ML19309F045
| ML19309F045 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse  |
| Issue date: | 04/18/1980 |
| From: | Crouse R, Ertle R TOLEDO EDISON CO. |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML17054D227 | List: |
| References | |
| 610, NUDOCS 8004280380 | |
| Download: ML19309F045 (6) | |
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Docket No. 50-346 TOLEDO April 18, 1980 ll[3lll()PJ Serial No. 610 United States Nuclear Regulatory Commission Attn:
Mr. Jerome Saltzman, Chief Antitrust & Indemnity Group Nuclear Reactor Regulation Washington, D.C.
20555 Gentlemen:
Re: Davis-Besse No. 1 Retrospective Premium Guarantee The Toledo Edison Company hereby provides the documents described below and enclosed herewith as evidence of its guarantee of its share (S4,862,000) of the retrospective premium which may be levied against the Davis-Besse Unit No. 1 reactor licensees during the period April 23, 1980, thru April 22, 1981.
1.
The Toledo Edison Company 1979 Annual Report to shareowners which in-cludes certified financial statements for the calendar year 1979.
2.
The Toledo Edison Company 1979 Fourth Quarter Quarterly Report, which includes financial statements for the quarter ending December 31, 1979 (the 1980 First Quarter Quarterly Report is not yet' available.)
3.
A schedule of 1979 Actual Internal Cash Flow and 1980 Internal Cash Flow Proj ection.
Based on the data set forth above, The Toledo Edison Company believes that a cash flow can be generated which would be adequate should it be required to pay any retrospective premium in the amount of $4,862,000.
Also enclosed is The Cleveland Electric Illuminating Company's Estimate of Cash Position and Source of Funds Actual 1979 and Projected 1980. This statement shows that The Cleveland Electric Illuminating Company believes that a cash flow can be generated which would be adequate should it be required to pay any retrospective premium in the amount of $5,138,000.
Thus, the Cash Flow Statements of the Toledo Edison Company and The Cleve-land Electric Illuminating Company enclosed herein demonstrate the ability to pay a combined retrospective premium of $10,000,000 for Davis-Besse Nuclear Power Station Unit No. 1.
8 !f w RIichard P. Crouse Robert F. Ertle gg)j[
Vice President - Nuclear Assistant Treasurer
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Enclosures THE TOLECO ED!SCN COMPANY EDISCN PLAZA 300 MADISCN AVENUE TOLEDO. OHIO 43S52 8004280 380
THE TOLEDO EDISON COMPANY 1980 INTERNAL CASH FLOW PROJECTION FOR DAVIS-BESSE NUCLEAR POWER STATION (Dollars in Thousands)
Actual Projected 1979 1980 Net Income after Taxes (l)
$ 58,595 Less Dividends Declared 52,399 Retained Earnings (l)
$ 6,196 Adj ustments :
Depreciation and Amortization
$ 33,206
$ 42,900 Deferred Income Taxes and Invest-ment Tax Credits 14,426 5,600 Allowance for Funds used During Construction (33,503)
(40,400)
Total Adjustments
$ 14,129
$ 8,100 Internal Cash Flow S 20,325 S 17,300 Average Quarterly Cash Flow
$ 5,081
$ 4,325 Bank Lines-of Credit reserved for commitment 537 Average Quarterly Cash Available S 4,862 Percentage Ownership in:
Davis-Lesse Nuclear Power Station Unit No. 1 48.62%
Maximum Tctal Contingent Liability
$ 4,862 (1)The Company does not publish its projections of net income after taxes and dividends paid. Thus, the Company has elected to show no estimate of Retained Earnings for 1980 since it can demonstrate that it is able to generate sufficient cash flow from net non-cash expenses and other sources to cover its maximum total contingent liability.
CERTIFICATION I, Donald H. Saunders, Treasurer of The Toledo Edison Company, hereby certify that the foregoing Estimate of Cash Position and Source of Funds for calendar year 1980 is derived from accurate data and reason-able assumptions and is a reasonable estimate.
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April 18, 1980 Date Donald H. Saunders
Results of Operations T housands of outiars TOLEDO imelve Months Ended December 31, Fourth Quaster 1979 1978 1979 1978 overatmo evenues 358 707 334 083 n
Quarterly Report 88 085 81 742 Electric 3 583 3 085 i046 840 Gas 2 831 2 888 December 31,1979 873 Steam heating 855 365 121 340 056 89 986_
83 455 Total operating revenues Operatung Expenses 93 295 82 039 24 612 20 673 Fuel used in power plants 53 574 55 850 Purcleased & interchanged power-net 44 691 38 883 19 623 14 888 11 174 10III Operation 21 137 19 604 5 919 4 820 Main:enance 29 117 26 532 6 254 6 553 Depreciation provisions 29 760 24 320 7 040 3 897 State and local taxes 25 139 27 397 1 750 6 484 Federal income taxes 296 713 274 625 67 432 Total operating expenses 76 372_
oge,a,,ng,ncome irom s.zes to Customers 68 408 65 43i is et.
ie 023 Highlights 23 512 17 470 Other income Allowance f or equity f unds used during construction 8251 6 484 Period Ended December 31.
1979 1978 Cliante 6 955 4 251 Income tax credits applicable to nonoperating stems 1 017 720 2 080 1 408 395 828 Other income & deductions-net 32 780_
24 674 Common Share 9 430 6 487 Total other income 12 Months
$2.65
$2.78
- 13 C 101 188 90 105 Fourth Quarter
.45
.60
- 15 5 23 044 22 510 income Before interest Charges Interest Charges 48 315 41 094 12 Months
$2.20
$2.14 t 6C 13 787 11 250 Long-term debt 4 269 1 652 Divodends Declared fourth Quarter
.55
.55 376 271 Short-term borrowings Allowance for borrowed funds (9 991)
(7 090)
(2 955)
(1 725) used dunng construction 42 SN 35 656 Syllem Sales-Fcurth Quarter 1867 1913
- 2%
11 208 9 796 Interest charges-net 58 595 54 449 Residentral
,466 460
+ 19.
11 836 12 714 Net income 13 894 13 020 tuanons nwit) 3 827 3 255 Preferred stoc A dividends accrued 85 9
- "98 "
dsr 16 848 431 14 900 405 Sy tem Peak Load 17 891 583 15 714 852 Average Number or Shares Outstandmg
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_ $2.65
_ _ $218_
1300
-S Earmngs Per Average Common Share cum iio G
1014.
U.3%
on th uaster eturn n Average Cornenon Quny 1 Mo hs 67%
67 %
The 1979 figures are stated on an intenm basis and are subject to audit and adgustment.
Fourth ouarter 71%
72%
Balance Sheet Dividends Paid in 1979 Tnousands of Doiia,.
December 31, 1979 1978 Quartsrly common stock dividends of 5 55 per share Assets wsre paid in January Apnt, July and October of 1979 Property. Plant & Equipment in service 979 809 950 873 for an annual total of $2.20 per share. The Company Less accumulated pro-estimates that a portion of the common cividend vis on for deo;eciation 201 895 176 450 payments will be considered a return of capital for 777 914 774 423 Federalincome tax purposes Thisestimate.asshown Construction work in on the enclosed Form 1099-DIV as explained in the 565 183 353 878 progress letter accompanying this report. is subject to final Nuclear fuel ~ net 11 786 15 875 determination by the Internal Revenue Service.
Current Assets 86 792 82 473 Preferred stock dividends (none to be considered a investments and Other 25 837 24 298 return of capital for Federal income tax purposes)
Total Assets 1 467 512 1 255 947 were paid on the first business day of March. June.
Septerrber and Decemt:er The total payments per a M es sharon 1979 on each senes of preferred stock were.
Capitanzation
$100 Par Common stock equity 432 554 382 084 4%% t enes $4 25 7.76% Senes S 7.76 Cumulative preferred stock 184 000 159 500 4 56% Series $4 56 7 80% Senes S 7 80 Long-term debt 611 137 560 64a 4 25% Series $4 25 t100% Senes $11.00 1 227 691 1 102 228 8 32% Senes $8 32 10 00% Senes $10 00 Short-Term Notes Payable 23 500 Los;J-Term Debt Due A 9%% senes was issued dunng 1979 which paid a W' thin One Year 41 912 8 022 dividend only for a penod after its issue date Other Current Liabihtees 113 048 98 639 which totaled $2 79 per share Accumulated Provisions for Deferred Taxes, etc.
61 361 47 058
$25 br 8 84% Senes $2 21 Total Uabilities 1 467 512 1 255 94_7
$2 365 Senes $2.365 A standard forecast form showing our latest five year projection of capital requirements. sales, load data M
and certain other financial projections will be avail-
. Toledo Edison employees serve able upon request to our Vice President. Finance.
, f more than 250.000 electric customers in a 2.500 square-mile
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states and several foreign lands.
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exceeded our original, probably overly While costs were rising, sales were rotsoo EDISON optimistic projections, this cost is now falling in the fourth quarter. The considerably less than the projected $850 conibination of unusually mild weather in roisoN PL AZA million cost for an 800 MW plant that is our area, conservation efforts by our 3ou MADISON AVENUE due 10 go into service in Ohio next year.
customers, and the worsening economic TO W30 0"'O * "
Also, the companson between our Davis-climate reduced current growth in sales Besse unit and our new coal-fired plant (with the latest pollution control and revenues below our projections. Our Company economists have iridicated that equipment) continues to be very while the Toledo area tends to be one of favorable, from both a cost and rehability perspective. As the cost of coal continues the first in the nation to feel the impact of i
to rise, nuclear fuel retains its cost recessions, out area also tends to recover y
_l advantages and our nuclear plant gives more quickly. Much manufacturing in this W'
our customers and investors a much area is related to the automotive industry, but we have been t.ble to experience more inflation-resistant energy source economic stability through good Complementing our nuclear program, g uHur I.
H rehn ng, gl ss, insulabon,
$b; our coal-fired Bay Shore Station nd other diverse manufacturing
- hg performed well again this past year. (For cUvn s s.
A many years it has been rated as one of John P W amson the most efficient and reliable plants in The increase in operating expenses the country.) We are confident that, in the during the quarter Was due to a long run, a combination of nuclear and combination of fuel costs being up 19 per coal generation, along with aggressive cent, purchased power up 32 per cent conservation efforts, will contnbute and state and local taxes up a massive 81 greatly to restraining the rising cost of per cent. The result of these and other A combination of transitional factors.
producing electricity for our customers f actors was a 7 per cent decrease in net some good and some bad, affected our and to the benefit of our investors.
income. Earnings per share of 45 cents compares to 60 cents in the fourth 1979 earnings performance. These in addition to the factors mentioned quarter of last year. However, the included a combination of unusually mild above, our higher costs in 1979 were unusually high fuel costs experienced in summer and winter weather, an early start attributable to rising operating expenses December will be reflected through fuel of the industrial recession in our area, and interest rates. A portion of our recovery revenues in January of 1980.
and lower than expected availability of expenses is recovered through the fuel our Davis-Besse Nuclear Power Station.
adjustment clause but we still nc as f
8m on was in addition, desirable conservation efforts experienced a rise in operating expenses Y
g,g by our customers slowed normal sales of 8 per cent in 1979. The issuance of first with the Public Utilities Commission of growth. Following the Three Mile Island mortgage bonds in October,1978 and in Ohio. The Commission's staff audit has nuclear incident the Davis-Besse nuclear October,1979 primarily accounted for a been completed and hearings are nearing plant was out of operation for some 19 per cent increase in net interest completion. A ruling on the case is extended and frequent periods during the charges in 1979. The higher interest rates expected in early 1980. In another ruling year. Part of this was a matter of caution in the 1979 sh th m our operatmg policy and part due to larger borrowm, ort 'erm money market and gs contributed to an u e e Co d
nb M9a the need to adapt to changes in designs increase of p:most threefold in our short-2.45% reduction in the non-fuel portion of and procedures required by the Nuclear term intemst charges over 1978.
O Regulatory Commission.
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e se an ther a ion in the broader perspective, however, A inough earnings on common stock the PUCO authorized continued use by rose by 8 per cent in 1979, the increase in the cost and performance of Davis-Besse the average number of shares our Company of the unit-of-production still looks favorable. While the $675 million cost of the 900 Megawatt plant far outstanding reduced the earnings per depreciation method for the Davis-Besse share from $2.78 to $2.65.
station. This innovative method for the utility industry closely matches our
nuclear operation. Richard P. Crouse, has depreciation expenses with the energy been designated as vice president, actually produced by our nuclear plr "
nuclear. He is responsible for all areas Simply put,in periods when the plant relating to our nuclear generating does not operate we do not record activities including the Davis-Besse depreciation expense. Of course, when Nuclear Power Station, our related quality the plant is fully luaded we record larger assurance programs, and our nuclear amounts of depreciation expense to services, engineering and construction match the income from the entsrgy sales.
activities. Mr. Crouse was also elected to The PUCO cited the leveling effect on your Company's Board of Directors in expenses when the unit is off line and recognition of the importance of his new concluded that the resulting earning area to our Company.
stability was in the best interests of both Lowell E. Roe has been redesignated as t'
your Company and its customers.
vice president, energy supply. Mr. Roe Mrs. Isabel Martin was elected to our has been responsible for major it Board of Directors in November. Mrs.
construction projects for several years.
p Martin has been one of our area's He will now be responsible for the outstanding civic leaders for more than operation and maintenance of our coal twenty years. She currently is the plants and our major transmission and consultant in charge of the metropolitan substation systems along with related '
division of the local United Way environmental matters. Mr. Roe has been organization. Mrs. Martin brings to her a member of the Board since 1975.
v new position a combination of a great The regular 55c quarterly dividend on' a
depth of understanding for the problems common stock was declared payable of people who need help along with an January 28,1980 to shareholders of appreciation of the need for business to record January 7,1980. Regular preferred
$c operate profitably. As an officer and board member of many organizations she stock dividends will be paid March 1, ic has acquired administrative skills and 1980 to shareholders of reccrd February 15,1980. A statement showing the insights mto human needs which are.
amount of dividends paid to you during
'N particularly valuabie to your Company in 1979 is enclosed along with a letter today s business ch, mate.
describing the extent to which your Two vice presidents of your Company common stock dividends are currently 3
were given realigned responsibilities to taxable.
ti further consolidate and strengthen our d:
costs, fuel sources (i.e., coal or 3c The chief executive officers of the nuclear), and the regulatory climate.
'8 Central Area Power Coordinating We anticipate serious discussion of Group are reassessing the current the consequences of continuing with m
joint construction program. Several the construction program as factors have been the subject of previously scheduled, especially in
,e studies which may affect planning for view of the uncertainties of the additional generating capacity, political and regulatory climate.
sa Among these are projected load growth, construction costs, financing I
TI IE TOLEDO EDISON CO.\\llA 'Y s.
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Ai i UAL REPOR 1979 l
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l Wendell A. Johnson John P. Williamson i
President Chairman G Chief Executive Officer On the Cover Redevelopment of Toledo's riverfront began with refurbishing of our Water Street station, a fine turn-of-the-century masonry structure. and construction of our Edison Plaza, captured here reflect-ing a sunrise across the Maumee River.
1980 will see major new structures rising along the river. with the 100 million dollar Owens-lllinois World Headquarters and Toledo Trust's new office building already above ground.
The finishing touch will come with completion of the City's twelve million dollar Promenade Park, spanning six blocks of downtown riverfront.
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To Our Shareowners:
for Northwestern Ohio. Along with other utilities in our power pool, the Central Area Power Co-ordination Group (CAPCO), we have shared throughout the Seventies in the construction and ownership of large generating units, both coal and The end of one decade and the beginning of the nuclear. Itis widely accepted that these will be the next is not unlike reaching the crest of a hill. It gives most-and possibly the only-viable sources of us a point of perspective, and it seems like a good electricity during the coming years.
place to pause briefly and look around-backwards down the slope we've been climbing for ten years A signal accomplishment was completion of the and ahead toward the terrain we have to cover dur.
Davis-Besse Nuclear Power Station, in spite of ing the next ten.
inflation and the uncertain, ever-shifting, and often sharply conflicting rules of the game imposed by Nobody needs to be told that the road through regulatory bodies. All nuclear plants constructed in that same time frame were confronted by similar the Seventies was difficult and full of surprises, especially for those of us in the energy field. The bstacles, and yet Davis-Besse was completed in 79 months-a shorter time than any of the other long period of headlong and profligate use of our P ants built during the same time period. Nuclear l
resources came to an end, most abruptly it seemed.
The inexorable pressures of inflation disrupted our Power plants now average about 120 months con-lives and our plans time and again. The constric, struction time. The final cost was greater than we tion of government regulation grew ever tighter could have anticipated at the outset, of course, but and management seemed to be losing many of its it was much lower than the cost of nuclear plants traditional prerogatives. As a nation we rediscov.
Presently going on stream. Moreover, the corn-ered the Middle East-to our dismay.
bmed mvestment and operating costs of Davis-Besse are still 25 per cent less than those of a com-parable new CAPCO coal-fired plant equipped with And yetin the face of all this,your Company made required environmental controls.
significant gains. Let us cite a few. Total annual operating revenues by the end of the decade were After going on line in 1977, the Davis-Besse plant four times greater than they were in 1969. Despite performed reliably during difficult periods when, the severe upward pressure of inflation on operat-due to strikes or severe weather, coal either was ing expenses, the significant item of operating in-not moving or arrived at power plants frozen solid come from customers increased more than three in the rail cars. Although subjected to an unduly and one half times.The gain in earnings on com-long embargo on its operation imposed by the Nu-mon stock was nearly that high also, and earnings clear Regulatory Commission following the ac-per share improved-even though more than three cident at Three Mile Island, Davis-Besse operated times as many shares were outstanding at the close reliably during this past summer, saving our cus-of the Seventies. For our common shareowners, tomers substantial amounts in fuel charges. Based the bottom line was a 35 per cent increase in de-on the lessons learned from Three Mile Island, we clared annual dividend payments as we were able made extensive studies of our operation and estab-to continue a pattern of increasing dividends nearly lished additional safeguards both in technology every year since 1960.
and personnel training. In addition, the Nuclear Regulatory Commission mandated stringent and Our central concern throughout the Seventies sensitive automatic controls which caused several was the pressing need for construction, and the trip-offs during the Fall and reduced the plant's financing required to pay for it during a decade of reliability record. We are overcoming these handi-mounting infiation and increasing interest rates.
caps, however, and expect growing reliability as Our construction expenditures totalled well over a we go into the Eighties.
billion dollars during the ten years. By the end of the decade, however, Toledo Edison had sufficient A vital Company strength during the past decade, owned generating capacity to be virtually inde-and one which has done much to mitigate the prob-pendent of the need for outside power purchases, lems of inflation, has been our ability to obtain and that expense item, which was so burdensome timely rate increases. In the decade of the Seven-during much of the period, was reduced substan.
ties, Toledo Edison was granted four major retail l
tially. In the first year of the new decade, comple-rate increases, three of which included interim tion of another coal-fired generating unit in which increases in advance of the final order. The cumu-we have an ownership share is expected to give us lative effect of these, together with completion of l
a generating reserve of about 20 per cent.
Davis-Besse and another major CAPCO generat-l ing unit, resulted in increased cash flow and much-The construction program of the Seventies also improved interest coverage ratios by the end of the has added to our strength in another area: the mix decade. This forms an excellent base for profit-of the fuels we depend upon to provide electricity ability in the Eighties.
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Finally, the establishment for your Company of have reduced by one third the projections of energy a more flexible, responsive and participative man-usage growth during the Eighties. Very soon we agement organization during the early Seventies willjoin in an even more extensive effort called the has proved to be of immense value to us. A man-Residential Conservation Services Program. Home agement team structured by objectives, coupled energy audits, followed by analyses and recom-with systematiclong-range planning, enabled us to mendations, will be offered to every householder.
move Toledo Edison more smoothly through the Strong financing and credit incentives will be in-extreme challenges of the decade. Some indication volved. We can see two major benefits to the pro-of the results are provided by the yardsticks of gram: it will help us to delay construction of in-utility management performance during the past creasingly expensive generating units, and it five years compiled by Forbes Magazine early in should contribute heavily to good customer rela-1980. Among the 24 Midwest utilities rated, Toledo tions in these days of rising energy charges.
Edison ranked second in growth of average dollar sales, sixth in profitability, and tenth in return on As we've said many times in our reports to you capital.
over recent years, we are entering a New Energy Era which is marked by diminishing supplies of Toledo Edison is entering the Eightles with sub-traditional sources and the emergence of new stantially improved earnings quality, and with the energy technologies that can supply the world's prospect of growing revenues coupled with re-energy bountifully in the generations to come.
duced level of construction commitments.
"This transition requires time for planning and We are forecasting increases in electricity sales of development on the scale of half a century," the about three to four per cent annually, and we have NAS report concludes. "The question is whether applied for a further rate increase to be effective we are diligent, clever, and lucky enough to make early in 1980. These additional revenues, com-this transition an orderly and smooth one."
bined with reduction of expensive power purchases from outside sources, can be expected to continue At Toledo Edison, we believe that Americans can our cash flow improvement.
do it.
Cordially, As described in more detail elsewhere in this re-port, our CAPCO power pool has recently an-s
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w'w nounced a substantial reduction in construction planned for the decade ahead, and this will pro-vide relief from the high construction and financ-ing expense of recent years.
John P. Williamson Our conviction that coal and nuclear energy will
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continue as our best options in the electric in-dustry is reflected in plans which call for a balanced dependence on each of those fuels by the mid-Eighties and beyond. This conviction is wholly sup-ported by the results of a landmark study announc-ed by the National Academy of Sciences (NAS) in January,1980. Termed one of the most exhaustive Wendell A. Johnson energy studies ever undertaken,,t concludes that i
for the next 30 years coal and nuclear will provide
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this country's only realistic alternatives in elec+ricity generation. Further, it predicts that by the end of the Eighties coal will have become so valuable as a l
source for synthetic fuels that nuclear power will I
have to assume a constantly increasing proportion of the load. The trend will be hastened, the study says, by the marked environmental and safety advantages of nuclear.
The NAS report gives top priority to conservation of all forms of energy in order to quickly counter the oil shortages expected during the Eighties. The electric industry, with its National Energy Watch conservation program, already has accomplished a great dealin reducing household consumption of energy. That and other conservation programs 2
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Highlights 1979 1978 Earnings per Common Share
$2.65
$2.78 Dividends Declared per Common Share
$2.20
$2.14 Operating Revenues (millions)
$ 365
$340 Operating income (millions)
$ 68
$ 65 System Energy Sales (million kwh) 7709 7685 System Peak Load (megawatts) 1395 1386 3
Management's Discussion and Analysis of Financial Results
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1979 Revenues increase Toledo Edison's 1979 revenues were more than seven per cent higher than in the preceding year,
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due primarily to an increase in rates approved by the Public Utilities Commission of Ohio (PUCO)
Storm domane p!ased its usual role in Line Ikpartment in mid-1978, and to the recovery of a substantial actisity. Journeyman Lineman Keith Afuntz strains a part of the higher fuel expenses encountered residential servico drop af ter a itindstorm in our Southern during the inflationary year 1979. In a later ruling, District sabuses. Two line crests fluiver rights ivorls in.
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+he PUCO responded to a court decision by order-
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ing i 2.45% reduction in the non-fuel portion of a siolent svindstorm racked the Southern Afichigan our c,tstomers' bills pending a decision on our arca in April.
subsequent application for a further rate increase, amour ting to $38 million on an ar.nual basis. The continued upwards. Fortunately much of this PUCO tearings on this latest case were completed expnse was recovered through the fuel cost ad-l in mid-January. Final action by the Commission justment provisions in our rates. A second factor is expected in early 1980. Kilowatt-hour sales in-was the greater amount of fuel used after the two creased less than one per cent during the year, new units began operation. As they are providing i
mainly resulting from the economic slowdown, an a greater and greater portion of our generation exceptionally mild summer air-conditioning sea-needs, our dependence on expensive power pur-son, and perhaps, the energy conservation efforts chased from outside sources has been reduced.
of our customers. We feel this low increase was due This is evident in the decrease in total purchased to a combination of possibly non-recurring factors and interchanged power. As the new units com-l and therefore are forecasting that annual growth plete their initial operating periods and we pro-will be in the three to four per cent range through duce nearly all of our needs with Company-owned i
the Eighties.
capacity, these reductions in purchased power art expected to be even greater.
Operating Expenses Climb; Operating income in the operation and maintenance expense cate-Rises gories, the effect of the new units' operation is In considering the various items of operating seen, also. Inflation was an important factor, but expense, it's important to review briefly our activ-the addition of major facilities produced further ities with the four other utilities which comprise increases in both operation and maintenance.
the Central Area Power Coordination Group Operation of our nuclear plant was interrupted for (CAPCO). Formed to take advantage of the econ-an extended period of time by order of the Nuclear omies of scale achievable with large generating Regulatory Commission following the Three-Mile units, CAPCO is a power pool in which members Island Nuclear Plant accident in late March. During share in the construction and output of such facil-that time we made extensive changes in opera-ities.The operation of two major CAPCO units-tional and personnel training procedures, but one coal-fired, the Bruce Mansfield Unit No. 2.
throughout the balance of the year periodic shut-and the other, our Davis-Besse Nuclear Power downs occurred to accommodate further changes i
Station-had a profound effect upon our 1979 ordered by NRC. In general the changes narrowed financial results, and one that we feel will be very the parameters within which the plant must oper-beneficial,long-range. We own 20 per cent of the ate, and also resulted in more complex and sensi-coal-fired unit, and almost half of the Davis-Besse tive safeguard controls. Even so. Davis-Besse nuclear facility.
provided about 22 per cent of our Company gen-eration during the year, with 77 per cent generated Operating expenses were paced by higher fuel by coal, and the balance mostly by oil.
costs and greater usage, so fuel expense accounted for nearly a third of our total operating expenses.
The depreciation item merits some comment in As inflation progressed, the costs of mining and that connection. Although the base broadened
)
transporting coal-our principal energy source-appreciably with the new units on line, deprecia-4
tion expense was held down by an innovative ac-benefits the consumer and shareowner alike in counting method called " unit-of-production de-better matching this large expense item with the preciation", a method which allows us to charge revenues derived from the plant's output.
depreciation on the nuclear unit based upon the Addition of new facilities to the tax base brought amount of generation. This depreciation method an increase in state and local property taxes. Also, was approved by the PUCO as a method which the Ohio excise tax on utility sales increased along with our growing revenues. Finally, we Price Range and Dividends Paid Per Share of were required to pay a new Pennsylvania public Common Stock utility realty tax on our share of CAPCO f acilities Price Range Dividends in that state, which included a sizable spec!al one-time assessment in 1979.
High Low Paid 1979 First Quarter 23%
21 %
$.55 Although total operating expenses were up about eight per cent during the year, operating income Second Quarter 2i%
19
.55 from sales to our customers continued to increase.
Third Quarter 20 %
19%
.55 Gains Noted in Earnings on Common and Fourth Quarter 19%
17%
.55 Dividends Declared Even though the burden of financing an extensive construction program at a time of record-high 1978 First Quarter 25%
23%
$.53 interest rates was very heavy-a trend that we expect to turn down in coming years-the Com-Second Quarter 24%
21%
.53 pany's earnings on common stock increased eight Third Quarter 24%
22%
.53 Per cent during the year. New shares sold as part of our financing program increased the average Fourth Quarter 23 %
20%
.53 number of shares outstanding, so earnings per J
share declined somewhat, from $2.78 in 1978 to The Common Stock is listed on The New York Stc,ck
$2.65. However, dividends declared increased Exchange. These stock price quotations are from the from $2.14 to $2.20 in the same period, continu-Wall Street Journal.
ing the upward trend of the past decade.
As reported to you in the Fourth Quarter Report the common dividends paid during 1979 are s
y estimated to be a 52.5 per cent return of capital and
/, thus not taxable as ordinary income for Federal
%3 income Tax purposes. All 1979 dividends paid on p the various series of preferred stock are fully tax-l able as ordinary income. We currently estimate that due to a combination of non-recurring factors, the 1980 common stock dividends will be 100 per cent non-taxable as current income.
4/'
$239 Million Construction Program is Financed 1,..
With the completion of a $239 million construction program in 1979, and a considerable reduction in construction commitments for 'ne future, it appears that Toledo Edison's construction expend-
, j itures peaked this year. External financing included ai i
$40.9 million from the sale of two million new
[h i--
shares of common stock; $3.7 million from the sale l
of 183,497 common shares through our Share-l
" ' owner Dividend Reinvestment and Stock Purchase Plan; $25 million from the sale of 250,000 shares
~
of cumulative preferred stock; $16.5 million from I
the sale of a pollution control note, and $74.5 4 '
~'
million from the sale of 11% first mortgage bonds.
This external financing, together with d30 million of funds generated internally, was used to meet construction expenditures and repay almost $2 million of 3% first mortgage bonds that matured 5
during the year.
l A substantial amount of the financing costs have j
been capitalized through the allowance for funds l
5
l used during construction ( AFUDC). Two factors l
accounted for the increase in AFUDC during 1979: first, a greater volume of construction work-in-progress and, second, an increase in the AFUDC rate from 74% to 7%% effective in i
January,1979.
Recent and prospective rate increases, together
- 1 Ah bJ E OM f with reduced construction commitments, should
- w L
provide more internally generated funds and an
/
3- -
J '- ;
.' iMd
~
improved cash flow during the years immediately M
1, "
'c.E i~'~
'e; r
d' ( :
i r iI ~ %, 'aity, '
j ahead of us, particularly after 1980.
== v,
f 7,
Future Construction Commitments Reduced lN,.
c 7; s
/.*
The lengthening construction time required for y
W major generating units makes long-range planning j pt '
. If b essential. At the same time, ever-changing con-i
%.i i lis >
1 -.,c
.,A wt" 9 a
.r I
of existing circumstances and future prospects h-f (.
4
-(
l ditions dictate careful periodic reviews in the light insofar as we can foresee them. Along with the
.f
+ '
J
'c*,
o other CAPCO companies we have done this, and yj
. y*,,
- s. grj, y as a result there have bee.; several realignments y
of plans through the years.One of these was an-m.4,,;..,.'. LJ
'=j
,/.
Q ~ ~. ;.
, #g.g5 nounced early in 1980, a modification that reflects
- 7*
tg a variety of trends that we expect in the coming
(
- 1.n decade. For example we now forecast a growth in
' O.,*
y years.This will result from the twin effects of rising
?,-
g s.}
Jg.
' f(i our customers' electricity requirements of about f"
three to four per cent annually for the next few fy.
-y
,.. /k energy prices and possibly the intensifying of
.(
Q.
1 4
conservation measures by our customers under e.,
the guidance of both the electric industry and the Our Bay Shore Station continued its record this year as one government. Over a longer time frame we expect of the most etficient and reliable coalgired generatine units Three. here being over.
"bN"o I"
that electricity will provide an increasing share h
n of our country,s energy needs, ar.d therefore would anticipate a somewhat higher growth rate i
in future years. That program was outlined in the I
letter whicn opened this report. Another trend is the increasing time and money required for build-ing generating facilities. Inflation is a big factor, Status of Rate Increases of course, but by far the most critical element is the increasingly oppressive effect of government The Company's request for an increase in electric over-regulation and interference. This pertains rates filed with the PUCO on September 1,1977 both to coal-fired plants, which are subject to was granted in full on June 9,1978, with an interim severe environmental constraints and, to the more increase of 80%of the request granted in December, environmentally acceptable nuclear facilities, 1977. The Consumer's Counsel of Ohio filed an which are the hardest hit by the constantly chang-appeal to the Supreme Court of Ohio on September ing edicts flowing from various regulatory le -is.
25,1978 which resulted in a remand to PUCO for The combination of regulatory uncertainties, di-further action. On December 19,1979 the PUCO minishing load growth and the greater cost of issued its order reducing the authorized increase of building and financing major units has led CAPCO
$55.8 million to $50.3 million. This reduction be-to terminate work on four genera ~! units and to came effectiv e in January,1980, and will remain in spread out the construction peric.s for three effect until the rate case described below is com-i others, as detailed on the following page.
pleted. Annual cevenue decrease-55.5 million, Our forecasts indicate that in spite of these effective January 3,1980 changes, we should be able to provide for our On May 22,1979 the Company filed a new request customers normal day-to-day requ,irements. Mean-for rate relief. Hearings on this request were in while there should be some respite trom the very progress at year end aad the PUCO's decision is large construction expenditures and management expected in early 1980 Annual revenue increase burdens we would have had, and we will be (p nding)-$38.3 millian supplying electricity from the two most promising energy options: coal and nuclear power.
6 i
Construction Program Modified By CAPCO Companies.
l l
The extension of construction schedules on three CAPCO Power Pool Service Area nuclear units and the termination of four other nuclear units in the design stage was announced g3gg ci,,,,,,
January 23,1980 by the utility company members
' Lc
, Toledo '
ERIE of the Central Area Power Coordination Group
,x (CAPCO). The Toledo Edison Company has about a 20 per cent ownership in each of the units in-volved.
Extended schedules were announced for Perry Unit 1, from May,1983 to May,1984; Beaver Valley Unit 2, from May,1984 to May,1986; and g
a Perry Unit 2, from May,1985 to May,1988. Cleve-land Electric illuminating is building the Perry units, each 1205 menawatts, near North Perry, Ohio. Duquesne Light is the builder of the 833 MW Q Toledo Edison Co. $ Ohio Edison Co.
Beaver Valley unit, at Shippingport, Pennsy!vania.
g Cev6and Electric illuminating Co.
W uquesne Ught Co.
$ Pennsylvania Power Co.
D CAPCO terminated the second and third Davis-Besse 906 MW units and the first and second 1260 MW Erie units. Toledo Edison was to be the made to bn..
. ir builder and operator of the Davis-Besse units, on ng our capacity. ?o h.ne with our pro-the existing site near Port Clinton, Ohio. Ohio Jected load growth,in recognit,an of uncertain Edison was to build and operate the Erie County government policies on nuclear power and to units, north of Berlin Heights, Ohio.
relieve the burden of the heavy nuclear construc-tion and financing program,, he said. Additionally, the move will enable us to concentrate all of our "We remain convinced after considering all of the tra,ned manpower on improving the performance i
options that nuclear power is a safe, economical f the Davis-Besse number one unit.
and environmentally superior method of generat-ing electricity," John P. Williamson, Chairman and Toledo Edison's owned generating capacity is Chief Executive Officer for Toledo Edison, said at expected to increase by 164 MW to 1789 MW in the time of the announcement. "Upon completion late 1980 with the addition of the coal-fired Mans-of the construction program as presently planned, field Unit 3 on the Ohio River. in all, the continuing Toledo Edison will have a well-balanced generating CAPCO schedule is expected to add 810 MW in mix of 50 percent in coal; 45 percent in nuclear the period from 1980 through 1988 to Toledo and about 5 percent in oil. The changes were Edison's system.
CAPCO Construction Schedule (includes changes of January,1980) i l
Expected Net Actual or Demonstrated Percentage Scheduled Construction and Fuel Capability of Company Completion Generating Unit Operation by Source
( Kilowatts)
Ownership I
1977 Mansfield No. 2 Pennsylvania Power Coal 825,000 17.30%
1977 Davis-Besse No.1 Toledo Edison Nuclear 906,000 48.62%
1980 Mansfield No. 3 Pennsylvania Power Coal 825,000 19.91%
1984 Perry No.1 Cleveland Electric illuminating Nuclear 1,205.000 19.91%
1986 Beaver Valley No. 2 Duquesne Light Nuclear 833,000*
19.91%
1988 Perry No. 2 Cleveland Electric illuminating Nuclear 1,205,000 19.91%
' Initial rating. Expected to have an ultimate rating of 862.000 kilowatts.
As of January 23,1980, Davis Besse No. 2 and 3-Erie No.1 and 2, were cancelled.
7
Rasults of Opercti::ns Thousands of Dollars increase For The Years Ended December 31, 1979 1978 (Decrease)
OPERATING REVENUES Electric 258 707 334 083 24 624 Gas 3 583 3 085 498 Steam heating 2 831 2 888 (57)
Total operating revenues 365 121 340 056 25 065 OPERATING EXPENSES Fuel used in power plants 93 295 82 039 11 256 Purchased powe. <APCO Power Pool 20 631 29 748 (9 117)
Other purchased and interchanged power-net 32 943 26 102 6 841 Fuel and purchased power 146 869 137 889 8 980 Operation 44 691 38 883 5 808 Maintenance 21 137 19 604 1 533 Deprecistion provisions 29 117 26 532 2 585 State and local taxes 29 760 24 320 5 440 Federal income taxes 25 139 27 397 (2 258)
Total operating expenses 296 713 274 625 22 088 OPERATING INCOME FROM SALES TO CUSTOMERS 68 408 65 431 2 977 OTHER INCOME Allowance for equity funds used during construction 23 512 17 470 6 042 income tax credits applicable to nonoperating activities 8 251 6 484 1 767 Other income and deductions-net 1 017 720 297 Total other income 32 780 24 674 8 106 INCOME 3EFORE INTEREST CHARGES 101 188 90 105 11 083 INTEREST Cr MRGES Long-ter.? debt 48 315 41 094 7 221 Short-term borrowings 4 269 1 652 2 617 Allowance for borrowed funds used during construction (9 991)
(7 090)
(2 901) l Interest charges-net 42 593 35 656 6 937 NETINCOME 58 595 54 449 4146 PREFERRED STOCK DIVIDENDS ACCRUED 13 894 13 020 874 EARNINGS ON COMMON STOCK 44 701 41 429 3 272 1
EARNINGS PER COMMON SHARE (Based on average number of shares outstanding of l
16,848,431 in 1979 and 14,900,405 in 1978)
$2.65
$2.78 (13C) 8 The notes on pages 15 through 21 are an integral part of this statement.
Ecrnings R:inv stad Thousands of Dollars For The Years Ended December 31, 1979 1978 BALANCE,BEGINNING OF YEAR 111 110 102 187 Add-Net income 58 595 54 449 Deduct-Preferred stock quarterly dividends declared 14 276 13 020
-Common stock cash dividends declared,
$2.20 per share in 1979 and $2.14 in 1978 38 123 32.506 EARNINGS REINVESTED DURING THE YEAR 6 196 8 923 BALANCE, END OF YEAR 117 306 111 110 Federal Income Taxes Thousands of Dollars For Thr. Years Ended December 31, 1979 1978 FEDERAL INCOME TAX EXPENSE WAS COMPUTED AS FOLLOWS Tax at statutory rates on pre-tax income 34 722 36 174 Less tax effects due to-Allowance for funds used during construction 15 411 11 789 Accelerated depreciation methods and other depreciation differences (329) 975 Removal cost of property retired 623 681 Miscellaneous 2 129 1 816 Total federalincome tax expense 16 888 20 913 Tax included as credit in Other income 8 251 6 484 Federal income Taxes included in Operating Expenses 25 139 27 3,7 FEDERAL INCOME TAX EXPENSE DETAILS ARE AS FOLLOWS Payable 2 245 2 189 Investment tax credits-Deferred 5713 7 518 Amortized (756)
(570)
Deferred taxes-Accelerated depreciation-net 9 715 11 661 Property taxes applicable to subsequent years (80 65 Other provisions 50 50 Total Federalincome Tax Expense 16 888 20 913 I
The notes on pages 15 through 21 are an integral part of this staternent.
9
Bal nce She:t Thousands of Dollars increase December 31, 1979 1978 (Decrease) l l
ASSETS PROPERTY, PLANT AND EQUIPMENT j
Plant in service. at original cost 979 809 950 873 28 936 Less accumulated provision for depreciation 201 895 176 450 25 445 777 914 774 423 3 491 Construction work in progress CAPCO power stations 441 917 332 006 109 911 Other work in progress 77 547 26 872 50 675 Nuclear fuel in reactor, at amor+:eed cost 11 786 15 875 (4 089) 1 309 164 1 149 176 159 988 CURRENT ASSETS Cash 4 302 4 711 (409)
Temporary cash investments 4 500 (4 500)
Accounts receivable-net 38 480 38 136 344 Fuel for use in power plants 24 307 19 122 5 185 Materials and supplies 9 430 7 067 2 363 Prepaid taxes 5 024 4 382 642 Special deposits and other 5 250 4 555 695 86 793 82 473 4 320 INVESTMENTS AND OTHER Construction funds (pollution control) held in escrow 3 322 2 443 879 Investments, at cost 1015 973 42 Property taxes applicable to subsequent years 15 840 15 328 512 Deferred charges Abandoned project costs 45 719 45 719 Other 5659 5 554 105 71 555 24 298 47 257 TOTAL ASSETS 1 467 512 1 255 947 211 565 10 The notes on Pages 15 through 21 are an integral part of this statement.
Increase 1979 1978 (Decrease)
LIABILITIES CAPITALIZATION Common stock equity 432 554 382 084 50 470 Cumulative preferred stock 150 000 150 000 Cumulative preferred stock subject to mandatory redemption requirements 34 000 9 500 24 500-Long. term debt 611 137 560 644 50 493 1 227 691 1 102 228 125 463 CURRENT LIABILITIES Short-term notes payable 23 500 23 500 Preferred stock and long-term debt due within one year 41 912 8 022 33 890 Accounts payable 43 113 38 107 5 006 Accrued taxes 38 413 35 679 2 734 Accrued interest 12 313 9 143 3 170 Dividends declared 13 679 11 906 1 773 Accrued expenses and other
'5 530 3 004 1 726 178 J50 106 661 71 799 ACCUMULATED PROVISIONS AND OTHER Deferred federal income taxes Accelerated depreciation 29 435 19 372 10 063 Accelerated amortization 2 447 2 794 (347)
Property taxes applicable to subsequent years 7 389 7 469 (80)
Federal investment tax credits 20 801 15 973 4 828 Deferred credits and other 1 289 1450 (161) 61 361 47 058 14 303 TOTAL LIABILITIES 1 467 512 1 255 947 211 565 l
l 1
The notes on pages 15 through 21 are an integral part of this statement.
Il
C pittlizrtirn And Capitalization Ratios Thousands of Dollars December 31, 1979 1978 COMMON STOCK EQUITY Common Stock, $5 par value, authorized 30,000,000 shares, outstanding at year end, 17,911,971 in 1979 and 15,728,474 in 1978 89 560 78 642 Premium on capital stock 225 688 192 332 Earnings reinvested 117 306 111 110 432 554 35%
382 084 35%
CUMULATIVE PREFERRED STOCK Shares outstanding Redemption price Eventual 1979 1978 Current Through minimum
$100 par value 4X%
160 000 160 000 $104.625
$104.625 16 000 16 000 4.56%
50 000 50 000 101.00 101.00 5 000 5 000 4.25%
100 000 100 000 102.00 102.00 10 000 10 000 8.32%
100 000 100 000 107.70 9-1-81 102.46 10 000 10 000 7.76%
150 000 150 000 107.257 9-1-82 102.437 15 000 15 000 7.80%
150 000 150 000 106.50 9-1-83 101.65 15 000 15 000 10%
190 000 190 000 110.00 2-29-80 101.00 19 000 19 000
$25 par value 8.84% 1 000 000 1 000 000 27.20 11-30-81 25.25 25 000 25 000
$2.365 1400 000 1400 000 29.85 9-30-82 27.75 35 000 35 000 150 000 12%
150 000 13%
CUMULATIVE PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION REQUIREMENTS, excluding current sinking fund payments Shares outstanding Redemption price Eventual 1979 1978 Current Through minimum
$100 par value 11%
90 000 95 000 $111.00 8-31-84 $101.00 9 000 9 500 9%%
250 000 106.92 5-31-85 100 0')
25 000 34 000 3%
9 500 1"E LONG-TERM DEBT 611 137 50%
560 644 51%
l TOTAL CAPITALIZATION 1 227 691 100% 1 102 228 100%
l l
l l
12 The notes on pages 15 through 21 are an integral part of this statement.
p
Lcng-Tcrm D::bt Thousands of Dollars December 31, 1979 1978 FIRST MORTGAGE BONDS, excluding current maturities and bonds acquired and held for sinking fund purposes 2%%, due 1980 7 500 10%, due 1982 40 000 40 000 3%%, due 1984 14 000 14 000 9.35%, due 1985 50 000 50 000 3%%, due 1986 15 000 15 000 4%, due 1988 15 000 15 000 6%%, due 1997 35 000 35 000 9%, due 2000 35 000 35 000 7%%, due 2002 30 000 30 000 8%, due 2003 40 000 40 000 9.65%, due 2006 50 000 30 000 9%%, due 2008 65 000 65 000 11%, due 2009
.75 000 Discount in process of amortization (363)
(186) 463 637 396 314 OTHER LONG-TERM DEBT Bank loan note,6%%, due 1980 30 000 Unsecured notes,8.75%, due 1983 through 1997 110 000 110 000 Unsecured pollution control note, average interest rate 5.71%, due 1984 through 2003 6 000 6 000 Unsecured pollution control note,7%%, due 1992 through 2006 15 000 15 000 Unsecured pollution control note,7%%, due 1999 through 2009 16 500 Nuclear fuel lease
~
3 330 TOTAL LONG-TERM DEBT 611 137 560 644 The notes on pages 15 thv, ugh 21 are an integral part of this statement.
l '>
Sourca cf Funds Inv st d In Pir.nt cnd Fccilitis Thousands of Dollars For The Years Ended December 31, 1979 1978 PROVIDED FROM OPERAT!ONS Net income 58 595 54 449 Less-Preferred dividends declared 14 276 13 020
-Common dividends declared 38 123 32 506 Earnings reinvested during the year 6 196 8 923 Principal income charges not requiring current funds:
Depreciation provisions 29 117 26 532 Amortization of nuclear fuel 4 089 3 665 Deferred federal income taxes-net 9 636 11 726 investment tax credits-net 4 828 7 139 Allowance for equity funds used during construction (23 512)
(17 470)
Total provided from operations 30 354 40 515 PROVIDED FROM FINANCING Sale of securities:
Common stock 44 275 45 069 Preferred stock 25 000 First mortgage bonds (principal amount) 75 000 65 000 Pollution control notes:
Proceeds on issuance 16 500 Change in escrow deposit (878) 307-Net change in temporary cash investments 4 500 (4 500)
Net change in short-term borrowings 23 500 (9 500)
Reduction of long-term debt and preferred stock (7 440)
-(5 897)
Total provided from financing 180 457 90 479 OTHER Allowance for equity funds used during construction 23 512 17 470 Net change in current assets, current liabilities and other accounts 4 687 21 424 Total other 28 199 38 894 l'OTAL SOURCES OF CONSTRUCTION FUNDS 239 010 169 888 CAPITAllZED NUCLEAR FUEL LEASE 10 800 INVESTED IN PLANT AND FACILITIES 239 010 180 688 14 The notes on pages 15 through 21 are an integral part of this staternent.
N:t:s to Fin:nci:1 St tzm:nts December 31,1979 past depreciation provisions. Depreciation ex-pense on Davis-Besse Unit No.1 is based on the unit-of-production method using a rate which includes a provision for the Company's share of the total current estimated decommissioning costs of $40 million.
- c. FederalIncome Taxes The Company provides deferred federal income taxes on the additional depreciation resulting from the difference between straight-line and accel-erated tax depreciation methods for property additions placed in service after December 1973 in accordance with provisions of PUCO rate orders.
The Company does not provide deferred federal income taxes resulting from other depreciation differences or from the use of accelerated tax depreciation methods for property additions prior
- 1. Summary of Significant Accounting Policies to January 1974 since, based on Ohio court and a Construction Overheads PUCO decisions, the Company is of the opinior-Construction costs of property, plant and equip-that such future taxes will be recoverable out of ment include overheads for payroll-related costs future revenue t. Book depreciation rates include such as taxes, pensions and other fringe benefits, an allowance f ar removal costs with such costs and administrative and general expenses, as well charged to th-accumulated provision for depre-as an allowance for funds used during construction ciation as incurred. Removal costs are deducted (AFUDC). AFUDC represents the estimated com-for federal income tax purposes as incurred.
posite interest and equity costs of capital funds All interest costs are deducted for tax purposes used to finance construction to the extent that such as incurred. Tax deductions applicable to interest costs have been transferred to property, plant expense arising from investments in non-utility and equipment from the statement of Results of properties, primarily construction work in pro-Operations. Based upon Federal Energy Regu-gress, have been classified in income tax credits latory Commission requirements adopted in 1977, applicable to non-operating activities.
including provisions for the compounding of AFUDC, the net-of-tax rate of such allowance was Investment tax credits have been deferred and are 74% in 1978 and 7%% in 1979.
being added to income over the life of the property giving rise to the credits. Unrealized investment
- 6. Depreciation tax credits from 1977 to 1979 aggregate $19 Depreciation rates used in computing depreciation million and will be recorded in future years when expense shown in the financial statements, except utilized.
for Davis-Besse Unit No.1, are based upon age-life studies and averaged 3.4% in 1979 and 1978
- d. State and Local Taxes l
and are applied on a straight-line basis. In accord-State and local taxes for 1979 consisted of ance with a Public Utilities Commission of Ohio
$14,100,000 of local property taxes, $13,466,000 l
(PUCO) rate order effective January 1977, the of Ohio state excise taxes, and $2.194,000 of other l
Company began accruing additional depreciation taxes. These taxes in 1978 were $11,405,000, of approximately $1.4 million annually to adjust
$10,867,000 and $2,048,000,respectively.
15
- e. Revenues and Fuel effective cost of money in certain refunding opera-tions. The annual interest requirement on long-Revenues are included in income as billed to'cus-term debt outstanding at December 31,1979 is tomers on a daily cycle billing basis. Revenues
$56,962,000 for an average interest rate of 8.78%.
from larger industrial customers are based on month-end meter readings.
- 3. Preferred Stock Subject to Mandatory Virtually all of the Company's rate schedules in' Redemption Requirements clude fuel adjustment provisions under which The 11% series includes provisions for a manda-almost all fuel costs are permitted to be billed tory sinking fund sufficient to retire a minimum to customers during the month following recording f 5,000 shares (5% of the onginaIissue) of the of the expense. Such adjustments are subject to series on or prior to September 1,in each year, periodic review and hearings by the PtlCO. The beginning in 1979.The 9%% series includes Company charges to expense the cost of fuel as pr visions for a mandatory sinking fund sufficient it is consumed.
to retire a minimum of 16,650 shares on June 1 in each of the years 1985-1998 and 16,900 shares
- f. Retirement income Plan shares of M issues wW The Company has a non-contributory retirement be purchased at the s. king fund redemption in income plan covering all employee groups. The 100 per share plus accrued and unpaid P
o Company's cost was $3,941,000 in 1979 and d
e
$3,645,000 in 1978. The Company's policy is to fund annual costs as accrued each year,in-
- 4. Assets Subject to Lien cluding amortization e' unfunded actuarial liability The mortgage and supplements thereto securing
($14,461,000 as of Anuary 1,1979) over the first mortgage bonds issued by the Company 20-year period end ag December 31,1995.
constitute a direct first mortgage lien on sub-
- g. Reclassifications stantially all property and franchises owned by the Company, other than expressly excepted property Certain minor reclassifications have been made to which includes cash and securities, accounts re-amounts reported in 1978 to conform to the ceiv ble, fuel, suppl,es and automotive equipment.
i presentation used in 1979.
5.Short-Term Borrowing Arrangements
- 2. Capitalization in 1979, the Company sold 2,000,000 shares of The Company regularly obtains funds on an in-terim basis to meet current construction costs.
Common Stock at a public offering price of Such short-term funds are obtained by issuing
$21.125 per share, 183,497 shares of Common Stock at an average price of $20.01 per share commercial paper or executing short-term notes through the Shareowner Dividend Reinvestment payable to banks. During 1979 and 1978, the maximum month-end balance was $64,800,000 i
and Stock Purchase Plan, and sold 250,000 shares and $43,490,000, respectively. The daily average of preferred stock at $100 per share.The increase balance outstanding during 1979 was $30,822,000 in premium on capital stock ($33,356,000) results with an average interest rate of 11.45%. Short-term from the excess over par value of the net pro.
notes payable at December 31,1979 consisted of ceeds from the sale of common shares
$23,500,000 of commercial paper with an average
($33,495,000) less the expenses of issuing discount rate of 11.24%. There were no short-term the preferred shares ($139,000).
- "9*"
"9 The Company estimates, subject to final determi-l nation by the internal Revenue Service, that ap-The Company has unused lines of credit at De-proximately 52.5% of the 1979 Common Stock cember 31,1979 with various banks aggregating dividend payments will be considered a return of
$71,490,000. The Company has informal com-capital for federal income tax purposes.
pensating balance arrangements with all but one The Company is authorized to issue 2,000,000 of these banks and is expected to maintain average shares of $100 par value and 6,000,000 shares of deposits, based on bank ledger records, equal to l
$25 par value cumulative preferred stock under 10% to 20% of the line of credit depending on the articles of incorporation. The annual dividend the amount of borrowings outstanding at the requirement on preferred stock is $15,309,000 for respective bank. The balances are not legally re-an average dividend rate of 8.30%. Redemption of stricted and also serve to compensate the banks the 11%,10%,9%%,8.84% and $2.365 series of for banking services and to provide operating preferred stock during their initial redemption balances to the Company. The Company pays a period is subject to restrictions regarding the commitment fee to one bank for the line of credit.
16
- 6. Power Pooling level of 25% in November 1977,40% in December The Company,in the interest of reliability and 1977,75% in January 1978 and 100% in July 1978.
economy, has entered into a power-pooling ar-rangement with four other utilities (CAPCO Group)
The Company's ownership share in the other four which involves substantial commitments for joint CAPCO units, which are under construction and participation in additional power generation and planned for operation in 1980 and beyond, will transmission facilities. The Company will have an total an investment of approximately $1.4 billion.
ownership share in six CAPCO generating units The Company provides its own financing for this (of which four are nuclear and two are coal) with investment. The Company's share of direct ex-two of these units presently in service.
penses for operation of the jointly owned units is The first unit at the Davis-Besse Nuclear Power included in the operating expenses on the state-Station was declared in commercial service at a ment of Results of Operations.
The following represents the Company's ownership in each of the CAPCO joint-owned units at December 31,1979:
(thousands of dollars)
Ownership Plant Accumulated Construction Generating Unit Share In-Service Depreciation Work in Progress Davis-Besse No.1 48.62%
333,238 13,780 11,322 Mansfield No. 2 17.30%
64,707 5,372 1,958 Mansfield No. 3 19.91%
16,643*
1,409 87,658 Beaver Valley No. 2 19.91%
6,435*
712 133,991 Perry Nos.1 G 2 19.91%
220,552
- The plant in-service amounts of these units cur-generating station. These common facilities were rently under construction represent facilities which placed in-service coincident with the commercial are common to the operation of the respective operation of other units at the generating station.
- 7. Debt Guarantee
- 8. Construction G Financing The Company, together with the other CAPCO Construction expenditures in 1980 are estimated companies, has made long-term coal supply ar-at $194 million. In addition to the $117 million rangements with Quarto Mining Company toward future CAPCO generating units, the Com-(Quarto), a subsidiary of North American Coal pany plans to spend approximately $11.4 million Company. The CAPCO companies have severally, for pollution control facilities required at the and net jointly, agreed to guarantee their pro-Company's Acme and Bay Shore Stations.The portionate shares of Quarto's debt and lease obli-Company's financing program is estimated to gations incurred in connection with developing require approximately $136 million of external and equipping the mines, expected to produce funds in 1980 to meet the above construction 4.7 million tons per year. As of December 3'1, program. A $30 million long-term bank loan note 1979, the Company's share of the guarantee was maturing February 1,1980 is being refunded with
$25,600,000. At December 31,1979, the coal new long-term bank loan notes totaling $50 mil-mining systems were certified as complete. Be-lion and maturing from 1985 through 1987.The cause of difficulties experienced during the devel-additional $20 million will be used to retire out-opment period, the CAPCO Companies are re-standing short-term debt. In addition, a $7.5 mil-viewing the various alternatives available to re-lion first mortgage bond issue will mature on duce unit production costs, which are presently December 1,1980. The Company has limitations in excess of the current spot market price of coal.
Imposed upon it by the first mortgage bond inden-ture and articles of incorporation which require the maintenance of required earnings coverage ratios in order to issue additional first mortgage bonds and preferred stock.
17 f
- 9. Abandoned Project Costs lieved of its obligations to supply uranium under the contract, plus damages in an unspecified in January 1980, the Company along with the other amount, based,in general, upon alleged acts of CAPCO companies terminated plans for the con-
~ repudiation" and breach of the contract by the struction of the Davis-Besse No. 2. Davis-Besse CAPCO companies in refusing to agree to certain No. 3, Erie No.1, and Erie No. 2 nuclear generating units scheduled for completion in 1988,1990, upward price adjustments proposed by Kerr-1989, and 1991, respectively. At December 31, McGee. Kerr-McGee also alleges that the CAPCO 1979, the Company's share of the amounts al-c mpanies' actual needs for deliveries of uranium are far less than Indicated by the contract. The ready expended on these projects amounted to
$45,719,000. Additional costs could be incurred as Company intends to vigorously contest this litiga-tion. On June 28,1979, the CAPCO companies the Company terminates the outstanding contracts associated with these projects. Such additional filed suit against Kerr-McGee and its parent, Kerr-termination costs cannot be reasonably estimated McGee Corporation for the actual damages and other relief.
at this time but could be substantial.The Company will seek regulatory approval to amortize the
- 12. Leases costs already expended as well as subsequent The initial nuclear fuel core for Davis-Besse Unit termination charges,if any, over a period of years.
No.1 is leased. The nuclear fuel lease was capital-Subsequently, the Company will seek to recover ized in July 1978 in accordance with provisions of this amortization in rates. It is the opinion of the the June 9,1978 PUCO rate order.The Company's Company that the anticipated regulatory treatment share of the remaining nuclear fuellease payments of the amounts already expended on the projects of principal for the initial nuclear fuel core at De-together with termination costs,if any, would not cember 31,1979 is approximately $3,910,000.
result in any material adverse effect on the Com-Payments for charges for utilization of the nuclear pany's financial condition or results of operations.
fuel (based on the burn up method) plus interest
- 10. Environmental related to this nuclear fuel lease are estimated at
$3,790,000 in 1980 and $440,000 in 1981.The The Company is subject to environmental regula.
burn-up rate is designated to amortize the total tion as to air, water and noise matters and as to investment in nuclear fuel. The fuel will be re-location of certain facilities by federal, state and P aced over an approximate three-year production l
local authorities. In 1979, the Company spent $40 million for pollution control facilities.The Com-CYCI*-
pany's five-year construction program includes Ultimate disposition of the spent fuel, whether by
$19 million toward initiation and completion reprocessing or permanent storage,is currently for such pollution control facilities as it presently under study. Spent fuel removed from the reactor foresees as being required at its present generating through 1990 can be accommodated on an interim stations. In order to assure continued compliance basis in present storage facilities.
with all applicable laws and regulations, the Com-pany has plans for installation of equipment, has in addition to the nuclear fuel lease described applied for permits or variances,is awaiting pro-above, members of the CAPCO Grcup have mulgation of applicable regulations or is contesting entered into commitments to lease nuclear fuel to the validity of existing or proposed regulations.
be loaded through 1982 for Davis-Besse Unit No.
1 and other CAPCO nuclear units.The Company's Since environmental controls are in the process share of this CAPCO lease, aggregating $248 of development, the Company can not estimate milhon, amounts to approximately $47 milhon.
the effect of existing and potential regulations Estimated payments for the Company's share and legislation. The Company may incur substan-f this nuclear fuel lease are $2,000,000 in 1980, tial civil and criminal penalties if it fails to comply
$4.630,000 in 1981, $9,110,000 in 1982, with environmental control regulations.
$10,850,000 in 1983 and $22,980,000 in 1984.
- 11. Litigation Other financing leases entered into by the Com-Pany are not significant.
On April 10,1979, Kerr-McGee Nuclear Corpora-tion (Kerr-McGee) filed suit against the members of the CAPCO power pool, including the Company.
- 13. Interim Financial Reporting The suit relates to the status of a 1973 contract The following represents the quarterly results, between Kerr-McGee and the CAPCO companies which are unaudited, but in the opinion of the for 'he supply by Kerr-McGee to CAPCO of Company reflect all adjustments (which are of a 4,914,200 kilograms of uranium over a period normal recurring nature) necessary for a fair state-exter ding to 1985. Kerr-McGee seeks to be re-ment of results for such periods:
18
(thousands of dollan)
Total Total Earnings Earnings Operating Operating on Common Per Common Three Months Ended Revenues income Stock Share I
1978 March 31 86,714 15,835 10,527
$.77 June 30 79,278 13,550 8,063
.56 September 30 90,609 20,024 13,380
.85 December 31 83,455 16,023 9,459
.60 1979 March 31 99,680 19,412 12,736
$.81 June 30 87,888 16,737 10,268
.65 September 30 87,567 18,645 13,689
.77 December 31 89,986 13,614 8,009
.45 14.The Effects of Changing Prices (Unaudited)
Preparing the Constant Dollar financial statements.
Only the measuring unit is restated from dollars recorded at the date of the original transactions Pursuant to a 1979 pronouncement by the Finan-to units of average 1979 purchasing power. Con-cial Accounting Standards Board, Statement No.
stant Dollar values represent historical costs stated 33, the Company is required to present supple-in terms of average 1979 general purchasing mentary information to the basic financial state-power, as measured by the Consumers Price ments which reflects the impact of changing prices, index for all Urban Consumers.
particularly inflation. Compliance with Statement Current Cost values represent the changes in No. 33 involves presenting financial information specific prices of property, plant and equipment, to show the effects of general inflation (Constant from the year the plant was acquired to average Dollar Accounting) and changes in prices of spe-1979 values and is determined by indexing sur-cific assets, namely property, plant and equipment viving plant by the Handy-Whitman index of Public (Current Cost Accounting).
Utility Construction Costs. The amounts restated The same generally accepted accounting principles to Constant Dollar and Current Costs are estimates used in preparing the Conventional Historical of the effects of inflation on the Company.
Cost Accounting financial statements are used in The following supplementalinformation is pro-vided to show the effects of changing prices on the Company's results of operations.
Statement of income from Continuing Operations Adjusted for Changing Prices Thousands of Dollars Conventional Constant Current Historical Cost Dollar Costs For the Year Ended December 31,1979 Accounting Accounting
- Accounting
- Operating revenues 365,121 365,121 365.121 Depreciation expenses (including amortization of nuclear fuel) 32,710 50,583 56,534 Other operating expenses, other income, and interest charges 273,816 273,816 273,816 306,526 324,399 330,350 Net income 58,595 40,722 34,771 Preferred stock dividends accrued 13,894 13,894 13,894 Earnings on common stock from continuing operations exclusive of reduction to recoverable cost 44,7 01 26,828 20,877 Earnings per common share
$2.65
$1.59
$1.24
' Constant Dollar and Current Cost values are based on average 1979 dollars.
19 L
The comparative Constant Dollar and Current Cost Under the PUCO and FERC rate-making pro-values of all items on the income statement, visions to which the Company is subject, only the except depreciation, represent the amounts re-historical cost of plant is recoverable in revenues corded in the conventional historical cost income as depreciation. Therefore, the excess of the cost statement, which amounts generally occurred of plant stated in terms of Constant Dollars or ratably throughout the year. Fossil fuel inventories Current Cost that exceeds the historical cost of and the cost of fuel used in generation have not plant is not presently recoverable. While the rate-been restated from their historical cost basis.
making process gives no recognition to the current PUF ' and FERC regulations limit the recovery of cost of replacing property, plant, and equipment, fuel and purchased power and gas costs through based on past practices the Company believes it the operation of adjustment clauses or adjustments will be allowed to earn on the increased cost of in basic rate schedules to actual costs (historical its net investment when replacement of facilities cost basis). Also, fuelinventories turn over ap-actually occurs.
proximately three times a year. For these reasons During a period of inflation, holders of monetary fuel inventories are effectively monetary assets.
liabilities experience an inflationary gain to the No Federal income tax benefits for any inflation extent such debts are fixed amounts which will be adjustment are reflected since current tax law does repaid with dollars of reduced purchasing power.
not allow any consideration for the erosion of This type of inflationary gain is particularly sig-capital which exists during inflationary periods.
nificant for electric utilities due to the substantial The current year's provision for depreciation on amounts of debt used to finance property, plant the Constant Dollar and Current Cost amounts of and equipment. This inflationary gain from the property, plant, and equipment was determined decline in purchasing power of net amounts owed by applying the Company's depreciation rates should be offset against the inflationary loss to the indexed plant values. The current year's experienced on net property, plant and equipment amortization on the Constant Dollar and Current to determine the net erosion of stockholders
- Cost amounts for nuclear fuel was determined by equity. The following statement reflects the erod-applying the current year's consumption to the ing effects of inflation on stockholders
- equity indexed nuclear fuel amounts.
during 1979.
Effects of inflation on Stockholders' Equity Thousands of Dollars increase (Decrease) from Historical Cost Constant Current Dollar Cost For the Year Ended December 31,1979 Accounting
- Accounting
- Inflation Effect During 1979 on Capital investment:
Increase in specific prices to cu ent costs" 227,317 Effect of change in general price level (277,202)
Reduction to net recoverable cost **'
(133,197)
(77,361)
Additional provision for depreciation (17,873)
(23.824)
-(151,070)
(151,070)
Gain from decline in purchasing power of net amounts owed (primarily debt) 85,138 85,138 Effects of Inflation on Stockholderf Equity (65,932)
(65,932)
- Constant Dollar and Current Cost values are based on average 1979 dolbrs.
"As of December 31,1979, current cost of property, plant and equipment, net of accumulated depreciation was $2.457.613.000.
l while the historical cost (net recoverable through depreciation) was $1.355.898.000. which includes non-utikty plant of $1.015.000 and abandoned project costs transferred to Deferred Charges of $45.719.000. At year end, the net recoverable cost of net assets is
$552.560.000. as calculated under Constant Dollar and Current Cost Accounting.
l
- " Including the reduction to net recoverable cost the Earnings (Loss) on Common Stock on a constant dollar basis would have been ($ 106.369.000).
20
The erosion in the value of money through inflation electric utilities. The following statement presents has been at or near the double digit level during selected or.erating and financial data for the most the last five years. The cumulative effect of recent recent five years on a historical cost basis and annual rates of inflation have had substantial adjusted for inflation as measured by the Con-impact on all sectors cf the economy, especially sumer Price Index for all Urban Consumers.
Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices Consurner Operating Revenues Cash Dividends Declared Market Value at Year End Per Share Price (thousands)
Per Share Index
- Historical Restated Historical Restated Historical Renated (Annual Cost to Average Cost to Average Cost to Average Year Average)
Basis 1979 Dollars Basis 1979 Dollars Basis 1979 Dollars 1979 217.4
$365,121
$365,121
$2.20
$2.20
$17.50
$17.50 1978 195.4 340,056 378,343 2.14 2.38 21.63 24.06 1977 181.5 276,794 331,543 2.12 2.54 25.13 30.09 1976 170.5 223,736 285,280 2.12 2.70 26.50 33.79 1975 161.2 191,564 258,350 2.06 2.78 24.38 32.87
- Base Year 1967 = 100 Auditors' Report To the Shareowners and Board of Directors of The Toledo Edison Cornpany:
We have examined the balance sheets and state-In our opinion, the financial statements referred ments of capitalization and capitalization ratios, to above present fairly the financial position of and long-term debt of The Toledo Edison Com-The Toledo Edison Company as of December 31, pany (an Ohio corporation) as of December 31, 1979 and 1978, and the results of its operations 1979 and 1978, and the related statements of and the source of funds invested in plant and-results of operations, earnings reinvested, Federal facilities for the years then ended,in conformity income taxes and source of funds invested in with generally accepted accounting principles plant and facilities for the years then ended. Our applied on a consistent basis.
examinations were made in accordance with gener-ally accepted auditing standards and, accordingly, Arthur Andersen & Co.
included such tests of the accounting records and such other auditing procedures as we con-Toledo, Ohio, sidered necessary in the circumstances.
January 28,1980.
21
Fin:nci:1 R; view OPERATING REVENUES thousands of dollars and percent of electric revenues denCi drZi industrias other E ectne Cas He g e n iner ese v ar 1979 113 464 32 72 354 20 128 931 36 43 958 12 358 707 3 583 2 831 365 121 7
1978 106 512 32 67 563 20 120 570 36 39 438 12 334 083 3 085 2 888 340 056 23 1977 86 977 32 55 870 21 97 586 36 31 296 11 271 729 2 743 2 322 276 794 24 1976 71 562 33 45 384 21 76 998 35 25 185 11 219 129 2 315 2 292 223 736 17 1975 61 236 33 39 566 21 64 767 34 21 803 12 187 372 1 924 2 268 191 564 30 1974 46 590 32 30 566 21 49 203 34 17 868 13 144 227 1 901 1 667 147 795 14 1973 40 696 32 27 390 21 43 632 35 14 697 12 126 415 1 682 1 050 129 147 9
1972 37 055 32 24 698 21 38 013 33 16 001 14 115 767 1 619 1 196 118 582 14 1971 32 071 32 21 194 21 33 838 33 14 599 14 101 702 1 531 1 131 104 364 11 1970 29 952 33 18 721 20 29 442 32 13 674 15 91 789 1 431 925 94 145 7
1969 27 663 32 16 919 20 28 194 33 13 108 15 85 884 1 314 877 88 075 10 OPERATING EXPENSES thousands of dollars and percent of total revenues
[n"e lln*ge$
Ed rederai Totat LoaNaes aEs pYne!
tf Year Fuel
% Operation nce 4 Depreciation %
1979 93 295 25 53 574 15 44 691 12 21 137 6 29 117 8 29 760 8 25 139 7 296 713 81 1978 82 039 24 55 850 16 38 883 12 19 604 6 26 532 8 24 320 7 27 397 8 274 625 81 1977 73 677 27 86 735 31 27 951 10 12 249 5 19 565 7 19 129 7
6 173 2 245 479 89 1976 61 227 27 46 950 21 26 612 12 9148 4 15 964 7 15 956 7 12 446 6 188 303 84 1975 51 411 27 32 328 17 25 059 13 7955 4 14 305 8 14 091 7 13 062 7 158 211 83 1974 40 648 27 20 077 14 23 160 16 7677 5 13 089 9 12 922 9
5 081 3 122 654 83 1973 27 697 21 14 810 12 22 098 17 7 471 6 12 318 10 11 822 9
8 040 6 104 256 81 1972 23 721 20 13 959 12 20 097 17 6799 5 11 778 10 10 513 9
8 209 7
95 076 80 1971 21 573 21 8 643 8 18 306 17 6700 7 10 617 10 10 075 10 7 755 7
83 669 80 1970 16 885 18 6 934 7 16 085 17 6082 7 10 232 11 9 427 10 8 568 9
74 213 79 1969 14 370 16 5 983 7 14 403 16 5390 6 9 838 11 8 499 10 10 555 12 69 038 78 INCOME thousands of dollars COMMON STOCK dollars per share and percent AHowance 0" "
Market Dividends o'sr/o""An'gA'X %fo"'I T"
17,7 **"
RTni pre,e, red
- a08 ' "Jn"" *@2 c"C;;!
c"O;;;
inE!,'ne ofa% C "Jf" !a",'Ts e"3"ty nign to. e?o' vToi 5%>
ir
- vea, 1979 68 408 33 503* 8 251 111 179* 52 584* 58 595 13 894 44 701 2.65 10.7 23 17 17 24.15 2.20 1978 65 431 24 560* 6 484 97 195* 42 746* 54 449 13 020 41 429 2.78 11.3 26 21 22 24.29 2.14 1977 31 315 43 564* 9 032 83 904* 35 249* 48 655 10 518 38 137 2.95 12.4 27 24 25 24.02 2.12 1976 35 433 24 457 6 087 67 923 28 460 39 463 7 683 31 780 2.82 12.2 27 22 27 22.85 2.12 1
1975 33 353 20 458 5 820 59 453 24 071 35 382 7 135 28 247 3.29 14.5 24 16 24 22.39 2.06 l
1974 25 141 15 886 4 323 45 554 20 904 24 650 4 964 19 686 2.85 12.5 28 15 16 21.73 2.00 1973 24 891 10 282 2 294 37 694 14 126 23 568 3 911 19 657 3.13 14.3 31 23 27 22.20 1.94 1972 23 506 4 458 1 004 29 058 9 972 19 086 2 650 16 436 2.91 14.5 32 26 30 20.44 1.86 1971 20 695 2 672 562 24 038 8 754 15 284 1 675 13 609 2.64 14.4 36 27 31 18.39 1.81 1970 19 932 1 050 264 21 397 6 555 14 842 1 333 13 509 2.62 14.9 35 28 35 17.68 1.74 1969 19 037 701 142 19 974 5 515 14 459 1 333 13 126 2.54 15.3 36 26 29 16.80 1.63
- In the 1979,1978 and 1977 Results of Operations.the allowance for fundsused duringconstruction is reported in two portions, equity and bcrrowed. with the borrowed arnount shown as a credit to interest charges.
" Average nurnber of shares outstanding (thousands): 1979 -16,848; 1978 -14.900; 1977 - 12.909: 1976 - 11.250;1975 - 8.596: 1974 -
22 6.917: 1973-6.282: 1972-5.649; 1969 through 1971-5.160.
St:tistical R::, view SALES millions of kilowatt-hours CUSTOMERS end of year USAGE residentgl
^"C
Ye'l "'Ee""'
n denQ m# frei Indusinai other EIe<'t$c incr7as.
Commercial Y$U( _
Ia sf veer Pesidentian E ect c Cus mer (Ce s 1979 1 934 1 256 3 559 960 7 709 238 353 23 636 3 695 265 684 8 166 5.87 479 1978 1914 1 231 3 617 923 7 685 3
234 450 23 334 3 551 261 335 8 244 5.57 459 1977 1874 1 233 3 475 906 7 488 4
230 583 23 226 3 478 257 287 8 192 4.64 380 1976 1 782 1 203 3 394 843 7 222 8
227 167 22 912 3 428 253 507 7 903 4.02 317 1975 1 722 1 156 3 011 769 6 658 2
223 807 22 495 3 340 249 642 7 732 3.56 275 1974 1 634 1 107 3 062 739 6 542 (1) 221 846 22 360 3 249 247 455 7 419 2.85 212 1973 1 552 1 102 3 232 705 6 591 3
218 105 22 591 2 927 243 623 7 187 2.62 188 1972 1 460 1 014 3 062 885 6 421 9
213 546 22 471 3 015 239 032 6 916 2.54 176 1971 1 366 924 2 757 832 5 879 7
208 448 21 984 2 963 233 395 6 640 2.35 156 1970 1 281 838 2 557 831 5 507 (1) 203 808 21 313 2 939 228 060 6 348 2.34 148 1969 1 181 766 2 647 960 5 554 12 200 058 21 069 2 924 224 051 5 967.:.34 140 LOAD megawatts ENERGY millions of kilowatt hours FUEL Net Capabihty Toiedo Edison System Purchased Power Efficiency Lead Facto CAPCO Pur ha ed Cr Fuel Cost BTU l'n'd
^l A"'l E:0
ff'
R;"
3*"sa'"
'" [C" "
%'e%"
b
- vea, Poo Total 1979 1 884 1825 1 395 67 31 6 884 465 883 8 232 1.33 10 262 1978 1892 1 813 1 386 67 31 6 674 582 984 8 240 1.20 10 283 1977 1 777 1 536 1 393 66 10 5 972 1 548 580 8 100 1.19 10 247 1976 1 465 1 465 1 340 66 9
5 421 1 644 750 7 815 1.11 9 963 1975 1 410 1 397 1 256 64 11 4 877 1 371 856 7 104 1.04 9 982 1974 1 412 1 453 1 249 64 16 5 259 1 061 676 6 996.
.75 10 065 1973 1 510 1 358 1 246 64 9
5 376 969 701 7 046
.52 9 880 1972 1 377 1 273 1 096 68 16 5 036 616 1 221 6 873'
.47 10 030 1971 1 295 1 228 1 054 65 17 4 845 168 1 267 6 280
.44 10 037 1970 1 244 1 217 939 67 30 4 604 1 275 5 879
.36 10 022 1969 1 204 1 175 897 69 31 4 764 1 142 5 906
.30 9 899 INVESTMENT thousands of dollars CAPITALIZATION thousands of dollars Accumulated Accumulated O precYa sr e n
s of Co ser on ock Of r fe r Of Te Of Year t yr. End) iYr. End)
Plant Empenditures Equity Total Stock Total Debt Total Total 1979 979 809 201 895 21 239 010 432 554 35 184 000 15 611 137 50 1 227 691 1978 950 873 176 450 19 169 888 382 084-35 159 500 14 560 644 51 1 102 228 1977 727 226 153 463 21 194 283 328 100 34 160 000 16 494 280 50 982 380 1976 531 459 137 540 26 144 714 266 469 34 125 000 16 388 270 50 779 739 1975 479 723 126 149 26 112 399 216 277 33 100 000 15 349 181 52 665 458 1974 438 639 116 062 26 121 360 177 296 32 81 000 14 299 172 54 557 468 1973 407 195 108 467 27 119 524 145 665 31 71 000 15 259 164 54 475 829 1972 387 874 100 305 26 75 278 117 745 33 56 000 16 183 969 51 357 714 1971 367 918 95 589 26 53 056 94 908 33 41 000 14 154 687 53 290 595 1970 344 898 92 957 27 34 762 91 211 33 31 000 11 154 952 56 277 163 1969 327 998 86 301 26 18 549 86 680 36 31 000 13 120 781 51 238 461 23
7 -_ - ____ -
I I.
l Management Staff 1
~
]
i s
.--y--
.m 4
]
.[
I N
P-
)
Donald G. Nicholson
~
i Finance David A. Nelson Corporate Development
,==*,
I i
J H
F rank W. Keith Lowell E. Roe l
G, Administration Energy Supply y
s 7
'l I1
{ l.
i david K. Zaski l
Custorrer Services s
John R. Dyer Public Relations i
1 Donald H. Saunders s
Richard P. Crouse Treasurer Nuclear s
l l
l Stratman Cooke Lyman C. Phillips Paul G. Busby Secretary Administrative S*rvices Controller l
Management Changes l
In order to further enhance the efficiency of the management structure there were i
several executive changes made in 1979. On April 24, the BJard of Directors elected y-John P. Williamson as Chairman of the Board. Mr. Williamson continues in his role T.n as Chief Executive Officer. He was succeeded as President by Wendell A. Johnson, EN formerly Executive Vice President, who will serve as Chief Operating Officer for the Company.
Richard P. Crouse was elected Vice President for Energy Supply on August 29 3
following the untimely death of James a. Grant. On November 30 the Company re-aligned and consolidated all of its nuclear operations under Mr. Crouse who was then designated Vice President, Nuclear, and elected to the Board of Directors. Mr. Crouse was formerly responsible for the operation of all our coal and nuclear plants. He will now concentrate on the operation and back-up engineering for the existing Davis-Besse Nuclear Plant.
At the same time Vice President Lowell E. Roe's responsibilities were shifted from Mrs. Isabel Martin of Toledo Facilities Development to Energy Supply. Mr. Roe was formerly responsible for the was elected to our Board of Di-design and construction of all new nuclear and coal plants. He will now concentrate rectors in November,1979. Mrs.
on the operation of our coal plants and transmission system. Mr. Roe has been a Martin has been one of our area's member of the board since 1975.
outstanding civic leaders for more John R. Dyer was elected Vice President, Public Relations, on August 1, succeeding than twenty years. She currently John H. Barker, who reticed.
serves as consultant to the metro-Effective December 1. Frank W. Keith, Vice President, Personnel, was designated politan division of the Greater l
Vice President, Administration. Mr. Keith will be working to further develop a set of Toledo (.inited Way. As an officer general corporate policies, coordinate special management studies, and act as the and board member of many or-executive assistant to the chairman's office.
ganizations she possesses the in-Donald H. Saunders, formerly Controller, was named the Company's Treasurer sight into human needs which will on February 28. Paul G. Busby, formerly Accounting Analyses Director, replaced Mr.
prove particularly valuable to your Saunders as Controller.
Company.
24
Board of Directors Officers (Other than Directors)
Floyd M. Canter (C)
John R. Dyer Dividend Reinvestment Agent Executive Vice President, Retired Vice President, Puuic Relations Gtibank, N.A Owens-lllinois,Inc.
Box 3305 (Packaging)
Frank W. Keith New York, N.Y.10043 Vice President, Administration Samuel G. Carson (E)(O)
Stock Registrars Chairman of the Board David A Nelson The Ohio Gtizens Trust Company The Toledo Trust Company Vice President.
Toledo, Ohio 43603 Corporate Development Manufacturers Hanover Trust Richard P.Crouse Company Vice President, Nudear Lyman C. Phillips New York, N.Y.10022 Vice President, Robert H. Davies (C)* (O)
Administrative Services Mort ge Trustee Senior Vice President.
The se Manhattan Bank, N.A Owens-illinois,Inc.
David K. Zaski New York, N.Y.10081 (Packaging)
Vice President, Customer Services Auditors Elwood L Elberson(A)
Arthur Andersen G Co.
President and Stratman Cooke 300 Madison Avenue Chief Executive Officer Secretary Toledo, Ohio 43604 Dinner Bell Foods, Inc.
Donald H.Saunders Counsel Virgil A,Gladieux(E)
Treasurer Fuller, Henry HodgeGSnyder Chairman of the Board and 300 Madison Avenue Chief ExecutiveOtficer Paul G. Busby Toledo, Ohio 43604 Gladieux Food Services, Inc.
Cmtroller Exchange Listings Wendell A Johnson (E)
Common President Annual Meeting
- New York Stock Exchange
- Midwest Stock Exchange Marvin S. Kobacker (E)
The annual meeting of The Toledo Edison Amsterdam Stock Exchange Vice Chairman of the Board, Company will be held at 10 AM. (E.S.T.)
Kobacker Stores, Inc.
on Tuesday, April 22,1980 in the Company's Unlisted Tradi Privileges and Private investor headquarters, Edison Plaza 300 Maidison
+ Boston St Exc1ange Avenue, Toledo, Ohio. Formal notice of the
- Gncinnati Stock E xchange Isabei F. Martin meeting will be sent t J1areowners with
- Detroit Stock Exd.ange Consultant the proxy statement.
. Philadelphia, Bait more and United Way of Greater Toledo Washington Stoc : Exchange This report, induding the financial state.
Preferred-$25 par value-8.84%,$2.365 e dent nce ments, is submitted for the general in-
. New York Stock Exchange Henry A. Page, Jr. ( A) formation of Toledo Edison Company,s Director of Development, shareowners. It is not intended to be used Preferred-$100 par value-4%%,8.32%,
Medical College of Ohio in connection with any sale or purchase of 7.76% and 10%
at Toledo any securities.
American Stock Exchange Lowell E. Roe A copy of Form 10-K as filed with the Bmds Vice President, Securities and Exchange Comrnission will be available to shareowners uoon written 0 -Due 1982.935% -Due 1985 Ene'9YSupplY request to the Company's Vice President, 9%-Due 2000,7h% -Due 2002 Ill (A)*
Finance.
8%-Due 2003,9.65% -Due 2006 WillardI Webb' Board, 9%%-Due 2008,11% -Due 2009 Chairmanof the Key to Directors' Committees
. New York Stock Exchange The Ohio Grizens Trust Company
( A) Audit Committee John P. Williamson (E).
(C) Compensation Committee Chairman and (E) Executive Committee Chief ExecutiveOfficer (O) Operations Committee
( * ) Committee Chairman About Toledo Edison Robert G.Wingerter (C)(O)*
Chairman of the Executive Committee Executive Offices The Toledo Edison Company is a Libbey-Owens-Ford Company 300 Madison Avenue public utility engaged primarily in (Flat Glass)
Toledo, Ohio 43652 the generation, transmission, dis-Phone (419) 259-5000 tribution and sale of electric energy in Toledo and Northwestem Ohio, Dividend Disbursing Agent covering an area of approximately The Toledo Trust Company 2,500 square miles, with an esti-
, Ohio 43603 mated population of 750,000. The StockTransfer Agents Company also provides relatively William S.Carlson The ToledoTrust Company small amounts of natural gas and l
Director Emeritus Toledo. Ohio 43603 steam heating services.
Morgan Guaranty Trust Fred E. Fuller Company of Netv York Director Emeritus New York, N.Y.10015
.}