ML20101P270

1991 Annual Rept,Central Power & Light Co, & Form 10-K Securities & Exchange Commission

ML20101P270
Person / Time
Site:	South Texas
Issue date:	12/31/1991
From:	Carey R CENTRAL POWER & LIGHT CO.
To:
Shared Package
ML20101P230	List: ML20101P242 ML20101P270 ML20101P288 ST-HL-AE-4149, Forwards 1991 Annual Rept,Houston Industries Inc, 1991 Annual Rept,Central Power & Light Co & 1991-92 Annual Rept,City Public Svc San Antonio,Tx
References
NUDOCS 9207100370
Download: ML20101P270 (82)

Text

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ntrd ther sd ud it Company is an Imtstoromed utihty supplying y

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.- amnis dSouth Texas W 0)mpin) is a suhsidiaq d Cmtral and L 4 f.y SouthhtCoquatmany;isteadhddingcompanyinDartas.windi

' q bagproximately $8,500stackldhs. At theald 1991,Centml mmer and Upit Oxmany semd 566,066 cusums in 226 communitjes and the

-' suminiing amt & Oxtpany also at;phes, at shoksale, a part or all d the ektric ityainments d fiw rurd dectric agaatms at d two marecipal dectric 3)*ms 'ihw a:e arpmximatdy IM9 omers d GD Pvfenuistock. W temtory sentd Ly the Company has a pn;r.ilationd appuxirr udy 19 milhat Principal execuuw o&rs an-

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? Selected Financb! Data

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[ Management's Discussion'and Analysis l.

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Shareholder aiid InvestorInformation'.i A1 codesca Ib.su Gueszt niecdowsgnsi the car arbrsk illusma it ths ywi xmud nwt in

mrwar.mcg our 7% schwarv,Im dym Ndn RMph T Stanmi ud Trner i mii plantw an

[mterconte.d eire'.rt 6% wam anw the fWh Tem cxta p; kit Ait nh W war /m cont'sts eth de r.td at.-

- paend fathIna Pmy.1l'kt:Marangmtm tkmstts:ng hon inucit de Compom has (t:xtpl m tre past G thqtwiera ef a centurpimw.Uti cammienrrtm atomer arme rman the unx trelay a it thi in 19%.

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SUMMARY

OF FINANCIAL AND OPERATING STATISI'ICS iwi w

mtwc FIN /.NCIAL STATISTICS (Thousands)

, Flectric Operadng Revenmm S1,098,730 t)K529 o

- Puct ra d Purch twd F wer 318,469 321.039 Other On ratir<g Expen ws 392,326

?&NU 27 Taxes, Other Than titlend inwme 62,453 5013 TederalIncome Tner 75,985 EG2M Operating Income

' 49,497 162 M o M

- Net income for Com non stock 197,362 1M M2 9

OPERATING STATISTICS

, -- Kilowutt-hour Sales Ghousando 16,925,627 15lP22,323 8

System Ataximum Demand Gikmatts) 3,'J91,000 3.110 OK) 6 Electr't Customen (Yearend) 5S6,066-5 J.&2 1

Averas : Kilow att hnur dales Per Residentid C ustomer it,t32 i1.454

- Avenge Reddendal Rate Per Kib> watt-hour 7.96<

GM' 15 RITl'RN ON

[ NET INCOME IOR CO)DION STOCK AEIMGE COM\\l0N 1 QlilTf CASil CONSTRUCTION IXPENDIITRES 01:010MOFDOLL%S)

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inemases a'ter our rate fm.e ende in December which is eyecial to be sigrul in the near future,

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- wdl anicash a to era of economk opponunity This past year, net iname for common nw 9 along the Mexico border. Since Mexico dws not 1

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currently hate the infrastmetun to facilitate oplo-

~ the effects of the 1990 ran sentement. We aho sim economic expansion, it may b,mooking to pur-

- helpcd but camings by wutching our emensci chase additional electricity from CPL We almill

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Since CPL has already downsized and has og rated benefit imm the groch in that mea a3 well

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in a belt-tightening mode for the past several years.

Our favorable climate, availability af elecincuy I

= we looked to other areas to cut costs We are excited and an availab!c wwk force also will make South about the initial nsults of our Business Texas a bright prospect for iadustrv I am finuly f

Improvement Plan IBIP). This study, fomierly --

cominced that we are taking the nght measures to

[ ' ' c:dled the f!veJeai Application Plan;is inwstipt.

ensure our future success. CPL and the entire CSW fing wpys all Central and South West System sub-splem are not sticking their heads in the sand, sidiaries can standardne business practices By hoping the futun> will be good We know the chal-e sharing our co!ketive knowledge and by fliiding.

lenges facing the electric utihty industry and

the tst approach in conducting business, BIp will '

believe that now is the time to plan so we can place

yield substantial savings during the next few gars enn.chts in aposition of strengdt ifor CPL and the ents ' ~ tem.flha! is why the

CPL is a strong company becau3e our predeces-

[ T (Companf is adopting a "Sptem First" attituA sors made the right decisions Our future will be L when making a bu3iness decision. We want to ask -

determined by the phms w make toiy. WhF our 1

not baly if it is good for CP!x but if the decision also metints have become more sophistUated in 35 benefiis theeatire System /

years, we still embrace the same values as our

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' Decision mahldg notit be confitni to the exect founders, Ralph W. Morrison and Witmer S. McCall.

udve suite. We are changing our corporate cuhure As in the past, cpl. will contimie to work for a Ito place deciskin making in the laps of those eksest bright tomorrow for South Texas.

3 to the pmblem. Industry buzzwwds like employee i

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tiiywrnts now atCPL H

Mwe employees uil! have a greatei rue in help-

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? ? lag chart'oth Company's futurefwe will be placing L

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itheibe given the tools needd to get the job done -

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F Jamoptimistic abwt our futuie.

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ut!!it) bNinen in Taasis) lng de dectrk, pt water and sinyt railway fr.uxhtw itt

' i 2rdt later, tief purcha9xl a&liuonal utilitis und krorporatal their company under i.

Ils name of Centml Power and Light'on Not.t 1916 'the early )rars wre lean m the ku visioniiry bus!nessmen built an empire in a egion nicknamed "the cactus patcic CPL C]

1 wa 341 to Middle West Utilitis in 1925.

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percts reflecting cusumer gmwdt die simngdening South Texas (conomy md warmer weade IWcase of the nae increase, awrage n:wrue pr kwh fran residential ctatoom inavad from 6M cents to 7.96 cevuvrap nskimtial un ge per ctsomer increawd slighdy Imm 11jM kwh to 11,492 kuh The numte d asidential ruman atiets enhas up 13 2 perxnt 19486E Cocum xial icwh 3aies shwed a 1 gnxnt incn'ase. Incwasd tammic actnity along the Mexico border is exgcal to impmve this percentage.

1rdustnal kwh saks inerend 1 I prcent owr P60 as a n.suh of the additwn of a large

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industrial cumner '#wlim Gas enutng of 0)rpus Christi) and plant expansims of tw l

cristiag cmton=n i Remonts in Gnpry, and Vdera ReGrrry of Oxpus Christ 9 Jawhoa Gas Proaring Plant with its 44 ngawait loadJs the seantlargest on the CPL syrem Sane indstrid circ > tim. winch relied on ayeneratien for ekctric supply. exceui d thor awn p:neratmg apacay where once they sold execu ektricin to Gt 'be) ax w poxhurg mer j

frrsn us Other dectric kwh s ths mcmasaO6 rcent exer 1990 with hereaxd eaagy saks to dw F

I Q>misiGa Fecral de Dectriadad of Mexico (CR ln 1M CFE ymd to purchaw 50 mepwuns of capacity thmugh April 1995 Fud and puritted pmer cras decread by 2 gecent due tc the ogren of 0v nudear plant anhstssim management of fuel activitie.

. Operating expenses are expeckd to show hmited gnath owt the next few yeaumne of its Busines Plan goah, the Oxupt.y will ampt to limit growth in non-fal operatmtrad maintenance nTenses ta no imw than the innese in kwh sales 14 dirtt0y tymg ie gmwth in

- expene to the gmwth in es. cpl. expects u limit fumre rate increw auj swngthen in mmptitm position; Cah costruction expendituns kr 1991 totalai $99 mdlion and were fanid from internal sources. These construction cess were primardy for impm.ments to existing transmision and

- distribution factlitM, wet the nd of new customen md to satisfy changirovguirements of existing cmtumen

- PROVIDING SHAREHOLDERVALUE

- PL took sewrd steps in 1991 to further mimce its sha:vholder adue and was

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, asarded wit an ingmud bond ratmg from the inwatment community.

During the first quite of 17)l, the Company bwend itmerall capital cmts by retinng $7 mi!! ion ofits 10.05 pecent series $100 pr value prefentd stcck. The Compatr/s inree strics d aucton-rate prefermi stock haw benefiwd from the dedine in intenst rates. The awrage dmdend rate on the thmerits was 15 perceiw in 1991 ccmpared to 73 prcent in 1990 Bartmang was minim:d. Ths Owpany obbined all of its captd xquien sis fum inemal 4

- se,unxs in 199L CPL med JorMenn debt to meet b.toa fon* in working c9it.d nyuiremmts dee to the monal natre of electric uls -

The financhl condidon of the Company has impmwd due to 3. 3:hef recciwd during 1990 -

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'and 199f and due to rbe decline in the Gxnpany's constructif n pnyram At gar's end CPL's rapitd!Aaion tatira:re 47 percent common r.ock equity,9 parcmt

i pmferred s!mk and 44 percent long-term ddt.

After examining the companyMnancial wndition pving consideration to the rate case E

settlement,CPt. s conservathe captthtnrtare and the erd of ma}v construch. Duff and l

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L Phaps upgada the canpany s tal raung for nrsmngge n>nus fnm w to an r CSW, our panmt company.dedmd a ref*one stack gait on Nn 21. lWl, e$ciw Nhxh h 1W2 in the form of a 100[mnt common stock JN.derd This is 3 drar sign of the conhdent futux outlahxn by CST dwetms and manag.oent & spbt hnnp the market pact of CSW stock inta a range me e affordtle for indiddual shareholders FUEL COSTS yy ud saving oc recent )vars whd in a fud refund to rustamtts. CPL h

refundai SI8 s milhon in fud at,ts in hyankt ed keered the anmnt r

B customers pay each month in fud chargts. Owrrecowrio occur when CPL is p(-

. able to pardase fud at pnres Max tlm thatwtre especial when the M CT gprowd fiml-fud factors.

a He Company and it casu>mers vre rtwardtd with cmemMe fud saing as CPL aarn

. shdy putsoe<1 cpportunines to lower fud cut CPL rt nep,tjated sewnl mahr naturd gd, co.t 1

and rdated trartsportaun contracts and opumind spt market purchaxs la 1M the Company's c;st was $1.87 per mmh for fuei in lW1, tha cost dmptrd 7.5 percent to $ 173 CPL's geal is to proni a rdiaNe fud supp y at the kurst cost In stqwt of thb goal, CPL ha l

suctwJuuy ngtiated tong term, tirm natud gas supply comncts wi6 the flexiNht) to take advantage of spot market rppanunities. During IP)l, CPL purchmi apprmimaidy 45 grcent of its natural gas requixmero from me spot market Sewral longtem natural gas contrxu acre renegotuttd in JWl resuhingin annual saving of ahncet $2 md! ion.

During 1991. catensiw and aggressive nepnadons witn the coal and coal trangnrt.uion surpliers nsdtd in an ppraxinute $ y0 mdlion sadnp in tlauntn.d pnce of coal to Colete Deek Patr Station with no additionai obhgations on CPL Thee contract; extend owr a period ending Dec 31, IWi CPL took advantage tithe favorable spot cud market by purchasing approximatdy 30 grcent of its co.d requixments thmugh a competaive bkling pas. In additian, CPL kuerte is can)ing costs and sawd appmumatdy si milhon in ru!uang its cow imentaries al the Cdeto Creek and Oklaunion Power Stations from G) to 45 das.

d STP maved toward an 18-month nfuding gde inan a 12-month c3 e when new nuclear (ud nxb wrre arkied to Unit I in the spring and Uni; 2 in the fall A long fud cyde means a higher capacity factor for the phnt and mora benefits to customm frondow cost nudear energ Durirg IWI, the capaaity factor far Unit 1 cas 65Ji percent and 66 3 percent for l'ait 2.

TRANSMISSION LINE CONSTRUCTION he days of building large generatiatjacihties have come to a dase, at katt for

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the next decade. CPL has no major construchon phmned until the end of the

.11)0s.1-iomer, as our communities grow it is imtertant that electricity be mere to serve them. During the sommer. CPL customers recorded a peak ioad of E

_% 3.291 megawatts (mw), set at 4 p m. on Aug 2L This was a 131 mw increaw over the 1900yakload.

While the energy supply is there to meet t! eir texk a simag transmission system is abo required to ketp serke rdiable; The Company was activdy invched in averal transmission line projectsin N)L Tbe south PAire Mand 13&k!!o',dt (kV) cable was buned across the Laguna Madre in J&tebe & trmnminan cable Unks the Pon haki sulstattan to the South Padre Island whtauon, endlire, toway fed to the communities d Sotah Pade Island and vort habdsand enhancmg reliabihry tobath.

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The Company 6dkd to sped an extra $1 1 nn! hon to re route the pnpovd Inn Ihllnleto 54%Y traremisske hne around the custing Natial habitat for the endangend Attuter's prairie chickea in making the decision, CPL halanced the md for elecincity wnh the concems of Italowners and tre U.S. Fish and Gibfe Service. The 78 mile long hne and amiatal nitchyant faciliues will cost $41 million to build and will run from CPLi Coleto Cnd Powr Statian in Gohad u>unty Pmiugh Golixt ske, San Patricia and Nuwes cumte to the Gunpany3 Lon C, Hill Powr Sution in Capus Christi. H will transfer ekttncity from the fuupanyi northern npon. which has akindant generating capac0y, to CPL 3 otha reginns. which cad more praer to meet customerdemand After two puNic cpen ime, in the 9nng of IWl, a naae was sehrtal for the CnMalM 34%V line, and oght+f-way procuxment is under way The hne w11! join two edsting MMY bnes which go into Cmneron and Wilbcy counti6 in the f@ Grande Valley area A new 1%kV hne to be bmh hv CM and partia!)y owed by the PuNic I tilibe> P,aard of Bmwtwillnill be compkkd la IW1 This htw will tie cpl l5.whiry liipway substation and CPE's Matamms substatun This hne will alks greater oppnunity for areasd peer tramfer beturn CPL and CFE for enhamd rdiability and economics.

.' COMMITMENT TO THE COMMUNITY

' conomic luckyment took on ra chai! cages in 1W1 Emphash was plaad D,g g

en busins dewlopnxnt and oc our sptems of(ducation, gmanment and i

, ' transportation Central Pmer and Ught Company through its comnntment to -

PB eammic dedpmen!Js helping South Ten; prepart for dopportunida of

- the North American Fat Trade Aerwnwnt ad the wurid marketplace.

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' outh Texas is poisd brputh.

S Nationwi !e txnds snow oudness shiPing to the south lhe fnt Trade Agwement expskd to

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- he executed in lWhill enhance budact.s betwen the United Suis, Mcico and Can:da Mexim borderdPL) senke temtory on the south and wst A%tionally, the area we se is bkwd with a >oung and gmwing sork for2, adequate Lud abundant nantral ruourcs and rehaNe and abundant ekttric suppbs

. Ikreer, the work force is weak in adequate rademic and technicd sb!h bc tiv mw markqh. Shagenlag thre skiihidi determinnhether our communitia can cipitahze on these trendsJ

our senice tenitory is iad with some of die pxwt schod district < in the nadon and a -

stageringIlliteracy rate. (for exampk, Enge Ps,1bnnutd Phart-SanJuan Alann ha e hun fcited as among the liw pmest in the U.Sj lhe Company has focad its e!1 orts on trahung and raotraung out youth.

Tids year, CPL is smsoring an cducadon summi; to build suppe for increasing whnical L trsring to capitalire on the Frm Trade Agreement CPL cantinues to be a sundird beater in uJult

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. literacy efforts, supplying not ordy financing but :ta acnw whuner force. in 1W 1, CPL contn!v y

. uted $20#00 to literxycouncih in the Company's four regkmso CPL ha3 ! ctg spnsomi ditssmom programs that deliver messages cl ekstnad ufety and wise J a. m A

energy use. In 1%I, the Company syntsond mouvauonabpder Kwin Saurden to reach hidv

' risk smden:s in junior high ard mMe schooh. Lun6as, pnalyzed in a grain elector eqdo-W sion, ddNers a messge abut womt throuts adversi:y As he tells ahint his succm in pandympic sports, he motivates tie swdents !60y in scbent Education is but one of the Company's emuorrudewkpment dhts lof retncun' dewlop-p

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take advantage of the Fn'e Trade Agreement. The $6 milhon latdo Solidant; lindge wm gened to 031ambia, Mico, in the sununct. Amther bndge is bemg constmcted math of itrhngen, and yet anothcr isitingplannalforImda 4 hile the Free Trade Agrwnwnt is anticipated to enhxice the ana economy itdentfib could bokmid dmu by lack of a strong highway sptem and a Irk of enough Custmm Senice employets To impmve coonhnation, CPL contnbutts to the taxdcvCeqius Chnxtj infonnation Cenkt in Monteney, Mexico, and b an active participant in tie IM r Trade Alhance The Compray aho intssMing with the Rio Grande Vaucy hgional Tnu spetauon M:n and is engapng in efiotts to stop endian ci the haracoastd Canal in onier to enhance this uta!

trampoMJon (Kility.

To awist new buWness throughout its senice ama, tne Ce>mpan) m M1 esta hed :: Certifad thekpment Oqt (CDO The CDC is acti4 invohulin the prtes of securing long-ftmt low.

inten;st financmg for small bttsinem dut want to expand. Thi> fmancing ogion would not be

vaibble for most sniall busimws in Sou'h Texas wthout CPI!s efforts ThmtTortulo not immeduk?y inmslate luta ps, but owr the long tenu they strengthen our economic outhntJ 4here have we plaod Inalitional bminas recruument effort 9 Right la the handa he p#e let aNe to dl dwir community - the communitv lea iers. l:nde* CP!fs nm econmuic detekpment pmgram, die Company works with willmpnmmunities to estabbsh straegic planning initiatives. hting with cry managm and commumry kadm, CPL bdps the comma.

nity assess !ts present economic dewkpuent statuund where it ha,io be to prmpa One sncrxss story invohrs Inianz Knh ar which nkratal in the snull cmmwaity of -

bio d, outskk R2)mondulle, as Wil!xy Apparel Qt he hmn strq was featured in miother new economic de@puent tool CPLpmudes, & Smth Traw Rcrix This quanerly pubhcation contains sntss storia and new ideas for business and community k aden.

Not all the eturxmic m ef the last year was rmy.

July 1991 prmd to W the month of adoning for Ottv Naval Air Statico at Benilk. Chue was one of 34 mibtary facihties nathmadodected to be cirud in repxtw to militan budget

- cus its eksun' will cane a direct economic hul N namon and 3 59 3nbs m ike County.

With CPUs assitoce. Boni!!e raklents a:e organizing their etiarts in ensax that an mdastry Nth 5tmng ecctWmic impxt wdl mcVe into die ama and will Kcupi the Cha facihtks Naval Air Station-Kingville had bwa targetal for ckoum Aggnwive pmmotion (iits training lxihty and a st=ng shuw of c smunity sugert hdpd kap it alkat

-The federal r.kisurt p!an was a ksing in dngnise for Natal con indeside, which had ben

under a inh 3try cortstwtbn moratorium sbcepuu ra t?XL hnhiing up six contrxts ndued at

$193 milhon The rche of the ekmre p!n hft4 the mratorium. pnwiding $21 'miihon to finish the buddirgpmgram.

M this p> int, approximately 150 grok ax cuurntly st&nd at Naval Station ingksuk, pitparing lar the a; dol cl 6e Navy's higlvtwh mine utfm lhet in the hte IcGA Twenty-two mine supers wi!ile maintahxd by L500 (mmreith an enimated economic impri of $ 13 millkm annual: yea first ship will arme in surmner 17/1

- Oihmd agricuhtire are mainstays of the Twh Tens eaawrgd both are recowring wdl The famy of drilbg actiuty in the Aesiin Chalk has calmcd, although dw horizoma} drilling

technWxs intralucal there are keging 'he indtstnwa Agncultural dforts in the Rio Grande Valky are recupnting aher radEcant inm. in dy; WR The numler of acns phmtui m citms l

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< e fruits hr inciend to appmximatdy 1 $M in 1991, with mmt famm plantmq the hanher Rio Red grapefruit

Cottan cnp exedled aher ade9uate rains % hervas thar years of drought had nduced pnxices )idds to about half a b.de gv acte, two-bale-per acre unitrigaud cotton wu not uncommon in 1991. Tt xas' 61 milbon bale en p u the state's largtst since 19i9 and aamunkd for35 ptcent of the nation's hanot

.To enhect tourism and to entice Wmter Texans ta linger, the Company pnxiuctd a vrio of six traml bmchuns titkd "Somh Taas TwDay Toun " Available at area visitor caten, chamkrs of conmerce and CPL busmess o$ces, the toun fxw on ppolar attracuons, hke the Texas State Aquarium and the Corpus Christi Greyhotmd Raatrack, and on kwr-known seasonal hishghts and historical sita SERVING THE CUSTOMER REllABLY G plm pal will strengthen our Plh future hokh many regulatory chalk >ngts power wlnilmg, tegeneration and independent power pnduction. Cusumt sathfaction - a key bushwss

'riss.

A customer sunty in Nmember 1991 nwaH where CPL was meeting custonwr expectations - and s here it was falhng sha L One sneasure ohhc Contpany's image among customers is overall fammbihty,1hars the basic *thumin up" or " thumiis dog opinion customers have of CPL Qtstomer favorabihty hvard CPL rakd mud) higher than the national average and the awrage of other utilities in the Southmst

%hile our image has successfully weathered the rate inaeans, there is r ~ room for impnne-ment The Company wdl use the sunty infomiation to bohter its p>sition in a number of -

customer semceann

. One of the improumants coming l_n 1992 concems the (dephone senice cenkt. Qistomers rate CPL's tdephone contact f70raMy - 1,ut not ivrfect Sixty-one gicent say it's easy to rexh

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us by phone, but only 49 percent say its easy to get their quedons anskad or pmblems schrd by phone. Next year, the phone center will add a customer-directed sm ice hse ca! hog with simple nqtasts wm be able to d al in their accoimt numht and access balance infonnadon. due dates i

and kilowatt hour use. thing this nthnology will free cumner sesice repnsentatnu to handle the morecomplex customer requestt MARKETINGTHAT PROVIDES SOLUTIONS' n 1990, Marketing nxlesigned its metc to one of providing solutions With base 4 Wg#. rates remaimng comtant under the STP rat: cas' settlem t

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% : tremendous potential to affect CPL's future operations.

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'q These ttthnologies use ekttricity to manufacture or (nunfonn a product, sudi as bonding paint :

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. or constructing silicon chips Many mid-sind btninesses in our service area are regaining their :

com;ptitive edge by adding electmtechnologies r.o make their operations more energy efficient and

pmductive, CPL pmvido assistance fnxn first analysis to final irtstallation of the Jekttmtechnology_

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so inade a st.rong SOwik in cornnicNi.il h aung e0 orts and fBid'ntial le QClpul,v ammetiootuch d this succu can be cndad o a mm nuphasis on bundmg raanonships withur customers in l?Miarteting devehpal a enntact pmgram with top architwts and enghwrs in the ana we sentlhe progtmn giws us an otpdunity tu kam about new proitets and to pn> mote ite e^.ectric a&anuge.

Ughung saks wte chaHenging as twidential ctotomen sto;Titd buptg and starttd dxon-ntTtiUR security lights la riduCe Nielt itNIY increWd CleCtDC bdh SMtWr,05 dhghi Edes utR st ong throughout M1 and pushd ka* bghting back to a putne trend by year's end RECOGNIZING EMPLOYEE INVOLVEMENT he uncommilitd emp age, who amstd at his dok, toutitett widgets and left at l

MJ fn five h ts gone the way of the M hour work wttk xd the fiw-cent cup of cdht Lw.sg[i@ Teday's business emironment demands nupbyts Wk f faAr and more effwthdy Whik Cet has aba)An bks +d with gud aa emptws. naays comme emimnmmt requms a more paneinam m3n:wement style, Our cotlwate cuhure has bc tun to chang 11 win take several wars to mow cpl ls culture to its afhnnathy new dmttba Abag the wa) b a comnutment to tnun every managenwnt employee in Grid twhniques Gndi tenets are to get a!!

emp!oyet% inWdVtd Ild giw them the nyomibdig and amhonty to sohr the pn&ms thes face in their day taday work. As emplop+s study and uw Grid mannement techniques, there is a cornsponding enyhvis on teambuilding and group input. Their managers are ca&d epin to do mot dIJn Sup'niv?; they mMst be leadeTS Grid. Gridworks and frout une i.eadaship courses teach CPltrs the sulk, pnnaphs and techniquts for empowemien; in M 1, Cpt waneml CWs commitment tunodog emplogo throughout the organizauon as an in1portant part of nianagement dewhoment. To bring con.

linuity 10 these transitions, CPL and the other C$W operating Companies are WMing to a m: bier curriculum, bldlt on a foWldauon of Gnd courxs. Tms m.tster, matdxkumeuhun wi!l make sum empkaw effxts actuss the mtet n are basd cio the same vahn and sinss the sanw dmuts a To sunty the effNis of MDpowemient, CPh Rod the odter CsW cOmpaides conducted an Employee Attitude Suncy in Ml. It revealed p%iUw perceptions of traming. beneh. safety and

. the company's commit ment to teantwork.

Empbyee ideas are being heard. !n MI, CPL President and rE0 Bob Carey handed out a one-page form and asked employees to " Talk to Bob ' and idl him what they hkd tut, hked least aM whauhev would chang about the Company. The nspome was mersbehning. a> hundads of ideas for improdng operations fknied in fmm emp! opes As the Compam becomes more empowen.4 upurd communWtion is expected to fhv as easdy as downuni commumcation

^

AN ANNIVERSARY NOTE ag n,s pan. a htux yneauon a CPiep!e win akbrae their cumpany s k

150thanniversari We bdiew it will be said then, as we can say now, that the 9

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pxt bdonged to peop!c of vision who left a s'mng kgacy of succm Thmugh A

y floods, hurricanes, wars and energy crises, CPL has stomi the test of time with 3

character and a continumg commitment to our cteaomm, employees.

communities and sharehokkn From them orig;ns, C?t. has emerged strong, efhcient an! pnpa14.

We are a stronger Company tahy htause of our pac. The strenpits and phihopiss we h;ne

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dew!oped will sene CPL wdl through the next 75 yeas.

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T 6

.FINANCIALREJ1EW i REPORYO,F M5NIGEhlENT!

. t Otanapned is nsgeitde is t!e paltaramin, integ*ity and chectnity d the finardi statements d Central Peer.

' md light Conpany as Wii as $1 o6er hfamatim hotained in its Amma! Report The fmancial t.tatemend hasiten s

c prepired in wnformity with pnerally acupkd accotmting pswipistppiksi on a onohtml bgs and, in wne cases, i

srt&ct araounts based on tle thst stimatp md pdgneis of nunagement. gking due mmkleration to trnaeriahty, i Fmahclal infamiation contained ebewhere in this Annual Report is comistent wit!) that in the fmancial statementt The Compimy maintains an adequate syvem;of intemat omtroh to proside reavmable asiura;ce that in.nsa-tions are -

LexecMm xcmdance withmanagement's authorintion,. that Imancial smenens are prepaad in accordance with/

)

igenerall{ accepted accounting prinopla ard that the assets of the Canpanpre pngwly sakyuanled h spleut of l Internal contmls is documental evaluated and tested 1 the Compang internal auditors on d continuing basis. Due 16 3

7.1%

5

the inherent limitations of the effectheness ofintmul corarA no intemal contmbptem can pnaide abwlutmurarm C

t that ewrs ext Irnyuhrities will not occur. llamer, manamment erie to maintain a balance rtegnizing that the taa

- of such a sptem should not exceed the benef;ts deriwd No material intemal contml waknesses nave lun wportal 10'

+

1maruyiementJ EArthur'Arkldnen & Gi was engaged td atidit the financial statanent< of the Company anNx in itport thmon hir atdit was.conduckxt in accorimte wth premllyfacceptal audinng standards Sudutmxlards n:qttire an enminauon M '

selects) transactiom and other pn44au sufficient to proude n asonable assuran:c that the financiahtateminu an: noi misleading snd do not contain rnacrial emn ne Ikpott of Indeyndent isbhc Accountants de not hmit $r rtym2 sibihty of managment for information contained in the fmanci;d statenmus mid ekewhert in the Armual Re;mrt '

c_

f) ab 4k l

= RdenR CEre" P. Ridwit bubkn

. tudlP Ninm'

< PrmimimiClshwtx064i' YkJ PinenPug 04:tralier ~

C

, 4

,t

< REPORT 0FAUDyC0y1JTKF m

iTlh iI44Umbtd0fI alkhDirectorS$!fLmpCm!Of sitOdbidedbC105 70cmembenof the /ddit 5 Chniulttee an Rolsrt A. McAlle'nichainnanifin LlYtenon, Rhben M Carcia,it tre Richards;Pete MoraleiJr And Sc dayd NeallJt %e Committee held two rnectinitEuring 1991b W

' j The Committee snew the Company) fsancial rejertmg procas 6n behalf of the ikett of Directors.The Commithy.

c

( discusses with; the intemil auditors and the hdependent public atwuntants the overalhcope and specific plans for their s l

wpective audi!s;The Committe also dirms the Company's financial statementund the adnpey of it% mal contmli 3 %e Committee meeb iegtdarlpith the Compwy) Intemal audtors ad indeperwient public :mdmtants to discus the i

[resulaof theiradditttimirevaluat6nsdintemalcsnm!Qand tipoterallquahty of theGynparpimacialRTionins

>The meetings are designed to facilitate any private communic 2 tion with the Comniittee doited by the interhal audits or 6 1

%iependent nuhlic' accountants!

~'^' '

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Cl N"lR \\l h MI R WD I LH1 ( o\\il%NY i

Statements OfIncome

}

1991 l-m 1*9

). For the bn. imded thenhcr 31 ohuawmN Electric 0:< rating Reverme-

, Residential 6 435,860 8370,f /,3 A312.G Commercial 313.137 S 5.322 2M N 1 Ind ' %I 221,885 201,vil 18 t Kl Sales for resale 48,83' 37,61S 47lGi

. (hhet 18,714 11.Mi E208 1,098.7 948.52o Kww 111HRF OPi: lull \\G HF.\\ 1.M 13

( \\t11110% Of IM)ll\\lN Operating Eximnws and ~l.am 1M Fuel 303,128 300 194 319/21 Purchard ewer 15,011 14,5 6 t h/M l

N Other operating 196,893-226.378 1F2,528 g'

' QQ}

M:nntenance 68.092 61fe3 611 G

.h.

M Depreciation and amortintian 127,311 11BNi 113,738 k 1[

Deferred STP rosts (97A70 )

(121.573) 800 +

fF+

W : y ',M;d Taws other than Federalincome 62,153 58,313 43,196 f;!d 2 ' 5; (4)g l;m Federalincome taxew 75,985 9~,2Et 02.275 p, ;p(m '. -

Mg1 j' E 849,233 786.080 674,9 3

[N(h Operatuig income 249,497 162,4 la Ifil.iui O

1 T

'9

(

M

? h Other income and Oeductions Allowance for equity 6mds umi during concniction

],06M 27,203 24.923 Mirror CWIP liabi!!!y amortiution 96,671

~ /r.,j r

Defened SFP canying costs 183,078 M.5W g

g Other 2,522 (1,667 :

3 01 gry W

100,261 210,591 112,%I onnx 9,y Income Before luterest Ch /ger 319,758 373.034 27l.570 MHS tor k1Mu Kf INUt MRt u

-interest Charges y

Interest on long tenn debt 124,987 126, % 4 129 535 umm

- Interest on shoMerm debt and other 8,621 15.434 11422 Ny Miowance for borrowed funds u ed during constnxtion (1,036) 26,146 -

li S.1M )

gnidsnu s

132,552 IM.lfsl 1 & '89 Netincome.

217,206 20lKO 147,781 Preferred Stock Dividends 1 9,8-14 23,528 24,558 Net income far Common Stock

$ 197.362 S181.342

$111.223 Statements Of Retained Earnings for the Years I nded Dewmber 31 1991 1980 1%

nhi.usandy Retained Earnings at Beginning of Year 8 875,521 8791.179

$720.956 Net Income fur Commen Stock 197,3fi2 181. W

'93J 23 Deduct: Conunon Stock Dividends 215,000 100 # o 50,000 Preferred Stock Redemption Costs 3,224 Retained Earnings at End of Year 8 854,6".9 8875,921 6794.179

==

. Tbc actompanying Mies to rimincha cum mts are an interni part ofin., waremems.

CENTRAL l' owl'R ANiiiJGirl Co\\tl ANT j

i Balance Sheets i

l l

A$ of IWemier 31 -

Jim) iW (thoustDdd ASSFTS-Eh ctrie Utihty PLu,e Woductioit 83,401,315

$3.377,ful Transnussion 331.361 320,719 ELECTRIC LTILITY FI.BT mstribution 681,905 612,ycs I

(.\\tll))ONS OF DOlitRS)

General 210,449 207,441 Construction work in prognss 63,699 56.917 E,%] Ny(

. Nuc lear fuel 136,87'7-132,972 4000J. p 'p*' p 3 V?

4.H30,000 4,738,187

] ' * /[

Im, Accumulated Depreciation 1,028,713 892.twi

. y @C sLp.

3,801,893 3A15jnt g.4 Q

%);

m

(.

$U Current Assets g~ - --

_y) 1 Cash and temperary cash investruents 3,152' 4,877 4

4-Accounts receivable 13,881 20.3M m

-a JL; Materials and supplies, at average cost 56,331 RIM 9

[

- Fuelinventory, at average cost 20,122 27lN7

, 'j -

10 F M,,

^

.Prepements and other 3,173 6.356 i

102,659

.119,988 -

r i

l 17)! l@M 1959 Deferred Cha rges and Other Assets y

Deferred S P costs -

491.054 491,7N :

MGFAR Fill

- Other 32,093 25,000 NT 523,147 516,724 OASTRLCrlo\\ %0Rh h PkmPt's 84,427,699

$4AA?,213 r

%'r 9-l CfM K \\l.

I

[

~ A6 acanmeanying e a a to Grancial st5emeras are a integ al, art of ttw3e meements DISTRIBl T10N V7 TR\\\\Milwl0N Mnv N:"

$ kb 4

1 3

l

).

iW 3 g-w ljakhfikketr.ber 31 -.

1991-

!W)

(thousands) 4

}

d-j[ CAPrtALTZATION AND llAllllIrlis.

y Capiiabation e T Contmon smck, S25 par value, authorim! 12/M hhares, M _ issued and outstambng 6,755,535 shares -

$ 168.888 S 16MM

> Paldin capital.-

405,000 403.fo)

(.APITAll/A.ll0N Rt1ained eartungs 851,659 875.521 g

!: _, ;,TotalConymon Stock Equity 1 rt211,5t?

1A49AN IU0

?i? 8:d - Q% RW

. Preferred stock -

y3-M

.I "

i ' ' h [j.,

Not subject to mandatory miemption '

250,351 25'U51 90 l @} 'M.

SubM to mandatory redemption -

38,800 44,053 N

O Ilong term debt '

1,350.854-1,346,587

~

fotdC. ApitaNzatihn ~

3,068,552 9,0N,4to 70 Q [.a[OR t -:

~

49~

w c Current liabilities

,, g~ M, W-A (4

.a.

4

- Lonetenn debtdde within twehr monits 405 378 W fWcW

s. o 6.. F

~ '

r.- Ad.vancesfrom.at' filiates 62,148 40.025 M

' Accouna payable 54,541 47,370

- %w. y w e

4 lt i

'pO"wp/,IW$ _

40 O: Fuel refund due customers -

3.233-8231 u e

.y j Acen:ed taxes ;

39,389 12,321

g

]

yQ

Cwtorr dQasits

~ 0,920 9.116

-pi.

'Q 25ixrued interest !

08,954 27,314 20 g, J q{,

'Other ?

I8,864'

'4,529 W;Mn lb

?

.,m 207t54; 169X e

> s r'f M g

I.~

i/Dderred Credits 7

/

....m.

1

' i locome thes 048,051 611233 IW1 1940 1989 tinvestment in crwtits 175,965

_181,7f4 9

10ther;.

327,674" 423,894 mw n W Dun E

1,151,693 1,221 m 3 yy y.

4

~$4,427,099

$4A82,213 rRutERt10.lt o Myy LO\\tw A Nhn f Qt ID

v. khe actnmpanprog mAes to limncial 5 tatenwms are an imeant part of thew st,urownts s

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, u n NIKV l'i at R BD 1.";in ( mu'nY Statements Of Cash Fkm/s I et the %n n Aca M inkt ;u otol w

19m i L,a# hi OPl:ltNI1NG N.'1(Villt.S

% 1 i na.rw

'i217,206

' ' 14 c@

41 0 % )

Non cash arms !ndudnl:.n %1)ncunx I

Depr n",a oo m) wrtwxi.m

!18,012 n C

Un F.

M.tror CW Ptabt!!b,ynoninth n UM.67t) 4 Ddc rted k woie tam anji.ne-4;oent u.x u nht s ilo,990 9

'B ta)?!

5

{

g g

an

}ICIt Tll'.j p dfM tt hth (2 52.7 k I' )

( 5' O.'dd l j

Chun:enin Awts vuf ihhtJjt1 Acu.onts t ecriabir 12,173 O tt (14.11 9 l'url rotund duc dNuiner s (5,001)

.NJ.M i21,%ll L.

l'oei nn entury 1.}73 1,Vi t0.75M Al ouhly pa) ahl" 7,171 ti!W 17dN Accrued 1on 17,0 @

ii.'t h l,EC a

Oiher (12,211) 19fM (11,129) 319,1041 J22,9M

!r? 377 thYiNTING At.Ti\\ It'thS Corm.w,1 ton c.t;p ruliture:

(98,199I tvi@)

(101 Rt 1)

/

Allowance l'ar tot runed f t.uds med ('ari% c r N ruct es (1,03D)

@N 05Ph (99,255)

(W.fv; U t i l6.7!U)

I"INANCING AlTlVITlIM IV.w rea inim issuanw of 1 iny torrn dcht SiO N 150.t w IWlir t H tt"Il Of I% let1D deh (l68)

O,V )

() 1.149 )

Reacquisitian of lang wrm debt (21f,i 07,M 3 i O 'io,3E!)

d

,f hettronynt u pte'i n ed s'uk (7,050) d, i2?i) t

) 74t-Prom 6 frum imlheinn mArol bor<.is held in i Chmgt in shnrMenn debl 2i,523 (5,'u t )

MW Papaent of diddenh (2:f 5,674 )

02:1,2tN (71,S7Q (221,570) 02e.11n) 01731)

NEl' C1LANGE !N (751 AN D CAsli LQIf VAI ENN (h72M 3Au G2.) SM CASil AND Chil EytiiVA11N'IS AT liittNWING OF YEAlt 4.877 1.n3 5to) 4 CASil AND CAS71 EQUIVAEN1Y, AT ENI)OF YEM 5

3.42 3 4.01

$ 1 x'9 man _ __ _

uvem m wamma Y

e Z.

In;trem PeH i ess.'onouns Opha%d

$ 127.,7:10 31raccia i,127,N income Tun Pa;d

?;5,733 HJm; Wi.yn)

..w.mewarnan _.

t 1% +.w yef a wet ic, tir..rdo mwe :

ar. inke < prt.f the w um rru.s lh

W u- - - - - - - - - - - - - - - - -- - - - - -, - - - - -, _. _ _. _,. - _,,, - -, _ _,. _ _,., _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _,, _, __

m b,

h q

e StMements Of Capitalization

' n 1

i

~I If b T (li'I a b8 iMue%tndt)

, k'OMhtON %1tK2 dWl'tY s l etti,fi17 bl.ib,e

. Pi&l W1EMIOW

' Cwmhe re AIM Itir Yalst. Auhinhal 3A05Jm %es Q..

humbey 44 bhuts fuirent

Mr)<w;

Outstamhug flavlemptim Prin TN61 hubget to Mand sk<y IWemptMt W l4(6%/

PIOfsyi hi/S 75 10,000 10, 4 6

42W'

' 75,t'M K,17p 7,330 7,W30

,2OM0 PJl.(D 26/MbQ 0$J W 7.1M

(

[ E720 SI,W1,'

M?.W

'54,090 59JO)

• Aactkm Mumt M.vkey '

750,MO

- tm.iu 73,000

'w m sd.' Cat kricii A ofi#n 100(0 12,500 42fe -

Aud',on Seties 11 42 Mite iMJm C,590 r$m twrure Owenm C1.149) 0.149) 250,351 2$1.351 Nsd to'MSdrimy istempth n 1

3 gnost 3913 W 104 76 39,42,1 d4/5 hmmtI4Nnse:

(D251 W/2!

O/00)

%. air.cathd liettemplun Gwts J

38,JDO 44.0 %

,$4)NkmO1 D*rNT qrf metre anxha

. j' Stf6s j,67e% ttuchnorny l. )nt t

26,000 M.tm M

Mje10'4 K, Def$.thw kminy 1,37M -

!!5,000.

&XO

'iii

' Mdei MMdue 14ovember h ?>G 36/X)U

.% M

_ (Kesirs(?(due felinrar U?ls!

46,000 46Mio

' DSerks Nd%Edddjsb L2W4 40,000 46/w

-&riet 0,8 %%Vis Octcht li!(Of 77,000-

. 75.M c Serliiy,8 M.due & pimber 1,2M =

VB,000 -

45f Fn --

r

-(fWT,7 %kdusikcemtwr L\\ 201t ;

'111.700 lil,7id

81,70tr 81Xi 1 9%s UfnQve(My iJ010 d

AisiesT'I,3 '%% due (by),199k 200,0'XI POUm 4

, Jeried 9 wt dus mneuben, IR 109,004 M9tw l & tid.YJ%hfue,luneh WM4 :

136,090

IMuxM

%dn K 9 W5Mue'Dethniber 1490_

iUU,0 M IS)#W 2

. Series A8L 7 YA dub Mttrdi!JW

. 30 00') -

LOAN

^

1 M; itstabwat Sales Agreemst6 ibilution Contrd Nndt

%AiWe June I, C(nl '

9,145 MD -

7

' j 6."d[Ns,tratwr:1,20W.

344!35-34235-

_3 5 !dWas&ptembe 15,2014

6. 00

A310 6 % % O de O As15,=to 139,209-ano.

a awaxuece s mc.

no,cco we

-j ' Ncd41jy@te, n%% due Dea *.cr n, mSJ

-; 843 :

1.tc2 WJr,an>ord.xc3 D' ohnt :

07428)

OMzu ^

=

w

'; IUpjuwMedOMAof Aactruired Debt -

fyC,121,)

03ffrt)

-_i,<hm I(350 M4 tl'46M7 o

E10TAL CAPtfALt2Alli>N

$3,0e8452

1. 195,@

'A N

.y

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j 6

['

3

$N

^ l ql [7 I

+

-a. Mdh N n o

( l Vl RAI 'WA l K W,2 llhH l L (IMIW N'otes To Financial Statements

l. SUMERY OF ENilICWI A'XOt NTING l'OlKilh Ecm i o :.m ic c

.eo: i

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,H

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<m U<

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• h u 1%p,

iWh rader pe; p'jn' h il y 's in P,(mte nn v 6 Iv *n ou;j ; =j trV c l p n d A.f M ;<

l m oumng brr.us <.nm m th-

.h ra:rs om the i 4. i G E r.nb n s cxd hom, : o yWv dee < " o, nn; ce pud ta a cWmM tuni an- ~ u-- - - ~ ~ ~ ~. >- _

a gd& c h.% and me w N tcd r duc2:J H t im o m H lhe n a d nu. lev hid n urmzei n M naw nmi m a w d f w s e e l it : s ud a. uuh 1.>

4

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J feUb M [M M bPhrbl d(Lsr I

ym H* ().iG 'sjily T i( f ( r, b.tf $ (16 lT1 f(0.)b a \\ d b.g'..) ( t !TQh tf f ' I f. I f d, ' fd,% ) bi !.f k f r! ( t h.% PCD fi,i!

m enuc3 bJ!ed ar ! tud ctgu m nd i, rw I a e a i alJ i a tu or a reb u ti rn cnv wn 3 umeedm emn n xams nrrd or k fc'und &, m, a s as ppgn.at m es u m s W fw.i re m

nap 4c :o cuows snd w n m en s nov Oc bM t > tua i ncn s w h.s Com e.bn ;pp M he ComNm 3..b ih aw A rn twde, m u nu a ta 1M f r O !nc a w!a *N onrn! # iurt of

[I 3I h !

C'd h i]h7liYl k k[' k k Dektml $TP Ona In aau'd.wr u To c En :" s un mJen tb Qu pq Mered p n esa for sTP Y

Umts 1 and 2 i% urred mMpcm to be, un wical oiwon d.m ud iM ru ! adm de esmtebw h;came c!kttist The dricrred plJni 0% h m dwd mu dc M d U ; p! m! n 0: Icd->V mmnh bt Note h Inbim e >J Reg 4q Need:: n for fvicr dwumn W da Mc cd w, ena in

._e.

N

_am_-___.---__u_____.m.

2.___-

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.__-____.__.-.___m

.._._.__i_____

mm___

-a_____._.___.A____

__u

a mt 9/ uf thar nwths ut km Actudgk inrpnry wh imecmeio and.uhames to thh tes are umdtwd caeqduk h Sett Act'Gunting $tathlafdt. I1 february 1992,1hc hn.dnd AMuunkny %nshtd6 IkuAlil A5/O h 0cd Nfemeul 9'financW Am mthng bndtsd> tSFAu M llR A;enunut4 'at inmne inn. u hki supenoks siMa % 1he diecwe dAe h SFAN So 1N mJ 6e due tha the Orrgmy will e de starxbrd n M3 M A$ No W setpbrs

. a th:au,e in the amurmg mi tepntbg for (nucne t nes hum,i defard nwd4d 0, a hdur appror h 'ihe

expeded durge to se hatna sheet wi1 rtwh m <haugn to the aaumbed defened trmne ta hhhty,.md

< etehsh a reguban (Mpnotml a reguteniy :st. M;rupptent Ithnts the aJ9k m 4 thh endnd v iU tvg har a amenal c!Ttt: on Ote redituf gru6nm 4.1%k DJB hsued sfAs Mt 1% uhkh nubh&uianunthpnd trrecteustuds f'r precurenwn

{

L i i

4 Repkyenftet they ru!re T!us tww sundad rap!rn Out :he;yotal u of dee berwfas he unwd during dir l pere d unphv3co rtMer smke to quabf) f~ benefit, Thew tusts wLA are runtm!y mopird en a mw3w p bab, mt dkd O 5 mibt, H 1 mht and $11inlim Ist M1, M and FM [k Gimpany cyuts to

@pletsnt Oc nvw st.nkn1 etTo tu pmary 1, PM3 Sud pn anncipned dup % the gaent pentrie: recut Nnk pbnk the peitmirny Ntm:te e' the Amihulaed Patreineteent ikfe Obhptsin (AP60hewnd in eccotJa e wth tir tww crwhtd is uvuted to

he 9ppr@mtdy N m0han. The tangim odgmen O';c djiertwe heeca the APho atd di far i,due ehav m itidt JI lhe dJ!c $fh5 M I(0 h 3thpled) hiG equW thr AFB 0 m dr year of tmpbtnnn The twn&n

((1/hg.tliO3 (UUki be tenym/nl fuy in tk ) tat d irgder'er.ULO 11%71 of lInu f t/cd OVet the _ttfiubiin), Wn kr 2 onalof acmr prtiopnn.,ur 20)em Yne Cepeny he not pt dermhed whh ine18d ui4 k ud if the . new sombrd is adoped mth tk autki;wd plan due, nunsp ;c ycu amtwinn of the tennn - s_Aptsyn, annual peerdrethne bendt mes wmiid k appmbunt na nuijon. Mugewrc hhn n draht uf y ituabdopion mJd tv diangnhignincandy by danges b heahh cue msg work fr<m d.n paphh ut inded aws betwern nw and 1M The Compry wiD be w-kinpptrgq terment Om rvy nndge de icapn t n the '1esuht of opennons Redasdfkation. Certun fhumid wecrot hes for p 'in ye.n hac hun redMed to adatm to the WI jwenutirn t = _u a n __ _. _ _ _.. _ __

O N UW l'tm uMM UMH u AHW dg0leS[,0l's.inancial Statements

2. IIDFRAL INCOME TANFA neuw s im. 6u e ne,,

N., ut : (w v. e : 4 , -watem ms, m

• 44 ild W nic e L\\n s KLi.mA-(. a p ':*

1991 p>i om s 3 2 f'h f j' ( g 0 i 1j-r 9(f' 4 b 1 4 sus: s. ic. m ik ! W' Iq w - e, nn a, es 13 *J 421 I f c,, ' st d a o, u m m. n:o , o a

h. ng n! A N,

1. 1aM t r. It !, 4. in,

( 1.d4) t, e,. I 5 s. i VI 9 h e-

e. 3 M9 h

e W n r

• xa *. tu ild W is
• t r '.. t

%""1 n w 1 u, *, Ihi' ! in. uit :J M fid s c n,., un m y: w n-w wn u {kl%)) o t 15: um s o: h b h l ta t ra t hu r.rd t h z a (a og il/MI DIS:d (l{ } 'I' 1 5 la am + $* 4,M9 ,o6' 340 a -- = w.mam am-s, lOld iTh,' AIK Id\\D i,f/f;"f ffi 9 Il Ch dPb (t M u'ikit M.} ki) dpj b VT O y/!..i di f G,!! lY IQ. fth ' ([, D o % Ii) ffM ( L'lK' Mort uxes. Re c.pn, th the Meew re n R ; s. mi v.- m .. #..o m w I.11 M (O;} "',t.):% MN.N>2

• d D h !!' l 'f l Y, f.U 41 f, n.,,,,

d ilk.' r7s. ( 6%) 1R]) !4 21,4 +3 f ' A. I4 : -,' ; m ) oi wnem w wn im n o no 4.rra( O ute.'; ( ? @.D ( t t'.9 .t ( P! t*f Ikkl2 f,k) [k 'k $(( ) + $~pn

n

<ma ut un m ] i-=====rwe Imn:ncm tn untt ma dan:e3 m p:br pws se aCd a ;rwme owr da :r.c a h rebwd ;wpemes ch lhWfd kT.il @i). I ic CVM2 JIM.' fi(1 MC1! UI INOP c l.R InNN diI'TlIKf.$ IN P lMd d'#"?.\\liMOMlff(Ch i I1Al fld Ittf} p1(4idUd.Uhf 100 fC!.ited i.M ('dr(f Oflp JUtV(s)10 JgWaiol.hr)[ h l5 f ahg d) al d N f..!hr:lt - ~ i 3,1.ONG/IERM I)Elff I HLi rswn. a:ncnded and.~;;ph:e erded. m urem to : :n er,ij:e h eds iwued by 1 x D c;u l Dr D dlgd", t l m:tttaes,i dirnt inq reprpo. b.t c: A+r.'u'h a rice:n. uuht, p!an: i b) - ~.

J. M ~ y 7 m er m a - - - - - "-- - > -~ - - - ~ - - - - ~ ~ ym gp f r y D,-h [a p' ,/

hj j

5 qp 4 s Jils prmumnnd rexqub&tsrats d t;aght keetm debt are maad in kquim (kbt un dd luka ylngand are twinpnwnited set iQ 10 M years y V ANNI.13 5teqptsatttsf%e;nnualinkitig fo# pepiremers are genody 1% o truvetgage hunth Msatingl These requaemero rn:w te utehed by decappkauon d mt experames tur londahk popeny irun -l .tmerant equd th !@id dunnadhequirewn:s Serio T. U nnd A$ hN htpge Iknh tb rd lute ekinf ,, furrJ n q0irjrrentnime tbey are cdbtud f4palhgibri contrd Mndr ' vat thunberd!. lWh'the arv:tui sirung rund r:1pi emero, 6aare a martas, sJ the annut iSpesite 7 ptNuitses irrid$,ng hinkhg fdd fyquireme$ d Espm1 (khi are Whna - l Ancual WLing. Aismal Ag.egat.; . Fund RegtdrwatC l Alste ' 4 + 4 4gg c x3 g

gg-y*

3g /,2W. . idel. 3 j @.. iltd l '_' 9 -3 6 aW l t@, ' WLO) - tVW , Wdi 4 [l N4 s a W . jp pA gn

w n -

a ' p;; sg v 1 s [p t DWkknas, ne onrpmy) mmgage itdemtn, ca mued and wp#un the pgmem Morimun scd didlehddr Dewmber 31/ !WL $D4 milhon of nmied vandnp hre naiM4 br. 31Mprga Ma4.diviildaditoitjparent conpanylCW

• m s

2-Y _f g 'k_PREFERR2DhTOClO ~ a* 14 snndsk tl$e Sepsy) $4mih scuan gekned st:as we adsdd enfW bysib.msiW ecf kn!hrjrket r} tty & !i3idend rates averpged SMp3h and1% dining 7991)19M and 1% ;. , 3 jn Caspags 10.05%,ies; $100 par'value preferred ink, regtstgehamlatorypriking fvapu&ient kityt!re; l EfDWhares in each IFnmth period begir.ning februaQ ll N)0, ami m3!ng january %f01/wd a spmfnf j%d$n of khares in each 11rruth pedod therraher Umiaking $nd rWempion pad $1M per slwe.in; ~ c ; rehmary 199L the ognpahy retW 57A%@ d its @ feries .....a u_.,, I/patiyu[xm M days ruice)t the $nent Empiori price'per kre/pKL riskernable at di M %dt seriewfpefnred stock, withduexipkm of ths 10S5% S hedemption prku of &c DN an610.ON ? g sene(dedme at spt%ed syteni6 in fuiungeardhb 10ffA kies b rn tedetmable unni 19% b Qunpinfs three, jMssus1/ auction passed mxk nding 550 mik mipMbe redeemd at par knoy hklendpyment die. , ~ g ';pf or'to 199I; the premiungnd redenptim dAtn he indu& i h prefemxhtodt pnihe blanwishem and ? i linseed over 10 yeartin M1; pursuant (9 an hreement Mth the lHC the Company nprsed the ske yeari. 4 fipamsubn of these costund redaniAed them asi reduction of retainnl curann AN' lp L-., _-.. g p ..em M$SHORMTRM F1MNCING: m J term bonoMnp and lt/i nuke borrowinp iniWde dinky pool dmg.h the luaance d conmiercul paper andy $fhm bankOkey px4 bonowingpre :shown a adEances fnw affilbtes on the halanw sheerset11ecemNt 31/ MCthe CST Systembibank'hn' emf 6ediiaggregating $Fa mi!bn/indudingtheOspany's knesdsnxtrtJ-.

p[$ionem csh m plows trarsferred toihimmey pmf xie e bereilnsme in accordanssith th L

% arrangement > ~ g +*

li

• Q,

I L hj e yw .t. 3f) ~ l1. y q g s; N i. ' $% e, j' 1 ' M _L_D l, T Q; g,)

Cl NIMI hml H Anis 110111 ( i t'M N Notes To Financial Statenients

6. BENGTI PLAW

& n g. nmem.. u % s e ow m jor e, i, p.. p.-i o n v e ' ' ' ta c w B' 4 l 1-s a i t,e m 0 ;,a p s i t l!4 ( 3A '. f. l(, h s s, 3, i dO., Il, t i.. ! - L,. i.itv ; n 1( e. "I ); t / L r f '. i t j. +' 'g-t ti-e t 4-D , cc 1.r.1 % ;U H, w 'w. s \\;' ' 1 6 y-n i 4 . a, s e.- .m ! + < m.mJ : m a n: n a. lhe t4* ,"k i r( j :I, r-i d Ig; ;, y,r a i i 6 . ;e 3;gg, twt e n., o s- +' t4 $ 1.424 t + '3 nu, nc U.2 rc -. p: ; e - L't,5 41 U,jt )

v

J + 4 s 2 $ l A.% \\1 'a s

===-2 y% = 3 n.+ m im en 6e stJ.ie, 9% J i ' b N WuTd,131. PN o r!l)) !n; t,i s nd., (!, ( u t c L;J " c 0 G i pn u y t ; ,!u - - ! t.J i btn: O oh k yiens. i h. I;1 as;: r:1 to i ;c pr+, l r n Or' G ' ;u', iso prf, m

• u,C

% 91/ t a, t.sw n, q i

4 4 i i Ti ih'd 4 f k I,1!N [ ' +, iT Mi'IM !.i 1 lf' 6' f t-lE i [,, ( U.h h.,l( i j'[ 3 l f, ', j : s 4 n'k (' ( T Ur, ~h 2 'i + i 5 ( (qur, s tibt e d p. \\ ;!:ty the b! o w n '.12 C i n P/'I

l. i t

'w go,as rg' 4 i i, und LIN fc've n h 3 o -.nm M' mnmsp; eu, 2 + .4, : 1%6,.srtID: ,rt i s ej Ma i, e' in in 1M cm ton; appm t h S " A.c e ; 'op o ed 1 J' M tc u - W r N e *;u ' MJr h c be i f;,, V.mn m n.bu m sir, b :.w. r$,m t gWF ;co 4 y h. t h3 i n. < p a y N w ms)

7. JOINTLY OWNED EIKWIC (THIIY PLBT

'n ik b f' S (I h i' s !( ( .k s hI .I t i4 i 3 1 d 'h( j k (,' [ !. ' ('\\ k i ['f ' f '{ [ }.[ (j 1 ( '4 e,tf )( ? p o C 4,w rrMp ciaj n;ver;:a m d ijy or 9, svg.,f pq 9.,c' gar ynn 7.cqc one s ]}g O ;u q..Q y n y p, incrM;' ;.. c mr w t : ud,d mcojhcts d C.c (W k e m md i i, Abaj n nc, t., p i i h 'n & L - c unct hp ad tp t.mun oli hMao i 1% er % i m 1. V > r iu Mc m ru W s 9A w b d- ]!:.c e c - i-of i, m.e Mlcu t' c Qepra, p & i n! cp ' ac u,-. m t ' d 4 p' ' m sen c r.: i V.1 : N R PM e > Owp.im haJ cmec in dic,e: era.ra v.4 4an md w; en! L-es as sh m n be) m t. Prd p + Oktwdou i i %e h / in % r'n t, N ' 8 ", 4 i6 i e i A rnf fe 1 'c; e i 4 5 L. e, i j HK2 i -26.e -!% >1 o! t s m. t t q 3 i 41

n,, .j2 't 1 t l ? 8l 111%f*W AND REWl ATORY PROCEElllNGS : ' I ' i t a 3 ~ M ' h{tWluc&n The Conpny anMN d STP, a tmM nadear smu plant u hkh h kued near Ltay Oty, ITEtakk a@htian k the dernpanyJindcriliSing & 1\\mn Gen;uny (IRP), the pnht nuvr, rans y)K% di %f Of M AntatM(a Anttnksinmi.2809, afd the Gy of AtNin ( AuAu0 om 161QTP Umt I was pktd in l iskkyst 19 dad NY Umt IwkpkW m nkt injune IW h~ 4TP 11 rod Orden. In Ocder 15% the Tem Onnmon iwd a fin.d onkt c j 1mpleimmd rytighted aperment fild hi Muiry 19% to nelye (kdtt den per&g lefore the Teus I_:V Oxumbkmtja thember 1% the % Commskm Nued a hnthdet iSTP I?n:t 2 Orkt b hidi fully ? Mp'Enenrd afipdawd spmtent to redw nfl twues regird.ng the Qquny's im estment in SIP Unli 2 i The STP Unit;I Order 21109d thi umpany w incttw reui! bee rata byJ131 e&f nihe rate increase, 4 irtiute(plrmment a 5%udinhnterim lyse M(incivas pini imo effeo b Manh WN ard a 5F/ mikn interim - M tre iddrase piiad inta dt'ect b bisnhx 4%e STP l!mi 2.Onier pakid Im1 permanent the me > ~' as Mrneak of W4mEm effenhrjanny 1/M1 De STP Unit l or&r abo puik&r the defemi of tveuung L ppenm and/syinj rom 09 STP (! nit ( A (mt Teuf Opamip6nfer Wikiened. Accourfhg' twhm) bd. @uthorized &fetril d ifP thth J d)uMidnu wh beinirmssed through nfes ower tfe nwanglife d ET!U Mds S1? Unitjptjlaf auduired.me d Wtur Gmsnatha %rk in Pmgrch Mnor CMP 1 putyaant is whkh - "the Caapnf recognlid lyA nuhn d drpng ssimrigeul(Gnstractke costs and ntal6hed a rmopoding l lii@f1NOtomm recuded hiukt defened ceditt on the idance shee&la complunce with the onidri carqing ' 1 icat/AoIlsted d; rough mtes ddnnfpcinbshen CW1Ph inkkd in rete fue weres kan from customm?The i [nm h istg npid through bwer rawin>m NJi tNndgh IM w)kh @pnWmateithk linplus tins during ; which ihe cirrying castrwere s1kxted innn eawtociMe innor CV1P Mhry) being redwed by the rmyrdtiut % rAcash inconOhiring tW piMWil thro 0gh M$.i ~ s ~$3%e sw Unii ) arkl NJm reehed than peng kuhe $nabic aisnal cid sTP Wd the yp/impdate sm9tmt to be in@ded in n in Pursant to the Teus Omwinn orden, the orpinal uN of the ? QrspadW kfrii investa:chni tTP ischbi hi rate hee, _. f , 4 As put d the epdated avecimenti.the Ospany haapeed to Irme has ratn ins Janiury 1 k991 thsugh m _ t &#Wt yi cstairi fni maeansenu ind9tkg dame 41igit inPson, mpr oxincn%dntachdmans, E 1rame in operatityxpenssN serbui edinesh spemmg ;euznues:The ponpny uuy file fdItceaein base 2 d fr!tepnhkliMstd b6 effecike and M6nd Medjo certiin brnitaibns %e fuehation of cintotxtr he will; %ritinuho be sdghtEd fobgIhefsarmai raity sd approval by the TeniQsunWiotii i , s;ne spaul apeemmsN discmed above,qvhsed hbr.the Odirs/lthe T Met 3tstnen Thes btergnorirepreena Wgnfan6iuNry of the Compar)y% cii%mm.:%iCxnp.iny' and d#

1. dTe/M $nte Aksndeiriadied igm:meny hkh were suNequendy approvid byLds 5tdl std other Mputors, s MANthe Teuntse Ajsios ymt te t(o,tp.e ths supu.jped a;;rcements is any reypqt,neep%h.ed 5

@' yddagaciipmting ed rgie dskinuesthe FIYhir fonjer only us of% d Mee Ut%ge 90Ple)nd a (mhtion of kisindome avonsdikedJ crer innd6tighied wmnentt p ,1. . 1 d .g inJanuuy 199t[theTd@ie Apies, OPUC ashhe sahim W bpsitsee stomeri fi,!ddjphea14 dthd TSTP Un!it Odtinlthe Distda Omq af Trasis County (District Cour0 requesting revel of the'defernd ahuuaynf o/ STPfnit 2 and othefaspeitni tiiat ordsja Mrdi tMiithe TexMuskrancie( OPUC dd ihchulitko iC' @YWasoecMdners fited NMI O hiilth 2 Cedef t(ihe hiddd b nqUntjng tdaIQ 6f diit drd 4 M@Wants would toiy11 fied and the Conpny nWd expenence a egnifcini a&sse e gp 3 ~ Apperanchs%dagstfept l@vuds.t the Fl? pnitiind 20drnvill be u;4iddJ, MQholetale Rite $eldehkritjs Mp em!st1990, the Depay tdthedpMment (Whbksaid ktsmend MM sil !biblesak cstdmerkeuept far Se elenne wcper%ve;Ddtoksale Seniedid c&d for an increase in y. e ( p g k

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...._,m I (l.KIKAl Ptml K ANDljtd!! ONPANY I Notes l1o hvnanciabstatements o s L e I tales N dpp.'oMIR/te)) k hh uni 1;'Il hM MO s@pt w bN he!c hbitd I!O UNat N NA kNI An))a%1n lN{. Ihe 1 l Wholed sademem h anaent u Ah the il IH 1 and 2 Onk rs m A1 uho tespm The H R ppwd h l v &kub sed ma in Jah P.% in Deteck IW1. the G qww enetd nao a tedement apecem % gun e l 5eidenrod wah the 4em.umng Uninc o qcat The Coopvee vikment a suhuarauuy the same avhe ThMesale NliikmeDI tMpi tha! Nk' (h.ip.rM hep!MMil 3bu s f4

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rd het* Ed pJ) Den' O}.i len?NiMn kT $ hT'M tOf ftQ N EC DJ thC U tiklrMr A P!cfM f!I D djutnI hi OT rrkl I C vftw2 l Dcferrul Accounting. Jhc Uqunt we panteM fenni anwr ng br W t mt t md 4ne by Teu G nmisn brdett &cv orJen abwn) the Loquri to ddd opw aad nuntenam um (Ars &pnubon j Jnd CdtfJ"M cM dndl YNT Od 4eTe f[dt?dOlIn faki lNsf7fd 4W#a!Imy bJd Jn Nr%ObJk f Nhir CNedon IW! Ininfai, blN f3d fjf nag 5 i\\ tre rk ?l ITrC.id Urdd rd!(5 % t n' !No tito i ftRa tw STP in (@ k e lhe G ~mp.Jq 4 Od illM0e ftT IM /dd IN AI0ded W lib 0 and blM ndhA fepit3el)- jut idt CNed OI ddff frd acamm; The iW anyont indudd LMit fw STP l tut 1 xtnbaubb to WM WiP/%mert ardaded W l m&n of Akhd (anymg cast &kna for !wrot to dw cent of adua ;rans thms incuned in PM atl l EARTK in PrM nikits a rubWWu-n d ap}emputch' W rn%n Mm AR TGht to AREctpcv m acoinbare n6 the MP IWt 1 O&r Puumt a thtSIP Und I md 2 Order, the 1:ompants rates include rowcrv Of 30 STP ffM! l JDd 2 deIctrab Oict O( fem.HnlDg _itt oidid }i.Di!_ I OPli 2ne the Texas bir Agendo fded apgWs d t!n Ted Cmmaws fin? order m I wnst 03un rcqueeg l rever3.d d defened acuentmg hr FD' Era 1 in %epmukr PM bt Dntrrt Coutt twx! r pipnou ifinning the j tem Ommuwoni order for srP t na !. whnh we subsetpendy sjspeded by OPL C ard % Tem %te Anans [ ora argunwn! nas heard in October 1W1 by a Texa Court of AppeA The beant of'ne GmpannW Un;r i deferred aumntay order ww comhned by die Loun of AppeA wirh t mibt ac;w% 4 HLP defenui ordeo i If the 0;mpany s orden grahting deferred e o anth; are temute!) rctersal, the 03moiny couhl openence a j Mgn:fiant admse effnt on tb rewlt+ of operations. M.magmua h k m that k U ntpany defened xaiun!!ng l [ erders sillN upheld f I' ill? Asitration. In FM Awin fded sui niinst HIf ahipng. ankq n:he rbgs tehn breaches of the M l Pamopanon Apverrrot The suit we transferred on dung oNeue to tN D9mt Gurt in Dalks Couray < Dabs Ohlrict O)Ord. Ih JanUJfy 1%N }l{M fikd I NNfd p3Ny adion aR3inM dW COD _pmth CST ;md San AWur119, M pJrt Of the Amun sat; seekmg irxlemnity, contrlhaton and cenain oder rehef. LPL and Mn Antonio asp nded to the third ' pmy adinn with; munterdaim for damaps and a mknt to omgi Nndmg dtratna of deputes; aamu6et things &r the thcd party ution wv meted from it. the Audn sait pr,xuded to trLd in.hdv iM wign HIP em l a take omlung bdgment Auvin ha appeakd the Wdgment to the Dafn Gmq of Appeak { t In Aupnt 170. the DWa Dbtnct Coon granted CPn and s.m Aatotuo'unorioso compel arbtradon of drpmes - l wie HIF. since !!ut ume, the Company and San Anionio hae prWaded in % h of ie promnhnym which 11LP hn { thall nged catain aspects of de adntunon pr@edures and in 6e appeA of such paec&ngs OnJanwry E PM e HLP Eied a requen for wm of ceniorariin the Unite 1 states kpreme Coun ave:tmg &mA ef wormauanal due pnxess ripmn connection with he arbinnn to whch Crt b expoed to respond in Ltc febnury IMThe l Unnd Stes Suprent Couru deusion whether to grant e r6oran is gndmg I - CPI and CbT are enyJgCd in Nel!h mtSt diV.UWOns 6iih IIIM, hul D0 %CitkNnt hB hTD feJihnl Althodyh nuragment cannut pedat with (cruinty the intir:uts oukome of the vrious Jngce, oh HU; it khem that <uch l l OUlfDmt' WIN rhx havt a materia nherse efh don tne compann rauhof operack e The Qrr,nany is pant to vanous other k,J chims mms and compbm arimun the normd wurse of - l I-f husinen Marugtnent do not opect disp &r, of these inanen to lure a ru:erut adverW[cet on the. Cunpany) resu!a of operam l .9 ___;___._._______.._..____.._-___._......a..__.. 4

' i9.COMMTDIEN15 AND CONUNGENTIJABilJTIES y h is estumtoj thsihe Ganjun) ,end apponrutely 5116 tm% for innsweion parpres in IM

N.1xmtui ummee h.n e him nude in cowecon with the wnstutbn popan To upp'y a pana of the fad nqstrnents of in generating pbna tie O).npan) hunwnti into winus amminere for the pnxuament of fuel

' Nudcar Imuruce. In wnnmke u tth the k endog and oiwn:iotuOTP. the won he punbed the nautmtm brNt3 of ns:br h4Nhry itwarance n requivl N hw md baie necuwd irJemmfratbn agrncernts u nh. ":1p Nakar i<egubwr) Oummivdon irenbnce with the fcancul pmuun requin1nena ohhc Nr: Andenen Ad The hiceMuon A;t. nompreherse su'atory mangent pn n any hwatium on nu&at liday m3 ' punnxntJ irannitiet b m t&d until An;u41, M The hmit of hNity Under the hkearxktw Att for . Twm of nudear pmta p!ino n W billion pv ixhiepi ne ownmd STP are buted for their share of this . luldigdsough wha %uden d pm 29: juurance amur@W to W) mbi at:d a numbtoq 2ndavrp wkle pnptu for df-inmrance totAng 57 6 bnice The umimum amount tktt each ixenwe may be usedd ender the instepide pagani uf Midnwrirre ftA wino reden inddein at an innretl bab:y is 5M 15 mhon (which - spunt wy le adstW kr innyon) ku exb licensed leator, but not rwe dun 110 twihon per temor for exh )xkst inient in any one 3es. The Cnmptny asj exh ohk cdrt TIP ownas are witxt to such v.snmena, . whrh the G,mpaq and Jhe 4;tScr owners h:n e agrud will lx onene on the hns of ihnt nspedis e ownmhtp. tmertsa MTP. Tot ptapres d thew m.emerMTP bn two herwd ;cacton. ( The ownm d STP crendy nuinun caste demntmivthm halG!y and popeny (bmage inwrana in the arnw df 525 HTem t rovdd by A nerian Yuckw buters (A% and Suden Dectuc inwr. intr lined 6T111 i Pdeles dbsuunte imed17/ ANIvind F / proemb must be used nrd to pay dwmucsnxion aopeny. The unpany and the other owncad STP %d &rup mn befwe beiaa ud to w 4 . Ime umed htto a gn'ennt th:11 pnk.

1. t of deconantnauon habiuty mi pupeny in3urana for i STP tmdudi(prer<tiurm and 86dacnnho le stund pu rea twd spc each omere nwpxtne ontmhip 1mersts b $'P. :

s e 1030AR1HLY INF0fW A110N OMAUDirED) - f ghi kad ing urauated quim4Wmatksirduds 13 the op:nbwf netagens an ydptnere kon* ting - y@ d nwrcal ngunink!ptreau empt fqt the Bhd 19'O elfea of the GimpanyWfP Eni(1 lbte ou - 1 kaktnent reoided in pntury 1970 agixuwed b Lie 8) cemmy for a fait paxnun of sah asunu. . h(isk '- , 0;wtating Operalog ' Net Fcwim Ituume factor V f. r Qt hifkt IN$4N kl.tmKM h 1991; i R d Vaif 31 l im34 81M ' & 31 0 $ :, y. bdya! My6 - m.s WW k ta:su i NdR. WM ml4 = 'k$, i Tr.cnE.4 JW WW Ole J9M - . ned3t. m us tum stm ' )Y kne 30 ; %)M - (WO ' 'h162, s %mder N . 2AU\\ ' A$ - 48 h 3 - "fuenm 9 :

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i l 1 J 1-REPORT OF INDEl'ENDFXT Pt liljC AG 0l'NTANTS To the Sbnhokkn Mid twJ dt Ih'uM vi n otrai hut t.cid lajit Compw { Ve luw mdtd the am.mpa:rg:g b;d. me sheeS mt sumentud teuhnunn o%mr d hatr m d Light Cur.jwe a Te,x catormko amt wh5 v.md su!mdar, of Cetnul.ud hih m 4 Ocrrem m4 Dumb r 31 l 1991 and PHO, rd tJw fddd suWentwf ir. rome reumed vaming are! cash foas for e3 b of the lhhx iva m thr i peri <d emid humber 3L IWI Theseimanenht.nennb av !be nsynuNbt) of the Compuy'.s nnoupeut our respe.Mht) Mo npn9 an (rpinian on t!m in in(Ul vunenb b,eckn our uhti l TC 0;i1Juded out atab 11i roed n: with genirfly acapted aultm/,,tanlars 'llux st:md trds in):nn'ijat we j phn xv';erfona rh ambt tubten nanntk a.wrance :b>uahther th Im: mci thuhrnert w fnx o mat.-ri:1 i i toMatement An audd urdudes nrnm!nn. on a e.t buuuhu su;p cimg tix anenns :,nd &dwurts m the IMYlilJi b'JknMih AD dikh! ah'ilh'!udd 6&Pg dk geOunliDg pr11K!!ih3114d ;Ukl WQtifdD) til!Mt:dLA HLije h m m enent, a well mMuabug timeray hoandaktvnrrnt pnwnt:/Joo t e h ine that out awh5 prodk a H ILvfl3NO hN for 0U7 OpnthD, i jh oUf f piWun,!}W (d3nCi3! $Uh1HCHh Dirfhd li6 NOW [fYMil fulf h 111 AN TIQiCOM hSpM( the flhAOCid ptAjNuf) l d Gutral hrnt and IJght Compan) a of ikmnhtt 31 pNl am! l%d h ny.hl stupfations xid its enh ike for ndud the that 3rm in the p rvd embd hvem!c.' t 1WL in confonuit) Oh genera!!) acuptrd accounung pnncphs t I I M e Ardlur Andersrn & Gi i b ah l f.U.i b hbrary 19. F)92 i l SELEGID FINGGAL DATA n< fo!knving dettal finarxid tb:2 are ;vnded to is;hbglJ vpinant trends in the finanad o ntion and i remb of geanom fta :he Company: \\ + t 1991 !!4i IW My l@ l ere ne a I} LIrif O[KTUUni: Fewne $L09030 5 96 MO 5 1 % i' i 70.d2 i 'tWJ64 Set ho cie 217,206 OWu 10,31 iWO9 19L92' Paferr619ed Diddends _19,84) 2RY - 2ti% 2LM' IW (- Nd Inwmc for Gmtmon Sud - - 197,362 NU12 -123223-M2H : P619 l t. TaulAuca M27,6% OR2B 3Md% - FW2 13ilM . Pnferred Md - Not Subject 1o Sbrahtary Redemption ~ 250.331 = 2Mjil: 25%M1 JNM ~ 166,N2: kL g1 to M.nsbtory Knirmphn %Si10 _R0W CJ'2. nM iWI h beg-Tenu Ddt 135035i 13hw 1,331 % U595 ~ Lr9.W Rateof famingioitwd Charges CSFC Mettah 3,18 3 11 2 49 '2 h 3M-Q;iuhuion Kaio - ummmock fqmty-46.h - A 46 45 A . pfderfed NCd 9M M 9S - U) 2 KI Im&Tenn Dr:bt - 4to do 0-- 6i f2 l 3 u.- ~. . _. _ ~., _,

4 CI:NTRA!.POWIS AND LIGillTOMPANY Management's Discussion and Analysis of Financif Condition and Results of Operations DOE 91EW '.- 8 e 1 4 ' In caming b primarity dae indditianal mime from rate inenmes, hgher )J)owatt -hmr uld and ilufktts of the rate j . (cze rentement. Arrage retum m ommm equi:) inenmd to 13 Tiin 17)1 fun 12 A in IM The Ornpmy marked I [ tk md di major amtretthn program vhen ST? Opit 2 was co nphd in )W). As u nwilln l7)0 and lW1. the 10mpxty generaial fd of its cap!l;d nquinans intemally mJ de not antripate the nmi for akhtxrul kog term ImWngin h near h:ture. ~ ' } RATES AND REGUIATORdATTERS . ss-a u u n n us w w wnm ora w nuu n ~ w na m e a u nsw l lln.tuchl Stikments The in!Omtation (W!ajnd tkrtin dundd be rmi in Onjundion with Ed it eMondal in UlkkStanding the ICIl0 Wing dhcuMidn and 3rtEhit , f$ry find Orderduring im the Texas Commission ianed fm%krs mimu(1 and STP rnit ? Onka u hkh j' M1y hvpiemer&d supuhtd ayeemena le rtplv dxketsbtf ng to STP th~n gnding kfore the Texar, Comuusion. . The $10 rut i Unkt alkAed the Ompany trHncnme hw rato by $ 144 milbn 1 hh bre rate inaear rmde t permnent a $105 million interim ktse rateirmmu pbod ima Wat Mmh IWunt a $39 milbon imcrim bav nie - docrea Nical tuto Att Sepcm%r 1W) lhe m' !! nit J 04r puided for a gramrmt bde!we inenel $1:0 t mihiddheJmuarp 1/17)l. A prior Tau Qanmi@n order and the STP Ur:it 1 Onkt aka teht for the dderral Wiwn Idomb (see "Defertd kcounung" kk4 'c6: Tie STP Unit t Onler authotimi tk me d Mirmr CWlP in vhkh CPL magnhd $360 milkn d eroing asts u - i ; @n'ginafe$nststion akts ind tstabibbed a comgoraling liabilny Intall niemen he earrymg rmt3 are king L 6 movemi #nmp rab rnithe mnalning hie d S110the Wrmr CMP liabihy is N1ngmhurd h Or nrownftim d i nonoh income in the irm 1991 thmugh 199E iCPD ktiraks will be fmaen frurrijanuary 1,19)l, Otrotigh 17)he$ct to cittain forte majeure ewras ns fuel s 7pnica d custamml Wh will continue to be adjustal dter min and appnwal by the Tan Cunmien The GLrany : mj & for increndihue raus, wt&h would k ditchic after 1914 and subkt to aun Umitate. y 4 ; Wicule Kate settlement; Jn Sqtemkr 47)0, the Gepany rexhed a Mksde Setitemuit with all of b Shobde psamiexotyt kit one ib:tric cr4peratne In rehmary IV)2 a settkment s as reachd whexby the ekttric g cooperatlWilllyay the us mts as the otler stxhde catomerCihe haue $citlenwnt cdh ior an increase in Wio!esals rata of approxfmaidy $10 mi!! ion b two stepL he incremes were pbod into effect, mbject to rtiumiftn May

ly)@cdJantry 1991 CPLexperis a Ondorderis 17)1 L Deferred Accounting (1he uimpany wa grm&d nrred axoundng for STP Units 1 md 2 cmts by Texe !

y l dnithm oks. Ese ordent allowed the Ccapany ki &fer oeruin operating amt mafateitarce costs, tav3J LC {$; yrecisnimd cartp6g cma until' lee as wee nilecid in raki..f Defttred unueng hed an im 3 'j% tnt imo dfect st&cting STP in senim The after-tu net income ctfect from defendiccountinn was $1M rrah6n fuld ' 'i $13fm!! hts for 19pri and 1989;rusprtin 41k!emd SV Unit I rosts d $23 milhan,ttributalk to 190Wut irxhdC Mn mt income in 194 Ddermi caroing aw dj% nulhon were ognimi in net hwome in 17/) u a rauh d ' . EaMitionakanying cost Ene for intwst to de eDmt d dal imemt chirgo antibutable to 19Ent 1%'). The 4Cnmpn(s ras irgade nutpor dhkferah act the remaining life of the pant, gjliese Merred aan.mting orders are in varkas staps tioppeal,1f the Compnyi on!ca stranting defemd actuanting i anfuhliaatdy leverd the Gimp;r ny could aperienm a slylilkant shene diect on itsula d gerationOlantigement ; f kitem tlut CPh Merced armuoting onko will be uphddm, . c . ? ? Iri Augts 1991, theTexas Sidtt bl Apgab imd an opinion in a case imuMbg an unrdakd dectric uuky, f duaikt.nng (tttiin mFctiof the defermi scountmg tratment folkwd by that uu11ty, which biinnbr to that audelmi - 4}by the Tens Commission for CPL The utdjty has fibi tunution for rdwaring of the Court of 4peah opirdon, which !! m

3 30

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CI NIKAl P)V's L e ' Ih JII ((W H W ManagCQCDl'S I)iSCUSSIOR and AnahSiS Of financiaKORdiliUU and NUSuh5 OWp0fali0HS pang h ;mmthL e 'ti. + JW m ha, W o ma> w!!;M mtri tM d', ocnw < ! % y;. b H % J ' J-L p-4 CON 5THl1 TION PROGF31 rhecap.m m u m o a n o g An.+ ,' >qa 'n: - tn e vr.n t 1 $ I 8 ! Ul l k?'i D O bi F W S U G in M *' 44 D-!d!: 91? d lf O!i$lIbl' i P i i. + ' i' G WJ l 'r ), b d t.h M! !a '! ' !" d a !( ! ! h % ih tb ! G * 'd if a ' 'ir i t e h '.lalt W 44 C d> d 'O i < '.fu& - t 4 0-! ' i'n O J th ' lb ' # d P?H }r %!d mph l m W M p I F4 j m } * -l. U S ot? t ,. h!che c a p i d m: ' mu u h npMmm / ' t

• t. r ! k ua ta

w a sh = hm im!M Tim l'a;< c" ' s.i t ri. 'm J to m.

51-ri4ilir<tr? n J t'<sr' th :s e e rt ; was W n (MR L t j,4 m Il3 I N a d 9E >I nbtqCUWomB b'v4bMrdpW f p!N d e ln *.sy /, r !Wi the ( mttd : Lt% ti gn. e pf <d f -, i ! m M i t t;re n b ;, of j J F ' d d [ tx r %, 1 il t m h k - n en a i d ! o ' - W mi c.p% & ni i h mt rune t #r d m!e W i. d m'r 4 W Nu na!q m ra gj ' ma dlit W Wi W m l. <r li m Jw c M un N remd k OMded th e h a (tdlih Id a IN I% t'[G4, ' du Ib Ih

1) %)4 PQl4/ JJt J'n il i i 4 h' %.? D.'

h pmig of r,d p K Aity A m i% n.'uun irri w E !, m : i eme N n m 1% t c.-I N 0 s )nr m.m enNnt qu u k.& % of W ddd. Ibn ar-dut1 A n ! m mi-ob, ou na im r. m h h.b v t b n oapWd.h theIbiwmenu!heim h e u IN

5. N dte,k ar p eofna rg; W 4 ch 4 M ru. y th a k A ia M ' t ganl i b.t a tJp) E mleSt1Onth hdab w !i u l W 6 !. M t b ' M p9 < d eI Mb ) M opr'.

Er; d ( ga hNn f it momt ir;ng and mud in mb' W njapF : Mie r e p'rh Fr I W; , toy P U ct i.!PO Nath rgbtemipaw tw m M cmt d ntm 4 > m m % rM r tb moh FINANCING AND CAPffAL RESOl~RES +$ k 4 8 I-l 8k 4 & I IW1 nn crW OWnr m t% gxn meecua prw;rn. In M lwi.sup er. A not u of am;d rtya n wra fram idennNurm ad.mq@ that n !bt upd napM du,4 t% DD2 (5 rah NH ywW v,1 :qnmW frin m nu! w um. 6 + e r 4 M ard the nuipt o!apM prur ' r e frau i5 pe nt mm;m < m!he fu m st r um W: pubJ & Unnp.my % to;wsk ewNc.q Wr11me M b;m.bd M. Mi M 1pe 1 Wi www C, con N h h k vers % pnbrred ed and 4n hoggterm & Tht Corpn) de nepd to ropa q h w tendn: nu during th IW2 thtm.gh 19n pcd tdom;un) nt;nd 9 nobn of ib itt Wraysterw m k in i inv quarter of F/)) Cm!ONCT $0WimL4 %ld. A Lihyx! AO b hhd Jud WIdio! O_in MWMC 10 0 41.rn!! h(. I v,ho'l) ontd subjag d M TN uln prunk the Cortpxn mth wh imnletch :d W u m &ne an und rewnue rx3uin meut.t The,wa/- cn! 6tmd inne of mnS nun Ne L loru!wt ij B f men rd 5i016 meum Em, a capami to M m% :nd 5 M J ndhnn m Um Shor' term Iinmdn4 The U gr ; heth, mth tehu nwh.f & N : A m. bn:c%d O Am money lo b omb Pe thon-!t on km.unp 'ihm hans are uwwui anund % he at ne mpMnuwt tb Spun s cunmcul wr honm:tph L kmprWh/t-knu borneg imut inc, Or mone) pd b Do mLet, and bortwiv MU be m. ale junta It?C :n rapWd !Wmt UN) the awra = ext of short k rm I* Swing NbiXt!M9/ 2 OpthTid %4 fiI 2 inbi M 313 Mrigh!:d Mrd.S mktpl rA (d b h D WRunU;H ammnt d shmitrm knwm; oubandmp.: am un athwhbr.ng bm u FM n+ a r d at hu ber 31. F/)L S il nP!h a E d O W t n h-g NBV ACCOUNTING STANDARDh vsfeeno+ nut %te 1 oW um mM sota w w epuaw Mannsm No 1% Erq 196 Accrens for Nrtimement Wmf a Other T!an h a alhiY M W,ocou;a,, hr I: 04DPT/.W. b e$l d Ed.M UUClInu E kttd M h M W 0h ( =. _._m__ -_.__m__m___ ____m_

i RESULTS OF OPERN110NS < Net inconx for Gmutm stod.h umpxn's 101 net ime far common ed h ts hcread d:n to a&%a! nwime frun tbc rate incnss, dr c!httui the rae case ch menturd hidrt ktNtn hmnah h WM iwreas was - maln'y due to hi#rr rate fom Oc STP 1wt 1 Onk Ekttric Operating Resernws. Toti tktW ograing nwwxs inenad in IW1 sd P/M due la lw r2 ixteaws md hidwr Likwatt-hour sch fusl&ntal rd commergal Ukumt4mr tales in iwi increawd mr 19e n&cting cuanner growth and 4hth ih4her usge thic to w zmer weshN W No bmn in kiku att hour uks kr dec dmes b aho due to h?her leveh ' N OlFh0Wr5.. /: b increN in hI'hdd bl.rNb-Indur SiO3 rtf'ects Ole grahlally impMing WuinnUy d Clb seniT area kd3 i'l 1991 were impacted b) the albtion of one krge industri:d customer ni the iden ex;rmons d im nistmg custocrrs, JThe 03m;uny coatimo its dfons to aw hy new busmes and rdam exWing eno mers in the fax d greater com{ettuon - ' Salo k>r nsak increml b IWl dat to the 14ditan of a new wbdoale rustomer. Tucl nnd Purchased Power. fuel expenw in IW1 dxrwed gimanly hwause d a & dine in the emt of p hi OK- - syd mutetL ftri exgnse Athl in 1990 leau d schdaled tduding of Slr Omt 1 in 19% Tins outage resuhd in the uwof s reher than nuck'ar generation to fMfd! cpl:s nysrements m 1989 Cwts per milhon Nu by fuel wura wm 19')1 ' Mh le Ga $l43 $2 21-52 N. nul 116 m m Nalmr -0 3 - hot 1,") ir-I v)

f.ximes and ines. Other cynumg egnset for im wre gmiter than toth IW and 1991 m a mdt of non-

,i recumng P/90 ctnts audattd with the SITale c:tu ard tir Qupany's early atmtrnt prwnm Inveani ' . mainten.mce a6B in 17)1 re attnbetable to udinonal schdukd maintenano: on STD. yepati2 tion md amonin@n laend in 1991 due primmih to the addinnn of Mirrar CTIP to plant ud due to the amortizatica ddefernd accountLgmsS imm SIT Un;ts i sd 2 & 1990 ixtewdn depntiatbn and anstintion was& to SIT Unit 2 beiugplpJin senim. W incream in 1991 d tnn, odwr than fWeral inconw k pnmari)y a nslt of higler ad nioten and Taas gas L ntel pts inet & rise in ad valorem taws a as due to sto!!icant changes in the furenp)nem for pubhc samok in c Texx This mised fue&ng vptem has netly ken dechad uncomtitutonal by the Texas Supreme Out Howeter, the Tcstt tequinid paiments of the in in continue through 1932 wlule fundmphemathes ut evAusd by h hw 144sicure lhe ineren to the Tem gns mripts tu is a diras resQt of the lacrea in r.htric gerating resenua The change tetwen 19'M xd 1939 is due to refunds of prior yearilhas frmchise taws t xthtd in 1989 L infinion rau$ as measumi by the onunwr Price inda, hue x.eraged m for the thnvSur wricd ending Decemkr 31/1991,'Ite Company hilevo that inflation, at thee kWs, des not interialyaffst le nauhs of operatium 'or financial onh:k a !!cwtsn. under exixing n*gulatory practia, onh the hlstancrbt M plant is recawrn Irun adome:s As a resuh, cash Ike designed to pn.rzide narry of biotical phnt cats may not be adequate !a replace plant iln fatmeyexs.- 1Allowame for Funds Used During Constructior The kw kwh d Vl1C refkt STF being plactd in senim. In iddition,uCIC.in 19W n& cts a recLtw!ficaboa of 41T& debt to AFUIC+ycity as a result d the &!ern) of totenst 7 hrgesia xcordance wi:h thW Unit 1 Or6:rc t Etfor GTP bald!!ty AmerG.stiott The Company is amortizing Mhrror CTIP liabibtv,in 6chning amaunty. met er next ihv jui As a nsuh, non c:uh incone of W mdhon inm thu arnottitation was nogniad in 19911idi [:unounts %11 td83 mdbon. 5Loillion,54 milhon and $11 m!l lion far the )vais N)2 through 19% Deferred STP Costs and Deferred STP Carrying Costs! the deferral d Sly Unit 1 costs ceasni in March 1990 ' Wn the STP UnM tre increase was piaced in dTect Akhuondly. deferrW of cats for S tv I: alt 2 erAd in teemter e ly)0 as the STP Unit 2 ude inenssebecame effecaw or hnuary 1, IW1; _ s interest Espdme and Preferred Stock Dhidends. & dnfease in intt rest on long tenn debt for Oqcars lW) and 1990,6 doe to the nxquisition of hip:n o>npon debt during IMO and 1989. W 1941 decrease in ir,tenst on short. term debt b doe to higWr 1%0 imenst anagM sith the sett!cnwn! uf rederd in issuet Prefened dhi&n5 &crmd due to le daissd rates on money mrket and auction prefered studs and dir to the retimnent of C tui!! ion of i10.05%Seric pre!aredstock. i M ~ L, p' ,__.m_._m_._______________.____________._______._

CINi}:AL IUWlE AN!> l1 Gill Co\\t!'ANY Comparative Statistical Record l limi tw 1989 l AVERAGE NUMilER OF COfiltBIERS Residential 476,555 468,675 4W),522l Conuncreial - 72,t 53 7 Lit"3 71,209: Industiial 6,441 fi,471 6,488; All other 3,510 3583 3,401{ ' Total 558,680 fM,6$2 541,620) NUMinER OF CtSIUMEltS - END OF PERIOD 566,066 557,M82 549301l' SAlIS - Ki(DWAIT410URS (Thouumdm) - Residential. 5,470,197 5,36R.128 5.277,961l Conunercial 4,214,497 4,1W).0KI 4,080,174: Industiial 5,353,753 4,812,279 4.587,061l All other 1,880,880 1381,K13 ~ 153 1,354,976i Total 16,925,G27 15,722,323 REVENt?ES (Ihousands) Residendal $435,860 S370,613 S312,850 - Commercial 343,437 295,322 2M301; ' Industrial 221,885 201,161 184,871! = Allothtr 97,518 81,124 81,5W Total 81,098.730 S988,520 SKui.58i RESIDEN'UAL AVEMGES Kik> watt-hi>urs per customer 11,492 11,4M 11,461 krenuo per cur,tomer - S914.61 $7TO,77 . $67934 Re',enue, p-r kilowatt-hour 7,90e 6SW SJh .SYSIDI CAPAlltifiY AT PEAK OUkiwatts) 3,961,000 3,9fA0(o-3,917f)00 SW1Di MAXIMUM DEMAND. (Kilowattu) 11.201,000 3,110,000 3,145,000 FUEL EITICIENCY DATA - Average Bru per net kwh 1 10,309 10328 10,40 Cost per million 11tu. 81.73 $187 $1.95 Cost per kwh generated (ni.lls) 17.01 19.43 20.74 IIAI ANCE SilEla DATA (Ihriuunds! pectric utility planc .$4,8'10,600 G4,738,187 $1,2'18,859 Annu> 1courtructed additions i 104,223 159,615 ~ 141,7" ' < Accumu',ated deprechtlon. 1.028,713 892,636 - < 769,KF - Perceritage of accumulated depreciadon Liu original cost.- 21.30% R84% :- 17.91; 3 CAPITAiEYRON (Itouxands) 4 Commc't stock equityf . $1,428,547 $1,419.4w 1,368,067 Preferred stori 280,151 294,6 4 297 S23 .Mng: tern 1&bt 1,350,854-1,3 hi,537 - 1331,54f l; l. L y>

. ~. _ _. -. _ _.__m F I s i = v -:1936 -19AS IN 1983 I! w liel

1988

19871 452,707 446S48-141,849 432.101 420,487 407,006 394,437 376,441 70,285 70,008 69,719 68.720 67.217 65.359 63.581 60,38?

6 570 6,548 6,713 6.827 6,717 6,652 6,500 6.'r!2 j 3320

. 3,251 3.068 3.200 3.185 3.174 3,103 3277 ,-a 532,882 ~ 526,381 521,535 511,721 497,627 482.2K' 467,752 4t&200 Y 539,896 532.546 527.,392 521,281 507,102 i!C,712 477.8P2 459Jul .g P e4St5,741 4f00,359 4,567,961 4,469,881 4,30.063 3.Mi3,798 - 3,988,111 3,736.2'15 L 3,898,835 3.736,151 3,734,321 3 GH 147 3A52,989 3,268206 3,27M05 3,03S.711 "4 214,925- - 4,325,326 L 5,521.065-S,M320 - 6lMt810 5,910j09 3,55?,3M6 - 5,M7,765 _ f.01,630 1.166A!37 _ 1,116 201 1,111,y41 1,531,250 1,528.082 1/136,327 ,1,816,470 1 IUMKO 15,f40,017 -15,621,267 1$,108,949 14,159.204 -13,910 Aft - h.221,03 4

14.617,5.83

, S?95, 5 7- $270,'223r $2si,345 - S216,0T - $?!WE $286,182 - 5G82,016 $233.593 y f 244,082 -_

231,001 241,773=

252,331 355,870 249,255 292,215 -202.819 ~

-1S0;345 19MAel 254,626 300,913 34 3 $

'.iL3fot 303,933 277,829 .70%. _ 655K .. 79,231 ~ 76,621 7.% 219 71,240 70A23 79,701 s, $790,432 : -$76R.264 -

SX59,975 -

$92444 $972,1R CN6.281 Sd!$,166 $793,912 p.. _ i

10,925 :

10,369 10,338 1022S 10.010 9,193 10,11?. 9fC5 .fi i$652/C= 8611.86 $613,53 $68.1f3 S?fe.il $703.14 716.50 $620.53 l - 5.970 1 5300 J632c d.600 7.580 ' 7 Ale 1.000 0.23c e (3 301,000 ,3.69MX)0 ' 3,703,000-3/M,000 3,667.900 3,625.000 -3,523. M - 3,523.000 (3,0)'3,000 2,881,000

2.971400, J,022,000 2,tG2,000 2.M9,000 2,825,0C0 2,734,000

. 10f05 10.leW 10,174 10.040 10,298 '10,23) 10,236 10,171

$2.11 -

$2$8 $2.33 : $2.89 ~ $3.27 S3A7 $331 $301 29,0E 33 c5 35.47 3537' 30.93 i -u U2u6 c 21.:7 : 23.70 I$41hN,G37. $3353368. I$3,426.969 - $3.056,M9 S2.758,'377 82,383A89 $2.110,440 $1/80,395

329.222 444,723 43an61:

456,151 asassa 2sas2o aa?,25r 199,s19 '1658,015: ' 589,909 t - 540,265 - 503A05 al58,831 418.e37 377,'D8 = 339,497-f '!5.78% 4531ti, ' $5.!M% - 16A7% ' -- f M3% 17.52's 17.ixm M05% ? a$1,294,844.' $1,159 550 / 41,033A43 - S971A13 885L805 - 6723.254-S635,049: U555,245 &.. v 297.334 -.s. 113A. 42 ,223,060: 18 t,979. . M.1,989 182,024 132.770 132,770 e ),17M56

.l.0

18.987-.

$81,481-.

66fi.651 ' 728,149 617,404 373J27 - Q1XL9m + ' i.. j' r 4Y I cc [ t V ( h' e.,2co w t, '" '.s w,y,,,W w.., w-d,., r g.y.,.~ q- .g y .,,.f,.,, 9.g,,,_ ,,,,,Q'r,, +*--IO rd re v $ k-Y "" y-t g .g,, _.,,,,,,4

Slarelo ceranc Investor nformation PHEllHRED Nf0CK TR\\\\SFEX 10ENTS:F/31STRtR OF $1T(1 Ceund an.Wudt ht knis,Inc. P 0. Pa ucits Dd hs, n h h4 0164 SilARElf0LDEll EllulCES Thnhanhakkr wnim sr4f is a mbhk frota 8 am to 5 p.m., Gntralihre, Nksoday thn> ugh hida to mvr any quntkingou uniy hat If ou haw a getimmtic l fertral and FMh Wtst fsnIms ht. Sinninlder Sznku f'tprinent t O Ex(60164 ItalhG N2t6-D!M orcre - 1#ttTQ7 f Oubde d Teusi/l+44421718 (in leus). Te reovummi thal $umvhVd reificato by einn ry.htend or trn;fm!ramt 11R$7 MOWTGAGE h0NDS. 1kC5111 The first NationalBath Cike - Ox FW Nationall'lza MailSaiteU(26 Chicagtdl (d)670 kichal D. Mandh -(312) 407-IM) 4 ADilfl'10NAI. INrolut\\ TION Thh nyet h pnpmd pnmanh for de biormat!on d vwrity bokkrs, emphmes anl custmnm d tW O unpmy int is in tranvahted in wnnecten u nh tir sak d niy smirity or offer to sdl ei uffa to buy any smaritt 10 ss o'this tyntt and !)t financul stalttatias 01citkkilllwretn and the 4 - Securities and Exchmge Commbslan Annuzj Re[ ort on iorm 'O K are aval%!e . gede.dh to all wurity hoWn d the Ompany. A opy willle mail 4 ta ny secunty hakier or oth(f intemted pany upin writk11 regth>t to t CXayne Stim Seattary, P 0. Ibx 21J1, Oxle t:brisu,1UM0}2i H rnetist at usa eq.w a x.nglwe.nwviin j'Q4 %k JL-6 / j[y'., RECYCLEO PAPER CONCEFrr FIBER BY BECKETT 41-

I References used fcr illustrations in CP'l 1991 Annual Report lu stratoo 3 19 @ 1731 taudtation 1 1016-192S u e Ttv:nue A Ed rm o tanvr.en at wwk_1964

• Map featumQ s', ope of CPtJs c.:trvitet supervrp%ed
• Victorta dopet:Aer's othee,1993 ovor cactus patti,,linemn's tools. romseing c'"*
• CPL bgo,1961
• Maytag wnnger wa# L 1911.
• Gch1 MmfAon embtem and a1 Wettoc tmm
• Founders Warner S McCall and R#ph W. Mornsen
• Oa pump. Port Hannilightcme tranune, tot
• Santa Maria troEey, Laroda and King Hanch cowtny
• PostMe d40ger used to tot trarsruason polos on
• Enn's S Jopi. prendera. 1904-1963 the El Camp &Uahn tre north *ut of Bay Cty.1926 e Brnof M. Da m, prenknt.100%74
• Hcene-drawn ico dehvery we gon, Abce.1927
• Vctor a Intdag
• 1920s Hatpcmt ad fcf an e'ectnc range.
• P es.thots. R st. Hudy. 1974 1979, Dur wwad Che er.
• 1he est company loga,1920.

197949% Wham P (941) Sayles.19n Motb L

• La pawa Power Staton, San Ben;to_

Ekvcm 1931-1M E D (06) Ekooks,10%

• Porteret of servcoman Fermrne Bosquet,
• Coloto Creux Power Staton employee (A CPL and its prodecnsors since 1905
• ThAnciy at o.ght,1300s.
• CPL 6000.19a
• Foreman
• Women's conynittee meet,ng ut V>oarnait 1929
• CPL togo.1972
• Power plant generators 1920s
• Hu+ncano wamog poster e SIP trAnamiMor11.f)e5 and brnWen

. hlustration 2 1929-105')

• Cox1 Cents ego a 1929 stock maAct crash
• *We Wotit Forget
• yerow,ibbon campa go,1991
• Eag'e Pass hydro pWnt.
• Scwh Tena), Prcyrct Doct:ic Gerwodng Staton
• " Courteous Service At*ay2J Ctwpus Chnstt 1936.
• Presidents Tronas V. SrocMey 11!,19971989,
• James C. Venned/, presioent.1T61929, ana Robert H Cny,1990-vu chairrrwi 1930 1911.
• Wddide. Ror,eato spoorM wirto-taMd deer, asprey,
• E D Noiswange;, precident, 1030 1931.

heron eodhsh arv American a% gator.

• Gererath.g staton, Victoru,1931
• Generating staton, Tbre i R,ven s 1931.

.

• Kt hsator refngerator,1930s
• Home othee buildd0, Corpus Chest!,1932.
• CPL kyo,10%
• World WY ll Corn;:any Ro1 of Honor, saer, woman in work force, band nrAe, and empbyees f k1ing bicycle $

10 CCf%CVG tetoutces. '

• Lon O. HW, Jr, presdont, 3939-1954.
• CPL service non,1940s.
• Non ice truck, Kngwl'rs 1946
• CPL's radio utation KRMV, Corpus Chnsth 1942.

/

• J. L Cates, president,1954-19M e Semccmenf 1960s.
• Line cresw,1950s.
• La Palma Power Sta:ba.1940
• Trarsmisson constructm crew,1914
• Viewing televson.1950s

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f '"

.; { i-[F f. i.__ s rv 1

• }~

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f. - ( k _

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y2~. .... ~.. -......-~ _._... _., _ g= - y;.,,,,;,, y-. !,., f e '; ' '

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FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (X) ANNUAL ItEPORT PURSUANT TO SECTION 13 Olt 15(d) OF TlIE SECURITIES EXCHANGE ACT GF 1931 (FEE REQUIRED) i For tne fiscal year ended December 31,1991 OR (. 1 Th4NSITION liEPORT PURSUANT TO SECTION 13 01115(d) OF Tile SECURITIES EXCIIANGE ACT OF 1931 (NO FEE REQUlltED) For the transition pe161 from _ to COMMISSION FILE NUMBER 0 346 CENTRAL POWER AND LIGHT COMPANY - (Exact name of registrant an specified in its charter) TEXAS 74-055000() (State or otherjurisdiction of (IIL9 Eniployer incorporation or organir,ation) Identificati.m No.) 539 North Carancahua Street, Corpus Christi, Texas 7&i01<2802 - (Address of principal uccutive offices, including c.lp code) r Registrant's telephone r. umber, including area code: 51W8815300 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registermt None None Securities registered pursuant to Section I?(g) of the Act: Cumulative Preferred Stock, $100 Par Value (Title of Class) s Indicato by check mark whether the repletrant (1) has filed all repor ts require,d to be filed - and (2) has been su(bject to such filing requirements for the past (M) days.Yes. X No -by Section 13 Indicain by check mark if disclosuin for delinquent filers pursuant to hem 405 of flegulation - S K la not contained herein, and will not he contained, to the best of the registrant's knowledge, in definitivo proxy or im'ormation statements inonrporated by refereneo in Part III of this Form 10-K or any amendment to this form 10-K [X], Number of shares of Common Stock outstanding at December 31,1991: 6,755,535 (None of such rhnres am held by nonaffiliates.) DOCUMFNTS INCORPORATED IW REFERENCE Pages 21 - 38 of Central Power and Light Con.pany's Annual lleport to Stockholders for the your enaed - December 31,1991 are incorporated into Part II hereof. t r-,- ,n ,r v k

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TABLE OF CONTENTS l Page ,i DEFINITIONS 3 A PART i . ITEM 1. DUSINESS 4 REGULATION-AND RATES 4 s SOUTH TEXAS PROJECT 5 ) OPE RAT.t ONS 8 l ' OPERATIllG STATISTIC 3. 10 CONSTRUCTION AND FINANCING. 11 l FUEL SUPPLY 11 l ENVIRONMENTAL MATTERS 12 ' ITEM 2. PROPERTIES 15 j ITEM 3. LEGAL' PROCEEDINGS 16 ITEM 4.- . SUBMISSION OF MATIERS TO A VOIE OF SECURITY HOLDERS + .16 ~ 4 PART !! ITEM.5.--MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS'. 17 2 ITEM 6. SELECTEP FINANUIAI. DATA '. 17 ITEM 17.- MANAGEMENT' S DISCUSSION AND A14ALYCIS OF. FINANCIAL g CONDITION AND RESULTS 05' OF'ERATIONS. - 17 4 . ITEM 8.._ FINANCIAL STATEMENTS AND SUPPLEMENTAhY DATA.-. 17 w ITEM '9. = CHANGES TN AND.DISAGRE',MENTS WITH ACCOUNTANTS ON ' ACCOUNTING AND FINANCIAL DISCLOSURE. 17 i i PART III iITEM,10. ' DIRECTORS AND EXECUTIVE OFFICERS OF THE BFSIS7 RANT 18 i .ITEN.13j, EXECUTIVE. COMPENSATION 22 4 -ITLM 12.. SECURIT0 0WNERSHIP OF CERTA 1 A B",NFF'IC.t AL OWNERS-AND MANAGEMENT -.. :.. 26 ,'ITEH;l):,.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 26 - PART I/ y LITEM.14. ' EXHIBITS,(FINANCIAL STATEMENT SCHEDULES AND REPORTS 'ON FORM 8-K. 27: u ($ l [. s -Op,

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l DEFINITIONS The following abbreviations or acronyms used in this text are deilned below: Abbreviation or Aeronym Definition ALJ................. Administrative Law Judge AFUDC............... Allowance for it.nds used during construction Austin.............. City of Auctin, Texas Btu................. Urltish thermal unit CEO................. Chief Exetutive Of fitter CERCLA.............. Comprehensive Eevironmental Response, Compen s at ior. and Liability Act of 1980 code................ Internal P.evenue Code of.1980,, an amended Company............. Central Power and Light Company, Corpus Christi, Texas Court of Appeale.... Court of Appeals, Third District of Texau, Austin, Texas CSW....... Central and South West Corporation, Dallas, Texas CSW System.......... CSH and its subsidiaries CWIP................ Construction Work in Progreen District Court..... State District Courts of Travis County, Texas Electric operating PSO, SWEPCO, WTU and the Coepany companien...... 4 EPA................. United States Environmental Protection Agency ERCOT............... Electric Reliability Ccuncil of Texas FERC............... Federal Energy Requietory Commienion HLP................. Ilouston Lighting & Power Corapany Holding Cottpany Act. Public Utility Holding Comp'eny Ar:t of 1935, an emended HVdc................ '.ligh-voltage direct current Kw.,............,... K11owat t Kwh................. Kilowatt-hour Mef................. 1,000. cubic feet Mw..... Mogavatt Oklaunion..... Ox.sunion Pc. wor rtation Un!t No. 1 CPUC................ Texas Office of lublic Util dy Counael PCB.................. Polych.torinatsr l biphenyl e PSO................. Public Service Company of Oklahoma, Tul v, Oklahoma PURA................ Public Utility Regulatory Act RCRA................ Federal Resource conservation and Recovery Act of 1976 San Antonio...... City of San Antonio, Texas SEC................. Securitten and Exchange Commionion Staff............... Pualic Utility Commission of Texas staff E STP............ South Texas Project electric generating station SWEPCO.............. Southwest ern Electric Power Company, Shreveport, Louisiana T.\\ C B................ Tuxas Air Control Board . Tex a o Comm! s o it a.... Public Utility Commissier, of Texas TWC................. Texas hater Commission Westinghouce........ WestinghouMr Electric Corporation WT0................. West Texas Utilities Company, Abilene, Texas 3

PART 1 ITEM 1. 11USINESS. The Company. The Company, a Texas corporation, ib a public utility engaged in generating, pu': chasing, transmitting, riistributing and selling electricity in south Sexat. It in a wholly-owned subsidiary of CsW, a regiutored hol. ling company under the Holding Company Act. At December 31, 1091, the Company supplied electric service to approximately 566,000 retail customero in a 44,000 sqaare mile area with an estimated population of 1,939,000. It o4ppliod at wholer=mic all or a portion of the o eloctric energy requirements. of two municipalitieu and five rural electric cooperatives. The three largest metropolitan areas cerved by the Company aro Corpus Christi, Larodo and !O Allen, which have est irnated populations of 264,000, 170,000 and 92,000, respectively. The economic base of the territory served by the Company includes manufacturing, metal refining, petroleum, agriculture and tourism. In 1992, industrial customers accounted for approximately 20% of the Company's total operating revenues. Contracts with rubstant.lally all industrial cuutemers provide for both demand and energy charges. Demand charges continue under such contracts even during periods of reduced industrial activity, thus mitigating the offect of reduced activity on operating income, REGULAT10!f AND RATES Regulation. The Company, an a subaldiary of CSW, is subject to the 3 jurisdiction of the SEC under the Holding Ccmpany ?.c t wtth respect to the issuance, acquinttion and sale of securities; acquinition and sale of certain anseto or any interent in any business, including certsin aspects of fuel exploration and devtlopment programs; acersunting practices and other mattero. The FERC has jurisdiction under the Foderal Power Act over cert esin of the Company's electric utility facilities and operationu, wholesale rates, ind certain other matters. The Texae Commission has exclusive jurirdiction over accounto, certificatio.1 oi utility service territories, uale or acquisition of certain utility property, twrgers and cortain other matters. Neit ber the Texas Commission nor the governing bodies of incorporated municipalities have jurisdictlon over the issuance of securities. ~ Rates. The Texas Commission has origin 11 jurisdiction over retail rates in the unincorporated areau of Texas. The gove ning bodien of incorporated tJnicipalitien have tiuen jurisdiction over rates within their incorporated l im i.t s. Municipalities may elect, and come have elected, to surrender tnie jurisdiction to the Texas Concis s ion. The Texas commienion has "Je novo" appellate jurisdiction over rates cet by incorporated municipalities. Electric utilities in Texas are not allowed to make autcmat ic adjust.monto to recover changes in fuel costo f rce retail cuttomers. A utility is allowed to recover its known or reasonably predictable fuel coats through a fixed fuel f actor established during a general rate case, f uel reconciliation promeding or interin fuel proceeding. An interim fuel proceeding is conducted at. the request of a utility when a utility han materially over-recovered and projects to materially over-recover its known or reasonably predictable f uel.oute or under such other circumstances upon the initiative of the Texas Commission. In the event that reasonably unforececable circumstances have resulted in a materrial under-recovery of known or reasonably predictable fuel costo, a utility may petition the Texas Commission for an emergency interim fuel factor. The Texas conniesion munt act on such petition within 30 days. In the case of an over-recovery in excess of 4% of annual fuel coats, a utility must file a petition to make interim refunds and such pntition may be grantod by the Texau Cc.wnianion without a hearing. The Texao Commission cun and has granted changen in the fixed fuel factors outside of the aforementioned proceedings after a show of good cause. Final reconciliation of fuel costs is made at the time of the utility's 4

? 4 9, ~geners.1 rate case or a'roconciliation proceeding. In the event that the Company i does not recover all of its. fuel costs under the above procedures, such event could have an adverse impact on not income. In January 1991, the Company reduced its fuel f actor by $21 million, on an annual basis, in ronjunction with the STP i Unit ' 2 settlenent discussed below under " SOUTH TEXAS PROJECT." In August 1991, the Company refunded $19 ' million of over-recovered fuel costs, lacluding . interest, and also reduced its fuel factor by $24 million, on an annual basis, in accordance with Texas connianlon rules. All of the Company's contracts with its wholesale customers contain FERC -approved f uel-adjustment provisions that permit it to automatically pres actual Juel costa (including those associated with purchased power) through to its customers. See " SOUTH TEXAS PROJECT" for information as to rates relating to STP. l SOUTH TEXAS PROJECT i introduction. The Company owns 25.2% of STP, a two-unit nuclear power plant l which is located near Say City, Texas. In uddition to the Company,- HLP, the project manager, owns 30.St; San Antonio owns 2d.0s; and Austin owns 15.04. STP i Unit I was placed in cervice in August 1980 and STP Unit 2 was placed in service in June'1989. STP Final Ordere. In October 1990, the Texas Commj esion issued a final order ("STFURTF1 Order") which fully implemented a stipulated agreement filed in February -1990 to - resolve docketn then pending before the Texas conoinsion. In December 1990,-the Texas Commission issued a final order ("STP Unit 2 Order") which fully itnplemented a stipulated agreement to resolve all issues regarding .the Company's investment in STP Unit 2. The STP Unit 1 Ordor allowed the Company to inctease retail base retes by '$144 million. Thi s base rate increase mado permanent a $105 million interim base rate increase p1 aced into effect in March 1990 and a $39 million interim base rato increase placed into ef fect in September 1989. The STP Unit 2 Order provided-for a permanent base rate increase of $120 million ef f ective January 1, 1991.: Tha STP Unit 1 Order also provided for the deferral of operating expenses and carrying coats on STP Unit 2.- A prior Texas Commission order (aea " Deferred Accounting".below) had authorized deferral of STP Unit 1 costs. Such costs are ~ ~ being recovered through rates over.the remaining life of STP. Also. the STP Unit - 1 Order' authorized use of Hirror Construction Work in Progress (" Mirror CHIP"), . pursuant to which the Company recognized $360 million of carrying costs as original' construction costo, and established a corresponding liability to cuntomers recorded J in other -doferred. credits on the balance sheets. L compliance with the order, carrying costs collected through rates during periods when CWIP was-included in rate base were a loan f rom custo.ners. The. loan in being repaid through lowee rates f rom 1991 through 1995, which approximates the = length of= time during which the carrying costs were collected froc customere. LTl.a Mirror CWIP liability is being reduced by the recognition of non-cash income .during the. period;1991-thcough 1995. ~ The STP Unit 1 and 2 Orders re3olved all issues pertaining to the reasonable . original-cost of,STP and the appropriate amount to be included in rate base. Pursuant to-the Texas Commission ordera, the or Aginal cost of the Company's total ~invehtment in STP is included in rate base. Aa-part of the stipulated agreement, the Company has agreed to f reers base j ratea-f' rom January 1,1991 through 1994, subject to-certain force majeure'evento . including double-digit inflation, major' tax increases, extraordinary increases- -in operating expenses or serious declines in operating revenues. The Company may file for lacreases in base rates, which would be ef fective af ter 1994 And subject. to certain limitations.. The fuel portion of customers' bills-will continue to

be adjusted following the normal: review and approval by the Texas Commission.

The: stipulated. agreements, as discussed above, were entered into by the company,n the Staf f = and a majority of intervenors including major ci+1cs-in the Company la service territory and major industrial customers. Tnese intervenors 5 i* s u.-. U-m. m o-.s n. .=..,-ew.,,m .e ~me-.-,----,.---# .. ~ - - e

represent a significant ma jorit y of the Company 's customers. Thu company and t he Texas St ate Agencies reached agreements, which were subsequently approved by the Staff and other signatories, whereby the Texas :;t a t e Agencien agreed 7t to oppose the otipulated cqreements in any re=pect, except wi+ h regard to de ad accounting and rate design issues in the SIP Unit 1 Order only. OPUC and a coalition of iew-income customero declined to enter into the utipulated agreements. In January 1991, he Texas State Agencies, OPUC and tb2 malition of ;ow-income customero filed appeals of the STP Unit 1 Order in the District Court requesting reversal of the deferred cecounting f or STF Unit 2 and other appocts of that order. In March 1991, The Texcs state Agencies, OPUC and t he coalit ion of low-income customere filed appeals of the STP Unit 2 Order in the District Court requesting reversal of tha*. order. Theso appeals are pending before the Dietrict Court. If these orders are uitimately reversed on appeal, the stipulated agreemente would be nullified a n t* the Company could experience a rigolficant adverse effect on its results of operatione. Management believes that the S'lP Unit 1 and 2 Orders will be upheld. Wholesale Rat e Settlement. I r. September 19?O, the Company reached a settlement PRholeeaTe set tTWnt") with all of its wnoleaale customers, except for one electric cooperative. The Wholesale Settlement called for an increase in whole7 ale rates of approximately $10 million in two steps, which were placed into ef fect in May 199C and Janunty 1991. The Wholesale Settlement in connintent with the STP Unie 1 and 2 Ordern in all other respects. Tne FERC approved the Wuolosale Settlement in July 1991. In December 1991, the Company entered into a settlement agreemer.t (" Cooperative Settlement") with the resmaining electric cooperative. The Looperative Settlement is substantially tre name as the Wholesale Settlement, except tha.t the Cooperative Settlement allows f or an early contract terminatior' apon specified notice and payinent of a termin,: tion f ee. A final order from FERL' on the Cooperative Settlement is expected by the end of 1992. Deferred Accounting. The company was granted deferred accounting for STP Unit 1 and 2 costa by Texas Commission orders. These orcers allowed the Ccmpany to defer cperating and maintenance costs, taxes, depreciation and carrying cento l until these costo were reflected in rates. Def erred accounting had an irmnediate positive etfeet on not income, but caeh earnings were not increased until ratee went into effect reflecting STP in service. The Certpany's net income for 1990 ano 1989 included $187 million and $138 million, roepectively, after-tax effect of deferred accounting. The 1989 amount included $28 million for STP Unit 1 attributable to 1988. The 1990 amount included $96 million of addit ional carrying cost deferrals for intere'it to the extent of actual interest enargen incurred in 1988 and 1989. AFUDC in 1990 r,:$ f l ect s a reclassification of approximatcly $27 million f rom AFUDC-debt to AFUDC-equity in accordance with the STP Unit 1 Order. Pursuant to the STP Unit 1 and 2 Orders, the Company's rates include recovery of all STP Unit 1 and 2 deferrals over the remaining lif e of the plant. OPUC ed the Texas State Agencies filed appeals of the Texas Commina ton's final order in District Court requesting reversal of deferred accounting f or STP Unit 1. In Septemb6r 1990, the Ctstrict Ctart issued a judoment affirming the Texas Commission's order for STP Unit 1, which was subsequently appealed by OPUC and the Texas State Agencies. Oral argLment weg heard in October 1991 by a Texas Court of Appeals. The hearing of the Company's STP Unit I deferred accounting order was combined by the Court of Apoeals with similLr appeals of HLP def erred orders. I* the Company's orders granting deferred accounting are ultimately reversed, the Company could experience a significant adverse effect on its resulta of operations. Management believen that the company's deferred accounting ordece will be uphel<*. In August 1991, the Texas Court of Appeals issued an opinion in a case involving an unrelated electric utility, cisallowing certain aspects of the deterred accounting treatment followed by that utility, which is cimilar to that authorized by the Texas Comi=sion f or the Company. The utility has filed a 6

-_.__________-______7 i motion for rehearing of the Coart of Appeals opinion, which is pending. Hanagement believes that this opinion was based on an erroneous interpretation - of the applicable state law, and will not control the ultimate resolution of the appeals of the Company's deferred accounting orders. ~HLP Arbitration. In 1983, Austin filed suit acminst HLP alleging, among other things, certain breaches of the STP Participati n Agreement. The suit was j transferred on change of venue to the District Court in Dallas County (Dallas l District Court). In January 1988, HLP filed a third part y action against the l Company, CSW and San Antonio as part of the Austin suit, seeking indemnity, contribution and certain other relief. The Company and San Antonio responded to the ' third party act ion with a counterclaim f or damages and a motion to compel binding arbitration of disputes, among other things. After the third party action was severed from it, the Austin suit proceeded to trial in July 1989, where HLP won a take nothing judgment. Austin han appealed the judgment to the l Dallas court of Appeals. In August 1990, the Dallan District Court granted the Company's and San Antonio's motion to compel arbitration of disputes with HLP. Since that time. i the Company and San Antonio have prevailed in each o' the proceedinge in which i HLP has challenged certain aspects of the arbitration procedurea, and in the 1 appeals of such proceedings. On January 27, 1992, HLP filed a requent for writ of certiorari in the United States Supreme Court esserting denial of its constitutional due process r;ghts in connection with tt.a arbitration, to which the Company is expected to respon in late February 1992. The United $tates Supreme Co,trc's decision whether t o grant cer tiorari is pending. The Company and JSW arc engaged in settlement discussions with HLP, but no settlement has been reat^ed. Although management cannot predict with certainty the ultimaco outcome of the various disputes with HLP, it believes that 6uch outcome will not have a material' adverse ef fect on the company's resulto of operations. - Westinghouse Litigation. The Comr>any and other owners of STP are plaintif f s in a lawsuit filed October 1990 in the District Cc.urt in Matagorda County, Texas -against Westinghouse, seeking damages and other relief. The suit alisges that Westinghouse supplied STP with defective steam generator cubes that are k susceptible to stress corrosion cracking. As a result of the termination of a i etandstill agreement with the STP owners in November 1991, Westinghouse is required to file an answer to the suit by Har;h 2, 1992. To date, no stress corrouion cracking in STP's steam generator tubes has been L detected. Managetrent. believes, based on -industry experience and the analysis of various experts, that any such problem would develop gradually and could be monitored by the. operators of STP.'An accurate ectimate of the costs of remedying any such problem currently is unavailable due to many uncertainties, including among other things, the timing of repairs, which may coincide with scheduled outages,;and the recoverability-of amounts fro.: Westinghouse and any insurera. Nuclear Insurance. In connection wit h the licensing and operation of STP, the owners have purchased the maximum limits of nuclear liability insurance as required by law, and have executed indemnification agreements with the Nuclear Regulatory-Commission, in accordance with the financial protection requirements of the: price-Anderson Act. -The Price-Anderson Act, a comprehensive. statutory arrangement providing limitations on nuclear liability and governmental indamnities, is in ef fect until August 1, 2002. The limit. of - liability under. the - Price-Anderson T.ct for ~ licensees'of nuclear power plants is $7.8 billion per incident. The owners of $TP. are -insured for -their share of this liability through a combination.of private insurance amounting to $200 million and a mandatory industry-wide program - f or self-insurance totaling $7.6 billion. The maximum amount that each licensee may be assessed under-the industry-wide program of self-insurance following a nuclear' incident at an insured facility is $66.15 million (which' amount may be adjusted for inflation) for each licensed reactor, but not more than $10 million ~ ~per reactor for each nuclear incident in any one year. The Company and each of 7 ? i' 1 ___-,_.a.,_._____a__ ,_a_,.-~,-_-. -m

the other STP owners ace subject to such ansessnents, which t he Company and t he other owners have agreed will 1:e borne on the basis of their respeoctive ownership intereste in STP. For purpocos of these a s sesment s, STP has two licenced reactors. The owners of STP currently maint ain on-site decontaminat ion Itability and property damage ineutance in the amount of $2.5 billicn provided by Arner i ca n Nuclear Inourers and Nuclear Electric Insurance Limit ed. Policiers of insuranco issued by Arterican Nuclear insurern and Nuclear Electric Inourance Limit ed stipulate that policy proceeds reu s t be used first to pay decont aminat ion and clean-up costo, befcre being used to cover direct loswa ta property. The Cor:pany and the other owners of LTP have entered into an agreement that providna for the total cost of decontamination liability and property insurance for STP (including premiums and anseenmento) to be shared pro rata babod upon each owner's respective ownerchip interesto in STP. d OPERATIONS -Peak Loads and System Capabilities. The f ollowing table sete f orth f or the years lT6~through 1941 the net wystem capabilities of the Company (including the not of contracted purchases and contracted sales) at the time of peak demand, t he maximum coincident system demand on a one-hour int egrat ed banio (exclusive of sales to other electric utilitles) and the respective amounts and percentages of peak demand generated by the Company and net purchases and salen Percent Increaue Maximum (Decrease) Net Purchases Coincident In Peak Generation at (Sales) At Net Systern System .emand Time of Peak Timo af Puak Capability (a) Demand (b) Over Prior Year Mw Hw Period Mw Mw 1989 3,964 3,145 4.4 3,2.11 102.7 (66) 2.7 1990 4,025 3,110 (1.1) 3,077 98.9 33 1.1 1991 4,005 3,291 5.5 3,424 104.0 (133) (4.0) (a) Doee not include 452 Mw of system capability in long-term storage as described uni "lTEM 2. PROPERTIES -- Facilitics." (b) Maximum coinc.ient system demand occurred on December 22, June 25 and August 21 in ti years 1989, 1990 and 1991, respectively. The Company is a member of ERCOT, which alco includes Texas Utilities Electric Company, HLP, WTU, Texas Municipal Power Agency, Texas Municipal Power Pool, Lower Colorado River Authority, the municipal systems of San Antonio, Austin and Brownsville, the South Texas and Medina Electric Cooperatives, and coveral other int erconnected systemn and cooperatives. The ERCOT members interchange power and energy on firm, economy and emergency bar eu. The Compan', also engages in economy int erchanges wit;. the other electric opurating compe. nice in tue CSW System. The CSW System operates on an interstate baalu to facilitato orchanges of power. PSO and WTU are inttrconnected through the 200,000 Kw North HVdc Tie. In 1987, the FERC issued an order approving the Fast HVdc Tie and specif ying that it be built by August 1991. "'he Ea st HVdc Tie is proposed to be a 600,000 Kw back-to-back direct current terminal built in two 300,000 rw stages at SWEPCO's Welsh Power Plant near cason, Texas and a 16 mile, 345 kilovolt alternating-current transmission line from the Wolah terminal to Texas Utilities Electric Company's Monticello Generation Station near Mount Pleasant, Texao. The East HVdc Tie is presently proposed to be owned 53% by one or more CSW clectric operating companies with the balance to be owned by nonaffiliates. Because of unforeseen delays in beginning the certification and const ruction program relating to the negotiation of the Participation Agreement and disputes regarding transmission service over the interconnection, the co-owners were unable to meet the original August 1991 completion date. In August 1991, an agreement was 8 l 1

MW a; ~ .g y ;i. 7 W. 't -g J t ~ c -, ;, b @; 6 .V c ~..m yf"V;+F n 7 xchcheWamong.the c7-owners ond a puthlorikas filo at, the FF.EC req 4esting that qF Die s=:, ; Voe)InteVconnection' order be revised toLallcw costlet ton of the fire.t -300400 Kv f in:i, J otags-of,-thefantarconnection no'1 Atos than Auguwt'1996 and the: completion <of the ? Jim < ( *jlsecond 300,000 Kw st.6ge J r.o. Ihter ~ then. Avguet = 1,%B.. In - Deceinber 19914 tt.e FEhc - s l ..+h? modified 11ts ewder.to petmit -the new completicri scheduie lot the East HVdc Tie.. Qf, ' .' A certiJ;icats of'Ccnveniencu and NeceWity still aust be.obtained frcam the Tnas : Mft t y Commission.- Management believes that the delays will not have a material adverse-n g,",*' .,effect onLthe~ccnpany'vlr Mults of operations.= g. At' December 31,c1991,.the company had 2,330. employees, -. E3ployees. .M# @Q} %.s N-y. 'ig. u 's yp ,su W 4

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p? Yeare Ended Decerrber 31,

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,;q~ - KILOWATT-HOUR SAMS ! (Nil' Lonsl : .. - = -.. 20+ ?Rasidential...'......i,........ 5,416 5,368 5.278 -P & marcial .l...........s....... 4,21$ 4,160 4,086 s Q, sinduatela1-.. 4... i........... 5,334 4,012 4,588 W. lOther y..?.......i.......,.,.... 396-396' 395 gg ) . S ales to -ret nrl custcurere _...... 13,441 .14,736 14,347 W,, ~ OF Sales Dr rwscle............,. 1,485 986 960 'R o .~ 'd .TotaA.. ......c..... 16,926 15,722 15,307 s cp

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==.u. .. m. r N k SUMEER'OT ELECTRIC CU57 X ERS'AT END ,,m' . OF L SEIO0 t Realdential./.....i..../...,, 183 627 475,555 467,672 ',y ' E4",once rcia.*................... 72.520 72,243 71.753 Industrialy-......',...,....1,... 6,413-6,459 -6,434 i y Elects.tc Ttilir.ies'and orhst... 3,508. 3,625 '3,442 [fn]n gy-y ,'J~ 17d31; ;,4,=,,,,,,,,,,,,,,,, 565,066 .557,882 549,301 sy s

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11,492 11,454 11,461 Revnnue, per.' erusto:uer...... e... 19As $791 $679 ,,% ven ue L.. prer Jtwh '............... 7.964 6.904 .93t 7 <[y N'EVENUES PIR 51 f 0N -TOTAL SALES... 6.49&. 6.034 5.47% TUEM CdST' DATA: J , : Averaepf Stu per net Kwh...... -10,309 10,328-30,402 "' W '. Confic. per million Stu.......... $1.73 -$1.87 51.99 a 'y ' ' 2 Cost'per Ewh generated ~......... .1.79% 1.944-2.07%

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-x,, Vovenue".....a. 27.6 32.6-30.2 ,'I4 h

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In past years the Company has experienced some loss of industrial load due either to planta closing or the installation of cogeneration facilities. The company has. implemented rates which are designed to provide competitive rates for present and new industrial customers. The company has executed new contracts with the majority of its large industrial customere which extend until at least 1993. CONSTRUCTION AND FINANCING construction. The estimated total capital expenditureo (including APUDC) for the years 1932-1994 are as follows: 1992 1993 1994 Total (Millions) Generation........................ $ 15 $ 11 $ 13 $ 39 ". r a n sm i s s ion...................... 25 88 40 153 Distribution.................. 43 46 47 136 Fuel..................... 4 19 8 13 40 14 la 23 55 Othe- { Total $116 $171 $136 $423

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Information in the forencing table is subject to change due to numerous factors, including the rate of load growth, escalation of construction costs, changea in nuclear and environmental regulation, delays f rom regulatory hearingn, the adequacy of rate relief and the availability of necessary external capital (see " Financing" below). Changes ir. these and other factors could cause the Company. to defer or accelerate construction or to sell or buy more power, which would af fect its cash position, revenues and income to an extent that cannot now be' reliably predicted. ' Financing. The Company anticipates that its capital requirements during the 1992-1994 period will be provided from internal sources. The Company does not expect to require any additional long-term financing during the 1992-1994 period. FUEL SUPPLY General. The Company's _ present electric generating plants showing the type of fuel used are set forth under " ITEM 2. PROPERTIES." During 1991, approximately 54% of Kwh generation was from gas, 25% from coal, 21% from-nuclear fuel and less than 1% other. Nature.1 gas consumption totaled 91,675,405 Mcf and coal requirements were 1,941,177 tons. Natural Gas. The Company's eight gas-fired electric generating plants are supplied by 15 separate long-term natural gas purchase agreements accounting for approximately 55% of the total gas requirements in 1991. The balance of the company's natural gas requiremente could have been supplied under existing it.,ng-term arrangements; however, w'.th the favorable spot market conditions existing during the period, the Company elected to purchase these requirements under spot market arrangements. The Company's principal gas supplies are those provided -under agrooments with Valero Transmission Company, Enron Corporation, Corpus Christi Gas Marketing, Inc., Celhi Gas Pipeline, or thexr affiliates. They supplied approximately 27b 22b 12 % and 11 % respectively, of the company's Ltotal natural gas purchases. Including spot market suppliers, the Company had 36 individual suppliers of natural gas during 1991. Coal. The Company's two coal-fired electric generating plants, Coluto Creek .an i joTnTly owned Oklaunion, are both primarily supplied by single long-term coal . purchase agreements. At Coleto Creek, the long-term agreement, which expires in .1999, is with Colowyo Coal Company and it provided approximately 69% of the coal 11 = - - _ _ _ _ - - _ _ - _ _____- - _-_____ ________ _ __ __ _ _ _ _ _

requirernents of the plant for 1991. The Company's obligation with Colowyo for 1992 through 1994 in approximatal) 60% of Coleto Creek's requirements and 25% from 1995 through expiration. The coal is mined in northwestern Colorado and in transported approximately 1,400 miles under long-term rail agreements with the Denver & Rio. Grande Western Railroad Company, the Burlington Northern Railroad Company and the Southern Pacific Transportation Company. The balance of the Coleto Creek requirements are currently being procured on the spot market. The Company owns sufficient cars for operation of three unit trains, and has negotiated contracts with the rail carriers involved which have been accepted by the Interstate Commerce Commission. At year-end 1991 the Company had approximately 316,000 tons of coal in inventory at Coleto Creek. At Oklaunion, the long-term coal supply is provided under a contract expiring in 2006 with Exxon Coa. USA, Inc. This agreement is for Wyoming coal which is transported approximately 1,100 miles to the plant by the Burlington Northern Railroad Company. Approximately 78% of the total 1991 Oklaunion coal requirements for the Company were supplied under the Exxon Agreement with the balance procured on the spot market. The Company's sharo of the year-end 1991 coal inventory at Oklaunion was approximately 36,000 tons. Nuclear Fuel. The nuclear fuel cycle entails several steps, including purchase of uranfum concentrate, conversion of uranium concentrate to uranium hexafluoride, enrichment of uranium hexafluoride into the isotope U235 and fabrication of the enriched uranium into fuel rods and fuel assemblies. Fuel requirements for STP (see " ITEM 2. PROPERTIES -- SOtTH TEXAS PMATECT") are being handled by a comittee comprised of representatives of all participants in STP. The Company and the other STP participants have entered into contracts with suppliers for uranium concentiate suf ficNnt f or the operation of both STP units through 1995. Enrichment contracts have been necured for a 30 year period for each unit. Contracts have been secured for conversion services for both units through 1993. Also, fuel fabrication sarvices have been contracted for the initial :: ores and 16 years of operation of each unit. The Company belleves it will be able to obtain adequate supplies of nuclear fuel components and services required for the life of STP. The Company and the other STP participants have entered into a waste disposal contract with the Department of Energy. Under this contract, the Department of ".nergy will ultimately take possession of all spent fuel from the STP units. STP has on-site storage facilities with the capability te store up to 40 years of spent fuel discharged from each uni.t. .; Governmental Regulation. The price and availability of each of the foregoing fuel types are significantly af fected by governmental regulation. Any inability in the future to obtain adequate fuel supplies, or adoption of additional regulatory measures restricting the use of such fuels for the generaticn of electricity, might affect tne Company's ability to meet economically the needs of 4.ts customers and could require it to supplement or replace, prior to normal retirement, existing generating capabi).cy with units using other fucle. This would be impossible to accomplish quickly, would require substantial expenditures for construction and could have a significant adverse effect on the Company's financial position and results of operations. Fuel Costs. Information as to the historic costt, of fuel to the Company appears under " OPERATING STATISTICS." For 1991, total average cost of fuel per million Stu was $1.73. Average costs per million Stu by major fuel type were $2.03 for natural gas, $2.16 for coal and $0.5", for nuclear. The Company is unable to predict accurately the future ecst of fuel. ENVIRONMENTAL MATTERS The Company is subject to regulation with respect to air and water quality and solid waste standards, along with other environmental matters, by various federal, state and local authorities. These authorities have continuing jurisdiction in most casca to require modifications in the Company's f acilities and operations. Changes in environmental regulations could require substantial additional expenditures to modify the Company's facilities and operations and 12

- -,, - ~~ - - ~ -. I I could have a significant adverse _ of f ect on the Company's results of ' operations. The Company is not: a party.to any.11tigation or administrative proceedlugs.with respect to environmental matters,.except as described below ' Air Quality.. - Air quality standards and emission limitations are subject to .. with oversight by the EPA.. In accordanen Nith .the -jurisdiction.of the TACB, regulations-of the TACB,. permits are required for all generating units or, which constructionis commenced or which are substantially modified af ter the ef fective - date of the applicable regulations, The Company believes that' all of its present units comply. in all material respects with existing federal and state air quality and emission regulations. The EPA has approved-and may enforce the air quality - standards and limitations adopted by the TACB and has adopted ambient air quality standards applicable nationally, as well as new source perf ormance standards f or all new or substantially modified generating units. .. In November 1990, the United States Congress passed me Clean Air Act Amendments of 1990, which-place limits on the emission of sulfur dioxide and nitrogen oxides from gas, coal and lignite fired generating plants. The right i to emit sulfur dioxide from existing generating plants will be establioned based on historical operating condit ions. - These rights will be controlled through a L certificate of allowance. program. - These amendments requixe comprehensive 4 'rulemaking, which has not been completed, by the EPA. . Subject to the adoption of new regulations.and continued rulemaking, this .. legislation is not - meted to have a significant ef f ect on the company. Based on the latest facil ules plan, the company estimates nominal expenditures for monitoring and emission reduction equipment for existing plants. The company - continues to evaluate the new EPA regulations and pursue the mon cos' affective options-_available under these-amendments. Water Quality. The TWC and the EPA have jurisdiction o_ver all wastewater discharges-into state-waters. The TWC bas jurisdiction for establishing water quality standards.-and issuing waste control permits covering discharges which might affect-the quality of state waters. The EPA has jurisdiction over " point source" discharges through the National. pollution Discharge Elimination System provisions ' of-the ' Clean Water Act. The, Company believes that all of its ' f acilities - comply - in'. all ' material : respects with existing federal and state wastewater. discharge regulations. Soll'd Waste Disposal.- The RCRA and the TWC solid waste rules provide for - comprehensTve control of all holid wastes from generation to final disposal. The + TWC.has received authorization from the EPA to administer the RCRA solid waste 1 control program for Texas.. The Company believes that it is in compliance in all -. material respects with all such applicable regulations. CERCLA and Other. Under CERCLA, owners, : operators,- transporters and/or generators of: hazardous. substances for - disposal-can : be - held liable L for the cleanup of hazardous substance; disposal sites which pose or'may pose an 1:winent risk to the environment..Similar liabilities for hazardous substance disposal can arise under applicable state law. In. November- - 1985, the TexanL Attorney General ' brought suit against the - Company under the Solid Waste Disposal :Act and Chapter 26' of the Texas Water ~ Code. ' This suit : alleged that.the Company was one of the parties responsible for 'PCB contamination at~the. Industrial Road.and Industrial Metals site:in Corpus .Christi, Texas and therefore, should share the responsibility for cleanup of the site. The site.was;used by several metal salvage companies for the salvage of various materials. purchased from electric utilities, including the-Company, and' others. The Company actively participated in the development of the closure plan lc for the site which.was approved by the TWC. Closure of -the site was completed, ,with. thel Company.as.one 'of the -maneging participants and the closure Certification Report was nubmitted to the TWC in December 1990. Total costs 'e -incurredcby the managing participants to date have been $3.9.million. Significant cost recovery from other defendants is expected. No additional major costs s.o'the Company are anticipated. Two additional lawsuits relating to this site have been filed naming the 13

4 ' Company (a.i one o~ f - the defendants. They allege property damage ~ and health -.impairmunt affecting residents near the site, resulting from operations on.the isite and closure activities. -Management believes that the ultimcte resolution ofl these matters will not have a material adverse ef fect on the Company! s results of-operations.. In Decetaber 1986, the EPA named 650 entities - including the Company as - potentially responsible parties for removal of PCB artic'les and materials st.ored. at.the ncw defunct EPA-permitted PCD disposal. site in Missouri, formerly operated - - by Martha.C. Rose Chemicals, Inc..In. August 1988, the Company made payment of approximately $170,000 to the Rose Chemicals Steering Committee representing the 3 Com.cany's Consent Option Assessment. Management believes that this sum will be sufficient to satisfy the Company's entire liability for cleanup costs. From time to time the Company-is made aware of. various environmental issues or is'a party to various other legal claims, actions and complatnts related to environmental-matters. Management does not expect disposition of any environmental-matters to have a material adverse ef fect on the Company's results of' operations. bl. v r 1 L $r 5 Corpus Christi, Texas gas / oil 339 Coleto Creek coal 605 Goliad, Texas Lon C. Hill gas /cil(a) 408(b) Corpus-Christi, Texas ~ Nueces Bay gas / oil (a) SOB (b) Corpus Christi, Texas e Victoria gas /oll(a) 258(b) ' Victoria, Texas La Palma gas / oil 47 San Benito, Texas gas / oil (o) IS7(b) E. S. Joslin gas /cil(a) 255 Point Comfort, Texas J. L. Dates gas / oil (a) 185 Mission, Texas Laredo gas / oil (a) 70 Laredo, Texas gas / oil 106 Eagle Pass Eagle Pasar. Texas hydro 6 Oklaunion coal 54(c) Vernon, Texas South Texas Project-nucloar 630(d) Bay City, Texas Total 3,963 a suu (a) For extended periods of operation, oil can be used only in combination with gas. Use of oil in facilities primarily designed to burn gas results in increased maintenance expense and a reduction of approximately 15% in capability. (b) Excludes units in.long-term storage - 142 Mw at Lon C. Hill, 34 Mw at Nueces Bay,.228 Mw at Victoria and 48 Mw at La Palma. (c).-The Company owns 7.81% of the 686 Mw unit operated by WTU. (d) The Company owns 25.2% of the two 1,250 Mw units operated by HLP. All of the generating plants described above are located on land owned by the Company or jointly with the other participante in jointly owned plants. The -Company's electric transrission and distribution f acilities are for the most part located over or under highways, etreets and other public places or prvperty owned 15

.. ~.... ~ jp,ij - s W 16 y 5 -'s.

.liy othermi forlwhich permits, grants, easements-or -licenses (which the company believes to be satisf actory, but without examination of underlying land titles)-

g'

have, been J obtained., The-principal -plants and properties Lof-t-he company = are-

'Jaubjecteto the-lien of th4-first mortgage indenture under which the company's

first mortgage bonde

are issuedi:

ITEMb3.7. LEGAL PROCEEDINGS., See " ITEM 1. -:. BUSINESS -- REGULATION AND RATES" for information relating to regulatory proceedings, , e Soe '." ITEM 1. B'JSIN3SS -- SOUTH TEXAS PROJECT" for information as to panding legal proceedinos relating to STP. See " ITEM 1..- ' BUSINESS -- OPERATIONS" for-information relating to system interconnection. See " ITEM 1. BUSINESS -- ENVIRONMENTAL MATTER 5 ' for information relating ito. environmental proceedings. ,. ' The company -is party to varioca other legal claims, actior.s and complaints = arising.in the normal course of business. Management does not expect disposition - of these matters' to have a material adverse _effect on the Company's resulte 'of operations.L .f ITEM 14. SUBMISSION. OF MATTERS TO A VOTE 05' SECURITY' HOLDERS. .None. h 3-, -e d ti V.- t., w. lc. 16 I'

-.-~ -~.. 3 ^ \\ k PART II- '-a-l GT. ~ ITEM 5L : MARKET FOR REGISTRANT'S 'COMlfON EQUITY AND RELATED STOKHOLDER HATTERS. = All of' the outstanding. shares of Common Stock of the Cornpany are owned by ' ....its parent,"csW. ~ ITEM 6 -2 SELECTED FINANCIAL ~ DATA,_ -The informarion required-by Item 6 is incorporatrd by reference to page 35 of the Company's 1991 Annual Report to Stockholders. ITEM 7 2 MANAGEMENT'S-DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND. -RESULTS OF OPERATIONS. The infor:tation required by Item ] is incorporated by reference to pagen !36-38 ofLthe company'a 1991 Annual. heport to Stockholders. i - ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEME!!TARY DATA. The infcarmation required by Item 8 is incorporated by reference to pages 22-34 of'the-Company's 19911. Annua 1 Report to Stockholders. ITEM 9. CHANGES.IN AND DISAGREEMENTS WITH' ACCOUNTANTS'ON ACCOUNTING AND FINANCIAL ~ DISCLOSURE. y r (' None. h '4 $h , i.t. t 4 I.' 17

{gg.#, ~ y; , _l + .i i PART III 'l + LCSW i common " stock ' amountis cin---Item 10.' and ' Item 11 have been adjusted. to - 'I L - =reflectithe ttwo-for-one common : stock oplit, effected by a'100t comrnon - stock 6 dividend. paid March!6, 1992 to'-shareholders of record on February 10, 1992. . ITEM.10 '. DIRECTORS _AND EXECUTIVE OFFICERS OF THE REGIS" DANT. . f(a).f_The following is ailist of-directors of the company, together with

certain

-information with respect to each of them:

Name, Age',-Principal Year-Firot-Shares of CSW Common. Occupation,;.Bu siness Experience Became-Stock Beneficially; 4 ..__________.__m and Other Directorship 9 birector Owned (1)(2)

yy E. R.-BROOKS 1 AGE - 54 1991 39,042

^ Chairman, President'and Chief Executive Officer of CSW since February-1993.- President and LChief Operating Officer of CSW

irom-1990 to 1991-and Executive 1Vice President from 1987 to

-1989. President and CEO of CPL- -from?19864to=1987. ROBERT'R.'CAREY ' AGE - 54' 1989 694 President'and CEO of the x

Company ' sines January.1990..

' Executive'Vice President-and ?

Chief Operating Officer of the Company from 1989 to:1990.~

t

Vice t Presi dent,. Operations of-the. company from 1988 to 1989 and General Manager..of_the-

' Southern Region of:.the. -Company'in:1988. fManager, OperationstofLthe Southern Region:of the. Company'from >1986-ton 1988 ' Director of-JCorpus'Christi National 1 Bank,- LCorpus Christi,. Texas. IN 'RUBEN M.-GARCIA

AGE -'60 1981

-President.or-principal-of several. firms engaged primarily in-1conetruction.and: land. development 'in the Laredo, Texas area. Director of South Sexas National- -Bank, Laredo, Texas. i, I L 18 t -- E Uf

3y a c cy; - + + - . ~. s + 'l' ~ f)] i ; e -m ~q t Tbyj] =

Name,/ Age,:1 Princ 1 pal--

Year First 'SharouLof'CSW Common Occupati.onJ BusineesiExperience _ Became' Stock Benefleially [ .jl; @V tand:OtherfDirectorships~ LDire: tor Owned-(1)(2)- y - (. ...... ~............ -..... .( - i RG8ERTfA.'McALLEN-LAGE

• 57 1983 2,000

![ h h[

• L obertj AijtcAllen Investments, R

i LInc.,:Weslacc.-- Consultant:to j FirstjNational Bank,- Edinburg, j 4 u Texas.1 o m,., ~ '1990- .PETE MORALES,:-JR. . AGE. - - 5'1 ' l 's . President'and. General Manager pg of Morales Feed Lots, Inc., ^L. - Devine, Texas 2 l Director of "? i Devine State Bank,-- @p -; S. LOYD'NEAL,'JR.: AGE'- 54 -1990' ! President of W.L. Dinn_G Company, lInc.,'an innurance agency, Corpus 4" Chrinti,. Texas, p1 q Ii - ? JIM LJ 'PETERSON - AGE -~56 1589 -President _'and CEO of Whataburger, LInc._ Directoriof-First City-

-Bank of; Corpus'Christi.

p-iH.JLEE'RICHARDS AGE ~ 58 1987 2

M Chairman of-theiBoard of;Hygela N 1-Dairy company, Harlingen,. Texas. 'Q

Director'of1Harlingen National

s fBank,(Harlingen, Texas'.

7th bP.: RICHARD!SHAMBLIN. ' AGE ~46. -1990 2;439 8 4? (Vice President,LFinance'oflthe LCompanyfaincop1990. Controller of g CSW'from-'1989-to 1990.1: Assistant U-Vice President land Director of.. -Corporate: Taxes.and Inaurance of-4 y' "

3 1 CentraI?nnd South West Services, Yg Inc M aysubaldiary of.CSW,1 froml

"!,a ' L19851to41989. b Bk W.:TRAGUE; AGE - 53' 1904_ 4j047-

A,

Vice President, Marketingl J

f"land Businees, Development-

s ofJ the.CompanyVaince;1991. gc 'p (t ,Vice President, Corporate 3 g7

Servicce of-thescompan,y from.

g 4 .1988?. to-1991 a Senio6 Nice - a g,<, W L Presidenti_ Diutrict Pperatiosis-. S Vofithe Companyffrom:1986 L to 1988.:. ~ %W .w ; 1 p f:)( i s ,f E, ; 4 ' 39 e 3 J s y ) N o' ~

an a~

r-a

Name,-Age, Principal occupation, Business Experience. Year tirot Sharea of CSW Coramon Became Stock Benefici. ally 7 and Other Directorships Director Owned (1)(2) RICHARD P, VERRET AGE - 45 1988 2,928 Vice President,-Pogional Operationn:of tne Company since 1990; Vice President and Cntef Engineering Officar from 1987-to 1989. Vice President, Power of the company from 1986 to 19674 DALE E. HARD. AGE - 44 1990 6,712 Vice President, Engineering. and Production of the company since 1990. Vice Prorident and chief Engineering Officer of 'the Company'from 1989 to 1990. Vice President, Administration of SWEPCO from 1988 to 1989 and Vice President, Engineering operations of. SWEPCC from 1981 to 1988, All 21 directors and executive officorn as a group. 108,469 (1)- As of ' January 1, 1992, Nesara, Brooks, Carey, berret and Stice have t currently oxorcinable stock options granted under the C8W stock option Plan for 7,500, 1,500, 2,400 and 1,500 shares, reapectively, which amounto are not. reflected in this column. (2)' All directors' and executive ofilceta' shares owned as of January 1, 1992 as indicated ate owned directly, and aggregata less than 1.0% of the outstanding sharea of tiuch claen. All directora presently serving as executive oft'icera of the Company have been employed in a managerial or executive capacity witi a member or members of the CSW System for at least the past five years, and all outaide directoru have engaged in -their respective principal occupations Itsted above for a period of more than five years unless otherwise indicated. t i 20 4 i

(b) The following is a list of the executive of ficer~ who are not airectors of the Company, together with certain infornation with respect to each of them! Year First Eltected to Present __ _'o s i t ion. _ _ _...... l Name Age Present Position J. Gontalo Sardoval 42 Vice President, Corporate Services 1991 r T Davirl P. Sartin 35 controller 1991 t C. Wayne Stice 54 Assiotant to the President, 1989 Corporate Secretary Each of the directors and executive of ficera of the Company is elected to hold of fice until the first meeting of the company's Board of Directoro af ter the 1992 connual meeting of stockholders, presently scheduled to be held on April 14, 7-- 1992. Each of the executive of ficera liuted in the table above han been etaployed by the company or an af(Lliate in the CSW System in an executivo or managerial f capacity for at least the last fivo years.

T f

dL --? m a _-_s_ 'l y r s _y s 1 = ~r I = 9 = N w t 21 -a s \\, -m .__m__________

V f, = ..~ &@, t 'V y 4 h~ ' k 'WW -ITEM 11AiEXECUTIVE COMPENSATIOL W .--n y g-Cash' Compensation.- The following table.contains information with respect to cash-co.upensation pan by-: the company to each of the five moot ' highly compensated:evecutive' officers of the Company for all services rendered during.

1991 and'the: aggregate cash compensation _so paid by the Company during-1991 to all-of the Company's executive officers as a groups 1

t Name of Individual or-Cash Number in Group -Capacities In Whic* Served Campensation (a) M, Robert R.-Carey. President and CEO 275,449 i

Richard P. Verret Vice President, Regional 140,567 t

W> Operations ~ ~ q-5 ;- -P.-Richard Shamblin Vice President, finance 138,264 Dale E. Ward. Vice President, Engineering 137,305 and Production C. Wayne Stice Assistant to the President, 119,065 Corporate Secretary All_13 executive officera g; as a group. $ I,366,536 a)i.Does not include cost ls under group ' life,. health and hospitz.lization plans which do :not discriminate in f avor of directors-or of ficers of the Cor.pany - and;which are available generally to all. salaried employees. Also,. doe: not - include amounts; of - other compensation, if. any, wh ich might he considered personal benefits or securitien or' property paid or distributed other than. pursuant-to a plan. These smounts do not exceed $25,000 as to any named - individual. and, with respect to all executtve officers as a group, ~- do not exceed - $2 5,000 times the number. of persons in the group. Also, does:not include any portion of.the year.during which any individual was _ employed in a capacity other than executive of f icer of the Company. . Thrift Plus The company,-together with other-members of the CSW System, participatew in certain CSW System benefit plana. CSW provides a savings plan, 'Thrif t ' Plus,1which allows employees generally to -contribute up to 12% of annual s compencation. Participante may elect to have contributions made to the Thrift-Plus_on-their: behalf!on'a' pre-tax.or after-tax basis. 1Al1 regular,; full-time; { employees at least age.?l who have completed one; year' of service may participate a 'in the Thrif t Plus.. The first-% of contributed =omployee compensation is matched "R 50% by;the Company; 75% if the employee has 20 or.more years of.-service, provided Lthe employee-has participated Lin-Thrif t Plus for 'att.loast. 24 months. ) Contributions for. certain' participants, including executive of ficers,. may be ?1imited :ac required by the. Code. Employce contributions and matching Company if l contributions.may beninvesten in'one percent increments in one or more of the T following five2 investment options the. employee may select: CSW.Commen Stock

g; Option; Fixed i Income Options Capital. Appreciation Option; Growth and' Income

1. Opt onV and' Asset Allocation Option.. Amounts invected in the'CSW Common Stock i

10ptionjare invested in CSW's-Common Stock. Amounts invested in the Fixed Income 3, , Option are' invested'in' contracts iseued by insurance companies under which the c e issuer i.has: guaranteed.the principalJamount' and int erest thereon at a specified rate, in1similar. contracts issued by a bank or ~other financial institution,- cne 4 'or more, pooled. funds maintained by a.. bank or-trust-company -investing 'in such contracts," orL any-.other ' property the investment in which. would -' advance J the 4 primary: investment purpose of =the Fixed Income Option. Amounts invested in each .lof the Capital Appreciation Option and Growth and Income Opts.on will be : invested bin ; shares (of ' one ~ or more mutual -- f unds having:an investment purpose that is 4 consistent with the primary investment-purpose of the innstment option. Amounts ?s invested in the ; Asset A1)ccation Option will be invested, in such proportion as 22 y' I h) r e

[p x, 4 1 the Advisory Committee under the Thrif t Plus may f rom time to time determine, in

shares of one or ;more mutual funds having an investment purpose that is conaistent with the primary. Investment purpose of the inveetment option and in L

'short--term.tnstruments. which may include investments of the type held under the Fixed Incomo Optioc, Employee' contribations to the Thrif t Plus are nonforfettacle at all times. G9nera l5y, - matching Company contributions to the Thrift Plus will become nonforfeitable only af ter the employee haa made contributions to the Thrif t Plus for at least 36 months or completed five years of service. Subject to cert sin .llmitations and restrictions, employee contributions, matching Company -i centributions and, in each case, the investment' gains thereon may ba withdrawn by the employee prior to the termination of his employment. An employee 's Thri f t Plus accotnt.ganerally is distributable in fult after termination of service. The Thrif t. Pluo also permits an employee to borrow a portion of his account balance. Pour of the 5 persons whose compensat ion is reported it the table I participated in the Thrtit Plus in 1991. Company matching contributions during 1991 for Menu s. Carey, Verret, Ward and Shamblin were.$10,030, $3.719, $J,831 and $3,054, recpectively. Tota) Company contributions to the 13 executive I officers'as a group in 1991 were $39,$19. ~-Restricted Stock Plan. CSW established a Restricted Stock Plan in 1984 to assist TiG:iiicuring and retaining key executive employees of outstanding ability, and to - recognize. their best efforts cn. behalf of CSW and its subsidiaries, through'awardn of CSW Common Stock. Any employee who is responsible for the management, growth or protection of the business of CSW or Ats subsidiaries f.s eligible for awardu-under the Plan. The Plan percits CSW's Board of Directors (or a committee thereof, members of which are not eligible to participate in the Restricted Stock Pitn), at its discretion, to award up to a maximum of 1,000,000 shares of CSW Cornmon Stock, in the aggregat e, to eligible etcployees subject to certain adjustmente for a change in classification, subdivision or combination of shares..At January.1,-1992, 350,554 shares had been awarded under the Plan and 649,446 sharen were available fer - future issuance. In addition, in connection with any such award CSW?s Board of~ Directors determines the group of eligible employees and the testricted period over which such award will vest. No shares may be-awarded beyond April 19, 1994, the tenth anniversary of the Plan's effective date. Awards l under the Rentricted Stock Plan were made to of ficers and employees of CSW and its subsidiarien as et January 1, 1991. Messrs. Carey, Verret, Ward and Shamblin : received awards in 1991 of. 2,092, 580, 380 and 458 snares,- respectively. Seven of the 13 executive officers as a group were awarded 590 shares in 1991. The restricted period for currently outstanding-awards lapses as to 20% ot. the awards on each of the. first three anniverwartes of the date of the giant. and as to the remaining 40% ott the fourth anniversary, with' all restrictions : lapsing upon a Participant's death, total ' disability or normal retirement. Each Participant muut-render substantial servicss-to the Company L - on a regular basis during the restricted period.. If such service is not rendered

for such period, ercept by reason ot the Participant's death, total disability or normal retirement, the Participant will forfeit those shares which were previously c awarded ' and are still subject to the restrictionu.. During the-restricted period,.the-Participant will have all the rights of a ahareholder, including the ri'tht to receive ' dividends paid on such shares, except that the.

Participant'may not cell, assign, transfer, pledge or: otnerwise encumber the shares. LTne fair market value of chares to which restrictions _ lapsed in 1991 s previously awarded to Meesrs. Carey, Verret, Ward and Gtice were $2,362, $6,125, $10,019'and $9,056, respectively. The fair market value of shares to which restrictions lapsed in 1991 previously awarded the 13 cxecutive officers as a group'was.$64,177. Retirement Plans. Execu tive off3cers, like other employees, are also eligible torparticipate in the CSW System Penrion Plan, and all eligible persons whose compensation is reported in the table participated in the Pen 91on Plan, Contributions to the Plan are determired actuarially and cannot be readily calculated with respect. to. any ' individual participant or small group of participants-The amount of such co*:tribution is thus omitted f rom the table set forth'below. -For-purposes of' determining Plan benefite, compensation for each is 23 tc k I

of the individuals listed in the table le cubstar4tielly the same as the amountu 't set-forth in the table, n Pension Plan benefits depend upon years of credited service, age at retirement and amount of compensation. Compensation as dafined under the Plan includes. case salary, exclusive of bonusen, evertime, expense allowances, commissions (except in the case of an empicyee who le a salesman, a part of whose regular compensation is determined on a conuniesion basis) and other extraordinary remuneration. Assuminy retirement at age 65, a Plan pa r t i c i pa n'. would bn 1 eligible at retirement for a maximum annual pension beneftr as foilowo with such henefits being reduced by up to half of primary Social Security be,'_ fits payable at age 65): Anruel Benefit s Mter Specified Years of Credited Service Average Compensatica 20 25 30 or re ce i $100,000...................... $ 33,333 $ 41,667 $ S0,000 150,000...................... 50,000 62,500 75,000 200,000.. 63,667 83,333 100,000 250,000... 83,333 104,167 125,000 300,000..... 100,000 125,000 150.000 Messrs. Carey, Hard, Shat lim Stice and Verret had 24, 20, 6, 28 and 19 Years, reeptetiml/, of credated sarvice under the Pension Plan at December 31, 1991. " Average compensation" means the average annual compensation during the 36 consecutive mentt a oN hignent pay during thn 120 months prior to retirement. Undcr the CSW System Special Executive Retiremer.t Plan, an unfunded, non-qualified plan adopted in 1979, shr: Company provides supplemental compensation for persons au to whom -future benefit accruals under tne Pension Plan have been curtailed as a result of certain Code If mitations (" Excess Benefit Participants") and to - such other employaea ai specifically identified by CSW's Board of Directors ("Supplecentsi Benet1t Participants"). The Special Plan provides an Excens Hecefit Parcicipant a cenefit equal to the difference between (i) the benefit such Participant would have received under the Pension Plaa but for the apolicable Ccde limitations and (ii) the sun of the benefit act ually payable to such Particip/mi uider tt,e Pensi",n Flan (tr.tking into account such limitations) plus any'other retirement income payable trem any source. The benefit provided to a Sapplemnntat Bernfic Participant under the special Plan is calculated in the satte manner as fv: an Excesc Benefit farticipaat, e? cept that the benefit that the Supplemental.Penefit Participant would have *:eceived hut for the Code limitationn is to be deturmined by crediting auch Participant with thirty years of credited service ander the Pension Plnn reduced by one year of credited nervice for.each year (or portLon theresof) that such Participant *s employment with the Ccmpany in teminated for any reason prior to such Participant attaining age'airty-five (subject to waiver of such reduction by tne plan aininistrator). E xecu;.ive Inctntive Cc.rpens at ion Pian. In 1%9, CSW established the Execu Hite Incentive COtep ?nca tica Plan ( "Incer,t ive Plan"), an unfunded, nonqualified plan, adminintered by the 2xecutive Compensation Committee of CSW's-Board of Directorn ( " Commit tee ** ). The eligitility of executives (officers or senior managera et CGU or its mbsidiarien) to receive awards under the Incer?itc Pian is determined by the Comittee, upon the recommendation of the Chairman, President and CEO of CSW. Other key employees of CSW or its subsidiaries may also receive awards upon selection by the CEO of a subsidiary participating in the Iricentive Plan. Generally, awards under the Incentive Plan are based upon the-award recipient's employment performance and the Company's economic performance during the applicable year. Aggregate payments under the Incentive Plan are subject to the annual approval of the Commi.ttee. Awards to executives under the Incentine Plan may be in the form of cache restricted shares of CSW Common Stock issued pursuant to CSW's Restricted Stock Plan, or a combination of cash and. such restricted shares, as determined by the Committee upon the recommendation of ' the CEO of CSW and of each participating subsidiary. All -Incentive Plan awards to other key employees are to be paid in cash. The portion of the Incentive Plan providing awards to key employees (other than executives) 24

will terminate on December 31 of any year during the term of the Inrentive Plan, unlesa otherwise rerewed by CSW s Board of Dtrectors. The Incentive Plan will terminrtte on December 31, 1993, if not terminated earlier by CSW's Board if Directorn. Stock opt.on Plan. CSW maintains e Stock Option Plan to aes tst in securing and retaining key executive employees of outstanding ability and to recognize their best efforts on behalf of CSN and its subsidiaries. The Plan atthorizes the grant of' cptions to purchase shares of CSW Common Stock and ctock appreciation rights ("S?R's") to officers and key employees of CSW and its subsidiaries selected by CSW s Board of Directors. Any employeo who is responsible for the management, growth or protection of the business of CSW or its subsidiaries is eligible for selection. The Plan is administered by the Committee. Committee. members are not eligiMe to participato in the Stock Option Plan or any other plan of CSW pursuant to which participants may acquire stock options or SAP's. Under the Plan, the Committee is authorized to grant stock options at an optior price not lean than the f air roarket value of the shares co dred by the option at the time the option is granted. The Plan also permits the Committee to grant SAR'a which permit an optionee to receive irom CSW, upon exercise, cash or shared of CSM Common Stock with an aggregate f air a.arket value equal to the aggregate appieciation in value of the shares in re3pect of which 4 the right was exercised. ST.R's may be granted with respect to stock options granted under the Plan. Options granted under the Plan may be options that are intended to qualify under particular provisions of the Code, as in effect from tirne to time (" incentive stock uptionc"), options that are not intended to so qualify under the Code ("nonqualified stock options") or combinations of the f o regoir.g. NC option can be exercised more than ten years after grant, and no option le exercisable until the optionee has been continuously employed iy CSW or any subeldiary for one year f rom the date the option was granted. The Stock Option Plan does not limit either the number of persong who are eligible to receive options or SAR's or the number of shares subject to options or SAR's that may be granted to any one person. The Plan a tsu dons not 1imit the aggregate number of i stock options and SAR's that may be granteo; only the r' umber of shares authorized for issuance and sale to satisf y option exerci ses under the Plan and the number of shares with respect to which SAR's may ba exercised are limited under the terms of the Stock Option Plan. The maxtmum number of shares of CSW Common Stock that may be issued and sold under the Stock Option Plan is 3,000,000, subject to adjustments to reflect stock splits and cortain other changes in the number and kind of outstanding chares. The maximum number of chares with respect to which SAR's may be granted pursuant. to any parti.cular award shall not exceed 50% of the shares arbject to the options granted under such awar:1. As of January 1, 1992, 2,722,803 shares of CSW Common Stock were not subject to outstanding options and remair.ed available for issuance under the Plan, while an aggregste of 83,810 shares of CSW Common Stock acre subject to outstanding options under the Plan. No stock options or SAR's were granted in 1991. Stock options and SAR's exercised in 197 totaled 66,996 shares. During 1991, the net value of the securities or cash received upon the exercise or realization of options or stock appreciation rights by Messrs. Carey. Verret, Ward, Shamblin and Stice was - $14,5 31, $2,650, $8,593, $10,312 and $12,375,'respectively. The net value for the 13 executive officers as a group ms $9,827. Meetinr s and Compensation. The Board of Directcrs held five meetings during i 1991. Directors who are not also executive of ficerc and enployees of the Company or its affiliaten receive annual directors' fees of $0,000 for serving on the Board and a f ee of $300 plus expenses for e ach meeting of th; Boa rd or committee attended. Thaua directors who are not also of f icers of the Company are eligible to participate in a def erred compensation plan. Under this plan such directors may elect to defer payment of annual directors' and meeting fees until they retire from the Board or as they otherwise direct. Proposed 1992 Long-Term incenti.ve Plan. Ef f ective April 16, 1992, executive 25

l = officers of the. company, like.other-key employees of CsW'and its oubsidiaries, will.become eligible to participate in the Central and South West Corpotation 1992 Long-terra Incentive.. Plan- (" Proposed ' L-T Incentivo Plan"), subject to the lapprovals of CSW's_ shareholders __ ar.d the SEC. The Proposed L-T Incentive P1an is intended-to replace the' Restricted Stock Plan which expires in 1994 and the Stock _ Option _ Plan which expires _ in _1996 in designed to - complefrent - the existing ? Exocutive Incentive Compensation Plan. Awards under'the Proposed L-T Incentive Plan may include CSW stock options, 4 restricted or phantom CSW stock or cash performance units. The total number of I shares available, f or issuance under the Proposed L-T Incentive Plan is 4,000.000 shares..Awardr would 50 made under the plan to key employees of the company who are responsible for the managementi growth and protection of the buninesr> of C5W - or 1.ts - subsidiaries and whose performance, in the sole discretion of tho l Committee, benefits or will benefit CSW in a significant mannte. The Pro imd L-T Incentive Plan'will terminate accordtng to ita terms on December 31., 2001 except for awards then outstanding. ITEM 12.- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. All' 6,755,535 shares of the Company's outstanding Concon Stock, 125 par value, are owned beneficially and of record by CF'1, 1616 Woodall Rodgers Freeway, Dallao, Texas 75202. For information regarding the amount of each class of equity securities of .the Company and of CSW beneficially owned directly or indirectly by all direct.crn and execut ;"e of ficers of the Company, see " ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS'Ce THE REGISTRANT." ] 4 ITEM 113. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. J i: None. i: E L-- I i: f5 f

l I;-

l ':m i E L l? 26 4 m , * - + r -+.r " ~ * * - - - + + - - - +.

a-p . -Li ' .3 ll

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,.l- ,U P Av." IV ITEh - 14.. EXH.I L M G, FINANCIA.t SThTEHAh7 SCXEDULEF. AND REPORTS ON PORM 8-K. 'tise - fliisac.hti et alandtnts inu19')nd in the Coop'.ny's '1991 Annual Report to atockholdere ara herst.,y incorporated by re;f erence ar.d m..de a part of this report, i Page Beforence ') -)' + 1991 Annunl ~ f 1991 Report to 10-K Stockholdero (a) Financial Statements (Included undt: "(TEM 8. FINLNCIAL STATEMENTS AND SUPPLE **ENTARi DATA") Peport of In.iependent Public Accountants. 35 S0atemente of Income for the years enders 22 'I'ece<r.ber 31, 1991, 1990 and 1989. J-St at ement' f Retained Earnings for the 22 ye ara. endt.. December 31, 1991, 1990 and 't 9 8 0. Balance Fneets as cl December 31, 19f1 23-24 and 1990. 25 Statemenr.n of Cun% Flows for the yearc + e ded Descener 31,.1991,- 1990 ar d 1989. Statements.of Capitalizatien as of 26 December U., 1991 and 1999. Not6a to Financial Statements. 27-34 t(b) Reports on Fonn 13-K ~Ori Octo'Jer n,1991. the comparty flied a Form G-K reporting Item 5. "C**.he r Evente". 27

" ~ - ' ^ ~ ~ - ~ --' - ~- r4<m. p" ' : [ y., < ft f p '.M6 Q j', a, w -_ ' m,. pr u. R a :n :y~ Page Reference > 4 @R ' 1 1991: Annual 1991 Hoport-to IG-L Stockholders- '4 - - - - ~ ~ - - - - g m p;g (c) --Exhibite: W ' [3., '( a ) : Restated' Articles.of. Incorporation,.as-amended,'of the company-(incorpore.ted Jherein.by referenco to. Exhibit 4(a) to-i i the Company

• s Regletration Statement No.

4 3 j* 33-4897,: ExhiW.ta 6 and - to Form 11-1 . File - No.t 70-7171,-Exhibito 5, 8.1, 0.2-and 19 to Form U-1.Vila'No. 70-7472). W -(b)iBylaws,.as; amended, of the Company. C 4

1. c.

' (Incorporated herein by reference fM .to Exhibit-3(b).to the Company's 1990 i' . Form 10-K, file No. O-346). .g-4.J .ISdenture of Mortgagefor Deed of Trust dated. November-1,.1943, . executed by the Pompany.to The First National Bank of Chicago and Robert-L (Grinnell, as Tiustees, aR amended r through October 1,L1977 (incorporated herein by reference to Exhibit 5.01 in l' Jile Po. 2-60712)). and:the= Supplemental; 4-Indentures ofLthe Company dated

5eptember 1,J1978 (incorporated herein.

.-g

by l refererice to Exhibit 2.02 in TLle

.No; 2-62271).and December 15,,1984,- a 1 '; July;1,J 1985', May L1., :1986 And NoMnb4r 1,- g ,7-.- -1987:(incorporated herein by: reference to' l N"W Exhibit?17 to Form U-l' File No.170-7003, ~ 7 __ Exhibit L4(b)o in File .40. 2-99944,. ExhibLt '4'" 4 to Yorm U~i' File Nc.'70m7236'and. j Exhibit 4 to form U-1 File No,'- 70-7249). ?and' June (1,7198ac December 1, 1989; 'and1Merch 1,(19903.(incorporated heroin ~ -;by' ref erenco rro Exhibit' 2 to Form U - File No~.c 70,7520',. Exhibit-3 to Form:U-1 s ,t = sFile'No;: 70-7721 and txhibit-10 to form sNx. - -U-l' File Nok 70-7735); -i h { r u;' y f;' s p - / [. '-

t

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i

$;[- pgf -p ~,U 2. i.s k f1 p',. 1 / -j .) 28-M p 9:( 1 h. "'[.i, s 5 4

4. ~ -, 4 - J3 .4 y' .( 4 IFEu ') e,y6 A M .i 4 ,dM 'Page Referones-- 1 ,,..$ly - 1991 Anrsual 3 m l6 Ji 1991 Report to! 10-K Stockholders-

s y

~....____. N ' _. /d

1124 ! Statement ~:re Ocmputatton of Rt.?io of 36

~ .h Forni_ngs tc. Fixed Charges f or the Cive (f@G . years ended December.314?1991. ~ ,113. 1991 Anndal. Report-L o Stockholders. Filed-t ia-IIerewith -a b*/ 25.1 Powers of Attorney.: Filed. l{ (d)- Schedules .g?-- Report of Independent-Public1 31 -j Accountants on Supplemental _Schedulen ,p and Exhibit.- V.

Property,. Plant and Equipment for the 32 2

'e -years ended December 314 = 1991, '1990 t and 1989.= .VIi-1 Accuraulated Depreciation, Depletion =33 y Y and! Amortir:ation of Property, Plant

N and~. Equipment'for the

years ended g

Decembere31,_1991c 1990 and_1989.-

IX.1;Short-Torm'Berrowings for the' years 34 %~ 5 - v: ' ended December-31,c1991,31990~and 19894 LX, Supplementary: Income Stitement-35 Informationifor the_ years ended- [ '[ ! December 131',.1991, - 1990 and 1M9. i / A11Cotherlexhibita 'and.ochedules are omitt.ed because _of the absence of tho - conditions LunderO which 'they are_ roquired. Tori becauno the required ~ (. .informationsis:irscluded in the financial statements andlrolated. notes to E J bfina:.clal: etatementa, + p = s1 y k\\ t k -- L f stdd. l . h..

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' + .y ' ', ' li g @,m,.. , sy U 8 .y p:- c :- I-. ]g r!. 4 o 4 ( '?' ,~.)I.~, '.i { )t ..a n- '-l }, 'N h g i 'j [.', C 1

w ~ i7.; b ~ tir .o ' q. SIGNATURES Pursuant - to - the requirementa of Section 1.1 or 15(d) of the Securities Exchange Act of 1931, the registrant. has auly caused this report to be signed on 'its behalf by the undersigned, thereunto duly authorized, on March 23 1992. 3 CENTRAL POWER AND LIGHT COMPANY + E/ /s/ David P. Sartin r David P. Sartin Controller Pursuant to the requirements of the Securition Exchange Act of 1934, this report has been signed below by the following persons or. behalf of the registr and in the capacities indicated on March 23, 1992. -Signature -Title

• Hobert R. Carey President and CEO and Director (Principal executiva of ficer)
• P. Richard Shamblin Vice Pr eaf denti Pitance and Director (Pcincipal financial officor)
• David'P. Scrtin Controller (Principal accounting officer)

R.- Brooks Director ' ben M. Garcia. Director abort A. McAllen-Director. . et.e Morales, Jr ' Director 4 as..Loyd Neal, Jr.. Director

• Jim L..Peterson Director
• H.

Lee Richards-Directc "B. W._Teague-Vice President Marketing and at:sinest Development and Director

• RichardLP. Verret Vice President Hegional Operations and Director Vice President. Enaineering and Productiori

'M

. Dale E.. Ward.

and Onector i [ . ~*P. Richard <Shamblin,; hay-signing =his name hereto, does ' sign thia. document on ..n . behalf of p the'= persons - indicated, above pu r suant. to ' a power of attorney = duly - ~ ';, l executed fbyf-ear:h such person..and : f L ied -- w ' t h the Securities and:. Exchange ' Commise1.on.1

• By r/e / P.

Richard Shamb11.n P. Richard Shamblin Attorney-in-Fact r 'l 30 i j 4

_. ~. y 'REPO2tT OF' INDEPENDENT PUBLIC ACCOUi(TANTS.ON SUPPLEMENTAL-SCHEDULES AND EXHIBIT-

---

.---..-.....~ _....,_..-..-

F 'To the Stockholders and' Board of Directors of Centra 1-'Pc7er'and. Light Compenyt -Ve nave audited in' accord **)ce with generally accepted auditing standards, the : financial = statements inclu.ed in Central Power and Light. company's annual repo.i t to stockholders incorporated by reference in this Form 10-K, and have Assued our report thereon dated recruary 19,1992.. Our audits were reade for the i purpose of forming an opinion on those statements taken as a whole. Supplemental-ochedules V, VI, IX,--X and-Exhibit 12 are the responsibility ot! the Compana,r's managetcent and are presented for purposee c1 complying with the Securitien and -Exchange Commission'a rules ar.d are not part of the b; sic financial statements. Thene schedules end ' exhibit have been subjecteG to ' the auditing procedures applied -in the audits ' of the basic financial statements-and, in our opinion, f airly state in all material: respects the financial data required to be 1,ut forth therein-in relation:to.the basic financial statements taken as a whole,- Arthur Andersen fu Co. Dallas, Texas February 19,.1992 P W p + A T 31 ,-v. m w y >p. 4 -..f, y, ..;-aoa

p 4 .r SCHEDULE V ICENTRAL FtHER AND LIGHT COMPANY PP0PERTY,-tLANT AND EQUIPMENT iFOR THE YEARS ENDED DECEMBER 31 . column A-column-B Column C- -Column D Column E Column P

Balent. e Other Beginning

-Additions-Retiremonte Changes Balance

C1hasLfication of Year at cost ct Cost Add /(Deduct)

Lnd of Year (Thousands) ,1 Year (1991-29=p---.+.--- 'fElectric Utility' Plants-JFroduction $3,377,609 $ 28,890 $ 2,129 (55) $3,404,315 LTransmlasion-320,719 10,798 177 21 331,361 Distribution. .-642,529 46,391 7,013 (2) 681,905 General. 207,441 5,457 838 (1,611) 210,449 Construction work in progress 56,917 8,782 65,699

Nuclear. fuel 132,972 3,905 136,877

$4,738,187 $. 104,223 $ 10,157- $(1,647) $4,830,506

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=

v=

L ear'1990 Y Electr'ic Utilaty Plants

Production

$3,000,358 $ 37P,269 $ 1,392 3 74 $3,337,009 Transmission 309,125-15,573 2,394 gl,585) 320,719 Distribution-611,152 41,694 5,596 (723) 642,529 GLneral 204,463 7,951 3,9o8 (1,005) 201,441 Construction work $6.917 in progress 52,052 4,865 LNuclear fuel' -121,709 11,263 132,972 $4,298,859 $ 459,615(1) $ 17,350. $(2,937) -$4,738,187 s

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==

YearJ1989

Electric, Utility Plants

> Production- $2,292,793 $ 712,993 867 $(4,566) $3,000,358 Transmission 304,133 2,359 372-2,405 309,125 Distributioni 579,562 39,659 7,902 (87) 611,152 General. 193,327-12,167 3,034~ 2,003 204,463 ' construction work; 'in;progresse 682,716-(630,664) 52,052 c,y; lear-fuel 117,101 '4,608 121,709 $4,169,637-141,722 y 12,255 (245) $4,298,859'

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=

==========.

• M s

((1)? Includes Mirror-CWIP.of $360 million. 32 3 3

-.~. =.~ ~, h k_W + M -SCHEDULE VI-- -CENTRAL POWER-AND LIGHT COMPANY.. ACCUMULATED DEPRECIATION,tDEPLETION AND

AMO3TIZATION OF. PROPERTY, PLANT-7.ND EQUIPMENT

- FOR THE' YEARS ENDED DECEMBER 31 f ? column A - column-B (Column C column D column E Colum.. F- - - _ ~.. ' Additions Char.Jed to- -Costs and: Expenses Other -Balance. Changen Balanco Beginning " Depreciation / Other Add / End of Classification _.of Year-Amortization-Accounts Retirements (1) (Deduct) Year ...m.._. .(Thousanda) iElectric. Utility.

M, 1 Plants 1

l Production

$484,504

$ 87,799 $ 1,094 -$ 1,844 $ 571,5E3 t ( Transmitision 113,228 . 9,113 .299. -122,042: Distribw ien '18P,883 -28,671 11,288 12 206,278 ' General.. 73,091 >3,909 -1,920 676 (507) 77,737 Muclear-fuel, 32,980' 17,657 50,637 - 5892,686- .$129,492- $ 20,671 $14,107 (495) $1,028,247 - = =... -.. .....n,. ....m... .o.... ~ Year '_19901 1 s W i 7ectric Utility E ' Plant.: Production .$402,415 .$ 80,734 $ 1,093 749 $ J,011 $484,504 Transmission' .106,391 8,926 2,360 261 ,113,228? ~. Distribution ~ 17 4, 5 3 6.. 26,319 12,193 221 168,883- > General. 69,998 4,150 2,736 3,686 (107) 73,091 . Nuclear / fuel' =16,540: 16,440 32,980 --...._~ $769,880; $120,129.

..'20,269

$18,978 $ 1,386 $892,686~ ..n== .....u.

==..... a g- -..u==.- ...u... N tYear 1989J FElectric Ut11ity- , Plants, LTransmission- _ $ 3 *S,031:- ' $ - 7 5',182 l 1,066' 871 _(993)- $402,415- . Production'-- ' L9,126 17781 -( ! 20) 106,391" 96,063

Distribution 4 162,389...

~22,735 10,844i .256.

174,536-

>l General-- 64,628' .3,081 3,956 1497l (270) ' 69,998 ! Nuclear fuel 4i904~ =11,656. 16,540' x - $658,015- $110,124 - $ 16,~658= $13,890 $'(1,027) $769,880 - = = = = = =. . = = = = . = =.... 1(1),s iRetirementenaret at original cost,. net of removal' costs-and salvage. ,i., c 4 W q h: -t A p i: 33 l: ,s.- f - (.. 4 - C .m +.5 e +- e st" +&

a_t = SCHEDULE I2 i CENTRAL POWER AND LIGHT COMPANY-SHORT-TERM BORROWINGS FOR THE YEARS ENDED DECEMBER 31 4 -Column A Column B Column C, Column-D~ Column E Column F Maximum-Average ' Weighted o LCategory of Balance. Wei'ghted - Amc>unt Amount Average ' Aggregate at End Average outstanding Outstanding Interest ,Short-cerm-of "Intercat .at any During Rate During_ Year. -.Bo* rowings .Poriod-Rate-Month-ond-the' Period the Period- _...z (Thousands) 1991 ' Advances-li from-Affilieten.$62,148. 5.0% $69,876= $28,717 6.2t q 1990' Advances- 'from Affiliates $40,625 8.0% $90,687 $29,050 8.5% .1989

Advances-

.from -Affiliates- $46,606' -8.6% $78,396- $14,022 9.0% --av W.- .:l I" i;,i ) 34 L a

(,p fy- ~ ~ t .d: /d!,. SCli2DULE X l ?-1:- U- - CENTRAL POWER AND LICitT COM nNY. . SUPPLEMENTARY INCOME STATEMENT-INFORMATION FOR THE YEARS ENDED DECEMBER 31 1991 1990 1989 ll (Thousands) Real' estate: and ~ personal property taxes $38,817 $29,540 $27,060 S '- State gross receipts-taxes 13,099 10,864 9,724 ? Payroll' taxes' 6,765 .6,595 5,320 Franchise taxen 3,205(b) -8,691 (1,639)(a) - state; utility commission asnessments 1,784 1,572 1,308 other taxes 723 1,031 1,423. $62,453 $58,313 $d3,196 a NN. ~

m (a) A refund.of approximately $13 million related to prior' years was recalved in=

-1989. y; . (b) A refund of approvimately $3.6 million related to--prior years was received in 1991.- n tThe amounts'of taxes,' depreciation and_ maintenance. charged to accounta other -than income and expense accounts were not significant. Rents,-_ royalties, advertising .,a; ' and research.ind development costo during these.yetro were not significant. i r ~ a 4 a ,-[ \\ p sq L Qh_ ??

• e;a

e

[' s m a 35 gr a

EXHIBIT 12 CENTRAL POW 6R AND LIGHT COMPANY RATIO OF EARNINGS TO FIXED CHARGES FOR THE YEARS ENDED DECEMBER 31 1991 1990 1989 1988 1987 (Thousands except Ration) Operating income $249,497 $162,440 $161,606 $122,378 $142,435 Adjustments: redoral,incor,.e taxes 44,832 (2,124) (60,000) (8,728) 6,873 Provision fcr deferred Federal income taxes 36,984 103,490 127,894 39,283 28,889 Deferred investment tax credits (5,831) (6,103) (5,639; (1,576) 14,3G1 Other facome and dedactions 396 (2,641) 4,?43 4,069 (C63) Allowance for borrowed and equity funds used during construction 2,124 1,057 40.,091 160,972 168,877 185,078 84,590 OTP carrying costo Mirror CWIP nmortization 96,671 Earninga $424,673 $441,191 $352,805 $316,396 $360,412

===nce.,

=....,

r.u==..= .......e

====... F Fixed charges: Interest on long-tero debt $124,987 $126,564 5129,535 $122,356 $10b,038 Incerest on short-term ' debt and other 0,521 15,4J4 12,422 7,007 12,172 q:, . _. ~. -. Fixed Charges $133,600 $142,018 $141,957 $129,443 3120,210 ....w... =ws..... n===..e. =<...=.. t....... Ritt' o of Earningu to i Fixed. Charges 3.18 3.11-2.49 2.44 3.00

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