ML19326B078
| ML19326B078 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse  |
| Issue date: | 11/06/1970 |
| From: | CLEVELAND ELECTRIC ILLUMINATING CO. |
| To: | |
| References | |
| NUDOCS 8003060853 | |
| Download: ML19326B078 (7) | |
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UNITED STATES OF AMERICA ATOMIC ENERGY C0:0!ISSION
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In the ?Stter of
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THE TOLEDO EDISON CCMPANY
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and
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Docket No. 50-346 THE CLEVELMID ELHERIC ILLUMINATING COMPANY)
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Davis-Eesse Nuclear Fower Station FINANCIAL QUALIFICATIONS OF THE CLEVELAND ELECTRIC ILLUMINATING COMPANY TESTIMONY OF RICFluRD A. MILLER November 6, 1970 8008060 ffj I
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FII;ANCIAL QUALIFICATIO!!C S.I.
THE CLEVELAND ELECTRIC ILLUMINATING CO?EANY 1.
QUALIFICATICUS OF WITNESS My name is Richard A. Miller. I am Vice President, Finance of The Cleveland Electric Illuminating Company.
I took my undergraduate work with a major in Business Administration at Western Reserve University in Cleveland, Ohio, graduating in 1950.
I graduated from Harvard Law School with a degree of Bachelor of Inws in 1953 Immediately after my graduation from Harvard Law School, I joined the Legal Department of the Chesapeake & Ohio Railway Company where I did general corporate legal work, gradually developing in the specialization of tax work.
On October 30, 1960, I left the Chesapeake & Ohio Railway Company and took a position with The Cleveland Electric Illuminating Company as a Senior Tax Accountant and became principal tax consultant on December 1, 1961.
On February 1, 1962, I became Controller of The CIeveland Electric Illuminating Company. On April 23,1%9, I became Vice President, Finance, which position I hold today.
I am Chairman of the Advisory Committee of the Accounting Division of the Edison Electric Institute, a member of the Cleveland Chapter of the Financial Executives Institute serving as Secretary in 1966-1967 and Chairman of the Mem-bership Committee in 1968-l%9, a member of the Tax Executives Institute and Director cf the Lake County National Bank of Painesville.
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I am also active in several civic organizations.,
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LESCRIPTION OF THE CLEVELAND ELECTRIC ILLLMINATING COMPANY The principal offices of the Company are located in The Illuminating Build-ing, P. O. Box 5000, 55 Public Square, Cleveland, Ohio 44101. The Company was incorporated under the laws of Ohio in 1892 and is a public utility engaged primarily in the production, transmission, distribution and sale of electric enercy for lighting, heating, cooling and pover purposes with-ir Ohio in an area approximately 1,700 square miles which extends about 100 miles along the south shore of Lake Erie. The Company is also engaged in the production, distribution and sale of steam for heating and other i
purposes in the downtown area of Cleveland. Approximately 98% of the Company's operating revenues during the twelve month period ended December 31,1%9, was derived from the sale of electric energy.
The Company serves approximately 655,000 customers. Total operating rev-enues during the calendar year 1969 vere $218,497,611.
Energy Sales have shown an increase of 7 5% per year compounded during the five year period, 1965 through 1969 The Company's financial position is reflected in the 1963 and 1969 Annual Reports filed with Amendment No.10 to the Application for Licenses, dated August 27, 1970.
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IECEI? ION OF TiiE CE; TRAL ARF 1. P%H1 COM1DINATION GROUP (CAPCO) 3 In September 1967 The Toledo Edison Company, The Cleveland Electric 11-luminating Company, Duquesne Light Company, Ohio Edison Company and its subsidiary, Fennsylvania Power Company (the CAPCO group) entered into a Memorandum of Understandirs to create a power pool in the interests of reliability and economy, with future additional generating requirements of the members to be provided by sharing in the larEest units feasible 1
for pool purposes, mutual support of power requirements and provision of bulk power transmission required for such purposes. Definitive agree-ments are in the process of preparation.
The initial phase of the arrangement includes the construction of four generating units, the last of which is the Davis-Besse Nuclear Power Station. Two other units, scheduled for completion in 1971 and 1972, are coal-fired units, ee.ch having an expected net capability in 650,000 kilowatts, located on the systems of Ohio Edison and Cleveland respectively.
In addition, a nuclear unit is scheduled for completion in 1973 having an expected initial net capability of 847,000 kilowatts and an ultimate net capability of 882,000 kilowatts, to be located on the system of Each of the units will be owned by two or more of the CAPCO l
Duquesne.
companies as tenants-in-common.
In 1969 the CAPCO companies provided for the construction of two coal-fired generating units of the 800,000 kilowatt. class, to be located on the system of Pennsylvania Power, and scheduled for operation in 1975 and 1976. No allocation of interests in these units has yet been made, but 1
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i it is expected that such allocation among the CAPCO companies will be made generally on the basis of their respective forecast electric load requirements for periods following the respective dates of commercial operation of the units.
The initial phase of the CAPCO nrrangements also provides for the construc-tion of approximately 155 miles of 345 KV transmission lines through 1974.
It is contemplated that additional transmission facilities will be in-stalled as needed to accomplish pool operations.
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REIATIONSHIP BEIVEEN THE TOLEuo EDISON COMPANY AND THE CLEVELAND ELEUfRIC ILLUMINATING COMPANY The Toledo Edison Company and The Cleveland Electric Illuminating Company will share ownership as tenants-in-common of the utilization facility, to be known as the Davis-Besse Nuclear Power Station, and its site. Toledo Edison Company's share of ownership will be 52 5% and Cleveland Electric Illuminating will own 47 5%. Toledo Edison Company has complete re-sponsibility for the design and installation of the Davis-Besse Station and for the prosecution of all related licensing activities and proceed-ings before the Atomic Energy Commission. Toledo Edison Company will also have complete responsibility for the operation and maintenance of the Davis-Besse Station. Toledo Edison Company and Cleveland Electric Illuminating are not acting as the agents or representatives of any other persons in filing the Application for Licenses.
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CoIICTRUNION EXPENDITURES The Cleveland Electric Illuminating Company construction expenditures for 1969 amounted to $100,446,000. Current estimates for :onstruction expenditures over the next six years are as follows:
Portion of Pudget Total Construction Attributable to Budget the Davis-Besse Plant
- 1970
$107,000,000
$ 8,200,000 1971 140,000,000 28,000,000 1972 143,000,000 41,630,000 1973 140,000,000 47,o30,000 1974 128,000,000 11,935,000 1975 139,000,000 1,090,000 Mhe Cleveland Electric Illuminating Company's 47 5% share of the Nuclear Power Station and the initial nuclear fuel core is estimated at $139,371,000, of which $1,486,000 was expended prior to 1970.
The total estimated cost of the Davis-Besse pro,)ect, including associated transmission line facilities to be wholly-owned by The Toledo Edison Company, is $305,742,000, as indicated in Amendment No.10 to the Application for Licenses, dated August 27, 1970.
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FIRANCING The Cleveland Electric Illuminating Company has engaged in a continuing construction program for the expansion of its facilities, financed by long-term debt securities, short-term loans, equity financing through the issuance of common stock, and internal sources. All construction is
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financed on a basis of total requirements. No separate financing is under-taken for specific projects.
During the period from 1949 to 1969 inclusive, approxicately $804,542,000 was spent on construction, $220,000,000 having been raised by the sale of debt securities.
Mortgage Bond issues in recent years have been rated AAA.
It is expected that the total construction requirements fcr the period 1970 through 1975 vill be provided by internal sources, the sale or capital stock and from the sale of debt securities in such a manner as to maintain a sound and conservative capital structure.
7 CONCLUSION The Cleveland Electric Illuminating Company is financially qualified to undertake its share of the design and construction of the Davis-Besse Nuclear Power Station....
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