ML19350C762
| ML19350C762 | |
| Person / Time | |
|---|---|
| Site: | Millstone, Seabrook, 05000496, 05000497  |
| Issue date: | 03/27/1981 |
| From: | Bishop R NORTHEAST UTILITIES |
| To: | Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML19350C763 | List: |
| References | |
| NUDOCS 8104060671 | |
| Download: ML19350C762 (10) | |
Text
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Director Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C.
20555
Dear Sir:
In accordance with paragra~ph 50.71(b) of 10CFR, Part 50, enclosed are ten (10) copies of each of the 1980 Annual Financial Reports of The Connecticut Light and Power Company, The Hartford Electric Light Company, Western Massachusetts Electric Company and Northeast Nuclear Energy Company, license holders, all certified by Arthur Andersen &
Company, certified public accountants.
Very truly yours, FJG/cvs Enclosures h
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4 AUDITORS' REPORT To the Board of Directors of
' Northeast Nuclear Energy Company:
We have examined the balance sheets of Northeast Nuclear
' Energy Company -(a Connecticut corporation and a wholly owned subsidiary of Northeast Utilities) as of December-31, 1980, and 1979, and the related_ statements of income, retained earnings and sources of funds for gross, property additions for the years then ended. Our examinations were 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.
In our opinion.the financial statements referred to above present fairly the financial position of Northeast Nuclear Energy Company as of December 31, 1980, and 1979, and the results of its operations and the sources of funds for grosa property additions for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut, February.20, 1981.
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NORTHEAST WUCLEAR ENERGY COMPANY Balance Sheets December 31, 1980 and 1979 Assets 1980 1979 Nuclear fuel, at original cost
$266,713,905
$218,643,073 Less: Accumulated provision for amortization 150,786,831 119,881,022 Nuclear fuel, net of amortization 115,927,074 98,762,051 Current Assets:
Cash 14,141 12,991 Accounts receivable 1,691,973 975,250 Due from affiliated companies 54,676,550 15,670,717 Materials and supplies, at average cost 4,515,577 3,641,195 Other 414,484 263,080 61,312,725 20,563,233 Deferred Charges:
Accumulated deferred income taxes 6,718,579 3,881,388 Unamortized debt expense 95,615 145,502 Work in progress 120,710 389,055 Other 1,835,531 4,435,460 8,770,435 8,851,405 Total Assets
$186,010,234
$128,176,689 Capitalization and Liabilities Capitalization:
Common stock without par value. Author-ized 60,000 shares; issued and out-standing 1,500 shares, at stated value 15,000 15,000 Capital surplus, paid in 15,350,000 15,350,000 Retained 7tnings (Note 2) 18,873,963 14,429,067 Total iommon stockholder's equity 34,238,963 29,794,067 Long-term debt (Not u 3) 40,000,000 40,000,000 Total capitalization 74,238,963 69,794,067 Current Liab_11 ties:
Notes payable to banks 30,000,000 Nuclear fuel payable 22,300,000 22,125,000 Accounts payable 45,479,807 27,241,251 Due to affiliated companies 7,130,656 3,423,285 Accrued taxea 3,743,248 3,582,667 Accrued interest 988,403 325,729 Other 167,405 62,332 109,809,519 56,760,264 Deferred Credits:
Accumulated deferred investment tax credits 1,715,825 1,566,323 P
Other 245,927 56,035 1,961,752 1,622,358 Commitments (Note 6)
Tot 1 Capitalization and Liabilities
$186,010,234
$128,176,680, The accompanying notes are an integral part of these financial statements.
NORTHEAST NUCLEAR ENERGY COMPANY Statements of income For the Years Ended December 31, 1980 and 1979 7
1980 1979 Operating Revenues
$105,369,740 S87,116,025 Operating Expenses:
Operation -
-Fuel 30,722,481 25,553,285 Other 38,596,060 29,576,657 Maintenance 22,459,599 20,320,059 Federal and state income taxes (Note 5) 2,787,912 2,065,491 Taxes other than income taxes 832,873 664,874 Total operating expenses 95,393,925 78,180,365 Operating income 9,970,815 8,935,659 Other income, net (6,844)
(8,215)
Income before interest charges 9,963,971 8,927,444 Interest Charges:
Interest on long-term debt 3,958,636 3,958,636 Other int erest 5,686,207 3,315,846 Allowance for borrowed funds used during construction (4,125,768)
(1,985,366)
Total interest charges 5,519,075 5,289,116 Net Income
$ 4,444,896
$ 3,638,328 Statements of Retained-Earnings For the Years Ended De'cember 31, 1980 1979 Balance at beginning of' period
'$14,429,067
$10,790,739
-Nec income 4,444,896 3,638,328 Balance at end of period L(Note 2)
$18,873,963
$14,429,067.
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The accompanying notes are an integral.part of these~ financial statements.
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l NORTHEAST NUCLEAR ENERGY COMPANY Statements of Sources of Funds for y-Cross Property Additions 7
For the Years Ended December 31, 1980 and 1979 e-y 1980 1979 Funds generated from operations Income from operations S 4,444,896 S 3,638,328 Principal noncash items -
~ Amortization of nuclear fuel 30,722,481 25,553,285 Deferred income taxes, net (2,581,056)
(3,333,118)
Amortization of other noncash items 97,619 57,270 Net funds generated from operations 32,683.940 25,915,765 Funds obtained from financing Increase in short-term debt 30,000,000 Nuclear-fuel payable 175,000 (2,582,610)
Net funds from financing-30,175,000 (2,582,610)
Other sources - (uses) of - funds Decrease (increase) in net current' assets
.(excluding short-term debt.and nuclear
. fuel payable) -
Cash-(1,150) 88,280 Accounts receivable (39,722,556)
(5,334,796)
Materials and. supplies (874,382)
(450,559) i Accounts payable-21,839,294 24,240,227 JAccrued taxes 160,581 1,559,287 1 Accrued interest.
662,674
. (23,284)
-Other, net-(46,331)
Net change (17,981,870) 20,079,155 3,193,762 3,124,803 Other,-net-
= Net other sources (uses) of funds (14,788,108) 23,203,958
~
' CROSS PROPERTY. ADDITIONS - Nuclear fuel-
$48,070,832
$46,537,113 3The accompanying notes'are an integral part of..these: financial statements.
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NORTHEAST NUCLEAR ENERGY COMPANY Notes to Financial Statements (1)
SUMMARY
OF SIGNIFICAhT ACCOUNTING POLICIES _
7, Affiliation: Northeast Nuclear Energy Company (the Company) is a subsidiary of the Northeast Utilities system (the system) and is a wholly owned subsidiary of Northeast Utilities, a registered holding company under the Public Utility Holding Company Act of 1935. The Company acts as agent for The Conr.ecticut Light and Power Company, The Hartford Electric Light Company and Western Massachusetts Electric Company (af filiated utility co=panies, all wholly owned by Northe~ st Utilities) in the construction and operation of nuclear a
generating facilities and in the financing of nuclear fuel for such facilities.
Two nuclear generating units are currently being operated by the Company. The cost of the nuclear units is recorded on the books of the affiliated utility companies in their proportionate shares of ownership. The cost of the nuclear fuel for the units is
- recorded on the books of the Company.
Revenues: The Company provides services to the affiliated utility companies on the basis of recovery of cost plus return on capital, as defined under terms of agreements which have been approved by various federal and state regulatory commissions having jurisdic-tion over operations of the Company and the affiliated utility companies.
t Nuclear Fuel: fThe cost of nuclear fuel is amortized to operation expense'on a unit-of-production method at rates based on estimated kilowatt-hours of energy to be provided. Such amortization, including since 1979 a current provision for estimated spent fuel disposal costs, was $30,722,481 in 1980 and'$25,553,285 in 1979. As approved by-the appropriate regulatory commissions, the estimated spent fuel a
. disposal costs pertaining to fuel amortized prior to 1979 are being amortized over' a ten-year period. ~ Storage for spent fuel at the Millstone nuclear station, including the facilities currently under
' construction at Millstone III, are expected to be sufficient until at. least the' mid-1990s.
Nuclear fuel for Millstone 1 and II is being financed pursuant
-to a fuel supply. trust agreement under which the trust owns and finances the nuclear-fuel prior to its placement-into the nuclear reactor. The trust obtains funds by the sale of commercial paper and/or through bank loans. The Company is obligated t'o purchase the nuclear fuel-from the trust when specific events occur. Interest
' costs of:$4,125,768 in 1980 and $1,985,366 in 1979 incurred in 1 connection with financing this nuclear fuel:were capitalized by the.
1 ompany..The weighted average interest rate charged by the trust C
twas 14.1Lpercent in 1980 and 14.2 percent ~in 1979.
Federal Income Taxes: The Company is included in the consolidated federal income tax' return filed by Northeast Utilities.. The tax.
A
ef fect of timing dif ferences (dif ferences between the periods in which transactions affect income in the financial statements and the periods in which they affect the determination of income subject to tax) is accounted for in accordance with the ratemaking treatment of the applicable regulatory commissions.
Investment tax credit, f'
all applicable to nuclear fuel, is deferred and subsequently amortized to income over a four-year period.
See Note 5 for additional income tax information.
Allowance for Funds Used Euring Construction:
The allowance for funds used during construction (AFUDC) represents the estimated cost of capital funds used to finance the acquisition of nuclear fuel, which is added to the cost of such fuel, during the period preceding the operational status of a nuclear unit.
The amounts recorded for 1980 and 1979 AFUDC represents Millstone I and II nuclear fuel interest costs related to the fuel supply trust financing agreement previously discussed.
Retirement Plan: The Company participates in the Northeast Utilities Service Company Retirement Plan (the Plan).
The Plan, which covers all regular employees, is noncontributory. The system's policy is to fund annually the actuarially determined contribution, which includes that year's normal cost, the amortization of prior years' actuarial losses over fifteen years and the amortization of prior service costs over a period of forty years.
The Company's allocated portion of the system's contribution, part of which was capitalized, approximated $1,200,000 in 1980 and $800,000 in 1979.
The actuarial present value of accumulated plan benefits and plan net assets available for benefits for the system's plan are presented below:
January 1, 1980 1979,
(Thousands of Dollars)
. Benefits Vested
$219,709
$182,447
.Nonvested 21,537 17,293 S241,246
$199,740 Net assets available for benefits
$232,031
$192,603 The assumed rate of return used to determine the actuarial present
.value of accumulated plan benefits was 6.5 percent.for both 1980 and 1979.
5 1(2) DIVIDEND RESTRICTION At. December 31, 1980, $12,649,000.was available-for payment of cash dividends'on common stock.
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(3) LONG-TERM DEBT Details of long-term debt outstanding at Decembet 31, 1980 and 1979 i.
are as follows:
Secured Notes, Series A, F,-
8-1/2%, due 1982
$ 9,000,000 Secured Notes, Series B, 11-1/4%, doe 1982 20,000,000 Secured Notes, Series C, 8-1/8%, due 1982 11,000,000 Total long-term debt
$40,000,000 Northeast Utilities has guaranteed the payment of the Notes and the i
Company's nuclear fuel has been pledged as security for payment.
(4) SHORT-TERM DEBT The maximum amount of short-term borrowings authorized by the Securities and Exchange Commission at December 31, 1980 is
$30,000,000. There were notes payable to banks outstanding of
$30,000,000 at December 31, 1980 r_d none at December 31, 1979.
- (5)
INCOME TAXES l
The detail-of federal and state income tax provisions charged to operations is set forth below:
Years Ended December 31, 1980 1979 Current. income taxes:
Federal
$5,368,968
$4,121,813 State.
1,276,796 Total' current 5,368,968 5,398,609 Deferred' income taxes, net:
-Investment tax credits 256,135 548,270 Federal-(3,498,751)
(3,188,284)
State 661,560 (693,104)
. Total deferred (2,581,056)
(3,333,118)
Total income taxes
$2,787,912
$2,065,491-Deferred income taxes are comprised'of-the
. tax effects of timing differences as follows':
n
-Investment tax credits-
$' 256,135..
$ 548,270 Settlement credits
. nuclear fuel-
'(209,913)
.(2,056,961)
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Spent fuel:
(2,627,278)
(1,824,427)
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. Deferred ~ income taxes, ; net :
.$.(2.,581,056)
'$(3,333,118)
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The principal reasons for the difference between total tax expense
.and the amount calculated by applying the federal income tax rate to pretax income are as follows:
a Years Ended December 31, 1980 1979 f
Expected tax, at 46% of pretax income S 3,326,924
$ 2,623,757 Tax effect of differences:
State tax, net of federal benefit 357,242 315,194 Investment tax credit amortization (916,832)
(876,587)
Other, net 20,578 3,127 Total income taxes S 2,787,912
$ 2,065,491 i
(6) COMMITMENTS The Company, under terms of an agreement expiring in 1982, is obligated to supply the nuclear fuel required for the operation of
' Millstone I and II, which are owned by the affiliated utility companies. Nuclear fuel expenditures for Millstone I and II are estimated'to total $357,402,000 through 1986, including $59,981,000
'for 1981. Portions.of the nuclear fuel expenditures will be financed through a fuel supply trust agreement.
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