ML18230A842

Submitting 1974 Annual Report as Exhibit a

ML18230A842
Person / Time
Site:	Harris
Issue date:	03/19/1975
From:	Carolina Power & Light Co
To:	Office of Nuclear Reactor Regulation
References
Download: ML18230A842 (32)

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EXHIBIT P

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~ 6 THE ATTACHED FILES ARE OFFICIAL RECORDS OF THE OFFICE OF REGULATION. THEY HAVE BEEN CHARGED TO YOU FOR A LIMITEDTIME PERIOD ANS MUST BE RETURNED TO THE'ENTRAL RECORDS STATION 008. ANYPAGE{S)

REMOVED FOR REPRODUCTION MUST BE RETURNED TO ITS/THEIR ORIGINALORDER.

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'9 MARYJINKS, CHIEF CENTRAL RECORDS STATION h

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1974 1973 Percent Change Average Annual Growth Rate 1964-1974 Operating Revenues

'Excluding Nonterritorial Sales Total Net Income Number Shares of Common Stock Outstanding (Year End)

Earned per Common Share Cash Dividends Paid per Common Share Dividends Paid (Common and Preferred)

Kilowatt-Hour Sales (Thousands)

'Excluding Nonterritorial Sales Total Sales System Capability Including Purchases (Kilowatts)

Maximum Service Area Hourly Load (Kilowatts)

Total UtilityPlant (Including Nuclear Fuel)

Construction Expenditures Customers (Year End)

Employees (Year End)

$ 447g477g000

$ 327 598g000

$ 460I977p000

$ 341 206g000 72g271 g000 65g999g000 23g439 000 23g234g000 2.21 2.58 37'5 10 1

(14) 23,607,000 24,076,000 6,206,000 4,771,000 23,229,000 24,082,000 5,645,000 10 4,711,000 Q,252,856,000

$1,957,728,000

$ 381+75,000

$ 358,09'l,000 648,000 632,000 4,742 4@97 15 7

3 8

1.60 1.54 4

56/26,000 43,552,000 29

'l5 14 16 10 11 12 17 28 3

7

'Nonterritorial sales are sales to other electric utilities outside the Company service area.

This Annual Report is submined for information ofshareholders.

ft is nol intended for use in connection withany sate or purchase of, or any offer or soIicitation of offess to buy or sell, securities.

Carolina Power & Light Company, 336 Fayetteville Street, Raleigh, N. C. 27602 COVER: The Skaale Energy Control Center in Raleigh nerve center for the Company's bulk power supply syt tern, became operational in September 1974. The sophis Inside Front Cover COntentg Highlights of 1974 1 The 1974 Operating Revenue Doll' The President's Message 4 Financial 7 Rates 8 Construction

The 1974 Operating=Revenue Dollar Source Residential customers Commercial customers Industrial customers Wholesale customers Nonterritorial sales Other electric operating revenues Use Amount

$156,134,000 88,420,000 135,310,000 46,015,000 13,500,000 21,598,000

$460,977,000 Cents Per Dollar 34/

19 29 10 3

5

'1I00II!

Fuel Deferred fossil fuel expense (credit)

Purchased and interchange powernet Taxes Wages and employee benefits'epreciation Maintenance (except employee wages)

Other operating expenses Compensation to investors for use of their funds (interest, 9g; preferred stock, 2(I; common stock, 6g)

$235,842,000 (35~028p000) 14,494,000 57,631,000 38,031,000 35,544,000 20,180,000 16,929,000 51/

(8) 3 13 8

8 4

4 77,354,000 17

$460,977,000 1100(t

• Does not include $20,288,000 of wages and employee benefits for Company employees that was charged to Construction and other accounts.

ticated control facility, utilizing the latest in digital com-

puters, is expected to contribute to the economy and reliability of the Company's system operations.

9 Operations 11 Ownership 12 Customers 14 People 15 Directors and Officers Transfer Agents and Registrars 16 Auditors'pinion 17 Statement of Income 17 Statement of Retained Earnings

'l8 Balance Sheet 20 Statement of Source and Use of Financial Resources 21 Notes to Financial Statements 26 Statistical Review 28 Territory Served Inside Back Cover Notice of Meeting

The President's Message My fellow shareholders:

The year 1974 was unique for our industry and our Company.

Soaring prices of coal and oil, high interest and preferred dividend rates, mild weather, continuing rate increase proceedings and the revision of construction plans occasioned by difficulty in obtaining new capital were major developments.

Total energy sales decreased slightly from 1973. Plant investment, in-cluding nuclear fuel, increased 15 per-cent to $2.3 billion, total operating revenues increased 35 percent to $461 million and net income was up 10 per-cent to $72 million.

Sales of electricity within our ser-vice area increased 2 percent and re-lated revenues were up 37 percent to

$442 million.

Although net income increased, earnings per share decreased from

$2.58 in 1973 to $2.21 in 1974 as the result of a larger number of preferred and common shares outstanding.

The annual dividend rate on com-mon stock was unchanged at $ 1.60.

We have continuing studies un-derway to project the future electric energy needs of our service area. The most recent forecast is for an annual growth rate of about 4.6 percent for 1975 and 7.7 percent during the next 10 years.

The Company spent $381.4 million for construction in 1974, which re-quired the raising of $311 million of new capital. This construction figure in-cluded over $50 million representing the interest and other capital costs for construction in progress.

To continue our construction program, we expect to spend $343 million in 1975 and $ 1.14 billion for the three years 1975-77. En-vironmental protection measures will account for $ 105 millionofthis amount.

Because of difficulty in obtaining new capital on reasonable terms, we reluctantly have revised our goal for sys-tem generating reserves at the time of peak load from 18 percent to 12 percent and are using this as a basis for our con-struction planning. The lower reserve level will not be reached until after 1978.

The major plant addition in 1975 willbe the first 821,000 kilowatt Bruns-wick nuclear unit, scheduled for opera-tion in the summer. When the second unit ofthe same size is placed into oper-ation in 1976, about 45 percent of the Company's generation in the following 12 months will come from nuclear sources. This willhelp stabilize the price of electricity.

Because of increased operating and capital expenses, the Company filed in October 1973 for a retail rate increase averaging about 21 percent.

Interim increases were granted in 1974, pending final decisions by the Commissions. In January 1975, the reg-ulatory commissions in both states granted permanent rate increases.

In North Carolina, the full amount re-quested was approved with a minor re-structuring of rate schedules to favor lower-use residential customers.

In South Carolina, the Commission ap-proved 83 percent of the amount re-quested with some downward adjust-ment of residential rates for monthly usage below 250 kilowatt hours. The rate increase would produce additional annual revenue of $51.9 million from North Carolina and $9.6 million from South Carolina customers based on the 1974 level of sales.

In February 1974, we were au-thorized to place into effect a fossil fuel adjustment clause on retail sales in both states that enables the Company to re-cover the extraordinarily high prices paid for coal and oil. This fuel clause was in effect during the remainder of 1974.

Pending the outcome of a hearing on the reasonableness of the fuel clause billing factor, the North Carolina Com-mission, effective February 1, 1975, or-dered CPBL and the other two major electric utilities operating in the state to begin billing, for a period of not more than 60 days, only 75 percent of the amount of increased fuel cost applic-able to residential customers.

As a result of the Commission's ac-tion, the Company placed into effect stringent economy measures to offset the revenue lost through the temporary fuel clause rollback. These measures in-cluded an across-the-board salary cut-back, a further revision of construction schedules, suspension of research and development expenditures and deferral of some system and power plant maintenance.

In making this adjust-ment, our main concern was to reduce all expenditures which did not im-mediately affect direct service to our customers and to maintain the financial stability of the Company.

On January 2, 1975, the Federal Power Commission allowed the Com-

pany to begin billing to its wholesale customers a base rate increase and fos-sil fuel adjustment charge, with provi-sion for refund of the amount, if any, which is not finally allowed.

Even though our rates have risen substantially in the past year, our cus-tomers continue to pay less per unit than the national average. During 1974, our average residential customer used 36 percent more electricity and paid 9 per-cent less per kilowatt hour than the av-erage charge nationally.

Coal produced 66.3 percent of the Company's generation during the year, while nuclear accounted for 19.6 per-cent, oil 9.4 percent, hydro 3.8 percent and natural gas 0.9 percent. The Robin-son nuclear unit produced a savings in fuel cost during 1974 of more than $43 millionas compared with the cost offuel to generate the same amount of energy from fossil plants.

The power industry is a victim of inflation to a greater degree than indus-try generally because of the larger amount of capital required for construc-tion of new power facilities and because the world fuel situation is more aggra-vated than other elements of the economy.

Since economic opportunity for everyone is directly related to an ade-quate power supply, we must develop a public understanding that "no power is as expensive as no power at all." If an adequate supply of electricity is to be maintained, it must be priced to cover all costs, including the cost of money.

Electricity generated from coal and uranium must help reduce dependence upon foreign oil.

The nation has entered a new era as to the price and availability of electric-ity. We have a continuing task to help our customers understand why the price is higher and that the alternative to higher prices now is to risk power short-ages in the future.

We are committed to finding the solutions to our energy problems and are proud that utilization of nuclear power by 1976 willplace our Company as far advanced in the nuclear area as the nation expects to be by the year 2000. We see nuclear-generated elec-tricity as a bright spot with respect to availability and price.

I believe we can take justifiable pride in the performance of our Com-pany during the past year. For example, based on the latest figures available, CP8 L's original cost of constructing fa-cilities is 23 percent below the industry average per unit ofelectricity sold and is the lowest of 19 companies generally located in the southeast. Other specific areas of comparison show CP8fL con-sistently performing better than the in-dustry average insofar as cost to deliver a unit of electricity and rates charged are concerned.

We are experiencing trying economic times and our Company has not been immune to the complex factors affecting the economic slowdown.

However, the dedication and loyalty of our 4,700 employees and your con-tinued support will enable the Com-pany to solve its problems and continue to provide efficiently a service that is so vital to our national well-being.

Respectfully submitted by order of the Board of Directors.

Sincerely, Chairman/President March 19, 1975

Financial j4 Sherwood H. Smith, Jr., executive vice-president, administration (left) and Edward G. Lilly, Jr.,

senior vice-president, finance.

RESULTS OF OPERATIONS Net Income, Earnings and Dividends Net income for 1974 was

$ 72,271,000 as compared with

$65,999,000 for 1973.

Earnings per share based on the larger average number of shares outstanding were

$2.21 as compared with $2.58 in 1973.

Continuing the dividend rate estab-lished in September 1973, dividends to-taling $ 1.60 per share were paid on common stock during the year.

Operating Revenues Operating revenues from sales of electricity within the service area during 1974 increased

$ 118.9 million or 37 percent over 1973. During 1973, such revenues increased

$40.7 million or 14 percent over 1972.

Rate increases placed into effect since 1970 resulted in increased revenue of $ 180,760,000 in

1974,

$ 68,091,000 in 1973 and

$53,312,000 in 1972.

Sales of electric energy, excluding nonterritorial sales, increased 2 percent in 1974 as compared with 13 percent in 1973, reflecting the effect of energy conservation, relatively milder weather and reduced economic activity.

Operating Expenses Operating expenses increased 43 percent or $ 116 million in 1974 as compared with a 13 percent increase or

$31.1 million in 1973.

L 4

Cost of fuel for electric generation increased 122 percent in 1974 as com-pared with an increase of 20 percent in 1973 while total kilowatt hours gener-ated in fuel-burning units decreased by

.5 percent in 1974 after increasing 9.7 percent in 1973.

Costs of fossil fuel burned have increased significantly av-eraging 46.5 cents per million Btu's in 1972, 50.6 cents in 1973, and 118.8 cents during 1974.

Deferred fossil fuel expense (credit) represents the net effect of deferring in-creased fuel costs, as defined by applic-able fuel adjustment clauses, until the month the related revenue is billed (ap-proximately two months later).

Total cost of purchased power in-creased 85 percent in 1974 as com-pared with a 32 percent decrease in 1973. The 1974 increase primarily re-flected a 15 percent increase in electric-ity purchased and fuel cost escalation provision in contracts.

The 1973 de-crease was the result of the company's generating a greater proportion of its energy requirements thereby reducing purchased electricity.

Other operation and maintenance expenses reflect the additional person-nel and other costs required for new facilities placed in service, especially for additional steam-electric generating units added at the Sutton Plant in mid-1972 and the Roxboro Plant in Operating revenues:

Residential Commercial Industrial Government and municipal Total from retail operations Sales for resale Total from electricity sales in service area Nonterritorial electricity sales Miscellaneous electric revenues Total operating revenues Operating expenses:

Fuel Deferred fossil fuel expense (credit), net Purchased power Wages and employee benefits Maintenance (except I

employee wages)

Other operation expenses Taxes other than mcome taxes Income tax expense Depreciation Total operating expenses Operating Income Other income Allowance for funds used during construction Income taxescredit Other, net Total other income Gross income Interest charges Net income Preferred dividend requirements Earnings for common stock Average common shares outstanding Earnings per common share Common dividends paid per share See Statistical Review for additional data forthe years 1964 and 1969 through 1974.

J.A. Jones, executive vice-president, engineering, construction and operation (left) and W. J. Rid-out, Jr., senior vice-president, customer services.

".Y<<I

'.<<t',S,'974 (000's omitted)

$156,134 88/20 135/10 16,034 395,898 46,015 441,913 13+99 5,565 460,977 235,842 (35,028) 14+94 38,031 20,180 16,929 40,684 16,947 35,544 383,623 77+54 54,609 16p068 776 71/53 148,807 76,536 72,271 20,672

$ 51,599 23,324 221 1.60 Percent Change from 1973 33%

35 60 38 42 5

37 (1) 22 35 122 85 17 (9)

(1) 42 (20) 12 43 5

43 53 97 46 21 35 10 59 (3) 13 (14) 4 1973 (000's omitted)

$117,559 65,647 84/66 11,632 279,204 43,827 323,031 13,608 4,567 341,206 106,191 7,847 32,391 22,227 17,041 28,706 21,268 31,845 267,516 73,690 38,093 10/77 393 48,963 122,653 56,654 65,999 13,017

$ 52,982 20,554 2.58 1.54 Percent Change from 1972 14)o 13 13 7

13 24 14 (35) 21 1'I 20 (32) 20 15 38 20 (19) 17 13 4

54 57 56 20 36 9

35 4

'15 (10) 4 mid-1973. The first refueling of the Robinson Plant nuclear unit in 1973 in-creased related operations and mainte-nance expenses significantly over 1972.

To reduce costs during 1974, the Com-pany, among other actions,-deferred discretionary maintenance for some of its facilities. Higher prices for equip-ment and material and services of all kinds have further increased these items of expense.

Taxes other than income taxes re-flected increased state and local taxes on increased revenues and plant in ser-vice.

Income tax expense decreased to

$16.9 million in 1974 from $21.3 mill-ion in 1973 and from $26.4 million in 1972. To a greater degree than in 1973, the Company's 1974 pre-tax operating income decreased and related interest charges increased.

Tax expense for 1974 represented 13 cents of each revenue dollar, with 9 cents going to state and local govern-ment and 4 cents for federal taxes. This compared with 15,cents, 9 cents and 6 cents respectively for 1973.

Other Income Other income increased 46 percent in 1974 as compared with a 56 percent increase in 1973. The allowance for funds used during construction, repre-senting amounts capitalized as a part of the original cost of assets being con-structed, increased by $ 16.5 million in 1974 and $ 13.3 million in 1973. The credits to income are substantially equivalent to and offset interest and other capital costs of the construction program which are reflected in the state-ment of income. These increases reflect larger amounts of construction work in progress during the periods.

Income taxes-credit increased by $5.6 million in 1974 and $3.8 million in 1973, re-flecting primarily the increasing tax de-ductible interest charges applicable to the greater amount of funds invested in facilities under construction.

Financing and Construction Construction expenditures during 1974 totaled $381 million.Ofthis, $303 millionwas forgenerating facilities, $28 millionfortransmission and $50 million for distribution and general facilities. In addition, nuclear fuel expenditures for 1974 totaled $39.9 million.

In February 1974, the Company sold 650,000 shares of Serial Preferred

Stock,

$8.48 Series; in

May,

$125,000,000 principal amount of First Mortgage Bonds, 974% Series due 2004; and in December, the Company sold

$27,650,000 principal amount of First Mortgage

Bonds, 11t/a%

Series due

,,',ELECTRIC OPERATING REVENUES (Millionsof Dolfsss) 1964 1133

'65 122.0

'66 134.9

'67 146.7

'68 170.0

'69 187.1

'0 204.8 255.6 NET INCOME (Millionsol Oolfsrs) 1964 19.6

'65 22.0

'66 23.3

'67 25.0

'68 26.0

'69 27.4 70 24.8 71 378

'72 307.1 341.2 461.0 74 608 66.0 72.3 1994. In June 1974, the Company, for about $44.5 million, assigned its rights to and leased back the eleven internal combustion turbine generator units and related equipment being constructed at its Darlington County Plant.

In De-cember the Company sold for approximately $47.6 millionand leased back certain nuclear materials.

Additional funds for construction and for other corporate purposes were obtained primarily from an increase of

$ 103 million in short-term notes pay-able, from the recovery of capital through depreciation and amortization totaling $45.4 millionand from earnings retained and invested in the business of

$ 14 million.

The Company's construction pro-gram for 1975 through 1977 is esti-mated to require

$ 1.14 billion with

$343 million of this amount budgeted for 1975.

Tax Status of Common and Preferred Dividends Dividends paid to common and preferred shareholders during 1974, under existing Internal Revenue Service regulations, constituted a return ofcapi-tal. For corporate book purposes, divi.

dends were paid from retained earn-ings; but, because the tax records kept in accordance with IRS definitions of de-preciation, taxable income and earninf*.s and profits did not reflect any accumu-lated "tax basis" profits, such distribu-tions were not taxable to the recipient as taxable dividend income. The amounts of such dividends should be deducted from the cost basis of the stock so that when the shares are sold, the capital gain or loss may be properly computed.

Capitalization The Company's capitalization at December 31, 1974 was $ 1,870,678,-

303, consisting of 53.percent first mort-gage bonds, 29 percent common stock and retained earnings, 15 percent pre-ferred stock and the remaining 3 percent a six-year promissory note.

Period 1973First Quarter Second Quarter Third Quarter Fourth Quarter 1974First Quarter Second Quarter Third Quarter Fourth Quarter Other preferred stocks are PRICE RANGES AND DIVIDENDS PAID PER SHARE COMMON AND PREFERRED STOCK Common Stock N. Y. Stock Exchange American Re re Prices Dlvld nds Re

~HI h Low Paid

~HI h

$303/e

$24'/>>

$.38

$72'/2 27'/>>

24

.38 72 257/e 21 1/2

.38 70 25'/e 19

.40 72'/2 23'/>>

20

.40 66'/2 193/>>

137/e

.40 61'/>>

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11'/e

.40 56'/>>

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40 52'/2

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not actively traded. Regular quarterly dividends have been paid

$5 Preferred Stock Stock Exchange rted Prices Dividends Low Paid

$69

$ 1.25 65/>>

1.25 61 '/2.

1.25 60 1.25 60 1.25 55 1.25" 50 1.25 46 1.25 on all preferred stocks.

COMMON STOCK

~D(videndsPaid per Share I

CONSTRUCTION EXPENDITURES (Millionsol Dollars) 11,146 11,289 11r488 11,584 11,61 6 11,920 12,934 14,776 17,814 20r554 23r324 1964 65 70 71 72 73 Parnlngs per Share 51.62

.80

.88

.91

.98

.05 86

.97

.21 vAverage Shares Outstanding (ln thousands)

Adjusted lor a 2.(or 1 stock split ln 1964 2A)6 f

2.2 3.9 98 67 767 73.1 9

97.1 66.1 38.4

~Projected 3178 58.1 381 4 42dj

'65.1 435.0 Rates The continuing increase in costs in almost every area of the Company's op-erations required that the Company ob-tain rate relief in 1974.

On October 29, 1973, applications

'were filed to increase rates for retail ser-vice by approximately 21.25 percent. A series of interim rate increases placed into effect during the first half of 1974 brought the amount of increased rates being collected on June 1 to 18 percent.

For service rendered on and after October 1, 1974, the full amount of the requested increase was placed into ef-fect on North Carolina retail service awaiting final commission action. The charges for service after October 1

under the requested rate were not sub-ject to refund.

On January 6, 1975, the North Carolina UtilitiesCommission issued its order allowing the requested increase with certain modifications of the resi-dential rate schedules that the Company had sought to place into effect. On January 15, 1975, the South Carolina Public Service Commission issued an order allowing an 18.3 percent increase rather than the requested 21 percent in-crease, with the full difference reflected in the rates for the first 250 kilowatt hours of monthly usage by the residen-tial customer.

Because of rapid fluctuations in the price offossil fuels, the Company sought and obtained during the year authority to place into effect a fossil fuel adjust-ment clause applicable to all kilowatt hours sold in metered retail service. The clause became effective on February 6, 1974, subject to final determination by the state regulatory commissions.

On December 19, 1974, the North Carolina UtilitiesCommission issued an order approving the fossil fuel clause and the revenues collected under it through September 30, 1974.

On January 15, 1975, the South Carolina Public Service Commission issued an order approving a similar fossil fuel ad-justment clause.

The North Carolina Utilities Com-mission set hearings for January 30, 1975 to determine whether the fossil fuel adjustment clauses used by the three major utility companies in North Carolina were being properly applied and whether the companies have used reasonable fossil fuel procurement prac-tices. After two days the hearings were continued until February 18. They were concluded February 26.

On February 3, 1975, the Commis-sion ordered utility companies in the state to collect from retail residential customers only 75 percent of additional fuel cost above base rates under the fos-sil fuel adjustment clause. The order was effective February 1 fora period ofup to 60 days.

On July 1, 1974, the Company re-quested the Federal Power Commission to authorize an increase in the rates for sales at wholesale to municipalities, pri-vate utilities, and rural electric coopera-tives and to apply a fossil fuel adjust-ment clause to the wholesale sales. The FPC allowed the proposed rates and ad-justment clause to become effective, subject to refund, on service rendered on and after January 2, 1975. The in-crease will produce additional annual revenue of $40 million based on the 1974 level of sales and fossil fuel costs.

Mearings are scheduled to begin in April 1975.

Construction New Facilities Nine of the 11 Darlington internal combustion generating units came on line during the latter half of 1974. All units are expected to be in service by the summer of 1975.

The Skaale Energy Control Center began operation in September.

This modern facility automatically schedules, monitors and controls the flowofelectricity across the Company's service area and to and from neighbor-ing companies.

Future Generation Additions Revised energy forecasts, coupled 8

with the unavailability of capital on reasonable terms, caused the Company to make several major revisions in its construction plans. The reductions re-lated principally to plants scheduled for service in 1979 or later.

On December 27,

1974, the Atomic Energy Commission issued an operating license for the Brunswick Nuclear Power Plant. This license en-abled the Company to proceed with ini-tial fueling of the first unit and subse-quent preliminary testing. With the ad-dition of this nuclear unit, the Company expects about 23 percent of its total generation in 1975 to come from nu-clear power. The second 821,000 kilowatt Brunswick unit is expected to go into operation in 1976.

Transmission lines Authorized Transmission line construction au-thorized for 1975 and subsequent years includes 111 miles of 500,000 volt line, 1,040 miles of 230,000 volt line and 178 miles of 115,000 volt line.

Environmental Matters During 1974, CPAL spent nearly

$31 millionto construct facilities to pro-tect the environment of the Carolinas.

Of this, $21.4 millionwas for air quality control devices and

$9.6 million for water quality control installations.

Electrostatic precipitators, designed to remove more than 99 percent of the solid matter from stack emissions, were placed into service during 1974 on six coal-burning generating units.

On July 8, the Company entered into a stipulation requiring the installa-tion of natural draft salt water cooling towers at the Brunswick

Plant, scheduled for completion by May 1, 1978. Construction and related costs are expected to be about $72 million.

Expenditures for environmental protection equipment at new and exist-ing plants through 1977 are estimated at

$105 million. Of this, $33 million is ex-pected to be spent in 1975: $ 18 million at the Brunswick Plant and Roxboro Unit 4 and

$ 15 million at existing generating facilities.

Projects scheduled for completion during 1975 include installation of four additional electrostatic precipitators and modifications to circulating water systems at the Cape Fear and Weather-spoon plants.

Operations Total energy requirements for the system during 1974 were 2S.6 billion kilowatt hours. Of this total nearly 0.5 billion kilowatt hours were sold to utilities outside the service area. System load factor was 60.2 percent as com-pared to 59.9 percent in 1973. At year' end, system capability, including long-term contract purchases from other utilities, was 6,205,500 kilowatts.

Total Company generating capacity was 5,925,500 kilowatts. Of this 64.9 percent was from 7 steam electric plants burning fossil fuels, 11.8 percent from the Robinson nuclear unit, 19.7 percent from 31 internal combustion turbine generators and the remaining 3.6 per-cent from 4 hydroelectric plants.

Total energy produced came from the following fuel sources:

66.35 per-cent coal, 19.61 percent nuclear, 3.75 percent hydroelectric, 8.00 percent re-sidual oil, 1.41 percent No. 2 oil and 0.88 percent natural gas. Percentage of residual oil used was down from last year because of Federal Energy Office allocations.

During the year, 6 million tons of coal were burned, 41 percent having been received under long-term con-tracts. The Company expects to receive approximately 51 percent of its coal re-quirements for 1975 from long-term agreements.

Peak Loads A new peak load for the system was reached on August 28 when customer demand was 4,771,000 kilowatts. A daily use record was set on August 29 when the total kilowatt-hour demand was 92,838,000. The previous high of 90,807,000 was on August 30, 1973.

A winter peak of 4,261,000 kilowatts was recorded on December 10, 1974.

Energy conservation, milder weather and reduced economic activity of the Company's customers during 1974 resulted in only a slight increase in electric usage. The increase in peak load was modest compared to previous years.

Reliability Groups CP&L continues as one of the 30 companies in the Southeastern Electric Reliability Council (SERC). This mem-bership includes all power suppliers with generating capacities of at least 25,000 kilowatts. The Company is also one of seven power systems in the Virginia-Carolinas Reliability Group (VACAR).The principal purpose of both groups is to improve system reliability for member companies.

Long-Term Coal Supply The Company has entered into a joint venture with Pickands Mather 9 Company for the development of a coal mining property in Pike County, Ken-tucky. The mine, which is expected to begin production in 1977, will furnish 800,000 tons oflowsulfur coal annually for the No. 4 unit of the Roxboro Plant.

SERVI'CE AREA PEAK LOAD

-(Thousands of tNosratts)

I TOTAL UTILITYPLANT iM80ons of f)o)tars)

'964

'65

'68 749

~ 5uInnrer

,184 2 445 2,834 8

'66~7 0

'68 731.5

~69 171

,484

,625

,119 j11

,771 I70 827.0 1 242.9 1

718 1 957.7 2 252.9 FUEL EXPENSE iAIIfueb es burned)

Cents Per MillionBTU 1964 28,07

~I65 26.99) 28.74

'68 29.67

'69 31.48 72

'73 42.09 44.91 4457 6,58

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Ownership Distribution of Stock Ownership (Common and Preferred Stock Combined)

The Carolinas Elsewhere.....

Totals......

Shareholders Number Percent 32,296 47.71 35,392 52.29 67,688 100.00 Shares Number Percent 6,51 7,01 7 24.74 19,828,961 75.26 26,345,978 100.00 The total number of shares and shareholders increased during the year as a result of the issuance and sale of 650,000 shares ofSerial Preferred Stock,

$8.48 Series in February.

At the end of the year there were 52,787 holders of common and 14,901 holders of preferred stock, or a total of 67,688 shareholders compared with 59,986 at the end of 1973. The percen-tage of those living in the Carolinas in-creased from 46.06 percent in 1973 to 47.71 percent at the end of 1974.

In addition to shareholders indi-cated by these statistics, several thousand shareholders own shares which are held by banks, stockbrokers, investment trusts or nominees.

At the 1974 annual meeting, more than 86 percent of the total shares out-standing were represented in person or by proxy.

The largest beneficial shareholder at the end of 1974 had less than two percent of the shares outstanding.

Dividend Reinvestment Service About 3,000 shareholders are par-ticipating in the Dividend Reinvestment Plan initiated by the Company in 1973.

Under the plan, Company common or preferred dividends may be automati-cally reinvested in additional shares of common stock.

The program is being administered by North Carolina National Bank and any questions regarding participation should be directed to NCNB, Dividend Reinvestment Service, Post Office Box 120, Charlotte, North Carolina 28201.

Customers Sales within the service area amounted to 23.6 billion kilowatt hours of electricity in 1974 compared with 23.2 billion in 1973.

During the year the number ofretail customers served increased 2.5 percent to 648,253. Power for resale is supplied to 18 Electric Membership Corpora-tions, 24 municipalities and 2 privately owned utilities. These resale customers used 5 billion kilowatt hours in 1974, which was 21 percent of the total Com-pany energy sales.

At the end of 1974, 21.3 percent of residential units served by CP8rL were all-electric. Similarly, about 23 percent of commercial and 12.5 percent of in-dustrial customers have total-electric facilities.

Residential The Company's 550,128 residential customers, representing 84.9 percent of the Company's total customers, ac-counted for 33.9 percent of the operat-ing revenues for 1974. Average annual consumption per customer during 1974 was 10,861 kilowatt hours, about 36 percent more than the natiooal average.

Commercial The Company's 93,293 commer-cial customers represented 14.4 percent of the total retail customers and pro-duced 19.2 percent of operating reve-nues.

Average annual usage by commer-cial customers declined 1,163 kilowatt Average Price Per Kilowatt Hour Paid by Residential Customers (1974 and 1973)

(Prices shown are averages for the systems of companies which serve these cities)

Cents Per Kilowatt Hour 1974 1973 7.70 5.20 5.50 3.42 5.06 3.57 4.80 3.40 4.18 2.82 3.99 3.06 3.67 2.63 3.42 2.17 3.06 2.29 3.04 2.32 2.98 2.01 2.89 2.27 2.74 2.30 2.69 2.30 2.64 1.98 2.63 2.35 2.63 2.31 2.61 2.08 2.55 2.02 2.53 2.01 2.52 2.05 2.48 2.02 2.44 2.08 2.37 2.06 Place New York, N. Y.

Newark, N. J.

Boston, Mass.

Philadelphia, Pa.

Nesv Haven, Conn.

Hartford, Conn.

Washington, D. C.

St. Petersburg, Fla.

Columbia, S. C.

Richmond, Va.

lackson, Miss.

Miami, Fla, Tampa, Fla.

Lexington, Ky.

CRQE, Fairmont, W. Va.

Covington, Ky.

CharlotteN. C.

Roanoke, Va.

Guifport, Miss.

Ashland, Ky.

Atlanta, Ga.

Birmingham, Ala.

Pensacola, Fla.

hours in 1974 to a level of 37,961 kilowatt hours.

Industrial The Company's 3,237 industrial customers used 8.3 billion kilowatt hours in 1974, which represented an increase of 4.9 percent over 1973, and accounted for 29.4 percent of CP&L's operating revenues.

In 1974, expenditures an'nounced for new and expanded industries in the CP8 L service area totaled $658.9 mil-lion, topping the previous one-year high of$542 millionestablished in 1971. The 1974 announcements are estimated to provide 13,100 new job opportunities with an annual payroll of $85.5 million.

Customer Relations Customer reaction to the rapidly ris-ing price of electricity has been pro-nounced and, at times, vocal. Realizing that one means of creating better public understanding is to provide customers with a continuing flow of information, the Company undertook during the year a system-wide training of customer ser-vice personnel to help them communi-

• cate effectively to customers the com-plex factors affecting the price of elec-tricity.

The Company's communications efforts emphasized the necessity of pric-ing service to cover fullythe cost of pro-viding it, and centered on the four basic areas of escalating costs: fuel, construc-tion, capital, and environmental protec-tion.

AVERAGEANNUALKILOWATTHOUR SALES TO RESIDENTIAL CUSTOMERS AVERAGE PRICE PER KILOWATTHOUR TO CP&L RESIDENTIAL CUSTOMERS AND THE CONSUMER PRICE INDEX 171.8 1964 65

'66

'67

'68

'69

'70 6 319 6 620 7 093 7 454 8 290 9 027 9 794 10 205 10 293 11 276 Price Index (19$7-$9>>t00)

CP81 (lectric(ty 100 82A 154.8 132.7 (2.644) 10,861 1957 59

'61

>63

't>9

'7 1

'73 '74

'69 70

>71 73 48,442 58>1 89 71,879 86,953 TOTAL-ELECTRIC RESIDENTIAL UNITS (Cumu4tive Total) 1964 3,533

'65 9,046

'66 24,813

'67 31>584

'68 40>234 106>525 117305 ENERGY SALES BY CLASSES within rervlce area (Millionrol Kilowatt Itourr) 1964 I

'65 I

'67 I

'68.

'69 I

'70 I

'71

'72 73 I

74 I

~ Rerldentlal

~ Commercial 8/59

~ tndurtrlal 9,707

~ Other 15,617 17@02 18,861 20,517 23,229 23,607

People Management Changes In December the board of directors elected Sherwood H. Smith, Jr. execu-tive vice-president administration, W.

E. Graham, Jr., vice-president and gen-eral counsel, and M. A. McDuffievice-president.

Smith, who will continue to func-tion as a group executive while relin-quishing the responsibilities of general counsel to Graham, came to CP&L in 1965 as an associate general counsel.

He was elected senior vice-president and general counsel in January of 1971 and named to the board of directors in March of that year. Smith received his A.B. and J.D. degrees with honors from the University of North Carolina where he was a Phi Beta Kappa, Morehead Scholar and editor of the Law Review.

Graham, after serving as a judge of the North Carolina Court of Appeals, joined the Company in 1973 as a vice-president and senior counsel.

He re-ceived his A.B. degree in economics from the University of North Carolina and was graduated with honors from the U.N.C. School of Law in 1956. He en-tered private practice in 1957 and was appointed to the bench in 1969.

McDuffie,who has been associated with CP8 L construction projects since 1948, came to CP8L in 1970 from EBASCO Services, Inc., a construction firmwhich has builta number ofCP&L's plants.

He was graduated from North Carolina State University in 1948 with a B.S. degree in civil engineering.

W. E. Graham, Ir.

M. A. McDuffie Employees At the end of 1974, the Company had 4,742 employees compared with 4,397 employees in 1973. This increase in employees primarily reflects two as-pects of the Company's operations: ad-ditional technical people to meet the requirements of nuclear regulatory bodies in the licensing and operating of nuclear power plants, and the use of in-company personnel rather than con-sulting firms in the management ofcon-struction projects.

CP&L continued to emphasize the development of its human resources.

During the year, more than 900 em-ployees from all levels of the organiza-tion participated in 11 different courses and seminars designed to upgrade job performance. In addition, the Company through its Educational Assistance Pro-gram continued to assist employees in pursuing academic and technical studies aimed at increasing on-the-job competence and efficiency.

CP&L maintained its record as one of the safer utilities in the country. Em-ployees of CP&L set an all-time safety record by completing 9,072,525 man-hours with only 11 lost-time injuries for a frequency rate of 1.21 lost-time in-juries per millionman-hours, which sur-passed the old record of 1.24 established in 1973. As a consequence, CP&L re-ceived the top safety award from the Southeastern Electric Exchange in the category of electric utilities having 3,000 or more employees.

CP&L also placed first in vehicle safety with a fre-quency rate of 5.20 accidents per mil-lion miles driven.

The Company continued to de-velop its long-standing policy of provid-ing equal employment opportunity.

Directors Officers AtJanuary 1, 1975 Year shown in parenthesis indicates begin-ning of period of service as a director RAYMOND A. BRYAN, Chairman of the Board, T. A. Loving Company, Goldsboro, N. C. (1957)

DANIELD. CAMERON, SR., President, At-lantic Telecasting Corporation, Wilming-ton, N. C. (1970)

FELTON J. CAPEL, Regional Manager, Cen-tury Metalcraft Corporation, Southern Pines, N. C. (1972)

FULTON B. CREECH, President, Creech Lumber Company, Sumter, S. C. (1946)

E. HERVEY EVANS, Farmer, Laurinburg, N.

C. (1946)

SHEARON HARRIS, Chairman/President of the Company, Raleigh, N. C. (1961)

L. H. HARVIN, JR., President, Rose's Stores, Inc., Henderson, N. C. (1958)

KARL G. HUDSON, JR., Executive Vice President and General Manager, Hudson-Belk Company, Raleigh, N. C. (1967)

J.A. JONES, Executive Vice Pr'esidentof the Company, Raleigh, N. C. (1971)

EDWARD G. LILLY,JR., Senior Vice Presi-dent ofthe Company, Raleigh, N.C. (1971)

SHERWOOD H. SMITH, JR., Executive Vice President ofthe Company, Raleigh, N.

C. (1971)

HORACE L. TILGHMAN,JR., Real Estate and Investments, Marion, S. C. (1961)

JOHN B. VEACH, Chairman of the Board, Bemis Hardwood Lumber Company, Asheville, N. C. (1958)

JOHN F. WATLINGTON,JR., Chairman of the Board, Wachovia Bank & Trust Com-pany, N.A., Winston-Salem, N. C. (1970)

AtJanuary 1, 1975 SHEARON HARRIS President J. A. JONES Executive Vice President (Group Executive)

SHERWOOD H. SMITH, JR.

Executive Vice President (Group Executive)

EDWARD G. LILLY,JR.

Senior Vice President (Croup Executive)

W. J. RIDOUT, JR.

Senior Vice President (Group Executive)

WILLIAME. GRAHAM, JR.

Vice President and General Counsel SAMUEL BEHRENDS, JR.

Vice President E. M. CEDDIE Vice President WILLIAMB. KINCAID Vice President M. A. McDUFFIE Vice President DARRELL V. MENSCER Vice President ALBERT L. MORRIS, JR.

Vice President J. R. RILEY Vice President R. S. TALTON Vice President EDWIN E. UTLEY Vice President J. L. LANCASTER, JR.

Secretary ROBERT M. WILLIAMS Assistant Secretary JAMES S. CURRIE Treasurer J. R. POWELL Controller C. D. MANN Assistant Treasurer Registrars Transfer Agents For Common Stock:

Wachovia Bank & Trust Company, N.A., Winston-Salem, N. C.

Bankers Trust Company, New York, N. Y.

For Preferred Stock:

Wachovia Bank 8 Trust Company, N,A., Winston-Salem, N. C.

For Common Stock:

First-Citizens Bank &Trust Company, Winston-Salem, N. C.

Morgan Guaranty Trust Company of New York, New York, N. Y.

For Preferred Stock:

First-Citizens Bank &Trust Company, Winston-Salem, N. C.

Auditors'Opinion To the Board of Directors and Shareholders of Carolina Power & Light Company:

We have examined the balance sheet of Carolina Power 5 Light Company as of December 31, 1974 and 1973, and the related statements of income, retained earnings and source and use offinancial resources for the years then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

As discussed in the next to last paragraph of Note 5, the Company has eliminated from its authorized construction budget five proposed new generating units in connection with which approxi-mately $ 13 million (including $ 6 million land costs) had been expended. Additionally, the Company willincur costs, the amounts ofwhich are presently undeterminable, arising out of contracts related to the units. The Company will seek regulatory approval to allocate any charge-offs related to the units over a period ofyears and to recover them through rates. Should such approval not be granted, results of operations for 1974 would be adversely affected. The ultimate accounting and disposition of these matters are not presently determinable.

As discussed in the last paragraph of Note 5, at December 31, 1974 the Company had billed approximately $30,444,000 since September 30, 1974 under provisions of a fossil fuel adjustment clause and had deferred approximately $29,500,000 of fossil fuel cost to be billed to customers in January and February 1975. Such amounts are subject to regulatory review and approval and the amounts billed may be subject to refund with interest to the extent not allowed by the appropriate regulatory commissions.

The ultimate accounting and disposition of these matters are not presently determinable.

In our opinion, subject for 1974 to the effect, ifany, of the final determination of the uncertainties described in the preceding two paragraphs, the financial statements referred to above present fairlythe financial position ofthe Company at December 31, 1974 and 1973, and the results of its operations and the source and use of its financial resources for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.

Raleigh, North Carolina February 13, 1975

Statement of Income FOR THE YEARS ENDED DECEMBER 31, 1974 AND 1973 OPERATING REVENUESElectric (Notes 5 and 6)..

OPERATING EXPENSES:

Fuel for electric generation Deferred fossil fuel expense (credit) (Note 5)

Purchased electric power.

Other operation expenses Maintenance Depreciation Taxes other than on income Income tax expense (Note 4)

Total operating expenses OPERATING INCOME.

OTHER INCOME:

Allowance for funds used during construction Income taxes credit (Note 4).

Other net Total other income GROSS INCOME INTEREST CHARGES:

Long-term debt Other.

Total interest charges NET INCOME PREFERRED STOCK DIVIDENDREQUIREMENTS EARNINGS FOR COMMON STOCK AVERAGE COMMON SHARES OUTSTANDING EARNINGS PER COMMON SHARE Statement of Retained Earnings FOR THE YEARS ENDED DECEMBER 31, 1974 AND 1973 BALANCEAT BEGINNING OF YEAR:

As previously reported Adjustments (Note 8)

As restated NET INCOME Total DEDUCT:

Cash dividends declared:

$ 5 preferred stock Serial preferred stock:

$4.20 series

$5.44 series

$9.10 series

$7.95 series

$7.72 series

$8.48 series Preferred Stock A, $7.45 series Common stock (at annual rates of $ 1.52 a share for the first two quarters of 1973, and $ 1.60 a share for the last two quarters of 1973 and for 1974).

Total cash dividends declared Capital stock expense Total deductions BALANCE AT END OF YEAR See notes to financial statements.

1974

$460 977 024 235,842,050 (35,028,046) 14,493,620 46,549,415 28,591,432 35,544,206 40,683,529 16 946 789 383,622 995 77,354,029 54,608,879 16,067,820 775,762 71,452,461 148 806 490 69,877,700 6,658,234 76,535,934 72,270,556 20,672,481

$ 51,598,075 23,324,111

$2.21

$ 110,81 6,532 5,246,508 116,063,040 72,270,556 188,333,596 1,186,295 420,000 1,360,000 2,730,008 2,782,523 3,860,000 5,986,655 3,725,000 37,374,994 59,425,475 145,395 59,570,870

$128,762,726 1973

$341 206 167 106,190,728 7,846,834 41,910,188 29,748,949 31,845,000 28,706,296 21,268 097 267,516 092 73,690,075 38,092,921 10,476,889 392,856 48,962,666 122,652,741 50,148,867 6,504,940 56,653,807 65,998,934 13 017,020

$ 52,981,914 20,554,182

$2.58

$ 90,673,379 4 159,988 94,833,367 65,998,934 160,832,301 1,186,295 420,000 1,360,000 2,730,008 2,782,522 3,860,000 678,195 32,691,198 45,708,218 147,563 45,855,781

$114 976,520

Balance Sheet December 31, 1974 and 1973 Assets ELECTRIC UTILITYPLANT:

Electric utility plant other than nuclear fuel:

In service Held for future use Construction work in progress Total Less accumulated depreciation Net Nuclear fuel Less accumulated amortization Net Electric utility plant, net 1974

$ 1 I364 1 83~273 7,542,840 826,012,064 2,197,738,177 256,659,461 1,941,078,71 6 55,117,915 11,466,631 43,651,284 1,984,730,000 1973

$1,283,703,978 394,822 588,760,026 1,872,858,826 227,645,192 1,645,213,634 84,869,269 21,888,857 62,980,412 1,708,1 94,046 OTHER PROPERTY AND INVESTMENTS 3,828,783 6,123,560 CURRENT ASSETS:

Cash Accounts receivable:

Refundable income taxes (Notes 4 and 8)........

Other, net Deferred fossil fuel inventory costs (Notes 1 and 5)

Materials and supplies:

Fuel Other.

Prepayments, etc Total current assets 9,517,174 14,942,360 30,677,344 35,028,046 84,244,486 13,434,110 1,787,436 189,630,956 5,585,578 7,258,736 18,492,256 19,150,044 9,193,580 1,293,959 60,974,153 DEFERRED DEBITS:

Unamortized debt expense Other Total deferred debits TOTAL See notes to financial statements.

1,253,151 5,624,404 6,877,555

$2,185,067,294 1,126,554 3,950,844 5,077,398

$1,780,369,157

Carolina Power L Light Company Liabilities CAPITAL STOCK AND RETAINED EARNINGS (Notes 2 and 8):

Preferred stock Common stock Retained earnings Total capital stock and retained earnings 1974 288,118,400 41 9,701,904 128,762,726 836,583,030 1973 223 800 900 416,321,036 114,976,520 755,098,456 LONG-TERM DEBT:

Principal amounts (Note 3)

Less unamortized discount and premium, net Long-term debt, net 1,036,914,31 0 2,819,037 1,034,095,273 884,282,925 1,481,904 882,801,021 CURRENT LIABILITIES:

Notes payable Accounts payable Customers'eposits Taxes accrued Current portion of deferred income taxes (Note 4)

Interest accrued Dividends declared Other.

Total current liabilities 131,657,046 59,412,183 2,818,650 11,276,899 13,577,543 19,321,270 19 240 143 1,823,299 259,127,033 28,355,799 19,101,865 2,229,460 3,583,620 16,343,570 16,141,105 1,368,472 87,123,891 DEFERRED CREDITS:

Investment tax credits (Notes 1 and 4)

Customers'dvances for construction Other Total deferred credits RESERVE FOR INJURIES AND DAMAGES CONTRIBUTIONS IN AID OF CONSTRUCTION (Note 9)

ACCUMULATEDDEFERRED'INCOME TAXES (Note 4)..

COMMITMENTSAND CONTINGENCIES (Note 5)

TOTAL See notes to financial statements.

4,514,126 125,873 115,406 4,755,405 724,920 49,781,633

$2,185,067,294 10,755,425 52/162 107,436 10,915,023 661,238 5,175,879 38,593,649

$ 1,780,369,157

Statement of Source and Use of Financial Resources For the Years Ended December 31, 1974 and 1973 1974 1973 SOURCE OF FINANCIALRESOURCES:

Current resources provided from operations:

Net income Items not requiring (providing) current resources:

Depreciation and amortization Noncurrent deferred income taxes net Investment tax credit adjustments net, Allowance for funds used during construction Total current resources from operations...

45,391,668 11,187,984 (6,241,299)

(54,608,879) 68,000,030 40,430,347 7,430,192 2,947,920 (38,092,921) 78,714,472

$ 72,270,556

$ 65,998,934 Other resources provided:

Additions to plant accounts representing capitalization of the net cost of funds used during construction........

Proceeds from assignment to lessor of internal combustion turbine generators Proceeds from sale and leaseback of nuclear fuel.........

Miscellaneous net Total resources provided from operations and other Financings:

Sale ofFirst Mortgage Bonds Preferred stock Common stock Increase in short-term notes payable Total resources provided from financings TOTAL 54,608,879 44,455,470 47,593,386 3,994,354 218,652,11 9 150,978,924 64,230,667 3,380,868 103 301,247 321 891,708 5540,543,825 38,092,921 108,555*

1 1 6,915,948 199,754,486 49,9II8,929 63,449,118 16,356,097 329,508,630

$446,424,578 USE OF FINANCIALRESOURCES:

Gross property additions, excluding nuclear fuel**...............

Nuclear fuel additions**

Dividends for the year.

Net increase in working capital, excluding short-term notes payable TOTAL

$359,055,71 7 37,610,243 45,708,218 4,050,400'382,602,01 1

39,939,431 58,047,475 59,954,908

$540,543,825

$446,424,578 INCREASE (DECREASE) IN WORKING CAPITAL, EXCLUDING SHORT-TERM NOTES PAYABLE, BY COMPONENTS:

Materials and supplies (principally fuel).

Deferred fossil fuel inventory costs Accounts receivable Accounts payable Current portion of deferred income taxes Taxes accrued Interest and dividends payable Othernet Net increase in working capital, excluding short-term payable

$ 69,334,972 35,028,046 19,868,712 (40,31 0,31 8)

(13,577,543)

(7,693,279)

(6,076,738) 3,381,056 notes

$ 59,954,908 105,302 2,900,135 3,557,515 3,035,876 (5,153,436)

(394,992)'4,050,400

• Amounts for 1973 have been reclassified to conform to 1974 presentation.

'*Includes amounts capitalized as allowance for funds used during construction.

See notes to financial statements.

Notes to Financial Statements

1.

SUMMARY

OF SIGNIFICANTACCOUNTING POLICIES System of Accounts. The accounting records of the Company are maintained in accordance with uniform systems of accounts prescribed by the Federal Power Commission and the regulatory commissions of North Carolina and South Carolina Electric UtilityPlant. Electric utilityplant is stated at original cost. The cost of additions, including replacements of units of property and betterments, is charged to utilityplant. The Company includes in such additions an allowance for funds used during construction (8% for 1974 and 1973). Maintenance and repairs of property and replacements and renewals of items determined to be less than units of property are charged to maintenance expense. The cost of units of property replaced or renewed plus removal costs, less salvage, is charged to accumulated depreciation. Utilityplant is subject to the lien of the Company's mortgage.

Allowance for Funds Used During Construction.

In accordance with the uniform systems of accounts prescribed by regulatory authorities, an allowance for funds used during construction is included in construction work in progress and credited to income, recognizing that funds used for construction were provided by borrowings, preferred stock, and common equity. This accounting practice results in the inclusion in utility plant in service of amounts considered by regulatory authorities as an appropriate cost forthe purpose ofestablishing rates for utilitycharges to customers over the service lives ofthe property.

Depreciation and Amortization. Depreciation of utility plant, other than nuclear fuel, for financial reporting purposes is computed on the straight-line method based on estimated useful lives and charged principally to depreciation expense.

Depreciation provisions as a percent of average depreciable property other than nuclear fuel approximated 2.8% in 1974 and 1973. Amortization of nuclear fuel (1 974, $8,757,000; 1973, $7,694,000) is computed on the unit-of-production method and charged to fuel expense.

Revenues. Customers meters are read and bills are rendered on a cycle basis. Revenues are recorded when billed, as is the customary practice in the industry.

Deferred Fossil Fuel Inventory Costs. On February 6, 1974, pursuant to state regulatory commissions'rders, the Company

'put into effect retail service fossil fuel adjustment clauses to recover increased fuel costs. The provisions ofthe clauses result in a time lag between the date increased fuel cost is incurred and the date such cost is billed to customers. Accordingly, to properly match increased fuel costs with the related revenues, the Company is deferring the increased fuel cost when incurred and expensing it in the month the related revenues are billed. Therefore, operating expenses in the statement of income have been decreased and Deferred Fossil Fuel Inventory Costs in the balance sheet has been increased by $35,028,046, representing the normalization of such cost. Related deferred income taxes have been recorded by increasing income tax expense in the statement of income and are reflected in Current Portion of Deferred Income Taxes on the balance sheet.

See Note S concerning status of the fuel adjustment clauses.

Income Taxes. Deferred income tax provisions are recorded only to the extent such amounts are currently allowed for rate-making purposes.

In compliance with regulatory accounting, income taxes are allocated between Operating Income and Other Income, principally with respect to interest charges related to construction work in progress. See Note 4 with respect to certain other income tax information.

Investment Tax Credits. Investment tax credits generated and utilized after 1971 have been deferred and are being amortized over the service lives of the property; substantially all credits prior to 1972 were deferred for amortization over five-year periods. At December 31, 1974 the Company had generated but not utilized investment tax credits totaling

$9,800,000 (See Note 4 for prior years'nvestment tax credits eliminated in 1974 and included herein).

Preferred Dividends. Preferred stock dividends declared and charged to retained earnings include amounts applicable to the first quarter of the followingyear, except for the Preferred Stock A, $7.45 Series, issued in 1973,'which dividends are wholly applicable to the year in which declared.

Retirement Plan. The Company has a non-contributory retirement plan for all regular full-timeemployees and is funding th(,

costs accrued under the plan. Retirement plan cost for 1974 and 1973 were approximately $2,421,000 and $1,748,000, respectively. In 1974, the Company amended the plan by changing, among other things, the accrued benefit determination method, the interest assumption from 4% to 4t/z%, and the amortization of the unfunded prior service cost over a period of twenty years from January 1, 1974 instead of from January 1, 1971. The effect of these changes on periodic net income is not material. The unfunded prior service cost at January 1, 1974, the date of the latest actuarial valuation was approximately $9.6 million and as of December 31, 1974 is estimated at $ 17 million.As of December 31, 1974 the actuarially computed value of vested benefits exceede'd assets of the plan by an estimated

$ 5 million.

Other Policies. AtDecember 31, 1974, the Company had available lines ofcredit with various banks and maintains account balances in connection with certain of such lines. Other property and investment's are stated principally at cost, less accumulated depreciation where applicable. Materials and supplies inventories are stated at average cost. The Company maintains an allowance for doubtful accounts receivable (1974, $427,876; 1973, $335,384). Bond premium, discount and expense are amortized over the life of the related debt.

2. CAPITAL STOCK Preferred Stock, without par value, cumulative:

$5 (authorized, 300,000 shares; outstanding, 237,259 shares)

Serial (authorized, 10,000,000 shares):

$4.20 Series (outstanding, 100,000 shares)

$5.44 Series (outstanding, 250,000 shares)

$9.10 Series (outstanding, 300,000 shares)

$7.95 Series (outstanding, 350,000 shares)

$7.72 Series (outstanding, 500,000 shares)

$8.48 Series (outstanding, 650,000 shares)

Preferred Stock A (authorized, 5,000,000 shares)-

$7.45 Series (outstanding, 500,000 shares)

Total Preference Stock (authorized, 2,000,000 shares; none issued) 1974

$24,375,900 10,000,000 25,000,000 30,000,000 35,000,000 49,425,000 64,317,500 50 000 OM

$288 118 400 1973

$ 24,375,900 10,000,000 25,000,000 30,000,000 35,000,000 49,425,000 500000M

$ 223 800 900 Common Stock, without par value (authorized, 60,000,000 shares):

Outstanding (1974, 23,438,844 shares; 1973, 23,233,763 shares).

Subscribed but not issued 19,875 shares Total 4

$419,458,687

$416,321,036 243 217

$419 701 904 5416 321 036 Common stock outstanding increased

$3,137,651 in 1974 and $63,545,175 in 1973 from the sale of 3,000,000 shares in 1973 in a public offering and the sale of 205,081 shares in 1974 and 109,247 shares in 1973 under the Company's Stock Purchase-Savings Program for fmployees. At December 31, 1974, 965,460 shares of unissued common stock were reserved for issuance under the Program. The preferred stock account increased

$64,317,500 in 1974 and $50,000,000 in 1973 from the sale of 650,000 shares in 1974 and 500,000 shares in 1973.

In January 1975 the Company sold 4,000,000 shares of common stock in a public offering for proceeds of $56,000,000 before expenses of issuance.

The preferred stock is callable, in whole or in part, at redemption prices ranging from $ 102 to $ 115 a share plus accumulated dividends. The Preferred Stock A, $7.45 Series, has a sinking fund requirement, commencing in 1984, to redeem 20,000 shares annually at $ 100 per share plus accumulated dividends. In the event of liquidation, the preferred stock is entitled to $ 100 a share plus accumulated dividends.

The Company's charter and the indentures relating to the First Mortgage Bonds contain provisions limitingpayments ofcash dividends on common stock under certain circumstances. At December 31, 1974, $21,035,987 was so restricted under the charter provisions, which restriction was removed in January 1975 upon the sale of 4,000,000 shares of common stock.

3: LONG-TERM DEBTPRINCIPAL AMOUNTS First Mortgage Bonds:

3$/0% Series, due 1979 3$/0% Series, due 1979 23/0% Series, due 1981 3$/3% Series, due 1982 4$/4$% Series, due 1988 4r/$ $ % Series, due 1990 4y2% Series, due 1991 4'%eries, due 1994 11Y0% Series, due 1994 5$/6$ % Series, due 1996 6)S%

Series, due 1997 63/0% Series, due 1998 By0% Series, due 2000 8'%eries, due 2000 7%% Series, due 2001

'Issued in 1974 20,100,000 43,930,000 15,000,000 20,000,000 20,000,000 25,000,000 25,000,000 30,000,000 27,650,000'0,000,000 40,000,000 40,000,000 40,000,000 50,000,000 65,000,000 7'%eries, due 2001 7%% Series, due 2002 7%% Series, due 2003.............

8V6$ % Series, due 2003.............

9y0% Series, due 2004.............

Total Six-year note payable to a bank, due july 31, 1978, at a fluctuating rate (11.7% at December 31, 1974) related to the bank's prime rate Miscellaneous promissory notes (1973, $252,925)

Total long-term debt at December 31, 1974..

70,000,000 100,000,000 100,000,000 100,000,000 125,000,000'86,680,000 50,000,000 234,310

...$ 1 036 914 310 The bond indenture, as amended, contains requirements that additional property be certified or that specified amounts in cash and/or principal amount of bonds be delivered annually to the Trustee as an improvement fund. Current liabilities do not include the current improvement fund requirements (approximately $6,100,000 at December 31, 1974) since the Company meets such requirements by the certification of additional property.

The Company sold and issued $22,350,000 principal amount of First Mortgage Bonds, 11'/a% Series due 1994, in January 1975. Bonds of this Series (11 3/e%'Series due 1994) shall be redeemed under sinking fund provisions at $2,000,000 each year commencing on December 1, 1976, at the principal amount without premium plus accrued interest.

4. INCOME TAXES Income tax expense is composed of the following:

Included in Operating Expenses:

Provision (credit) for currently payable (refundable) taxes Provision fo'r deferred taxes, net Investment tax credit adjustments, net (credit).

$ (1,578) 24,766 (6,241)

$ 10,890 7,430 2,948 Year Ended December 31, 1974 1973 (Amounts in Thousands)

Total charged to operating income Reduction in currently payable taxes allocated to Other Income Total income tax expense 16,947 (16,068) 879 21,268 (10,477)

$ 10,791 Provisions for net de/erred income taxes result from timing differences in the recognition of the following items for tax and financial reporting purposes and which tax effects were as follows:

Excess of accelerated depreciation deductions over straight-line depreciation otherwise deductible.

Deferred fossil fuel inventory costs Taxable gain on sale and leaseback of properties.

.Accrual of franchise taxes on books but not.

deductible until paid Total provision for deferred taxes, net

$ 14,513 16,814 (3,325)

(3,236)

$24,766

$7,430

$7,430 Reconciliation ofan amount, computed by applying the federal income tax rate of 48% to pre-tax income (net income plus income tax expense):

Amount derived by multiplying pre-tax income by 48%.

Add (deduct):

Investment tax credits (utilized) eliminated (See Note 1)

Other specific reconciling items multiplied by 48%:

Allbwance for funds used during construction Differences between book and tax depreciation for which deferred taxes have not been provided.

Taxes and fringe benefit costs capitalized State income taxes and other differences, net Provision for current and deferred taxes Investment tax credit adjustments, net Total income tax expense

$35,112 5,706 (26,212)

(3,523)

(4,022) 59 7,120 (6,241) 879

$36,859 (5,386)

(18,285)

(3,020)

(3,856) 1,531 7,843 2,948

$ 10,791

At December 31, 1974, the Company had recorded income tax refunds receivable totaling $14,942,360 and correspond-ingly reduced provisions for federal income tax expense payable currently for the year then ended. The amount represents estimated tax recoveries to result from the carryback of the 1974 net operating loss (see Note 1 for accounting policy for Investment Tax Credits and Note 8 with respect to income tax refund for years 1961 through 1968 totaling $4,159,988).

5. COMMITMENTSAND CONTINGENCIES It is estimated the Company's construction program for 1975 thrpugh 1977, excluding nuclear fuel, willcost approximately

$1,143 million. At December 31, 1974, firm commitments for construction aggregated approximately

$400 million plus approximately $264 millionfor initial and replacement nuclear fuel. In addition, the Company has a contract with the Energy Research and Development Administration for nuclear fuel enrichment requirements through June 30, 2002, which is cancelable without penalty upon five years written notice. Payments for enrichment services are anticipated to approximate

$79 million during the next five years. Many contracts include escalation provisions.

The Company has entered into an agreement with Pickands Mather 8 Co. (PM), a firm engaged in owning, operating and managing mineral properties, to develop through a subsidiary a deep coal mine in Pike County, Kentucky. As of December 31, 1974, the Company had advanced

$ 1.7 millionto the subsidiary. The subsidiary is owned 80% by the Company and 20% by PM. The currently estimated maximum capital cost of the mine of $50 million will be financed by the subsidiary through equipment lease arrangements and long-term borrowing. The Company and PM have entered into coal purchase contracts for 80% and 20%, respectively, of the subsidiary's production at prices sufficient to meet all of its costs. The Company has a contingent liabilityto lend funds to the subsidiary for development cost overruns and for operating cash requirements during any full calendar quarter during which no coal is delivered.

During 1974, the Company assigned its rights to eleven internal combustion turbine generator units and related equipment for approximately $44.4 million and sold certain nuclear materials for approximately $47.6 million and subsequently leased these properties from their new owners. Under certain circumstances, the Company is contingently liable to repurchase the properties.

Electric utility plant at December 31, 1974, includes approximately

$ 15 million representing cost less accumulated depreciation of four hydroelectric projects licensed by the Federal Power Commission (FPC), which licenses expire in 1976, 1993, and 2008. Upon or after expiration of each license, the United States may take'over the project, or the FPC may issue a new license either to the Company or a new licensee. In the event ofa takeover or licensing to another licensee, the Company would be paid its "net investment" in the project, not to exceed fair value, plus severance damages, ifany. No provision for amortization reserves as required for the determination of "net investment" has been recorded as such amounts, ifany, are considered immaterial. In 1973, the Company applied for a new 50-year license for the Walters Hydroelectric Project which original license expires in 1976. A competing application has been filed by a group of rural electric cooperatives.

The Company has committed a total of $3,450,000 for research concerning development of the Liquid Metal Fast Breeder Reactor payable in ten equal annual installments which commenced in 1972.

There are certain claims pending against the Company; in the opinion ofthe Company, liabilities arising from these claims, if any, would not have a material effect on the financial position or results of operations of the Company.

Annual rentals under long-term leases are not considered material.

Federal income tax returns through 1970 have been examined and closed.

During 1974 the Company's construction program was reduced, including the elimination from its authorized construction budget offive proposed new generating units. The Company expects to retain forfuture use as much value as possible from the approximately $ 13 million(including $ 6 million land costs) it had paid or accrued in connection with such units. (Ofthe total amount, approximately

$7 million is included in plant held for future use land approximately $6 million is included in construction work in progress.) Additionally, the Company willincur costs of an undetermined amount arising out of related contracts for generating equipment. The Company willseek regulatory approval to allocate any charge-offs related to the units over a period of years and to recover them through rates. No provision has been recorded in the statement of income for any losses which may result because the significance and amounts are not presently known, although they could be substantial, and the final accountingdisposition is not presently determinable.

Operating revenues for the year ended December 31, 1974 include $30,444,000 which was billed during October, November and December of 1974 to retail customers in North Carolina under the provisions of a fossil fuel adjustment clause.

Those billed amounts are subject to further regulatory review and refund with interest ifsuch review so requires. Deferred fossil fuel inventory costs at December 31, 1974 of $35,028,046 represent approximate amounts to be billed customers during the followingtwo months. On February 3, 1975, the North Carolina Utilities Commission issued an interim'order (to remain in effect until a final order is issued but in any event for not more than 60 days) requiring the Company to reduce by 25% the amount of fossil fuel clause charges on bills rendered on and after February 1, 1975 to the Company's North Carolina

residential customers. Such order could result in approximately $1,119,000 ofthe December 31, 1974 deferred fossil fuel cost not being billed during the interim period. It is uncertain ifthe Company willbe authorized to billsuch reduced amounts in the future or ifsuch reductions willbecome permanent. Approximately $29,500,000 (including the 25% reduction of$1,119,000) of deferred costs are subject to further regulatory review and approval which may necessitate adjustments ifsuch reviews so require.

6. RATE INCREASES Operating revenues include amounts (1 974, $113,316,000; 1973, $2,233,000) attributable to rate increases placed in effect during 1974 and 1973, including for 1974, $30,444,000 subject to further regulatory review and refund with interest ifsuch review so requires (see Note 5).

7. PROPOSED ACCOUNTING RULES The Federal Power Commission has under consideration certain proposed revisions in its Uniform System of Accounts relating to the deferring or normalizing of interperiod income taxes. The revisions would bring the accounting for interperiod income tax allocations into conformity with generally accepted accounting principles for non-regulated businesses and would provide an accounting basis in the Uniform System of Accounts for the inclusion of such deferred taxes for rate-making purposes, except where a regulatory body having rate jurisdiction requires something less than fulldeferral, in which case, only the lesser amount would be recorded for accounting and rate-making purposes. The ultimate effect, ifany, on the Company's earnings is not presently determinable pending definitive action on the proposals by the Federal Power Commission and any actions which may subsequently be taken by rate regulatory bodies.

8. ADJUSTMENTS TO RETAINED EARNINGS During 1974 the Company received a $4,159,988 refund offederal income taxes paid with respect to the years 1961 through 1968. The balances of retained earnings at December 31, 1972 and 1973 have been restated by such amount. Received also in connection with the tax refund was $2,089,461 of refunded interest and interest earned applicable to years prior to 1974.

Accordingly, such interest (net of income tax of $ 1,002,941) has also been added in 1974 to the December 31, 1973 balance but has not been allocated to 1973 and prior years since the effect on any one year is not material. Accounts receivable, net, as of December 31, 1973 was restated to include the refunded tax amount only.

9. CONTRIBUTIONS IN AID OF CONSTRUCTION In accordance with orders from regulatory authorities, contributions in aid of construction have been transferred to the electric utility plant section of the balance sheet as of January 1, 1974.

Statistical Review (Dollars in Thousands)

Balance Sheet Data (End of Period):

Total Utility Plant other than Nuclear Fuel Accumulated Depreciation..............

Net Utility Plant other than Nuclear Fuel Capitalization Common Stock and Retained Earnings'..

Preferred Stock.

First Mortgage Bonds, Net'..............

Other Long-Term Debt..................

Total Ratio of Accumulated Depreciation to Utility Plant in Service.......:...........

Percent of Total Capitalization Common Stock and Retained Earnings'.

Preferred Stock........................

First Mortgage Bonds, Net'..............

Other Long-Term Debt..................

Total Ratio Bonds to Net Utility Plant other than Nuclear Fuel.................

I974

$2,197,738 256 659

$ 1 941 079 548,465 288,118 983,861 50 234

$ 1 8 7D 678 18.8 29.3 15.4 52.6 2.7 100.0 50.7 1973 1,872,859 227 645 1972 1,524,238 200 190 1971 1,212,822 178 096 1 645 214 1 324 048 1 034 726 531,297 223,801 832,548 50 253 447,609 173,801 632,497 50 110 299,852 124,376 533,003 123 17.7 32.4 13.7 50.8 3.1 100.0 50.6 18.4 34.3 13.3 48.5 3.9 100.0 47.8 18.9 31.3 13.0 55.7 100.0 51.5 1 637 899 1 304 017 957 354 981,571 161 827 819,744 260,154 89,376 398,427 134 748 091 820,865 147 407 673.458 230,964 59,376 308,959 599 299 480,407 93 215 387,192 149,222 34,376 199,535 1 920 385 053 20.9 34.8 12.0 53.2 100.0 48.6 20.3 38.5 9.9 51.6 100.0 45.9 20.2 38.8 8.9 51.8

.5 100.0 51.5 1970 1969 1964 Results of Operations Operating Revenues Operating Expenses Fuel for Generation of Power............

Deferred fossil fuel expense (credit).........

Purchased Power Other Operation 'Expense...............

Maintenance Depreciation.

Taxes Income TaxesOther Total Operating Expenses.............

Operating Income Other Income Allowance for Funds Used During Construction Income Taxes Credit...................

Other Income (Deductions)-Net.........

Other Income.

Gross Income Interest Charges Bond Interest Other Interest Charges..................

Total Interest Charges.................

Net Income Preferred Stock Dividend Requirements..

Earnings for Common Stock..............

Dividends Declared on Common Stock...

Earnings Invested in the Business.........

Earnings Per Share Weighted Average....

Dividends Paid Per Common Share........

Payout Percent Shares Common Stock Outstanding (000's)'ear-End Weighted average during year...........

Times Earned Bond InterestBefore Income Taxes.....

After Income Taxes......

Preferred Dividend Requirements........

460 977 235,842 (35,028) 14,494 46,549 28,591 35,544 16,947 40 684 383 623 77 354 54,609 16,068 776 71 453 148 8DI 63,676 12,860 76 536 72,271 2D 672 51,599 37 375 14 224 2.21 1.60 7'2.4 23,439 23,324 2.35 2.34 3.50 341 206 106,191 7,847 41,910 29,749 31,845 21,268 28 706 307,136 88,549 11,537 32,979 25,624 27,280 26,378 24 021 38,093 10,477 393 24,759 6,666 49 48 963 31 474 122 653 102 242 45,653 11 001 56.654 65,999 13 017 52,982 32 691 20 291 2.58 1.54 60.0 23,234 20,554 2.92 2.69 5.07 37,782 3 931 41,713 60,529 9 612 50,917 27 174 23 743 2.86 1.47)$ 2 51.6 20,125 17,814 3.23 2.71 6.30 267 516 236 368 73 690 70 768 255,643 84,749 10,422 28,510 23,098 22,820 14,328 21 400 205 327 50 316 14,708 3,532 517 18 757 69,073 27,895 3 704 31 599 37,474 8 371 29,103 22 122 6 981 1.97 1.46 74.1 15,555 14,776 2.86 2.48 4.48 69,014 9,799 23,765 19,849 19,476 8,289 19 053 169 245 35 601 49,101 6,439 20,884 16,231 18,086 18,920 17 413 147 074 39 986 21,847',196 15,252 7,706 10,560 17,258 10 115 87 934 25 333 10,505 2,709 (337 13 181 48 782 4,397 1,425 3

5 825 45 811 1,134 161 366 1 661 26,994 19,601 4 356 23,957 247825 4 699 2D,126 19013 1 113 1.56 1.46 93.6 13,986 12,934 2.77 2.49 5.28 I4,543 3 884 18 427 27,384 2 966 24,418 17 391 7 027 2.05 1.42 69.3 12,674 11,920 4.35 3.15 9.23 7,027 337 7 364 19,630 1 6D6 18,024 11 661 6 363 1.62 1.00 61.7 11,279 11,146 6.27 3.84 12.22 204,846 187,060 113,267

'As adjusted for years 1969 through 1973 for income tax refund received in 1974.

'Years prior to 1974 restated to reflect unamortized premium and discount.

Revenues (Thousands)

Residential Commercial Industrial Textile'ndustrial Other Government and Municipal..............

Sales for Resale Total Electricity Sales Within Service Area Nonterritorial Electricity Sales............

Miscellaneous Revenues................

Total Operating Revenues...........

Kwh KW Miscellaneous Customers at Year End Residential Other Total Average Revenue Per KWH Residential Commercial Industrial.

Total Energy Sales Within Service Area......

Residential Average Annual Energy Use...........Kwh Average Annual Bill Steam Electric Generating Plant Fossil Fuel Average Annual Heat Rate (BTU Per Net KWH)....................

Average Cost Per MillionBTU.........Cents Average Cost Per MillionBTUAllFuels......

Annual Load Factor, Service Area Load........

Cents Load Data Electric Energy Sales (Millions):

Residential Commercial Industrial.

Other.

Total Energy Sales Within Service Area Nonterritorial Total Electric Energy Sales...............

Company Uses, Losses and Unaccounted For Total Energy Requirements...............Kwh Electric Energy Supply (Millions):

Generated Steam Fossil.............Kwh Generated Steam Nuclear...............

Generated Hydro Generated Other Fuel...................

Purchased and Interchange Net...........

Total Energy Supply................Kwh Peak Demand of Firm Load (000's):

Within Service Area...................

Nonterritorial 7

Total Peak Demand.................

Total Capability at December 31 (000's):

Fossil Fuel Plants.

.KW Nuclear Plants Hydro Plants Purchased Total Capability'...................KW 1974

$ 156,134 88,420 56,661 78,649 16,034 46015 441,913 13,499 5 565 5 460977 5,917 3,576 8,273 5 841 23,607 469 24,076 1 556 25 632 18,603 4,813 921 215 1 D80 25 632 4,771 143 4 914 5,014 700 212 280 6 206 550,128 98 179 648 307 2.64 2.47 1.64 1.87 10,861 286.60 10,090 116.7 96.6 60.2 1973 117,559 65,647 36,689 47,677 11,632 43 827 323,031 13,608 4 567 341 206 5,937 3,628 7,885 5 779 23,229 853 24,082 1 501 25 553 19,875 3,764 891 113 940 25 583 4,711 212 4 923 4,453 700 212 280 5 645 535,607 96,844 632 451 1.98 1.81 1.07 1.39 11,276 223.29 9,739 50.0 44.6 59.9 1972 103,254 58,246 33,438 41,161 10,827 35 396 282,322 21,040 3 774 307 136 5,208 3,202 7,037 5 070 20,517 1 584 22,101 1,671 23 772 16,605 4,828 882 210 1 247 23 772 4,119 516 4 635 3,833 700 212 265 5 010 515,041 95 020 610 061 1.98 1.82 1.06 1.38 10,293 204.05 9,946 45.7 39.6 61.3 1971 89,711 49,223 26,725 34,096 9,685 31 643 241,083 11,967 2 593 255 643 4,974 2,945 6,232 4 710 18,861 796 19,657 1 307 20 964 16,135 2,414 849 257 1 309 2D 964 3,625 170 3,795 3,482 700 211 245 4 638 495,528 90,561 586 089 1.80 1.67

.98 1.28 10,205 184.08 9,832 48.0 44.9 63.5 1970 75,990 40,981 21,174 28,889 8,573 25 794 201,401 1,225 2 220 204 846 4,634 2,693 5,623 4 352 17,302 246 17,548 1,248 18 796 16,311 3

623 315 1,544 18 796 3,484 3 484 3,040 211 378 3 629 478,914 86 511 565 425 1.64 1.52

89 1.16 9,794 160.62 9,785 41.2 42.1 60.8 1969 67,920 36,316 18,713 26,133 7,997 22 506 179,585 5,557 1 918 187 060 4,150 2,389 5,188 3 890 15,617 1 068 16,685 1,222 17 907 15,996 695 127 1 089 17,9D7 3,055 168 3.223 2,961 211 223 3 395 465,215 82,584 547 799 1.64 1.52

.86 1.15 9,027 147.74 9,626 31.0 31.5 62.9 1964 45,593 22,331 10,561 13,734 6,726 13 212 112,157 1 110 113 267 2,516 1,315 2,602 2 326 8,759 8,759 727 9 486 7,900 898 688 9 486 1,749 1 749 1,632 212 243 2 087 402,969 67 228 470,197 1.81 1.70

.93 1.28 6,319 114.53 9,853 28.0 28.1 61.7

'Includes yarn mills, weaving or cloth mills, finish

'Company now has 949,000 Kw. under constructio of generating capability.

ing plants (bleach n forservice in 197 ing, shrinking, dyeing and printing), knitting mills, and hosiery mills.

5, 821,000 Kwfor 1976; and 720,000 for 1978-or a total of2,490,000 added kilowatts

Territory Served

.aJ

~ Asheville N. C.

Raleigh 3lhJ Sanford

~ Southern Pines S.C.

.U

~ Florence

.mk'olumbia

~ Sumter

enderso Goldsboro

.a'J

~ Jac sonv~le Wllmington Legend CpikL Service Area 4

CPg L District Offices Hydroelectric Generating Plant sek Conventional Steam Electric Generating Plant Steam-Electric Generating Plant With Conventional and Nuclear Units Nuclear Steam. Electric Generating Plant Under Construction cQ Nuclear Steam-Electric Generating Plant Site Darlington County Electric Plant Electric Generating Plants

1. Asheville Electric Plant

2. Blewett Hydroelectric Plant

3. Cape Fear Electric Plant

4. Lee Electric Plant S. Robinson Electric Plant

6. Sutton Electric Plant

7. Tillery Hydroelectric Plant B. Walters Hydroelectric Plant

9. Weatherspoon Electric'Plant

10. Roxboro Electric Plant

11. Brunswick Nuclear Plant

12. Marshall Hydroelectric Plant

13. Harris Nuclear Site

14. Darllngton Plant At the end of 1974, CP&L was providing elec-tric service to more than 648,000 customers in an area of 30,000 square milesalmost half of North Carolina and about one-fourth of South Carolina.

Total population of the territory is estimated to be about 2.8 million. This territory is comparable in size to the combined areas of Connecticut, Mas-sachusetts, Rhode Island, New Jersey and New Hampshire.

It includes part of the Mountain and Piedmont

regions, but is largely in the Coastal Plains section.

Service to customers is provided through 5 division, 10 district and 40 area offices.

The 1975 Annual Meeting of Shareholders willbe held in Raleigh, Annoy) Meetfngg North Carolina, on May 21 at 11 A.M. A formal notice of the meeting together with a proxy statement and form of proxy willbe mailed about April 16.

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