ML20035H392
| ML20035H392 | |
| Person / Time | |
|---|---|
| Site: | Maine Yankee |
| Issue date: | 04/30/1993 |
| From: | Herbert J Maine Yankee |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| JRH-93-86, MN-93-44, NUDOCS 9305040414 | |
| Download: ML20035H392 (72) | |
Text
MaineYankee REll ABL E st E,.CT RICIT Y SINCE 1972 EDISON DRIVE + AUGUSTA. MAINE 04330 * (207) 6224868 P
April 30,1993 MN-93-44 JRH-93-86 UNITED STATES NUCLEAR REGULATORY COMMISSION Attention: Document Control Desk Washington, DC 20055 i
References:
(a)
License No. DPR-36 (Docket No. 50-309)
Subject:
Annual Financial Report Gentlemen:
Pursuant to 10 CFR 50.71(b), please find enclosed a copy of the 1992 Annual Financial Report (Form 10K) for Maine Yankee Atomic Power Company.
The original report is on file with the Securities and Exchange Commission.
Very truly yours, M
James R. Hebert, Manager Licensing & Engineering Support Department SJB\\mwf
Enclosure:
MYAPCo Form 10-K for the Fiscal Year Ended December 31, 1992 c:-
Mr. Thomas T. Martin Mr. Charles S. Marschall Mr. E. H. Trottier Mr. Patrick J. Dostie 1
La\\93mn\\9344 e
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9305040414 930430 PDR ADDCK 05000309 I.
PDR.
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FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)D 0F THE X
SECURITIES EXCHANGE ACT OF 1934 [ FEE REQUIRE For the fiscal year ended December 31. 1992 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 0F THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to Commission file number 1-6554 MAINE YANKEE ATOMIC POWER COMPANY (Exact name of registrant as specified in its charter)
Incoroorated in Maine 01-0278:25 (State or other jurisdiction of (I.R.S. Emp' oyer incorporation or organization)
Identification No.)
Edison Drive. Auausta. Maine 04330 (Address of principal executive offices)
(Zip Code) 207-622-4868 (Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange Title of each class on which registered First Mortoaae Bonds. Series B (Sinkina Fund) 8 1/2% Due 2002 New York Stock Exchance First Mortoaae Bonds. Series C (Sinkina Fund) 7 5/8% Oue 2002 New York Stock Exchance Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No
t i
i o
FORM 10-K SECURITIES AND EXCHANGE COMMISSION i
Washington, DC 20549 i
(Continued)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X) (Not applicable to registrant)
The aggregate value of the voting stock held by non-affiliates of the registrant is $50,000,000, based solely on the par value of the common stock. There is no market in this security.
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
Shares Outstanding 1
Class as of March 29. 1993 Common Stock, $100 par value 500,000 DOCUMENTS INCORPORATED BY REFERENCE No documents are incorporated by reference in this report.
L
Maine Yankee Atomic Power Company Form 10-X - 1992 Maine Yankee Atomic Power Company Form 10-K - 1992 i
r TABLE OF CONTENTS i
Pace Part I Item Number l
Item 1.
Business...........................
l' Item 2.
Properties..........................
8 Item 3.
Legal Prcceedings......................
9 Item 4.
Submission of Matters to a Vote of Security Holders.....
10 Part 11 Item 5.
Market for the Registrant's Common Equity and Related Stockholder Matters.....................
11 Item 6.
Selected Financial Data...................
12 Item 7.
Management's Discussion and Analysis-of Financial Condition and Results of Operations............. 13 Item 8.
Financial Statements and Supplementary Data.........
19 Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............. 43 Part III Item 10. Directors and Executive Officers of the Registrant...... 44 Item 11. Executive Compensation.................... 52 Item 12. Security Ownership of Certain Beneficial Owners and Management.........................
54 Item 13. Certain Relationships and Related Transactions........ 55 Part IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K......................... 56 Signatures..............................
57
Maine Yankee Atomic Power Company Form 10-K - 1992 o
i PART I ITEM i - BUSINESS (a) General.
Maine Yankee Atomic Power Company (the " Company" or " Maine Yankee"), incorporated under the laws of Maine on January 3,1966, owns and operates a pressurized-water nuclear-powered electric generating plant at Wiscasset, Maine, with a current net capacity of approximately 860 megawatts electric (the " Plant").
The Company sells its capacity and output to its ten sponsoring stockholder utilities.
The Company's principal office address is Edison Drive, Augusta, Maine 04330, and its telephone number is (207) 622-4868.
The Plant was declared commercial on December 28, 1972, with regular operation at approximately 570 megawatts electric (net) starting on January 1,
1973.
Hearings on the Company's application for a full operating license were completed in 1972 and the license for full operation to 2008 was granted by the Atomic Energy Commission, the predecessor of the i
Nuclear Regulatory Commission ("NRC"), on June 29, 1973.
The Plant is operated on a planned 18-month operating cycle and must be taken off line at the end of a cycle for approximately eight to ten weeks for scheduled refueling, maintenance and construction activities. Through December 31, 1992, the Plant had sold over 101.1 billion kilowatt-hours i
("KWH") of electricity at an average lifetime total cost per KWH of 2.2 cents.
The Plant's lifetime average capacity factor is 72%.
In 1992 the Plant operated at an average capacity factor of 71 percent (based on a net rating of 860 megawatts), and generated for sale 5.3 billion KWH of electric power, the highest total for a refueling year in the Plant's history, at an average cost of 3.5 cents per KWH.
The Plant was shut down from February 14, 1992, to April 19, 1992, for scheduled refueling and maintenance.
The Company is sponsored by ten investor-owned New England utilities (the
" Sponsors" or the " Stockholders"), each of which is committed under a Power Contract with the Company to purchase a specified percentage of the capacity and output of the Plant and to pay therefor a like percentage of amounts sufficient to pay the Company's fuel costs, operating expenses (including a depreciation accrual at a rate sufficient to fully amortize the investment in the Plant over the operating life of the Plant and amounts estimated to be sufficient to decommission the Plant), interest on its debt and a return on its equity.
The Company and its Sponsors have also executed Additional Power Contracts for the purpose of extending the term of the Power Contracts, as amended, from 2003 to the end of the useful life of the Plant and the completion of its decommissioning and financial obligations.
Each Sponsor has also agreed under a Capital Funds Agreement with the Company to provide a like percentage of the Company's capital requirements not obtained from other sources, subject to obtaining necessary authorizations of regulatory bodies in each instance.
All such obligations are subject to the continuing jurisdiction of various federal and state regulatory bodies.
1
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(a) General. (continued)
The obligations of the Sponsors to make payments under the Power Contracts are unconditional, subject only to each Sponsor's right to cancel its Power Contract if deliveries cannot be made to the Sponsor because either (i) the Pl ant is damaged to the extent of being completely or substantially completely destroyed, or (ii) the Plant is taken by exercise of the right of eminent domain or a similar right or power, or (iii) (a) the Plant cannot be used because of contamination or because a necessary license or authorization cannot be obtained or is revoked or the utilization thereof is made subject to specified conditions which are not met, and (b) the situation cannot be rectified to an extent which will permit the Company to make deliveries to the Sponsor from the Plant.
Notwithstanding the right to cancel, the obli ation to pay decommissioning costs continues until the Plant has been full decommissioned.
A default by a Sponsor of the Company in making payments under the Power Contract or Capital Funds Agreement could have a material adverse effect on the Company, depending on the magnitude of the default, and would constitute a default under the Company's First Mortgage Indenture and two other major credit agreements unless cured within applicable grace periods by the defaulting Sponsor or other Sponsors.
(b) Problems Affectino the Industry and the Company.
Substantial controversy exists concerning nuclear generating plants, which intensified when events in 1979 at the Three Mile Island Nuclear Unit No. 2 in Pennsylvania ("TMI") caused increased concern about the safety of such plants. This prompted a rigorous reexamination of safety related equipment and operating procedures in all nuclear facilities and caused the NRC to promulgate numerous requirements in response to TMI, including both near-term modifications to upgrade certain safety systems and instrumentation and longer-term design changes, ranging from equipment changes to operational support. The Company has made the modifications required by the NRC.
The NRC is continuing its safety reviews under both long-standing and new regulations and may at any time issue orders which could materially affect the Company's affairs and financial condition and the operation of the Plant.
For a discussion of the voluntary shutdown of the Yankee Atomic Electric Company plant at Rowe, Massachusetts, for both regulatory and economic reasons, see "(h) Yankee Atomic Electric Company Plant Shutdown", below.
Public and regulatory attention has also focused on the disposal of both low-and high-level nuclear wastes.
Certain aspects of the disposal of nuclear wastes and the decommissioning of nuclear generating facilities have been regulated under federal and Maine law and further regulation is likely in this area.
Public concern about the operation of nuclear generating facilities and the disposal of nuclear wastes has sometimes resulted in public campaigns to close such facilities. Although affecting various nuclear generating facilities in varying degrees, such events, as well as other problems of the industry, have had, and will continue to have, a direct effect on the affairs and financial condition of the Company. For further discussion of nuclear waste disposal issues, see "(d)
Nuclear Fuel Disposal" and "(f) Low-Level Waste Disposal", below.
2
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(b) Problems Affectino the Industry and the Company. (continued)
There have been three unsuccessful state referenda attempting to close the Plant since 1980. The last referendum occurred on November 3, 1987, when the Maine electorate defeated an initiated bill intended to close the Plant on July 4, 1988, by a margin of 59 percent to 41 percent.
There is no certainty that such a referendum will not occur again, and in the event that one takes place, no prediction can be made as to the potential outcome.
If a referendum were to be initiated, the Company would strongly contest any attempts to close or impair the operation of the Plant.
If (contrary to the history of unsuccessful referenda on the Plant) a referendum were to pass in Maine, the Company believes that such referendum would be vulnerable to a challenge on the basis of fundamental legal principles and that the Company would have substantial rights and remedies available to it, which it would vigorously seek to enforce.
(c) Reaulation and Environmental Matters.
The Plant is subject to exten-sive regulation by the NRC, which is empowered to authorize the siting, construction and operation of nuclear reactors after consideration of public health, safety, environmental and antitrust matters.
The United States Environmental Protection Agency
(" EPA") administers programs established under the Federal Water Pollution Control Act and the Clean Air Act, as amended in 1990, which affect the P1 ant. The former Act establishes a national objective of complete elimination of discharges of pollutants into the nation's water and creates a rigorous permit program designed to achieve this objective.
The latter Act empowers the EPA to l
establish clean air standards which are implemented and enforced by state agencies.
In addition, pursuant to the Federal Resource Conservation and Recovery Act of 1976, the EPA regulates the generation, transportation, treatment, storage and disposal of hazardous wastes. The EPA has broad authority in administering these programs, including the ability to require installation l
of pollution control and mitigation devices.
The National Environmental Policy Act of 1969 ("NEPA") requires that de-tailed statements of the environmental effects of major federal actions be prepared by federal agencies. Major federal actions can include licenses or permits issued to the Company by the NRC and other federal agencies for construction or operation of generation and transmission facilities. NEPA requires that federal licensing agencies make an independent evaluation of the environmental impact of, and alternatives to, the proposed action.
Future construction modifications or other activities at the Plant could require federal licenses or approvals that involve NEPA requirements.
The Company is also subject to regulation as to environmental matters and land use by various state and local authorities in Maine.
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i Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(c) Reculation and Environmental Matters. (continued)
Under their continuing jurisdiction, the NRC and one or more of the EPA and the state authorities having jurisdiction over the Company's facilities may
)
I modify permits or licenses which have already been issued, or impose new 4
conditions on such permits or licenses, and may require additional capital expenditures or require that the level of the operation of a unit be temporarily or permanently reduced.
See "(b) Problems Affecting the Industry and the Company", above. The Sponsors of the Company have agreed, however, subject to certain exceptions including regulatory approval, (1) to provide the required capital not otherwise available, (ii) to take the total output of the Plant, and (iii) to pay all costs of the Plant, including capital and decommissioning costs.
The Company and several of its Sponsors are subsidiaries of registered holding companies and as such are subject to regulation by the Securities i
and Exchange Commission ("SEC") under the Public Utility Holding Company Act of 1935 with respect to various matters, including the issuance of i
certain securities.
The Company is also subject to regulation by the SEC 4
under other federal securities laws.
i In addition the Company is subject to regulation by the Federal Energy Regulatory Commission ("FERC") as to its rates (including the Power l
Contracts and Additional Power Contracts) and various other matters, and is subject to regulation by the Maine Public Utilities Commission ("MPUC") as to some aspects of its business, including the issuance of securities.
(d)
Nuclear Fuel Disposal.
The cycle of production and utilization of nuclear fuel for nuclear generating units consists of (1) the mining and milling of uranium ore, (2) the conversion of the resulting concentrate to uranium hexafluoride, (3) the enrichmet of the uranium hexafluoride, (4) the fabrication of fuel assemblies, (5) the utilization of the nuclear fuel, and (6) the disposal of spent fuel. The Company has entered into a contract with the federal Department of Energy ("DGE") for disposal of its spent nuclear fuel, as required by the Nuclear Waste Policy Act of 1982, pursuant to which a fee of 51.00 per megawatt-hour is currently assessed 3
against net generation of electricity and paid to the DOE quarterly. Under this Act, the DOE has assumed the responsibility for disposal of spent nuclear fuel produced in private nuclear reactors.
In addition, Maine j
Yankee is obligated to make a payment of $50,394,000 with respect to i
generation prior to April 7,1983 (the date current DOE assessments began),
all of which the Company has already collected from its customers, but for which a reserve was not funded. The Company has elected under the terms of this contract to make a single payment of this obligation prior to the first delivery of spent fuel to DOE, scheduled to begin no earlier than 1998.
The payment will consist of the $50,394,000, plus interest accrued at the 13-week Treasury Bill rate compounded on a quarterly basis from April 7, 1983, through the date of the actual payment.
Current costs incurred by the Company under this contract are recoverable by it under the terms of its Power Contracts with its Sponsors.
The Company has accrued and billed 549,970,000 of interest cost for the period April 7,
- 1983, through December 31, 1992.
4
)
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(d)
Nuclear Fuel Discosal. (continued)
Maine Yankee has formed a trust to provide for payment of its long-term spent fuel obligation.
The total spent fuel fund balance, held with an independent trustee, as of December 31, 1992, was $80,655,000 (including interest earned). The trust is funded at least semiannually by the Company through deposits, which began in December 1985, with current projected semiannual deposits of approximately 50.6 million through December 1997.
Deposits are expected to total approximately $66.7 million. The estimated liability, including interest due at the time of disposal, is expected to be approximately $116.8 million at January 31, 1998. The Company estimates that trust fund deposits plus estimated earnings will meet this total liability if funding continues without material changes.
Federal legislation enacted in 1987 directed the DOE to proceed with the studies necessary to develop and operate a permanent high-level waste (spent fuel) disposal site at Yucca Mountain, Nevada. The legislation also provides for the possible development of a Monitored Retrievable Storage
("MRS") facility and abandons plans to identify and select a second permanent disposal site. An MRS facility would provide temporary storage for high-level waste prior to eventual permanent disposal.
In late 1989 the DOE announced that the permanent disposal site was not expected to open before 2010, although originally scheduled to open in 1998.
Additional delays due to political and technica'i problems are probable.
Under the terms of a license amendment approved by the NRC in 1984, the present storage capacity of the spent fuel pool at the Plant will be reached in 1999 and after 1996 the available capacity of the pool will not accommodate a full-core removal.
After consideration of available technologies, the Company elected to provide additional capacity by replacing the fuel racks in the spent fuel pool at the Plant and, on January 25, 1993, filed with the NRC seeking authorization to implement the pl an.
Maine Yankee believes that the replacement of the fuel racks, if approved, will provide adequate storage capacity through the Plant's licensed operating life, but cannot predict with certainty whether the NRC l
authorization will be granted or whether or to what extent the storage capacity limitation at the Plant will affect the operation of the Plant or the future cost of disposal.
)
(e)
Decommissionina.
The NRC currently recognizes three decommissioning methods - prompt removal and dismantlement, entombment with delayed dismantlement, and mothballing with delayed dismantlement.
The Company currently proposes to use, consistent with its understanding of NRC and FERC staff policy, the prompt removal and dismantlement method.
Through 1992 the Company had collected 560,067,000 for decommissioning, which funds are held by an independent trustee. The total decommissioning fund balance as of December 31, 1992, was 577,686,000 (including interest earned).
5
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(e) Decommissionino. (continued)
The Company's most recent study, conducted in 1987 by an external Engineering Consultant, estimated decommissioning Costs, Which include the cost of removal and reclamation of the plant site, to be $142,478,000, plus a contingency of $35,620,000, for a total of $178,098,000 (in mid-1987 dollars).
The Company recognizes the relative uncertainties associated including its changing technology and the possibility with decommissioning, f law, and therefore recognizes the need to monitor of new requirements o and adjust decommissioning collections through supplemental rate filings with the FERC.
In anticipation of such a nte filing, the Company initiated a new decommissioning cost study by an external engineering consultant in early 1993.
(f)
Low-level Waste Disposal.
In 1986 the federal Low-Level Radioactive Waste Policy Amendments Act (the " Waste Act") was enacted.
The Waste Act required operating disposal facilities to accept low-level nuclear waste from other states only until December 31, 1992.
The Waste Act also set limits on the volume of waste each disposal facility must accept from each state, established milestones for the non-sited states to establish facilities within their states or regions (pursuant to regional compacts) and authorized increasing surcharges on waste disposal until 1992. After 1992 the states in which there are operating disposal facilities are permitted to refuse to accept waste generated outside their states or compact regions. In 1987 the Maine Legislature created the Maine Low-Level Radioactive Waste Authority (the " Maine Authority") to provide for such a facility if Maine is unable to secure continued access to out-of-state facilities after 1992, and the Maine Authority is engaged in a search for a qualified disposal site in Maine.
The Company has volunteered its site at the Plant for that purpose, but progress toward establishing a definitive. site in Lire, as in other states, is difficult because of the complex technical nr.ture of the search process and the political sensitivities associated with it. As a result, Maine did not satisfy its milestone obligation under the Waste Act requiring submission of a site license application by the end of 1991, and is therefore subject to surcharges on its current waste disposal and has not had access to regulated disposal facilities since January 1,1993.
At the same time, the State of Maine has been pursuing discussions with the State of Texas concerning participation in a compact with that state and possibly one or more other states. Texas is proceeding with plans to build a disposal facility and, although it has made no commitment to Maine, has demonstrated interest in a compact that would include Maine if Texas does not limit its facility to wastes generated in Texas.
Meanwhile, after taking steps to reduce the volume of waste and improve its compaction, the Company has the capacity to store approximately ' ten to twelve years' production of low-level waste at its existing facility at the Plant site and started storing in that facility in January 1993. Subject to obtaining necessary regulatory approvals, the Company could also build a second facility on the Plant site, if needed. The Company therefore believes it is probable that it will have adequate storage capacity for such low-level waste available on-site through the licensed operating life of the Plant.
On January 26, 1993, the NRC published for public comment a proposed regulation that, if adopted, would require a licensee such as Maine Yankee, as a condition of its license, to document that it had exhausted other reasonable waste management options in order to be permitted to store low-level waste on-site beyond January 1,1996.
Such options include taking all reasonable steps to contract, either directly or through the state, for disposal of the low-level waste.
6
m Maine Yankee Atomic Power Company Form 10-X - 1992 ITEM 1 - BUSINESS (continued)
(f)
Low-level Waste Disposal. (continued)
A 1985 Maine statute requires voter approval not only prior to construction or operation of any new low-level radioactive waste disposal facility in Maine, but also prior to Maine's entering into any compact or agreement with any state or the federal government concerning the disposal or storage of such waste inside or outside of Maine. In 1989 Maine voters approved an agreement providing interim access to an existing disposal site in Nevada from 1990 through 1992.
The Company cannot predict whether such voter approvals will be obtained in the future, or when or whether a. disposal facility will be available for the Company's waste in Maine or another state, but the Company intends to utilize its on-site storage facility and continue to cooperate with the State of Maine in pursuing all appropriate options.
To finance its planning and siting activity, the Maine Authority has been assessing Maine Yankee, as the only nuclear plant in Maine, for an initial statutory assessment totaling $10 million over a four-year period that ended in March 1992. The Company has paid and expensed the $10 million and under a one-year extension of the statute the Company paid an additional
$2.5 million assessment in February 1993. The statute also provides that, as reliable cost estimates become available, additional costs associated with such a facility will be assessed to any nuclear plant in the state following legislative enactment of such assessment amounts, and Maine Yankee will also be responsible for its share of the cost of operating such a facility.
(g) Nuclear Insurance. In accordance with the Price-Anderson Act, the limit of liability for a nuclear-related accident is approximately $7.8 billion.
The primary layer of insurance for the liability is $200 million of coverage provided by the commercial insurance market.
The secondary coverage is approximately $7.6 billion, based on 115 licensed reactors.
The secondary layer is based on a retrospective premium assessment of
$63 million per nuclear accident per licensed reactor, payable at a rate not exceeding $10 million per year per accident.
In addition, the retrospective premium is subject to inflation-based indexing at five-year intervals and, if the sum of all public liability claims and legal costs arising from any nuclear accident exceeds the maximum amount of financial protection, each licensee can be assessed an additional 5% ($3.15 million) of the maximum retrospective assessment.
In addition to the insurance required by the Price-Anderson Act, the Company carries all-risk nuclear property damage insurance in the amount of
$500 million plus additional excess nuclear property insurance in the amount of $2.125 billion effective January 1,1993.
Of this additional excess insurance, $1.325 billion is provided by a nuclear electric utility industry insurance company through a combination of current premiums and retrospective premium assessments.
If the insurance company experiences losses in excess of its capacity to pay them, each participating utility may be assessed a retrospective premium of up to 7.5 times its premium with respect to industry losses in any policy year, which could range up to approximately $6.2 million for the Company.
The remaining excess nuclear property coverage of $800 million is obtained from the commercial insurance market and is not subject to retrospective premium assessments.
These excess coverage amounts are the maximum offered by both the industry mutual company and the commercial market.
7
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 1 - BUSINESS (continued)
(h) Yankee Atomic Electric Comoany Plant Shutdown. On February 26, 1992, Yankee Atomic Electric Company
(" Yankee Atomic"),
a Massachusetts corporation with several or the same sponsors as Maine Yankee, announced that it would permanently cease power operation of the Yankee Nuclear Power Station in Rowe, Massachusetts, and would prepare for an orderly decommissioning of the facility. Yankee Atomic cited continued regulatory uncertainty and economics as the key factors in its decision to close the generating plant eight years prior to the expiration of its operating license.
l Yankee Atomic said several important regulatory issues had not been fully resolved, which, coupled with unfavorable economic conditions, would have imposed costs too large to justify the expense of seeking to restart the 185-megawatt plant.
The Yankee Atomic Plant, which had been voluntarily shut down in October 1991, is a small plant whose design is technologically i
different from that of the larger and more modern Maine Yankee Plant.
(i) Employees.
At December 31, 1992, the Company had 460 full-time employees.
ITEM 2 - PROPERTIES The Plant is located on tidewater on Bailey Point in Wiscasset, Maine, on l
a 740-acre site which is owned in fee by the Company and is adequate for the Plant and for all associated facilities, including the associated switchyard facilities which are owned in part and operated by Central Maine Power Company.
The Plant is a nuclear-powered electric generating plant, utilizing a pressurized-water reactor, fueled with slightly enriched uranium oxide.
The nuclear steam supply system and certain other equipment were designed and fabricated by Combustion Engineering, Inc.
The turbine generator was supplied by Westinghouse Electric Corporation. Stone & Webster Engineering Corporation, as engineer and constructor, designed and constructed the Pl ant.
Construction of the Plant, which began in 1967, was completed in 1972 except for certain discharge temperature control facilities designed to meet the requirements of the Maine Board of Environmental Protection, which were completed in 1975.
Under the terms of the Indenture securing the First Mortgage Bonds, substantially all electric plant of the Company is subject to a first mortgage lien.
i 8
^
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 2 - PROPERTIES (continued)
Since the Plant commenced operation, the Company has sought to improve its safety and reliability, while increasing its output, through periodic upgrading of equipment and facilities, along with regular training programs
[
for Plant personnel.
In furtherance of those goals, the Company replaced the Plant's two low-pressure turbines and its high-pressure turbine in 1988 and 1990, respectively, with new units provided by Asea Brown Boveri
("ABB"), which resulted in an increase of approximately 20 megawatts in the Plant's output.
In addition, the Company had contracted with ABB for the purchase and installation of a new main generator, which was planned to be installed during the February 1992 refueling outage, but which the Company is now retaining as a spare.
For accounting purposes, Maine Yankee has carried the approximately $8.1 million cost of the spare generator and associated equipment in a plant account as an emergency spare part since December 1992, and in January 1993 filed an accounting letter request 3
seeking FERC concurrence in that treatment.
The Company believes such treatment should be allowed, but has not yet received FERC concurrence.
ITEM 3 - LEGAL PROCEEDINGS (a) General. The operation of existing nuclear units and the construction of nuclear units in the United States continue to be a subject of public controversy.
Various groups have filed lawsuits and participated in administrative proceedings claiming that the present state of nuclear i
technology presents risks to public health and safety and to the environ-ment.
In addition, certain of these groups have proposed restrictive legislation relating to nuclear power.
Some of the claims made by such groups, if they should prevail, or the existence of the controversy itself, could cause substantial modifications to or extended shutdowns of plants presently in operation.
See Item 1, BUSINESS, Section (b), " Problems Affecting the Industry and the Company", above.
(b) Rate Proceedinos. In January 1988 the Company filed a request with the FERC to modify certain billing calculations and to increase its collection for decommissioning.
The request sought FERC approval to decrease the level of return on common equity from 13.6% to 13.5%, to provide for depreciation expense based on the recognition of shorter useful lives for certain classes of assets than had previously been assumed, to provide for the amortization of materials and supplies and the last fuel core and to increase the annual decommissioning collection from $4,796,000 to
$14,466,467, based on a total estimated cost of $178,098,000 and on full recovery by 1998, rather than over the NRC operating license life of the
- Plant, i.e., to 2008.
l 9
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 3 - LEGAL PROCEEDINGS (continued)
(b) Most Recent Rate Proceedina. (continued)
After discussions among the Company, the FERC Staff, and intervenors, and rejection by FERC of the shorter decommissioning collection period, a
settlement agreement resolving all outstanding issues under this rate proceeding was approved by the FERC by order dated September 20, 1988, with rates effective August 16, 1988. The settlement agreement provided, among other things, for the following:
(1)
Rate of return on common equity at 12.9% per annum.
(2) Annual decommissioning collections of $9,073,943 (based on a total estimated cost of $167,000,000), exclusive of any income tax liability, for the remaining licensed life.
(3)
Depreciation expense based on the recognition of shorter useful lives for certain classes of assets.
(4) Amortization of materials and supplies and last core fuel.
(5) Agreement by the Company not to propose an increase and by other parties not to make a filing to decrease the annual decom-missioning charges to take effect prior to February 16, 1991.
(6) Agreement that no party would oppose a FERC order requiring that the Company make certain filin s in the event that the license i
term of the Plant is modified b the NRC.
The Company is planning to file a rate case with the FERC in the second half of 1993, in part to reflect the conclusions of a new decommissioning cost study initiated in early 1993.
On March 26, 1993, the FERC initiated an investigation under Section 206 of the Federal Power Act of the justness and reasonableness of the Company's rate of return on common equity established in the 1988 rate case. At the same time, the FERC ordered that the effective date of any refunds resulting from the investigation would be 60 days from the date of publication of its investigation order in the Federal Register.
The FERC indicated that its concurrent investigations of the rates of return on common equity of Maine Yankee and other nuclear generating companies were based on an independent analysis that suggested such rates might be excessive under current market conditions.
(c)
Settlement of Contract Litiaation.
On January 8, 1992, ABB brought suit against Maine Yankee in the United States District Court for the District of New Jersey.
The complaint alleged, among other things, that Maine Yankee had breached a contract with ABB for the purchase and installation of a replacement main generator at the Plant, and that it owed ABB $4 million due at the time of delivery of the generator, plus interest, and the complaint sought an indeterminate amount of damages and other relief in other counts of the complaint based, among other things, on the delay in the planned installation of the generator. The Company filed its response to the suit, including counterclaims.
On September 18, 1992, Maine Yankee and ABB agreed to a settlement of the suit, and the suit and related claim of arbitration were dismissed.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable.
10
Maine Yankee Atomic Power Company Form 10-K - 1992 i
PART II ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EOUlTY AND RELATED STOCK-HOLDER MATTERS The Compa,ny's Common Stock, owned by the Company's ten utility Sponsors, is not publicly traded.
Transfer of the Common Stock is restricted by the Company's bylaws. The Company has paid cash dividends on its Common Stock to its utility Sponsors in each year of operation,1973 through 1992. The following table shows cash dividends paid for years 1992 and 1991:
v Shares 1992 1991 Outstandina Per Share Per Share January 500,000
$ 4.10
$ 4.35 April 500,000 4.30 4.25 July 500,000 4.15 4.35 October 500,000 4.20 4.00
$16.75
$16.95 The payment of dividends on the Company's Common Stock is subject to the following restrictions:
(1) The Company's First Mortgage Indenture the Company shall not declare or pay any (dividend on any class of.itsthe " Indenture stock, except out of earned surplus, and shall not declare or pay any such dividend or directly or indirectly make any payment on account of the purchase, redemption, acquisition or other retirement of any shares of its stock, unless, after giving effect to such declaration or payme,nt, the Company's Equity shall be at least 35% of Plant Construction Financing, and the Company s Common Equity shall be at least 30% of Plant Construction Financing. Under the provisions of its two revolving (credit arrangements the Company may not permit its Equity as defined in the with banks, Indenture) to be less than 33% of Plant Construction Financing (as so defined) and its Common Equi,ty (as so defined) to be less than 28% thereof.
The Company was in compliance through December 31, 1992, with those restrictions.
sh)res of the Company's Cumulative Preferred Stock are outstanding, theThe Compa (2
a payment of dividends on Common Stock (other than dividends in Common Stock) and the making of distributions thereon are limited to 50% of Net Income Available for Dividends on Common Stock for the preceding twelve months if the Common Stock Equity (after such action) is less than 20% of Total Capitalization, and to 75% of such Net Income if such Common Stock Equity (after such action) is 20% or more but less than 25% of Total Capitaliza-tion.
The Company was in compliance through December 31, 1992, with that restriction, r
11 7
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 6 - SELECTED FINANCIAL DATA (Dollars in Thousands Except Per Share Amounts) 1992 1921 1990 1989 1988 Selected income Statement Data:
Electric Operating Revenues
$187,259
$166,471
$178,524
$158,412
$157,097 Net income 9,173 8,863 9,059 9,021 9,593 Earnings Per Share of Common Stock 16.79 16.74 17.04 16.92 18.00 Dividends Declared Per Share of Common Stock 16.85 16.70 17.05 17.05 18.25 Selecte6 Balance Sheet Data:
Total Assets
$521,193
$486,881
$449,219
$419,196
$413,015 5[
First Mortgage Bonds 89,390 98,634 52,877 58,514 63,412 Nuclear Fuel Financing Notes 21,000 26,000 64,000 40,000 42,000 Long-Term Fuel Disposal liability 100,364 96,771 91,191 84,371 77,552 3*,
Trust Fund to Satisfy Long-Term Fuel
$$((
Disposal Liability 80,655-71,110 59,509 48,122 37,073 7sg i
Redeemable Preferred Stock 20,400-6,000 6,600 7,200 7,475
- 2?
ex N$ $
n aw
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Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION i
AND RESULTS OF OPERATIONS For a period commencing January 1, 1973, extending for thirty years thereafter in accordance with the Power Contracts, as amended, subsequently extended by the Additional Power Contracts from 2003 to the end of the i
useful life of the Plant and completion of all licensing and financial obligations, and subject to certain limitations, each Sponsor receives its entif.lement percentage of Plant output and is obligated to pay its entitlement percentage of the Company's total costs, including a return on invested capital, regardless of the level of operation of the Plant. The t
Plant's operating license expires in 2008.
The following is management's analysis of certain significant factors which have affected the Company's operating results and financial condition for the period 1990 through 1992.
Operatino Results Plant Operations The Plant has operated safely and reliably and has been a high production, low cost supplier of electricity since 1972. The Company has continued to upgrade its equipment and facilities.
The reliability of the Plant is reflected in its 72% lifetime average capacity factor rating, which compares very favorably with a lifetime industry average capacity factor of approximately 61%.
Through December 31, 1992, the Plant had sold over 101.1 billion KWH of electricity at an average lifetime total cost per KWH of 2.2 cents.
The Plant is operated on a planned eighteen-month operating cycle and must be taken off line at the end of a cycle for approximately eight to ten weeks for scheduled refueling, maintenance and planned construction activities.
During 1992 the Plant operated at an average 71% caoacity factor (using MDC net rating of 860 MWe) and generated and sold 5.3 billion KWH, the highest annual electrical production in its history during a refueling year.
Generation The following table sets forth the Company's average cost of power and generation for the years 1992, 1991 and 1990.
Comparability of amounts below is primarily impacted by the duration of plant outages. There was no refueling outage in 1991.
1992 1991 1990 Averace Cost of Power:
Cents per KWH 3.5 2.7
3.7 Generation
Net KWH sold (in billions) 5.3 6.2 4.8 l
13
r Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
Fuel Excenses nuclear fuel in the Fuel Amortization expense is based on the cost of (1.) d based on the level reactor core that is allocated to the accounting perio of energy production and (2) amortization over the remaining useful life of the Plant for the last core of unburned nuclear fuel.
Fuel amortization decreased by $6.1 million in 1992 over 1991, primarily as a result of lower generation and a reduction in the amortization rate due to lower-cost fuel being inserted into the core during the 1992 scheduled refueling, maintenance and construction outage (" refueling outage").
Fuel amortization increased by $1.3 million for 1991 over 1990 as a result of increased generation, which resulted from not having a refueling outage in 1991.
This increase was offset by an 18 percent reduction in the amortization rate due to lower cost of fuel being inserted into the core during the 1990 refueling outage.
Fuel Disposal expense results from a disposal fee of $1.00 per megawatt-hour of net generation which is assessed by the DOE and is paid quarterly.
Fuel Disposal expense, therefore, fluctuates with the level of generation.
However, the 1992, 1991 and 1990 disposal costs include adjustments, lowering expense, for anticipated refunds from the DOE of $272,000,
$277,000 and $2,536,000, respectively.
The final DOE rule on the refund process became effective on January 30, 1992.
Over the following four years, the DOE is implementing the refund process for overpayments through credits against quarterly payments. The refund process is being completed in two phases.
In the initial phase, i
principal overpayments and accrued interest through March 31, 1992, were calculated and made available for credit ;uring the 1992-1994 period.
In the second phase, additional accrued interest for the period April 1,1992, through September 30, 1994, will be calculated and made available for credit during 1995.
Total credits applied through 1992 amounted to
$1,920,179.
Operation Expense Operation expense increased by $12.9 million for 1992 over 1991, a non-outage year, primarily from the effect of the refueling outage in 1992.
Operation expense decreased in 1991 over 1990 by $4.8 million, which primarily reflects the effect of not having a refueling outage in 1991, with an offsetting effect of a $2.5 million i~ncrease in NRC fees and pre-outage costs associated with the February 1992 refueling outage.
Maintenance Expense The increase in maintenance expense by $14.3 million for 1992 over 1991, a non-outage year, is due primarily to expenses incurred for the 1992 refueling outage and general overall inflation associated with routine maintenance services, equipment and parts.
i 14
E Maine Yankee Atomic Power Company Form 10-K - 1992 j
ITEM 7 - MANAGIMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND R ESULTS OF OPERATIONS (continued)
The decrease in maintenance expense by $13.0 million for 1991 over 1990 is due primarily to not having a scheduled refueli outage in 1991, with an offsetting effect of 1991 expenses of approximate
$4.8 million associated i
with a maintenance project involving the Plant's t ermal shield planned for completion in 1993.
Deoreciation Expense Depreciation expense increased by $733,000 for 1992 and 5770,000 for 1991 1
due to additions in depreciable property placed in service.
Income Taxes The net increase in federal and state income taxes of $1.7 million for 1992 over 1991 resulted primarily from four items:
(1) a reduction in flowback of investment tax credits associated with the nuclear fuel assemblies as a result of the 1986 change in federal tax law which eliminated investment oc> credits, (2 a reduction in flowback of excess deferred income taxes associated with l)iberalized depreciation, (3 the current state taxation of the growth in spent fuel trust earnings, offs)et by (4)f the sp the net tax benefits associated with the increased tax-exempt earnings o decommissioning trust funds.
The net decrease in federal and state income taxes of 5.6 million for 1991 over 1990 resulted primarily from three items:
(1) a reduction in the tax provision from the additional amortization of investment tax credits earned on nuclear fuel assemblies as a result of a final settlement with the Internal Revenue Service, offset by (2) a reduction in tax benefits associated with lower tax-exempt earnings of the decommissioning trust funds and (3)in Maine state income tax law.the current taxation of spent fuel trust earnin from changes Property Taxes The increases in property tax expense of $972,000 for 1992 and $946,000 for 1991 reflect increases in the local tax rate and assessed property values.
Other Income. Net The increase in Other Income for 1992 over 1991 reflects primarily the increased earnings associated with the Company's prior spent fuel disposal trust fund.
Lona-Term Debt Interest' The increase in Long-Term Debt Interest in 1992 over 1991 is due primarily to the First Mortgage Bonds Series D,
8.79%, issued in 1991 being outstanding for a fulT year.
l The increase in Long-Term Debt Interest in 1991 over 1990 is due to the issuance of the Series D Bonds on March 14, 1991, offset by sinking fund repurchases of Series A and B bonds.
l 15
~
t Maine Vankee Atomic-Power Company Form 10-K - 1992 ITEM'7 - MANAGIMENT'S DISCUSSION AND ANALYSIS OF~ FINANCIAL CONDITION AND R ESULTS 0F OPERATIONS (continued)
Fuel Discosal Interest l
The: Company is accruing interest on its obligation to the DOE for -fuel burned prior to April 7,
1983.
This interest expense is compounded 1
quarterly on the DOE obligation at the 13-week Treasury Bill-rate.
The j
interest expense associated with this liability is reflected as Interest l
Charges - Fuel Disposal Liability.
The decrease in expense for 1991 and 1992 reflects the effect of lower interest rates.
- l Other Bank Note Interest The decrease in Other Interest Charges in 1992 over I?91 is due primarily to lower interest rates and a lower average level of short-term borrowings
- 1) the refinancing of short-term borrowings with the i
resulting fromof $15(,000,000 issuance of Cumulative Preferred Stock, 8 00% Series (Sinking Fund) on September 22, 1992, thro, ugh a private placement to institutional investors and (2) reduction in capital expenditures for nuclear fuel and electric property.
A lower level of borrowings during 1991 resulted primarily from the-refinancing of short-term borrowings with the issuance of $60,000,000 of Series D Bonds on March 14, 1991, through a private placement to institutional investors.
Allowance for Funds Used j
Fluctuations in the amount of allowance for funds (equity and borrowed)_
normally occur as the result of changes in the level of. investments-in -
i plant construction and nuclear fuel in process, and/or the rate used for j
capitalization of these funds.
i was higher in 1991 and Allowance for Funds Used for Nuclear Fuel ("AFN") f investment in fuel in j
1990, as compared to 1992, due to varying-levels o process.
i Liauidity and Capital Resources Ii Capital Resources Cash flow needs for 1992 were provided from operating activities in the ~
l amount of $47.0 million, net external financing of $2.2 million and i
decommissioning trust earnings of $4.5 million restricted to decommis-sioning trust investments.
The primary uses of cash were for various corporate purposes such as:
(1) nuclear fuel acquisitions of $13.4 million, (2) construction of operatina -
property, which utilized $8.4 million, (3) trust-fund investments of 1
$23.1 million to meet future plant decommissioning costs-and prior spent fuel permanent disposal, and _(4) dividend payments of $8.9 million.
I The company's current 1993 budget for construction of electric property is-
-l
-$18.2 million, inclusive of Allowance for Funds Used During Construction, 1
and for-procurement of nuclear fuel is $11.3 million, inclusive of AFN.
See Note 12 of Notes to Financial Statements,
" Commitments-and 3
Contingencies", for additional information concerning. the Company's 1993 3
construction program and the projected acquisition of nuclear fuel requirements for 1993 through 1997.
j i
1 I
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=
a
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
At December 31, 1992, the Company had capital resources available from secured and unsecured lines of credit totaling $106 million, of which
$25.5 million was utilized.
Effective January 30, 1990, the Company replaced its $20.0 million secured Eurodollar credit facility with a 535.0 million secured Eurodollar credit facility with a group of major international banks.
Two of the banks, with commitments aggregating
$15,000,000, were replaced as of July 1,1992, with two new banks with the same total aggregate commitment.
On September 22, 1992, the Company issued $15,000,000 of Cumulative Preferred Stock 8.00% Series (Sinking Fund), through a private placement to institutionai investors. The net proceeds received by the Company from the sale of the Preferred Stock were applied to the repayment of bank borrowings incurred to finance the Company's construction program.
On January 22, 1993, the Company issued $40,000,000 of First Mortgage Bonds, Series E 8.13% due 2008, through a private placement to institutional (Sinking Fund)he net proceeds received by the Company from investors. T the bonds were applied to the redemption of the outstanding $27.5 million principal amount of Series A 9.10% Bonds, with the balance being applied to the repayment of bank borrowings incurred to finance the Company's construction program.
In the area of federal taxes, the section of President Clinton's proposed comprehensive program of tax increases and spending cuts that would have the most significant effect on the Company, if enacted in its proposed
- 1994, form, is the energy tax provision currently proposed to begin July 1, ld be with a three year phase-in. Under this plan, conventional fuels wou assessed a basic tax of 25.7 cents per million British Thermal Units
(" BTU") that would be applied to nuclear fuel at the utility.
For the Company this means an average increase of 2.7 mills (8%) per KWH of aeneration.
The average annual generation for the Company is - about 5.7 billion KWH, and the annual tax would be approximately $15 million.
This tax is expected to be recoverable as a component of the Company's cost of service.
Each of the Maine Yankee Sponsors has also agreed under a Capital Funds Agreement with the Company to provide a percentage equal to its respective ownership percentage of the Company's capital requirements not obtained from other sources, subject to obtaining necessary authorizations of regulatory bodies in each instance.
All such obligations are subject to the continuing jurisdiction of various federal and state regulatory bodies.
The Company, as well as the nuclear electric industry in general, has been challenged by common problems in recent years including those of increasing operating costs and expenditures for plant modifications attributable to more stringent regulatory requirements and uncertainties caused by political involvement in nuclear utility regulation. It is not possible at this time to predict what impact these uncertainties will have on the future financial operation of the Company.
17
l Maine Yankee Atomic Power Company Form 10-K - 1992 i
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) j l
liouidity The Company bills its customers under a formula rate based on its cost of service.
Unlike traditional utility ratemaking, where rates are based on a test-year rate base and total revenue requirements, the Company's rates consist of its actual costs of providing service each month, regardless of the production level of the Plant, plus the costs, as determined by the FERC in periodic rate cases, of the following items:
decomm(issioning1) return on comm equity; (2) property depreciation; (3) expense; at the end of the Plant's operating life; plies inventory that will remain (4) amortization of the materials and sup and 5 amortization of the fuel the end of the Pl(an)t's operating life.
The remaining in the core at Company therefore recovers all of its actual or estimated costs monthly from its customers.
In addition to funding its short-term needs, the Company must also fund the payment of its long-term prior spent fuel disposal liability of 550.4 million and accrual of interest from April 7,1983, to the time of payment, which through 1992 amounted to 550.0 million.
Maine Yankee is funding an external trust to provide for payment of this liability Payment from the trust to the DOE is scheduled for not earlier than Januarf 1998.
The trust is funded at least semiannually by the Company throug deposits, which began in December 1985, with current projected semiannual deposits of approximately 50.6 million through December 1997. Deposits are expected to total approximately 566.7 million.
The estimated liability, including interest due at the time of disposal, is projected to be i
approximately $116.8 million.
The trust fund deposits plus estimated earnings are projected to meet this total liability if funding continues without material changes.
The Company must also provide for the eventual decommissioning of the Plant at the end of its operating life.
The Company's most recent study completed in 1987 by an external engineering consultant estimated the cost of decommissioning to be 5142,478,000 plus a contingency of $35,620,000 for a total of $178,098,000 (in mid-1987 dollars).
The Company is currently allowed to collect 59,073,943 annually in rates, based on the FERC-approved rate case settlement amount of $167,000,000 (in mid-1987 dollars) with J
assumed interest income earnings by the trust funds of 6.30% and estimated inflation of the $167,000,000 at 5.00% per year until time of expenditures for decommissioning.
The amounts collected in cost of service are being deposited into an external trust. These amounts, together with the trust earnings, will be used to meet the Company's decommissioning obligation.
The Company recognizes the relative uncertainties associated with decommissioning, including its changing technology and the possibility of new requirements of law, and therefore recognizes the need to monitor and l
adjust decommissioning collections through supplemental rate filings with the FERC.
In anticipation of such a rate filing, the Company initiated a new decommissioning cost study by an external engineering consultant in early 1993.
4 e
I 18
Maine Yankee Atomic Power Company Form 10-K - 1992 t
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX OF FINANCIAL INFORMATION The information required to be furnished in response to this Item is submitted on the following pages:
Pace Report of Independent Public Accountants 20 Financial Statements:
Statement of Income for each of the three years ended December 31, 1992 21 Balance Sheet at December 31, 1992 and 1991 22 Statement of Capitalization at December 31, 1992 and 1991 24 Statement of Changes in Common Stock Investment for each of the three years ended December 31, 1992 25 Statement of Cash Flows for each of the three years ended December 31, 1992 26 Notes to Financial Statements 27 L
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I j
l 19
Maine Yankee Atomic Power Company.
Form 10-K - 1992
~
REPORT 0F INDEPENDENT PUBLIC ACCOUNTANTS TO THE BOARD OF DIRECTORS OF MAINE YANKEE ATOMIC POWER COMPANY:
We have audited the accompanyino balance sheet and statement of t
~
capitalization of MAINE YANKEE ATOMIC POWER COMPANY (a Maine corporation) as of December 31,1992 and 1991, and the related statements of income, changes in common stock investment and cash flows for each of the-three years in the period ended December 31, 1992.
These financial statements and the schedules listed in the index of financial statement schedules are the responsibility of the Company's management.
Our responsibility is to i
express an opinion on these financial statements and schedules based on our 3
audits.
We conducted our audits in accordance with enerally accepted auditing Thosestandardsrequirethatwepfanandaerformtheauditto standards.
obtain rearonable assurance about whether the financia' statements are free of material misstatement.
An audit includes examining, on a test basis l
evidence supporting the amounts. and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MAINE. YANKEE ATOMIC i
POWER COMPANY as of December 31,1992 and 1991, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1992, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedules listed in the index of financial statement schedules are presented for purposes' of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements.
These schedules have been subjected to the
~!
auditing procedures applied in the audits of the basic financial statements and, ir car opinion, fairly state in all material respects the financial data re4cired to be set forth therein in relation to the basic financial statements taken as a whole.
t l
h{p fI
(
ARTHUR ANDERSEN & CO.
[
Boston, Massachusetts, January 29, 1993.
i
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[
Maine Vankee Atomic Power Company Form 10-K - 1992 r
Maine Yankee Atomic Power Company STATEMENT OF INCOME (Dollars in Thousands Except Per Share Amounts)
Year Ended December 31.
1222 1121 ll2.Q ELECTRIC OPERATING REVENUES
$187.259 $166.471
$178.524 OPERATING EXPENSES i
Fuel Amortization (Note 1) 17,000 23,092 21,804 Disposal Cost (Note 1) 5,192 5,915 2,323 Operation 80,414 67,527 72,284 Maintenance 31,209 16,868 29,905 Depreciation (Note 1) 15,388 14,655 13,885 Decommissioning (Note 1) 9,074 9,074 9,074 i
Taxes Federal and State Income (Note 2) 629 (1,036)
(444)
Local Property 11.289 10.317
-9.371 i
Total Operating Expenses 170.195 146.412 158.202 OPERATING INCOME 17,064 20,059 20,322 OTHER INCOME (EXPENSE) l Allowance for Equity Funds Used During Construction (Note 1) 57 103 162 For Nuclear Fuel (Note 1)
Other, Net 5.365 4.27,2 4.163 4
INCOME BEFORE INTEREST CHARGES 22.486 24.384 24.647 INTEREST CHARGES Long-Term Debt (Note 5) 8,790 8,411 4,489 Fuel Disposal Liability (Note 1) 3,593 5,553 6,821 Fuel Financing Notes (Notes 6 and 7) 1,041 1,739 4,368 Other Interest Charges (Note 4) 169 361 506 Allowance for Borrowed Funds Used During Construction (Note 1)
(64)
(129)
(170)
For Nuclear Fuel (Note 1)
(216)
(414)
(426)
Total Interest Charges 13.313 15.521 15.588 NET INCOME 9,173 8,863 9,059 Dividends on Preferred Stock 779 494 538 EARNINGS APPLICABLE TO COMMON STOCK
$ 8,394 $ 8,369 S 8.521 SHARES OF COMMON STOCK OUTSTANDING 500,000 500.000 500.000 1
EARNINGS PER SHARE OF COMMON STOCK 16.79 $
16.74 17.04 DIVIDENDS DECLARED PER SHARE OF COMMON STOCK
$ 16.85 $
16.70 17.05 The accompanying notes are an integral part of these financial statements.
i 21-
Maine Yankee Atomic. Power-Company
~}
Form 10-K -.1992 i
.i Maine Yankee Atomic' Power Company BALANCE SHEET j
(Dollars in Thousands)
ASSETS December 31.
j L9.21 1911 ELECTRIC PROPERTY, at Original Cost I
Less: Accumulated Depreciation and Amortization
~
$368,952 (Note S) (Sch. V) 5384,664 (Note 1) (Sch. VI) 163.887 149.625 220,777 219,327-l Construction Work in Progress 3.705 21.203 Net Electric Property 224.482 240.530 NUCLEAR FUEL, at Original Cost
.l (Note 1) (Sch. V)
Nuclear Fuel in Reactor 84,061 104,368-1 Nuclear Fuel - Spent.
358,201 294,159-Nuclear Fuel - Stock 12.222 29.561 j!
454,484 428,088 Less: Accumulated Amortization (Note 1)
(Sch. VI) 401.552 384.112' i
52,932 43,976 i
Nuclear Fuel in Process
'21.741 3.922 J
Net Nuclear Fuel 74.673 47.898 j
t 4
Net Electric Property and Nuclear Fuel-299.155 288.428_
CURRENT ASSETS Cash and Cash Equivalents 28
.123
~ Accounts Receivable 25,869 20,158 Materials and Supplies, at Average Cost (Note 1) 13,133 12,550-Prepayments 5.119
-5.511 i
j Total-Current Assets 44.149 38.342
'l DEFERRED CHARGES AND OTHER ASSETS i
Trust Funds (Note 1),
i Fuel Disposal 80,655 71,110-Plant Decommissioning 77,686 64,094 j
Accumulated Prepaid Income-Taxes-(Note 2) 11,533 9,362 l
Other Deferred Charges and Other Assets 8.015 15.545 Total-Deferred Charges:and Other Assets 177.889.
160.111 5521.193.
5486.881 j
The accompanying notes are. an integral part. of.these financial: statements.
k 22 l
f Maine Yankee Atomic Po er Company Form 10-K - 1992 Maine Yankee Atomic Power Company BALANCE SHEET (Dollars in Thousands)
STOCKHOLDERS' INVESTMENT AND LIABILITIES December 31.
19E 1991 CAPITALIZATION (See Separate Statement)
Common Stock Investment S 67,503
$ 67,914 Redeemable Preferred Stock 20,400 6,000 Long-Term Debt 89.390 98.634 Total Capitalization 177.293 172.548 j
LONG-TERM FUEL DISPOSAL LIABILITY (Note 1) 100.364 96.771 NUCLEAR FUEL FINANCING NOTES (Notes 6 and 7) 21.000 26.000
+
CURRENT LIABILITIES Notes Payable to Banks (Note 4) (Sch. IX) 4,465 2,440 Current Sinking Fund Requirements i
(Notes 5 and 8) 9,841 9,849 Accounts Payable 16,314 26,376 Fuel Disposal Cost Payable (Note 1) 1,489 1,559 Dividends Payable 2,512 2,173 i
Accrued Interest and Taxes 3,473 3,715 Other Current Liabilities 334 486 Total Current Liabilities 38.428 46.598 COMMITMENTS AND CONTINGENCIES (Note 12) r RESERVES AND DEFERRED CREDITS Plant Decommissioning Reserve (Note 1)
(Sch. VIII) 78,486 64,870
[
Deferred Credits Accumulated Deferred Income Taxes (Note 2).
61,809 64,572 t
DOE Decontamination and Decommissioning Fee 26,400 Unamortized Investment Tax Credits (Note 2) 7,714 8,252 Unamortized Gains on Reacquired Debt (Note 1) 5,336 5,907 i
Other Deferred Credits 4.363 1.363 Total Reserves and Deferred Credits 184.108 144.964 l
$521.193 5486.881
-I The accompanying notes are an integral part of these financial statements.
l t
23
Maine Yankee Atomic Power Company Form 10-K - 1992 L
Maine Yankee Atomic Power Company STATEMENT OF CAPITALIZATION (Dollars in Thousands) i December 31.
1221 1911 COMMON STOCK INVESTMENT Common Stock, 5100 Par Value, 500,000 Shares Authorized and Outstanding
$ 50,000 5 50,000 Other Paid-in Capital 16,712 16,728 Capital Stock Expense (511)
(151)
Gain on Redemption of Preferred Stock 1,100 1,095 Premiums on Preferred Stock 88 97-i Retained Earnings (Note 9) 114 145 67.503 67.914 REDEEMABLE PREFERRED STOCK 7.48% Series, $100 Par Value, Authorized 60,000 Shares in 1992 and 170,000 in 1991 Outstanding 60,000 in 1992 and 66,000 in 1991 ~(Note 8) 6,000 6,600
'l 8.00% Series, $100 Par Value, Authorized i
200,000 Shares in 1992, Outstanding 150,000 in 1992 (Note 8) 15.000 21,000 6,600 Less:
Current Sinking Fund Requirements 600 600 20.400 6.000
'i LONG-TERM DEBT (Note 5)
First Mortgage Bonds Series A - 9.10 % due May 1, 2002 27,500 30,000 Series B - 8 1/2% due May 1, 2002 16,741 18,499 Series C - 7 5/8% due May 1, 2002 4,419 4,419 Series D - 8.79 % due May 1, 2002 50.000 55.000 98,660 107,918 Less:
Current Sinking Fund Requirements 9,241 9,249 Unamortized Debt Discount, Net of Premium 29
-35 89.390 98.634 Total Capitalization
$177.293 5172.548 l
The accompanying notes are an integral part of these financial statements.
i 24
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company STATEMENT OF CHANGES IN #'"NON STOCK INVESTMENT for the Three Years Es.Jed December 31, 1992 (Dollars in Thousands)
Amount at Retained Shares Par Value Other. Net Earninos Total Bal ance-December 31, 1989 500,000 550,000
$17,831 5
130 567,961 Add (Deduct):
Net Income 9,059 9,059 Cash Dividends Declared on -
Common Stock (8,525)
(8,525)
Preferred Stock (538)
(538)
Redemption of 4
Preferred Stock 2
2 Other (2)
(2)
Bal ance-December 31, 1990 500,000 50,000 17,831 126 67,957 Add (Deduct):
Net Income 8,863 8,863 Cash Dividends Declared on -
Common Stock (8,350)
(8,350)
Preferred Stock (494)
(494)
Redemption of Preferred Stock 4
4 Other (66)
(66)
Balance-December 31, 1991 500,000 50,000 17,769 145 67,914 Add (Deduct):
i Net Income 9,173 9,173 i
Cash Dividends Declared on -
Common Stock (8,425)
(8,425)
Preferred Stock (779)
(779)
Redemption of j
Preferred Stock 5
5 Other (385)
(385)
Balance-December 31, 1992 500.000
$50,000 517,389 S
114 $67,503 The accompanying notes are an integral part of these financial statements.
25
Maine Yankee Atomic Power Company Form 10-K - 1992 m ee vaakee : tem e h wee C -reny STATEMENT OF CASH FLOV5 (Dollars in Thousanos)
Veer fades Decembee ?!.
12H 1211 if 2 Coeratina Activities Net income
$ 9,173
$ B,863
$ 9.059 Items hot Reoutring (Providing) Cash Fuel Amortization 17,000 23,092 21,804 Depreciation and Decomissioning 24,462 23,729 22,959 Deferred Income Taxes and Investment Tax Credits. Net (5,472)
(8.784)
(5,681)
Allowance for Equity Funes used for Nuclear Fuel and During Construction (57)
(103)
(162)
Long-Term Fuel Disposal Interest Fet of AFN 3,432 5,242 6,571 Other, Net 9,630 (7,638)
(3,418)
Changes in Certain Assets and Liabilities Accounts Receivable (5,711)
(1,727)
(276)
Other Current Assets (191)
(1,276)
(1,784)
Accounts Payable (5,004) 2,432 5,901 Accrued Interest and Taxes (242)
M (97)
Net Cash Provided by Operating Activities 47.020 4,1j]1 1(J,]d Investino Activities Acquisition of Nuclear Fuel (17,815)
(17,563)
(10,508)
Construction of Electric Property (6,659)
(22,681)
(17,928)
Changes in Accounts Payable - Investing Activities - Nuclear Fuel 4,422 282 (10,405)
- Construction of Electric Property (1,770) 8,421 754 Investment income in Decomissioning Trust 4,542 3,5B7 3,436 Trust Fund Investments Fuel Disposal (9,545)
(11,601)
(11.3B7)
Plant Decomissioning (1LL91)
(12.665)
(12.545) 9 Net Cash Used by Investing Activities (40.417)
(jLjl2)
(igjd)
Financino Activities issuances (Recemptions)
Bank Notes, Net 2,025 2,385 (8,945)
Fuel Financing Notes, Net (5,000)
(38,000) 24,000 Long-Term Debt Issuances 60,000 Redemptions (9,258)
(8,036)
(2,607)
Preferred Stock Issuances 15,000 Recemptions (600)
(598)
(277)
Oividend Payments Comon Stock (B,375)
(8.475)
(8,475)
Preferred Stock fa90)
(505)
<!44)
Net Cash Provided (Usee) by Financing Activities (6 a99) 6,771 3.lf2 Net increase (Decrease) in Cash and Cash Ecuivalents (95) 92 (555)
C Cash and Casn Ecutvalents at Seginning of Year
!23 4!
!96 Cash and Cash Equivalents at End of Year 7e 3
'?3'
$ _ 41 Supplemental disclosure of cash flew information:
Cash paid during the year for:
Interest (net of amounts capitalized)
$ 10,388 1 9,791 5 9.331 Income taxes 1 6,038 1 6.634 5 5.227 Disclosure of accounting policy:
For purposes of the statement of cash flows, tre Com any censicers all hignly liovio +rstruments purenased having a maturity of three months er less to ce casn eouivalents.
The accompanying notes are an integral cart of trese f manctal statements.
26
Maine Yankee Atomic Power Company i
Form 10-K - 1992 l
Maine Yankee Atomic Power Comoany I
NOTES TO FINANCIAL STATEMENTS
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES i
The Company:
The Company owns and operates a pressurized-water nuclear-powered electric generating plant with a current rated net i
capacity of approximately 860 megawatts (the " Plant").
The Plant commenced commercial operation on January 1,1973.
The following New England electric utilities own all of the Company's common stock:
Ownership Soonsor/ Participant Interest Central Maine Power Company 38%
New England Power Company 20 The Connecticut Light and Power Company 12 Bangor Hydro-Electric Company 7
Maine Public Service Company 5
Public Service Company of New Hampshire 5
Cambridge Electric Light Company 4
Montaup Electric Company 4
Western Massachusetts Electric Company 3
Central Vermont Public Service Corporation
_2
),9,0%
0 i
For a period commencing January 1,1973, extending for thirty years f
thereafter in accordance with the Power Contracts, as amended, i
subsequently extended by the Additional Power Contracts from 2003 to 1
the end of the useful life of the Plant and completion of all licensing and financial obligations, and subject to certain limitations, each Sponsor receives its entitlement percentage of Plant output and is obligated to pay its entitlement percentage of the Company's total costs, including a return on invested capital, regardless of-the level of operation of the Plant.
The Plant's operating license expires in 2008.
Reaulation: The Company is subject to the regulatory authority of the Federal Energy Regulatory Commission ("FERC"), the Nuclear Regulatory Commission ("NRC") and the Maine Public Utilities Commission ("MPUC")
and other federal and state agencies.as to rates, accounting, operations and other matters.
Deoreciation:
Depreciation is provided using a composite remaining life method designed to fully depreciate the original cost of_ electric plant over the H ant operating life.
Under the composite _ method, at i
the time depreciable property is retired, the original cost, plus cost of removal, less salvage, of such property is charged to accumulated depreciation.
27
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Comoany r
NOTES TO FINANCIAL STATEMENTS
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Decommissionino:
The Company accrues for estimated decommissioning costs in accordance with FERC rate orders.
The FERC approved an uncontested settlement by order dated September 20, 1988, for an annual decommissioning charge of $9,073,94? based on estimated decommissioning costs of $167,000,000 (in mid-1987 Jollars), exclusive of any income tax liability, effective August 16. 1988.
The Company's most recent study, conducted in 1987 by an external engineering consultant, estimated decommissioning costs, which include the costs of removal and reclamation of the pl ant site, to_ be
$142,478,000 plus a contingency of $35,620,000 for a total of
$178,098,000 (in mid-1987 dollars).
The Company recognizes the relative uncertainties associated with decommissioning, including its changing technology and the possibility of new requirements of law, and therefore recognizes the need to monitor and adjust decommissioning collections through supplemental rate filings with the FERC.
In anticipation of such a rate filing, the Company initiated a new decom-missioning cost study by an external engineering consultant in early 1993.
f Funds collected for decommissioning are deposited in an external irrevocable trust pending their ultimate use.
Earnings on the investments in the decommissioning trust are reinvested.
The trust r
funds are restricted for use in paying'for the decommissioning of the Pl ant.
The investment income of the trust is recorded as an addition to the plant decommissioning reserve in accordance with the Company's rate-making policies.
Amortization of Nuclear Fuel: The cost of nuclear fuel in the reactor is amortized to Fuel Expense based on the ratio of energy produced during the period to the estimated total core capability.
The Company amortizes to expense the estimated costs of the unburned nuclear fuel which is expected to be in the reactor core at the i
expiration of the Plant's NRC operating license life in 2008.
These costs are being amortized over the period ending October 2008.
Accumulated amortization for 'last core fuel for 1992 and 1991 was
$7,248,000 and $6,118,000, respectively.
Federal Department of Enerav
("00E")
Decontamination and i
Decommissionina Assessment: Title XI of the Energy Policy Act of 1992 (the " Policy Act") provides for decontaminating and decommissioning DOE's enrichment facilities to be partially funded by a special-
+
assessment against domestic utilities. Under the Policy Act the total amount collected for a fiscal year will not exceed 5150,000,000 escalated by the Consumer Price Index
(" CPI") annually, and tb collection of the amounts will cease after the earlier of (1) 15 years after the date of the enactment or (2) the collection of $2,250,000,000 (to be escalated by the CPI annually).
Each utility's share of the assessment is to be based on its cumulative consumption of DOE enrichment services.
28
Maine Yankee Atomic Power Company Form 10-X - 1992 Maine Yankee Atomic Power Company
.i i
NOTES TO FINANCIAL STATEMENTS
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Maine Yankee's preliminary estimate of its annual assessment is i
51,760,000 (1.17% of the 5150,000,000).
As of year-end 1992, the Company had accrued its estimated obligation of $26,400,000 related to prior years' usage, with an equal amount charged to Nuclear Fuel-Spent, to be paid over the 15-year period beginning October 1, 1992.
Amortization of Materials and Supolies:
The Company began reserving for materials and supplies inventory that is expected to be unrecoverable at the end of the Plant's life.
This amortization expense is based on the current inventory balance less the accumulated amortization.
This cost is being amortized over the period ending October 2008 on a monthly basis using the prior month's ending bal ances.
Accumulated amortization for 1992 and 1991 was 52,650,000 and $1,914,000, respectively.
Fuel Disposal Cost:
In 1983 the Company entered into a contract with the DOE for disposal of its spent nuclear fuel, as required by the Nuclear Waste Policy Act of 1982, pursuant to which a fee of $1.00 per megawatt-hour is assessed against current generation and is paid to the DOE quarterly. The Company also has an obligation of $50,394,000 with respect to generation prior to April 7,1983, all of which the Company has already collected from its customers, and for which a reserve was I
established but not funded.
The Company has elected under terms of this contract to make a single payment of this obligation prior to the 4
first delivery of spent fuel to DOE, scheduled to begin no earlier than 1998 (See Note 12).
Interest on the obligation accrues at the 13-week Treasury Bill rate compounded on a quarterly basis from April 7,1983, through the date of the actual payment and is billed under the terms of the Power Contract.
Interest accrued and billed through December 31, 1992, amounted to 549,970,000.
The Company has formed a trust to provide for payment of this long-term fuel obligation. The total spent fuel fund balance, held with an independent trustee, as of December 31, J
1992, was $80,655,000 (including interest earned) and is included in Deferred Charges and Other Assets on the accompanying balance sheet.
i Funding of the trust is being made through deposits by the Company at i
least semiannually, which began in December 1985, with current projected semiannual deposits of approximately 50.6 million through December 1997.
Deposits are expected to total approximately t'
$66.7 million.
The trust fund deposits plus estimated earnings are projected to meet the total estimated future liability of 5115.8 million at January 31, 1998.
i h
29 4
Maine Yankee Atomic Power Company Form 10-K - 1992 i
Maine Yankee Atomic Power Company i
NOTES TO FINANCIAL STATEMENTS
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Allowance for Funds Used Durino Construction ("AFC") and Allowance for i
Funds Used for Nuclear Fuel ("AFN"):
In accordance with prior rate I
making treatment, the Company earns a current return on up to 50% of l
Construction Work in Progress ("CWIP") and 50% of Nuclear' Fuel in Process ("NFIP"),
subject to certain limitations.-
The Company capitalizes the net cost of borrowed funds and the allowed rate of i
return on equity funds used to finance its remaining construction and nuclear fuel acquisition costs as AFC and AFN.
The amount of the allowance recorded is determined by multiplying the applicable average
[
monthly balance of CWIP and NFIP by the weighted average cost of j
capital used to finance the respective additions.
The.following table contains the rates used for the most recent three annual periods:
AFC AFN on CWIP on NFIP j
1992 9.94%
5.97%
1991 10.18 9.86 1990 10.80 11.14 Unamortized Gain or loss on Reacouired Debt: Gains and losses on bonds reacquired to satisfy sinking fund requirements of First Mortgage Bonds i
are deferred and amortized to income over the remaining original terms of the applicable series as prescribed by the Uniform System of i
Accounts of the FERC.
j ta l
i
}l 1
l 30~
-)
l
i Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic power Company NOTES TO FINANCIAL STATEMENTS 2.
INCOME TAX EXPENSE The components of federal and state income taxes reflected in the
[
Statement of Income are as follows:
Year Ended December 31.
I 1921 J331 1990 I
(Dollars in Thousands)
Federal i
Current
$ 4,590
$ 6,493
$ 3,518 Deferred (4,582)
(5,918)
(6,182)
Investment tax credits, net
(
538)
(2.535) 1.029 l
(
530)
(1.960)-
(1.635)
State Current 1,511 1,256 1,262 Deferred
.Dj!2)
(332)
(71) 1,.l5. 9 924 1.191 5
Total federal and state income taxes 629
$(1.036)
(444)
Deferred income taxes are provided to recognize the income tax effect of reporting certain transactions in different years for income tax and r
financial reporting purposes in accordance with the rate-making policies of the FERC. Provisions for deferred income taxes reflect the tax effect of all timing differences.
The principal components of deferred federal and state income taxes are as follows:
f Year Ended December 31 (Dollars in 1992 1991 1990 i'
thousands)
Federal State Federal State Federal State Depreciation 5
(349) S(101) 5(2,292) 5(734) $(1,401)~$(404)
Decommissioning (1,219)
(267)
(1,219)
(267)
(2,196)
(243)
. Amortization-1ast core fuel and materials & supplies (453)
(145)
(528)
(169)
(600)
(173)
Alternative minimum tax 17 (876).
(838)
Fuel contract termination fees (286)
(92) 932 299 t
Flowback of excess deferrals (1,085)
(1,477)
(1,463)
Deferred maintenance
. costs 1,052 303 Other, net (1.207) 253 (458) 539 (736) 446 5(4.582) $(152) 5(5.918) 5(312) 5(6.182) 5 Q )-
5 Total deferred taxes 31
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS 2.
INCOME TAX EXPENSE (continued)
Excess deferrals were created as a result of the reduction in the federal income tax rate to 34 percent. The excess deferral related to accelerated tax depreciation will be flowed back as a cost of service reduction over the period that the depreciation timing difference reverses -(ictm, the period that straight-line depreciation exceeds accelerated depreciation). The excess deferred tax reserve related to other book / tax timing differences is being flowed back on a straight-line basis over the remaining book life of the plant facilities.
Investment tax credits utilized to reduce federal income taxes currently payable are deferred and amortized over the lives of the related assets.
The following table reconciles the statutory federal income tax rate to the effective tax rate for financial reporting purposes.
1992 1991 1990 (Dollars in Thousands)
Amount Amount Amount Statutory federal income-tax rate
$ 2,939 34.0 $ 2,347 34.0
$ 2,524 34.0 Increase (reduction) in taxes resulting from:
Investment tax credits (406)
(4.7)
(1,216) (17.6)
(377)
(5.1)
Flowback of excess deferred income taxes (1,085)
(12.6)
(1,477) (21.4)
(1,464) (19.7)
Non-taxable interest income:
Spent Fuel Trust (1,811)
(21.0)
(1,516) (22.0)
(1,257) (16.9)_
Non-Qualified Decom-missioning Trust (440)
(5.1)
(386)
(5.6)
(1,356)-(18.3) i Other 273 3.2 288 4.2 295 4.0 Calculated rate 5
(530)
(6.2) $(1.960) (28.4)
$(1,635) (22.0)
In February 1992, the Financial Accounting Standards Board ("FASB")
issued SFAS No 109 on accounting for income taxes effe.tive for fiscal years beginn ', after December 15, 1992.
The Company will adopt the newly reviser s.andard effective January 1,1993, and will not restate prior periods.
The standard requires the use of the liability method under which existing deferred taxes will be adjusted currently to reflect the effect of tax rates applicable to the years in which these taxes would become payable.
t 32 I
1 Maine Yankee Atomic Power Company
~
Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS
- 2. INCOME TAX EXPENSE (continued)
Based on current ratemaking and tax law, and since income taxes are fully recoverable as a component of the Company's cost of service rate, there will not be an impact on earnings upon adoption of the new l
standard. There will be adjustments required to accumulated deferred taxes and the recognition of-a liability to customers for deferred i
taxes stablished in excess of the amount calculated using income tax rates applicable to future years.
3.
HOST RECENT RATE CASE In January 1988 the Company filed a request with the FERC to modify certain billing calculations and to increase its collection for decommissioning.
The request sought FERC approval to decrease the level of return on common equity from 13.6% to 13.5%, to provide for depreciation expense based on the recognition of shorter useful lives for certain classes of assets than had previously been assumed, to provide for the amortization of materials and supplies and the last fuel core and to increase the annual decommissioning collection from
$4,796,000 to $14,466,467 based on a total estimated cost of
$178,098,000 and on full recovery by 1998, rather than over the NRC operating license life of the Plant, i.e., to 2008.
After discussions among the Company, the FERC Staff, and intervenors, and rejection by FERC of the shorter decommissioning collection period, a settlement agreement resolving all outstanding issues under this rate proceeding was approved by the FERC by order dated September 20, 1988, with rates effective August 16, 1988.
The settlement agreement provided, among other things, for the following:
l (1)
Rate of return on common equity at 12.9% per annum.
(2) Annual decommissioning collections of $9,073,943 (based on a total l
estimated cost of S167,000,000), exclusive of any income tax liability for the remaining licensed life.
(3)
Depreciation expense based on the recognition of shorter useful lives for certain classes of assets.
i 1
(4)
Amortization of materials and supplies and last core fuel.
(5)
Agreement by the Company not to propose an increase and by other parties not to make a
filing to decrease the annual decommissioning charges to take effect prior to February 16, 1991.
i (6)
Agreement that no party would oppose a FERC order requiring that the Company make certain filings in the event that the license i
term of the Plant is modified by the NRC.
l The Company is planning to file a rate case with the FERC in the second hal f of
- 1993, in part to reflect the conclusions of a new decommissioning cost study initiated in early 1993.
33
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS 4.
NOTES PAYABLE TO BANKS t
The Company had bank lines of credit totaling $21,000,000 as of I
December 31, 1992, all of which require an annual fee of 1/4%. As of December 31, 1992, $4,465,000 was outstanding under the lines of credit.
The average level of borrowings on bank notes was lower during 1992 as compared to 1991, primarily due to the repayment of short-term borrowings with the proceeds received from the Series D Bond issuance on March 14, 1991.
5.
FIRST MORTGAGE BONDS On March 14, 1991, the Company issued $60,000,000 of First Mortgage Bonds, Series D (Sinking Fund) 8.79% due 2002, through a private placement to institutional investors. The net proceeds received by the Company from the sale of Series D Bonds were applied to the repayment of bank borrowings incurred to finance the Company's construction program.
The annual sinking fund requirements of outstanding Series A, B, C and D First Mortgage Bonds and bonds repurchased in advance for each of the five years ending December 31, 1996, are as follows:
Bonds Repurchased i
Sinking in Advance Fund at December 31. 1992 l
1 1992
$9,775,000
$534,000 1993 9,775,000 81,000 1994 9,775,000 1995 9,775,000 1996 9,775,000 Under the terms of the Indenture securing the First Mortgage Bonds, substantially all electric plant of the Company is subject to a first mortgage lien.
6.
SECURED CREDIT AGREEMENT l
In 1989 the Company entered into a secured credit agreement with a group of banks including the Bank of New York ("BNY"), which is also acting as the agent bank, under which the Company may borrow amounts up to 550,000,000 to finance corporate expenditures.
Borrowings are i
secured by the Company's nuclear fuel inventory as defined and certain-rights under the Power Contracts and Capital Funds Agreements. Under the credit agreement as amended in 1992, the Company has four rate options for financing its interim requirements:
(1) a rate based on the higher of BNY's prime rate or a rate based on overnight federal funds transactions plus 1/4%; (2) the LIBOR rate plus 1/2%; (3) an adjusted certificate of deposit rate plus 5/8%; and (4) a rate established by bid. A quarterly commitment fee of.35% per-annum is j
34
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS T
6.
SECURED CREDIT AGREEMENT (continued) required on the unused portion of the f acility. The credit agreement has a three-year term, which may be extended for an additional year on each anniversary by agreement of the Company and the banks. The agreement was I
extended for an additional year in 1992 with a current maturity date of August 1995. Certain other information relating to this loan arrangement is as follows:
Year Ended December 31.
R92 JS91 1990 9
9 (Dollars in Thousands)
Promissory notes outstanding e
at end of period
$21,000 $26,000
$46,000 Average daily outstanding borrowings
$22,527 $20,441
$40,560 Highest level of borrowing
$36,000 $50,000
$50,000 Annual interest rate at end of period 4.21%
5.57%
7.27%
Effective average annual interest rate 4.62%
6.82%
8.78%
1 7.
EURODOLLAR REVOLVING CREDIT AGREEMENT In January 1990 the Company entered into a Eurodollar Revolving Credit Agreement with a group of major international banks including Union Bank of Switzerland, which is also acting as agent bank, under which the Company may borrow up to $35,000,000. Under the facility each loan is due one year after the date of the loan, unless an earlier termination date applies under the agreement, and bears interest at a LIBOR-based rate plus 5/8%.
A commitment fee of.35% on the unused line is payable quarterly.
The loans are secured by a second lien on the Company's nuclear fuel i
inventory (excluding fuel in the reactor) and on certain rights under its Power Contracts and Capital Funds Agreements requiring payments or financing of fuel-related costs.
Certain other information relating to the Eurodollar Revolving Credit l
Agreement is as follows:
Year Ended December 31.
1992 1991 1990 (Dollars in Thousands)
Promissory notes outstanding at end of period
$18,000 i
S 4,285
$ 8,859 Average daily outstanding borrowings Highest level of borrowings
$30,000
$28,000 Annual interest rate at end of periods 9.05%
Effective average annual interest rate 8.03%
9.00%
35
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS 8.
REDEEMABLE PREFERRED STOCK 7.48% Series. The Company must redeem and cancel 6,000 share' annually s
of the 7.48% Series Preferred Stock at par value plus accrued dividends. At the election of the Company, up to an additional 6,000 shares may be redeemed and cancelled at par plus accrued dividends on each redemption date. The optional provision is not cumulative.
The annual sinking fund requirement through December 31,1997, is $600,000.
The Company may also redeem, in whole or in part, any additional shares of the 7.48% Series Preferred Stock upon not less than thirty nor more than fifty days' notice at $101.50 per share on or before December 31, 1997, and at amounts decreasing periodically thereafter to $100.00 per share, in each case plus accrued dividends.
Preferred Stock repurchased for the sinking fund in advance and not cancelled amounted to no shares at December 31, 1992, no shares at December 31, 1991, and 20 shares at December 31, 1990.
8,00% Series. On September 22, 1992, the Company issued $15,000,000 of Cumulative Preferred Stock, 8.00% Series (Sinking Fund), through a private placement to institutional investors.
The net proceeds received by the Company from the sale of the Preferred Stock were applied to the repayment of bank borrowings incurred to finance the Company's construction program.
At the option of the company,'any time on and after October 1, 1997, share.; of the Cumulative Preferred Stock, 8.00% Series are redeemable at redemption prices decreasing from $105.33 per share on or after October 1,1997, to October 1, 2007. No shares of Cumulative Preferred Stock 8.00% Series may be redeemed, directly or indirectly, prior to October 1, 1997.
Mandatory sinking fund redemptions of the 8.00%
Series sharos begin October 1, 2002, and each October 1 thereafter with a non-cumulative optional provision to redeem additional shares at a price of $100 per share plus divid eds accrued.
9.
RETAINED EARNINGS Under terms of the most restrictive test in the Company's First Mortgage Indenture and the Company's Articles of Incorporation, no dividend may be paid on any class of its stock unless the Company is in compliance with specific equity ratio-requirements.
Through December 31,
- 1992, the Company is in compliance with these requirements.
- 10. DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS The methods and assumptions used to estimate the fair value of each class of financial instruments for which it is practicable are discussed below.
The carrying amounts of cash and temporary investments approximate fair value because of the short maturity of these investments. The fair value of redeemable preferred stock, other notes and long-term obligations is based on quoted market prices for the same or similar issues.
36
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS l
- 10. DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
The estimated fair value of the Company's financial instruments as of December 31, 1992, is as follows:
(Dollars in Thousands)
Carrying Fair Amount Value Cash 3
28 5
28 Spent Fuel Trust 80,655 86,287 Decommissioning Trust 77,686 82,675 Redeemable Preferred Stock 20,400 20,817 Mortgage Bonds 98,660 108,964 Notes Payable 21,000 21,000 Anticipated regulatory treatment of any differences between fair value and carrying value of the Company's financial instruments is expected to be considered in the future rates charged by the Company.
- 11. EMPLOYEE AND POSTRETIREMENT BENEFITS l
The Company has two separate non-contributory defined-benefit pension plans which cover substantially all of its union and non-union employees.
The Company's funding policy is to contribute amounts to the separate plans which are sufficient to meet the funding requirements set forth in the Employee Retirement Income Security Act
("ERISA"), plus such additional amounts as the Company may determine to be appropriate. Total pension expense related to these plans amounted to $1,434,000 in 1992, 5991,000 in 1991 and $792,000 in 1990.
Plan benefits under the union retirement plan are based on average career earnings and length of employee service.
Plan benefits under the non-union retirement plan are based on average final earnings, as defined within the plan, and length of employee service.
A summary of the components of net periodic pension cost for the union and non-union defined benefit plans in 1992,1991 and 1990 and the total contributions charged to pension expense is as follows:
Union Non-Union (Dollars in Thousands) 1992 1991 1990
'1992 1991 1990 Service Cost-Benefits Earned During the Period
$ 247 5 185 5 162 $ 895 5 628 5 546 Interest Cost on Projected Benefit Obligation 182 152-122 731 583 490 Return on Plan Assets Loss (Gain) (188)
(356) 25 (512) -(1,024)-
76 Net Amortization and Deferral 5
206 (169) 74 617 (460)
Net Periodic Pension Cost
$ [46
$ 18J7
$ 140 $1.188 $
804 5 652 46 37 3
3
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS
- 11. EMPLOYEE AND POSTRETIREMENT BENEFITS (continued)
Assumptions used in the accounting for the union and non-union defined benefit plans in 1992, 1991 and 1990 were as follows:
Weighted Average Discount Rate 8.50%
Rate of Increase in Future Compensation Levels 7.00%
Expected Long-Term Return on-Assets 8.50%
The following table sets forth the actuarial present value of pension benefit obligations, the funded status of the plans and the liabilities recognized on the Company's balance sheet at December 31, 1992 and 1991:
Union Non-Union (Dollars in Thousands)
M M
M M
Actuarial Present Value of Benefit Obligations:
Vested Benefit Obligation
$1,163
$ 874
$3.202
$2,579 Accumulated Benefit Obligation
$1,510
$1,258
$4,053
$3,200 Projected Benefit Obligation
$2,328
$2,010
$9,277
$7,582 Plan Assets at Market Value (Primarily, Stocks and Bonds) 2.797 1.841 6.955 5.447 Funded Status - Projected Benefit Obligation in Excess of (Less Than) Plan Assets (469) 169 2,322 2,135 Unrecognized Prior Service Cost 17 18 (26)
(14)
Unrecognized Net Gain (Loss) 173 98 (757)
(627)
Unrecognized Net Asset 353 375 473 505 Net Pension Liability Recognized in the Balance Sheet S
74
$_ 660
$2,012
$1,999 In addition to providing pension benefits, the Company provides certain health care and -life insurance benefits for substantially all of its qualifying employees.
These benefits are provided through insurance companies acting either as an insurer or plan administrator, and premiums are based on the benefits paid during the year.
The Company recognizes the cost of providing these benefits through charging expense in the current period.
The cost of health care and life insurance benefits, substantially all of which rel ates to active empl oyees, aggregated approximately $2,159,000 in 1992, $1,833,000 in 1991 and $1,759,000 in 1990.
38
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine YOnkee Atomic Power Company NOTES TO FINANCIAL STATEMENTS
- 11. EMPLOYEE AND POSTRETIREMENT BENEFITS (continued)
In addition, in 1989 the Company established an employee welfare benefit plan for non-union employees, to provide a systematic means of providing certain life, health and other postretirement benefits to eligible retired employees and their dependents.
In 1990 the Company began funding the employee welfare benefit plan for union employees.
The benefits of the plan will be provided through a trust fund established for the exclusive purpose of funding such benefits.
The trust fund will be funded by contributions by participants in the plan, if and to the extent such contributions are required under the plan, and contributions by the Comp Contributions expensed by the Company related to these plans.any. amounted to $331,000 in 1992, 5606,000 in 1991 and $1,218,000 in 1990.
The benefits provided under the employee welfare benefit plans will be limited to benefits for participants, dependents and beneficiaries which qualify as welfare benefits under Section 3(1) of ERISA or as life, sickness, accident or other benefits permitted to be provided through a " Voluntary Employees' Beneficiary Association" exempt from taxation to the extent permitted under Sections 501(c)(9) and 512 of the Internal Revenue Code and the regulations thereunder.
In December 1990, the FASB issued a new standard on employers' accounting for other postemployment benefits such as health care and life insurance.
The Company will adopt the new standard effective January 1, 1993, and will not restate prior periods. The new standard will require the accrual of the expected cost of such benefits during the employees' years of service and provides transition rules allowing the impact of the adoption to be included in annual expense over a 1
period not greater than 20 years.
The financial statements included herein will not be restated.
The preliminary estimate of the Company's transition obligation is 53.8 million based on an accumulated postretirement benefit obligation at January 1,1993, of approximately $6.0 million of which $2.2 million has been funded; however, this estimate could change significantly because of changes in projected health care costs, interest costs or other assumptions.
Had the new standard been adopted in 1992, the additional benefit cost charged to expense would have been minimal.
Management expects the effect of actual adoption in 1993 will be similar.
FERC has accepted accounting under the new standard for i
ratemaking purposes, accordingly management believes that these costs will be recoverable as a component of the Company's cost of service and i
this change is not expected to have a material impact on earnings.
(
- 12. COMMITMENTS AND CONTINGENCIES Construction:
The Company anticipates construction expenditures to amount to $18.2 million (inclusive of AFC) in 1993.
Nuclear Fuel:
The Company anticipates nuclear fuel expenditures of
$11.3 million (inclusive of AFN) for 1993 and $93.4 million (exclusive of AFN) for the period 1994 through 1997.
39
Maine Yankee Atomic Power _ Company l
Form 10-K
.1992 Maine Yankee Atomic Power Company i
NOTES TO FINANCIAL STATEMENTS
- 12. COMMITMENTS AND CONTINGENCIES (continued)
Nuclear Fuel Storace: Federal legislation enacted in 1987 directed the DOE to proceed with the studies necessary to develop and operate a
}
permanent high-level waste (spent fuel) disposal site at. Yucca Mountain, Nevada.
The legislation also provides for the possible l
development of a Monitored Retrievable Storage -("MRS")- facility and.
i abandons plans to identify and select a second permanent disposal site.
i An MRS facility would provide temporary storage for high-level waste -
l prior to eventual permanent disposal.
In late 1989 the DOE announced 1
that the permanent disposal site was not expected to open before 2010, although originally scheduled to open in 1998. Additional delays due to political and technical problems are probable.
Under the terms of a license amendment approved by the NRC in 1984, the present storage capacity of the spent fuel pool at the Plant will be i
reached in 1999 and after 1996 the available capacity of the pool will not accommodate a full-core removal. After consideration of available technologies, the Company elected to provide additional capacity by replacing the fuel racks in the spent fuel pool at the Plant to provide for additional storage capacity and, on January 25, 1993, filed with the NRC seeking authorization to implement the plan.
Maine Yankee l
believes that the replacement of the fuel racks, if approved, will
~
provide adequate storage capacity through the Plant's licensed operating life, but cannot predict with certainty whether the NRC authorization will be granted or whether or to what extent the storage capacity limitation at the Plant will affect the operation of the Plant or the future cost of' disposal.
Nuclear Insurance: In accordance with the Price-Anderson Act, the limit of liability. for a nuclear-related accident is approximately $7.8 billion.
The primary layer of insurance for the liability is _ $200-
_i million of coverage provided by the commercial insurance market. The.
i secondary coverage is approximately $7.6 billion, based on 115 licensed _
reactors.
The secondary layer is based on a retrospective premium j
assessment of 563.million per nuclear accident per licensed reactor, payable at a rate not exceeding $10 million per year per' accident.
In j
addition, the ~ retrospective premium is subject to inflation-based indexing at five-year intervals and, if the sum of all public liability claims and legal costs arising from any nuclear accident exceeds: the '
maximum amount of financial protection, each licensee can be assessed an additional - 5% ($3.15 million) of the maximum retrospective-
-l assessment.
j t
I
)
40
-1 l
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS
- 12. COMMITMENTS AND CONTINGENCIES (continued)
In addition to the insurance required by the Price-Anderson Act, the Company carries all-risk nuclear property damage insurance in the amount of $500 million plus additional excess nuclear property insurance in the amount of $2.125 billion, effective January 1, 1993.
Of this additional excess insurance, $1.325 billion is provided by a nuclear electric utility industry insurance company through a combination of current premiums and retrospective premium assessments.
If the insurance come ny experiences losses in excess of its capacity to pay them, each par.icipating utility may be assessed a retrospective premium of up to 7.
times its premium with respect to industry lesses in any policy year, which could range up to approximately $6.2 million for the Company.
The remaining excess nuclear property coverage of
$800 million is obtained from the commercial insurance market and is not subject to retrospective premium assessments.
These excess coverage amounts are the maximum offered by both the industry mutual company and the commercial market.
Low-level Waste Discosal:
In 1986 the federal. Low-Level Radioactive Waste Policy Amendments Act (the " Waste Act") was enacted.
The Waste Act required operating disposal facilities to accept low-level nuclear waste from other states only until December 31, 1992.
The Waste Act also set limits on the volume of waste each disposal facility must accept from each state, established milestones for the non-sited states to establish facilities within their states or regions (pursuant to regional compacts) and authorized increasing surcharges on waste disposal until 1992.
After 1992 the states in which there are operating disposal sites are permitted to refuse to accept waste generated outside their states or compact regions.
In 1987 the Maine Legislature created the Maine Low-Level Radioactive Waste Authority (the " Maine Authority") to provide for such a facility if Maine is unable to secure continued access to out-of-state facilities after 1992, and the Maine Authority is engaged in a search for a qualified disposal site in Maine.
The Company has volunteered its site at the i
Plant for that purpose, but progress toward establishing a definitive site in Maine, as in other states, is difficult because of the complex technical nature of the search process and the political sensitivities associated with it.
As a result, Maine did not satisfy its milestone obligation under the Waste Act requiring submission of a site license application by the end of 1991, and is therefore subject to surcharges i
on its current waste disposal and has not had access to regulated disposal facilities since January 1, 1993.
1 i
i 41
Maine Yankee Atomic Power Company Form 10-K - 1992 Maine Yankee Atomic Power Company NOTES TO FINANCIAL STATEMENTS
- 12. COMMITMENTS AND CONTINGENCIES (continued)
At the same time, the State of Maine has been pursuing discussions with the State of Texas concerning participation in a compact with that state and possibly one or more other states. Texas is proceeding with plans to build a disposal facility and, although it has made no commitment to Maine, has demonstrated interest in a compact that would include Maine if Texas does not limit its facility to wastes generated in Texas. Meanwhile, after taking steps to reduce the volume of waste and improve its compaction, the Company has the capacity to store approximately ten to twelve years' production of low-level waste at its existing facility at the Plant site and started storing in that facility in January 1993.
Subject to obtaining necessary regulatory approval the Company could also build a second facility on the Plant site, if needed. The Company believes it is probable that it will have adequate storage capacity for such low-level waste available on-site through the licensec operating life of the Plant. On January 26, 1993, the NRC published for public comment a proposed regulation that, if adopted, would require a licensee such as Maine Yankee, as a condition of its license, to document that it had exhausted other reasonable waste management options in order to be permitted to store low-level waste on-site beyond January 1, 1996. Such options include taking all reasonable steps to contract, either directly or through the state, for disposal of the low-level waste.
1 A 1985 Maine statute requires voter approval not only prior to construction or operation of any new low-level radioactive waste disposal facility in Maine, but also prior to Maine's entering into any compact or agreement with any state or the federal government concerning the disposal or storage of such waste inside or outside of Maine.
In 1989 Maine voters approved an agreement providing interim access to an existing disposal site in Nevada from 1990 through 1992.
The Company cannot predict whether such voter approvals will be obtained in the future, when or whether a disposal facility will be available for the Company's waste in Maine or another state, but the 1
Company intends to utilize its on-site storage facility and continue to cooperate with the State of Maine in pursuing all appropriate options.
To finance its planning and siting activity, the Maine Authority has been assessing Maine Yankee, as the only nuclear plant in Maine, for an initial statutory assessment of $10 million over a four-year period that ended in March 1992.
The Company has paid and expensed the
$10 million and under a one-year extension of the statute the Company was assessed an additional $2.5 million which was paid in February 1993.
The statute also provides that, as reliable cost estimates become available, additional costs associated with such a facility will be assessed to any nuclear plant in the state following legislative enactment of such assessment amounts, and Maine Yankee will also be
+
responsible for its share of the cost of operating such a facility, i
42
Maine Yankee Atomic Power Company Form 10-K - 1992 1
Maine Yankee Atomic Power Comoany NOTES TO FINANCIAL STATEMENTS
- 13. UNAUDITED QUARTERLY FINANCIAL DATA Unaudited quarterly financial data are shown below.
Results of operations vary between quarters, primarily because of scheduled and unscheduled plant outages.
Quarter Ended March 31 June 30 Seotember 30 December 31 (Dollars in Thousands, Except Per Share Amounts) 19R Electric Operating Revenues
$57,357 544,457
$40,261
-$45,184 Operating Income 4,195 4,436 4,266 4,167 Net Income 2,199 2,231 2,269 2,474 Earnings Per Share of Common Stock 4.17 4.24 4.25 4.13 r
12.91 Electric Operating Revenues
$39,283
$37,568
$41,720 547,900 Operating Income 5,052 4,959 5,042 5,006 Net Income 2,250 2,195 2,213 2,205 Earnings Per Share of Common Stock 4.25 4.15 4.18 4.16
- 14. TRANSACTIONS WITH ASSOCIATED COMPANIES During 1992, 1991 and 1990, the Company paid $12,214,635, $11,099,994 l
and $10,790,249, respectively, to Yankee Atomic Electric Company, an associate of several of the Sponsors, for services at cost for its engineering and nuclear services department.
Central Maine Power Company has furnished the Company certain engineering, administrative and legal services, and furnished certain facilities at cost, and electric service at its filed rates.
During 1992, 1991 and 1990, Central Maine Power Company was reimbursed in the amount of $4,010,974,
$3,485,433 and $3,632,716, respectively, for such services.
It is expected that Yankee Atomic Electric Company and Central Maine Power Company will continue to perform similar services for the Company in the future, for which they will be reimbursed by the Company.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCl0SURE Not applicable.
?
43
-r Maine Yankee Atomic Power Company Form 10-K - 1992 PART III ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT A.
Directors The directors of the Company and their principal occupations and all positions and offices with the Company are as follows:
i Name, Age and Year First Elected Director Principal Occupation David T. Flanagan, 45, 1988, Executive Vice President, Chairman of the Board of Central Maine Power Company Directors Robert S. Briggs, 49, 1991, Chairman, President and Director Chief Executive Officer, Bangor Hydro-Electric Company William T. Frain, Jr., 51, Senior Vice President, 1992, Director Public Service Company of New Hampshire Charles D. Frizzle, 50, President and Chief Executive 1991, President and Chief Officer of the Company Executive Officer, and Director Frederic E. Greenman, 56, 1984, Senior Vice President, Secretary i
Director and General Counsel, New England Power Company Joseph Harrington, 53, 1991, Vice President, Power Supply Director Projects, New England Power Company i
G. Melvin Hovey, 63, 1984, Chairman and President, i
Director Maine Public Service Company i
Matthew Hunter, 58, 1983, President and Chief Executive Director Officer, Central Maine Power -
Lompany John B. Keane, 46, 1992, Vice President, Secretary t
Director and General Counsel - Corporate, Northeast Utilities 3
Donald F. Kelly, 61, 1992, Senior Vice President, Production, Director Engineering and Power Supply, Central Maine Power Company-l t
Carroll R. Lee, 43, 1979, Vice President - Operations, Director Bangor Hydro-Electric Company l
l Ann C. McCulloch, 34, 1991, Treasurer, Central Maine Power Director Company 44 l
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
A.
Directors (continued) t Name, Age and Year I
First Elected Director Principal Occupation John F. Opeka, 52, 1986, Executive Vice President - Nuclear, Director Northeast Utilities Service Company Donald G. Pardus, 52, 1989, Chairman and Chief Executive Director Officer, Eastern Utilities Associates Gerald C. Poulin, 51, 1989, Vice President, Engineering, Director Central Maine Power Company John W. Rowe, 47, 1991,
- President and Chief Executive-Director Officer, New England Electric System i
Thomas C. Webb, 58, 1986, President and-Chief Executive Director Officer, Central Vermont Public Service Corporation Russell D. Wright, 46,
.O, President and Chief Operating Director Officer, Cambridge Electric Light Company Mr. Rowe also served as a director of the Company from 1984 to 1989 while President and Chief Executive Officer of Central Maine Power' Company.
Each of the directors, except for Ms. McCulloch, has been for the past five years, and each of the directors is now, an officer or employee of-the Company, one of the Sponsors or an associated-company thereof.
Ms. McCulloch was elected Treasurer of Central Maine Power Company in 1989.
She previously served in the Project Finance / Utilities / Tele-communications Group at Shearson Lehman Hutton, Inc. (from 1986) where she was elected a Vice President in 1987.
Each of the Sponsors is represented on the Company's Board of Directors, but there is no formal arrangement with respect to such representation.
The directors are elected at the annual meeting of stockholders and hold office until their successors are elected and qualified. They are not compensated by Maine Yankee for serving as directors.
45
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
B.
Executive Officers l
The following are the executive officers of the Company with all positions and offices held:
Name Agg Office and Year First Elected Officer Charles E. Monty 66 Chairman of the Board of Directors -
1971 (Retired, June 19,1992)
Charles D. Frizzle 50 President - 1989 President and Chief Executive Officer, effective June 19, 1992 Patrick S. Lydon 50 Vice President, Finance and Admin-istration, and Treasurer - 1985 Vice President, Finance and Admin-istration, effective January 1, 1993 Andrew C. Kadak 47 Vice President, Nuclear Services -
1987 G. Douglas Whittier 46 Vice President, Licensing and Engineering - 1990 E. Thomas Boulette 50 Vice President, Operations - 1989 (Resigned, effective February 1, 1992)
Graham M. Leitch 58 Vice President, Operations, effective January 1,1993 James D. Firth 39 Vice President, Public and Governmental Affairs - 1989 (Resigned effective April 1, 1993)
Mary Ann Lynch 37 General Counsel - 1990 Michael E. Thomas 33 Treasurer, effective January 1, 1993 William M. Finn 56 Secretary and Clerk - 1984 Each of the executive officers except Mr. Leitch and Ms. Lynch has been for the past five years and is now an officer or employee of the Company or one of the Sponsors or an associated company thereof.
Mr. Leitch had been retired from Philadelphia Electric Company since July 1992 after serving since 1987 as Vice President and Plant Manager of the Limerick nuclear power plant.
f 46
[
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued) i B.
Executive Officers (continued) l Ms. Lynch was associated with the law firm of Verrill & Dana, Portland, Maine, from 1984 until her employment with the Company.
The executive officers are elected annually by the Board 'of Directors a
and hold office until their successors are elected and qualified. - All are employees of the Company except Mr. Kadak, who is employed by Yankee Atomic Electric Company, and Mr. Finn, who is employed by Central Maine Power Company. '
There are no family relationships between any directors or executive officers nor any formal arrangements or understandings pursuant to which any were selected as officers or directors.
C.
Other Directorshios l
The following directors of the registrant hold other directorships as
.i follows:
j Director Other Directorships Held 4
l Robert S. Briggs Bangor Hydro-Electric Company East Branch Improvement Company Maine Distributors Eastern Maine Medical Center -
Penobscot Hydro Co., Inc.
l Bangor Var Co., Inc.
David T. Flanagan Central Securities' Corporation Cumberland Securities -Corporation-l Maine Electric Power Company, Inc.
The Union Water-Power Company University of Maine System l
American University of Bulgaria i
William T. Frain, Jr.
Connecticut Yankee Atomic Power Company-j Yankee Atomic Electric Company j
Properties, Inc.
j' Amoskeag Industries, Inc.
Better Business Bureau of NH, Inc.
Fidelity Health Alliance-(Trustee)
Manchester Associates, Inc.
United Way of Greater Manchester.
(
i 47.
Maine Yankee Atomic PowQr Company Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
C.
Other Directorships (continued)
Director Other Directorships Held Charles D. Frizzle The Robert R. Masterton Foundation for Technology Education Maine Leadership Consortium Mid-Coast Health-Services Frederic E. Greenman American Corporate Counsel Association, Northeast Chapter Narragansett Energy Resources Company New England Electric Resources, Inc.
New England Electric Transmission Corporation New England Energy Incorporated New England Hydro Finance Company, Inc.
New England Hydro-Transmission Corp.
New England Hydro-Transmission Electric Co.,
Inc.
New England Legal Foundation New England Power Company New England Power Service Company Connecticut Yankee Atomic Power Company Vermont Yankee Nuclear Power Corporation Yankee Atomic Electric Company Joseph Harrington Connecticut Yankee Atomic Power Company Vermont Yankee Nuclear Pcwer Corporation Yankee Atomic Electric Company Narragansett Energy Resources Company G. Melvin Hovey Maine & New Brunswick Electrical Power Company, limited Maine Public Service Company Maine Electric Power Company, Inc.
First Citizens Bank Maine Chamber of Commerce and Industry Matthew Hunter Electric Council of New England Central Maine Power Company Maine Chamber of Commerce & Industry-Kennebec Hydro Resources, Inc.
Integrated Resource Management Services 1
48 i
Maine Yankee-Atom'ic Pow:;r Company-Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued) l C.- Other Directorships.(continued) j Director
~0ther Directorshios Held John B. Keane Charter Oak Energy, Inc.
i Charter Oak (Paris), Inc.
The. Connecticut Light and Power Company l
Northeast Nuclear Energy Company i
Northeast Utilities Service Company The Rocky River-Realty Company Research Park, Inc.
l The City and Suburban Electric and Gas Company The Connecticut Steam Company The Connecticut' Transmission Corporation Electric Power, Incorporated The Nutmeg Power Company HEC, Inc.
Holyoke Power and Electric Company Holyoke Water Power Company The Quinnehtuk Company Western Massachusetts. Electric Company.
North Atlantic Energy Corporation i
North Atlantic Energy. Service Corporation Public Service Company of. New Hampshire New England Legal Foundation i
Vermont Yankee Nuclear Power Corporation Yankee Atomic Power Company Greater Hartford Arts Council i
Greater Hartford Architecture Conservancy l
Donald F. Kelly Central Securities Corporation-Cumberland Securities Corporation
.l Kennebec Water Power Company Maine Electric Power Company, Inc.
NORVARC0 i
The Union Water-Power Company Kennebec -Valley Mental Health Association.
f 1
Carroll R. Lee Maine Electric Power Company, Inc.
i East Branch Improvement Company Penobscot Hydro Co., Inc.
Bangor Var Co., Inc.
l Bangor Hydro-Electric Company:
j Ann C. McCulloch United Way of Kennebec Valley t
t 49
+
Maine Yankte Atomic Power Company Form 10-K - 1992 ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
C.
Other Directorshios (continued)
Director Other Directorships Held John F. Opeka Connecticut Yankee Atomic Power Company Vermont Yankee Nuclear Power Corporation Yankee Atomic Electric Company Northeast Utilities Service Company The Connecticut Light and Power Company Western Massachusetts Electric Company The Quinnehtuk Company Holyoke Water Power Company Holyoke Power & Electric Company The Rocky River Realty Company Research Park, Inc.
Northeast Nuclear Energy Company Opportunities Industrialization Center of New London County Charter Oak Energy, Inc.
Thames Science Center of New London County North Atlantic Energy Corporation North Atlantic Energy Services Corporation Donald G. Pardus Eastern Utilities Associates (Trustee)
Montaup Electric Company Eastern Edison Company Blackstone Valley Electric Company EUA Service Corporation Newport Electric Corporation EUA Cogenex Corporation EUA Ocean State Corporation EUA Energy Investment Corporation Yankee Atomic' Electric Company Connecticut Yankee Atomic Power Company Vermont Yankee Nuclear Power Corporation Electric Council of New England University of Hartford Gerald C. Poulin Connecticut Yankee Atomic Power Company Vermont Yankee Nuclear Power Corporation Yankee Atomic Electric Company NORVARCO Kennebec Water Power Company The-Union Water-Power Company Androscoggin Reservoir Company Maine Electric Power Company, Inc.
KV Federal Credit Union Calumet-Education Foundation 50
5 Maine Yankee Atomic Power Company j
Form 10-K - 1992.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
C.
Other Directorships (continued)
]
l Director Other Directorshios Held i;
l John W. Rowe New England Electric System l
New England Energy Incorporated _
New England Power ~ Service Company Massachusetts Electric Company j
New England Hydro-Transmission Electric
.t Company, Inc.
f New ~ngland Hydro-Transmission Corp.
Narragansett Energy Resources Company
- i New England Electric Transmission Corp. -
New England Electric Resources, Inc.
New England Hydro Finance Company, Inc.
-j The Narragansett Electric Company _.
New England Power Company j
~
New England Wholesale Electric Company Bank of Boston i
First National Bank of Boston -
MidSouth Corporation and affiliates UNUM Corporation-Thomas C. Webb Central Vermont'Public Service Corporation d
Connecticut; Valley-Electric Company, Inc.
C.V. Realty,. Inc.
Vermont Yankee Nuclear Power; Corporation-_
l Vermont Electric Power Company, _ Inc.
Vermont Electric Transmission Company, Inc.-
j Arrow Financial Corp.
i S-K-1 Limited Comprehensive Health Resources, Inc.
j Catamount Energy Corporation Appomattox Vermont Corporation i!
Smart' Energy Services, Inc.
l Equinox Vermont Corp.
l Russell D. Wright Cambridge Electric Light; Company Canal Electric Company _
= Commonwealth Electric Company COM/ Energy Services Company-COM/ Energy Steam Company Connecticut Yankee Atomic Power Company Yankee Atomic. Electric Company Vermont Yankee Nuclear Power Corporation i
l 3
l
- 51. -
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 11 - EXECUTIVE COMPENSATION Prior to April 1,1988, except for participation by some officers in incentive compensation and benefit plans, the Company's officers and directors were compensated by the Sponsors or other associated companies by which they were principally employed.
Commencing April 1,1988, however, certain Company officers became employees of, and started being compensated by, the Company, and were no longer employees of Central Maine Power Company.
In addition, certain other employees compensated by Maine Yankee have been promoted to officer positions. In complying with regulatory requirements, the Company has also reimbursed Central Maine Power Company for services rendered by its employeer including Maine Yankee officers and directors. See Item 13, CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
SUMMARY
COMPENSATION TABLE The Summary Compensation Table set forth below includes compensation information as to the President and Chief Executive Officer of the Company and the Company's three most highly compensated executive officers whose total annual salary and bonus in 1992 exceeded $100,000.
Annual Compensation All Other Name and Princioal Occupation Year Salary Bonus ("
Compensation
Charles D. Frizzle, President 1992("
$166,233 528,647
$4,364 and Chief Executive Officer 1991 148,317 32,016 1990 135,767 25,575 Patrick S. Lydon, Vice 1992 102,192 16,771 2,670 President, Finance and 1991 97,982 21,024 Administration, and Treasurer 1990 91,519 17,112 G. Douglas Whittier, Vice 1992 91,058 15,060 2,725 President, Licensing and 1991 83,643 18,142 Engineering 1990 69,825 12,871 James D. Firth, Vice President, 1992 85,975 14,127 2,573 Public and Governmental 1991 82,131 17,715 Affairs 1990 75,460 14,136 The compensation shown in this column reflects Officer and Manager
("
Incentive Plan payments, which are based on the proportion by which the Company exceeds each year's performance goals.
In accordanca with the transitional provisions of the applicable Securities and Exchange Commission rules, the Company has not provided any information in this column for any fiscal year that ended prior to December 15, 1992. The compensation shown in this column reflects Company contributions to the Savings and Investment Plan that is available to all non-union employees.
'" Mr. Frizzle became Chief Executive Officer in June 1992.
i 52
Maine Yankee Atomic Power Company Form 10-K - 1992 ITEM 11 - EXECUTIVE COMPENSATION (continued)
PENSION PLAN TABLE The following table shows the estimated annual retirement benefit payable to participating employees, including executive officers, in the earnings and years of service classifications indicated.
Final Average Years of Service Compensation 10 20 30 40
$120,000.......
18,343 36,686 55,029 60,000 160,000.......
25,143 50,286 75,429 82,400 200,000.......
31,943 63,886 95,829 104,800 240,000.......
36,849 73,698 110,547 112,221 Covered compensation consists of the salaries of the eligible executive officers.
The computation of the estimated retirement benefits in the above table is based on a straight life annuity. Messrs. Frizzle, Lydon, Whittier, and Firth have, respectively, 21, 21, 9,
and 5 years of credited service under the Company's retirement program.
l I
l l
53
Maine Yankee Atomic Power Company 9
Form 10-K - 1992 1
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGE'ENT
^
l M
The following table shows the ownership of the Company's 500,000 shares'of
-1
$100 par value Common Stock, all of which is issued and outstanding and all-of 1
which is' held of record and beneficially. None is held by management.
Amount Percentage-Ha!!g Owned of Class l
Central Maine Power Company 190,000 shares 38%
Edison Drive j
Augusta, Maine 04336 New England Power Company 100,000 20 25 Research Drive f
Westborough, Massachusetts 01582 j
The Connecticut Light and Power Company 60,000 12 P.O. Box 270 1
Hartford, Connecticut 06141 Bangor Hydro-Electric Company 35,000 7
1 33 State-Street Bangor, Maine 04401 Maine Public Service Company 25,000.i 209 State Street Presque Isle, Maira 04769 Public Service Company.of New Hampshire 25,000 5
1000 Elm Street 1
Manchester, New Hampshire 03105 l
. Cambridge Electric Light Company 20,000 4-l One Main Street Cambridge, Massachusetts 02142-9150 i
Montaup Electric Company 20,000 4
1 P.O. Box 2333 3' Boston, Massachusetts 02107 Western Massachusetts Electric Ccmpany 15,000 3
P.O. Box 270
^!
Hartford, Connecticut 06141 i
Central Vermont. Public Service ~ Corporation 10,000 2
77 Grove Street Rutland, Vermont 05701 500,000' shares-100%
j i
l
~l 54
Maiae Yankee Atomic Power Company Form 10-K - 1992 ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS During the construction period, no return was paid to Sponsors on the money paid by them for Common Stock, but a return (at the rate of 7% per annum through November 30, 1970, and at the rate of 10% per annum thereafter) was charged to plant as an allowance for equity funds used during construction.
The amounts so charged were recorded as paid-in capital.
This practice i
terminated as of December 31, 1972, the last day of the last month of the construction period.
These amounts are to be paid to the Sponsors on the redemption of Common Stock.
The Company's First Mortgage Indenture and the provisions of its Articles of Incorporation relating to its capital stock contain various limitations on redemption.
During 1992 and 1991, the Company paid $12,214,635 and $11,099,994, respectively, to Yankee Atomic Electric Company, an associate of several of the Sponsors, for services at cost for its engineering and nuclear services department.
Central Maine Power Company has furnished the Company certain engineering, administrative and legal
- services, and furnished certain facilities at cost, and electric service at its filed rates. During 1992 and 1991, Central Maine Power Company was reimbursed in the amount of $4,010,974 and $3,485,433, respectively, for such services.
It is expected that Yankee Atomic Electric Company and Central Maine Power Company will continue to perform similar services for the Company in the future, for which they will be reimbursed by the Company.
l I
55
Maine Yankee Atomic Power Company Form 10-K - 1992 PART IV ITEM 14 - EXHIBITS. FINANCIAL STATEMENT SCHEDULES. AND REPORTS ON FORM 8-K (a) 1.
The following financial statements are filed as a part of this report:
INDEX OF FINANCIAL INFORMATION Pace Report of Independent Public Accountants 20 Financial Statements:
Statement of Income for each of the three years ended December 31, 1992 21 Balance Sheet at December 31, 1992 and 1991 22 Statement of Capitalization at December 31, 1992 and 1991 24 Statement of Changes in Common Stock Investment for each of the three years ended December 31, 1992 25 Statement of Cash Flows for each of the three years ended December 31, 1992 26 Notes to Financial Statements 27 2.
The following financial statement schedules of the Company are filed herewith and included in response to Item 14(d):
INDEX OF FINANCIAL STATEMENT SCHEDULES Paae Schedule V - Electric Property and Nuclear Fuel F-1 Schedule VI - Accumulated Provision for Depreciation of Electric Plant and Amortization of Nuclear Fuel F-4 Schedule VIII - Reserves Exclusive of Reserves for Depreciation F-5 Schedule IX - Short-Term Borrowings F-6 All other schedules are omitted as the required information is not applicable or the information is p. resented in the Financial Statements or related notes.
(b)
Reports on Form 8-K.
The Company filed no reports on Form 8-K during the last quarter of 1992 and thereafter to date.
(c) The exhibits which are filed with this Form 10-K or are incorporated herein by reference are set forth in the Exhibit Index, which immediately precedes the exhibits to this report.
9 (d) The financial statement schedules required to be filed under this paragraph are listed under paragraph (a) 2. of this Item.
56
Maine Yankee Atomic Pow::r Company Form 10-K - 1992 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this-report to be signed on its behalf by the undersigned, thereunto duly authorized.
MAINE YANKEE ATOMIC POWER COMPANY By Patrick S. Lydon s/s Patrick S. Lydon, Vice President, Finance and Administration March 29, 1993 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By Charles D. Frizzle s/s By Charles D. Frizzle, President and John B. Keane, Director Chief Executive Officer March
, 1993 (Principal Executive Officer) and Director March 29, 1993 By Donald F. Kelly s/s Donald F. Kelly, Director By Patrick S. Lydon s/s March 29, 1993 Patrick S. Lydon, Vice President, t
Finance and Administration (Principal Financial Officer and By Carroll R. Lee s/s Principal Accounting Officer)
Carroll R. Lee, Director March 29, 1993 March 29, 1993 By David T. Flanacan s/s David T. Flanagan, Chairman of By Ann C. McCulloch s/s the Board of Directors Ann C. McCulloch, Director March 29, 1993 March 29, 1993 By Robert S. Bricos s/s By John F. Opeka s/s Robert S. Briggs, Director John F. Opeka, Director March 29, 1993 March 29, 1993 By William T. Frain. Jr.
s/s By Donald G. Pardus s/s William T. Frain, Jr., Director Donald G. Pardus Director March 29, 1993 March 29, 1993 By Frederic E. Greenman s/s By Gerald C. Poulin s/s Frederic E. Greenman, Director Gerald C. Poulin, Director March 29, 1993 March 29, 1993 By Joseoh Harrinaton s/s By John W. Rowe s/s Joseph Harrington, Director John W. Rowe, Director March 29, 1993 March 29, 1993 By G. Melvin Hovey s/s By Thomas C. Webb s/s G. Melvin Hovey, Director Thomas C. Webb, Director March 29, 1993 March 29, 1993 By Matthew Hunter s/s By Russell D. Wriaht s/s
)
Matthew Hunter, Director Russell D. Wright, Director March 29, 1993 March 29, 1993 57
Maine Yankee Atomic Po::er Company Form 10-K - 1992 Schedule V (1992)
Maine Yankee Atomic Power Company ELECTRIC PROPERTY AND NUCLEAR FUEL For The Year Ended December 31, 1992 (Dollars in Thousands)
Balance at Retire-Balance Beginning Additions ments Transfers &
at End of Period at Cost or Sales Other Chances of Period Electric Property 7
Organization 7
Miscellaneous Intangible Plant 3,649 99 3,748 Land and Land Rights 474 (5) 469 Structures and Improvements 41,443 (29) 678 42,092 Reactor Plant Equipment 181,579 (556) 4,666 185,689 Turbogenerator Units 100,241 (26) 7,985 108,200 Accessory Electric Equipment 19,847 (175) 1,688 21,360 Miscellaneous Power Plant Equip.
16,852 (123) 1,510 18,239 Substation Equip.
4,786
.4,786 Miscellaneous Electric Property 74
'74 Unfinished Construction 21.203 6,716 (24.214) 3.705 Total Electric Property
$390.155
$ 6,716
$(909)
$ (7,593)
$388,369 Nuclear Fuel Nuclear Fuel in Reactor
$104,368
$(20,307)
$ 84,061 Nuclear Fuel in Process 3,922 17,815 4
21,741 Nuclear Fuel -
Spent 294,159 26,400 37,642 358,201 Nuclear Fuel -
Stock 29.561 (17.339) 12.222 Total Nuclear Fuel
$432,010
$44,215 5_.
$476,225 F-1
=
.. ~.
Maine Yankee Atomic' Power:Ccmpany.
ll Form 10-K
-1992-
~
- c.. :
Schedule V (1992) l Maine Yankee Atomic Power Comoany ELECTRIC PROPERTY AND NUCLEAR FUEL' For The Year Ended December 31, 1991 (Dollars in Thousands)
Balance at Retire-Balance
' i Beginning Additions ments Transfers &
at End of Period at Cost or Sales Other Chances of Period I
Electric Property 7'
d Organization
-7 Miscellaneous l
(7) 1,113 3,649
- {
Intangible Plant 2,543
'474 Land and Land Rights 474 Structures and Improvements 42,031 (1,537) 949 41,443 l
Reactor Plant j
Equipment 179,716 (57) 1,920 181,579 Turbogenerator Units 99,570 671
~100,241-Accessory Electric a
Equipment 19,751 (46) 142 19,847 j
Miscellaneous Power Plant Equip.
15,313 (290)'
1,829 16,852 4,7861
}
Substation' Equip.
.4,786 Miscellaneous 74 Electric Property 74 o
r ion 5.043 22.784
~(6.624)-
21.203-l Total Electric i
Property-
$369.308
$22.784 $(1.937)
=$390.155 i
i Nuclear Fuel Nuclear Fuel in Reactor
$104,368
$104,368-Nuclear Fuel in-Process 8,503 17,563' (22,144)
.3,922 j
Nuclear Fuel -
294,159-Spent 294,159 Nuclear Fuel -
Stock 7.417 22.144'-
'29.561 f
a Total Nuclear Fuel
$414.447
$17,563 S
$432.010 j
i v i F-2
_.n
Maine Yankie Atomic Power Company Form 10-K - 1992 i
Schedule V (1992)
Maine Yankee Atomic Power Company ELECTRIC PROPERTY AND NUCLEAR FUEL For The Year Ended December 31, 1990 (Dollars in Thousands)
Balance at Retire-Balance Beginning Additions ments Transfers &
at End of Period at Cost or Sales Other Chances of Perild Electric Property 7
Organization S
7 Miscellaneous 1,934 2,543 Intangible Plant 609 Land and Land Rights 475 (1) 474 Structures and Improvements 41,810 (5) 226 42,031 Reactor Plant Equipment 167,329 (2,091) 14,478 179,716 Turbogenerator Units 99,587 (1,825) 1,808 99,570 Accessory Electric Equipment 18,648 (169) 1,272 19,751 Miscellaneous (94) 1,616 15,313 Power Plant Equip.
13,791 Substation Equip.
4,786 4,786 Miscellaneous Electric Property 74 74 Unfinished (21.333) 5.043 Construction 8.286 18.090 Total Electric Property
$355,402
$18,090 $(4,184)
$369.308 Nuclear Fuel Nuclear Fuel in Reactor
$122,173
$(17,805)
$104,368 Nuclear Fuel in Process 26,187 10,508 (28,192) 8,503 Nuclear Fuel -
-47,747
-294,159 Spent 246,412 Nuclear Fuel -
Stock 9.167 (1.750) 7.417 Total Nuclear Fuel
$403,939
$10,508 $
$414,447 b
F-3
Maine Yankee Atcmic Power _ Company Form 10-K - 1992-
~
Schedule VI l
t Maine Yankee Atomic Power Comoany
-l ACCUMULATED PROVISION FOR DEPRECIATION 0F ELECTRIC PLANT-AND AMORTIZATION OF NUCLEAR FUEL For The Years Ended December 31, (Dollars in Thousands) l t
Balance at Balance Beginning Charged Other at End
~
of Period to income
- Retirements Chanaes-of Period i
1212 t
Electric Property
$149.625
$15.311
$,1222)
$(142)
$163.887~
1 Nuclear Fuel
$384,112
$17.440
$401.552 1221 Electric Property
$136.922
.$14.655
$(11211)
$11})
$149.625 Nuclear Fuel
$361.020
$13.092-
$384.112 l
i 1E10 Electric Property
$128.085
$13,8,81
$(4.184)
$(gg4)
$136.922 3
Nuclear Fuel
$339,216 521.804 5361.020 l
t I
- Excludes amounts collected for Decommissioning andLPermanent Disposal Cost'.
See Note 1 of Notes to Financial Statements for the Company's depreciation-and fue1' amortization policies.
l i
t F-4
.MainetYankee Atomic' Power Companyi i
' ' a' Form 10-K -'1992 i
i Schedule VIII-l 1
Maine Yankee Atomic Power Company
. i RESERVES EXCLUSIVE OF RESERVES FOR DEPRECIATION j
For the Years Ended Dece.ber 31, m
(Dollars in Thousands) 1 Balance at Charged-Charged-Deductions Balance Beginning to to Other From at End.
of Period Income Accounts Reserves of Period' i
1222 Decommissioning Reserve $64.870
$9.074
$4.542
$78.486,
.l lill Decommissioning Reserve $52.209
$007i
$3111Z
$64.870-2 i
i
.1220
$52.209-l Decommissioning Reserve $39.700
.59.074
$11411 o
I y
q
- '(
i l
u 1
F-5 i
l
'$1
-y Maine Yankee Atomic Power Company' l
Form 10-K 1992 l
Schedule IX
- SHORT-TERM.BORROWINGS l
(Dollars in Thousands)
Column F
- Column A Column B Column C Column D Column E Weighted Category of Balance at Weighted Average Maximum Amount Average Amount Daily Average Short-Term End of Interest Rate Outstanding Outstanding Interest Rate Borrowinas -
Year at End of Period Durina the Year Durina the Year Durina the Year Year Ended December 31,"1992 Banks (1)
$4,465 3.78%
$10,385
$ 3,878 4.29%
l' Year Ended December 31,- 1991 Banks (1)
$2,440 5.43%
$17,900
$ 4,231 6.67%
Year Ended December 31, 1990 Banks (1)
- 55 12.38%
$15,750
$ 5,138
- 8.64%.
-RF G
m:
Y 42'
" s.
Eo S* hh (1)
See Note '4 of Notesito Financial Statements.
$.2P E%
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EXHIBIT INDEX The following designated exhibits, as indicated below, are either filed herewith or have heretofore been filed with the Securities and Exchange Commission under the Securities Act of.
~1933, the Securities Exchange Act of 1934 or the Public Utility Holding Company Act of 1935 t
and are incorporated herein by reference to such filings. Reference. is made to Item 8 of this Form 10-K for a listing of certain financial information and statements incorporated by.
reference herein.
Filed Prior SEC Herewith Exhibit Number And Descriotion Of Document Exhibit No. Docket
,at Pace (3) Articles of Incorooration and Bylaws Incorporated herein by reference:
3-1 Articles of Incorporation, including ammendments of April 17, 1992, May 29, 1992, and September 18, 1992.
3-2 Bylaws, as amended 3.5 1-6554 i
(Form 10-K for 1988)
(4) Instruments definina the rinhts of security holders Incorporated herein by reference:
4-1 First Mortgage Indenture from 3.2 1-6554 the Company to Old Colony Trust Company, Trustee, dated as of November 1, 1970 i
4-2 First Supplemental Indenture 4
70-4976 from the Company to The First National Bank of Boston, Trustee, dated as of March 1, 1971 i
l
-l i
l E-1
Filed
~
Prior SEC Herewith Exhibit Number And Descriotion Of Document Exhibit No. Docket at Pace (4) Instruments definino the riahts of security holders (continued) 4-3 Second Supplemental Indenture 4.3 2-46226 from the Company to The First National Bank of Boston, Trustee, dated as of December 1, 1972 4-4 Third Supplemental Indenture 4.4 1-6554 from the Company to The First National Bank of Boston, Trustee, dated as of February 15, 1984 4-5 Fourth Supplemental Indenture 4.5 1-6554 from the Company to The First (Form 10-X National Bank of Boston, Trustee, for 1988) dated as of April 1, 1986 4-6 Secured Credit Agreement among 4.1 1-6554 the Company and a group of banks, (Form 10-Q with The Bank of New York as for quarter Agent Bank, dated as of ended Sept. 30, August 15, 1989 1989) 4-6.1 Amendment No. I to Exhibit 4-6, dated as of June 19, 1992 4-6(a) Security Agreement dated 4.2 1-6554 as of August 15, 1989, (Form 10-Q relating to Exhibit 4-6 for quarter ended Sept. 30, 1989) 4-7 Eurodollar Revolving Credit 4.7 1-6554 Agreement among the Company (Form 10-K and a group of international for 1989) banks, with Union Bank of Switzerland as Agent Bank, dated as of January 15, 1990 4-7.1 Amendment No. I to Exhibit 4-7, dated as of July 1, 1992 4-7(a) Security Agreement dated 4.7(a) 1-6554 as of January 30, 1990, (Form 10-K relating to Exhibit 4-7 for 1989) 4-8 Fifth Supplemental Indenture 4.8 1-6554 from the Company to The First (Form 10-K National Bank of Boston, Trustee, for 1990) dated as of March 1, 1991 E-2
)
Filed-
' Prior ISEC Herewith
{
~'
, Exhibit Number And Descriotion Of Document Exhibit No. Docket at Pace f
~(4) Instruments'definino the richts of security holders (continued) f l
t 4.9 Sixth Supplemental Indenture from the Company to The First National Bank of Boston,. Trustee, dated as of January 15, 1993 (10) Material Contracts Incorporated hereii by reference:
10-1 Composite copy of Power Con-tract be ueen the Company and i
Sponst:Ps dated as of May 20, (Included in pro-1968 spectus in 2-46226) 10-2 Composite copy of Capital Funds Agreement between the Company and Sponsors, dated (Included in pro--
as of May 20, 1968 spectus in 2-46226) 10-3 Stockholders Agreement dated j
as of May 20, 1968, among the (Included in pro-Sponsors
.spectus in 2-46226) l l
i 10-4 Loan Agreement between the 70-5805 Company and MYA Fuel. Company, B-1 dated as of-August 26, 1976, B-1 70-6765 as amended.
'B-1 70-7117 10-5 Eurodollar Revolving Credit Agreement.between the Company and a group of international j
banks, with Union Bank of Switzerland as Agent Bank, i
dated as of September 30, 1985 B-1 70-7165
]
i 10-1.1 Amendment No. I to Exhibit 10-1, i
dated as of March 1, 1984 10-1.1 1-6554 i
10-1.2 Amendment No. 2 to Exhibit 10-1, dated as of January 1, 1984 10-1.2 1-6554 l
10-1.3 Amendment No. 3 to Exhibit 10-1, i
dated as of October 1, 1984 10-1.3 1-6554 l
10-1.4 Additional Power Contract be-l tween the Company and Sponsors, dated as of February.1,'1984 10-1.4 1-6554 l
10-2.1 Amendment No. l' to Exhibit 10-2, I
dated as of August 1, 1985.
10-2.1 1-6554
'l E-3 j
E l
Filed
- ~
- Prior SEC Herewith Exhibit Number And Description Of Document Exhibit No.
Docket at Pace (10) Material Contracts (continued) 10-6 Indenture of Trust dated as of March 14, 1988, between the Company and Masne National Bank 10-6 1-6554 relating to decommissioning (Form 10-K trust fund for 1987) 10-6.1 Maine Yankee Decommissioning Trust Amended and Restated Indenture of Trust with The Bank of New York, Trustee, relating to decommissioning e
trust fund 10-7 Indenture of Trust dated as of 10-7 1-6554 October 16, 1985, between the (Form 10K Company and Norstar Bank of for 1985)
Maine relating to the spent fuel disposal trust fund t
10-8 Bond Purchase Agreement dated 10-8 1-6554 as of March 1, 1991, between (Form 10-K the Company and purchasers of for 1990)
Series D Bonds 10-9 Preferred Stock Purchase Agreement dated as of r
September 22, 1992, relating to 150,000 shares of Cumulative Preferred Stock, 8.00% Series (Sinking Fund) with purchasers thereof 10-10 Bond Purchase Agreement dated as of January 15, 1993, between the Company and purchasers of Series E Bonds (11) Statements re computation of Der share earninos Not applicable (12) Statements re computation of ratios Not applicable (13) Annual reoort to security holders Not applicable (16) Chances in certifyino accountant Not applicable E-4
Filed Prior SEC Hertwith Exhibit Number And Descriotion Of Document Exhibit No. Docket at Pace (18)' Letter re chance in accountino principles Not applicable (19) Previously unfiled documents Not applicable (22) Subsidiaries of the reoistrant None (23) Published report reoardino matters submitted to vote of security holders j
Not applicable.
(24) Consents of experts and counsel Not applicable (25) Power of attornev Not applicable (28) Additional exhibits i
None I
i r
E-5
.