ML19296B346

Provides Guarantee Under Retrospective Premium Sys.Forwards Documents Demonstrating Adequate Cash Flow.Excerpts from 1979 Annual Certified Financial Statements & 1980 Certified Cash Flow Projection Encl

ML19296B346
Person / Time
Site:	Point Beach, 05000502
Issue date:	02/15/1980
From:	Remmel J WISCONSIN ELECTRIC POWER CO.
To:	Saltzman J Office of Nuclear Reactor Regulation
References
NUDOCS 8002200436
Download: ML19296B346 (11)

Text

. .

O WISCODSIn Elecinc oC..en cc.rm:. r. . .

31 4 MICHIGAN PO 90( 7045 Vf LWAU$EE. wi 53?01 Feb rua rf 13, 1930 Ir. Jerome Saltzman, C' aie f Antit rus t & Indemnity Group Suclear Reactor Regulatica

.;uclear Regulato:/ Commission Jasaington , D. C . .'ujo3

Dear lir. Saltzman:

We are nerewita providing our guarantee under the retrospective premium sys tem wnica oecame ef fective August 1, 19 7 7 pursuant to:

1. Certain provisions of tne 1973 Amendments to the Price-Anders on Ac t ,

2. Certain requiremeats relating to guaranteeing retrospective premiums puolisned oy the ;uclear Regulatory Commission in the Federal Regis ter on January 31, 19 77 (42 F.R. 46) ,

3. Your letter of June 15, 1977 addressed to Wisconsin Electric Power Company and Wisconsin Michigan Power Company, and 4 Our reply to your letter of June 15, 1977 dated Juen 27, 1977 wita a saowing of adequate casa flow as detailed in the documents attached and lis ted below wnica are required in utilizing tnis alternative:

1. Annual certified financial statements for year 19 79.

2. Certified Cash Flow Projection for year 1980 with narrative statement.

Sincerely, s "

k ' ,( ( O A N d '

s J. G. Remmel/bjk Treasurer

\

h\

L3 8002200 ),~

. . Wisconsin E!ectnc Power Co. Annual Report 1st proof 131 do - @

2nd proof - 21380 6.)

INCOr.1E STATEf.1ENT rmnceocceruscasi -

..sco .a nacia.c ec<.u ccuamy systru 1979 1978

, (Trousancs cf Co.iars)

Operating Revenues Electric . .5667.757 3583.162 Gas . .

191.238 161.177 Steam .

8.570 8.272 Total Operating Revenues 867,565 752.611 Operating' Expenses Fuel (Note A) 179.050 155.615 Purchased power 67.863 48.568 Gas purchased for resare .

143.844 115.948 Other opera!!cn expenses (Note B) . 133.442 112.573 Maintenance . 66,824 55.879 Taxes other than inccme taxes . 34,464 35.049 Deprec:ation (Note C)

Straight line .

59.855 54.160 Deferred income taxes (Note D) 17,192 3.873 Federal income tax (Note D) . .

12.452 31.904 investment tax cred:t adjustments - net .

27.657 23.946 State income tax (Note D) 6.931 6.887 Total Operating Expenses 749.624 644.402 Operating income . . . .. .

117.941 108.209 Other income and Deductions interest income .

2.491 1.659 Al!cwance for other funds used during construction (Note E). 7.535 3.372 Misce!!aneous - net .

185 (322)

Income taxes (Note D) . . .

(1.707) (1,184)

Total Other income and Deductions 8.504 3.525 income Before Interest Charges . . .. .

126.4e5 111.734 Interest Charges Long term debt .

40.875 36.998 Allowance for borrowed funds used during construction (Note E) (6.165)

Other .

(1.895) 9.203 5.026 Total Interest Charges 43.913 40.129 Net income . . . . . .. . 82.532 71.605 Preferred Stock Dividend Requirement . .

12.368 7.337 Eamings Available for Common Stockholders .

.S 70.164 S 64 268 Average Number of Shares of Common Stock Outstanding (Thousands) . . ..

18.705 18.354 Earnings Per Share of Common Stock . . . . . . . 53.75 53.50 The notes on pages 22 through 28 are an integral part of the financial statements.

,1st procr . :-a i.ev . A 2nd proof - 213 80. Ca; RETAINED EARNINGS STATEMENT-veta esceoocetunasi W5 CONS.N ELECTRIO PO*ER COMPANY s f sT[M 1979 1978 tinousan:u of ovars:

Balance. Januar/1 .S225.022 $201.424 Additions Net income 82.532 71.605 Transfer of amcrtization reserve - hydroe!cctr:c projects -

305 307.554 273.334 Deductions Dividends - Cash Preferred stock . 12.178 7.088 Common stock . _ 43.784 40 537

$5.962 47.625 Cost of issuing capital stock . . 104 687 56.066 48.312 Balance, December 31 .S251.488 5225.022 STATEMFNT OF CHANGES IN FINANCI AL POSITION -vexac~osoce:everasi 1979 1978 (Thousands of Doitars)

Financial Resources Provided Operations Net income . .. .S 82.532 5 71.605 vepreciation - straight line . 59.855 54.160

- deferred income taxes 17,192 3.873 Accumulated deferred investment tax credits . 23.598 19.942 Nuclear fuel expense 12.767 8.782 Allowance for funds used during construction . (13.700) (5.267)

Total from operations ... . . 182.244 153.095 Common stock . . . . . . . 14.864 5.516 Preferred stock . . ..

59.455 Long term debt . . .. . . 75.525 104.882 Sale of nuclear fuel . .. .

5.192 Release of construction funds held by trustees . 10,695 -

Short term borrowings . .. .. . . 108.559 3.675 Contributions in aid of construction . .. .. . 4.259 3.338 Miscellaneous .. .. . .. 1.004 (2.528) 5397.150 5332.625 Financial Resources Used Construction expencitures . . . . .5252.258 5220.563 Nuclear ft.al . .. . .. 37,362 33.436 Dividends .. . . . .. 55.962 47.625 Retirement of long term debt . . . 9.511 12.165 Construction funds ne!d by trustees 23,447 12.153 Increase in working capital (cther than sncrt term borrowings and tong term ceot cue currently) 18.610 6.683 S397.150 5332.625 The notes on pages 22 through 28 are an integral part of the financial statements.

1Q

1st proof 131 @

l 2nd proof - 213 80 - @

l i D ALANCE SHEET-etetMuns, wr5 CON $iN ELECrR.C PQtw&R COMPANY SYSTEM 1979 1978 (incutands of Oudars)

ASSETS Utility Plant E!ectric $1,571.082 31.511.172 Gas 184.642 173 918 Steam 17.274 17.161 1,772.998 1.702.251 Accumulated provision for depreciation (725.821) (653.291) 1,047,177 1.048.960 Construction work in progress . 411,397 217.108 Nuclear fuel 94,709 55.420 Accumulated provision for amortization . (11,773) (2.617) 82,936 52.803 Net Utility Plant 1.541,510 1.318.871 Nonutility Property . . .

7.453 - 6.539 Accumulated provision for depreciation (630) (383)

Net Nonutility Property 6,823 6,156 Construction Funds Held by Trustees (Note F) . 24,905 12,153 Current Assets Cash . . 5,026 5,947 Temporary Cash investments 11,098 2.900 Accounts receivaole (Note G) 51,544 50.013 Accrued utility revenues . 71,686 59,787 Fossil fuel (at average cost) 59,179 46.665 Materia!s and supokes (at average cost) .. 34,131 25,193 Prepayments and other assets . . . 6,649 6.588 Total Current Assets 239,313 197,093 Deferred Charges and Other Assets . . ..... .. . 18.113 30.898

$1.830.664 $1.565.171 The notes on pages 22 through 28 are an integral part of the financial statements.

on

• Wisconsin Electnc Power Co. Annual Report 1st prool - 131 @

2nd proof 213 @ ,

1979 1978 (Trousanas cf Cears)

LIABluTIES Capitalization Common Stock Equity (Note H)

Common stock (au ncnced 41000 000 snares. 310 par value, issued 19.C55.720 and 18.473.747 snares) .S 190.857 5 184.737 Premium on capital stock 144.040 135.296 Retained e'arnings . . 251.488 225.022 Total Common Stock Equity 586.385 545.055 Preferred Stock (Note J) . 160,451 160.451 Long Term Debt (Note 1) .. 649.227 589.576 Total Capitalization 1.396.063 1.295.082 Current Liabilities Long term dett due currently (Note 1) 13,493 7,662 Notes payaD!c to banks (Note K) . 19.700 21.441 Commercial paper (Note K) . .. 114.322 4.022 Accounts payable . . . 69,326 54.711 Payroll and vacation accrued . . 12.309 11.171 Taxes accrued -income and cther . 33.774 26,732 Interest accrued . . . . . 12,488 10.600 Customer deposits ..... . . . . 1,998 1,863 Other . .. . . . . 5.563 6.771 Total Current Uabilities 282,973 144.973 Deferred Credits and Other Uabilities Accumulated deferred investment tax credits . 73.554 49,956 Nuclear fuel costs accrued (Note D) 19.646 17.372 Unamortized accrued utility revenues . 29.556 33.778 Other . .. . . . 6.630 6.027 Total Deferred Credits and Other Uabilities 129.386 107,133 Contributions in Aid of Construction .. . ... .... 22,242 17,983 Commitments (Note L) and Contingencies (Note M)

S1,830.664 31.565.171 The notes on pages 22 through 28 are an integral part of the financial statements.

, 2nd peool 2 te W

• y , ,1 g ,

OTES TO Fif Nwsww w.l AfJCI <e m AL .cSTATEf4Et4TS m h h hO t

Summary of Sqmiscant Accounbng Pohcies A - Rental Expense General Total rental c pense was $16 fa1000 a 1979 arwl Tiiu .mcuui.fing records r.t the co'npany and 'is utabtf $20 909 000 rei in/H inn incu i<:2 t.h.ary , of suesnt.ar y .ve heet as rrc t _r t>cd tv 'he Mc'al 515 000 000 in t V3.n. 519 8% 000 in t Ja 'nr me Energ/ Th.gu;:;r y C.n ,:cen rrw cd *nr ooit,on cf nuc car fu(I Mah 's tense 3 it e oc: car fuct require'"et of 'N Au-C hca CcartMs.on of case can be terrneriamd t.y tr.C CMYv Or 'rt 2sar W,sconsin (PCCW1 Trm carscteed ', uncial on tan years' notice Ec : case et any own <> Ne' statemen!*, 'nC%J9 t' O acec';F'% cf Pe co'"tMny amt au'Omat'Ca9y terWiM*, at :he OmJ n' M +0"*"# cr 18

'is sutasa!Gncs. W scons.n Na'urai Gas Company and months a:ter remov.s from the ec 3ctor uniess 'nc BadQcr Sef ocu Comc3ny partts entend N te nn N M Fr G N M M pJy the fcsser fCr te unlmcf?'/CJ CLst c' lrn "LcGr Revenues fuet eri the c. cot N 'c;im . f e'"W' '1 h " cN'"Y Metcrs are f 03J Jnd 3c;xrt; ara t, Jcd rr onthly S nce r..n an u; un la gmruru a 1 e numt ltu nc January 1.1977 uuty ' eve ~,es nc<e t,cen recogm:co hegner cf such uramerneed cos: or 'a r mmt , rue on the accraal Dads and cc%d? cs:ma:Od amourts Rc"faicarmen!S 3r* WCc men'N t aWJ an ?"c for service rendered Out not bced Accrued utity 3 mount Cf nuCle3r 'uel '03snd and the amount of revenue of $',2 m,aion at Occer ccr 31.194 is ceing reased nuc' car fuei t>urned recorded as rCacnue :n e%Ji amcunts over a ten , car The nuCte3r fuet Icase 's treated as an Crc'3! n] ' ease period as prescr bed Cy PSCW by PSCW in cciermining revenue rcou,rements. and Fuel the value of tre ' cased fuel 's not ncluded in tno Ihc Cost of fossil and nuCl ear fuct is expensed in the cor@an(s rme DJsc Nt ree Jc3ser been accounic'l for as a cathtal tease. caucoses tc+cre (como tancs penod Consumed and indete minate ef:ce:3 or cor.cscand.ng ra:e.nalun yLClear futi esperise meiy des 3e est,ry.e for ortsite tre3tment AcVd have ci.Cn dec'eascj DJ OGO .n storage cf spent nuctear fact 'cr ten years for 1979 and 5d91000 n 1978 and an asset and removat from :rt, reac:Or No sarvage sate s correspond,ng licbaff cQual to Pe unamorblea cast of recognezed for scent nuc car fue! The accounnnq for the teased nucfear fuct would have tacen recorded at nuc! car fuct fo!cas the ratomak.ng ueatment for sucn Cecember 31.n the amoun:s of D 534 000 in 1979 costs and $21.499 C00.n 1978 Gas Purchased for Resale 8 - Pension Plans The cost of purcrased gas sold is eigensed in the Severas noncontrtbutcry peason c:ans cover a:I ehg cte pened !".e gas ;s rece:ved frcm tre pcehne sucpi.er emotoyes Ncemat emc cre cens on cost .s accrued Property and funded current:/ and untunced Encr servce habihty is amortizcc over oc iods frem ten to tnartf "Electnc and gas utitty creporty is recorded at or ginaf years The unfunded prior ser<ce siacmty of :N Cost, and s: cam utAty and nor'utAty procerty is pensen plans is not significant. Socstant a'id a.1 vcs:0d recorded at cost Acctons to utAly crecerty and and JCcrued berelds uncef tr'e p'a*s "3s0 Cean significant replacements are charged to utdat< otant at funded Pension expense was S7A49.CCO in 1979 and cost. Cost irctudes matenat. later and a:tcaance to' 55.715.000 in 1978 ,

funds used cunng corstruct.on (see Note E)

Replacements of rmnor items of property are charged C - Depreciation .

to maintenarco espease Tae C0st of deprec:aO'e Decreciation escense is accrued at strtgnt eine rates property. togo:her m:n removal cost less salvage. is cert.fied by PSCW Cecreciaron estes nctuce charged to accumulated provis.on for depreciar on es.imates of salvage at d clant removal cos:s Nuc: car J n property is ret red. plant depreciaton ra!cs provide for an amount to cover estimated plant decommissoning ecsts.

income Taxes Deterred incorre tan accounting is oracticed in resrect Additonal ocorec:aten is accrued in a**crdance eth i

~

to significant timing dMerences The feceralinvestment PSCW roouirements wn:ch is ecual to :Pe tan ef'ects at tax credit is accounted for on the de' erred basis and is timing differences related10 prcperty and Fuc! ear fuel including Onne oalty the use for tan curocses of  !

reflected in income rataciy over the hre cf the reiated property accelcrated ccoreciat en methods isco No o O}

Debt Premium, Discount and Expense D-Income Tax Expense {

Scfow is a summary of incorre far encerse and a  !

Long term dett pre %um or discount and expense of issuance are amertized by the stra.qht kne rretrod reconc halion of total encome tan evocose eth the tar 3

' over the hvcs at the acot issues Unamort: zed amounts expected at the lederal statutcry rate.

pcrtairmg to debt reaccurred 'cr s:nung fund purposes '979 tors are written off CurrerWty Pwasw in e aumeu t I

Curecrw tas essee w s 21,i to g n gre, Irawahris.:rd l'se res*H est.cheu i m ew d 21Cs1 23 ',HG ,'

0:lcerial ra.cs ctwers su tiepror. mern ,

e rocre t7'92 3911 tut.at be enume s rA 9a4 s e,r ru iricorm ectore iam ea.es stas !2i s1%an (uutNie's laa af fo hvi stasiasair e a.dr* $ 64320 s %9t2 Amoa.sco Nr tums uwd dur-v3 6 corisisur toi (6 302) (2 528) I slMio artrw'** fan art or fe"irme be s

g

'c4s re 3 027 s OOS g OrNr tm isem over 5'. of enrecac t ta i 02% rt 6em IrAid les Capr*Me  ;

s7;;

M 'M.1 . s. h.1..P.H

78.11 REV 0215 EXP 0130 RW SIZ. -

I Casey 17 TraJo Press tricotachers 5026-l7 Mootaus Pnne ng Company 4%5 o 80I02 Wiscons.n C4.ctric Po et Co. Annua neport .

ist proof 2 7 C0 y I 'I $ l 2nd proot . 2-14 8 9 the aggreg..te a acont cl Octc"cd rTo tDes J b efadQ H - Comnion Stock and Premium on Capital Stock n

onCued in ti o ccCumuded Dra '. nn 'cr eer rcC o cn UndCr the Aufvat e Cea n 1 N n.ccrr ent .aa Ob ii at Decenhr 31 aus 3140 253 N9 'n '9'9 +d Purchase Plan. sAs cf Cu 901 ;" ves ut Co rumn 1122.434 CCQ .o 1978 sfoCk were mado .n 1979 and ' ' t m snares ,o 197:3 In 1978 tSc Comcw tICd carn: Sr rCQnd; vm me P CCeco: frem me s.>es .me 3;J t 73.5,;, ,n :979 f a Intcmal Pevenue ScrwCo (:RSi or f

'ho years 197C-72 $3.140.013 in 1978 Sus Of Cwmon stccx under tec P'Jo(TRASC 9 The C;a.m3 secs a reNnd of 'cym aco+e tdes ter a2 Pc : ^! M Ac! C'OCa C vc "

the deducton Of s!Qt330 and C rYr ;,G",ts IOr sfCng we'e 185 072 shares ,c 1973 an 3 n 173 vares .a e

nuCicar fuci C.,ch == oc e ; me.wi as a canc r 1978 Proceeds nom the IRAW o ; 4erc t ,

deduction by IPS cn avJI cd tM rCung $1690 986 in 1979 and $2 367 709 tri 1976 7rc assessment swas *NC"3 ' rom a p<eccus re%M. inCrcase in prermum on Caatat stCCk ts tre eecess ci a

Managemer t is CWtSg me d ea 'Or.3nce Out Mc DioCecus from saMS o.cr Pe 310,3r vn%n cf ++ o pondog rCiclui'on flie CorPCand 'scOrJed the taa Cc"nmon s!C;k sold e' foci of thetc Costs for tre years 1970 78 am for 1979 by nicrea ,.ng the Current federat it Cnmc ras I -1.ang Term Ocbt n U"""*

provisions and normahrng those amou ts by reduc.ng Intil 1979 defened iccome taxes by $14 733 000 in 197a aN ,_,

r

$2.057.000 m 1979. resu.t.no in ne e fect on ner encome. De'ctred nuc ear fud Costs EC uod

• crc First Morto.v)* ecats reduced by the amounts of tapes 0Qeded hs ggn gne 3,,,, g y,,97, s s T578 2w Ses due TV7 to MS n 122 accounting iOr irComo tancs is o aCCCM3nce *i'n 2% Senes u 'M *#

amounts et $1682.000 in 1978 and 1307.C00 n 1979(*(({'d'$.

PSCW praCLce Ae'ated 'nterest was a::'uod in tne is 42s a ra r 3w Smr s oue oas 22 073 uw 3% s,,, ooc ,M 234sr E - Attowance for Funds Used During 4w sees due osa n ce2 M sti M9:1 Construction (AFOC) S % Sc'+1 ds* 17Jo is s7y a rni sw Sc es me i'm 25 5 AFCC is included in utdy plint aCCoun ts aM W= 3"$ h 'M7 M C" r represents the Ccst of certowed funds used during 1M9 m 6 r.

pfant CorstruC! ion and a rate ct return on stoCanciders' 1 000 t rao 6 25% See a: Scries due e dMCZ9 38 M5 Capital used for construC!iCn purDCses On the income Fw Sees due i9M 34 991 sta!cment tf e CCst of torrowed fuFds (OcfCro inC0rre

• m fares) #$ a reduct on of interest exDense ar'd IPe retu 63 'J00 &)300 8 4*. Scacs duo 20M on stCCkholdcrs' CaDelat is an item of nonCasn Ctrer 4 olo 6 45*. Se es . sue 200t>

to 0@

ir1Come 6 So% Sena: See es one Oc0F 2'Xfd so 300 aocoo tw Seres as 200s Ihe Company is limited by PSCW to Capitafitng AFCC

%,,,,, wxonsn v,en.g.n %c, only on CorstruCiton wont .n progress e:Ceed.ng 10% co nean, re ge t m Cecaa, .a i9771 of its net investroent rate tato Acvenues granted cy

{][L'[]

y PSCW in rate orders inCiude tre equivaient of a retum 24,4 2*

3% 3,,esa im 3 623 on investment in Construct.on work in orcgress cc:Cw 4% saws oue iMi 3 623 5 052 $ 077 this Imt. AFDC was Cacitanzcd in 1979 anc 1978 at a 4% Seres a,e 'M3 9 25 f 927f rate of 7*i. approved Cy PSCW 5%% $eaes cue '995 ,

11 $3'4 si 57) 6% Sews due 1991 m

~

g % 3,, , u ,gg 99 F %onstruction Funds rteld by Trustees 8% Scres M IM9 11 829 11 sh The construction 'unds were estachshed to fmance 'C " ' " ' 8 "" "

poCut on control and environmenf at imnrovement . % 3,,e u iscs 3 631 3su facihtres at the Compary $ new P'easant Prairs Power *w Scaes oue 1987 4499 4 504 65t3 65 3 Plant. Procceds t'om the saics of muniCical revenue dw Se'es due 1990 9 462 9.43s bonds issued by the Town of Ptcasant Prainc in 1978 6W Ser'es M iM2 93 g % Se,c g ,y, 9 73o and 1979 *ere depCs.ted m tre 'uncs under loan 9 912 9 941 8% Senes due 1996 agreements with the ComCany As a revenue Sou'Ce 629 991 <43'C3

' and Co!!Jteral for the 'o30s. Pc COmcany haS .ssued to ocuratures Wuecol the town its first mortyge Ocmds m me aggrcqa!O W'scoroa E'ectre %e' Camuan, 2 s3 34 m pnnCtpal amour *t of $52 mm.on %nen are retcased to 1 *. Secs oue m3 the Company as Quah!ying cicperty is Constructed at 663 522 597 532 (302; r294 the plant. Unamowed Owour u - net 68#'

"3 "

W 0*'# U"' C*'""'

s9 227 suo 5773 G - Accounts Receivable rout ur'9 c+m f Ormt - _ _ _

Accounts reca varsto arc wwn on 'N ba!.vw.e dwrt IPc 'rwunbr:0 wwt onku y toeni ersinomwror ,9.r. irin af ter ocd >Cting an aCCruiated incvoon 'er onotent 19H for me aggregato ainuunt :,1 onr: t~m ocet accounts in the amount of 5 t.t 75 C03 'cr 1977 arW outstaiong at Occem:xt 31 1979 are snoan tron Ct

$826.000 for 1978. UnCcaeCt o'c account ar.fc ct's net mo nnnual schng fonti re noirements. 53100.000 ror of rcCovcncs werc $2.31G.000 in 1979 and $1552.000 the yrar t'mo a,d $3 9t*0 000 int it c ynars 1981 e t in 1978 triay lar'sati', lied tJy cert'f yrw) wirl.brnd mntfrynjeri property

ag,s REV.0214 EXP 02 07 RW SIZ: 71 01 ca: icy is Trado Prcss Typogratres $32018 Moctwvs Prwit.nq CornrunfW.5 0 90102 W.sconsai Elects.c (baer Co Annuar Report 0n s U

Isi peoof 2 7-80 [:h!- I h , 7 2nd proof

• 214 83 S **

U Matur+s's 5.. a.aq f/1 isoa 5:3 4J3 Ow t's 700 n00 K - Notes Payable and Commercisi Paper a'Jo e 2ter000 n T.Q CO3 Itn JocrDqn enteru';\ rufe tcr Untst a restas* f.r's t at 1962 59 137.000 6 3 ts OW Os ce'nber 3t. :973 43, t2 20 % far s'% > a 4 / 'fe Jr .d

1. 6 733 000 # # "'# # OT ^

Futuro s r%ng fund rec.are e~e na,o ccen borromrq our;tanderJ dar nq 1979 arrowic' 'O antic'pred Cf 3d 1* " ? Car ".'1;4 3 Of C ;r"M M !NO

$C110 C00 we a e' f :1 a m<ago >Je*c .: 'a:e at 113M ,Vanisnuin snC't tm COrrohorj dureg ???9 extent cf $3 001 C^9 an) ce? ' ca:09 c! c' rcrt/ a :he w3s $13 22 c03 arnount of 53!90003 Crrm,rg fara re:wrements for y g 1980 have tacen sa:1st ed coinanrJ notes ned b/ t, ann s .n f.duc:ary c:.n.ecces Suestantyy att unty ,mant r1 none'tv cr rmt/ is Ccmmerc al caoc< mrsoncog matrce :n Janusy and sue,cer to tho t.en cf :he appucatje mortgago FeDruary 1980 Unused knes of cred.t for stort tenn tjo<r'amnq J - Preferred Stock amounted to 3120 CSS 000 at Cecemtier 31 1979 in or.ceme , p support of various infctmal hocs or crear froni runas.

1979 1973 the Companies hav0 d'yced ?O ruaut un unnst c:crt afr==.samss em D. rats:

Compensat.ng ba'ance", e * !h te e<;C:.f ors uf fund; Pre 8ce'ed Stock (cart.lc.f. e) required for 03 :y cpcratons. Be CS;h 03.ar'ce 3."Can

1. scons.n C'ecrx Peace Cecaa v --

3' ~ on the balance st eet at Occe.rr;er 31.1979 as awi as

, gl $1100.000 of non .nrerest tearing cerbt.ca::s or

$100 u.ar vaur .wtJ 44138 depos.t inclu<tcd .n re nu rary Cash invcMnv;'ils stor. s i=A c isus 5 4 4's t S 4 458 sd*Ji PNic8csa hrAm represcot corrpe'iLaLog tulw.ccs 8""*ad ' 500 * '"*

siOO car .aw L - Commitments 3 CO*. Seres .med 260 CM trweg reoc+ieca coce si0t 26 000 Constrsction emocnrttures mrogh 199 are cShitVed 06 000 4 30". Sct.es 45x J 400 000 to tic $14 c.ihen. of Much $310 rum.cn is vaanne J for srwes resempion p.co $107 1980 Mans for expans,on of generaben f ac*tres to Occernoet 1.1983 and OCC8"'ng amounts mam to anctudo a 62 5*. ownersn,p in a nuc! car ofant. and e

510f arice Dece.m er 1 t%$ 40 (0 3 40000 investment irt Coal.hred gCnerahng un.rs Com%fments 71se,, Se,.es .ss cs30c000 for generabon facihbes at Cecember 31 '979 anmas recompon once sic 7 amounted to $2.t7 m.lf.on. part of wrien are to Nownrwr t. '961 ario decwwg arnounis Fireer'ee so cancelable.

SICe a'ter r+2 emt,ee 1 'k6 30 000 30 000 8 00*. Senes .ss.,od 00 cco srwes ecdernoron c<.ra Si'Jn 80 10 Jarberf 1. I')S4 &nd Cecian'ng arnouars !Perca r'ee 'o 5101 a'ece Decemoer 31 1943 60 000 60 000 Sena Pre' cered 5:oca -

aumorved S Orc 000 seres.

$25 par vaius unissueo - ~

rerm prescrrea Sirn str,0 asi s W .isi N - Quarterly Financial Data (Unaudited)

Three Monrns Ervted March June Sentember December 19 79 Itrwwis a Cha.ws:

1978 1979 1978 1979 1978 1972 1978 fatal ope'a: wig revenues

' Operarng income . 1236 26 360 760 1204 25 500 802 5183 28 074 158 5t64 910 5213 2GI 5t84 798 5234 336 519310t

23. Ias 38 6'et 34 223 24 853 Nor mcome . 18 049 17.697 25 208 19 343 14 583 30 003 25237 15.071 Earnings per sna<e 14 038 orcorrenon srocii 50 81 5087 5087 50 70 51 44 51 28 50 63 50 65 Because of seasonal factors which af'ect the utihty business and c.*tcrences tatwecn sumrmer anc enter e'ectric ra'cs. the quar!crfy 'esult. C' Prabons arc not drectly ComparJbfe

.e., b

O-Information by Segments of Dusiness 897') t'37d g jr leet % ,r #r p tira ss.e=#uJ ta m w9 D ttre; Operariuns n ,eiuuwaisi urWhhate 1 rw.roenees S C67 7b7 $ 58.t162 heter *eryncrit Salca, 2cIn IM 667903 583 Ju)

% Oncratiev) revenu m 163 GE6 153 'JIS Opor.aring income teore n,tcene ta es C*meret.! nn e nt '4 . 52 6 t9 47 n2 Culgfrurt.on ceLa%hiv res 233 723 2I2 0G3 Gas One ws 16i 177 pew. .e e,ryn nu amated cuswers 19t 238 Ir !. re.crytient sale 1 24 Cid .I 224 Operat.ng ec,crwes 215 822 16140t 20 027 in or et Cm.it.nn awe taew ea tancs G us/ #,P1/

i h 1.em.. e ut i.or a ..

12.772 8. t LJ Cuintrutriun eawwhwro Stea,n Gwsans Otmers==y reve%rs siuua+.tv4 0 5/u o ?//

Cpearg incm to cr'c taats 15to i vu3 Depreciut.on - vra 74 eino 5]9 Si!

243 273 Canst uct.on emend we5 Consohdated Oocrating revcewes (c.ctdeg ce'sc7 ment salCS connenalCJ in COSMJroni 867565 752 C t i 182 223 114 H19 OperarevJ 'ncore teve occinc fases Ocoreciaron -. stra.gt,r hre 59 855 54 t60 Constructen enend fo res onc:ucing nonutary) . 252 2'28 22c SGJ At Deeceter 3' Net ident.fiave Asse's Electnc ..St.643 722 5I.387 513 Cas. 168 635 159 363 Steam and nonutd.ty 18 3c7 19 293 Total Consolidated Assers . . $183c 6,14 St 565 t 71 Intersegment saies cons'st onacicans of gas soid oy Wisconsm Na: ural to tno company at rates accrowed of PSCW An intervenor pest:en ectore me Dane County C.rcuit M - Contingencies Court requested review cf me PSCW t.ncng that the On March 2,1973 the comeany was ordered by PSCW

'#'"#D*S

• N <C 3*C"009 C'C ect we's masonado and prudent. Pend.ng te ore PSCW +s the (Commiss;on) to wnte off thrcughout 1979 its share in enene s rnot>cn for osm.ssal of me acekcaton for (52 3 milhon after income tax effect) of certain M Ham we e a ceme e asse tems capitalized expend.tures related to the d.sconhnued caw caw eap a %mnt mnc ra9s %c Koshkonong nuclear piant prerect in inic9 rne anm em compied by PSCW on December 20.

company was a partic part w'th three etrer uat:es - resmet to m financ:at acewnong and rate The Commiss on deemed that such excencitures were prudently made, but cf no future va:ue The

• rite.ott maw nemmed a M accorded W nvesWnt n me proposed Have pro,Et. M Cecernter 31. W3 N reduced 1979 earnings by 5012 a snare However. o Octocer 1979 the Brown County Circut Court reversed cuncanfs snam of this enverstment was $22 3 mia on the March 2 order of PSCW ;,nd on Novemoer 15 A decison on mese eners. wn cn wculd be suo ect to t cart remcw. is emected in n near future wough ordered the rnatter rernanded to the Comm'ssion for the actions of regista!Ory beces cannCt be pre tic led mod 4flCaton of the oroer The Comcany and other eth asswance. tne coinnany contmucs to teccvo mat ,

utillucs filed with PSCW on Novemter 30 a met.on for its decisons with resocct to the Kosnwonong and an account:ng order whicn would rec' ass.fy the write-Has p%ects and as egenwes o connecton off to a deferred account oending suosecuent action in wem a conSNe to be On4'ent and separate rate dockets for SaCh utdity a wn*Ch it'cy masonaW and that such ewWums shwtd.

would propose a formula for navirg tre amount so therefore, be recognued for rate raaking purposes reclassified borne ny meir rato payers The Commissen apocated the Octcber C.rcud Coi.rt Pubitc hoanngs wcro hold by PSCW .n November 1979 decision to the Wiscons:n Court of Accesis c on the financial. accountng and rate making effects of December 1979 Omer precertd+caScn emenrtturcs steam generator tube ocoradaron at f%nt Beach related to the proicct werc transferred to he itaven Nuctoar Plant. On Occcmter 20 tno Comm.sson nuclear proicct pursuant to the PSCW order issued an amontfea notice ut invest rtaron aru s nrefer tjerecting thr) Corngwiriy in (,rre.ord taf, tune,ny r,n fcplacement powur coMS orwJ arty as0oClatCd costs denving from unscheduied down t'mn as a resuit of trio tuhn rief)rnelaton Thn entnpant Imtwr5 that thre

. arJslitiottat IE!S 'A 'Het he r' pt K"crut.:tn! lismur eficurro1 D/ b lj g f

[ }{ as a result of thi0 tuDo degracahon orcDiem .vot continue in be recavernrac ennr r one!<:r es.sonet rint1*. t a u,(, [g 7 or othermsc. Inromp !nc cure.pany s cicctric service rates.

~~

_ee. +

REPORT OF If4DEf'Ef4DEfJT ACCOUf4TAfdTS To the Board of D,'cC: ors and the Cl00khokl0f 5 Cf WiSCOOS:n [lCC!f C PC 9Cf CO'rp30/

in Cuf c>n1cn. the acCc+ca'.*] cer::Sd:ej hwcc s ect a'd :"c 'e':, c1 Cert:howd s' arc cris of enCOffC. FCfsned c yn ajs a-J c' ~ ~ M .', ' r# t ct f c t a t ar',cr1 Li m P .? ? ~r* n Cf;* :Ctri:1 EIC :triC ib...e, Cs res iv < 2 , .. *

• at J.::c r* c' 31 W73 and 13.'n ed ': o res , : a* rre r opera:.cns and me C'taa:- 9 tv 8 r : J :..;a? No se .rs 19c'i cecr'J aCCCDIC13':00u

• n) C' 'a i ;C72,t" riPG el Cu'C*a'"Ml'09;Of'

'n or "^' t w'5 0 ?"0'S't accord 3nce wgh gcaC l', 3 :,c, : j :) 3,* ' ' 3'J'C'C r'3 Va C'e "'ade in nrj t+31d y TCCord3 and OcCn CT,

• O .?!.nl crc Gutet 35 AC CC*: CCfCd nCf.07 s!/ .01:; and actorq r 7 y eC vJ yj hu O C ICW3;anC05 M.isvaukC t', W :: r. -

January 24.1380 A m' - .

. Uw m1El u

.~ . i t

O e

4 e

e 9

e

WISCONSIN ELECTRIC POWER CCMPANY 1990 Internal Cash Flow Projection for Point Beach Nuclear Power Station (Dollars in Millions)

Actual Projected 1979 1970 Net Income After Taxes 83 65 Less Dividends Paid (56) (63)

Ratained Earnings 27  :

Adjustments:

Depreciation and Amortication 60 67 Deferred Incore Taxes and Investment Tax Credits 45 60 Allowance for Funds Used During Const ruction (14) (14)

Total Adjustments 91 113 Internal Cash Flow 118 115 Average Quarterly Cash Flow

• 29.50 28.75 Percentage Ownership in all Operating Unit No. 1 100%

Nuclear Units Unit No. 2 100%

Maximum Total Contingent Liability $20,000,000

• If it becomes necessary to curtail capital expenditures to ensure meeting a retrospective premium call, we would anticipate reducing construction activitiec to the extent necessary.

CERTIFICATION:

The Cash Flow Frojections detailed above are based on the most current information available to us and represent our best estimates as of this date.

a3 i ~T U. ..)a ,

. - Os is k ie -

Dated February 15, 1980 By .

i Treasurer