ML20039B336
| ML20039B336 | |
| Person / Time | |
|---|---|
| Site: | Harris, Brunswick, Robinson  |
| Issue date: | 03/02/1981 |
| From: | Shawn Smith CAROLINA POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML17276B799 | List: |
| References | |
| NUDOCS 8112220540 | |
| Download: ML20039B336 (73) | |
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Highlights of 1980 Percent 1980 1979 Change Operating Revenues . .. . , . . . SI,075,604.000 $ 925.910.000 16 2 Net income . . .. . S 161.388.000 S 153.244.000 5.3 Number Shares of Common Stock Outstanding lYear End) . 51,208.000 41,386.000 23.7 Earnings per Average Common Share Outstanding .. S 2.73* S 3 00 (10 81 Cash Dividends Paid per Common Share . $ 2,16 S 2.02 69 Dividends Paid (Common and Preferred) . S 130,432,000 S 109,530.000 19.1 Kilowatt-Hour Sales (Thousandst . 30,282,000 S 28.668 000 _
56 System Capability including Purchases (Kilowatts) . .. 8.053,000 7.456f a 80 Maximum Hourly Load f Kilowattsi 6.139,000 5.407.0( 3.9 Total Utility Plant (including Nuclear Fuell S4,709,449,000 S4.102.975.000 14 8 Construction Expenditures . S 629.093,000 $ 605.696.000 39 Customers (Year Endl 742,000 725000 2.3 Employees (Year Endl . . 6,522 6.247 44
- Reduced tn S 43 due to delayed irnpact on resenues for certain IMO fuel costs ISee Note 7 to Financial statemer.tst I Operating Revenue Dollar
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Total St.073 0 Total $1075 6
'Dces not include $46 209(M of wages and employee benefits for Company empk ees t that was cha :ed to Constru(teon and other accounts
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l The Chairman's Message Fellow Shareholders:
During 1980, our Company's energy sales necessary to seek to provide new generation in a rose 5.6 percent and our operating revenues, timely, efficient and economical manner.
helped by rate increases, gained 16.2 percent to Our 1980 construction expenditures of $629
$1.076 billion. Net income increased 5.3 percent million were less than the $694 million budgeted and earnings per share of common were $2.73 as because of the mid-year changes in the compared to $3.06 in 1979. construction program. The 1981 construction Earnings were adversely affected by the budget is $594 million and, for the three years summer's higher fuel costs, which will not be fully 1981-83. we estimate construction expenditures recovered until mid-1981. Unrecovered fuel will total $1.8 billion.
expenses at year-end amounted to 48 cents per share. We had no under-recovery of fuel costs at Financing the end of 1979.
To help undenvrite our 1980 construction PI gram, the Company raised a total of $476 Dividends increased million from outside sources. A listing of major Effective with the August payment, the 1980 financing arrangements is found on page 7.
directors increased the quarterly dividend from One of our more challenging tasks is to raise 7
52 to 56 cents per share, or to an annual dividend large amounts of capital on reasonable terms to rate of $2.24. It is the Company's objective to build the new facilities that will be necessary '
achieve levels of performance that will continue provide adequate. dependable service. 1 to permit regular dividend increases. recognize that this can be accomplished only A new peak for the system was established we achieve prices that fully cover all of our in August when customers required 6.139,000 expenses, including a reasonable rate of return kilowatts, a gain of nearly 4 percent over the 1979 that will allow periodic dividend increases. Thus, peak. Early in 1981 during record cold weather, a we have vigorously sought to adjust our prices to still higher peak was set when customer demand cover rising costs.
reached 6,402.000 kilowatts.
Rate Increases Construction Program Reviset During 1980 we received two retail rate In June the Directors approved changes in increases in North Carolina totaling over 17 the construction program. which delayed the percent, which will add about SI15 million to operating dates for four nuclear generating units annual revenues. In South Carolina we requested and one coal-fired unit. Under the revised plan, a retail rate increase of 19.44 percent, which the next units to come into service are a 720,000- would provide $27.5 million in additional annual kilowatt, coal-fired unit at the Mayo plant in 1983 revenues. We are now collecting, subject to and the first 900,000-kilowatt unit of the Harris refund pending a final decision by the S.C. Public nuclear plant in 1985.The complete construction Service Commission. almost all of the requested schedule is shown on page 7 of this report. increase. The Commission decision is expected Our 10-year load forecast adopted in in the spring.
December indicates that system peak demand is Pending hearings by the Federal Energy expected to grow at an annual rate of 3.6 percent. Regulatory Commission the Company in August and we have continuing load forecast studies placed into effect under bond a wholesale ra -
underway. Capital availability on reasonable increase of 17.22 percent. The revised rates q terms is a necessity for our program. We will designed to produce added annual revenues continue to adjust construction plans as $30.8 million, based on a 1980 test year.
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snew s +e a New Generating Unit Completed amman r ewem The fourth unit of our coal-burning Roxboro plant was declared commercial in September at a rated capacity of 050 000 kilowatts The unit raises the Company's summer generating capability to 7.478 000 kilowatts A four-year study by the National Academy of Sciences says that " coal and nuclear power are
'- the only large-scale alternatises to oil and gas in
- ? .; - the near term A balanced combination of coal-j 47 y and nuclear-generated electricity is preferable on environmental and economic grounds to the
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L i predominance of either 97 Percent of Generation from Coal and Nuclear
' ' 'I As the nation seeks to dec rease its 4 7 I7 ' dependence on foreign oil our Company has a desirable fuel mix During 1980 coal provided 64 7, , . "' .3 .&[
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pe rcent of the electricity for our system and
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nuclear 28 percent The output of our nuclear
', . w plants was less than during the previous two
"- '. years because of extended outages of the two i
-->- i- nuclear units at Brunswick for refueling and I
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government-required modifications We expect that during 1981 nuclear fuel will provide about
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36 percent of our generation
., %p ' 1 , N .'.- Q 4 f T l- i h Unavailability of the Brunswick nuclear e: . g.7 ~
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'L customer usage was high necessitated the
'yJ use of more expensive fossil fuels and
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%. , .L' the purchase of power from neighboring q , .*-$- systems This caused our fuel expense h
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Cooling Towers Not 4 -
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building cooling towers at our Brunswick plant was L
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Compans the state of North
Carolina and the Environmental Protection important is the elimination of unnecesd Agency reached an agreement in October that governmental rules and regulations that drive up will save our customers more than $550 million costs and fuel inflation.
over the life of the plant. As a capital-intensive. regulated utility, we Exhaustive independent studies initiated have a vital concern in all cf these matters. In the by the Company provided evidence that the interest of our customers and our shareholders, cooling towers were not necessary to protect we must communicate to governmental officials adequately the aquatic life in the vicinity of the and electe'd representatives the urgency of plant. As part M the agreement, we will make action on these issues to permit adequate energy modifications to the plant's cooling system that supplies for the future.
will result in costs of about $9 million peryearas compared to the $40 million annual expense that cooling towers would have imposed.
It is with deep regret that we note the death of Shearon Harris, former President and Chairman National Decisions Needed of our Board, on August 28 following an extended We continue to believe that for this country illness. During the 1970s, when he served as to have an adequate, dependable, affordable chairman of the Edison Electric Institute and the Electnc Power Research Institute, and later as energy supply,it must make greater use of its coal and uranium resources. For this to happen,it is chairman of the Chamber of Commerce of the essential that national decisions be made with United States, he was an outstanding spokesman respect to storage and reprocessing of spent for the electric ,mdustry and the business nuclear fuel and the disposal of high-level c mmunity.
radioactive waste. The time required to license At CPSL. we are proud of our record and construct plants must be shortened. These responding to challenge. With the dedicatiod problems remain largely political rather than our 6,522 employees and the continued suppt technological. of our 125,642 shareholders, to whom we extend similarly, this nation must find the willpower our deep appreciation, we a e confident that we and self-discipline to control inflation. It is can continue to manage successfully the imperative that we have fiscal and monetary challenges ahead.
policies that encourage personal savings and the formation of new capital with which to modernize Respectfully submitted for the Board of and expand our productive capacity. Also Directors.
W .
Sherwood H. Smith, fr.
Chairman / President March 2.1981 l
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1 Year in Review
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Energy Sales 31.1979i. resulting in a reduction iatte Energy sales increased 5 6 percent in income taxes) in net income (
1980 as compared with a 2.4 percent approximately S22.4 million an increase in 1979. The higher rate of earn.ogs per share of S.48 for 1980.
Electric Operating Revenues g,owth was due primarily to extreme The Company has received regul<
miluons of Donarsi summer and winter weather. tory approval to recover the costs fc Sales to residential customers fuel and purchased power through lu' tw showed the greatest gain. 9.4 percent. l98I-to7s while commercial sales increased 7.5 .a 23.7 percent increase in oth<
,ggg_ percent and sales for resale. 7.3 operation expenses and a 27.4 percer t{-
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percent. Industrial sales increased 1.9 percent.
increase in maintenance. which reflet increases ;n prices. costs resulting fror
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nuclear regulatory requirements, and s -
9 greater amount of property in servico Operating Revenues
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%4 Operating revenues increased 16.2 e a S20.1 million increase in nc purchased and interchanged powo
- b percent to St.076 million. This repre-400- p '
s sented an increase of $149.7 million expense, reflecting the reduce' y vallability of nuclear generatio 3 #l over 1979. Of this revenue increase, during high summer usage, whic 200 S49.8 million was attributable to 76 77 78 7' 8 general rate increases effective in 1980, resulted in increased energy purchase D
$50 million to increased fuel charge fr m other utilities.
billings and the remainder to increased energy sales. Net income and Eared Net income for 1980 was $161 m sr up 5.3 percent fr m 1979 Earnings pe Operating Expenses share were $2.73 as compared wit Operating expenses increased 19 6 S3.06 in 1979. because of higher cost <
percent, or S148 million. to a total of especially the under-recovered fuc
$903 million. costs. The annual dividend paid wa
$2.16 per share. Effective with th<
Significant changes included: August 1.1980, dividend payment, thi e a 35 percent, or $106.5 million, dividend rate was increased to 56 cent
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increase in fuel expense, compared a quarter or $2.24 on an annual basis
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with an II.I percent. or $30.4 million.
,,, increase in 1979. This increase reflected 85J a 21.9 percent increase in fossil Price Ranges and Dividends F generation and a 17.1 percent reduc- Paid Per Share gg~ r21 tion in nuclear generation. Creater use Common Stock
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- of fossil plants was necessary because y '
, of extended outages for refueling and icomposite transactions-Reported Prices:
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government-required modifications of nuclear plants. During 1980, the olvidend
- average unit price of fossil fuels burned High Low Pald
.. _ 1979
> increased 14.9 percent. nrst ouarter 2h 21 '. E "d " " "
0 e a decrease of $8.5 million in 1980in the net provision for customer fuel
[doa I 76 77 78 79 80 Fourth Ouarter 20's 17's .s2 credits, together with a 59.2 million deferred fuel credit, which offset somewhat the increase in current fuel of expense not matched with increased 1980 High Low fuel charge billings. Unrecovered costs n,s, ou,,,,, ,9<, ir, ,
for fuel and purchased power at Second Quarter 21'. 16'. .s2 December 31. 1980, totaled approxi- Third ouarter 22 19 .so mately $44 million anone at December rourth Quarter 19'. 16 % .s6
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Ccnstruction o in December. an agreement to ,
Construction expenditures of $629 increase borrowing under the Euro- l illion in 1980 included $512 million pean term loan agreement by which an ;
r generating facilities. 546 million for additional SSO million was obtained in insmission, and $7I million for lanuary 1981. Common Stock stribution and general facilities. The Company's capitalization at tDonarst l In 1980. the Company generated year's end was $3.407.953.000. consist- I femally S218 million of capital. of ing of 45.9 percent in first mortgage [ 3 s0 1ich depreciation and amortization bonds. 36.2 percent in common equity. 3 'O 3 on svided $126 million, retained earn- 13.5 percent in preferred and prefer-2.ai zw- '3" J gs totaled $22 million, and deferred ence stock, and 4.4 percent in other 232 q ,
come taxes and investment tax credit long-term debt. '
avided $70 million. The Company is continuing to $ 2 00 discuss with certain North Carolina municipal electric systems the feasi- 1.50 Financing bility of selling to them an undivided 4N To underwrite the construction ownership interest in some of its sgram. the Company entered into generating units. The Company would y e following maior financing arrange- continue to operate any units invohed ents: and to supply supplemental power .o 76 77 78 79 80 Oin February. a private placement of requirements to the municipal systems. 7
- M W % pet )* ytt go 34; ae 471 0.000 shares of Preferred Stock A.
ries for SI8 million. ,s, cus%
el ruary, an issue of 4.5 million .
_ / of common stock for net A revised load forecast, adopted in ,$. $'$
oceeds of $73.4 million. December. projects a 3.6 percent growth rate for peak demand for the M amings per share oin April. an issue of SI25 million of next 10 years, as compared to a 4.5 gDMdends Paid Per Share st mortgage bonds 14' A Series due j ,937 percent growth rate in the November 1979 forecast.
oin June.the sale of $45 million term As a result of an anticipated construction Dpenditures an notes due 1986-1987, pursuant to reduction in load growth rate, and to
@ European term loan agreement. reduce the amount of new capital N H ns f Douarsi oin September. an issue of 400.000 required, the Company in June 1980 . ggg pares of Serial Praferred Stock.SI1.16 modified the construction program.
eries for net proceeds of $39.6 million. The proposed in-service dates for ,,,
ein September, a private placement several generating units were delayed. *** su [g 175.000 shares of Preferred Stock A. Mayo 2 was moved from 1985 to 1990. F"' ses LOO Series for $17.5 million. Harris I from 1984 to 1985. Harris 2 from oin October. S20.5 million from the 1987 to 1988. Harris 4 from 1989 to 1992 , ,gg suance of pollution control revenue and Harris 3 from 1991 to 1994.
ands by the Wake iN.C.l County allution Control Financing Authority Construction Schedule "d
pj 200 14.8 millioni and the New Hanover in.s.,yic, F i.C.) County Pollution Control Financ- Unit capacity Type Date S ~
lg Authority 155.7 miillon). The Mayo I 720 MW coal 1981 2 i;j ustees retained for future Company Harris t 900 MW Nuclear 1985 79 80 81 82 83 Ee S35.5 million remaining from a S56 Han s 2 9@MW Nuclear 1988 g,'$,24 c'
illion bond sale. The Company, at the N lear ime time, issued $56 million of its Harris 3 900 MW Nuclear 1994 U Projected A first mortgage bonds.due October as collateral security to the The Company continually reviews its F]jies. load forecast and adjusts the construc-Aln' November, an issue of 4 million tion schedule as nerassary to reflect 1 ares of common stock for net changes in load growth and capital oceeds of $70.8 million. availability.
and four hydroelectric pla nts.
e The Company reached a settlement New FacilitleS with the state of North Carolina and the percent.
The fourth unit at the Company.s Environmental Protection Agency (EPAl in 1980, coal provided about 64 Rosboro plant was declared in com- whereby EPA wili no longer require the percent of the electric generation
'"Y c nstructcoolingtowersat nuclear contributed about 28 percen Septem e 1980. ota i est entin its Brunsw.ick plant. The permit the unit at year end was approsimate!y water power about 2 percent and c q
- "#ke about i percent. The fuel cost t<
S209 million- modifications to the present cooh.ng generate a kilowatt-hour for nuclea Construction progressed on the system estimated to cost between $15 plants was 0 4 cents. for coal-fired 1.440.0')0-kilowatt. coal-fired Mayo million and $20 million. lf the Company plants. l.6 cents; and for oil-fired I(
generating plant in Person County. N C- had been required to complete the turbines 7 cents. l Boiler erection continued and the main cooling towers. construction costs w ere I dam was completed during 1980. The Coal consumption reached a recorg estimated at $118 million. Settlement high in 1980when the Company burne<
first generating unit is scheduled to of this issue allowed the North Carolina 9 2 m%on tons. The aserage delivered begin operation in 1983 and the second Environmental Management Commis-pnce I c alin 1980 was S39.08 per ton in 1990. sion INCEMCI to renew the permit an mcrease f B percent om P79.
Work continued during the year on authorizing water discharges from the the Shearon Harris nuclear power plant Brunswick plant.
near Raleigh. The first of the 900.000- As a condition of the particulate Peak Loads kilowatt units was about 37 percent matter variance granted CP6L by the in 1980, the annual peak for th<
complete at year end and is scheduled NCEMC in 1979, the Company contin. system occurred on August 5 whei to begin operation in 1985. The second ued an estensive precipitator testing customer demand reached a record cI unit was about 3 percent complete and program documenting the range of 6.139.000 kilowatts, a 3.9 perceri 8 increase oser the previous year's peak is scheduled for operation in 1988. outlet emissions experienced by each Impoundment of water began in of its coal-fired generating units in A record for energy used in one d I December for the 4.100-acre reservoir North Carolina. This information will be also established on August 5 that will supply make-up water to ti.e asserabled for presentation to the customers used 121.112.000 ki plant's closed-cycle cooling system- NCEMC in early 1982, when final hours.
Transmission lines authorized for emissions standards will be estab-construction in 1981 and following lished for each of the generating units- System Rellability years include 238 miles of 500.000-volt CP6L continued its participation d line. 456 miles of 230.000-volt line and one of 27 utilities in the SoutheasteX 88 miles of 115.000-volt line. QPerat onS Electric Reliability CounciliSERC) an1 The Companys total system energy in the seven-member. Virginia-Carolj requirements for 1980 were 32.2 billion nas Reliability Group IVACAR). The Environmental Matters kilowatt-hours. System load factor was Company has 32 interconnections wit The Company spent S46.2 million 59.7 percent. compared with 58.6 neighboring systems. Maintaining ans during 1980 for environmental protec. percent :n 1979. Improving system reliability for mek tion, including about S18.2 million for The addition of the Roxboro 4 ber systems is the principal purpcse air quality control and $24.7 million for generating unit during 1980. with a both groups.
water quality contrc!. An investment of capacity of 650.000 kilowatts, increased about S5.1 million was required for system generating capacity to 7.978 000 additional generating capacity to Nuclear Fuel Supply and Storage kilowatts. Total system capability.
support this equipment. including firm long-term contract The Company has on hand or ha; in 1981. the Company projects an purchases from other utilities. in. c ntracted for all nuclear fuel sersicq expenditure of 552 million for similar creased to 8.053.000 kilowatts. to operateI Robinson 2 through 198 environmental protection measures. Brunswick through 1988. Brunswick Since 1968. the Company has invested Seven coal-fired generating plants through 1987. Harris I through 1986 an about $359 million for facilities to make up about 56 percent of the Harris 2 through 1989. The Company q protect the environment. At the end of system generating capacity; three making provisions to continue to store 1980. 562 million per year was required nuclear units account for 28 percent: 33 on an interim basis, spent fuel, pend for the operation and use of these internal combustion il.C.I turbine ing the establishment of governmen facilities. generators that bum oil,13 percent; storage facilities.
9(
Fuel Expense 1All fuels as burnedi (Cents Per Wlhon BTU)
It is very much in the national Utilities Commission for an approxi- l m ["
terest. however. for the country to mate S56 million increase in retail j [gg !
ove forward with the reprocessing of electric rates. Effective April 1.1980.
clear fuel and the establishment of S43 4 million of this request was '88 i rmanent high-level, waste storaEe ilities.
approved. In May 1980. the Company filed a rate increase request of 13.9
- 2 ,o f
, [g percent, or $91.3 million. for the North '
Modificztlons to Nuclear Units Carolina retail jurisdiction. In Decem- l lg Requirements issued by the Nuclear ber. the North Carolina Utilities I egulatory Commission and recom- Commission approved a 10.78 percent. l [y r $71.8 million, increase effective endations made by the Company's ! ;
temal study team related to the December II.1980. ,
,g ree Mile Island incident (and other #6 ## 7' " "i During March 1980, the Company u ber h nges at the Brun ick ubi e i Cm ss on to nc e e nd Robinson nuclear plants during retail rates in South Carolina by 19.4 980. Additional modifications are percent. The request. If granted in full. Totat utility Plant lanned over the next two years. would result in $27.5 million in mmions of Donarsi luding additional instrumentation. additional annual revenues. In April -
ualification of electrical equipment. 1980. 513.6 million of this increase was nd upgrading the Company's emer-oo,[5000 placed into effect. and in lanuary 1981 i ency response coabilities. The essentially all of the balance became *
.ompany spent about $9 million #
effective. subject to refund. Hearings "'
9 hrough the end of 1980. with addition- were held in November and December
- ilmoenditures of $14 million antici- 1980. and a final order is expected in j 2 7.o t 3000 for 1981. to meet new safety early 1981. '
=
(")a for nuclear power plants.
In December !979. an initial examin- [2m insurance for Nuclear Accidents d *CISi " *
- ISS"*d CU."C"i"E !
wholesale rates that were in effect i L t. coo Under the Price-Anderson Act. total under bond from December 29.1977, to !
iability for a nuclear incident islimited August 18. 1980. In January 1981. the j o $560 million. The Company is Company reached agreement with its nsured by conventional insurance j 7e 77 78 79 so f wholesale customers that resulted in a I hools that provide financial protection refund of about S29.5 million(including pr S160 million of this total. The interest) of the revenue collected. The pmaining liability is assumed primarily agreement relates only to the period Serske Area Peak Load yy companies operating nuclear umts, specif ed and has no effect on
- nd the Company's prorated maximum wholesale rates since August 18.1980. fThousands of Kilowattsi
, ability is $15 million per incident- The refund was made from money set aside in a reserve fund and did not ..,["
ggg affect previously reported earnings. 3 ,o,
,so, s60s s saa t About 63 percent of the Company's On April 18.1980, the Company filed i ales are regulated by the North an application for an annual wholesale N
[arolina Utilities Commission. I5 rate increase of $30.8 million above the bercent by the South Carolina Public level requested in 1977. The Federal ""
service Commission and 22 percent by Energy Regulatory Commission (FERC) he Federal Energy Regulatory Com- allowed the rates to become effective '3 000 nission. August 18.1980. subject tc refund with interest. awaiting a final FERC decision. 2m in August 1979, the Company filed a Hearings are expected to begin in the 2 quest with the North Carolina spring of 1981. 76 77 78 79 80 ,I '
O Surnrner Following winter
After July I. 1979 under North show ed, how es er, that time-of-da e
Carolina law. unds invested by utilities rates were not cost beneficial for a in construction work for new plants and residential customers. The Compar other facilities could be included in the has filed voluntary time-of-day rates f(
Average Annual Kilowatt-Hour Sales rate base upon which a rate of return is residential service in keeping with th to Residential Customers allowed. Both of the rate increases North Carolina Commission's Decem granted during ;980 by the North ber 1980 retail rate order.
le o# ] Carolina Utilities Commission included g gg j construction work investment in the rate base.
l 12.04s 12.10 "'" a,,, I
' 2" 1 " *" Research and Developmen ioooo, Research and development activ!
Legislation Affecting Rates ties emphasize both local and nationc 8 NO - The U.S. Congress passed in 1978 the programs.
Public Utilities Regulatory Policies Act CP6L is a participating member (
6mj iPURPAL This legislation is designed to the Electric Power Research Institut
, ggg i encourage energy conservation, effi- IEPRI). sponsored by the nation cient utility operations and equitable power suppliers. The purpose of EPT 2.000 distribution of costs among customer is to develop improved technologies t<
77 78 N 80 classes. Under the act. state regulatory meet both present and future de l' 76 commissions must consider various mands for electricity.
ratemaking and service policy stand- The Company also participatesin th-10 ards. most of which have previously North Carolina Altemative Energ been evaluated by the Company and Corporation a non-profit organir
- Energy Sales by Classes the commissions. Hearings on these funded by the state's electric su
^' matters were held during I980. and the Nllion loStIH u The corporation conducts rese g orders issued to date have found the such areas as energy maaagemen Company in compliance with the conservation and attemate energ PURPA standards.
33 o00 ]
30# #
sources.
zuse2m as sea in 1980. the EPRI budget of $2e
"" m!!! ion funded research in areas suc 25 000 Rate Experiments as fusion. solar and geothermal powe 20 000 - A residential rate demonstration conversion of coal into synthetic liqui' project on peak-load pricing was and gaseous fuels; energy storage; fue I '# '
completed in August 1980. The study cells; air and water quality contro was conducted in cooperation with the nuclear safet/: improved performanc
~
N and reliability of power plants: an, h; - 4 North Carolina Utilities Commission and the U.S. Department of Energy.The improved efficiency in the transmissio j 5 coe .
l s
[W}?j[ib k.I ,
M JM hd data was analyzed to determine and distribution of electricity.
05 gyjy whether time-of-day rates would be cost beneficial to residential customers A project in the EPRI distributio f j research program. involving testing an l and the Company. evaluation of two-way communication The Research Triangle Institute, the systems. was completed in 1980. Thi D Residential proicct has confirmed the potential fci Commission s primary consultant on C * ***I the project, reported that CP6L creating a reliable and high-qualit' M industrial customers on the experimental time- communications system using powc E covernment of-day rates tended to use less line carrierand microelectronics-base:
E sale for Resale electricity during most peak hours as technology. Systems using this tect compared with customers on existing nology are expected to play a malt residential rates. At the t!me of system role in automating distribution fun-peak. usage patterns of both customer tions such as load managemen groups were about the same. The study reactive power dispatching. c
estor; tion and meter reading. CP6L industrial and institutional areas tries in the Company's senice area vs played a substantial role in the through seminars and exhibits. announced capital espenditures total-Jevelopment of this technology and ing 5753 million. The new and vs served as a host utility for the espanded industries are espected to testing and evaluation of these provide an estimated 10.000 new job systems. opportunities. with an annual payroll of Customers Si20 million.
In local research and development. At year-end. CP&L ser ed 742.000 he Company sponsored energy and retail customers a 2.3 percent increase oad management research environ- over 1979. Customers with all-electric Cntal studies, and research to Wholesale facilities represented 306 percent of mprove the performance and reliabil- residential units. 24 4 percent of CP6L provides electricity for resale ty of power plants. commercial and 12.3 percent of to 18 electric membership corpora-industrial units. More than half the new tions. 25 municipalities and two residential customers were all-electric. privately owned utilities. In 1980. these Load Management wholesale customers accounted for 6 8 billion kilowatt-hours, or 22.5 percent A two-year study to evaluate the of CP6L's total sales.
2ffects of remotely controlling air Residential onditioners. involving 200 customers in 1980. the Company's 632.200 a Florence. S.C..was completed during residential customers represented 85 2
- he year. The data collected will help percent of CP6L's total customers and Customer Relations
- he Company assess the benefits of 31.8 percent of operating resenues. Energy conservation and load arge-scale control systems for load Average annual consurnption per management continued to be the main I ma naf.,ement. customer increased 6 6 percent, from emphasis of the Company's customer program to remotely control i1.785 kilowatt-hours in 1979 to 12.558 relations program.
t water heaters was begun in the in 1980. The aserage annual residential h area in June. At theend of 1980. bill increased from S180 84 in 1979 to The Common Sense Program, focus-appro5imately 3.600 customers were 5546.11 in 1980. ing on homes apartments and manu-participating. An evaluation will be factured homes. resulted in the c onducted during 1981 to determine completion of more than 6.482 energy-the desirability of expanding the Commercial efficient Common Sense dwelling arogram to other areas in the service t; nits.
territory. Commercial customers totaled about 104.000. an increase of approsi-The Company participated in energy mately 1.800 over 1979. They repre-The Company also continued its management expositions in both North program of offering information about sented 14 percent of the Company's
- arolina and South Carolina during the Cowmment asdstance programs to customers and produced 18.2 percent
. ear. In May the Company co-spon- of operating revenues. In 1980.aserage help low-income fam,i lies meet their
- ored an Energy Expo in Columbia. S C.- a nnual usage by commercial customers energy s.
n conjunction with the state's electric increased slightly, from 44.356 kilowatt-suppliers. professional engineering hours in 1979 to 46.997 kilowatt-hours Project Communicate. CP6L's con-
- roups the Universityof South Carolina in 1980. tinuing customer contact program, md Clemson University. reached more than 68.000 people in September. Energy Management individually and 30.825 through group Exposition ill (EME Illi was he d at the Industrial Uleigh Civic Center. EME ill was CP6L had 3.794 inc'ustrial customers Continuing emphasis was placed on eponsored by the Company in coopera-at the end of 1980. an increase of 169 "J ion with North Carolina State Univer- over the previo"s year. Energy usage in C "*"'S I " f *#"'Y'" P ' #'""
,ity and the Energy Division of the State
- E E " ** "
the industrial area increased by I.9 high-pressure, sodium-vapor lighting
>f North Carolina. Both expositions, ercent over 1979, to nearly 9.8 billion vhich drew about 3.000 people, were un in 11.500 high-pressure.
kilowatt-hours. sodium-vapor lighting units were Jesigned to increase energy conserva-i awareness in the commercial, in 1980. new and expanded indus- installed or converted.
Management Changes
, _ . _ _ . _ - _ _ _ _ _ _ . ~ . _ _ . ~ . _ _ _ _ . _ _ . . _ _ _ _ _ . _ . . - . . . _ _ . . ~ . _ -
Smith Named Chairman .
- ' ~
In May, Sherwood H. Smith. fr. was 4 elected chairman of the board of directors. Mr. Smith has ser ed as M.
president since 1976. and was named .
chief executive officer in September ff 1979. He joined the Company in 1965 as associate general counsel. M.
f
Mr. Smith serves in a number of industry-related positions. including
' ~ ,.. ~ -
chairman of the American Nuclear 3
- Y Energy Council and vice chairman of sherwood H. Smith. Jr. ,O. .
the Policy Committee on Government chairman President - J
.- y?- -
Affairs of the Edison Electric Institute. .
- '}
ff s,e. , , '.
New Officers Elected During the year. the directors elected two senior vice presidents, fise vice presidents and two division vice 12 presidents. -
s .
Named senior vice presidents were James M. Davis, Jr.. group executive for -
fuei and materials management and Lynn W. Eury, group executive for '
~
power supply. ~_
' ~
M r. Davis joined CP6L in 1965. -
serving as manager of the rates and
~
L service practices department before .~ . .
being named vice president and group executive in 1979. Mr. Eury, a 22-year 4a'T'. . g (
.}I .-
~
veteran with the Company served in a :
a.
number of engineering positions -
~
before being named head of system operations and maintenance in 1972.
~
4'q.
He was elected a vice president in 1979 Charles D. Barham, f r. ' r. Norris L Edge and promoted to group executive in ', S- ..
N-N -
May 1980.
Named vice presidents were: Paul S. . -
Bradshaw, R.A. Watson. Charles D. Paul s. aradshaw Barham, Jr., Norris L. Edge and lack B.
McGirt.
Mr. Bradshaw has served as control-ler and chief accounting officer since 1976. He joined the Companv in 1962.
Mr. Watson has been with CP6Lsince 1969 and was named manager of the fuel department in 1977.
Mr. Barham. an attorney, joined the Company on January I.1981, as senior counsel and head of the Company's legal department. He served as associate general counsel for CP6L for E. Charles Dyson
. _ _ _ _ - - - - . . . ~ _ . _ _ _ _ . - _ . _ . . _ , _ _ _ _ . . _ . . _ . - - - . _ . _ _ . . . _ _ _
W.M- 4p*W-%65.'.l.k-teW.*'Ma'.%1W.NW.'S.Ja.,mu sem N
,,. . %%g m.bGe.l.4=wme.aW W+WW + *h 9La f 'mie*N*NWN*M.e+WN*"4 i *ee3,*.ps'-W'e-,+a6a-pW'(*F4*WeMN.=t* W SiEMW
,.- seven years before entering private practice in 1974.
Mr. Edge,who joined the Companyin 1955. has been manager of the rates and service practices department since
- f. . 1979.
~'."
- .,A. -
M M r. McGirt has been involved in power plant operations since ic ning
.~
~.~ '
(. .,.- .
g the Company in 1952 He became head of a newly formed i%sil operations
,. - g ,. +9
.?.- 7 , ..v~~
.; department in 1979.
.f
.I ' '
. E. Charles Dyson and Russell H. Lee were elected division sice presidents.
. ., .;- ' *. . Mr. Dyson joined the Company in 1959
, ,j/- ,
.'c
, and his been western division general games M. Davis. ir. ~ % . p '" . . - '
manager in Asheville since 1976 Mr.
'T.'"
Lee came to CPGL in 1962 and was named eastern division general man.
s . @' k . -
ager in V. 'imington in 1973.
Lynn W. Eury I'
g- , ;- y y ~,
e -l .
- . , q: .,
,4 . .
N' . (.I g. . .
s .L '-'-
'[f . ..
.e
.q -
y
.) h e. ,8
, ... i Wiluam E. Craham, fr.
R.A. Watson Graham Named a Director in September. William E. Graham. Ir.,
senior vice pres: dent and general lack B. McClrt counsel. was elected to the board of directors.
A native of North Carolina. Mr.
Graham received both his under-graduate and law degrees from the University of North Carolina. He joined m CP6L in 1973 as vice president and senior counsel after serving four years as a ludge of the North Carolina Court of Appeals. He became general counsel in 1974. and was named senior vice president and group executive foi legal, regulatory and communications in 1976.
q Russell H. Lee
e l Employees Achievement award and, for the fourth At the end of 1980. there were c nsecutive year, the Frequency Rate 103.602 holders of common stoc k ,
The Company had 6.522 employees 14.699 holders of preferred stock and .
Safety award.
at the end of 1980. This increase cf 41 In addition, the Company receised 7.281 holders of preference stock. In percent over 1979 reflects normal the Award of Honor and the first place addition, several thousand share-
- rowth aw r utilities from the National holders own shares held by banks CP6L is an equal opportunity Safety Counc,l i and two awards for brokers. investment trusts or nominees employer. Affirmative Action plans. achievement m accident presention About 43 percent of our chareholdert which are updated annually, include fr m the North Carolina Department of live in the two Carolinas. The largest employment goals outreach recruit- ~ abor. beneficial shareholder of record at the ment efforts. actise involvement in end of 1980 held less than I percent o' community action programs and '"" '" ' ' " * ' * " " ' " " ~
adherence to appropriate regulatory OWilerShlp More than 82 percent of the shares guidelines. Current plans are available outstanding were represented m Pn. manly as a result of selling two for review at corporate headquarters. issues of common stock totaling 8 5 person or by prosy at the 1980 annual division personnel offices, and district meeting-and generating plant offices through-rmlli n shares the number of shares nd shareholders increased substan-out the system tially during 1980.
More than 15.000 shareholders were Dividend Reinvestment Plan Employee Development added during the year.and the number On June 1. the Company's Dividend During 19FD. nearly 3.900 employees of shares outstanding increased from Reinvestment Plan was amended tc participated :n developmental training 46.773.547 in 1979 to 57.350.398 in 1980. allow shareholders tu reinvest com-14 and educational programs provided by mon. preferred or preference divi.
the Organizational and Management dends in additional shares of CP6t!
Development staff. New programs common s:ock at 97 percent Distribution of Stock Ownership market value. By making optiant included stress management. work measurement, power plant supervision (common. Preferred and Preference payments. shareholders also .
and interpersonal communication . stock combined purchase additional shares at 97 Through a cooperative effort with North percent of the market t.afue. A new Carolina State University and the provision allows shareholders to bh8b Id8 reinvest dividends on a portion of their University of North Carolina at Wilming.
ton. credit courses were offered on site Number Percent shares and to receive cash dividends at the Brunswick plant. The Carolinas 53.844 43 on the remainder.
57 There was a significant increase in Elsawhere 71.798 the number of participants in the plan Safety Totals 125,642 100 with 20.821 shareholders participating CP6L emploiees continue to main- at y ear end compared with 12.3 tR at the tain one of the best safety programs in end of 1979.
the nation. For the eighth consecutive Shares The program is administered by year, the Company earned the South- Number Percent North Carolina National Bank INCNB) eastern Electric Exchange award for the and any q ;estions regarding paulcipa-The Caro linas 14.453.832 25 tion should be directed to NCNB safest working utility in its size Elsewhere 42.896,566 75 Dividend Reinvestment Department category. The Edison Electric institute presented CP6L with the Safety Totals 57.350.398 100 Charlotte. N C. 28255.
8
i CP&L Service Area .
1 s
At the end of 1980. CP&Lwas Total population of the area is Sersice to customers is provided by providire electric service to 742.000 estimated to be nearly 3 million. This more than 6.500 employees through 5 customers in an area of 30.000 sq.iare territory is comparable in size to the division.10 district. 42 area offices and ;
miles-almost half of North Carolina combined areas of Connecticut. Massa- 13 generating plants.
and about one-fourth of South Carolina. chusetts. Rhode Island. New lerser and New Hampshire. It includer, part eithe Mountain and Piedmont regions. but is largely in the Coastal Plains section. ;
l l
l WALTERS PLANT TILLERY PLANT MARSHALL PLANT BLEWETT PLANT ASMEVILLE PLANT ROxBORO PLANT MAYO PLANT SITE LEE PLANT f
.%W j NC p( :
e 15
'~ '
J / o y3 =
rx 4 4 #
s sc i n t/ M: '
7
$, E y ; : % .
o 5 x 3hMh;7y we r
COLUMBIA .gfs 3 a P'*Y SUTTON PLANT j, >5 j ( '" 3 Q' BRUNSWICK PLANT J
WEATHERSPOON PLA:4T HARRi$ PLANT SITE CAPE FEAR PLANT ROBINSON PLANT l l
DARLINGTON PLANT l
q k 1 O District Offices Generating Plants: O Nuclear Hydro O tC. Turbine Fossil ,Fm'!and Nuclear 9 Nuclear Site $ Fossil Site
l 1
l 1
Financial Section Management Report 17 Management's Comments on Results of Operations The management of Carolina Power & Light Company is resp nsible for the information and reprewntations and Financial Condition contained in the fmancial statements and other sections of 20 Statements of income / Statements of Retained Eamings this Annual Report. The financial statements are prepared 21 Statements of Source and use of FiNncial Resources in conformity with generally accepted accounting 22 Balance Sheets principles and are censistent with other information in this 24 Schedules of Capitalization report.
The Company has designed and maintains a system of 26 Notes to Financial Statements intemal accounting controls to ensure the reliability of trie 30 Auditors
- Opinion / Summary of Quarterly I nancial statements and to provide reasonable assurance Eamings Data that assets are safeguarded. This system is augmented by 31 Supplemental Inflation Adjusted Dva written policies and guidelines and a strong program of inte au t 34 Statisticat Review financial reporting and accounting through its audit committee. This committee, which is comprised entirely of outside directors, rnects periodically with management and the intemal auditors to resiew the work of each and to monitor the discharge by each of its responsibilities. The audit committee also meets periodically with the independent auditors. who have free access to the 16 committee without management present. to discuss auditing. iriternal accounting control and financial reporting matters.
The independent audi' ors. Deloitte Haskins & Selj are engaged to express an opinion of the Company financial statements. Their opinion is based on procedures believed by them to be sufficient to provide reasonable assurance that the financial statements are not misleading and do not contain material errors.
) //
Edward G. UHy. lr.
./
/
lb hw Paul S. Bradshaw A./
Chief Financ628 OttKer Chief Acounting Offrer
Management's Comments on 3 Results of Operations and Financial Condition 4
m These comments are designed to analyze and discuss Carolina retail r: venue billings in 1980 (related to the lower in greater detail the Financial Statements on pages 20-30 levcts of fuel expense in 1979). Unrecovered and deferred and the Statis&al Review on pages 34-35. They should be fuel costs increased by $9.2 million in 1980. applicable to considered in cNiunction with the data appearing there. South Carclina retail operations that will be billed in 1981.
(See Note 7 to Financial Statements concerning an additional $44 million of higher 1980 fuelcosts applicable REStJLTS OF OPERATIONS to North Carolina retail operations that will be reflected in Operating revenues increased for the foitowing 1981 revenue billings I reasons: During 1979, because of the better match of revenues c neral nate ruel cost and fuel expense,the provisions for deferred fuel costs and increases Adjustment Base Rate customer fuel credits was reduced to a net credit of Period Total since te77 simngs charges. Etc. $569.000. This compares with a net expense of $15.4 mil! ion on mono for 1978. when lower-than-normal fuel costs were Tota 1 operating experienced. which were subsequently reflected in lower res enues 1979 tevenues.
1930 si .07s o 549 s 5:10 0 sa9s s Other operation and maintenance expenses 1979 92s9 - su 84s 9 increased 25 2 percent in 1980 and 15.8 percent in 1979.
ins 9m s -
72 i si'3 During 1980. scheduled refueling and maintenance incre: sed outages were extended for all three nuclear units to I O 149 7 49 8 50 0 49 9 partially in response to new requirements and concerns m 22 5 - n 14 6 following the Three Mile Island nuclear plant accident. 17 During 1980. total expenses exclusive of fuel, applicable to S.rgy sales increased by 5.6 percent in 1980 and 2.4 the nuclear units. increased $30.3 million over 1979.
_ yent in 1979. During l980. warmer-than-normai summer included in these costs are the continuing effects of ather and a cold early winter combined to increase inflation, and more stringent operating practices and
'Eu,stomer demands for energy offsetting conservation by regulatory requirements. The increase for 1979 reflects customers and the effects of the economic slow-down on expenses associated with the scheduled refueling and industrial and larger commercial tustomers f see Statistical inspection outages for all three nuclear units in 19/9 as Review: Load Data-Electric Energy Sales). During 1980. compared with one in 1978.
rate increases were placed into effect for all jurisdictions. Depreciation and amortization for 1980 reflects a 56.7 The increases are estimated to increase total annual million credit for reduced wholesale depreciation rates revenues by $155.5 million. based on a 1979 level of sales- (see Note I to Financial Statements). Of this amount. 54.6 The fuel cost adjustment billings reflect a recovery during million applies to years prior to 1980. Depreciation and 1980 of a portion of the significantly higher fuel costs amortization expense in 1980 and 1979 reflect S2.4 million incurred in 1980. However. the effect on revenues of most of for amortization of canceled project costs (see Note 6 to the increased fuel costs. applicable to retail operations. is Financial Statements). Taxes other than on income delayed until 1981 (see Note 7 to Financial Statements). Increased in both 1980 and 1979. primarily because of Fuel for generation expense increased in 1980 by 35 increases in revenue and property-based taxes. Income percent and reflects a 14.9 percent increase in the average tax expense for 1980 and 1979 reflects the decrease in net unit cost of fossil fuel burned. Furthermore, fossil-fueled income excluding AFUDC on equity funds.
generation increased by 21.9 percent to make up for a l 7.1 Other income increased 29.8 percent in 1980 and 47.3 percent decrease in nuclear generation attributable percent in 1979. Increased investment in construction work prim:rily to the proler.ged outages of the nuclear units in progress. principally at the Harris and Mayo plant sites, discussed below. Purchased and interchanged power in contributed significantly to the increase in allowance for 1980 also increased significantly for this same reason. equity funds used during construction of $17.9 million, or Fuel expense in 1979 increased by Il.1 percent. 29.5 percent, in 1980 and $20.5 million, or 50 6 percent. In primarily because of reduced nuclear generation (22.2 1979. Higher cost rates for AFUDC (see Note I to Financial percent lessi and increased fossil generation t24.2 percent Statementsi in 1980 and 1979 also increased this item of morel. The reduced nuclear generation for E979 was due income. Inclusion of construction expenditures in the primarily to scheduled refueling and maintenance outages North Carolina retail rate base effective April I.1980.
for all three nuclear units as compared with only one unit in reduced AFUDC on equity funds during 1980 by $3.9
- 8. (Nuclear fuel is less than one-fourth as expensive as million.
II Net interest charges increased 15.8 percent in 1980 Deferred fuel costs and provision for customer fuel and 15 percent in 1979. reflecting principally the greater credits. net, for 1980 flects principally the carry-over from amounts of debt outstanding and higher interest rates for 1979 of Sil.4 million of credits to match reduced North both long- and short-term debt (see Schedules of
Capitalizationi. The increased cedit for AFUDC on income f and before AFUDC on equity funds), w hich borrowed funds of $28.9 million in 1980 and S13.1 million in decreased by $10 million in 1979 and 59.8 million in 1980.
1979 reflect increased investment in construction work in The reducticn in depreciation and amortization a progress and a higher borrowed-funds AFUDC rate This intemal source in 1980 relates to an adjustment of was offset somewhat in 1980 by a reduction of $3.4 million million. reflecting an FERC depreciation decision isee N because of construction investment in the rate base. I to Financial Statements). Deferred income taxes Net income and earnings: In summa:y. earnings for attributable to AFU DC on borrowed funds are reflected as a 1980 were adversely affected by unrecovered fuel costs, reduction in the cost of gross property additions and as a higher levels of operation and maintenance expenses reduction in internally generated capital. IThus, the (especially related to the three nuclear generating unitsl. construction program is charged only with the riet after-tax inflation and other cost increases not reflected in approved cost of borrowed funds used during construction] This revenue levels. Eamings per share of common stock were decrease in internal funds reflects the greater amounts of further affected by a 13.8 percent increase in average AFUDC on borrowed funds.
shares outstandirg. primarily as a result of the public sale When 1980 rate increases are fully reflected. the and issuance during 1980 of 8.5 million additional shares. Company expects internal generation of funds to improve.
Earnings for 1980 were favorably affected by the hot The reduction in internally generated funds during 1979 summer and cold winter weather. which increased energy and 1980 is primarily the result of unprecedented lewis of sales and revenues, and by rate increase revenues (see inflation, greath; expanded nuclear generating plant Note 7 to Financial Statements). operation and maintenance costs, regulatory lag. and Earnings for 1979, as compared with 1978. were inadequate rate-of-return levels. The FERC and NCUC.and adversely affected by: ill milder weather. (2) increased SCPSC to some extent, have adopted ratemaking operating expenses as a result of the scheduled refueling procedures that allow recognition of the latest available of all three nuclear units as compared with one unit in 1978. actual cost data in a rate proceeding It appears that these and (3) generally increased operating everses and capital commissions are moving in a positive direction with regard costs not fully offset by operating economies increased to rates of return on common equity. Furthermore. the energy sales or rate increase revenues. Company expects to file necessary rate increase applications in all jurisdictions to cover increased costs resulting from inflation and regulatory requirements. This Ig CAPITAL RESOURCES AND LIQUIDITY shou .1 result in increased net income and increased Capital requirements for 1978-1980 were met as deferred tax items. At December 31.1980, the Company follows: had earned. but not used. Investment tax credits total Total !a80 1979 1978 $103 million. {
"" "Hion5' The relative aiemts of capMI obtained from extem. ,
intemany. less diwdends s 680 6 sis 4.1 s235 4 s2ei . ' sources has been as follows Esternal ifinancingst sources i187I 476.3 SI 4 9 195 9 Total s18677 s660.4 s7503 s457 0 1980 1979 1978 and utilized as follows: nrst mortge ws n9s oa a Common and preferred stocks 50.9 13.3 46.5 lud n n c ea e sl.802 4 s674.9 s650 2 s477.3 9.4 29
'Jnsecured term loans -
Retirement of long-term Nuclear fuel financing arrangements 6.0 18 0 -
debt 1751 20.4 76 0 78 7 working capital increase short-term transactions i .8 16 7 29 (decreasel. etc. 1109 86 (34.96 24 1 199 08 Total 100.0% 100 01 100 0%
Total s18677 s660.4 s750 3 s457 0 The increase idecrease) in intemal generation of capital During 1980. the Company sold relatively fewer first funds, as compared to the preceding year. is as follows: mortgage bonds. The Company's ability to issue additional bonds under the mortgage increased by $231.8 million to 1980 1979
$1.3 billion. at December 31.1980 based on unfunded on wuions' property additions and retired bonds. At the end of 1980 Net income s 8.1 s 10.5 trustees held $59.1 million of the proceeds from pollution Dividends f 27.25 4119) control bond financings in 1979 and 1980. The trustees will n$tment t s cr d ts fle.31 (21 81 release such proceeds to the Company as the Company Depreciation and amortization 11.7) 7.5 incurs and certifies costs to the trustees.
Deferred income tases credited to The Company sold S45 million in 1980 of unsecured property accounts t 14.2 f 6 01 European term loan riotes,and in December 1980 arranged
$151.31 582 s 71 for an addidonal S80 milhon to be drawn on January 22.
1981, due half in 1987 and the remainder in 1988.
The revolving nuclear fuel financing arrangeme The increase in net income failed to keep pace with the provide for the financing of up to a maximum contind increase in dNidends, primarily because the rate of return outstanding amount of $100 million.
on average wmmon equity decreased from 12.9 percent in The Company's ability to issue additional shares of 1978. to 12.3 percent in 1979. to i1.! percent in 1980 The preferred stock is subject to a Charter eamings test under deferred tax items are a direct function of pre-tax net which, at present, the Company could issue reasonable
cmounts of additional preferred stock. The 8 million and the needs of the Company at the time. The Company "uthorized. but unissued. preference stock shares are not presently estimates that it will need external funds totaling biect to an camings test. approximately $446 million in 1982 and $305 million in I Tm underwritten public offerings of common stock, a 1983.
wt:1 of 8.5 million shares yielded $143.9 million and sales Short-term liquidity: Customer receivables on the of preferred stock produced $74.7 million. These stock books at year-end represent an average of less than 20 days issues improved the capitalization ratio for equity capital billings. The depreciation and deferred tax component of from 48.7 percent at the end of 1979 to 49.7 percent at current revenues and the continued strong demand for December 31.1980lsee Statistical Review-Percera of Total electricity from our customers provide a substantial cash C: pit:lization), despite inadequate camings for 1980 that margin for current operations. At December 31.1980. 58.1 resulted in a less-than-normal increase in reta,ned i million c>f deferred fuel costs on the balance sheet, plus Z mings' another estimated 544 million of 1981 revenues (which will reflect the higher level of fuel costs incurred by the Projected cedtal requirements for the next three Company in 1980). have been approved and are espected y=rs include: to be rsalized by luly 31.1981 (see Note 7 to Financial Statements). The issuance on January 22.1981 of an Total tosi 1982 ta*1 additional $80 million of European term loans protided are un wihons, influx of cash to meet some of the maturing current construction espenditures s t.79s sw4 sole ssos liabilities.
Nuclear fuel espenditures 2s4 71 80 101 The S29.5 million of accounts payable to customersfor Long-term debt retirements 140 u 62 14 refund of revenues was paid out on January 8.1981. A Total _s2 189 5704 _s778 _s707 portion of construction contract retentions. totaling mproxirnately $16 millior..was disbursed in January 1981, aad the $20 million. 2% Series first mortgage bonds were These estimated amounts are subject to change as paid at maturity on February 2.198i.
conditions change: the estimated rates of generalinflation. The Company had unused bank lines of credit totaling the degree of customer consersation, the use of load $206 million at year-end. a substantial portion of which m:nagement techniques, the availability of capital on was not immediately needed to back outstanding 39 recsonable terms, regulatory equirements, specific cost commercial paper or demand notes, which together "mases and general economic conditions. totated S96.2 million at year-end.
< The Company presently estimates that it will require IMPACTS OF INFLATION
_ ; proximately $308 million from extemal sources during 1981 (in addition to the $80 million in January from the See Supplementalinflation Adjusted Data on pp. 31-European term loan transactioni and plans to issue long- 33 for th-e estimated effects of changing prices on income, term securities. The amount and timing of the sales of on the basis prescribed by the Financial Accounting securities will depend primarily upon market conditions Standards Board.
I
Carolina Power & Light Company StatJm:nts ef Incama For the Years Ended December ll.
1980 1979 197 sin Thousands ewept iarnings per sharel Operating Revenues (Notes 6 and 7) ...... ....... ... .. SI 075,604 5 925.910 $ 903..
Operating Expenses:
Operation:
Fuel for generation . . . . . . . . . . . ...... .... .... 411.191 304.680 274,262 l Deferred fuel costs and provision for customer fuel credits. net . . . . . . . . ... .. ..... 119.5441 1569) 15.408 Purchased and interchanged power. net .. . .. .. 20.690 603 18 6 Other..................... .. ....... ... .. 146.472 118.430 100.452 Mai n t e na nce . . . . . . . . . . . . . . . . . . . . . . . . . . ... 100,006 78.475 69.627 Depreciation and amortization INote II . . . . . . . . . . . . 88.701 88.396 80.356 Taxes othu than on income . . . . . . . . . ... . .... 80.209 70.796 68.314 Income tax expense INote 51. . . . . . . . . . . . . . 75,693 94 642 124.888 Total operating expenses . . . . . . . . . ...... 903.418 755.453 733.22I Operating income . . . . . . . . ... .. .. . .. . ..... . 172,186 170.457 170.217 Other income:
Allowance for equity funds used during construction . 78.814 60.867 40.4I1 Income tax credits texpensel (Note 51... . . .. l.863 2.811 (109)
Other, net. .... . .. . .... ...... .. ... ..... 4,366 1,856 4.203 Total other income . . . . . . . . . . . . . . . . . . . . . 85,043 65.536 44.505 income Before Interest Charges . . .. . ... ... . .... . 257.229 235.993 21 Q2_2 Interest Charges:
Long-term debt .. ... .. .. .. .... .. . . 148,206 111.159 92.738 20 Other... ... .. ...... . .. . . ... . 15.773 10.810 5.349 Allowarece for borrowed funds used during construction-credit . . ..... ..... ... . . (68.138) 139.2201 1267 ~
Net interest charges . . . .. ... . .. . 95,841 82.749 71.l Net income .. ...... .. ... . .. ... .. ......... ..... 161,388 153.244 142.743 Preferred and Preference Stock Dividend Requirements . .. . 34,641, 28,263 6 26.926 Etrnings for Common Stock .. ... . .. .. .. .. $ I26 1 747 $ 124.981 S 115.867 Average Common Shares Outstanding . . . . . .. ...... . . 461 47I 40.841 37.355 Ezrnings Per Common Share (Note 7) .. . . .. . ..... S 2.73 $ 3 06 5 110 See notes to financial statements.
Statements of Retained Earnings For the Years Ended December 31 1980 1979 1978 lin Thousandst Balance at Beginreing of Year . . . . . . . . . . . ..... .. S 289.768 S 249.249 S 705.116 Net Income . . . . ....... . . .. . . .... . 161,388 153.244 I42.743 Total . ...... . . .... .. . . .. . 45I,I56 402.493 347.859 Deduct:
Cash dividends declared:
Preferred and Preference Stock, at stated rates (Note II . . . . . . . . . . ... .. 35,757 28.263 26.926 Common Stock lat annual rate of $2.20
- z. share in :980. 52.05 in 1979 and $1.90 in 1978) . 104,865 84.066 71.511 Total cash dividends declared . . . . .. 140.622 112.329 98.
Capital stock expense .. ...... . . ... .. .. 715 ,
396 Total deductions . . ......... . . 141,337 112.725 98.610 Balance at End of Year .. .. .... .. .. ... S 309,819 $ 289.768 $ 249,249 See notes to financial statements.
Carolina Powcr & Light Comp:ny Statem3nts cf Ssurca cnd Use cf Financial Rcssuic;s For the Years Ended December 31 m
) 1980 1979* 1978*
sin Thousandse Soure2 of Financial Resources:
Current resources provided from operations:
N e t i nco me . . . . . . . . . . . . . . . . . . . . . . . . . . .. $161,388 $153.244 $142.743 Items not requiring (providing) current resources:
Depreciation and amortization . . . . . . . . . . . . 125.944 127.673 120.213 Noncurrent deferred income taxes, net . ... . 78.101 62.202 75.889 Inucstment tax credit adjustments, net ... ... (8.2641 23.899 14.013 Equity funds portion of AFUDC ... .. ..... (78,8141 (60,867) (40.4111 Total current resources provided from operations . . . . . . . . . ........ . 278,355 306.151 332.447 Other resources provided -
Additions to plant accounts representing capitalization of equity por* ion,less deferred income taxes on oorrowed funds portion of AFUDC . . . . . . . . . . . . . . . . . . . 45,264 d l .565 27.064 Total resources provided from operations and other . . . . . . . . . . . .. 323.619 347.716 359.511 Financings:
First mortgage bonds . . . . . . . . . . . . . . . . . . . . . 152.022 252.448 99.110 Preferred st u k . . . . . . . . . . . . . . . . . . . . . .. 74,724 49.756 Common stock - Public offerings . . . . . . . . . . . M 3,895 79.516 Common stor.k - Plans (SPSP. ADRP. and ESOP-N o t e 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.933 18.746 11.654 21 Unsecured term loans ... ..... ........ .... 45.000 15.000 m Nuclear fuel trust and lease obligations . .. 28,374 92.819
- Decrease in temporary cash investments d plus increase in short-term notes payable ... 8,367 A6.150 5.673 Total resources provided from financings . . . 476,313 514.919 195.953 Total................................ $749,934 $862.635 $555.464 Use of Financial Resources
Gross property additions. excluding nuclear fuel" .. $627.499 $605.197 $402.710 Nuclear fuel additions" . . . . . . . . . . ....... ... 47,398 45.044 74.637 Dividends for the year . . . . . . . . . . . . . . . . . . . . . . . . . . 139,506 112.329 98.437 i<epayment of first mortgage bonds .. ... ..... . 64.030 78.654 Repayment of nuclear fuel obligations ..... .. ... 20.413 12.0l!
Prior year's reserve for possible refund of revenues . 23.853 Net increase Idecreasel in the following working capital components:
Cash on deposit with trustee . . . . . . . . . . . . . . (36.822)
Accounts receivable, net . . . . . . . . . . . . . . . .... 9,548 13.461 II.360)
Material and supplies .... . ........ .... .. 17,186 10.190 2.748 Deferred fuel costs and liability for customer fuel credits. net . . . . . . . . ........... ... . 19.544 569 (15.408)
Accounts payable . . . . . . . . . ... ...... . ... (69.269) (17.167) 140.037)
Reserve for possible refund of revenues . . .. .. . 14,876 13.293 135.c@
Other, net... . ... . .......... ..... .... (40.066) I1.789 15.37 -
Miscellaneous. net . . . . . . . . . . . . . . . . . . . . . . . . . 13,297 (8.1111 9.387 Total . . . . ........... . .. .. .... .. $799,934 $862,635 $555.464
)
a
' Reclassified to conform to current presentation "Includts amounts capitalized as allowance for funds used during construction. net of related deferred income taxes.
See notes to financial statements.
Carolina Power & Light Company Balanca Shaats December 31.1980 and 1979 ASSETS 1980 1979
@l l l
fin Thousandst )
Electric Utility Plant:
Electi~ .toity plant other than nuclear fuel:
In service ...... .. ... .. S2.864.435 $2,546.294 Held for future use .... . ...... . . 10.036 9.171 Construction work in progress . .. . .. 1.616.513 1.327.311 Total ..... ........ ... . .... 4.490.984 3.882.776 Less accumulated depreciation . . . . . 627.408 562.178 Net . . . . .... . . ..... . 3.863,576 -
3.320.598 Nuclear fuel .. .. .. . . ... . ... .. . 218,466 220.199 Less accumulated amnrtization . . ...... 106.598 117.492 Net . ... ............... . .... . .. . I I 1,868 102.707 Electric utility piant, net . 3.975.444 3.423.305 Other Property and Investments:
22 Investment in coal. mining subsidiaries i N o t e 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.263 8.211 Other ... .... ........................ ..... . 15.879 9.88 Total . ...... ... . ..... .... .......... 23,142 18.d Current Assets:
l Cash .. ..... . ... ... .... .. .... .... 4.331 6.024 Accounts receivable, net (1979 includes 59.751000 of refundable income taxes) ... .. ... 62,837 53.289 Materials and supplies:
, Fuel . .. ............ ........ . . .. ....... 84,122 79.816 l Other . . . . . . . . . ..... ... ... ......... 33.371 20.491
- Deferred fuel cost .... ..... . ..... . ..... . 8.086 l Current portion of deferred income taes ... .... 14.600 19.270 1
Prepayments, etc. ... ...... . ..... ........ . 5.836 2.509 Total current assets . ... . . . ... 2I3,183 181.399 1
Deferred Debits:
Unamortized debt expense . . ... . .. ..... 3,059 2.283 Other deferred debits (Notes 2 and 6) . . 26.779 22.831 r
Totti deferred debits . .. ... .. . 29,838 25.114 Total . . . .. . .. .. . . S4.241,607 e $3 647.913
=-o.
See notes to financial statements.
Carolina Power f, Light Company B21cnca Shacts l
q Duember 31.1980 and 1979 1
~.)
LIABILITIES 1980 1979 Hn Thousando Capitalization (see Schedules of CapitalizationL Co m mon stoc k . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 923.549 $ 755.382 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309,819 289.768 Preference stock ................................ 47,900 47.900 Preferred stock-redemption not required .. .. ... 238.118 238.118 Preferred stock-redemption required . . . . . . . . . . . . 175.100 100.000 Long-term debt (excluding current maturities), net .. l.674.409 1.480.136 Total capitalization (excluding current maturities of long. term debt) ... ...... . .. 3.368.895 2.911.304 Current Liabilities:
Long-term debt due within one year ............ . 39,058 27.554 Notes payable:
Bank demand notes . . . . .. . . .. .... .. 43.571 39.656 Other ..... ........... ...... .... . ... ... 52.629 48.178 l
t Accounts payable:
Construction contract retentions ..... ........ . 33.417 8.218 23 Other........................... ... . . . 107.132 63.517 m Customers-refund of revenues (Note 6) ... ... 29,476 29.021 i
Reserve for refund of revenues (Note 6) .. .... . 7.794 22.670 Liability for customer fuel credits ...... ......... I.070' i1.423 Customers' deposits . . . . . . . . . . . . .... ..... . 5,377 5.031 Taxes accrued .. ........ ............. .. ... 33,643 14.946 Interest accrued . ...... ........... . ........ 32,693 27.379 -
Dividends declared . .. . ... . ..... . . .. 45,344 35.154 Other .. ..... .... .. ... .... .. .. .. .. 7.113 5.736 Total current liabilities .. . . . .... .. .. .. 438.317 338.483 i
l Def rred Credits and Reserves:
l Accumulated deferred income taxes .. ... . .. . . 307.626 263,074 l Accumulated deferred investment tax credits .... . 120,776 129.040 Other ...... ........... ... . .. . . ...... .. 5.993 6.012 Total deferred credits and reserves ... ....... 434.395 398.126 Commitments and Contingencies (Notes 2 and 6)
Total .......... . .. .. .... .. .. S4.241.607 $3 647.9]
O i
v l
See notes to financial statements.
L
Carolina Power & Light Company Sch:dul s cf Capitalizati n '
December 31.1980 and 1979 t 1980 e
1979 tin Thouundsl COMMON STOCK EQUITY (Note 31:
Common stock. without par value-Authorized. 100.000 000 shares, outstanding 51.208.139 shares at December 31.1980.and authorized. 60.000.000 shares. outstanding 41.386,2M shares at December 31.1979 $ 923.549 $ 755.382 Retained earnings, limited in payment as drvidends under certain circumstances under the Company's charter; however, none restncted at December it.1980 309.819 289.768 Total common stock equity .. . $1.23 3.368 S t .045.150 PREFERENCE AND PREFERRED STOCK. without par value, cumulative (Note 3): At December 31,1980 Redemption Shares Price Outstanding Preference stock. authorized 10.000.000 shares (Entitled to S25 a share plus accumu-lated dividends in the event of liquidation, in preference only to Common Stocki-
$2 675 Series A S 26.50 2.000 000 $ 47,900 $ 47000 24 Preferred stock (al-redernption not required:
S5 Preferred Stock-Authorized. 300 000 shares $110 00 237 259 5 24,376 S 24 Serial Preferred Stock (bh
$4.20 Series 102 00 100.000 10.000 10.000 5 44 Series Ic3 00 250.000 25.000 25.000 9.10 Senes 103 00 300.000 30.000 30.000 7.95 Series .
107.00 350.000 15,000 35.000 7.72 Series 107.00 500.000 49.425 49.425 8 48 Series 108 00 650.000 64.317 64.317 Total preferred stock-redemption not required 2.187.259 $ 238.118 $ 218118 Preferred stock fal-redemption required (c)
Serial Preferred Stock (bi-SI1.16 Series Si f 1.16 400.000 $ 39.600 Preferred Stock A. authorized. 5.000.000 shares S7.45 Series i10 00 500.000 50.000 $ 50.000 8.75 Series 108 75 500.000 50.000 50.000 9 25 Series 109 00 180 000 18.000 9.00 Series ici I75 000 I7.500 Total preferred stock-redemption required 1.755 000 s 175.100 $ 100 000 (al Entitled to $100 a share plus accumulated div.dends in the event of liquidation.
Ibl Authorized. 20.000.000 shares in total (10.000.000 shares at December 31. 1979).
(c) Minimum sinking fund requirements (at $100 per share plus accumulated dividendst commence in 19M for the S7.45 Series, at 20.000 shares per year;in 1985 for the $8.75 Series at 20.000 shares per year and increasing in 2000 to 40.000 shares annually; in 1986 for the $11.16 Series at 12.000 shares per year; and in 1990, for the S5.00 Series, all 175.000 shares are to be redeemed With respect to the 59.25 Series. the Company must offer to redeem annually. on March I of each year beginning in 1988. any or all shares outstanding. Minimum sinking fund requirements for the nest five ) ears aggregate: 1984. $2.000.000 and 1985. $4.000.000
)
1980 1979 fin Thousands LONC-TERM DEBT lah First mortgage bonds-principal amounts:
2% Series. due 1981 . S 15.000 S 15.000 3%% Series. due 1982 20.000 20 000 11 % Series. due 1984 . 67.346 67.346 14's% Series. due 1987 .. 125.000 4% Senes. due 1988 . . 20.000 20.000 4% Senes. due 1990 . . 25.000 25.000 4%% Series. due 1991 .. . 25.000 25.000 4%% Series, duc 1994 30.000 30.000 54% Series. due 1996 . . . 30.000 30.000 6% Series. due 1997 . . 40.000 40 000 6% Series. due 1998 40.000 40.000 8% Series. due 2000 40.000 40,000 8% Series. due 2000 50.000 50 000 7M Series. due 2001 . . . 65.000 65,000 7% Series. due 2001 . . 70.000 70.000 7% Series. due 2002 . . . 100.000 100.000 7% Senes. due 2003 . 100.000 100 000 8% Series. due 2003 100.000 100 riOO 9% Series. due 2004 . . 125.000 125 000 8% Series. due 2007 100.000 100 000 9% Senes. due 2008 . . I50.000 100.000 25 10% Series. due 2009 125. wig 125.000 12% Series, due 2009 100.000 100.000 pollution Control f Senes A. 81,. due 2001-2009 37.887 30.543 (Principal amounts less cash held by Trustee: 1980. S25.I I).1979. S32.457)
Series a. 7%. due 10-1-83 16.010 ipr;ncipal amounts less cash held by Trustee totaling 533.9901 Senes C. 7%. due 10-I-83 . 6.000 Total first mortgage bonds-principal amounts 1.572.243 1.417.889 Other long-term debt.
Nuclear fuel trust obligationsivariable raies: 20 86% average effecthe interest cost at 12-31-80; 14 831 at 12-31-791 42.940fal 40 539 Nuclear fuel lease obligation Ivariable rate: 16 51 effective interest cost at 12-11-80.15 25% at 12-31-79) 45.827(al 40.269 European term loans due 1986-1987 Ivariable interest rate of 23 75't at 12-11-80) 45.000lbi 10% term loan due 4-18-82 15.000 15 000 Miscellineous promissory notes . 300 269 Total long-term debt principal amounts I,721,310 1 513.966 Unamortized discount and premium. net 17.843) f6 276!
Total long-term debt. including current maturities 1.713.467 1.507.690 Less long-term debt due within one year 2% Series due 2-1-81 15.000 Nuclear fuel trust obligations 8.115 9.309 Nuclear fuel lease obligation 15.943 18 245 Totzl long-term debt. escluding current matunties S t .674.4_09 S I .480.136 Ton! Capitalization fencluding current maturities of long-term debtl $3 368.895 S2.911.304 tal tong-term debt maturities for the nest five years includ:ng estimated amounts under continuous nuclear fuel financing arrangements for which repayrnents of present obligatiora are based on energy produced. are:
1981 1982 198i 1984 1985
. First Mortgage Bonds $15 000 520.000 522.010 S67.346 Term loans 15.000 Nirclear fuel 20058 26.610 16 857 13.508 S6.190 Totals $39.058 $61.610 $38 867 $80 854 56.190 lb) Refunded on lanuary 22.1981, w;tn the issuance ad sale of $125.000 000 new Eurcpean term loans. rratunng in 1987-19A8 with similar viritole interest nie provisions.
See notes to financial statements.
Notes to Financial Statements I
- 1. Summary of Significant Accounting Policles costs, is computed on the unit of production method anc System of Accounts. The accounting records of the charged to fuel expense. Nuclear fuel amortiration charges Company are maintained as prescribed in uniform systems include $4.n41.000 in 1980. $10.516.000 in 1979 and of accounts of the Federal Energy Regulatory Commission $15.955.000 in 1978 for the estimated costs of perpetual IFERCl and the regulatory commissions of North Carolina storage of spent nuclear fuel.
and South Carolina. Revenues. Customers meters are read and bills are Electric Utility Plant. The cost of additions. including rendered on a cyc!c basis. Revenues are recorded when replacements of units of property and betterments. is billed, as is the customary practice in the industry.
charged to utility plant. Maintenance and repairs of Deferred Fuel Costs. Pursuant to regulatory property. and replacements and renewals of items commission orders with respect to the recovery of fuel determined to be less than units of property, are charged costs for South Carolina retail operations, the Company is to maintenance expense. The cost of units of property deferring the difference between fuel costs incurred and replaced of renewed, or otherwise retired, plus rmoval or the related billings and periodically adjusts rates to reflect disposal costs, less salvage, is charged to accumulated these and other pertinent factors.
depreciation. Electric utility plant. other than nuclear fuel. Customer Fuel Credits. For North Carolina retail is subject to the lien of the Company's mortgage. Nuclear operations and all w holesale operations. monthly revenue fuel is pledged. or subject to be pledged, as collateral for billings to customers include a fuel adjustment charge to nuclear fuel financing arrangements. cover fuel costs for the current billing month, based on Allowance for Funds Used During Construction actual fuel costs in certain prior periods. Such billings can (AFUDC). As prescribed in regulatory uniform systcms of and do vary significantly from the actual fuel costs of the accounts. an a!!owance for the cost of borrowed and equity billing month. principally because of seasonal customer funds used to hnance electric utility plant construction. less usage factors and the relative level of output from nuclear applicable income taxes. is charged to cost of plant. generating units.
26 Regulatory authorities consider the inciclon of these The Company accrues additional fuel costs in months recognized costs as appropriate for the purpose of when actual fuel costs are less than annual average fuel establishing rates for the Company's utility charges to costs. and defers fuel costs in months when actual fe customers over the service lives of the property. However. costs are more than average annual fuel costs. Th{
certain construction-work-in-progress expenditures are accruals and deferrals are reversed in those future mon included in the rate base for ratemaking purposes and for which the current month's costs are a billing AFUDC is not capitali7ed icharged to the cost of plant) on determinant. However, deferrals are recorded only to the such expenditures. The equity portion of AFUDC is extent of accumulated accruals. This practice, which has credited to other income, the borrowed funds portion is been reviewed and approved by the North Carolina credited to interest charges and the deferred income tax Utilities Commission INCUCl. improves the matching of provision is charged to other income. The composite. net- fuel costs and revenues. The liability for customer fuel of-tax AFUDC rate was approximately 8.2 percent in 1980. credits at the end of a period represents the excess of 7.6 percent in 1979 and 7.5 percent in 1978 with semi- estimated average fuel costs Ibased on the succeeding annual compounding. twelve months) over corresponding estimated amounts for Depreciation and Amortization. Depreciation of fuel charges to be billed to customers during the periods utility plant f other than nuclear fueh for financial reporting that actual fuel costs will be billing determinants.
purposes is computed on the straight-line method based incorne Taxes. Deferred income tax provisions are on estimated remaining useful lives, adjusted for recorded only to the extent such amounts are allowed for estimated net salvage or disposal costs and charged ratemaking purposes. Comprehensive interperiod income principally to depreciation expense. Deprecintion tax allocation has been observed, beginning in 1976. for all provisions as a percent of average depreciable property significant timing differences. In compliance with other than nuclear fuel, approximated 3.4 percent in 1980. regulatory accounting income taxes are allocated between 3.6 percent in 1979 and 3.5 percent in 1978. Depreciation Operating income and Other income principally with rates are reviewed periodically and changes in estimates respett to interest charges related to construction work in (including the costs to dismantle or decontaminate nuclear progress. The Company and its subsidiaries file generating plants) are made as appropriate, on a consolidated federal incorne tax returns. Income taxes are prospective basis. allocated among the companies based upcm the ratios of Allowable depreciation rates for wholesale rate- their respective " separate tax liabilities" to the making purposes. pursuant to FERC Order in Docket No. consolidated tax liability. See Note 5 with respect to certain ER76-495, are different from those regularly used by the other income tax information.
Company and allowed by other ratemaking jurisdictions. Investment Tax Credits. Investment tax credits an therefore, in 1980 the Company reduced its depreciation Seing amortized over the service lives of the propert]
provisions solely applicable to wholesale operations by Preferred and Preference Dividends. Preferred a S6.700.000 of which $4.590.000 is applicable to prior years. preference dividends declared and charged to retained Amortization of nuclear fuel costs (1980 $34.843.000; eamings include amounts applicable to the first quarter of 1979. $37.536.000; 1978. 538.250.000). Including disposal the following year, except for the Preferred Stock A series.
l which dividends are wholly applicable to the year in w hich During 1980. the Company purchased $25,195.000 of coal dect red. from LC and MC. The excess of cost of production over the Retirement Plan. The Company has a noncontributory fair market value las defined by the NCUCI totaled retirement plan for all full-time employees and is funding $5.810.000 at December 31.1980. and is included in Other the costs accrued under the plan. Retirement plan costs for Deferred Debits on the Balance Sheet. These costs are 1980. 1979 and 1978 were approximately S7.763.000, recoverable through customer revenues in the future to the
$8.200.000 and $6.267.000, respectively. At lanuary 1.1980. extent that cost of production is less than fair market value.
the d:te of the latest actuarial valuation the actuarial present value of vested accrued benefits was S39.Il1.000 cnd the actuarial present value of nonvested accrued 3. Capital Stock issued and Reserved benefits was 56.481.000. The market value of assets Capital stock shares have been issued as follows.
avril:ble for benefits at January 1.1980. was $46.966.000.
representing the total changes in the respective accounts The tssumed rate of retum used in determining the in the periods indicated:
actuirill present value of eccrued benefits is 10 percent.
Other Policies. Other property and investments are st::ted principally at ccst. less accumulated depreciation 1980 1979 1978 ch;re applicable. except for investments in subsidiaries ein Thousandst th;t tre accounted for on the equity basis. Temporary cash Commoa 5tock:
investments are stated at cost. approximating market Public offerings 8.500 3.500 value. Materials and supplies inventories are stated at yp dj33 % 2 ty; rage cost. The Company maintains an allowance for ESOP 126 309 72 doubtful accounts receivable (1980. S1.740.000; 1979 Other 80
$ 1.660.000). Bond premium. discount and expense =c tmortized over the life of the related debt.
Total L84 032 4'N 27 preferred stock-
. I.;vectment in Coal-Mining Subsidiaries Under agreements with Pickands Mather 6 Co. IPMI-Pre en d s ^
a firm engaged in owning operating and maraging mineral g, n 500 properties-tw o subsidiaries. Leslie Coal Mining Company s9 25 series i80 ILC) and McInnes Coal Mining Company IMC). have been 59 00 series 175 formed Iowned 80 percent by the Company and 20 percent serial Preferred stock-by PM). The subsidiaries are developing two adjacent, 8' 3 6 S*'i'5 400 deep coal mines in Pike County, Kentucky. each capable of Total 755
-~
soo producing one million tons of clean coal per year over about 25 years. The LC mine, which was completed and declared in commercial operation in August 1979 At December 3 I.1980. 586.369 shares of common stock produced 626.000 tons of coal in 1979. and 507.000 tons in were reserved for issuance under the Stock Purchase-1980. During 1980, the MC mine produced 54.000 tons of S vings Program for Employees ISPSPl. 147.484 shares coal as its development progressed. under the Automatic Dividend Reinvestment Plan (ADRP)
Significant aspects of LC and MC's financial position and 717.670 shares under the Employee Stock Ownership are summarized as follows (in thousandsl: Plan IESOPL Effective January 16. 1981, the Company reserved an additional 5.000S00 shares for issuance under December 31 the ADRP.
1980 1979 Totil assets iescluding leased assersi s96.977 579 12i 4. Notes Payable and Lines of Credit At December 31.1980, the Company had firm. unused Notes Pcuble s82.000 $61000 lines of credit with various financial institutions totaling
$205.940.000 fat December 31 1979 S201.365.000)
Cost of tssets financed by leasing including necessary amounts to back up outstanding sm ngernent $33,600 s33 63s commercial paper and demand notes. In connection with these lines of credit, the Company is required to maintain The Company has guaranteed the obligations of LC average compensating balances in various banks M MC under the terms of loan agreements and a lease- 152.020.000 at December 31 1980. and S6.814.000 at incing arrangement. The Company has further agreed to December 31 1979) and pay commitment fees Cuse MC to complete its mine by December 31,1984.The lapproximately S75.000 per month at December 31.1980 Company and PM have entered into coal purchase and S56.000 per month at December 31.1979). Such lines of contracts for 30 percent and 20 percent, respectively, of credit are periodically reviewed, at w hich time they may be production at prices sufficient to meet all costs. renewed or cariceled.
- 5. Income Taxes e l The provisions for income tax expense are composed of the following:
Year Ended December 31 1980 1979 1978 IDollars in Thousandst included in Operating Expenses-Currently payable tases-Federal 539,506 S25 871 $54 462
-State 4.814 7.294 Ii 622 Deferred tases, net-Federal 34,79) 33823 22,739
-State . 4.805 4 176 3 057 Imestment tai credit adjustments net 18.2251 23476 13.00A Total 75,693 94 N2 124 MA Included in Other income-Reduction in currently pa)able tavn-Federal 140,137) 131.0178 (21.f458
-State . (4.861) 13659) (2.2511 Deferred taxes-Federal . 38,162 28.123 20.770
-Sta'e 5.012 3.119 2 270 Imestment tas credit adjustments. net 439: _ 823 1 005 Tetal 11,863) 12 8111 109 E Totalincome tan expense $731 830 591 All S124 997 Prowlsions for net deferred Income taxes relate to the following.
Lhfferences between book depreciation and amortization and tan deductions for property costs Pre-operational tan deductions-initial deferral Allowacce for borrowed funds capitalized $13.550 $19.303 S13.137 Taxes and other costs capitalized etc. 5.930 6 729 5602 Accelerated depreciation and other property cost differences. net 40.471 33 403 31.194 Provision for possible refund of re$enues 16.7566 6 348 15.862)
Provision for customer fuel credits. net 5.098! l.147 (6.7711 De'crred fuel costs. net 4.523 1618) 11 Olli Utilization of subsidires' tax losses I,717 3.988 1706 Canceled project costs (1,2426 fI2421 6.212 Miscellaneous other timing differences. net (5191 181 447 Total provisions for deferred income tases net S82,772 569 til S48842 A reconcillation of the Company's effecpve income tax rate (computed by dividing totalincome tax expense by pre-tax Incom*) to the statutory federal Income tax rate follows:
Effective income tax rate . 31.4 L 375s 46 7%
The effect of including AFUDC on equity funds in pre-tax income . 15.8 12 4 _ _8 3 Effective income tax rate excluding {
AFiiDC on equity funds from pre-tax income 47.2 49 9 SS State income taxes. net of federal income tas benefit (3.46 il 31 13 41 Other differences. net 2J to 66 11 of Statutory federalincome tax rate 46.0% 46 01 48 01
l At December 31.1980 the Company had generated Company cune.,tly would be subject to a maximum l but not utilized investment tax credits totaling retrospective premium assessment of approximately $45 i cpproximately $103 million (including SI6 million of ESOP million in the event losses at insured facilities exceed l credits). of which $49 million expire in 1986 and $54 million premiums reserves, re-insurance and other NML
! cxpira in 1987. resources which are at present more than $175 million.
The Company's public liabitity for a nuclearincident is
- 6. Commitments and Contingencies insured up to the maximum limit on public liabilityclaims It is (stimated the Company's construction program pursuant to the Price-Anderson Act, which is $560 million for 1981 through 1983. excluding nuclear fuel, will cost for each occurrence. through the conventional insurance c pproximately $1.8 billion; and nuclear fuel expenditures pools and through United States Covernment indemnity. in e r; estimited to total S254 million. At December 31.1980. the event that public liability claims from an insured minimum fi;m commitments for construction aggregated nuclear incident exceed the primary financial protection rpproximately S932 million plus approximately S229 provided by the insurance pools, which is currently $160 million for initial and replacement nuclear fuel. in addition, million. the Company would be subject to a pro rata the Company has a contract with the U.S. Departnwnt of assessment of up to a maximum of $15 million with respect Energy for nuclear fuel enrichment requirements through to any single nuclear incident and an aggregate maximum June 30. 2002, which is cancelable without penalty upon five of $30 million within any calenc:ar year.
, yetrs written notice. Payments for enrichment services are There are certain claims pending against the cnticipated to approximate $219 million during the next Company. In the opinion of the Company. liab!!ities. if any, five y=rs. after December 31.1980. The above estimates arising from these claims would not have a material effect include provisions for price escalation- on the financial position or results of operation of the Estimated rental commitments for unrecorded capital Company.
l=ses at December 31. 1980, are approximately (in On January 8.1981. the Company paid to its whoicsale 29 thousands)- customers $23.545.000. the amount collected for a rate scT increase for the period from December 29.1977, to August other 18. 1980, in excess of amounts that wcLid have been Dble i9si Generators s 3 800 s 1 300 Tota s 7.t oo c llected under final revised rates pursuant to a settlement m82 1 800 3 400 7 200 agreement. which has been submitted to the FERC for 1983 1800 3 400 7 200 approval. together w,th i accumulated interest totalling 1984 3 800 1400 7 200 $5.931.000. Adequate provisions for possible refund of 1985 1800 3m 7.200 revenues and interest had been previously recorded.
Thereafter 53 000 A6 loo 119 :00 Operating revenues include 59.242.000 billed South Totris s72 000 sl01000 sI75 000 Carolina retail customers, which remains subject to refund at December 31,1980. T'nese increased revenues are the i Minimum rental commitments at December 31, 1980 result of an interim rate increase of $13.700.000 annually under operating leases are not material with respect to the that the Company placed into effect on April 14.1980iwhich Comp:ny's fir ancial position. is part of an application for a permanent rate increase of H1d the capital leases been recorded on the S27.500.000. based on a December 31,1979 test year and is i Company's books at December 31.1980, approximately S72 presently pending final determination).
I million (S71 million at December 31.1979)would have been Elfective August 18. 1980. the Company placed into t dded to total assets and to total liabilities.The difference effect a rate increase for wholesale operatiora that is between imputed depreciation and interest expense for estimated to increase revenues by $26 million annually these c:pital lease properties and actual rc<orded rent after provisions for possible refund.Through December 31, cxpense is not material. 1980. 58.954,000 had been included in operating revenues Under the terms of the ? ease for the intemal and $4.332.000 excluded from revenues and placed into a combustion turbine ilCT) generators. the Company, under mserve for possible refund.
c;rtin circumstances. may be required to purchase the it is expected that the effects of the difference ICTs from the lessor. The lease for the Company's general between any refunds finally required and the accumulated offica h;s an initial term expiring in 2013 with renewal and provisions for such refunds will be accounted for in the purchase options. The Company is responsible for period of final determination and will not have a material
- xpenses in connection with most of the leased properties, effect on net income of that period.
ding insurance, taxes and maintenance. In December 1978. the Company canceled plans for Th2 Company is a member of Nuclear Mutual Limited construction of two nuclear generating units scheduled for Lt. cstablished to provide insurance coverage against service in 1989 and 1991. Total costs incurred for the units property damage to insureds
- nuclear generating facilities. were $12.154.000. and amortization is over a five-year The Company is insured thereunder for $375 million at its period beginning lanuary 1.1979. pursuant to regulatory Brunswick plant and $150 million at its Robinson plant.The authorizations. At December 31. 1980. the remaining L
unamortized balance, included in Other Deferred Debits.
is S7.286.000159.801.000 at December 31. 1979).
Auditors' Oninion r-On January 20.1981.the Company received a permit for its Brunswick r.uclear plant for continued operation of the present once-through cooling system, with modifications.
Such permit will not require completion and use of the cooling towers originally mandated as a condition of the NRC's operating license for the plant. The Company expects to To the Board of Directors and Shareholders amortize approximately SIS million accumulated of Carolina Power 6 Light Company:
construction costs on the uncomp!eted coc!!ng towers as an operating expense over a five-year period pursuant to We have examined the balance sheets and the schedules authorizations, which will be sought from regulatory of capitalization of Carolina Power 6 Light Company as of authorities. December 31.1980 and 1979 and the related statements of income, retained eamings and source and use of
- 7. Rate increase Matters financial resources for each of the ti"ee years in the period ended December 31.1980. Our examinations were made in Operating revenues for 1980 include an increase of acc rdance with generally accepted auditing standards
$49.773.000 over amounts reflected in prior years and, acc rdingly. Included such tests of the accounting attributable to general rate increases placed into effect in rec rds and such other auditing procedures as we con-19M after adjusting such amounts downward by $4.332.000 sidered necessary in the circumstances.
to reflect a possible refund of revenues. Also included in revenues representing increased fuel cost adjustment in our opinion, such financial statements present fairly billings above the base cost of fuel las defined for each the financial position of the Ccmpany at December 31.1980 ratemaking jurisdictionl is $130.043.000 in 1980.580,027.000 and 1979 and the results of its operations and the source in 1979 and S72.006.000 in 1978. and use of its financial resources for each of the three During the sum mer of 1980. the Company experienced years in the period ended December 31.1980, in con-significantly higher-than-normal fuel costs. Customer formity with generally accepted accounting principles 30 revenues for wholesale operations reflected such higher applied on a consistent basis.
costs with a two-month lag. For South Carolina retail operations customer revenues are being affected over a ,,
six-month period beginning October 1.1980; and related a i k U/ I deferred fuel cost accounting resulted in a current asset on $k M 4 the balance sheet, which totaled $8.0M.000 at December
- 31. 1980. However, for North Carolina retail operations, customer revenues are being impacted over an eight. Raleigh. North Carolina month period beginning with December I.1980. billings February 12.1981 and. pursuant to the Company's accounting practices for customer fuel credits. net deferred fuel cost amounts that totaled $44.041.000 are not refiected on the balance sheet at December 31. 1980. representing a reduction fafter income taxes) in net income and earnings per share of approximately $22.355.000 and S.48 pershare.respectively.
The NCUC has denied the request to make the collections subject to refund. The matter is presently before the North Carolina Court of Appeals.
Summary of Quarterly Earnings Data (Unaudited)
Ea ne in the opinion of the Company, all adjustments cuarter operating operating Net Common IConsisting of only normal recurring accruals) necessary to a Ended Revenues income income Share fair statement of such amounts for such periods have been made. Quarterly data normally varies seasonally with Hn Millions. Except Earnings per Common Sharei temperature variations, the timing of rate increases, and March 31.1980 $25&9 $52.1 s49 4 s095 the scheduled down-time and maintenance of electric lune 30.1980 2283 37 8 36 2 0 00 generating units, especially nuclear-fueled units.
September 30. 1980 300 4 22.9 20 4 C.25 December 31.1980 288 0 94 55 4 0 92 March 31.1979 235 2 47 6 44 1 0.92 June 30.1979 206.7 12.I 28 2 0.53 September 30.1979 258 8 54 8 49.8 1.05 December 31.1979 225.1 35 9 31.2 0 57
) Supplemental Inflation Adjusted Data (Unaudited)
The data, as reported in the primary financial Under ratemaking practices established by regulatory stat:ments. are based on actual, nominal historical costs. commissions. the Company can recover through resenues However. during periods of significant changes in general only the original cost thistorical cost / nominal dollarsi price levels. that nominal dollar information becomes depreciation. Therefore. the increase in the dollar an4ount distorted and fails to reflect real economic costs or value. for the cost of plant istated in either historical The conventional basis does not account for the event of cost / constant dollars or current cost) over the original cost inflation, i e., variations over time in the purchasing power is deemed not presently recoverable and, therefore, must or vrlue of the dollar, in an effort to provide financial be reflected as a " reduction in assets to net recoverable information about the effects of changing price levels, the cost."
Financial Accounting Standards Board issued Statement To further reflect the economics of regulation, the No. 33. Financial Reporting and Changing Prices, in reduction in asset " cost" is offset to the extent that the September 1979. This statement requires most larger plant is financed from sources that have a fixed, or companies to disclose iamong other things) certain contractual, rate of return and claim against assets of the significant historical cost data in constant dollars Company. Under present ratemaking practices. the represented by the average level during the year of the Company can recover through revenues the contractual Consumer Price Index for all Urban Consumers (CPI-U) and rate of return for such capital and, therefore, is able to 3; current cost information concerning the measurement of effectively recover the inflatica impact (purchasing power wets and the expiration of asset values. gain or loss) on such capitu io the extent reflected in the
}
annual cost rate. Any holding gain associated with such capital imonetary liabilities) is. therefore, not realizable The constant dollar information on the fo!!owing pages and is an offset against the " reduction in assets to net reflects the nominal historical costs and prices restated by recoverable cost." The treatment given herein to the applying the cpl.U in conformity with Statement No. 33. holding gains on monetary liabilities recognites that prices charged by the Company are designed to recover for such capital no more than any inflation costs factored into the The current cost information on the following pages contractual annual cost rate. Thus. the purchasing power reflects changes in specific prices of plant from the date the adjustment to the tangible assets, w hich is not realizable plant was acquired to the present and differs from constant and is written off, as well as the increased operating dollar amounts to the extent that specific prices have expenses. results in no financial loss to the owners of the increased more or less rapidly than prices in general. The Company (the common shareholders) to the extent of the current cost of property. plant and equipment, which leveraged financing.
includes land, land rights, intangible plant, property held for future use and construction work in progress represents This information should be viewed as an estimate of the estimated cost of replacing existing plant assets and the approximate effects of inflation, rather than a precise was det rmined primarily by indexing the surviving plant measure.
by the Handy-Whitman Index of Public Utility Construction The statement of income. adjusted for changing prices Costs. The current cost of nuclear fuel was determined by as presented on page 32, reflects adjustments only with recent invoice prices. The current year's provision for respect to electric utility plant-the area of the Company d:preciation and amortization was determined by applying most affected by inflation. All other items are considered to the Company's depreciation and amortization rates to the have been effectively transacted at average 1980 price ind x:d current cost amounts. levels and, therefore, do not require adjustment.
~'q
Statement of Income from Continuing Operations Adjusted for Changing Prices for the Year Ended December 31; 1980 !
l 1
As Constant Current Reported Dollar Cost in the Average Average Primary 1980 1980 Statements Dollars Dollars (Thousands of Dollars)
Operating revenues . ... .. .. .. . ... S1 075 604 S1 075.604 S1 075.604 Operating expenses:
Operation and maintenance:
Fuel for generation . . .. . . 411.191 420.490 4l8.751 Other . . . . . . . 247,624 248.012 247.930 Depreciation and amortitation . .. 88.701 163.966 176.370 Tases other than on income . . 80.209 80.209 80.209 income tas expense .. .. . . . 75.693 75 693 75.693 Total operating espenses . . 903 418 988.370 998.953 Operating income . . . . .. .. 172.186 87.234 76.651 Other income - net . . . . . . .. 85.043 85.043 85011 32 Income before interest charges . . .. . . . 257.2?9 172.277 161.694 Net interest charges . . .. . .. 95841 95841 95.841 Income from continuing operations l fexcluding reduction to net recoverable cost) . .. . . . . . S 161.188 $ 76.436* S 65.853 Other adjustments to reflect the effects of changing prices:
Increase in specific prices (current cost) of property, plant and equipment held during the year" . S 529.222 Reduction in assets to net recoverable cost .. S 1351.973) 1232.542)
Effect of increase in general price level . . .. . .. . (638.072)
Excess of increase in general price level over increase in specific prices after reduction to net recoverable cost . . .. S (341.392)
Adjustment for purchasing power loss by net monetary liabilities . . S 10.t.730 5 304.730 l
- Including the reduction in assets to net reccnerable cost, the loss from continuing operations would have been 5275 539 fincluding $174.525 applicable to electric utility plarn under constructiont while historical cost or net
- *At December 31.10A0. currer.t cost of property. plant and equipment. net of accurnalated depreciation was $6M8 211. l cost recoverable through depreciation was $?.975.415
Five Year Comparison of Selected Financial Data Adjusted for Effects of Changing Prices i
1 Year Ended December 3I, 1980 1979 1978 1977 1976 fin millions of average 1980 dollars.
except for per share amounts)
Operating resenues . .. ... .... .. . . $ 1,075.6 S l .051.1 $ 1.141.1 S t .099.1 $995.0 Historical cost Information adjusted for general inflation:
Income from continuing operations (excluding reduction in assets to net recoverable cost) .. . .. . .. S 70.4 S 106.1 Income from continuing operations per common share (after preferred stock dividend requirements and excluding reduction in assets to net recoverable costl . . . . . .. S .90 S 1.82 Net assets at year-end at net 33 recoverable cost ... . .. .. . . ..... $ 1.178.0 $ 1.122.0 nt cost information:
Income from continuing operations (excluding reduction in assets to net recoverable cost) . .. .. . S 65.9 $ 93.5 income from continuing operations per common share fafter preferred stock dividend requirements and excluding reduction in assets l to net recoverable costl .... .... $ .67 $ 1.50 Net assets at year-end at net recoverable cost . . . .. . . . . $ 1.178.0 S i .I 22.0 General Information:
Adjustment for purchasing power loss by net monetary liabilities . .. . . .. S 304.7 S 309.2 Cash dividends declared per common share .... ... .. .. . . .. ... S 2.20 S 2.33 $ 2.40 S 2.38 S 2.45 Market price per common share at year-end .... . . . .. . ... .... S 17.31 $ 20.53 S 26.15 $ 31.16 S 34.16 CPI-U-average ..... . .. . . . .. 246.8 217.4 195.4 181.5 170.5
-year-end . .. . . .. . . ... . . 258.4 229.9 202.9 186.1 174.3 l
Carolina Power & Licht Company Statistical Review IDollaes in Thousands escept per share amountsi 1980 1979 1978 1977 1976 1975 i Balance Sheet Data lend of Periodl Tetal Utility Plant other than Nuricar Fuci $4,490.984 1 AA2 776 12A6101 2 012 215 2 6As 746 2. tA9 107 4Al 571 Construction work in Progress $1,616.513 1 127 111 A96126 e12 404 775 9A 1 641 060 20A 444 Total Nuclear Fuel 5 218.466 220 199 155 41 A 92 494 74 o46 59 A41 9 A17 Net Utibty Plant other than Nuclear Fuel $3.863,576 1 120 598 2 A02 044 2 4% 74A 2112 A40 2,I92 6Al Ato 74 8 Total Assets $4.241.607 16474f1 1115847 2761544 2 547 02 A !.U4 614 6A4 851 Capitahzation Common stock and retained cammgs $ 1.231.368 1 045.150 9A5 774 850 29A 809.197 712 A17 260.154 Preference stock .... .... 47.900 47 900 47 900 47.400 47.400 47 900 Preferred stock-Redemption not required 238.188 218.118 213.118 218 118 21A 118 21A.118 8917e
-Redemption required 175.100 100 000 50 000 50.000 50 000 50 000 First mortgage bonds. net' l.564.400 1.41 f.611 l.222.527 1.201.354 1.101 289 1.105 050 39A 427 Other long. term debt 149.067 9e 077 _lil 90 675 50 208 114 Total $3 4_01951 2 91A ASA 2 544 452 21A7,760 2 244 679 2_?04 109 74A 091 Noncurrent Deferred income Tames S 307.626 261.074 220.174 157.612 118 016 69177 21.7 t l Deferred investment Tas Credits I20,776 124 040 105 141 11.12A 46 A47 I A 7A A 4.774 Total $ 428 402 192 II 4 125 115 22A 7to 164 911 AA 165 26 4Au Ratio of Accumulated Depreciation to Utihty Plant in Seruce % 21.9 22 1 20 1 18 1 18 5 16 8 20 4 Percent of Total Capitalization Common stock and retamed camings 36.2 15 6 la 7 15 6 16 0 12 1 14 F Preference stock .... ..... l .4 16 19 20 2l 22 -
Preferred stock-Redemption not required 7.0 Ai 94 10 0 10 6 10 8 12 0
-Redernption required 5.1 14 19 21 22 21 -
First mortraie bonds. net' 45.9 4A 0 48 f 50.1 49 1 50 1 51 2 Other long-terrn debt 4.4 11 - - -
21 -
Total 100 0 100 0 100 0 100 0 100 0 100 0 100 0 Ratio of Bonds to Net Utihty Plant Other than Nuclear Fuel % 40.5 42 5 41 6 48 1 47 1 50 4 Summary Results of Operations (berating Resenues $ 1,075,60_4 925 910 90141A ROA 275 6A7 us 595 A92 204 A4h Operating Expenses Operation and maintenance 658.815 Sol . ele 459 661 421 542 152 601 105.I17 122.427 Depreciation and amortiration 88.701 8A 196 A015e 71.140 62.185 4e o48 19.476 Tames-other than on income 80.209 70.796 6A 114 60 606 52.856 46 OA7 19 051 Income tas empense 75.693 94 642 1246AA 97d44 A2 461 161A7 A 2A9 -
Total operating expenses 903 4_18 755 451 711 221 652 112 550 805 494 259 169 245 Operating income 172.186 170.457 170.217 155 941 116 580 101.011 15 e01 AFUDC. Net of Deferred income Taues 113.398 80.7A5 51171 429A2 4A A02 59.957 10305 Other !ncome-Income Tas Credit 35.417 22111 11.217 11.494 14.5A6 19.714 2.704 Other income IDeductionsi-Net 4.366 i ASA 4 201 2.919 469 f.020 111 Total Interest Charges II 63,979 p 4128,969) 19A GA7e __.142 1071 :A44291 190 171} f 21957 Net income . . . . . . . ............ 16l.383 151.244 142 741 121 015 l l l MA 92 171 24 A25 Preferred and preference stock dMdend requirements 34.64I 2A 261 26 926 26 426 26426 25 752 4 e99 Eamings for Commen Stock .... 126.747 124 981 115817 94.104 81082 66 419 20.12e DMderds declared on common stock 104.865 A4 066 71 511 61 274 56 760 46 171 19 011 Eamings invested in the Business S 21.882 40 915 44106 10 815 27122 20 246 t ill Eamings Per Share-Weighted Average $ 2.73 1 06 1 10 2 61 2 52 2 16 13e Return on Average Common Stock Equity % I I 09 12 30 1291 11.14 11 14 10 62 A 64 Times Eamed-Fised charges) ........ ........ 2.31 2 79 1 19 1 09 2 92 2 2A 2 25
-Fiued charges and preferred and preference dwidend regt.irements' l.80 2 10 2 14 2 ll 1 99 I eA I 82 Common Stock Data Shares Outstanding 1000's)-Year-end 51.208 41,3A6 40 454 16140 15 890 12 691 Il vA6
- Average , 46.478 40 841 17 155 16 097 Il ias 28 109 12 911 Book Value per Share at Year-end 3 24.02 25 19 2810 21 12 22 47 21 72 la 65 DMdends Declared per Share $ 2.20 2 05 i 90 ; 75 I 69 I 60 1 46 Payout percent .... .... .... 80.6 67 0 61 1 67 0 67 1 67 A Number of Shareholders at Year-end 101.662 87Al7 84bt s 74 741 71 775 69 194
' includes current matunties of long-term debt.
2For purposes of this ratio. eamings represent nec income plus income taies and fined charges. fined charges represent interest charges plus an imputed interest factor prtion of rentals
'For purposes of this ratio. earnings represent net in(ome plus income tames and fned charges. dMdends represent preferred and preference dMdend requirements multiplied by the ratio of that income before income tanes bears to net inccme.
l
1980 1979 1978 1977 1976 !975 1970 evenue IThousands)
Residential $ 342.239 291 575 292.109 261.126 221 531 191.149 75.990 Commercial .... . 195.436 171.715 166.A67 146 (N7 12? 324 110 700 40.481 Industrial-Testile . 106.747 98 657 94 414 89782 78 614 69.290 21.174 Industrial-Other . . 189.995 168.651 155511 135.381 114334 % 581 28889 Cosernment and Municipal...... 30.403 29 484 31.020 27.674 23227 20.825 8373 Sales for Resale 202.360 15582A 1 % 925 114 626 109514 91.9A0 25 794 Total Electncity Sales within Senice Aru ....... ...... 1.067.180 917.912 896.046 796 6A8 671,064 582.725 201 401 Nonterritorial Electricity Sales 3066 9310 7.485 1.225 Yrscellaneous Rennues 8.424 7 998 7.192 8 521 6 791 5 6Al 2.220 Total Operating Resenues $ 1.075.604 925 910 90141 A 80A 275 687.185 595891 204 A16 oad Data Electric Energy Sales tMilhonst Residential .Kmh 7.870 7.195 7.208 6 999 6.491 6 152 4 614 Commercial ... 4.935 4390 4 501 4 280 4 016 3.798 2691 Industrial-Testile . 3.699 3 719 3 5A9 3.752 3788 3.452 2 619 Industrial--Other . . . . . . . 6.092 5.890 5424 5 152 4 978 4 381 2.985 Go6ernment and Municipal 864 917 961 959 914 904 811 Sales for Resale 6.822 6 157 6 106 6 II4 5 735 5170 151 A Total Energy Sales Within cervice Area 30.282 28 668 27.991 27.256 25 915 24.057 17.102 Nonterntorial el 261 of 246 Total Electric Energy Sales 30.282 28 668 27.993 27.317 26.176 24 118 17348 Company Uses. Losses and Unaccourted for I.901 1 612 f.709 16A4 1328 f.700 1 249 Total Energy Requirements .hh 32,183 10300 29.702 29 001 27.704 25818 18 796 Electric Energy Supply 1%llionst D Generated-Steam-Fossil .Kah 22.299 18336 14 591 47398 18.989 18 374 16 311 Generated-Steam-Nuclear 8.955 10 802 13.891 9.895 7.381 5391 3 I Generated-Hy dro .... 680 1.019 716 732 756 987 621 l Generated-Other Fuel . . . . . . . . 224 146 294 406 110 31 115 i Purchased and interchanged-Net 25 (31 210 470 4to 875 1 544 Total Energy Supply .Kah 32.183 30 100 29 702 29 001 27.704 25 818 18 796 Peak Demand of Firm Load (000'st Within Service Area .KW 6.139 5.907 5.605 5.597 5.121 S ono 1.484 Nonterritorial 62 18 Total Peak Demand .KW 6.139 5 907 5 605 5 597 5.I81 5 098 34A4 Total Capabihty at Year End* 1000'st Fossil Fuel Plants .KW 5.589 4 A69 4.869 4 869 4.869 4.835 2.967 Nuclear Plants . 2.245 2.245 2.245 2 245 1.455 1.455 Hydro Plants 214 214 214 214 214 214 214 Purchased 75 12A 12A 128 228 22A 212 Total Capabihty .KW 8.053 7 456 7.456 7 456 6 766 6 712 1 191 Alscellaneous Customers at Year End Residential 612.209 617.391 601.947 585 R21 575.019 560 954 478.914 Other 109 3 107 624 106.212 101 711 101.917 99 574 86 511 Total 741.633 725 017 70A 159 6A9 552 676 956 660 528 565 425 Average Revenue Per KWH Residential . Cents 4.35 4 08 4 06 3 76 341 3 II I 64 Commercial 3.96 3 74 3 71 3 41 3 08 2.91 I 52 Industrial ................. . .. 3.03 2 78 2 77 2.51 221 2 12 89 Total Energy Sales Within Service Area 3.52 1 20 3 20 2 92 2.59 2.45 1.16 Residential Average Annual Energy Use .Kah I2.558 11.785 12.111 12.048 11.407 11.094 9.794 Average Annual Bill $ 546.11 480.84 491.22 452 97 189 32 345 04 Ico 62 Steam Electric Generating Plar t Fossil Fuel......... ........
Average Annual Heat Rate IBTU Per Net KWHI ... 10.190 9.996 10.167 10.008 9.980 9.951 9.785 Average Cost Per Million BTU...... . Cents 158.9 139.4 135 3 118 2 108 4 119 0 41 2 Average Cost Per Million BTU All Fuels ... .Ce nts 124.9 100 8 90 4 92 2 849 946 42 1 Nuclear Fuel ..... 35.7 35 4 40 1 40 3 24 9 21 6 Annual Load Factor. Service Area Load............ 59.7 58 6 60 5 61 0 lD
% 59 0 58.1 60 8 i
Represents peak capability. based on summer peak conditions and assuming all units are available for operation
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Appendix B PROSPECTUS 3,000,000 Shares Carolina Power & Light Company Common Stock (Without Par Value)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COM-MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Price to Underwriting Proceeds to Purchasers Discounts (1) Company (2)
Per Share . . . . S20.15 $ .22 S19.93 Total . . . . . . 960,450,000 $660,000 S59,790,000 (1) The Company has agreed to indemnify the Underwriter against certain civil liabilities, including liabili-ties under the Securities Act of 1933.
(2) Before deduction of expenses payable by the Company estimated at $90,000.
l l
The shares of Common Stock are being offered by the Underwriter when, as and if issued by the Company and accepted by the Underwriter, and subject to the approval of certain legal matters by its counsel and by counsel for the Company. It is expected that delivery of the Common Stock Stock will be made in New York City on or about November 24, 1981.
JEFFERIES & COMPANY, INC.
The date of this Prospectus is November 17, 1981. s
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK OR PACIFIC STOCK EXCHANGES, ANY OTHER EXCHANGE ON WHICH SUCH STOCK HAS BEEN ADMITTED TO TRADING PRIVILEGES, IN THE OVER-THE-COUNTER ,
MARKET OR OTHERWISE. SUCH STABILIZING, ONCE COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No dealer, salesman or other person has been authorized to give any information or.to make any represen-tation not contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by Carolina Power & Light Company (Company) or the Underwriter. This Prospectus does not constitute an offer to sell or a solicitation of an -
offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof.
AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance therewith files reports and other information -
with the Securities and Exchange Commission. Certain information, as of particular dates, concerning the Company's directors and officers, their remuneration and any material interest of such persons in transactions with the Company is disclosed in proxy statements distributed to stockholders and filed with the Commission. Guch reports, proxy state-ments and other information may be inspected and copied at the public reference facilities maintained by the Commission at Room 6101, 1100 L Street, N.W., Washington, D. C.; Room 1228, Everett McKinley Dirksen Building, 219 South Dearborn Street, Chicago, Ill.; Room 1100, Federal Building, 26 Federal Plaza, New York, N.Y.; and Suite 1710, Tishman Building, 10960 Wilshire Boulevard, Los Angeles, Calif.;
and can be inspected at the office of the Commission at O
i Suite 788, 1375 Peachtree Street, N.E. , Atlanta, Ga. Copies of ~such material can also be obtained at prescribed rates i 'from the Public Reference Section of the Commission at its
- principal office at 500 North Capitol Street, N.W., Washington, D. C. 20549. The Company's Common Stock is listed on the New York and Pacific Stock Exchanges, where reports, proxy material and other information ooneerning the Company may also be inspected.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE i -
The following documents filed by the Company with the Securities and Exchange Commission are incorporated by
- referencelin this Prospectus:
\ -[1)
^
b.1 ,
s Annual' Report on Form 10-K for the year ended
' " - O. December 31, 1980.
(2)
Proxy Statement, dated April 8, 1981, for the n1 '
S \, 1981 annual meeting of shareholders.
\[
j ; (3) Quarterly, Reports on Form 10-Q for the t l' - quarters end'ed March 31, 1981 , June 30,
( ' 1981, and September 30, 1981.
i * ,
,g ' !. (4) Form 8 dated May 8, 1981 amending Form 10-Q w x for the quarter ended March 31, 1981.
' s c( =\N-g ([ (5) Prospectus dated April 29, 1981 relating to i'- the sale of.400,000 shares of Serial Preferred
- Stock, $14.00 Series.
All. reports and other documents filed by the
' Company pursuant to Sections 13 or 14 of the Securities
" Exchange Act of 1934 af ter the date of this Prospectus and prior to the termination of the of fering made by this
\^ Prospectus shall be da'emed to be incorporated by reference
, in this Prospectus and to te made a part hereof from the
- , date of filing of such reports and documents.
I The Company will provide without charge to each person to'~whom a copy of this Prospectus has been delivered, on the written >rsquest of any such person, a copy of any or all of'the documents referred to above which have been or may be incorporated in this Prospectus by reference, other than exhibits to such documents. Written requests for copies of such documents should be addressed to Edward G.
Lilly, Jr., Executive Vice President, Carolina Power & Light Company, 411 Fayetteville Street, Raleigh, North Carolina 27602.
~
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I _N'
l SELECTED INFORMATION The following material, which is presented herein solely to furnish limited introductory information regarding the Company and the offering, has been selected from or is based upon the detailed information and financial statements appearing in the documents incorporated herein by reference or elsewhere in this Prospectus, is qualified in its entirety by reference thereto and, therefore, should be read together therewith.
THE OFFERING Security Offered . . . . . . . . . 3,000,000 shares of Common Stock (New Common Stock)
Shares Estimated to be 55,744,035 Outstanding after Offering . . .
Use of Proceeds . . . . . . . . . Financing of construction program Listed . . . . . . . . . . . . . . New York and Pacific Stock Exchanges (Symbol: CPL) 1981 Price Range (through November 16, 1981) . . . . . . . S20 3/4 - $16 3/4 Closing Price on November 16, 1981 on the New York Stock Exchange . . . . . . . . . . . . S20 1/8 Indicated Current Annual Dividend Rate . . . . . . . . . 52.40 CAROLINA POWER & LIGHT COMPANY Business . . . . . . . . . Generation, transmission, distribution and sale of electricity Service Area . . . . . . . Portions of North Carolina and South Carolina comprising approximately 30,000 square miles Customers . . . . . . . . . Approximately 750,000 Installed Summer Generating Capability (in kilowatts). . . . . . 7,978,000 Sources of Generation during 1981 (estimated) . 70.0% coal, 28.0% nuclear, 1.,% hydro, 0.5% Ns. 2 fuel oil 6
l l
,O
)
(V SELECTED INFORMATION CONTINUED SELECTED FINANCIAL INEOBfRTION (Millions, except per share mounts)
Twelve lenths Year Ended December 31, Ended Septerber 30, 1976 1977 1978 1979 1980(a) 1981(a)
$903.4 S925.9 $1,075.6 S1,316.2 oporrting Revenues . . $687.4 $808.3
$142.7 S153.2 S161.4 $210.8 Net Income . . . . . . S111.0 S121.0 Earnings for Camon $169.5
$84.1 $94.1 S115.8 S125.0 S126.7 Stock . . . . . . . .
Average Carmon Shares 51.4 outstanding . . . . . 33.4 36.1 37.4 40.8 46.5 Earnings Per C:2 mon S3.30 e........ S2.52 S2.61 S3.10 S3.06 S2.73
, ends Declared Per S2.28 Share .... $1.69 S1.75 $1.90 $2.05 S2.20 (a) Earnings for the twelve months ended September 30, 1981 were favorably influenced by a mismatch of fuel costs and fuel revenue recoveries resulting in an increase in net income and earnings per l
common share of approximately $10 million and 19 cents, respectively. Under-recovered fuel costs not deferred on the Company's books totaled $40.7 l million at September 30, 1981, compared to $59.4 million at September 30, 1980. For 1980 a mismatch between fuel costs and revenuet decreased earnings per share by S.48.
i m
v
SELECTED INFORMATION CONCLUDED CAPITALIZATICN (Millions, except percentages)
As of September 30, 1981 Actual Ratio _ Adjusted (a) Ratio (a)
Inng-term Debt (b) . . . . $1,921.1 51.7% $1,921.1 50.9%
Preferred Stock- 5.7 Redemption Required . . 214.7 5.8 214.7 Preferred Stock-Redemption Not Required . . . . . . . . 238.1 6.4 236.1 6.3 47.9 1.3 47.9 1.3 Preference Stock ....
Cmmon Stock Equity . . . 1,291.5 34.8 1,351.2 35.8
'Ibtal Capitalization . . S3,713.3 100.0% S3,773.0 100.0%
Short-term debt (other than $130 million of Short-Term Debt Expected to be Refinanced) is estimated to total $130 million immediately before issuance of the New Common Stock and $75 million after application of the proceeds from the sale of the New Common Stock.
(a) Adjusted to reflect the proposed sale of the New Common Stock.
(b) Including $12,369,000 of Nuclear Fuel Obligations due within one year, $15 million principal amount of term loan due September 1982 and $130 million principal amount of Short-Term Debt Expected to be Refinanced.
O
l
/3 '
L/
THE COMPANY Carolina Power & Light Company is a public service corporation formed under the laws of North Carolina in 1926, and is engaged in the generation, transmission, distribution and sale of electricity in portions of North Carolina and South Carolina. The principal executive offices of the Company are located at 411 Fayetteville Street, Raleigh, North Carolina 27602, telephone 919-836-6111.
I APPLICATION OF PROCEEDS The net proceeds (estimated at $59,700,000) from
/)
(/
the sale of the New Common Stock will be used for the repayuent of a portion of short-term borrowings incurred i
primarily for the construction of new facilities, and for other general corporate purposes. Short-term borrowings (other than $130 million of Snort-Term Debt Expected to be Refinanced) are anticipated to approximate $130 million immediately prior to the delivery of the New Common Stock.
The Company anticipates investing the proceeds not immedi-ately required for the above purposes in short-term money
. market instruments.
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,- - . . - - - , , - , , - _ . - _ - ==
COMMON STOCK PRICE RANGE AND DIVIDENDS The Common Stock is listed on the New York and Pacific Stock Exchanges. The high and low sales prices per share for the periods indicated, as reported in The Wall Street Journal (as New York Stock Exchange transactions through January 23, 1976, and thereafter as composite transactions), and the dividends paid per share, were as follows:
Price Range Dividends High Low Quarterly Annual 1976 . . . . . . . S24 1/2 $17 5/8 $1.66 1977 . . . . . . . 25 3/8 21 1/2 1.72 1978 . . . . . . . 23 7/8 19 7/8 1.87 1979 First Quarter 22 1/2 21 3/8 S.49 Second Quarter 22 18 1/4 .49 Third Quarter 22 19 7/8 .52 Fourth Quarter 20 1/8 17 3/8 .52 2.02 1980 First Quarter 19 1/8 14 7/8 .52 Second Quarter 21 3/4 16 1/4 .52 Third Quarter 22 19 .56 Fourth Quarter 19 3/4 16 1/2 .56 2.16 1981 First Quarter 18 3/8 16 7/8 .56 Second Quarter 20 3/4 16 3/4 .56 17 7/8 .60 l Third Quarter 20 Fourth Quarter (through November 16) 20 1/2 17 7/8 .60 2.32 l The reported last sale on November 16, 1981 on the New York Stock Exchange was $20 1/8 per share. The book value of the Common Stock as of September 30, 1981 was
$24.45 per share.
The Company has paid quarterly dividends on its Common Stock in every quarter since the Company's Common Stock became publicly held in 1946.
/%
k The Company has an Automatic Dividend Reinvestment Plan (Plan) whereby the holders of shares of the Company's Preferred, Preference and Common Stock may automatically have their cash dividends invested in new issue shares of the Company's Common Stock. In addition, holders of such stocks may make optional cash payments (up to $2,000 per month) to be invested in the Company's Common Stock under the Plan.
The price of Common Stock purchased under the Plan is equal to 97% of the average of the high and low sale prices for the Common Stcek (on the composite tape as reported in The Wall Street Journal) on the day on which the Common Stock is purchased.
In October 1981 the Company initiated a Customer Stock Ownership Plan pursuant to which customers of the Company may purchase Common Stock on a monthly basis at 97%
of the average of the high and low sale prices for the Common Stock (on the composite tape as reported in The Wall Street Journal) on the day on which the Common Stock is purchased. The Company has reserved 2,000,000 shares of g Common Stock for sales pursuant to the Customer Stock j Ownership Plan. The Company anticipates that such sales of
Common Stock will commence in January 1982.
1 ADDITIONAL INFORMATION The following material is presented herein to update information contained in the Company's documents incorporated by reference herein (see "Incorportion of Certain Documents by Reference") and, therefore, should j be read together therewith.
i Construction and Financing Program To finance the Company's 1981 capital requirements of S584 million, the Company has issued and sold Preferred Stock and Common Stock providing aggregate gross proceeds to the Company of approximately $65.4 million. In addition, the Company has raised approximately S225.6 million as follows: (i) $15.6 million from the proceeds of pollution control revenue bonds sold in 1980, (ii) S80 million of term loans and (iii) S130 million of Short-Term Debt Expected to be Refinanced. The Company anticipates that after the application of the proceeds from the sale of the New Common Stock the external capital requirements of the Company for
) the remainder of 1981 will be approximately $30 million, v
which will come from short-term borrowings. The nalance of the Company's 1981 capital requirements is expected to come from internally generated funds.
As of September 30, 1981 the Company had expended approximately S354 million of the amount estimated for its 1981 capital requirements.
The Company is currently considering the cancel-lation or further deferral of Harris Units No. 3 and No. 4 as a result of the high cost of capital, increasing cordtruc-tion costs, and a reduction in the projected growth of customer demand. The Company's intensified load management program has been designed to reduce significantly the Ccmpany's peak demand in the 1990's when Harris Units No. 3 and No. 4 are presently scheduled to be placed in service.
As of September 30, 1981 the Company had expended approxi-mately 150 million on Harris Units No. 3 and No. 4. See
" Retail Rate Matters".
The Company has entered into an agreement with the North Carolina Municipal Power Agency Number 3 (Agency),
composed of the majority of the North Carolina municipal wholesale customers of the Company and Virginia Electric and Power Company. The Agency will acquire, subject to regula-tory approval, undivided interests, ranging between 12.9%
and 18.4%, in the Company's Brunswick Units No. 1 and No. 2 and Roxboro Unit No. 4 as well as the Harris and Mayo Plants now under construction. The Company will continue to operate the units and provide transmission services, back-stand services and supplemental power as required to providp Agency participants with electric power. Under some, but not all cases, the Company's First Mortgage and Deed of Trust could require the Cuapany to retire a pro rata portion of each series of its outctanding first mortgage bonds, except Pollution Control Series A, B, and C, with the proceeds of such a sale. Whether such a retirement would be required will depend upon various factors including the timing of the disposition and the nature and amount of the consideration received and whether such disposition is made to or ordc ed by a governmental authority.
Recent Financial Information For the twelve months ended October 31, 1981, operating revenues, net income, earnings for Common Stock and earnings per Common Share were $1,318,187,000,
(v ) $208,998,000, $167,214,000, and $3.22, respectively. These amounts are unaudited but in the opinion of the Company include all adjustments (consisting of only normal recurring accruals) necessary to a fair statement of such amounts.
These amounts reflect S43,638,000 of revenues billed subject to refund with interest pending final regulatory determina-tions. An additional $12,887,000, which is not included in the above amount, was billed subject to refund with interest and has been set aside in a reserve account for possible refund.
Earnings for the twelve months ended October 31, 1981 were favorably influenced by a mismatch of fuel costs and fuel revenue recoveries resulting in an increase in net income and earnings per common share of approximately $5.8 million and 11 cents, respectively. Under-recovered fuel costs not deferred on the Company's books totaled $40.7 million at October 31, 1981, compared with $52.0 million at October 31, 1980.
Retail Rate Matters (r'N)
\~/ In May 1981, the Company filed a request with the North Carolina Utilities Commission (NCUC) for a general rate increase of 16.4 percent which, if granted, would increase retail rates by approximately $151 million annually.
Hearings were completed in November 1981. The Company anticipates an NCUC decision in December 1981.
In October 1981, the NCUC issued an order approving the Company's expenditures of approximately S80 million for the cost of fuel incurred in the four month period ending August 31, 1981 and authorized tne collection of rates reflecting such expenditures during the twelve month period commencing December 1, 1981. Normally such rates would have been collected during the four month period commencing December 1, 1981. The NCUC order stated that it had spread the collection of such rates over the longer period to reduce the impact of the higher rate on the Company's customers.
The Company filed a request with the South Carolina Public Service Commission for a general rate increase of 22 percent which, if granted, would increase retail rates by approximately $40 million annually. This increars is being s collected under bond subject to refund with interest at 9
[ ') percent. Hearings are anticipated for March 1982.
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The Comp:ny has announced an intensified conserva-tion and load management program designed to reduce peak demand by an additional 900 MW by 1995. This effort includes offering loans to Company customers at 6 percent interest to install insulation and a program of direct control of air conditioners and water heaters. The Company's overall goal is to reduce the projected 1995 summer peak demand by 1750 MW.
Tne NCUC has announced an investigation and independent management examination of the Company focusing on plant performance and power production at all Company facilities. This investigation and examination is expected to be completed in the summer of 1982. In addition the Public Staff of the NCUC has announced its intent to investi-gate the performance of the Company's Brunswick Plant.
The Company is unable to predict the outcome of the above matters.
Wholesale Rate Matters In June 1981, the Company filed a request with the h Federal Energy Regulatory Commission (FERC) for a general rate increase of 15.7 percent which, if granted, would increase wholesale electric rates by approximately $35 million annually. By order issued August 11, 1981, the FERC suspended the effective date of the proposed increase until January 1982 and set the matter for hearing. The Company is unable to predict the outcome of this matter.
Environmental Matters The Environmental Protection Agency (EPA) has recently approved a State Implementation Plan revision which eliminated the requirement that the Company's coal-burning facilities reduce visible emission limitations to 20 percent opacity. As a result of this approval, the federal and state visible emission limitations will remain at 40 percent opacity for coal-burning f acilities.
The Roxboro Unit No. 4 boiler manufacturec has installed new burners on the "A" boiler of that unit.
Preliminary results indicate that the new burners comply with the nitrogen oxide (NO ) emission limitations. The Company is presently installing similar burners on the "B" boiler and making additional modifications to achieve the warranted steam temperatures for that unit. The North
O Carolina Division of Environmental Management has notified the Company that continuous NO monitors must be installed by December 1, 1981 and formally notified the Company that the Roxboro Unit No. 4 is not in compliance with federal and state NO requirements. The Company has requested deferral of the iEsta11ation of the monitors until af ter all pending plant modifications to correct steam temperatures and NO, problems have been completed.
EPA has objected to the State of North Carolina's draf t National Pollutant Discharge Elimination System (NPDES) permit for Mayo Units No. 1 and No. 2. If the EPA persists in its position and prevails, or if the State fails to modify other permit provisions which the Company has
, excepted to, additional treatment costs, undetermined at this time, could be required as a result of limitations on discharges from the ash pond at the units. In the event a
, final permit is not issued by mid-1982, initial operation of I the plant (presently scheduled for 1983) may be delayed.
The Company has requested a hearing to challenge O the thermal limit,ations in the NPDES permit for the Roxboro Steam Electric Plant. These Ibnitations are now being informally reviewed by the North Carolina Division of Environmental Management based on the Company's recent submittal of the Hyco Reservoir Environmental Report (1979-1980). The Company feels that data contained in this report support modifications of the thermal limitations in the permits in a manner which will allow the continued operation of Units Nos. 1 and 2 utilizing "once through" cooling water without seasonal load limitations. However, should the current permit conditions remain in effect without modifi-cation, Roxboro Units Nos. 1 and 2 could be required to operate at reduced output during portions of the summer or additional expenditures could be required to modify the existing plant cooling system.
The North Carolina Environmental Management Com-mission granted the Company's existing coal-fired generating units a three year variance (through June 30, 1982) from the otherwise applicable particulate emission limitations and established alternate limits to be in effect while outlet emission testing was conducted to gather data for use in determining the particulate emission limits to be applicable subsequent to June 30, 1982. Particulate emission data that O
has been gathered supports a revision in the particulate emission standard. It is expected that the North Carolina Environmental Management Commission will institute a rule-making proceeding to consider changes in this standard. If not, the Company intends to petition for a variance.
While the outcome of the above matters is uncer-tain the Company does not believe their resolution will have any material adverse effect on the financial position or results of operations of the Company.
Nuclear Matters The Company's Robinson Unit No. 2 has experienced damage to steam generator tubes resulting in leaks which have required outages for inspection and plugging of tubes.
Recent inspections indicate that tube deterioration has progressed at higher rates than expected. Analysis of the tube degradation data indicates that the rate of degradation may be slowed significantly by operating .st reduced temperatures in the steam generator hot leg. At this time, operation t.t the lower temperature requires power reductions up to 50 percent, although operation at higher power levels is possible if necessary to meet system load. The Company intends to continue operating this unit for the remainder of its current fuel cycle on the basis of lower temperatures.
Af ter hydrostatic testing and control system changes are made to support continued operations at reduced temperatures but higher power levels, the Company anticipates operating at a load of about 75 percent. The Company presently plans to re-place the Robinson steam generators but because of the lead time associated with such major items of equipment, replacement will not be possible until 1984 or 1985. The unit will have to be shut down for approximately one year to replace the steam generators and associated equipment. The cost of the change is currently estimated to be 7100 million to S200 million, exclusive of replacement power costs.
The Nuclear Regulatory Commission (NRC) has asked the Company and other utilities who own pressurized water reactors, such as the Company's Robinson Unit No. 2, for information on the ability of the reactor pressure vessels to withstand the ef fects of thermal shock. Thermal shock is a condition which results from the introduction of cold water into a hot, pressurized reactor vessel. If the O
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i fracture toughness of the vessel has been reduced by exten-sive irradiation, cracking could result from thermal shock.
l
- The NRC believes that older reactor pressure vessels can
- withstand thermal shock at the present time, but feels that
- continued operation at full power could reduce the vessel toughness to unacceptable levels before retirement of these plants. The NRC staff ' believes a long lead time will be .
necessary to plan and implement corrective measures and that i additional steps should be taken now. The Company's initial ;
i findings indicate there is no need for immediate concern although it is undertaking long-term analyses.
The Company's Brunswick Unit No. 1 was removed from service in April 1981 and was to be returned to service in July. As the unit was being brought on line, .
problems were encountered in the turbine lubricating oil i system and the unit had to be shut down. Subsequent in-spection revealed varying degrees of damage to the turbine l bearings which had to be repaired. The. damage has been
- attributed to foreign material in the turbine oil. The l turbine lube oil system has been thoroughly flushed and
- cleaned to ensure removal of this material. The unit was returned to service in September.
l The Company has been required by the NRC to modify the augmented off gas system at its Brunswick Plant by
- December 1983. The system provides supplemental decon-tamination of radioactive gases from the plant's condenser.
l The Company also plans to replace the condenser tubes in the Brunswick units to reduce the potential for tube leaks which interfere with the chemistry limits in the primary systems.
This work will also require extended outage for the units. ,
The Company projects that approximately 51 unit outage weeks will be required on its Brunswick units to perform these modifications and accommodate other planned maintenance and refueling work during 1982, 1983 and the first part of 1984 at a cost of approximately $50 million.
If additional requirements are imposed or the NRC does not concur in the Company's proposed scheduling of additional work, the required outage time will be increased. .
The Company has submitted emergency response plans and implementing procedures for the Brunswick and Robinson '.
Nuclear Plants to the NRC in compliance with revised f ederal I
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O regulations. Revised emergency plans prepared by the State of South Carolina and the State of North Carolina have also been submitted to the NRC and the Federal Emergency Manage-ment Agency. Joint emergency preparedness exerciscs with North and South Carolina have been conducted recently for the Brunswick and Robinson Nuclear Plants, respectively.
The Company's emergency preparedness program will be evaluat-ed by the NRC no later than April 1, 1982. If the NRC finds any of the plans deficient and the deficiency is not correct-ed within four months, the NRC can suspend plant operation or take other enforcement action. The Company has been required by the NRC to previde an emergency notification system by Febcuary 1, 1982 in the area within a 10 mile radius of the Company's Brunswick and Robinson Plants. The Company anticipates meeting this date; however, if this date is not met and an extension is not granted, the NRC may suspend plant operations or take other enforcement action.
The NRC and the United States Court of Appeals for the District of Columbia Circuit have denied an industry request for a stay of NRC's fire protection regulations.
The Company has pending before the NRC a petition for relief from a portion of the substantive requirements of the regulations and exemption from the deadlines imposed by the schedule.
The Company has petitioned for hearings on pending NRC orders which require environmental qualification of electrical equipment in the Company's nuclear units by June 30, 1982. In a separate proceeding, the NRC staff has recommended that the deadline be extended.
The Company was notified in September 1981 of a l proposed $40,000 fine for violation of NRC radiation control l
requirements at Brunswick Unit No. 2. An employee working on the water purification system received a radiation ex-posure in excess of NRC quarterly limits but below the level considered harmful. The Company has paid $35,000 of the i fine and requested clarification of that portion of the l notice of violation represented by the remaining $5,000.
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l The Company may incur increased construction and operating expenditures as a result of each of the foregoing matters and, in the event that the NRC should order the shutdown of any of the company's nuclear units, system power resources could become inadequate.
Nuclear Fuel Supply The nuclear fuel cycle requires the mining and milling of uranium ore to provide uranium concentrate (U 0I
! the conversion of U3 0, to uranium hexaflodde (UF 6 ), en 3 8 '
i richment of the UF 6 and fabrication of the enriched uranium into fuel assemblies. The Company has on hand or has con-tracted for raw materials and services for its Robinson, Brunswick and Harris Units through the years shown below:
Estimated Raw Materials and Services in-service 4
IX11t Date Uranitan Conversion Enrichment Fabrication 4
m binson No. 2 ......
- 1987 1986 2002 1986 Brunswick No. 1 .....
- 1987 1986 2002 1985 Brunswick No. 2 .....
- 1987 1986 2002 1988 Harris No. 1 ........ 1985 1987 1986 2002 1985
- Harris No. 2 ........ 1988 1986 1986 2002 1988 i
Harris 2 . 3 ........ 1994 - -
2002 1994 Harris No. 4 ........ 1992 - -
2002 1992
- In commercial operation.
t These contracts are expected to supply the necessary nuclear fuel to operate Robinson Unit No. 2 through 1987, Bruiaswick Unit No. 1 through 1986, Brunswick Unit No. 2 through 1987, Harris Unit No. 1 through 1986 and Harris Unit No. 2 through 1989. The Company expects to meet its U O requirementsthroughtheyearsshownabovefrominvent$rfon hand and amounts received under contract. Additional supplies of Ug o, are available at prices prevailing in the uranium marXet (S23.50 per pound in August 1981). The Company does not expect to have difficulty obtaining 0 038 for years later than those shown above.
O T
DESCRIPTION OF COMMON STOCK The Company's authorized capital stock consists of Common Stock, Preferred Stock and Preference Stock. The Preferred Stock ranks prior to the Preference Stock and the Common Stock, and the Preference Stock ranks prior to the Common Stock, as to dividends and liquidation rights.
The following is a summary of certain rights and privileges of the Common Stcck of the Company. The summary does not purport to be complete, and reference is made to Article Fourth of the Company's Restated Charter (Charter),
incorporated by reference as an exhibit to the Registration Statement, for complete statements. The following state-ments are qualified in their entirety by such reference.
Reference is also made to the laws of North Carolina.
Dividend Rights: The Common Stock is entitled to all dividends after full provisions for Preferred Stock and Preferenca Stock dividends. The Charter contains provisions limiting the amount of dividends or distri-butions which the Company may pay or make on its Common Stock (i) unless at least a 25 percent ratio cf Common Stock and surplus to total capitalizaticn is maintained or (ii) if there is a failure to pay dividends on any Preferred Stock or Preference Stock (aggregate annual requirements - $44,605,000) or to meet sinking fund payments on the Preferred Stock. So long as any of the present series of First Mortgage Bonds is outstanding, the payment of Common Stock dividends is restricted to aggregate net income available therefor (after dividends on all Preferred Stock outstanding) since December 31, 1948, plus S3,000,000.
No portion of retained earnings is restricted as of the date hereof. There are no defaults in the payment of dividends on any of the outstanding Preferred Stock or Preference Stcck.
Voting Rights (Non-Cumulative Voting): Except with respect to Preferred Stock A, each share of Preferred Stock and each snare of Common Stock is entitled to one O
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l vote on all matters. Since the holders of such shares do not have cumulative voting rights, the holders of
' more than 50 percent of the shares voting can elect all the Company's directors, and in such event the holders j of the remaining shares voting (less than 50 percent) cannot elect any directors. If and when dividends payable on any of the Preferred Stock shall be in default in an
! amount equivalent to four full quarterly payments or more per share, and thereafter until all arrears have ber,n paid, holders of Preferred Stock, voting as a class, shall be entitled to elect the smallest number of directors necessary to constitute a majority of the Board of Directors, and
! holders of Common Stock, voting as a class, shall have the right, subject to prior rights of holders of Preference Stock, to elect the remaining directors. ~ If and when dividends payable on the Preference Stock shall be in j default in an amount equivalent to six full quarterly payments or more per share, thereafter until all arrears have been paid, holders of Preference Stock, voting as a
- class, shall be entitled, subject to the prior rights of the Preferred Stock, to elect two directors.
Liquidation Rights: The Preferred Stock is
) entitled, in liquidation, in preference to the Preference Stock and the Common Stock, to $100 per share or, for Freferred Stock issued after June 1, 1980, the liquidation value fixed by the Board'of Directors, pluc in each case accumulated unpaid dividends. Each series of Preference Stock is entitled, in' liquidation, in preference to the- ,
Common Stock, to the amount per share fixed at the time of i
issuance thereof and accumulated unpaid dividends. The holders of the Common Stock are entitled to share, ratably, ,
in the distribution of all remaining assets.
Pre-emptive Rights: The holders of Common Stock have no pre-emptive rights to purchase additional shares of Common Stock.
i Miscellaneous: Upon the issue and sale of the New Common Stock as contemplated in the Prospectus, such shares >
will be fully paid and nonassessable.
~20-The transfer agents for the Common Stock are.
Wachovia Bank and Trust Company, N.A., Winston-Salem, North Carolina, and Bradford Trust Company, New York, New York.
UNDERWRITER Jefferies & Cocpany, Inc. (Underwriter) has agreed, subject to the terms and conditions of the Underwriting Agreement, to purchase from the Company the 3,000,000 shares of the New Common Stock offered hereby.
The Underwriting Agreement provides that the Underwriter shall place the New Common Stock offered hereby with investors, including but not limited to, pension funds, pooled investment accounts and other institutional investors at the Price to Purchasers shown on the front cover of this Prospectus. As a condition to the sale of the New Common Stock by the Company, it may be required that certain of such investors or their tructee or advisor, as the case may be, provide written assurances satisfactory to the Company and the Underwriter, and to their respective counsel, that (a) if a trustee or advisor, the trustee or advisor has discretionary authority over the investments and sales by such institutional investors, (b) they shall not cause any of the shares of New Common Stock placed with such institu-tional investors to be sold in violation of the registration provisions of the Securities Act of 1933 and comparable provisions of state securities statutes and (c) the Company has no obligation to prepare or furnish any registration statement or any copies of any prospectus in connection with any resale of the shares of the New Common Stock.
EXPERTS AND LEGALITY The balance sheets, schedules of capitalization and the related statements of income, retained earnings and source and use of financial resources included or incorporated by reference in the Company's latest Annual Report on Form 10-K, incorporated herein by reference, have been ex& mined by Deloitte Haskins a Sells, independent certified public accountants, as stated in their cpinions O
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appearing or incorporated by reference therein. The state-ments made as to matters of law and legal conclusions under
" Additional Information-Retail Rate Increases" in the Company's Prospectus, dated April 29, 1981, incorporated herein by reference, under " Additional Information-Retail Rate Matters" and " Description of Common Stock" in this Prospectus and under " Item 1. Business" in the Company's latest Annual Report on Form 10-K, incorporated herein by reference, have been reviewed by William E. Graham, Jr.,
Esq., Executive Vice President and General Counsel for the Company. All of such statements are set forth in reliance upc7 the opinions of said firm and individual, respectively, as experts, as expressed in their opinions with respect thereto.
The legality of the securities offered hereby will be passed upon for the Company by Reid & Priest, 40 Wall Street, New York, New York, counsel to the Company, and
,- s for the Underwriter by Morgan, Lewis & Bockius, 611 West
( ) Sixth Street, Los Angeles, California. Said firms may rely
\--
as to all matters of North Carolina law on the opinion of William E. Graham, Jr., Esq., Executive Vice President and General Counsel of the Company, Raleigh, North Carolina and as to all matters of South Carolina law on the opinion of Paulling & James, Darlington, South Carolina. As of October 9, 1981, William E. Graham, Jr., Esq., owned 3.101 shares of the Company's Common Stock. Members of his family owned 2,766 additional shares as to which Mr. Graham disclaims beneficial ownersh.p. Mr. Graham is acquiring additional shares of Common Stock at regular intervals as a participant in the Company's Stock Purchase-Savings Program for Employees, the Employee Stock Ownership Plan and the Automatic Dividend Reinvestment Plan.
l The information relative to the estimates of coal
! reserves appearing in the Company's latest Annual Report on Form 10-K, incorporated herein by reference, has, as therein stated, been reviewed and verified by Paul Weir Company Incorporated, Chicago, Illinois, independent mining consul-tants and engineers, and has been incorporated herein by reference in reliance upon such review.
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O CONTENTS 3,000,000 Shares Page Available Information . . . . 2 Incorporation of Certain Docu-ments by Reference . . . . . 3 Carolina Power & Light Company Selected Information . . . . . 4 The Company . . . . . . . . . 7 Common Stock Application of Proceeds . . . 7 Common Stock Price Range and Dividends. . . . . . . . 8 (Without Par Value)
Additional Information . . . . 9 Description of Common Stock . . . . . . . . . . . ,
18 Underwriter. . . . . . . . . . 20 PROSPECTUS Experts and Legality . . . . . 20 No dealer, salesman or other person has been authorized to give any JEFFL' RIES & COMPANY, INC.
information or to make any representa-tion not contained in this Prospectus, in connection with the offer contained in this Prospectus, and, if given or made, such information or representation must not be relied upon as having been authorized by the Company or the Under-writer. This Prospectus is not an offer to sell, or a solicitation of an offer to buy, by the Underwriter in any state in which it is unlawful for such Underwriter to make such an offer or solicitation.
Neither the delivery of this Prospectus November 17, 1981 nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof.
t Appendix C l
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! AUDITED FINANCIAL STATEMENTS t
4 l AND
! OTHER FINANCIAL INFORMATION i
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i NORTH CARGLINA MUNICIPAL i :
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POWER AGENCY NUMBER 3 sl l
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i JUNE 31, 1981 r
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! PREPARED BY: Ernst & Whinney !
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I f NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 RALEIGH, NORTH CAROLINA 2
Officers Chairman - Simon C. Sitterson, Jr. - Kinston Vice-Chairman - Peter G. Vandenberg - Laurinburg Secretary-Treasurer - David R. Taylor - Tarboro.
1 Board of Commissioners R. G. Anthony Hobgood Furman K. Biggs, Jr. Lumberton T. Bruce Boyette Wilson Tommy M. Combs Elizabeth City
- Russ Conner New Bern W. D. Cox Hertford
! Robie G. Dunn Benson s Raymond Glover Pikeville Lamar Hales Apex Jonathan Hankins Southport Ferd L. Harrison Scotland Nr.ck Guy G. Hill Wake Forett E. C. Hines Wintervi'.le Charles O'H. Horne, Jr. Greenville Devone Jones Fremont 1
D. R. Jones Washington B. D. Kimball Enfield Earl Langley Smithfield John McNeill Red Springs Ralph Mobley Robersonville W. Everette Prince Selma James P. Ricks, Jr. Edenton W. P. Riley Hamilton 4 William L. Ross Waynesville T. R. Shaw, Jr. Windsor Charles Stewart Clayton Mark A. Suggs Ayden Harry S. Taylor, Jr. Hookerton Frederick E. Turnage Rocky Mount Ralph M. Wallace Belhaven Edward B. Walters LaGrange
5 g Lois Brown Wheless Louisburg j J. A. Wooten, Jr. Farmville General Manager - Ralph W. Shaw
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i Audited Financial Statements and Other Financial Information NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 June 30, 1981 Audited Financial Statements 1
Accountants', Report. . . . . . . . . . . . . . . . . . . . . . . .
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Statements of Revenues and Expenses and Changes in Fund Balance. . . . . . . . . . . . . . . . . . . . 3 Statements of Changes in Financial Position. . . . . . . . . . . . 4 Notes to Financial Statements. . . . . . . . . . . . . . . . . . . 5 Other Financial Information Accountants ' Report on Other Financial Information . . . . . . . . 7 Comparison of Actual Revenues and Expenses with Budget . . . . . . 8 Details of Management Services Expenses. . . , . . . . . . . . . . 9
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(Gv)
Ernst&WhinneJu l100 Branch Banking & Trust Building Raleigh, Nor h Carolina 27601 919/833-7301 4
Of ficers and Board of Comnissioners North Carolina Municipal Power Agency Number 3 Raleigh, North Carolina We have examined the balance sheets of North Carolina Municipal Power Agency Number 3 as of June 30, 1981 and 1980, and the related statements of revenues and expenses and changes in fund balances, and statements of changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
(/
In our opinion, the financial statements referred to above present fairly the financial position of North Carolina Municipal Power Agency Number 3 at June 30,1981 and 1982, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis.
Y ( -%s 6
l Raleigh, North Carolina August 12, 1981 I
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BALANCE SHEETS NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 4
- June 30
! 1981 1980 ASSETS I Cash S 22,180 $ 4,036 I
Short-term investments 10,717 52,959 i
S 32,897 $56,995 LIABILITIES AND FUND BALANCE Accounts payable $398,071 $30,172 COMMITMENTS--Note B l Fund balance (deficit) (365,174) 26,823 ;
$ 32,897 $56,995 See notes to financial statements i
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._. . _ _ _ _ _ . - - _ _ _ _ - - = _ _ _ .
f l STATEMENTS OF REVENUES AND EXPENSES I AND CHANGES IN FUND BALANCE NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 l
1 Year Ended June 30 1981 1980 Revenues:
Membership dues $ 589,877 $404,870 9,111 7,502 Investment revenue TOTAL REVENUES 598,988 412,372 Expenses:
i Outside con'sultants:
i- Legal 246,695 81,898 Engineering 524,121 223,326
' 770,816 305,224 i
Administrative 220,169 87,157
) TOTAL EXPENSES 990,985 392,381 l
j EXCESS (DEFICIENCY) 0F REVENUES OVER EXPENSES (391,997) 19,991 Fund balance at beginning of year 26,823 6,832 FUND BALANCE (DEFICIT) AT END OF YEAR $(365,174) $ 26,823 See notes to financial statements o- .-..-..- -- . - . _ - _ _ _
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'1 STATEMENTS OF CHANGES IN FINANCIAL POSITION < ,
NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 t'
Yest Ended June 30 -f ,
,1981 1980
.(
.- 1 SOURCES (USES) 0F WORKING CAPITAL ,
7
- 7 >' ,.f Excess (deficiency) of revenues ' '
M391,997) S 19,991 a f ' #'
over expenses ' -
INCREASE (DECREASE) IN WORKING CAPITAL, S(391,997') $ 19,991 ' / // -
- :- )
s' , l' COMPONENTS OF INCREASE (DECREASE) IN f ..
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WORKING CAPITAL , ,
- -- - 'e Cash S 18,144' $(22,992) 'e - '
' ' 52,959 -!"
Inves t.aents .,
, , , _ (42342) '
(367,899) (17,543)
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Accounts Payable 7 Prepaid Dues
', - ' 7,567 ,f-
/.
S 19,991
, s INCREASE (DECREASE)'INWORKINh'C.APITAL $(391,997) s f i
e/ 1 See notes to finc.ncial stateme'nts -
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- NOTES TO FINANCIAL STATEMENTS
! NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 I
4 NOTE A--SIGNIFICANT ACCOUNTING POLICIES The' Agency: North Carolina Municipal Power Agency Number 3 is a joint
- agency organized and existing pursuant to Chapter 159B of the General Statutes of North Carolina, to enable municipal electric systems. through I the organization of the Agency, to finance, build, and operate generation
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- sad transmission projects. The Agency is composed of 22.of the 23 h municipal systems served directly by Carolina Power & Light Company and 14
! of the 16 municipal systems served by power generated by Virginia Electric and Power-Company.
Revenues: The members are assessed annual dues in order to fund the studies of various potential alternatives to their power supply _needs.
Revenues are recorded on an accrual basis as assessed.
i l Investments: Investments which consist of short-term federal securities
- , are stated at cost'which approximates market value at the balance sheet date.
NOTE B--COMMITMENTS I
The Agency has entered into a contract with Electricities of North Carolina whereby Electricities provides to the Agency, at actual cost, management
. services as necessary to conduct business. The term of this agreement is f for a period continuing to and including December 31, 1984, and shall be
- automatically renewed for successive periods of 3 years thereafter until
! terminated by one year's written notice by either party to the end of any l contract year.
l The Agency has entered into an agreement with North Carolina Municipal Power Agency Number 1 to share costa equally of systems being currently developed for Agency 1. The development of the business systems is of benefit to both Agency 1 and Agency 3. The agreement provides that Agency 1 will bear the costs until such time as Agency 3 issues electric l
revenue bonds and at that time, Agency 3 shall pay the costs from the i proceeds of the sale of the bonds. In the event Agency 3 does not issue
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bonds, Agency 1 shall not be entitled to any reimbursement for the costs.
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- iq , NOTES TO FINANCIAL STATEMENTS--Continued
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iw$. m g \ ~ NORTH CAROLINA MUNICIPAL POWER 4GENCY NUMBER 3
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' NOTE B--COMMITMENTS--Continued '
N1rth Carolina Municipal Power Agency Number 3 has successfully concluded negotiations with Carolina Power '& Light Company to acquire an undivided
. ownership interest in certain fossil and nuclear generating units, including existing units and units under construction. On July 30, 1981, the Board of Commissioners reconmended that the Project Power Sales
. Agreements and' Supplemental Power. Sales Agreements be approved and executed by each of;its members. These agrdements between the Agency and any member naanicipality electing to participate establish the terms by which the municipalities purchase their bulk power requirements from the Agency. If proper anproval is obtained from the members, North Carolina Power Agency Number 3 will issue bonds to ootain the capital needed to acquire the undivided ownership interest'in the' generating plants. The results of the decisions of the members are not known at this time.
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Raleigh, North Carolina 27601 919/833 7301 Of ficers and Board of Consnissioners North Carolina Municipal Power Ag2ncy Number 3 Raleigh, North Carolina The audited financial statements of the. Agency and our report thereon are presented in the preceding section of this report. The information presented hereinafter is for purposes of additional analysis and is not required for a fair presentation of the financial position, results of operations, changes in financial position or changes in fund balance of the Agency. Such information has been subjected to the auditing procedures s
applied in cur examination of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
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<f Raleigh, North Carolin2 August 12, 1981
- O COMPARISON OF ACTUAL REVENUES AND EXPENSES WITH BUDGET NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 Year Ended June 30 1981 Budret Actual i
REVENUES Membership dues $578,600 S589,877 Investment revenue 6,000 9,111 TOTAL REVENUES 584,600 598,988
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EXPENSES Outside consultants:
Legal 120,000 246,695 Engineering 275,000 524,121 TOTAL OUTSIDE CONSULTANTS 395,000 770,816 Administrative:
Travel and expenses - Board of
- consnissioners 8,050 5,569
) Copies 403 Printing 403 Dues and subscriptions 242 196 Audit and accounting 700 5,808 Insurance 200 170 Miscellaneous - 322 7 Management services 169,280 208,419 TOTAL ADMINISTRATIVE 179,600 220,169 Contingency 10,000 TOTAL EXPENSES 584,600 990,985 EXCESS OF EXPENSES OVER REVENUES $ $391,997 4
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DETAILS OF MANAGEMENT SERVICES EXPENSES NORTH CAROLINA MUNICIPAL POWER AGENCY NUMBER 3 Year Ended June 30 1981 1980 Salaries $117,169 $53,648 Employee benefits 16,125 7,628 Travel and expenses 21,436 5,910 Recruitment and relocation 9,067 Staff development 3,052 264 Equipment and, furniture purchases 12,741 642 Rent 12,730 2,526 Telephone <
4,l:81 1,429 Copies 4,364 1,438 Office supplies 2,962 489 Dues and subscriptions 975 119 Postage 820 479
- Vehicle operation and maintenance 733 217 Equipment and maintenance contracts 614 71 Insurance 219 357 Contingency 4,695 Printing 83 Writer-consultant fee 53 Miscellaneous -
931 1,085 TOTAL MANAGEMENT SERVICES EXPENSES $208,419 $81,133 i
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