ML20063E671
| ML20063E671 | |
| Person / Time | |
|---|---|
| Site: | Oconee, Mcguire, Catawba, McGuire, 05000000, Perkins, Cherokee |
| Issue date: | 02/15/1982 |
| From: | Horn C, Willie Lee DUKE POWER CO. |
| To: | |
| Shared Package | |
| ML20063E654 | List: |
| References | |
| NUDOCS 8208300335 | |
| Download: ML20063E671 (48) | |
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About the Cover Contents Notice of.
Annual Meeting Pictured on the cover b the McGune 1 Highlights h 1982 meeting of heklem of Duke Nuclear Station, the newest generating 2 Imtter to Shamhokiers Power Company common stock will be plant on the Duke Power system. The com- heki at 10 a.m. Friday, Apnl 30,1982, in -
4 Year In Review pletion and commercial operation of the OJ. Miller Auditorium of the Electnc McGuire Unit 1 in 1981 culminated more 11 McGuire Nuclear Station Center, 526 South Church Street, than a decade of M*n and deter-mination by Duke Power. This achieve-g N h hg Challenge "9* Charlotte, N.C.
ment is d M in more detail in a 20 Service Area Map feature artcle beginning on page 11.
21 Responsibihty for Financal Statements 21 Auditors' Opinion 22 Financial Statements Statements of Income Statements of Sourm of Funds for Plant Construction Costs Balance Sheets Statements of Capitalization and Retamed Eamings 27 Notes to Financal Statemens 34 Management's Dmcussen and Analysis of Financal Conddion and Results of Operations 36 Iong-Term Financmq and Sale of Assets 37 Selected Financial Data 42 Subsidanes 43 Board of Directors 44 Officers A cassette recordmg of selected highhghts from this annual report is available upon requet by wnting Corpora'a Communica-tions Department, Duke Power Company, ,
P.O. Box 33189, Charlotte, N.C. 28242. l 1
t
Highlights DUKE POWER COMPANY l
Percent l Incrmse l 1981 1980 (Decmve) i Kilowatt-hour sales 53,547,929,000 S2,311.276,000 2.4 Electric revenues $1.908,454,000 $1,682,822,000 13.4 Earnings for common stock $ 278,356,000 $ 252,479,000 10.2 Common stock data Average shams outstandmg 87,313,000 81,985,000 6.5 Earrungs per share . $ 3.19 $ 3.08 3.6 Dividends per share . 5 2.08 $ 1.95 6.7 Book value per sham (yearend) 323J3 $22.82 4.4 Return on average common equity 13.7% 13.7 % -
Plant cormtmebon costs S 804,371,000 $ 853,015,000 (5.7)
Total electnc plant, net . $5,998,307,000 $5,904,8S0,000 1.6 Pmk Imd (Kw)*
Summer . 10,602.000 10,364,000 2.3 Winter 10,530,000 9,892,000 6.4
- A new pmk of I 1,145,000 Kw occurred on January 11,1982.
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To Our Shareholders: 'Pr "" -
981 was a ymr of ma- ,n ar achievements for gppyS Q ";4+i y{
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Duke Power km.
ww-aW 4+1 L ...T :n " d; s{s
- After more than 10 yeam (' 'p f % " w ~' ,
of constmetion, Urut 1 of the s McGuire Nuclear Stattor.
was completed and placea no commercal operation It I bnngs to the Duke system or ;
g /% y A the cleanest safest, rnost economical new source of . 41. 0 " '
base load generation avad-M r 7 _ 3~ li) able
- The sale of a 75 percent &r : . M ^~'
? l-mterest in Unit 1 of the .
A
~
Catawba Nuclear Station was hnahzed, enabhng the Company to forego long- e term hnancing for the tirst time in mom than 10 yeam.
- The North Carolina -
Utihties Commission author-ized a signihcantly higher rate of return than pmvlously allowed.
- The three-unit Oconee Nuclear Station, which began operation in 1973, i - ame the hrst nuclear f in the nation to &
. ite 100 billion net b .s itt-houm of electncity. g e
- The Company's coal-hmd {
generating system once r again was named the ,
nation's leader in fuel eth- e ciency $\
W The sigmhcance of these ac- F complishrnents is not fully ..
reflected m our year-end cori noro. ir. ci.iei. witiicm s. t < rishi >
hnancial results Return on prospects for future earrungs Substantial rate increases common equity was flat at growth however. enabled recogmzing McGuire Umt !
13 7 percent Earrungs per the board of directors to as a productive asset prom-sham rose only mndestly to raise the indicated annual re to enhance boi the quah-
$319 from $3 08 m 1980 dividend to $2 20 from y at tuture earnings and the
~ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _
lowed rate of mturn on com- 1981 to various groups of ience. Its completion and mon equity in Nodh Caro- securities analysts andinstitu- commemial operation am a hna,16.5 percent,is a signifi- tionalinvestom, including the tribute to the professional cant improvement over the New York Society of Secun- talents of our dedicated 14.1 percent previously ty Analysts, the Pubhc Utihty employees.
allowed, although still below Securities Club of Chicag The spirit that brought the Icvel the Company and the Atlanta Socoty of McGuim Unit 1 from con-beheves necessaryin today's Financal Analysts. We am cept to reality has been economic environment. encouraged by the intemst renewed and the Company The 13.0 pement allowed in Duke Power exhibited at is poised to take advantage return on common equity these pmsentations. of futum opportunities.
authorized in our most re- To broaden our financial In msponse to a new incen-cent South Carolina rate base, initial steps wem taken tive program, our 20,000 case, however, is clearly in- in 1981 toexploreadditional employees reached or adequate. A request for a unregulated business oppor- exceeded %ets in safety, mom mahstic rate of mturn tunities. The design of a conservation and load man-on common equity will be waste facihty foranotherutih- agement, affirmative action, filedin South Camlinainear- ty was undertaken as a pilot engineering and construc-ly 1982. project. tion, generation efficiency Despite cutbacks in the Our msources fordivemified and reliabihty of service to Company's planned con- activities include engineer- customem.
struction program, large ing and construction exper- We thank you for your sup-amountsof additionalcapital tise; Crescent Land & port and encourage your in-will be required over the Timber Corp., a Aidiary temst as we pursue our am-next decadeif we are to con- possessing considerable bitious goals in the futum.
tinue to provide adequate, natural resoumes and exten-reliable service to our sive land holdings; and Mill. For the board of dimetom, customers. It is manage- Power Supply Company, a ment's objective to attract subsidiary engaged in the -
these newinvestment dollars sale of electncalsupphesand j .
without jeopardizing the equipment. Carl Horn, k.
Company's financial integri We approach divemification Chaman of the Board and ty or sacnficing the intemsts with caution. We do not ex. Chief Executive Officer of existing shamholders.
pectunmgulated activities to To strengthen its financial constitute a significant por- gg% / k stmetum, the Company ex- tion of operations in the changed 3.7 million shams foreseeable future. As op. William S. Lee of new common stock for portunities arise, we willpur. Pmsident and outstanding first mortgage sue them prudently while Chief Operating Officer bonds in early 1982. This working tomaintaineurhigh transaction will enable the standards of electnc service. February IS,1982 Company to finance its The completion of Unit 1 of 1982 capital requirements theMcGuimNuclearStation without the pubhc sale of ad- is a major accomplishment.
ditional common shams. As reflected in a feattue arti-We also am maintainmg an cle in this annual mport, the active investor relations pro- constmction, financing and gram. Senior management licensing of McGuim Unit 1 made formalpmsentationsin was often a trying exper-3
Year ha Baview dividends paid in the foudh mitting the transaction and quarter. The higher quarter- the arrangement of neces-Financial Results ly dividerid increases the sary financing by the pur-Company'sindicatedannual chasers.
5 arnings per share dividend to $2.20 from its If the pending sale is con-rose to $3.19 from previous level of $2.04. summated in mid-1982, the i $3.08 in 1980. Eamings for Company would mceiveap-common stock tota 1ed Sale of Assets pmximatelv $250 million. In
$278.4 million,10.3 pement addition, PMPA would make above the $252.5 million he Company com- monthly progress payments erned in 1980. pleted the sale of 75 to finance continued con-Earnings for the year wem Cataw * #"
uc at Statio #' * ***#~
favorably affected by ratein- and 37% percent of the "
cmases implemented in late plant's support facilities to 1980 and in the fourth gmups of its Nodh Camlina quarter of 1981, income and South Carolina rural Financing j fmm investing the procmds electric cooperative custom from the sale of a podion of ers in February 1981. he Febmary 1981 the Catawba Nuclear Sta- sale of a portion of tion, greater allowance for Proceeds received at the the Catawba Nuclear Station funds used during construc- time of closing totaled $521 enabled the Company to tion and a 2.4 pement in- million. In addition, the pur- fund its entire 1981 con-crease in kilowatt-hour salec. chasers make monthly pro- struction program without gmss payments to finance any external long-term fi-These factors wem offset toa thecontinued constmetion of nancing.
large extent by high fueland their portions of this purchased power costs in 1,145,000-kilowatt generat. The issuance of 1.9 million the fourth quarter due ing unit, scheduled for com- shares of common stock primarily to an extended memial operation in 1984. thmugh the Stock Purchase-outage of Unit 1 of the Duke will operate the facility Savings Program for !
Oconee Nuclear Stationand and will mtain ownership of Employees, the Employees' the unanticipated additional the mmaining 25 pement of Stock Ownership Plan, and time mquired to bring Unit 1 Catawba Unit I' the Dividend Reinvestment '
of the McGuim Nuclear Sta- and Stock Purchase Plan tion into fullpower produc- A group of Nodh Camlina pmvided $36 million.
tion. The higher fuel costs municipalities pumhased 75 The Company generated 94 am expected to be reflected pement of Catawba Unit 2in pement of its 1981 capital in fuel cost adjustment pro- 1978. The sale of the re-mqmmments fmn1 demal cedums in 1982. maining 25 pement of this soumes. W1out proceeds unit to the Piedmont Munici- fr m the Catawba sale, The Company's 1981 earn-ings provided a 13.7 per- palPower Agency (PMPA)' however, thelevelofintemal representing a group of cent return on common Duke s South Carohna d Me fm cW e equity, unchanged from nmni N customers, could quirements would have 1980. been wellbelow 50 pement, take place by mid-1982.The .
velmanagement feelsis The quarterly cash dividend sale is contingent, however, on common stock was raised upon a favorable mling by P de t' to 55 cents persharefromits the Supreme Coud of South To strengthen the capital previous level of 51 cents Carolina on the constitu- stmetum without the dilutive per share, effective with tionahtyof thelegislationper- effectof selling new shamsof 4
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< '!uduly the effects of the ex- 16 5 ; ermnt return on earn-l elow thetr bx 'k value. the bnqe trans1(ton in< ,n equity 9
z fom} *uy issua; . 3 ' nulaan EarnuMs coverage of hxed The Cornpany had re stiares O /15 unliton mark t wrv b ' the SEC method p .stni a !9 / i . >rmnt r value if new < ommon Ptot t was ? B turu's a; } 981. an U_ l !i M. . o r , ra t( > >nv n ya. . . hir an et Julv,tient market anprovement over the 2 65 and an aljowni rate ut returr value : )f several senet (! tunes < overage a c hievai m ,
< ommon equ:ty ot 17 5 outstandlna trst mortga(m i980 Mu% ment's lon(0 ; m.m ho!ais un Innuary 7 l982 ranae ohe tve is to a< hieve ,
These l u mir' ha<i 'i i'me M 9 I n ent intenm n < 'rease and maintain a hxai < alrg( ' i
'unount o+' $ 1 *19 9 nulhuiI wa" unplementai, suby * 't to vverage ratio of dt jinctst n "Iuf ki, in N<:rth ( ,.ar< dina a:
An extraordinary oain of 3 pA timer (
- tol er 1H ,I he remauung
$4R s million will be !or11on of the pror x mi tn rm x mmi al 1982 throua,i r Rate Increases
'rease wcs unplemented the ex< hange The im-ates were raa
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a quested a 23.5 pement in- incmased 9 perent on Oc- Residential customers ac-crease in its South Carolina tober 18 and by another 9 counted for 26 percent of retail rates based on an percent on December 1, the Company's total electric allowed 17.5 pement return subject to refund. These sales in 1981, general r-on common equity. wholesale rate increases are vice and commercial cus-To bring South Carolina deigned to generate $46.9 tomers 18 percent, non-rates to levels in effect in milli n annually. For several textile industrial customers North Carolina, the Com- yeam, Duke and its whole- 20 percent and textile pany implemented a 4 per- sale electric customers have customers 19 percent. centinterimincmase, subject agreed to maintain panty Wholesale and other energy to refund, on January 28, between wholesale and sales accounted for the re-1981. An additional 9 per- North Carolina retail in- maining 17 percent. cent interim increase was sd rates. Negobahons Continuedeconomicgrowth placed into effect on Oc- am under way regarding
. and development through-tober 18 and the mmalrung m mhg h pany con- out the Piedmont Carolinas portion of this request on cept. msulted in a 1.7 pement in-December 1, subject to re- crease in the Company's fund. Appropriate refunds Electric Sales total customer base in 1981, are being credited to cus- bringing the number of tomers reflecting the rates ales of electricity customers served to 1.3 granted by the PSC. rose to 53.5 billion million as of December 31, kilowatt-hours in 1981, 1981' As this order represents only representing a modest 2.4 SS pement of the requested pementincmase over 1980. ,
amount, the Company in- Generationand l ' tends to file a new rate case Despite a 1.8 percent in- Capacity I unit i on ih. McGuir. Nuclear in South Carolina early in crease in the Company's l *'NeiU."s'lp*i.=UEis'eT i 1982. residential customer base, he Company con-
- an.or...a. Mecotr. unit I had msidentialsales rose by only tinued to rely ona fuelmixof
*Iio.Yh .".DoU. p=.35 Rates to the Company,s l 0.7 pement over 1980 due coaland nuclear for thebulk iio wholesale customers wem to mild seasonalweatherand of its generation in 1981.
energy conservation efforts. Coal plants contnbuted 74 Sales to commercial and pement to total generation, general service customers nuclear units 25 pementand m incmased 3.6 pement. hydroelectric facihties 1 per-
-A#%M.. cent. No significant amounts Sales to non-textile industnal of oil or natural gas were customers accounted for the used.
r - most significant gain, climb-M
~
ing 6.7 pement over 1980, Unit 1 of the Oconee Nucle-
.J ar Station was out of service and for the first time exceed.
, ed total sales to the textile in. f r six months of 1981. Dur-
' ing a scheduled outage for dustry. Sales to textile
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customers declined 0.5 per-refuehng ana required 10-year inspection pro-
.' / cent, reflecting economic cedures, the Company 4 conditions in the textile in, x
j [ dustry. discovemd that some bolts g te 6emal shield Wholesale and other energy in the reactor vessel had j " ~ + , . , sales rose 2.2 pement over failed. Although this was not
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the redesign and replace- A new summer peak was mt [ ment of the boiting system on August 5,1981, when [ :- . 3 extended the outage six customer demand mached E ' weeks, with the unit mturn- 10,602,000 kilowatts, 2.3 h 1 . ing to service in December. percent above the pmvious R , Unit 1 of the McGuire Nu- smnmer peakof 10,364,000 a e i p[ clear Station generated its kibwatts o> 21y 16,1980. 1 q 3 first kilowatt-hours of elec- A new winter aeak was t . 1 -E +1 . tricity on September 12 and established on Ja'nuary 12, ( N.. l , Vd.f i . .*1 N .h . by year-end had contabuted 1981, when customer de- 6 4.x - nearly 500 million kilowatt- mand reached 10,530,000 hours to the Company's pro- kilowatts,6.4 percent above duction. The unitis expected the pmvious winter peak of ( ? .; Y~. 4 ,g [. Z M L ^f & p
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to contnbute mom than four 9,892,000 kilowatts on 3 5 .) i 7 qY . P['Mk i :/ M.' 6 ]
! billion kilowatt-hours of elec- Febmary 5,1980. , H.~< ] J 4 tricity dunng 1982, incmas (A new system peak of 3 7 ' .1' Oii' '[
ing the level of nuclear 11,145,000 kilowatts was - '
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The 1,180,000-kilowatt McGuim unit is temporanly
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(( he Company's M Yb $ @9 y n w. ~ l ~ S.a J, operating at less than full -
- e. -c steam generating ~> - > c - m.% - .
<c capacity since the Company sydem again led the nahon Marshall Steam Station leamed that vibrations had placehonorsforbothoverall *The in fuelefficiencyin 1980' ac- baa) -== 'h ===' fiel*='
been experienced by units of and fossil-system perfor- Duke plunt in 1981. A Duke plant cording to ElecMc Lightand '* '" similar design. The Com- mance, Duke generating boi,*,'i3,"tE *'fi3 M* pany is evaluating this prob- * *^9"Z "- units captumd six of the top i lem and it is expected to be In its annual nationwide sevenspotsin the magazine's msolved by mid-1982. survey of power plant per- unit-by-unit rankings of fossd As of December 31,1981' f rm nee, the magazine units. Unit 2 of the Belews ranked Duke Power,s com- Creek Steam Station was the Company's generat ing capability totaled bmed nuclear and fossil named the most efficient 13,234,000 kilowatts, con- generating system fustin effi- single generating unit in the sisting of 7,423,000 kilo-ien y. In ddition, the nation in 1980. Companys fossil gemrahng watts in coal-burning units, sydem w s named the most Based on data from the 3,760,000 kilowatts in Nuclear Regulatory Com-efficient in the nation. nuclear units, 1,452,000 mission, Oconee Unit I was kilowatts in hydroelectric The magazine's survey was the most efficient pressunzed facilities and S99,000 based on 1980 heat rates, water mactor in the United kilowatts in combustion tur- the latest year for which in- States in 1980. bine units. dustry operating statistics am available. A generating Plant Additions and Peak Demand systems heat rate is deter-l Construction mined by the number of Progress eak demand for British Thermal Units re-electricity mached quired to generate a net fter more than mcordlevelsdunng both the kibwatt-hour of electricity. 10 years underconstmetion, summer and winter of 1981. In addition to claiming fust Unit 1 of the McGuire 7
Gemard 5sr=we 21s N Tes'un 17s M C n. Nuclear Station near as of December 31,1981, Current demand forecas O Charlotte, N.C. was with commercial operation indicate the reduction of awarded a full-power scheduled for 1984. Work work on the Chemkee plant operatina license by the on Catawba Unit 2 was hkelywillmsultininadequate Nuclear Regulatory Com- about 39 percent complete, resente man; ins and rious mision on July 8 and was with commercial operation capacity shortages in the placed into commercial ser- scheduled for 1985. 1990s. vice on December 1,1981. m a c-. % Construction on the The Company is beginning
=L====*=*= McGuim Unit 1 is the first Cherokee Nuclear Station pmhminary work on the Bad new generating unit to be near Gaffney, S.C. has been CmekHydroelectncStatior added to Duke's system substantially reduced as a a four-unit, 1,000,000-kik since 1975. result of the board of dime- watt pumped storage facihy Work on McGuire Unit 2 tors' decision on Febmary to be located above Lake
#m.o was about 96 percent com- 24, 1981, to indefinitely Jocasseein Oconee County, plete as of December 31, delay completion due to dif- S.C. All required state and 1981. Commercial opera- ficulties in attracting capital federal permits and heenses tion of this 1,180,000- on reasonable terms. No for this generating facility
!=f, ki'owatt unit is scheduled for new completion dates have have been obtained. Site T1 1983. %en established for the two pmparation work was initiat-Cl ~ Construction cutinues t Chemkee units, which had ed in July 1981. Constme-gm been scheduled for comple- tion will continue, however, d.h. ]atawba Nucfear Stat on tion in the early 1990s. only to the extent that the r msi. . io. 6... ... near Rock Hill, S C' Work rk on Cherokee Unit 1 is Companyis able to raise suf-ntinuing at a substantially ficient capital on reasonable Nhb,D='"n.EI*T*/
p..y. oi ia.. i. . .. on Catawba Unit I was reduced level, and work on terms. No timetable hasbeen
..d Stock Purchow Pl.. (b. low). about 89 percent complete
~
Chemkee Unit 2 remains in- established for completion of I termpted. As of December the Bad Cmek project.
.3 . ,* 31, 1981, Cherokee was W~ #
h ' about 17 percent complete. Plant construction and nuclear fuel costs totaled
/ Resumption of normal work $804 milhon in 1981, com-
,.jc(
levels on the Cherokee plant pared with $853 milhon in
<fD Mf depends upon several fac- 1980.
tors.Theseinclude theabihty
/
W f-k^' to achieve sufficient rates of (The management of Duke mturn to enable the Com- Power intends to recom-
+p w N" pany to attract new capital mend to the board of dime-on reasonable terms; amom tors at its Febmary board h VM i stable economic environ- meeting the withdrawal of
(( 4 2
]y/ ment permitting regular the Company's application r -
/2 sales of securities with for a construction permit for maturities that match the the proposed Perkins Nucle-p I(J P lives of the Company's ar Station. If the recommen-
[ assets; more realistic and dation is approved, the , consistent nuclear power Company intends to request i i regulation to provide a permission in each of its
- jwg. predictable schedule for regulatory jurisdictions to
("yj/J ( constmetion and operation; mcover costs related to the i and a mom moderate rate of proposed facihty. The Com-
- m. inflation. pany hasincurmd no materi-8
- 3 ,. -J ' p M g. 4 ~- g .. .
' Sg"3-t:Ay
.., L' y - ki bNi
- . $ $*k . rJh. ts. W, , .. , . . ta.y, .-
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W . .i_ .g g . f, y 5h r. 7 .' - f - ; ; ; T z-, 5? ., yy,. -l ,,l'C' .'- al costs and has no com-e g . 3, 77, . ;;p nutments the cancellation of +
'e W - 7. . . #. i
? u h,s . . -
-.3.s
,. 6 , N_ ,..m6 .--
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whrh would result m any . M7
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.4
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.-s
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WygmW y .f <. 3. : y .- %gg , . . C, . =i.Q? _ ,. j rl ._ N 'q.' y, . g., N3.1 Nuclear Fuel *S -
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~-
(*3;jgy p[r ; O ~ c . ' '~ ; p . . gig &; A Regulation s., [ ~p~r 44p.
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tier more than : - ' fE .( . . ? A , ;?.7 , ' ~ ;.. . $ ; ', ^ #h', c h ,.
- 1 Ppd,. K
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two years of regulatory k'
; .[ ~ [ M ;g ,.
delay, ti.e Company was s
, % 'S .e~ .w.;;. v Ny . ?..w 1. f #.
*- A$~'
,o a n :-
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.-s
=
tssued a license by the . g%+ . .2 v^-
- ~.
e== . e4.% . a n s~v;*= x.
.se.of w :
<. . .e
. 4 . ,
Nu< : ear Regulatory Com- - . -~nw. 4.- - , . . . .. ' *. '. o .. w- ,
. 10W ."
.. . . ~ .
mmonon August 10.1981 - Y. ,. .
- i. _ n. ... .'. <. s y
'F.. ,, , f C < .
to store 300 spent fuel a z'~W,-
-W 45 amembhes from the 0,coneeghw/%f.V %..<;yE 4~ &
' ~
> 1 nw s
. ; .. =.<
Nt lear Station at the i M. t j.m'. & . U-
~
. f ., : "( 7 j % 2 Y
- 4 [{l 7
McGuire Nuclear Stamn . j, .4 . . 1: ,J'- W . j s p M : ~:: ; %+ . 2 0 m. ? .f 4x ("j s ib.'~ Shipment of the assembles - ' -
- h< &. =-
to the Mc Guire plant for Dividend Dunag the fourth quarter of Each .p.nt fu.1 a..embly storaae t1as bexran and w1u . hine a io ih acc =ir ==ci ar Reinvestment 1981 ,3.065 c shareholders siano nor .ior .. i. pocko..a io occur ever a hve-year . .p.cioiir a i...a..< ua penod' exterlding N1e uSeful partlClpated m the plan. i , co ,,i ., .. ,sio, 3a.ooo eglSlatlon endcted representlng about 8.4 with Pmda (obW in complianc.
!!te of ex1 sting starage .'rio. .' f+a+rai .ai.ey .
by Congmss as part of the pement of the +otal ehgi;1e oion. facihtles at the O.coner plant E enomic Recovery Tax shamholders. By enrolhng in through 1989 Act of 1981 is expmted to the plan, shamholders am Tne Compur, proposed the bolster parncipation tn the able to have their dividends I shyment and storaae plan m Company's Dividend Rein. automatically remvested tn i 1978 m articipation of a vestment and Stock Pur- additional shams of common l potent 2al shortage of storage chase Pian in 1982. Under stock and make optional captcity at the Oconee plant ths legislation taxes on as cash payments of up to fo!;owmq former President much as $ 1,500 of thvp $1000 per quarter toward Carter's 1977 dension to dends re:nvested will not the purchase of additional han commercial repro w become payable in most common stock without pay-ma of spent fuel cases until shams purchasmi ment of commissions through the plan are sold If the shams am heid for mom More than $45 milhon has Employees than one year the meome been mvested in common T +he C~ ,mbunvT"houah F ved 'T 'T'"' I m' WLU be .axni as .eno-term stock through the plan smce-capita: aatn
~
1 emIts Inception In 1974
~
cluding $ 1() m1H ion tn 1981
- m-ple as o! Nember 3! scha2&i to exptre m 1985.
i 1981 empared with this tax deterra! prov;sicn Inqu: ries Joncerning the 1 O j i f ; wpie on Dwem m3kte P4rtl,upatice in the pk and how t works shoub t h>r 31 1W About 7f Ompmv s program a mor" be tilrectai to the Invester of these empicyms wem m athtve N U' ment q u hel30cns Ot1 riment Duke
\ olVesI p' nid r .i i th 2 ft wer O 'ny m y [' &X dtN1aM and '!!str e th ' '
Il r';:1J t dhen J 'heJ m ; un <+!89 '[;a r!c + +e N< QeneraCIL I ' 1; 7[it:Ps T!U !;e G '1 <n cw in [ib [ M 4j
1 1 l l 1981, Duke designed to improve prof- struct on, employees at the Power's 20.000 em- itabaty while safely render- Catawba Nuclear Stanon In early ployees were chal- ing rehable service. lenged to improve on - and at McGuire Unit 2 com. pleted mom work units than their past perf ormance
- In ethetency' the Duke the estabhshed goal. (Work system heat rate was further through a Corporate Goals units am a measum of pro-improved from its award-Prog ram . In nine of 11 auction used in Duke,s con-
"nnning 1980 level categones, Duke people ex- struction program.)
ceeded the estabhshed goals
- In plant design and con-
- In safety, disabhng in- l Duke Power line crown irighti suc 3 .. j- - -
g i .; Mud $ W
, . _ ; .- .,j j, . - es l cessf ully reduced the length of .,y-+ 4 y i _. w + s,-
,g '-
.t ..
pow.r ouiage. b , i s perc.ni. , , . . . n" ;) egg ,. e.f. ,e , , . - -- : cent from the average over I
$/, : ./ -
+
.. ; (beg y. ' *+ ,
4,, Q . c', . the past hve years vehicle . 1.
~
1 g . [ , ' f * *y.' . '.mgaccidents and ingnes ort also requ I.? ' . \ - ' medical attent1 l i- * % 3
. ,d '17.' ;7,.f
..? ; y f. '* . -
- . '. ; were substantially reduced l
' p 7 " .5 '. .*i s p - s
; . , : ,. . . -. i;' from past .evels-
', . #' 45 . : l: - _ ;a .y %, ..
'f - -
n
'. .
- In serv 1ce rehab:hty.
a /* .L> 3: , - 7 * +. i . .s
. g 7 : power autages were held to
...f.,*, ~
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- ' ~( a totd of 59 ininutes per
~ -
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=.- .. , 3"f# y+, . . ..y. customer from an average of
+*. ' ,, g p#
. .. Y c . f 68 minutes per customer A ;-
- -(y-l, , . - .f , over the past three years.
.l ,
4.- .. . . .
- 7. % .
.. . .- l;; .
, In load managemer.t the
~~
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'. .m goal was achieved for p.N b., , . .- . ,. .
restraining growth in both
..f.- ,7 . ~
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surnmer and winter peak de-
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.I I Achievement of these goa!s will be rewarded by the
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4 . g. Company with an additonal
; /rf y.' 50 percent contnbuton to V. f.1- -g ' . : $. . , ,
-- ^f1bpen ., . -.. .,:P , , 46% the Employee Stock-Pur-
;- i ..] i _..d 1. 'I ~' .-
h [A .Q:g ;,. .L ? chase Savings
~ .
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a: c~ r 3.. Some new goals already j~ .
~ . y b; q.] . . : g .. . .j have been set tor 1982. In-3 :yf 1 :
~
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cluded m 1982's package
--( t. . M . ~ f-. I (
!- g. 4. 4 l am specthe goals mlated to j .c p !. M N,k ..(..
" $ % s ,lp[f{ Cfirmative action, load
,,.,=- safetv. serv]ce rehabity, af-
- 1. . . J.7, 4 3 .- -
.[9.k management, plant deagn
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. . %. h :f. y .. ( qa- . ..' and construction, nuclear
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[" [= GEE L production. generating ef m,, .. . .;.- .
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- The success of tLs program
. example o' Duke
{ . g .J " s^ - - Powers determnaucn tr.c
. s: :.- . . . .- abaty to 'make happm
l 981 was marked for ed heights; regulatory and nuclear facihties into opera-a Duke Power by the bcensing heanngs bogged tion m the Uruted States to-
;; commercial operation down m tangentia! issues; day often exceeds 12 years s of the hrst urut of the and criteria for safety with an average cost of mom McGuire Nuclear Station. In systems changed virtually than $1,500 per kilowatt.
future years, McGuire Urut 1 overrught, particularly in the Many of the problems that will contribute bilhons of emotionally charged at- wem encountered and over-kilowatt-hours of electncity mosphem that arose follow- come in bnnging McGuire to homes, businesses, ing the accident at Three Unit 1 into operation persist hospitals and mdustries Mile Island. in varying degrees today throughout the Piedmont Despite these obstacles, the and promise to continue in Carolinas- McGuire urut was brought years to come. In meeting McGuire represents the on hne in less time - about these future challenges, culmination of mom than a 10 years - and at a lower Duke Power will be guided decade of perseverance, cost - appmximately $830 by the same pnnciples of adaptatior, and innovation in per installed kilowatt of dedication, imagiration and overcoming the severe capacity - than other com- cooperation that took problems the utthty industry parable units. The an- McGuire from design to faced in the 1970s. Capital ticipated time span reahty. costs mached unpmcedent- necessary to bring new
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The EmM power plants with its own sequence of construction forces, Duke Power has progmss. ChaBenge created a unique working McGuire Unit I was nearly oving the environment. This made it 80 percent complete when McGuire Nu. possible to capitalize on the 'Ihme Mile Island acci-Mclear Station cooperative efforts, close dent occurred in March from the draw. lines of communication and 1979. As a direct result, ing board to a power. shamd technical expertise. numerous modifications to producing complex capable Meeting the existing hardwam, monitor-of meeting the electricity Challenge ing systems and control needs of 350,000 homes displays were mandated. consumed more than ore than 300 Many new safety systems 40,000,000 hours of work new regulatory guidelines wem developed and incor-by Duke Power's engineer- and mvisions wereissued for porated without dismpting ing, construction and nuclear facilities between essential systems and equip-operating forces. 1969 and 1978. This up- ment almady in place. The plant stmetum contains surge in regulatory re- Duke's engineering, con-enough concmte to build a quirements added an esti- struction and operating sidewalk from the 191-acm mated $590 per installed forces, working aggmssively site to Montreal, Canada, kilowatt of capacity to the through established chan-and enough steel to build average cost of nuclear nels, incorporated virtually w rly 10.000 compact plants in the United States. all of these modifications cam. The elaborate netwof k Changes in seismic regula- within only 18 months. of interconnecting pipes and tions, for example, required valves that weaves through review of the design and in-gggg the plant could provide stallation of more than the Goal plumbing to more than 30,000 piping supports and 2,100 homes. And the multi- hangers for McGuim Unit 1. t 2:46 ^'*' " ple monitoring and state-of. Monday, September 12, the-art safety systems are To minmuze the impact of 1981, the first kilowatt-hours linked by more than 600 changingcriteriaonboththe of electricity from McGuim as of cable' completion and total cost of Unit I wem transmitted to McGuire, on-site teams of Duke's 1.3 million custom-The immense physical design engineers were ers. dimensions and technical dispatched to work side by sophistication of McGuire side with field constmetion Today, McGuire Unit 1 is in represented an ambitious forces to develop workable commercial operation, sup-engineenng and construc- solutions to difficult and com- plying needed electricity to tion challenge. The project plex problems. Sophisticat- meet the growing energy was made even mom for- ed computer systems wem demands g g' of the Piedmont midable by a staggering installed at the site to provide level of exacting regulations immediate accem to design
~
9 u",y,qj",nj'a
, d ',1yj,nfl, and a host of mandated data.
design and construction modifications both before Additional manpower and W %. sophisticated electrical equip-In*n8 8nd d18 Play panels (lefth and after the Three Mile scheduling teams were ssigned to the project to Island accident. assure that required As the only investor-owned modifications were incor- # electric utlhty in the nation porated with minimal delay 7 that designs and builds and to maintain an orderly 13
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- A comprehensive load Chauenge mine earnings and fixed management program was charges coverage. In 1973, implemented to restrain he McGuire Nucle- the Company's first mort- growth in peak demand as gage bonds were down- an altemative toconstructing
( i far Station repre-sents an investment rated from double-A to new generating facihties. of $1,800,000,000 single-A and the market I
- the equivalent of spend- pnceofitscommonstock fell The Company also sought ing $500,000 every day for to aslow as $10 per sham- improved earnings through almost 10 years. about 60 pement of book m re efficient operations, Vg"* more aggressive rate ap- l Raising thisenormous sum of plications, more timely ;
i capital in an economic en. To mstom the Company's recovery of rising fuel costs vironment plagued by financial strength, a long- through standardized fuel spirahng regulatory costs, range financial plan was cost adjustment procedures, ' 4 unprecedented interest adopted to strengthen its and the inclusion of con-rates, mcord inflation and in- capital stmeture, incmase in- stmetion work in progress in i adequate rates severely ternal cash generation, and rate base. threatened Duke Power's improve the level of fixed ! financial integrity in the changes coverage. Both in-termediate and long-term Achieving l 1970s. the Goal To ovemome these adverse stepswemtaken: financial forces and com-
- Construction budgets hrough these ef-plete McGuire, manage. wem cut back by deferrin9 forts, Duke Power not only ment took steps to scheduled operation of new successfully financed strengthen the Company's facilities, including a two- McGuire but also mgained !
capital structure, reduce year postponement of much ofits financialstmngth. , both operating and capital McGuire. Management is committed I costs, restrain growth in
- Negotiationswereopened to building even greater peak demand and obtain for the sale of major portions financial stability and financ-mom responsive mgulation of the Catawba Nuclear Sta- ing flexibility upon the foun-and rate inemases. tion to groups of the Com- dations which have been ,
As a msult, the Company is pany's wholesale customers. laid. far stronger today. The fi- y o.m. i. ..i., .a...ii... : nancial goals that were -
$f".T* ","dl,',dl"ll""**f,*,'%
brought into focus during =l2ls;== y;Dg,e,, 1 c. constmetion of McGuim re- -
. in. co-,..r . to a x. .
main an integral part of the ,
"*"'**""- l j* 1__
Company's hnancial plan- ! ning. - - . - - - Meeting the . . Challenge In the early 1970s, rapid incmases in operating costs and interest rates, new environmental mquimments and escalatmg constmetion >1 c. j costs combined with inade- . A-1S
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The Licenshag heensed and put into opera- the United States Supreme ChaBenge tion within seven yeam. Court. When plans for McGuire Regulatory authorities also the were made public in the ear- ultimately ruled in Duke's necessary gov- ly 1970s, however, several favor on allissues. But short-Obtaining emment heenses residents near the lake Nor- ly before the final operating to build and op man site voiced concerns license for McGuire Unit 1 erate the McGuire Nuclear about the environmentalim- was issued, the Three Mile Station required more than pact of the phnt. The Com- Island accident occurred, 10,000 hous of legal work pany's initial response was resulting in a 17-month and the pmparation of mom one of developing dialogue, moratorium on the issuance than 50 tons of documents. recognizing that the of all new nuclear plant Thmughout thelengthy pro- technical complexities of licenses. cess, a series of obstacles nuclear power are often mis-was encountered: concen- understood. Achieving trated efforts by anti-nuclear Some opponents remained the Goal activists to block both con- unconvinced, organizedinto struction and operaten of a formal association and n July 8,1981, the plant; indecisiveness on used every available legal McGuire Unit 1 was finally the part of regulatory maneuver over the ensuing granted a full-power operat-authorities; and a 17-month 10 years in an attempt to ing license. freeze on the issuance of all new nuclear plant licenses block construction and, The experience that was later, operation of McGuire. resulting from theThree Mile gained in deahng with op-Ishnd accident. To counter the claims of op position and in meetng the ponents and expedite extensive demanas of Despite these difficulties, regulatory action on regulatory authorities will McGuire Unit 1 became the McGuire, Duke prepared prove invaluable in obtain-fimt contested nuclear facility and submitted voluminous ing hcenses for future power in the nation to be granted a reports detaihng the various plants. full-power operating heense design features of the plant. . . .
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by the Nuclear Regulatory This material was sup- V1.. : twy authorttles. Duke prepared
??.:. -.;$ $ .i Commission following the piemented with extensive "m".* t.""'ff.f 4 I.'hojfi Thme Mile Island accident. environmental mports on the 4 *';i"l4,;,*,"2d, ha
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rological, biological and Meeting the quatic conditions of the 1 i.
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uke Power had scienusts confirmed Duke's [. ;g,. E .. . never faced formal, orga. fadings, as did regulatory _ . , p- . nized oppor tion to the con. staH meam. y. . stmction of a power plant Opponents also filed federal .
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pnor to McGuire. Indeed, hwsuits challenging the con-no objections were raised stitutionality of congres- ;.,,-~ .
- ;. t when plans for the Oconee sionally estabbshed hmits on 'f, -E' Nuclear Station were an- liability claims resulting from ~*'
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nounced in 1966. Construc- a nuclear accident. After .c .; . . ~ ;.e d i. tion pernuts were issued for four years of extended pro- " .' . . : V~ 6 Oconee in less than a year, ceedmgs, the hwsuits were .;*.. 3' 2- ~j-and the plant was built, decided in Duke's favor by 1 C L ~* - 17
. he MSu:re Nucle- viser and a techraca] advisor plant moveci toward com-or Str a statiea e or duty at all tmes to pletic: these nu riear
[,y by rr :re mar 500 morntor the piant's multple, spec:ahsts worked closely
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higruy tramai pro- redundant safety systems with constmcton forces and fessionms to assure safe. Duke F,ower recruits and, des:gn engineers to coor-rellai31e and e++1clent opera- . cinate ft:ks i design enu21nce- ! trrns its own Tuclear power , . n tion m yeirs to come . . ments and develop operat-cperatom arn tecrmicians to tna procedures .# hen con-ihe mer. and' women who maintam ans:stentiv hian. struction was completed' '
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- hemistry and power plant Techucal Tra:nmg Center aucteo extensive eauipment operatons Thu advanced tac:hty :s and satety system tests, equipped with chemistry ultimately Ennging the p! ant Each contro! roem operator, and h%!th physics laborato- into operation v
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cesigned contro1 room simu-haustve classroom and m- , 1
.ator to g ve prospective professionals contnues on a plant trainmg and must suc- operators first-hand, prac. regul6r basis throughout cessfully pass a rigorous t1 cal expenence in plant pro- ,
their careers This assures seres of wntten and oral cedures and operations. that employees retain a state-tests. At least two licensed of-the-art knowledge as long operatom, a heensed super- As constructon work on the as they work at McGuira Duke conducts its own training 1; - C . .' course for nuclear plant opsra- . ,' ' eJ . s
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l i hen Duke to an actual Imd of 8,000 than antcipated and is ex- ) , Power em- kilowatts. IBM will save an pected to grow in 1982. barked onits echmated $420,000initsan-Established programs use Load Man- nual power bill and redu rate incenhves to encourage , agement Program in the the buildings annual energy customem to upgrade thein- ! mid-1970s, the initial goal consumption by more than sulation of their homes, to l was to reduce projected 14 million kilowatt-houm. shift many daily activities , peak demand 1,300,000 Theseeffortsearned theIBM from on peak to off peak facility a citation from the hours, and to allow theCom-l The goal today has been ex- Southeastern Electric Ex. pany to interrupt service to panded to reduce projected change as the most outstand. electric water heaters and winter peak demand mom ing example of energy effi. central air conditioners dur-than 6,000,000 kilowatts by ciencyin theindustnalsector ing emergency periods. 1996. in 1981. These achvities continue to The Company is seeking Duke also introduced the be expanded. In 1982, for through its load manage- most ambitious element of its example, residential custom-ment achvities to ehminate residentiall dmanagement e in North Carolina will be the need for six addihonal program in 1981: the ffered help in financing generating units, avoiding Residential Conservation energy-efficiency improve-more than $10 bilhonin new service. This program offers ments with a program to ab-plant investment. the Company's 1.1 milhon sorb a portion of the intemst n privately arranged loans. More than 40 different pro. residential customers per-grams for msidenhal, com. sonahzed and comprehen- The compmhensive effort is mercial and industrial sive energy analyses of their on schedule with an ac-l customers have been homes to help find ways to cumulated reduction in pro-4 developed and are being ac- reduce energy consumption jected peak Imd of more tively promoted to achieve and lower power bills. Initial than 1,000,000 kilowatts at the 19% gmls. Oneleading response has been greater the end of 1981. j New York secunbestrm has labelal Duke'sImd manage- ~ T" ' " ((fI l"15=5 ",l} Du.P.,,wgima , , , ment efforts the "most aq- -
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greSGive"in the nation- . { compu .r .q Ip .a a a I turing p; ant (1.ft) la Charlott.. Theextentof theCompany's - N.C. by 14 alltion kilowatt-hours. succem in Imd management was exemphfied in 1981 by ', its work with IBM in minimiz-ing the energy consumption $. x of its recently completed V a i i one-million square-foot .i s manufacturing plant for 4 bank computer equipment . p . M in Charlotte, N.C. ; f\!-[f. y i Duke's techrucal specialists, ' working closely with IBM's , , , , , , L l management, helped re " " " - 4 duce the electne demand of - the facihty from an initial estimate of 14,000 kilowatts R 7VT. 2%c wa
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i Responsibility for Financial Statements The fmarnal statements of Duke Power Company were prepared counhng controls are continually myiewed for effecbveness and by management which is n=poele for their integnty and objec- am augmented by wntten pohcies, standards and procedums, hvty. The statements have been pmpared in confomuty wth and a strong program of intemal aud:t. generally acwpted accountng principles appropnate in the cir- , cumstances to reflect in all matenal mspects the substance of h boand of duectors pursues its oversight role for the fmarcal events and transacbons that shouki be included and the other in- statements through the audt comrruttee, composed solely of formahon in the annual report is consistent with those statements. duectors who are not officer:: or employees of the Company. The In pmpanng the financial statements, management makes in- audd committee meets with management and intemal auddors formed judgements arxl eshmates of the expected effects of penodically to rtnnew the work of each and to morutor the events and transactions that are currently being reported. drrharge by each of their responsbihbes. The audd comrruttee also meets periodically with the Company's independent auditors, b Company's system of intemal accounhng control is designed Deloitte Haskins & Sells, who have free acmss to the audt com-to provxie rmsonable assurance that asets are safeguarded and mittee or the board, without management preent, to chscuss in-trarunctions are executed in accordance with management's temal acrountng control, audding and fmancal reportng mat-authonzation and recorded properly to permt the preparation of ters. f:nancul statements in accordance with gmerally accepted ac-counbng pnnciples. 'lhe Company's accounting controls provide rearnable amurance that eners or irregulanties that couki be matenal to the financal statements are prevented or wouki be
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detected by employms within a timely penod in the normal Porter A. Hauser course of pedorming their a:ngnal funchons. 'Ihe Company's ac- Vi Pmsident & Controller Auditors' Opinion Duke Power Company; We have examined the balance sheets and the statements of of its funds for plant constmcbon costs for each of the three years capitahzation of Duke Power Company as of December 31,1981 in the penod ended December 31,1981, in confomuty with and 1980 and the rehted statements of income, mtained eam- generally ao pted amountng pnncipks apphed on a consistent ings, and source J funds for plant constmcbon costs for each of basis. Se three ymrs in the penod ended December 31,1981. Our examinabons were made in accordan with generally accepted audding standards and, accortiIngly, included such tests of the MoaNMA94 bb accountng records and such other audibng procedures as we Deloitte Haskins & Sells consdered necessary in the cucumstan s Certhed Pubhc Axountants In our opinion, the above menbonal financal statements present fairly the hnancial position of the Company at De mber 31, Charlotte, North Carchna 1981 and 1980 and the results of its operabons and the source February 15,1982 21
\
{ StatemenN of Income I DUKE POWER COMPAFI Year Ended De mber 31 sen in hans 1981 1980 1979 Kilowatt-Hour Sales (thousands) 53,547,929 S2,311,276 50,323,175 Electric Revenues (Notes 1 and 2) $1,908,454 $1,682,822 $1,492,SS7 < Electric Expenses Operation Fuelusedin electnc ceneration. 790,967 680.693 589.402 Net intemhange and purchamd power (cmdd) . 25.068 (12,908) (17,254) Wages, benefits and matenals . 264,488 211,014 180,338 Maintenance of plant facihties 131,670 114,S97 94,S98 Depmciahon and amortization (Note 1) . 142,899 131.441 125.437 Generaltaxes 139,140 124,422 112,65S Income taxes (Notes 1 and 7) 137,872 1S3,463 1S3,504 Totalelectric expenses 1,632,104 1,402,722 1,238,680 130ctnc operating income 276,350 __ 280,100 253.877 Other income (Notes 1, 7 and 10) Allowance for equity funds und dunng construction 159,285 1S0,846 121,701 Eart.gs of subsidianes, net . 14.662 3,418 10.447 Other, net (deduction) 28,791 (3,299) (20,314) Income taxm-other, net (deduction) (9,442) (982) 16,320 Income taxes-cmdit 60,747 58,382 40,458 Totalotherincome. 254,043 208,365 168.612 Income befominterest deductions 530,393 488,465 422,489 Interest Deductions Intemst onlong-term debt . 245,070 220,271 179,363 Otherintemst 11,694 17,287 9,752 Allowance for bonowed funds used dunng construction (cmdit)(Note 1) (62,622) (60,184) (41,386) Totalintemst deductions . 194.142 177,374 147,729 NetIncome 336,251 311,091 274,760 Dividends on pmfened and prefemnce stocks . 57,895 58,612 S2,562 Earnings for Common Stock $ 278,356 $ 252,479 $ .222,198 Common Stock Data Average shams outstanding (thousands) 87,313 81,985 77,168 Eamings per sham . $3.19 $3.08 $2.88 Dividendsper sham . $2.08 $1.95 $1.83 Sw notes to hnancialstatements. 22
I Statements of Source of F2nds for Plant Construction Costs DUKE IOWER COMPANY Ymr Ended Decerrber 31 3 w hr,a rh w n N 1981 1980 1979 Funds from Operations Net income . $336,251 $311,091 $274,760 Non fund items Depnxnation and nuclear fuel amortzahon . 224,675 210,600 190,110 Defemd income taxas and invatment tax crrd:t, net of amortzabon . 109,572 68,198 91,991 Equity component of the a!!owance for funds uxd dunng condruchon (159,285) (l50,846) (121,701) Other, net (13,146) 2,989 (S,854) Funds from operahons . 0 8,067 442,032 429,306 Divdends pel (239,598) (217,618) (l93,S85) 258,469 224,414 235,721 Funds retuncd in the buaness . Funds from Financing and Sale of Assets-Net Proceeds Sab of an intered in the Catawba Nuchar Stabon (Note 10) . 520,562 - -- 76,254
- Nuckr fuel tmsts 42,248 30,664 Common stock 35.954 10S,829 131,561 First mortgage bonds . - 271,1SO 295,768 Preferrrd stock - 49,323 49,251 Tenn note . - 10,000 -
Incrum (decrum) in notes payable for condruchon (25,650) 85,000 112,000 Funds from Imancing and sab of asseta . 573.114 SS1,966 664,834 Totalavadabb funds 831,583 776,380 900,S55 Increase in Working Capital Requirement . (92.946) (31,000) (43.S36) Retirements of Long-Term Debt and Preferred Stock (93.551) (43,21l) (150,412) Plant Construction Expenditures 645,086 702,169 706,607 Equity component of the allowanm for furds uaxi dunng constmenon . 159,285 !S0,846 121,701 Plant Construction Costs . $804,371 $853,01S $828,308 Summary of Plant Construction Costs Prtxiuchon $504,292 $590,420 $571,023 Transm:ssion . 36,233 51,300 42,566 Dtstnbuhon . I12.073 92.990 89,841 General 22,557 25,000 26,812 Subtotal 675,155 759.710 730,242 Nuchr fuel 129,216 93.30S 98,066 Plant Construction Costs . $804,371 $853,01S $828,308 See notas to bnancual statemens. 23
Balance Sh is DUKE POWER COMPANY Assets December 31 (dans m aban*> 1981 1980 Electric Plant (at ongnal cost - Notes 1,6 and 11) Bectnc phnt in seryx:e . 85A82A74 $4,419,1S2 l Imr acx:umubted depremtion and amortization 1.842A31 1,629,109 Dectnc phnt in service, net 3A19A43 2,790,043 Constructon workin progms 2.178.484 3,114,807 Totalelectne phnt, net . 5.998.337 S,904,8SO Other Property and Investments Other property - at cost (less accumuhted depmciation: 1981 - $6,781: 1980. $4.5S1) 28,444 22,447 invatments in and advarxxs to subadenes (Note 1) . 54.981 34,373 Other investments - at cost or less (Note 10) . 22.592 8,84S Total other property and invatments . 104.017 6S,665 Current Assets Cash (Note 9) 4.528 1,835 Re ivables Oess allowance for losses: 1981 - $3,998; 1980 - $4,064) 189A38 128,S49 Matenals and supplies - at average cost Coal . 128.581 133,156 Other 93.457 79,SS2 Pmpayments . 8.172 S,334 Totalcunentassets 419.772 348,426 1 Delerred Debits Debt expense, being amortized over terms of wbted d6t . 3.113 3,282 Other . 5A35 S,951 Totaldefeneddsits 8,948 9,233 Total Assets 88.531.044 $6,328,174 See notw to Enancialstatemenbr. 24
Capitalization and Liabilities Dewmber 31
/dr/ Jus as barra) 1981 1980 Capitalisation (we Statements of Captahzahon)
Common stock equity $2.100,935 $1,969,140 Preferred and preference stocks without sinkmq fund requirements . 388A10 395,858 Preferra.1 stocks with sinlung fund requirements . 308,874 316,SS9 long term debt . 2.545,694 2 S94,008 Totalcapitahzabon . E,351,9E 5,27S,S6S Current I. labilities Accounts payable 87,290 61,127 Intermt accrued 71.615 71,056 Taxes accrued . 59,958 45,610 Other . 26,872 24,282 Total 245.735 202.07S Notm payable for const:uchon - pending permanent financing (Note 9) . 171.350 197,000 Current matunbes of long-term debt and prefermd stock . 79,646 74,110 Totalcurrent lubthbes 496,731 473,18S Accumulated Deferred Income Taxes (Notes 1 and 7) . 419,958 374,684 Deferred Credits Investment tax cruit (Notes 1 and 7) 249.208 193,276 Other . 13.234 11,464 Total deferred credita 262.442 204,740 Commitments and Contingencies (Note 11) Total Capitalization and Liabilities $6,531,044 $6,328,174 Ssa notas to BnancrJ stakmenb. 2S
1 I Statements of Capitahmtion and Retained Earnings DUKE POWEll COMPANY Capitalization De mber 31 siin w wnAi 1981 1980 Common Stock Equity (Note 3) Common stock, no par, 150,000,000 and 100,000,000 shams authonzed and 88.482,596 and 86,294,416 shams outriand:ng for 1981 and 1980, respectvely $1,579,093 $1,535,895 Retamed eamings 529,842 433,24S Totalcommon stock equity 2,108,935 1.969,140 Preferred and Preference Stocks Without Shiking Fund Requirements (Note 4) Preferred stock S75,000 375,000 Prefemnae stock 13,610 20,858 Total pieferred and pmfemn stocks withwt sinking fund mquirements 388,610 395,858 Preferred Stocks With Sinking Fund Requirements (Note S) . 308.674 316,559 Long-Term Debt (Note 6) First and refunding mortgage bond; . 2.376,250 2,418,000 Sinking fund debmtums,4 7/8%--due 1982 25,000 25,000 Tenn note,9.025%-due 1985. 8,500 10,000 Pollution control obhgatons,75% of pnme rate-due 1983 2,500 2,500 Capitahzed leases , 101,579 103,862 Nucker fuel trusts 125,000 125,000 Unamortzed debt decount and pmmium, net (15,489) (16,244) Current matuntes of long-term debt . (77.646) (74,110) Totallong-term debt 2,545,694 2,594,008 Total Capitalization $5,351,913 $S,275,56S ; l Retained Earnings Year Ended December 31 win w wnw 1981 1980 1979 Balance-Beginning of ymr . $433,245 $343,225 $266,173 Add-Netincome . 336,251 311,091 274,760 , Total 769,496 654.316 540,933 l Deduct Dividends Common stock. 181,703 159,240 141,035 Preferred and preference stocks . 57,895 58,612 S2,562 Capital stock expense . 56 3,219 4,111 Totaldeducucns 239,654 221,071 197,708 Balance--End of ymr $529,842 $433,245 $343,225 Sw natus to hnancialstatement 26
Notes to Financial Statements DUKE POWER COMPANY 1.Sumrnary of Significant Accounting Policies A. Additions to Electric Plant. % Company capitahzes all D. Subsidiezries. h Company accounts for investments in constmcuon-rebted dueet hbor and matenals, as well as ind. met its subsidanes, all of which are wholly owned, usmg the equity constmeton costs, including general engmmnng, taxes and the method. See "Subsidenes" on page 42. Retained eamings include cat of money (allowance for funds used dunng construebon). W $41,234,000 of urdistnbuted earnings of subsdanes at emt of mnewa!s and betterments of units of pmperty is capitahzed; December 31,1981. Dividends mceived from subsidanes were the cat of repaus cad repbcements representng Ims than a unit $981,302 in 1981, $1,675,000 m 1980 and $5,800,000 in of property is charged to electne expenses. h onginal emt of 1979. property retred, together with removal costs less salvage value, is chargai to accumuhted deprecation. E. Income Taxes. h Company and its subsidans hie a con-sohdated federal income tax retum. Iname taxm are allocated to B. Allowance for Funds Used During Construction (ADC). each company based on its taxable income or loss. ADC is an accountng pmcedum whereby the net composite in-terst ard equity costs of capital funds used to firance constmchon Income taxm are allocated to dectre operatng expense and to non-electnc operabons under "Other Income " The " Income taxes-am capitahzed in the same manner as constmebon bbor and cred2t" chssihed under "Other Income" results from tax deducbons material costs. ADC, a non-cash. nonoperatng item, is recog-d interest cats relahng to investments in non-uthty propernes, nized as a cost of Electne Phnt with offsettng emits to 'Other manly CWIP not included in rate base. Income and Intemst Deductions because, under estabbshed reguhtory rate practces, a uthty is pennitted to include a fair Deferred income taxes am pmvided for tming differenca be-return on, and the recovery of, thee capital costs through their in. tween book and tax income, pnncipa!!y resultng from ac lerated clusion in rate base and in the provuion for depmciabon. tax depreciaton, capitahzed taxes and employee benehts, cost of rem val, and nuclear fuel dispmal costs. ADC, which is compounded semi-annually, was calcubted on average embalded rates (net of apphcable income taxes) of 8.67 Investment tax credit is defened and amortzed over the useful percent, 8.10 pement and 8.01 percent for 1981,1980 and hves of the related propertes. At December 31,1981, the Com-1979, rmpectively. pany had unused invatment tax cmit approximatng $60 m lhon, which will be available for use through 1996. North Carchna statutes mquim that capital expendtures for con-struebon work in progress (CWIP), incurred on or after July 1 1979 and requested in rate apphcahons after such date, be includ-F. Fuel Cost Adjustment Procedures. h ComW; has pro-cedures in all three of its reguhtory junsdictions to adjust rates for al in rate base for ratemalang purposes. Under such statutes, uthbes are permitted to contnue capitahzing ADC with rw t flumatons in fuel costs. Procedures for North and South Camhna CWIP not included in rate base but am not pemutted to do s M Wes de fa ped mm d W e e provision for changmg such costs in base rates. With respect to with respect to CWIP included in rate base. At December 31, South Camhna, the Company contnues to mflect in revenues the 1981, $144,841,000 of CWIP was included in North Carc'hna d2ffemnce between actual fuel costs incurred and fuel costs base and therefore excludal for purposes of capitabzmg Mh base ma Me h b &M jurisdrhon provide for monthly fuel cost adjustments. C Depreciation and Amortization. Provisions for deprecu-bon are rewrded using the straight-hne method. h year end composite weighted average depreciabon rates wem 3.44 percent for 1981 and 3.33 percent for 1980 and 1979. All coal-fued generatng units are depmcated at the rate of 3.57 percent. Beginning October 1979, the depmciation rate on nuclear plant was mvise.1 from 3.57 percent to 4.00 percent. This rate includes an allowance for decommissioning costs. However, the Company is continuing to evaluate the impact of such costs. Provisions for amortizabon of nuclear fuel, which are included in "Fue! used in electnc generation," am recorded using the unit of producton method. Because of the present uravaihbthty of reprocessing facihties. nuclear fuel amortzation includes an eshmate of drposal costs. 27
- 2. Rate Matters General rate incmases since January 1,1979 am as follows (dollars in thousands):
- Percent Annuahzed Approxanate Revenue Recorded Junsdxton and Date implemented Incmase cn 1981 &les 1981 1980 1979 N.C. Putail October 8,1979 . . 3.20 . $ 32,900 $ 32,900 ' $30,900 $ 6,800 October 3,1980 . . 6.03 66,700 66,700 14,800 -
December l.1981. , . 14.99(a) 169,900 13.400 - - S.C. Retail October 8,1979 _ 6.02 24,500 24,500 25,200 4,900 . December 1,1981. . 13.00(b) 55,400 21,600 - - Wnolmale October 8,1979 . 3.45 S,700 S,700 6,500 '1,400 October 3,1980 . 6.71 13,700 13,700 ' 3,300 -
. January 23,1981. 2.10 4,600 4,100. - -
December 1,1981. 18.04 (a) 41,500 _2,700(c) - -
$414,900 $185,300 $80,700 $13,100 (a) These increases were implemented in two stages, on October 18 and on December 1, the last of whth was to mflect the com-taercial operaton of McGuire Unit 1.
(b)This inemase was implemented in three stages, on January 28, Ockber 18, and December 1. the last of which was to reflect the commercialoperaton'of McGuire Una 1. (c) Subset to mfund with intemst. 3 Common Stock and Retained E- liigs common stock In 1981,1980 and 1979, the Company meerved $35,9S4,000,
' $108,361,000 and $134,924,000 from the issuance of 1,884,944 shams, 6,278,820 shams and 6,999,292 shares of ,
common stock, respect:vely (see Note 12), l At December 31,1981, certain shams of common stock wem reserved for issuance as follows: Shares Stock Pureta* Savings Program for Employees 5,254,078 Converson of PreferenceStock . S81,627 Dividend Reinvestment and Stock Purchase Plan 510,066 Employees' Stock Ownership Plan 2,901,998 Total . 9,247,769 l Rekdned Earnings I None of the Company's retained eam:ngs as of December 31, 1981 were reetncted with respect to the declaration or payment of
- dividends.
l
~28
- 4. Preferred and Preference Stocks Without Sinking Fund Requirements At December 31,1981 and 1980,10,000,000 shares of pm- Prefermd and pmfemnce stocks without sinking fund requirements fermd stock ($100 par value) were authonzed and issuable with at December 31,1981 and 1980 were as follows (dollars in or without sinking fund requirements. In addmon, 1,500,000 thousands):
shams of prefennce stock ($100 par value) were authorized at Year Shams Dsamber 31,1981 and 1980. Rate /Senes issued Outstandag 1981 1980 The cutstandag Preference Stas.'.,6 3/4 permnt Convertbb 4.50'6 C 1964 350,000 $ 3S,000 $ 35,000 Sanes AA, is convertble into shares of mmmon stock at the ad- S.72 % D 1966 350,000 35,000 35,000 justed conversion pnce of $23.89 per share, nach share of 6.72 % E 1968 350,000 35,000 35,000 preference stock bemg valued at $100 par for such purpose. 'lhe 8.70% F 1970 600,000 60,000 60,000 conversion price is subject to certain adjustments dmgned to pro- 8.20% G 1971 600,000 60,000 60,000 tect the conversion pnvilege against dilution. In 1981,1980 and 7.80% H 1972 600,000 60,000 60,000 1979, 72,477 shares, 127,476 shams and 88,405 shams wem 8.28 % K 1977 500,000 S0,000 S0,000 converted into 303,236 shams, S26,657 shams and 357,418 8.84 % M 1978 400,000 40,000 40,000 shams of common stock, respechvely. 6 3/4%, AA Convertble 1969 136,109 13,610 - 208,S86 - 20,858 Total $388,610 $395,858 5> Preferred Stocks With Sinking Fund Requirements At December 31,1981 and 1980,10,000,000 shams of pre- The annual sinking fund requirements thmugh 1986, net of fernd stock ($100 par value) were authonzed and issuable with amounts previously acquired, are $2,000,000 in 1982, or without sinlang fund mquirements. In 3ddmon,10.000,000 $4,000,050 in 1983, $7,900,000 in 1984, $7,900,000 in 1985 shams of prefermd stock A ($25 par value) were authonzed at and $9,525,000 in 1986, with some addmonal redemptions per-Demmber 31,1981 and 1980. mitted at the Company's option. Preferred stocks with sinking fund requirements at De mber 31, The call provisions for the outstandag preferTed and preference 1981 and M80 were as follows (dollars in thousands): stocks specify various redemption pnces not ex oding 111 per-Ymr Shams cent of par values plus amumubted divdende io the redemption Rate /Senes Issutd Outstanding 1981 1980 date. 7.35% 1 1973 600,000 $ 60,000 $ 60,000 8.20% J 1977 500,000 50,000 50,000 8.375%L 1978 500,000 50,000 50,000 8.84% N 1979 S00,000 50,000 S0,000 11.00% O 1980 500,000 50,000 50,000 10.76% A 1975 2,280,000 S7,000 - 2,340,000 - 58,500 Less: Prefermd shares macquired for current and future sinking fund requirements-at cost Shares Rmoquind 10.76% A 119,998 (2,660) - 83,000 - (l,941) 8.84% N 32,500 (2,430) - 11 00% O 13,750 (1,236) - Cunent sinking fund requirement 8.20% 1 (2,000) - Total $308,674 $316,559 29
- 6. Iong-Term Debt 1 First and refunding mortgage bonds outstanding at December 31,1981 and 1980 were as follows (w Note 12) (do!!ars in thousands):
Year Year Series Due 1981 1980 Senes Due 1981 1980 (contnued) 31/4% 1981 $ - $ 35,000 7 3/8%B 2001 $ 40,000 $ 40,000 3 S/8% 1986 30,000 30,000 73/4% 2002 100,000 100,000 14 3/8 % 1987 S0,000 50,000 7 3/8%B 2002 75,000 75,000 12 % 1990 75,000 7S,000 7 3/4 % 2003 100,000 100,000 41/2% 1992 50,000 S0,000 81/8%B 2003 100,000 100,000 41/4%B 1992 50,000 50,000 93/4% 2004 100,000 100,000 11 % 1994 91.250 98,000 91/2% 2005 100,000 100,000-41/2% 1995 40,000 40,000 8 3/8% - 2006 100,000 100,000 53/8% 1997 7S,000 75,000 81/8% 2007 125,000 .125,000 63!8% 1998 75,000 75,000 93/8% 2008 125,000 125,000 7S 1999 75,000 7S,000 10 1/8 % 2009 150,000 150,000 8%B 1999 75,000 75,000 107/8%B 2009 1S0,000 150,000 81/2% 2000 75,000 75,000 14 7/8 % 2010 100,000 100,000 8 S/8%B 2000 100.000 100,000 131/8%B 2010 50,000 50,000 71/2% 2001 100,000 100,000 Total $2,376,250 $2,418,000 Substantially all electne plant was mortgaged at Decen.ber 31,1981. Tb annual matunties of long-tenn debt (incbding sinking fund re. Included in the annual matunties are amounts relating to ciuimments and capitahzed lease pnnepal payments) through $125,000,000 in outstandmg obhgabons under two nuclear fuel q 1986 are $77,646,000 in 1982, $62,510,000 in 1983, trusts. Such matunties are based on eshmated nuclear fuel con- i $49,353,000 in 1984, $12.08S,000 in 1985 and $40,392,000 sumption. 'Ihe Company intends to transfer htle to addibonal in 1986. nuclear fuel to the trusts to replace such amounts as fuel is con-sumed. 1 I 30 l
- 7. Income Tax Expea Income tax expense mnsisted of the loDowing (dollars in thousands):
1981 1980 1979 E!ectne Expensm Cunent income taxe Federal . . - - $ 30,244 (a) $ 69,134 $ 61,698 State 11,183 16,121 14.580
'41,427 85,255. 76,278 Defened taxe, net Ex ss tax overbook depreciation . . 49,353 (b) 25,114 27,594 Capitahzed taxm, employee benefits, etc. I6,672 17,680 16,54S Revenumrefurxiable . . . (8,281) - -
Repair allowanceand cost of removal . (38)(b) S,872 7,369 Nuclearfueldisposalcosts . (12,336) (12,263) (10,800) 45,370 ~ 36,403 40,708 Inymtment tax cmdd Deferred . 56,146 36,854 41,196 Amortzationof defennents(cmdd) . (5,071) (5,049) (4,678) 51,07S - 31,805 ~ 36,518 Totalelectricexpenses 137,872 -153,463 153,S04 Other Income income taxm-other, net (deducton) . S1,592 (c) 982 (16,320) Incometaxm-cmdd (60,747) (58,382) -(40,458) Totalotherincome (9,15S) (57,400) (S6,778) Totalincometaxexpense . . $128,717 $ 96,063 $ 96,726 Total current income taxm were $24,002,000, $30,037,000 and $19,500,000 of which state income taxes wem $11,086,000,
$ 10,753.000 and $8,917,000 for 1981,1980 and 1979, respectively.
Total defemxt income taxes were $S3,641,000, $34,221,000 and $40,708,000 c! which defened state income taxes were
$7,899,000, $3,896.000 and $4,399,000 for 1981,1980 and 1979, respectvely.
, (a) Elsetne federal income tax mflects substantial investment tax credd utlization mlated to the tax gain on sale of assets in February 1981. (b)Re0ects changa attnbutable to the Economic Remvey Tax Act of 1981. Defermd taxe on depreciation also reflect Unit 1 of the McGuire Nuclear Station mming in servr:e December 1,1981. (c)includs $42,150,000 resultmg from the sale of assets in Februaq 1981 and nominal amounts thereafter (see Note 10). Such in. come taxes, which are included in Vther, net (deduction)" on the Statements of Income, reflect a taxable gain in excess of book
- gain resulting pnncipaDy from the treatment of ADC.
Income taxm differ from amounts computed by applying the statutory tax rate to pretax income as follows (dollam in thousands): 1981 1980 1979 Income taxa on pretax income at the statutory federal rate of 46% $213,885 $187,291 $170,884 Increase (reduction) in tax resulbng from: ADowariceforallfundsusedduringcomtruction(ADC) . (102,077) (97,074) (75,020) Amortzation of electric investment tax cmdd deferrals (S,071) (5,049) (4,688) State income taxm, net of federalinmme tax benefits . 13,S95 9,044 7,483 Increase in tax expense pnmanly due to ex ssof taxgainoverbookprofit onsaleof assets . 12,468 - - CXheritems, net (4,083) 1,851 (1,933) Totalincometaxexpense(seeabove) $128,717 $ %,063 $ 96,726 31
- 8. Retirement Plan b Company and two of its subsidianes have a non<x>ntnbutory,- A comparison of accumuhted phn benefits and phn net assets at dehned benefit rebrement phn covenng substantially aH their December 31,1980, the date of the btest actuarial repod, and empbyees. b Company's policy is to fund pension ecsts ac- December 31,1979 is as foHows (dollars in thousands);
crued. Total pension expense amounted to $31,896,000 in 1981, 1980- 1979 $26,782,000 in 1980 and $23,844,000 in 1979. Effeebve September 1,1980 the plan was amended to provide for certain Actuarialpresentvalueof accumulated phn changes includmg increased benefits for achve and retired phnbedts employees. Also, in 1981, the actuarial cost methcd and certain Vested. $202,851 $126,757 Non-Vested . 60,332 13,090 actuanal assumptions were changed. b effect of these cha.wes dxi not sigruhcantly incmase the Company's pension mst for Total , $263,183 $139,847 1981. Netassetsavaihbleforbenehts $244,008 $176,83
% weighted average assumed rate of retum used in detennuung the actuarial preent value of accumubted plan benefits was 8.3 percent in 1980 and 7.S percent in 1979.
9, Short-Term Borrowings The Con.pany has hnes of cmdit with 77 commercial banks and bahnce mquirements of $1,748,000. Bank loans, normaHy for 90 uses these hnes, plus the sale of commercial paper, to finance its days or Ims, are principally at the lendmg bank's commercial current cash requuements. pnme intemst rate. Cedain of the Company's bank hne ar. rangemets may mque additonal balances or fees mlated to an-At December 31,1981, the hnes of credit were on eiher a fee nual average borrowings. bass and/or compensating bahnce basis, with average annual A summary of shon-tenn borrowings and credt arrangements is as follows (dollars in thousands): 1981 1980 1979 Amount outstandmg at year-end--average rates of 11.69%,17.74% and 14.09%, respecbvely . $171,350 $197,000 $112,000 Maximum amount outstanding dunng the year . $250,398 $197,000 $125,400 Average amount outstardng dunng the year . $ 38,829 $ 84,466 $ 33,894 Weighted average interest rate for the year--computed on a daily basis . 1S.39 % 12.91 % 11.93% Linesof cmditatyear-end . $305,400 $280,400 $280,000
- 10. Other Income j in February 1981, the Company mki a 75 percent intemst in at December 31,1981) under "Other investments." h imphcit i Unit 1 of the Catawba Nuclear Station (Catawba) and 37.S per- intemst on the notes is accmed monthly. The net of tax profit from !
cent of the staton's supped facihties to groups of North Carchna the sale was $4 milhon. At December 31,1981, "Constmetion i and South Carohna mral electnc cooperative customers. At clos- work in progress" included $401,502,000 representng the Com-ing, $S21 milhon and two notes totahng $76 million were re- pany's investment in its remain.ng interest in Catawba. ceived. b notes are non-intemst bearing until 10 ymrs after the In 1979, the Company made a provision to wnte down the carry-first Catawba urut begms commercial operation, after which, in~ ing value of an investment made pursuant to the terms of a certam terest and pnncipal payments comn.ence. Tne Company has dis- coal supply contract. A charge was mcorded of approxanately counted the notes and recorded the pmsent value ($13.8 milhon $13,S64,000 (after giving effect to income taxes of $12.264,000). 32
.11.Comadtments and Contingencies ~ A. Construction Propam.The Company is engaged in a long- maxunum of $10 million a year for mch of its bcensed rmctors in .
- range construction program for which substantial commitments the event of more than one incident. At December 31/1981, the have been made. Projected constmeton and nuclear fuel costs for Company had four hcensed reactors.
the years 1982 through 1984 are $2.02 bilhon and $514 milhon, Propedy damage coverage for wrtain of the Compsny's nuckr mspectively. Le program is subject to pericxic revew and revi- facihties is provided through membership in Nuckr Mutual ' sion, and actual constmcbon costs incurred may vary fmm such . Lirmted (NML). If NML's losses were to exmed its reserves, the esbmates. His is due to vanous factors includ2ng changing byels Company could be liable, on a pro rata basis, for addibonal of infbbon, revad load eshmates, the cost and avaibbity of asezn ents of up to $72 million, representing 14 hmes the Com-- captal, and the outcome of heensing and environmental matters. pany's current annual premium to NML. On Febmary 24,1981, the Board of Directors, because of the The Company is a member of Nuckr Electnc Insurance Limited uncertmnty of the avaihbaty of funds on rmsorable terms, in- (NEIL) which provdes insurance for the increased cost of genera-dehnitely debyed compleuon of Chemkee Umt I and intenupted hon or purchased power msultng from the accdental outage of a work on Unit 2. His status remains unchanged. nuclear unit If losses were to exceed the accumuhted funds The management of the Company intends to mcx>mmend to the ava !able to NEIL, the Company wouki be liabb for a retrospec-Board of Duvetors at its February meetng the withdrawal of the tve premium ad;ustment of up to hve bmes the requhr annual Company's appbcabon for a constmcbon pumit for the proposed pmmium. Maximum potenbal habity per incdent currently is Perkins Nuckr Stabon. If such recommendabon is approved, the estirnated to be $26 milhon-Company intends to regumt permimion in mch of its regubtory The Company anticipates purchamng from NEIL, through its Ex. junsdictiorr to recover costs rebted to such proposed facaty. The cess Propedy Insurance Program, $S00 milhon of propedy . Company has incurrtd no matenal costs and has no commitmenis damage insurance. This is in addition to the $450 milhon of the cancell n hich would result in any materal costs with coverage pmyded by the Company's underlying property . damage pohces isswd through the commercal market. If losses B. Nuclear Insurance. The Compsny's public habity for chims wem t acmd 6e accumuhted hmds avah to NEIL for the resulung from any nucbr inedent is hmited to $560 million
'"* #7 #" "9# ** *P^"Y * ""
f r a retrospectve pmmium adjustment of up to 7.5 times under provimons of the PrmAnderson Act which provides for the mg br annual pmmium, in the pohey year in which the loss is - nuckr habaty insuranm up to that amount. A portion of this in-surance is provided through Nucbr Reguhtory Commission reguhbons pursuant to whrh the Company could be assessed up C. Leases. Minimum Wse commitments as of December 31, to $5 milhon for each of its Lcensed rmetors in the event there is a .1981 under a!! capital and operatng bses are not matenal. nuchr inedent involving any heenaed facity in the nMion with a
- 12. Subsequent Events On bnuary 7,1982, the Company issued 3.727,544 shares of modgage bonds with a face value of $119,902,000. A non-common stock with a market value of $73,489,000 in exchange taxable gain of $48,304,000 on the retrement of the bonds was for portions of several senes of outstanding first and refunding recorded in 1982 as an extraordinary item.
33
Management's Disenmion and Analysis of i Financial Condition and Results of Operations l DUKE POWER COMPANY j Liquidity and Capital Needs In Febmary 1981 the Company sold a 75 and Resources percent interer m Unit 1 of the Catawba Smce January 1,1977, addmons to prop. Nuclear Station (Catawba) and 37.S per- , erty of $4.0 bilhon (includmg nuclear fuel) cent of the station's support facihtea to ! and retrements of $800 milhon have gmups of the Company's North Carchna l resulted in a net increase in gross plant of and South Carolina rural electnc coopera- )
$3.2 bilhon. In 1981 the net increase in tve customers. Cash proceeds of $521 gross plant of $300 mi' lion was due to milhon were received from the sale. %
property addtons of $800 mtlhon and Catawba sale, coupled with funds from retrements of $500 milhon. L amount of operations, enabled the Company to gen-retrements was unusually large pnmanly erate 94 pement of its capital requirements due to the sale, in February 1981, of a intemally, precluding the need for long-portion of the Catawba Nuclear Station. I term financmg in 1981, Profected constmeton and nuclear fuel costs for the period 1982 thmugh 1984 An agmement to sell 25 pement of Urut 2 are $2.02 bilhon and $514 milhon, nrpec- , of Catawba to a group of South Carchna municipahties was mached in August tvely. Included in the projec+ed construe. hon costs are nommal amounts related to 1981 h sale may be consummated by the Bad Creek Hydroelectne Staton. 'Ihis mid 1982. It would provide cash proceeds pumped storage facaty will have a net of pproximately $250 milhon. capabity of 1,000,000 KW consistng of .y.o Mer - W expenh 9 " The construction program currently re. the Company has initiated a comprehen-g e quiren expenditums gmater than cash sive load management program. 'lhe pro-1I schedM' generated intemally from operations. The gram is designed to hmit future construc-On February 24,1981, the Board of Company inibally funds the exces with tion costs by encouraging consumers to Directors, because of the uncertainty of the short-term bank borrowings and commer- mduce demands on the system without availabihty of funds on reasonable terms, cial paper. While the Company prefers to restneting the continued economic indefirutely delayed completten of hmit short-term debt to about $150 million, development of the Company's sennce Chemkee Urut I and intermpted work on it presently has bank hnes of credit of area. Urut 2. h status remans unchanged. 5305 million. Sin 1977 the Company has refunded all of its short-term debt at h Company is committed to improving b management of the Company intends its fmancial stmngth to provide increased least once each year. In early 1982 ap. to recommend to the Board of Directors at proximately $190 milhon will be obtained f2nancing flexibihty. h Company its Febmary meetng the withdrawal of the beheves that in the current economic en-from long. term financings to mduce short. Companys applicaton for a construchon vironment, it is important to seek a term debt, which was $171 million as of pemut for the pmposed Perkins Nuclear stmnger capital structure and to mantain December 31,1981. < Staton. If such recommendation is ap. manageable levels of long-term debt. proved, the Company intends to request Dunng the past five years, fmancings have permission in each of its regulatory included $1.0 bilhon in long-term debt At year.end the Company attained a level junsdictons to recover costs related to (pnncipally first and refundmg mortgage of capitahzation of 48 percent long-term ! such proposed facihty. % Company has bonds), $290 milhon in preferred stock debt,13 pement preferred stocks and 39 incurred no matenal costs and has no and $S30 milhon in common stock. Since percent common equity. On January 7, commitments the cancellaton of which November 1978 sales of interests in the 1982 the Company issued 3,727,544 wouki result in any matenal costs with Catawba Nuclear Station have provided shams of common stock with a market respect to such facity. $781 milhon. value of $73,489,000 in exchange for ] 34
l l portons of mveral senes of hrst and Fixed charge coverage, usng the sales were the maior contnbutcrs to the refunding mortgage bonds havmg a face Secuntxs and Exchange Commmon higher revenues. The rate inemaas were value of $119,902,000. A non taxable (SEC) method, has not changed necmsitated by the effects of mfhhon, the ! qain of $48,304.000 on the mtrement of stgruhcantly Emause of the inemasingly inclumon of construebon work in progress : bonds was rerdal in 1982 as an ex- hyh level of embnided costs. Dunng in rate base and the need for a high- I traordmy item. h enabkd the Com- 1981 this coverage increasal to 2.73 retum on investment. Pnmanly boca e of l pany to incmue its common equity rabo tmes, comparul with 2.71 tmes in 1977; growth in the number of customers, total from 39.4 percent at December 31,1981 this irdicator contnues to remam below kilowatt. hour saks increaaxi from 48.8
, to 41.7 percmt. The Compmy phns to the Company's goal of 3.S tmes. bilhon in 1977 to 53.S bilhon in 1981, an conbnue to evaluate opporturuties to in. inemre of 10 percent.
crnue its hnancial strength without dduhng Operceng Expenses existng shareholders equity. Incm3ms in total electnc expensos have , From 1977 to 1981, funds from cpera- substanhally offset the inemre in revenues horis provdmi 29 percent of capital re dunng the 1977-81 period. The moct quirements, not includag cash generated signihcant inemise is n operahng and from the two Catawba sales. h is the maintenance expense, whrh rose 74 per-Company's long range objective to cent. Inflaton (see " Selected Financial generate at lort 50 percent of its capital Data - Effects of Changing Pnces"), in-requirements from intemal sources. The emuxi generaton from fossil-fuul sta- i inclusion of constmetion work in pmgre tons, dcennni hydroelectric generahon and completed generahng uruts in rate . ' and incmred requirements by the hre and a higher rate of retum on invest- ' Nuclear Reguhtory Commission wem the ment will aid in increamng the level of in-l key factors. temal cash generaton. These matters were consderuiin rment rate apphcations in N er the Compmy's thne rate juradictons. In Over the hve ymr penod allowance for Dmember 1981 the North Carchna funds used dunng constmction (incbded Uthbes Commmon issued a rate order in both other income and interest dwiuc-allowing a 16.S percent retum on com- tions) increaaxi, pnmanly as a result of mon muity, inclusion in rate bxe of higher construccon work in progress and McGuire Urut 1, whrh was phced in Results of Operations higher embrxided cost of funds. Intenst commercial operaton on December 1, Net Income and Dividends income incmuxi $19 milhon from 1980 1981, as well as certain construction work to 1981, hrgely through the investment of Emm 1977 to 1981, eamings per share in progrms. In January 1982 The Pubhc (EPS) inemnxi 32 permnt from $2.41 to pmceals from the Catawba sale. Eamings i Servre Commmon of South Carchna $3.19. The camed retum on ecmmon f subsidianm amounted to $15 mi!! ion in issuexi a rate order a!!owmg a 13.0 per- equity incnnwi from 12.0 percent in 1981. The Company actvely seeks to im. cent retum on common equity and the in- 1977 tc 13.7 percent in 1981. Divdends prove the rate of return on investment in clusion in rate bme of McGuire Urut 1. per share incmnxi 28 percent from its subsidianes, the eamings of whrh am h June 1981 wholesale regumt is under mflected in other income. Interest deduc-
$1.63 in 1977 to $2.08 for 1981.
consideraton by the Federal Energy bons and divdends on preferrui and Regubtory Commmon. Since infhbon Revenum preference stocks have mereased since l has contmued to inemase costs in 1981, Revenues inemnd by SI percent over 1977 because of higher intemst rates dur. l the Company expects to fde further re- the 1977 81 penod. Increases in rates ing the subsequent penod and the need quests for incrund rates in early 1982. charged to customers and in kilowatt. hour for additional capital. s 35
Long-Term Financing and Sale of Assets DUKE POWER COMPANY To meet its capdal mquirements, the Company has fnmoed extenstvely weh long-term debt and equity secunties and has ramd addtonal capdal through other types of financing plus the sale of certain assets (dollars in thousands). 1981 1980 1979 Price Per. Net Net Net
, Share Proceeds Proceeds Proceeds Financing Common stock Pubhc cales (4,000,000 shares; August 26) . $17.375 $ 66,968 (S,500,000 shams; March 21) . 19.50 $103,887 Stock PurchanSavings Program for Employees (1,236,180 shares) . 18.88* $ 23,344 (1,104,54S shares) . 17.03* 18,81S (819,308 shams) 18.43* 15,103 Dtydend Bernvmtment and Stock Purcluse Plan (S34,151 shares) 19.49* 10,412 (SS2,000 shares) 16.67* 9,201 (357,462 shams) 18.S7* 6,639 Employees' Stock Ownership Plan (114,613 shams) 19.18* 2.198 (622,27Sshares) 17.43* 10,84S (322,522 shares) 18.39' S,932 Totalcommonstock 35,954 105,829 131,561 Preferred stock, $100 par 11 % Series O (S00,000 shares; Febmary 14) 49,323 8.84 % Senes N (500,000 shares; lune l 4) 49,2S1 Totalprefenedstock . 49,323 49,251 Iong-term debt First mortgage bonds 14 7/8% Senesdue2010(March 19) . 98,410 14 3/8% Seriesdue 1987(March 19) . 49,533 12% Senesdue 1990(August 26) 73,857 131/8% SeriesBdue2010(August 26) . 49,350 101/8% Senesdue2009(June 14) 147,647 10 7/8% SenesBdue2009(October 10) 148,121 Totalf:rst mortgagebonds 271,150 295,768 Other financing Nuclearfueltrusts . 42.248 30,664 76,2S4 Termnote-due 1985 - 10,000 -
Totalotherfinanc:ng - 42.248 40,664 76,254 Totallong-term debt . 42.248 311,814 372,022 Totalfinanc:ng 78.202 466,966 CS2,834 Sale of assets Sale of aninterest in the Catawba Nuclear Station . 520,582 - - Totallong-term financing and sale of asses . S598.784 $466,966 35S2,834
' Average l
- 36 L
Selected Financial Data DUKE POWER COMPANY 1981 1980 1979 1978 1977 Condensed Statements of Income (thousands) Electncmvenues . $1,908,454 $1,682,822 $1,492,557 $1,3%,720 $1,266,974 Electncexpenses . 1,632.104 1,402,722 1,238,680 1,159,719 1,037,088 Electncoperatingincome . 276,350 280,100 253,877 237,001 229,886 C;herincome 254,043 208,36S 168,612 131,899 96 95S Incomebeforeinterest deductions 530.393 488,465 422,489 368,900 326,841 Interestdeductions . 194,!4_2 177,374 147,729 138,299 134,492 Netincome . 336,251 311,091 274,760 230.601 192,349 Divdends on pmferTed and pmference stocks . 57,895 58,612 52,562 46,632 38,879 Eammgsforcommonstock . $ _ 278,356 $ 252,479 $ 222,198 $ 183 969 $ 153,470 Common Stock Data Shams of common stock-ymrend (thousands) . 88.483 86,294 79,489 72,132 65,430
-average (thousands) 87,313 81,985 77,168 70,367 63,630 Per share of common stock Earrungs . $3.19 $3.08 $2.88 $2.61 $2.41 Divdends $2.08 $1.95 $1.83 $1.74 $1.63 .
Book value-ymrend . $23.83 $22.82 $22.12 $21.31 $20.53 Market pnce-high-low . $22%-15% $19%-14% $20%-16% $2218% $23%.19%
-ymrend $20% $18% $17% $19% $22 Balance Sheet Data (thousands)
Totalaaets $6.531,044 $6.328,174 $5,615,372 $4,984,621 $4,610,706 Long-termdebt . $2,545,694 $2,S94,008 $2,300,488 $1,974,209 $1,948,081 Pmferred stocks with sinking fund requirements S 308,674 $ 316,559 $ 268,500 $ 220,000 $ 170,000 Electric and Other Statistics Kilowatt-hour sales (milhons) Residential . 13,861 13,765 12,832 12,959 12,462 Generalsennce 9,731 9,395 8,778 8,920 8.623 Industrial . 20,667 20,060 20,260 19,523 19,188 Wholesaleandotherenergy sales 9,289 9,091 8.453 8,S37 8,575 Totalkilowatt-hoursales 53,548 S2,311 50,323 49,939 48,848 Number of customers-ymrend Residential . 1.125,371 1,105,035 1,078,419 1,049,543 1,024,712 Other . 181,331 179,370 175,2S8 172,626 168,3S1 Totalcustomers . 1,306,702 1,284 40S 1,253,677 1,222,169 1,193,063 l Residential customer data ! AverageannualKWH use 12,392 12,560 12,013 12,469 12,260 Average revenuebilled perKWH . 4.51e 4.1 I e 3.90e 3.62e 3.40e Number of employms-ymrend Operating and maintenance . I1.892 11,463 10,758 9,895 8,816
- Enginmnngandconstmetion . 8,185 8,149 9,372 7,839 6,782 Source of energy (milhons of KWH)
Generated-Cml . 42.513 40,984 37,404 34,598 37,184
-Nuclmr 14,229 14,213 14.228 1S,905 13,008
-Hydro 843 1,820 2,809 1,941 1,852
-Oiland gas 146 203 163 484 303 Net interchange and purchased power . 494 (472) (S12) 1,016 31 Systemaveragehmt rate 9,633 9,675 9,742 9,769 9,743 l Systemlmd factor 61.9 % 61.6 % 62.3% 62.9% 62.0%
37
1 Selected Financial Data DUKE POWER COMPANY Quarterly F1:xxxx:lal Data A summary of quarterly f:nancal data for 1981 and 1980 is as follows (dollars rt thousands except per chare datah Bectnc Electna . Net Earmngs Per-Revenus Operating Inmme Income Common Share 1981 by Quarter
- Fourth. $484,782 $64,388 $79,626 $0.74
'Ihird 499,216 64,188 83,740 0.79 Semnd . . 426,200 70,397 80,111 0.76 First . 498,256 77,377 92,774 0.90 1980 by Quarter
- Fourth. 425,219 76,760 76,764 0.72 Third 450,861 66,433 77.877 0.77 Second . 367,987 S7,658 68,987 0.67 First 438,755 79,249 87,463 0.92
' Quarterly eanungs generally fluctuate with seasonal weather conditions, tirrung of rate inemases (including fuel cost adjustment pro-cedums) and maintenan of electne generat:ng uruts, espmally nuclear. fueled uruts.
Stock Market Information At December 31,1981 and 1980, the Company had appmximately 123,900 and 129,000 holders of common stock, respectively. Dunng 1981 appmximately 30,610,000 shares of mmmon stock wem traded compared to 20,666,000 dunng the previous year.'Ihe - Company's mmmon stock is traded on the New York Stock Exchange. Dividend _ Stock Pnce Range Common Stock Per Share '.tigh low 1981 by Quarter Fourth. $0.SS $22 % $19 %
'Ihird 0.51 21 % 18 %
Second. 0.S1 20 % 17 % Fust 0.S1 19 % - 1S % 1980 by Quarter Fourth. 0.51 18 % 1S %
'lhird 0.48 18 % 16 7/e Second. 0.48 19 % IS %
Fust 0.48 18 % 14 % 1' , i 38
Selected Financial Data DUKE POWER COMPANY Effects of Changing Prices in re nt ymm, the impact of general infhtion and changes in Effects of Rate Regulation. Under the Company's present spIcific prices has caused dstortions in traditional accountng ratemaking procedures, only the histoncal cost of phnt in service measurements of income and capital. In response to this problem, is recoverable in rates as depreciation. Therefore, the excess of the hnancial Auuuso Standards Board (FASB) issued State. the cost of phnt stated in terms of constant dollars or curmnt costs ment Efo. 33 regumng declosum of the effects of infhbon on a over the historical cost of plant, resulting from infhtion in the cur-mmpany's operations and financial position. rent ymr, is not presently recoverable in rates as depmciaton, Beesuse the accompanying supplementary informahon involves and is reflected as a reduction to net recoverable cost. vancus assumptions and approximations, it should be viewed as The reduction is offset by the Company having sigrJficant an eshmate of the effects of inflation, rather than a pmcise amounts of long-term debt outstandmg, as well as other net measurement. monetary liabihbes, which will be paid back in dollars of less pur-chasing power. Thus, the gain from decline in purchasing power Constant Dollar Accounting. Constant dollar accounting of net amounts owed in the accompanying schedules results from reflerts the overall dechne in the purchasing power of the dollar inflation's effect on obligations to pay cash at a future date. by restatng histoncal costs in tenns of dolbrs of equal purchasing . power. Other. Income statement items other than depreciation have not Constant dollar amounts for electric plant in service wem deter- d# "N' P*'^U " d #*"^"C* **' mired by indexing surviving historical msts of phnt with the Con- penses almady include the average effects of changing pnces dur-ing the penod and, themfore, no adjustments have been made to sumer Price Index for all Urban Consumers (CPI.U). Historical depmceation rates were appbed to the restated amounts of phnt thereby trendmg the provision for depmciation to reflect the im- No adjustments to income tax expense have been made in com-pact of generalinflation. putng the impact of infhtion since only historical costs am deduct-ible for income tax purposes. Current Cost Accounting. Current cost accounting reflects changes in specific prices of the property used in the Company's operabons from the date the property was acquired to the present.
'Ihis method differs from constant dollar accounting to the extent that costs of specific utthty property have increased more or less rapidly than the rate of general infhtion. The cunent cost amounts of plant in service represent the estimated cost for repbcing ex-isting phnt facihtxs and were determined by indexing surviving phnt costs by intemally generated indres or the Handy-Whitman Index of Pubhc Utihty Construchon Costs. Since plant facihtim are not expected to be repbced pmcisely in kind, ' current cost" does not nIcessanly represent the mplacement oost of exshng produc-tive capacity. Current cost depmciation is computed by applying the same rates used in the historical cost and constant dolbr staterrants to the cunent cost phnt amounts.
39
i Supplementary Statement of Earnings for Common Stock Adjusted for Changing Prices DUKE POWER COMPANY Year Ended Decerrbr 31,1981 Constant Cunent . (+4n m w H:stoncal $ Dollar Cost Electnc revenues . . . . , $1,908,454 $1,908,454 $1,908,454 Operatng expenses '1,080,523 1,080,523 1,080,523 Ma:ntenanceof phnt facilmes . 131,670 131,670 131,670 Depreciabon. , 142,899 314,177 334,419 Taxes 277,012 277,012 277,012 Totaloperabng expenses . . 1.632,104 1,803,382 1,823,624 Operat:ngincome . 276,350 105,072 84,830 Otherinmme . . 254,043 254,043 254,043 Income beforeinterest 530,393 359,11S 338,873 Interest expense 194,142 194,142 194.142 Netincome . .... , 336,251 164,973 144,731 Divdends on prefened and pmference stocks 57,895 S7,895 S7,895 Eamings for common stock. $ 278,356 $ 107,078* $ 86,836 Increase in specibc prices (current cost) of uthty phnthekidunng the yac* * $ 784,633 Reduchonto net recoverable cost $ (284,6GS) (239/ 3 ) Effect of increase in general pnce level . (810,052) Ex ss of incrmse in general price level over incmase in specibe prices after reduchon to net recoverable cost . (264,423) Gain from dechne in purchas:ng power of net amounts owed 326,916 326,916 Net $ 42,251 5 62,493
- If the reducbon to net recoverable cost of $284,665,000 were reflected, and no recognton were given to the $326,916,000 purchasing power gain, eamings for cx>mmon stock on a constant dollar basis wouki have been a loss of $177,587,000.
*
- At December 31,1981, current cost of electnc phnt, net of acx:umulated depreciation was $10,055,578,000.
l l 40
Five Year Comparison of Selected Supplementary Financial Data Adjusted for the Effects of Changing Prices DUKE POWER COMPANY nn ttxwos a <mme trei ae exnv r e *- Arm > 1981 1980 1979 1978 1977 Electne revenues inhetoncaldollars . $1,908,454 $1,682,822 $1,492,557 $1,396,720 $1,266,974 Inconstantdollars 1,908,454 1,857,377 1,870,159 1,947,116 1,901,508 Income from continuing operations Inhistoncaldobrs . 336,251 311,091 274,760 Inconstant dollars 164,973 18S 808 203,721 Incunentcat . 144,731 167,222 177,978 Eamings per share for common stock Inhistoncaldobrs . 3.19 3.08 2.88 Inconstantdollars 1.23 1.48 1.79 Incurrentcost . 0.99 1.25 1.45 Common stock divxiends per share In historicaldobrs . 2.08 1.95 1.83 1.74 1.63 Inconstant dollars 2.08 2.15 2.29 2.43 2.45 Market pnce per colamon share at ymr.end inhistoncaldobrs . 20.625 18.12S 17.25 19.37S 22.00 Inconstantdollars 19.96 19.11 20.44 26.01 32.20 Net assets at year.end Inhstoncaldohrs . 2,108,935 1,969,140 1,758,016 Inconstantdollars 2,040,760 2,075,827 2,083,008 Incurrentcost . 2,040,760 2,07S.827 2,083,008 Purchasing power gain on net monetary items . 326,916 45S,029 484,947 Decmase in the current cost of electne plant in service, net of inflation, after raluction to net recoverablecost . 264,423 494,057 550,817 AverageConsumerPnceIndex 272.4 246.8 217.4 195.4 181.5 41
Subsideries DUKE POWER COMPANY Subsidiary Investments December 31 (dolbrs in thousands) 1981 1980 Property and invmtments - at cost Real mtate, recreabonal and bnd development S 32,057 $ 31,780 Cml mang . 89,457 89,104 Net current assets, pnncipally receivables and inventanes . 7.165 4,951 Total amets . 128,679 125,835 long-term notes (61) (281) Coal producton comrrutments (37,272) (42,272) Defermd income taxes . (36,365) (48,909) Totalliabihbm . (73,698) (91,462) Investments in and advances to subsdans S 54,981 $ 34,373 Crescent Land at Timber Corp. Crement is insttubng new programs to in 1981, Crescent harvested 29.9 milhon se mh for other natural resource which bmrd feet of tmber and 64,000 cords of Formed in 1969, this subsdary managm may exst on its propertes, includmg oil, pulpwood. Approximately 1.8 milhon new appmximately 270,000 acres of "non. g s and vancus minerals. Additional pro- trees are being planted each year. Since uthry" pmperty consstng pnmanly of umber lands surreurding Duke's hydm. grams are under way to determme the bat Duke indiated its retrestabon actvities in use for properbes, which may lead to ex- 1939, some SS rrJhon seedhngs have elect.nc facihbes, but also includng recrm tortal, industral and commercial sim. panded industnal, commercial and bwn phnted on 80,000 acres. msdential development. The Eastover Companies plant modernization program in late 1980 Eastover now has the facihtes and trained Eastover Mming Company and Eastover allowed Eastover to ship a consistent qua!i- personnel to complete rnajor overhauls of land Company were founded in the early ty pmduct to Duke dunng 1981. its mining equipment on site as opposed to 1970s to help assure Duke an adequate pmvimsly mlymg m mtsde soumes. This The development of two adddional dwp supply of quahty coal for its fossil-fuekd pr ydes for a better means of controHing seems of coal was completed in 1981 with cat. generatng stabons. five workmg sechons. Eastover anbcipates the start-up of an additional working sec- As of December 31,1981 Eastover Land In 1981, Eastover Mming Company p o. duced and shipped 2.0 milhon tons of cml tion in the newly developed seam at Arjay Company owned or had contro!hng in-to Duke phnts, represenbng about 12 per. Mine, thus incmasng that mine's produc- terest in an estmated 186 million tons of cent of the system's total annual requim. ton capabihty. mcoverable cml reserves in mstern Ken-ments. The complebon of the procmsing tucky and southwest Virgna Mill-Power Supply Company opened a new wambouse and city counter Since 1910, this subsdary has acted as Mill. Power Supply, Duke's oldest achve in Greensboro, N.C. in 1981. In 1981, the purchasmg agent for Duke Power. In sales to Duke were $11.5 milhon, a dechne this capacity, Mill-Power purchases virtual-subodary, was organized in 1910 to sup. ply electncal equipment to textle mills and of about 20 percent from 1980 as the ly all suppbes, equipment, fuel and ser-other industnes that were convertng to result of the deferral of Duke's constmetion vics mquired by Duke and contracted for electnedy. After 70 ymrs of being one of program. Sales to customers other than more than $1 bilhon dollars on Duke's tb largest single-house electncal equip. Duke totaled $24.1 milhon, an incrmse of behalf in 1981. ment dstnbutors, Mill. Power Sales Divmon about 8 percent over 1980. Western Fuel, Inc. 1981, well feld development efforts were tion is pumped into wells to bnng uranium 'Ihis subsdary was formed in June 1978 escahted and the joint venture was able to to the earth's surfa . Because this process to partcipate in a uranium exploration and commence commercial mirung operatons requims very httle earth dsturbance, it is raining venture with Ogle Petroleum Inc. in August 1981. The pint ventum an- an environmentally attrachve altemative to of Cahfomia. tc pates completng an expansion of its conventonal mining methods. In pilot tsts facihbes by the summer of 1982, which conducted in 1979, this pro ss met all of la June 1980, the joint venture completed wiB double the current plant capacity. the environmental requirements of the constmeton of the first phase of a com- Wyormng Department of Environmental rearcal proomsmg phnt in the Red Dmert The mining operations that are now under- - of Wyommg. With the issuan of a way are on leased lands usmg an in-situ federal soume matenals hcense in May mining pro ss in which a chemical solu-42
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E i c Ni/ Reece A. Overcash. Jr. * " r' , E ,., en . . E x. . .1. , c.< William H. Grigg E * "2 j c. . .ua c. < c. [ a q ,,1 \,. .- ' '.x-
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Officers George W. Ferguson. Jr. Richad R. Pierc* Ass, tant to the Subsidiaries Vree,mdm1 Govemmental Affan Charman of the Board Carl Horn, Jr. Steve C. Griffith. Jr. William R. Stimart Richard C. Hanson Chairman of the Boani and Vm Prmdent and General Courwel Vice Prmdent Prmdent Chtaf Executve Offrer M. Thomas Hatley, Jr. Regulatory Affairs Crescent Land & Timber Corp. William S. Lee Vm Prmdent Fred E. West. Jr. W. T. Robertson. Ir. Praident and Rates Vre Prmdent Pmsident Chmf Operatng Offrer Charlotte Divsion Mdl-Power Supply Compar.y Porter A.Hauser and Westem Fuel, Inc. Douglas W. Booth Vre Prmdent and Contmller James W. White Executve Vi Prmdent E. N. Hedgepeth, Jr. Vice Prmdent Robert M. Moore William H. Grigg Vice Prmdent General Semces Prmdent Dstnbuton Eng:neenng, Lewis F. Camp, Jr. Eastover Land Company Sanior Vm Prmdent Legal and Finance Constmeton and Operatons Secretary and Norman Yarborough Frank A.Jenkins Associate General Counsel Prmdent John D. Hicks Eastover M2n:ng Company S2nior Vice Prmdent Vice Prmdent Richard J. Osborne Pubhc Affairs Transmmon Treasurer Warren H. Owen Samuel T. Lattimore Robert J. Ashmore Sanior Vice Prmdent Vi Prmident Ass:stant Vre Prmdent Engineenng and Constmcbon Computer Semem Finance Admimstration Austin C. Thies John F. Lomax C. Joe Sherrill Sanior Vice Prmdent Vre Prmdent Assistant Vm Prmdent Producbon and Trarmnmon Westem Dvmon Transmmon-Substaton Dvison Thomus C. Berry Joe S. Major, Jr. E. Bruce Shuler Vm Prmdent Vice Prmdent Assistant Vre Prmdent Southem Dvmon Personnel Transmmon-Line Divmon J. Kenneth Clark Joseph G. Mann Carolyn R. Duncan Vice Prmdent Vice Prmdent Assistant Secmtary Corporate Communicatons Northem Division John C. Goodman. Jr. Henry L Cranford Paul H. Mann, Jr. Assistant Secretary Vre Prmdent Vre President Charles A.Markel Div:sion Operabons Operaton Ass:stant Treasurer Linwood C. Dall Dwight B. Moo Norman P. Morrow Vice Prmdent Vre Prmdent Ass:stant Controller Dugn Eng:nwnng Central Divmon W. Bruce Shannon Donald H. Denton, Jr. William O. Parker, Jr. Assistant Treasurer Vice Prmdent Vice Prmdent E Markeeng Steam Produchon Robert L. Dick Thomas M. Patrick. Ir. H. D. Whitley Vice Prmdent Vre Prmdent Ass stant ControBer Constmcbon Eastem Divmon Management Changes The following management changa wem Richard J. Osborne was elected made in 1981: Treasurer; Charles A. Markel was elected Assistant Treasurer; and Tha board of dnctors has elected H. DNey was M ht
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ControUer. William S. Lee to succeed Carl Horn. Ir. as Chtrman of Duke Power Company. J. Kenneth Clark was elected Vice (Effectve Febmary 1,1982, Douglas W. Booth will succmd im as Prmdent-Corporate Communrations; Paul G. Martin succeeded Pnndent. These el anges will become ef- Fred E. West. Ir. was elec+ed Vre Thomas M. Patrick. Ir. as fectve on Apnl 30,1982. Prmdent-Charlotte Divmon; Vm Prmdent-Eastem Dvmon] 44
Transfer Agents and Registrars for Common Stock Morgan Guaranty Tmst Company of New York 30 West Broadway New York, NY 10015 North Carolina Natonal Bank P.O. Box 120 Charlotte, NC 28255 Transfer Agent and Registrar for Preferred and Preference Stocks Morgan Guaranty Tmst Company of New York 30 West Broadway New York, NY 1001S Stock Exchange Listing Duke Power Company common stock is listed and traded on The New York Stock Exchange. The tradmg symbol for the stock is DUK. Genem! Offices 422 South Church Street P.O. Box 33189 Charlotte, NC 28242 (704/373-4011) SEC Form 10-K and Statistical Supplement Upon wntten requed, the Company will provide, without charge, a copy of its 1981 annual report on Fonn 10-K as filed with the Secuntxs and Exchange Commis-sion. Also available without charge is a Statistical Supplement to the 1981 Annual Report to Shareholders. Requests for such documents should be daected to Sue H. Cannon, Investor Relations Department, Duke Power Company, P.O. Box 33189, Charlotte, NC 29242 dff r4 ,,.i
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