ML19246C468
| ML19246C468 | |
| Person / Time | |
|---|---|
| Site: | Skagit |
| Issue date: | 06/01/1979 |
| From: | Coberley M, Olson R, Pack L PACIFIC GAS & ELECTRIC CO., PORTLAND GENERAL ELECTRIC CO., PUGET SOUND POWER & LIGHT CO. |
| To: | |
| References | |
| NUDOCS 7907250204 | |
| Download: ML19246C468 (54) | |
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,o No UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
PUGET SOUND POWER & LIGHT ) Docket Nos. 50-522 COMPANY, et al. ) 50-523
)
(Skagit Nuclear Pcver Project, ) June 1, 1979 Units 1 and 2) ) APPLICANTS' TESTIMONY ON FINANCIAL QUALIFICATIONS This testimony has been prepared jointly by the following, whose statements of qualifications are attached: Russel E. Olson, Treasurer, Puget Sound Power & Light Company Michael E. Coberley, Manager, Revenue Requirements, Portland General Electric Company Lawrence S. Pack, Senior Cost Analyst, Pacific Power & Light Company James M. Cocahe, ' '1 ;, e President - Finance, The Washington Water Power Company Also attached are the following tables: 790725o2M 4M
Table No. Subject
- 1. Project cost estimate.
- 2. Sources of funds with underlying assumptions. ,
- 3. New construction.
- 4. Historical financial capability and financial statistics.
BACKGROUND The Skagit Nuclear Power Project, Units 1 and 2, will con-sist of two nuclear-fueled electrical gecerating units, each with a net electrical output of appr oximately 1,288 megawatts. The facility will be operated by Puget Sound Power & Light Com-pany (Puget), the sponsor of the facility, and it will be jointly owned by Puget and t!.ree other investor-owned utili-ties, Portland General Electric Company (PGE) , 'cific Power & Light Company (Pacific), and The Washington Water Power Company (WWP). Their ownership shares will be as follows: Puget 40% PGE 30% Pacific 20% WWP 10% Unit 1 is currently sch3duled to commence commercial opera-tion in the fall of 1986 and Unit 2 in the fall of 1988. This schedule assumes issuance of the LWA or construction permits by Sepcember 1979. 401 I53
The most recene cost estimate for the facility and related fuel cycle costs (the first cores) is set forth in Table 1 attached, which also includes a schedule reconciling this esti-mate with the estimate set forth in Section 20.2 of the SER (Supp. No. 1). Puget, PGE, Pacific and WWP (the Applicants) are regulated public utilities engaged in the production and sale of an es-sential commodity, electric energy. They have the obligation to provide prudently for the existing and anticipated electric loads in their service territories; at the same time, they must rely upon the state and federal regulatory agencies for appro-val of rate levels necessary to satisfy the financial require-ments of this service obligation. The principles underlying this regulatory system are well established and include the rule that "[a] public utility is entitled to such rates as will permit it to earn a return
. . . . reasonably sufficient to assure corfidence in the financial soundness of the utility, and should be adequate, under efficient and economical management, to maintain and sup-port its credit and enable it to raise the money necessary for the proper discharge of its public duties." Bluefield Water Works & Imorovement Co. v. Public Service Commission of W. Va.,
262 U.S. 679, 692-93 (1923); see also, FPC v. Hoce Natural Gas, 320 U.S. 591 (1944).
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The operation of this regulatory system to provide to Ap-
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plicants the rate relief needed to allow financing of necessary generation, transmission and distribution facilities has been demonstrated; Applicants have successfully operated and per-formed their responsibilities within this regulatory environ-ment for decades. The more detailed individual company reviews of rate relief and financing in recent years (below) demon-strate that each company has successfully undertaken major financings and has received rate relief critical to such financings. In the process, each company has (1) successfully met normal restrictions on external finascing, which are generally applicable to all and which are standard in the in-dustry, and (2) maintained required capitalization ratios. These restrictions and requirements include tests, imposed by investors, which must be met before the company may issue debt and preferred stock securities. Because these tests provide margins of earnings coverage in excess of interest or dividend requirements, investors are protected and historically have been more receptive to the securities of Applicants than they would have been otherwise. These coverage tests have existed in general form fcr decades and are tne accepted norm in the utility industry. Whenever Applicants have anticipated that their ability to issue future series of debt or preferred securities would be limited because of these investor-imposed restrictions, they 5
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have requested, and have been granted, revenues sufficient to meet or exceed all financing tests. Similarly, they anticipate a continuing ability to obtain rate relief adequate to enable the financing of new projects while cor.tinuing to meet, without violating, any applicable financial restrictions. Further, while short-term borrowing arrangements have reasonably short lives, Applicants have historically been successful in renew-ing, expanding < d supplementing them as required, With specific regard to future financial ability to obtain required construction funds, Applicants have prepared a fore-cast of sources of funds for planned and estimated construction requirenents covering the 1979-1990 period (Tables 2 and 3 at-tached). These forecasts must be regarded as point estimates of probable financial scenarios. They are not demonstrations of what the future will be but, more properly, a view of what the companies might reasonably expect. These projections por-tray the financing of construction expenditures -- including those for the Skagit facility -- as a reasonable undertaking within the companies' financial parameters and constraints. Under forecast assumptions, all required financial tests will be met, as is shown in the individual company discussions which follow.
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PUGET SOUND POWER & LIGHT CCMPANY Table 4 attached summarizes the historical ability of Puget to fund construction requirements of significance during the most recent 6 years. During this period, Puget financed ap-proximately $606 million of electric plant construction requirements and during the same period acccmplished approxi-mately S432 million of external long-term financing. Puget also was allowed over S51 million in increased annual electric revenues during this 6-year period, based upon certain annual test periods. During this period, Puget increased its year-end average equity-capitalization ratio to about 49 percent. More detailed financial statistics for the past 3 years are also given in Table 4. As to the issuance of first mortgage bonds, the earnings coverage provisions of the mortgage covering Puget's bonds require that for the issuance of additional bonds, earnings before income taxes must equal at least two times pro forma annual interest charges on all outstanding bonds, including the bonds in the prospective bond issue. Also, Puget's mortgage indenture provides that bonds issued thereunder may only be authorized to the extent of 60 percent of the value of property additions provided as security. Inasmuch as Puget's target long-term debt ratio of capitalization is about 49 percent, this fundable property restriction is not unduly restrictive. 401 157
Puget's Restated Articles of Incorporation, as amended, provide that before the Company can issue additional preferred stock, gross income available for the payment of interest must at least equal one-and-one-half times the sum of (1) the annual interest charges on all debt, and (2) the annual dividend requirements on all outstanding and to-be-issued shares of pre-ferred stock. The Restated Articles of Incorporation further require that Puget cannot issue or assume any unsecured indebtedness with a term of over one year if the total of such unsecured indebted-ness exceeds 15 percent of (1) the total principal amount of secured indebtedness outstanding, and (2) the capital and sur-plus of Puget. In addition, as an alternative to issuing more debt or pre-ferred stock, Puget can sell new common stock. Since January 1, 1973, Puget has sold over $130 million of common stock, with an increase in outstanding shares from 3,750,688 at the end of 1972 to 18,709,105 at the end of 1978. (The 1972 number of 8,750,688 was adjusted from 4,375,344 to account for a stock split of two for one, June 1977.) As a final alternative, if Puget, because of temporarily declining earnings or adverse market conditions, chooses not to issue any of the above permanent securities, Puget has short-term borrowing arrangements which can provide up to $101 g}{ }en!j 0
million in domestic lines of credit and $50 million ur. der Euro-dollar banking facilities. These lines can be used as backup for commercial paper issuance. Puget's recent 1c79-1990 financial forecast (Table 2) pro-jects increases in electric rates over the 12-year period; these rate increases provide the foundation for financing of future constr'actior requirements with a target capitalization of about 49 percent long-term debt and 51 percent equity. The projection indicates construction expenditures totaling over $6.8 billion for the period 1979-1990 (including $1.1 billion of Puget's share of Skagit Units 1 and 2), ranging between $130 million and $943 million annually, can be financed employing approximately SS.9 billion of externally supplied capital. Under Puget's forecast assumptions, ali required financial tests would be met as is illustrated in the following table: 4gi 159
1979-90 Proiected Rance Recuirement Mortgage Indenture: Interest Coverage 2.1 - 2.9X 2.0X or more Long-Term Debt Capitalization 49.2% - 50.24 60% or less Articles of Incorporation: Preferred Dividend Coverage 3.7 - 5.7 2.5X or more Preferred Capital Coverage 2.8 - 2.9 1.0X or more Interest and Preferred Dividend Coverage 1.5 - 1.8 1.5X or more Unsecured Long-Term Debt Less than 1% - 4.1% 15% or less PORTLAND GENERAL ELECTRIC COMPANY Table 4 attached summarizes the historical ability of PGE to fund significant construction requirements during the past 6 years. During this period, PGE financed $1086 million of electric plant construction requirements and during the same period accomplished $1034 million of external long-term financ-ing. PGE also was allowed over $180 million in increased annual electric revenues during this 6-year period. During this period, PGE maintained an average equity-capitalization ratio of nearly 47 percent. g; \63
More detailed financial statistics for the past 3 years are also given in Table 4. As to the issuance of first mortgage bonds, the earnings coverage provisions of the mortgage covering PGE's bonds require that for the issuance of additional bonds, earnings before inccme taxes must equal at least two times pro forma annual interest charges on all outstanding bonds, including the bonds in the prospective bond issue. Also, PGE's mortgage in-denture provides that bonds issueo thereunder may only be authorized to the extent of 60 percent of the value of property additions provided as security. Inasmuch as PGE's target icng-term debt ratio of capitalization is 50 percent, this fundable property restriction is not unduly restrictive. PGE's Articles of Incorporation, as amended, provide that before the Company can issue additional preferred stock, gross income available for the payment of interest must at least equal one-and-one-half times the sum of the annual interest charges and the annual dividend requirements on all outstanding and to 'oe-issued shares of preferred stock. In addition, as an alternative to issuing more debt or pre-ferred stock, PGE can sell new common stock. Since January 1, 1973, PGE has sold over $274 million of common stock with an increase from 10,500,000 shares outstanding in 1972 to 25,995,935 shares outstanding as of 1978. s6\
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Despite this increase of 148 percent in outstanding shares, PGE has been able to market new shares of common stock at a price near or in excess of book value. As a final alternative, PGE has short-term borrowing arrangements which can provide up to S150 million in short-term capital and has a construction financing agreement which can provide up to S125 million for the financing of the Boardman Coal Plant. PGE's 1979-1990 financial forecast (Table 2) projects an increase in electric rates over the 12-year period; these rate increases provide the foundation for financing of future con-struction requirements with a target capitalization of 50 percent long *.erm debt and 50 percent equity. The projection indicates construction expenditures totaling over S4 billion (including S878 million of PGE's share of Skagit Units 1 and 2), and ranging between $214 million and
$532 million annually, can be financed by employing approxi-mately S2.5 billion of externally supplied capital. Under PGE's forecast assumptions, all required financial tests will be met, as is illustrated in the following table:
401 162
1979-1990 Projected Rance Recuiremest Mortgage Indenture: Interest Coverage 2.2 - 4.1X 2.0X or more Long-Term Debt Capitalization 48.1% - 57.1% 60% or less Articles of Incorporation: Interest and Preferred Dividend Coverage 1.3 - 2.2X* 1.5X or more
*PGE does not plan to issue preferred stock in 1979 because interest and preferred dividend coverage for that period is forecast for 1.2 - 1.4. After 1979, the preferred coverage is forecast above the required 1.5.
PACIFIC POWER & LIGHT COMPANY Table 4 attached summarizes the historical ability of
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Pacific to fund construction requirements of significance dur-ing the most recent 6 years. During this period, Pacific financed nearly $1.3 billion of electric plant construction requirements and during. the same period accomplished over $1.0 billion of external long-term financing. Pacific ulso was al-lowed $133 million in increased annual electric revenues during this 6-year period. During this period, Pacific maintained an equity-capitalization ratio of over 42 percent or greater. More detailed financial statistics for the past 3 years are also given in Table 4. 40\ \o<}
As to the issuance for first mortgage bonds, the earnings coverage provisions of the mortgage covering Pacific's bonds require that for the issuance of additional bonds, available earnings before income taxes must equal at least two times pro forma annual interest charges on such outstanding and to-be-issued bonds. Also, Pacific's mortgage indenture pro-vides that bonds issued thereunder may only be authorized to the extent of 60 percent of the value of property additions provided as security. Inasmuch as Pacific's target long-term debt ratio of capitalization is 54 percent, this fundable pro-perty restriction is not unduly restrictive. Pacific's Restated Articles of Incorporation, as amended, provide that before the Company can issue additional preferred stock, gross income available for the payment of interest must at least equal one-and-one-half times the sum of the annual interest charges and the annual dividend requirements on all outstanding and to-be-issued shares of preferred stock. Also, before additional shares of preferred stock can be issued, net income available for the payment of dividends must be at least equal to twice the annual dividend requirements of all out-standing and to-be-issued shares of preferred stock. The Restated Articles of Incorporation further state that Pacific's total unsecured indebtedness cannot exceed 30 percent of (1) the total principal amount of secured indebtedness out-standing, and (2) the capital and surplus of Pacific.
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In addition, a an alternative to issuing more debt or pre-
. ferred stock, Pacific can sell new common stock. Since January 1, 1973, Pacific has sold over 5363 million of common stock, with an increase in outstar; ding shares from 18,918,781 at the end of 1972 to 37,407,993 at the end of 1973.
Despite this increase in excess of 37 percent in outstand-ing shares, Pc;ific usually has been able to market new shares of common at a price near or in excess of book value. As a final alternative, if Pacific, because of temporarily declining earnings or adverse market conditio ., chooses not to issue any of the above permanent securities, -
. ific has short-term borrowing arrangements which can provide up to $229 million in short-term capital.
These short-term facilities are also diverse, with Pacific having the capacity to borrow 375 million under a European banking facility. Pacific's 1979-1989 financial forecast (Table 2) projects an increase in electric rates over the ll-year period; these rate increases provide the foundation for financing of future construction requirements with a target capitalization of 54 percent long-term debt and 46 percent equity. The projection indicates construction expenditures (exclud-ing AFCC) totaling over S6.9 billion (including S586 million for Pacific's share of Skagit Units 1 and 2), and ranging between $269 million and $1,193 million annually, can be 165 40st
financed employing approximately $7.4 billion of externally supplied capital. Under Pacific's forecast assumptions, all required
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financial tests would be met as is illustrated in the following table: 1979-89 Projected Rance Requirement Mortgage Indenture: Interest Coverage 2.1 - 2.5X 2.0X or more Long-Term Debt Capitalization 53.0% - 56.8% 60% or less Articles of Incorporation: Preferred Dividend Coverage 5.7 - 7.2X 2.0X or more Interest and Preferred Dividend Coverage 1.7 - 1.9X 1.5X or more Unsecured Debt as a Percent of Capitalization Less than 5's 30% or less
,THE WASHINGTON WAT2R POWER CCMPANY Table 4, page 4, summarizes the historical ability of Water Power to fund its electric construction expenditures for the past six years, 1973-1978, inclusive. During this period, Water Power financed $218 million of such expenditures and ac-comolished $153 million of long-term external financing. Water Power was allowed $20 million of additional annual electric revenues by its various regulatcry commissions during the period. Water Power increased its total equity capitalization 401 166
ratio from 34 percent in 1974 to 45 percent in 1978 in reccgni-tion of increased business risk as Water Power moved from being a 100 percent hydro-resource electric utility in 1975 to a utility with increasing amounts of thermal generation. Additional financial statistics for ths past three years are shown on Table 4, Item 2h. As to the issuance of Water Power First Mortgage Bonds, interest coverage provisions of its mortgage require that defined annual earnings before income taxes must equal at least two times pro forma o-tgage bond annual interest requirements for its outstanding and tv-be-issued mortgage bonds. Water Power's mortgage also requires that bonds issued thereunder are limited to 60 percent of bondable property (cost or fair value, whichever is less) as security for the bonds. Inasmuch as Water Power's debt capitalization ratio target is 50 percent, this bondable property requirement is not unduly restrictive. Water Power's Restated Articles of Incorporatica, as amended, provide that before the Company can issue additional Preferred Stock without a vote by holders of all outstanding preferred shares, net income available for the payment of dividends for a period of 12 consecutive months within the past 15 months immediately preceding a new preferred issue must be at least equal to 1-1/2 times the preferred dividend require-meat, including the new issue.
In addition, as an alternative to issuing additional debt or Preferred Stock, Water Power may sell new Common Stock. - Since January 1, 1973, Water Power has sold over 353 million of Common Stock with outstanding shares increasing from 6.5 million shares at the end of 1972 to 9.0 million shares at the end of 7.9'8. Despite this significant increase of 38 percent in outstanding shares in six years, Water Power was able to successfu1*.y market new common through public sales. There were four such salas of common during thir - "iod at per share prices to tae public of approximately book value at the time of issue. Water Power hao S110 million principal amount of revolving bank credit lines c:nsisting of a $50 million six-year line thac matdres on December 31, 1984 and a $60 million line that matures on February 1, 1980. These bank arrangments are usually available to meet construction expenditures until the borrowings reach an amount that justifies a public sale of long-term securities to repay such borrowings. However, such arrangements also provide financial flexibility during times of adverse money markets or through any significant decline in corporate earnings. Water Power's 1979-1988 financial forecast (Table 2) projects an increase in electric rates over the 10-year period; these assumed rate increases would provide adequate earnings to as b 'i
maintain a financially viable company during this major con-struction period. During this forecast period, Water Power believes its target capitalization of 50 percent long-term debt and 50 per cent equity is a financially prudent goal. The forecast for the 10-year period indicates construction expenditures (excluding AFDC) aggregating $1.8 billion, includ-ing $280 million for Water Power's share of Skagit Units 1 and
- 2. Annual construction expenditures are expected to range from S65 million to S300 million. Of the $1.8 billion construction program, external financing requirements are estimated at $1.6 billion with the balance from internally-generated cash.
Under Water Power's forecast assumptions, all required financial tests would be met as shown in the following table: 1979-88 Proiected Rance Recuirement Mortgage Test: Interest Coverage (pretax) 2.9 - 3.6X (1) 2.0X mortgage bond interest Debenture Test: Interest Coverage (pretax) 2.3 - 3.0X (2) 2.0X all interest Long-Term Debt Capitalization 09% - 54% Cannot exceed 70% Articles of Incorporatic+ Preferred Dividend Coverage :9 - 2.2X (3) 1.5X preferred dividend Interest and Preferred Dividend Coverage 2.0 - 2.1X (4) None Unsecured Debt as a Percent of Capitalization 2.9 - 8.0% None 401 F69
(1) This calculation is expected to produce a slightly - greater coverage than shown by the NRC formula as cal-culated on Table 4, Item 2h. (2) This calculation for total interest is slightly dif-ferent than the NRC formula shown on Table 4, Item 2h. (3) Water Power presently plans to issue $30 million of Preferred Stock sometime in the latter half of 1979 and the range shown so reflects this expectation. (4) Water Power has no minimum requirement for coverage of combined interest and preferred dividends (fixed charges). CONCLUSION It is our opinion that Applicants do have reasonable assurance of obtaining the funds necessary to cover the esti-mated construction costs and related fuel cycle costs of the proposed Skagit Nuclear Power Project, Units 1 and 2. go\ \0
TABLE 1-1 6-1-79 SKAGIT UNITS 1 & 2 PROJECT COST ESTIMATE . MILLIONS $ PLANT 2092 2 TRANSMISSION 19 3 FUEL 155 3 ESCALATION 819 8 TOTAL 3086 6 NOTES: 1 LWA SEPTEMBER, 1979 2 COMMERCIAL OPERATION SEPTEMBER,
~1986 AND SEPTEMBER, 1988 3 3ASE ESTIMATE IN JANUARY, 1979 DOLLARS 4 ESCALATION AT 77. COMPOUNDED THROUGH COMPLETION 5 EXCLUDES AFDC
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TABLE 1-2 6-1-79 SER
SUMMARY
REC 0tlCILIATION THE CURRENT (6-1-79) PROJECT COST ESTIMATE UPDATE REFLECTS AN INCREASE OF 5514 MILLI 0t1 FROM THE PREVIOUS ESTIMATE UPDATE SUBMITTED TO THE NRC STAFF ON MAY 4, 1978 ( PLtl-186 ) WHICH IS SET FORTH IN SECTION 20 2 0F THE SER (SUPP. NO. 1) THE INCREASE IS DISTRIBUTED AS FOLLOWS: (5 MILLIONS) SER CURRErlT SUPP. NO. 1 EXTIMATE CHANGE PLANT 1831 2 2092 2 251 0 TR AtlSM I SS IUtl 21 7 19 3 (2 4) FUEL 108 4 155 3 46 9 ESCALATION 611 3 819 8 208 5 TOTAL 2572 6 3086 6 514 0 COMM. OPER. COMM. OPER. SCHEDULE 3/85 & 3/87 9/86 & 9/88 18 MOS. DCLLAR BASE JAN. '78 $ JAN. '79 3 12 MOS. 4o\ \ 72 ;g_
TABLE 1-3 6-1-79 DETAILED REC 0t1CILIATION 1 PLAtlT COSTS MILLIONS A. RESTATE BASE ESTIMATE IN JAN. 112 2 1979 DOLLARS B. ADDITIONAL COSTS FOR 18 NONTH 55 3 SCHEDULE DELAY C. ADDITIONAL SCOPE 16 6 D. ADDITIONAL CONTINGENCY 53 2 E. INCREASE Ifl PROPERTY TAX 73 7 TOTAL CHANGE 261 0 II. TRANSMISSION A. RESTATE BASE ESTIMATE IN JAtl. 15 1979 DOLLARS B. RE-EVALUATION OF SCOPE (3 9) TOTAL CHANGE (2 4) III. FUEL-FIRST CORE A. RESTATE dASE ESTIMATE IN JAN. 70 1979 DOLLARS B. RE-EVALUATION OF FUEL ENRICH- 39 9 MENT COST CRITERIA TOTAL CHANGE 46 9 IV. ESCALATION A. ESCALATI0tl DN BASE COSTS FOR 101 2 ADDITIONAL 6 MONTHS
- 3. ESCALATION Ot1 NEW SCOPE in7 3 TOTAL CHAtlGE 708 5 TOTAL PROJECT INCREASE $514 0M 401 173
.u . TABLE 2-1 PUGET 6/1/79 s, .,. 2 5
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TABLE 2-2 PUGET 6/1/79 Puget Sound Power & Light Company ASSUMPTIONS FOR SOURCE OF FUNDS FCR SYSTEM WIDE CONSTRUCTION 197_9-1990 SKACIT NUCLEAR PLANT UNITS 1 AND 2
- 1) Maintain rates sufficient to provide approximately a 12.5% return on average common equity and maintain the Company's ability to finance.
- 2) Compound Growth Rates:
a) KWH sales . .... . . . . 5.32% b) Reve nues . . .... . . . .16.83% c) Expenses. . ...... . .14.49 % d) Net interest charges. . . .20.26% e) Net income. . . . . . . . .21.20% f) Price per KWH . . . . . . .11.70
- 3) The following table gives the inflation rates used in projecting future operating and maintenance expenses and construction expenditures for all production projects with the exception of those noted below.
Year Labor Material O&M 1979 .000 .000 .000 1980 .090 .067 .079 1981 .091 .065 .078 1962 .084 .061 .072 1983 .001 .060 .070 1984 .079 .058 .068 1985 .077 .055 .066 1986 .077 .055 .066 1987 .078 .056 .067 1988 .078 .057 .067 1989 .079 .056 .068 1990 .079 .058 .068 Construction expenditures for Skagit #1 and #2, Colstrip #3 and #4, and Pebble Springs #1 and #2 are inflated at a7 rate compounded annually, while WPPSS #3 is inflated with 6% material and 8 labor rates compounded annually.
- 4) Preferred dividend rate on new issues is 9.0L 401 1/5 f
TABLE 2-3 PUGET 6/1/79
- 5) Interest rates used in forecast:
Notes payable (short-term): 3anks Loans 9.00% pri=e rate Approxi= ate 10.73 -10.56% f fective rate at 75% utilization Co==ercial paper 11.85% to 7.07 Long-term debt 10.25% to 9.0%
- 6) Target Capital Structure:
1979-90 Notes payable (short term) 5.1% Long-te nn debt 46.8% Preferred stock 12.8% Ces=on stock 35.3%
- 7) Marke t / book :
Market Value - The dividend is set to be approximately equal to 8.5% of book value. The market price is calculated f rom the dividend by dividing .08 into it , yielding a market / book of approximately 1. The market price shown below is 1979 1980 1981 1982 Market / book 17.30/18.44 19.10/18.59 20.50/19.60 21.12/20.69 Ratio .938 1.027 1.046 1.021 1983 1984 1985 1986 22.14/21.99 23.36/22.83 24.56/23.92 26.01/25.32 1.007 1.023 1.027 1.027 1987 1988 1989 1990 27.25/26.40 28.35/27.47 29.57/28.71 30.90/30.C0 1.032 1.032 1.030 1.030
- 8) Coccon dividend payout ratio for the 12 years averages .677.
. 40) 176
TABLE 2-4 PUGET 6/1/79
- 9) Target dilution rate for additional com=on stock is set in the 157.
range in any given year. Average dilution rate for the 12 years is 12.12 %.
- 10) In line with the 1975 Tax Reduction Act (Sec. 402 of F.L. 94-12) the following investment tax credit assumptions are incorporated in the projections.
a) Invest =ent tax credit rate is 10%. b) Progress payments on constructed property is treated as creditable investment in the year made for Colstrip 3 and 4, Skagit Units 1 and 2, Pebble Springs Units 1 and 2, and 1990 through 2000 pro;ected nuclear plants.* c) Use of investment tax credit to offset the tax liability is 70% in 1979-80, 80% in 1981, and 90: thereafter.
- 1990-2000 plants are not now planned, however, the Company's long-range forecast indicates the need for additional base load generation in the 199C-2000 period. For the purpose of this study it has been assuned chat typical nuclear generation units will be constructed to meet the projected need even though the type, size, and location of such units has not been dete rmined,
- 11) AFDC ( Allowance for Funds Used During Construction) Rates:
T&D--transmission, distribution, and general plant. Production- generation plant 5 related station and transmission facilities. Year T&D Production 1979 .1002 .090 1980 .099 .090 1981 .098 .090 1982 .099 .090 1983 .101 .090 1984 .102 .090 1985 .101 .090 1986 .101 .090 1987 .102 .090 1988 .103 .090 1989 .103 .090 1990 .104 .090
- 12) Nuclear fuel will be purchased and initial fuel core loads are included in construction expenditure esti=ates of nuclear plants.
401 i'!l 7
TABLE 2-5 PUGET 6/1/79
- 13) Power Supply:
- a. System resources are based on an average of the 40 water years included in the 1978 wes t group forecast.
- b. Purchased hydro power costs debt service requirements are as prescribed in the project owners official statement,
- c. Secondary (non-firm) sales are made either s thin or outside the Northwest Power Pool and are based on relati i levels of surplus.
Revenues derived f rom sales are pri=arily bas,d on establis2.2d BPA rates or other agreements as applicable.
- d. Wheeling charges are based on:
- 1) Required capacity to move purchased power to Puget's system.
- 2) 3PA established rates.
- e. Purchased power expense includes an accrual starting on January 1, 1979, for Rock Island debt service based on an esti=ated total snnual debt se rvice of $19,291,365. The amount accrued from January 1 to July 1,1979 is amortized over the life of the contract.
- 14) Indenture and SEC fixed charge coverages:
1979 1980 1981 1982 1983 1984 1985 1986 1987 Indenture 2.21 2.48 2.45 2.37 2.40 2.30 2.30 2.22 2.50 SEC 2.29 2.36 2.29 2.27 2.44 2.46 2.58 2.43 2.52 1988 1989 1990 2.50 2.80 2.59 2.53 2.65 2.48 13 ) Financing for the 1980 and 1981 combustion turbines will be accomplished thru an operating lease. Expenditures incurred during construction of Colstrip #3 and #4 are financed with a construction trust. At the end of the construction period the plants will be leased by Puget. 8 g\ \i
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TABLE 2-7 PGE 6/1/79 Page 1 of : _ INPUT ASSUMPT!CNS FO R 50GCES OF TUNC S 3TATEMENT FOR
$UCII NUCLEAA PLANT Ytes Numerical Value tate of return on average c anon stock equity 12.34 Preferred stoca dividen4 rate (1) 10.00:
Long-term debt interesc rate (1) 10.5: (1979) to 8.6% (1990) Short-ters debt i,terest rate 12.1: (1979) to 8.1: (1990) M a rk e t /b ook ratio with respect to the 0.909/I.0 oo 12/31/78 projected common stock offerings (2) 1.291/1.0 en 12/31/96 Common stock dividend pay-out ratio 93.4 (1979) to 67.31 (1990) Orewth rates (3): a) 'a '.h sales 4.08: b) Revenues (4) 14.34: c) Expenses 13.41 d) Interest charges 9.50% e) Net income 13.93: Resultant SEC and indenture : overages aver the pertsa of construction (5): Year Indenture E 1979 2.2 :.3 1983 2.9 :.6 1981 3.2 2.3 1982 2.7 2.7 1983 :.7 2. 6 1984 2.6 2.4 1985 2.3 2.4 1986 3.4 2.7 1987 3.6 2.3 1988 4.3 3.1 1989 4.0 3.4 1990 4.1 3.4 9 .m n j} - (} 20 il aA.,c }.c x 2 , a"l l e (*. ~=-knud&gk
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TABLE 2-8 PGE 6/1/79 Page 2 of 2 (1) Applies to new issues. (2) 3 e market / book ratio is not an independent input; it is the product of other f orecas ts and theref ore varies over tha range shown. (3) Each element of revenue and expense is individually analyzed and forecasted so that no single growth rate is used 17 their development. The values given summarize the results of all of the detailed analysis for the period Dece= der 31, 1979 to Cecember 31. 1990 on an annually compounded rote of grow th basis. (4) includes forecasted rate of increase in average sales price of
- 9. 9 7. . Remaining growth rate is attributed to increased unit sales.
(5) Indenture - Cecember 3 L, covering earnings divided by Decencer 31 annualized interest requirements of the Company's first mortgage bonds. SEC - Oecember 31, covering earni:gs divided by December 31 annualized fixed charges. Fixed charges include interest on all long-term debt, interest on short-term debt, interest factor in the long-term combustion turbine leases, one-third annual rentals under long-ters leases and amortization of debt discount and expense. KW/5pfc76.232 p ^ e ~- r ,p
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t TABLE 2-9 PACIPIC 6/1/79
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TABLE 2-10 ATTACHMENT FOR ITEM NO. PACIFIC 6/1/79 Ap?ticant: Pacific Power & Licht Comeany Subject Nuclear Plants: Pebble Sorings Units 1 and 2: Skacit Units 1 and 2 PREPARATION ASSUMPTIONS FOR SOURCES OF FUNDS FOR SYSTEM-WIDE CCNSTRUCTION EXPENDITLGES DURING CONSTRUCTION PERIOD OF SU3 JECT NUCLEAR PLAliTS _
- a. Overall untility rates of return of approxi=ately 9.77. with an implicitly assu=ed utility return on average ce==on equity of approxicately 14.37..
- b. Average preferred stock dividend rate for new issues of 9.47.
- c. Average long-ter= debt interest rate for new issues of 9.47,and a short-ter= debt interest rate of 8.07.. -
- d. Target =arket/ book ratio whereby Pacific Power projects sales of additional shares of cec =on stock at a ratio of not less than 1.0.
- e. Co==on stock dividend payout ratios ranging between 527. and 837..
f. Target capital structure co= posed of 547. larg-ter= debt, 107 perferred stock and 367. ce==on equity.
- g. Resultant interest coverages for SEC test purposes range between 2.0 and 2.3, while for =ortgage bond indenture purposes the coverage range is between 2.0 and 2.3.
- h. Crowth rates as follows:
Kwh Sales 5.607. Revenues (utility 13.247 (inclusive of projected rate relief) Expenses (utility) 13.077. Interest Charges 15.977. Net Incoce 18.977. May 10, 1979 40l id3 O
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TABLE 2-12 WATER PCWER 6/1/79 THE '.?ASHINGTON '.iATSR PCER COMPANY 2.a: (a) Return en Co==en Equity: 12.75-13.25% Earned on Average Equity (b) Preferred Stock Dividend Rate: 9.5% - 19 79 9.0% - 1980 8.75% - 1981-1983 (c) Long-Term Debt Interest Rate: 9.25% - 1979 8.75% - 1980 8.50% - 1981-1988 Short-Ter= Interest Rate: 10. 75% - 1979 - 7.75% - 1980 7.25% - 1981-1983 (d) Market /3cok Ratio: Average 105% (e) Cc==cn S tock Dividend Payout Ratio: 65 70% Assumes payout ratio to continue at historic average payout levels throughout the period. (f) Target Capital Structure: 50% Total Debt
- 10% Preferred 40% Cce=on (g) Interest Coverages: (Times) 1979 2.3x 1980 2.5 1981 2.5 1982 2.6 1983 2.8 1984 3.0 1985 3.0 1986 2.3 1987 2.9 1988 2.9 (h) Annual Grewth Rates: (General Business)
- 1. Kwhr Sales Average 4%
- 2. Prit2 Per Kwhr Average 12%
Electric revenues included in the Forecast are a result of general business kilowatthour sale trends and ir.clude elements of rate relief which are programmed throughout the Forecaat as needed. 401 185
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,V @d + All ACIU1fl4T #0R LIEN HO. 2 g.
6-tf Puget SounJ P wer s tight Company mi I j'$ tiST OF CifdAATING UhlI5, ikAh5Mg$$ 40se, CISTRIBUTiON AND C[NERAL PLANT L.-g) P!1 CRC .*J.; C:h*J 0 f 0?, CE;!P"".fl 0 l C ur t *'t 0, . ,1; ;, :l t; I R:0 2 Or,MileuCT 4 04 PE AIDO *** I cQ (IN 2aluuSAND' of 00LLAA5) L._ - Percent Total V Puget Project Conp l e t i on Power Capacity 1979 13y g g 12,Q g g li@6, M j}88, g J,323, Date Ownership Dsd Macleer W P55 #3 $ 13.216 $ 10,314 8 18,102 l 7,68,7 1 6.175 8 2,969 12-84 5 1,21,0 skagit #1 3),619 11.420 72,784 98,577 187,540 68,589 $ 56,897 $ 27,241 l 3,688** $ 2,838** $ 2,508+e 9-86 40 1,228 PeLble springs #1 2,329 6,778 21,958 38.,947 41,301 44,054 42,417 31,05) l 7,201 4-87 21,88 I,200 sta91: A2 l,961 12,200 52,25) 73,842 135,106 119,528 79,504 69,239 22,13) 9-68 40 1,288
*ct,ble spr ings #2 14I 24 2,656 20,217 29,610 58,985 53,81S 50,995 35,015 27,138 4-83 1,26c 16.123 23.5 19io Projected Plant
- 7,570 6,594 13.39) 32,600 38,675 42,38) 55.591 59,198 40,598 5 7, f.75 42.c68 12-90 20 1,200 1931 ProjecteJ Plant
- 2.839 5,039 6,9s6 84,897 34,491 4c 802 44,714 58,718 62,572 42,872 60,88) 12-91 20 1,200 1991 ProjecteJ Plant
- 1.511 3.208 5,667 7,846 15.849 38,393 45,457 49,910 65,'548 69,909 7-93 20 1,200 1994 Frojected Plant 4 1,603 ),40u 5,996 8,280 16,722 40,544 48,048 52,705 69,358, 20 1,2c0 8-98 1995 ProjecteJ Plant * ),399 7,192 12,651 8 7,4 ?f, 35,328 85,541 101,417 118,524 9-95 40 1,200 e
1937 ProjecteJ Planta 3,794 8,005 34,094 19,518 39,438 95,768 9-97 40 1,200 1939 Projected Plant
- 3,172 6,703 LI,799 16,35) 7-99 30 1,200 2000 Projected Plant
- 7,079 12,483 7-2000 30 8,200 Co n t 7 ?e rf; t t : ',aC Coopleted 50 709 l tsistrip 3 3,461 f.2,5c8 45,670 40,134 19,359 7-83 25 Juo 1 'olstrip 4 4,09) 7,545 20,643 18,524 22,087 21,04) 5-84 25 700
. Oil ~1930 Conbustlun Turbine 2,386 16 10-80 300 179 1381 Coad,us t ion Tur bine _M 36 10-88 400 179
- sub-Tutal Generation $ 66,100 $153,58' $206,39) I 2 9 7,f 19 8 369,177 $ 431,006 $396,439 8 369,692 8 361,952 5 365.765 8 197.347 1 480.850 M cc 16,801 26.551 42,587 65.915 90,137 .41),480 14),526 104,755 138,116 148,956 125,668 155.1,09 ceterred Tames _ Z JtR 7d11 _l d? 8 l .2ili IE8_ l _Z,4tl l L6,il 2Lf /1 j!jfhj ag4n _LLM1 Tutaa i J!1,b1 112.El i M d'd iJMAM i EM?1 i ,EW.18 I14 lid i Ms.W1 iin.lu i DLlu I E.lal i11Lm 3
Cenu ation l 66.100 5 151,581 5 2c6,39) I297,819 8 369,117 5 431,006 $ 396,439 $ 369,692 4 367,952 5 365,765 8 397,347 $ 480,850 Nuclear f uel ( Aelo4Js) 9,932 4,540 1,795 38,062 10,219 47,786 48,846 95,654 102,c07 tu j er fransmission 128 2,658 45,412 20,117 7,34 7 2,147 5,278 myg 3 , 0 18, 2.779 525 s c ,, *p T80 416,81) 99,429 116,424 137.847 150,215 167,492 191,404 28),546 225,679 253,83) 284,285 329,292 C~3 Ce ne r a l P l an t _16 831 J.L.2d 26,36) _2lgi 30.507 IfW8 18,47) 20,121 25,17) H O tu 27.451 27.969 )I,7jg N M t-e
- Total Construction 4HM EspenJitures I MM21 1211dil $ 3 1 121 l i21&2 11/ilf.5 l il!',M I!':1115 lii!M $ ff.5 fil $ f%MI $ 80' If5 $ 9'*Ll?3
- w I
H u fi.ot line items intiuun u..ssa su"> s s us,i on so t t' -,,u 6.vi t.li 46 a saaes e,f plant es.J Initial iuci sosa. (caceuoes erpt and associated tan Ite,ns shr=en t,elow). C3 * < Decunissioning costs of first core lo4J.
- These plants are not nm planneJ, however, the Company's long-range forecast inJlcates the neeJ for eJJitional base load generation la the 1990-2000 period, g for the purpose of this stuJf it has t.een assumed that 1,200 see generation units svill I.e constructed to meet the projected need even though the type, slas, anJ location of such units has not laean determineJ.
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TABLE 4-1 PUGET 6/1/79 PUGET SOUND PONER & LIGHT COMPANY HISTORICAL FINANCIAL CAPABILITY Millions of Dollars 1973 1974 1975 1976 1977 1978 Total 21ectri c Construction Expendituras S 59 S 94 S106 S 99 S107 $141 $606 External Financing First Mortgage Bonds 0 60 30 40 0 65 195 PC Bonds 20 0 0 0 7 0 27 Preferred 15 0 15 22 28 0 80 ccmmon 0 13 18 26 35 38 130 Total 35 73 63 88 70 103 432 Annual Electric Revenuel/ Increase Awards 0 23 0 28 0 0 51 Year-End Equity Ratio (percent) 44 41 42 45 30 49 1/A 1979 award amounts to an increase of S32.6 million based on a 1977 test year. i.0
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TABLE 4-2 PGE 6/1/79 PORTLAND GENERAL ELECTRIC COMPANY HISTORICAL FINANCIAL CAPABII 'TY Millions of Dollars 1973 1974 1975 1976 1977 1978 Total Electric Construction Expenditures $148 S128 $176 S168 S197 S269 $1086 External Long-Term Financing 92 87 183 213 248 211 1034 Annual Electric Revenue Increase 26 13 37 37 33 34 180 Year-End Equity Ra tio (percent) 45 49 47 48 46 46 40i i9r D/
TABLE 4-3 PACIFIC 6/1/79 PACIFIC POWER & LIGHT COMPANY HISTORICAL FINANCIAL CAPABILITY Millions of Dollars 1973 1974 1975 1976 1977 1978 Total Electric Construction Expenditures $166 $238 $248 $219 $219 $229 $1319 External Long-Term Financing 55 188 229 212 219 113 1015 Annual Electric Revenue Increase Awards 0 32 22 30 42 7 133 Year-End Fluity Ratio (percent) 43 42 47 45 45 47 401 i92 22-
Tile IJASilINGTOh IJATER PotJER COMPAriY liistorical Financial Ca> ability Millfons of liollars 1973 1974 1975 1976 1977 1978 Total Electric Construction Expenditures (1) $22 $23 $28 $41 $47 $57 # 218 External Financing. First Mortgage lionds 20 25 30 75 PC lionds Preferred Stock 25 25 Consnan Stock (2) 5 1 8 16 23 53 Total 25 1 33 46 48 153 Annual Electric Revenue: Increase Awards 4 3 2 11 20 (3) Yeat-end Equity Ratio (percent) 35 34 36 38 3') 45 (1) locludea Al'UI)C . (2) Common Stock includes amaunts from sales to public and e....loyees. (3) Includes rate relief granted by the lJashington, Idaho and FERC Jurisdictions.
<n :C 0 N>>
H H tn N to t1 4NM to D- mu o oa Fin.uice Dept. lEll: db yA y b -l')- s -> N w U
TABLE 4-5 PUGET 6/1/79 ATTACHMENT FCR l TEM NO. 2h FINANCIAI. STATISTICS 12 months ended 2/29/79 12/31/78 12/31/77 12/31/76
< dollars in millions)
Earnings available to common equity S 37.4 5 36.4 S 26.7 5 24.9 Average common equity 5319.7 S312.1 5257.3 5026.9 Rate of return on average common equity 11.63% 11.66% 10.364 11.21% Times total interest earned before FITr Cross income (both including and excluding AFOC) + current and deferred F:7 e total interest enarges + amorti:ation o: debt discount and expense - Including AFOC 2.60 2.62 2.43 2.49 Excluding AFOC 2.27 2.30 2.19 2 . .' 3 Times 1cng-term interest e. 9ed before FT-Grose income (botn including and txcluding AFOC) + current and deferred FIT , long-term interest charges + amorti:stion of debt discount and expanse - Includiag AFOC 2.88 2.39 2.61 2.72 Excluding AFOC 2.51 2.54 2.35 2.44 ac .- ratings (end of period ) S t. dard and Poor's BBB SSB 388 SBB Moody's Saa Saa 3aa Baa Times interett and preferred dividends earned after itT: Gross income (both including and excluding AFOC) e tocar interest charges + amoett:aton of debt discount and expense + preferred dividends. Including AFOC 1.83 1.33 1.69 1.71 Excluding AFOC 1.56 1.57 1.50 1.51 AF"0C S 12.1 S11.2 5 7.7 5 7.4 Net Lncome after preferred dividends S 37.4 S36.4 5 26.7 5 2 4. 9** t 32.6% 30.954 23.7% 29.756 Market price of common S 16.375 516.750 3 17.000 $15.438* Ecok value of common S 13.62 518.63 S 13.363 517.985* Market-cook ratto (end of period) .38 .90 .93 .36 Earnings siail. for c'imon less AFCC + depreciation and amurttration, deferred taxea, and invest. tax credit ad3ust. - deferred. S 57.1 55c.2 S $3.4 S 55.7'* Common dividands S 26.0 S24.4 S 18.6 S 15.2 Ratto 2.2 2.3 2.9 3.7*+ Short-term debt Bank loans S S 1.0 S S 13.0
- ommercial paper 5 4.5 531.3 5 26.0 5 6.9 bg h hb .
TABLE 4-6 PUGET 6/1/79 12 months ended 2/29/1979 12.'31/1973 12/31/1977 12/31/1976 ecollars tn ,ti. ensi Capitalt:stion (Amount & Pareent) Long-term deot S471.3 48.7% $471.6 51.5% $405.7 50.5% S400.6 55.1% Preferred stoc.< 146.0 15.1 96.5 10.5 99.0 12.3 84.4 11.6 Commen equity 350.1 36.2 348.6 38.0 298.a 37.2 242.2 33.3 S467.4 100.01 5016.7 100.01 5803.5 100.00% $727.2 100.11
- Adjusted for ecmparative purposes to reflect the effect of a 2-for-1 ccmmon stock split in June, 1977.
After a net ex ordinary inc:me of S6,530,000 from the cumulative effect of a enange in .ccounting policy. e' , .
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TABLE 4-7 AiiACl!4L::T FCR , :: ,0 . 2 . h . PGE Fli;AhCIAL 51AT:5 TICS 6/1/79 12 months' endec 1 ^.73 1977 1975 ( c o l '. a r s fr'n - i i fi W-Earnings avcilable to cc=cn equity S 42.5 S 23.3 $ 40.2 Avccc9e cc=en c;ui ty' S459.6 S401.3 S332. Rate of reu:en on average c;=cn equity 9.247. 5.81 12.09 Times total interest earned before FIT: Gross incoma (Enth ir.cluding and c):cluding AFOC) + current and deferred FIT total interest chergcs + aTortization of debt disccunt and expense 1.98 1.30 2.24 Tines long-term interest earned before FIT: - Gross inccme (both including and excluding AFDC) + current and deferred FIT + long-term interest charges + cmcrtization of debt discount and expense 2.33 2.01 2.59 Cond rctings (ead of period) Standard ar.d Poor's 333- BBB- BBB-l'oody's Br: Eaa Baa Times interest and preferred dividends carr.ed after FIT: Grcss income (50th including and excluding < AFDC) + total uterest cherges
- c=ortiza-ion of debt discount and expense + preferred dividends. 1.64 1.44 1.79 AFUDC S 28.6 S 17.5 S 15.4 Net inccme af ter preferred dividends S 42.5 S 23.3 S 40.2
% 67.3: 75.1% 38.3:
Market price of cot cn $16.75 S 19.375 S 20.37 Bock value of cc=cn $18.42 S 18.45 S 13.94 Market-book ratio (end of period)* 90.9 105.07. 107.6% i Earnings avail. fcr cc=on less AFOC + i depreciation and ainortization, deferred taxes, and invest. tax credit adjust.- deferred. S 59.3 S 53.1 S 57.7 Cc=on dividends S 36.4 Ratio S 42.5 S 30.0 139.5: 145.9*: 192.3 Short-term debt. Bank Icans . Co= ercial paper S 71.0 S 45.0 $ 10.0 _o_ S 19.8 Capitalization (Moun* & Percent) - i Long-tern debt S735,119 53.8% S656.7 53.7% $540.8 52.4; Preferrec stock $151,500 11.1% S154.5 12.6% S130.5 12.6: Co= cn equity f478,759 35.1% S410.3 33.77. $361.1 35.0;
- If subsidiary company, use parent's da ta. .
( P00R ORBK
A t !.u c .u.. i ra i.u. ..J. o.o PACIFIC PCWER & LIGHT COMPANY TABLE 4-8 D
'ACI'"'C
^
FINANCIAL STATISTICS e/1/79 12 Months Ended December 31 1978 1977 1976 (Dollars in Millions) Earnings available to common equitr 88.6 74.6 74.5 Average co=:en equity '38.4 664.3 595.4 Rate of return oc average common equity 12.007. 11.23". 12.52". Times total interest earned before FIT: Cross income (inch AFDC) + current and deferred FIT -- total interest charges + amortization of debt dis- 2.60 2.28 2.36 count and expense - Times long-ter= interest earned before FIT: Cross income (incl. AFDC) + current and deferred FIT - long-term interest charges + amortization of debt discount and expense 2.63 2.33 2.49 Bond ratings (end of period) Standard and Poor's 3BB+ B3B+ 3BB+ Moody-s Baa 3aa Baa Times ic tere st and preferred dividends earned after FIT: Gross income (incl. AFDC) - total interest charges + amortization of debt discount and expense + preferred dividends 1.87 1.83 1.92 AFUDC 27.3 15.0 19.5 Net income after preferred dividends 88.6 74.6 74.5 AFDUC as a ". of earning 3available 30.8 20.1 26.2 to common Market price of common 19.75 21.25 24.125 Book value of ccmmon 20.80 20.25 19.73 Market-book ratio (end of period) .95 1.05 1.22 Earnings avail. for common less AFDC
- depreciation and amortization, deferred taxes, and invest. tay credit ad j us t . -de f erred 144.6 116.9 102.8 Common dividends 66.8 60.9 52.4 Ratio 2.16 1.92 1.96 Short-term lebt Bank loans 6.0 None None Ce mercial paper 13.5 None None Capitalization $
. $ ". S .
Long-term debt 1126.5 52.8 1,282.3 59.2 1,073.5 57.7 Preferred stock 227.2 10.7 187.2 8.6 157.2 8.4 Common Equity 778.2 36.5 698.7 32.2 629.9 33.9 n, $f,)
Tile WASillNGTON WAltR FOLTR COMl'ANY Attachment for Item No. 2.h Financial Statlatice 12 Honths EnfeJ 3]31/79 g8 1977 1976 (Dollare in Hillions) t tarnings available to consuon equity $ 27 26 19 AveraEe common equity 22
$ 205 198 179 164 Itate of return on average conunon equity 1 13.2 13.1 10.6 i 13.4 Time s total interest earned before FIT:
Cross income (Loth including and excluding AfDC) + current and defe: d FIT e total
- interest charges + amorti..elon of debt X 2.99 2.99 2.05 2.73 discount and expense X 2.76 2.78 C"3 Tiaie s long- t en en interest earned before FIT 1.89 2.63 Cross income (both including and excluding
- AIDC) + current and deferred FIT , long-term interest c han ge s + amor tization of 3.20 X 3.20 2.11 2.86 debt discount and capense X 2.96 2.98 1.94 2.75 g
NQ
~%
Bond ratings (end of period) Standaid and ruor's A A 7J Hoody's A A A A A A "P
- Times interost and preferred dividends earned after FIT:
Cross income (bot h including and excluJing Not Applicable I""'""' AIDC) e total interest charges + amortize.tton of d c-L t d iac oun t and expense + preferred 2.24 No Preferred 5tock X 2.20 Outstanding dividends X 2.04 - 2.02 At bC $ 4 4 3 tie t income after prefe red dividends 2'
$ 27 26 19
% 22 1 .15.8 14.8 15.6
. 7.6 tLi r k e t price of common (enJ of perioJ) $ 22.78 21,75 book value of con. mon (end of period) 22.00 25.375
$ 24.56 23.88 22.92 22.17 tlasket-book ratio (cnd of period) .93 .91 .97 1.14 barnings av.iii. f o r c ominon less AFDC +
depreciation and amortization, deferred ' taxes, and invest. tax credit adjust. - A deferred
$ 38 37 c, Conanon d iviitend s 29 31 m g ej
$ 17 16 Ratio
.45 14 12 N>>
.43 48 .39 Short-term debt
('] % tunk loans LO
$ 22 15 28 "1 A Cou.mercial paper e .m Capitalization (Anennt 6 Percent)
$ hI td 1/31/79 1978 1977 1976 A3 1.ong- t e a m de t.t 301 55.0% 295 55.2% 281 60.81 Preferred stuck 289 62.11 25 4.61 25 4.6% Common equity 221 40.4% 214 40.2% 181 39.2% 176 31.9%
Attachment 1 6/1/79 Statement of Qualifications RUSSEL E. OLSON Puget Sound Pcwer & Light Ccmpany NAME: Russel E. Olson PRESENT POSITION: Treasurer - responsible for cash management, financial reporting, financial planning, the raising of short-term capital requirements, including the nego-tiation for and administration of bank credit lines and, together with the Vice President-Finance, raising the long-term capital requirements of the Company. EDUCATICN: University of Washington - BA in Accounting (1959); University of Washington - Executive Development Program (1968); Irving Trust - Public Utilit/ Financial Seminar (1975); Pacific Lutheran University - graduate work in finance (1974- ). PROFESSIONAL AFFILIATIONS: Financial Executives Institute, North-west Electric Light & Power Association. EXPERIENCE: Puget Sound Power & Light Company - various positions in Accounting Department (1959-1961); Coopers & Lybrand - Auditor (1961-1962); Puget Sound Power & Light Company - Special Accountant, Taxes (1962-1965); Puget Western, Inc. (a land development subsidihry) - Epecial Accountant (1965-1968); Assistant Vice President (1968-1969); Puget Sound Power & Light Company - Budget Supervisor (1969-1970); Financial Planning Supervisor (1970-1972); Manager, Financial Planning (1972-1974); Assistant Treasurer (1974-1977); Treasurer (1977- ). 40\ i99 27
Attachment 2 6/1/79 Statcment of Qualifications MICHAEL E. COBERLY Portland General Electric Company I graduated with high honors from Augustana College in Rock Island, Illinois, in 1968 with a Bachelor of Arts degree in Business Administration. My undergraduate degree included a heavy emphasis on accounting and econcmics. In December 1976, I com-pleted my MBA at the Univers ty of Iowa. My graduate education emphasized econcmic development. I am currently pursuing certifi-cation as a chartered financial analyst. I have been associated with the utility industry for 11 years. In 1968, I joined Iowa Illinois Gas and Electric Company. During the nine years that I worked for the Company, I held four position. I was budget accountant for a year and was responsible for prepara-tion of data used in preparing the operating budget, construction budget, and 20-year forecast. I prepared data for analysis of budget variances. For three years, I worked ac an electronic data processing auditor designing audit procedures and conducting audits to assure proper control of data processing systems. For two years, I worked as budgeting and forecasting supervisor. In this position, I was responsible for the Company's budgeting and forecasting activities, including the preparation and analysis of construction and operating budgets, financial projecticas, and long-range forecasts. During the last three years that I was with Icwa Illinois Gas and Electric Ccmpany, I was system development supervisor responsible for the development and maintenance of major accounting ccmputer systems. In May of 1977, I joined Portland General Electric Ccmpany as senior financial analyst. It was my responsibility to integrate financial plans, regulatory strategies, and construction programs with projections of load and expense to produce corporate financial plans and alternatives. I was responsible for financial analysis of specific projects and planning alternatives. On December 1 cf 1978, I became the branch manager of revenue requirements. It is y pri-mary function to perform economic and financial analyses, engineering econcmic studies, and to provide instruction in the area of engineering economics. It is also part of my responsibility to identify and analyze economic concerns facing the Company in the near- to midterm. I am a member in good standing of the Financial Management Association and the Portland Society of Financial Analysts. 401 200 Jo
Attachment 3 6/1/79 Statement of Qualifications LARRY S. PACK Pacific Power & Light Company PRESENT POSITION: Senior Cost Analyst - responsible for analytical activities involving econcaic and financial problems including but not limited to cost control, review sig-nificant contract activity, and negotiate and consummate lease transactionc. EDUCATION: University of Washington - BA in Business (Quantitative Methods) - 1972 University of Utah - MBA (Finance) - 1974 Certified Public Accountant - State of Washington - 1976 to Present EXPERIENCE: Prior to joining Pacific Power & Light in August, 1978, I worked for the Boeing Ccmmercial Airplane Company for approximately five years in varicus financial areas. My last position at Boeing was Supervisor of Financial Planning and Budget Reporting and was primarily responsible for business analysis and financial forecasting. go\ 2CI 31
Attachment 4 6/1/79 Statement of Qualifications JAMES M. COOMBJ The Washington Water Power Company PRESENT RESPONSIBILITIES:
- a. Chief Financial Officer. Direct financial planning and determine financing recommendations that will provide all necessary funds for WWP and its five subsidiaries. Pro-vide administrative supervision to the Financial Super-visor on finance, budget and forecast matters.
- b. Chief Accounting Officer. Provide general supervision to the Treasurer on accounting matters including records, reports and interpretations for WWF and its five sub-sidiaries.
- c. Provide general supervision to the Controller in rate, regulatory, and audit matters.
- d. Serve as a corporate liaison officer for Board Audit Com-mittee with independent accountants.
EDUCATICN:
- a. Formal accounting education through International Account-ants Society.
- b. Executive courses or seminars at University of Idaho, Harvard Business School, Irving Trust Financial Seminars, and EEI Hershey Graduate Management Course.
PROFESSIONAL AFFILIATIONS:
- a. American Gas Association (1) Budgeting Sub-Committee - 1966
- b. Edison Electric Institute (1) Accounting Division (a) Chairman - 1976-77 (b) Vice Chairman - 1975-76 (c) Member Executive Ccmmittee since 1970 (2) Finance Division (a) Member Executive Committee
- c. National Association of Accountants (1) Member 1969-1971
- d. Pacific Coast Gas Association (1) 1974 Administrative Executive Committee Chairman (2) 1973 Administrative Executive Cctmittee Vice Chairman (3) 1972 Administrative Services General Chairman (4) 1971 Administrative Services Vice Chairman (5) 1970 Spring Conference Sponsor - Parallel Acccunting Sessions (6) Member Administrative Services Executive Committee since 1969 h0\ U
s
- e. Northwest Electric Light & Power Association (1) 1962 Accounting Session - General Accounting Chairman (2) Member since 1953 EXPERIENCE:
- a. Employed by The Washington Water Power Company since July 1937 (includes 4 years' m.ilitary service during World War II)
- b. Positions held with the Company (1) Vice President - Finance - 1 year (2) Vice Prcsident - Finance & Treasurer - 3 years (3) Treasurer - 5 years (4) Assistant Treasurer - 8 years (5) Special Accounting Supervisor - 7 years (6) Statistics and Research Accountant - 2 years (7) Various Clerical Pcsitions and Military Service Leave - 16 fears 401 200 v
33
UNITED STATES OF AMERICA - NUCLEAR REGULATCRY CCMMISSICN BEFORE THE ATOMIC SAFETY AND LICENSING BCARD In the Matter of )
)
PCGET SOUND POWER & LIGHT COMPANY,) DCCKET NCS. et al. )
) 50-522 (Skagit Nuclear Power Project, ) 50-523 Units 1 and 2) )
)
CERTIFICATE OF SERVICE I hereby certify that the folicwing: APPLICANTS' TESTIMCNY ON FINANCIAL QUALIFICATIONS in the above-captioned proceeding have been served upon the persons shown on the attached list by depositing copies thereof in the United States mail on June 1, 1979 with proper postage affixed for first class mail. DATED: June 1, 1979 N _F. Theodore Thomsen Counsel for Puget Sound Power & Light Ccmpany 1900 Washington Building Seattle, Washington 98101 40i 204
Date: Jtr.e 1, 1979 Valentine B. Deale, Chairman Robert C. Schofield, Director Atomic Safety and Licensing Board Skagit County Planning Department 1001 Connecticut Avenue, N.W. 218 County Administration Building Nashington., D. C. 20036 Mount Vernon, WA 98273 Dr. Frank F. Hooper, Member Richard M. Sandvik, Esq. Atcmic Safety and Licensing Board Assistant Attorney General School of Natural Resources 500 Pacific Building University of Michigan 520 S.W. Yamhill Ann Arbor, MI 48109 Portland, OR 97204 Gustave A. Linenberger, Member Roger M. Leed, Esq. Atomic Safety and Licensing Board Room 610 U.S. Nuclear Regulatory Commission 1411 Fourth Ave..um ouilding Washington, D. C. 20555 Seattle, WA 98101 Alan S. Rosenthal, Chairman CFSP and FOB Atomic Safety and Licensing E. Stachon & L. Marbet Appeal Board 19142 So. Bakers Ferry Road U.S. Nuclear Regulatory Ccmmission Boring, CR 97009 Washington, D. C. 20555 Robert Lowenstein, Esq. Dr. John H. Buck, Member Lowenstein, Newman, Reis, Axelrad Atomic Safety and Licensing & Toll Appeal Board 1025 Connecticut Avenue, N.W. U.S. Nuclear Regulatory Com.Tission Washington, D. C. 20036 Washington, D. C. 20555 Warren Hastings, Esq. Michael C. Farrar, Member Associate Corporate Counsel Atomic Safety and Licensing Portland General Electric Company Appeal Board 121 S.W. Salmon Street U.S. Nuclear Regulatory Ccmmission Portland, OR 97204 Washington, D. C. 20535 Richard D. Bach, Esq. Docketing and Service Section Rives, Bonyhadi, Drummond & Smith Office of the Secretary 1400 Public Service Building U.S. Nuclear Regulatory Commission 920 S.U. 6th Avenue Washington, D. C. 20555 Portland, OR 97204 (original and 20 copies) Canadian Consulate General Richard L. Black, Esq. Dcnald Martens, Consul Counsel for NRC Staff 412 Plaza 600 U.S. Nuclear Regulatory Commission 6th and Stewart Street Office of the Executive Legal Seattle, WA 98101 Director Washington, D. C. 20555 Nicholas D. Lewis, Chairman Energy Facility Site Evaluation Council 820 East Fifth Avenue Olympia, WA 98504 Thcmas F. Carr, Esq. Assistant Attorney General Temple of Justice Olympia, WA 98504 40i 205 5/16/79}}