ML20054C204
| ML20054C204 | |
| Person / Time | |
|---|---|
| Site: | Clinton  |
| Issue date: | 04/14/1982 |
| From: | Kelley W ILLINOIS POWER CO. |
| To: | |
| Shared Package | |
| ML20054C197 | List: |
| References | |
| NUDOCS 8204200234 | |
| Download: ML20054C204 (16) | |
Text
..
ELECTRICITY r
F / Jud NATURAL GAS The Annual Report of ILLINOIS POWER COMPANY f
1981 l
l
[8P888PJ8881L PDR
(
The Company's Directors Illinois Power Company is di-rected by a board of 12 per-sons elected annually by the stockholders of the Company.
Nine members of the current Board are "outside" directors, who bring to the Company expertise from the fields of education, finance, f arming, manufacturing, marketing, personnel, and retailing. The outside directors, their princi-pal occupations, and the years they were elected to our Board are shown throughout this an-nual report.
IP lllinois Power Company t
ANNUAL REPORT 1981 n.
Contents j
Highlights of 1981 2
j Letter to Stockholders 3
Financial Performance Earnings. Revenues and Sales 4
Financings 4
Rates 5
Systems Operations Electric Service and Fuel Supply 6
Gas Service and Supply 7
Environmental Activities 7
Customer Services 8
Preparing for the Future Construction
.......9 Clinton Construction 10 Merger with Mt. Carmel Public Utility Co.
10 Research and Development 11 Management Responsibility for Information 11 Board of Directors and Officers 12 Management's Discussion and Analysis of Financial Condition and Results of Operations 16 Financial Statements 19 Two-Year Dividends and Stock Prices by Quarters 31 Selected Financial Data 31 Supplementary information to Disclose the Effects of Changing Prices 32 Operating Statistics 34 36 The Board and Officers l
l 1linois Pcwer Company is a public tiilit/ engrged primarily in the generaticn. transmission, distribution and sa!e of e'ectric energy and the d.stribut:on and sale of natural gas in the Stato of Innois.
1 r
t
~
Highlights of 1981 1980 1981 Increase 14,486 14,213 (1.9)
Electric sales-kilowatt. hours (millions) i
$567,356
$620,968 9.4 Electric revenues (thousands) 986 952 (3.4)
Gas sales-therms (millions)
S316,014
$343,324 8.6 Gas revenues (thousands) 5883,370
$964,292 9.2 Total operating revenues (thousands)
$113.562
$127,413 12.2 Net income (thousands) i 5 94,493
$107,516 13.8 Earnings available for common stock (thousands) 32,906 37,844 15.0 Average number of shares outstanding j
(thousands) l 52.87
$2.84 (1.0)
Earnings per share of common stock We Received i
1980 1981 1981 %
(Thousands of Douars) i
$567,356
$620,968 64.4 Sales of electricity 316.014 343,324 35.6 Sales of gas
$883,370
$964,292 100.0 j
i l
We Paid Out or Set Aside l
1980 1981 1981 %
j (Thousands of Dollars)
$ 73,382
$ 79,105 8.2 Payrolls and benefits to employees engaged in operations 218,998 257,427 26.7 Gas purchased for resale 6,527 18,970 2.0 Power purchased for resale (40,452)
(55,684)
(5.8)
Power interchanged-net 240,601 245,626 25.5 Fuel for electric plants 50,278 59,772 6.2 Materiais and other expenses 57,835 60,031 6.2 Recovery of cost of property due to wear and obsolescence 113.786 124,197 12.9 Taxes-federal, state and local l
23.071 21,419 2.2 Investment tax credit deferred-net l
U:e of funds invested in our business-i (51,220)
(61,411)
(6.4)
Allowance for fur.ds used during construction 77,002 87,427 9.1 Interest-including short-term loans l
19,419 19,897 2.1 Preferred stock dividends I
79,636 92,814 9.6 Common stock dividends i
14,507 14,702 1.5 Future use in our business
$883,370
$964,292 100.0 l
l l
i l
l To All Stockholders:
Because of the increase of nearly 20 per cent in investment and stock purchase plans brought us our electric rates on July 1, we were able to re-another $45.1 million. We were able to meet our verse an earlier decline in our earnings and end 1981 requirements for outside financing without the year in a good financial position with our the sale of long-term bonds.
double A bond rating still intact.
Through inventory reductions (about $25 mil-With the new rates in effect the las' half of lion), deferment and curtailment of construction the year, our 1981 per share earnings were $2.84 (about $20 million), and reductions in operations compared with the $2.87 of 1980.
and maintenance expense (about $5 million), we in December we declared our 138th consecu-will reduce the amount of outside financing needed tive dividend to stockholders and increased our in the next year or two.
annual dividend on common stock from $2.38 to We will, however, require an additional $285
, $2.48 per share.
million in outside financing in 1982 to help pay We are encouraged that the Illinois Com-for our $410 million construction program. The merce Commission allowed us a return on $375 sale of common stock through dividend reinvest-million of construction work in progress (CWIP) ment programs, stimulated by tax deferrais, is at our Clinton nuclear station. The Commission's expected to exceed 2.5 million shares. We will authority to include CWIP in rate base was chal-balance the remainder, as advantageously as pos-lenged in the courts after our 1979 rate order. The sible, between long-term debt, preferred stock, and circuit court's ruling in favor of the Commission common stock. An agreement arrived at in 1981 was recently upheld by the appellate court.
with European banks will offer us additional fiexi-In February of 1982 we filed for increases in bility.
our electric and gas rates. Based on past prac-Looking further ahead, we can see the end tice, we expect a decision in early 1983. We of heavy outside financing and rate increases when know that for many of our customers these are Clinton is completed and planned commercial op-bad times in which to ask for higher rates. Al-eration begins. Then, we believe, both our stock-though we anticipate opposition to our request, holders and our customers will benefit from the our testimony will show that we are left with no construction and financial policies that have better alternative in meeting our responsibility.
guided us for the last ten years.
Moderate summer weather in 1981 reduced These and other matters are reported in de-air conditioning usage and resulted in an electric tail on the following pages.
peak 1.6 per cent below that of the unusually hot l summer of 1980. We experienced an overall 1.9 per cent reduction in total electric kilowatt-hour Sincerely' sales and a 3.4 per cent reduction in the sale of i
natural gas to our customers during 1981. We anticipate improvement in the sale of both prod-ucts during 1982.
On May 13,1981 we realized $48.2 million from the sale of three million shares of common Wendell J. Kelley i stock. The sale of stock through our dividend re-Chairman and President l
i 3
FINANCIAL PERFORMANCE
(
l l
i EARNINGS, REVENUES, AND SALES Earnings per common share for 1981 were $2.84 compared to $2.87 per share earned in 1980. The major factois that contributed to preserving our financial position were the electric rate increase authorized in July,1981 by tha Illinois Commerce Commission' and increased interchange sales. However, earnings per share reflect a decrease in sales of both kilowatt-hours of electricity and therms of gas, higher operating costs, and higher capital costs for our construction program.
Operating revenues increased 9.2 per cent over'1980, to $964.3 million. In 1981 electric and gas revenues increased 9.4 per cent and 8.6 per cent, respectively. Electric revenues were $621 million and reflect the 1981 rate increase and the recovery of increased fuel costs. The increase in gas revenues to $343 3 million resulted
]
mainly from the recovery of higher natural gas costs.
Kilowatt-hour sales of electricity decreased 1.9 per cent,-
following a 1.8 per cent increase in 1980 over 1979. Moderate weather conditions, compared to an abnormtlly hot rummer the previous year, and conservation resulted in a 6.6 per cent decrease in sales to residential customers. Sales to industrial customers were
{o up 0.7 per cent and commercial sales were down 1.7 per cent, q
reflecting economic conditions that affected all of our
..i customer groups adversely. In addition, the strike by the United Mine 9
Workers of America further reduced sales to several coal-producing
((~Q customers. Net interchange sales of electric energy to other
]
i' utilities increased about $15.2 million over 1980. The interchange
{
[
F-y sales were possible as a result of adequate coal suppi:es and 4
+1 ag ~ ;
the availability of generating units.
(
{
N Gas therm sales decreased 3.4 per cent from 1980. Sales 'o
-P p
residential and commercial customers decreased 6.9 per cent and
(
3
/
1.6 per cent, respectively, also reflecting milder weather in 1981 y
and conservation ef forts. Industrial sales increased less than 1 X
per cent, due principally to increased supplies of gas made g
available during 1979 and 1980 but adversely affected by i
poor economic conditions.
pN
- ,% f",
FINANCINGS M.
The financing of our 1981 construction expenditures came from the QQy Sd sale of three million shares of common stock ($48.2 million), the sale of stock through various reinvestment and stock purchase plans Robert J. Burow
($45.1 million), and the sale of nuclear fuel to a 50 per cent-owned Consu/! ant and ref: red Pub 4 sher affiliate ($39.8 million). The remainder of our construction funds
,{'[],[r came from short-term borrowings and internally generated funds.
us On May 13, three million shares of common stock were offered Elected to the Board in 1972 to the public by a group of underwriters at a price of $16.875 per share Proceeds to the Company were $16.055 per share, or $48.2 million.
Tne Automatic Reinvestment and Stock Purchase Plan, the 4
Employees Stock Ownership Plan, and the Tax Reduction Stock Ownership Fian and Trust provided about $45.1 million from the sale of 2,579,837 shares of new common stock.These plans have provided $117.4 million of new capital since thei" inception. There d
.were about 13,400 security holders participating in the Automatic g
Reinvestment and Stock Purchase Plan for the November,1981 dividend. The number of security holders participating in the February, 1982 dividend increased by about 4,200, primarily due to changes in j
the federal income tax laws which have made the Ro'.nvestment Plan
../,
2 1
i even more attractive. The Plan provides for the purchase of shares
/
j.
i through the reinvestment of dividends and interest at 95 per cent of market price. Based on changes in federal income tax laws, 2
\\
individual stockhoMers who reinvest dividends in corrmen stock
+
g w-A*
from 1982 through 1985 may defer payment of income taxes on such dividends up to $750 a year ($1,500 on a joint return). The proceeds
^
from the sale of shmes received from dividend reinvetiment during this period will be taxed as a capital gain, providing the sbares have been held for more than one year.
-) *e, We sold our investment of $39.8 million in nuclear fuet in February,1981 to Illinois Power Fuel Company, an affrEste formed to finar rt of the fuel for Clinton power staiion Unit 1. We oy
- ent of the fuel company, from which we willlease mes, _ our nuclear fuel.
Grover J.Hansen We took measures in 1981 to prepare for the option o' issuing debt in the European financial market. On October 13 we formed a
, sa n so !ation s e eral S foreign financing subsidiary,IPF (Illinois Power Fira,ce) Company of Chicago Elected to the Board in 1981 N.V.,in the Netherlands Antilles to be the issuer of Euro-bcnds should that financing option Le selected. In Decembe",1981 we increased our lines of credit by establishing a $50 inillion three-year revolving cradit agreement with 13 major Foropean banks.
In the first quafter of 1982 we expect to replace our $140 million line of credit whD tour Chicago banks with a $180 million six-year credit facility with the a,e banks. The agreement will provide for a three-year revolving crec.t f acility with an annual renewal option and with a provision for conversior to a three-year term loan.
Tham actions, domestically and abroad, provide additional
^ ~ '
financir;p fleyibility during bacertain economic conditions.
We estimate con 9ructron requirements for 1982 of $410 million.
x We anticipate approximately $285 million of additional outside financing.
- 1 RATES The Illinois Commerce Commission granted us a 19.9 per cent increase in electric rates on July 1. This will result in additional revenues of $104 million a year,82 per cent of what we had requested. The order authorized an 11.47 per cent rate of return for electric operations. We did not ask for an increase in gas rates.
The order allowed $375 million of construction work in progress (CWIP) r> lated to the Clinton power station to be included in our electric rate base. This represents 32 per cent of our investment in the Clinton power station as of December 31,1981.
5
I The Commission noted that "even with this amount of construction work in progress included in rate base, Respondent's (Illinois Power's) rates, particularly its residential rates, will continue to be among the lowest available to ratepayers in this state" The authority of the Commission to allow the inclusion of i
CWIP in the rate base of our 1979 rate case was challenged I
unsuccessfully in the Circuit Court of Champaign County, Illinois.
The lower court's decision was upheld by the Appellate Court on
'y
, 3 i.
(- /
December 30,1981.
We filed a sequest in February,1982 for an increase in our
{
electric and natural gas rates. If approved, the proposed increase of l
19.9 per cent in electric rates would provide additional annual revenues of $141 million. The proposed increase of 9.7 per cent in gas vwould provide additional annual revenues of $50 million.
Using a new Commission policy which permits the iiling of forecasted test years, we based our request on a 1983 test year. We requested 4
an 18 per cent rate of return on common stock equity, and that a tott of $875 million of CWIP be included in the electric rate base.
This filing requests some changes in both electric and gas rate design. Revisions to present electric rates include the expansion of out residential demand metered time-of-day rate to additional customers and the addition of a time-of-day rate for our larger general service customers. Proposed gas rate design revisions include l
Donald E. Lasater restructuring of commercial / industrial rates.
CM rrmn d the bord and The Commission is allowed 11 months to issue a decision.
Ch cf f w rat,,e O N or Accordingly, we expe-t an order in January,1983.
On January 20,1932 we filed with the Commission a new fuel t.f r
Dnd to tv Bocud n 1981 adjustment clause for electric service to become effective March 1, 1982. The new clause conforms to the uniform fuel adjustment clause recently approved by the Commission to be used by all electric utilitie q in Illinois. This fuel adjustment clause prevides for the recovery of purchased power costs and nuclear fuel costs not allowed in the I
existing fuel adjustment clause.
i l
SYSTEMS OPERATIONS ELECTRIC SERVICE AND FUEL SUPPLY The annual firm peak demand on our system was 1.6 per cent lower than in 1980, due mainly to reduced use of air conditioning. The firm demand was 3.099,666 kilowatts, on July 13.
The 1980-81 winter peak on our system was 2,472,000 kilowatts, 5.2 per cent higher than the record peak established the previous year. Electric heat is becoming a more important factor in winter i
I use of electricity. It was installed in about 70 per cent of commercial expansion in 1981 and in more than 65 per cent of new housing.
Our generating system's efficiency ranked 13th among the 100 leading investor-owned electric utilities. according to an Electric Light and Power report. Also, the availability of our generating system is above the industry average, tabulations of the National Electric Reliability Council show. The operation and maintenance costs of our generating plants are the lowest of allIllinois; investor-owned electric utilities. We are currently making further 6
improvements in our management system to maintain this standard.
Coal accounted for 98.7 per cent of the fuel we used to generate electricity. Oil, gas, and hydro accounted for the remainder.
We used 7.3 million tons of coalin five power plants. About 5.5 million tons, or 75.7 per cent, came from Illinois mines. During the United Mine Workers of America strike from late March to early June, we had enough coal to avoid curtailment of electric service to customers. We have long-term contracts which, with extension options, will provide about 151 million tons of coal. Based on 1981 usage, this is enough to last more than 20 years.
At our Clinton power station we will use uranium purchased from the Kerr-McGee Nuclear Corp. and enriched by the Department of Energy. General Electric Company is under contract to provide the initial core load and to complete preparation of uranium for use as reactor fuel for the next 15 years. Changes made in 1980 in the fuelload schedule for Clinton will result in deferred delivery dates for some of the uranium. We are making progress in extending future deliveries to match more closely the anticipated requirements.
GAS SERVICE AND SUPPLY Sales of natural gas in a 24-hour period reached a record high level of 759,049,000 cubic feet on February 11,1981. This is slightly higher than the peak gas sendout during the severe winter of 1976-77. The 1981 record was surpassed on January 10,1982 when a severe Arctic storm covered our territory and 857,324,000
/
cubic feet of natural gas was delivered to our customers.
8 The outlook for future gas supplies is encouraging. Our gas pipeline suppliers are able to fulfill all of our needs. For the first g
time since 1970, we were able in April to provide gas service to all applicants on the waiting list and to make gas available upon request. " Firm" gas was offered to all interruptible customers, y
)
and most accepted.
Our marketing efforts included meetings with our industrial customers to discuss long-range availability of gas, the status of the Natural Gas Policy Act, future pricing policies, and proposals to decontrol prices. We also are stressing the availability of b
natural gas to residential and commercial customers naw using propane and oil for space heating.
ENVIRONMENTAL ACTIVITIES d
we neve aii necessary operating permits and equipment ie meet air, water, and solid waste regulations. We appealed unreasonable y
s and unnecessary provisions of three water quality permits; progress n the appeals has been in our favor. The Illinois Pollution Control Sn rVc rs ent Board agreed that operation of one generating unit at Clinton Genera / Personnel Manager power station will not cause harmful lake temperatures; therefore, Marsha'l F> eld & Co.
Ch/caga lanozs installation of supplemental water cooling equipment is unnecessary.
Elected to the Board in 1930 The U.S. Environmental Protection Agency is considering a rule change that will allow Baldwin power station to continue to burn Illinois coal as at present We continued participation in the Allis-Chalmers Kilngas process in our search for environmentally sound ways to use high-sulfur Illinois coal. We made the second payment of a five-year, $5.5 million commitment as our share of construction and demonstration 7
i costs of the Kilngas pro;ess to convert high-sulfur coal into low-Btu gas for generating electricity. The $135 million demonstration plant, under construction at our Wood River power station, is also being funded by Allis-Chalmers, the State of Illinois, Gilbert Associates, an6 11 other utilities. Construction is on schedule to be finished in late 1982. when testing will begin.
Congress is considering several bills on " acid rain" which call for reductions in sulfur emissions at coal-fired power plants in the Midwest. On behalf of the electric utility industry, we presented testimony to Congress that costly power plant emissions schemes to control " acid rain" are totally unjustified until scientific and policy questions about the phenomenon are resolved.
w CUSTOMER SERVICES A
We conducted programs to keep and ateact new jobs in our territory and to help our residential, commercial and industrial Q
f customers use energy more efficiently.
A
.:w d We provided industrial development traini.ig to business, k
hy
.56 government, and community leaders of three more cities during the
'}
year. This program, the only one of its kind in Illinois, helps local f
b LA W[ h 5
people promote the advantages of their communities to industry.
f('
' fj in five years, more than 70 per cent of the industrial growth and t.
ix : * '
' C.M L expansion in our service area has occurred in the 26 communities k
j 3 ' hh7 D Y that have used the program.
F4 I.?
D While economic conditions were adverse in 1981, nine companieg
{[S
./,-
[+. -
built new manufacturing facilities and 27 companies expanded at L*1 existing locations in our area. This growth added 1.9 million p;
3' h**. ;.
M square feet of building space and created 980 jobs.
pw
'%e To help keep businesses in our territory, we provided information k n.s ~gh about community assets to 1,000 manufacturers and small companies
[.
>J:
{
A, in a 13-county area of Southwestern Illinois.
y ([
k[
We expanded our energy conservation programs for residential, l
- 1ApL, 4,.
commercial and industrial customers. We have now conducted about l j
V
.. f 4
80,000 residential and more than 3,000 business energy audits to show our customers how to keep bills down through conservation.
KIith R. Potter We also conducted our fifth annual conference on energy Retired %co Chairman efficiency for commercial and industrial customers; sponsored an laternasona/ Harvester Company energy management seminar for hospital personnel; conducted energy audits of hospitals; and sponsored agri-energy seminars E ec d th ard in 1973 m 18 communities for farm customers.
We cooperated with governmentigencies that provide residential customers with financial assistance to meet rising utility bills, and we worked within Illinois Commerce Commission rules to avoid hardship disconnections during winter months.
We continue to be proud of the efficient performance of our 4,000 employees who provide the services to our customers.
Our reasonable prices are possible because of this efficiency.
During 1981, the Company and its 13 local unions negotiated three-year contracts covering wages and working conditions for 2,850 employees.
8
PREPARING FOR THE FUTURE CONSTRUCTION We spent $349.5 million in 1981 for construction activities, including
$273.6 million for Clinton power station Unit 1, $56.9 million for other electric facilities, and $19 million for gas facilities.
Construction of new electric facilities include about 25 miles of 138,000-volt and eight miles of 34,500-volt lines. We completed rebuilding of 14 miles of 138,000-volt, 33 miles of 69,000-volt, and 13 miles of 34,500-volt lines.
We extended gas distribution mains by 42.6 miles and replaced another 91 miles.
At Baldwin power station we began work on a new fly ash storage bin scheduled for completion in early 1982. It will enat,!e us to collect and sell fly ash from Baldwin Unit 3.
We completed a new office and operations building in the Trenton district and expanded the service unit building in a
. 3 Bloomington to include our customer service activities.
y O'
Construction is underway on our new central electric and i
gas dispatch center in Decatur. The first remote terminals for the Supervisory Control and Data Acquisition (SCADA) System
^
have been installed. They eventually will be located in all major y
electric and gas substations.The building, which will house the master station equipment,is expected to be completed by
~
c 9
the end of 1982. When placed in service during 1983, the new system will represent the most modern control technology available.
N lt will enable us to respond immediately to major system outages, to dispatch electric generation more economically, to coordinate 3
i company-to-company power interchange more effectively, and to
)._
,f-utilize our gas supply in the most effective manner.
Our estimated 1982 construction costs are about $410 million 4
g - ;
of which $300 million are for the Clinton power station Unit 1, b
$55 million for other electric projects, and $20 million for gas projects.The construction budget also includes about $35 million 2
for investment in nuclear fuel. Construction started in 1982 on 35 miles of 345,000-volt line to provide another interconnection with Central Illinois Public Service Company and to reinforce Boyd F. Schenk transmission to our Champaign and Danville service areas.
President and Chief Executwe O!Iscer Five-year construction costs from 1982 through 1986, Pet Incorporated including about $355 million for completion of the Clinton power St. Louis, M ssouri station Unit 1, are expected to be $825 million. This five-year estimate Elected to the Board in 1977 includes no expenditures for future generating facilities af ter Clinton power station Unit 1. Our current load projections indicate that it will not be necessary to make a decision for several years regarding the type and timing of additional generating capacity. The estimate does not include expenditures that might be necessary due to future regulatory requirements.
9
CLINTON CONSTRUCTION On December 1 we increased the cost estimate for the Clinton power station Unit 1 by 5 per cent to $1.8 billion. Our share of the new estimate is $1.5 billion for 80 per cent ownership of the plant. Soyland Power Cooperative, Inc. and Western Illinois Power Cooperative, Inc., between them, own 20 per cent of the plant.
The new cost estimate is an increase of $86.2 million over the estimate made in December,1980. The main factors causing the increase are the impact of existing regulations and new interpretations of regulations; additional equipment and testing of equipment, including that required as a result of the Three Mile c
7q.
Island accident; and an increased commitment to quality assurance i-f
~t-and safe operation of the plant.
).
The Clinton cost estimate is $1,915 per kilowatt. This is Ik,
ft (
considerably lower than the average of the six other single-unit
~. 4, t
boiling water reactors under construction in this country; their i
b, f
[- * [
average estimated cost per kilowatt is $2,567. The Clinton project has experienced the least percentage increase in cost estimate bj.
and least delay in completion schedule among the seven, d
, # ~ T" At the end of 1981, our accumulated expenditures for Clinton were $1.133 billion, and construction of the plant was 83 per cent W-
,f d
complete. Although construction was 115 days behind schedule eL 5
at the end of 1981, we are working to catch up and have not f
- hb revised the schedule for completion of the plant. Fuelload is
)
scheduled for January,1983, and commercial operation in 97',
August,1983.
6 Structural work and the construction of large bore piping is essentially complete. Significant milestones achieved during the year include completion of construction work and testing of
~
the main switchgear within the plant and the plant service water system; completion of containment dome concrete construction l
and condenser construction; assembly of the turbine generator; l
Q and installation of the power generation control panels.
70 per cent of the staff to operate the plant Richard P. Stone has been h. ired; their training is on schedule.
Grain and seed farm operator l
Spongfield. I!hnois During 1981, about 653,000 people visited the recreational l
Elected to the Board in 1978 facilities being developed around the 5,000-acre lake. The recreation facilities are managed and maintained by the Illinois Department of Conservation.
MERGER WITH MT. CARMEL PUBLIC UTILITY CO.
We signed a merger agreement on November 20 with Mt. Carmel Public Utility Co. which serves approximately 5,500 electric customers and 3,500 gas customers in Southeastern Illinois.
We would issue approximately 190.000 shares of our common stock, through a wholly-owned subsidiary, I. P. Inc., to accomplish the merger.
Regulatory approval of this transaction is needed, and we have filed applications with the Illinois Commerce Commission and th@
Federal Energy Regulatory Commission. A registration statement has been filed with the Securities and Exchange Commission.
10
RESEARCH AND DEVELOPMENT in 1981 we budgeted $3.9 million on research to meet future needs of our customers. This included studies of our needs for new electric and gas facilities and research for technologies of the future, and the Kilngas project activity described in Environmental Activities.
Our search for technologies included both our own independent study and support of industry-wide efforts. Major expenditures in 1981 included $2.0 million for Electric Power Research Institute (EPRI) projects and $1.1 million for the Kilngas project.
Working with area utilities, EPRI and the Department of Energy, we completed in 1981 a three-year study of underground compressed energy storage technology.
MANAGEMENT RESPONSIBILITY FOR INFORMATION The financial statements and all information in this annual report are the responsibility of management.The financial statements have been prepared in conformity with generally accepted accounting principles consistently applied. In the opinion of management, the financial statements fairly reflect the Company's financial position, 3
g results of operations, and sources of funds provided for gross e
property additions.
t[%' ~' '
We maintain accounting and internal control systems which we believe are adequate to provide reasonable assurance that assets
?
are safeguarded against loss from unauthorized use or disposition; HMI and we believe that the financial records are reliable for preparing d
k financial statements.
~[,
i i
The financial statements have been audited by our independent t u I
accountants, Price Waterhouse,in accordance with generally "M*
accepted auditing standards. Such standards include the study and
[.I evaluation of internal control to establish a basis for developing N
the scope of the examination of the financial statements. In addition F
to ine use of independent accountants, we maintain a professional i
staff of internal auditors who conduct financial, procedural, and special
<5
- [h audits. The system of internal controls consists of several important elements, including selection and training of qualified personnel, n
,_4 continuing maintenance and use of accounting and administrative policies and procedures, and the internal auditing programs.
Gordon R. Worley The Audit Committee of the Board of Directors, consisting Decutwe Wce President-Finance Montgomery Ward & Co.. Incorporated solely of non-management directors, meets periodically with Chicago, lihnois management, the internal auditors, and the independent accountants Elected to the Boarc in 1979 to discuss accounting, auditing and financial reporting matters.To assure their independence, both Price Waterhouse and the internal auditors have direct access to the Audit Committee.
11
=
BOARD OF DIRECTORS AND OFFICERC At our annual meeting on April 16,1981, the stockholders elected two new directors of the Company and re-elected ten. The new directors are Mr. Grover J. Hansen, president and chief operating officer of First Federal Savings and Loan Association of Chicago, Illinois, and Mr. Donald E. Lasater, chairman of the board and chief executive officer of Mercantile Bancorporation Inc., St. Louis, Missouri. They succeeded retiring board members Mr. George E. Hatmaker and Mr. John H. Leslie, directors since 1971 and 1965, respectively.
David F. Meek, Secretary-Treasurer of the Company, retired on June 1 after almost 44 years with the Compaay. His responsibilitiet were divided between Vice Presidents Arthur E. Gray, who was elected Vice President and Secretary, and Larry D. Haab, who was elected Vice President and Treasurer.
Members of the Board serve on committees established to 7
address various issues of management. Recommendations of the
' #1 j
committees are presented to the full Board for discussion and final
- N j
determination. Current Committees and their memberships are:
-i ggf?g_
3: 2d FINANCE COMMITTEE-This committee meets to review the W DW Company's financial forecast, financing plans, and pension fund NOC Zl investments and makes recommendations to the Board concerning
+*
such matters. Members of the committee are: Gordon R. Worley, Q _p
_3 chairman, William C. Gerstner, Grover J. Hansen, Wendell J. Kelley, Keith R. Potter, Boyd F. Schenk, Richard P. Stone, Charles W. Wells and Vernon K. Zimmerman.
s y
.m y ; _. g,
- -:J.u... g.
~
,-ll AUDIT COMMITTEE-This committee, which consists entirely of
,'d y
c Q ;.f*gih;gj.
. - C yr non-management directors, recommends the appointment of the O
4, Ql Company's independent accountants, confers with the independent accountants, and reviews the scope of the audit, the results of auditors' Vernon K. Zimmerman examinations, and the activities of the Company's internal auditors.
Dean. College of Commerce and The members are: Vernon K. Zimmerman, chairman, Robert J.
Business Administration Burow, Grover J. Hansen, Donald E. Lasater, Eva Jane Milligan University of Illinors and Richard P. Stone.
Urbana. Illinois Elected to the Board in 1973 COMPENSATION AND ORGANIZATION COMMITTEE-This committee b
reviews and recommends compensation of elected Company officers, reviews benefit plans and recommer ds nominees to fill vacancies on the Board of Directors. The members are: Keith R. Potter, chairman, Robert J. Burow, Wendell J. Kelley, Donald E. Lasater, Eva Jane Milligan, Boyd F. Schenk and Gordon R. Worley.
M 12
Electric Peak Loads Gas Peak Loads flN THOUSANDS OF KW)
(IN THOUSANDS OF THERMS) 3200 9600 3000 9000 2800 8400 2600 7800 2400 7200 2200 6600 2000
- 6000 1800 5400 1600 4800 1400 4200 1200
- 3600
- 1000 3000
- 800 2400 600 1800 400 1200 200 600 0
0 72 73 74 75 76 77 78 79 80 81 72 73 74 75 78 77 78 79 80 81 Electric Revenues Gas Revenues (MILUONS OF DOL LARG)
(MILLIONS OF DOLLARS) 620 620 b
600 000 V--1
= 580 580 7
560 560
- 540 540 1
- 520 520 h.
usi. - 480 480 460 460
',I s -
S m,
t N ki & $$
~.; $, W Sj 400 400 E,$ N 3 M 380 380 V US d Ui ?N1 360 36 y-sy y y(
n 340 340 ri L
M M d 320
. 320 Iv: N M L
280 280 MD R 3 l #
- (<S M 7) m
- k. M Of W
?; El O X M 240 240 V
?..
-A lk: G
.j tL
,: c, ?V
- 4 6, ~' Li r-
=
200 2c0
_ __ b 5 3o I.
L h
3 k- 'r5 8 kl e
p, ;n v ( p a y c -- ;; k3 p-s y, ;; g yj 160 160 f/ l' ? 8
'f N 9 d
'8 72 ()
U Ej b '[ LY E El "0
'd" g:
- y 4 g yj g
g,
, y g y
~
< > m I.,=_
'20
. - - w w:-
'20 p.
ur 1 e g
z:
e n
e,
x 60 80 p -.
.p
- g g
ra rf
' '3 60 00 l-
$ g
- -g
-p.;
- "T s gQ
. - 40
~
40 I'
~1
~l I
i 01
[
7-t-4 1
b g
72 73 74 75 76 77 78 79 80 81 72 73 74 75 76 77 78 79 80 81 13
6ZECM/0/Tf-AFFORDABLE THEN AND NOW CONSUMER ine househols eterns that cost ss.oo
" ~
52s2 <
'a mo ao* cost ss2z rne nunois COMMUNICATIONS Power average kilowatt hour of elec-noo.. _.
tricity cost our residential custorners 4.07 cents in 1940. It still costs less s n oo.
a than a nickel.
Through newspaper advertising and iooo.
direct mail, we sent messages to SOclAL SECURITY our customers on the cost of PAYMENTS TO electricity, the benefits of soo.
INDIVIDUALS
- 7497, conservation, help with high bills, roo.
f.
.............. U N E M PLOY M E NT and other subjects.
t/'
PAYMENTS TO
+f INDIVIDUALS ooo-
+
30, _
f./ _.
Reprints on this page include CON a chart from a booklet on our
/ g*i 0E L
ODS) 1980-81 rate case, a newspaper ad,
l_.
/
2 and a page distributed to Soo -
t
,/ '
~
ANNUAL REAL government and civic leaders.
.,*** ~ I PER CAPITA 2 0 o,
isi,g INCOME (ILL )
The ads on the adjoining page ioo.o..*,,.
a 5
t AVERAGE ANNUAL are typ.ical of subj.ects covered in
. i:j~
COST OF IP our 1981 newspaper advertising.
_ S o. _..
. 2 ___ j RESIDENTIAL KILOWATT HOUR 1940 '45
- 5 o
'55
'6 a
'65 '7o '75
'79 c=m= r==mr====i
~w-.;==:r v======w ~ ~
4hq q
Electricity isstill a bargain 50ieJ' @
yous M bd vrucmc aar-n erc, y.,
9 us tn. mo o
"O#' a ELECT O
f,o" '.*,,
,s.c j,,,n _ isa w a rs A m,OA An m,, f, c' CN! s'I j y@ j
',yn, RI,CRAIES "
p}l wtn s2.
is~ r u,, w s w n.~.
e c, y p
oc,,, c,
$$,,',,,,,*n
,,n.< 3
_ s2,2 m,
ss. w~ n e.s ngy-
- y VU
(,_Q,,,,y, 4, g
[
j/f>'4ds.. im ib. rr r
a 3
m
~
so,,, s -,v.
. n <
-m usro q
g qj x
macwm n+r m oms ~
- f. %,,,. j-t 9
3.g mwt a is trat omy yy a-<,
Asuonur e n e r 1
(, I.
t".
' 3y
/
-* M AS40 m L y) l1
, {7 cm e,,,
l 3_
y7.
7
,, Q, -wg/p >p -
e,,,n_...
w/-M tj (g
,} i Q
'- ~ M ;
,; p.
- p
{j
],n _ a,52,;.ais A4
[ cnoctwts
,4%nncvucut - 3
-,n - a
[n) ' _cau<.,Mcu, tad 1
/,C-u>1 6
( " -
s/-
-fn as uni trcisc uv A i e reucur3 H
r
.sw~t m
c- ~, s c
ABOu r inar... !
Pi ism - s *0 Gai
'-[ --
y
. p34, a cAh f
esTHf v DlD IN O%, - = /
Tt (asi _.5 2s cai-
\\
1-h _two 3,,n _ s ssa gy -.
y
,o s_w V%
, =,
,p w
Id-I, I, e.
~
MWy4. 4
)'7
<f p
, ' e,yy,, F
'f'qr '% X t
_~..
ww.
m
~ r moo.
n r
c<
.s j%
+..s=4-tr wie ce Eleetn Ii e
n 1,1 i.
't it i'
4 Do.vou know sonicone 1
np d.
}j
./
j g
who niay have trouble giaying p..
t i
utility hills this winter?
m r$.
s
- /a: '
.)
e.g 1
TO t.
- a. :,
,4 4
N
.P W,wd' m
- - i
.y.4fn A
-q, q
hy g
ff g
h Yy, 'tN y
2'
.+
_._ M*Mg ' $WG3--Q 7
n.
L-G A,,
~
[
,j, V
.,,s.
i,.y., u...
? a.,M.,
c, p;o.v.;.
y,. a w
]
. pa *
- ~,;,.,. 4 _
.s.g n..~
Eyesup!
n a.~ e-
, A W.... c 9
m.
when.you work near b
Ilhno s Power wants to hel 4
i i
l lower lInes ot t )<
,",,,,',D'H"',,,,,,,,,, ',,,, ', ',,,'"*'.*..',".,"
d
,e lu. s
.o n a t.a.a e h,,, u. o,
n, ns t. n,iv.,v
,,..,,. I g r g
6., w.., pt-n n w.
...k., o,.... o o.45,i a..s e,.4 ng-it
...m......
,,..........,,...,,.m.,,,
y o.... m,..,
n
,,.....a.-
.a,
..,,, n. n e.,,,,,,,, n
- p..,., i,.. i t s....... o..o,
L
,-.,,..a,ns...,,
%. a r..
~
{8i a-+=o.. +d* cm-
~ e d,----. id-- **
6 a"-
a
'a -. i ad-~
...a o,....., n...,,.. aa i...., p,. -a a, s.o.a
'd""1""*"'*'*""'"'"""'
i*"*"'d"?'*"*""*""'
)?
,. " _ ' *.. _ = " " " - *.., ' "... ' ". _ "...,,-..,,.i-".*."'.'._...
'***'"a".'.".'."._'".*_"."."..
- a.., h h a. *..,.n..h I pl.u. $.. ar l n, n. %u,
}i
,.., n., t,a pu..,.- n.... u.,.a,...o...
4,,,,,,,.i ei,.
,,,,,n.,
.....a......,,,...,a.4 y
e.
- o. aa..., so, is a,
4.,..e,, n.. o,.... p.,.4 in...
n.
__,_ __ _ __ __n_
.ni.'-
___,,__.4Wssu,-M,o_.,. y 4
64 w A'o,,, y g q m, M 6 3. Mag,i s %.4,6Q.XA,bh 4 p 4gy. 4AM ed Q
$,hg '
6
-w',
-i-d.,"a.%.J a.b ewer'4,',_ lIr Ng'g '-
y?_ *p shei-pg -.
w#s yk4 P
o" p.1L.g d a hr ).4 A-gr mm
[i
%sv s,u,a 0
Why is our Te u rnavvs j ii i
n: =.w =v>
4 utility hill hi <her b
ru.n c
p,s vs cot rullTY L,
cw;,w p
than yours9
,d
!?p K _. -.
i 1
- t (gfs2m,,q.,
g3 4
t I
S
/
/
A a
i m.
w, s:.x
- j m he_
_,sc.. _
- - g blLa It.& 8 9..)
27 7 h., p ". Q W luN.M f% h J;i a n.m gm h>}
3 p
T an y s.u. vaiv'vel., ; gm,,1.w: 3
' ^
w fi;.,b-y
'M, Mt '/
J~M C * %.
i e FL mw ma ear, nw,
{).8
.7
- t he
=
2 r.hlj[,
mer m,~ns
% a r' v% w -'
ui ri.aWwisV 8 = cl
'*js, i
i
- n emuny e m u a.m..irr w.w *n, t. ;./. A,. u f.
a a,
1
.na.
ni m 4
t---
- 4.,,,,,,, c. m.
,1,y,m. t.,u. n, n..,,,m _.
4-<,4 c>
e y
AM,-
- e 4,L 33./m w %t.w.[$s,,+%w,.v.~j.-.
Wh.v sonne hills Wa.rs to pc N
,s a
~
....+r.
-,in....
are ugher than we well with others less energy
.........., -... ~. '..
4m',.
l 9
fkod,da 88 aes.
ei he e
'e f "
1'.r
- i.le-a 1eu.ed***
e"**e
',i,m
=
e 1
aw n.n
.,e.
.-.c.g e,ita...g er o.
cs op o.es.,e
,e g-I n,f e ar.f go r y
.a.*
- f *** es - a.P8"W,er'.T egir e De re, -- it Iw
.6+.,.,, esp.e e vilei 4,
d
,f.e*
n..
- e. ape s.py
.'er sp ev '$
8 v.*.*'4-e t
yn ie. g
,e,es,
.i....,, ww s,,e.'..)
g g
4 qi 4
a a
a a
4-
+e-or,r is 7
t' ues u.=a*
es #
,.8 54.
w,F A g mirl II.4 t id l'A e
%.' a M
f ar. el g.
f.
4.b g.
).P-O'
48'
d-d'r8.&e. H e
as H'.4' SPO.W N
-,S--
l4ny P9 a=
.r 8
pe t a.,
.L 4 6,..
h erf e.-
g r e e.s a 4.3
. ef A.
i,.g...
,,4,
.g
.f..g.,4 g,
, og IF %%.'f b.l.b 4
- ' 4' g d 9y 4
.u. 4$. e g4*
d %A I ge abeg0 d.
s
~
l l
l Management's Discussion and Analysis of Financial Condition and Results of Operations Reference is made to the Financial Statements and The purpose of this new subsidiary is to provide the Electric and Gas Operating Statistics for information option for the issuance of Euro-bonds.
concoming financial condition and results of operations.
At December 31,1981. based upcn the most restric-The factors having significant impact upon financial tive earnings test contained in the Company's Mort-condition, changes in financial condition and results of gage and Deed of Trust, approximately $171 million of operations since January 1,1979 are as follows:
additional first morgtage bonds could be issued at an assumed interest rate of 14%.
Liquidity and Capital Resources Obtaining the future capital necessary for our on-I During the three-year period,1979 through 1981 going construction program will require the Company capital requirements for construction were $291.6 to achieve and maintain the financial standards neces-million. $315.6 million and $349.5 million, respectively.
sary for flexib?e access to financial markets. Our in addition bond refunding required $25.0 million during bonds and preferred stock are currently rated double the period.
A and our common stock is rated single A-To pre-serve these financial ratings, which will result in lower The major item of construct. ion is the Clinton nuclear f nancing costs and thereby benefit both customers power station which accounted for approximately 72%
and shareholders, we filed a request for an increase in of the total construction expenditures in this three-electric and oas rates with the Illinois Commerce Com-year period. Our 80% ownersh.p mterest in the Clinton mission in February,1982. If granted, the increase nuclear power station Unit 1 is estimated to cost $1.5 would provide additional annual electric and gas billion and will require additional capital expenditures revenue of about $141 million and $50 million, re-of about $355 millien prior to scheduled completion in spectively, commencing in January,1983.
1983. These expenditures are about 43% of the $825 million projected capital requirements for the five-year As a part of this rate filing, we have requested the period 1982-1986.
inclusion of an additional S500 million of CWIP in electric rate base. While we capitalize an allowance Cash flow ' rom operations has provided suff..icient for funds used during construction (AFUDC), this non-h,quidity to meet ongoing operating requirements and cash credit to income does not generate immediate to provide additional funds for the construction pro-cash to pay the related financing costs. The inclusion gram. Sources of capital during the three-year period of additional CW1P in our rate base will provide addi-have been composed of approximately: 32% through tional cash to help pay the financing costs, and will the issuance of long-term debt, 41% through the sale result in lower non-cash credits to income through of common and preferred stock, and 27% provided AFUDC.
from operations. Commencing with the commercial operation of Clinton Unit 1. we anticipate a reduction This additional rate relief is important to maintain in the need for external capital.
Our financial strength. Without the above rate increase, it is foreseeable that we will be unable to maintain the During this three-year period, we used short-term interest coverage ratios required by the Mortgage and borrowings to meet interim cash requirements. These Deed of Trust for the issuance of additional first mort-short-term obligations were partially repaid from long-gage bonjs. An interest coverage deficiency could term financings. At December 31,1981 there was $70.5 necessitate the use of alternative and potentially-higher million of outstanding short-term borrowings.
cost financing methods in order to provide the projected Lines of credit with commercial banks are maintained capital requirements associated with both an ongoing construction program and other working capital needs.
to meet interim cash requirements. At December 31, 1981 we had a total line of credit of $347.5 million which we expect to increase in the first quarter of 1982 Results of Operations to $393 million. Included in our line of credit is $125 Electric Operations-Electric revenues increased million which is intended to support our commitment 37.3% from the beginning of 1979 through 1981 pri-to IP Fuel Company.
res@ h e imases N mg d in addition to the above lines of credit, we estab-increased fuel costs and the net impact of changes lished a foreign financing subsidiary, IPF (Illinois in i<ilowatt-hour sales. The components of the annual Power Finance) Company N. V. in October, 1981.
revenue increases were approximately as follows:
16
[
ILLINOIS POWER COMPANY / ANNUAL nEPORT 1M1 Twelve Months Ended a $12.4 million increase in power purchased for resale December 31, as a result of the availabihty of additional power from 1981 1980 1979 Electric Energy, Inc.
Revenue increase (Thousands of dc! tars).
gg ji 8J04 526 eg Sales of interchange power fluctuate as a direct re-components of revenue sult of market demand based upon the needs of other increase (%)-
utilities and the availability of our generating capacity nate increases 88 %
53 %
12 %
to serve those needs The credit for power interchanged Recovery of increased net increased about $11.4 mi!! ion in 1979, decreased fuel costs 19 27 43 about S18 0 million in 1980 and increased about $15.2 rQowatt. hour sa'es (7) 20 45 million in 1981. Overall, during this period there existed 100 %.
100 %
100 3 a favorable rnarket for these " opportunity sales" of Revenue growth from rate changes reflects general interchange power and our generating capacity was v ilabic when needed retail rate increases of 10 9% effective November,1979 and 19 9% effective July,1981, as granted by the ICC.
Gas Operations-Gas revenues increased in each of Kilowatt-hour sales, which increased 4.8% in 1979 the years 1979.1980 and 1981, principally reflecting recovery of the increased cost of natura! gas through and 1.8% in 1980, declined 1.9% in 1981. This trend the purchased gas adjustment clause. Other factors towards declining annual sales, or nominal growth, affecting gas revenues were the 7.9% rate increase reflects the impact of the current economy and cus-granted by the ICC in November,1979 and changes in tomer conservation efforts combined, and changes in mm s les. The components of the annual revenue seasonal weather conditions such as we experienced cases were approximately as follows:
with a mild 1981 Summer as contrasted to the ab-normally hot summer of 1980. The most significant Twelve Months Ended December 31, portion of the 1981 sales decline occurred in the res.
dential customer category which had a 6.6% decrease.
1981 1980 1979 We have experienced increases in fuel for electric "Q"{]'[,' do!!an).
s27 310 $43 244 552 961 plants of about $18.5 million in 1979, $15.0 million in
=
components of revenun 1980, and 55.0 million in 1981. Changes in fuel costs increase (%)-
are affected by kilowatt-hour generation, fuel price in-Recovery of increased creases and the availability of all generating units.
gas costs 129 %
100 %
82 %
Kilowatt-hour generation, which increased 6 9% in nate increases 36 1
1979, declined in both 1980 and 1981 by 3.1% and Therm sa'es
_29)_
(
,36)_
(
17 3 8% respectively. Coal, which is our primary fuel, 100 %
100 %
100 %
constituted about 95.9% 97.3% and 98.7% of our fuel used for generation in 1979,1980 and 1981, respec-During this three-year period, improvements in avail-tively. The weighted average cost per ton of coal burned abihty of gas from our pipeline suppliers, conservation efforts of our customers and the election of limited firm increased about 5 9% 13 4% and 6 7% in 1979.1980 and 1981, respectively.
customers to change to interruptible service have en-abled significant volumes of gas to be available to meet in 1979, the fuel cost increase was partially offset by all customer requests for additional gas service. We the greater use of lower cost generating units. Further, continue to believe that, for the next few years, growth the commercial operation of Havana power station in therm sales will be affected by market demand Unit 6, beginning in June,1978, increased our coal-rather than gas supply.
fired generating capacity which is lower in cost as The increase in gas supply, changes in economic compared to either gas or oil. Fuel costs for 1981 and weam consons and comme conma%n reflect the impact of the United Mine Workers of eHo were the major factors affecting therm sales America strike (March 27 through June 7) during which during this period, which increased 1.6% in 1979, but period it was necessary to utilize our higher cost gen-decreased 6 3% and 3.4% in 1980 and 1981, respec-crating units as a result of the unavailability of coal deliveries to the Baldwin power station, our most of tively.
ficient generating station. In addition, the 1981 increase The cost of gas purchased for resale increased in fuel costs and related decrease in generation reflects
$45 8 million 527.7 million and $38 4 million in 1979-17
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 1981, respectively. The annual cost increases were The Company's effective combined federal and state primarily attributable to higher prices paid for gas. The income tax rate has been 35.1 %, 36 2% and 34.4%
average cost per therm increased 29.6%, 20.2% and for the years 1979,1980 and 1981, respectively. For 22.8% for 1979,1980 and 1981, respectively.
a detailed analysis of income tax components, see Note 5 of the " Notes to Financial Statements" Other Expenses and Taxes-Since 1978 the Com-pany has experienced increases in other operating ex-Other locome-Total allowance for funds used during penses, maintenance and general taxes as follows:
construction (AFUDC) increased approximately $9.8 1981 1980 1979 million, $12.5 million and $10 2 miliion during 1979 through 1981. Increases in AFUDC relate to the AFUDC (Thousands of Dollars)
O*her cperahng expenses
$9.567 512.097 $3.0c8 rate, the amount of construction work in progress Ma:ntenance 4 549 2.419 3,809 (CWIP) and discontinuance of the capitalization of Depreciation 2.19G 1 EfB 4.398 AFUDC on CWIP amounts included in rate base. During General taxes G.348 17,164 900 the three-year period amounts of CWIP included in Other operating and maintenance expense increases rate base were related to Clinton Unit 1 and amounted reflect increased employee wages and benefits as well to 597.1 million from November,1979 through June, as the continuing impact of inflation on all costs and 1981, and $375 million since July,1981. The increased expenses.
amounts of AFUDC in 1980 and 1981 also reflect increases in the AFUDC effective after-tax rate which During the above three-year period, inflation, as was increased from 7% to 7%% beginning May measured by the average Consumer Price Index, in, 1 1980, and from 7%% to 8%% effective July 1, creased about 113%.13 5% and 10 4% in 1979.1980 1981. The increased AFUDC rates reflect the increased and 1981. respectively.
cost of financing our ongoing construction program.
During the period we continued to exert stringent The increases in miscellaneous-net reflect in-budget control over expenses In addition, through both the timing and scope of our rate requests we have creased income tax reductions applicable to non-attempted to reduce the financial impact of inflation.
operating activities, principally construction projects.
In ICC rate orders received in both November,1979 Interest Charges-Interest charges have increased and July,1981 we were granted a request for an ad'
$9.9 million, $13.2 million and $10.4 milhon during justment to other operating and maintenance expenses 1979 through 1981, respectively. These increases pri-to provide for partial recovery of such expenses at an marily reficct the $225 million of long-term debt issued inflationary level projected through the first year in during the period at a weighted average interest rate of which new rates would be in effect. In the February-11.0%. During this period we retired $25 million of 1982 rate filing, we have requested the use of a com-long term debt with a weighted average interest rate of pletely forecasted test year which will more fully reflect 28 L the impact of inflation in our rates e jncmases in nd am sp m
n The major item affecting depreciation expense during ncome applicable to common stock in 1979 through this period was the comp!etion of Havana Unit 6 in sM Mm N inwadon d au N fadom ds-1978' cussed herein, including the issuance of additional During each of the three years we have incurred in-preferred stock. Changes in earnings per common creases in both the public and municipal utility tax share also reflect the increased number of common components of general taxes resulting from the growth shares outstanding in each year. (See Notes 9.10 and in operating revenues. In addition, changes in real 11 in " Notes to Financial Statements").
estate taxes have reflected both increased assessed property valuations and tax rates The most significant inflation change in general taves, in both 1979 and 1980 re-The high rates of in'lation wh!ch have been ex-flected the implementation of the !!nnois Corporate per enced in recent years have an impact on our re-Personal Property Rep!acement Tax Law. This new ported earnings shareholders equity and other financial law eliminated both personal property and capital stock information that is not measured by traditional account-taxes as of January 1,1979. On July 1,1979 these taxes ing methods. For supplementary information to dis-were replaced with both a tax on invested capital and close the effects of changing pr ces, see pages 32 an additional tax on income.
and 33.
18
((
ILLINOls POWER COMPANY / ANNUAL REPORT 1931 BALANCE SHEETS December 31, 1981 1980 (Thousands of Dollars)
ASSETS Utility Pl:nt, at original cost Electric (includes construction work in progress of $1,191,374,000 and
$920.167,000, respectively)
$2.802,500
$2,481,189 Gas (includes construction work in progress of $5,829,000 and $6.949,000, 343,596 327,991 respective!y)
~3,146,096 2I809.180 Less-Accumulated depreciation 660,623 607,017 2,485,473 2,202,163 Nuclear fuel in process 39,429 Acquisition adjustment (less amortization of $1,925,000 and $1,680,000, respectively),
2,007 2,253 2,487,480 2,243.845 Invistmints and Other Assets 8,651 8,596 CurrInt As:ets Cash 11,070 10,441 Ternporary cash investments, at cost, which approximates market 2,000 6,000 Accounts receivable (less allowance for doubtful accounts of $3,500,000 and S3,000,000, respectively) 72,522 63,866 Materials and supplies, at average cost Fuel 51,099 67,744 Gas in underground storage 31,286 17,388 Operating materials 23,290 22.743 Prepayments and miscellaneous accounts receivable 30,242 21,494 221,509 209,676 Difirrzd Charges Unamortized debt expense 3,566 3,855 Other 1,289 1,219
- _4J55, 5,074
.._$2,722,495 S2,467,191 CAPITAL AND LIABILITIES
' CIpitiliz1 tion Common stock-No par value, 60,000,000 and 40,000,000 shares authorized, respectively; 40,087,688 and 34,507.851 shares outstanding, respectively, stated at
$ 665,921 5 572,685 Retained earnings 197,762 183,060 Less-Capital stock expense 5,067 4.640 Total common stock equity 858,616 751,105 Preferred and preference stock 215,171 215,171 Redeemable preferred stock 36,000 36,000 Long-term debt 971,639 991,402 Total capitalization 2,081,426 1,993,678 Currant Liabilities Accounts payabic 86,106 65,014 Notes payable 70,500 Long-term debt maturing within one year 20,000 Dividends payable 29,947 25,648 Income taxes accrued 7,832 9,681 General taxes accrued 28,500 25,039 Interest accrued 28,747 28,716 Other 21,230 12,866 292,862 166,964 Othir Accumulated deferred income taxes 193,461 173,221 Accumulated deferred investment tax cred.t 154,746 133,328 348,207 306,549 Comrnitments (Note 7)
$2,722,495 52,467,191 see vo cs to 1 nancial statements sn.cn are an eterar pair o trese stere";e,rs r
19
STATEMENTS OF INCOME For the Years Ended December 31, 1981 1980 1979 Operating Revenues
- Electric
$620,968 S567,356 S479,052 Gas 343,324 310.014 272,770 Total 964,292 883,370 751,822 Operating Expenses and Taxes Fuel for electric plants.
245,626 240,601 225,621 Power purchased for resale 18,970 6,527 6,171 Power interchanged-net (5$,684)
(40,452)
(58,498)
Gas purchased for resale 257,427 218,998 191,296 Other cperating expenses 95,195 85,628 73,531 Maintenance 44,731 40,182 37,763 Depreciation 60,031 57,835 55,967 General taxes 78,737 72,389 55.225 State income taxes-current 8,014 7.983 4,820 deferred (net) 3,239 3,169 2,090 Federal income taxes-current 32,215 27,210 14,231 deferred (net) 17,594 15,683 15,329 Investment tax credit-deferred (not) 21,419 23.071 21,958 Total 827,514 758,824 645,504 Operating income 136,778 124.546 106,318 Other Income Allouance for funds used during construction-All funds-poor to January 1,1977 Other funds-af ter December 31,1976 45,101 36,567 27,5?O Miscellaneous-not
_ 16,651
_ 14,798
_ 10,043 Total 61,752 51,365 37,563 Income before interest charges 198,530 175,911 143,881 Interest Charges Interest on long-term debt 82,318 72.952 62,005 O'her interest charges 5,109 4,050 1,752 Aliowance for borroued funds used during construction-atter December 31,1976 (16,310)
(14,653)
(11.211)
Total 71,117 62,349 52,546 Net income 127,413 113,562 91,335 Preferred dividend requirements 19,897 19,069 15,699 Net income applicable to common stock
$107.516 5 94.493 5 75.636 Weighted average number of common shares outstanding dunng the period 37,843,513 32,906,017 27,979,606 Earnings per common share
$2.84
$2.87 52.70 Cash dividends declared per comrnon share
$2.405 52.355
$2.28
- Includes tavenuo tolated taxes added to customcr billings in cach of tha years 1972 through 1981. In 1981,1980 and 1979 theac revenue related taxes werc $23,1G2,000, $20,643,000 and $17,526,000, respectively.
RETAINED EARNINGS For the Years Ended December 31, 1981 1980 1979 (Thousand; cf Dollars)
Balance at Beginning of Year
$183,060
$168,553 5157,532 Net income 127,413 113,562 91,335
_310,473 282.115
_248.86_7 Less-Cash dividends-Preferred stock 19,897 19,419 15,699 Common stc0
__ 92,814
_ 79,636
_ 64,6_15 112,711
. _99 055
___80 314_
Ba!ance at End of Year
$197,762
$183.060
$168.553 SW ltle S to f;nunC:315!3ferntftt'; whlCh 210 Ort m!egral part O! %> r
- fa *CmentS.
20
\\
((
ILLINOIS POWER COMENY/ ANNUAL REPORT 1981 1978 1977 1976 1975 1974 1973 1972 (Thousands of Dohars 5452,207 5383,567 S303.066
$275,809 5221,126 S199,489 5177,209 219.807 183.820 153,595 133,142 108,789 94.953 95.445 672,014 567,387 461.661 408.951 329.915 294,442 272,654 207,082 148,553 123,782 88,725 63,013 41,408 34,470 5,505 8.664 7,092 5.591 4,727 4,179 3,671 (47,078)
(30,855)
(51,484)
(29,522)
(18,321)
(10,547) 266 145,486 117,812 91.476 71.288 56,539 47,728 46,469 70,463 59,827 53.295 49,631 41,083 37,649 32,302 33,954 28.919 25,726 19,506 17,584 16.131 15,500 51,569 47,188 45.556 42.911 39.282 36,103 32,178 54,325 46.974 40,368 37,036 31,210 28,833 26,282 2,697 3,188 2.444 2,381 1,717 1,732 1,479 1,846 930 1,199 1,166 817 813 714 6,812 15,760 16.001 11.575 15,831 14,099 15.265 18.638 9,053 11,433 11,681 7,367 7,199 6.838 22.793 19.573 10.994 15.034 1,706 5,118 1.567 574,092 475.636 377.882 327.003 262.555 230,445 217.001 97.922 91,751 83.779 81.948 67,360 63,997 55.653 10,5C3 7,459 7,960 7,189 7,339 21,321 15.137 9,402 5,709 3.174 1.967 2,231 2,143 2,101 30,723 20,846 13.677 9.426 10,191 9,332 9.440 128.645 112.597 97.456 91.374 77,551 73.329 65,093 52.453 42 091 35.927 33,144 28,779 25.237 22,810 1,439 1,888 1,744 1,508 4,122 891 1.079 (7,608)
(5,046) 46,284 38,933 37,671 34,652 32,901 26.128 23.889 82.361 73,664 59,785 56.722 44,650 47,201 41,204 15,699 13,257 10.606 7.229 7,229 7.229 5.729
$4 S 37,421 S 39.972 S 35.475
- 9,493-
$ 66.662 S 60,407 S 49 _,179 24.302,139 22,521.013 20,369.958 18,277,397 16,544,110 15.940.000 14,887,945 52.74 S2.68
$2.41
$2.71 52 26 S2.51 S2.38 52 28
$2.22 S2.20 52.20 S2.20 52 20 S2.20 fpp
- - ~
~"^
htetilottse To the Board of Directors of Ilhnois Power Company:
In our opinion, the accompanying ba!ance sheets and the related statements of income, of retained earnings and of sources of funds provided for gross property additions present fairly the financial posi-tion of Illinois Power Company at December 31,1981 and 1980, and the results of its operations and REPORT Op the sources of funds provided for gross property additions for each of the three years in the period ended December 31, 1981, in conformity with generally accepted accounting princip!es consistently INDEPENDENT applied. Also, in our cpinion, the statements of income and of sources of funds provided for gross ACCOUNTANTS P' p rty dditions for each of the seven years in the period ended December 31, 1978, which have been prepared from the applicable statements covered by our reports on each of those years, present fairly the financial information included therein. Our examinations of these statements were made in ac-cordance with generally accepted auditing standards and accordingly included such tests of the account-ing records and such other auditing procedures as we considered necessary in the circumstances.
February 1,1982
& &[u./ n a.
21
STATEMENTS OF SOURCES OF FUNDS PROVIDED FOR GROSS PROPERTY ADDITIONS For the Years Ended December 31, 1981 1980 1979 Funds Provided from Operations tJet income
$127,413
$113,562
$ 91,335 Items not requiring working capital-Depreciation and amortization 62,659 59,967 57,653 Deferred income taxes-net 20,240 19,922 18,635 investment tax credit-deferred (net) 21,819 23.071 21,958 Allowance for funds used during construction (61,411)
(51,220)
(38.731)
To'al funds provided from operations 170,320 165.302 150,850 Dividenas on-Preferred stock (19,897)
(19,419)
(15,693)
Common stock (92,814)
(79.636)
(64,615) tJet funds provided from operations 57,609 66.247 70.536 Funds Obtained from External Sources Proceeds from sales of-Common stock 93,236 82,146 85,451 Preferred stock 36.000 Capital stock expense (427)
(845)
(368)
Proceeds from sales of bonds 125.000 100,000 Proceeds from sale of tJuc! car Fuel 39,810 Po!!ution control construction funds held by trustee Proceeds from saic of ownership interests in the Clinton power station tJet increase (decrease) in notes payabte 70,500 (34,145) 24,145 Retirement of bonds (10.000)
(15.000)
Total funds obtained from external sources 203,119 198,156 194.228 Other Funds Provided (Used) tJet decrease (increase) in working cap,tal*
23,565 414 (11,048)
Misce!:aneous-nc t 3,811 (474)
(835)
Total other funds provided (used) 27,376 (60)
(11.883)
Total funds from above sources.
288,104 264,343 252.881 Allowance for funds used during construction 61,411 51,220 38.731 Gross property additions.
$349,515
$315.563 5291.612 Decrease (Increase) in Components of Working Capital
- Cash and temporary investments
$ 3,371 5 (3,406)
S (5,146)
Accounts receivable (8,656) 4,328 (11,673)
Matena!s and supphes 2,200 1,707 (19.228)
Accounts payable 21,092 (22,799) 27,781 Dividends payabfe 4,299 4.825 2,365 Accrued tazes 1,612 12.148 (3.455)
Interest accrued 31 7,202 3.286 Other-net (384)
_ _ 3.591 )
(4,978)
(
$ 23,565 S
414
,_.$(11.048)
- Excluding notes payable and long-term debt maturing wl thin one year.
GROSS PROPERTY ADDITIONS AND RETIREMENTS For the Years Ended December 31, 1981 1980 1979 Additions -Electric
$330,470 5297,157
$270.806 Gas 19,045
_S315.563
$291,612 18,406
_ 20.806
.$349,515 Retirements--Electric
$ 7,420 5 5.607 S 5.748 Gas 3,139 2.943 2.218
$ 10,559 S 8.550
$ 7.966 see rc:cs :o r nn a! srxements sh ch are an interal cart c ' ~ r a s:a:cmenn.
22
((
ILLINOIS POWER COMPANY / ANNUAL REPORT 1981 1978 1977 1976 1975 1974 1973 1972 (Thousands of Douars)
$ 82,361
$ 73,664
$ 59,785
$ 56,722
$ 44,650
$ 47,201
$ 41,204 53,003 49,761 49.845 44,810 41.216 37,532 33,351 20,275 14,099 12,632 12,847 8,184 8,012 7,552 22,793 19,573 10.994 15,034 1,706 5,118 1,567 (28,925)
(20,183)
(10,503)
(7,459)
(7.960)
(7,189)
(7,339) 149.503 136,914 122,753 121,954 87,796 90,674 76.335 (15,699)
(13,590)
(10,979)
(7,229)
(7,229)
(7,229)
(5.950)
(50,252)
(50,051)
(45,226)
(41,338)
(36,993)
(35,068)
(33.418) 77,552 73,273 66,548 73.387 43,574 48.377 36,967 g
67,870 3,788 63,712 47,256 27,894 43,306 50,450 50,100 35,177 (379)
(275)
(525)
(186)
(139)
(242) 100.000 118,700 100,000 58,500 60,000 2,999 (2,999) 33.926 42,855 27,199 10,000 (10,000)
(12,000) 19,000 (6,000) 8,000
_ 15.000)
_ _ _212.519__
j45,000)
_ __35,070
_ _ _105.255
_ _ _ _54,000
(
199.416 185,486 86,241 7,345 (23.480)
(13,177) 7,378 (27,781) 4,546 (160)
(814) 1.371 965 (407)
(1,238)
(1,743) 5,523 6.531 (22.109)
(12.212) 6,971 (29,019) 2.803 5,363 283.499 263.683 233.822 115.428 119,810 105,180 128,571 28,929 20.183 10.503 7.459 7,960 7,189 7,339 S312,428 5283.866 5250.325 S122,887
$127,770
$112,369
$135,910
$ 22,231 S (534)
S(17,997)
$ 1,996
$ (3,873)
$ 1,985
$ (2,278)
(10.466)
(3,632)
(8.313) 12,749 (25,792) 1,842 (4,077)
(14,253)
(24,868)
(11,149)
(9,134)
(11,944)
(1,348)
(3.685) 10.884 9,832 6,429 6,983 3,186 (2.896) 8.321 1,650 1,528 2.533 1,210 962 1,487 178 (4,466) 5,529 (6,330) 5,101 4,094 (1,023) 3,711 692 6,520 (402) 2,827 379 (2)
(6.590)
(2,032) 3.271 306 1,752 490 1,097 S 7.345 S(23.480)
$(13,177) 7,378
$(27,781 )
$ 4,546
$ (160) 1978 1977 1976 1975 1974 1973 1972 (Thousands of Douars)
$296.597
$272,462 S239,936
$112,234
$116,637 5 98,646 S119,893 15.831 11,404 10.389 10.653 11,133 13.723 16.017
$312f{8
$283,866
$250.325
$122,887
$127,770
$112,369
$135,910
$ 6.247 5 5,040 S 8,010
$ 7,420 S 6,264
$ 5,742
$ 6,532 2.280 1,746 2,034 1,695 2,014 2,126 2,369 S 8,527 S 6,786 S 10.044 S 9.115 S 8.278
$ 7,868
$ 8,901 23 1
NOTES TO FINANCIAL STATEMENTS Note 1-Summary of Acco.mting Policies:
Certain overhead, dismantling and other costs which re capitalized for book purposes, but claimed currently The Company is subject to regulations of the Illinois as deductions for income tax purposes, are normalized.
Commerce Commission and the Federal Energy Regu-latory Commission Because of the rate-making process.
For purposes of computing income taxes, net depre-certain differences arise in the application of generally Ciable utility plant does not inc.:Ude the allowance for accepted accounting principles as between regulated furds used during construction which is capitalized for and non-regulated businesses Such differences con-financial statement purposes. The tax effect resulting cern mainly the time at which various items enter into from this difference and certain other differences in the the determination of net income in order to follow the depreciation bases is reflected currently in net ir.come.
principle of matching costs and revenues. The Com-Investment tax credits which reduce federal income pany's principal accounting policies. including those taxes have been deferred and are being amortized to based on this concept. are described befow.
income over the life of the property which gave rise to the investment tax credits.
Utility Plant-The cost of additions to utility plant and replacements for retired property units is capitalized.
Federal and state income taxes are allocated between Cost includes labor, material and an allocation of gen-operating and non-operating income and expenses.
eral and administrative costs plus an allowance for The tax effects relating to non-operating activities are funds used during construction as described later in included in Other Income-Miscellaneous-net.
this note. Maintenance and repairs. including replace.
Allowance for funds Used During Construction-The ment of minor items of property, are charged to mainte-Federal Energy Regulatory Commission ("FERC") Uni.
nance expense as incurred When units of depreciable form System of Accounts defines A!!owance for Funds property are retired. the original cost and dismantling Used During Construction ("AFUDC") as the net cost charges, less salvage, are charged to accumulated for the period of construction of borrowed funds used depreciation.
for construction purposes and a reasonable rate on Depreciation-For financial statement purposes. depre-other funds when so used. AFUDC is capitalized at a ciation is provided over the estimated lives of the rate which is related to the approximate overall cost o' various classes of depreciabte property by applying capital reduced by the income tax effect of the interest composite rates on a straight-line basis. Provisions for portion thereof. While cash is not realized currently from depreciation in 1981,1980 and 1979 were equivalent such allowance it is realized under the rate-making to approximately 3 4% and 2.9% of the average de-process over the service life of the related property preciable cost for electric and gas utility plant, respec-through increased revenues resulting from higher rate tively.
base and higher depreciation expense.
Income Taxes-For income tax purposes. the Company The rate used in computing AFUDC by the Company, computes depreciation using the most liberalized lives which is an after-tax rate compounded semi-annually, and methods allowed by the Internal Revenue Service.
was 7% during 1979 and through April,1980, 7%%
from May,1980 through June.1981 and 8%% there-t The tax effect of additional deductions for income aften tax purposes, which result from (a) use of liberalized in accordance with Illinois Commerce Commission depreciation methods and use of different book and tax depreciab!e lives, including the Class Life (ADR) rate orders, the Company excluded 597,064,000 of System for assets placed in service prior to 1981 and electric plant construction work in progress ("CWIP")
the ACRS system for assets placed in service subse-from the base on which AFUDC is computed for the Clinton power station unit No.1 from November 28, qucnt to 1980 and (b) the amortization of certain facili-ties, is deferred and recognized in determination of nel 1979 through June 30,1981 and $375,000,000 there-after. Since these orders authorized the inclusion of income for fmancial statement purposes when book provisions exceed deductions taken for tax purposes.
such expenditures in the rate base upon which the The tax effect which results from the use of different Company realizes revenues. there was no material effect on net income.
book and tax depreciable lives of gas utility plant (other than ADR) was not normalized for financial state-Unbilled Revenue-The Company records revenue as ment purposes prior to November,1979. but is being billed to its customers on a monthly cycle billing basis.
normalized subsequent thereto in accordance with the At the end of each month, there is an undetermined provisions of an llhnois Ccmmerce Commission order amount of unbilled electric and gas service which has in November,1979. Since the level of rates approved been rendered from the latest date of each cycle billing by the Commission included the normalization expense.
to the month end Revenues as determined by meters there was no etfect on net income.
read but not billed at year end are subject to income
~'
24 o
[
ituNois PowEn CoVPANY/ ANNUAL nEPoni 1931 taxes. The income tax effect of this book-tax timing dif-deposit rate published by the Federal Reserve Bank of ference in the recognition of revenues is normahzed.
New York and 103% thereof through 1984 and 105%
aW Debt Premium and Discount-Debt premium, discount and related expenses are being amortized on a straight-Another credit agreement provides for a revolving Ioan commitment of $50,000,000 through December 7, line basis over the lives of the related issues.
1984. No borrowings have been made under this agree-Note 2-investments and Other Assets:
ment through 1981. The agreement is on a fee basis of
% of the unused line of credit. The interest rate
!nvestments and Other Assets are carried at cost, under this agreement is based upon the borrowing rate except for the Company's investment at December 31, of prime banks in the London Interbank Market, plus 1981 and 1980 of $3.809.000 and $1.361,000, respec-m rgin of
% through December 6.1982 and %%
tively, in IP Gas Supply Company, a wholly-owned sub-through December 7,1984.
sidiary. The investment in IP Gas Supply is for the pur-pose of exploration to increase available natural gas In addition, the Company has a credit agreement suophes through one of the Company's pipeline sup-which provides for a revolving loan commitment of pliers In accordance with an order from the Illinois
$125,000,000 through December 31, 1985. The Com-Commerce Commission, the accounts of the subsidiary pany intends to maintain this agreement to support its are not consolidated with the accounts of the Company commitment to Illinois Power Fuel Company (" Fuel but are accounted for as an investment on the equity Company"). See " Note 7-Commitments". This agree-accounting method.
ment is on a fee basis of %% based on Fuel Company commercial paper borrowings prior to June 30,1982 Note 3-ShorFTerm Loans and Compensating and % % of the loan commitment thereafter. Interest on Balances:
borrowings is at the Domestic Rate or the Euro-dollar At December 31, 1981 notes payable consisted of Rate. At December 31, 1981. Fuel Company had com-
$70.500,000 in commercial paper bearing interest at mercial paper outstanding of $57,040,000.
an average rate of 12.6% and maturing between Janu-Under these lines of credit, the Company had total ary 4,1982 and January 29, 1982. At December 31, bank commitments of $347,523,000 at December 31, 1980 there were no outstanding notes payable. At De-1981. Bank commitments are held available to support cember 31,1979 notes payable consisted of S34,145,000 the amount of commercial paper outstanding at any in commercial paper bearing interest at an average rate time.
of 13.9% and matunng between January 2,1980 and The maximum aggregate amount of short-term bor-February 29,1980.
rowings at any month end during 1981,1980 and 1979 The Company has lines of credit of $112.523,000 was $70.500,000, $77.580.000 and $34,145.000, respec-with commercial banks for short-term bank borrowings.
tively. The average daily short-term borrowings during Bank borrowings under such commitments have a 360' these periods approximated $21,200.000, $30.100,000 day matunty from the time of issuance and carry an and $12,000.000, respectively (calculated as an average interest rate equivalent to the prime rate in effect at the of the daily borrowings outstanding), with a weighted time of issuance, adjusted to the pnme rate in effect average interest rate of 15.6%,11.8% and 11.3%, re-on the first day of each calendar quarter thereafter-spectively (ca!culated by dividing the interest expense These lines of credit include unwntten agreements during the period for such borrowings by the average with banks commiited for $80.000.000 of the total bank short-term borrowings indicated above).
commitments to maintain average checking account The Company also is negotiating a credit agreement balances equivalent to 10% of the commitments for which provides for a three-year revolving loan commit-borrowings from the banks or 15% of the borrowirigs ment of $180,000,000 renewable on each anniversary outstanding, whichever is greater.
date of the agreement with a provision for conversion The Company also has a credit agreement which pro-to a three-year term loan. This agreement will replace vides for a revolving loan commitment of $60,000,000 the $80.000,000 hne of credit and the $60,000,000 re-through May 1,1983 with a provision for conversion to volving loan agreement.
a term loan having quarterly installment payments be-ginning August 1,1983 and matunng May 1,1986. No Note 4-Jointly Owned Facilities borrowings have been made under this agreement through 1981. The agreement is on a fee basis of W %
Pursuant to agreements entered into in August,1976, of the unused hoe of credit through May 1,1983. Bor-Soyland Power Cooperative. Inc. and Western lihnois rowings through 1982 are at the greater of the lending Power Cooperative, Inc. have a 10.5% and a 9.5% in-banks' prime rate or the average 90-day certificate of terest in the Chnton power station, respectively. Each 25
Notes (Continued) party is responsible for its portion of financing and con-Note 6-Pension Costs:
struction expenditures. The Company's 80% interest in The Company has pension plans covering all officers the power station including land, nuclear fuel in process and employees. Pension costs, which are funded as and allowance for funds used during construction ap-accrued, include current service costs plus unfunded plicable to the Company's interest at December 31-prior service costs which are being amortized over a 1981 and 1980 was $1,176.473,000 and 5941,263,000, period of about 25 years Actuarial assumptions were respectively. The agreements include thc provisions revised in 1981 upon recommendations by the Com-that the Company will exercise control over construc~
pany's independent actuary to reflect both actual Plan tion and operation of the generating station, the parties experience and actuarial projections. These revisiuns will share electricity generated in proportion to their in-resulted in a decrease of approximately 58.600,000 in terests and the Company will have certain obligations unfunded prior service costs. The cost of the pension to provide replacement power to the Cooperatives when plans was $5.808.000, 56.839,000 and $6.391,000 dur-the units are out of service.
ing 1981,1980 and 1979, respectively.
Note 5-Income Taxes:
Following is a comparison of accumulated plan ben-efits and plan not assets as of January 1, the most re-Income taxes included.in the Statements of Income cent information date for which the data is available:
consist of the following components:
1981 1980 Year Ended December 31, (Thousands of Dollars)
Actuarial present value of accumutated 1981 1980 1979 plan benef,ts-(Thousands of Dollars)
_ 8,'996 Non-vested 9.730 Current taxes-
$ 79,168
$79 532 hcluded in Operating Expenses and Taxes
$40,229
$35,193
$19,051 Net assets avadab!e for bonefits
$124,713
$95 948
' "" d
- d I' 0" ' " "-
The assumed rate of return used in determining
" S ' # * "'-"I 3'E848) J12m M7) actuarial present value was 7% in 1981 and 6% in Total current taxes 24,581 22.508 10.014 1980.
Deferred taxes-Dook' tax depreciation differences-net 10,673 14.398 14.240 Note 7-Commitments:
Certain overhead. d>smant ing Illinois Power Fuel Company, which is 50% owned by the Company, was formed in January,1981 for the capital zed net 9,144 5.52 t 4.395 purpose of f;nancing a portion of the nuclear fuel re-Book-tax revenue recognition differences 1,016 (1.070)
(1.216) quirements of the Clinton power station. The Company Total deferred taxes
~~ ~20,833 18.852~
17.419 entered into a lease agreement with the Fuel Company Investment tax cred.t-under which the Company will lease nuclear fuel. Lease deferred (net) 21,419 23 071
,_21.958 payments, which will be equal to the Fuel Company's Total income taxes
$66,833
$64 431
$49.391 Cost of fuel as Consumed. will begin when the Clinton power station commences pre-commercial operation.
Income taxes are less than the amount which would The Company is obligated to make subordinated loans be computed by applying the statutory federal and to the Fuel Company at any time the obligations of the state income tax rates to pre-tax income, the principal Fuel Company which are due and payable exceed the differences are as follows:
funds available to the Fuel Company. The Company's December 31, investment of $50,000 is accounted for under the equity methy and the lease is accounted for as an operating 1981 1980 1979 lease in accordance with an Illinois Commerce Com-Computed tax exrense at statutory federal and state If the Company had accounted for the nuclear fuel income tax rates
$ 96,066
$88.356
$68 615 lease as a capital lease, both not assets and liabili-neductions Oncrease) in encome ties would have been increased by approximately at hh W, M.
i n
or nds used dunng construction 30,371 25.425 18.940 Reference should be made to " Construction" in the other-net (1,138)
(
forepart of this annual report for information concern-
. _ 1.500 )
484 Totat income tues g6333
$64.431
$49.391 ing construction expenditures.
26
[
ILLINots POWER COMPANY / ANNUAL REPORT 1981 Note 8-Quarterly Financial Information (Unaudited):
First Quarter Second Quarter Third Quarter Fourth Quarter 1981 1980 1981 1980 1981 1980 1981 1980 (Thousands of Dollars Except Earnings Per Common Share)
Operatmg revenues
$271.252 $264.662
$198.693
$194,718
$239.724 $212,823 $254,623
$211,167 Operating income 38.535 36,181 25,580 32,497 43.228 34,497 29.435 21,371 Net income.......
37.078 30,720 25,130 30.109 39.351 32,546 25.854 20.187 Net income applicable to common stock 32,104 26.573 20,156 25,135 34,377 27,572 20.879 15.213 Earnings per common share 92c 87c 54c 76c 88c 82c 52c 44c Quarterly camings per common share are based on weighted average number of shares outstanding during the quarter and the sum of the quarters may not equal annual carnings per common share, Note 9-Common Stock and Retained Earnings:
At the annual meeting of the Company on April 16, 1981, the stockholders voted to amend the Articles of in-corporation to authorize an additional 20,000,000 shares of common stock of the Company.
The Company has an Automatic Reinvestment and Stock Purchase Plan and an Employees Stock Ownership Plan ("ESOP") for which 4,996,647 and 72,990 shares, respectively, of common stock were designated for issu-ance at December 31,1981.
The Company also has a Tax Reduction Act Stock Ownership Plan ("TRASOP"), permitting the Company a maximum additional investment tax credit of 1% provided common stock of the Company equal in value to the additional credit is contributed to the Trust. The TRASOP allows an additional investment tax credit up to %%
provided that such amount is matched by employee contributions and that common stock of the Company equal in value to the additional credit and the employee contributions is contributed to the Trust. Under this p!an, 182,675 shares of common stock were designated for issuance at December 31,1981.
Changes in common stock during 1981.1980 and 1979 were as follows:
1981 1980 1979 Shares Amount
- Shares Amount
- Shares Amount
- Balance beginning of year 34.507,851
$572,685 29.487.643
$490,539 25,474.381
$405,088 Public offerings 3.000.000 48,165 3,000.000 45,075 3,000,000 64.650 Automatic Reinvestment and Stock Purchase Plan 2.222,506 38,399 1,676.155 30.369 771,796 15,509 ESOP......
33,020 595 31,053 569 21,439 454 TRASOP 324.311 6.077 313,000 6.133 220,027 4,838 Balance end of year.
40,087.688
$665.921 34,507,851
$572,685 29,487,643
$490.539
- Thousands of dollars None of the Company's retained earnings at December 31,1981, were restricted with respect to the declara-tion or payment of dividends.
27
Notes (Continued)
Note 10-Preferred and Preference Stock:
The following tabulation shows preferred and preference stock, issued and outstanding at December 31,1981, 1980 and 1979, and the redemption prices (exclusive of accrued div;dends) applicable to each series.
Serial preferred stock, cumu!ative,550 par va'ue-Authorized and outstanding 5,000,000 shares (inc!ud,ng 720.000 shares of redeemabte preferrcd stock-see Note 11):
1981 1980 1979 Series Shares Redemption prices (Thousands of Dollars) 4.089b 300,000 551.50
$ 15,000 S 15,000 S 15,000 4.269b 150,000 51.50 7,500 7,500 7,500 4.709b 200,000 51.50 10,000 10,000 10,000 4.429b 150,000 51.50 7,500 7,500 7,500 4.209b 180,000 52.00 9,000 9,000 9,000 j 52.93 prior to August 1,1986
)
30,000 30'000 30'000 8.249b 600,000 I 51.90 thereafter
{
53 575 prior to July 1,1982
]
7.569b 700.000 52.63 thereafter and pre to July 1,1987 35,000 35,000 35,000 f
51.685 thereaf ter f 54 25 prior to March 1,1986
}
50,000 50,000 50.000
( 52 90 thereafter and pr:or to March 1,1991 f
8 94ob 1,000.000 51.60 thereafter J 55 29 prior to August 1,1982*
8 009b 1,000.000 J 54 29 thereafter and poor to August 1,1987 50,000 50,000 50.000 53 29 thereafter and prior to August 1,1992 52 29 thereafter Premium on preferred stock 1,171 1,171 1,1 71 Serial preferred stock, cumu'at:yo, without par va!ue-Authonzed 5.000,000 shares; none outstanding Total preferred stock 215,171 215,171 215.171 Preference stock, cumu!ative, without par value-Authonzed 5.000.000 shares; none outstanding Total preferred and preference stock
$215,171 5215J71 5215 111 no. reycmne mecue a rew,, enva o, at a cost to rc comrm o vss r~a,7 Wo rer a-num peor to L7ust 1. t ?82 The above outstanding issues of preferred stock, S50 par value, are redeemable at the option of the Company in whole or in part at any time upon not less than thirty days and not more than sixty days notice by publication.
Note 11-Redeemable Preferred Stock:
On March 13,1980 the Company issued 720,000 shares of 11.669b serial preferred stock (par value $50), sub.
ject to mandatory redemption in an amount sufficient to retire on each February 1, beginning in 1988, 19.800 shares and February 1, 2020, 86.400 shares at $50 per share plus accrued dividends. The Company has after February 1, 1988 the noncumulative option to redeem up to 19,800 additional shares in each such year.
28
[
ILLINots POWER COMPANY / ANNUAL REPORT 1981 Note 12-Long-Term Debt:
Long. term debt was represented by:
December 31, 1981 1990 (Thousands of Dollars)
Fir;t mortgage bonds-3W % series due 1982
$ 20,000 5 20,000 3W % series due 1983.........
20,000 20,000 3%% series due 1986......
20,000 20,000 11%% series due 1987....
75,000 75,000 4% series due 1988 25,000 25,000 4% % series due 1993..
35,000 35,000 5.85% series due 1996.....
40,000 40.000 6%% series due 1998 25,000 25.000 6%% series due 1998....
45,000 45,000 8.35% series due 1999 35,000 35.000 9% series due 2000 35,000 35,000 7.60% series due 2001 35,000 35,000 7%% series due 2003..
60,000 60,000 6.60% series due 2004 (Pollution Control Series A) 8,500 8.500 9% % series due 2004 100,000 100,000 10W % series due 2004 50,000 50.000 8%% series due 2006 100,000 100,000 6% series due 2007 (Po!Iution Control Series B) 18,700 18,700 8% % series due 2007 100,000 100,000 8% % series duc 2008 100,000 100,000 12%% series due 2010.
50,000 50,000 Total tong-term debt 997,200 997,200 Unamortized premium and discount on debt (5,561)
(5.798) 991,639 991.402 Less first mortgage bonds maturing within one year
_20,000
$971,639
$991.402 Certain supplemental indentures to the Mortgage and Deed of Trust require that the Company, beginning in 1985, deposit annually in cash as a sinking and property fund, $5,000.000 for the 9% % series due 2004 and $100,000, and increasing amounts in later years, for the 6.60% series due 2004 (Pollution Control Series A), which amounts are not subject to reduction. Certain other supplemental indentures require that the Company deposit annually in cash as a sinking and property fund amounts not to exceed $3,150.000 in 1982, S2.950,000 in 1983. $3,550,000 in 1984, $4,050,000 in 1985 and $3,850,000 in 1986, which amounts are subject to reduction in accordance with certain terms of the mortgage; historically these requirements have been met by pledging property additions.
The above bonds are secured by a first mortgage lien on substantially all of the fixed property, franchises and rights of the Company with certain minor exceptions expressly provided in the mortgage securing the bonds. The remaining balance of net bondable additions at December 31,1981 was approximately 5847,000,000.
29
Notes (Continued)
Note 13-Segments of Business:
The Company is a public utihty engaged in the generation, transmission, distribution and sale of electric energy and the distribution and sale of natural gas.
Year Ended December 31,1981 Year Ended December 31,1980 Year Ended December 31,1979 Total Total Total Electric Gas Company Electric Gas Company Electric Gas Company (Thousands of Dollars)
(Thousands tf Dollars)
(Thousands of Dollars)
Opmat n3 information-Operating revenues
$ 620.968 $343,324 $ 964.292 $ 567.356 $316 014 $ 883 370 $ 479.052 $272.770 $ 751.822 Operating expenses, exclud'ng provision for income t. des 419.079 325.954 745.033 401.517 280 191 681.708 343.592 243.484 587.076 Pre tac cperahng income 201.889 17.370 219.259 1C5 839 35 823 201.6C2 135.460 29.286 164,746 Allowance for fund; used during con-struction ( AFUDC) 61.356 55 61.411 51.032 188 51 220 38 525 206 38.731 Pre tax cperating income, includ ng AFUDC
$ 263 ?45 $ 17_.g 280 670 $ 216.871 $ 36 011
?52.882 $ 173 935 $ 24 492 203.477 Other (income) and deductions (16.651)
(14.798)
(10.043)
Interest charges 87.427 77.002 63.757 Provmon f ar icccme ta x e s 82.481 77,116 58.428 rkt inccme per acccmpanytra state-ments of incomo
$ 127.413
$ 113 562
$ 91 335 Other information-DopreciaSon S 50 522 $ 9 509 $ 60 031 $ 48 83R $ 8.997 5 57 835 $
4't.377 $ 8 540 $ 55 967 Capital expend tures
$_330 470, _$ 19 045 5 349 5_.15
$ 297157 $ 18 406 $_315 563 $ 270 806 $ 20 806 $ 291612 investmort information-IdentAab'n assets *
$2 307 598 $285 484 $2.593 087 $2 088 962 $260 619 $2 358 581 $1836 862 $2F6 467 $2.103.325 Nonut!ht/ plant and other investments 8 651 8.596 8 663 Assets utihzed for overall Company operations.
120.757 100 014 102.664 Total assets
$2 722 495
_$_2 467.191
$2 214 652
- Utility plant, nuclear fuel in process and acquisition adjustment less accumulated depreciation and amortization, fuel, natural gas stored underground and materials and supplies.
30
/P ituNol5 PoMH COMPANY /ANNUtl TRPoRT M81 Two-Vear Dividends and Stock Prices by Quarters The common stock is listed on the New York Stock Exchange and the Midwest Stock Exchange. The prices belon are the prices reported on the Composite Tape. The preferred stocks are listed on the New York Stock Exchange and the prices below cre the prices on that Exchange.
1981 Stock Prices 1980 Stock Prices 1
2 3
4 1
2 3
4 Dividends
- High Low High Low High Low High Low High Low High Low High Low High Low Common 19 % 17 19% IC% 20 17 % 21 % 17 %
19W 15% 22W 16 21% 18% 20W 16%
4 08% Pfd.
$.51 16W 14% 16 14 % 16 13W 15W 14 18 15% 19W 14 19W 17 17 14 %
4 2G% Pfd
.53%
16W 14W 17 15 % 17 15 % 16 14 %
20 1G% 20 16 20 17 % 18 15 4.70% Pfd.
.58%
18W 16 18W 10% 17W 15% 17% 15%
22 18W 23W 17 22 % 18 19W 16 4.42% Pfd.
.55%
17 15W 17 15W 17W 14% 16 14 %
19 18 21% 17% 19W 19W 18 17 %
4 20% Pfd
.52 W 16W 14W 15% 14W 15W 14W 15% 14 19% 14% 19% 14% 19% 17% 1GW 15 8 24% Pfd 1 03 31% 29 30% 28% 30W 27 30 25 %
36 27 40 % 26 % 40 33% 34% 28W 7 56% P!d.
04 %
31 27 28 2G% 27% 25W 27W 24 3G 25 37 % 25 % 34 % 31 30W 26 8 94% Pfd 1.11 %
33W 32 34W 31 31 % 29 32W 28%
42 % 33 % 44 32 42 34 36W 30W 8 00% Pfd.
1 00 30% 27% 31W 28 29 % 28 28 26 37 % 32 40 28W 39 32W 32% 28W 11 CG% Pfd 1.45 %
50 % 49 48 % 48 % 49 46 47 % 43 %
55 49 55 52% 52 48 %
- 7hc amount declared in cach quarter during 1980 and 1981. 7hc 11.66% Preferred was issued on March 13,1980 and dividends woro declared thercatter at the indicated rate.
- * $ 57 por common share in hrst quarter 1980. $.59W second quarter 1980 through third quarter 1981 and $.62 in fourth quarter 1981.
There were 81,938 registered record holders of common stock at January 11, 1982.
Selected Financial Data
- 1981 1980 1979 1978 1977 Total operanng revenues S 964,292
$ 883.370
$ 751,822
$ 672,014 S 567,387 Net income
$ 127.413
$ 113,562
$ 91,335
$ 82,361 5 73.C64 Net incomo app'icabic to common stock
$ 107,516
$ 94.493
$ 75,636
$ 66,662
$ 60,407 Earnings per common share 2 84 2.87 2.70 2.74 2.68 Cash dividends declared per common share 2 405 2.355 2 28 2.28 2.22 Total assets
$2.722,495
$2.467,191
$2.214,652
$1.938.506
$1.770.662 Long. term debt S 971.039
$ 991,402
$ 866,747 5 776.559
$ 692.255 Redeemable preferred stock
$ 36,000
$ 30.000 Ratio cf earninrp to fixed charges *
- 3.16 3.25 3.15 3.34 3.58
- Thousands of dollar'; except earnings per common share, cash dividends declared per common sharc and ratio of carnings to hxed charges
- The labo of carnings to hxed chargos repicsents the nunibor of 1mes that carnings batorc incomo taxes and fixed charans cover the hard chargos. Earnings used in the calculation at the above ratios includo allowance for funds used dunng t onstruc toon and are before ihn deduction of incomo lancs and tuod chargos which include interest on long term debt, related amortvat'on of debt discount premium and expenso. and other interest on that portion of rent expence which is estimated to be representative of the in!cicSt component.
31
Supplementary Information to Disclose the Effects of Changing Prires J
The unaudited supplementary inforrration presented stated in terms of censhnt doPars or current cost that herein is intended to provide a perspective as to the exceeds the historical cost of utihty plant is not pres-approximate effect of inflation upon our Company as a ently being recovered in the Company's rates, and is regu'ated utility. This information is not intended as a ref'ected as a reduction to not recoverable cost.
Substitute for earnings reported on a historical cost The July,1981 lilinois Commerce Commission rate basis. The information has been prepared as prescribed order considered both the " fair value" and historical by the Statement of Financial Accounting Standards fjo.
cost of electric plant. However, since the allowed de-
- 33. Financial Reporting and Changing Prices. This preciation associated with electric plant was based statement requires adjustments to historical costs to upon historical cost. the need to reflect a reduction to estimate the effects that general inflation (Constant not recoverable cost remains unchanged.
Dollar) and changes in specific prices (Current Cost) have had on the Company's results of operations.
Gain from the Decline in Purchasing Power of f4et Amounts Owned Utility Plant and Depreciation For the follon;ng presentation, utihty plant has been To properly reflect the economics of rate regulation restated on both a constant dollar and a current in the Statement of Income Adjusted for Changing cost basis. Constant dollar amounts represent histori.
Prices, the reduction of not utility plant to not recover-cal costs stated in terms of dollars of equal purchasing able cost should be offtet by the gain from the decline power as measured by the Consumer Price Index for in purchasing power of not amounts ord. During a all Urban Consumers (CPI-U). Current cost amounts period of inimtion. holders of monetary acets (such ref!ect the changes in specific prices of plant from the as receivables) suffer a decline in generd purchasing date the plant was acquired to the present and are an power because the amounts of cash receiod for these estimate of the cost of currently reproducing existing items in the future will purchase less. Conversely, plant Constant and current dollar amounts differ to the issuers cf monetary habihties (such Ss long-term debt, extent that speciftc prices of utihty plant have increased preferred stock and accounts payable) experience a '
more or less rapidly than pnces in general.
gain because future payrnents will be made with dcllars having less purchasing power. The Company has sub-The current cost of utility plant, which. includes land.
stantial amounts of debt and preferred stock and, land rights, intangible plant, property held for future therefore, for purposes of these calculations, has a net use. construction work in progress and nuclear fuel ain from holding monetary liabilities in excess of in process was determined by indexing surviving plant etw meh using the Handy-Whitman Index of Public Utility Con-Struction Costs Accumulated depreciation was calcu-Inventories and Taxes lated by applying the historical depreciation rates to th Fuel inventories, the cost of fuel used in generation estimated current costs of depreciable properties by and gas purchased for resale have not boon restated year of addition The current year's provision for de-from their historical costs. Regulation limits the re-preciation stated in constant dollars and current costs covery through the operation of adjustment clauses in was determined by applying the Company n composite basic ra o schedu!es to the actual costs of fuel and depreciation rates to the indexed utility p! ant amounts urchased gas. For this reason, fuel inventories are The increase in depreciation expense on utility plant considered monetary assets.
restated for the effects of changing prices, represents As rescribed in the Statement of Financial Account-the excess of depreciation expense in terms of con-ing Standards flo 33. income taxes wcre not adjusted stant dollars and current cost over historical deprecia-U t,on expense (500 0 milhon) used for financial state-meacMng WaW Me @m @m. h &
a ment purposes.
pense under constant do!!ar and current cost account-Reduction to tJet Recoverable Cost ing is not tax deductib!e. Therefore. the Company's Under the rate-making procedures prescnbod by the combined effective federal and state income tax rate.
regula'ury commissions to which the Company is sub-
- v. hen adju:ted for inflation, is 56 3% under constant ject. cnly the historical cost of utility plant has been re-do'!ar and 62 8% under current cost for 1981 each t'ected in the rate baco used in recent years to deter-of which exceeds the reported effective tax rate of mine the amount of return to which the Company is 34 4% and the combined statutory federal and state entitled Therefore. tho excess of the cost of utihty piant rate of 49 5%
32
[
ILUNOIS POMn COMPANY / ANNUAL REPOni 1981 Statement of Income Adjusted for Changing Prices For the Year Ended December 31,1981 (Thousands of Dollars)
Constant Dollar Current Cost Average Average 1981 Dollars 1981 Dollars
$ 127,413
$127,413 Net income, as reported Mrease in depreciation expente on u%ty ptant as resta'ed for the effccts of changh,) prices.
75.636 87,907
, fJet incorne (excluding reduction to net recoverabfe cost)
$ 51,777*
$ 39.506 Increase rn specific crices (current cost) cf ut hty plant ho!d during tt s year **
$269.956 Len increase in cost cf utiht/ plant adjusted for changes ir, general price level 326.425 Excess of increase in general price level over increase iri specif c prices (56 469)
Reduction to net recoverab!e cost
$(171,483)
(102,743)
(159.212)
Gain from decline in purchasing power of net amounts owed 122.045 122 045 tJet price level adjustment
$ (49.438)
$(37,167)
- Including the reduction to net recoverable cost, the net loss on a constant do!!ar basis would have been approximatefy $120 million for 1981.
- At December 31, 1981, current cost of utility plant, not of accumu!a'ed depreciation, was approximately $3 9 biffion, white net hisiorical cost recoverable through depreciation was approximate?y $2 4 bill ion.
o Hve Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices
- For the Years Ended December 31, 1981 1980 1979 1978 1977 Operating revenues-Historical cost
$964 292
$883.370
$751.822
$672.014
$567.387 Adjusted for general inf!ation 964.292 975.000 942,025 936.830 851.549 Historical cost information adjusted for general inflation income from operations (excluding reduction to net recoverable cost) 51,777 50.035 47,171 income per common share (after preferred stock dividend requirements and excluding reduction to net recoverable cost)
.84
.88
.98 Net assets at year end at net recoverabfe cost.
831,993 791.800 773.828 Current cost information income from operations (excluding reduction to net recoverable cott) 39.506 32.477 25.544 Income per common share (after preferred stock dividend requirements and excluding reduction to net recoverable cost)
.52
.34
.21 Excess of increase in general crico level over increase ir, specific prices after reduction to net recovorable cost 159.212 168,248 219,949 Net essets it year end at net reccvorable cost 831,993 791,800 773.828 General information Gdn hm dechte in purchasing power of net amounts owed 122.045 158,904 192.752 Casn dvwnds declared per conimon share-His:orican.ost L405 2.355 2.28 2.28 2.22 Adjusta/1 for general inflation 2.40d 2.60 2.86 3.18 3.33 Market prico per common share at year t nd--
Histurical cost 20.625 17.88 19.13 22.75 26 50 Adjusted for General intfation 19 96 18.85 22 67 30 54 36.79 Average consumer price index 272.4 246.8 217.4 195 4 181.5 Year-end consumer price index 281.5 258 4 229.9 202.9 186.1
- In thousands at average 1981 da!Iars except per share data and indices 33
ELECTRIC OPERATING STATISTICS 1981 1980 1979 1978 1977 R: venues (Thousands of Doitars)
Residential
$ 209,310
$ 199.124 5 160,355
$ 159,493
$ 139,458 Commercial and small power 134,968 123,463 105,262 102,170 69,947 Large power and light 223,950 198,177 174,315 158,611 149,307 Other 11,430
_ 9.897 8,137 7,631 6.286 Revenues-ultimate consumers 579,658 530,661 448,069 427,905 364,998 Rural cooperatives and municipal utilities 35,826 33,236 27,790 21,448 15,853 Other electric utilities 47 68 59 66 50 Miscellaneous 5,437 3,391 3,134 2,788 2,666-
$ 620,968 5 567,356 5 479,052
$ 452,207 5 383,567 Customers at End of Year Residential 469,452 466,546 461,966 455,014 445,130 Commercial and small power 54,895 54,546 53,804 53,051 51,384 Large power and light 361 359 374 368 1,305 Other 718 715 714 699 692 525,426 522.166 516,858 509,132 498,511 Sales in KWH (Thousands)
Residential 3,741,175 4,003,563 3,737,245 3,770,703 3,632,898 Commercial and small power 2,449,342 2,492,930 2,408,131 2,383,521 1,696,894 Large power and light 6,555,190 6,507,468 6,738,321 6,271,872 6,541,429 Other 295,922 290,851 282,848 271.853 260,263 Sales-ultimate consumers 13,041,629 13,294,812 13,166,545 12.697,949 12,131,484 Rural cooperatives and municipal utihties 1,169,163 1,189,702 1,057,113 874,452 817,334 Other electric utilities 1,758 1,901 1,874 2,004 2,035 14,212,550 14,486,475 14,225,532 13,574,405 12.950,853 Generated and Purchased in KWH (Thousanas)
Generated-Steam 15,710,540 16,306,993 16,840,214 15,770,060 14,530,570 Hydro and internal combustion 35,447 61.914 55,241 38,039 74,117 Total generated 15,745,987 16,368,907 16,895.465 15,808,099 14,604,687 Purchased and interchanged--net (616,437)
(838,615)
(1,666,889)
(1,256,163)
(666,844)
Total output 15,129,550 15,530,292 15,228,566 14,551,936 13,937,843 Less-used and unaccounted for.
917,000 1,043,817 1,003.034 977,531 986,990 14,212,550 14.486,475 14,225,532 13.574,405 12.950.853 Peak Demand (native load) in KW (Thousands) 3,100 3,150 3.019 2,825 2,846 Net Generating Capability in KW (Thousands) 3,815 3,815 3,815 3.815 3.412 Due to a change in the Company's rate structure in 1977, there was a reclassification of customers between the commercial and small power category and the large power and light category for the years 1981,1980,1979 and 1978. As a result of this reclassification, only customers having a demand of 500 Kw or greater are classified in the large power and light category.
34 l
((I ILLif401s POWEH COWAf4f/AfdtJUAL M PORT 1981 GAS OPERATING STATISTICS 1981 1980 1979 1978 1977 Revenues (Thousands of Dollars)
Residential-without space heating 2,372 5
2,201 2,056 5
1,758 1,819 with space heating 156,378 142,050 124.354 105,484 91,798 Commercial-without space heating 4,040 2,265 2,858 1,722 1,469 with space heating 57,602 52,976 46,010 37,536 31,098 Industrial -non-interruptible 114,944 76,743 43,714 30,910 25,641 interruptible 6,803 31,951 51,354 40,906 33.376 Revenues-ultimate consurners 342,139 308,186 270,346 218.316 185,201 Interdepartmental revenues-interruptible 1,074 1,825 2,365 1,058 75 Miscellaneous 111 6,003 59 433 (1,456)
$ }43,324 5 316.014 5 272,770
$ 219,807 5 133,820 Customers at End of Year Residential -without space heating 13,470 16.040 18,251 19,834 21,377 with space heating 336,504 332,695 326,816 319,968 313,900 Commercial-without space heating 1,624 1,891 2,048 2,112 2,192 with space heating 31,387 30,725 30,032 29,522 29,116 Industrial -non-interruptible 482 474 480 470 457 interruptible 7
24 58 80 102 383,474 381.849 377,685 371.986 367,144 m.__
Sales in Therms (thooumh)
Residential -without space heating 4,487 5,165 6,231 6,172 0,840 with space heating 386,282 414,405 459.329 469,906 436,838 Commercial-without space heating 10,792 6.749 10.586 7,986 7.554 with space heating 161,720 168,563 182,212 181,960 166.455 Industrial -non-interruptible 363,633 280,471 194,310 181,029 172.089 interrJptible 21,163 101,935 186,264 180.138 147,205 Sales-uttimate consume rs 948,097 977,288 1,038,932 1,027,191 936,981 Interdepartmental cales-interruptible 4,360 8,853 13,141 8.034 693 952,457 986,141 1,052,073 1,035,225 937,674 Purchased and Produced-Therms (inow mn)
Purchased 1,040,091 980,426 1,118,246 1,087,749 1,024,805 Storage-net of (injected) and withdrawn (48,047) 55 525 (30,203)
(14,998)
(57,182)
Purchased gas dehvered 992,044 1.035,951 1,088,043 1,072,751 967,623 Produced 21 99 69 24 2,417 Total 992,065 1,03G,050 1,088.112 1,072,775 970,040 Less-used and unaccounted for 39,608 49,909
_ 36,039
_ _37_,55_0
_ _3?,36G_
952,457 986,141 1,052,073 1,035,225 937,674 35
Board of Directors Officers Wendell J. Kelley Chairman and President Robert J. Burow Consuttant and Retired Publisher The Commercial-News Danville, Illinois William C. Gerstner Charles W. Wells Executive Vice Executive Vice Wililam C. Gerstner President President Executive Vice President of the Company Decatur, Illinois Grover J. Hansen Arthur E. Gray James O. McHood President and Chief Operating Officer of Vice President and Vice President First Federal Savings & Loan Association Secretary of Chicago Chicago, lilinois Larry D. Haab William E. Warren Vice President and Vice President Wendell J. Kelley Treasurer Chairman and President of the Company Decatur, I!!inois Leonard J. Koch Porter J. Womeldorff Vice President Vice President Donald E. Lasater Chairman of the Board and Chief Executive Officer of Mercantito Bancorporation Inc.
Larry F. Altenbaumer John B. Burdick (a bank holding company)
Assistant Treasurer Ass stant Secretary St. Louis, Missouri Eva Jane Milligan Senior Vice President, General Personnel anager of Marshall Field & Company Transfer Agent and Registrar Chicago, Illinois Coniinental lilinois National Bank and Trust Company of Chicago Keith R. Potter 231 South LaSalle Street, Chicago, Illinois 60693 Consultant and Retired Vice Chairman International Harvester Company Stockholder Records and Dividend (manufacturer of trucks; agncultural, construction, and industrial equipment; and Gas turbines)
Disbursing Office Easton, Maryland Shareholder Serv;ces Section Illinois Power Company Boyd F. Schenk 500 South 27th Street President and Chief Executive Officer of Decatur, libnois ti2525 Pet incorporated (217) 424-6609 (processor and marketer of food products and other consumer goods)
The annual stockholders' meeting will be held St. Louis, Missouri April 15,1982, at tho executive ottice of the Company at 10 A M. Proxies for this meeting wl!!
be rcouested by the Board of Directors. A proxy Richard P. Stone statement witt be mailed to stockholders about Grain and Seed Farm Operator March 12,1982.
Spongfield, !ilinois This report and the fina icial statements con-Charles W. Wells tained herein are submitted for the general in-formation of the stockholders of the Company Executive Vice Pres, dent of the Company as such and are not intended to induce, or to i
Decatur, IJnois be used in connection woh, any sale or pur-chase of securities.
Gordon R. Worley Executive Vice President-Finance of Montgomery Ward & Co., incorporated (a retailer)
Chicago, llhnois Vernon K. Zimmerman ILLINOIS POWER COMPANY Dean, Cot!ege of Commerce and Business Administration Principal Office University of I,liinois Monticello, lltinois 61856 Urbana, Illinois e
a ce Note: The principal occupation of each director and officer of lHinois Power Company is 500 South 27th Street, Decatur, I;Snois 62525 that bsted.
Phone (217) 424 6600 36
l r
}
IP Territory Served By lilinois Power Company CHICAGO i
LA SALLE HENNEPIN g
STATION 3 o
GALESBURG l
R[t BLOOMINGTON VERMILION HAVANA LINTON STATION STATION STATION ct D AN', ILLE CHAMPAIGN g,
cowT O
)g 4
JACKSONVILLE E
DECATUR qgR p
H;LLSBORO
+
WOOD RIVER ST. LOUIS '
e GRANITE CITY BELLEVILLE
4' MT. VERNON BALDWIN STATION.
O LEGEND AREA SERVED SPARTA MAJOR GENERATING STATION Ils NUCLEAR GENERATING STATION O GAS STOPALE FIELD
(
Bulk Rate U.S. Postage Paid Chicago, IL ILLINOIS POWER COMPANY, 500 SOUTH 27TH STREET, DECATUR, ILLINOIS 62525
)
f
('
I ELECTRICITY Ipi ILLINOIS POWER COMPANY NATURAL GAS 1
1
. _ _ _ _ _ _ _ _ _ _ _ _ _ _