ML20071H048
| ML20071H048 | |
| Person / Time | |
|---|---|
| Site: | Farley  |
| Issue date: | 05/20/1983 |
| From: | Bowden T ALABAMA POWER CO. |
| To: | Saltzman J Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20071H053 | List: |
| References | |
| NUDOCS 8305240481 | |
| Download: ML20071H048 (16) | |
Text
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AlJ bama Power Company e
600 North 18th Street Post Offics Box 2641
- Birmingh;rn, Alabama 35?91 Telephone 205 250-1000 Trevis J. Bowden Vice President-Finance and Treasurer the southern electrc system May 20, 1983 Mr. Jerome Saltzman Chief, Antitrust and Indemnity Group Nuclear Reactor Regulation Nuclear Regulatory Commission Washington, D. C.
20555
Dear Mr. Saltzman:
Enclosed is the annual submission of Alabama Power Company with respect to the retrospective premium guarantee required under the Price-Andersen Act, as amended, applicable to its Joseph M. Farley Nuclear Plant. We have elected to satisfy this guarantee requirement by submitting annual certified financial statements and cash projections, showing that a cash flow can be generated and would be available for payment of retrospective premiums up to $20,000,000 within three months after submission of the statement.
In this connection, enclosed are the following:
1.
1982 Annual Report which includes financial statements for the calendar year 1982, together with the report on
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such statements by Arthur Andersen & Co., independent public accountants; 2.
Unaudited Financial Statements for the quarter ended March 31, 1983; 3.
Cash Flow Projections for the period January 1,1983 l
through December 31, 1983, showing that cash flow for
$20,000,000 can be generated and would be available for payment of retrospective premiums within three months after submission of the statement.
1 Please acknowledge receipt of the enclosures by signing and i
returning a copy of this letter.
Yours very truly, p- _ _ _-
yA- -
Travis J. Bowden d
OI yD TJB/no 3
Enclosures
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PDR 1 N
ALABAMA POWER COMPANY Internal Cash Flow for Joseph M. Farley Nuclear Power Station (Dollars in Thousands) 1982 1983 Actual Pro iec t ion s Net Income After Taxes
$198,915
$235,957 Less Dividends Paid (167.358)
(184.131)
Retained Earnings 31 557 51.826 Adjustments:
Depreciation and Amortization 238,664 258,351 Deferred Income Taxes and Investment Tax Credits 184,674 169,130 Allowance for Funds Used During Construction (Gross)
(72.148)
(77.364)
Total Adjustments 351.190 350.117 Internal Cash Flow
$382.747
$401.943 Average Quarterly Cash Flow
$ 95.687
$100.486 Percentage Ownership in all Operating Nuclear Units:
Joseph M. Farley Units 1 and 2 100%
Maximum Total Contingent Liability
$20,000
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SECURITIES AND EXCHANGE COMMISSION Washington, D. C.
20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 or 15(d) 0F THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1983 Commission file number 1-3164 ALABAMA POWER COMPANY (Exact name of registrant as specified in its charter)
Alabama 63-0004250 (State or other jurisdiction of (I.R.S. Employer incorporation or organization)
Identification No.)
600 North 18th Street, Birmingham, Alabama 35291
( Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code (205) 250-1000 Shares of Common Stock Outstanding at April 30, 1983 5,608,955 j
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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F ALABAMA POWER COMPANY INDEX TO QUARTERLY REPORT ON FORM 10-Q March 31, 1983 Page Number PART I - FINANCIAL INFORMATION Management's Opinion as to Fair Statement of Results and Review by Independent Public Accountants 1
Condensed Balance Sheets at March 31, 1983 and December 31, 1982 2
Condensed Statements of Income for the Three Months and Twelve
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Months Ended March 31, 1983 and 1982 4
Condensed Statements of Sources of Funds for Gross Property Additions for the Three Months Ended March 31,1983 and 1982 5
Notes to Condensed Financial Statenents 6
Management's Discussion and Analysis of Results of Operations and Financial Condition 7
PART I, Exhibit 1 - Statement of Review by Independent Public Accountants 10 PART II - OTHER INFORMATION 11 SIGNATURES 12 i
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E ALABAMA POWER COMPANY MANAGEMENT'S OPINION AS TO FAIR STATEMENT OF RESULTS The condensed financial statements included herein have been prepared by Alabama Power Company (ALABAMA), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.
In the opinion of management the information furnished herein reflects all adjustnents (which included only normal recurring adjustments) necessary to present fairly the results for the periods ended March 31, 1983 and 1982. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although ALABAMA believes that the disclosures are adequate to make the information presented not misleading.
It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in ALABAMA's latest annual report to stockholders as incorporated and filed with Form 10-K.
REVIEW BY INDEPENDENT PUBLIC ACCOUNTANTS The condensed financial statements included herein have been reviewed by ALABAMA's independent public accountants as set forth in their report included as PART I, Exhibit 1.
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ALABAMA POWER COMPANY CONDENSED BALANCE SHEETS (Stated in Thousands of Dollars)
ASSETS At March 31, 1983 At December 31, (Unaudited) 1982 UTILITY PLANT:
Utility plant, at original cost
$5,821,677
$5,728,738 Less--Accumulated provision for depreciation 1,263,376 1,218,727 4,558,301 4,510,011 Nuclear fuel, at amortized cost 152,209 143,767 4,710,510 4,653,778 Less--Property-related accumulated deferred income taxes 506,432 491,264 4,204,078 4,162,514 i
i OTHER PROPERTY AND INVESTMENTS:
Southern Electric Generating Company 16,400 16,400 Nonutility property, net 2,551 2,437 Miscellaneous 1,239 1,194 20,190 20,031 CURRENT ASSETS:
Cash 4,408 11,203 Temporary cash investments, at cost 48,076 14,009 Receivables--
Customer accounts receivable 100,607 101,059 Other accounts and notes receivable 11,253 12,262 Intercompany accounts 20,466 36,791 Accumulated provision for uncollectible accounts (596)
(558)
Refundable federal income tax 13,573 22,173 Fossil fuel stock, at average cost 236,447 210,349 Materials and supplies, at average cost 28,816 26,154 Prepayments 54,384 27,900 517,434 461,342 DEFERRED CHARGES:
Debt expense, being amortized 6,961 6,948 Miscellaneous 40,197 32,523 47,158 39,471
$4,788,8(0
$4,683,358 The accompanying notes are an integral part of these condensed statements.
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ALABAMA POWER COMPANY CONDENSED BALANCE SHEETS (Stated in Thousands of Dollars)
CAPITALIZATION AND LIABILITIES At March 31,
_ 1983 At December 31, (Unaudited) 1982 CAPITALIZATION:
Common stock equity--
Cominon stock, par value $40 per share -
authorized 6,000,000 shares, outstanding 5,608,955 shares
$ 224,358
$ 224,358 Other common stock equity 1,146,569 1,116,532 1,370,927 1,340,890
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Preferred stock 374,400 374,400 Preferred stock subject to mandatory redemption 40,000 42,234 Long-term debt 2,359,081 2,370,050 4,144,408 4,127,574 CURRENT LIABILITIES:
Preferred stock sinking fund requirement 2,234 Long-term debt due within one year 94,655 59,821 Accounts payable--
Intercompany accounts 39,138 43,405 Other 118,381 101,458 Customer deposits 24,440 23,996 Taxes accrued--
Federal and state income 30,497 27,483 Other 18,996 8,731 Interest accrued 72,121 65,241 Miscellaneous 34,875 40,537 435,337 370,672 DEFERRED CREDITS, ETC.:
Accumulated deferred investment tax credits 191,018 170,709 Miscellaneous 18,097 14,403 209,115 185,112 t
$4,788,860
$4,683,358 The accompanying notes are an integral part of these condensed statements.
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ALABAMA POWER COMPANY CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(Stated in Thousands of Dollars)
For th'e Three Months For the Twelve Months Ended March 31, Ended March 31, 1983 1982 1983 1982 OPERATING REVENUES
$441,022
$434,578
$1,770,589
$1,633,471 OPERATING EXPENSES:
Operation--
Fuel 128,960 115,641 554,197 510,744 Purchased and interchanged power, net (2,312) 9,743 4,988 96,765 Other 60,123 57,265 235,809 203,499 Maintenance 36,693 41,302 144,781 146,983 Depreciation and amortization 42,564 43,353 168,963 157,655 Taxes other than income taxes 27,016 26,638 97,314 94,113 Federal and state income taxes 48,171 43,640 180,770 i 111,109 Total operating expenses 341,215 337,582 1,386,822 1,320,868 OPERATING INCOME 99,807 96,996 383,767 312,603 OTHER INCOME:
Allowance for equity funds used during construction 8,503 4,569 24,287 31,888 Income from subsidiary 765 585 2,593 2,469 Other, net 1,701 1,825 5,681 6,123 Income before interest charges 110,776 103,975 416,328 353,083 INTEREST CHARGES:
Interest on long-term debt 61,017 63,365 248,456 246,232 Amortization of debt discount, premium and expense, net 248 248 937 920 Other interest charges 1,004 2,179 9,491 6,327 Allowance for debt funds used during construction (10,289)
(11,626)
(50,459)
(44,053)
Net interest charges 51,980 54,166 208,425 209,426 NET INCOME 58,796 49,809 207,903 143,657 DIVIDENDS ON PREFERRED STOCK 9,159 9,165 36,653 36,890 NET INCOME AFTER DIVIDENDS ON PREFERRED STOCK
$ 49,637
$ 40,644
$ 171,250
$ 106,767
( ) Denotes red figure.
The accompanying notes are an integral part of these condensed statements.
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ALABAMA POWER COMPANY CONDENSED STATEMENTS OF SOURCES OF FUNDS FOR GROSS PROPERTY ADDITIONS (UNAUDITED)
(Stated in Thousands of Dollars)
For the Three Months Ended March 31, 1983 1982 Net income
$ 58,796
$ 49,809 Add (deduct) principal noncash items--
Depreciation and amortization 57,502 53,794 Deferred income taxes, net 20,919 19,720 Deferred investment tax credits 21,739 16,911 Allowance for equity funds used during construction (8,503)
(4,569) 150,453 135,605 Less--Dividends on common stock 34,6.00 31,000 Dividends on preferred stock 9,159 9,165 106,694 95,500 Decrease (increase) in net current assets, excluding notes payable, and long-term debt and preferred stock due within one year --
Cash and temporary cash investments (27,272) 11,238 Receivables 17,824 (59,638)
Refundable federal income taxes 8,600 10,300 Fossil fuel stock (26,098)
(38,613)
Materials and supplies (2,662)
(1,370)
Accounts payable 14,562 3,776 Revenues to'be refunded (1,906)
Interest accrued 6,880 7,846 Taxes accrued 13,279 15,064 Other, net (31,702)
(14,055)
(28,495)
(65,452)
Other, net (including allowance for equity funds used during construction)
(602) 10,000 Total internal sources 77,597 40,048 External Sources--
(1,364)
Preferred stock reacquired Capital contributions by parent company 15,000 10,000 Pollution control obligations, net 2,230 1,132 Obligations ~under capitalized leases and other long-term debt 21,398 17,733 Increase in notes payable to banks 42,840 Total external sources 38,628 70,341 Gross Property Additions (includes net allowance for funds used during construction)
$116,225
$110,389 Certain prior year amounts have been reclassified to conform with current year presentation.
The accompanying notes are an integral part of these condensed statements.
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ALABAMA POWER COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS:
(1)
In response to the reversal and remand by the Supreme Court of Alabama of a 1981 retail rate decision and as a result of negotiations, the Alabama Public Service Commission (APSC) on November 12, 1982, issued a consolidated order in ALABAMA's 1981 and 1982 retail rate cases granting an annual revenue increase of approximately $306 million and adopting rates which provide for periodic adjustments based upon ALABAMA's earned return on common equity. The first such adjustment was a two-percent revenue increase effective on February 1,1983. The rates also provide for adjustments to recognize the placing of new generating facilities in service. As part of the proceeoings, ALABAMA agreed not to file for any general retail rate increase prior to January 1,1985. Appeals by certain intervenors from the APSC orders are pending in the Alabama Supreme Court.
(2)
On March 7,1983, ALABAMA filed with the Federal Energy Regulatory Commission (FERC) a wholesale rate request to increase revenues by approximately $6,800,000 annually with a requested effective date of August 1, 1983. On May 5,1983, the FERC suspended the effective date of the new rates, subject to refund, until October 6, 1983.
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i ALABAMA POWER COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations ALABAMA's financial performance continued to improve when comparing the first quarter cf 1983 with the same period of 1982.
Net income after dividends on preferred stock for the first quarter of 1983 was $49,637,000, compared to
$40,644,000 for the first quarter of 1982.
Operating revenues for the first quarter of 1983 increased slightly (1.5%) compared to the same period in 1982. This increase in revenues is attributable to a combination of retail rate increases effective in December,1982 and February,1983 and a small increase in total energy sales. Total kilowatthour sales for the first quarter of 1983 increased by only one-half of one percent over the first quarter of 1982.
This increase was primarily the result of increased sales to nonaffiliated utilities. Territorial sales decreased during the first quarter of 1983 compared to the same period in 1982 principally due to a milder winter, conservation efforts by customers and a sluggish economy.
The additional revenues resulting from the retail rate increases and the recovery of increased fuel and energy costs increased the average revenue per kilowatthour in the first quarter of 1983 to 5.40 cents, compared to 5.36 cents in the first quarter of 1982.
l The increase in operation expenses resulted principally from higher fuel expenses, partially offset by a reduction in purchased and interchanged power expenses. ALABAMA's fuel expenses in the first quarter of 1983 increased over the first quarter of 1982 due to a 16.8-percent increase in fossil and nuclear generation. As a result of this increased generation, ALABAMA became a net seller of purchased and interchanged power in the first quarter of 1983, as opposed to being a net purchaser of such energy in the first quarter of 1982.
The increase in other operation expense is due to escalating costs of labor, material and services.
Maintenance expenses for the first quarter of 1983 declined compared to i
the same quarter of 1982 due to atnormally high costs incurred in restoring service to ALABAMA's customers after a severe ice storm in January,1982.
The increase in income taxes for the first quarter of 1983 compared to the same period of 1982 is due to an increase in income before income taxes.
The allowance for funds used during construction represents the cost of capital charged to utility plant under construction.
This allowance represents the estimated debt and equity costs of capital funds which are necessary to finance the construction of new facilities. A portion of current cash flow results from the allowance of a return on and recovery through depreciation of previously capitalized amounts. The allowance for funds used during construction, net of income taxes, as a percent of net income after dividends on preferred stock was 28.0 percent in the first quarter of 1983 and 26.3 percent in the first quarter of 1982.
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ALABAMA POWER COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations (Continued)
The decrease in net interest charges during the first quarter is due primarily to the decrease in interest on long-term debt (associated with capitalized nuclear fuel leases) and notes payable.
The results of operations discussed above are not necessarily indicative of future earnings.
It is expected that higher operating costs and carrying charges on increased investment in plant, if not offset by proportionate increases in operating revenues (either by periodic rate increases or increases in energy sales), will adversely affect future earnings.
Increases in future sales will be affected by the volume of energy sales to nonaffiliated utilities, 4'
the extent of energy conservation practiced by customers, the elasticity of demand, weather and the rate of economic growth in ALABAMA's service area.
Financial Condition ALABAMA's continuing construction program to build an energy supply network with a sufficient margin of reserve capacity to ensure an adequate, economical power supply, required the expenditure of $116.2 million during the first three months of 1983. As shown on the Condensed Statements of Sources of Funds for Gross Property Additions, the primary sources of funds for construction expenditures are internal sources, the issuance of long-term debt and capital contributions from SOUTHERN.
I ALABAMA's capitalization ratios, composite interest rate and embedded dividend rate at March 31, 1983, remained approximately the same as at December 31, 1982.
At March 31, 1983, ALABAMA had $52.5 million in cash and temporary cash investments and $311.6 million of unused credit arrangements with banks to meet its short-term cash needs. However, $200 million of credit arrangements under the Revolving Credit Agreement was terminated by ALABAMA on April 30, 1983, and is currently being renegotiated. At March 31, 1983, ALAB3.MA had no short-term bank loans outstanding.
i ALABAMA's construction expenditures as of April,1983, are estimated to total approximately $1.9 billion for the three years 1983 through 1985. The construction program is subject to periodic review and revision and construction costs incurred and commercial operation dates may vary from estimates because of several factors including new estimates of increased costs, revised load estimates and the cost of capital.
In addition to the funds required for the construction program, approximately $35.9 million will be required through March 31, 1984, in connection with sinking fund requirements and maturities of first mortgage bonds, pollution-control bonds and preferred stock subject to mandatory redemption.
It is anticipated that the funds required will be derived from sources in form and quantity similar to those used in the past. However, in order to issue additional long-term debt and preferred stock, ALABAMA must comply with certain carnings coverage requirements contained it its mortgage indenture and 8
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ALABAMA POWER COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Financial Condition (Continued) corporate charter. On the basis of the requirements contained in ALABAMA's mortgage indenture and corporate charter, the bond and preferred stock coverages of ALABAMA at March 31, 1983, were 2.86 and 1.62, respectively.
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PART I, Exhibit 1 ARTuun ANDERSEN & CO.
BIRMINGHAM, ALABAMA TO ALABAMA POWER COMPANY:
We have made a review of the condensed balance sheet of ALABAMA POWER COMPANY as of March 31, 1983, and the related condensed statements of income for the three-month and twelve-month periods ended March 31, 1983 and 1982, and condensed statements of sources of funds for gross property additions for the three-month periods ended March 31, 1983 and 1982, in accordance with standards established by the Anerican Institute of Certified Public Accountants.
A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles.
We have previously examined, in accordance with generally accepted auditing standards, the balance sheet and statement of capitalization as of December 31, 1982, and the related statements of income, earnings retained in the business, other paid-in capital and sources of funds for gross property additions for the year then ended.
In our report dated February 11, 1983, we expressed an unqualified opinion on those statements, which are not presented herein.
In our opinion, the information set forth in the accompanying condensed balance sheet as of December 31, 1982, is fairly stated in all material respects in relation to the balance sheet from which it has been derived.
May 5, 1983.
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ALABAMA POWER COMPANY PART II - OTHER INFORMATION Item 1.
Legal Proceedings.
Reference is made to Note (1) to the Condensed Financial Statements herein for information regarding ALABAMA's retail rate matters.
Reference is made to Note (2) to the Condensed Financial Statements herein for information regarding a wholesale rate increase request filed with the FERC.
Item 6.
Exhibits and Reports on Form 8-K.
(a) Not applicable.
(b) There were no Form 8-K's filed during the period.
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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
' ALABAMA POWER COMPANY Date:
May 12, 1983 By /s/ Elmer 8. Harris Elmer B. Harris, Executive Vice President (Principal Financial and Accounting Officer)
Date:
May 12, 1983 And by /s/ E. Ray Perry E. Ray Perry, Assistant Secretary 12
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