ML19329E329

Annual Financial Rept 1970

ML19329E329
Person / Time
Site:	Palisades, Big Rock Point, Midland  File:Consumers Energy icon.png
Issue date:	12/31/1970
From:	CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.)
To:
References
NUDOCS 8006120637
Download: ML19329E329 (35)

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3 Consumers Power Company Annual Report 1970 212 WEST MICHIGAN AVENUE, JACKSON, MICHIGAN 49201 1

Highlights INCREASE OR (DECREASE) 1970 OVER 1969 1960 Growth sim.e 1960 E!ectric Revenue

$ 334.904.000

$ 26.904 C00

$ 179.568.000 Jd7@'d3 87*;

Gas Revenue

$ 273,874,000

$ 33.338.000

$ 100,769.000 172 %

Total Operating Revenue

$ 609,990,000

$ 60.215 000

$ 231.396 000 p#&!f,TsiP.4117%

'I Cost of Fuel Used in Electric Generation S 70,940.000

$ 11.849.000

$ 30.041.000 136 %

Cast of Natural Gas Sc!d 5 117,875.000

$ 10.937.000

$ 46.740 000 fl$f8#s@^3 152*;

Total Payroll including Construction 5 128,031.000

$ 19,281.000

$ 65.000.000 97 %

Taxes S 93.343.000

$ (3.187.000)

$ 51.140.000 I'$$$dN]83%

a Net income

$ 72.832,000 5,871.000

$ 38.251.000 90 %

Eanings per Share of Ccmmen Stock-Average (Adjusted:

2.95

.16 1.65.iff.GTj 79%

Cash Dividends Paid per Share on Common Stock (Adjusted) 2.00

.10 1.18 69 %

PMl58]97%

Kilowatt-hour Sa!es 18.806,677,000 327.314.000 9.553.502,000 Peak load-Kilowatts 3,448,000 71.000 1,876.000 84 %

Electric Generating Capacity-Kilcaatts 3.560.000 149.000 2.271.000 hM$3 57%

Gas Sales (1.000 Cubic feet) 310.344,000 28,582.000 118.296,000 162 %

Maximum 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> Natural Gas Send out (1.000 Cubic feet) 2.074.000 339.000 821 000 !.'Aff85 dim 3153%

Electric Customers 1,082,400 24,700 873.800 24 %

E]$.b109%

fik 58 %

Gas Customers 854,100 24,100 539.300 Common Stockholders 93,800 6,400 66,900 40 %

M Utiftty Plant-Cost

$2,343,351,000

$ 217.906.000

$1,123.245.000 1

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l Dear i

Fellow 1

Shareholders A. H. Aymond James H. Campbell i

l In reflecting on the year just past, record of $609,990,000, an acceleration in demand collided one is reminded of the opening increase of 11 percent over 1969 with a national shortage in j

words in Charles Dickens' A Tale when gross operating revenues available supplies of natural ga of Two Cities. He began his were $549,775,000.

The shortage affects all part narrative with: "It was the best Net income in 1970 was of the country, even those which of times, it was the worst of

$72,832,000, an increase of normally produce large quantities times..."

8.8 percent over 1969, when net of gas. The reason for the One might say much the income was $66,960,000.

shortage is not new. Rising costs

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same of 1970.

Expenditures for new plant and rapidly overtook wellhead prices Aided by rate increases for facilities totalled $241,946,000 established by the Federal Power electricity and natural gas that in 1970, and expenditures Commission during the last 15 were authorized by the Michigan projected for 1971 are expected years, making it less and less Public Service Commission in to aggregate $253,389,000.

profitable to prospect for gas, j

September 1969, the Company's Rate increases in late 1969-Most of the major companies, and j

earnings per average share of which were based on costs nearly all of the independents, 1

common stock outstanding were experienced in 1968-are not simply stopped looking for i

$2.95 for the year ended adequate to produce revenues new reserves.

2 December 31,1970. This commensurate with a reasonable Today, there is a limited l

compares with $2.79 per share rate of return on investment now amount of gas coming out of the reported for the year 1969, when and in the future. For this reason, ground, and it is not enough to i

earnings were severely depressed the Company returned to the meet all demands. Thus, by the squeeze of rising costs and Public Service Commission in Consumers Power Company-like the long waiting period that was August 1970 with a petition for other utilities across the nation-i l

endured before the Company additional rate adjustments in its has had to impose restrictions received some rate relief.

electric service. And it is probable on its acceptance of new in 1970, the Company sold that similar application will soon business, as indicated in the body record quantities of electricity have to be made for higher rates of this Annual Report.

f and natural gas. Kilowatthour for natural gas.

The Company, however, is not sales of electricity were up 1.8 During the last several years, idle. It is actively seeking new percent in spite of a lengthy demands for natural gas supplies. Its wholly-owned i

automotive strike, and volume increased more rapidly, and in subsidiary, Northern Michigan

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sales of natural gas were up 10.1 greater volume, than ever before; Exploration Company is l

percent, compared with 1969.

partly as a result of substantial participating in several exploratory i

Gross operating revenues in new demands for gas to overcome projects. In the northern part of 1970 also reached an all time industrial air pollution. This Michigan's lower peninsula, i

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several wells have been drilled Michigan that is applicable to a that such a settlement can be in association with producing facility at that site. The Michigan reached with the environmentalists g) companies. One of these is Public Service Commission has in the near future and that the (V

producing commercial quantities recommended that the plant Palisades Plant may be generating of oil. In southern Louisiana, be allowed to operate.

power this summer and fully six wells have been drilled in in effect, the Company and its operational by September.

I association with independent more than one million electric Meanwhile, intervention also is producers. None of these was customers have been caught in the delaying the issuance of a productive, lQre drilling is middle of an argument between construction permit for the planned for 1971.

the environmentalists on the one Company's proposed nuclear Meanwhile, Northern Michigan hand-who fear radiological plant near Midland. Some local Exploration Company participated dangers and possible harm to residents and others, including in a group headed by Sun Oil Lake Michigan from heated water certain of the objectors in the Company, which was successful discharged by the plant-and the Palisades controversy, are seeking bidder for 45,000 acres of U.S. Atomic Energy Commission.

to prevent the granting of a underwater leases in the Gulf of While absence of the Palisades construction permit for this plant.

Mexico, in a recent Government plant has imposed a strain on the Hearings were held briefly in sale. Offshore exploratory drilling Company's electric service, December, and are expected to is to begin shortly off the fortunately it has been possible resume in the second quarter of Louisiana coast.

to date to meet winter peak 1971. Preliminary work on the At present, it appears that it demands of the Company's project now has been shut down, may be several years before new electric customers with and work will not resume until a reserves of gas can be found, supplementary power purchased construction permit is granted, dueloped, and made available to from other utilities.

On a happier note, construction customers. Thus, the shortage of A critical period lies ahead.

goes forward on schedule at the natural gas in Michigan is real, For the summer of 1971, the site of the 1.8 million kilowatt and may continue for some time Company has arranged to pur.

Ludington Pumped Storage to come.

chase additional supplementary Hydrcelectric Plant. This facility In the electric business, the power to the extent that it is is being constructed jointly by most frustrating difficulty has obtainable, but it is not available in Consumers Power Company and A) been the Company's inability to

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sufficient quantities to provide the The Detroit Edison Company, and operate its Palisades Nuclear desired level of reserves for forced is due for initial pumping in late Plant,35 miles west of outages and planned maintenance 1972, and for operation in 1973.

Kalamazoo.

of electric generating facilities.

Despite the difficulties recited This very important electric Recognizing the crucialimportance above, the management of the generating station, with a of getting this plant on the line Company is confident that prospective output equal to nearly at the earliest possible date, the these obstacles will be overcome, 20 percent of the Company's Company has endeavored for with the continued support and total generating capacity, has been some time to have the efforts of its skilled and dedicated ready for fuel loading and testing environmentalists withdraw their employees. Moreover, it is for some months. But it cannot opposition by offering to install confident also that realistic rate be tested or begin generating the facilities they requested, relief will be forthcoming from power, until the Company is These consist of cooling towers the Michigan Public Service granted an operating license by designed to substantially eliminate Commission in 1971, to give the

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the U.S. Atomic Energy thermal discharges to Lake Company a firm base on which to Commission. This license has Michigan and additional meet Michigan's expanding been held up by intervention of equipment which is intended to demands for energy in the a few groups of environmentalists, result in an essentially zero years ahead.

who have succeeded in prolonging release of radioactive materials in the licensing process by public liquid discharges. Such facilities Sincerely, hearings that have gone on are in addition to those required intermittently since June 23, by law and will cost an estimated 1970.

$15,000,000. They are expected These delays have been to result in an additional annual A. H. Aymond particularly exasperating because cost in excess of $3,000,000, Chairman of the Board the plant was designed and built attributable to reduced thermal to conform with every applicable efficiency of the plant, some Im safety standard and regulation curtailment of generating O) of the U.S. Atomic Energy capability, and increased operating James H. Campbell Commission. Moreover, the plant and maintenance expenses, as President complies with every air and water well as fixed charges on the quality standard of the State of invested capital. We are hopeful February 15,1971 3

Nuclear Power and the Need for Energy G

For three decades, phenomenal growth has been a key feature of the American economy and Michigan has been one of the nation's pacesetting states. Economic expansion has been characterized by a larger population living better than ever before, factors reflected by growing communities and a steadily rising gross national product. In substantial measure, this economic progress has been dependent upon the availab:lity of ample supplies of energy.

Without electricity and natural gas, America's modern way of life simply would not exist. But as 1970 ended, Michigan and the nation looked ahead to serious difficulties in sustaining growth in energy resources to match increases in i

population and living standards. Nuclear power is one essential element in meeting the need for more energy in the 1970's-and thereafter.

O The year 1970 brought one key Consumers Power Comptny Michigan Must Have issue before the American publ,c believes the development of More Energy i

into sharp focus. The nation is nuclear power is a safe and far.ing a period of inadequate prudent course for Michigan and Electricity, upon which this energy supplies. The problem the nation to follow. Moreover, industrialized society is varies in terms of regions and it is an essential and inevitable dependent, is produced by forms of energy. But it is real.

course that must be followed to converting raw energy-coal, oil, A shortage of natural gas has help provide the tremendous natural gas, falling water and emerged. It cannot be adequately additional amounts of energy that nuclear fuel-into electric energy, relieved by further dependence on will be required as the economy But raw energy alone, is not oil and coal, since there are continues to expand.

enough. There must be large and problems of supply with these The Company also believes the costly generating plants to a

fuels also. Most hydro-objections that have been raised accomplish the conversion.

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electric resources have been to nuclear power stem from Without them-without constant developed.

incomplete understanding of the planning, building, and investmot There is, however, a major safety record and potential of large sums of capital-the source of energy readily available environmental benefits of this economy of Michigan would be in sufficient quantities to meet the needed source of electric crippled.

growing needs of America's generation.

To understand the energy industrialized society, and with requirements of Michigan,it is helpful to look backward to 1950; minimum impact on the This portion of the 1970 and then forward to 1980.

environment. That energy source Annual Report is devoted to an in 1950-just 20 years ago-is nuclear fuel. But on~every side, attempts to develop additional oveniew o( the need for energy, Michigan's population numbered nuclear fueled electric generat:ng and to outhning the role o(

6,100,000 people. In that year plants have been beset with nuclear power in maintaining they, and the industry and intervention, chiefly on the ground Michigan,s energy resources commerce of the state's econc of safety, but strangely, also on and improving Michigan's consumed 18.2 billion environment.

kilowatthours of electricity.

the ground of environmental' pollution.

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• • %t x The Palisades nuclear plant is designed to have an initial generating capacity of 710,000 kilowatts.

t The Midland nuclear electric generating station will have 2 reactors, each the size of the one at Palisades.

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O Michigan's population had grown And if productivity is going to of energy sources-coal, gas, oil, to 7,500,000 people. And continue to increase, the use of nuclear fuel and hydropower-consumption of electricity was electric energy will have to to meet its customers' growing 32.3 billion kilowatthours increase at an even faster pace.

needs for electricity while annually.

That is the basis for the forecast maintaining environmental quality.

In 1970, a population of that, in 1980, there will be As 1971 opened, Michigan was 8,600,000 people consumed 9,900,000 people consuming receiving sufficient coal to operate 59 billion kilowatthours; 112 billion kilowatts of electricity its coal fired electric generating 70 percent of it being used by annually.

plants, mainly because of industry and commerce.

These forecasts are something adequate long term contracts with By 1980-not quite 10 years that deeply concern the coal suppliers, and because of from now-Michigan is expected management of Consumers Power prior commitments for unit train to have 9,900,000 people. They Company. The lead time for operations to transport coal into and Michigan's commerce and constructing electric generating the state. However, reserves of industry are expected to consume plants now is approximately seven coal that can be strip mined are 112 billion kilowatthours of years. It may become longer as dwindling, and production of coal electricity. That would be nearly more and more people, agencies reserves in deep mines has been twice the electricity consumed and boards become invulved in slowed by problems of safety in 1970, the location and environmental and an inadequate work force in Thus, with something more considerations of power plants.

the coal industry. Limited than half again as many people By 1980, the Michigan power transport facilities and rising as Michigan had in 1950, the pool must add in excess of transport costs also present state's economy in 1980 is 13,000,000 kilowatts of additional difficulties in attempting to obtain expected to require SIX generating capacity.To accomplish large incremental supplies of coal.

times as much electricity.

this, Consumers Power Company A further consideration is the and The Detroit Edison Company, insufficient supply of low-sulfur Econom. Growth A ic between them, will have to expend coal that would be desirable for Certamty more than $2,500,000,000 on improved air quality control.

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lt is a certainty that IVichigan-new generating units.

import quotas and problems of along with the rest of the nation-overseas supply and transport is going to have to cope with an Industry Needs Power also make it very difficult to obtain ever. growing population, and an Michigan is a highly industrialized large quantities of low sulfur oil.

ever increasing output of goods state, and American industry Michigan's practical hydro.

and services required by its cannot operate without large electric potential is limited to large a

people, amounts of energy. Michigan has pumped storage projects with

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In the 1970's, it is estimated a relatively high average per man-made storage ponds, similar that the Michigan work force will capita income; which means its to the 1.8 million kilowatt plant increase at the rate of about people enjoy the benefits of the Company is building near one percent per year; or broader uses of energy for all Ludington, in association with approximately 650,000 more forms of modern living. But The Detroit Edison Company.

people in 1980 than the number Michigan is not rich in native Additional pumped storage employed today. At the same time, energy resources. It has no electric generating facilities are nearly all nationa: estimates commercially recoverable coal, expected to be needed in the forecast the rise in production in very little hydropower, and only 1980's. Looking ahead toward this real terms at approximately three very limited reserves of oil and future need, the Company in 1970 percent per year; which is about natural gas. All of the coal that is acquired 4,100 acres of land in the average that it has been since us(d, and more than 90 percent Benzie and Manistee Counties World War 11. Through economic of the oil and gas, must be for a second pumped storage growth, Michigan's total output imported from sources outside development.

of goods and services in 1980 will the state.

Pumped storage plants are used have increased approximately The Company's challenge is to to supply " peaking" power. This 50 percent more than it is today, achieve the best possible balance means that during periods of 6

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1950 1960 1970 1980 The output of the Palisades nuclear plant will M MILL;oNS OF PEOPLE otal ge era Ing cap c'ty n 1970 E BILLIONS OF KILOWATTH0'JRS 7

s.,

O peak demand on the electric America s economic development one of the most vital energy system, Ludington will be used to has been the use of new resources available. It promises supplement the power generated technology to solve problems to be an important asset in at plants fired with coal, oil, brought on by earlier technology controlkng pollution by supplying natural gas and nucitar fuel, and expansion. Central station large amounts of needed electricity During times of off. peak demand, electricity and modern natural gas for a wide range of applications the storage pond must be filled systems have eliminated the coal aimed at protecting and improving with water pumped by power smoke which emanated from the environment. Among the supplied from " base load" industrial and residential furnaces requirements for additional energy generating plants, during the Industrial Revolution.

are: Electric space and process Michigan's natural gas shortage Modern sewage systems have heating in homes and industry; is so acute that the Company replaced the open ditch that ran electric incineration of waste asked authorization of the Public into the nearest stream. Scientific products: electric transportation, Service Commission in 1970, forest management and for mass and individual transit; to restrict new sales of gas in conservat.on practices have electricity to power new sewage order to protect continuing service restored watersheds and treatment plants; electricity to run to the Company's more than riverlands once cut over or facilities designed to recycle solid 850,000 gas customers, burned off.

and liquid wastes-old auto Today's science and technology bodies, tin cans, bottles, chemical Nuclear Fuel A Key Answer offer nuclear fission as a new wastes-into reusable primary Nuclear plants are safe-source of heat with which to materials; and power for many Nuclear plants operate with produce electric energy, at a time other pollution controlling minimum impact on the when other fuels are scarce and

purposes, environment.

nuclear power's benefits are Nuclear plants can make a particularly desirable. And at a Nuclear Plants Are Safe significant contribution to time when, above all, more energy Nuclear plants do not represent environmental quality.

is neMed to meet America's a detectable hazard to the in many areas where the cost of demand for even better living environment, or to people. They transporting coal is a substantial standards for more people, are built and operated to conform expense-including Michigan-with rigid safety requirements nuclear power is the most No Air Pollut. ion of the U.S. Atomic Energy economical way to generate Nuclear power does not contribute Commission. A nuclear plant electricity.

significantly to air pollution.

cannot explode like an atomic Nucuear fuel is considered to No combustion products such as bomb, because the nuclear plant be available in adequate quantities.

fly ash are released. No gases is fueled with low enriched T

Thus, nuclear fission offers the are released such as those by uranium while a bomb is fashioned key answer to the need for more plants that burn coal or oil. Some of highly enriched plutonium or electric energy to match the radioactivity is released in the uranium. In addition, the nuclear steady growth of Michigan's gaseous form by nuclear plants plant by design has a means economy. No other adequate such as the Palisades plant, but of self shutdown.

enargy source is within reach.

its effect is small compared to Nuclear plants do not release Technological breakthroughs in radiation effects from natural dangerous quantities of radiation.

harnessing nuclear fusion, solar background radiation.

There has never been a death or enet e,y, fuel cells or other Nuclear plants are good injury due to nuclear radiation as potential resources appear to lie neighbors. They are quiet. They a result of the operation of any well in the future. In the can be sited to have minimum licensed commercial nuclear meantime, the need for electric visibility to nearby communities, power plant. During normal energy is projected to virtually They do not require large adjacent operation, only the smallest tra double each 10 years-unless coal piles, or disposal areas for amounts of radioactivity in economic growth is curtailed as the fly ash that is created in firing gaseous and liquid forms are the use of energy is restricted.

a plant's boiler with coal.

discharged from the plant. In both A continuing characteristic of Nuclear power is potentially cases, this release is well below 8

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V the strict safety standards of the should be developed to provide late in the year, pending the A.E.C. All radioactive materials Michigan with adequate energy granting of a construction permit.

to be released are analyzed or supplies. In this regard, the The Michigan Air Pollution monitored prior to release to Company has one nuclear plant in Control Commission recently assure that releases will be well operation, another ready for fuel surveyed coal fired industrial below applicable limits. Constant loading and testing, and a power plants that are to be shut surveillance is conducted in and third planned.

down when Consume s Power around nuclear plants to make At Big Rock Point, near Company's new Midland Plant sure no radiation release limit is Charlevoix, Michigan's first comes into operation. The exceeded. Actual operating operating nuclear generating Pollution Control Commission experience indicates that releases station has been producing concluded that operation of a of radioactive materials from electricity since 1962. It is a nuclear power plant, and nuclear plants such as the 71,000 kilowatt facility used for retirement of the older, coal fired Palisades plant are only about both power production and plants, would eliminate 57 tons of one to five percent of applicable research and development fly ash and other solids, and 300 limits and result in exposure to projects designed to reduce costs tons of sulfur dioxide eve'ry day in individuals much smaller than and improve nuclear efficiency, the Midland area.

normal background radiation.

The plant continues to be used As do all steam electric power for research m development of SafeU Standards Ade9uate plants, nuclear plants discharge plutonium fuel, and in the The Company is convinced the

[3\\ water that has been warmed in irradiation of cobalt for industrial Midland Plant will represent no

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the process of condensing the and medical uses, hazard to the environment or the steam back into water. The water At Palisades, on Lake Michigan public. Neither Consumers Power in the reactor which is used to west of Kalamazoo, a 710,000 Company nor The Dow Chemical form steam is in a closed loop kilowatt nuclear plant was ready Company would procued with such isolated from the condensing for fuel loading and testing in a project if eitherdoubted the equipment cooling water. As noted 1970. However, issuance of an effectiveness or adequacy of the before, only a minute amount operating license was opposed by A.E.C.'s safety standards and of carefully controlled and treated intervenors in public hearings regulations.

liquid waste is released, in a conducted by the U.S. Atomic The Company's position with typical nuclear plant, discharged Energy Commission. The hearings regard to the environment remains cooling water might be 20 to 28 commenced June 23,1970, and unchanged at Midland, and degrees warmer than its original in early 1971 were in recess.

elsewhere. It is this: If the source, such as a lake, that might At Midland, public hearings Company finds any of its facilities j

be at 40 degrees temperature on commenced in December 1970, to be harming the environment, a winter day, or'as warm as on the Company's application for it will correct the situation.

70 degrees on a summer day, a construction license for a Further,if any competent dual unit nuclear plant. This regulatory authority demonstrates Cont.inuing Environmental facility is to generate 1.3 million that a plant is damaging the Studies kilowatts of power, and will supply environment, the Company will Scientific studies have not shown

'arge amounts of industrial steam act promptly to correct it. And that the warm water discharges to The Dow Chemical Company finally, if any standards are from nuclear or fossil fueled for use in its Midland complex.

adopted in the future that require power plants are in any way As the hearings opened, additional air or water quality harmful to the environment or the 51 persons or organizations control equipment, the Company aquatic life of adjacent bodies made limited appearances.

will promptly installit.

of water. Nevertheless, continuing Of these,49 expressed support t '~'N studies are conducted to insure of the plant. The hearings then In view of the benefits it oIIers,

(

) that environmental damage does were recessed until 1971.

nuclear oweris an important r

not result from plant operations.

Preliminary site work, which had solut/vn in M/chigan's search Consumers Power believes that been carried on throughout most for more enorgy.

the potential of nuclear power of 1969 and 1970, was shut down 9

1970 Shadows of the Future g

Major challenges involving Michigan's tomorrow became more clearly defined throughout the year. As one of the state's major utilities, they were challenges to Consumers Power Company, too. The environment must be protected. New energy resources must be developed. Rising costs must be offset by all possible efficiencies and by higher rates for energy services.

And the momentum of economic expansion must be matched-the Company must continue to expand its facilities to serve the growing needs of the five million people living in its service area.

Continuing increases in operating Progress Counteracted fact that Palisades complies with costs, concern about combating ironically, interactions within the every safety and environmental pollution, the relentless pressure economy clouded some of the regulatory standard applicable of economic growth creating the achievements of the year.

to it. As indicated in the need for more energy-these were Following electric and gas rate Management Letter (Pages 2-3),

key characteristics of 1970, both increases authorized by the the Company is endeavoring to for the State of Michigan and for Michigan Public Service reach an accommodation with Consumers Power Company.

Commission in September,1969, intervening environmentalists, While it failed to bring a full earnings per average common which would allow the plant to be measure of solutions, the year share outstanding improved licensed and begin operation, crystalized problems that will during the first half of 1970, and The need for natural gas continue to affect the Company reached $3.16 in the 12 month continued to grow throughout the and Michigan's economy in period ended May 31,1970. By Company's service area. Much of 1971 and years thereafter.

the beginning of the third quarter, this was due to space heating Michigan is expanding, in a however, the continuing severe required for new homes, and to a manner characteristic of one of impact of inflation, reflected in general increase in commercial the highly industrialized, faster rising fuel costs, hi her wages, and industrial demands. However, F

growing states. Research at the increased taxes and other a very substantial proportion of University of Michigan indicates a increases in costs, reversed the the increase resulted from the 19 percent increase in the number upward trend in earnings. Thus, in desire of business, government of households in the state in 1980 August,1970, the Company was and industry to use natural gas to as compared with 1969. Most of forced to apply for additional rate overcome air pollution.

that expansion will result from relief in its electric business.

Unfortunately, the sudden young people reaching maturity The Company for some months burgeoning in demand occurred at and establishing new families; has had a major nuclear a time of shortage of supplies of families that will require homes, generating station at Palisades natural gas. The nation continues employment, goods, services-ready for fuel loading and testing, to be caught in a progressively and great amounts of energy, but has been unable to put it into tighter squeeze between limited For Consumers Power, the operation. It represents an initial supplies and tremendous growth issues resolve into one broad capacity of 710,000 kilowatts of in requirements. The reasons for responsibility-maintaining electrical power that is essential the shortage, going back over 15 efficient service with adequate for supplying customers' needs in years, are discussed in the earnings while providing fair-1971, and thereafter. However, Management Letter.

priced energy in larger quantities protracted hearings on the in Michigan, the Company w than ever before, consistent with environmental and safety aspects confronted by a four-fold increas the desire for environmental of the plant are still pending after in the rate at which new business improvement.

more than half a year, despite the was being added to its gas system.

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The Company's natural gas system serves 854,000 customers and in 1970 sent out 310.3 billion cubic feet of gas.

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O With lirnited incremental amounts including the Palisades Plant, was revenue was $273,874,000, a of gas in prospect from pipeline 86 percent. On December 21, 13.9 percent increase for the year.

suppliers, the Company found it 1970, a new record one hour peak Cash dividends of $2.00 per necessary to ask authorization of demand was established on the share declared on common stock the Michigan Public Service electric system, totaling totaled $46,803,000 in 1970, and Commission to limit future sales 3,448,000 kilowatts. A new high were paid at the rate of 50g per of gas in its service area. The sendout of 67,517,000 kilowatt-share on February 20, May 20, restrictions, as adopted, are aimed hours was recorded for a 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> August 20 and November 20.

at bringing sales into balance period ending December 16.

Preferred stock dividends paid with total annual supplies.

For the seven day period ended in 1970 on January 2, April 1, in general, existing commercial December 19,1970, total sendout July 1 and October 1, amounted and industrial customers will be

~ of 447,743,000 kilowatthours of to $3,516,000.

served at levels of use for the electricity also established a new 12 month period ended June 30, record. The three new electric Financing Carr. d Out ie 1970. Approximately 40,000 new records represent increases of in June, the Company offered its residential units and remaining 84 percent,85 percent and common shareholders the commercial and industrial 98 percent, respectively, over opportunity to subscribe for commitments made prior to 10 years earlier.

1,264,938 additional shares of October,1970, will be added to A record sendout for the common stock at $26.50 per the Company's system in 1971.

natural gas system also was share, on a one-for eighteen basis With these additions, the established in 1970, on January 8 and offered any unsubscribed connected load will approximately when 2,074,000,000 cubic feet shares to its employees at the equal available supplies.

were delivered to customers same price. Of the total, Thereafter no additional during a 24-hour period. That was 1,178,168 were purchased residential customers can be 153 percent more than on the through the exercise of rights and added, and no increased sales of peak day 10 years before, the balance of 86,770 were gas can be made to commercial New electric and gas records purchased by employees. Total and industrial customers until were set in early 1971. A total of proceeds were $33,661,000.

new supplies become available.

464,960,000 kilowatthours was Also in June, an issue of $60 sent out in the week ended million principal amount first Sales Largest Ever February 6; 69,615,000 mortgage bonds,8% percent The Company's total business in kilowatthours were required to series due 1976, was sold on a 1970 was larger than ever. The supply customers in a 24-hour competitive bid of 100.510 number of electric customers period ending February 1; and a percent, making the interest cost served at year end was 1,082,400;

24. hour gas sendout of to the Company 8.6393 percent.

the number of gas customers, 2,241,000,000 cubic feet was in November, the Company sold a 854,100. During the year, the recorded February 2,1971.

$50 million issue of 8% percent Company's electric customers Gross operating revenue series first mortgage bonds. The used nearly 19 billion amounted to $609,990,000. That cost to the Company of this kilowatthours of electricity, a 1.8 was an increase of 11 percent over 30 year issue was 8.6243 percent, percent increase over 1969. Gas 1969. Net income rose from based on a competitive bid of customers required 310 billion

$66,960,000 in 1969 to 100.007 percent.

cubic feet of gas, a 10.1 percent

$72,832,000 in 1970. Earnings of Proceeds of these 1970 increase for the year.

$2.95 per average common share security issues were used to The Company's year-end outstanding in 1970 compared finance a portion of the electric generating capacity of with $2.79 in 1969.

Company's expansion and 3,560,000 kilowatts represented a Electric revenue in 1970 improvement program and to 57 percent increase over 10 years increased 8.7 percent over 1969, repay short term borrowings earlier. The planned increase, and totaled $334,904,000; gas obtained for that purpose.

12

ELECTRIC REVENUE GAS REVENUE 1960 1970 1960 1970 0

360 285 270 1

It is anticipated that the d

330 Company will need to sell g

$170,000,000 of new securities in 255 1971 to help finance necessary construction projects.

E 240 300 y

Construction Cost Nearly I

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$242 Million in 1970 Construction projects required the m[

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gas, expansion of the gas system l

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120 In the electric business, major 150 -==

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I producer of the electric energy it 90 distributes.

.'n the planning stages in 1970 90 _ ___

75 -H]---

Electric projects under way or included nuclear, oil fired and

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hydroelectric generating plant 60 -

construction.

The Company announced the

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electric generating units at the Dan E. Karn Plant near Bay City.

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electric turbine generators, each j 30 ----

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60 62 1 : I :I 68 1 60 1 62 1 64 1 66 I :

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70 The large pumped storage i

hydroelectric plant being built by O OTHER O OTHER the Company and The Detroit O Edison Company just south of E INDUSTRIAL G INDUSTRIAL AND COMMERCIAL Ludington was 35 percent E COMMERCIAL E OTHER RESIDENTIAL complete at year-end. When completed, the plant will be one E RESIDENTIAL E RESIDENTIAL USING GAS of the world's largest, capable of FOR SPACE HEATING 13

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is sold fcr use in cement.

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NUMBER OF GAS AND ELECTRIC CUSTOMERS 1960-1910 1300 1200 providing up to 1.8 million Environmental Efforts kilowatts of power at times of Continued peak demand. It will have six Overlying much of the Company's 1100 reversible pump turbine units.

continuing construction and The first unit is scheduled for operational activity in 1970 was pumping operation in late 1972, the sustained attention to and the final unit is scheduled protection and improvement of the 1000 to become operational the environment. Consumers Power following year. In 1970, the plant's Company's involvemer.t in cofferdam was completed, and maintaining environmental quality placement of dike fill, penstock extends back more than 50 years.

900 steel construction and intake Consumers Power has a structure and powerhouse comprehensive air quality control concrete work were under way.

program under way centering on The first shipment of turbine its electric generating plants, and 800 -

components arrived in September, has committed $18 million to a The Ludington Plant will be program for converting certain O owned by Consumers Power and coal fired plants to oil, and for b Detroit Edison on a 51 percent-adding modern air quality control 700 -

49 percent basis, respectively, equipment to coal-fired plants and each company will share in built before such equipment the plant's output in the same was developed.

600 -

proportion. The two companies' The Company also has planned

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electric systems have been the retirement of older coal-interconnected for mutual support burning plants which cannot be and assistance in emergencies modified economically to meet 500 -

since 1928, and have been present day standards. However, operated under a formal power the retirement of these older pooling agreement since 1962.

facilities depends in part upon During the first 15 years of addition of new generating 400 -

j operation of the Ludington Plant, capacity, including the Company's it is expected that a portion of its newest plant at Palisades.

-l output will be sold to the The Company maintains more 300 -

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Commonwealth Edison Company than 700 miles of riverlands, of Chicago.

purchased early in this century in in 1970, the Company brought connection with hydroelectric its Palisades Nuclear Plant to development. Through 1970, the e 200 -

readiness for fuelloading and Company had planted more than

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power testing, and carried out 28 million tree; on these lands u

further preliminary site work and through its broad conservation j

engineering for its proposed.

and reforestation program. The 3 100 -

dual reactor nuclear plant at riverlands continue to be kept

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Midland. Both prcjects, however, open for public recreation and encountered opposition, which is enjoyment. Thirty-nine j

0 O discussed elsewhere in this recreational areas on Company 60 1 62 I

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1 Annual Report. The Midland lands along the Manistee, the 61 63 65 69 project has been shut down until a Meskegon and the Au Sable rivers i"

construction permit is granted by are provided for public use. A E GAS CUSTOMERS l

the Atomic Energy Commission.

new recreational facility, including E ELECTRIC CUSTOMERS 15

l PLANT ADDITIONS AND IMPROVEMENTS 1960-1970 270 240 a trailer park and picnic area Costs Rose Further 1

designed for public use, will be an In system operations and in the i

integral part of the Ludington construction program, rising costs pumped storage hydroelectric continued to be a major challenge

project, in doing business.

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210 The Company installed The Company's total payroll i

underground electric distribution for the year amounted to i

lines in more than half of the new

$128,031,000. This was I

residential subdivisions in its

$19,281,000 higher than the year service area in 1970. The first before. For operating, 180 experiments by the Company with maintenance and construction

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undergrounding began in 1930. In personnel, wages were mereased i

the middle 1960's, techr'ological March 31,1970, and cost of l

progress made underground living adjustments were made in systems economically and August and again in December, in technically feasible, and since accordanct with the agreement 150 i

that time Consumers Power has with the union representing them.

i promoted underground The present contract expires

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distribution installations.

March 31,1971. Negotiations on a new agreement commenced on i

Employees Number February 5,1971.

120 Nearly 12,000 Total cost of fuel used in The Company ended the year with electric generation was 11,957 employees, as compared

$70,940,000, a 20.1 percent to 11,641 at year.end 1969.

increase for the year as more fuel

- I During 1970, the Company was required to produce more j

00 continued to conduct ts electricity, and unit costs of fuel

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" Operation Outreach" program.

rose dramatically. The average Begun in 1968, the program is price of coal for generation of dedicated to the accelerated electricity rose from $7.97 per ton i

hiring, training and employment of to $9.14.

" disadvantaged" men and women, More gas was also purchased, 60 --

_----~~

formerly considered to be to meet increased customer unemployable.

demands. Total cost of gas sold to During the year, another 148 customers amounted to people were hired in this program.

$117,875,000. The system The Company's experience has average cost of gas was 37.24 1

y 30 -

shown that of all participants, cents per thousand cubic feet, as i,

=g approximately 75 percent compared to 37.04 cents in 1969.

3 complete their training.

The two bond issue: sold by the g

probationary periods and become Company in June and Novemt.er regular full. time Company drew interest costs of 8.6393 E

O employees.

percent, and 8.6243 percent, 60 l 62 64 SS.

It is the Company's view that a respectively, both higher than for 6l continuing effort to bring any previous financing in the E OTHER previously disadvantaged persons Company's history.

E CAS into the nation's permanent, Taxes continued to represent productive work force is a basic a substantial cost item despite r

E ELECTRIC corporate responsibility.

the reduction and then the 1

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The 1.8 million kilowatt Ludington pumped storage hydroelectric project was more than one-third complete at year end.

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CONSUMERS POWER COMPANY ELECTRIC SYSTEM E Nuclear Plant E Coal. Fired Plant 3 Gas. Fired Plant E Peaking Plant E Hydro Plant A Primary Substation elimination of the surcharge on the effect of the surcharge is Federal income taxes. Federal, subject to refund pending hearing Transmission L.me state and local taxes on Company on the Company's appeal. In 1970 46.000 Volts operations totaled $93,343,000, the Company reduced revenues Of every dollar received by the by $9,189,000 in order to Transmission t.me Company from its customers, provide a reserve net of related 138.000 Volts 15.3 cents were absorbed by income taxes in the amount of taxes. The Company's property

$4,406,000 for the estimated Transmission b.ne taxes alone amounted to effect of the surcharge issue.

345.000 Volts

$33,290,000, as compared to The Company's position on the e Interchange of Power

$30,670,000 in 1969, surcharge issue is that in an in addition to paying its own inflationary period the Commission substantial tax bill, the Company should review all cost changes collected from its customers and not just a single item of cost

$16,371,000 in Michigan sales that is expected to decline before CONSUMERS POWER COMPANY tax, which was remitted to the providing for a rate reduction.

NATURAL GAS SYSTEM state.

The soundness of this position is Rate Relief Needed evidenced by the fact that the Gas Lines Company s rate of return on its Consumers Power Co.

The electric ana gas rate, creases investment in 1970, after m

authorized by the Michigan Public reflecting the revenues relating Gas Lines Service Commission in September, to the surcharge issue, was less

~ Mich;gan Gas Storage Co.

1969, and made effective October than the rate of return authorized 22,1969, were designed to by the Commission.

Gas Lines produce $37.8 million annually in Another issue involved in the Panhandle Eastern Pipe Line CoI

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additional revenue out of a total of appeals includes, among other

$57.8 million requested. Both the things, a claim for refunds to Compressor Stations Company and the Attorney General customers amounting to Consumers Power Co.

appealed. The appeals are approximately $7,000,000 for

pending, which no reserve has been Compressor Stations One issue involved in the E

provided. This claim is based upon Michigan Gas Storage Co.

Company's pending appeal is the the circumstance that the electric

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Storage Fields of the authorized increased court order on October 22,1969, Consumers Power Co.

revenues representing the 10 but the Michigan Public Service percent Federal income tax Commission did not issue an order

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surcharge which became effective approving the rates until April 20, Michigan Gas Storage Co.

in 1968 and was reduced and 1970' costs continued to soar, the As Gas Fields then eliminated in 1970. The Commission's order authorizing Company applied for further rate Consumers Power Co.

increased revenues required the relief in August,1970, asking the Company to reduce rates at such Commission for authorizat,on to g

i time as the surcharge was increase its rates for electric reduced or eliminated. This service approximately nine portion of the Commission's order percent, to realize additional was stayed by a temporary annual revenues of approximately injunction of the Ingham County

$28,500,000. Hearings on the Circuit Court and that portion of request commenced December 2, the Company's revenues reflecting 1970, continued in January,1971, 18

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O and have been recessed until and Right.of.Way. Mr. Youngdahl since 1962, succeeded Mr. Brown March. The Attorney General has joined Consumers Power in 1946, as manager of the Pontiac intervened in opposition to this and held a svies of field and Division. Mr. Goense joined the request for a rate increase.

general office executive Company in 1951.

It is hoped that accelerated assignmcats prior to his election More Shareholders procedures adopted by the as vice president in 1967.

Commission in 1970 will result in Harold P. Graves was elected Reflecting the issue of additional a Commission order by early vice president and general common stock in 1970, the summer. The gas rate increase counsel. Mr. Craves joined the Company ended the year with made effective October 22,1969, Company as an attorney in 1953, 93,879 common shareholders of originally was requested April 19, later became general attorney record, an increase of 6,436 over 1968. The electric rate increase and, in 1958, general counsel.

1969. Of these, some 2,200 were made effective October 22,1969, Romney Wheeler was elected new employee shareholders, originally was requested July 15, vice president, public relations.

bringing the total number of 1968.

Mr. Wheeler joined Consumers employees among the Company's Power Company in 1964 as owners to more than 3,750.

New Director, Officers assistant director of public Preferred stock was held, at On January 6,1971, Colonel relations, and was named director year end, in 14,113 names. Mor James A. McDivitt, United States of public relations in 1965.

than half of the Company's Air Force, was elected to the On November 1, Arthur H. Lee, shareholders live in Michigan, Company's Board of Directors.

manager of the Company's while others live in all of the other Colonel McDivitt, as an Astronaut, Kalamazoo Division, retired after 49 states, the District of Columbia commanded the Gemini IV and more than 40 years of dedicated and 35 foreign countries.

Apollo 9 missions. He and able service. He had been Individuals and jcint accounts, subsequently served the National Kalamazoo's division manager often husband and wife, account Aeronautics and Space since 1958. William A. Holtgreive for 89 percent of all common Administration as manager of succeeded Mr. Lee as division stock registrations.

lunar landing operations, then manager. Mr. Holtgreive joined Annual Meetin9s became manager of the Apollo the Company in 1951, and had Spacecraft Program. Based in served as assistant division The Company's Annual Meeting of Houston, Texas, Colonel McDivitt manager in Kalamazoo since Shareholders was held in Jackson is the son of retired Company 1963.

on April 14,1970. A total of 83.3 3

associate engineer, James A.

In October, Charles F. Brown, percent of all shares entitled to

]

McDivitt, Sr.

who joined the Company in 1949 v ie was represented in person or At its organizational meeting in and became Pontiac division by roxy April,1970, the Board of manager in 1962, was named ShWh will & M M Directors augmented the Lansing division manager. He Company s management staff by succeeded Robert H. Lawlor, 2:00 PM, Tuesday, April 13, in the electing a new senior vice Lansing division manager since Company's Parnall Office Building

.in Jackson.

president, and two new vice 1966, and formerly assistant presidents.

division manager from 1954, who Russell C. Youngdahl, formerly was placed on extended illness a vice president, was elected leave on October 1. The Company senior vice president with was deeply saddened, in January, responsibility for generating plant 1971 by the death of Mr. Lawlor, projects including their who served the Company for many engineering and construction, years with skill and devotion.

Electric Construction, Personnel, John G. Goense, assistant Purchasing and Stores, and Land manager of the Macomb Division 20

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. Installed in more than half of all new residential subdivisions in the Company's service area.

1 The Company's exploration subsidiary is associated in a search for gas in 45,000 acres of underwater leases in the Gulf of Mexico.

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AnTuun.ANDERSEN & CO.

13 the Board of Directors, Consumers Power Company:

We have examined the balance sheet of CONSUMERS POWER COMPANY (a Michigan corporation) as of December 31,1970, and the related statements of income, retained earnings and funds for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. We have previously examined and reported on the financial statements for the preceding year.

In our opinion, the financial statements referred to above present fairly the financial position of Consumers Power Company as of December 31,1970, and the results of its operations and the source of funds for gross property additions for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year.

Fe ma 5,

71.

A2 w/

Statement of Source of Funds Consumers Power Company for Gross Property Additions YEAR ENDED DECEMBER 31 FOR THE YEARS ENDED DECEMBER 31,1970 AND 1969 1970 1969 SOURCE OF FUNDS FOR GROSS PROPERTY ADDITIONS:

Earnings retained in the business:

Net income after dividends on preferred stock

$ 69,315,000

$ 63,426,0 Less-Dividends declared on common stock (quarterly dividend formerly declared in December was declared in January,1970)

(46,803,000)

(32,446,000)

$ 22,512,000

$ 30,980,000 Principal noncash charges:

Depreciation and amcrtization-Per Statement of Income

$ 55.608,000

$ 51,881,000 Charged to other accounts 6,162,000 5,200,000 Deferred income taxes-net 10,222,000 10,962.000 Investment tax credit-net 448,000 3,416.000

$ 72,440,000

$ 71,459.000 E

Financing:

Sale of common stock.

$ 33,661,000 Sale of first mortgage bonos.

110,000,000 105,000,000 Increase in other long-term debt.

12,730,000 Increase in notes payable.

12,600,000 6,900 000 Retirement of long term debt and preferred stock, in accordance with terms of issuance (9,438,000)

(7,788,000)

$159,553,000

$104,112.000_

Other:

Change in net current assets and current liabilities

$ (15,140,000)

$ (2,171,000)

Other 2.531,000 723.000

$ (12,559,000)

S (1.448.0C' GROSS PROPERTY ADDITIONS

$241,946,000

$205,103,

( ) Denotes deduction.

The accompanyir:g notes are an integral part of this statement.

22

Statum:nt cf inenm3 Ceneumsra Pcwcr Ccmp ny FOR THE YEARS ENDED DECEMBER 31,1970 AND 1969

,f -

lO YEAR ENDED DECEMBER 31 l

1969 1970 OPERATING REVENUE (Note 5):

$334,904,154

$307,999,678 Electric 273,873,680 240,535,782 Gas 1,211,671 1,239,386 Steam 5609,989.505

$549,774,846 Total operating revenue OPERATING EXPENSES AND TAXES:

Operation-Purchased and interchanged power

$ 19,330,636

$ 13,530.397 fuel consumed in electric generation 70,939,536 59,091,019 Cost of gas sold.

117,874,862 106,888,113 116,644,190 100.874,343 Other.

Total operation

$324,789,224

$280,383,872 Maintenance 32,817,757 26,121.267 Depreciation and amortization (Note 7) 55,608,057 51.880,650 General taxes 39,062,263 37,058,195 Federal income taxes 38,823,836 41,022.326 State income taxes 4,786,793 4,071,324 Provision for deferred income taxes, net 10,221,539 10,962.051 Charge equivalent to investment tax credit, net 448.537 3,416,145 v

Total operating expenses and taxes.

5506.558.006

$454,915,830

$103,431,499

$ 94,859,016 Net operating income OTHER INCOME:

Interest charged to construction (Note 2).

14,108,197 8,421,485 Dividends from Michigan Gas Storage Company 1,650,000 1,350,000 Gain on reacquisition of long-term debt 1,074,465 768,802 1,124,907 771,285 Other.

Gross income.

$121,389,068

$106,170,588 h

INCOME DEDUCTIONS-

$ 44.812.084

$ 35,956,150 Interest on long term debt 2,970,481 2,685,912 Interest on notes payable 774,894 568,183 Other

$ 48,557,459

$ 39.210.245 Totalincome deductions Net income

$ 72,831,609

$ 66,960,343 3,516,422 3,534,500 DIVIDENDS ON PREFERRED STOCK Net income after dividends on preferred stock.

$ 69,315,187

$ 63,425,843 EARNINGS PER SHARE OF COMMON STOCK

[q}

BASED ON AVERAGE SHARES OUTSTANDING V

(23.506 780 shares in 1970 and 22,768,900 :, hares in 1969)

$2.95

$2.79 The accompanying notes are an integral part of this statement 23

Bal nca Sheet at December 31,1970 and 1969 O

DECEMBER 31 Assets 1970 l

1969 UTILITY PLANT: At original cost-Plant in service and held for future use-Electric.

$1,288,260,565

$1,229,560,511 l

Gas 719,087,937 659,370,596 Steam 4,206,666 4,342,289 Common to all departments 52,855,923 49,625,564

$2,064,411,091

$1,942,898,960 Less-Provision for accrued depreciation.

512,073,215 473.217,730

$1,552,337,876

$1,469,681,230 Construction work in progress (Note 2) 278,939,450 182,546,093

$1,831,277,326

$1,652,227,323 OTHER PHYSICAL At cost or less-less provision for accrued depreciation of l

PROPERTY:

$366,286 in 1970 and $100,586 in 1969.

3.019,668 2.774,295 INVESTMENTS: Wholly owned subsidiaries, at cost-Michigan Gas Storage Company 5 16,205,186

$ 16,205,186 Northern Michigan Exploration Company (Note 3) 6,000,000 2,000,000 Other, at cost or less.

737,052 754,711 j

$ 22,942,238

$ 18,959,897 T

l CURRENT Cash

$ 10,221,930

$ 10.260,297

SSETS

Accounts receivable, less reserves of $526,t'49 in 1970 and $363,453 in 1969,

45,349,804 47,327,592 l

Materials and supplies, at average cost 43,269.506 32,792,009 Gas in underground storage, at averat.e cost 23,314,333 20,219,372 Other 2 ' J74,500 19,190,426 5 1 %,130,073 5 129,789.696 OTHER: Deferred debits

$_ 3,006,939 3,629,847

$2,003,376,244

$1.807,381,058 The accompanying notes are an integral part of this statement.

24

Ccncum ra Pow,;r Comprny g

.Y DECEMBER 31 Stockholders' investment and Liabilities l

1939 ig7a CAPITAU7.ATl0N: Common stockholders' equity-Common stock, $10 par value, authorized 25,000,000 si. ares, outstanding 24,033,838 shares in 1970 and 22,768,900 shares in 1969 (Note 4).

. 5 240,338,380

$ 227,689,000 Capital in excess of par value (Notes 4 and 9) 208,904,434 187,756,338 Retained earnings (Note 9) 178,995,080 156,482.642

$ 628,237,894

$ 571,927,980 Less-Capital stock expense 3,964,115 3.201,380 Total common stockholders' equity

$ 624,273,779

$ 568,726,600 Preferred stock, cumulat.n *100 par value, authorized (m

1,500,000 shares (Note 9).

78,733,800 79,133,800 m)

Total stockholders' investment

$ 703,007,579

$ 647,860,400 Long-term debt (Note 10) 923,177,246 810,585,400 Total capitalization.

$1,626,184,825

$1,458,445,800 NOTES PAYABLE: Due within one year.

$ 55,500.000

$ 42,900.000 CURRENT LIABILITIES Current sinking fund requirement on long-term debt.

$ 10,138,000 9,038,000 60,508,945 64,462,226 (excluding notes payable Accounts payable 58,601,466 58,897,524 due within one year): Accrued taxes 9,645,706 12,574,704 Accrued interest..

16,093,409 11,814,942 Other c

$ 154,987,526

$ 156,787,396 DEFERRED Investment tax credit, being amortized over life of the CREDITS:

related property

$ 22,169,604

$ 21,721,067 Other 1,483,677 1.351.035

$ 23,653,281

$ 23,072.102

$ 115,271,231

$ 105,049,692 RESERVES: Deferred income taxes Other(Note 5).

6,311,664 1,800,620

$ 121,582,895

$ 106,850,312 (3

OTHER: Contribations in aid of construction

$ 21,467,717

$ 19.325.448 U/

$2,003,376,244

$1,807,381,058 The accompanying notes are en integral part of this statement.

25

St tzment of R:tcineci Ecrninga Canaumcra Pswcr Ccmpany FOR THE YEARS ENDED DECEMBER 31,1970 AND 1%9 YEAR ENDED DECEMBER 31 1970 1969 RETAINED EARNINGS-Beginning of year

$156,482,642

$125,503,192 ADD-Net income after dividends on preferred stock 69,315,187 63,425,843

$225,797,829

$183.929,035 DEDUCT-Cash dividends on common stock declared in the amount of $2.00 per share in 1970 and $1.425 per share in 1969 (quarterly dividend formerly declared in December was declared in January,1970); paid $2.00 per share in 1970 and $1.90 per share in 1969 46.802,749 32.446.393 RETAINED EARNINGS-End of year.

$178,995,080

$156,482,642 The accompanying notes are an integral part of this statement.

Notes to the Financial Statements 1 The balance sheet as of December 31,1969 has been restated to reclassify nuclear fuel accounts to utility plant in accordance with a revision of the Federal Power Commission's system of accounts.

2 Construction work in progress at December 31,1970 includes $148,884,000 expended on the Palisades Nuclear Plant including fuel and $37,668,000 expended on the Midland Nuclear Plant. Hearings are now in progress before atomic safety and licensing boards of the U.S. Atomic Energy Commission to obtain an operating license for the Palisades Plant and a construction permit for the Midland Plant.

With respect to the Palisades Plant intervenors have delayed the hearings on various legal, ecological and radialegical grounds. The Company has continued to capitalize interest during construction at the rate of approximately $830,000 per month and other costs (which would normally be charged to operations) of approximately $170,000 per month. The Company exp the issues in these hearings to be resolved and the plant placed in operation in 1971.

A number of associations and persons have intervened in the Midir.d hearings opposing the issuance of a construction permit.

As a result, the Company has closed down further construction of the plant until a construction permit is obtained. The Company expects to have a construction permit by the end of 1971. In the event the plant is not completed at the Midland site, but the Company is able to utilize the design work, equipment and materials purchased at another location, the Company may not be able to recover approximately $7,000,000 primarily related to site costs.

3 Northern Michigan Exploration Company (Northern), a wholly owned subsidiary of the Company, is engaged in gas exploration programs in northern Michigan and the southern United States. The Company has purchased $4,000,000 in the common stock of Northern and advanced an additional $2,000,000 in exchange for an interest bearing note as of December 31,1970. The Company's Board of Directors has authorized loans to Northern up to a maximum of $10,000,000 and has authorized a total common stock investment of $8,000,000.

l Northern is obligated to expend approximately $9,700,000 for interests in offshore Louisiana leases of which approximately 5

l

$2,000,000 are expected to be sold. In addition, Northern has made commitments of ap3roximately $7,000,000 for exploratory l

and developmental drilling with respect to onshore Louisiana interests.

4 in June 1970, the Company sold 1,264,938 shares of its common stod at a price of $'.6.50 per share, in connection with this transaction, $12,649,380 representing the par value of the shar6 issued, was credited to the common stock account and

$21,011,399 was credited to capital in excess of par value.

5 in August 1970, the Company filed an application with the Michigan Public Service Commission to increase its electric rates by approximately $28,500,000 on an annual basis based upon estimated 1970 sales. Hearings are currently proceeding on that application.

Litigation is pending on electric and gas rate increases which became effective on October 22,1969. This litigation, which involves appeals taken by the Company as well as by parties opposing the rate increases, includes, among other things, a claim for refunds to customers amounting to approximately $7,000,000 for which no reserve has been provided. This claim is b upon the circumstance that the electric rates were placed in effect by court order on October 22,1969 but the Michigan Pu Servi 9 Commission did not issue an order approving such rates until April 20,1970. Also included in the litigation is a cl for refund relating to the reduction and elimination of the Federal income tax surcharge for which revenues in 1970 were reduced by $9,189,000, and a reserve stated net of related income taxes was accumulated in the amount of $4,406,000.

j 26

6 The Company has a trusteed noncontributory pension plan under which full-time regular employees within specified age limits and periods of service are qualified to participate. The contributions :o the plan were $9,195,000 in 1970 and $7,386,000 in

,s (V')

1%9. Of these amounts $6,945,000 in 1970 and $5,722.000 in 1%9 were charged directly to expense accounts with the remainder being charged to various construction, clearing and other accounts. The contributions include current service costs, interest on unfunded prior service costs and amortization of prior service costs. The unfunded prior service cost at July 1, 1970 amounted to $3,027,000.

'f The Company follows the practice of providing depreciation on the basis of straight-line rates approved by the Michigan Public Service Commission. Composite depreciation rates were approximately 2.95% in 1970 and 2.85% in 1%9 for electric property and 3.05% in 1970 and 3.20% in 1969 for gas property.

3 Capital expenditures for property additions during 1971 are presently estimated to total $253,389,000 and substantial commitments for the purchase of construction materials have been made in connection therewith. Total construction expenditures over the fiveyear period ending December 31,1975 are presently estimated to total $1,980,000,000.

DECEYBER 31 g Preferred stock is represented by:

REDEMPTION PRICE 1970 1969 PER SHARE

$4.50-547,788 shares outstanding.

$110.00

$54,778,800

$54,778,800

$4.52-139,550 shares outstanding.

104.725 13,955,000 14,355,000

$4.16-100,000 shares outstanding,

103.25 10,000.000 10.000,000

$78,733,800

$79.133,800 i

Total preferred stock.

At Dece'nber 31,1970 retained earnings in the amount of $5,905,035, equivalent to $7.50 per share of preferred stock out.

standing, is not available for payment of cash dividends on common stock.

The Company is required to endeavor to purchase and retire annually 4,000 shares of the $4.52 preferred stock at a price per share not to exceed $102.725 plus accrued dividends. Such purchases of preferred stock in 1970 resulted in a net gain of $136,697 which was credited to capitalin excess of par value.

[V OECEMBER 31 l

10 Longterm debt is represented by:

is70 159 First Mortgage Bonds-

$ 86,324,000

$ 92,437,000 2%% Series due 1975 8%% Series due 1976 60,000,000 2%% Series due 1977....

24,010,000 24,775,000 3%% Series due 1981 39,000,000 39.000,000 24,075,000 24,075,000 3% Series due 1984 4% Series due 1986 40,000,000 40,000,000 3%% Series due 1987.

25,000,000 25,000,000 4%% Series due 1987 246,000 246,000 4%% Series due 1988.

40,000,000 40,000,000 l

4%% Series due 1989.

35,000,000 35,000,000 30,000,000 30,000,000 3% % Series due 1990.

c 4%% Series due 1990.

34,000,000 35,000,000 4%% Series due 1991.

40,000,000 40,000,000 5%% Series due 1996 59,000,000 59,560,000 79,400,000 79,400,000 6% Series due 1997 6%% Series due 1998 55,000,000 55,000.000 l

6%% Series due 1998 55,000,000 55,000,000 7%% Series due 1999.

50,000,000 50,000,000 8%% Series due 1999.

55,000,000 55,000,000 i

8%% Series due 2000.

50,000,000 I

Total First Mortgage Bonds..

$881,055,000

$779,493,000 l

Sinking fund Debentures,4%%, due 1994 39,400,000 40,000,000 12,860,246 130,400 Other.

l

$933,315,246

$819.623,400

/7 Deduct-Current sinking fund requirement included in current liabilities-V First Mortgage Bonds

$ 9,538,000

$ 8,438.000 600,000 600,000 Sinking Fund Debentures

$ 10.138,000

$ 9.038,000 Total long-term debt

$923,177,246

$810,585,400 27

Financial Summary 1970-1960 STATEMENT Operating Revenue OF Electric.

$ 334,504,154 $ 307,999,673

$ 286,245,624

$ 270,086 INCOME Gas 273,873,680 240,535,782 217,681,852 205,882,4 DATA Steam Heating 1,211,671 1,239,386 1,191,514 1,213, Operating Revenue Deductions. Except Taxes.

413.215.038 358.385.789 320.195.813 200.603.58 Taxes FederalIncome Tax 38.823.836 41.022.326 49.260.385 45.486.43 Statelocame Tax.

4.786.793 4.071.324 4.859.454 Deferredincome Tax.

10.221.539 10.962.051 9.901.486 7.692.Sl Investment Tax Credit (Net).

448.537 3.416.145 3,395.805 4.055.8)

Other.

39.062.283 37.058.195 31.767.807 29.468.2?

Net Operating income i"ectric 62,778,612 62,598.806 57,034,666 58,851,8s Gas 40,779,643 32,651,237 28,870,985 31.093,93j Steam Heating (126,756)

(331,027)

(167,411)

(70,99?

Other Income 3,849,372 2,890,087 2,348,356 1,428,37 Interest Charged to Construction 14,108,197 8,421,485 4,891,483 2,555,33 Income Deductions 48,557.459 '

39.210.145 30.421.420 25.335.08 Net income 72,831,609 66,960,343 62,556,659 68,523,49l Cash Dividends Declared On Preferred Stock 3.516.422 3.534,500 3.548.060 3.567.01' On Common Stock 46.802.749 32.446.3930) 43.137.343

.8 Earnings Retained 22,512,438 30,979,450 15,871,256

.6,6 Common Stock, Unadjusted, See Fcotnote (1)

Average Shares Outstanding 23,506,780 22,768,900 22,670,777 22,628,90 Earnings per Share 2.95 $

2.79 2.60 2.8 Cash Dividends Paid per Share 2.00 $

1.90 1.90 Id Common Stock, Adjusted, See Footnote (1)

Average Shares Outstanding 23,506,780 22,768,900 22,670,777 22,628,90 Earnings per Share 2.95 $

2.79 2.60 2.8 Cash Dividends Paid per Share 2.00 $

1.90 1.90 1.6 Interest Charged to Construction per Share

.60 $

.37

.22

.1 BALANCE Utility Plant.

$2,343,350,542 $2.125,445,0533)

$1,924,062,750

$1,742,150,63 SHEET Accrued Depreciation 512,073,215 473,217,730:5) 427,774,321 398.061,57 DATA Plant investment per Employee 195,981 182,5833) 171,487 160,76 Capitalization, See Footnote (2)

Common Stock and Retained Earnings 624,273,779 $ 568,726.600

$ 537,643,407

$ 516,861,79 Preferred Stock 78,733,800 79.133,800 79.533,800 79.962.58 Leng-Term Debt 923,177,246 810,585,400 714.627,900 612,015,9 Total Capitalization

$1,626,184,825 $1,458,445,800

$1,331,805.107

$1,208,840,27 Capitalization Ratios-%, See Footnote (2)

Common Stock and Retained Earnings.

38.4 39.0 40.4 42.:

Preferred Stock 4.8 5.4 6.0 6.J Long Term Debt 56.8 55.6 53.6 50.0 grso e 2 for 1 sto k p it in pnl 19 2 or for h 10% Co m n Stoc d id d n De ember eclar in January.19.

Issued April 1967. The Common Stock. Adjusted, figures reflect these adjustments.

(2) Total Capitalization and Common Stock anJ Retained Eamings data shown above for 1964 ssues pre io s y reported as a deferre deb

966 1%S 1964 1%3 1962 1961 1960 5 257,833,579

$ 239,991,443

$ 221,738,649

$ 209,202,898

$ 198,857,361

$ 186,399,427

$ 179,568,429 188,927,810 172,321,289 153,779,511 142,115,564 131,395,598 114,655,299 100,769,449 1,138,878 937,113 882,058 944,005 976,696 1,001,675 1,058,055 280,364.645 256.S81,178 232.954.932 220.071.186 206.499.817 189.100.637 179.967.924 48.883.101 47.406.213 432 99.441 29.016,596 37.953.679 33.732.041 28.647.373 6.813.332 6.190.110 6.920.315 7.105.571 6.999.982 7,248,991 7.059.399 2.158.151 2.58S234 1.9392 63 2,174.310 1.966.029 25.038.103 23.055.001 21.199.959 19.868.033 17.343.4SS 16.922.249 15.433.214 55,851,252 52,346,746 47,767,645 44,715.036 41,906,814 39,573,111 38,147,033 27,807,461 25,168,901 22,387,564 19,366,352 18,635,125 15,558,320 12.269.197 (15,778)

(83,538)

(68,901)

(54,617)

(75,246)

(78,949)

M28,267) 2,040,272 2,612.514 1,753,543 1,894,011 1,488,877 1,590,088 1,704,170 2,332,530 635,545 365,927 332,660 1,990,243 1,879,517 2,376,994 l

20.837.321 182 97.939 18.192.629 18.569.918 18.681.151 18.113.572 16.118.539 67,178,716 61,882,229 54,013,149 47,683,524 45,264,664 40,408,515 38,250,588 3.584,56S 3.614.036 3.6292S9 3.655.648 3.665.59S 3.683.4S3 3.698259 l (

2 078.528 37.540283 33.609204 30260.152 27.542.109 2S.421.656 24.767.968 bi4,515,623 20,727,910 16,774,686 13,767,724 14,056,960 11,303,406 9,784,361 20,567,560 20.555,589 20,330,016 20,094,050 19,608,383 9,568,115 9,525,665

)

3.09 2.83 2.48 2.19 2.12 3.84 3.63 i

1.90 1.775 1.60 1.475 1.40 2.60 2.60 22,624,316 22,611,148 22.363,018 22.103,455 21,569,221 21,049,853 20,956,463 i

2.81 2.58 2.25 1.99 1.93 1.74 1.65 1.73 1.61 1.45 1.34 1.27 1.18 1.18

.10

.03

.02

.02

.09

.03

.11

$1,619,668,027

$1,482,250,832

$1,384,203,322

$1,329,744.266

$1,284,320,741

$1,206,518,804

$1,123,245,187 5

364,653,544 330,308,291 302,318,407 273,316.827 245,831,001 219,227,665 193,273,276 154,283 148,477 141,940 136,608 131,833 131,809 111,855

$ 494A83.584

$ 468.976,284

$ 445,022,760

$ 421,589.507

$ 394.398,888

$ 368,248,909

$ 347,904,226 80,363,340 80,764,100 81,164,860 81,565,619 81,966.379 82,367,138 82,767,898 538,169,000 478,657,000 486,591,691 457,187,082 493,062,773 489,337,064 461,S24,254

$1,113.015,924

$1,028,397,384

$1,012,7/9731T

~$ 960,342,208

$ 969.428.040

$ 939,953,111

$ 892.5907f

~

44.4 45.6 43.9 43.9 40.7 39.2 39.0 7.2 7.9 8.0 8.5 8.5 8.8 9.3 48.4 46.5 48.1 47.6 50.8 52.0 51.7 (g

)

l V

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'T*:.*;1:,'"??::'l::.'.;?c;;"." L',:c #"n; c

t including th. eff.Ct Of applicabl. incom. tax syst.m of accounts.

29 e

Electric End Ga3

' c:a"acg/afey?;,"""

Operating C:mp rirn 1C,70-1CCO 1970 1969 1960 1969 1968 electric revenue Residential.

. $133,131,799 11.6 74.7

$119,298,937 Commercial 87,727,018 15.1 117.5 76,246,495 Industrial......

102,501,526 4.5 86.2 98,132,472

,M Interdepartmental and Other.

6,101,767 14.7 108.2 5,320,222 4,849,70 Total Sales to Ultimate Consumers.

. iW9 462,110 10.2 88.8

$298,998,126

$275,808,94 Power Pool.

2,504,4 %

Other Resale...

6,661,084 19.6 125.3 5,567,956 4,912,92' Reserve for Possible Rate Refund.

(5,929,745)

Total Electric Sales Revenue.

. $WO,193,449 8.4 86.0

$304,566,082

$283,226,3s Miscellaneous Electric Revenue 4,710,705 37.2 126.3 3,433,596 3,019,291 Total Electric Revenue

. $334,904,154 8.7 86.5

$307,999,678

$286,245,62 electric sales Residential 5,931,840 7.0 85.1 5,546,263 5,090,5)

(1,000 kilowatthours)

Commercial 4,027,215 9.6 138.2 3,673.709 3,388,7@:

Industrial 8,073,913 (5.9) 83.6 8,578,389 8,104,06; interdepartmental and Other 208,526 8.6 63.1 191,951 186.7@

Total Sales to Ultimate Consumers 18,241,494 1.4 96.1 17,990,312 16.770,01!

Power Pool Other Resale.

411,69!

565,183 15.6 126.4 489,051 428,90 Total Electric Sales 18.806.677 1.8 96.9 18,479,363 17.610.61 peak load Kilowatts 3,448,345 2.1 83.8 3,377,275 3,179,71 generating capacity Kilowatts 3,560,086 4.4 56.8 3,411,036 3,371, 3 heat rate Stu of Fuel per Net Kilowatthour Generated 10,120 1.8 2.7 9,941 9,8 02 electric customers End of Period 1,082,442 2.3 23.9 1,057,735 1,031,91; electric residential Annual Kilowatthours Used..

6.222 4.5 49.5 5,954 5,60!

customer Revenue per Kilowatthour Used 2.24c 4.2 (5.9) 2.15c 2.1%

averages AnnualRevenue.

$139.64 9.0 41.1

$128.06 1.1; gas revenue Residential Using Gas for Home Heating.

$150,050.985 12.2 187.5

$133,776,482

$123,150,73 Other.

6,614,752 8.5 (40.2) 6,097,784 6,329,2?

Industrial and Commercial..

105,881,351 13.0 221.2 93,716.797 83,103,7s interdepartmental and Other (1) 10,879.909 253.3 688.8 3,079,358 325,53 Resale.......

456,805 (42.6)

(72.0) 796,401 1,337;47 Reserve for Possible Rate Refund.

(3,258.764)

Total Gas Sales Revenue.

$270.625,038 14.0 172.7

$237.466.822

$214,246,75 Miscellaneous Gas Revenue 3,248,642 5.9 110.8 3,068.960, 3.435,1C Total Gas Revenue 5273,873,680 13.9 171.8

$240.535,782

$217,681,85 gas statistics Gas Sales (1,000 cubic feet)

Residential Using Gas for Home Heating 134,435,759 4.2 150.1 129,060,276 120,256,31.

Other 3,733,980 (6.6)

(54.4) 3,997,083 4,215,21 Industrial and Commercial.

146,405,893 5.0 199.7 139,497,140 125,896,46 Interdepartmental and Other (1) 24,805,995 243.8 568.7 7,214,920 482,50-Resale 962,331 (51.7)

(74.6) 1,992.394 3,620,01-Total Gas Sales 310,343,958 10.1 162.3 281,761,813 254,470,53 Net to Storage.....

13,896,516 27.1 35.1 10,937,194 6,204,53 Unbilled, l.ost and Company Use 9,765,675 2.3 42.5 9,548,264 12,648,53

~K006,149 10.5 146.6 302,247,27T 273,323,61 Total Gas Purchased and Produced.

3 maximum 24-hour gas sendout (1,000 Cubic feet) 2,074,000 19.5 152.5 1,735,000 1,690,58 gas customer:

End of Period 854,117 2.9 58.3 830,011 1 8,33 residential Number-End of Period.

706,580 4.5 119.5 675,851 1,68 customers Average Annual Mcf Used..

195 (0.5) 6.0 196 19 using gas for Aterage Revenue per Mcf Used 111.62e 7.7 15.0 103.65e 102.41.

home heating Average Annual Revenue 5218.12 7.3 22.2

$203.27

$198.2 (1) includes intracompany sales of gas to the electric department far use in generating electricity in years 1970.1969,1968,1965,1962,1961, a nd 1960.

l~7 1966 1965 1964 1963 1962 1%1 1960

( 7 138,339

$ 97,033,110 $ 92,266,607

$ 89,427,891

$ 85,334,132

$ 82,884,470

$ 79,727,171

$ 76,207,206

(

(073,608 60,286,010 55,636,401 52,431,943 48,849,529 46,237,915 43,291,862 40,338,087

'd387,765 84,042,956 77,918,003 70,290,252 65,182,252 60,682.708 54,718,983 55,054,612 4,497,443 4,143,604 _ 3,883,767 3,666,062 3,453,244 3,343,702 3,145,774 2,930,291

$256,097,155

$245,505,680 $229,704,778

$215,816,148

$202,819,157

$193,148,795

$180,883,790

$174,530,1%

5,515,600 4,061,741 2, % 2,550 4,662,499 4,412,239 4,116,623 3,845,597 4,187,933 3,740,699 3,298,695 2,956,622

$266,275,254

$253,999,660 $236,783.951

$219,661,745

$207,007,090

$1%,889,494

$184,182,485

$177,486,818 3,810,747 3,833,919 3,207,492 2,076,904 2.195,808 1,967,867 2.216.942 2,081,611

$270,086,001

$257,833.579 $239,991,443

$221,738,649

$209.202,898

$198,857,361

$186,399,427

$179,568,429 4,677,682 4.394.426 4,051,505 3,839,862 3.647,764 3,530,776 3,376,511 3.205.406 3,053,439 2,826.722 2,539,873 2,340,920 2,143.567 2,000,412 1,838,741 1,690.660 7,496,857 7,353,814 6,643,212 5,797,370 5,299,805 4,846,180 4,180,726 4.279,984 181.586 171,802 159,324 149,239 141,795 141.747 136,533 127,815 15,409,564 14,746,764 13,393,914 12,127,391 11,232,931 10,519,115 9,532,511 9.303,665 932,307 723.239 526,283 406.721 404.006 375.790 334.983 370,657 328,777 278,252 249.637 16,74S.592 15.874,009 14.295.987 12.462,374 11,603,588 10.847.892 9.810,763 9.553,502 2,941,030 2,860,410 2,570,040 2,374,910 2,217,405 2,038,155 1,948,350 1,876,390 3,307,684 2.922,684 2,852,684 2,790,064 2,791,564 2,792,664 2.534,992 2.270.962 9,838 9,805 9,555 9,463 9,433 9,631 9,675 9,857 1,002,705 379,095 954,477 931,791 911,671 898,862 885,832 873,834 5,298 5,096 4,824 4,677 4,530 4,443 4,315 4,162 2.18c 2.21c 2.28c 2.33c 2.34c 2.35e 2.36e 2.38c

$115.69

$112.53

$109.87

$108.92

$105.96

$104.31

$101.89

$98.94

$117,697,394

$108,704,823 $ 99,775,009

$ 89,412,353

$ 81,997,119 $ 75,065,216

$ 63,601,515

$ 52,200,274 6,834,681 7,157,020 7,680,330 8,209,016 9,450,577 10.171,957 10.387,623 11.054.279 76,436,579 69,079.432 61,603,815 53,157,491 47,851,767 43,225,914 36,595,988 32,962,377 272,109 258,660 394,490 252,837 255.241 547,350 2,314,246 1,379,246 861,35/

443,072 680,446 533,070 462,579 1,157,305 1,632,008

$202,122,126

$185.643.007 $170,134,090

$151,564,767

$140,017,283

$130,167,742

$112.899.372

$ 93.228,184 3,760.300 3.284,803 2,187,199 2,214,744 2.098.281 1,227.856 1,755,927 1,541,265

$205.882.426

$188,927,810 $172,321,289

$153,779.511

$142,115,564 $131,395,598

$114,655,299

$100,769,449 115,315,155 106,199,355 97,565,207 86,516,602 79,332.269 72,941,582 64,303,774 53,760,032 4,592,474 4,733,021 5,094,559 5,428,669 6,405,305 6,845,467 7,241,954 8,187,652 l

115,096,882 104,281,134 92,737,550 78,035,901 69,076,501 62,013,406 52,797,012 48,853,317 i

363,134 345,884 794,297 329,956 320,268 1,290,972 6,611,019 3,709,408 2,222,554 997,531 1,617,358 1,239,896 1,034,768 2,519,009 3,785,446 237,590,199 216,556,925 197,808,971 171,551,024 156,169,111 145,610,436 130,953,759 118,295.855 8,525,693 (3,106,249) 327,920 9,748,391 5,322,355 7,305,514 5,872,391 10,283,514 11,325,387 9,875,156 7,175,045 3,891,118 6,354,454 3,857,019 2,338,405 6.855,227 257,44U79 223,325,832 205,311,936 185,190,533 167,845,920 156,772,969 139,164,555 135.434,596 1,488,000 1,477,302 1,275,076 1,077,722 1,140,880 982,434 843,543 821,362 h 764,903 734,947 697,011 659,151 621,112 590,633 562,897 539,474 V 604,124 569,353 526,788 483.963 438,298 400,668 361,335 321,909 198 194 194 188 191 193 189 184 102.07c 102.36c 10226e 103.35e 103.36e 102.91c 98.91c 97.10e

$201.69

$198.68

$198.02

$194.22

$196.95

$198.73

$187.01

$178.45

" NIJc'."*E.","mIM"a*#EEA $7N3"#Ec'!.EJ'U*$uN0lO*nN"Ty".".1 *"" """ ***d ** ** *****" """* 31

Company Directors C:mp:ny Officcra A H.AYMOND A H.AYM0ND Chairman of the Board of the Company Chairman of the Board, Chief Executive Officer Jackson, Michigan JAMES H. CAMPBELL ROBERT P. BRIGGS President, Chief Operating Officer Commissioner of Financialinstitutions, State of Michigan HARRY R. WALL Lansing, Mich,gan Senior Vice President, Electric Operations i

JAMES H. CAMPBELL JOHN B. SIMPSON Pres e t e Company Senior Vice President, Gas Operations and General Services y,

RUSSELL C. YOUNGDAHL E. NEWTON CUTLER, JR.

Senior Vice President, Generating Plant Engineering and Construction, Sen:or Vice President of First National City Bank Electric Construction, Personnel, Purchasing and Stores, New York, New York and Land and Right-of-Way LEE D. FERDEN BIRUM G. CAMPBELL Vice President, Marketing he arsr.s, Michigan W. ANSON HEDGEC0CK lEL M f Vice President, Divisions and Customer Service irman N the d nd Chief Executive Officer of The Wickes Corporation RALPH C. BRETTING Saginaw, Michigan Vice President, Personnel RICHARD M. GILLETT FLOYD C. FISHER President and Chief Executive Officer Vice President, General Services of Old Kent Bank and Trust Company WALTER R. BORIS Grand Rapids, Michigan Vice President, Finance JOHN F. GORDON W. JACK MOSLEY Director, General Motors Corporation Vice President, Bulk Power Rescurces Birmingham, Michigan E. ROMNEY WHEELER FRANK HAMILTON Vice President, Public Relations Former First Vice President of Bankers Trust Company JOHN W. KLUBERG New York New York "E '"

COLONEL JAMES A. MC DiVITT*

S.

r F rce, Manager of Apollo Spacecraft Program ce Pres de t a d General Counsel C. S. HARDING MOTT PAUL A. PERRY President and Trustee of the Charles Secretary Stewart Mott Foundation HERBERT J. PALMER Flint, Michigan Treasurer DONALD J. PORTER President of Porter-Hadley Company Divisions and Managers Grand Rapids, Michigan (Headquarters cities in parentheses)

LYLE C. ROLL Battle Creek Division (Battle Creek) GORDON W. HOWARD E"

tie eek, ichigan Bay City Division (Bay City) LOWELL L SHEPARD DR. E. GIFFORD UPJOHN Central Division (Alma) RALPH HAHN Director, The Upjohn Company Flint Division (Flint) J. LAURENCE GILLIE Kalamazoo, Michigan Grand Rapids Division (Grand Rapids) GORDON L CARSON d to the Jackson Division (Jackson) A. FRANK BREWER Bo r a ua I

Kalamazoo Division (Kalamazoo) ARTHUR H. LEE (To October 31,1970)

YllLLIAM A. HOLTGREIVE (From November 1,1970)

Lansing Division (Lansing) ROBERT H. LAWLOR, JR. (To September 30,1970)

CHARLES F. BROWN (From October 1,1970)

Macomb Division (East Detroit) GEORGE L MAYHEW Muskegon Division (Muskegon) C. THOMAS BAYLIS Northwest Division (Traverse City) B0B D. HILT (

Pontiac Division (Pontiac) CHARLES F. BROWN (To September 30,1970)

JOHN G. G0ENSE (From October 1,1970)

Saginaw Division (Saginaw) STANLEY M. JURRENS South Oakland Division (Royal Oak) WILFRED L WHITFIELD West Wayne Division (Livonia) JAMES P. THOMAS 32

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