ML18227A990
| ML18227A990 | |
| Person / Time | |
|---|---|
| Site: | Turkey Point  |
| Issue date: | 02/07/1977 |
| From: | Florida Power & Light Co |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| Download: ML18227A990 (16) | |
Text
IDO ARS aOEoyxv THOUSANDS) 1976 1975 Revenue $ 4 >189>680 S1,182.644 1 Net Income $ 116,845 $ 145,221 (20)
Earnings per Share $ 2.39 $ 3 48 (31)
Dividends Paid $ 1.56 $ 1.435 9 Customers Year End 1 >840>043 1,772,304 4 KWH Sales Thousands 34>929>541 34,110,898 2 Net Warm Weather Capability Year End - KW 9,740>000 8,927,000 9 Peak Load KW 7,598,000 7,076,000 7 Financing $ 272,740 $ 418,925 (35)
Capital Expenditures $ 469>750 $ 497,233 (6)
GcKXt693 2 Principal Officers 3 Letter to Shareholders 5 The Imperative of Innovation 10 FPL In1976 18 Five-Year Summary 19 Management's Discussion 20 Balance Sheet 22 Income Statement 23 Statement of Changes In Financial Position 24 Schedules 30 Notes to Financial Statements 35 Accountants'pinion 36 Directors GiDK9liM(SQ You are invited to the Annual Meeting of the Sharehotders tobe held onMay10, 1977. A formol notice of the meeting.
together with a proxy statement and form of proxy, wlilbemalledtoeach Shareholder of record on or about April 1, 1977, at which time proxies willbe requested by the management.
On the Cover: The rodionceof the sun symbolizes the downing of a new energy era, For an account of what researchers ore beginning to leorn about solar and other alternate, sometimes exotic, energy torms, see poges tive through nine.
Facing Page: At oceanside fest compound on Virginia Key near Miami, Walter Roynes checks tor corrosive eftects ot soit water. on irritoting source of equipment failure along seaboard oreos in the FPL service territory. Before entering service, materials rx>dergo further reiiobiiilytesting Indoors at FPL loboratoryon Miami Beoch,
my fellow shareholders We begin our second halfwentury as a corporation is claimed as a unique and exclusive possession by amid more challenges thari confronted the these self-styled "guardians of the public Interest."
beleaguered heroine of "The Perils of Pauline." Unlike FPL has been dedicated to and working In the public Pauline, however, we are not lying on the tracks interest for 51 years. Our Company has been waiting for a hero to dash to the rescue. We are providing the energy that makes Jobs possible, meeting our challenges, and must continue doing so, providing the comfort that makes life enJoyable, with our own skills, strengths and efforts.
paying the taxes that make government viable and During this past year we have seen earnings pushed putting investor money to work to earn the return that down In spite of improved efficiency and rigorous makes retirement bearable. We even provide the costwutting. and we have been forced to ask for energy that makes a cleaner. safer environment significant rate relief. We encountered a lengthy and attainable. All this is practical, tangible work In the costly-to our customers, ultimately-delay In public interest. And we'e been doing it for more construction of a second generating unit at St. Lucle, than half a century.
thanks to a minuscule group of Intervenors who forced At FPL we believe "the public Interest" can be reconsideration of an approval already granted. We restated as the long-term best Interest of the faced-and met-the highest summer peak demand customer. After all, the customer ultimately pays for In FPL's history. Then. in January of 1977, we topped everything-either directly or In his alter-ego role as that by generating FPL's all-time record peak during taxpayer. There is no other source, though many who south Florida's coldest spell In years. And we have dream of getting "something for nothing" wish there dealt with all the "normal" challenges and problems were.
of providing a vital service by operating a complex and highly technological business on a vast scale. Because these misguided expectatlons go beyond what is immediately feasible often beyond what Details of particular interest to you about the is even remotely possible-they are already causing challenges of 1976 and our operations follow this disillusionment in our local communities. People who letter. Before you turn to them, however, may I share expected government by some magic to lower prices with you some of my thoughts and concerns' and create jobs see that prices are not going down It Is a truism that abundant and reasonably priced and jobs are not miraculously appearing.
energy is essential for achieving our nation's goals. Even when responsible national and local Yet, as this is written, we still have no coherent government officials tiy to bring these misguided national energy policy. And as we In the energy expectations into the range of what Is possible, they business try to provide the abundant and reliable are hard pressed. They need all the Informed support supply of reasonably priced energy so essential, we they can get. Otherwise they may have to yield to a often find our efforts thwarted by individuals and misled public majority. or a hIghly vocal minority, groups who claim they act not for themselves, but for which may demand and get hasty expedients that "the public interest." actually defeat the true public interest.
We'e heard many new voices raised in "the public We saw a prime example just this past bitterly cold interest" in the last few years. as if they had just winter. It was a classic case of the consuming public discovered a new concept. It often seems that virtue suffering because, at an earlier time, rates were set at
artificially and unrealistically low levels. I refer to the Investor provides capital, the foundation for facilities, natural gas shortage which caused physical suffering equipment and Jobs. The employee provides skills, and economic hardship throughout large areas of energies and time. The customer provides a fair our country. payment for the valuable seivlce received.
Since the mid-1950s. consumer groups claiming they And each leg derives benefits. The customer receives acted in "the public Interest" have exerted Intense reliable electric service whIch makes his Job possible political pressure to keep natural gas rates down in and enriches his life. The employee receives a fair spite of rising exploration and production costs. wage, benefits and opportunity for advancement.
Consumers enjoyed "bargain" rates. The self-styled The Investor receives a fair return for the use of his "public interest" groups rejoiced in their "victory." funds. If any one leg fails, the stool cannot stand.
But while they were rejoicing. investment In Our presentation pointed out that the facilities which developing new sources of natural gas dropped off. make possible electric service for customers and jobs The return on the Investment was simply not for employees must be paid for. And there are only worthwhile. You can't force someone to throw money two possible sources of the necessary funds. The away on a poor Investment-at least, not while we money can be raised from investors. Or It can be still retain some degree of freedom in our country. raised by adding a large extra charge to customers'resent bills.
This winter, the chickens came home to roost. Many natural gas customers could not buy the gas they A recent news item reported that something like this needed because the supply was short. Homes and is being done In Brazil right now in regard to schools in many states were cold. Factories and telephone service. To get a new telephone Installed, offices shut down or reduced working hours. Rates the Brazilian subscriber must put up about S1.000 In were still at low "bargain" levels. But what good is a the form of a purchase of stock. But heavy extra low rate if there's nothing to buy7 When those charges like this would be, at the least, Inconvenient Inadequate rates were set years ago, was the true for most of our customers-and absolutely Impossible public interest served9 Political pressure has kept for many. Obviously It Is In the customer's own best these rates unrealistically low year after year-right up Interest to permit rates whIch yield a competitive to today. Has the true public interest been served9 return so we can build with investors'oney rather We face a similar situation as we present our request than with customers'oney.
for rate relief to Florida's Public Service Commission. On another front, FPL is helping spread education in Failure to permit Justified electric rate Increases may basic economics throughout Rorida. The State look like a benefit to consumers now. But it can Legislature passed a law requiring that "free boomerang as we find It Increasingly difficult to enterprise" economics be taught in the public finance construction of facilities at reasonable cost. schools. But no extra funds were provided for the There is no way to separate the interests of our purpose. FPL took the Initiative in having suitable Investors from the Interests of the consuming public. materials developed...working with economists and As in the natural gas situation, a decision that rejects educators...conducting seminars for classroom the valid and just interests of investors soon rebounds teachers. And we'e helping make It possible for the Legislature's intent to be carried out.
against the true Interests of consumers. It Is essential to put resources from Investors to work In serving the Since the most Important challenges we face include public. That Is the true public interest. widespread lack of knowledge about basic Your management Is actively communicating this economics and the pervading dream of getting message that the long-term best Interest of the something for nothIng, I hope and trust that you will consumer runs right along with that of the Investor. approve of our efforts and will actively present to your Two of our efforts In this campaign will be of special elected representatives the true definition of interest to you. the public Interest-particularly as it applies to energy supply.
As charity begins at home. so too should education.
During 1976, each FPL employee and spouse was Sincerely, Invited to one of a series of Employee Information dinner-meetings. We discussed matters of concern to FPL and our employees. and to our State and Nation.
A major subJect was the relationshIp between investors. customers and employees. Marshall McDonald PresIdent and Chief Executive I drew the analogy between FPL and a three-legged stool. Each leg performs an essential function. The February 7. 1977 F actrig Poge: tnstrumentaticn is monitored by a workmcii cn 32.foot level ot the nearly 200.foot meteorNogicot tower ot the Company's South Dode site.
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Featured throughout this 51st Florida Power & begun phasing out, and a new epoch which, Light Annual Report are photographs of FPL except for uranium, has not been precisely identified.
people at work. These are some of the many FPL But the world is not running out of energy. We people charged with finding new and better know that energy per se exists In abundance.
ways of meeting the energy needs of tomorrow. Neither is the world running out of fuel. We are They symbolize the tremendous challenges which certain there are fuels available to satisfy the must be met in the years ahead, before world's predictable energy needs.
dwindling supplies of fossil fuels disappear.
What we are short of-temporarily, at least-On the occasion of our Company's 50th is the technological expertise needed to convert anniversary, last year's Annual Report focused on available fuel sources into working energy.
the tremendous progress achieved In half a century of operation-progress made possible by In this circumstance, there are three clear spirited, dedicated people. lmperatives. One, we must manage our energy wisely. That means making our gas and oil last Just as last year's publication glanced back as long as possible. Two, we must convert to other through time to mark the closing of one era of basic energy sources for which conversion accomplishment, this report looks to the opening technology already is available. That means coal of another.... and nuclear. Three, we must invent. That means verlapping these two eras are formidable researching vigorously for new, Improved energy O energy-related "crises." There is, on the one hand, an increasing scarcity of certaIn fuels and, on the other, a growing demand for supply systems.
Wise energy management is of paramount importance, especially In the immediate future.
more energy. Simply put, we are consuming more Still, the role of conservation must be viewed In and more of something that we have less and less proper perspective. People tend to consider of-oil and natural gas. conservation an end in its own right, whereas, in Still, some people refuse to believe there is an itself, conservation Is neither an end nor a energy crisis. So long as they can get light at the solution. It Is simply a necessary expedient to flick of a switch or gasoline at the squeeze of a buy time.
nozzle, the problem seems non~xistent to them. merlca will not necessarily go out of And yet the situation is crucial. business when we drain our last barrel of oil.
Compounding this crisis are the everyday Not If a switch Is made in time to our coal emergencies connected with supplying essential and nuclear resources. Our hope ln the near term electric service to a fast-growing region. These Iles with these two fuels which we have in attendant business challenges and problems are abundance. Moreover, we already know how to low on visibility and high on complexity, making use them.
matters still more critical. Nuclear generation, by most estimates, should Today, the world stands In an agonizing period provide about 40 per cent of the electricity between two great fuel epochs-the present fossil produced in this country by the year 2000. But, fuel epoch which, except for coal, already has despite a 30-year record of safe operation,
nuclear progress is stalled repeatedly by FPL research allocation in 1976 to S4.1 million. The seemingly endless debates over such two-year total since FPL joined EPRI is S7.8 million considerations as "How Safe is Safe Enough'" S6.2 million for the industry-wide pool and S1.6 Interminable and costly delays persist ln the U.S., million for Company purposes.
even though we are struggling with one of the FPL's internal R&D work ls aimed at solving short-most vital Issues ever to face our nation. term (up to three years) needs, helping to bring to It Is high time to get on with the work, because fruition the Intermediate-term needs, and technology takes time. Technology. Professor watching and understanding the Romualdas Sviedtys of the Polytechnic Institute of so that they may be adapted and long-term'rograms New York refreshingly sees it as "the bright side" applied as soon as practicable.
of the energy crisis. According to his forecasts, "The comIng depletion of fossil fuel reserves will he story of R&D at FPL,Is an exciting one. filled result in technology that will propel us into a new age." T with Interesting people and fascinating projects. The projects themselves fall into one or more of eight classifications, or strategy areas:
Myriad research and development (R&D) projects lower cost nuclear generation; lower cost fossil now underway demonstrate that FPL and the generation; assured short- and long-term fuel electric utility industry are working, responsibly, supplies; improved system capacity utilizatlon; toward the resolution of energy-related more efficient transmission and distribution; technological problems. Improved internal efficiencies; new income Priorities for R&D at FPL are based, In large sources; technological solutions to measure, on the assumption that no one energy-related problems.
utility can possibly do all that needs doIng, The Importance FPL places on a particular project Therefore, this Company supports financially the Is determined by two basIc factors: (1) what the work of the Electric Power Research Institute (EPRI).
Industry as a whole, with Its combined resources, unds are expended In accordance with can do about a problem and (2) what FPL alone electric utility Industry priorities as established F by the EPRI Board of Directors, with assistance from several committees and project groups. FPL can do about it.
Clearly, there are areas where FPL as an has representation on 17 of these important
.individual Company; despite having a great deal decision-making bodies. of interest. can accomplish little within Its limited
'inancial and manpower constraints. On the other To date, EPRI has authorized 900 R&D proJects, and
. hand, certain jobs are of sufficiently unique those underway in 1976 involved S400 million worth Interest to the Company to warrant Internal R&D of work. attention-frequently through In 1976, the FPL contribution to EPRI rose to nearly association with professional consultants, S3.3 million from the previous year's S2.9 million. educational Institutions and scientiffc foundations.
An additional S820.000-up from S735,000 a year Extent of that involvement may be seen in ago-was retained by the Company for Internally this partial listing of energy research and funded and managed projects, bringing the development proJects which are funded and/or managed by FPL:
~ Solar-Assessing the potential for a solar water heating, air conditioning and home heating industry In the U.S. Assessing the impact solar water heating might have on the FPL system.
Following worldwide solar heating and cooling
. "'evelopments. Designing, constructing and testing equipment which would be used to connect solar power generation facilities to the .
FPL system. Advising the Florida Solar Energy Center regarding architectural, engineering and
'; educational aspects of solar energy development,
'eft:
Geothermal-Sponsoring a study by Dr. Roman Johns of the Florida Institute of Technology C 'V' tn program designed to keep sea grass from impeding
~ flow and thus raising temperatures in Turkey Point cooling system, Keith Dekle cnd Walter Matheny Jr. (aboard airboat) trace currents with phosphorescent dye. An increase of one degree Fahrenheit in intake temperatures can boost operating costs at the plant by as much as S40.000 a month.
Right: Seaweed weighed by Richard Stenberg was grown experimentallyat Harbor Branch Foundation tnc.under contract with FPL, Algae production is a potentially profitable sideline as a means at achieving multiple uses at power plant acreage and discharge water. Seaweed derivatives hove commercial value in the fcod and point industries.
regarding the possibility of using the earth' underground heat as a source of electricity in southwest Florida.
~ Nuclear Fusion-Funding, with the National Science Foundation, the prototype fusion reactor project of Dr. Daniel Wells, physics professor at the University of Miami. Fusion, which is the opposite of fission, combines heavy-hydrogen atoms to make helium atoms. The nuclear energy thus released Is considered a major world hope, for its fuel can be extracted from seawater.
~ Wind-With James Wurth, an FPL customer in Boynton Beach, determining the potential which a small windmill might have for supplying electric power to the Company system under Florida wind conditions. Also assessing the feasibility of a system for producing hydrogen by electrolysis for use In fuel cells to produce electricity.
~ Photovoltaics (use of the sun's light to make electricity)-Designing and installing electrical equipment which would be necessary in order to connect photovoltaic systems safely and reliably to FPL's system.
~ Solid Waste-Exploring the possibility of using steam from a garbage-processing plant to produce electric power.
~ Ocean Thermal Gradient Energy-Exploring engineering problems associated with creating energy from differences in temperature of ocean waters at varying depths (tropical sea temperatures range from 85 degrees at surface to 40 degrees at lower depths). Assisting the National Academy of Sciences in evaluating techniques for using low-grade ocean thermal temperatures to produce electricity.
~ Uranium-Investigating economic considerations of uranium recovery from phosphate sllmes.
~ Coal-Assessing performance of coal-based gas and liquid fuels.
~ Oil-Promoting Industry study of possible role of bacteria to assist In the recovery of oil. shale oil and tar sands.
~ Site-Related Projects Analyzing alternative energy sources at proposed sites. Conducting environmental studies.
~ Aquaculture and Agriculture-Funding a program in which secondarily treated water from a sewage plant undergoes tertiary treatment (nutrient removal) by the growth of algae which have commercial value. Investigating possibilities of using power plant cooling reservoirs to raise fish, oysters, crabs and shrimp.
~ Improved Efficiencie Among the many projects whIch fall into this category are a wide range of In-house tests aimed at reducing power interruptions caused by salt spray corrosion, Above: Solor collector is one of several different types being evaluated by Electric Power Research Institute (EPRI), the research ond development arm ot the utilityindustry, Through membership in EPRI, FPL is participating in the scorch for ways io ccnvett the sun' energy into electricity on o large scale.
Below: Eyebolling a lens to make sure it is in proper olignment Is Ron Hood. technic ion on a fusion reoctor project FPL financially supports ot the University ot Miami. The reactor, designed by Physics Professor Daniel Wells, is making significant strides in achieving the great temperatures ond densities required for energy producticn in a fusion reaction.
quickly locating faults In underground transmission lines and using sea turtles and chemical substances to remove aquatic grass which hampers flow through plant cooling canals.
Much of the work In progress is too technical to be described In great detail. Nevertheless, the objective of that work-Improved electric power service-is significant. For the Rfko effort is yielding evidence that the promise of an energy-secure future is something more than Idle talk.
In this continuing drama, much has been accomplished, much is being accomplished and much remains to be accomplished. Again, the problems are difficult. And quick, easy solutions are wishful thinking. Take the case of solar. for example. Many people feel it's ready. Right now.
hile it is true solar power does have some W immediate applications, they are on an extremely small scale in the form of supplemental household heating. General agreement prevails that the use of solar energy for heating and cooling homes-particularly new structures where the important matters of adequate insulation, proper siting and landscaping can be attended to-will be the most significant application of solar energy for the rest of the century. But most experts expect no more than two per cent of our energy from it by then.
That would help, of course, but It's hardly the full answer.
Using the sun's energy to generate electricity, a necessary step if solar is to make any sizeable contribution in the overall scheme of things, Is many steps into the future.
Granted, the nation is at the pilot-plant stage of development now. But on a large scale, solar power is extremely expensive-about S10,000 per kilowatt of generating capacity, compared with about S1,000 per kilowatt for conventional nuclear power plants.
EPRI, recognizing that solar systems may become economically competitive as fossil fuels increase in scarcity, is committing up to S34 million to solar research and development between now and 1981. Still, those responsible for energy supply are virtually unanimous in agreeing the unproven energy forms are not for this century.
No miracles of quick relief are expected. Not from the sun. Not from the wind. Not from the tides.
Not from fusion.
In all probability, these discoveries Ile in the not-too-distant future, for technology is pressing forward. And the problems associated with the search for light at the end of the energy tunnel are evoking answers that give the American people grounds for optimism-beyond the crises!
Above: During test to develop quick way of finding a fault, or shor 1 circuit, in mderground transmission tines. Mike Hennessey talks with two other FPL engineers spaced more thon hoif a mile aport. After o fault was simu fated in the oil-fiiied pipe cable, the trio measured the speed with which o "fault-caused" pressure wove moved through the oil.
Below: Small dome encased device in the foreground is recording precisely what is reflected in Don the brilliance ot the mid-afternoon Florida sun. The James'ungfosses:
instrument, o pyronometer, measures sotor rodiotion ot the Compony's weather stotionneor the Turkey Point Piont,
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... A YEAR-END REVIEW OF THE BUSINESS AFFAIRS OF FLORIDA POWER 5 LIGHT COMPANY The turnabout from economic recession which The manufacturing sector in Florida has grown generally was predicted for Florida In 1976 got off faster than the United States as a whole for many to a promising enough start early In the year. years. Despite somewhat slower growth in 1976, a But by summertime, it hit the doldrums, prompting renewed commitment to attracting new business R. J. Gardner, FPL vice president for strategic was made by the State. Rorida Power & Light planning, to remark: Company contributed to this effort by forming a "We know that all economic recessions have an new Department of Economic Development. The adjustment period before recovery. Our State also Increased Its effort by doubling Its uncertainty now is over how long that adjustment budget for industrial development activities and period will be. It Is going beyond what we creating several advisory groups, with which anticipated and we must adjust accordingly." FPL participates.
For the Company, 1976 consequently became a The tourist sector continues to Improve. A notable year of adustment as It gauged the winds aspect ls the growing cruise ship business which ofchange. attracted over one million passengers to South The Economy. One constant in the changing Florida In 1976.
scene is Rorida's appeal as a desirable place to Latin America seems to be a significant force In live. During 1976. Florida's population Increase of the Florida economy now and In the future. Every 144,000 was exceeded only by two other states. year more banks open in Miami under the Edge The construction sector showed a sImilar pattern Act provisions for international banking. This, along with Rorlda trailing only Texas and California in with the designation of Port Everglades as a housing starts. Even though Florida ranked third In free trade zone, helps assure that the long-term residential construction activity In 1976, the outlook for the Florida economy Is bright.
construction sector continues to be below levels of the early 1970s. Corporate Affair. In keeping with the rapidly The picture now emerging is a restructured changIng times, FPL is broadening Its horizons economy, less dependent upon construction. with through the pursuit of satellite activities which more basic Inner strength. This Is seen in the fact complement its traditional role as an electric utility.
that the percentage of people employed in The satellite activities enter Into such diverse areas construction In Rorlda went from twice the U.S. as beneficial land management and efforts to average to just slightly above the U.S. average assure adequate fuel supply. They draw in 1976. productively from skills, knowledge. resources and
Facing Page: In cooperation with James Wurth, a customer who erected two windmills ot his home in Boyntcn Beach, FPL is preporing to conduct tests to ossess the potential of wind energy in Florida. Once necessary equipment is instolled. the Company willplug Wurth's two 25-kilowatt generating units into its distr ibuticn grid, facilities to whIch the Company already has Raton, Tamarac, Ughthouse Point, Sunrise and access. Ultimate objective of these activities Is to Gulfstream. Also, franchise renewal negotiations serve in the mutual best Interests of FPL were begun with the City of Daytona Beach.
shareholders, customers, employees and The City Council is exploring the possibility of communities served by the Company. municipal acquisition and operation of the FPL SHAREHOLDERS. The Company's 31,975 common system there upon expiration of the current stockholders of record live in all 50 states agreement In October 1977.
and several foreign lands. More than 35 per ORGANIZATIONALSTRUCTURE. The FPL service area cent are women; 28 per cent are men; Is broken into 32 districts in six divisions: Miami.
and 17 per cent of the accounts are held jointly. Southeast, Eastern, North Central, Northern and The remainder are registered in the names of Western. Divisional offices are located In Miami, foundations, pension funds and similar groups. Fort Lauderdale, West Palm Beach, Cocoa, CUSTOMERS. FPL ended the year with 1,840,043 Daytona Beach and Sarasota.
customers, up 67.739 from 1,772,304 the year In one major division-level management change before. The gain represents an average of 1,300 in 1976, L H. Adams assumed duties as general customers per week. Although substantially below manager of the Miami Division. Effective In March the boom-years pace (FPL one year added 1977, E.G. Brewer became North Central Division 120,000 new customers), the Company continues general manager and T.R. Moffett Jr. Eastern to remain among the nation's leaders ln the Division general manager.
addition of electric customers.
EMPLOYEES. At the end of 1976 the number of Company Operations. Power sales continued to Company employees totaled 9,865. The work Increase in 1976, though at a reduced rate. The force level had been higher earlier in the year but Company sold 34.9 billion kilowatt hours, up subsequently was reduced as a result of FPL's first 2A per cent from 1975 sales of 34.1 billion. As major layoff. Primarily affected by the measure the number of customers rose nearly four per cent, were construction workers. FPL witnessed a slight decline in usage per customer. The average residential customer SERVICE AREA. FPL supplies electricity in most of consumed 10,968 kilowatt hours in 1976, the territory along the east and lower west coasts compared with 11.127 the previous year. Both of Florida, the agricultural area around southern and eastern Lake Okeechobee and portions of figures are well above the national average of 8,270 kilowatt hours.
central and north-central Rorida. Economy of-the 27.650-square-mile area Is based largely on SALES MIX. Residential service accounts for 90 per tourism, manufacturing and agriculture. cent of FPL's customers, produces 52 per cent of Service is supplied to all or part of 35 Florida revenues from energy sales and represents 51 per counties and to approximately 650 communlties- cent of KWH sales. Of the over 1.6 million the largest of which are Miami, Fort Lauderdale, residential customers, approximately half occupy Hollywood, Miami Beach and Hialeah. In 1976, single-family homes and 33 per cent dwell In the City of Vero Beach agreed to sell its electric apartments. Thirty-six per cent of the Company's system, which serves 13,500 customers, to FPL. revenues from energy sales are derived from Sale is pending satisfaction of certain conditions. commercial service and 12 per cent from Franchise agreements were renewed during the other sources.
past year with the communities of Boynton Beach, PEAK DEMAND. The Company met an all-time Greenacres City, Palatka, Cooper City, Boca demand for power two days in a row, reaching a SEIII SALES LSIILIPIISE 1990 1999 1970 1972 197E~
1974
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0 2 4 8 8 10 12 14 HET WARM WEATHER 1937 MWOEHERATIHO 1970 CAPABILITY 1973 1979 .I (THOUBANDs) 1979 1932 peak of 8,606 megawatts the evenIng of January building plan as flexible as possible to 19, 1977. The load, matching winter peak accommodate changing factors which affect projections set for 1980, was prompted by severe system load growth projections.
weather which dropped temperatures Into the With the scheduled completion in 1977 of two teens and resulted In snow flurries as far south as combinedwycle units at Putnam Plant and a Miami. The unprecedented demand-combined second fossil unit at Manatee Plant, net capability with the fact several major units were out of will increase to 10,999 megawatts. The twin units service, some for scheduled maintenance-made at Putnam total 484 megawatts. They combine It necessary to borrow power from neighboring the best features of gas turbine generation with utilities. Company officials also made public those of the conventional steam turbine by appeals for voluntary cutbacks In non-essential recycling their own previously wasted exhaust consumption. A record peak of 8,075 megawatts heat. Manatee No. 2-like Manatee No. 1, the had been set the previous night. largest oil unit in the State-will have The summer peak demand hit a record 7,598 775 megawatts.
megawatts on July 15, surpassing the previous No generating facilities are scheduled for high of 7,235 set in September 1974. completion in the period from 1978-80.
FACILITIES. Florida Power & Light operates nine Also planned are a pair of 775-megawatt oil units power plants, 73 service centers and satellites, at the Martin Plant site for 1981 and 1982 and a 374 substations and 36,610 miles of transmission second 802-megawatt nuclear unit at St. Lucle I and distribution lines. Additionally, there are for 1983. With inclusion of units available for recall emergency interconnections with Florida Power from standby reserve, the system capacity Is Corporation, Tampa Electric Company, expected to reach 13,032 megawatts In 1982 Jacksonville Electric Authority, City of Fort Pierce, and 13.834 In 1983. I City of Vero Beach, City of Lake Worth and the Previously authorized was another plant In DeSoto Orlando Utilities Commission. County, for which no timetable has been To keep ahead of growing demands. FPL's total established, and the South Dade nuclear project.
capacity was expanded from 8,927 megawatts at Steps were taken in February 1977 to cancel the the end of 1975 to 9,740 at year-end 1976. two units proposed for the South Dade site, and The FPL plants and their installed net capability the Company was considering selling the related are: Turkey Point, 2,079.5 megawatts; Port fuel enrichment contract.
Everglades, 1,599.5; Fort Myers, 1,176; Lauderdale, Other adjustments to the construction program 1,162; Sanford, 873; St. Lucie, 802; Manatee, 775; were made In 1976 to reflect the conclusIon that Cape Canaveral, 729; and Riviera, 544. growth will be lower than previously expected.
The Manatee Plant entered commercial service Affected was work on Martin Plant, on four major on October 26. After successfully correcting a transmission projects and on four substatlons In problem with certain fuel assemblies, FPL put the the Western Division.
St. Lucie Plant in commercial operation Nuclear Power. The Company's generating December 21. capability includes two nuclear units at the Turkey The Company also placed seven fossil units having Point Plant having total capability of 1,332 483 megawatts of capability on extended cold megawatts, and one 802-megawatt unit at the standby status at Cutter Plant (three units, 264 St. Lucie Plant.
megawatts), Riviera (2 units, 112 megawatts) and At Turkey Point, the Company is experiencing Palatka (2 units, 107 megawatts). Reactivation problems with the steam generators, and both would require several months. units underwent investigation to determine the Construction Program. Capital expenditures. extent of repaIrs which may be made without which approximated S497 million in 1975 and materially reducing operating output.
S470 million in the year just ended, are expected Capacity of spent fuel storage facilities at all to drop to around 8411 million in 1977, subject three nuclear units is being Increased.
to continuing review. The Company is keeping its The Company also has applied to the U.S.
12
CAPITAL EXPENDITURES Is BILUONS) 19ttb i068 1970 1972
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1974 1970
~ ~ Annuot Cumulative Nuclear Regulatory Commission (NRC) for a amount of power generated by FPL nuclear units.
construction permit for a second 802-megawatt In dollars and cents, that translates Into annual unit at the St. Lucie Plant. Work on the project savings of S53.45 per customer using 1,000 kilowatt began In June 1976, following issuance of a hours of power monthly.
limited work authorization by the NRC In 1975 and The new St. Lucie facility, alone, Is expected to receIpt of site certification from the Florida produce fuel savings of more than 8100 million In Department of Environmental Regulation in May 1977, Its first full year of operation.
1976. By court order, construction was Fuel Supply. Fuel Supply Service Inc. (FSS), a discontinued effective November 8, pending subsidiary of the Company, has entered Into an completion of proceedings to determine if agreement with Getty Oil and Skelly Oil alternative sites were properly considered by the companies to conduct uranium exploration In NRC and other issues. Hearings were conducted Colorado, Utah and New Mexico. The five-year In December 1976 and January 1977.
program is aimed at securing nuclear fuel supply.
PROPORTION OF GENERATION. In 1976. the nuclear FPL has a five-year fuel service contract for St.
portion of FPL's power output stood at 23 per cent, Lucie No. 1, and Is negotiating a contract for a production of over 8.6 billion kilowatt hours. St. Lucle No. 2, with Combustion Engineering.
Fifty-three per cent of the Company's energy Turkey Point's two nuclear units are to be supplied came from residual oil, 22 per cent from natural under a contract, which is the subject of gas and two per cent from distillate oil. litigation, with Westinghouse Electric Corporation.
Despite the much higher capital Investment Additionally. the Company has on hand required to construct them, nuclear plants have or under contract for immediate delivery generated power more economically than fossil plants. Comparative average fuel costs In mills Below: Dade County is scrutinizing the feosibility of operating (one-tenth of a cent) per kilowatt hour In the year o plant which would burn trash and produce steom. FPL, in Just ended were: residual oil, 18.54; natural gas, turn, is investigoting using the steom to produce electric 7.15; and nuclear. 2.05. power. Discussing a scale model ot the proposed facility, which would generate about 70 megowotts while consuming Fuel savings figures for the year show it would obout 3,000 tons ot gorboge doily, are Lorry Puff of the county have taken 14 million barrels of oil to produce the (left) ond Bill Hopgood ot the Company.
.25 .75 1.25 OPERATINO 1966 REVENUE 1968 Is eauoNs) 1972 1974 1976 approximately 1.2 million pounds of uranium. Revenues for the year Increased S7 million over FSS also is In partnership with Amoco Production 1975, reaching S1.2 billion. However, operating Company in a joint exploration venture that expenses rose S32.6 million to S998.4 million.
Involves looking for oil and gas In Central Florida. The increase in revenues was one per cent; In Residual oil has been principally supplied by operating expenses, three per cent.
Belcher Oil, backed by Exxon USA, under a Net Income applicable to common stock in 1976 contract which expires December 31, 1977. was S94 million, of which S33 million was Thereafter, the Company's requirements will be relnvested in the business.
covered by an agreement reached In March 1976 Net utility plant investment was S3.6 billion at the with Exxon, which will supply FPL with a substantial end of 1976, up 12 per cent from S3.2 billion a portion of its projected oil requirements. Terms of year before.
the new contract, which Is for an initial period of The fourth quarter, ending December 31, was three years, give FPL the flexibility to fill its particularly devastating. Earnings fell to 40 cents remaining needs through "spot" purchases or per share compared with 80 cents In the same other contracts. Cost per barrel is tied to the New period the year before. And net income tumbled York Harbor posting price for wholesale distributors. (A succession of eight price hikes to S22.5 million, compared with S35 million In the during the year raised the basic cost of oil by corresponding period of 1975. For the month of more than S2 per barrel. In February 1977, the December, FPL posted a S4.9 million loss, the price of one per cent sulfur residual oil at Port largest in the Company's history and the first since 1941. The 1976 results were adversely Everglades Plant, excluding entltlements, was S14.97 per barrel.) affected by a S13.5 million (plus interest) provisIon for customer refunds stemming from a Florida Coal is being evaluated as an alternative fuel Supreme Court decision which reduced earnings source for future generating units. In June 1976, by 18 cents per share. That order, Issued FPL retained a mining and geological engineering December 22, said the Public Service Commission firm to assist In the effort to evaluate economic had erred In granting a portion of interim rate and logIstic considerations Involved in obtaining relief to FPL in 1975.
supplies.
Rates and Regulation. Citing continuing Inflation, Financial Activities. FPL obtained nearly S273 the Company filed a petition with the Florida million in the capital markets during 1976. More Public Service Commission (FPSC) seeking the than S72.5 million was raised in March through the third general rate Increase in Its history.
sale of three million shares of common stock. The filing, on October 8, asked for S349 million in Another S125 million was obtained In June additional annual retail revenues, based on a through sale of 30-year, 9'er cent first mortgage 9.95 per cent rate of return on a 1976 year-end bonds. Completing the financing program In rate base, which includes an additional S250 October was the sale of 750,000 shares of 8.70 per million of construction work in progress.
cent preferred stock for a sum of S75 million. The The FPSC on November 1 suspended rate S273 million from external sources compares with schedules in the petition. Suspension is a routine S419 million In 1975 when a large amount of debt was repaid. procedural step, giving the FPSC eight months to act on the request. Upon expiration of that OPERATING RESULTS. Higher operating expenses, period, the rates go into effect automatically and Increased interest charges and continued energy subject to refund, pending a final order of conservation by customers were reflected in results the FPSC.
for the 12 months ended December 31, 1976. On November 12, FPL petitioned for partial Interim Net income of S116.8 million was down from relief of S225 million, an amount representing a S145.2 million the previous year, a decline of 20 portion of the S349 million. The motion was filed in per cent. Earnings per share fell to S2.39 from order to give the Company the opportunity to S3.48 a year earlier. earn a 9.04 per cent rate of return which had 14
been established as the minimum of the zone of reasonableness In the Company's previous rate proceeding in 1975.
Hearings on both the full rate Increase request and the interim request, which was increased from S225 million to S235 million based on yearwnd operating results, were conducted in Palm Beach Gardens January 11-25. A one-day public hearing also was held in Miami January 25. On February
- 21. 1977. the FPSC granted Interim relief of S87.9 million. The Company soon afterward announced plans to initiate certain cost-cutting measures, including reductions in personnel, routine maintenance and construction. In connection with cancelling the South Dade project, the Company indicated it would petition the FPSC to allow it to amortize over five years. rather than write off immediately, an estimated SB million of costs associated with the project.
The FPSC has until June 8. 1977. to rule on the full S349 million case.
In other FPSC-related developments during the year, FPL was:
~ directed, starting in February 1977. to collect franchise fees uniformly from all customers, not just those within franchise areas, and to continue showing the charge as a separate billing item.
~ prohibited from disconnectlng service to customers on Friday afternoons, weekends and holidays. The Company is asking the FPSC to reconsider the rule.
~ ordered to implement year-round levelized rates. eliminating seasonal differentials.
Management Actions. Efficiency continued to be emphasized Company-wide, with new measures initiated in the areas of manpower control, quality control, work simplification, operations research and materials control.
Above: Strengthening the link between FPL ond EPRI is a computerized information system providing instontoneous access to information about research work in progress at EP RI ond ot mony of its member utilities. Operating the on-line computer terminol in the Corporate Library is Phyllis Cartwright, assisted by Jean Dingee. Below: Dr.J. Ross Wilcox.
stotf ecologist, supervises many biologicol R&D programs. As FPL representative on the EPRI Environment Tosk Force, he is in the mainstream of the electrical industry research efforts ond communicotes to EPRI special R&D efforts by FPL, such os using bocterialogicol methods for oil desulfurization.
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1.5 YEAR-END 19bb CUSTOMERS 1968 IMIu.ioNS) 1970 1972 1974 1976 Other cost-cutting and efficiency measures import fees on foreign oil: "For our own Included expansion of a hand<elivery billing government to Impose an additional layer of system into much of Southeastern Florida between costs over and above the artificially increased Miami and West Palm Beach. implementation of costs of the oil producing nations, and to do so for waste paper recycling programs and institution stated purposes which have not been achieved, of a pre-sort mail program which is saving the is to ignore the undue hardships placed on the Company more than S3.000 a week in postal fees. citizens of states highly dependent on foreign oil."
Intensive efforts also were continued in 1976 to Also in the area of governmental relations, the combat two pressing problems: difficulties in Good Government Management Association collecting accounts and coping with the rising was formed in accordance with and under rate of current diversion (thett of electricity). A authority of the Federal Election Campaign vigorous collection effort reduced the provision Act. The voluntary organization is for FPL for uncollectible accounts by S2.6 million; newly executive/administrative employees who wish to developed investigative procedures resulted in contribute funds and encourage election of the recovery of S528.664 through back-billing in "qualified, informed and constructive candidates cases of current diversion. for political office."
MANAGEMENTCHANGES. Retiring from the Board Personnel Matters. In order "to communicate of Directors were George W. English, who had personally those concerns affecting all our served since 1962; Robert H. Fite, former president personnel, our industry and the nation."
and chief executive officer who had served since employees, retirees and spouses were invited to 1945; and Benton W. Powell, a director since 1947. a series of 29 informational meetings conducted Elected to the Board in February 1977 were M. P.
Anthony of West Palm Beach, Jean McArthur Davis by Marshall McDonald throughout the FPL system.
of Miami and Robert B. Knight of Coral Gables. Added to the Company's benefit package during R. C. Fullerton and Will M. Preston retire in May the year were improvements in the employee 1977 Fullerton atter 27 years of service as officer, group life insurance program, stockhoiderwpproved director and board chairman; Preston after 11 changes in the Company Pension Plan, a special years service as a director. one-time supplemental early retirement plan and an Employee Stock Ownership Plan (ESOP) for Vice President A. M. Davis Jr. retired atter serving non-bargaining unit employees. FPL and the with the Company since 1963. Vice President W. M. International Brotherhood of Electrical Workers Klein was named to head a new Department of (IBEW) also approved an agreement extending Economic Development. H. J. Dager Jr. was ESOP participation to bargaining unit personnel elected Vice President in charge of power plant effective January 1. 1977. The Company and the engineering, construction and project IBEW have a two-year bargaining agreement management. R. E. Talion was elected Vice which runs through October 1977.
President responsible for land management and commercial activities in the Company's divisions. Stockholder Relations. Nearly 88 per cent of the GOVERNMENTAL RELATIONS. Company leaders Company's common shares were voted at the Increased their participation in governmental 1976 Annual Meeting ln Palm Beach Gardens on
~ ~
affairs in 1976. speaking out on a wide range of May 11. More than 320 shareholders attended the issues pertinent to Company operations. session at which nine directors were rewlected Marshall McDonald, in a congratulatory letter, and pension amendments approved.
urged President-Elect Carter "... to take positive Dividends of 39 cents per share on common stock ~ ~ ~
and immediate steps to make this country less were paid in March, June, September and dependent on foreign oil and to reduce the December, bringing dividends for the year to ~ ~ ~ ~
inflationary pressures on primary energy sources so S1.56-up 12.5 cents over 1975. ~ ~
that consumers wIII be protected." The Company paid Its 124th consecutive quarterly ~ ~ ~
Vice President Tracy Danese appealed to the dividend in December 1976 and declared a Federal Energy Administration to remove federal 39~nt dMdend payable in the first quarter of 1977.
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