ML20084C111

Forwards Annual Financial Rept for 1983

ML20084C111
Person / Time
Site:	Limerick
Issue date:	04/23/1984
From:	Bradley E PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC
To:	Harold Denton Office of Nuclear Reactor Regulation
References
NUDOCS 8404270097
Download: ML20084C111 (1)

Text

a PHILADELPHIA ELECTRIC COMPANY 23O1 M ARKET STREET P.O. BOX 8699 PHILADELPHI A. PA.19101 EDW A RD G. B AUER, JR-(215)0414000 m o es a ak counssk EUGENE J. BR ADLEY

..T.......k......'

April 23 1984 DON ALD BLANKEN 3

RUDOLPH A. CHILLEMI E. C. Ml R K H A LL T. H. M AHER CORNELL PAUL AUERBACH ASSISTANT GENE. Ak &OWNSEL EDW A RD J. CU LLF.N J R.

THOM AS H. MILLER, J R.

OR EN E A. McM ENN A assistamT counssk Mr. Harold R. Denton Director Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Re:

Philadelphia Electric Company Limerick Generating Station, Units 1 and 2 Docket Nos. 50-352 and 50-353 (Construction Permit Nos. CPPR-106 and CPPR-107)

Dear Mr. Denton:

Pursuant to Section 50.71(b) of the Commission's Regu-lations, I enclose herewith for filing with the Commission a copy of the 1983 Annual Report of Philadelphia Electric Company.

Very truly yours,

@b EUG E

BRADLEY EJB/as Enc.

8404270097 840423 nDk PDR ADOCK 05000352 V

I PDR 3

s\\

%g

..C"

^

y --y'~

-. &te+.' fQ _Sj.h.*-

]

' '. k. h b. ' '.?. l _ w *. y.

~

• 9..

_ #,[ '

(- h.<->.

3_4h.: ' '

~r eg 5 '

, $ '..' Y [ f,. + s,. (

. M.} :'

3 p w &,. I

.3 N

f r; e ~ s. '.

6.+.,(-

s + ~.:.. ;.. ~.. % -

v-

.;;c

~

s

..h 29..

e v

n L

.e.s

.6-:.

~

MQ j....f'.&y$ ~ K:

7

?

.r

.e

' gggggfg;_ f.gif y,:; '.

~

1[@,y. y.y[;.J',.).:

s y'..y _,

7

.l. _ }-

~ ^'

~~

. 3; q -

S i g. ]..p gjf.'s f. '.,,

' w A.. c A a An==#meper:E qq A

"I;} %

.{..

Il

~

\\,, g

. :.4..

v.

7 e.

g

..Q

1. ....,- y.4

• s v... y e i y ~

e s

.- se W.

.,'.,'g,~ \\ '.

s

,.... c c j

,h t

24.1

, we z

g

.N.,' h Y E y.

.- T y --

s. --. g r

..:) A

~

3

.:{ ';;.

gp _ ;hh ? '

-4 a v...

-" - 9%

% + '. +

gQ R4 ' ' i 4.,.

'.".. ?

u -

r s

r Y

h.

~:

.]

r.:.s...n-

- 4 ~ C.3[

y;.f. e - s }..j..%

hr

. '

• p". *k

%g. - % : '. y '.y jm

.[ " v..,. c'.R. L..... ; :

^ :. - -

q,

&j '. ^

m. %...y y ? 4

.?.:

h.;.' J;.: l {; -

.e.

. 'l,

. :.....9%.i $3. f.

,.g

..s.,.." M. ' 2f g s y.

-s 3 w. f. 9,; ;.,' (. 3.,..y.;_.3.J p. -* q;;.:.t.;'.s.,

J*.

.L

..g 4 3g..

y..

.. ml

,,0

o.. -

. a.,..

,~; ;^,..

,y L,.

r 4

,y..

.k.J :,

[ [.,,,.

.h

r.

.h b

M.

hi[,h

.. ~.... 4 :..

• [.l J.

&A

'.hh.

?

~?

c W

p y...m f{tp u.

., se

's.,

e

.iq &;.. wl I;l? l.l_

l'j.k..A.).

e

..Q:D W ; f),i { 3 jA '

]QM

'l

~

'.lE.

.;is'

^

'...I

~

l

. ) :. :..

/e ' ww;.

.... a u

%r

+...

v..

a.v.

. _,. % ;. f.

. ;r.-

?.

t. k.

y -; :n c {.g. j p.g_. e.+

v <[...... q..

_s.. ;w ;., g - [.L

~3 [( \\s u

?

N' v h,,.M,.;p, c.: ;.~.

N. %

^. ' l yAL f.. -L. w' * :\\.,,

f

-~-

aw..

? x.

~ a,;,n-. - +.

.e.

- s (b;..n,..

W

. u,.

m.,

. :.l.nJ *.k...;:,.. f. g Q >. y

e...

.... 9

T id.

7

, tw.;.,.f.

s.

3.f. +?.

. ? ',.. :

r a:... -

^

t.

/ 4,. ;.,.3 o

.' g, >.."r" n

~

.5gp.4.. ; A e;

-. t..",;g C c.' w.t: *

g..,.; /....,.

r)

e 4

g-

. tv p...

m

' 4'.e..j ;

Q '$.j '

f. t J.*! '. :.'l4

..,j.N!.. <

.g '+ a; ;

,f s w.

7:,.,

g }..;, '.l:

.q','_.'.).-

'I R Th m.c h'M % p l' M. p y.

"'.., ff.& h L

'N

.L..

... M / U.... K.M -

4,'

w#

,.g.?

' k' h

O.v N.' a s'.

~Q

-l -%.

'.. . ; 7, ' 1

.y8 2.g.[

g{-

' :. N

,.N

[

~

)!. '.. -

n

.h '.; ~

., g.E m y, -lf l j :

y

.[

/

-

,.s.

F',tf j.n ' j.h Y[Qi. ?

' ll *

... ;.M;;. n Dr; %

3 e

n

.,'yI.I

• I ]. 3.." s

^

k-7 5 J:S M

-V ; -

m.j:[

'*(

.'. ' i,' y n;

.7

.. g<

.f~ %.., e. L s Q.,',.p. l2.,:

C,...,

NP,6 n,Q.

s,> J.

.s :.t g+.Ps., '

,a

,u.

.i..

=u

.~

w..

y-

. " _ e.y e*

?.

9,.*

e es e.F n-i'h _ ' y

.q

& c ;A..u.;V&. e$'. q gA.; ' 0' f.'

L

.y.

QyE V %, f Ql. k. kO : %.: p',.W[. ' $.h K

1_

. ~

??

. ^:..Nt'..,. O '4 1' ': #

+..~.o g' C

s m

5. %.. M ':'.

C

. J.s #

n %.4 L

,, \\, '..f.

~, -

':e. :,.

j *},.,. 5 :,..

g

.g. ' 7 '}W W

0

,4 (

f

'. J T,[.[ ;;.#"'

\\

h,

..v**

' s

,. j,;,[.

44

".-w t--

.? [.

. g,.

d.N,.

\\*

.ri

N /-.

3 4

v.

.? h

• • 9

.t M'

~

M k.. -);."..r.'_ } ?._.;&

. Q

._..y 4

. g.

.y 3

A'. '-

,I [,.,.,[.

, '*g g,

9.'.

[ -

g

.9-,,-

4 3.

r,,'

• 3' TM * - g 3,j

.o

~

,':.y.

xy

- ~. -

_,,,,, ', :I- '

2 j

F -;O.h,. f'5. S '

% 4,..

MN;

\\

f gg

..,s..,

, " ~

t'

'g g

.*.ce j

a

',q 4;. 9

t

=m f q...f

,,. g 2., A s.-

g' a,

y' gh 8.-

'#k,T j

/

e R.:;~

~,j)

' G W ' J.; ; 9t.

&g!.

~

'J A

q e 4$

'. j,%

s-

-n-j ' '\\ -

3%,

.A p l

?

N.,

,1 f - -

J, ; d.

~

('

'. f..

.- 4

{,-

' ' ?.%

y g' %p :{.l.

,~

=. s h

( x' }

1;

' 'S l

(,.

~;

_l f./

O,

~

/"y g

h ' ~

(

_; l h

sr -

'h'.

?

6_- ',

• r

'Y 7*

s

,y f k'Y

-.. '. h.- c 1.Eh 2 ',

.1, M Y k. 'hz { \\ l [,;

• 22 M~

' q T, A. 'b T %~ ',y .. y e p l- , i- _ D. -f.,. 5 .,.;.g a . x, m.. v _ _.f 'J wh ;. ' A 's. t.g f .e a. ~ ~. y,. g .) Yl,

I l l l l l g b,. Ni,%- g d h..y,9" d i, a _. -ll,... gw ~ t ;% y '-Q r -3,, 4i@_ ;Q -tz;.g;;p3::bg . _.. ;;::;g., .:::".jprj} 4;ipyi; g 7. C * .jigjj{j,.:::,..: Ame,g c ~ .4 e,! TE aI!!dWli.g6MdfU NL " M T

%. a " :..-..;%"f'-)"+.~1

,:(*,{ og ~ -..5];,8~' ~ .[ M" g -m== x.,,"h,.:w .g j.__. '~ ~- (g.p -~ 4 I-3 gE[. C {as

• :. /

4 W i, 4.'hgL 3 )M, -s up' / 3-7 4l { l p +j . q-g\\ m n ? wm .li 4 it</ f E n. s.,, o c r, l . a !. a lpg /' o&g yu t ) l ik,, f ,f a. 6

, a (8

7 'j-ll' ll ll iy- .5 h h / r/ - i

Philactelphia Electric Cornpany Annual Report 1983 Financialliighlights 1983 1982 Change Operating Revenue $2,596,050,000 $2,644,753,000 (2%) Operating Expenses $2,202,343,000 $2,256,026,000 (2%) Taxes Charged to Operations $ 378,641,000 $ 372.180,000 2% j Operating Income $ 393,707.000 $ 388,727,000 1% Earnings Applicable to Common Stock $ 321,705,000 $ 278.623,000 15% Earning,per Average Common Share $2.40 $2.39 j Cash Dividends Paid per Common Share $ 2.12 $2.36 3% i Average Shares of Common Stock Outstanding 133,852,000 116,480,000 15% 1 Construction Expenditures $1,040,428,000 $ 883,898,000 18% j Total Assets $8,143,795,000 $7,029,269,000 16% Contents letter to Shareholders 2 Report of 1983 Operations 5 Managementh Discuwion and Analysis of financial Condition and Results of Operations 21 Accountants' Report 22 Conmlidated l'inancial Staternents 23 Notes to Fittancial Statements 27 linancial and Operating Statistics 36 Shareholder Information 40 Officers and Directors 41 Farnings and Dividends pec Share Construction Expenditures ik,llars Millkm Dullars 2 40 3,000 2 00 ' 1 60 ~ 600 ~ 8 20 400 ~ MU r 200 ~ '9 NO 81 82 83 79 HG Al R2 83 M Earnm, per se,- M rarern. sinarco M thvkfends Prr Share M faternalSources m. 1 s, w

b I. m In spite of several disappointments.1983 was a year of progress. We To Our Shareholders; low some of the highlights and invite you to read the balance of this Annua! Report for additional details y

• Earnings were $2.40 per share up one cent from last year. Lower 2

wholesale sales from Salem Unit No. 2, which experienced long a outages during the year, prevented more substan tal ctrnings growth. ~F

• Electric sales to retail customen increased 4% assiste.1 by hot 3

i summer weather and the ect nomic recovery. Service reliability to our customers remained at a near perfect level of 99.988% h

• The Company established a new incentive electric rate for man-

[- ufacturing customers, providing lower electric rates in exchange 9 for increased employment and additional investment in facilities. g [ At year-end, 36 customers had taken advantage of this rate and i had added about 3,000 jobs in our service area. l g

s"

-4 . r -Q fh:,h -k ? The Company received an electric rate increase in November 7 'i$N:

• T. 5 ' i-from the Pennsyhania Public Utility Commission (PUC), esti-h-

mated to add $144 million of annual revenue. The Company had

i. c

.xgqp frh]

$y, ;,

g,.[$.l/j;,[ requested $228 million. 4 f..;. 9 k g.3

4g..,y::.7jf.r-.,Q

• The construction of Limerick Unit No. I remained on schedule

. o. u N '.. ' ',i gl i M* %:?$h[ N...fls.:- '], for commercial operation in April,1985.

f * ' +p? %.f.,. g]/.4.y n..:t.

m p ge,..c.

• Construction of Limerick Unit No. 2 remained suspended, await-4l:

L. ,4.' 5;-$Q. 1 i ing PUC action on the Company's petition to resume construction. gi ( R..?f... < h.3, -_ h. v.

.p, * ;yf

.X, q;.+ *6 The Company believes that Limerick Unit No. 2 is needed for s ? ,,e g' James L Ewrett d: 1E1; ,3' x M I 2 t w

l l [ capacity and is the most economic generation available. On Janu-ary 24,1984, the Company responded to the PUC's latest Order and proposed to suspend construction of Unit No. 2 until Unit No.1 is in commercial operation. Work continued on the Point Pleasant water pumping facilities in Bucks County which are planned to supply water to 1.imerick, as well as to communities in Bucks and Montgomery Counties, de-spite strong local political opposition to the project. The flue gas scrubbing systems that remove more than 90% of the sulfur dioxide from stack gases at the Company's only coal-burning stations, Eddystone and Cromby, operated successfully in 1983. These systems allow the Company to continue to burn coal while meeting stringen r quality regulations. The Company spent $1.0 billion on construction during the year. Approximately $800 million of these funds came from the sale of new securities and long-term bank borrowings and the balance m. from internal sources. \\ o The quarterly dividend rate on common stock was increased by 2 cents to 55 cents, or $2.20 per share on an annual basis, to be effective March 30,1984. The Company is proud of its 10,500 employees who serve so well and is grateful for the support of its shareholders, which now number \\ over 300,000. Tbur Directors and Management look forward to the g future with confidence. John H. Austin,Jr. James L Everett Chairman of the B'oard and ChiefExecutive ODicer e John II. Austin,Jr. President and ChiefOperating Oficer 3

New Hotels l'hsladelphtajeatures a num her ofjone, ns a hotels the 450 rumm flershe) l'htla delphia flotel openect in IUM 3

.y at rou from the.Autdem) of g,

, _t + %F

-;?>1'

' M. w + Muhlt a s-e Kw' w'[, A c +ff o[d ( 4 fs.;' d.;V' -. yt& p yp I .u. 15 '.12.-s'.6,,A y.3., J E - $ i.f ' l'k, j s I. ,,1. ,~ es i + 4

Earnings improve share of the output of Salem Unit No. 2 Earnings per share in 1983 amounted toJersey Central Power & Light Com-to $2 A0 per share, one cent per share pany. This jointly-owned unit, which is atmve the 1982 Icvel. Total common operated by Public Service Electric and stock earnings were $322 million,15% Gas Co. of NewJersey, was shut down above last year w hile the number of for an extended refueling and mainte-average shares outstanding also rose nance outage during 1983. It ts expected 15% Div'dends paid on the common to return to service in early 198 6. stock amounted to $212 a share,100% Electric sales, excluding sales to of which were not taxable for federal in. Jersey Central, increased 4% to 27.2 bil-l come tax purposes. In addition,93% of lion kilowatthours due to higher aver-preferred stock dividends paid in 1983 age residential usage, one of the hottest were not taxabic. summers on record and increased busi-lower w holesale sales of Salem ness activity. This encouraging result Unit No. 2 output penalized earnings by represented the first year-to-year gain in approximately 37 cents per share com-retail electric sales in four years. pared with 1982. This was offset by Gas sales declined 6% to 65 bil-higher electric sales to retail customers lion cubic feet due to milder weather and by the full years effect of rate in-during the heating season and lower creases granted in 1982. sales to commercial and industrial cus-tomers. Steam sales decreased 10% to Dividend Increased 4.6 billion pound 3. On January 23,1984, the Board of Di-rectors voted to increase the quarterly Revenue, Expenses Decline common stock dividend from 53 to 55 Total operating revenue amounted to cents per share effective with the first $2.596 billion, a 2% decrease from quarter payment ir March,1984. 1982 IcVels. This $ 19 million decline was due to $105 million less electric Sales Results Mixed revenue from sales of output of Salem Total electric sales decreased by 7% to Unit No. 2 toJersey Central and lower 27.6 billion kilowarthours primarily fuel adjustment revenue, which was par-due to lower sales of the Company's tially otSet by rate increases and higher Muddy Run f<-_ m.. l 'i ^~ The Company lus afire. year .,..g y planf>r improving recrea. .i, tion along the Susquelunna '-~ Riverin the Conowingo, y 1%ach flottom and Muddy c ' - - t [~ _. l %*. Run areas Fishing, boating e ? and camping are but afew y ofthe many activities as all-1- able to visitors at Muddy Run m.v - Recreation Park. After M w years ofoperation, theprst major overbaulofMuddy Run generating units seas completed inJune,1983 5

= = Grays 1% Capacitors Electrt< Met hantc Joseph liarmer an>pe.ts the neu h snstalled htgh t oltage eapact tors at the Grays I:erry sub-station The neu eapactrors encrease the capabsitty to um-port lou cost energyfrom the u est = electric revenue from service territory 1983 Financing Prograrn = sales Gas revenue climbed $2" million The Company raised $1.01' bilhon in and steam revenue declined $2 million. new capital and bank borrowings durmg Operating and maintenance ex-1983 to fund ongomg construction pro-penses befort depreciation and taxes jects and deferred fuel costs and to re-were down 5% to $1.658 billion. pri-fund maturing securities The balance of marily due to lower fuel expenses the funds required came fram internal charged to operations. At year-end $;49 cash sources - chiefly depreciation, re-million of fuel expenses had been de-tained earnings and deferred taxes The ferred pending recovery in customers' Company's financings for the year are + rates shown on the table at right. Operatmg and maintenance ex-penses, excludmg nucl. were up to t Shareholder Accounting due to higher maintenance costs at nu Improvunents clear plants operatmg and maintenance in Niarch, the Company installed a new costs associated with the new sulfur di-shareholder accounting system in which oxide removal equipment at the coal-shareholder records are maintained on a burnmg stations. increased labor costs new online computer system. Toll-free and expenditures for materials and telephone lines were installed in the supplies stock Transfer Section as a convenience to shart holders who have questions Construction Expenditures about their accounts. The new state-of-Investment in new plant and equipment the-art computer system enables the amounted to a record $1.04 billion in Company to improve its record of 1983. with $'10 million or 68% spent providing shareholders with prompt on Limerick and related transmission fa-service and timely. informative reports cilities Outlays for 1984 are expected on Philadelphia Electric shareholdings to be reduced to $85' million as a re-solt of the wind down of activities on Rate Increases Limerick Unit No.1. A $143 5 million electric rate increase v55 4 'bhl u h. .I p% y.U g yQ,Ysy - @Q .mJ Cmmby $ctubbers 4

,[,,.' fs,.'&h * ~

3 Plant Operator Rethard Dg-y:;a*.: C W.e .x r : nons contrris operations at Qin &.)-;;y

7. 1 theflue gas st rubbung plant f?_

l-E of the Cromby coal-fired

' -.

%ih -) R

untts The scrubbing plant Q:. ~ successfully completed itsfirst

• y-l~

X year ofoperatton un 1983 O r-

1983 MAJOR FIN ANCING% %,nr t, %,ns. it I;,iilars F e b. 1)cpimtary Preferred 5 tax k - l 2 H0'6. ' 500 000 shares QD $ 10 $ '5 0 Mar. ( ommon stix k - 6 000 000 shares (<0 $ 1' 40. _ _ _ 104 4 Retail E frans/sm Junc Niortgage Ikinds - 14 % + series duc 2014 125 0 lhe ; ou rI a t A..g of l'rn ssia $cpt. Pollunon ( ontrol Resenue Ikinds (variabic tax exempt GD 5 2 5 H 4 ) 50 0 features man; fine s to r e s Oc t. ( ommon sun k - 5 000 000 shares GD $ l' 4'S M6 9 pimtary Preferred st x k - I.4 4 5 * ' 500 000 shares 40 $ 10 'S O m. sut h as /ilnorning.lal. s Ihr (.ommon sunk Pur( hase Plans Lourt u hst h openvelin l')MI I)ividend Retnvestment I mployce. I RAsOP - 6 044.000 shares 9H 4 a<ip,in s the King of l'ru nga gugggy,g $6i4 6 l'/aza anc/ toyerner then for m Ilank ikirrowings 402H one of the largest r etailing Total $ I.0l' 4 t omple t es in the u nrial V a +

w 9e

"[ k" . - 1m S f-d) Wl y.y k"i M g r - (i;y Q, b'r L %. y r,- i. l . l l 7

\\, WP-q ( i [+-. -\\ . [A...; o $N ~'

} '

g we .Y t-e- -:N .[ !/) ) 4f-w.

'A

gllfgg.e. t z 's r I ,'9h -" $ ll': ? ',i __ i c-A _'!h ^ Fine Dining Excellent restaurants abound in 1%:ladelphsa and the surrounding suburbs Chef Georges Perrser of Le Bec Fin duplays some tempting selectionsfrom his dessert cart 8

rE l =- approved by the Pennsylvania Public struction contractor, will relinquish h F Utility Commission (PUC) effective control of these systems and compo- =- l November 23 was 63% of the $228.2 nents to the Company. The initial test 7 million originally requested in Febru-program consists of pre-operational test- ? ary,1983. With this increase, the PUC ing, fuel loading and step-by-step power E y established a 16.15% return allowance generation testing to full capacity. The E for common stock shareholders' Company's start-up schedule calls for 3 investment. fu(1 hjading of Unit No. I by August,1984 2 In a(fditien, the Company and commercial operation by April, y lowered its r!cotric Energy Cost Rate 1985. The entire start-up and commer-i~ (ECR) by approximately one-half cent rial operation schedule is contingent i per kilowarthour effective April I,1983 upon timely licensing by the Nuclear = due to expected lower fuel costs. This Regulatory Commission which has re-7 was the third ECR reduction since Slay ported potential licensing delays. L L 1,1982 and it reduced customers' bills Work on Unit No. 2 remained in a by approximately $137 million per year. suspended status pending resolution of r The ECR recovers the actual cost of fuel the Pennsylvania PUC's August,1982 [ without profit. This reduction did not Order w hich directed the Company to E affect the Company's carnings. cither cancel Unit No. 2 or suspend its The Company's retail rate in-construction until Unit No. I was com. crease activity during 1983 is sum-plete. The Company had appealed that marized in the table below. Order but on Alay 27,1983, the Penn-r sylvania Supreme Court upheld the Limerick Generating Station authority of the PCC to deny the regis-During 1983, con 3truction work on tration of any new Securities Certificates { Limerick Unit No. I continued at a rapid that wouL1 provide funds for con-pace. As of December 31,1983, Unit struction of Unit No. 2, pending com-B No. I and total common plant were ap-pletion of Unit No.1. proximately 91% complete and the On July 21,1983, the Company Company 5 investment amounted to $1.8 notified the PUC of its election to re. p billion for Unit No. I and $327 million sume construction of Unit No. 2 in early for the common plant. 1984 as comparable construction tasks { As the systems and components are completed on Unit No.1. At the [ of Limerick Unit No. I near completion, same time, the Company fi!cd a Se-g Bechtd Power Corporation, the con-curities Certificate with the PUC to seek 1 E-Wansportation Center ^ The Companyk high sers-ice _, ;,it [. ^ ' .I ; hL$ ~,A" h ' R 4 @ '.L$ l;. l f 'f( ' R '] reliability record depends in [ g [ it-g ?_$ l ' : g., gpart on a a eli main- _ i c jf.31^ ,f' ?[ l ' tained] leet oftthicles to ^ _ 3:l^? lu

l. *,

L; ^ __l transpurt and assist Cont. '~ 5 t ys $:* YQ.: _ s. *f p.l,5 pany emf'loyees. Shou n bere = f -f~T' ~. ~ ? \\.4 ' ~ .l ls the modern and eficient y _..[. ;

_. y -

'h. W* ^ l'rcnsportation Centerin ~ 1983 RETAIL RATE INCREASES t-Mdlions of DnIL-ru Application Date fittttive Dase Annual llevenue Electrie - Pennsylvania 2/23/H3 11/23/H3 $ 143.5 { Electrie - Maryland 1I/3/82 2/I/83_ 2.5 [ Gas 7/29/H3 Pending 40.7 Steam 7/29/H2 4/29/H3 4.9 b Steam 7/29/H3 I/I/H4 2.6 I y E 9 k m 5

M Commuter Tunnel _7f. F2R2 y Aft, r p.to, < a n e<<n r strue to n the 1 W ontto r, ^: / / rute,$ s ta ', t asi < r ,2 c ente r e n ', c 1m m u, r 1:o. p<. r, \\ n a, r, o J. r nel 16 a s, rs n nail\\ nijw to J um, n i r +, v. a n g, . ri r +. is i m;+ a n, r.i n,l 1, r on, in I'm 1 l 'a, A expn it d t, he gtn in e a r! > Retran*, h e.h i t k: oah s ,: y u ar pu t o, l<m olookony in< jr, evo8 ,, e i o,

s..a

...3 Q wparata n tr ~f tras 6 .a, 3 g _'4, I'l tla r (+ < a < k< l, o 7 glu o, of the f. a m e r l'e n n n i w ntain : las Imo r a> I arlia k<tilr e aail 14 ble b ?e etl t r I < /i n n Ith ,jn r itt e e rs sr* * > su hto ha rt s ta tio n ana i s < il(mu n .sn ma ria ge r ^y K th< ou ofthe for mer Headtny I rik inda n r, righ

• and

s

..,;f NtillYt oasl n hi s b {t 't 's $ I n t. n'ul_yf rie,r( l hirst % h elble o' TT) %3 Neadtng ico minal t ief t ) t -. -. ll / % { _..?' p,-.A ' ). m ~ 3, / q:g n_ e f.. DN j '_ h .f g- ,l ~ w&,.s + -n-

s.

4: en /;.j, d' ). g '-.As Y si b iti: -

• sM-

? kf . -? + fg% ,u. 40 7 10

approval for a $1 1 billion rewiving In January 1981 the Bucks credit / term loan agreement to bc (.ounty Commissioners app <nnted three prouded by a wnsortium of map >r NWRA board members (a map 3rity) who banks which would prmide the re-hase declared their opposition to the quartd debt funds to contmue work on project in February.19H 1. the NWRA the entire proic(t until l' nit No I n in ordered the wntractor to stop work on rate base she proicct and the Company began legal On Dec ember 16.1983. the Pt C action to hase construction resumed reJccred the Company's response and Other components of the supple clarified its previous ()rder to dt fim mentar) un>liiig water ssstem are also f e completion of l'mt No I as placing the the subrect of legal proceedings umt m commercial operation. preclud

1. '.j N mg a resumption of I nit No 2 con-Commercial Operations 3.

, il .r struction until cark 1985 The The hot summer, the improvmg econ-f . g Q,j 3 Com pant was gisen another 120 days omy and increased average residential .1 to respond usage had beneficial effects on electric g On January 21.198 ! the (:om-sales to regular customers in 1983 Total pany responded to the Pt C requestmg electric sales. excluding sales toJersey that it approve the Company's electmn Central. mcrea3rd 1% to 2' 2 h:llion ,q u,y _. to suspend construction of l' nit No 2 kilowatthours Electric residential sales f3,,u,ypa, g until l' nit No 1 is in commercial opera rose H% and clect ic house heating sales nung hand held mit ro tion l'nder the Compans % schedule for mcreased 6% increased busmess ac-pn uunn for data e oller tion l' nit No I this will dela) completion of tivity helped both small and large com. Unit No 2 f rom late 1988 to April. mercial and industrial sales which """E""' 1990. w hich will mcrease the project's increased tw i% and 2V respectively """ ' #"" ' "" " "# 'h' " "d /"' cost by about $650 milhon Neverthe-During 1983. H.500 living umts " " " "" hl" P"P" d"' " """ less. completion of the unit is necessary were built in the Company's service ter-7 hr"' "'" de' 't e t ' "lled ., j Q. to supply future energy needs and is the ritory, an increase of 3'% over 1982. Portable Data u orders. most cwnomical means of doing so As Company services were used for space u en detti rwd and tested an '1-of December 31.1983 the Company's heating in H4% of these units - 64% thefourth quarter of Ivm investment in I'mt No 2 amounted to electric heat of which one-half were andjw/,,npfe,yynfaf,on,, $60' milhon. equipped with heat pumps, and 20% apn ted during vm y gas. In the commercial market 63% of Point Pleasant Construction the floor space added was heated elec. Construction began in January.1983 on trically.15% by gas. the Point Pleasant Water Supply System in an effort to encourage firms b which has been planned to be con-and businesses to locate and remain in structed and operated by Bucks County our service area. Company representa-and by the Neshaminy Water Resources tives maintain close contact with com-E. Authority (NWRA), a municipal au-mercial and industrial customers in thority created by Bucks County, under 1983, the Area Development Depart-a contract among the Company, NWRA ment helped 90 industrial and coramer-and Bucks County. Ihe Point Pleasant fa-cial firms to locate or expand in the cilities are doigned to supply water Company's territory. These firms oc-from the Delaware River for public use cupied 1.3 million square feet of new and also for supplementary cooling space and 3 9 million square feet of ex-water for Limerick during periods of isting, unoccupied buildings and low river flow on the Schuylkill River. provided 9.700 jobs. Excavation for the pumphouse The Employment and Economic ns completed and the initial pour of Recovery Rider was estaelished on July I concrete began in October. At year-end, to stimulate economic gromh This construction of the pumphouse was rate allows new large industrial custom-20% complete. ers, as well as existing ones who add 11

s. ungaruwyxzsiumsmunammanunummswaar,immu'assunamar-arnsw-emplo)ces or make au msestment m was opencd during 198 4 and along plant facilnics to rc(cis c up to a one witti as forerunner (, allen I. (omprisc (ent per kilowatthour rate reducuon on a 1 ~ milhon square foot. 2 40-store their mcreased kilowatthour usage lhe complex It is the largest urban shop maximum redutnon will apply through pmg (cnter m the nation \\1orethan 198~ and gradualk uill phase out bs $~s0 nulhon has been spent in trans-1991 At s car-end % participalmg m tornung this,m a know n as \\larket dustrial customers hase emp!oyed an ad street East. mto a liscly retail center ditional 4.000 people and made an ' twenty tour minority entrepre addnional investment m plant f acibucs neurs base set up shop in the newly of more than $2 million opened Gallen 11 It is one of the high A "high tech ' corndor i de est percentages of minority participation seloping along Route 202 and the of any maior retail development m Pennsylvania l'urnpike m ( hester and the country N1ontgomen Counrics w hich promiscs I he economy within our senice to enhance the growth potential of the area n begmning an upturn aad the Co pany s scrme territory The nu-('ompans is working with all (ustomers -- Media rampaign 'U~""~'"'"0""" ~ ' ' ~ "~"*"~Y'"" "U#'"' A ru-n <rn ~t<,o pora t, oa scarch and development. medical. The Company n also comnutted dir > a n<l te in i i sl< 'n run ua ya clectronic. and other high technology to providing its customers with both the be ga n m la ts h n.he r I b. firms 50mc of these prestigious com-highest quality of service and completc t a mpawn a t.h. u th top panics include llurroughs Corporation and reliabic information on energy con-a s o/ cn. > o < om, o arm" (:ommodore liusiness \\ tat tune. General scnanon in addition to prusidmg a rc /w m, . ner e an, hts, i, i w Electnc. and Shared \\1cdical systems liabic product at the lowest posuble t al salcn a,, i n hat, me"m Corporanon cost. the Company provides information en s/on /d do m th<, i. "I '/ Philadelphia also is experient mg on how to best use energs to meet cus-

.. a pnu er outaxe a resitali/ation within its center city tomer needs area In addioon to extensive restoration Each customer is treated as an im.

and moderni/ation of existmg build-portant individual for example. Phila- -)QiU.i c., ings. a great deal of new construcnon delpina Electric Company imtiated the i9 . g, is underway in the city 5everal major "PE CARE 5" program to help senior cit- , # g.,. w.}[. sites providing additional office space i/ ens and persons receiving dnability or T

• i I include the first portion of twin. all-survivor benefits Employces were spc-(...

[ f.4. $ clectric buildings at 1800 Kenned) llou-cifically trained to provide customers

3..h. g- ) ~ )Y [,

2 levard with 20 f .>rs and a.42-story with valuable mformation regarding .f ; f. '. fc building known as One Readmg Center. programs available within our Company 5 ,;... 1 i -.. , - 4 located at i t'h and N1arket 5treets. with and from other outside social service u..,.. 'n- ~V 720,000 square feet of space Gallery II assistance agencies To date. 25.000 v

,... va,

'I 'h 1',. 4 ; 4

9.. - 7 7 - _ 2,

,e. e.-i :p .,h + -, c . '.~~ j* ^ '.,.,3 ht E ,1. !I g-y.. ^y,. .s r ~ w: ~ e W. .. ".. ;y. % 'g V^.. .~r .Q <,,,.

. W.0k Y.-

f c f;;- ' ~ 2.,y. &, s..: w. p,. g. 3..,4.. .y w, ,t g.. e< .-4,,9,.. + _y. mums ii. 12

/ P i t'.' M Q.'WI.i j M jr$ j.. h -( ' h9A c --. ' Q,'4 f^ t ,p, . y +.. -. ~... T, t - - V, 8, ~. % F.,,e 9 2,. s.

• L-

=t- %,.[,I M +j,.g.( g g k u..t ; d)h.f. [ '-,i, j% . ' ',. i.f. /,. N &- [, t hhA * [.l }) M. " f(-M, .m w e -y L:; a +.. ,' L.. _ s i 4* f ' v,;, ) < - -,% 7.:J m,, % ~d ~ ? m I .at Q o i . s t h.'g. 3 hn,. + ,r. '.- ne e 3 / 9 7 O; i us a. l, -) M) Q Q% i. m. 4 ",1 -- / d [6 '.y M *~5-MQ 4 6i <u- ? _.. 4 7 4 / .I.'.. igyp, ".c .g F.: L

{^

(I'; - - -. < ,/,. .s 6. y[y J. '[,. 4, ,;W;. i,' .,14 NP. k = '... ' w. y". .'..d n 3 s 4-g., :s ..g e..... a .o h.ph-S R.. %n ~. - 2p'( "[. r4 '. y.- p'. k ( e, ~

g.s V,

4

.p %.- ,7 t a . -. c.,g g ..R,J.A; h ) , a

• yi.. ~

f ' ;.y m e,/. ) h,., m-s b 3.]f jy. $. k. h [.' ..} i.:l'.; _ : F,.,. t; ;f. V.. lL + h.4 ' - A._ H-i -- i Y.. l7 h ,.'Y ? $. .,v g e . y. c,.<-sg,. n, n w : + ,+...; e '., i\\' * - ! Y k _ .,s gA. ..n,% '* il, 1, ~ %'u k r;,- % y W L J. '. .s ;

• 1,g t.h -

i,- ,( ..f-t ? y # ', ' $ A., - > 1: - p i +.. .~ 7 4,w, g,.

• ('

.. '4.f ?- .a W .h'~ r? 3 c. 4.p y%..#.,.?,4,#; %.;,p. ' 3)') b p. g~ i-r h ;

..W, Q, g'.:{ ? :

Q-4v rs'~

~: 5,i 3, ? # l

: ? :..J,

), l ' % W f. a. ' i M,.. c'_.A' ! :Ml4..$. ' ?.' ' l %" W.-

h. y

,. 3 .. :".1 1 M 9 s.s, ,.( ,. "y".. '~ s*- ' /. y, 4f-V' [' $. - ,,,, - ;g..,g . 4y,%.'n ~ ~

-,sv.

o-tl +,. 4. ' .p..- . gc < g- ~ ..q'.t 4p ,( o m ^

v.. Q' n. 7 '.h.3 p

..r . + s,., aM.. ~ >. .. '.,..f - tg & ' ,9 .C.- r v u v c a s .r ..., ;i 4. e... ,f p: 1f, g' hjh (.,', _5 s p}g $.

• f '

' 4 R -.4(,~;.M-- en - %. <., %., 4 f,.WP,y.b.p..,'x3 u ' :,,.3,. % ' +.,,,7.y, r +.. ~.n } $_ y n.3[,y,[4g jfA.h, d,., ? p- 's y? -l. h.f,, y y y. y n

.l,,:

,[-b 1 J. 7.&U, wy;r f L %,' '. .;s ' ? ;, '.;.):;.y z. w. ,, Q T y " p g ;;o a ' [ R h l y g y.< t y,. T y h ee. v c - i ~ / t. V.,'.. ,t:.? n Y l l-l ' !.% l. ]q, a jo { A.# .Q ,,.,Q ' g A,, j g} ' ) g?f :, 3 .r $,;.W+Q,W,,.. v ~ ~ a. (.. Q...,.i. m$}.. - ll, -q, ; ..., ;.&. ) * [, _\\. ...s &,.~ 1 k, %,r. l !&.. aD N. ? k Y r k,,,, 3_? \\ I c. L. 4 s. .< # nac s 3 .s 4

.c v,,.i = p.7..y

- 'r 4,.. s... y m., s' 3,., '.{, :r / 'k k [) ',fa ' ' 4,, +. .w l e +. w r. a y. ' y G ",u 'y 7 ', a ? pY.g 1 e f lc, g., p f f., $.:;. ' v.))4+-[.f[. Q9 -l-QQ-p(p Q[M 'O.6.1(RL l..? e ?% Y y. 1%[ .. c- (( 'i .&., s, d- ' 'G - Q. >(- k:l,

6

,. ;,y } $p,w^ Q?'t a y.k,g,i yG %g, #..y ',[.%:.:, y)vgy. Q-egy,_ y y '. q, j.3t *Q p

4 k;..Q, _ c y,..

.3, B

9,5, :.. f. k..-&

,h, b. $. ?

N$ .q ?.. ? b. '.

• i ( 1. 4. y.

N 49 n "g, l.- a ~R- >v

G,.'p9.%'g..+.

.s c y.' 3 hu.. j, ) %w.x ' s 3 g. Q... ' ~,* h..x q..f; Fy}, ' T 4: ',,.(cf..C,r 5.4 x #s . +,, - l3 r

;a

't, ,.4 O-y? p, j' %,

n. <;

• +'

y s a.. 7 _,,, ws

y

.L.- ~. ,.,;,_- s_l 4,n,,, - a [j i,, - '. .[q"d Y,.' h h,' O., N. e? f 47. } E, 7; i g, y,, 5., y.4.)aj, e g. 1 . J A '. g . ;.rp j.,

'k h $ j %[4.

}' -i 1. 4 4 4.w.1 ~ ) y*.: ) - y~. - s 't.. .... s 4 4.

., ^, %

/ 5.T y

,, 5 a.A 4 o = @: n ,c s .Sr. '...=r;&'N j% *~r-f ',..':., 2 f. : '.. Ts. n;, J ?.,. [y 'e. s .,i 1 .T .2

W W +. ' u -

'- " p%,T s. ? - .t* . y ,f m o.; ~i g j $.'.,, g - r a y - .. e...*: s.; , q,- y,, e9 y., n y. ,....t s,. ..e,

.e :

.e s g;.. o 3 py w 9.. 2 - .[3 l, 3h b,,., f h; - 5 1,', ' h'- ]'i =c + {,-,- i ~ f. in > y m. ;;.

-4

s. r. +- r.,

e1 . ;; - _ q%,# y.pf.7 y, y~.. > ,c _n < s :y,. + s y:; f..,.,..-;?,'] h.h h.. % L L;..:-[ ? k. g r'. 4 ' %g.,.); .y g.,.y ; ' W. 21 l,. 2 y s g.' y. 9.~. t \\ s n.g.[ i.. ..; 3, a.- .JR, N ;q ,g j ;, 7 . l ; m. .\\..).) a h. ;. W /.'.,.. ~** h.

~ customers have enrolled in this 219.000 customers during the summer E program Aggravating these extreme The Company conducted 3,300 weather situations were the longer than-home energy conservation audits for anticipated outages of our nuclear units customers during 1983. bringing the When Peach 130ttom Unit No 3 was shut cumulative total to 12.000 since the down for scheduled refueling in Febru-program was started in 1981 The audits ary,1983, weld cracks caused by stress consist of a complete survey of the corrosion were found in the stainless home and an analysis of the energy steel piping connected to tbc reactor usage,avings from recommended con-vessel l' nit No 2 was voluntarily taken se.,unn measures In addition. more out of service in July to inspect its than 1.200 inquiries have been received welds, and similar cracks were found __g$[_ from residential customers for informa. A total of 35 weld cracks were tem-tion concerning appliances. for space porarily repaired over a 39-week period ( heating and air conditioning informa-using a weld overlay technique t' nit i"" h tion and operating costs. and for energy No 3 was returned to service on Octo-conservation assistance Energy con-ber 15 and Unit No. 2 on December 3 servation training programs are con. The permanent repair of the piping will ducted for residential. commercial and be undertaken during the next sched-industrial customers. including special uled refueling outages for the units community-based programs for low in-which are set for early 1984 (Umt No come customers

2) and for 1985 (Unit No. 3)

Despite these major difficulties Electric Operations facing the Company during 1983, the 1983 was a year of many challenges for Company's custorners experienced no electric operations The summer of major disruptions to their service. There 1983 produced record-breaking tem-were no " brownouts" or voltage reduc-peratures evidenced by 41 days of above tions and the Company maintained its 90 degree temperatures As a result, near perfect record of reliable service total electric kilowatthour usage ex-with a service availability of 99 988% cceded 1982 levels by 11% during the This index is the ratio of the r. umber of three-month period of July through Sep-customer-hours that service is available tember A new one-hour electric peak compared to the total customer hours in demand (on a weather-adjusted basis) a year and is used by PE and the electric was estabi' hed on September 6th In utility industry as a measure of crvice addition to experiencing one of the hot-reliability. test summers on record, three major This high level of performance storms interrupted electric service to can be traced to two basic factors First, 14

w a= =

• y" ggggggEEEEEEE E_"_*.

esp #* pseff' fr f

I'

.W l{

'y? p. ._ s R hht ? ~ x$, 8 >f(, i+ - z 'y,- ~,% .e c,. f.%,* q p --,.' i, pi ' -s m .s I/ h .k,yjfg:5,.',^ 2gjl 4 '[d .s -. 8 yHMJ 4.g.., f. ;". -x kp. g Sfmrts Complex The sports c<nmplex tre 8outh l'htladelphsa features t' t e erans stadium home of the l' hollies and Eagles the 8per trum home of the '6ers and the Flyers andfolm F Ken ned) stadiu m forfootball games and other 9, ctal et ents oppostte page home of1%:la delphsa 5 sports heroes -- tleft to rsght) Stet e Carlton of the Phtlites, llobby Clarke of the l!)ers, Welbert.stantgomery of the Eagles, and Dr J, Julius E vang, of the 76ers 15

I .4 l5 Waarsqformer losstallatism Forst Class ionemen fames \\l tet hec ileff l a nd.Alberl _ Ibulton I right 9 prepare a H _ kVpadmount transformer to su;> ply underground eier trtc _ serske to a neu ressdentsal _ devel<pment 16

. -3 hj c'f l. N the Company has sufficient reserve ca-mental Resources

. S m E' Q-.,/

" ? v pacity to absorb the temporary low or in this process. sulfur dioxide is .. [? s ~h) f outage of a sigmfkant portion of its removed from the Hur gas by a chemi-l [ . I y generating capacity without adversely cal reaction with magnesium oxide The hhh],#8.Y ~ ^ lN[. 7 affecting the supply of energy to its cus resultant magnesium sulhte is shipped ,I N tome rs To augment this reserve capac-to one of the Company's two magneuum ity the Company has over the years oxide regeneranon fauhtics w here n is entered mto agreements for the pur regenerated to produce sulfur d; oxide (hase of power from other systems and, for sale for the manufacture of sulfuric ~

• durmg 1983, PL cxpanded these ar-acid and magnesium oxide for reuse m rangements Over 12 billion kilo-the wrubber process The capital cost watthours of economical power was for the scrubber. regeneration facihties purchased by the Company m 1983 rep-and waste water t:catment facihtics to-resentmg i1% of total output and the taled almost $ 400 milhon savmgs to PL customer amounted to ap proximatcly $2 4o million Gas Operations Sc(ondly the (.ompany s high The Company added more than 3.800 lesci of performance is mamtamed by new gas customers during 19H 4. bring an able and Hexible body of transmis.

ing the total to over 300.000 c ustomers sion and distribution emplo)ces w ho (herall gas sales were down 61 to 6s 6as Sm1ce are (alled into action during major bilhon cubic feet due to milder w mter < Wr c i r,as wrr n n, s storms Three hundred linemen. plus weather. conservation. and lower com-t,,nt../ t a non rnia ntud the net cwary support personnel were mercial and mdustrial sales , o m,y n,,f, near wy foy n moved mto the affected areas to restore in 198 4. the Company instituted a o lm r r har/n linn/ap wnice promptly durmg the wmmer a new gas rate called Temperature Con-g,g j_ gg storms of 1983 A.s a part of mamtaming trolled service (TCS) that provides for a hn ( rallayhcr and 1-arl u ar this emplo>cc body 23 candidates were thwount from the general scrnte rate to horonuh n ork on a J me h graduated from an miensive seven week large commercial and industrial custom-trammg school e apprentice linemen ers lo be served under the rate. new and eight from a comprehensive nme-commercial and mdustrial customers

1. ' "'h"" ' " "" ' "" ' "#"d "" '

wcck cable sphtmg whool in 1983 are required to install large dual-fuel ""^c"""""k"'"I'd'" m Despite all the Company 's efforts boilcrs Existmg customers with dual- /

• i s e"'or / "R'"ce' the unusual circumstances of 19M 4 did fuel boilers are also encouraged to rc i wrar / H er: a an hn as hase their negatise impact Dec to the vise their wrvice contract to m(lude the

/ /mmas Acmaker a scenor unavailabihty of some of its lower cost 'l0! rider The primary purpose of the i fui: anon sic < haua mon, nuclear generation. the Company s el c-new rate is to switch customet, f rom gas ton ihe < omputer c onir.ued tric fuel and nterchange costs int re ised to alternate fuels during extremely cold < om m u,m arson heru nn the 16% in 1983 Nrarly $220 milhon of weather to reduce the peak gas wndout , m,n,g g,g fg g,,,y thew costs were dcferred to (oincide and Company costs The TCS custruner wn.rol < cn ter with their recovery in rates an expect to burn alternate fuel for ten The Company has a long-standmg to fif te(n days a year A unit mstalled at commitment to provide wnice to.ts the customer's property notifies the cus-g customers m a manner which is en-tomer w hen an alternate fuca must bcused s W' j vironmenta!!y safe and acceptable In and a (entralcomputer continually moni. 'u 1983 the Company completed its initial tors the gas consumed by the customer year of commercial operation of the flue gas scrubbers at its ddyr. tone and Other Developments Cromby Stations The procrw for icmov-The Company executed an innovative ing, the sulfur diotdc tror' the flue g s interim sales contract with the Depart-has performed as designed and has al-ment of Energy in July.1983 for the lowed Eddystone and Cromby to meet dehscry of enriched uranium for the the stringent emiwion limits of the Peach Hottom and Limerick reactors Pennsylvania Department of Environ. Urder this agreement, the Company was l'

.a >..,2 -c ,+4

• t....*

,.i:4, : <~- y

<>cs, *

• *,q - ': (-;

_4-, q[',N ! lLkWl3 f,~ e. W.~ ~ 5 s- .e r,.. lS?

i.r^e u,8l '5

. e.. T;,4 :1 - + 4 - : pa./ -:- 3.%. - 2yf.;A +3s ?, _;;vw4 A:-y;Q-M'. ' g.wfV= 'NA m:.. s ,s-8-h Y., .y r% . ; yn, +. s ,g1 ~4-6.e < t- . / ' ., s f f:. 7y ~ W, 3. -g.,+,, c' % ;:,2 e 4-q ,.s i ~f s,3-9 g _,, 5;4,,9:% .,s;23 lc;. ... ;fp;, c Y ;.%: n , ey77 ' % %. ;:x.:; i f? p p-= ,ys r, .;;u. 9 s n.,. JU< ' ~;'ff: QL ~y 4 ?sg' w ?t a, 5k. t .4 e l + ,-e i il resw v., y ,s. x. -lM,. .[ h Limerkh Derbine %rk nears t ornpletton on limertt k l ~rnt.\\n ] s ht,tl s upertnlende rst i Iw ries crollerple. Au uhar t oper. 'or s ('1 nthia Nautzht..n and Auts tant t ontral Operator stanlet Gamblefront Flet trae l're ductron look on as u ork men ftnt.h appl 1 tng therrnal snsti!ation to the high 3rev sure turbane IH

able to parnally terminate its enra h-tv mg tested in 1984 1.000 one w ay ment scruces under two existing wn-ar.d two-way commmacanons umts will ,} tracts and reu ive uranium enrichment he installed throughout our serme terro setuces at a disount The I)cpartment for l'hc test will wntinue for onc > car 1 of Energy. n turn was assured that the ()n May 2 198 4. af ter lH months ~ Company would not enter the second of n gotiations hs the Compan)'s Real ar) market for foreign enrit hment serv-Estate l>cpartment. an agreement was ices for the years '98_4 through 1985 As completed between Consohdated Rail a result of this agreement. the Company Corporation and PE for the conversion saved about $.4 miliion during 198 4 on of %2 exnting hcense agreements to enriched uranium that was received permanent casements under which from the I)cpartment of Energy for the Company facihties occup) railroad ~- initial core of Limern k I'mt No I Addt-rightvot-way and t'or the acquninon of tional w mgs are anticipated over the approumately.400 railroad structures next two years presently supportmg PE facihties at a PE has been selected by the Elec cost of approxunately $5 milhon pay-tric Power Research Institute to be the abic over a four >c.tr peru >d ~~ host utility for a large-scale tcst of a The conversion agreement will unique two-way radio control system benefit the Company sin (c it not or.lv ~ center arv Housing . 1 The system n designed to be used for obtains permanent rights f.or transmn-remote load management. automatic sion and dntribution facihties but also "#"#"#' U "" "O " " #" "' meter reading and tac monitoring and resuin in sigmficant m mgs '"""'"'~#'""#'""""# control of electric distribution facihties in keeping with its corporate ob- ' "" " l'c ' r " " " " 'd ' "/ re Outbound sign ls from a central compu-lccuve of good corporate tituenship. PE st"'ed a"d 'e"m at 'd r"o ter in our headquarters building are sent is committed to the development and homn as a ell as modern to a h> cal commercia! radio station ~ use of mmority vendors The Company tou n A,ma -~- transnutter by telephone and broadcast actively sccks out and encourages me by AM radio to pomts on our distribu-nority vendors and contractors who may tion system and our customeri sacters be mterested in doing business with it. ]{

1. 7 Meter readings and operating data are PE has expanded its Mmotity Vendor i

4 ~ returned to thc Company by VHF radio I)cselopment Program by initiating ~ / ' sj f 4 ..[ j equipment The radio station utility comprehensive involvement with tne 'M signals are not discernible to the sea. mmority business community, resulting k,ek l tion s listeners in an increase of more than 1001 in the pA j . ( f W ' 9. ':,g@. t Central computer and AM broat contract dollars awarded to minority {'"g [Ap'["% d*g ? p cast equipment were installed in 1983 s et. dors ? a and a small number of receiver units are ~ ~ ~ ' ' q t M b ',j= ~ . g [ .g.M s .g.,{ , y,, ..c 3 _ ; p, )4.m: y .y. 7.y.[n . + ,.. s.a. . p l u .m + }*\\ _ t c

q* ct

.s ~ ~ s. L s ,m 9..C' - -_,.. s. . ( 4.- ,'..] .;,.., q. ,j 9 5i. "g,, ' ] I,fp. 'O 19

,s ...s .-..s. n. - = - - -, - ~ ~ ~ ~ - - --

• [

[ $ h' Y [ ~.

Q

,l 5f. .l ? f. .. k b

%p rQ*

s . g ..q g' h '. d? > 9 V p qY, t; .q}-N v".,. ...c... < > $ :. _b.; h. k. i k' .,vA 3 '.'. Ne.8 { [...-...,' .,p i[ s. s* E. .'.-l

..gi.St, ;

'g I,},, j.., (g : 5 9 1.,6 c.w ' M. '.. <~ M *'....... >7 ,. 4..., ;w..... ..~ -m..... %......': :.M 1 i.*%,,f

g;'t QQ f. ' 0.'

Ki. KM M hy:' - j i ~ c n,.. - K..,;.,- .~

t,

_ <-,e a e ...s t;.' J 9 g _l.,. l y ' '..m f h ; .l f. s* .' lYo'>. ~ ' ~ t .~ ;:i. j ,[ ~ '?a' s ,. s ' _ 'l. i. 6~ ~.1 Ijsi. z'ij e kK R*

• 6Y-

+... s af .. 7, $3 - (" h - ' ' 7- "y y..,. .e y; ...?..,2 -6e- '?- ,i j. -) S

k. J-...,

4. g a n

,.,...,g, ;. i - ' ,e .c y.g V h,,. f * ',: '" <j. (c -:.. *- - g., 3;. p). ;.. s. - C-o c

u. 4 4-6.,

';m W* y;g?y% p% - 3., 0., i g ?' 4 ' . ;; e ' s ,W

• ',e gN :. > },f_.%.W. '.

)r f..v0 :-})q : - '.,= g* '.,' Q, J,. '... d '4 r m. ..:.g .a .. y y r,. .. s S g s a-e ~ ar .a p .. K, 9 g - n,-

• I'.h

,(SW" . ~. .t k 3,

• g f,,.,

y t., y ' '..,. ~.* y ; l b g. o.- ab. u...__.,s ' :.. ;j ...... ) 3.. .,c g _,", ; kr,x [;2 .e 4 lV y

• R.i. y. C '

e'

. s,)4 m,

W ..\\ a; W[ Q' l .. y (.7'y je,,, .g " j

,.2

.p,, y 3 ,+ - ., j. <. 1 I+, 4fe.. g f ' k )* b i ~ ,p a. \\y' ~> u., [.*l ' - [L.,h'l+,*A;lg* ^&qm ):u. L ' '" - [

?

r.. -.

y g [ z. qy y._.;.. . ;,j -

,. p j

q.f m

e.. -

,, ( 9 4.... c3 33 4,.f 7 g.,.p.g %g.. y g g g,. i ' l. ~ q ..q _. p 3g w. u . + p.<., f g f g y cwn a,;;p., 1.n. w ~; ;; . A; W. !k... h.,.. q w'9gQ * (,., r,

s x.

s ...r ' .. /. ..., s.. Qs ,5,. ...,. g * '.s , + ". At I s 9 e t' - ', k 5, I e - 4. _.'.. ', ,y' - '- }' e }. L.. 4... [4 .YO]?_;L'o(A.-, ..k3j h k.::j >;<i j } m, 7 W $p' Q -Q

• • 7.'

gs-f- f A +s y 1 ;.. ' dy.. g,,, g' L j .- c.- b. . e ', T:.C';

• l'J Ji -

... y :/ = ef** ^* .;,. ~.},. mk .e p.. y , y..,.,;Q. y dp., ^ ' $p..P _( g g y h.% . t M: n. [ Y ' ?pg&[,;l:. j. )]3..Q '* W f,.e,.:; #f &, h &; { p e x H,. .. v. m m,v .n , ~y ~ h l n.. ~,. w n,;.$ s'9 (. j, ..l. f ~f, 6 A .., K, -.y. , +. . < ;. g.. n . n,*, g y. 4 +., c y a a- ~~ .g.

a c.,3y n,

Managementk Discusslors arul Arudysis ofFinarscled Corulittort arul Restats of Operatiorss General Fuel and Energy Interchange Expense in recent years, the Company has experienced For accounting purposes, fuel and energy in-substantial increases in operating costs and carrying charges terchange costs are deferred until billed as fuel adjustment on increased investment in plant and equipment. Any future revenue. During 1983, gross fuel and energy interchange increases in such costs and charges may be expected to affect costs increased substantially because of extended outages of future net income and earnings per average common share nucicar units and increased output. Ilowever $219.2 million adversely unless periodic rate relief is obtained to offset of electric fuel costs were deferred resulting in a net de-them. In addition, the capital carrying charges associated crease in fuel and energy interchange expense compared with the construction of Limerick, w hich are capitalized by with 1982. crediting income with an allowance for funds used during Fuel and energy interchange expense also de-construction (AFUDC) and recovered through future de-creased in 1982 from 1981 as a result of higher nuclear out. preciation, now represent a major portion of net income and put and economic purchases of power from other utilities. will continue to increase at least until Limerick Unit No. I goes into service, which is expected to be in 1985. Other Operating and Maintenance l Until recently, the sluggish economic condi-Expenses l tions in the Company's service territory also had an adverse Other operating and maintenance expenses effect on operating results. Although the return on average have increased in the last two years due to inflation and to common equity has increased during the past three years, the growth in utility plant. return on investment is still below that allowed by the Penn-sylvania Public Utility Commission (PUC) as a fair return in Depreciation the Company % last rate order. Increases in depreciation in the last two years During 1983, the Company put into effect in-reflect additions to plant in service. creased rates for electric and steam service totaling approx-imately $151 million p(r year. On July 29, the Company filed Income Taxes with the PUC for an additional $40.7 million in gas revenues Income taxes charged to operations decreased and $5.5 million in steam revenues. The gas rate increase in 1983 from 1982 as a result of lower taxable income request has been suspended until April 27,1984. On Decem-caused primarily by significantly lower revenue from Salem ber 16,1983, the PUC approved a steam rate increase settle-Unit No. 2 sales. ment of $2.6 million, effectiveJanuary 1,1984. Income tax credits, net, included in other in. come, have increased in the last two years as a result of the Electric Operating Revenue higher allowance for borrowed funds used during The decrease in electric revenue for 1983 construction. compared with 1982 is priroarily attributahic to the signifi-For 1983, the Company's consolidated taxable cant reduction in the sale of output from Salem Unit No. 2 to income for federal income tax purposes is estimated to be a J(rsey Central Power & Light Company as a result of the ex-net loss of approximately $115 million versus taxable income tended outage of the unit and to lower fuel-related revenue. of $261 million in 1982. The decrease was primarily at-Increases in 1982 over 1981 reflect higher base r::tes and the tributable to a $272 million increase in fuel expense not re-sale of output and capacity from Salem Unit No. 2 toJersey covered currently from customers, a $105 million decrease Central Power & Light Company. Kilowatthour sales of elec-in revenue from the sale of Salem No. 2 output and a $62 tricity to retail customers increased 3.9 percent in 1983, million charge for future disposal of spent nuclear fuel. after a decline in 1982. Other Taxes Other taxes have increased due to higher llectric Revenue Millions of Dollar' really, gross receipts, and social security taxes. Incrtase/(Decrease) 'H3 vs. '82 'H2 vs. 'M i Rate increasen $ 115.6 $198.2 Allowance for Funds Used l'uring Fuct Related Revenue (18H.7) (83 0) Construction Vem Unit No. 2 (104.9) 89.6 Other 104.9 ( 25.9) The increases in AFUDC for the last two years Total $( 7Li) $i7g 9 resulted from a higher cost of capital for construction and increases in construction work in progress. Gas Operating Revenue Interest Charges Increases in 1983 over 1982 primarily reflect interest charges on debt increased in the last the recovery of higher fuel costs and higher rates. Mcf sales two years because of additional debt outstanding. The ratio of gas derlined 5.7 percent. of carnings to mortgage interest, which is a measure of the Companyh ability to issue additional icng-term debt, was 2.25 times in 1983, above the minimum of 2.0 times re-quired for the issuance of new mortgage debt. -21

Capital Expenditures and Changes licensing requirements of the NRC, to financing approvals by in Financial Position the PUC, and to ch.nge due to litigation. The Company can. The Company is carrying on a construction not predict the outcome of such regulatory reviews, but be-program which is estimated to require expenditures of $857 lieves the safety requirements have been or will be met, the million in 1984 and $2.3 billion from 1985 to 1987. A ma-economic desirability of the program has been demonstrated, jority of these expenditures relates to the construction of tbc and that the program will be successfully completed and Company's two 1055 mW nuclear generating units at I.imer-approved. ick. Successful completion of this program is dependent on Interim financing of the construction program the Company's ability to obtain external financing, primarily is provided by commercial paper borrowings and short and through debt arrangements and sales of equity securities intermediate-term bank loans, which also are dependent on which are subject to market conditions and to meeting cer-the Company's financial position. tain earnings tests. The program also is subject to the Return on Average Common Stock Equity Ratlo of Farnings to Mortgage Interest Pertens f emes Operrd ai 29 k gb \\A 32 f ih to ' ( ^ %^ A ^ Q s $y( fhh ," l-s g, ^~ n r

j7 l

n N' 4 10 6 t .t3 o g 0 , ) S. -4 4 3- ~ 4 ~ , } 1 &,. N^ d dl & Uc L& u L '9 MO 81 M2 84 '9 80 88 N2 83 Accountants' Report To the Shareholders and Ikurd of Directors Philadelphia Electric Company We have examined the consolidated balance sheets of Philadelphia Electric Company and Subsidiary Companies as of De-cember 31,1983 and 1982, and the related consolidated statements of income, retained earnings, and changes in financial position for each of the three years in the period ended December 31,1983. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of tbc accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly ti e consolidated financial position of Philadelphia Electric Company and Subsidiary Companies as of December 31,1983 and 1982, and the consolidated results of their operations.. d Wr-as in their imancial position for each of the three years in the period ended December 31, 1983, in conformity wi i generally accepted accounting principles applied on a consistent basis. 1900 Three Girard Plaza j Philadelphia, Pennsylvania g February 2,1984 22 t -

i 4 g/ 'O' ;, ((//p t '%# IMAGE EVALUATION 4 k//77 1/"'$>/ TEST TARGET (MT-3) 4 /g y,, es /4 </f $ + l.0 !!88 DE 5 lE0 EE 5' IM l-l t: 1.25 1.4 1.6 150mm 6" f '/b 4%g:/ )%,, oI ,7 <Q*k#

1. lw

1. 9 o

49 IMAGE EVALUATION [ di g/ e ,[// , ;g,4 + l.0 l#2 IE I ti ? EE I.I !. - EE l.8 l.25 1.4 1.6 150mm 6"

1. 4 *f

&>A <$ '4 4%

1. v/9,w7/:

<w +48+ o l lkm

6'& O 4 M/ ffg %j/ f@ 4, #, k@p IMAGE EVALUATION y>ff s. 9/ TEST TARGET (MT-3) 4 4 S+/ %,;<<x9 l.0 lf2 EM 5 9 HE [j= NE i,l ~ 1.8 r 1.25 1.4 1.6 150mm 6"

• ?g%//# %>fffff;

/ sb 4 s<Q+/ 4A

Philadelphia Electric Cornpany and Sutwidiary Companies Consolidated Statements ofIncome For the Year Ended December 31 1983 1982 1981 (Thousands of De'lars) Operating Revenues Electric $2,107,897 $2,180,960 $2,002,063 Gas 417,042 390,427 356,431 Steam 71,111 73,366 74,931 Total Operating Revenues 2.596,050 2,644,753 2,433,425 Operating Expenses Fuel and Energy Interchange 986,634 1,128,498 1,187,635 Other Operating Expenses 449,101 411,753 360,840 Maintenance 222,640 199,747 156,878 Depreciation 165,327 143,848 130,283 Income Taxes 200,026 207,669 129,484 Other Taxes 178,615 164,511 145.312 Total Operating Expenses 2,202,343 2,256,026 2,110,432 Operating income 393,707 388,727 322,993 Other income Allowance for Other Funds t' sed During Construction 108,126 65,699 65,013 Income Tax Credits, net 87,912 75,845 63,164 Other, net (3,125) (717) 2,457 Total Other Income 192,913 140,827 130,634 Income Before Interest Charges 586,620 529,554 453,627 Interest Charges long-Term Debt 330,200 308,862 266,691 Short-Term Debt 35,199 32,030 33,155 Allowance for Borrowed Funds Used During Construction (167,868) (l47,561) (l23,784) Net Interest Charges 197,531 193,331 176,062 Net income 389,089 336,223 277,565 Preferred Stock Dividends 67,384 57,600 $3,804 Earnings Applicable to Common Stock $ 321,705 $ 278,623 $ 223,76i Average Shares of Common Stock Outstanding (Thousands) 133,852 116,480 99,557 Earnings Per Average Common Share (Dollars) $ 2.40 $2.39 $2.25 Dividends Per Common Share (Dollars) $2.12 $ 2.06 $ 1.90 See notes tofinancial statements. - 23.

Philadelphio Electric Company and Sutnidiary Companies (mssoNdated Balmsce Sheets December 31 t983 1982 (Thousands of Dollars) ASSETS Utility Plant, at original cost Electric $4,683,726 $4,519,544 Gas 416,170 394,876 Steam 53,845 53,998 Common, used in all scryices 128,379 127,304 5,282,120 5,095,722 less: Accumulated Depreciation 1,592,009 1,450,149 Net Utility Plant in Service 3,690,111 3,645,573 Construction Work in Progress 3,582,133 2,810,014 Net Utility Plant 7,272,244 6,455,587 Investments 99,445 91,427 Current Assets Cash and Temporary Cash Investments 65,221 50,025 Accounts Receivable Customers 302,254 284,151 Other 36,354 58,012 Inventories, at average cost Fossil Fuel 75,681 97,478 Materials and Supplies 55,403 45,552 Deferred Energy Costs 149,246 (85,379) Other 7,572 7,721 _ Total Current Aescts 691,731 457,560 Deferred Debits 80,375 24,695 Total $8,143,795 $7,029,269 See notes sofinancial statements. l l

December 31 1983 1982 (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Ccp?talization Common Shareholders' Equity Common Stock $ 2,110,503 $ 1,826,198 Other Paid-In Capital 5,856 4,641 Retained Earnings 452,964 423,596 2,569,323 2,254,435 Preferred Stock Without Mandatory Redemption 522,472 372,472 With Mandatory Redemption 284,863 292,290 tong-Term Debt 3,381,805 3,028,525 Total Capitalization 6,758,463 5,947,722 Current Liabilities Short Term Debt Bank loans 218,000 32,200 Commercial Paper 49,500 32,500 long-Term Debt due within one year 21,280 Accounts Payable 152,687 164,419 Taxes Accrued 25,841 65,954 Deferred Income Taxes-Energy 76,517 (43,350) Interest Accrued 91,787 99,764 Dividends Declared 27,211 24,167 Other 17,337 24,734 Total Current Liabilities 658,880 421,668 Deferred Credits and Other Liabilities Deferred Income Taxes 346,531 290,538 Unamortized Investment Tax Credits 249,658 296,068 Nuclear Fuel Disposal 61,843 24,707 Other 68,420 48,566 Total Deferred Credits and Other Liabilities 726,452 659,879 Total $8,143,795 $7,029,269 See notes tofinancial statements. i i i i 25

Philadelphia Electric Company and Subsidiary Companies Consolidated Statements ofRetained Earnings For the Year Ended December 31 1983 1982 1981 (Thousands of Dollars) Balance, January 1 $ 423,596 5 387,251 $ 353,570 Net income 389,089 336,223 277,565 812,685 723,474 631,135 Cash Dividends Declared Preferred Stock (at specified annual rates) 68,970 57,982 53,762 Common Stork (per share, $2.12 in 1983, $2.06 in 1982, and $1.90 in 1981) 283,583 240,486 189,476 Expenses of Capital Stock issues 7,168 1,410 646 359,721 299,878 243,884 Balance, December 31 $ 452,964 $ 423,596 $ 387,251 Consolidated Statements of Changes in Financial Pbsition Sources of Funds Funds from Operations Net income $ 389,089 $ 336,223 $ 277,565 Charges (Credits) Not AITecting Funds Depreciation and Amortization 165,327 143,848 135,393 Nuclear Fuel Disposal Costs 12,166 15,820 8,638 Deferred Income Taxes, net 175,307 (10,215) 2,011 Investment Tax Credits, net of Amortizatica (46,064) 101,646 25,049 Allowance Jar Other Funds Used During Construction (108,126) (6%,699) (65,013) Total from Operations 587,699 521,623 383,643 Funds from Financings Sales of Securities Common Stock 284,305 253,810 194,925 Preferred Stock 150,000 30,000 long-Term Debt 175,000 300,000 423,500 issuance of Other long-Term Debt 200,000 20,000 Change in Short Term Debt 202,800 10,475 1,635 Sale of Magnesium Oxide Regeneration Facilities 37,679 Sale of Salem Generating Station Nuclear Fuel 103,166 Sale of Tax Benefits 53,743 Total from Financings 1,049,784 614.285 773,969 Total Sources $1,637,483 $ 1,135,908 $ 1,157,612 Uses of Funds Additions to Utility Plant 1,030,321 870,715 787,075 Allowance for Other Funds Used During Construction (108.126) (65,699) (65,013) j Dividends on Preferred and Common Stock 352,553 298,468 243,238 Retirement of long Term Debt .41,573 50,183 137,470 Change in Deferred Energy Costs 234,625 (54,080) (42.347) Increase in Nuclear Fuel Escrow Account 7,113 8,204 4,339 Change in Other Items of Working Capital 63,721 9,498 62,144 Other, net 15,703 18,619 30,706 Total Uses $1,637,483 $ 1. I35,908 $ 1,157,6 I 2 See notes tofinancial statements. '26 i

l Philadelphh Electric Company and Subsidiary Companies Notes to FinancialStatements

1. Significant Accounting Policies adjustments of rates charged to its customers. Annual de-preciation provisions, expressed as a percent of average ve-General preciable utility plant in service, were approximately 3.20%

All utility subsidiary companies of Phila-for 1983,3.00% for 1982 and 3.01% for 1981. delphia Electric Company are wholly owned and are in-cluded in the consolidated financial statements. Non-utility income Taxes subsidiaries are included in investments and accounted for Deferred income taxes are provided for by the equity method. Accounting policies are in accordance diffsrences between book and taxable income to the extent with those prescribed by the regulatory authorities having permitted for rate-making purposes. Investment tax credits, jurisdiction, principally the Federal Energy Regulatory Com-other than credits resulting from contributions to an em-mission (FERC) and the Pennsylvania Public Utility Commis-ployee stock ownership plan (ESOP), which do not affect in-sion (PUC). come, are deferred and amortized to income over the estimated useful life of the related utility plant. Revenues Revenues are recorded in the accounts upon Allowance for Funds billing to the customer. Rate increases are billed from dates Used During Construction (AFUDC) authorized or permitted to become effective by the regula-AFUDC is a non-cash item which is defined in tory authorities. the uniform system of accounts prescribed by FERC as "the net cost for the period of construction of borrowed funds Fuel Expenses used for construction purposes and a reasonable rate on Fuel expenses, which are recoverable under other funds when so used." AFUDC is recorded as a charge to energy adjustment clauses, are recognized when the related Construction Work In Progress, and the equivalent credits are revenue is billed to customers. to " Interest Charges" for the pre tax cost of borrowed funds Nuclear fuel used in the Peach Bottom and and to "Other Income" for the remainder as the allowance Salem Generating Stations is leased. The costs of such leased for equity funds. The rate used for capitalizing AFUDC, fuel are charged to fuel expense on the unit of production which averaged 9.30% in 1983,9.20% in 1982, and 8.65% method. The estimated costs of nuclear fuel disposal are in 1981, is computed under a method prescribed by the reg-charged to fuel expense as permitted for rate-making ulatory authorities. The rate is a " net after tax rate" and the

purposes, current income tax reductions applicable to the interest In its November 22,1983 rate order, the PUC charges capitalized are recorded in "Other income." AFUDC approved the Company's request for full recovery of assess.

is not included in taxable income and the depreciation of ments imposed by the Nuclear Waste Policy Act of 1982 (the capitalized AFUDC is not a tax-deductible expense. Act). Beginning April 7,1983 such nuclear fuel disposal costs are being charged to fuel expense as the related fuel is Retirement Plans burned. Unrecovered assessments imposed by the Act for fuel Tbc Company has non contributory trusteed burned prior to April 7,1983 are being amortized to fuel retirement plans applicable to all regular employees. Pension expenses over the period endingJune 30,1985. costs include normal cost for the year and amortization of unfunded prior service costs over ten to twenty-year periods. Depreciation Approximately 81% of such costs were charged to operating For financist reporting purposes, depreciation expense and the remainder, associated with construction la-is provided over the estimated service lives of the plant on bor, to the cost of new utility plant. the straight line method and, for tax purposes, generally, over shorter lives on accelerated methods. The estimated de-Gas Exploration commissioning costs of ponions of the nuclear plants are and Development Costs being charged to operations as permitted for rate-making pur-The Company has invested in several joint poses. Such amounts, net of deferred income taxes, are de-ventures for exploring and drilling for gas. These costs are posited in an escrow account and invested for funding of capitalized under the full cost method and charged to opera-future costs. 'lhe Company believes that any additiona! costs, tions commensurate with the production of gas by these which may be significant, would be recoverable through ventures. t

2. Investtnents At December 31 1983 1982 (Thousands of Dollars)

Gas Exploration and Development $47,736 $48.099 Nonutility Property 14,668 15,911 - Escrowed Funds for Nuc'. car Fuel Disposal 19,656 -12,543 Escrowed Funds for Decommissioning NucIcar Plants 4,927 3,058 Other 12.458 11,816 Total - $99,445 ' $91,427 27

Philadelphia Electric Company and Sulwidiary Companics Notes to Financial Statements -- Continued

3. Common Stock At December 31,1983 and 1982, Common Stock, without shares, respectively, outstanding. At December 31,1983, par value, consisted of 240,000,000 and 160,000,000 shares, there were 8,463,653 shares reserved for issuance under respectively, authorized and 142,811,434 and 125,766,898 stock purchase plans.

(Thouunds of Shares) (1houunds of Dollars) Issued and Outstanding 1983 19h2 1981 1983_ 1982 1981 Balance, January 1 125,767 108,507 92.633 $1,826,198 $ 1,572,388 $ 1,377,463 Public Sales 11,000 12,000 12,800 186,055 175,620 154,786 Dividend Reinvestment and Stock Purchase Plan 4,788 4,020 2.667 77,196 60,399 34,809 Employee Stock Purchase Plan 641 453 407 10,527 6,677 5,330 Tax Reduction Act Stock Ownership Plan (ESOP) 615 787 10,527 11,114 l Total issued 17,044 17,260 15,874 284,305 253,810 194,925 Balance December 31 142,811 125,767 108,507 $2,110,503 $ 1,826,198 $ 1,572,388

4. Preferred Stock and Other Paid-In Capital At December 3),1983 and 1982. Preferred Stock $100 par, cumulative Shares Amount Current Refunding Redemption Restricted Outstanding Price (a) Prior to (b)

Authorized 1983 1982 1983 1982 (Thousands of Dollars) Series (without mandatory redemption) 13.35% (c). $113.35 2-1-89 750,000 750,000 $ 75,000 12.8% (c) 112.80 5 I 88 750,000 750,000 "5,000 9.50% 106.50 - 750,000 750,000 750,000 75,000 75,000 8.75% 104.00 650,000 650,000 650,000 65,000 65,000 7.85% 105.00 500,000 500,000 500,000 50,000 50,000 7,80% 103.00 750,000 750,000 750,000 75,000 75,000 7.75% 103.00 200,000 200,000 200,000 20,000 20,000 4.68% 104.00 150,000 150,000 150,000 15,000 15,000 4.4% 112,50 274,720 274,720 274,720 27,472 27,472 4.3% 102.00 150,000 150,000 150,000 15,000 15,000 3.8% 106.00 300,000 300,000 300,000 30,000 30,000 5,224,720 5,224,720 3,724,720 522,472 372,472 Series (with mandatory redemption) (d) 17.125% (Sold 1982) $ 117.125 5187 300,000 300,000 300,000 30,000 30,000 15.25% 115.25 5190 500,000 500,000 500,000 50,000 - 50,000 10% 104.44 5190 220,000 220,000 220,000 22,000 22,000 9.52% 106.2 *> 5-1 86 500,000 419,660 446,830 41,966 44,683 8.75% 106.18 5 1-88 500,000 500,000 .500,000 50,000 50,000 7,325% 104.39 -750,000 600,000 630,000 60,000 63,000 7% 104.00 400,000 308,970 326,070 30,897 32,607 3,170,000 2,848,630 2,922,900 284,863 292,290 Unclassified 1,605,280 Total Preferred Stock 10,000,000 - 8,073,350 6,647,620 $807,335 $664,762 ~ (a) Redeemable, at the option of the Company, at the indis . evidenced by Depositary Receipts, each receipt represent-cated dollar amounts per share, plus accrued dividends. ing 1/10 of a share of Preferred Stock. (b) Prior to the date specified, none of the shares of each - (d) Redemption requirements (par value) in the period series indicated may be redeemed through refunding at an. 19841988 are as follows: 1984 $6,330,000; 1985-interest cost or dividend rate which is less than the dividend $8,296,000; 1986-$15,727,000; 1987-$16,030,000; rate of such series. 1988 $17,530,000. (c) Ownership of the 13.35% and 12.8% Preferred Stocks is 28

Below is a summary of changes in Preferred stock and Other Paid-in Capital. (All amounts in thousands.) Shares Preferred Stock (Par) Other Paid-in Capital Issued and outstanding 1983 1982 1981 1983 1982 1981 1983 1982 1981 Balance, January 1 6,648 6,394 6,468 $664,762 $639,401 $646,802 $4,641 $3,888 $2,581 Public sales 1,500 300 150,000 30,000 Redemptions (75) (46) (74) (7,427) (4,639) (7,401) 1,215 753 1,307 Balance, December 31 8,073 6,648 6,394 $807,335 $664,762 $639,401 $5,856 $4,641 $3,888

5. Long-Term Debt At December 31,1983 and 1982 Series Duc 1983 1982 (Thousands of Dollars)

First and Refunding Mortgage Bonds (a) 3%% 1983 20,000 3%% 1985 50,000 50,000 4h% 1986 50,000 50,000 4h% 1987 40,000 40,000 3%% 1988 40,000 40,000 5%13%% 1989-1993 235,000 235,000 4%%I 5%% 1994-1998 440,864 443,429 7h%1 t h% 1999 2003 544,930 549,600 6%I2%% 2004-2008 523,500 523,500 13h%-18%% 2009-2013 575,000 450,000 Total First and Refunding Mortgage Bonds 2,499,294 2,401,529 Notes Payable - Banks (b) 1985-1989 M5,000 225,000 Notes Payable - Other 17% 1986-1987 20,000 20,000 Revolving Credit Notes (c) 1985 1987 200,000 Pollution Control Notes 5%%I3% 1997-2013 266,830 229,780 i Debentures 4.85% 1986 21,207 21,330 Debentures 14 4 % 1990 50,000 50,000 Debentures 14%% 2005 100,000 100,000 Sinking Fund Debentures - Philadelphia Electric Power Company, a Subsidiary -4%% 1995 16,928 18,193 Unamortized Debt Discount and Premium, Net (17.454) (16,027) Total long-Term Debt 3,381,805 3,049,805 Due Within One Year (d) (21,280) long-Term Debt included in Capitalization $3,381,805 $3,028,525 l (c) Utility plant is subject to the lien of the Company's There is an annual commitment fee of h% on the unused

mortgage, amount. As a result of the Limerick investigation, the l

. (b) At interest rates ranging from prime rate to 107% of Company does not meet a condition for borrowing The prime rate. banks have waived such condition with respect to the $ 200 - i (c) The Company has a $400 million revolving credit and million outstanding at December 31,1983. term loan agreement with a group of banks which expires in (d) long-term debt maturitics in the period of 1985-1988 1987. Interest on outstanding borrowings is at prime rate are as follows: 1985-$204,267,000; 1986-$190,192,000; j. through May 1985 and at 105% of prime rate thereafter. 1987-$166,850,000; and 1988-$106,850,000. i

6. Short-Teren Debt 1983 1982 1981 (Thousands of Dollars)

Average Short. Term Borrowings - $164,429 $ 90,180 $146,273 Average Interest Rates, Computed on Daily Basis 9.06% 13.13% . $266,512 . 17.80%. Maximum Short-Term Borrowings Outstanding $340,000 $ 168,725 l Arcrage Interest Rates on Short Term Borrowings at December 31: Bank loans 10.53% 10.37% 16.37% Commercial Paper - Tax Exempt 5.61%. 4.92% - l Commercial Paper - Taxable ~ 10.64% 9.62% As of December 31,1983 the Company had borrowed $218 generally does not have formal compensating balance million under informal lines of credit with banks arrangements with these banks. aggregating approximately $412 million. The Company 29

Philadelphia Electric Company and Suinidiary Companies Notes to Financial Statements - Continueel

7. Jointly-Owned Electric Utility Plant The Companyi ownership interests in jointly-owned utility plant at December 31,1983 were as follows:

Production Plants Transmission Plant Peach Bottom Salem Keystone Conemaugh Operator Philadelphia Public Service Pennsylvania Penns} lvania Various Electric Electric and Electric Electric Companies Company Gas Company Company Company Participating Interest 42J9% 42.59% 20.99% 20.72% 21% to 43% Company's share of: (Thousands of Dollars) Utility Plant $414,429 $863,167 $50,927 $59,103 $68,865 Accumulated Depreciation 94,371 103,398 21,474 22,217 10,724 Construction Work In Progress 32,619 12,480 5,514 761 ) The Companyh participating interests are financed with are accounted for as if such participating interests were Company funds and, when placed in service, all operations wholly-owned facilities.

8. Income Taxes 1983 1982 1981 (Thousands of Dollars) included in operating expenses:

Current federal $ 54,495 $ 71,987 5 75,558 Current state 16,288 44,251 26,866 Total 70,783 I16.238 102,424 Deferred federal 151,259 (8,390) 6,007 Deferred state 24,048 (1,825) (3,996) Total-175,307 (10,215) 2,011 Investment tax credits, net of amortization-federal (46,064) 101,646 25,049 . Total federal 159,690 165,243 106,614 Total state 40,336 42,426 22,870 Total $200,026 $207,669 $129,484 lacluded in other locome: Current federal (70,902) (60,506) (50,299) = Current state (17,010) (15,339) (12,865) Total $(87,912) $ (75,845) - $ (63,164) Total income tax provisions: Federal 88,788 104.737 56,315 State 23,326 ~ 27,087 10,005 lotal- $112,114 $ 131,824. $ 66,320 As a result of the recognition of certain expenses for federal and 1981. Contributions to the plan are in the form of Phila-income tax purposes in 1983, principally deferred energy delphia Electric Company Common Stock and have no effect - costs and nuclear fuel disposal costs, the Company incurred on net income. a loss for federal income tax purposes of about $115 million. Applicable state income tax laws do not per- . This loss will be carried back to offset taxes paid in prior-mit the carryback of tax lonnes to prior yeare. At December years and will result in a refund of about $15 million of 31,1983, the Company had a tax lons carr} forward of ap-federal income taxes paid in 1980 and 1981. Investment tax proximately $118 million which may be used to reduce its credits of $37 million have been reversed to the extent they Pennsylvania income tax liabilities through 1986. are no longer utilized as a result of the loss carryback. On. In December 1981, the Company sold the tax this basis, available investment tax credits which have not - benefits attributable to its ownership interest in the Salem - been utilized totaled approximately $140 million at Decem-' Generating Station Unit No. 2. This transaction was struc-ber 31,1983, and may be carried forward to reduce federal, tured under the safe harbor lease provisions of the Economic -income tax liabilities in future years through 1997 and 1998J Recovery Tax Act of 1981. The proceeds from the sale,- Investment tax credits consist of the basse ~ $53,743,000, were credited to Deferred income Taxes ' credits allowable of 10% plus an additional credit resulting 1($24,759,000), Deferred Investment Tax Credits. from contributions to the ESOP pid for employees. The ad-l ($21,863,000) and Other Deferred Credits ($7,121,000) ' disional credits are equal to 0.5% of employee compensation, and are being amortized to income over the estimated useful,, ' in 1983 and 1H% of the investment tax credit base in 1982 life of the plant. ~ 30'

Provisions for deferred income taxes consist of the tax effects of the following timing differences between tax and book income: 1983 1982 1981 (Thouundsof Dollars) Depreciation and amortization $ 38,792 $ 30,042 5 25,452 Nuclear fuel disposal costs 24,281 (7,865) (4,299) Deferred energy costs 119,867 (27,264) (21,804) Other (7,633) (5,128) 2,662 Total $175,307 $ (10,215) $ 2,011 The total income tax provisions differ from amounts computed by applying the federal statutory tax rate to income and adjusted income before income taxes for the following reasons: Net income $389,089 $336,223 $277,565 Total income tax provisions 112,114 131,824 66,320 income before income taxes 501,203 468,047 343,885 Deduct - allowance for funds used during construction (non taxable) 275,994 213,260 188,797 Adjusted income before income taxes $225,209 $254,787 $155,088 Income taxes on above at federal statutory rate of 46% 103,5 % 117,202 71,340 increase (decrease) due to: 1 Depreciation timing differences not normalized 7,941 10,672 (551) State income taxes, net of federal income tax benefits 12,597 14,627 5,436 a Taxes and pension costs capitalized but expensed for tax purposes (673) (396) (3,226) Amortization of investment tax credits previously deferred (6,210) (7.214) (4,769) Other, net (5,137) (3,067) (1,910) Totalincome tax provisions $112,114 $131,824 $ 66,320 Provision for income taxes as a percent of: Income before income taxes 22.4% 28.2% 19.3% Adjusted income before income taxes 49.8% 51.7% 42.8% ' 7). Othee Taxes 1983 1982 198I (Thousands of Dollars) - Gross receipts $108,211 $106,090 $ 100,9 l 2 Capital stock 19,198-I8,928 19,600 Realty 30,975 22,505 9,555 Other 20,231 16,988 15,245 Total $178,615 $164,51 I . $145,312 -

10. Retirement Plans l;

Retirement plan costs, which are funded as accrued, aggregated $41,000,000 in 1983, $37,800,000 in 1982, and $31,700,000 in 1981. Plan data as of the dates of the most recent actuarial reports is as follows: January I 1983 1982 (Thousands of Dollars) Actuarial present value of accumulated plan benefits (7.0% assumed rate of return) Wsted ' $404,673 $360,835 Nanvested 48,545 45,080 $453,218 $405,915 - Net assets available for benefits $477,748 $359,400 31

Philadciphia Electric Company and Suh%idiary Companies Notes to FinancialStatements - Continued l

11. Segment Information i

Electric Gas Steam Total (Thousandsof Dollare 1983 Operating revenues $2.107,897 $417.042 $71,111 $2,596,050 Operating expenses, excluding depreciation 1,592,027 377,624 67,365 2,037,016 Depreciation 150,898 12,694 1,735 165,327 1,742,925 390,318 6/,100 2,202,343 Total operating expenses ~~ Operating income $ 364,972 $ 26,724 $ 2,011 $ 393,707 Utility plant additions $ 1,004,219 $ 26,020 82 $1,030,321 December 31: Allocable assets Net utility plant (*) 6,89H,758 349,326 24,160 7,272,244 Inventories 98,391 32,350 343 131,084 Deferred Energy Costs 116,661 29,359 3,226 149,246 $7,113,810 $411,035 $27,729 7.552,574 Nonallocable assets 591,221 Total assets $8,143,795 1982 Operating revenues $ 2,I 80,960 $390,427 $73,366 $2,644,753 Operating expenses, excluding depreciation 1,688,365 354,093 69,720 2,112,178 Depreciation 130,225 11,916 1,707 143,848 Total operating expenses I,818,573 366,009 71,427 2,296,026 ~~ Operating income $ 362,370 $ 24,418 $ 1,939 $ 388,727 Utility plant additions $ H43,371 $ 27,125 219 $ 870,715 December 31: Allocable assets Net utility plant (*) 6,097,411 332,437 25,739 6,455,587 Inventories 105,035 37,645 350 143,030 $6,202,446 $370,082 $26,089 6,59H,617 Nonallocable assets 430,652 Total assets $7,029,269 1981 Operating revenues $2,002.063 $,4 56,431 $74,931 $2,433,425 Operating expenses, excluding depreciation 1,586,506 322,008 7I,635 I,980,149 Depreciation i17,270 I l.294 1,719 130,2H3 - Total operating expenses 1,703,776 333,302 73,354 2,110,432 Operating income $ 298,287 $ 23,129 $ 1,577 $ 322,993 Utility plant additions $ 746,535 - $ 40,432 10H $ 787,075 December 31: Allocable assets Net utility plant (*) - 5,372,240 314,652 27,194 5,714,086 Inventories 101,956 29,986 251 132,193 $5,474,196 $344,638 $27,445 5,846,279 Nonallocable assets 457,916 Total assets $6,304,195 ( *)inciantes construction uvent in progress anst allocarrel common utility property. 32

12. Leases Rental payments charged to operating ex-penses were as follows:

Certal:1 leases, including the nuc! car fuel contracts for the Peach Ik>ttom and Salem Generating Stations, meet the crite-39g ,9g

393, ria of a capital lease as defined by financial accounting stand-ards, but are accounted for as operating leases in accordance pusands of Dollars) with the rate. making process. If these leases were capitalized Nuclear fuel

$38,268 $61,538 $26,709 they would not have a material effect on assets, liabilities, or Othe. 28,849 24,356 24,782 related expenses. Total $67,117 $85,894 $51,491 On December 30,1983 the Company sold magnesium oxide regeneration facilities for approximately their net book value of $37.7 million. These facilities have The Company's proportionate share of the been leased back to the Company. contractual obligations to purchase nuclear fuel under lease The minimum rental commitments under all agreements for the Peach Ik>ttom and Salem Generating Sta-nuncancelable agreements aggregated $565 million at De-tions as of December 31,1983 was $288 million. Indepen-cember 31,1983. The annual rental commitments are esti-dent fuel comp.tnics have been authorized to ac,uire and mated to be $105 million for 1984; $112 million for 1985; own up to a maximum of $550 million of nuclear fuel at any $121 million for 1986; $70 million for 1987; and $51 mil-one time and have contracted to sell the energy therefrom to lion for 1988. the Company.

13. Nuclear Fuel Disposal mitted for rats iking purposes and such amounts, net of estimated unrea.

<l income tax benefits, have been deposi-The Nuclear Waste Policy Act of 1982 requires the United ted in an escrow accoent and are invested for the funding of States Department of Energy (DOE) to assess utilities one the pre-April 7,1983 liability. The Company's pre April ", mill for each kilowatthour of electricity generated by a nu-1983 liability for its share of generation by the Peach Ik>ttom clear generating station after April 6,1983 and to make an and Salem Generating Stations is approximately $62 million, equivalent assessment for such generation prior to April 7 of which approximately $37 million has been recovered 1983. These assessments will provide for the shipment and through rates charged to customers. This liability is expected permanent disposal of fuel discharged. Since May,1981 the to be paid to DOE in 1985. The liability for current genera-Company has been charging operations for such costs as per-tion is paid to DOE quarterly.

10. Limericit Generating Station OnJamury 24,1984 the Company responded to the PUC order, electing to suspend construction of Unit The Company has under construction two nuclear unita at No. 2 until Unit No. I is in commercial operation. The PUC Limerick, Pennsylvania. In the latter part of 1980, the Pt'C has not yet issued an order accepting or rejecting this re-began an investigation into various matters concerning the sponse. Unit No. I is scheduled for commercial operation in lamerick Generating Station (Umcrick). On August 27, 1985 and Unit No. 2 in 1990.

1982, the PUC issued an order stating that continued con-Operation of Limerick will require an ade-struction of Unit No. 2 simultaneously with Unit No. I is not quate supply of cooling water. To assure an adequate supply, in the public interest and directing the Company to cancel or the Company has contracted to obtain supplementary cool-suspend construction of Unit No. 2. The Company appealed ing water from the Delaware River. Several parties are at-the order to the Commonwealth Court and on December 15, tempting to delay or terminate construction of pumping 1982, the Commonwealth Court reversed the PUC order. On stations, reservoirs and related facilities to transport the January 14,1983, the PUC petitioned the Pennelvania Su-water. The Company expects to protect its interests in the preme Court to allow an appeal of the Commonwealth facilities, but any delays in obtaining an adequate supply of Courth decision. supplementary cooling water could delay the scheduled On May 27,1983, the Pennsylvania Supieme dates of commercial operation, restrict the operating capac. Court upheld the authority of the PUC to deny the registra-ity and increase the cost of 1.imerick. tion, pending completion of Unit No.1, of any new securitics At December 31,1983, engineering studies issuances, the proceeds of which would be used, in whole or indicated Unit No. I and common plant were approximately in part, for construction of Unit No. 2. On June 10,1983, the 91% compleic and Unit No. 2 approximately 31% complete. PUC issued another order, which was clarified on December The Company % investment in Umerick was $3.25 billion at 16,1983, directing the Company to suspend construction of December 31,1983 of which $1.76 billion was allocated to U;it No. 2 pending commercial operation of Unit No. I, to Unit No. I, $667 million to Unit No. 2 and $827 million to cancel construction of Unit No. 2. or to continue con-common facilities. The Company is accruing AFUDC on its struction of Unit No. ? with internally generated funds. entire investment in Umerick. 15, Commitments and Contingencies Plant facilities under construction, particularly the Umerick - Generating Station, require numerous permits and licenses, The Company has incurred substantial commitments in con-which the Company cannot be assured will be issued at com-nection with its construction program. Construction pletion of the facilities. expenditures are estimated to be $857 million for 1984 and The Price Andersm Act places a "Umit of Wa- $2.3 billion for 19851987. These estimates are reviewed bility" of $580 million on each licensed nuclear facility for and revised periodically to reflect changes in economic con. claims that could arise from an incident involving any li-ditions, revised load forecasts and other appropriate factors. censed nuclear facility in the nation. The Company has 33

P Philadelphia Electric Compaq and Sulmidiary Companics Nones $o MneanecialStaerneeness - Continued insured for this exposure through a combination of private tual insurance company to provide replacement power cost insurance and indemnity agreements with the Nuclear Reg-insurance coverage in the event of a major outage at a nu-ulatory Commission. In the event of such a nuclear incident clear station. The premium for this coverage is subject to an the Company could be anscued up to $8.5 million per inci-assessment for adverse loss experience. The Companyi max-j dent with a maximum amount of $17 million in any one year. imum share of any assessment is $13 million. - The Company maintains insurance coverage The PUC is conducting an investigation into against loss or damaec en its nuclear facilities by fire or the outages that started in February 1983 at Salem Generat-other casualty. Altho 3 impowible to determine the ing Station Unit No. I, operated by Public Service Electric total amount of the loss ttw may result from an occurrence and Gas Company. The PUC has ordered the Company to at these facilities, the Company maintains the maximum show cause why it should be permitted to recover the incre-amount of nuclear insurance presently available, being $1 mental costs, if any, of replacing Unit No. I generation billion for each station. Under the terms of the various insur-during the outages. The Company believes that it should not ance agreements, the Company could be assessed up to $33 be precluded from recovering such incremental costs and million for lowes incurred at plants insured by the insurance that the ultimate rrwlution of this matter will not have a companies. material cdverse affect on the financial position or results of The Company is a member of an industry mu-operations of the Company.

16. Quacterly Data (Unsudited)

The data shown beh>w include all adjustments which the Company considers necessary for a fair presentation of such amounts. Operating Revenues Operating income Net income I983 I982 1983 1982 1983 I982 Quarter Ended (Thousands of Dollars) March 31 $723,216 $757,077 $105,871 $102,480 $103,975 $ 90,951 June 30 572,153 592,573 79,374 78,253 76,071 63,240 September 30 668,259 661,594 121,703 115,633 122,003 100,402 December 31 632,42.' 633,509 86,759 92,361 87,040 81,630 ' Earnings Applicable Acrape Shares - to Common Stock ' Outstanding Earnings Perherage Sharc I983 I982 I983 I982 I983 I982 Quarter = Ended - (Thousands of Dollars) - (Thousands) - (Dol:ars) Narch 3i $88,248 $77,138 126,064 108,593 $.70 ' $.71 Junc 30 59,186 48,622 133,021. 115,289 .44 .42 September 30 105,146 85,816 134,909 117,478 .78 .73 December 31 69,125 67,047. 141,235 124,378 .48 .54 i 1983 fourth quarter results include the write-off of ap-deferred during the first three quarters of 1983 pending a - proximately $9.5 million (net of $10.1 million of related in. final determination by the PUC as to their recovery. Recovery. cones taxes) of operating, maintenance, and depreciation was denied on November 22.1983 at the conclusion of the. coats of certain pollution control facilities which had been Companyi retail electric rate case.

17. Suj. ---mtsey infoesnatioet to Disclose the if the Company had to replace its entire util-Estlaneted Effects of Inflation foe the Yeae ity plant at this time', the costs to do so would greatly sxceed red.d Deceanbee 31,1983 (Unaudited) the original costs incurred when the facilities were built be.

causc of the cumulative effect of inflation. These plant re-The following supplementary information is supplied to ' placement costs, net of accumulated depreciation, are show the estimated effects of inflation hecause the Company - estimated at $12.1 billion as restated for " constant dollars" is required to do so, according to the Statement of Financial and $12.7 billion as restated for " current costs". Under the - Accounting Standards No. 33. *lhe methods required to de-. ' " constant dollar" method, the Company is required to restate velop this information are approximate and complex, and - the original costs in terms of dollars of equal purchasing - may not necessarily reflect the true effects of inflation on the ~ power, as measured by the Consumer Price Index for all Ur-Company. Under existing regulatory law, the Company is per-han Consumers The " current costs" method uses Handy-mitted to recover actual operating and capital costs incurred Whitman Indices of Public Utility Construction Costs. Re. to -rve customers and a reasonable return on investment, suits from the two methods diner because construction : and the Cosapeny believes it will be allowed to recover cost costs have increased more rapidly than consumer prices in increases caused by inflation as such increases are actually general. Under the " current cost" method, the effect incurred. ' ($441 million) of general inflation in 1983 on net utility. Effect of Inflation on Sepoeted lacosne. In plant was greater than the increase ($204 million) in spe. -l adjusting the Consoll'ated Statements of Income, as shown . cific prices by $147 million while the effect of general inflam below, only depreciation expense was adjusted for the effect tion was less than specific prices by $9 million in 1982 and of inflation. The

• constant dollar
• and "r.urrent cost" de-greater than specific prices by $205 million, $225 million, preciation expenses were determined by applying the Com-and $93 million in 1981,1980, and 1979, respectively, ex-penyh depreciation rates to restated 1983 average pressed in average 1983 dollars, in the Conspany) opinion, -

depreciable plant in service, Other Operating Expenses were the " current costs" method is more appropriate for estima. - not requierd to be adl-=d - sing the effect of inflation on utility plant.; ~ S4 v.ma. R

Consolidated Statements of Income Adjusted for Inflation for the Year Ended December 31,1983 (Thousands of Dollars, except per share amounts) As Adjusted For Conwant Dollars Current Cost As Reported (Average 1983 Dollars) (Average 1983 Dollars) Operating Revenues $2,S96,050 $2,596,050 $2,596,050 Depreciation 165,327 384,817 435,983 Other Operating Expenses 2,03""016 2,037,016 2,037,016 Operating income 393,707 174,217 123,05i Other Income 192,913 192,913 192,913 Income Before Interest Charges & Preferred Stock Dividends 586,620 367,130 315,964 - ' Interest Charges and Preferred Stock Dividends 264,915 264,915 264,915 Earnings Applicable to Common Stock" $ 321,705 $ 102,215 51,049 Earnings Per Average Share" 2.40 0.76 0.38

• Earnings applicable to Common Stock for 1982,1986,1980, and

" Earnings per average share fur 19H2,1981,1980, and 1979, based 1979, restated in average 1983 dollars, amounted to $91 million, on the restated earnings, were $0.78, $0.67, $0.69 and $0.63, re- $67 million, $60 million, and $51 million. respectively, for Constant spectively, for Constant Dollars, and $0.43 and $0.25 for 1982 and Dollars, and $50 million and $25 million for 1982 and 1981 and losses 1981 and hisses of $0.03 and $0.11 for 1980 and 1979 for Current of $3 million, and $9 million for 1980 and 19 79 for Current Costs. Costs. Effects of inflation on Shareholders' Equity. $526 million for 1979 (1982,1981,1980 and 1979 ex. The effect of inflation on the Company's actual original pressed in average 1983 dollars) and would totally or par-cost of net utility plant amounted to $250 million for 1983, tially offset the effect of inflation on utility plant, ($230 million for 1982, $502 million for 1981, $688 mil-If the Company had earned at the rate ofinfla-tion for 1980 and $766 million for 1979 expressed in aver-tion ( 4.8%) on its common shareholders' equity in 1983, earn-age 1983 dollars). These inflationary effects were not ings would ime been approximately $92 million compared rtcovered because rates are based on depreciation of original with reported earnings of $322 million. Thus, reported earn-cost plant. If the Company were required to charge these ings applicab!c to common stock in 1983 were about $230 amounts against income in 1983 and 1982, earnings applica-million above the level necessary to offset the impact of in-ble to common stock would have been reduced to $72 mil. flation on shareholders' equity. lion and $57 million, respectively, while in 1981,1980 and 1979, earnings applicable to common stock would have be' Adjustment of Selected Five Year Financial come losses of $255 million, $477 million, and $561 mil-Information. lion, respectively. The effect of inflation (3.8% for 1983 In order to reflect the impact of general inflation on selected 3.9% for 1982,8.9% for 1981,12.4% for 1980 and 13.3% for financial information for each of the years 1979 through 1979) on the value of the Company's debt and preferred 1983, the following table shows actual data compared with stock approximated $165 million for 1983, $153 million for data adjusted to 1983 dollars. 1982, $339 million for 1981, $468 million for 1980 and Five Year Summary of Selected Hnancial information Showing Adjustments to Reflect inflation 1983 1982 1981 19H0 1979 Development of Adjustment Factors Consumer Price Index Average During Year 298.4 289.1 272.4 246.8 217.4 Year End 303.5 292.4 28i.5 258.4 229.9 Consumer Price Index Multiplier A = Average (298.4 + Index) 1.00 1.03 1.10 1.21 1,37 B = Year End (303.5 + Index) 1.00 1.04 1.08 1.17 1.32 Actual and Adjusted Maancialinformation Dividends Per Common Share Actual Paid $2,12 $ 2.06 $ 1.90 $ 1.80 $ 1.80 Adjusted (Actual x A) $2.12 $2.12 $2.09 $ 2.18 $2.47 Market Price Per Common Share Actual Year End $14.38 $ 17.00 $13.63 $ 12.50 $13.75 - Adjusted (Actuai x B) $14.38 $ 17.68 $ 14,72 $14.63 $18.15 Operating Revenues (thousands of dollars) Actual $2,596,050 $2,64 i,753 $2,433,425 $2,123,394 $ 1,578,505 Adjusted (Actual x A) $2,5%,050 $2,724,096 $2,676,768 $2,569,307 $2,162,552 Common Shareholders' Equity (thousands of dollars) Actual Year End $2,%9,323 $2,254,435 $1,963,527 $1,733,614 $ 1,580,004 Adjusted (Actual x B) $2,569,323 $2,344,612 $2,120,609 $ 2,028,328 $2,085,605 3,

--v------ I i l FinancialStatistics i M Summary of Earnings (Millions of Dollars) _h a For the Year Ended 1 _983 1982 1981 1980 1979 I978 1973 Operating Revenues (for details sce pighs 3F iid 39) $2,596.0 $ 2.64 4.8 $2,4 33.4 $2.123.4 $ 1,578.5 $ 1,4 56.8 $766.6 Operating Expenses Fuel and Energy Interchange 986.6 1,128.5 1,187.6 1,090.5 661.7 573.9 260.3 labor 317.2 291.1 256.8 232.1 209.3 195.0 125 6 Other Materials. Supplies and Services 354.6 320.5 260.9 184.5 155.4 135.0 65.5 Total Operation and Maintenance 1658.4 1,740.1 1,705.3 1,507.1 1,026.4 903.9 451.4 165.3 143.8 130.3 122 9 120.6 116.5 64.3 Depreciation .w Taxes 378.6 372.2 . 274.8 227.4 185.7 194.7 102.5 Total operating Expenses 2,202.3 2,256.1 2,110.4 1,857.4 1,332.7 1,215.1 618.2 Operating income 393 7 388.7 323.0 266.0 _ 245.8 241.7 148.4 Other income Allowance for Other Funds Used During Construction 108.1 65.7 65.0 50.5 46.0 37.6 58.7 = Income Tax Credits, net 87.9 75.8 03.2 49 0 33.9 26.3 3.4 Other, net (31) (0 1 2.5 3.4 1.7 4.6 2.7 Total Other income 192.9 I40.8 130.7 102.9 81.6 68.5 64.8 Income Before Interest Charges 536.6 529.5 453.7 368.9 327.4 310.2 213.2 Interest Charges long-Term Debt 330.2 308.9 266.7 225.0 193.0 176.3 84.8 Short. Term Dcht 35.2 32.0 33.2 13.9 7.3 2.5 5.5 Allowance for Borrowed Funds Used During Construction (167.9) (147.6) (1238) (97.1 ) (67.4) (53.4) Net interest Charges 197.5 193.3 176.1 141.8 132.9 125.4 90.3 Net Income 389.1 336.2 277.6 227.1 194.5 184.8 122.9 Preferred Stock Dividends 67.4 57.6 53.8 52.2 44.8 43.5 27.6 m Earnings Applicable to Common Stock 321.7 278.6 223.8 174.9 149.7 141.3 95.3 Dividends on Common Stock 283.6 240.5 189.5 157.4 145.0 135.7 78.4 Earnings Retained $ 38.1 38.1 $ 34.3 $ 17.5 $ 4.7 5.6 $ 16.9 Earnings Per Average Common Share (Dollars) $ 2.40 $ 2.39 $ 2.25 $ 2.00 $ 1.86 $ 1.87 $ 1.99 Dividends per Common Share (Dollars) $ 2.12 2.06 $ 1.90 $ 1.80 $ 1.80 $ 1.80 $ 1.64 m Common Stock Equity (Per Share) $ 17.99 $ 17.93 $ 18.10 $ 18.72 $ 19.06 $ 19.28 $20.22 W Average Shares of Common Stock j Outstanding (Millions) 133.9 116.5 99.6 87.3 80.5 75.4 47.8 ] See luge 21for Management > Discussion and Analysts of Financial Condition and Results of Operations. s Ratings on Philadelphia Electric Company & Securities Ej MortpaJte Bonds Dcbentures Preferred Stock d Agency Rating Date Established Ratindate Established Rating Date Estahtished Duff and Phelps,Inc. 9 3f80 10 3/80 1I 2/83 ] Fitch Investors Service BBB 9/82 BBB-9/82 BB + 9/82 Moodyh Investors Service Bia3 I/83 Bal I/83 bal I/83 Standard and Poort Corporation BBB-9/82 BB+ 9/82 BB 9/82 i l n) i 11 -E 36 a x

i t Summary of Financial Coadition December 31 (Millions of Dollars) 1983 1982 1981 1980 1979 1978 1973 Assets Utility Plant, at original cost $8,864.2 $7,905.7 $7,044.7 $6,415.7 $ 5,885.5 $5,502.5 $3,672.1 less: Accumulated Depreciation 1,592.0 1,450.1 1,330 6 1,235.7 1,144.1 1.053.3 665.4 Net Utility Plant 7,272.2 6,455.6 5,714.1 5,180.0 4,741.4 4,449.2 3.006.7 investments 99.4 91.4 77.8 58.7 47.4 30.0 11.5 03rrent Assets Cash and Temporary Cash Investments 65.2 50.0 30.7 6.7 10.6 38.6 26.1 Accounts Receivable 338.6 342.2 342.4 300.3 230.9 223.5 75.6 Inventories 131.1 143.0 132.2 121.1 110.0 93.3 40.2 Deferred Energy Costs 149.3 (85.4) (31.3) 1I O 83.5 4.2 Other 7.6 7.7 6.8 6.2 4.6 4.3 6.1 Deferred Debits 80.4 24.7 31.5 18.5 12.9 7.5 9.9 Total $8,143.8 $7.029.2 $6.304.2 $ 5,702.5 $5.241.3 $4.850.6 $3.176.1 Capitalization and Liabilities Common Stock $ 2,110.5 $ 1,826.2 $ 1,572.4 $ 1.377.4 $ 1,239.6 $ 1,139.7 $ 771.8 Other Paid.In Capital 5.9 4.6 3.9 2.6 2.2 2.0 1.3 Retained Earnings 452.9 423.6 387.2 353.6 338.2 333.6 286.2 Common Shareholders' Equity 2,569.3 2,254.4 1,963.5 1,733.6 1,580.0 1,475.3 1,059.3 Preferred Stock: Without Mandatory Redemption 522.5 372.5 372.5 372.5 372.5 372.5 297.5 With Mandatory Redemption 284.9 292.3 266.9 274.3 206.8 210.9 114.5 inng-Term Debt 3,381.8 3.028.5 2,745.7 2,371.9 2,241.9 2,173.2 1.319.1 Total Capitalization 6,758.5 5,947.7 5,348.6 4,752.3 4,401.2 4,231.9 2,790.4 Current 1. labilities Short. Term Debt 267.5 64.7 54.2 52.6 85.2 16.2 147.7 Long. Term Debt due within one year 21.3 36.1 130.8 127.8 52.9 67.4 Accounts Payable and Dividends Declared 179.9 188.5 188.9 187.6 133.5 120.3 67.4 Taxes Accrued and Deferred 102.3 22.6 51.4 77.8 65.1 44.5 18.1 Interest Accrued 91.8 99.8 82.3 64.9 58.1 51.0 21.9 Other 17.3 24.7 18.1 17.4 13.9 7.9 5.4 Deferred Credits and Other Liabilities 726.5 659.9 524.6 419.1 356.5 325.9 57.8 Total $8,143.8 $7,029.2 $6.304.2 $ 5.702.5 $5.241.3 $4.850.6 $ 3.176.1 a 37

Operating Statistics ELECTRIC OPERATIONS 1983 1982 1981 1980 1979 1978 1973 Output (millions of kilowatthours) Steam 10,457 8,598 9,93I I I,234 11,279 13,160 18,536 Nuclear 5,520 10,743 7,464 7,333 7.104 7,769 176 Ilydraulic 1,739 1,581 1,397 1,240 2,155 1,700 2,132 Pumped Storage Output 979 1,126 1,101 1,050 1,270 1,109 1,318 ) Pumped Storage lnput (1,427) (1,665) (1,624) (1,526) (1,847) (1,606) (1,876) Purchase and Net Interchange 12,181 11,120 (1,173 9,973 9,180 6,651 7,094 Internal Combustion 491 178 '283 442 454 704 688 Other 528 27 Total Electric Output 29,940 31,681 30,253 29,746 29,595 29,487 28,095 Sales (millions of Lilowatthours) Residential 8,467 7,877 8,014 8,341 7,963 7,875 7,49a Small Commercial and Industrial 3,284 3,142 3,115 3,065 2,928 2,888 2,663 12rge Commercial and Industrial 14,478 14,178 14,916 15,056 15,428 15,302 14,953 All other 1,003 1,012 1,005 1,159 1,277 1,329 1,192 Service Territory 27,232 26,209 27.050 27,621 27,601 27.394 26,301 Jersey Central Power and Light (Salem *2) 346 3.352 1,218 Total Electric Sales 27,578 29,561 28,268 27,621 27,601 27.394 26,301 Number of Customers, December 31 Residential 1,217,635 1,206,944 1,200,238 1,190,312 1,173,514 1,158,853 1,103,163 1 Small Commercial and Industrial 119,292 118,407 117,016 116,808 115,724 115,945 118,009 large Commercial and Industrial 5,437 5,616 5,790 5,820 5,798 5,780 5,663 All Other 751 762 746 736 1,919 2,413 2,207 Total Electric Customers 1.343,115 1,331.729 1,323,790 1,313,676 1,296,955 1.282,991 1,229,042 Operating Revenues (millions of dollars) Residential $ 744.0 $ 694.4 $ 643.7 $ 607.8 $ 461.0 $ 430.8 $254.4 Small Commercial and Industrial 316.6 310.6 285.9 249.8 I89.0 176.5 97.5 1arge Commercial and Industrial 877.4 922.3 917.1 813.9 587.4 544.0 257.5 All Other 139.4 I I 8.3 109,5 95.4 74.5 73.1 37.4 Service Territory 2,077,4 2,045.6 1,956.2 1,766.9 I,311.9 1,224.4 646.8 Jersey Central Power & IJgh:1 Salem *2) 30.5 135.4 45.9 Total Electric Revenues $2,107.9 $2,181.0 $2,002.1 $ 1,766.9 $ 1,311.9 $ 1,22 4.4 $646.8 Operating Expenses (millions of dollars) Operating expenses excluding depreciation $1,592.0 $ 1,688.4 $ 1,586.5 $ 1,414.0 $ 975.4 $ 896.3 $458.9 Depreciation 150.9 130.2 117.3 11_1.1 110.0 106.3 57.5 Total operating Expenses $1.742.9 $ 1,818.6 $ 1.703,8 $ 1,525.1 $ 1,085.4 $ 1,002.6 $516.4 Electric Operating income (millions of dollars) $ 365.0 $ 362.4 $ 298.3 $ 241.8 $ 226.5 $ 221.8 $ 130.4 Average Use per Residential Customer (kilontthours) Without Electric !!cating 6,319 5,875 6,022 6,4 I i 6,227 6,290 6,581 With Electric ileating - 16,523 16,813 18,054-19,482 20,760 21,884 24,0?7 Total 6,990 6,544 6,699 7,058 6,829 6,833 6,829 Electric Peak load, Demand (thous kw) 5,879 5,691 5,731 6,095 5,641 5,667 5,760 Net Electric Generating Capacity - Year End Summer rating (thous kw) 7,974 8,006 8,006 7,698 7,727 7,727 6,650 Cost of Fuci per Million iku - 2.25 1,57 2.10 1.90 1,55 1.29 ,71 Bau per Net Kilowatthout Generated 10,906 10,918 10,930 10,787 10,810 10,773 10,523 38

i GAS OPERATIONS 1983 1982 1981 1980 1979 1978 1973 Sales (millions of cubic feet) Residential 2,168 642 2,446 2,461 2,327 2,316 2.317 Ilouse flesting 22,981 2 '7 24,675 23,671 23,593 24,974 24,125 Commercial and Industrial 39,043 .e. ) 45,670 42,890 37,452 32,784 37,868 l All Other 672 4 127 92 93 94 90 Total Gas Sales 64,864 68,7( 72,918 69,114 63,405 60,168 64,400 Number af Customers, December 31 Residential 72,501 76,63 78,426 81,346 85,315 87,715 91,682 Ilouse IIcating 206,443 198,91 193,038 182,246 168,905 163,469 163,096 Commercial and Industrial 22,810 22,32. 21,578 20,197 19,065 19,207 20,518 Total Gas Customers 301,754 297,872 293,042 283,789 273,285 270,391 275,296 Operating Revenues (millions of dollars) Residential $ 19,1 $ 18.1 $ 15.4 $ 14.0 $ 10.7 9.9 6.7 Ilouse lleating 165.8 147.1 128.5 108.5 91.2 86.6 51.3 Commercial and Industrial 227.3 221.1 209.7 166.7 118.4 92.2 39.8 All Other 3.0 1.8 0.5 0.3 0.2 0.2 2.3 Subtotal 415.2 $388.1 $354.1 $289.5 $220.5 $ 188.9 $ 100.1 Other Revenues 1.8 2.3 2.3 1.2 0.6 0.6 .4 Total Gas Revenues $417.0 $390.4 $356.4 $290.7 $221.1 $ 189.5 $ 100.5 Operating Expenses (millions of dollars) Operating expenses excluding depreciation $377.6 $354.1 $322.0 $258.0 $ 194.4 $ 163.0 $ 77.9 Depreciation 12.7 11.9 11.3 10.2 8.9 8.6 5.7 Total operating Expenses $390.3 $366.0 $333.3 $268.2 $203.3 $ 171.6 $ 83.6 Gas Operating Income (millions of dollars) $ 26.7 $ 24.4 $ 23.1 $ 22.5 $ 17.8 $ 17.9 $ 16.9 STEAM OPERATIONS Sales (millions of pounds) 4,552 5.086 5,484 6,044 6,581 7,336 7,762 Number of Customers, December 31 545 571 593 618 638 660 723 Operating Revenues (millions of dollars) $ 71.1 $ 73.4 $ 74.9 $ 65.8 $ 45.5 $ 42.9 $ 19.4 operating Expenses (millions of dollars) Operating expenses excleading depreciation $ 67.4 $ 69.8 $ 71.6 $ 62.4 $ 42.3 $ 39.3 $ 17,2 Depreciation 1.7 1.7 1.7 1.7 1.7 1.6 1.1 Total operating Expenws $ 69.1 $ 71.5 $ 73.3 $ 64.1 $ 44.0 $ 40.9 $ 18.3 Steam Operating Income (millions of dollars) 2.0 1.9 1.6 1.7 I.5 2.0 1.1 i Electric Sales (including Salem Unit No 2) Gas Sales j .mwinn or u.a.,wanimwn n.n na ruh c teci to ?9 4 7'K o v s '&!c~ i (\\ t ? ~.; 4r ' r-is 3 to s I, t., o.: .y E hiresl'au he i 39

Sharehoklerinformation Stock Exchange Listings 1-800-223-7326. From within Pennsylvania, dial Most PE Securities are listed on the New Wrk 1 H00 242-7326. local Philadelphia calls should be made to Stock Exchange and the PhiladcIphia Stock Exchange. Phila. H 615795. delphia Electric Power Company Dchentures are listed on the Philadelphia Stock Exchange. Annual 31ecting The Annual Sleeting of the Shareholders of the Dividends Company will be held on April 11,19H1, at 10:30 A.NI. at the The Company has paid dividends on its com-Franklin Plaza flotel,17th & Race Streets, Philadciphia. PA. mon stock contmually since 1902. The Ik>ard of Directors Common stock shareholders of record at the normally considers common stock dividends for pay ment in close of business on Starch 2,1984 are entitled to vote at this Starch, June, September and December. meeting. The Company estimates that 100% of the Notice of the meeting, pro.(y statement, and $2.12 per share disidend paid to common shareholders in proxy will be mailed under separate cmer. Prompt return of 1983 represents a return of capital w hich is not taxable as the proxies will be appreciated. dividend income for federal income tax purposes. In addi-tion, for 19H3,93% of preferred dividends are not taxable. Form 10-K Form 10-K. the annual report filed with the Dividend ItcInvestment and Securitics and Exchange Commission, is available, without Stock Purchase Plan charge, to shareholders upon written request to Philadelphia Shareholden may use their dividends to pur-Electric Company,2301 Starket Street, PO. Ik>x 8699, Phila-chase additional shares of common stock through the Com-delphia, PA 19101. Attn: Financial Division. pany's Dividend Reinvestment and Stock Puahase Plan. The Company pays all brokerage and service fees. Shareholders All common and preferred shareholders h.nc The Company has 300,257 shareholders of the opportunity to invest additional funds in common stock record of common stock, a 24% increase in 5 years. of the Company, whether or not they have their dividends reinvested - also with all fees Imrne by the Company. Transfer Agtnts and Registrars The Plan has been amended to enable eligible PillLNDELPillA ELECTRIC CONIPANY - Pr(ferred and Com-individual participants in the Plan to elect to defer federal mon Stocks income tax on up to $1,500 of reimested dividends per year Registrars: Girard llank, One Girard Plaza. Phila., as provided by the Economic Recovery Tax Act of 1981. PA 19101 Os er 30% of the common shareholders are alorgan Guaranty Trust Co. of NY,30 W. participants. In 1983, they invested more than $77 million Ilroadway, NY, NY 10015 through the Plan, including cash payments. Information con-Tramfer Philadclphia Electric Company,2301 cerning this Plan may be obtained from 31. W. Rimerman, Agents: Starket St., Phila., PA 19101 Treasurer, Philadelphia Electric Company, 2301 Starket Storgan Guaranty Trust Co. of NT, 30 W. Street, PO. Inox N699, Philadelphia, PA 19101, tiroadway, NY, NY 10015 PillLADELPillA ELECTRIC COMPANY-Fint and Refunding Comments Welcomed Afortgage Ikmd5 The Company always is pleased to answer Trustec: The Fidelity llank, llroad & Walnut Sts., Phila., questiom and provide information. Please addrew }our com-PA 19109 ments to Ntrs. L. S Ilinder, Secretary, Philadelphia llectric New York Storgan Guaranty Trmt Co. of NY, Company, 2301 Ntarket Street, PO, lksz H699, Philadelphia, Agent: 30 W. Ilroadway, NT, NT 10015 PA 19101. PillLADI I PillA FLECTRIC CONIPANY - Debentures inquiries relating to shareholder accounting PillLADELPillA ELECTRIC POWER CONIPANY (A Subsidiary) records, sto(k tran fer and change of addren should be di- - Dchentures rected to Philadelphia Electric Company,2301 Starket Street, Trustre: The Philadelphia National liank, llroad & PO Ilox H699, Philadelphia, PA 19101, Attn: Sto(k Tramfer Chestnut Sts., Phila., PA 19101 MTtion. New York Irving Trust Co. One Wall Street, Agent: NT, NY 10015 Toll-Free Telephone Ilne Toll free telephone lines are asallable to the General Office Companyhhareholden for inquiries concerning their stock 2301 Alarket Strect, PO Ik>x 8699, Phila., PA ou nenhip. When calling from outside of Penm)lvania, dial 19101. (21$) H 614000. NYSE - Composite Common Stock Prices, Earnings and Dividends by Quarters (Per Share) 1983 1982 t ourth 1hird Second lint Fourth Third Second Fint Quarter Quartcr Quarter Quarter Quarter Quarter Quarter Quarter liigh Prke $1H!n $ 174 $1H% $1H $ 17b $ 16% $l$h $114 inw~ Prke $13% $15% $16% $16% $ 154 $ 134 $13 $134 l atnings 4Hf 784 444 70f ilt 738 428 71* Divi lends 534 $3t 53t $34 53* 13* Soc $0* 40

.7 m. q r. r Directees Officers \\ _3 = jg -t + % John H. Austin,Jr.. James L Everett l1 Philip G. Mu'lligan. \\' ice President , Presidrnt and Chief Operwting Oficer l Chairman of the Board g;&_ ~, ' Gas Operations c-of the Company. and ChiefExecutits oficer i William T, Coleman, Jh., Esq. John II. Austin,Jr. Y . Clair V. Myers . Senior nortner ofthe inev)frm L President and Chief Operating Oficer Vice President ' ofuMetteny & Mywrs ' Vincent S. Boyer FurchasinR and GeneralSert ices l . M. Mlter D'Alessio - . Nuclear Pouer ' Vice President Senior Vice President Joseph E Paquette,Jr. President and ChiefExecutist Oficer Latimer & Buck, Inc. Edward G. Bauer,Jr. Finance and Accounting ' (Mortgege Banking and Rast Estate Vice President and L' . Lucy S. Binder l' L = ^) - General Counsel Secretary eJames L Everett - Clifford Brenner Chntrman ofIbe Bonrnt. Vice President V _ Morton W. Rimerman Treasurer and ChiefEntsetist O ficer ~ Corporate Communications a James D. Lynch f

• l

'**A*"Y

• lhomas W. Coppock

' Assistant Secretary William S. Fishman... . Vice President Chairman and ChiefEncutine Oficer J Robert Cau ton

ARA Sere 4ces, Inc. (Sert 4ce Management). Electric Transmission Assistant Treasurer and Distribution J o Robert E Gilkeson......

Shields L Daltroff Assi ta t Treasurer Chairman of the Encutise Committee L . Vice President ~ ~ - - oWilliam W. Hagerty Electric Production William M. Lennox,Jr. President, Dremi Unisersity - Charles L Fritz M Robert D. Harrison ' Vice President

Vice Chntrman 1%rsonnelandindustrial Relations

John hsenanher, Pedade$6dn

. Raymond E Iloiman (Marchendtsing) ' - Vice President ' Faul R. Kaiser General Administration Chnirnenn Emerdress John S. Kemper

Tasty Rnking Compnny Vice President (DisersQFedManz"- ; e; g)

Engineering and Research Joseph C. ladd William B. Morlok. 3 Preedernet and ChiqfEncantiew Og8cer. . Vice President i Ndelity Mutanni Lgir insannonce Compnny - Commercial Operations ~s =Ed6theJ. levit, M.D. Prenddent nsed Ddrector ~ Nationni amend c/Meddasi K.memissers s Joseph J. Mcimugidia - Preeddent and Cade/smestne ogscer - = ; - 'Matunt snetnee anne

i Meanber of the Esecessive e-ittee.

\\ ~ h ~ 5 g e .i _2 ~ .g ,q. ] ~ y, p a 0 ^ "i r_ / 3 8 o 3 d-9 Y p N r i c M N

I u u k yhDf. j)h4 yg s[A-M@i.cg %;gg g'

• ^

ifi y' aw eg_ v$' y W18!

;jQ)jss v

~ a:h5! 3 t Z%h i islss L7 y& W -;q)dd'%,

l2$kli%i$pe, m

gggg pra u:, r a ~ C;aQ N 'ib$ sifiNW:%?@?$ h50 0f A$1C; * ?'i ? T: yFTfiy: & - F ~ 5tBMM+

~r* "W

- r r ' - L jesy cr~, 9*yy '. ' (

• >il_,

p O h 3 I s x \\ = ~.. ~ ,5 ' A i 3-7 3 / '!f f' M._f__' 1h % g. / ,~I .~' .(.G}, m a; t i* \\ ..,m. ^ m 11h _ _ _ _ _ _ _ _ _ _ _ _}}