ML19329C910
| ML19329C910 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse  |
| Issue date: | 08/01/1969 |
| From: | Sampson G, Williams H CLEVELAND ELECTRIC ILLUMINATING CO., TOLEDO EDISON CO. |
| To: | |
| Shared Package | |
| ML19329C911 | List: |
| References | |
| NUDOCS 8002200889 | |
| Download: ML19329C910 (12) | |
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UNITED STATES OF MERICA ATOMIC ENERGY COMMISSICN
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. Received w/Ltr CaN In the Matter of
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THE 'IOLEDO EDISON COMPANY
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.and THE CIEVEIAND ELECTRIC ILLUMINATING COMPANY )
Docket No. 50 g,).,u, O
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Davis-Besse Nuclear Power Station
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t APPLICATION FOR LICENSES UNDER THE f
AICMIC ENERGY ACT OF 1954 AS MENDED
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DAVIS-BESSE NUCLEAR POWER STATION
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-AUGUST 1, 1969
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THE TOLEDO EDISON CCMPANY EE CLEVELAND EIZCTRIC ILLGIINATING COMPANY Application for Utilization Facility Construction Per=it and Operatinz License General Infornation - 10 CFR 750 33 1.
U1mes and Addresses of Applicants a.
The Toledo Edison Company 420 Madisen Avenue Toledo, Ohio k3601 b.
The Cleveland Electric Illuminating Company P.O. Box 5000 55 Public Square Cleveland, Ohio 44101 The Toledo Edison Cc=pany (Toledo) and The Cleveland Electric Illuminating Ccmpany (Cleveland) vill share, in the ratios indicated below, undivided cwnership of the utilization facility, to be known as the Davis-Besse Nuclear Pcver Station, and its site. Toledo has complete responsibility for the design and installation of the Davis-Besse station and for the prosecution of this application and all related licensing activities and proceedings before the Atemic Energy Cc= mission. Toledo will also have ecmplete responsibility for the operation and maintenance of the Davis-Eesse station. Toledo and Cleveland are not acting as the agents or representatives of any other persons in filing this application.
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2.
Description of Business and Organization of Applicants a.
Toledo is a public utility incorporated under the laws of the State of Ohio and is engaged primarily in the production, purchase, transmission, distribution and sale of electricity in northwestern Ohio.
Toledo supplies electrical power within a service area of 2,500 square miles which has an estimated population of 708,000. Retail power is supplied within the corporation limits of 47 municipalities in the ser-vice area including the City of Toledo and wholesale power is supplied to 15 municipally-owned sys tems. Toledo has a total system capability
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of more than 1.2 million kilowatts.
l Toledo is not evned, controlled or dominated by an alien, foreign corporation, or foreign government. The names and business addresses of 1
Toledo's directors and principal officers, all of whom are citizens of the United States, are as follows :
Directors Dr. William S. Carlson Fred E. Fuller University of Toledo Fuller, Seney, Henry & Hodge 2801 W. Bancroft Street h05 Madison Avenue Toledo, Ohio h3606 Toledo, Chio 43604 Samuel G. Carson Virgil A. Gladieux The Toledo Trust Company Gladieux Food Services, Inc.
Su=mit and Madison 2630 W. Alexis Road Toledo, Ohio h3603 Toledo, Ohio h3613 Jchn K. Davis William M. Hankins, Jr.
I The Toledo Edison Company The Kiemle-Hankins Company 10 h20 Madison Avenue 30335 Oregon Road Toledo, Chio h3601 Perrysburg, Ohio Charles E. Flahie Marvin S. Kobacker The Toledo Edison Company Federal's, Inc.-Department Stores h20 Madison Avenue h08 Summit Street Toledo, Ohio h3601 Toledo, Ohio 43603 2
Amendment No. 10
k,,
J. Preston Levis Glenn J. Sampson Owens-Illinois, Inc.
The Toledo Edison Company 405 Madison Avenue k20 Madison Avenue Toledo, Ohio 43601 Toledo, Ohio h3601 W. Royse Moran Willard I. Webb, III The Toledo Edison Company Ohio Citizens Trust Company 420 Madison Avenue 405 Madisen Avenue Toledo, Ohio k3601 Toledo, Ohio 43603 Henry A. Page, Jr.
John P. Williansen Page Dairy Company The Toledo Edison Company Wade and Knapp Streets 420 Madison Avenue Toledo, Ohio 43601 Toledo, Ohio 43601 William R. Poole The Toledo Edison Company k20 Madison Avenue Toledo, Ohio 43601 Officers John K. Davis Thomas J. Kozak President Vice President, Electrical k20 Madison Avenue 420 Madison Avenue Toledo, Ohio 43601 Toledo, Ohio 43601 Charles E. Flahie W. Royse Moran Executive Vice President Vice President, h20 Madison Avenue Administrative Services Toledo, Ohio 43601 h20 Madison Avenue Toledo, Ohio 43601 John P. Williamson Senior Vice President Donald G. Nicholson h20 Madison Avenue Secretary and Treasurer Toledo, Ohio 43601 420 Madison Avenue Toledo, Ohio k3601 John H. Barker Vice President, Public Relations William R. Poole h20 Madison Avenue Vice President, Marketing Toledo, Ohio 43601 420 Madison Avenue Toledo, Ohio 43601 Frank W. Keith Vice President, Personnel Glenn J. Sampson 420 Madison Avenue Vice President, Power Toledo, Ohio 43601 420 Madison Avenue Toledo, Ohio 43601 Thaddeus A. Kostanski Controller 420 Madison Avenue Toledo, Ohio 43601 3
g b.
Cleveland is a public utility incorporated under the laws of the
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State of Chio and is engaged primarily in the generation and distribu-tien of electricity in a 1,700 square =ile area in northesstern Ohio.
Cleveland provides retail power to an estimated population of 2,171,000 in the City of Cleveland and 88 other incorporated municipalities, and 4
surrounding territory. Cleveland has a total installed generating l10 capacity of 3,235,000 kilowatts.
Cleveland is not owned, controlled or dominated by an alien, foreign
- corporation, or foreign govern =ent.
The names and business addresses of Cleveland's dorectors and principal officers, all of who= are citi:: ens of the United States, are as follows:
Directors Ralph M. Besse Robert W. Morse The Cleveland Electric Case Western Reserve University
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Illu=inating Co=pany 20h0 Adelbert Road 55 Public Square Cleveland, Ohio hh106 Cleveland, Ohio hhll3 Karl H. Rudolph John E. Kusik The Cleveland Electric The Chesapeake & Ohio Railway Co.
Illu=inating Co=pany 3500 Ter=inal Tower 55 Public Square d
Cleveland, Ohio khll3 Cleveland, Ohio hhll3 l
Jchn Lansdale, Jr.
Charles E. Spahr Squire, Sanders & Dempsey The Standard 011 Company (Ohio)
Union Con:=erce Building, Room 1857 1750 Midland Building Cleveland, Ohio khllh Cleveland, Ohio khl15 Elmer L. Lindseth Herbert E. Strawbridge 55 Public Square The Higbee Company Cleveland, Ohio hhll3 100 Public Square Cleveland, Ohio khll3 1
Hugh D. Luke 10 The Reliance Electric Company Richard B. Tullis i
2h701 Euclid Avenue Harris-Intertype Corporation Cleveland, Ohio hhllT 55 Public Square Cleveland,- Chio hhll3 Morton L. Mandel Pre =ier. Industrial Corporation l
hh15 Euclid Avenue Cleveland, Ohio kh103 h
Amendment no. 10 t
- ~ - -,,., -
2 Officers
-Ralph M. Besse Harold L. Williams Chairman of the Board Vice President-Engineering t
55 Public Square 55 Public Square Cleveland, Ohio'hh113 Clevelud, Ohio hh113 4
i
'Karl H. Rudolph Ray =ond W. Wyman President Vice President-Marketing 55 Public Square 55 Public Square
. Cleveland, Ohio hhll3 Cleveland, Ohio hhll3 Richard A. Miller Clement T. Loshing Vice President-Finance Treasurer 55 Public Square 55 Public Square Cleveland, Ohio 44113 Cleveland, Ohio khll3 Robert M. Ginn Phillip B. Perry Executive Vice President Vice President-General Services i
55 Public Square 55 Public Square Cleveland, Ohio hki13-Cleveland, Ohio hh113 j
-Lee C. Howley Thornton L. Thurber Vice President and Controller 10 General Counsel 55 Public Square 55 Public Square Cleveland, Ohio hhll3 Cleveland, Ohio hh113 i
William R. Vogelsang Harry T. Sealy _
Secretary 3
i Vice President-Operations 55 Public Square 55 Public Square Cleveland, Ohio kh113 Cleveland, Chio 44113 3.
Class and Period of License Requested Applicants request a class 10k(b) construction permit and operating license 'for a period of h0 years authorizing Toledo to construct and i
operate tite utilization facility described in Item 5 below.
h.
Additional Licenses Requested
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Applicants request such additional source, special nuclear, and by-f product material licenses as may be necessary and appropriate to the p
construction and operation of the facility.
l 5
Amendment No. 10 i
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5 Description an'd Use of Facility l
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The Davis-Besse Nuclear Power Station vill be a ' nuclear electric generating station with a pressurized water reactor steam supply system.
The. nuclear stea= supply systen vill be operated initially at a reactor i
power level of 2,633 Mut and is ultimately expected to operate at a =ax-1
. imum reactor power level of 2,772 Mut. The corresponding net electrical outputs.are 872 Mwe initially and 906 Mwe ultimately, i
The-Davis-Besse Nuclear Pcver Station vill be located in north-central-Chio on the shores of Lake Erie, approximately 21 miles east of the city of Toledo.
Details concerning the station and the site are contained in the Preliminary Facility Description and Safety Analysis Report (PSAR) which constitutes a part of this application.
l 6.
Financial Cualifications s
Applicants will share undivided ownership of the station and the sta-tion site. as tenants in co==on without right of partition. The two companies vill share in the costs of construction and operation and in 2
the energy production in proportion to their undivided ownership interests as follows:
The Toledo Edison Company 52.5%
The Cleveland Electric Illu=inating Co=pany h7.5%
a.
Estimate of Construction Costs
?(i) Total nuclear production plant costs, including
~ interest during construc--
. tion
$266,102,000 (ii) Transmission, distribution and general plant costs,
10 including interest during construction
$ lh,0 30,000 ~
6 Amendment No. 10
(iii). nuclear fuel inventory cost for first core, including interest
$ 25,610,000 10 l
TOTAL
$ 305,Th2,000 -
- The ite=s included in the foregoing categories are the ea:e as those defined in the applicable electric plant and nuclear fuel inventory accounts prescribed by the Federal Power Co==ission.
The bases for such ite=s are the contract prices, with estimated escalation, for the nuclear stea= supply syste= and for the uraniu= and fabrication of the T
initial core, the published prices for uraniu= enrich =ent, and Toledo's estimate of the balance of plant costs.
b.
Source of Construction Funds i
Construction of the nuclear station vill be financed as an integral part of the total construction programs of the two companies in the sa=e general =anner as other additions to their generating facilities l -
. are financed. Esti=ated overall construction expenditures for the six-year period of 1970-1975 (the latest period for which budgeted figures l 10 are available) for Toledo and Cleveland are projected to total approxi-
=ately $332,279,000 and $79h,000,000, respectively. A portion of the l 10 funds required for the construction programs of the two ec=panies vill be provided fro = internal sources such as depreciation and retained earnings; the re=ainder is to be provided by issuance of new debt and j
1 equity securities and short-ter= borrowing.
1 c.
Financial Statements The 1968 and 1969 annual reports of Toledo and Cleveland are
-l 10 attached to this application as Appendices A and B, respectively.
l 7
Amend:ent No. 10
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Technical Qualifications l
A description of the technical qualifications of Toledo and its principal contractors -is contained in Section 1 of the PSAR. A descrip-i.
tien of Toledo's training program is centained in Section 12 of the
- PSAR.
8.
Ccmpletion Date HThe earliest completion date of the nuclear station is estimated to i
be April 1, 1974 and the latest completion date is estimated to be l
April 1, 1975 9
Security Agreement The application does not contain any Restricted Data or other defense informatien. Applicants agree that they will not permit any t
individual to have access.to Restricted Data until the Civil Service Commission shall have made an investigation and a report to the' Atomic Energy.Co= mission on the charseter, associations, and loyalty of such individual, and the Atcmic Energy Commission shall have determined that permitting such person to have access to Restricted Data vill not en-1 5
danger the cccmon defense and security.
- 10. Communications Toledo, on behalf of itself and Cleveland, will hereafter submit all E
further information required -in connection with this application.
Applicants request that all' co1=nunications pertaining to this applica-
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tion be sent to:
Glenn J. Sampson Vice President, Power l
420 Madison Avenue
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The Toledo Edison Ccepany_
Toledo, Ohio 43601 8
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In addition, it is requested that copies of each ec=munication be sent to Toledo's counsel:
Leslie Henry, Esq.
Fuller, Seney, Henry & Hodge 800 Owens-Illinois Building 405 Madison Avenue Toledo, Chic 43604 George F. Trowbridge, Esq.
Shaw, Pittman, Potts, Trowbridge & Madden 91017th Street, N. W.
Washington, D. C. 20006 and to Cleveland's counsel:
Donald H. Hauser, Esq.
The Cleveland Electric Illuminating Ccmpany P.O. Box 5000, Roem 610 Cleveland, Ohio 44101 THE TOLEDO EDISON COMPIGY By (f
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Jamel Vice President. Power (Title )
T Sworn to and subscribed before me, this
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/ L L Notary Public GENEVA l. LEAKE f'"iry Public in and for Lucas County Ohio My Ccamission Erpires:
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i HIGHLIGHTS To our shareowners:
" "WY 10-Year Growth Pattern l 1968 1967 Change earnings, dividends and physical facilities-con-i EARNINGS PER COMMON SHARE
$2.35
$2.28
+ 3%
tinued and was the basic theme of our operations Up due to outstanding -ales growth which
'" 1900-more than offset um e4C per share effect of The quarterly dividend declared in December 93 the 10% Federal income tax surcharge in was increased three cents to 40 cents per com-1968.
mon share, marking the eighth consecutive year
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in which dividends have been raised. On an an-l nua: basis this is now equivalent to $1.60 per r
DIVIDENDS PER COMMON SHARE
$1.51
$1.42 1 6%
share.
Up for the eighth consecutive year. The quar-Earnings per common share in 1968 increased
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terly dividend declared in December was 116 increased 3e to 40 per share. This is equ,v-seven cents to $2.35. Inflationary pressures evi-i i
alent to $1.60 on an annualized bas,is.
denced themselves in every expense category, and the newly imposed 10 per cent Federal in-come tax surcharge for the full year had the i
effect cf reducing our earnings gain by 24 cents REVENUES (Millions)
$80.1
$70.3
+ 14 %
per common share.
l Reflected continued vigorous industrial ac-tivity plus excellent growth and high usage Annual revenues of $80 million were 14 per 87 in residential and commercial classifications.
cent higher than in 1967. Th.is resulted both from t
included were about $3 million of new short-a gratifying 12 per cent sales increase within
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terrn power sales to neighboring utilities in the latter pait of year.
our Northwestern Ohio service area along with new short-term energy sa es to other Ohio utility OPERATING EXPENSES (Millions) 563.0
$54.8
+ 15%
companies.
Increased due to 10% tax surcharge, more Total energy sales amounted to nearly 5 billion generation, higher coal, freight and labor kilowatt-hours, an increase of 19 per cent, the t
89 costs, increased property tax rates. and de-preciation on additional property.
highest gain in the company s history.
A new 213,000-kilowatt generating unit, the largest on our system, was put into service in June. This highly-efficient equipment and other ENERGY SALES (Millions of changes increased our net capability by over Kilowatt-Hours) 4,961 4,158
+ 19%
one-fourth to more thar; one million kilowatts, 120 Established a new annual growth record due and made available the capacity of older units to i
v ce ar a as oli as ne hort ter ales t help supply the power needs of other utilities on neighboring utilities.
a short-term sales basis. Thus we were able to i
utilize our system generating capacity more fully, and profitably, than is normally the case immedi-PEAK LOAD (Megawatts) 860 763
+ 13%
ately after the addition of a new unit. These sales Record system peak load of 860 megawatts was established during the summer as a re-will continue through 1969 and into 1970 at re-I I
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bined with air-conditionMg loads during ments increase.
unusually hot, humid weather.
Operating expenses increased 15 per cent in 1968. This was due not only to the 19 per cent 1958 1ES8 l
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increased generatian of energy, but also in part f '
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are jointly planning construction of four large to continuing increases in the cost of fuel, labor and materials. Tax expense was much greater generating units initially, as well as interconnect-ing high voltage transmission lines. The Davis-because of the new 10 per cent Federal income Besse nuclear plant will be the fourth unit in this d
tax surcharge, higher taxable income, and nu-power-pooling arrangement. Also, we are par-merous new local property tax levies passed in ticipating in a 2651-mile transmission project 1968 and effective for the full year. The comple-g which will link electric systems in Ohio, Indiana
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tion of our new $33 million generating unit re-iL suited in greater depreciation charges on the and lilinois with Michigan over a 345,000-volt 4
g transmission system. lt will be completed in 1969.
increased plant investment.
In addition, the Company is one of 26 e,ectric
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interest costs were up sharply for the year re-tion on several fronts. We are planning to invest utilities involved in the East Central Area Re-flecting large borrowings necessary to finance
$188 million, under our construction program for liability agreement, with the solo purpose of im-the new generating unit and other necessary the next five years, to provide the facilities proving bulk power reliability in an 8-state area l
construction projects. Another factor was the needed to meet the growing energy demands.
serving a population of 32 million.
level of interest rates.
The largest single project is an 872,000 kilowatt As we announced to you in April, your Com-The growth in our company's sales has been, nuclear power plant, the Davis-Besse Nuclear pany and seven other utilities in Ohio, Pennsyl-and will continue to be, primarily the result of a Power Station, to be situated on Lake Erie, 25 vania and Kentucky, including the CAPCO group, sustained, aggressive marketing effort. This is miles cast of Toledo. We will build and operate are discussing possible formation of a holding concentrated upon the uses of electricity which this plant, shtring its cost with The Cleveland company. Work is progressing on this proposed produce high-volume sales around the clock and Electric illuminating Company. We now estimate plan but it will require many more months of across the cateridar, giving us a very good sys-the cost at $207 million, including $25 million for study before a recommendation can be made to tem load factor and thereby an efficient use of the initial nuclear fuel loading. Toledo Edison's you.
your investment. We tailor our sales program and 52.5 per cent ownership calls for an investment in meeting the challenges ahead, we will main-rates to promote the all-electric concept, with a on our part of $109 million, of which $91 million lain close surveillance of our own company op-success that is evident in this year's annual re-will be spent in the 1969-1973 period. This plant cration. This includes effecting economics port. Industrial development is another produc-is scheduled for completion in 1974.
wherever possible, combating the upward pres-tive area of marketing concentration. New and Abo.ut 40 per cent of the $188 million needed sure of costs, and constantly surveying our rate expanded industries not only produce more for the five-year construction program will come structures and their relationship to a proper re-kilowatt-hour sales, but also attract related in-from internal sources. About $20 million will be tum on your investment, giving consideration to dustries and bring high employment, which needed in 1969, of which approximately $6 mil-all factors involved.
results in boosting commercial and residential lion of short-term borrowings are planned. We in closing, let me extend appreciation of the developments and customer usage.
do not expect that long-term financing will be Board of Directors and management to the many Northwestern Ohio's thriving economy is ex-required before 1971.
peopic who helped to make the year 1968 a con-pected to bring an eight per cent average annual Economic production of the large future power tinuation of our Patterns of Growth for Toledo i
i kilowatt-hour sales growth in your Company's requirements and maximum reliability of bulk Edison: our 1,600 employees, our 58,000 inves-service area over the next five years, according power supply calls for intercompany action in tors and our 225,000 customers. We appreciate to our most recent projections. The challenge to such fields as system planning, power pooling the confidence our shareowners have expressed your management is to provide an ample supply and high-voltage transmission interconnections.
through their continued faith in the company.
of reliable electric power at rates to our cus-Substantial " economy-of-scale" benefits will re-tomers that are reasonable, economically sound, suit from such mutual efforts. Toledo Edison is Sincerely, and profitable yet competitive with other energy one of five companies (CAPCO Group), serving sources. Meeting such a challenge requires ac-Northern Ohio and Western Pennsylvania, which President l
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l PATTERNS OF GROWTH:
completion in June of a new major generating E-EE unit at Bay Shore Station.
l ll Usually the addition of a new unit is followed Common Dividends Declared by a period during which system capacity is increased for elghth consecuflve year t
n t fully utilized. However, these interim sales (current quarterly rate of dog
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Earnings and Dividends Grow, to other utilities enabled us to utilize more fully equivalent to sr.60 annuarty)
Despite 10% Surcharge and profitably our total generating capacity m-and Mounting Costs immediately after completion of the new unit.
An outstanding revenue gain was recorded E MI.. I
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by the industrial customer classification. This l
I reverne was up about $3 million, or 12 per E
h cent.
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Revenues from commercial customers in-
{e creased 10 per cent, well above our industry's average, or $1.1 million, while residential 1
Earnings per share of common stock were revenues increased more than seven per cent,
$2.35 compared with $2.28 in 1967. Without or $1.8 million.
.co i
the new 1968 Federal tax surcharge, earnings 1958 '59 to St 62 '63 '64 '65 to 57 88 would have shown an exceptionally good in.
Operating Expenses increase crease of 14 per cent to $2.59.
The higher level of power production, higher Earnings On Common Stock In December your Board of Directors voted taxes and higher labor, material and fuel costs Over8% annuaf growth since 1961 to increase quarterly dividends on common pushed total operating expenses up 15 per stock three cents to 40 cents per share. This cent.
is equivalent to $1.60 per share on an annual Fuel expense was up 28 per cent. About basis. The common dividend rate has been three-fourths of this increase was the result of m
raised in each of the past eight years.
more power generation. Virtually all of the re-mainder was due to higher coal costs and coal Revenues Move Up 14 Per Cent freight rates; however, most of this was offset e
The major factor in this earnings growth was a by increased revenues resulting from applica-j 14 per cent gain in total revenues which in.
tion of fuel escalator clauses in most of our u3,
creased $9.8 million, to $80 million, in 1968.
rates. Another factor contributing to higher D
All classifications of customers showed sub-fuel expense was a somewhat less efficient
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stantial gains, including exceptionally large system heat rate. The change from 9,899 BTU sales to other utilities in 1968.
per kilowatt-hour in 1967 to 10,095 BTU per The revenue from the short-term sales of kilowatt-hour in 1968 was due to more use of
,4a power to neighboring Ohio utilities during the older,less-efficient generating units for short-
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last half of the year totaled about $3 million.
term, cost-plus power sales to other Ohio These sales, from our older generating equip.
utilities.
i,3,.d.E.,,3,
.,3 3 y ment, were made possible by the on-schedule Higher labor and employee benefit costs, 4
I plus increased prices of nearly everything we Accounting Changes Made This depreciation reduction presently is equiv-buy, were important factors in increasing op-Effective July 1 the annual rate of credit for in-alent to an expense decrease of about 12 cents eration expenses, $1.5 million, or 12 per cent.
terest charged to construction was increased per common share on an annualized basis.
A major factor contributing to the size of the from 6 to 6% per cent, reflecting mare nearly The change was based on results of recent increase was the necessary personnel training today's cost of money. Because the interest studies of property service lives and other fac-in connection with the start-up and operation charges on the new generating unit ended tors by independent engineering consultants.
costs of the new generating unit along with the with its completion in June, the bulk of the The new rate is still slightly higher than de-operation of older generating units to provide interest charged to construction was at the preciation rates generally used by comparable the power for cost-plus sales to other Ohio lower rate. Thus the rate change had little electric utility companies, utility coropanies. These and a combination of effect on earnings in 1968. However, it will be-other factors made 1968 a higher-than-normal come more important as we again move into Holding Company Study Continues operation expense year.
a period of large construction expenditures.
In April,1968, we announced to you that we Maintenance expense increased only a Our book depreciation accrual rate was re-were involved in discussions toward the pos-nominal 3 per cent, $143,000, however, be-duced January 1,1969, from 3.4 to 3.2 per cent.
sible formation of a holding company which cause 1968 did not see a repetition of the dam-would encompass Toledo Edison and seven aging winter storms of 1967.
Other electric companies in Ohio, Pennsyl-Depreciation was up 12 per cent, or $1 mil-vania and Kentucky. Many more months of lion, due to increased plant investment in fa-work and study will be required before your cilities. The 1968 depreciation on the new $33 Board of Directors and management will be million generating unit,in operation since prepared to make a recommendation for your June, amounted to $590,000.
Living Better Electrically consideration. In the meantima jou can be as-Total taxes increased $2.6 million in 1968.
Residentia/ Use Per TED Customer sured that we will be working toward a plan Of this amount the Federal income tax sur-which will be in the best interest of our sooo -
charge was $1.2 million. Also, higher taxable sharcowners.
income added $523.000 to the Federalincome tan. The voters of Northwestern Ohio approved 8 5NO Growth Described At Financial Meetings numerous property tax increases, causing a In 1968 your Company's management con-sharp rise in the 1968 general tax expense of y
tinued the program of discussing our opera-your Cornpany.
t tions and plans with members of the financial in addition to the operating expenses de-g commumty in various cities across the coun-scribed above, bond interest expense in-
@4400 try. We were privileged to again appear in New creased $1.3 million, or 37 per cent, due to the Q
York at the invitation of the New York Society full-year effect of the $35-million bond issue of Security Analysts. Also, as a part of our pro-sold in August,1967. This was partially offset
@ dom gram, meetings were held before financial Ly an increase in interest charged to construc-(
groups in Detroit and Cleveland. These pro-tion, most of which was credited in the first half grams are presented to keep the financial of the year while the new generating unit was 1958 se so si 62 sa s4 es so 87 fea community apprised of your Company's ex-still under construction.
cellent growth record and potential.
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the customer and profitable to your Company.
that employment at the plant will reach 5,000 W
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m Special emphasis is given to the all-electric workers in the next few years.
, l l l-concept.
The development cf 350-acre Fort industry Industrial Park is indicative of the growing Diversity Marks industrial Growth number of smaller industries in the Toledo Record Sales Gains Achieved in 1968 the industrial expansion of the area area. The park development is nearing full continued. Plans were announced for new occupancy, four years ahead of schedule, with plants to manufacture products as diverse as 37 firms now established there. Your Company E
carbon black and noodles. We are particularly was a leading participant in establishing and E
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pleased that we will be serving another of supporting the local non-profit organization the nation's foremost companies, Phillips Pe-which developed this park.
troleum, which recently announced plans to Such industrial expansion stimulates our construct a multi-million dollar carbon black sales growth in other ways. We are expe-Excellent progress in sales to each electric plant and research facility in our area. Inci-riencing the follow-up expansion of related in-i customer classification marked 1968 as a year dentally, the noodle factory, which will initially dustries, commercial enterprises and home of exceptional growth. Sales totaled nearly employ about 30 workers, is typical of the building.
five billion kilowatt-hours in the year, an in.
many small factories with growth potential crease of more than 800 million kilowatt-hours which contribute to the economic vitality and All-Electric Concept Growing for the greatest annual gain in the history of diversity of the area. In addition to major In recognition of the economic desirability of your company. Of this 19 per cent increase, manufacturing units, small industries of this balanced seasonal load growth, we continue almost two-thirds was provided by our own type are much sought after by Toledo Edison's to actively promote electric space heating and customers and the remainder by new short-area development people.
the all-electric concept. This concentrated term sales to other utility systems.
The position of Toledo as one of the nation's marketing program has been aided by four In the past we have reported the success of major petroleum refining centers was further promotional electric rate decreases which we industrial development ef forts in Northwestern enhanced by the completion of a $50 million have put into effect in the past f;ve years and Ohio. A compilation of announced new plants expansion of Sun Oil's Toledo refinery. Pe-by the increasing prices of gas and other com-and expansions gives some measure cf the troleum refining has long been an important peting fuels. More than one-third of the new record rate at which Northwestern Ohio in-Part of this area's economy and a major user apartment units started in our service area last dustry is growing. As these are completed, of electric power. Because of the 24-hour-a-year were all-electric, as a result of our mar-they are expected to add more than $3 million day charactor of their operations and the keting concentration on this concept. Our go al a year to Toledo Edison's industrial revenues.
broad diversity of products they produce, the is to further increase the level in constructicn Such development of the general economy petroleum companies provide a very desirable of all-electric dwellings. By the end of 1968 of Northwestern Ohio continues to be basic to load for your Company.
there were more than 2.600 all-electric resi-our marketing philosophy. Through this indus-By the end of 1968 the new machining plant dential customers on our system. We estimate trial growth, coupled with aggressive promo-of Chrysler Corporation was employing ap-that in the coming year we will increase the tional programs, sales to all classifications of proximately 2,000 workers. Late in the year number of our all-electric residential cus-our customers are stimulated. Our marketing Chrysler announced plans to double the size tomers by about 50 per cent.
programs are concentrated on these energy of the plant by adding 800,000 square feet of The small price differential in favor of gas applications which are both advantageous to production space. Chrysler officials predict versus electric heat is being narrowed con-6
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tinuously. Among the factors favoring elec-l tricity are lower installation and maintenance
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costs, cleanliness, comfort, more flexible tem-l b
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perature control, and silent operation.
Promotion of central, whole-house air con-i l l l,l ' ' ' ' " ! -
ditioning was very successful during 1968. A I
MN $5[M,b major factor was a new financing plan, which ff EM U IT ].
we offer to customers through dealers, for l
Purchase and installation of central air con-3 h-U*'l' ditioning equipment. In addition, there wero l
hundteds of room air condibomng un_ts in-r-~
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stalled which will be producing additional
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revenue in future summers in our area, elec-p,.
tric air conditioning costs the customer less to j;... ~: e install and operate, as well as offering the b
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t other inherent advantages, when compared with gas air conditioning.
The need for year-around climate control i
for greater office efficiency and higher retail 10 Year Growth in Electrical Energy Sales (In Millions of Kilowatt Hours) sales in commercial operations is now well established. Our promotional emphasis is now concentrated on strengthening buyer prefer-2sm Industrial 5N Commercial 12m - dj Residential ence for electric systems over those using other fuels. In 1968 we achieved a gain of 2cm n4 4m 94 %
1mo bout 10 per cent in the commercial air con-73 %
ditioning load on our system. This load is very 4
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advantageous to your Company because of the many hours of use throughout a large part of the year. It is estimated that the 1968 m-1958 1968-1958 1968 1958-1968 crease in commercial air conditioning alone j
.a will add about $300,000 to revenues each year.
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1 The rundamentals or electric million square feet of floor space. Two other shopping centers of this type have been an-were re ent d to p es ntatives or area companies in an nounced, each with more than one million i
extensive course conducted by our square teet of space. There are several other i
j industria/ sales engineers smaller centers under construction, or planned, at locations throughout Northwest-ern Ohio.
Agriculture and such related businesses as l
g food processing provide a growing source of revenue f r y ur Company, and we devote a We also continued our success in the field gre t deal of sales effort to this segment of of commercial cooking with a gain in 1968 of the economy. For example, a recent indepen-about 10 per cent in the load of this type con-dent study sponsored by your Company mdi-l M O' nected to our system. This gain is expected to caks bat regional madet conMons faw g
yield about $60,000 a year in revenues. Your p
- 98
_"I acquaint area chefs with the advantages of substantial expansion of electrically auto-eS I
Company again sponsored a six-day profes-mated swine raising in Northwestern Ohio.
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-d sional cooking seminar designed to directly Now we are presenting these facts to agri-business groups throughout our area. A electric cooking equipment. This program, A~ : u r -
4 similar study of egg production made m 1966
-me which uses a nationally-recognized cooking has proved to be a most successful sales tool.
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instructor, is now being emulated by utilities in This marketing approach is unique in the elec-other parts of the country.
c uWy in@ shy and has earned nationaf The growth in numbers and sizes of shop-recognWon im your Company. Such highly-i EY ping centers contributed significantly to the utomated farm installations are equivalent
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increase in commercial revenues in 1968, and indications are that this growth will continue.
o smaH factmbs in be amount of pcMc
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energy which they use, and add d.iversity and
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tally enclosed controlled-environment shop-
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ping centers with a total of more than 1.5 Municipal Electric System Purchased 5E k
f The Village of Waterville, one of the fast-
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~,"1 August. Our public information campaign led t
-m to a vote favoring the sale of the municipal l
arIe ing ech i electrical system, which serves about 900 e ne t nat
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Awards for specific programs were thereby providing better service, we expect recognition for your Company in 1968.
Customers. By modernizing the system, and 1
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d, ko ppliance$ fan I c urers and to increase the per-customer usage substan-e M.
the Farm Electrification council.
tially.
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i Growth of racihties andincreases in cargo handledis the contsnuing story of the Port of Toledo. Large dual-purpose cartsers stearned into the port at an unprecedented late on 1968. Many of them unloaded cargoes trom overseas and then moved to nearby i
grain handling facilities to load for the return trip in what shippers call the
" perfect turnaround." Grain movements t
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This 213,000-kilowatt unit, the largest on mon stock af ter meeting all of its costs, will provide for the economical exchange of l
the Toledo Edison system, was put into ser-including (in lieu of depreciation) amortiza-power for increased reliability.
I vice in June, on schedule. This unit, and other tion of debt capital. At December 31, 1968, I
powcr source additions, increased your Com-debt capital of approximately $201.5 million Federal Power Commission pany's net capabihty during the year by over remained to be amortized by OVEC over the Regulation Anticipated one-fourth to more than 1.2 million kilowatts.
period ending in 1981.
Our Company will become subject to Federal This major addition of highly-elficient gener-Power Commission regulation when we are ating equipment to our system was made at interconnection Project Nears Completion interconnected with the Michigan utility sys-a total cost of $33 million. It was completed Construction began early in the year on To-tems in 1969. This regulation applies gener-i af ter a construction period of about 28 months ledo Edison's 24-mile portion of a 268-mile ally to accounting, interstate transmission of I
despite a shortage of some types of skilled regional transmission interconnection project power, sales at wholesale for resale, and cer-l construction tradesmen. Your management which will link power systems in Ohio, Indiana tain other matters. Our 1968 sales at whole-anticipated this problem and pushed earlier and Illinois with those of Michigan. When sale, aside from sales to other efectric utility phases of the construction ahead to avoid the completed in mid-1969, this 345,000-volt line companies, represented about three per cent I
competition for these workmen as the project neared completion, sections of the turbine were put in place as construction neared compterion on the 213.ooo. Aitowatt addi-l tion to Bay Shore Station. Despite its size, the turbone is as precise and finely balanced as a line watch.
Power Purchase Right Exercised j
Your Company owns four percent of the com-4 a
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ration (OVEC) which was formed in 1952 by
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built two steam generating stations with a
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combined capacity of 2.2 million kilowatts, to S,"
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ergy Commission for operation of its Ports-Op m M
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provide the power needed by the Atomic En-i o
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In December,1968, your Company elected
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-.m.,w-of our total electric revenue. Our rates relat-ing to retail sales, which cover the bulk of our OOiiO O revenue. wiii continue to be subject to reou-
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Your Company has a power-pooling under-x'.
- *' pt' g standing with The Cleveland Electric illum-i mating Company, Duquesne Light Company, l
!o BayThore Ohio Edison Company and Pennsylvania h
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ion the climax came when the unit was put in service for the Power Compay. These utilities serve much of first time in June. Hundreds of instruments help the op-Northern Ohio and Western Pennsylvania. The 1
erators to know continuously what is happening during g
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the complex operation of thu_s generating unit.
625,000-kilowatt and two 800,000-kilowatt-This unit combining a boom-auger and a hydraulic aerial Class generating units as well as high-Voltage personnetliftis capable of assisting in most any distribu-transmission interconneClion f3Cilities. By
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sharing the power output of these large units, l
each company will realize substantial " econ-Acme Power Station is a familiar landmark in the near omy of scafe" benefits to help offset con-downtown Toledo area. This plant will undergo a mod-tinually rising costs. On a predetermined ernization program beginning in 1969 to increase its effi-ciency and to aid in the local air purity program.
SCheduIO, oUT forecast requirements for ad-m,,
ditional generating capacity will be met as
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these units are completed. As a part of this understanding, we are committed to buy a portion of the generation of the first three units, starting in 1971 when the first of the i
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generating units is scheduled for completion and continuing until 1974. The fourth unit is scheduled to be completed in 1974 and will be jointly owned by Tcledo Edison and Cleve-l i 9.
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g land Electric illuminating. It will be named the A_
Davis-Besse Nuclear Power Station. A por-
!'I i Ei-tion of our share of the generating capacity of this unit will be sold in diminishing amounts to the other participants until we can fully Ei
_ _ stM utilize our share.
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i Nuclear Unit Plans Develop established by the State of Ohio. Other studies l
Approximately $1.4 million will be spent in underway cover the fields of meteorology, i
1969 on the acquisition and development of seismology, hydrology and geology.
l the site, and work in preparation for the con-The long lead-time needed for production j
struction of the Davis-Besse plant. This plant, of some major components of the unit re-with an initial net capability of 872,000 kilo-quired us to mvite bids in the latter part of watts, will be the first large-scale nuclear unit 1968. The General Electric Company was the in Ohio. The site is approximately 25 miles successful bidder for the turbine-generator east of Toledo on the shores of Lake Erie. The and Babcock and Wilcox Company has been facility now is estimated to cost $207 million, selected to manufacture the nuclear reactor including initial nuclear fuel requirements of nd steam supply system, and to provide the I
approximately $25 million. Our 52.5 per cent
[: j mitial fuel. Letters of intent covering these ownership will require a total investment on three major components total about $78 our part of about $109 million. An agreement l
with Cleveland Electric illuminating has been
.C Concurrent with preparations for the con-executed covering construction of this jointly-struction of the plant is the training of per-owned plant, which will be built and operated sonnel for its operation. Some of our technical i
by Toledo Edison.
and professional people who are now parti-i Efforts are now being concentrated on the cipating in special nuclear training courses preparation of the application for a construc-are building on the knowledge gained through i
tion permit which must be issued by the y ur Company's many years of participation l
United States Atomic Energy Commission in the design and construction of a develop-l before construction can be started. This ap, mental nuclear power project, the Enrico plication is scheduled to be submitted to the Fermi Atomic Power Plant in Michigan, 26
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AEC in the late summer of 1969, and is ex.
miles north of Toledo.
1 pected to require about a year for consid-Construction To Total $20 Million in 1969 cration and approval.
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Studies are being conducted which are Construction plans for 1969 call for the ex-designed to help the company maintain or penditure of about $20 million, including $1.4 improve the total natural environment of the million for the Davis-Besse plant. The major area during construction and operation of the portion will be spent on the general expansion i
nuclear plant. One of these studies being con-and improvement of lines and other el'ctrical ducted by the University of Michigan involves transmission and distribution facilities. Among l
investigation and analysis of water conditions the larger projects included in the 1969 plans and fish and plant life in that portion of Lake Erie adjacent to the plant site so that ar./
A tower at the site of the Davis-Besse Nuclear Power Sta-serious adverse oflects on this aquatic lile may tion supports devices for gathering meteorological data.
be avoided. Among its other purposes is to This is a part of a series of air, water and rond studies de-guide us.m meeting water quality standards signed to help Toledo Edison maintain or improve the totar naturar environment of the area.
13
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PATTERNS OF GROWTH:
is the beginning of construction of a new j
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encompass the operations of the personnel general headquarters building in downtown l!
E and the claims and real estate areas, as well Toledo. Another involves the addition of elec-f as the electrical and power groups, and the i
trostatic precipitators to three of the boilers Company's three outlying districts. Mr. Flabio at Acme Station, near downtown Toledo, and Executive Responsibilities has held numerous engineering and operal-l the replacement of four old coal stoker units ing posts, and was named a vice president in Real,gned 1962. He was elected executive vice presi-i with new oil-fired boilers. These modifications to this older power plant will improve sub-dent and a director of the Company in 1965.
stantially the control of air purity. These l
l l
John P. Williamson was elected senior vice l
changes also will make it possible to put the g
l president with responsibility for the market-new Acme boilers into service faster during ing, public relations and administrative ser-i periods of peak load, vices groups, as well as the financial and the A realignment of top executive responsibili-accounting groups of the Company. Mr. Wil-Growth nequires Some Outside Financing ties followed the July retirement of Senior liamson, a certified public accountant, held Financing of construction in 1968 was accom.
Vice President and General Manager Alois several key positions within the financial, plished through funds remaining from a $35 Hoefle.
accounting and administrative systems areas million issue of 6% per cent bonds in late Mr. Hoefle's retirement concluded a 45-before being named vice president, finance, 19G7, funds provided from internal sources, year career in the electric utility industry. He in 1965. He has been a director of the Com-and from $5.5 million of short-term borrow-had held numerous engineering and execu-pany since 1962.
ings. These short-term borrowings included live positions with Toledo Edison and pre-Donald G. Nicholson, secretary and trea-the issuance of unsecured notes ("commer-viously-associated companies before bein9 surer, was given additional responsibilities l
cial paper") sold nationally through an invest.
named senior vice president and general and became chief financial officer of the ment banking firm. They were given the top manager in 1965. In the latter position he Company. T. A. Kostanski, controller, was as-
" prime rating" by a national credit rating was responsible for the administrative direc-signed additional duties and was designated agency. This is the first time that we have tion of most of the company activities. He had the chief accounting officer.
used this source of funds, which has only been a director of the Company since 1961.
The 16 members of our top executive group been available to utilities in very recent years.
The responsibilities of Charles E. Flahie,
-made up of officers, executive staff mem-Through their use we were able to achieve a executive vice president, were enlarged to bers and district managers-average 52 years lower interest cost than available from other of age. Their ages range from 42 to 62.
types of borrowing.
~~~'
r Construction plans in the next five years New Directors Elected i
call for the expenditr e of about $188 million.
Willard I Webb, til, president of The Ohio About 40 per cent of the money required in s
Citizens Trust Company in Toledo, was elected this five-year program will come frorn internal i
to the Board of Directors in May to succeed sources. Of the $188 million, approximately the late James V. Davidson. Mr. Webb is active
$20 million will be spent in 1969, when ap-in northwestern Ohio business, civic and proximately $6 million in additional short-term charitable activities, and has served since borrowing will be required. We do not antici-1963 on the Banking Board of the State of pate requiring long-term financing before Ohio. Mr. Davidson, who served on the Edi-1971.
Charles E. Flahie John P. Williamson son board for more than 17. years, was chair-14
l f
man of the board of the First Federal Savings of study for advancement. Under this educa-The Ohio Electric Utility institute has given and Loan Association of Toledo.
tional assistance plan, the Company bears a your Company the award for having the best
(
l Glenn J. Sampson, vice president, power, major portion of the cost of work-related aca-safety record in 1968 of the seven Ohio elec-j j
was elected to the Board of Directors effec-demic courses. Many employees are enrolled tric utilities competing for the award. Your j
tive July 1, to fill the vacancy created by Mr.
in undergraduate courses and a number of our Company also achieved the best motor vo-Hoelle's retirement. Mr. Sampson held several professional people have earncd advanced hicle operation safety record in the group.
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engineering and supervisory posts, including academic degrees under this program.
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that of superintendent of power production, Good Corporate Citizenship Maintained before being named a vice president in 1964.
All-Time Safety Record Set The good public relations wo enjoy through-r Safety is an important part of every job at out our service area has not come about by Labor Agreements Negotiated Toledo Edison and is actively promoted by accident. We work hard at developing and Separate labor agreements were signed dur-your management. It was a source of great maintaining these relations. Being a good l
ing 1968 with the unions representing Toledo pride when an all-time company record of corporate citizen is one of our basic policies.
Edison operating and office employees. In-1,845,206 manhours worked, equal to nearly We encourage our employees to participate i
creases negotiated in wages and employee seven months, without a lost-time accident in civic, charitable, educational and cultural I
benefits averaged 6.8 per cent.
was established during the past year.
community activities.
j Recruiting and Training Emphasized I
As our business grows and becomes more 0
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younger men for added responsibilities in management. Selected employees are en-rolled in specialized management develop-l ment courses. Educational assistance Irom An open house, loHowing cornpletion About 90 school teachers were given a tour and of the new expansion of Bay Shore Station.
held discusssons on your cornpany and the warAings the Company is available to every employee gave e,nproyee, an oppo,qun,,y og gn,1,ee.,nge,p,;,,,ysgem on,n, occasion o, who wkshes to enroll in an authorized course ro tour the racility.
the annuat Business-Industry-L ducation day.
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BOARD OF DIRECTORS EXECUTIVE OFFICES 420 Madison Avenue JOHN D. BIGGERS,* Retired, Honorary Director and lormerly yogego,ongo43so, Chairman and President, Libbey-Owens-Ford Company Phone (419)242 5731 SAMUEL G. CARSON, President, The Toledo Trust Company JOHN K. DAVIS,* President STOCK TRANSFER AGENTS CHARLES E. FLAHIE,* Executive Vice President THE TOLEDO TRUST COMPANY FRED E. FULLER Senior Partner, Fuller, Seney, Henry & Hodge Toledo Ohio 43603 VIRGIL A. GLADIEUX,* President, Ogden Foods, Inc.
MORGAN GUARANTY TRUST COMPANY WILLIAM M. HANKINS,JR.,* President, The Kiemle-HanAins Company OF NEW YORK, New York, N.Y. 70015 J. PRESTON LEVIS. Chairman of the Executive Committee, Owens. Illinois,lt'c.
STOCK REGISTRARS JULES D. LIPPMANN, Consultant to Chemical-Plastics Division, THE OHIO CITIZENS TRUST COMPANY The General Tire and Rubber Company Toledo, Ohio 43603 W, ROYSE MORAN, Vice President, Administrative Services MANUFACTURERS HANOVER TRUST HENRY A. PAGE, JR., President, The Page Dairy Company COMPANY, New York, N.Y.10022 WILLIAM R. POOLE, Vice President, Marketing DIVIDEND DISBURSING AGENT GLENN J. SAMPSON, Vice President, Power THE TOLEDO TRUST COMPANY WILL ARD 1. WEBB, Ill, President, The Ohio Citizens Trust Compar'y JOHN P. WILLIAMSON, Senior Vice President
" Members of Executive Committee MORTGAGE TRUSTEE plM E=
E"l A
AI THE CHASE mat 4fATTAN BANK (NA) sa M vu New Y rk, r0075 OFFICERS AND EXECUTIVE STAFF AND JOHN K. DAVIS, President AUDITORS ARTHUR ANDERSEN & CO.
CHARLES E. FLAHIE, Executive Vice President Cimland, Ohio 44H4 STATISTICAL JOHN P. WILLIAMSON, Senior Vice Pres / dent JOHN H. BARKER, Vice President Public Relations GENERAL COUNSEL FRANK W. KEITH, Vice President, Personnel FULLER, SENEY, HENRY & HODGE SECTION THADDEUS A. KOSTANSKI, ControIIer Toledo, inio 43604 THOMAS J. KOZAK, Vice President, Electrical STOCK LISTING Pages 18 through 23 W. ROYSE MORAN. Vice President, Administrative Services COMON DONALD G. NICHOLSON, Secretary and Treasurer WILLIAM R. POOLE, Vice President, Marketing EW YORK STOCK EXCHANGE GLENN J. SAMPSON, Vice President, Power MIDWEST STOCK EXCHANGE H. KENNY BURCH, Manager, Eastern District AMSTERDAM STOCK EXCHANGE JOHN B. CLOER, Manager Southern District Unlisted Trading Privileges BOSTON STOCK EXCHANGE HOWARD B. FOX, Assistant to the President CINCINNATI STOCK EXCHANGE JAMES S. GRANT, Manager, Western District WILLIAM H. SCHWALBERT, Assistant to the President PREFERRED-4% %
CLAUDE L. LEWIS, Assistant Secretary and Assistant Treasurer Unlisted Trading Privileges DONALD H.SAUNDERS, Assistant Controller AMERICAN STOCK EXCHANGE 17
$NLANCE SHEET' December 31,1968 and 1967
' ASSETS LIABILITIES 1968 1967 1968 1967
=
Utility Plant Thousands of Dottars Capitalization (detail on page 20)
Thousands or ootrars In service, at cost (Note 1) 318 239 269 882 Common stock equity 81 965 77 626 Less accumulated provision for depreciation 81 203 73 443 Cumulativo preterred stock 31 000 31 000 237 036 196 439 First mortgage bonds 121 089 121 552 Construction work in progress 1_ 1 524 31 344 2A* ***
22Il83 Current Liabilities Current Assets Short-term notes-banks 4 000 Short-term notes-commercial paper 1 500 Cash 3 089 4 237 Accounts payable 4 781 4 689 Temporary cash investments 10 702 Accrued taxes 13 051 12 910 Accounts receivable 9 135 7 657 Other current liabilities 5 387 5 023
(
Fuel for use in power plants 2 649 2 322 28 719 22 622 Materials, supplies and other current assets 7 538 7106 22 A
32 02A Accumulated Provisions U'
'*' "** * ' " ' ~
-Investments and Other, etcost c
accelerated amortization 5731 6 053 Ohio Valley Electric Corporation (Note 2) 718 718 Federal investment tax credits (Note 3) 3 294 1 900.
Area development and other 790 914 Other 681 686 1 508 1 632 9_706 8 639 U2[7}
261 439 Total Liabilities 272 479 261 439 Total Assets g
e 7 m.
' NOTES TO FINANCIAL STATEMENTS, December 31,1968 or timingJ of a restatement of att electric vestment tax credits based on the service properties en an "originni cost" basis. The
.!ives of the property involved.
J FPC also may require that the $3,945.000
,1 hh h CMM menti ned in Note 6 be restored from Earn-4 Retirement income Plan I;
hrisdicuon a requirement that the Company a electric.
Ings ne:nvested to a reserve account.
The Company has a retirement income plan.
2 Ohio Valley Electric Corporation which covers aI o
groupa e plan I
Upon completion of the Michigan intercon -
efined b te PC s the co f ro j
,,p nection in 1969 referred to on Page 11, the to the person first devoting it to public ser-The Company, beginning in December,1968
$980.000 for 1968. The Company's policy is Company will becorne sub}ect to regulation -
vice). The plant accounts are now stated at exercised 6ts right to receive, and assumed to fund annual costs as accrued each year,.
- under the Federal Power Act by the Federal cost. but not necessarity at " original cost" an obligation to take and pay for a 4% pro.
Including amortization of unfunded liabliities
. Power Commission (FPC) as to accounting, in some insteces. In prior years more than interstate transmission of power, sales at 514 million was eliminated from plant ac-por'ionate share of available Ohio Valley.
over a 20-year period. The net unfunded,
wholessie for resale, and certain other mat-counts with the approval of the PuCO. Ohio Electric Corporation power not required for actuarlaf tiability under the plan aggregated a
. ters. The Company will continue to be sub-rate regulation is based upon the "reproduc-suopfying the needs of an Atomic EnerUY
$5.750,000 as of December 31,1968.
!a
- ject to regulation by The Public Utifities tion cost" of property. The PUCO does not "p,
y
,, he dh -
5 Depreciation Commission of Ohio (PUCo) and local require a determination of " original cost"
, authorities, including regulation of retall and no complete " original cost study has 3 ; Investment Tau Crecets Depreciation rates used in determining book '
rates, which cover tt'e built of the Com-been made by the Company. No prediction Nepreciation provisions are based upon age-18 pany a sa'es. rederat reguistiert wist snetude can be made at this time as to the etteet, The Company is amortizing each year s rw site studies and averaged s.4% for toss and.
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l RESULTS OF OPERATIONS for the years ended December 31,1968 and 1967 A.y n
g 1968 1967
. Increase
.9 l
Operating Revenues Thousands of D"Ilars (Decrease)
" q l
l Electric 78 083 68 389 14
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Gas 1 201 1 136 6-
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L Steam heating 806 767 5-Total operating revenues 80 090 70 292 14 "j
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=
Operating Expenses Fuel used in power plants 12 693 9 923 28 f
Purchased power 4 395 4 189 5
I
- Other operation expenses (Note 4) 13 987 12 505 12 l
i Maintenance 4 356 4 213 3
(
i Depreciation provisions (Note 5) 9 614 8 614 12 Taxes (Notes 3 and 6; Detall on Page 21) 18 001 15 375 17 Total operating expenses 63 046 54 819 15-Operating income 17 044 15 473 to
'?
Interest and Other
?%- R
' i, Interest on long-term debt 4 957 3 617 37 4..
- [ggg ;g p,7
.I interest on short-term notes 125 131 (5)
"ay 7,q g 0m interest during construction
( 1 081)
( 818) 32 S4, investment income and other-net
( 421)
( 578)
(27)
'V ?%i iC l
Totalinterest and other 3 580 2 352 52
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Net /ncome 13 464 13 121 3
I Preferred stock dividends 1 333 1 333 Earnings On Common Stock 12 131 11 788 3
'^*^"*"*"**"d'"s**'*""n9aP-plications with the director of electronic data processing i
Earnings Por Common Share
$ 2.35
$ 2.28 3
to assu'e the most accurate and timery information pos-sible to aid management in making their decisions.
I I
1967. The book depreciation rate was re.
to en order of The Public Utilities Commis-joint participation in additional power gen.
panies are undertaking to woik out a plan duced January 1,1969 to 3.2% based upon sion of Ohio, the Company stopped provid-eration and transmission facliities. Plans in-to establish a holding company system. See recent studies by independent consulting en.
Ing for such deferred taxes in 1962 (i.e.,
clude construction of the Davis-Besse.
Page 5 for further detalt.
gineers. This depreciation reduction pres.
adopted flow-through accounting) and, in Nuclear Power Station, scheduled for com-ently is equivalent to an expense decrease of eHect, made the change retroactive by trans-plation in 1974. The Company is building 9 References To Report about 12 cents per commort share on an ferring to Earnings Reinvested the $3.945,000 the 872,000-kilowatt plant and it will be annualized basis. Rates used in computing of reserve for these deferred taxes accumu-jointly owned with The Cleveland Electric -
Reference is also made to the following sub-j depreciation for federat income tax purposes lated from 1954 through 1961. The use of Illuminating Company. The facility now is lects in the report: construction program are based upon standard tax "Guldeline flow-through accounting lessened the pro-estimated to cost about $207 miHion, includ-($188 million in 1969-1973), Page 14, and i
j Lives and averaged 3.5% for 1968 and vision for Federalincome taxes by $1,382,000 ing about $25 mittion for the imtial nuclear financing plan, Page 14.
1967, before adjustment for double declining in 1968 and $928.000 in 1967. The accumu-fuel requirements. The Company's $2.5%
I balance depreciation.
fated amount cf such reductions from Janu-ownership will require a total investrnent on i
ary 1,1962 through December 31,1968 totals its part of about $109 milhon. See Page 12 6 Federallncort:e Taxes
$7,089.000.
for further detail.
Based upon Ohio court and commission de-l cisions, the Company is of the opinion that Powu PooEng 8 Proposed Holding Company The additior.as information tazes deferred resulting from the use of ac-The Company has reached an understand-JPresented on pages 20 and 21 celerated depreciation will be recoverable ing with four other utilities (CAPCO Group)
The Company and seven other Ohio, Penn.
la en integraf part of the statements out of future revenues. Accordingly, pursuant involving substantial future commitments for sylvania, and Kentucky' electric utility com.
on pages 78 and 19.
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E y SOURCE AND APPt.lC4 TION OF FUNDS ' '
CAP!TALIZATIEN
$,i for the years ended December 31s 1968 and 1967 :
December 31,1968 and 1967 a " b, 1968 1967 1968 1967 Thousands of Dollars Thousands of Dollars
(
- Source of Funds Cominon Stock Equity Common stock, $5 par, authorized 7,500,000 Earnings on common stock '
12 131 11 788 F. -
shares, outstanding 5,16'J,125 shares 25 801 25 801 inccme charges not requiring ct;rrent funds:
v Premium on capital stock 10,076 10 076 j;
Depreciation provisions Earnings reinvested (Notes 1,6 and a) 46 088 41 749 9 614 8 614
(.
Investment tax credits (net) 81 965 35*/.
77 626 34 %
1394 279 p
. Principal amount of first mortgage bonds 35 000
{ _^
. - Sale of temporary investmetds'
' 10 702 Cumulative Preferred Stock, $100 par, Short-term borrowings 5500 authorized 500.000 shares j[~
Other changes 121 (566)
Redempt/on price Series outstanding (per share) 39 462 Sy15 4% %,160,000 shares $104.62%
16 000 16 000 r.
4.56%, 50,000 shares 101.00 5 000 5 000 AppIlcation of Funds t
4.25%,100,000 shares 102.75 (Note b) 10 000 10 000 j.j Additions to utility plant 30 885 36 505 31 000 13 %
31 000 13 %
y:'
Dividends on common stock 7 792 7 205
-~
[D Purchase of temporary investments,
10 702 F/rst Mortgage Bonds, excluding bonds acquired Acquisition of mortgage bonds for sinking and held for sinking fund purposes (Noto c) p fund purpos,es 463 381 Series outstanding 7
Payment of Federalincome taxes deferred 2% %, due 1977 ~
28 103 28 416
+
. in prior years 322 322 s
3% %, due 1978 4 336 4 436 b
39 462. 55 115 f-
- ' ~ ' ~ ~
~~
3%,
due 1979 2 150 2 200 i
2% %, due 1980 7 500 7 500 3% %, due 1984 14 000 14 000 4.
3% %, due 1986 15 000 15 000 P' 7
~
4%,
due 1988 15 000 15 000 6% %, due 1997
_ 5 000 35 000 3
EARN!NGS REINVESTED.
12' 089 52 % ' '21 552 53 %
l
. for the years ended December 3 to 1968 and 1967 i
Total Capitalization ii34 054 100 % 230 178 100 %
1968 1967
' Thousands of Dottars.
[
BALANCE, Beginning of year 41 749 37166 (a) Under provisions of the articles of incorporation, $14,820,000 is not
(
Earnings on common stock 12 131 11 788 '
available for cash dividends on common stock.
53 880 48 954 (b) Redemption price $102.00 per share after December 1,1969.-
F.
' Common stock dividends declared, $1.51 per.
(c) Current annual interest requirement on bonds is $4,946,000.
share in 1968 and $1.42 in 1967, net
,h
- of unclaimed prior dividends '
7_792 7 205
(
. : BALANCE, End of year (Notes 1,6 and a) 46 088 41749 ~
L
^L The notes on pages 18 and 19 are an Integralpart of these statements.
=
t 20
(
TAXES AUDITORS' REPORT for the years ended December 31,1968 e nd 1967 1968 1967 increase Ihousands of Dollars (Decrease)
To the Share Owners and Board of Directors:
FederalIncome Taxes (Notes 3 and 6)
We have examined the balance sheet and statement of capitahza-Payable direct-income tax 8 388 8 978 tion of The Toledo Edison Company (an Ohio corporation) as of
-tax surcharge 1 238 December 31,1968, and the related statements of results of opera-Payabic by application of investment tax credit 1 465 352 tions. taxes, earnings reinvested, and source and application of Total Federal income taxes payable 11 091 9 330 funds for the year then ended. Our examination was made in accord-Amortization of prior years-ance with generally accepted auditing standards, and accordingly accumulated provisions:
included such tests of the accounting records and such other audit-Investment tax credits
(
71)
(
73) ing procedures as we considered necessary in the circumstances Deferred taxes-accelerated amortization
( 322)
( 322)
We have previously examined and reported on the financial state-ments for the preceding year.
Total Federal income taxes 10 698 8 935 20 In our opinion, the accompanying financial statements referred to above present fairly the financial position of The Toledo Edison General Taxes Company as of December 31,1968, and the results of its operations Local property 5196 4 512 15 and the source and application of funds for the year then ended, State excise 2 059 1 886 9
in conformity with generally accepted accounting principles ap-Other 48 42 14 plied on a basis consistent with that of the preceding year.
Total general taxes 7 303 6 440 13 TOTAL TAXES 18 001 15 375 17 Cleveland, Ohio, February 5,1969 WA
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industrial, KWH Per Per
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Resi-Com,
Other Total Resi.
Com-
- Utshties, Total Per KWH Customer f.
Year dential merciel ' %
Industrial Utihties Other Electric dential merclaf
& Other Electric Customer (Cents)
(Octlers) e, bi 1968 25 588 33 12 705 16 28 482 36 3 089 4
8 219 11 78 083 195 737 19 570 4 191 219 498 5 596 2.36 132.23 c.;:k.-
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.,25 504'.
(k - 1966 22 751 -
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11 565 : '17:
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- 1965 21 339
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. 10 3321.i7 21 920 37 6 130 10 59 721 186498 18 711 3 922 209 131 4 689 2.47 115.94 1
..1964 20 469 '
.36 10 354
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' 20 516 36 t
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5770 to 57 109 181 968 18 349.
3 874 204 191 4 4112 2.53 113.30 i
1963 19 536 36
. 9 725 18' 19 378 36 5 421 10 54 060 179 422 18 073.
3 846 201 341 4 298 2.55 109.71 s
~
18 827; 36, 9 338
{
ji8L 18 419 36
'1962 5188 10 51 772 177 100 17 752 3 822 198 674 4 201 2.54 106.82
[-
[i961 17 352 36 i 8 796N18
,'41960 16 318 35-
.8 289.
18-
' 17 599 36 4 819
'10 48 566 175 826 17 701 3 735 197 262 4 107 2.42 99.19 18 078 l 38 4 454 9
47 139 174 383 17 837 3 580 195 800 3 984 2.36 94.14 7
p L1959 15 819 < ' 35 '
8 Gio ' -18
- 17 423 38 4 045 9
45 297
'172 347 17 633 3 561 193 541 3 899 2.37 92.53 1-p
- 1958 14 941 36 7 380 ; 118.
'15 576 37 3 689 9
41586 169 699 17 614 3 514 190 827 3 698 2.40 88.61
{, y e 7
, -, _., my,,
h SALES-MKWH(thousandsof Allowatthours)
SOURCE OF ELECTRICAL LOAD-MEGAWATTS PRODUCTION f
~
ENERGY-MKWH py'.
Purchased '
Net System Fuet Cost Per
- f. '
?
. Other Generated changed bakty Peak Peak Factor KWH BTU per and Inter-Capa-Total Load Million BTU f
Resi.
Com-Utahties Other Total (Net)
(Net)
Total (Yr. End)
Load Load
(%)
(Mills)
(Cents)
KWH*
Year dential mercial
~ Industrial iq
{ ],
~
- 992 869 477 349
[2 28602f "5563 416 656
4 158 464 3 598 427 860 678 4 459 105 "940 784' 763 67 2.7~
'27.5 9 899 1968 1 082 854 529 902 2 572 351 318 503 456 946 4 960 556 4 386 487 895 222 5 281 709 1 256 1 060 860 66 2.9 28.6 10 094 I"' C 1967 E~
1966 937 093 447 422
'2 124 927-
'1636 380 316 3 891 394 3 998 833 215 485 4 214 318 925 779 716 67 2.8 27.9 9 932-l 1965 862 946 408 682 1 877 284 334 718 3 483 630 3 733 426 33 665 3 767 091 797 653 653 66 2.7 27.4 9835 a
f}
1964' 809 647-379 090 i 749 965
'301 152.
3 239 854 3 440 164
'42 859 3 483 023 780 593 593 67 2.6 27.1 9 704
~
[' e ' '1963 765 261 353 742 i 638 012
'290 056 3 047 071 3 248 477 45 245
-3 293 722 780 568 568 66 2.7 26.8 9 910
- 1962 740 322 338 475
.1 520 055 276 215 2 875 067 3 056 592 50 487 3 107 079 644 522-522 68 2.8 27.3 10 299 i
s-
- 1961.
'718 460 325 473
^ 1393 045 254 422
'2 691 397 2 869 731
' 48 711 2 918 442 652
- 505 505 66 2.9.
28.7 10 232
[
y,
~
1960 690 896 313 784 i 436 818
.236 877 2 678 175 2 841 431 59 052 2 900 483 652 501 ~
501 66 3.1 '
29.3' to 455 7
5:
.1959 666 517 301 293 1 370 650 229 743 2 568 203 2 705 009 69 368 2 774 377
'652 -
~482 482 66 3.1 29.8 10 542 I
k 1958 623 619 272 371 Ii 153 056 -
202 651' 2 251 697 2 404 149 59 205 2 463 354 517 449 449 62 3.4 30.5 11 124 b3 i..a f; 9.n y
.y.,, e-s c y
V
' 22 '
- 1968 retlects more use of older,less efficient generating units for cost-plus power sales to nelghboring utilities.
s FINANCIAL........ a statiStiCairoview* inthousandsordottars UTILITY PLANT CAPITALIZATION AND RATIOS COMMON STOCK (5,160,125 Shates-All Years) s DOLLARS PER SHARE i
Accumuleted Depreciation Annual Common Cumulative Long Market Plant in Provision for As %
Construction Stock Preferred Term Price Range Book Dividenas Year Service Depreciation Of Plant Expenditures Equity Stock Debt Total Ear,'Ings High Low.
Value Declared i
1968 318 239 81 203 26 30 885 81 965 35 31 000 13 121 089 52 234 054 2.35 38 30 15.88 1.51 I
1967 269 882 73 443 27 36 505 77 626 34 31 000 13 121 552 53 230 178 2.28 42 29 15.04 1,42 1966 260 274 67375 26 15 177 73 043 38 31 000 16 86933 46 190 976 2.18 41 29 14.16 1.31 1965 249 382 61 889 25 13 586 68 572 37 31 000 18 87 222 47 186 794 1.96 41 32 13.29 1.16 j
1964 242 584 56 880 23 6 655 64 468 35 31 000 17 87 599 48 183 067 1.78 35 29 12.49 1.03 1983 239 914 51 986 22 11 192 60 609 34 31 000 17 88 121 49 179 730 1.62
'31 26 11.75
.94 1962 215 061 48 343 22 21 104 57 090 32 31 000 18 88 594 50 176 684 1.56 27 20 11.06
.83 1961 210 709 43 818 21 8 925 56 308 32 31 000 18 88 689 50 175 997 1.34 28 19 10 91
.725 1960 206 113 38 731 19 6 051 53 430 31 31 000 18 89 420 51 173 850 1.28-20 15 10.35
.70 1959 200 992 34 244 17 7 020 50 750 30 31 000 18 89 681 52 171 431 1.25 17 15 9.84
.70 1958 174 523 30 165 17 17 282 48 280 29 31 000 18 90 210 53 169 490 1.22 16 12 9.36
.70 TOTAL EXPENSES. and Operating Ratlos to Revenues INCOME REVENUES
- Electric, Debt Construc-Earnings Gas and Pur-Federal Total Oper-Interest tion On Steam chased Opera-Mainte-Depre-General Income Operating sting
& Other Interest Net Common Year Heating fuel Power %
tion nance %
clation %
7 axes %
Taxes %
Expenses %
lncome (Net)
(Credat)
Income Stock 1968 80 090 12693 16 4 395 6 13 987 18 4 356 5 9 614 12 7 303 9 to 698 13 63 046 19 170 44 4 661 1 081 13464 12 131 1967 70 292 9 923 14 4 189 6 12 505 18 4 213 6 8 614 12 6 440 9 8 935 13 54 819 78 15 473 3 170 818 13 121 11 788 1966 66 770 11 173 17 932 2 12 165 18 3 774 6 8 280 12 6 224 9 9 301 14 51 849 78 14 921 2 557 200 12 564 11 231 1965 61 546 10 175 17 178 0 11 584 19 3 745 6 8 065 13 5 671 9 8 308 14 47 726 78 13 820 2 460 62 11 422 10 089 1964 58 808 9 205 16 266 0 11 167 19 3 656 6 7 578 13 5 737 10 8 056 14 45 665 78 13 143 2 660 24 10 507 9 174 1963 55 736 8 847 16 273 1 10 764 19 3 082 6 7 137 13 5 564 10 7 976 13 43 643 78 12 093 2 830 440 9 703 8 370 1962 53 435 8 762 16 286 0 10 024 19 3 559 7 6 659 13 4 926 9 7 775 15 41 991 79 11 444 2 689 615 9 370 8 037 1961 50 160 8 681 17 284 1 0553 19 3 268 7 5 903 12 4 618 9 7 171 14 39 478 79 10 682 2 516 100 8 266 6 933 1960 48 661 8 914 18 329 1 9 333 19 3 284 7 5 340 11 4 503 9 6 383 13 38 086 78 10 575 2 677 42 7 940 6 607 1959 46 697 8 650 19 358 1 9 059 19 3 194 7 4 842 10 4 066 9 6 166 13 36 335 78 10 362 2 868 281 7 775 6 442 1958 42868 8 268 19 332 1 8 550 20 2 /14 6 4 272 10 3 806 9 5 425 13 33 367 78 9 501 2 850.
1 002 7 653 6 320
- Federalincome taxes deterred through use of accelerated depreciation are " flowed-through"into earnings (1958-61 restated).
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