ML20084J472
| ML20084J472 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 05/05/1984 |
| From: | Schnell D UNION ELECTRIC CO. |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML20084J476 | List: |
| References | |
| ULNRC-812, NUDOCS 8405090121 | |
| Download: ML20084J472 (601) | |
Text
f UNION ELECTRIC COM PANY 190 8 GRATIOT STREET ST. Louis, MISSOURI M AILING ADD.E..:
P. O. SOM 149 DON ALD F..CHNELL May 5, 1984
.r. Lou.......ou.,.....
Mr. Harold R.
Denton Director of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C.
20555
Dear Mr. Denton:
ULNRC-812 A
DOCKET NUMBER 50-483 CALLAWAY PLANT, UNIT 1 FINANCIAL QUALIFICATION INFORMATION
Reference:
NRC letter dated May 4, 1984, from B.
J.
Youngblood j
The referenced letter requested an update of i.nformation concerning the financial qualifications of Union Electric Company.
Transmitted herewith are responses to questions in the referenced letter.
This submittal supplies the updated financial information from our original submittal in ULNRC-465 dated July 17, 1981.
-Due to time constraints, we are providing three copies of the requested responses and two copies of all supporting material.
This information is hereby incorporated into the Callaway Application.
Very truly yours, f
Donald F.
Schnell L
DJW/lw t
I 8405090121 e40505 9
PDR ADOCK 05000483
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STATE OF MISSOURI )
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Donald F. Schnell, of lawful age, being first duly sworn upon oath says that he is Vice President-Nuclear and an officer of Union Electric Company; that he has read the foregoing document and knows the content thereof; that he has executed the same for and on behalf of said company with full power and authority to do so; and that the facts therein stated are true and correct to the best of his knowledge, information and belief.
r f
By
/
Donald F.
Schnell Vice President Nuclear SUBSCRIBED and sworn to before me this M day of
,198N f
r BARBARA J. PF FF NOTARY PUBUC, STATE Of MISSOURI MY COMMISSION EXPlRES APRIL 22.1985 ST. LOUIS COUNTY 1
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cc:
Glenn L. Koester Vice President Operations Kansas Gas & Electric P.O. Box 208 Wichita, Kansas 67201 Donald T. McPhee Vice President.
Kansas City Power and Light Company 1330 Baltimore Avenue Kansas City, Missouri 64141 Gerald Charnoff, Esq.
Shaw, Pittman, Potts & Trowbridge 1800 M. Street, N.W.
Washington, D.C.
20036 Nicholas A.
Petrick Executive Director SNUPPS 5 Choke Cherry Road Rockville, Maryland 20850 John H. Neisler Callaway Resident Office U.S. Nuclear Regulatory Commission RR$1 Steedman, Missouri 65077 l.
l William Forney
[
Division of Projects and l
Resident Programs, Chief, Section lA U.S. Nuclear Regulatory Commission Region III 799 Roosevelt Road Glen Ellyn, Illinois 60137 Bruce Little Callaway Resident Office l
U.S. Nuclear Regulatory Commission RR$1
(
Steedman, Missouri 65077 l
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SNUPPS-C Question 1.a.
Indicate the estimated annual cost by year to operate each unit of the subject facility for the first five full years of each unit's commercial operation.
The types of costs included in the estimates should be indicated and include (but not necessarily be limited to) operation and maintenance expense (with fuel costs shown separately), depreciation, taxes and a reasonable return on investment.
(Enclosed is a form which should be used for each unit for each year of the five year period.)
Indicate the projected plant capacity f actor (in percent) for each unit during each of the five years.
Provide separate estimates using 50 percent and 60 percent plant capacity f actors.
1.b.
Indicate the unit price oer kWh experienced by each applicant on system-wi S sales of electric power to all customers for the most recent 12-month period.
Response 1.a.
See Tables 1-1 through 1-15.
Tables 1-1 through 1-5 provide the requested information for capacity factors which reflect historical capacity f actors of similar nuclear units.
Tables 1-6 through 1-10 and Tables 1-11 through 1-15 provide requested information for 50 percent and 60 percent capacity factors, respectively.
Transmission expense on Tables 1-1 through 1-15 represent annual right-of-way maintenance clearing, tower painting, and insulator and line maintenance.
1.b.
The unit price of system-wide sales of electrical power to all customers for 12 months ending March 31, 1984 was (4.888g)/kWh.
9
SMUPPS-C TABLE l-1 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1985 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant f actor 49.6%)
(10100)
Other operating expenses.
23100 Maintenance expenses.
15400 Total nuclear power generation.
31602 (includes Decommissioning expense)
Transmission expenses 131 Administrative and general expeases Property and liability insurance.
7085 Other A.&G expenses 4218 Total A.&G expenses.
11303 TOTAL O&M EXPENSES 43036 Depreciation expense.
71129 Taxes other than income taxes Property taxes.
44200 Other 8328 Total taxes other than income taxes 52528 Income taxes - Federal.
(85646)
Income taxes - other (5954)
Deferred income taxes - net (58000)
Investment tax credit adjustments - net 47,400 (1)
Return (rate of return: 11.98%)
323,196 TOTAL ANNUAL COST OF OPERATION 387,689 (1)
Includes non-cash portion of common equity return which is to be i
deferred (1985-1988).
l l
SNUPPS-C TABLE l-2 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 56.2%)
(4890)
Other operating expenses.
23300 Maintenance expenses.
15600 Total nuclear power generation 36975 (includes Decommissioning expense)
Transmission expenses 143 Administrative and general expenses Property and liability insurance 7776 Other A.&G expenses 4454 Total A.&G expenses.
12230 TOTAL O&M EXPENSES 49348 Depreciation expense.
80613 Taxes other than income taxes Property taxes.
44200 Other 15528 Total taxes other than income taxes 59728 1
Income taxes - Federal.
(87703)
Income taxes - other.
(6097)
Deferred income taxes - net 2800 j
Investment tax credit adjustments - net 45600 (1) i Return (rate of return: 11.98%)
307946 TOTAL ANNUAL COST OF OPERATION 452,235 l
(1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
l l
l l
SNUPPS-C TABLE l-3 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 70%)
S 52629 Other operating expenses.
21100 Maintenance expenses.
14100 Total nuclear power generation.
90771 (includes Decommissioning expense)
Transmission expenses 153 Administrative and general expenses 8148 Property and liability insurance.
4729 Other A.&G expenses Total A.&G expenses.
12877 TOTAL O&M EXPENSES 103801 100435 repreciation expense.
Taxes other than income taxes 44200 Property taxes.
Other 23400 Total taxes other than income taxes 67600 Income taxes - Federal.
23843 Income taxes - other.
1657 Deferred income taxes - net (23400)
Investment tax credit adjustments - net (6000)
(1)
Return (rate of return: 11.98%)
300446 TOTAL ANNUAL COST OF OPERATION 568,382 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SNUPPS-C TABLE l-4 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 59.9%)
S 43739 Other operating expenses.
23500 Maintenance expenses.
15600 Total nuclear power generation.
85791 (includes Decommissioning expense)
Transmission expenses 166 Administrative and general expenses Property and liability insurance.
8556 Other A.&G expenses 5020 Total A.&G expenses.
13576 TOTAL O&M EXPENSES 99533 Depreciation expense.
102161 Taxes other than income taxes Property taxes.
44200 Other 32172 Total taxes other than income taxes 76372 Income taxes - Federal.
106403 Income taxes - other 7397 Deferred income taxes - net 55000 Investment tax credit adjustments - net (6000)
(1)
Return (rate of return: 11.98%)
281853 TOTAL ANNUAL COST OF OPERATION 722,719 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SNUPPS-C TABLE l-5 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 61.4%)
54974 Other operating expenses.
24700 Maintenance expenses.
16500 Total nuclear power generation.
98971 (includes Decommissioning expense)
Transmission expenses 178 Administrative and general expenses Property and liability insurance 8984 Other A.&G expenses 5330 Total A.&G expenses.
14314 TOTAL O&M EXPENSES 113463 Depreciation expense.
102161 Taxes other than income taxes l
44200 Property taxes.
l Other 42120 l
Total taxes other than income taxes 86320 Income taxes - Federal.
182980 Income taxes - other.
12720 l
Deferred income taxes - net 55800 1
L Investment tax credit adjustments - net (6000) l Return (rate of return: 11.98%)
261440 TOTAL ANNUAL COST OF OPERATION 808,884 l
t I
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SNUPPS-C TABLE l-6 ATTACHMENT FOR ITEM NO. 1.a.
ESTIMATED ANNUAL' COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1985 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant. factor 50%)
(9701)
Other operating expenses.
23100 15400 Maintenance expenses.
Total nuclear power generation.
32001 (includes Decommissioning expense) 131 Transmission expenses Administrative and general expenses 7085 Property and liability insurance 4218 Other A.&G expenses 11303 Total A.&G expenses.
TOTAL OEM EXPENSES 43435 71727 Depreciation expense.
Taxes other than income taxes 44200 Property taxes.
Other 8328 Total taxes other than income taxes 52528 Income taxes - Federal.
(85752) l Income taxes - other.
(5961)
Deferred income taxes - net (58078)
Investment tax credit adjustments - net 47400 (1) 323137 Return (rate of returns 11.98%)
TOTAL ANNUAL COST OF OPERATION.
388,436 (1)
Includes non-cash portion of-common equity return which is to be deferred (1985-1988).
1 l
3
SNUPPS-C TABLE l-7 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%)
(10831)
Other operating expenses.
23300 Maintenance expenses.
15600 Total nuclear power generation.
31034 (includes Decommissioning expense)
Transmission expenses 143 Administrative and general expenses Property and liability insurance.
7776 Other A.&G expenses 4454 Total A.sG expenses.
12230 TOTAL OEM EXPENSES 43407 Depreciation expense.
71727 Taxes other than income taxes Property taxes.
44200 Other 15528 Total taxes other than income taxeo 59728 Income taxes - Federal.
(86137)
Income taxes - other.
(5988)
Deferred income taxes - net 3962 Investment tax credit adjustments - net 45600 (1)
Return (rate of returns 11.98%)
308808
. $, 441,107 TOTAL ANNUAL COST OF OPERATION.
(1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
1
SNUPPS-C TABLE l-8 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%)
34389 other operating expenses.
21100 Maintenance expenses.
14100 Total nuclear power generation.
75231 (includes Decommissioning expense)
Transmission expenses 153 Administrative and general expenses Property and liability insurance.
8148 Other A.&G expenses 4729 Total A.&G expenses.
12877 TOTAL O&M EXPENSES 85561 Depreciation expense.
71727 Taxes other than income taxes Property taxes.
44200 Other 23400 Total taxes other than income taxes 67600 Income taxes - Federal.
28560 Income taxes - other.
1985 Deferred income taxes - net (19735)
Investment tax credit adjustments - net (6000)
(1)
Return (rate of returns 11.98%)
304304 TOTAL ANNUAL COST OF OPERATION.
534,002 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
j
SNUPPS-C TABLE l-9 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING
-UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%)
34347 other operating expenses.
23500 Maintenance expenses.
15600 Total nuclear power generation.
76399 (includes Decommissioning expense)
Transmission expenses 166 Administrative and general expenses Property and liability insurance.
8556 Other A.&G expenses 5020 Total A.&G expenses.
13576 TOTAL O&M EXPENSES 90141 Depreciation expense.
103466 Taxes other than income taxes Property taxes.
44200 Other 32172 Total taxes other than income taxes 76372 Income taxes - Federal.
108795 Income taxes - other.
7563 Deferred income taxes - net 56922 Investment tax credit adjustments - net (6000)
(1)
Return (rate of return: 11.98%)
285,316 TOTAL ANNUAL COST OF OPERATION 722,575 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SNUPPS-C TABLE l-10 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 50%)
43853 Other operating expenses.
24700 Maintenance expenses.
16500 Total nuclear power generation.
87850 __
(includes Decommissioning expense)
Transmission expenses 178 Administrative and general expenses Property and liability insurance.
8984 Other A.&G expenses 5330 Total A.&G expenses.
14314 TOTAL O&M EXPENSES 102342 Depreciation expense 103466 Taxes other than income taxes Property taxes.
44200 Other 42120 Total taxes other than income taxes 86320 Income taxes - Federal.
185770 Income taxes - other 12915 Deferred income taxes - net 58120 Investment tax credit adjustments - net (6000)
Return (rate of return: 11.98%)
264459 TOTAL ANNUAL COST OF OPERATION 807,392
SNUPPS-C TABLE l-ll ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1985 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%)
(53)
Other operating expenses.
23100 Maintenance expenses.
15400 Total nuclear power generation.
41649 (includes Decommissioning expense)
Transmission expenses 131 Administrative and general expenses Property and liability insurance.
7085 Other A.&G expenses 4218 Total A.&G expenses.
11303 TOTAL O&M EXPENSES 53083 Depreciation expense 86067 Taxes other than income taxes Property taxes.
44200 Other 8328 Total taxes other than income taxes 52528 Income taxes - Federal.
(88294)
Income taxes - other (6138)
Deferred income taxes - net (59964)
Investment tax credit adjustments - net 47400 (1)
Return (rate of return: 11.98%)
321639 TOTAL ANNUAL COST OF OPERATION 406,321 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SNUPPS-C TABLE l-12 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1986 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%)
(1224)
Other operating expenses.
23300 Maintenance expenses.
15600 Total nuclear power generation.
40641 (includes Decommissioning expense) 143 Transmission expenses Administrative and general expenses Property and liability insurance...
7776 Other A.&G expenses 4454 Total A.&G expenses.
12230 TOTAL O&M EXPENSES 53014 Depreciation expense.
86067 Taxes other than income taxes 44200 Property taxes.
Other 15528 Total taxes other than income taxes 59728 Income taxes - Federal.
88670 Income taxes - other 6164 Deferred income taxes - net 2083 Investment tax credit adjustments - net 45600 (1)
Return (rate of return: 11.98%)
305825 TOTAL ANNUAL COST OF OPERATION 457,483 (1)
Includes non-cash portion of common equity return which is to be l
deferred (1985-1988).
1
SNUPPS-C TABLE l-13 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1987 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation-Nuclear fuel expense (plant factor 60%)
43493 Other operating expenses.
21100 Maintenance expenses.
14100 Total nuclear power generation.
81635 (includes Decommissioning expense)
Transmission expenses 153 Administrative and general expenses Property and liability insurance.
8148 Other A.&G expenses 4729 Total A.&G expenses.
12877 TOTAL OEM-EXPENSES 94665 Depreciation expense.
86067 Taxes other than income taxes Property taxes.
44200 Other 23400 Total taxes other than income taxes 67600 Income taxes - Federal.
26205 Income taxes - other.
1822 Deferred income taxes - net (21565)
Investment tax credit adjustments - net (6000)
(1)
Return (rate of returns 11.98%)
299811
' TOTAL ANNUAL COST OF OPERATION.
548,605 (1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SMUPPS-C TABLE l-14 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1988 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%)
43864 Other operating expenses.
23500 Maintenance expenses.
15600 Total nuclear power generation.
85916 (includes Decommissioning expense)
Transmission expenses 166 Administrative and general expenses Property and liability insurance.
8556 Other A.&G expenses 5020 Total A.&G expenses.
13576 TOTAL O&M EXPENSES 99658 Depreciation expense.
101948 Taxes other than income taxes Property taxes.
44200 Other 32172 Total taxes other than income taxes 76372 Income taxes - Federal.
106370 7395 Income taxes - other.
I i -
Deferred income taxes - net 54975 Investment tax credit adjustments - net (6000)
(1)
Return (rate of return: 11.98%)
281254 TOTAL ANNUAL COST OF OPERATION 721,972 i
(1)
Includes non-cash portion of common equity return which is to be deferred (1985-1988).
SNUPPS-C TABLE l-15 ATTACHMENT FOR ITEM NO.
1.a.
ESTIMATED ANNUAL COST OF OPERATING NUCLEAR GENERATING UNIT:
CALLAWAY PLANT, UNIT 1 FOR THE CALENDAR YEAR 1989 (thousands of dollars)
Operation and maintenance expenses Nuclear power generation Nuclear fuel expense (plant factor 60%)
53591 Other operating expenses.
24700 Maintenance expenses.
16500 Total nuclear power generation.
97588 (includes Decommissioning expense)
Transmission expenses 178 Administrative and general expenses Property and liability insurance.
8984 Other A.&G expenses 5330 Total A.&G expenses.
14314 TOTAL O&M EXPENSES 112080 Depreciation expense 101948 Taxes other than income taxes Property taxes.
44200 Other 42120 Total taxes other than income taxes 86320 Income taxes - Federal.
183326 Income taxes - other 12745 Deferred income taxes - net 56089 Investment tax credit adjustments - net (6000)
Return (rate of returns 11.98%)
260817 TOTAL ANNUAL COST OF OPERATION 807,325
SNUPPS-C Question 2.
Indicate the estimated costs of permanently shutting down each unit of the facility (decommissioning costs),
stating what is included in such costs, the assumptions made in estimating the costs, the type of shutdown contemplated, and the intended source of funds to cover these costs.
Question 3.
Provide an estimate of the annual cost to maintain each unit of the shutdown facility in a safe condition.
Indicate what is included in the estimate, assumptions made in estimating costs, and the intended source of funds to cover these costs.
Response
The following responds to both questions 2 and 3.
The referenced document is provided as an encisoure to this response.
Reference:
Decommissioning Study for the Callaway Nuclear Plant" by Stone & Webster Engineering Corporation & TLG Engineering, Inc.
Basically, there exists today five different decommissioning alternatives.
These are as follows:
1)
Mothballing (permanent) 2)
Entombment (permanent) 3)
decon (immediate dismantlement) 4)
SAFSTOR (mothballing/ delayed dismantlement) 5)
ENTOMB (entombment / delayed dismantlement)
The referenced study did not analyze the first two alternatives as these were considered impractical.
The third alternative involves immediate dismantlement of the facility-therefore, the question of annual cost of maintaining the unit is not applicable.
This question only applies to the analysis given to the last two alternatives - SAFSTOR & ENTOMB The annual cost to maintain the shutdown facility in a safe condition is given in Table 5.5
" Cost Estimato for ENTOMB" and in Table 5.6
" Cost Estimate for SAFSTOR."
All costs are given in August, 1983 dollars.
The total annual maintenance cost for ENTOMB is i
$82,000.
The total annual maintenance cost for SAFSTOR is
$463,000. (please note that there is an arithmetic error in the Table 5.6 printed for the report-this will be corrected in a future revision).
{
Both ENTOMB & SAFSTOR assume a dormancy period of 30 years.
2-1 1
I SNUPPS-C Table 5.5 & 5.6 list the itemized costs which are included in the total annual maintenance cost.
Table 5.9 lists the " Estimated Annual Manpower Utilization and Activities" for surveillance, maintenance and security.
Table 5.10 lists the " Estimated Annual Manpower Utilization and Activities" for the ongoing environmental monitoring program.
Table 5.11 lists " Security Program Options and Activities" for both the SAFSTOR and ENTOMB alternatives.
Figure 5-2 depicts a " Postulated Staff Organization for the Continuing Care Period."
Figure 5-3 depicts the " Security / Administrative Notification and Reporting Process."
Section 5.6 of the report text gives further discussions on annual surveillance and inspection Costs.
It should be mentioned that the report recommends that the DECON (immediate dismantlement) alternative be adopted in our " decommissioning plan."
The DECON alternative is estimated to be the most economic and probably will be adopted by Union Electric.
Therefore, these annual costs for maintenance will probably not be incurred in decommissioning the Callaway Plant.
The estimated cost of permanently shutting down the Callaway unit (decommissioning cost) is $128,064,000.
This is the estimated cost of the Immediate Dismantling or DECON method, and includes the cost of engineering and planning, site preparation, decommissioning onerations (including the removal, transportation and dlsposal of radioactive materials), and site restoration.
(See Schedule 1, attached.)
The Company proposes to collect the costs of decommissioning from electric customers as a part of the electric rates using the net negative salvage value approach.
The annual provision for the depreciation of decommissioning costs will be computed by subtracting the accumulated depreciation of decommissioning expressed in current year's dollars and then dividing this result by the remaining life of the Callaway Plant.
The assumptions made in this cost estimate are found in the Decommissioning Study, attached hereto.
2-2 L
Y.I J
1.w:.E 5-5 COST ESTI!! ATE FOR EMIO!!B (Thousands of Dollars)
E!!!O!!EIllG COST EST_I!! ATE :
ACTIVITY DECON REMOVE PACK SHIP BURY TOTAL
- 1. Remove Fuel and Source Material a
- 2. Process Liquid Waste 302 137 412 2430 3281 78
- 3. Review Plant Drawings a
- 4. Detailed Rad Survey 60 5.1 Estimate By-Product Inventory 10 g
5.2 Computer Time 70 a
- 5. Total
- 6. Prepare and Submit Possession 60 Only License 19
- 7. Prepare End Product Description 90 8.1 Detailed By-Product Inventory 10 8.2 Computer Time 100
- 8. Total 60
- 9. Define Major Work Sequence 120
- 10. Safety Analysis of operations 31
- 11. Safety Analysis of End Product 31
- 12. Prepare and Submit Plan to MRC
- 13. Receive Possession Only License a
360
- 14. Prepare Activity Specifications
- 15. Prepare Integrated Activity 30 Sequence 6
- 16. Procure Vacuum Drying Equipment 150
- 17. Prepare Detailed Procedures
- 18. Drain /De-Energize N0n-Contaminated a
Systems a
- 19. Drain and Dry Reactor "essel System
- 20. Drain /De-Energize Contaminated a
Systems
- 21. Decon/ Secure / Remove Contaminated g
Systems 966 262 297 129 1005 2659 4
- 22. Prepare Support Equipment For 32 Storage
- 23. Construct Entombment Sarrier 60
- 24. Enclose Steam Generators and 56 Pressuri:er
- 25. Seal Steam Generators and 10 Pressurizer Openings
- 26. Install Pressure Equalization Lines 11
- 27. Decon Floors and Walls 171 a
- 28. Perform Rad Survey NOTE: 'a' indicates that costs are included in the utility staff costs.
1 of 2 4
f:
-b IABLE 5-5 (Cont)
F S
ACTIVITY DEC0!! REMOVE PACK SHIP BURY TOTAL
- 29. Secure Building Access a
- 30. Prepare and Submit Final Report 33 SUBTOTAL ENT0!!BMENT:
966 564 434 541 3435 7428 Doc Staff Cost:
45S3 g
Utility Staff Cost: 9073 5
TOTAL STAFF COST 13656 UNDISTRIBUTED COSTS:
- 1. Health Physics Supplies 165
- 2. Decontamination Equipment 154
- 3. Pipe Cutting and Rigging Equipment 165
- 4. Insurance 166
- 5. Plant Energy Eudget 1750
- 6. Dispose of Solid Waste 986 TOTAL UNDISTRIBUTED COSTS:
3386 TOTAL ENTOMBMENT COST:
966 564 434 541 3435 24470 TOTAL COST +25% CONTINGENCY:
966 564 434 541 3435 30588 ANNUAL HAINTENANCE COST
- 1. Quarterly Inspection 8
- 2. Semi-Annual Environmental Survey 15 1
- 3. Prepare Reports 5
- 4. Health Physics Supplies 4
- 5. Insurance 21 5
- 6. Maintenance 29 I
l TOTAL ANNUAL HAINTENANCE:
82j MAINTENANCE COST DURING 30 YEARS I
DORNANCY:
2460 1
I I
I 2 of 2 I
I
TAbtE 5-6 COST ESTIMATE FOR SAFSTOR (Thousands of Dollars)
ACTIVITY DECON REMOVE PACK SHIP BURY TOTAL i
- 1. Remove Fuel and Source Material a
- 2. Process Liquid Waste 302 137 412 2438 3281
- 3. Review Plant Drawings 78
- 4. Detailed Rad Survey a
5.1 Estimate By-Product Inventory 60 5.2 Computer Time 10
- 5. Total 70
- 6. Prepare and Submit Possession Only License 60 i
- 7. Prepare End Product Description 19 3.1 Detailed By-Product Inventory 90 I
8.2 Computer Time 10
- 8. Total 100
- 9. Define Major Work Sequence 30
- 10. Safety Analysis Of Operations 90
- 11. Safety Analysis of End Product' 31
- 12. Prepare and Submit Plan to NRC 31 1
- 13. Receive Possession Only License a
- 14. Prepare Activity Specifications N/A
- 15. Prepare Integrated Activity l
Sequence N/A
- 16. Procure Vacuum Drying Equipment 6
- 17. Prepare Detailed Procedures 36
?
- 18. Drain /De-Energi:e Non-Contaminated Systems a
- 19. Drain and Dry Reactor Vessel System a
g
- 20. Drain /De-Energize Centaminated a
3 Systems
- 21. Decon/ Secure / Remove Contaminated a
Systems
- 22. Prepare Support Equipment For 32 Storage
- 23. Construct Entombment Barrier N/A l
- 24. Enclose Steam Generators and 3
Pressurizer N/A
- 25. Seal Steam Generators and Pressurizer Openings N/A
- 26. Install Pressure Equalization Lines 11
- 27. Decon Floors and Walls 171
- 28. Perform Rad Survey a
i
- 29. Secure Building Access a
- 30. Prepare and Submit Final Report 33 SUBTOTAL MOTHBALLING:
0 302 137 412 2430 4079 NOTE: 'a' indicates that costs are included in the utility staff costs.
1 of 2
W
=4 TABLE 5-6 (Cont)
ACTIVITY DECON REMOVE PACK SHIP BURY TOTAL Doc Staff Cost:
0 Utility Staff Cost: 7106 TOTAL STAFF COST 7106 UNDISTRIBUTED COSTS:
- 1. Health Physics Supplies 55
- 2. Decontamination Equipment 154 y
- 3. Pipe Cutting and Rigging Equipment 0
- 4. Insurance 94
- 5. Plant Energy Budget 583
- 6. Dispose Of Solid Waste 986 TOTAL UNDISTRIBUTED COSTS:
1872 TOTAL MOTHBALLING COST:
0 302 137 412 2430 13057 TOTAL COST +25% CONTINGENCY:
0 302 137 412 2430 16321 5
l ANNUAL MAINTENANCE COST
- 1. Quarterly Inspection 7
- 2. Semi-Annual En'tironmental Survey 13
- 3. Prepare Reports 5
[3,
- 4. Health Physics Supplies 6
95
- 5. Insurance 188
- 6. Maintenance 41
- 7. Site Security 149
- 8. Plant Energy Sudget 54 TOTAL ANNUAL MAINTENANCE:
MA 4b3
}
l; MAINTENANCE COST DURING 30 YEARS
-A DCR$NCY:
HO10s
\\~SA'i b 3
l3
'3 5
5 g
2 of 2 8
2 3
SCHEDULE 1 4
PAGE 1 0F 1 5
6
('
9 10 11 12 13 UNI 0ll ELECTRIC COMPANY 14
SUMMARY
OF DECOMMISSIONING COSTS 15 (In Thousands) 16 17 18 Alternative & Period Months Estimated Cost
- 19 20 DECON (Imediate Dismantling) 21 Period 1: Preparations 12
$ 16 696 22 Period 2: Decom Activities 42 71 621 23 Period 3: Structure Dismantling 18 39 747
(~4 Total
_5128 064 72
'b 26 ENTOMB (Entombment /DelayedDismantling) 27 Period 1: Preparations 12
$ 12 364 28 Period 2: Entombment 21 16 194 29 Period 3: Close 3
2 030 30 Subtotal 36 30 588 31 Dormancy 360 82/yr.
)
Delayed Dismantling 72 108 849 Total (Entombment, Donnancy, Dismantling) 468 5141 897 34 35 SAFSTOR (Mothballing/ Delayed Dismantling) 36 Mothball 12
$ 16 321 37 Dormancy 360 467/yr.
33 Delayed Dismantling 72 111 171 3p Total (Mothball, Donnancy, Dismantling) 444 5141 502 ff9 f
45 43 44 45 46
' 47 Call costs are in 1983 dollars and include 25% contingency 48 49 50 51 52 53 54 55 56.
o, o
w 60
!61 d2 63 j4 95 8
SNUPPS-C
-Question 4.
Have future decommissioning costs for any nuclear and/or non-nuclear facility owned by the applicant been collected through rates during the useful life of the facility?
If so, cite specific examples and describe the methodology used for inclusion in rates.
Provide the citation and relevant excerpts from any regulatory decisions allowing such decommissioning cost recovery.
Response
Removal (decommissioning) costs of all the Company's in-service facilities have been collected through rates during the useful lives of the facilities.
Estimates of such costs are incorporated into the development of the Company's property and plant depreciation rates and, accordingly, such costs are collected by the inclusion of depreciation expense in rates.
Depreciation rates, which are approved by the state and federal utility regulatory commissions, consist of three elements - capital recovery, salvage and removal costs.
The collection of these three elements are not separately identified in the Company's books of account but are recorded in a combined depreciation reserve account.
A record by account is maintained of actual original plant retired each year and the associated salvage dollars and removal costs.
A salvage factor and a removal factor is calculated each year by relating retirements to the salvage and removal costs incurred.
This provides a basis for comparison of collection rates to rates incurred and for revision if needed.
Periodically, a depreciation study is performed and each element of the depreciation rate is analyzed.
If changes are warranted, the Company requests regulatory approval of revised rates.
The most recent revision in depreciation rates was approved in 1983.
A copy of an excerpt from the State of Missouri order Case No. ER-83-163 plus pages 335 and 336 of the Company's annual report to the Federal Energy Regulatory Commission on Form 1 are attached.
l l
l
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/ '
BEFORE THE PUBLIC SERVICE COMM!SSION
' c OF THE STATE OF MISSOURI CASE NO. ER-83-163 4 5 In the matter of Union Electric Company of St. Louis, Missouri, for a'uthority to file tariffs increasing rates for electric service provided to customers in the Missouri service area of the Company.
APPEARANCES: Paul A. Agathen, Attorney, and James J. Cook, Attorney,
'vjjp Post Office Box 149, St. Louis, Missouri 63166, for Union f,
Electric Company.
Robert M. Lee, Associate General Counsel, Laclede Gas Cocpany, 720 Olive Street, St. Louis, Misseuri 63 01, for Laclede Gas Company.
Michael Madsen, Attorney at Law, 211 East Capitol, Post Office Box 235, Jefferson City, Missouri 65102, and Paul M. Murphy, Attorney at Law, Three First National Plaza, Chicago, Illinois 60602, for Dundee Cement Company.
Robert C. Johnson, Attorney at Law, 720 Olive Street, (f['
24th Floor, St. Louis, Missouri 63101, for ACF Industries,
Inc. ; Anheuser-Busch, Inc.; Ford Motor Cocpany; General Motors Corporation; Mallinckrodt, Inc.; McDonnell Douglas Corporation; Monsanto Company; Nooter Corporation; Pea Ridge Iron Ore Company; PPG Industries, Inc.; and St. Joe Minerals it Corporation.
Robert C. M: Nicholas, Associate City Counselor, 314 City Hall, St. Louis, Missouri 63103, for the City of St. Louis, Missouri, and James J. Wilson, City Counselor.
Richard W. French, Assistant Public Counsel, Office of the Public Counsel, 1014 Northeast Drive, Jefferson City,
. Missouri 65101, for the Office of the Public Counsel and the public.
yWilliam C. Farrelson, Deputy General Counsel, Martin C. Pethicider and Edward J. Cadieux, Assistsnts General Counsei, ;iissouri Public Service Concission, Post o
Orrice Box 360, Jefferson City, Missouri 65102, for the staff of the Mis:curi Public Service Cocsission.,
~
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/
./
[/
ORDERED:
2.
That for the purpose of 1:ple:enting the stipulation and
/
/
Ogree:ent entered into in this proceeding, the revised tariffs filed by the Union Electric Co=pany of St. Louis, Missouri, on Deutber 3,1982, in Case No. ER 83-163 be, and the same are, hereby disapproved, and the Cocpany is authorized to file in lieu thereof, for approval by this Co= mission, tariffs designed to comply with the stipulation and agree =cnt as set forth herein.
ORDERED:
3 That the tariffs to be filed with the Co= mission for Cocunissien approval pursuant to this Report and Order may be effective for service rendered on and after July 10, 1983 ORDERED:
4.
That Union Electric Company shall implement and book new h ' depreciation rates as of August 1, 1983, as specified in paragraph 4 of the stipulation and agree =ent.
ORDERED:
5.
That Union Electric Company shall cease to impose its late payment charge en any custc=er deposits as soon as possible, but in no event later than September 10, 1983 ORDERED:
6.
That Union Electric Company shall revise its booking of c=ployee benefits to distribute them a:cng its accounts consistent with its districution of payroll during the sa=e annual accounting period, upon the effectite 8(*dateofthisRe.portandCrder.
ORDERED:
7.
That pursuar.t to paragraph 7 of the stipulation and Ogreement, Staff shall perform a true-up audit of the Company's projected fuel costs, which shall be presented to the Cocnission in a true-up hearing r.o be hsid April 23, 1984, at 10:00 A$ in the Coc=iasion's hearing room in Jefferson City, Missouri.
ORDERED:
8.
That the lead canagement techniques standard as found in Section 111(d) of the Public Utility Regulatory Policies Act of 1978, P.L.95-617, 16 U.S.C., Section 2601 g seq., be, and it is hereby, adopted and the Company chall perform a study regarding the implementation of the PURPA load canagement Ctandard to be presented to the Cocsission.
_g,
~
rume o' Haror o+at Th.s Arport is.
Dets of Rwort Year of RIport l'nion Electric Cc,cpany n,,,3,,,,p DEPRECI ATION AND AMORTIZATION OF ELECTRIC PLANT (Continued)
C. Factors used in Estimating Depreciation Charges Deprecable Estimated Net Applied Mortahty Average gn, geg%n, Plant Base Avg. Service SaNage Depr. Rate (s)
Curve Remaining No.
No.
(in thousands)
Ufo (Percent)
(Percent)
Type Ufe is?
lbl fc)
(d) fe)
!!)
(g) 12 311
$ 21 332 13 312 22 482 14 314 16 609
~
15 315 8 791 16 316 865 17 70 079 (1) 2.08 18 311 126 547 35
(.03) 2.89 18 19 312 809 245 32
(.06) 3.19 22 20 314 262 465 35
.06 2.80 21 I
21 315 78 072 35
.09 2.77 19 22 316 14 930 29
.21 3.24 19 l
23 1 291 259 (2) 24 1 361 338 (2) 25 331 10 096 91 1.10 59 26 332 54 608 85
(.01) 1.19 55 27 333 26 188 96 1.04 63 28 334 6 330 90
(.02) 1.13 62 29 335 1 606 74
.07 1.28 47 30 336 152 22 4.55 1
31 98 980 32 341 800 25 4.00 18 33 342 1 088 25 4.00 18 34 344 27 623 25 4.00 18 35 345 2 635 25 4.00 19 I
36 346 95 25 4.00 18 37 32 241 38 352 8 149 79
(.06) 1.33 59 39 353 166 628 50 2.00 35 1
40 354 63 296 50
.14 1.86 32 i
41 355 36 442 43
(.4 7) 2.79 30 l
42 356 75 484 60
.22 1.45 42 l
43 357 229 80 1.25 44 l
44 358 1 196 35
.57 2.29 1
45 359 154 50 2.00 1
l 46 351 578 47
-361 1 632 61
.16 1.48 18 48 362 94 166 44
(.11) 2.39 27 49 364 154 767 34 (3.74) 6.68 23 l
50 365 197 220 36
(.42) 3.19 24 l
51 366 40 624 84
(.54) 1.73 62 52 367 113 887 45 49 1.73 34 l
53 368 130 887 40 43 2.08 25 l
54 369-1 41 458 36 (5.47) 8.25 25 55 369-2 34 974 45
(.38) 2.60 34 i
56 370 47 913 36
.03 2.75 22 57 371 692 46
(.02) 2.20 30 58 373 33 393 23 1.57 5.91 15 59 891 613 So 390 34 685 41
.15 2.29 25 61 391 10 214 28
.29 3.29 21 l
62 392 18 334 11 1.09 8.00 6
63 393 1 332 32
.38 2.75 18 FERC FORM NO.1 (REVISED 12 81)
Page 335
e..,
Pear'w ar responceat
- %.s Report is.
Oste of Riport Yest of Rgport (1) GAn Or9nsA (Mo. 02, Yrl Union Electric Company Dec. 31.19 b
'2) C A Resubrnession DEPRECI ATION AND AMORTIZATION OF ELECTRIC PLANT (Continued)
C Factors tJsed in Estimat;ng Depreciat on Charces (Continuad)
Georeciable Est. mated Net Applied Mortality Average Cu ve Remaining P se. 9.13e Avg Service Sarvage Depr. Rate (s) r
,g iln thouwMst Life (Percent)
(Percent)
Type Lafe tal
!bs ici Idl 109 til 19) 64 394-1 842 45 40 1.82 32 65 395 2 (;06 52
.04 1.88 44 66 396 6 945 18 1.28 4.28 11 67 39 7 44 075 30
(.17) 3.50 26 68 398 228 20
.25 4.75 8
69 120 56L i
70
$2 856 311 1
71 72
-(t) Steara Production Plants loca ted in the State of Illi nois depreciated on &
73 rerraining life b isis.
74 (2) Includes electric portion of common plar t $12 760 593.
77 78 79 i
80 I
81 l
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 l
100 101 102 103 104 105 106 107 108 109 110 111
- 112 113 114 115 FERC FORM NO.1 (REVISED 12-81)
Page 336
.-----=)
. = -, -
SNUPPS-C Question 5.
If the facility if jointly-owned provide copies of the joint participation agreement setting forth the procedures by which the applicants will share operating expenses and decommissioning costs.
Response
Callaway Plant Unit 1 is solely owned and operated by Union Electric Company.
t l
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. - ~ --
~ _
SNUPPS-C Question 6.
Provide copies of the prospectus for the company's most recent security issue and copies of the most recent SEC Form 10-K and 10-Q.
Provide copies of the preliminary prospectus for any pending security issue.
Response
Copies of the following are attached:
a)
The prospectus for our most recent security issue b)
SEC Form 10-K for 1983.
c)
SEC Form 10-Q for the quarter ended September 30, 1983.
Twenty-five copies of the Union Electric Company, 1983 Annual Report to Stockholders were submitted per 10CFR50.71(b) by ULNRC-806 dated April 19, 1984.
~
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y y q.p tw co PROSPECTUS 6,000,000 Shares Union Electric Company Common Stock
($5 Par Value)
The Company's Common Stock is listed on the New York Stock Exchange. On November 15,1983, the closing sale price of the Common Stock on the Exchange was $144 per share.
TIIESE SECURITIES IIAVE NOT HEEN APPROVED OR DISAPPROVED BY TIIE SECURITIES AND EXCIIANGE COMMISSION NOR IIAS Tile COMMISSION PASSED UPON Tile ACCURACY OR ADEQUACY OF Tills PROSPECTUS.
ANY REPRESENTATION TO Tile CONTRARY IS A CRIMINAL OFFENSE.
Price to Underwriting Proceeds to Pubhc Discount ( 1 )
Company ( 2 )
Per Share..
$14.875
$.45
$14.425 Total.
$89,250,000
$2,700,000
$86,550,000 (1) See UNDIRWRITING for indemnification arrangements.
(2) Expenses payable by the Company are estimated at $210,000.
The Additional Common Stock is offered by the several Underwriters when, as and ifissued by the Company and accepted by the Underwriters and subject to their right to reject orders in whole or in part.
It is expected that the Additional Common Stock will be ready for delivery on or about November 22, 1983.
Merrill Lynch Capital Markets Goldman, Sachs & Co.
Prudential-Bache Securities Shearson/American Express Inc.
The date of this Prospectus is November 15,1983.
l IN CONNECTION WITil Tills OFFERING, Tile UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WillCll STABILIZE OR MAINTAIN TIIE MARKET PRICE OF Tile COMMON STOCK AT A LEVEL ABOVE Til AT WillCil MICllT OTilERWISE PREVAIL IN Tile OPEN MARKET. SUCil TRANSACTIONS MAY BE EFFECTED ON TIIE NEW YORK STOCK EXCIIANGE, IN TIIE OVER 'I!!E-COUNTER MARKET, OR OTIIERWISE. SUCII STAlllLIZ-ING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS IlY REFERENCE AND AVAILABLE INFORMATION The Company is subject to 'he informational requirements of the Securities Exchange Act of 1934 (the " Exchange Act") and in accordance therewith files reports and other information with the Securities and Exchange Commission. Information as of particular dates concerning directors and officers, their remuneration, the principal holders of securities of the Company and any materialinterest of such persons in transactions with the Company is disclosed in reports of the Company filed with the Commission.
The following documents, which have been filed by the Company with the Commission pursuant to the Exchange Act ( File No.1-2967), are incorporated by reference in this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended December 31,1982 (the
" Form 10-K Annual Report"); and (2) The Company's Qdarterly Reports on Form 10-Q for the quarters ended March 31,1983, June 30,1983 and September 30,1983 (the " Form 10-Q Reports").
All documents filed by the Company with the Commission pursuant to Sections 13(a),13(c),14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering made by this Prospectus shall be deemed to be incorporated by reference and to be a part hereof.
Such reports, proxy statements and other information can be inspected and copied at the offices of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.; Room 1228, Evesett McKinley Dirksen Building,219 South
Dearborn Street,
Chicago, Illinois; Room i100. Federal Building,26 Federal Plaza, New York, New York; and Suite 500 East, 5757 Wilshire Boulevard, Los Angeles, California. Copies of such material can also be obtained from the Public Reference Section of the Commission in Washington, D.C. 20549 at prescribed rates. Such material can also be inspected at the office of the New York Stock Exchange,20 Broad Street, New York, N.Y.10006.
The Company hereby undertakes to proside without charge to each person to whom a copy of this Prospectus has been delisered on the written or oral request of any such person, a copy of any or all of the documents referred to above which hase been or may be incorporated in this Prospectus by reference, other than exhibits to such documents. Requests for such copies should be directed to Mr. James C.
Thompson, Secretary, Union Electric Company, P.O. Box 149, St. Louis, Missouri 63166, or telephone (314) 621-3222.
Except as otherwise indicated by the context, this Prospectus speaks as of the date hereof and does not purport to reflect any changes which may have occurred in the affairs of the Company or its subsidiaries thereafter. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company or its subsidiaries since the date hereof.
2
THE ISSUE IN BRIEF Thefollowing materialis quahped in its entirety by, and should be read in conjunction with, thefnancial statements and other information appearing elsewhere in this Prospectus and in the documents and information incorporated in this Prospectus by reference.
THE OFFERING Issuer..
Union Electric Company Security Offered -
6,000,000 shares of Common Stock, $5 par value (the
" Additional Common Stock")
Shares Outstanding at September 30,1983..
87,266,296 Use of Proceeds _
To repay short-term debt incurred in connection with construction Listing.
New York Stock Exchange (Symbol: UEP) 1983 Price Range (through November 14,1983). $16%-$13% (See COMMON STOCK DIVIDENDS AND PRICE RANGE)
Indicated Annual Dividend Rate..
$1.72 per Common Share THE COMPANY Business..
Primarily an electric utility Service Area.
Electric service to an approximately 24,000 square mile area, primarily covering the eastern and central portions of Missouri, portions of Illinois adjacent to St. Louis, Missouri, and the southeastern portion of Iowa; and gas service to, Alton, Illinois, and vicinity and 90 Missouri commumties Service Area Population (estimated).
Electric-2,531,000; Gas-348,000 Customers _
Electric-993,000; Gas 7105,000 Revenue Distribution (12 Months Ended Septem-i ber 30,1983 ).
Electric-91.5%; Gas-7.5%; Other-l.0%
Sources of kWh Generation (12 Months Ended September 30,1983 ) =
Coal-93.8%; Hydro-6.1%; Other-0.1%
CONSOLIDATED FINANCIAL INFORMATION (Thousands of dollars except per share amounts)
I2 Months F.nded(*)
December 3I.
September 30, 1982 1983 Operating Revenues
. $ 1,217,705
$1,359,568 Operating Income.
$ 204,651
$ 235,853 Earnings on Common Stock.
$ 165,506
$ 224,266 Earnings per Common Share.
$2.17
$2.68 Dividends per Common Share....
$1.58
$1.64 Capitalization as of September 30.1983 Actual Natio As Adjusted (")
R a tio( ** )
Long-term Debt (excluding current maturity).m..
$2,105,029 51.4%
$2,105,029 50.3%
Preferred Stock Subject to Mandatory Redemption.
182,962 4.5 182,962 4.4 Preferred Stock Not Subject to Mandatory Redemp-tion..
356,355 8.7 356,355 8.5 Common Equity--
1,452,708 35.4 1,542,708 36.8 Total Capitalization..
$4,097,054 100.0 %
$4,187,054 100.0 %
Short-term Debt and Current Maturity of Long-term De bt..
$ 94,027
( *) See CERTAIN FINANCIAL INFORMATION.
(") Adjusted to give effect to the sale of the Common Stock offered hereby.
3
TIIE CON 1PANY Union Electric Company, incorporated in Missouri in 1922,is successor to a number of companies, the oldest of which was organized in 1881. The Company owns all of the common stock of Missouri Power &
Light Company, Missouri Edison Company and Missouri Utilities Company (the " utility subsidiaries")
and of Union Colliery Company. See the Form 10-K Annual Report and the Form 10-Q Reports for information on the proposed merger of each utility subsidiary into the Company on December 30,1983, subject to regulatory approval. As used hereafter in this Prospectus, the term Company means Union Electric Company and its consolidated subsidiaries unless the context requires otherwise. The Company's principal office is at 1901 Gratiot Street, St. Louis, Missouri 63103 and its telephone number is (314) 621-3222.
COMN10N STOCK DIVIDENDS AND PRICE RANGE The Company has paid cash dividends on its Common Stock for each year beginning with the dividend for the year 1906. Future dividends will depend upon the carnings and financial condition of the Company and other factors. See Dividends under DESCRIPTION OF COMMON STOCK herein and Note (3) under item 5 in the Form 10-K Annual Report for information concerning restrictions on, and retained earnings available for, dividends. The Company currently estimates that approximately 50% of the dividends paid on the Common Stock in 1983, and a greater percentage in 1984, will be considered a return of capital under the Internal Revenue Code and therefore not taxable as dividend income. These estimates cannot be finalized until the respective years for such estimates have been completed and are further dependent upon nurr. rous assumptions and factors such as the amount of allowance for funds used during construction ("AFC") recorded by the Company, future rate relief and the earnings of the Company. Variation from any of the assumptions or changes in the income tax laws and regulations thereunder and audits by the IRS may impact on these estimates. Changes which would eliminate or severely reduce the amount of dividends considered as a return of capital have recently been proposed before Congress.
The high and low sale prices of the Common Stock on the composite tape during the periods indicated as reported in The Wall Street Journaland the amount of quarterly dividends paid for such periods are set forth below:
Diiidends Iligh im Paid 1982
$11%
$104
$.38 First Quarter..
12%
10 4
.38 Second Quaner...
13 %
11%
.41 Third Quaner..
14 4 12 %
.41 Fourth Quarter 1983 15%
13 %
.41 First Quarter..
I64 13 4
.41 Second Quarter 15 %
13 %
.41 Third Quarter.-
157s 14%
.43
- Fourth Quaner (through November 14)..
- On October 14,1983, the Board of Directors declared a quarterly dividend of 43c per share on the Common Stock payable on December 29,1983 to stockholders of record on December 7,1983. The holders of the Additional Common Stock on such record date will receive such dividend.
The last reported sale price of the Common Stock on the New York Stock Exchange on November 15, 1983 was $14% per share. The book value of the Company's Common Stock at September 30,1983 was
$16.65 per share.
The Representatives of the Underwriters have advised the Company that on November 15,1983 they made stabilizing purchases aggregating 2,000 shares of Common Stock at $14% on the Pacific Stock Exchange.
4
The Company's Dividend Reinvestment and Stock Purchase Plan permits stockholders to auto-m.'ically reinvest their dividends in newly issued shares of Common Stock at prevailing market prices.
Optional cash purchases ranging from $10 to $5,000 monthly are also permitted under the Plan, and all purchases are made without payment of any commission or service charge. The Economic Recovery Tax Act of 1981 ("ERTA") provides special treatment for stockholders participating in dividend reinvestment s
i programs of qualified utilit es. ERTA permits up to $750 annually ($1,500 in the case ofjoint returns) of reinvested dividends paid through 1985 to be excluded under artain circumstances from income subject to taxation. The Company believes that its Plan qualifies for this special treatment. Because of stock trant '^r considerations and the short time period between the initial offering of the Additional Common Stock a. '
the record date for the December 1983 dividend, the Company does not expect that purchasers of the Additional Common Stock can be enrolled in the Plan in time for the initial quarterly dividend payable on December 29,1983 to be reinvested.
APPL.lCATION OF PROCEEDS AND CONSTRUCTION PROGRANT The proceeds to be recejved by the Company from the sale of the Additional Common Stock will be used to repay in part short-term debt (expected to aggregate approximately $90 million at the time of issuance of such Stock ) incurred in connection with the Company's construction program, the largest single project of which is the 1,150 mW Unit at the Company's Callaway nuclear plant. Expenditures for the construction program, including amounts for AFC and excluding nuclear fuel, amounted to $628 million in 1982. The Callaway Unit is expected to be placed in service in late 1984 or early 1985. The total cost of the Unit is presently estimated at $2.85 billion (including AFC of approximately $1.02 billion), and expenditures for the Unit through September 1983 aggregated approximately $2.22 billion (including AFC of approximately $643 million). See the Form 10-K Annual Report for information on revisions of estimated casts and completion dates for the Unit.
The following table sets forth the Company's actual construction expenditures and its currently estimated expenditures for presently proposed construction, excluding nuclear fuel, for the periods indicated:
Actual btimated 1978-1983-1982 1983 19M4 1985 19M6 1987 1987 (Ntillions of Dollars)
Callaway Umt.-
$1.614
$574
$431
$ 35 5-
$1,040 Generatmg Plant hlodifications..
215 21 12 18 23 14 88 Transmisdon and Distnbution..
369 86 84 85 96 92 443 Other..
97 12 21 20 24 27 104 Total.
$2.295
$693
$$48
$158
$143
$133
$1,675 Lew Al:C..
245' 305*
17*
4 3
574*
Net Cash Requirements..
$448
$243
$141
$139
$130
$1,101
- Substantially all related to the Callaway Unit.
Construction projects are under constant review, and actual expenditures and completion dates may vary significantly from present estimates as they have in the past as discussed in the Form 10-K Annual Report under CONSTRUCTION PROGRAM AND FINANCINo. The Callaway Unit is subject to receipt of an operating license from the Nuclear Regulatory Commission and the results of the proceedings therefor could adversely affect completion or operation of the Unit. An initiative petition is presently being circulated in hiissouri which proposes a law to prohibit the operation of nuclear power plants in that state.
If the required signatures are obtained by mid 1984, the proposalis expected to be submitted to a vote at the general election in November 1984.
5 l
In addition to the funds required for construction during the 1983-1987 period, $239,071,000 will be required to repay currently outstanding long-term debt and Preferred Stock as follows: $422,000 in 1983,
$12,754,000 in 1984, $28,487,000 in 1985, $104,620,000 in 1986 and $92,788,000 in 1987. In addition, the Company's nuclear fuellease will require payments for nuclear fuel upon the consumption thereof. The Company expects that until the Callaway Unit is authorized to be included in rate base and reflected in electric rates, all ofits cash requirements for construction and such payments will have to be obtained from external sources. No assurance can be given that such required funds can be obtained. See ClRTAIN FINANCIAL. INFORMATION below and CONSTRUCTION PROGRAM AND FINANCING and RAtis in the Form 10-K Annual Report.
CERTAIN FINANCIAL INFORMATION Set forth below is a summary of certain information concerning the results of operations of the Company. The information, insofar as it relates to the five years ended December 31,1982, was derived from the Company's audited financial statements, the last three years of which, together with manage-ment's discussion and analysis thereof, are contained in the Form 10-K Annual Report. In the opinion of the Company all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the unaudited twelve-month period ended September 30, 1983 have been included.
Tweise months ended Year Ended December 31, September 30, 1978 1979 1980 1981 1982 1983 (Thousands of dollars escept share and per share amounts)
Operaung Revenues 903,988 % 946,797 $ I,077,876 $ 1,105,536 $1,217,705 $ l.359,568 Operating Expenses.
727,756 780,331 886,720 922,647 1,013.054 1,123,715 e
Operating Income.
176,232 166,466 191,156 182,889 204,651 235,853 Allowance for Equity Funds Used During Con-struction 15,980 31,245 45,357 64.600 93,858 124,032 Other income-Miscellaneous 2,896 879 3,638 (734) 3,660 6,804 Interest on Debt and Other items.
90,699 107,383 132.112 180.697 200,938 210.074 Allowance for Borrowed Funds Used During Construction.
I5,489 26,848 46,698 91,025 104,235 111,207 Net income..
119,898 118.055 154,737 157,083 205,466 267.822 Preferred Dividend Requirements of Company-23,040 26,948 29,695 29,478 39,960 43,556 Earnings on Common Stock..
96,858 91,107 125,042 127,605 165,506 224,266 Average Number of Common Shares Out-standing 48.260,596 52,577,432 59,675,995 67,179,275 76,251,024 83.752,463 Earnings Per Share of Common Stock (based on average shares outstanding).
$2.01
$ 1.73
$2.10
$1.90
$2.17 12.68 Dividends Per Share of Common Stock.
$ 1.40
$ 1.44
$l.48
$1.52
$1.58 5164 Earnings per share for the twelve months ended September 30, 1983 include approximately 18e attributable to unusually hot weather during the third quarter. The Company anticipates that, assuming normal weather, earnings per share for the year 1984 are not likely to exceed the level of 1983 earnings per share which would have been reported if such hot weather had not occurred.
Substantially all of the Company's earnings in 1983 and 1984 will be provided by AFC (a non-cash item) largely attributable to construction of the Callaway Unit, which is now scheduled to be completed in late 1984 or early 1985. Earnings represented by AFC will decline substantially when the Callaway Unit goes into commercial operation and is reflected in electric rates. Assuming commercial operation as scheduled and based on economic and other projections, major rate increases in all jurisdictions, expected to aggregate 50%, will be necessary in conjunction with placing the Unit in commercial operation to convert the non-cash earnings provided by AFC into an equivalent cash return and to meet the Unit's substantial fixed costs and operating expenses. Additional rate relief to recover other costs of service may be sought contemporaneously with the Callaway rate relief request. The Company can give no assurance that the needed rate relief will be granted. In the event the Comnany is not permitted to recover an adequate return on investment in the Unit and is required to discontinue recording AFC, there would he a substantial adverse effect on earnings.
6
As part ofits most recent request for an increase in electric rates in Missouri, the Company sought to amortize over a five-year period $32 million of costs ( net of taxes) associated with the cancellation of the second unit ofits Callaway nuclear plant. By order dated October 21,1983, the Missouri Public Service Commission ruled that recovery of such cancellation costs is barred by a state statute which prohibits recovery of costs of a facility in rates "before it is fully operational and used for service." The Company is of the opinion that the statutory ban does not apply to cancelled plants and, furthermore, that the Commission's interpretation of the statute is unconstitutional because it purports to disallow recovery of costs prudently incurred. The Company has requested reconsideration by the Commission and, if unsuccessful, will seek judicial review of the Commission's decision. If the Commission's decision is upheld by the courts, the cancellation costs would be written otT and charged against income during the period in which it is determined by the Company that such cancellation costs are not recoverable.
DESCRIPTION OF COMMON STOCK The following summaries of certain provisions atrecting the Common Stock contained in the Articles ofIncorporation, as amended, and in other documents referred to below, all of which are filed as exhibits to the Registration Statement and to which reference is hereby made, do not purport to be complete and a:e qualified in their entirety by such reference.
Disidends. Dividends on the Common Stock may be declared and paid at the discretion of the Board of Directors, provided all dividends for past periods and the dividend for the current quarter on the outstanding Preferred Stock and Preference Stock have been paid or provided for, and provided that any sinking fund obligations on the outstanding Preferred Stock and Preference Stock have been met. At the present time there is no Preference Stock outstanding. Subject to a limitation imposed by orders of the Securities and Exchange Commission permitting the issuance of certain series of Union Electric Company's Preferred Stock, the amount of dividends payable on the Common Stock (other than dividends payable in Common Stock) is restricted to 50% of net income applicable to the Common Stock if the ratio of Common Stock plus surplus is less than 20% of total capital (including funded debt) and to 75% of such net income if such ratio is 20% or more but less than 25%. At September 30, 1983, such ratio was approximately 35.5%.
The supplemental indenture under which Union Electric Company's First Mortgage Bonds of 1991 Series were issued in 1961 provides that, so long as any of such Bends are outstanding, it will not declare any dividend on its Common Stock (other than in Common Stock) or make any other distribution on or acquire for value any ofits Common Stock (otherwise than in exchange for, or out of proceeds of sale of, 3
Common Stock),if the amount thereof, together with the aggregate of such payments made since June 30, 1961 would exceed $22,700,000 plus earned surplus applicable to the Common Stock subsequent to June 30,1961, and that in computing such earned surplus charges applicable to the period subsequent to June 30, 1961 shall include, among other things, the greater of (i) the aggregate of the provisions for depreciation and amortization of plant acquisition adjustment accounts for such period or (ii) 2.25% of average depreciable bondable property. At September 30,1983, the amount available for such payments was approximately $394,000,000.
A similar but currently less restrictive provision has been included in the supplemental indentures under which the Company's First Mortgage Bonds have been issued since 1963 which provides that, so long as any of such Bonds are outstanding, the Company will not declare any dividend on its Common Stock (other than in Common Stock) or make any other distribution on or acquire for value any of its Common Stock (otherwise than in exchange for, or out of proceeds of sale of, Common Stock), if the amount thereof, together with the aggregate of such payments made since June 30,1961 would exceed
$22,700,000 plus the net income applicable to the Common Stock subsequent to June 30,1961, and that in computing such net income operating expenses shall include, among other things, the greater of (i) the provisions for depreciation for such period or (ii) the amount by which 15% of gross operating revenues (after certain deductions) for such period exceeds the total amounts expended for maintenance and repairs.
7 1
Each of the Company's utility subsidiaries have issued first mortgage bonds under indentures and supplemental indentures thereto which require that, upon consummation of the proposed mergers of such subsidiaries into the Company, the Company assume certain of the duties and obligations thereunder.
Included in such duties and obligations which may be assumed are covenants which restrict the payment by each such subsidiary of dividends on its capital stock. How the covenants are to be applied to the Company and the effect these covenants would have on the Company's ability to pay dividends on its
~
capital stock has not been determined and is presently being studied. While certain of these covenants could impose restrictions on the payment of dividends by the Company which would be more restrictive than those presently contained in the Company's supplemental indentures described in the previous two paragraphs, the Company will take all action necessary so that the most restrictive of the covenants would, at the time of the mergers, not restrict the payment of at least $200,000,000 of dividends on its capital stock (dividends paid on the Company's capital stock during the twelve months ended September 30,1983 aggregated approximately $180,000,000). The amount of dividends which may subsequently be paid under these restrictions will depend to a large extent on the Company's earnings after the mergers.
Voting Rights. Each stockholder has one vote for each share of Common Stock, Preference Stock, and Preferred Stock held by him; provided that whenever four quarterly dividends on the Preferred Stock and Preference Stock shall bc n default, in whole or in part, and during the continuance of such default, the Common Stock, as a class, shall be entitled to elect the same number of directors as was authorized by the Articles ofIncorporation immediately prior to such default, and the Preferred Stock, as a class and the Preference Stock, as a class, shall each be entitled to elect two additional directors; and provided furthec,
{
that whenever four quarterly dividends on the Preference Stock only shall be in default, in whole or in l
part, and during the continuance of such default, the Common Stock and the Preferred Stock, voting together as a single class, shall be entitled to elect the same number of directors as was authorized by the Articles of Incorporation immediately prior to such default, and the Preference Stock, as a class, shall be entitled to elect two additional directors. Each stockholder is entitled to cumulative voting at all elections of directors, such right, in case of class voting during a default, being applicable to the number of directors to be elected by the particular class.
No amendment to the Articles ofIncorporation which would change the provisions thereof relating to cumulative voting, quorum or preemptive rights,in any manner substantially prejudicial to the holders of any class of stock shall be made without the consent of at least two-thirds of all of the capital stock.
No amendment to the Articles of Incorporation creating or increasing shares of Preferred Stock or Preference Stock shall be made without the consent of a majority of the Common Stock.
In addition to the voting provisions in the Company's Articles ofIncorporation, under Niissouri law holders of each class of stock have the right to vote as a class on any amendment to the Company's Articles ofIncorporation that would adversely affect the rights or privileges of such class of stock.
l Liquidation Rights, On liquidation the holders of the Common Stock are entitled to receive the assets of the Company remaining after distribution to the holders of Preferred Stock and any Preference Stock of I
the liquidation amounts applicable to each such class of stock and accumulated unpaid dividends thereon.
i Preemptise Rights. Holders of the Common Stock have the preemptive right to purchase, pro rata, additional Common Stock or securities convertible into Common Stock issued solely for money and other than by (i) a public otrering; (ii) an offering to or through underwriters or dealers who shall agree promptly to make a public otrering; (iii) an issue in connection with any dividend reinvestment, stock purchase or similar plan; or (iv) any other otTering authorized or approved by the holders of a majority of the outstanding Common Stock.
Liability for Assessments. The Common Stock is not liable for further calls or assessments. The
=
Additional Common Stock when issued will be validly authorized and issued and full-paid and non-assessable.
ll Transfer Agents and Registrars. The Transfer Agents for the Common Stock are Nianufacturers Hanover Trust Company, New York, New York, and Centerre Trust Company of St. Louis, St. Louis, Niissouri. The Registrars for the Common Stock are Nianufacturers Hanover Trust Company and The Boatmen's National Bank of St. Louis, St. Louis, Niissouri.
8 c
I E
I EM
EXPERTS The audited consolidated financial statements included in the Company's Form 10-K Annual Report incorporated by reference in this Prospectus have been so incorporated in reliance on the report of Price Waterhouse, independent accountants, given on the authority of said firm as experts in auditing and accounting.
The statements as to matters of law and legal conclusions included in the Company's Form 10-K Annual Report and the Form 10-Q Reports, incorporated by reference in this Prospectus, and such statements included in this Prospectus have been prepared under the supervision of, and reviewed by, William E. Jaudes, General Counsel of the Company and such statements are made and incorporated or included herein in reliance on the authority of Mr. Jaudes as an expert. Mr. Jaudes is a full-time employee of the Company.
LEGAL OPINIONS Certain legal matters in connection with the Additional Common Stock will be passed upon for the Company by William E. Jaudes, General Counsel of the Company, and for the Underwriters by Cahill Gordon & Reindel (a partnership including professional corporations), New York, New York. Cahill Gordon & Reindel are not passing upon the incorporation of the Company or its subsidiaries or franchise matters and are relying as to matters of Missouri, Illinois and other applicable laws upon the opinion of Mr. Jaudes.
l 9
1
UNDERWRITING The Underwriters named below have severally agreed, subject to the terms and conditions of the Underwriting Agreement, to purchase from the Company the following number of shares of the Additional Common Stock:
Number Number Underwriter of Shares Underwriter of 5 hares Boettcher& Company..
23,000 Merrill Lynch, Pierce. Fenner & Smith Incorporated 576,000 The Chicago Corporation 23,000 Goldman, Sachs & Co.
576,000 Foster & Marcall/American Express Inc.
23.000 Prudential-Bache Securities Inc.
576,000 J. J. B. Hilhard, W. L. Lyons, Inc.
23,000 Shearson/American Express Inc.
576,000 Howard,Weil, Lahoaisse Fnedrichs Bear,Stearns & Co.
90,000 Incorporated 23,000 The First Boston Corporation.
90.000 Legg Mason Wood Walker, Incorporated..
23.0f K)
A. G. Becker Paribas Incorporated..
90,000 McCourtney-Breckenridge & Company..
23.000 Blyth Eastman Paine Webber Incorporated....._..
90,000 The Ohio Company..
23,000 Alex. Brown & Sons 90,000 Parker /HunterInco porated 23.000 Dillon, Read & Co. Inc.
90,000 Raymond, James & Associates. Inc.
23,000 Donaldson, Lufkin & Jenrette Securities Scherck, Stein & Franc,Inc.
23,000 90,000
- 1. M. Simon & Co., Inc.
23.000 Corporation Drexel Burnham Lambert incorporated..
90,000 Smith. Moore & Co.
23,006 A. G. Edwards & Sons, Inc.
90,000 Stern Broti.crs & Co.
23,0(K) llambrecht & Quist Incorporated 90,000 Sutro & Co. Incorporated.
23fx)0 E. F. Hutton & Company Inc.
90,000 Tucker Anthony & R. L. Day,Inc.
23.000 Kidder, Peabody & Co. Incorporated 90,000 Wedbush, Noble Cooke,Inc.
23,0(K)
Lazard Freres & Co.
90,000 Burgess & Leith Incorporated..
13,000 Lehman Brothers Kuhn leeb Incorporated..
90,000 Alan Push Brokerage Co.
13,000 L F. Rothschild, Unterberg, Towbin 90,000 B. C. Christopher Secunties Co.
13,m 0 Salomon Brothers Inc 90,000 Smith Barney, Harris Upham & Co.
D. A. Davidson & Co. Incorporated..
13.G)0 Incorporated 90,000 R. G. Dickinson & Co.
I3Jxx)
Wertheim & Co.,Inc.
90,000 Dort & Co.,Inc.
I3,000 Dean Witter Reynolds Inc.
90,000 First Albany Corporation 13,uK)
Edward D. Jones & Co.
72,000 J. A.Glynn & Co.
I3,000 New hard, Cook & Co. Incorporated 72,000 Gruntal & Co.
I3,000 Oppenheimer & Co.,Inc.
72,000 Hanifen, ImhorT Inc.
13,000 R. Rowland & Co., Incorporated.
72,000 The Heitner Corporation.
13JM)0 Stifel, Nicolaus & Company, incorporated -
72,000 Herzfeld & Stern 13JR)0 Thomson McKinnon Securities Inc.
72,000 Howe, Barnes & Johnson, Inc.
13/xx)
Advest, Inc..
38,000 The Illinois Company Incorporated..
13,000 Robert W. Baird & Co. Incorporated 38,000 Bateman Eichler,lhli Richards Incorporated...
38,000 Jesup & Lamont Secunties Co., Inc.
13,000 Johnson, Lane, Space, Smith & Co., Inc.
I3,000 William Blair & Company 38,000 Blunt Ellis & loewiincorporated 38,000 Josephthal & Co. Incorporated.
I3JXX)
J. C Bradford & Co., Incorporated 38,000 The Milwaukee Company 13.000 Butcher & Singer Inc.
38,000 Moore & Schley Capital Corporation...
13,000 Cowen & Co.
38,000 M uller and Company. Inc.
13,000 Dain Bosworth Incorporated.
38,000 Neuberger & Berman.
13J)00 First of Michigan Corporation 38,000 Nippon Kangyo Kakumaru international,Inc..
13,000 Janney Montgomery Scott Inc.
38,000 Philips, Appel& Walden,Inc.
I3,000 Ladenburg, Thalmann & Co. Inc.
38,000 Raffensperger, H ughes & Co., Inc.
I 3J)00 Cyrus J. Lawrence incorporated..
38,000 Rodman & Renshaw,Inc..
13,0tx)
Mcdonald & Company Securities,Inc.
38,000 Roney & Co.
I 3,(xy)
Mosely, Hallgarten Estabrook & Weeden Inc.
38,000 H. B. Shaine & Co., Inc, 13fx)0 Burton J. Vincent, Chesley & Co.
13,0sx)
Piper, Jaffray & Hopwood incorporated..-
38,000 Prescott, Ball & Turben, Inc.
38,000 Edward A. Viner & Co.,Inc.
13,000 Robinson-Humphrey/ American Express Inc.
38,000 WZW Financial Services Inc.
I3.000 Rotan Mosle Inc..
38,000 Total._
6fWio,000 Wheat, First Securities,Inc.
38,000 10
The Underwriting Agreement provides that the Underwriters are committed to purchase all of the Additional Common Stock if any is purchased. Under certain circumstances the commitments of nondefaulting Underwriters may be increased.
The Company has been advised by Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Prudential-Bache Securities Inc., and Shearson/American Express Inc., as Representatives of the Underwriters, that the Underwriters propose to offer the Additional Common Stock to the public initially at the offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $.32 per share and that the Underwriters and such dealers may reallow a discount not in excess of $.10 per share on sales to other dealers. The public offering price and concession and discount to dealers may be changed by the Representatives.
The Company has agreed to indemnify the several Underwriters against certain civil liabilities, including liabilities under the Securities Act of 1933.
t l
11
No dealer, salesman, or any other person has been authorized to gise any information or to make any representations other than those con-tained in this Prospectus in connection with the 6,000,000 Shares offer contained in this Prospectus and, if gisen or made, such information or representations must not be relied upon as hasing been authorized by Un,on Electr,c Company i
i the Company or by any of the Underwriters. This Prospectus does not constitute an offer to sell the securities in any jurisdiction to any one to whom Common Stock it is unlawful to make such offer in such jurisdic.
($5 Par Value) tion.
PROSPECTUS CONTENTS P40F Incorporation of Certain Documents by Ref-erence and Available Information..
2 TI,e Issue in Brief...
3 4
The Company..
Common Stock Dividends and Price Range.. 4 Goldman, Sache & Co.
Application of Proceeds and Construction 5
Program.
Prudential-Bache Certain F.mancial lnformation..
6 3,,,,,i,,
7 Shearson/ Amer.ican Express Inc.
Description of Common Stock..
9 Experts _
9 Legal Opinions.
10 Underwriting..
November 15,1983 i
h G
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.
20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) 0F THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended September 30, 1983.
Commission file number 1-2967.
UNION ELECTRIC COMPANY (Exact name of registrant as specified in its charter)
Missouri 43-0559760 (State or other jurisdiction of (I.R.S. Employer incorporation or organization)
Identification No.)
1901 Gratiot Street, St. Louis, Missouri 63103 (Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code:
(314) 621-3222 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
(
has been subject to such filing requirements for the past 90 days.
Yes X
No Shares outstanding of each of registrant's classes of common stock as of October 31, 1983:
Common Stock, $5 par value - 87,745,099 (excl. 42,990 treasury shares) l l
PIga i UNION ELECTRIC COMPANY AND SUBSIDIARIES INDEX Page No.
Part i Financial information (Unaudited)
Consolidated Balance Sheet --
September 30, 1983 and December 31, 1982 2
Consolidated Statement of income --
Three Months, Nine Months and Twelve Months Ended September 30, 1983 and 1982 3
Consolidated Statement of Changes in Financial Position --
Nine Months Ended September 30, 1983 and 1982 4
Notes to Financial Statements 5
Management's Discussion and Analysis 6&7 Part ll Other Information l
l
I UIIION ELECTRIC COMPANY AND SUBSIDI ARIES COIIS0tIDATED BAtANCE SHEET (L1114000 TED)
(Thousands of Dollars)
ASSETS CAPITAL AND LI ASILITIES i
Septad or 30, Becader 31, September 30, December 31, 193 192 1983 192 Property and plant:
Capitalization:
Original cost of plant in service:
rm stock. $5 par value, authorized Electric
$3,195,402
$3,075,a84 150,000,000 shares; outstanding Other 112.985 110.8 %
87,266,296.and 44,483,679 shares, 3,38,87 3,156,325 at respective dates (excluding 42,990 shares at par value in Less accueulated depreciation 1.0 %,950 984,656 treasury)
$ 436,331
$ 422.068 other paid-in capital 568,197 541,222 Retained earninge MB.180 364.771 2.263.137 2,201.672 Total ca== = shareholders' equity I,452,7m I,325,06 Construction work la progress:
preferred stock not subject to I
Callaway nuclear plant 2,221, % l I,809,397 mandatory redemption -
356,355 281,355 leuclear fuol 183,195 169,553 Preferred stock seject to Settlement of uranium Iltl ation (98,819)
(89,407) mandatory reu.aption 182,962 182,988 9
Other 71.287 114.908 Long-term debt 2.105.029 2.000.405 Total property and plant, net 4,647,24l 4,206.123 Total capitalization 4,097,054 3.792,509 j
lavsstments 5,694 5.~05 Accumulated deferred tames on lacone 388,490 328,580 l
I Deftrred charges:
Accumulated deferred Investment tan credits 149,659 122,217 Callaway unit 2 construction abandonment 82,580 82,826 unamortized bond defeasance cost 4,32 0 4,470 3
unamortized debt expense 4,879 4,860 Current liabilities:
Other 1.333 2.292 Current mesurity of long-term debt 9,72 7
- 2.223 Total deferred charges 95,112 94,445 Accounts payable 91,405 117,199 Wages payable 22.173 20,0l0 Curramt assets:
Callaway unit 2 cancellation charges M,170 45,969 Cash II,003 4,555 Sank loans 40,000 42,100 Deposits for payment of Interest, and other Commercial paper M,300 25,000 deposits 5,277 32,655 income taxes accrued 62.256 27,919 l
Accounts receivables - trade (less allowance Other tamos accrued 59,WI I4,287 l
for doubtful accounts of $2.278 and $1.622, Interest accrued 39,852 46,62l at respective dates) 134,l90 85,629 Dividends declared 11 669 10,328 1
unbilled revenue 67,8 %
54,042 Other current IIabilltles 36,,029 35.535 l
Other accounts and notes receivable 5,645 6,622 Total current liabilities 461,562 357,191 Materials and supplies, at everage cost -
Fuel 84,107 99,006 Construction and maintenance 37,252 37,188 Prepayments and other assets 3.3%
4.924 Total current assets 3 4,715 324,625 i
M Tttal Assets M
M Total Capital and Llabilities M
M j
(D b
94 i,
t 4
h
O UNION ELECTitlC COMPANY AND SUS $101 ARIES CONSOLIDATED STATEMENT OF INCONE (UNAUDITED)
(Thousands of Dollars)
Three Months Ended Mlne Months Ended Ti.elve Months Ended September 30, Septee6er 30, September 30, 193 IW2 19) 192 193 IW2 Operating revenues (*):
Electric
$453,656
$363,087
$996,309
$866,717
$1,243,%7
$1,103,698 Gas 10,948 8,794 73,647 61,949 101,980 84,056 Steam I.233 1,200 8,098 9,801 11,528 13,980 Total operating revenues 1
I,359,56s 1,2 Operating expenses:
Operations Fuel and purchased power 145,112 102,320 327,561 293,329 406,859 381,584 other 54,973 47,662 187,050 165,871 251,935 222,831 Maintenance 24,603 23,635 75,068 72,977 102,306 94,926 copreclation 23,586 21,885 68,0 %
64,468 90,2 %
85,256 income taxes 77,874 57,321 128,836 83,256 136,547 100,448 Other taxes (*)
40 618 34 023 105 300 94 289 135,822 _ __l20,414 Total operating expenses 5
i,i23,715 i,005.439 operat:Ing income W
W W W 235,553 19,665 Other income:
Allowance for equity funds used daring construction 35,497 24,134 97,113 66,939 124,032 83,964 Miscellaneous, not 449 I 682 6 192 3 048 6,804 I,581 Total other income 35,946 130,536 55,545 Income before interest and other items W
W T55,W9 W
366,ee9 2u4,2io Interest and other items:
Ir.terest on debt 54,610 52,087 159,419 150,282 209,691 1 %,048 Allowance for borrowed funds used during f
construction (30,213)
(27,230)
(85,%4)
(N,492)
(1 1,207)
(108,796) i Preferred dividends of subsidiaries 95 96 287 288 383 38 4 Total Interest and other items 24,492 24,953 74,242 N
W,567 57,e36 Net income W
M
~YT6 3Q 163,991 267,522 896,574 Preferred dividend requirements of Company 12 502 10 33 261 29 43,556 37,014 M,321 M,665 Earnings on conunon stock i 224.266
$ 159.560 Earnings per share of consnon stock (based on average shares outstanding)
$ I 14 l.01 2.26 Q
2.68 2.I6
[
I u)
Dlvidends per share of comanon stock Q
Q W
Q l.64 S
I.55 G
Average nunter of conunon shares outstanding (In thousands)
M6 M
8_i,lH M
M M
(*) includes license and franchise taxes of $23,976,000 and $l9,188,000, respectively, for the three-month periods; $54,531,000 and $46,958,000, respectively, for the nine-month periods; and $68,574,000 and $59,762.000, respectively, for the twelve-month periods ended September 30,1983 and 1982,
l Pagn 4 UNION ELECTRIC COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
(Thousands of Dollars)
Nine Months Ended September 30.
1983 1982 SOURCE OF FUNOS:
From operations -
Net income
$226,347
$163,991 Provision for depreciation 68,044 64,468 Provision for deferred taxes on income (net) 59,910 53.767 Provision for deferred investment tax credits (net) 27,442 14,168 Allowance for all funds used during construction (182.577) (145.431) 199.166 150. % 3 From financing and other sources -
Dividend reinvestment and stock purchase plans 41,238 26,856 issue of mortgage bonds 100,000 130,500 issue of preferred stock 75,000 75,000 1ssue of long-term unsecured debt 40,000 275,000 Settlement of uranium litigation 9,412 9,946 Nuclear fuel lease 13,650 22.972 Net decrease in working capital (excluding short-term i
loans and current maturity of long-term debt) 25.570 19,519 Additional short-term bank loans and commercial paper 17.200 322.070 559.793 Total funds provided ss21.216 s710.766 APPLICATION OF FUNDS:
Gross plant expenditures
$506,833
$469,109 Nuclear fuel 13,642 23,00, Allowance for all funds used during construction (182,577) (145,431)
Union Electric dividends on preferred stock and i
common stock 139,767 119,660 Maturity of mortgage bonds 1,197 36,074 i
Reduced short-term bank loans and comercial paper 32,950 l
Restructured long-term unsecured debt 40,000 175,000 Net change in other funds 2.374 391 Total funds applied ss21.236 s710.756 DECREASES (INCREASES) IN WORKING CAPITAL:
Cash and deposits
$ 20,930
$ 19,912 Receivables, net (61,388)
(34,288) l Fuel 14,899 (14,773) l Other materials and suppiles (64)
(1,047) l Accounts and wages payable (23,631)
(4,903)
Cancellation charges (1,799)
(5,095) i Taxes accrued 80,031 55,373 Interest and dividends accrued or declared (5,428)
(3,354)
Other 2.020 7.694 g
s 19.519 l
Page 5 UNION ELECTRI C COMPANY AND SUBSIDI ARI ES NOTES TO FINANCI AL STATEMENTS (UNAUDITED)
Note 1 - Financial statement note disclosures, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted in this Form 10-q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, i n the opinion of the registrant, the disclosures contained in this Form 10-q are adequate to nake the information presented not misleading.
See Notes to Financial Statements included in the 1982 Annual Report on Form 10-K for information relevant to the financial statements contained in this Form 10-q, including Information as to the significant accounting policies of the registrant.
Note 2 - See Part II, i tem 5, Other I nformation in this Form 10-q for information relative to a recent Missouri Pub 11c Service Commission decision that recovery of $32 million of costs (net of taxes) associated with the cancellation of the second unit of its Callaway nuclear plant is barred by a state statute.
Note 3 - I n the opinion of the registrant the interim financial statements flied as part of this Form 10-q reflect all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the periods presented.
Note 4 - Due to the effect of weather on sales and other factors which are characteristic of electric utility operations, financial results for the periods ended September 30,1983 and 1982 are not necessarily indicative of trends for any twelve-month period.
1 m
w m-,
ae i----e-e--.-
-a
a UNION ELECTRIC COMPANY AND $USSIDIARIES feel 4GErENT'S 015CUS$10N AND Alt 4LY$l$
OF THE RESULTS OF CPERATIONS Consolidated earnings amounted to $98.8 million in the third quarter of 1983, an increase of $21.4 million from the third quarter of 1982. Earnings per share of $l.14 in the third quarter of 1983 isere 13c apre than in the third quarter of 1982. The leproved earnings include approxlestely 18c per share attributable to increased electric sales due to unusually hot weather during the third quarter of 1983. Total kilowatt-hour sales for the third quarter esere up 17% from the third quarter of 1982.
Consolidated earnings amounted to $193.9 million for the ninewronth period ended Septeder 30, 1983, an Increase of
$58.8 million as compared to the corresponding period of 1982. Earnings par share of $2.26 for the nine-month period ended Septed er 30,1983 evere 48c more than the corresponding period of 1982. The leproved earnings primarily reflect increased electric rates, of fset in part by greater costs of providing electric service, and include the effect of the hot weather during the third quarter of 1983. In addition, a gain of 7c per share reallaed from an early 1983 sale of non-utility coal i
properties contributed to the higher earnings.
Consolidated earnings====mted to $224.3 million for the twelve-aunth period ended Septeder 30, 1983 an increase of 3
$64.7 million as compared to the twelve-sunth period ended Septe d er 30. 1982. Earnings per share of $2.65 for the twelve-month period ended Septador 30 1983 were 52c more than the twelve-sunth period ended Septador 30, 1982. The improved earnings primarily reflect increased electric rates, offset In part by greater costs of providing electric service. and a
include the ef fect of the hot weather during the third quarter of 1981. In addition, a gain of 7c per share reallaed from an early 1983 sale of non-utility coal properties contributed to the higher earnings.
Conditions iAlch contributed to the above-mentioned increases are analyzed as follows:
ELECTRIC OPERATING REVENUES The principal factors causing variations in electric revenues (teich accounted for more than 901 of total operating revenues):
Variations for periods ended Septe d er 30 1983 from comparable prior periods Third Quarter Nine f H ths Tuelve Months (nlillons of Dollars) (nlllions of Dollars) (Millions of Dollars)
Rate increases..........................
$l8.9
$ 52.5,
$ 68.5 Effect of weather........................
50.8 45.9 44.6 Growth and other.........................
For leformation concerning rate increases approved since the prior Form 10-Q Report, including a rate Increase placed into effect subsequent to September 30. 1983, see Part II, item 5. Other Information.
OPERATING EXPEN$ES The principal f actors causing variations in operating expenses:
1 Fuel and Furchased Power Fuel:
Increased generation......................
$ 3.1
$ 8.6
$ 12.5 Price increases........................
10.0 23.4 24.1 Plant and system efficiencies.................
3.9 (8.3)
(II.9)
.a Purchased and I nterchange power.................
8 50.5 I.0 08 1.Miel 1 31.1 O
Purchased and Interchange power expenses increased due to greater O
kilowatt-hour requirements as a result of the hot weather during the e
third quarter of 1983. Plant and system efficiencies laproved for the nine and twelve-month periods mainly due to reduced generating unit outages during the first six months of 1983, partly offset by greater utillaation of lower efficiency plants to provide for unusually high demands resulting from the hot weather during the third quarter of 1983.
UNION ELECTRIC COMPAllY AND SUBSIDIARIES MANAGEMENT'S DISCUS $10N AND ANALYSIS OF THE RESULTS OF OPERATIONS (Continued)
OPERATING EXPENSES (Continued)
Other Operations Normal increases due to inflation, wage Increases (see Note following maintenance variation explanation below) and higher cost of purchased gas.
Maintenance The variation in maintenance expense reflects normal increases principally due to higher costs of repair parts and wage Increases.
Note: For Information concerning recent labor agreements, see Part 11. Item S. Other informatlun.
Depreciation The variation in depreciation expense resulted primarily from increases in depreciable property.
Income Taxes income taxes increased principally due to higher pre-tax Income.
Other Taxes The increase in taxes other than Income taxes generally reflects higher gross receipts taxes due to greater revenues as analyzed above and greater real estate taxes.
OTHER ITEMS The increase in Interest on debt reflected greater Indebtedness. Allowance for Funds Used Ouring Construction (AFC)
Increased due to an increased amount of Construction Work in progress. During the nine-annth periods ended September 30. 1913 and 1982, the registrant's annualtred AFC rates averaged II.601 (9.281 net) and ll.6S1 (9.06% net), respectively.
The year-to-date Increase in Miscellaneous Other income reflects $6.7 million from an early 1983 sale of certain j
non-utility coal properties.
MANAGEMENT'S DISCUS $10ll AND ANALYSIS -
FINANCIAL CONDITION LIWIDITY AND CAPITAL RESOURCES:
To raise funds required for its construction program, the registrant will sell 6 million additional shares of common stock on or about Novs e er 15. 1983.
"U Op to O
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PART II.
OTHER INFORMATION ITEM 1.
LEGAL PROCEEDINGS On September 14, 1983, the Atomic Safety and Licensing Appeal Board of the Nuclear Regulatory Commission ("NRC") affirmed the Partial Initial Decision issued on December 13, 1982 by the Atomic Safety and Licensing Board of the NRC which resolved issues in favor of the regis-trant in the operating license proceeding for the Callaway nuclear plant.
Intervenors have petitioned the Appeal Board to reconsider its decision.
On October 31, 1983, the Atomic Safety and Licensing Board issued its Initial Decision resolving in favor of registrant the emergency response planning issues which were the only remaining contested issues in the Callaway Plant operating license proceeding. The Board concluded in its Initial Decision that because all issues in controversy had been resolved in favor of registrant, the Director of Nuclear Reactor Regulation would be authorized, upon making its required additional findings, to issue to registrant a license to operate the Callaway Plant. This Initial Decision is subject to further review by the Atomic Safety and Licensing Appeal Board and the NRC. Any exceptions to the Initial Decision must be filed by mid-November 1983.
The trial in the bondholders' suit before the Federal court which arose from the registrant's proposed special redemption of its First Mortgage Bonds,10-1/2% Series due 2005, has been rescheduled to March 1984 to allow the court an opportunity to consider a settlement reached by plaintiff's counsel and the defendant underwriters and to cir-culate notice of the settlement to the bondholder plaintiffs.
l ITEM 5.
OTHER INFORMATION i
i As part of its most recent request for an increase in electric rates in Missouri, the registrant sought to amortize over a five-year period $32 million of costs (net of taxes) associated with the cancella-tion of the second unit of its Callaway nuclear plant.
By order dated October 21, 1983, the Missouri Public Service Commission (" Missouri Commission") ruled that recovery of such cancellation costs is barred by a state statute which prohibits recovery of costs of a facility in rates "before it is fully operational and used for service." The registrant is of the opinion that the statutory ban does not apply to cancelled plants and, furthermore, that the Commission's interpretation of the statute is unconstitutional because it purports to disallow recovery of costs pru-deutly incurred. The registrant has requested reconsideration by the Commission and, if unsuccessful, will seek judicial review of the Commission's decision.
If the Commission's decision is upheld by the courts, the cancellation costs would be written off and charged against income during the period in which it is determined by the registrant that such cancellation costs are not recoverable.
Effective June 1,1983, the Illinois Commerce Commission authorized an increase in registrant's annual electric revenues of
$8,813,000 and, effective September 27, 1983, authorized an additional increase of $677,000 annually to reflect a corrected calculation of
=
1 income taxes. These increases resulted from a request filed July 9, 1982 for an increase in such revenues of approximately $21,600,000.
On July 29, 1983, the registrant filed with the Federal Energy Regulatory Commission ("FERC") for an annual increase in wholesale elec-tric rates of approximately $17,800,000, which amount has been amended to
$15,095,000.
The increased rates have been suspended until February 27, 1984. Approximately 78% of the increase applies to the registrant's utility subsidiaries as wholesale electric customers and such amount would be eliminated from the request upon completion of the proposed mergers of the registrant and such subsidiaries.
On October 4,1983, in connection with a 1980 FERC decision granting the registrant an annual increase in wholesale electric rates of approximately $8,800,000, the FERC affirmed the Initial Decision of the Administrative Law Judge entered on February 28, 1983 finding in favor of the registrant on all unresolved issues.
i On August 2, 1983, the registrant entered into contracts to sell its steam distribution system in the downtown business section of St. Louis, Missouri and its Ashley Power Plant property for an aggregate consideration of $3,000,000.
The sales are subject to certain contingen-cies, including approval by the Missouri Commission, and are expected to be consummated by the end of 1983.
During the third quarter of 1983 the registrant signed labor agreements with each of the unions representing its employees. The agreements, which expire June 30, 1985, provide for, among other things, increases in wages and benefits aggregating 6% for each twelve month period beginning July 1,1983 and July 1,1984.
An initiative petition presently is being circulated in Missouri which proposes a law to prohibit the operation of nuclear power plants in that state.
If the required signatures are obtained by mid 1984, the proposal is expected to be submitted to a vote at the general election in November 1984.
Each of the registrant's utility subsidiaries have issued first mortgage bonds under indentures and supplemental indentures thereto which require that, upon consummation of the proposed mergers of such subsidi-aries into the registrant (presently proposed for December 30, 1983), the registrant assume certain of the duties and obligations thereunder.
Included in such duties and obligations which may be assumed are coven-ants which restrict the payment by each such. subsidiary of dividends on its capital stock. How the covenants are to be applied to the registrant l
and the effect these covenants would have on the registrant's ability to pay dividends on its capital stock has not been determined and is pres-ently being studied. While certain of these covenants could impose restrictions on the payment of dividends by the registrant which would be more restrictive than those presently contained in the registrant's sup-plemental indentures, the registrant will take all action necessary so that the most restrictive of the covenants would, at the time of the mergers, not restrict the payment of at least $200,000,000 of dividends on its capital stock. The amount of dividends which may subsequently be a
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paid under these restrictions will depend to a large extent on the registrant's earnings after the mergers.
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ITEM 6.
EXHIBITS ~ AND REPORTS ON FORM 8-K
+
(a) Exhibits.
Exhibit 4.1* laa nture of Mortgage and Deed of Trust of Missouri Power & Light Company dated July 1,1946 and Supplemental Inde'ntures dated July 1, 1946, November 1,1949, June 1,1951, July 1,1954, December 1, 1959, July 1, 1962, March 1, 1966, April 1, 1967, June 15, 1969, April 15, 1973, 4..
December 1,1974, May 1,1976 and July 1,1979 t/
(Registration No. 2-87469, Exhibit 4.1).
Exhibit 4.2* Indenture of Mortgage and Deed of Trust of Missouri Edison Company dated July 1,1945 and Supplemental Indentures dated January 1, 1952, June 1, 1961, June 1, 1965, August 1, 1975, September 1, 1976, t
November 1,1977, February 1,1981 and July 1,1982 P'
T (Registration No. 2-87469, Exhibit 4.2).
/
J' Exhibit 4.3* Indenture of Mortgage and Deed of Trust of Missouri Utilities Company dated June 1,1941 and Supplemental Indentures dated December 1,1946, December 1, 1947, April 1, 1948, June 1, 1954, June 1, 1955, June 1, 1956, June 1, 1957,
-d December 1, 1959, June 1,1963, June 1, 1966, 5
March 1, 1971, May 1, 1971, May 1, 1973 and October 1,1976 (Registration No. 2-87469, Exhibit 4.3).
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- These exhibits heretofore have been filed with the Securities and
,(.
Exchange Commission pursuant to requirements of the Acts administered by
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the Commission and are hereby incorporated herein by reference.
(b) Reports on Form 8-K.
None.
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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
UNION ELECTRIC COMPANY (Registrant) e November 7, 1983 By,
p(aald E. Brandt, Controller Chief Accounting Officer)
November 7, 1983 By
//
C. % Mueller, Vfce President 1
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1983.
Commission fde number 1-2967.
UNION ELECTRIC COMPANY (Exact name of registrant as specified in its charter)
Missouri 43-0559760 (State or other jurisdiction of (I.R.s. Employer incorporation or organization)
Identi6 cation No.)
1901 Gratiot Street, St. Louis, Missouri 63103
( Address of principal executive ofBees and Zip Code)
Registrant's telephone number, including area code: (314) 621-3222 Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange Title of each class on which registered First Mortgage Bonds:
13% Series due 2013-due March 1,2013 8%% Series due 2007-due December 1, 2007 8%% Series due 2006-due September 1,2006 New York Stock Exchange 10%% Series duc 2005-due March 1, 2005 15% Series due 1992-due September 1,1992 15%% Series due 1991-due February 1,1991 Common Stock, $5 par value New York Stock Exchange Preferred Stock, without par value (entitled to cumulative dividends):
Stated value $100 per share-
$7.44 Series
$6.40 Series
$4.56 Series
$4.50 Series
$4.00 Series (of 1949)
$3.50 Series Stated lu $97 per share-New York Stock Exchange Stated value $92.25 per share-
$8.00 Series (of 1969)
Stated value $25 per share-
$4.00 Series of 19S2
$2.98 Series
$2.72 Series
$2.125 Series Securities Registered Pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be fded by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /. No Aggregate market value of voting stock held by non. affiliates as of March 1,1984, based on closing prices most recently available as reported in The Wall Street Journal (excluding Preferred Stock for which quotes are not publicly available): $1,501,924,105.
Shares of Common Stock, $5 par value, outstanding as of March 1,19S4:-94,963,082 shares (excluding 42,990 treasury shares).
Document Incorporated by
Reference:
Portions of the registrant's definitive proxy statement for the 1984 annual meeting are incorpo.
rated by reference into Part Ill.
TABLE OF CONTENTS PART I Page Item 1 - Business General 1
Industry and Company Problems 1
Construction Program and Financing.........................
2 Rates 4
Fuel Supply 6
Regulation 7
Environmental Matters 9
Employees 9
Statistical Information 10 Financial Position 12 Item 2 - Properties 13 Item 3 - Legal Proceedings 15 Item 4 - (**)
Executive Officers of the Registrant (Item 401(b) of Regulation S-K)...
16 PART II Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters 18 Item 6 - Selected Financial Data 19 Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations.................................
20
- Supplementary Information on Inflation and Changing Prices 22 Item 8 - Financial Statements and Supplementary Data Selected Quarterly Information.......................................
24 Report of Independent Accountants 25 Index to Financial Statements 26 Financial Statements 27 Item 9 - (**)
PART III Item 10 - Directors and Executive Officers of the Registrant (*)........
50 Item 11 - Executive Compensation (*)....................................
50 Item 12 - Security Ownership of Certain Beneficial Owners and Management (*)........................................
50 Item 13 - Certain Relationships and Related Transactions (*)
50 l
PART IV Item 14 - Exhibits, Financial Statement Schedules, and Reports on Form 8-K 51 SIGNATURES 52 EXHIBITS 53
(*) incorporated by reference.
(**)Not applicable and not included herein.
PART I ITEM 1.
BUSINESS.
GENERAL The registrant, Union Electric Company- (the " Company"), incorporated in Missouri in 1922, is successor to a number of companies, the oldest of which was organized in 1881.
In December 1983, each of the Company's three utility subsidiaries, Missouri Edison Company, Missouri Power & Light Company and Missouri Utilities Company, merged into the Company. Upon consummation of the mergers the subsidiaries ceased to exist and the Company became successor-to each subsidiary and acquired all properties and assumed all assets, liabil-ities and obligations thereof, including payment of principal and interest on all outstanding first mortgage bonds.
The Company supplies electric service in territories in Missouri, Illinois and Iowa having an estimated population of 2,555,000 within an area of approximately 24,000 square miles, including the Metropolitan St. Louis Area. Natural gas purchased from non-affiliated pipeline companies is dis-tributed in 90 Missouri communities and in the City of Alton, Illinois and vicinity.
In addition, the Company provides water service in the City of Cape Girardeau, Missouri and supplies steam service to the state government in Jefferson City, Missouri. A totally held subsidiary, Union Colliery Company, owns and leases coal reserves and holds industrial lands.
Steam produced at the Company's Ashley Plant is currently dis-tributed in the downtown business section of St. Louis. The Company has agreed to sell the distribution system and the Ashley Plant for an aggregate consideration of $3,000,000.
The sales are subject to certain contingencies, including approval by the Missouri Public Service Commission.
Electric operating revenues as a percentage of total operating reve-nues for the years 1979, 1980, 1981, and 1982 were 92.4%, 92.5%, 92.2%, and 91.3%, respectively. For the year 1983,.91.4% of consolidated total operating revenues was derived from the sale of electric energy, 7.5% from the sale of natural gas and the remainder from other services.
INDUSTRY AND COMPANY PROBLEMS The Company is experiencing, in varying degrees, problems common to the electric utility industry during recent years. These include.high cost of capital; increases in operating expenses and construction costs due to infla-tion and regulation; the effects of energy conservation on sales growth; un-certain economic conditions; continually developing environmental regulations; difficulty in obtaining adequate and timely rate increases; uncertainties in connection with the construction of nuclear generating facilities and the nu-clear fuel cycle; public concern over nuclear energy; uncertainties in future actions of regulatory authorities and the concern of such authorities with nu-clear power, rate structure, projected load growth, and energy costs; inabil-ity to include ionstruction work in progress in rate base and substantial ex-penditures associated with construction of the Company's Callaway nuclear plant which have caused a decline in the percent of construction funds gener-ated internally and have adversely affected the quality of the Company's earn-ings by increasing the percent of such earnings represented by allowance for funds used during construction (a non-cash item).
1
CONSTRUCTION PROGRAM AND FINANCING During the five-year period ended 1983 gross additions to the
. property of the Company and its subsidiaries, including allowance for funds used during construction ("AFC") and excluding nuclear fuel, were $2.7 billion
-(including $686 million in 1983) and property retirements were $82.6 million.
Through 1983 the Company had expended $2.37 billion on its 1,150 mW Callaway nuclear plant, which is scheduled to be placed in service in late 1984 or early 1985 at an estimated total cost of $2.85 billion (including AFC of ap-proximately $1.05 billion). The following table sets forth the Company's ac-tual construction expenditures and estimated expenditures for presently 0
proposed construction, excluding nuclear fuel, for the periods indicated:
l Estimated Actual 1979-1983 1984 1985 1986 1987 1988 1984-1988 (Millions of Dollars)
Callaway Plant
$1,957
$451 $ 25 $ - $
$ 476 Generating Facilities 223 12 18 23 14 14 81 Transmission and Distribution.
373 76 85 97 92 96 446 l
Other.
116 28 29 36 41 30 164 Total..........
$2,669
$567.$157 $156 $147 $140
$1,167 Less AFC 305*
18*
5 4
4 336 Net Cash Requirements.
$262 $139 $151 $143 $136
$ 831 I
- Substantially all related to the Callaway Plant.
1 In 1974, the Company applied to the Nuclear Regulatory Commission I
("NRC") and the Missouri Public Service Commission for permission to construct the Callaway Plant. The first unit was scheduled for 1981 at an estimated cost of $895 million and the second unit was scheduled for 1983 at an esti-mated cost of $863 million. -By 1975 changes in assumptions which recognized higher inflation rates, higher interest costs and actual and projected costs of other nuclear facilities, raised the estimated cost of the units to about
$900 million each.
In 1977 the in-service dates of the two units were deferred until 1982 and 1987, which, combined with still higher escalation and interest rate assumptions, added approximately $193 million to the cost of the
)
first unit and $434 million to the cost of the second unit. The 1977 defer-rals resulted primarily from a change in Missouri public utility law which Prohibited'the inclusion of construction work in progress in rate base and from construction delays and because projected load growth was less than Previously anticipated. Early in 1980 the expected in-service date of the second unit was deferred to 1988 because of further revisions of projected i
load growth. Such change, together with design and specification improvements j
since the prior revision of estimates, increased estimated costs by $229 mil-l lion for the first unit and $373 million for the second unit.
Later, in Oc-tober 1980, the Company announced a six-month deferral to April'1983 in the j
expected completion of the first unit.
Such deferral was primarily due to labor strikes and lower than expected productivity due to increasingly stringent regulations and, combined with the effects of continuing inflation, 2
i
added an estimated $269 million to the cost of the first unit and $89 million to the cost of the second unit.
In April 1981, the expected in-service date of the second unit was deferred to 1990 because of the Company's reluctance to commit substantial sums of money to the second unit until the first unit was licensed by the NRC and the Company was permitted to earn a reasonable return on its investment in that unit.
Such deferral increased the estimated cost of the second unit by $500 million.
In October 1981, the Company announced that Callaway Unit No.
1, which had been scheduled to be placed in service in April 1983, was expected to be placed in service in early 1984. This delay resulted primarily from problems with meeting construction schedules and a reappraisal of the work remaining to be completed.
In October 1981, the Company also in-creased the estimated cost of this unit by $500 million, primarily becausa of increased AFC and labor expenditures, resulting in an estimated completeu cost of $2.1 billion. Also in October 1981, the Company cancelled construction of Unit No. 2 at its Callaway Plant which unit had been scheduled to be placed in service in 1990. This decision was made because of increasing problems and risks associated with financing construction of the unit and increasing regu-latory problems associated with the construction, licensing and operation of nuclear generating facilities.
In August 1982, the Company again revised its estimate as to when Callaway Unit No. I would be placed in service from early 1984 to late 1984 or early 1985. This rescheduling was principally due to the exacting nature of the remaining construction activities coupled with ex-tremely rigid quality requirements, which increased the projection of craft and technical support manhours necessary to complete the project. The esti-mated cost of the unit was increased to $2.85 billion (including AFC of ap-proximately $1.05 billion).
Construction projects are under constant review and actual expendi-tures and completion dates may vary from present estimates as they have in the past because of, among other reasons, continuing increases in the costs of construction and financing, public opposition and other difficulties with the construction and licensing of nuclear facilities, the inability to obtain ade-quate rate relief, difficulties in obtaining the funds required for the con-struction program, changes in load and sales growth, and changes in business conditions.
The Company expects that substantially all its net cash requirements for construction in 1984 will be obtained from external funds.
Such external funds are expected to be obtained from sales of Common Stock under the Company's Dividend Reinvestment and Stock Purchase Plan and Employee Stock Ownership Plan (formerly the Tax Reduction Act Stock Ownership Plan), long-term debt securities, interim short-term borrowings and other forms of financing. The Company expects to issue up to $200,000,000 of lor.g-term debt and to increase the limit of its nuclear fuel lease from $200 million to $300 million in the first half of 1984.
In addition to the funds required for construction during the 1984-1988 period, $439,353,000 will be required to repay long-term debt and Preferred Stock outstanding as of December 31, 1983 as follows:
$12,754,000 in 1984, $28,487,000 in 1985, $104,620,000 in 1986, $92,788,000 in 1987, and
$200,704,000 in 1988. Also, payments will be made under the Company's nuclear fuel lease.
The types, amounts and timing of financings will depend upon market conditions, construction program revisions, rate levels, and other factors, including the various financing restrictions discussed below.
No assurance can be given that the Company will obtain the external funds which will be required.
3 l
See " Rates" for a discussion of rate increase requests filed to provide a return on the Company's investment in the Callaway Plant.
In the event the Company is not permitted to recover an adequate return on such in-vestment and is required to discontinue recording AFC, there would be a sub-stantial adverse effect on earnings.
Financing Restrictions. Under the most restrictive earnings test contained in the Company's Indenture of Mortgage and Deed of Trust
(" Mortgage") relating to its First Mortgage Bonds (" Bonds"), no Bonds may be issued (except in certain refunding operations) unless the Company's net earn-ings available for interest after depreciation (the amount of AFC and other net non-operating income which may be included in such net earnings being lim-ited to an amount not in excess of 10% of the portion of such net earnings j
which does not constitute net non-operating income) for 12 consecutive months within the 15 months preceding such issuance are at least two times annual in-terest charges on all Bonds and prior lien bonds then outstanding and to be issued (all calculated as provided in the Mortgage).
Such ratio for the 12 months ended December 31, 1983 was 2.74, which would permit the Company to is-1 sue an additional $434 million of Bonds (13% annual interest rate assumed).
The Company's Articles of Incorporation restrict the Company from selling Preferred Stock unless its net earnings for a period of 12 consecutive conths within 15 months preceding such sale are at least two and one-half times the annual dividend requirements on its Preferred Stock then outstanding and to be issued.
Such ratio for the 12 months ended December 31, 1983 was 5.42, which j
would permit the Company to issue an additional $488 million stated value of j
Preferred Stock (12% annual dividend rate assumed).
Certain other financing i
arrangements require the Company to obtain prior consents to various actions by the Company, including any future borrowings, except for permitted financ-ings such as borrowings under certain revolving credit agreements, unsecured short-term borrowings (subject to certain conditions) and the issuance of ad-ditional Bonds.
RATES For the year 1983, approximately 86%, 11% and 3% of the Company's retail electric operating revenues were based on rates regulated by Missouri, Illinois, and Iowa, respectively. Approximately 13% (3.6% excluding sales to former subsidiaries) of total electric revenues were also subject to the jurisdiction of the Federal Energy Regulatory Commission ("FERC") of the Department of Energy. The Company presently has fuel adjustment riders in all jurisdictions other than Missouri which permit recovery of substantially all fuel costs applicable to those jurisdictions.
In 1979, the Missouri Supreme Court ruled that automatic fuel adjustment riders were unlawful in Missouri.
Missouri On February 15, 1984, the Company filed a request with the Missouri Public Service Commission (" Missouri Commission") for an increase in annual electric revenues of approximately $640 million, exclusive of gross receipts taxes, based principally on the anticipated commercial operation of the Cal-laway Plant.
As an alternative to implementing the entire proposed increase at one time, the request includes a proposed rate phase-in plan under which the impact of the initial rate increase would be spread over a five-year period.
Under the proposed rate phase-in, annual electric rates would in-crease by approximately 25 percent the first year and by approximately 8 per-cent in each of the following four years (absent any subsequent applications to recover future cost increases). This plan would not affect reported earn-4
ings and is not designed to eliminate or permanently reduce any of the costs associated with the Callaway investment, but rather spreads the initial rate impact of the Plant over five years. Under Missouri law, the Missouri Commis-sion must render a decision on the rate increase request by January 14, 1985.
By order dated July 6, 1983 (effective July 10, 1983) the Missouri Commission authorized an annual increase in the Company's electric rates of
$30,500,000, exclusive of gross receipts taxes, as a result of a request filed December 3,1982 for an annual increase in such rates of approximately
$122,000,000. A portion of the increase is being collected, subject to audit and refund, based on the estimated cost of fuel in January 1984. As a part of this case the Company sought to amortize over a five year period the Missouri portion of costs associated with the cancellation of the second unit at its Callaway Plant.
By a subsequent order dated October 21, 1983, which the Com-pany has appealed, the Missouri Commission ruled that recovery of such cancel-lation costs is barred by a state statute which prohibits recovery of costs of a facility in rates "before it is fully operational and used for service."
The Company is of the opinion that the statutory ban does not apply to cancelled plants and, furthermore, that the Missouri Commission's interpreta-tion of the statute is unconstitutional because it disallows recovery of costs prudently incurred.
Illinois, Iowa and FERC On February 15, 1984, the Company filed a request with the Illinois Commerce Commission (" Illinois Commission") for an increase in annual electric revenues of approximately $78 million, exclusive of add-on revenue taxes, based principally on the anticipated commercial operation of the Callaway Plant. This request also includes an alternative rate phase-in plan compara-ble to that proposed in the February 15, 1984 filing with the Missouri Commission. Under Illinois law, the Illinois Commission must render a deci-sion on the proposed rates by January 14, 1985.
As a result of a request filed with the Illinois Commission on July 9,1982 for an increase in annual electric revenues of approximately
$21,600,000, the Illinois Commission granted an increase of approximately
$8,800,000, effective June 1, 1983, which included recovery of the Illinois portion of costs attributable to the cancellation of the Company's second nu-clear unit. On rehearing, the Illinois Commission authorized an additional increase in electric revenues of $677,000 annually, effective September 27, 1983.
Effective April 18, 1981, the Illinois Commission authorized an an-nual increase in the Company's electric rates of approximately $10,700,000, as a result of a request for approximately $15,200,000 filed in May, 1980.
The Company and intervenors appealed to the Illinois Circuit Court, which affirmed the Illinois Commission's decision, and the intervenors have appealed the Cir-cuit Court decision.
In February 1984, the Iowa State Commerce Commission authorized an annual increase in the Company's electric rates of approximately $2,400,000, as a result of a request for approximately $6,200,000 filed in May, 1983.
Since June 10, 1983, the Company had been collecting an interim increase of
$1,545,000, subject to refund.
On July 29, 1983, the Company filed with the FERC for an annual in-crease in wholesale electric rates of approximately $17,800,000, which in-5
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cluded increases to the Company's former subsidiaries. As a result of the
)
mergers of the subsidiaries into the Company, and summary disposition by the l
FERC of certain issues related to the Company's proposed increase, the 1
requested amount has'been reduced to approximately $3,300,000. This amount was allowed to become effective February 27, 1984, subject to refund.
On May 8, 1981, the Company filed with the FERC for an annual in-crease in wholesale electric rates of approximately $19,140,000. The FERC ruled summarily against the Company on certain issues, and allowed an increase of approximately $12,800,000 to go into effect on July 9, 1981, subject to refund.
Intervenors appealed that order, which order was affirmed by the United States Court of Appeals on October 20, 1982. On December 17, 1982, the i
FERC Administrative Law Judge entered an Initial Decision granting an annual increase of approximately $13,800,000. That decision was modified by an Order of the FERC on February 3, 1984, the effect of which is to maintain the whole-sale electric rates which took effect on July 9, 1981 until February 27, 1984, at which time such rates will increase as described in the previous paragraph.
On September 26, 1977, the Company filed a request with the FERC for an increase in wholesale electric rates of $15,000,000.
Such increased rates were put into effect on March 27, 1978 subject to refund and on September 2, 1980 the FERC granted the Company an increase in wholesale electric rates of approximately $8,800,000 annually.
The Company's tariffs implementing the September 1980 FERC decision were approved by the FERC on March 29, 1981.
Certain issues not resolved by the FERC were remanded to the FERC Administra-tive Law Jc'ge for hearings, which were held in July 1982. On February 28, 1983, the Administrative Law Judge entered an Initial Decision finding for the Company on all unresolved issues. This decision was affirmed by the FERC on l
October 4, 1983, and the case has been appealed to the U.S. Court of Appeals by the Company and intervenors.
The Company expects to file rate increase requests with the FERC and the Iowa Commission later in 1984, based principally on the anticipated com-mercial operation of the Callaway Plant.
Due to continuing increases in the i
costs of providing adequate and reliable service to the public, the Company l
anticipates it will file additional rate increase requests in all jurisdic-tions in the foreseeable future. The Company cannot predict the amount and timing of future rate increase requests and can give no assurance that needed rate relief will be granted.
l FUEL SUPPLY Coal. The majority of the Company's coal supply is obtained from nearby southern Illinois and vicinity, with less than 7% being obtained from i
western sources.
Currently, the Company has long-term contracts providing for over 85% of its coal requirements.
Approximately 65% of the coal requirements for the estimated remaining useful life of the Company's coal-fired generating plants is under long-term contract.
Such contracts provide for supplies of both low sulphur coal and high sulphur coal.
In addition to coal obtained pursuant to long-term contracts, the Company burns coal supplied pursuant to short-term contracts and by spot purchases and in 1983 the average price for j
such purchases was $34.66 per ton.
Because of uncertainties of supply due to
)
potential work stoppages, equipment breakdowns and other factors, the Company has a policy of maintaining a coal inventory of 75 days, based on normal an-nual burn practices.
On March 1, 1984 the Company's coal inventory was ap-proximately 57 days.
Additional coal will be required to meet the Company's long range requirements, at prices which cannot now be predicted.
6
i Oil and Gas.
The Company anticipates that generation attributable to oil and gas-fired peaking units will be less than 1% of total annual gener-ation in each of the next ten years.
In addition, oil and propane gas are used in relatively small amounts for coal ignition and flame stabilization.
Since the actual and prospective use of such fuels is minimal, the Company has not experienced and does not expect to experience difficulty in obtaining adequate supplies.
Cost of Fuels. The Company expects the cost of its fuel supply will continue to increase and expects moderate increases in 1984.
Set forth in the table below is information concerning the cost of the Company's fuel:
Year 1983 1982 1981 1980 1979 Per Ton of Coal Burned
$33.33
$30.45
$29.15
$26.85
$26.02 Per Million BTU 155.485C 143.724C 138.366C 124.914C 123.741C Per kWh of Steam Generation 1.581C 1.465C 1.415C 1.291C 1.273C Nuclear. The components of the nuclear fuel cycle required for nu-clear generating units are as follows:
(1) uranium (U 0 ); (2) conversion of 3 3 uranium (U 0 ) into uranium hexafluoride; (3) enrichment of uranium hexa-3 8 fluoride; (4) conversion of enriched uranium hexafluoride into uranium dioxide and the fabrication thereof into nuclear fuel assemblies; and (5) disposal and/or reprocessing of spent nuclear fuel. A portion of the nuclear fuel as-semblies is expended and requires replacement periodically. The spent nuclear fuel is removed from the reactor and stored.
Spent fuel may be reprocessed to extract reusable materials should future federal policy so allow and if com-mercial reprocessing facilities become available.
The Company has contracts for a substantial portion of the various components of the nuclear fuel cycle which are sufficient, based on current assumptions, to supply the Callaway Plant through the end of this century.
Additional contracts will have to be entered into in order to supply nuclear fuel during the remainder of the estimated life of the Plant, and the Company believes that the required components of the nuclear fuel cycle can be obtained. The Company's contracts for uranium, for enrichment services, for conversion services through 1988 and for fabrication services have been as-signed or sold to a non-affiliated corporation established for the purpose of financing such fuel under the Company's nuclear fuel lease.
If reprocessing of spent nuclear fuel becomes practicable in the future, it may be desirable for the Company to provide for such reprocessing, but to date no arrangements have been made.
Spent nuclear fuel is not ex-pected to be removed from the Callaway reactor before 1986, and since the unit will have the capacity to store spent fuel for up to twenty years, reprocess-ing or off-stte disposal will not be required until after the turn of the century. Off-site storage of spent nuclear fuel is to be provided by the Fed-eral government pursuant to the Nuclear Waste Policy Act of 1982.
REGULATION The Company is subject to regulation by the Missouri Commission and Illinois Commission as to rates, service, accounts, issuance of equity securi-ties, issuance of debt having a maturity of more than twelve months, and various other matters and, except for issuance of securities, is similarly 7
subject to regulation by the Iowa State Commerce Commission. The Company is also subject to regulation by the FERC as to rates and charges in connection with the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce, accounting and deprecia-tion policies and certain other matters. Authorization to issue debt having a maturity of twelve months or less is obtained from the FERC.
Construction and operation of the Company's Callaway Plant are sub-ject to regulation by the NRC. On December 12, 1983, the NRC amended the Company's construction permit for such plant, extending the term thereof to June 30, 1985.
In order to achieve commercial operation by late 1984 or early 1985 the Company will need to obtain an operating license in the second quar-ter of 1984. On September 14, 1983, the Atomic Safety and Licensing Appeal Board of the NRC affirmed a Partial Initial Decision issued on December 13, 1982 by the Atomic Safety and Licensing Board of the NRC which resolved issues in favor of the Company in the operating license proceeding for the Callaway Plant.
On October 31, 1983, the Atomic Safety and Licensing Board issued its Initial Decision resolving in favor of the Company the emergency response planning issues which were the only remaining contested issues in the Callaway Plant operating license proceeding. The Board concluded in its Initial Deci-sion that because all issues in controversy had been resolved in favor of the Company, the Director of Nuclear Reactor Regulation would be authorized, upon making its required additional findings, to issue to the Company a license to operate the Callaway Plant. This Initial Decision is subject to further review by the NRC.
Construction and licensing of the Callaway Plant are gen-erally proceeding on schedule. Nevertheless, licensing and other delays have occurred with respect to other nuclear generating units, and no assurance can be given that requisite approvals for the Callaway Plant will be received on a timely basis.
The Company's Osage hydroelectric plant and its Taum Sauk pumped-storage hydro plant, as licensed projects under the Federal Power Act, are subject to certain federal regulations affecting, among other things, the general operation and maintenance of the projects. The Company's license for the Osage Plant was renewed in 1981 and expires on February 28, 2006, and its 50 year license for the Taum Sauk Plant expires on June 30, 2010.
l The Company's Keokuk Plant and dam located in the Mississippi River between Hamilton, Illinois and Keokuk, Iowa, are operated under authority, un-limited in time, granted by an Act of Congress in 1905.
The Company is exempt from the provisions of the Public Utility Holding Company Act of 1935, except Section 9(a)(2) thereof relating to the acquisition of securities of other public utility companies and l
Section 11(b)(2) thereof with respect to concluding matters relating to the 1974 acquisition of Missouri Utilities Company common stock. When the Securities and Exchange Commission approved such acquisition it reserved jurisdiction to pass upon the right of the Company and its utility subsidi-aries to retain their gas properties.
The Powerplant and Industrial Fuel Use Act of 1978 provides that the Secretary of Energy shall by rule require that any existing electric power i
Plant which, during calendar year 1977, used coal as a primary energy source may not use petroleum as a primary energy source except in emergencies unless the Secretary of Energy issues a permit. The Company has 210 mW of oil-fired capacity at its Venice Plant that is subject to this prohibition.
8
ENVIRONMENTAL MATTERS The Company is regulated, in certain of its operations, by air and water pollution regulat.ons at the city, county, state and federal levels.
d The Company is either complying with such regulations or is seeking variances in administrative proceedings. On August 8, 1980, the Director of the Mis-souri Department of Natural Resources issued a National Pollutant Discharge Elimination System permit for the Company's Callaway Plant. Limitations con-tained in the permit prevent solids from the water treatment plant from being discharged back into the Missouri River.
The State of Missouri has recom-mended issuance of a variance, subject to approval by the Environmental Protection Agency (" EPA"), to permit a return of the material to the river.
On December 29, 1981, the EPA issued a preliminary finding that the variance be approved and final EPA action is pending.
While the Company cannot accurately estimate the total effect of ex-isting and future environmental regulations and standards upon existing and proposed facilities and the operations of the Company, its commitment to im-prove the environment required expenditures (exclusive of those relating to nuclear facilities) of approximately $187 million during the five year period 1979 through 1983 (of which $49 million was expended in 1982 and $22 million in 1983). Non-nuclear construction expenditures related to environmental mat-ters for the period 1984-1988 are expected to total $62 million, consisting of
$10 million for air quality control, $23 million for solid waste disposal, $25 million for the undergrounding of transmission and distribution lines, $3 mil-lion for improving the functional and aesthetic characteristics of transmis-sion and distribution facilities, and $1 million for noise abatement. Of the total amount, $6 million is estimated to be expended in 1984 and $7 million in 1985.
In addition, $347 million for environmental control matters is in-cluded in the Callaway Plant construction expenditures discussed under
" Construction Program and Financing," including $287 million for radiological control and $60 million for water and miscellaneous environmental control matters. Approximately $10 million remains to be expended for such facilities and is expected to be expended in 1984.
EMPLOYEES The Company employed 7,270 persons at December 31, 1983. Approxi-mately 73% of the Company's employees are represented by local unions, sub-stantially all of which are affiliated with the AFL-CIO. Agreements with I
local unions representing approximately 665 employees have expired or will ex-pire later in 1984, and negotiations with such unions are in progress.
Labor agreements covering the remaining union employees expire June 30, 1985.
i 9
STATISTICAL INFORMATION 1983 1982 1981 1980 1979 Percentage of earnings on Common Stock attributable to AFC*
86.3 89.8 87.4 55.9 49.5 Common Stock dividends as a percentage of earnings.
63.3 72.6 79.7 70.5 82.9
- Net after the income tax effect applicable to the borrowed funds portion of AFC.
KILOWATT HOUR OUTPUT (in millions)
Fuel generation.
24,567 23,798 23,898 25,153 25,573 Hydro generation.
1,616 1,611 1,461 1,192 1,336 Purchased from Electric Energy, Inc.
835 1,101 1,272 1,696 1,431 Net Interchange and other purchases.
1,101 (498)
(458) (1,147) (2,600)
Total Output.
28,119 26,012 26,173 26,894 25,740 Less line losses and system use.
2,190 1,915 1,894 2,099 2,051 Kilowatt Hour Sales.
25,929 24,097 24,279 24,795 23,689 CONTINUED ON NEXT PAGE 10 l
I
STATISTICAL INFORMATION Continued Union Electric and Subsidiaries 1983 1982 1981 1980 1979 Electric Operating Revenues (000):
Residential
$ 524,792 $ 426,213 $ 389,182
$402,160
$333,251 Commercial 402,737 363,826 321,400 306,486 265,278 Industrial 281,397 257,320 250,842 233,854 221,617 Other Electric Utilities 46,428 42,650 39,789 35,619 34,185 Miscellaneous 25,800 21,846 18,458 18,774 20,388 Total
$1,281,154 $1,111,855 $1,019,671
$996,893
$874,719 Kilowatt-Hour Sales (000,000):
Residential 8,979 7,906 7,756 8,446 7,546 Commercial 7,653 7,339 7,024 6,913 6,463 Industrial 7,478 7,130 7,767 7,616 7,858 Other Electric Utilities 1,498 1,412 1,420 1,435 1,341 Miscellaneous 321 310 312 385 481 Total 25,929 24,097 24,279 24,795 23,689 Electric Customers (End of Year):
Residential 879,156 869,844 870,066 862,406 853,908 Commercial 110,048 109,947 108,561 106,428 101,355 Industrial 5,126 5,132 5,207 5,328 5,334 Electric Utilities 24 24 24 24 24 Other 3,297 3,234 3,065 2,950 2,917 Total 997,651 988,181 986,923 977,136 963,538 Residential Customer Data (Average):
Kilowatt-hours Used 10,283 9,108 8,955 9,848 8,893 Annual Electric Bill
$601.03
$490.96
$449.35
$468.92
$392.74 Revenue per Kilowatt-hour 5.84C 5.39C 5.02C 4.76C 4.42C System Gross Instantaneous Peak Demand (Kilowatts) 6,598,000 6,161,000 6,296,000 6,404,000 5,846,000 C:pability at Time of Peak, Including Net Purchases (Kilowatts) 7,633,000 7,631,000 7,444,000 7,468,000 7,739,000 G:nerating Capability at Time of Peak (Kilowatts) 6,948,000 6,951,000 6,879,000 6,824,000 6,947,000 Coml Burned (Tons) 11,371,000 11,085,000 11,316,000 11,730,000 12,037,000 Price per Ton of Coal
$33.33
$30.45
$29.15
$26.85
$26.02 11
u Financial Position (Thousands of Dollars Except Share and Per Share Amounts and Ratios)
Union Electric and Subsidiaries December 31, 1983 1982 1981 1980 1979 Assets Properties (at original cost).
65,858,554 $5,190,779 $4,554,567 $4,051,124 $3,649,728 Less accumulated depreciation.
1,062,765 984,656 915,996 848,826 786,147 4,795,789 4,206,123 3,638,571 3.202,298 2,863,581 Receivables, net.
174,382 146,293 135,496 126,075 148,482 Fuel supplies.
73,889 99,006 82,310 109.908 85,107 Other assets.
161,496 179,375 190,900 113.823 71,828 Total Assets
$ 5,205,556 $4,630,797 $4,047,277 $3,552,104 $3,168,998 Capital and Liabilities i
Capitalization:
Common stock and retained earnings-Common stock.
S 473,451
$ 422,068 $ 373,780 $ 330,627 $ 233,984 Other paid-in capital.
637,039 541,222 464,450 414,020 374,189
. Retained earnings.
445,011 364,771 324,547 298,902 262,202 Common equity.
1,555,501 1,328,061 1,162,777 1,043,549 930,375 Preferred stock not subject to mandatory redemption.
356,270 281,355 281,355 281,355 281,355 Preferred stock subject to mandatcry redemption.
180,962 182,988 110,014 112,040 114,066 Long-term deut obligations.
2,108,047 2,000,405 1,719,927 1,479,229 1,307,990 Total capita!ization 4,200,780 3,792,809 3,274,073 2,916,173 2,633,786 Accumulated deferred
~
taxes on income..
408,171 328,580 238,153 166,167 123,291 Accumu'ated deferred investment tax credits.
164,468 122,217 125,290 113,474 87,556 Accounts and wages payable.
175,561 137,209 91,567 98,224 100,310 Short-term debt including current maturities.
42,228 69,323 152,253 141,895 122,909 j
Other liabilities..
214,348 180,659 165,941 116,171 101,146 l
Total Capital and Liabilities
$5,205,556 $4,630,797 $4,047,277 $3,552,104 $3,168,998 l
Common Equity Data Number of shares outstanding.
94,690,220 84,413,679 74,755.885 66,125,317 58,796,909 Book value (common equity) per share.
$16.43
$15.73
$15.55
$15.78
$15.82 Capitalization Ratios Common equity.
37.0%
35.0%
35.5%
35.8%
35.3%
i Preferred stcck not subject i
to mandatory redemption.
8.5 7.4 8.6 9.7 10.7 Preferred stock subject to mandatory redemption.
4,3 4.8 3.4 3.8 4.3 Long-term debt.
50,2 52.8 52.5 50.7 49.7 Total 100.0%
100.0%
100.0%
100.0%
100.0%
12
ITEM 2.
PROPERTIES.
The following table sets forth information with respect to the ex-isting generating facilities of the C3mpany.
Percent Gross Kilowatt of 1983 Energy Generating Net Source Plant Location Capability (1)
Generation Coal Labadie Franklin County, Mo.
2,316,000 Sioux St. Charles County, Mo.
956,000 Meramec St. Louis County, Mo.
920,000 Rush Island Jefferson County, Mo.
1,210,000 Total Coal 5,402,000 93.7 Hydro Osage (2)
Lakeside, Mo.
212,000 Keokuk Keokuk, Ia.
119,000 Total Hydro 331,000 (3) 6.1 Oil and Venice Venice, Ill.
456,000 Natural Other Various 386,000 Gas (2)
Total Oil and Natural Gas 842,000
.1 Pumped-storage (2) Taum Sauk Reynolds County, Mo.
300,000
.1 6,875,000 100.00 (1) At time of the expected maximum gross instantaneous demand on the Company's system in 1984.
(2) Used primarily for peaking and emergency generation.
(3) Based on normal river flow.
The maximum gross instantaneous demand on the Company's system oc-curred on July 21, 1983 and amounted to 6,598,000 kW.
Generating capability existing at that time totaled 6,948,000 kW which, together with power avail-able from firm interchange and purchase contracts, provided a reserve of ap-proximately 16%.
See Page 11 for information on loads and capability during the five year period ended 1983.
In planning its construction program, the Company is presently utilizing a forecast of load growth approximating 1.2%
compounded annually and is providing for a minimum reserve margin of approxi-mately 18% to 20% above its anticipated peak load requirements.
The Company is a member of one of the nine regional electric relia-bility councils organized for coordinating the planning and operation of the nation's bulk power supply - MAIN (Mid-America Interpool Network) operating primarily in Wisconsin, Illinois and Missouri. The Company has interconnec-tions for the exchange of power, directly and through the facilities of others, with seventeen private utilities and with Associated Electric Coopera-tive, Inc., the City of Columbia, Missouri, the Southwestern Power Administra-tion and the Tennessee Valley Authority.
The Company owns 40% of the capital stock of Electric Energy, Inc.
("EEI"), the balance of which is held by three other " sponsoring companies."
13
EEI owns and operates a generating plant with a capacity of 1,000,000 kW, of which 735,000 kW is committed to the Paducah Project of the Department of Energy. The sponsoring companies are entitled to surplus power from EEI's generating plant in the ratio of their participation in the Common Stock of EEI, and accordingly, the Company is entitled to 40% of such surplus power, up to 106,000 kW.
The Company has an option to purchase up to 367,000 kW from EEI, subject to certain limitations, during the period October 1,1987 through December 31, 1989.
As of December 31, 1983, the Company owned approximately 6,026 cir-cuit miles of electric transmission lines and 773 substations with a transfor-mer capacity of approximately 37,918,000 kVA. The Company owns five propane-air plants with an aggregate daily natural gas equivalent capacity of 29,940 Mcf and 2,302 miles of gas mains. The Company also owns and operates approxi-mately 185 miles of water mains and two pumping, purification and treating plants with a capacity of 5.9 million gallons of water per day. Other proper-ties of the Company include distribution lices, underground cable, steam dis-tribution facilities in downtown St. Louis and Jefferson City, Missouri and office buildings, warehouses, garages and repair shops at various locations throughout the territory served.
The Company has fee title to all principal plants and other impor-tant units of property, or to the real property on which such facilities are located (subject to mortgage liens securing outstanding indebtedness of the Company and to permitted liens and judgment liens, as defined), except that (i) a portion of the Osage Plant reservoir, certain facilities at the Sioux Plant, certain of the Company's substations and most of its transmission and distribution lines and gas and water mains are situated on lands occupied un-der leases, easements, franchises, licenses or permits; (ii) the United States and/or the State of Missouri own, or have or may have, paramount rights to certain lands lying in the bed of the Osage River or located between the inner and outer harbor lines of the Mississippi River, on which certain generating and other properties of the Company are located; and (iii) the United States and/or State of Illinois and/or State of Iowa and/or City of Keokuk, Iowa own, or have or may have, paramount rights with respect to, certain lands lying in the bed of the Mississippi River on which a portion of the Company's Keokuk Plant is located.
A substantini portion of the Company's property and plant is subject to the direct first lien of an Indenture of Mortgage and Deed of Trust dated June 15, 1937, as amended and supplemented. As part of the merger of the Com-pany with its utility subsidiaries, the Company assumed the mortgage indenture of each subsidiary. The prior lien of each subsidiary indenture extends to the property and franchises acquired by the Company from such subsidiary.
Each such indenture also contains provisions subjecting to the prior lien thereof after-acquired property of the Company constituting (with certain ex-ceptions) additions, extensions, improvements, repairs, and replacements ap-purtenant to property acquired in the merger, in addition, the Missouri Edi-son Company indenture contains a provision subjecting to the prior lien thereof after-acquired property of the Company situated in the territory served by such former subsidiary prior to the merger.
14
ITEM 3.
LEGAL PROCEEDINGS.
Pending in the United States District Court is a proceeding arising from an amended complaint filed January 28, 1982 by holders of the Company's First Mortgage Bonds, 10-1/2% Series due 2005 (the " Bonds"), alleging securi-ties laws violations. The proceeding arose from the Company's claim that it has the right to effect a special redemption of the Bonds out of monies depo-sited in the Maintenance Fund and Improvement Fund. Defendants are the Com-pany, the Trustee under the Indenture pursuant to which the Bonds were issued, and several managers of the underwriting group which purchased and marketed the Bonds. The case is scheduled for trial in the Fall of 1984. A settlement has been reached in principle between the bondholders and the defendant under-writers which is subject to approval by the court.
The Missouri Court of Appeals, in a collateral case, had found that the " bond contract" permits such a special redemption and remanded the proceeding to the Circuit Court of St. Louis County, where a determination is to be made whether the Company adequately disclosed such right. The bondhol-ders seek $22,225,000 in actual damages and $35,000,000 in punitive damages, plus attorneys' fees and costs, for alleged violations of the securities laws and common-law fraud and deceit and $9,100,000 for an alleged breach of warranty.
On December 29, 1983, certain intervening parties before the Mis-souri Commission filed a motion seeking a rehearing of the Commission's order approving the mergers of the Company and its utility subsidiaries, stating that the mergers were detrimental to the public. The Missouri Commission denied the motion as being untimely filed and the intervening parties have ap-pealed to the Circuit Court of Cole County. Missouri law provides that no ap-peals shall be taken to any court unless a timely motion for rehearing was filed with the Missouri Commission. The Company ic of the opinion that the appeal should be dismissed by the court.
A motion for rehearing filed by intervenors in the merger proceeding before the FERC was denied on February 16, 1984. The intervenors have sixty days within which to appeal to the United States Court of Appeals.
The Com-pany is unable to predict whether the intervenors will seek judicial review.
An initiative petition presently is being circulated in Missouri which proposes a law to prohibit the operation of nuclear power plants in that state.
If the required signatures are obtained by mid-1934, the proposal is expected to be submitted to a vote at the general election in November 1984.
See " Rates," " Regulation," and " Environmental Matters" for discus-sions of additional legal proceedings.
15
7 INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) 0F REGULATION S-K:
Date First i
Elected or Appointed to Age At Present Name 12/31/83 Present Position Position t
Charles J. Dougherty 64 Chairman of the Board 4/22/80 Director and 1/14/66 Chief Executive Officer 4/23/68 William E. Cornelius 52 President 4/22/80 and Director 11/8/68 Earl K. Dille 56 Executive Vice President 1/1/71 i
j and Director 4/25/72 I
Stewart W. Smith, Jr.
51 Executive Vice President 4/22/80 and Director 4/22/75 1
H. Clyde Allen 55 Vice President 4/22/75
(
David C. Harrison 56 Vice President 12/9/83 G. J. Haven 56 Vice President 11/18/69 I
Francis R. Lengefeld 55 Vice President 9/1/83 j
Charles W. Mueller 45 Vice President 7/1/83 l
Robert O. Piening 46 Vice President 8/1/81 William A. Sanford 50 Vice President 10/6/78 Donald F. Schnell 51 Vice President 10/1/81 Charles J. Schukai 49 Vice President 4/26/83 4
Edgar J. Telthorst 56 Vice President 4/22/80 H. E. Wuertenbaccher, Jr.
57 Vice President 11/13/64 Donald E. Brandt 29 Controller 7/1/83 William E. Jaudes 46 General Counsel 4/22/80 i
James C. Thompson 44 Secretary 12/1/82 L. A. Esswein 47 Treasurer 7/1/83 J
All officers are elected or appointed annually by the Board of Directors following the election of such Board at the annual meeting of stock-holders held in April. There are no family relationships between the forego-ing officers of the Company.
16
Except for Donald E. Brandt, Controller, each of the above-named executive officers has been employed by the Company or its subsidiaries for more than five years in executive or management positions. Officers elected or appointed to their present position within the past five years held previous positions as follows:
I Name Previous Position Term Charles J. Dougherty President 1966-1980 William E. Cornelius Executive Vice President 1968-1980 Stewart W. Smith, Jr.
Vice President and 1969-1980 General Counsel 1966-1980 David C. Harrison President, Missouri Power &
1979-1983 i
Light Company and Missouri Edison Company (former subsidiaries)
Francis R. Lengefeld President, Missouri Utilities 1977-1983 Company (former subsidiary)
Charles W. Mueller Treasurer 1978-1983 j
i Robert O. Piening Director, Employee Relations 1978-1981 Donald F. Schnell Manager, Nuclear Engineering 1975-1980 General Manager, Nuclear Operations 1980-1981 Charles J. Schukai Manager, Transmission & Distribution 1977-1980 Director, Regional Operations 1981-1983 Edgar J. Telthorst General Manager, Power Plants 1978-1979 Director - Power Operations 1979-1980 Donald E. Brandt Certified Public Accountant, 1975-1983 Price Waterhouse William E. Jaudes General Attorney 1973-1980 James C. Thompson Assistant Secretary 1978-1982 L. A. Esswein Director, Corporate Planning 1977-1983 l
k i
t 17
PART II ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Union Electric Company (1) 1983 Price Range 1983 1982 Price Range 1982 High Low Dividends (2)
Quarter Ended:
High Low Dividends
$15%
813%
414
........ March 31........
$11%
$10%
38C 16%
13%
41
........ J une 30.
124 10%
38 15%
13%
41
........ September 30.....
13%
11%
41 15%
12%
43
. December 31.....
14%
12%
41 (1) At December 31,1983. Union Electnc Company common stock shareholders totaled 192.833 (New York Stock Exchange symbol-UEP)
(2) At December 31,1983, retained earnings amounted to $445,011,000; under the Company's amended mortgage indentures $57,115.000 of total retained earnings was restncted against payment of Common dividends-6xcept those payable in common stock Fifty-five percent of the dividends paid on the Company's Common Stock in 1983 arc considered a return of capital under the Internal Revenue Code and therefore are not taxable as dividend income. The Company expects that a greater percentage of dividends paid on its Common Stock in 1984 will be non-taxable as dividend income.
i I
I l
l 1
18
ITEM 6.
SELECTED FINANCIAL DATA.
(Thousands of Dollars Except Share and Per Share Amounts and Ratios)
Unica Electric and Subsidiaries 1983 1982 1981 1980 1979 RESULTS OF OPERATIONS Oparating Revenues-
$1,401,086 $1,217,705 $1,105,536 $1,077,876
$946,797
' Operating Expenses 1,160,816 1,013,054 922,647 886,720 780,331 Oparsting Income 240,270 204,651 182,889 191,156 166,466 A11cwance for Funds Used During Construction 251,307 198,093 155,625 92,055 58,093 Oth r Income-Miscellaneous.
3,490 3,660 (734) 3,638 879 Intarest on Debt and Other Items 218,912 200,938 180,697 132,112 107,383 Nst Income' 276,155 205,466 157,083 154,737 118,055 Prafarred Dividend Requirements of Company 45,736 39,960 29,478 29,695 26,948 Enraings on Common Stock 230,419 165,506 127,605 125,042 91,107 Avsrage Common Shares Outstanding 86,744,282 76,251,024 6),179,275 59,675,995 52,577,432 ASSETS, OBLIGATIONS AND EQUITY CAPITAL (Year-End)
Totel Assets
$5,205,556 $4,630,797 $4,047,277 $3,552,104 $3,168,998 Leng-Tern Debt Obligations 2,108,047 2,000,405 1,719,927 1,479,229 1,307,990 R:daceable Preferred Stock Obligations 180,962 182,988 110,014 112,040 114,066
.Nrn-redeemable Preferred Stock 356,355 281,355 281,355 281,355 281,355 Common Stock Equity 1,555,416 1,328,061 1,162,777 1,043,549 930,375 FINANCIAL INDICES Estnings per Share of Common Stock (Bnsed on Average Shares Outstanding)
$2.66
$2.17
$1.90
$2.10
$1.73 Czsh Dividends per Share of Common Stock
$1.66
$1.58
$1.52
$1.48
$1.44 Rsturn on Average Common Stcck Equity 16.49%
13.93%
12.11%
13.11%
10.71%
R tio of. Earnings to Fixed Charges (a) 2.89 2.50 2.29 2.85 2.61 (c) Estnings used in computing the ratio of earnings to fixed charges consist of net income plus fixed charges (interest on debt, preferred dividends of subsidiaries and an appropri-cte caount of rentals charged to operating expenses) and income taxes.
19
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity And Capital Resources Union Electric and Subsidiaries Construction expenditures are expected to aggregate The Company plans to continue to utilize short-term debt
$1.2 billion during the next five years,1984 through 1988.
as interim support between iong-term financing. Average including $567 million in 1984; however, with completion daily short-term borrowings outstanding during 1983 of the $2.85 billion Callaway nuclear plant scheduled were $116 million. At December 31,1983, bank lines of for late 1984 or early 1985, such expenditures are credit and credit commitments from banks aggregated anticipated to be less than $200 million each year, over
$171 million, not including the intermediate-term credit the succeeding four-year period.
agreements mentioned above; and, at such date in addition to the funds required for construction during
$32 million of short-term bank loans were outstanding the 1984-1988 period, $439 million, including $13 million (see Note 7 under Notes to Financial Statements). Union in 1984, will be required to retire maturing long-term debt Electric is authorized by the Federal Energy Regulatory and for sinking fund payments on first mortgage bonds Commission to incur up to $300 million of short-term and preferred stock.
unsecured indebtedness; however, short-term debt is not A nuclear fuellease provides for the financing of up to expected to exceed $200 million.
$200 million of the Company's nuclear fuel requirements.
For data relative to Supplementary Information on At December 31,1983, $188 million of nuclear fuel had Inflation and Changing Prices, see pages 22 and 23.
been financed under the lease. The Company plans to increase the total amount of financing permitted under the lease to $300 million in 1984.
Union Electric has entered into intermediate-term credit agreements with certain domestic and foreign banks which permit the Company to borrow up to $575 million through November 1988. At December 31,1983,
$215 million of such borrowings were outstanding.
The Company presently anticipates that substantially all of its 1984 cash requirements will be obtained from i
environmentalimprovement debt, the Dividend Reinvestment and Stock Purchase Plan and the nuclear fuel lease. However, internal generation of cash is expected to improve significantly when the Callaway nuclear plant is completed and reflected in electric rates.
Therefore, the Company presently anticipates that no additional pu blic financing will be required for construction during the four-year period 1985 through 1988.
l k
7htal
- I Constmetion -**
l lYognun I
on e..
- - - till n so es e2 uuwwww 29
- u. es..n., c n, mai cow.uoa
Results Of Operations Union Electric and Subsidiaries Earnings and earnings per share fluctuated due to Operating Expenses many conditions, certain of which applied to this industry The changes in operating expenses were as follows in general and this company in particular: the effect of weather variations, the timing and amounts of rate u hased Power Vanation f rom Pnor Year increases and increasing operating costs. Also, the quality 1983 1982 1981 of such eamings has been adversely affected by the sub.
stitution of allowance for funds used dunng con-Fuel (Millions of Dollars) struction (a noncash item) for the cash recovery of the Vanation in generation.
.S10.7
$ (14) $(17.6) cost of funds invested in facilities under construction.
Pnce increases.
29.4 14 0 31 6 Efficiencies
(.4)
(4.2) 8 The $2.66 per share 1983 common stock earnings Purchased and interchange reflected a substantia' improvement over 1982.
p wen 25.2 73 77 This 49 cents per share gain resulted primarily from S64.9
$ 15 7
$ 22.5 increased sales and higher electric rates, partially offset by greater operating costs.
Other Operating Expenses The impact of the more significant items affecting The costs of other operations, maintenance and revenues, costs and earnings during the past several years depreciation increased principally due to recurring is analyzed and discussed below.
conditions, such as growth, inflation, greater property Elsctric Operating Ilevenues investments and wage increases. Income taxes fluctuated Vanation from Pnor Year in response to pretax income (see Note 2 under the Notes to Financial Statements). Other taxes increased 1983 1982 1981 genwah he b amonal kense and handse taws (Millions of Dollars) cn greater revenues and higher payroll taxes due to Rate increases
.S 57.7 5 86.1
$ 38 0 increases in taxable wage bases and rates (see Note 12 Effect of weather 55.3 (3.2)
(45 6) under Notes to Financial Statements).
Growth and other.
56.3 9.3 30 4
$169.3 $ 92.2
$ 22.6 Interest and Preferred Dividends The increases in interest on debt and preferred divi-The extremely hot 1983 summer and the cooler-than-dends were pnmanly due to the issuance of additional normal preceding summer caused 1983 electric revenues secunties to finance the construction program.
to increase by more than $50 million over the prior year.
Allowanco For Funds Used During Construction (AFC)
The impact of an unusually hot 1980 summer combined with the effect of a mild 1981 summer caused a negative AFC increased due to a greater amount of construction
$46 million 1981 revenue variation from the prior year.
work in progress and to increased AFC rates (see Note 1 Kilowatt-hour sales during 1983 were up 75 percent under Nctes to Financial Statements). The amount of AFC over 1982, with residential sales showing a dramatic 14 willincrease significantly again in 1984 and constitute a percent increase reflecting the recent extremely hot substant:al portion of 1984 earnings. After the Callaway summer, while commercial sales of electricity gained 4 nuclear plant begins commercial operation and is percent over the pnor year. Sales to industrial electric reflected in electnc rates. AFC will decline substantially.
customers rose 5 percent above 1982-the greatest The Callaway Plant is presently scheduled for completion increase since 1977, confirming the economic recovery in late 1984 or early 1985.
in the Company's s ?rvice terntory.
Electric rate increases were granted by the Missouri Public Service Commission in mid-1983 (approximately
$30 million annually), mid-1982 (approximately $65 million annually) and mid-1981 (approximately $65 million annually).
In February 1984, the Company filed rate increase requests with the Missouri and lilinois regulatory commis-sions in anticipation of the commercial operation of the Callaway nuclear plant. The requests include a proposed rate pliose-in plan that would spread the rate increase over a five-year period. Decisions are required from each commission by January 1985.
Under the proposed rate phase-in plan, electric rates would increase by approximately 25 percent the first year
($246 million and $33 million for Missouri and Illinois customers, respectively) and by approximately 8 percent in each of the following four years The rate phase-in plan will result in lower cash receipts in the early years, althoug h 21 there will be no effect on reported earnings.
i Samplertnetutary hufortunatiorn Orn Iruflatioun Arnd Charigiung Prices tunaua,,ea>
Union Electric and Subsidiaries Estimates of the effects of inflation and changing applying to the adjusted amounts for each functional prices on the operations of the Company for the year class of plant, the same percentage relationship ending December 31,1983, are presented in that existed between gross plant 6nd the associated accordance with the requirements of Financial accumulated provision for depreciation on an Accounting Standards Board (FASB) Statement historical basis.
No. 33," Financial Reporting and Changing Prices."
Depreciation Expense Statement No. 33 requires that historical costs be Depreciation expense for the year 1983 applicable adjusted to reflect the effects that general inflation to constant dollar and current cost property was (constant dollar) and changes in specific prices
$225,331,000 and $252,662,000, respectively. The (current cost) have had on the Company's operations.
actual 1983 depreciation expense was $92,297,000.
The adjusted data is not intended as a substitute for The adjusted amounts were determined by applying eamings reported on an historical cost basis, but rather to the indexed property and plant values the same to give some perspective as to the approximate effects straight-line book rates used for historical purposes.
of changes in the purchasing power of the dollar.
Property, Plant and Equipment Reduction of Property, Plant and The estimated value in average 1983 dollars of Equipment to Net Recoverable Cost property, plant and equipment, including construction The regulatory process limits the Company to the work in progress, was determined by applying the recovery of the historical cost of property and plant Consumer Price Index for All Urban Consumers to the through depreciation. Therefore, any excess of property historical cost of plant. The current cost estimates were and plant in constant dollars or current cost must be reduced to the net recoverable cost, which is historical primanly measured by applying the Handy-Whitman "Index of Public Utility Construction Cost" to each major cost. While the rate-making process does not reflect class of plant. Current cost approximates the cost of the current cost of replacing utility plant, past practice currently replacing existing plant. The adjusted plant indicates the Company will be allowed to earn on and to recover the increased cost of its net investment after data under either the constant dollar or current cost methods does not indicate the Company's future capital these facilities are replaced. The excess of constant dollar and current cost over historical cost property requirements because actual replacement of existing Plant will occur over many years and will not identically and plant in 1983 was $33,864,000 and $73,488,000, replace existing plant.
respectively.
At December 31,1983, the constant dollar and Gain from Decline in Purchasing Power of current cost of property, plant and equipment, net of Net Amounts Owed accumulated depreciation were $8,736,781,000 and The Company, by having assets such as receivables, 59,705,695,000, respectively, while historical or net fuel and materials inventory and deferred charges, recoverable cost was $4,795,789,000. The current suffers a loss of purchasing power dunng periods of cost and constant dollar values differ because specific inflation because after conversion, the cash received prices of plant have increased at a rate different from for these items will purchase less. More than offsetting that of generalinflation.
these assets, however, are significant amounts of Accumulated Depreciation long term debt, refundable preferred stock, deferred income taxes and current liabilities which will be repaid The accumulated provision for depreciation for both with dollars of reduced purchasing power Thus, for constant dollar and current cost was determined by 1983, the Company experienced a net " gain" of
$96,256,000 from having an excess of monetary liabilities over monetary assets. (Investments and unamortized investment tax credits were considered as nonmonetary items; nonrefundable preferred stock was included in shareholders' equity).
General Pursuant to Statement No. 33, depreciation expense was the only income statement item that was adjusted.
For rate-making purposes, the amount of depreciation expense included in the Company's allowed revenues is based on histoncal or original cost.
The Company's inability to reflect currently the effects of inflation and changing prices resulted in 1983 reported earnings of $230,419,000 or $2.66 per share rather than the more realistic earnings of $97,385,000 or $1.12 per share on a constant dollar basis, or 22
$70,054,000 or 81C per share on a current cost basis.
Also, because Federal income tax policy prohibits Consolidated Statement of income the deductioit of inflation-adjusted depreciation Adjusted for Changing Prices expense for income taxes, the Company's 1983 Year Ended December 31,1983 effective income tax rate was about 48 percent for (in Means of Average collars) constant dollar and 53 percent under current cost, each
['t tre,nt o,
of which is greater than the Federal statutory rate of 46 percent. Failure of regulatory and taxing authonties Common stock eamings *
$230
$230
- P to allow depreciation of the current cost of plant severely Comm " $
k r s adI sted limits the amount of funds that are generated internally 9 udin educt n to et for use in replacing or modernizing aging and obsolete recoverable cost) 97 "
70 assets.
Loss from reducing plant to Rates authorized by regulatory agencies must be net recoverable cost...
(33)
(73) sufficient to permit the replacing of plant and equipment Relative pnce changes "*.
67 when necessary as well as preserve the purchasing Gain from decline in purchasing power of common equity capital. To have retained the a wer of net amounts owed.
96 96 same purchasing power as they had in 1979, the t4et change in common equity
$160
$160 Company's common shareholders should have received
- As reported 1983 common dividends of $1.98 per share as comp'ared
" Common stock earnings on a constant dollar basis would have been with the actual $1.66 and the realized return on common 564 meon it it reflected the reduction to net recoverable cost of equity should have been sufficient to permit the common
...fu TIr t cost represents the excess of specitIC price changes stock to sell at about $16 per share or almost 25 percent (5412 million)in 1983 over the increase for such year in general pnces higher than the actual year-end price.
of property and piant(5345 milhon)
Five Year Comparison of Selected Supplementary Financial Data Years Ended December 31, Adjusted for Effects of Changing Prices 1983 1982 1981 1980 1979 (in Millions of Average 1983 Do'lars Except Per Share and As Reported ' Amounts)
Operating revenues:
As reported.
$ 1.401
$ 1,218
$ 1.106
$ 1.078
$ 947 Adjusted for generalinflation....
1,401 1.257 1.211 1.303 1,300 Earnings (loss) on common stock
(:xcluding reduction to net recoverable cost):
As reported.
$230
$166
$128
$125
$91 Adjusted for generalinflation.
97 44 16 37 20 Based on current cost..
70 16 (10) 8 (18)
Earnings (loss) per share of common stock
(:xcluding reduction to not recoverable cost):
As reported.
$2.66
$2.17
$ 1.90
$2.10
$ 1.73 Ad;usted for generalinflation.
1.12
.58
.24
.62 38 Based on current cost.
Shareholders' equity (net assets), at year-end:...
.81
.21
(.15)
.13
(.34)
Histoncal cost (as reported).
$ 1,912
$ 1.609
$ 1.444
$ 1,325
$1.212 Adjusted for both generalinflation and current cost..
1.880 1,642 1.531 1.530 1.573 Excess (deficiency) of general price changes over increase in the specific level of prices.
$(67)
$(34)
$(15)
$138
$226 Gain from decline in purchasing power of not amounts owed.
$96
$86
$178
$235
$252 Cash dividends declared per common share:
Actual...
$ 1.66
$1.58
$1.52
$ 1.48
$ 1.44 Adjusted for generalinflation.
Market price per share, at year end:.
I 66 1.63 1 67 1 79 1.98 Actual.
$12%
$13%
$105
$107,
$12 Adjusted for generalinflation.
12%
14 11b 124 15%
herege consumer price index.
298 4 2891 272 4 246 8 217 4 23
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Selected Qamrterly InformatiorI (Tnousands of ooiiars Exceciper snare Amounts)
' i Union Electric and Subsidiaries Earnings Earnings Per on Share of Operating Operating Net Comrron Stock Quarter Ended Revenues income income Stock Outstanding M.:rch 31,1983.
S305,859 641,643 S 53,327 S43,059 S.51 March 31,1982.
292,033 33,851 32,233 23,211
.31 June 30,1983.
309,658 55,781 61,706 51,215
.60 June 30,1982.
274,533 45,371 44,035 33,713
.45 September 30,1983.
466,619 99,860 111,314 98,812 1.14 September 30,1982.
373,706 86,860 87,723 77,402 1.01 December 31,1983.
318,950 42,986 49,808 57,333
.41 D cember 31,1982.
277,433 38,569 41,475 31,180
.40 a
-, f a.
I r
24
\\
M.
me c=aae =
rice ST LOUS.uSSoORl63tOI
--y fateraouse e-February 13, 1984 To the Stockholders and Board of
, Directors of Union Electric Company i
In cui opinion, the consolidated financial statements listed in the accompanying index present fairly the finan-cial position of Union Electric Company and its subsidiaries at December 31, 1983 and 1982, and the results of their operations and the changes in their financial position for each of the three years in the period ended December 31, 1983, in conformity with generally accepted accounting principles consistently applied.
Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
O P-I PRICE WATERHOUSE i
25 j
INDEX TO FINANCIAL STATEMENTS Consolidated Financial Statements:
Page No.
Consolidated Statement of Income - Years 1983, 1982 and 1981 27 Consolidated Balance Sheet - December 31, 1983 and 1982 28 Preferred Stock - December 31, 1983 and 1982 30 Long-Term Debt - December 31, 1983 and 1982 32 Consolidated Statement of Retained Earnings - Years 1983, 1982 and 1981 34 Consolidated Statement of Other Paid-in Capital - Years 1983, 1982 and 1981 34 Consolidated Statement of Changes in Financial Position - Years 1983, 1982 and 1981 35 Notes to Financial Statements 36 Schedules The following schedules, for the years ended December 31, 1983, 1982 and 1981, should be read in conjunction with the aforementioned financial statements (schedules not included have been omitted because they are not applicable or the required data is shown in'the aforementioned financial statements).
Property, Plant and Equipment (Schedule V) 40 Accumulated Depreciation, Depletion and Amortization of Property, Plant and Equipment (Schedule VI) 46 Valuation and Qualifying Accounts (Schedule VIII) 49 1
26
Consolidated Staternent OfIncouncahousanesof oaars, Union Electric and Subsidiaries Year P 33 Year 1982 Year 1981 Operating Revenues (*):
Electric.
61,281,154
$ 1,111,855
$ 1,019.671 Gas.
104,899 90,213 72,861 Steam.
12,270 13,224 11,033 Water.
2,763 2.413 1,971 Total operating revenues 1,401,086 1,217,705 1,105.536 Operating Expenses:
Operations Fuel and purchased power.
437,579 372,632 356,887 Other.
259,536 230,751 200,506 697,115 603,383 557.393 Maintenance.
99,395 100,223 87,435 Depreciation.
92,297 86,670 81,310 Income taxes.
140,111 97,967 79,381 Other taxes (*).
131,898 124,811 117.128 Total operating expenses 1,160,816 1,013.054 922,647 Oper ting income 240,270 204,651 182,889 Other Inccme:
Allowance for equity funds used during construction.
135,707 93,858 64,600 Miscellaneous, net.
3,490 3,660 (734)
Total other income 139,197 97,518 63,866 Inc2me Before Interest cnd Other items 379,467 302.169 246,755 Int:r:st and Other items:
Interest on debt.
218,530 200,554 180,312 Allowance for borrowed funds used during construction.
(115,600)
(104,235)
(91,025)
Preferred dividends of subsidiaries 382 384 385 Totalinterest and other items 103,312 96,703 89,672 N:t income 276,155 205,466 157,083 Preferred Dividend Requirements of Company 45,736 39,960 29,478 Earnings on Common Stock S 230,419
$ 165,506
$ 127,605
(*) includes license and franchise taxes of $69.682.000. $61,002.000 and
$54.664.000 for the years 1983,1982 and 1981, respectively Earnings per Share of Common Stock (based on average shares t
outstanding)
S2.66
$2.17
$1.90 Dividends per Share cf Common Stock S1.66
$1.58
$ 1.52 Average Number of Common Shares Outstanding 86,744,282 76,251,024 67.179.275 See Notes to FanancialStatements 27
Consolittuted Balance Sheetcrnousanosot ooijars1 December 31, December 31, Union Electric and Subsidiaries 1983 1982 Assets Property and P! ant, at original cost:
Electric.
S3,231,495
$3,075,484 Gas.
77,326 73,551 Steam.
9,311 9,593 Water.
8,606 8,221 Other.
19,283 19,479 3,346,021 3,186,328 Less accumulated depreciation.
1,062,765 984,656 2,283,256 2,201,672 Construction work in progress:
Callaway nuclear plant.
2,374,392 1,809,397 Nuclear fuel.
188,106 169,553 Settlement of uranium litigation.
(101,963)
(89,407)
Other.
51,998 114,908 Total property and plant, net 4,795,789 4,206,123 Investments, at cost 6,354 5,605 Def;rred Charges:
Callaway unit 2 construction abandonment.
82,394 82,826 Unamortized bond defeasance cost.
4,270 4,470 Unamortized debt expense.
4,542 4,860 Other.
3,124 2,292 Total deferred charges 94,330 94,448 Current Assets:
Cash.
7,216 4,555 Deposits for payment of interest and other deposits.
10,272 32,655 Accounts receivable-trade (less allowance for doubtful accounts of $2,681 and $1,622, at respective dates).
95,579 85,629 Unbilled revenue.
73,876 54,042 Other accounts and notes receivable.
4,927 6,622
)
Materials and supplies, at average cost-j Fue!.
73,889 99,006 Construction and maintenance.
37,947 37,188 Prepayments and other assets.
5,377 4,924 Total current assets 309,083 324,621 T;tal Assets 65,205,556
$4,630,797 See Notes to Financial Statements 28
)
December 31, December 31.
Union Electric and Subsidiarics 1983 1982 Capital Ami Liabilities Capitalization:
Common stock and Common stock, $5 par value, authorized retained earnings 150,000,000 and 100,000,000 shares, at respective dates; outstanding 94,690,220 and 84,413,679 shares, at respective dates (excluding 42,990 shares at par value in treasury).
S 473,451
$ 422,068 Other paid-in capital, principally premium on common stock (see accompanying statement).
637,039 541,222 Retained earnings (see accompanying statement).
445,011 364,771 Total common shareholders' equity 1,555,501 1,328,061 Prsference stock Preference stock, $1 par value (entitled to cumulative dividends), authorized 7,500,000 shares -none outstanding Prcforred stock Preferred stock not subject to mandatory redemption, including premium of $1,486 and $1,571, at respective dates (see accompanying statement).
356,270 281,355 Preferred stock subject to mandatory redemption (see accompanying statement).
180,962 182,988 Long-term debt Long-term debt (see accompanying statement) 2,113,181 2,005,398 Unamortized discount and premium on debt.
(5,134)
(4,993)
Total capitalization 4,200,780 3.792,809 Accumulated Deferred Taxes on income 408,171 328,580 Accumulated Deferred Investment Tax Credits 164.468 122,217 Construction Commitments and Contingencies (Notes 8 and 9)
Current Liabilities:
Current maturity of long-term debt.
10,728 2,223 Accounts payable, 154,953 117,199 Wages payable.
20,608 20,010 Callaway unit 2 cancellation charges.
41,885 45,969 Bank loans.
31,500 42,100 Commercial paper.
25,000 Income taxes accrued.
41,281 27,919 Other taxes accrued.
15,620 14,287 Interest accrued.
63,755 46,621 Dividends declared.
12,512 10,328 Other current liabilities.
39,295 35,535 Total current liabilities 432,137 387,191 Tot:1 Capital and Liabilities S S,205,556
$4.630,797 29
Preferred Stock c1nousanos or ooiiars3 December 31, December 31, Union Electric and Subsidiaries 1983 1982 Pr;f:rred Stock not subject to mandatory redemption:
Union Electric Company Preferred stock, without par Stated value of shares outstanding, value (entitled to
$100 per share-cumulative dividends)-
$7.44 Series-550,000 shares.
S 55,000
$ 55,000 note (a)
$6.40 Series-300,000 shares.
30,000 30,000
$5.50 Series A-14.000 shares-note (b).
1,400
$5.50 SeriesB-3,000 shares-note (b).
300
$4.75 Series-20,000 shares-note (c).
2,000
$4.56 Series-200,000 shares.
20,000 20.000
$4.50 Series-213,595 shares.
21,359 21.359
$4.30 Series-40,000 shares-note (c) -
4,000
$4.00 Series-150,000 shares.
15,000 15,000
$3.70 Series-40,000 shares.
4,000 4,000
$3.50 Series-130.000 shares.
13,000 13,000 Stated value of shares outstanding,
$97.50 per share-
$8.00 Series of 1971 -425,000 shares.
41,437 41,437 Stated value of shares outstanding,
$92.25 per share-
$8.00 Series-350,000 shares.
32,288 32,288 Stated value of shares outstanding,
$25 per share-
$2.98 Series-3,000,000 shares.
75,000
$2.125 Series-1,600,000 shares.
40,000 40,000
~ Missouri Power & Light Company, former subsidiary-Preferred stock, $100 par 4.30% Series-20,000 shares.
2,000 value (cntitled to 3.90% Series-40,000 shares.
4,000 cumulative dividends)
Missouri Utilities Company, l
former subsidiary-l Preferred stock, $100 par value 5% Series-14,000 shares.
1,400 l
(entitled to cumulative 5% Series of June 1950- 1,500 shares.
150 dividends) 5% Series of September 1950 - 1,500 shares.
150 l
Total preferred stock not subject to mandatory redemption S354,784
$279,784 l
l See Notes to Financial Statements 30 r
December 31, December 31 Union Electric and Subsidiaries 1933 1982 Prefstred Stock subject to mandatory redemption:
Union Electric Company Preferred stock, without par Stated value of shares outstanding, value (entitled to
$100 per share-cumulative dividends)-
$6.30 Series-9.620 shares due note (a) to 2020-notes (b) and (d)
S 962 Stated value of shares outstanding,
$50 per share-
$4.60 Series-1,500.000 shares due 1985 to 2004-note (e).
75,000 75,000 Stated value of shares outstanding,
$25 per share-
$4.00 Senes of 1982-3,000,000 shares due 1988 to 2007-note (e).
75,000 75,000
$2.72 Series-1,200,000 and 1.280,000 shares at respective dates, due to 1998 -note (f) 30,000 32.000 Missouri Utdities Company, former subsidiary-Preferred stock, $100 par value 5.70% Series-9.880 shares (entitled to cumulative
-note (d).
988 dividends)
Total preferred stock subject to mandatory redemption S180,962
$182,988 (a) Authonzed Union Electnc Company total preferred stock-15.000.000 shares.
(b) Issued in exchange for Missoun Utilities Company prefened stock upon merger of such company into Union Electnc Company (c) issued in exchange for Missoun Power & Light Company preferred stock upon merger of such Company into Union E!ectnc Company (d) The Company is recuired to retire 260 shares at $100 per share on June 1 of each year.
(e) To be retired by sinking fund-(f) The Company is required to retire 80.000 shares and has an option to redeem an add tonal 80.000 shares. at $25 per share on November 15 of each year 31
IsOlleTer rii 1)cl>tcrnousanes or ooiiars)
December 31, December 31, Union Electric and Subsidiaries 1983 1982 Union Electric Company First mortgage bonds-3%% Series due 1986.
S 40,000 40,000 note (a) 4%% Series due 1988.
35,000 35,000 4%% Series due 1990.
50,000 50,000 4%% Series due 1991.
30,000 30,000 15%% Series due 1991.
150,000 150,000 15% Series due 1992.
125,000 125,000 44% Series due 1993.
30,000 30,000 4S% Series due 1995.
35,000 35,000 SM% Series due 1996.
30,000 30,000 5M% Series due 1997.
40,000 40,000 7% Series dee 1998.
50,000 50,000 7%% Series due 1999.
35,000 35,000 8%% Series due 1999.
40,000 40,000 9.95% Series due 1999-note (b).
100,000 100,000 9% Series due 2000.
60,000 60,000 75% Series due 2001.
50,000 50,000 7%% Series due 2001.
50,000 50,000 84% Series due 2001.
60,000 60,000 8%% Series due 2004.
70,000 70,000 70,000 70,000 10h% Series due 2005.
5.80% Series due 1992 to 2005-note (c).
27,085 27,085 85% Series due 2006.
70,000 70,000 8%% Series due 2007.
60,000 60,000 9.35% Series due 2008-note (b).
55,000 55,000 9.25-9.625% Series due 2000 to 2010-note (c).
60,000 60,000 13% Series due 2013.
100,000 Former Missouri Power & Light Company-Series ranging from 3%% to 10%%
7,500 D"
1984.
53,100 54,120 Due 1992 to 2004-note (b).
Former Missouri Utilities Company-Series ranging from 44% to 9%%
Due 1984 and 1988.
3,000 4,000 Due 1991 to 2001 -note (b).
22,600 22,900 Former Missouri Edison Company-Series ranging from 4%% to 16%
Due 1986 to 1987.
9,500 9,500 Due 1990 to 2002-note (b).
16,556 17.330 See Notes to Financial Statements 32
December 31, December 31, Union Electric and Subsidiaries 1983 1982 Union Electric Company (continued):
Unsecured loans-Foreign bank agreement Due 1984 (repaid in 1983).
S 40,000 Domestic credit agreement-note (d)
Due 1987 to 1988.
215,000 175,000 Unsecured notes-Former Missouri Utilities Company-6% Series due 1992-note (e).
1,925 2,030 Former Missouri Edison Company-21 % Series due 1985-note (f).
7 32 Missouri environmental improvement-Revenue notes 7%% Series due 1985.
20,000 20.000 10% Series due 1986.
45,000 45,000 Revenue bonds 5.60-6.20% Series due 1989 to 2004.
16,500 16,500 Nuclear fuellease 187,772 169.260 Union Colliery Company Secured note-note (f) 9% Due 1999.
136 141 Long-term debt S2,113,181
$2,005,398 (a) At December 31.1983 substantially all of the property and plant was mortgaged une'er, and subject to tiens of. the respect;ve indentures pursuant to which the bonds were issued (b)To be retired by sinking tund-9 95% Senes from 1986 to 1998 and 9 35% Senes frorn 1989 to 2007. and. certain former subsidiary comoanies bonds to 2003 (c) Environmental imorovement Senes.
(d)ln 1982. Union Electnc Company entered into a six-year cred;t agreement with certain domestic bar;ks which perm ts the Company to borrow up to
$375 milhon. on which interest rates weil vary depending on the Company s seldction of vanous options under the agreement At December 31.1933.
$215 mdhon of such domestic borrowings were outstanding at an average annualinterest rate of to 48%, based on 60-day Cert ficate of Deposit rates (e) Notes due in equal annual insta!!ments to 1991.
(f) Note due in equal monthly installments (g)ln 1982. Union E'cctnc Company entered into a six-year credit agreement with certain foreign banks which permits the Company to borrow up to $200 mdhon. on which interest rates will vary depending on the Company s selection of vanous oDtions under the agreement At December 31,1983, none of such foreign borrowings were outstanding 33
Consoliciatect Statennent Of Retainect Earningsanousanas of oo,,ars, Union Electric and Subsidiaries Year 1983 Year 1982 Year 1981 BalInce at Beginning of Period.
S364,771
$324,547
$298,902 Add:
Net income.
276,155 205,466 157,083 640,926 530.013 455,985 Deduct:
Preferred stock dividends
- 46,891 41.433 29,451 Common stock cash dividends-$1.66.
$1.58 and $1.52 per share, respectively.
145,748 120,203 101,735 Wnte-off of capital stock expense.
3,276 3,606 252 195,915 165.242 131,438 Bal;.nce at Close of Period (Under the mortgage indentures of the Company as amended, free and unrestricted retained earnings at December 31,1983 amounted to
$387,896)
S445,011
$364,771
$324,547
- Inc!udes d:vidends declared appbcable to subsequent penods s
Consoliciatect Statenuent Of Other Paici-In Capital <1nousandsos oo,ars1 Union Electric and Subsidiaries Year 1983 Year 1982 Year 1981 Eti;nce at Beginning of Period.
S541,222
$464,450
$414,020 Add:
Excess of sales price over par value of 6,000,000,6,500,000 and 6,500,000 shares of common stock issued in 1983,1982 and 1981, respectively.
56,550 53,137 38,058 Excess of sales price over par value of 3,898,752,3,157,794 and 1,780,268 shares of common stock issued during 1983,1982 and 1981, respectively, for dividend reinvestment and stock purchase plan.
35,301 23,313 10,244 Excess of sales price over par value of 377,789 and 350,300 shares of common stock issued for tax reduction act stock ownership plan in 1983 and 1981, respectively.
3,780 1,811 Excess of stated value over purchase price of 80,000 shares of preferred stock redeemed in each of the years 1983,1982 and 1981.
101 322 317 Premium on preferred stock of former subsidiary company.
85 Balance at Close of Period S637,039
$541,222
$464.450 See Notes to Financrat Statements 34
Consolidated Suttement of Chang.!es In Finunelal Position cinousanos or ooiiars)
Union Electric and Subsidiarias Year 1983 Year 1982 Year 1981 Source of Funds:
Fram operations-Net income.
S276,155
$205.466
$157,083 Prc.wision for depreciation.
92,297 86.670 81,310 Pro tision for deferred taxes on income (net).
79,591 90,427 71,986 Provision for deferred investment tax credits (net).
42,251 (3.073) 11,816 Allowance for all funds used during construction.
(251,307)
(198.093)
(155,625) 238,987 181,397 166,570 From financing and other sources-Issue of mortgage bonds.
100,000 130,500 154,000 Issue of long-term unsecured debt.
40,000 295,032 90,000 Nuclear fuel lease.
18,512 37,833 32,392 lssue of preferred stock.
75,000 75,000 Issue of common stock.
86,550 85,638 70,558 Dividend reinvestment and stock purchase plans.
60,463 39,102 22,708 Settlement of uranium litigatien.
12,556 12,879 13,904 Net decrease in working capital (excluding short-term loans and current maturity of long-term debt).
87,579 42,704 67,722 480,660 718,688 451,284 Total funds provided S719,647
$900,085
$617,854 Application of Funds:
Gross plant expenditures.
S686,029
$628,343
$532,650 Nuclear fuel.
18,553 38,062 32,406 Allowance for all funds used during construction.
(251,307)
(198,093)
(155,625)
Union Electric dividends on preferred stock and common stock.
192,639 161,636 131,186 Restructured long-term unsecured debt.
40,000 175,000 Maturity of mortgage bonds.
2,223 36,899 894 Redemption of preferred stock.
2,026 2,026 2,026 Reduced short-tarm bank loans and commercial paper.
35,600 53,250 20,535 Callaway unit 2 cancellation charges-deferred.
(537) 52,000 Net change in other funds.
(6,116) 3,499 1,782 Total funds applied S719,647
$900,085
$617,854 increases (Decreases) in Working Capital:
Cash and deposits.
S(19,722)
$ (7,690)
$ (8,916)
Receivables, net.
28,089 10,797 9,421 Fuel.
(25,117) 16,696 (27,598)
Other materials and supplies.
759 (852) 2,554 Accounts and wages payable.
(38,352)
(45,642) 6,657 Cancellation charges.
4,084 6,031 (52,000)
Taxes accrued.
(14,695)
(10,235) 12,794 Interest and dividends accrued or declared.
(19,318)
(5,905)
(10,843)
Other.
(3,307)
(5,904) 209 Net decrease in working capital S (87,579)
$ (42,704)
$ (67,722)
See h!otes to Financial Statements 35
Notes To Financial Statementa Union Electric and Subsidiaries Note 1-Summary of Accounting Policies costs in the same manner as construction charges for The Company is subject to regulation by the Missouri labor and materials. Under accepted rate-making practice, Public Service Commission, Illinois Commerce cash recovery of AFC, as well as other construction costs, Commission, Iowa State Commerce Commission and occurs when completed projects are placed in service the Federal Energy Regulatory Commission. The and reflected in customer rates.
accounting policies of the Company are in accordance AFC rates are established by the Company consistent with the rate-making practices of the regulatory authorities with the methodology prescribed by the Federal Energy having jurisdiction and, as such, conform to generally Regulatory Commission. Average annual AFC rates were accepted accounting principles as applied to regulated 11.7% in 1983,11.6% in 1982 and 11.4% in 1981. AFC, public utilities. A description of the Company's significant net of taxes, amounted to 86%,90% and 87% of earnings accounting policies follows.
on common stock for 1983,1982 and 1981, respectively.
Principles of Consolidation Unbilled Revenue The consolidated financial statements include the The Company records on its books the estimated accounts of the Company and its wholly-owned sub-amount of accrued, but unbilled, revenue and also the sidiaries. In the process of consolidation, allintercompany accrued liability for the related taxes.
investments and accounts and allintercompany sales and profits are eliminated. In December 1983, Union Electric's Note 2-income Taxes utility subsidiaries, Missouri Power & Light Company, Totalincome tax expense for 1983 resulted in an effective Missouri Utilities Company and Missouri Edison Company, tax rate of 34% on earnings before income taxes (32% in were merged into the Company. The mergers had no 1982 and 33% in 1981). The principal reason such amount effect on the consolidated financial statements.
was less than the 46% s'atutory Federal rate was the allowance for equity funds used during construction, Property and Plant The cost of additions to and betterments of units of which was 16% of earnings before income taxes for 1983 property and plant is capitalized. Cost includes labor, (14% in 1982 and 13% in 1981).
material, applicable taxes, pensions and certain other locome tax expense components for the years shown items, plus an allowance for funds used during are as follows (in thousands):
1983 1982 1981 construction. Maintenance expenditures and renewals of items not considered to be units of property are charged included in operating expenses-to income as incurred. When units of depreciable property Taxes currently payable:
are retired, the original cost and removal cost, less State.
5,765 2.670 ' (841)
~
salvage, are charged to accumulated depreciation.
Deferred taxes Depreciation (principally Federal):
M For financial statement purposes, depreciation is dep eci tion 21,279 17,500 14.177 provided over the estimated lives of the various classes Allowance for borrowed '
of depreciable property by applying composite rates on funds used dunng a straight-line basis. The provision for depreciation in construction.
52,451 49,455 44,107 1983 is equivalent to approximately 2.9% of the average Construction depreciable cost (2.8% in 1982 and 1981).
abandonment 21.500 14.000 Other (pnncipally income Taxes capitalized costs).
9,589 7,288 6.553 Deferred income taxes are provided for timing Provisions deferred differences between book and taxable income as permitted in prior years.
(3,728) (5.316) (6,851) for rate-making purposes. Investment tax credits utilized Deferred investment tax are deferred and amortized over the usefullives of the credits. net.
49,054 (3.073) 11,942 properties to which they relate.
140,111 97.967 79,381 Allowance for Funds Used During Construction
[$her nYoNe 1,046 (354) (1,511)
Allowance for funds used during construction (AFC)
Total S141,157 $97,613 $77.870 is a utility industry accounting practice whereby the cost of borrowed funds and the cost of equity funds (preferred and common stockholders' equity) applicable to the investment tax credit carryforwards, unrecorded as of Company's construction program are capitalized as a cost December 31,1983, amounted to approximately $ 90 of construction. This accounting practice is intended to million which may be utilized by the Company to reduce offset the effect on earnings of the cost of financing future income tax liabilities through 1998.
construction activity, and results in treating such financing 36
i Nota 3-Capital Stock Note 4-Preferred Stock Subject to During the three years ended December 31,1983, Mandatory Redemption common stock, $5 par value, was issued as follows:
During the five years from December 31,1983, the 6,000,000 shares,6,500,000 shares and 6,500,000 amounts of pteferred stock to be redeemed at par or stated shares were issued in 1983,1982 and 1981, respectively.
value are: $2,026,000 in 1984, $5,776,000 in 1985; In addition, of the 18,000,000 shares reserved for the
$5,776,000 in 1986; $5,776,000 in 1987; and $9,526,000 Union Electric Company Dividend Reinvestment and in 1988.
Stock Purchase Plan,3,898,752 shares,3,157,794 shares and 1,780,268 shares were issued in 1983,1982 Note 5-Debt Retirement Provisions and 1981, respectively; and of the 2,500,000 shares Dunng the five years from December 31,1983, the reserved for the Union Electric Company Tax Reduction amounts of debt matunties are: $10,728,000 in 1984; Act Stock Ownership Plan,377,789 shares and 350,300
$22,711,000 in 1985: $98,844,000 in 1986; $87,012.000 shares were issued in 1983 and 1981, respectively.
in 1987; and $191,178,000 in 1988. (Amounts do not Dunng the same three-year period, preferred stock, include nuclear f uel lease payments since the timing and without par value, was issued and redeemed as follows:
the amounts of such payments are not currently 3,000,000 shares, $2.98 Senes were issued in 1983 and determinable-see Note 10L 3,000,000 shares, $4.00 Series in 1982. In December Debt retirement provisions contained in the mortgage 1983, the Company issued 20.000 shares,54.75 Series bond indentures of the Company require, subject to and 40,000 shares, $4.30 Series in exchange for Missouri certain alternatives, the redemption annually of 1% of the Power & Light Company preferred stock; and at the same principal amount (as defined) of each senes of bonds.
time, issued 14,000 shares, $5.50 Series A,3.000 shares, In lieu of such redemptions the Company has been
$5.50 Series B and 9,620 shares, $6.30 Series in following the practice of pledging property additions as exchange for Missouri Utilities Company preferred stock.
permitted by the indentures.
In each of the years 1983,1982 and 1981, the Company redeemed 80,000 shares, $2.72 Senes; and Missouri Note 6-Employee Retirement Plans Utilities Company redeemed 260 shares,5.70% Series The retirement plans covering employees of the preferred stock.
Company are financed through irrevocable pension Prefstred Stock Eventual trusts and group annuity contracts. The Company's policy Redemption Prices Current Minimum is to fund pension costs accrued. Costs of the retirement (Per Share) plans for the years 1983,1982 and 1931 were
$15,710,000, $14,279,000 and $12.515,000, 5
5 fe construction accounts. The aforementioned amounts respectively, of which approximately 24% was charged to
$5.50 Senes A.
110.00 110 00
$5.50 Series B.
103.50 103 50 include current service costs and prior service costs
$4.75 Senes 102.176 102.176 which are being amortized over twenty years.
$4.56 Senes.
102.47 102.47 A comparison of estimated actuarial present value of
$4.50 Series.
110 00 110 00(a) accumulated plan benefits and plan net assets follows
$4J0 Senes.
105.00 105.00 (in i;ionsy.
$4 00 Senes.
105 625 105 625 At December 31'
$3.70 Senes.
104.75 104.75
$3.50 Senes....
110 00 110 00 1983 1982 1981
$8 00 Senes of 1971.
101 50 98 50 Vested.
S249
$197
$246
$8 00 Senes.
99 25 93 25 Nonvested.
26 18 4
$2.98 Senes.
27.98 25 00
$2.125 Senes...
26 45(b) 25 25 S275
$215
$250 e$
Net assets avadable for benef,ts
$275
$239
$179 es W
$4.00 Senes of 1982 (e).
29 00(b) 25 00 The welghted average assumed rate of return used in
$2.72 Senes(f).
27.75(b) 25 25 determining the actuarial present value of accumulated plan benefits was 7% for 1983 and 1982, and 6% for 1981.
(alin the event of voluntary hauidat.or'. $105 50 (b) Redemption subiect to certatn restnctions regarding refund;ng operations (c) The Company is required to redeem 260 shares at $100 per share.
plus accrued dividends. on June 1 of each year (d)It'e Company is required to redeem 75.000 shares at $ 50 per share on August 15 of each year. cammencing in 1985.
(e) The Company is required to ttae 150 000 shares. and has an option to redeem an add:tional 150 000 shares. at $25 per share on February 15 of each year. commencing in 1988
[f) The Company is recuired to retire 80.00u shares and has a'- option to redeem an additional 80.000 shares at $25 per share on November 15 of eacn year
r Notes To Financial Statements w,um Union Electric and Subsidiaries Note 7-Short-Term Borrowings Note 8-Construction Commitments Short-term borrowings of the Company consist of The Company is engaged in a construction program bank loans (maturities not in excess of 270 days) and under which expenditures of approximately $1.2 billion commercial paper (maturities generally within 30-45 days).
are anticipated during the next five years, of which Information relative to short-term borrowings is as follows expenditures of $567 million and $157 million are esti-(in thousands except rates):
mated to be made in 1984 and 1985, respectively.
1983 1982 1981 Note 9-Contingencies A*
nd ng On October 9,1981, the Company canceled con-t yea en struction of Unit No. 2 at its Callaway nuclear plant which Bank loans..
S 31,500
$42,100
$66.350 unit had been scheduled to be placed in service in 1990.
Commercial paper.
$25.000
$54.000 At December 31,1983, $50 million, representing con-Composite interest struction costs accumulated to that date plus estimated rate at year end-cancellation charges (net of taxes) has been deferred. By Bank loans..
10.8%
11.3%
13.8%
order dated October 21,1983, the Missouri Commission U*
ruled that recovery of such cancellation costs applicable p pe 99%
13.6%
to the Missouri jurisdiction (S37 million)is barred by a Maximum aggregate state statute which prohibits recovery, in rates, of costs amount outstanding at any month end of a facility before it is fully operational and used for dunng the year S154,500 $205,850 $167,275 service. The Company is of the opinion that the statutory Average daily snort-ban does not apply to canceled plants and, furthermore, o$tItand$ng that the Commission's interpretation of the statute is ur ng unconstitutional because it purports to disallow recovery the year-of costs prudently incurred. Consequently, the Company Aggregate amount.
3115,775 $138.847 $136.116 has appealed the Commission's decision. The balance of Weighted com' such costs, applicable to other regulatory jurisdictions, posite interest is either presently being recovered in customers' rates, or rate.
9.7%
13.7%
17.8%
currently under regulatory consideration. In the opinion of management, unrecovered costs,if any, would not be The above weighted composite interest rates were material to the financial position of the Company.
calculated by dividing the applicable interest expense for The Company has property insurance coverage of $500 the year by the average daily short-term borrowings million provided by American Nuclear insurers (ANI) and I ecember 31,1983, the Company had bank lines f
ts lla y nuclear a t' of credit aggregating $171,140,000 ($139,640,000 of Upon loading nuclear fuelin the Callaway plant's which was unused at such date) which make available reactor (Spring 1984), the Company plans to have the interim financing at various rates of interest based on foi ow ng additional insurance coverage, the maximum pnme, the London Interbank Offered Rate (LIBOR), the amounts currently available:
bank certificate of deposit rate, or other options, and in Excess property insurance of $435 million support of which the Company has both wntten and provided by Nuclear Electric Insurance Limited unwntten agreements with its lending banks to pay annual (NEIL), a mutualinsurer established by the utility f:es rang,ng from 0.25% of the unused portion of the industry. Under this policy, the Company could i
line of credit to 0.375% of the line of credit. These lines be subject to a retrospective premium assess-of credit are renewable annually at various dates through-ment of up to $10 million in any one policy year out the year, f NEIL's property losses exceed available funds.
Excess property insurance of $85 million pro-vided by ANI and MAELU.
38
l The Atomic Energy Act, as amended, currently and 1981, the Comoany capitalized relateo interest costs limits liability to third parties to $580 million for of $17.9 million, $19.7 million and $19.8 million based on each nuclear incident. Coverage of the first $160 an average interest rate of 10.0% 13.4% and 17.6%,
million of such liability will be provided by ANI respectively.
and MAELU. The balance will be provided by utility industry retrospective assessments. The Note 11-Settlement of Uranium Litigation Company's maximum potential assessment In 1979, the Company and Westinghouse Electric under this plan would be $5 million per incident Corporation settled the Company's suit to require but not more than $10 million per year.
Westinghouse to fulfill its contractual obligation to deliver Furthermore, once the Callaway nuclear plant is placed 10 million pounds of uranium U308 to the Company. The in commercial operation (late 1984 or early 1985), the settlement provides for cash and discounts on uranium Company plans to have accidental outage replacement and goods and services over the period 1980-2010.
power insurance provided by NEIL. Thereunder, the Company proposals currently under review by regulatory Company will be insured for up to $2.5 million per week authonties provide that settlement proceeds will be utilized for one year, commencing 26 weeks after initiation of to reduce fuel expense.
the outage, and for up to $1.25 million per week for an additional year. Under this policy, the Company could be Note 12-Supplementary income Statement subject to a maximum annual retrospective premium Information assessment of up to $7.6 million-1983 1982 1981 The Company is involved in legal or administrative (Thousands of Dollars) proceedings before various courts and agencies with Maintenance and repairs.
respect to matters ansing in the ordinary course of bus.i-charged directly to.
ness, some of which involve substantial amounts.
Operating expenses S 99,395 $100,223 $87,435 Management is of the opinion that the final disposition of Other accounts (a) 5,888 5.736 4,768 these proceedings will not have a material adverse effect
$105,283 $105,959 $92,203 on the financial position of the Company.
Depreciation, depletion and amortization of fixed and Note 10-Nuclear Fuel Lease intangible assets, charged The Company has entered into a lease agreement directly to-which provides for the financing of the costs of up to Operating expenses.
692,297 $86.670 $81,310
$200 million of the Company's nuclear fuel. Pursuant Other accounts (a).
3,018 2.862 2,435 to the terms of the lease, the Company has assigned to S95,315 $89.532 $83,745 the lessor certain contracts for purchase of nuclear fuel Taxes, other than payroll and The lessor obtains through the issuance of commercial ncome taxes. charged paper backed by letters of credit from commercial banks, directly to:
or from direct loans from commercial banks, the Operating expenses-necessary funds to purchase the fuel and make interest Real estate and payments when due.
personal property.
S 48,426 $ 51.282 $ 51,977 Li The Company is unconditionally obligated to reimburse ranch se 69,682 61,002 54.664 the lessor for all expenditures for nuclear fuel, interest and Other '
1,722 1,491 1,338 related costs. Obligations under this lease will become current at such time as the nuclear fuelis engaged in heat Other accounts.
4 production at the Company,s Callaway nuclear plant.
The Company has capitalized the cost, including S131,233 $123.024 $ 115,886 interest costs, of the leased nuclear fuel and has recorded (a) A substant:a! port on of amounts charged to other accounts is the related lease obligation. During the years 1983,1982 allocated to operating expenses through cleanng accounts (b)The amounts of payroll taxes for the years 1983.1982 and 1981 were 512.068.000. 511.036.000 and 59,149.000. respectively (c) The amounts of royait:es and advertising costs were not matenal 39
9 UNION ELECTRIC COMPANY AND SUS $101 ARIES SOIEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENoED DECEMER 31, 1983 Col. A Col. O Col. C Col. D Col. E Col. F Salance Balance at beginning Additions at end Classification of period at cost Retirements other changes of period (Note)
Utility properties Electric Tangible Plant in service Steam production
$1,281,480,782
$ 70,907,171
$ 1,584,528
$1,350,803,425 Hydraulic production 70,630,232 439,037 27,792 yl,M I,677 Pumped storage production 45,913,463 40,322 263 45,953,520 Internal coeustion production 42,493,208 270,538 (l) 42,763,745 Transmission 435,304,397 28,283,336 549,032 ll.677 456,050,378 Ol stribution 1,048,118,063 60,755,365 7,949,944 (10,066) 1,I00,913,418 General 136,998,934 17,l98,120 4,860,414 (10,301) 149,319,339 Construction work la progress I,924,147,781 502.087,838 2,426,235,619 O
Nuclear fuel I69.553,000 18,553,270 188,106,270 Settlement of uraniwa Iltigation (89,407,477)
(12.555,893)
(1o1,963,370)
Plant held for future use 1,858,906 (38,o55) 27,722 13 203)
I,779,926 Total 5,067,098,257 675,934,o49 14.999,695
)
5,736,003.747 746 316 246,316 Intangible M'.
675,934,049 14,999,695 W) 5,735,250,063 Total Stears heating Tangible Plant in service Production 796,665 56,331 87,918 765,078 oistribution 4,676,184 1,817 56,399 4,621,602 179,856 (4,360) 175,496 General 883 (813)
Construction work in progress Total 5,653,535 52,975 444,317 5,562,17b Gas Tangible Plant in service 2,556,956 Production 2,556,884 72 Transmi ssion 7,339,835 66,294 7,089 7,379,040 olstribution 59,773,727 3,883,386 482,740 (1) 63,174,372 General 3,900,662 417,584 92,148 (10.532) 4,215.563 Construction work in progress 72,296 58,327 130,623 Total 73,623,404 4,425,660 551,977 (50,533) 77,456,554 16.113 16,583 Intangible Total 73,639,537 4.425,660 551,977 (10.533) 77,472,667 (Continued on following page)
UNION ELECTRIC COMPANY AND SUB51DI ARIES SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1983 Col. A Col. 8 Col. C Col. D Col. E Col. F Balance Balance at beginning Additions at end Classification of period at cost Retirements Other changes of period (Note) j Utility properties (Continued) water l
l Tangible Plant in service l
Source of supply 228,685 1
54 228,739 l
Pumping 362,534 18,318 228 380,624
)
Water treatment 2,096,302 148,051 3.120 2,241,233 j
Distribution 5,300,879 240,338 18,390 5,537,827 General 219,762 6,415 119 (12,796) 213,262 l
Construction work in progress 83,804 (60,825) 22,979 i
I 4, 58 0 Plant held for future use 4,579 Total 8,304,545 352,353 14,857 482.795) 8,629,244 h
Common l
Tangible l
Plant in service l
Steam production 16,626,700 4,268 11,872 16,619,036 Construction work in progress Total 16,626,700 4,22 11,572 16,619.096 Total utility properties 5,171,561,883 683,769,303 15,75T~1H (45,222) 5,839,533,246 Non-utility propertles i
Coal rights 805,681 (229,766) 575,915 Miscellaneous real estate and equipment 5,065,649 (128) 11,601 45,222 5.099,142 11,948,068 Solid waste utilization system II,947,569 499 Total non-utility properties 17,818,899 (229,395) 11,601 45,222 17,623,125 1,397,520 Premium on securities of subsidiaries I,397,520 Total property, plant and equipment
$5.190.778.302
$ M 3.5 39.9%
$15.764.319 s
7
$5 358.553.891 Note: Represents transfers.
UNION ELECTRIC COMPANY AND $US$1DI ARIES SCHEDULE V - Pit 0PERTY, PLANT Als EQUIPMENT FOR THE VEAR ENDED DECEMBER 31, 1982 Col. A Col. B Col. C Col. D Col. E Col. F Balance at Balance beginning Additions at end Classi ficati on of period at cost Retirements Other changes of period (Note)
)
Utility properties Electric Tangible Plant in service Steam production
$1,242,694,740
$ 41,884,249
$ 3,098,207
$ 1,281,8+80,782 Hydraulle production 60,198,196 10,470,473 38,437 70,630,232 Pumped storage production 45,868.356 52,105 45,913,%I internal combustion production 42,302.953 192,304 2,049 42,493,208 Transmissinn 422,249,977 13,623,967 568,602 (945) 435,304,397 Distribution 9 %,367,430 60,478,599 8,722,061 1,095 1,048,118,063 General 182,568,025 28.5 %,702 4,114,414 (1,379) 136,998,934 N
Construction work In progress 1,455,853,388
% 8,294,393 1,924,147,781 Nuclear fuel 131,491,210 38,061,790 169,553,000 settlement of uranium litigation (76,527,974)
(12,879,503)
(89,407,477)
Plant held for future use 1,727,559 131.497 (150) 1,858,906 Total 4,434,756,560 648,849,576 16,543,770 (3,379) 5,067,091,257 Intangible 161,316 85,000 246,316 Total 4,434,945,176
~648,934,576 16,543,770 f,1.379) 5,067,337,603 Steam heating Tangible Plant in service Production 799,792 3,127 796,665 Distribution 4,684,496 4,837 13,l49 4,676,184 General 178,506 I,350 179,856 Construction work in progress 833 813 Total 5,662,794 7,000 16,276 5,653,535 Gas Tangible Plant in service Production 2,557,665 (781) 2,556,884 Transmission 7,110,856 247,819 38,840 7,319,835 i
Distribution 56,865,954 3,384,474 476,701 59,773,727 General 3,% 7.353 605,211 169,320 (2,582) 3,900,662 Construction work in progress 94,163 (21,867) 72.2 %
Total 70,095,991 4,284,556 654,561 (2,552) 73,623,404 Intangible 16,113 16,II)
Total 70,112,104 4,214,556 654,561 (2.55 2) 13,639,517 l
l (Continued on following page)
UNION ELECTRIC COMPANY AND SUBSIDI ARIES SCHEDULE V - PROPERTY, PLANT AND EqulPMEWI (Continued)
FOR THE YEAR ENDED DECEMBER 31, 1982 Col. A Col. 8 Col. C Cnt. O Col. E Col. F Balance at Balance beginning Additions at end Clas si ficati on of period at cost Retirements Other changes of period Utility properties (Continued)
Water Tangible Plant in service Source of supply 228,885 6,800 228,685 Pumping 338,836 24,878 1,180 362,534 Water treatment 2,074,336 28,329 6,363 2,096,302 Distribution 5,068,872 264,367 24,360 5,308,879 General 205,323 16,055 1,936 320 219,762 Construction work in progress 35,161 48,643 83,804 Plant held for future use 4,579 4,579
{
Total 7,948,992 389,072 33,839 320 8,304,545 Coranon Tangible Plant In service Steam production 16.563,844 67,641 4,78 5 16,626,700 Construction work in progress 41,198 (41,198)
Total 16,605,042 26,443 4,785 16,626,700 Total utility properties 4.535,277,10B b5 3,571,947 17,283,531 U,b41) 5,171,563,663 Non-utility properties 805,681 Coal rights 805,681 Miscellaneous real estate and equipment 5,093,025 (199) 30,818 3,641 5,065,649 solid waste utilization system 11,993,726 (46,157) 1I,947,569 Total non-utility properties 17,892.432 (46,356) 30,818 3,641 17,818,899 1,397,520 Premlum on securities of subsidlaries 1,397,520 Total property, plant and equlpment
$4.554.567.060 1653.525 3 517.314.349 L
NN Note: Represents transfers.
UNION ELECTitlC COMPANY Am SUBSIDIARIES '
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR EMED DECEMBER 31, 1981 Col. A Col. 8 Col. C Col. O Col. E Col. F Balance at Balance beginning Additions at end Classification of period at cost Retirements Other changes of period (Note)
Utillty propertles Electric Tangible Plant in service steam production
$1,190,997,789
$ 55,493,465-
$ 3,793,514
$1,242,694,740 Hydraulic production 60,212,747 69,068 83,619 60,198,196
)
Pumped storage production 45,854,742 6,614 45,861,356 internal combustion production 42,303,087 (134) 42,302,953 I
Transmission 419,626,174 4,296,010 1,664,971 (7,236) 422,249,977 l
Olstribution 947,241,773 57,264,025 8,084,040 (54,328) 996,367,430 Ceneral 93,419,270 20,73E 417 I,454,021 (133,641) 112,568,025 Construction work in progress 1,097,616,671 389,599,671 (31,362.954) 1,455,853,388 E
Nuclear fuel 99,085,385 32,405,825 131,491,210 Settlement of uranium Iltigation (62,624.112)
(13,903,862)
(76,527.974)
Plant held for future use 1,376,666 489 870 (138,977)
I,727,559 1
Total 3,935,110,192 546,453,969 15.050,165 (31,697,136) 4,434,786,660 Intangible 161,316 161,316 Total 3,935,271,505 546,453 M 15.0B0,H5 (31,697.136) 4,434,948,176 Steam heating Tangible Plant in service Production 78 4, % 7 16,632 1,307 799,792 Distribution 4,743,595 (2,911) 56,188 4,684,496 General 178,401 105 178,506 Construction work in progress 1,597 (I,597)
Total 5,705,060 12,229 57,495 5,662,794 Gas Tangible Plant In service Production 2,558,301 (636) 2,557,665 Transmission 6,926.029 186,254 1,427 7,110,856 Distribution 53,688,723 3,547,140 370,471 562 56,865,954 General 3,273,671 308.122 113,878 (562) 3,%7.353 Construction work In progress 157,693 (63,530) 94,163 Total 66,604,417 3,977,983 455.776 (636) 10,095,993 Intangible 16,113 16,113 Total 66,620,530 3,977,956 455,776 (636) 70,112,104 (Continued on following page)
l UNION ELECTRIC COMPANY AND SUBSIDI ARIES l
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (Continued) l FOR THE YEAR ENDED DECEMBER 31, 1981 Col. A Col. B Col. C Col. D Col. E Col. F Balance at Balance beginning Additions at end Classi fi cation of period at cost Retirements Other changes of period (Note)
Utility properties (Continued)
Water Tangible Plant in service Source of supply 192,385 29,900 400 221,805 Pumping 224,416 114,697 277 338,836 Water treatment 2,009,645 64,691 2,074,336 Distribution 4,925,673 148,792 5,593 5,068,872 General 176,833 33,291 4,801 205,323 Construction work In progress 31,307 3,854 35,161 p
Plant held for future use 4,579 4,579 u
Total 7,564,838 395,225 11,071 7.9 %,992 Comon Tangible Plant in service Steam production 16,498,018 65,826 16,563,844 Construction work In progress 18,054 23,144 41,198 Total 16,516,072 58,970 16,605,047 Total utility properties 4,031,688,008 550,928,3/9 15,634,507 (31,697,7/z) 4.535,277,10s Non-utility properties Coal rights 805,683 805,68l Miscellaneous real estate and equipment 5,279,816 275,374 712,436 249,976 5,093,025 tolid waste utillaation systern 11,960,594 33,132 11,993,72b Total non-utility properties 18,046,091 308,506 712,136 249,971 17,892,432 Premium on securities of subsidiaries 1,397,520 1,397.520 Total property, plant and equipment
$4.051.124.669
$3SL2N
$l6.346.643 5 (3 3,%7,U Q
$4.554.567.060 Note: Represents transfers (includes $31,362,954 transfer of Callaway unit 2 costs to deferred charges).
UNION ELECTRIC COMPANY ANO SUS $1DI ARIES SDIEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION, ANO AMORTIZATION OF PROPERTY, PLANT AND EQUlPMENT FOR THE YEAR ENDED DECEMPER 31,1983 Col. A Col. 8 Col. C Col. O Col. E Col. F palance Additions galance l
at and l
at beginning charged to costs Classi fication of period and empenses Retirements Other changes of period (Note A)
(Note B)
Utility properties Electric Plant in service Steam productlon
$383,051,580
$36,302,087
$ 1,677,999
$ 6,776
$ 417,682, % 4 Hydraulic production 29.800,753 823,722 38,770 309 30,586,014 Pumped storage production II,470,271 567,382 263 570 12.037,960 Internal coeustion production 13,842,860 1,661,946 15,504,806 Transmission 130,166,326 8,731,225 710,124 (48,108) 138,139,319 Olstribution 324,335,595 39,755,667 13,420,477-53,867 350,724,652 General 42,897,647 6,848,421 4,694,512 4,298 45,055,854 Plant held for future use 4,650 610 (5,260)
Total 935,569,682 94,691,060 20,542,145 12,452 1,009,731,049 steam heating 2,836,600 167,694 146,467 2,857,827 22,277,039 2,256,599 737,056 (10.095) 23,786,487 1,455,613 147,050 13,826 (907)
I,587,930 Gas 14,113.677
%8,577 II,194 (8,390) 14,542,670 water Conenon Total utility properties 976,252,611 97,710,980 21,450,688 (6,940) 1,052,505,963 Non-utility properties Miscellaneous real estate and equipment 8,402,200 1,868,7 %
4,601 10,259,343 1984.654.811
$99.572.724
$21.455.289 g
$1.062.765.106 Total l
in addition to the prowlslon for depreciation as shown on the Statement of income under Operating Expenses, such additional amount principally Includes $7.276,126 l
Notes: (A) reflects depreciation of transportation and related work equipment charged to clearing accounts, and amounts collected for relocation of facilities; of fset by the amorttration of loss on property abandonment (aggregating $374,250).
(8) Represents transfers.
UNION ELECTRIC COMPANY AND $UBSIDI ARIES l
SCHEDULE VI - ACCUHULATEC DEPRECI ATION, DEPLETl0N, AND AMORT 12AT10N OF PROPERTY, PLANT AND EQUlPMENT l
FOR THE YEAR ENDED DECEMBER 31, 1982 Col. A Col. O Col. C Col. D Col. E Col. F Balance Additi ons Balance at beginning charged to costs at end Classification of period and expenses Retirements Other changes of period (Note A)
(Note B)
Utility properties Electric Plant In service Steam production
$355,778,420
$32,089.455
$ 4,818,248 I,953
$ 383,051,580 Hydraulle production 29,024,460 843,951 68,666 1,008 29,800,753 Pumped storage production 10,869,862 600,409 11,470,271 Internal combustion production 12,194,332 1,650,326 2,049 253 13,842,860 l
Transmission 123,080,301 8,588,042 750,858 (744,159) 130,166,326 Di st ri buti on 297,778,360 39,153,870 13,338,577 741,942 324,335,595 i
General 40,245,134 6,383,747 3,729,597 (1,637) 42,897,647 SS Plant held for future use 4,040 610 4,650
-a Total 868,974,909 89,303,410 22,707,995 (642) 935,569,682 Steam heating 2,685,815 170,353 19,568 2,836,600 ces 20,944,337 2,137,053 803,026 (1,325) 22,277,039 Water 1,341,920 141,534 28,160 319 1,455,613 camwon 13,710,528 412,986 10,402 565 14,143,677 Total utility properties 907,657,509 92,165.336 23,569,151 (1,08 3) 976,252,611 Non-utility properties Miscellaneous real estate and equipment 8.338,817 91,072 30,818 3,129 8,402,200 Total
$915.996.326
$92.256.408
$23.599.969 2.046 j984.654.8tl Notss: (A) includes $5,586,104 In addition to the provision for deprecletion as shown on the Statenent of Income under Operating Esperses, such additional amount principally reflects depreciation of transportation and related work equipment charged to clearing accounts, and amounts collected for relocation of facilities; offset by the amortization of loss on property abandonment (aggregating $1.778,518).
(B) Represents transfers.
UNION ELECTRIC COMPANY AND SUB$lDIARIES SCHEDULE VI - ACCUMULAlED DEPRECI ATION, DEPLETION, AND AMORTIZATION OF PROFERTY, PLANT AW EqulPMENT FOR THE YEAR EW ED DECEMBER 31, 1981 Col. A Col. 8 Col. C Col. O Col. E Col. F Salance Additions Balance at end at beginning charged to costs Classification of period and expenses Reti rements Other changes of parlod (Note A)
(Note B)
Utllity properties Electric l
Plant in service Steam production
$329,170,508
$30,487,325
$ 3,877.939
$(1,467)
$355,778,420 J
Hydraulic production 28,363,690 745,169 84,587 188 29,024,460 Pumped storage production 10,269,384 599,818 660 10,869,862 Internal coe ustion production 10,545,732 I 648,600 12,194,332 Transmission 115,671,833 8,753,748 1,334,813 (10,467) 123,000,301 Distribution 273,398,063 36,821,848 12.453,749 12,198 297,778,360 General 36,498,754 4,945,012 1,199.095 463 40,245,834 m Plant held for future use 3,430 610 4, 01,0 p
Total 803,921,387 84,002,130 18,950,183 1,575 868,974,909 Stsam heating 2,587,728 168,068 69,981 2,685,815 Grs 19,516,231 2,009,399 578,759 (2,534) 20,9%,337 witar I,218.904 132,007 8,991 I,34I.920 Cor.1 mon 13,299,853 410,675 13,710,528 Total utility properties 840,5 %,103 86.722,279 19,607,314 (959) 907,657,509 Non-utility properties Miscallaneous real estate and equipment 8,281,599 56,972 117 363 8,338.817 Total
$848.825.702
$86.779.211
$19.608.031
@)
$915.996.326 in addition to the prowlslon for depreciation as shown on the statement of Income under operating Expenses, such additional amount principally includes $5,469,624 Notts: (A) reflects depreciation of transportation and related work equipment charged to clearing accounts, and amounts collected for relocation of facilltles; of fset by the amortization of loss on property abandonment (aggregating $1.333,640).
(8) Represents transfers.
I UNIDN ELECTRIC CDMPANY AND $UB$1DI ARIES SCHEDULE Vill - VALUATIDN AND QUALIFYlNG ACCDUNTS FDR THE YEAA$ ENDED DECEM8ER 31,1983,1982, and 1981 Col. A Col. B Col. C Col. O Col, g Addltions j
(I)
(2) l Balance at Charged to Balance at i
beginning costs and Charged to end of
_ eriod Description of period expenses other accounts Deductions p
(Note) j Year ended December 31, 1983 l
Reserves deducted in the balance sheet from assets to which they apply:
Allowance for doubtful accounts
$1.621.703
$5.108.782
$4,048.856
$2.681.129 Year ended December 31, 1982 Reserves deducted in the balance sheet from assets to which they apply:
Allowance for doubtful accounts
$ 1.497. 755
$4.302.566 s4.178.618 sl.621.703 Year ended December 31, 1981 Reserves deducted in the balance sheet from assets to which they apply:
Allowance for doubtful accounts 51J@0.2il
$4.643.745
$4.226,201
$1.497.755 Note: Uncollectible accounts charged off, less recoveries.
PART III ITEM
- 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Any information concerning directors required to be reported by this 31 item is included in the Company's 1984 definitive proxy statement filed pur-suant to Regulation 14A and is incorporated herein by reference.
Information concerning executive officers required by this item is reported in Part I of this Form 10-K.
ITEM 11.
EXECUTIVE COMPENSATION.
Any information required to be reported by this item is included in the Company's 1984 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
('
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Any information required to be reported by this item is included in the Company's 1984 definitive proxy statement filed pursuant to Regulation 14A and. is incorporated herein by reference.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Any information required to be reported by this item is included in the Company's 1984 definitive proxy statement filed pursuant to Regulation 14A and is incorporated herein by reference.
s 50 N
PART IV ITEM 14.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this report:
Financial Statements and related schedules. See Index to Financial Statements, Page 26.
Exhibits See Exhibits, Page 53.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of 1983.
51
i SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities J
Exchange Act of 1934, the registrant has duly caused this report to be signed R
on its behalf by the undersigned, thereunto dul.y authorized.
1 UNION ELECTRIC COMPANY (Registrant)
CHARLES J. DOUGHERTY Chairman of the Board of Directors and Chief Executive Officer Date March 12, 1984 By
\\
~x,,_
ma (Ja s
. Thompson, Att6rney-in-Fact)
Pursuant to the requirements of tle curities Exchange Act of 1934, this report has been signed below by the fol owing persons on behalf of the registrant and in the capacities and on tLe dates indicated.
Signature Title CHARLES J. DOUGHERTY Chairman of the Board of Directors, Chief Executive Officer and Director (Principal Executive Officer) a C. W. NUELLER Vice President (Principal Financial Officer)
DONALD E. BRANDT Controller (Principal Accounting Officer)
J. A. BAER II Director W. L. BEHAN, JR.
Director SAM B. COOK Director WILLIAM E. CORNELIUS Director EARL K. DILLE Director EDWIN S. JONES Director RICHARD A. MEYER Director JOHN K. RIEDY Director STEWART W. SMITH, JR.
Director HOWARD L. YOUNG Director By
,n w Ma rch 12, 1984 i
=
(Ja s C. Thodpson, Aftorney-in-Fact) b f
f 52 9
7s EXHIBITS Exhibits Filed Herewith Exhibit No.
Description 3.3
- Certificate of Amendment to the Articles of Incorporation filed with the Secretary of State of the State of Missouri t'
on November 28, 1983.
.k
..,m 3.4
- Five Certificates of Amendment to the Articles of Incor-f' poration filed with the Secretary of State of the State of Missouri on December 27, 1983.
/
- Three Certificates of Amendment to the Articles of Incor-
/ ::3.5 poration filed with the Secretary of State of the State of t,
,9-Missouri on December 30, 1983.
%J ef 4.18
- Lease of Personal Property between Charter Leasing Co.,
d' Inc. and Missouri Edison Company.
i
,N 4.19
- Purchase Agreement dated June 9, 1967 between Missouri Utilities Company and purchasers of its 6% Notes, due June 1, 1992 and its Preferred Stock, 5.70% Series.
'r 3
L
[
l 4.20
- Supplemental Indenture dated November 15, 1983 to the In-
,f n
denture of Mortgage and Deed of Trust, dated June 1,1941, f
,j+ j of Missouri Utilities Company.
,6 4.21
- Supplemental Indenture dated December 15, 1983 to the In-
-denture of Mortgage and Deed of Trust, dated June 1, 1941, of Missouri Utilities Company.
4.22
- Supplemental Indenture dated December 30, 1983 to the In-denture of Mortgage and Deed of Trust, dated June 1, 1941, c<) I of Missouri Utilities Company.
J W.23
- Fourteenth Supplemental Indenture dated as of December 30, Q " ';
1983 to the Mortgage and Deed of Trust dated July 1, 1946,
. ~
of Missouri Power & Light Company.
- Ninth Supplemental Indenture dated as of December 30, 1983 4.24
')
to the Indenture of Mortgage or Deed of Trust dated as of
',+
July 1, 1945 of Missouri Edison Company.
e
,a
/
12
- Statement re computation of ratios of earnings to fixed QQ) charges.
Y I
24
- Consent of Independent Accountants.
25
- Powers of Attorney O
I a
,9, 53
Exhibits Incorporated By Reference The following exhibits heretofore have been filed with the Securi-ties and Exchange Commission pursuant to requirements of the Acts administered by the Commission. Such exhibits are identified by the references following the listing of each such exhibit, and they are hereby incorporated herein by reference under Rule 24 of the Commission's Rules of Practice.
3.1
- Articles of Incorporation of the Company and all amendments thereto filed with the Secretary of State of the State of Missouri on or prior to November 30, 1963.
(Registration No. 2-24089, Exhibit 3-A-1.)
3.2
- Certificates of Amendment to Articles of Incorporation Dated as of File Reference Exhibit No.
June 1, 1966 2-58274 2.3 November 9, 1967 Form 8-K, November 1967 2
January 10, 1969 Form 8-K, January 1969 1
November 19, 1969 Form 8-K, November 1969 2
August 10, 1970 (2) 2-38212 2-G April 22, 1971 Form 8-K, April 1971 3
December 14, 1972 Form 8-K, December 1972 3
April 1, 1974 (2) 2-52218 2.10 October 22, 1974 2-52218 2.10 November 21, 1974 2-52218 2.11
-October 16, 1975 (3) 2-54869 2.3 October 6, 1977 Form 10-K, 1977 6.2
-July 10, 1978 (2) 2-62348 2.3 April 11, 1979 2-64291 2.3-A l
November 27, 1979 2-65874 2.2A June 2, 1980 2-69821 3.3 I~
June 18, 1980 2-69821 3.3 r
November 19, 1980 2-69821 3.4 l
June 17, 1981-Form 10-Q, June 30, 1981 4
i November 19, 1981 2-75191 3.3 I
February 3, 1982 2-75191 3.4 May 4, 1982 2-75191 3.5 November 18, 1982 2-80394 3.3 l
May 6, 1983 Form 10-Q, March 31, 1983 3
June 13, 1983 Form 10-Q, June 30, 1983 3
3.6
- By-Laws of the Company as amended to April 22, 1980.
(March 31, 1980 Form 10-Q, Exhibit 5.)
4.1
- Order of the Securities and Exchange Commission dated October 16, 1945 in File No. 70-1154 permitting the issue of Preferred Stock, $3.70 Series.
(Registration No.
i 2-27474, Exhibit 3-E.)
4.2
- Order of the Securities and Exchange Commission dated April 30, 1946 in File No. 70-1259 permitting the issue of Preferred Stock, $3.50 Series.
(Registration No. 2-27474,
. Exhibit 3-F.)
54 1
,, _ - - -, - _ _.... _ -.... -.. _. -, _ _.. -, - _,. _,,., _ _ _ -.. _. _., _ _ _ _ _ _. ~.. -..
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No.
Description 4.3
- Order of the Securities and Exchange Commission dated October 20, 1949 in File No. 70-2227 permitting the issue of Preferred Stock, $4.00 Series.
(Registration No.
2-27474, Exhibit 3-G.)
4.4
- Indenture of Mortgage and Deed of Trust of the Company dated June 15, 1937, as amended May 1, 1941, and Second Supplemental Indenture dated May 1, 1941.
(Registration No. 2-4940, Exhibit B-1.)
4.5
- Supplemental Indentures to Mortgage Dated as of File Reference Exhibit No.
December 1, 1950 Form 8-A, File No. 1-2967 I-1 1-C May 1, 1952 Form 8-A, File No. 2967 J-1 1-D July 1, 1956 Form 8-K, July 1956 2
March 1, 1958 Form 8-K, March 1958 2
September 1, 1960 Form 8-K, September 1960 3
July 1, 1961 Form 8-K, August 1961 3
November 1, 1963 Form 8-K, November 1963 3
April 1, 1965 Form 8-K, April 1965 3
May 1, 1966 2-56062 2.33 March 1, 1967 2-58274 2.9 March 15, 1968 Form 8-K, April 1968 2
May 1, 1969 Form 8-K, May 1969 2
October 1, 1969 Form 8-K, October 1969 2
April 1, 1970 Form 8-K, April 1970 2
January 1, 1971 Form 8-K, January 1971 2
April 1, 1971 Form 8-K, April 1971 6
September 15, 1971 Form 8-K, October 1971 3
February 1, 1974 Form 8-K, February 1974 3
March 1, 1975 Form 8-K, March 1975 4
August 16, 1976 Form 8-K, September 1976 4
October 15, 1977 2-60235 2.5 December 1, 1977 Form 10-K, 1977 6.5 August 1, 1978 2-62348 2.9 November 1, 1979 Form 10-K, 1979 6.1 July 7, 1980 2-69821 4.6 August 1, 1980 2-69821 4.7 February 1, 1981 2-70655 4.5 September 1, 1982 2-79118 4.4 March 1, 1983 2-82336 4.3 4.6
- Indenture of Mortgage and Deed of Trust of Missouri Power &
Light Company dated July 1, 1946 and Supplemental Inden-tures dated July 1, 1946, November 1, 1949, June 1, 1951, July 1, 1954, December 1, 1959, July 1, 1962, March 1, 1966, April 1, 1967, June 15, 1969, April 15, 1973, December 1, 1974, May 1, 1976 and July 1, 1979.
(Registration No. 2-87469, Exhibit 4.1.)
55
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No.
Description 4.7
- Indenture of Mortgage or Deed of Trust of Missouri Edison Company dated July 1, 1945 and Supplemental Indentures dated January 1, 1952, June 1, 1961, June 1, 1965, August 1, 1975, September 1, 1976, November 1, 1977, February 1, 1981 and July 1, 1982.
(Registration No. 2-87469, Exhibit 4.2.)
4.8
- Indenture of Mortgage and Deed of Trust of Missouri Utili-ties Company dated June 1, 1941 and Supplemental Indentures dated December 1, 1946, December 1, 1947, April 1, 1948, June 1, 1954, June 1, 1955, June 1, 1956, June 1, 1957, December 1, 1959, June 1, 1963, June 1, 1966, March 1, 1971, May 1, 1971, May 1, 1973 and October 1, 1976.
(Registration No. 2-87469, Exhibit 4.3.)
4.9
- Agreement of Sale dated as of March 1,1974 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with Trust Indenture dated as of March 1, 1974 between the Authority and The Boatmen's National Bank of St. Louis, as trustee.
(April 1974 Form 8-K of the Company, Exhibits 1 and 2.)
4.10
- Reaffirmatioa Agreement dated as of April 9, 1975 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with First Supplemen-tal Trust Indenture dated as of June 1, 1975 between the Authority and The Boatmen's National Bank of St. Louis, as trustee.
(June 1975 Form 8-K of the Company, Exhibits 3 and 4.)
4.11
- Agreement dated as of November 1, 1977 between the State Environmental Improvement Authority of the State of Mis-souri and the Company, together with Trust Indenture dated as of November 1, 1977 between the Authority and the Chase Manhattan Bank, N.A., as trustee and Mercantile Trust Company National Association, as co-trustee.
(Registration No. 2-60235, Exhibit 2.10.)
4.12
- Agreement of Sale dated as of August 1,1980 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with Trust Indenture dated as of August 1, 1980 between the Authority and The Boatmen's National Bank of St. Louis, as trustee.
(Registration No. 2-69821, Exhibit 4.11.)
4.13
- Agreement of Sale dated as of October 1, 1981 between the State Environmental Improvement Authority of the State of Missouri and the Company, together with Reimbursement Agreement dated as of October 1, 1981 between Morgan Guaranty Trust Company of New York and the Company and Trust Indenture dated as of October 1,1981 between the Authority and Mercantile Trust Company National Associa-tion, as trustee.
(1981 Form 10-K, Exhibit 4.14.)
56
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No.
Description 4.14
- First Supplement to Agreement of Sale dated as of November 15, 1982 between the State Environmental Improvement and Energy Resources Authority of the State of Missouri and the Company, together with Reimbursement Agreement dated as of November 15, 1982 between Morgan Guaranty Trust Company of New York and the Company and Trust Indenture dated as of November 15, 1982 between the Authority and Mercantile Trust Company National Association, as trustee.
4.15
- Fuel Lease dated as of February 24, 1981 between the Company, as lessee, and Gateway Fuel Company, as lessor, covering nuclear fuel.
(1980 Form 10-K, Exhibit 10.20.)
4.16
- Loan Facility Letter Agreement dated December 11, 1981.
(1981 Form 10-K, Exhibit 4.15.)
4.17
- Credit Agreement dated as of July 21, 1982.
(June 30, 1982 Form 10-Q, Exhibit 4.1.)
4.18
- Loan Facility Letter Agreement dated July 22, 1982.
(June 30, 1982 Form 10-Q, Exhibit 4.2.)
10.1
- Amended Intercompany Agreement dated July 10, 1953 between Electric Energy, Inc., Central Illinois Public Service Com-pany, Illinois Power Company, Kentucky Utilities Company, Middle South Utilities, Inc., the Company, and St. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended.
(Registration No. 2-58274, Exhibit 5.1.)
10.2
- Agreement dated May 1, 1957 between Middle South Utilities, Inc., Kentucky Utilities Company, Electric Energy, Inc.,
Central Illinois Public Service Company, Illinois Power Company, the Company, and St. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended.
(Registration No. 2-38212, Exhibit 5-B.)
10.3
- Amendment dated July 23, 1970, to the Amended Intercompany Agreement dated July 10, 1953, between Electric Energy, Inc., Central Illinois Public Service Company, Illinois Power Company, Kentucky Utilities Company, the Company, and St. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, 1951, as amended.
(Registration No. 2-38212, Exhibit 5-D.)
57
Exhibits Incorporated By Reference (Cont'd.)
Exhibit No.
Description 10.4
- Amendment dated June 1, 1977 to the Amended Intercompany Agreement dated July 10, 1953, between Electric Energy, Inc., Central Illinois Public Service Company, Illinois Power Company, Kentucky Utilities Company, the Company, and St.. Louis Union Trust Company, as Trustee under Mortgage and Deed of Trust of Electric Energy, Inc. dated June 1, j
1951, as amended.
(Registration No. 2-60235, Exhibit 5.4. )
Note: Reports of the Company on Forms 8-K, 10-Q and 10-K are on file with the SEC under file number 1-2967.
f i
i l'
~
4 i
h i
t 1
i 58
_ _. - ~..
SNUPPS-C
' Question 7.
Describe aspects of its regulatory environment including, but not necessarily limited to, the following:
prescribed treatment of construction work in progress and allowance for funds used during construction; rate base (original cost, replacement, fair value, other); accounting for deferred income taxes and investment tax credits; fuel adjustment clauses in effect or proposed; historical, partially projected, or fully projected test year.
Response
Union Electric Company is primarily an electric utility with 91% of its annual revenue coming from sales of electric energy.
The company is regulated by three state commissions and the Federal Energy Regulatory Commission in approximately the following proportion based on jurisdictional revenue:
Missouri 83%
FERC 3
The regulatory environment varies between jurisdictions with the most favorable climate existing in Illinois where an automatic fuel adjustment provision is permitted (as is the case in Iowa and before the FERC).
The Illinois Commerce Commission has adopted rules allowing a fully projected test year (as does the FERC) and Construction Work in Progress (CWIP) in rate base.
However, since Missouri, which is the Company's primary jurisdiction, does not allow CWIP, Illinois has not permitted CWIP in rate base for Union Electric Company.
The regulatory environment in Missouri has not been particularly good as has been noted by several investment banking firms and rating agencies.
Missouri law prohibits an automatic fuel adjustment clause and Construction Work in Progress in rate base.
- Further, while the Commission permits rate case filings on a projected basis, they.have generally relied on an historic test year in determining revenue requirements.
In recent years, however, the Commission has allowed the use of projected fuel prices which are subject to a true-up audit after rates are put in effect.
The Missouri Pubic Service Commission has deducted construction-related deferred taxes from rate base, which will not be a significant issue after the Callaway Plant is placed in service, nor will the CWIP issue since the Company plans no major construction for the-remainder of the 1980's.
7-1 i
i
SNUPPS-C According to these same investment bankers and rating agencies, the regulatory climate in Missouri is improving with most waiting for the litigation of Union Electric's Callaway and Kansas City Power & Light's Wolf Creek cases.
The makeup of the Commission has changed significantly in the past year with the appointment of four new members of the five seats.
Recent appointments include a CPA and two attorneys.
The Company is confident that it will receive a favorable order in its current Callaway rate case which will permit a substantial increase in cash earnings.
For additional information, the February 1984 Regulatory FOCUS publication is provided with this response.
t
't a
7-2
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30 MONTGOM ER Y STR EET JERSEY CITY, NEW JE RSEY G7302 (201) 433-5507 HISSOURI REGULATION--ANNUAL REVIEW - FEBRUARY 1984 Regulatory Agency:
Missouri Public Service Commission (PSC)
(RRA Evaluation Average /3)
No. of Commissioners:
5 full-time--minority party representation practiced, but not required.
Method of Selection:
Appointed by the Governor, Senate confirmation.
Term of Office:
6 years--staggered terms.
Chairman:
Appointed by the Governor and serves at his pleasure.
Cmmrs. Salaries:
$40,000 annually.
Governor:
Christopher S. Bond (Rep.). His current term expires in January 1985. He previously served as Governor from 1913 to 1977.
Commissioners William D. Steinmeier - A 34 year old Republican attorney who was appointed to the
'(Chairman)
Commission and simultaneously named Chairman in January 1984.
He is serving a tera which extends to April 1985.
Prior to ceccming a Ccamissicner, he served as a PSC Hearing Examiner for fcur years.
Mr. Steinmeier also was Assistant Counsel for the Highway and Transportation Commission from 1978 to 1980.
Cnarlotte Musgrave -
A 57 year old Republican who was appointed to the Commission in October 1981 and is serving a term that extends to April 1987. She was a member of the Jackson County Legislature prior to joining the PSC.
Connie B. Hendren -
A 34 year old Democrat who was appointed to the Commission in July 1983 and is serving a term which extends to April 1989.
Commissioner Hendren is a Certified Public Accountant.
Allan G. Mueller -
A 41 year old Democrat who was appointed to the Commission in July 1983 and is serving a term which extends to April 1989.
He served as a State Senator from 1977 to 1983 and as a State Representative from 1971 to 1977. He also has owned and operated a real estate business in the St. Louis area.
James Fischer -
A 32 year old Republican attorney who became a Commissioner in Jbnuary 1984 and is serving a term which extends to April 1
l 1985. Prior to his appointment to the PSC he served as Public Counsel of the State of Missouri for approximately two years.
Commission Staff:
Approximately 250 members.
They are selected by the PSC; policy level employees serve at the pleasure of the Commission.
hmission Budget:
Fiscal 1984--approximately $8.6 million, funded by assessments against the gross intrastate operating revenues of the state's utilities.
4-Services Regulated:
Investor-cwned electric, gas, telephonc, telegra;n, and water and sewer companies, passenger and f reight nctor carriers, and railroads.
Rate Base and Test The PSC generally relies on an original-cost year-end rate Period:
base but by law must consider fair value.
The PSC adopted a fully-forecasted test year in the recent Southwestern Bell Telephone (SWST) case; however, rate petitions are generally filed based upon partly-forecasted test period data which are updated during the course of the proceeding to reflect actual results. Traditionally, test periods are historical at the time of the PSC decisions, with data updated at "true-up proceedings" for' certain post-test-period and limited post-operation-of-law-date "known and measurable" changes.
CWIP Practice:
As a result of voter approval of a 1976 referendum, the PSC is prohibited from including electric construction work in progress (CWIP) in rate base.
The PSC recently interpreted the law as prohibiting recovery from ratepayers of the investment in a cancelled facility.
(See " Cancelled Plant Treatment" section of this report for additional detail.)
Return on Equity:
Authorized equity returns during the past 12 months have varied considerably.
Kansas City Power & Licht (KCP&L) was granted a 16.25% return on equity which included a 40 basis point upward adjustment for its efforts designed at improving management efficiency. Emoire District Electric's authorized equity return'of 15.03% incluced a 40 basis point management efficiency adjustment. Telephone equity returns included 14.74% for Ccntinental Telechene and 14.7". for SWST. Numerous cases were deciced casec upon stipulated agreements and were silent with regard to rate of return.
For more detailed information ccncerning the PSC'c return findings since January 1980, refer to the table on pages 6-7.
For data concerning the earned returns on average commen equity for the state's major utilities, refer to tne table on page 8.
R:.te Case Timing:
Utilities seeking rate increases must file tariffs 30 days prior to the proposed effective date.
The PSC may initially suspend the effective date for 120 days and then it may suspend the proposed tariffs for an additional six months.
If the Commission has not issued a final decision within the 11-month period, the proposed increase autcmatically becomes effective as filed and is not subject to refund.
Interim Increases:
The PSC may authorize an interim increase, subject to refund, but has generally only done so upon the demonstration of the existence of a financial emergency which may impair a utility's ability to serve.
In the 1982 Union Electric (UE) case, the Commission suggested there may be additional or alternative criteria upon which to base the approval of interim rates and established a separate docket to investigate the issue; however the docket was closed in January 1984 and no change in the financial emergency standard was adopted.
T' Consumer Interests:
Represented by the Office of Public Counsel, a Division of 'the Department of Consumer Affairs, Regulation, and Licensing.
Saveral consumers groups are active in Missouri including:
the Missouri Public Interest Research Group, the Coalition for the Environment and the Missourians for Safe Energy.
In 1982,
l 3
' Consumer Interests a referendun which would have required the estaDlishment of a (cont.):
Citizens Utility 6 card was defeated by voters.
A consumer organization is currently gathering signatures in order to place a referendum on the November 1984 ballot which would prohibit the operation of nuclear plants within the state of Missouri.
The referendum, as proposed, would not preclude the recovery of charges associated with the Callaway facility from ratepayers.
Accounting:
In 1983 the PSC proposed a Rule which provides that the Commission employ a full income tax normalization standard for ratemaking purposes. The Commission has traditionally used a cash-flow test, on a case-by-case basis, to determine whether or not to allow normalization accounting. Most major utilities had been required to flow through the benefits of tax timing differences not expressly prohibited by the Economic Recovery Tax Act of 1981; however KCP&L and Union Electric (UE) were allowed to normalize the tax benefits associated with the debt component of allowance for funds used during construction as well as pensions, payroll taxes and property taxes.
In September 1982 the PSC authorized the telephone companies to change accounting practices from straight-line vintage group and whole life depreciation to equal life group and remaining life depreciation.
Adjustment Clauses:
In June 1979 the Misscuri Supreme Court ruled that the PSC did not have statutory authority to allow automatic fuel-adjustment clauses.
The fuel or purchased power component of electric tariffs is calculated at the time of a general rate case.
The Ccmmissicn has allowed certain projected fuel costs exclusive of interchange, with true-up proceedings to follow at a later date. The PSC has generally ruled that any over-recovery (including interest) be refunded to ratepayers and that any under-recovery be absorbed by the company. Purchased gas adjustments are in effect for the gas distribution companies.
The difference between costs incurred and costs recovered are deferred and recovered from or credited to customers over a subsequent 12-<nonth period.
Court Actions:
PSC decisions must initially be appealed to a Missouri Circuit Court, and then to the Court of Appeals, and ultimately to the Missouri Supreme Court.
In June 1979, the Missouri Supreme Court determined that the PSC did not have the statutory authority to allow automatic fuel-adjustment clauses.
The Court stated at that time that Missouri law required the PSC to set a fixed maximum rate which remained in effect until the estaolishment of a new rate.
Legislation:
The Missouri General Assembly is a bicameral body and meets annually beginning on the Wednesday after the first Monday in January and continues to mid-June in odd-numbered years and to April 30 in even numbered years.
No significant utility-related legislation has been enacted in recent years.
,f l b)
Legislation proposed during 1984 includes a bill that would allow the utilities to add a specific charge to customers' bills to finance the Cffice of Public Counsel.
The Public Counsel is currently funded from general revenues appropriated by the General Assembly. A bill which would have limited the level of electric rate increases that an electric utility i
L could implement during a 12-mo c period accears unlikely to be enacted this year.
Regulatory Regulation in Missouri has been neptively af fected by the Innovations:
absence of PSC authority to implement automatic fuel adjustment clauses and the law prohibiting the inclusion of CWIP in rate base for a cash return. Since mid-1981 the fuel component of base rates has been calculated based upon certain projected fuel costs.
This procedure has improved the timeliness and adequacy of fuel cost recovery. Decisions in Missouri.have generally been based upon historic test periods which are updated for certain known and measurable changes to a point several months beyond the end of the test period; however, the PSC adopted a fully-forecasted test period in the December 1983 SWBT case.
In the 1983 Emoire District Electric and KCP&L decisions, the PSC provided each company a 40 basis point upward adjustment to the authorized equity return in recognition of management efficiency.
The PSC noted that it "is committed to a ratemaking policy...wherein superior service by a utility which saves customers money due to lower cperating excenses should be recognized by an upward adjustment to a utility's rate of return, while inferior performance shculd result in a downward adjustment." In 1982 the PSC reduced the overall rate of return of Missouri Public Service Company's water operations by one percent because of. inefficient management.
Cancelled Plant In response to a request by UE,to recover its investment in Treatment:
the cancelled Callaway Unit No. 2 over a five year period, the PSC determined that it could not legally allcw UE to recover the cancellation costs owing to the provisiens of PrcCasition I.
Proposition I, a ballot issue approved by veters in 1976, states that any " cost associated with owning, cperating, maintaining, or financing any property before it is fully operational and used for service, is unjust and unreasonable, and is prohibited." In making its ruling, the Ccmmissicn acknowledged that the question will ultimately be decided by the Courts. UE has appealed this decision to the Missouri Circuit Court, and contends that Prcposition I does not apply to a cancelled plant.
If the Court rules that the law can be applied in this instance, UE claims that the PSC's decision constitutes a confiscation of UE's prcoerty without due process of law.
In 1977 the PSC allowed UE to amortize, over a five-year period, the cancellation costs associated with Rush Island Units 3 and 4.
The Commission did not permit inclusien of the l
unamortized balances in rate base.
Other Developments:
On September 19, 1983, in an order regarding the ongoing construction of KCP&L's Wolf Creek and UE's Callaway No.1 nuclear generating plants, the PSC ruled that "any issues relating to the propriety of building the subject nuclear plants, and therefore the inclusion of such in... rate base, should be considered when the companies request inclusion of j
said plant in... rate bases.
At that time the Commission can... consider such issues as management prudence, excess i
capacity, cost overruns, load forecasting and rate impacts, and subsequently refuse to allow inclusion in rate base of unwarranted exoenses."
~* Other Developments Cn flovember 22, 1983, in an Access Charge Rate Structure and (cont.):
Methodology and IntraLATA Toll Settlements Order, the PSC rejected intrastate end-user commen line charges and adopted a carrier's carrier charge and a carrier's common line element mirroring the structure for such charges adopted on an interstate basis.
The access charge rate levels established by the PSC in a December 20, 1983 order are approximately 12.6% higher than those proposed in federal tariffs. Carriers will be required to pay access charges based upon the number of calls placed through the local network with AT&T Communications being assessed a premium charge.
The PSC ordered that statewide intralata toll and interlata access charge pools be established.
The pooling procedures are being implemented on an interim basis for a period to end no later than June 30, 1985.
The revenues will be divided by means of a separation mechanism closely resembling traditional separation procedures utilizing SWBT's authorized rate of return, capital structure, and income tax components.
Phase-In Proposal:
On February 15, 1984, U_E, filed for an electric rate increase of approximately $638 million (65%), effective upon the commercial operation of the Callaway No.1 nuclear unit.
In the alternative, the company has proposed a five-year phase-in plan, consisting of a first year increase of approximately
$246 million (25%) and increases of roughly 8% in each of the succeeding four years. UE's prcposed phase-in is to be accomplished by: (1) delaying realization of a cash return on a portion of the common equity invested in the Callaway Plant; (2) accelerating amortization of certain Callaway-related deferred income taxes; (3) rapidly amortizing the nuclear fuel credits received frcm Westinghouse in a nuclear fuel supply contract settlement; and (4) substituting unit-of-production depreciation for straight-line depreciation during the first three years of Callaway's ccamercial cperation.
Staff
Contact:
Kevin Kelly, Public Information Officer (314) 751-2452 M2iling Address:
Missouri Public Service Commission P 0 Box 360 Harry S Truman State Office Building Jefferson City, MO 65102 RAA Evaluation:
Regulation in Missouri had been highly politicized during the late 1970's and at the outset of this decade. We believe that I
the regulatory climate has undergone a defusing and is currently more stable. Recent Commission decisions have been more constructive from an investor viewpoint, and a more forward-looking approach to rate regulation has been demonstrated. We do not expect major changes in PSC policy, but note that four of the five Commissioners currently serving on the PSC were appointed within the last eight months and two of their terms expire in April 1985.
The PSC will be faced with several complex decisions in the near future owing largely to the fact that two of the state's major electric
)
utilities have significant investments in two nuclear
' s' generating units which are scheduled for commercial operation within the next 18 months. We recently raised our rating of
- Missouri regulation from Below AveraQe/l to Average /3 and are maintaining that evaluation at this time.
Octothy French
'da RATE CASE EEC1510k5-IX MISSOURI SINCE JANUARY 'l980 Incrr s] R questrd Incr'asa A,thorf red R*a t e TyP3 Commo2 Cas Company cf Amt.
ROR ROE Equity Amt.
ROR R0E Equity in Common Test Year La1 Cas? Identification Sve.
Date
($mfl.)
1 1
1 Cap.
Date (SMil.)
1 1
s Cap.
Rate Base M.
Arka:sas Power & Lt.
C-ER-80-32 EL 7/18/79 5.9 11.49 14. 5 36.68 3/26/80 3.2(8)
C-ER-81-364 EL 6/2/81 9.2 12.38 18.96 30.42 4/20/82 5.6(8) 8/79
" ~
C-ER-83-206 EL 12/15/82 9.9 12.67 17.57 32.07 9/26/83 3.2(8) 9/8I Ib 12/82
' V.
Empfro Ofstrict Elec.
C-E R 14 3 EL 11/9/79 16.1 10.7 15.6 34.4 7/29/80 7.0(I,8)
C-E R-81-20 9 EL 12/19/80 15.3 11.8 18.0 36.2 8 /18 /81 11.6(8) 3/80 8.s C-ER-83-42 EL 7/30/82 5.0(5) 11.39 16.5 37.88 6/17/83
- 1. 7 10.75 15.03(1) 37.66 12 /82-Y E 10.s 3/81 S.J Kassas City Pur, & Lt.
C-ER-8 0-4 8 EL 8/3/79 70.0 10.73 15.0 36.9 6/19/80 45.7(I) 10.16 13.4 34.28 F2/70-YE
!Ls C-ER-81-42 EL 8/6/80 81.2(5) 12.67 19.0 37.02 6/17/81 17.4(2) 10.67 14.4 35.48 72/30-YE lb C-ER-82-66 EL 8/26/81 49.9(5) 13.14 18.0 40.0 7/14/82 14,4(3 )
11.91 15.76 37.65 12/37-fE
!0.
C-E R-8 3-4 9 EL 8/26/82 51.3(5) 13.20 19.0 36.45 7/8/83 31.1(4) 12. 19 16.25 36.45 9/82-fI
- 10. ',
Missouri Pur. 8 Lt.
C-ER-8 0-2 86 EL 4/25/80 7.0 10.15 15.0 36.7 3/13/81 6.2 9.39 13.02 36.7 9/50-YE 10.5 C-ER-81-304 EL 1/2/81 12.0 10.68 16.25 35.45 12 /3 /81 6.7(1,8)
C-ER-8 2-180 EL 1/8/82 7.1(5) 11.21 17.25 39.7 10/29/82 5.6 10.56 15.54 39.95 9/ 5 2-Y E
- 10. '
2/82 ii.'
Mfssesrf Pubile Sve.
s C-E R 118 EL 10/5/79 28.4 10.0 1 15.0 30.0 8/25/80 9.2(I) 9.66 13.75 27.4 6 /7 9-YE 10.5 i
C-ER-81-85 EL 9/5/80 29.2 10.51 15.75 30.0 5/27/81 19.7(8)
C-ER-82-39 EL 7/31/81 21.9(5) 11.91 17.5 33.14 6/21/82 6.4 10.47 14.9 33.14 9/81-YE 10.5 5/81 8.5 C-E R-8 3-4 0 EL 8/13/82 32.8 12.07 17.35 32.2 7/1/83 11.8 11.24 14.9 33.43 9/8 2-Y E 10.5 St. Jsseph Light & Pur.
C-E R-8 0-5 3 EL 8/8/79 14.7 10.94 13.5 35.0 4/25/80 9.0(8)
C-ER-81-43 EL 7/24/80 11.7 10.92 14.0 27.52 6/9/81 4.9(8) 4/80-YE 8.5 12/80-YE 10.5 Ualo2 Electric C-ER-80-17 EL 7/6/79 55.6(R) 10.15 15.0 34.26 4/24/80 20.5(8)
C-ER-81-180 EL 11/26/80 91.1 10.88 15.5 36.07 7/ 13/ 8 1 50.0(8.5) 3/80 9.5 C-ER-82-52 EL 8/17/81 107.5(5) 12.2 17.0 35.46 7/2/82 65.2 11.71 15.62 35.46 10/81-YE 10.5 6/81 1.5 C-ER-8 3-16 3 EL 12/3/82 121.7 12.91
- 18. 16 35.92 7/6/83 30.5(8.6) 6/83 7.0 Cas Sirvice C -G R-80-17 3 GAS 12/28/79 11.2(R) 10.96(R) 15.5 36.77 9/5/80 4.9(8)
C-G R 15 5 GAS 11/14/80 14.9(R) 12.55 16.0 37.86 10/2/81 7.0 11.36 14.8 9/80 6.0 C-GR-82-151 GAS 11/25/81 17.9 13.54 18.5 39.8 8/6/82 10.6(8.7) 3/81-YE 10.5 C-GR-83-225 GAS 12/30/82 21.0 14.12 18.0 37.58 9/7/83 14.1(8.I) 8/82 S.5 9/8 3-Y E 6.0 f.actsd2 Gas C-GR-80-210 GAS 2/7/80 19.7 10.76 14.0 9 50.03 9/24/80 13.4(B)
C-GR-81-245 GA5 2/6/81 25.5 11.39 15.5 51.17 10/21/81 19.7(8) 9/80 7.5 C-GR-82-200 GA5 2/5/82 18. 4 12.0 3 16.0 53.4 10/6/82 15.2( B) 9/81 8.5 C-GR-83-233 GAS 1/11/83 24.4 12.41 16.0 56.6 9/28/83 17.8(8) 5/82 8.0 2/83 10.5 Ex tlam:tal Telephone C-TR-82-223 TEL 3/12/82 10.8(5) 12.4 7 17.5 47.95 1/26/83 5.4(8) 10.8(8) 13.6(8) 48.95 6/82-YE 10.5
(
General T21. Misusst C -TR-81-4 7 TEL 8/1/80 5.3 12.31 18.0 40.0 4/24/81 1.7(B) 12 /80 g.9 C-TR-8 3-164 TEL 12/7/82 5.4 12.87 17.5 52.0 8/9/83 1.0(8) 3/83 2.0,'
Southwesters Bell C-TR-79-213 TEL 4/16/79 112.5(5) 9.7 14.2 46.23(9) 3/3/80 34.3 10.32 12.2 56.08(10) 8/79-YE 13.5 C-T R-80-256 TEL 4/18/80 144.5 12.42 16.8 50.65(9) 11/25/80 32.0(B) 7.3 C-TR-81-2 08 TEL 1/9/81 147.0(R) 12.75 16.8 48.45(9) 11/27/81 81.8 11.92 15.1(U) 48.45(U) 9/81-YE 13.5 C-TR-82-199 TEL 2/16/82 13 0.5(5 )
13.09
- 17. l( U) 48.24(U) 12/30/82 43.8(11) 12.3 15.45(U) 4 8.24 ( U) 4/82-TE 13.5 C-TR-83-2 53 TEL 2/l/83 208.9(R) 13.3(R) 16.5(R) 55.0 12/20/83 181.6 12.3 14.7 55.0 12/84-A 10.5 Ueft:d Tal. Nfssourt C-TR-80-235 TEL 3/11/80 9.1(R) 11.5 17.0 45.4 2/3/81 1.9(12) 10.29 11.9 52.2 6 /80-Y E 11.5 C-TR-81-302 TEL 3/31/81 8.1 13.4E 18.0 52.97 12/I4/81 0.7(B) 9.39 13.25 55.1 11/81-YE 8.5 C-TR 13 5 TEL 11/10/82 11.2 12.89 17.2 54.4 3 6/10/83 2.0(B) 11.65 15.41(U) 43.92(U) 2/83-YE 7.0 i
HAJOR RATE CASES IN PROGRESS IN MISSOURI Return Sought on Action Increase Orig Co m.
Req.
AVG /
Likely Requested Cost Eq.
Test YE By/Or i
Type Rate Com.
as 1 Year Rate End of Company of 1 of Base Eq.
of End Ba se Suspensfon Case Idensiffcation Sve.
Date Mil Rev.
I 1
Cap.
Mo/Yr Val.
Period i
Unfon Electric C-ER-84-168 EL 2/15/84 638.0(13) 65.0 11.98 15.62 38.16*
2/84 YE 1/15/85 u'
Laclede Gas 1/84 C-GR-84-161 GAS 2/3/84 14.2 2.3 Footnote s: (1) Includes a 40 basis point adjustment to reflect PSC's recognition of " management efficiency."
(2) Revised to $17.2 elllion on 1/23/81.
(3) Revised to $14.5 million on 7/21/82.
i i
(4) $20.2 aflifon authortred on permanent basiss and $10.9 millfoa on interia basis. On 8/30/83 permanent increase revised to $19.9 million and interim reduced to $4.2 allifon.
4
}
(5) An additional $14.9 afliton fuel-related increase authorized 8/11/81.
1 (6) Recovery of Callaway No. 2 cancelled plant balances dented on 10/21/83.
I (7) In addition. PSC ordered the company to return $3 million to general service customers as a result of i
the PSC's rejection of proposed weathertzation program.
(8) Additional $0.7 million increase authorfred on 7/20/83 based upon 14.741 ROE and 11.361 ROR.
(9) Based on AT&T consolidated capital structure.
a (10) Southwestern Bell Telephone capital structure.
(11) Equal to $57.8 m111 ton net of settlements. Revised to $64.1 allifon 1/12/83 (equal to $58.1 million net of settlements).
(12) Authorized increase reduced to $1.1 million on 2/11/81.
l (13) As a " phase-in' alternative. UE proposed a $245 million (251) first year increase, with 81 annual Increases to follow in each of the four succeeding yetts.
8 - Order followed stipulation or settlement by the narties. Decision particulars not necessarfly precedent settfrg or spectffcally adopted by the regc!atory body.
C - Case number
! - Interfs increase implemented prior to issuance of final order (normally under bond and subject to re fun d).
R - Revised ROE - Return on book common equity ROR - Overall rate of return on rate base or on capital.
i S - Asount of increase supported by company.
U - Underlying common equity of parent in subsidf ary as a percent of capitalfration, and rate of return calculated on such underlying equity.
YE - Year-end
g g.
T*t. Cap.
R;, tire Earned sa Avg.
12cl. 5.T.
Com. Eq.
Average of Beg. &
R0E AFC as 1 Apprzx.
Rev./KW Tot. Rev.
Debt as 1 End of Yr. Com. Eq.
Last Pre-Tax Balance Ef f. Tax lie s.C u s t.
Major Utt11tfes 1782 17/31/82 Tot. Cap.
12 months ended Autho-Coverage for Common Rate (cents) in Missourf
($ Mil.)
($Mft.)
12/31/82 12/81 12/82 6/93 rfred 1981 1982 1981 1982 1981 1982 1982 ELECTRIC Kansas City Power
$486(a)
$1,521 35.21 14.81 12.61 14.4 1 16.2 5 2.8x 2.7x 821 1211 375 331 6.74
& Lfght Missourt Public 188(b) 326 30.3 15.4 13.2 13.8 14.9 2.3 2.6 36 34 25 37 7.46 Service U2fon Electric 1,218(c) 3,862 32.4 11.6 13.3 15.9 15.62 2.3 2.5 122 12 0 2.3 2.5 5.39 0 A,5 37 27 G:s Servfce 812 221 37.0 9.3 3.7 1.7 14.8 2.7 1.6 Compa ny
[n' 39 39 Laclede Gas (d) 651 249 58.5 10.9 14.1 12.0 4.2 4.0 TELEP HONE 41 40 Sorthwestern Bell 7,711(e) 13.050 56.2 11.8 12.0 12.2 14.7 4.0 3.8 Telephone United Telephone 35 35 14.2 2.8 3.0 of Missourt(f) 92 158 55.7 14.8 15.6 (a) Approximately 73% of revenue derived from service in Missourt and 271 from service in Kansas.
(b) 821 of reven.e derived from electric service and 17.5% from gas service.
(c) Approximately 861 of revenue derived from service in Missourti 111 from 111tnof s; and 31 from Iowa.
(d) F1 scal year ends September 30. Data for September 30, 1983. Returns on average equity for 12 months ended 9/30/81, 9/30/82, and 9/30/83.
(e) Data is for pre-divested entity. Approximately 16% of 1983 revenue of derived from service in Missourt.
'~ ~ ~
(f) A subsidiary of United Telecommunications.
February 1984
SNUPPS-C Question 8.
Provide citations and relevant excerpts from state and/or Federal statutes, rules or regulations (if any) that designate and require regulatory authorities to i
establish rates such that the applicant may recover all reasonable costs of operation incurred in the providing of utility service to customers.
Also provide the citations and relevant excerpts from any administrative rulings or court decisions interpreting such statutes, rules, or regulations in the establishing of rates to allow recovery of costs incurred in the providing of utility service.
Response
See attached memo dated May 2, 1984
g May 2, 1984 Mr. W.
E.
Jaudes:
RE:
Citation and relevant excerpts from state and Federal statutes, rules, regulations and cases which establish tha't utilities may recover all reasonable costs of operation incurred in providing service to customers.
I.
Missouri Missouri Statutes Chapter 393.135 Mo. Rev. Stat. 1978 "Any charge made
. or any costs (for) property before it is fully operational and used for service, is unjust and unreasonable, and is prohibited."
Cha pte r 393.270(4)
"In determining the price to be charged for.
1 electricity.
the commission may consider all facts which in its judgment have any bearing on the proper determination.
among other things, to a reasonable average return upon capital actually expended and to the necessity of making reservations out of income for surplus and contingencies."
Missouri Citations State ex. rel. Missouri Public Service Co. v. Fraas, 627 S.W.
2d 882 (Mo. Ct. App. 1981):
There can be no argument but that the Company and its stockholders have a constitutional right to a fair and reasonable return upon their investment.
That right carries as a corollary the duty by the Commission to consider all relevant factors (including the effects of inflation.)
Id. at 886.
Rather, the real question is whether the stockholders shall be permitted a fair return on the money which they have expended on these common
i.
, facilities and which during the test year were in full use.
As a matter of constitutional as well as statutory right, these scockholders of the Company are so entitled.
Id. at 889.
State of Missouri ex rel. Missouri Water Company v.
Public Service Commission of Missouri, 308 S.W. 2d 704 (Mo.
1957):
In discussing whether original cost or reproduction cost less depreciation should be used to value property used in service:
Thus it is that the courts do not and should not circumscribe regulatory agencies by any hard and fast formula.
Each case must be determined upon its own facts and, of tentimes, varying factors that may be peculiarly relevant to a reasoned determination of the ' issue of "just' and reasonable" rates under conditions then existing.
It follows as a matter of course that neither the rate base nor the return to the company is to be fixed by
" rule of thumb" or in the interest of expediency.
Id. a t 718. (Emphasis added) 4 RE Kansas City Power & Light Co.,
43 P.U.R.
4th 559 (Mo.P.S.C. 1981):
[
All of the aspects of test-year operations may
^
be adjusted upward or downward (normalized) to exclude unusual or unreasonable items in order to arrive at a proper, allowable level of all of the elements of a utility's opera tions; it is appropriate to adjust an historical test year for known and measurable changes. (Emphasis added)
II.
Illinois Illinois statutes Chapter 111 2/3 36 Ill. Rev. Stat. 1983 Change of rates
- Notice - Suspension of Rates - Taxes d
3 L
i.
. Commission shall establish ra tes
. which it shall. find to be just and reasonable."
The Commission may exclude the excess'of the amount required for a-reasonable return upon the value of said public utility's property used and useful in rendering its service to the public.
Illinois Citations Re Union Electric Company, 81 P.U.R. 3d 85 (Ill. Comm.
Comm. 1969)
The test year is used to enable investment, revenues, expenses, fair value, rate of return, etcetera, to be determined and to ascertain whether the proposed change in rates (which are prospectively applied) result in a fair and Added)
-Id.
a t 87. (Emphasis reasonable rate of return.
l Re Commonwealth Edison Co; (Ill. Comm. Comm. 43 P.U.R.
4th 503 (Ill. Comm. Comm. 1981)
A test year based on seven months actual and five months forecasted data as adjusted for certain unusual.and nonrecurring revenues and expenses as well as operating and maintenance expense other than fuel, and as normalized by certain pro forma expense adjustments, provided a fair and sufficiently forward-looking test year on which to Judge the reasonableness of proposed rates. Id. at 508. (Emphasis added)
III.
Iowa Iowa Statutes Iowa Code, Chapter 476.8 - Utility Charges and Services In determining reasonable and just rates, the Commission shall consider all factors relating to value.
Iowa Admin. Code, Chapter 250
. 20.10 Retemaking Standards 20.10(2) Cost of Service Rates charged by an electric utility providing electric service to each class of electric customers shall be designed, to the maximum extent practicable, to reasonably reflect the costs of providing electric service to the class.
The design of rates should reasonably approximate a pricing methodology for any individual utility that would reflect the price system that would exist in a competitive market environment.
Iowa Citations Re Iowa Power and Light Co.,
20 P.U.R.
4th 397 (Iowa State Comm. Comm. 1977):
In the determination of a just and reasonable rate, the Commission considered valuation of rate base, return on equity capital, the cost of doing business and allowed those prudently incurred expenses on which the Company had sustained its burden of proof.
IV.
Federal Federal Statutes 16 USCA 824d - Bates and charges; schedules; suspension of new rates (a) All rates and charges shall be just and reasonable.
16 USCA 824e - Power of Commission to fix rates and charges; determination of cost of production or transmission.
=
..... (a) the Commission shall determine the just and reasonable rate, charges, classification.
Federal C'itations State of Mo. ex rel. Southwestern Bell Telephone Co. v.
P. S.C. of No., 2 6 2 U. S. 276 (1923):
The state Commission cannot
" ignore items charged by the utilities as operating expenses unless there is an abuse of discretion in that regard by the corporate of ficers." Id. at 289.
Bluefield Water Works Co. v. Public Service Commission of W. Va., 262 U.S. 679 (1923):
A public utility is entitled to such rates, as will permit it to earn a return on the value of the.ptcperty which it employs for the convenience of the public.
"The ascertainment of that value is not controlled by artificial rules.
It is not a matter of formulas, but there must be a reasonable judgment having its basis in a proper consideration of all relevant facts." Id. at 690.
Federal Power Commission v. Hope Natural Gas Co.,
320 U.S. 591 (1944):
It is important that there be enough revenue not only for operating expenses but also for the capital costs of the business, which includes service on the debt and dividends on stock, and by such standard the return to the equity owner should be commensurate with the terms on investment in other enterprises having corresponding risks, and such returns should be sufficient to assure confidence in the financial integrity of the enterprise so as to maintain its credit and to attract capital. Id. a t 60 3.
Anaheim, Riverside, et al. v. Federal Energy Regulatory Commission, 669 F.2d 799 (1981) holds that just and reasonable a
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U.S.C.A. 824 and 824d are construed by this standard.
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SHUPPS-C Question 9.
Describe the nature and amount of its most recent rate relief action (s).
In addition, indicate the nature and amount of any pending rate relief action (s).
Use the attached form to provide this information.
Provide copies of the submitted, financially related testimony i
and exhibits of the staff and company in the most recent rate relief action or pending action.
Furnish copies of the hearing examiner's report and recommendation, and final opinion last issued with respect to each participant, including all financially related exhibits referred to therein.
Response
See attached Tables 9-1 through 9-7.
Additional information is provided in the enclosures to this response.
All data refer to Union Electric's primary business of electric generation.
1 I
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ER-84-168-Missouri Table 9-1 ATTACHMENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Test year utilized Annual amount of revenue increase requested -
test year basis (000's)
Date petition filed Annual amount of revenue increase allowed -
test year basis (000's)
Percent increase in revenues allowed Date of final order Effective date Rate base finding (000's)
Construction work in progress included in Rate base (000's)
Rate of return on rate base authorized Rate of return on common equity authorized Revenue Effect (000's)
Amount received in year granted Amount received in subsequent year (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized 12 mos. ending 12/31/84 (1)
Amount (000's) (excluding revenue taxes)
$638,590 Percent increase 65.0%
Date petition filed 2/15/84 Date by which decision must be issued 1/15/85 date of return on rate base requested 11.98%
Rate of return on common equity requested 15.62%
Amount of rate base requested (000)
$3914169 (1)
Amount of construction work in progress requested for inclusion in rate base (1) including pro forma adjustments to reflect the Callaway Plant in service
84-0109-Illinois Table 9-2 ATTACHMENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Test year utilized Annual amount of revenue increase requested -
test year basis (000's)
Date petition filed Annual amount of revenue increase allowed -
test year basis (000's)
Percent increase in revenues allowed Date of final order Effective date Rate base finding (000's)
Construction work in progress included in Rate base (000 's)
Rate of-return on rate base authorized Rate of return on common equity authorized Revenue Effect (000's)
Amount received in year granted Amount received in subsequent year (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized 12 mos. ending 12/31/84 (1)
Amount (000's) (excluding revenue taxes)
S77,955 Percent increase 58.8%
Date petition filed 2/15/84 Date by which decision must be issued 1/15/85 Rate of return on rate base requested 11.98%
Rate of return on common equity requested 15.62%
Amount of rate base requested (000)
$470,918 (1)
Amount of construction work in progress requested for inclusion in rate base (1) including pro forma adjustments to reflect the Callaway Plant in service
n ER-83-163-Missouri Table 9-3 ATTACHMENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Test year utilized 12 months 9/30/83 Annual amount of revenue increase requested -
$121,703 test year basis (000's) 12/3/82 Date petition filed Annual amount of revenue increase allowed -
test year basis (000's)
$ 30,500 Percent increase in revenues allowed 4.94%
Date of final order 7/06/83 Effective date 7/10/83 Rate base finding (000's)
Construction work in progress included in Rate base (000's)
None Rate of return on rate base authorized Rate of return on common equity authorized Revenue Effect (000's)
Amount received in year granted Amount received in subsequent year
- (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized Amount '(000 's)
Percent increase l
Date petition filed Date by which decision must be issued Rate of return on rate base requested L
Rate of return on common equity requested Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base o Increase was based on a stipulated settlement of all parties.
No determination of rate base, return on rate base or return on common
. equity was made.
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ER-82-52-Missouri Table 9-4 ATTACHHENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Test year utilized Annual amount of revenue increase requested -
127,685 test year basis (000's) 8/17/81 Date petition filed Annual amount of revenue increase allowed -
test year basis (000's) 65,502 4
Percent increase in revenues allowed 9.8%
Date of final order 7/02/82
- Effective date 7/14/82 Rate base finding. (000's)
$1,331,399 Construction work in progress included in Rate base (000's)
None Rate of return on rate base authcrized 11.71%
Rate of return on common equity authorized 15.62%
Revenue Effect (000's)
Amount received in year granted Amount received in subsequent year (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized Amount (000's)
Percent increase Date petition filed Date by which decision must be issued Rate of return on rate base requested Rate of return on common equity requested Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base
- Company filed based on 12 months ended 6/30/82.
Commission utilized the 12 months ended 10/31/81 with a true-up of known and measurable changes at 4/30/82.
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82-0505-Illinois Table 9-5 ATTACHMENT FOR ITEM NO. 9 RATE DFVELOPMENTS Electric Granted Test year utilized 1983 Annual amount of revenue increase requested -
$ 20,406 test year basis (000's) Excl. All Rev. Taxes July 9, 1982 Date petition filed Rehearing Annual amount of revenue increase allowed -
test year basis (000's) 8,813
$677 Percent increase in revenues allowed 7.07%
.51%
Date of final order May 25, 1983 Sept. 21, 1983 Effective date June 1, 1983 Sept. 27, 1983 Rate base finding (000's)
$193,448 Construction work in progress included in Rate base (000's)
None Rate of return on rate base authorized 11.9%
Rate of return on common equity authorized 15.50%
Revenue Effect (000's)
Amount received in year granted Unknown Amount received in subsequent year 9,490 (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized Amount (000's)
Percent increase Date petition filed Date by which decision must be issued i
l Rate of return on rate base requested
. Rate of return on common equity requested I
Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base i
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ER-83-14-Iowa Table 9-6 ATTACHMENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Test year utilized 1982 Annual amount of revenue increase requested -
$ 6,170 test year basis (000's)
May 4, 1983 Date petition filed Annual amount of revenue increase allowed -
test year basis (000's)
$ 2,374 Percent increase in revenues allowed 7.53%
Date of final order May 26, 1984 Effective date April 2, 1984 Rate base finding (000's)
$60,081 Construction work in progress included in Rate base (000's)
None Rate of return on rate base authorized 1123%
Rate of return on common equity authorized 14.8%
Revenue Effect (000's)
Amount received in year granted Unknown Amount received in subsequent year
$ 2,374 (If not available, annualize amounts received in year granted)
Pending Requests Test year utilized l
Amount (000's) l Percent increase l
Date petition filed Date by which decision must be issued Rate of return on rate base requested l
Rate of return on common equity requested Amount of rate base requested Amount of construction work in progress i
requested for inclusion in rate base I
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ER-83-646-PERC (excluding subsidiaries)
Table 9-7 ATTACHMENT FOR ITEM NO. 9 RATE DEVELOPMENTS Electric Granted Tsst year utilized 1983 Annual amount of revenue increase requested -
$4,030 (1) test year basis (000's)
July 29, 1983 Date petition filed Annual amount of revenue increase allowed -
test year basis (000's)
$2,000 (2)
Parcent increase in revenues allowed 5.33%
Date of final order Not Issued to Date Effective date February 27, 1984 Rate base finding (000's)
(2)
Construction work in progress included in None Rate base (000's)
Rate of return on rate base authorized (2)
Rate of return on common equity authorized (2)
Revenue Effect (000's)
Amount received in year granted Unknown Amount received in subsequent year
$2,000 (If not available, annualize amounts received in year granted) l l
Pending Requests
' Test year utilized
-Amount (000's)
L Percent increase Date petition filed Date by which decision must be issued Rate of return on rate base requested l
Rate of r'eturn on common equity requested i
Amount of rate base requested Amount of construction work in progress requested for inclusion in rate base (1)
Revised to $3,339,000 on September 9, 1983.
(2)
This was a stipulated settlement for dollar amount only.
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SNUPPS-C Question 10.
Complete the enclosed form entitled, " Financial Statistics," for the most recent twelve-month period and for the previous three calendar years.
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Response
See Tables 10-1 thru 10-4 t
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SNUPPS-C Table 10-1 ATTACi!MCNT FOR ITEM NO. 10 FI:4 ANCIAL STATISTICS 12 months' ended December 31, 1981 (dollars in millions) 12/31/81 Entnings available to common equity 127.6 Avsrtge common equity
$1,054.0 Rate of return on average common equity 12.1%
Titso total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + total interest charges + amortization of debt 1.77 discount and expense Including AFDC 1.41 Excluding AFDC Timns long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + long-term interest charges + amorization of d:bt discount and expense Including AFDC 2.11 Excluding AFDC 1.68 Bond ratings (end of period)
BBB+
Standard and Poor's Baa Moody's Times interest and preferred dividends corn 0d after FIT:
Gross income (both including and excluding AFDC) + total interest charges +
cmortization of debt discount and expense +
1.18 preferred dividends Including AFDC 1.08 Excidding AFDC
$111.5 AFUDC (net)
Nat income after preferred dividends
$127.6 87.4%
$10.875 M0rkat price of common
$ 15.55 Cook value of common 70.0%
l Market-book ratio (end of period)*
l Ecrnings avail. for common less AFDC +
depreciation and amorization, deferred
[
taxes, and invest. tax credit adjust.-
$137.2 deferred Common dividends
$101.7 1.35 Ratio I
Short-term debt
$120.4 S 66.4 l
Cank loans
$ 54.0 l
Commercial paper C pitalization (Amount & Percent)
$3,274.1 100.0%
Long-term debt
$1,719.9 52.5 Preferred stock 391.4 12.0 l
Common equity
$1,162.8 35.5 l
l
- If sudsidiary company, use parent's data.
SNUPPS-C Table 10-2 ATTACHMENT FOR ITEM NO. 10 FINANCIAL STATISTICS 12 months' ended December 31, 1982 (dollars in millions) 12/31/82 E2rnings available to common equity 165.5 Avsrage common equity
$1,187.7 Rate of return on average common equity 13.9%
Timss total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + total interest charges + amortization of debt discount and expense Including AFDC 1.86 Excluding AFDC 1.39 Tim 3s long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + long-term interest charges + amorization of debt discount and expense Including AFDC 2.11 Excluding AFDC 1.58 Bond ratings (end of period)
Standard and Pocr's BBB-Moody's Baa-2 Timss interest and preferred dividends ccrned after FIT:
Gross income (both including and excluding AFDC) + total interest charges +
cmortization of debt discount and expense +
preferred dividends Including AFDC 1.26 Excluding AFDC 1.07 AFUDC (net)
$148.7 Not income after preferred dividends
$165.5 89.8%
Mr.rket price of common
$13.75 Book value of common
$15.73 i
Market-book ratio (end of period)*
87.4%
Earnings avail. for common less AFDC +
l depreciation and amorization, deferred taxes, and invest. tax credit adjust.-
deferred
$119.9 aCommon dividends
$120.2 Ratio 1.00 Short-term debt S 67.1 l
Bank loans
$ 42.1 l
Commercial paper
$ 25.0 Crpitalization (Amount & Percent)
$3,792.8 100.0%
Long-term debt
$2,000.4 52.8 Preferred stock 464.3 12.2 Common equity
$1,328.1 35.0
- If. sudsidiary company, use parent's data.
.. - - - - _ =
SNUPPS-C Table 10-3 ATTACHMENT FOR ITEM NO. 10 FINANCIAL STATISTICS 12 months' enaed December 31, 1983 (dollars in millions) 12/31/83 Ecrnings available to common equity S
230.4 Average common equity
$1,397.0 Rate of return on average common equity 16.5%
Timss total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + total interest charges + amortization of debt discount and expense Including AFDC 2.34 Excluding AFDC 1.72 Timts long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + long-term interest charges + amorization of debt discount and expense Including AFDC 2.61 Excluding AFDC 1.91 Band ratings (end of period)
Standard and Poor's BBB-Moody's Baa-2 Timas interest and preferred dividends corned after FIT:
Gross income (both including and excluding AFDC) + total interest charges +
cmortization of debt discount and expense +
preferred dividends Including AFDC 1.44 Excluding AFDC 1.12
'AFUDC (net)
$198.9 Nst income after preferred dividends
$230.4 86.3%
Market price of common
$12.875 Book value of common
$ 16.43 Market-book ratio (end of period)
- 78.4%
Enrnings avail, for common less AFDC +
depreciation and amorization, deferred taxes, and invest. tax credit adjust.-
deferred
$200.1 Common dividends
$145.7 Ratio 1.37 Short-term debt
$ 31.5 Bank loans
$ 31.5 Commercial paper Ccpitalization (Amount & Percent)
$4,200.7 100.0%
Long-term debt
$2,108.0 50.2 Preferred stock 537.2 12.8 Common equity
$1,S55.5 37.0
- If sudsidiary company, use parent's data.
SNUPPS-C Table 10-4 ATTACHMENT FOR ITEM NO. 10 FINANCIAL STATISTICS 12 months' ended March 31, 1C94 (dollars in millions) 3/31/84 EOrnings available to common equity 242.9 AVGrage common equity
$1,451.9 Rcte of return on average common equity 16.7%
-Ticas total interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + total interest charges + amortization of debt i
discount and expense Including AFDC 2.39 Excluding AFDC 1.73 T123s long-term interest earned before FIT:
Gross income (both including and excluding AFDC) + current and deferred FIT + long-term interest charges + amorization of debt discount and expense Including AFDC 2.65 Excluding AFDC 1.91 Bcnd ratings (end of period)
Standard and Poor's BBB-Moody's Baa-2 Timss interest and preferred dividends Gcrned after FIT:
Gross income (both including and excluding AFDC) + total interest charges +
amortization of debt discount and expense +
preferred dividends Including AFDC 1.45 Excluding AFDC 1.10 AFUDC (net)
$216.9
.Not income af ter preferred dividends
$242.9 89.3%
Merket price of common
$12.50 Book value of common
$16.54 Market-book ratio (end of period)*
75.6%
Earnings avail. for common less AFDC +
depreciation and amorization, deferred taxes, and invest. tax credit adjust.-
deferred
$204.8 Common' dividends
$151.9 Ratio 1.35 Short-term debt
$117.7 Bank loans S 84.5 Commercial paper
$ 33.2 Ccpitalization (Amount & Percent)
$4,295.6 100.0%
Long-term debt
$2,174.1 50.6 Preferred stock 537.2 12.5 Common equity
$1,584.3 36.9
- If sudsidiary company, use parent's data.
_ _