ML18096B402

1970 Annual Report Florida Power & Light Company

ML18096B402
Person / Time
Site:	Saint Lucie   (DPR-067, NPF-016)
Issue date:	12/31/1970
From:	Fullerton R, Matthew Smith Florida Power & Light Co
To:	US Atomic Energy Commission (AEC)
References
Download: ML18096B402 (22)

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1970 AT A GLANCE SALES were up 13% and totaled 23,115,381,000 kilowatt hours... for an increase of 233% since 1960 compared with 104% for the nation.

OPERATING REVENUES were $416,051,924, up $46,542,000 over 1969, a ten-year in-crease of 141% in electric revenues.

EARNINGS for Common Stock were $3.95 per share compared with $3.72 per share for 1969.

h DIVIDENDS on Common Stock of $2.03 per share were paid, compared with $1.91 per share in 1969.

CUSTOMERS increased 79,523 and 1,300,674 were served at the end of the year, a 69% gain over 1960, compared with 23% for the nation.

CAPABILITYwas increased 8% to 5,911,000 kilowatts up 213% since 1960, com-pared with an increase of 101% for the nation.

LINE AND SUBSTATION expansion added 1,105 miles of new distribution and trans-mission lines and 2,591,380 Kva of distribution substation capacity.

, NEW CONSTRUCTION expenditures amounted to $250,345,000 and totaled

$1,192,-

088,000 since 1960.

COVERS FRONT: Alegendary Florida moon, suspend-ed over the glowing Gold Coast, symbolizes the State's natural assets:

a climate which induces bountiful agricultural yields; a sub-tropical beauty from which Florida absorbs Its strength, its unusual economIc stability.

INSIDE FRONT: Containment vessel for new nuclear unit at Hutchinson Island begins to take shape as workmen guide 20-ton steel plate, first of 200, into position. The giant vessel will house the plant's reactor, steam generators, pumps and the instrumentatlon.

CONTENTS 1970 at a Glance Highlights of 1970 Revenue Dollar To Our Stockholders Florida's Economy FPL Expands to Serve Environmental Commitment Grow h Trends Financial Statements Accountants'pinion Directors and Officers 14 15 19 19

HIGHLIGHTS OF 1970 OPERATING REVENUES

$ Thousands 1970 1969

$416,052

$369,510 OPERATING AND INCOME DEDUCTIONS Taxes (including Charge Equivalent to Investment Credit)

Payroll, Cost of Pensions, Group Insurance and other Benefits Fuel Supplies and Other Expenses Depreciation and Amortization Interest Other Income and Income Deductions (net)

Total Deductions NET INCOME Preferred Stock Dividend Requirements Balance Available for Common Stock Dividends on Common Stock Balance Retained in the Business

'Taxes Include $971,000 for FederaI Income Tax surcharge in 1970 and $4,814,000 In 1969.

78,583 71,640 86,758 39,763 41,567 38,375 139 356,825 59,227 1,615 57,612 29,638

$ 27,974 82,852 60,002 72,908 30,803 37,608 32,523 (613) 316,083 53,427 1,615 51,812 26,549

$ 25,263 THE REVENUE DOLLAR WHERE IT CAME FROM Residential Commercial 54Ir:

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Government, Municipal and Other 9g Industrial WHERE JT WENT Fuel Taxes Payroll and Employee Benefits Depreciation and Amortization Supplies and Other Expenses Interest and Other Deductions Dividends Retained in Business 21/

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florida's appeal spurs sound economy The beauty of the land and the comfort of the climate have proved once again to be Florida's unbeatable combination.

While the nation's economy slumped downward in 1970, Florida felt only a tremor, and refused to follow the general trend.

The State continued weaving its historic pattern of growth even as the nation registered economic declines. Florida declined only in percentage rate of growth over preceding

years, moving onward but moving more slowly than before.

Counting heads, the 1970 census registered a

population figure of 6,789,443... this being 1,837,-

883 more Floridians than counted in the previous census in 1960. The gain was an increase of 37 percent, second only to California in number and to Nevada in percentage.

Total Florida employment was up 1.9 percent in 1970 over the previous year. With national unem-ployment reaching six percent during the recession period, Florida's was a comparative 3.5 percent.

Hand in hand with population growth came 1970's increases in bank deposits and debits; new business and industry; building and construction; number of single-family dwellings and condominium units; new department stores and greater personal incomes.

Increases in trades and services more than offset percentage declines in manufacturing and construc-tion and, while building contracts for new dwelling

~ units declined in the State, dollar volume of non-residential building increased over last year's total.

And the year ahead looks brighter for the con-struction of single-family and multi-unit housing as interest rates slip downward.

Adding to Florida's economic prospects for the future, three of the nation's largest banks obtained Federal Reserve Board approval to open interna-tional banking subsidiaries in Miami. Meanwhile, South Florida took another giant step toward be-coming a national financial center when a Federal Reserve Branch office was opened in Coral Gables, the Reserve Board's first such move in 40 years.

Looking at the State's tourist industry, airlines reported that despite a slowdown during the latter part of the year, total traffic increased slightly.

Major tourist attractions throughout the State confirmed that their percentage increase had dipped. At the same time, however, South Florida hotels and motels reported capacity reservations through the Christmas-New Year holidays and capacity bookings at the time of the Super Bowl Game in January.

In the past

year, almost 680,000 passengers sailed on ships permanently based at Port Ever-glades and Miami. Another 50,000 people came ashore at South Florida from other ships in transit.

Major ports throughout the State recorded pas-senger and cargo gains.

Manufacturing continues to develop in Florida.

Work moves ahead on the vast IBM complex at Boca Raton which is expected to employ 6,000 peo-ple; Reeves Instruments has relocated from Long Island to Boynton Beach; and Florida Steel Com-pany is completing a 87 million plant at Indiantown.

Rising activity can also be seen in modular building pre-built houses, classrooms, hotel rooms.

In agriculture, the value of Florida's crops con-tinues to rise. Even after losses due to cold weather, the orange crop is expected easily to fill more than last year's 138 million boxes.

Looking back on a year of national recession, Florida again demonstrated its economic vitality

...a vitality nourished by famous sunshine and natural beauty.

invigorating elements of Florida's economy are its climate, natural beauties and recreational advantages which inspire tourism; bumper agricultural and citrus crops; a building industry primed by an influx of visitors and new resldents.-

a message to our stockholders 1970 was an extraordinary year for our Company.

It was a time of new records and achievements.

It was a season of challenge and change.

We connected nearly 80,000 new customers,'till another all-time high in a trend that has seen FPL lead the nation's utilities in new electric cus-tomer gains.

And we recorded a long series of new system peak demands for power. New generating units went on the line as we pressed ahead with seven other major power plant projects.

Expansion called for more than $250 millionthe biggest one-year con-struction expenditure in our history.

These figures mirror the "recession resistant" vitality of the land we serve. Florida felt the national downturn, of course, but Iong-term growth trends softened the effect. The State's economic indicators continued to climb, but at a slower rate.

Behind such performance is the unique beauty and appeal that is Florida's natural strength. While the desirability of growth is being questioned by some nowadays, there is little indication Floridians have adopted that attitude.

In today's turbulent world our society's institu-tions and priorities are being challenged on many issues. Because utilities play important roles in the lives of so many people, we often find ourselves at the crossroads of current controversy.

Such is the case at our Turkey Point project which js deeply entangled in litigation as a "landmark" case in the national debate on thermal effects of power plants.

It represents a difficult dilemma in-volving both power and environmental requirements.

At the same time, it is clear that electricity is a necessary tool in solving problems of pollution. It' the cleanest energy known. And more, not less, will be required for so many of the plans and processes to improve the quality of our environment.

Meanwhile, we are working very hard to diminish the effect of our own facilities on the environment.

Our achievements in this direction earned national recognition in 1970 when a leading trade journal honored FPL for "environmental action."

During the year our Company faced the pinch of inflation, rising taxes and record high interest charges on funds for construction. There are no pat answers to the problems that confront us as a nation, as a Company, as individuals. We are confident, however, that solutions to our present social, eco-nomic and environmental problems willbe produced

... through the same kind of ingenuity and energy our free enterprise system has demonstrated in providing our citizens with a standard of living un-paralleled in history.

Ingenuity and energy were also exhibited during 1970 by members of our Sunshine Service team in achieving the record reported in the following pages of this, our 45th Annual Report. We are grate-ful for their fine work, and for the confidence and support of our 27,000 Stockholders.

Respectfully submitted By Order of the Board of Directors McGregor Smith Chairman R. C. Fullerton President and Chief Executive Miami, Florida, February 15, 1971

record expansion to serve state' energy demand In 1970, FPL picked up right where it left off in the sixties growing, planning, building, setting new records.

The accelerating tempo was the same.

Only the decade was different.

The Company added more new customers in 1970 than ever before: more than 1,500 per week, or nearly 80,000 for the year. This was an extension of the trend that has seen FPL lead all other utilities in the nation in electric customer gains during recent years. The Company now serves more than 1.3 mil~

lion customers.

Unprecedented increases in the use of electric service kept the Company's generators spinning at near capacity in meeting a series of ail-time peak demands for power. The record set the previous year was topped 66 times. The latest all-time high was 271 percent higher than Just ten years ago.

These new records reflected rapid gain in new customers as well as increases in the use of service.

The average homeowner consumed 10,595 kilowatt hours, an eight percent increase over 1969.

To meet these soaring requirements, FPL raced ahead with a record construction program. New or expanded service centers and offices were added.

Some 1,100 miles of new transmission and distri-bution lines, and 13 new substations expanded and strengthened the power delivery system.

And in

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another step to make the electric power supply in its service area more reliable, FPL teamed up with 21 other utilities in January to form the Southeastern

.,- Electric Reliability Council.

',s Dust cover protects steam generator as Turkey Point's first nuclear unit nears completion; pressurized water

'removes salt deposits trom Insulators; research produces experimental semi-submersible transformer; 440,000 Kw

% let turbines add Instant peaking power at Lauderdale plant.

Expansion in 1970 called for more than $250 mil-lion biggest one-year construction budget in FPL's history. The Company will spend an estimated $1.9 billion to nearly double generating capability in the five-year period ending with 1975.

To help finance the new facilities, the Company in July marketed $70 million of five-year First Mort-gage Bonds at competitive bidding bearing interest at 8~/s percent the highest in FPL's history and a net cost of 8.10 percent to the Company. At year' end $71,600,000 of short-term borrowings were out-standing. These were liquidated in January,

1971, when $80 million of 30-year First Mortgage Bonds were sold at competitive bidding bearing interest at 7s/s percent and a net interest cost of 7.612 per-cent to the Company.

FPL increased its generating capability during the year by installing "quick start" gas turbine peaking units at the Lauderdale Plant. These gen-erators added 440,000 kilowatts to bring total in-stalled system capability to 5,911,000 kilowatts.

The Company has scheduled operation of the first of two 760,000 kilowatt nuclear units at the Turkey. Point Plant, and 444,000 kilowatts in gas turbine peaking units at Port Everglades, to meet the increasing demand and peak periods in the summer of 1971. Operation of the second nuclear unit at Turkey Point is slated for the summer of 1972.

Meanwhile, construction is under way on two conventional 419,000 kilowatt additions to the San-ford Plant, one for 1972 and one for 1973, and an 890,000 kilowatt nuclear plant at Hutchlnson Island for 1974 operation.

Also, in the initial stages of planning is an 850,000 kilowatt conventional plant at Port Manatee for 1974. Another 850,000 kilowatt unit is planned for 1975.

In reviewing this challenging construCtion calen-

dar, the Company's most immediate concern in meeting both power and environmental requirements is the Turkey Point development.

The project is snarled in litigation some call a "landmark" case in the national controversy over the thermal effect of power plant operation.

In February, 1970, a Federal-State Conference on Turkey Point revealed just what a tangle of conflict-ing views exists among experts and authorities on the subject of what, if any, effect power plant cool-ing water has on marine life.

In March, however, the U.S. Justice Department brought suit in connection with the construction and operation of the Turkey Point power plant facilities, seeking an injunction against alleged present and future ecological disturbances by the operation of such facilities.

After hearing evidence, the Federal District Judge in April denied the preliminary injunction. He con-cluded that it had not been shown that the present operation at Turkey Point is causing irreparable damage to the Bay.

In December, the District Court granted in part and denied in part the Company's motion to dismiss the action. At the same time, the Fifth Circuit Court of Appeals was requested to rule on the question of whether "heated water" or "thermal pollution" is "refuse matter" under a Federal Statute. The Court of Appeals declined to hear the case, however, and returned it to the District Court where the case is now proceeding.

Meanwhile, in November a suit was filed in Fed-eral Court by Abigail Starr Avery, an FPL stock-holder in Massachusetts, seeking an injunction to stop work on the Turkey Point project "as presently planned, without the necessary Federal and State permits..." The suit also asks that Officers-Direc-tors McGregor Smith, Robert H. Fite and R.

C.

Fullerton, be required to pay the Company $300 mil-lion as damages.

The case is now pending.

The various permits required for construction of the final leg of the Turkey Point cooling system must be obtained in proper sequence.

In November, Dade County approved necessary construction and, in December, the State Internal Improvement Fund Board gave similar approval. Additional permits will be required from the State Department of Air 8 Water Pollution Control and from the U. S. Army Corps of Engineers. Applications have been made and discussions with these agencies continue.

Bechtel Corporation, the general contractor for the Turkey Point project, has asked for arbitration over the amount to be paid under the lump-sum contract for the two nuclear units. Bechtel claims additional compensation of approximately

$38.4 million (its original claim was stated to the Company as being $30.1 million) because of changes required by the Company and the Atomic Energy Commis-sion, and by factors such as rapid inflation, in-creased labor costs, schedule delays and reduction in labor productivity. FPL's position: Bechtel should be compensated only for the increase due to actual changes required by the Company and the AEC.

Another case involving Turkey Point was argued before the Florida Supreme Court in October. After r

%P La A COMPANY PROFILE

~ Incorporated in 1925.

~ Engaged exclusively in the electric utility business.

~ Has 1.3 million customers, approximately 27,000 stockholders and 7,334 employees at the end of 1970:

~ Serves 560 communities along most of Florida's East and Lower West Coasts, the area around southern and eastern Lake Okeechobee, and portions of Cen-tral and North Central Florida.

~ Service area composed of six divisions and 31 districts.

~ Principal executive offices located at 4200 Flagler Street, Miami, Florida, 33134, telephone 305/445-6211; mailing address is Box 3100, Miami, Florida 33101.

~ Operates ten power plants, 52 service centers, 226 substations, and more than 28,000 miles of lines.

~ Has emergency interconnections with Florida Power Corporation, Tampa Electric Company, City of Jack-sonville, and Orlando Utilities Commission.

~ Regulated by the Florida Public Service Commission as to rates, service, accounting, issuance of securities and certain other activities.

~ Subject to requirements of the Securities Exchange Act; files reports and other information with the Se-curities and Exchange Commission.

~ Listed on New York Stock Exchange, where Cotn-pany's reports, proxy material and other information also are on file.

the Company condemned a strip of land approxi-mately five miles long to construct the cooling canal system, the landowner twice appealed the decision.

The Florida District Court and the State Supreme Court have upheld the taking of land for the canal.

The landowner has filed a petition for rehearing in the State Supreme Court.

It adds up to a difficult dilemma of the times at Turkey Point. All efforts are aimed at properly re-solving the complex maze of legal and technical problems.

But to meet power requirements, the first nuclear unit must be in service during the summer of '71. And to meet environmental require-ments the cooling water system must be completed at that time.

As an ironic backdrop to these events, the public's preference for the comforts and convenience of electric living is more apparent than ever. Of all new dwelling units constructed in our area during the year, over 95 percent were equipped with elec-tric ranges; 83 percent with electric water heaters; and 99 percent with Full Housepower wiring. Today, some 800,000 FPL-served families heat water and cook electrically, while 770,000 have electric air conditioning... and more than half of these families have reverse-cycle models for heating and cooling.

Also, FPL's custotners were still enjoying one of the biggest bargains in town, with the average home-owner paying a price per kilowatt hour that was 26 percent below the average in 1960, despite a period of severe inflation.

In December, the Florida Public Service Commis-sion ordered a resumption of FPL rate hearings, originally launched in 1968 on the Commission's own motion to determine if the rates "are fair and reasonable and, if not, then what adjustment should be made..." Various motions by intervenors have prolonged the proceedings.

The Commission now

~ has ordered new hearings set for March 31, 1971.

The U.S. Fifth Circuit Court in July, on appeal by FPL, reversed a Federal Power Commission order of 1967 which asserted jurisdiction over the Com-pany. The FPC has since petitioned the U.S. Su-preme Court to hear the case. On February 22, the Supreme Court agreed to hear the matter.

In other litigation, discovery proceedings are now in process in action brought against FPL and Florida Power Corporation by the City of Gainesville claim-ing damages under the Sherman Act. The suit, filed in 1968, claims the defendants would not allow Gainesville to join an interconnection group without agreeing to an exclusive service territory arrange-ment.

In answer to the complaint, numerous de-fenses have been filed and Florida Power Corpora-tion has filed a counterclaim.

During the year, FPL Directors added two new members of the Board. Lewis E. Wadsworth was elected in February, and George F.

Bennett in August. Wadsworth is president and director of Wadsworth Lumber Company, Inc. and of Bunnell Timber Company, Inc., with operations in the Bun-nell and Palatka, Florida, areas. Bennett is president of the State Street Investment Corporation, The Second Federal Street Fund, Inc. and a partner of State Street Research

& Management

Company, Boston, Massachusetts.

He also is treasurer of Harvard University.

He succeeded William A.

Shands, who was named Advisory Director after 23 years as a regular member of FPL's Board.

FPL people the skill, heart and hands of Sun-shine Service also increased in number during 1970. At year's end there were 7,334, up 746 over the previous year.

Other members of the "FPL team" are the thou-sands who own the Company's 14,600,000 outstand-ing shares of Common Stock. They live in every state of the union, and in many foreign countries.

Men own about eight percent of the shares, and women own approximately nine percent while two percent is jointlyowned. Companies and institutions hold about nine percent of the stock and trustees and others own the remaining 72 percent.

information centers function in each of the Company's 31 districts for the courteous and elliclent disposition of cus-tomer inquiries. General Oflice Building computer center processes 60,000 systemwide customer accounts daily.

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a commitment to serve man and preserve nature If 1970 rates a special note in history, it may be because this was the year that we, as a people, took a long look at the world around us.

Environment,

ecology, litter, and pollution be-came everyday words in 1970. And everyone joined the cause.

Government,

industry, business, and individuals, young as well as old, became involved in this emotion-charged issue.

The finger of blame pointed in every direction.

For electric companies the controversy over ecology is a paradox. Utilities must build to meet the demand for low-cost and reliable power, yet often on the basis of some unconfirmed threat to ecology, some consumers of this service are attempting to block construction of facilities essential to the pro-duction of the power they need.

Our country has achieved a standard of living, as exemplified in our own Florida, far beyond the dreams of most men through history. This achieve-ment has been possible to a large extent by the innovative use of electric power, the cleanest energy available.

The electric facilities that are being delayed by ecological arguments are necessary not only to sustain our standard of living, but to achieve a

truly livable earth.

Most often where electricity has replaced othe'r forms of energy, pollution has been materially re-duced. Some complain that power plants emit smoke yet how much smoke has been eliminated by the electrification of homes and factoriesV Others may "be concerned about the thermal effect of power 4 Blscltyne Bay temperature ls regularly checked by FPL at

'ey relerence points; landscaping, lighting blend substa-tlon esthetically with surroundings; air quality ls monitored at 56 stations around our system; a reforestation project at

~Ft. Myers plant; aquatic llle is studied lor thermal ollocts.

plant cooling water yet how much water pollution has been eliminated by electrical applications in the processing of sewage?

Environmental improvement is a task for which our State and nation ultimately will need more, not less, power production. FPL, obligated to produce this essential

energy, feels equally obligated to protect our natural surroundings.

Our Company is publicly committed to this dual responsibility: to serve man and preserve nature.

FPL has spent more than 81 million in research and studies in seeking answers to the question of thermal effects.

The resulting reports indicated that the water cooling plan for our Turkey Point Plant could operate without adversely affecting the aquatic life of Biscayne Bay and Card Sound; that the system could function within limits of the strict regulation imposed by the Metropolitan Dade Coun-ty Pollution Control Board.

Although these conclusions were reached by respected scientists, they were still contested. Sud-denly the Turkey Point Plant, which previously had been commended by the local and national press as a "prime example of the marriage that is possible between industry and conservation,"

became a

"landmark case" in the nationwide debate on ther-mal effects.

Determined to provide a cooling system at Turkey Point with proper safeguards for marine life, our, Company has traveled a long and difficult road.

In addition to consultations with dozens of experts, FPL has cooperated with every concerned public agency 35 in all at every governmental level. Company research has been made available to these agencies and their advice has been sought.

FPL has cooperated with State and Federal water pollution control authorities; considered the views of concerned members of the public; participated in conferences, seminars, courses and hearings all over the nation in the search for a better solution.

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12 Unfortunately for our Company and the public, the scientific world is divided on the subject of what temperature is harmful to aquatic life...despite the intensive study and research which has been conducted in quest of factual guidelines.

By funding $320,000 to the University of Miami for ecological and hydrological studies of lower Biscayne Bay and Card Sound, and establishing a system of continuing temperature monitoring, the Company will have provided a "field laboratory" for the study of thermal effects under controlled con-ditions. Data gathered in the program, supplement-ed by previous

research, will enable all to gain more knowledge on this subject of concern to our community as well as to the State and the nation.

These difficult problems at Turkey Point exist because the government came in and changed the interpretation of the rules long after construction had advanced past the point of no return if we were to have adequate power in Florida in the summer of 1971.

FPL's sense of responsibility in protecting marine life is further reflected in developments at new power plant projects around the system.

At the Sanford Plant in Central Florida, where two 419,000 kilowatt generating units are under construction, a self-contained cooling system is being developed.

The 1,090-acre fresh-water cool-ing lake will provide the necessary cooling and will connect with no other bodies of water.

The Hutchinson Island Plant, presently under con-struction, fronts on both the Indian River and Atlantic Ocean. Upon recommendations of the Federal Water Pollution Control Administration and the State of Florida, FPL engineers designed an ocean-to-ocean cooling system for this plant.

In addition to the beauty of these shores, clean air is one of Florida's greatest assets.

FPL has actively, and successfully, worked for many years to develop the most efficient forms of combustion to help protect the quality of the air.

The Company has never burned coal, which pro-duces flyash. Oil and natural gas are the only fuels used in our furnaces.

Natural gas is preferred be-cause of its cleaner burn. We are working hard to buy additional quantities of natural gas and low sulphur oil. Unfortunately, the demand for both of these fuels greatly exceeds the available supply.

Each day FPL purchases 290 million cubic feet of natural gas, delivered directly to Florida by two pipelines originating at wells in Louisiana and Texas.

The second of these two lines was completed by the supplier in 1968 at a cost of $92 million to deliver additional quantities of gas.

In order to use this new gas supply, FPL spent well over $ 1 million converting plant burners so that oil and gas could be burned either separately or simultaneously.

In addition to burning higher quality fuel, other methods are used to reduce stack emissions.

Fire-side surfaces of boilers are coated daily with a special chemical-slurry spray system developed by Company engineers; stacks are cleaned regularly ENVIRONMENTALACTION One of five electric utilities in the nation honored by Electrical World Magazine's 1970 Environmental Ac-tion Award program, FPL was recognized for "emi-nence In the field of environmental control and creative conservation".

The journal specifically lauded the Company for "effectively blending beauty and function in Its production, distribution, and other facilities, par-ticuiariy as expressed in harmonious architecture, tasteful landscaping and provision for recreational facilities".

The entire range of FPL's environmental efforts was evaluated-programs to combat air and water pollution, progress in underground

service, beautification of facilities and development of parks,

marinas, Scout camps and other areas for conservation and recreation.

In determining recipients of the awards, Electrical World editors reviewed achievements of public and private utilities from Maine to California. Those honored were chosen because their programs were outstanding and coordinated, encompassing the total field of ea-vironmental action; and because they "best exemplify the industry's concern for preservation and enhance-ment of the environment".

with high pressure water; instruments assure the best possible combustion conditions, and highly efficient dust collection equipment is used.

New nuclear units under construction promise to improve the environment. There is no combustion in these units. And where there is no fire, there is no smoke.

FPL keeps close scrutiny on all operations. The percentage of pollutants in the air is constantly measured at 56 monitoring stations located through-out the system. The Company tests air samplings around-the-clock for dust fall, chemical content and the presence of organic matter.

While FPL has been concerned with the waters around us, and the air we breathe, it has not over-looked the beauty of Florida's land itself. Company facilities offer persuasive evidence that man can progress and still live in harmony with nature.

At the 180-acre Palatka Plant site, a forest has been preserved as a haven for birds and picnickers; at the Sanford Plant a 42-acre park, operated by Volusia and Seminole counties, provides campsites, picnic areas, boat docks, and has attracted visitors from every corner of the nation; at the Fort Myers Plant a 10-acre pine forest was established in co-operation with the Florida Forestry Service.

Most of Turkey Point's 3,500 acres have been developed into Dade County's largest natural park and conservation area.

It includes a wildlife sanc-tuary, nature trails, Scout camps, public beach and picnic areas.

Also in the Greater Miami area, FPL is cooperat-ing in a pilot demonstration project, made possible by matching Federal (HUD) and local government

grants, to convert power line rights-of-way into linear parks. The 3~/z-mile stretch in the demonstra-tion willbe used for such activities as hiking, bicycle and horseback riding, jogging. It will connect rec-reation facilities, residential and commercial areas.

This imaginative program to develop public open space is contemplated as a model for the nation.

A large part of the 1,132-acre Hutchinson Island "ite, which includes a two-mile stretch of beach-front, will be maintained in its natural state. These and other recreation facilities created by FPL are enjoyed by thousands of Floridians each year.

Substations also are part of the Company's en-vironmental picture. Because they must be located where the electric demand is, they are individually designed in keeping with FPL's policy of blending beauty with service. The use of landscaping and color help fit them harmoniously into their natural surroundings.

Lines and poles of new design are also attaining a greater degree of compatibility with the environ-ment. And with increasing frequency underground service is being instailed in newly developed resi-dential areas. More than half of the new residential customers connected in 1970 were served by under-ground installations.

FPL's district offices, located where they will be convenient to the greatest number of people, are constructed to meet the service needs of the area's customers and to meet esthetic needs of the neigh-borhood. Service centers are designed to function as good neighbors in their locations throughout the system.

Numerous civic beautification awards have been presented to FPL substations, district offices and service centers.

In helping protect and enhance the environment, our Company has achieved much in the past. And we intend to do more in the future. Our programs in pollution control and beautification are constant-ly being accelerated and expanded.

The entire environmental issue is serious.

Be-cause it is also emotional, electric companies such as ours too often have been portrayed as inevitable adversaries of those who seek to protect the en-vironment. In truth, we all seek the same goal. We are all concerned about the world in which we live.

And our Company intends to do its share to make this a better and cleaner earth.

A 42-acre moss-draped park overlooks the St. Johns River at our Sanlord Plant to accommodate campers and boaters.

The Girl Scout camp at Turkey Point fronts on its private beach and offers picturesque mangrove-lined canoe trails.

Operating Revenue-Millions ol Dollars Generating Capability-Thousands ol KW Customers Thousands fenct ol year)

Sales-Millions ol IAVH 425

~o ee

=-~ill Iffttp SO 0 A Sl 0 0 0 8 Sl 61 62 53 54 65 68 57 68 69 70 8 1 62 83 84 65 66 67 68 S9 70 1250 1150-1100

. ger HIImcsamm mmesi Ias 81 82 63 84 85 68 87 68 69 70 24000-22000-20000-18000-16000-14000-12000-10000-8000-S000-81 82 83 84 65 68 67 88 Cl C3 69 70 OPERATING REVENUES increased

$46.5 million, 141% higher than 1960 due to new customers and to in-creased customer use.

GENERATING CAPABILITY was In.

creased to 5,911,000 kilowatts at end of year-over three times the total system capability in 1960.

NEW CUSTOMERS homes, farms and businesses were added at the rate of 1,529 per week, totaling 79,523 new customers for the year.

SALES were in excess of 23 billion kilowatt hours, representing a

13%

gain over 1969. The total was almost 3V2 times the sales during 1960.

Percent 40 Consumer Price Index Compared erlth cost ol electricity to FPL Residential Customers 1f000 Residential Use-KVVHIcustomer 1400-1200-Construction Expenditures Millions ol collars (cumulathre)

System Expansion Thousands ol Klloxratts Planned Ceneuuc Van 11 07 10-

~x eo 5911 10-3718 40-2000-1000-1888 PW~jk'

l~'X'-

SO S2 64 68 68 70 AVERAGE PRICE paid per residential kilowatt hour is down 26% since 1960 welcome contrast compared with other living costs.

S 1 S2 83 54 65 S6 67 SS S9 70 RESIDENTIAL USE averaged 10,595 Kwh per customer-about 2.25 times the usage in 1960; 50% higher than the national average.

67 68 69 70 71 EXPENDITURES for the Company's expansion program amounted to 3250,345,000 for the year, highest in Company history.

1955 f980 1965 1970 1975 EXPANSION of generating facilities willalmost double the Company's total system capability in the five-year period, 1971-1975.

14

STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31,-1970 AND 1969 INCOME OPERATING REVENUES OPERATING EXPENSES:

Operation Maintenance Depreciation (Note 1)

Taxes other than income taxes Federal income tax (Note 1)

Income taxes deferred (Note 1):

Accelerated amortization Accelerated depreciation Charge equivalent to the investment credit...........

Amortization of investment credit Total operating expenses OPERATING INCOME OTHER INCOMENet INCOME BEFORE INTEREST CHARGES INTEREST CHARGES:

Interest on long-term debt Amortization of debt premium and expense net.....

Other interest net Total interest charges NET INCOME Net income per share of common stock (after dividends on preferred stock) based on weighted average number of shares outstanding 1970

$41 6.051,924 1969

$369,509,924 167,001,417 31,437,893 42,327,529

35,265,841 42)203,009 (1,272,468) 1,330,885 1,056,216

~(760,637 318,589,685 97,462,239 138,855 97,601,094 140,238,012 23,475,952 38,247,431 31,365,638 49,385,799 (923,244) 3,023,520 (639,696) 284,173,412 85,336,512 612,625 85,949.137 34,977,648 (94,110) 3,491,213 38,374,751 30,606,450

. (89,725) 2,006,016 32,522,741 8 59.226.343

$ 53,426.396 RETAINED EARNINGS BALANCEAT BEGINNING OF YEAR 83.95 83.72

$172,799,735 8147,537,089 NET INCOME Total DEDUCT CASH DIVIDENDS:

Preferred Stock:

4-~/z% (all series) 4.32% series D

4.35% series E

Common stock 1970, $2.03 a share; 1969, $1.91 a share (on 14,600,000 and 13,900,000 shares respectively)

Total BALANCE AT END OF YEAR 59,226,343 232,026,078 1,181,250 216,000 217,500 29,638,000 31,252,750

$200,773,328 53,426,396 200,963,485 1,181,250 216,000 217,500 26,549,000 28,163,750

$172,799,735 The accompanying Notes to Financial Statements are an integral part of these statements.

LIABILITIES PROPRIETARY CAPITAL:

Preferred stock (Note 2)

Premium on preferred stock Common stock, no par authorized, 50,000,000 shares; outstanding: 14,600,000 shares in 1970 and 1969 Capital stock expense (no change during 1969)

Retained earnings Total proprietary capital LONG-TERM DEBT (Note 3)

Total capitalization CUSTOMERS'EPOSITS (Note 4)

. CURRENT LIABILITIES:

Notes payable Accounts payable Federal income taxes accrued Other taxes accrued Pension costs accrued (Note 5)

Interest accrued...................................

Contract retentions due within one year..............

Tax collections payable Other current liabilities Total current liabilities 1970 36,250,000 118,450 299,242,700 (2,223,124) 200,773,328 534,161,354 670,519,000 1,204,680,354 35,036,737 71,600,000 15,181,484 14,496,783 11,959,270 10,175,180 8,853,741 4,279,844 4,255,530 7,481,556 148,283,388 1969 36,250,000 118,450 k

299,242,700 (2,157,510) 172,799,735 506,253,375 600,926 000 1,107 179,375 32,232,950 10,007,772 13,343,512 10,781,383 6,509,809 5,745,771 3,467,306 3,366,184 5,606,986 58,828,723 DEFERRED CREDITS:

Unamortized premium on debt Customers'dvances for construction, etc...........

Unamortized investment credit Total deferred credits CONTRACT RETENTIONS RESERVES:

Storm damage Injuries and damages.............................

-Total reserves CONTRIBUTIONS IN AID OF CONSTRUCTION..........

ACCUMULATEDDEFERRED INCOME TAXES (Note 1):

Accelerated amortization Accelerated depreciation Total accumulated deferred income taxes...

COMMITMENTS AND CONTINGENCIES (Note 6)

TOTAL 2,975,881 2,356,282 17,159,538 22,491,701 8,741,941 3,144,785 1,457,062 16,863,959 21,465,806 8,505,487 11,711,772 1,810,343 13,522,115 12,940,636 11,023,576 1,330,885 12,354,461 11,268,077 2,183,410 13,451,487 10,112,970 12,296,044 12,296,044

$1,458,051,333

$1 264 072 842

FLORIDA POWER 8. LIGHT COMPANY BALANCE SHEET DECEMBER 31, 1970 AND 1969 ASSETS ELECTRIC UTILITYPLANT:

At original cost Less accumulated depreciation Net Construction work in progress 1970

$1,421,065,964 297,225,022 1,123,840,942 242,221,443 1969

$1,281,667,300 266,393,215 1,015,274,085 148,255,961 Electric utility plant less accumulated depreciation.....

1,366,062,385 1,163,530,046 INVESTMENTS:

Storm damage reserve fund Other investments Total investments 11,711,772 434,354 12,146,'I 26 11,268,077 474,501 11,742,578 CURRENT ASSETS:

Cash Temporary investments Accounts receivable:

Customers (less allowance for uncollectible accounts:

1970, $839,307; 1969, $780,133).....

Employees and miscellaneous Materials and supplies-at average cost (less allowance for inventory adjustment:

1970, $157,756; 1969, $208,425)

Other current assets Total current assets 7,935,414 2,750,000 23,028,033 3,210,526 37,724,187 4,959,542 79,607,702 6,919,591 19,847,022 21,655,415 2,612,075 33,265,808 3,875,185 88,175,096 DEFERRED DEBITS 235,120 625,122 TOTAL

$1,458,051,333

'1,264,072,842 The accompanying Notes to Financial'Statements are an integral part of this statement.

SOURCE AND APPLICATION OF FUNDS FOR THE YEARS ENDED DECEMBER 31, 1970 AND 1969 SOURCE OF FUNDS:

Current operations:

Net income Depreciation and amortization (Note 1)

Charge equivalent to the investment credit and deferred income taxes, less amortization...............

Total Sale of first mortgage

bonds, including premium Sale of 700,000 shares of common stock..

Net saivage from plant retired..........

Increase in customers'eposits and con-tributions in aid of construction.......

Other sources net Total APPLICATION OF FUNDS:

Construction expenditures..........

Sinking fund for debt retirement.....

Dividends paid Total Increase (Decrease) in working capital 1970 S 59,226,343 42,327,529 1969

$ 53,426,396 38,247,431 353,996 101,907,868 70,070,700 3,420,680 5,631,453 2,952,014 1,460,580 93,134,407 50,265,000 43,960,000 (33,590) 4,908,926 3,039,434 183.982,715 195.274.177 250,345,024 407,000 31,252,750 149,244,683 533,000 28,163,750 282004774 177941,433

~398,022,089

$ 17.332,744 The accompanying Notes to Financial Statements are an integral part of this statement NOTES TO FINANCIALSTATEMENTS 4-Vz%

4-V2% series A...

4-V2% series B...

4-V2% series C...

4.32% series D...

4.35% series E..'-.

Other series......

Total

$36,250,000

1. The Company provides book depreciation on a straight-line service-life basis at 3.30%

of average depreciable plant. Depreciation for Federal income tax purposes is ex-pected to approximate $54,000,000 in 1970 (which includes accelerated depreciation on qualified additions. made to depreciable plant subsequent to January 1, 1970) and aggregated approximately $46,774,000 in 1969. The Company has provided for Federal income taxes of future periods pertaining to the excess of accelerated depreciation over straight-line depreciation deductible for tax purposes and to certain emergency facilities which have been previously amortized for tax purposes (book depreciation on these facilities is approximately $1,400,000). Federal Income tax surcharge is expected to approximate

$971,000 for 1970 and was $4,814,000 for 1969.

2. Preferred stock ($100 par value, cumulative) is detailed below:

Shares Authorized Outstanding Amounts 100,000 100,000

$10,000,000 50,000 50,000 5,000,000 50,000 50,000 5,000,000 62,500 62,500 6,250,000 50,000 50,000 5,000,000 50,000, 50,000 5,000,000 137,500 Mone

3. Long-term debt outstanding (less amounts equivalent to current cash sinking fund requirements) is detailed below:

First mortgage bonds:

3-V2% series, due January 1974

$ 36,894,000 8-2/e% series, due July 1975...................,......

70,000,000 3% series, due July 1977.............

10,000,000 3-Ve% series, due June 1978............................

11,000,000 3% series, due June 1979 10,000,000 3V3% series, due November 1981 10,000,000 3-7/s% series, due April1983.................

15,000,000 3-Vs% series, due November 1984................

10,000,000 3-%% series, due April 1986..

15,000,000 4-2/3% series, due December 1986...................

15,000,000 4-%% series, due May1987....

15,000,000 4-Ve% series, due April1988................

20,000,000 5% series, due June 1989..................

25,000,000 4-V2% series, due August 1992 25,000,000 4-%% series, due April 1994............................

35,000,000 4-Vii% series, due March 1995 40,000,000 5% series, due December 1995 40,000,000 6% series, due December 1996 40,000,000 6-3/4% series, due December 1997 60,000,000 7% series, due June 1998 60,000,000 7% series, due December 1998 50,000,000 8% series, due June 1999 50,000,000 3-V4% sinking fund debentures, due July 1972...............

7,625,000 Total.

$670,519,000 During 1970 the Company issued 8-V3% first mortgage bonds due July 1975 in the principal amount of $70,000,000.

Subsequent to December 31, 1970 the Company issued 7-5/3% first mortgage bonds due January 2001 in the principal amount of $80,000,000.

4. Customers'eposits are excluded from current liabilities and shown separately in the accompanying balance sheet in accordance with a procedure approved by the Florida Public Service Commission.

5. The Company has a non-contributory employees'etirement plan covering substan-tiallyall employees. The pension expense,

$9,739,000 for 1970, $6,510,000 for 1969, including amortization of prior service costs, is being funded.

6. Commitments In connection with the Company's construction program were approxi-mately $418,000,000 at December 31, 1970 and $276,000,000 at December 31, 1969.

In connection with'the construction and operation of the Company's Turkey Point power plant facilities an action has been brought against the Company by Federal authorities seeking an injunction against creating alleged present and future eco-logical disturbances by the operation of such facilities. In the event a permanent injunction is granted the Company intends to apply for variances to operate the facilities pending completion of appropriate action necessary to satisfy govern-mental authorities. In addition, a stockholder's derivative action seeks preliminary and permanent injunctions against spending of any more money for or proceeding with construction of that plant as presently planned without the necessary Federal and State permits and

$300,000,000 damages for the Company from officers-directors Smith, Fite and Fullerton. In the opinion of the Company, if Turkey Point units 3 and 4 now under construction are not placed In operation, system power resources will be inadequate.

In addition, an action has been brought against the Company and Florida Power Corporation by the Gainesville Utilities Department and the City of Gainesville, Florida claiming damages under the Sherman Act of $8,893,195. The plaintiffclaims that the companies would not allow them to join an interconnection group without agreeing to an exclusive service territory arrangement.

The prime contractor for Turkey Point Units 3 and 4, Bechtel Corporation.,js claiming $38,400,000 (its original claim was stated to the Company as being approximately $30,000,000) additional compensation because of changes required by the Company and the Atomic Energy Commission as construction of the fycllities progressed and other factors. The amount of the cost due to changes in the contract has not yet been determined but in the opinion of management the additional com-pensation will be substantially less than the claim. Bechtel has put the claim in arbitration.

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For More FACTS & FIGURES...

Write for this booklet-additional information on the Company's bbslness and operations.

Our Stockholders'nformation Service willbe pleased to send you a copy.

HASKINS eL SELLS ccrrrlricD rrrsl,rc AccovNrrNTS SVISO 3001 IOO O IO CAYH C TOW C R MIAMI 33132 To the Board of Directors and Stockholders, Florida Power & Light Company:

We have examined the balance sheet of Florida Power & Light Company as of December 31, 1970 and 1969 and the related statements of income, retained earnings, and source and applica-tion of funds for the two years then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the accompanying balance sheet and statements of income, retained earnings, and source and application of funds present fairly the financial position of the Company at December 31, 1970 and 1969 and the results of its operations and the source and application of its funds for the two years then ended, in con-formity with generally accepted accounting principles applied on a consistent basis HASKINS & SELLS 0

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