ML19309C202
| ML19309C202 | |
| Person / Time | |
|---|---|
| Site: | Haddam Neck File:Connecticut Yankee Atomic Power Co icon.png |
| Issue date: | 04/02/1980 |
| From: | Bishop R CONNECTICUT YANKEE ATOMIC POWER CO. |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8004080292 | |
| Download: ML19309C202 (36) | |
Text
l CONNECTICUT YANKEE ATOMIC POWER COMPANY BERLIN. CO N N ECTIC U T p o. sox 27o H ARTFORD. CONNECTICUT 08101 tasameo=a L
203 666 f 9tt April 2, 1980 l
Director Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C.
20555
Dear Sir:
In accordance with paragraph 50.71(b) of 10CFR, Part 50, enclosed are sixteen (16) copies of the 1979 Annual Financial Report of this Company, license holder, certified by Arthur Andersen & Company, certified public accountants.
Very truly yours, Bdshop Ro ert W.
Secretary j
FJG:rme Enclosure l
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8 o4 so 192 r
SECURITIES AND EXCHANGE COMMISSION WASifINGTON, D.C.
20549 FORM 10-K ANNUAL REPORT PURSUANT 0 SECTION 13 OR 15 (d) 0F Tile SECURITIES EXCib\\NGE ACT OF 1934 For the fiscal year ended December 31, 1979.
Commission file number 2-22958 CONNECTICUT YANKEE ATOMIC POWER COMPANY (Exact name of registrant as specified in its charter)
CONNECTICUT 06-0790937 (State or other jurisdiction of
_(IRS Employer incorporation or organization)
Identification Number)
Selden Street, Berlin, Connecticut 06037 (Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code (203) 666-6911 Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange Title of Each Class on which registered None Securities registered pursuant. to Section 12 (g) of the Act:
None (Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for at least the past 90 days.
Yes X
No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report.
Class Outstanding at December 31, 1979 C
Common Stock, $100 par value 350,000 shares j
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~ Item 1.
Business i
THE COMPANY Connecticut Yankee Atomic Power Company (the Company or the Registrant) owns and operates a 600,300 kilowatt, single-unit nuclear generating plant (the Plant). The Plant, which commenced commercial operation on January 1,1968, is located on a site of approximately 530 acres adjacent -
to the Connecticut River in Haddam, Connecticut. The Company was incorpor-ated in 1962 as a public service company under the General Statutes of i
Connecticut. The Company's stock is held by' eleven New England electric utilities.
!j BUSINESS I
l Operations j
The Company has entered into power contracts with its eleven stock-i
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holders (sponsors) for the sale to them of the entire capacity and 1
output of the Plant for a period of thirty years.
1 The sponsors' respective percentages of ownership of the Company's j
Common Stock, and the respective percentages of the capacity and output of the Plant to be purchased by them, are as follows:
i The Connecticut Light and Power Company 25.0%
New England Power Company 15.0 Boston Edison Company 9.5 l
The IIartford Electric Light Company 9.5 j
The United Illuminating Company 9.5 j
Western Massachusetts Electric Company 9.5 Central Maine Power Company 6.0 Public Service Company of New llampshire 5.0 j
Cambridge Electric Light Company 4.5 Montaup Electric Company 4.5 Central Vermont Public Service Corporation 2.0 Total 100.0%
Under the terms of the power contracts, each sponsor is required to
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pay the Company, on a monthly basis, an amount equal'to its entitlement
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percentage of the Company's total operating expenses with respect to the.
Plant, including depreciation, plus a return on the " net unit investment"'
as defined.
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The obligations of the sponsors to make payments under the power contracts 'are unconditional, subject to each sponsor's right to cancel its power contract if deliveries cannot be made because of certain l
defined circumstances.
1 The Plant has generated over'50 billion kilowatt-hours of electricity since it commenced commercial operation in 1968. The overall capacity factor from-1968 through 1979 was 77.9 percent, including a 81 1 percent-j capacity factor during 1979.
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Employees As of December 31, 1979, the Company had 124 regular full-time employees, of whom 59 were represented by a union. The present contract with the union expires March 1, 1980.
Nuclear Fuel and Decommissioning Costs The Company has contracts for nuclear fuel for the Plant as follows:
uranium concentrates through 1986; conversion through 1985; enrichment through 1995 and fabrication through 1986.
The Company expects that uranium concentrates and related services for other periods not covered by existing contracts will be available, although such availability depends, among other factors, on suppliers of such materials and services developing additional capacity. The costs for materials and services for subsequent periods may be higher than under existing contracts.
Costs associated with nuclear plants include amounts for the dis-position of nuclear wastes, including spent fuel, and for the ultimate decommissioning of these plants.
There is some uncertainty with respect to current cost estimates for plant decommissioning, largely because of recently announced planned changes and extensions of the federal government policy.
Although in planning the nuclear generating plant it had been expected that spent fuel would be reprocessed in commercial facilities, present government policy favors an indefinite postponement of commercial reprocessing.
In view of this, operating nuclear generating plants are required to make long-term arrangements for the storage of spent fuel.
The Company is expected to have adequate storage capacity until at least the mid-1990's by which time government storage and waste repository facilities are expected to be available to accept spent fuel.
In the event such government storage facilities are not available at that time, the Company may be required to incur substantial additional costs in obtaining alternate storage facilities.
The federal administration has recently announced specific proposals for the disposal of nuclear wastes. However, the Company cannot predict at this time what difficulties will be encountered in the future regarding such disposal. The Nuclear Regulatory Commission (NRC), along with other federal agencies, is in the process of developing regulations and guidelines in this area.
It is possible that there will be additional costs associated with the disposal of nuclear wastes, including spent fuel.
The Company presently estimates decommissioning costs for its nuclear unit, on the basis of complete dismantlement at the time of retirement, to be approximately $57.2 million.
If alternative decom-missioning arrangements are required, these cost estimates may increase.
On March 17, 1971 the Company and General Electric Company (GE) executed an agreement for the reprocessing and storage of spent fuel.
from the Plant.
In September of 1974 GE informed the Company that, because of delays in the startup and operation of its reprocessing plant, it would not provide the agreed upon reprocessing and recovery services.
In June of 1976 the Company instituted an action against GE which was settled by an agreement dated January 9,1979.
As part of the settlement agreement, GE agreed to retain and store at its Morris, Illinois, facility eighty spent fuel assemblies previously transferred to that facility at least until December 31, 1986 without cost or expense to the Company.
CONSTRUCTION AND NUCLEAR FUEL EXPENDITURES Construction expenditures (including Allowance for Funds Used During Construction) and nuclear fuel expenditures for the years 1980 through 1984 are estimated to be as follows:
Estimated Estimated Construction Nuclear Fuel Year Expenditures Expenditures (Thousands of Dollars) 1980
$32,733
$ 10,864 1981 25,790 30,102 1982 24,072 38,465 1983 9,540 35,436 1984 3,848 15,600 TOTAL
$95,983
$130,467 The above construction expenditures are primarily for plant modi-fications and improvements.
FINANCING The estimated construction and nuclear fuel expenditures represent a significant undertaking by the Company.
Even though all aspects of future financing plans have not been fomulated at present, the Company plans to issue up to $60,000,000 of additional long-term debt in 1980.
In 1979, the Company entered into an arrangement under which two banks are financing up to $50,000,000 of nuclear fuel under a trust arrangement while the fuel is in process of refinement. The Company will be obligated to purchase the fuel and reimburse the trust for payments made by the trust and for financing costs, at the time of withdrawal of the enriched uranium from the Department of Energy.
REGULATION The Company is a public utility under Part II of the Federal Power Act and is subject to regulation by FERC with respect to, among other things, wholesale rates and accounting procedures.
i j-The Company is subject to further regulation-by the. Connecticut Division of Public Utility Control (DPUC) with respect to, among other
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' things, accounting procedures and the issuance of securities.
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l The Company and six of its sponsors are subject to regulation by the Securities and Exchange Commission under the Public Utility Holding i
Company Act of 1935 with respect to various matters, including the
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issuance of securities, j
The Company is subject to the jurisdiction of the NRC, and it has received from the NRC a full term, full power operating license for the 7
Plant. NRC has broad supervisory and regulatory jurisdictions over the t
design, construction and operation of nuclear reactors, including matters of public health and safety, financial qualifications, antitrust considera-tions, and environmental impact.
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Subsequent to the March 28, 1979 accident at the Three Mile Island (TMI), Pennsylvania, nuclear generating station reviews of nuclear plant construction and operations have been undertaken by governmental commissions, industry groups and individual utilities. The Company has voluntarily adopted modifications of its operating procedures, operator training programs and emergency preparedness plans.
The NRC has already promulgated numerous requirements in response to TMI which will require modifications costing approximately $5,000,000.
It is anticipated that changes in nuclear plant construction, including backfitting of existing plants, and in nuclear plant operations will be ordered by the NRC. The Company's actions and anticipated NRC orders will result in increases in the i
Company's capital expenditures and operating costs.
Some equipment i
modifications may require limited shutdowns of the Company's plant which would not otherwise be necessary. The amounts of increased capital expenditures and operating costs cannot be determined at this time.
See Item 5, Legal Proceedings for a discussion of the Price-Anderson Act.
I a
The expanding development of nuclear power plants in the United States continues to be a subject of public controversy. Various groups j
have published articles and reports, filed lawsuits and participated in administrative proceedings, claiming that the increasing use of nuclear power plants under the present state of nuclear technology presents un-acceptable risks to public health and safety and to the environment.
It is possible that some of the claims made by such groups, if they should prevail, may result in substantial modification to or extended shutdowns l
of plants presently in operation, which could have a substantial adverse impact on the results of operations of the Company, f-l The Company anticipates that compliance with present and future environmental requirements and other areas of regulation may cause it to-i i
incur substantial capital expenditures for equipment modifications and additions, monitoring equipment and recording devices and to incur substantial additional operating expenses. The total amount of these i
expenditures is not now determinable. The construction costs for com-pliance with current environmental requirements is immaterial.
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'p RATES 4
On May 5, 1978 a Supplementary Power Contract dated as of March 1, 1978 between the Company and its eleven sponsor-purchaser utilities was filed with the FERC. The application, as amended on July 2, 1978.to exclude construction work in progress from rate base, ' raised the overall rate of return from 6 percent to 10 percent. Since Noven.ber 5,1978,
$12.2 million in revenues have been collected subject to possible refund.
On January 23, 1980, the Presiding Administrative Law Judge issued an initial decision in which he allowed an overall 9.74 percent rate of return, based on an 11.5 percent return on common equity, and reduced other elements of revenue requirements, which would have resulted in a revenue increase of approximately $4.8 million over the fourteen-month.
i period ended December 31, 1979. The Company and several intervenors have appealed from portions of the initial decision to the full commission.
The Company has recorded a reserve of $3,920,000 for revenues which may have to be refunded to customers, however, additional refunds may be required. The ultimate outcome of this matter cannot be determined at this time.
Item 2.
Summary of Operations
-Years Ended December 31, 1979 1978 1977 1976 1975 (Thousands of Dollars)
(Not covered by report of Independent Public Accountants)
Operating Revenues
$62,620
$40,770
$38,191
$36,373
$40,806 Operating Expenses:
Operation and Maintenance 38,106 23,225 20,448 22,198 27,046 Depreciation 5,075 6,092 5,350 4,730 4,572 Federal and State Income Taxes 4,485 1,277 3,591 836 367 Taxes other than income taxes 1,627 1,502 1,393 1,386 1,177 Total operating ex-i penses 49,293 32,096 30,782 29,150 33,162 Operating Income 13,327 8,674 7,409 7,223 7,644 Other income (deductions),
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net (8)
(1)
(6)
(383)
(65) i Income before interest charges 13,319 8,673 7,403 6,840 7,579 Interest charges 7,511 5,607 4,271 4,048 4,267 Net Income
(_5,808
$ 3,066
$ 3 (32
$ 2 792
$ 3,312-t t
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Earnings per share *
$ 16.60
$ 8.76
$ 8.95
$ 7.98
$ 9.46 Dividends per share *
$ 8.00
$ 8.00
$ 9.00
$ 7.80
$ 8.57 4
4
- Based on 350,000 shares outstanding and unchanged since June 26, 1967.
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MANAGEMENT'S DISCUSSION AND ANALYSIS'
-0F THE
SUMMARY
OF OPERATIONS 1
F Operating Revenues f
Operating revenues earned by the. Company are the aggregate of
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operating expenses plus a return on net unit investment as stipulated in-power contracts with the eleven utility companies who are the owners of the company.
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Operation and Maintenance Expenses I
i Operation and maintenance expenses increased in 1979 and 1978 by
$14.9 million (64 percent) and $2.8 million (14 percent), respectively.
Higher fuel costs accounted for 30 percent of the $14.9 million increase in 1979 and substantially all of the increase in 1978. Additional costs j
associated with the provision for permanent storage of spent nuclear I
fuel contributed to the fuel expense increase in 1979.
Higher kilowatt-hour 1
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sales and an increase in the nuclear fuel amortization rate were responsible for the 1978 fuel expense increase, j
Maintenance and other operation expenses are largely related to scheduled outages for refueling, inspection and maintenance. The timing of the outages, which occurred early in 1979 and late in 1977, is. responsible l
for the increase in other operation and maintenance costs in 1979 over i
1978 and also the decrease in these costs in 1978 as compared'to 1977.
i Depreciation expense decreased by $1.0 million (17 percent) in 1979 due to a change in the method of calculating certain charges as the result of the initial decision of the Presiding Administrative Law Judge in proceedings pending before the Federal Energy Regulatory Commission.
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Depreciation expense increased by 14 percent in 1978 due to higher depreciation rates which were put into effect at the beginning of 1978.
l Taxes Federal and state income taxes increased by $3.2 million (251 percent) in 1979 and decreased in 1978 by'$2.3 million (64 percent).
The increase in 1979 was due to higher taxable income while the decrease in 1978 was caused by an adjustment of prior years' accruals and lower
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taxable income. Taxes other than income taxes increased in 1979 and 1978 due to higher FICA rates. Also contributing to the increase in
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other taxes 11 1978 was an increase in the-property tax mill rate.
t Interest Charges i
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- Total interest charges (excluding the credit for allowance for borrowed funds used during construction) increased in 1979 and 1978 by-
$2.5 million (44 percent),and $1.3 million (31 percent), respectively.
Increased charges in 1979 were due to_ the $20 million five-yeat bank loan'which was. entered into.in the third quarter of.1978 and higheri interest rates on increased short-term borrowing.
Interest chargbe
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l-increased in 1978 primarily due to increased short-term borrowing at j
higher rates.
The allowance for borrowed funds used during construction i
increased as a result of an increase in construction work in progress.
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Item 3.
Properties The Company's plant is located on a site of approximately 530 acres on the Connecticut River at lladdam Neck in the Town of Haddam, near Middletown, Connecticut. The plant occupies about 15 percent (75 acres) of the total area. The rest of the site, primarily woodlands and meadows, remains in its natural state.
There are two main buildings at the site, one which houses-the reactor, and the other which houses the turbine. The offices are attached to the turbine building. The Company's nuclear generating plant and other properties are owned in fee.
The properties are well maintained and in good condition and are both adequate and suitable for the purposes intended.
Item 4.
Parents and Subsidiaries This information is unchanged from the Annual Report on Form 10-K filed by the Registrant for the fiscal year ended December 31, 1977.
4 Item 5.
Legal Proceedings On June 27, 1979 nine class actions, together with several indivi-dual actions, commenced in the U.S. District Court for the Middle District of Pennsylvania and seeking damages as a result of the TMI nuclear accident became the subject of an amended consolidated complaint.
If the provisions of the Price-Anderson Act are determined to be applicable to the accident, and if total damages resulting from the accident exceed t
$140 million, the Company would have an obligation to share in the payment of such excess up to a total of $5 million.
The Company expects that such an obligation would be passed on to its sponsor companies.
For information on the Company's legal action against General Electric Company with respect to a contract for nuclear fuel reprocessing, and the settlement agreement reached on January 9,1979, see " Business-
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Nuclear Fuel" and for information with respect to the Company's proceedings before FERC with respect to revised rates, see " Rates", both included in
" Item 1 - Business".
Item 6.
Increases and Decreases in Outstanding Securities and Indebtedness (a) The Registrant had no increases or decreases in equity securities during the last fiscal year.
(b) and (c)
There were no reportable changes in the amount of debt securities and indebtedness outstanding of the Registrant during 1979.
Item 7.
Changes in Securities and Changes in Security for Registered Securities The Registrant had no changes either in securities or in security for registered securities during the last fiscal year.
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Item 8.
Defaults upon Senior Securities There have been no material defaults upon senior securities of the Registrant.
Item 9.
Approximate Number of Equity Security lloiders The number of holders of record of the Registrant's equity securities at December 31, 1979 was as follows:
Title of Class Number of Record lloiders Conunon Stock - $100 par value 11 Item 10.
Submission of flatters to a Vote of Security Holders The required information was filed in the Registrant's Form 10-Q r
for the quarter ended Pfarch 31, 1979.
Item 11.
Indemni fication of Di rectors and Of ficers This information is unchanged f rom the Annual Report on Form 10-K filed by the Registrant for the fiscal year ended December 31, 1977.
Item 12.
Financial Statements, Exhibits Filed, and Reports on Form 8-K (a) 1.
Financial Statements:
The financial statements, including supporting schedules, are listed in the Index to Financial Statements filed as part of this annual report.
2.
Exhibit:
A.
liaihlam Fuel Supply Trust, dated July 1, 1979.
(b)
The Registrant. filed a Current Report on Form 8-K on December 19, 1979, in which the change in Independent Public Accountants was reported.
On that. date, the Board of Directors of the Registrant engaged the accounting firm of Arthur Andersen & Co. as Independent Public Accountants.
Effect.ive as of December 19, 1979, the work of flain llurdman & Cranstoun was terminated.
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-PART II Item 13.
Security Ownership of Certain Beneficial Owners and Management
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(a) and (b) 'The following table sets forth information concerning owners of greater than 5% of the_ Company's common stock. None is held by management.
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Title Type Percent of of' Amount of
'Name and Address Class Ownership owned Class i
The Connecticut Light and Power Company l
Selden Street Berlin, CT 06037 Common Record 87,500
- 25. %
New England Power Company 441 Stuart Street Boston, MA 02199 Common-Record 52,500 15 f
Boston Edison Companf i
800 Boylston Street
~ Boston,'MA 02199 Common Record 33,250 9.5%
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The llartford Electric
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Light Company i
Selden Street Berlin, CT 06037 Common Record 33,250 9.5%
j The United Illuminating
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80 Temple Street New Haven, CT 06506 Common Record 33,250 9.5%
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Western Massachusetts l
Electric Company i
174 Brush Hill Avenue West Sprgfld., MA 01089 Common Record 33,250 9.5%
i Central Maine Power Company 9 Green Street Augusta, ME 04330 Common Record 21,000 6.0%'
(c)- The Company knows of no contractual arrangements which may at a-subsequent date result in a change in control of the Company.
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Item 14.
Directors and Executive Officers of the Registrant i
(a) and (b) - The following information is provided with respect to each i
person who was a Diret ter of the Company as of December 31, 1979.
i Principal Term of Position With Business Name Age Office Company
-Experience l
Joan T. Bok 50 Until None New England Elec. System i
1980 l
William F. Burt 53 Annual None Cambridge Elec. Light Co.
Meeting John F. G. Eichorn, Jr.
56-None Eastern Utilities Assoc.
i William'B. Ellis 39 None Northeast Utilities John D. Fassett 53 None United Illuminating Co.
James E. Griffin 52 None Central Vermont Public Service Co.
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Guy W. Nichols 55 None New England Elec. System i
John B. Randazza 51 None Central Maine Power Co.
i Lelan F. Sillin, Jr.
61 Chairman Northeast Utilities i
Donald C. Switzer 63 President
. Northeast Utilities i
William C. Tallman 59 None
- Public Service Company s
of New Hampshire l
Joseph T. Tyrell(l) 54 None Boston Edison Company (1) Elected effective September 6, 1979; previous Director, Maurice J.
Feldmann, resigned effective that date.
Each Director has held executive positions with the companies as listed f
for more than the past five years.
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The names, ages and positions of the executive officers of the Company i
as of December 31, 1979 are listed below along with their business experience during the past five years. Officers are appointed annually by the Board of Directors and hold office until their successors are chosen. There are no arrangements or understandings between any officer
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and any other person pursuant to which the officer was selected.
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5 Office Name Age Position Chairman Lelan F. Sillin, Jr. (1) 61
. Director President Donald C. Switzer (2) 16 3 Director Vice Pres-Walter F. Fee (3) 58
.None Vice Pres William G. Counsil (4) 42 None Secretary Robert W. Bishop (5) 36 None Treasurer Leonard A. O'Connor (6) 53 None Controller Warren F. Brecht
-(7) 47 None (1) Lelan F. Sillin, Jr., became President on March 16, 1970 and Chairman on March 20, 1971. llis principal employment is as Chairman of the i
Board and Chief Executive Officer of Northeast Utilities, a registered holding company, having served in that position since April 25, 1978.
Prior to that time he'was Chairman of the Board and President-of Northeast Utilities. lie also holds comparable executive positions in the operating and service subsidiaries of Northeast Utilities.
i (2) Donald C. Switzer was made Vice President on September 28, 1966 and became President on March 20, 1971.
Ilis principal employment is as d
Vice Chairman of Northeast Utilities, a position he has held since.
April 25, 1978.
Prior to that time he was Vice _ President of Northeast Utilities. Ile also holds comparable executive positions in the operating and service subsidiaries of Northeast Utilities.
(3) Walter F. Fee was elected Vice President on June 28, 1977. His j
principal employment is as Executive Vice President of Northeast Utilities Service Company, a position he has held since May 1, 1978.
Prior to that time he was Vice President of Northeast Utilities Service Company, lie also holds comparable positions in the operating subsidiaries of Northeast Utilities.
(4) William G. Counsil became a Vice President on July 1, 1978, replacing i
Warren A. Greten who had resigned. llis principal employment is as Vice President of Northeast Utilities-Service Company, a position he has held since May 1, 1978, lie joined Northeast Utilities in 1967 and has served in a number of nuclear engineering positions including plant superintendent of Millstone I and II.
lie also 2
holds comparable positions in the operating and service subsid-aries of Northeast Utilities.
(5) Robert W. Bishop was elected Secretary on June 23, 1978, replacing Francis L. Kinney who had resigned, llis principal employment is as 1
Secretary of Northeast Utilities. lie also holds comparable. positions in the operating subsidiaries of Northeast Utilities.
Prior to j
joining Northeast Utilities in 1977 as Assistant Secretary he had been associated with the Connecticut Energy Agency and the Connecticut Department of Planning and Energy Policy, most recently as Assistant Director of Research and Policy Development.
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(6) Leonard A. O'Connor was elected Treasurer on September 24, 1975.
Ifis principal employment is as Vice President and Treasurer of Northeast Utilities Service Company. lie was elected Treasurer of -
Northeast Utilities Service Company on February 16, 1970, and Vice President on August 1, 1975.
lie also holds comparable positions in the operating subsidiaries of Northeast Utilities.
(7) Warren F. Brecht was elected Controller on September 6, 1979.
His principal employment is as Vice President of Northeast Utilities Service Company, a position he has held since June 6, 1977.
Prior to that date he was the Assistant Secretary (Administration), U.S.
Department of the Treasury, a position he had been appointed to in 1972.
The above officers are employed and compensated by Northeast Utilities Service Company, Selden Street, Berlin, Connecticut 06037.
There have been no events under any bankruptcy act, no criminal proceedings and no judgements or injunctions material to the evaluation of the ability and integrity of any director or executive officer during the past ten years.
There are no family relationships between any director or executive of ficer and any other director or executive of ficer of the Company, l_ tem 15.
Management Remuneration and Transactions (a) through (e) The Company pays no remuneration to its officers or directors nor are they granted any options to puichase securities.
No members of management are indebted to the Company.
(f) During 1979, the Company paid $3,327,000 to Northeast Utilities Service Company, an a f filiate of The Connecticut Light and Power Company, The llartford Electric Light Company and Western Massachusetts Electric Company, subsidiaries of Northeast Ut ilities, and three of the eleven sponsors of the Company, under the service contract. Such services were hilled at cost.
SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,- the registrant has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
CONNECTICUT YANKEE ATOMIC POWER COMPANY By /s/ Leonard A. O'Connor Leonard A. O'Connor Treasurer Date March 28, 1980 a
4 CONNECTICUT YANKEE ATOMIC POWER COMPANY Index To Financial Statements Page Reports of Independent Public Accountants F-2 Balance Sheets at December 31, 1979 and 1978 F-3--F-4 Statements of Income and Retained Earnings, for the years ended December 31, 1979 and 1978 F-5 Statements of Sources of Funds for Gross Property Additions for the years ended December 31, 1919 and 1978 F-6 Notes to Financial Statements at December 31, 1979 and 1978 F-7--F-15 Report of Independent Public Accountants on Schedules S-1 Schedules:
V-Utility Plant years ended December 31, 1979 and 1978 S-2 V-Nuclear Fuel - years ended December 31, 1979 and 1978 S-3--S-4 VI - Accumulated Provision for Depreciation of Utility Plant - years ended December 31, 1979 and 1978 S-5 IX - Bonds, Mortgages and Similar Debt - December 31, 1979 and 1978 S-6 Schedules other than those listed above are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.
9 F-1
Reports of Independent Public Accountants To Connecticut Yankee Atomic Power Ccmpany:
We have examined the balance sheet of Connecticut Yankee Atomic Power Company (a Connecticut corporation) as of December 31, 1979, and the related statements of income and retained earnings and sources of funds for gross property additions for the year then ended.
Our examina-
- t. ion was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
As discussed in Note 2 to the financial statements, the Company has billed increased revenues subject to possible refund undet a rate increase which is pending the regulatory decision of the Federal Energy Regulatory Commission. The effect of any adjustments that may result from the final outcome of this decision cannot presently be determined.
In our opinion,. subject to the effect, if any, on the 1979 financial statements of the regulatory decision on the rate increase referred to in the preceding paragraph, the financial statements referred to above present fairly the financial position of Connecticut Yankee Atomic Power Company as of December 31, 1979, and the results of its operations and the sources of funds f or gross property additions for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
ARTIIUR ANDERSEN & CO.
liart ford, Connecticut
?! arch 21, 1980 Stockholders and Board of Directors Connecticut Yankee Atomic Power Company We have examined the balance sheet of Connecticut Yankee Atomic Power Company as of December 31, 1978 and the related statements of income and retained earnings and sources of funds for gross property additions for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, such financial statements present. fairly the financial position of Connecticut Yankee Atomic Power Company at December 31, 1978 and the results of its operations and the sources of funds for gross property additions for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.
Our examination referred to above also included the financial schedules listed in answer to Item 12.
In our opinion, the. financial schedules present fairly the information required to be set forth t.herein.
MAIN HURDMAN & CRANST0UN New York, New York March 9, 1979 F-2
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CONNECTICUT YANKEE ATOMIC POWER COMPANY Balance Sheets v
. December 31, 1979 and 1978 4
-Assets-1979 1978
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Utility Plant, at original-cost:
.(Thousands of Dollars)-
Electric plant
$126,367
$124,453 Less: Accumulated provision - for depreciation -
47,429_
42,415 78,938 82,038-Construction work in progress 9,084 1,762
. Nuclear fuel, net of amortization 55,538 48,251
+
Total net utility plant 143,560 132,051 Current Assets:
Cash 1,391 698.
Accounts receivable, principally from l-associated companies 9,077 3,517 Materials and supplies, at average cost 1,369 1,044 Prepayments and other 413 360 12,250 5,619 C
Deferred Charges:
Unamortized debt expense 243 279 Accumulated deferred income taxes (Note 3) 4,327 67 Other 555 48 j
5,125-394' e
l Total Assets
$_16_0,935
$138_,064 t
i h
i a
v
[
The accompanying notes are an. integral part of these financial statements.
l
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._.m m.
Capitalization and Liabilities 1979 1978 (Thousands of Dollars)
Capitalization:
Common stock - $100 par value; authorized 700,000 shares; outstanding 1979 and 1978 350,000 shares
$ 35,000
$ 35,000 Capital surplus, paid in (Note 4) 2,964 2,964 Retained earnings (Note 5) 11,716 8,708 Total common stockholders' equity 49,680 46,672 Long-term debt, net (Note 5) 62,056 65,648 Total capitalization 111,736 112,320 Current Liabilities:
Commercial paper (Note 6) 12,950 15,475 Long-term debt due within one year 1,375 375 Nuclea r friel payable 11,000 Accounts payable:
Associated companies 1,168 326 Other 3,517 1,473 Accrued taxes 8,929 2,492 Accrued interest 1,733 1,524 Other 21 16 40,693 21,681 Def~ erred Credits:
Unamortized gain on reacquired debt 2,513 2,294 Accumulated deferred investment tax credits 1,920 1,765 Reserve for revenues subject to possible refund (Note 2) 3,920 Other 153 4
8,506 4,063 Commitments and Contingencies (Note 9)
Total Capitalization and Liabilities
$ _160.,9_35
$ 138,_0_64 l
F-4
.t CONNECTICUT YANKEE ATOMIC POWER COMPANY
)
Statements of Income and Retained Earnings Years Ended December 31, 1979 and 1978
~
1979 1978 t
(Thousands of Dollars) 2 Operating Revenues (Note 2)
$62,620
$40,770 Operating Expenses:
Operation -
Fuel 17,415 13,025 i
Other 12,863 6,625 Maintenance 7,828 3,575
[
Depreciation 5,075 6,092 i
j Federal and state income taxes (Note 3) 4,485 1,277 f
)
Taxes other than income taxes (Note 8) 1,627 1,502 l
Total operating expenses 49,293 32,096 i
Operating Income 13,327 8,674 l
Other Income:
}(
Allowance for equity funds used during construction 14 4
j Other, net (30)
Income taxes applicable to other income -
i credit (Note 3) 8 (5)
Net other income (8)
(1)
Income before interest charges 13,319 8,673 Interest Charges:
Interest on long-term debt 5,679 4,264 I
Amortization of debt premium and expense, net 30 30 Amortization of gain on reacquired bonds (184)
(149)
Other interest 2,568
.1,467 Allowance for borrowed funds used during i
construction (582)
(5)
{
Total interest charges 7,511 5',607 Net Income (per share, $16.60 in 1979 and
$8.76 in 1978) 5,808 3,066 Retained Earnings at beginning of period (Note 5) 8,708 8,442 Dividends declared on common stock ($8.00 per share in 1979 and 1978).
(2,800)
(2,800)
- Retained Earnings at end of 5.eriod
$11,716
$ 8,708 i
t The accompanying notes are an integral part of these financial statements.
\\
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CONNECTICUT YANKEE ATOMIC POWER COMPANY Statements of Sources of Funds for Gross Property Additions Years Ended December 31, 1979 and 1978 1979 1978 (Thousands of Dollars)
Funds Generated from Operations Net income
$ 5,808
$ 3,066 Principal noncash items -
Depreciation and nuclear fuel amortization 22,490 19,117 Deferred income taxes, net (3,992)
(39)
Reserve for revenues subject to possible refund 3,920 Amortization of deferred charges and other noncash items (116)
(114)
Allowance for funds used during construction (596)
(9)
Total funds f rom operations 27,514 22,021 Less - cash dividends paid on common stock 2,800 2,800 Net funds generated from operations 24,714 19,221 Funds Obtained from Financing Proceeds from issuance of:
Proceeds from issuance of long-term debt 20,000 Repayments of long-term debt (2,704)
(12,778)
Increase (decrease) in short-term debt (2,525) 5,650 Nuclear fuel payable 11,000 Net funds from financing 5,771 12,872 Other Sources (Uses) of Funds Decrease (increase) in net current assets (excluding short-term debt, long-term debt due within one year and nuclear fuel payable):
Cash and special deposits (693) 390 Receivables (5,560) 1,460 Materials and supplies (325)
(204)
Accounts payable 2,886 (1,652)
Accrued taxes 6,437 (2,811)
Other, nel 161 (248)
Net change 2,906 (3,065)
Other, nel 12
]}
Net other sources (uses) of funds 2,918 (2,990)
Total funds for construction from above sources 33,403 29,103 Allowance for funds used during construction 596 9
GROSS PROPERTY ADDITIONS
$33,999
$29,112 Composition of Gross Property Additions:
Utility plant
$ 9,297
$ 2,317 Nuclear fuel 24,702 26,795 Total
$33 999
$29,112 t
The accompanying notes are an integral part of these financial statements.
F-6
CONNECTICUT YANKEE ATor11C POWER Cot!PANY Notes to Financial Statements (1) SUttt!ARY OF SIGNIFICANT ACCOUNTING POLICIES General - The Company owns and operates a single unit nuclear-power electric generating plant. of the pressurized water type, having a gross capability of 600,300 kilowatt-hours. The plant commenced commercial operation on January 1,1968.
The Company's conunon stock is owned by eleven New England electric utilities.
The Company has entered into power contracts with its eleven stockholders (sponsors) for the sale to them of the entire output of the plant for a thirty year period commencing January 1,1968.
Under the terms of the contract each sponsor is rc<iuired to pay the Company an amount equal to its entitlement percentage of the Company's total costs, including a return on net investment.
Regulatory Commissions - The income statement and balance sheet submitted as part of this annual report are in accordance with the Uniform System of Accounts prescribed by the Connecticut Division of Public Utility Control (DPUC) and the Federal Energy Regulatory Commission (FERC).
Allowance for Funds Used During Construction - The allowance for funds used during construction [AFUDC) represents the estimated cost of capital funds used to finance the Company's construction program. The costs of construction are not recognized as part of the rate base for rate-making purposes until brought into service and, as permitted by FERC, the Company charges AFUDC to the construction cost of utility plant. The AFUDC rate applied to construction work in progress (CWIP) for 1979, compounded semi-annually, and 1978 was 8.5 percent.
For a discussion of AFUDC, as applicable to nuclear fuel, see the following section.
Nuclear Fuel - The cost of nuclear fuel is amortized on a unit-of-production method at rates based on estimated kilowatt-hours of energy to be provided.
Commencing January 1, 1979 a provision for estimated spent fuel disposal costs was included in nuclear fuel expense. This includes a provision for prior period spent fuel cost recovery over a period of approximately 10 years, plus a current year provision for fuel assemblies in the reactor, on the basis that federal repository will be available in 1988.
Storage for such a
spent fuel at the Company's plant is sufficient unt.il at least. the s
mid-1990's.
A portion of the Company's nuclear fuel is being financed pursuant to a fuel supply trust agreement, entered into during 1979, under which the trust. owns and finances the nuclear fuel.
The trust obtains funds by the sale of commercial paper and/or through bank loans.
The Company will be obligated to purchase the fuel and reimburse the trust for payments made by the trust and for F-7
financing costs, at the time of withdrawal of the enriched uranium from the Department of Energy.
Interest costs of $342,000 in 1979, incurred in connection with financing this nuclear fuel, were capitalized by the Company.
The weighted average interest rate charged by the trust was 18.9 percent in 1979.
Depreciation - The provision for depreciation is computed using the straight-line, remaining life method at rates which are based on the estimated service lives of the depreciable utility plant in service and estimated removal costs less expected salvage, except for the net cost of removal values for nuclear production plant as stated below. The depreciation rates.for the various classes of property, which are equivalent to a composite rate of 4.2 percent in 1979 and 4.9 percent in 1978, are applied to the depreciable plant in service at. the beginning of the year. At the time depreci-able property is retired from service, the original cost of such property, plus cost of removal less salvage, is charged to the accumulated provision for depreciation.
A preliminary study completed in 1979 indicates that complete removal commencing at the time of retirement of the unit, with an estimated cost of $57.2 million, is the most viable and economic method of decommissioning this unit.
Depreciation rates currently recognized on the books and for regulatory rate setting are those rates allowed in the January 23, 1980 Initial Decision of FERC Docket No. ER 78-360 which are based on a total recovery of $7.8 million of deconunissioning costs.
If rates allowed by FERC had been based on the $57.2 million, rather than the $7.8 million, depreciation expense in 1979 would have increased by approximately
$2.9 million.
Flaintenance - The cost of maintenance, repaira and replacements of minor items is charged to maintenance expense.
Replacements and renewals of items considered to be units of property are charged to the utiaity plant accounts.
(2) RATE t!ATTERS On flay 5,1978 a Supplementary Power Cont ract dated as of flarch 1,1978 between the Company and its eleven sponsor purchaser utilities was filed with FERC. The application, as amended on July 2, 1978 to exclude construction work in progress f rom rate base, raised the overall rate of return from 6 percent to 10 percent.
Since November 5, 1978, $12.2 million in revenues have been collected subject to possible refund. On January 23, 1980, the Presiding Administrative Law Judge issued an initial decision in which he allowed an overall 9.74 percent rate of return, based on an 11.5 percent return on common equity, and reduced other elements of revenue requirements, which would have resulted in a revenue increase of approximately $4.8 million over the fourteen-month period ended December 31, 1979. The Company and several intervenors have appealed from portions of the initial decision to the full commission.
l t
F-8 l
-i f
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l The Company has' recorded a reserve'of $3,920,000'for revenues l
which may have-to be refunded to customerst however, additional i -
refunds may be~ required. The ultimate outcome of this matter l
l cannot be determined at this time.
[
l i
(3)
INCOME TAXES The detail of federal and state income tax provisions'is set forth below:
1979 1978 i-(Thousands of Dollars)
P I
Current income taxes Federal
$ 6,787 995-I i.
State 1,678 321
{
Total current 8,465 1,316.
i I
Deferred income taxes, net Investment tax credits 155 (43)-
1 4
Federal (3,402) 8 State (741) l-
^
j Total deferred (3,988)
(34)
[
j Total income taxes
$ 4,477
$ 1,282
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Such provision (credit) is included in the accompanying statements of income as follows:
[
f Operating expenses
$ 4,485
$ 1,277 i
Other income (8) 5 Total income taxes
$ 4,477
} 1,282 Deferred income taxes are comprised of the tax effects of timing differences as follows-L Investment tax credits 155 (43) h Interest capitalized 117 4
[
Spent nuclear fuel sterage accruals, (2,162)
Provision for revenues subject to possible refund (2,098).
l j
Other 5
Deferred income taxes, net
$(3,988)
.(34) 1 The reasons for the difference between total tax expense and the amount calculated by applying the federal income tax rate to pretax. income are as follows:
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1979 1978 (Thousands of Dollars)
Expected tax at 46% of pretax income i
in 1979 and 48% in 1978
$ 4,732
$2,087 j
Tax effect of dif ferences:
Book depreciation over tax depreciation 91 490 Amortization of gain on_ redemption of bonds deferred in prior years (85)
(71)
Adjustment of prior years accrual (932)
Investment tax credits (775)
(459)
State tax, net of federal benefit 506 167 Other, net 8
Total income taxes
$ 4,477
$.1,282 t
Effective income tax rate 44%
30%
l l
Tax returns through 1976 have been audited by the Internal l
Revenue Cervice. Tax provisions no longer needed subsequent to the examination were reversed in 1978.
t j'
(4) CAPITAL CONTRIBUTIONS The sponsor companies have agreed to make substantial, but I
limited, additional equity investments or loans as additional funds are needed, j
(5) LONG-TERM DEBT i
Details of long-term debt outstanding are as follows:
t 4
1979 1978 r
(Thousands of Dollars)
First mortgage bonds, Series A, 4-1/2% due January 1, 1993
$19,964
$22,293
{
First mortgage bonds, Series B, 9-3/4% due July 1, 1986 13,800 13,800 Pollution control notes:
8.375% notes due 1984 5,000 5,000 6.0% notes due 1997 6,750 7,125
]
Five-year bank loao 20,000 20,000 F
i Unamortized premium 20 24 65,534_
68,242 Less: Amounts due within one year 1,375 375 Reacquired bonds--Series A 2,103 2,219
?
$62,056
$65,648 The First Mortgage Indenture, secured by utility plant, requires deposits of $945,000 semiannually through. July 1, 1992 of cash 4
and/or Series A Bonds into a Sinking Fund. Series B Bonds have annual serial maturities of $1,400,000 July 1, 1981-1985 and a final.
F-10
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~
P maturity of $6,800,000 on July 1, 1986. During the life of the indenture, cash dividends on common stock are limited to retained earnings accumulated after December 31, 1975, the undistributed balance of which amounted to $3,318,000 at-December 31, 1979.
The Pollution Control Notes maturing-in 1984 are to be retired by annual deposits of $1,000,000 to a sinking fund commencing in 1980. The Pollution Control Notes maturing-in 1997 are to be retired by annual deposits of $375,000 to a sinking fund which l
commenced in 1979.
i The five-year term unsecured-loan is with the Connecticut Bank and Trust Company (CBT), Chase Manhattan. Bank, N.A. and Chemical Bank for $5 million, $7.5 million and $7.5 million, respectively.
The interest rate on this loan is 105% of CBT's floating prime rate to 4
August 31, 1980, 106% of CBT's floating prime rate from September 1, t
1980 to and including August 31, 1981 and 107% of CBT's floating l
prime rate from September 1,1981 to the maturity date of August 31, 1983.
Prior to September 1, 1980, these rates may be renegotiated or a sinking fund requirement may be implemented. At December 31, 1979, the interest rate was 16.0 percent.
i (6) Sil0RT-TERM DEBT i
The Company is currently authorized by the SEC to issue, 6
through June 1980, short-term notes in the form of either bank horrowings or commercial paper, in amounts not to exceed $25,000,000 outstanding at any one time.
The Company has available bank credit lines totaling $20,000,000 which require compensating balances. Such requirements are equal to 5% of the line of credit plus 15% of the average borrowings.
The credit lines can be withdrawn at any time for good cause at the option of the banks. The interest rate on any borrowing against the credit line will be at the prime rate.
Additional information with respect to short-term debt is as follows:
i 1979 1978 Weighted average interest rate for borrowings outstanding at end of period 14.0%
10.5%
i Maximum amount of borrowings l
outstanding at any month-end
$24,800,000
$26,925,000 Average daily.borrowings during period jl7,751,000
$16,925,000 Weighted average interest rate during the period
_11. 3% '
8.0%'
9 F-Il
(7) PENSION PLAN The Company has a noncontributory retirement plan which covers substantially all employees. The Company's policy is to annually fund an actuarially determined contribution, which includes that year's normal cost and the amortization of prior service costs over twenty years. Total pension cost amounted to $223,300 and $214,500 for 1979 and 1978, respectively. At December 31, 1979, the pension fund assets exceeded the actuarially computed value of vested benefits. The unfunded actuarial liability of the plan was approxi-mately $391,000 at December 31, 1979.
(8) SUPPLEMENTAL INFORMATION TO STATEMENTS OF INCOME 1979 1978 (Thousands of Dollars)
Taxes, other than income taxes, charged to operating expenses:
Real and personal property
$1,440
$1,366 Payroll and other 187 136
$1,627
$1,502 (9)~ COMMITMENTS AND CONTINGENCIES The Company currently forecasts nuclear fuel expenditures to be approximately $10,864,000 in 1980 and $150,901,000 for the years 1981-1985, and construction expenditures to be approximately $32,733,000 in 1980 and $63,275,000 for the years 1981-1985.
It is expected that compliance with present and developing regulations established by various authorities in the areas of nuclear plant licensing and safety, land use, water and air quality, and other environmental matters will require additional capital expenditures and increased operating costs which are not now determinable in amount.
Additional expenditures may be required as a result of the NRC's analysis of the Three Mile Island accident.
In addition, uncertainties related to the reprocessing or permanent storage of nuclear fuel may require revisions in future nuclear fuel costs.
F-12
j (10) QUARTERLY FINANCIAL DATA (UNAUDITED)(
Summarized quarterly financial data is as follows-Quarter Ended March 31 June 30 September 30 December 31 4
(Thousands of Dollars) t l
l 1979 r
Operating revenue
$12 878
$17,400
$15,312
$17 030 l
1 1
Operating income
_$ 1,599
$_4_,829 S-2,50]
$ 4,392 l
Net income
$ _(109)
$_3_,167
$_. 64_3
$_2,107 Earnings per common share
$(0.31)
$9.05
$1.83
$6.03 t
i Quarter Ended j
March 31 June 30 Septemher 30 December 31_
(Thousands of Dollars)
I i
1978 l
Operating revenue
$10,4_06
$10 816_
$9_,612
$9,93_6 1
e i
Operating ineome
$_1,665
$ 2_,334
$2,028
$2,64_7 Net income
$ _ 4_03
$_1,055
_$ _64_7
$_ 961 f
I Earnings per common share
$1 15
$3. 01
$1.85
$2.7,5 (a) Fluctuations between quarters within a year and as compared 1
to the previous year are primarily due to estimates used in the billing process which are corrected in each subsequent J
month.
In addition, operating revenues fluctuate due to.the I
I performance of the nuclear unit.
1 l
(11) IMPACT OF CilANGING PRICES (UNAUDITED) f The following supplementary information was prepared on the f
basis prescribed by the Financial Accounting Standards Board in l
Statement of Financial Accounting Standards No. 33, " Financial Reporting and Changing Prices", for the purpose of providing certain~
+
informat. ion-about the effects of changing prices.
It should be viewed as an estimate of the approximate effect of inflation, rather.than as a precise measure.
Specifically, fixed assets, nuclear fuel and related depreciation-and amortization expense appearing in the primary, historical' cost financial statements have
- been restated for the effects of general inflation utilizing the constant dollar method. Restatement of other items would not materially affect t he restated amount of operating income.
l F-13
. ~_-
t i
i Statement of Income Adjusted For Changing Prices F
j For the Year Ended December 31, 1979 Conventional Constant Dollar Historical Average Cost 1979 Dollars (Thousands of Dollars) i Operating revenues
$62,620
$ 62,620 Depreciation and nuclear fuel amo-t ization 22,490 25,386 Other operation and maintenanc-senses 20,691 20,691 Federal and state income taxes 4,485 4,485 Interest expense 7,511 7,511 Taxes other than income taxes 1,627 1,627 Other income (expenses)
(8)
(8)
Net income (loss) (excluding reduction of net recoverable cost)
$ 5,808
$ 2,912 (a)
Reduction to net recoverable cost
$(14,282)
Gain from decline in purchasing power of net amounts owed 11,204 Net
$ (3,078)
(a)
Including the reduction to net recoverable coe.t, the net loss on a constant dollar basis would have been $11,370,000 for 1979.
Five-Year Comparison of Selected Supplementary Financial Data i
Adjusted for Effects of Changing Prices Years Ended December 31, 1979 1978 1977 1976 1975 (In Thousands of Average 1979 Dollars except per share amounts)
Operating revenues
$62,620
$45,339
$45,724
$46,357
$55,007_.i Historical cost information l
adjusted for general inflation:
Net income (loss) (excluding reduction to net recoverable cost)
$ 2,912 3
Income per common share (exclud-ing reduction to net recover-able cost)
$ 8.32 s
i Net assets at year-end at net recoverable cost
$46,957
. General Information:
Gain from decline in purchasing
~ $11,204 power of net amounts owed Cash dividends declared per common share
$7.93
$8.84
$10.69
$9.94
$11.50 Average consumer price index 217.3 195.4 181.5 170.5 161.2 4
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Constant dollar amounts represent historical costs stated in terms of dollars of equal purchasing power, as measured by the average level of the Consumer Price Index for all Urban Concamers (CPI-U) during the year. With the exception of CWIP, which has been escalated by AFUDC during the construction period, the data for plant was determined by applying the applicable CPI-U to the historical cost of.each plant function for which an average age was determined.
Constant dollar restatement corrects distortions caused by recording transactions in dollars of varying purchasing power. The restated amounts do not purport to be appraised value, replacement cost, current value, or the individual prices of particular goods and services in the current market; nor are they indicative of the Company's future capital requirements.
The current year's depreciation expense was determined by applying the Company's depreciation rates to indexed plant amounts.
Accumulated depreciation was estimated for each major plant function by multiplying the respective cost data by a percentage representing the expired life of existing facilities of each function at December 31, 1979. Amortization of nuclear fuel was computed based on the Company's present refueling cycle.
As prescribed in Statement of Financial Accounting Standards No. 33, income taxes were not adjusted.
Under the rate-making process prescribed by the regulatory commissions to which the Company is subject, only the historical cost of plant is recoverable in revenues as depreciation.
There fore, the excess of the cost of plant stated in terms of constant dollars that exceeds the historical cost of plant is not presently recoverable in rates as depreciation, and is reflected as a reduction to net recoverable cost.
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 t.. 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.
(12) REPLACEMENT COST OF PRODUCTIVE FACILITIES (UNAUDITED)
The Company was organized to provide electric power to the eleven New England electric utilities which are its stockholders.
Since the Company was organized as a one-time project and the plant will not be replaced at the completion of its service life, replacement cost data is not relevant and has not been provided.
F-15
l I
Report of Independent Public Accountants
+
i oon Schedules h
in connection with our examination of the financial statements of Connecticut Yankee. Atomic Power Company, we have also examined the supporting schedules listed in the accompanying index.
In our opinion, these schedules as of December 31, 1979, and for the year then ended, present fairly, when read in conjunction.with the 'related financial statements, the financial data required to be set forth therein, in conformity with generally accepted accounting principles applied on a basis consistent.with that of the preceding year.
i ART!IUR ANDERSEN & CO.
I Ilartford, Connecticut, March 21, 1980 I
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CONNECTICUT YANKEE ATOMIC POWER COMPANY a.
U__TILITY PLANT (INCLLDING INTANGIBLES AND EXCLL' DING NUCLEAR FUEL) f' YEARS ENDED DECEMBER 31_, 1979 and 1978 (Thousands of Dollars)
COL. A COL. B COL. C COL. D COL. E COL. F Balance at Other changes -
Balance at beginning Additions Add (Deduct) -
close of Classification of period at cost Retirements Describe period UTILITY PLANT - 1979 Intangible Plant:
Organization S
42 42 Franchise and Consents 4
4 46 46 4
Electric Plant in Service:
Land and Land Rights 570 570
- Structures and Improvements 24,373 1,063 49 182 (2) 25,569 Utility plant equipment 99,464 912 12 (182)(2)
_100 1R2 1
124,407 1,975 6l
,126 321 t
Construction Work in Progress
___1,762 7,322 (1) 9,084 S126,215
$ 9.297 61 S -
$135_,451 Y
UTILITY PLANT - 1978 u
Intangible Plant:
Organization 42 42 Franchise and Consents 4
4 46 46 I
Electric Plant in Service:
Land and Land Rights 570 570 Structures and Improvements 23,997 376 24,373 Utility plant equipment 95,716 3,898 150 99,464
_120 283 4,274 150 124,407 2
Construction Work in Progress 3,719 (1,957)(1)
I 762 t
$124,048 S 2,317 5 150
$12o,215 Notes:
(1) Net increase (decrease) during the year.
(2) Transfer between accounts.
4
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r
CMyECTICl T YAREE_ATO' TIC K4T.R COMPANT SUCLEAR FLEL YEAR ENDED DECEMPER 31, 1979 (Thousands of Dollars)
COL. A COL. B COL. C COL. D COL. E COL, F Balance at Other changes -
Balance at beginning Additions Add (Deduct) -
close of Classification of period at cost Retirements Describe period Nuclear f uel in process of refinement, conversion, enrichment and fabrication $
148
$13,570 (73) (1)
$24,931 11,286 (5)
Nuclear fuel materials and assemblies:
In stock account 36,255 11,;32 73 (1) 17,054 (20,514) (2)
(11,286) (5) 1,394 (4)
Nuclear fuel assemblics in reactor 44,109 20,514 (2) 53,796 (9.433) (3)
(1,394) (4)
Spent nuclear fuel 41,894 9,433 (3) 51,327 m
4 Accumulated provision for amortization of nuclear fuel assemblies (74,155)
(17,809) (6)
(91,570) 394 (7)
Total
$48,251
$24,702 3(17,415)
$55,,538 Notes:
(1) Transfer f rom Nuclear Fuel In Process accou.it to In Stock account.
(2) Transfer from In Stock account to in Reactor account.
(3) Transfer f rom In Reactor account to Spent Nuclear Fuel account.
(4) Transfer from la Reactor account to In Stock account.
(5) Transfer from In Stock account to Nuclear Fuel in Process account.
(6) Amortization of nuclear fuel assemblies during the year charged to expense.
(7) End of cycle adjustment.
X=-
CL 5
CONNECTICUT YANKEE ATOMIC poker COMPANY NUCLEAR FUEL T
n.
YEAR ENDED DECEMBf.R 31, 1978 h*
(Thousands of Dollars)
COL. A COL. B COL. C COL. D COL. E COL. F Balance at Other changes -
Balance at beginning Additions Add (Deduct) -
close of Classification of period at cost Retirements Describe period Nuclear fuel in process of refinement, conversion, enrichment and fabrication $ 8,914
$26,790 S-S(35,556) (1) 148 Nuclear fuel materials and assemblies:
In stock account 694 5
35,556 (1) 36,255
- tnj, Nuclear fuel assemblies in reactor 44,109 44,109 Spent nuclear fuel 41,894 41,894 Accumulated provision for amortization of nuclear fuel assemblies (61,130)
(13,025)
(74,155)
Total
$34 481
$26,795
(_ -
$(13,025)
$48,_251 1
Note:
(1) Transfer from Nuclear Fuel in Process Account to In Stock Account.
9 y
CONNECTICUT VAGEE ATOMle F0kT.R COMPANT ACCUMUI.ATED PROVISION 10R DEPRLCI ATION OF UTILITY PLANT TEARS EhDED LECEMEER 31,_1_979 AND 1978 (Thousands of Dollars)
COL. A CO'. B COL. C COL. D COL. E COL F L
Additions Balance at charged to Other changes -
Balance at beginning costs and Add (Deduct) -
close of Description of period expenses Retirements Describe period
. Accumulated Depreciation of Utility Plant - 1979:
Production Plant
$41,354
$4,958 16
$46,296 Transmission Plant 1,017 109 28 1,098 General Plant 44 8
17 35 Total
$42,415
$5,075 61 S-
$47.429 Accumulated Depreciation of Utility Plant - 1978:
Production Plant
$35,575
$5,974
$ 195
$41,354 Transmission Plant 908 109 1,017 General' Plant 34 9
O) 44 -
Total
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$6,092
$ 194
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