ML20104A868
| ML20104A868 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 12/31/1978 |
| From: | UNITED ILLUMINATING CO. |
| To: | |
| Shared Package | |
| ML19261D673 | List: |
| References | |
| NUDOCS 7906250394 | |
| Download: ML20104A868 (51) | |
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i SECURITIES AND EXCHANCE COMMISSION Washington, D. C.
20549 i
FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended Commission file r. umber December 31, 1978 1-6788 THE UNITED ILLUMINATING COMPANY (Exact name of registrant as specified in its charter)
' Connecticut 06-0571640 (State or other jurisdiction of (I.R.S. Employer incorporation or organir.ation)
Identification No.)
80 Temple Street, New Haven, Connecticut 06506 (Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including Area Code:
203-777-79S1
. Securities registered pu suant to Section 12(b) of the Act:
Name of each exchange on Title of each class which registered Cocaon Stock, no par value New York Stock Exchange l=
8.80% Preferred Stock
($25 par value per share)
New York Stock Exchange Secur,ities registered pursuant to Section 12(g) of the Act:
^
i Common Stock, no par value (Title of class)
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- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by_ Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required " ' ~ -
to file such ~ reports), and (2) has been subject to such filing requirements for the.past 90 days.
Yes X.
No The number of shares outstanding of the issuer's only, class of cow. mon stock,'as
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of the close of the period covered by this report, was 6,047.018.
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i Item 1.
Description of Business The Registrant is an operating public utility corporation, incorporated by the Connecticut legislature in 1899, which is l,s.
engaged in producing, purchasing, distributing and selling electricity for residential, commercial, industrial and govern-mental use by unaffiliated customers in a single geographic
. area, consisting of the contiguous cities and towns of Ansonia, Bridgeport, Derby, East Haven, Easton, Fairfield, Hamden,
-Milford, New Haven, North Haven, Orange, Shelton, Stratford, Trumbull, West Raven, Woodbridge, and a part of the town of North Branford, in the State of Connecticut.
There are no 7
other public utilities, public agencies or co-operatives selling electricity in this geographic area.
The aforesaid business is, and has been for at least the
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last five fiscal years, the only business of 'the Registrant.
The amounts of the Registrant's revenues, operating profit and utility plant, for each of the last five fiscal years, all of which were attributable to the aforesaid business, appear on pages 12 and 13 of the accompanying 1978 Annual Report to shareowners, and are incorporated by reference in this Form 10-K annual report.
The Registrant has no new product or business under development. During the fiscal years ended December 31,1977 and 1978, the Registrant expended approxi-5 mately $856,000 and $1,070,000, respectively, on company-sponsored research activities relating to the development of.
l new methods of producing and distributing electricity and the improvement of existing methods of producing _and distributing electr(icity. During these fiscal years, the Registrant conducted no customer-sponsored research or development activities.
The Registrant produces, purchases, distributes and sells electricity to its customers on a demand basis and, therefore, has never had a product inventory or a backlog of customer orders.
Bills are rendered to customers on a monthly basis, and extended payment arrangements are entered into with only an insignificant number of customers. The demands of the Registrant's customers for electricity have historically been 3-highest during the Summer and Winter months. The Registrant's i
l business is not dependent upon a single customer or a few customers the loss of any one or.more of whom would have a l
materially adverse effect on the Registrant. No single customer, or' group of affiliated customers, purchases electricity from the Registrant in an amount which equals ten per cent or more 4
of the Registrant's revenues. No portion of the Registrant's business is subject to renegotiation of profits-at the election
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of any government, and governmental customers may terminate
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their contracts with the Registrant only by discentinuing 4
- their use of~ electricity, which'the Registrant deems unlikely.
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I [J Subject to the power of alteration, amendment and repeal by the Connecticut legislature, and subject to certain approvals,
_ permits and con'sents of public authorities and others prescribed by statutes, the Registrant holds franchises to engage in the aforesaid business, including, among other things, the right to erect and maintain certain facilities on public highways i
and grounds, the right to issue and sell securities without C
limit as to amount, and the power of eminent domain.
These franchises, rights and powers, which are unlimited as to time, are essential to the Registrant's business.
As of February 28, 1979, the Registrant employed 1,418 i
persons, including the Executive Officers identified below in this Form 10-K annual report.
No raw materials are incorporated into the electricity produced by the Registrant. However, the Registrant burns F
residual oil at its generating stations (see Item 3 below) and I
thus, in common with other electric utilities on the Eastern i
seaboard, is heavily dependent on fuel oil supplies derived i
from foreign sources. These supplies'are subject to inter-
.ference by foreign governments and price increases such as those recently implemented by the Organization of Petroleum i
Exporting Countries and others. During 1978, the fuel oil requirements of the Registrant's generating stations totaled p
approximately 8,880,000 barrels. lhe Registrant owns storage tanks at its Bridgeport Harbor and New Haven Harbor generating j i(.
- 'n stations which have capacities of approximately 680,000 and 650,000 barrels of fuel oil, respectively.. Fuel oil requirements for these two generating stations, which constitute the bulk-f of the Registrant's total fuel oil needs, are covered _ by a,
1 contreet with Texaco, Inc. (Texaco).
Due to this requirements 1
contract, which extends to March' 31,-1983, Texaco owns and maintains an inventory of fuel oil in the Registrant's storage
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tanks and, consequently, the Registrant maintains no significant fuel inventory. Neither the Mideast oil embargo' in 1973, nor other aspects of the national energy problems which have I
arisen since then, have necessitated-any reduction in planned generation at the Registrant's generating st'ations. However, Texaco advised the Registrant on March 1,1979 that recent events in Iran and other foreign countries had precipitated a world-wide shortage of the low-sulfur fuel oil which _ Connecticut's l
sir pollution control regulations require.the Registrant to, burn, and that Texaco expected to be able to satisfy only about one. half of the Registrant's requirements for such fuel oil during Marchiand April of 1979. Consequently, Texaco and the Registrant -have applied' for and obtained permission from r
the Connecticut Commissioner of Environmental Protection to sell and burn, respectively, higher-sulfur fuel oil at the 2
Registrant's two largest generating units for a 60-day temporary
_ period.' The Registrant has been advised by Texaco that it ~
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cannot predict what, if any,_ curtailments in-its fuel oil!
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supply to the Registrant will be necessary in May or there-4 after; and the ability of the Registrant to obtain all of its fuel oil requirements in ensuing months is uncertain. The Registrant's generating stations are operated as part of an overall New England system through the New England Power Pool (NEPOOL), and fuel oil shortages at the Registrant's generating stations or the generating stations of other NEPOOL participants could result in the implementation of a contingency procedure adopted by the participants in NEPOOL in 1973, whereby various energy conservation steps can be implemented by the utilities if and to the extent required to meet energy shortages.
The price paid by the Registrant for the bulk of its fuel oil requirements increased from below $5.00 per barrel just -
prior to the Mideast oil embargo in 1973 to $18.24 per barrel for low-sulfur oil, and $15.22 per barrel for higher-sulfur oil, as of March 22, 1979. These fuel oil price increases have been largely responsible for the increase.in operating expenses incurred by the Registrant since the embargo. The-Registrant is unable to predict what effect developments in Iran and other foreign countries, or the recent enactment of a national energy act in the United States, will have on its fuel oil costs, sales, revenues or net inccme.
The Registrant's interests in an operating generating unit (the Connecticut Yankee Unit) and in four future nuclear generating units (Seabrook Unit Nos.1 and 2 Pilgrim Unit No.
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2 and]Hillstone Unit No. 3) are described in Item 3 below.
Generally the' supply of fuel for nuclear generating units 6-involves the mining and milling of uranium ore to uranium concentrates, the conversion of uranium concentrates to, uranium hexafluoride, enrichment of that gas and fabrication of the enriched hexafluoride into usable fuel assemblies.
After a region (approximately 1/5 to 1/3 of the nuclear fuel assemblies in the reactor at any time) of spent fuel is removed from a nuclear reactor, it is placed in temporary storage in a c
spent *fuci pool at the nuclear station site for cooling and ultimately is expected to be transported to permanent storage sites or to plants for reprocessing into uranium hexafluoride and plutonium oxide for reuse as nuclear fuel. Uranium con-centrates, uranium processing and nuclear core fabrication services for the initial fuel loading and reload fuel for nuclear units are sometimes purchased as a package from the reactor supplier.
In other instances the uranium concentrates are purchased separately from processing and fabrication
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services. Based on information furnished by th'e utilities responsible for the construction and operation of the Connecticut Yankee Unit and the four future units in which the Registrant is participating, there are outstanding contracts to the e,,,,
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extent indicated below for uranium purchases and conversion, enrichmenr. and ' fabrication services, for tpese units ' extending 2
through the following years:
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Conversion Uranium to Concentrates Hexafluoride Enrichment Fabrication Connecticut Yankee Unit 1981 1985 1995 1984 Seabrook Unit No. 1 1982-1986 2008 1984 Seabrook Unit No. 2 1982 1986 2010 1986 (1) 1986 2010 1986
. Pilgrim Unit No. 2
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1981 1984 2010 1990 Millstone Unit No. 3-(2)-
(1) Substantially'all of the uranium concentrates for the initial core are covered.
The unit is scheduled for 1985 operation.
8 (2) The in-service date for Millstone Unit No. 3 has been delayed from 1982 to 1986. The dates given for v'
uranium concentrates and for conversion to hexaflouride reflect delivery schedules specified in contracts 8
for enrichment services with the federal Department of Energy (DOE) and are not dependent on the in-
, service date for this unit.
The utilities constructing the unit have requested DOE to modify the enrici.=ent contract schedules, and modification of these schedules may result in postponement of the dates _given for uranium concentrates and conversion services. The uranium presently committed for this unit is for the initial core and will be supplied in part by Westinghouse Electric Corporation (Westinghouse) under a court order and in part by another supplier. Westinghouse originally contracted to supply the u'ranium for the first core and three refuelings, but in September 1975 it notified its uranium customers
.that it is taking the position that it is excused from the complete performance of its obligations on the ground of "commere* ' impracticability." The utilities constructing Millstone Unit No. 3, and other utilities, initiated lawsuits against Westinghouse seeking declaratory rulings that Westinghouse is not excused from the performance of its obligations, awards of damages and other relief. These actions were consolidated in the United States District Court for the Eastern District of Virginia, which ordered Westinghouse to deliver, at contract price, its existing uranium inventory, pending the outcome of the litigstion.
The court has ruled in favor of the utilities 'on the question of Westinghouse's liability.
i At: ant settlement of_these lawsuits, a further trial will'be conducted on the issue of damages and remedies.
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The Registrant expects that uranium concentrates and related services for periods not covered by existing contracts will be available, although such availability depends, among other factors, on suppliers of such materials and services developing additional capacity. There can be no assurance that such concentrates will in. fact be available when needed.
1 Costs for subsequent periods are likely to be substantially higher than those under existing contracts.
There are no commercial facilities presently available in the United States for the reprocessing of spent nuclear fuel, and President Carter's current policy includes indefinite deferral of commercial reprocessing of spent fuel and a suggestion that the federal government take title to such fuel and store it in a retrievable fashion while the question of ultimate disposal is being settled.
In view of this, operating nuclear generating plants are required to make long-tern arrangements for the storage of spent fuel. The Connecticut Yankee unit has adequate storage capacity on site until at least the mid 1990s, when government storage facilities are expected to become available.
Contracts for reprocessing fuel used in the Connecticut Yankee unit during various periods from 1970 through 1975 were entered into with General Electric Company (GE). In September 1974,'GE gave notice of termination of this contract and has claimed that its fuel reprocessing 3-facility proved inoperable. Connecticut Yankee Atomic Power Company has taken the position that GE's termination of the
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contract is wrongful and has instituted suit against GE to recover damages. Nuclear fuel costs for the Connecticut Yankee unit include provision for spent fuel disposal costs and are being calculated on the assumption that spent fuel
' will not be reprocessed.
It is anticipated that there will be substantial additional costs associated with the disposal of spent fuel from the four future units in which the Registrant is participating. However, such costs are not sufficiently known at this time to be recognized.
The National Environmental Policy Act requires that detailed statements of the environmental effect of the Regis-trant's facilities be prepared in connection with various federal permit and licensing proceedings.
Federal agencies are required by the Act to make an independent environmental evaluation of facilities as part of their action during such proceedings.
4 The Federal Water Pollution Control Act (FWPCA) requires
- permits
- for discharges of effluents into navigable waters and requires that all~ discharges of pollutants comply with federally j
approved state water quality standards.
The Connecticut Department of Environmental Protection (DEP) has adopted, and
. the federal government has approved, water quality standards for receiving waters. A joint federal and state permit system has been established to insure that applicable ef fluent limita-tions and water quality standards are met in connection with
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- the construction and operation of facilities which affect or discharge into state or interstate waters. The Registrant has obtained discharge permits for all of its generating stations (see item 3 below).
All of these permits require further studies and monitoring to determine whether the existing cooling water intake structures reflect the best available technology as defined by the federal Environmental. Protection
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Agency-(EPA) for the location, design, construction and capacity of such structures.
The EPA will review and, where appropriate, develop technology-based effluent standards for certain potentially toxic chemical pollutants discharged from electric generating r
facilities.
If such standards are adopted, further chemical vaste treatment facilities for the Registrant's generating
' stations may be required. The EPA's effluent limitation regulations which would require the eventual installation of closed, recirculating cooling water systems, such as cooling towers, on electric generating facilities do not appear to be applicable to any of the Registrant's existing generating units, except New Haven Harbor Station, or to the Connecticut Yankee unit. The discharge permit for New Haven Harbor Station, which will expire on June 30, 1982, is subject to revision in this respect. Because of the uncertainties with respect to toxic chemical pollutant standards and the possibility of required changes in 'the existing and planned cooling water r
k systems at New Haven Harbor Station, the cost effect of the FWPCA on Registrant cannot be estimated; but additional mod-ifications, in some cases extensive and involving substantial costs, may ultimately be required for one or more of_the Registrant's generating f acilities.
Under the federal Clean Air 'Act, the EPA has promulgated national primary and secondary air quality standards for certain air pollutants, including sulfur oxides, particulate matter and nitrogen oxides. The DEP has adopted regulations for the attainment, maintenance and_ enforcement of these standards.
In order to comply with these regulations, the Registrant is required to burn fuel with a' sulfur _ content not in excess of 0.5% (as to which see the discussion at pages 3
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and 4 above).
These regulations also include other air quality standards, emission performance standards and monitoring, testing and reporting requirements which are appif cable to the Registrant's generating stations, and further restrict the construction of new sources of air pollution or the modi-
' fication of existing sources by requiring that 'both construction and operating permits be obtained and that the new or modified source will not result in the violation of the EPA's regulations for'the nondeterioration of existing air quality.
Because of=
this latter requirement, future construction of fossil-fired generating units may be hindered or. precluded'in the territory l
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served by the Registrant, depending upon pollutant, levels over s
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which the Registrant has no control.
If The citics of Bridgeport and New Haven have also adopted i'
. air quality and emission performance standards applicable to
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the Registrant's generating stations within their jurisdictions.
On July 14, 1978 and September 21, 1978, the Registrant received notices of violation from the DEP asserting that a 161,020 kilowatt generating unit and an 84,700 kilowatt gen-erating unit at the Registrants Bridgeport Harbor Station do not conform to the emission performance standards for nitrogen oxides set =forth in the DEP's air pollution control regulations.
The DEP has withheld enforcement action on these notices of l
violation pendin3 a review of the nitrogen oxides performance standard for generating units of this type; and the DEP has recently proposed an amended standard with which both of the I
subject generating units would comply.
i A Connecticut statute prohibits the commencement of
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construction or reconstruction of electric generation or i
. transmission facilities without a certificat'e of environmental compatibility and public need from the Power Facility Evaluation t
Council (PFEC).
The PFEC has pending a proceeding to weigh the various factors which bear on the feasibility and costs of the undergrounding of some or all overhead transmission and i
distribution lines in Connecticut.
If all or a significant i
part of the transmission and distribution lines of the Registrant were required to be installed underground, substantial additional costs would have to be incurred by the Registrant with respect
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to proposed or existing lines. No significant action was taken in this proceeding in 1978; and it is not presently known when it will be concluded.
In complying.with the foregoing environmental regulations and further developments in these and other areas of regulation, the Registrant expects to incur substantial capital expenditures for equipment modifications and additions, monitoring equipment and recording devices and to incur additional operating expenses.
The total amount of these expenditures is not now determinable,
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but the Registrant estimates that its capital expenditures for environmental control facilities for 1979 and 1980, excluding expenditures for such facilities in connection with the con-struction of Seabrook Unit Nos.1 and 2, will amount to approx-imately $609,000 and $7,000, respectively.
The Registrant does not have sufficient information to estimate expenditures for'such facilities for Seabrook Unit Nos. 1 and 2 for these years. The requirements in these areas may also cause sub-stantial delays in the completion of new facilities, such as
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the four future nuclear generating units in which the Registrant has an interest (as to which see Item 3 below).
Developments in the Registrant's business since January 1, 1978, in addition to those described above and those described below in this Form 10-K annual report', are described on pages 1 through 11, inclusive, uof the accompanying 1978 Annual Report to shareowners, and are' incorporated by reference in
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this Form 10-K annual report.
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Iten 2.
Sumary of Operations A sumary of operations for the Registrant for each of the 1ast five fiscal years is as follows:
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- p f5 IT M 2 - h of h tus 18B17e IIADMIa4Tius CosenNT St0004RY OF OpgR4TIONS Por.the five years ended December 31, 1978 1
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1978'
'1977 1976 1975 1974 eperaties reweemse
$216.315.343
$219.503.217
$193.819.604
$188.650.770
$173.838.374 operettas empeeses, escludtag i - tax empenoe(1)
)s3,289,450 182,695,777 162,060,352
' 161,322.260 148,637,805 tacean tames (2) (Wete A)-
(164.844),
2.258.959 465.627 (3.507.736) 97.932.
183.124.606 184.954.736 162.525.979
___157.814.524 148.735.737 operettag taceae
- 33,190,737 34.548,481 31,293,625 30,536,246 25.102.637 Allowance for e p ity funde used during cemetruction*
- 3,396,839 2.518,016 1,506,725 3.314.903 3.161,979 739.729 142.779 528.136 292.3J6 546.036 Other Ameone - met.
Income before interest charges 17.327.305 37.209.276 33.328.486 34.443.512 28.810.652 Interest charsee 20,720,638 15.969,975 16.102,431 16,203,848 14.081,397 Allemence for borrowed funde used during cemetructien*
(4.871.127)
(2.419.271)
(1.336.153)
(3.314.90*)
(4.024.336) 15.849.511 13.550.704 14.766.278 12.888.946 10.057.061 Encome before cummalattwo effect of change in acceimating for fees 11 fuel ceste
'21.477,794 U G,572 18,562,208 21,554,566 18,753,591 Cumulattwo effect to Jammary 1, 1976 of chemgr la accounting for fase11 fuel coete(1) 1.883.857 met income (1) 21.477,794 23.65a,572 18,562,208 21,554,566 20,637,448 o Dividende sa preferred eteck 4.751.376 4.751.376 3.717.376 3.431.376 3.431.376 e
sol a ce a,plicable to e m=== eteck Lat.Z2t.ut Lat.2RZJtt LEaERE LLtd11dat LAZa1E922 Aw& rage number of comen' shores estetandtag m
s auf.122 4_999 sie m
ta77_117 4
gara1 age per.here.f ee me. stock Refore contattue effect of chamse in aceemting for fese11 fuel costs
$3.06
$3.77
$2.97
$4.10
$4.17 Cumntative effect to Jammary 1, 1974 of change la accounting for fesett feel ceste(1)
.51 Belance applicable to cemen stock M
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the change la accounting for fase11 feel teste had been la effect for 7 ears prior to 1974 Balance applicable _ to commun stock 1 M a2ElallE
. ret go per eben.f ca m e eteck EAI Dividende declared per shore of commen eteck M
jja$l iia 21
$$a2I iia 3I Alphabetic mete references are to mates to Fiesacial Sw appeertes en pegno 19 to 22 of the accampanying 1978 Amamel asport to Sheresumers.
Numeric mete references are to'the accampanying Netse to Senery of Operettems.
- Amounce for 1974 - 1976 have been reclassified to cesfers to the 1977-78 presentatten.
see "A11eumace for hade Boed Bering Cemetractism" in Statesmet of Accounting Felicies em page 18 et the accompanying 1978 Assuel Report to Sharesumers.
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THE UNITED ILLUMINATING COMPANY NOTES TO
SUMMARY
OF OPERATIONS
- (1)
Change in Accounting Practice in 1974 The Company's fuel adjustment clause' allows rates used for billing purposes to be increased or decreased depending on the variance in the cost of fossil fuel from that of a base period.
Under this clause, fuel adjustments billed to customers in any month are based on related costs of the second preceding month. Since the inception "of the clause and through 1973, the Company expensed fuel costs as burned, thereby creating a lag of approximately 1 months between
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the recording of fossil fuel costs and the recording of revenues i
based on rates reflecting such costs. With the drastic increases i
in fuel costs which occurred since 1972, it became apparent that 4
the financial health of the Company required that provision be made for the recovery of the shortfall in revenues resulting from this j.
lag in the operation of the fuel adjustment clause through appropriate i
recognition of and provision for the amount of such shortfall in general rate proceedings. On April 3, 1974, the Company sought the i ~
permission of the Connecticut Public Utilities Commission to change its method of accounting for fossil fuel costs, effective January 1, 1974 retroactive to November 22, 1971 (the effective date of i
UI's last previous general rate increase), to defer on its books at the end of each month the amount of its fossil fuel costs for the month which pursuant to the fuel adjustment clause in the Company's
,k rates could not be reflected currently in customers' bills. Such 4
permission was received f rom the Commission on April 22, 1974.
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Further, in its Finding and Order on the Company's June 7, 1974 l'
application for a general rate increase, the Commission granted increa' sed revenues for service rendered on and after July 1, 1974 i
, hich, among other things, allowed recovery of the balance of w
deferred fossil fuel costs amounting to $9,272,155 as of June 30, 1974 over a four-year period.
Amortization of this balance, which
~ commenced in December 1974, was completed in November 1978.
This l
change in fuel cost accounting resulted in an increase in 1974 net income of $4,781,239 or $1.30 perishare, of which $2,897,382 l
($6,017,614 of fuel expense less related income taxes) or 79c per share was treated as a reduction in operating expenses and $1,883,857
($3,912,626 less related income taxes) or 51c per share represented L
the cumulative effect of the change prior to January 1, 1974.
(2)
Income Tax Expense for 1975 For 1975, the available investment tax' credit, principally attrib-utable to the New Haven Harbor Station generating unit placed in service August 29, 1975, amounted to approximately $10,713,000 including approximately $6,376,000 resulting from the provision of the Tax Reduction Act of 1975 (1975 Act) which increased the credit for public utility companies from'4% to 10% of qualified property l
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- additions constructed or acquired af ter January 21, 1975.
The 1975 i
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Ac't provides that for 1975 up to 100% of federal income taxes otherwise currently payable may be offset by investment tax credits.
The total credit utilized in 1975 amounted to $2,898,000 o_f which
$1,181,000 was used to completely offset 1975 federal income tax otherwise currently payable.
The remaining $1,717,000 was carried back and utilized against the 1972 tax liability, thus exhausting the Company's available carrybacks.
Prior to 1975, unbilled revenues were not included in current taxable income; however, the applicable taxes were provided for as
' deferred taxes. During 1975, the Internal Revenue Service, while in the process of examining the Company's federal income tax returns ior the years 1971-1975, proposed an adjustment whereby unbilled e
revenues would be taxed currently. The Company decided not to contest this adjustment and elected to pay the resulting tax de-ficiency using the voluntary change of accounting method. Under this method, unbilled revenues at January 1, 1974 are includable in current taxable income ratably over the years 1974-1983 and changes in unbilled revenues since that date are taxed currently. The effect of this change in the method of reporting unbilled revenues for income tax purposes was recorded in December 1975 and resulted in an increase in 1975 net income of $854,000 or 19c per share, primarily because the resulting increase in taxes currently. payable increased the Company's utilization of investment tax credit flowed through to net income.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS The management's discussion and analysis of financial results appearing on pages 23 and 24 of the accompanying 1978 Annual Report to shareowners is incorporated by reference in this Form 10-K annual report.
Item 3.
Properties Generation The present electric generating capability of the Registrant, representing the maximum depencable net load-carrying ability during the winter period for New England Power Pool purposes, is as follows:
Net
~ Year of Capability Installation (kilowatts)_
),
Sta' tion Bridgeport Harbor Staticn, Bridgeport 1957-1968 677,810 New Haven Harbor Station, New Haven 1975 418,860(1)
English Station, New Haven 1929-1953 107,800 Steel Point Station, Bridgeport 1923-1950 63,700(2)
Connecticut Yankee Unit, Haddam Neck 1968 54,630(3)
Total M
(1) Registrant's 93.705% ownership share of total net capability of 447,000 kilowatts.
(2) Excludes 105,800 kilevatts of low-pressure capability in mothballed status.
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(3) Registrant's entitlement in the unit.
Registrant owns 9.5% of the common stock of Connecticut Yankee. Atomic Power Company, which has in operation a 575,000 kilowatt nuclear generating station, and Registrant is entitled to an. equivalent percentage of the generating l
w capability of this station.
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3-6 The Registrant's current generating capability is substantially in excess of its customers' requirements and, based on current forecasts of loads, will. provide an excess over its projected gen-erating capability: responsibility to the New England Power Pool through at least 1981.
During 1978, the maximum demand on the Registrant's system was 952,900 kilowatts, which occurred on August 17,.1978.
The Registrant's generating capability including the Connecticut Yankee Unit at that time was 1,322,800 kilowatts.
-During 1974,1975,1976 and 1977, the maximum demands experienced by the Registrant were 823,600 kilowatts, 859,100 kilowatts, 862.500 kilowatts and 944,100 kilowatts, respectively.
The Registrant is currently forecasting annual growth in its maximum demand in the range of 1.9% to 4.6% during the years 1979-1988.
Public Service Company of New Hampshire is constructing two 1,150,000 kilowatt nuclear genera, ting units in Seabrook, New Hampshire (Seabrook Unit Nos.1 and 2) and it estimates that these units will commence operation in 1983 and 1985, respectively.
Boston Edison Company proposes to construct a 1,150,000 kilowatt nuclear generating unit in. Plymouth, Massachusetts (Pilgrim Unit No. 2) presently
, scheduled'for initial operation in 1985. The connecticut Light and Power Company, The Hartford Electric Light. Company and Western
. Massachusetts Electric Company are constructing a 1,150,000 kilowatt-nuclear generating unit in Waterford, Connecticut (Millstone Unit No. 3) presently scheduled for initial operation in 1986. The
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Registrant is an owner-participant in each of these units. owning
. 20% of each of Seabrook Unit Nos.1 and 2, 3.3% of Pilgrim Unit No.
2 and 3.685% of Millstone Unit No. 3, and will be entitled to a4 percentage of the generating capability of each unit equal to such.
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ownership percentage.
The Registrant considers the rate relief authorized by the ConnecticLt Public Utilities Control Authority (since Jasuary 1, 1979 the Division of Public Utility Control) in December, 1978 (as to which see page 7 through 11, inclusive, of the accompanying 1978 Annual Report to shareowners,_ incorporated by reference in this Form 10-K annual report) inadequate to assure the Registrant's ability to finance its entire new construction program for the years 1979-1986. Due to this consideration and to the view ex-pressed by a majority of;the Public Utilities Control Authority Commissioners that the Registrant's 20% ownership share in Seabrook i
Unit Nos.1 and 2 should be reduced, the Registrant has offered to is sell half of said ownership share to other New England utilities.
- While it is believed that other utilities will accept this offer, the marketability of the. Registrant's' ownership share in these generating units cannot be assured, and the adequacy a~ d reliability n
m of ~ the Registrant's future service to its customers and future earnings may be adversely affected by this sale.
a,.
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It has been the experiencefof the electric utility industry that the' construction and initial operation of nuclear generating units are subject to increasingly stringent lic'ensing requirements.
l (.
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These licensing requirements and other factors have tended to delay completion dates for, and increase substantially the cost of, new nuclear generating units.
A construction permit for Seabrook Unit Nos. 1 and 2 was issued by the federal Nuclear Regulatory Commission (NRC) in 1976 '
and these units are presently under construction. The licensing of these units has been plagued by lengthy delays and has been consistently opposed by a number of intervening groups, which have participated actively in licensing proceedings, filed numerous lawsuits and demonstrated at the construction site. Construction of these units was suspended in 1977 and 1978 for periods of seven months and three weeks, respectively, due to licensing proceedings and court F
appeals, several of which are still pending.
The NRC construction permit proceedings on Pilgrim Unit No. 2 are not yet completed, and the NRC has denied an application for permission to perform preliminary work on the site.
This unit is j
being opposed by various governmental bodies and intervening groups, several of which are participating' actively in the licensing proceedings.
A construction permit for Millstone Unit No. 3 was issued by the NRC in 1974 and the unit is presently under construction, al-l though its in-service date has been delayed from 1982 to 1986.
It will be necessary at the appropriate time to apply for an extension of this construction permit, which expires on October 1, 1979.
In view of the various uncertainties, including existing and possible interventions and appeals in licensing proceedings, the Registrant is unable to predict whether the necessary authorisations for the construction and operation of these four nuclear units can
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be obtained on a satisfactory basis.
The construction of nuclear generating units in the United Various States continues to be a subject of public controversy.
groups have published articles and reports, filed lawsuits and participated in licensing proceedings, claiming that the prolif-eration of nuclear power plants under the present state of nuclear technology presents unacceptable risks to public health and safety and to the environment.
In addition, some of these groups have proposed restrictive' legislation in Connecticut, Massachusetts and New Hampshire, and others have raised questions at public hearings regarding the ultimate cost of electricity produced by nuclear plants as opposed to other fucis.
It is possible that some of the claims made by such groups, if they should prevail, or the existence of the controversy itself, will cause delays in or prevention of the construction of nuclear generating units presently planned, or under construction, or' substantial modifications to or extended shutdowns of plants in operation, any of which could have an adverse impact on the results of operations of the Registrant.
The complexity of present-day electric utility technology and the time required for the construction of generating facilities and e-for the completion of licensing and other regulatory proceedings a
relating thereto have compelled the Registrant, and other electric utilities, to make substantial investments in su,ch facilities prior l
to the' completion of licensing and regulatory proceedings.
E m - - -
o Cancellation of any of the four future nuclear generating units in which the Registrant has an ownership interest, for any reason, including, among others, the inability to obtain' necessary permits or suf ficient financing, could result in substantial charges against the Registrant's income, which charges might prove to be unrecoverable.
J These charges could include substantially all of the amounts incurred by the Registrant through any such' cancellation date and, in addition, could include cancellation penalties and other charges, which might be substantial, imposed by vendors and others. The scheduling of each of these units, and the right to cancel the unit, is the -
. responsibility of the particular New England utility which is f
constructing the unit and, although the other owner-participant.s l
must be consulted, a determination to cancel can be made without
[
their consent.
l Public Service Company of New Hampshire (PSNH) has experienced significant problems in financing its new construction program, particularly its 50% ownership share of Seabrook Voit Nos.1 and 2, l
due to uncertainty concerning future legislation by the legislature l
of the State of New Har.pshire. As a result, PSNH has offered to I-sell up to three fifths of its ownership share in these units.
l which might adversely affect the Registrant's offering of a portion 1.
of its ownership share described above. PSNH has stated that, absent sufficient favorable responses to its offering, it will be l
compelled to suspend construction of the units. The adverse impact on the Registrant of an extended suspension, or a cancellation, of l
Seabrook Unit Nos. 1 and 2 on account of PSNH's inability to finance f-its share of construction costs would likely be material.
Transmission System Transmission lines of the Registrant consist of approximately l:
95 circuit miles of overhead lines and approximately 14 circuit l
miles of underground lines, all operated at 345 KV or 115 KV and located within or immediately adjacent to the territory served by l
the Registrant.
These transmission lines interconnect the Registrant's gnglish, Steel Point, Bridgeport Harbor and New Haven Harbor generating stations with one another and with the transmission lines of The Connecticut Light and Power Company at 11 locations. A major i
portion of the Registrant's transmission lines. is constructed on a railroad right-of-way pursuant to a Transmission Line Agreement which expires in May 1980 and is renewable to May 2000.
Distribution System j
I The Registrant owns and operates 76 distribution substations i
with a capacity.of approximately 534,000 KVA. Underground and j
aerial cables, most of which are operated at:13,800. volts, supply electricity to distribution substations and certain large industrial customers. 1he heavy load areas in the centers of New Haven and Bridgeport are served by underground networks. Other customers are
(
served by means of 13,800, 4,160 and 2,400 volt ' primary lines and
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c-240 and 120 volt secondary lines. The Registrant has approximately 2,934 pole-line miles of overhead distribution lines and approximately 127 conduit-bank miles of underground distribution lines.
- General Plant The Registrant owns and operates its principal executive office building in New Haven and office buildings in Bridgeport and Derby. The Registrant owns and operates three distribution head-sjuarters buildings in Bridgeport Derby and Hamden.
The Registrant also owns and operates three distribution service buildings in
/
Fairfield, Milford and New Haven and a test center building in New Haven.
Item 4.
Parents and Subsidiaries The Registrant has one wholly owned subsidiary, Research Center, Inc., a corporation incorporated under the laws of the State of Connecticut.
Research Center, Inc. is a part own.er of a tract of land in Meriden and Wallingford, Connecticut, which is available for sale and development for light industry, research and office facilities. Research Center In::. and the other part owner of the tract have agreed to sell the tract in j\\
its entiret.y, provided certain highway, zoning and other j^^
approvals can be obtained.
Financial statements for this subsidiary are not filed, because it is not a significant subsidiary.
Item 5.
Lezal Proceedings The Registrant has been ordered by the Connecticut Commissioner of Environmental Protection to di.coct all sanitary waste watern from the Registrant's English Station in New Haven to the municipal sanitary sewage collection system of the City of New Haven at the earliest practicable date af ter l
l sanitary sewer service is available to said Station. The Registrant.has agreed to comply with this order.
See page 8 above regarding pending notices of violation issued by the Connecticut Department of Environnental Protection with respect to two generating units at the Registrant's l
Bridgeport Harbor Station.
On March 6, 1979, the Department of Transportation, j
i United States Coast Guard (USCG), issued a preliminary de-termination that a civil penalty in the amount of $1,000 should be assessed against the Registrant as-a result of a minor accidental oil discharge from the Reg,istrant's English i
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Station into the Mill River ?t New Haven, Connecticut, on July 21, 1978, which was found'to be in violation of the Federal Water Pollution Control Acc. The Registrant assumed responsi-bility for the cost of removing the oil; but it has not yet determined what response it will make to the preliminary determination of the USCG regarding the assessment of a civil
~
penalty.
~
The federal Environmental Protection Agency (EPA) has asserted that the permission granted to the Registrant by the Connecticut Commissioner of Environmental Protection to burn higher-sulfur fuel oil, described at page 3 above, is not i
lawful under the federal Clean Air Act.
The Registrant is unable to predict whether the EPA will commence a legal pro-ceeding against the Registrant 'assed on this assertion.
Item 6.
Increases and Decreases in outstandina Securities and Indebtedness During 1978, the Registrant issued shares of its class of securities entitled " Common Stock, no par value" as follows:
Number of ghares
(
Amount outstanding as of December 31, 1977 5,020,119 5,946*
Issued January 1, 1978 Issued April 1, 1978 6,721*
Issued July'1, 1978 7,119*
Issued July 31, 1978 1,000,000**
Issued October 1, 1978 7.113*
Amount outstanding as of December 31, 1978 g
- All of these shares were issued pursuant to the Registrant's Automatic Dividend Reinvestment and Common Stock Purchase Plan, under which Common Stock, no par value, shareholders who elect to participate may automatically reinvest their dividends in additional authorized but unissued shares of the Registrant's Common Stock, no par value, and may also make optional cash payments of from $10 to $3,000 per quarter to purchase such additional. shares.
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- See the description of the transaction in which this in-crease occurred in the Registrant's Form 10-Q quarterly report for the quarter ended June 30, 1978, which is incorporated by reference in this Form 10-K annual report.
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Changes in Securities and Changes in Security for Registered
' Item 7.
Securities I
(a)
The constituent instruments defining the rights of the holders of the Registrant's classes of registered securities have not been modified.
(b)
None of the rights evidenced by any class of registered securities of the Registrant have been limited or qualified by the issuance or modification of any other class of securities of'the Registrant.
(c)
There has been no withdrawal or substitution of assets securing any class of registered securities of the Registrant.
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Item 8.
Defaults upon Senior Securities (a)
There has been no default in the payment of principal, interest, any sinking or purchase fund installment, or any other default, with respect to any indebtedness of the Registrant or its subsidiary, Research Center, Inc.
(b)
There has been no arrearage in the payment of dividends or any other delinquency with respect to any class of stock of the Registrant or its subsidiary, Research Center Inc.
' Item 9.
Approximate Number of Equity Security Holders Approximate number of holders of record of each class of equity securities of the Registrant as of December 31, 1978:
Number Title of Class Record Holders w-.
Preferred Stock, cumulative,
$100 par value 4.35% - Series A 145
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4.72% - Series B-35 4.64% - Series C 13 5-5/8% - Series D 11 7.60% - Series E 10 7.60% - Series F 10 Freferred Stock, cumulative,
$25 par value 8.80%, 1976 Series 2,449 Common Stock, no par value 35,285 Item 10. Submission of Matters to a Vote of Security Holders No matter has been submitted to a vote of security holders, through the solicitation of proxies or otherwise, except the election of directors and the approval of auditors. These matters were voted upon at the annual meeting of the shareholders, which was held on April 7, 1978 and for which proxies.were solicited pursuant to Regulation 14 under the Securities Exchange Act of 1934.
There was no solicitation in opposition to the management's nominees for directors or management's y
selection of auditors as listed in the proxy statement.
e Management's selection of auditors was approved, and the following persons were elected directors at the meeting:
Angus N. Gordon, Jr., Albert L. Coles, John D. Fassett, D. Allen Bromley, John M. C. Betts, Norwick R. Goodspeed, Robert D..Russo, M. D., James F. Cobey, Jr., Leland W. Miles and Leon A. Morgan.
~
There was no other person whose term of office as a director continued after the meeting.
Item 11. Indemnification of Directors and Officers Section 33-320s of the Connecticut Stock Corporation Act, as.
amended, provides as follows:
(a)
Except as otherwise provided in this section, a corporation shall indemnify any person who was or is a party, or was threatened to be made a party, to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in
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the right of the corporation, by reason of the fact'that he, or the person whose legal representative he is, (1) is or was a shareholder, director, officer, employee or agent of the corporation, or (2) is or was serving at the request of the corporation (A) as a director, officer or* employee of another i
e
. e.
corporation, partnership, joint venture, trust, or other enterprise, or (B) as an agent of such other corporation, partnership, joint venture, trust, or other enterprise other than an employee benefit plan or trust, or (3) is or was a director, officer or employee of the corporation serving at the request of the corporation as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the corporation or employees of any such other corporation, partnership, joint venture, trust, or other enterprise, against judgments, fines, penalties, amounts paid in settlement and expenses, including attorneys' fees, actually and reasonably t
incurred by him and the person whose legal representative he is, in connection with such action, suit or proceeding, or any appeal therein.
The corporation shall not so indemnify any such person unless it shall be concluded as provided in subsection 7
(c) of this section that such person, and the person whose legal representative he is, acted in good faith and in a manner he reascnably believed to be in the best interest of the corporation or, in the case of a person serving as a fiduciary of an employee-benefit plan or trust, either in the best interest of the corporation or in the best interest of the participants t
and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust, and, with respect to any criminal action or proceeding,
}1-that he had no reasonable cause to believe his conduct was un1' awful; except that, in connection with an alleged clain based upon his purchase or sale of-securities of the corporation or of such other enterprise, the corporation shall only indemnify such person af ter the court shall have determined, on application as provided in subsection (d) of this section, that in view of i
all the circumstances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine.
The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea or nolo contendere or its equivalent shall not, of itself, create a presumption that the perso'n did not act in good faith or in a manner which he did not reasonably ~ believe to be in the best interests of the corporation or of the participants and beneficiaries of such employee benefit plan or trust and consistent with the provisions of such employee benefit plan or trust, or, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful.
(b)
Except as otherwise provided in this section, a corporation shall indemnify any person who was or is a party, or was e,,,
threatened to be made a party to any action, suit or proceeding, by or in the right of the corporation, to procure a judgment in its favor by reason of the fact that he, or the person 3
whose legal ~ representative he is, (1) is or was a shareholder, director, officer,~ employee'or agent of the corporation, or i
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(2) is or was serving at the request of the corporation (A) as a director, officer or employee of another corporation, partnership, joint venture, trust, or other enterprise, or (B) as an agent of such othe'r corporation, partnership, joint venture, trust, or other enterprise other than an employee benefit plan or trust, or (3) is or was a director, officer or employee of the corporation serving as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of the corporation or employees of any such other corporation, partnership, joint venture, trust, or other enterprise, against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with such action, suit or proceeding, or any appeal therein, in relation to matters as to which such person, or the person whose legal representative he is, is finally adj.udged not to have breached his duty to the corporation, or where the court, on application as provided in subsection (d) of this section, shall have determined that in view of all the circum-stances such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. The corporation shall not so indemnify any such person for amounts paid to the corporation, to a plaintiff or to counsel for a plaintiff in settling or otherwise disposing of a threatened action or a pending action, with or without court approval; or for expenses incurred in defending a threatened action or a pending action which is settled or otherwise
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disposed of without court approval.
(c)
The conclusion provided for in subsection (a) of'this section may be reached by any one of the following (1) The board of directors of the corporation by a consent in writing signed by a majority of those directors who were not parties to such action,' suit or proceeding; (2) independent legal counsel selected by a consent in writing signed by a majority of those directors who were not parties to such action, suit or proceeding; or (3) the shareholders of the corporation by the a firmative d
vote of at least a majority of the voting power of uhares not owned by parties to such action, suit or proceeding, represented at an annual or special meeting of shareholders,' duly called with notice of such purpose stated.
Such person shall also be entitled to apply to a court for such conclusion, upon application as provided in subsection (d), even though the conclusion reached by any of the foregoing shall have been adverse to him-or to the person whose legal representative he is.
(d)
An application for indemnification or for a conclusion as provided in'this section shall be made to the court in which u,_,
the action is pending or to the superior court for the judicial district where the principal office of the corporation is located.
The application shall be made in such manner and form as may be required by the' applicable rules of the court
/_
or, in the absence thereof, by direction of 'the court.
The
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s court may also direct that notice be given in such manner as it may require at the expense of the corporation to the share-holders of the corporation and to such other persons as the court may designate.
In the case of an application to a court in which an action is pending in which the person seeking indemnification is a party by reason of the fact that he, or the person whose legal representative he is, is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or as a fiduciary of an employee benefit plan or trust maintained for the benefit of employees of any such other corporation, partnership, joint venture, trust or other enterprise, timely notice of such application shall be given by such person to the corporation.
(e)
Expenses which may be indemnifiable under this section incurred in defending an action, suit or proceeding may be paid by the corporation in advance of the final disposiuion of such action, suit or proceeding as authorized by the board of directors upon agreement by or on behalf of the shareholder, director, of ficer, employee or agent, or his legal representative, to repay such amount if he is later found not entitled to be indemnified by the corporation as authorized in this section.
(f)
A corporation shall not indemnify any shareholder, director, officer, employee or agent or any director, officer or employee
(
serving at the request of the corporation as a fiduciary of an-
'~
employee benefit plan or trust, against judgments, fines, amounts paid in settlement and expenses, including attorneys' fees, to an extent greater than that authorized by this section, but the corporation may procure insurance providing greater indemnfication and may share the premium cost with any share-holder, director, officer, employee or agent on such basis as may be agreed upon.
(3)
The rights and remedies provided in this section shall be ex-clusive. A corporation shall not indemnify any shareholder, director, officer, employee or agent or any director, officer or employee serving at the request of the corporation as a fiduciary of an employee benefit plan or trust, against judg-ments, fines, amount paid in settlement and expenses, including attorneys', fees, to an extent either greater or less than that authorized in this section, and no provision contained in the certificate of incorporation, the bylaws, a resolution of shareholders or directors, an agreement, or otherwise shall be valid unless consistent with this section.
The Company's excess liability insurance policy indemnifies ue -
its Directors and Officers for any and all sums which they shall be legally obligated to pay and shall pay or by final judgment be adjudged to pay as damages, jud,gments, settlements
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and costs, charges and expenses arising from any claLa or claims which may be made, and for which the Company has not provided reimbursement, by reason of such Director or Officer's being or having been a Director or Officer of the Company or of another corporation for which he is serving or has served at the request of the Company as a Director or. 0fficer. The Directors and Officers of the Company pay a portion of the premium cost of the Company's excess liability insurance attributed to this coverage.
Execu'tive Officers of the Registrant (a) The names and ages of all executive officers of the Registrant and all persons chosen to become executive officers, all positions and offices with the Registrant held by each such person, and the period during which he has served as an officer in the office indicated, are as follows:
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Positions and Period of Name
- AJ3, Offices Held Service in Office John D. Fassett 53 President July 15, 1974 to date Leon A. Morgan 44 Executive Vice President -
February 1, 1976 Operations, Engineering to date and Customer Services James F. Cobey, Jr.
52 Executive Vice President -
October 1, 1976 Finance and Administration to date and Treasurer Charles W. Cook, Jr.
47 Vice President - Customer February 6, 1975 Services to date U
Robert L. Fiscus 41 Vice President and Controller October 1, 1976.
8 to date i
John V. Fratus, Jr.
55 -
Senior Vice President -
January 1, 1978 Governmental Relations to date Richard J. Grossi 43 Vice President - Engineering June 15, 1974 and Planning to date Albert Harary 41 Vice President - Management January 1, 1978 Services to date David W. Hoskinson 43 Vice President - Operations February 1, 1976 to date e
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Positions and Period of Name Aggt Offices Held Service in Office Marcus R. McCraven 55 Vice President -
January 1, 1978 Environmental Engineering to date Anne G. Spinney 57 Vice President - Communications April 20, 1977 to date Earle G. Anderson 62 Assistant Vice President -
February 23, 1976 Governmental Relations to date Harold J. Moore, Jr.
51 Assistant Vice President -
January 1, 1978 Employee Relations to date t
Richard F. Skinner 49 Secretary February 1, 1975 w
to date Os William A. Elder 37 Assistant Treasurer February 1, 1976 to date James L. Benjamin 37 Assistant Controller February 1, 1976 to date 9
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o There is no family relationship between any director, executive officer, or-person nominated or chosen to become a director or executive officer, of the Registrant.
All execu,tive officers of the Registrant hold office during the pleasure of the Registrant's Board of Directors. There is no arrangement or understanding between any executive officer of the Registrant and any other person pursuant to which such officer was selected as an officer.
(b) A brief account of the business experience during the past five years of each executive officer of the Registrant is as follows:
John D. Fassett.
During the period January 1, 1974 to July 15, 1974, Mr. Fassett served as Vice President and General Counsel of the Registrant. He has served as President of the Registrant since July 15, 1974.
Leon A. Morgan.
During the period January 1, 1974 to February 1, 1976, Mr. Morgan served as Vice President-Operations of the Registrant.
He has served as Executive Vice President-Operations, Engineering and Customer Services of the Registrant since February 1, 1976.
(
James F. Cobey, Jr.
During the period January 1, 1974 to February 1,1975, Mr. Cobey served as Secretary and Treasurer.
of the Registrant.
From February 1, 1975 to October 1, 1976',
he served as Vice President-Finance and Accounting and Treasurer of the Registrant. He has served as Executive Vice President-4 Finance and Administration and Treasurer of the Registrant since October 1, 1976.
Charles W. Cook, Jr. _ During the period January 1,1974 to February 6, 1975, Mr. Cook served as Vice President-Marketing of the Registrant. He has served as Vice President-Customer Services of the Registrant since February 6,1975.
~*
Robert L. Fiscus.
During the period January 1, 1974 to October 1, 1976, Mr. Fiscus served as Controller of the Registrant. He has served as Vice President and Controller of the Registrant since October 1, 1976.
John V. Fratus, Jr.
During the period Janu'ary 1, 1974 to October 1, 1976, Mr. Fratus served as Vice Pres'ident-Employee Relations of the Registrant. From October 1, 1976 to January 1, 1978, he served as Vice President-Governmental Relations of
=,..
the Registrant. He has served as Senior Vice President -
Covernmental Relations of the Registrant since January 1, 1978.
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s
!I Richard J. Grossi.
During the period January 1, 1974 to
~
March 1,1974, Mr. Grossi served as Project Manager, New Haven Harbor Generating Station, of the Registrant.
From March 1, 1974 to June 15, 1974, he served as Executive Assistant to the i
Vice President-Engineering and Planning of the Registrant. He has served as Vice President-Engineering and Planning of the Registrant since June 15, 1974.
[
Albert Harary. During the period January 1,1974 to February 1, 1976, Mr. Harary served as Director of Management Information Systems of the Registrant.
From February 1,1976 to January k
1, 1978, he served as Assistant Vice President-Computer Services i
of the Registrant. He has served as Vice President-Management Services of the Registrant since January 1, 1978.
David W. Hoskinson.
During the period January 1, 1974 to April 1, 1974, Mr. Hoskinson served as Chief Mechanical Engineer of the Registrant.
From April 1,1974 to February 1, 1976, he served as Superintendent, Steel Point Generating Station, of the Registrant. He has served as Vice President-Operations cf the Registrant since February 1,1976.
1 Marcus R. McCraven. During the period January 1, 1974 to February 1, 1976, Mr. McCraven served as Director of Environmental p
.(
Engineering of the Registrant. From February 1, 1976 to January 1,
't 1978, he served as Assistant Vice President-Environmental
!'~
Engineering of the Registrant. He has served as Vice President-Environmental Engineering of the Registrant since January 1, f
-1978.
Anne G. Spinney.
DurinS the period January.1, 1974 to February 1, 1976, Mrs. Spinney served as Director of Information Services of the Registrant. From February ~1, 1976 to April 20, 1977 she served as Assistant Vice President-Communications of the l
Registrant.
She has served as Vice President-Communications of the Registrant since April 20, 1977.
I f
Earle G. Anderson. During the period January 1, 1974 to l
February 23, 1976, Mr. Anderson served as Assistant Vice President-Community Affairs of the Registrant. He has served l
as Assistant Vice President-Governmental Relations (formerly Governmental Services) of the Registrant since February 23, 1976.
Harold J. Moore, Jr.
During the period January 1,1974 to j-October 1, 1976,-Mr. Moore served as Labor Relations Manager
" ' ~ ^
of the Registrant.
From October 1, 1976 to January 1, 1978, he served as Director of Employee Relations of the Registrant.
He has served as-Assistant Vice President-Employee Relations c
of the Registrant since January 1, 1978.
j L
1
, ~ _ _.. - _.., _.,. _,.. _ _ _ _ _ _ _ _ _ _ _ _
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Richard F. Skinner.
During'the period January 1, 1974 to February 1,1975, Mr. Skinner served as Administrative Assistant to the Secretary and Treasurer of the Registrant. He has served as Secretary of the Registrant since February 1,1975.
William A. Elder.
During the period Jan4ary 1, 1974 to February 1, 1975, Mr. Elder served as Supervisor of Cash Records of the Registrant.
From February 1, 1975 to February 1, 1976, he served as Manager-Financial Planning and Cash Management of the Registrant. He has served as Assistant Treasurer of the Registrant since February 1, 1976.
James L. Benjamin.
During the period January 1,1974 to February 1,1976, Mr. Benjamin served as Accounting Manager of the Registrant. He has served as Assistant Controller of the Registrant since February 1, 1976.
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Item 12.
Financial Statements, Exhibits Filed, and Reports on Form 8-K.
(a) 1. Financial Statements INDEX TO FINANCIAL STATEMENTS The financial statements, the statement of accounting policies, the notes to financial statements and the related report thereon of Coopers & Lybrand, independent certified public accountants, appearing on pages 14 to 22 of the accompanying 1978 Annual Report to shareowners are incorporated by reference in this Form 10-K annual report. With the exception of the material incorporated by reference in Items 1 and 3 above, the aforementioned financial statements, statement of accounting policies, notes to financial statements and accountants' report thereon, and the management's discussion and analysis of financial results incorporated by reference in Item 2 above, no other data appearing in the accompanying 1978 Annual Report to shareowners is to be deemed filed as part of this Form 10-K annual report.
The additional financial data indicated below should be read in conjunction with the financial statements in the accompanying 1978 Annual Report to shareowners.
Reference 1978 Form Annual Report 10K to sharecuners
(,Pge_)
(Page)
P Report of independent certified public
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accountants 22
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Consent of independent certified public accountants F-1 Statement of income for the years ended December 31, 1978 and 1977 14 Statement of retained earnings for the years ended December 31, 1978 and 1977 15 Statement of. sources of funds for gross property additions for the years ended December'31, 1978 and 1977 15 Balance sheet, December 31, 1978 and 1977 16-17 C
Statement of accounting policies and notes to financial-statements 18-22 Replacement cost information (unaudited)
F-2 to F-4 m.
. Supplementary information to financial
- ( -
-statements F-5 and F-6 s
m ~
6 9
f Reference 1978 Form Annual Report 10K to shareowners (Page)
(Page)
Schedules:
V Property, plant and equipment for the years ended December 31, 1978 and 1977 F-7 and F-8 VI Reserve for depreciation of property, plant and equipment for the years
(
ended December 31, 1978 and 1977 F-9 IX Bonds, mortgages and similar debt at December 31, 1978 F-10 XII Valuation and qualifying accounts and reserves for the years ended December 31, 1978 and 1977 F-11 Capital shares at December 31, 1978 F XIII XVI Supplementary income statement information k-(included in Note F of Notes to Financial Statements appearing on page 21 of the
. accompanying 1978 Annual Report to shareowners) i l
Schedules other than those listed above have been omitted since they are either not required or are inapplicable.
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(2) 2.
Exhibits 11 D 19 Detailed description relating to supplementary pensions being paid to certain retired employees, superseding Exhibit 11 D 18*.
11 F 8 Copy of Agreement, dated September 16, 1978, between The United Illuminating Company and Federation of Utility Employees, Affiliated with Utility Workers Union of America, AFL-CIO.
13 B 14'm Copy of Signature Page, adding Town of Princeton Municipal Light Department as signatory to Exhibit 5.5-l**.
13 B 14n Copy of Agreement Amending NEPOOL Power Pool Agreement, dated as of August 15, 1978, amending Exhibit 5. 5-1**.
13 C 2 Copy of Transmission Agreement, dated as of May 1, 1961, between The Connecticut Light and Power Company and The United Illuminating Company, relating to the transmission of electric energy on a portion of the lines of the latter company.
13 C 8 Copy of Amendment to Derby Junction Transmission Agreement between The Conneticut Light and Power Company and The Un'ited Illuminating Company, dated as of June 1, 1978, amending
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i Exhibit 13 C 2.
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13 D 5 Notice, dated April 24, 1978, of The United Illuminating Company's intention to extend term of Transmission Line Agreement, dated
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i January 13, 1966, Exhibit 5.4**.
i 14 J Copies of significant rate schedules of The United Illuminating Company, superseding Exhibit 14 1*..
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- This exhibit was filed with Annual Report (Form 10-K) for l
the fiscal year ended December 31, 1977.
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- This exhibit was filed with Registration Statement No. 2-60849, effective July 24, 1978.
i (b) The Registrant filed no reports.on Form 8-K during the last quarter of the fiscal year ended December 31, 1978.
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SIGNATUNES Pursuant to the requirement of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE UNITED ILLUMINATING COMPANY 4
By James F. Cobey, Jr.
Executive Vic,e President-Finance and Administration and Treasurer k.
Date: March-1979 O
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^s COOPERS & LY B R A N D CERTirIED PUBUC ACCOUNTANTS A MEMBER reRW Or COOPERS & LYBRAND 09eTERNATIONAL)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
We consent to_the incorporation by reference in this Annual Report on Form 10-K of our report dated January 26, 1979 appearing in the 1978 Annual Report to Shareowners of The United Illuminating Company.
In connection with our examinations referred to in our-report appearing in the 1978 Annual Report to Shareowners, we have also examined the supplementary information and schedules listed in the foregoing index.
In our opinion, such information k
and schedules, when read in conjunction with the financial state-ments, present fairly the information; required to be included therein, and are in conformity with generally accepted accounting L
principles applied on a consistent basis.
COOPERS & LYBRAND New York, New York January. 26, 1979.
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THE UNITED ILLUMINATING COMPANY
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REPLACEMENT COST INFORMATION (UNAUDITED)
'In accordance with the reporting requirements of the Se~curities and Exchange Commission, the Company has estimated the cost of replacing its productive capacity at December 31, 1977 and 1978. As a result of inflation and increased environmental and regulatory requirements, the estimated cost of replacing the Company's productive capacity would substantially exceed the historical cost of such facilities reported in the financial statements.
Set forth below are the estimated replacement cost of utility plant at December 31, 1977 and December 31, 1978 and the calculated reserve for depreciation on a replacement cost basis in comparison to the historical cost of such plant and applicable reserve for depreciation as shown in the Company's balance sheets as of those dates:
December 31, 1977 December 31, 1978 Estimated Estimated Replacement Historical Replacement Historical Cost Cost Cost Cost (Millions of Dollars)
Utility plant:
Replacement cost determined
$1,086
$495
$1,156
$508
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Included at historical cost 117 117 174 174 1,203 612 1,330 682 Less reserve for depreciation 324 149 366 162 Net utility plant
$ 879
$463
$ 9 64 112Q Land and land-rights, plant under construction and a minor amount of
' plant not contemplated to be replaced have been included at historical cost.
The replacement cost of fuel, materials and supplies inventories has not been-estimated because inventories are insignificant in relation to total assets.
The replacement cost of the Company's utility plant does not reflect the
.current value of these assets; it simply represents management's estimate of the cost of replacing the Company's productive capacity at the; respective dates on the assumption that all such capacity could be replaced at one time using current technology and construction methods, consistent with current environmental and regulatory requirements. The actual, replacement of productive capacity will take place over many years. Ther'e is no assurance that such replacement will take place in the manner, or at the cost, assumed in developing these estimates.
For purposes of estimating replacement cost of electric production plant, it was assumed that the generation mix would ' consist of nuclear facilities to 1
meet base load requirements, combined cycle units (gas turbines with exhaust If O
F-2 v
heat recovery boilers) to meet intermediate or cycling load requirements, and
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. gas turbines for peaking loads. Substantially all of the Company's actual generating facilities at December 31, 1977 and 1978 were oil-fired.
An assumed, rather than the actual, generation mix was used for purposes of estimating replacement cost of production plant for the following reasons:
1.
The long range goals developed by and for the member companies of the New England Power Pool (NEPOOL) include substantial reliance on nuclear power to meet the region's l'
base load energy requirements. The Company's support of these goals is evidenced by its participation as a joint owner in four nuclear generating units, either presently under construction or planned for construction, which 4
I are scheduled for commercial operation in the mid-j 1980's.
2.
There is a decreasing possibility that oil will continue to be a dependable source of fuel supply for electric generation; the provisions of the National Energy Act effectively prohibit construction in New England of any base load generating plant designed to use oil as its i
primary energy source.
h, 3.
The Company had excess generating capacity at December 31,
- [1 1977 and 1978.
This excess, included as peaking capacity
,J in the development of estimated replacement cost, is expected to decline in future years to the extent that load growth occurs.
l The replacement cost of production plant was determined by applying engineering l'
estimates of December 31 construction costs per megawatt for each type-of generating facility to the megawatts of capacity by type of facility assumed for replacement cost purposes. These cost' estimates were based upon construction of economic size units, in which the Company would own a sufficient share to fulfill its generating mix requirements (an assumption which is consistent with the purposes of NEP00L), and which meet current air and water pollution j1 control requirements. A significant amount of the added investment on a replacement cost basis is ' attributable to costs of constructing nuclear plants which are higher than those for oil-fired plants.. There is no assurance that the generation mix assumed for replacement cost purposes will. eventually occur nor, if it does, is there any assurance that the actual cost of replacement will be that assumed in developing these estimates, 'because of uncertainties.
surrounding the construction of nuclear plants, changing technology, changing l-environmental and other regulatory requirements and other factors beyond
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r management's control.
The cost of production plant on both a replacement cost basis and a
. historical cost basis excludes 54.6 megawatts of capacity in Connecticut Yankee Atomic Power Company's nuclear generating unit to which the Company is entitled as a result'of its 9.5% stock ownership interest in that company.
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The investment in Connecticut Yankee is accounted for on an equity basis on
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v the Company's bo'oks.
Therefore, tha cost of the Company's equivalent share of Connecticut Yankee capacity is not included in the historical cost of utility
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plant, and, for that reason, this capacity was not included in the development of estimated replacement cost of production plant.
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The replacement cost of transmission, distribution and general plant was determined principally by applying engineering estimates of current costs of construction to the various types of facilities. Where appropriate and con-sistent with management's plans for replacing existing facilities, technological improvements and modern construction methods were utilized in developing the cost estimates. Various indices were used to develop the estimated cost of replacing a small portion of distribution and general plant.
The res'erve for depreciation on a replacement cost basis was developed by applying the same percentage relationship that existed between gross depreciable utility plant and reserve for depreciation by functional groups on a historical cost basis at December 31 of each year to the estimated replacement cost of productive capacity.
Depreciation expense on a replacement cost basis amounted to $35 million for 1977 and $37 million for 1978, compared to $14 million in each year on a historical cost basis. Replacement cost depreciation for gas turbine production plant and transmission, distribution and general plant was developed by applying the actual functional class straight-line depreciation rates currently in use to the respective functional class averages of the beginning and end of year estimated replacement costs. Straight-line depreciation applicable to the cost of nuclear and combined cycle capacity assumed in developing the estimated
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replacement cost of production plant was based on a 30-year life, which in management's opinion is more representative of the life for plants of these types than the weighted average depreciable life of 38 years applicable to the Company's present oil-fired facilities. Depreciation on a replacement cost basis for nuclear units does not include an allowance for decommissioning costs since at the present time there is no reliable basis for determining either the-type of decommissioning which may be required or its cost.
The difference'between replacement cost basis depreciation and historical' cost depreciation cannot be attributed solely to the impacc of inflation on
,the Company's operations, nor can it be tran' slated into a deduction from
- earnings. Such a simplistic interpretation is precluded since replacement.
cost data also includes the considerable additional costs of complying with more' stringent environmental and regulatory requirements. Furthermore, the data presented do not reflect the substantial operating economies that would be realized by the use of equipment incorporating the latest technology and, most significantly, by the substitution of nuclear generating capacity for a portion of the Company's present oil-fired generating facilities. It is estimated that if the generating mix assumed in the development of estimated' replacement cost of production plant had actually been in place in 1977 and 1978, fuel and interchange energy savings would have more than of fset the increase in estimated replacement cost depreciation expense over historical, m.
cost depreciation expense. Most importantly, the data presented gives no recognition to the ratemaking process.
Since the Company's rates for service to its customers have in the past been based on the cost of providing such service and have from time to time been revised to* reflect increased costs of;
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service, the Company believes that any higher replacement costs it may ex-perience in the future will be recovered through the normal regulatory process.
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THE UNITED ILLUMINATING COMPANY s
SUPPLEMENTARY INFORMATION TO FINANCIAL STATEMENTS Deferred Debits - Other:
Deferred debits - other include unamortized debt expense of $607,098 in 1978 and $657,297 in 1977 which pertain to outstanding issues; such amounts are being amortized ratably over the remaining lives of the respective issues.
Other Accrued Liabilities:
Other accrued liabilities include:
1978 1977 Accrued payroll
$1,947,227
$1,843,788 Accrued pensions 3,706,089 3,488,789 Basis of Accounting for Connecticut Yankee Atomic Power Company Ndelear Fuel and Estimated Plant Decommissioning Costs:
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The Connecticut Yankee Atomic Power Company (Connecticut Yankee), a nuclear generating company in which the Company has a 9.5% stock interest, has advised the Company as follows of its basis of accounting for nuclear fuel and estimated plant decommissioning costs:.
The cost of nuclear fuel, based on a net salvage value of zero, is amortized to operation expense on a unit-of-production method at rates based on estimated kilowatt-hours of energy to be provided.
Commencing January 1, 1979 a provision for estimated spent fuel disposal costs will be included in nuclear fuel expense.
This will include a provision for prior period spent. fuel cost recovery over a period of approximately 10 years on an assumption that a federal repository will be available in 1988, plus a current year provision for fuel assemblies in the reactor. The estimated un-recovered spent fuel disposal cost as of December 31, 1978 is
$18.2 million.
Storage for such spent fuel at the Connecticut Yankee plantis' sufficient until at least the mid 1990's.
A study completed in 1976 estimated decommissioning costs for the Connecticut Yankee unit at approximately $29 million (1978 level dollars).
This study contemplated a decommissioning method with an indefinitely long period of time between retirement and completion 22-.
i of the removal process.
Preliminary results of a 1979 study indicate increased costs for three alternative methods of decommissioning.
The cemplete removal of the facilities at the time of retirement
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method, with an estimated cost of $57 million,'is indicated by F-5
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the 1979 study to be the most viable and economic method of decommissioning the unit.
-The depreciation rates recognized on the books and for regulatory rate setting, subject to approval of the Federal Energy Regulatory Commission (FERC), include an element based,on the recovery of about $29 million. The increased costs indicated by the 1979 i
study are not currently included in the Connecticut Yankee de-
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preciation rates.
It is estimated that if it had-been allowed by FERC in 1978, depreciation expense applicable to decommissioning would have increased from approximately $1.2 million per year to approximately $2.8 million per year.
f Jointly Owned Plant:
The Company owns the major portion of the operating electric gen-erating unit at New Haven Harbor Station and is participating in the construction of four future jointly owned nuclear generating I'
units. At December 31, 1978 the Company's applicable balance sheet' captions included the following amounts, representing its share in these facilities:
Utility Reserve Construction Share Plant in for _
Work in
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Facility Owned Service Depreciation Progress k
(Thousands of Dollars)
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New Haven Harbor Station 93.705%
$130,786
$10,273 105 116,589 Seabrook Units 1 and 2 20%
i 19,906
. Millstone Unit 3 3.685%
8,238 Pilgrim Unit 2 3.3%
Each participant has the responsibility for. financing the cost of its ownership share in these units. The appropriate expense captions in the income statement include the Company's share of the operating
- costs of the plant in service.
-In addition to its joint ownership interest in the above. units, the Company owns 9 % of the common stock of Connecticut Yankee Atomic Power Company, which operates a nuclear generating unit, and is
' entitled to purchase the same percentage of the output of this unit.
The. Company accounts for this investment on an equity basis and includes the cost of its purchased share of the output of this unit in capacity purchased expense,^ except for the cost of fuel which is included in fuel and interchange energy expense.
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e Schedula V Froperty, Plant..
and Equipment THE UNITED ILLUMINATING COMPANY SCREDULE V - PROPERTY ' PLANT AND EQUIFIEN!,
for the year ended December 31, 1978 Col. A Col. 3 Col. C Col._ D Col. E-Col. F Additions Other Changes -
Balance at
. Balance at Classific at ion Bestanina of Period at cost Retirements Add (Deduct)
End of Period l'TILITY FLANT, at origins 1 cost ELECTRIC FLANT IN SERVICE:
Production Plants Steam
.$294,583,258
$ 1,308.034 31,069 231
$295,860,454 1.728.023 Jet Turbine 1.728.023 Total Production Flant 296,311.281 1,308.034 31,069 231 297.588.477 Transmission Plant
$1,201,393 6,411,420 18,104 57,630,917 Distributton Plant' 159,066,015 5,853,532 1.384,949 (40,221) 163,494.377
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General Plant 12.426.513 558.980 64.900 (231) 12.920.362 Total Electric Plant to Service 519,005,202 14,131,966 1,480,918 (22.117)(1) 531,634,133 I
(44,056)(2) 1,195.387 ELECTRIC PLANT HELD TUR FUTURE USE - LAND 1.239.443 CONSTRUCTION WORK IN PROGRESS 91.710.103 56.730.864 113.520 148.554.487 TOTAL UTILITY FLANT, at original cost 611,954,748 70,862,830 1,480,918 47,347 681.384,007 ACQU151T10N ADJUSTMENTS, LESS AJWIRT13ATION 282.000 (81.000)(3) 201.000 TOTAL UTILITY FLANT
$612.236.748 M
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$681.585.007 NONUTILITY Ut0FERTY, at cost s
141.612
$ (71.241)(4) 272.171 Notest (1) Represents transfer of customers' advances for construction Represents transfer 'e construction work ta progress (2) t (3) Amortisation credited directly to the asset account and charged to amortisattom of acquisition adjustments. Acquisition adjustments are being amortised over a 20-year period.
'(4) Bepresentet Transfer to construction work in progress (69,464)
AdjustEent of: cost basis of moeutility property (1.777) t (71.261) j'
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s Schedule V Property Plant.
and Equi e t 1HE UNITED ILLUMINATING COMPANT SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT for the year ended December 31, 1977 Col. A Col. B Col. C Col. D Col. E Col. F Balance at Additions Other Changes -
Balance at Classifteation Bestanina of Period at Cost.
Retirements Add (Deduct)
End of Period UTILITY PLANT, at original cost:
ELECIRIC PLANT IN SERVICE:
Production Plants steam
$292,613,816
$ 2,264,756
$ 295,314
$294,583,258 Jet Turbine 1.728.023 1.728.023 Total Production Plant 294,341,839 2.264,756 295.314 296,311,281 Transmission Plant 50,942,769 343,810 24,936
( 60,250) 51,201,393 Distribution Plant 153,713.212 7,009.108 1,629,407
( 46,898) 159,066,015
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s' ceneral Plant 11.834.268 795.260 193.317
( 10.118) 12.426.513 1
Total Electric Plant in Service
$10,852,508 10.412,934 2,142,974 (117,266) 519,005,202
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32,458 (255,513) 1.239,443 ELECTRIC PLANT. HELD FOR FUTURE USE - LAND 1,527,414 CONSTRUCTION WORK IN PROGRESS 53.806.016 37.904.087 91.710.103 TOTAL UTILITY PLANT, at original cost 566,185,938 48,317,021 2,175,432 (372,779) (1) t11,95',748 ACQUISITION ADJUSINENTS, LESS AMORTIZATION 363.000
( 81.000) (2) 282.000 TOTAL UTILITY PLANT M
M M
$f453.779)
$ 612. 2 36.7 f.8 NONUTILITY PROPERTY, at cost 9
46.943 1.901
$ 294.768 (1) 353.612 Notes (1) Represents:
$ ( 62,378)
Transfer of customers' advances for construction Adjustments to operating expense
( 1,332)
Amount transferred to nonutility property (294,768)
Settlement of litigation
( 14.301)
$ (372.779) 9
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credited directly to the asset account and charged to (2) Amortizatio(da of acquisition adjustments.
amortizati Acquisition adjustments are being amortised over a 20-year period.
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e Schedule VI Reserve for-Depreciation THE UNITED ILLUMINATING COMPANY SCHEDULE VI - RESERVE FOR DEPRECIATION OF PROPERTY, PLANI AND EQUIPMENT for the years ended December 31, 1978 and 1977 Col. A Col. B Col. C Col. D Col. E Col. F Additions Balance at Charged to Other Changes End of Balance at Beginning Costs and Description of Period Expenses Retirerents Add (Deduct)
Period Reserve for depreciation, utility plant:
1978
$149,039,090
$14,030,000
$1,423,631 (1,817)(A)
$161,643,642
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1977 136,931,778 13,661,000 2,028,434 474,746 (A) 149,039,090 i
Reserve for depreciation, nonutility property:
31,365 1978 32,110 1,032(B)
(1,777)(c) 1977 18,493 1,071(B) 12,546 (A) 32,110 Notes:
1978 1977 (A) Represents:
Covernment reimbursements in connection with relocation of plant in service
$(1,817)
$487,292 Transferred to reserve for depreciation, nonutility property (12,546)
_S (1. 817)_
$474.746 (B) Charged to other income in the statement of income (C) Adjustment of cost basis of nonutility property D
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Schedule 11 Bands, Mortgages and Similar Debt TNE UNITED ILLUMINATINO G)MPANY SCNIDULE 1% = BONDS, Pg)RTGA2 3 AND SIMILAR DEST December 31. 1978 Col. A Col. B Col. C Col. D Col. E Amount included la Amount included Col. C. Which is in Stas Extended Amount Amount Neld by or Het IIeld by Under Caption Authorised Issued and for Account or for Account "Long-tern Debt"
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by Not Retired of issuer.
of issuer in Related ladenture or Canceled Thereof thereof Balance Sheet Name of issuer and Title of Each issue *
(1)
(2) tite UNITED ILIIMINATING COMPANY:
nitty-Year 2-7/8% Debentures,1981 Series, due March 1.1981
$ 8,000,000
$ 8,000,000 pone
$ 8.000,000
$ 8,000.000 Thirty-Year 3% Debestures,1984 Series. due October 1,1984 9,000,000 9,000,000 None 9,000.000 9.000,000 Thirty-Year 4-7/82 Debentures, 1987 Series. due November 1, 1987 10,000,000 10,000,000 None 10,000,000 10.000,000 Thirty-Year 4.65% Debestures.1990 Series, due August 15, 1990 15,000.000 15,000,000 None 15,000,000 15,000,000 Thirty-Year 4-7/8% Debestures,1991 Series, due July 15. 1991 10.000,000 10,000,000 None 10,000,000 10,000,000 Thirty-Year 5-3/4% Debentures,1996 Series, due August 15. 1996 15,000.000 15,000.000 None 15,000,000 15.000,000 Thirty-Year 6% Debestures,1997 Series, due June 15, 1997 22,500.000 22,500,000 None 22.500,000 22,500,000 E
Thirty-Year 72 Debentures,1999 Series, due January 15, 1999 -
15,000,000 15,000,000 None 15,000,000 15,000.000,
Thirty-Year 7-3/45 Debentures, 2002 Series, due October 1, 2002 25,000,000 25,000,000 None 25,000,000 25.000,000 g
thirty-Year 8-1/42 Debestures, 2003 Series, due December 15, 2003 30,000,000 30.030,000 None 30,000,000 30.000.000 159,500.000
, Twenty-rive-Year 10-1/4% Debentures. 2000 Series, due June 15, 2000 30.000,000 30,000,000 None 30.000,000 30.000,000 Serial Debentures 113. maturing serially as to $4.000,000 principal amourt ce September 15 to each of the years 1979 to 1983, incluelve 20,000,000 20.000.000 Noes 20,000,000 20,000,000 8\\Z, maturing certally as to $1,666,667 principal aeount on November 15 in each of the years 1983 to 1997, incluelve 25,000,000 25,000.000 None 25.000,000 25.000,000 Usamortised debt discou t less preatum (546.493)
Total Lass-tera debt 233.953.507 less " current portion of toms-term debt" in related Balance Sheet 4.000.0 _00 "Long-term debt" is related Balance Sheet
$229.953.507 Nutter (1) Th's f adenture. as amended and supplemented under which the Company's debestures are issued, specifies that no further debentures of the Thirty-Year 1981,1984,1987,1990,1991,1996.1997,1999, 2002 er 2003 eeries or of the Twenty-Five-Year 2000 Series or of the lit or 84% Serial Debestures may be issued, but provioes for addittamal issues of debentures of other series as may be authorized from time to time by the Board of Directors to en amount imiteited eaceet as stovided in the indenture.
rrently naturias portion of the 11% Serial Debentures has been classified 'as a current liability la the Salance Sheet et (2)
Thecy$r Decen 31, 1978.
(3) The answers to Columns F. C and H with respect to each issue are "None".
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Schedule XII-valuation and Qualifying Accounts and Reserves THE UNITED ILLUMINATING COMPANY SCHEDULE XII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES for the years ended December 31, 1978 and 1977 Col. A Col. B Col. C Col. D Col. E Additions Balance at Charged to
- Charged Balance at Beginning Costs and to Other End of
- [8 Description of Period Expenses Accounts Deductions Period O
(Note)
RESERVE DEDUCTION FROM ASSET TO WHICH IT APPLIES:
Resepre for uncollectible accounts:
$1,278,055
$1,123,055
$875,000 1978
$720,000
- 1977 865,000 1,001.711 1,146,711 720,000 Note: Accounts written off, less recoveries.
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TME UNITED 'ItJJREINATING COMPANY SCNEDULE XIII - CAPITAL SNARES.
' December 31. 1978 Col. A Col. C.
. Col. D Col. E Shares issued or Outstanding as Shown en or Number of Shares Included in Related included in Col. C Salance Sheet Number Which are t'nder Caption of Shores Neld by or Not Held by
" Capital Stock" Iseued and for Account or for Account Amount Not Retired of Issuer
- of Issuer at Which Name of Issuer and Title of Issue' or Canceled Thereof Thereof Number
' Carried TNE UNITED 1111Df15ATING COMPANY 50.000 None 50.000 50,00C
$ 5.000.000 a ab e 0 00 a ha e 4.72% Freferred Stock, Series B. cumulative, $100 par value, callable at $101.00 a share 75.000 None 75.000 75,000 7.500.000 4.641 Preferred Stock. Series C. cumulative, $100 par value, callable at $102.00 a share through Josuary 15, 1980 and at $101.00 a share thereafter 75.000 None 75.000 75.000 7.500,000
? 5-5/81 Preferred Stock, Series D, cumulative. $100 par value.
g callable at $103.00 a share through January 15, 1979, at
$102.00 a share thereafter through January 15, 1982 and at $101.00 a share thereatter 75,000 Nome 75,000 75.000 7.500,000 7.602 Freferred Stock, Series E, cumulattwe, $100 per value, dallable at $108.00 a share through April 15, 1982, at
$104.50 a share thereafter through April 15, 1985 and at
$101.00 a share thereafter 125.000 None 125,000 125,000 12.500,000 7.60% Freferred Stock. Series F, cumulative. $100 par value, callable at $108.00 a share through July 15. 1983, at
$104.50 a share thereaf ter through July 15, 1986 and at
$101.00 a share thereaf ter 150,000 None 150.000 150.000 15.000.000 8.80% Preferred Stock, 1976 Series, cumulative, $25 par value, callable at $27.20 a share through October 15, 1981. at
$26.55 a share thereaf ter through October 15, 1986 and at
$25.90 a share through October 15,1991 and at $25.25 a.
share thereatter (1) 600,000 Nome 600.000 600,000, 15.000.000 IIM Caumon Stock, ne par value 6.047.018 None 6.047,018 6.047.018
$106.472.301 Notes:
(1). With restrictions that se shares of the 19M Series Steth may be refinanced et a lower interest er dividend rate prior to October 15, 1981.
(2) In answer to Column 5 the Company's charter contains as limitaties en the amount of its capital stock. See Note C of Notes to yinancial Statements la the accompanying 1978 Aamuel Soport to Shareoumers.
(3) The answere to Columns F and C with respect to each issue are " Nome".
(4) No shares of capital stock are reserved for officers and employees or for optioso, warrants,
'conversi or other rid te.
i m