ML19305D577
| ML19305D577 | |
| Person / Time | |
|---|---|
| Site: | Arkansas Nuclear  |
| Issue date: | 04/10/1980 |
| From: | ARKANSAS POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML19305D574 | List: |
| References | |
| NUDOCS 8004150239 | |
| Download: ML19305D577 (46) | |
Text
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_m Communicating Energy Perspectives. One of AP&L's major priorities in this new decade is to effectively communicate the Company's energy directions to its many publics. This two-way information flow is an essential ingredient in reinforcing confi-dence in AP&L's energy choices and in gaining customer cooperation in achieving conservation and load management objectives. To give you an insight into this communications program, we are providing a copy of a new Company brochure, entitled "How AP&L's Energy idea People Are Meeting the Challenge of the Eighties." This publication ' combined with numerous other information vehicles will be key elements in helping to assure an operating climate for AP&L anchored to i
j open and straightforward communications.
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Performance Highlights 1979 1978
% increase Revenues from operations (000).
$ 583,826
$ 556,488 5
Operation and maintenance expenses (000).
$ 438,124
$ 379,477 15 83,742 87,620 (4)
Net income (000).__
Capitalization (000).
$1,565,741
$1,400,442 12 Construction expenditures (000).
$ 291,774
$ 262,863 11 Total utility plant investment-end of year (000).
$2,211,886
$1,964,285 13 Customers (End of year).
463,087 456,507 1
Energy sales to ultimate customers
_ (Millions of Kilowatt hours).
13,684 13,099 4
Employees (End of year).
3,714 3,345 11 Peak demand (Megawatts).
3,521 3,654 (4)
Average use per customer (Kilowatt hours)
Residential.
9,778 10,377 (F)
Commercial.
50,041 51,338 (3) l l
1
price of oil; the increased govern-ment regulation; the construction of a second nuclear-fueled unit and four coal-fired units; the design and
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p; operating modifications at our
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the seeking of both retail and
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wholesale rate increases to help
,7 maintain financial integrity.
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Unquestionably, the decade of the Seventies can be characterized as the most challenging period in the history of Arkansas Power &
Light Company and one that estab-a %
lished energy directions and trends that will have a lasting effect.
M-In spite of these challenges, we at AP&L have been able to meet the tests of the Seventies with a high degree of success. Our record of accomplishment, our ability to g'
adapt to our ever-changing operat-ing climate and the leadership we have taken through our fuel A Message diversification, energy conservation from the President and load management efforts are the product of a corporate team Come with me back in time dedicated to excellence in to 1969.
every way.
We at Arkansas Power & Light A look at the major highlights Company were closing out the of 1979 provides an insight into our decade of the Sixties with a solid total operations and will serve as ten-year record of growth; a stable a base for our plans and programs generating system with over 90 in this new decade.
percent of our generation being In the area of generation and fueled by plentiful, low-cost natural construction, we continued our gas; an operating environment efforts tolessen ourdependencyon anchored to public cooperation; oil-fired generation. Unit 2 of construction underway on the Arkansas Nuclear One underwent Southwest's first nuclear-fueled final testing in 1979 and will be in generating unit; and a marketing commercial operation during the program promoting the advantages first quarter of 1980.
of " Total Electric Living."
Construction continued at our With optimism, we justifiably two coal-fired stations-White Blutf approached the new decade as a near Redfield and independence period of almost predictable near Newark.We anticipate that the progress. However, like virtually first unit at White Bluff will begin every energy industry in America, operation this summer, adding 422 we quickly realized that the Seven-megawatts of additional capacity ties were to be anything but" predict-to the AP&L system.The otherWhite able." Major events which have Bluff unit will follow in 1981 with affected our operations include the the two units at Independence curtailment of natural gas for scheduled for operation in 1983 generating purposes; the conver-and 1985. On these four 740-mega-sion of allof ourgenerating facilities watt units, we will have co-owners to oil-fired operation; the Arab Oil which include the Arkansas Embargo and the constantly rising Electric Cooperative Corporation l
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(AECC), a 35 percent undivided unrelated events:(1) a record-setting during very hot summer afternoons.
interest; the City of Jonesboro, five mild summer and (2) extended This same type of radio-controlled percent undivided interest; the City downtime at Unit 1 of Arkansas device was introduced in 1979 for of Conway, two percent undivided Nuclear One due to the events at use on agricultural irrigation pumps interest; and the City of West Three Mile Island and the modifica-and is being proposed for use on Memphis, one percent undivided tions which were required as a result.
commercial air conditioning interest. The City of Osceola will The mild summerweexperienced systems.
participate in the Independence throughout our service area is An optional residential time-uniis with a one-half of one percent evidenced bythefactthatwedid not of-use rate is also being proposed undivided interest.
record a single 100-degree reading for introduction in 1980 so that we Last September we announced in Metropolitan Little Rock.This can gain valuable information on joint plans with AECC to seek unusual situation resulted in a customerattitudes and acceptance regulatory approval for the Arkansas reduction of traditional air condi-on this innovative service approach.
Lignite EnergyCenter.Tobelocated tioning load, hence less energy Other major research and in South Arkansas near Hampton, sales for both residential and development programs include the Center will use Arkansas lignite commercial customers and evaluation of the Arkansas Energy as its boiler fuel from a mine to be accounted in farge part for the four Saving Solar Homes, which were developed in Calhoun County.
percent decrease we experienced built in Little Rock last year; These two additional 750-megawatt from our 1978 peak.
co-generation ventures between units are scheduled to come into Company revenues from industry and the Company with a service sometime in the latter part operations showed a five percent pilot generating plant going into of this decade orin the early 1990's.
increase over1978,buta15 percent service in 1979 in El Dorado; and As a result of these efforts, we climbin operation and maintenance studies involving hydro-electric estimate that approximately 80 expenses pushed our net income expansion, solid waste fuel potential, percent of our customers' energy down four percent.The bulk of this geothermal technology and other requirements in 1985 can be met increase in O&M expenses went renewable resources.
by AP&L generating facilities fueled for fuel purchases.These purchases More than ever before, we are I
by coal and nuclear energy.
became necessary primarily due committed to exploringand develop-Inflation and rising construction to the downtime at our nuclear unit.
ing energy ideas that will aid us and operating costs have placed Unit 1 went into a refueling period in meeting our important responsi-intense financial pressures on shortly after the Three Mile Island bility of providing our customers AP&L We have responded to this accident and subsequent regulatory withan adequateand reliablesupply situation by taking positive action directives kept the unit off line of electric energy at the lowest throughout the Company. Cost much longer than expected. Two practical cost. The Eighties and reduction and efficiency have outages related to turbine failure beyond represent both opportunity become our hallmark. Wherever at the unit were also experienced.
and challenge in the electric utility practical, we have expanded Our construction expenditures industry. We at AP&L are confident expense controland,in some cases, in 1979 were $291.8 million, that together with our sister com-have eliminated or deferred Construction expenditures during panies in the Middle South Utilities enpenditures for certain Company the period 1980 through 1982 are System we will be able to make programs. Our management of estimated to be about $720 this period one that will be construction program costs has million, including $84.7 million of remembered with pride.
.been highly effective as has the allowance for funds used during We appreciate your continuing reorganization of division field construction.
confidence and support and invite operations.
Energy conservation and load your comments and suggestions These efforts have had a bene-managementinitiatives continue as about our operations at AP&L ficial impact on our financial condi-high priority programs. Presently at anytime.
tion. However, because of inflation being positioned as "The Energy and increased operating costs, Idea People," AP&L customer we will be forced to seek additional service representatives are working
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throughout our service territory A review of our Company's advising customers on how they parformance highlights miirors the can get the most from their energy Jerry L Maulden problems being faced by most dollar. For instance, over 30,000 President & Chief Executive Officer electric utilities across the nation...
Air Conditioning Switches have the increased costs of fuel, materials been installed on residential central and wages; greater and greater air conditioning systems with the capital outlays; and longer con-customer receiving a billing credit struction periods. These problems
.for allowing us to interrupt service were compounded at AP&L by two during peak periods, particularly 3.
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, f:5 Arkansas Power & Light Company Board of Directors, seated, left to right, Jerry L. Maulden; Reeves E. Ritchie; Floyd W. Lewis; and Lawrence Blackwell. Standing, left to right, L.C. Carter; R.E.L. Wilson; Robert D. Pugh; J.D. Phillips; William C. Nolan, Jr.; and Roy Murphy.
Board of Directors rence Blackwell ilHam C. Nolan, Jr.
cte 15 ec 1571 Pas't es ent er$ior ice President B u$f u tgar, A ansas n
kansas Elected 1960 Elected 1972 Floyd W. Lewis Robert D. Pugh Chairman of the Board Partner, Pugh and Company ddle South it e, Inc.
ected 1 1 New Orleans, Louisiana Reeves E. Ritchie Elected 1971 Past Chairman of the Board Jerry L Maulden of the Company, Ret.
President & Chief Executive Little Rock, Arkansas Officer of the Company Elected 1962 t
R rkansas R.E.L Wilson ed Chairman of the Board Roy Murphy
& Chief Executive Officer President Lee Wilson and Company Mid-South Engineering Co.
Wilson, Arkansas 1
ot pri
. Arkansas Elected 1967
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$5n ML" 1979 ARKANSAS POWER & LIGHT COMPANY FINANCIAL REVIEW
)
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES A. System of Accounts The accounts of the Company are maintained in accordance with the system of accounts prescribec by the Federal Energy Regulato./ Commission (FERC).
B. Revenues and Fuel Costs The Company records revenues as billed to its customers on a cycle billing basis. Revenue is not accrued for energy delivered but not billed at the end of the fiscal period.
Substantially all of the rate schedules of the Company include adjustment clauses under which fuel costs above or below the levels allowed in the various rate schedules are permitted to be billed or required to be credited to customers. The Company has adopted a deferral method of accounting for those fuel costs recoverable under fuel adjustment clauses. Under this method, such costs are deferred to the month in which the related revenues are billed.
The fuel adjustment factor contains an amount for a nuclear reserve fund, estimated to cover the replacement cost of energy which would have been generated using nuclear fuel when the nuclear plant is down for refueling. The fund bears interest and is credited to fuel and purchased power expenses when the plant is down for refueling.
C. Utility Plant and Depreciation Utility plant is stated at original cost. The costs of additions to utility plant include contracted work, direct labor and materials, allocable overheads and an allowance for the composite cost of funds used during construction. The costs of units of property retired are removed from utility plant and such costs plus removal costs, less salvage, are charged to accumulated depreciation. Maintenance and repair of property and replacement of items determined to be less than units of property are charged to operating expenses.
Depreciation is computed on the straight-line basis at rates based on the estimated service lives of the various classes of property. Depreciation provided in 1979 and 1978 amounted to approximately 3.4% each year on average depreciable property. Principally all the Company's utility plant is subject to the lien of its first mortgage bond indentures.
D. Pension Plan The Company has a pension plan covering substantially all of its employees. Pension costs in 1979 and 1978 amounted to $5,035,000 and $5,202,000, respectively, including amortization of unfunded prior service costs over a neriod of 20 years. The policy of the Company is to fund pension costs accrued. Assets of t".e plan are m cxcess of vested benefits.
E. Income Tr.xes The Cc.npany joins its parent in filing a consolidated Federal income tax return and income taxes are allocated to the Company in proportion to its contribution to the consolidated tax liability.
Deferred income taxes are provided for differences between book and taxable income to the extent permitted by the regulatory bodies for ratemaking purposes. Investment tax credits allocated to the Company are defer ed and amortized, based upon the average usefullife of the related property beginning with the year utilized in the consolidated tax return.
F. Allowance for Funds Used During Construction in accordance with the regulatory system of acccur ts, the Company capitalizes, as an appropriate cost of utility plant, an allowance for funds used durir q construction. This allowance (a non-cash item) represents the net costs of funds used to finance construction. The effective rates of such allowances were 7.69% and 7.60% for the years 1979 and 1978, respectively.
G. Reserves it is the policy of the Company to provide reserves for uninsured property risks and for claims for injuries and damages through charges to operating expense on an accrual basis. Accruals for these reserves have been allowed for ratemaking purposes. Effective in the first quarter of 1979, the Company commenced recording deferred taxes on these reserves.
5
e NE EsE BALANCE SHEETS AT DECEMBER 31,1979 and 1978 l
ASSETS 1979 1978 In Thousands Utility Plant (Notes 4 and 5):
Electric plant.
$1,231,832
$1,178,601 Construction work in progress 900,054 785,684 Total 2,211,886 1,964,285 Less-accumulated depreciation and amortization.
364,447 331,231 Utility plant-net.
1,847,439 1,633,054 Other Property and investments:
Investments in associated companies, at equity (Note 5)..
32,002 19,384 Other, at cost (less accumulated depreciation).
467 523 Total..
32,469 19,907 Current Assets:
Cash and special deposits (Note 3)..
3,863 769 Notes receivable.
1,801 1,442 Accounts receivable:
Customer and other (less allowance for doubtful accounts-S924.'J00 in 1979 and $744,000 in 1978).
29,011 23,298 Associated companies...
712 77 Deferre<; fuel cost..
13,192 4,779 Mater'als and supplies, at average cost..
6,930 5,935 Prepayments and other..
2,302 3,120 Total.
57,811 39,420 Deferred Debits.....
2,924 1,956 Total..
$1,940,643 $1,694,337 See Notes to F,nancial Statements 6
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LIABILITIES 1979 1978 in Thousands C:pitalization:
Equity capital:
l Common stock, $12.50 par value: authorized 50,000,000 shares; j
issued and outstanding,34,236,773 shares in 1979 and 31,836,773 l
shares in 1978.
$ 427,960
$ 397,960 Retained earnings (Note 6).
90,657 81,448 Total common shareholder's equity.
518,617 479,408 Preferred stock and premium, without sinking fund (Page 10) 126,890 111,709 Preferred stock and premium, with sinking fund (Page 10).
100,518 60,063 Long-term debt (Page 11).
819,716 749,262 Total 1,565,741 1,400,442 Current Liabilities:
Currently maturing long-term debt (Page 11).
6,000 8,700 Notes payable-Commercial paper (Note 3).
80,130 40,200 Accounts payable:
Associated companies.
3,791 8,982 Other.
46,839 19,326 Customer deposits.
4,949 7,512 Taxes accrued.
24,327 19,391 Accumulated deferred income taxes (Note 2).
6,496 2,443 Interest accrued.
22,730 16,763 Dividends declared.
4,887 3,505 Nuclear fuel reserve.
3,351 9,176 Other.
7,391 3,092 Total
_ 210,891 139,090 Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 2).
125,417 114,209 Accumulated deferred investment tax credits (Note 2) 32,211 32,963 Other.
7,192 6,724 Total 164,820 153,896 R: serves.
(809) 909 Cnmmitments and Contingencies (Notes 1,4 and 5).
Total
$1,940 643
$1,694.337 See Notes to F,nancal Staterrwnts 7
l-
n STATEMENTS OF INCOME AND RETAINED EARNINGS 55!!'sV!O For the Years Ended December 31,1979 and 1978 1979 1978 in Thousands Statements of Income Operating Revenues (Note 9).
$583.826
$556,488 Operating Expenses:
Operation:
Fuel.
174,667 167,681 Purchased power..
171,425 120,804 Other.
61,850 62,136 Maintenance.
30,182 28,856 Depreciation.
39,708 38,365 Taxes other than income taxes.
25,032 23,436 income taxes (Note 2)..
11,213 33,813 Total.
514,077 475,091 Operating income 69,749 81,397 Other income and Deductions:
Allowance for equity funds used during construction...
45,045 36,214 Miscellaneous-net.
6,874 4,583 income taxes (Note 2).
16,753 12,403 Total.
68,672 53,200 Interest Charges:
Interest on long-term debt 67,091 56,949 Other interest-net of debt premium...
8,446 4,076 Allowance for borrowed funds used during construction..
(20,858)
(14,048)
Total.
54,679 46,977 Net income.
$ 83,742
$ 87,620 Statements of Retained Earnin_gs_
Retained Earnings-January 1 S 81,448 5 55,641 Add-Net income.
83,742 87,620 Total..
165,190 143,261 Deduct-Cash dividends:
Preferred stock.
17,474 14,020 Common stock.
57,059 47,793
)
Total.
74,533 61,813 Retained Earnings-December 31 (Note 6).
$ 90,6_57
$ 8_1,44_8 s-co m,, swe-,
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STATEMENTS OF SOURCE OF FUNDS FOR UTILITY PLANT ADDITIONS M'CDLE SOUTH FOr the Years Ended December 31,1979 and 1978 UTUTgs sv5TEV 1979 1978 In Thousands Source of Funds:
From operations:
Net income..
$ 83,742
$ 87,620 Depreciation.
39,708 38,365 Deferred income taxes and investment tax credit adjustments-net.
14,508 25,197 Allowance for funds used during construction (65,903)
(50,262)
Total 72,055 100,920 Dividends declared:
Preferred stock (17,474)
(14,020)
Common stock (57,059)
_ 47,793)
(
Total (74,533)
(61,813)
Funds retained in business.
(2,478) 39,107 From decrease (increase) in working capital (excluding short-term securities, currently maturing long-term debt and deferred taxes included in current liabilities)*
12,128 (48,367)
Investment in associated companies.
(12,618) 1,643 Deferred payments on construction contracts.
(4,200)
Miscellaneous-net.
(1,512) 550 Total (4,480)
(11,267)
From financing transactions:
Common stock.
30,000 15,000 Preferred stock.
55,000 First Mortgage bonds:
Issues.
60,000 75,000 Retirements.
(8,700)
(7,500)
Installment purchase transactions.
16,406 15,317 Book value of utility plant sold.
54,513 13,532 Short-term securities-net.
39,930 69,515 Total 247,149 180,864 TOTAL.
$242,669
$169.597
= = - - - -
= = = =
Utility Plant Additions (excludes allowance for funds used during construction):
Construction expenditures.
$226,126
$213,055 Nuclear fuel.
20,056 330 Other plant additions--net **
(3,51_3)
(43,788)
TOTAL.
$242,669
$169,597
- The working capital decrease in 1979 and increase in 1978 are primarily attnbutable to increases in 1979 and decreases in 1978 in accounts payable and taxes accrued.
"Other plant additions inc!Ude the payment in 1979 of Deferred Payables on construction projects in the amount of $3.600.000 and in 1978 the purchase of Citizens Light & Power Company for $355.000 and the payment of Deferred Payables on construction projects in the amount of $44,077,000.
See Notes to Financial Steements l
9
"r 7 558 'sW" SCHEDULES OF PREFERRED STOCK Current Shares Shares Outstanding Call Price Cumulative, $100 Par Value Authorized 1979 1978 Per Share Without sinking fund:
4.32% series.
70,000 70,000 70,000
$103.647 4.72% series.
93,500 93,500 93,500 107.00 4.56% series.
75,000 75,000 75,000 102.83 4.56% 1965 series.
75,000 75,000 75,000 102.50 6.08% series.
100,000 100,000 100,000 102.83 7.32% series.
100,000 100,000 100,000 103.17 7.80% series.
150,000 150,000 150,000 107.15 7.40% series.
200,000 200,000 200,000 106.50 7.88% series.
150,000 150,000 150,000 106.94 Total.
1,013,500 1,013,500 1,013,500 With sinking fund *-
10.60% series.
200,000 200,000 200,000 112.04 11.04% series.
400,000 400,000 400,000 112.54 Total.
600,000 600,000 600,000
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Unissued.
2,386,500 Total.
~
4,000,000 Cumulative, S25 Par Value Without sinking fund:
8.84% series.
400,000 400,000 400,000 28.21 10.40% series.
600,000 600,000 28.60 Total.
1,000,000 1,000,000 400,000 With sinking fund *-
9.92% series.
1,600,000 1,600,000 28.18 Unissued.
7,400,000 Total.
10,000,000 1,600,000 Total Preferred Stock.
_14,000,000 In Thousand_s Without sinking fund:
Stated at $100 a share..
$101,350
$101,350 Stated at $25 a share.
25,000 10,000 Premium.
540 359 Total preferred stock and premium, without sinking fund.
$126,890
$111,709 With sinking fund:
Stated at $100 a share.
$ 60,000
$ 60,000 Stated at $25 a share.
40,000 Premium.
518 63 Total preferred stock and premium, with sinking fund.
$100,518
$ 60,063
- These Series are to be retired in full through the operation of sinking funds at a redemption price of $100 per share on the 10.60% and 11.04% series and $25 per share on the 9.92% senes plus accumulated dividends to the date of such redemption.
Beginning July 1.1980, the 10.60% series is to be redeemed at the rate of 10.000 shares each year through 1999. Beginning November 1,1980. the 11.04% series is to be redeemed at a rate of 20,000 shares each year through 1999. Beginning June 1, 1984, the 992% series is to be redeemed at a rate of 80.000 shares each year through 2003.
See Notes to Financ,af Statements l
10
$5n Us0 SCHEDULES OF LONG-TERM DEBT 1979 1978 FIRST MORTCAGE BONDS:
In Thousands 2-7/8% series due 1979.
$ 8,700 2-7/8% series due 1980.
6,000 6,000 3-5/8% series due 1981 8,000 8,000 9-1/4% series due 1981.
60,000 60,000 3-1/2% series due 1982.
15,000 15,000 3-1/4% series due 1984 7,500 7,500 3-3/8% series due 1985.
18,000 18,000 4-7/8% series due 1991 12,000 12,000 4-3/8% series due 1993.
15,000 15,000 4-5/8% series due 1995 25,000 25,000 5-3/4% series due 1996.
25,000 25,000 5-7/8% series due 1997.
30,000 30,000 7-3/8% series due 1998.
15,000 15,000 9-1/4% series due 1999.
25,000 25,000 9-5/8% series due 2000.
25,000 25,000 7-5/8% series due 2001 30,000 30,000 8
% series due 2001 30,000 30,000 7-3/4% series due 2002.
35,000 35,000 7-1/2% series due 2002.
15,000 15,000 8
% series due 2003.
40,000 40,000 8-1/8% series due 2003.
40,000 40,000 10-1/2% series due 2004.
40,000 40,000 10-1/8% series due 2005.
~40,000 40,000 9-1/8% series due 2007.
75,000 75,000 9-7/8% series due 2008.
75,000 75,000 10-1/4% series due 2009.
60,000 TOTAL FIRST MORTGAGE BONDS
- 766,500 715,200 INSTALLMENT PURCHASE CONTRACTS:
Pope County, Arkansas Due 2006,7-3/8%.
16,600 16,600 Jefferson County, Arkansas, Due 2007,6-1/8%.
47,000 47,000 Jefferson County, Arkansas, Due 2008,7-1/4%.
9,200 9,200 Pope County, Arkansas, Due 2008,7-1/4%.
2,900 2,900 Less: Amount held in construction funds.
18,246 34,653 TOTAL INSTALLMENT PURCHASE CONTRACTS.
57,454 41,047 UNAMORTIZED PREMlUM AND DISCOUNT ON DEBT-NET.
1,762 1,71 5 TOTAL.
825,716 757,962 LESS: CURRENT MATURITIES INCLUDED IN CURRENT LIABILITIES.
6,000 8,700 LONG-TERM DEBT EXCLUDING AMOUNT DUE WITHIN ONE YFAR.
$819,716
$749,262
- Annual sinking fund requirements, which may be met by certification of property additions at the rate of 167% of such requirements, amount to $6.973.000 in 1980.
l See Notes to Financial Statements 11
$$n!s0 Notes to Financial Statements
- 1. Rate Matters The Attorney General of Arkansas filed a complaint with the Arkansas Public Service Commission (APSC) on April 23,1979, in which he alleged that the Company had erroneously applied the then existing fuel adjustment clause to retail customers from April 1977 through March 1979 and thereby overcharged these customers $17,297,000. The complaint alleged that such overcharges would continue as long as the Company continued to apply the fuel adjustment clause in the same manner.
The Staff of the APSC has concurred with the Attorney General's conclusion. The Company does not believe that there was any erroneous application or overcharge. On July 3,1979, the APSC issued an interim order directing the Company to begin and continue in the future applying its fuel adjustment clause according to the Attorney General's interpretation when the nuclear generating units are not down for refueling and in accordance with the Company's interpretation when the nuclear generating units are down for refueling. The July 3,1979 order stated it was not deciding the propriety and legality of ordering refunds by the Company for its administration of the fuel adjustment clause from May 21,1976 (which was the date of a final order of the APSC under which a new fuel adjustment clause similar to the clause which was the subject of the Attorney General's complaint was placed in effect) to the date of the July 3,1979 order and stated tnat decision would be made later. A petition for rehearing of the issues in the July 3,1979 order filed by the Company August 3,1979 was legally deemed denied when the APSC did not pass on the petition by September 2,1979. The Company has appealed the decision to the Circuit Court of Pulaski County.
- 2. Income Taxes Income tax expense consists of the following:
1979 1978 In Thousands Current Federal.
$(20,593)
$ (3,248)
State.
545 (540)
Total (20,048)
(3,788)
Deferred-Net Liberalized depreciation..
25,134 17,626 Taxes capitalized on books 4,633 4,022 Interest capitalized on nuclear fuel.
3,778 3,109 Revenues collected in advance-nuclear fuel reserve.
3,041 (34)
Deferred fuel cost.
4,052 (208)
Other.
446 2,118 Reduction due to tax loss carryforward.
(25,824)
)
Total 15,260 26,633 Investment tax credit adjustments-net.
(752)
(1,435) l Total income taxes.
$ (5,540)
$ 21,410 Charged to operations.
$ 11,213
$ 33,813 Credited to other income.
(16,753)
(12,403)
Total
$ (5,540)
$ 21,410 Total income taxes differ from the amounts computed by applying the statutory Federal income tax rate to income before taxes. The reasons for the differences are as follows:
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l 1979 1978
% of
% of Pre-Tax Pre-Tax Amount income Amount income Computed at statutory rate.
$ 35,973 46.0%
$ 52,334 48.0%
Increases (reductions) in tax resulting from:
Allowance for funds used during construction.
(30,316) (38.8%)
(24,126) (22.1%)
Difference between book depreciation and tax straight-line depreciation (9,027) (11.5%)
(4,415)
(4.1%)
Difference between interest capitalized on nuclear fuel combined with tax depreciation of nuclear fuel and nuclear fuel expense.
(2,405)
(3.1 %)
(856)
(0.8%)
Adjustment of consolidated savings due to tax loss.
1,912 2.4%
Other-net.
(1,677)
(2.1%)
(1,527)
(1.4%)
Recorded income taxes.
$_ (5,540)
(7.1 %)
$_21,410 19.6%
in 1979, the Company incurred a federal tax loss of $96,840,000. The tax effect of the portion of the loss which was not realized during 1979 has been recorded as a reduction of deferred income taxes.
Unused investment tax credits at December 31,1979 amounted to $62,148,000, of which $9,550,000 may be carried forward through 1984, $33,018,000 through 1985, and $19,580,000 through 1986.
Prior to 1979 the investment tax credit utilized in the consolidated tax return was allocated to each System company on the basis of such credit contributed. Effective in 1979 the method of allocating investment tax credit was changed so that it is allocated on the basis of each company's portion of the consolidated tax liability;any additional credit utilized is allocated on the basis of the remaining tax credits.
- 3. Lines of Credit and Short-Term Borrowings The Company had arrangements with certain banks and a commercial paper dealer providing for short-term borrowings of up to $125,000,000 as of December 31,1979 and December 31,1978.
The Company received authorization on January 2,1980 from the Securities & Exchange Commission to increase the aggregate amount of such short-term borrowings permitted to be outstanding at any one time to $150,000,000. Accounts are maintained with certain lending Arkansas banks and, although balances in some of these accounts may be deemed to be compensating balances, most of these accounts are working accounts, and fluctuations in their balances do not reflect or depend upon fluctuations in the amounts of bank loans outstanding. In support of the arrangements with non-Arkansas banks, the Company maintains compensating balances of up to 10% of tne lines of credit with these banks ($7,262,500 at December 31,1979 and $5,813,000 at December 31,1978) which are not restricted as to withdrawal. Borrowings under these arrangements may require compensating balances of up to an additional 10% of the average annual amount of outstanding loans from these banks. The aggregate amounts of the unused lines of credit as of December 31,1979 and December 31,1978 were $44,870,000 and $84,800,000, respectively.
The short-term borrowings and the applicable interest rates (determined by dividing applicable interest expense by the average amount borrowed) for the Company were as follows:
1979 1978 Maximum borrowing.
$96,000,000
$87,100,000 Average borrowing:
Bank loans.
$33,144,000 Commercial paper.
$19,961,000
$39,151,000 Average interest rate during the period:
Bank loans.
13.9%
Commercial paper.
11.0%
8.1%
Average interest rate at end of period:
Bank loans.
15.8%
Commercial paper.
13.7%
10.4%
13 IMI
PN uS E sYss
- 4. Leases The Company accounts for leases on the same basis as that used by its regulatory authority in the ratemaking process which determines the revenues utilized to recover the lease costs. Application of criteria used to define a capital lease would permit recording the following assets and liabilities on the balance sheet' 1979 1978 in Thousands Assets:
Utility plant.
$38,982
$33,948 Accumulated amortization.
9,533 7,201 Net leased property.
$29,449
$_26,7_47 Liabilities:
Noncurrent obligations under capital leases.
$_30,730
$27_,117 Current obligations under capital leases.
$g31[
{1[8 Recording of such leases would not materially affect the amounts reported as either expense or net income.
At December 31, 1979, there were noncancelable leases with minimum rental commitments as follows:
In Thousands 1980
$ 8,230 1981 8,036 1982 8,851 1983 6,637 1984 5,067 For years thereafter 100,228 TOTAL
$_137.049 Prior to August 31, 1978, the Company was a party to two nuclear fuel leases aggregating
$90,000,000. On August 31,1978, the Company terminated one of the leases and amended the remaining lease to permit 11,3 Company to lease nuclear fuel up to a maximum of $100,000,000. On November 2,1979, the Company increased the amount of nuclear fuel which it can lease from
$100,000,000 to $130,000,000. Lease payments, which are not included in the tabulations above, are based on nuclear fuel use. The lease, unless sooner terminated by one of the parties, will continue until 2018. The unrecovered cost base of the lease at December 31,1979 and December 31,1978 was $111,037,000 and $91,318,000, respectively. Nuclear fuel expense of $15,318,000 in 1979 and
$13279,000 in 1978 was charged to operations.
Rental expense (excluding nuclear fuel) amounted to approximately $8,017,000 and $7,295,000 in 1979 and 1978, respectively.
- 5. Commitments and Contingencies The construction program contemplates Coripany construction expenditures of approximately
$283,600,000 in 1980 and $226,900,000 in 1981.
The Federal income tax returns for the years 1971 through 1976 have been examined by the Internal Revenue Service (IRS) and adjustments have been proposed. The principal issue is whether customer deposits are includable in taxable income. A formal written protest nas been filed and conferences are being held with an Appeals Officer of the IRS. Any final liability for taxes resulting from settlement with the IRS would not have a material effect on net income. Income taxes on customer deposits would be normalized. Most of the other issues have been settled and adequate provisions have been recorded.
The Company has a 35% interest in System Fuels, Inc. (SFI), a jointly owned subsidiary of four of the principal operating subsidiaries of Middle South Utilities, Inc. SFI operates on a nonprofit basis in planning and implementing programs for the procurement of fuel supplies for the generating units of these operating companies; its costs are primarily recovered through charges for fuel delivered.
14
W~'T SE EsE The Company has made loans to SFl to further its fuel supply business under certain loan agreements which provide for SFl to borrow up to $213,000,000 from its stockholders. As of December 31,1979, the Company had loaned $31,815,250 to SFI pursuant to the loan agreements, and the Company's share of the unused loan commitment is $36,270,000. Loans mature in 10 to 25 years from the date of borrowing.
In connection with certain financing arrangements by SFI totaling approximately $94,723,000 at December 31, 1979, the Company and the other SFI stockholders have covenanted and agreed severally in accordance with their respective shares of ownerships of SFI's common stock, that they will take any and all action necessary to keep SFI in a sound financial condition and to place SFl in a position to discharge, and to cause SFI to discharge, its obligations.
The Company has agreed to purchase over a 20 year period,100 million tons of coal for use at the White Bluff Steam Electric Stat'on. In addition, SFI has entered into a contract with a joint venture for a supply of coal from a mine to be developed in Wyoming, which is expected to provide 150 to 210 million tons over a period of 26 to 42 years; coal so supplied is expected to be used in the Independence Steam Electric Station. SFI has also executed a contract with a vendor subject to regulatory approval for ihe purchase of an estimated 247 million tons of lignite in Calhoun County, Arkansas, over a 30 year period for years in the future. By separate agreements, AP&L guaranteed SFI's performance of the contract and agreed to purchase the lignite from SFl.
The Company, under the terms of its nuclear fuel lease, is responsible for storage or disposal of spent nuclear fuel.The Company has contracted to sell the first six batches of spent fuel upon discharge from Unit No.1 of Arkansas Nuclear One; however, the effectiveness of the contract is under question due to the government's policy disallowing reprocessing of spent nuclear fuel. The company is reevaluating its policy regarding the salvage value (which has been previously accrued) as opposed to possible storage or disposal costs for spent nuclear f uel.The Com pany expects that all costs, determined to be its liability in connection with the use of nuc! ear fuel, are proper components of nuclear fuel expense, and provisions to recover such costs have been made in applications to regulatory com-missions. Based upon a recent study performed by the Company, nuclear plant decommissioning costs are projected to be in excess of amounts the Company is presently recovering through increased depreciation charges over the life of its nuclear plant. The Company is requesting and will request recovery of estimated increased costs in applications to its regulatory commissions. Subsequent to year end the Company received an order from the Arkansas Public Service Commission regarding its then pending retail rate case. Included in that order was approval of the collection of the additional cost associated with the storage or disposal of spent nuclear fuel and decommissioning the nuclear units at the end of their lives.
The Company, together with the other Middle South System Operating Companies,is obligated under agreements with Middle South Energy, Inc. (MSE) to make payments adequate to cover all of the operating expenses and capital costs of MSE and, in return, will receive the power available from MSE's Grand Gulf Plant.The completion dates of the two units of the Grand Gulf Plant, on which $1.4 billion had been expended through 1979, were changed by MSE in December,1979 to 1982 and 1985 from 1981 and 1984, respectively. Under certain circumstances, payments may be required to be made commencing December 31,1982 if the first un t of the Grand Gulf Plant has not been completed by that date. The Company's liability, if any, under these agreements is not prospectively determinable.
O. Restricted Retained Earnings The indenture relating to the Company's long-term debt and provisions of the articles of incorporatic n relating to the Company's preferred stock provide for restrictions on the payment of cash dividencs on common stock. As of December 31,1979, $65,837,677 of retained earnings are free from such restrictions.
- 7. Transactions with Affiliates The Company buys from and sells electricity to the operating subsidiaries of Middle South Utilities, Inc., its parent, under rate schedules filed with the Federal Energy Regulatory Commission.
In addition, the Company purchases fuel from System Fuels, Inc.
Operating revenues include revenues from sales to affiliates amounting to $48,320,000 in 1979 and $35,600,000 in 1978. Operating expenses include fuel cost and purchased power charges from affiliates totaling $197,864,000 in 1979 and $225,439,000 in 1978.
15
$NNIsE C. Quarterly Results (Unaudited)
Operating results f6r the four quarters of 1979 and 1978 are as follows:
1979 larch June September December in Thousands Operating Revenues.
$131,017
$129,486
$172.838
$150,485 Operating income.
18,127 13.386 24,334 13,902 Net income.
20.903 15,908 29,183 17,748 1978 March _
June September December _
in Thousands Operating Revenues.
$143,527
$122,311
$167,485
$123,165 Operating income.
17,841 13,656 30,919 18,981 Net income.
20,161 15,174 32,433 19,852 The business of the Company is subject to seasonal fluctuations with the peak period occuring during the summer months. Accordingly, earnings information for any three4nonth period should not be considered as a basis for estimating the results for a full year.
- 9. Major Customer Revenue derived from sales to Reynolds Metals Company as a percent of total operating revenues was 11.3% in 1979 and 7.9% in 1978.
- 10. Changing Prices (Unaudited)
The following supplementary information about the effects of changing prices on the Company is provided in accordance with the requirements of Statement of Financial Accounting Standards (SFAS) No. 33," Financial Reporting and Changing Prices." It should be viewed as an estimate of the effect of changing prices, rather than as a precise measure.
STATEMENT OF INCOME FROM OPERATIONS AND OTHER FINANCIAL DATA ADJUSTED FOR EFFECTS OF CHANGING PRICES FOR THE YEAR ENDED DECEMBER 31,1979 (Thousands)
Adjusted For As Reported In Adjusted For ChangeIn The Financial General inflation Specific Prices Statements (Constant Dollars)
(Current Costs)
Operating Revenues.
$583,826
$583,826*
$583,826*
Operating Expenses (excluding depreciation).
474,369 474,369*
474,369*
i Depreciation.
39,708 75,610 88,789 Total Operating Expenses.
514,077 549,979 563,158 Operating income.
69,749 33,847 20,668 Other income......
68,672 68,672*
68,672*
Interest and Other Charges.
(54,679)
(54,679)*
(54,679)*
Income From Operations (excluding reduction to net recoverabic cost).....
$ 83,742
$ 47,840**
$ 34,661 16
c
$$N sYsG w
Adjusted For Adjusted For ChangeIn General Inflation Specific Prices (Constant D_ollars)
(Current Costs)
Increase in specific prices (current cost) of property, plant and equipment held during the year"*
$ 271,808 Reduction to net recoverable cost.
$(177,462)
(71,141)
Effect of increase in general price level.
(364,950)
Excess of increase in general price level over increase in specific prices after reJJction to net recoverable cost.
(164,283)
Gain from decline in purchasing power of net amounts owed 151,975 151,975 Net.
$ (25,487)
$ (12,308)
- Assumed to be in " average for the year" dollars and thus are not restated,
- Including the reduction to net recoverable cost the loss from operations on a constant dollar basis would have been
$129,622 for 1979.
"*At December 31,1979, current cost of property. plant and equipment net of accumulated depreciation was $3,200.897, while histoncal cost or net cost recoverable through depreciation was $1.847.603.
FIVE YEAR COMPARISON OF SELECTED SUPPLEMENTARY FINANCIAL DATA ADJUSTED FOR EFFECTS OF CHANGING PRICES (in Thousands of Average 1979 Dollars)
Years Ended December 31 1979 1978 1977 1976 1975 Operating revenues.
$583,826
$619,143
$643,705
$505,690
$427,289 Historical cost information adjusted for general !nflation income from operations (excluding reduction to net recoverable cost) 47,840 Net assets at year-end at net recoverable cost.
491,488 Current cost information income from operations (excluding reduction to net recoverable cost) 34,661 Excess of increase in general price level over increase in specific prices after reduction to net recoverablecost.
164,283 Net assets at year-end at net recoverable cost.
491,488 General information Gain from decline in purchasing power of net amounts owed 151,975 Average consumer price index 217.4 195.4 181.5 170.5 1 61.2 NOTE: SFAS No. 33 requires that historical cost information adjusted for general inflation and current cost information be provided for 1979 and subsequent years. Comparable information is not readi!y available for the years prior to 1979 and thus is not provided.
Constant dollar amounts represent historical costs adjusted for the effects of general inflation.The effects are determined by converting these costs into dollars of equal purchasing power using the Consumer Price index for all Urban Consumers (CPI-U).
17 L_
re EN Es0 l
Current cost amounts reflect the changes in specific prices of property, plant and equipment from the year of acquisition to the present.The current costs of property, plant and equipment,which represent the estimated costs of replacing existing plant assets, are determined by applying the Handy-Whitman Index of Public Utility Construction Costs (HWI) to the cost of the surviving plant by year of acquisition.
Land and certain other plant assets which are not included in the HWI were converted using the CPI-U.
The difference between current cost amounts and constant dollar amounts results from specific prices of property, plant and equipment (as measured by the Handy-Whitman Index) changing at a rate different than the rate of general inflation (as measured by the Consumer Prico Index).
The current year's depreciation expense on the constant dollar and current cost amounts of property, plant and equipment were determined by applying the Company's depreciation rates to the indexed amounts.
The cost of fuel used in generation has not been restated from historical cost. Regulation limits the recovery of fuel costs to actual costs through the operation of adjustment clauses or adjustments in basic rate schedules.
As prescribed in Financial Accounting Standard No. 33, income taxes were not adjusted.
The regulatory commissians to which the Company is subject allow only the historical cost of plant to be recovered in revenues as depreciation.Therefore the excess cost of plant stated in terms of constant dollars or current cost over the historical cost of plant is not presently recoverable in rates.This excess is reflected as a reduction to net recoverable cost. While the rate-making process gives no recognition to the current cost of replacing property, plant and equipment, the Company believes, based on past experiences, that it will be allowed to earn on the increased cost of its net investment when replacement of facilities actually occurs.
l To properly reflect the economics of rate regulation in the Statement of Irwome from Operations presented above, the reduction of net property, plant and equipment to net recoverable cost is offset by the gain from the decline in purchasing power of net amounts owed. During a period of inflation, holders of monetary assets suffer a loss of general purchasing power while holders of monetary liabilities experience a gain. The gain from the decline in purchasing power of net amounts owed is primarily attributable to the substantial amount of debt which has been used to finance property, plant and equipment. Since the depreciation on this plant is limited to the recovery of historical costs, the Company does not have the opportunity to realize a holding gain on debt.
- 11. Accounting Policies The summary of significant accounting policies on page 5 is an integral part of these notes to financial statements.
l 18
- p. m 33 DES %"
Accountants' Opinion Deloitte Haskins & Sells One Shell Square Certified Public Accountants New Orleans, Louisiana 70139 Arkansas Power & Light Company We have examined the balance sheets of Arkansas Power & Light Company as of December 31,1979 and 1978 and the related statements of income, retained earnings, and source of funds for utility plant additions for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
As more fully discussed in Note (1), in April 1979, the Attorney General of Arkansas alleged that the Company had erroneously applied its fuel adjustment clause. On July 3,1979, the Arkansas Public Service Commission issued an interim order modifying the application of the Company's fuel adjustment clause.
The order stated it was not deciding the propriety and legality of ordering refunds and stated that such decision would be made later. In our report dated February 16,1979 our opinion on the 1978 financial statements was unqualified; however, in view of such rate matter, our present opinion as expressed herein is different from that expressed in our previous report.
In our opinion, subject to the effects, if any, of the outcome of the matter discussed in the preceding paragraph, the above mentioned financial statements present fairly the financial position of the Company at December 31,1979 and 1978 and the results of its operations and its source of funds for utility plant additions for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.
February 15,1980 19
.m U.MS2&WO Ten Years of Progress / Financial 1979 l Capitalization and Capitalization Ratios (In Thousands of Dollars) wtuoNs or oottAns Capitalization-End of period:
900 Equity capital:
E Preferred stock and premium.
$ 227,408 b
m ' w -v Common stock.
427,960 800 -
E 700 - @
2',"$' ',7,,"',j**
Retained earnings..
90.657 E
Total.
__ 746.025 600 l
Long-term debt:
500 F rst mortgage bonds and premium u.
763,549 400 Installment purchase contracts and discount 2.
56,167 300-$
Sinking fund debentures.
d Total.
819,716 200 Total capitalization.
$1,565,741 k
E-100 -
O "2 ;,;,',",,,y,,,,,y,,,,y,, j,,,
Annual Payment Requirements:
1971
'73
'75
'77 78 1979 its mo gage bonds.
62.436 Installment purchase contracts..
4,980 Utility Plant Dividends on preferred stock..
19,548 uitoons or cott Ans Utility Plant-End of period:
2400 Electric plant completed.
$1,231,832 2200 w.. m.e, Construction work in progress.
980,054 Nuclear fuel.
O 2000
-e- ~ " a><
Total utility plant.
2,211,886 1800 Less-accumulated depreciation.
364.447 1 00 Net utility plant.
$1,847,439 1400 1200 Income Statement:
Operating revenues..
$ 583,826 1000 800 Operating expenses:
Fuel.
174,667 600 Purchased power..
171,425 400 Payroll-Operation and maintenance.
40,607 200 Other operation and maintenance.
51,425 0
Depreciation.
39,708 1970 '71
'72 '73 '74 '75 '76
'77 '78 1979 Taxes.
36,245 Total.
514,077 Net income Operating income.
69,749 MittiONS OF DOtt ARS (excluding AFDC*).
23.627 l
{,Q%{r,{g.
interest and other charges:
80-Interest on long-term debt.
67,091 70-no n.n,,_
Other interest-net of 60 debt premium..
8.446 Total (excluding AFDC*).
75,537 5 0 ----------
Income from revenues.
17,839 40------------
Non-cash income from AFDC*
65,903 Income from accounting change a.
30 Net income.
83,742 20 1 Includes unamortized premium on long term debt beginning in 1973.
10
=
2 E=cludes currentry matunng portion.
3 Cumulative effect to January 1.1976. of change m accounting for fuel costs 0
- ArDC-Allowance for funds used dunng construction.
1970'71 '72 '73 '74 '75 '7S '77 '78 1979 20
1978 1977 1976 1975 1974 1973 1972 1971 1970 l
$ 171,772 $ 171,772 $ 171,772 $ 161,720 $ 101,657 $ 101,657 $ 86,615 $ 51,529 $ 51,529 397,960 382,960 367,960 337,375 292,375 257,375 202,375 172,375 137,375 81,448 55,641 39,040 41,297 41,869 36,827 34,714 31,043 25,982 651,180 610,373 578,772 540,392 435,901 395,859 323,704 254,947 214,886 709,549 642,979 575,184 586,318 546,284 476,354 393,700 343,700 283,700 39,713 24,505 16,198 4,475 4,475 4,700 4,925 749,262 667,484 591,382 586,318 546,284 480,829 398,175 348,400 288,625 S1400,442._$_1,277J57 _ $1,170,154 $1,126,710 $ 982,185 $ 876,688 $721,879 $603,347 $503,511 56,536 $
49,364 $
42,837 $ 42,837 $ 38,787 $
29,974 $ 23,524 $ 19,687 $ 15,000 4,980 4,103 1,224 14,020 14.020 14.020 13,136 6,600 6,600 5.418 2,768 2,768
$1,178,601
$1,139,511 $1,111,119 $1,097,913 $1,051,248 $ 762,319 $727,558 $684,668 $658,853 785,684 610,557 505,669 350,941 215,794 330,585 216,055 151,797 49,595 0
12,747 4,562 8,179 5,229 29,953 26.722 9,148 1,964,285 1,762,815 1,621,350 1,457,033 1,272,271 1,122,857 970,335 845,613 708,448 331,231 297,464 265,099 240,014 211,456 193,400 175,144 160,665 145,712
$1,633,054 $1,465,351 $1,356,251 $1,217,019 $1,060,815 $ 929,457 $795,191 $684,948 $562,736
$ 556,488 $ 537,408 $ 396,597 $ 316,831 $ 296,811 $ 209,327 $184,810 $166,063 $149,317 167,681 169,890 107,213 76,322 83,840 46,605 36,648 30,151 27,124 120,804 114,225 107,983 56,022 55,936 28,737 25,334 16,705 9,592 35,400 29,448 26,626 24,286 19,486 17,647 15,731 14,841 13,840 55,592 52,469 31,224 30,637 24,114 19,416 16,799 15,621 14,501 38,365 36,768 35,025 33,790 23,885 21,373 19,609 18,742 17,400 57,249 64,091 36,022 38.352 24,949 25,766 25,288 30,235 31,110 475,091 466.891 344,093 259,409 232.210 159,544 139,409 126,295 113,567 81,397 70,517 52,504 57,422 64,601 49,783 45,401 39,768 35,750 16,986 12.466 10,328 8,131 1,352 572 45 75 (127) 56,949 45,047 43,152 40,553 32,554 25,528 21,843 17,750 13,594 4,076 3,917 2,703 3,265 3,323 1,557 1,002 592 701 61,025 48,964 45,855 43,818 35,877 27,085 22,845 18,342 14,295 37,358 34,019 16,977 21,735 30,076 23,270 22,601 21,501 21,328 50,262 36,666 26,445 18,978 25,486 18,676 14,170 7,407 3,429 3,541
$ 87,620 $
70,685 $
46,963 $
40,713 $
55,562 $
41,946 $ 36,771 $ 28,908 $ 2,4,757 21 1
m rM NE EsE Ten Years of Progress / Operating 1979 Average Annual Kilowatt Hour Use Residential Customers THOUSANDS OF KWH Electric Operating Revenues:
l 10'0 Residential.
$161,46@
y-t l
q/
Nr g; Commercial.
101,048 J
8.0
- ^
J Industrial-Aluminum processing..
65,861 N
Industrial-Other....
112,913 Government and municipal.
11,48@
6.0 Total from ultimate customers.
452,773 Public utilities.
125,978 4.0 Miscellaneous revenues.
5,074 Total electric operating revenues.
$583,823 2'0
- + " " " * * " ' ' *
+* ***
Electric Sales (Millions of Kilowatt Hours):
l l
l Residential.
3,884 0
1970 '71
'72 '73 '74 '75 '76 '77 '78 1979 Commercial.
2,444 Industrial-Aluminum processing.
3,342 Industrial-Other.
3,681 Kilowatt Hour Sales Government and municipal.
323 to Ultimate Customers BILLIONS OF KWH Total sales to ultimate Customers.
13,684 14.0 Public utilities.
4.20f
)N Total energy sold.
17,883 12.0 1
jH(
Number of customers-end of year:
10.0 t
Residential.
400,29C
/
'~ y Commercial.
49,00$
8.0 Industrial-Aluminum processing.
1 Industrial-Other...
12,151 6.0 Government and municipal.
1,617 Total ultimate customers.
463,06@
4.0 Public utilities.
1 @-
Total customers.
463,087 2.0 Electric Energy:
O Source and disposition (Millions of Kilowatt Hours) t 1970 '71
'72 '73 '74
'75 '76 '77 '78 1979 2,46@
Generated-net station output Gas.
Payroll Oil.
4,05@'
wLuoNS OF DOLLARS Nuclear.
4,101 70 Hydro.
i i
i i
g l
[
g 251 l
l l
l Total generated.
10,87@
-e-u,,,,,,
60 - + g.au.a i
Purchased.
7,74@
l Net interchange.
296 I
I I
I 50 Total.
18,906 Less: Company uses, losses and 40l l
unaccounted for.
1,01@
l.
l Total energy sold.
17,88@l 30 l
Peak demand (Megawatts).
3.521; l
20 10 91970 '71 '72 '73 '74 '75 '76 '77 '78 1979 i
22
1978 1977 1976 1975 1974 1973 1972 1971 1970
$165,347 S155,225 S121,267 S104,440
$ 86,337
$ 68,093
$ 57,976
$ 45 718
$ 45,230 99,021 93,532 75,641 62,325 53,438 43,448 38,092 33,96s 31,214 43,972 40,482 33,100 12,652 28,061 17,358 14,803 13,132 12,334 105,870 102,952 83,844 61,619 58,566 43,865 36,380 31,141 27,930 11,326 10,535 8,536 7,144 6,003 4,737 4,248 3,836 3,594 425,536 402,726 322,388 248,180 232,405 177,506 151,499 131,816 120,302 124,653 128,174 70,362 65,346 61,168 28,94?
30,392 32,209 27,067 6,299 6,508 3,847 3,305 3,238 2,879 2,919 2,038 1,948
$556,488
$537,408
$396,5S7
$316,831
$296,811
$209,327
$184,81 C S166,063
$149,317 4,062 3,838 3,369 3,36S 3,077 3,103 2,770 2,393 2,182 2,472 2,353 2,162 2,072 1,893 1,903 1,753 1,614 1,503 2,686 2,597 2,14" 1,011 2,569 2,594 2,569 2,540 2,574 3,545 3,443 0,i60 2,840 3,042 2,920 2,702 2,426 2,230 334 325 307 297 284 290 285 276 265 13,099 12,556 11,143 9,606 10,865 10,810 10,079 9,249 8,754 4,475 5,170 3,247 3,548 3,640 2,899 3,382 4,594 4,906 17,574 17,726 14,390 13,154 14,505 13,709 13,461 13,843 13,660 394,766 387,495 379,556 371,491 364,954 355,673 343,468 330,566 318,732 48,424 47,580 46,844 45,657 44,957 44,073 43,188 46,785 45,606 1
1 1
1 1
1 1
1 1
11,724 11,182 10,913 10,431 9,926 9,508 9,175 4,733 4,638 1,573 1,519 1,500 1,446 1,396 1,317 1,282 1,235 1,188 456,488 447,777 438,814 429,026 421,234 410,572 397,114 383,320 370,165 19 25 25 25 25 25 24 71 75 456,507 447,802 438,839 429,051 421,259 410,597 397,138 383,391 370,240 470 487 1,168 2,645 3,209 3,919 5,932 7,630 9,676 6,741 6,973 4,010 2,242 3,920 4,089 2,484 1,496 382 5,220 5,085 3,858 4,874 171 131 98 94 172 230 321 125 92 133 12,562 12,643 9,130 9,933 7,530 8,329 8,541 9,218 10,191 6,162 6,133 6,172 4,070 7,670 5,890 5,944 5,474 4,268 8
(65) 43 101 181 361 10 17 36 18,732 18,711 15,345 14,104 15,381 14,580 14,495 14,709 14,495 1,158 985 955 950 876 871 1,034 866 835 17,574 17,726 14.390 13,154 14,505 13,709 13,461 13,843 13,660 3,654 3,336 3,242 2,868 3,049 2,744 2,607 2,565 2,312 23
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.i Jerry L. Maulden W.M. Murphey J.D. Phillips President &
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Senior Vice President, Chief Executive Officer Divisions System Engineering AP&L since 1965 AP&L since 1936
& Planning AP&L since 1963 y
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Charles L. Steel William Cavanaugh, lil Jack L. King Vice President &
Vice President.
Vice President. Divisions Assistant to the President Generation & Construction AP&L since 1966 AP&L since 1970 AP&L since 1969 Officers
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.y Jerry D. Jackson John J. Harton General Counsel. Secretary Treasurer & Assistant
& Assistant Treasurer Secretary AP&L since 1979 AP&L since 1965 a