ML20071A473
| ML20071A473 | |
| Person / Time | |
|---|---|
| Site: | Point Beach  |
| Issue date: | 02/15/1983 |
| From: | Remmel J WISCONSIN ELECTRIC POWER CO. |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8302240159 | |
| Download: ML20071A473 (14) | |
Text
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n Eh gowen coureur yehroary 15, 1983 231 W. MICHIGAN, P.O. BOX 2046, MILWAUKEE, WI 53201 Mr. Jerome Saltzman, Chief Antitrust & Indemnity Group Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D. C.
20555
Dear Mr. Saltzman:
We are herewith providing our guarantee under the retrospective premium system which became effective August 1, 1977 pursuant to:
1.
Certain provisions of the 1975 Amendmer.ts to the Price-Anderson Act, 2.
Certain requirements relating to guaranteeing retrospectivo premiums published by the Nuclear Regulatory Commission in the Federal Register on January 31, 1977 (42 F.R.
46),
3.
Your letter of June 15, 1977 addressed to Wisconsin Electric Power Company and Wisconsin Michigan Power Company, and f
4.
Our reply to your letter of June 15, 1977 dated June 27, 1977 with a showing of adequate cash flow as detailed in the documents attached and listed below which are required in utilizing this alternative:
1.
Annual certified financial statements for year 1982.
2.
Certified Cash Flow Projection for year 1983 with narrative statement.
Sincerely, N
J. G. Remmel/bjk Treasurer Attach.
0302240159 830215 PDR ADOCK 05000266 I
Wisconsin Electric Power. Company System 18 income Statement War ended December 31 mwands c4 oottars) 1982 1981 1980
, Operating Revenues Electric
$ 974,788 5 869,977 5 761,051 Cas 317,225 273,065 237,932 S*?am 10,897 9,341 8.162 10tal Operating llevenues 1,302,910 1,152,383 1,007.145 Operating Expenses Fuel (Note A) 261,992 256,045 215,604 Purchased power 37,310 30,509 63,203 Cas purchased for resale 253,070 224,051 190.598 Other operation expenses (Note 8) 200,091 172,120 158,426 Maintenance 103,805
-85,664 78,095 Taxes other than income taxes 49,099 44,576 35,249 Depreciation (Note C)
Straight line 85,010 78,600 68.849 Deferred income taxes (Note D) 17,027 29,192 22,081 Federalincome tax (Note D) 72,464 33,676 1.316 Investment tax credit adjustments-net (Note D) 10,557 15,581 32,024 State income tax (Note D) 15,404 9,601 2,623 10tal Operating Expenses 1,105,829 980,215 868,068 Operating income 197,081 172,168 139,077 Other income and Deductions Interest income 9,305 7.156 3,897 Allowance for other funds used during construction (Note E) 4.588 3,155 5,330 Miscellaneous-net (Note M)
(7,1 96)
(151)
(190)
Federalincome tax (Note D)
(811)
(2.852)
(2,274)
State income tax (Note D)
(208)
(515)
(378) 10tal Other income and Deductions 5,678 6,793 6,385 income 8efore Interest Charges 202,759 178,961 145,462 Interest Charges Long term debt 64,341 65,344 52,304 Allowance for borrowed funds used during construction (Note E)
(2,81 2)
(3,557)
(8,338)
Other 9,585 11,672 19,008 1DtalInterest Charges 71.114 73,459 62,974 t
Net income 131,645 105,502 82,488
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Preferred $tock Dividend Requirement 15,087 15,087 13,520 i
Earnings Available for Common Stockholders 8 116,558 5
90.J15 5 68,968 Average Number of Shares of l
Common Stock Outstanding (Thousands)*
32,402 30,894 29,314 l
Earnings Per Share of Common Stock *
$3.60
$2.93 52.35 l
- The amounts for 1981 and 1980 hase been restated to I
reflect the July 1982 3-for-2 common stock split.
The notes on pages 24 through 28 are an integral part i
of the financial statements.
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Wisconsin Electric NS450.2 (1st afts made and stored on original galley) moe 2-10-83
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i Wisconsin Electric Power Company System 19 Statement of Changtss in Mnancial Position = Year ended December 31 m m nm ornon n 1982 1981 1980 Financial Resources Provided Operations Net income
$131,645 5105,502 5 82,488 Depreciation-straight line 85,010 78,600 68,849
-deferred income taxes 17,027 29,192 22,081 Accumulated deferred inwstment tax credits 8,442 12.954 27,331 Nuclear fuel expense 11,165 7.573 8,431 Amortization of precertification expenditures 9,137 8,358 5,906 Write-off of additional construction costs 5,000 Allowance for funds ueed during construction (7,400)
(6,712)
(13,668)
Total from operations 260,026 235,467 201,418 Common stock 30,152 25,260 21,767 Preferred stock 24,906 Long term debt 6,904 148,970 Sale of nuclear fuel 27,112 23.042 66,501 Release of construction funds held by trustees 1,641 2,578 20,633 Normalization of income taxes-precertification expenditures (3,363)
(4,141) 9,939 Centributions and advances in aid of construction 3,741 3,282 4.369 Deferred charges / credits and other 1,41 6 (8.197) 4.638
$ 327,629 5277,291 5503,141 Mnancial Resources Used Construction expenditures
$139,621 5154,814 5294.102 Nuclear fuel 22,617 32,813 31,260 Dividends 76,521 69,262 61,763 Retirement oflong term debt 60,425 3,675 15,107 Reduction of short term borrowings 14,983 55,062 58,978 Construction funds held by trustees 6,925 Increase (decrease) in working capital (other than short term borrowings and long term debt due currently) 6,539 (38,335) 41,931
$327,629 5277,291 5503,141 Increase (Decrease)in Components of Working Capital Cash and temporary cash investments
$(28,894) 539,027 5(10.877)
Accounts receivable and accrued utility revenues 1,588 14.078 22,482 Fossil fuel 21,626 (16.283) 40.550 Accounts payable and accrued liabilities 10,439 (70,892)
(19,630)
Other 1,780 (4,265) 9.406 8 6,539 5(38,535) 5 41,931 The notes on pages 24 through 20 are an integral part of the finanaal statements wconsin Electnc N5450 3 (2nd atts made and stored on onginal galley) mDe 2-11-83
i Wisconsin Electric Power Company System 20 Balance Sheet
- December 31 Uhnuunds of DOHv0 Assets 1982 1981 Utility Plant Electric
$ 2,155,979 52,114.435 Gas 219,091 206,838 Steam 19,259 18,483 2,394,329 2,539,756 Accumulated provision for depreciation (1,001,867)
(913,402) 1,392,462 1,426,354 Construction work in progress 332,271 266,546 Nuclear fuel (Note A) 46,300 46,976 Net Utility Plant 1,771,033 1,739,876 Nonutility Property 8,999 7,899 Accumulated provision for depreciation (2,037)
(1,006)
Net Nonutility Property 6,962 6,893 Construction Funds Held by Trwiees 6,976 1,694 Current Assets Cash 7,21 0 5.374 Temporary cash investments 8,170 38,900 Accounts receivable (Note F) 54,533 52.043 Accrued utility revenues 106,845 107.347 Fossil fuel (at average cost) 105,072 83,446 Materials and supplies (at average cost) 42,00:
40,349 Prepayments and other assets 5,700 5.572 TDtal Current Assets 329,531 333,431 Deferred Charges and Other Assets 16,796 34,176
$2,131,298 52,116.070 The notes on pages 24 through 20 are an integral part of the financial setements.
Wisconsin Electnc Ns4504 mpe 1st minor arts made on 210-85 (No NEW att galley was made)
i 21 (ThotMnds of Dolfars)
Uabilities 1982 1981 Capitalization (See Capitalization Statement)
Common Stock Equity (Note G)
S 775,173 5 690.186 Preferred Stock-Redemption Not Required (Note H) 160,451 160,451 Preferred Stock-Redemption Required (Note 1) 25,000 25,000 Long Term Debt (Note J) 737,720 732,631 1Dtal Capitalization 1,698,344 1,608,268 Current Liabilities 59,119 Long term debt due currently (Note J)
Notes payable to banks (Note K) 4,999 19,982 Accounts payable 93,390 98.356 Payroll and vacation accrued 15,977 13.410 Taxes accrued-income and other 74,252 72,176 Interest accrued 24,398 19.195 Other 7,524 22,833 letal current Liabilities 220,540 305,081 Deferred Credits and Other Liablittles Accumulated deferred investment tax credrts 122,281 113,83')
Nuclear fuel costs accrued 30,891 30,578 Unamortized accrued utility revenues 16,889 21.111 Other 7,139 5,656 TDtal Deferred Credits and Other Liabilities 177,200 171,184 Contributions in Aid of Construction 35,214 31.537 Commitments and Contingencies (Note M) 82,131,298
$2,116.070 The notes on pages 24 through 29 are an integral part of the financal statements-Wrstonsin Electric NS450 5 (1ast arts made and stored on original galley) moe 2-10 85
Wisconsin Electric Pover Company System 22 Cepitaltration Statem8nt
- December 31 (Thomands of Doitam 1982 1981 Ceramon Stock Equity * (Note C)
Common Stock ($10 par value, authorized 41.000.000 shares.
33.216.164 and 31.732.460 shares issued)
Premium on Caprtal Stock
$ 332,162 5 317.325 79,914 64.599 Retained Earnings 363,097 308.262 1 Deal Common Stock Equity 775,173 690.186
)
Preferred Stock-Wisconsin Electric Power Company. Cumulative Six Per Cent. Preferred Stock- $100 par value. authorized 45.000 shares. 44.508 shares issued 4,451 4.451 Senal Preferred Stock-525 par value, authorized 5.000.000 shares, unissued Senal Preferred Stock-5100 par value. authorized 2.360.000 shares 3 60% Series-260.000 shares issued 26,000 26.000 8 SO% Senes-400.000 shares issued 40,000 40.000 7.75% Series-300.000 shares issued 30,000 30.000 8 80% Senes-600.000 shares issued 60,000 60.000 1Dtal Preferred Stock-Redemption Not Required (Note H) 160,451 160.451 10875% Senes-250.000 shares issued. redeemable at par 25,000 25.000 10tal Preferred Stock-Redemption Required (Note 1) 25,000 25.000 Long 19rm Debt (Note J)
First Mortgage Bonds Senes Due 1982 1981 Series Due 1982 1981 Wisconsin Electnc Power Company 3% % - 1982 8-5 9.119 6% % - 1998 8 9,822 5 9.832 1020% - 1982 50.000 6 % % - 1998 33,621 33.698 34 % - 1984 16,848 17,177 6.10% - 1999-2008 25,000 25.000 3h%-1986 21,207 21.420 6.25% - 1999-2008 1,000 1.000 15% % - 1986 80,000 80.000 7 % % - 1999 38,973 38.986 11 40% - 1987 70,000 70.000 8% % - 1999 39,537 39.550 4% % - 1988 22,1 91 22.426 8M%-1999 11,729 11.756 5% - 1990 26,701 26.701 6.45% - 2004 12,000 12.000 4 % % - 1991 3,620 3.620 8 % % - 2006 59,990 60.000 4M%- 1993 5,01 6 5.049 6 45% - 2006 4,000 4.000 5% % - 1996 37,188 37.255 6.50% - 2007-2009 10,000 10.000 6M% -1997 11,507 11.512 8 % % - 2008 30,000 80.000 6%',- 1997 37,790 37.907 657J40 718.008 Wisconsin Natural Cas Company 4% % - 1986 3,631 3.631 6 % % - 1992 9,31 2 9.324 4% % - 1987 4,478 4.479 8 % % - 1994 9,598 9.611 4% % - 1990 8,488 6.513 8% % - 1996 9,738 9.776 43,245 43.334 700,985 761,342 Debentures (Unsecured)
Wconsin Electric Power Company-7% Series due 1993 31,165 31.942 Note (Unsecured)
Wrsconsin Electric Power Company-7%% due 1985 7,000 Unamortized Discount -net (1,430)
(1.534)
Long Term Debt Due Currently (59.119) 1Dtal Long Term Debt 737,720 732.631 1etal Capitalizacio.1 81,698,344 51.608.268
'The amounts for 1981 haw been restated to reflect the Jutv 1982 3-for 2 common stock spht The notes on pages 24 through 20 are an integral part of the financial statements.
Wisconsin Electnc N5450.6 (1st alts made and stored on original galley) moe 2 10-83
Wisconsin Electric Power Company System 23 Betalued Earnings Statement = Year ended December 31 moueands 9 Dottaro 1982 1981 1980 Balance, Jin-.V 1 8306,262 5272.043 5251.488 Additions Net income 131,645 105,502 82.488 439,907 377,545 333,976 Deductions Dividends-Cash Preferred stock 15,067 15,087 13.294 Common stock-51.902,51.76 and 51.657 per share
- 61,434 54,175 48.469 76,521 69,262 61,763 Cost of issuing capital stock 289 21 170 76,810 69.283 61.933 Balance, December 31 8363,097 5308.262 5272.043
- The amounts for 1981 and 1980 have been restated to reflect the July 1982 3-for 2 common stock split.
The notes on pages 24 through 29 are an integral part of the financial statements Wisconsin Electric NS450 7 (1st alts were made and stored on original galley) moe 2 10-83
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hsconsin Electric Power Company System 24 Notes to Financial Statements Summary of Significant Accounting Policies income Taxes General Deferred income tax accounting is practiced in respect to The accounting records of the company and its utility significant timing differences. The federal investment tax subsidiary are kept as prescribed by the Federal Energy credit is accounted for on the deferred basis and is reflected Regulatory Commission, modified for requirements of the in income ratably over the life of the related property.
Public Service Commission of Wisconsin (PSCW). The consol-idated financial statements include the accounts of the com-unt W W p y and ubsidia ies isconsin Natural Gas Company Long term debt premium or discount and expense of ssuance are amortized by the straight line method over the lives of the debt issues. U namortized amounts pertaining to itevenues debt reacquired for sinking fund purposes are written off Meters are read and accounts are billed monthly. Since currently.
January 1,1977 utility revenues have been recognized on the accrual basis and include estimated amounts for service rendered but not billed. Accrued utility revenue of $52 A = Rental Expense
. Total rental expense was $39,895,000 in 1982, 533.092,000 million at December 31,1976 is being recorded as revenue in ecuatamounts over a ten year period as prescribed by m 1981, and $27,800,000 in 1980. This includes charges of the PSCW' 536,948,000 in 1982,530.442,000 in 1981, and 525,551,000 in 1980 relating to the company's nuclear fuel leasing Puel arrangement with Wisconsin Electric Fuel Trust (Trust). The The cost of fossil and nuclear fuel is expensed in the nuclear fuel is leased for a period of 60 months or until the period consumed.
removal of the fuel from the reactor, if earlier. Lease payments Nuclear fuel expense includes an estimate for offsite include charges for the cost of fuel burned, financing costs storage of spent nuclear fuel after removal from the reactor.
and a management fee. In the event the company or the No salvage value is recognized for spent nuclear fuel.
Trust terminates the lease, the Trust would recover its unamortized cost of nuclear fuel from the company. Under Gas Purchased for itesale the lease terms, the company is in effect the ultimate The cost of purchased gas sold is expensed in the penod guarantor of the Trust's commercial paper and line of the gas is received from the pipeline supplier.
credit borrowings financing the investment in nuclear fuel.
The nuclear fuel lease has been treated as an operating Property lease in the financial statements and by the PSCW in Electric and gas utility property is recorded at original determining revenue requirements. The value of the leased cost, and steam utility and nonutility property is recorded at fuel is not included in the company's rate base. Had the cost. Additions to utility property and significant replacements lease been accounted for as a capital lease, an asset and are charged to utility plant at cost. Cost includes material, corresponding liability equal to the unamortized cost of the labor and allowance for funds used during construction leased nuclear fuel would have been recorded at December (see Note E). Replacements of minor items of property are 31 in the amounts of 553,036,000 in 1982, and $53,241,000 charged to maintenance expense. The cost of depreciable in 1981.
property, together with removal cost less salvage, is charged to accumulated provision for depreciation when property is retired.
Wisconsin Electric NS450-13 (3rd alts made and stored on original galley) 2/14/83 mpe I
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- Pension Plans D
- Income Tax Expense Several noncontnbutory pension plans cover all eligible Below is a summary of income tax expense and a rec-employes Normal employe pension cost is accrued and onciliation of totalincome tax expense with the tax expected funded currently Unfunded prior service liability is amor0 Zed at the federal statutory rate.
over periods from ten to thirty years. Pension expense was 515.113,000 in 1982, 511,414.000 in 1981. and 59.015.000 nnousanos or ooltar5) 1982 1981 1980 comparison of accumulated plan benefits and plan net fNt$Nt assets available for benefits is shown below a@ustments-net 10.557 15.581 32.024 December 31 Deferred taxes charged to deprecacon excese 17.027 29.192 22.081 aneusanes of Donars 1982 1981 1980 Total tax expense 5116.471 5 91.417 5 60.696 Actuanal pre';ent value of accumutated plan benehts income beforeincome taxes $248,116 5196.919 5143.184 Vested benefits
$150.067 5135.817 5120.307 Nonvested benefits 10.050 7.554 5.567 Ex ed tax at federal 5160,117 5143.371 G125.874 Mowance for funds used dunng construcDon (3.404)
(3.088)
(6.287)
Net plan assets 5182.083 5137.037 5131.088 State income tax net of federal tax reduction 10.800 7.785 4.894 The weighted average rate of return used in determining
@ ment tax credrt rgrM (5.561)
(4.952)
(3.940) the actuarial present value of accumulated plan benefits ex,wcted tax) 503 1.089 164 was M%
Total tax expense
$116.471 5 91.417 5 60.696 E*
Depreciation expense is accrued at straight line rates The aggregate amount of deferred income taxes included certified by the PSCW. Depreciation rates include estimates in the accumulated provision for depreciation at December of salvage and plant removal costs. Nuclear plant depreciation 31 was $223,265,000 in 1982 and $199,314.000 in 1981' rates provide for an amount to cover estimated plant decommissioning costs-E = Allowance for Punds Used During Construction i
Additional depreciation is accrued, in accordance with MPDC) the PSCW requirements. which is equal to the tax effects of AFDC is included in utility plant accounts and represents timing differences related to property and nuclear fuel the cost of borrowed funds used during plant construction including principally the use for tax purposes of accelerated and a rate of return on stockholders' capital used for depreciation methods (see Note D).
construction purposes. On the income statement the cost Straight line depreciation as a percent of average of borrowed funds (before income taxes) is a reduction of depreciable utilifv olant was 3.8% in 1982 and 3.6% in 1981 nterest expense and the return on stockholders' capital is I
and 1980.
an item of noncash other income.
The company has been limited by the PSCW to capi-talizing AFDC only on construction work in progress exceed-ing 12.5% ofits net irivestment rate base in 1982 and 10%
of its net investment rate base in 1981 and 1980. Revenues i
granted by the PSCW in rate orders include the equivalent of a return on investment in construction work in progress below this limit. AFDC was capitalized in 1982.1981 and 1980 at a rate of 7% approved by the PSCW.
Wisconsin Electric NS450,14 (2nd alts made and stored on original galley) 2/11/83 mpe
Wisconsin. Electric Power Company System 26 Notes to Financial Statements continued F
- Accounts iteceivable I
- Preferred Stock-Itedemption itequired Accounts receivable are shown on the balance sheet in 1980 the company issued 250,000 shares of Serial after deducting an accumulated provision for doubtful Preferred Stock,10.875% Series. The redemption at 5100 accounts in the amount of 52,571,000 for 1982 and par value of 6,250 shares is required annually on each 51,683,000 for 1981. Uncollectible account write-offs net of September 1, from 1990 through 2009, with redemption recoveries were 55,281,000 in 1982, 53,451,000 in 1981, of the remaining shares required on September 1,2010. In and 52,897,000 in 1980.
addition to the mandatory redemption, the company may at its option redeem the stock at $110.13 to September 1, C
- Common Stock and Premium on Capital Stock 1983 and at declining amounts thereafter to $100 after in July 1982 the company executed a 3-for-2 stock split September 1, 2009. In the event of default in the payment and issued 10.808.826 additional common shares pursuant of dividends or in the mandatory redemption requirements.
thereto The par value of the common stock was not changed no dividends or other distribution shall be declared on jun-as a result of the stock split, and accordingly common Stock ior stock. In addition, no dividend shall be declared on any was increased and premium on common stock was decreased preferred stock class and series except ratably on all pre-5108.088.000. In addition. 5131,000 was paid to stockholders fc* red shares according to their respective dividend rates.
in lieu of fractional shares equivalent to 6,192 full shares.
Sales of common stock under the company's Automatic J a Long Term Debt Dividend Reinvestment and Stock Purchase Plan (ADRSPP)
The matunties and sinking fund requirements through and Tax Reduction Act Stock Ownership Plan (TRASOP) are 1987 for the aggregate amount of long term debt out-summarized below standing at December 31,1982 are shown below. Of the annual sinking fund requirements, 53,990,000 may be 1982 1981 1980 Satisfied by certifying additional mortgaged property.
Shares issued (restated for 3-for-2 stock solo 1983 5 6.190.000 ADRSPP 1.291.091 1.257,908 1.090.614 1984 49.571.000 TRA50P 198.805 372.883 382.475 1985 55.960.000 D PP
$25.820.000 $19.199.000 $15.551.000 TRA5oP 5 4.332.000 5 6.0C1.000 5 6.216.000 Future sinking fund requirements have been anticipated Proceeds from sales over the 510 par value of common by advance purchases of bonds to the extent of 52.404.000 stock sold are reflected as premium on capital stock.
and certification of property in the amount of 53,990,000.
Sinking fund requirements for 1983 have been satisfied.
H
- Preferred Stock-Redemption Not Required Substantially all utility plant and nonutility property is The Serial Preferred Stock is redeemable in whole or in subject to the lien of the applicable mortgage.
part at the option of the company at the following re-demption prices plus any accrued dividends.
K + Notes Payable and Commercial Paper Series Redernption Pnce Per Share Unused lines of credit for short term borrowing amounted to $103,350,000 at December 31,1982. In support of to December 1.1985 and $101 thereafter various informal lines of credit from banks, the companies 7.75% 5104 to November 1,1986 and $101 thereafter have agreed to maintain unrestricted compensating balances.
8 80% 51c2 80 to January 1,1984. 5105 87 to January 1,1989.
With the exception of funds required for daily operations, 5102 94 to January 1.1994 and $101 thereafter the cash balance shown on the balance sheet at December 31,1982 as well as $350,000 of non-interest bearing cer-tificates of deposit included in temporary cash investments represent compensating balances.
27 L
- Information by Segments of Susiness nnousanos of Doriars)
War Ended December 31 1982 1981 1980 Electric Operations Rewnue from unaffiliated customers 8 974,788 5 869.977 5 761,051 Intersegment sales 108 129 181 Operating revenues 974,896 870.106 761,232 Operating income before income taxes 285,690 244.166 181.138 Depreciation-straight line 76,225 70.239 60,992 Construction expenditures 121,471 140,899 276,929 Cas Operations Rewnue from unaffiliated customers 317,225 275,065 237,932 Intersegment sales 10,476 11,878 21,588 Operating revenues 327,701 284,943 259.520 Operating income before income taxes 24,268 14,272 14,794 Depreciation-straight line 8,207 7,802 7.311 Construction expenditures 16,713 13,250 16.240 Steam Operations Operating revenues (unaffiliated) 10,897 9,341 8.162 Operating income before income taxes 2,575 1.780 1,189 Depreciation-straight line 578 559 546 Construction expenditures 1,405 665 760 Consolidated Operating reenues (excluding intersegment sales eliminated in consolidation) 1,302,910 1,152,383 1,007.145 g
Operating income before income taxes 312,533 260.218 197.121 Depreciation-straight line 85,010 78.600 68,849 Construction expenditures (including nonutility) 139,621 154,814 294,102 At December 31 Net identifiable Assets Electric
$ 1,906,446 51,899,843 51,820,679 Gas 204,763 196,843 190,555 Steam and nonutility 20,089 19,384 19,007 Total Consolidated Assets
$2,131,298 52.116.070
$2,030,241 Intersegment sales consist principally of gas sold by Wisconsin Natural to the company at rates approved by the PSCW.
i C]* Commitments and Contingencies in April 1982 American Can Company (American Can)
Plans for the construction and financing of future additions commenced an action against the company in U.S. District to utility plant can be found elsewhere in this report in Court seeking unspecified damages for allegad breaches by
Management's Discussion and Analysis of Financial Condition the company of an Agreement dated January 16,1975, and Results of Operations." At December 31,1982, con-providing for the purchase and use by the company of a f
struction work in progress includes $41,136.000 of company.
fuel derived from refuse. The complaint was amended on financed expenditures relating to the company's 25% share May 5,1982 to specify damages of $41,500,000. On May in the 380 megawatt Edgewater Unit 5 coal-fired generating 18,1982 the company filed a counterclaim against American station which is being constructed by Wisconsin Power and Can for damages in excess of $20,000,000. Although the Light Co.
result of litigation cannot be predicted with certainty, the l
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Wisconsin ' Electric Power Company System 28 Notes to Financial Statements continued company does not believe the ultimate outcome of this litigation will haw a material aderse impact on the company's financial statements.
In January 1982 the PSCW issued an order directing the companytowriteoff 5S 000.000ofitsinvestmentin Pleasant Prairie Power Plant Unit 1. representing certain additional construction costs incurred to place Unit 1 in operation by June 30,1980. The PSCW deemed this expenditure impru-dently incurred and directed a refund to customers of approximately 5900.000 of related revenues previously held subject to refund The PSCW denied the company's request for a rehearing on this matter and in March 1982 the company wrote off the 55.000.000 of construction costs and made provision for the ordered refund of revenues.
Subsequently, the Milwaukee County Circuit Court dismissed the company's petition for review and reversal of the PSCW order in this matter. An appeal of the Circuit Court's order has been filed and in July the Circuit Court granted the company's motion to relieve it from the refund obligation pending outcome of the aLpeal. Management believes the additional construction costs incurred were prudent and should be recognized for rate-making purposes.
In 1979 the company wrote off its share ($2.3 million after income tax effect) of certain capitalized expenditures related to the discontinued Koshkonong nuclear plant project.
In late 1979 the Brown County Circuit Court found that such expenditures were prudently made and were not to be charged to the stockholders and, therefore, reversed and remanded the order to the PSCW for modification. The CircuR Court order, which had been reversed by a 1981 Wisconsin Court of Appeals decision, has been upheld by a November 1982 decision of the Wisconsin Supreme Court.
The company has not restored the write-off to income pending the outcome of the PSCW proceedings to reconsider recovery of the expenditures from ratepayers.
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I Report ofIndependent Accountants To the Board of Directors and the Stockholders of Wisconsin Electric Power Company In our opinion, the accompanying consolidated balance sheet and statement'of capitalization and the related consolidated statements of income, retained earnings, and changes in financial position present fairly the financial position of Wisconsin Electric Power Company and its subsidiaries at December 31,1982 and 1981, and the results of their operations and the changes in their financial position for each of the three years in the period ended December 51,1982, in conformity with generally accepted accounting principles consistently applied.
Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
1 A45s px Milwaukee, Wisconsin January 27,1983 Wisconsin Electric NS450.11 (1st alts made and stored on original galley) mpe 3-11-83
WISCONSIN ELECTRIC POWER COMPANY 1983 Internal Cash Flow Projection for Point Beach Nuclear. Power Station (Dollars in Millions)
Actual Projected 1982 1983 Net Income After Taxes
$132
$146 Less Dividends Paid (77)
(81)
Retained Earnings 55 65 Adjustments:
Depreciation and Amortization 85 112 Deferred Income Taxes and Investment Tax Credits (Less TRASOP) 25 24 Allowance for Funds Used During Construction (7)
(15)
Total Adjustments 103 121 Internal Cash Flow S158
$186 Average Quarterly Cash Flow
- S39.50
$46.50 Percentage Ownership in all Operating Unit No. 1 100%
Nuclear Units Unit No. 2 100%
Maximum Total Contingent Liability
$20 million
- If it becomes necessary to curtail capital expenditures to ensure meeting a retrospective premium call, we would anticipate reducing construction activities to the extent necessary.
CFRTIFICATION:
The Cash Flow Projections detailed above are based on the most current information available to us and *epresent our best estimates as of this date.
~,I$
By i*
Dated
\\{ Treasurer