ML20072B949
| ML20072B949 | |
| Person / Time | |
|---|---|
| Site: | Oconee, McGuire, 05000000 |
| Issue date: | 02/15/1982 |
| From: | Horn C, Willie Lee DUKE POWER CO. |
| To: | |
| Shared Package | |
| ML15223A867 | List: |
| References | |
| NUDOCS 8303080092 | |
| Download: ML20072B949 (44) | |
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About the Cover Contents Notice of Annual Meeting Pictured on the cover is the McGum 1 Highlights The 1982 mee"ng of hoklers of Duke Nuclear Station, the newest generating 2 W to Sharehokieni Power Company common stock will be plant on the Duke Power system. The ecm- heki at 10 a.m. Friday, Apnl 30,1982, in 4 Year In Review pletion and mmmen:ial operation of the O.1 MiDer Auditorium of the Electnc McGuire Unit 1 in 1981 cuhninated more 11 McGune Nuclear Station Center, S26 South Church Street, than a decade of el-htiewt and deter- Charlotte, N.C. mination by Duke Power. This acheve. The C The Licenang ChaDenge ment is himd in more detail in a feature article begmnmg on page 11. 20 Service Area Map 21 Responsibiht, for Financial Statements 21 Auditors' Opmien 22 Finarnal Statements Statements of Income Statements of Source of Funds for Plant Construction Costs Balance Sheets Statements of Capitahzation and Retamed Eamings 27 Notes to Financial Statements 34 Management's Dmcusson and . Analysis of FinancalCondton and Results of Open4cns 36 Long Term Financmg and i Sale of Assets ' 37 Selected Fmancial Data 42 Submelmnes 43 Board of Duectors 44 Offars A casette recording of selected highhghts from this annual report is available upon requat by wnting Corporate Communica-tions Department, Duke Power Company, P.O. Box 33189, Charlotte, N.C. 28242.
Highlights DUKE POWER COMPANY Pen:ent I Increase j 1981 1980 (Decrease) i Kilowatt-hour saks 53,547,929,000 52,311,276,000 2.4 Electne 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 shares outstmding 87,313,000 81,985,000 6.S , Earnings per share . $ 3.19 $ 3.08 3.6 Dividends per share . $ 2.08 $ 1.95 6.7 Book value per share (year-end) $23J3 $22.82 4.4 Return on average common equity 13.7 % 13.7% - Plant constructon costs S 804,371,000 $ 853,01S,000 (5.7) Total electnc plant, net . $5,998,307,000 $5,904,850,000 1.6 Peak load (Kw)* Summer . 10,602,000 10,364,000 2.3 Winter 10,530,000 9,892,000 6.4
- A new pek of 11,145,000 Kw occurred on January 11,1982.
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To Our Shareholders: "Y "~ 981 was a year of ma-lor achievements for , EEm evi%g c tR [ ~ Duke Power. y? ? &W 4
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of constructicr. Unit i of the McGuire Nuclear Station was completed and placed into com'nercal operatter. It Q, bnngs to tho D$e system gg - the #.eanest safest. m os+ 'I %gh[ 47 * ' economlcal new source of : base lcad aeneratior: avail- 1 D able % b#* bN d~
- Tne sale c: a 75 percent =m " %vp ;g@ &p interest m Umt 1 of tne mi -
Catawba Nuclear Station r was hnahzed, enabhng the N Company to forego long-term hnancinq for the hrst time in mom than 10 years.
- The North Carolina Utihties Commission author.
12ed a signihcant!y higher rate of retum than previously ,l allowed.
- The three-unit Oconee l
Nuclear Station which began operation in 1973. became the first nuclear plant in the nation to e generate 100 bilhon net r kdowatt-hours of electncity. E
- The Company's coal-hred generating system once i again was named the nation's leader in fuel effi-ciency.
The sigmhcance of these ac. , comphshments is not fully reflected in our year-end Cm Han. Ir. dem. WWimn S. I.ee (right) hnancial results. Return on prospects for future earrungs Substantial rate increases common equity was flat at growth, however. enabled recognmng McGuire Unit 1 13.7 percent. Eanungs per the board of directors to as a p-oductive asset orom-sham rose only modestly to raise the tndicated annual ise to enhance both the quah-
$319 from $3 08 in 1980 dividend to $2 2C f rom ty of future eanungs and the Tne higher earninas and the $2 04. level of cash flow Tne ai-
I lowed rate of return on com- 1981 to various gmups of ience. Its completion and mon equity in Nodh Caro- securities analysts andinstitu- commercial operation am a lina,16.5 percent,is a signifi- tionalinvestors, including the tribute to the professional cant improvement over the New York Society of Secun- talents of our dedicated ! l4.I percent previously ty Analysts, the Pubhc Utihty employees. allowed, although still below Securities Club of Chicag The spirit that brought }. the level the Company and the Atlanta Society of McGuim Unit 1 fmm con-beheves necessaryin today's Financial Analysts. We are cept to reality has been economic environment. encouraged by the intemst mnewed and the Company The 13.0 percent allowed in Duke Power exhibited at is poised to take advantage return on common equity these pmsentations. of future opportunities. authorized in our most m- 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 toexplomadditional employees reached or adequate. A request for a unmgulated business oppor- acceded %ets in safetn mom mahstic rate of mtum tunities. The design of a conservation and Imd man-on common equity will be waste facihty foranotherutili- agement, affirmative action filedin SouthCamlinain ear- ty was undedaken as a pilot engineenng and construcI ly 1982. project. tion, generation efficiency Despite cutbacks in the Ourmsourcesfordiversified and rehabihty of service to Company's planned con- activities include engineer- customers. struction program, large ing and construction exper- We thank you for your sup-amounts of additionalcapital tise; Crescent Land & port and encourage yourin-will be required over the Timber Corp., a aidiary terest as we pursue our am-nextdecadeif we am to con- possessing considerable bmous gmis in the future. tinue to provide adequate, natural resources and exten-reliable service to our sive land holdings; and Mill. For the board of dimetors, 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 Hom, Jr. Company's financialintegri- We approach diversification Chairman of the Bmrd and ty or sacrificing the intemsts with caution. We do not ex. Chief Executive Officer of existing shamholders. pect unmgulated activities to To strengthen its financial constitute a significant por- gg% / k stmcture, the Company ex- tion of operations in the changed 3.7 milhon shams foreseeable future. As op. Wilham 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 workingtomaintainourhigh transaction will enable the standards of electnc service. Febmary 15,1982 Company to finance its The completion of Unit 1 of 1982 capital requirements theMcGuimNuclearStation without the public sale of ad is a major accomplishment. ditional common shams. As mflected in a featum arti-We also am maintainmg an cle in this annual mport, the active investor mlations pro- constmction, financing and gram. Senior management heensing of McGuim Unit 1 made formalpresentationsin was often a trying exper-3
i Year In Review dividends paid in the fourth mating the transaction and quarter. The higher quarter- the arrangement of neces-
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Financial Results ly dividend increases the sary financing by the pur-Company's indicated annual chasem. < arnings per share dividend to $2.20 from its If the pending sale is con-rose to $3.19 fmm pmviouslevelof $2.04. summated in mid-1982, the '
$3.08 in 1980. Eamings for Company would mceiveap.
cemmon stock totaled Sale of Assets proximately $250 million. hi
$278.4 million,10.3 pement eddition, PMPAwould make above the $252.5 million he Company com- monthly pmgress payments eamed in 1980. pleted the sale of 75 to finance continued con-Eammgs for the year wem $atawba uc ar Stat n
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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 North Camlina { quarter of 1981, income and South Carolina rural Financing ; from investing the pmceeds electric cooperative custom-
..u from the sale of a portion of em in Febmary 1981. he Febmary 1981 the Catawba Nuclear Sta- sale of a portion of tion, gmater allowance for Proceeds received at the theCatawba Nuclear Station funds used during constme- time of closing totaled $521 enabled the Company to tion and a 2.4 percent in- million. In addition, the pur- fund its entire 1981 con-crease in kilowatt-hour sales. chasers make monthly pro- struction program without gress payments to finance any external long-term fi-These factom wem offset toa the continued constmetion of nancmg.
large extent by highfueland their portions of this purchased power costs in 1,145,000-kilowatt generat. The issuance of 1.9 milhon the fourth quarter due ing unit, scheduled for com. shares of common stock primarily to an extended mercial operation in 1984. thmugh the Stock Pumhase-outage of Unit 1 of the Duke will operate the facility Savings Program for Oconee Nuclear Station and and will retain ownership of Employees, the Employees' Stock Ownership Plan, and the unanticipated additional the mmaming 25 pement of time requimd to bring Unit 1 Catawba Unit 1' the Dividend Reinvestment of the McGuim Nuclear Sta- and Stock Purchase Plan tion into full-power produc- A group of North Camlina pmvided $36 million. , tion. The higher fuel costs municipalities purchased 75 TheCompanygenerated94 { are expected to be mflected pementof Catawba Unit 2in percent of its 1981 capital in fuel cort adjustment pro- 1978. The sale of the re- , requrements from intemal cedures in 1982. maining 25 pement of this sources. Without proceeds unit to the Piedmont Munici- from the Catawba sale, The Company's 1981 eam-pal Power Agency (PMPA)' however, thelevelofintemal ings provided cent return a 13.7 per- representing a group of M ade b captal e on common Duke s South Carch,na equity, unchanged from maicipal customem, could quirements would have 1980. been wellbelow SO pement, takeplace by mid-l982.Tne thelevelmanagement feelsis The quarterly cash dividend sale is contingent, however, pm ent. on common stock was raised upon a favorable ruling by to SS cents per share fromits the Supmme Court of South To strengthen the capital previous level of 51 cents Carolina on the constitu- stmeture without the dilutive per share, effective with tionalityof thelegislatonper- effect of selling new shams of 4
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1-negotiations. Duke completed the
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g sale of 75 percent of Unit 1 of the
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j common stock at prices cludmg the effects of the ex- 16.5 percen+ Ieturn on < :m-l below tne1rt aook va:ue the Hrange transacton mon egre Comparq issued 3 7 m1 Bon Eaminas coveraae et axed The Cempar s naa re-srams 7 /3 5 milhon market charges by the S C method ques +ed a 1o " percent er i v ke et new common stock was , w. o aJnes .1 o_ g.1 am rz1 maar m . m rate marease
+or ar equiva!ent market imp. /enien' over the 2 65 and an ancwea rate cf return value et severai series of times coverage achieved in cr comiror ecr<11+v of 17 5 outstancimg tirst mortgage 198C Management's iong- percen* ,,9 , y bends on January A 198z range objectve is to ach: eve , -
These bonds had a tace and mamtam a f1xad charaes ^ f" ' """ *# ""
- amou"~ of $ 110 9 mtlitor was impiemented subject to coverage ratto ci at leas +' t refund m N, orth Carchra on 3 no times.
an extraordinary aam of October 18 The remaming 348 3 milhon w t h1 be perion at the proposed m-regized m 1982 through Rate Increases crease was implemented. the exchange The im-proved capital stmeture will ates wem raised m subject to refund on Decem- l oer 1 Appropnate refunds mduce the fmancla! nsk of al2 i 1 so8,1 to reaect r m l are being credited to Duke Power secuntes and creased operatag costs. the , shoula, make new capital commercial operation of customers reflectmg tne Unit 1, c;. the Mc. Guire rates aranted by the NCUC. mom readdy avadab,e t at a lower cost than it otherwise Nuclear Station and a A 13 0 percent retad rate in-would be It will also tend to hiaher a!! owed rate et return 'rease was approved by mitaate the neaatve effect on common evty The P&he Semce Commis-of high intemst rates on t1xed A 14 99 percen+ retal: rate s n ! Sou+m Carolma (PSC charaes coverage merease was approtea by " Id""d' 2 N2 h . IC As et Decemt,er 31 1981 the Nem Carcina Utataes # "d" i "i" lenerate M ' %' " '1r' - the LOmpdny had strength-L cmmissic" $.,1 UL 1~ N ened its capitallrator. tc 48 Des 'enier 17 i + : This = I "D A* L N31 i revenues v.a anews v r a rease is des' :ne i p ercent ena-term aert la e- ' , i p p' r. gr+g' r v. perx'eni preIPrrea and .It*I1eraIe . . N I M.' t *~ ' pre ere!1[e sIoIKs, dE $ eM 'II" ' {CI3"" " Pre! It* pert'ent mmmon t3 r 1;N "X - i!' a. . .t!T 1 .i..
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quested a 23.5 percent in- inemased 9 pement on Oc- Residential customers ac-cmase 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 electnc allowed 17.5 percent return subject to refund. These sales in 1981, general ser- < on common equity. wholesale rate incmases am vice and commercial cus-To bring South Carolina designed to generate $46.9 tomers 18 percent, non-
- rates to levels in effect in milhon ammally. For several textile industrial customers l North Carolina, the Com- years, Duke and its whole- 20 percent and textile pany implemented a 4 per- sale electric customers have customers 19 percent. j centinterimincrease, subject greed to maintain parity Wholesale and ot,ner energy to refund, on January 28, between wholesale and sales accounted for the m-1981. An additional 9 per- North Carolina retail in- manng 17 percent.
dustrial rates. Negotiation cent interim increase was Continued economic growth placed into effect on Oc- are under way regarding and development through-tober 18 and the mmaining maintanng h parW com out the Piedmont Carchnas portion of this request on cept. msulted in a 1.7 percent 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 onder mpmsents only representing a modest 2.4 55 percent of the requested pementinemase over 1980. amount, the Company in. Generation and tends to file a new rate case Despite a 1.8 pement in- Capacity unii i os th. xcc ir. naci*=r in South Carolina early in crease in the Company's
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i E*'iEiE 1982. residential customer base, he Company con-87 r= *=d McG= '* U=2' " had residentialsales rose by only tinued to mly on a fuelmix of co.iribui.a o.orir soo mmio= Rates to the Company,s kilowatt. hours to Duk.'s produc- 0.7 percent over 1980 due coaland nuclear for the bulk
,io wholesale customers were to mild seasonalweather and of its generation in 1981.
energy conservation efforts.
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?.'.'. [.,.." nuclear units 25 percent and g#<. -(M general wrvice customers
>n, hydroelectric facilities 1 per-4 incmased 3.6 percent.
4 $"4 4
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Sales to non-textile industnal of oil or natural gas wem E, c. _g .l.. customers accounted for the used. .
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most significant gain, climb- l y
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g ' ^ ing 6.7 percent over 1980, Unit 1 of the Oconee Nucle-p " '1 '
. and for t'.e first time exceed. ar Station was out of service 2-3i - - .
,- ed total sales to the textilein_
. - ' ~ ,f.. f i c ~ ^L dustry. Sales to textile ing a scheduled outage for f r six months of 1981. Dur-4[: .k Ny.[,
. .7, customers declined 0.5 per- refueling and required
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l 8 i the redesign and replace- A new summer peak was set [ l ment of the bolting system on August S,1981, when L ; , i extended the outage six customer demand mached L t ' l ( weeks, with the unit mtum- 10,602,000 kilowatts, 2.3 [: ing to service in December. percent above the pmvious f Umt 1 of the McGuire Nu. smne peakof 10,364,000 [ f clear Station generated its kilowans on July 16,1980. p , i first kilowatt-hours of elec- A new winter peak was l tricity on September 12 and established on January 12, o by year-end had contributed 1981, when customer de- l' nearly 500 million kilowatt- mand reached 10,S30,000 hours to the Company's pro- kilowatts,6.4 percent above l duction. The unitis expected the previous winter peak of to contnbute mom than four 9,892,000 kilowatts on billion kilowatt-hours of elec- February 5,1980. - tricity during 1982, incmas- (A new system peak of ing the level of nuclear 11,145,000 kilowatts was generation to about 30 per- set on January 11, 1982.) cent of total generating out-i put. The 1,180,000-kilowatt "I'"U McGuire unit is temporarily operating at less than full he Company's j i capacity cince the Company dem gemW system again led the nahon Marshani Steam Statio= leamed that vibrations had placehonorsforbothoverall The in fuelefficiency in 1980, aC. fabwe) m the mat eMont been experienced b r units of and fossil-system perfor- o=>e pia ii= insi.a ooke piani ! similar design. Th'e Com- cording to ElectricLightond mance, Duke generating did",73,"tt *
*,7fi3 pany is evaluating this prob. * *^9 Z** units captumd six of the top
{ j lem and it is expected to be In its annual nationwide sevenspotsin the magazine's i t msolved by mid-1982. survey of power plant per- unit-by-unit rankmgs of fossil ! As of December 31,1981' rmance, the magazine units. Unit 2 of the Belews i ranked Duke Power,s com- Creek Steam Station was f ! the Company,s generat-bined nuclear and fossil named the most efficient generating system firstin effi- single generating unit in the 13 234 wat n c sisting of 7,423,000 kilo-ien y. In addition, the nation in 1980. , Companys M generahng Based on data from the watts in coal-burnmg sydem was namd 6e most 3,760,000 kilowatts it units; Nuclear Regulatory Com-efficient in the nahon. nuclear units, 1,452,000 mission, Oconee Unit I was kilowatts in hydroelectric The magazine's survey was the most efficient pressurized , facilities and S99,000 based on 1980 heat rates, water reactor in the United : kilowatts in combustion tur. the latest year for which in- States in 1980. j bine units. dustry operating statistics am t available A generating Plant Additions and Peak Demand system's heat rate is deter-Construction mined by the number of p, Peak demand for British Thermal Units re-electncity mached quired to generate a net mcordlevelsduringboththe kilowatt-hour of electricity. fier more than 10 years underconstmetion, < summer and winter of 1981. In addition to claiming first Unit 1 of the McGuire l 7 , l
"~2T ie, 13s Nuclear Station near as of December 31,1981, Current demand forecasts Charlotte, N.C. was with commercial operation indicate the reduction of awarded a full-power scheduled for 1984. Work work on the Chemkee plant operating license by the on Catawba Unit 2 was likelywillmsultininadequate <
Nuclear Regulatory Com- about 39 pement complete, reserve mangins and serious mission on July 8 and was with commercial operation capacity shortages in the placed into commemial ser- scheduled for 1985. 1990s. vice on December 1,1981. w.o c- r- Construction on the The Company is beginning m igg
- McGuire Unit 1 is the first Cherokee Nuclear Station pmliminary work onthe Bad new generating unit to be near Gaffney, S.C. has been CmekHydroelectric Station, added to Duke's system substantially reduced as a a four-unit, 1,000,000-kilo-since 1975.
msult of the board of dime- watt pumped storage facility Work on McGuire Unit 2 tors' decision on Febmary to be located above Lake
#mu was about 96 pement com- 24, 1981, to indefinitely Jocasseein Oconee County, plete as of December 31, delay completion due to dif- S.C. All mquimd state and !
1981. Commercial opera- ficulties in attracting capital federal permits and licenses l tion of this 1,180,000- on reasonable terms. No for this generating facility l r:-2 kilowatt unit is scheduled for new completion dates have have been obtained. Site l
%L 1983. been established for the two pmparation werk was initiat-
"'A Construction continues t Chemkw units, which had ed in July 1981. Constmc-gg been scheduled for comple- tion will continue, however, y move forward on the
- tion in the early 1990s. only to the extent that the r -.di.i i .ca... ..- Work on Cherokee Unit 1 is Companyis able to raise suf-
" R ' S C' on Catawba Unit I was continuing at a substantially ficient capital on masonable dhaid U*r'T.i=.I.T*=.I poor. Divid..a a i im.
about 89 percent complete mduced level, and work on terms. No timetablehas been "*d8'***'"*'"""""**">. Chemkee Unit 2 mmains in- established for completion of termpted. As of December the Bad Cmek project.
~ ZM: 31, 1981, Cherokee was 4 about 17 percent complete. Plant construction and
~a nuclear fuel costs totaled Resumption of normal work $804 million in 1981, com-
-,h ?h tj, levels on the Cherok plant pamd with $853 million in depends upon several fac- 1980.
j M, < tors.Theseinclude theability i ik ' 2 to achieve sufficient rates of (The management of Duke (% mtum to enable the Com- Power intends to recom-
# pany to attract new capital mend to the board of direc-9A_ ' on reasonable terms; a mom tors at its February board g
4 M' @hy a d,t - stable economic environ- meeting the withdrawal of h? i n ment permitting regular the Company's application sales of securities with for a construction permit for h' [ # maturities that match the the proposed Perkins Nucle- , h(1 lives of the Company's ar Station. If the mcommen- ! assets; more realistic and dation is approved, the consistent nuclear power Company intends to request e regulation to provide a permission in each of its pradictable schedule for regulatory jurisdictions to Q[" ' j'. . ( coistruction and operation; mcover costs mlated to the V and a mom moderate rate of proposed facility. The Com-x inflation. pany hasincurred no materi-8
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delay. the Company was e s=. .r.-., . , . ;. . n e, ,
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l misson on Auaust 17 1981, I T " . ;. " E M. -( ti store 300 spent fuel ;1 M.% ' ~ M F.. -
+ r ,,
~'
~ I.z.#E? ~.i".. /41f.1. - ., ,.q ,j ~'?. E. , . E.?: .d'* ; :i assembiles from the Oconee -
p Nuclear Station at the !-W6 D,tr. M~- *7 m 5
~ .-
McGuire Nuclear Staton- N w - '.+.<. ~ .h .,c A f . 3 # S.) n 1- 1 e . c,1
.-m ys .g. . .
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Shipment of the assembbes l l to the McGuire plant for Dunng the fourth quarter of Each ...e m b l y storage has beaun and will Dividend .p.nt
.hlPP d to th. McGuir. Nucl.or fu.1 Reinvestment 1981, 23,065 sharehola,ers sionoo n- .e-o.. i. pock...a io occur over a ,11ve-year penod. extending the useful hfe of existmg starage L egislationp rticipated enacted representing about 18.4 m the plan . .p.cioiir a i . ,,..i . a i.oa co ,,i ., ..,,,,,, 3o.ooo Pound. (aboM in complionc.
-ith .erios.=> e.a.roi .oi.er r .
by Congress as part of the percent of the total ehgtble
, uion. .
tacites at tne Oconee plant 4 Economic Recovery Tax shamholders. By enrolhng m througn 1989. Act of 1981 is expected to the plan, shareholders am l The Company proposed the bolster participation in the able to have their dividends shipment and storage plan m Company's Dividend Rein- automatcally remvested m l 1978 m anticipation of a vestment and Stock Pur. adcttional shares of common l potential shodage of storage chase Plan m 1982 Under stock and make optional l capacity at the Oconee plant this legislaton, taxes on as cash p=.yments of up to followmg former President much as $1.500 of diva $3,000 per quader toward Carter's 1977 decision to dends reinvested will not the purchase of additonal ban commercu! reprocess become payable in most common stock without pay-ing of spent fuel cases until shams purchased ment of commissions-l through the plan am sold. If the shams are held for mom Mom than $45 mt! hon has Employees than one year, the mcome m nvested m ccmmon ( , T ploveo. 20.077 pm-he Company em. will ne taxed as long-term stock through the plan smce capital aam nioough its meept:on m 1973 m-c uding $ 10 mis, on m 1981 p!e as of ' December 31 scheduled te expre m 10.85. 1981 ompared w:th dus tax deterrs provision Inquir:es renc:ernmg the i 19.612 mople on Decem- kes partic:pation , tne plan and how :t works should ber 31 1980 About 7 950 umpany s proaram a mom be directed tc the Investor aMra"tve mves+mert opten '
,f them eng Lyees wem m- Reia+1ons Departmen* Duke volvea pr:marA m the P wr Corrpany. P u Box desian and Trm m
- Parnat r. m the pnnram ;,!89 Rar!c"e No generatna ta m cntnma s arow - 91 2824z J
designed to improve prof- stmction, employees at the Power's 20,000 em- itabihty while safely mnder- Catawba Nuclear Station in early 1981. Duke ployees were chal- ing mhable service. lenged to impmve on
- In efficiency, the Duke pleted mom work units than and at McGuire Unit 2 com-their past performance , the estabhshed goal. (Work system heat rate was turther units am a measum of pro-through Program. a Corporate In nine of 11 Goals Improved from its award- duction used in Duke,s con-winning 1980 level.
categones, Duke people ex- stmetion program.) ceeded the estabhshed goals
- In plant design and con-
- In safety, disabbng in-
"' lunes were reduced 60 per-
~
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'. ~ C. ' ~ ' ' N. 2 ~~ 'F i
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' ' .' .j ; f , ; ' ; < 4- N, ' '. - cent from the average over po..rou,og..byisp.rc.oi.
h $ w ~. J. '-k ^h) . y ' [.5,' i9 B ';2 - ._ the past hve years, vehicle '
.2 py .g- .~.0,. . , y . ';c ; accidents and injunes requir- "
.. f * ;; ;i : *J. 5;
[Q. /' f, ,. , Y , j.' .L. ' .. . Q[ *;% =. . f;{ .6 * ' were ing medical attention substantially reduced also
. [;.I .. .',(~ [ is , . .; < N.' Jh.h. from past levels
* ~
- f. . . , . . . . . . , . . . .- s- *
- s s. r
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. ; ; ; ..;3 . ., 1
; ,. .
- In service rehab1hty,
.. r < .".$ . . m - ,
a,
. = 4
;. . c,
< : power outages were held +o
.' - ,-; '(' . . ; , ,. . , l ~ " ' : .
* .. a total of 59 minutes oer
, y[ ? A , ..[ y.[. 1. ()l[' E . ;. ..; 1 i. ' . customer from an average of ,
,g s u.- .. . . j .
,, y , Q '. f 68 minutes per custorner
.Jh , ,. - ]. ; 7', .- ; j . b . . ~ ' )) ,j ' y .'i r - : '
.' over the past three years.
. y;.- ,. .. ... .~ :1, -
- In load management, the 47; 4 ' -.w{ 'f l - } [ goal
;s was achieved tor
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restraining growth in both N
,
- 4. , ~f .. .; ;'). ++ summer and winter peak de-i~ .$ 5 N ,. 'y.E , -
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1 Achievement of these goals
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.3 . c 5. # . .d. . , . @ Company with an additional s ~% 1. gdf :d, .7 i' t, if .5 K.. , ' .. :. .J i. ; 50 percent contnbution to f .n 4",fayat3 ;[,.-l j ,p ; ,
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the Employee Stock-Pur-
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- ' chase Savings Program.
u , . , Some new goals already f2 -2r ,: }; have been set for 1982. In-y . i / ;3. . Ol .g. :p> y. 'O!@.: 8s g@p{+,~ .. ,3 1.c , .; cluded in 1982's package [ *"' 3. 4. .'j ; ,' . am specific goals related to e .: gy,,-yaum,,, } % 1. safety, service mbabihty, af-
=
J A e~ '.[{}i;1.." ., ; - firmative action, load
- t. ;[ . U % <5m. .- 1 5- management, plant design S ap 5 .f(f. .
7 . . . . - g . Ii and construction, nuclear
- m. - - g . J- '. .g .K . Q ; '. L L production, generatng eff1-he . 44 ;- % e J.y {.% 9 7', clency and profitabihty.
p f. . R. . - 1~ . .- .. d h mm N .. g .j . m : d.I in another example of Duke
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981 was marked for ed heights: regulatory and nuclear fac1hties mto opera-fl'i u Duke Power by the hcensing heanngs bogged tion in the United States to-commercial operation down in tangential issues. day often exceeds 12 years u? ofi the hrst umt of the and criteria for safety with an average cost of more McGuire huclear Station. In systems changed virtually than $1.500 per kilowatt. future years, McGuire Urut 1 overrught, partcularly m the Many of the pmblems that will contnbute billions of emotionally charged at- were encountered and over-kilowatt-hours of electncity mosphere that arose fob,ow- 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 ioday throughout the Piedmont Despite these obstacles, the and promise to continue in Carolinas. McGuire urut was brought years to come. In meetmg McGuire represents the on hne in less time - about these future challenges, culmination of more than a 10 years - and at a lower Duke Power will be guided decade of perseverance, cost - approximately $830 by the same pnnciples of adaptation and innovation 1n per installed kilowatt of dedication, imagination and overcoming the severe capacity - than other com- cooperation that took problems the utility industry parable units. The an- McGuire from design to faced in the 1970s. Capital ticipated time span reality. costs reached unprecedent- necessary to bring new
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l l l Tine Eingisseerisig power plants with its own sequence of construction Cisallesage forces, Duke Power has pmgmss created a unique working McGuim Unit I was nearly k oving the environment. This made it 80 pement complete when McGuire Nu. possible to capitalize on the Thme Mile Island acci-clear 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. shared technical expedise. numerous modifications to producing complex capable Meeting the existing hardware, 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 were developed and incor-by Duke Power's engineer- and revisions wereissued for porated without disrupting ing, construction and nuclear facilities between essential systems and equip-operating forces. 1969 and 1978. This up- ment already 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 foxes, 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 nearly 1G,000 compact plants in the United States. all of these modifications cars. The elaborate network Changes in seismic regula. within only 18 months. of interconnecting pipes and tions, for example, mqui ed valves that weaves thmugh review of the design and in-Achi vin the plant could provide stallation of more than theb1 g plumbing to more than 30,000 piping suppods and t 2:46 a.m. on 2,100 homes. And the multi- hangers for McGuire Unit 1. M nday, September 12, ple monitonng and stateof To minimtze the impact of 1981, the first kilowatt-hours by 6 changing criteria onboth the of electricity fmm McGuire k c mpletion and total cost of Unit 1 were transmitted to miles of cable ~ 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 T4 McGuire Unit 1 is in
> sophistication of McGuire side with field constmetion commemial operation, sup-represented an ambitious forces to develop workable plying needed electricity to engineering and construc- solutions to difficult and com-meet the growing energy
( tion challenge. The project plex problems. Sophisticat- demands of the Piedmont was made even mom for- ed computer systems wem Minas' midable by a staggering installed at the site to provide level of exacting regulations immediate access to design 9 yag;
, a=fg,Mg,=f, and a host of mandated data. uphisticated electrical equip-design and construction Additional manpower and modifications both before scheduling teams were h $ "*"'""d dl8Pl aY Panels (left).
and after the Three Mile ssigned to the project to , M ded assure that required As the only investor-owned modifications were incor- *d* electric utility in the nation porated with minimal delay 7 . that designs and bui'ds and to maintain an orderly 13
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1 i l ! i 1 ! 4 The Fl====ad=1 quate revenues to under-
- A comprehensive load l Chauenge mine earnings and fixed management program was
- charges coverage. In 1973, implemented to restrain
, he McGuim Nuch the Company's first mort- growth in peak demand as ( ar Station repre- gage bonds were down- an altemative toconstmeting ;
- sents an investment rated from double-A to new generating facilities.
l of $1,800,000,000 single-A and the market
- the equivalent of spend- priceofits commonstockfell The Company also sought l ing $500,000 every day for to aslowas $10 per sham- improved earnings through almost 10 yeam. about 60 percent of book m m efficient operations, value' m re aggressive rate ap-
- Raising this enormoussum of plications, more timely I capital in an economic en- To restore the Company's mcovery of rising fuel costs vironment plagued by anancial strength, a long- through standardized fuel spiraling regulatory costs, range financial plan was cost adjustment procedures, unprecedented interest adopted to strengthen its and the inclusion of con-rates, recond inflation andin- capitalshcture,incmasein- stmetion work in progress in adequate rates severely temal cash generation, and rate base.
I threatened Duke Power's improve the level of fixed l financial integrity in the charges coverage. Both in-1970s. termediate and long-term ggg l the M To ovemome these adveme step wem taken: financial forces and com.
- Construction budgets brough these ef-i plete McGuire, manage. were cut back by defernn9 forts, Duke Power not only
, ment took steps to scheduled operation of new successfully financed l strengthen th, Company's faciliiles, including a two- McGuire but also mgained ! capital structure, reduce year postponement of much ofits fmancalstmngth. both operating and capital McGuim. Management is committed l costs, restrain growth in
- Negotiationswemopened to building even greater l 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-l and rate incmases tion to groups of the Com- dations which have been As a msult, the Company is pany's wholesale customem. laid.
far stronger today. The fi- ag g o a . i. ..i. , .4...ii...i nancial goals that were 3 4 M.""d '),'** . '""**f4'M'. i. l brought into focus during giaer=,g g g jig; Construction of McGuim m- .
. a. co-n r. to.a x ..-
main an integral part of the "*"'*'""- Company's financial plan- ) l t1 _ - ~
~
. l Chcr11enge M Y IMeeting n the early 1970s, the L
- I rapid incmases in operatmg costs and intemst rates, new environmental requirements y
and escalating constmetion 1% j costs combined with inade- . D.. 15
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i l i i' I i Tine I.icenshag hcensed and put into opera- the United States Supmme l Cisallenge tion within seven yeam. Court. l When plans for McGuire Regulatory authorities also L btaining the were made publicin the ear- ultimately ruled in Duke's I necessary gov- ly 1970s, however, several favor on allissues. But short-I emment heenses msidents near the Lake Nor- ly befom the final operating i to build and op- man site voiced concerns heense for McGuire Unit 1 l erate the McGuire Nuclear about the environmentalim- was issued, the Three Mile i Station requued mom than pact of the plant. The Com- Island accident occurred, i 10,000 houm of legal work pany's initial response was resalting in a 17-month i and the preparation of mom one of developing dialogue, moratorium on the issuance I than 50 tons of documents. recognizing that the of all new nuclear plant Thmughout thelengthy pm. 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 mmained the Goal activists to block both con- unconvinced, organizedinto stmetion and operation of a formal association and n July 8,1981, i the plant; indecisiveness on used every available legal McGuire Unit I was finally l the part of regulatory maneuver over the ensuing granted a full-power operat- l authorities; and a 17-month 10 years in an attempt to ing heense. freeze on the issuance of all new nuclear plant licenses block construction and, The experience that was later, operahon of McGuire. l msultng from theThree Mile gained in dealmg with op- i Ishnd accident. To counter the claims of op- position and in meeting the ponents and expedite extensive demands of ( Despite these difficulties, regulatory action on regulatory authorities will McGuire Unit I became the McGuire, Duke prepared prove invaluable in obtain-fint contested nuclear facihty and submitted voluminous ing heenses for future power in the nation to be granted a reports detaihng the various plants. full-power operating bcense design features of the plant. r ..., ,s a....a. . ,,,,i . , by the Nuclear Regulatory This material was sup- '-r ==ih-ni =. oda pr par d l Commission following the plemented with extensive "
"".*.'."%aTff.." ."i .s.'jfi !
Thrm Mile Island accident. environmentalmports on the ";i"l4,7,*,",d . , h";,",*g,'""': (- l existing geological, meteo- ro== dins =rea-f Meeting the ml gical, biological and Challenge aqu tic conditions of the l McGuire site. Independent uke Power had scienusts confirmed Duke's , never faced formal, orga- findings, as did regulatory nized opposition to the con- staH meam. ! struction of a power plant Opponents also filed federal prior to McGuire. Indeed, hwsuits chalbng:ng the con-no objections were raised stitutionality of congres- i when phns for the Oconee sionally established hmits on - l Nuclear Station were an- habihty chims resultng from t nounced in 1966. Constmc- a nuclear accident. After . L l tion permits wem issued for four yeam of c.*;nded pm- - 1 Oconee in less than a year, cmdtngs, the lawsuits wem and the plant was built, decided in Duke's favor by 17 . i
he McGuue Nucle- visor and a te hnica) advisor plant moved toward com-r at Staton is staffed are e duty at a!! tunes to pietion these nuHear by more than 500 monitor the plants mu!tple. speciahsts worked closely highly trained pro- radundant safen systems. with constmeton forr:es and ressionals to assure safe desian engineers te coor-rehable and ethcient opera Duke Power recruits and dinate hnal design enhance-trams its own nuclear power ments and develop OWrat-ton in years to come operators and techrucians t mg procedums When con-Ine men and women who maintair. onsistently high struction was complete ? work at the plant have jevels of comptence tn all they pedormed the delicate underyone years of intensive are traming specifically for task of loading the urut with McGuire in such spmahzed Much of the trainina is con. mom than 2Or$X) pounds helds as health physics. ducted at the McGuire at nuclear fuel and con-chemistry and power plant Techmcal Training Center ducuxi extensive equipment Operations. This advanced racihty is and safety system tests, equipped with chemistry ultimately bnngtng the plant Each control room operator' and health physics laborato. into operataan. for example, is given mom nes as well as a special4y i than 3,000 hours of ex-designed control room simu- Additonal tratrung of these haustve classroom and in- lator to give prospective professionals contnues on a plant trairung and must suc- operators hrst-hand' prac- regular basis throughout cessfully pass a ngorous tical expenence in plant pro- their careers This assures senes of wntten and oral cedums and operations. that employees mtar a state-tests. At least two beensed of-the-art knowledge as long operators, a heensed super- As construction work on the as they work at McGuire. Duke conducts its own training 7 ' '-.'o1 t, p ._,
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l hen Duke to an actual Ic4d of 8,000 tlan anticipated and is ex-Power em- kilowatts. IBM will save an pected to grow in 1982. barked onits estimated $420,000initsan- Established programs use
- Load Man- nual power bill and mdu rate incentives to encourage :
agement Program in the the buildings annual enem customem to upgrade thein-mid-1970s, the initial goal consumption by mom than sulation of their homes, to i was to reduce projected 14 million kilowatt-houm. shift many daily activities peak demand 1,300,000 Theseeffodseamed theIBM from on-peak to off-peak wab W N facihty a citation from the hours,and toallow theCom-The goal today has been ex- Southeastern Electric Ex. pany to intermpt service to panded to mduce projected change as themost outstand. electa water heatem and winter peak demand mom ing example of enengy effi. central air conditionem dur-than 6,000,000 kilowatts by ciencyin theindustnalsector ing emengency pedods. 1996. in 1981. These activities continue to The Company is seeking Duke also introduced the be expanded. In 1982, for thrcugh its load manage- most ambitious element of its example, msidentialcustom-ment activities to ehminate residentialImd management em in Nodh Carolina w.il be the need for six additional program in 1981: the ffered help in financing , generating units, avoiding Residential Conservation energy-efficiency improve-more than $10 bilhonin new service.This program offem ments with a program to 6 plant investment- the Company's 1.1 million s rb a podim of the intemst n pnvately arranged loans. Mom than 40 different pro. residential customers per-grams for residential, com. smahzed and comprehen- The mmpmhensive effort is mercial and industrial sive ergy analyses of their on schedule with c.n ac-customers have been homes to help find ways to cumulated mduction in pro-developed and am being ac-mduce em consumption jected peak imd of more tively promoted to achieve and lower power bills. Intial than 1,000,000 kilowatts at the 1996 gm!s. Oneleading msp nse has been gmater the end of 1981. New York secunties fum has labeled Duke'sImd manage-ment efforts the "most ag-M 7 '
] '
1",k',"L",.7"O**O""d duced the estimated annual ener-gmssive" in the nation. ..
;~ .7.*,","'.""".l a",U.'.T %.%
turi =s pi . o.M i. Chartone, Theextentof theCompany's n c br i* =i225aa ki2a*=i$-ha=r=.
- successin Imd management was exemphfied in 1981 by its work withIBM in minindz-ing the enengy consumption $ u of its recently completed V l
[ l one-million-square-foot , l o ! manufacturing plant for ! ,
'I bank computer equipment ~
g 71 in Charlotte, N.C. :: fBh ff ' Duke's techmcal speciahsts, 7 L working closely with IBM's , , , , , , , , , , e-management, helped re " "" s ( duce the electnc demand of r the facility from an initial estimate of 14,000 kilowatts f'( gaa gN Gus - m
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=
19 1 d
gggpQgMY Dunng the 12 months endai De mber 31,1981, Duke's elec-tne mvenum were $1.9 bdhon, of whrh approxrnately 70 per- < Duke Power Company is an invmtor ownal electric uthty serv- cent was denved from sales in Nerth Camhna and 30 percent ing approxtrnately 1.3 mdhon customers in North Carchna and from sales in South Ce.mhna. South Carchna. The Company's servre ama encompames about 20,000 apare mdes through the Podmont sechons of the tw Duke Powe has hve achve subadanes - Cmscent Land & 5 Timber Corp. (land management); Mdl-Power Supply Company states. Retad customers am served locally through 96 dstnct and (wholesale dstnbutor of electncal equipment and purchamng branch effxxs. agent for Duke); Eastover Land Company (coal property in addton to solhng electncity dtMy to its own mtail customem, management); East aer Mining Company (coal mining); and the Company sells bulk electnch e SS major wholesale Western Fuel, tc. (exploration and development of uranium om customers, pnmanly mundcipal electric systems and mral electnc deposts). cooperative systems. Duke Power Service Area vmm _ marrssr1 NORDiCAROLIN A tIORD{ CAROlf4A 1k DCTRICT OFHCE A S7AM STATION e HYDROElICTRIC S!ADON O HYDFCE11CGIC SMIlON UNDER CONSTRUCDON 5 NUC11AR STATION' LJ NIX 11AR STADON UNI ER CON 5mVCDON YdINb$E.-- sot.mi CAROlfJA
, I GEORGIA
\
20 l 1
Responsibility for Financial Statements b financial statements of Duke Power Company were prepared countng controls are contnuaDy reviewed for effeebvenes and by management which is >=puidvle for their integnty and objec- are augmented by wntten pohcies, standards and procedura, ) tivdy. 'lhe statements have been prepared in confonnity with and a strong program of intemal audd. generaDy amepted accounbng principle appropriate in the cir-cumstarxxs to reflect in al meterial respects the substance of h board of directors pursues its oversight role for the financial i events and transachons that hsld be included and the other in- statements through the audd committee, composed solely of fonnabon in the annual repon is mrisistent wdh those statements. directors who are not officers or employem of the Company. h In prepanng the financial statements, management make in- audd cornmttee meets with management and intemal auddors formed judgements and eshmates of the expected effects of penodically to review the work of each and to monitor the events and transachons that are currently being reported. discharge by each of their respornbihbes. b audd committee also meets perk-da ally wdh the Company's independent auditors, "Ihe Company's system of intemal ancounting control is dmgned Deloitte Haskins & Sells, who have free acoms to the audd com-to provide rmsonable assuranm that assets are safeguarded and mittee or the board, without management present, to dwass in-transacbons are executed in accordance with management's temal accounting control, audding and financial reporting mat-authorizaban and recorded properly to permd the preparation of ters. financial statements in accordance wdh gaiera!!y accepted ac-counting pnnerpis. The Company's accounting controls provide resonable assuran that errors or irregulanbes that could be matenal to the financial statements are prevented or would be g" '. detected by employem within a timely penod in the normal Porter A. Hauser coume of performing their assgned kncbons. b Company's ac- Vi President & Controller Auditors' Opinion Duke Power Company: We have exammed the balance sheets and the statements of of its funds for plant construction msts for each of the three years capitalcabon of Duke Power Company as of DecemLer 31,1981 in the penod ended De mber 31,1981, in confonr.ity with and 1980 and the related statements of income, retained eam- generally accep'ed accountng pnnciplm applied on a consistent ings, and sourm of funds for plant mnstruction costs for each of basis. the three years in the penod ended De mber 31,1981. Our examinahons woe made in aamrdance with generally acaptai audding standarus and, accordingly, included such tests of the klO N MWS + kN accounting remrds and such other auditir:q procedures as we Deloitte Haskins & Sells wrmdered necessary in the circumstances Certfied Pubhc Amountans in our opinion, the above menboned financial statements present fairly the financial position of the Company at December 31, Charlotte, North Carohna i 1981 and 1980 and the results of its operabons and the source February 15,1982 21 1
Statements of Income DUKE POWEB COMPANY Year Ended December 31 (daus e enanta 1981 1980 1979 Ellowatt-Hour Sales (thousands) 53,547,929 S2,311,276 50,323,17S Electric Revenues (Notes 1 and 2) . $1,908,454 $1,682,822 $1,492,557 4 Electric Expenses Operation 4, Fuelusedin electnc generation. 790,967 680,693 589,402 Net interchange arxi purchased power (cmdd) . 25,068 (12,908) (17,254) Wages, benefits and matenals. 264,488 211,014 180,338 Maintenance of phnt facihties 131,670 114,597 94,598 Depmcaton and amortization (Note 1) . 142,899 131,441 125,437 Generaltaxes 139,140 124,422 112,655 Income taxm(Notes 1 and 7) 137,872 153,463 153,504 1,632,104 { Totalelectnc expenses 1,402.722 _1 238,680 Electnc operatingincome 276,350 280,100 253,877 Other Income (Notes 1,7 and 10) Allowance for equity funds used dunng constmetion 159,285 150,846 121,701 Eammqs of subsidanes. net . 14.662 3,418 10,447 Other, net (deduction) 28,791 (3,299) 0 0,314) Income taxes-other, net (deduction) (9,442) (982) 16,320 Income taxm-cmdd 60,747 58,382 40,458 Totalother income . 254,043 208,36S 168,612 Income beforeinterest deductions 530,393 488,465 422,499 Interest Deductions Intemst on long-tenn debt . 245,070 220,271 179,363 Otherintemst 11,694 17,287 9.752 Allowance for bonowed funds used during construction (cmdd)(Note 1) (62,622) (60.I84) (41,386) Totalinterest deductions . 194,142 177,374 147,729 ht income 336,251 311,091 274,760 Dividends on preferTed and preferen stocks . 57,895 S8,612 52,562 Earnings for Common Stock $ 278,356 $ 252,479 $ 222,198 Comnun Stock Data Average shares outstanding (thousands) 87,313 81,985 77,168 Eamings per share . $3.19 $3.08 $2.88 Dividends per share . $2.08 $1.95 $1.83 , l See notes to Enancialsbtemenb. 22
Statements of Source of Funds for Plant Construction Costs DUKE FOWER COMPANY Year Ended December 31 ANhis a chaums 1981 1990 1979 Funds from Operations Net income . $336,251 $311,091 $274,760 Non-fund items Depmciaton and nuclear fuel amortzaton . 224,675 210,600 190,110 Defermd ina>me taxm and invatment ta credd, net of amortzation . 109,572 68,198 91,991 Equ:ty component of the allowance for funds used dunng constructon . (159,285) (150,846) (121,701) Other, net (13,146) 2,989 (S,854) Funds from operatons . 498,067 442,032 429,306 Dividends paid (239,598) (217,618) (193,585) Funds retainedin thebusiness . 258,469 224,414 23S,721 Funds from Financing and Sale of Assets-Net Proceeds Sale of an intemst in the Catawba Nuclear Staton (Note 10) . 520,562 - - Nuclear fuel trusts 42,248 30.664 76,254 Common stock 35,954 105,829 131,561 First mortgage bonds . - 271,150 295,768 Preferred stock - 49,323 49,251 Tenn note . - 10,000 - Increase (decmase) in notes payable for construction (25,650) 85,000 112,000 Funds from fmancing and sale of assets . 573,114 551,966 664,834 Totalavailable funds 831,583 776,380 900,555 Inct wee in Working Capital Requirement . (92,946) (31,000) (43,536) Retirements of I.ong-Term Debt and Preferred Stock (93,551) (43,211) (150,412) Plant Construction Expenditures 645,086 702,169 706.607 Equity component of the a!!owance for funds used dunng construenon . 159,285 150,846 121,701 Plant Construction Costs . $804,371 $853,01S $828,308 i Summery of Plant Construction Costs l Prod chon $504.292 $590,420 $571,023 ' Transmission . 36,233 S1,300 42,566 Distnbubon . 112,073 92,990 89,841 General 22,557 25,000 26,812 Subtotal . 675,155 759,710 730,242 Nuclear fuel 129,216 93,305 98,066 Plant Construction Costs . $804,371 $853,01S $828,308 See notes to Enancialstate:1,ents. 23
Balance Sh is DUKE POWER COMPANY Assets December 31 (doars n h arx*) 1981 1980 Electric Plant (at origral cost - Notes 1,6 and 11) Bectnc phntin sennce $5A62A74 $4,419,152 Ims accumubted depreciation and amortization 1,842,831 1,629,109 Bectnc phntin semce, net 3A19A43 2,790,043 Constructon workin progre:s 2,178,484 3,114,807 Totalelectric phnt, net . 5,998.307 S,904,850 Other Property and Investments Other property - at cost Gess accumuhted deprecaton: 1981 - $6,781; 1980 - $4,551) 28,444 22,447 Investments in and advanens to subsdare (Note 1) . 54,981 34,373 Other invetments - at cost or less (Note 10) . 22,592 8,845 Total other property and investments . 104,017 65,665 Current Assets Cash (Note 9) 4.528 1,835 Receivables Geos allowance for losses: 1981 - $3,998; 1980 - $4,064) 189,038 128,S49 Materiah and supphes - at average cost Coal . 128,581 133,156 Other 93.457 79,SS2 Prepayments . 8,172 S,334 Totalcurrentassets 419,772 348,426 [ Delorred Debits Debt expense, bang amortized over terms of rehted dat . 3.113 3,282 Other . 5A35 S,951 Totalddemxldsits 8,948 9,233 Total Assets . $8,531,044 $6,328,174 Sea notes to Anancialsbtemenb. s 24 I
Capitalization and Liabilities December 31 1980 (dbtbrs in enmnds; 1981 Capitalization (see Statements of Capifahzation) Common stock eguity $2.108.935 $1.969,140 Pmfened and preference stocks without sinkmg fund requirements . 388A10 395,858 Prefermd stocks with sinking fund requirements . 308.674 316,559 long-term dat . 2.545,894 2,594,008 Total capitalization . 5.351.913 S,27S,565 i Current Liabilities Accounts payable 87.290 61,127 Interst aarued . 71.615 71,056 Taxes accrued . 59.958 45,610 Other . 26.872 24,282 Total 245.735 202,075 Notes payable for construction - pendmg permanent fmancing 171.350 197,000 (Note 9) . Current matunties of long-term debt and prefernd stock . 79,646 74,110 Totalcurrent habihties. 496.731 473,185 Accun ulated Deterred Income Taxes (Notes 1 and 7) . 419,958 374,684 Desarred Credits 249.208 193,2~76 Investment tax cred:t (Notes 1 and 7) 13.234 11,464 Other . Totaldeferred emdits . 262.442 204,740 Commitments and Contingencies (Note 11)
' $6.531.044 $6.328,174 Total Capitalization and Liabilities See notes to hnancialstatements.
4 ? 25 o
Statements of Capitahzation an1 Retained Earnings DUKE POWER COMPANY Capitalization December 31 ru n o M an*> 1981 1980 Common Stock Equity (Note 3) l Common stock, no par, 150,000,00U and 100,000,000 shams authonzed and 88,482,596 and 86,294,416 shares outs'utng for 1981 and 1980, respectvely ,3 $1,S35,895 Retained eam:ngs .s42 433,245 Totalcommon stock equity ... .,8,935 1 969,140 Preferred and Preference Stocks Without Sinking Fund Requirements (N Prefened stock 375,000 375,000 Pmference stock 13,610 20.858 Total preferred and pmference stocks w:thout s:nkmg fund requ:rements 388,610 395,858 Preferred Stocks With Sinking Fund Requirements (Note S) . 308,674 316,559 Long-Term Debt (Note 6) First and refund:ng mor::sye bonds . 2,376,250 2,418,000 Sinbng fund debentures,4 7/8%-due 1982 25,000 25,000 Tenn note,9.02S%-due 1985. 8,500 10,000 Pollution controlobligations,75o6 of pnme rate-due 1983 2,500 2,500 Capitahzed leams . 101,579 103,862 Nuclear fueltrusts 125,000 125,000 Unamortzed debt dammt and premium, net (15,489) (16,244) Current matuntes of long-tenn deb' (77,646) (74,110) Totallong-term dat 2,545,694 2,594,008 TotalCapitalization $5,351,913 $S,275.565 Retained Earnings Year Ended December 31 run n ban *> 1981 1980 1979 B<ilance-Beg:nn J of ymr .
- $433,245 $343,225 $266,173 A (d-Net income. 336,251 311,091 274,760 Total 769,496 654,316 540,933 Deduct Divriends Common stock . I81,703 159,240 141,03S Preferred and preference stocks . 57,895 S8,612 52,562 Capital stock expense . 56 3,219 4,111 Totaldeductons 239,654 221,071 197,708 Balance-Endof ymr $529,842 $433,24S $343,22S Sea noks to hnancnlsitztements.
26
Notes to Financial Statements DUKE POWER COMPANY
- 1. Summary of Significant Accounting Policies A. Additions to Electric Plant. The Company capitahzes all D. Subsidiaries. The Company accounts for investments in construchon-related dimet labor and materials, as well as indimet its subextanes, all of which are wholly-owned, using the aquity constmcbon costs, includmg general engmeenng, taxm and the method. See " Subsidiaries" on page 42. Retained oamings include cost of money (allcwance for funds used dunng constructon). The $41,234,000 of .xhstnbuted eamings of subsidianes at cost of renewals and bettennents of units of property is capitahzed; December 31,1981. Dividends mceived from subsidanes were the cost of repairs and replacements reprmentmg Ims than a urut $981,302 in 1981, $1,675,000 in 1980 and $5,800,000 in of property is charged to electric expenses. The ongmal cost of 1979.
property retred, together with removal cos's less salvage value, is charged to accumulated deprecaton. E. Income Taxes. The Company and its subsidanes hie a con-sohda+ed federal income tax retum. Income taxes are allocated to B. Allowance for Funds Used During Construction (ADC). each company based on its taxable income or loss. ADC is an accountng procedure whereby the net comooste in- Income taxes are allocated to electnc operatng expense and to temst and equity costs of capital funds used to fmance construchon non-electric operatons under "Other Income." The " Income taxes-are capItahzed in the same manner as constructon labor and credit" classihed under "Other Income" results from tax daluchons matenal costs. ADC, a noncash, non-operatng item, is recog-of interest costs mlatng to investments in non-uthty properties, mzed as a cost of Electne Plant with offsetung crechts to "Other mainly CWIP not included in rate base. Income and Intemst Deduchons because, under estabbshed regulatory rate practces, a uthty is pemutted to include a fair Deferred income taxes are provided for tming differences be-return on, and the remvery of, these capital costs through their in- tween book and tax income, pnneipally resulung from accelerated cluson in rate lase and in the provision for depmciaton. tax depmciation, capitahzed taxes and employee benehts, cost of rem val, and nuclear fuel d.sposal costs. ADC, which is compounded semi-ar.nually, was calcdated on average embedded rates (net of apphcable income taxes) of 8.67 Investment tax credit is defened and amortized ovec the useful percent, 8.10 percent and 8.01 percent for 1981,1980 and hves of the related properties. At December 31,1981, the Com-1979, respechvely. pany had unused invatment tax credit approximatng $60 Nortl. ^,rchna statutes mquire that capital expenditums for con-stuch n w rk in progmss (CWIP), iacurmd on or after July 1. F. Fuel Cost Adjustment Procedures.The Company has pro-1979 and requested in rate apphcations after such date, be includ- cedums in all three of its regulatory junsdictons to adust rates for ed in rate base for ratemaking purpmes. Under such statutes, fbemeens in bel cost Procedums for Ne and M CA uthtes are pemutted to contnue capitahzmg ADC with respect t retail junsdicbons provx3e for periodic reviews of fuel costs with CWIP r ot included m rate ban but are not permitted to do s provision for changmg such costs in base rates. With mspect to with respect to CWIP included in rate base. At December 31, South Carchna, the Company contnues to mflect in revenues the 1981, $144,841,000 of CWIP was included in North Carchna dfemnce between actml bd costs eurmd and bd costs base and themfom exduded for purposes of capitahzing recovered through base rates. Procedures for the wholesale jurisdction provide for monthly fuel cost adjusbnents. C, Depreciation and Amortization. Provisions for depmcia-bon Je moorded using the s'raight hne method. The year-end composite weigh +ed average depreciation rates wem 3.44 percent for 1981 and 3.33 percent for 1980 and 1979. All coal-hred generatng umts are deprecated at the rate of 3.57 percent. Beginning October 1979, the depreciation rate on nuclear plant ras revised from 3.57 percent to 4.00 percent. This rate includm an allowance for decommissiorung costs. However, the Company is continuing to evaluate the impact of such costs. Provisions for amorti::ation of nuclear fuel, which are included in
- Fuel used in electnc generation," are recorded usng the un2t of production method. Because of the pmsent unavailabihty of reprocessmg facihbes, nuclear fuel amortzation includes an estimate of disposal costs.
27 i
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- 2. Bate Matters General rate increases sin January 1,1979 are as follows (dollars in thousands):
Percent Annualized Approximate Revenue Recorded l Junsdxton and Date implemented incmase on 1981 Sales 1981 1980 1979 ' N.C. Retail 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 1,1981. 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 - - Wholmale October 8,1979 . 3.45 S,700 5,700 6,500 1,400 October 3,1980 . . 6.71 13,700 13,700 3,300 - January 23,1981. 2.10 4,600 4,100 - - D-ulxi- 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 which was to reflect the com-mercial operation of McGuire Unit 1. (b)This increase was implemented in three stages, on January 28, October 18, and December 1, the last of which was to reflect tle commercial operation of McGuire Unit 1. (c) Subject to refund with interest. 3, Comman Stock and Retained Earnings Co-- Stock In 1981,1980 and 1979, the Company re ived $35,954,000,
$108,361,000 and $134,924,000 from the issuance of 1,884,944 shams, 6,278,820 shares and 6,999,292 shares of common stock, respectively (see Note 12).
At December 31,1981, certain shams of common stock were reserved for issuance as follows: Shams Stock Purchase-Savings Program for Employees S,254,07s Conversiono! PreferenceStock . S81,627 Dividend Reinvestment and Stock Purchase Plan 510,066 Employees'StockOwnership Plan 2,901,998 Total . 9,247,769 Retained Earnings None of the Company's retained eamings as of December 31, 1981 were mstncted with respect to the declaration or payment of i dividends. 28
l
- 4. Preferred and Preference Stocks Without Sinking Fund Requirements At December 31,1981 and 1980,10,000,000 shams of pre- Preferred and preference stocks without smkmg fund regwrements ferred stock ($100 par value) were authonzed and issuable with at December 31,1981 and 1980 were as follows (dollars in or without smking fund requirements. In addton, 1,500,000 thousands):
4 sharts of preference stock ($100 par value) were authorized at Year Shares December 31,1981 and 1980. Bate /Senes issued Outstandmg 1981 1980 The outstandmg Preference Stock,6 3/4 percent Convertble 4.50% C 1964 350,000 $ 35,000 $ 35,000 Senes AA, is convertble into shares of common stock at the ad- S.72% D 1966 350,000 35,000 35,000 justed conversion pnce of $23.89 per sham, each sham of 6.72 % E 1968 350,000 35,000 35,000 preference stock bemg valued at $100 par for such purpose. The 8.70 % F 1970 600,000 60,000 60,000 conversion pnce is subject to certain adjustments designed to pm- 8.20% G 1971 600,000 60,000 60,000 tect the conversion pnvilege agamst 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 shares wem 8.28% K 1977 S00,000 50,000 S0,000 converted into 303,236 shams, S26,657 sharm and 357,418 8.84 % M 1978 400,000 40,000 40,000 shams of common stock, respectvely. 6 3/4%, AA Conveitble 1%9 136,109 13,610 - 208,586 - 20,858 Total $388,610 $395,858 5, Preferred Stocks With Sinking Fund Requirements At December 31,1981 and 1980,10,000,000 shares d pre- The annual sinking fund requaements thmugh 1936, net of ferred stock ($100 par va!ue) were authorized and issuable with amounts previously acquired, are $2,000,000 in 1982, or without smking fund requaements. In addton, 10,000,000 $4,000,0SO in 1983, $7,900,000 in 1984, 57,900,000 in 198S shares of preferred stock A ($25 par value) were authorized at and $9,525.000 in 1986, with some addtonal redemptions per-December 31,1981 and 1980. rmtted at the Company's option. Prefened stocks with smking fund requaements at December 31 The ca!! provisions for the outstandmg pmfermd and preference 1981 and 1980 were as follows (dollars in thousands): stocks specify vanous redemption pn s not exceed.ng 111 per. Yer Shams cent of par values plus accumulated divdends to ;he redemption Issued Outstandmg 1981 1980 date. Rate /Senes 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 500,000 50,000 50,000 11.00?a O 1980 500,000 50,000 50,000 10.76% A 1975 2,280,000 57,000 - 2,340,000 - 58,500 lass: Preferred shares reacquaed for current and future sinking fund rapirements-at cost l Shams Reammred 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 smking fund requuement 8.20% J (2,000) - Total $308,674 $316,559 29
- 8. Long-Term Debt First and refunding mongage bonds outstanding at December 31,1981 and 1980 were as follows (see Note 12) (dollars in thousandsh Year Year Series Due 1981 1980 Series Due 1981 1980 l (cmenued) +
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 l 14 3/8 % 1987 50,000 50,000 7 3/8%B 2002 75,000 75,000 l 12% 1990 75,000 75,000 73/4% 2003 100,000 100,000 41/2% 1992 S0,000 50,000 81/8%B 2003 100,000 100,000 41/4%B 1992 S0,000 S0,000 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 83/8% 2006 100,000 100,000 S 3/8% 1997 75,000 75,000 81/8% 2007 125,000 12S,000 63/8% 1998 "'S,000 75,000 93/8% 2006 125,000 12S,000 7% 1999 75,000 75,000 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 S0,000 50,000 71/2% 2001 100,000 100.000 Total $2,376,250 $2,418,000 Substantially all electnc plant was modgaged at De mber 31,1981. The annual matunbes of long-tenn debt (including sinking fund re. Included in the annual matunties are amounts relating to quuements and mn.:alid lease principal payments) thrcugh $125,000,000 in outstanding obligations under two nuclear fuel 1986 are $77,646,000 in 1982, $62,510,000 in 1983, trusts. Such matunties are based on eshmated nuclear fuel con-
$49,3S3,000 in 1984, $12.085,000 in 1985 and $40,392,000 sumption. 'Ihe Company intends to transfer htle to additonal in 1986. nuclear fuel to the trusts to replace such amounts as fuelis con-sumed.
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- 7. Inconne Tax Expense lacome tax expense corunsted of the foHowmg (doHars in thousands):
1981 1980 1979 i Electnc Expenses Current income taxes Federal $ 30,244 (a) $ 69,134 $ 61,698 State 11,183 16,121 14,580 41,427 8S,255 76,278 Defened taxes, net Ex sstax overbookdepreciabon . 49,353 (b) 25,114 27,S94 Capdahzed taxm, employee benehts, etc. 16,672 17,680 16,545 Revenum refundable . . . . (8,281) - - RepairaHowan andcostof removal . (38)(b) S,872 7,369 Nuclearfueldisposalcests. (12,336) (12,263) (10,800) 45,370 36,403 40,708 hvatment tax credd Deferred S6,146 36,854 41,196 Amortization of deferments (credd) . (5,071) (5,049) (4,678) 51,07S 31,805 36,518 Totalelectricexpenses 137,872 1S3,463 1S3,504 Other Income income taxes-other, net (deduchon) . S1,592 (c) 982 (16,320) Incometaxm-credd (60,747) (S8,382) (40,458) Totalotherincome (9,1SS) (S7,400) (56,778) Totalincometaxexpense . $128,717 $ 96,063 $ 96,726 Total cunent income taxe wem $24,002,000, $30,037,000 and $19,500,000 of which state income taxm were $11,086,000,
$10,753,000 and $8,917,000 for 1981,1980 and 1979, mspechvely.
Total deferred income taxes were $S3,641,000, $34,221,000 and $40,708,000 of which deferred state income taxes wem
$7,899,000, $3,896,000 and $4,399,000 for 1981,1980 and 1979, respectively.
(a) Electnc federalinmme tax reflects substantialinvstment tax credd utilization related to the tax gain on sale of assets in February 1981. (b) Reflects change attnbutable to the Economic Hecovery Tax Act of 1981. Defermd taxe on depreciabon also reflect Urut 1 of the McGuire Nucler Station coming in service De mber 1,1981. (c) Includes $42,150,000 resulbng from the sale of assets in February 1981 and nominal amounts thereafter (see Note 10). Such in-conie taxes, situch am included in 'Other, net (deduchon)" on the Statements of Income, mflect a taxable gain in ex ss of book gain resulbng principaHy from the trmtment of ADC. Income taxes differ from amounts computed by applying the statutory tax rate to pmtax income as foHows (dollars in thousands): 1981 1980 1979 Income taxes on pretax income at the statutory federal rate of 46% $213,885 $187,291 $170,884 l incmase (reduction)in tax resulbng from: AHowance for aH funds used dunng construebon ( ADC) (102,077) (97,074) (7S,020) Amortization of electnc invstment tax cmd:t deferrals (5,071) (S,049) (4,688) State inmme taxes, net of federalincome tax benehts . 13,595 9,044 7,483 incmase in tax expense pnmanly due to excess of tax gain over book proht onsaleof assets . 12,468 - - Otharitems, net (4,083) 1,851 (1,933) Toblincometaxexpense(seeabove) $128,717 $ 96,063 $ 96,726 31
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- 8. Retirement Plan 1
The Company and two of es subsidianes have a noncontnbutory, A companson of accumuhted phn bmehts and phn ret amets at dehned beneht retrement plan covenng substantally all ther December 31,1980, the date of the latest actuanal report, and employees. "Ihe Company's pohey is to fund pension costs ac- December 31,1979 is as follows (dollam in thouands): cnsed. Total pension expense amounted to $31,896,000 in 1981, 1980 1979 i
$26,782,000 in 1980 and $23,844,000 in 1979. Effectve Actuanalpmsentvalueof accumulated Sep' ember 1,1980 the plan was amended to provide for certam phnbenehts phn changes includag increased benehts for actve and retred Vested. $202,851 $126,757 (
employees. Also, in 1981, the actuarial cost method and certain Non-Vested 60,332 13,090 actuanal assumptions were changed. The effect of these changes did not sigmhcantly increase the Company's pension cost for Total $263,183 $139,847 1981. Netassets avaihble forbenehts $244,008 $176,840 The weighted average assumed rate of return used in detenntrung the actuanal present value of accumuhted phn benehts was 8.3 percent in 1980 and 7.5 percent in 1979. 9, Short-Term Borrowings The Company has hnes of cmd:t weh 77 commercial banks and bahnce requirements of $1,748,000. Bank loans, nonnally for 90 uses these hnes, plus the sale of commercial paper, to fmance its days or less, are pnncipally at the lendng bank's commercial current cash mquirements. pnme interest rate Certam of the Company's bank hne ar-rangements may mquire additimal bahri s or fees related to an-At De mber 31,1981, the hnes of credd were on either a fee nual average betrowings. basis and/or compensatng bahnce basis, with average annual A eummary of short-term bonowings and cmdt arrangements is as fo!!ows (dollars in thousands): 1981 1980 1979
)
( Amount outstandmg at year-end-average rates of 11.69%,17.74% and i4.09% respectively $171,350 $197,000 $112,000 Maximum amount outstand:r.g dunng the year . $250,398 $197,000 $12S,400 Average amount outstandmg dunng the year . $ 38,829 $ 84,466 $ 33,894 Weighted average intemst rate for the yea:-computed on a daily basis . 1S.39 % 12.91% 11.93 % Lines of credit at year-end . $305,400 $280.400 $280,000
- 10. Other Income in February 1981, the Company sold a 75 percent intemst in at December 31,1981) under "Other investments." h imphcit Urut 1 of the Catawba Nuclear Staton (Catawba) and 37.S per- interest on the notes is accrued monthly. The net of tax proht from cent of the staton's support facihties to groups of North Camhna the sale was $4 million. At December 31,1981, " Construction and South Carolina rural electnc cooperatve customers. At clos- work in progmss" included $401,502.000 representng the Com-ing, $521 million and two notes totahng $76 milhon were re- pa ty's investment in its remaining interest in Catawba.
ceived. The notes are non-interest beanng untl 10 years after the In 1979, the Company made a provision to wnte down the carry-hrst Catawba unit begns commennal operaten, after which, in- mg value of an investment made pursuant to the terms of a certain tvest and pnnc: pal payments commenm. The Company has d:s~ coal supply contract. A charge was recorded of approximately counted the notes and reccrded the present value ($13.8 milhon $13,564,000 (after giving effect to income taxes of $12,264,000). 32 l _ _ _ -- J
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- 11. Commitments and Contingencies A. Construction Program.The Company is engaged in a long- maximum of $10 milhon a year for each of its heensed reactors in range constmeton program for which substantal comminnents the event of more than one incident. At December 31,1981, the have bmn made. Projected constmeten and nuclear fuel costs for Company had four heensed reactors.
i the years 1982 through 1984 are $2.02 bilhon and $514 milhon, Property damage coverage for certain of the Company's nucbar respmtvely. 'Ihe program is subject to penode revew and revi- facthtes is provided through membersh:p in Nuclear Mutual sion, and actual constructon costs incurred may vary from such M (NMD If NML's losses were to exceed its reserves, the esbmates. This is due to vanous factors includmg chang:ng levels Company could be lable, on a pro rata bas:s, for additonal of mflaton, revised load estmates, the cost and avadabity of assessments of up tc, $72 milhon, repremntng 14 tmes the Com-capital, and the outcome of heensmg and environmental matters. pany's current annual premium to NML On Febmary 24,1981, the Board of D: rectors, becaum of the The Company is a member of Nuclear Electic Insurance Limited uncertamty of the avadabthty of funds on reasonable terms, in. (NEIL) which provides insurcnce for the mcmased cost of genera-defm:tely debyed completon of Chemkm Umt I and miemapted tion or purcha:ed power resultmg from the accdental outage of a work on Unit 2. 'Ihis status remams unchanged nuclear urut. If losses were to exceed the accumuhted funds The maragement of the Company intends to raemmend to the avadable to NEIL, the Company wouki be hable for a retroepr-Board of D: meters at it; February mmung the withdrawal of the tve premium adjustment of up to hve tmes the reguhr annual Company's apphcoton for a constructon permit for the pmposed premium. Maximum potental habity per incident currently is Perlor,s Nuclear Staton. If such recommendaten is approved, the <stmated to be $26 mdhon. Company miends to requect penrassion in mch of its reguhtory The Company ante: pates purchang from NEIL, through its Ex-Junsdictons to recover costs rehted to such preposed fac:aty. The cess Property Insuranm Program, $500 mdhon of property Company has ocurred no matenal costs and has no comm:tments damage insurance. Ths is in add.non to the $450 muhon of the cance!bton of which would result in any matenal costs w:th coveraae provded by the Comp 1ny's underlying property reqxct to such facinty. damage pohcies tssued tiuough the comn.ercial market li Icmes were to excexd the accumulated funds ava:hble to NEIL for +he B. Nuclear Insurance. The Company,s pubhc habity for che Excess Property Insuranm Prcyram. the Company would be resultng from any nuclear :ncdent is hmited to $560 mdhon Icble for a retrospxtve premium adjustnent of up to 7.5 tmos under provnons of the Pnce-Anderson Act which provdes for the reguhr annual prem;um, in the pobey ymr m which the loss is nuclear habity insurance up to that amount. a porton of th:s m- " " " " ~ suranm is provded through Nuclear Reguhtory Commiss:en reguhtons pursuant to whrh the Company could be aaumd up C. I, eases. Mmimum leam commitments as of December 31, to $5 muacn for each of its beenmd reactois in the event there is a 1981 under a'l captal and cperahng leases am not matenal nuclear incdent mvolving any hcenmd facity in the naton w:th a
- 12. Subsequent Events On January 7,1982, the Company issued 3.727,544 sha:es of mortgage bonds with a face value of $119,902.000. A non-common stock w th a market value of $73,489,000 in exchange taxable gam of $48,304,000 on the retrement of the bonds was for portons of mveral senes of outstandmg f:rst and re!"ndmg recorded m 1982 as an extraordmary item.
33
Management's Dscussion and Analysis of Financial Condition and Results of Operations DUKE POWER COMPANY Liquidity and Capital Needs In February 1981 the Company sold a 7S - and Resources percent interest in Urut 1 of the Catawba Since January 1,1977, additions to prop. Nucke Staton (Catawba) and 37.5 per-e-ty of $4.0 bdhon (includmg nuclear fuel) cent of the staton's support facabes to , and retrements of $800 million have group of the Company's North Camhna msulted in a net incmase in gross plant of and South Carchna rural electnc coopera-tve customers. Cash proemds of $521
$3.2 bilhon. In 1981 the net incmase in gross plant of $300 milhon was due to milhon were received from the sale. The propedy additions of $800 mdhon and Catawba tale, coupled with funds from retrements of $500 milhon. 7he amount of operations, enabled the Company to gen-retrements was unusually large pnmanly erate 94 percent of its capital mquirements due to the sale, in February 1981, of a intemally, precludmg the need for long-porton of the Catawba Nuclear Staton. term hnancog in 1981.
Projected constructon and nuclear fuel An agmement to sell 25 percent of Unit 2 costs for the penod 1982 thmugh 1984 f Catawba to a group of South Carchna are $2.02 bdhon and $514 mdhon, respec , municipahtes was reached in August tvely. Included in the projected construc, 1981. The sale may be cmsummated by ton costs am nominal amounts related to mid-1982. It wouki provr2e cash pro eds the Bad Creek Hydmelectnc Staton. This of appmximately $250 milhon. pumped storage facihty will have a net capabity of 1,000,000 KW consisung of To further rrunimize capital experxhtums, four 250,000 KW uruts, although con- the Company ha., mitated a comprehen-The constructon program currently re.
'* p t n has not been dehnite- sive load management program. The pro-quues expenditures greater than cash
[ed' generdted intemally from operations. b gram is designal to hmit futum construc-On February 24,1981, the Board of Company initially funds the excess with ton costs by encouragi g consumers to Duectors, Locause of the uncertainty of the short term bank bonowings and commer- mduce demands on the system without availabaty cf funde on rmsonable terms, cial pape . While the Company pmfers to restnctng the continued ecommic indehnitely delayed completion of hmit short-tenn debt to about $150 milhon, development of the Company's servxe Cherokee Unit I and intenupted work on it presently has bank hnes of credit of ama. Urut 2. h status remains unchanged. $305 milhon. Since 1977 the Company las refurried all of its short-term debt at The Company is comrmtted to improving The management of the Company intends its f.nancial strength to provide increased least once each year. In early 1982 ap. to recommend to the Board of Duectors at roximately $190 mahon wul be obtained hnancing flexibihty. h Company its February meetag the withdrawal of the beheves that in the curmnt econorruc en-Company s apphcation for a constuction vimnment, it is irrportant to seek a term debt, which was $171 mdhon as of pemut for the proposed Perkins Nuclear stronger capital stmeture and to maintain December 31,1981-Staton. If such recommendaton is ap- manageable levels of long-term debt. proved, the Company intends to request Dunng the past five years, Enancings have ' permission in each of its regulatory included $1.0 bilhon in long-term debt At ymr-end the Company attamed a level junsdebens to recover costs mlated to (pnncipally hrst and refundmg mortgage of capitahzation of 48 percent long-term such croposed facity. The Company has bonds), $290 milhon in pmferred stock debt,13 percent prefened stocks and 39 I inced no material costs and has no and $530 milhon in common stock. Since percent common equity. On January 7, comrmtments the cancellation of which November 1978 sales of intrrests in the 1982 the Company issued 3,727,544 wouki result in any matenal costs with Catawba Nuclear Staton have provxied shares of common stock with a market mspect to such facthty. $781 milhon. value of $73,489,000 in exchange for l l 1 34
y portions of several senes of first and Fixed charge coverage, using the sales wem the major contnbutors to the refundag modgage bonds havng a face Secuntes and Exchange Commission higher mvenues. The rate inemams wem value of $119,902,000. A non-taxable (SEC) method, has not changed necessitated by the effects of inflaton, the gam of $48,304.000 on the retmment of sigmficantly because of the increasingly inclusion of construchon work in pmgmss bonds was recorded in 1982 as an ex- high level of embaided costs. Dunng in rate base and tha need for a higher traordmary item. This enabled the Com- 1981 this coverage increased to 2.73 setum en invectment. Pnmanly because of pany to increase its common equity rato tmes, compared with 2.71 tnc in 1977; growth in the number of customers, total fmm 39.4 percent at December 31,1981 this indicator contnues to rerr. sin below kilowatt. hour sales incmad from 48.8 to 41.7 percent. The Company plans to the Company's goal of 3.5 timm. billion in 1977 to 53.5 billion in 1981, an I conts.s to evalu& opportumtes to in- increase of 10 percent. cmase its fmancia. aeng*h without dilutng l Opemtng Expetoes exstng sharehokiers equity. Increases in total electne expenses have From 1977 to 1981, furs trom opera- substantally offset the increase in mvenues tions provxded 29 percent of capital
- dunng the 1977-81 period. 'Ihe most gurementi, not includmg cash generated signihcant inemase is in operatng and from the two Catawba sales. It is the mantenance expense, which rose 74 per-Company's long-range objectve to cent. Inflation (see " Selected Financial generate at least 50 percent of i*s capital Data - Effects of Changmg Pnces"), in-requirements from intemal sources. The cmased o.wration from fossil-fired sta-inclusion of constmcbon work iri progress tons, decmased hydroelectne generaton and completed generatng units in rate and increased requirements by the base and a higher rate of return on invest-Nuclear Regulatory Commisan were the l ment will aid m increasmg the level of in-key factors.
I ternal cash generaton. These mat +ers were l considered in recent rate apphcatons in % er ! the Company's three rate junsdictons. In Over the five-year pened allowance for December 1981 the North Camlina funds used dunng constructon (included Utites Commission issued a rate order in both other income and interest deduc-allowmg a 16.5 percent retum on com- tons) increux1, pnmanly as a msult of mon equity, meksion in rate base of higher construction work in pnagmss and McGuire Urut 1, whrh was placed m Results of Operations higher embedded cost of funds. Interest commercial operaton on December 1, Net Income and Dvidends income increard $19 milhon from 1983 1981, as well as certam construchon work to 1981, largely through the investment of From 1977 to 1931, eam ngs per share m progress. In January 1982 'Ihe Pubhc (EPS) increased 32 percent from $2.41 to pmceeds from the Catawba sale. Eanungs Sace Commasion of South Carchna $3.19. Tlie eamed retum on common of subdmm amounted to $15 rrullion in issued a rate order allowmg a 13.0 per- equity inemased from 12.0 percent in 1981. The Company achvely seeks to im- [ cent retum on commen equity and the in- 1977 to 13.7 percent in 1981. Divxdends prove the rate of retum on investment in clusion in rate base of McGuire Urut 1. per share inemased 28 percent from its subsidianes, the mmmgs of which are The June 1981 wholesale request is under mflected in other income. Interest deduc-
$1.63 in 1977 to $2.08 for 1981.
consideraton by the Federal Energy tions and dividends on preferred and Regulatory Commeston. Since inflation Revenum preference stocks have increased smce has contnued to increase costs in 1981, Revenus incmased by 51 percent over 1977 becaum of higher interest rates dur-the Company expects to file further re- the 1977-81 penod. Increases in rates ing the subsequent period and the need quests for increased rates in early 1982. charged to customers and in kilowatt. hour for additonal capital. 35
Long-Term Financing and Sale of Assets DUKEIQWER COMPANY To meet its capdal requirements, the Company has financed extensively with long-tenn debt and equdy secuntos and has raised adddional capdal through other typm of financing plus the sale of certan assets (dothrs in thousands). 1981 1980 1979 Price Per Net Net Net ( Sham Proceeds Proemds Proceeds 1 Financing Common stock Pubbe sales (4,000,000 shams; August 26) . $17.375 $ 66,968 19.50 $103,887 (5,500,000 shares; March 21) Stock PurchaeSavmgs Program for Empbyees (1,236,180 shams) - 18.88* $ 23,344 (1,104,545 shams) . 17.03* 18,8iS 18.43' 15,103 (819,308 shams) Dividend Reinvstment and Stuck Purchase Plan (S34,151 shams) 19.49* 10.412 16.67* 9,201 (552,000 shams) 18.57* 6,639 (3S7.462 shares) Empbyees' Stock Ownership Plan (114,613 shares) 19.18* 2.198 17.43* 10,84S (622,27Sshams) 18.39' S,932 (322,S22 shams) 35,954 105,829 131,561 Totalcommonstock Preferred stock, $100 par 11 % Series O (S00,000 shares: Febmary 14) 49,323 49,251 8.84% Series N (500,000 shares; June 14) 49,323, 49,251 Totalpreferredstock . Long-term debt First mortgage bords 98,410 14 7/8% Senesdue2010(March 19) . 49,533 14 3/8% Senesdue 1987(March 19) . 12% Seriesdue 1990(August 26) 73,857 131/8% SeriesB due2010(August 26) 49,350 147,647 101/8% Seriesdue20090une 14) 148,121 10 7/8% SenesBdue2009(October 10) 271,150 295,768 Totalfirst mortgagebonds { Other financing 42,248 30,664 76,254 , Nuclearfueltmsts . 4
- 10,000 -
Term note-due 1985 J 42.248 40,664 76,254 Totalotherfinancing 42,248 311,814 372,022 Totallong-termdebt . 78,202 466,966 552,834 Totalfinancing Sale of assets 520,582 - - Sale of anintemst in the Catawba Nuclear Station . Totallong. term fireg and sale of assets . $598.764 $466,966 $552,834
- Average 36
l Selected Financial Data . DUKE POWER COMPANY 1981 1980 1979 1978 1977 Condensed Statements of Income (thousands) Ele :tric revenum . $1.908,454 $1.682,822 $1,492,5S7 $1,396,720 $1,266,974 Electncexpenses 1,832,104 1,402,722 1,238,680 1,159,719 1,037,088 Electncoperatingincome . 276,350 280,100 2S3,877 237,001 229,886 Otherincome 254,043 208,365 168,612 131,899 96 955 Incomebeforeinterestdeductions 530,393 488,46S 422,489 368,900 326,841 Intemst deductions . 194,142 IT,374 147,729 138,299 134,492 Netincome . 336,251 311,091 274,760 230,601 192,349 Divx3 ends an preferred and preference stocks . 57,895 58,612 S2,562 46,632 38,879 Eam:ngsforcommonstock . S 278,356 $ 252,479 $ 222,198 $ 183,969 $ 1S3,470 Common Stock Data Shamsof commonstock-yearend(thousands) . 88,483 86,294 79,489 72,132 6S,430
-average (thousands) 87,313 81,985 77.168 70,367 63,630 Per share of common stock Eamings . $3.19 $3.08 $2.88 $2.61 $2.41 Dividends $2.08 $1.95 $1.83 $1.74 $1.63 Bookvalue-yearend. $23.83 $22.82 $22.12 $21.31 $20.S3 Market pnce-hgh-low . 822 %-157/s $192/4-14% $20%-16% $22-18% $23%-197/.
-ymrend $20% $18% $17% $19% $22 Balance Sheet Data (thousands)
Totalassets $6,531,044 $6,328,174 $5,615,372 $4,984,621 $4,610,706 Long-termdebt . 82,545,694 $2,594,008 $2,300,488 $1,974,209 $1,948,081 Prefened stocks with sinking fund requ.rements S 308,674 $ 316,SS9 $ 268,500 $ 220,000 $ 170,000 Electric and Other Statistics Kilowatt. hour sales (millions) Residental . 13,861 13,765 12,832 12,959 12,462 Generalservice 9,731 9,395 8,778 8,920 8,623 Industral . 20,667 20,060 20,260 19,523 19,188 Wholesaleandotherenergysales 9,289 9,091 8,453 8,537 8,575 Totalkilowatt-hoursales _ 53,548 S2,311 50,323 49,939 48,848 Number of customers-yearend Residmtial . 1,125,371 1,105,03S 1,078,419 1,049,543 1,024,712 Other 181,331 179,370 175,258 172,626 168,351 Totalcustomers . y06,702 1,284,40S 1,253,677 1,222,169 1,193,063 Residstal customer data AverageannualKWH use 12,392 12,560 12.013 12,469 12.260 AveragerevenuebilledperKWH . 4.51e 4.11e 3.90e 3.62e 3.40c Number of employme,-ymrend Operatmgand ma:ntenance 11.892 11,463 10,758 9,895 8,816 Engineenng and construction . 8,185 8,149 9,372 7,839 6,782 Source of energy (milhons of KWH) Generated-Coal . 42,513 40,984 37,404 34,598 37,184
--Nuclear 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 interclange and purchased power . 494 (472) (S12) 1,016 31 System averageheat rate 3,633 9,675 9.742 9,769 9.743 Sys+emlmd factor 61.9 % __ 61.6 % 62.3% 62.9 % 62.0 %
37 i - - _ _ . - - - - - _ _ _ _ _ _ _
Selected Financial Data DUKE POWER COMPANY
- Quarterly Flauzacial Data I'
A summary of quarterly financal data for 1981 and 1980 is as foHows (doDars in thou. ands ex pt per sham data): Electnc Electnc Net Eamings Per Revenues Operating Income Income Common Share 1981 by Quarter
- Fourth. $484,782 $64,388 $79,626 $0.74 Rird 499,216 64,188 83,740 0.79 Second. . 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 hird 450,861 66,433 77,877 0.77 Second. 367,987 S7,6S8 68,987 0.67 First 438,755 79,249 87,463 0.92
- Ouarterly eammgs generally fluctuate with seasend weather corrhtions, tmung of rate incmaset (includmg fuel cost adjustmert pro-cedums) and maintenan of electnc generatu; urds, especaHy nuclear fueled units.
Stock Market Information At December 31,1981 and 1980, the Company had appmximately 123,900 and 129,000 hokieni of common stock, respectvely. Dunng 1981 approximately 30,610,000 sham of corranon stock were traded compamd to 20,666,000 dunng the previous year. The Company's common stock is traded on the New York Stock Exchange. Divdend Stock Pnce Range Common Stock Per Share Hx2h h 1981 by Quarter Fourth . $0.55 $22 % $19 % hird 0.51 21 % 18 % Second. 0.51 20 % 17 % First 0.51 19 % 1S % 1980 by Quarter Fourth. 0.51 18 % 15 %
'Durd 0.48 18 7/s 16 %
Second. 0.48 19 % IS % First 0.48 18 % 14 % 38 d
Selected Financial Data DUKE POWER COMPANY Effects of Changing Prices in moent years, the impct of generalinfhtion and changes in Effects of Rate Regulation. Unde, the Company's present spLic pri s has caused distortiore in traditonal accounting ratemaking procedums, only the histoncal cost of phnt in service measurements of income and capital. In response to this problern is recoverable in rates as depreciaton. Herefore, the excess of the Financial Accountmg Standards Board (FASB) issued State- the cost of phnt stated in tenns of constant dolbrs or current costs rTnt No. 33 requinng dubsure of the effects of inflabon on a over the historical cost of plant, resulting from inflabon in the cur-cxa.npany's operatons and fmancial position. rent year, is not pmsently recoverable in rates as depmciation, Because the amompanying supplementary information involves W is M as a debon 5 nd me cat. vanous assumptons and approximatons, it should be viewed as The reduction is offset by the Company having sgn6 cant an estmate of the effects of infhton, rather than a precise amounts of long-term debt outstandag, as we3 as other net rwsumment. monetary liabihbes, which will be paid b rk in dollars of less pur-chasing power. Thus, the gain from dechne in purchas:ng power Constant Dollar Accounting. Constant doBar accountng of net amounts owed in the accompanying schedules results from reflects the overall dechne in the purchasing power of +he dollar infhtion's effect on obhgatons to pay cash at a future date. by restatng histoncal costs in terms of doDars of equal parchasing power. Other. Income statement items other than depmciahon have not adusted. Le Company's operahon and maintena.ce ex-Constant dollar amounts for electric phnt in service were deter-penres aheady include the average effects of changmg pnces dur-r.uned by indexmg surviving histoncal costs of plant with the Con-ing the penod and, themfore, no adjustments have bmn made to sumer Price Index for aH Urban Consumers (CPI-U). Hmacal depreciabon rats were apphed tc the restated amounts of phnt N*- themby trendng the provision for depreciation to mflect the im. No adustments to income tax expense have been made in com-pact of generalinfhbon. puting the impact of infhtion sin only histoncal costs are deduct-ible for income tax purposes Current Cost Accounting. Cunent cost amountng reflects changes in spec 6c pri s of the property used in the Company's operahons from the date the property was acquired to the present.
'lhs method differs from constant dolbr accountng to the extent that costs of specific utihty property have increased more or less rapidly than the rate of general infhtion. Le current cost amounts of phnt in service represerit the estimated cost for repheng ex-Isling plant facihties and were determmed by indexing surviving p! sat costs by intemaHy generated indres or the Handy Whitman Index of Pubbc Unhty Constructon Cos:s. Smce plant facihties are nc2 expected to be reph d preceely in bnd, "cumant cost" does not necessanly represent the replacement mst of exshng produc-hve capacity. Cunerst cost depreciTion is computed by applying the same rats used in the historical cost and constant doBar staterrents to the current cost phnt amounts.
1 N 39 b - _ - _ - - - -
Supplementary Statement of Earnings for Common Stock Adjusted for Changing Prices , DUKE POWER COMPANY Year Ended D M 31,1981 Constant Current (d a us a sw a n u Historical $ Dollar Cost Electnc revenum ,
$1,908,454 $1,908,454 $1.908,4S4 Operating expenses , , 1,080,523 1,080,523 1,080 S23 Maintenanceof plant fac6 ties 131,670 131,670 131,670 Depreciation. 142,899 314,177 334,419 Taxes ,
277,012 277,012 277,012 Totaloperating expensen . . 1,632.104 1,803,382 1,823,624 Operatingincome . 276,350 105,072 84,830 Otherincome . 2S4,043 2S4,043 254,043 Income beforein1 crest S30,393 359,115 338,873 Intemst expense 194,142 194,142 194,142 Netincome . .. 3363S1 164,973 144,731 Dividmds on pmferred and preference stocks S7,895 S7,895 S7,895 Earrungs forcommon stock. $ 278,3S6 $ 107,078* $ 86,836 Increase in spec 6c prices (current coct) of utihty plantheld dunng the year * * $ 784,633 Reductionto net recoverable cost $ (284,665) (239,004) Effeet of increase in general price level . (810,052) Ex as of increase in general price level over increase in spec 6c prices after reduction to net recoverable cost . (264,423) Gam from dechne in purchasing power of net amounts cwed 326,916 326,916 Net . $ 42,251 $ 62,493
- If the reduction to net recoverable cost of $284,665,000 were resected, and no mcognition were given to the $326,916,000 purchasng power gain, eamings for common stock on a constant dollar basis wouki have been a loss of $177,587,000.
*
- At December 31,1981, current cost of electric plant, net of accumulated depreciat;on was $10,055,578,000.
I ( 40
l Five Year Comparison of Selected Supplementary Financial Data Adjusted for the Effects of Changing Prices DUKE POWER COMPANY nn Amnt n/ aw.nr Im1 run ne,w n.r sinm &ron> 1981 1980 1979 1978 1977 Electne revenum Inhstoncaldollars . $1.908,454 $1,682,822 $1,492.557 $1,396,720 $1,266,974 h 1,908,454 1,857,377 1.870,159 1,947,1I6 1,901,508 inwrstantdobrs I Income from continuing operations ? Inhstoncaldo~ms . 336,251 311,091 274,760 Incorstantdollars 164,973 185,808 203.721 Incurrentcost . 144,731 167,222 177.978 Famings per share for common stock inheoncaldohrs . 3.19 3.08 2.88 in constantdollars 1.23 1.48 1.79 incurrentcost . 0.99 1.25 1.4S Common stock dividends per share Inhutc i aldobrs . 2.08 1.95 1.83 1.74 1.63 Inconstantdollars 2.08 2.15 2.29 2.43 2.4S Market pnce per common share at year. erd Inhistoncaldohrs . 20.625 18.125 17.25 19.375 22.00 Inanstant dollars 19.96 19.11 20.44 26.01 32.20 Net assets at year end Inhstancaldobrs . 2.100,935 1,969,140 1,758,016 Inconstantdollars 2,040.760 2,075,827 2,083,008 Incurrentcost . 2,040,760 2.075.827 2,083,008 Purchasing power gain on net monetary items . 326,916 455,029 484,947 Decrease in the current cost of electric plant in service, net of inhtlon, af+er reduction to net recoverablo cost . 264,423 494,057 550,817 AverageConsumerPnceindex 272.4 246 8 217.4 195.4 181.S l
}
l - - - - - - - _ - _
Subsidimies DUKE POWER COMPANY l Subsidiary Investments Dewmber 51 (dolhrs in thousands) 1981 1980 Property and invmtments at cost Real estate, recreatonal and land development S 32,057 $ 31,780 f Coalmming 89.457 89,104 Nd current assets, pnncipally mceivables and inventones . 7.185 128,879 4.951 125,83S [o Total assets. Long-tenn notes (81) (281) Coalproducton comrrutments (37,272) (42,272) Deferredincome taxes . (38,385) (48,909) Total habihtes . (73.898) (91,462) Investments in and advances to snMdanes S 54,981 $ 34,373 Crescent Land k Timber Corp. Crescent is insttutng new programs to In 1981, Crescent harvested 29.9 milhon Formed in 1%9, this subsidary manages smrch for other natural resourcs which board feet of tmbc and 64,000 cords of may exist on its propertes, includmg oil, l pupwood. Approximately 1.8 milhon new approximately 270,000 acres of "non. gas and vanous minerals. Addmonal pro- trees are bemg planted each year. Since uthty" property consisting pnmanly of ember lands surroundmg Duke's hydro. grams am under way to determine the best Duke inmated its reforestaton achvmes in electne facihbes, but also includog merea use for properts, which may led to ex- 1939, some SS milhon seed!mgs have tional, inuustrial and commercial sites. panded industrial, commercial and been phnted on 80,000 acres. residential devs:pment. The Eastover Companies plant modemization program in late 1980 Eastover now has the facihtes and tramed Eastover Mining Company and Eastover allowed Eastover to ship a consistent quah- personnel to complete major overhauls of Land Company were founded in the early ty product to Duke dunng 1981. its mining equipment on stia as opposed to 1970s to help assure Duke an adequate The de"elopment of two addtonal deep y@g n we . % supply of quahty coal for its fosstl-fueled pr vides for a better means of controlhng seams of coal was completed in 1981 with gmerating stations. e st. five working sectons. Eastover antcipates In 1981, Eastover Mming Company pro. the startmp of an additonal working sec- As of December 31,1981 Eastover Land dured and shipped 2.0 million tons of coal tion in the newly developed seam at Ariay Company owned or had controlhng in-to Duke phnts, repmsentmg about 12 per. Mine, thus increasing that mine's produc- terest in an estimated 186 milhon tons of mnt of the system's total annual require. tion capabihty. recoverable coal rmerves in mstern Ken-ments. The completon of the proowsing tucky and southwest Virgnia. Mill-Power Supply Company opened a new warehouse and city counter Since 1910, this subsdiary 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 cuMdwy, was orgaruzed in 1910 to sup. sales to Duke were $11.S milhon, a dechne this capacity, Mill Power purchams virtual-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 mnstruction vices required by Duke and contracted for electnary After 70 ymrs of being one of program. Sales to customers other than more than $1 bilhon dolbrs on Duke's the brgest singhhonse electncal equip. Duke totaled $24.1 milbor., an increase of behalf m 1981. ment distnbutors, Mill-Power Sales Division about 8 percent over 1980. Western Fuel. Inc. 1981, well field development efferts were ton is pumped into wells to bnng uranium This subsidary was formed in June 1978 escahted and the joint venture was able to to the earth's sudace. Because this process to partcipate in a uranium exploration and commence commercial mirung operatons requi.as
~
very httle earth disturbance, it is mming venture with Ogle Petroleum Inc. in August 1981. The joint ventum an- an environmentally attrachve altemative to of Cahfomia. ticipates completng an expansion of its conventional mining methods. In pilot tests facihbes by the summer of 1982, which conducted in 1979, this process met all of in }une 1980, the j.omt venture completed will double the current plant capacity. the environmental mquirements of the constniction of the first phase of a com- W mercial processing phnt in the Red Desert The mming operations that are now under, gnung ty. Depadmmt of Environmmtal of Wyommg. With the issucce of a way am on leased hnds using an in-situ federal source materials bcense in May mining process in which a chenucal solu-42
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Qggg George W. Femuson, Jr. Richard R. Pierce Subsidiaries Vice President Asmstant to the Govemmental Affairs Chairman of the Boand Carl Horn, Jr. Steve C. Griffith, Jr. Willian R. Stimart Richard C. Ranson Chaaman of the Board and Vice Pmsident and General Counsel Vice President President Chief Executive Officer M. Thomas Hatley, Jr. Regulatory Affairs Cms nt Land & Timber Corp. William S. Lee Vice President Fred E. West, Jr. W. T. Robertson, Jr. Pmsxient and Rates Vice Premdent Pmsident Chief Operatng Offrer Charbtte Division Mill-Power Supply Company Porter A.Hauser Douglas W. Booth Vre Pmsident and Controller and Westem Fuel Inc. James W. White Executve Vr:e President E. N. Hedgepeth, Jr. Vice Premdent Robert M. Moore William H. Grigg Vice Pmsident General Services Pmsrsent Dstnbution Engineenng, Lewis F. Camp, Jr. Eastover Land Company Senior Vice President Legal and Finance Constmeton and Operations Secretary and Norman Yarborough Associate General Counsel Pmsident John D. Hicks Frank A.JenMn= Eastover Mining Company Senior Vice President Vice Pmsident Richard J. Osborne Pubhc Affairs Transmismon Tmasurer Warren H. Owen Samuel T. Lattimore Robert J. Ash =wwe Senior Vre Pmsident Vice Prddent Asmstant Vice Pmsident Ergineenng and Construction Computer Sennces Finance Admirustration Austin C. Thies John F. Lomax C. Joe Sherrill Senior Vice Pmsident Vice President Assistant Vice Presides.t l Production and Transmission Westem Division Trensmisson-Substation Division Thomas C. Berry Joe S. Major, Jr. E. Bruce Shuler Vice Pmsident Vice Pmsident Asmstant Vice Pmsident Southem Divison Personnel Transmission-Line Division J. Kenneth Clark Joseph G. Mann Carolyn R. Duncan Vice President Vice President Assistant Secretary Corporate Communica' ions Northem Division John C. CW- = Jr. Henry L. Cranford Paul H. Mann, Jr. Assistant Secretary Vice President Vice President Charles A.Markel Dnnsion Operations Operation Asmstant Tmasurer Linwood C. Dall ht B. Moo Norman P. Morrow Vi President Vice ent Assistant Controller Desgn Engheenng Central Division W. Bruce Shannon Donald H. Denton, Jr. William O. Parker, Jr. Assistant Tmasurer Vice President Vice Pmsident Marketing Steam Pmducton Eugene S Robert L. Dick Thomas M. Patrick, Jr. k Vice President Vice Pmsident H. D. Whitley i Eastem Division Assistant Controller Constmetion I Management Changes The fotbwing management changes were Richard J. Osborne was elected made in 1981: Treasurer, Charles A. Markel was elected Assistant Treasurer; and d of o W "" o Car Horn, Jr. as Chairman of Duke Power Company. J. Kenneth Clark was elected Vice (Effective February 1,1982, Douglas W. Booth will succeed lee as PmsidentCorporate Communications; Paul G. Martin succeeded Pmsident. These changes will become ef- Fred E. West, Jr. was ebeted Vre Thomas M. Patrick, Jr. as fective on Apnl 30,1982. President-Charlotte Division; Vice President Eastem Division.) 1 44
X ( Transfer Agents and Registrars for Common Stock Morgan Guaranty Tmd Company of New York 30 West Bmadway New York, NY 1001S North Carolina National Bmk
. P.O. Box 120 Charlotte, NC 28255
/
f 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 'Ihe New York Stock
.f Exchange. 'Ihe tradmg symbol for the stock is DUK.
General Offices 422 South Church Street _ P.O. Box 33189 Charlotte, NC 28242 (704/3734011) SEC Form 10-K and Statistical Supplement Upon wntren request, the Company will provide, without chmge, a copy of its
- 1981 annual repon on Form 10 K as fded with the Secunties and Exchange Commis-
- sion. Also awlable without charge is a Statistical Supplement to the 1981 Arnal Report to Sharehoklers. Requests for such documents should be duected to Sue H.
Cannon, Investor Relations Department, Duke Power Company, P.O. Box 33189, Charlotte, NC 28242. 5 E T 1
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