ML20112E225
| ML20112E225 | |
| Person / Time | |
|---|---|
| Site: | Pilgrim |
| Issue date: | 12/31/1984 |
| From: | Sweeney S BOSTON EDISON CO. |
| To: | |
| References | |
| NUDOCS 8503260453 | |
| Download: ML20112E225 (44) | |
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n r Financial Highlights Years ended December 31, 1984 1983 % Change Operating Revenues (000) $1,316,668 $1,069,285 + 23.1% Balance for Common Stock (000) $74,811 $53,575 + 39.6% Common Shares outstanding - Weighted Average (000) 15,436 14,902 + 3.6% Common Stock Data: Earnings Per Share $4.85 $3.60 + 34.7% Dividends Declared Per Share $3.12 $2.91 +7.2% Payout Ratio 63 % 80% - 21.2% Book Value Per Share $33.61 $32.21 + 4.3% Return on Average Common Equity 14.69 % 11.24 % + 30.7% Fixed Charge Coverage (SEC) 3.02X 2.67X + 13.1% Boston Edison is an operating public utility engaged principally in thegeneration, purchase, transmission, distribution and sale of electric energy. It was incorporated in 1886. The company supplies electricity at retail to an area of approxhnately 590 square miles within 30 miles of Boston, encompassing the City of Boston and surrounding cities and towns. The population of the territory served at retailis approximately 1.500,000. Boston Edison also supplies electricity to other utilities and rnunicipal electric departments at wholesalefor resale, and provides steam to approximately 310 cus-tomers in the City of Boston. l About 85 percent of the company's revenues are derivedfrom retail electric sales, i 10 percentfrom wholesale electric sales, 3 percentfrom steam sales and 2 percentfrom other sources. f l A *4 {W e +(%Y L
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In writing to you for the first time as chief e ,,, 4 85 4 - am fortunate to be able to present a portrait of a strong company operating ,,,3,, 3.o in a dynamic, growing service territory. Throughout the following report a the factors contributing to last year's 35 percent gain in earnings per share of common stock are detailed. As a shareholder, you no doubt appreciate a the importance of our resurgent financial strength. In September the divi-i dend was increased eight percent, three months earlier than had been tradi-tional. The price of common stock went from 24% to 34% at year end and m y g ,, y g ,, for the first time in more than a decade it exceeded book value. Earnings Per Share Earnings increased 35 percent As part of our continuing emphasis on long-term quality of service, we ou io ,,,,,,,,,ongi ,,,,,,, undertook a substantial investment at the Pilgrim Nuclear Power Station '*- that resulted in a successful program to recondition and replace many plant components. Also, plans to burn coal at an existing oil-fired plant, to import additional power from Canada and to add additional supplies of natural gas to the fuel mix advanced. As the text summarizes 1984 performance in detail,I want to share with you here some of my thoughts on the far-reaching changes affecting the electric utility industry and your company. Those changes are impor-tant. They present us with new challenges. But more importantly they offer opportunities to further our commitment to reliable, safe and cost-effective service while adopting innovative approaches to future business development. The regulatory and customer environment in which electric utilities operated in the 1970s and early 1980s was often marked by rapidly rising prices and public hostility. Under the leadership of Thomas J. Galligan, Jr., your company responded well, and when he retired as chief executive offi-cer last May, the company had recovered from the difficulties of previous years. From l cit to right. Senier L'ict President William D. Harrinylon, Excanirc l' ice Presidcnt Joseph Y. Tyrrtil, President and Chief Eteanive Olliccr stephen J. sweeney and Deasticc l' ice President James M. Lydon. 3
r , 1 i 1 I l l 13 M
"" n ,. We were able to maintain our commitment to provide high quality ser-
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0~ ~ vice. We are strengthening that traditional commitment through an open l planning process, the consumer advisory panel, discussions between corpa- , rate officers and leaders of special interest groups and a variety of other s_ i l _ ways, some of which are described in the following pages. As a result, the 1 adversarial relations of the past have been replaced by open discussion and I g a high degree of cooperation between various interests in achieving com-natura c equit m n goals and addressing different viewpoints. R turn on equity grew 31 From the shareholder perspective, the role of public involvement bears percsnt over 1983's levet and th. gsp between actual and note beCause of the important relationship between customer satisfaction
***d"'"'"*"'"**d' and regulatory decision-making. Recent regulatory decisions in Massachu-
.56 percantage points.
setts have underscored the fact that a utility that is responsive to its cus-tomers under a host of different circumstances is also responding to regulators. Knowing the needs and concerns of customers and regulators, and being responsive simply makes good business sense. The rules under which we operate are changing. Fortunately, we are 12s l well-prepared for them.The Department of Public Utilities (DPU) last year
= =" _ ordered a major change in rate structure by substantially increasing peak prices and requiring time-of-use rates for large commercial customers. The 750 ;;;;- - -
DPU made it clear that it wants price strategies that send a signal to con-l l. t i sumers on the true future cost of service. We concur in the importance of t 2-
) using price signals as part of a strategy to defer the need for new capacity.
E l e what is uncertain is the full effect of those signals on usage patterns. 79 80 81 82 83 84 op.r: tire n.v.nu.. In a separate decision the DPU stressed that a utility must look at all y$3I.rcEnEbIc.uI. so.$ available options before deciding to build new capacity. It said that invest-tilned kilowatthour sales ment in OcW CapaCil Can only be recovered if it is determined to be used gr wth End a $34.1 million exu ratuncron.. and useful" regardless of whether decisions to build were prudent in the first place. That decision clearly imposes new investment risks, but also the opportunity for greater rewards. There are uncertainties surrounding this recent decision, but our financial and organizational strengths put us in an unusually good position to identify and address those uncertainties. 4 i l
4 l 1 8# ss An important step in that direction was taken in the establishment of an energy supply and demand planning department. We have consolidated 4 - forecasting and planning groups to assure that all supply and demand options are thoroughly considered.~In addition, we are developing a new m>>
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l business plan, one that will define the company for the coming years and
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give us the capability and flexibility to take advantage of the environment ,, . that is moving us into a more competitive future. 7 e2 83 84 In the years ahead, we will be aggressive in exploring and developing ,,,,,',j,[, o, _ ,,, Aa '=prov'd *conomy contrib-options for meeting future energy needs. We will look for opportunities to uted to a large increa.e in terri-participate in new projects where the potential for return is commensurate nory .aie.. with the risk. We will continue to involve various publics in the planning process. We will meet with regulators and other interested parties on the meaning and implication of uncertain forecasts of future energy demand growth and new energy pricing strategies. The traditional values that helped shape Boston Edison over the past 100 years will continue. This company is indeed fortunate to have Greater Boston with its dynamic service territory growth. I am personally fortunate to have an outstanding group of managers and employees and am confident that together we will be able to make and implement ef fective and timely decisions in this changing environment. Your management is proud of the accomplishments of 1984 and of the more than 4,000 employ-ees who displayed their dedication and hard work throughout the year. We look forward to tomorrow. l Sincerely, m>==> l Stephen J. Sweeney i President and Chief Executive CJJicer February 15, 1985 5
Fintncid Perfsrmunco
, ,r s- ineteen-eighty-four was a The common equity component of very succc sful year for Boston Edison long-term capitalization reached the Company. Net income rose dramatically, company's objective of 38 to 40 percent.
due to sustained growth in kilowatt- Equity accounted for 39 percent of capi-hour sales and a 534.1 million retail rate tal at the end of 1984 as compared to 17 increase. percent in 1983. Return on equity rose Earnings per common share markedly from 11.24 percent in 1983 to increased from 53.60 in 1983 to $4.85. 14.69 in 1984. In addition, return on The quality of the company's earnings equity, excluding AFUDC, is well above remains high; AFUDC (Allowance for industry averages, indicating a solid ' Funds Used During Construction) as a current return. This increase narrowed percent of net earnings available for the gap between the actual return on A newly-enhanced budget and common shareholders was only 15 per- equity and the company's 15.25 percent goal-setting process helps . . allowed return to only 0.56 percentage cent. The dividend / earnings payout managers at alllevels to inte-grate short and iong-term plan. ratio, a barometer of dividend coverage, points. Reflecting this improvement, ning with the overall direction improved and dropped below the the stock price was the highest in 11 of the cornpany- industry average in 1984. years, up 22 percent from 1983 to q y q., . ;. L - ; ,.: 'E._ Q .n n
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lr l l l i; , I i ! December 1984. the company's strong internal cash gen- m m I The company's internal cash gener- eration will continue to strengthen ! ation, which was 107 percent of capital interest coverage, capital structure and 4-= m "' l [ expenditures in 1983, declined to 69 earnings quality over the already ,,, l percent in 1984 because of increased improved present levels. 3 , i capital expenditures for improvements Fitch Investors Service, Inc. also ! made at Pilgrim Station. m upgraded its rating on first mortgage 2 i j bonds from A- to A + saying that the j j Div!dend Increased higher rating reflects the company's i l In September, the board of direc- financial position and prospects for g i tors increased the dividend on the com- significant improvement in the years j ;
- pany's common stock by 8 percent from ahead. 79 so si 82 83 84 t i $3.00 per share to $3.24 annually. The The company has filed a shelf reg- commoa olvidend ,
board's action, taken three months ear- co .r. . l istration statement for the sale of $75 l cons on cnvide cover.g. , l lier than has been traditional, reflects million in First Mortgage Bonds, Series ,, , ,, 9 _, 1
- the company's continuing commitment V. The proceeds will be used to finance ,,,,,oing ,,,c ,n, inoo,,,,
to its shareholders. Improvements in the capital additions. m . .r.g.. j company's earnings performance enabled the board to undertake the , . . . , , . . . . . . . . . early dividend review. m l.f, .M ~ LT
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z . i ,L I Bond Ratings Upgraded
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Vy -gp".,Afrst i? - ratings en B0ston Edison's nrortg> Aindyri'm f For the second year in a row, e g;,/
%p ,13 rdin Marcir 19n Boston Edison's bond ratings were d.y e nv0 factors inpucnceJ our j increased. Moody's Investors Services ;: , - ]. 13 g ydg.; . gJ: ;g. A;' , gf
.~.C E. .,(- Jccision: tlic comrany lias !
1 ;g .--d M, ' ' 'TM raised its rating on the company's first p 3... sigmpcantly improved its : mortgage bonds from A3 to A1 because ~J,J pnancial condition, and it of the strong internal cash generation 1 , Y $ ~ ._ }.g.p, g Iras no major construction position, and the positive regulatory .h .j . . y.3... Q P . rrojects under stay until , trend in Massachusetts. In January 35
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7 %:b.1@h8MO0dy's i;'7 199R' .4.f. O L00ki"3 di'<dd-belicvcs tirat I 1985, Moody's assigned a rating of , l Prime-1 to the company's commercial paper. The ratm.g is the highest m. vest-7 .;. N $.7 - ..L-N i.s5
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,tssistant Vice Praidcnr raised the company's bond ratings from ; o D.; ( : F. 9 1'j.~J7.' 4f Moody's investors service A to A + and gave Boston Edison an ,.;- .
r- (C' .y, j?..5 7- : A-1 commercial paper rating. The A-1 7 d.\ .s % i (,5 : ), ! rating has the potential to reduce the t'D- .,
' J company's short-term borrowing costs j; p. ; ..
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and increase short-term financial flexi- Ei '37 ..M *% v S; bility. Standard & Poor's anticipates that MO M N ^' # hM I 6 L l I 7 l
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of Public Utilities (DPU) allowed the I.N. l company to raise its retail rates by $34.1 u ;f ,,y y c. t y y 7 f f untary Jccisien to use million beginning June 29,1984 to Q,-( : , - ( '
'h ' ' ;, '... scrubbers in conrcrting its reflect the company's increased cost of :(. '.N / :s - V ? W ' ;(; ,
New B05'0" Powcr station l providing service. The company had O i Lfi." $ / 4 " U. ; - /*"' C'l 'o #dl "" de" l requested a $37.5 million rate increase. 7/I . '. 7 M Y...". U ' j
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l The rate order reduced allowed return V;.78.N iN4; i I ?d tmty to the pubhc gcod. t on equity from 15.5 percent to 15.25 percent, a return comparable to returns {; ql]v - :. :y;;f Q p,,.yy,.crsion nill rcsuh , l -!7,, ., 7 j. ; . ' in a larqc rcduction in l
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sulfur cmissiens, while DPU also required major rate structure ~ , f .a fy it ' /' strengthening the Afana- ' changes. These changes included higher 3 - 3. J.L. m $-J chuscris ccenemy by rcJuc-summer surcharges for residential rates, p." gi' g ing the use efcxrcusive a time-of-use rate for the company's 4. ~ - foreign oil. " a:.c largest commercial atid industrial cus- t;.[ ( 9 .*y; Antiwny cortese i . i l l tomers and further analyses of the cost-effectiveness of applying time-of-use rates to all other rate categories. The N::.t. X" P
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f: , j Manachuwtts l agement efforts to defer major capital j . .J 9 . - ' f 'r> ' A . s. I commitments to build new capacity. 5- 1^< s ,- J.' The company filed a two-step X. : ,;j o + g MJ " j wholesale rate increase request of $2.9 y n. .'.
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l million with the Federal Energy Regu- i. Qff f,.f J.4 '.q-ff(.m.{;l;i. ( ;:. latory Commission (FERC) in Septem- , .a ber.The FERC allowed the first step of 7 J .;i *.y;r~; - the increase,75 percent, or approxi- f }& , , , .'l} . . j ? j: ~ ^ ",, ,, mately $2.2 million, to be billed begin- g { :l [.g { . f . f . y '. ; ning in late November; the remaining gj.y ; y .f .{.i j'r1.; 4' aJ
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amount was suspended until April '1 - u 1985. The portion being billed is subject to refund, pending hearings and a final decision by the FERC. l The company's fuel clause contin-l ues to be determined on a forecasted j basis, adjusted for actual experience. This forward-looking ratemaking con- l cept permits recovery of fuel and the I fuel portion of all purchased power on a current basis. m I i i ! i 9
Bostori s revitahzed Back Bay 6s symbohc of the strong local economy that contributed to Boston Edison's perforrnance m 1984
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Energy Supply and Demand Planning In 1982, Boston Edison input on the proposed conversion. Also, E' launched a flexible process for meeting the Final Environmental Impact Report )! b the future energy needs of its customers. on the proposed coal conversion at New lE$H 5 Called IMPACT 2000, the plan looks at supply and demand choices and out-Boston was approved by the Common-wealth of Massachusetts Executive
"!uj 12 12 n lines the options for the future. These Office of Environmental Affairs and all 5 elements are: fuel diversity, conserva- major environmental permits had been i tion, load management and public granted or proposed for approval. Legis- i involvement. a lation was recently enacted in Massa- i chusetts that would allow the company, a , g ,
Fuel Diversity subj,ect to approval of the Department of The oil embargoes of the 1970s Public Utilities, to recover in retail rates capitarization made it clear that electric utilities over a period of up to 12 years the cost N eo'"P*av continu'* 'o
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should not depend on one source of of conversion, including financing "'*'"~ frrl. Since that time, Boston Edison has costs. The company plans to file its actively followed a policy of diversify- application for approval with the DPU. Ing its fuel mix. If satisfactory project financing arrange-As a short-term measure, gas will ments can be obtained and if the DPU be burned in several units on an inter- approves recovery of all costs of conver-ruptible (i.e., as available) basis. Mystic sion, the company intends to proceed Unit 7, the company's largest fossil unit, with this project. has burned gas for at least 7 months a - The company also decided in 1984 year since 1982. Contracts have been to put coal conversion plans for Mystic signed to permit the 2 New Boston units Units 4,5 and 6 on hold because pro-to burn gas 7 months a year from 1985 jected savings were less certain. through 1987. Net savings from burning The conversion is estimated to cost gas during the next few years are esti- $620 million. Based on current fuel mated to be $8-510 million a year at price forecasts, projected customer sav-both Mystic and New Boston. All 3 ings are approximately $4 billion to the units will retain the fle.:ibility of burn- year 2010 over the cost of burning oil. Ing more than one fuel in order to take The New England Power Pool advantage of future differences hs price (NEPOOL) reached agreements with and availability. Hydro-Quebec to purchase up to 33 mil-Significant progress was made in lion megawatthours of hydroelectric the company's plans for coal conversion. energy over an Il-year period from the l In the first such decision involving a Canadian province of Quebec. This coal conversion project of this magni- Phase I power will be transmitted start-tude, the company in 1984 voluntarily ing in mid-1986 over a new 690 mega-decided to add flue gas desulfurization watt direct current interconnection now systems, or scrubbers, to the conversion under construction. This arrangement is plans for New Boston Units I and 2 to estimated to save the burning of 5 mil-reduce sulfur dioxide emissions. The lion barrels of oil a year for New decision followed extensive public England customers. Also, an agreement 11
in principle was reached between million expansion program, to be com-NEPOOL and Hydro-Quebec for Phase pleted over the next several years. II of the project. Under Phase II, Hydro- The company is actively exploring Quebec will provide New England utili- other alternative f,ch. During Novem-ties 7 million megawatthours of energy ber, a coal-water mixture liquid fuel
- each year for a ten-year period that is was burned for test purposes in Mystic y
, w . anticipated to begin in 1990. Phase II is Unit 4. Additional industry research expected to save the burning of 12 mil- and development of this fuel will be l
I a A . lion additional barrels of oil a year for pursued in 1985. New England customers. Boston Edi- The company is also committed to son's share of the New England savings increasing its energy supply through created by the Phase I and Phase 11 pur- cogenerators and small power produc-2 chases is expected to be approximately ers, such as refuse-to-energy plants, lj)~ 12 percent. and small hydroelectric plants. Boston 79 80 si 82 83 84 Under a contract signed in 1981 Edison filed a 20-year contract with the con:truction exp.nditures with the New Brunswick Electric Power DPU for a 10-megawatt purchase of minough tne company is not Commission, Boston Edison continues power from a peat-fueled cogeneration inniveo in a maior construc- to receive 100 megawatts of power facility located near Camden, Maine. l tiin progrtm, capital spending annually from Point Lepreau Nuclear Initial output from the facility is incrusto primarity becaus. or Power Plant.The agreement runs until expected during spring 1986. The con-tract reflects the company's interest in ['s' io 1988, with options to extend to 1991. Point Lepreau Unit I achieved a capac- buying power from small power pro-ity factor of 89.6 percent during 1984. To ducers and cogenerators to supplement complement the Point Lepreau pur- its energy supply. s chase, the company is purchasing 100 megawatts from Bear Swamp Units 1 Conservation and Load Management and 2, a pumped storage facility owned Through its conservation and load by New England Power Company. The management programs, the company company, as well as NEPOOL, has been encourages customers to save electricity discussing with the New Brunswick and to shift use to off-peak times. Dur-Electric Power Commission the pur- ing 1985, Wrap-It Cap-It and other con-chase of power from a second Point servation programs that had helped Lepreau unit that is being considered conserve oil and gas in addition to elec-for construction in the early 1990s. tricity will be phased out in response to The company is planning may - the DPU order of June 29,1984. The transmission line construction because company is directing new conservation ofincreasing power purchases from programs at saving electricity as the Canada and growth in the downtown principal source of energy. The com-Boston area. In 1985, construction will pany has filed a new conservation pro-begin on an underground 345,000-volt gram in which a contractor will transmission line from Woburn to North estimate how much electricity a cus-Cambridge. The project is the first tomer can save with various conserva-major transmission addition in the $130 tion measures. The contractor will then 12
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kw1. . ,* x.e ' c.. o-pilot vers. ion expected to beg.m early m. 4~w ;<g % ,t- gi .
..swa;p ,, ; y 1985. Time-of-use rates with higher [ f.jMs:.r.NC1
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charges during peak times will also N , g" ' % i(. M i- Q$ d4 MA " I - 6 M'J..W /. play a key role in load management. These rates, now mandated for the larg-est commercial and industrial cus- ' D f '
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Q i[4 7 YN %.i u ' ^ .? E;[:j E 7 ..[ NIbd[t-'4 l tomers, will be extended to other sin.- customers where cost-justified. The company has been actively
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- exploring other conservation and load management possibilities such as forg- ment area of the city is being restored. Company officials meet with ing energy partnerships that are unique Edison's part in the building's rehabili- * der $ a' caa'u=*r and pub-
, within the utility industry. To involve tation will include an innovative off- *"'8'"P'***"'*P'-
tant part of long-range energy potential users .m designing programs, peak heatm.g and coolm.g system, a spe- ,,,,,,,,. Boston Edison invited representatives cial heat recovery system and a solar-of 7 consumer organizations to help assisted domestic water heating system. develop a combined audit and conserva- In conjunction with the Audubon Soci-tion program for residential customers. ety, the company will also sponsor an The residential conservation focus educational program for architects and group made recommendations includ- builders and encourage similar inner-ing the formation of an independent city projects. m organization called the Community Energy Partnership Inc. to implement Public Involvement them. The concept calls for a local pro- Planning for the future is being j gram that will combine an energy audit undertaken with input from customers, with weatherization services in a one- officials and others who would be step program. This plan will be submit- affected. ted to the DPU and the Massachusetts The Consumer Advisory Panelis l Executive Office of Energy Resources made up of 16 representatives of Boston i for review in 1985. A similar group was Edison residential and commercial cus-also formed with representative com- tomers, as well as special interest mercial and industrial customers. groups such as low-income, the elderly Boston Mayor Ray Flynn broke and minorities. In existence for two ground on a development project that years, the group has been meeting regu-Boston Edison is participating in and larly. In 1984, the group presented to which is being sponsored by Symphony company management recommenda-Area Renaissance, Inc. A 16-unit resi- tions concerning collection procedures dential building located in a redevelop- and customer bill-paying problems. The 13
recommendations fell into three cate- contlusions were reached, but the con-gories: financial assistance, service sensus was that the dialogue had been
; improvement and a pilot program to an important link in building stronger implement service-improvement communications between the company strategies. and the consumer and that similar types l In Sytember, the company of communication should continue.
brought together representatives of 7 The company encouraged public l consumer and public interest groups involvement of another type e ith its with government and company officials construction of the IMPACT 2000 House to participate in a day-long consumer / with its state-of-the-art energy-ef ficient utility dialogue. The purpose of the dia- features such as photovoltaic cells. Con-logue was to discuss the cost of electric- struction of the house was followed ity and related issues in an informal, weekly on public televisian's The AH l non-adversarial setting. No concrete New This Old H0nse. Dedicated by Gover-Ik , J
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N , ,. .-i [,. Q' y ,$ d This Old House Over 13.000 .' N Y.?. . l.A ~., T! - visitors frorn 49 states and 24 b.J ' $ w$ *c I N 7 ' y;: k. . 1 W' ,
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4 nor Michael S. Dukakis in June, the may also present greater shareholder
- house was then opened for a year of opportunity.
public tours. After winning a Massa- During the fourth quarter, a new i chusetts Award for Energy Innovation, Supply and Demand Planning Depart-l the company received special recogni- ment was formed to facilitate long-term tion (the highest award category) in the decision-making. Divisions of the com- , Department of Energy's National pany which dealt with forecasting, gen-Awards for Energy Innovation. a eration and demand side planning were combined into a single, integrated plan-Long-range Planning ning unit.The new department will l Uncertainties surrounding future assess the costs, risks involved and the i demand for power and the utility indus- availability of various supply and ; try's ability to license and build large demand options. generating units in a reasonable time The company is pursuing a broad l frame place special demands on utility range of conservation and load manage-planners. In such a period of uncer- ment programs as a means of control-tainty, Boston Edison places a high ling demand. E priority on the integration of supply and demand planning. , g
- That need was underscored as ,Bos,0uesisenis,ak.
usage hit an all-time peak, both for the e ' - ing a giant sicpfanvard: company and the New England Power it is listening to consumers Pool in June. The company's new all- t- as an inrrertant Part Ofits time peak was 2,387 megawatts,6.9 g corporate decision-nraking i percent above the 1983 summer peak. A process. Wlicther en how l new winter peak was set on January 21, g much clectric capacity cus-1985 of 2,143 megawatts,6.5 percent . g torners will Jcinand in the above the 1983-84 winter peak. - futurc or the conrcrsion of A recen? DPU directive has impor- aining retn'r rlants to tant implications for Massachusetts h","j#dI','hj.' "','"#{[ electric utilities considermg construc- sunrcr input before tion or purchase of new capacity. By deciding. This chibits directing electric utilities to prove new critical scusitivity to mak-I' l plants or power contracts to be "used ing Jccisions that arc ! and useful" upon completion, rather rcorensible and in the l than having been based on prudent - f long-tcrm rublic judgment at the time of decision the , g , intercst. " directive places the companies and their Steve Ferrey shareholders at a much greater risk for StdllA"Or"#r
'~, National consumcr Law any investment in new capacity. The C#"'"
ground rules for implementation of the new DPU philosophy remain unclear at this time. While increasing risk they i 15
- 1. _ _ ....._ _. _ _- _ _ _ __ _ _ _ _
Energy Ciba
~"' n 1984, sales showed an even
/g '- -
4 stronger growth trend than in 1983, due
,p in large part to the health of the Boston 4
economy. Unemployment in the Greater b ' Boston area was 4.1 percent for the year, continuing a trend of being consider- ' ably lower than other industrial metro-i i politan areas. Retail sales growth was i > 6.6 percent in 1984, up from 5.8 percent j; a year earlier. Territory sales totaled 11.1 h million megawatthours. Sales in the i commercial sector accounted for 52 per-l- cent, industrial sales 17 percent, resi-
; yr,cib c 4 dential sales 26 percent and other sales fy(?M3h4 .. i 5 percent. Both the service and manu-E...6,.4 C facturing sectors are expected by many l ;[<f[P-;4 i W. l SJ to maintain their competitive position with other cities in the years anead. The l building boom of the last several years continued in 1984 with the downtown construction of new office space, hotels and other commercial property, as well in 1984, new residential con- g ,
struction (facing page, top ( photo) and buildings like Exchange Place contributed to i
)
Commercial nevelopment the company's sales base. The The Boston economy responded , new 1.3 million square foot yjgorously to the national economic building incorporates the front omp Rohst growth continus in e suIidYng. Exchange & am M mmed m&c, Wh Excha Place has an innovative energy technology, health care and defense. In ' system that uses 600,000 gal- .jjjjj' 1984, approximately 18.2 million square lons of water storage capacity feet of new industrjal and CommPICial for efficient heating and space Were added to the real estate base.
* "" Seventy-one percent, or approximately l 13 million square feet, will be electri- l f
cally heated. Of that amount,50 percent will incorporate energy-efficient heat pumps in their heating and cooling sys-tems. Among the new buildings that ; opened in 1984 were the 1,000-room , Boston Marriott flotel/Copley Place, the 1.2 million square-foot One Financial Center, located in Dewey Square and
)
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tion. Through energy-efficient building
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techniques, the company is seeking to minimize peak demand growth without
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New hous.mg commitments were h k:.j;; made for 7.3 million square feet, which
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. ' $f fjr[c,,% Qg i .1 1.*:, ~K included everything from subsidized
' .N#;gh .i(% # . $ ;/ apartments to luxury condominiums.
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ing will be electrically heated. Addi-tionally,1.8 million square feet of
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tric heat. Energy-efficient heat pumps accounted for about 50 percent of sales j the 765,000 square-foot Lafayette Place, in the residential electric heating mar- , all of which are electrically heated. ket for both new construction and con- i l The first of three phases of the versions. m l Massachusetts Technology Center at l Bird Island Flats, next to Logan Airport, . . . , l is scheduled for opening in 1985.This : F' Tn scars ago. Arawa- i f[ b L 1.2 million square-foot complex will - ciniscris was considcicJ provide space for high technology . ?.; V1 :i.e . the prototyrc of the . research and development, manufactur- .,y .,. g f " . p. .t./l inature industrial state ing, office and import-export enter- e
'. j f a, with a b/cak futurc;
- f. I ^ today, it is $cca d5 d prises. Opening is also planned for the ' 'fJ ' ~ h~ ". c.-c ,]f c .' M i'd].]
J "d'nic, prospcrons ccn-500,000 square-foot Four Seasons Hotel 3 ^ p J in 1985. 85 D + tafor high talinology Plans were completed to expand y >
! in unrics an a nieJc/for L ether states and ctru Other the Hynes Auditorium,enlarg.mg the .'m-yg. . . -- .w '.. , .
4 countrhs. Emin NWn city's primary convent,on i facility ..om g g .h
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has bcncfitcJfrom the 300,000 to 800,000 square feet by late f j ]p .. ,' -"l; '. p. .,,
. . heahin Benen-arcu ccen-1987, and on BOSCOM, a computer ,{f, rW.i .Q.?[ ciny, with its growing marketcenter on Commonwealth Pier, 7 "-f ' ' . . f f ,' . q g.g.; high technologyfirms, scheduled for completion in 1985.There . , .i . . i. W - Q17 j Q'C '.i
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^
were also several smaller Boston office V .;- . 4: cational and inedical buildings constructed or renovated, as well as suburban industrial and com-mercial expansions. The company has n. L. f 1. ~ d ,
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Lynn E. Browne Vice PresiJcnt and
' fi continued to encourage architects,
~
.?.: 'fg p builders and develogjers to incorporate Yj: y : + g. 1 (gd 'f V ,'#[""##d"#
energy conservation m new construc- : ' -'- '- - l l l t l j 17 I
l Commitment in Rarvian 1 l l 1 , This substation steps down j, any Steps were taken at increasing emphasis on improving the voitage before electricity trav~ Boston Edison during 1984 to assure efficiency of day-to-day operations and the continuation of reliable service for customer service with high technology ion netw ks The bu ke truck displays the company's Customers. appiiCations. E newly-spproved fleet color. The company continues to place
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- Information Systems chasing transactions by centralizing var- Q ?" < 6b%-
The Supervisory Control and Data Acquisition (SCADA) System became ious purchasing, stores and accounting data bases.
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4-%D9 1-' s operational. The system enables dis- A customer meter-reading device 5. ~ [I I patchers to monitor and control the elec- known as an electronic data collector is [ . " I-tric system electronically from the System Control Center. The S15 million also in development for 1985 introduc-tion. Estimated to cost $1.2 million, the 3 ' %Md[. ~ . With the company's newly-SCADA system alerts dispatchers to any hand-held computer is expected to save ,,,,,,o c om p o,,, ,,,,o a,,,,. l changes in the status of the electric sys- the company that amount in one year of ,ng icaci system rgnoto l tem and provide alarms of trouble. Dur- use. The collector will allow employees below) technicians can enlarge j ing 1984, remote terminal units were to record the time and date of their d'a9'am detai'$ *5 5ma" *5
" " * " ' ' * '"'""*''"d*
installed at over 50 percent of the 71 readings for more accurate billing of
. a manhole (photo above).
substations to be connected to SCADA. customers. The computer will also be g,,,,,,,c,n,,,,,,,,,,,,, At Pilgrim Station in the first programmed with special notes to aid times faster using the C AD quarter of 1985, a 51.5 million computer the employee in future readings. m system inan ey nano system, designed to minimize worker radiation exposure and enhance worker g.A. - 7
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- i 2. - ) [ . 4 I productivity will be installed. The e ,? O h;{ ( ):..S 1 0 ~q ! ' .) .
l Radiological Information Management ' O. I -
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r2 - -'?E :T i f '.!. , ' i :.Y' : System (RIMS) stores information [.~. i .. " %
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obtained directly from radiation mea- [ : .I . J.'. s,...4 ..
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suring equipment worn by workers. , . ; . 7 . g , ;, i g.3 ,. . f ..g .. .. 4 f .~ w
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sure more effective;y, reducing the -}. ' j ?,J ,," .i . . amount of time required for record- ca ~ , W' .. 't,%:.K,,{P-:'.'rfyf
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exposure, the system is expected to save
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New computers were added to the V+ .: c -V.,C s J v.- : , e ?, :L v "d f :. ..u ., control room at the New Boston Station p . .:# - aY . -i~~ g.~' ' y' i 'yb'M to assist operators in monitoring the .~['M. '= . . -j F . . - ?': n ,) ' f' 'N - ( /f N ;- ' ' "; ^
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turbine and other plant operations. ,
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Company engineers have also been
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computerized system that can be used to predict malfunctions of rotating i. '.5@,4
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l machinery in power stations. -,q+7',. s f. (f . - ;Ag v s, j. .., Preliminary phases of the Mate- # %.$# 9. ' 1 :.E .D 0 S.~ .. rials Management Accounts Pavable .; k t ; , ; . h , .; J];. l [ fjf d.j -[ .'c\ '.~2..I(( i and Purchasing System were intro- dp i ' l eg (; .S. E *3 3 1 },h[ g.. ( }. [,.; (;).' ']7,;f(.{.].2.1. i duced during 1984. In development for ., two years, the system will simplify pur- . .[J}*N- --' ? t.
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19
. _ ~. . . . , , . . _
l NC; ,M Employee Achievements
'<# Reliable service for Boston Edison municipal officials and answering customers would be impossible without media questions. One hundred twenty-a dedicated workforce. Nineteen eighty- one Edison line crews, joined by 150
- n. four was a year of many accomplish- crews from neighboring utilities, ments for Boston Edison employees. brought power back to all but a few
. - .. A spring storm, the worst in at customers by April 3. An earlier storm least 15 years for damage to wires and resulted in the worst flooding of the 3
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c poles, hit the company's territory on company's underground system in (fc. .: f ; [!]
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9 March 29, leaving 150,000 customers without power. The company declared seven years. Service was restored to most of the 20,000 affected customers i:G;ry.p%');;.. yi: '
,. a major emergency and employees within 24 hours. '9 ,; X / .14 worked around-the-clock restoring Employees' commitment to safe }. [i..[; " [ ,] [
service, taking 66,000 calls from work habits paid off with impressive customers, addressing the concerns of safety records. Through a variety of safety programs introduced over the past several years, the number of lost
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. de %. ~.~a an average rate of 8 percent per year fd HJ\fJn I abbW $nh/ Ils .a,. ' .t. ..
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.C*' U[ .',, fourth year of operation, now involves 150 employees in 17 circles. In the pro-that I n ed m an orthntn and Ier a ampmv that
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gram, employees meet weekly on a vol-preudc\ an cwnnal ' Y '. , :', ;; -
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\cn ac Lou Ann Ashburn
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f,f' "i. System Performance
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., I Pilgrim Nutlear Power Station during inost of 1984 involving replatement of
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I 1 i 1 l l l l routine refueling and other related signed for the purchase of enriched ura-work. Over 2,700 tasks were performed, nium from Urenco, a European consor-many that had been scheduled for later tium. Also, a 12,000 square foot waste outages.The company's program for compacting facility, designed by com-scheduling safety modifications was pany engineers, went into use in 1984. ' commended by the Institute of Nuclear The compactor will dramatically reduce Power Operations as a model of good the volume oflow-level nuclear waste to , practice for the industry. Work per- be shipped from Pilgrim. l formed during the outage cost over Electric Liglit and Power magazine l
$165 million. The plant was, to a large recently ranked New Boston Station j degree, restored to its original conditio>. among the top 20 fossil generating l and during the next twelve months its plants in the country based on its heat l operation could save customers 5200 rate which is measured in British ther- i million in fuel costs. mal units per kilowatthour. The plant is j In other significant events at Pil- expected to reper.t that distinction with !
grim Station, a 10-year contract was a heat rate of 9,522 British thermal units l per kilowatthour for 1984. Fuel savings ' of more than $62 million have resulted i
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3" ~ from improvements in the plant's heat '
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Ararcle stonn tire worst in .n- The Electric Power Research Insti- l 15 ycars. Afore t/ran . tute (EPRI) granted the company a i 150.000 cf Edison's cus. -
.~ $480,000 contract to study the feasibil-temers lost rewcr. Afy ,.
W - ity oflife extension at Mystic Unit 6.
- f. unity's was outfor is
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= Launched during a scheduled 22-week overhaul of the unit, the study will l
j [i l lic ri tir r i i- , assess the economic benefit of prepar-tics, worked around t/ic ; clock to qct powcr back on. \ ' ing the 23-year-old plant for use until l J It snakes you appreciate the target year 2010. Results of the study ] tire value efclectricity and g will also be applied to Mystic Units 4 l l tIrc rcor/c wlio rroduce it. and 5 and the company will supply the , l AllI can say is 't/ranksfor 4 industry a set of generic guidelines for 1 l tire service '" life extension evaluation. The program, Ifolly Jor Ian the first ofits kind in the United States, l l l Custamcr Boston Edison COntrany p ' is seen as an important element in the , j company's overall supply and demand planning efforts. Major improvements began on the ! l
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Atlantic Avenue network, which pro-vides power to the financial and water-l h k .' p g l front area of the city.The network is being split to improve system reliabil- ; j q.
- -.m ity. Also, new communication devices l
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- :- ^9% are being installed in many parts of the Environmental Responsibility
[I g.f.$h, network that will help monitor and pre- In 1984, the comp. ny continued its Tg.N < - n dict network equipment deficiencies to etforts to ensure (Ican , ir, water and p: . . , , . . f :. f reduce failures. Th- 52.5 million project land in its operations. is scheduled to be finished by sununer Boston Edison has taken a leader-f-%f/'*Ik~,{r
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A plan for the orderly retirement of beyond the Environmental Protection This water levet control panel anne cniitonvoie Tra mng cen. the direct current distribution system Agency's requirements concerning ier simuiates operating condi. has been filed with the DPU with a removal of PCBs (polythlorinated f tions at Pilgnm Station. in requested June 1,1985 approval date. biphenyls). PCBs had been used in a ' addition to an instrument and Iletirement of the systein, which at its fluid to cool and insulate electrical control laboratory the new
./5 A W a n m 'n a M apipx'nt. In a W) mills pp1 th training Center houses f acilo now only supplies partial service to will last f.ive more years, the company ties tor neaitn pnysics.
7 chemistry and electrical and about 1,000 customers, would take will replace several thousand pieces of electrical equipment. Priority compo-f mechamcal mamtenance approXimately 40 months. m nents of the pmgram were completed in E .p 1
, 1984.
Intensive training programs were [ ,, basten 1.inen 4.n conducted for public safety of ficials on the company's policies and programs for
- sheu n on.on let tin
.cmnnoun al I'lunanth i" . handling PCBs and electrical fires.
i In" rod"J"elPdU"" Training was also held for employees _ snilan ren a warm" . who work around hazardous wastes. = I mpla co at thc wna" The programs presented proper teth-3 an,/ I Jnsa manawn nt & n for handh% diW mland ". haVcIVOC\0nin\t' L' Olt! ~ 4' clean-up according to hazardous waste L ncal\snhl ihl\C m a, K . M f gj Ot nnf01'fani .Jn(!!/>nlidin A new oil water separator systein r.n,nemunnnn ' was completed to protett outdoor stor-William Nolan i ( hainnan .MM age areas where oil-filled transformers i ~' and other equipment are stored at the [ Teu n c/ PI'.monsh lund Watertown Materials Management Cen-el scla rmen ter. The separator will ensure that acti-dental oil spills are prevented f rom ' entering nearby waterways through the [ drainage system. As part of its ongoing commitment to environmental responsibility, the I__ company upgraded Mystic Station's waste treatment f acilities with state-of- { the-art equipment. E
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Grginizs.ti:n There were substantial changes became responsible for the Energy Sup-in company organization during 1984 at ply and Corp 7 rate Relations Organiza-the executive level. tion in October In May, Thomas J. Galiigan, Jr., Organizatiens throughout the com-retired as chief executive officer of the pany used a newly-enhanced budget company. Mr. Galligan became presi- and goal-setting process during 1984 to dent in 1967 and chief executive officer integrate short and long-term planning in 1970. Mr. Galligan's meritorious with the overall direct ion of the com-achievements have been chronicled on pany. The Budget and Controls Group the inside front cover of this report. He will help identify areas o the company continues as chairman of the board, a for improvement. The groun considers position he has held since 1979. Upon how the company can best utilize its Mr. Galligan's retirement, the Board of resources and encourages managers to Directors named President Stephen J. incorporate goals of improved efficiency Sweeney chief executive of ficer. into their own planning. m Former U. S. Senator Paul E. Tsongas was elected to the Board of ,.'# . Directors in December, effective upon j~y~ f .. ] termination of his service as a United %'p K. Ui . - f / g'?g ,[ ;, ,t f a,s. r i , cy States senator. Senator Tsongas brings . it+P.(%g., 4
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as e, , s n ,, u to the board expertise gained during a - h.s a W % > .' . e'= A<3 !< n.! som c "# X distinguishe 1 career as an elected pub- x' 1[' U k #M. I r.J'
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Joseph P. Healey, a director since .. J ' ', e f "'"
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1960 and a former general counsel of the U. i4 r y,> 8). J. ,.. ' wC .. , ' 7.,8. A n ,",, a iu
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company, died on January 12,1985. In # ' l - l .c r % g , addition to his successful business A 9.?,& d .' y.s. .- j'; , , g , ,,,yy career, he had been widely respected for y'.) ll . . yg a y ,,,, n , g , , , , ,, , , s his many oustanding contributions to 9 ,. ,' .
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public service. i.ip ,t ,
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- tem e
careers with Boston Edison were Vice .. . willis hout s L O. Presidents Robert T. Parry, Ralph M. < , q. wu leu , g.e ,- M. . s ' a. .,,1,' A < J ~ e.. Kelmon and Benjamin H. Weiner. i ~;['p. ' K ' d '" I S v " ' '"' / '" Warren F. Roche was elected vice f*>Q [j-(. & L /iz/ .gQQ{ V ' i 'r,;6N., ~k
- f' .,f I'p president of Human Resourt s effective # ',. : INT !, 4 : ?. b ' ' ;
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July 1, and gained responsibility for 7,/ <} ' }; . 7 Labor Relations in October. Also elfec- ?'ws.,W-g?.$ .'9 'Y
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25
am- -mmmmm- Managementb Discussion and AnalysiJ Results of Operations The Company received annualized retail rate increases power related costs were transferred from the fuel (which include allowances for inflation) of clause to base rates. Other operating revenues
$34,100,000 and $31,100,000 in June,1984 and May, increased $10,511,000 primarily because ofinterest 1983, respectively. revenues associated with certain municipal accounts.
For a detailed discussion of the effects of inflation Other operating expenses increased $65,641,000 and changing prices see supplementary information primarily due to increases in labor costs, maintenance provided on pages 39 and 40. and depreciation expenses. The Allowance for Funds Used During Construction ("AFUDC") was up 1984 Versus 1983 $6,317,000 over 1983, primarily due to an increase in Earnings per share of common stock for the year the level of construction work in progress. ended December 31,1984, were $4.85, an increase of Other interest increased $6,162,000 due to an
$1.25 over 1983. increase in the average outstanding loan balance and The major event affecting 1984 operations was the an increase in the Company's average borrowing rate.
shutdown of the Company's Pilgrim Nuclear Power See Notes 6 and 7 of Notes to Schedules of Capital Station for refueling, maintenance, modifications and Stock and Indebtedness on page 34. The effective replacement of recirculation piping. The station was income tax rate for both 1984 and 1983 was 46.4%. on outage status for virtually all of 1984 whereas in 1983 Versus 1982 1983 it operated at 80% of capacity. The decreased Earnings per share m, 1983 and 1982 were $3.60 and availability of Pilgrim Nuclear Power Station caused $3.18, respectively, an increase of $0.42. Total operat-an increase in system fuel and purchased power costs ing revenues increased $13,018,000. Base electric reve-with like increases in fuel and purchased power nues increased $64,197,000 due to the following: adjustment revenues. Similarly, the decrease in sales for resale is primarily attributable to a sharp dechne in Rate increases $28,756,000 sales of power from Pilgrim Nuclear Power Station. 5.8% growth in retail kWh sales 26.315.000 Increases in maintenance and depreciation expense, Retail revenue increase 55,071.000 and allowances for funds used dur:ag construction sales for resale 9.126.000 are, to a large extent, attributable to refueling, mainte- Total increase 564.197,000 nance, modifications, and replacement of recirculation piping at Pilgrim Nuclear Power Station in 1984. Fuel and p>irchased power adjustment revenues Tota' operating revenues increased $247,383,000. and fuel and purchased power expenses decreased Base electric revenues increased $82,571,000 due to $46,640,000 and $51,383,000, respectively, from the following: 1982. In 1983, the Company's Pilgrim Nuclear Power Rate increases $ 36,715.000 Station operated at 80% of capacity, compared to 56% 6.6% growth in retail LWh sales 22,797.000 in 1982. The increased availability of the station in subtotal 59,512,000 1983, combined with a slight decline in fossil fuel Transfer of certain costs previously prices permitted the Company to lower its system fuel recovered as fuel revenues to base costs and short-term purchases of power. rates 40,187.000 Other operating expenses increased $32,213,000 Retail revenue increase 99,699,000 from 1982 levels primarily due to increases in labor sales for resale (17,128.000) costs, employee benefits, and uncollectibles, coupled Total increase 582,571.000 with a full year's amortization of the cost of the can-celled nuclear unit which began in May,1982. See The Company recovers the majority of its fuel and Note B of Notes to Financial Statements on page 35. purchased power costs through fuel and purchased Totalinterest on nuclear fuel and related financing power adjustment clauses: the balance of fucl and pur- obligations and other interest declined sharply from chased power costs are recovered through base rates. the 1982 level primarily due to reductions in both the Fuel and purchased power adjustment revenues and average amount outstanding and average bornnving fuel and purchased power expenses increased rates. See Notes 6 and 7 of Notes to Schedules of Capi-
$15 3,519,000 and $160,045,000, respectively from tai Stock and Indebtedness on page 34. The effective 1983. Pursuant to a retail rate order received in June, income tax rate for 1982 was 45.5%.
1934, $78,627,000 of annualized fuel and purchased I 24
Results of Operations Construction Program and Financing mately $939,000,000 (including nuclear fuel, but The Company is continually studying various energy excluding allowance for funds used during construc-supply alternatives in order to reduce oil consump- tion and potential coal conversion program costs). tion, including potential coal conversion of existing Funds generated internally are a major source of con-Company facilities and the long-range availability to struction funding and represented 69% 107% and the Company of purchased energy options from Cana- 84% of construction expenditures in 1984,1983 and dian facilities. 1982, respectively. Construction expenditures in 1984 The Company has developed coal conversion plans amounted to approximately $264,000,000 of which for its New Boston Station at an estimated construc- 62% or $165,000,000 were incurred at Pilgrim tion cost of about $575,000,000, excluding allowance Nuclear Power Station. It is expected that a significant , for funds used during construction. The units would percentage of future construction requirements will be also have the capability of burning either oil or natu- funded internally, provided that the Company's rate ral gas. The conversion of both units would be com- structure is adequate to cover increasing costs. It is pleted in approximately three years. Legislation has anticipated that the balance of the Company's con-recently been enacted in Massachusetts that would struction program and its long-term debt maturities allow the Company, subject to approval of the Massa- and sinking fund requirements (the latter two items chusetts Department of Public Utilities ("MDPU"), to aggregating $57,770,000 in the next five years) will recover in retail rates over a period of up to twelve be financed by the issuance of debt and equity securi-years the reasonable and necessary costs for such con- ties. The Company anticipates financing its nuclear version to coal, including financing costs. 'Ihe Com- fuel requirements under its existing nuclear fuel pany intends to proceed with this coal conversion financing agreements or similar arrangements. program if satisfactory project financing arrangements In 1984, the Company's First Mortgage Bonds rat-can be obtained and if the MDPU approves recovery of ings were upgraded to A 1 by Moody's investors Ser-all costs of conversion. vices, to A + by Standard & Poor's, and to A + by The Company is currently installing $8.000,000 of FitcL Investors Service. The Company's preferred stock natural gas conversion equipment at its New Boston and preference stock ratings were both upgraded to Station as part of its strategy to provide for both cost BBB- by Fitch Investors Service. The Company's obli-savings and fuel diversity; New Boston Station will gations pursuant to its nuclear fuel financing arrange-then have the capability to burn either oil or natural ments were also upgraded to A 1 by Standard & Poor's. gas. Additionally, the New England Power Pool The Company's capitalization ratios improved to 50% (of which the Company is a participant) and debt,11% preferred stock and 39% common equity, as Hydro-Quebec are currently negotiating an agreement compared to 1983 ratios of 51% 12% and 37% (Phase II) under which participants will receive respectively. The Company continues to meet 7,000,000 megawatthours of electricity annually for increases in working capital requiremerits, as well as ten years; completion of the construction of the neces- the interim financing necessary for its current con-sary transmission facilities is now scheduled for 1990. struction program, primarily through bank borrow-The Company will receive approximately 12% of the ings. In early 1985, the Company filed a shelf power provided under this agreement. It is currently registration statement for $75,000,000 cf First Mort-estimated that pursuant to this agreement, Ilydro- gage Bonds, the purpose of which will be to refinance Quebec would supply approximately 10% of New existing short-term indebtedness which was incurred England's projected electrical energy in 1990, primarily for expenditures at Pilgrim Nuclear Power The Company's construction program for the period Station in 1984. See Notes 6 and 7 of Notes to Sched-1985 to 1989 which is subject to continuing review ules of Capital Stock and Indebtedness on page 34. and adjustment, is currently estimated to be approxi-Revenues Expenses Fuel and 48.2 % Purchased Power 42.7% Fueland , Purchased Power - Taxes 11.7 % 23 2 % Comrnercial Other Expenses 8.7% 14.2 % Residential ' Payroll and Benefits 7.9% 93% Other Utilities ' Maintenance 6.3% 62*4 Industrial Depreciation 5.7% 1.9% Miscenaneous . Interest and 4.8% Other Charges 1.3% Steam 1.1% Street Lighting = . Dividends Declared 4.7%
.1% Radroads N M Retained in Business 2.0%
100.0% N / 100.0 % 27
7_ Statements of income (in t1wusands. except Earnings per share) - Years ended December 31, 1984 1983 1982 Operating Rcvenues: Electric $ 712,328 $ 629,757 $ 565,560 Steam 17,740 16,958 17,008 Fuel and purchased power adjustment 561,562 408.043 454,683 Other 25,038 14.527 19,016 Total Operating Revenues 1,116,668 1,069,285 1,056,267 Operating Expenses: Operation: Fuel 381,075 397,322 440,340 Net Purchased Power 253,529 77,237 86,057 634,604 474,559 526,397 Other 194,561 183.674 151,461 Total Operation Expenses 829,165 658,233 677,858 Maintenance 82,622 62,085 54,878 Depreciation (Notes A and G) 74,821 - 63,592 53,866 Amortization of deferred cost of cancelled nuclear unit (Note 11) 24,381 23,142 11,380 Taxes - property and of her 76,981 73,053 74,173 Provisions for income taxes (Notes A and E): Current 10,816 10,135 14.060 Deferred 44,785 26,938 9,104 Investment tax credit - Net 21,289 21,996 26,923 Total Provhlon for Income Taxes 76,890 59,069 50,087 Total Operating Expenses 1,164,860 939,174 924,242 Operating income 151,808 130,111 132,025 Other Income: Allowance for other funds used during construction (Note C) 8,403 4,756 4,781 Other - Net 1,544 3.233 1,140 Operating and Other Income 161,755 138,I00 137,946 Interest Charges: tamg-term debt 63,594 62,851 65,518 Nuclear fuel and related financing obligations 5,729 7,307 10,453 Other 9,668 3,506 8,081 Allowance for borrowed funds used during comtruction - credit (Note C) (6,085) (3,415) (6.486) Total 72,906 70,249 77,566 Net income 88,849 67,851 60,380 Preferred dividends provided 5,512 5,512 5,512 Preference dividends provided 8,526 8,764 8,986 Balance Available for Common Stock $ 74,811 5 $ 3.575 $ 45,882 Commr n Shares outstanding (weighted average) 15,436 14,902 14,434 Earnings per Share of Common Stock $4.85 $ 3.60 $ 3.18 ( The notes and u heilules on pages 31 through 4n are an integral part of she finant tal statements. Management's Diwusum and Analysis of Operations and l'inanttal Conthlion b on pages 26 and 27. 88
Statements of Sources of Construction Funds and Retained Earnings (in thusands) Years ended December 31, 1984 1983 1982 Statements of Sources of Construction Funds Funds Generated Internally: Net income $ 88,849 $ 67,851 $ 60,380 Add - Amounts charged (credited) not requiring funds currently: Depreciation and other amortization (Notes A and G) 73,532 63,852 55,958 Amortization of deferred cost of cancelled nuclear unit (Note B) 24,381 23,142 13,380 Deferred income taxes (Note E) 44,785 26,938 9,104 Amortization of nuclear fuel (Note A) 5,760 23,503 15,935 Investment tax credit, net (Note E) 21,289 21,996 26,923 Allowance for funds used during (onstruction (Note C) (I4,488) (8,17I) ( I l .267) Total from operations 244,108 219,1 I i 170,413 Less - Preferred dividends declared 5,512 5,512 5,512 Less - Preference dividends declared 8,526 8,804 9,005 Less - Common dividends declared 48,413 43,547 40,883 Funds Generated Internally 181,657 161,248 I I 5,013 Funds Obtained from ( Applied to) Outside Sources: Sales (Redemptions) of Securities: Sale of Common Stock 16,405 12,695 9,535 Redemption of Preference Stock (1,898) (2,100) (1,759) Increase in lamg-term Debt Outstanding 15,000 80,622 3,310 Debt Retirements (35,590) (77,375) (12,625) Redemption of Secured Notes (I,640) (I,640) (I,640) Increase (decrease) in Notes Payable 144,000 (14,000) (18,000) Increase (decrease) in Nuclear Fuel & Related Financing Obligations, net (35,000) 35,000 Funds Obtained from ( Applied to) Outside Sources 136,277 (36,798) 13,82I Other Funds Provided (used): Deferred fuel costs (10,946) (),789) 42,627 Working Capital and other (hanges (42,740) 30,623 (34,998) (53,686) 26,834 7,629 Total Funds Provided $264,248 $ 151,284 $136,463 Construction Expenditures: Plant $247,662 $ 12 3,343 $130,075 Nuticar Fuel 16,586 27,941 6,388 Total Construction Expenditures $264,248 $ 151,284 $ 136,463 Statements of Hetained Earnings Italance at beginning of year $162,472 $ 152,484 $147,504 Net Income 88,849 67,851 60,380 251,321 220,135 207,884 Cash Disidends Declared: Preferred 5,512 5,512 5,512 Preference 8,526 8,804 9,005 Common 48,413 43,547 40,883 62,451 57,863 55,400 Italance at end of year $188,870 $ 162,472 $ 152,484
=
3}}t' rHitc% alitI %Inctlult*5 oli pJge% ll throingli 4n art
- art iiilegral pari of tia finaisial statrinents.
Management's Diwuwinn anti Analysis of Operations anst Iinaintal Conihtion is on pages F anil 27
98l8nCO Sheets (in thousands) December 31, 1984 1983 Assets Property, Plant and Equipment, at original cost (Notes A, C, G and 1) Utility plant in service: Electric plant $2,137,877 $1.877,485 Steam IIcating service plant 39,389 39,700 l 2,177,266 1,917,185 Less: Accumulated depreciation 626,109 $1,551,157 581,951 $ 1,335,234 Nuclear fuel 196,514 178.196 Less: Accumulated amortization 128,130 68,384 122,373 55,823 Nonutility property 1,108 1,132 l Construction work in progress 61,559 88,909 1,682,208 1,481,098 Investments in Nuclear Electric Companies, at equity 10,809 10,416 Nuclear Decommissioning Fund (Note G) 2,831 1,030 Current Assets: Cash 3,832 2,294 Accounts receivable, net: ; Customers 169,148 159,535 1 Other 17,530 + 2,220 Materials & supplies, at average cost 66,938 57,261 I Prepaid expenses & other current assets 5,050 262,498 3,434 224,744 Deferred Debits- ! Deferred cost of cancelled nuclear unit l (Note B) 217,098 241,478 l Other (Notes A and G) 71,020 288,118 36,659 278,137 l
$2,246,464 $1,995,425 Capitalization and Liabilities !
(see accompanying schedules of capital stock and indebtedness) Common Stock Equity 5 530,602 $ 487,799 Cumulative Preferred Stock 83,000 83,000 Cumulative Preference Stock Non-Mandatory Redeemable Series 38,287 38,287 Redeemable Series 35,264 37,162 Long Term Debt 674,125 674,895 Nuclear Fuel and Related Financing Obligations 50,000 50,000 Current Liabilities: (Note D) Long term debt due within one year $ 15,770 $ 37,230 Notes payable 181,000 37,000 Accounts payable 84,202 59,282 Property and other taxes accrued (Note E) 2,806 4,120 Interest accrued 10,568 9,902 Dividends payabic 14,132 12,736 Other current liabilities 13,153 321,631 14.644 174,914 Deferred Credits: Accumulated deferred income taxes (Note E) 387,118 338,2I3 Accumulated deferred investment tax 90,984 74,703 credits (Note E) Nuclear Decommissioning Reserve 5,663 1,906 (Note G) 29,790 513,555 34,546 449,368 Other (Note G)
$2,246,464 $ 1,995,42 5
( The notes and whrdules on pages 11 through 40 are an integral part of the finandal statements. Management's Diwussion and Analysis of Operations and Finan tal Condition is on pages 26 and 27. 30
Schedule of Capital Stock (voltars in thousands, except per share amomits) December 31, 1984 1983 Common Stock Equity, Common Stock ' Par value $10 per share (Note 1): Authorized 21,534,500 shares; Issued and Outstanding 15,747,689 and 15,146,284 shares $157,477 $151,463 / Premium on Common Stock 183,850 173,459 Retained Earnings 188,870 162,472 Surplus invested in Plant 405 405
; Total Common Stock Equity $530,602 $487,799 Cumulative Preferred Stock, Par value $100 per share, authorized, issued and outstanding (Note 2):
December 31,1984 Series Per Share Shares Redemption Price 4.25% $103.625 180,000 $ 18,000 $ 18,000 4.78 % $ 102.80 250,000 25,000 25,000 8.88 % $104.00 400,000 40,000 40.000 Total Cumulative Preferred Stock $ 83,000 $ 83.000 Cumulative Preference Stock, Par value $1 per share,8,000,000 authorized; issued and outstanding: Non-Mandatory Redeemable Series (Note 3):
$ 1.46 Series - 2,675,000 shares 5 2,675 $ 2,675 Premium on $1.46 Series 35,612 35,612 Total Non-Mandatory Redeemable Preference Stock $ 38,287 $ 38,287 Redeemable Series (Note 4):
i $1.175 Series 3,807,500 and 4,000,000 shares 3,808 5 4,000 Premium on $1.175 Series 31,456 33,162 Total Redeemable Preference Stock $ 35,264 5 17,162 The noics on pages il through 34 are an integral part of this whrdule. 31
Schedule of Irulebtedness (in thousands) Long-Term Debt (Note 5): First Mortgage Bonds: December 31, Interest Maturity 1984 1983 Series Rate (%) E 3 Aug. I,1984 5 $ 18,000 F 4% June 1,1987 25,000 25,000 g II 4% June I,1992 15,000 15,000 25,000 25,000 } I 4% Nov.1,1995 6% June 1,1997 40,000 40,000 J 6% Nov. I,1998 50,000 50,000 K , 9 Dec. I,1999 50,000 50,000 L 9% July 1,2000 60,000 60,000 M N 8% May 15,2001 75,000 75,000 S Variable Jan.15,2002 25,000 25,000 9% Dec.15, 2003 90,250 92,625 Q R 10.95 Oct. 31,2004 73,125 75,000 P 9% Apr.15, 2007 60,000 60,000 t T 12 % Apr.15, 2013 75,000 75,000 U 10 % Apr.1, 2014 15,000 Total First Mortgage Bonds $678,375 $685,625 other long-Term Debt: Secured Notes, due November 15,1985, with interest at 11 %% $ 11,520 $ 13,160 Collateralized Pollution Control Revenue Bonds (net),8% percent, due May I,1984 13,340 Total Long-term Debt 689,895 712.125 Less: Inng-term Debt Due Within One Year 15,770 37,230 inng-Term Debt - Net $674,125 $674,895 Other Debt: Nuclear Fuel and Related Financing Obligations (Note 6) $ 50,000 $ 50,000 Notes Payable: Bank Inans (Note 7) $ 146,000 $ 37,000 Commercial Paper (Note 6) 35,000 $181,000 $ 37,000 g Total v The notes on pages il through 14 are an integral part of this whedule. 32 l
mm-mume- Notes to Schedules of Capital Stock and Indebtedness
- 1. Common Stock Since December 31,1981, the Company has issued shares of Common Stock, $10 par value, as folknvs:
Number Total Premium of Shares Par on Common (b) value Stock Balance December 31,1981 14,218,986 5142,189,860 $160,636,224
. Dividend Reinvestment Plan 446,227 4.462,270 5,072,496 Balance December 31,1982 14,665,213 146.652,130 105,708,720 Dividend Reinvestment Plan 439,620 4,396,200 7,036,199 Employee Stock Ownership Plan 41,451 414,510 713,476 Balance December 31,1983 15,146,284 151,462,840 173,458,395 Dividend Reinvestment Plan (a) 511,989 5,119,890 8,714,133 Employee Stock Ownership Plan (a) 89,416 894,160 1,677,668 Balance December 31,1984 15,747,689 $ 157,476,890 $ 18 3,850,196
- a. The remaining authorized common shares reserved for future iwuance are: Dwidend Reinvestment Plan 696.816 sharcs; Employee stink ownership Plan 89.995 shares.
- b. At the Annual Meeting held April 19,198 5, shareholders voted to amend the Artkles of organization to increase the authorized capital sto(k of the Company by 4,0Ga.000 a#itional shares of $ 10 par value common sto(k.
- 2. Cumulative Preferred Stock There were no changes during 1982,1983, or 1984 in cumulative preferred stock Upon involuntary liquidation of the Com.
pany, holders will be entitled to $ 100 per share.
- 3. Cumulative Non-Mandatory Redeemable Preference Stock There were no changes during 1982,1983, or 1984 in the $1.46 Series of preference stock. The redemption price at Decem-ber 31,1984 is $16.022 per share (See Note 4-b.)
- 4. Cumulative Redeemable Preference Stock Total Premium on Series Number Par Preference
$1.175 (issued March 19,1975) (a) (b) (c) of Shares Value Stoc k Balance December 31,1981 4,400,000 $4,400,000 $ 36,652,000 Redemptions 193,200 193,200 1.565,723 Balance December 31,1982 4,206,800 4,206,800 35,086,277 Redemptions 206.800 206,800 1,924,471 Balance December 31,1983 4,000,000 4,000,000 33,161,806 Redemptions 192,500 192.500 1,705,896 Balance December 31,1984 3,807,500 $ 3,807,500 $ 31,455,910
- a. The Company may under tenain market conditions be required to invite tenders of and purchase 200.000 shares annually at a prite not to cucced $10 per share plus dividends accrued; alternatively, the Company may purchaw sush shares in the open market.
- b. subicct to the prior preferential rights of the Cumulative Preferred stockholders, upam involuntary hquidation of the Company, holders of the $1.175 and $1.46 series are entitled to receive $ 10 and $Is per share, respettacly.
- c. The redempt on price at Detcmber 11,1984 is $11,8 75 per share.
8 33 L
Notes to Schedules of Capital Stock and indebtedness
- 5. Long-Term Debt 6. Nuclear Fuel and Related Financing Substantially all property, plant and equipment and Obligations materials and supplies owned by the Company are The Company has credit agreements with two major sabject to lien under the terms of the Indenture of banks pursuant to which a wholly-owned financing Trust and First Mortgage dated December 1,1940, and subsidiary of the Company may issue not in excess of supplements thereto. $85,000,000 principal amount of commercial paper The aggregate principal amounts of long-term debt supported by irrevocable letters of credit issued by the including sinking fund requirements due in the five banks. The proceeds of such issues are loaned to the years 1985 through 1989 are $15,770,000, $4,250,000, Company or applied to repay maturing commercial
$29,250,000, $4,250,000, and $4,250,000, paper. The agreements also permit the Company to respectively, make revolving credit borrowings from the banks ]
The Company's Series S Bonds bore interest at provided that the amount of such borrowings and 15.0% per annum for the period January 15,1984 to the commercial paper outstanding do not exceed January 15,1985 and the rate will be adjusted each $85,000,000 in the aggregate. The agreemen" which year thereafter subject to certain limits to 127% of the are subject to automatic one year extensions unless the monthly average yields to maturity for actively traded appiicable bank gives three years notice of termina-marketable U.S. Treasury fixed interest securities, tion, are currently scheduled to expire on June 30, adjusted to constant maturities of ten years. The inter- 1988 ($35,000,000), and November 30,1988 est rate for the period January 15,1985 to January 15, ($50,000,000). In December,1984, the Company bor-1986 will be 14.60%. rowed $35,000,000, under such arrangements, which in April,1984, the Massachusetts Industrial Finance will be refinanced with the proceeds from the planned Agency issued $15,000,000,10%% Collateralized Pol- issuance of $75,000,000 of First Mortgage Bonds in lution Control Revenue Refunding Bonds (Boston Edi- early 1985. The effective rate of interest on the com-son Company Project) due April 1,2014. The proceeds mercial paper outstanding at December 31,1984 was of the above issue were used to refund a like amount 9.51% including commitment and support fees. The of bonds that matured on May 1,1984. In order to evi- Company's obligations under these financing agree-dence the Company's obligation to repay the lean ments are collaterallized by a security interest in made to it by the Agency, the Company delivered to certain nuclear fuel. These security 6.uerests are subor-the Trustee, as assignee of the Agency, its $15,000,000 dinate to the lien of the indenture securing the Com- ' First Mortgage Bonds, Series U,10%% due April I, pany's First Mortgage Bonds. 2014.
- 7. Bank Loans To provide financing flexibility. at December 31, 1984 the Company had credit arrangements aggregating approximately $150,000,000. These arrangements provide for borrowings at or below the prime interest rate and require commitment fees to be paid on the i unused lines of credit. Commitment fees for the years ended December 31,1984,1983, and 1982 totalled
$195,000, $463,000 and $495,000, respectively.
Information regarding short-term bank loan bor-rowings is as follows: phousands of dollars) 1984 1981 1982 Maximum Short Term Bank loan Borrowings $146,000 $75,000 $ 174,000 Daily Weighted Average Amount Outstanding 73,884 12.696 44,145 Weighted Average Interest Rates, Exduding Commit-ment Fees: < On Balance Out-standing at Year End 9.52 % 10.65 % 10.6 8 % During the Year (Daily) 10.93 % 9.71% 11.87 % ( 0
/
34
- Notes to Financial Statements A. Summary of Significant Accounting Policies Pilgrim 2 nuclear unit over approximately cleven and The Company is subject to regulation by various agen- one-half years parsuant to retail rate orders of the cies. Because of the effect in regulated businesses of MDPU. Such costs include certain financial carrying the rate-making process, differences may arise in the costs that will be reviewed and may be increased or application of generally accepted accounting principles decreased from time to time by the MDPU. The between regulated and nonregulated businesses. Such remaining recovery period is approximately nine differences are related principally to the time at which years. various items enter into the determination of net income in accordance with the principle of matching C. Allowance for Funds Used During costs and revenues. ( Accounting policies are also Construction described in Notes C, E and F.) In accordance with regulatory accounting, the Com-pany capitalizes as part of construction costs certain
- 1. Principles of Consolidation general and administrative costs and an allowance for The financial statements include the accounts of the funds used during construction (AFUDC). AFUDC Company and its wholly-owned financing subsidiary, represents the estimated cost of bornnved and equity BECO Fuel Company. Inc.. In the process of consoli- funds used to finance the Company's construction dation, all intercompany balances and transactions program. This cost is not an item of current cash have been eliminated. Income, but is recovered over the service life of plant in the fonn Wncreawd menue coHuted as a mult
- 2. Depreciation and Amortization
. .. of higher deprec,ation i expense. AFUDC rates for the Physical property is deprec.ia ted on a straignt-line years 1984,1983, and 1982 . vere 11.3% 11.3% and basis at approximately 3.54% annually. At the time of 12.6% respectively.
retirement of property units, the,ri cost and the cost of removal are charged to and salvage is credited to accu- D. Commitments and Contingencies mutated depreciation. In 1983, the Company changed 1. Capital Commitments from the whole life to the remaining life method of At December 31,1984, estimated contractual obliga-computing depreciation; such change was approved tions for plant, nuclear fuel, and equipment were by the Massachusetts Department of Public Utilities approximately $146,112,000. ("MDPU) in the Company's May,1983 retail rate order. The effect of the change on the accompanying
- 2. Lease Commitments At December 31,1984 and 1983, the Company had financial statements is not material.
leases covering certain facilities and equipment. Some Maintenance expense is charged for the cost of cur-of these leae are ' capital leases, as dehned by the rent repairs, replacement of items not accounted for as Fmancial Accounting Standards Board (FASB). units of property, and minor betterments of plants and Commencing in 1984, the FASB required that regu-properties as they are incurred. , lated utilines commencr the capitalization of certam The cost of nuclear fuel is amortired to fuel expense team. Had aH leam wNch nut sua cntda been based on the quantity of energy produced for the capitaHwd, the anmunt of the amt and & HaMty generation of electricity. Nuclear fuel expense also that would have been m, cluded in the balance sheets includes a provision for the costs associated with the as of December 31,1984,1983 and 1982 and the effect ultimate disposal of spent nuclear fuel; such estimated on expenses for each of those years would not have disposal costs are subject to review and are amortiicd been material. to fuel expense, where they are being recovered Estimated minimum rental commitments under through the Company's fuel and purchased power noncanceHabk kan for yean subsequent to 1984 are adjustment clause. (See Note G.) as follows:
- 3. Forecasted Fuel Clause (in thousands) Total The Company's retail fuel and purchased power 3935 g if,y,,
adjustment clause permits all fuel costs and the fuel i93,, i ,,,5,,o portion of purchased pimer costs to be billed to cus- 1937 35,55o tomers monthly utilizing a forecasted rate. The dif fer- 1988 15.281 ence between actual and estimated cost is included in 1989 14.712 deferred debits on the accompanying balance sheet Years Thercaher 115.701 ? pending adjustments of subsequent rates. The non- A portion of the aforementioned rentals will be cap-fuel portion of certain purchased power cmts are itallied as part of construction costs in the future. recovered through base rates. The MDPU has the right Information with respect to rentals capitalized from to reduce subsequent fuel clause billings if it finds that 1982 through 1984 is as follows: the Company has been unreasonable or imprudent in capiialiica as part of con. the operation of its generating units or in the procure-ment of fuel; the Company does not anticipate any On thomands) Rem bpense struction Cmh billing reductions. 1984 $i3,35i $ i,c,oo
- 12.300 1Aoo B. Cancelled Nuclear Unit 1981 1982 11,700 1.100 The Company is amortizing the cost of the cancelled 35 L
Notes to Financial Statements /
- 3. Nuclear Insurance The effective income tax rates reflected in the finan-The Company is a member of Nuclear Electric cial statements and the reasons for their dif ferences Insurance I.imited; the Company may be assessed from the statutory Federal income tax rate are additional premiums under its nuclear facility decon- explained below:
tamination liability and excess property insurance, 1984 1983 1982 and extra expense insurance if the insurers' losses statutory rate 46% 46% 46% exceed financial resources other than the retrospective Allowance for other premiums. As of December 31,1984 the highest funds used during amount which could be assessed for losses during the construction (2.3) (2.5) (2.0) ' current policy year was $15,394,000. While awess- Massachusetts corporate ments may also be made for losses in certain prior pol- fran(hise tax 4.0 4.1 3.8 icy years, the Company is not aware of any losses in Other (1.3) j l.y 12.3) such years which it believes are likely to result in an Effective Rate 46.4 % 46.4 % 45.5% assessment. Under certain circumstances, in the event of nuclear Federal income tax returns through 1979 have been incidents at facilities covered under the price-Ander. examined and closed. son liability provisions of the Atomic Energy Act of F. Pensions 1954, as amended (due to expire August I,1987), the The Company has a noncontributory funded plan Company could be assessed up to $5,000,000 per inci- (with certain voluntary contributory features) cover-dent but not more than $10,000,000 in a calendar ing substantially all employees. Pemion accruals and year. the portion added to construction costs were as I"IIOW5: E. IncomeTaxes The Company's income before income tax expeme (in thousands) 1984 1983 1982 results solely from domestic operations. Deferred Total Accrucel $7,126 $6,8 31 $6,458 income tax expense resuhs from timing ditferences in Added to Const.uction the recognition of certain expemes for tax and finan. - Co* .1,618J 57_I.. l.485 cial statement purposes. Investment tax credits are The Company's policy is to fund pension costs reflected in income over the estimated useful lives of accrued using the aggregate cost method. The actuarial . the related property. Components of deferred income present value of accumulated plan benefits at :he tax expense are as follows: annual actuarial valuation dates were as follows: (in thousands) 1984 1983 1982 (in thousands) January 1,1984 January 1,1983 Cancelled nudcar Actuarial Present unit (Note B) $(8,997) $(8,540) $ 7,905 Value of Accuma-Excess tax deprecia- lated Plan Henefits: tion over book Vested $142,700 $ 13 3,800 depreciation 24,527 15,335 13,559 Nonvested 7,900 7,100 Deferred fuel Total $150,600 $ 140,900 expeme 4,708 1,629 (18,340) Debt portion of A nine percent annual rate of return was awnmed allowance for in determining the actuarial present value of accumu-lated plan benefits for both 1984 and 1983. construction 2,617 547 1,730 The Company's basis for determining pemion Other indirect con. expeme and funding of the plan comiders the actuar-struction cmts I,727 1,603 1,429 lal present value of accumulated plan benefits carned Mawachmetts cor- to date, as well as benefits to be earned in the future. porate franc hise At January 1,1984 and 1983, the pemion plan had tax 6,494 4.116 (146) net awets available for plan benefits of $194,000,000 Pre- April 7,1983 and $173,000,000, respectively, which represent full Spent Nudear funding of the actuarial present value of accumulated s (2,469) 15,223 0-Wn bench and pad funWng d k bene m be earned in the future (which at January 1,1984 were ' Deferred Nudcar 8,438 (2,027) (I,106) estimated to be $141,200,000). Outage Expeme Extraordinary Storm Inwes 1,742 0- 0-Nudea: Safety Evaluation Cmts 1,688 0-Other 4,110 (948) 4.073
$44,785 $26,9 38 $ 9,104
{ 9 36
-Notes to Financial Ctatements G. Estimated Future Costs Related to Ultimate Disposal of Spent Nuclear Fuel and Generating Plants The Company has the capability to expand its spent statements. Depreciation expense includes a provision nuclear fuel storage facility at Pilgrim Nuclear Power for the decommissioning of Pilgrim Nuclear Power Station to include sufficient capacity for spent nuclear Station at the end of its useful life; such funds col-fuel through approximately the year 1992; however, lected are restricted in their use pursuant to retail rate pursuant to the Nuclear Waste Policy Act of 1982, the orders. United States Department of Energy (" DOE") will be The Company also participates as an investor in two responsible for the ultimate disposal of spent nuclear other domestic nuclear units. Both of these units are fuel. The Company estimates that it will be required to recovering as part of their wholesale rates a provision pay the DOE approximately $40,587,000 for disposal for estimated charges for spent nuclear fuel ytisposal of nuclear fuel depleted through April 7,1983. Such costs and plant decommissioning costs. (See also atrount is reflected in the accompanying financial Note A2.) H. Selected Financial Statistics Supplementary FinancialInformation (Unaudited) (In Thousands of Dollars Earnings Except Earnings Per Operating Operating Net Balance Available for Per Share of Share) Revenues Income income Common Stock Common Stock
- Quarterly Financial Data 1984 First Quarter $ 322.925 536,475 $20,898 f 17,377 $ 1.14 Second Quarter 300,436 31,744 15.615 12,089 0.79 Third Quarter 369,916 52,038 35,940 32,448 2.09 Fourth Quarter 323,391 31,551 16,396 12.897 0.82 1983 lirst Quarter $261,657 $32,981 $ 17,747 $ l4,168 $0.96
~ ~
~ ~5Rurid-Quarti r ' '- - - - " '231157 30,925 16,262 12,663 0.85 Third Qu .ter 293,839 42,314 23,929 20,352 1.36 Fourth Quar *er 280,632 23,89I 9,913 6,392 0.42
*Bned upon quarterly weighted ascrage nurnber of winmem dures smnean.fing Quarterly Stock Data Following are the reported high and low sales prices of Boston Edison Company's common stock on the New York Stock Exchange Consolidated Tape for each of the quarters of 1984 and 1983 and the dividends declared per share during each of those quarters:
1984 1983 iligh tow Dividends liigh tany Dividends First Quarter 28 % 24 % .75 28 % 25 .72 Second Quarter 27 % 25 .75 28 % 26 % .72 Third Quarter 30 % 26 .81 28 % 26 % .72 Fourth Quarter 35 % 29 % .81 29 % 26 % .75 h l 37
Matae en Eisenneial tentaneante r I. Information Regarding Jointly-Owned Electric Plant and Long-Tern 3 Purchased Power Contracts
- 1. Jointly-Owned Electric Plant 2. Long-Term Contracts for the Purchase of The Company is a joint owner of W. E Wyman Unit Electricity
#4, which was constructed by Central Maine Power The Company has certain long-term contracts for <
Company and commenced operations in 1979; the purchase of electric power. The Company is obli-included in the accompanying balance sheets is the gated to pay its proportionate share of the operating Company's proportionate share (5.888%) of plant in costs (including depreciation and a return on capital) service of $12,054,000 for both 1984 and 1983 and through the contract expiration date. The total annual c accumulated depreciation of $2,545,000 and costs under these contracts are included with pur-
$2,116,000 for 1984 and 1983, respectively. The Com- chased power expense in the Company's Statements pany includes its share of direct expenses of W. E of Income. The contracts are as follows:
Wyman Unit #4 in the corresponding operating (In Thousands) expenses on its income statement. 1984 Proportionate Share Units of Company Share-of-Contract Capacity Minimum Interest Portion Debt Outstanding Expiration Purchased Debt of Minimum Through Cont. Generating Unit Date % MW Service Debt Service Exp. Date Canal Unit #I 2001(a) 25.0 142 $712 $398 $ 2.965 Connecticut Yankee Atomic 1998 9.5 55 1,307 918 6,315(b) Yankee Atomic 1991 9.5 17 499 259 1,989(c) Point Lepreau! Bear Swamp 1988/ 1990(d) (c) 200 28,100 22,268 2 3,326(f)
$10.618 $23.84 3 $ 34,595 Total fixed and variable costs for these wntracts for the years ended December 31,1984.198 3. and 1982 were $100.615.000, $84.056.000 and $55,328.000, respectively. The variable corr ponent represents fuel wsts w hith are included in net purchased power on the Statements c of Income.
The aggregate principal amounts of these future unwnditional purchase obligations due in the five years 1985 through 1989 are
$40,441,000, 540,782,000, 540,710,000. $42.292.000, and $ 10,915.000, respettively. The aggregate present value of suth obligations h
$ 131,726.000.
(a) Represents 4.42% of the Company's imtalled net capability: the remaining units aggregate 9.02%. tb) Of this amount the Company has guaranteed $4,384.000. (c) In addition the Company has guaranteed $3.325,000 for two revolving credit lines. (d) The Point Lepreau wntrac t may be extende l by the Company for three additional inche month periods. (c) The Company has purchased 15.625% (100 MW) of Point Lepreau's capatity and 17.1% (100 MW) of Hear swamp's capatity. (I) These contracts do not extend for the life of the unit: himever, the amount repnsents the estimated debt payments through the contrati expiration dates. The Company aho has several trammission contracts u hi(h relate to these pur(hased power wntratts; however, the cffect of such wntracts on the accompanying financial statements is not material.
\
Report of Independent Certified Public Accountants To the Stockholders and Directors of Boston Edison Company , We have examined the balance sheets of Boston in our opinion, the financial statements referred to Edison Company at December 31,1984 and 1983 and above present fairly the financial position of Boston the related statements of income, retained earnings Edison Company at December 31,1984 and 1983 and and sources of construction funds for each of the three the results of its operations and sources of construc- " years in the period ended December 31,1984. Our tion funds for each of the three years in the period examinations were made in accordance with gener- ended December 31,1984 in conformity with gener-ally accepted auditing standards, and, accordingly, ally accepted accounting principles applied on a con-included such tests of the accounting records and such sistent basis. ' other auditing procedures as we considered necessary in the circtnnstances. Y Hoston, Massachusetts ( January 24,1985 38
Supplementary Information Supplementary Information to Disclose the Effects of Changing Prices (Unaudited) The following supplementary information is supplied Fuel inventories and the cost of fossil fuel used in in accordance with the regtdrements of the State- generation have not been restated from their historical ment of Financial Accounting Standards No. 33, as cost in nominal dollars. Regulation limits the recovery amended, for the purpose of providing certain of fuel through the operation of adjustment clauses information about the effect of changing prices, it and/or adjustments in basic rate schedules to actual should be viewed as an estimate of the approximate costs. For this reason, fuel inventories are effectively effect ofinflation, rather than as a precise measure. monetary assets. The Company suggests that this information be Depreciation is determined by applying the viewed with caution as,in the Company's opinion, Company's composite depreciation rate to the indexed the information presented does not properly depict plant amounts. the effects of inflation. Since only historical costs aie deductible for income Constant dollar amounts represent historical costs tax purposes, the income tax expense in the historical stated in terms of dollars of equal purchasing power, cost financial statements is not adjusted. as measured by the Consumer Price Index for all Under rate-making prescribed by the regulatory Urban Consumer (CPI-U). Current cost amounts commissions to which the Company is subject, only reflect the changes in specific prices of plant from the the historical cost of plant is recoverable in revenues as date the plant was acquired to the present, and differ depreciation. Therefore, the excess of the cost of plant from constant dollar amounts to the extent that stated in terms of constant dollars or current cost that specific prices have increased more or less rapidly than exceed the historical cost of plant is not presently the general rate of inflation. The current cost of plant recoverable in rates as depreciation, and is reflected as is determined primarily by indexing surviving plant a reduction to net recoverable cost. While the rate-by the llandy-Whitman Index of Public Utility making process gives no recognition to current cost of Construction Costs. Since the utility plant is not replacing property, plant, and equipment, based on expected to be replaced precisely in kind, current cost past practices, the Company believes it will be allowed does not necessarily represent the replacement cost of to earn on the increased cost ofits net investment the company's productive capacity. when replacement of facilities actually occurs. The Company, by holding assets such as receiv-ables, prepayment, and inventory, suffers a loss of purchasing power during periods ofinflation because the amount of cash received in the future for these items will purchase less. Conversely, by holding monetary liabilities, primarily long-term debt, the Company benefits because the payment in the future will be made with nominal dollars having less purchasing power. The Company has significant amounts oflong-term debt outstanding which will be paid back in dollars having less purchasing power and, therefore, for purposes of these calculations, has a net gain from holding monetary liabilities in excess of monetary assets. t i a
Supplementary information (in (heusands) Statement of Income from Continuing Operations Adjusted for Changing Prices (Unaudited) Current Cost Conventional Average 1984 For the Year Ended December ll,1984 Ilistoric Cost Dollars Revenues $ l .116,668 $ 1,116,668 Expenses: Operation and maintenance exduding nudear fuel amortiration 906,027 906,027 Nudcar fuel amortization 5,760 5,771 Depreciation 74,82I I53,859 c Amortization of deferred wst of cancelled nudear unit 24,381 24,381 Taxes - property and other 76,981 76 981 Income Taxes 76.890 76,890 Interest Charges 72.906 72,506 Other income 19,947) (9,947) Total Expenses 1,227.819 1,306M Income from operations excluding adjustments to net recoverable amount 5 88.849 $ 9.800 Increase in specific prices (current wst) of plant held during the > car * $ 205,135 Adjustment to net recoverable amount (63,597) Effect of increase in general price level (125,448) Net 16,090 Gain from dedine in purchasing twnver of net amounts owed 37,925 Total 5 54.015
- At Detember 31,1984, current unt of property, plant and equipment net of mumulated depre(iation was $1,348,715 nhile historkal unt or net wst recoverable through depredation was 51.701,971 enluding rewsery of spent nuclear fuel dispnal unts of $21,764 nhith is wnsidered to be a monet ary item.
Five Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices (In thousands, except per share amounts and Consumer Price Index (CPI), of aserage 1984 dollars) Years Ended December 31, 1984 1983* 1982* 1981* 1980* Operating revenues $1,316,668 $ 1,114,779 $ 1,136,226 $ 1,19 3,780 $ 1,116,7 32 Current Cost Information income (loss) from continuing operations (exduding adjustment
$ 9,800 $ (14,132) $ (7,244) $ 7,835 $ 2,264 to net recoverable cost) less per common share (after dividend require-ments on preferred stock) $ (0.27) $ ( 1.95) $ (1.58) $ (0.64) $ ( 1.22)
Excess (deficiency) of increase in current cost of electric plant held during the year over (hanges in the general price leve! $ 79,687 5 62,818 $ 21,390 $ (135,842) $ (104,356) Adjustment to net recoverable cost $ (63,597) $ (27,245) $ (12,886) $ 62,489 $ (20,506) Net assets at year-end at net S 641,225 5 623,308 $ 619,798 $ 636,252 $ 667,216 recoverable cost General Information Gain from dedine in punhasing twnver of net amounts owned 5 37,925 $ 28.830 $ 66.130 $ 90,263 $ 127,171 Cash dividends declared per common share $ 3.12 $ tol $ 3.03 $ 1.19 $ 3.44 Market price per common share at year-end 5 34.625 $ 29.58 $ 27.96 $ 25.13 $ 27.11 - Average (estimated) CPI 311.2 298.5 289.3 272.4 246.8
- Restated to average 1984 Constant Dollan 40 l
mammmmmmme Selected Operating Statistics . 1984 1983 1982 1981 1980 1979 Capability (NEPEX Net Claimed Winter Maximum MW): New Iloston Station 760 760 760 760 760 760 Pilgrim Nudcar Power Station 670 670 670 670 670 670 Mystic Station 1,030 1,016 1,025 1.046 1,046 1,046 L Street Station 23 23 23 23 48 48 W.F. Wyman Unit #4 36 36 36 16 36 36 Gas Turl ines 264 264 237 267 267 267 Total 2,783 2.769 2,751 2,802 2.827 2.827 Contract Purchases 432 436 323 539 309 314 Contract Saks (263) (122) (182) (590) (337) (243) Net Capability at Year-end 2,952 2,883 2,692 2,751 2,799 2,898 Net Capability at Peak 2,861 2.844 2,603 2,753 2,888 2,815 Capability Responsibility to NEPOOL at Peak 2,684 2,468 2,436 2,480 2.460 2,411 Edison Territory Hourly Peak-MW 2,387 2,233 2,181 2.077 2,100 2,002 Emson Territory Load Factor 57.6 % 59.0 % 56.8 % 58.5 % 57.8 % 59.7 % Generating Station Economy BTU per Net kWh Generated 10,234 10,217 10,112 10,170 10.095 10,171 Average Cost of Fuel (Company) - Cents per Million BTU: Fossil 447,61 426.02 442.12 507.52 417.37 313.11 Nudcar - 48.27 47.18 40.77 38.98 27.57 Composite - 285.10 325.71 158.66 321.34 202.60 Capability (Net kW): Fossil 77 % 77 % 79 % 79 % 80% 80 % Nudear 23% 23% 21% 21 % 20 % 20 % Generation (System kWh): Fossil 88 % 61% 73% 70 % 78 % 65% Nudcar 12 % 19 % 27 % 30 % 22% 35 % Utility Plant In Service (000): Additions (gross) $ 250,569 $ 131,263 $ 140,209 $ 143.316 $ 150,454 5 105,761 Retirements 17,916 16,262 23,130 11,119 9,699 12.219 Accumulated Depreciation 626,109 581,951 533,762 493,087 451,578 403,737 Amount of Depreciable Plant 2,130,619 1,873,270 1,762,337 1,669,411 1,615,846 1,514,123 Utility Plant In Service 2,239.933 2,007,226 1,892,775 I,781,060 1,909.038 1,770,038 i Per Average Customer (dollars) 3,769 3,432 3.282 3.127 3,400 3,194 Per Average Employee (dollars) 531,924 498,938 492.397 453,311 488,319 459,870 Per $1 !!ase Operating Revenue (dollars) 2.97 3.04 1.15 3.11 3,77 3.84 Electric Plant in Service per Edison Territory Hourly Peak (dollars per kW) 896 841 806 800 768 752 Number of Employees at Year-end 4,252 4,115 3,874 3,876 3,954 3,874 41
Relected Ralma Statistic, 1984 1983 1982 1981 1980 1979 Electric Energy: (kWh in thousands) Sources: Net system output: Generated 7,777,441 12,774,656 11,344,914 I I,124,788 12,357,687 12,758,756 e Purchased 2,999,560 1,793,484 1,562,753 1,294,664 1,535,889 1,642,064 Interchange 1,946,469 (584,985) 44,263 482,323 (1,091,794) (1,293,915) Total 12,723,470 13.983,155 12,951,930 12,901,775 12,801,782 13,106.905 Disposition: o-Sales Commercial 5,724,941 5,280,961 4,931,918 4,798,108 4,654,964 4,549,642 Residential 2,890,242 2.777,653 2,647,217 2,594,708 2,651,979 2,597,364 Industrial 1,868,664 1,737,999 1,650,793 1,694,869 1,771,784 1,758,163 Street Lighting 134,905 137,136 136,762 136.541 130,809 125,166 Railroads 27,524 55,729 79.444 60,562 55,397 33,484 Total Retail 10,646,276 9,989.480 9,446,134 9.284,788 9,264,933 9,063,819 Sales for Resale - Total Requirements 447,686 508,153 494,182 482.154 471.443 459,871 Edison Territory Total 11,093,962 10,497,633 9,940,316 9,766,942 9,736,376 9,523,690 Sales for Resaie-Partial Requirements 644,873 2,431,197 2.089,938 2,257,000 2,132,352 2,631,798 Total- Edison System 11,738,835 12,928,830 12,030,254 12.023,942 11,868,728 12.155,488 Miscellaneous Usage: Company 124,173 100,262 112,206 108,930 121,236 114,427 Trensmission 287,030 314,583 264,290 255,609 313,356 357,573 Distribution 573,432 639,480 545,180 513.294 498.462 479,417 Total 12,723,470 13,983,155 12,951,930 12,901,775 12,801.782 13,106,905 o Kilowatthours- Annual Growth Percent: Commercial 8.4 7.1 2.8 1.1 2.3 2.7 Residential 4.1 4.9 2.0 (2.2) 2.1 1.5 Industrial 7.5 5.1 (2.6) (4.3) 0.8 1.7 Street Lighting (1.6) 0.3 0.2 4.4 4,5 3.6 Railroads (50.6) (29.9) 11.1 9.3 65.4 57.2 Total Retail 6.6 5.8 1.7 0.2 2.2 2.3 Sales for Resale - Total Requirements (11.9) 2.8 2.5 2.3 2.5 1.5 Edison Territory Total 5.7 5.6 1.8 0.3 2.2 2.3 Sales for Resale - Partial Requirements (73.5) 16.3 (7.4 ) 5.9 ( 19.0) 13.6 Total- Edison System (9.2) 7.5 0.1 1.3 (2.4) 4.5 Territory Sales by Class: (%) Commercial 52 50 50 49 48 48 Residential 26 27 27 27 27 27 Industrial 17 17 17 17 18 18 Other 5 6 6 7 7 7 Sales Statistics: Residential Averages: Annual kWh Use 5,551 5,407 5,224 5,190 5.378 5,340 Revenue per kWh 11.484 9.39c 9.64c 9.54< 8.05< 6.39t Annual Bill $636.96 $507.75 $503.59 $495.12 $432.76 $341.13 - Customer: Meters at Year-end 629,377 623,020 615,34? 610,764 602,636 596,523 Average Number 594,343 584,773 576,754 569,511 562,076 554,105 I 42
Selected Financial Stati: tic 3 1984 1983 1982 1981 1980 1979 Operating Revenues (000) 51,316,668 $ 1,069,285 $ 1,056,267 $ 1,044,941 $885,634 $697,668 Balance for Common Shares (000) $74,811 $5 3,575 $45,882 $ 58,462 $48,879 $4 3,267 Earnings Per Common Share $4.85 $ 3.60 $1.18 $4.15 $ 3.55 $ 3.49 . Dividends Declared Per Common Share $ 3.12 $2.91 $2.82 $2.80 $2.74 $2.51 Payout Ratio (Common) 63% 80 % 88 % 67 % 77 % 72 % Book Value Per Common Share $3 3.61 $12.21 $ 31.71 $31.68 $ 30.52 $29.93 Cash Flow Per Common Share $14.17 $ 13.90 $ 10.80 $ 10.42 $8.54 $9.69 Return on Average Common Equity 14.69 % 11.24 % 10.02 % 13.35 % 11.73 % 11.37 % Year-End Common Dividend Yield 9.36 % 10.57 % i1.08 % 12.72 % 13.02 % 12.36 % Fixed Charge Coverage (SEC) 3.02 x 2.67x 2.28x 2.2 5 x 2.28x 2.52 x Capitalization: Long-Term Debt 50 % 51 % 53% 54 % 51 % 52 % Preferred and Preference Equity II% 12 % 12 % 12 % 14 % 14 % Common Equity 39 % 37 % 35 % 34 % 35 % 34 % Long-Term Debt (000) $674,125 $674,895 $706,503 $704,83 3 $619,440 $621.080 Cumulative Preference Stock, Redeemable (000) 535,264 $ 37,162 $ 39,235 $40,965 $44,514 $46,488 Total Assets (000) $2,246,464 $ 1,995.42 5 $ 1,929,940 $ 1,918,013 $ 1.782,909 $ 1,659,268 Funds Generated Internally (000) $181,657 $ 161,248 $115.013 $ 107,170 $79.696 $88,505 Construction Expenditures (000) 5264,248 $151,284 $ 136,463 $ 136,7 35 $134,249 $ 107,967 Percent Internal Generation 69 % 107 % 84 % 78 % 59 % 82 % Stockholders (Common) at ? Year-end 53,570 56,950 58,853 59,478 61,533 61,564 Common Shares Outstanding: (Wid. Ave.) 15,435,659 14,902,418 14.434,415 14.073,823 13,763,062 12,389,065 (Year-end) 15,747,689 15,146,284 14,665,213 14.218,986 13,927,582 13,626,439 > Common Stock Price
- liigh 35 % 24 % 26 % 24 % 24 % 24 %
- 12nv 24 % 25 20 19 % 18 % 19 %
- Year-end 34 % 28 % 26 22 21 % 22 Year-end (Common) Market Value (000) $545,264 $429,776 $ 381.296 $ 312,818 $299.44 3 $299,782 Trading Volume (Common Shares) 8,175,300 4.344,600 1,750,400 2,738,900 2.643,000 2,485,000 MarkeuBook Value (Year end) 1.03 .88 .82 .69 .70 .73 Price / Earnings Ratio (Year-end) 7.1 7.0 8.2 5.3 6.1 6.3 h
43
Dividend E'einvestment Plan Important Shareholder Information-me The Dividend Reinvestment and Conunon Stock Pur- Annual Meeting chase Plan is available to common, preferred and pref- The Annual Meeting of Stockholders of the company crence shareholders. Under the plan, conunon will be held on April 16,1985, at 11:00 a m. A copy of shareholders may have their dividends reinvested in the President's Remarks will be sent on request. common stock at 95 percent of current market prices. Company Contact Preferred and preference shareholders may have their Diane M. Kinch, Clerk of the Corporation 1 dividends mvested in common stock at current market prices. All participants may invest optional ca>h con- General Offices tributions, up to a maximum of $5,000 per quarter, 800 Hoylston Street, Boston, Massachusetts 02199 which will be invested at the current market price. (617)424-2000 $ Participants do not pay fees or conunissions. Stock Listings The Economic Recovery Tax Act of1981 makes New York and Hoston stock exchanges certam tax benefits available- beginning January I, ; 1982, and endin,q December 31,1935 - to individual Stock Symbol stockholders who reinvest their dividends under the HSE Plan. Each individual stockholder may elect to exdude Dividend Payment Dates from income for federal income tax purposes up to Conunon and Preferred
$750 each year ($1,500 on a joint return) of dividends ist of February, May, August, November reinvesied under the Plan. This election is made on the Preference stockholders' federal income tax return for the taxable ist of March, June, September, December year in which the dividends would otherwise be includable in income. Tax Status of 1984 Dividends When an election has been made as to the com. Dividends paid on Hoston Edison common, preferred mon stock so purchased, that stock (" Qualified Rein, and preference stock in 1984 are 100 percent taxable as dividend income for federal income tax purposes.
vested Dividend Stock") has a tax basis of zero. If the Qualified Reinvested Dividend Stock is held as a cap . Participants in the reinvestment plan should also refer tal asset for more than one year, it will be taxed at to the " Dividend Reinvestment Plan" section of this long-term capital gains rates when sold; however, report for tax treatment of reinvested dividends. long-term capital gains treatment will not be available Dividend Reinvestment Plan Agent and the entire sale proceeds will be taxed as ordinary The First National Bank of Hoston income if the Qualified Reinvested Dividend Stock is Stock Transfer Agent and Registrar of Stock sold within one year after the Investment Date or if it The First National Hank of Huston 4 is deemed to have been sold between the record date of the dividend and the date which is one year after SEC Form 10-K the investment Date. Stockholders may obtain a copy of Hoston Edison The special tax treatment provided by the Act Company's annual report to the Securities and does not apply to shares purchased under the Plan Exchange Commission, on Form 10-K, including the with optional cash payments, shares purchased for financial statements and schedules thereto, by making accounts under the company's Employee Stock Own- a written request to the Clerk of the Corporation. ership Plan, or shares purchased with dividends which Inquiries Concerning Stock represent a return of capital. . If have questions concerning your dividend pay-Remvested dividends for whkh an elect. ion is not, ments, taxpayer identification number, change of or cannot, be made by a participant will be treategl for address, consolidation of accounts, stock certificates, federal income tax purposes in the same way as dive- transfer of ownership and other stock account matters, dends payable to non-participating shareholders. please contact the Stock Transfer Agent at the follow-All holders of record of shares of Common, Pre-ing address: ferred or Preference Stock are eligible to participate directly in the Plan. Beneficial owners of the compa- The First National Bank of Boston ny's stock whose shares are registered in names other P. O. Box 644 than their own (e.g., a broker or bank nomince) must Boston, Massachusetts 02102 arrange participation with the record holder. If for any c reason a beneficial owner is unable to arrange partici-pation with his broker or bank nominee, he must become a record holder by having the shares trans-ferred to his own name. / All inquiries concerning the plan shouhl be directed to the Plan Agent: The First National Bank of Hoston, Dividend Reinvestment Plan, P. O. Box 1681. Hoston, Massachusetts 02105. 44
Officers- Directors
' Thomas J. Galligan, Jr., Chainnan of the Board Helene R. Cahners (Mrs. Norman L. Cahners),
Tnnte Stephen J. Sweeney, President and Chief Executive Oficer . Thomas G. Dignan, Jr., Attorney-at Law. Partner. Y
~ Joseph P. Tyrrell, Executive Vice President Frank L. Farwell, Honorary Chainnan of the Board.
James M. Lydon, Exccutiw Vice Prcsident Liberty Mutual Insurance Company William D. Harrington, Senior Vice President Thomas J. Galligan, Jr., Chainnan of the Board, Bos-Eleanor T. Daly, Vice President and Assistant to the ton Edison Company Chief Executive OfJicer Kenneth I, Guscott, President. Ken Guscott Associ-Victor 15. Kazanjian, Vice President an'd ates (management consultants) GeneralCounsel Nelson S. Gifford, President, Dennison Manufactur-J. Edward Howard, Vice President-Nuclear Engl. ing Company (manufacturers of paper products and neering and Quality Assurance systems) David J. O'Connor, Jr., Vice President - Joseph P. Healey, Fonner Chairman of the Board and Customer and Corporate Infonnation Services Chief Executive Officer. Refrigerated Food Express, Ine.
. C.' Bruce Damrell, Vice President- Richard D. Hill, Fonner Chairman ofthe Board and i Engineering and Distribution Chie) Executive OfJicer, Bank of Boston Corporation (bank holding company)
Craig D. Peffer, Vice President - Commercial . James M. Lydon, Executwe Vice President, Boston John R. Stevens, Vice President - Energy Supply and Edison Company Corporate Relations WiIiIam D. Manty, Exeanive Vice President.' Cabot Cameron H. Daley, Vice President - Steam ' Corporation (energy, engineered products and per-and Electric Operations formance chemicals) Richard J. Coughlin, Vice Presidart - Bernard J. O'Keefe, Chainnan of the B0ard, EG&G, - Procurement, Stores and Service Inc. (technological services) Thomas J. May, Vice Presidart and Treasurer Herbert Roth, Jr., Chainnan and Chief Executive Offi-cer. LFE Corporation (manufacturer of equipment Marc S. Alpert, Vice President - Rates and systems for traffic and industrial process A. Lee Oxsen, Vice President - Nuclear Operations control) Warren F. Roche, Vice President - Human Resources Stephen J. Sweeney, President and Chief Executive and Labor Relations Officer, Boston Edison Company Diane M. Kinch, Clerk of the Corporation 305cPh P. Tyrrell, Executive Vice President. Boston Edison Company
. Timothy J. Heifernan, Assistant Treasurer Paul E.Tsongas, Attonrey-at Law. Partner. Foley,
- Walter E. Skowronski, Assistant Treasurer Hoag and Elliot Barbara M. Donahue, Assistant Clerk of Alember of Executive Committee the Corporation Member of Audit Committee Member of Executive Personnel Committee
. Robert J. Weafer, Jr., Controller Member of Nuclear Operations Review Committee Director as of January 2,1985 Died January 12,1985 .
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