ML19329A564
| ML19329A564 | |
| Person / Time | |
|---|---|
| Site: | Oconee  |
| Issue date: | 11/10/1970 |
| From: | Lovejoy C US ATOMIC ENERGY COMMISSION (AEC) |
| To: | Long C US ATOMIC ENERGY COMMISSION (AEC) |
| References | |
| NUDOCS 8001070561 | |
| Download: ML19329A564 (5) | |
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UNITED STATES
.)'7 ATOMIC ENERGY COMMISSION
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November 10, 1970 Charles G. Iong, Chief
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PWR Project Branch No. 2,-
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THRU: WalkerE.Campbelif/45
.k on' troller for Accounting
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DUKE POWER COMPANY, CCONEE NUCLEAR STATION, UNIT NO.1 -
DOCvF2 NO. 269 6
Enclosed is my financial testimony on the subject matter.
The testimony has been prepared for inclusion in the main body of the staff's Safety Evaluation with a financial analysis of the Company attached as an appendix to the Safety Evaluation.
A copy of the testimony is being sent to Thomas F.
Engelhardt, OGC.
(Charles'A.h L - &,,-; -
ejo Staff Accountant Accounting Procedures Branch Office of the Controller cc: Thomas F. Engelhardt, OGC e
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L FINANCIAL QUALIFICATIONS The Commission's regulations which relate to the financial data and information required to establish financial qualifications for an applicant for operating licenses are 10 CFR 50.33(f) and 10 CFR 50 Appendix C.
Duke Power Company's application as amended by Amend-ment No. 22 thereto, and the accompanying certified annual financial statements provided the financial information required by the Commission's regulations.
These submittals contain the estimated annual operating costs for the first five years of operation plus the estimated cost of e
permanently shutting down Oconee Unit No.1 and maintaining it in a safe condition, if and when it may become necessary. The i
estimated operating costs are $10,025,44. pcr year for the five-year period. Such costs include costs of operation, maintenance, fuel, ad valorem taxes and insurance. The applicant's estimate of the cost of permanently shutting down the facility and maintaining it in a safe condition is $500,000, based on the reactor (with fuel removed) and associated nuclear systems remaining in place, isolated by fencing and monitored periodically by guards. The funds for these estimated costs will be obtained from the electr$ cal operating revenues derived from system-wide operation of Duke Power Company (Amendment No. 22).
We have examined the certified financial statements of Duke Po, ar Company to determine whether the Company is financially qualified to meet these estimated costs. The:information' contained in the i
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, 1969 Annual Report indicates that-electric operating revenues for 1969 totaled- $342.2 million; operating expenses (including taxes) was $266.1 million; the interest on the long-term debt was earned
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2.7 times;.and the net income for the year was $54.4 million, of which $39.4 million was distributed as dividends to the stockholders and $14.2 million (net) was retained for use in the business. As of December. 31, 1969, the Company's assets totaled $1,399 million, most j-of which was invested in electric plant ($1,284.1 million) and earnings reinvested in the business totaled $66.9 million.
Financial ratios computed from the 1969 financial statements indicate a sound financial condition; e.g., long-term debt to total capitalization
.55, and to net utility plant -.52; net plant to capitalization - 1.07;
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the operating ratio
.78; and the rates of return on common - 12.37.,
on stockholders' investment - 10.17. and on total investment - 5.67..
The. record of the Company's operations over the past five years reflects that operating revenues increased from $234.4'million in 1965 to $342.2 million in 1969 or 467.; net income increased from
$40.8 million to $54.4 million or 337.; and net-investment in utility l plant from $711.2 million to $1,284.1 million or 817..
Moody's t
Investors Service rates the Company's first mortgage bonds as Aa (high' grade) and its debentures as A (higher medium grade). The Company's Dun and Bradstreet-Credit Rating is AaA1.
Evaluation of the financial data submitted by the. applicant, summarized above, results in the staff's conclusion that there is reasonable
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. assurance that the applicant possesses or can obtain the necessary
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funds to meet the requirements of 10 CFR 50.33(f) with_ respect to A copy of the staff's financial operation of Oconee Unit No.1.
analysis is attached as' Appendix F.
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. DUKE' POWER CQ4PANY_
DOCKET NO. 50-269_
FINANCIAL ANALYSIS _
(Dollars in millions)
Calendar Year Ended Dec. 311965 [
1968 1
1969 _
$ 368.8
$ 663.7
$ 515.0 77'.2 1Ang-term debt 1,284.1 1,048.6
.52
.49 Utility plant (net)
.52 Ratio - debt to fixed plant 1,04S.6 711.2 1,284.1 718.8 989.2 Utility plant (net) 1,204.9
.99 1.06 1.07 Capitalization Ratio - net plant to capitalization 474.2 348.7 541.2 789.9 Stockholders' equity 1,399.0 1,153.1 41
.44 Total assets
.39 44.2 39.3 Proprietary ratio 47.4 Earnings for common stock 386.2 369.2 315.0 12.37.
11.97.
12.57.
Common equity Rate of return on common equity 40.8 54.4 49.1 474.2 350.0 Het income 541.2 11.77.
Stockholders' equity _
10.17.
10.47.
Rate of return on total equity 65.8 52.9 78.5 789.9 Het income before interest 1,399.0 1,153.1 6.7%
5.6%
5.7%
Liabilities and capital Rate of return on total investment 65.8 52.9 78.5 13.8 21.9 Net income before interest 29.0 3.8 Interest on long-term debt 2.7 3.0 No. of times fixed charges earned 40.8 49.1 54.4 Net income 344.6 315.0 236.3 15.87.
15.67.
17.37.
-Total revenues Net income. ratio (percentage) 249.2 185.8 266.1 234.4
.xpenses (including taxes) 342.2 312.2 Operating
,79
.80 Operating revenues
.78,
Operating ratio 52.8 66.9 Retained earnings 1968 1969 7.ofTotal$
- 7. of Total _
} Amount _
$ 663.7 55.17.
$ 515.0 52.17.
Amount _
10.6 Capitalizatio_n:
105.0 long-term debt 155.0 12.9 37.3 32.0_ '
369.2 Preferred stock 386.2 l$ 989.2 100.0*A Common' stock 100.07.
jl.204.9_
Total Aa First Mortgage Moody's Bond Rating:
A Debentures AaA1 i
. Dun and.Bradstreet Credit Rat ng 4-woe
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