ML19327A528

Annual Financial Rept 1979.Util 800717 Ltr to Ne Public Power District Acknowledging Responsibility for 50% of Facility Insurance Premiums Encl

ML19327A528
Person / Time
Site:	Cooper
Issue date:	07/29/1980
From:	IOWA POWER & LIGHT CO.
To:
Shared Package
ML19327A525	List: ML19327A524 ML19327A528
References
NUDOCS 8008060330
Download: ML19327A528 (37)

Text

- - _ _ _ _ - _ __- - - _

-

• IOWA RESOURCES INC.

g4 g 1979 ANNUAL REPORT

~

\ l Y I i-

.c .h y;.

.e. -

..\ '

y'fi y.

7f.,..:j :jj!(

...g g s

s c.,

' b ,.' "i . . . . : s,y p W q h c .

.w.

? ..

N Y.

• l.' 5,  ;

n. - d J  : ,

Y A. .. M N '

$ M~.

n ;ig r ;.

, x yy.3y i ,h ,.

~~

3 l J

5. .A'_

d%@  % ... '*MK  ! ,' . .: :

a

_ ' _, $.b). :h.'. h. _.

_ '"~l ll.'.th b_

m+c.s mu g l

- 8

. L=. . = = .5 5

,\

., *'?? -?:.: h. '

=. = -

j 1

TG ':--

--.i 1 $phenfj,iQ j "~ -@02 -h'f _

=

g -

'c 1 . .

!3 .

~ -

m m , y "a j l _ ,

'It

" Investing In An Energy Future {V "

^

We Can AllLive With" wwww =

8 0 u80 6 0330

-~ _. _ _

.o .

' S o Contents Pagi 1979 Highlights . 1 President's Letter . 2 The Year in Review . ... 4 Consohdated Financial Statements. .14 Notes to Consohdated Financial Statements. 18 Management's Discussion and Analysis of Statement of income . .25 lowa Power Service Area Map. .27 Electnc and Gas Statistics. .28 Consoudated Financial Data . .30 Directors and Officers. .32 Annual Report to the Securities and Copies of the 1979 annual report to the Secu- This report and the financial statements con-rl'es and Exchange Commisson on Form 10-K tained herein are submitted for the personal irk Exchange Commission - Form 10 K formaton of the security holders of Iowa for lowa Resources Inc. and towa Power and Light Company, containing essentially the same Resources Inc., and are not transmitted in cord financial informaton as included herein, will be necten with any proposed safe or offer to sell or available by Apol 1. Any shareowner may cotain buy secunties of the Company, now of hereafter -

a copy by submitting a wntten request to Phillo issued, or with any prehminary negotiation for D. Ehm, Vice President and Treasurer. such sale or purchase.

Annual Meeting All shareowners are urged to attend the Iowa Des Moines, Iowa. Proxy material accompanies Resources Inc. annual meeting to be held on this annual report. Record date for shareowr'ers Wednesday, Apol 23,1980, at 10 00 a m., at the particcating by attendance at tne meeting or by new Botanical Center,909 E. River Dove, proxy is Maren 7,1980.

Dividend Reinvestment Plan Iowa Resources Inc. has a program which allows percent discount from the closing market price for the reinvestment of common stock dividends on the dividend payment date Shareowners whc '

and optional casn payments to purenase addi- wish to take advantage of the program or want tonal shares of common stock. The Dividend additional information may contact Stockholder Reinvestment Plan is available to all owners of Services, Iowa Resources Inc., P.O. Box 657, common stock and provides a convenient meth- Des Moines. lowa 50303, or call tolLf ree od of accuinng additonal shares witnout fees or 1800-247-5211. (in Iowa call 1 800-532-1188 )

otner charges. Dividends are reinvested at a five New York and Midwest Executive Offices Transfer Agents Stock Exchange Symbol-LOR 666 Grand Avenue Manufacturers Hanover Trust Co.

P O. Box 657 New York, N.Y.

Des Moines, Iowa 50303 Central National Bank & Trust Co.

515/281 2900 Des Moines, Iowa Financial Contact towa Resources Inc.

Philho D. Ehm Des Moines, Iowa Vice President and Treasurer towa Power and Light Company towa Resources Inc. Preferred Stock Common Stock Registrar Registrars Bankers Trust Company Manufacturers Hanover Trust Co. Des Moines, Iowa New York, N.Y. Transfer Agent Bankers Trust Company lowa Power and Light Company Des Moines, Iowa Des Moines, Iowa Description of Business towa Resources Inc. is an towa corporaton Iowa Power, the onnccal operating subsidiary c which became the owner of all of Iowa Power's lowa Resources, is engaged pnmanly in the ger outstand:ng common stock on November 1, eration, purchase, transmission, distnbution anc 1979. pursuant to a merger and corporate re- sale at retail of electnc energy and the pur-structunng plan approved by the shareowners of chase, distobution and sale at retait of natural lowa Power. Iowa Resources is a holoing corfw gas in central and southwestern Iowa. Iowa pany and, at the present time, it conducts no Power's service area covers over 5.600 souare business and owns no properties other than the miles and includes 130 communities.

common stock of its sunsidiary companies, Iowa Power and Light Company. Industries of Iowa Corp., ENERCOR, Inc and Redlands, Inc. and their subsidianes.

About The Cover - lowa Resources Inc. has more than 33.000 com-mon stockholders living in all 50 states and in 13 foreign countries. Among these are hundreds of our own employees, financial specialists who make investments for corporations and trusts, and countless individua!s. Our stockholders reo-resent every age group and walk of hfe. but their common goal is to make a sound investment with a reasonable return. As shareowners of lowa Resources, they are investing in an energy j' future we can all hve witn,

IOWA RESOURCES INC.

l 1979 Highlights l

.; , . _ . ~ . _

7.7 _

Percent increase 1979 1978 (Decrease)

Financial Net incomo (000). $ 26,538 $ 24.685 7.5 Earnings per average share . . $3.57 $3.62 (1.4)

Common stock dividend rate year end. $2.52 $2.40 5.0 Average shares outstanding (000). 7,430 6.814 9.0

~ Property, plant and equipment year end (000) . $778,841 $699.964 11.3 Construction expenditures (000) . S 82,524 $ 86.632 (4.7)

Revenues (000) . . $269,341 $227,332 18.5 Expenses (000). $225,105 $194.113 16 0 Elsctric Operations Revenues (000) $180,164 $150.488 19.7 Sales-millions of 'twh. 4,329 4.307 0.5 Peak load-kilowatts . . 1,118,624 1.063,717 52 Cooling degree days . 984 1.217 (19.1)

Average annual residential use-kwh . 8,444 8.610 (1.9)

Gas Operations Revenues (000) $ 88,725 $ 76.667 15.7 Sales-millions of ccf. 362 372 (2.6)

Maximum daily sendout-thousands of ccf 2,364 2.460 (3.9)

Heating degree days . 7,173 7,217 (0.6)

Average annual residential use-ccf. 1,490 1,543 (3.4)

W -

r

, J'.D.*

f M*a

.r

_ R.)&.A ,'

NT ,, _ Y t%

. , ^,

• 9.:;.:" ' . - -

~r--- - '-

, Joe Cardamon is one of nearty 500

' lowa Power employees who buy stock (

l . regularly through the Employee Stock #

Purchase Plan. A veteran of 25 years with lowa Power, he is a storesman at

. the Walnut Creek Servce Center in Des Moines.

1

_ _ ~. .._--,_.___.._m .._.____:._._. .s . , _ , . . . . _ _ _ , .. _ _ _

~ -

,.- .,y

i 10WA FESOURCES INC.

4 i President's Report j

i Introducing the first annual report of most of the summer and fa!!. attnbuted to Iowa Resources Inc. is a pleasure and a shghtly tower earnings than a year ago. In highlight of my years at lowa Power. As of j

- the fourth cuarter lowa Power began col-November 1,1979, the identity of our Com- .

lecting additional electric rates needed to pany changed. Common stock holdings in  % ,

he4p improve future eamings.

Iowa Power and Light Company have now -

There were several significant events automaticady become holdings of Iowa h dunng the year tnat were cf benefit to lowa Resources Inc.; the stock exchange ticker ' f .

Pcwer and citizens in the commun:tles we

~

symbol is now IOR rather than the familiar serve.

IOP, and the stock exchange listing in daily - lowa Power's long-term purchase con-

, newspapers now identifies your stock tract fcr half of the output of Cocper holdings as "towaRs.' Nuc! ear Stat:on in BrownvWe, Nebraska f .

The major operating thrust remains that .

- continued to serve our Customers dunny of Iowa Power in supplying the electric and i i 1979 Aporoximately 50% of the e'ectncity natural gas needs of 130 lowa communities sucphed to our customers was generated and rural terntones. The formation of Iowa  ; ,

by Cooper. The coerating performance and Resources Inc represents a major commit. 3 7 ; rehabihty of that generating station con-ment to ensure a healthy future for lowa 1 tinue to be among tne best in the nation.

Power, our emoloyees, our customers and '

In addition to Coccer. Council Bluffs Unit our investors. \. 3 became a significant source of e;ectnc V power dunng 1979. Since going "on-hne" Perhaps a little background on the devel- .

in Decemoer 1978. Unit 3 has supphed opment of Iowa Resources Inc. will help.

" *" reeded e'ectncity not only for lowa j Regulatory and economic conditions that l existed early in 1979 further demonstrated future. we are confident that the reorgant- Power s communities but also tnose areas l to management that flexibility would be zation permits the financ:al and organiza- served by other owners of the unit. The desirable in heiping to meet wide-ranging tional flexibihty necessary to exoand and comotetion in Decemoer 1979 of trans-future energy needs. The proposal for reor- diversity into such areas. A chart diso'ay- mission facihties necessary to further link ganization and formation of a holding com- ing the new corporate structure with a bnef Unit 3 with central lowa has he! ped assure pany exemot from governmental regulation description of the subsidiary comoanies the availability of the power generated at as a utility was approved early in 1979 by can be found on page 12 of tnis report We that plant.

Iowa Power's board of directors and pre- hope this will provide a clearer under- Perhaps the b'ggest event in our service sented to shareowners at the annual stand:ng of the reorganization. area dunng the year was the vis:t of PCoe meeting last April. Shareowners enthusi- As owners of Iowa Resources Inc. your John Paul 11 to Des Moines October 4 Few astically supported the Board's proposat role as investors is even more important actions nave served 'o unite nd;viduais.

g Following inis endorsement, we set out than before It's accroonate, therefore, that relig:cus and community groucs as mucn to cbtain the necessary govemment ap- the theme of this report recognizes your as this historic visit. The Coonerative atti-l provals. Unfortunately, proceedings bogged contr:butions. We are pleased to hignlight a tuce disotayed by the citizens of Iowa rea'-

down when the lowa State Commerce few ind:viduals.1:ke yourself, who have in- firmed my behet that this is a soecta!

l

Commission intervened before the Federal vested in the energy future of Icwa. place. Acknowledging the jo nt effort t"at I Energy Regulatory Commission. This de- Year-end earnings on that investment went into precarations for the pacal v' sit j tayed matters until October when the Fed- were 53 57 per share comoared to $3E2 in would nct be comotete without a soectat l eral Energy Regu!atory Commission re- 1978. An Iowa State Commerce Commis- tnbute to our emp'oyees. Many were in-solved the jssues enabkng us to complete sion ru'ing on :ne natural gas rate increase volved in arrangements for this visit. Cnce formation of Iowa Resources Inc. coilected in 1978 ordered Iowa Power to again our emotoyees c:so!ayed a consci-Although activities in non-utihty areas refund $1.3 mi! hon to its customers. That entiousness tyorcal of their performance are eitpected to be hmed in the immediate refund. combined with mild weather dunng througnout the year.

2

List Acril. sharrown:rs tl:cted Chart:s Gas Sales McF IN %LUoNs 50 C. Laserty of Indianola. Iowa, to the Board cf Directors. replacing Paut V. Farver who

• " o I;ft tne Board after six years of valued ser.

30 v.ce. Leonard L. Mowen. Assistant Vice Prasident, retired from the gas cperations cornmecai & incus nat inwreem _ _ _

20 ama, ending a 42 year career with lowa Pcwer. I wish to thank Leonsrd Mowen and comeerce & incustre Fm -o Pai Farver for their contr:butions.

A number of executive changes were

'97 t v3 ir? 97s mMe during 1979. Although I retain ?975 rewonsib:hties as Chairman and Chief 5000 Exc ,utive Officer of Iowa Power. James R. BectricSales <wmNuwoNs Lyon nas been named President (Opera- =

tions Group) of towa Power and serves as acco

-l Sen er Vice President of Iowa Resources Pescermal I

Inc. Mark W. Putney is Executive Vice j Prer cent (Administrative Grouo) of Iowa m I ,

smauwai se Pcv r and is Executive Vice President of ,

lotct Resources Inc. Ralph F. Schlenker. We Gwas sm & W -

lo ,a Power s Senior Vice President (Devel-orent Group) also serves as Senior Vice 0

,7 , .g3 ,,73 ,,77 2,73 President of Iowa Resources Inc. and Prwdent of Industries of fowa Corp , a Fuels Used to Provide Bectricity *=

wruly owned non-utility subsidiary of the l " " *

• gc ,,,

ho Sng Company.

e i addition. Lynn K. Vorench has been coai 53 lm oromoted to General Counsel and Secre- I

• tary for both towa Resources Inc. and lowa l C*

Powac Jean Olmstead of the Stockho'di.- * * * *' "

Services area was namec to Assistant 2%

Secrctary for both lowa Resources Inc. and "' "' "'

lowa Power: Dallas K. Hameriinck has 969 19'4 1975 'F9 '987 Jeer cromoted to Assistant Vice President cP o.ectes Corernun+ cations) of Iowa Power; and Keith 1 Wartje (Legen has been named Assistant Where the 1979 Construction Dollar Came From -

Sa e cf Common S ccu - 14e . . . 4 ...u. . .. . w # a Secretary for lowa Power. w ,m - - % r---,

When reviewing 1979. the formation of 3,, ,L,,,,,,,g,3, _ 33,

1. - m _

owa Resources Inc has to rank atoo the t- ,1. ,-

ist of progressive hacoenings. Althougn tu benefits of the rt organization may not tec*at'on accus - 2cc  %, :q+N@h -^ ;' # 13,U p',[yf* --m .

w immeciate. we are confident that it wili e,,,,, , g ,, _ ,,, =n 7 CN 4%;,if :tt strengthen our ability to improve operatioris set mcome - Less Omdeacs - 64 r$ $ g it towa Power and to better serve our Ad CPer Suces - 14e ~,

Pareowners. The new corporate structure vi;. cermit us to take advantage of oppor-un

ties for profitable operations in other Where the 1979 Revenue Dollar Came From -

.c w.

~ OD' Iren E'ec:nc Resice- r - 30c Looking ahead to 1930. we are enthusi-

1. - .+ -

~

ist>0 about the challenges facing towa E*ec nc tr;e Ge e ai sevce - 1sc c-lesources Inc. and our abihty to meet .~ u.-

hem. Energy sucolied by lowa Power and E ectnc Smail General semce - 18e ,M qw J;nt Company will assure future benefits Otrer E e&c - 4e GM. ' '

L cr ?.!! lowans. Gasa vseennar - 1re /* 0 ,

Gas Commeev & incasmat - traerruct.cle - 6e Und151

~'

' * ~ ' '

~ ~

.%CIE '~

Gas commecai & :re.smai - Fm - 9c '_

Sincerely.

S* W"  :=

Where the 1979 Revenue Dollar Was Used - o Dwight H. Swanson waseo Gas - 25e

- J n ]f$s 'Ci Chairman and President .

February 15.1980

• • #"*"*'"U"""-"*  ! ,_ ,

d _ g; .

fazes - 14e ,

, j Payto:t a*d Emp.yae Sere'as - 11e ,, m J n o s ~ t Oeve+ec to Nem Cor-s ruct.c't - 8e -

PJ."'b 1 ees; and P e'e red C+:erds - 9e ~uT? - /. :m.: ,. 1 40 to Cc-men Succeders - Tc a . a _ .s  ; ~ W' "] +

Gncs ed suces men c :sce s. cars - 7c -- - - ---m 3

0WA RESOURCES AC

, Tha Year in Review A&ougn 'otai revenues reacnec an aH

' me mgn of $269 3 m men uo '8 5% over 1978 earn rgs were shgntiv cwer man

' nose of 'ne cr:cr vear Mid weather cunnc

' mes' of me summer and a natural gas rate l re'und of 513 meon 'ed to con' mon stoc<

eamngs of $26 5 m4on Ear ;ngs cer s average snare we<e $3 57 Ocwn 4%

5 . - . frcm 1978 T"e earr ngs per average snare l *g . . ' Dis % ' ,%.4.y% .-' b .

.r .cS g 6- ,+

3 so rem ct a" nc' ease n erter of snare w.- .c , .$. .

-3 l . N ..

'2 o' ccmmon s'ocx outstancmg rc uc+g l f,b. $,2 . .

. hf -'g n.,,

~ ,

r

.* E *',. ' h, ,Ih=4 7 ,..,.9m,,..s .z p ..p i .,

me sa of 375 C00 snares eanv n 1979 x s ..,.;

s .. A .p

. .y ue - . , g,r t . , s E ecinc saws were uc on.v 0 5% .n q ;,.,; gqcs-.:  ; . gy ,e y, c

u. . r

e. g c.sp. , , . *

'9'9 d"*' 3 SI'0*9 ' 3% "C' ease in ' 975 1"A 4. #f ...

e v wt,.

' e M[i,.

5 P'.-

p.  ?

-g ' '. ' - , ..

-% ';. , . ( 4,,  :.4: Saies sere 4 3 bhca *< an a ' 979 E ectr <

k: . ' g ; .1; .4.. ,

. .b , .' h :'. .

[ [',$ 2, p h' ,7 ' ,' ', -

- l[. revenues f or '9'9 were 5' 80 2 whor uc 19 7% ' rom me crev'ous sear arc nc uca N k ,. T *.' -  ?

h;c3 -((7 \ .

N g I . .' . . . s

' '/A

.. - . +f.

l -;

s

. . ^

523 8 mean suo;ect to retura cena ng

e.  % -

. g yt 9 e-

- .- (k - $w

i. 4 e.yg.Q

. j , g -pp{y agA. ' j v ,[ ,. M .7 "*',cI 3 u y(.j, g.. ,;g..

.3

~

g.j

, ra' accrosai Oy the lowa State Commerce

, - Comm:Ss Cr

e. c. .* ., e

s. -. , . .

. .- .,4, .. , ,

p*.fj e , - l, %. . ' p "u '( ,

,. ~sI

,9 (1 ;./ U,

' , .- , .A - -

V.

w. 5 **,,

5lJ^

Th!S Gas sa es were cowr ^ 6% ' rom 979 deC' "e +n gas Sa'es ,s att, cutec 'o -

e.

3 o

)- - y L -

• 1

+

,w +.f F ,k. ..

g. j -< - . .d tg .- r ,i

,- , , . %.- .y M . + ft .

r +3 .

t duCec Sage DV aH C! asses et customers

{.

i -g.

.-<-n . .q,

, 1 ,, . ,. t t,.. 3 y,.. due to conservat or and cv one of 'ne

! . , 7 S 4. g.r n s. pu ., ,.

og-p,.-

yS y. 1 1. J. '

J ,J.f i .

' d. ..; 'argest 'rcus'nai cusicmers swecmrg to

, g.;, .

j f.3

9 .. . .

A

-^

tX# iE fk'%  ?, . .' .j coal for ecoromic reascos Gas revenues

.;Lh "i ,. #c. %g 4 ,. .

i.yg 4 -

-+ .

.4 .

p -

.- n- -

incmcmg ' nose trom ' ate :nc eases a-c l

l

'(j. . . [-

i.* ,

f, . ' ;

.',;[n ,.V.f 4.%g. ". .d ,.4 y

' g.,"j ('. . w {[ ',9.l.:;'  ;

, ?. . tmgne'

,. .rucased gas cos's wNc" are Cassec cn to customers rose 'S 7 'o to l

v ;%y; ' y ,y? .

j

.g. :. ~ . 3} g [ l ,* 1 .1.) e;3:. * ' }u( . - -- [ $88 7 mm on A ocrt:on o' mose revenues I  :

o . . - '

• $2 4 W or "as oeen coFectea st cjec' tc

_ v .,.

s.s%3 I' g,ecF&s ,,. : ,.

n gCx < , : 4 ...'

.,m ,

.~ '. '.,.c 7 refund cena rg 3ccrevat ov '"e ,cmrms-u

N -r .

s,

,. . .. . : $ ;,. .. .' ~ -

.,~'r g. $,. ,'. .lg ( ~. 7 " s:on

, , .s ;. L - .,3 ';

I c- i y'

'S '*c l  ;

n .: . . s .

+.w .

p

.y - F.' -

i

/ 1. y :p _ ,

' f' Dividends and Expenses

-~ - .

e . .

,t 3 - .

,j .- ., , ., .-  ;

s. , .: .J u

7,.

v, A cvde-d :ncrease o' 12c annuauv wa=

. . . n e - . g. .. -'.,'. .

• . s /. . -

accctec n Vav 'aesing me annua'cmcer s

~4 re e to 52 52 Div'denc: totaurg 5' e '

..:. 7 -

• ','I.[.. ('. J ,-

, g r

)

ll

. 2

,. f /. . *N.

.f * ". l j " , .

.y' mon were dec:ared a '9'9 a cavout c-

- J 50 s ;f commen SIOCk 93'nPcS

+ -

, , '/.

, ,,g - y , [, #' g.-' -

CC"s"uCScn excerc.tu reg 'or '79 Ae .

.> '[

~ ~ '

, . ,4 4

[ , ., .c ,

582 5 cown 541 m@c- hem '978 Esca-

,, .y 1 ,.

• ,, % 4 . ,

',g aor ' :cr'str'vCI'on cos's C,us oro'eC'ec

.Q .. , -

y

- ,,. , j,...,. ,e. 4, -

y.,.,.- a . -

+ .+ o;.

-, , . . , . .y , . , ,,-

• 4...-.? .

'O#.

PC' eases

• tec'r;C Sa.e5 3c den cac-

c. ,, "'g" evei c' Con-

. 1 b -.3 - -

. 4 . e .,. ,.. oc Cate a Cortru'ng Rev erend John E L gned S 03SICr 9 "v 'acar E vance ca! Lut"emo C"ur c"

' #*hC3CO W 3N1'NS W 4 " Ave been TC #FCerS iPCP ' 9 'l l

l l

a

1 i

st";c':c i expencitares n :ne years areac Aere soic m'n a ccocon rsie of 9 "

^ ~ c'o -s cn ic' c'acavme^' As '

lnternal sources 'unded acout 50% o' "'e c u ras for n'e' en marc.ng at +e :en- :sce-rce r 9n M 5 w er ac egon cash recuired for constr non excence s:menor prog am Aere accw rea or.rc ca 'v I rec tur es Ccnstruction expenses for 1980 are trougn snort 'erm ocr'owirgs n 're 'cra' 20 era: na e=ceses n 1 O Aere mgro-estimated 'o totai $97 2 m*on at cmme c at cace' 'me a~ curt et s c- ev:t g r' arco rc cc^* re "a e va Funos ccia nec 'rcm ecer"at sou rces n- tror'ae'~ Ocrrovas Jumiancmg a *e et 'eca-t <erc Cc ' e* +ec w cu cscea $7 7 mean (33' 3 snarem "cm end o' me vear was$44 e m 'on 're n- c ase: rc a ac" c cac or _e. as common stock 'nat was :ssuec TrcLg- teres' 20st 'angea om a ow at 9 5% o a 55 9m ' o ;oa- i 6 : ' cm ' 97 rc o-dividenc re-rves: ment emr.aoyee stocs our. "ign of '4 4% Late n 1979 tc^a P wer ' e cost 3 ;;as purc ased 'c 'asa e cnase and emotovee siccx ow ersmo es'achshed a revo!v!ng me c' cred t ^r c ebec 24 % 16 7 .2 w c o -" creases clans in January '979. 375.000 srares of *e Contmentai %no s Nat ona. Ea w a-c energy :csts are mccw'30le '"r0u;^ m commen stock were sold a: a nm pr.ce of Trust Ccmoany 'c' oc to $3C moon of erer;v cost acu' ert c ause a^c a o/-

$24 98 cer sna<e and $30 mAcn et bonds -etes to mature on Decemoer 31 986 c"c ec cas ac.us:~ent c'aese ~c oced n Cu' e e: c ana as a:es , var: m

.4

.g gg, acmea 5'9 6 von 'o k, ,h. ). ' k j- ,. g ,.

i' ' ., 7 - [, g Necrassa Etuc powe' O s" c!

7W F "P 3'2

• n' v 3

'b . - N ).7 ,Y .' $.

r . .

.. . a, ; yp4< ,:

2

.W.. e %. .

n . . .?,

rc- e _ ne' ,  : o r s' r -

q, 'w .c Q4

" . ' , Q:

,. r

~

+ i" '; } ,4 , , , '-'t. C eC'ec'a' on as cer'Ses n e'a 5L ' ~

4 ,

a

$ . l. . ', 3 - x y ,, ., , _ , , ,

.. , -tf 3 47% hCn O E S = ' oWa ' CPc 3v se :' '""

. . { . M' y ; , . ,

4 .. ., - - . . .eq sg.

e, < s 4

,- ;.-p j.7 . ,

JN H's ;

CcurC 3:L"s Jr'! ~ anc c "" C'CDe'* /

t ,g, ,1 y .i g 1,. {,

. r Fx4, y % .-

. a s

^'. ~ .. . . ' . ,

. j*4 , .g. -

- ;' J g- ' Y/*'. 4 ' '

")I ~M - [ ,

. ; 3 (. aCcDC"5 C*PP' c"e atc" W W T'C* { M

.% D ' : ' .- ' ' d'" exOerses "eacrec tab S W Cn mO N.  ;

f-

,jl ,

4/ ) ..

f .' - .

. ,e- .

..#' -: . . . - .+ '< .

, [- arc 'O'al 'd P(Ce"Se ^as 33'"'.Or O y , l-. . "4 . 46 30

" - *ne 11'CAarre 'c' 'unas ,sej : J

,bw -

a n ,

J '

y. gv% .. c.-+S. -

... +

.j i 4 ..- .' Lv

, ,1

<; E. zF tw . . ,I W. 'Q-Q -

.ng Ccrst;C' Or C'e0

• eC'e3 Cec ' mC'IM

.M., ,

[. '] jfj 5 - I

{3.g' . . t.a"v a se 'o Counc o B L'ts Un;t ? ccmng h; .. " " p ,l . s, .y . 4,$5 d - s. cr. re G 09C9"Cer at 9 9

.f4(+{ ' '

- A .

- / j ,

, , *O ,x , . ,

1. '-  :. f ,1} . , . . .

., , Rate Matters a , - y l1 -Y- . , , - e "he tona State Carnrrerce [cm" e i on

-,. w -i ^-(g,.,{

3

~

g s -j

- 1

._,.. .f . issued a '."a' cec +s+Cn an *e Car"C3",S

. > * + , ,

{ ,' ., -

3 6% na?/F gas r3: 9 nC'e3Se Ci'PC 'ed

' .a hJI i- ~ g ; '.;r, ;. p i

[ . ,,* . . 7; ~ du ing ' 973 T e r cec.s cr }a~ed *c' a

?.,

p.

8

. ,,".q.'- -

'-s .

' A'L nd Oi 3 CC r C r .'"a'e v 3 ' ; 'r . C " "-

.;. .M_ ., 4 -[ s%.' ,, : , C'aOnQ 'rterest *o ou' *at f a: }35 m' * ^ "

+1 . b [

c , .

-3

",e '( . . = , . ..

[ v., ., ..

f - , 1- ers Reva was mace " Yav r9

~

Oc

• C"a ' 'a 'e "c 'e 359 'el ses S 'O

1. [ .s f . , . , , ~'[.. ,-

we, rei eec * : , vc at/a. gas we'e

, : '. . .: , p?W .

• sf._

• 4L,v. a va.: ng se" errer' a s _we"ce0 -

4 y v 4 ...;- n- ,g

-*  %, j -

- - 3- n . . . . 3gro mgce 3.m mg icw3 S'a e L;r a cp

},- :h j ., y '. . M

• CC'"'" SS'C n af nQ ' h ~3 'eauP s' Pc 3 '

' ' "C'*AM**C  : ' A'*S 3K d Q~ -

.3,%e .

f . .a .w - f- t ' ., eh rs ,.y a

<oase n "a! Ja Oas '3:e5 Oc"' "" 9 C ' 9

[ , l, . Y 1 . j .l '.. ' , I 5 '.[ kk. , *'

j r sarv ' A'9 " an et'cr* 'o LC OC f '

2'90 Deutsca C'05 lowa GeSou'Ces JcCk as ",e cireC!cr of acat 2' dea't" & "SL'arte r;ra -:e, a c a.

, b c"er"00d ? Te 3r"S!er g New v org

,A <W P' 300 'urc 3Cr" "T' 3!c' l

i e s -ars e s 3 - awa:e v Pvider a e,nvegg rent *cr cpe,sica "CS

i 4

l l

President Carter's wage and price guide- of 1,119 megawatts. The new peak easily that the output can be fully utilized.

line program, only a portion of those rate surpassed the previous record peak de- Lencthy litigation and coposition on the increases were originally collected from mand of 1,064 megawatts set in July of part of involved landowners delayed I cur customers. A determination was made 1977 and equaled in September of 1978. completion of the 124-mile line over a year

by management to collect only 80% of the Peak demand is defined as the one hour towa Power was able to loan 1.000.000

! electric rate increase and 40% of the during the year when our customers gations of No. 2 fuel oil to the State of low:

l natural gas rate increase. require more electricity than i ?ny other last' spring when sucolies for essential agra As the year progressed however, it was hour, cultural needs in central and southwest I

determined that increased costs made it The late-1978 completion of Uni. ? :: the Iowa had been depleted. The oil was orig- l l necessary to begin collecting the remairM Council Bluffs Generating Station he!ced inally purchased by lowa Power in anticipa- l portions of both increases. The entire 19% lowa Power meet cu%omers' demands inis tion of the summer cooling season when l l electric rate increase has been collected past year. As an ow1er and operator of this customer electric demand is traditionally I since October 1,1979 and the full 5 3% 650-megawatt coal-fu9d unit, Iowa Power the greatest and oil-fired generators are j natural gas rate increase was put into receives 46.7% of the plant's output. Six pressed into service. Summer electric sup <

i effec: on January 1,1980- other power suppliers in the state share plies were not reduced or hindered by the ownership of this unit. The 345-kV trans- short-term loan to the State.

New Electric Peak mission line connecting the Booneville Suo-During the late afternoon hours of Au- station, soutt. Nest of Das Moines, with Nuclear's Contribution f gust 7, demand on Iowa Power's electric Council Bluffs Unit 3 was energized in Under a long-term purchase contract i system reached a Ow all-time record peak December 1979 and provided assurance with Nebraska Public Power District. Iowa l ,

N ,M $.

q, 9 -

W ~ &yggg '

~- . -

~~ --

. 2

as VM2 t-A * - '

Pr).sy$

- M N is .c

~

g SO - -

S u,,

m l TM: 4

=

e~-- .a

".~ ,

- ./, '

' ,y \ m l

g i

Silas Fabry. a stockholder for six years works as inspection engineer at '

the main Post Office in Chicago. Fabry cnose icwa Resources s:ock in plan-ning for his retirement, which Comes in 1980 after 36 years with the U S.

Postal Service.

6

l l

Power received ore haif te 778-megawatt S ;et 'Cr ate M O ~i'a *e 6 K "ew.att Jere' 3t "c

• a' co outout ct Coccer Nuctear Stat on near Fodow!rg ssuance at 1 ce-t Dv *e ^ '" ' cwa Powe' 'ece V r0 J ' "e9 R CS i Brownvole NeDraska A;most 50% of *"e U S Enuronmenta; P otec' on Agency a- r e ' .tcut oc mr"e ra Oce'ror c' ~

e ectr'C tv ^eeds Of Our customers dur ng :o' constrLCLCn Degan n Aqssi cr *"e L. 0 4 a P' a n t $scredLe0 fe' W

'9'9 were met wif e t*e Cower sLooLed Cy cca f 5d Louisa Gene *at og 5'a' cn " ear 'AO 279 cw a Na e' Inco" 'ed t s Cccoer '*cogn * 'eoresents criv 23% of %scabne towa iowaenois Gas and "ter' 'o carsc: cme n a crecesed MC-

'owa PDwer s 3CCreditoa cacaemtv E ectoc company wm consnuct and coer megawan e na to te com and coe'ated ev Acerormaterv 13

• maco n E^er';v . .

xyy . . g g. .v ..

. il* ..g; . .

,A r- -s %_ 4., .y Cost Aciustment c' edits towed cack to g 1' y ". r s . . '..3:y, y +1. f ; ^, ,' f :

qi g h)4 , , i .' K 4 7 '-' a-

, c .

cua Power s +ecn!c customers 'ast year ..; . , . .. . ' y . ii ; ;, e.

'([',1g-{*>)3,-j'.T cecause of Coocer s certcrmance Wnue

+enuc ear staton s of f-une 'or e'ueo ng 4R . g '-

40 . = ' .'

%.M"-.

+

. d . . ;.J g .f", . ,-

+f , (

' l J1 ~

and ma nienance a corSco cf *e cos' at . .

) ,l.

g

'eoiacement energy s offset mrougn an , 4 j . j 4 ,_ p

.mergy cost raserve Coccer s suoerO coer- #1 aj . j ,- -g. -

W 4 if.*; g ,y9 g, y

r'ng 'ecord a ' owed a reserve taiance 'o Mw,4 4 4 . '

_ k J

.. .: . -[ .47 r.f  ;

ate arc tms was aconed to reduce . . y qg ..

$na'eowner succort for Nc: ear cower " 9

$' dW 1y"Oj p 1fl,[' F i j .

..a.ttpi k ,

/.as demonstrated 'or 'ne *'rd .onsecuhve E n '-

} - ! - -lL- *: . 'M 4 - .4 . ,, ,. . .

"N . 8 % > - ?.9 ' - NE

, ear aren an ant nuc' ear crcocsal a' 'he 'P i'9 arruai meeong was aeteated tv a (ggp[N ' ' Nii* Y( *

%,j '- .

C)(h'

' ' O.','i .i' $

[ ,14 mara n m ' 3 o ' Aecogr :owa Power e ?. . ? ,

4 j

n:l f,} N 4l.i. *f, ,

i -

3 ,-

4 .

[. ~ s.;# . t  !.

j,

,.g.;,g "as "o acnve cians 'e ovd a "uc ea' sta-  ;

y g. .P .

'or management has +a:rtained me % -

) .YL ' N E9

- f. ' y?'{% "f= ~V.'#~.W i

y ' ,- [

Ocearce of "awna w ophons avava0+ 'or

({ [

e' ectr'c generat on j t[M i

+. -7,., Q wn y. ,k'. ;h. .. 4 _ *f. 3 Future Power Supply . . * .

/ . ,

1. o.-

.g .- + .

MY,, [d7-.'

Cerctus ens of an towa gereration study ' . -;f ; ,, M. . - 4 .- .

,eieased ., '979 esumated a need for dou- .[^ f.. .; ' O+ir

x. +

m eq4g <

4. ,? i.c-u. . . .

' g> ;. =-

Dirng fCwa s 9'eCTC Dower Olant caCaC'!V ] ['. .f,.e'W i

,fd

• k i d. pp .f= J te: ween '985 and '999 Cc mr +tments C (A. y ' ' T* .'g[p6; ,t,J ' ' @

• airPadV made DV :owa Power w+ ne'D e:_-

_3 S -

^

, .?.

:tA- y -

n 4

v.

. o, .*

2,

k. 'i%.. s g,' ;e' .#

- J-

.f. . . ' ' . - '

.~,-.s assure ar adecua'e sucotv 'or our custo- 3 i. - T 4 .t.- I g"[V. / ' ). Iy 4,, Y' Y

~

mers into *e ' MO s Howeser CCnDnuous ,. . ,

,' ,y "

..c.-

g' Ol a n n

• C. 9 "90ded 'o aSSu'e a" adeCud'a 3-

.-f gf4 g- Y '

r 4 , I

uccw 'uome' ntC 'he 'utu'e c..

oJ s y -i , , ;E

- w['  ?.

a 7e 9 .

! cwa Power s ca".C'Odb"Q 'n a rumoer ,. .

sn .

y y) r ,

c c'PI Dia"t CCPStruC' on orClec'S n l0wa .

-'g.

.s y.

u.

. . . - . . . . A.p -  %.e -- -

^crstrucnon actytv cenhrues on tre m S-

< 3.r. . . , -- . , . .. . ; J 4.3. - p >k .

f. .

~ 4M %.f M j ; '; c[.%Q . ,

egawatt coa, f> red Ottumwa Generat rg \

$'anen Cf Arico ICwa PCwer nW 'eceWe J g$V. '

e  :- , :M' - '

'% c' '00 mecawatts Ccrm " on of rms ' , j. g g ,\. .

J , . . ;

f ac IV Dv ICwa Soutnern Ut i . . ompany ~o- x ~

)

r S'y f a Cceck * 's' 0 %g"? m A 3 WS C1 Tes (CC= Y'l ~r: '*'*v N

"o a 3'W :n "1 C ace' L'A 2

~ 0mo r a 1 _ - y -a 7 kM , -

Za5 VC "PS 1

1

I I

I l

l l

l

' cwa E'ecmc Ligrt and Power Company at Co A Transportation  : meacureg 3'9 ' F ' cwa W ^m I 3 site near Panora n centrai lowa The ' t a s nava ceen "au '"a osa J.r er'ered no a Svea ccn"ac' &"' '" e )

f l coahtired unit wouid De comoteted .n ' 966 :c1 'ecm 'ne Ama n Mines n 'i e"e L ma en Non e r Rac'cao 'c' 'a"sccr' j Mth aDDronmatp<v 100 megawatts cf "'e A r~'; oCounclEu"s ? ' srce og 4 N on 'Ons T cc + "c'" ; 'e"e I output going to our system ae o t 'A 'owa Pcv.e< rc 's car ~ er s mo'nng 'o

• e ew Cour c B u" ce"ar-As mostrated oy 're generating pro ecte r 2nr ac 1 "'e ra ns and acc - Cas n.' Bu m NC"^e m ' ec a 'e-now completed and ' hose pianned for ne r rs aw ceen aacec A m.r .

"an . .,._ '_. _'c" 3,......

ta'ure coal sucoty wat be an emocr' art - - caen co crasec *or ear < m 19 . m .e ,

area of concern for iowa Present'y a mix- m 'ne irn- rou cn 'in e * . "w and . ,,

'ure of coal ano nuc ear 'ueis is used to sv ' ; c.racN mcwar r ac L.

generate the e6ectricity sucched to our -

-n onco a , crc,ectec t <

• e 'aornac 5 , s_ M W V

customers Althougn most of me coal ournea .s icw-suif ur coat f rom . yoming c

rcoma

p 2 5 mecn 'ons f coa s

^g trans o"ed *o ne cower mat'on an- W- s aooroximately one-third of the Iowa coal ov on a s.ngle- ine naui of 're Bu'ong- -7 y i mined each year. wnich has a higher suitur ' NortN rn Aai. road ( ,..-

content. is oeing used at Des Moines . gat n over the ' reign rates 'or " e

, m. ., - i

! Pnwer Station tramocration or this 'ow-sulf ur coal con.

r -.

?'

~* f . \ ~ y j. !l; '}

. . j . ;; g '__ k.

A~' .};G s .

,Qf j. Yi gsj

,. 4_; g W -t.

,.' .c .l/ ,.g . A - Q "-

g.g9 u

,---r

% Cy -~ ,.9 ;JU4N*v

-%..; 2 4 ,. ,

g; / . ; -"

Qr:p .,,.l A ,y# (.4 *, ': . .'_ .., :u. p,. m .-j: , j ,-: W -

...s,. ,

. 4 %. v - w

.. - - .~ .g .

a- 4.-  ;.

Q; , . .: - g.;

., . y .

v~,.-

} (( 'y ' . - >..

,-) 3p. n:,-,

L .*,~ g 6 y _. ; .

$!*m'9 ~

3, . -

m. y . s. .. m.

+ , . . ~ , . . x_ ..

y ..

...y.

s'. - * . ,

s s..F, : - -

. - -  : 9- -

g ' . . y ' , . _, a

.

. ' _ ' " , ' * * - Q.._ Q

'j.'.. ,. n g

Qj f .. . ( - A, .s n , ,

. ' % , j ;{'g { '.. .p ~ +'

y.- _Y '[ ;b ..: \, .f  !

. ll $f

- ;3pg .. q _ , . , ' '

s 4 . . 2 .

. , . . _."7, - j . -, . :- 4,>

z. .

. , <. ,3,- . . .% .j.,

4 s ..-

' , . ,. . ,. ,, g,-. y, ,.e g,,  :-

qyg.

4. , . . . ,,

. . be -

.j . a, .

.p ; -

v .

. - ,. ,.  :. . - j .

l - 4 ,

s-

.,p.d, .

,. e < -

. k , .- . .' _. ,

.5p , g 4 ...

. . s 4 . ,

7.? 2 - ,' .  : .

g .

i . ..

_e , . . .

4. , .. . . - 3.

Q ,4.7 ,

c

.= . j e.,

w W,[ ,-

--1 4

'.,- yv.

+

., y .,.s 4

. .p r . . .

. . . , . s;., .

._, . , , - . ..pu

.m -- .s

., . m r- _

i

', . ' ,. 7 , ;. : - ;

(, - . ,j -

~ - - [ ,. 2

. - .. . : - 7 s

~ , .

. ..., c ,.:. yf .# ..-

, * - ., ,9-"

s * .,- s. w. - --

, . . . y... ,

- m ._, .

-e *

--c~,

J4 ._ .-

...,4$ <a . .

., s + .2 -

• ; 8,

. , . _ - s .. .

yp 4..

d. N. * . . . . - * / .. , . 7 - p p . ..a -..- ~

a.

l. y c.j ?

l -

<: , _rL: s ? ,

. et

- -g s < y~;a d.' /4 , g . .D. ,. . ,

l Susan Maaorv ece vec stock as a yt 5+ <qeart a'c a o P osos: curc asea Du! *'as Duf Chased mOf e On "P' On" 'OWa PeSCu Ces stoc re .ea ac, Jormg ae Cas 'Our years Susan S 1 9 % " "* N*C'3 D 3 #" [,3 13"Ce PSUuC!Or di "'e C W3NO Dance C"#C9'3 ^

Acacernv ,n Durarro Co.orace ' me' Yaw a s 7a;arn C #-

" :e case er Tra 9

l i

l I i i

l I

I l

l cuest in :ne fait of 1978 with the Interstate ted to have an additional imoaCl a!!nough Institute Continued during the year. Joint ,

l Commerce Commission (ICC) that would the full effect of that conse vation measure funding by a number of utikty companies.

j substantiaHy raise the present rate above cannot be estimated. including lowa Pcwer allows these institu-Residential use of natural gas for heating tions to conduct extensive natural gas and i that scecif red by the contract. This in.

crease was orotested by towa Power and. has been encouraged by the Comoany electricity researen. Major areas of study l af ter a 10-month investigation and suspen- througn a more hberal gas main extens:on include transportation and efficient use of I sion, tne ICC aooroved virtually the futi ochey. In addition, a heating 'acihty conver- existing energy sources and alternatives.

amount of the increase requested by the sion f,nancing program was established in towa Power continued its partnersn:o ,

l Burhngton Northern. That dects.on is now 1979 to make loa is available for home- with Albs-Chalmers and 10 other utihties in l l

on aopeal to the Eighth Circuit Court of Ao- owners interested in converting f rcm pro- the "Kil.nGAS" project during 1979. i peais Temporary injunctions have been 00- cane or oil heating to natural gas or elec. "KILnGAS" is a crocess that uses coal to produce an environmentally acceptable.

]

l tained inrough the courts to prevent Bur- tr!C heat oumos. Estimates ind'cate that 1 hngton Northern from cotlecting the higher over 20.000 customers on Iowa Power s low Btu synthetic gas for use as a boiler l l rate lowa Power contends that the in- system currently heat with a fuel source fuel for electric generation and industrial 1

! c< ease sougnt by Burhngton Northern vio- other than natural gas or e'ectric:ty. processes. Prehm: nary phases of the proj-I lates the railroad's contractual othgation. ect have been completed and results ap-The Comoany has asked the Federal Research and Development pear to confirm the viabihty of the process.

l l Distr ct Court in Des Moines to decide the Excenditures for research and develoo- The next phase would involve funding of a merits of the contraC!ual agreement before ment were $0.9 million in 1979. Participa- demonstration plant at a site in !!hnois

(

, the higher rate is Codected tion in the activities of the Gas Research towa Power has committed nearly $1.1 l Institute and the Electric Power Research milhon to the project since it began in 1976.

Natural Gas Supply Adequate .

t The natural gas supply outlook has

'

• E *E ,

e - Y ~ '

Changed over the cast few years from one .

of uncertainty to one of cotimism. Con-servation. the connection o' new gas re- ,

serves to the systems of our oicetine sup.

l criers and additional underground storage facihties have combined to assure ade- ,-A 4 '

• cuate natural gas for all of the Company's # -

'emsting and new residential and smail - =

, 4 commercial customers. Projections from both Northern Natural Gas Comoany and -

D Natural Gas Picehne Company of Americ- 4 ,

f v

- 7

'h ind;cate that amote surches will be avail- y,_

• able into the foreseeable future Iowa

i. -

l Power's major succher. Northern Natural

• I -

l Gas. is a pr:ncroal member of the consor- U '

i w tium invcived in otann ng the pioehne for ,M '

4  ?

transoortation of gas from the Prudhoe Bay j -

(A'askal area to the U S. Micwese , "

Sa!es of natural gas were down in 1979. 4 ,

N ' /

due in large part to conservation efforts. ,

\tandatory winter tnermostat settings at 65 es'~,e degrees for commercial buildings is exoec- u Terri Schwab. of Richardson. Texas.

has oeen a stocknoider since 1972.

She is a student at Stechen F. Austin State Univers.ty in Nacogcoches.

Texas, majoring in elementary ecu-cation tJoon gracuatron. she wiii ce Certified in education for the deaf.

9

. _ _ - - _ _ , _ - . . _ _ _ . . _ . - ~ _ , , _ . _ . - _ . , . _ _ _ _ , , -

l l

l I

i Iowa Power is helping finance an inves- modet is being deve'oped to examine. Red Rock southeast of Des Moines. The tigation of possible hydro-electnc benefits among other things the economics of Fede al Energy Regulatory Commission to be derived from the Des Moines River. recreation, flood control. potential e!ectric permit is the first step in deve!cping a The project. called " Central lowa Water energy production including hydro-electr'c hydro facility if the University of Iowa stud-Resource Study," is being conducted by and water availability at two reservoirs ies determine such an installation would be the Univers:ty of Iowa's Institute of located near Des Moines. feas:ble Preliminary studies indicate the Hydraulic Researcn. :n cooperation with in conjunction with this study. Iowa potential of generating 20 to 25 megawatts the towa Natural Resource? Council and Power has received a preliminary permit to of peak generation and 8 megawatts of the 9ock lstand DistriCl of the Army Corps investigate the installation of a low head average Capacity at Red Rock.

of Engineers A comouter-based simulation hydro-electric generation facility at Lake Consumer Relations pp 'i e nn"lr r g

were intensified to help achieve greater i di j j I corporate visibility within the Community

,- 1 < d 3a and to provide a two-way dia!og with cus-s '

j g - )l,);'ggyg)these tomers. Perhaps during 1979 the highest

(%'h 1 / / f.- ductionactivities was tne intro-

], /gj'5 [ Five company-sponsored " Town Meet-T  ! of " Town Meetings.

' 3

.! j fj j i f . 6 ings" were held in tne Des Moines area l

i'

, I [! j . yM;z last spring. These meetings were designed f 3.3 Q ' i ? Q]J to provide a forum

3 cerns with customers and members of organized consumer groups. One of the fo

/ypg$

ag' yg major achievements provided by this con-tact was the opportunity to clarify miscon-a -. ,

E' h.' N ceptions about lowa Power's operations.

K p ' '

Although no additional meetings are planned for 1980, future use of this forum f' l will be concidered if conditions irv1icate a y need for this type of exchange.

I Contacts with IcCal and state govem-

,- 1 mental agencies as weil as neignborhood and community organizations concemed

~

@ %'7 5 about the effects of rising energy costs on

.Pi(( j M Y g elderly and low income customers, were in Nf 6M* MI/ creased this past year and will receive additional emphasis during 1980.

h@h MW

/

towa Power has not been alone in pre-senting testimony on proposals to he!p U elderly and low income customers cope

~

NM~ -

with rising energy costs. Consumer groucs N /l utilities and lawmakers across the country are interested in develocing solutions to

,, m - this prooiem. A number of these prcposals Edward and Minta Becker of Las Vegas.

Nevada have teen stocknoiders for 12 years i:lettred since 1965. Becker was torrrerty west coast Drocurement repre-sentative for McDonned Aircraft.

I l 10

\

l 1

l i

deal with rate design. Although the Com- Fahrenheit. In essence Iowa Power's an emoioyee's attitude and cerformance on pany shares the concern of the energy previous c:sconnection policies were the 100 The program will be coorc;nated i cost burden on these customers, we main- already within the Commerce Commiss!cn tnrcugn an Assistance Counse!or wno has tain that direct subsidies from social and gu:delines. been retained by towa Power to orovide

, governmental agencies are a much fairer succort and counsei ing for emptovees way to assist than by including subsidies in Employee Relations faced w'in personal prooiems Eusting the pricing of rectricity. In March of 1978. a group of Iowa Power community resources. such as a!cor chsm Federal grm nts to he:p tower income cus- office and clerical emp!oyees voted to form treatment centers will be utikzed wnenever j tomers pay winter heating bills have been a bargaining unit of the international Brotn- necessary.

received by the state both of the past two erhood of E ectrical Workers 11BEW) A winters. Iowa Power helps by publicizing Wage and Working Contract was rat f:ed by Corporate Communications this program, by furnishing energy records the bargaining unit on March 26.1979 and The important rote played by shareowner wnen reouested and by referring a settfement agreement was signed to be investments, inc!uding retained earnings.

customers to the agencies responsible. effective on January 2.1979. Comoany availability of natural gaa suopl

es. and towa State Commerce Commission rules management beheves the terms of the new buildino for adeouate future e'ectric gen-

} have imoosed a partial moratorium on ser. agreement. which runs to Acrit 1981. are in e ation were all accressed throuch co po-vice disconnections over the past two heat- keecing with the voluntary wage guidelines. rate issue advertising curing 197'9 " Work.

ing seasons. Although the provisions of the An assistance program was inttrated dur- ing for an energy future we can all live l rules do not pronibit all cutoffs of service ing 1979 to provice professional. confi- Mh" was again emphasized as tne cor-i between November and Acril, they do pro- dential counseling for emot ees and their porate theme in all communicat,ons nibit disconnections for non-payment when deoendents. In manf "e$nces troubie- In add

tion, promotions for tf'e Budget outsice temperatures are below 20 degrees some personal problems adversely affect Bilhng/Ener-Check programs continued in 19~9 and the National Energy Watch qp N ' (N E.W.) conservation award was again i rC' .

pubhcized Sponsored by the Ea: son E!ec-I /,[ tric Institute. the N E.W program awarcs

.~ , homeowners whose homes quahfy as

~I '

energy efficient.

, ) .

1. 4 \ -

x. A recent survey of Iowa Power cus-g- f',gA .

tomers indicates an ongoing desire to te keot informed about energy issues and.

{ gE

• T g"{ 4 l ,.

I more important:y. what steos the Comoany Y *~

g , is taking to assure adeouate supones in the I '

~ ih '

future. Communications for 1980 wat be formu!ated accord!r' gly and wilt inc!ude em-i  %

g [ ~

g onasis on efectric and natural gas safety Imccriance of cotaining and transacrt'ng i -

, ' . , j 7 '

. the enormous Quantities of low-su !ur coat N

s - -

for electnc gene'ation and the ooss bte g Kg contnbut:on of coal gas fication wHl also te g , b accressed through corporate :ssue adve -

NfP ' , . ~ . . tisements r ext year,

.J'N Db

. I 'N,

$ . % m$h s aWy Wpt m h hh' '

l Stockhoider Jane Givens is a home.

rna er in Rcnmond, indiana. She and t er huseand. Steonen, an attorney for American Water Works Service Com-pany, InC. In RChmond. have owned stock for three years.

11 i

[

e IOWA RESOURCES INC.

K Corporate Structi J iowa nssouness ac.

l (Hammacanommyl l ** P'*',",,^ggemenw o

agsyc. mousTaias or icwa coan l

** "*s *'." M#' M c"!"L.Je ioS E Y " 9 c

uunnam.

(m.4 seme m.o .

lowa Power Resources,Inc. ble for long-term development. Any coal Middlewood, Inc.

Investment in the exploration, acquisioon mining activity on this property would. how- Middlewood. Inc. was organized in 1975 and development of new gas supplies has ever ce subject to the acquisition of fease- and is a partner in a p!anned 90-acre deve'-

hold rights from the government. In the in- opment in Oskaloosa. Iowa. Five acres of been hand:ed through towa Power Re-terim, the land has been leased for ranch- this land were used for towa Power's new sources. Inc. since 1974. This subsidiary of lowa Power was formed to allow invest, ing coerations. ENERCOR. Inc. is a wholly service center facility that was Completed !

owned subsidiary of Iowa Resources Inc. 1979. The remaining 85 acres are being ment in new gas exploration Through the subsidiary. Iowa Power has deve!oped for a mix of industrial, commer-entered into a number of limited partner, Redlands, Inc. cial and residential construction in a joint ships involving Natural Gas Pipeline Com. Red ands. Inc. was organized in 1975 venture of Midd!ewood and The Mid-Amenc pany of America for new gas exploration and owns nearly 3.000 acres of land in Group. Construction of residential dwellings both on and off-shore. Benefits have been Jasper County. Iowa. for Dr.,ssible future by local home builders began last summer.

reahzed from these investments including use as a generating station site. Just east Midd:ewood. Inc. is a subsidiary of Industo.

additional sucolies of natural gas on our of Des Moines, this land was enginally pur- of Iowa Corp. a newly formed and whohy succher's system. cnased as the site for the proposed Van- owned subsidiary of Iowa Resources Inc.

dalia Nuc! ear Generating Station which was suspended W lowa Power b 197L EN ERCO R, Inc. UNITRAIN, Inc.

Although there are no immediate plans to ENERCOR. Inc., which was organized in develop this property as a power plant site. UNITRAIN. Inc., organized in 1979. is a v 1978. owns 1.250 acres of land in the meteorological testing and dam feasibility a subsidiary of incustries of !owa Corp.

Powder River Basin in Campbell County. studies have confirmed its suitability for UNITRAIN. Inc. manages unit train coeraN Wyoming, for possible future coal mining either a coal-fired or nuclear plant Utiliza- and maintenance activities and coord:nate.

development. Aithough the federal govern- tion of the procerty is dependent on long- coal-hauhng services for severai Iowa ment holds the rights to all Co&l deposits range power generation requirements of utilities. Potental shortages of freight Cars on this land, which are estimated to ex- the central lowa region. In the meantime, and the need to transport large amounts of ceed 160 million tons, the anticipated the land is leased for farming Redlands, coal into lowa for existing and planned ger reouirements for low-suitur Wyoming coal Inc. is a who!!y owned subsidiary of Iowa eration facilities through the 1980's make for electric generation make this land via- Resources Inc. UNITRAIN. Inc. a viabie subsidiary.

12

1

?$$iW,b mQ 's., .' f"$ $

s_

' N.%,%* {l.[ #f:. .

- M r ,%; y s - . .w; pr . . n.

- 3. . L L ' .;:.

s . .

y, (

'. ,-- f, % ,

,' p"..- / l ;.j s. " ,

'".' . -. .. g,.',.','

'l f h e,

e _%., f . . .o. . x q -

.' u g/ -

,. $' z;.

y

- * ~f,553 p -

Gn,yy.*? i ' @< Y.

• n _'* &ty %p.4 5, 'e.d+w MA _ . .+ - ,tA g,

..'1 g ,

.," '. SW # y- t' j,s'E '

Wh y,fQy&pY?Wk!fuJeA ' Y _ ,

W '"f 1ld :s y 5 -

& 'd.:'

A *Y s

- ni+KQ'whgg.'e;""gfJpredj'"' . i .l ^1.

y m--- -

(:9 e

~ d / q gjj;[ .h; ,, y = h _-'-,> r;ap . -. g%'

. . ifv.%T. . * :Q . s .. .  ? '. . -

.V % TT' w - ~ ~:'

y-

'z _ ' . - .

y t i .* r V . v ini m ..

A j

, , jlr ' E ~

% ,~ -

u~-  :. *** M a = w y q q - % w y - . . . . , a \

l i M .,., ,

N '-..s _

's Y

Yg\

.m. -

.s,,,/ l I

y . -*

4

... ; f -.f:Y -

... w

\

\

,r.y

.e .

-g- y _w - ~m * ~ = '

1 j

(. -pH

u.~

w- r .. .

., e l

l Upper lef t: A ni er evea' 'or ana Lower lef t: A ".x M .gm ec s" a> Upper right: Caca"as "

'Ars Lower right- "Ra* - ^ )

-' e l w :ec :a .3

-a a a su s . . e1 ccm+e~ a. and 'as:cem a+ r- _.3:ms_ a 3.

l D v.e- a

s ; y7 ,, p _* ^ .~e" 3 ;c s o'anaed 'c Yea.::A  : " Y; "ec . n; a *

^ c. - c : .m e. 4 e- s a aos- c3- ro] po s y - C ee.'on 3 90.ac e 2 eve c;mem - e, 3 3- m; 1 .e-- , . e5

d' -', A a =.1 O^^e':W", 2 5 m d,005a 043 Y CCeAOCC -"C  : 9 ^ 2"3 E r' : : d'

~ y 1 a

'Y d "eCladPcd" S 3 ca''"er a '- s cr^ e; l

'*^e a "1:e \

i .y,.< l l

l l

i l

l

IOWA RESOURCES INC.

Consolidated Statement of income and Retainov Earnings

. . - w;  : = :: y =-- -- - . -

Year Ended December 31 1979 1978 1977 1976 '1975 Revenues (Note 2) .

(in Thousards)

Electric . . . . . , .. . $180.164 $150,488 $139.687 $131.947 $110,908 Gas. . 88,725 76,667 59,799 49,757 45,898 Other. .. , 452 177 93 - -

269,341 227,332 199,579 181,704 156,806 Espenses Operation:

Purchased power-nuclear (Note 3) . 34,399 27,472 29,817 28,522 21,522 Interchange power, net (Note 10) (15,877) 5.137 3,786 984 3,436 Fuelfor electric generation . 33,391 24.197 21,619 22.626 17.642 Gas purchased for resale . 67,194 53,884 41,149 31,526.. 29.039 Other. . . 32,689 28.468 24,313 22.147' 19.538 Maintenance. . . . . . . . . . 14,184 12,837 10,696 10,231 9,105 Depreciation (Note i) 22,070 16,875 15.454 14,855 12,875 income taxes (Note 1). . . 20,409 12.298 12,208 13.052 9.301 Other taxes. . . . 16,648 12.945 11,835 11.375 ~ 11,360 225,105 194,113 170,877 155,318 134,018 Operating income. . 44,236 33.219 28,702 26,386 22,788 Other ?ncome Allowance for equity funds used '

during construction and for nuclear fuel advance (Notes t and 2) . .. ... 2,572 6.277 4,110 2.132' "1.887 Other. net . . . . ..,. .. . . 373 66 (604) (424) (142 !

2,945 6.343 3,506 1,708 1.745 !

I Fixed Charges , Interest on debt. ...... . . 21.127 15,943 - 13,424 11.180 - . 9,574

- A!!cwance for borrowed funds used during construction and for nuclear fuel advance . .

- r

v. (Notes t and2) . . . . . . (4,406) ' (4,988) (3,644) -(1,304) (1.126' Preferred dividends of subsidiary. 3,922 3.922 3,603 " 2.647, 2,392 '

20,643 14,877 13.383- 12,523 10.840 Not tncome(Note 2) *

' . . . . . ' '. . .. ... .. . . . 26,538 24,685 18,825 15,571; 13.693 37,611 . ' 33.544 -

Retained Earnings " Beginning of Year . . .. .. . 51,275 42,637 . 29,025

,~

77,813' 67,322 56,436 E 49,115 t 42,718 less ... .,

' ' - ~ > s,

^.. '

"j , ; Common ' ~ $2.34,stockdividends of $2.49,

$2.165. $2.025 and $1.88 3 13,496 ' 8,839 l l, r

. per share, respectively.. . . (18,710 - 16,032 11,449

. Capital

stock expense . . . . . '.

'i.64= . 15 ~,c132. - 55, Q .185 A. A - - ,'  ; Discount on subsidiary - ' .q '

~

preferred stock s'2 . . . . . . . -- - 171' - - ~ 150

' End of Year . . . . . . . , : . . . . ... . 5 59,039 - $ 51.275- $ 42,637 ~$ 37,611 $ 33.544 !

Average Eliares of Common Stock.

t Outstanding (000) . '

........ .... ... ., . . 7,430 6,814 5.992 5,523 4.692!

r-

~ q '

Earnings per Average Con Son Share Outstanding (Note 2) .' . . .. . . .. .S' 3.57 S' 3.62 $ ' 3.14. $~ 2.82 ~ $~ 2.92

. , The accompanyeg no'es are an mtegeat part of this statement? -

( ,

14 c . .

, w . ..a--- .' ..~ a . u.

' ' ' """ a "* -

l

l e- IOWA RESOURCES INC.

II - Consolidated Balance Sheet

g.  ; ,

December 31 1979 1978 Assets (in Thousands)

Property, Plant and Equipment Electric . . $600,207 $564.712 Ct Cost (Note 1) . .

Gas. . . . . ., . 79,462 74.727 Common . .. . . .

13,445 11.876 Constructton workin progress . 77,066 41,773 Other . . . . . . . . . . . . . . . . . . . 8,661 6.876 778,841 699.964 Less-accumulated provisions for depreciation. . 172,952 153.078 J05,889 546.886 Productive Capacity Under Power Purchase Contract (Note 3). . . . . 214,482 218.848 Nuclear Fuel Advance, including Carrying Costs (Notes 2 and 3). . .. .. .

21,063 -

Current Assets Cashandshort-terminvestments. .. ...

2,749 1.601 Federalincome tax refunds receivat,le(Note 1). . . . .

- 5.233

+ Accounts receivable.tess reserves of $400 and $339. respectively . 27,517 25.216 Materials and supplies, at average cost . .

7,857 7.658 Electric production fuel, at average cost . 24,628 10.899 Prepayments and other. . . . 3,168 2.563 65,919 53.176 Deferred Charges and Other Assets . ... . .. . . .. . . . . 13,410 15.903

$920,763 $834.813 Liabilities Common Equity , . Common stock, no par; authorized 20,000,000 shares; outstanding

. 7.652.447 and 6.946,073 shares. respectively. . . $146,308 $129.205

~

> ' Retained earnings. . , . . .. . . . .. .. . . 59,039 51.275

.l ,

205,347 180.480 Preferred Stock . .

. .n........... .". .. . . . . . . . . .. . 45,000 45.000 Preferred Stock-Redeemable . . ..~....c. .., . . .... .. .. . . . . . 9,500 10.000 250,940 213,163 Long. Term Debt .

, g.. .......... .... .c ..;.. ... . .... . ..

Total Capitalization (See Page 16)  ;/.... . ....;.....u....~........

. .... .. 510,787 448.643

.. :... .... ..,.. 209,910 214.483 Power Purchase Contract (Note 3) . . . . . . . . . . .

-a ,

a s .

Current Liabilities

. Notes payable (Note 7)'; s . . . . . . . . . . . .. .... -44,824 34.475 ,

i Current portion of long-term debt and preferred stock . . 986 6.784 l Current portion of power purchase contract (Note 3). ..... 4,572 4.365

, , - - * . . , f Accounts payable . . . . . . . . . . . , . . , ... ...... ... .... , 34,306 31.628 A i Dividends declared P. . . .;. . . . ', . . . . . . . . . . . . .. .. ... 5,800 ~ 5,146 21,829

~ Taxes accrued . . t . . .' . . . '. . . . . . . . . . . . . . . . . . . ... 16.687 l

" - Interest accrued . J ' . . g. . .... . . . . . . . . . . . .... .. .6,111 4.785 1,128 447

' J- a Other.'. >

...../:.'.'.....'........ ... . ... ....

+Ury . 'p .,- ..,u .

-- y ,

119,556 104.317

, ,  ; , _ sQ.; *-

,.; 3.,

. ~ . <

. Accumsated deferred income taxes (Note 1) . . . . . . . . . . . . . 44,281 37.770 Reserves and i Deferred C'redi's' ~ . Unamortized investment

. '.. tax credit

. .,.. 32,233(Note 25.865 1) . . . .

.. ' .'. . 3,996

~

- 3.735 l

's: . , Other... . . ... ... 4,.. . . .. , , ...

' ' ^

' ,- ' < f _ 21 _ % . .

, . , , - 80,510 67.370

.c _7  ;. y # " , d.f q. 9: e _'

$920,763 - $834.813 4 .. . - , .

7  %, 2 3.,,,. s The accomparryeg notes are an etegral part of this statement.

'e .*

~ '* -

15- 1

-- . . c h e m s. _ _ _ _ _

10WA RESOURCES INC.

-- Consolidated Statement of Capitalization Decembe 31 1979 1978 (in Thousands)

Common Equity (Notes 4 and 7) Common stock, no par value; a uthorized 20.000.000 shares, outstanding 7,652.447 shares and S,946.073 shares, respectively(1.339.972 shares reserved). 3146,308 $129.205 Retained earnings . 59,039 51.275 205,347 40 % 180.480 40 %

Preferred Stock towa Power and Light Company Cumulative, par value $100.

authorized 800.000 shares Non-Redeemable-50,000 shares 3.30% . 5,000 5,000 50,000 shares 4.40% 5,000 5.000 50,000 shares 4.35% .. 5,000 5.000 50.000 shares 4.80% . . 5,000 5.000 100.000 shares 7.84% . . . . . 10,000 10,000 150,000 shares 8.50% . . . . 15,000 15.000 45,000 9% 45.000 10 %

Redeemable-95.000 and 100.000 shares, respectively, 10.20% (Note 5) . . . . 9,500 2% 10,000 2%

Long Term Debt (Note 7) lowa Power and Ught Company First mortgage bonds-Interest Rate Maturities Range Average i

1982-1986 .3114% to 3-5/8% 3.4 % 22,158 22.295 1987-1992 3-5/8% to 4-5/8% 4.1% 17,899 17,958 1993-1998 6-5/8 % 6.6 % 14,025 14,100 1999-2004 61/2% to 10-3/4% 8.8 % ~ 57,100 57,450 2005-2007 5.9% to 8-3/4"'. 7.9 % 77,998 77.998 2009 93/4% 9.8 % 30,000 -

Bank credit agreement (Note 7). . ,.. . . ... 8,500 -

Debentures,4-5/8% due 1989 . .. . . 7,600 7,702 Note 6.7% due 2003. . .. 1,000 1,000 Note 6.1% due 2007. . ... . .. 1,000 1,000 Pollution controf reverue bonds, guaranteed-5.1 % due serially 1983 to 1997. .. . . 8,600 8,600 s 5.6% due serially 1984 to 2003. . .. .. 5,060 5.060 250,940 49 % _213,163 48 %

. TotalCapitatization . . . . . . . . ...... . .. .. $510,787 100% $_448.643 100%

l Trw accompanying retes are an ar*egras part of mis statement.

\.,

< n 16

,._ . . . . . . . . . . . m - - - < - -

_ . . _ , _ . . , _ . , _ . , . . ... . . ~ . . . _ . . , _ . . . - , . . , _ _ , , , - -

IOWA RESOURCES INC.

Consolidated Statement of Changes in Financial Position

. _f .o u :T :<, . :W;; ,;- ;r~.z~:': .~). [ ;;..,. -

' Year Ended December 31 1979 1978 1977- 1970' 1975-Source of Funds (in Thousands)- 2

,3 Operations ' Netincome(Note 2) . . . . S 26,538 $ 24,C85 $ 18.825 S 15.571 S 13.693 Additems not requiring current outlay of funds:

Depreciation and amortization. 23,458 18.218 16.478 15.741 13.617 ;

Deferred income taxes. net . 6,511 5.161 3.686 3.540 2.571 Deferralof investment tax credit. net . . . . .. . . . 6,388 8.253 5.551 4.158 ~ 2,766 Allowance for funds used during ,

construction and for nuclear ..

fuet advance. . . . . . - (6,978) (11.265) (7.754) (3.436) (3,013) 55,897 45.052 36,786 35.574 29.634-a Ch nge in Working Capital Notes payable. . . . ... 10,349 34.475 (22.680) (7.910)- ' (1.010) '

Cash, notes and accounts -- .

receivable. . . . 2,440 (14,307) 2,672' (3,535). '

. (2.254)'

Short-term investments . . . . (650) 15.276 -(15.276) - - - -

Materials, supplies and electric production fuel . . ... (13,928) (3,235) ' 1.714 .(563) (2.300) ;

Rate refunds. . . . . (62) (347) (10.119)' 4.041 1,658 g Accounts payable. . .. 2,739 6,141 2.746 9,560 (481)

Taxes accrued . . . ... 5,142 344 3.516 .(2.984) ~ ~ 6,494 Interest accrued. . . . 1,326 (20) 1,084 . 2.201' (32i Current portion of long-term debt , .

and preferred stock . (5,798) 1.207 ' 5.165 ,(98)l " 1327 Other. . . ... .. 937 (82) '1,135 - (1.008) q 608 2,495 - 39.452 (30.043) ~ (296): '3,010 '

4

.. 3 Fin ncing and Other Common stock . .. . . . ... . ' 17,067 - 5,855 25.095 18.350 12.653 J.

Preferred stock. . . . . . . ... - .

- .14,759 '

' 9.775 Long-term debt . . . . . . . . . . . . . 37,914 - 29,605 29.932 C Pollution controf revenue bond pro- -

ceeds received from trustees. . . 3,783 8,209 16.797 :1.183 ~ 2. 57' Other-net . ... . .. . . . ... 1,726 2,114.- '2.272 _ -872 3 60,490 16.218 89.528 50.307 24.488 i .: . $118,882 $100.722.' $ 96.271 E S 85.585;. $ 57.132 Application of Funds .. . .

.. Property,pfant and equipment, gross . S 82,524 - $ 86,632 ; 5 83,108 $ 74,758 7 $ 50.011 -

Nuclear fueladvance. . . . _..... . 21,063 .- _ . . .. ff Allowanca for funds J. . . . . . . . ,

' (6,978) (11.265) . .' (7.754) ' (3.436). (3.013)

Property' plant and equipment. net .

96,609. 75.367 75.354 ' 71,322 i 46.998 '

Common stock dividends declared . . 18,710.- '16,032' -13.496.~ M 11,449 / " c 8.839 : ,

Long-term det.t maturities and - . . - .

. s- 1 '

- sinking fund retirements.'. . . c. , .. <- 856' 7.296' E6.529 ; . . .i 924 ? '724 j Other. . . . . . i . . , . . . .2.. 2,707. 2.027. . 892 C1,8303- 571?

/ '

$118,882 .$100,722 ' $ 96.271 .S 65.585 ? $ 57.132 =

, ,, 4 a, * *

. Theacw.. nye.i,notesareanintegralpartof ttusstaternent- sz . ,

' ~'

s

'_, Y ;j * ~ J

, .s .

, e a.

f y.

, g, 4 v

. * -gj' g i , o

~

, s

=*'t y g r _m a y

4

• A A3 o

17,

- . . _ . .  %. __ . .. .u.,  %.m. ow _ .. waa .,; m,, , i

k; IOWA RESOU ACES !NC Notes to Consolidated Financia! Statements 4

(1) Summary of Significant Accounting Policies:

[f h (a) Peorgan'2ation and Cons.hdation

- (5 f- f.

t Pursuart 'O a CorDora'e reorgan:23t on e"eC' Ve NovemCer

'979 fowa pesco'ces c Decame a acia'ng cc ca a v Ai** owa b

3- Power 3rd L g"t Car"Dar , 35

• S C' "C Da: SuCs'd a's e

• p - reorganizancn was accoun'ec 'or as a cociing of nie ests see 4 'j h Note 4 towa pescarces was C'ga"ced as a "cid ng cor cany *a ,

'; ~ k .l '

engage n sar ous energv-re'a'ed bus nesses O +- he consooca'ed ' "a^: ai sta'eman's ncade me accour 's c'

/ '

• aH sutsad a' es a"er e i~raron ' cgn c aa' "'e co-cars ac.

\ . coun's anc arsact ens 'e"a o a cets n c'es cos v ea's "a.e

~ t 4 ~>~

• ceen 'ec' ass + ec 'o can'a'~ *c +e ' T9 o'esen a on l

1

-l "

tt , Generai

' e acccu-sna e: : as 1 rwa : ne' a'a a "'a rec ac-l g rn'Cance m + ' e f 'y , s vo- n' acccorts cras-' tac t, *e em I{e b Feder a E me 1, ;oc a a*c ,

-mss c r ;ERC, an<c r 3; +sc Deen ancotec c, ^e ' u 5've C cmme' o Ccmms y:n SCC (C) Utmty Plant 3 O 1I[ **~

_, E":'C ra as : a~ , irea y *~e or a "a 'oc "or ' ~

devote 0 'o R C C A .Cp 3sC" 'c " uCe aco aa ea o.ce .

C'/A5 %C" as Cav'O 'a s -9 Ce _"s "cs a^Co a r o ' A' i aa "e ; ~'

a f ringe ' ere' *s 30 s 'a' s ' 39C 20^e'3 C'M

' ands used of r'; ZOr; c ' ra (d) Joint Plant Ownership j ca, - + garo,s c g oome s .-ema- $3, .g

. 7 ,., 4 Dower 33 ,n3 , coa -+. as*s 3* [ acg mtg- s an - ~ , a gc r ' C C c"' P ' W " O f ' ' e.'

• e- o ' / Ce' 0"c' f'Cr as f,

shon ceon a nco tee B#s una osa

.St NO 3 dni NO 3 MtNJ d'ht NO Utmtv man ,n serece mines $33 6 5'5'- 5- 5-

-,; Uitty 3:a"? Jncer constructCr.'"imons. -

97 37 3 70 :

d_'

• Estratec for como enor %ces, - -

50 7 b

' . - m ,.

.., i..:.J.

p t'r'.1 A N, :'. ,etai . mors i .mo $152 4 >54 m. 5, , _ i s

' ~

.t  : . .  : ~.' .. 5-e ., ' 7 , , , ~ ' :. ? + W{. : ACCur"uiated 1*0 rec:3000 N 'Ons- $44 $ 53 $-

,S' 4 k. ' . ., , ,. .y Unit Capac.tv - V W 3 650 675 m ,

. 7., . f

,'I 4 ', ,3

' (( 4 - ..g M.N 5% 3] Jo q'-  ;

" 46 ',

l towa Pcaer snare-cercent

. . . e

. q a, s  : , ..

.. . 6: n

, l

]', l s.,,

3,.

g.) .cJ,

1. .a .? ^ , '4 ( ., V

. . f ,,.

',. p# '"e do4ar 3"Cun*S s"Cw" dCCve 'eDreser' ' Cwa PCwer C s"a'e g.

y.e' l ' . ,,% - ,- .

. . , , . .*. .. t., " g- , :( ^f t 3C^ 03 C Ca"t r"US' O'Cvide *s Ow ^

in 98Cn jctn! y-Owred

+

$ . po; v .e

p. 3"[ -' 'e ,Vg'

., SnanC ng 'or is snare ai *e enc ! cwa Powe' s share c' 0 rec * "-

4 r., * . .j p j-

. g;. ?3 A 4 3 . *. . ., ,, - w e w *. e '

1. 4 g 4 .

s Censes of '"e icinUy-ohned ur es s "C'LCed n !"e ccr'esOC"C:nC

- , m. .

P.' .,"%,V. g y<;,f " y. . -' Y M D 4. P.r:p .% - ocerating excenses en re Cerso icated Sta'eme,t o' mcor"e

%go. 4 .s gs k k i . . x.' y K : q . W

,. ' 1 ); lyf .4 .y y--Q.< : J. .

g[.t.P4 eQ..Q .

y* .f. C .p/. (e) a one :

Revenue

--a :a - :* e er -  ; a gas s 'eco'c" ' -

as s et *e e's aaC / m e : 3 arca" sea' (f) Ahowance for Funds Used During Construction ( AFUDC Se east ban

• of me Des voines Rive, o' cedes a aver p easv access e e ~' i 2^4^C" "' ^05 >Sec ' '~320"i J C" 'et "S e^'s X at,0n 'Of 'h9 Bctanic a C er'a' W"'C" *"e CCS' " OC owe : ' f C5 ": 3'43sC"aC e 'd'/" 2 "e."'

OCeGed

• De:P'" De f 'PSte '"e e = " C ' _ se0 'O' -^^^ C' Cr OTCcses at: 'ca :e - 1e c'e.

10'"e 's'tcr s C 3" entCV a 'asCmaSnq m reg cy e;ERC Rgc g-*gr -+ g em 35 3 gs-3"av Ct r ea-'y N 'f 00 C3e DAMS DC c 3n. , 33g cgr pg , c  ;; j45 3 ;;g. ;4 ;ng - cr Or in W se3sanai 'O'ai @SciaVs Ud ga, pg. g q gg .ag 3.C' ' a'9 ' ' 3 :

• C 9s P h a O ' 4 9' -"P'-

Des MC'res Bet 3n'C3? Ceme' Am te

'"e s N *Or %S v ea' S An%3: Veet^Q

'S

mitted to earn a fair retum on such cost and to recover it in the The totalincome tax expense as set fortti aoove produces the rates charged for utility services after the related plant is placed effective income tax rates as shown in the following schedule.

in service. AFUDC is a non-cash item which is classified in other These percentages are computed by dividing such total income income, except that the portion of the allowance related to bor- tax expense by the sum of such tax expense. net income and pre.

rowed funds is classified as a reduction of interest charges. The ferred dividends of subsidiary. The table below reconciles effective rata used to compute AFUDC was 10.0% in 1979 (composed of income tax rates to tne statutory Federal income tax rate aco!ica-6.2% for borrowed funds plus 3.8% for other funds) and was ble to each ceriod.

8.9% in 1978 (3.9% for borrowed funds plus 5.0% for other funds). Composite rates of 8.5%. 8.5% and 8.0% were utilized to . ear Ens cecemoer 31 compute AFUDC for the years 1977.1976 and 1975 respectively. H79 1978 1977 1976 1975 Effective mcome tax rate as reponed . 40 % 30 % 35 % 42 % 37 %

(g) Employees' Pension Plan State mcome taxes, tiet of Fcdcrat income Th2 costs of the pension plan, which covers substantially all tax benefits . . .. . (3) (3) (3) (4) (3) employees, were $1.932.000, $1.807.000 $1.397.000. $1.134.000 Cost of dismantimg property removed from ,,

U1d $1.296.000 for the years 1979.1978,1977.1976 and 1975, sennce, treated as current 9 ear tax expense rsspectively including amortization over a 30-year penod of the but cnarged to acaimulated provisions for cost of the benefits computed by reference to years of previous sirvice. The unfunded past service cost at December 31.1979. Str g ne tax p t[on overiuncer)'

rate deorniation . (2) -

(1) 0) -

wts (stimated to be $4.079.000. The actuarially computed value Taxes and pension costs treated as current year of VIsted benefits as of December 31,1979, was less than the tax expense but capitauzed per books. 2 4 4 3 3 totif pension fund. Anowance for funds . . 6 13 11 5 6

1. • • "on ot innstmuax cruit . 2 2 1 1 1 (h) Federal and State Income Taxes Otheritems. net . - 1 (1) - 2 Th3 items compnsing income tax expense are as follows: Statutory Federalmcorte tax rate. 46 % 48 % a8% 48 % a8%

Ycar Ended Decernter 31 (1) Depreciation

,- 1979 ,t978 1977 1976 1975 The provisions for depreciation as an annual percentage of the Federallaceae taxes- On Thousands) average depreciable olant in service, determined generally by the Cur ent o soon 5 3.342 $ 2.16a $ 1.671 $ 2.946 $ 2.682 a@ cam d Wa@W rates. wee as Mowt investment credits Year Enced December 31 camed back. ..

- (5.239) (903) - -

Provision for deferred taxes . 5.838 4.650 3.426 3.264 2.495 1979 1978 1977 1976 1975

, Ceferredtaxesprovidedin E:ectnc . 3.5% 36% 35% 35% 33%

onor years.cremt . (385) (298) (334) (290) (353) Gas- 3.8 38 37 36 3.5 investment tax caid:s. tiet. 7.921 8 458 6.151 4 845 2366 Common. 7.4 7.6 69 78 77 Total . - $16.738 5 9.715 $10.011 $10.765 $ 7.59o Renewals and betterments of units of crocerty and reolacements y pa$able -

m g unds d popeg are ea@ to utiW dam acants.

es e 5 2.614 5 1.753 $ 1.603 $ 1.721 $ 1.282 The repairs of property and renewals and replacements of items Provision for deferred taxes . 1,084 818 603 574 439 Deferrec taxes proviced in determined to be less than units of property are charged to mainte-pooryears-credit . (25) (8) #9) 18) 00) nance, Property units retired or otherwise disposed of in the nor-Total , S 3.673 5 2.563 5 2.197 5 2.297 5 1.711 mal course of business, together with the cost of removal less sal-vage, are charged to the accumulated provisions for depreciation income tases . . . . . . . . $20.400 $12 298 $12.208 513.052 $ 9 301 (2) Rate Matters:

Diferred income taxes are provided for the effect of using wa Maws ceW ha be m dace m ram inm 6 ays ah 29. m se eams hme M see man %

ace;lerated amortization for pollution control facilities, liberalized "

10x decreciation and shorter asset depreciation range tax lives. As -

" "9 defIrred taxes cecome currently payable. the related accumulated a o he S in April 1979, the ISC'C issued their final decision covenng gas def;rrals are credited to operating income. revenues collected subject to refund dunng 1978. A refund of $13 Th] accumulated investment tax credits are being amortized . m 3 hon including interest at 9% has been made Ths refund was over the life of the property giving rise to such credits. The amorti- recorded in the first quarter of 1979 and resulted in a reduction of zitions for the years 1979.1978,1977.1976 and 1975 were

$1.066.000 $956.000, $460.000. $405,000 and $293.000, rescec- net income per average common snare of 9c for 1979, after allow.

, tiv;ly. Investment tax r cadits available to reduce income taxes ing for income taxes at full statutory rates.

. which may be payacle in future years totaled approximately

$800.000 at December 31.1979.

19 c

Iowa Power filed requests for new electnc rates in June 1978. (3) Long. Term Power Purchase Contract:

and new gas rates in August 1978. intended to be placed into Under a contract with the NPPD ; cwa Power is purchasing one- :

effect on January 1.1979, and designed to increase annual elec- half of the output of the 778 megawatt Cooper Nuclear Station at tric and gas revenues over revenues which would have resulted Brownville. Nebraska which was placed in commercial service on from rates for prior periods finally approved by the ISCC by July 1.1974. As of December 31.1979. NPPD had issued $467.6 approximately $27 milhon and $4 4 million respectively. In million of Nuclear Facility Revenue Bonds (average interest rate of response to the voluntary price standards of the Council on Wage 5.8%) to finance tne construction of tnis station. to provide nec-and Price Stability. Iowa Power elected to place in effect on essary working capital and to satlsfy debt service requirements January 1,1979, only such portions of the new rates as were ex- through June 30.1974. A total of $429 milhon and $438 million of pected to increase annual electric and gas revenues by about $21 such bonds was outstanding at December 31,1979 and 1978.

million and $2.4 million, respectively, subject to refund. above the respectively.

previously approved rates including the level of rates reflected in Iowa Power has agreed to pay, during the period expiring in the April 1979 ISCC decision discussed above. On October 1. 2004, one-half of the monthly fixed and operating costs of the 1979, due to increased electric cos*s. the remaining portion of the plant (excluding depreciation) and its proportionate share of the June 1978 electric rate increase was placed into effect, subject to nuclear fuel costs based upon energy actually delivered. These refund. The new elect <ic and gas rates are intended, among other payments to NPPD are reflected as " Purchased Power-Nuclear" things, to produce sufficient revenues to offset the increased in the Consolidated Statement of income and in the Current rate-operation and interest expenses and to provide for an appropriate making process. The monthly fixed costs include the debt service return on Iowa Pwver's investment in Council Bluffs Unit 3 which payments necessary to retire the principal of and to pay the in-was placed into service in December 1978. The new electric rates terest on one-half of the bonds issued by NPPD The amount of

! also provide, suoject to refund, for the recovery during the four debt service payments on a monthly basis aoproximates $1.4 l

years ending 1982 of $1.4 million of the nuclear project costs million and is not contingent uoon the plant being in operation. The which were estimated to have no value for any future resumption net interest component of Iowa Power's payments to NPPD were of plans to construct a nuclear generating facility in contral lowa- $10,444.000. $11,556.000. $12.134.000. $11.640.000 and Electric and gas revenues for 1979 include $23.8 million and $11.489.000 for the years 1979,1978.1977,1976 and 1975.

52.4 million, respectively, subject to refund as to any amount not respectively.

allowed by the ISCC. After allowing for income taxes at full NPPD has contracted with General Electric (GE) for nuclear fue ;

statutory rates, net income and earnings per average common and fuel services for fuel loadings through 1980 and for GE to pur/

share for 1979 include $13.0 million and $1.76, respectively, chase the spent nuclear fuel from such fuel loadings. GE has attributable to revenues subject to refund. failed to remove spent fuel, alleging that federal policy on repro-In March 1979, Iowa Power paid $19.6 million to Nebraska cessing spent nuclear fuel excuses its obligation to perform under Dublic Power District (NPPD) for towa Power's share of uranium such contract. In October 1978, NPPC commenced litigation

costs needed for three refuelings at Cooper Nuclear Station. Towa against GE seeking specific performance under the contract. Iowe l Power is accruing carrying costs on this advance and has Power is not a party to the litigation. NPPD has completed expan-j requested approval of accounting procedures which will amortize sion of its nuclear fuel storage capacity at Cooper Nuclear Statior the advance and carrying costs and recover these amounts in and estimates that such expanded storage facilities will be ade-future electric rates. The ISCC has not given final approval or quate to store all of the spent nuclear fuel which GE is obligated I relection to the proposed accounting and rate treatment. At to remove under its contract and to serve NPPD's further needs

! December 31.1979, these carrying costs were $1.5 million (50.6 for storage until approximately 1990. NPPD financed the expan-million of equity funds and $0.9 million of borrowed funds) or $0.20 sion of its nuclear fuel storage capacity through the sale of the per average common share. Nuclear Facility Revenue Bonds referred to above. As a result of All of Iowa Power's electric sales are currently subject to an GE's failure to pay for and remove scent fuel. NPPD is including Energy Cost Adlustment Clause. The Clause is designed to reflect this unrecovered amount and a provision for final disposal of soe' changes in the costs of fuel used by towa Power to generate elec- fuel in the fuel cost billed to towa Power. In the event that NPPD tricity and enanges in the costs of electricity purchased by towa is successful in its litigation with GE, the future fuel cost billed to Power and to minimize the time required to reflect such changes lowa Power will be reduced by the amounts recovered.

n its electric rates. The monthly payments include amounts required for the main-l All of Iowa Power's gas sales are subject to an automatic Pur- tenance of various funds and reserves pursuant to the terms of 1 chased Gas Adjustment Clause which reflects changes in prices NPPD's Nuclear Facility Revenue Bond Resolution and the power ,

enarged by its pioehne suppliers. Changes in monthly contract purchase contract. It is assumed that these funds and reserves demand and commodify cost per unit of gas purchased by lowa will be available at the completion of t*te power purchase contrac )

Power are reflected in the regu.ar monthly bills sent to its gas to pay costs of decommissioning the station. I customers beginning 15 days after the date such unit costs NPPD has entered into a contract with Mobil Oil Corporation enange (Mobil) for the delivery of uranium concentrates which will provide most of NPPD's nuclear fuel requirements for the years 1981 through 1983. The contract provided for a cash advance to Mobi l l

20 -

of which lowa Power's 50% share was $19.6 million. The account- Under an Automatic Dividend Reinvestment and Stock Purchase ing tnd rate treatment of this advance is discussed in Note 2. Plan holders of common stock may purchase nsv snares of NPPD has purchased additional uranium concentrates from Schio common stock. A total of 981.284 shares of common stock was N:tural Resources Company in connection with nuclear fuel reserved for sale under the Plan at December 31,1979.

requirements through 1983 and is actively pursuing additional con- Under an Employee Stock Purchase Plan eligible employees tr: cts for subsequent years. In addition. NPPD has entered into a may purchase new shares of common stock. A total of 166.288 contract with Allied Chemical Corporation for conversion services shares of common stock was reserved for sale under the Plan at coviring the period 1980-1987. NPPD has a uranium enrichment December 31,1979.

sirvices contract with the Department of Energy. NPPD has con- Under a Tax Reduction Employee Stock Ownership Plan tr:cted with GE for fuel fabrication and supporting services be- (TRAESOP) new shares of common stock are issued to elig'ble ginning with the fuel reload required in 1981 and extending for employees. Funds contributed to the TRAESOP, in the form of cight years. common stock, are used to reduce Federal income taxes payable.

The Company reflects on the Conwiidated Balance Sheet as a A total of 192.400 shares of common stock was reserved for is-li;bility the portion (50%) of NPPD's Nuclear Facility Revenue suance under the plan at December 31,1979.

Bonds outstanding for which the Company is obligated to pay over th) ttrm of the contract, with a like amount representing its right (5) Redeemable Preferred Stock:

to purchase power under the contract as an asset. Inclusion of At December 31,1979,100.000 shares, $100 par value 10.20%

such amounts on the Consolidated Balance Sheet has had no Senes, Cumulative Preferred Stock is subject to a sinking fund re-tif2ct on net income nor on any amounts in the accompanyin9 quirement to retire 5.000 snares on Apnl 1 of each year commenc-Consolidated Statement of income inasmuch as no changes have ing in 1980. The sinking fund payments will retire the entire issue been made to date in the manner in which the payments made to not later than April 1,1999 No other series of the Cumulative Pre-NPPD are recovered in the ratemaking process. ferred Stock is subject to any mandatory redemotion recuirement.

(4) Common Stock: (6) Construction Expenditures and Commitments:

Effective with the reorganization on November 1,1979 holders Expenditures for property, plant and eouipment for 1979 were of shares of Iowa Power common stock automatically became $82.5 million and are budgeted at $97.2 million irl 1980. Iowa shireowners of Iowa Resources common stock on a share for Power has made construction commitments beyond 1980 of share basis. Frem)anuary 1,1975, to December 31,1979. com- approximately $76 million for its portion of jointly-owned gen-mon stock outstanding increased by a total of 3.437.505 shares. erating additions.

This increase in common stock outstanding arose from the sale of On February 18,1977, plans for the construction of a prcoosed 66,528 shares of common stock to employees under an Employee 1,270.000 kw jointiy-owned nuclear facility in central lowa (Van-Stock Purchase Plan, from the sale of 708.377 shares to share- dalia Project) were suspended indefinitely by the particicants due holdirs through the Automatic Dividend Reinvestment and Stock to substantial delays anticipated in obtaining regulatory approvals

' Purchase Plan, from the issuance of 137,600 shares to the Tax of the proposed site and facility under new lowa plant siting legis-Reduction Act Employee Stock Ownership Trust, and from the lation and uncertainties being expenenced by other utilities in fed-salis of common stock to the public in 1979 (375.000 shares), in erally regulated licensing and construction activities.

1977 (850,000 shares). in 1976 (700,000 shares) and in 1975 Expenditures through December 31,1979. totaled $9.1 million. a (600,000 shares). portion of which is deemed to have no value and is being amor-Common stock changed during the periods as folicws: tized, see Note 2.

Year Ended Cecemter 11 (7) Financings:

1979 1978 '1977 1976 1975 (a) Short-Term Debt U" Si"USI Interim financing of the construction program is obtained from short-term borrowing from banks or sale of commercial paper. At

- d ons a grms December 31,1979. lines of credit with various banks totated of common stock to employees . . 438 352 251 193 162 $44.7 million for which the banks are compensated with either a Adct ons ansing from sates fee or ComDensating balance. Short-term loans are generally of commCn stock to the pubbe - . 14.853 4.561 25.470 17.903 12.601 Accit'ons ansing from issuance of common stock to the Tat Reduct on Act Emotoyee Stock -

Ownerstuo trustf 1.812 997 427 278 -

Batance end of paned . - $146.308 $129 205 $t23.295 5 97.137 5 78363 21

arranged on a demand basis for periods of varying length not to 1978 exceed 270 days at a rate based on the pnme rate or commercial Electnc G_as, Other Total paper rate then in effect. Operating information- (in Thousands)

Comparable short-term borrowing statistics are: Revenues. $150.488 $ 76.667 5 177 $227.332 Pre-tax operatmg income . $ 37.057 $ S.393 $ 67 $ 45.517 1979 1978 Income taxes . 12.298 erating income . $M Maximum snort-term borrowmgs outstandmg dunng year . $5 .7 37 8 Average daily amount of short-term borrowmgs. 328.5 $17.4 Otherinformation-Weighted average inten st rate . 11.5 % 84% Depreciation. $ 14.193 $ 2.682 $ - $ 16.875 (b) Bank Cred.t Agreement Property. plant and equipment excestures. . 579004 5 5419 $ 2.609 $ 86.632 As of December 28.1979. Iowa Power and Continental lilinois National Bank and Trust Company entered into a $30 ms! lion credit Investment information-agreement for long-term notes to mature no later tnan December Identifiableassets(a) . $750.903 $ 68.347 $ 7 294 $826.544 31,1986. The maximum amount of such notes outstanding for Assets utilized for overall operations . 8.269 1979 was $8.5 million at an interest rate of 15% % Total assets. $834 813 (c) Sale of First Mortgage Bonds 1977 lowa Power sold $30 million First Mortgage Bonds. 9%% E!ectne g Other Tota Series due 2009, on January 30.1979. The net proceeds of $29.5 Operating information- (in Thousands) million were applied toward the payment of short-term debt. Revenues. $139.687 $ 59.799 $ 93 $199.579 (d) Sale of Additional Common Stock Pre-tax income . $ 35 791 $ 5.112 $ 7 3 40.910 On January 25.1979,375.000 shares of additional common income taxes . 12.208 stock were sold. The net proceeds of $9.4 million were applied Operatmg income . $ 28.702 toward the payment of short term debt. Otherinformation-Depreciation. $ 12.879 $ 2.575 $ - $ 15 454 (8) Segments of Business: Property. plant and lowa Resources is a holding company engaged in various eauioment expenditures. $ 78.295 5 3.553 $ 1.260 $ 83.108 aspects of tha energy business. Iowa Power is its wholly-owned Investment information-utihty operati% company engaged in generating and distributing identifiatte assets (a) . $678.213 $ 60 565 5 4 270 $743.048 electncal energy and distributing natural gas.

Assets utilized for overall operations . 20.101 1979 $763.149 Total assets.

Electne & Other Totat Operating information- (in Thousands) (a) Identifiable assets for electric and gas are utility plant less Revenues. $180164 $ 88.725 5 452 $269.341 reserves for depreciation and amortization, electric production Pre-tax operatmg mcorne . $ 58.792 $ 5.668 $ 185 $ 64.645 fuel, deferred gas purchase costs and natural gas storage. Other

!ncome taxes . 20.409 material and supplies, net acccunts receivable, productive ca-Operatmg income . $ 44 236 pacity under power purchase contract, and pollution control revenue bond proceeds held by trustee. Identifiable assets for Otfer information- other consists pnmarily of land.

Depreciation. $ 19.198 $ 2.872 -

$ 22.070 Property, plant and (9) Capital Leases:

equipment expenditures. $ 71.742 $ 8 998 $ 1.784 $ 82.524 Certain leases of Iowa Power presently accounted for as non-Investment information- capitalized financing leases in accordance with their treatment in Identifiable assets (a) . 1827 065 5 74.620 $ 9.158 $910.843 the ratemaking process meet the criteria for classification as Assets utilized for overall operatens . 9 920 capitalleases in reporting requirements of the Secunties and Ex-Totat assets. $920.763 change Commission. If such leases had been accounted for as capitat leases, assets would have increased by $6.9 million and

$5.5 million and liabilities would have increased by $6.3 million and $4.8 million as of December 31,1979 and December 31 1978 respectively. If such leases had been accounted for as Capital leases, expenses would not have increased matenally.

• 22

f-(10) Interchange Power, Net: Provision for decreciation is determined by applying the same depreciation rates to the trended plant accounts as applied for The addition of Council Bluffs Unit 3 generating unit in Decem.

historical cost depreciation.

ber 1978. reduced the 1979 energy purchases and provided Since only historical costs are deductible for income tax pur.

capacity for participation sales to lowa Electric Light and Power poses, the income tax expense in the historical cost financial Comoany through April 1981. Sales for 1979 were $8.7 million and at: r;flected as interchange Power, Net on the Consolidated statements is not restated for inflation.

Stat: ment of Income. Statement of adjusted income from operations and certain finan-cial statistics for:

(11) Quarterly Financial Data (Unaudited):

For the quarters shown, operating revenues, operating income, Year Endec cecerreer 31.1979 nit income, and eamings per average share of common stock (in Thousands) wire as follows: Conventional Constant Dollar Current Cost mstancal Average 1979 Average 1979 Quarter Enced Cost Doitars OcHars 1979 Mar 31 June 30 Sect. 50 Dec 31 Pevenues . $269 341 $269 341 $269 341 Revenues (000) . . . . $83.920 $54.648 $61.556 569.217 Operation and Maintenance . t 82.626 182.626 182.626 Goerating income (000). 13.236 7.863 11.523 11.614 Interest Excense. 21.127 21.127 21.127 Net locome (000) ... ... 8.945 3.531 7.142 6.920 Depreciation and Amortization . 22.070 40.894 44 259 Earnings per Average Share of Income Taxes. . . . .. 20.409 2C.409 20A09 Common Stock . $1.24 $ 48 5.96 $ 91 Other Income and Deductions-Net. (3.429) 13 429) 13 429)

- 1978 242.803 261.627 264.992 Revenues (000). $70.112 $49.1R1 $53.651 $54.388 Income from Continuing Ocerat: ens Operating income (000). 11.735 5.355 9.105 7.024 Exclusive of Reduction to Net income (000) . ... .. 9.620 3.278 6.799 4.988 Recoverable Amount . $ 26 538 $ 7.714 $ 4 349 Earnmgs per Average Share of 5 - $ 61548 incredse in Scecific Prices Common Stock . $1.43 $A8 $100 S.72 (48 451) (8.273)

Reduction to Net RecoveratN Amount .

increase in General Pnce level. -

(98.361)

Since the average number of shares of commen stock out-(4 )

st;nding increased each quarter, the sum of the quarterly earn- ,

p -

6) ings per average share will not necessanly equal the earnings per Net 5 a2m $ 66 l av rage share for a twelve month period.

The foregoing amounts are unaudited but reflect, in the opinion At December 31,1979, the nistorical cost of property. piant and eowo-of management, all normal recurring adjustments necessary for a ment. cefore deduction for deoreciation. was $779 mill:en. The Smi!ar

' fair statement of the results of operations for such quarters. amount determined for constant collars was $1298 milhon and for current Cost was $1.464 mikon (12) Supplementary information to Disclose Effects of Changing Prices (Unaudited): Under the ratemaking prescribed by the regulatory commissions This supplemeritary presentation, made consistent with State. to which lowa Power is subject, only the historical cost of plant is msnt No. 33 of the Financial Accounting Standards Board (FASB). recoverable in revenues as depreciation. Therefore, the excess of is intended to set forth the effect of both generalinflation and the cost of utility plant stated in terms of constant collars or cur-changes in specific prices. It should be viewed as an estimate of rent cost over the historic cost is not presently recoverable in the approximate effect of inflation, rather than as a precise rates and is included in the Cost of m3intaining stockhciders' m asure, equity.

Constant dollar amounts represent historical cost stated in For the same reason the present and future depreciation pro-t&rms of dollars of equal purchasing power, as measured by the visions are inadequate for purposes of maintaining the purchasing Consumer Price Index for all Urban Consumers (CPI-U). Current power invested by tne common stockholders and the related cash cost amounts reflect the changes in specific prices of property, flows are inadequate for reofacing the property. The impact of this plant and equipment from tne date acquired to the present and ratemaking process or ^e common stockholders is m4igated to diffir from constant dollar amounts to the extent that specific the ntent that deprr ale property is financed with debt which

. pnc;s have increased more or less rapidly than the general rate can be recaid with dollars of fess purchasing power.

[

t of inflation. The current cost is determined by indexing surviving procerty, plant and equipment by the Handy Whitman incex of Public Utility Construction Costs. Since the orcoerty, plant and equipment is not expected to be replaced precisely in kind, cur-rtnt Cost does not necessanly represent replacement cost.

l 23 j

The five-year presentation following, also made consistent with FASB No. 33. is intended to assist in analysis of the Company's financial statements relative to inflation.

Statement of selected supplementary financial data adjusted for Auditors' Report effects of changing prices for: TO THE SH AREOWNERS AND BOARD OF DIRECTORS OF IOWA RESOURCES INC-Year Ended December 31 We have examined the consolidated balance sheet and statement (Thousands of Dollars Except Per Share items) of captahzaten of Iowa Resources Inc. (an towa corporation refer (Constant Dottars in Average 1979 Dollars) to Note 1(a) for corporate reorganization) and subsidiaries as of De-1979 1978 1977 1976 1975 cember 31,1979 and 1978, and the related consolidated state-Operating revenues: ments of income and retained earnings and changes in financial Histoncal cost dollars. $269,341 $227.332 $199.579 $181.704 $156.806 position for each of the years in the five-year period ended Decern-Constant do!!ars. 269.341 253.044 239.165 231.792 211.571 ber 31.1979- Our examinations were made in accordance with income from continuing generally accepted auditing standards and, accordingly, included operations adiusted for such tests of the accounting records and such other auditing pro-general mflation . $ 7,714 cedures as we considered necessary in the circumstances.

Per common share. $ 1.04 in our actors' report dated January 24.1979, our opinion with respect to the 1978 financial statements was cualified as being sut>

o at ons ad sted or current cost $ 4.349 ject to the effect,if any, of the regulatory decision & ::.. <978 gas Per common share 5 0.59 rate increase collected subject to refund. As dit, cussed in Note 2 of Net assets at yeartid at Notes to the Consohdated Financial Statements, a final decision recoverable amount ad- was reached in Apnl 1979, and the refund was recorded in the first lusted for generalinflation Quarter of 1979. As a result. Our opinen qualification with respect to or current cost. $195.700 the 1978 consolidated financial statements is removed.

Cash dividends declared DM As discussed in Note 2 of Notes to Consohdated Financial State-common share: ments. the unancial statements for 1979 include carrying costs ac.

Historical cost dollars. $ 2.49 $ 2.34 $ 2.165 $ 2.025 $ 1.8S crued on a nuclear fue; advance and gas and electric revenues col-lected subject to refund. These matters are pending regulatory ar et price er common share at year end. decision of the Iowa State Commerce Commission.

Histoncal cost dottars. $ 22.25 $ 25.38 $ 26 88 $ 25.88 $ 22 63 in our opinion, subject to the effect, if any, on the 1979 financial Constant dollars. 21.01 27.21 31.42 32.29 29.60 statements of the regulatory decisions on the carrying costs of a Average consumer pnce nuclear fuel advance and the gas and electnc rate increases refer-indes 217.5* 195.4 181.5 170.5 161.2 red to in the preced:ng paragraph, the financial statements referred

• Estimated to above present fairly the consoiidated financial position of Iowa Resources Inc. and subs: diaries as of Decemoer 31.1979 and 1978 and the consolidated results of their operations and the changes in their financial position for each of the years in the five-year pered ending December 31,1979. in conformity with general-ly accepted accounting pnnciples applied on a consistent basis.

ARTHUR ANDERSEN & CO.

Des Moines. Iowa January 30.1980 i

'24

10WA RESOURCES INC.

• Management's Discussion and Analysis of Statement of income

% Changes in the results of operations since 1978 were caused pnmarily by changes in the following factors.

Revenues were up 18.5% in 1979 and 13 9% in 1978 because of the following:

Revenue increase l

f f (Decrease) From The Pnor Year g/

i Cause 1979 (In Thousands) 1978

[t' Electric w .#' & Changes n- ,

' Use per customer. $(1,379) $ 7.938 i

<)d Pnce per kwh 29.095 (247) l

@ Number of customers . 1.960 3.060 l

/ 7 $29.676 $10 801 l Gas Changes in-Use per customer. $(2.650) $ 2.802 Price per customer. 15,161 13A63 603 g .

Number of customers . (453)

$12.058 $16 868

( , A  !.

Higher electric rates in 1979 accounts for the major portion of the 19.7% increase in 1979 electric revenues, while a 7.3% in-vm h[ j ,h'il-

~

crease in 1978 electric sales is the principal factor accounting for

- ?C

'O y; the increase in 1978 electric revenues.

Unit gas sales were down 2.6% in 1979 and up 4.0% in 1978

- while gas revenues for these years increased 15.7% and 28.2%,

' 4 , resoectively. This increase in gas revenue is due primarily to the j M higher cost of gas purchased which, in turn, is flowed through the

, 1 -

1. . Purchased Cost of Gas Adjustment C:ause.

O .. *N. A further discussion of electric and gas rate increases can be

- .  % found in Footnote (2) to the Consolidated Financial Statements A i. Fuel for Electric Generation costs increased in 1979 and 1978 f by 38.0% and 11.9% respectitely. Costs increased in 1979 due

/ p; , pnmarily to increased generation resulting from the addition of W _ Council Bluffs Unit 3 (Unit 3), plac.ed in service in Decemoer 1978.

While the cost of coal including transportation charges increased

-Qy substantially in 1979 for other generating stations. per ton coal p

a charges for Unit 3, which accounted for 59% of total generation in 1979, were significantly lower than average coal costs for all e plants in 1978. In 1978 increases in per ton costs of fuel ac-1 counted for the increased expenditures. Company generated elec-tricity increased less than 1% in 1978. Changes in costs of fuel used in electric generating facilities are reflected in the Energy Cost Adjustment Clause in Iowa Power's electric rates.

Purchased Power - Nuclear costs increased in 1979 and de-4 creased slightly in 1978 due primarily to changes in the fuel cost portion of the cost of energy purcnased from Cocoer Nuclear Sta-tion (Cooper). The cost of fuel increased 96.7% and decreased 24.4% for 1979 and 1978, respective!y.

An estimated crowd of 340.000 attend-ed the Papal Mass held at t.iving His-tory Farrrs in Des Moines on Octoeer 4 The week-long visit of Poce Jonn I Pau! 18 to the United States also includ-ed visits to Boston. New York City, Chi-cago and Wasmngton. 0.C.

25

Iowa Power pays its proportionate sipe of Cooper's fixed, oper. Statements.)

ating and fuel costs, and although its commitment is recorded on Other income (Deductions), Net increased in 1978 due to a the Consolidated Balance Sheet, the energy received from Cocper reduction in other interest expense, which is comprised primarily is accounted for as purchased energy Since Cooper has been in of interest on rate refunds and income tax deficiencies, operation, the need to purchase electricity from other sources has Interest on Debt, comprised of botn long and short-term debt been reduced. However. Iowa Power has purchased electricity expenditures, was up substantially in 1979 and moderately in when such purchases could be made at a lower cost than would 1978. The 1979 increase reflects pnmanly the sale of $30 million have been incurred if it produced its own energy: The Energy Cost First Mortgage Bonds in January 1979 and approximately $11 mil-Adjustment Clause reflects the cost of the nuclear fuel and the lion of Pollution Control Revenue Bonds in December 1978. In cost of other energy purchases. (See Note 3 of Notes to Consoli- addition, short-term borrowings and interest rates increased in dated Financial Statements.) 1979 The 1978 increase is due to an increase in long-term debt Interchange Power, Not costs decreased substantially in 1979 incurred as permanent financing for the construction program and and increased moderately in 1978. Increased energy sales and an increase in short-term interest rates.

fewer purchases from other utilities in 1979 due to the additional Common Stock Dividends and Prices capacity of Unit 3 accounted pnncipally for the 1979 decrease. The Company and predecessor companies have paid dividends The 1978 increase was due pnmarily to an increase in net pur- on Common Stock each year since 1909. The price range of the Gas ur hase f e ale increased in both 1979 and 1978

" ' ""9 due to higher unit onces charged by pipeline supoliers. Increases eea ws ~-

in unit costs of gas are recoverable through the Purchased Gas Price Range Adjustment Clause in the gas rates. Unit gas sales decreased Dividends 2.6% in 1979 resulting from public conservation and more moder- Declared High Low ate heating requirements in 1979. Sales increased by 4.0% in 1978. ig7g Other Operation expenses reflect primanly increases in wages First Quarter . s.60 26 24-1/2 and benefits to the employees and increased costs of matenals Second Quarter . .63 26 22-3/8 and supplies. Other operating costs also increased stigntly in 1979 Thira Quarter. .63 25-7/8 24 due to the operation of Unit 3. placed in service in 1978. Fou tn 0 iarter . .63 24 1/8 21 1/8 Maintenance expenses reflect increases in employees' wages 1978 and Denefits and increases in the costs of matenals and supplies. First Quarter . 5.56 26-7/8 25 Scheduled outages for the installation of a new water cooling sys. Second Quarter . .59 26-3/4 25 tem permitted more extensive maintenance at Des Moines Power Third Quarter. 59 28 26 1/8 Fourtn Quarter . .60 27 23-7/8 Station in 1978.

Depreciation expense increased in both 1979 and 1978 due to Lines of Business increases in depreciable plant in service. The approximate percentages of the Company's revenues and income Taxes increased in 1979 because of an increase in tax- income before taxes for the years 1975 through 1979 were as able income and the effective tax rate, which more than offsets a follows:

decrease in the federal income statutory rate to 46% in 1979 from year Ended Decernter 31 48%. 'j979 1978 1977 1976 1975 Other Taxes increased in both years due primarity to an in- Amans crease in property taxes resulting from new construction- E'ectnc . 67 % 66 % 70 % 73 % 71 %

Allowance for Equity and Borrowed Funds Used During Gas. 33 34 33 27 29 Construction and for Nuclear Fuel Advance decreased in 1979 Operating income Before and increased in 1978. These variations were due primarily to con- Income Taxes struction expeiditures on Unit 3. placed in service in December E!ectne . 91 82 89 86 83 1978. The allowance for funds rate increased to 10.0% in 1979 Gas. 9 18 12 14 17 from 8.9% in 1978. Starting in Apn! 1979. Iowa Power began ac- Approximately 64% of the Company's 1979 operating revenues cruing carrying costs on a $19 6 mil! ion advance payment to the was denved from electric and gas service fumisned in Des Moine Nebraska Public Power Distnct for the Company's share cf ura- and environs.

nium costs needed for three refuelings at Cooper Nuclear Station. Revenues and operating income from sources other than elec-(See Notes if and 2 of Notes to Consolidated Financial tnc and gas is less than one percent in each year.

I l

l l

26

g 10WA RESOURCESINC.

The Area Served by towa Power l

l i

l Icwa Power, the major operating subsidiary of umHESOTA gCN ./ C . % % .~;%; T 1~2 0. = 2 C A %"f N'l lowa Resources Inc., provides gas and elec- g q tnc service to communities in an area cover- If '- -

a . mscossm rig more than 5.600 square miles The area osougo 3 encompasses Des Moines. the state's largest - w^". . a l metropolitan area, where Comoany head-IOWA q.

W Quarters is located, and also includes Council Bluffs, one of the major communities in -

, j western Iowa. More than 550.000 people 73 q receive service in 26 counties. E!ectnc sennce oe _ t.;

is provided to 119 incorporated communities. ~ [

whi!e gas is dstnbuted in 78 incorporated j-communities. The region is characterized by ^; "

• w's oun wer

'

• C*"**

~

diversified industnes. histonc and recreation sites, prosperous farms and attractive res: den-NEBRASKA r: '

g

. . et coveed Biue s -

o,, %,,

-r 4 p

tial areas.

l E e }'

Knomalie ILLihols I essea. w . I l CoatF. ired Generating Station s

o, g l c.. m. 3 -- Lov u sw.oa; k Nuclear Generating Station 8 5aeaMo+= ,~

k' cb. ..

l D Division / Area Offices and Service Centers ?Qg th=q=

c,,,,, ,,,, g] 1 Missouri

.]

_., I e Area Service Centers Electnc Incorporated Customers Gas Customers Pcoulation Communities Central and Southeast Region 164.000 117.000 390.000 67 Western D: vision 63.000 14.000 160.000 63

. . , , - . , . m, nwr - -~ ~n ---,-~~----~~~-.-y

~

- ', _ .~ y Q ._. ,

%.-A;13.:;  !

$,7' Q L - / kb r' g.

j -

M..,2D 4;W1- s  :' j

.g;.. ,, m t. .

M.Brlyk eig . .

.k _

i l

l The area we serve is charactenzed by this farming scene with the skyhne of Des Moines as background The area enjoys a diverse econcmy which nur-tures agricultural, business and manu-factunng mterests 27

1 10WA RESOURCES INC.

Electric and Gas Statistics i

Elsctric 1979 1978 1977 1976 Revenues (000)

Residential $ 79,603 $ 68.278 $ 62,359 3 58,8-Small general service . 48,110 39.800 37,417 35.3 Large general service . 42,555 36.952 34,432 32,2-Other. 9,896 5.458 5.479 5.5-Total revenues. S 180,164 5 150.488 $ 139.687 $ 131.9 Sales (000's kwh) Residential 1,677,211 1,678,914 1,533.168 1.439.1:

Small general service . 1,052,509 1.012,729 959.331 912.9-Large general service . 1,493,222 1,508.055 1,419.220 1.292,0 Other. 106,002 107.413 103.125 109.9:

Total sales. 4,328,944 4.307.111 ,4 114.844 3.754.1:

Customers (year end) Residential 200,387 197.351 193.034 187,7 Smail general service . 25,708 25.447 25,166 24.9 Large general service . 356 352 348 3' Other. 954 935 936 9<

Total customers 227,405 224.085 219.484 213.8 Other Peak demand - MW (summer-winter) . 1,119 787 1.064-777 1,064-736 944-6 System load f actor 48.8 % 51.1 % 47.1 % 50.1 Average annual residential use-kwh 8,444 8.610 8.061 7,7 Average residential revenue per kwh . 4.75c 4.07c 4.07c 4.0 Utility plant investment per customer . S 2,998 $ 2,734 $ 2.454 $ 2,1 Gas Residential . . S 47,431 $ 40.847 5 30,781 $ 27,1 Revenues (000)

Commerical & industrial-firm . ~ 25,200 21,279 16 C'89 13.9 Commercial &industriai interruotible 16,303 13.670 11,764 8.1 Other . ( 209) 871 1.165 5 Total revenues. S 88,725 $ 76.667 $ 59.799 $ 49.7 Sales (000's ccf) Residential .

173,898 178.962 164.986 170.6 Commercial & industrial-firm . 102,223 104.534 98.589 101.4 Commercial & industnal-in;erruptible 85,928 88 041 93.571 86.7 Total sales . 362,049 371.537 357.146 358.7 Customers (year end) Residential . . 117,523 116.771 116.055 115.1 Commerical & industrial-firm . 13,685 13.385 13.259 13/

Commercial & industrial-interruptible 246 294 301 2 Total customers 131,454 130.450 129.615 128.E Other Maximum daily sendout (000's ccf). 2,364 2.460 2.474 2.4 Average annual residential use-ccf . 1,490 1,543 1,432 1 .:

Average residential revenue per ccf . 27.28c 22.82c 18.660 155 Utility plant investment per customer . S 673 $ 616 5 590 $  ?

28

l l

1 t

i - , - , + < ..s . . .

4 , , . , . , . . - +

, g ,. ,., .

, .y

'.. ' ' N ~

• - li.5

~

'375 - '974 '969  ; . .

w. .

-p..,

5' 412 41 250 23446 - . . .' -

5 5

.- . - - . I, ' " '

. ; ,.( ' . e.' j.' .'f.g 29 679 23 N 4 13 659 i . ,. ,. .,.r.. . '.'.- -

. .' g . T 25 '55 20 587 '9 . :..-  ; ~ ?!, 3 x .. . ,. .

- 'gg 4 25' '

' ~

2485 ..c. = ' . r e .v 4 662  : - '. . v . .

w) n.*

~

E .) Ni & l & . *..;.

> 908 5 68 '38 5 50 '09 s';l ..__

._.U,y &.  ; . / l.

..,s% .h .:. N. u ., c. - .

s .

r; -

.J r , ,d.. 9 x f Ch. -. m .i. . ; ..h. , .

. c. .i. *^- . .

445 464 > 298 381 960 002 M %i... .%f ,~' - 2 i " C ;& -.

8 08 762 267 5 6917 M$N 1 i

-KtyW 4 D J.K].I 2 e. ' 4d.,.jb.i.p'7h

'i . j li . [ - .'.Y-228 524 203 101 889 996 . .,r N, s l' - 4 P ". ? ' , - '

• Ef'L

^> 7 3' '4395 85 786 M' ' j y y [.. ?*-' #.

^

. ].(g'y' g.]h; .]J'p[{ "7. .n *

^ 7 ? h ;j 6 9 .a 7 '

^- ' 'U ' 4 4 2 492 7M m .-  %. K" : ' g .), - ' . 4" . g 3

OV::.N kw m ' ,.

' QV'

.3 ' ;03 320 . m. , e. %.,. i '.4 y

.)  ; . . ~

d 0 m#c.: ' s .Al J .4 -41 m . 9.y*- N. % - < .- . + ' ' "& ...

I h.}..bk kg ?,'[T

,~ . u,. J.M.;,. y% ,s ..m l e

~v. , . , p ss .

p. ;

\

ago ap; 2ap -- .m .

' "j . j'

. 5 e

---1 o aad

, n^ ^

aC a ,c' s D.0 Y. . > ^ . ,

e - .. , . , - .' .-. d,V

,. y ' ,"' I p. ; $.'y . , . w; . ' N. . . , - .- ~,r-.

, . . . .* . . : 3 3 Me.*. ...... s ,

l S., - M.' t - '~/.  : .<,

a_

., gx 4 8

%.n.- w- ,

~,

u , -4 6,, - . . .

g.r ;_ ', ; , f.g!. s o, . _%,.'- %; g.: r.s% . , ; y;,g.

48*% ac 3 50 5 %

a.: /y;'*,., 4 1_  % .A ..#. s. .% ,i #.  ;

, yn

c. .

. ..b, ,o 14. . : , . - . _.. 4 .-, t4 .

'v

.e 6 '44

, ,7F - -

L- -

l

,s -. Q !f -, hc / f ,d@. .%-)'

(. c{ % **d . , ..N .i[.-., 7.M. %, , .U 7, , , " .N', T - ,C. C, .s / < L, <

4 " ,' '#<

6 y; e?' E D,k

. , n -g' c...

i gg .3 m .>

J a c, ...r-

,4 .. -

s.

o-9v m ,. . .; -..e i- ., _. ,

% 7"- .

s v

v.s .v 4w-

• .; _ g.

y sd.- , T. & . ** I < ' *

Q .r.' . - , y l b.l _- - y 2 v ,. k ...  :-

.. ,v e .

' p.p * ,?  : . .l '.s ,l - Q' ' ^ lo i

-3 , c .,.  :

s m ,g 3 1 so: '^0 ,-

.e ,

'l a_ ' l

~*

? -

. 'i:

.,w 10 '46 6 691 e.  ?- fi' ' ' '- 2

': 298 g,g  ?

a 259 "o' - ' ' , .- 4:.'

t' L '  : . ;. ~:

c- y  ; . .1 .1 { $

3 399  :.

n s*

~, - * * -p'.'

M 8 '

= 6.'. -P ,? . -

o .'

g. ,. .

t,, .' . . .' 3 . '. g

45 898 5 38 5'O $ 26 806  ;; ' . a ,. . '. .~ < <'

, i.- ~.

o -

." ira . , ,-.= 9 ,d_ ;

- i- . .

,- .,. ,,...y.. o

,. . . , . . . . , - - .s . ... _ .. ,

, +e-

'72 264 6' '47 ' 75.0C' s',h. ~~~ ,. e *! ..

• x .' , . l

_ -, :' . '  ;~ D

.N '. i * - *

~ '

y 4c7 qc g i 96 '83 ,.

4' ,

. .' s s -

J s. .. s

." ,' ' J .. ,..

3 w'<.'.,.-

3,a- - - car

.n'

5. 7q 5 'c.,

1

>: , , ' _ '... ~ _ e I 18

_ _' 5 4 2 _ _

?96 ' O ' 400 ' * : '.." 2. . ,g M'

7

. i'

.,,n

'l -

1 -

, ? .-3r . . / P,. T.#v;-

3 6

y. 4..; ...

.y .,

+ , . w. n.

4 298 ' ' 3 ' 98 '03 985 I .-

U' ' " #-e .-

' n. -

, 'N- -

,,20 ,

, ,m u, ,, 4 ,,,,ee, S-

. -.,o..-

j, . . , . 3 ,

.. . c#[ . .. .,

t- .-

..,...3.'

~- - + ,,as C6 364 323 /,- '

,. , l - ;_= . .

.4 <4' '

%'l 27 4'C '26 636

'16 432 = -'

, . ..z.

w.

. y~

) .t.

. .. . , 4. ,

.p . . . 3Y .b.). i , 9.[ .; j'

}. ..,; %..,Sh',.

.t . .

i..ff ,p.l Y . lf& [.? ' .'jO ? '.' .[s..h

.- s.

, .y2.  ? ' h'{l.};;; ~.. . D.$u.r.hv. .m y~ p -,y,

'5'9 '

494 '

709 - -

'4 G' ': 3SC S 93; Tre two,grt sxv ma*es a simng 55^ 5 53C 5 425 taccco 'or Des VC<es ew C v'c Cen er ano ac ace Nooen man 'e

'eCen!T CCer'ed C6"*er 3'*gr3 Ce N'at

' cwa Sa % Dero'3C V 'Cr 3- av +g l d' 3 < O' ^ 43 Cr Cg'l~'S 3"d 9ver'S

?

o .

• ' IOWA RESOURCES INC.

E Consolidated Financial Data E*' ' " " 1979 1978 1977 1976 "h)*U '

g Revenues. 5269,341 $227.332 $199.579 $181.7C Operating expenses . 204,696 181.815 158.669 142.26 income taxes . 20,409 12.298 12.208 13.05 Operating income. 44,236 33.219 28.702 26.38 Other income, net. 2,945 6,343 1,506 1.7C Fixed charges. 20,643_ 14.877 1 .383 12.52 Net income. $ 23 7,8 $ 24.685 5 18.825 $ 15.57 Dividends on common stock S 18,710 $ 16.032 $ 13.496 $ 11.44 -

Earnings per share of common stock. $3.57 $3.62 $3.14 $2.6 Dividends paid per share of common stock . $2.46 $2.30 $2.13 $2.C Average book value per share . $26.46 $25.59 $24.50 $23.1 Return on average common equity 13.5 % 14.2 % 12.8 % 12.2 -

Property, Plant and Equipment (000)

Electric . $681,704 $612.672 $538.553 $463.82 Gas. 88,476 80.416 76,514 73.6E Other. 8,661 6.876 4.267 3.0C Total gross plant. $778,841 $699.964 $619.334 $540.45 Net af ter depreciation $605,889 $546.886 $481.043, $414.91 Accrued depreciation / property, plant and equipment 22.2 % 21.9 % 22.3 % 23.2 Annual depreciation / average plant in service . 3.5 % 3.7 % 3.6 % 3< ,

Capitalization Ratios Total capitalization (000) $510,787 $448.643 $430.222 $341.6C Common stock equity. . . 40.2 % 40.2 % 38.6 % 39.4 Preferred stock. _

10.7 % 12.3 % 12.8 % 11.7' Long-term debt . , , 49.1 % 47.5 % 48.6 % 48.9 1

Numberof Employees. Year End 1,548 1,518 1.473 1,4e l

30

i l.

I * * -

'4% il r *X'W p JA.

l 1975 1974 1969 # , ;'  ; e a C A , _-y#

ii 156.806 $127.308 $ 77.515 l" 7.6 * ' e.

Zi-i 124.717 9.301 99,712 6.861 56.384 8.346 h i $ 1 v

3' _

22.788 20,735 12.785 /

F }-

1 1,745 1.213 598 .

10.840 13.693 9.735

$ 12.213 5 535

$ 7.848 h',- [,

f, f*

~

C~

8.839 $ 7.419 $ 5.163 # 50 k

$2.92 $2.91 $2.43 -

f

$1.84 $1.74 $1.60 ~

i $22.81 $22.18 $18.19 12.3% 13.1 % 13.4 %

j i .-

J

! 397.838 $359.701 $246.863 , j.

l 70,426 67,102 49.487 ._ -

j 702 702 706 168.966 $427.505 $297.056 155.525 $319.217 $225.950 -

f

! 24 2 % 25 3 % 23 9 %

i 34% 32% 3.1 %

! '87.054 $258.583 $172.087 39.1 % 36.8 % 34.7 % ,- ',.-

~ .

13.9 % 11.6 % 11 6 %

47.0 % 51.6 % 53.7 %

. 4 1.415 1.402 1,294 --' t j

I W

E The Sidney Rodeo of Chamoicns makes towa home for the largest out-door rodeo in the country. Fifty thou-sand f ans and Drofess:cnal cowboys Come each August to this town of 1.000 for a rousing frve-day scectac:e of bravery and ski!I.

l 31

,_ , _ - , _ , - _ - _ - ~ . - - - - - m . -- --- - - - - -

IOWA RESOURCES INC.

• Board of Directors i

i i

l

- ~ -

. . =:. ,  : - u; = . , ;=: ~ c '~ -

Albert L Anderson + John Ruan*

West Des Moines. Iowa Des Moines, Iowa President of Md-Amatica Body President of Ruan Transport Corporation

& Eouipment Co., Inc. (Motor Carrier)

(Manufactunng) (Elected 1958)

(Elected 1973) Ralph F. Schlenker Waldo O. Bargmann* Des Moines, Iowa Des Moines. Iowa Senior Vice Presdent of Iowa Resources i General Manager of John Deere and President of Industnes of Iowa Corp.

Des Moines Works (Manufacturing) (Elected 1975)

(Elected 1975) Dwight H. Swanson*

Charles Duchen* + Des Moines, towa shs Moines, Iowa Chairman and President of Iowa

' Chairman of the Board of Younkers. Inc. Resources and Chairman (Retail Merchandising) of Iowa Power (Elected 1974) (Elected 1%9)

Jack R. Eakin + Charles W. Wilson

• Couned B!uffs, Iowa Red Oak. towa Chairman of the Board of State Bank and Pres 4ent of Wilson Concrete Company Trust of Couned Bluffs (Banking) (Manufactunng)

(Eiected 1973) (Elected 1969)

Charles O. Laverty Daniel J. Zaff arano, Ph.D.

' indianola. Iowa Ames. lowa President of Laverty Eievator, Inc. Vice President for Research and Dean of (Agriculture) Graduate Conege, Iowa State University (Elected 1979) (Elected 1973)

James R. Lyon . Member Executwe Committee Des Moines, Iowa

+ Member Audit Committee Senior Vice Presdent of Iowa Resources and President of Iowa Power (Elected 1972)

Mark W. Putney i

Des Moines. Iowa Executive Vice President of Iowa Resources and towa Power (Elected 1974) 4 '

8 sy ' .

y , .

l l

i i

..= f,2.*.p:.) W % & ;;;:S * %;f.F.:.;;.c f l 5 *'n %71: :.. '

^ '

r. .

,~ .

, Left to right: Mark W. Putney, Ratph i Left to right: Charles O. Laverty,

F. Schlenker, James R. Lyon. ' Charles W. Wilson, Albert L Anderson, Charles Duchen, Jack R. Eakin. Daniel i . J. Zaffarano, John Ruan, Waldo O.

• Bargmann. .

. e :;.

r3 '(

9' J 32

-~ ~ -- -

.. . . . . . . _ . - - s .~ A.-- . . . . ~ ~ -

• -,.,----------,.-% y,,e .g y-.,y--- - - - - - - - ---mm.--.-- , -.v-- r ---- . -- g grgm.m -

e 10WA RESOURCES INC.

R Officers Dwight H. Swanson Phillip D. Ehm owa Resources Inc. Vice President and Treasurer Chairman and President Mark W. Putney William M. Merrill Executive Vice President Vice President and Controller James R. Lyon Lynn K. Vorbrich General Counset and Secretary Senior Vice President Ralph F. Schlenker M. Jean Olmstead Assistant Secretary Senior Vice President tw2 Power and Light Company Dwight H. Swanson Eugene E. Young Chairman and Chief Executive Officer; Vice President (Market;ng);

Age 60; 11 years of Company service Age 54; 10 years of Company service James R. Lyon Lynn K. Vorbrich President (Operations Group); General Counset and Secretary-Age 52; 26 years of Company service Age 41; 7 years of Company service Mark W. Putney Dallas K. Hamerlinck Executive Vice President (Administrative Group); Assistant %ce President (Communications).

Age 51; 11 years of Company service Age 37; 6 years of Company service Ralph F. Schlenker Loyd R. Hornback Senior Mce President (Development Group) Assistant Vice President (Western Division);

Age 51; 30 years of Company service Age 49,24 years of Company service Edward L Birdsall Rex E. Jorgensen Mce President (Engineering and Power Production). Assistant Vice President Age 58; 33 years of Company sennce (Purchasing and Auxiliary Services);

Phillip D. Ehm Age 57; 29 years of Company service Mce President and Treasurer; Keith D. Hartje Age 47; 25 years of Company service Assistant Secretary; J. Paul Glahn Age 30. 4 years of Company service Vice President (Gas Supply and Operations); M. Jean Olmstead Age 49,25 years of Company service Assistant Secretary-Age 54: 30 years of Company service Perry L Greenwood Vice President (Personnel); Merlyn D. Kleen Age 59. 20 years of Company service Assistant Treasurer; John E. Luhring Age 54; 27 years of Company service

%ce President (Electric Operations);

Age 51; 26 years of Company service William M. Merrill Vce President a.cd Controller; Age 56; 29 years of Company service

[

r

DearReader.

To help us plan future communications designed to meet your needs, we would appreciate a minute of your time to complete the following survey. Please fill out ~

this card, tear on the perforation and return to us. No postage is necessary. Thank you for your interest and hstp.

Which of the following best describes your interest in _

lowa Resources?

Stocnbroker Customer W'8 ~ ,

Shareowner ,

Employee News Media Government *

• Financial institutional Otner Analyst investor (Please specify)

Do you feel the information given in this annual report and our previous quarterly reports is sufficient to keep '

youinformedof Companyactivities?

Yes No Not entirely How could we do better?

How would you rate the 1979 annualreport? .

Exce!ient Average Poor Good Marginal Unsatisfactory

, Which sections do you find most helpful? Please list

] your 1st,2nd and 3rdpreferences.

Highlights Photographs Presioent's Letter Graphs Reviewof Activities Management's Dis-(main narrative section) cussion and Analysis Other ( )

Financial Statements Which sections do you find least helpful? ,

Highlights Photographs Pres: dent's Letter Grachs Reviewof Activities Management's Dis-(main narrative section) cussion and Analysis -

Financial Statements Otheri 1 11a shareowner, how long have you held your shares? .

Less than 1 year 1-2 years 3-5 years 6-10 years More tnan t o years Legislative activity concerning energy can have an important effect on Company operations and your in- -

terests as shareowners. Nearly 300 shareowners have expressed a desire to be informed and active when such legislation surfaces. As a shareowner, would you like to beincludeJ on this list? .

Yes No Do you think American corporations have the right to express their views to the public in advertising? _; . .

. / .

)

Yes No .c

~

If yes, do you feel the management cf Iowa Resources

~

s' .

${ -

' ~

Inc. should speak out on issues affecting our business, '

~ ~* '~= ~ ~ ~ ~~ ~

such as energy policy and free enterprise? ,

1 Yes No ,

What other issues, if any, do you feel we should ad-dress through our advertising and public information

-programs?

Optional:

Name Address City State Zip

o * -

')

lED P. D. Ehm 10108 P0tU0d Vice President and Treasurer 566 Grand Avenue / r.0. Box 657 Ces Moines. lowa 50303 515-281-2349 July 17, 1980 Mr. T. M. Kyster Assistant General Manager Nebraska Public Power District P.O. Box 466 Columbus, Nebraska 68601

Dear Mr. Kyster:

In accordance with the requirements of the Price Anderson Act (Public Law 94-197) related to retrospective insurance premiums assessable against existing nuclear plants, Iowa Power hereby acknowledges its responsibility under the power purchase contract for one-half the capacity of Cooper Nuclear Station, to assume one-half of the retrospective premium requirements which the Federal government may assess in the event of a major nuclear incident.

It is our understanding that under present law each nuclear plant must show a financial responsibility to provide cash in an amount not to exceed $10 million in one year. Iowa Power's responsibility with respect to the Cooper Nuclear Station would then be an amount not to exceed S5 million in one year.

As required by Docket No. 50-298 of the Nuclear Regulatory Commission, )

Towa Power has chosen Alternate No. 5 as the means to demonstrate its j financial integrity and responsibility. Alternate No. 5 requires the submission of annual certified financial statements and cash flow projections which would indicate and support that cash would be available to satisfy any requirements under this guarantee. Iowa Power is submitting herewith three copies of the 1979 audited financial statements as contained in the annual report to stockholders on pages 14 through 24 and a Uniform Forecast form for utility analysts dated February 15, 1980. In connection therewith Iowa Power states that as shown in Note 7, Financings, of the Notes to Financial Statements, Iowa Power has established lines of credit with various banks totalicg $44.65 million. Iowa Power also states that as shown on the Uniform Forecast that construction expenditures for the 5 year period ended 1984 will total some $384 million (excluding AFUDC) and that of such total the Company forecasts that 55% of the cash requirements will be generated intcrnally leaving 45% of such total cash requi rements to be obtained from external sources.

9'...

l IOWs PO(;"

l Mr. T..M. Kyster l- Nebraska Public Power District-LPage Two Based on.the'above information.. Iowa Power states that it can meet the requirement of an assessment not to exceed $5 million in one year-from

'either funds to be generated internally or in the alternative-from funds to be acquired by. exercising a portion of its call on established lines .

of credit..

i Yours truly, l

. .; :- y ,

p ,~

l ., ,, f,,1 ~-

!. 't i l' ~

m.- 4 l

Enclosures l

?

i ll

~

.. . . . . , __ - - -.