ML19326B079

Testimony of DG Nicholson Re Financial Qualifications of Toledo Edison Co.Pp 1-6.Util Financially Qualified to Undertake Share of Facility Design & Const

ML19326B079
Person / Time
Site:	Davis Besse
Issue date:	11/06/1970
From:	TOLEDO EDISON CO.
To:
References
NUDOCS 8003060854
Download: ML19326B079 (7)

Text

e' UI;ITED STATES OF ALERICA ATOMIC E';ERGY CO?CiISSIO!!

In the Matter of )

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THE TOLEDO EDISON COMPANY )

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and )

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THE CLEVELAI;D ELECTRIC ILLUMII;ATII;G C0!GANY ) Docket lio. 50-3h6

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Davis-Eecse I!uclear Fower Station )

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Flf!ANCIAL QUALIFICATIONS OF THE TOLEDO EDICON CO??ANY TESTDDI;Y OF DONALD G. NICHOLS01; November 6, 1970 8003060[6V T

FINANCIAL QUALIFICATICNS THE TOLEDO EDISON COf@ANY

1. QUALIFICATIONS OF WITNESS I am Secretary and Treasurer of The Toledo My Name is Donald G. Nicholson.

Edison Company.

Upon graduation from Bowling Green State University (Bowling Green, Ohio) with a Bachelor of Science in Business Administration degree in June, 1950, I Joined Toledo Ediscn and have remained employed by the Company since that time. I received an M.B.A. degree from the University of Toledo in 1962.

In 1958, I was elected to the position of Assir, tant Secretary; in 1962, elected to the position of Assistant Secretary and Assistant Treasurer, In and in 1965, elected to the position of Secretary and Treasurer.

1968, I was assigned additional duties as Secretary and Treasurer and was designated the chief financial officer.

I am a member of The Financial Analysts Society of Toledo, Inc. and the Within the utility in-American Society of Corporate Secreta-ies, Inc.

dustry, I am serving on the Investor Relations Committee of the Edison Electric Institute.

2. DESCRIPTION OF THE TOLEDO EDISON COMPANY The Toledo Edison Company was incorporated unaer the laws of the State 1

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of Ohio cn July 1,1901.

The Company is a public utility engaged primarily in the Eeneration, transmission, distribution and sale of electric energy in Toledo and Nortswestern Ohio, covering an areax of appro i mately 2,500 square miles, with an estimated population of about 718 000 ,

. The Company also provides a relatively small amount of natural gas and st service. eam heating The Ccmpany serves about 225,000 electric customers .

Retail power is supplied within the corporation limits of 47 municipalities i n the service area including the City of Toledo and wholesale powere is osuppli 15 dt municipally-obned systems.

Toledo has a total system capability of more than 1.2 million kilowatts.

In 1969, the Company 's operating revenues were $88 075 000 of which 97%

vas derived from the sale of electricity.

Total electric operating revenues in 1969 vere derived .32% from residential cales

, 17% from commercial sales, 36% from industrial sales, 5% from other utilities ,for and 10%

resale fres all others.

Energy sales in the Company's service area havee increas d at an average rate ef 9 3% annually over the five-year period from 1965 t o 1969 The Toledo Edison Company's financial position is refl ected in the 1968 and 1969 Annual Reports filed with Amendment No.10 to the A pplication for Licenses, dated August 27, 1970.

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3 DESCRIPTION OF THE CENTRAL AREA FOWER COORDINATION GROUP (CAPCO)

In September 1967, The Toledo Edison Company, The Cleveland Electric Il-luminating Company, Duquesne Light Company, Ohio Edison Company and its subsidiary, Pennsylvania Power Company (the CAPCO group) entered into a Memorandum of Understanding to create a pcwer pool in the interests of reliability and economy, with future additional generating requirements of the members to be provided by sharing in the largest units feasible for pool purposes, mutual support of power requirements and provision of bulk power transmission required for such purposes. Definitive agreemerts are in the process of preparation.

The initial phase of the arranEement 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, each having an expe:ted net capability of 650,000 kilo-watts, located on the systems of Ohio Edison and Cleveland respectively.

In addition, a nucleer unit 1s scheduled for completion in 1973 having an expected initial net capability of 847,000 kilowatts and an ultimate net ,

i capability of 882,000 kilowatts, to be located on the system of Duquesne.  !

Each of the units will be owned by two or more of the CAPCO companies as I i

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. In 1969 the CAP 00 companies provided for the construction of two coal-fired generating units of the 800,000 kilowatt class, to be located on I

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the system of Per sylvania Power, and scheduled for operation in 1975 and 1976. No allocation of interests in these units has yet been made, but it is expected ths such allocation among the CAPCO companies will be made generally cn the basis of their respective forecast electric load requirements for ;eriods follovirc the respective dates of commercial opera-tion of the units.

The initial phase f the CAPCO arrangement 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 installed 5

as needeo to acco plish pool operations.

4. RELATIO :3 HIP BETWEEN THE TOLEDO EDISON COMPANY AND THE CLEY.; LAND ELECTRIC ILLUMINATING COMPANY The Toledo Edison Company and The Cleveland Electric Illuminating Company will share ownerahip as tenants-in-common of the utilization facility, to be known as the Davis-Besse Nuclear Power Station, and its site. The Toledo Edison l

Company's share of ownership will be 52 5% and The Clevelu.d Electric Illuminating Comptsy will own 47 5%. The Toledo Edison Company has complete responsibility for the design and installetion of the Davis-Besse Station and for the prosecution of all related licensing activities and proceedings before the Atomic Energy Commission. The Toledo Edison Company will also have complete resp:nsibility for the operation and maintenance of the Davis-Besse Statics. The Toledo Edison Company and The Cleveland Electric

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Illuminating Corpiny arc not acting as the agents or representatives of any other persons in filing the Application for Licenses.

5 CONSTRU.7 ION EXPENDITURES The Toledo Edison Company construction expenditures for 1969 amounted to

$18,549,000. Current estimates for construction expenditures through the year 1975 are as follows:

Const: action Portion of Construction Forecast Forecast Attributable to Davis-Besse Project

• 1970 -$35,C00,000 $10,844,000 1971 53,C00,000 30,748,000 1972 69,000,000 50,499,000 1973 81, COO,000 55,744,000 1974 49,C00,000 15,949,000 1975 43,C00,000 1,208,000

• The Toledo Edison Company's 52 5% share of the Nuclear Power Station and the initial nuclear fuel core, plus the cost of associated wholly-owned transmission facilities, is estimated at $166,371,000, of which

$1,379,000 was expended prior to 1970.

The total estimated cost of the Davis-Besse project, 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.

6. FINANCIIG The Toledo Edison Company has engaged in a continuing construction program

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for the expansict of its facilities, financed by short term loans, long term debt securities, equity financing through the issuance of preferred and common stock, and internal sources.

During the period from 1950 to 1969 inclusive, $299,560,000 was spent on the construction program. These funds were provided by the sale of debt securities in the amount of $86,500,000, issuance of additional capital stock in the amount of $31,885,600, and the remainder from internal sources.

Mortgage Bond isenes in recent years have been rated double A by both Moody's Investors Service and by Standard and Poor's Corporation.

It is expected that the Company's total construction requirements for the period 1970-1975 vill be provided from internal sources, from the sale of debt securities and from the issue of capital stock in such a manner as to maintain a sound r- 4 conservative capital structure.

l T. CONCLUSION i The Toledo Edison Company is financially qualified to undertake its share 1

of the design and construction of the Davis-Besse Nuclear Power Station.  ;

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