ML19345E387
| ML19345E387 | |
| Person / Time | |
|---|---|
| Site: | Big Rock Point File:Consumers Energy icon.png |
| Issue date: | 02/15/1966 |
| From: | Kettner R CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.) |
| To: | |
| References | |
| NUDOCS 8101150830 | |
| Download: ML19345E387 (34) | |
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Our annual report is sent e y~'_
with the thought that it may be of interest.
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No acknowledgment is expected.
ROBERT E. KETTNER THlS DOCUMENT Coi1TA\\NS
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At the Company's gas entraction plant in St. Clair County, northeat t of Detroit. propane and butane are entracted fr. n natural gas produced in neartiy fields. A@acent to this plant, & new gs', Qartnent service center compressor station was cornpleted in 196L 1
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P. 2 Hl:HLl: HTS 1965-1964 CONSUMERS LETTER OF THE CHAIRMAN OF THE BOARD POWER w
p*3 AND THE PRESIDENT F
I COMPANY z
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l 1965 ANNUAL REPORT j 1965-A YEAR OF CONTINUED GROWTH O
P, 5 212 West Michigan Avenue Jrckson, Michigan 49201 99
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ELECTRIC SYSTEM MAP P.11 h.h
[l GAS SYSTEM MAP P.15
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P.17 1965 FINANCIAL REVIEW
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COMPANY OFFICERS K
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4 CORPORATE GOALS OF CONSUMERS POWER COMPANY i
x P.23 STATEMENT OF INCOME PP. 24,25 BALANCE SHEET Buuun m uuan kuumis summe STATEMENT OF RETAINED EARNINGS-AUDITORS' PP. 26, 27 OPINION-NOTES TO THE FINANCIAL STATEMENTS OUR COVER: CONSU..ERS POWER COMPANY IS A *2AJOR MICHIGAN ENERGY SUPPLIER. AS THE 5 'N REPRESENTS ENERGY,THE COMPANY'S SERVICES ARE SYMBOUZED BY AN ELECTRIC PP. 28,29 i
';j FINANCIAL
SUMMARY
, 1965-1955 UNE CREW AT WORK ON TRANSMISSION LINES IN FUNT AND A SHIPMENT OF NEW GAS PIPE t -
FOR CONSUVERS POWER BEING LOADED AT ITS POINT OF MANUFACTURE. THE COMPANY SERVES MORE THAN 1.3 M!LUON ELECT 9lC AND FLECTRIC AND GAS OPERATING COMPARISON, l
NATURAL GAS CUSTOMERS.
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{ l'[ COMPANY DIRECTORS-DIVISIONS AND MAN AGERS---TRANSFER AGENTS, AND P.32 REGISTRARS-NOTICE OF ANNUAL MEETING co mw,,n, w w. s.w, b+
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I Incr ase HIGHLIGHTS
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$239,992,000
$221,739,000 8.2 Electric revenue 172,321,000 153,779,000 12.1 Gas revenue.
Total operating revenue.
413,250,000 376,400,000 9.8 43,023,000 38,329,000 12.2 Cost of fuel used in electric and steam heating operations Cost of natural gas sold.
74,385,000 65,340,000 13.8 80,000,000 74,700,000 7.1 Total payroll including cor struction 79,237,003 73,359,000 8.0 Taxes Earnings available to common stock 58,268,000 50,384,000 15.6 l
-2.83 2.48 14.1 Earnings per share of common stock-average..
L-2.83 2.46 15.0 Earnings per share o' common stock-end of year z
1.775 1.60 10.9
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Dividends paid per share on common stock..
f Shares of common stock outstanding-end of year.
20,568s000 20,460,000
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Cost of plant additions and improvements........
$109,858,000
$71,513,000 53.6
't L 14,295,987,000 12,462,374,000 14.7
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Kilowatt. hour sales.
2,570,000 2,375,000 8.2
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Peak load-kilowatts
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Electric generating capacity, December 31 (kilowatts)....
2,853,000 2,790,000 2.2 Gas sales (thousands of cubic feet)
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197,809,000 171,551,000 15.3 I
1,275,000 1,078,000 18.3 Maximum 24-hour natural gas sendcut (thousands of cubic feet) oi
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TO OUR SHARE OWNERS:
We are pleased to present the 1965 Annual Report of Consu ners Potter Company. It is a report that rejects increased earnings, increased dividends, and continued groteth in both the electric and natitral gas operations cf the Company.
Ein 1965, the Company invested more than $109,858,000 in expansion and improvement of the electric and gas systems and general service facilities. It is anticipated the expenditures in 196G for these purposes still total $134,000,000.
E Annual operating revenue totaled $413,950,000 in 1965, an increase of 107c over 1964, and carninge advancedfrom $2.48 to $2.83 per share on the average number of common shares outstanding. Dicidends paid on common stock stere $137% in 1965, as compared to $1.60 in 1964. In December a dividend tras declared increasing the quarterly rate to 47%f per share.
EDuring the year studies stere made as to the type of nete electric generating unit that should be installed to meet anticipated needs in 1970 and thereafter. This Ivd to a decision in December to construct a major n uclear potccr plant, on the shore of IAke Michigan, e} oui 35 miles trest of Kalamazoo. The unit, the largest ever to be installed by the Company. trill have an expected initial capacity of 710,000 kilotcatts. It is scheduled for commercial operation in the spring of 1970. By the time it is completed, the cost for its construction and its nuclear fuel intentory is expected to approximate $100 million.
EConsideratiar. is being given to interconnecting the potter pool formed by the interconnected Consumers Potter Company and The Detroit Ediscn Company eystems trith electric utilitles in Indiana, Ohio and Illinois, efective in approximatelyfour years. This interconnection still be of signifcont advantage in assuring reliable service and obtaining maximum practicable economics. The pool already benefts from ttro interconnections teith Ontario and a third is planned.
E Substantial expansion in the Company's capacityfor underground storage of natural gas s as achieved in 1965. At year-end, a nete contract tras signed seith Trunkline Gas Company providing for annual increazes in supplies for the next 5 years adequate to meet anticipated increases in customer requirements through 1970.
EIn revietting the year just past, it should be noted that the Company's achievements tcere made possible by 9,983 loyal, skilled, and dedicated employees. Their daily eforts assured the high standard of seum*ce en-joyed by the Company's customers. Their initiatire, imagination and resourceft.iness certainly still help Consumers Potter meet the challenges of tomorrott.
A ESincerely, WY-tK44)
February 15,1966 JAMES H. CAMPBELL
- h. H. ADIOND P#tSIDINT CMAIRM AN OF TMt BOARD 3
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s7 ~h;z e The Company's James H. Campbell Plant will be expanded to a total Erff. f ( bE E f. s E g.; \\ r; hD generating capacity of 650,000 kilowatts when a 385,00Milowatt he ' ',,,, ' ' N. ~ ag [p %3 pi e g 4;[3 Y.; ,T .,T F - second generating unit goes into commercLI operation in May of b 1967. This is the spindle for Unit No. 2, at the Westinghouse Plant I*sy . NMS:"?dQW M p Wl Nj70M $/ t .s Y 7 l In Philadelpnia where it was fabricated during 1965. 4 l l l 6
The Company's experience at Big system, particularly in relation to Rock Point has shown that a nuclear-emergency operations and the quick fueled plant can be applied to the start-up of generating equipment. electric system on a large scale, Consumerc Power Company and economically and efficiently. The Detroit Edison Company oper-ate their etr':tr!c systems as a power pool, mict wa's established in 1962. The power pooling agreement pro-vides for pooled operetion, coor-dination of planning, design and con-struction, the rendering of mutual as-Additional Generating Capacity sistance during emergencies and the effecting of the maximum practica! Construction progressed on a sec-economy in previding the electric ond electric generating unit at the power requirements of each system. James H. Campbell Plant, scheduled For many years prior to the establish-for commercial operation in May ment af the pool, the two companies' 1967.This unit ws! utilize a coal-fired etcetric systems had been intercon-Ga H*yj',87,o, boiler associated with a reheat steam nected at several points for purposes e o.c.e., si. im.ie turbine to generate 385,000 kilowatts of interchanging power and provid-of electric power, more than doubling ing additional reserve capacity for f, the plant's capacity. Including related each company. The two companie-transmission lines and substation fa-serve a population of eight milhon b R cilities, the investment required for people in the Lower Peninsula of 3 b.e this project will be $45,000,000. Michigan. Construction began on a 70,000- {" kilowatt electric generating facility p near Gaylord. This is needed to meet [ t anticipatad peaking and emergency ( power needs and is scheduled for N commercial operation in June of 1966. The unit consists of four oil-fired Michigan Power Resources Growing i turbine-generators. This type of fa-lfi' cility is extremely effective when Present generating capacity of the quick start-up is required to meet pool is 7,400,000 kilowatts, making 4 l7i increasing power demands. The Gay-Michigan a leading stato in electric t .f, lord peaking plant is so designed that power resources. Auditions which i j 3 ,j,j),, it may be moved to another location have been announced will bring the p.1 and/or converted to gas fuel in the total generating capasty of the pool 4 future, if changing requirements of to 10,200,000 Ulowatts in 1970. Tt.ese .u' f p ).f the system should me!e this desirable. Include the new Company units and
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ti! Meanwhile, the power interruption two Detroit Edison units of more than 6 i
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!li in the Northeast in November 1965 WJ,000 kilowatts each scheduled for "T W ij;- prompted a self-critical review of the commercial operation in 1967 and 't j Company's operating practices and 1968, one at Edison's Trenton Chan-l '1 I. system design. This rev;ew confirmed nel Plant and the other at its St. i that present safeguarda provide a Clair Plant. l g .j LL ik LdkA high degree of protection against The Detroit Edison Company and "w" "."d"d" la ge-scale outages. However, as ad-Consumers Power conduct a con-v hierruptinn of service, the 1966 Con-and of the needs of the areas served i DuRING THE TEN YEARS 1955-1965 h THE NUMBER oF CUSTOMERS struction Budget includes nearly in order to insure that all present l uswG sAs To HEAT THEIR HOMES I INCREASED $43.000, oR 187%. $500,000 to strengthen the *!ectric and future customer requirements 7
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l for electric power can be met. Among 2,750-horsepower jet engine-driven numerous precautions to preserve compressors adding to the Com-the integrity of service in the event pany's ability to deliver gas to its of an outage is the maintenance of largest single concentration of gas spinr'ng reserve in an amount equal customers, in the southeastern por-to the capability of the, 'rgest gener-tion of the service area. ating uait in operation, or the largest Additional pairs of jet engine-driv-ir.put of power from any other source. on compressors of similar capacity were installed at both the White Pigeon and Overisel ccmpressor sta-tions. At White Pigeon, near the In-diana Michigan line, the two new cl, //p$27,',$ compressors increased Company ,g,ayl,sa5ly ability to move gas received from H Gas Business, Facilities Expanded Trunkline Gas Company's interstate pipeline. At Overisel, nonhwest of E "lM The Company ended the year serv-Kalamazoo, the new equipment add- ? i
- ^*" " *' ws ing 697,000 gas customers, 37,600 cd capability to move gas in and out (inu.a
_UT more than at year-end 1964. Volume of the Overiset and Salem storage B 5 E '~ ,F sales of nat:.ral gas rose 15%. Dur-fields in thu western part of the state. j.. **" g_ ~ lng 1965, the number of customers The Company and its subsidiarj. using natural gas to heat their homes the Michigan Gas Storage Company, increased 9%, to a total of 526,000. built 76 milq of new gas transmis-l A record natural gas sendout oc-sion lines !,1965. One addition in-curred February 22,1965, when 1.28 volved 22 miles of 26-inch pipeline l billion cubic feet were delivered to between the new St. Clair compres-the Company's customers. This mark sor station and Rochester. Another l was exceeded or lanuary 27, 1966, involved 31 miles of 26-inch line be-j when a new record one-day send-tween St. Louis and Saginaw. These r out of 1.47 billion cubic feet was new linee increcsed the Company's E distributed to customers. ability to deliver gas to the substan-l Total system capability wac in-tial gas markets of suburban De-m- - - - -, - - 7 m-creased 12% during 1965. During the troit and the Saginaw-Bay City area, e "$N winter of 1965-1966, the Consumers respectively. "F. 'f Power gas system was prepared to meet a peak +y demand of at least -\\ . I,. 1.57 billion cubic feet. Volume deliveries of gas from the t Gulf Coast area were increased in IE 1965 by 18 billion cubic feet to 100 I i f billion cubic feet a year under the Gas Storage Capacity Enlarged contract with Trunkiine Gas Com-pany. In 1966, deliveries will be in-Sixteen new ; veil: were drilled a = 7 L creased by another 28 billion cubic evanding the deliverability of exist-feet snnually.To keep abreast of the ing underground gas storage fields. } I L growing market for natural gas, the The Lenox Field nonheast of Detroit total volume of gas being purchased was converted into a new storage k(iIL by the Company is being increased field. Total underground storage ca-EEgggg by 50% in the five-year period end-pacity of fields operated by Consum-STORAGE FIELos WERE THE ~ gan Gas Storage Company, at the new gas department service cen-source oF 69% OF THE gas Dis-TRiauTED oN THE PEAK DAY IN ter-Compressor station Was com-end of the year was 85.5 billion cubic VHE 1904-19C5 HE ATING sE ASoN. pIeted in the St. Clair area, with two feet. These large storage facilities 9
enable the Company on a cold winter 14% from 1964 which had been a day to serve about three time' as ruord-breaking year. many customers as would be pos-Service centers were added to sible if supplies were limited to daily increase efficiency and mect the pipeline deliveries. neede of expanding Company opera-To increase further its ur der-tions in the Kalamazoo and Macomb ground storage capacity, the Com-Divisions. Construction started on a pany purchased approximately 1,700 new service center in Manistee, in acres of land in M? comb County the Company's Northwest Division. northeast of Detroit encompassing the Ray natural gas field. It has de-s veloped into Michigan's largest gas producing field since the Company j acquired production rights in it in December,1962. In 1967 the Ray Field will become Weather Creehd Emergencies an operating r.;apr gas storage field. It will expand gas system deliver-Consumers Power Company arid ability substantially and increase the other leading utilities maintain a L'gh-Company's total gas storage capac-ly organized defense against envr- { lty by 30 billion cubic feet. Develop-genc',s. Reinforcing the capacity of g ment of the field for storage will each company to repair its onn sys-y include the construction of a new tem, utilities also provide for quick Ei.ctne n...no. inss-ms 11,ooo.norsepower compressor sts-mutual er stance in emergene.cs. In h tion there. 1965, Coe umers Power electric de-sw.u,0,,
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,f,( orma sr~4s j terparts in neighboring utilities dem-onstrated the value of such prepara-7 tion and cooperation. m cowvinem Twice in 1965, the Company sent men and vehicles into Illinois to aid y,,,, Other Developments =
- ;n uum The rapid progress of the electric CONSUMERS POWER COMPANY and gas departments in 1965 was ELECTRIO SYSTEM j ]a_
i accompanied by achievements in ,,, / / other areas [ There was a 5% increase in vol-Ewincs.%.Ar = / ume sales of steam supplied from Mear Plant SI / central plants to buildings in down-town business districts in Battle co.i.v.o pi-, u [ Creek, Grand Rapids, Kalama:oo E g P..km0 Pt.nt lll 5 and Saginaw. Total steam revenue c h was $937,000. w,o. pi.ni e The Company sells both electric ""** sonit.t.on A and gas appliances on its 76 retail c[- sales floors. Company appliance Tr.n.....on un.- m.m ven. k sala: are designed to promote en-hVMiY.. ergy sales by helping to lead an ac-T"*""***"""*-""*'***"' 'a ELECTRIC REVENUE ROSE FRoM throughout the service area. In 1965, $129 MiLuoN IN 1955 To $240 MIL-don IN 1965. AN 87% INCREASE Company sales of electric and gas oVER THE TEN-YEAR PERIOD appliances totaled $8,311,000, up common,t, s.n.o e, con.om... P:..< co. 10
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5 ('#T.. t r L (.N .y.. v,;../ ' W'y % r 4g' as y hr N(g'. 'f.;a R ' L &..,;u..m s,lr ;r c W A;, 7 "<"/ ~f. s .A a u @.-'. y. 4 's , 0 At the Dan E. Karn Plant, an employee studies pauges of a special y d [. t -"[1 e g l M p(V t ' . M 5 l i unit n..;talled when the Company cooperated in a manufacturer's test r fq fy 'f'*" 4 @,'% H C CJmed at improving the design of future steam generators. The Karn "M Plant has a total generating capacity of Sr.000 kilowatts. The Com-s; I,W 'i angs.>.$.g;n,; ua g4g,, ( ggepl.- pany's system nameplate generating c.apacity at year end 1965 was 2.c.f+4hy-4 pgly~'k, dl1P Ms. K i.g - ]4- ~ 2,853,000 kilowatts, and the total system demonstrated capability was Q '? 3,036,000 kilowatts. ,E w I = 12 ~.......
' ~. In restoring service following severe schedule and permit customer sav-storms. In turn, when violent torna ings of up to $750,000 annually, does wrought extensiva damage in Electric customers within the City Michigan on Palm Sunday, Common-of Pontiac received a rate reduction wealth Edison Company of Chicago in December amounting to $123,000 sent men to aid in restoring service, a year for re~sidential, commercial The Detroit Edison Company also and industrial users, sent men, just as Consumers Power Company gas and electric rate re-had sent emergency crews into De-ductions initiated in 1964 and 1965 troit Edison Company territory on will save customers more than earlier occasione. $6,700,000 annually. The reductions Following the Palm Sunday torna-give better value to customers, en-does, which damaged Company fa-courage increased use of services cilities and caused interruptions of and help attract new industrial and service to approximately 50,000 of commercial customers into the ser-the Company's customers, service vice area. was restored rapidly under adverse conditions. A major factor in the suc-cess of these emergency operations i in restoring customer services was the faithful performance of Consum-ers Power employees. Electronics for Service Conversion of additional data-han-dling operations to electrnnic com-puter processing was accomplished in 1965, and many comput3rized re-Rates Reduced Further search.ind operatirig studies were comple'.ed. The first Company com-With the approval of the Michigan puter was installed in 1958 solely Public Service Commission, the for accounting purposes, and was Company reduced electric and gas used in mechanizing customer bill-service rates during the year. Ing. E,y the end of 1965, only about The Company lowered its rates for 35% of the Data Processing Cen- . residential electric space heating ter's work load was related to ac-19% in January 1965, and also re-courting functions, and 65% to other duced rates for residential fast recov-Company work such as solving en-ery water heating and commercial gineering, rate sWysis and gas and and institutional service. Installation electric operating problems.The Data charges for underground ele tric ser-Processing Center now provides di-vice likewisa were reduced. rect service for some 25 different Revised rates went into effect in Company departments. July, reducing the cost of electricity in 1966 a new computer system to Company customers by approxi-will be installed which will be faster n.ately $3,000,000 a ycar. Residential and more flexible than any previously customers using more than 100 kilo-used by the Company. It will be watt-hours a month realized most of utilized in establishing a central cus-the saving. tomer information file in Jackson. Natural gas rates to certain com-With this central file, answers to mercial and industrial customers customer inquiries and services to were lowered in November to pro-customers will be expedited. vide a liberalized seasonal rate Other new uses of electronic 13 )
equipment are developing in the maceuticals, and wood, stone, glass areas of system monitoring and con-and clay products. Company cus-trol functior,s and in trouble-shooting tomers also include leading produc-and repair operations. During 1966 ers of petroleum, cement, limestone and 1967, a system will be Installed and rubber products, and numerous which will utilize a computer to pro-plants that process primary metals vide added security in gas system and fabricate riietal products. operations. Data from some 79 me The Company serves more than tering and compressor stations in the 81,000 farms. Michigan's agricultural gas system will be telemetered to a production is substantist. 'otaling computer at the gas control center in about one billion dollars annually. Jackson. The computer will analyze Consumers Power servm. commu-the data, detect any irregularities in nities having among them n. ore than gas operations and alert an operator 30 colleges and universities. Michi-so that necessary corrections can be gan's institutions of higher education made as required. All such stations include three of the largest in the will be scanned about once every nation. The many shops and labora-two minutes. In addition to strength-tories of the growing research end ening gas operations, this new data development complex within the processing system will make valu-state augment the excellent resear n able information readil/ available for capabilities of Michigan schools. future engineering studies. The Company serves a large por-tion of the state's year-round resort and recreational business, which generates nearly one billion dollars in annual revenue from sales cf h goods and services. Serving an Expanding Economy c.. n...no. iess-ioes bj pll= Throughout the year, the economy \\ of the serv;ce area continued its rap-CONSUMERS POWER COMPANY = ' ""in swnces id growth and high employment con-NATURAL GAS SYSTEM tinued into 1966, Michigan ranks high moustniat a=o couwi.e t ~~
- f among the 50 states in economic orne. isw.ri t o
productivity, with manufacturing in
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""""-C"'""*"" able agricultural output and tourist m and resort business. co unow en 9., cu sm ;. cc aw A/ The Company serves all major ele- """""#""**E**"#"'"" / g/ ments of the Michigan economy.This includes large segments of the na-com.,o.., si.e.on.-cc.nsees ro.e to A 2 f g> tion's pecesetting automobile and a /,,,,,,,, >/ automotive parts and equipment in- ' *"'"* " " * " 6S**# " ^ / [/ dustries, which enjoyed a fourth o m..on s..oao.<t., ct, e o straight year of booming production community s ned t y Consumm Pomer Co e as they set new records in 19S5. The Company serves t wide vari-sima.r ia.-c m e.nn.e co [ h o ,; _1 ety of other industrics, including ,.=wwww.mww. g,, cAs REVENut INCREASED 188% electrlCal equipment, furr',ture, proc-sto,.a. F ias-vems, c., sty ;e ce (N THE TEN. YEAR PERIOD 192-1965. RislNG FRoM 560 MituoN To essed and packaged fowds, machin-Q~ inemonn.ci.on..m om., co compe, sin MILUoN. ery, home appliances, paper, phar-14
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j f ?qt g R -jf G sn f. s w ,n m bh.MJ & gQ3$_k f W2 % ? ' c l l An operator examines the exciter of turbine generator Unit No.1 during a thorough routine inspect on l at the James H. Campbell Plant. The unit has a capa:ity of 205,000 kilowattr.the largest size l presently in service at Company plants. The size of electric generstmg units continues toincrease rapidly, in 1967,the Company will put a 385.000. kilowatt unit into operation and in 1970, another unit 16 win go into operation witn an expected initial capacity of 710,000 kiiewa+ts. l I l l l
1965 Revenues and Earnings increased gas purchased from 1952 to 1958. It is expected, following Michigan Public FIN ANCI AL Gross operating revenue in 1965 was Service Commission proceedings in RE M $413,250,000, up $36,850,000 or 10% 1966, that Consumers Power will be over 1964. Electric revenue increased permitted to retain approximately 8%, to $239,992,000 and gas reva- $1,900,000 of the total refund applica-nue rose 12%, to $172,321,000. Sie to gas price increases which Steam heating revenue enounted to have been absorbed by the Com- $937,000, up 6%. pany, including interest. The remain-Net income was $61,882,000, com-der of the refund, along with approxi-pared to $54,0i3,000 in 1964. Earn-mately $180,000 in refur'ds received ings available to common stock earlier,is expected to bt returned to amounted to $58,268,000, equal to customers in 1966. $2.83 per share on the average num-ber of common shares outstanding Taxes and Payroll Enlarged during the year. Comparable figures for 1964 were $50,384,000 and $2.48 Federal, state and locz.! ta> ts on co-on stoo. o.n.3 per share. On common shares out-Company operations in 1965 were n ts.m s w. e u s standing at the year-end, earnings $79,237,000, an increase of $5,878,000 were $2.83 per share in 1965, $2.46 over tota! taxes of $73,359.000 in
- """h in 1964.
1964. These taxes accounted for 194 Common stock dividends amount-of every dollar received by the Com-noucims i m. ux ed to $1.77% per share in 1965. They pany from its customers. The Com-were paid at the rate of 42%4 per pany also collected $10,901:000 from share on February 20, and 454 per its customers for the State in Mich-mu u,,.. u.x share on May 20, August 20 and No-Igan sales tax. vember 20. Total dividends on com-it is significcnt to note that de- > P~ mon stock during the year amounted creases in the Federal corporate in-to $37,540,000. In December, the come tax rate effected in 1964 and f quarterly dividend payable on Feb-1965 are being c8fset in part by in-ruary 21,1966 was declared in the creases in Social Security taxes amount of 47%4 per share. Dividends which climb sharply for 1966 and will paid on preferred stock in 1965 continue to rise. totaled $3,614,000. The 1965 payroll was $80,000.000. This totaled $5,300,000 more than in y~ Coal and Natural Gas Costs the year before and reflects higher rates of pay, more overtime work and The Company purchased more coal a larger work force. Wages and em-to produce additional electric energy ployee benefits were increased on and more gas to supply additional March 1,1965. For Operating, Con-customer requirements. Total fuel struction and Maintenance employ-
==a=owow=. ,,3 cost in electric and central steam ees, the increases conformed to the service operations was $43,023,000, two-year Agreement of February 29. a 12% increase. The cost of gas 1964, with the Union which repre-sold to customers was $74,385,000, sents them. Total employees num-14% above 1964. bered 9,983 at year-end 1965, as Refunds amounting to slightly compared to 9,752 one year earlier. JotNT ACCOUNTS. oFTEN Hus. more than $3,000,000, including in-aANo AND wire FORM THE LARG. terest, Were received iate in the year Financing Developments EsT CATEGORY oF COMMON from one of the Company's principal g s suppI ers in settlement of certain The Company called for redemp-HALF o ALL mon sT rate Cases flied earlier. These re-tion on March 31,1965, its 4%% con-HOLDERS UVE IN THE COMPANY's funds Covered exCoss charges for vertible debentures due 1975 at a re-SERVICE AREA. 1 17
INCEME demption prica cf $101 plus accruid c:nt;mplit;d during 1966, but addi-EOLLAR 1965 interest. On that date, $182.900 prin-tional mortgage debt financing will cipal amount of the debentures were be necessary. redeemed. During 1965, $2.696,700 of the debentures were converted in-Regulatory Matters to common stock through surrender of $100 principal amount of deben-The 4 fera1 Power Commission tures and $20 in cash for each four in July W initiated an investigation common shares. Cash payments to of Consumers Power Company and the Company amounted to $539.343 The Detroit Edison Company to de-On October 1, $4,812,000 principa' termine whether they are subject to amount of the Company's first mort-the jurisdiction of that Commission gage bonds. 4%% series due 1987, on the ground that they own or op-were redeemed by sinking fund op-eete facilities for the interstate eration at 100.55% of the principal transmission and sale for resale of amount and accrued interest to the electt energy.The claim of jurisdic-date of redemption. As authorized at tion is based on tne fact that Con-the Annual Meeting in Aoril 1965. cumers Power Company is inter-4,000 previously purchased shart:s of connected with The Detroit Edison the $4.52 preferred stock were re-Company, which has electric lines tired in accordance with the purchase that connect with the system of The funo pavisions relating to this pre-Hydro. Electric Power Commission of ferred stock. Ontario. The Canadian system is in-No new common stock issut. is terconnected with electric systems in the State of New York. Preliminary hearings were held in 1965 in connec-tion with the investigation and further 5 hearings are scheduled in 1966. RECEIVED FROM Licenses from the Federal Power Commission are required for hydro-i' Amount /4 Electricity for Homes and Farms.. 22.2d electric plants on navigable streams. [#([,g/ Electric Power for industry...... 18.7 In 1956, the Federal Power Commis-h Commercial and Other Electric Sales 16.0 sior, adopted a policy which did not / [J y, Residential Gas Customers: require an application for a license e e j Using Gas for Home Heating.. 24.0 '/ Not Using Gas for Home Heating.... 1.8 until the navigability of.he strearn M industrial, Commercial and Other Gas Sales 15.1 had be6n determined. In 1962, a new pu . $'/ Other Sources 2.2 policy was adopted and the Com-g/ Total................. 100.0d mission called upon the Company and a number of other owners and operators of hydroelectric plants to USED FOR advise it regarding their plans to ap-ply for licenses for their hydroelec-staHabs. hak, b Wages and Salaries including Pensions. 6 Company applied for licenses for a [ ~:'. Taxes 19.1 Cost of Natural Gas Sold 17.9 qumber of its hydroelectric develop- , gl'[M, d[ e J' M, Fuel Burned, Electric.......... 10.3 ments which have long-range eco-I Electricity Purchased 1.5 nomic attraction. A relatively small + 3 Other Materisis, Supplies and Expenses. 7.1 portion of the Company's electric erest orbor owe ne.. l.. ; ; energy is generated at hydroelectric (\\ "k ~ ' Dividends on Preferred Stock...... .9 power plants. \\ 8.6 Federal Power Commission li- .W Sividends on Conimon Stock e e,/ stained Earnings invested in Business 5.0 censes are not granted for more than ~ ' Total................. 100.0d 50 years. For existing plants. they usually date back to 1943, the year in i 18
which, cceerd:ng t3 th) Commission, tha c: sis. Fin:1 disposition cf th;sa the present concept o' navigability cases occurred early in 1965. These j became settled. Upon the granting suits involved overcharges on vari-and acceptance of a license, the li-ous types of electrical equipment j censee becomes subject to the juris-purchased by the Company. The set-diction of the Commission for cer-tiements resulted in agreements to tain purposes, including the Com-pay Consumers 9ower Company mission's regulations with respect more than $4,906.000, including re-to financial accounting. Upon expira-imbursement of substantial litigation tion of the license, the Commission costs. A few suits involving relatively has authority to issue a new license minor portions of alleged. over-to the original licensee or to another charges for such purchases were still applicant, or the Federal government pending at year end. may take over the plant, paying the licensee sevcrance damages ard the Changes in Directors, Officers and amount of net Investment. In Jan-Diviston Managers uary 1966 the Commission entered an order issuing a license covering the During the year, the Company was Company's Foote Hydroelectric saddened by the death of Justin R. Plant. At the time of this report, the Whiting, long. time director and form-Company has not accepted tN li-er chief executive officer of the Com-cense and has filed an application pany. Mr. Whiting's leadership and for a rehearing with regard to one of experience were key factors in the the licensing provisions. growth and progress of Consumers The Michigan Public Service Com-Power Company, mission in August 1965 concluded a The Company also suffered a dis-general investigation of its proposed tinct loss with the death of Don T. treatment of the investment tax credit McKone, prominent Michigan attor-under Section 2 of the Internal Rev-ney, whose skill and judgment served enus Act of 1962, as modified by the the Company well during his years as Act of 1964. The Commission deter-a director. mined that it is more appropriate to The resignations from the board of write off the investrtent tax credits to Edwin Thorne and Robert L. Hoguet, income over the useful lives of the Jr., were accepted with sincere re-assets giving rise to the credito, but gret. They contributed much during the Commission also authorized the their service to Consumers Power. .immediate write-off of the credit to Four new directors were elected. income in the year in whlch it is ap-They are E. Newton Cutler, Jr., of plied to reduce the income tax liabil-New York, a senior vice president of ity otherwise payable. Thereafter, First National City Bank; John F. Gor-court proceedings were instituted by don, of Bloomheld Hills, Michigan, an intervenor to review the determi-former president and presertly a di-nation of the Commiss'on and in late rector of General Motors Corpora-1965 such court proceedings were tion; C. S. Harding Mott, of Flint, dismissed by the court having juris-Michigan, president and trustee of diction.The intervenor is seeking fur-the Charles Stewart Mott Founda-ther judicial review, tion and Dr. E. Gifford Upjohn, of Kalamazoo, Michigan, chairman of Lawsuits Were Settled the board of The Upjohn Company. Walter C. Schmidt was elected Major suits filed in 1961 and 1962 senior vice president in January, against a number of electrical equip-1966. He had been a vice president ment manufacturers resulted in satis-since May,1960. factory offers of settlement in most of W. Anson Hedgecock and Ralph C. 19
COMPANY OFFICERS l li;. ;; p.r.,. O ,ssf. 1.,, ~ t gr, [.L - ". g. *.}{ t p a a,fJ i-L W> r. F 4 _Ci4 M _i ,> ~ j g gr 43 M 'I r '}[ . k. a. .g 4 ~,.f ' AA id fhh N .ll, h f. k - f .,pr jy _ _- ~ ? F y / _yfll,~ak-y;'l > ' - Te O-((~+ ~\\ ~ a g,, O.M AYWOND JAMEb M C AMPBELL RoSERT P. SRiGGS W ALTER C. sCMW:DT A. H. AYMOND, Chairrnan of the Board Chief E>ecutne Officer JAMES H. CAMPBELL, Pie.ident Chief Operatie g Oftcer AOBERT P. BRIGGS, Executive Vice President Corporate Affair *, Finance cnd Buildings WALTER C. SCHMIDT, Senior Vice President Electric and General Engineering, Construction, Purchasing H ARRY R. WALL, Vice P'esident Electric Operations JOHN B. SIMPSON, Vice President Gas Operations ~ '~ F BIRUM G. CAMPBELL, Vice President ,Q' .m.-
- Marketin, q -
" 'id ,I JOHN W. KLUBERG, Vice Paesident and Controller Accounting and Rates g -- *9- -l
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? ' ROBERT D. ALLEN, Vice President Operations Research, Land a-d Right-of Way,
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j \\ ,- a,. A (,w. Computer Center, General Services -A g, N i W. ANSON HEDGECOCK, Vice President
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.. ig Q (; -ft Q ww s a.y Divisions and Customer Services / T f; - e RALPH C. BRETTING, Vice President N3.i'" M. I iiFOplj% .s y k.
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,l Personnel ,Mvg% WM s.: p + s, i g,[;l gir ygp ypp WALTER R. BORIS, Secretary y-W) M A 6:V"r.1" u.n 4
- HERBERT J. PALMER, Treasurer
..e,. i y-3 - N Q>[-$. 4 H AROLD P. GRAVES, General Counsel J. 9 ROBERT E. KETTNER. Assi'.' ant to the President RALPM C. SRETTING W ALTER R. BoRi$ l l 20
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^* Y,f N,.7 I y hF'J q, j. ~ l G .Y. ?,.,g{ . { %,, g. & {., lg a -Og x "Q i ~r 'fh% ,C h Q. $ bddi M5Ng A@n)g,, 'h e- %~K. v1g% + 4 nEi. n,, q '..M n,,,,+1A, .q ,;,pe== .3 Ye:N' 9 fhs*m ye.;.glff;& s;{g?? !' ? R 4W g.j s5 JoW'@g; k*Y y S k ' e . g. g y,, 3q. 3,, y, w n a,-e y.w @,. d u Y,; JOMN W. RLUSERG ROBERT D. ALLEN W. ANSON HEDGECOCR l- ~..,, ('1 Y ,b 'y, v&, 9 l' 1 e 7,lq' ,. c3 m' w' '( ;L l' < ' ( A-Y? w':.' kllt. f,8. a - .) r 4 } s (.... ,1 a;*f*lj k b .ll 4}) r,; f~ Y 1 ' ;,(?,,f s+, 4 G, '9,4 l he, &[4'1ct,k 3'1 P.', .,g,%.. ' g ' rg ' "- - Q" ' t" e l !jp W:aM, yD l d iyQ ' A *~..:$.ff.gA;?O,- f i, MQQ i + npn
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21
Br;ttirig wers cl;ct;d vic3 pr;si-1966 Stockhild:r Meetings dents in April 1965. Mr. Hedgecock, who is responsible for Divisions Regional meetings for stockholders and Customer Services, succeeded werS held in April 1965 in 11 service Claude A. Mulligan, who retired in area cities. This was the seventeenth 1964. Mr. Bretting, who is in charge of consecutive yeer in which regional Personnel, succeeded H. Stanley meetings were conducted. The 1965 Richmond, who also retired in 1964, attendance was approximately 6.000. At the end of 1965, William R. Regional meetings in 1966 will be Carlyon, Lansing Division Manager, held as follows: r; tired after 40 years. On January 31, Jackson, Ap ll 12 1966, Frank B. Adams, Jackson Di-Alma, April 13 . vision Manager, retired after 42 Lansing, April 14 years. Both r.ien rendered outstand-Royal Oak, April 18 ing service to the Company. Flint, April 19 Saginaw, April 20 The Stockholder Family Bay City, April 21 Battle Creek, April 25 Consumers Power common stock Kalamazoo, April 26 was registered in 75,682 names at Grand Rapids, April 21 year-end 1065, 3,300 more than oru Muskegon Heights, As til 28 year earlier. Preferred stock was held in 15,238 names. Of all registrations. The 1956 regional n eetings wl!I be-more than half are accounted for by gin at 8 p.m. Stockhciders are urged stockholders who live in the Com-to attend a regional meeting !f they pany's service area. Company stock cannot attend the annual meeting of is owned by residents of all 50 states the Company in Jackson, April 12 at and 26 foreign countries. 2 p.m. \\ ? 4 CORPORATE GOALS OF CONSUMERS POWER COMPANY What are the Corporate Goals of Consumers Power Company? They can be stated quite simply. They are:
- 1. To maintain the highest possible standards of service, reliability and integrity.
- 2. To serve customers at the lowest possible rates consistent with good management and a fair return to shareholders.
- 3. To meet the expanding needs of the Company's service area by well-planned and continuing investrrent in plant and faciBMs.
l
- 4. To merit the loyalty of employees t;y maintaining fair wages and bene-fits, good working conditions, and an abiding concern for individual dignity and equal opportunity.
i
- 5. To encourage public understanding of the free enterprise system and the importance of investments and profits in meeting Company obli-gations to 1,350,000 customers and the communities in which they live.
l
- 6. To participate in the civic, cultural and economic development of the state and the communities served.
22
F STATEMENT Or INCOME C onsumers Power Company Post TMt YEARS D,oto Otetmasta et tems ANO sene Year Ended December 31 U I g OPERATING REVENUE: Electric $239.991,443 $221,738,649 Gas. 172,321,289 153,Tiv,511 Steam heating 937,113 882,056 Total operating revenue .........!$413,249,845 $376,400,218 OPERATING EXPENSES AND TAXEC-Operation-Purchased and interchanged power. l $ 6,095,535 $ 5,030,072 Fuel consumed in electric and steam heating operations 43,023.118 38,328,885 Cost of gas sold. 74,385,066 65,339,705 73,812,741 68,400.421 Other ! $197,316,460 $177,099,083 Total operation 19,891,926 18,950,168 Maintenance Depreciation and araortization. 39,372,792 36,905,681 23,055,001 21,199.959 General taxes 47,406,213 43,299.441 Federal income taxes.. 6,190,110 6,920,315 Provision for deferred Federal Income taxes Charge equiva'ent to investment tax credit, net of amortization 2,585.234 1,939,263 (see Note 2) Total operating expenses and taxes $335,817,736 $306,313,910 Net operating income. ,5 77,432,109 $ 70,065,308 I ',006,875 OTHER INCOME: Dividends from Michigan Gas Storage Company '1 973,125 l 1,605,639 780,418 Other. f $ 80,044,623 $ 71,839,851 Gross income lNCOME DEDUCTIONS: l interest on long-term debt $ 18,159,326 $ 17.336,742 Interest on notes payable. 224,302 465,598 I 635,545' 365,927* Interest charged to construction-credit' 41G11 390,239 a Other $ 18,1$2,394 $ 17,826,702 Totalincome deductions... Net income. ' $ 61,882,229 $ 54,013.149 F 3,614,036 3,629,259 DIVIDENDS ON PREFERRED STOCK. Net income after dividends on preferred stock. $ 58,268,'93 $ 50,383,890 EARNINGS PER SHARE OF COMMON STOCK C BASED ON SHARES OUTSTAND!.NS: L $2.83 $2.48 Average during year.. $2.83 $2.46 At end of year. TFe accompanying ne,tes are en integral pa't of thle statement. t 23 L-
CALANCE SHEET at December 31,1965 cnd 1964 I Decernber 31 ,Y f ASSETS UTILITY PLANT: At original cost-E lectri c................... l$ 974,743,141 $ 941,123,962 Gas........................... L 471,673,4G9 409,433,005 Steam heating...................... 3,861,438 3,661.237 Common to all departments................ - 31,697,132 29,646,174 4,1,481,980,180 $1,383,864,378 Lass-Provision for accrued dapreciation 330,308,291 302,318,437 $1,151,671,889 $1,081,015,971 Cost in addition to original cost,in process of amortization.. 270,652 338,944
- $1,151,942,541
$1,081,EI84,915 8,636,803 7,044,622 OTHER PHYSICAL At cost or less............ 1,094,794 1,027,993 PROPERTY: Less-Provision for accrued depreciation and depletion.. 7,542,009 6,516,624 INVESTMENTS: Investmentin common stock of Michigan Gas Storage Company, I at cost (75% stock interest) r$ 11,250,000 $ 11,250,000 Other, at cost or less.................... t 2,055,430 2,735,897 k$ 13,305,430 $ 13,985,897 k 7,884,350 7,771,696 CURRENT ASSETS: Cash Temporary investments, at cost............... 5,813,783 Accounts ceceivable-Customers, less reserves................. 29,899,856 29,159,674 1,399,844 2,440,252 Other Materials and supplies, at average cost............ 28,033,062 24,961,690 l Gas in underground storage, at average cost......... 9,293,096 17,275,621 l Cther 10,795,920 9,166,836 '16 93,119,911 $ 90,770,769 p. DEFERRED DEBITS: Portion of cost of nuclear plant, in process of amortization W 6,962,044 7,774,044 Oth e r........................... 571,894 550,819 7,533,938 8A24,863 $1,273.443,829 $1,201,589,0_68 The accompanying potu are an integral part of tMe '_;tatement. e V r. 24 1 [ k- ._g
i Consumers Power Company i 1 e i o.e.,s., e rv 1 LI ABILITIES CAPITALIZATION: Capital stock (without par value) and retained earnings-- I Common stock-euthorized 25,000,000 shares-t outstanding 20,567,560 shares anc' 20,459,692 shares, $ 317,187,208 $ 313,942,184 .espectively Retained earning ~, of which $6,055,035 (ec 24I to $7.50 per ( share of praferred stock)is not avaitable for payment of cash dividends on common stock 154,723,787 133,995,877 $ 471,910,995 $ 447,938,061 2,934,711 2,915,301 Less-Capital stock expense $ 468,976,284 $ 445,022,760 Preferred stock, cumulative-authorized 1,500,000 shares, e ntitle d in involu ntary liq uidation to $100 per share (see N oto) ( 80,764,100 81,164,860 fotal capital stock and retained earnings....... ! $ 549,740,384 $ 526,187.620 Long term debt (see Note 4). 478,657,000 486.591,691 Total capitalization.... $1,028,397,384 $1,012,779,31 CURRENT LIA31LITIES: Current sinking fund requirement on first mortgage tends.. ;$ 4,838,000 4,838,000 Notes payable.. .....[ 27,500,000 800,000 Accounts payable. 41,276,680 30,131733 Dividends declared on capital stock............. l 10,670,168 9,595,338 Accrued taxes.... 50,780,566 46,601,054 Accrued interest...................... 5 # 46,824 5 932.606 _ ' d85,201 Other 10,726,871
- $ 151,639,109
$ 105,693,932 DEFERRED CREDITS: Investment tax credit (see Note 2).............. 8,694,700 6,101,128 Premie n less expenses on outstanding long term debt, In process of amortization................. j 549,915 575,124 Customers' advances for construction and other....... L 1,420,427 1,203,555 l$ 10,665,042 7,879,807 i e RESERVES: Deferred Federal income taxes....... 69,693,960 $ 63,503,850 1,989,461 1,933,652 Other.... 5 71,683,421 $ 65,437,502 OTHER: Contributions in Aid of Construction...... 11,058,873 9,797,516 l$1,273,443,829 $1.201,588,068 ? I
- n..ee me.nsno ne..
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l Consumers Power Company Year Ended December 31 STATEMENT OF g i RETAINED g EARNI($GS ror th. Years ended o.c.ms.r si, sees ena see4 h PETAINED EARNINGS-Beginning of year...... l $133,c95,877 $117,221,191 I ADD-Net income after dividends on preferred st.6...... 58,268,193 50,383,890 ' $192,264,070 $167.605,081 DEDUCT: Cash dividends o : common stock declared in the amount of $1.65 per share in 1964, and at quarterly rate of 5.45 in the first three quarters of 1965 and at quarterly rate of $.475 in fourth quarter of 1965 (paid $1.60 per share in 19Gt and $1.775 per share in 1965). 37,54'.283 33h>9,204 RETAINED EARNINGS-2nd of year (see balance sheet) t $154,723,787 $133.995,877 The accompanykJ notes are en integret part of thle statement, t Arcuus Axornsen & Co. D ET ROIT. MICHIGAN To the Board of Directors, Conse ars Power Company: We have examined the balance sheet of CONSUMERS POWER COMPANY (, *4aine corporation) as of December 31,1965, and the related statements of 5.come and retained earnings for the year then ended. Our examination v ss made in accordance with generally accepted auditing standards, and accord. ingly included such tests of the accounting records and such other at.ditir.) procedures as we considered necessary n, the circumstances. If our opinion, the accoinpanying balance sheet and statements of income ' 5' and retained earnings present fairly the financial position of Consurners Power Company as of December 31,1955, and the results of its operatione lar l the year ' hen ended,in conformity with generally accepted accounting prin-ciples applied on a basis consistent with that of the precedmg year. t I N f Detroit, Michigan, January 31,1966. 9 1 26 s y %*e
NOTES TO THE (1) Capit:I cxpenditur;s for property cdditions during 1906 cr3 pr;sently csti-m;t-d to toint $134,000,000 tnd subst;nti;l commitments for th) purchas3 r/IN AN Cl Al. of construction materials have been made in connection ther;with. STATEM ENTS (2) The Internal Revenue Code provides for a credit against Federal income taxes currently payable equal to specified percentages of certain piant addi-tions. in 6%cordance with an order of the Michigan Public Service 3mmis-sion dated August 5,1965, which is subject to possible review in the courts on petition of an intervenor, the Company is charging operating expenses with an amount equivalent to the reduction in Federal income taxes cur. rently payable as a result of the investment tax credit. The contra' credit is included in a deferred creo;t account and is being amortized to operating expenses over the life cf the property giving rise to the investment tax credit. { oecemter 31 I f f
- 65 64 (3) Preferred stock is represented by:
$4.50 -547,788 hres outstanding............ ' $54,778,800 $54,778,800 $4.52 -163,550 shares outstanding, less 4,000 shares purchesed in 6 15,955,000 16,355,000 1965 fct retirement $4.16-100.000 shares outstanding. 10,000,000 10,000,000 Famium on preferred stock.............. 30,300 31,060 $80,764,100 $81,164,650 Total preferred stock } 0,c mber at (4) Long term debt is represented by-f f S5 64 First Mortgage Bonds-L 2%% Series due 1975. 4 109,024,000 $109,024,000 7 %% Series due 1977............ 24,775,000 24,775,000 39,700,000 39,700,000 3X% Series due 1981
- 24,750,000 24,750,000 3% Series due 1984...
4% Series due 1986................ 40,000,000 40,000,000 25,000,000 25,000,000 3X% Series due 1987................. 246,000 5,058,000 4%% Series due 1987..... b 4X% Series due 1988......... d 2,000,000 40,000,000 4%% Series due 1989................ 35,000,000 35,000,000 30,000,000 30,000,000 3%% Series due 1990....... 4%% Series due 1990................ 35,000,000 35,000,000 40,000,000 40,000,000 4%% Series due 1991................. ,$443,495,000 $448,307,000 Deduct-Current sinking fund requirement included in t j current liabilities................... I 4,838.000 4,838,000 Total First Mortgage Bonds.......... $438,657,000 $443,469,000 4 40,000,000 40,000,000 Sinking Fund Debentures.4%% due 1994 2,879,600 Convertible Debentures,4%%............. P 243,091 Notes,4%, due 1966,..... [$478,657,000 $486.591.691 Totallong te n debt L 27
FINANCIAL
SUMMARY
1965-1955 t I y l 1 STATEMENT OF INCOME DATA 19s4 Operating Revenue............... t 413,249,845 $ 376,400,21t Operating Revenue Deductions, Except Taxes 256,581,178 232,954,92: Taxes Federal Income Tai............. 47,436,213 43,299,w Deferred FederalIncome Tax......... 6,190,110 6,923,3'l Investment tar credit............ 2,585,234 1,939,26: Other................... 23,055,001 21,199,95.: Net Operating income.............. 77,432.109 70,066,3M Other income i 2,612.514 1,753f 41 Income deductions 18,797,939 18,192,G. Interest Charged to Construction-Credit 635,545 365,92; Net income 61,882.229 54,013,14; Dividends On Preferred Stock............. ' 814,036 Sff9,2F On Common Stock... .....t 37,540,283 33,609.20-Earnings Retained............... 20,727.910 16,774,E Common Stock, Unadjusted. See Footnote (1) Average Shares Outstanding 20,555,589 20,330,01C Earnlogs per Share............. 2.83 2.4! Dividends Paid per Share.......... S 1.775 $ 1,6 Common Stock, Adjusted. See Footnote (1) Average Shares Outstanding 20.555,589 20,330,0M Earnings per Share... E 2.83 2.4! Interest Charged to Construction per Share.. .03 .0 BALANCE SHEET DATA [. Utilit y Plant.................. B1,482.250,832 $1,384,203,3r Accrued Depreciation..............
- 330.308,291 302,318,427 Plant Investment per Employee.........
148,477 141,940 Capitalization,See Footnote (2) Common Stock and Retained Earnings.... $. 468,976.284 4 445,022,76C p 80.764,100 81,164.86C Preferred Stock L478,657,000 486,591,691 l Long. Term Debt......... Total Capitalization.......... $1,020,397,384 $1,012,779.311 Capitalization Ratios--%, See Footnote (2) Common Stock and Retained Earnings.... L 45.6 431 Preferred Stock 7.9 8I Long-Term Debt......... 46.5 48.1 (1) Common Stock. Unadjusted, figures do not ref;ect any adjustments to previously toported r figures for the 5% stock dividend of December 19'5. or for the 2 for 1 stock spht in April i ( 1960. The Common Stock. Adjusted, figures refieet these adjustments. (2) Total Capitafiration and Common Stock and Retained Eamings data shown above for 1964 issues previous, reported as a d.d to refiect the deduction of expense portaining to stock and prior years have been restate 28 t.rre2 d.eit. ._:.r s
e 1963 1962 1961 1960 1959 1958 1957 1956 1955 0 352.262,467 $ 331,.'29,655 $ 302.056,401 $ 281,395.933 $ 257,525,425 $227,631,181 $221,461,837 $208,393,754 $189,374,955 l 220,071,186 206,499,817 189,100,637 179,967,924 158,097,255 142,469,775 137,0512S1 129,500,638 117,273,966
- 39,016,596 37,953,679 33,732,041 28,647,373 30,752,042 24,789,982 27,477,319 27,888,605 25,656,391 i
7,105,571 6,999,992 7,248,992 7,059,399 6,599,259 6.236,371 S,572,383 4,208,8 % 3,216,335 2,174,310 1,G66,029 19,868,033 17,343,455 16,922,249 15,433,274 12,944,658 11,893,682 10,593,205 9,223,420 7,947,168 64,026,771 60,466,693 55,052,482 50,287,963 49,132,211 42,241,371 40,767,679 37,572,283 35,281.100 1,894,011 1,488,877 1,590,088 1,704,170 1,747,760 1,565.710 1,491,462 1,131,545 1,517,492 18,569,918 18,681,151 18,113,572 16,118,$39 14,901,737 13,174,944 10,137,856 8,432,298 8,275,175 332,660 1,9 %,245 1.879,517 2,376,994 2,448,132 1,894,850 1,594,947 1,731,490 1,341,3M i 47,683,524 45,264,664 40,408,515 38,250,588 38,426,366 32,526,987 33,716,232 32,003,020 29,c44,801 s
- g 2,655,648 3,665,59S 3,683,453 3,698,259 3,717,765 3,742,243 3,756,570 3,778,551 3,543,937 30,260,152
?7,542,109 25,421,656 24,767,968 22,618,626 21,132,828 21,094,044 19,539,687 17,069,219 13,767,724 14,056,900 11,303,400 9,7M,361 12,089,975 7,651,916 8,865,618 9,634,782 9,251,645 1 .I 20,094,050 19,608,383 9,568,115 9,525,665 8,885,147 8,800,455 8,697,631 8,239,861 7,662,200 P,19 $ 2,12 $ 3.84 $ 3.63 $ 3.91 $ 3.27 $ 3.44 $ 3.43 $ 3.44 1,4 15 $ 1.40 $ 2.60 $ 2.60 $ 2.45 $ 2.40 $ 2.40 $ 2.20 $ 2.20 $a ! 20,094,050 19,608,383 19,136,230 19,051,330 17,770,294 17,600,910 17,395,262 16,479,722 16.021,954 2.19 $ 2.12 $ 1.92 $ 1.81 5 1.95 $ 1.64 $ 1,72 $ 1,71 $ 1.64 .02 $ ,10 $ .10 $ .12 $ .14 .11 .09 $ .11 .08 1
- t
.41,329,744,266 $1,284,320,741 $1,206,518,804 $ 1.123,245,187 $ 1,032,574,699 $931,873,349 $ 853,414,043 $758,360,576 $679,228,020 [ 273,316,827 245,831,001 219,227,665 193,273,276 173,118,255 150,069,325 132,972,735 120,390,331 109,328,075 136,608 131,833 121,80) 111,855 102,897 91,477 81,355 72,363 66,919 ( 421,5N,507 $ 394,398,888 $ 368,248,909 $ 347,904,226 $ 314,29758 $292,385,308 $ 283,277,467 $251,169,764 $241,493,535 81,565,619 81,966,379 82,367,138 82,767,898 83,138,658 83,569,418 83,970,177 84,371,148 84,771,696 f) 457.187,082 493,062,773 489,337,064 461,924,254 415,935,0C0 394,862,700 360,067.700 293,249.000 256,237,000
- $ 960,342.208 $ 969,428,040 3 939,953,111 $ 892,596,378 $ 813,400,696 $770,817,426 $ 727,315,344 $628,789,912 $58M02,231 ii 43.9 40.7 39.2 39.0 38.7 37,9 39.0 40.0 41.5 8.5 8.5 8.8 9.3 10.2 10.9 11.5 13.4 14.5 47.6 50.8 52.0 51.7 51,1 51.2 49.5 46.6 44.0 (3) Figures for years prior to 1963 have been restated where soplicable to reflect refunds received of the cost of purchesed gas and interest income related to such refunds and other miscellaneous adjustments, including the effect of aDphceble income tones.
(4) in December 1955.the Company issued to tts common stockholders e dividend of 5% in per the e o h 74 tot s are s a dv n f 5 7. 54 9 The ariount of this dividend is not reflected in the above figures.
ELECTRIC AND GAS OPERATING y9 m ew
- "t^55 o' COMPARISON 1965-1955 (DECRE A$t.1955 COMPARLD wiTH I
1964 1956 electric revenue Residential 6 92,266 607 3.2 76.0 $ 83,427,8 Commercial 55,636,401 6.1 101.4 52,431,9 .m Industrial... 77,918,003 - 10.9 76.2 70,290,2 Interdepartmental and Other ....l 10,%2,W0, 45.9 272.8 7,511,6 Total Electric Sales Revenue $236,783,951 7.8 86.1 $219,661.7 Miscellaneous Electric Revenue I 3,207,492 54.4 120.0 2,076,9 electric Total Electric Reverue....... $239,991,443 8.2 86.5 $221,739% electric sales Residential 4,051,505 5.5 80.5 3,839,e (1,000 kilowatt-hours) Commercial 2,539,873 8.5 142.4 2,340.9 6,643.212 14.6 75.6 5,797,3 Industrial........ t Interdepartmental and Other 1.061,397 119.2 527.0 4M,2 Total Electric Saies......... j 14,295,987 14,7 97.3 12,462,3 2,570,040 8.2 76.3 2,374,9 peak load Kilowatts. generating capacity Kilowatts.. l 2,852,684 2.2 83.1 2,7N.0 heat rate Stu of Fuel per Net Kilowatt. Hour Generated 9,555 1.0 (12.4) 9,4 954,477 2.4 21.2 931,7 electric customers End of Period. electric residential Annual Kilowatt. Hours Used 4,824 3.1 47.0 4% 2.28d (2.1) (2.6) 2.3 customer averages Revenue per Kilowatt Hour Used Annual Revenue $109.87 .9 43 3 $1Cd. 1 ...~ f gas revenue Residential Using Gas for Home Heating '$ 99,775,009 11.6 242.5 $ 89,412.3 7,680,330 (6.4) (28.7) 8.209.: Other 61,603,815 15.9 224.4 53.157,4 Industrial and Commercial. interdepartmental and Other (A) 1,074,936 36.8 730.6 7E5,9 Total Gas Sales Revenue $170,134,090 12.3 188.2 $151,59.7 g a *, Miscellaneous Gas Revenue 2,187,199 (1.2) 205.7 2,214,7 Total Gas Revenue.. '3172.321.289 12.1 188.4 $153,779.5 gas statistics Gas Sales (1,000 cubic feet) Residential 'i Using Gas for Home Heating 97,565,207 12.8 225.4 86,516f f 5,094,559 (6.2) (32.9) 5,43I Other l r 92,737,550 18.8 220.4 78,03;.9 industrial and Commercial interdepartmental and Other (A) [ 2.411,655 53.6 1,366.7 1.569.E Total Gas Sales.. l 197,800,971 15.3 196.6 171,551,C 327.920 (96.6) 9,74E3 Net to Storage Unbilled, Lost and Company Use 7,175,M5 84.4 160.2 3,891,1 I Total Gas Purchased and Produced. 205,311,936 10.9 195.6 185193,5 maximum 24-hour gas sendout (1,000 Cubic Feet)... 1,275,076 18.3 189.8 1,077,7 gas customers End of Period,.............. (97.011 5.7 63.3 659,1 526,788 8.8 187.1 483,9 residential customers Number-End of Period 194 3.2 7.8 1 using gas for home heating Average Annual Mef Used. Average kevenue per Mcf Used 102.26e (1.1) 5.2 103.3 Average Annual Revenue $19102 2.0 13.5 $194. (A) l includes intrecorrpeny sates of gas to the electric department for use in generating electncity in years 19th,1962.1961. and 190o. end substantial sates to another pubhc utility in 1962 and 1960. L.._=_
1963 1962 1961 1960 1959 1958 1957 1956 1955 $ 85,334,132 $ 82,884,470 $ 79,727,171 $ 76,207.206 $ 70,957,616 $ 64,314,868 $ 61,540,221 3 57,264,960 $ 62,427,172 ' [J 48,849,529 46,237,915 43,291,862 40,338,087 37,904,248 33,722,M3 32,017,441, 29,796,312 27,629,690 65,182,252 60,682,708 54,718,983 55,054.612 52,423,154 45,785,860 48,343,983 46,352,068 44,213,748 1 7,641,177 7,084,401 6,444,469 5,886,913 5,254,757 4,582,742 4,150,513 - 3,309,399 2,940,547 I207,007.090 $196,889,494 $184.182,485 $177,486,818 $166,539,775 $148,406.113 $146,052,158 $136,722,739 - 7127,21 *,1U 3 2,216,942 2,081,611 1,MS,647 1,756,798 1,735,556 1,707,543 1,457.848 2,1 %,806 1,967,867 $209,202,898 $198,857,361 $186,399,427 $179,568,429 $168,485,422 $150,162,911 $147,787,714 $138,430,282 $128,609,T;5 3,647,764 3,530,776 3,376,511 3,205,406 3,094,393 2,890,249 2,729,873 2,501,144 2,244,271 6 2,143,567 2,000,412 1,838,741 1,690,660 1,599,315 1 409,658 1,238,400 1,139,903 1 M7,657 & 5,299,805 4,B46,180 4.180,726 4,279,984 4,012,905 3,373 978 3,803,532 3,749,452 3,783.935 t 512,452 470,524 414,785 377,452 325,647 274,189 246,730 192,381 169,283 e 11,603,588 10,847,892 9,810,763 9,553,502 9,032,260 7,948,074 8,018,541 7,582,88f) 7,245,146 7 2,217,405 2,038,155 1,948,350 1,876,390 1,794,650 1,738,785 1,632,005 1,570,820 1,458,070 2.791.564 2,792,664 2,534,992 2.270,962 2,270,962 2,0M,938 1,848,688 1,712,888 1,553,118 9,433 9,631 9,675 9,857 9,912 9,896 10,423 10,799
- '908 911,671 898,862 885,832 873,854 858,457 843,276 827,888 810,875 787,662 4,530 4,443 4,315 4,162 4,096 3,905 3,761 3,536 3,282 2.34d 2.35d 2.36d 2.38d 2.29d 2,23d 2.25d 2.29d 2.346 i
$105.96 $1M.31 $101,89 $98.94 $93.92 $86.91 $84,79 $80.95 $76G $ 81,997,119 $ 75,065,216 $ 63,601,515 $ 52,200,274 $ 45,b05,934 $ 38,830,746 $ 36,262,193 $ 35,596,876 $ 29,1M.750 9,450,577 10,171,957 10,387,623 11,054,279 12,020,807 12,516,966 12,074,657 11,232,443 10,776,603 47,851,767 43,225,914 36,595,988 32,962,377 28,509,026 23,650,121 23,030,884 20,990,057 18,989,775 717,820 1,704.655 2,314,246 3,011,254 234,627 190,852 151,543 144,672 129,418 C140,017,203 $130,167,742 $112,899,372 $ 99,228,184 $ 86,570,394 $ 75,188,685 $ 71,519,477 $ 67,964,048 $ 59,032,551 . 2,098,281 1,227,856 1,755,927 1,541,265 1,366,601 1,200,380 1,074,923 950,250 715,587 $142,115,564 $131,395,598 $114,655,299 $100,769,449 $ 87,936,995 $ 76.389,065 $ 72,594,400 $ 68,914.298 $ 59,748,139 ( 79,332,269 72,941,56? 64,303,774 53,760,032 47,827,215 40,131,587 37,638,842 36,869,414 29,980,627 4 6,405,305 6,845,467 7,241,954 8,187,652 8,713,106 8,990,599 8,548,906 7,993,181 7,593,440 ) 69,076,501 62,013,406 52,797,012 48,853,317 41,690,243 34,446,406 34,324,931 31.123,993 28,948,655 ( 1,355,036 3,809,981 6,611,019 7,444,854 304,449 244,638 193,380 184,081 164,424 J 156,169,111 145,610,436 130,953,759 118,295,855 98,535,013 83 813,230 80,706,059 76,170,669 66,687,146 5,322,355 7,305,514 5,872,391 10,283,514 6,354,454 3,857,019 2,338,405 6,855,227 815,262 3,728,363 1,800,161 766,055 2,757,293
- 167,845,920 156,772,909 139,164,555 135,434,596 99,350,275 87,541,593 82,506,220 '
76,936,724 69,444,439 j 1,140,880 982,434 843,543 821,362 602,123 574,989 505,462 400,942 440,054 ,i 462,922 443,730 426,714 621,112 590,633 562,897 539,474 509,462 483,682 s 438,298 400,668 361,33C, 321,909 [ 265,073 234,184 205,884 192,754 183,491 t 191 193 189 184 196 187 193 194 180 103.36d 102.91d 98.91d 97,10d i 95.77d 96.764 96.34d 96.55d 97,18d $196.95 $198.73 $187,01 $178.45 { $187.78 $181,01 $186.30 $167,00 $174.46 Gas revenues for the years toss and 1oct have been restated +. reflect refunds to the com NOTE: Pubhc Service Commission as a resultof refunds of the cost of gas purchased during those yesrs.
COMPANY DIRECTORS A.H.AYMOND Chairman of the Board of the Company Jackson Michigan ROBERT P. BRIGGS Executive Vice President of the Company Jackson, Michigan JAMES H. CAMPBELL President of the Company Jackson, Michigan E. NEWTON CUTLER, JR. Senior Vice President of First National City Bank New York, New York LEE D. FERDEN Farmer Chesaning, Michigan JOHN F. GORDON Director, General Motors Corporction Bloomfield Hills, Michigan FRANK HAMILTON First Vice President of Bankers Trust Company New York, New York DAN E. KARN Consultant to the Company Jackson, Michigan RALPH C. MORLEY, JR. Chairman of the Board of TRANSFER AGENTS COMMON AND PREFERRED STOCK: Wholesate Hardw re sr tors Saginaw, Michigan C. S. HARDING MOTT President and Trustee of the Charles Stewart Mott Foundation Flint, Michigan Consumers Power Company DONALD J. PORTER President of Jackson, Michigan 49201 Porter Hadley Company Agents oHhe Company Wholesale Building Materials 300 Park Avenue Grand Rapids, Michigan LYLE C. ROLL Chairman of the Board and President of Kellogg Company Cereal Manufacturer Battle Creek, Michigan ARTHUR H. SARVIS Vice Chairman of the Board of Cituens Commucial & Savir.gs Bank Flint, Michigan REGISTRARS DR. E. GIFFORD UPJOHN Chairman cf the Bcard of The Upjohn Compny Pharmaceutical Manufacture p g Kalama:oo, Michigan City Bank and Trust Company, N. A. Jackson, Mehigan 49201 First National City Bank New York. New York 10015 DIVISIONS AND MANAGERS (Headquarters cities in parentheses) COMMON STOCK: Battle Creek Division The National Bank of Jackson (Battle Creek) GORDON W. HOWARD Jackson, Michigan 49201 Bay City Division (Bay City) LOUIS A. VAUPRE First National City Bank Central Division (Alma) RALPH HAHN New York, New York 10015 Flint Division (Flint) J. LAURENCE GILLIE Grand Rapids Division (Grand Rapids) GORDON L CARSON hckson Division (Jackson) FRANK B. ADAMS (to January 31.19fE>) A. FRANK BREWER ",, f gQ';.,, (from February 1,1960 S ~ Kalamaroo Division (Katamazoo) ARTHUR H. LEE .~~4 Lansing Division (Lansing) WILLIAM R. CARLYON
- w W.$
' g '. "* N M - n. (to Dec=mber 31,1965) .T ROBERT H. LAWLOR -y '^ (from January 1,1964 -i * " M _' Macomb Division (East Detroit) GEORGE L MAYHEW 3 h iM-4.. Muskegon Division [ h ~.m c (Muskegon Heights) LIONEL L BOOTH ~. p, ,,,,, ggg, Northwest Division (Traverse City) BOB D. HILTY
- pp' _
- i & yzy Pontiac Division (Pontiac)
CHARLES F. BROWN j h }lp Saginaw Division (Saginaw) STANLEY M. JURRENS - 4*. South Oakland Division (Royal Oak) WILFRED L WHITFIELD West Wayne Division (Livonia) JAMES P.THOM AS, JR.
CUSTOMER SERVICE-Cornerstone of Free Enterprise For Consumets Power Company personnel no more satisfying words exist in their busi-ness life than a customer saying: "I like the
- l..
service I receive from Consumers Power ),.,., U ~ l'"""""'"' ' "~ ,a W hbMg7 Company." ~ ' . _ Mb iA Customer satisfaction is the goal and the Uh[ydN.8. MEM .g
- i*3 sim of Consumers Power Company, as in-deed it is of all well-managed electric and natural gas utilities in the United States.
This means a ceaseless effort, not only to .".'.. 'n,"o'*in bf *'* " * *"' * * "' '" ** '" ' meet existing requirements but to anticipate and be ready for ever increasing demands j .c in the future. N in 1965, the Company completed its first .y, SI .l$;" g year of operationa under an extensively redesigned customa r cervice program. Cus- 'Q!p pg{ ,y, $grpff: . #p, .f tomer contacts and service operations have O been centralized as one responsibility un-S [Q der the close scrutiny of each Division Manager. The Company also has embarked u.c.mn oi i.i.n.. ...,,ic. c.ni.,, , w.,, n, '
- "*d**"'8""
on a major progr.m to use efectronic data processing to epeed the handling of cus-7. p.g,.f. 7,y { tomer inquiries and requests for service. g 4' s-In addition, new service centers are betng j d_ L._ ii . built and existing office and service centers _m are being remodeled in order better to serve g"pi urn. f-R,f a ~.7(T.[N e .Y ^ -~_- .' w" E.w_,.. customers. Yes, the objective of every employee is to M M. es' - .m%y h1, have customers continue saying: "I like the NQ service I receive from Consumers Power o,,,,,o,,,,,,,,,,,,,g,,,,,,,,,,,, tir t tuu.. in oper uon in ms. Company." I
1 e l ..n CONSUMERS POWER C O M PA N Y -AN INVESTOR-OWNED ELECTRIC AND NATURAL GAS UTILITY IN THE CENTER OF GREAT LAKES AMERICA -SERVING MORE THAN 4.5 MILLION PEOPLE IN 07 OF THE 68 COUNTIES IN MICHIGAN'S LOWER PENINSULA i l l l e 9
I , I e.. 9 - af-w ,a:Q f .%,:4 r; 4A', Y@e ' k 5}} "E G.. Datt OF DOCUMENit DAtt RECENED MOf I kIF4 i 8 22 '0% h >r carr*M' OTHEL MEMO-REPORT LIR. .r$4CkSSC, MkChifEn k92M x ( (Robert E. Eerrner) ORGa CC: 01HER D 1 er. rec'd ACTION NECESSARY O CONCUREENCE O IDATE AN5wt#ED N. NSn NO ACflON NECES$ARY Q COMMENT Q BY. POSI OFFICE FILE CODE. DOCG!: 50-15$ (SUFFL. CULT) CLA 5 53.. DATE U .go NO REFEARED TO M 4 RECElvtDSy DESCRiPitON (Must to Unclassi6ed) J V~ ' fy '1965 Annus1 Report" for Consumers i 1 _ ?1 namn e W~ w/rerert Power Campany ENCLO$UGES / 2Mggj }-21 _T h OllVe ~ '\\') Q f REMARKS b er. of ticket put in suppl. file V 8'22 U. S. ATOMIC ENERGY COMMISSION MAIL CONTROL FORM FORM AEC 276 (840) ( $'k-l'( ,Jp:.p. .nx,< " lD.*[' _'. _,( 'W n ;;:_ -m A , ;,y. ) M, b l E}}