11.1 14.5 Preferred dividend requirements............ 1.8 1.8 1.9 1.9 1.7 1.2 .4 Net income applicable to common stock ..... 8.8 11.0 10.4 7.9 10.6 9.9 14.1 OPERATING REVENUE, EXPENSES AND INCOME MILLS PER KWH SOLD Revenue Revenue from energy sales ............... 45.7 40.3 38.7 33.8 34.4 28.9 Other revenue .4 3 3 3 3 2 Total operating revenue............. 46.1 40.6 39.0 34.1 34.7 29.1 18.1 Operating expenses Fuel oil 16.5 11.1 10.9 11.5 11.5 10.3 1.7 Fuel gas 2.1 1.8 1.6 1.8 1.6 1.5 1.8 Fuel-nuclear .8 .7 .7 .5 .4 .4 Total fuel 19.4 13.6 13.2 13.8 13.5 12.2 3.5 Other generation expense and Interchange .. 1.1 .4 .4 .5 .5 .5 .3 Transmission operation ................. .2 .1 .1 .1 .1 .1 .1 Distribution operation. 1.0 1.0 1.0 1.2 1.0 .9 .9 Customers and administrative

& general operation .................. 3.9 3.8 3.5 3.3 3.1 2.6 2.1 Maintenance 2.4 2.1 1.8 1.9 1.8 1.8 1.1 Total operation and maintenance..... 28.0 21.0 20.0 20.8 20.0 18.1 8.0 Depreciation 3.6 3.5 3.3 2.5 2.4 2.3 1.9 Taxes other than Income taxes............. 3.6 3.3 3.1 2.8 2.5 2.2 1.5 Income taxes 37 4,9 4.6 2.5 3.4 1.6 2.5 Total operating expenses ........... 38.9 327 31.0 28.6 28.3 24.2 13.9 Operating income 72 7.9 8.0 5.5 6.4 4.9 4.2 Other income net .7 .6 .3 1.9 1.5 1.5 Income before interest 7.9 8.5 8.3 7.4 7.9 6.4 4.2 Interest charges net 3.0 3.3 3.5 4.1 3.6 3.1 1.6 Net income . 4.9 5.2 4.8 3.3 4.3 3.3 2.6 Preferred dividend requirements............. .8 .7 .7 .6 .6 .4 .1 Net income applicab'ie to common ........... 4.1 4.5 4.1 2.7 37 2.9 2.5 20

UtilityPlant Statistics DETAILOF UTILITYPLANT IN SERVICE 1979 1978 1977 '1976 1975 1974 1969 (000) YEAR END Production Steam . $ 839,487 $ 834,932 $ 811,163 $ 747,522 $ 528,908 $ 542,408 S 423,437 Nuclear . 784,195 768,752 754,028 726,073 244,361 235,512 Gas turbines and combined cycle..... 273,469 272,507 227,871 171,797 170,973 166,236 Total production .............. 1,897,151 1,876,191 1,793,062 1,645,392 944,242 944,156 423,437 Transmission 620,601 554,175 535,962 491,497 435,053 407,754 240,399 Distribution . 1,445,882 1,331,319 1,233,060 1,165,586 1,104,132 1,053,394 559,628 General and other 163,321 155,616 148,741 144,676 139,242 85,973 45,502 Contributions in aid of construction Unclassified (29,952)

Total plant in service .......... $ 4,126,955 $ 3,917,301 $ 3,710,825 $ 3,447,151 $ 2,622,669 $ 2,461,325 $ 1,268,966 DEPRECIABLE PLANT $ 4,079,644 $ 3,871,282 $ 3,665,367 $ 3,367,053 $ 2,552,434 $ 2,400,306 $ 1,235,825 CAPITAL EXPENDITURES (000)'roduction S 297,738 S 272,697 S 213,363 S 329,179 $ 323,599 S 362,858 $ 67,586 Transmission 109,346 61,680 34,130 35,567 38,342 67,322 12,410 Distribution . '26,449 102,113 75,029 65,900 80,283 131,467 62,932 General and other 4,848 13,960 9,921 7,720 23,868 43,156 6,302 Total construction ...... 538,381 450,450 332,443 438,366 466,092 604,803 149,230 Nuclear fuel 36,444 22,380 42,917 31,384 - 31 141

~ 143 Total $ 574,825 $ 472,830 $ 375.360 S 469,750 $ 497,233 $ 604,946 $ 149,230

'Includes AFUDC

SUMMARY

OF NET CHANGE IN PLANT (000)

Nuclear $ (50,269) $ 22,380 S 42,917 S 31,384 $ 31,142 $ 143 S fuel'ross additions (net of transfers) ........... 551,726 458,391 317,613 442,153 471,719 607,239 149,197 Contributions in aid of construction ......... (9,073) (7,424) ~(4,390 (3.515) ~2.435 (3,041)

Total. .. 492,384 473,347 356,140 470,022 500,423 604,341 149,197 Less plant retired or sold .................. 17,665 15,469 12,064 12,453 28,550 15,889 7,915 Net change in total plant........... $ 474,719 $ 457,878 $ 344,076 $ 457,569 $ 471,873 $ 588,452 $ 141,282

'Reflects sale of nuclear fuel and proceeds from nuclear fuel suit.

PLANT RATIOS (all at Year End)

Composite depreciation rate ............... 3.7 3.8 3.7 3.4 3.4 3.3 3.3 Depreciation expense as a percent of average depreciable plant ............... 3.78 3.83 3.56 3.32 ,3.29 3.'26 Accumulated depreciation as a percent of-Total plant (excluding nuclear fuel) ........ 18.7 18.0 16.9 15.3 14.6 15.1 18.6 Plant in service 24.3 22.2 20.0 18.1 20.8 19.8 21.0 Depreciabie plant 24.6 22.5 20.2 18.6 21.3 20.3 21.6 Plant in service per-Dollar of revenue $ 2.13 $ 2.38 $ 2.53 S 2.90 S 2.22 $ 2.59 $ 3.43 Thousand KWH sold.................... 98.34 96.48 98.88 98.69 76.89 75.24 62.07 KW of capacity 376.65 358.04 348.63 353.92 293.79 273.03 249.65 Customer 1,927.96 1,927.52 1,925.03 1,873.41 1,479.81 1,429.47 1,039.16 Percentage of mortgage debt'o-Total utility plant (excluding nuclear fuel) ... 29.0 31.7 32.9 37.1 38.5 37.2 41.5 Net utility plant (excluding nuclear fuel) .... 35.7 38.6 39.6 43.8 45.2 43.8 51.0 Percentage of long. term debt'o-Total utility plant 33.7 36.6 3L5 42.6 44.7 44.7 42.0 Net utility plant 41.6 44.6 46.2 50.1 52.4 52.6 51.6 CWIP as a percent of net utility plant (exc!uding nuclear fuel) ................. '25.7 20.4 15.7 17.4 31.8 26.1 12.7 Operating income as a percent of net utility plant 6.8 7.8 7.9 5.4 6.8 ~ 5.7 7.3

'Excluding current portion of long-term debt.

Customers, Sales and Revenue Statistics

, (See notes below for various reclassifications of customers.)

1979 1978 1977 1976 1975 1974 1969 CUSTOMERS YEAR END Residential 1,916,615 1,818,468 1,725,117 1,647,632 1,587,709 1,541,861 1,086,360 Commercial . 206,977 197,278 187,808 179,914 173,346 169,222 118,420 Industrial 15,005 14,660 12,900 10,736 9,525 9,090 5,002 Other Sales To Public Authorities . 1,946 1,849 1,803 1,718 1,684 1,628 11,340 Other Electric Utilities ........... 44 43 40 43 40 40 29 Total 2,140,587 2,032,298 1,927,668, 1,840,043 1,772,304 1,721,841 1,221 151

~

CUSTOMERS YEAR END PERCENTAGE CHANGE FROM PREVIOUS YEAR Residential 5.4 5.4 4.7 3.8 3.0 5.6 6.6 Commercial 4.9 5.0 4.4 3.8 2.4 .9 5.8 Industrial . 2.4 13.6 20.2 12.7 4.8 77.2 5.3 Other Sales To Public Authorities . 5.2 2.6 4.9 2.0 3.4 3.7 8.0 Other Electric Utilities ........... 2.3 7.5 (7.0) 7.5 (7 0) 7.4 Total 5.3 5.4 4.8 3.8 2.9 5.3 6.5 CUSTOMERS AVERAGE Residential 1,854,884 1,758,838 1,677,532 1,607,015 1,555,834 1,498,262 1,045,744 Commercial 202,673 192,850 184,676 177,046 171,575 168,991 115,712 Industrial . 14,837 13,799 11,796 9,994 8,977 7,147 4,924 Other Sales To Public Authorities . 1,903 1,834 1,777 1,700 1,653 1,596 10,938 Other Electric Utilities ........... 43 43 44 42 40 39 29 Total 2,074,340 1,967,364 1.875.825 1,795,797 1,738,079 1,676,035 1,177,347 KWH SALES (000)

Residential 21,059,710 20,736,196 19,073,675 17,625,344 17,312,499 16,802,406 10,277,902 Commercial . 14,374,287 13,748,346 12,885,079 12,117,063 11,850,752 11,041,205 5,689,152 Industrial . 3,147,448 2,992,722 2,756,289 2,596,480 2,534,485 2,645,724 1,813,880 Other Sales To Public Authorities . 821,581 820,909 802,571 789,869 809,421 746,990 2,015,657 Sub-total Retail........... 39,403,026 38,298,173 35,517,614 33,128,756 32,507,157 31,236,325 19,796,591 Other Electric Utilities ........... 2,562,784 2,303,903 2,011,783 1,800,785 1,603,741 1,474,811 648,581 Total 41,96S,810 40,602,076 37,529,397 34,929,541 34,110,898 32,711,136 20,445,172 KWH SALES PERCENT Residential . 50.2 51.0 50.8 50.5 50.8 51.4 50.3 Commercial . 34.2 33.9 34.3 34.7 34.7 33.7 27.8 Industrial ...................... 7.5 7.4 7.4 7.4 '.4 8.1 8.9 Other Sales To Public Authorities . 2.0 2.0 2.1 2.3 2.4 2.3 9.8 Other Electric Utilities ........... 6.1 5.7 5.4 5.1 4.7 4.5 32 Total . 100.0 100.0 100.0 100.0 100.0 100.0 100.0 KWH SALES PERCENT CHANGE FROM PREVIOUS YEAR Residential . 1.6 8.7 8.2 1.8 3.0 (1) 19.0 Commercial . 4.6 6.7 6.3 2.2 7.3 8.5 8.3 Industrial . 5.2 8.6 6.2 2.4 (4 2) (4.0) (18.2)

Other Sales To Public Authorities ... 0.1 2.3 1.6 (2.4) 8.4 (45.0) 77.5 Other Electric Utilities ............. 11.2 14.5 11.7 12.3 8.7 9.2 28.0 Total . 3.4 8.2 7.4 2.4 4.3 .8 15.2 During May and June, 1973, approximately 12,600 customers were transferred from Other Sales To Public Authorities as follows:

7,000 to Residential; 5,600 to Commercial.

During 1974, customers previously being classified as Residential and Commercial were transferred to Industrial.

NASA and USAF at Cape Kennedy transferred from Industrial to Other Sales To Public Authorities effective November 1968.

22

Customers, Sales and Revenue Statistics (See notes on previous page for various reclassifications of customers.)

1979 1978 1977 1976 1975 1974 1969 EVENUE FROM ENERGY SALES (000)

Residential $ 981,323 $ 849,465 $ 755,538 $ 616,794 $ 610,952 $ 496,307 $ 196,009 Commercial 696,739 587,208 523,711 426,737 426,191 333,062 114,566 Industrial 121,341 101,806 89,564 73,070 73,790 63,301 23,786 Other Sales To Public Authorities ....... 41,215 36,419 33,432 28,161 27,958 21,457 27,912 Other Electric Utilities ................. 78,095 59,213 51,257 36,331 35,474 29,170 5,521 Total $ 1,918,713 $ 1,634,111 $ 1,453,502 $ 1,181,093 $ 1,174,365 $ 943,297 $ 367,794 REVENUE FROM ENERGY SALES (%)

Residential 51.1 52.0 52.0 52.2 52.0 52.6 53.3 Commercial 36.3 36.0 36.0 36.1 36.3 35.3 31.1 Industrial . 6.3 6.2 6.2 6.2 6.3 6.7 6.5 Other Sales To Public Authorities ...... 2.2 2.2 2.3 2.4 2.4 2.3 7.6 Other Electric Utilities ................ 4.1 3.6 3.5 3.1 3.0 3.1 1.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 REVENUE FROM ENERGY SALES PERCENT CHANGE FROM PREVIOUS YEAR Residential 15.5 12.4 22.5 1.0 23.1 29.9 16.4 Commercial . 18.7 12.1 22.7 0.1 28.0 39.4 9.5 Industrial 19.2 13.7 22.6 (1.0) 16.6 35.9 (10.5)

Other Sales To Public Authorities .. 13.2 8.9 18.7 0.7 30.3 (16.9) 44.4 Other Electrfc Utilities ............ 31.9 15.5 41.1 2.4 21.6 78.4 27.6 Total 17.4 12.4 23.1 0.6 24.5 32.9 13.8 EVENUE FROM ENERGY SALES

~ PER KWH Residential . 4.66 4.10 3.96 3.50 3.53 2.95 1.91 Commercial 4;85 4.27 4.06 3.52 3.60 3.02 2.01 Industrial 3.86 3.40 3.25 2.81 2.91 2.39 1.31 Other Sales To Pubgc Authorities .. 5.02 4.44 4.17 3.57 3.45,2.87 1.38 Other Electric Utilities ............ 3.05 2.57 2.55 2.02 2.21 1.98 .85 Total 4.57 4.02 3.87 3.38 3.44 2.88 1.80 REVENUE FROM ENERGY SALES PER CUSTOMER Residential $ 529.05 $ 482.97 $ 450.39 $ 383.81 $ 392.68 $ 331.26 $ 187.43 Commercial 3,437.75 3,044.89 2,835.83 2,4'I0.32 2,483.99 1,970.89 990.10 Industrial . 8,178.28 7,377.78 7,592.74 7,311.42 8,219.91 8,856.98 4,830.69 Total ................. $ 924.97 $ 830.61 $ 774.86 $ 657.70 $ 675.67 $ 562.81 $ 312.39 KWH SALES PER CUSTOMER Residential 11,354 11,790 11,370 10,968 11 127

~ ,11,215 9,828 Commercial . 70,924 71,290 69,771 68,440 69,070 65,336 49,166 Industdal . 212,135 2'I6,880 233,633 259,804 282,331 370,187 368,375 Total . 20,231 20,638 20,007 19,451 19,626 19,517 17,365 DEGREE DAYS (Miami)

Cooling-Residential

.............. 4,942 4,990 4,978 4,689 5,443 5,413 5,073 Cooling Commercial ............. 6,025 6,036 6,143 5,787 6,430 6,592's 5,880 Heating (October of previous year to April of current year) ............. 156 310 252 188 59 119 .

Generating and Other Statistics KWH GENERATED. INTERCHANGED (000)

Steam residual oil .

Steam gas 1979 23,869,279 7,818,746 1978 21,776,179 8.100,194 1977 18,842,476 7,781,943 1976 20,535,424 8,277,336 1975 18,832,184 8,835,555 1974 17,745,767 9,154,695 1969 11,980,81~

10,383,050

~

Total steam ............... 31,688,025 29,876,373 26,624,419 28,812,760 27,667,739 26,900,462 22,363,866 Gas turbine distillate ........... 248,205 232,044 421,627 655,225 971,553 683l554 Gas turbine gas ............... 576,176 479.765 311 146

~ 198,553 174,925 161,524 Total gas turbines .......... 824,381 711,809 732,773 853,778 1,146,478 845,078 Nuclear 11,615,095 13,273.383 13,452,276 8,647,474 8,369,810 7,877,326 Combined cycle oil ............. 622,485 569,943 367,047 87,050 Generated net . 44,749,986 44,431,508 41,176,515 38,401.062 37,184,027 35,622,866 22,363,866 Interchanged-net .............. 582,594 (726,630) (465,827) (376,303) (32,627) (157,812) (145,802)

Company use andlosses ......... 3,366,770 3,102,802 3,181,291 3,095,218 3,040,502 2,753,918 1,772,892 Energysold ............... 41,965,810 40,602,076 37,529,397 34,929,541 34,110,898 32,711 136 ~ 20,445,172 GENERATION BY.FUEL TYPE (%)

Residual Oil 53.3 49.0 45.7 53.4 50.6 49.8 53.6 Natural Gas 18.8 19.3 19.7 22.1 24.3 26.2 46.4 Distillate oil 0.5 0.5 1.0 1.7 2.6 1.9 Nuclear 26.0 29.9 32.7 22.5 22.5 Combined cycle oil .......... 1.4 1.3 0.9 0.3 22.1 NET CAPABILITY KW (year end)

Lauderdale 1,126,000 1,126,000 1,126,000 1,162,000 1,183,000 1,183,000 290,000 Riviera . 653,000 653,000 544,000 544,000 692,000 692,000 694,000 Miami . 45,000 45,000 Cutler . 287,000 330,000 327,000 Sanford . 861,000 861,000 861,000 873,000 918,000 918,000 145,000 Pylatka . 113,000 113,000 114,000 Ft. Myers . 1 176,000 1,176,000 1,176,000 1,176,000 1,207,000 1,207,000

~

556,000 Port Everglades 1,581,500 1,581,500 1,581,500 1,599,500 1,657,500 1,657,500 1,254,500 Cape Canaveral 729,000 729,000 729,000 729,000 762,000 762,000 822,00 Manatee....... 1,528,000 1,528,000 1,528,000 775,000 St. Lucie . 777,000 777,000 777,000 802,000 Turkey Point 2,079,500 2,079,500 2,079,500 2,079,500 2,107,500 2,107,500 835,500 Putnam . 446,000 430,000 242,000 Total . 10,957,000 10,941,000 10,644,000 9,740,000 8,927,000 9,015,000 5,083,000 Rated at continuous capability beginning 1976.

An additional five units with a total of 371 MW of installed capability are on extended cold standby.

CAPABILITYAT THE TIME OFSUMMERPEAK MW . 10,957 10,886 9,644 8,646 9,015 9,015 5,083

%change . 0.7 12.9 11.5 (4.1) 8.5 18.3 SUMMER PEAK DEMAND MW (60 minute-net) .... 8,650 8,345 7,841 7,598 7,076 7,235 4,329

%change'. 3.7 6.4 3.2 7.4 (2.2) 5.0 14.3 RESERVE CAPABILITY-

%attimeofsummerpeak .. 26.7 30.4 23.0 13.8 27.4 24.6 17.4 WINTER PEAK DEMAND MW(60minute net) .... 8,791 8,617 8,606 7,287 5,807 6,258 3,751

% change 2.0 0.1 18.1 25.5 (7.2) 6.9 13.1 LOAD FACTOR-(60 minute) ... 59 58 54 57 60 56 59 SUBSTATIONS Number 418 404 393 374 347 Capacity MVA 58,595 57,280 56,152 51,116 47,047 319 44,518 261 29,467 MILES OF ELECTRIC LINES Transmission . 4,079 3,974 3,939 3,933 3,819 3,700 3 223 Distribution 36,124 34,715 33,628 32,677 31,755 30,453 24,050 Total 40,203 38,689 37,567 36,610 35,574 34,153 27,273 24

Fuel and Payroll Statistics 1979 1978 1977 , 1976 1975 1974 1969 EL USED Barrels oil (000) 39,567 36,452 31,717 34,696 32,302 30,058 18,687

%change . 8.5 14.9 (8.6) 7.4 7.5 (13.3) (0.2)

MCF natural gas (000) . 92,034 92,197 86,976 92,152 97,155 100,495 108,634

%change . (0.2) 6.0 (5.6) (5 1) (3.3) (4 9) 40.4 Equiva! ent barrels-natural gas (000) .. 13,945 13,969 13,178 13,962 14,720 15,227 16,460 Nuclear fuel consumed (MmBtu) (000) .. 132,701 151,371 151,791 98,699 95,043 86,512

% change . (12.3) (0.3) 53.8 3.8 9.9 77.1 Equivalent barrels nuclear (000) ..... 20,997 23,951 24,018 15,617 15,038 13,689 Total barrel equivalent (000) ........... 74,509 74,372 68,913 64,275 62,060 58,974 35,147 15.4

%change . 0.2 7.9 7.2 3.6 5.2 1.0 FUEL COST Cost per barrel residual oil ........... $ 17.26 $ 12.23 $ 12.86 $ 11.53 $ 12.13 $ 11.26 $ 1.88

%change . 41.1 (4.9) 11.5 (4 9) 7.7 155.3 (6.0)

Cost per barrel distillate oil ........... $ 23.17 $ 14.62 $ 14.26 $ 13.36 $ 12.16 $ 11.50

%change . 58.5 2.5 6.7 9.9 5.7 109.9 Cost per MCF-natural gas ............ $ 0.963 $ 0.818 $ 0.693 $ 0.667 $ 0.553 $ 0.475 $ 0.348

% change .>>. 17.7 18.0 3.9 20.6 16.4 16.1 2.1 Cost per equivalent barrel natural gas .. '6.36 $ 5.40 $ 4.57 $ 4.40 $ 3.65 $ 3.14 $ 2.30 Cost per MmBtu nuclear ............. $ 0.250 $ 0.175 $ 0.174 $ 0.180 $ 0.167 $ 0.158

% change . 42.9 0.6 (3.3) 7.8 5.7 (0.6)

Cost per equivalent barrel nuclear..... $ 1.58 $ 1.11 $ 1.10 $ 1.14 $ 1.05 $ 1.00 Cost per equivalent barrel all fuels..... $ 10.91 $ 7.41 $ 7.21 $ 7.50 $ 7.43 $ 6.78 $ 2.07

%change . 47.2 2.8 (3.9) 0.9 9.6 93.7 (1 0)

FUEL COST PER MILLIONBTU Steam residual oil 197.8>> 1 86.7>> 1 96.5>> 183.6>>

Steam gas . 276.2'6.0>>

81.6>>

208.0'9.7>>

66.6>> 55.2>>

29.9'4.8>>

Gas turbines distillate oil ..... 398.9>> 252.3>> 246.4>> 231.3>>

47.5'98.1>>

Gas turbines gas 84.0>> 63.2>> 68.9>> 209.7'7.9'6.7>> 47.7>>

Combined cycle oil 99.5'53.0'5.0>> 248.9>> 254.4>> 236.3>>

Nuclear . 17.4>> 15.8>>

17.2'17.7>> 18.0'19.2>>

All fuels . 114.5>> 118.1>> 107.9>> 32.2>>

172.5'01 KWH PER BARREL EQUIVALENT.. 597 598 597 599 604 HEAT RATE (BTU PER KWH)

Steam fossil 10,054 10,030 10,060 10,161 10,098 10,125 10,112 Gas turbines . 16,102 15,859 14,843 14,199 14,194 14,063 Combined cycle 10,914 10,562 10,107 10,382 Nuclear . 11,425 11,404 11,284 11,414 11,355 10,968 System . 10,533 10,541 10,545 10,533 10,507 10,408 10,112 FUEL COST MILLS PER KWH Steam residual oil 27.33 19.57 20.53 18.54 19.32 18.06 2.93 Steam 10.12 8.49 7.33 7.15 5.89 5.07 3.64 gas'as 29.46 21.15 23.69 26.40 25.83 23.01 turbines'ombined cycle 38.53 26.29 25.72 24.53 Nuclear . 2.86 . 2.00 1.96 2.05 1.89 1.74 All fuels . 18.17 12.41 12.07 12.56 12.41 11.23 3.26

%change . 46.4 2.8 (3.9) 1.2 10.5 94.0 (1.2)

'Distillate oil and natural gas PAYROLL STATISTICS Number of employees (year end) ......... 10,337 9,750 9,415 9,865 9,911 9,769 6;588 Payroll and Benefits (000)

Charged to construction ............... $ 61,345 $ 52,014 $ 45,998 $ 46,994 $ 43,749 $ 39,553 $ 15,013 Charged to operation and maintenance .. 207,463 186,377 162,364 149,270 127,538 113,153 60,332 Charged to clearing, tax expense and other accounts ................. '21,950 14,608 13,034 12,480 9,391 8,724 3,507 Total $ 290,758 $ 252,999 $ 221,396 $ 208,744 $ 180,678 $ 161,430 $ 78.852 Percent of operation & maintenance expenses from payroll and benefits .. 17.6 21.8 21.6 20.5 18.7 19.0 36.9 Number of customers per employee (year end) 207 208 205 187 179 176 185 25

Summary of Significant The weighted annual composite Em lo ee Benefit Plans Accounting and Reporting Policies depreciation rate was approximately 3.7% In 1979. The nudear production plant rates The Company has a non.contributory (All Financial Statements shown should be employees'ension plan covering include estimated negative net salvage values considered ln con) unctton with Notes ln the substantially all employees. The Company's Company's Annual reports for appropriate of approximately 20M for certain components.

reflectin estimated decommissioning costs. policy ls to fund each year's accrued pension years.) costs. Including amortlzatton of the estimated The transmission and dlstrtbutlon plant rates include negative net salvage values. unfunded prior service costs. Pension costs R~eulatlon Substantially all uttllty plant ls sub)ect to for 1979 and 1978 were $ 27.7 million and Accounting and reporting policies of the the lien of the Mortgage and Deed of Trust(as $ 26.2 million. respectively. The estimated Company are sub)ect to regulation by the unfunded prior service cost of the pension supplemented) securing the First Mortgage Florida Public Service Commission (FPSC) and Bonds. plan at January 1. 1979 was approximately the Federal Energy Regulatory Commission $ 91.5 million using the entry age normal cost (FERC). The following summarizes the more Amortization of Nuclear Fuel method. There was no excess of vested stgnlftcant of these pollctes. benefits over the fund balance as of January I, The cost of nuclear fuel.wtth a provision for 1979.

Basis of Consolidation zero net salvage. ls amortized to fuel expense on a unit of production method. No provision The Employee Thrift Plan provides for The consolidated flnanctal statements for estimated future spent fuel storage or baste contrlbuttons by eligible employees of include the accounts of the Company and its disposal costs ls presently included In fuel up to 6% of their base salaries. which are wholly owned subsidiaries. Allsignificant expense. The suppliers of the nuclear fuel are matched 50% by the Company. Supplemental intercompany balances and transactions have under contract to provide spent fuel removal. contrlbuttons by employees may be made up been eliminated. The suppliers have refused to honor their to an additional 6'. The Company matching commitments. The Company has expanded contributions for Ig7g and 1978 were $ 2.1 Rates and Revenues its spent nudear fuel storage facilities and has million and $ 2.0 million. respectively.

Revenues are recognized based on monthly adequate fadlltles for storage of spent fuel In 1976 an Employee Stock Ownership Plan cycle billings'o customers. Retail and until the mtd-1980's under normal refueling (ESOP) was adopted pursuant to the Tax wholesale rate schedules are approved by the conditions. Reduction Act of 1975. The Act permits the FPSC and the FERC. respe<<tlvely. The rate Company 'to claim an additional 1%

schedules contain a fuel adJustment clause Allowance for Funds Used Durln investment tax credit. provided that the whtch gives effect to changes ln efftclency, the Constiuct ton entire amount of the credit Is contrtbuted to cost of fuel as well as the fuel component of an employee stock ownership plan and purchased power. the total energy cost of The Company capltaltzes as an additional invested ln Company Common Stock for the economy interchange and the generation mix cost of property an allowance for funds used benefit of employees. In 1978 the Board of of fossil and nuclear fuels. Generally, the during construct ton (a non.cash item) which Directors amended the ESOP to enable the changes are reflected ln customer billings represents the allowed cost of capital used to Company to claim a further investment tax about two months after they occur. finance a portton of CWIP and nuclear fuel.

credit up to Vi% to the extent that the Vi'/o The portion of AFUDC attributable to credit ls matched by voluntary contrtbutlons Electric Utlllt Plant and De rectatlon borrowed funds ls recorded as a reduction of by participating employees pursuant to the The cost of addlttons, replacements. and Interest charges and the portion attributable Tax Reform Act of 1976. Since the payments to other funds as Other income. See the to the Plan are In Iteu of income tax renewals of units of property ts added to Schedule of AFUDC for detailed information.

utlltty plant. The cost (estimated. Ifnot payments. there ls no effect on net tncome.

known) of units of property retired. less net Provisions for Company contrlbuttons to the salvage. Is charged to accumulated StormandPro ert InsuranceReserveand ESOP were $ 8.8 million and $ 7.2 million ln depredation. Maintenance and repairs of Related Fund 1979 and 1978. respectively.

property. and replacements and renewals of The storm and property insurance reserve Income Taxes items determined to be less than units of fund ls maintained at an amount equivalent property. are charged to operating expenses to the reserve. The reserve provides coverage Deferred income taxes are provided on all maintenance. of storm damage costs and possible public significant book.tax timing dtfferences as Book depreciation ts provided on a liabilitylosses stemming from a nuclear permitted for rate.making purposes by the straight-line service.life basis by primary incident. Earnings from the fund. net of taxes. FPSC. Investment tax credits used to reduce accounts as directed by the FPSC using the are relnvested tn the fund. Securities held ln current federal income taxes are deferred and followlng rates: the fund are recorded at cost which amortized to income at a rate approximating Steam production plant ......... approximates market value. the lives of the related property. See the production plant ........ 3.2'Yo.4.6'uclear Storm damage and service restoration costs Scheduleof Income Taxes.

production plant.......... 5.0%.6.5'Yo 3.2%.6.29'ther related to Hurricane Davtd aggregating $ 6.8

'Iiansmlsston plant ............. 1.5%-3.3'Yo million were paid from the fund ln 1979 and Distribution plant General plant Transportation equipment

~ ~ ~ ~

~ ~ ~

~ ~ ~ ~

2.0'.6,6'Vo 2.1'Vo 7.8/o 9.Mo charged to the reserve. Income tax benefits related to the costs willbe restored to the fund when realized. 0 26

MARSHALLMcDONALD CHAIRMAN OF THE BOARD and TRACY DANESE CHIEF EXECUTIVE OFFICER H.L. ALLEN VICE PRESIDENT SENIOR VICE PRESIDENT PUBLIC AFFAIRS R.J.GARDNER VICE PRESIDENT R.W. WALL, JR.

STRATEGIC PLANNING SENIOR VICE PRESIDENT and ASSISTANT SECRETARY B.L. OAOY VICE PRESIDENT MANAGEMENTCONTROL L.C. HAUCK and SERVICES and ASSISTANT SECRETARY J.J. HUDIBURG VICE PRESIDENT PRESIDENT and LEGAL AFFAIRS CHIEF OPERATING OFFICER L.C. HUNTER D.K. BALDWIN E.A. ADOMAT SENIOR VICE PRESIDENT VICE PRESIDENT EXECUTIVE VICE PRESIDENT PERSONNELand CORPORATE SERVICES INDUSTRIALRELATIONS J.L. HOWARD J.H. FRANCIS, JR. E.L. BIVANS VICE PRESIDENT TREASURER VICE PRESIDENT VICE PRESIDENT SYSTEM PLANNING FINANCIAL CORPORATE COMMUNICATIONS MICHAELC. COOK R.A. ANDERSON R.E. TALLON VICE PRESIDENT ASSISTANT TREASURER GROUP VICE PRESIDENT FUEL RESOURCES and CORPORATE DEVELOPMENT H.J. DAGER, JR.

J.E. MOORE J.G. SPENCER, JR.

VICE PRESIDENT ASSISTANT SECRETARY SENIOR VICE PRESIDENT ENGINEERING PROJECTS DIVISIONS and CONSTRUCTION W.M. KLEIN A. D. SCHMIDT H.P. WILLIAMS,JR. VICE PRESIDENT VICE PRESIDENT COMPTROLLER ECONOMIC DEVELOPMENT POWER RESOURCES R.E. UHRIG T.R.CROOK VICE PRESIDENT ASSISTANT COMPTROLLER ADVANCED SYSTEMS andTECHNOLOGY S.P. KEMP ASSISTANT SECRETARY ASTRID PFEIFFER CORPORATE SECRETARY 27

Directors

• M. P. Anthony West Palm Beach. Fla. President. Anthony' Inc.. a chain of ladies apparel retail stores. Serving since 1977.

tGeorge F. Bennett Boston, Mass. President and Chief Executive Officer of State Street Investment Corp.

and of Federal Street Fund Inc. investment companies: Managing Partner of State Street Research and Management Co.:

Chairman. Managing General Partner, State Street Exchange Fund. Serving since 1970.

'David Blumberg Miamb Fla. President. Planned Development Corp.. a building and development firm.

Serving since 1973.

Jean McArthur Davis Miami. Fla. President McArthur Dairy Inc. and McArthur Farms Inc.. engaged in the production and distribution of dairy products. Serving since 1977.

tJohn J. Hudiburg Miami. Fla. President of the Company since Jan. 15, 1979. Formerly Executive Vice President. Finance. Serving since January 1979.

Robert B. Knight Coral Gables. Fla. Chairman. National Food Services Inc., a restaurant management company. Serving since 1977.

John M. McCarty Fort Pierce. Fla. Attorney. Serving since 1973.

marshall McDonald Miami. Fla. Chairman of the Board of Directors of the Company since Jan. 15, 1979. Formerly President and Chairman of Meetings of'the Board. Serving since 1971.

'Edgar H. Price Jr.

Bradenton. Fla. Chairman of the Board and President of The Price Co. Inc.,

a consulting firm. Serving since 1972.

lewis E. Wadsworth Bunnell. Fla. Engaged in timber and cattle businesses. Serving since 1970.

Gene A. Whiddon Fort Lauderdale. Fla. President, Causeway Lumber Co. Inc., engaged in the sale of lumber and building materials. Serving since January 1979.

tExecutive Committee

'Audit Committee 28

GEORGIA

~ AWt\ I r>EATII L

TO 0 JACIPONVI E TALLAHASSEE PANAMACITY TAL FT, WALTON B PE CACCIA ~ MACC ENN I

LWI~ II TIWOI II ro ~

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~ ST. AUGUSTINE IP ~ I O GA ESVI E PAIATKA

~ PUTNAM DAYTONA BEACH Il ~

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CLEAAWATE) TAMPA

&~C ELBOURNE LLW LLIOWWW SEBASTIAN ST. PETERSBUR CW 0 EWW MANATE PALMETT Artl~

~ LC ~ Tlt BRACE~0~<< trt I

~ till ST LUCIS SARASOTA<< ST. LUCIE t W Wtt I OKEECHOSEE OE BOTCHES<<ARCADIA WEWITC S ART VENI MARTIN I ~ rl

~ ~ 0LWTI PUNTA GORDA PAHOKEE RIVIERA WEST PALM BEACH FT. MYERS BELLE GLADE

~ IIM WPC DELRAY BEACH LEGEND BOCA RATON

~ FLORIDA POWER S LIGHT BUSINESS OFFICES POMPANO BEACH NAPLES IOLME~ FT. lAUDERDALEWEPT ~ PORT EVERGLADES

~ FLORIDA POWER C MG HT POWER PLANTS . LAUDERDALE (Inclvding pl<<nl<<<<ll cOIO.<<I<<nOROT) L LAUDERDALE OLLYWOOD EI POWER PLANTS UNDER CONSTRUCTION EVERGLADES ORTH DADE NATIONAL HIALEAH<< ~ MIAMI BEACH AND FUTURE PlANT SITES PARK ~ M/AMI L GABLES

~AREA SERVED BY FPI II

~ TLER JANUARYI, 1080

~ TUtIKEY POINT UTH DADE b<<Qr 1~0 KEY @ST~gME 29

~g5Q FLOAIOA POWLA ALIGHT COMPANY

EXHIBIT II Page 1 of 1 FLORIDA PONER & LIGHT CO~iPAHY ST. LUCIE UNIT 2 COST OF OPERATION Item Avera e Annual Cost Fuel. $ 50,584,000.00 Payroll . 5,200,000.00 Other 0+8 Expenses. 15,200,000.00 Capital Costs . ~ ~

r ~ 93,000~000.00 Depreciation. 1,900,000.00 Taxes & Insurance.. 77,900,000.00 TOTAL ANNUAL COSTS 8243,784,000.00 Estimated average annual cost for operation of project over five (5) year period, based on unit generation of 5.0584 billion kilowatt hours of electrical energy annually.

All dollar values given are discounted 1983 dollars.

EXHIBIT III Page 1 of 12 FLORIDA POWER 6 LIGHT COMPANY ST. LUCIE UNIT 2 Technical ualifications of Contractors EBASCO SERVICES INCORPORATED As the engineering and construction subsidiary of -Ensearch Corporation, Ebasco Services Incorporated is internationally recognized as a leading force in the development and practical application of new methods and technologies associated with systems for power production and other related energy systems. Ebasco's present staff totals more than 6000 persons engaged in all phases of engineering design, construction, purchasing, inspection and expediting of material, qua1ity assurance.

and consultation on utility operating matters.

Since its founding in 1905, Ebasco has provided engineering and related services for utility, industrial and government clients in more than sixty nations. These clients have selected Ebasco to provide services required for the successful completion of more than 900 electric genera-ting units'having'a".cotal installed capacity exceeding 120,000 MW and for more than 25,000 miles of transmission and distribution lines.

Ebasco provides a fully integrated, single responsibility oriented, engineering constructor organization with all the combined capabilities necessary for the successful completion of a power plant project. The scope of Ebasco's capabilities encompasses all phases of an energy pro)ect from its inception ',. through the acceptance of the facility for commercial operation-, including technical;and economic feasibility studies; environ-mental and licensing services through Envirosphere Company, our environ-mental services division; detailed engineering and design; construction and installation; component and system testing; start-up and tri.al operation; and acceptance testing. To assure technical excellence, Ebasco also provides a wide range of in-house consulting engineering services to support and assist the project, engineering, and construction organization in the detailed execution of each project.,

Ebasco's nuclear experience includes engineering stu4ies, the evaluation of reactor systems, selection of the nuclear sites, ha'zards evaluations, detailed engineering design, construction and start-up and testing of nuclear power facilities as described below:

a. Nuclear Power Project, Unit Nos. 1 and 2 National Power Corporation, (NAPOCOR) Philippine Islands Ebasco was selected by the Philippine National Power Corporation to provide consulting services associated with the NAPOCOR project consisting of two - 600 MWe Westinghouse PWR's. Ebasco's scope includes assistance to NAPOCOR in evaluation of offers to supply power plants including completeness, commercial terms and conditions,.

EXHIBIT III Page 2 of 12 delivery and construction schedule, assistance in design engineering and construction managemerit outside the supplier scope, and review of designs and specifications, including engineering analysis. Commercial operation is expected in July 1982.

Angra Unit No. 1 (PWR), Furnas Centrais Electricas S.A., Brazil Ebasco's scope is review of designs and specifications to be supplied by turnkey NSSS vendor, Westinghouse for general arrangement drawings and mechanical, electrical and instrumentation equipment. Commercial operation is scheduled to be attained in 1980.

WPPSS Nuclear Power Project Nos. 3 and 5 - Washington Public Power Supply System Ebasco is performing engineering, design, construction management, site selection, licensing, quality assurance, and related service for Washington Public Power Supply System's (WPPSS) Nuclear Power Project Nos. 3 and 5 near Grays Harbor, Washington. Each unit will use the latest, Series 80, Combustion Engineering Corporation, 3800 MW(t), pressurized water nuclear steam supply system.

Construction of WPPSS Nos. 3 and 5 is phased by 18 months and commercial operation of the initial unit scheduled for May 1983.

Aliens Creek Unit No. 1 Houston Lighting & Power Company Ebasco is performing engineering, design, construction, licensing, start-up and testing and related services for Houston Lighting &

Power Company's Aliens Creek Unit No. 1 Nuclear Generating Station.

This unit will use the, latest General Electric'BWR-6, boiling water, nuclear steam supply system and the Mark III vapor suppression concept.

Commercial operation of Unit No. 1 is scheduled for March 1985.

Shearon Harris Unit Nos. 1,, 2, 3 and 4 - Carolina Power & Light Company Ebasco is currently performing engineering, design, site selection, licensing, start-up and testing, and related services for Carolina Power & Light Company's Shearon Harris Unit Nos. 1 through 4 at Whiteoak Creek. The Westinghouse pressurized water nuclear steam systems are the three loop-type producing 2785 MW(t).

Engineering and design work for this project, began in 1970 and commercial operation is scheduled for April 1984, 1986, 1988 and 1990.

Waterford Unit No. 3 - Louisiana Power & Light Company Ebasco is currently performing engineering, design licensing, construc-tion management, start-up and testing,'nd related services for Lousiana Power & Light Company's Waterford Unit No. 3 Nuclear Power Plant. The plant utilizes a 3580 MW(t) Combustion Engineering pressurized water nuclear steam supply system. Commercial operation is scheduled for April 1981.

EXHIBIT III Page 3 of 12 Tokai Unit No. 2 Japan Atomic Power Company Ebasco worked as subcontractor to GE and provided engineering, design and liaison services for the 1100 MW(e), Unit No. 2 of the Tokai Nuclear Power Station. This station is owned and operated by the Japan Atomic Power Company. Ebasco's responsibility included site studies, licensing assistance, engineering and design, and start-up and testing services. Commercial operation was attained in 1976.

Chin-Shan Unit Nos. 1 and 2 Taiwan Power Company Ebasco performed engineering, design and construction advisory services for the Taiwan Power Company for a two-unit 636 MW(e)

General Electric BWR nuclear power plant. Commercial operation was attained in 1976 and 1977.

Fort St. Vrain Unit No. 1 Public Service Company of Colorado Ebasco was engag d by Gulf General Atomic Incorporated (predecessor of General Atomic Inc.) to construct and provide Quality Compliance Services for a 300 MW(e) nuclear power plant utilizing a high temperature gas-cooled reactor (HTGR). The plant is owned and operated by Public Service Company of Colorado with partial funding by the U.S. Atomic Energy Commission under the Power Demonstration Program. Commercial operation was attained in 1973.

Millstone Unit No. 1 The Millstone Point Company Northeast Utilities I

Ebasco contracted with General Electric Company to perform site selection, licensing, engineering, design, construction, start-up and test services for The Millstone Point Company's Millstone Unit No. 1. General Electric supplied the 2011 MW(t) boiling water nuclear steam supply system. Commercial operation was attained in 1970.

k. Vermont. Yankee Urd;t No. 1 Vermont Yankee Power Corporation Ebasco, acting as agent of the Vermont Yankee Nuclear Power Corporation, had total responsibility for the engineering, design and construction of the Vermont Yankee Nuclear Power Station. This plant utilizes a

. General Electric single-cycle forced circulation boiling water reactor (BWR-4), which operates at a thermal power level of 1593 (MW(t) and produces 540 MW(e) output. Commercial operation was attained in.

1971.

H. B. Robinson Unit No. 2 Carolina Power &. Light Company Ebasco, working as subcontractor to Westinghouse Electric Corporation and separately as agent of the Owner, provided site selection, ~

licensing, engineering, design, procurement, construction, start-up.

and testing and related services for Carolina Power & Light Company's

EXHIBIT III Page 4 of 12 H. B. Robinson Unit No. 2. Hestinghouse supplied the 2200 Mf(t) pressurized water nuclear steam supply system. Commercial operation was attained in 1970.

Fukushima Unit Nos.', 2, 3 and 6 Tokyo Electric Power Company, Inc.

Ebasco was subcontractor to General Electric, providing design engineering and inspection of construction services on the 440 ET(e)

Unit No. 1, 790 MN(e) Unit No. 2 and 1100 E4(e) Unit No. 6 of the Fukushima Nuclear Electric Station. This station is owned and operated by the Tokyo Electric Power Company, Inc. Ebasco's work included engineering, detailed design, and management of construction.

On Unit 3 (780 MNe), Ebasco provided engineering consulting services to Toshiba (prime contractor). Commercial operation of Unit Nos. 1, 2, 3 and 6 was attained in 1970, 1973, 1975 and 1976, respectively.

Shimane Unit No. 1 Chugoku Electric Power Company Ebasco was the consultant to Hitachi and provided engineering consulting services for the 460 MN(e) Unit No. 1 of the Shimane Nuclear Power Station. This station is owned and operated by the Chugoku Electric Power Company in Japan. Ebasco's responsibility included the review and comment on Hitachi's design of the plant. Commercial operation was attained in 1973.

Tsuruga Unit No. 1 - Japan Atomic Power Company Ebasco was a subcontractor to GE. forengineering, design and inspection of construction. of the 350. MW(e) Tsuruga Nuclear Power Plant. The plant utilizes a GE boiling water nuclear steam supply system. Com-mercial operation was attained in 1970.

Nuclenor Unit No. 1 Centrales Nuclenor del Norte (Spain)

Ebasco was a subcontractor to GE, the prime contractor, for the engineering, design and construction management of a 440 i~M(e) nuclear power plant. The plant utilizes a General Electric boiling water nuclear steam supply system. Commercial operation was attained in 1970.

Senn. Unit No. 1 Societa Elettronucleare Nazionale Senn (Italy)

Ebasco performed engineering, design and construction management for the 150 KC(e) (upgraded to 180 Mf(e)) nuclear power plant for the Societa Elettronucleare Nazionale (SENN) in Italy.,'ommercial operation was attained in 1963.

Laguna Verde Nuclear Station, Unit Nos. 1 and 2 Comision Federal de Electricidad (Mexico)

Ebasco contracted with Comision Federal de Electricidad Mexico to perform engineering, construction management, project management, quality compliance, procurement, scheduling and start-up and test

EXHIBIT III Page 5 of 12.

services for Laguna Verde Unit Nos. 1 and 2. GE will furnish the water reactors (BWR-5) rated at 1931 Mwt. The scheduled date for boiling, trial operation for Unit Nos. 1 and 2 is 1981 and 1982, respectively.

s. St. Lucie Unit 1 - Florida Power & Light Company I

Ebasco performed engineering, design, construction, procurement, licensing, quality assurance, start-up and testing, and related services for Florida Power & Light Company's St. Lucie Nuclear Power Station Unit 1. The plant utilizes a Combustion Engineering pressurized water nuclear steam supply system rated at 2570 MW(t)

~~ output. Ebasco pioneered . the procedures for post weld heat treat-ment on St. Lucia 1's freestanding steel containment which is the largest field stress relieved pressure vessel in the. world.

Commercial operation was attained in 1976.

\

COMBUSTION ENGINEERING NUCLEAR EXPERIENCE NUCLEAR DEVELOPMENT Combustion Engineering (C-E) has been actively involved in the power generation aspects'f nuclear .energy for over thirty years. As early as 1946, C>>E had commenced studies to investigate the feasibility of power production from nuclear fuels. The results of these studies, coupled with experience in fabrication of large welded pressure vessels,,

led to C-E's development as a major supplier of nuclear components. In 1954, C-E was awarded the contract to provide the reactor vessel for Shippingport, the world's first commercial-size nuclear electric generating station. C-E's achievements continued with the contract award for the design and fabrication of the reactor vessel for the world's first commercial sodium fast breeder'eactor plant, Enrico Fermi. Unit 1. This vessel is still considered one of the most complex stainless steel vessels ever built.

In 1958, C-E began preliminary and detailed analyses of the High Flux Beam Reactor for the Brookhaven National Laboratory. This effort was followed by an Atomic Energy Commission contract for the design, analysis and economic evaluation of a 250 MWe. pressurized water reactor plant. As a result of C-E's acquisition of General Nuclear Engineering Company in 1959, it assumed the responsibility for the nuclear .design, startup, and initial operation of the BONUS (Boiling Water Superheat) plant.

This was the first U.S. nuclear plant to operate with an integral super-heating core. By 1963, C-E had decided to conc ntrate on the development of the pressurized water reactor design for large commercial nuclear plant applications. This decision led to several years of intensive research and development to define the optimum physical plant arrangement, to develop design criteria balancing safety and economics,. to establish auxiliary systems designs and reactor=core designs and to perform exhaustive testing of components. During this same period, C-E remained active in new designs and concepts including the Heavy Water Organic Cooled Reactor and the Liquid Metal Fast Breeder Reactor programs.

EXHIBIT III Page 6 of 12 In 1966, C-E sold the first non-turnkey nuclear steam supply system, the Palisades plant, to Consumers Power Company. Six additional orders were rhceived within the next year, thereby rapidly establishing C-E as not only a nuclear component manufacturer, but also a major vendor of nuclear steam supply systems.

In response to a demand for larger nuclear units, C-E's nuclear, designs gradually evolved from these smaller units (all less" than 900 MWe outp'ut) through a series of 1100 MWe units, to the present 1300 MWe System 80 offerings. This entire progression was a smooth evolution and not a series of experiments with unproven design concepts.'he end result of this marketing effort is that today C-E has eight (8) nuclear units in operation, and an additional 19 units under construction or on order. Tables 1 and.

g list C-E's nuclear steam supply systems sold to date.

NUCLEAR FACILITIES The successful completion of a nuclear steam'upply system project: requires the close coordination of a variety of separate and distinct activities, from the development of design computer codes to the fabrication of heavy pressure vessels. The following paragraphs describe the functions and capabilities of C-E's nuclear facilities which contribute to the success-of each nuclear project.

GENERAL OFFICES (WINDSOR, CONNECTICUT)

C-E Nuclear Power Systems Division general offices are located on a 500 acre site in Windsor; Connecticut. Approximately 4000 people are employed at this facility where nuclear engineering, design, physics and research and development are conducted.

NUCLEAR COMPONENT MANUFACTURE (Chattanooga, Tennessee)

Few facilities anywhere in the world compare with C-E's Chattanooga manu-facturing plant in sheer scope and size. C-E's major manufacturing facility's capabilities include fabrication of nuclear and fossil steam generators and heavy thick-walled pressure vessels. Over 1200 engineers, technicians and 'production workers staff the Chattanooga nuclear operations where C-E fabricates nuclear reactor vessels, steam generators, pressurizers.

and reactor c'oolant piping assemblies. In addition to fabricating the first commercial-reactor vessel for the Shippingport plant, the first sodium cooled fast breeder 'reactor vessel for, the Fermi unit, and the

=

vessel, head and guard vessel for the U.S. Fast Flux Test Facility, C-E has supplied nuclear components for both Westinghouse and General Electric.

As such, C-E has shipped or has on order 54 reactor vessels and 2 steam generators for Westinghouse and 17 reactor vessels for General Electric.

Table 3 displays C-E's major component manufacturing experience and backlog.

C-E has recently accomplished two significant shipping achievements. In the first, all primary system components for an 1100 MWe unit were shipped

EXHIBIT III Page 7 of 12 from Chattanooga on a single ocean-going barge to the plant site in San Onofre, California. The total shipment consisting of the reactor vessel and closure head .(420 tons), two steam generators (620 tons each), the pressurizer and other system components. weighed 2,040 tons. This record shipment has since been broken by the August, 1978 shipment of 2200 tons of nuclear components for Unit 1 of the Palo Verde nuclear station. Bound for the Arizona Public Service Company's site, this shipment consisted of a C-E System 80 reactor vessel and head, and two steam generators, all mounted on one ocean-going barge.

REACTOR INTERNALS (Newington, New Hampshire)

Reactor Vessel internals are fabricated at tne C-E Avery facility in Newington, New Hampshire. Skilled fabrication of stainless steels, heavy thickness weldments, and other non-standard welding processes are C-E Avery specialties. A modern machine complex gives C-E Avery the capability of machining the smallest parts on the largest'ssemblies to exacting tolerances. All reactor internals undergo a rigid fit-up check at 'the facility, to 'ensure trouble-free assembly when installed in the reactor vessel. C-E Avery can also manufacture high capacity spent fuel racks for the on-site storage of expended nuclear fuel by individual utilities...

REACTOR COOLANT PViPS (Newington, New Hampshire)

The System 80 reactor coolant pumps are designed, fabricated, assembled and tested by the CE/KSB Pump Company, also located-in Newington, New Hampshire. Conceived as a.)oint venture between C-E and the West German firm of Klein-Schanzlin and Becker, the facility will manufacture reactor coolant pumps and subcritical boiler water circulating pumps.

Each reactor coolant pump is tested at full operating conditions in a specially designed flow test loop at the facility. Based on C-E contracts alone, the facility will have to produce 68 reactor coolant pumps.

FUEL FABRICATION (Windsor, Connecticut)

C-E's nuclear fuel fabrication facility is also located on the Windsor site. C-E's nuclear fuel experience began in the early 1960's with the design and fabrication of several experimental fuel elements and cores, including the BONUS reactor core. The Windsor facility was established in 1968 specifically for the manufacture of initial fuel cores and reload fuel batches for commercial reactor systems.. Here,'slightly enriched uranium powder is made into pellets, which are inserted into Zircaloy-4 fuel rods, which are then assembled into fuel bundles. The" bundles are .

then cleaned, inspected and packaged for shipment to the reactor site.

C-E has. fabricated approximately 2400 fuel bundles, and has over 10,000 fuel bundles on order.

EXHIBIT III Page 8 of 12 URANIUM CONVERSION (Hematite, Missouri)

Prior to nuclear fuel pellet fabrication, a uranium conversion process must occur. The C-E Hematite facility, operating on the steam-hydrogen method, converts uranium hexafluoride to uranium dioxide powder, which is then shipped to Windsor for fuel fabrication. This facility has been in operation by C-E since 1974.

CONTROL ELEMENT DRIVE MECHANISMS (East Windsor, Connecticut)

C-E established this plant in 1970 to manufacture control element drive mechanisms, control element assemblies and extension shaft assemblies, and other related components for the C-E nuclear steam supply system.

The creation of this plant was coincident with the development of the C-E electro-magnetic )ack- type control element drive mechanism.

ELECTRICAL CONTROLS (Windsor, Connecticut)

C-E Controls Facility primarily manufactures electrical control systems and related products utilized in various heavy industrial equipment markets. Both analog and digital components and systems can be assembled and tested at this facility.

PRESSURIZED WATER REACTOR SIMULATOR TRAINING (Windsor, Connecticut)

Simulator training is conducted at C-E's nuclear training facility on the Windsor site. The C-E simulator duplicates the control room of an 845 MWe pressurized water reactor'lant for training of utility executives, engineers or plant operators. Students receive simulator orientation lectures, as well as actual experience in dealing with operational transients. The response characteristics of the simulator are programmed to represent actual plant design conditions.

KREISINGER DEVELOPMENT LABORATORY (Windsor, Connecticut)

This laboratory conducts research, development and testing of major technological areas associated with power plant equipment and systems development. Included in this scope are activities 'in the areas of heat transfer, fluid mechanics, solid mechanics, combustion, corrosion, corrosion prevention, control systems, and chemical process development.

Recent nuclear projects include a Primary Pump Test to investigate hydraulic and mechanical pump performance following a loss of coolant accident, and a nuclear reactor water .treatment evaluation program.

METALLURGICAL AND MATERIALS LABORATORY (Chattanooga, Tennessee)

Located adjacent to C-E's manufacturing plant, this facility is custom designed for metallurgical research and development concerned with materials performance, metallurgical fabrication processes, welding, joining, and forming, as well as primary metal processing, nondestructive testing te'ethnology and supporting metallurgical services. In addition

EXHIBIT III Page 9 of 12 to its own activities, C-E has actively participated in U.S. government and industry research programs on topics such as advanced fuel cladding design and fracture toughness of nuclear component materials.

NUCLEAR LABORATORY (Windsor, Connecticut)

This laboratory provides research, development and testing support for the overall design and construction of C-E supplied nuclear components and equipment. One such facility is the nuclear components test loop which tests under operating condi,tions, nuclear'system components such as fuel assemblies, control element assemblies and control element drive mechanisms. Seismic testing of reactor-components is performed with various shakers at the facility. C-E also has the capability to perform full chemical analysis and chemistry control testing in either hot or cold test loops or model boilers.

COMPUTER CENTER (Windsor,- Connecticut)

This multi-million dollar facility has two IBM 370 computers with a total of five million storage positions, a Control Data Corporation 6400 and a new Control Data Corporation 7600 computer system to support the scientific calculations related to nuclear design. This center is directly linked with the various manufacturing facilities and is easily accessible to C-E personnel via remote terminals and direct communications.

EXHIBIT III Page 10 of 12 TABLE 1 COMBUSTION ENGINEERING NUCLEAR STEAM SUPPLY SYSTEMS 0 eratin Units Commercial , Net Output Unit ~Utf lit ~0'rato'on MWe Palisades Consumers Power Company 12/71 740 MaineYankee MaineYankee Atomic Power Co. 12/72 830 Fort Calhoun 1 Omaha Public Power District 9/73 457 Calvert Cliffs 1 Baltimore Gas & Electric Co. 5/75 845 Millstone Point 2 Northeast Utilities 12/75 830 St. Lucie 1 Florida Power & Light Co. 12/76 802 Calvert Cliffs 2 Baltimore Gas and Electric Go. 4/77 845 Arkansas Nuclear Arkansas Power and Light Co. 1980 912 One, Unit 2 Pre-S stem 80 Units Unit San Onofre 2 Southern California Edison Co. 1981 1100 San Onofre 3 Southern California Edison Co. 1981 1100 Waterford 3 Louisiana Power and Light Co. 1981 1165 St. Lucie 2 Florida Power & Light Co. 1983 802 Forked River Jersey Central Power & Light Co. 1120 Pilgrim 2 Boston Edison Company 1986 1180

TABLE 2 Page ll III EXHIBIT of 12 COMBUSTION ENGINEERING NUCLEAR STEAM SUPPLY SYSTEMS 0

S stem 80 Units

-Commercial Net Output Unit ~Uttlit UUetatton Kfe Palo Verde 1 Arizona Public Service Co. 1982 1300 Palo Verde 2 Arizona Public Service Co. 1984 1300 Palo Verde 3 Arizona Public Service Co. 1986 1300 Perkins 1 Duke Power Company 1993 1300 Perkins 2 Duke Power Company 1995 1300 Perkins 3 Duke Power Company 1997 1300 Cherokee 1 Duke Power Company 1987 1300 Prospect 2 Cherokee Duke Power Company 1989 1300 Cherokee 3 Duke Power Company 1991 1300 Washington Nuclear Washington Public Power 1984 1300 3 Supply System Washington Nuclear Washington Public Power 1985 1300 Project 5 Supply System Yellow Creek 1 Tennessee Valley Authority 1983 1300 Yellow Creek 2* Tennessee Valley Authority 1984 1300

EXHIBIT III Page 12 of 12 TABLE 3 C-E Nuclear Manufacturing Experience Number Number In

~Shf aed Process Reactor Vessels* 110 36 Stean Generators 86 36 Pressurizers 46 17 Primary Piping Sets 14 17 Reactor Internals 13 18 Fuel Batches 41 133

• (Data includes the Fast Flux Test Facility vessel, head and guard vessel, also fabricated by C-E.)

SL2- FSAR TABLE 2.4-3 UMMARY OF LOOPING STALLED AND INTENSE HURRICANE PARAMETERS LOOPING AND STALLED HURRICANES Average Storm Direction 10 Min Wind (Knots) CPI (MB) T (Knots) (De rees from North) Vx (Knots) Lowest Pressure (MB)

Loop 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 10 Min Duration Before During After Before During After Before During After Before During After No. Name and Date ~d ~Loo ~Leo ~Loo ~Loo ~Leo ~Loo ~Loo ~Loo ~Loo ~Loo Wind

~dd ~L Time Re CPI

~d ~L Time Re

~Rnm Distance of Loo from Coast Inga, 9/21-10/14, Loop 120 33 65 81 992 987 980 5.5 340 clockwise 070 104 24 hr after '64 24 hr after 1000 mi E of Fla East Coast 1969 Iu Carol, 9/16-10/1, Loop 100 56 53 60 985 987 987 12 2.5 10 350 c-clockwise 040 67 37 hr before 974 57 hr before 1700 mi E of NC 1965 74 14 hr after Flora, 9/26-10/13, Hairpin 80 91 69 79 996 972 975 17 320 Hairpin 60 122 24 hr before 936 24 hr before 40 50-150 mi SE of Georgia Coast 1963 loop loop Betsy, 9/2-9/12, Cusp 48 81 75 76 954 978 17 320 90 Cusp 060 105 3 days before 945 2 days before 600 mi E of NC 1961 Daisy, 8/24-8/31, Stall 60 41 100 108 1004 956 935 19 5 14 300 L to R bend 360 108 24 hr after 935 24 hr after 50W E Cuba, 140 nm E of Fla Coast 1958 Alice, 5/25-6/6, Loop 1 72 M M M M 9 5 12 350 c-clockwise 340 48 1953 Loop 2 40 M 35 M M 997 4 10 7 330 c-clockwise 060 47 48 hr after 997 48 hr after Over E Coast of Honduras 260 nm SE of S tip of Fla, Cape Hatteras Easy, 9/1-9/7, 2 Loops 48 >56 94 40 958 M 10 340 c-clockwise 90 90 during 958 during 15 60 mi NW of W Coast of Florida 1950 treat as one Charlie, 8/27- Loop followed 24 >56 74 979 M 10 360 clockwise 270 86 24 hr after M M 21 Western Atlantic 9/4, 1950 by Stall 48 during loop 1944 10/13-10/21 Stall 96 (56 64 90 M 984 96/ 360 R angle 360 104 48 hr after 949 48 hr after 27 200 mi NW S of Cuba, Florida Keys turn 10 1943, 9/15-9/19 Loop 42 M 47 40 M M 1010 350 c-clockwise 030 '7 during 1010 24 hr after 130 mi E of S tip of Texas 1942, 8/25-9/2 Loop 144 >56 31-56 dis M M dis dis 060 clockwise dis >56 M M M 800 mi E of NC Coast 12 1941, 10/3-10/14 Loop 75 (56 53 M M M 15 130 clockwise 100 92 >3 days before 964 )3 days before 18 13 1935, 10/30-11/6 Hairpin 60 >56 32-56 dis 1008 - dis dis 250 clockwise dis 78 24 hr before 972 24 hr before 150 mi off W Coast of Florida U-turn 1934', ll/20-11/28 Loop 56 (56 >56 >56 12 290 200 92 955 M 15 1934, 6/8-6/18 Loop 1 72 <56 <56 (56 M M M 12 12 counter- 200 965 M Over Gulf of Honduras Loop 2 48 (56 (56 1000 1000 970 5 6 290 clockwise 360 60 24 hr after 37 400 nm S of S tip of Texas 16 1910, 10/11-10/23 Loop 48 M 82 M 941 989 12 350 c-clockwise 020 during 82 941 during 16

SL2-FSAR TABLE 2,4-3 (Cont'd)

LOOPING HURRICANES ALONG EAST COAST OF FLORIDA Average Storm Direction 10 Min Wind Knots) CPI MB) T Knots) (De rees from North Fx (Knots) Lowest Pressure (MB Loop 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 10 Min Duration Before During After Before During After Before During After Before During After No. Name and Date ~B ~LOO ~LO0 ~LO0 ~LO0 ~LOO ~LO0 ~LOO ~Loo ~Loo L

~L LB ~LO0 Wind

~dd ~L Time Re CPI

~BB ~L Time Re Distance of Loo from Coast 17 Ines, 9/21-10/11, Half Loop 18 52 65 60 999 985 990 10 030 170 turn 250 122 5 days before 927 5 days before 6.5 on 50 mi S of southern tip of 1966 Hairpin Turn loop loop 9-28 Florida 18 Betsy, 8/27-9/10, Loop 1 18 55 63 66 1000 994 987 10 3 12 330 c-clockwise 250 112 10 days after 941 11 days after 30 at 300 mi E of Fla E Coast 1965 Loop 2 30 100 92 85 943 958 968 7 1 6 330 Figure 8 210 112 4 days after 941 5 days after time of 350 mi E of Fla E Coast max wind 19 Ginny, 10/16-10/30, Loop 1 30 44 66 61 1000 983 986 12 5 8 290 clockwise 220 100 mi SE of Cape Hatteras 1963 Loop 2 132 M 77 90 986 972 955 8 9 20 clockwise 038 90 24 hr after 955 24 hr after 20 Gracie, 9/22-9/29, Loop 60 57 79 103 M M 060 clockwise 280 103 2-1/2 days 950 2-1/2 days 150 mi E of 'Fla E Coast 1959 after after 200 mi E of Fla E Coast 21 Jig, 10/15-10/20, Loop 60 70 (56 (56 M M 030 clockwise 130 70 24 hr before 240 nm SE of Cape Hatteras 1951 22 Able, 5/15-5/24, Loop 108 (56 73 73 M M M 20 10 15 270 c-clockwise 50 74 during 17 160 mi off E Fla Coast 1951 23 1941, 9/16-9/25 Loop 60 (56 <56 75 M M 985 10 7 240 clockwise 300 79 72 hr after 970 B

72 hr after 21 230 nm S La Coast 24 1908, 7/25-8/2 Loop 96 < 56 (56 )56 M M M 3 5 15 070 clockwise 360 )56 24 hr after 988 24 hr after M 210 nm SW of Fla Coast 9/21-10/7 Loop 24 v 56 >56 v56 M M M 9 9 9 090 c-clockwise 050 >56 M M M M 160 nm E of Fla Coast 550 nm E of Fla Coast INTENSE HURRICANES 25 Camille 8/5-8/22, Intense 905 12 340 142 905 13-18 1969 26 Beulah, 9/5-9/22, Intense 923 330 121 923. 1 1967 27 Carla, 9/8"9/12, Intense 320 320 129 930.9 18 1961 (Cyclodial) (9/10) 2.4-99

SL2- FSAR TABLE 2.4-3 (Cont'd)

INTENSE HURRICANES (Cont'd)

Average Storm Direction 10 Min Wind Knots CPI MB T Knots De rees from North x Knots Lowest Pressure MB Loop 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 24 Hr 10 Min Duration Before During After Before During After Before During After Before During After No, Name and Date ~1 ~d ~Leo ~Leo ~Leo ~Leo ~Leo ~Leo ~Loo ~Loo ~Loo ~L ~L ~Leo Wind

~dd ~L Time Re CPI

~ME ~L Time Re R nm Distance of Loo from Coast 28 Donna, 8/29-9/13, Intense 121 930 33 1960 (2 days after max wind) 29 1938 9/10 9/17d Intense 140 56 140 943 Very fast translational speed adding to storm winds caused unprecedented damage .

30 1935, 8/29-9/10, Intense 112 892 (Laboratory Hurricane)

- NCAA Tech Report NWS 15 uSome Characteristics of Hurricanes and Tropical Storms, Gulf and East Coasts of the US," by Ho, Schweult, and Goodyear (Ref 2.4.5.1. 2-3)

B - As reported by the Monthly Weather Review (Ref 2.4.5.1.2-41)

M Missing data dis - dissipated 2.4-100

SL2-FEAR TABLE 2.4-15

SUMMARY

OF HURRICANE AND STORM DATA Beach Width Importances Manner in Which Maximum Storm or Peak Surge Duration Dune in Wind Speed of Littoral Erosion Erosion was Erosion Erosion Author Location/Year Hurricanes Hei ht of Sur e Ph sio ra h Hei ht Area Eroded max. ) Wave Hei ht Currents Mechanism Determined Determined (ft'/ft)

Shuyakly, Y.D. Baltic Sea Great Storm 2 in above pre- 13-15 hrs Alternating 2 5m 24-40m 50-55 m/sec Height Important Cliff Reported Russia dicted tide headlands and to 6.0-6.5m retreat 24,000 m 3

/km 258 ft3 /ft 1967 embayments20-25m (calculated)

Grove, A.T. Norfolk Great Storm 6-8 ft above 2 days Coastal 25 ft '?

100-110 mph Height Important Benching Measured from England Northeaster predicted tide beach 8.0 ft profile 2,640 ft /ft 2.640 ft /ft 1953 1953 (estimated)

Williams, W.W. Suffolk Coast Great Storm 6-8 ft above 2 days Coastal 100-110 mph Height Important Cliff Reported England Northeaster predicted tide beach 8.0 ft retreat 1,600 ft /ft 1,600 ft /ft 1953 1953 (estimated)

Dolan, R. North Carolina Hurricane 2.5m above Barrier 2-4m 75-100 mph Height Foreshore Measured from 1971 Ginger M.S.L Island 4-5m retreat profile 450 ft /ft 550 ft /ft Benching 350 ft /ft 350 ft /ft Hayes, M.O. Texas Gulf Coast Hurricane 5-10 ft 2 days Barrier 10 to 50-75 ft ) 15075 mph Benching Reported 3,000 ft /ft 3,000 ft /ft 1961 Carla above pre- Island 50 ft mph dicted tide (max)

Nichols, R.L. and Rhode Island Unnamed 13. 75 12 hours Barrier 25 to 50-100 ft 121 mph Cjiff Reported Marston, H.Z. 1938 Hurricane above M.H.W. Island 30 ft (max) retreat 1,500 ft3 /ft 1,500 ft3 /ft Benching 1,240 ft /ft 1,250 ft /ft Warnke, D.A., Florida Hurricane .76m above 18 hours2.083333e-4 days <br />0.005 hours <br />2.97619e-5 weeks <br />6.849e-6 months <br /> Sand spit 4-5m 15-20m Benching Measured from 3 et al. 1965 Betsy predicted tide profile 21 jm 225 ft /ft Bretschneider, C.L. New England High 5 Storm 5-10 ft above 2-3 days Barrier Up to 100-150f t 60-80 mph -12 ft Foreshore Measured from 1962 Northeaster predicted tide Island 20 ft retreat profile 1,400 ft /ft 1,400 ft /ft Caldwell, J.M. Virginia Northeaster 6.8 ft above 2 days Barrier  ? 200 ft Foreshore Measured from 1948 M.L.W. Island retreat profile 1,450 ft /ft 1,450 ft /ft