ML20058J834

Annual Financial Rept 1981

ML20058J834
Person / Time
Site:	Hatch, Vogtle, 05000000
Issue date:	02/19/1982
From:	John Miller, Scherer R GEORGIA POWER CO.
To:
Shared Package
ML20058J832	List: ML20058J828 ML20058J834
References
NUDOCS 8208120134
Download: ML20058J834 (29)

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Georgia Power Company 333 Piedmont Avenue P.O. Ilox 4545 Atlanta Georgia 30302 Telephone: 404-5264i326 Georgia Power Companyis an investor <>wned electric utility serving 57,000 of the state's 59,000 square miles.The Southern Companyis the parent finn for Georgia Poweras well as Alabama Power. Gulf Powerand 31ississippi Power.Together these companies comprise the Southern electric system.

A copy of Form 10-K as filed with the Securities and Exchange Commission will be provided upon written request to the office of the Corporate Secretary. A copy of the Company's Financial and Statistical l

Review also is available upon request. For additional informa-tion, contact Str. W. L Westbrmk.

Senior Vice President. Secretary and 'lYeasurer 404-5264i326 Registrar

'lYust Company llank, Atlanta All Preferred Stock TransferAgent

'iYust Company Ikmk. Atlanta All Preferred Stock Dividends Paid it has been determined that all dividends paid on Georgia Power Company Preferred Stock (includ-ingClass A Preferred) for the year 1981, are 100% taxable.

This annual report is submitted as information for stockholders and is not intended for use in connection with any sale or purchase of,orany offers or solicitation of offers to buy orsell,any securities,except to the extentincorporated by reference in a prospectus.

On the Cover:

Atlanta's sk>line at dusk with Georgia power's corporate head-quarters, in right foreground, reflecting the setting sun.

]lidI1ligIllS Georgia Iburr Company Financial hn thousands of dollars) 1981 1980

% Change Operating revenues.

$2,015,810

$ 1.808,408 11.5 Operating expenses.

$1,7trS,671

$ 1,492.120 14.5 Net income after dividends on preferred stock.

5172,094

$ 195,315 (l1.9)

C,ross property additions.

$730,454 sti90.959 5.7 Net utility plant (year-end).

$4,974,790

$4,431.fiM3 12.2 Electric Operations Kilowatt hour sales (millions).

47,742 4fi.304i 3.1 Customers served (year-end).

1,249,126 1,215,714 2.7 31aximum system peak hour demand (megawatts).

I1,514 11.151 3.2 Ca pital St ruct u re llatios (year-end) l>>ng-term deht*

57.91%

57.42%

Preferred stock.

7.70%

8.75%

l' referred stock subject to mandatory redemption

• 2.99%

1.71%

Common equity.

31.40%

32.12%

Return on Average Common Equity..

12.41%

15.47%

Coverage flatios First mortgage bonds.

1.99 2.8ti l' referred stock.

1.50 1.81

• Inciwles amounts due uithin one year

\\

'Ihble of Contents liighlights I

lxtier to investors 2

1981 Achievements 4

Selected Financial 1)ata 12 blanagement's I)iscussion 14 Financial Statements Ifi Auditors Report 26 Report of Slanagement 27

!)irectors and Officers 27 1

LctterTo Investors Georgia Power Company made allowing us the opportunity to completion dates for the other substantial strides during 1981 carn an improved return on three units at this coal-fired plant toward achievingits business our investment.

are 1984.1987, and 1989.

objectives.The Company made On September 1.1981, we Construction also continued pn>gress in the key areas of rate d'ed a request with the Federal during 1981 on the two nuclear regulation, sales and marketing.

Energy Regulatory Commission units at Plant Vogtle and on the plant operations and construc-(FERC) fora $25.6 million annual pumped storage project at Rocky tion and management organiza-increase in revenues from our 31ountain.The current co-tion.These achievements during territorial wholesale customers.

mvners of Plant Vogtle are the 19S1 substantially strengthened A tentative settlement would same as those participatingin the Companyk future financial allow the Company to increase the ownership of Unit 1 at Plant and operating position.

rates by $16.5 million annually Scherer. Ilowever, we have neen llowever. largely because of effective February 1,1982.This negotiating with the Florida 31u-inadequate retail rates.1981 was tentative agreement is subject to nicipal Power Agency and the the 6rst yearsince 1977 in which review by the FERC.

Jacksonville Electric Authority our net income failed to rise.

State !cgislation to improve for sale of an additional 16.5 per-Although operating revenues utility regulation in Georgia was cent interest in Plant Vogtle.This went above the $2 billion mar k signed into law in 31 arch 1981.

would reduce Georgia Power's for the Grst time, net income This regulatory reform law speci-ownership to 34.2 percent.

dropped from a 1980 total of 6es, among other things. the use We continued our Gre-year

$193 million to $172 million.

of future projections in support-program to upgrade power plant With new retail rates in effect but ing ate cases.The Companys availabihty and ef6ciency. For the a few weeks of the year, operating 1981 rate case hearings were third yearin a row. fossil plant revenues grew only 11.5 percent conducted under the new law.

availability was near 80 percent while operating expenses nise With Southern Company Plants Wansley and Ibwen, two 11.5 percent. Electricity sales Services as ouragent. Georgia majorcoal-Gred generating plants increased 3.1 percent.

Power has had considerable suc-located in northwest Georgia.

In April 1981 the Company cess in selling power to utilities were ranked among the nation's 61ed a request for $316 million in neighboring states. Income best power plants in operating of additionalannual retail reve-from these off-system sales im-ef6ciency. This continuing suc-nues with the Georgia Public proves our earnings and helps cessin plant operationsis a major Seirice Commission (GPSC).

sustain our construction pro-factorin our Company's ability During rate proceedings, gram in the face ofin6ationary to provide competitively priced the Company reached an un-costs, meaning ultimate savings electricity.

precedented agreement with the for Georgia customers. And since The availability and effi-GPSC staff, Consumers' Utility the purchasing utilities often ciency of Georgia Power plants Counsel and the Georgia Poverty rely heavily upon oil, energy sav-enabled us to meet record peaks Rights Organization fora $265.2 ings for the nation also result.

in both summerand winter.The million increase in annual reve-As the year ended, we were record summer peak occurred nues.The Company agreed to preparing to bring the first unit July 16, when the territorial make every ef6)rt not to file for at Plant Schererinto commercial demand hit 11.514 megawatts.

j an additionalincrease hefore operation. Georgia Power's joint A winter record of 9.193 mega-January 1983 harring6nancial participants in this 818-megawatt watts was set in Januaiy 1981.

emergencies.The Commissioni unit are Oglethorpe Power Cor-but this record was overshad-acceptance of this agreement poratinn. the 31unicipal Electric owed by a demand of 9.797 shouki provide ratepayers with Authority of Georgia, and the megawatts in January 1982.

price stability in 1982, while City of Dalton.The scheduled The July demand was met 2

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thicc w n k.s James II. Miller, Jr. hhert W. Scherer Cleativ a highhght iil an s

c\\cli! fill vcitl wa5 t Ic IllillhlNc" inent audit ist (;ciergu l' wcl the htolding during the yc;1r. and subshhan < >t The Si>uthern bv i hcodoic Itarn and.\\.ssoco we are dehghted hv the recogne Co m pa n t.

ates presented to the (,corgu tion it has received for its ad-It is a sad duty to recorJ the I

l'ubht Sen Ice G im nusso in i nn va nced energi-sas ing leatu res deat h < >l Chiti >rd 11..\\lc.\\lan us..\\

.\\ lay 21.19Xl.

and for Ps uintrihullon to the ploncer W the clcClnc utibl\\ HI-( ivela!I. llle ;tudll It blilld vitality Iil U)wlittlw n /\\llanta.

dllNll'\\..\\ll..\\lc.\\lillius wa5 presl-t he management t il t he (a or-k 1982 hegan. the lioard of Jent of (;c rgi. Pouer Company gia l'ilwer b inlpant til he pril-l )irccli tr5 n1;tdc lich c\\cclitnc I t'i 'll l lilII ti, }!bl aild illIlle gicssnc and energetic The

issignments The new appi,ml.

Sout hcrn, bmpant f roni 1930 allJit iiilted mariayeriiciit s "sig iiiclits wcie ti, l' Q i lulh ant an tin 1phsh meills"In 10 ihcrl \\\\ N hcret. ch.ur-The at hievelnclits,t 1951 sclIllla pidill c;1p.h it\\ lild liegt it l-lihP1 f il t he hi #ard and ( !ncl ci>uld niit have been reached at nia cont racts to sell encias. m csecutneotlicci:

wlthiint the skill and dedication hiildmg ti,nsuiner cln t ricitt

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su pp.,r t iil i,u r iiivest< >rs b, west alid t he b #Nlp.HB Is m.

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protements in tapital and hu-10 chard J Kclk. and "IN man icsouru productn it\\ 16

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Georgia Powerstrengthened its As an indication of system residential energy audits were position in the forefront of the dependability, the coal-fired performed, offering customers electric utility industry during plants that are the mainstay of practical measures for cutting 1981.The Company offered elec-Georgia Power's generation facil-energy usage.The numberof tricity at prices among thelowest ities retained an availability rate single-family homes being con-in the nation and maintained a ofjust under80 percent.The structed under rigorous Good high levelof service to its 1981 Theodore Barry and Asso-Cents standards in the Georgia customers.

ciates audit founJ Georgia Powerservice territory rose to in national rate surveys, Power's generation practices to 24 percent. For multi-family Georgia Power's prices consis-he "well ahead of the utility units,the figurejumped to tently are in thelower brackets.

industry norm" 47 percent.

In a recent study conducted by Anotherindicationofsystem An aggressive program was the National Associatior, of Reg-reliability occurred in July of launched to attract industrial ulatory Utility Commissioners, 1981 when peakdemand records and commercial customers to for example, only 26 of 216 util-were set on four consecutive the Georgia Powerservice area.

ities listed residential rates lower days of scorching summer tem-The 1973 GeorgiaTerritorial than Georgia Power's. Other sur-pemtures.The previous record.

Senice Act permits customers veys repeatedly have produced set in Julyof 1980,was topped locating outside municipalities, similar results. Even with the July 13 and each day thereafter and having a demand of 900 rate increase that became effec-untilthe peak hit 11,514 mega-kilowattsor more,to select the tive in late 1981. Georgia Power's watts on July 16. Service was electricity supplierof their prices are expected to stay well maintained despite the fact that choice.Three-fourths of the cus-below the nationalaverage.

the heat wave came in the midst tomers making such a choice in Electricity sales during 1981 of an 18-day strike of the Com-1981 selected Georgia Power.

totaled 47.7 billion kilowatt-pany's electrical workers.Only on One such company, Augusta hours, an increase of 3.1 percent.

the first record-settingday did Newsprint,willbe Georgia Revenue per kilowatthour was Georgia Power buy electricity Power's largest customer when 4.2 cents-an increase of 8 per-from other utilities in order to its plant goes into full operation cent over 1980.The percentage meet the huge customerdemand.

in 1983.

increase still remains well under When the energy needs of A major achievement for g

increases in the Consumer its 1.2 million customers are Georgia Power's 13,500 em-p Price Index.

fully met, Georgia Poweris able ployees during 1981 was a new to sellelectricity to neighboring Companywide safety record.

utilities outside the Southem Only 23 lost-time accidents were Specially trained crew members electric system.Severalof the recorded during a busy, eventful work on the high voltage transmis-purchasing utilities rely heavily year-a 64 percent improvement sion lines that carry electricity to upon expensive oil to generate over 1980.The previous best homes, businesses and industries electricity, so the off-system sales Companywide safety record was across the state. Inset: Coal-fired produce income for the Georgia set in 1951.

plants, such as I'lant flowen, gener-Powersystem and simultane-continued ated NS percent of Georgia power s ously contribute toward the electricity m 1981.

nationalenergy goalof reducing oil consumption.

A vigorous Georgia Power program for promoting residen-tialenergy conservation con-tinued in 1981. About 8,000 5

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l New Regulatory I.aw nificant steps intended to The agreement called for strengthen the Commission a rate increase totalingiust over A significant new regulatorylaw staff. A director of utilities

$265 milhon Georgia Power was passed by the 1981 Georgia position was established to co-pledged not to appeal the 1.cgislature and signed by ordinate the Commission's prep-amount to the courts and, har-the governor.

arations for rate requests. A ring financialemergencies. not Widely known by itslegis-utility finance section wascreated to seek another rate increase lative name, Senate Ilill 29, the to make an independent evalua-until 1983.

newlaw stabilizes procedures of tion of electric utility rate filings With the limit on(be Public the Georgia Public Service Com-and tosupplytechnicalassistance Senice Commission's tirne in mission and strengthens the to the Commission.

which to reach a decision run-Commission staff. Georgia Passage of the legislation in ning.out, the Commission re-Power's 1981 rate case was con-February culminated 16 months ject (d the agreement in late ducted under the new law.

of studyand debate of regulatory October. Ily a vote of three to The most important pro-reform by the Cencral Assembly.

two. the Commission awarded vision of the legislation specifies Senate Ilill 29 was signed into enly $180.5 million, a rate in-that rate cases will be based on law March 2,1981.

crease of11.4 percent estimated future costs.The useof Georgia Powerimn ediately such a future test period pro-Hetail Hate Increase registered its dissatisfaction.The vides the Company the oppor-Company announced plans to tunity to match more closelyits in April 1981 Georgia Power appeal the decision and file for prices with related costs, asked fora retail rate increase an additional rate increase.

Anotherimportant pro-of $346 million-a 22 percent While these Ce mpany plans vision requires normalization increase.

were going fonvard.an unusual treatment fordeferred state and in seekinga higher price public outcry against the Com-federalincome taxes.This pro-for electncity, Company offt-mission decision spread across cedure has been followed by the cials pointed out that Georgia the state. Editorials and other Public Senice Commission in Power's rates would remain public expressions criticized the the past, among the lowest in the nation Commission for forfeiting an op-A third provision covers the even if the requested amount portunity to stabilize retail elec-division of pn>ceeds from the were granted by the Public tricity rates forat least a year.

future sale of generating plants.

Service Commission.

The Commission reconsid-It ensures that customers who Ilearings in the case opened cred itsdecision andin November contributed toward carrying July 20,and six Georgia Power approved an increase of $265 costs of a plant's construction Company executives were among million. Relieved of the cost and will share proportionatelyin any those testifying. Altogether,our uncertainties oflitigation,the profit from a sale.

witnesses supplied some 1,000 Corapany pledged to carry outits Senate Bill 29 took sig-pages of testimony and exhibits.

commitment to seek no increase in September, after all tes-in retail rates during 1982.

timony had been submitted.

The additional $85 million The Georgia State Capitol serves Georgia PowerCompany entered granted in November brought as headquarters for the General into an unprecedented agree-the total overall increase to Assembly during its annualin day ment to settle the case. Joining 16.7 percent.

session. In IW1 the body passed in the agreement were the Public continued legislation that stabilizes utility gen. ice Commi.ssin staff, the regulation in Georgia.

State Consumers' Utility Counsel, and the Georgia Poverty Rights Organization.

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Power Sales to Other Utilities to meet Georgiak future electric-observed "the breadth and va-ity needs, pn>ducing at the same riety of programs that have been A growing source of revenue for time jobs and tax revenue for carried out simultaneously are the Georgia Power system is elec-Georgia communities.

certainly unusual."

tricity sales to other utilities.

Acknowledging that man-Revenue from electricity 31anagement Audit agement realizes there stillis supplied under contract to other n>om for improvement, the aud-utilities, for resale in their re-in 1980 the Public Service Com-itors made several recommenda-spective territories, totaled $82 mission ordered a management tions. Upon receiving the report, million during 1981. In Ihe audit of Georgia Power and se-the Company began immediately previous year, the total was lected Theodore llarry and actingon these suggestions

$57 million.

Associates to conduct the study.

for improvement.

About two-thirds of these llarry and Associates began contractual deliveries. made fn>m work near the end of 1980. Aud-333 Piedmont power available after Georgia itors made field trips to various needs are met, went to Florida Company offices, plants, and Georgia Power's new corporate utilities. As a result, the Florida construction sites and con-headquarters became a reality utilities were able to avoid using ducted some 400 interviews.

in 1981.

costly petroleum to generate Using a comprehensive Early in the year, headquar-electricity, and the sales thus work plan appn>ved by the Com-ters personnel numbering about contributed to national energy mission,the auditors prepared 2,000 began moving into the goals of conseiving oil.

an in-depth report that was pre-buildingin gradual stages.The Contracting utilities pur-sented to the Commission in moves were completed before chase power when Georgia 31ay 1981.

the year ended.

Power s plants are able to gen-The llarry firms conclusion The building's energysav-erate electricity at a lower cost was that the Company s manage-ings are projected at $372.000 than the utilities would incurif ment is" progressive and ener-a year. 31 ore valuable than these they used their own plants.

getic."The auditors found,in monetary savings, however,is the bleanwhile, income fnim con-general, that the Companyis building's contribution to the tractual sales to other utilities abreast ofindustry develop-studyof energy conservation and helps Georgia Power continue ments, effectively servingits energy efficiency in commercial its plant construction pnigram customers, mindful ofits busi-buildings.The new corporate ness responsibilities,and largely headquarters has thelargest solar movingin the pniperdirections.

system of any commercial build-Georgia power operates and main-Negotiations to sell plant ingin the nation, perhaps in the tains more than 11.nnn miles of capacity to other utilities were world. Its 1,482 solar collectors transmission lines which crisscross praised. Residential rates were have been installed on an acre the state. Inset: The Company's declared to be"among the in-and a halfof rooftopon the build-new load control center fcatures dustrys lowest." Opportunities ings low-rise portion and are i

i i I a di wed for improvement yvere seen by expected to begin operatingsoon.

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the auditors as bemg"aggres-This expenmental, compu-lighting so operators can track elec tricity use more efficientiv and sively" pursued.

terized system is made possible, under less stress.

The: aditors took particular in large part, by a $565.000 grant note of a"nalanced improvement continued effort"within the Company.

"Although few of the improve-l ment programs are unique."they 9

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l in>m the U.S. Department of zation of an area known as Company arranged for another Energy. Solar is expected to sup-liedford l'ine.

1.000 or so youngsters to attend ply up to 15 percent of the build.

Reporters from as faraway professional baseball and soccer ingh total energy needs.The as london have written articles games at Atlanta Stadium. Al-system also will supply valuable about 333 l'iedmont.The archi-though manyof the N>ysand knowledge and experience about tects,lleery and lleery won an girls lived within the shadow of how to use solar energy in a large award from the Georgia A3soci-the stadium some had never commercial building.

ation of the American Institute been inside to witness an event.

Iloth the location and de-of Architects. And Georgia l'owtr The Company embarked on sign of the new corporate head-won fir <t prize from the South-a pilot program in 1980 to pro-quarters are aimed at energy castern I:lectric Exchange for videjobs, coupled with special efficiency. The location along-energy efficiency in a new com-instruction, for youth. In 1981.

side an Atlanta expressway mercial structure.

the program was expanded to makes it unlikely that any other turnish 10-week work exper-high-rise buildings will be con-Summer Youth I'rogram iences in semi-skilled jobs to structed near enough to inter-about 200 youths between the fere with 333 Piedmonts solar Georgia l'owerk move into a new ages of 18 and 23. Weekly in-system.The inverted staircase corpomte headquarters building formation and personal develop-design of the buildings south at 333 l'iedmont Avenue brought ment sessions complemented side and the reflective glass ex-it in closer contact than ever theirworkexperiences. Addi-teriorare fashioned to make the with the inner-city neighbor-tionally, the day-camp programs best possible use of sunlight in hoods ofdowntown Atlanta. At provided employment forabout b >th summer and winter.The the same time. government cut-65 youngsters between the ages 24-story building is expected to backs in social and economic of 14 and 18.

need only half the energy used programs sharpened our aware-In all. the cost to the Com-by comparable structures in the ness that private enterprise must pany for the summer program Atlanta area.

shoulder greater responsibility was $250.000. It was money well Another factorin selecting for community needs.

spent in terms of the Company's the site at 333 Piedmont was our Accordingly. Georgia l'ower future and that of the commun-commitment to maintaining the Company established a three-ity and state. Plans for 1982 call economic and socia! vigorof pronged 1981 SummerYouth for expanding the program to di-downtown Atlanta.The new I'rogram that involved a total of visions outside Atlanta.

building is spearheading revitali-3.000 Atlanta area youngsters.

Information about Georgia The three programs reached Powers program has been sup-boys and girls from kindergarten plied to the liarvard University Solar collectors on the low rise to college age.

Graduate School of Ilusiness roof of Georgia power's corporate We worked with the city Administration for use as a case headquarters are part of the larM-government, a DlCA. a lloys study of corporate social respon-est solar system of any commercial Club.a Girls Club and others to sibility. The Company has sent building in the nationg inset: The furnish summer day-camp pro-inthrmation about the pn> gram to Lompany's sponsorship of summer grams to 1.400 Atlantans be-other organizations and busi-activities brought smiles to some tween the ages of four and 14.

nesses interested in adoptingit.

J.On0 Atlanta area youngsters.

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ities, the youngsters went on educational field trips to such places as the State Capitol the Atlanta Zoo and lake Oconee.

With the cooperation of Eco-nomic Opportunity Atlanta, the II

Selected Vinancial Data <d<alarsin amusamds>

I K ars Ended /Arember3/

1981 1980 1979 1978 Condensed Income Account:

Operating itevenues.

$ 2,015,810

$ _ l h08.;t08

$ 1519.912

$ 1,175.021 Operating Expenses:

Operation and maintenance.

1,326,339 1,087,389 935,210 921,465 I)epreciation and amortization.

157,336 153,215 133.888 118,208 i Taxes other than income taxes.

83,780 73.451 67,736 ti3.361 Federal and state income taxes.

141,196

__ 178,012

_ 118,424_

_ 126.43'l

'liital operating expenses.

_I_,708.671

_ l.492.120

. l.,231258

_1..?31p90 '

Operating income.

307,139 316.288 261,681 243.03)

Other Ineome, Net.

76,222 71.974 67.119 52.510 Income liefore Interest Charges.

383,361 388.26" 131,803 293.5%i Net Interest Charges.

170,901 157.693 151.503 129.039 Dividends on i' referred Stock.

40,366 35,221 31,786 30,480 Net income After Dividends on Preferred Stock.

_$_ 172,091

$ 193.315 I13.512 1,'Ki,014 '

Cash Dividends Declared on Common Stock.

131,000 136.400 131.100 119.225,

iteturn on Average Common Equity (percent).

12,41 15.47 12.21 12.01:

Total Assets.

$ 5,883,610

$ 5.288,50 t

$ 4,817.197

$ 4.524.415 Capitalization:

Common stm k equity.

$ 1,458,240

$ 1.314.315

$ 1.210.868

$ 1.173,036 l' referred stock.

357,844 357,841 357.811 307,844 Preferred stock subject to mandatory redemption.

138,674 67,500 71.250 75,000 inng-term debt.

2,667,372 2.326.627 2,168.272 1.933.553

'listal.

S 4,622,130

$ 4.066.286

$ 3.808.231

$_ 3,509.43' Accumulated Deferred Income Taxes.

628,602

$ 560.403

$ 501.009

$ 438.88 Accumulated Deferred Investment 'Ihx Credits.

278,488

$ 229.639 193,980 181.96 Cross Property Additions.

730,454 5 640,939

$ 607.616

$ 500,711 Kilowatthour Sales tin thousandu itesidential.

I1,153,588 11,297,518 10,310.375 10.829,48s Commercial.

9,464,443 9.184,086 8.735.917 H,827,28 l

1ndust rial.

I6,813,163 16.299.666 16.225,971 15.682.02 Sales for res;de.

7,361,961 7.127.310 7,632,216 8.580.21 291.700

_..__24 6.035 226 _.11 Other.

__30.._6._,72. _4

'listal territorial sides.

45,099,881 41.203.280 43.180.561 44.145,11 S. des to utilities outside territory.

_ 2,612,547

_ 2.102.161

_ 54128 i

'liital kdowatthour sales.

47,742,428 46.303.741 43 2.34.692

.41.14_51_1 1

Operating llevenues:

llesidential.

510,001

$ 514.860

$ 414.500

$ 417,69 Commercial.

499,653 454,019 386.176 369.80 Industrial, 608,713 517.256 488.014 419,71 S< des for res;de.

251,572 203.030 201.280 213.31 Other.

15,428 14.169 10,971 9.K l

' Intal revenues from territorial sales.

1,915,370 1.735.361 1.503.971 1.460.31 Itevenues from s; des to utilities outside territory.

82,018 56.911 1.261

'liital revenues from s. des of electricity.

1,997,418 1.792.275 1,503.232 1,460.39 Other revenues.

18,392 16.133 14.710 14.62

'listal operating revenues.

$ 2,015,8 t 0

$ 1.808.108

$ 1,519.94'?

$ 1.47102 Customers lend of year).

1.249,126 1.215.714 1.192,770 1,161,82 Employees (end of year).

13,451 13.031 12,522 12.00 Average llevenues Per Kilowatthour-Total Sales (cents).

4.18 3.8, J.48 3.:

Average Cost of Fuel Per Kilowatthour Cencrated (cents).

1.66 1.51 1.12 1.3 12

Worgia Ibuer Company 1977 197ti 1975 1971 1973 1972 1971

$ 1.301.237 5 1.170.016

$ 1.079.175

$ 787.919

$ 603.116

$ 511.361

$ 429.414 813.987 tiW.933 615.313 515.49, 338.!Hi6 287.370 216.993 1iPJ.9 % i 100.317 89.677 80.087 68,532 57.0%1 49.403 58.939 53Ji30 46.518 37.203 30.806 27,151 26.30 t i 18.51 t 91.615 109.007 8.213 33.I45 29.121 20.870 1.10!.381 939.575 860.57.i tilljHH) 471.169 400.986 313.570 l

199.833 230.471 218.600 146.919 131,1i47 110.375 83.844 1i7.1G) 62.Sa,

, a.188 63Ji31 17.939 32.935 22.093 267.233 293.328 293.788 212.350 179.586 143.310 107.937 125.087 141.348 136.207 126.Gi3 91.525 67.866 52.070 30.180 27.862 18.451 17.190 17,190 12.299 10.934 1)).686 121.118

$ 139.130 68Ji93 70.871

_$ _.._63.145 41.H:]

109.100 100.400 100J M)0 75.700 62,100 51JHH) 36.500 10.5I I2.06 14.90

8. I6 9.86 10.59

9. I8

$ 4.166.788

$ 3.901.519

$ 3.615.889

$ 3.4 56.iHi3

$ 2.778.567

$ 2.307.824

$ l.874.112

$ 1.086.217 5 1.038.! Nil

$ 969.037

$ 698.397

$ 785.402

$ 652.631

$ 510.444 307.811 307.811 257.841 257.811 237.814 257.841 182.811 75.000 75jHN) 75jHH) 1.880.798 1.827.170 1.757.541 1.514.705 1.217.160 1.102.932 878.079

$ 3.3 49.889

$ 3.219.275

$ 3.039.442

$ 2.670.916

$ 2.290.406

$ 2.013.427

$ 1.601.36j 370Jiut

$ 318.400

$ 263Jti5 18 tJi91 152.013 125.389 105.907 130,8 ii 110.780 73.282 31.537 39.573 31.t82 23.566

$ 531.153

$ 401.135

$ 438.097

$ 662.683

$ 521.397 5 47%.317

$ 386.486 10.170.674 9.512.59

9.260.03) 9.013.9Gi 9.147,152 8.193.156 4,,,3.!Hi7 10.278.01

9.712.599 8.793.788 8.508.118 8.506.755 7.686.139 6.924.331 13.236.290 12Ji29.2ti3 11,654.106 12.296202 12.270.130 11.390.881 10.432.550 9Jil7.229 9.262.131 9.095.581 8.590.0 G 8.305.918 7.146.068 6.297,t99 216.621 213.038 20 tJHFJ 197 Jai 5 181.263 175.388 168.631 43.818.826 11.329.966 39.009,518 38.605.396 38.414.518 31.591.93a 31.597.001 157.013 211.246

= = = -

=: -

38.414.518 31.748.918 31.808.247 43.818.826 11.329.966 39.009.518 38.603.3!Hi

...=

====-

= = = =

$ 358.933

$ 315.226

$ 301.541

$ 223.417 183.171 153Jil4 134.534 385.889 335.40a 317.879 233.312 187.62) 158.709 132.932 328.407 290.983 275.591 191.962 143.129 121.132 102.170 203.914 191.110 166.777 122.31h

,4.527 61.938 47.764 8.937 8.512 8.012 6.688 6.327 5.689 SJ)o2 1.286.100 1.161.266 ljHi9.800 780.725 5!Ni 778 503.082 422.702

'")77 1.813 1.2Ni.100 1.161.266 lj Hi9.800 780.725 596.778 506.059 421.515 15.137 8.780 9.3,a

, 194 6.338 5.302 4.899

$ 1.'101.237

$ 1,170.016

$ 1.079.175

$ 787.919

$ 603.116

$ 511.361

$ 429.414

==_

=_

=

==

==

1.138.170 1.112JHi3 1.083,646 1.078.223 1.031.842 1.018.684 988.146 11.185 10.19%

9.05

9.385 8.599 8.224 7.834 f

2.94 2.81 2.74 2.02 1.53 1.46 1.33 1.27 1.12 1.11 0.91 0.53 0.47 0.15 13

I Management's Discussion and Analysis of Results l

of Operations and Financial Condition

(

liesults of Operations an increase of 22% over 1980 and 42% over 1979. Fuel costs alone have increased 36"6 from 1979 to 1981. Ihne-Georgia Power's net income after dividends on preferred ever, under fuel cost recovery mechanisms, the Company stock for 1981 was $172.1 million.This is a decrease of recovers the actual cost of fuel burned and the energy

$23.3 million or 12% from 1980 earnings, but an increase portion of purchased pmver transactions. Net purchased of 18%over 1979 results.

pmver expenses increased from $4.3 million in 1980 to i

l Operating revenues have increased in each year, prin-

$73.6 million in 1981. This increase was primarily the cipally as a result of rate increases, recovery of increased result ofincreased capacity payments and reduced energy fuel costs, and increased energy sales in 1980 and 1981.

sales to the Southern electric system power pool.

Retail revenues over the period 1979 through 1981 in-Increases in depreciation and amodization each year creased 28% and in 1981, total revenues exceeded $2 are due principally to the continued gnnvth in depreciable billion for the 6rst time.The most significant increase for plant in senice.The composite straight-line depreciation this period was in 1980 which reflected a full year of in-rate was approximately 3.7% in 1979. 3.8% in 1980 and creased retail rates awarded in January of that year. Also 3.7% in 1981.

in late 1981, the Company was granted a $265.2 million Fluctuations in income taxes resulted from changes annual increase in retail rates. Approximately $23.6 in income before income taxes. Federal and state million was billed in 1981 as a result of this rate increase.

income tax provisions are detailed in Note 5 to the finan-Resale revenues increased by 62% from 1979 to 1981.This cialstatements.

increase was primarily the result ofincreased energy sales.

The allowance for funds used during construction padicularly to off-system utilities, and the full effect of represents the cost ofcapital charged to utility plant under increases granted in 1979 and 1980 to the rates for resale construction which is presently excluded from rate base.

territorial customers. See Note 2 to the financial state-The equity portion of this credit represents.non-cash in-ments for a further discussion of rate matters.

come. In addition, nonnalization of the income tax effect of Total Company kilowatthour sales increased 7% in the debt portion results in a non< ash charge. A significant portion of current cash dow results from the allowance of [

1980 over 1979 and 3% in 1981 over 1980.This is a cumula-tive increase of 10% from 43.2 billion in 1979 to 47.7 billion a retum on and recovery through depreciation of pre-in 1981.The rate ofincrease in energy s: des has declined viously capitalized amounts.The allowance for funds used due to customer consenation effods and the increased during construction, net ofincome taxes, as a percent of ability of territorial resale customers to meet their own net income after dividends on preferred stock ainounted energy requirements.The major cause of increased kihu to 42% in 1981. 29% in 1980 and 41% in 1979. See Note I watthour s: des during 1980 and 1981 was increased to the financial statements for further discussion of Allow-energy sales to neighboring utilities. The combined ance for Funds Used During Construction.

demand of the Company's customers and the customers Doe to increased long-term borrowings and higher of Oglethorpe Power Corporation, the 31unicipal Electric interest rates, net interest charges have increased 13% to Authority of Georgia, and the City of Dalton reached new S170.9 million in 1981 from $151.5 million in 1979.The summer and winter peaks of 11.514 megawatts and 9,195 Company's Grst mongage bond issues in 1981 carried megawatts respectively. This surpassed the previous peak interest rates ranging from 16.125% to 17.5%, up substan-demands of 11,154 and 8,626 megawatts respectively.

tially fnim interest rates of 14.5% for b<mds solJ in 1980 Total operation and maintenance expenses, includ-and 10.5% and 11% for bonds sold in 1979.

ing fuel and purchased power, continued to increase in Intlation has continued to have a significant adverse 1981 due to increased energy production and the effects effect on the Company due to regulatory constraints and of infiation.These expenses totaled $1.3 billion in 1981, the large investment in utility plant. See Note 13 to the financial staten ents for supplementary information con-cerning the approximate effects of in0ation.

The results of operations discussed above are not necessarily indicative of future earnings. It is expected that higher operating costs and canying charges on in-creased investment in plant. if not offset by propodionate increases in operating revenu2s (either by periodic rate increases or increases in sales), will adversely affect future earnings. Increases in sales in the future will be affected by the extent of contracts for the sale of energy to neiph-boring utilities, energy consenation practiced by cus-tomers, the elasticity of demand, the weather, and the rate of economic ewth in the Company's service area. In re-cent years, camings have tended to decline during periods following the full 12 months' realization of general mte increases and prior to the receipt of further rate increases.

14

FimincialCundition two times annual interest charges on first mortgage bonds is required for the issuance of additional bonds and Total gross property additions for the period 1979 through one and one-half times annual interest charges and pre-1981 totaled 52 billion.These additions included construc-ferred stock dividends is required for the issuance of addi-tion of major generating projects. and the c instructing tional preferred stock.The coverages for the years ended and upgrading of transmission and distribution lines.

December 31.1981 and 1980, were 1.99 and 2.86, re-substations and other facilities. I'nipe 1y additions were spectively 6er bonds and 1.50 and 1.81. respectively, for 6nanced primarily by a net increase of 5(iO9 milhon of preferred stock.This temporary deterioration in coverages long-term debt. 5114 million of preferred stock. the sale is primarily the result of recent issues of preferred stock of 5115 million of undivided interests in certain genera-and first mortgage bonds at increased dividend rates and lion facilities, and from common equity contributions by mterest costs to the Company and the lag between the The Southern Company.The balance of the funds was granting of rate increases and the resultant impact on provided fnim internal sou rces. See Statements of Sources earnings. It is anticipated that rate increases recently of Funds for Cross l'roperty Additions for further details.

approved will restore these coverages to levels which will The Company's capitalization ratios have remained permit scheduled sales of securities.

approximately the same in recent years, but the composite The ability to maintain these coverages and to gen-interest rate on long-term debt has increased from S.Ol"o erate funds for day-to-day operations and to finance the at I)ecember 31.1978 to 9.39"4 at I)ecember 31.19S1.

construction program is primarily dependent on receiving and the composite dividend rate on preferred stock has adequate and timely rate increases.The Company is com-increased from 7.9fi"o to 9.19"o during this same period.

mitled to maintaining its financial integrity by continued At I)ecember 31. 1981. the Company had $33(i.1 emphasis on operating efficiency and by vigorous pursuit million of tempormy cash im estments to assist in meeting of rate increases when appropriate. Should the Company its short-term cash requirements. To provide increased be unable to obtain funds from external sources. including financial 6exibility, the Company has $(iO3.950.000 in the proposed sales of undivided interest in certain gen-lines of credit of which 5550.000.000 is in revolving crating facilities, in amounts which, together with inter-credit commitments covering a period of three years and nally generated funds, will be adequate to cany out the 555.950.000 in lines of credit subject to annual renewal.

present construction program, delays or cancellations of No short-term bank loans were outstanding at year end.

certain projects could become necessary.

The Company estimates that it will require approxi-mately $3.2 billion for gross property additions during the period 19S2 thn> ugh 1981.These estimates exclude amounts applicable to portions of facilities sold or pni-posed to be sold as discussed in Notes 3 and 4 to the l Gnancial statements.The construction pnigram is subject to revision depending upon such factors as the granting of timely and aJequate rate increases, revised estimates of costs, revised load forecasts, and the availability and cost of capital. At I)ecember 31.1981. substantial purchast commitments were outstanding in connection with the construction program and 6>r the purchase of coal and f nuclear fuel under long-term contracts.

In addition to the funds required for the construction program. approximately 5(i5 million will be required by the end of 1984 in connection with the sinking fund requirements and maturities of long-term debt and pre-ferred stock subject to mandatory redem;. tion as discussed in Notes 7 and 8 to the Gnancial statements.

It is anticipated that the funds required will be derived itom sources in thrm and quantity similar to those used in the past. Ilowever, the type and timingof Gnancing will depend on market conditions and maintenance of ade-quate earnings. A financial goal of the Company is to gei,erate internally a greater portion of the funds needed for total gross property additions.

'Ib issue additional Grst mortgage bonds and pre-ferred stock, the Company must comply with cei1ain cam-ings coverage requirements contained in its mortgage indenture and corporate charter. An earnings coverage of 15

U3l311Ce ShcCLS in thousands Georgia lbuerCompany

\\

/Arember31 1981 1980 ASSETS I;tility l*lant I'lant in service, at original o>st....

54,978,429

$4.710.260 Irss-accumulated provision for depreciation.

1,270,841 1,141.263 3,707,588 3.568.997 Nuclear fuel.at amortized o>st..

100.720 54.831 Construction work in progress (Note 3).

1,1(i6,482 810.855 T>tal.

4,974,790 4.434.683 Other l'roperty and Investments Southern Electric Generating Company (Note 4).

16,400 16.4(H)

Nonutility property. net..

3,38_l, 3.299 1

'Ibtal.

19,781 19.699 Current Assets Cash.

8,059 7.731 Temporary cash investments. at oist.

336,100 204.400 iteceivables-Customer accounts receivable.....

161,297 157,486 Otheraccounis and notes receivable.....

50,771 136.323 Intero>mpany.

12,237 13.886 Accumulated pnivision for unco!!ectible aco>unts.

(2,000)

(2.000)

Fossil fuel stock.at average aist.

257.101 265.352 31aterials and supplies. at average cost.

37,013 30.375 l' repayments.

3,909 1.744 Total.

864,487 818.3 5 Deferred Charges Debt expense, being amortized.

7,631 6.771 Sliscellaneous.

I8,921 9.052 Total.

26,552 15.823 Total Assets.

$5,885,610

$5.?88.53 CAPITALIZATION AND LIAlllLITIES Capitalization (See aco >m p;mying statements)

)

Common stock equity.

$1,458,240

$ 1.314.315 l' referred stock.....

357,844 357.844 l> referred stock subject to mandatory redemption (Note 8).

138,674 67.500 I;mg-term debt..

2,667,37')

')126.627 Total.

4,622.130 4.066.286 Currer.t Liabilities Preferred stock sinking fund requirement (Note 8).

2.575 fong-term debt due within one year (Note 7).

22,502 22.796 Aco>unts payable-Intercompany.

12,760 14.808 Other.

143,571 165.045 Itevenues to be refunded.

1.569 Customerdeposits.

28,340 27.229 Taxes accrued-Federal and state ino>me..

17,163 74.330 Other.

36,515 34.230 Interest accrued.

66,594 54.855 bliscellaneous.

17,020 14.197

'lbtal.

344,465 411.631 Deferred Credits. Etc.

Accumulated deferred income taxes....

628,602 560,403 Accumulated deferred investment tax credits.,

278,488 229.639 31iscellaneous.

I1,925 20.542 Total.

919,0Hi Commitments and Contingent 31atters (Notes 2. 3. 4 and 11) 810.584 Total Capitalization and Liabilities.

3,885,610,

$.}.288.501 1he aco>mpanying notes are an integralpart afthese statements.

16

Statements of Capitalization in thousemas ccmyia tuuvr company IA ccmber31 1981

% of Total 1980

'b of Total Common Stock Equity Commun stock (without gur value) authorized 15JHN).0(H) shares, outstanding 7.761.500 shares.

$ Mi,250

$ 341.250 Otbei paid in capital.

799,800 696.800 l*remium on pn Jerred stock (Note 8).

2,703 1.636 Earnings retained in the business ( Note 10).

311,487 271.629 Total common stock equity.

1,458,240 31.6%

1.314.315 32.3'b Cumulative l' referred Stock (without par value) authorized ll.000J H N) shares, outstanding 6.578.439 shares Class

$100 stated value-

$ 160 to $6.60 Series.

I17,844 117.844

$7.72 to $7.80 Series.

105,000 105JHH)

$b.20 to $9.08 Series.

33,000 33.000

$25 stated value-

$2.52 Series.

50,000 50.000

$2.56 Series.

50,000 503HH)

Total (annual dividend requirement

$27.330.000).

__3_57_.,_8_4_ _4 7.7 337.844 8.8 Cumulative l' referred Stock (without par value),

subject to mandatory redemption (Note 8) authorized 6JHHUN)0 shares.

outstanding 5.516.930 shares

$23 stated value-

$2.75 Series.

63,674 70.075

$3.76 Series.

75,000 (annual dividend requirement $18.284.000) lxss amount due within one year (Note 8).

2.375 Tbtal. excluding amount due wit hin one year.

138,674 3.0 67.500 1.7 Long Term Debt l'irst mortgage bonds (Note 7)-

l 31aturity interest Rates June 1.1981.

3%.

20.000 July 1.1982.

3W.

20,000 20.0(H)

April 1,1983.

3%.

8,073 8.073 April 1.1981.

3 N"n.

I1,000 11JH)0 Stay 1.1983.

3%.

I1,988 11.988 April 1.1986.

3%.

12,000 12.000 1987-199).

. 4 % to 17%.

179,978 54.978 1092.ltr.Hi.

. 4 % to 5 %.

I62,868 162.868 1997-2001

. 6b"n to ll%.

617,269 622.239 2002-2(HHi.

. < % to 11M.

630,968 630.968 2007-2011

. 9% to 16%.

675,000 500J H)0

'Ibtal first mortgage bonds.

2,329,144 2.034.114 Other long-term debt (Note 6).

379,92a 309.175 Unaraortized debt premium (19,195)

(13.866)

(discount) net.

~ - - - -

'lbtal long-term debt (ann ual interest requirement $231.910JH H)).

2,689,874 2.319.423 less amount due within one year (Note 7).

22,502 22.796 I;mg-term debt. excluding amount due within one year.

2,667,372 57.7 2.326.624 a n.2 Total Capitalization.

$4,6'!2,130 100.0%

%06fi.'?86 1 t H ).0",

The accompanyiny notes are an integralpart of these statements.

17

r Statements ofIneome in t/mu. sam /s

<;eoryta nnwr 0>mpany

) Pars linded/Arember3/

1981 1980 19 3 Operating Hevenues.

52,015,810

$ 1.X08.108

$ 1.519.912 Operating Expenses Operation-l'ucl.

811,088 716.566 a98.23 i l'urt based and interchanged power. net.

73,566 4.321 28.519 Other.

280,351 222.133 182.386 41aintenance.

161,351 111.311 126.031 Depreciation and amortization.

157,336 153.215 133.XX8

'ihxes other than income taxes.

83,780 73.451 67.736 l'ederali.nd state income taxes (Note 5).

_ l41,19fi 178.032 118.12i_

'lbtal operating expenses.

1,708,671 1.192.120 1.213.238 Operating income.

307,139 316.288 261,681 Of her Income Allowance for cquity funds used during construction.

48,690 33.663 40.224 Cain i.n sales of facihties (Note 4).

29.289 1323 Interest income.

48,038 23.532 31.172 Ot her. net.

582 4.01, 3.113 locome taxes applicable to at her income (Note 5).

(21.088)

(22.570)

{l1.3151 income before interest charges.

383,361 388.262 331.803 Interest Charges interest on long-term debt.

213,278 186.210 183.029 Amortization of debt discount. premium and expense, net.

929 803 979 Ot her interest charges.

3,I62 10.7 iI 3.579 Allowance for debt funds used during construction.

(46,468)

_ 010.063)

(38.082)

Net interest charges.

170,901 157.693 151.503 Net Income.

212,460 230.569 180.298 Dividends on l' referred Stock.

40,366

_ 33.231 31.786 Net income after Dividends on l' referred Stock.

5 172,091

$ 193.313

$ 143.512 i

Statements of Earning!s Itetained in the Iltisiness in thousanas

)Dars linded/Arember3/

1981 19S0 1979 Italance l>eginning of period.

$ 271,629 5 212.711

$ 200.097 AdJ (deduct t Net income after dividends on preferred stock.

172,091 193.315 115.512 Cash dividends paid on common stot k.

(131,000) i136.100)

I131.100) l' referred stock issuance expense.

(l.236)

(30)

(l.793) llalance, end of period (Note 10).

5 311,487

$ 271.629 5 212.71i Statements of Other Paid-In Capital in thousands

)Dars /inded /Aremher3/

198l 1980 1979 Italance, beginning of period.

$ 696,800

$ 632.800

$ 627.800 Cash contribution to capital by parent company.

103,000 11.000 23.000 Italance, end of period.

5 799,800

$ 696.800

$ 632.800 lhe accompanying notes are an integra/part of these statements.

I8

Statements of Sources of Funds for Gross Property Additions in thousands ccorytaiburrcompany l

ll>ars Enl/cd/kccmber31 1981 1980 1979 Sources of Funds for Gross Property Additions:

Net income.

5212,460

$230.569

$180.298 Add (deduct) principal noncash items-Depreciation and amortization.

I82,904 184.401 153.962 Deferred income taxes, net.

91,080 79.343 80.286 Deferred investment tax credits.

55,875 40.823 32.395 Allowance for equity funds used during construction.

(48,690)

(35.663)

(40.224) 493,629 499.473' 406.717 Dividends on common stock.

131,000 136.400 131,100 Dividends on preferred stock.

40,366 35.224 34.786 322,263 327.849 240.831 Decrease (increase) in net current assets, excluding long-term debt and preferred stock due within one year-Cash and temporary cash investments.

(132,028)

(154.360) 190.526 Receivables.

83,392 (126.376)

(43.786)

Fossil fuel stock.

8,251 (20.011)

(46.447)

Materials and supplies.

(6,638)

(2.675)

(5,715)

Revenues to be refunded.

(1,569)

(3,498)

(l.932)

Accounts payable.

(23,522) 17.676 37.152 Taxes accrued.

(54,882) 56.090 15.037 Intcrest accrued.

I1,739 2.819 2.351 other. net.

4,769 (492) 3.442 (l10,488)

(230.827) 150.628 Other. net (including allowance for equity funds used duringconstruction).

1,300 3.256 15.128 Totalinternal sources.

213,075 100.278 406.587 External Sources-First mortgage bonds.

300,000 75.0(X) 225.000 Bonds retired or refunded at maturity.

(24,970)

(20.000)

(144.395) 275,030 55.000 80.605 Preferred stock.

50.000 Preferratock subject to mandatory redemption.

75,000 Preferred stock reacquired.

(6,401)

(4.695)

(230)

Cash contributions by parent company..

103,000 44.000 25.000 Pollution control obligations.

67,584 40.673 13.455 increase in otherlong-term debt.

3,166 68.682 4.692 Sales of facilities net book value(Note 4).

387.021 27.507 Total external sources.

517,379 590.681 201.029 Gross Property Additions (includes allowance for funds used dunng construction in the amount of $72.277.000 in 1981.

$55.776.F 0 in 1980 and $59.962.000 in 1979).

5730,454

$690.959

$607.616 i

I i

The accompanying notes are an integralpart afthese statements.

l 19

i Notes to YInancial Statements necember31.1981.1980, amt 1979 Note 1. Summary of Significant Accounting Policies:

PFNSION COSTS. The Company has a trusieed and non- )

contributory pension plan which covers substantially all GENERAI. The Company is a wholly owned subsidiary of regular employees. The policy of the Company is to fund The Southern Company which is the parent company of each year's accrued pension cost for the plan which four operating companies and a system service company.

amounted to $36.818,(XX) in 1981. $18,377,(XX) in 1980 The operating companies are engaged in the business of and $16.501,000 in 1979. Of these amounts, $23.522,000 l

providing electric utility service in four southeastern in 1981, $11.618.000 in 1980, and $10,709,000 in 1979 states. Operating contacts among the companies cover-were charged to operating expenses, and the balance was ing interconnection arrangements, interchange of elect ric charged to construction and otheraccounts. Accumulated pmver and joint ownership of generating facilities are pension benefit information as of the valuation dates subject to regulation by the Federal Energy Regulatory (January 1 ofcach year) follows(in thousands):

Commission (FERC) and'or the Securities and Exchange Commission. The system service company provides, at 1981 198" cost, technical and other specialized services to the parent MuanM pent value oraccumulated company and to each of the operating companies.

P "".jnts I

g

,, ng,,,,

, m,;,g The parent company is registered as a holding com-snnota.

3w 3,o g g pany under the Public Utility lloiding Company Act of I,tM actuariM eresent vMue <,r 1935 and it and its subsidiaries are subject to the regu-accumulated plan henents.

simpp s i t9.393 latory provisions of the Act. The Company is also subject gg.a u a a raw of return to regulation by the FERC and the Georgia Public Service assumed in determining actuarial Commission (CPSC) and follows generally accepted present value nraccumulated accounting principles and the accounting policies and plan henc6ts.

15Udi3 8%

[sy}{}i}tj practices prescribed by the respective commissions.

Net as< cts atadahre for benents.

UTil.lTY Pl. ANT. Utility Plant is stated at original cost.

The actuarial present value ofaccumulated plan bene i Such cost includes applicabic administrative and general fits was determined on the basis of accrued benefits as of costs, payroll related costs such as pensions. taxes and January 1. of the respective years, whereas the plan is other fringe benefits and the estimated cost of funds funded based on the premise that the plan will continue <

used during construction. Maintenance and repairs, in-in existence which requires that future events be con-cluding replacement of minor items of property, are sidered. Amendments to the plan in 1981 liberalized charged to maintenance expense accounts as incurred.

retirement benefits including increased terminal pay)

The cost of replacements of propedy is charged to the formulas and expanded benefits to employees. A net in-l utility plant accounts.

crease of $ 101,541,000 in the accrued liability with respect to past service under the plan resulted from the amend-REVENUES. Revenues are included in income as billed ments. The 1981 contributions to the pension plan in-monthly to customers on a cycle basis.

creased $18,441,000. of which $9.375.000 was attributable to past services and $9,066,000 was attributable to current FUEL, COSTS. Fuel costs are expensed as the fuel is con-services. The unfunded prior service cost under the plan sumed. The Company is allowed by state law and FERC and supplemental contracts amounted to approximately regulations to recover fuel costs and net purchased energy

$ 115.429.000 at December 31,1981 and is being amodized '

costs through fuel cost recovery mechanisms which are overa period of approximately 15 years.

adjusted as necessary to reflect increases or decreases in such costs. Revenues are adjusted for differences DEPRECIATION. Depreciation is pn >vided on the original -

between recoverable fuel costs and amounts included in cost of depreciable utility plant in sen ice, principally on a current rates.

straight-line basis over the estimated composite service life The cost of nuclear fuel, including a pnwision for the of the property.The depreciation provisions approximated estimated cost of permanent storage of spent fuel, is 3.7%. 3.8% and 3.7% of the average cost of depreciable amodized to fuel expense based on the quantity of heat utility plant during 1981,1980, and 1979, respectively, produced forgeneration ofelectric energy.Such amortiza.

Such provisions include a factor to provide for the ex-tion was $15.395.000 in 1981. $20,756.000 in 1980, and pected cost of decommissioning nuclear facilities. The

$11,153.000 in 1979. Final disposition of the spent fuel Company's portion of the cost of decommissioning these may require adjustments to fuel expense. Pending ulti-jointly owned facilities, based on decommissioning mate disposition, sufficient storage capacity for spent fuel promptly after the unit is taken out of service. is estimated is available at Plant flatch into 1990. The Comp;my is at approximately $32,000.000 each for the two units at currently expanding its stomge facilities at Plant flatch Plant f latch. This estimate will be adjusted periodically to and upon completion there will be sufficient storage reflect changing price levels and technology. When prop-capacity into 2000.

edy subject to depreciation is retired orothenvise disposed 20

of, its cost together with its cost of removal less salvage, is Note 3. Construction Program, Financing and Fuel charged to the accumulated provision for depreciation.

Commitments:

The Company is engaged in a continuous construction INCO31E TAXES. The Company follows deferred income program and presently estimates gross property additions tax accounting for all income tax timmg differences. The to be $947,394.000 for 1982. $952,514.000 for 1983 and

, Company is mcluded in the consoli<tated federal income

$1,256.369,000 for 1984. These additions include the tax return filed by The Southern Company. See Note 5 allowance for funds used during constructi n and exclude for fm1her mformation regarding income taxes.

amounts applicable to portions of facilities sold. Also, the 1982 thniugh 1984 estimated additions reflect the pnr AI.I.OWANCE FOR FUNDS USED DURING CONSTRL'C-posed sale of a portion of Plant Schererand the 1983 and i TION tAFUDC). AFUDC represents the estimated debt 1984 additions reflect the proposed sale of portions of and equity cost of capital funds which are applicable to Plant Vogtle (see Note 4). The construction program is utility plant while under construction. The composite rate subject to periodic review and revision and actual con-used by t he Company in 1979 to capitalize the cost of funds struction costs to be incurred may vary fn>m such esti-devoted to construction was <.a"o (net of income tax) as mates because of various factors such as increased costs, directed by the GPSC. Beginning January 1.1980, the revised load estimates, the availability and cost of capital, Company was directed by the GPSC to calculate the rate the granting of timely and adequate rate increases by in accordance with the formula prescribed by the FERC.

appropriate regulatory commissions, and changes in the The net of income tax rate for 1980 was 7.87% For 1981, amount and timing of proposed asset sales.

the rate was adjusted monthly and ranged from 7.72%

The Company's gross property additions are expected to 8.60"o. and was compounded semi-annually. The to be financed from the issuance of preferred stock and Company accounts for the income tax effect of capitalized long-term debt the receipt of common equity contribu-debt cost as a charge to income tax expense associated tions from The Southem Company, asset sales and inter-with operations with a corresponding credit to allowance nal sources. Should the Company be unable to obtain funds tbr debt funds used during construction. The income from such methods of financing, the Company would have tax effect of capitalized debt cost was $22.881,000, to use short-term indebtedness or other alternatives and

,$19,909.000, and $18.344.000 in 1981,1980, and 1979, possibly costlier means of financing or it could become respectively.

necessay to cancel or delay certain construction projects.

At the beginning of 1982, the Company had $605.950.000 VACATION PAY. Consistent with the rate treatment pre-N """". hnes o em SO O o

at amount

<cribed by the GPSC, the Company recognizes employee

" Lam ng cm or a period of three years and saa 09 in m t suNect to annual mnewal I" """#"" *pnes o cacation costs in the year vacation is taken. At December 31, n

ompany hs 1981 and 1980, the Company's employees had earned, but agreed to pay certam. fees and.or maintam compensating not taken, approximately $15.600.000 and $13,400,000 y an w yanas am not Wy nas w

, af vacation. In 1982, approximately 32% of the cost of restricted as to withdrawal by the tompany. Average com-eacations will be capitalized.

pensating balances during 1981 were approximately

$ 7,827,000 and at December 31,1981 were approx-imately $4,513,000.

Note 2. Rate Proceedings:

'lh supply a portion of the fuel requirements of its generating plants, the Company has entered into various dffective October 30, 1981, the Company was granted long-term commitments for the procurement of fossil and aew retail rates by the GPSC designed to increase annual nuclear fuel. In most cases, such contracts contain pro-retail revenues $180.5 million. The Company subse.

visions for price escalations based on the suppliers' cost auently filed a motion with the GPSC for reconsideration and/or other factors. Additional commitments for coal md rehearing of the rate case. Effective November 30 and for nuclear fuel will be required in the future to sup-1981, the GPSC granted an additional $84.7 million in ply the Company's fuel needs.

_ 'mnual retail revenues.

The Company filed an application for increased Note 4. Facility Sales and Joint Ownership Agreements:

vholesale rates with the FERC on September 1,1981.

The Company has reached agreements in principle with Through December 31,1981, the Company has sold un-its full and partial requirements wholesale customers divided interest in Plants Hatch Wansley, Vogtle and which provide for annual increases in revenues of approx-Scherer in varying amounts, together with transmission

- imately $16.5 million effective February 1,1982. The facilities. to Oglethorpe Power Corporation, an Electric Jagreements reached are subject to final approval of 31embership Generation & Transmission Corporation l the FERC.

(OPC). the blunicipal Electric Authority of Georgia. a 21

public corporation and an instrumentality of the State operating expenses, taxes and debt service, inclu' ding a of Georgia (31EAG), and to the City of Dalton, Georgia.

retum on investment, whether or not SECCO has any There were no such sales in 1981. In 1980 and 1979 such capacity and energy available. The Company's share of sales resulted in gains, after income taxes, of $7,42S,000 such amounts totaled $77,773,000, $70,067,000 and and $1,503,000, respectively. In addition to these sales,

$65,946,000 in 1981,1980, and 1979, respectively, and the Company has signed a contract to sell a 25% interest in these amounts are included in purchased power in the Plant Scherer Units 3 and 4 to Gulf Power Company, an Statements ofincome.

affiliate of the Company, and is negotiating to sell an in-At December 31,1981, the capitalization of SECCO terest of appn>ximately 16.5% ir Plant Vogtle to certain consisted of $32,800,000 of equity and $45,715,000 of i Florida utilities. The consummation of any future sales is long-term debt on which the annual interest requirement subject to all requisite governmental approvals, comple-is $2,957.000. TLrough December 31,1981, SECCO has tion of satisfactory 6nancial armngements by the proposed paid dividends equal to its net income.

purchasers and, except for the proposed sale to Gulf Power Company, the completion of agreements satisfactory to Notc 5. Income Taxes:

the respective parties. At December 31,1981, the Com-pany's percentage ownership and investment in these A detail of the federal and state income tax provisions is L jointly owned facilities were as follows(in thousands):

set forth as follows(in thousands):

Total Construction jggj jggg jg79 Megawatt Percent Plant Work in Fed ral Capacity Ownership in Service Progress E.1. Ilatch Deferred.

107.16I 90.089 78.361 Nuclear Plant.

1.6?O 50.1%

$491.831 529.633 Deferred in prior years (credit). (27.832)

(20.586)

(7.997)

AE Vogtle Deferred investment tax credits. 55.875 40.823 32.393 Nuclear Plant.

2.320 50.7 736.304 3

I lant Scherer Unit Nos.1 & 2.

1.636 8.4 360 61.498 State-Common Facihties 23.5 211 66.271 Curr' ntly payable.

7.417 16.019 6.174 Plant Wansley.

1.730 53 5 279.5i0 1.036 Deferred.

15.472 12.483 10.872 Deferred in prior years (credit).

(3.701)

(2.645)

(930 Each participant provides for its own construction 39,j gg 33gg igg; financing. The Company includes its proportionate share Toul.

162. >8 200 m 2 132.739 of plant operating expenses in the conesponding oper-Ins income taxes charged to ating expenses in the Statements ofincome. The Company other income.

21.088 22.370 14.315

~

is contractually obligated to complete thosejointly owned Federal and state income taxes units still under construction and to operate and main-charged to operations.

. $ 111.196 $ 178.032 $ 118.424 -

tain the units as agent for thejoint owners.

In connection with these sales, the Company has Deferred investment tax credits are amottized over entered into agreements wherel y the Company is required the life of the property which gave rise to the credits. Such to purchase declining fractions of OPC's and alEAG's amortization is applied as a credit to reduce depreciation capacity and energy of the respective generating units in the Statements ofIncome and amounted to $7,027,000 during a period of up to ten years following commercial in 1981, $5,163.000 in 1980 and $4,197,000 in 1979.

operation, such purchases to be made whether or not any The provision for deferred mcome taxes results fromi capacity or energy is available. The cost of such capacity the Company's tax deduction for accelerated methods of and energy is a function of each entity's canying and opera-depreciation and other write-offs of property cosif as ting costs and is included in purchased power in the provided for by the income tax laws, being greater than Statements ofIncome, the book depreciation ofsuch costs. Income taxes deferred The Company has entered into agreements with cer.

in prior years are credited to income when the book de-tain Florida and Texas utilities regarding power sales from preciation of those property costs exceeds the related Plant Scherer and other units of the Southern electric tax deductions.

system.

The total provision for federal income tax as a percent The Company and an af61iate, Alabama Power Com-of income before income tax amounted to 40.2%,43.1%

pany, own equally all of the outstanding capital stock and 39.3% for 1981,1980, and 1979, respectively. The of Southern Electric Generating Company (SECCO),

difference between the 1981 and 1979 rates and the fed which owns electric generating units with a total rated eral statutory rate of 46% was due primarily to the exclu=

capacity of 1,019,680 kilowatts, together with associated sion from taxable income of the allowance for equity funds transmission facilities. The capacity of the units has been used during construction (6.3% in 1981,6.2% in 1979). In sold equally to the Company and Alabama Power Com-1980, the primary reasons for the difference were the pany under a contract expiring in 1994 which, in sub-exclusion from taxable income of the allowance forequity stance, requires payments sufficient to provide for the funds used during construction (4.0%), the lower capital 22

gains (ax rate'on asset sales (2.6%), and the excess of the initial forty-year term of the lease. For the first six years, tax gain on asset sales over the bmk gain (-4.2N.

the lease payments are not sufficient to cover the interest requirements. The accrued interest in excess of the lease Note 6. Other Long-Term Debt:

payment is included in the lease obligation. Not until the year 2009 will the aggregate lease payments be sufficient Details of other long term debt are as follows (in thou-to cover the accrued interest and begin to reduce the cap-italized lease obligation. h>r rate-making purposes, the sands):

i GPSC has treated the lease as an operating lease and has allmved only the building's lease payments in cost of ser-1981 19*)

l Ohngations mcurred in connection with vice. The difference between the accrued expense and l the sale by public authorities of tax the lease payments allmved for rate-making purposes is exempt o ution contn>Iand industrial being deferred as a cost to be recovered in the future. At w

i

$[du b.

3.

December 31,1981, the amount deferred and included

. 5 41.000 5 41.000 9m% due september 1.2005.

30.000 an.<m m miscellaneous deferred charges in the Balance Sheets 635% due Nowmber 1. 2006.

40.N o 40.800 is $6.925,000.

6.40% due June 1. 2007.

21.100 24.100 6.375% due Arnl 1. 2008.

21.iW H1 21.1W)o 7.10% due Daember 1. 2008.

75.000 75.000 Note 7. Long-Term Debt Due Within One Year:

13J5% due October 1.2011.

50.000 282.500 232.500 The $22,502,000 of long-term debt due within one less funds on d< posit with Trustee.

6. t23 21.007 year at December 31,1981, consists of $20,000,000 of 276.077 208.493 first mortgage bonds maturing in 1982, the current por-

, capitalized Icase obliations-tion of other long-term debt and the remaining cash sink-Rulcars.

19.357 20.990 ing fund requirement.

corporate headquarters building.

76.617 m 642 The annual first mongage bond sinking fund require-Other office buildings.

5.521 5.98i ment (1% of the bonds authenticated prior to January I of 101.498 97.616 each year) amou nts to $28,729,000 and is d ue on or before Note lbyable-6% duc through 1986.

2.350 3.066 June 1,1982. The Company anticipates satisfying this

$379923 5309175 requirement through the use of bonds specifically authen-ticated for such purpose against unfunded pn>perty addi-The Company has authenticated and delivered to the trustees, with respect to such pollution control and tions equal to 166% of such requirement. The 11%%

series due August 1,2000, is subject to a mandatory cash industrial development revenue bonds, an aggregate of $282.500.000 of its first mortgage bonds which are smking fund requirement of s5,000,000 annually.

Dunng l980. the Company reacquired $5,000,0000f pledged as security for its obligations under pollution

.ts 11%% series first mortgage bonds which weie used to control and industrial development contracts. No interest on these first mortgage bonds is payable unless and until satisfy the 1981 cash smking fund requirement. In 1981.

M,m,000 of the 11%% series was reacquired and m a default occurs on the installment purchase orloan agree-January 1982 an additmnal $30,000 of this series was ments. No principal payments are due on the contracts reacquired. These b<mds can be used to satisfy the 1982 cash sinking fund requirement and to satisfy $5.000.000 quired under capital leases are recorded in of the $28.729.0001982 first modgage bond sinking fund the Company's llalance Sheets as utility plant in service land the related obligation is classified as other long-term requirement. The gain on the reacquisit,ons is meluded i

in iscellaneous deferred credits m the Balance Sheets debt. The net book value of capitalized leases included in and is bemg amortized over the remaining life of the utility plant in service wy $92,365,000 and $94,850.000 onginalissue.

at December 31,1981 and 1980, respectively. At December 31,1981, the composite mterest rate for the leased rail-cars was 9.55%, the mtsrest rate for the corporate head-Note 8. Cumulative Preferred Stock-Subject to quarters lease was 8.23% and the composite interest rate 31andatory Redemption:

for the other leased buildings was 5.42%

The current portion of the capitalized lease obliga-The $2.75 Class A Preferred Stock has a cumulative sink-

,tions and the note payable for each year through 1986 ing fund provision requiring the redemption of 150,000 is as follows: $2.471,00r in 1982: $2,731,000 in 1983:

shares annually at the stated value of $25.00 per share

$3,343.000 in 1984; $3.677,000 in 1985; and $2.747,000 until all shares are redeemed. During 1980 and 1979, in 1986.

140.800 and 9,200 shares, respectively. were reacquired in October 1980, the Company capitalized the to satisfy the 1980 sinking fund requirement. An addi-

$69,692,000 lease ofits new corporate headquarters build-tional 47,000 shares were reacquired in 1980 to partially ing. l'he lease agreement provides for payments which satisfy the 1981 requirement. The remaining 103.000 are minimal in early years and escalate throughout the shares were reacquired in 1981 along with an additional 23

e 153,030 shares which will be used to satisfy the 1982 nuclear facility in the country, a company could be assessed requirement and to padially satisfy the 1983 requirement.

up to $5,000,000 per incident for each licensed reactor The gains on these reacqdsitions of 51,067,000. $532.000 operated by it but not more than $10,000,090 per reactor and $15,000 for the years 1981,1980, and 1979. respec-to be paid in a calendar year. On the basis ofits ownership tively, are included with premium on preferred stock in the interest in the two nuclear reactors now in service, the Company could be assessed a maximum of $5 Statements of Capitalization.

for any incident, but not more than $10,020,000 to bc The Company issued 3.000,000 shares of S3.76 Class A Preferred Stock in 1981. On or before June 1,1986 paid in any one year.

and annually thereafter, 150.000 shares must be retired The Company is a member of Nuclear blutual l.imited, through the operation of a cumulative sinking fund at the a mutual insurer established to provide insurance coverage stated value of $25.00 pershare.

against property damage to members' nuclear generating facilities. The Company is subject to a retmspective pre-mium djustment in the event that losses exceed accumu-Note 9. Assets Subject to 1.ien:

lated funds. The Company's maximum assessment is limited to $22,000,000.

The Company's mortgage dated as of 31 arch 1,1941, as Also, the Company is a member of Nuclear Electn,e amended and supplemented, securing the first mortgage Insurance Limited, a mutual insurer which provides m-bonds issued by the Company, constitutes a direct first surance to cover, separately, (a) the extra cost incurred lien on substantially all of the Company's fixed propedy m btammg replacement power durmg a prolonged and franchises.

accidental outage at a members nuclear generating -

facility and (b) property damage to nuclear generating Note 10. Common Stock Dividend Restrictions:

facilities in excess of $500,000,000. blembers are insured against the increased costs of replacement power in the The Company's first modgage bond indenture conta.ms amount of $2.300,000 per week (starting 26 weeks after various common dividend restrictions which remain in the outage) for one year and $1,150,000 per week for the e effect so longas the bonds are outstanding. At December second year. Under each policy, the Company is subject 31,1981, $109,405.000 of retained earnings was restricted to retroactive assessments iflosses exceed the accumulated against the payment of cash common dividends under funds available to the insurer under that policy. The terms of the mongage indenture.

present maximum assessments for the Company would be '

The terms of the sinking funds for the Company's approximately $12,000,000 under the replacement power presently outstanding $2.75 and $3.76 Class A Preferred policy and $4,000,000 under the property damage policy.

Stock prohibit the payment of cash dividends on common stock during a default in the performance of the sinking Note 12: Quarterly Financial Data (Unaudited):

fund obligations.

The Company's charter limits cash dividends on com-mon stock to 50% of net income available for such stock Summarized quarterly financial information for 1980 and 1981 is as follows(in thousands):

during a prior period of twelve months if, calculated on a corporate basis, the ratio of common stock equity to total Net income Nter capitalization, including retained earnings, adjusted operating operating Dividends on to reflect the payment of the proposed dividend, is below Quarter Ended Hevenues income l' referred Stock 20% and to 75% of such net income if such ratio is 20%

March 31.1980.

. $398.980

$ 72.891

$39.206 or mom but less than 25%. At December 31,1981, this June 30,1980.

396,975 65.258 42.206 ratio was 31.6%.

September 30.1980.

563.003 111.421 80M)7 December 31.1980.

449.450 66.718 31.926 Note 11. NuclearInsurancc:

March 31,1981.

466.677 70.381 34,500 June 30.1981.

482.596 61.887 24.855 Under the Price-Anderson Act, the Company maintains

$$n"Ni[,'

y'[.$

yl. 2 g

3) agreements of indemnity with the Nuclear Regulatory Com-mission (NRC) which, together with private insurance, cover third-pany liability arising fmm any nuclear incident occurring at the Company's nuclear power plant. The Act Note 13: Supplementary Information Concerning the hmits public liability claims that could arise from a single Effects of Changing Prices (Unaudited):

nuclear incident to $560,000,000. Each reactor at the Company's nuclear plant is insured against this liability The fullowing supplementary information concerning the to a maximum of $160 million by private insurance (the effects of changing prices i.4 presented in acconlance with maximum amount presently available) and the remainder the general concepts set forth in Financial Accounting '

is provided by indemnity agreements with the NRC. In the Standards lloard Statement No. 33, as modified to reflect event of a nuclear incident involving any commercial the economic effects imposed on Georgia Power Company 24

by regulatory authorities. It should be viewed as an esti-recoverable in revenues through operation of fuel cost mate of the approximate effects of in0ation. rather than recovery mechanisms. Such increases effectively are a precise measure.

receivables fnim customers. Therefore, such increases are Constant dollar amounts represent historical costs not included in income, but instead are treated as mone-stated in terms of dollars of equal purchasing power, as tary assets. Income tax expense was not adjusted because measured by the Consumer Price Index for All Urban only historical costs are ded uctible for income tax pu rposes.

Consumers. Current cost amounts redect changes in spe-lloiding assets such as receivables, prepayments. and cific prices of plant from the date the plant was acquired inventory results in a loss of purchasing power during i

to the present. They differ from constant dollar amounts periods of indation because the amount of cash received to the extent that specific prices have increased more or in the future for these items will purchase less. Conversely, less rapidly than the general rate ofindation. The current holding monetary liabilities, primarily long-term debt, cost of plant was determined by indexing each major class results in a gain because the payment in the future will of plant using the llandy-Whitman Index of Public Utility be made with nominal dollars having less purchasing Construction Costs. Current cost does not necessarily rep-power. The Company has a net gain due to thesignificant resent the replacement cost ofexisting productive capacity amounts oflong-term debt outstanding.

because the utility plant is not expected to be replaced Under the ratemaking prescribed by the regulatery precisely in kind.

commissions to which the Company is subect, only the The accumulated provision for depreciation for cur-historical cost of plant is recoverable in revenues as de-rent cost was developed by applying, for each major class preciation and plant in rate base is limited to original of plant, the same percentage relationship that existed cost. Therefore, the cost of the plant stated in terms of between gross plant and the accumulated provision for constant dollars or current cost that varies from the his-depreciation on a historical basis to the adjusted plant torical cost of plant is not presently recoverable in rates data. Depreciation expense for both methods was deter-as depreciation. The amount of this variance that accrued mined by applying the current depreciation rates to the as a result of in0ation in the currtnt year is redected as respective indexed plant amounts reduced by the amortiza-a reduction to net recovtrable cost. While the use of debt tion ofinvestment tax credits which were first adjusted to financing reduced the effect of this loss on the common average 1981 dollar amounts by year of addition.

stockholder, earnings were not adequate to offset the increases in the cost of electric generating fuel are erosion in the purchasing power of its investment.

Statement oflocome Adjusted for Changing prices l'or the Year Ended December 31.1981 lin Thousamis ofArcraye !!MI thllars)

Constant Current Ibliar Co.st income Applicable to Common Stockholder, as reiwed.

. $ 172.09 %

$ 172.09 %

l Erosion of Common Stockholder's Equity Because of Changing prices:

Cost in excess of the original cost of productive facdities not recoverable in rates as depreciation-Iteportable as an additional provision for depreciation.

183A66 217.990 l{eportable as an adjustment to net recoverable cost.

. 162.039 98.333

$313.525

$316.323 Excess of the general level of prices ($731.367)in the current year over increase in specific price changes ($705.165)*.

29.202 Offsetting effect of debt financing.

. J236.062)

C36pi2)

Net erosion of common stockholdtr's equity.

. $ 109A63

$lo9A63 income Applicable to Common Stockholderas Adjusted" tincluding the effect of debt financing).

. $ 62.631 5 6.L631

• At liccember 31.1981 current cost of property. plant and cyuipment net of accumulated depreciation was $10 bilhon and historical cost or net recoverable thniugh depicciation was $5 billion.

" Adjusted income apphcable to common stocidmlder would be a loss of $11.4 milhon and a loss of $419 milhon on a current cost basis it only the amount reportable as an additional provision for depreciation were deducted from the reported amount of such income.

25

l Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices fin ThousandsofIMlars) 1981 1980 1979 1978 1977 Operating Revenues:

llistorical Cost.,...............

..... 52.015.810

$1,808.408

$1.519.942

$ 1,475.024

$ 1.301.237 As adjusted'.....

2.015.810 1.989.249 1.899.928 2.050.283 1.951.856 Income Applicableto Common Stockholder:

l listorical cost.......................... $ 172,094

$ 195.345

$ 145.512 1

As adjusted for the net en>sion

/

of common stockholder's equity *...........

62.631 63.812 3.570 Common Stockholder's Investment (Net Assets)at year-end:

llistorical cost.......................... $ 1.4 58.24 0

$ 1.314.315

$1.210.868

$ 1,173.036

$1,086.247 As adj usted '............................. 1,414,493 1,380.031 1,428,824 1.571.868 1.585,919 Excessof the General Levelof Prices Overincreasein Specific Price Changes *....................

29.202

$ 185.006 5 355.699 Effect of Debt Financing *................... $ 236.062

$ 344.369

$ 394,958 Return on Average Common Equity:

llistorical...........................

12.41%

15.47%

12.21%

As adjusted for the net en>sion ofcommon stockholder's equity *.........

4.52%

5.05%

.30%

Cash Dividends Declared (Common):

llistorical cost.......................... $ 131.000

$ 136.400

$ 131.100

$ 119.225

$ 109.400 As adj usted '............................

131.000 150.040 163.875 165,723 164.100 AverageConsumerPriceIndex..

272.4 246.8 217.4 195.4 181.5

• Adjusted amounts represent awrage 1981 dollars.

Auditors' Report To the Board of Directorsof Georgia Power Company:

We have examined the balance sheets and statements gross property additions for the periods stated, in con-f of capitalization of Georgia Power Company (a Georgia formity with generally accepted accounting principles corporation and a wholly owned subsidiary of The applied on a consistent basis.

Southern Company) as of December 31,1981 and 1980, and the related statements ofincome, earnings retained in the business. other paid-in capital and sources of funds for gross property additions for each of the three yeam in ARTHUR ANDERSEN & CO.

the period ended December 31,1981. Our examinations were made in accordance with generally accepted auditing Atlanta Georgia, j

standants and, accontingly, included such tests of the February 19,1982.

I I

accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the financial position of Georgia Power Company as of December 31,1981 and 1980, and the results of its operations and the sources of funds for 26

Report of Management The inanage* ment of Georgia l'ower Company has pre-its responsibility for fairness of f nancial repoi1ing.They pared and is responsible for the financial statements and regularly evaluate the system of internal accounting con-related financial information included in this reportThe trols and perform such tests and other procedures they financial statements were prepared in accordance with deem necessary to reach and express an opinion on the generally accepted accounting principles appropriate fairness of the financial statements.

under the circumstances, and necessarily include amounts The Board of I)irectors pursues its resiwnsibility for that are based on best estimates and judgements with reported financial information through its Audit Com-appropriate consideration to materiality. Financial infor-mittee. com posed ofi)irectors who are not emplovees.The

' mation included elsewhere in this annual report is con-Audit Commitir meets periodically with management, sistent with the financial statements.

the internal auditors and the independent public accoun-The Company maintains a system ofinternal accou nt-tants to assure that they are carrying out their responsi-ing controls to provide reasonable assurance that assets bilities and to discuss auditing. internal control and are safe-guarded and that the books and records reflect financial reporting matters. Hoth the independent acconn-only authorized transactions of the Company. l. imitations tants and the internal auditors have free access to the e.sist in any system of internal contnel based upon the Audit Committee at any time.

recognition that the cost of the system should not exceed We believe that these policies and procedures provide the benefits derived. The Company believes its system reasonable assurance that our operations are conducted of internal accounting controls, augmented by its inter-with a high standard of business conduct and that the nal auditing function. appropriately balances the cost statements reflect fairly the financial position, results of benefit relationship.

operations and sources of funds for gross property addi-The independent public accou ntants provide an objec-tions of Georgia Power Company.

tive assessment of the degree to which management meets 1

Hoard of Directors Walter G. Autrey Richard J. Kelly Dr. Gloria 31. Shatto President Executive Vice President-President llamilton Turpent me Co., Inc.

l'ower Supply Ikny College and lleny Academy (naval storesl ValJosta.1972 Georgia Power Company f education) Rome.19%

Atlanta.19s1 ll. Grady llaker, Jr.

telectcJ ti 1 Sl>

Edward D. Smith Executise Vice President-llansell. Post. lirandon & Dorsey 31arketing anJ Customer Senice liarold C. 31c Kenile. Jr.

(attorneys) Atlanta.19io President Georgia Power Company Atlanta hw S"uthern Electne International. loc.

Rolwrt Strickland Atlanta 1972 Chairman of the lloard llennett A. Ilrown Trust Company ILmk II >IIIIC'* 3'-

I," * **e n t AmkingWlanh 1979 Chairman and Chief Executive ( hficer The Citin ns & Southern National llank

""'N"

" #,"*P""F William II. Turner ibankmgi Atlanta.1930 Atlanta.19,"a.

ViceChairmanof theilmarJand Chid Executive officer N. N. Iturnes. Jr.

William S. 31 orris. III Vice Chairman President W C. liradley Company i mdustnabstsi Columbus. ltwi.T Yme >lanufac tunng Company Storns Communications Corporation itextiles> Home.19i3 apubbsinnm Augusta.19i7 Alvin W. Wgtle. Jr.

William A. l'ickling. Jr.

William A. Parker, Jr.

President Chairman of the 11%J and Chairman of the floard The Southern Company Chier' Executive ( h ticer Cherokec investment Company Atlanta.19iS Charter Sledical Corporation Ireal cFlate and imestmentsi (medical f.icihtics) 31 acon.1973 Atlanta.19; ;

Carl Ware Vice President j A. u n.;t i1. G. Pattillo Coca-Cola. t '.S A SeniorVice Preudent Chairman (soft Jnnk companyi Georgu l'ow er Company Patt dlo Construction Company. Inc.

Atlanta.19sn Atlanta.197ti (construction l i krat u r.1972 Allen II.Wilsim L G. Ilardman. III Robert W. Scherer Executive Vice PresiJent-l'inance President and Treasurer Chairman of the Hoard and Chief Georgia Power Company llarmonv Gnne Shils. i c.

Exes utive Officer Atlanta.197 %

n t textdes) Commerce.1979 Georgia Power Company Atlanta.19i9

Iloard CommittecS Hichard J. EcIly A.W. D hiberg W. D. DcIlardelchen Jr.

th utive bcc l'rnident-Vice l' resident Assist. nt Comptn oller la.ccutive C.ommittee Ibwer Supply Operations Planning and Corporate Accot.nting 3gy; 39 Contnil J. A. Parramore.Jr.

Hohert W. &herer, Chairman Years of Senice:.!2 I). E. Dutton

,hntant Comptneller James ll. Stiller. Jr.

teleded 120 X2)

Vice President Customsr Accounting liarold C. 31cKensic. Jr.

Allen it. Wilson Generating Plant Pnijett3-

, sfs,'a t Lomptroller William A. Parker, Jr.

Executive %cc President-Vogtle.&herer and lipfn cledric ll. G. Pattillo Finance l'roiccts Aaounting Services Edward D. Smith Age:66 (clected 819 81)

Years of & nice: 87

• I" N'"*""#

Audit L,ommittce John C. licmby, Jr.

tan octary William E. Ehrensperger Ow President I'dward D. Smith. Chairman SeniorVice President and Group ieletted 12 16 Mil Guerry P. Strkkland j

N. N. llurnes. Jr.

Esautne-h,waSupply

'*I#Y Gerald T. florton nted 713 XD

'N"f Scnice:.19 William A. Fkkling. Jr.

Occ President

) cars o PublicAffairs Richard J. Pershing intiwd 61 MD i

Compensation Committee Assistant Treasurer k*

• President (clatul 715 8h H. E. Conway

\\ sce

11. C. Pattillo, Chairman

,[.[,' ftfxtionand William A. Parker, Jr.

I" * "" *'"' #"

"I"d

• U"'I"""' **""'

s William !!. Turner Assistant Treasurer Projut Rnagement J.Wyman Lamb (c!ccted 713 MD l

lionorary Directors

'W Vice President icars of Senice: 2a-Hi3k mnagement IL 11 der Iclected 3 20 x1 Oh'n J.A.Gantt Vice President W. E. Lhren<perger Senior Vice President Powcr I)clivery tien 11. Williams Atlanta,1931 Dnision Operations Via Pwsident Wade S. mnning Vice President Athens Unision Edwin I. Ifatch

,f Senice: 38 Troutman. Sandas, la kt nnan Land E. A.Yates. Jr.

K.bhmore George F. Ilead F.G.>litchell Jr.

La President Atlanta 1973 SeniorVice Presider,t Atlanta Division V ce President Ibwa

'%p neration G nerating Plant Construction 11.W. Rainwater Tahnology and,bistant to Vice President C,cileral Officers t ears of Sen ice: 2.,.

scnim,y;<cp,cs;acn, 3,,,,,, g3,,,,un (clected 5 20 Mb H. II. Pinson Hohert W. Scherer H. Pierce llead. Jr.

Andrew II. Speed h* E**.E "'

Chainnanof thelloardandChief g.nior Vice President

.on ruc on Columbus Division

{",#["

Esautne Of ficer Admin:strative Senices g,

AMe: 56, Agc 31 II.S.) loss

}

Years of Senice: 33 Years of Serviec: at John A. Hoherts Vice President icict ted 12n M2s Vice President Wcon Division Warren V. Johe Energy Senices James 11. Stiller. Jr.

SeniorVice President and T. J. A!!c n. J r.

President Gniup Esecutive Homney E. Scott Vice President Age: 39 Age: 11 Vice President Home l >ivision Ycars of & nice: 33 Years of Senice: 11 Economic Services

• J. Omdma kletted 12n 828 telected 217 82)

J.W. Talky Jr.

U..ce President liarold C.31cKenrie Jr.

James 31. Picpmeier Vice l' resident Valdosta Disision Exnutnebce President-SeniorVice l' resident Area Development (ef fative 7l181)

I. e ];d AffArs 5 rat Development Ivin W.

Alle. Jr.

L.T. Wansley bw Pwsident Vice President Years of & nice: 28 Years of Senice: 2 tresigned 1: 1 M2 to become Charles F.Whitmer Y"Id"sta l): vision President of Southun Elettric W. L. Westbrook Viw President a retired 718h International. inc.)

SeniorVice President.

Engincaing Secretaryand 'Ireasurcr

11. (..rady Itaker. Jr.

Age: la Jack K. Widener, Jr.

l.xecutive bce President ~

YeaM & nim IM Vice President Erketing and Customer Senice (elected 819 81, Regulatory and Consumer Affairs AMC d '

teinted 1216 XD Ycan of Servwe: 31 J.T. Ileckham Jr.

h lected 120 82)

%ce President and W. A.Widner General mnager Vice President and L..corge W. Edward. Jr.

3 Eck&nstion Genaal Snager-Fossil anJ lsecutne bec Prcudent-kidd 5 20 8h Dydn> Generation External Affairs telected 5 20 81)

Age: 12 Thomas C. Iloren Years of Senice: 12 Vice President Charles H.31inors (clated 12n 82)

Corporate Performance Assistant Oce President 33 (clated 819 8h ConsumerAffairs

Georgia's Electric System Generating Urfits Under Construction Nameplate Commercial yo3,ig Rating (kilowatts)

Operation Date P! ant Scherer Unit No.1.

68,71211) 1982 Plant Scherer Unit No. 2.

68.712(1) 1984 Plant Scherer Unit No.3.

818.0m) 1987 Plant Scherer Unit No. 4.

818.000 1989 f Nuclear Nvin W. Vogtle Nuclear Plant Unit No.1.

588.120(1) 1987 l Alvin W. Vogtle Nuclear Plant Unit No. 2..

588.120(1) 1988 ilydro

!!artletts Ferry Unit Nos.5 and 6.

100.000 1987 Goat Ib >ck Unit Nos.7 and 8.

67.000 1988 Pumped Storage 675.000 1987 thicky Slountain Unit Nos.1. 2 and 3.

II) GI C portion only, e.trhiding amount sohl tojoint participants.

1981 Jointly Owned Plants Plant.

. Ilatch Vogtle Scherer Wansley Units.

l&2 l&2 l&2 l&2 Stegawatt Capacity.

1,630 2.320 1.636 1.730

% Owned Georgia.

50.1 50.7 8.4 53.5 OPC.

30.0 30.0 60.0 30.0 blFAG.

17.7 17.7 30.2 15.1 Dalton.

2.2 1.6 1.4 1.4 Proposed 1982 Ownership 12)

(

e:oq. '

Legend

,,, ~. ~~

~ ~

Plant.

.Scherer men en**

A Nuclear

- um e m us..

Units.

3&4 e w.w i

e

• > * ~

G Fossil Megawatt t

o uv M.=,a=

Capacity.

1.636 h.maQ c

j E liydro

• L a Qd.L,,,

,i

% Owned O CT Georgia.

L.0 m.,,.

Gulf.

25.0

. m,mu e (2)l1 ant Ii>gtle i

't Certain Florida utilities are

{

revieuing thepossibility of Qi*w am.a n,

<>unership in 11 ant ii>gtle.

6a e m, n, t,

we w o.

(e u,.w

.w.e. e.

Nameplate Generating Capacity e,

(Year-end 1981)

Kilowatts

= ($g,,

ij.

Steam

[

i Fossil.

8.850.250 4

m Nuclear.

816.630 4!

Gas'Iurbines.

1.230.700 h

l

'I

,td.

2 3

liydro.

754.480 b

v en.,o -

Total Capacity...

. 11.652.060

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