ML19323C824
| ML19323C824 | |
| Person / Time | |
|---|---|
| Site: | Trojan File:Portland General Electric icon.png |
| Issue date: | 03/31/1980 |
| From: | PORTLAND GENERAL ELECTRIC CO. |
| To: | |
| Shared Package | |
| ML19323C817 | List: |
| References | |
| NUDOCS 8005190259 | |
| Download: ML19323C824 (38) | |
Text
troo$190 L N O
HIGHLIGHTS g
increase 1979 1978 (Decrease)
Operatag revenues.
S 349,981,000
$ 303.678.000 15.2 income before cumulative effect of change in accounting policy 46,122,000 48.784.000 (5.5)
Nstincome S
46,122,000 56.629.000 (18.6) l Income available for common stock 32,292,000 42.454.000 (23 9)
Earnings per average common share-Before cumulative effect of change in accounting pohcy
$1.06
$1.40 (24.3)
Cumulative effect to January 1,1978 of accruing estimated unbilled revenues -net
.32 Earnings per average common share.
$1.06
$1.72 (38.4)
Dividends paid per common share
$1.70
$1.70 Net utility plant
$1,658,797,000
$1.482.862.000 11.9 Gross utility construction expenditures.
$ 254,289,000
$ 278.265.000 (8 6)
Kilowatt-hours sold (in thousands) to ultimate customers 13,139,000 12.132.000 83 Customers served at year end.
478,971 460.698 4.0 Average kilowatt hour use per residential customer.
13,814 13.459 2.6 Noticeif' Annual Me'eting
^
Service Area Map Inside Front Cover The annual meeting of stock-Highhghts 1
holders will be held at the Port-Report to Shareholders 23 land General Electric Company Area Growth 4
Service Center. 3700 S.E 17th Financial Review 5
Avenue. Portland. Oregon. May Conservation 6
14.1980, at 2:00 p m Construction 79 Power and Fuel Supply 1011 Financing and Rates 1213 Research 14 People' Activities 15 The Future 16 Management's Discussion and Analysis of Statements of income 18 Consolidated Statements of Income and Retained Earnings 19 Consokdated Balance Sheets 20 21 Consohdated Statements of Capitalization 22 Consohdated Statements of Changes in Financial Positior' 23 Notes to Financial Statements 24-31 Report of Independent Pubhc Accountants 31 Supplementary Information to Disclose Effects of Changing Pnces 32 33 Elsysn-Year Summary 34 35 Markst and Dividend information 36 Sznior Officers and Board of Directors inside Back Cover I:
I
- c1, H y
sioner of Oregon approved the Company's request for a power cost adjustment allowing PGE to recover in rates, up to 80 percent of the Costs for unanticipated in-creases in the pnces of ehgible fuels and purchased power. The excess costs incurred poor to the Commissioner's action were not covered; howes ar, we were able To our shareholders:
to recover $15 million. The power cost adjustment is a permanent tanff and as such represents sig-nificant progress in 1979 and an improved regulatory climate for investor-owned utikties in Ore-gon The Company onginally filed for a power cost adjustment in its general rate case filed in 1978.
but it was rejected at that time Unrecovered power costs plus unanticipated changes in operat-ing costs and conditions con-tnbuted to lower earnings per average common share of $1 T a was a year of continued growth down of the Trojan nuclear plant, in 1979, as compared to $1.72 for your Company: More custom-at a time when energy require-in 1978. Operating revenues in ers. New industry. Construction ments were increasing. The 1979 were $46 million over 1978 progress and a favorable rate de-combined effect put the Company but did not offset increased cision in January 1980. The year close to being unable to meet all expenses also had problems: Ice storm its load demands by the end of To improve its earnings, PGE and poot hydro conditions. Three December.
filed for a rate increase in June Mile Island. A Trojan shutdown.
Trojan was shut down in October 1979 The decision rendered Higher costs and lower earnings. for a planned two weeks for repair in January 1980 is one reason for Through it all, however, we met work on the steam generators.
our optimism about the 1980's our responsibikties to our inves-Dunng this shutdown inspections because it gives PGE an oppor-tors and customers.
revea;ed seemic design deficien-tunity for improved performance It is not a year we would like cies in some walls holding pipe by providing for:
to repeat, but the good indeed supports The Company did not B An increased authonzed al-outweighed the bad and gives us restart the plant until modifica-lowed return on common every reason to bekeve the Com-tions to walls and supports were equity to 15.17 percent from pany will continue to grow and completed and approved by the 13.84 percent.
provide improved earnings in the Nuclear Regulatory Commission. E An increased allowed rate of years ahead This required over two months of return on rate base to 11.15 January 1979 was a forewarning around-the-clock work The plant percent from 10 53 percent.
of things to come when a severe returned to service on December 5 An additional rate increase ef-ice storm gnpped the Portland 31,1979.
fective in July 1980 to recover area, causing servict Jisruption With low hydro conditions and costs associated with Bon-to 125,000 custome-1 spite of Trojan off kne we operated our neville Power Administration's extreme cold and c.c;lt working three combustion turbine plants recent rate increase which conditions. PGE employees with and had to purchase and borrow went into effect December 20.
help from other utikties, restored power from other utilities. As the 1979 electncal service within a few weather became colder and E An additional rate increase days. The cost of restoration and loads increased, power became later in 1980 when the system damage was approxi-increasingly expensive. At times.
Boardman coal plant becomes mately $4 milhon, offset by $2.5 excess power costs exceeded operational.
mill on of insurance recovenes.
$700,000 per day For the penod i
Two events caused even greater of August through year-end, the While demonstrating awareness difficulty in 1979: (1) an unusually Company incurred excess power on the part of the Comm+sioner dry sprino which left regional costs of approximately $60 that any investor-owned electric reservoirs well below normalin million.
utikty is a nskier business than in the fall months, and (2) a mid-In November, after pubhc hear-the past, the rate decision does October through December shut-ings, the Public Utikty Commis-not entirely alleviate our financial h
I h
4 EGON-c healthy, from its 1970 level of 172,000 to vital and Civersified 227,000 in 1979-or 32 percent.
I matkot which keepo And in the Portland metropohtan going and growing. Serving area, wheia most of PGE's more than one million people, customers are located, manufac Portland General Electnc tunng emoloyment climbed 6 3 Company is the state's largest percent between 1978 and 1979, l
supplier of electncity. Customer non-manufactunng jobs were growth has exceeded 43 percent up 2.6 percent.
in the last decade. Oregon's retail Diversity is the watchword.
sales hit an estimated $d5 bilhon Lumber, pulp and paper, and Load demands up 8.3 per.
in 1979 and median family in-wood products lead the list with cent over previous year. As come was $18,000. Our market 40 percer't of the manufactunng of December 31, PGE served l
profile is good.
employment. Food and kindred 478.971 customers. Of the total, Population up 22 percent in products account for 13 percent, 423,389 were residential and I
Gromng to eene Tekt onen, Inc '
last decade. The entire Pacific while instruments and electronics 55.582 were commercial-Oregon a sargest ynNoyer eth Coast region exponenced excel-is a rapidly growing area with 16 industnal and other non-Yth$Yae'r'sj lent growth in the 70's, and in the percent. The balance is spread residential. Total 1979 electncal ver wide range of industnes.
use by ultimate customers in-Manager of Custmer Fieid ser. '
majonly of those years Oregon's aces-Western Dmsson TEK Of course agnculture stillis an creased to over 13 bilhon kilowatt F,',,M,,,y a Oregon mainstay, and the Port hours, or an 8.3 percent increase l
s h
n the h gh any s te tesongananufacture, desgn and bordenng the Pacific. Population of Portland is the gateway to over 1978 This substantially ex-the Pacific Rim area and is ceeds the average load growth I
thode raf is up 22 percent, ranking 29th in wth 0'C*
- rea m contnueto state size with its 2.5 milhon resi-thelargest export port on the rate of 3 percent which has been West Coast.
mnenW on the system since V
dents. Out-of-state visitors spent N.
an estimated $980 milkon in 17,458 new residential 1973. Stokes and a sluggish
~
1979, and history demonstrates customers connected-economy slowed the growth rate
- g-
. ' hat many of them will retum 68 percent choc 4 electric in 1978, thus 1ccounting for this k
to hve here. Migration assures heat. New housing continued at sizeable 1979 " recovery year" in-
=-
market growth.
a healthy pace with the 17,458 crease While there may be some
-/*'**
W
' ~
.. ' [= =>
. p ' 4,g'44..
Employment continues to new connects in 1979 represent-conhnued above-normal growth in the next two years the average I (..,...j(
rise-industries varied.
9 ou a s i
n rate between 1980 and 2000 is
=.# = g Oregon's growing economy is not g
forecast to be about 3 7 percent s.,
captive of one or two industries.
10 percent from 1978 whsch was W',. ~;y
- g,,,
Thus even with the lower growth
~j^!
Non-agncultural jobs increased the second highest year expen-
=l 7
y,,6;:
Pom 709,000 in 1970 to 1,051,000 enced Newcustomerscontinue emeW m qmW resent and future customers to a -.
~ '
in 1979-a gain of 48 percent.
to demonstrate their preference
_ ;_ y Manufacturing employment rose for electncity, with 68 percent of double the demand on our sys-
- 1...-
the 1979 residential additions tem by the Year 2000-3
<%;, y,.*(.
Njg selecting electnc heat and 70 q p.,,
ig G. ; 3.T 4 Li
. percent electric water heating.
~ vi+g p.g, fE 1.g,, m:
.., 4 y 4 "T N,,,W -
However, as electncal energy gg},
W., Yc,.
=
supply concems mount and natu- :
~
e y..
( e, 8,.. - ar ralgas supolies increase in the
[
+
'N-j.;[{- '
1,. % J
+. '.. '..g : (
region, there is a noticeable trend ':
in new construction toward gas
+.m
~i-
+
1, y.6
?..,7 4..
space heating and water heahng,
/-.,
despite its increasing cost. In
- .g p
' "r i.l. ' J g..
s' view of the 1979 supply problems X..
k
..c
.a 4
t
-J the Company did not discourage
. ' g ipg,I T
' % gir.
p that, and the Pubhc Utikty Com-h.
missioner of Oregon has sched-
.1, 2 1 _ _..
1-
]Q.yd p,,
j
= uled a generic public hearing later 4. ~ f g
j in 1980 for consideration of the
- f 2
t^.
- 7. '.
desirabihty of banning new resi-
,4 cential electnc heat irttallations T'
, ~ #^
or imposing a special hookup
~
g 19 charge. We do not believe a ban
- .m
- e 3
... i T
, ?
would be in the best interests of i
~
"g
~
the pubhc; however, a hookup e..
y c
charge which more clearly re-
+
y f
N d
h'.
h h.k ~ flected the cost to service new residential heat load might be
' determined appropriate.
.3
.r
~.
xk' 4_
g L
~
g
(-
}y t
+-
4
(
4 j
m,
.c v
9
,4
~
g f
w x
y,
r.
1 k'
I
\\',
7 A '
U
,.f.,
e V'e
+
c,.
=
w#
..=
~
difficutties. The decision does and cost increases be ng expen-emphasis wiil be placed also c, enable our residential and rural 3
give us an improvej opportunity enced in the construction of the those load management and customers to save up to 15 per-to oparate and manage the Washington Public Power Supply conservat:on programs which cent on power costs Company m a planned, cost-System (WPPSS) nuclear unit # 3 promise to be less cust!y than it is with regret that we inform you consc ous. effective manner.
of which we own 10 percent building new generating facihties that V:ce President and Secre-In 1979. Portland General Elec-Conctruction has not starteJ as In addition. the northwest utikties tary. H H Philhp1 nassed away t ic added 18.273 new customers, planned on the Skagit nuclear are discussing ways to coord'-
in August Mr Philkps goined the and energy sales to retail cus-project sponsored by Puget nate the timing and construction Company in 1970. having previ-tomers totaled more than 13 bil-Sound Power & Light Company of gerierating plants ously served us as a partner in a kcn Mowatt hours. PGE's service with PGE as a 30 percent owner.
We fully recognize there are private law firm He served the terntory continued to increase in and appears to be delayed those who would obstruct all new Company well population and diversity with the another two years or more energy development and will turn location of major electronic firms Finally. PGE has rescheduled their efforts toward this end En-2.800 people who are your com-in the area and conuruction of a completion of the first unit of the vironmental and regulatory de-pany will do what needs doing number of new high-nse office Petble Spnngs nuclear project lays are also associated with the They are our most valuable re-buildings until sometime early in the mining and buming of coal. and source in providing the rekable The difficulties of the last several 1990's. Two years ago we felt the there is an obvious need for ex-years have demonstrated that the unit could be operating by 1987 pansion of existing national oh" s
n n e
economic charactenstics of the but that is unrealistic in today's transportation systems Coal ex-s WW H M M environ ient pansion will not be without prob-utshty industry have changed en ean hg tM WM of from the 1950's and 1960 s when The accident at Three Mile Island lems. but it must be achieved W la M n a M W costs were relatively stable, rates in the spong of 1979 had a signifi-The Northwest Regional Energy lence. but they have steadf astly to consumers were dechning and cant impact on the nuclear indus. Bill passed the Senate in Sep-met the challenges returns to investors were consis-try This accident. Combined with tember 1979 and is now before tently satisfactory In the current continuing licensing delays the House This legislation would As you read the balance of this inflationary environment. sustain-caused us to reevaluate PGE's enable the residential and rural report and review our existirig ing investor returns while provid-resource strategy. The electnc customers of investor-owned plant and firm power resources.
Ing the necessary and expensive power industry must take these utihties to share in the low cost our Construction progress. the resources adequate to serve nuclear operational ano safety power marketed by the Bonneville favorable rate rehef. and our plans crowing demands is possible only concerns senously, recognizing Power Administration r.vell as for the future. we believe you will f regulation is anticipatory and that any energy resource must estabhsh other mechu asms for share our confideace for the 80 s accurate We therefore recognize have pubhc support to meet both efficient use of energy resources We appreciate your continued that to meet our responsibihty to service and financial objectives in the Nochwest Passage would support and trust lavestors and customers. PGE Although we beheve nuclear
~~
h [ f.y
[
., h must impose financial as well as power mil play an important part
< JU,44 %
service objectives on resource in meeting the future energy T
[ P*g ~
- 7r Qg/
and corporate strategies. Im-needs of Oregon and the nation.
proved load forecasting, genera-we. iike many other utthties in the
,y.g y
tion planning and budget controls nation. foresee substantial delays
',../
d.i. ' ~
are essential We are implement-in the kcensing of planned nu-
'. :A ~.
. f
. we g Vgg.-
ing those improvements now clear plants in the region.
y e
s Construction of the coa!-fired With the addition of the Board-1 power plant near Boardman.
man unit in 1980 the Company Oregon has tracked well with both should have adequate energy schedule and budget The 530-supphes until about 1985 How-y 7
~
megawatt plant. 80 nercent of ever. with the rescheduhng of N
whd G woed by PGE. is pro-previously planned nuclear jected to be in commercial opera-generating additions. PGE must
~
tion in August 1980. Currently, we turn to other resources to meet i*
C ~
~
N
' ~
are stockpihng coal transported trie needs of customers in our The Company owns 20 percent To meet the requirements of
~
,Q.
Y.'
by rai' ' rom Wyoming service area beyond 1985 s
7 r
of each of the 700-megawatt our customers after 1985. we are C'
~
[""
units 03 and #4 at the coal-fired considenng new generating Colstnp project in eastern Mon-facihties including an additional tana Necessary approvals from coal unit at the Boardman site Frank M Warren Robert H Short state and Federal agencies were and participation in a coal plant to Chairman of the Board President received in 1979 and the units are be sponsored by The Washington now under construction. Comple-Water Power Company Addi-tion of both units is presently tional hydroelectnc projects at March 1980 scheduled for 1984.
Bull Run. the Pelton regulating Progress in nuclear construction dam and Willamette Falls are remains slow. There are delays future possibikties. Increased
(
5 i
}
igher power costs gether with higher costs of fossd decrease not income. fuels and purchased power, The Company's net income resulted in excess power costs dechned from $57 mdhon in 1978 of approximately $60 mdhon.
l
'o $46 mdhon in 1979, a decrease Of this amount, $15 milhon was of 19 pctcent. Earnings per com-recovcred under a permanent mon share fell from $1.72 to power cost adjustment tanff
$1.03. Total operating revenues granted by the Pubhc Utikty were $350 mdlion in 1979, an in-Commissioner effective No-a crease of $46 milhon, or 15 per-vember 15,1979. Although this cent over 1978. The increase was tanff will enable the Company to attnbutable onmarily to an 11.6 recover a significant portion of percent rate increase granted in excess power costs in the future, January 1979 and in part to an in-it does not apply to costs incurred crease in kdowatt hour sales. In pnor to that date.
addition, allowance for funds dividends to common and pre-non-taxable as dividend income used dunng construction (ADC)
Dividend policy main-ferred stockholders of $50 8 for Federalincome tax purposes.
increased sharply as a result of tained. The Company's Board mdlion and $13.9 milhon. On These figures are subject to final l
higher interest rates and con-of Directors and management February 6,1980, the Board of determination by the Internal struction levels.
recogn'ze the importance divi-Directors declared a quarterly Revenue Service. Share Jers The above increases in revenues dends play in the stockholders' commm. teck dividend of 42b who have questions concerning and ADC were more than offset investment decisions. Your Board cents per share payable Apnl 15, this matter should contact their by the Company's inabihty to of Directors intends to maintain a 1980. This is an indicated annual tax advisor.
recover rapidly escalating power sound and forward-looking divi-dividW of $1.70 per share Dividend reinvestment plan costs. The combination of poor dend pohcy. This is borne out by Stockholders have been notified participation continues to hydro conditions beginning in the fact the dividend has been that 100 percent of the 1979 grow. Participation in the Divi-August and the o'Jtage of the maintained dunng the last three common stock and preferred dend Reinvestment and Common Trojan nuclear plaat from mid-years of adversity.
stock dividend payments repre-Stock Purchase Plan continued October untd December 31, to-During 1979, the Company paid sent a return of capital and are to increase this year. As of De-4We> ' '
~
' ~ '.
cember 31,1979 approximately r......r:.syp>dp[h(1f4d.,..y' I '.b', f', I [1,.
,/ '
- 14,000 shareholders participated
/ ;,.g p J.rq g yde :
N mdhon dunng 1979-an increase
,'gt'[(.(.
. :,h '. "
,,7
~.
.1-in the plan. They invested $7.2 j
V ,^1,,w
- of 57 percent over 1978.
."J
]p. 7 j. '
.3
[..:.g > -,.-
2
,'f,,,,
l<'
>. 7
~>
~-1 Through the plan, common and 4
y
+
preferred stockholders of record i
j,.
n have the opportunity to automati-
'y ( " '
'k;,
'.c "*
?
.,J.
'% cally reinvest their dividends for 3;
.fJ"
'...i 1 -
y
. - additional stock purchases. The
.,f
-<(.
.t-
- y.-
/.: plan also allows shareholders to
.- (,,,.,, 1 i.:
. invest up to $5,000 cash per 9,'
l
{-
t."
,'c'
,'f 1 - g-t..
i calendar quarter for direct pur-
,y
,.1 Chases of additional shares of u.
s,
- ' ~ *
~ "
(
. common stock. Participants incur g.
li-
.'. l { ?
- ggng
,p.oy gage no commission or other charges
]
s t h.wmwanwak h.i
- since the shares are purchased i.', '. : ' ' ? (' p pY fg yE gig %w; - -
di ly f the C mp y j
- '... ?.
'.(
- ip
~. -
TV " C ~"
~~ 1
(
?
~
.-.E.. 1 l
cepted at any time. Shareholders F giME
'~, ' wishing further information
(. y g f,.J.
,c,
..g c J. ; ' " y,. 4 ' py-
' f F *WWWF-'-
should contact the plan agent, i
,'l... <..
J.
-e ( x. ;. 1
+ -
hg
~
U.S. National Bank of Oregon, j
t.., ?
D..
j e.
- m.
. - '.. y,p" *. c -
m.:
P.O. Box 3850, Portland, OR 1
l-
.i ' -
- .e l'
l.
~
.. 2
? 97208,(503)225-6474.
,4 i
-l
.[t
'y 4 ' 4
-eeu
.g Y
S
~ * " -: '-
L.. ~ L = L-.
.J L L.
6 The Company's no-interest, de-ferred payment program permits weathenzation work by owners of electncally heated residences to be done now and payment for the work to be made when the dwell-ing title is transferred or when electre service is terminated.
Schools and I usinesses receive extra conservation attention. An aggressive effort to encourage conservation in the commercial, industnal and M bsphind PGEs M Doner, educational sectors is underway Customer Field Servces Repre-sentenv,oregoncnyDwson.
Company Energy Management Opinion surveys have indcated crown r W
Consultants have made energy nY that tour out of five customers say audits of schools and businesses paper and has a strong nabonal PGE conservation information mars posinon in pulp and pape' and offered conservahon advice.
is helpful, and nearly 70 percent Assistance in educational pro-percent of our beheve additional suggestions m m* y _
e m.
grams for schools, involving
~ * * * > '
3 residential cus.
and reminders will also be valu-students, parents and teachers, D
temers have able. We shall continue to help is also being undertaken. Work-taken conservation ac-Company weatherlastion shops, special " parents energy I
~
tions. On page 4, in our discus-plan is expanded. Oregon is a conservation nights," class sion of growth in the service area, leader in encouraging residential programs and informational we stated that the 1979 use of energy conservation. The innova-matenals are being offered.
electricity on our system was up tive no-interest, deferred payment In his current rate order, Public 8.3 percent over 1978. It is impor-weatherization programs for Utikty Commissioner John Lob-tant to note that the Company's single family residences heating dell stated. "This coigany has conservation programs assisted electrically, which were introduced made mator expenditures to in holding the total residential
,n 1978 by the Company and place energy information before increase to a 6.8 percent level Pacific Power & Light Company its customers. In the last half of despite the high percentage of have received nationwide 1979, most of those efforts re-new electric heat installations.
attention.
lated to advising customers of the New firms movingintothe servce Since the programs were insti-need for energy conservation, area and growth of existing tuted in 1978, PGE has made and how to effect conservation.
business and industry accounted 14,684 home energy inspections. Most of PGE's newspaper, radio for an increase in use of 9.5 per-The Company has approximately and television advertising repre-cent. Many of these commercial 187,400 electnc heat customers sents, h, my view, a significant I,
customers are, or willbe receiving and by the end of February contnbution toward helping additional conservaaon and load 1980 they were all contacted in consumers make informed management attention in 1980.
wnting and offered free home au-energy decisions. I commend Past customer stuales inacated dits. The Company nas had up to those efforts.'
that approximately 86 percent of 24 inspectors making the audits.
our residential customers have Under this program additional undertaken one or more conser-weatherization has been added g
valion actions in their homes; the by 5,370 customers as of Feb-
~ 7
,N g-
=
most effective being turning ruary 1980. These investments in f; ( _.
down thermostats on heating and weathenzation are permitted in i
+
water heating units and the ad-the rate base.
g,-
dition of insulation, weather-The Company also expanded its 4
stnpping, and storm windows.
weathenzation program in 1979 4.t?
l, ~ f.
Since August 1972 the on,sany to permit partcipation by electric has provided customt.. are heating customers in multiple-than one million pieces of conser-family dweihngs, condominiums, y4 vation information. Much of this mobile homes in parks, and
'~, M. '
materialis specifically designed houseboats. Do-it-yourselfers are W.; (, s _.~T,.
1 G 6,b' [
for do-it-yourselfers.
also now qualified to partcipate.
.~
r s
gg 3' 7 b, U g i
=
gh Spgjypg3 ngclggy PGE rs a 10 perwnt petner 7
pre MSc h ied.
in the Washington Putdec Power sumiy System s 1240. megawatt After more than 7 yoars of nuaear piant ne.ng busit r.e, federal and state heanngs, the
- ""*^5h'"9'"
p
,,1 4
Company has rescheduled the 1M. J *
(,
/
i M3, g'
construction completion of our MP M
C1'
^ Y, T i'.
4
- f g. (( ; @[ {I s
two 1260-megawatt nuclear units N
iN -
i at Pebble Spongs until an early g# %
d-l 1990's time frame
.A,;.
The k>ng-delayed Pebble Spongs
[,'j';. M S /
lk t
$;p construc' ion and licensing was
- 1. s i
further delayed by the accident at
~
Three Mile Island in Pennsylva-nia in effect, until March 1980, the Nuclear Regulatory Commis-i sson,NRC) had placer) a virtual moratonum on the issuance
['
9 l
Of construction permits as a result
@F -
l Oregon legislature placed EN I k.g "
eu a
?
L-l of Three Mile Island, and the g
h j; S ~ p W 1
~~#*j
,1 a moratonum on licensing until n g[,i g,,d c ' [> >,,,.
=
- g" j
(
November 1980 Intervention by environmental
'.g megawatt units The Company s l
and anti-nuclear activists in both state and federal proceedings n 6 / g..if Y 'i
, [,4
~v current investment is 590 milLon i g(
The project is being sponsored by
,q-I has added further expense and f-
$-~
^ ' ' ' -
'N 4
Puget Sound Power & Light
)y. ' #. - : 4
- b j
prottacted delays to the project 4'
Company. which has indicated l
The Pebble Spongs project y -
g.
f: E that it intends to continue site
.x
,' [ f14%
currently represents an invest-y.,, ;. 4 evaluation and licensing proceed-y ment of more than $200 million.
- /.t.,
. - 1,.., p
.# ;.. a N7
- j ings but that expenditures will be with $113 million being PGE's T
f?f'
,9 : reduced to minimum levels
- (gj - <
("I p'*
~
.1 WPPSS # 3 power plant 471 percent share While seek-iY*.
,e',.
ing licensing appravals in 1979, 6
i a
. construction proceeding.
the Company has reduced est-j y,4 8
+/",.
4 A nuclear plant that has remained penditures on the project to
.. l 5 7
relatively unscathed from inter-minimum levels and will maintain
- . - \\ *,., ;., 1 L' f. r,,
i:,
venor problems but is experienc-minimal levels to keep various ing further delays and large cost I; censing proceedings in progress.
.+
,.y $g' ?, ; *?
.7
% g yn overruns, the Washington Public Skagit nuclear plant also N
f '
M" " ", N.
1240-megawatt # 3 plant being
, %. ( ; 7;,
Power SuppN System's (WPPSS) y d:Icysd. The uncertain regula-
. lF ' Q :.- C l
tory process at national, state,
$s, N
built near Montesano Washing-
.~
and county levels and an unf a-fi
[ 'D;
- # wJG ]
ton. continues under construc-vorable socio-political atmos-y; tion Management changes and
,y
-g&,
/
phere has resulted in a 2 to 3 year.'
1
g%hd improved cost control procedures deferral of two nuclear plants s g( %., f$w(( 1 sg s ha/e been implemented by 3
planned at Sedro Woolley.
~
p[,)NQ.,Qg PGE is a 10 percent partner in d
. WPPSS y
Washington-f The Company has a 30 percent N N.b' b sM *dn%O:.~.4
-l completion in 1985 At 1979 year-N the project which is scheduled for 4
interest in both of the 1288-
~ %%
~.
J
~
uni $UNDER; -
2 COMPANY. EARUEST'
$0F TY COMPANY Sl-
,40.5T M. ~,DAH 0F CON 5TRUCTl0N r
CAPA31 12 31J9 - OPERATION ORlPLANNE0e.
.*.o LOCATION:.
MEGAllifATTS 1NTEREST.... FUEL-00D's.
.X Boardman Boardman. Oregon 530 80 Coal
$336.056 1980 Colstnp 3rd unit 700 20 Coal Colstnp. Montana 30.164 1984 4th unit 700 20 Cnal WPPSS No 3 Montesano. Washington 1240 10 Nuclear 49.346 1985 t 1st und 1288 30 N W ear 1990@s ea 2nd unit Sedro Woolley. Washington 89.724 1288 30 Nuclear Pebbie Spnngs 1st unit 1260 47 1 Nuclear early 2nd unit gton. %on 113.380 1260 47 1 Nuclear 1990 s Agatensidien cMces'te ancien $egesesnggrargilsieribehsolNucewheninusinpMe*Ahplasmiwm!F14tthmigilheebeled 9
O
S
- v. g h
Y[w a@ wl[h[a$
N hh
. gs y m
. xq nyg ;&p ' "R
%J MT
' 'i...
{
f.
, vi p fN;;'* [/ Q.)y &m #'
f[Q
+
x
.g 2 ',
n
. 3
? ey
\\'
yn Ch $W i h ' ?? k t -. 9 g! '., ~ ' l N-w
.n jf,%"e N v'A i'
V s
,l A'^^
&glp ]' j.,
' by?%
Y 3[;+,
p ;, elpg,'7j.A l:
Y
G ps 4
i. aQ 4
.;H %. G f
3; *
,s
}
e
't c
- J f - l 2
y; ;tl41 N y.;
., ~ W 6
Q v
v !v g"f, eg s
o r
a 4
m Gromng. to serve Precesson W, known in the investment sM,pf 6 % * /, e
~
W n
.m.,
A D.-
Casting (pugriggs 33 Sie "t)ig Cast-
' ' / Iy'q ~ M-
- j,=
[.[ -
~
ings-Aca)reng to Mike i.- $ U
,,y Porter, a Orar@ Mana0er, the g;
3 p.y;fi.Q g;p e g3 q yg Company 4 a rnagor suppi.or to the s
Of, *4 C
7 fg s c6,,
s,<
aeroepecs industry wth its cast-
, Js PCC is bulle 8 74 ", 7 }.
s
~
ings tor pet *Tr"o".o*oo.o pro ng o
[
.n.oeison.
% m*
c-fy Q
^
f,] '
backlog
' N N. ::.l.
f l
b g,
1;
- - 'm
% % } -l
&I.
=E h.
.yy.
.y h2
- ~,.
end, the plant was 19 percent Construction force reached peak percent owner, was 8 percent operation in early 1984 cnd Unit 4 complete and PGE's invest-strength in January 1980 with complete at year-end. The Com-later in that year.
ment amounted to $49 million.
some 1,700 workers on the job.
pany's investment in Colstrip is Tirojan resumes operation WPPSS has five nuclear units The work force will decrease as
$30 million.
after repairs completed.
Under construction which will add the plant gets closer toits sum-Construction resumed in Sep-Upon completion of repairs and
(
6000 megawatts to the region's mer completion. Operating staff tember following receipt of ap-modifications to the steam power supply.
will numt.er about 125.
provals from state and fedecal The pdt is not only on schedule agencies. There had been ex generator tubes and the piping Boardman coal plant con.
but wiuin uudget in spite of tended heanngs and appeals in Trojan plant retumed to service system supports and walls, the tinues on schedule toward higher than anticipated interest connection with The Montana on December 31,1979. The out-August '80 start.up. More rates and rising equipment costs. Power Company's efforts to ob-age extended over an 80 day than 85 percent of the construc-This is a rare accomplishment tain necessary permits. By the period tion work on PGE's 530-mega-today in the power generation end of 1980 the project should be Prior to the resumption of plant watt Boardman coal plant was field and speaks well for the 25percentcomplete Dunngthe operations, an NRC Atomic completed at year-end. PGE s in-people involved in the project.
coming year we expect to reduce Safety and Licensing Board vestmentin the plant was $336 POE's partners in the prciect are our participation to 18.6 percent (ASLB) required hearings and an million at laat time.
Idaho Power Company and ownership so that cooperatives in extensive review of the corrective The plant's coal-handling system Pacific Northwest Generating the Mountain States can share is now in operation. On Jaruary Company; each with 10 percent in the project.
measures made by the Company The review was conducted and 5,1980 the first load of coal ar.
shares.
The two 700-megawatt coal-fired operation approved by the nved at the plant site from mines Colstrip coal plant con, units are located next to the exist-NRC staff.
near Gillette, Wyoming. The struction underway.The ing units 1 and 2 of the Colstnp The ASLB alw 5as scheduled Company has two 100-car unit Montana Colstrip units # 3 and generating plant and surf ace hearings in April 1980 to review trains hauling coalover the
- 4 project, of which PGE is 20 mine in southeastem Montana.
proposed modification of the con-1,200-mile route.
Unit 3 is stated for commeicial trol building to meet earthquake
. k
10 clared in late November by Ore-megawatts of net capability in combust on turbine delivered gon regulatory authonties, and 1979 PGE's hydro projects plus much needed service dunng the the governors of Oregon and the above long-term contracts year At full capac.ty it provides i
Washingtoei united in their appeal provided 40 porcent of the Com-nearly as much capacity as the l
to citizens for increased conser-pany s power requirements eight company-owned hydro-l vation Mandatory curiailment Peaking contracts with the electnc projects. but of course was avoeded when heavy De-Bonneville Power Administration at much greater expense To cember rains and snowfall tem-and the Columbia Storage provide greater flexibility.
poranly helped reservoirs and the Power Exchange provide a 774-provisions are being made to Trojan nuclear plant was permit-megawatt oeaking resource operate Buaver with natural ted to go back on hne on Decem-The Company has also con-gas as well as oil ber 31. Potential shortages sto tracted for the output of the 36-The 116-megawatt Bethel com-exist as snowpack surveys inoi-megawatt City of Ponland's Bull bustion turbine operates on cate a spong runoff about 80 per-Run hyrJroelectnc project sched-either oil or natural gas A permit Gmweg to serve Wacker cent of normal. The region needs uled for completion in 1982 was issued in late 1979 allowing smrne corp, a ra menter of heavy late-winter and early spnno A new hydroelectnc unit at Wil-increased hours of operaSon
- 'uia d " $ N,
precipitation lamette Falls on the Willamette beginning in 1980 The 233-
, nan Dave Eihort mmercatindusinal River near Oregon City is being megawatt Harborton unit located Einneer o Coread Omsson. is Company power supply considered Under present plans in Portland, was used to provide
@NW$*,,5j will be greatly improved for the plant would provide a 60 needed emergency service in acn of hyper pure sihcon single next five years.With t,ie megawatt peaking capacity and a December 1979, but under g,*g5gg5, addition of the 530-megawatt 35-megawatt average energy agreement with the city of Port-manufactureof sen-ducto, Boardman coal plant going on contnbution Before a final deci-land it must be moved by May gg,ers te6ew kne in August 1980, plus other sion is made, Federal. state and 1981 to another location to protect scheduled additions, the Com' community input is essential the metropohtan airshed The l
pany will move from its present Partnership in the unit by others Company is considering the j
tight condition into one of the is being explored Boardman site as an alternate region's most favorable supply location situations until the mid-1980s Nuclear: PGE owns 67 5 Partnerships in new coal plants, percent of the Trojan nuclear The Company's combustion tur-possible hydroelectnc and co_
plant and receives about 729 bines supphed about 5 5 percent generation development, and in.
megawatts of its output at full of its 1979 energy needs, but creased conservation and con.
power Under normal operation it se mal suWs M N W tnbutions of solar assist and other is expected to supply about 25 to g"Y **'* *P8' U"9 alternate sources are being 30 percent of the Company s an-Coal: Oui 2 5 percent ownership studied to meet those late 1980 nual energy requirements of the 1,313-megawatt Centraka requirements The Trojan plant has operated coal-fired generating plant in well since returning on kne De-Washington gives us 32 mega-Diversified power re.
cember 31,1979, operating 98 3 watts Upon completion of the sources provide good sys-percent of the time and providing 530-megawatt Boardman plant in tem balance. PGE's " power 14 bilhon kilowatt hours of August of 1980 and Colstnp s two eggs" are not allin one or two needed power to the region in 700-megawatt units in 1984, coal Poor hydro contributes to threat of manda, baskets but take advantage of the January and February 1980 Dur-will make a significant contnbu-tory curtailment. With vaned resources available. This ing 1379 the plant generated 5 5 tion to our resources A second the majonty of the Pacific North.
increased diversity, improved by bilhon kilowatt hours to serve coal-fired unit at Boardman is west's power supply presently the addition of the Boardman coal Pacific Northwest customer under consideration The Com-coming from hydroelectnc plant in 1980, will not only im-needs.
pany is also explonng prospects sources, the sho-tage expen.
prove rehabikty of service but will Trojan is scheduled for refuehng of participating in coal-fired plant onced in 1979 imposed senous also dilute the vulnerabihty of and maintenance this spnng and protects with other utikties in the problems on the Company.
the Company to single source early summer when load de-state of Washington Dunng the penod August through shortages or pnce hikes.
mands will be down-Other Sources: The intercon-November the natural flow of the Hydroelectric: PGE owns Future nuclear resources include necting of bulk power systems in Columbia Rrver at The Dalles and operates eight hydroelectric our 124-megawatt share of the the region for the exchange of was the lowest in 55 years. Res-generating plants with a com.
Washington Public Power Supply power and the Northwest-ervoirs were below normal by 7.6 bined net peaking capacity of System unit # 3, due on hne in Southwest intertie have benefited bdhon kilowatt hours at the end of 661 megawatts. In addition, the 1985. and a total of 890 mega' the Company in several ways November 1979.
Company has long-term supply watts in the early 1990's from the The 4,000-megawatt intertie re-l Not only were our owned or contracts with the owners of four first units of the Pebble Spongs duces the amount of capacity l
long-term contracted hydroelec-hydroelectnc projects on the and Skagit plants needed to meet peak demands.
l Inc resources down as compared mid-Columbia River: Pnest Combustion Turbines: These provides system support dunng l
to the previous year, but surplus Rapids Wanapum, Rocky Reach units provide supplementary emergenues. and offers a market power of any kind or at any pnce and Wells. These contracts are in peaking and emergency capacity for, and a source of, surplus elec-l was also in short supply.
force until after the year 2000 and when required. The 534-mega-tncity in either direction when
~
A state of emergency was de-presently represent nearly 735 watt combined-cycle Beaver available.
- e M*
s w
The esimepwait Boardman 9
coe paars e expand to tege Operatenlate thPt summer Residentiai growth continund at a healtny pa m 1979 The mapnty 1
'~ i.. ;,i. -
of the new housng developments j
- i,,, M.. M.-y.;
34 teature underground sanctrcal 3
..?, -.. ;.'}. ;. y
- ,,pL,,g.
4 y 1
.~
hS.-. servce L.. p _
2.
,k 7,
.,.N,
'i
1 -~
g.
~ l.: '% A
' ' ~
~
Y $ &;fd?.a;l* W j'.-lL 4
gM* '.
- {
i*
i,4....
jy j
- y %
.< ~,
l
. _(-Q N
{ /< >
L
.g.
r w..-
s
, f a s4(.. k 1 e l. v -
L
).
~
{Ss '
g' 4 ( 7. -
/
-- c f
h.
h f..h l
s
'v l-.;-
.'4-
- s. -,. - -
7 standards This is the matter which underwent several heanngs in 1978. The Nuclear Regulatory Commission then
=
determined the plant was safe for intenm operation and issued a
~
j heense amendment permitting full plant operaton dunng imple-l '
mentation of plant modifications.
l In January 1979 the Company l
submitted a report of proposed
[
modificaton design to the NRC staff Additional studies and plan modifications have continued throughout the year We believe that when approved the control l
building modificatons can be made without senous interrupton of service it is estimated the work will take about a year to complete. The $32.5 milhon damage suit against the Bechtel Corporaton, designers of the plant, for these deficiencies is
- ,g -
~~
l proceeding in due course.
i 7 m y,.7. -
11 Nuclear fuelfIr Tr:
Jan of Energy The final step is when near Gillette. Wyoming - 1200 Coci cnd urcnium mining /
under contract the ennched fuel is fabncated into miles away explarsti n operatiana thesugh 1987. Fuel for fuel rods PGE has a contract 23,003 bcrrsia of oil psr und rway. Uranium mining the Trojan plant undergoes sev-with Westinghouse for this pro-month available under 2%
development will be completed in eral processes from mine to end cess extending to 1987 year contract. On site storage 1980 at the Miracle Mine in Kern use in the reactor Contracts for Yellowcake has also been for 17 million barrels of oilis County. California The Company each step have been secured to purchased and fuel fabocation available and we had an inven.
owns 95 percent of the mine with assure a reliable fuel supply for contracts signed for Pebble tory of more than 1 rrittlion bar-first rights to purchase all of the the next seven years.
Spnngs # 1 reis as of March 1.1980 PGE uranium produced within the area Enough refined uranium, known has a 2' 2 year oil contract with under its control Prospects wer-as "yellowcakeJ has been pur-20 year Boardman coal Western Oil Marketing for 20 000 rant further exploratory work in chased for plant operation contract set. Dunng the next barrels per month Spot pur-1980 on PGE s joint uranium through 1989 The yellowcake is 20 years 12 million tons of coal chases were possible in 1979 due vt nture in Colorado converted to uranium hexaflonde for the Boardman plant will be to warm weather conditions but it The Company has a 50 percent and then goes through an en-purchased annually from AMAX is impossible to know what the interest in The Beartooth Coa l richment process under a 30-year Coal Company Source of coalis supply situation will be in the Company wh'Ch has begun oper-contract with the U S Department the AMAX mining development years ahead ation of a small underground coal mine near Red Lodge Montana
.. < ; 7:;9; y p 2.. Q p p s m - rMe it is expected to begin producing
,.',</.') h s Nhk ohk, ? Ed/. ; ;
about 12.000 tons per month 9
hC4]m will be undertaken to assess the early in 1980 Additional dnlling
..d c
I[47-fd h b / h A P @,
.$['
-4 Wy. -
cR.
)) quality of the estimated additional j q.
-J b [ rg }g 3
,4 175 million tons of in-place coal 4
W, gp,
My o
believed to be there A-Q
.P-
., g' ' I, 1 jl
+
s f
.1 ~
g' gq yy
- 4
'; ~. 9 y
.r
,e m
s.,
s 4
.-,,w g
."T Coaa began arnwng in Jan ary at u
a the Boardrnan power piant in north 1-
- f centrai Oregor, shown #5 One 2
c
+t s
.gs... - - -
by PGE
. of two 100-car unit trains leased
/a C *i y:> -(- } ' \\.
p I
[.,.[i y
'g
)
- +,. ~.. W
.n
~
' ~ >
$k q.
DA orr 7
~
pggg ;,
- g MS.
.s f,
l f
m g
4 E ' '
t.
4
~
74 u
' 9*== M m==
~
mgla.fivee
~
+
memouanenuamamm.a e -,
Uspelesetalinment
~__._,,,,,,,,e,
'Quier*Insihwanin 4
+
D D
12 Other Used an additional $16 milhon on Port of Morrow pollution control bonds Participation in the Company s Dividend Reinvestment and March Common S ock Purchase Plan Solo 5.000.000 shares of provided approximately $7 2 common stock to the pubhc at
$17 875 per share. Net proceeds Financing Future Con-were $86 6 milkon struction. PGE s 1980 utihty Sold $50 milkon of 10 percent construction program :s currently r.otes due 1984 n the Eurodollar estimated at $300 to $325 milhon market This financing was the Oncluding $75 milkon of ADC) To Growing..to serve residential first of its kind by a U S electnc partially finance this program tne NeNnIaYdevMent utikty and enabled PGE to Company sold four milhon shares m Lake O9wego b here develop a new source of long-of common stock to the public in
$%'M' gegM
- erm capital January 1980 at $14.375 per hve m PGE's Central Dmson share Net proceeds were $55 3 July There were 17.458 new residenhai milhon The Company also sold in made to PGE hnes dunng increased the Trojan fuel trust by February 1980. 555 milkon of Iversified financings approximately $26 milhon The 13.25 percent first mortgage
~W
. ' ch-provide capital for agreement was renegotiated to bonds due 2000 on a pnvate Company's growth.
increase the amount that may be placement basis In addition. the Building new utikty plants to meet borrowed to $100 milhon Company plans to sell additional present and future demand re-November shares of common stock and first quires that large amounts of new Entered into a tax oriented lever-mortgage bonds later in the year capital be raised from a vanety of aged lease of the coal handkng The Company s utikty construc-sources. To finance the 1979 con-facihties located at the Boardman tion program. which is subject to struction program ($254 milhon, plant. Structunng and placement continuing review and adjustment including $60 milhon in ADC). the of this transaction took approxi-is currently forecast for the two Company arranged long-term mately 18 months The Company years 1981-1982 to be in the financing amounting to $206 mil-received $20 milhon in November range of $575 to $650 milkon lion. Major achvity dunng the year and an additional $11 milhon in This program will require signifi-included the following:
January 1980.
cant external financings 1
6 i
4 O
e
,e 9
- ~ ~
6
- I L LiJ A
13 1
Permanent power cost adjustment granted.
While the case was under con-sideration, the Company incurred such rapid changes in fuel pnces and porchased power that it was forced to file a companion case which asked for a tracking Additionalincrease when inc$ ease to recover those Boardman goes on line.
Cverable rate action Freceived.On June 1, increased costs of fuel and pur-In its case the Company re-criased power. Heanngs were quested that since the Boardman 1979, PGE requested a neld on that issue and a perma-plant would be on line cunng the general rate increase of 21.1 per-nent power cost adjustment simi-last five months of 1980. that it be cent Seven and one half months far to the one requested in the included in the rate base for those later, on January 14,1980, a gen-onginal filing was granted fue months of the year and the eral rate order was issued on or:e November 15,1979 This perma-total rate base be computed on of the most complex cases ever nont feature allows the Company the average of the entire year filed by the Company The order to recover 80 percent of the ex-The staff argued that passage of from Oregon Public Utility C0m-cess cost of eligible fuel and pur-Ballot Measure 9 in 1978 pre-missioner John Lobdeil au-chased power above such ex-cluded that request and proposed thorized an initial rate increase of penses that were included in the instead a second rate increase 17.7 percent The increase was base tanffs. The power cost ad-when the plant comes on line and the second of five phases relatin9 Justment is computed and ad-calculated that increase to be the to the final disposition of the mat-Justed on a quarterly basis and in amount of the annualized cost of ters considered in the ongin al the event that power costs are the Boardman facility The Com-filing lower than anticipated in the base pany must file the necessary fi-l i
in his ordor, the Comm.ssioner rates. 80 percent of the underrun nancial documents not less than in the fall. While the case was still i
"ecognized the increased nsk that in cost will be returned to the 45 days before the anticipated being decided the Company also is now attendant to ot!Iity opera-ratepayers through a negative in-service date. This rate increase asked the Commissioner to con-tion and authorized a 15.17 per-power cost adjustment.
is expected to be in the 17 to cent rate of return on common sider the desirability and feasibil-19 percent range-equity and an 11.15 percent re-ity of banning electric heat for tum on rate bam Bonneville increase to be new single famny residences included. The Commissioner where alternate fuels were read-took note of the BPA wholesale ily available. The Company has rate increase effective December not advocated a ban. and in fact.
20,1979. but ordered that the has reserved the nght to argue Company defer with interest any against it when the matter is in-increased expenses resulting vestigated. Heanngs on this issue from the Bonneville rate increase have been coupled with the con-On July 1.1980. these deferred nection charge proceedings and expenses as well as the esti-are being heard this spnng mated future BPA expenses will The final phase of the rate casd be included in a permanent rate adjustments deals with the issue increase which is now estimated of property tax. Tne Company is to be about 7 percent.
currently litigating its property tax POE's filing included requests assessments and when that for institution of connection issue is finally resolved, rates will charges for all new customers as be adjusted well as several other miscella-Dunng 1980 the Company will neous charges for service calls, also be involved in many man-bad check returns and customer dated rate proceedings because transactions. The connection of the National Energy Act These charge issue was separated from include lifeline rates and cogen-l the case and is now being ad-eration tanffs. With inflation pre-dressed in genenc heanngs. The dicted to continue, the Company customer transaction charge was fully expects that it will require a denied but the other miscella-generalincrease by the end of neous charges were approved.
the first quarter of 1981.
..,7
~,
.. 7 -....,
' ~
. _ = =. ;,
N 4
3 v
4
?
t pg j
s.
W,
(
3,, - '
e e
-y e
~
i
14 and Electnc Board and Sac-l ramento Municipal Utilities Dis-tnct, in construction of a 10-megawatt demonstration plant northeast of Reno. Nevada We are particularly pleased to be f,Wrtiand JimM5
.PGF working together with more than 8
Manager of Comrneroai-industnai 575 other utilities in pooling our Cusiomer Field Serw.es. Central resources and funds in a Coordi-M[the$
Coas he facility, the Raft River geothermal nated research program through ship repaw faality is one of sour at test facility, under the auspices EPRI Through selection, fund-N,P of the Federal Department of ing, arsd management of research ee ma g in ad$ tion. the Port manages Energy will provide a wealth of projects. EPRI promotes devel-M and acre industnal design and operations data opment of new. improved and Other PGE research programs Leases and lease applications in environmentally sound tech-include illumination engineenng the Mt. Hood and Three Sisters nologies for producing power research for more efficient utiliza-area of Oregon may eventually at the lowest possible cost tion of lighting, agn-engineenng provide the Company with a local in 1980. EPP' 9tional budget studies into bio-mass fuels, heat source of geothermal energy will be appro.
'ely $2f.,2 mil-pump water heater development. PGE has applied for leases on lion The mor.. mil fur.d over and harnessing the wind.
41,000 acres, presently has 1.000 R & D projects under its POE's involvement in geother-lea",es on 8,900 acres in these management. Major study areas rnal expenmentation and devel-two areas, and is conducting pre-include nuclear, advanced power opment continues to increase.
liminary investigations of their systems, conservation. synthetic v
. L -
The Compariy is a member of a grothermal potential PGE is also f uels. coal gasification ' liquifaction, steenng committee for engineer-involved with four other utilites.
geothermal. solar, fuel cells, ing and design of a five megawatt Sierra Pacific Power. Pacific and many other power sources facility near Malta, Idaho. This Power & Light. Eugene Water of the future.
Solar, geothermaland
,,s. M.,g
- 7
- 3. M g'. -
- s e-wind programs in L
nate and supplemental energy
} g..
"4,4 Y%
$2.4 million research w; [. VQ1 #ngr budget. Development of alter-a
.z
. g.
'y, ; g ngl
{g ~..... _' _
.,]
i sources continues to receive at-
.^
. ~ E
[
' W #%f..
tention as the Company searches.
N for ways to develop new generat-qq G $g, g
ing options that are economically
-A L
p.g g.gg. p 3 feasible and environmentally r
' g}l orgWW.y
.m t
- l h.%
fNp acceptable.
L i.
Over $2.4 million is earmarked
- , W
'm et'.
-- h 4,.
7 'm 4 ; F Si for research in our 1980 budget.
~.
v --
WRC a -
- f i
[
3M R k/ hj[
$1.7 million will go for projects a
n,
- - y%,
lg - >;<,,
managed by the Electnc Power
,f, ResearchInstitute(EPRI). An
. l s
I additional $219.000 will be used x
to support the Liquid Metal Fast Breeder Reactor project.
~
1-,
6,
~,
i -
+
N 6 '"
jects are budgeted for $482,000, k*-
~
Local Company research pro-
,? C of which approximately 12 per-
- t
=
cent will go for solar demonstra-
~
~~
j
=
j tion programs in the PGE service I
_ ~
area.
. ~~' g
.,A
....~
f[
m,ef. e.
=) ac1 N,
'd
, gg E is People" formed by eenployee3 ta help tell Coenpeny clery. "I am envolved..because I want to help en the effort to tellcustomers that we are not a bunch of cold people. but that we work hard to do our jobs in getting our service to them." commented Dave Elhot, CommercialIndustrial Engineer, in explaining his involvement in the -PGE is People ~ Program.
Clerks, accountants, knemen.
This program was put together meter readers, mechanics, cus-in 1979 by a group of employees tomer service representatives.
who banded together to publicize and engineers like Dave Elliot, the pubhc service accomplish-are involved in communicating ments of the people who make the story of how PGE is serving up the Company.
Ourcustomers interests.
VM M-g 919 Many of our employees are N Eh members of planning commis-
- ddA N
sions, school boards, PTAs and volunteer firefighter groups. As
- +
4' f,,
neighbors and members of the p
[
s f i
, community they are uniquely 3
m j,
y 4 quahfied to help bndge the b -p el?, i
- 44l customer-company communi-m.
.y y;
3
,j*
, gg cations gap
(, -.
4f g The Company encourages com-
., jq munity involvement Our employ-a(
<dgL N ees have a hrory of getting f
h involved. They provide leadership
.,N
=0,
and participatica in community h
.& f h dF organizations which are helping Q["
"~
'hl O E y. answer social needs Schools,
~
' ~ '
T' ) y d
- h..
youth and seniors activities pro-4
- u?
/'.'
f'F dJ grams for the handicapped and k
k I
b ~.: i others are typical of such involvement.
3 ';...
-... p y
,. ^,.
PGE has always been highly re-
- ,gg - [
- f. ' [ ~
garded as the utikty that contn-Special talecommunications de-t
- butes most to the community vices (TCD) called Porta-Tels' u -.
f;,
,.1.. Maintaining this posture at a time have now been installed at all
, %g4 i
when customers are concerned Company offices enabkng cus-(.
..g 3, f.
, g ~
7, 1 about nsing energy costs is ex-tomer representatives to " talk" Us tremely important We care-and with customers having heanng k
. -(
. g %.
We want our customers to know it.
and or speech impairments. It
' -N.
. Seniors and handicapped works in conjunt uun wim a regu-
=
.. Egyp _
e
- + '*'
receive special help. Four lar telephone and operates kke a
.i.
W:t i
fyll. time Senior Citizen Represen. typewnter.
. W, J g@j,
. a F
.atives now provide specias ac -
Equal opportunity program
~-
. *. ~
- sistance to our elderly customers. continues in important
.h w-
.%6JD $$1 -
.c' Working out budget payments, role. The Company's commit-
~-
/- l j y;y M
f applying for weathenzation help.
ment to a strong Equal Opportu-
~
7.
7.s
-. 7,. g.$ ~
helping arrange govemment as-nity Program continued in 1979
~
r 6
. ~
7.." q44 4
g.;-
/N sistance and setting up Third with the percentage of minonties
~Q[
u_
', p..J
.: Party Notice plans which desig-employed in metropohtan Port-4 r w.
- .. g
('~
nates a relative, fnend or agency land and Salem areas exceeding
- 7..
w -
.s y.
to be automat,cally notified if t. e the percentage of minonties in s
n.
" l h.g# ' --.' _ 3:p)-b /'
>c-1.' ~ ~ service of a registered customer the labor market. On-site audits k, _
~
._,7
.. FWg' F273 is in danger of being terminated, of the Company's Affirmative Ac-p ggi
.1 c N 3,r. "a
% J$ are some of the represen'atives' tion Plan by the government con-CAiT A Ag, ;..... ?k k<:
- activities.
tinue to be positive.
-4f {
> 9:"
~
16 There are manycigns Coal, nucl:ar and smtll for better yearc hydroelectris projects ahead. Good things are needed ta meet needuf l
happening for the Company, and neut quarter century and l
ws see a welcome hght at the end beyond. We stiH believe that in l
l of the tunnel. The years ahead the region we serve, coal and nu-l will not be without challenges. We clear plants must be counted on don 1 pretend they will. But we to meet the major needs in the l
have demonstrated our tougSness years ahead Small hydroelectnc l
and ability to serve our customers projects can help. as can perhaps l
through drought, ice storms, other resources such as passive regulatory shutdowns of Trojan solar. geothermal, and wind All l
and energy shortages.We find a must be evaluated and used way to do what needs doing.
where economically feassble Cur region is growing, customers This we will do appreciate and need our service. We will continue our effort the Company's power supply will to shorten the licensing process I
be greatly improved, and our into a more realistic time frame earning opportunities appear to The sevan years the Company be much better. The ingredients has been in the process of obtain-are there for a brighter future.
ing licensing approval for the ter asked Congress for funding to gional Energy Bill is expected to The people oro aware and Pebble Spnngs nuclear plants is l
examine salt domes and other receive U S. House of Represen-Invalved in energy matters. Clear evidence of the need for re-sites in the South and West as tatives consideration this session.
In the nation, as well as in the vision. The estimated cost for the potential disposal sites. The pro-It would provide regional re-l PGE service area, there is a two plants at the time of the ongi-posal contains funding of $739 source planning, lower cost con-l deepening awareness and con-nal kcensing appkcations was milhon for 1981.
struction, financing conservation.
i cern about the country's energy
$1.4 billion The cost, because of The President s program would and a shanng of lower cost fed-dilemma. In nearly all public opin-delay, inflation and changing re-select at least one permanent site eral power by our residential and ion studies dunng the last half of quirements is now estimated at from 11 candidate sites by 1985, rural customers. It is a fair bill and l
1979, the subject of energy was over $5 billion, and what it will be with expected operation in the appears to have a good possibil-picked as the number one or two by the early 1990 s is unknown early 1990's He also intends to ity of passage.
problem in the nation that must Stockholders and ratepayers estabhsh an away-from-the-On the state levelit 's anticipated be solved. In large part this has should not have to pay excessive reactor temporary storage site the Company wd face several been brought about by devel-penalties foi an unmeldy regula-for spent fuel by 1983. While this anti-nuclear measures on the opments in foreign oil policy and tory process is a more positive approach than November ballot. One of which pnces, regulatory shutdowns and We wiH continue to seek approval has been taken earher,it still would prohibit participation by energy shortages.
for the Pebble Spnngs plants, does not recognize that reproces-any Oregon utility in any nuclear This increased awareness is en-which we believe is the best nu-sing is clearly the most rational construction, another which couraging, because the solution clear site ir,9e state of Oregon it solution to the question of han-would not allow construction until to today's and tomorrow's energy should be approved dhng spent nuclear fuel.
kcensed nuclear waste depost-problems hes in the will of ;he We most kkely will move ahead in people. No one company, nor Conswvath dort to W tones were in place. A third one industry can solve all of these coal plant at the Boardman site A customers must continue. measure is one that would call for 1 he Company will continue con-the closure of Trojan. The Com-l and support by from the peopi opinion indicates that lengthy and servation and weathenzation ac-pany plans to undertake a force-on a course of act.on which will detailed analysis heanngs maY tivities to help customers save ful, positive information program kilowatt hours and reduce electnc to inform Oregonians of the provide needed energy can pro-severe adverse economic and bills in the years ahead. Conser-Cou' c[It is antic $y Facihty Sit ng r
- "*"F"""
n pated the vation helps everybody It helps socialimpact these measures One of the major challenges this Company faces in the years nNwill give the Boardman customers save and it helps the W
imposa There are several areas of our ahead is to gain increased under site matter high pnonty Company. Energy saved can be standing for the need for long-Research efforts on geothermal less costly than building equiva-service terntory that have small range energy planning. Many assive solar co-generation pos. lent generating facihties.
groups seeking to take over people still feel that new energy
'hties, wind and other forms This will be the eighth consecu-portions of our system by the developments can be availabl of alternate energy wiu continue tive year that conservation as-establishment of People s Utikty almost overnight. So procrastina-to be pursued' sistance has been aggressively Districts. With an uncertain power offered to PGE customers.
supply and extremely high costs tion on energy decisions seems Action on nuclear waste to acquire power and facihties, it painicss. We must show the storage discouraging.
Important politicalissues does not appear that they could need, and point out the economic The dominant pub ic concern face Company in 1980.
offer rates as low as PGE does and lifestyle pena! ties of insuffi-regarding nuclear power is cen-On the national level the Pacific We have no intention of selkng
(
cient energy. l'is a commur'ica-tered around the lack of disposal Northwest Electric Power Plan-any of our system and will oppose tion job that must be done over sites for high ievel waste in spent ning and Conservation Ac:,
any takeover attempts.
the immediate years ahead.
fuel. In February President Car-known in the area as the Re-It will be a busy year.
g E
.. ;i.+3pmp m..,y_ mp y !_,
m. vp..,
4h. m p, =, s<w ;&,:en g ; 4 y &,..,7_.adzy..].
s
. b
. - 4y;n; s _,,;
vi-v isy
~ ~.af.t.. / W" ##enG q@ w<* j,i.J. %&
' s
'8
'i,e p
_ p ~ A..t.
- 4 l
L.
j i
~ j yyg4.4'sg+.pygig@q [.gj y
y
.~..
-.. -, q-
. y 3,.
1'
,- g.*
4e,
)
3 s.
- y.... g
.w.,.
.e g
s.: fffr y e
( y h t '
..j_~.}
,c., -
e
,q,.,,
+
+ +
m.
g-
- 4...,
p m
\\].
Q."#
mQ' g s s.
- ...s
,i
.g',,
o me q.
3 r'.,*:...
y
.a :.-
I Y
f-.,
/
' - - :. p *,
9 W
,N, y
J, i
e A.
../..
p, y '
m a
3
-, ' 3,4 5 e*
.~
.e
..qf
%/
.a.
a
,7 3.,
[^....
~ -
l. y.,1 ;
1 y
~.q
~t..
b -
....,s
_.)
.. }._.
m -
+
1 w.
r..
f s
Q,
/.
.1-3. s w
'.k T')
4 7',
6 I
?".
3 W
-?
s g
t.-
._ _ e,...
[d
.,4" 9
g mt
(
g
-s E., '4
- ,4, e
1
,A
. J
.' e%.
s...
v,'.. %'.
.~.
w M4[
N g
s l&.(fll.
,.4. g.,
<,g,s.:9. f s
\\.; vf.. _.
}
w*.f./
v
^.
.y (g
"d
- ~,
.?
g s' -
_ d,4,
.,g
- c,,'a
'4;4 y.-
- mspy' i, - -
e
, ~
<g 6
r-, %
~
.1
'e -- y.,.
.. 1. + f.$.
_p
.. n., "-
,,1..
y
^ C.QRM y.
.t
- s
._;< ::..t.,,: t &- ( V
- . 44* ?
'_ % " y. W M l
'A.
I.. /.s.'
k,..
7.&
'- i n s.
.n
'Mr.
C
- Te g
,4 Y
'*.;, ?
ig[
'4-e, j
'^
- , ; l J. j... : ~..
g'4
^
'M y
m-
...3....,*
& '. :p g
, t*Q.lY#
- f. ';.. :.
,,. ~ '
f e..
,.m c.
7m
'J Portland General Electric Company and Subsidiaries Management'a Discussion cnd Analysis of Statements cf Income Net income and earnings per share for 1979 decteased from 1978 pnmanly as a result of excess power t'osts incurred during the second half of the year. Significant increases in revenues (11.6%
rate increase in January 1979) and ADC were more than offset by the Company's inability to recover rapidly escalating power costs. The combination of poor hydro conditions beginning in August and the outage of the Trojan nuclear plant for repairs from mid-October until December 31, together with higher costs of fossil fuels and purchased power, resulted in excess power costs of approximately
$60 million. Of this amount, $15 million was recovered under a permanent power cost adjustment tariff granted by the Public Utility Commissioner of Oregon effective November 15,1979. Although this tariff will enable the Company to recover a significant portion of excess power costs in the future it did not apply to costs incurred prior to November 15.
The 1978 net income and earnings per share increased over 1977 primarily from an increase in rates and a change in accounting policy (Note 1). These increases were offset in part by the Trojan nuclear plant being out of service under order of the NRC from late June 1978 until January 1979, af ter it was determined that the design of the control building did not fully meet earthquake resistance standards stated in the plant's operating license. Trojan had been expected to supply approximately one-third of the Company's energy requirements during 1978. It was necessary to replace this lost generation with power at costs greatly in excess of Trojan's incremental costs. This resulted in increasing power costs by approximately $26 million for the year 1978, including approximatcly $20 million dunng the fourth quarter.
During 1977 the Pacific Northwest experienced the worst drought in its history and the resulting ex-tremely unfavorable hydro conditions increased the Company's power costs more than $16 million above those anticipated for the year. Of this amount only $4 milhon was recovered through a rate surcharge. This contrasts with the extremely favorable hydro conditions which prevailed during the first eight months of 1976, reducing power costs during that penod. As a result of these factors, and the timing and amount of general rate relief granted during 1977, earnings per share for 1977 were significantly less than earnings per share for 1976.
The following discussion relates to other significant factors affecting results of the Company's opera-tions for 1977,1978 and 1979.
Operating revenues have increased primarily as a result of the following rate increases:
September 1976-a 17.2% general rate increase.
September 1977-an excess power cost surcharge of 2.2 mills per Kwh from September 1 thrctgh December 1.
November 1977 - a 2.6% general rate increase.
January 1979
-an 11.6% general rate increase.
November 1979 -a power cost adjustment surcharge of 4.0 mills per Kwh from November 15.
In addition, operating revenues increased in 1978 due to sales to other utilities.
Purchased power costs vary from year to year based upon the availability of low cost hydro power.
The increase in 1977 resulted primarily from the drought which required substantial purchases of higher cost thermal power dunng the period from Apnl through December to replace hydro power normally available. The increase in 1978 is a result of the Company purchasing excess hydro power for resale to other utilities and replacement power from August through December due to the Trojan shutdown. These costs continued at the same level during 1979 because of the poor hydro condi-tions and the Trojan outage.
Production expense increased in 1977 primarily as a result of the Trojan nuclear plant, which was placed in commercial operation dug 1976. In addition,1977 production expenses increased as a result of the drought. The decrease in 1978 results from the irojan shutdown. The increase in 1979 reflects substantial usage of the Company's oil and gas fired combustion turbines to offset poor hydro conditions and the outage of Trojan.
Administrative and other expenses have increased primarily due to the effect of inflation, the increase in the number of customers and increases in the number and wages of employees.
Maintenance and repairs and depreciation expenses have increased primarily as a result of the increase in utility plant in-service, including the Trojan nuclear plant which was declared available for commercial operation in May 1976. In addition maintenance and repairs increased in 1979 as a result of a severe ice storm in January and repairs to Trojan during the above mentioned outage.
Taxes on income increased in 1977 and 1979 and decreased in 1978. Changes in Federal and state income taxes are generally related to changes in income before income taxes. See Note 1 for the Company's income tax accounting policies and Note 2 for details of taxes on income.
Allowance for funds used during construction (ADC) increased as a result of increases in the Company's construction work in progress. In addition,1979 was affected by an increase in the ADC rate for all construction expenditures, and 1978 was affected by an increase in the ADC rate for cer-tain projects effective November 15,1977 (Note 1).
Interest on long term and short-term borrowings have increased as substantiallong-term debt financings an1 the use of short term borrowings have been required to support the Company's con-struction program. In addition, long and short term interest rates were higher during 1979.
Portland General Electric Company and Subsidiaries 19 Consolidated Statements of Income For the Years Ended December 31 1979 1978 1977 1976 1975 1
(Thousands of Dollars)
]
Operating Revenues (Note l)..
$349,981 S303,678
$253,073 S217,787 S179,942 Operating Expenses Purchased power....
75,111 76,911 40,619 31,028 41,821 Production......................
69,522 23,794 30,239 15,093 9,087 Trrnsmission and distribution 12,805 11,672 9 829 8,859 8,824 Administrative and other..............
38,728 33,914 25,/18 23,639 18,514 M intenance and repairs.....
18,418 13,313 12,895 8,897 7,194 Depreciation (Note i) ;.....
33,642 31,587 28,159 22,112 13,890 Taxes other than income taxes.........
24,166 24,280 23,951 20,972 16,957 Taxes on income (Notes 1 and 2).
12,300 4,968 5,006 4,510 1,493 284,692 220,439 179,946 135,110 117,780 65,289 83,239 73,127 82.677 62,162 Opercting income.....
Other income Allowanco for equity funds used during construction (Note 1)...........
27,445 9,058 5,089 4,360 6.317 Other income and deductions...
1,270 5,325 541 988 (641) 28,715 14,383 5,630 5,348 5,676 Interest Charges Int: rest on iong-term debt.
70,326 58,206 48,528 40,711 28,519 Int: rest on short-term borrowings...
9,096 8,973 4,794 a 5,447 9,211 Other interest and amortization.....
1,030 1,183 846 899 347 Allowance for borrowed funds used during construction (Note 1)
(32,570)
(19,524)
(12,399)
(11,053)
(16,242) 47,882 48,838 41,769 36,004 21,835 Income before cumulative effect of change in accounting policy........
46,122 48,784 36,988 52,021 46,003 Cumulative effect to January 1,1978 of accru,ing cstimated unbilled revenues-less income tax:s of $8,503 (Note 1).
7,845 S 46,122 S 56,629
$ 36,988
$ 52,021 S 46,003 Net lncome..
Preferred Dividend Requirement.
13,830 14,175 13,657 11,812 9,818 C:mmon Stock S 32,292 S 42,454 S 23,331 S 40,209 S 36,185 incomeavailable.........
Av rage shares outstanding..
30,403,911 24,709,977 21,414,344 17,687,431 14,333,333 Errnings per share Before cumulative effect of change in accounting policy........
$1.06
$1.40
$1.09
$2.27 S2.52 Cumulative effect to January 1,1978 of accruing estimated unbilled revenues-net..
.32 E rnings per share........
S1.06 S1.72 S1.09 S2.27 S2.52 Dividends declared per share.
S1.70
$1.70
$1.70 S1.64
$1.58 Consolidated Statements of Retained Earnings For the Years Ended December 31 1979 1978 1977 1976 1975 (Thousands of Dollars)
Bal::nce at Beginning of Year.........
S 94,91':
$ 94,978 S108,146
$ 97,901 S 84,626 Not income..
46 "&
56,629 36.988 52,021
_f 6,003 f1 30 151,607 145,134 149,922
_1.0,629 1
Deduct Dividends declared Common stock..
53,130 42,514 36,408 29,964 22,910 Preferred stock 13,830 gj75 13,748 11,812 9,818 66,960
_ 56,689 50,156 41,776 32,728 Balance at End of Year S 74,080 S 94,918 S 94,978
{108,146 S 97,901 The accompanying notes are an integral part of these statements.
20 Portland General Electric Company cnd Sub:idi:rie3 Consolidated Balanc7 Sheet 7 Assets At December 31 1979 1978 (Thousands Of Dollars)
Electric Utility Plant-Original Cost in service Production S 597,917
$ 580,710 Transmission........
134,495 133,310 Distribution.....
385,104 354,289 General..
58,975 49.858 1,176,491 1,118,167 Accumulated depreciation (Note 1)
(203,572)
(173.097) 972,919 945,070 Construction work in progress (Note 6).
617,303 463,274 Nuclear fuel, less accumulated amortization of $29,476 and $16,278 (Note 1) 68,578 74,518 1,658,797 1,482,862 Other Property and investments.
20,955 12,300 Current Assets Cash....
4,909 4,387 Receivables Customeraccounts.
23,120 22,477 Other accounts and notes 4,625 5,886 Reserve for uncollectible accounts (234)
(536)
Estimated unbilled revenues (Note 1) 21,781 E0,209 Materials and supplies, at average cost Fueloil 28,591 5,668 Other......
13,187 11,585 Property taxes applicable to subsequent periods.
9,697 9,402 Prepayments....
7,394 2,342 Deferred power costs (Note 1) 7,320 125,390 81,420 Deferred Charges...
16,186 11,456 S1,821,328
$1,588,038 1
l l
l
21 Capitalization and Liabilities At December 31 1979 1978 (Thousands of Dollars)
Capitalization (see accompanying statements)
Common stock equity.
S 551,612
$ 478,759 Cumulative preferred stock.
150,000 151,500 Long-term debt...
754,441, 735,119 1,456,053 1,365,378 Currsnt Liabilities Long-term debt due within one year (Note 5) 50,988 9,714 Current sinking fund-preferred stock (Note 3)..
1,500 3,000 Bank loans (Note 4) 130,000 71,000 Accounts payable and other accruals.
98,551 68,933 Wages and salaries payable.
2,081 1,685 Accruedinterest.
15,414 11,773 Dividends payable.
16,814 14,588 Accrued general taxes.
18,918 15,708 865 457 Accrued income taxes.
Deferred income taxes (Note 1).
11,392 9,375 346,523 206,233 Other Deferredincome taxes (Note l) 14,673 12,650 Deferred investment tax credits (Note 1)...
2,366 2,468
' Misccllaneous....
1,713 1,309 Commitments and contingencies (Note 7) 18,752 16,427 S1,821,328 S1,588,038 The accompanying notes are an integral part of these statements.
22 Portland General Electric Company and Subsidiaries i
Consolidated Statements of Ca italization At December 31 W9 1978 Common Stock Equity (Note 3)
Common stock, $3.75 par value per share, 50,000,000 shares authorized, 31,435,856 and 25,995,935 shares outstanding
$ 117,884
$ 97,485
)
Other paid-in capital 363,631 290,197 1
Capital stock expense (3,983)
(3,841)
)
Retained earnings.
74,080 94,918 l
551,612 37.9% _ _478,759 35.1 %
Cumulative Prefe ad Stock (Note 3)
$100 par value per share,2,500,000 shares authorized 9.76% Series,100,000 shares outstanding 10,000 10,000 7.95% Series,300,000 shares outstanding 30,000 30,000 7.88% Series,200,000 shares outstanding 20,000 20,000 8.20% Series,200,000 shares outstanding 20,000 20,000 11.50% Series,195,000 and 225,000 shcres outstanding 19,500 22,500 Current sinking fund on 11.50% Ser:es (1,500)
(3,000) 8.875% Series,270,000 shares outstanding 27,000 27,000
$25 par value per share,6,000,000 shares authorized
$2.60 Series,1,000,000 shares outstanding 25,000 25.000 150,000 10.3 151,500 11.1 Long-term Debt (Note 5)
First mortgage bonds Maturing 1980 through 1985 10%% Series due December 1,1980 40,000 40,000 10% Series due April 1,1982 40,000 40,000 3%% Series due November 1,1984 7,126 7,126 9%% Series due June 1,1985 27,000 27,000 Maturing 1986 through 1990-4%-5%%
28,160 28,980 Maturing 1991 through 1995-4%-5%%
66,682 67,645 Maturing 1996 through 2000-5%-9%%
189,951 190,142 Maturing 2001 through 2005-7%-11%%
142,000 142,000 Maturing 2006 through 2007-8%-9%%
100,000 100,000 Pollution control bonds, Port of St. Helens. Oregon, 7%%, due 2006 (guaranteed by Company) 12,735 12.735 Pollution control bonds, Port of Morrow, Oregon, 6%%, due 2008 (guaranteed by Company) 34,000 34,000 Amount held by trustee.
(10,560)
(26,849) 10% notes due March 1,1984..
50,000 Trojan trust notes...
77,975 51,713 Boardman toan agreement..
30,000 Other...
1,124 1,148 806,193 745,640 Unamortized premium and discount-net (764)
(807) 805,429 744,833 Long-term debt due within one year.
(50,988)
(9,714) 754,441 51.8 735,119 53.8 Total capitalization....
S1,456,053 100.0% S1,365,378 100.0 %
The accompanying notes are an integral part of these statements.
Portland General Electric Company and Subsidiaries 23 Consolidated Statements of Chan eJ in Financi:1 Prition For the Years Ended December 31 1979 1978 1977 1976 1975 (Thousands of Dollars)
Source of Funds Current operations income before cumulative effect of change in accounting policy....
S 46,122 S 48,784 $ 36,988 S 52,021 S 46,003 Non-cash charges (credits) to income Depreciation and amortization 46,840 35,008 39,548 24,708 13,890 Deferred income taxes-net....
11,293 1,018 7,683 8,167 5,129 (1,989)
Reserve transferred to revenue.........
Allowance for equity funds used during construction...
(27,445)
(9,058)
(5,089)
(4,360)
(6.317)
Other-net....
2,799 3.038 (214) 138 134 79,609 78,790 78,916 80,674 56,850 Cumulative effect of changein accounting policy (Note 1) 7,845 Funds provided internally..
79,609 86,635 78,916 80,674 56,850 Proceeds from externalfinancing Long-term debt 102,672 116,795 157,978 120,104 122,861 Preferred stock 27,000 27,375 30,000 Common stock...
93,834 68,459 62,532 65,774 29,770 59,000 26,000 (25,650)
(57,284) 32,143 Short-term borrowings-net...
Sale /leasebackof assets (Note 7)..
20,246 50.310
$355,361 $348,199 S300.776 $236,643 $271,624 Application of Funds Gross utility construction S254,289 $278,265 S201,896 S191,475 S182,513 R:imbursement for prioryears' construction expenditures (18,940)
Allowance for equity funds used during construction........
(27,445)
(9,058)
(5.089)
(4,360)
(6,317) 226,844 269,207 196,807 168,175 176,196 H:adquarters complex construction 9,259 21,342 18,982 Dividends declared...........
66,960 56,689 50,156 41,776 32,728 R:tirement oflong-term debt and preferred stock...
45,119 45,666 54,156 4,480 40,124 Miscellaneous-net.
13,984 8,459 (11) 2,812 1,219 increase (decrease)in working capitalexcluding current maturities, sinking funds and short-term borrowings Cash.......
522 (681)
(2,966)
(3,675) 6 Receivables.........
4,684 7,457 (3,981) 5,802 7,404 Estimated unbilled revenues...
1,572 20,209
- Materials and supplies 24,525 (5,776) 7,209 (13,308) 7,309 Accounts payable and accruals (41,516)
(50,810)
(13,171) 7,886 (13,824)
Other-net....................
12,667 (2,221) 3,318 1,353 1,48_0
$355,361 S348,199 S300,776 S236,643 S271,624 The recompanying cc.me an integral part of these statements.
24 Portland General Electric Company and Subsidiarie3 Notes to Financi:1 Statement 3 NOTE 1.
SUMMARY
OF ACCOUNTING POLICIES The Company's accounting policies conform to generally accepted accounting princi-pies for regulated public utilities and are in accordance with the accounting requirements and the ratemaking practices of the regulatory authorities having jurisdiction.
Consolidation Principles-The financial statements include the accounts of the Company and its wholly owned subsidiaries. Intercompany balances and transactions have been eliminated.
Revenues-Prior to 1978 revenues were recorded as customers were billed, principally on a cycle basis throughout eacn month. This resulted in unrecorded revenue at the end of an accounting period. The changes in unrecorded revenue from year to year were generally not s;gnificant. Due to the accelerating increase in rate levels and costs, the disparity between billed revenues and costs increased significantly. Accordingly, effec-tive January 1,1978, the Company changed to a method of accounting to accrue the amount of estimated unbilled revenues for services provided to the monih end to more closely match revenues and costs. The cumulative effect of the change on years prior to 1978 is $16,348,000 less income taxes of S8,503,000.
Allowance for Funds Used During Construction (ADC)- ADC represents the net cost for the period of construction of borrowed funds used for construction purposes and a reasonable rate on other funds used. ADC is capitalized as part of the cost of utility plant and is credited to income but does not represent current cash eamings. The allow-ance for borrowed funds used during construction is calculated on a pre-tax basis. ADC is not capitalized for income tax purposes.
Effective January 1,1977 the Federal Energy Regulatory Commission (FERC) estab-lished a formula to determine the maximum allowable ADC rate and ordered that the allowance for borrowed funds used during construction be credited to interest charges and that the allowance for other (equity) funds used during construction be credited to other income. A 7% ADC rate was used on all construction expenditures until November 15,1977 when the maximum rate allowed under the FERC order was adopted for certain construction projects. Effective January 1,1979 the maximum rate (11.5% for 1979) was adopted for all construction expenditures.
Depreciation-Depreciation provisions are based upon the estimated service lives of the various classes of plant and property in service. Prior to January 1,1979 depreciation on generating plants placed in service after 1975 and transportation equipment was computed on a straight-line basis. Depreciation on the remaining plant and property in service, including substantial hydroelectric facilities, was computed on the 5% sinking fund method. The Company's sinking fund method yielded depreciation substantially the same as straight-line depreciation. Effective January 1,1979 depreciation on all plant and equipment in service has been computed on a straight-line basis. Depreciation expense as a percent of the related average depreciable plant and property in service balances approximated 2.4% in 1975,2.8% in 1976, and 3.0% in 1977,1978 and 1979.
Depreciation of the Trojan nuclear plant includes provisions for estimated decommis-sioning costs. Such provisions are included in current rates to customers based on esti-mated decommissioning costs of approximately $17,000,000. The Company and the Public Utility Commissioner of Oregor. (Commissioner) are continuing to review the decommissioning costs estimate and it is expected that any increase in such costs will be provided for in future rate increases.
The cost of renewals and replacement of property units are charged to plant and repairs and maintenance are charged to expense. Property units retired, other than land, are charged to accumulated depreciation.
25
/
Amortization of Nuclear Fuel-The cost of nuclear fuelis amortized to expense based on the quantity of heat produced for the generation of electric energy. Effective January 1,1979 the Commissioner has allowed increased revenues to provide for the estimated cost of permanent storage, including such cost for fuel consumed in prior years.
- Retirement Plan-The Company has a noncontributory retirement plan for its employees. Total plan costs were $1,840,000, S2,758,000, $3,162,000, S3,290,000 and
$3,865,000 for the years 1975 through 1979. The plan was amended effective July 1, 1978 and at January 1,1979 (latest actuarial valuation date) the unfunded actuarial liabil-ity was estimated to be S15,000,000 and is being amortized over a 30-year period. At January 1,1979 the actuarially computed present value of vested benefits exceeded the
- actuarial value of the plan assets by approximately $2,000,000. The unfunded actuarial liability, the present value of vested benefits and the actuarial value of the plan assets have not changed materially at December 31,1979..
In addition to the retirement plan, the Company has a group life insurance plan which provides life insurance benefits to both current and retired employees. The unfunded liability for post retirement life insurance benefits at January 1,1979 is estimated at S5,900,000. Employees contribute to the cost of insurance premiums through a fixed rate based upon the amount of insurance benefit and the balance of such cost is paid by the Company. During 1980, rates charged to customers include provisions to fund this liability over future periods.
Deferred Power Costs-Effective November 15,1979 the Commissioner issued an order for a permanent power cost adjustment (PCA) tariff which provides for rate changes either up or down to the extent that certain power costs deviate from those in-ciuded in the Company's general rate tariffs. The PCA covers two types of cost changes (a) changes in the unit price of oil and gas used for combustion turbine generation, and (b) changes in the unit price of power purchased from other companies. The PCA pro.
Vides that 80% of the costs associated with unit price changes, above or below those included in the general tariffs, be collected or refunded through an adjustment to cus-tomers' bills. Cost deviations greater than the total monthly adjustment are deferred and amortized to income during subsequent periods.
Income Taxes-Deferred income taxes are provided for timing differences between financial and income tax reporting to the extent permitted by the Commissioner for ratemaking purposes. Flow-through accounting is followed for other reductions of income taxes resulting from various provisions in the tax laws, primarily accelerated depreciation. Flow-through accounting has the effect of passing such reductions on to the Company's customers. Portions of deferred income taxes are classified as current liabilities to the extent the related assets are current. See Note 2 for details of major deferred tax items.
Tax reductions resulting from investment tax credits are amortized to income over a 30-year period, the approximate life of the related properties. The Company estimates it has approximately $55,000,000 of investment tax credit carryforwards available for applica-tion against any future Federalincome tax payments. Approximately $29,000,000 of these carryforwards expire in 1982 and the balance expires in varying amounts during the years 1983 through 1986.
i i
i
w-26 Portland General Electric Company and Sub:Idiaries NOTE 2.
INCOME TAX EXPENSE The following table shows the detail of taxes on income and the items used in computing the differences between the statutory Federalincome tax rate and the Company's effec-tive rate.
Years Ended December 31 1979 1978 1977 1976 1975 Utility (Thousands of Dollars) a Currently payable
$ 143 $ (25) $ (1,045) $ (1,727) $ (3,637)
Deferred income taxes Capitalizedinterest.
7,943 3,342 4,433 4.013 6,529 Liberalized depreciation.
3,361 1,354 2,409 2,787 630 Deferred power costs 1,810 Other.
(855) 400 (457)
(541)
(540)
Investment tax credit adjustments.
(102)
(103)
(334)
(22)
(1,489)
. 12,300 4.968 5,006 4,510 1,493 Totat utility.
Nonutility Currently payable 265 (8)
(379)
(42) 316 Deferredincometaxes.
1,153 (3,103) 1,632 1,930 Total nonutility.
1,418 (3,111) 1,253 1,888 316 13,718 1.857 f,259 6.398 1,809 Cumulative effect of accounting change Deferredincometaxes.
8,503 Totalincome tax e< pense.
$13,718 $10.360 $ 6,259
$ 6,398
$ 1.809 Computed tax based on statutory Federal income tax rates applied to income betore income taxes and cumulative effect of accounting ch.nge.
$27,526 $24,307 $20,758
$28,041
$22.950 Less reductions in taxes resulting from Flow-through items Excess tax over book depreciation.
6,019 12,921 7,319 15,447 13,263 ltems capitalized for books and expensed for tax 2.210 2,007 2,308 2,503 Allowance for equity funds used during construc* ion 12,699 6,612 4,274 3,649 4,698 Other.
(4,910) 707 899 239 677
$13,718 $ 1.857
$ 6,259
$ 6.398
$ 1,809 Company's effective rate 22.9%
3.7%
14.5 %
11.0 %
3.8%
The Company has a Federal income tax net operating loss carryforward of approxi-mately $41,000,000 expiring principally in 1985 and 1986. Deferred taxes will be recorded to the extent that the loss carfyforward is realized in the future.
It is anticipated that cash outlays for income taxes will not exceed income tax expense during each of the next three years.
NOTE 3.
COMMON AND PREFERRED STOCK The following changes occurred in the common stock, cumulative preferred stock and other paid-in capital accounts (dollar amounts in thousands),
Common Stock Cumulative Preferred Stock Number
$3.75 Number
$100 Number
$25 Other of Par of Par of Par Paid-in Shares Value Shares Value Shares Value Capital Outstanding, December 31,1974.
13,500,000 $ 50,625 800.000 $ 80,000
- $108,146 Sales of stock.
2,000,000 7,500 300,000 30,000 22,270 December 31,1975.
15,500,000 58.125 1,100,000 110,000
- 130,416 Sales of stock.
3,559,909 13,350
- 1,000,000 25,000 54.799 Redemption of stock (15,000)
(1,500)
December 31,1976.
19,059,909 71,475 1,085,000 108,500 1,000.000 25,000 185,215 Sales of stock....
3,177,428 11,915 270.000 27,000 50,617 Redemption of stock (30,000)
(3.000)
December 31,1977,
22,237,337 83,390 1,325,000 132,500 1,000,000 25,000 235,832 Sales of stock.
3,758,598 14.095 54,365 Redemption of stock (30,000)
(3,000)
December 31,1978.
25,995,935 97,48U 1,295,000 129,500 1,000,000 25.000 290,197 Sales of stock...
5,439,921 20,399 73,434 Redemption of stock (30.000)
(3,000)
December 31,1979.
31.435,856 $117.884 1,265,000 $126,500 1,000,000 $25.000 $363.631
l 27 Cumulative preferred stock outstanding is redeemable at the option of the Company as follows: 9.76% Series at $110 to November 1,1980,7.95% Series at $105 to July 1,1982, 7.88% Series at $106 to April 1,1983,8.20% Series at $106 to July 1,1983,11.50%
Series at $108 to January 15,1985,8.875% Series at $108 to April 30,1980 and $2.60 Series at $30 to April l,1981. Each Series is redeemable at reduced amounts after such respective dates.
Mandatory sinking fund requirements on the 11.50% and 8.875% Series preferred stock are $1,500,000 through 1982 and $3,300,000 from 1983 through 1992. The Company has the option to retire additional shares through the sinking funds.
At December 31,1979 the Company had reserved 1,490,440 authorized but unissued shares of common stock for issuance under its dividend reinvestment and common stock purchase plan and 77,934 authorized but unissued shares of common stock for issuance under its employe stock purchase plan.
NOTE 4.
SHORT-TERM BORROWINGS At December 31,1979 short-term borrowings of $130,000,000 include $105,000,000 under agreements with domestic banks and $25,000,000 with foreign banks. At Decem-ber 31,1978 short-term borrowings of $71,000,000 include $21,000,000 domestic and
$50,000,000 foreign under the agreements.
Under a domestic credit agreement, the Company can borrow, repay, and reborrow up to a maximum of $100,000,000. This five year agreement expires July 31,1984 unless the Company exercises a three year term option. At the Company's option, interest rates on borrowings are based (i) on the London interbank offered ate (LIBOR) at the time of cach borrowing or (ii) on the higher of the prime commercial. ate or the 90-119 day prime commercial paper rate plus % of 1% (Base Rate). Interest rates during the first two years of theagreementareasfollows:
Utdization LtBOR Base Rate Up to $50 mdhon UBOR plus % of 1%
Base Rate
$50 up to $100 mdhon LIBOR plus % of 1%
105% of Base Rate The agreement provides for a commitment fee of % of 1% per annum on the unused commitment and a facility fee determined by multiplying $1,050,000 at the end of each quarter by the average daily Base Rate.
The Company has other domestic lines of credit totaling $25,000,000. Borrowings under the lines are at the prime commercial rate. It is understood that compensating cash bal-ances equal to 10% of the lines will be maintained; however, there are no legal restric-tions as to the withdrawals of such balances.
Under the foreign credit agreement, which expires on October 31,1980, the Company may borrow up to a maximum of $50,000,000. The interest rate on borrowings is % of 1% above the London interbank offered rate at the time of each borrowing. There is a commitment fee of % of 1% per annum on the unused commitment if utilization is less than 50% and % of 1% if utilization is 50% or higher.
Average daily amounts of short-term borrowings outstanding during 1979 and 1978 were
$55,876,000 and $69,685,000; weighted average daily interest rates on such amounts were 13.2% and 9.8%; weighted average interest rates at Decembe: 31,1979 and 1978 were 15.7% and 12.1%. The maximum amount of short-term borrowings outstanding during 1979 and 1978 was $130,000,000 and $100,000,000. The interest rates exclude the effect of commitment fees, facility fees, and compensating cash balances.
NOTE 5.
LONG-TERM DEBT The Indenture securing the Company's first mortgage bonds constitutes a direct first mortgage tien on substantially all utility property and franchises, other than expressly excepted property, and a portion of the Boardman coal plant.
Under an agreement with a trust, the Company finances its fuel for the Trojan nuclear plant. In addition, the trust can provide funds, not to exceed 40% of the trust's assets, to the Company on its promissory note issued to the trust.The maximum financing pro-vided by the agreement is $100,000,000. The fuel notes are repaid as the fuel is con-J sumed and all borrowings, includ,1g those on the promissory note, are due March 1, i
198%i the earliest or March 1,1988 at the latest. At December 31,1979 the weighted 1
cuerage interest rate on outstanding notes was 14.8%. The estimated current portion of the fuel notes ($9,055,000) is included in current liabilities.
To finance a portion of the Company's share of costs for the Boardman coal plant, a wholly owned subsidiary of the Company entered into a $125,000,000 loan agreement
28 Portland General Electric Company and Subsidiaries with a group of banks. Loans under the agreement are secured by plant and are guaran-teed by the Company. The interest rate on borrowings is equal to 117% of the prime commercial rate. There is a commitment fee of b of 1% per antium on the unused com-mitment. Any loans outstanding at completion of the project or December 31,1981, whichever is earlier, are to be paid in six equal semi-annual installments.
The following principal amounts of Icng-term debt become due for redemption through sinking funds and maturities during the years 1980 thrcugh 1964.
Long-term Debt Sinking Funds Maturities (Thousands of Do.lars) 1980.
$3.634
$40,000 1981.
4,300
- 1982, 9.041 40,000 1983.
9,541 1984 9.301 56,480 The sinking funds include $1,701,000 in 1980, $2.201.000 in 1981, $2,701,000 in 1982, $3,201,000 in 1983 and $3.201,000 in 1984 whsch, in accordance with the terms of the Indenture, the Company anticipates satisfying by pledging available additions equal to 166%% of the sinking fund requirements.
NOTE 6.
FINANCING AND CONSTRUCTION The Company's utility construction program, which is subject to continuing review and adjustment, is estimated in the range of $875,000,000 to $975,000,000 for the years 1980-1982 (including ADC and nuclear fuel). This estimate is based on the Company's present plans for joint ownership of certain future generating facilities (see table on page 7).
The Company presently expects that for the above three-year period approximately 85%
to 90% of its cash construction costs will require external financing including the sale of equity and debt securities. The issuance of additional preferred stock or first mortgage bonds requires the Company to meet certain earnings coverage provisions Presently the Company is unable to issue preferred stock and may be unable to do so during the balance of 1980 After the sale of $55,000,000 of first mortgage bonds in February 1980, the Company estimates it will be unable to issue additional bonds until later in the year.
The ability to meet the earnings coverage provisions to issue additional preferred stock and first mortgage bonds is primarily dependent upon improved earnings for 1980 and upon the adequacy and timeliness of rate relief thereaf ter.
In the absence of adequate and timely rate relief, the Company will consider reducing its construction program through the sale of partialinterests in future generating units and/or the delay in the construction of future facilities, which could impair the quality and reliability of service to its customers.
Construction work-in-progress includes the Company's share of the Pebble Springs and Skagit nuclear projects. A summary of the expenditures as of December 31,1979 follows:
[
Pebble Spnngs Skagit (Thousands of Dollars)
' Equipment.
S 54,221
$39,960 i
ADC 25,789 17,440 l
Other-including engineering and licensing 33,370 32.324
$113.380
$89.724 The above projects have been significantly delayed due to regulatory proceedings and litigation relating to Federal and state laws and regulations, including environmental
{
considerations. As a result of the accident in 1979 at the Three Mile Island nuclear plant in Pennsylvania, additional delays at both the Federal and state level were encountered which made it necessary to reschedule the estimated completion dates for these proj-ects until in the early 1990's. These delays will increase substantially the estimated cost of the projects.
Although the outcome of regulatory proceedings and litigation cannot be predicted with certainty, management presently believes the two projects will ultimately be built. If the necessary licensing of a particular project cannot be obtained, then subject to regulatory approval, the Company would either attempt to transfer the project to another location and obtain construction approval and/or amortize any abandonment costs for account-ing and ratemaking purposes over an approved length of time.
The Commissioner,in a recent order involving minor expenditures of another Oregon electric utility, stated that Ballot Measure 9 (adopted by the voters of Oregon in the 1978
r y
29 general election) caused the shareholders to assume the risks associated with planning and constructing new plants until the plant is placed in service. In addition, the order stated that if a plant is not completed and is abandoned, the related costs would not be allowed for ratemaking purposes. The Company and its legal counsel do not agree with th;a interpretation of the ballot measure, and would contest vigorously any attempt to apply it to any projects abandoned prior to being placed in service.
NOTE 7.
COMMITMENTS AND CONTINGENCIES (a) Utility construction expenditures for 1980 are presently estimated at $300,000,000 to $325,000,000. Purchase commitments outstanding, relating principally to con-struction, totaled approximately $265,000.000 at Decem'>er 31,1979. Cancellation of the purchase commitments could result in substantial cancellation charges. Other substantial commitments have been made under long-term agreements to provide nuclear fuel for the Trojan nuclear plant and proposed additional nuclear plants and to provide coal for the Boardman coal plant. Such agreements may be terminated and would require payment of termination charges.
(b) The Company has entered into long-term power purchase contracts, spiring be-tween 2005 and 2018, with certain public utility districts in the state of Washington.
Power purchase prices are bas 9d on the Company's proportiorate share of the operating and debt service costs of each project whether or not operable. Significant statistics regarding those hydroelectric projects are as follows:
Rocky Reach Priest Rapids Wanapum Wells Revenue Bonds Amount sold to finance projects.
$313.100.000 $166.000.000 $197.000.000 $207,600.000 Outstanding at December 31.1979.
$231.974,000 $112,248.000 $135.600,000 $192.200,000 Company's current share of output, capacity and cost Percentageof output.
12.0 %
17.1 %*
21 9 %*
30.5%*
Capacity in megawatts, based on nameplate ratir.g 142 135
- 182 236 Est mated current annual cost, including debt service "
2,600,000 $ 2,300.000 $ 3.000,000 $ 4.600.000 Completiondate.
1971 1961 1964 1969 Date of long-term contract expiration.
2011 2005 2009 2018
- The Company's percentage of output of Priest Rapids and Wanapum may be reduced by August 31, 1983 to 13 9% and 18.7% and Wells may be reduced to 20.3% by 1998.
" Annual cost will change in proportion to the percentage of output allocated to the Company.
In 1979 the Company entered into a long-term power purchase contract, expiring iii 2017, with the city of Portland, Pregon for 100% of the power from a hydroelectric project to be constructed. Pow ' purchase prices cover the operating and debt ser-vice costs of the project whether or not operable. The city of Portic1d sold
$38,000,000 of revenue bonds to finance the project. The Company will commence paying debt service costsin 1982.
(c) Tlie minimum annual rental commitments of the Company under noncancelable leases at December 31,1979 are as follows.
Non-capitalized Sublease Financing Rentals Basic Leases (Credit)
Total (Thousands of Dollars) 1980
$ 10.611
$ 5.993 $ (1,942) $ 14.662 1981.
9,752 5.832 (1,905) 13.679 1982 0,726 5,715 (1.896) 13.545 1983 9.638 5,476 (1.563) 13.551 1984 9,347 4.951 (928) 13.370 Remainder.
250.622 64.898 (3.473) 312,047 Total.
$299.696 $ 92.865 $ (11.707) $380.854 During 1979 the Company entered into a salelleaseback for its share of the coal handling facilities at the Boardman coal plant for a basic lease term of 25 years. The Company has an option to renew the lease for five years at one-half the average lease rate paid during the basic lease term and an additional fifteen years of renewal options at the then fair rental value. The Company has options, commencing in 1990, to repurchase the facilities for the greater of fair market value or a stipulated
30 -
Portland General Electric Company and Subsidiaries lated loss value specified in the lease.The lease represents $68,731,000 of basic lease commitments.
During 1978 the Company entered into a sale / leaseback of its headquarters com-plex for a basic lease term of 40 years with up to 25 years of renewal options. The Company has options, commencing in 2003, to repurchase the complex for fair market value as encumbered by the lease. At the end of the basic lease term the Company must offer to purchase the complex for $15,000,000. A mortgage on the complex of $31,737,000 was assumed by the lessor and is guaranteed by the Com-pany This lease represents $196,608,000 of basic lease commitments and the
$8,791,000 sublease rental credits, for a net rental commitment of $187,817,000.
Lease commitments on two combustion turbine leases, expiring in 1998 and 1999, represent $83,846,000 of non-capitalized financing leases. In the event of certain contingencies the Company may be required to purchase the turbines at a maximum price of $55,850,000 in 1980 and at decreasing amounts thereafter. At the expiration of each lease the Company has an option to renew the lease for five years at the then fair rental value or to purchase the turbines at the then fair market value.
Substantially all other leases with renewal ootions provide for negotiation of the rental amount at the time such options are exercised. Other leases with purchase options are not material.
In compliance with the reporting requirements of the Securities and Exchange Commission, certain leases presently accounted for as non-capitali7ed firune rig leases meet the criteria for classification and accounting as capitalleaset L such leases had been accounted for as capital leases, assets would have increased by
$46,587.000 and $44,764,000 and liabHities would have increased by $51,874,000 and $50,977,000 at Decomter 31,1978 and 1979. The resulting net increase in expenses would have been $1,030,000 in 1978 and $1,055,000 in 1979. For rate-making purposes these disclosures are not meaningful since these assets were not used by the Commissioner in determining rates charged to customers.
NOTE 8.
SUPPLEMENTARY INCOME INFORMATION Years Ended Decem_ber 31 1979
_ 1978 1977 1976 1975 Taxes other than income taxes (Thousands of Dollars)
Property
$15,798 $17,322 $17,802 $15.897 $12,784 Payroll.
2,448 1.904 1,645 1,306 1.061 City taxes and hcense fees,
5,340
-e,592 4,003 3.370 2,779 Other.
580 462 501 399 333 Total.
$24,166 $24.280 $23.951
$20.972 $16,957 Rentals charged to operating expenses Basic rentals' S 2,455
$ 2,659
$ 1.838
$ 1.231
$ 1.141 Contingent rentals" 809 726 429 159 160 Non-capitahzed financing leases
- 5,526 5.191 5,110 4.595 4.376 Total.
S 8,790 Depreciation and amortization
$_8.576
$ 7,377 s 5,985
$ 5.677 Utility.
$33,642 $31,587
$28,159
$22.112
$13.890 Nonutihty.
713 415 Amortization of nuclear fuel.
13,198 2.708 10.94 2.596 Total.
$46,840 $35,008
$39.54S
$24,708
$13.890
- See Note 7(c) for details concerning the Company's long-term lease commitments.
" Based on kwh of gross generation at certain Company hydroelectnc projects.
The amounts for maintenance and repairs. depreciation and taxes other than income taxes included in the Consohdated statements of Income but not set out separately therein are not matenal. The amounts of amortization of intangible assets and advertising costs are not matertal NOTE 9.
LITIGATION in February 1979 the Company filed suit in United States District Court for the District of Oregon seeking to recover from Bechtel Corporation and Bechtel Power Corporat!on all costs incurred as a result of errors in the design of the Trojan plant's control building.
The costs included excess replacement power costs of $26 million incurred during the shutdown of the plant during the second half of 1978 and an estimated $6.5 million for other expenses, including any necessary modifications to the plant.
E
i 7
31 in March 1979 Bechtel Corporation and Bechtel Power Corporation filed their answer to the complaint alleging numerous affirmative defenses and counterciaims of approxi-mately $108 million. In the opinion of management and its legal counsel the counter-claims have little merit.
ff0TE10. SUBSEQUENT EVENTS (a) The Public Utility Commissioner of Oregon granted the Company a general rate increase averaging 17.7% effective for service on and after January 14,1980.
(b) During January 1980 the Cc.npany sold 4,000,000 additional shares of common stock for net proceeds of $51340,000.
(c) During February 1980 the Company sold $55,000,000 of 13%% first mortgage bonds due 2000.
NOTE 11. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following quarterly information is presented for 1979 and 1978. Variations in earn-ings information between cuarters are primarily due to the seasonal nature of the Com-pany's business.
March 31 June 30 September 30 December 31 1979 (Thousands of Dollars)
Operating revenues
$97.679
$81,081
$72.224 598.997 Operating income.
530,214 S20.682 515,794 S(1,401)
Net income.
522,729 517,134 5 9.974 S(3.715)
Income available for common stock.
$19.260 513,681 5 6,520
$ (7.169)
Common stock Average shares outstanding.
27,740,339 31,171,754 31.284.492 31,419.060 Earnings per share
- S 69 5 44 S 21 5( 23)
)
1978 Operating revenues.
$80.895 571,449 569,725
$81.609 i
Operating income,
530,184 S19,029 519,885 514,141 locome before cumulative effect of change in accounting pokcy.
520.699 510,388
$12.051 5 5646 l
Net income...
$28.544
$10,388
$12,051 5 5.646 Income available for common stock.
$24.990 5 6.847 5 8.511 5 2.106 Common stock Average shares outstanding 22.285.373 24,676.933 25,898.094 25.979.510 Eamings per share'
$1.12" 5.28 S.33 S.08
- As a result of dilutive effect of snares issued dunng the penod. quarterly earnings per share cannot be added to arnve at annual eamings per share.
" Includes the effect of the change in accountir g pohcy relating to the recording of unbilled revenues (5.35 per share).
REPORT OFINDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors and Stockholders of Portland General Electric Company:
We have examined the consolidated balance sheets and statements of capitalization of Portland General Electric Company (an Oregon corporation) and subsidiaries as of December 31,1979 and 1978, and the related consolidated statements of income, retained earnings and changes in financial position for each of the five years ended December 31,1979. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the financial posi-tion of Portland General Electric Company and subsidiaries as of December 31,1979 and 1978 and the results of their operations and the changes in their financial position for each of the five years ended December 31,1979 in conformity with generally accepted accounting principles, which, except for the change (with which we concur) in the method of recording revenues as described in Note 1 (Revenues), have been applied on a consistent basis.
g%
pb ":s W b.
Portland, Oregon, February 15,1980.
. w-h
~
32
- Portland General Electric Company cnd Subsidiaries y
Su alementary Information t7 Disclose the Effectxf Chrn in Prices (unaudit.d>
Financial statements presented in accordance with generally accepted accounting principles report historical costs which do not reflect the changing value of the dollar which occurs during periods of rapidly changing prices. Accordingly, such statements do not adequately measure the impact of in-
~ flation on business enterprises. In recognizing the need to assist readers of financial statements in assessing tha; impact, selected information on the effects of changing prices is presented.
Two methods of measuring the effects of changing prices are presented in the tables.
The first method provides data which has been adjusted for general price changes by using the Consumer Price Index for all Urban Consumers as a broad based measure of general inflationary effects. This method provides financial information in dollars of equivalent value (constant dollars).
The second method provides data reflecting the effects of changes in specific prices (current costs) by n.Oxing the existing plant using the Handy-Whitman index of Public Utility Construction Costs.
This mesure reflects the current cost of replacing existing plant, rather than the historical cost.
Current ( 1st amounts differ from constant dollar amounts to the ex%nt that specific pricos have in-creased niore or less rapidly than prices in general.
Depreciation expense is the only item of tne historicalincome statement which has been adjusted in arnving at constant dollar and current cost amounts of income. Revenues and other amounts are considered to reflect the average price levels for the year, and accordingly have not been adjusted.
STATEMENT OF INCOME FROM OPERATIONS ADJUSTED FOR CHANGING PRICES ForThe Year Ended December 31,1979 Conventional Constant Dollar Current Dollar Historical Cost in Average Costin Average Cost 1979 Dollars 1979 Dollars (Thousands of Dollars)
Operating revenues.
$349,981
$349.981
$349,981 Purchased power and production.
144,633 144,633 144,633 Other operating and maintenance expenses 94,117 94,117 94,117 Depreciation expense.
33,642 58,000 66,000 Income tax expense 12,300 12,300 12,300 Interestexpense..
Allowance for funds used....
80,452 80,452 80,452 during construction (60,015)
(60,015)
(60,015)
Other income (1,270)
(1,270)
(1,270) 303,859 328,217 336,217 income (excluding reduction to net recoverable cost).
$46,122
$21,764*
$13,764 Ir$ crease in specific prices (current cost) of plant, held during the yeart.
$233,000 Reduction to net recoverable cost....
$(173,000)
(51,000)
Effect of increase in general price level (347,000)
Excessofincreaseir general price level overinc: ease in specific prices (after reduction to net recoverable cost)..
(165,000)
Gain from decline in the dollar's purchasing power on net amounts owed 134,000 134,000 Net.
$(39,000)
$(31,000)
- Including the reduction to net recoverable cost, the loss from operations on a constant dollar basis would have been $(151,236.000).
tat December 31,1979, current cost of electric utility plant, net of accumulated depreciation, was
$2,960,000,000 while historical cost (net cost recoverable through depreciation) was $1,658,797,000.
y 33 Depreciation was determined by applying the Company's actual depreciation rates to the corre-sponding constant dollar and current cost plant amounts.
. No adjustments have been made to the income tax expense, to reduce the complexity of the sup-plementaryinformation.
Under Public Utility Commissioner of Oregon (PUC) regulations, only the historical cost of plant is recoverable in revenues as depreciation. To reflect this limitation the current cost and constant dollar cost of plant which is not presently recoverable in rates as depreciation is shown as a " reduction to net recoverable cost".
- T) properly reflect the economics of PUC regulation, the reduction to net recoverable cost should be offset by the " gain from decline in the dollar's purchasing power on net amounts owed". Since only the historic cost of depreciation is recoverable, present depreciation provisions are inadequate to maintain the cash flows needed to replace plant. However this factor is offset by debt which will be repaid in dollars having less purchasing power. The " gain from decline in the dollar's purchasing
' power on net amounts owed ' is primanly attributable to the substantial amount of debt which has been used to finance plant.
The following information should be viewed as an approximation rather than as a precise measure of changing prices.
SELECTED FINANCIAL DATA ADJUSTED FOR CHANGING PRICES For The Years Ended December 31, 1979 1978 1977 1976 1975 (Thousands of Average 1979 Dollars)
Oper: ting revenues.
S349,981
$337,869 S303,130
$277,694
$242,676 Hl:t Trical Cost Information Adjusted f ~r Generallnflation (Constant Dollar Information)
Incom3 from operations
$21,764 incom3 per common share after pr:ferred dividend requirement.
S.26 N;t assets at year end S522,000 Historical Cost Information Adjusted for Changes in Specific Prices (Current Cost Information) income from operations.....
$13,764 incoms per common share after pr:f;rred dividend requirement.
0 Exc;ss of increase in general pricsievel overincrease in specific prices (after reduction to net recoverable cost)...
S(165,000)
Net tssets at year end S522,000 GeneralInformation Gain from decline in the dollar's purchasing power on net cmounts owed......
S134,000 Cash dividends declared per common share.
$1.70
$1.89 S2.04
$2.09 S2.13 M::rkit price per common share
$12.29 S17.95 522.63 S25.41
$21.57 tt y ar end.
Av;, rage Consumer Price Index.
217.4 195.4 181.5 170.5 161.2 Portland General Electric Company and Subsidiarie3 g
Eleven-Year Summ:ry 4
1979 1978 SALES AND.
Kilowatt-Hours Sold (millions)
CUSTOMERS Residential 5,73.
5.365 Commercial 3,711 3,403 Industrial.
3,585 3,251 Miscellaneous 112 113 Sales for resale 513 1,173 Total.
13,652 13,305 Operating Revenues ','nousands)
Residential
$159,135
$143,829 Commercial 96,462 77,000 industrial.
72,839 52,662 Miscellaneous 9,414 12,107 Sales for resale 12,131 18.080 Tota!.
$349,981 S303,678 Average price per kwh (sales to ultimate customers).
2.54' 2.3 08 Customers (at year end)
Residential 423,389 407,056 Commercial 54,029 52,107 Industrial.
184 187 Miscellaneous 1,367 1,347 Sales for resale 2
1 Total..
478,971 460,698 Residential Service (aversqe per customer)
Annualuse(kilowatt-hours).
13,814 13.459 Annual revenue
$383.54
$360.81 Price per kilowatt hour 2.78' 2.68' ELECTRIC Kilowatt Hour Output (millions)
OPERATIONS Generated (net)-hydro.
2,285 2,313 Generated (net)-thermal.
4,523 1,307 Purchased-primarily hydro.
7,754 10.819 14,562 14,439 Losses and company use.
910 1,134 Total Sales 13,652 13.305 Average Cost per Kwh Generated (exclusive of fixed costs).
1.12'
.78' Purchased
.97'
.71' UTILITY Gross Additions (thousands).
$254,289
$278,265 PLANT Net Plant (thousands).
$1,658,797
$1,482.862 STOCKHOLDERS' Common Stock Equity (thousands)
S551,612 S478,759 l
EQUITY AND Book vales per share
$17.55 S18.42 LONG TERM Dividends paid per share
$1.70
$1.70 DEBT (December 31)
Average shares outstanding 30,403,911 24,709,977
)
Earnings per share S1.06 S1.72 Preferred Stock Equity (thousands).
$150,000
$151,500 l
Dividend requirement (thousands)
S13,830 S14,175
)
Embedded cost 9.1%
926 1
Long-Term Debt (thousands)
$754,441
$735,119 interest on debt (thousands)
$70,326 558.206 Embedded cost 9.3%
926 EMPLOYEE Numberof Employees (December 31) 2,789 2,579 DATA Operating Payroll (thousands).
$37,105
$31,631 Construction and Other Payroll (thousands).
$25,183 521,293
T 35 1977 1976 1975 1974 1973 1972 1971 1970 1969 5,120 5,024 4.982 4,700 4,685 4,624 4,414 4,0?3 3,895 3,175 3,045 3,169 2,632 2,649 2,509 2,235 2,086 1,941 3,486 3.439 2.699 3,364 3,285 3,135 2,788 2,524 2,340 109 107 104 106 113 119 134 141 137 44 394 530 600 829 1,781 1,391 930 1,251 11,934 12,009 11,484 11,402 11,561 12,168 10,962 9,704 9.564 S130,052
$109,571 S 88,351 S 73,124 5 63.007 5 57,142 S 54,249 5 45,206 5 43,595 64,695 56,027 53,628 41,881 36,691 31,983 29,155 25,192 23,669 47,721 39,654 24,504 20,888 16,806 14,294 13,106 11,070 10,163 6,996 7,073 8,898 6,970 5.235 5,444 5,639 4,933 4,625 3.609 5,462 4,561 3,138 3,094 3.580,
2,770 1,889 2,486
$253,073
$217,787
$179,942
$146,001
$124,833 S112,443
$104,919 S 88,290
$ 84,538 2.08' 1.80' 1.55' 1.29' 1.11' 1.02' 1.04'
.96'
.97' 389,700 371,315 358,438 347,671 338,188 323,729 318,132 304,504 295,003 49,883 47,071 45,547 44,143 41,521 40,373 38,076 36,919 36,040 192 192 187 199 188 186 164 147 149 1,444 1,367 1,370 1,397 1,047 1,125 1,906 1,949 1,947 2
3 3
1 5
2 1
1 2
441,221 419,948 405,545 393,411 380,949 365,415 358,279 343,520 333,141 13,455 13,787 14,139 13,733 14,144 14,334 14,197 13,427 13.472
$341.76 S300.68
$250.74 S213.67
$190.22
$177,14
$174.49
$150.87
$150.78 2.54' 2.18' 1,77' 1.56' 1.34' 1.24' 1.23' 1,12' 1.12' 2,114 2,537 2,693 2,753 2,282 2,779 2,685 2,402 U9 4,675 1,147 170 152 328 5,936 9,214 9,613 9,465 9,806 10,463 9,265 8,189 8,012 12,725 12,898 12,476 12,370 12,416 13,242 11,950 10,591 10,366 791 889 992 968 855 1.074 988 887 802 11,934 12,009 11,484 11,402 11,561 12,168 10,962 9,704 9,564
.52'
.46' -
.33'
.39'
.25'
.10'
.t2'
.08'
.08'
.68'
.34' 43'
.28'
.31'
.24'
.24'
.24'
.24'
$201,896 S191.475 S182,313
$153,580
$152,198 S110,431
$50,298
$34,555
$26,009 j
$1,245,532 S1,088,253
$946,165
$785,312 5668,336 S529,724 S430,474
$390,588 S364,148 1
1
$410,323 S361,070
$283,938
$241,965
$107,746
$182,823
$157,052
$132,579
$118,434
)
S18.45
$18.94
$18.32 517.92 517.d8
$17.41 E' G.53 S15.60
$14.99 l
$1.685
$1.625
$1.565
$1.51 S1.465
$1.41 S1.36
$1.28 S1,195 21,414.344 -
17,687,431 14,333,333 12.125,000 10,500,000 9,666,667 8,666,667 8,350,000 7,900,000 S1.09 S2.27 S2.52
$2,17
$2.04 S2.11 S2.00
$1.63
$1,79
$154,500 S130,500
$108,500
$80,000 S80,000 S40,000
$10,000 S10,000
$13,657 511,812
$9,818
$6,577
$5,247 S2,196 5976 S152 9.2%
9.3%
9.1%
8.2%
8.2%
8.4%
9.8%
9.8%
S656,724
$533,450 S444,991
$335,344 S326,403
$277,669 S261,529 S244,178
$207,110
$48,528
$40,711
$28,519
$20,734
$18.591 S15,132
$13,667
$11,377
$9,903 8.3%
8.0%
8.1%
6.3%
6.2%
5.8%
5.6%
5.4%
4.7%
2,441 2,311 2,116 2,008 1,881 1,767 1,704 1,604 1,502 S27.808
$22,798
$18,498 515,703
$13,982 S12,879
$12,151 S10,746
$9,925 i
$19,647 S18,564-
$18,033 S14,493
$12,117
$10,039
$8,748
$7,443
$6.575 h
36 Portland General Electric Company 1
Market and Dividend Inform" tion COMMON STOCK The Company's common stock is principally traded on the New York Stock Exchange.
Th following table shows the high and low sales prices of the common stock on the composite tape (as reported by The Wall Street Journal) during the respective periods.
1979 1978 Ouarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th High 18%
17%
17%
16%
20 %
19%
19%
19%
Low.
16%
16 %
15 13 18 %
18 18 4 16%
Ouarterly cash dividends paid per share were at the rate of 42W' (January, April, July and October of 1978 and 1979).
PREFERRED STOCK The 11.50% and $2.60 series of preferred stock are listed on the New York Stock Ex-change. The following table shows the high and low sales prices of these two series on the composite tape (as reported by The Wall Street Journal) for the respective periods.
The remaining five series are traded infrequently over the counter and disclosure of quarterly price ranges is not meaningful.
1979 1978 Quarter 1st 2nd 3rd 4th 1st 2nd 3rd 4th
$2.60 High.
25%
25 25 23 %
28 %
28 28 26 %
Low 23 %
23 %
23 19%
27 26 %
26 23 %
11.50*. High.
106 %
104 %
105 100%
111 %
109 %
110 %
107%
Low 100%
100 %
100 90 %
108 105 %
105 99%
Ouarterly cash dividends were paid on each class of the Company's preferred stock at its stated rate during 1978 and 1979.
TRANSFER AGENT and REGISTRAR COMMON STOCK and PREFERRED STOCK United States National Bank of Oregon Stock Transfer Department R O. Box 3850 Portland.OR 97208 503-225-6474 Portland General Electric Company (Home Office) 121 S.W. Salmon Street Portland, OR 97204 503-226-8333 NEW YORK STOCK EXCHANGE Trading Symbol: PGN A copy of Form 10-K including the financial statements and the schedules thereto is available withnut charge upon wntten request to Gavin F. Fale, A3sistant Vice President-Finance, at the address below; PORTLAND GENERAL ELECTRIC COMPANY 121 S.W. Salmon Street.
l Portland, Oregon 97204 I
l i
l
SENIOR OFFICERS BO ARD OF DIRECTORS Drector soce FrandA. Warren Warren W. Braley 1957 Chairmanof theBoard Partner. Braley & Graham Portland-Buck and Opel automobile dealer
& Chef Executive Officer
5 J-
^ -
' '- A William E. Love 1977 Robert H. Short C., airman and chief Executive Omcer.
Presdent Equdable savings & Loan Association. Portland Joseph L. Williams Ernest H. Miller 1963 Executive Vice President President. Mortgage Bancorporaton, salem-real estate loans and investments throughout Oregon Glen E. Bredemeier Vice Presdent-Power Wade NeWbegin*
1948 Operatens Presdent and Chairman of the Board. R M Wade & Co Portland-manufacturer arwi dstnbutor of pumping. farm and imgation equipment James W. Durham Vee Presdent. General Counsel Robert W. Roth 1972 and secretary President and Chief Executive Offcer, Jantzen Inc.. Portland a wholly owned wbsidiary of Blue Bell Inc -manufacturer of sportswear and swirnwear Ken L. Harrison
-- - =-
Vice President-Finance John L. Schwabe 1977 and Ctwef Financial Off cer Partner, schwabe. Williamson. Wyatt. Moore and Roberts Portland-attorneys i
Dotalas E. Heider 19h1 Vice Presdent-Public Affairs Robert H. Short Charles L. Heinrich Vce Presdent-Regulation.
Eberly Thompson 1960 Data servces Portland--personalinvestments William June W. T. Triplett, Jr.
1969 Vce President-Corporate Formerly Presdent and Chief Executive Officer. Baza'r. inc.. Portland Planrung James J.Walton 1948 William J Lindblad Vice Presdent-Engineenng.
"9 'N""9 constnact' "
Earl Wantland 1973 Presdent and Chef Executive Officer. Tektronix. Inc. Beavertors Estes Snedecor
"'U
- C 'U" Vce Presdent-Admirustration F. D. Wieden Frank M. Warren 1949 Chairman of the Board and Chief Executive Offcer.
Vice Presdent-Public Relations Portland General Electrc Company. Port and-etectnc utihty sh03,y,,,n William W.Wessin er 1968 p
Chairman of the Board Bh Weinhard Company. Portland.
Operatons a wholly owned subsidiary of Pabst Brewing Co James N. Woodcock Robert J.' ilhelm
"~' ' ' ' ' ' ' "
W 1973 Vice President and Treasurer President. Wilhelm Trucking Co., Portiand-trucking and warehousing James L. Staines
~
' ~~
~
' " ' '~
Ral h E. Williams 1963 Controiler Pr
- t. Williams investment Co, Portland-personal investments 1
g
^ '
g
.q' s t,, A.,,
m Board of Directors.
~
back row,left to ng. ht:
' [
~
i y
F.M Warren.J L. Schwabe,
~
R.W. Roth. W.E. Love, ;
E. Wantiand, R H. Short, t R.E. Williams and E.H. Miller. ;
- j
~
s i
Front row. left to r ht:
^
"^
J.J. Wa! ton, W.W. Br y, : -
W.T. Triplett, Jr.,.
~
f I'
(
E. Thompson, S
-. ?
- i
. J j
W.W. Wessi r, and -
C.
e R.J.
ilhelm.
x
?
[ -
Not shown is W. Newbegin, :
~
=
, y Advisory Director. i w i
y~
~
s :
'Mr. Newbegin transfered to l -
L
=
Advisory Director status in
.,e
- y
,av September 1979 and.
5
,iiW.
continues ta provide the 3
Company valuable counsel I
and service in his new
~
capacity.
~
E
l t
l
\\
m m 121 S.W. SALMON STREET PORTLAND, OR 97204
-,e m
x s
c
~
6 g.
9 b
-h I
v- !$
s S
A e
y 9
3 g
+
M~
A*
=
+q g.
- m n
.+
4 4....
W S.
j a
e S'
N-4 g
/
N' e
a h
4
.gf n
, +-
t.-
s.
4 T,-
- 'e-4 s=
9' g:
^~
' ~
l..
e.,
s.
. s Y
" e
Swift Hydroelectnc Project in Washington a ;m%m m,
.,em,yp yg%:
rg m
'c.
-,.c l y,a;
'%(w,
- - +-> 4r i
^
.M Of E.kd', '
shD,+YD/M3 N,4' 93
- f.ihq:ry 1 M a m a %a
- g ta;;gg sm; w
n.
~:
s 1.:[i}
o sy.
m'4 '
- qp' y' *f(
2^'
r:
y
.O a, 9
+,
.,., h s
.u. -m.
s m
.sz e w m a w sm. a S.w? pan &MCL %w~.
- w a _s s.-
.s
' ".ddbwMtfs l.p3
' a One of Nl RC ( ) s ( < ni!
Mines in W >ntana N
PACIFIC POWER x
& LIGHT COMPANY 4
..disf. gce and consolidated subsidiaries p37q A N N UAL REPORT
\\u s
7,9 a
a: :
Y
' S fy' l
r a
3,
A
?
.a v
c c y
f 7 tv.
i v
n W" __"d w
9 9
6 is t
h -
, m.ci Ti -
7' s
4
c.y;;gb =
q %,
J:.'.'. : -. ' ^
.g f stys Aj
c~-
c- ;.;..%.::,9,,. ;'
- ..v,
. ;..+,.;g.
.g-a, I
's pfh.,, ? f _ ' '.'
$h,.5,.[.*,
y
' '{
~ k ' :. '
~
' ~
,.-l.
?
w u.-
.![,[
i
- t. s.*',
o.,
E r
. $i
[-
+:
^
$p
'k s.;.. f_,
.W
w -
y A d g
s
,,7 3**
@f
.m 4 ',
- 3. -.
4 q,"
I
'f y' Y.
[
(f. ;;
4..
t.
1 J
. i-'
g.
3
\\.,
w g
1 J
I
?
.l d
g
't i
e-k t*
4.
?g '
~
7.
, /
, i N
, 0
,e' p
/-
E.
('
~
}, -gg'4uggg:..
L gy. _
yf-
. MS_
E'
'~_
j W'
f g.
q,,
y P
M f
..A T " '
^
s t.g q
q.
=
6
,7 y
,