ML18143A782
| ML18143A782 | |
| Person / Time | |
|---|---|
| Site: | Ginna  |
| Issue date: | 04/04/1975 |
| From: | Rochester Gas & Electric Corp |
| To: | |
| References | |
| Download: ML18143A782 (62) | |
Text
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'HE ATTACHED FlLES ARE OFFICIAL RECORDS OF THE OFFICE OF REGULATION. THEY HAVE BEEN CHARGED TO YOU FOR A LIMITEDTIME PERIOD ANS MUST BE RETURNED TO THE CENTRAL RECORDS STATION 008. ANYPAGE(S)
REMOVED FOR REPRODUCTION MUST BE RETURNED TO ITS/THEIR ORIGINALORDER.
DEADLINERETURN DATE fo-gy MARY JINKS, CIIIEF CENTRAL RECORDS STATION
RG&E Service Area/Business 4 -pQ The Company supplies electric, gas and steam service whollywithin the state of New York. It is engaged in the production, purchase, transmission, distribution and sale of these services in an area serving nine counties centering about the cityof Rochester.
The Company's territory, which has a population of approximately 890,000 is well diversified among residential, commercial and industrial consumers.
In addition to the city of Rochester, which is the third largest city and a major industrial center in the state, it includes a large and prosperous farming area.
Major RG&E Electric Lines Major RG&E Gas Lines co N.Y.S. Power Authority Electric Line Beebee Electric Generating Station Russell Electric Generating Station Ginna Nuclear Power Station Major Electric Substations 0
Natural Gas Supply Stations 0
Sterling Plant Site L
qq ONTARIO OSWEGO NIAGARA BuIIalo ORLEANS GENESEE jIOCIIOOIOr I
I1 MONROE l ONTAIjlo Canandaigk)a WAYNE
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CAYUGA ONONDAGA I
ERIE WYOMING LIVINGSTON YATES SENECA TOMPKINS ALLEGAMY SCHUYLER CHAUTAUQUA CATTARAUGUS STEUBEN CHEMUNG TIOGA Cover We Care.
RG&E employees are good friends and neighbors. You'l find them in many diverse community activities. And they don't hesitate to get involved when called Upon.
Our cover shows lineman, Lawrence Klein, giving "double service" on November 8, 1974.
While working in the area, he came to the aid of a misplaced kitten and its distraught owners. He was a hero to the familyand a troubleshooter for the Company, averting a potentiaI electrical hazard.
BUSlNESS REPLY CARD No postage stamp necessary ifmailed in the United States Postage willbe paid by Rochester Gas and Electric Corporation 89 East Avenue Rochester, New York 14604 Attr Dean W. Caple, Secretary and Treasurer FIRST CLASS Permit No. 322 Rochester, N.Y.
Dear Shareholder r,
We are required to send a copy of the Annual Report to each shareholder.
However, ifyou receive more than one copy in your household and have no need for the extra copies, you willhelp us economize by completing this card and returning it to us.
Your instructions willeliminate duplicate mailings of only the Annual Report and willnot affect dividend checks or other communications.
Thank you.
Sincerely, DEAN W CAPLE. Secrerary and Treasurer Please discontinue sending a copy of the Annual Report to the account listed below since a duplicate copy now comes to this address.
NAME(please prinQ STREET ADDRESS CITY STATE ZIP CODE ACCOUNT No. (appears with your address on back cover)
SIGNATURE OF SHAREHOLDERIS)
Please do not return this form ifyou are presently receiving only one copy in your household.
BUSINESS REPLY CARD No postage stamp necessary iimailed in the United States Postage willbe paid by Rochester Gas and Electric Corporation 89 East Avenue Rochester, New York 14604 FIRST CLASS Permit No. 322 Rochester, N.Y.
STREET ADDRESS CtTY STATE ZIP CODE ACCOUNT NO. fappears with your address on back cover)
Dear Shareholder We are required to send a copy of the Annual Report to each shareholder.
However, ifyou receive more than one copy in your household and have no need for the extra copies, you willhelp us economize by completing this card and returning it to us.
Your instructions willeliminate duplicate mailings of only the Annual Report and willnot affect dividend checks or other communications.
Thank you.
Sincerely, DEAN W. CAt'lE, Secretary and Treasurer Please discontinue sending a copy of the Annual Report to the account listed below since a duplicate copy now comes to this address.
NAME (please print)
Att: Dean W. Caple, Secretary and Treasurer SIGNATURE OF SHAREHOLDER(s)
Please do not return this form ifyou are presently receiving only one copy in your household.
I
Annual Report for year ended December 31, 1974 Contents Highlights 2 Letter to Shareholders 3
Electric Operations 6
Gas Operations 8
Research and Development 8
Management Changes 9
Forecast 10 Management's Discussion and Analysis of the Statement of Income 11 Financial Statements/Operating Statistics 13 Directors/Officers 24 Principal Office 89 East Avenue Rochester, New York 14649 (71 6) 546-2700 Financial Contact Paul W. Briggs President Annual Meeting Third Wednesday in May At Rochester, New York Bond Trustee and Paying Agent Bankers Trust Company One Battery Park Plaza New York, New York 10004 New York Stock Exchange Symbol Rochester Gas and Electric Corporation Common Stock-RGS Transfer Agent Lincoln First Bank of Rochester One Lincoln First Square Rochester, New York 14643 Registrar Security Trust Company of Rochester One East Avenue Rochester, New York1463B Co-transfer Agent Morgan Guaranty Trust Company of New York 23 Wall Street New York, New York 10015 Co-registrar The Chase Manhattan Bank (National Association) 1 Chase Manhattan Plaza New York, New York10015 Shareholder Inquiries Communications regarding stock trans-fer requirements or lost certificates may be directed to one of the Company's stock transfer agents.
Other inquiries should be directed to D. W. Caple, Secretary and Treasurer at the Company.
The Company willprovide, without charge, a copy of the Annual Report on Form 10-K filed with Ihe Securities and Exchange Commission with respect to fiscal year1974, upon the written request of any shareholder addressed to the Secretary.
Highlights Common Stock Earnings per weighted average share Number of shares (000's)
Weighted average Pro forma weighted average after stock divide (See Note)
Actual number at December 31.
Price range (Sales on New YorkStock Exchange) 1st quarter 2nd quarter.
3rd quarter 4th quarter Cash dividends paid (100% taxable) 1st quarter 2nd quarter.
3rd quarter 4th quarter Stock dividend paid (See Note)
Sales and Revenue Electricity to customers Kilowatt-hours (000's)
Revenue (000's)
Electricity to other utilities Kilowatt-hours (000's).
Revenue (000's)
Gas Therms (000's)
Revenue (000's)
Steam Pounds (000's)
Revenue (000's)
Operating Expense (000's)
Electric and steam fuels.
Purchased electricity Purchased natural gas for resale Wages and benefits Other expense Taxes (000's)
Local, state, other Federal income tax charged to operations.
Capital Expenditures (000's)
Utilityplant Nuclear fuel Net UtilityPlant at December 31 (000's).
nd paid in followingyear Total Revenue Total Operating Expense l974
$1.80 9,443 9,726 9,469 High Low 20'/~
17s/s 17'/z 12s/e 14s/s 11 13 10
$.31
.31
.31
.31 3%
4,408,163
$127,560 1,182,902
$14,697 453,687
$75,463 3,622,422
$ 16,321
$234,041
$ 36,693 12,070 36,504 40,692 22,468
$148,427
$ 32,410 1,151
$ 52,332 10,582
$530,987 1973
$2.39 8,666 8,926 9,1 56 High Low 24'/e 20>/s 22 20'/2 22'h 19'/4 21>/4 17'/s
$.30
.30
.31
.31 3%
4,539,955
$116,512 2,269,686
$21,112 434,833
$64,633 3,724,034
$ 10,0'l4
$212,271
$ 25,612 8,841 29,314 37,687 19,809
$121,263
$ 29,993 7,639
$ 34,628 6,737
$492,833
% Change (25)
(3) 9 (48)
(30) 4 17 (3) 63 10 43 37 25 8
13 22 8
(85) 51 57 Note: The 1Gth annual stock dividend was paid February 24, 'l975 at the rate ol three percent.
To Shareholders Considering the problems that confronted us, 1974 common stock earnings of $1.80 per share were somewhat better than we thought possible. Earnings declined 59 cents and were 25 percent less than the $2.39 per share earned in 1973. Of course, itwas impossible to have foreseen the Ginna nuclear plant being out ofoperation forfour months as a result of a turbine blade failure, the severe impact of con-tinued energy conservation by our customers and the degree ofdecline in the national economy. In addition, earnings per share were reduced because ofthe sale of 9S0,000 n'w shares of common stock in October1973.
The Ginna plant was removed from service on January1, 1974 when a blade failed in one of the low-pressure stages of the steam turbine. We combined this forced shutdown with the annual refueling of the nuclear reactor and did other routine maintenance. The plant was back in service on April25 after114 days and since then has been giving excel-lent performance. During the past nine months, its availa-bilityhas been an impressive 92 percent, comparable to or better than most fossil-fueled plants. It is currently operating at a capacity of475,000 kilowatts, reducing the amount of high cost fossil fuel required and also permitting sales of surplus energy from our electric system to other utilities.
The severity of the factors causing decreased earnings in 1974 was ameliorated by cost reduction measures that continue in 1975. Employees have given excellent coopera-tion by increasing their productivity and sharing additional job responsibilities, enabling us to limitincreasing expense.
Revenue for1974 totaled $234 million,$22 millionmore than for 1973. Conservation of energy is estimated to have reduced 1974 revenue by $14 million. Electricitysold to our customers was three percent below1973, the first time in 29 years that these sales failed to show a gain over the prior year. Gas and steam revenue increased $5.4 milliondue to weather in 1974 that was 15.7 percent colder than 1973.
The increase in 1974 revenue from higher rates was $6.8 millionand fuel cost adjustments were $20 millionmore than in 1973. The sales of electricity to other utilities in 1974 was $6.4 million less than in 1973 because of the prolonged shutdown of the Ginna nuclear plant.
Expense of operation and maintenance was 22 percent more than in 1973, an increase of $27 million.The costs of electric and steam fuels and of purchased electricity increased
$14 million. Purchased gas cost was $7 millionmore than last year. Electric and steam fuel costs and purchased electricity cost increases reflect both the higher prices for fossil fuels and the greater use of fossil-fired generation during the four-month shutdown of the Ginna nuclear station. Itvividly illustrates the advantages of the lowcost nuclear fuel gener-ation which was available throughout all of1973. The increased cost of purchased gas was due primarilyto price escalation coupled with a small increase in the volume sold.
Expense and other charges against income are explained in Management's Discussion and Analysis of the Statement of Income in this annual report.
Capital expenditures during1974 totaled $63 million,
$52 millionfor utilityplant and $11 millionfor nuclear fuel.
As part of the intensive effort to improve earnings by cutting costs, the original forecast of 1974 utilityplant expen-ditures was reduced. We deferred projects not absolutely essential and which would not significantly jeopardize continuity ofservice to our customers. In addition to the usual construction expenditures, negotiations with Westinghouse resolved mutual liabilities related to construc-tion, operation and turbine blade failure at the Ginna nuclear plant. We also continued with licensing proceedings and made environmental expenditures in connection with both a proposed 600-megawatt coal-fired plant and a future 1,150-megawatt Standardized Nuclear Unit Power Plant System (SNUPPS) at our Sterling, New York site.
Planning, licensing and financing facilities to supply adequate energy to our customers continue to be our primary concerns.
The forecast of capital expenditures in1975 includes nearly
$22 millionfor a 600-megawatt coal-fired plant at the Company's Sterling, New York site on Lake Ontario, about Francis E. Drake, jr.
Paul W. Briggs
60 miles east of Rochester. However, in late january 1975, itwas determined that based on current load growth projec-tions, the 600-megawatt fossil unit could be deferred.
Plans for the coal-fired plant willstill remain in a state of readiness, in order to give the Company a measure of flexibility.The Company willseek to advance the licensing proceedings forapproval of the fossil unit to enable its early construction when necessary.
Factors leading to this determination included a downward revision in forecast electric growth for the Company and forother New York utilities, which resulted in a lack ofsupport for the project by other utilities. We willconcentrate, instead, on an already proposed nuclear unit, in cooperation with two other utilities, Orange and Rockland Utilities, Inc. and Central Hudson Electric & Gas Corporation.
RG&E has been a leading proponent ofthe SNUPPS concept of power plant construction. Our experience in licensing and constructing the Ginna nuclear plant convinced us that significant savings in time and money might be realized by adopting a standardized approach to the licensing, de-sign, fabrication, and erection of nuclear power plants.
Together with four midwestern utilities, we have signed a letter of intent to purchase a total offiveSNUPPS nuclear units for installation in the early1980's. We have signed a memorandum of understanding with Central Hudson and Orange and Rockland to build an 1,150-megawatt SNUPPS unit at Sterling under a pro posed Tenants in Common arrangement. Under this proposed arrangement, each of the three participants willshare one-third of the cost of construction and operation and willbe entitled to one-third of the plant's ultimate output. The continuing costs of the SNUPPS project are being shared by all three participants.
We are now proceeding with a final contract and the preliminary design, engineering and siting of the unit.
Concurrent with the SNUPPS project, studies are under way by the seven investor-owned electric utilities serving New YorkState to determine the feasibility ofcreating a subsidiary company to be known as Empire State Power Resources Inc. (ESPRI). ESPRI's long-range plan is to construct certain large generating plants foroperation in the 1980's, to assure the people of New YorkState the contin-uation ofan adequate supply of power at the most economic cost possible. The seven utilities have filed a petition with the Public Service Commission of the State of New York for authorization to purchase $2.0 millionof capital stock in ESPRI as "seed" money to pay for taking the concept before the various regulatory jurisdictions for review and opinion.
Ifthe ESPRI concept is approved, the substantial burden offinancing future generating capacity on an individual basis willbe relieved, and the seven companies willshare financial risks inherent in the ownership of'the increasingly large, complex, and expensive generating units required to achieve optimal economies of scale. Such savings would be reflected in the cost of power to the consumer and may be especially significant ifthe financing of ESPRI proceeds on the basis of 80 percent debt securities and 20 percent equity, as proposed by the companies. Rochester Gas and Electric's participation in the purchase of initialshares in ESPRI is estimated to be10 percent. Our participation in ESP RI would not alter our status as an independent com-pany and we would continue to be responsible for our own customers'equirements.
We anticipate that determination of the future of ESPRI by the various regulatory agencies involved willentail a year or more of proceedings.
Through careful planning and load growth research, the Company's fuel supplies continue to be adequate, assuring our customers of reliable energy service. Nuclear fuel contracts with Energy Research Development Association Electric Kilowatt-hour Sales to Customers (mill(ons]
1974 1973 1972 1971 1970
, 1969 1968 1967 1966 1965 4408 4540 4292 3982 3802 3578 3280 2993 2739 2474 0 Residential Q Commercial 0 Industrial nOI er Gas Therm Sales to Customers (mll((onsl 1974 1973 C3 1972 1971 1970 1969 1968 1967 1966 1965 317 301 349 454 435 469 442 425 403 374 0 Residential Q Residential Spaceheating D Commercial 0 Industrial 0 Municipal
(formerly the Atomic Energy Commission) provide for enrichment of uranium feed material for the Ginna plant and the SNUPPS unit for a period of 30 years. Another contract with Nuclear Fuel Services, Inc. expiring in 1981, provides for reprocessing ofspent nuclear fuel. We also have contracts for sufficient uranium feed material to provide for the annual refueling of the Ginna reactor scheduled for the springs of1975 and1976. We are continuing negotiations to procure uranium feed material for future years.
During 1974 we burned 787,000 tons of coal and we had an 86-day supply of coal on hand at the end of the year. We normally maintain a 90-day coal supply. Arrangements with four large coal suppliers willprovide forabout 700,000 tons of coal per year through 1976.
To comply with environmental regulations, eight boilers at two electric and steam generating plants were converted from coal to oil in prior years. Oil contracts during 1975 pro-vide for the purchase of44 milliongallons of fuel oil, an amount anticipated to meet the Company's requirements through the year.
The Company purchases natural gas for resale to its customers from Consolidated Gas Supply Corporation under a long-term contract. We were notified by our supplier in November1974 of a curtailment that was effective February1, 1975. The curtailment willresult in deliveries which are one percent less than the supply necessary to meet our fullgas requirements for the period ending January 31, 1976. The Company has effected this curtailment by restrict-ing gas service to customers capable of burning other fuels.
The curtailment notice was followed by an order of the Public Service Commission of the State of New Yorkeffective January1, 1975 which prohibits new or additional use of gas by any type of customer.
We have seen an improvement in realistic regulation in recent months although we still must contend with the problem of regulatory lag which proves excessively oppres-sive in a time of rapid inflation. We were pleased to receive the fullamounts requested from electric and gas rate increases approved in October 1974. However, the rate proceedings took eleven months from initialfilingto conclu-sion. The Public Service Commission of the State of New York has taken various steps to ease the impact of lag by allowing attrition factors, using forecast test periods and permitting end-of-period rate base.
The cost ofproducing energy is rising in all areas. In addition to seeing rapid price escalation for purchased goods and services, we find ourselves bearing the heavy financial bur-den ofgenerating plant and transmission line siting and licensing, environmental requirements, and numerous other nonrevenue-producing costs. In the lightof these factors, we expect to file, in the second quarter of1975, additional rate increase requests for both electric and gas service, in order to attain a return on equity attractive to investors.
A regulatory decision is pending on a November1974 steam rate application to increase annual revenue $2.5 million.
In August, we sold $30 millionof first mortgage bonds bearing an interest rate of10a/4 percent. The proceeds of these bonds were used to redeem $30 millionof short-term bank loans previously incurred to pay for construction costs.
An Automatic Dividend Reinvestment Plan was offered to shareholders on October 25, 1974, with an optional cash supplement feature, to purchase unissued shares of common stock. We are well pleased with the response.
Over 11 percent of the shareholders who own six percent of the shares are participating in the Plan. The optional cash supplemental payment of up to $1,000 per quarter has also been successful. These optional cash payments amounted to $214,000 and along with the $181,000 of reinvested dividends resulted in the issuance of 33,299 new shares of common stock during 1974.
Monroe County is the major business area served by RGKE.
During 1974 this area continued to maintain the most favorable economic conditions in the State and among the most favorable in the Nation. Total employment rose rather steadily, culminating in an all-time high in October and the year averaged 8,700 jobs more than in 1973. The unemployment rate for 1974 averaged only 3.2 percent, ranging from a low of 2.6 percent in October to a high of 3.7 percent in December. During the last five months of 1974, unemployment in Rochester and Monroe County was the lowest in New YorkState.
We believe that the Company's earnings should improve during 1975. The demand for electricity is expected to increase during the year, as natural gas and oil supplies become scarcer and more expensive to burn. In addition, there willbe a shift from other forms of energy to electricity to power the environmental clean-up programs that have been decreed.
We appreciate the confidence of investors in the Company and every effortwillbe made to justifythe trust you have placed in us.
Sincerely,
@~~~6'P Francis E. Drake, Jr.
Chairman of the Board and Chief Executive Officer Paul W. Briggs President February 14, 1975
Electric Operations Among the Company's greatest concerns is the need to provide quality electric service to our customers.
The reliabilityofservice to electric customers averaged 99.981 percent during 1974. This is consistent with previous years'xperience even though itwas necessary to make some expense curtailments during the latter part of1974.
The long-standing preventive maintenance programs ofthe electric, gas and steam systems have not been mini-mized. Normal inspections, maintenance programs, and overhauls are being adhered to in order to insure continua-tion of the high level of reliabilityand availabilityour customers receive.
Amajor new substation, capable of providing an additional 200,000 kilowatts of power interchange capacity, was completed and energized in August of 1974 providing a second interconnection with the cross-state 345,000-volt transmission system. This interconnection has capability for expansion to 400,000-kilowatt capacity in the future. Con-struction of a new115,000-volt line in Webster was finished and operative in September of 1974. The extra service was necessary to meet the increased electrical requirements of Xerox Corporation and nearby residential and commercial growth. A major110,000-volt substation to serve downtown Rochester is under construction with an expected comple-tion date of mid-summer 1975. Its unique technology employs space-saving, high-voltage, gas-insulated bus con-ductors to make the greatest use ofthe small property area.
RG8 E has purchased a dual computer system to handle various electric system data, communication and control functions. When installation in the System Control Center is complete in September, the master consoles willbe able to independently monitor and control up to 32 substations.
A"Storm Emergency" trouble call reporting system, utilizing computer technology, has been developed by the Company to pinpoint trouble areas and speed electric line repair operations during storm conditions. Emergency calls are now automatically batched and sorted by geographic area and block number before they are sent to the Line Operations'torm center for dispatching to crews in the field. The new system speeds identification of the problem and mini-mizes call backs.
"Shadow Project" exposes juniors and seniors in high school, not generally bound for college, to an actual work situation. Lineman First Class, Dick Cantwell, demon-strates safety methods employed when connecting a customer to our service. Dave Sessler, Electric 7ransmission and Distribution Engi-neering, runs the jaycee-sponsored project and is observing below.
Heis assisted by Monica Ciles from Cas Distribution.
Q Total Capability 0 Total Capability Forecast
-- Required Capability (load plus required reserve)
Q Peak loads RC&E System Capability and Electric Loads Thousands of Kilowatts 2000 Sterling Nuclear Plant Gas Turbine Plus Purchased Power Gas Turbine Plus Purchased Power urc ase ower Cilboa Purchases Cinna Nuclear P 1968 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84
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Gas Operations Research and Development A major 24-inch main linkingour two natural gas supply points was completed during the year. This feeder system permits maximum flexibilitybetween our purchase points under normal and emergency conditions.
In April1973 the Company and 13 other utilities in New York State formed the New YorkState Gas Croup to study and seek solutions to the State's natural gas supply shortage. The Croup willdetermine the present supply resources of New York State and examine the prospects for the coopera-tive development of underground storage fields, joint purchase and storage of imported liquefied natural gas, and pipeline interconnections to reinforce reliability.
The Gas Group aggressively sup'ports off-shore drilling as well as large-scale production ofsynthetic natural gas from naphtha and from coal.
We have contracted to take significant quantities of liquefied natural gas, scheduled to be delivered to our supplier from Algeria in early1977. This volume willbe approximately 14 percent ofour present annual requirements and may make it possible to resume additional gas sales.
RGRE invested over $1 millionin more than 20 research projects during 1974.
Research and development programs now being conducted by New York utilities may advance the day when solar energy, nuclear fusion and other new technologies willhelp satisfy man's energy requirements. Investigations are being conducted under the direction of the Empire State Electric Energy Research Corporation (ESEERCO), a nonprofit corpo-ration. ESEERCO, created in1973, replaces a more limited research and development corporation formed by the State' power producers to study nuclear technology. As of December 1974 ESEERCO had committed over $6.7 million for 32 projects. Its basic function is to find improved and more economical ways of producing and delivering electric energy while preserving environmental quality. Nearly every research program involves environmental considera-tions. Allof the research has potential for use in New York State and is coordinated with national research projects to prevent wasteful duplication of efforts and funds.
I.
I RC&E's Home Service lacilities pro-vide the training ground forgroups of all ages and incomes, enabling them to beuer understand meal preparation, basic nutrition, and the correct use of appliances.
Each year the Rochester Chamber of Commerce hosts a "get-acquainted" night lornew citizens. Verna Parmelee, Home Service Depart-ment Manager, explains the many services offered by RC&E to a new American family.
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Management Changes
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dL Paul W. Briggs was elected President of the Company by the Board of Directors effective October1, 1974. He succeeded Edward J. Nelson, Presidentsince July1970, who retired after more than 47 years of outstanding service. Atthe same time, the Board elected Keith W. Amish to the position of Executive Vice President.
Mr. Briggs joined RG8iE in 1945 and has held various positions of responsibility in the accounting, financial and general services areas. He previously was Senior Vice President, Finance and General Services, and willcontinue to have these executive responsibilities.
Mr.Amish was Senior Vice President, Electric and Steam, and has a background of 28 years of operating and engineering experience in the Company's electric and steam depart-ments. His responsibilities include the operations and plan-ning of the Company's utilityplant and energy systems.
Mr. Briggs and Mr. Amish were also elected to the Board of Directors to fillvacancies caused by the resignations of Alexander M. Beebee and R. Dewitt Pike.
The Board also elected Harry G. Saddock to the position ofVice President Electric System Planning and Operation, and Leon D. White,)r. to the position ofVice President-Electric and Steam Production. Both men have had many years of engineering experience with the Company and are former superintendents in their respective areas.
Ed Centhner, Electric Substations, has been involved for many years in wheelchair athletics. Many of these fine young athletes have successfully competed in the International Wheelchair Olympics.
Kefth W. Amish
Forecast 1975 Earnings for1975 are expected to improve over those for 1974 as a result of several factors. We willbenefit from the fullimpact of the October 1974 increases in electric and gas rates, plus a portion of the pending increase in steam service rates. There should be a return of growth in electric load, although possibly at a somewhat lower rate than in the past. It is estimated that kilowatt-hour sales ofelectricity to customers should increase five percent over 1974.
Greater sales of electricity to other utilities should result from a longer operating period of the Ginna nuclear plant in 1975 than during1974. A nominal growth in gas sales is anticipated from a fullyear's sales to customers added in 1974, plus the limited number of new residential gas cus-tomers permitted prior to the effective date of the new restrictions.
Economy measures taken in1974, applicable to all items of expense, willcontinue through 1975. Our forecast assumes Ginna nuclear station willoperate during the year at a generation level of475 megawatts. An eight-week shutdown for refueling and maintenance is scheduled to begin in mid-March. We expect to develop substantial savings in gas expense by conversion of the remaining 18,000 mixed gas customers to natural gas. Approximately one-half of the conversions willbe accomplished in 1975 and the remainder in 1976.
The major expense increase, estimated to be $21 million,is in the costs of electric and steam fuels and purchased gas, primarilythe result of price increases. Under present regula-tions, price increases are recovered through fuel clause adjustments in all customer categories. Expense willalso be affected by a $5 millionincrease in payroll costs, primarily the result of an 8.2 percent wage adjustment effective February1,1975, and by a $2 millionprice escalation for materials and services.
Capital expenditures in 1975 are forecast to total $78 million.
They consist of $73 millionfor utilityplant and $5 million for nuclear fuel. The largest item of utilityplant in the fore-cast is $22 millionfor the initial phases of a 600-megawatt coal-fired plant at the Company's Sterling, New York site. While the construction of this generating plant has been deferred, plans willremain in a state of readiness in order to give the Company a measure offlexibility.
Approximately $38 millionof 1975 utilityplant expenditures willbe revenue-producing or essential to assure continued operation and reliability, primarilyon the electric system facilities. Other than certain nuclear costs, we must spend
$2 millionto remain in compliance with State and Federal environmental laws. Also, we must incur costs of $3.5 million to move facilities out of the way of urban renewal projects and highway construction.
Nuclear fuel expenditures during 1975 willbe forenrich-ment and fabrication of the fuel to be used at Ginna nuclear electric generating plant in 1976.
We expect that 40 percent of the proposed capital expendi-tures willbe financed with internally generated funds.
Interest coverages should improve and we contemplate issuance of $40 millionof bonds in late summer or early fall.
We willuse the bond proceeds to pay then outstanding short-term loans. New notes outstanding at the end of 1975 may approximate $22 millionifwe expend the total
$78 millionof the capital forecast.
Rate Increases Granted Annual amount-test year basis (000's)..
Percent increase..
Effective date Rate of return on rate base authorized..
Rate of return on equity authorized....
Revenue fffect (000's)
Amount received in year granted.....
Amount received in subsequent year..
Pending Requests Amount (000's)
Percent increase Date filed 10
Management's Discussion and Analysis of the Statement of Income The followingfinancial review discusses major changes that affected differences in Net Income, between1973/1972 and between 1974/1973, as reported in the Statement of Income and Retained Earnings on page 14 of this report. The Notes to Financial Statements on page 17 of this report contain additional information that relates to this discussion.
Revenue Electric revenue increased
$20.8 millionin 1973 and
$4.6 millionin 1974.
Changes in Electric Revenue Increase or (Decrease) from Prior Year 1974 1973 Customer Revenue from:
fihousands of Dollars)
Rate increases
$ 5,089
$ 9,088 Fuel cost adjustment................
7,221 409 Sales (1,208) 4,427 Other (54)
(121)
Total Change in Customer Revenue.....
11,048 13,803 ElectricSalestoOtherUtilities..........
(6,415) 7,049 Total Change in Electric Revenue.......$
4,633
$20,852 Total revenue from electric customers increased $13.8 mil-lion in 1973 and $11 millionin 1974. In October 1974, the Company received approval to increase electric rates
$17.9 millionannually, ofwhich $9.5 millionwas granted in July1974 on a temporary basis. Electric rate increases that affected 1973 and 1972 revenue resulted from rates that became effective on a temporary basis September 5, 1972 and fullyeffective October 25, 1972.
Electric kilowatt-hour sales to our customers increased 5.8 percent in 1973 but decreased 2.9 percent in 1974.
Customers reduced their use ofelectricity beginning in November1973 in response to the energy crisis. As a result, the Company experienced a $4.4 millionsales increase in 1973 against a $1.2 milliondecline in 1974.
Revenue from electric sales to other utilities increased
$7.0 millionin 1973 and decreased
$6.4 millionin 1974.
Surplus system generation was not available forsale in 1974 during the114-day shutdown ofthe Cinna nuclear station.
Nuclear generating capacity was available throughout1973.
Electric 1974 1973 1972 1971 1970 Cas 1974 1973 1972 1971 1970 Steam 1974 1973 1972 1971 1970
$17,992 16.0 10/23 8.83 13.19
$10,154
$5,900 11.5 7.48 10/25 3/25 7.96 7.72 12.0 12.0
$4,854 7.6 10/23 8.42 12.09
$3,676 6.8 4/28 7.77 12.0
$500
$897 5.1 11.4 11/12 5/11 7.25 6.48
$1,157 21.0 11/20 4.32
! $ 5,089
$ 2,079
$4,702
$9,088 1,998
$ 5,089
$9,088
$ 4,077
$4,702
$1,279
$1,815
$2,090
$1,279
$2,090
$1,815
$ 51
$392 98 387 478
$1,007 387
$529
$392
$1,007 98
$2,475 12.0 11/15 11
Gas revenue decreased
$1.2 million in 1973 and increased
'$10.8 millionin 1974.
Changes in Gas Revenue Customer Revenue from:
Rate increases Gas cost adjustment......
Weather effects Sales Other Total Change in Gas Revenue Increase or (Dccrcasc) from Prior Year 1974 1973 (Thousands of Dollars)
$ 1,279
$ 2,090 6,730 672 4,863 (4,992)
(2,142) 1,161 100 (163)
....... $10,830
$ (1,232)
Customer Revenue from:
Rate increases Fuel cost adjustment........
Weather effects.
Sales....................
Other.
Total Change in Steam Revenue Incrcasc or (Dccrcasc) from Prior Year 1974 1973 (Ihousands of Dollars) 387 529 6,095 910 559 (528)
(733)
(96)
(1)
....... $6,307 815 Steam revenue in 1972 and 1973 was affected by a steam rate increase that became effective May11,1972. A second steam rate increase became effective November11,1973.
In November1974 the Company requested an additional 12 percent increase in steam rates designed to raise annual revenue $2.5 million.A regulatory decision is pending.
The Company received approval to increase gas rates in October I974. These new rates willincrease gas revenue
$4.9 millionannually, which includes $2.5 milliongranted in July1974 on a temporary basis. Gas rate increases that affected 1973 and 1972 revenue resulted from rates that became effective April28, 1972.
Revenue changes from weather effects, on a degree day basis, resulted from 14.6 percent warmer weather in 1973 than in 1972, and15.7 percent colder weather in 1974 than in 1973. The 1974 decrease in sales of $2.1 million reflects reduced customer use in response to the energy crisis.
Steam revenue increased $.8 millionin 1973 and $6.3 million in 1974.
Changes in Steam Rcvcrsuc Expense Total operation and maintenance expense increases in 1973 and 1974 were affected by several major factors. Ginna nuclear plant electric generation, which has a much lower cost than generation at fossil-fueled plants, was available during all of 1973 but less than eight months of 1974. The cost of labor, fuels and other materials escalated far more rapidly during 1974 than in 1973.
Changes in Opera(ion'and Maintenance Expense Incrcasc or (Dccrcasc) from Prior Year 1974 1973 (Thousands of Dollars)
..... $11,081
$ 3,633 3,229 792 7,190 (937) 3,586 2,619 2,078 1,016 Electric and steam fuels..........
Purchased electricity............
Purchased natural gas for resale....
Other operation Maintenance Total Change in Operation and Maintenance Expense........
.. $27,164
$ 7,123 The costs of electric and steam fuels were materially affected by price escalation in both periods. Sources of electric generation also influenced fuel costs due to the different amounts ofgeneration available from our nuclear plant.
Pcrccnt Elec(rici(y Gcncratcd and Purchased Sources of Energy:
Steam Nuclear Hydro and other........
Total Generated-Net..
Purchased Total Electric Energy...
1974 32.3
.... 343 31 69.7 30.3
.... 100.0 1973 1972 26.0 31.1 47.2 36.9 3.1 4.8 76.3 72.8 23 7 272 100.0 100.0 An accounting change affects the comparison of electric and steam fuel costs for1973 and 1974. The Company's tariffs for electric and steam services include a fuel cost adjustment clause under which electric and steam rates are adjusted to 12
Changes in Federal income Tax Increase or (Decrease) in Tax from Prior Year 1974 1973 frhousands of Dollars) e.......... $(5,101)
$4,437 Changes in tax resulting from difference in pretax incom Changes in tax resulting from difference in items deductible for tax purposes but not expensed on the books for which tax benefit is recognized currently...............
(1,868)
Other 107 Total Changes in Federal Income Tax....$ (6,862) 992 (540)
$4,889 See Note 3 to the financial statements for a detailed analysis.
Other Statement of Income Items The allowance for funds used during construction increase of $1.3 millionin 1974 resulted from both the effect of higher costs of capital and the amount of utilityplant expenditures.
In 1973 we applied rates of 7.5 percent foreight months when the rate was increased to 8.0 percent. We used the 8.0 percent rate through May1974 and then increased itto 10 percent for the balance of the year. Itshould be noted that in 1970 this allowance for funds used during construction was abnormally high due to the accumulation of construc-tion expenditures for the Ginna nuclear plant placed in service during that year.
The $1 millionincrease in the 1974 interest on notes payable resulted from higher interest rates and an increase of
$6 millionin the average amount ofshort-term notes out-standing during 1974 compared with 1973.
reflect changes in the average cost of fuels. There is a lag of two months from the time the average cost of fuel is deter-mined to the application of the fuel cost adjustment rates to customers'ills. In 1974, the Company began to defer a portion of the increased costs to the month in which the resultant revenues were recorded in order to achieve a better matching of fuel expense and fuel cost adjustment revenues.
As a result of this accounting change, fuel costs included in operating expenses reported for1974 were decreased by
$3.7 millionand net income for the year, after appropriate tax accruals, was increased by $1.9 million (20( per share).
Authorization for the change was received from the Public Service Commission of the State of New Yorkduring 1974.
The increase in cost of purchased natural gas for resale in 1974 was primarilycaused by price escalation. The reduction in cost of gas purchased in 1973 resulted from reduced volume in 1973 caused by warmer weather than in 1972.
Federal income tax increased
$4.9 millionin 1973 and decreased
$6.9 million in 1974.
Financial Statements Income and Retained Earnings 14 Balance Sheet 15 Changes in Financial Position 16 Report of Independent Accountants 17 Notes to Financial Statements 17 Operating Statistics Electric Department 21 Gas Department 22 Steam Department 23 13
)K~K ROCHESTER GAS AND ElECTRIC CORPORATION Statement Of InCOme and Retained EarningS (Thousands)
Revenue (Notes 1 and 2)
Electric Cas Steam Electric sales to other utilities.
Year Ended December 31 1974
$127,560 75,463 16,321 219,344 14,697 1973
$116,512 64,633 10,014 191,159 21,112 1972
$102,709 65,865 9,199 177 773 14,063 1971
$ 93,171 58,062 7,754 158,987 16,892 234,041 212,271 191,836 175,879 1970
$ 82,559 54,005 5,885 142,449 10,517 152,966 Expense (Notes 1 and 2)
Electric and steam fuels Purchased electricity Purchased natural gas for resale.
Other operation Maintenance Total operation and maintenance expense Depreciation and amortization.
Taxes-local, state and other.
Federal income tax (Note 3)
Operating Income Other Income and Deductions Allowance for funds used during construction..
Other Income before Interest Charges.
36,693 12,070 36,504 45,194 17,966 148,427 16,491 32,410 1,151 198,479 35,562 1,741 670 2,411 37,973 25,612 8,841 29,314 41,608 15,888 121,263 15,145 29,993 7,639 174,040 38,231 447 715 1,162 39,393 21,979 8,049 30,251 38,989 14,872 114,140 14,565 27,885 1,660 158,250 33,586 456 203 659 34,245 21,926 7,017 25,954 35,294 14,043 104,234 14,106 24,024 1,256 143,620 32,259 379 277 656 32,915 17,401 7,209 22,839 32,775 11,259 91,483 12,506 19,461 (106) 123,344 29,622 2,867 32 2,899 32,521 Interest Charges Interest on long term debt.
Interest on notes payable Other Income before giving effect to a change in recording month-end revenue and expense Effect on calendar year 1972 of recording four additional days of revenue and expense (Note 2).
14,965 2,255 210 17,430 20,543 13,738 1,246 103 15,087 24,306 13,738 1,160 102 13,738 1,031 137 19,245 18,009 706 15,000 14,906 11,990 1,483 43 13,516 19,005 Net Income Dividends on Preferred Stock, at required annual rates...
Earnings Applicable to Common Stock Dividends on Common Stock Cash Stock dividends capitalized 20,543 3,550 16,993 11,614 4,944 24,306 3,550 20,756 9,922 5,719 19,951 3,550 16,401 8,751 5,205 18,009 3,550 14,459 8,267 5,458 19,005 3,550 15,455 8,027 5,299 Retained Earnings Beginning of year.
Adjustment to record subsidiary at equity (Note 1)..
Balance at beginning of period as adjusted.
End of year.
52,184 949 47,069 53,133 47,069 44,624 44,624 43,890 41,761 43,890 41,761
$ 53,568
$ 52,184
$ 47,069
$ 44,624
$ 43,890 Weighted average number of shares outstanding in each period...
Earnings per share of common stock based on weighted average number of shares outstanding in each period, adjusted for stock dividends: (Note 1)
Income before giving effect to a change in recording month-end revenue and expense Effect on calendar year 1972 of recording four additional days of revenue and expense (Note 2)
Net earnings per share Cash Dividends per Share (Note 1) 9,443 1.80 1.80 1.23 8,666 2.39 2.39 1.18 7,905 1.98
.09 2.07 1.12 7,583 1.90 1.90 1.09 7,583 2.03 2.03 1.06 14
ROCHESTER CAS AND ELECTRIC CORPORATION BatanCe Sheet tThousanCk)
ASSETS UtilityPlant, at original cost (Note1)
Electric
( as.
Steam At December 31 1974
$485,889 156,951 16,468 1973
$453,484 149,399 16,008 1972
$442,337 142,320 15,273 1971
$429,111 137 327 15,066 1970
$407,165 131,257 14,654 Less-Accumulated Depreciation and Amortization Electric Gas Steam 125,941 37,114 4,590 111,401 34,965 4,234 103,240 32/177 4,388 100,642 29,655 4,122 87,783 26,977 4,101 167,645 150,600 139,805 134,419 118,861 659,308 618,891 599,930 581,504 553,076 Construction work in progress.
491,663 39,324 468,291 24,542 460,125 16,539 447,085 16,903 434,215 16,565 Investment in subsidiary, at equity (Note 1).
Current Assets Cash (Note 5).
Accounts receivable Materials and supplies, at average cost Prepayments 530,987 1,834 7,458 25,354 19,017 849 5,434 22,239 10,799 510 13,651 19,643 9,888 530 12,463 12,999 10,828 610 9,988 11,587 9,628 753 492,833 476,664 463,988 450,780 52 678 38I982 43p712 36p900 31 956 Deferred Debits Unamortized debt discount and expense (Note 1)...
Deferred fuel cost (Note 2).
Other 2,006 3 737 1,999 7,742 Total 593,241',487 2,893 4,380
$536,195 1,563 1,335 2,898
$523,274 1,640 398 2,038
$502,926 1,714 429 2,143
$484,879 LIABILITIES Capitalization (Note 4)
Long term debt.
Preferred stock Common stock............
Premium on preferred stock Other paid-in capital Capital stock expense Retained earnings
$266,677 67,000 157,618 83 829 (3,772) 53,568
$236,677 67,000 152,180 83 (3,697) 52,184
$236,677 67,000 126,734 83 (2,772) 47,069
$236,677 67,000 106,434 83 (2,488) 44,624
$236,677 67,000 100,976 83 (2,470) 43,890 Nuclear Fuel Contract.
542,003 504,427 474,791 2,145 452,330 5,687 446,156 8,724 Current Liabilities Notes payable (Note 5)
Accounts payable Taxes accrued, including income taxes (Notes 1 and 3)...
Interest accrued Payroll accrued Other 21,000 11,028 2,428 6,767 1,909 820 12,909 8,922 4,657 1,763 840 18,000 14,088 4,958 4,993 1,633 821 21,500 10,181 4,246 5,068 1,136 823 11,000 9,077 550 4,845 1,034 869 43,952 29,091 44,493 42,954 27,375 Reserves and Deferred Credits Injuries and damages Unamortized premium on debt (Note1).
Other.
Accumulated Deferred Income Taxes (Notes1 and 3)...
Commitments (Note 6).
672 200 454 1,326 5,960 Total
$593,241 720 211 63 994 1,683
$536,195 787 222 68 1,077 768
$523,274 854 233 96 1,183 772
$502,926 887 245 92 1,224 1,400
$484,879 15
RM ROCHESTER CAS AND ELECTRIC CORPORATION Statement Of ChangeS in FinanCial POSitiOn tThousands)
Working capital was provided by:
1974 1973 1972 1971 1970
$20,543
$24,306
$19,95 I
$18,009
$19,005 21,643 20,173 20,292 16,185 19,495 (3,737) 4,277 (1,741)
Total from operations 38,837 915 (4)
(628) 1,400 (447)
(456)
(379)
(2,867) 46,417 39,664 37,294 33,723 Net income Non-working capital items Provision for depreciation and amortization of utilityplant including amounts charged to other accounts.
Deferred fuel cost (Note 2)
Deferred income taxes (Note 3).
Allowance for funds used during construction.
Financing Proceeds of short term loans (net)
Sale of first mortgage bonds.
Sale of common stock Nuclear fuel contract ending in 1974.
21,000 30,000 494 19,726 15,095 10,500 5,000 30,000 11,159 51,494 19,726 15,095 10,500 46,159
$90,331
$66,143
$54,759
$47,794
$79,882 Working capital was used for:
Utilityplant Plant additions less allowance for funds used during construction..
Nuclear fuel.
Preferred stock dividends.
Common stock dividends First mortgage bond maturities Payment of short term loans (net).
Nuclear fuel contractual amounts due within one year..........
Capital stock expense Net changes in working capital and other accounts (exclusive of notes payable).
$50,931 5,240 56,171 3,550 11,614 75 18,921
$90,331
$34,181 3,195 37,376 3,550 9,922
$25,618 6,876 32,494 3,550 8,751
$25,654 7,478 33I132 3,550 8,267
$27,848 14,385 42,233 3,550 8,026 15,000 18,000 2,145 925 3,500 3,542 3,037 2,435 284 18 22 (5,775) 2,638 (210) 8,616
$66,143
$54,759
$47,794
$79,882
Report of Independent Accountants Notes to Financial Statements PRICE WATERHOUSE & CO.
To the Shareholders and Board of Directors of Rochester Gas and Electric Corporation We have examined the balance sheets of Rochester Gas and Electric Corporation at December 31, 1970-1974, and the related statements of income and retained earnings and of changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we con-sidered necessary in the circumstances.
Effective January1974, the Company, in conformance with accounting policy pre-scribed by the Public Service Commission of the State of New York, changed its method ofaccounting for fuel costs recoverable from customers under the fuel adjustment clauses in the Company's tariffs. In 1972, the Company changed from a fiscal month basis to a calendar month basis'for purposes of recording revenue and major expenses.
The changes and their effect are described in Note 2 to the financial statements.
In our opinion, the accompanying financial statements examined by us present fairly the financial position of Rochester Gas and Electric Corporation at December 31, 1970-1974, the results of its operations and the changes in financial position for the years then ended, in conformity with gener-ally accepted accounting principles consistently applied, except for the changes, with which we concur, referred to in the preceding paragraph.
1900 Lincoln First Tower Rochester, New York February14, 1975 Note 1. Summary of Accounting Policies General The Company is subject to regulation by the Public Service Commission of the State of New York (PSC) with respect to its rates for service and the maintenance of its accounting records. The Company's accounting policies conform to generally accepted accounting principles
's applied to New YorkState public utilities giving effect to the rate making and accounting practices and policies'f the PSC. A description of the Company's principal accounting policies follows.
UtilityPlant and Depreciation The cost of additions to utility plant and replacement of retirement units of property is capitalized. Cost includes labor, material, and similar items as well as indirect charges for engineering, supervision, etc. The Company capitalizes an allowance for funds used during construction approximately equivalent to the cost of capital devoted to plant under construction. Replacement of minor items of property is included in maintenance expenses.
Costs ofdepreciable units of plant retired are eliminated from utilityplant accounts, and such costs, plus removal expenses, less salvage, are charged to accumu-lated depreciation and amortization.
Depreciation in the financial statements is provided on a straight-line basis at rates based on the estimated useful lives of property, which have resulted in aggregat'e provi-sions in the years1970 through 1974 ofapproximately 2.8 percent per annum, of average depreciable property.
Amortization of nuclear fuel assemblies is charged to operating expense each month based upon the thermal out-put of the reactor and the total book cost of the fuel load.
Rates and Revenue Revenue is recorded on the basis of meters read during the calendar year.
Tariffs for electric and steam service include fuel cost adjustment clauses which serve to adjust electric and steam rates from time to time to reflect changes in the average cost of fuels used in electric and steam generation from the average cost of such fuels during the base period. Tariffs for gas service contain a comparable clause to adjust gas rates for changes in the price ofpurchased natural gas.
Deferred Charges, Credits and Capital Stock Expense
- Discount, premium and expense on debt outstanding are being amortized ratably over the remaining lives of the respective issues. No provision has been made foramortization of capital stock expense.
Federal Income Tax.
Depreciation is provided for tax purposes on the basis'of the Class LifeSystem for property placed in service before January1,1971, and the Class LifeAsset Depreciation Range System (ADR) for property placed in service after December 31,1970, utilizing accelerated depreciation for all qualifying property. For tax purposes the Company also deducts currently the cost of removal of retired assets as allowed under the ADRsystem.
The Company follows a policyofflowingthrough the current tax reduction arising from using the Class LifeSystem and from accelerated depreciation. However, as recom-mended by the PSC, normalized tax accounting is followed in the application ofstraight-line depreciation methods used under the ADRsystem, and cost of removal deductions is normalized over a five-year period. Investment tax credits are applied to reduce current tax provisions. The PSC adopted amendments to its Uniform System ofAccounts, effective January1,1973, requiring the allocation of the investment tax credit between Operating Income and Other Income and Deductions. In 1973 and 1974, 50 percent of the credit is allocated to Other Income and Deductions.
Normalized accounting is also being followed for the difference in the tax and book treatment of nuclear fuel and fordeferred fuel cost.
Pension Plan The Company's retirement plan is non-contributory and covers all regular employees. Retirement plan benefits are provided for by payments made to an insurance company, to trust funds with banks, and by volun-tary payments made directly to retired employees. Current service costs are funded annually. Prior service costs under the funded portion of the Plan are being amortized and funded over a period ofabout 30 years.
Payments for the years 1970 through 1974 of $3.1 million,
$3.4 million,$3.8 million,$4.1 millionand $3.9 million, respectively, have been made to the funded retirement plan.
Voluntary payments to retired employees in each of those years were approximately $1.6 million. Based upon the val-uation report furnished to the Company by the independent actuary for the Plan, the unfunded liabilityofthe Plan was approximately $60 millionat December 31, 1974. The actuarially computed value ofvested benefits as of that date exceeds the assets in the Plan by approximately $11 million.
The Pension Reform Actof 1974 willmake it necessary for the Company to amend its pension plan in order to conform to the Reform Act. It is management's intention to make further amendments to the Plan to minimize changes in pension costs so that there willbe no significant effect on net income.
Earnings and Dividends Per Share Earnings applicable to each share ofcommon stock are based on the weighted average number of shares outstanding during the respective years, adjusted forstock dividends. Cash dividends per share are based on the weighted average number of shares outstanding at the time dividends are paid, adjusted for stock dividends.
Investment in Subsidiary Company As prescribed by the PSC the Company has recorded its subsidiary Canadea Power Corporation on an equity basis as ofJanuary1, 1974. Prior years'inancial statements have not been restated due to the immaterial effect on prior years. The effect of the change on 1974 net income and earnings per share is not significant.
Note 2. Changes in Method of Accounting The Company's tariffs forelectric and steam services include a fuel cost adjustment clause under which electric and steam rates are adjusted to reflect changes in the average costs of fuels. There is a lag oftwo months from the time the average cost of fuel is determined to the application of the fuel cost adjustment rates to customer bills. In 1974, the Company began to defer a portion of the increased costs to the month in which the resultant revenues were recorded in order to achieve a better matching of fuel costs and fuel cost adjustment revenues. As a result of this accounting change, fuel costs included in operating expenses reported for1974 were decreased by $3.7 million and net income for the year, after appropriate tax accruals, was increased by $1.9 million (20( per share). The cumulative effect of the change on retained earnings at the beginning of 1974 would have been immaterial.
Authorization for the change was received from the PSC during 1974. Also in 1974, the PSC adopted a standard electric fuel cost adjustment (FCA) clause and, in a statement of policy, provided that during rate proceedings as much of the fuel costs as is practical should be included in base tariff rates. In several rate proceedings involvingother New York utilities the PSC permitted the recovery of all fuel costs deferred either through the normal operation of the FCA or amortization of that portion of fuel costs deferred not recoverable through the normal operations of the FCA clause. Those proceedings included situations in which the FCA billinglag was shortened between the period fuel costs were incurred and recovered in revenues or when a portion of the higher fuel costs was included in the base tariffrates. Accordingly, the Company believes that the PSC willpermit itto recover fuel costs deferred in the manner described above, ifand when such changes are requested or ordered.
18
During 1972 the Company converted from a fiscal month basis to a calendar month basis for purposes of closing revenue and major expenses on the same date in order to more nearly match revenue with expense. The effect of this change on net income for1972 is13 cents a share of common stock. Of this amount $0.7 millionor nine cents a share is the cumulative nonrecurring effect on net income to january1,1972 and is shown as a separate item in the Statement of Income. The remaining four cents a share is included in income from operations. Pro forma amounts ofnet income and earnings per share which would reflect the effect of a retroactive application of the change are not presented due to the immaterial effect of the change on prior periods.
Note 3. Federal Income Tax Provision The followingis a reconciliation for the years 1970 through1974 of the difference between the amount of Federal income tax expense reported in the Statement of Income and the amount computed by multiplying the income before tax by the statutory tax rate.
1973
'lo of Pretax Amount Income 1974
'/o of Pretax Amount Income
$20,543 (1,374)
(4.4)
(890)
(2.8)
(527)
(1.7)
(204)
(6)
(487)
(1.5)
$ 7,221 22.9 Net income
$24,306 Federal income tax Current (3,126) 6,724 Deferred 4,277 915 Charged to operating expense.
1,151 7,639 Included in other income.....
(792)
(418)
Tax effect on calendar year1972 of recording 4 additional days revenue and expense.......
Actual Federal income tax expense.
359 7 221 Income before tax...............
$20,902
$31,527 Computed tax expense...........
$10,032 48.0
$15,133 48.0 Increases (reductions) in tax resulting from:
Excess of tax depreciation less amount deferred.........
(4,496)
(21.5)
(4,430)
(14.1)
Expenses capitalized for financial statements.........
(2,121)
(10.2)
Investment tax credit...........
(1,320)
(6.3)
Property taxes on basis of dateoftaxablestatus.........
(1,152)
(5.5)
Cost of removal, less net amount deferred...... ~.....
(312)
(1.5)
Miscellaneous items, net........
(272)
(1.3)
Actual Federal income tax expense.$
359 1.7 1972
'/o of Pretax Amount Income
$19,951 1971 lo of Pretax Amount Income
$18,009 1,664 (4) 1,660 21 1,884 (628) 1,256 651 2.332
$22,283
$10,696 48.0 1,256
$19,265
$ 9,247 48.0 (1,218)
(5.5)
(1,650)
(7.4)
(1,097)
(5.7)
(864)
(4.5)
(384)
(1.7)
(720)
(3.7)
(101)
(.4)
(50)
(.2)
$ 2,332 10.5 (102)
(.5)
$ 1,256 6.5 (4I961 )
(22 3)
(5r208)
(27 1 )
1970
'/o of Pretax Amount Income
$19,005 (1,506) 1,400 (106)
(106)
$18,899
$ 9,298 49.2 (4,748)
(25.1)
(2r755)
(14.6)
(750)
(4.0)
(861)
(4.6)
(290)
(1.5)
(106)
(.6)
A summary of the amounts deferred or credited to income for the years 1970 through 1974 is as follows:
Investment tax credit...........
Class life depreciation..........
Excess fuel costs...............
Nuclear fuel Cost of removal-current year....
deferred in prior years.........
1974 640 1,794 1,615 432 (204)
$ 4,277 1973 600 415 (100) 915 1972 (700) 295 401 (4) 1971 (700) 72 (628) 1970
$ 1,400
$ 1,400 19
NOte 4. CapitaliZatiOn (rhousands of Dolhus)
December 31, ndS Due 1974 Sept. 1, 1977........ $
6,000 Mar. 1, 1979........
16,677 Aug. 15, 1980.......
12,000 June 1, 1982........
6,000 Mar. 1, 1985........
10,000 July 1, 1987.........
15,000 Oct. 15, 1989.......
12,000 Nov. 15, 1991.......
15,000 Sept. 15, 1994........
16,000 May 1, 1996.........
18,000 Sept. 15, 1997.......
20,000 July 1, 1998.........
30,000 Aug. 15, 1999.......
30,000 Sept. 1, 2000........
30,000 Aug. 1, 1983........
30,000
$266,677 First Mortgage Bo 4s/a% Series D 3%
Series L
2'/4% Series M 3/s% Series N 3s/a% Series 0 4r/e% Series R 5%
Series S 4s/a% Series T 4s/s% Series U 5.3% Series V 6'/4% Series W 6.7% Series X 8%
Series Y 9s/s% Series Z 10'/4% Series AA December 31, 1973 6,000 16,677 12,000 6,000 10,000 15,000 12,000 15,000 16,000 18,000 20,000 30,000 30,000 30,000
$236,677 Capital Stock Preferred stock (cumulative)-Par authorized:
Sllafes Series Outstanding 4%
Series F....120,000 4.10% Series H....
80,000 4s/a%
Series I.....
60,000 4.10% Series J.....
50,000 4.95% Series K.... 60,000 4.55% Series M...100,000 7.50% Series N....200,000 670,000 value $100; 2,000,000 shares 1974 and 1973
$1 2,000 8,000 6,000 5,000 6,000 10,000 20,000
$67,000 Redemption
'105 Atany time 101 At any time 101 At any time 102.50 Atanytime 102 At any time 102 Before 3/1/80 108 Before 6/1/79 Common Stock-Par value $5; 15,000,000 shares authorized Outstanding, December 31, 1969...
3% Stock Dividend.
Outstanding, December 31, 1970...
3% Stock Dividend.
Outstanding, December 31, 1971..
3% Stock Dividend.
Sale of Stock..
Employee Purchases Outstanding, December 31, 1972...
3% Stock Dividend.
Sale ofStock Employee Purchases Shares
...6,541,529 196,246
...6,737,775 202,134
...6,939,909 208,198 767,061 27,008
...7,942,176 238,294 950,000 25,719 Stated Value (000's)
$ 95,677 5,299 100,976 5,458 106,434 5,205 14,582 513 126,734 5,719 19,238 489 Sinking and improvement fund requirements aggregate
$333,540 per annum. Such requirements were met in each of the last five years by certification of additional property and it is anticipated that the 1974 requirements willbe met in the same manner. No amounts are held in sinking funds and no amounts are pledged by the issuer or held by affiliates.
Stated Value Shares (000's)
Outstanding, December 31, 1973.........9,156,189
$152,180 3% Stock Dividend.
274,690 4,944 Employee Purchases 5,212 99 Automatic Dividend Reinvestment Plan..
33,299 395 Outstanding, December 31, 1974.........9,469,390 157,618 AtDecember 31,1974, there remained 166,701 shares reserved and unissued of the 200,000 shares authorized under the Automatic Dividend Reinvestment Plan dated August 23, 1974.
No other shares of common or preferred stock are reserved for officers and employees or foroptions, warrants, conversions, and other rights.
Note 5. Short Term Borrowing Under informal agreements with certain banks, the Company maintains compensating balances which average 20 percent of the debt outstanding plus 10 percent of the unused line of credit. Under the agreements, withdrawal of the compen-sating balances is not legally restricted, and at December 31, 1974 the balances amounted to $5.7 million. Bank lines of credit aggregated
$64 millionand borrowings are at cur-rent floating prime interest rates.
There were $21 millionofshort term borrowings outstand-ing at December 31, 1974. The maximum amount of aggregate short term borrowings at any month end during the year was $34 million.The approximate weighted average end-of-month short term borrowings outstanding during 1974 was $21 million;the approximate weighted average interest rate was 10.8 percent, being the weighted average of the end-of-month prime rates in effect at the Company's principal bank for the periods during which short term bor-rowings were outstanding and before giving effect to the ad-ditional interest cost resulting from compensating balances.
Note 6. Commitments The Company's construction program involves an estimated expenditure of $78 millionin 1975 and the Company has entered into certain commitments for purchase of materials and equipment in connection with such program.
The Company has deferred construction of the Sterling fossil plant forwhich it has expended approximately $11 mil-lion. Part of the large environmental and site-related expenditures included in this amount can be allocated to the SNUPPS plant now proposed. Ifthe fossil plant is eventually cancelled, the Company would petition the PSC forauthority to amortize over a period ofyears, for rate making purposes, the remaining portion of the fossil plant expenditures which would have to be written offplus any equipment cancellation charges.
20
RQK ROCHESTER GAS AND ELECTRIC CORPORATION Electric Department Electric Revenue (000's)
Residential Commercial Industrial Other Other electric utilities Electric revenue from our customers Total electric revenue Electric Expense (000's)
Fuel used in electric generation Purchased electricity Other operation.
Maintenance Depreciation and amortization Taxes-local, state and other.
1974
$ 45,354 37,908 30,858 13,440 127,560 14,697 142,257 25,739 12,070 32,177 12,390 11,977 22,784 1973
$ 42,125 34,387 27,597 12,403 116,512 21,112 137,624 19,461 8,841 28,378 11,029 11,026 21,281 1972
$ 37,358 29,948 24,096 11,307 102,709 14,063 116,772 17,293 8,049 25,812 10,468 10,669 19,554 1971
$ 34,153 26,604 21,751 10,663 93,171 16,892 110,063 17,932 7,017 23173 10,235 10,181 16,784 1970
$ 30,010 23,325 19,780 9,444 82,559 10,517 93,076 14,080 7,209 20,933 7,754 8,608 13,134 Electric revenue deductions Operating Income before Federal Income Tax...........
Federal income tax.
Operating Income from Electric Operations (000's).......
Electric Operating Ratio '/0.
Electric Sales-KWH (000's)
Residential Commercial Industrial Other Electric sales to our customers Other electric utilities Total electric sales 117.137 25,120 (433) 100,016 37,608 7,235 91,845 24,927 23 85,322 24,741 757 71,718 21,358 (441)
$ 25,553
$ 30,373
$ 24,904
$ 23,984
$ 21,799 57.9 49.2 52.8 53.0 53.7 1,456,335 1,226,333 1,346,116 379,379 1,468,376 1,261,697 1,424,639 385,243 1,422,949 1,183,042 1,324,442 361,132 1,339,847 1,076,457 1,216,411 348,882 1,260,064 1,019,046 1,188,567 334,786 3,981,597 2,123,479 3,802,463 1,584,074 4,291,565 1,691,432 4,539,955 2,269,686 4,408,163 1,182,902 5,591,065 6,809,641 5,982,997 6,105,076 5,386,537 Electric Customers at December 31 Residential Commercial Industrial Other Total electric customers Electricity Generated and Purchased KWH (000's)
Steam Nuclear.
, Hydro Cilboa-Pumped storage Cilboa-Less energy for pumping.
Other...
Total generated-Net Purchased 244,063 23,827 1,365 2,316 271,571 1,961,453 2,079,539 234,568 131,311 (192,311) 12,806 4,227,366 1,836,911 241,032 23,436 1,360 1,995 267,823 1,869,079 3,395,564 243,582 57,801 (86,362) 8,776 5,488,440 1,709,420 236,283 23,147 1,345 2,043 262,818 1,984,424 2,356,182 305,104 3,933 4,649,643 1,734,901 232,558 22,712 1,382 2,039 258,691 2,093,932 2,704,993 220,668 4,190 5,023,783 1,481,759 227,810 22,283 1,412 2,015 253,520 2,020,832 1,975,515*
270,673 7,209 4,274,229 1,443,652 Total electric energy 6,064,277 7,'I97,Q60 6,384,544 6,505,542 5,7 I 7,QQ I Electric Production Costs (000's)
Steam generation Nuclear generation Hydro generation Other generation Electric Department Fuel Fossil
-Total BTU (million).
-Cents per million BTU.
Nuclear-Total BTU (million).
-Cents per million BTU System Net Capability-KW at December 31 Steam Nuclear.
Hydro Other..
Purchased..
$ 14,502 5,663 741 78
$ 16,298 10,172 806 65
$ 30,1 30 8,276 1,073 1,006
$ 17,951 10,365 1,072 123
$ 16,252 9,271 850 65 22,698,446 53.51 29,024,371 19.93 20,911,993 117.05 22,909,968 11.28 20,331,338 62.12 36,683,359 18.62 21,667,624 47.45 15,709,329 16.54 21,315,214 56.77 25,670,477 20.23 460,000 420,000 53,100 42,500 216,750 457,000 420,000 53,100 42,500 207,000 457,000 420,000 53,100 42,500 212,000 457,000 420,000 53,100 42,500 352,000 452,000 470,000 47,000 29,000 347,000 Total system net capability 1,345,000 1,324,600 1,179,600 1,184,600 1,192,350
.Net Peak Load-KW.
Annual Load Factor-N et
'Excludes 195,859,000 KWH of test period generation 880,000 63.3 922,000 61.0 855,000 62.5 790,000 63.3 762,000 61.9
RQK ROCHESTER GAS AND ELECTRIC CORPORATION Gas Department Gas Revenue (000's)
Residential Residential spaceheating.
Commercial Industrial Municipal and other Gas Expense (000's)
Purchased natural gas for resale Other operation Maintenance Depreciation Taxes-local, state and other.
Total gas revenue 1974 3,809 47,758 12,533 8,583 2,780 75,463 36,504 12,330 4,757 3,978 7,937 1973 3,627 40,453 10,433 7,648 2,472 64,633 29,314 12,029 4,043 3,615 7,281 1972 3,754 41,228 10,527 7,590 2,766 65,865 30,251 11,543 3,677 3,439 7,036 1971 3,638 36,564 8,954 6,507 2,399 58,062 25,954 10,804 3,049 3,521 6,141 1970 3,650 34,135 8,207 5,898 2,115 54,005 22,839 10,738 2,793 3,510 5,409 Gas revenue deductions Operating Income before Federal Income Tax................
Federal income tax.
Operating Income from Gas Operations (000's)...............
Gas Operating Ratio %
65,506 9,957 1,221 56,282 8,351 840 55,946 9,919 1,787 49,469 8,593 799 45,289 8,716 977 8,736 7,511 8,132 7,794 7,739 67.3 69.0 68.6 71.0 70.2 Gas Sales-Therms (000's)
Residential..
Residential spaceheating Commercial Industrial Municipal 14,903 263,290 84,872 73,926 16,696 15,141 245,368 79,039 78,137 17,148 16,345 267,862 84,759 80,869 19,628 16,976 253,856 77,348 75,461 18,267 17,375 245,242 73,827 72,611 16,439 Total gas sales 453,687 434,833 469,463 441,908 425,494 Gas Customers at December 31 Residential..
Residential spaceheating Commercial Industrial Municipal 42,884 151,154 11,478 767 1,024 45,958 144,847 11,303 762 865 48,086 140,065 11,178 774 922 50,283 135,578 10,988 784 945 52,101 131,450 10,677 803 999 Totai gas customers 207,307 203,735 201,025 198,578 196,030 Gas-Therms (000's)
Purchased for reforming and mixing.
Purchased for resale Other..
Cost of gas per therm 31,518 438,494 7,063 Total gas available 477,075 7.77II 30,834 422,718 6,535 460,087 6.530 39,819 454,723 8,041 502,583 6.17'7,997 420,244 7,058 465,299 5.704 36,294 399,629 7 171 443,094 5.33'otal DailyCapacity-Therms at December 31 Mixed gas Straight natural gas Maximum daily sendout-Therms.
410,844 3,871,448 Total daily capacity 4,282,292 3,192,631 410,844 3,762,672 549,244 3,696,624 549,244 3,690,232 655,499 3,668,700 4,173,516 4,245,868 4,239,476 4,324,199 2,985,392 3,211,192 3,368,476 3,096,020 Degree Days (Customer Silling)
For the period Percent (warmer) colder than normal 6,808 1.3 5,883 (12.2) 6,886 2.3 7,017 4.2 6,841 1.6, 22
PK~K RocHE$ TER GAS AND ELEcTRlc coRPQRATIQN Steam Department Steam Revenue (000's)
Commercial Industrial Municipal and other Steam Expense (000's)
Fuel used in steam generation.
Other operation.
Maintenance Depreciation..
Taxes-local, state and other Total steam revenue 1974 5,419 9,396 1,506 16,321 10,954 687 819 536 1,689 1973 3,668 5,470 876 10,014 6,151 1,201 816 504 1,431 1972 3,565 4,878 756 9,199 4,686 1,634 727 457 1,295 1971 3,067 4,076 611 7,754 3,994 1I317 759 404 1,099 1970 2,350 3,057 477 5,884 3 322 1,101 713 388 918
'team revenue deductions Operating Income before Federal Income Tax................
Federal income tax.
14,685 1,636 363 10,103 (89)
(436) 8,799 400 (150) 7,573 181 (300) 6,442 (558)
(642)
Operating Income from Steam Operations (000's)..
Steam Operating Ratio '/0 1,273 347 76.3 81.6 SS0 76.6 481 84 78.3 87.3 Steam Sales-Lbs. (000's)
Commercial Industrial..
Municipal.
1 I160I1 22 1 268 91 7
~
2~1 27 837 2r1 36I794 334,463 318,323 Total steam sales 3,622,422 3,724,034 1,468,889 2,292,755 328,935 1,429,574 2,1 74,853 313,151 1,433,708 2,212,644 299,992 4,090,579 3,946,344 3,917,578 Steam Customers at December 31 Commercial Industrial..
Municipal.
Total steam customers 292 78 31 401 302 78 30 410 317 81 26 424 327 78 28 433 351 82 30 463 Steam-lbs. (000's)
Produced by steam department 1,532,246 By-product steam from electric department................
2,588,120 Total steam produced 4,120,366 1,442,472 1,818,908 1,689,830 1,527,404 2,613,321 2,689,115 2,531,987 2,818,008 4,055,793 4,508,023 4,221,817 4,345,412'team Department Fuel Total BTU (million)
Cents per million BTU 6,807,500 6,849,830 7,138,004 7,071,818 196.31 89.80 65.64
~ 56.47 6,912,430 48.05 23
Directors Keith W. Amish Executive Vice President, Rochester Cas and Electric Corporation 2
Paul W.
Briggs'resident, Rochester Cas and Electric Corporation 3 John D. Cockcro(t't Former Chairman o/ the Board, The R. T. French Company 4 wilmot R. craig former Chairman o/ thc Board, Lincoln First Banks Inc.
5 E.Kent Damon Vice President, Treasurer and Secretary, Xerox Corporation 6
Francis E. Drake Jr.'hairman of thc Board and Chief Executive Officer, Rochester Gas and Electric Corporation 7
J. Wallace Ely't Chairman o/ thc Board, Security Ncw york State Corporation 0 Walter A. Fallon President and Chic/ Executive Officer, Eastman Kodak Company 9
Ernest J. Howe't Chairman of the Executive and Finance Committee, Rochester Gas and Electric Corporation 10 Daniel G. Kennedy't
- Partner, Nixon, Hargrave, Devans 4 Doyle 11 A.J. McMullen Chairman of the Board and Chic/ Executive Officer, Garlock Inc.
12 PaulA. Miller President, Rochester Institute of Technology 13 Edward J.
Nelson'ormer President, Rochester Cas and Electric Corporation 14 WilliamS. Vaughn*t former Chairman of the Board, Eastman Kodak Company 13 William G.vongerg President, Sybron Corporation
'Member of ihc Executive and Finance Committee of the Company tMember of ihc Audit Committee of the Board of t3lreetors
", h na 12 1
14 13 15
Officers Francis E. Drake, Jr.
Chairman oi the Board and Chief Executive Officer Paul W. Briggs President Keith W. Amish Executive Vice President Donald R. MacCollum Senior Vice President, Gas, Transportation and Fuels Research Robert W. Baschnagel Vice President, Marketing, Corporate Communications and Purchasing Granger E. Green Vice President, Electric Transmission, Distribution and Utilization John L. Kennedy Vice President, Rates and Governmental Ailairs Albert J. Klemmer Vice President, Customer Services Robert R. Koprowski Vice President, Engineering and Construction John E. Maier Vice President, Employee Relations Harry G.Saddock Vice President, Electric System Planning and Operation Elvin A. Skibinski Vice President, Gas and Transportation Leon D. White, Jr.
Vice President, Electric and Steam Production Dean W. Caple Secretary and Treasurer Francis A. Sullivan, Jr.
Controller Robert W. Ball Assistant Treasurer David C. Heiligman Assistant Secretary Stephen Kowba Assistant Controller John M. Kuebel Auditor
Rochester Gas and Electric Corporation 89 East Avenue Rochester, New York 14649
Rochester Gas and Electric Corporation Annual Report 1969 lP gQf~
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LAKE ONTARIO Oswego Contents Letter from the Chairman 2
Highlights 3
Earnings and Dividends 4
Expense 6
Rate Filing 6
System Development 8
Sales and Marketing 10 Electric Operations 12 Gas Operations 16 Employee Development 16 Management 18 Income and Earned Surplus 20 Financial Condition 22
, Long Term Debt 24 Capital Stock 24 Accountants Opinion 25.
Statistics for Analysts 26 ORL S
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I CAYLIGA I Cover A schematic cross-section of the nuclear reactor at Ginna Station symbolizes the carefully controlled and constructive release of energy which is the very foundation of our business.
Service Area Over 820,000 people live in the 2,300 square mile area served by Rochester Gas and Electric Corporation. The region is widely known for its progressive businesses and prime residential and recreattonal areas r'YOMING pa LIVINGsTGN fr' lletke 4ke L
LAKE ONTARIO NEW YORK STATS ALLEGANY I
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Ioeckrlcay one SCALS OP MILSS MrIncrr Iemlec PENNSYLVANIA This report is prepared for the information of security holders. analysts. employees and other interested persons. It is not transmitted in connection with the sale of any security or offer to sell or offer to buy any security.
To Shareholders I look forward each year to this opportunity to discuss with the Company's shareholders and friends my personal appraisal of "The State of the Corporation." This annual report contains ample statistical information to enable you to make your own judgment and I urge you to study the progress charted by these figures.
Energy sales for 1969 exceeded those of 1968 by substantial amounts, resulting in a revenue increase of seven percent, nearly nine million dollars above the previous year. This is the greatest dollar increase in the history of the Company. At the same time, expenses charged to income increased
$6.4 million with local, state and other taxes accounting for
$2.6 million and fuel costs
$3.8 million. Total payroll increased S3.2 million and
$1.9 million of this amount was included in operating expense.
Federal income taxes were sharply reduced, primarily due to these increased expenses plus higher-interest charges.
Earnings per share of common stock were
$2.45 compared with
$2.30 for 1968, based upon the shares outstanding at the close of 1969. There has been a steady increase in earnings per share during the decade of the sixties, and in July, the annual cash dividend was increased from $1.10 to the present rate of $1.20. This is the sixth increase in the dividend rate since the Company's stock became publicly owned in 1949. In addition, the Company paid its eleventh consecutive stock dividend in February 1970. The stock dividend policy has provided the shareholder with an increased investment in the Company that is marketable, at his option, with minimum tax consequences to him. We believe that our shareholders favor this stock dividend policy and we plan to continue it.
Consistent improvements in operating efficiency. brought about by technological innovations suggested and initiated by our employees, have enabled us to keep our operating expenses under control. In spite of strong inflationary pressures, we have successfully absorbed rapidly escalating costs without any increase in the rates charged our customers from 1958 through 1969. In fact, during the 1960's we reduced gas and electric rates on several occasions.
If the Company is to continue to grow and its securities are to attract you and other investors, an increase in rates is now required. We have recently applied to the Public Service Commission for authority to increase steam rates by $1.1 million. An electric rate filing, calling for an increase of approximately 15 percent. is being prepared and will be filed in the near future.
The Ginna nuclear electric generating station produced its first electricity at the close of 1969 and, during tests, reached full load in March 1970. This plant is a major asset both in terms of economical operation and environmental protection. It is a valuable element in the interconnected power systems of New York State and of the Northeast. The nuclear station will eliminate air pollution problems associated with conventional coal or oil-fired plants. Extensive ecological studies together with continual monitoring will assure that no adverse effect on marine life will result from the station's water discharge.
The Ginna station nearly doubles the generating capacity of the Company's electric system but our surplus generating capacity is already under contract. The production costs of power at this plant will be very favorable but it may take some time until the impact of all the additional expenses of this large unit will be fully offset by the anticipated revenues.
Several management changes were made during the year to bring younger men into greater areas of responsibility and broaden their knowleage of total Company operations.
We are ending one decade of growth and beginning a new one.
There will be many problems for the Company to resolve during the 1970's but problems are the hallmark of growth and we welcome them.
Sincerely,
~c E'i~P Chairman of the Board and Chief Executive Officer I
1
Highlights Earnings per share 1969 Increase over 1968
'N Increase On shares at December 31, 1969.
2.45 S
.15 6.5 On shares after February 1970 stock dividend...
2.38 S
.15 6.7 Cash dividends paid on common stock (000's)..
7,470 S
535 7.7 Stock dividends capitalized (000's).
6,097 918 17.7 Revenues (000's).
131,791 S
8,866 7.2 Customers.
444,068 7,754 1.8 Electricity sold (MWH).
Gas sold (Therms).
3,579,443 403,023,901 298.850 9.1 28.749,920 7.7 Fuels, electricity and gas purchased (000's)..
38,106 S
3,760 10.9 Payroll and employee benefits (000's) 34,250 S
3,200 10.3 Employees 2,605 40 1.6 Taxes-other than Federal income (000's)..
19,364 S
2,969 1 8.1 Interest on bonds and notes (000's) 11.1 35 S
1,842 19.8
Earnings and Dividends Nineteen sixty-nine was another year of growth, with per share earnings showing an increase for the ninth consecutive year. Earnings per share of common stock for the year were
$2.45, a 6.5 percent increase over the
$2.30 attained in 1968.
Both earnings figures are based on the 6,541,529 shares of common stock that were outstanding at the end of 1969.
Dividends Reflecting the increase in earnings, the Board of Directors increased the annual cash dividend rate at its meeting on June 18.
Beginning with the payment on July 25, 1969, the quarterly dividend was increased to 30c per share, or
$1.20 on an annual basis, compared with the previous rate of $1.10.
The eleventh consecutive common stock dividend was paid on February 16, 1970 at a rate of three percent. This is in keeping with our established policy of an annual stock dividend in addition to the regular quarterly cash dividends.
We believe the payment of these annual stock dividends is advantageous to both the shareholder and to the Company. When the shareholder retains the stock dividend, he owns a steadily increasing number of shares in the Company. Should he sell the stock dividend to supplement the cash dividends he has received, he will be subject to only a capital-gains tax.
The stock dividend policy has enabled the Company to use a
substantial part of its earnings for construction expenditures.
Consequently the Company has not had to sell any additional shares of common stock in the past 11 years.
The Company estimates that 100 percent of the cash dividends paid on the common stock and 14 percent of the dividends paid on the outstanding series of preferred stock during 1969 represent a non-taxable return of capital and should not be included as dividend income for Federal income tax purposes.
Revenue The largest annual increase in revenue in the Company's history occurred in 1969. Gross revenue for the year was
$131.7 million, an increase of S8.8 million or seven percent over 1968. This growth reflects the sound economic climate in the 2,300 square mile territory we serve. Industrial production in the Rochester area increased eight percent during 1969. This is nearly double the national average and is characteristic of Rochester, an address that is "home" to many diversified and growing industries delivering thousands of different types of precision goods to world-wide markets. Through aggressive marketing efforts, the Company has been able to attract and serve this growth with ever-expanding amounts of energy.
The sale of electricity accounted for $ 5.5 million of the year's gain in revenue. While this represents an advance of eight percent in electric revenue, the related kilowatt hours delivered to our customers increased by nine percent, a record growth for a one year period. The largest percentage increase in kilowatt hours was 10.1 attained in the commercial sector, followed by increases in the residential and industrial areas of 9.4 and 6.8 percent, respectively.
Gas sales showed an increase of
$3.1 million for the year or seven percent more than 1968. Measured in therms of gas consumed, industrial customers increased their consumption by 17 percent, commercial sales were up 12 percent, and residential usage accounted for a four percent increase.
Years ofresearch and planning come close to fruition as the finalpreparations are made prior to receiving theinternal components of the nuclear reactor at Ginna Station.
LOCAL. STATE AND OTHER TAXES LI U 1960 61 62 63 64 65 66 67 68 10 YEAR COMPARISON INTEREST ON LONG TERM DEBT LI U LI LI LI LI rt n n n 1960 61 62 63 64 65 68 67 68 MJWON4 418 16 14 12 10 8
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The modest residential increase reflects the tightened single unit residential building market during the year.
Steam revenue for 1969 was
$5.5 million, an increase of five percent over the previous year.
Expense Operating expenses of S77.3 million for the year were nearly nine percent or S6.3 million more than the previous year. Steam and electric fuels plus electricity purchased amounted to
$17.4 million or $1.8 million more than last year. Natural gas purchased for resale and Company use cost
$20.7 million, an increase of $2.0 million for the year.
Payroll and employee benefits in 1969 totaled more than
$34 million, an increase of $3.2 million for the year. Operating expenses include
$1.9 million of this payroll increase and the balance is included under construction costs as part of capital.
The provision for depreciation during the year totaled
$10.9 million of which $10.5 million was charged against income.
The magnitude of the Company's tax bill can be appreciated when it is realized that RGandE pays over ten percent of all of the real property and school taxes levied in the City of Rochester.
Local, State and other taxes totaled more than
$19.3 million in 1969, an increase of $3.0 million or 18.1 percent during the year. The charge to income for these taxes was
$17.6 million, a 17 percent increase or $2.6 million greater than for 1968.
Interest charges on long term debt and short term notes amounted.
to $11.1 million. These charges increased
$1.8 million over the 1968 figure because of significantly higher interest rates coupled with the additional capital funds required for a heavy construction program.
Expenses are reduced by the credit for interest charged to construction amounting to
$5 million in 1969. an increase of $1.6 million over last year. This large credit reflects the continuing investment in the Ginna nuclear plant.
Rate Filing The Company has made application for an increase in steam rates and is in the process of filing for an electric rate increase. The steam rate filing was made with the Public Service Commission on March 16, 1970, requesting an increase of approximately
$1.1 million on an annual basis. A petition for a 15 percent increase in electric rates will be presented to the Public Service Commission in the very near future.
We have also notified the City of Rochester that we will seek higher street lighting rates after June 30, 1970, when their contract expires.
The necessity for these increases has been reviewed in great depth, and we regard them as absolutely essential.
Our ability to attract new capital, thereby enabling us to provide the type of service our customers require, could be impaired if the requested increases are not granted.
The last time that Company rates were increased was in 1958.
Through technological improvements and the economies inherent in a growing volume of business, we have actually made several rate reductions since that time. Now the eroding effects of inflation have caught up with us.
Over the last six years, the cost of construction has skyrocketed. Labor and material costs have advanced to unprecedented highs. New standards for reliability and environmental protection have been developed.
and these considerations have a significant effect on capital Electric load dispatchers sit at a vital center ofactivtty, coordinating all power flowsin our system andinterchanging electricity with other members of the New York Power Pool.
COST OF ELECTRICITY Vs COST OF LIVING Index (1957-59~1 00)
Cost of Uving Cost of Electdcity 1960 et e2 63 es ee 66 67 66 69 COST OF GAS VS COST OF LIVING Index (1957-59~1 00)
Cost of Living Cost of Gss 1960 61 62 62 64 65 66 67 68 69 110 70 120 110 70
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requirements.
We have watched interest rates grow from a pre-World War II average of slightly over three percent to the present prime rate level of 8.5 percent.
Taxes have continued their unrelenting rise.
In the face of these conditions we are seeking rate increases to keep the Company financially strong and to protect the interest of our shareholders.
System Development Utilityplant investment at the end of 1969 was
$522 million, including
$46 million of new construction added during the year. Our investment in plant at the beginning of 1960 was
$259 million so that the Company has doubled during the decade of the sixties. The net additions of $263 million during this period reflect the substantial growth of the Company and of its customers.
1969 Construction The cost of electric construction during the year was
$37.4 million. Ginna nuclear station was nearly completed and approximately 95 percent of the station's construction had been paid for. Two 18,000 kilowatt gas turbine generating units have been installed at two steam stations and these units will add to the capacity and reliability of our electric system.
The installation of additional gas distribution mains, service laterals, meters and regulators involved S7.2 million. This construction provided gas service to new customers and increased the capacity of the system to supply the expanding requirements of existing customers.
Major projects of the
$600,000 steam construction program in 1969 included completion of a new steam boiler installation and other improvements at steam system plants. Steam mains were installed and relocated to permit new building and highway construction in downtown Rochester.
Common utility plant additions totaled one million dollars. The major expenditures covered additions to and replacement of construction equipment to maintain the Company's extensive electric. gas and steam systems.
Storage areas were enlarged and other improvements made at the Operations Center.
1g7O Construction Forecast The proposed 1970 construction will involve an estimated
$36 million.
This forecast includes
$12 million for work,on projects previously authorized. New projects proposed in the forecast will require
$24 million in 1970.
Electric construction is forecast to cost
$25.2 million, including final payments on the Ginna Station construction contract. During the peak construction years of Ginna Station, transmission and distribution additions were kept at a minimum level. The 1970 forecast provides for major emphasis on building up transmission and distribution facilities to meet increasing load requirements and to maintain the Company's adequate reserves for emergency conditions.
The gas department will require
$8.3 million for system improvements during the year.
Unusually heavy load growth in an area southeast of the city will require first phase construction of 20 miles of new 24 inch high pressure gas main as a primary feeder to link two major connections with our gas supplier. Additional projects will provide facilities to supply increased gas use.
The major steam department project during 1970 will be conversion of the boilers at Station 8 to use gas instead of coal as fuel. This steam station is in the heart of downtown Rochester and the Company has voluntarily undertaken the conversion in the interest of a cleaner city. The project will benefit the environment and improve operating conditions. Steam construction costs are forecast to be one million dollars for the year.
Common utility plant projects during 1970 will require
$1.6 million. The major costs will be for the replacement of heavy duty and special purpose transportation equipment used by the Company to maintain the vast networks of electric, gas and steam facilities.
Financing The
$8.3 million outstanding Series J 3/4/0 bonds were redeemed at maturity on March 1, 1969. An issue of $20 million of 7.50/0 preferred stock was privately sold in the spring. In August, the Company sold
$30 million of 8/0 first mortgage Series Y bonds due in 1999. The proceeds of the preferred stock and bond issues were used to redeem outstanding short term loans and to pay for additional construction costs. The balance of 1969 construction costs was supplied by the issuance of short term notes, and
$6.0 million of these loans were outstanding at December 31.
Approximately $17 million of the
$36 million required for 1970 construction projects will be provided from internal sources. Additional construction funds will be provided from short term notes until permanent financing is undertaken.
The outstanding S15 million of Series K 3s/80/o bonds matured Distillation Products Industries. a division of Eastman Kodak, depicts borh the stability and the excitement thetis characteristic ofRochesterindustry.
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No other Company bonds are scheduled to mature until 1977.
The Years Ahoad The preliminary forecast of construction costs for the five years 1970-1974 is $192 million and the major emphasis during the period will be on electric and gas transmission and distribution systems. We believe that the growth of business in the Rochester area will continue at a high level, although it may not be as exceptional as the growth experienced during the sixties. The Company must continue the expansion of its electric, gas and steam systems if it is to attract and serve the continuing growth in its franchise area. However, no major generating plant expansion is planned during this five year period.
A forecast of external financing that will be required during this five year period will be delayed until the current rate proceedings have been concluded and we have a more accurate picture of internal funds that may be available for construction.
Sales and IVlarketing It was a good year for sales.
Although 1969 was not a record year for new sales of steam, gas and electricity, new business secured was substantially above that which had been recorded for 1968.
In spite of an expected slowdown in the economy, fewer housing starts and a restriction by our supplier of natural gas on certain new large use gas loads, the new business forecast for 1970 is only slightly below that for the previous year.
The economy of the Rochester area continued to grow at a healthy rate. The unemployment rate in 1969 was 1.9 percent (versus 1.7 percent in 1968) compared with 3.7 percent for New York State and 3.5 percent for the nation.
Area Development A prime objective of the Company's area development activities is to help all communities in our territory grow, and to grow in an orderly fashion. To reach this objective, our personnel offer assistance in all phases of planning and development.
Industrial growth in the Rochester area is particularly strong. The rapid industrial expansion of our service area is evidenced by the fact that 44 companies expanded plant facilities during 1969. In addition, 13 new industries located all or a portion of their operations in our territory.
In recent years, many small, highly technical industries have been established here. They, together with nationally known, well established industries such as Eastman Kodak, Xerox, General Motors, Bausch 8i Lomb and Sybron, continue to stimulate the economic climate.
The demand for addition'al retail facilities in the area continues.
McCurdy 8i Company is expanding its Long Ridge shopping center in suburban Greece. Groundbreaking ceremonies have been held in Victor, south of Rochester, for the Eastview Mall. When completed, this will be the largest shopping center in our area.
Lincoln Rochester Trust Company has started constructing a 26-story office building, shopping mall and commercial complex which will be named Clinton Square. The 15-story Genesee Crossroads Office Building, whose principal tenant is Security Trust Company, was officially opened late in the year and Marine Midland's new 21-story office building will be occupied in 1970.
In addition to expanding its medical school, the University of Rochester has started construction on a new
$50,000,000 hospital. Highland,
- Genesee, St. Mary's and Rochester General hospitals are completing expansion programs. Construction of the new Park-Ridge Hospital in suburban Greece is planned for 1970.
Housing Following the national trend, new single home building declined markedly during the year, but apartment construction was still very active.
There were 2,238 new homes and 3,062 new apartment units added in the Rochester area during 1969. We can estimate that each new home will add
$450 of annual revenue, of which
$265 is derived from the sale of gas and
$185 from electricity.
For new apartments, the figure approximates
$250 per year from each unit, in combined revenue.
Thus, new housing units added more than
$1.7 million to our revenues during the year.
consumor Interests One of the primary concerns of sales and marketing has been to assist our customers in making an intelligent choice among products and services, thus helping them to attain maximum satisfaction from the forms of energy we supply. Concern for the consumer is not at all a new concept to us.
Since the customer is our reason for being, we have always emphasized our responsibility to him. The continuing growth of appliance sales has been the result of customer satisfaction with our sales policies, coupled with, The demanding and rigorous tasks accomplished by gas crews make an important contribution to the warmth, comfon and convenience of customers.
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confidence in our well trained and reliable service department.
Knowledgeable salesmen guard the consumer's interest by helping him select the proper product for his need.
A great deal of effort has been devoted by sales department personnel to upgrading all types of installations such as wiring, lighting and heating systems.
Home Buyer' Workshops have been held to educate the home buyer in what to look and ask for. and what to expect in the energy systems of his home.
We have worked with heating and electrical contractors and home builders to impress upon them the need to provide consumers with reliable installations that will do the job they are designed to do.
In 1969 we aided local inspector groups in the development of new building codes and enforcement of existing ones. We have assisted the Better Business Bureau in protecting the consumer and the Bureau recommends our sales personnel as experts in providing reliable advice.
The home service department is staffed with trained home economists who help customers evaluate and select all types of products used in the home and advise them on the proper use of these products. They give advice on appliances, proper lighting, home planning and provide homemaking tips. They have been involved in many projects catering to the special needs of low-income groups. Making the most appetizing and nutritious use of surplus foods has been an important theme for many food demonstrations.
Through these and similar efforts, we have attempted to make our customers enjoy doing business with us. The growth of our business has been built on customer satisfaction with the many benefits that can be obtained through the proper application of our services.
Electric Operations Ginne station As 1969 drew to a close, the Company's largest undertaking, the Ginna nuclear station, reached its final stages of construction and testing. On November 9, 1969, the reactor was first brought up to "criticality," the point at which a sustained nuclear reaction was established.
On December 2, 1969, the unit's first electrical energy was generated
- and, during an elaborate series of tests, the 420,000 kilowatt plant reached full load in March 1970. This unit increases the Company's generating capability by approximately 80 percent and provides adequate capacity to meet the growing electrical loads in this area until the mid 1970's.
The Company is one of five utilities nominated by the Edison Electric Institute for the coveted "Edison Award." The award is made for accomplishments during the year which are considered to be of the utmost importance to the electric industry and to the public. The citation reads:
"Rochester Gas and Electric CorporationFor the efficient and effective management of the construction program that culminated in the completion of the Robert Emmett Ginna Nuclear Power Plant Unit No.
1 (420,000 KW)in the record time of 42 months from ground-breaking to initial criticality:
for achieving this record through close coordination and cooperation of company engineering and operating personnel in supervising construction and erection procedures as well as the fabrication of components in a variety of manufacturing locations: and for regaining for the industry. new confidence in nuclear construction in a period marked by a variety of trying circumstances throughout the nuclear constructi on industry."
We are extremely proud of the RGandE people who made this citation possible. It is also a tribute to the cooperation and dedication of Westinghouse Corporation, the prime contractor; Bechtel Corporation, the constructor; and Gilbert Associates, the architect-engineer.
The ability to use nuclear energy to generate a substantial portion of our customers'lectrical requirements in 1970 will alleviate one of 1969's most serious operating problems the shortage of coal. This shortage, which is nationwide. has been created by the lack of adequate expansion of coal supplies and the inability of the railroads to meet delivery schedules.
Various factors have combined to delay the installation of generating facilities in many parts of the country, resulting in a reduction of reserve margins below the desirable level. The operation of Ginna station has allowed Rochester to assist other areas by delivering power to Northeast Utilities and to Consolidated Edison Company of New York under interchange agreements which are now in effect.
Additional agreements are being negotiated which will provide for the delivery of substantial amounts of surplus power over the next three years.
Environmental Aspects The Company's responsibility to the communities it serves, and particularly its obligation to minimize The curiosity of thousands oflocal students has been stimulated by educational programs on nuclear power offered at the Company's Broekwood Science Information Center..
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any adverse effect on the environment, has been a major consideration in its operations and planning for many decades.
In 1925 we started supplying steam to buildings in the central business district of Rochester.
We now have 472 steam customers, and elimination of individual heating plants is a major reason for the cleanliness of the air in downtown Rochester.
For almost forty years the Company has participated in research and development designed to reduce particulate emission from smoke stacks. Some of the first electrostatic precipitators in the country were installed at Beebee Station in 1935 and these units have been constantly upgraded.
Russell Station, which has been in operation for over 20 years, is equipped with electrostatic precipitators designed to remove 97.5 percent of the particulate matter from the stack discharge.
Approximately $5.3 million has been invested in air and water pollution control facilities. Including interest charges on this equipment, plus associated operation and maintenance costs, the Company is spending approximately one million dollars a year on pollution control. During 1970, an additional
$500,000 has been earmarked to further reduce air emissions in the central business district.
Safety of the public and protection of the environment are primary considerations in the design, construction and operation of our'ew Ginna plant. By its very nature, 0 nuclear plant has less effect on the air than a fossil fuel plant since there are no products of combustion that have to be discharged through a stack to the atmosphere.
In fact, the Ginna plant doesn't even have a stack, but merely a small vent for the controlled release of minor amounts of gaseous discharges.
Water will be taken into the plant from Lake Ontario and discharged back into the lake, unchanged in quality, with a temperature increase of just under 20 degrees at full load plant operation. Discharge temperatures will be monitored to make sure that they are kept within appropriate limits. Through careful design of the discharge channel the nominal heat that has been added will be dissipated over a relatively small area of the lake adjacent to the discharge canal. More than 20 years of experience in discharging water at the same temperature into Lake Ontario from Russell Station indicates that these water temperatures have had no harmful effects on marine life.
To assure that our plant will not damage the environment we have undertaken a series of ecological studies of land, air and water at the plant site, starting in 1964. These studies are continuing, and if any adverse effects are indicated, appropriate remedial measures will be developed.
Our training program for the personnel who were selected to operate and maintain this plant began in 1963. After years of intensive study of theory coupled with practical experience.
both at other nuclear plants and at our plant during pre-operational testing, these men have qualified as reactor operators and have been licensed for this responsibility by the United States Atomic Energy Commission.
In addition, a fully equipped health physics laboratory is located at the plant, staffed by professionals whose sole responsibility is to insure that nothing is released from the plant that would constitute a hazard to the health of our employees or the general public.
The visual impact of our facilities on the environment has received substantial Company attention for many years. A policy of installing major electric transmission and distribution facilities underground within the City of Rochester was adopted in 1921. Efforts at landscaping and designing plants and substations to blend with the surroundings have received local commendation and national recognition. Continuing improvements in developing better procedures for underground installations led to 21 percent of new residential services being installed underground in 1969.
Reliability While the Company presently has a record of maintaining service to customers 99.988 percent of the time, we are still trying to improve on it. We believe it is good business practice as well as a basic responsibility to design and operate our facilities as reliably as possible.
During 1969. two 18,000 kilowatt gas turbines were installed to improve the operating flexibilityand dependability of our generating facilities. They are self-contained units capable of being fully loaded within five minutes from a cold shutdown condition as compared with a conventional steam unit which requires several hours from startup to full load.
Installation of major additions to the transmission system were completed in 1969. While these new lines and substations were built primarily to carry the output of the Ginna plant into our system and to enlarge our capability for interchanging power with other The doubling ofour computer capacity during the year hasimproved service to the customer and enhanced our ability to plan forhis future needs.
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utilities, they also improve reliability by reinforcing the existing transmission network.
In conjunction with other members of the New York Power Pool, we have built a Power Control Center in Albany, New York.
This Center, which became operational on February 10, 1970, will coordinate and monitor the operation of all major generation and transmission facilities within New York State and interconnections with neighboring utilities in New England, New Jersey, Pennsylvania and Ontario, Canada. A further increase in system reliability will occur when the large, dual-computer system, ordered last year, has been installed at the Albany Center.
These local and state efforts, the regional coordination activities of the Northeast Power Coordinating Council, and countrywide coordination through the National Electric Reliability Council, are all contributing to an outstanding reliability record. The effectiveness and strength of the interconnected systems was clearly demonstrated
. during 1969 when the loss of over 1,300,000 kilowatts of generation at Niagara Falls did not cause an interruption of service to a single customer.
Gas Operations During 1969 the gas department continued to wage an effective campaign'against increasing costs.
Competitive bidding, a Company policy for major projects, has been effectively employed to hold down costs of smaller projects such as gas service installations and gas meter changes.
New materials, which will reduce labor costs and improve reliability, are being carefully investigated.
Development of computer programs has resulted in more efficient scheduling of inspection and maintenance activities as well as providing more informative analyses of results. Computers are being utilized extensively for solution of engineering problems and to make optimum choices among various alternatives.
One of our young engineers, who is superintendent of gas planning, has been declared the winner of the 1969 National Beal Medal and Award of the American Gas Association. His paper, that dealt with the adaption of flow formulae to digital computers, was the basis for this award and it was judged the outstanding technical paper of the gas industry for the year. This is the second Company employee to receive this award since 1938.
The Company has developed a
cooperative program with other utilities and local contractors that has minimized costly damage that formerly resulted from inadvertent digging up of our underground facilities. The program has been so successful on a local basis that it is being adopted by many utilities throughout the country. Joint trenching with other utilities is another new development being employed to further reduce costs and speed installations.
New techniques are being developed in striving for such national goals as beautification and pollution control. Gas will play an important part in the improved incineration techniques necessary to meet new standards for the environment.
The future of the gas industry is limited only by the adequacy of the natural gas supply, or our ability to develop an economical and efficient technique for converting coal to gas at the mine site. New and expanded industrial uses for gas are being developed each day. Whether new dwelling units are single family homes, town houses or high-rise apartments, the residential requirements for gas will continue their current rate of growth. The 200.000th RGandE gas customer will be on the line by the year 1972, and virtually all new customers will use gas for heating. In addition, conversions from other fuels by existing customers will raise the percentage of the Company's gas customers who use gas for heating to an impressive 75 percent.
Employee Development The Company is deeply involved in the nuclear generation of electricity, and in the expanding applications of computers and related equipment in accounting, engineering and marketing. These are but a few examples of how advancing technology creates new jobs and new advancement opportunities for employees at RGandE.
The average term of employment for all Company employees is 14.1 years, and 35 percent of the employees have been at RGandE more than 20 years.
Many educational and training opportunities are available to employees.
Increased emphasis is being placed on employee development in multiple phases of the Company's operations.
More
'han 850 employees have received formal training in Job Management, the Company's work simplification program. This particular program has helped the employee improve his immediate work methods and has also greatly assisted the Company in effecting general improvements to minimize costs during this inflationary In the home, where heat. light and power are indispensable aspects ofmodern living, the ultimate test ofall of our operations and services is met.
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Qf period. The Company supports the formal education of employees by providing 100 percent tuition refunds upon successful course completion.
These programs provide the Company with a pool of trained personnel to support our long established policy of promotion from within.
Recruiting Total Company employment has increased from 2,565 in 1968 to 2,605 at the end of 1969. The fact that many of these additional jobs require highly skilled technical and professional personnel means that we have had to intensify recruiting efforts as well as internal training.
'ur direct college recruitment program now includes activities at 16 colleges and five two-year technical institutions. An active summer trainee program brings many fine employees into the Company, and last summer over 50 colleges and universities were represented.
Recruitment of untrained employees for unskilled and semi-skilled positions has always presented unique problems. Work with several local and national placement programs has been encouraging, enabling us to provide opportunities for people who may previously have been held back for lack of training or specific skills. The Company's basic objective in this regard is to find people without jobs, orient them to industrial jobs, provide training, and assist in their placement.
Continual counseling
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service helps to keep the employee on the job and steadily advancing.
The Company is continuing its active participation in many local, state and national programs and expects that these organizations will continue to be a fruitful source of employees.
Management During the year the board of directors elected the following officers: Lynn J. Cooley. formerly senior vice president, became executive vice president of operations.
Donald R. MacCollum, formerly vice president. became senior vice president of general services.
Paul W. Briggs was elected a vice president in addition to his continuing responsibilities as controller and secretary.
Elvin A.
Skibinski became vice president of gas and transportation, areas he formerly managed as superintendent.
Robert W. Baschnagel, formerly general sales manager, was elected vice president of sales and purchasing. John E. Maier, formerly purchasing agent, became vice president of employee and public relations. John L. Kennedy, formerly manager of the rate and economic research department, was elected vice president of rates and governmental affairs. Keith W.
Amish, an electric department superintendent, has been appointed assistant to the senior vice president of general services. All of these men have had many years experience managing various phases of Company operations.
Schuyler F. Baldwin, who had been vice president of public relations, retired October 1, 1969.
Vice President Alfred H. Doud. who had responsibility for special services, retired November 1st.
On February 18, 1970, J. Wallace Ely, president of Security Trust Company of Rochester, was elected a director of the Company. He succeeds Albert W. Whittlesey, who recently retired as senior vice president of The First Pennsylvania Banking and Trust Company of Philadelphia.
Officers FRANCIS E. DRAKE. JR.
Chairmen of the Board and Chief Executive Officer R. DEWITT PIKE President LYNIVJ. COOLEY Executive Vice President. Operations HAROLD S.
WEATHERBY Senior Vice President. Finance and Accounting DONALD R. MacCOLLUM Senior Vice President. General Services EDWARD J. NELSON Vice President, Electric and Steam ROBERT W. BASCHNAGEL Vice President, Purchasing and Sales PAUL W. BRIGGS Vice President. Controller and Secretary JOHN L. KENNEDY Vice President, Rates and Governmental Affairs JOHN E. MAIER Vice President. Employee Relations and Public Relations ELVIIVA. SKIBINSKI Vice President, Gas and Transportation DEAN W. CAPLE Treasurer ALBERT J. KLEMMER Auditor ROBERT W. BALL Assistant Treasurer FRANCIS A. SULLIVAN. JR.
Assistant Secretary and Assistant Controller
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Robert W. Ball R. Dewitt Pike
,4 Francis E Drake Jr f
John E. Maier John L. Kennedy Donald R. MacCollum Robert W. Baschnagel Elvtn A. Sktbtnskt Edward J. tfietson Lynn J. Cooley
ROCHESTER GAS AND ELECTRIC CORPORATION Statement of Income and Earned Surplus for the Years Ended December 31 (Thousands of Dollars)
Revenue Electric....
Gas.
Steam Expense Operation and maintenance.
Depreciation..............
Taxes-local, state and other.
Federal income tax 1969
$ 76,250 50,015 5,526 131,791 77,338 10.465 17,583 930 106,316 1968
$ 70.729 46,919 5,277 122.925 71.051 10,259 1 5,026 3,545 99.881 1967
$ 65,927 44.191 5.009 115.127 64,826 9,510 13,182 6.270 93.788 income from Operations.
25,475 23.044 21,339 Other Income 257 138 157 Gross Income.
25,732 23.1 82 21,496 Income Deductions Interest on long term debt.
Other interest and deductions.
Interest charged to construction.
9,965 1,653 (5,012) 6,606 8.272 1.158 (3,367) 6,063 6,441 420 (1,1 99) 5,662 Net Income.
19,1 26 17,119 15,834 Dividends on Preferred Stock 3,081 2.050 2,050 Earnings Applicable to Common Stock Earnings per share on shares outstanding December 31, 1969..
16,045
$2.45 15.069
$2.30 1 3,784
$2.10 Pividends on Common Stock Cash.
Stock dividends capitalized.
7,470 6,097 6,935 5,179 6,733 5,029 Earned Surplus, beginning of year...........
Cost of redeeming 5N% Series L Preferred Stock 39,283 36,328 34,306 Earned Surplus, end of year.
$ 41,761
$ 39,283
$ 36.328 Notes to Financial Statements Fodoral Income Tsx The Company deducts depreciation for tax purposes on tho basis of guideline rates, including accelerated depreciation. while it provides for depreciation in its financial statements on a straight line basis. Depreciation for tax purposes exceeded that provided on the books by $8.9 million for1969. The provision (or Federal income tax for 1969 has been fuitherreducedby
$800,000 due to the investment tax credit.
Pension Plan The Company's pension plan includes s fullyfunded career plan and a tiusteed plan covering all regular employees. The actuarially computed value of vested benefits for the tiusteed plan as of December 31, 1969 exceeded tho pension fund by approximately
$8.6 million. Tho total cost of these non-contributory plans for 1969 was $3.0 million including funding of past service cost over s period of about 30 years. The Company made voluntary payments to retired employees aggregating
$1.3 million in 1969.
20
1966 S 61.259 40,683 4,889 106,831 59,578 9,1 27 12.451 5,852 87,008 19,823 209 20.032 1965 S 56,584 38,903 5,009 100,496 55,763 8,747 11,538 5,475 81,523 18,973 173 19,1 46 1964 S 54,035 35.585 4,741 94,361 51,254 8,375 10.564 5,520 75.713 18,648 144 18,792 1963 S 51,204 34,097 4,874 90,1 75 49,427 7,917 10.078 5,580 73,002 17.173 137 17,310 1962 S 48,281 32,420 4,842 85,543 46,986 7,579 9,554 5,400 69.519 16,024 186 16,210 1961 S 45,355 30,418 4,718 80,491 44,487 6,598 8,934 6.075 66.094 14.397 138 14.535 1960 S 43,164 28,073 4,740 75,977 42,572 6,242 8,411 5,430 62,655 13,322 276 13,598 5.700 20 (320) 5,400 5.1 63 82 (149) 5,096 4,610 555 (150) 5,015 4,424 381 (163) 4,642 4,423 168 (132) 4,459 3.821 446 (295) 3,972 3.748 207 (226) 3,729 14,632 2,050 12,582 14,050 2,066 11,984 13.777 2.145 11.632 12,668 2,1 45 10,523 11,751 2,145 9,606 10.563 2.145 8,418 9,869 1,956 7,913
$1.92
$1.83
$1.77
$1.60
$1.46
$1.28
$1.20 6,256 4,225 5,840 4,143 5,726 3,949 5.473 2,765 5,091 3,253 4,845 3.1 59 4,701 3,446 32.205 S 34,306 30.801 (597)
S 32,205 28,844 S 30,801 26,559 S 28.844 25,297 S 26,559 24.883
$ 25,297 25,1 17 S 24,883
ROCHESTER GAS AND ELECTRIC CORPORATION Statement Of FinanCial COnditiOn at DeCember 31 (Thousandsof Dollars)
Assets UtilityPlant, at original cost Electric....................
Gas......................
Steam.
Less-Resorvo for Depreciation Electric........................
Gas..
Steam..
Current Assets Cash.
Accounts receivable.
Matorials and supplies, at average cost.
Prepayments.
Deferred Debits Unamortized debt discount and expense.
Extraordinary property losses............
Other..............................
Liabilities Capitalization Long term debt..
Preferred stock.
Common stock.
Premium on preferred stock.
Capital stock expense......
Earned surplus.
Current Liabilities Notes payable Accounts payable.
Customer deposits.
Taxes accrued Interest accrued......
Other.
Deforred Credits Unamortized premium on debt.
Other.
Resorvo Injuries and damages.
1969
$380,797 127,291 14,246 522,334 78,055 24,246 3,752 106,053 41 6,281 6,678 9,820 12,545 384 29.427 1,212 181 1,393 Total
$447,101
$221,677 67,000 95,678 83 (2,448) 41,761 423,751 6,000 7,260 513 2,872 4,264 1,238 22,147 259 70 329 874 Total
$447.1 01 1968
$345.603 120.514 13.906 480.023 74,1 82 21.567 3,681 99.430 380.593 5,754 8,741 11,530 417 26,442 861 732 1,593
$408.628
$200,000 47,000 89,581 83 (2,123) 39,283 373,824 1 9,500 5,341 536 3.797 3,474 1.051 33,699 293 58 351 754
$408.628 1967
$294,588 115,539 13,359 423,486 69,208 19,462 3.651 92.321 331.165 6A58 8.607 8.066 318 23,449 610 232 501 1,343
$355.957
$170,000 47,000 84,401 83 (2.110) 36,328 335,702 6.500 4,439 466 4.568 2.132 1.048 19,153 333 62 395 707
$355,957 22
1966 1965 1964 1963 1962 1961 1960
$258,147 110,912
" 13,116 382,175
$240,671 105.294 12,916 358,881
$229.087 98,911 12,611 340,609
$221,294 91,012 1 2,308 324,614
$211,947 83.491 11,956 307,394
$205,442 77.363 11,906 294,711
$ 1 94,163 70,676 11,384 276,223 64,852 17,452 3,410 85,714 296,461 60,665 15,661 3.203 79.529 279,352 55,764 13,910 2.964 72,638 267,971 51,421 12,290 2.794 66,505 258.1 09 46,813 11,114 2.587 60.514 246.880 42,863 10,165 2.494 55.522 239,189 38,746 8,981 2.338 50.083 226.140 9.1 84 8,084 6.229 350 23,847 7,760 7,1 87 5.985 407 21,339 11,064 6,515 4,593 341 22.513 6,369 5,854 4,541 379 17,143 6,266 5,725 4,554 264 16,809 6,508 5,510 5,471 234 17,723 5,041 5,245 5,601 311 16,198 644 464 350 1,458
$321,766 484 696 227 1,407
$302,098 513 927 222 1,662
$292,146 541 1.1 59 40
'l.740
$276,992 569 1,391 47 2.007
$265,696 594 1,623 82 2.299
$259,211 530 1,410 20 1,960
$244.298
$1 50.000 47.000 79.372 83 (2,1 07) 34.306 308,654
$132,000 47,000 75,147 83 (2.104) 32.205 284,331
$1 32,000 47,000 71,004 83 (2,105) 30.801 278,783
$1 1 6,000 47,000 67,055 83 (2.097) 28.844 256,885
$116,000 47,000 64.290 83 (2.090) 26,559 251,842
$1 1 6,000 47,000 61,037 83 (2,083) 25,297 247,334
$]01,000 47,000 57.878 83 (2,037) 24.883 228,807 4,342 406 4.752 1,736 976 12,212 4,500 4,416 373 4,973 1,602 1,001 16.865 4,590 358 4,930 1,575 946 12.399 8.000 3.962 301 4,663 1.490 860 1 9,276 2,500 3,789 280 4,231 1.394 811 13,005 3,654 252 5,029 1,349 772 11,056 3,500 3,648 239 5,288 1,306 695 14,676 257 40 297 293 31 324 33'l 84 415 237 107 344 269 110 379 301 107 408 333 122 455 603
$321.766 578
$302.098 549
$292,146 487
$276,992 470
$265,696 413
$259,211 360
$244.298 23
Long Term Debt, December 31, 1969 FIRST MORTGAGE BONDS DUE DECEMBER 31 1969 1968 (Thousands of Dollars) 4N%
Series 0 3r/4%
Series J 3/s%
Series K 3/o Series L 2/s%
Series M 3s/s/o Series N 3s/s%
Series 0 4r/s%
Series R
5%
Series S 4)rz%
Series T 4s/s%
Series U 5.3%
Series V 6 t/s%
Series W 6.7%
Series X 8%
Series Y September 1, 1977 March 1, 1969 March 1, 1970 March 1, 1979 August 15. 1980 Juno 1. 1982 March 1. 1985 July 1, 1987 October 15, 1989 November 15, 1991 September 15, 1994 May 1, 1996 September 15, 1997 July 1, 1998 August 15. 1999 8
6,000 15.000 16,677 12,000 6,000 10,000 15,000 12,000 15,000 16.000 18,000 20,000 30,000 30,000 8221,677 6.000 8.323 15.000 16,677 12.000 6.000 10.000 1 5,000 12.000 1 5,000 16,000 18.000 20,000 30,000 6200,000 Capital Stock, December 31, 1969 SERIES OUTSTANDING PREFERRED STOCK 810.000 shares authorized. 670,000 shares outstanding, par value 6100 per share (cumulative)
DECEMBER 31 1969 1968 (Thousands of Dollars) 4%
Series F 4.10% Series H 4%/o Series l
4.10% Series J 4.95/o Series K
4.55% Series M 7.50% Series N 120,000 shares 80.000 shares 60,000 shares 50,000 shares 60,000 shares 100,000 shares 200.000 shares
$ 12,000 8.000 6,000 5,000 6,000 10,000 20,000 9 67.000 12,000 8.000 6,000 5.000 6,000 10,000 6 47,000 COMMON STOCK 8,000,000 shares authorized.
6,541,529 shares outstanding, no par valuo 1969 8 95,677 DECEMBER 31 (Thousands of Dollars) 1968 6 89,581 Now York Stock Exchange Symdol Transfer Agent Rochester Gas and Electric Corporation Uncoln Rochester Trust Company Common Stock-RGS 183 Main Street East Rochester, Now York 14603 Registrar Security Trust Company of Rochester 103 Main Street East Rochester, New York 14604 Principal Office 89 East Avenue Rochester, New York 14604 24 Bond Trustee and Paying Agent Bankers Trust Company 18 Wall Street New York, New York 1001 5 Co-transfer Agent Morgan Guaranty Trust Company of Now York 23 Wall Street New York. New York 10015 Co-registrar The Chaso Manhattan Bank (National Association)
I Chase Manhattan Plaza New York. Now York 1001 5 Annual Meeting Third Wednesday in May
PBIGE WATERHQUsE &Co.
To the Shareholders and Board of Directors of Rochester Gas and Electric Corporation reoo Mrnzowx Towea ttocrrrresnrr teooe February 16, 1970 In our opinion, the accompanying statement of financial condition and the related statement of income and earned surplus present fairly the financial position of Rochester Gas and Electric Corporation at December 31, 1969 and the results of its operations for the year, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Our examination of these statements was made in accordance with generally accepted auditing standards and accordingly included such tests of the account-ing records and such other auditing procedures as we considered necessary in the circumstances.
~]~ A)a~~L SOurCe and DiSPOSitiOn Of FundS (Thousands of Dollars)
Source of Funds Net income...............
Depreciation and salvage....
Sale of bonds.............
Sale of preferred stock......
Sale of common stock......
Proceeds of short term loans.
From other sources.......,.
1969 S 19,126 11,003 30,000 20,000 29,500 1,722 1968 S 17,119 10.832 30.000 42,500 1.549 1967 S 15.834 10.010 20.000 22.500 643 1966 S 14,632 9,635 18,000 1,000 (154) 1985 1964 1963 S 14.050 S 13.777 S 12.668 9.291 9.005 8,321 16.000 4.500 3,000 5,500 (97) 1.255 755 1962 1961 S 11.751 S 10.563 7.996 7.118 15.000 2,500 9,500 (523)
(115) 1960 S
9,869 6.331 10.000 166 7,030 67 6111,351 S102.000 S 68,987 S 43,113 S 27,744 S 43.037 S 27.244 S 21.724 S 42,066 S 33.463 Disposition of Funds Property additions.........
Preferred stock dividends....
Common stock dividends....
Bond maturities...........
Payment of sho~t term loans..
For other purposes.........
S 46,188 3,081 7,470 8,323 43,000 3,289 S 60,060 2.050 6,935 29,500 3,455 S 44.668 2,050 6.733 16.000 (464)
S 26.523 2.050 6.256 5.500 2.784 S 20,549 S 19.435 2.066 2.145 5.840 5,726 11.000 (711) 4.731 217 13.000 7.030 (973) 1,571 (573)
S 19.408 S 15.461 S 20.506 S 20,349 2,145 2.1 45 2.145 1.956 5,474 5,091 4.844 4.701 S111,351 6102,000 S 68.987 S 43.113 S 27.744 S 43.037 S 27.244 S 21.724 S 42.066 S 33.463 25
ROCHESTER GAS ANO ELECTRIC CORPORATION Electric Department Electricity Generated and Purchased-KWH (000's)
Steam.
Nuclear...
Hydro.
Other Generating Purchased-Net.
Total electric energy Electric Sales-KWH (000's)
Residential.
Commercial.........
Industrial..
Other.
1969 2,119.003 30.243 251,254 2,658 1,564,827 3,967,985 1,179,367 932,508 1,1 46,477 321,091 1968 1,979.331 214,489 1,433.736 3.627.556 1.078,434 847.080 1.073,170 281.909 1967 1,964,957 267.486 1.097,991 3.330.434 987,893 764,346 982,270 259.659 Electric Customers at December 31 Residential.
Commercial.
Industrial Other.
Total electric sales 3,579,443 224,365 21,943 1.407 1,903 3,280.593 220.074 21.599 1.395 1,731 2.994.163 214,761 21,136 1,404 1,629 Electric Revenue (000's)
Residential.
Commercial...
Industrial Other.
Electric Expense (000's)
Operation.
Maintenance.
Depreciation..
Taxes-local, state and other.
Federal income tax Total electric customers Total electric revenue 249,618 S
28,981 20,627 17,970 8,672 S
76,250 32.762 6,726 6,71 9 11,627 764 244.799 S
27,509 18,863 16.600 7.757 S
70.729 S
30.375 6.326 6.428 9.898 2,467 238.930 S
26.483 17,187 15,115 7.1 42 S
65,927 S
26,763 6,043 6.172 8,719 4,001 Income from Electric Operations (000's).
Electric Operating Ratio
%%d.
Electric Production Costs (000's)
Steam generation.
Hydro generation.
Other Generation.
Purchased power.
Total electric expense S
58,598 S
17 652 51.8 S
12,128 696 109 6,762 Total electric production costs S
19,695 S
55,494 S
15.235 51.9 S
10,372 652 6.481 4
17,505 S
51,698 S
14,229 49.8 S
9,965 632 5.017 S
15 614 Electric Department Coal (or coal equivalent)
Total cost (000's)..
Fuel used-Tons.
Cost per ton.
Pounds per KWH generated-Net System Net Capability-KW at December 31 Steam.
Nuclear.
Hydro.
Other.
Purchased power Total system net capability Net peak load-KW.
Annual load factor-Net
%%d.
S 8,348 870,576 9.59
.82 460.000 80,000 53,1 00 42,500 219.750 855,350 712,000 63.6 S
7.067 789,499 S
8.95
.80 467,000 53,1 00 219.750 739,850 685,600 60.2 S
6610 766.462 S
862
.78 458.000 53.100 219.750 730,850 618.700 61.4 26
1966 1,797,681 207,714 1,022,980 3.028,375 913.442 699.548 886,556 239,862 2.739,408 209,648 20,663 1,325 1,558 233,194 S
25,150 15.794 13,640 6,675 S
61,259 1965 2.299.1 33 187,743 311.426 2,798,302 848,740 641,091 768.039 216,785 2,474.655 204.109 20.351 1.289 1,531 227,280 S
23,623 14,733 12.048 6,1 80 S
56,584 1964 2,033.900 175,453 325.020 2.534,373 788,376 600.204 689,510 199.325 2,277.415 197,535 19,978 1,318 1,486 220.317 S
22,942 14,002 11,204 5.887 S
54,035 1963 1,369,718 1 53.067 836,708 2,359,493 736,337 549,310 638,201 182,255 2,106,103 191.461 19,576 1,308 1,404 213,749 S
21,676 13,308 10,713 5,507 S
51,204 1962 1,067,231 191,292 931,809 2,190,332 686,522 509,770 595,619 159,014 1,950,925 187,297 19.376 1.332
/
1,343 209,348 S
20,539 12.530 10.236 4,976 S
48,281 1961 1,246,227 200.383 596,464 2.043.074 649,334 467,751 531,432 147,191 1.795.708 183,793 19.363 1,289 1,285 205.730 S
19,643 11,707 9,408 4.597 S
45.355 1960 1,580,219 203,192 120.172 1,903.583 608.728 437,541 507,803 130,767 1,684.839 180.502 19,345 1.209 1.250 202,306 S
18.672 11,199 9,1 35 4,158 S
43 164 S
24,466 5,360 5,922 8,284 3,939 S
47,971 S
13.288 48.7 S
21,900 5.229 5,926 7,711 3.573 S
44,339 S
12.245 47.9 S
20197 4,806 5,735 7.078 3,941 S
41,757 S
12 278 46.3 S
19,416 4,480 5,467 6,776 3,710 S
39,849 S
11,355 46.7 S
18.'102 4,271 5.283 6,421 3,675 S
37,752 S
10,529 46.3 S
16.943 4,092 4,876 5,979 3,868 S
35,758 S
9.597 46.4 S
16,671 4,122 4,637 5,61 8 3,312 S
34,360 S
8,804 48.2 S
8,708 661 4.330 S
13,699 S
9,974 719 1,300 S
11,993 S
8,802 662 1,326 S
10,790 S
6,938 666 2.800 S
10.404 S
6105 644 2.804 S
9,553 6,756 627 1,801 S
9.184 S
8,015 785 611 S
9411 S
5.724 684,631 S
836
.76 S
7,023 869,436 S
8.08
.76 S
6.077 746,286 S
814
.73 S
4,397 507.767 S
8.66
.74 S
3.605 404,908 S
8.90
.76 S
4,268 477,432 S
8.94
.77 S
5,558 593.775 S
936
.75 448,600 53.100
'I 87.500 689,200 592.200 58.4 448,600 53,100 207.500 709,200 541.600 59.0 448,600 53,100 207.500 709,200 503,800 57.3
'48,600 53,100 222,500 724.200 464.200 58.0 448,600 53,1 00 207.500 709,200 433,400 57.7 448,600 53,100 157.500 659.200 406,400 57.4 448,600 53,100 22.500 524,200 388.800 55.7 27
ROCHESTER GAS AND ELECTRIC CORPORATION Gas Department Gas-Therms (000's)
Purchased for reforming and mixing Purchased for resale Other.
Cost of gas per therm.
Gas Sales-Therms (000's)
Residential.
Residential spaceheating.
Commercial..
Industrial.
Municipal.
Gas Customers at December 31 Residential.
Residential spaceheating.
Commercial.
Industrial Municipal.
Gas Revenue (000's)
Residential.
Residential spaceheating.
Commercial.
Industrial Municipal and other.
Gas Expense (000's)
Operation.
Maintenance.
Depreciation.
Taxes-local, state and other.
Federal income tax Total gas available Total gas sales Total gas customers Total gas revenue 1969 45,819 376,234 3,866 425,919 4.96c 17,961 236,530 67,856 65,322 1 5,355 403,024 54,208 127,541 10,570 797 862 193,978 3,710 31,895 7,353 5,152 1,905 50,015 30,590 2,650 3,365 5,092 767 1968 54.256 337.372 1.956 393.584 4.88c 18.770 225.859 60.814 55.833 12.998 374,274 56,553 1 22,666 10.330 783 698 191,030 S
3.858 30,268 6,644 4,480 1,669 S
46.919 S
27,868 2.477 3.471 4.361 1,432 1967 58,773 303.428 1,496 363,697 4.89c 19.084 214,719 54,342 49,589 11,424 349,158 59,009
'I 1 6,465 10.071 768 651 186,964 S
3935 28,722 6,030 3.997 1.507 S
44,191 S
25.878 2.420 2,98'I 3.763 2,269 Income from Gas Operations (000's).
Gas Operating Ratio Fo Gas Production Costs (000's)
Catalytic reformed gas.
Natural gas used for mixing.
Natural gas purchased for resale.
Other Total Daily Capacity Therms at Dec. 31 Mixed gas.
Straight natural gas.
Maximum daily sendout-Therms Dogree Days-Billing Basis
% colder (+) warmer (-) than normal.
Total gas production costs 1,136 1,563 18,179 233 21,111 655,499 3,555,300 Total daily capacity 4,210,799 2,589,919 Total gas expense 42,464 7,551 66.5 6
39.609 S
7310 64.7 S
1,277 1.815 15.953 164 S
19.209 655.499 3,11 8.500 3,773.999 2,703,608 S
37,311 S
6.880 64.0 1,407 1.963 14,282 131 S
17 783 686,703 2,636.600 3.323,303 2,265,324 28
1966 61,211 266,750 1,035 328.996 4.93c 1965 65,054 243.842 1,390 310,286 4.95c 1964 62,266 213.721 696 276,683 5.00c 1963 62,217 199,1 66 706 262.089 5.10c 1962 60,481 179,884 690 241,055 5.34c 1961 56,872 160.157 685 217,714 5.43c 1960 58.195 141.765 668 200,628 5.49c 19,212 198,683 47,671 41.975 9,045 316,586 60,429 111,153 9.758 722 587 182,649 S
3.982 26,680 5,346 3,428 1,247 S
40,683 S
24.033 2,129 2,856 3,490 1,913 S
34.421 S
6,262 64.3 19,650 189,769 43,608 39.820 7.779 300,626 62,732 104,673 9.461 684 551 178,1 01 S
4,100 25,483 4,955 3,265 1,100 S
38,903 22,946 2.077 2,479 3.208 1,902 S
32 612 S
6,291 64.3 20,308 171,686 37.122 36,840 5.775 271.731 65,127 97.520 9,213 667 521 173,048 S
4,205 23,131 4,342 3.030 877 S
35.585 S
20.883 1,947 2.307 2,894 1.579 S
29,610 S
5,975 64.2 20,947 160,339 34,178 33.452 5.240 254.156 67,096 90,159 9,092 583 489 167,419 S
4318 21,981 4,11 3 2.852 833 S
34.097 S
20,023 1,997 2,1 27 2,723 1,857 S
28,727 S
5,370 64.6 19.926 146.420 29.943 30,523 4.481 231,293 69.242 84,175 8,971 479 466 1 63.333 S
4,361 20.778 3.823 2.693 765 S
32.420 S
19.281 1,923 1,977 2,546 1,725 S
27.452 S
4,968 65.4 20,339 136,171 26,785 24,894 4,031 212.220 71,311 78,603 8,798 473 441 159.626 S
4511 19,427 3,522 2,267 691 S
30,418 S
18.099 2.034 1,493 2.397 2.071 S
26,094 S
4,324 66.2 20,717 123,669 23.530 22.304 3,709 193.929 73,640 73,467 8,605 448 418 156,578 S
4.624 17.643 3.144 2.026 636 S
28.073 S
16,695 1,726 1,384 2,256 2,006 S
24.067 S
4.006 65.6 S
1.489 2,045 12,570 108 S 16212 686,703 2.339.400 3,026,1 03 2,305,931 S
1,472 2.181 11,509 195 S
15.357 686,703 2,241,015 2,927,718 2,017,608 S
1,497 2.109 10.1 36 93 S
13.835 686,703 2,055,533 2.742.236 1,699.174 S
1,569 2,116 9,580 93 S
13,358 686,703 1,711,500 2,398,203 1,957.521 S
1,454 2.1 52 9,057 201 S
12.864 686,703 1,647,335 2.334.038 1,809.387 S
1.487 2,044 8,1 47 135 S
11,813 686,703 1.495.106 2.1 81,809 1,481,780 S
1,536 2,086 7,202 193 S
11.017 592,015 1,206,240 1,798.255 1,359.588
-2.3
+3.4
+3.6
-1.7 29
ROCHESTER GAS ANO ELECTRIC CORPORATION Steam Department Steam-lbs.
(000's)
Produced by steam dept.
By-product steam from electric department 1969 1,533,480 2,845,952 Total steam produced 4,379,432 1968 1,471.858 2.825.463 4,297,321 1967 1,311,068 2.803.068 4,114.1 36 Steam Sales Lbs. (000's)
Commercial Industrial.
Municipal.
1,397,458 2,366,194 281,511 Total steam sales 4.045,163 1.298.258 2.359.575 264.717 3.922.550 1,371.825 2,1 18,820 256.534 3,747,179 Steam Customers at December 31 Commercial Industrial.
Municipal.
Total steam customers 359 83 30 472 375 84 26 485 378 82 27 487 Steam Revenue (000's)
Commercial Industrial.
Municipal and other.
Total steam revenue S
2,142 2.979 405 S
5.526 S
1.992 2.916 369 S
5.277 S
2,065 2,588 356 S
5,009 Steam Expense (000's)
Operation.
Maintenance Depreciation.
Taxes-local. state and other...
Federal income tax.
Income from Steam Operations (000's).
Total steam expense S
3,963 647 381 864 (601 )
S 5,254 S
272 S
3,347 658 360 767 (354)
S 4.778 S
499 S
3166 556 357 700 S
4.779 S
230 Steam Operating Ratio %.
83.4 75.9 74.3 Steam Department Fuels Total cost (000's).
Fuel used-Tons.
Cost per ton.
S 2,662 272,257 S
9.78 S
2.380 260.878 S
9.12 S
2178 248,173 S
8.78 30
1966 1,219.260 2.766,083 3.985,343 1965
- 1. 211.427 2.870,207 4.081.634 1964 1,205.718 2,715.476 3,921,194 1963 1,211.883 2.767.11 8 3,979,001 1962 1.293.973 2.523.133 3.817,111 1961 1,354.066 2,469,052 3.823,118 1960 1,359,971 2.379.852 3,739,823 1.364,1 12 2.095.698 256,350 3.716,160 1.435,1 46 2.1 42,61 3 249,220 3,826,979 1,352.855 1.980.571 219.418 3,552.844 1,385.931 1,939.020 200,589 3,525,540 1,319,401 1,952.331 182.973 3,454.705 1,243,331 1,941,406 1 64.906 3,349,643 1.170,655 1,990,039 130.458 3.291,1 52 380 80 28 488 403 81 27 511 426 90 26 542 432 94 25 551 444 95 31 570 461 96 31 588 465 97 30 592
$ ',023 2,517 349 4,889 2.113 2.557 339 5.009 2,027 2.409 305 4,741 2.1 26 2,450 298 4.874 2.075 2.487 280 4,842 1,981 2.479 258 4 718 1,904 2.623 213 4,740 S
3,024 566 349 677 4 616 273 3,070 541 342 619 4,572 437 2,898 523 333 592 4,346 395 2.967 544 323 579 13 4.426 448 2.851 558 319 587 4.315 527 2.844 475 229 558 136 4,242 476 2,897 461 221 537 112 4,228 512 73.4 72.1 72.2 72.0 70.4 70.4 70.8 2.065 242.269 8.52 2.011 244,340 8.23 1.918 232.103 827 2.024 231,196 8.75 2.038 226,427 9.00 1,976 218.847 9.03 2,050 216,466 9A7
Directors ALEXANDER M. BEEBEE" Chairman of the Executive and Finance Committee, Rochester Gas and Electric Corporation LINN B. BOWMAN" Former President, Rochester Gas and Electric Corporation MARCUS E. BUCKMAN Vice President and General Manager, Sodus Fruit Farm, Inc.
JOHN D. COCKCROFT Chairman of the Board, The R. T. French Company WILMOT R. CRAIG President and Chief Executive Officer, Lincoln First Banks Inc.
FRANCIS E. DRAKE, JR.
Chairman of the Board and Chief Executive Officer, Rochester Gas and Electric Corporation M. HERBERT EISENHART" Former Chairman of the Board, Bausch 5 Lomb Inc.
J. WALLACE ELY President, Security Trust Company of Rochester CARL S.
HALLAUER'hairman of the Board, Bausch 5 Lomb Inc.
ERNEST J.
HOWE" Former President, Rochester Gas and Electric Corporation DANIEL G. KENNEDY Partner, Nixon, Hargrave, Devans 5 Doyle R. DEWITT PIKE President, Rochester Gas and Electric Corporation WALTER L. TODD" Partner, Todd Associates WILLIAM S. VAUGHN" Chairman of the Board, Eastman Kodak Company JOSEPH C. WILSON Chairman of the Board and Executive Committee, Xerox Corporation
'Member of the Executive and Finance Committee of the Company 32