Text

Philadelphia Electric Co Annual Rept 1984
	ML20115B354
Person / Time
Site:	Peach Bottom
Issue date:	12/31/1984
From:	Joseph Austin, Bradley E, Everett J; PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC
To:	Harold Denton; Office of Nuclear Reactor Regulation
References
	NUDOCS 8504170585
	Download: ML20115B354 (48)
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, g wa "We KnowTheTerritory" The Company's Area Development Department uses this slogan in its successfulcampaign that promotes business activity in the service area. From center-city Philadelphia (repre-sented by thefront cover) to the neighboring suburban counties and parts ofMaryland (see map on back cover), Philadelphia Electric Company stands ready to supply the needs M.

ofexisting customers and to assist new and potential customers in its service territory.

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About the Company-Philadelphia Electric Company is an operating utility which provides electric, gas and steam service to the public in southeastern Pennsylvania and to certain portions of northeastern Maryland through a subsidiary. The total area served

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by the Company and subsidiaries covers 2,475 square miles. Electric service is supplied in an area of 2,340 square miles with a population of about 3,600,000, including 1,600,000 in the City of Philadelphia. Approximately 95 percent of the electric service

+ : 't area and 63 percent of retail kWh sales are in the Philadelphia suburbs and in

'p northeastern Maryland, and 5 percent of the service area and 37 percent of such sales are in the City of Philadelphia. Natural gas service is supplied in a 1,475-square mile area of southeastern Pennsylvania adjacent to Philadelphia with a population of 1,300,000. Steam service is supplied in the central and west Philadelphia areas.

Contents Ixtter to Shareholders 3

Report of 1984 Operations 4

Umcrick Generating Station-Special Feature 12 Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Accountants' Report 22 Consolidated FinancialStatements 23 Notes to FinancialStatements 28 Financialand Operating Statistics 40 ShareholderInformation 44 i

Officers and Directors 45 O

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Philadelphia Electric Company AnnualReport ygy Operating Revenue

$2,981,017,000 52,596,050,000 15 %

Operating Expenses

$2,520,758,000 $2.202,343,000 15 %

J Taxes Charged to Operations

$453,612,000 5378,641,000 20 %

Operating Income

$454,259,000

$393,707,000 15 %

Eamings Applicable to Common Stock

$409,707,000 5321,705,000 27%

Eamings per Average Common Share

$2.70 52.40 13 %

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Cash Dividends Paid per Common Share

$2.20

$2.12 4%

Average Shares of Common Stock Outstanding 151,803,698 133,851,768 13 %

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Construction Expenditures

$1,063,630,000 $1,051,816.000 1%

lotal Assets

$9,555,729,000 58,544,464,000 12%

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To OurShareholders:

I inJanuary,1985, another PUC The Companyachieved major fuelwasloaded by November 13, e

milestones during 1984. Among the and the unit has been fully tested at investigation began to determine most noteworthy:

the low-power level.

whether completion of Limerick Unit No. 2 is in the public interest.

Effective onJanuary 25,1985, the Earnings per share amounted to

$2.70, up 30 cents or 13% from PUC approved an electric base rate We are grateful to all the men and 1983.

increase of $150 million peryear to women of the Company for another recover the co_,ts of Salem Unit No.

job well done this year. We also ex-The dividend rate on common 2, coupled with a fuelcharge tend our gratitude to the many share-stock wasincreased 4%,effectivein decrease of $101 million per year holders who have remained loyal to March. For the year, the dividend to reflect its anticipated savings.

the Company during these recent payment increased 8 cents to $2.20 difficult years.

per share.

. A gas rate increase of $39 million per year became effectivein April, Electric sales to retailcustomers, 1984' aided by theimproving economy, increased by 3%. Gas salesincreased

. Major pipe replacements on Peach James L. Everett 8% and steam sales were up 4%.

Bottom Unit No. 2 neared Chairman of the Board c mpletion.

and ChiefExecutive Officer The Limerick Revolving Credit /

Term Loan Agreement was signed

. Construction expenditures on April 6, providing up to $800 exceeded $1 billion for the second million to complete Unit No.1 year in a row.

at Limerick.

. OnJanuary 3,1985,a Bucks The construction of Limerick Unit CountyJudge ordered Bucks County John H. Austin.Jr.

President No. I was completed.

and the Neshaminy Water Resources an foperadng Oper Authority to complete the Point The Company received a low-Pleasant Water Project which is de-Powerlicense for Limerick Umt signed to provide supplemental cool-No. I from the Nuclear Regulatory ingwater for Limerick. Opponents Commission (NRC)on October 26, have filed exceptions to theJudge's decision which is subject to appeal when it becomes effective.

. In February,1984, the Company suspended construction of Limerick Unit No. 2 in response to a PUC Order.

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FinancialResults Hiet:erfar ings its output was above last year and con-i Earning r share of common stock tnbuted to the total sales improvement.

rose from $[40 to 52.70 per share in The Salem Unit No. 2 contract with 4

1984, an increase of 13%. Common 3*I5*hentral expired on December 3g g l

stock earnings totaled $410 million, Sales of natural as climbed 8% to 70 27% above 1983,while the average billion cubic feet [ue to colder weath shares outstandmg m, creased 13%. The j

annual dividend payment rate on com-during the heating season and increased mon stock increased to $2.20 er share, sales to commercial and industrial l

q 66% of which was not taxable or federal customers. Steam sales increased 4% to 4.7 billion pounds.

g mcome tax purposes.

N 5provedSales5s5s im M.01 bh n.

T' Total electric sales increased 7% to Total operating revenue increased to 29.4 billion kilowatthours. Excluding

$3.0 billion, a 15% increase above 1983 the sales of the Company's share of the les els. Electric revenue rose 5328 mil-

$5 P'

output of Salem Unit No. 2 toJersey li n, r16%,benefitin from higher li Central Power 6r Ught Company, retail service territory sales ( 54 million), rate electric sales increased 3% to 28.0 bil-nereases ($ 140 million), fuel-related Y

lion kilowatthours, as all major sales cat-revenue (5104 million),and sales of 47 rovement over 1983 Salem Unit No. 2 cutput toJersey Cen-egories showed im$em Unit No. 2 was

A levels. Although Sa tral ($36 million). Gas revenue us up dy available for only limited service in 1984 546 million and steam revenue mcreased due to maintenance outages, the sale of 511 million from last year.

Operating and maintenance expenses before de reciation and taxes were up i

7 14% to 5.9 billion, primanly due to

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lion of fuel and interchange costs were deferred for recove in future vears. The l

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total of deferred fue costs at ye'ar-end amounted to 5230 million with recoverv 5

o of approximatel $100 million of these '

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Company's nergy Cost Rate.

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expenses at Eddystone and Crombv 8

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} h Plantandequi mentexpenditures

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p amounted to $1. 6 billion in 1984. Ap-s proximately 76% of these construction N_ -

funds were spent at Limerick and related transmission facilities. In 1985, the

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of $706 million.

192Hinar::ing Program in 1984, the Company raised $804 million in new capital and bank borrow-ings for its construction program and other needs as summari:cd m the table on page 5.

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A $49 million net electric rate increase

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was approved by the Pennsyhania Pub-Mithons of Dollars lic Utility Commission (PUC) effective Apphcanon Date Effective Date Annual Revenue January 25,1985. The increase consists of a base rate increase of $150 million Elecinc-Pennsylvama 4'27,84 le25 85 5149 6 which is partially offset by a $101 mil-Electnc-Maryland 5/2/84 8/1/84 4.3 lion reduction in the Company's electric Gas 7/29'81 4/27/84 39 4 Energy Cost Rate to reflect anriapated steam 7/29/83 1/1'84 26 fuel savings from the Salem Unit No. 2 nuclear reactor. Output from Unit No. 2 had previously been sold toJersey Cen-tral Power & Light Company undera contract which expired on December 31, 1984. The PUC has now permitted the r-

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unit's costs to be recovered from our p

- F retail customers and the Company has agreed to guarantee that the unit will Month Milhons of Do!!ars produce at least $116 million of fuel sav-rebruary sinkmg Fund Debentures-14%% 5enes due 2009 5150 0 1985 to. thrch 1,186 Theap ro ed' March Preferred Stock-14 625%-500.000 shares G $100 50 0 amount was 59% of the $253 mibion A nl Common Stock-6.000.000 shares @ 512 875 77.3 P

base rate increase originally requested in August /

Common Stock-1.000.000 shares continuous offenng-11 9 Apn!,1984. A gas rate increase of $39 september Average pnce 511937 million was approved effective Apnl 27 september Pollunon Control Bonds (vanable ux-exer-t @ 600-685%)

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g 3 g October Common Stock-4.000.000 shares @ 513 00 52 0 November Mortgage Bonds-1) 05% pnvate placement 20 0 bbcr.d cred;t A;rccm.:l November /

Common Stock-612.900 shares contmuous offenng-90 December Average pnce 514 719 In March, the PUCgave approval for December Mortgage Bonds-14 0% pnvate placement 80 0 the Company's $800 million Revohing CreditTrerm Loan Agreement with a December Depositary Preferred stock-14.15%-5.000.000 shares @ 510 50 0 group of 26 banks headed by Citibank.

December Pollunon Control Notes (vanable tax-exempt @ 6 00-6.50 %)

240 0 This eight-year credit facihty is to be December Albed MgO Regeneranon Fachty 56 5 used to fmance the costs associated with the completion of Limerick Unit No.1 January.

Common Stock Purchase Plans:

and common plant,as wellas certain

-Degmbet Dividend Remvestment. Employee. PAYSOP-7.879.000 shares 105 9 suspension costs associated with Unit sub Total 5911.3 No. 2. At year-end, the Company had borrowings of $400 million outstanding

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5800milhonLimenckCreditAgreement-BorrowmgsoutstandmgatDec 31 400 0 under the agreement and had issued Reduction in Domesuc Revolver Borrowmgs (200 0)

$240 million of tax-exempt securities for sub Total 51.111 3 Limerick expenditures, leaving 5150 million available for borrowing under

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Reduction in 5hort Term Debt t247.51 yo,,i the agreement in 1985.

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CommercialDevelopments l

m en,y which help customers manage their bills had a are asimportant a part of PE programs increased business activi$ gas sales in asthosepromotingoff peakusesof itive effect on electric an e

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84. Total electric sales, excludinf8.0 sales Central, increased 3% to

. ne marketing program which re-O I

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billfobilowatthours. Summer weather ceives great emp asts is the Company's that was much cooler than the hot heat pump promotion.The neat ump Herscustomersthemostcost-e ecuve w

summer of 1983 held down the increase, 3

parucularly m residena. l sales which way to heat their homes while providing a

rofitable off-peak sales to help improve foad factor. During 1984,6,579 newly increased only 1%. The commercial g

sector had the largest increase in sales, built living units installed electric heat climbing nearl 5% above 1983 levels.

d Colderweat erduringthe heating pomps for space heating and air condi-tioning, brin installed on thing the total heat pumps y

season and theaddition of approxi-e system to an estimated mately 5,500 newgas heat customers 44.000 units.

helped total gas sales to increase 8% to 70 billion cubic feet.

N The Company's marketin philosophy E'W "

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can be summarized in this o 'ective:

Recognizing the need to maintain a (1

Encourage the use of high-e iciency healthy economic climate in this service l

3 appliances and equipment and the territory, the Company continually re-1

-a installation of energy-conserving ma-views rate structures to assure that they l

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terials which benefit both the Company are meeting the needs of customers and, and its customers. Proposed marketing at the same time, contributing to the I

a programs must meet the test of being financial strength of the Company. Two I

r :i cost-effective to ratepayers and share.

recent examples of successful innova-l L

holders. Energy conservation programs tions include a new clause that enables y

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b industrial customers who use substantial are in the design stage, including a 60-4 y

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amounts of off peak power to purchase story s scraper, the highest ever built in i

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El equivalent amounts of on-peak power at Philade ia, and twin 40-story towers a lower cost and a rate provision which to be bu t in center city by the IBM I

allows large customers who curtail their Corp. In the suburban area, new offices demand upon request to receive a credit are being built in every part of the l

for that curtailed load, thus reducing terntory.

their price per kilowatthour.

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Company's Employment and Economic PE hasa numberofspeciali:ed ener i. I conservation 7off grams in addition to thy Recovery Rider (E R )which was estab-2 2 ro e

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lished in 1983 to encoura e manufactur-promotion o peak uses through 8

I' ing customers to add emp oyees to their I

payrolland to expand m t e Company s specialized rates. Over 14,200 home en-service terntory and to encourage new ergy audits have been completed, more 3

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@s man ifactunngcustomers 'o locate in than one half of all energyaudits in i -

our service terntory. To date,126 cus-Pennsylvania. Surveys have shown that more than 93% of the audited customers tomers are receivmg benefits. Approxi-rate the audit as an excellent value.

mately 6,500 obs have been added t 1

In mid-October, the Com any began the payrolls o customers qualifym.gfor a weathen:ation program cafled the

'e E R, and approximately $127 milhon in 2

hten-up Low Cost Conservation TifC) program for needy PE heating I

capitalinvestment have been made by (T

these customers.

customers utilizing community-based 6

organizations as PE contractors. A total O D r.e ~ '

of 120 houses were weatherized in 1984 Philadelphia Electric Companyhas and an additional 4,000 houses are been one of the region's most active sup-planned for 1985. In the suburban area porters of area development. Using the our TLC program is being coordinated theme,"We Know the Territory,"on with a larger scale insulation program of radio and in print advertising, PE is the state government.

playing an important role in the promo-With the Company's participation in JW

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e tion ofthe amenities and advantages of Philadelphia 5chool District's save En-

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Southeastern Pennsyhania.

ergy Campaign, the Philadelphia School

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C'Fi With the continumg growth in the na.

System was able to save $3.3 million in tional economy, there is a resurgence of 170 schools of which $ 1.9 million was in

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economic development activity through-electric and steam costs.

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':*r out our entire area. During the year the The Company actively cooperates

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r Company participated in the successful with customers and developers inter-

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location of41 new plants which brought ested in installing private generation

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1,600 newjobs to the area. Also, new facilities. PE offers a fair rate when pur-sites and buildings were found for 56 chasing any energy available from these other expandmg companies which facilities. The Company is currently ne-resulted m the retention of over 3,500 gotiating with Scott Paper Company for jobs. The E R played an important part 2 2 in gaining and retaining a number of these companies.

In the commercial sector of the econ-omy, we are benefiting from an excep-tionally strong office-space market. The pace of office construction is gaining momentum throughout the entire terri-tory with construction in downtown Philadelphia continuing at a remarkable pace. Several large office buildings are under construction and several others 7

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ElectricOperations the purchne of energy from their pro-During 1984, hydro generation posed 50-megawatt cogeneration facihty.

records were set at Conowingo Station, A. E. Staley Manufacturing Company is mine-mouth coal generation for the year constructing a 10-megawatt facihty to be at Conemaugh Station was at an all-time on-line by 1986. Several small, natural-high, the flue gas scrubbers contmued to i

A gas-fired cogeneration systems are on-perform successfully at Eddystone and M

line and several are under consideration.

Cromby Stations, and major overhauls at 1(

a he Company is currently in discussion Peach Bottom and Muddy Run were with several potential developers of undertaken.

d waste-to-energy facilities in the area.

A 15% higher than normal rainfallin Approximately 110 megawatts of the Susquehanna River watershed 2

cogeneration are now in service and the caused sustained high river flows and q

Company forecasts approximately 240 enabled Conowingo Station to set all-

,b megawatts of additional cogeneration time monthly hydroelectric generation m

and small power production over the records for the months ofJulyand M

next ten years.

August, exceedmg the prior records by

>4 10% and 28%, respectively. In addition, F

the output for the year was the highest S

3 In the area of customer assistance, since 1979 and the fifth highest in the i

Philadel hia Electric, coo history of the, station. Estimated fuel E

the Philadelphia Gas Worberatinb"eith 7

and savmgs t PE s customers amounted to Z

Philadelphia Water and Sewer Depart-

$94 milli n as a result of the energy ment, started the Utility Emergen Produced b the ConowingoStanon.

'N Services Fund (UESF)in 1983 to Ip Thej.omt yowned Ke stoneand d

needy customers in the Philadel hia area Conemaugh mine-mout, coal-fired meet their utility payrneats. Phibdelphia umts m Western Pennsylvania achieved 3

11 Electric and the other utilities match a number of production milestones dur-4 contributions dollar for dollar. Since its ing the year which followed an excep-inception, the UESF has aided over ti nalye rm 1983.Thehighlevelof 3,900 Philadelphia Electric Company Pedonnance is directly attnbutable to a customers.

ngorous improvement program m.

cludmg prudent capital m. vestment m

{

station upgrading. Both stations receive coal directly from underground mines contiguous to the plant sites. PE owns

. e twenty-one percent of these stations.

/

The magnesium oxide scrubbers, which were placed in commercial opera-i tion at Eddystone and Cromby Stations

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in 1983 to remove sulfur dioxide from the units' flue gas, completed their e

a' second year of successful operation.

t In 1984 the scrubbers were available

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for full operation 97% of the time they

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were required.

Peach Bottom Unit No. 2 was shut

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down in April for refueling and the t

a replacement of portions of the reactor piping system. The stainless steel piping had developed a number of tinycracks at welds on its internal surfaces. This is a generic problem in boihng water reac-9 tors such as Peach Bottom built dunno i

the 1960's and 1970's. The cracks wer,e discovered in 1983 dunng the routine weld inspection program required of piping used in nuclear systems. Approx-unately 1,000 feet of piping of up to 28" in diameter is being replaced with an im-proved nuclear-grade piping The unit is expected to return to service in the sec-ond quarter of 1985. Total project cost is an estimated $70 t,illion.

Muddy Run pumped-storage, hydro-electric plant provides peak load capac-8

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'N ity. The eight pump /turbme units at cuit. Existing rights-of-way, either PE or 1984 was an unusually severe storm htuddy Run require major overhauls Conrail, were utih:ed for the routing of year for the Company's electric distnbu-after 20 years of operation. To date, four alllines. The first Limerick transmission tion system. Approximately 500,000 of the units have been successfully over-line was energized in hiarch,1984. This customers experienced interrupted hauled at an average cost of $1.1 million project represents the completion of all service at some time during the year, as per unit. This work is scheduled for the the transmission requirements for carry-compared with 300.000 customers dur-winter months during periods of lower ing the output of Limerick Unit No.1 ing an average year. In late 51 arch, high l

energy demand and low-flow conditions to our customers.

wmds and heavy rainfall, with snow in in the Conowmgo pond. The Compan In 1984, PE continued to make full outlying areas, resulted in interruptions continued with the program of over y use of its purchasing arrangements with of electric service to 131.000 customers.

hauls this winter and will complete the systems outside the Pennsyhania-New This was the seventh worst storm to last of the units in the winterof 1985-htaryland Interconnection, ena-Jersey he Company to obtain economical affect the Company since 1950. Restora-1986. These overhauls will result bling t tion of electric service to the affected in improved unit efficiency and will coal-fired power from as far west as customers was accomplished within provide rehable and economical electric Indiana. These arrangements, together 48 hours5.555556e-4 days 0.0133 hours 7.936508e-5 weeks 1.8264e-5 months b personnel.y nearly 1.000 CompanyDe production through the year 2000.

with purchases from PJht, serve to The fourth and fmal 230 kV trans-minimize the operation of higher priced, pany continued its near-perfect record of mission line associated with Limerick oil fired generating stations on the rehable service with a service availabihty Generating Station was energized in Sep-Company's system. Nearly 12 billion index of 99.988%.

tember. The four lines were installed at a kilowatthours of economical interchange cost of approximately $33 milhon and power were purchased by the Company encompass over 44 mibs of 230 kV cir-in 1984, representing 38% of total out-put, with the savings to PE customers amounting to approximately $230 milhon.

l 9

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l l

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OtherDevelopments PE is currently installing a prototype a promising market for this fuel may fuelcellundera program funded by exist in the future. As a motor fuel, it is the Gas Research Institute and the U.S.

environmentally safe and competitively Department of Energy. The fuel cell is an priced. In order to capitalize on this po-alternative method of generating elec-tential, the Company has undertaken the tncity which is compact, silent, and does marketing of natural gas for vehicles on a l

not pollute the environment in any way.

limited basis. The Company has three This unit will produce 40 kW of electric-natural gas refueling stations available to h

ity and heat for customer use with an ef-support the natural gas vehicles. A fixed fective efficiency of 80% at full capacit location station et the Plymouth Service a

The fuel cell uses natural gas and is de y.

Building is capabie of fueling 35 vehicles f

signed for unattended, automatic oper-per day and there are two small portable

}

ation. The total cost of the electricity stations which can be moved to l

j produced by the fuel cell is currently sig-customers' properties for short-term 7

nificantly higher than from conventional demonstrations.

g sources. However, the Company expects IK this device could become a useful energy 4

option within 5 to 10 years.

PointPleasantPr0]ect SQ in August, the Company entered into

.A a new long-term nuclear fuel enrichment contract with the U.S. Department of Underan agreement between the Compan the Neshaminy Water Re-Energy (DOE). Under the more flexible sources du, thority (NWRA), and Bucks termsof thenew30- earcontract,the 4

7 Coun for the construction and opera-Companywillpaya ower rice for the service of enn hing uti it owned tion o facilities necessary to supply sup-c uranium. At toda s nces,t econtract plemental cooling water for the l_imerick q

s valueis estimate to e $2.1 billion,a Generatmg Station, construction of the fanuary,acihties was begun by NWR roject f savings of $230 million from previous a

1983, but stopped earlyin contracts with DOE.

p Interestincom ressed naturalgas 1984' Com t es of North 9enn and North Walesnya The p

powered vehicles as been growing and f'

Townships, who also expect to receive r

water from the project, commenced pro-

- y

/,,

s D

K ceedinfourt ofCommon Pleas of Bucks N

in the j

P

%Qs County to require completicn and o r-s gs ation o the facilities. InJanuary,19 5, Ns \\ T the Court ordered the resumption of T

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construction and the implementation of N

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contractual provisions for the supply of g %3Ql,,

decision have been filed by NWRA and water for Limerick. Exceptions to the

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Bucks County and the decision may be

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b ' ' )l appealed following a ruhng on the l

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w f-exceptions.

4

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The Point Pleasant project will not be h,I

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available in 1985 when needed for Lim-

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erick Unit No.1, and an interim supply Y

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of supplemental cooling water will be 5 ' y ^(

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Company will pursue possible sources to needed on a temporary basis. The g

\\, q provide water on an mtenm basis until

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the Point Pleasant project is completed.

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UmerickDevelopments n.,p During 1984. l_imenck passed two 2 -

s 3

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-M major milestones. First, Unit No. I con-

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struction and pre-operational testing was

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completed and, after almost 16 years of planmng and construcnon, was turned vw 5

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over to the Electric Production Depart-I

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ment for operation. And second, the

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Company received a low-power license IN l _

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for the unit from the Nuclear Regulatory pd h I'"'.

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EE Commission (NRC).

e. Aw at: :2-

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M l_ess than 12 hours1.388889e-4 days 0.00333 hours 1.984127e-5 weeks 4.566e-6 months after receipt of the 7

hcense, the first of 764 fuel bundles had ik c been loaded into the unit's boihng-water hg N f i j

h reactor. By late November the head had

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in cember, the reactor reached crit-d.Z

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been baced on the reactor.

icahty-the state at which the nuclear y s yc reaction is self-sustaining-and power

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ascension and low-power testmg up to

_.: e the five percent level continued through-mN w qN

?x,4 s

outJanuary.1.icensing hearings on the x'

emergency evacuation plans were com-A er pleted in lanuary, except for the possi-N x

bility of hearings on the emergency response plans for a correctional insti-s l

tutein theCompany'sservicearea The Company estimates that the earliest date for beginning commercial operation is rem,% :n., ;

1:4 l

the third quarter of 1985, assuming an L

_j.i.u__ _

intenm source of supplemental water is available by, May,1985. If an interim January The Company mformed the Pennsylvanu Pubhc Unhty Commission (PUC) that it had deaded to accept the eUcs option to suspend the construcnon of bmenck Umt No 2 unnt Umt No. I supply of supplemental water is not was m commercut operanon This reused construcnon schedule set he da'e of 1990 for com-available dunng the summer of 1985, metaal operanon of Dmt No 2.

commercial operation of Unit No. I

~

could be delayed an additional six Februry The PUC issued its Order ap I"I "d'"#**provmg the above-mennoned Ian and further required j f*' ""'" " "' *" '" "_

months. At year-end 1984, the Compa-ny's investment amounted to $2.19 bil-Mardt The Nudear Regulatory Commission (NRC) issued its 1983 5)stemaue Assessment of bcensee hon for Unit No. I and $1.07 bdlion for Performance (SALP) Report which assesses design and unstrucuon rformance, placmg common plant.

bmenck among the top SALP reports issued for !! nudcar umts un r construcnon Construction of Unit No. 2 remained Apnl Ihe ComEbanks to f nance the costs oIcompletmg Umt No I and common entered mio the $800 milhon Umentk Revch1ngCredit Agreement with a i

suspended in 1984. In July, the PUC or-roup of fuel rods began dered the Company to"show cause"why the completion of Unit No. 2 isin the May Fuel dehvenes were com leted A Bucks County Judge ruled that the Company's contraa for public interest. The Company s testi-supplemental water vu tee Pomt Pleasani Project was a and contraci many was fded with the PUC in Decem-

~ -

ber and demonstrated that the capacity Jul)

An Emergency Evacuanon Dnll for bmenck mvolvmg Company l

("15 8"d 33 """i P'h"'5 **5 5""'55I"l! ' "d"d F'd"'l *"personne. government offu Y

d 5te Ihtuis gave high l

e9uivalent to Unit No. 2 is needed bY 1990 and that completion of the unit is marks for those who planned and parnapated m the emergency exerase. In another mauer.

the PUC dvected the Company to show cause"why the construction of bmenck Unit No. 2 ts the most economic alternative for the m the pubhc mterest Also. heanngs wre completed by the Atomic Safety and Ucensmg i

I customer. Hearings began on January 3, Board of the NRC on all contennons rebung to the issuance of a low-power hcense for Umt No 1.

1985,and are expected :o contmue August The Aiomic safety and ucensm Board issued an order authon:mg the issuance of a heense for through March. An Order nuy be issued opennon of Umt No I to % ofpower /Jso. heanngs were completed on the Company by the PUC m the third quarter of 1985.

to force compicnon of the Pomt Pleasant Project to provide supplemenul conhng water As of December 31,1984, the Compa-O a ber ny's investment in Unit No. 2 amounted,

The NRC tssued a low-power hcense for Umt No I and the Company immedutely began fuel to $792 million.

I ' *8 A special pictorial section on Limerick November Fuel loadmg was completed The expected date for commercial operation of Unit No I was hgins on page 12.

reused to the third que:cr of 1985 at the carhest mstead of Apnl 1985, assummgan mtenm source of supplemenul water is avadable by May,1485 I

December A number oIzero power tests were completed and imiul cnncahty was reached on December

22. The Company filed direct resumony m connecuon wuh the bmentk Umt No 2 show cause"proceedmgs mandated by the PUC Heanngs are scheduled to contmue from bnuary through March.1985 11

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In 1984, Umerick Unit No. I was completed and a

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., i Iow.powerlicense for the unit was received from the

-?

Nuclear Regulatory Commission. These pages present a

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pictorial report on the current status of Umerick and N

pay tribute to the thousands of men and women who N'

1 participated in completing the construction and com-i mencing the operation of Unit No.1. Although it is impossible to identify each employee involved with

_g,c Umerick, some of the key people are shown on pages a v.9 18,19, and 20, as well as three vice presidents who gave

%z continuing leadership to the project through its various j,

stages-Vincent S. Boyer, Senior Vice President for c

Nuclear Power, John S. Kemper, Vice President for En-d gineering and Research, and Shiv.ds L Daltroff, Vice

>}

President for Electric Production.

A, Umerick is the largest, most cosdy and complex construction project in the 300-year history of the Phil-3 adelphia region. It has been more closely monitored,

.d regulated and reregulated than any other building effort in Southeast Pennsylvania. Its history goes back to

{

1969, when Philadelphia Electric Company announced 4>

plans to build the Umerick units. Applications for mi-T l

jor permits were made in 1970 and inJune,1974 Lim-crick received its construction permit from the Atomic j

Energy Commission.

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following year. The cooling towers for Unit No. I and 4

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Unit No. 2 were essentially completed in 1981 and 1982, respectively.

Umerick Unit No. I was the 100th reactor to receive a low-power operating license or go into service in the United States and approximately the 260th in the world. There are currently 36 nuclear reactors under j-

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r ci construction in the United States and 116 in the world.

3 T he 1.imerick plant represents the very latest in tech-is nology, training and safety in the world, including

};i modTications made as a result of the accident at TMI B

i a

Unit No.1.

In 1982, the Pennsylvania Public Utility Commission ordered the Company to suspend or cancel Unit No. 2.

1; The Company chose suspension and work on that unit

1. ';

has been held up since early 1982. Studies continue to

/

demonstrate that the capacity equivalent to bmerick y

Unit No. 2 is needed by 1990 and that completion of y

i the unit is the most economic alternative.

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.e l-Temperature 545*F

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Pressure

%5 psi

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1 Turbme/ Generator Electncal

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~.y Capacity-per unit 1.100.000 kW l

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Coolmg Towers d

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Height 507 feet y' -,, :, AprM l

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Two Units as of 12/31/84

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Engineenng 16 milhon manhours

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Total field labor 63 milhon manhours

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%, 'j Remforcmg steel 25 000 tons

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Structural steel 22.000 tons

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'i Total concrete 39M00 cubic yards

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,mx g.%: r l '[, [ -

L.arge pipe (over 2M")

504.000 Imeal feet C

~f Small pipe (under 2")

480.000 Imeal feet

' }O) j Cable 10.000.000 feet

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i investment as of 12/31/84

f. h ['%.g.% A'?-$

j Unit No 1 5219 bilhon

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I Umt No 2 5792 million

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Common Plant

$107 bilhon

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s-Phdadelphia Elecmc Company and Subsidiarv Companies Atannpement's Di.scussion andAna& sis of FinancialCodition adResults of Operations General The contract for sale of Salem Unit No. 2 output toJersey Revenue increased in 1984 as a result of higher sales and rate Central Power & Light Company expired on December increases. See Electric Operating Revenue, below. The Com.

31,1984, and the Company was permitted to recover the pany continues to experience substantial increases in oper-unit s costs from customers, effective January 25,1985.

ating costs and carrying charges on increased investment in P ant and equipment. Any future increases in such costs and l

charges may be expected to affect future net income and increased gas revenue in 1984 over 1983 is primarily attnb-ags per average common share adversely unless peri-utable to higher rates and a 7.6 percent increase in sales.

e rate relief is obtained to offset them. In addition, the

pital carrying charges associated with the co,truction of Mad % h e y W americk,which are capi alized by creditingincome with an For accounting purposes, fuel and energy interchange costs t

are deferred until billed as fuel adjustment revenue. In 1984, allowance for funds used during construction (AFUDC) and recovered through future depreciation, now represent a gross fuel and energy interchange costs were essentially the same as in 1983. However, electric fuel costs deferred were major portion of net income and will continue to increase at least until Limerick Unit No. I ts placed in commercial oper-lower by $104.2 million, resulting in a net increase in fuel ation, which is expected to be m 1985. The Company has and energy interchange expense compared with 1983.

obtamed the approval of the Pennsylvania Public Utility in 1983, gross fuel and energy interchange costs increased substantially over 1982 due to extended outages of nuclear Commission (PUC) to utilize an accounting treatment which will synchronize the expense accounting for Limerick units. However, a significant portion of those costs were deferred, resulting in a net decrease of $154.1 million.

Unit No. I with rate recognition of the Unit.

Although the return on average common equity has in-dqmimenaceW creased during the past two years, the return on investment Other operating and maintenance expenses have increased is still below that allowed by the PUC as a fair retum in the n the last two years due to inflation, growth in utility plant, Company'slast rate order.

On April 27,1984, the Company put into effect a rate and increased costs associated with the Company's nuclear generating units and with operating the new flue gas scrub-increase for gas service amounting to $39.4 million per year.

A steam rate mcrease of $2.6 milhon was put into effect on bing systems at the Company's two coal buming stations.

January 1,1984. Retail rate increases for Maryland cus-don tomers and an electric wholesale rate increase totaled $4.9 in depreciation in the last two years reflect addi-million. OnJanuary 25,1985, a $150 million per year base tions to plantin ser ice.

rate increase for electric service was put into effect and the Company's Electric Energy Cost Rate was reduced to reflect anticipated fuel savings for the Salem Unit No. 2 of $101 fn taxes charged to operations increased in 1984 over million per year,which the Company has guaranteed.

1983 as a result of higher operating income.

Electric Operating Rcwnue income tax credits, net,ir.luded in other income,have Increased electric revenue in 1984 over 1983 is primarily increased in the last two years as a result of the higher attnbutable to higher base rates and higher fuel-related reve-allowance for borrowed funds used during construction.

nue. The decrease in 1983 compared with 1982 reflected lower fuel-related revenue and a significant reduction in the OtherTaxes sale of output from Salem Unit No. 2 toJersey Central Power Other taxes have increased primarily due to higher realty

& Light Company as a result of an extended outage of the and gross receipts taxes.

unit. Kilowatthour sales of electricity to retail customers increased 2.8 percent in 1984 over 1983.

Allomrncefor Funds Used During Construction The increases in AFUDC for the last two years have resulted Electric Revenue from higher interest rates and increases in construction work n pmgress.

Increase /(Decrease)

E4 vs. '83 B3 vs. B2 Mdhons of Dollus interestCharEcs Rate Increases

$140.0

$115.6 Interest charges on debt increased in the last two years due to Fuel-Related Revenue 104.0 (188.7) additional debt outstanding and higher rates. The ratio of Salem Unit No. 2 36.5 (104.9) camings to mortgage interest, which is a measure of the 47.3 104.9 Company's ability to issue additionallong-term debt.

Other Total

$327.8

$(73.1) increased to 2.55 times in 1984 exceeding the minimum of 2.0 times required for the issuance of new mortgage debt.

21

~

Capital Expenditures and Changes in Financial Position the Nuclear Regulatory Commission, to financing approvals The Company is carrying on a construction program which by the FUC, and to change due to litigation. The Company is estimated to require expenditures of $766 million in 1985 cannot predict the outcome of such regulatory reviews, but and $2.6 billion from 1986 to 1988. A majority of these ex-believes the safety requirements have been or will be met, penditures relates to the construction of the Company's two the economic desirability of the program has been demon-1055 mW nuclear generating units at 1imerick. Successful strated, and that the program will be successfully completed completion of this program is dependent on the Company's and approved.

ability to obtain external financing, pnmarily through debt Interim financing of the construction program is prosided l

arrangements and sales of equity securities which are subject by commercial paper borrowings and short-and intermedi-to market conditions and to meeting certain earnings tests.

.te-term bank loans, which also are dependent on the Com-The program also is subject to the licensing requirements of pany's financialposition.

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80 81 82 83 84 80 81 82 83 84 i

Accourstarris' Report l

To the Shareholders and Board of Directors l

Philadelphia Electnc Company I

i We have examined the consolidated balance sheets of Philadelphia Electric Company and Subsidiary Companies as of December 31,1984 and 1983, and the related consolidated statements of income, retained earnings, changes in common stock, preferred stock, and other paid.in capital, and changes in financial position for each of the three years in the period ended l

December 31,1984. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the consolidated financial position of l

Philadelphia Electric Company and Subsidiary Companies as of December 31,1984 and 1983, and the consolidated results of their operations 2nd changes in their financial position for each of the three years in the period ended December 31,1984,in conformity with generally accepted dccounting principles apphed on a consistent basis.

1900Three Mellon Bank Center Philadelphia, Pennsylvania 4

February 1,1985 22

?

i Phdadelphia Electnc Company and Subsidiary Compnies CassolidstedStatementsofhcome For the Year Ended December 31 1984 1983 1982 (Thousands of Dollars)

Operating Rewnues Electric

$2,435,731

$2,107,897

$2,180,960 Gas 462,966 417,042 390,427 Steam 82,320 71,111 73,366 TotalOperating Rewnues 2,981,017 2,5 %,050 2,644,753 Operating Expenses Fueland Energy Interchange 1,122,177 986,634 1,128,498 Other Operating Expenses 527,060 449,101 411,753 Maintenance 245,583 222,640 199,747 Depreciation 178,326 165,327 143,848 Income Taxes 246,749 200,026 207,669 Other Taxes 206.863 178.615 164.511 TotalOperating Expenses 2,526,758 2,202,343 2,256,026 OperatingIncome 454,259 393,707 388,727 Otherincome Allowance for Other Funds Used During Construction 134,485 108,126 65,699 Income Tax Credits, Net 116,423 87,912 75,845 Other, Net 239 (3,125)

(717)

TotalOtherIncome 251,147 192.913 140,827 Inunne BeforeInterest Charges 705,406 586,620 529,554 Internt Charges Long-Term Debt 402,475 330,200 308,862 Short-Term Debt 30,912 35,199 32,030 Allowance for Borrowed Funds Used During Constmction (220,370)

(167,868)

(147,561)

NetInterest Charges 213,017 197,531 103,331 Niinanne 492,389 389,089 336,223 PreferredStodt Drvidends 82,682 67,384 57,600 Farnings Applicable to Canmon Stock

$ 409,707

$ 321,705

$ 278,623 i

Average Shares of Common Stock Outstanding (Thousands) 151,804 133,852 116,480 Earnings PerAverage Common Share (Dollars)

$2.70

$2.40

$2.39 j

Dividends Per Common Share (Dollars)

$2.20

$2.12

$2.06 l

see notes to financial statements.

I 9

9 1

I l

l 23

Ptuladelph'a Electric Company and Subsidury Comparues ConsoffdefedAsianceSheets ASSET 3 December 31 1984 1983*

(Thousandsof Dollars)

Utility Plant,atoriginalcost Electric

$4,806,4%

$4,683,726 Gas 443,946 416,170 Steam 53,846 53,845 Common,usedin allservices 129,649 128,379 5,433,937 5,282,120 Less: Accumulated Depreciation 1,726,321 1,592,009 Net Utility Plant in Service 3,707,616 3,690,111 ConstructionWork in Progress 4,400,166 3,582,133 Leased Property, net 352,133 363,928 Net UtilityPlant 8,459,915 7,636,172 inwstments 80,871 99,445 CurrentAssets Cash and Temporary Cash Investments 30,357 57,270 Escrow Deposits 88,076 7,951 Accounts Receivable Customers 346,018 302,254 Other 38,284 36,354 Inventories,at average cost Fossil Fuel 93,004 75,681 Materials and Supplies 57,532 55,403 Deferred Energy Costs 229,895 149,246 Other 48,870 44,313 TotalCurrent Assets 932,036 728,472 DeferredDebits 82,907 80,375 Total 59,555,729

$8,544,464 See notes to fmancial statements.

Restated to conform with SFAS 71-See Note # 2 to Imancial senements.

a e

24

CANTAULAINEAMIUANUTES December 31 1984 1983*

(Thousands of Dollars)

Capitalization Common Shareholders' Equity Common Stock

$2,360,948

$2,110,503 Other Paid inCapital 6,727 5,856 Retained Earnings 523,300 452,% 4 2,890,975 2,569,323 PreferredStock Without Mandatory Redemption 572,472 522,472 With Mandatory Redemption 326,135 284,863 long Term Debt 3,777,% 1 3,381,805 TotalCapitalization 7,567,643 6,758,463 t

Current Liabilities Short-Term Debt Bank loans 20,000 218,000 Commercial Paper 49,500 Pollution Control Notes 240,000 long Term Debt due within one year 50,361 Lease Obligations due within one year 68,332 61,447 Accounts Payable 156,245 152,687 Taxes Accrued 40,314 25,841 Deferred Income Taxes-Energy 117,729 76,517 Interest Accrued 91,110 91,787 Dividends Declared Other 43,7 %

27,211 127,227 54,078 TotalCunentliabilities 955,114 757,068 Deferred Cardits and OtherLiabilities DeferredIncome T, aces 373,343 346,531 Unamortized Investment Tax Credits 199,419 249,658 Obligations Under Capitalleases Other 283,802 302,481 76,408 130,263 Total Deferred Credits and Other Liabilities 1,032,972 1,028,933 Total

$9,555,729

$8,544,464 9

)

-r.

Phdadelphia Electnc Company and Subskliary Companes Consolidated Statements of Changes in FinancialPosition For the Year Ended December 31 1984 1983*

1982*

(Thousands of Dollars)

Sources ofFunds Funds From Operations Net Income

$ 492,389

$ 389,089

$ 336,223 Charges (Credits) Not Affecting Funds Depreciation 178,326 165,327 143,848 Nuclear Fuel Disposal Costs 13,201 12,166 15,820 Deferred income Taxes 76,197 175,307 (10,215) i Investment Tax Credits, Net of Amortization 49,927 (46,064) 101,646 Allowance for Other Funds Used Dming Construction (134,485)

(108.126)

(65,699)

Total from Operations 675,555 587,699 521,623 Funds from Financings Sales of Securities Common Stock 250,445 284,305 253,810 Preferred Stock 100,000 150,000 30,000 Long-Term Debt 258,700 175,000 300,000 Short term Pollution Control Notes 240,000 Net Borrowings Under Revolving Credit Agreements 200,000 200,000 20,000 Change in Other Short-Term Debt (247,500) 202,800 10,475 Sale of Magnesium Oxide Regeneration Facilities 55,928 37,679 Increase in Obligations Under Capital Leases 12,690 72,514 113,892 Total from Financings 870,263 1,122,298 728,177 TotalSources

$1,545,818

$1,709,997

$1,249,800 UsesofFunds Additions to Utility Plant 1,053,133 1,030,321 870,715 Additions toleased Assets 12,690 72,514 113,892 Allowance for Other Funds Used During Construction (134,485)

(108,126)

(65,699)

Dividends on Preferred and Common Stock 418,098 352,553 298,468 Retirement oflong-Term Debt 11,194 41,573 50,183 Net Change in Deferred Energy Costs 80,649 234,625 (54,080)

Increase in Nuclear Fuel Escrow Account 32,160 7,113 8,204 Net Change in Other Items of Working Capital 50,340 71,451 94,236 Other, Net 22,039 7,973 (66,119)

Total Uses

$1,545,818

$1,709,997

$1.249,800 See notes to financial statements

' Restated to conform with 5FAS 71-See Note #2 to financial statements.

o

Plutadelph u Elecinc Company rnd Subsidury Compames ConsplidstedStatements of RetainedEarnings For theYear Ended December 31 1984 1983 1982 l

(Thousands of Dollars)

Balance, January 1

$452,964

$423,5%

$387,251 Net income 492,389 389,089 336,223 945,353 812,685 723,474 Cash Dividends Declared Preferred Stock (at specified annual rates) 83,820 68,970 57,982 4

Common Stock (per share, $2.20 in 1984, $2.12 in 1983, l

and $2.06in 1982) 334,278 283,583 240,486 Expenses of CapitalStock issues 3,955 7,168 1,410 422,053 359,721 299,678 Balance, December 31 5523,300

$452,964

$423,596 Consolidated Statements of Changes in Common Stock, PreferredStock and OtherPaid in Capital Common Stock Preferred Stock Other Paid In Shares Amount Shares Amount Capital (All Amounts in Thousands)

Balance, January 1,1982 108,507

$1,572,388 6,394

$639,401

$3,888 Issuance of Stock Public Sales 12,000 175,620 300 30,000 Employee Stock Ownership Plans 1,240 17,791 Dividend Reinvestment and Stock Purchase Plan 4,020 60,399 Redemptions (46)

(4,639) 753 Balance, December 31,1982 125,767 1,826,198 6,648 664,762 4,641 Issuance ofStock Public Sales 11,000 186,055 1,500 150,000 Employee Stock Ownership Plans 1,256 21,054 Dividend Reinvestment and Stock Purchase Plan 4,788 77,196 Redemptions (75)

(7,427) 1,215 Balance, December 31,1983 142,811 2,110,503 8,073 807,335 5,856 issuance of Stock Public Sales 11,613 144,548 1,000 100,000 EmployeeStock Ownership Plans 914 10,563

~

Dividend Reinvestment and i

Stock Purchase Plan 6,%5 95,334 Redemptions (86)

(8,628) 871 Belance December 31,1984 162,303 $2,360,948 8,987 5898,707

$6,727 See notes to hnancial statements.

n o

s Ntadc!phu Electric Company and Subudiary Companies NotesDHnancialStatoments 1.38nNCANTACCOWTmGPOUCES General age depreciable utility plant in service, were approximately All utility subsidiary companies of Philadelphia Electric 3.29% for 1984,3.20% for 1983 and 3.00% for 1982.

Company are wholly owned and are included in the consoli-

.g dated fmancial statements. Nonutility subsidiaries are Deferred income taxes are provided for differences between included in investments and accounted for by the equity book and taxable income to the extent permitted for rate-method. Accounting policies are in accordar.ce with those mak ng purposes. Investment tax credits, other than credits prescnbed by the regulatory authorities havingjurisdiction, resulting from contributions to employee stock ownership principally the Federal Energy Regulatory Commission plans, which do not affect income, are deferred and (FERC) and the Pennsylvama Public Utility Commission amonized to income over the estimated usefullife of the (PUC).

related utility plant.

Allowancefor Funds Used During Constmction (AFUDC)

Revenues are recorded in the accounts upon billing to the AFUDC is a non-cash item which is defined in the uniform customer. Rate increases are billed from dates authori:ed or systems of accounts as"the net cost for the period of con-permitted to become effective by the regulatory authorities.

struction of borrowed funds used for construction purposes FuelExpenses and a reasonable rate on other funds when so used." AFUDC Fuel expenses, which are recoverable under energy adjust-is recorded as a charge to Construction Work in Progress, ment clauses, are recognized when the related revenue is and the equivalent credits are to" Interest Charges" for the billed to customers.

pretax cost of borrowed funds and to"Other income" for the Nuclear fuel used in the Peach Bottom and Salem Generating remainder as the allowance for equity funds. The rate used Stations is leased, and the costs of such leased fuel are for capitalizing AFUDC, which averaged 9.4% in 1984,9.3%

charged to fuel expense on the unit of production method.

in 1983, and 9.2% in 1982, is computed under a method Nuclear fuel disposal costs are being charged to fuel expense prescribed by the regulatory authorities. The rate is a " net as the related fuelis bumed. Assessments imposed by the after. tax rate"and the current income tax reductions applic-Nuclear Waste Policy Act of 1982 for fuel bumed prior to able to the interest charges capitalized are recorded in"Other April 7,1983 are being amortized to fuel expenses over the income." AFUDC is not included in taxable income and the period endingJune 30,1985.

depreciation of capitalized AFUDC is not tax deductible.

Depreciation Retirement Plan For financial reporting purposes, depreciation is provided The company has a noncontributory trusteed retirement over the estimated service lives of the plant on the straight-plan applicable to all regular employees. Pension costs in-line method and, for tax purposes, generally, over shorter clude normal cost for the year and amortization of unfunded lives on accelerated methods. The estimated decommission-prior service costs over ten to twenty years. Approximately ing costs of portions of the nuclear plants are being charged 80% of such costs were charged to operating expense and the to operations as permitted for rate-making purposes Such remainder, associated with construction labor, to the cost of amounts, net of deferred income taxes where applicable, are new utihty plant.

deposited in an escrow account and invested for funding of Gas Exploration and Dewfopmentjoint Ventures future costs. The Company believes that any additional The Company has invested in severaljoint ventures for costs, which may be significant, would be recoverable exploring and drilling for natural gas. Costs are capitalized through adjustments of rates charged to its customers. An-under the full cost method and charged to operations com-nual depreciation provisions, expressed as a percent of aver-mensurate with the production of natural gas.

2. MNANCIAL ACCONETIN STAn0Anos N0. 7I EffectiveJanuary 1,1984 the Company adopted the State-have been restated to reflect retroactive adoption of SFAS 71.

ment of Financial Accounting Standards No. 71 (SFAS 71)

Retroactive adoption had no effect on consolidated operating "Accountmg for the Effects of Certain Types of Regulation."

revenues, operating income, net income, or retained cam-SFAS 71 results in the recognition of certain assets and liabil-ings. The principal effect of the retroactive adoption of SFAS ities which had not previously beep recogni:ed in financial 71 is the recognition of capitalleases. As a result of such statements in conformity with the rate-making treatment.

adoption, assets and liabilities at December 31,1983 have in-l The Consolidated Balance Sheets and Statements of Changes creased approximately $400 million from the amounts previ-j in Financial Position for periods prior toJanuary 1,1984 ously reported.

l i

28 l

0

2. COMMON #700f At December 31,1984 and 1983, Common Stock, without par value, consisted of 240,000,000 shares, authorized and 162,303,390 and 142,811,434 shares, respectively, outstanding At December 31,1984 there w ere 17,924,086 shares reserved for issuance under stock purchase plans.

4.mmmesroar At December 31,1984 and 1983, Preferred Stock $100 par, cumulative Shares Amount Current Refundmg Outs;andmg Redemption Restricted Pnce (a) to(b)

Authorized 1984 1983 1984 1983 (Thousands of Dollars)

Series (without manda-tory redemption) 14.15.%(c)

$114.15 2-1-90 500,000 500,000

$50,000 $ -

13.35%(c) 113.35 2 1-89 750,000 750,000 750,000 75,000 75,000 12.8%(c) 112.80 5-1-88 750,000 750,000 750,000 75,000 75,000 9.50 %

103.50 750,000 750,000 750,000 75,000 75,000 8.75 %

104.00 650,000 650,000 650,000 65,000 65,000 7.85%

103.00 500,000 500,000 500,000 50,000 50,000 7.80%

103.00 750,000 750,000 750,000 75,000 75,000 7.75 %

103.00 200,000 200,000 200,000 20,000 20,000 4.68 %

104.00 150,000 150,000 150,000 15,000 15,000 4.4%

112.50 274,720 274,720 274,720 27,472 27,472 4.3%

102.00 150,000 150,000 150,000 15,000 15,000 3.8%

106.00 300,000 300,000 300,000 30,000 30,000 5,724,720 5,724,720 5,224,720 572,472 522,472 Series (with mandatory redemption)(d) 17.125 %

$117.125 5-1-87 300,000 300,000 300,000 30,000 30,000 15.25 %

115.25 5-1-90 500,000 500,000 500,000 50,000 50,000 14.625 %

108.70 5-1 90 500,000 500,000 50,000 10%

104.44 5-1-90 220,000 220,000 220,000 22,000 22,000 9.52%

106.25 5-1-86 500,000 401,650 419,660 40,165 41,966 8.75 %

105.66 5-1-88 500,000 466,700 500,000 46,670 50,000 7.325 %

104.10 750,000 570,000 600,000 57,000 60,000 7%

101.00 400,000 304,000 308,970 30,400 30,897 3,670,000 3,262,350 2,848,630 326,235 284,863 Unclassified 605,280 TotalPreferredStock 10,000,000 8,987,070 8,073,350

$898,707 $807,335 (a) Redeemable, at the option of the Company, at the indicated (c) Ownership of these series of Preferred Stock is evidenced by dollar amounts per share, plus accrued dividends.

Depositary Preference Shares, each representing 1/10 of a share of (b) Prior to the date specified, none of the shares of each series Preferred Stock.

indicated may be redeemed through refunding at an interest cost or (d) Redemption requirements (par value) in the period 1985 -1989 dividend rate which is less than the dividend rate of such series.

are as follows: 1985-$6,495,000,1986-515,230,000,1987-

$16,030,000,1988 $17,530,000,1989 $17,530,000.

o

Phdadelph3 Electnc Company and Subudury Companics NotesJo RnanciniStatements (continued) 5.UnG TBlNDEET At December 31,1984 and 1983 Senes Due 1984 1983

~

(Thousandsof Dollars)

First and Refunding Mortgage Bonds (a) 3-1/8%

1985

$ 50,000

$ 50,000 4-3/8%

1986 50,000 50,000 4-5/8%

1987 40,000 40,000 3-3/4 % 14 %

1988 52,500 40,000 5 % 14 %

1989 62,500 50,000 4-1/2 % 14 %

1990-1994 310,000 235,000 6-1/8 % 15 1/4 %

1995-1999 489,200 490,864 7-3/8 % 11 5/8 %

2000-2004 562,317 569,930 6 % 18-3/4 %

2005-2009 523,500 523,500 13-3/8 %-18 %

2010-2014 450,000 450,000 Total First and Refunding Mortgage Bonds 2,590,017 2,499,294 Notes Payable-Banks (b) 1985-1989 225,000 225,000 Notes Payable-Other 17%

1987-2013 274,190 266,830 Debentures 4.85%

1986 21,161 21,207 Debentures 14-1/8 %

1990 50,000 50,000 Debentures 14 3/4 %

2005 100,000 100,000 Deben;ures 14.5 %

2009 150,000 Sinking Fund Debenture-Philadelphia Electric Power Co., a Subsidiary 4-1/2%

1995 16,397 16,928 Unamortized Debt Discount and Premium, Net (18,443)

(17,454)-

Totallong-Term Debt 3,828,322 3,381,805 Dv WitMn One Year (d) 50,361 long-Term Debt included in Capitalization (e)

$3,777,%1

$3,381,805 (a) Unlity plant is subject to the lien of the Company's mortgage.

loan agreem:nt with a group of banks which expires in 1987, under (b) At interest rates ranging from prime rate to 105% of prime rate.

which there were no borrowings as of December 31,1984. Interest (c) The Company has an $800 million revolving credit and term n utstanding borrowmgs is at prime rate through May 1985 and loan agreement with a group of banks which will provide the at 105% of pnme rate thereafter. There is an annual commitment fee f1/2%on theunusedamount. Asaresultof theLimerick financing required to complete Limerick Unit No.1. The revolving credit arrangement converts into a term loan on the earlier of investigati n, the Company does not meet a condition of borrowing eighteen months following the in setsice date of Limerick Unit No.

under this agreement, although this condition has been waived in 1 or March 31,1988. The borrowings are due in eight semi. annual the past.

Installments with the first payment due 6 months after the (d) Long-term debt maturities in the period 1986-1989 are as conversion into the term loan. Interest on outstanding borrowings followS:

is based on specific formulas selected by the Company involving 1986-$83.066,000;1987-$241,688,000,1988 $244,350,000:

yields on several types of debt instruments. There is an annual 1989 $204,350,000 commitment fee of 1/2% on the unused amount. At December 31, (c) The annuah:ed interest on long term debt at December 31, 1984, $400 million was outstanding under this agreement. (See 1984 was $420.2 million of which $274.8 million was associated Note #6.)

with mortgage bonds and $145.4 million was associated with other The Company also has a $400 million revolving credit and term long-term debt.

30 J

6.M TENVNET 1984 1983 1982 (Thousands of Dellars)

Average Short-Term Borrowings

$166,713

$164,429

$ 90,180 Average Interest Rates, Computed on Daily Basis 9.88 %

9.06 %

13.13 %

Maximum Short-Term Borrowings Outstandmg

$302,500

$340,000

$168,725 Average Interest Rates on Short-Term Borrowings at December 31:

Bank Loans 9.95 %

10.53 %

10.37 %

Commercial Paper-Tax Exempt 5.61 %

4.92%

Commercial Paper-Taxable 10.64 %

9.62 %

Pollution Control Notes (a) 6.44 %

(a) In December 1984, the Company sold $240 million of short.

The Company has agreed that the letter of credit commitment under term, tax-exempt notes backed by a letter of credit provided by a the financing ( $250 million including principal and interest), plus group of banks to provide short. term tax-exempt fmancing for the borrowings under the $800 million revohing credit and term pollution control facilities for 1 imerick Unit No. I and common loan agreement (see Note #5) will not exceed $800 million.

plant until permanent tax exempt financing can be arranged.

As of December 31,1984 the Company had borrowed $20.0 million under formal and informal lines of credit with banks aggregating approximately $341.9 million. The Company generally does not have formal compensating balance arrangements with these banks.

7.J0WTLY-0HEDBECTNCUTKITYMMT The Company's ownership interests injointly-owned utility plant at December 31,1984 were as follows:

Transmission Production Plants Plant Peach Bottom Salem Keystone Conemaugh Operator Philadelphia Pubhc Service Pennsylvania Pennsylvania Various Electric Electric and Electric Electric Companies Company Gas Company Company Company ParticipatingInterest 42.49%

42.59%

20.99 %

20.72 %

21% to 43%

(Thousands of Dollars)

Company's share of:

UtilityPlant

$432,498

$878,049

$54,484

$59,781

$68,864 Accumulated Depreciation 107,549 127,458 21,771 21,920 12,447 Construction Work In Progress 52,3 %

20,767 10,041 1,792 The Company's participating interests are financed with Company funds and,when placed in service, all operations are accounted for as if such participating interests were wholly-owned facilities.

t f

l i

31 o

Philadelphia Electric Cernpany and Subsadiary Companies AletesD FinancialStatoments (conunued) s.mcomunss 1984 1983 1982 (Thousands oWitars)

Inchuledin operating expenses.

Current Federal 5 %,915

$ 54,495

$ 71,987 Current State 23,710 16,288 44,251 Toed 120,625 70,783 116,238 Deferred Federal 49,770 151,259 (8,390)

Deferred State 26,427 24,048 (1,825)

Total 76,197 175,307 (10,215)

Investment tax credits, net of amortization-Federal 49,927 (46,064) 101,646 Total Federal 1%,612 159,690 165,243 Total State 50,137 40,330 42,426 Total 246,749 200,026 207,669 Inchuledin otherincome:

Current Federal (93,818)

(70,902)

(60,506)

Current State (22,605)

(17,010)

(15,339)

Total (116,423)

(87,912)

(75,845)

Totalincome taxpmisions:

Federal 102,794 88,788 104,737 State 27,532 23,326 27,087 Total

$130,326

$112,114

$131,824 Investment tax credits reduced Federal income taxes plans are in the form of Philadelphia Electric Company currently payable by $58 million in 1984. Approximately Common Stock and have no effect on net income.

$162 mdlion of additional investment tax credits generated For a number of years the Company has used accelerated in 1982,1983, and 1984 have not been utilized due to depreciation for tax purposes and straight line depreciation limitations based on taxable income. These credits may be for financial reporting purposes. Deferred taxes were used to reduce Federal income taxes in future years through recorded only on those timing differences recognized for rate 1997 to 1999.

making. The cumulative net amount of such timing Investment tax credits consist of the basic credits allowable differences for which deferred taxes were not recorded was of 10% plus additional credits resulting from contributions approximately $845 million and $875 million at December to the Employee Stock Ownership Plans for employees.

31,1984 and 1983, respectively. Since the Company expects The additional credits are equal to 1/2% of employee to charge customers for taxes paid when the timing compensation in 1984 and 1983 and 1 1/2% of the differences reverse, the tax effect of such timing differences investment tax credit base in 1982. Contributions to the should not be recorded currently.

?

32 i

Provisions for deferred income taxes consist of the tax effects of the following timing differences:

1984 1983 1982 (Thousands of Dollars)

Depreciation and amortization 5 33,% 5

$ 38,792

$ 30,042 Nuclearwaste disposalcosts (7,355) 24,281 (7,865)

Deferred energy costs 41,212 119,867 (27,264)

Udier 8,375 (7,633)

(5,128)

Total

$ 76,197

$175,307

$ (10,215)

The total income tax provisions differ from amounts computed by applying the Federal statutory tax rate to income and adjusted income before income taxes for the following reasons:

Netincome

$492,389

$389,089

$336,223 Totalincome tax provisions 130,326 112,114 131,824 Income before income taxes 622,715 501,203 468,047 Deduct-allowance for funds used during construction (nontaxable) 354,855 275,994 213,260 Adjusted income before income taxes

$267,860

$225,209

$254,787 Income taxes on above at Federal statutory rate of 46%

123,215 103,5 %

117,202 Increase (decrease) due to:

Depreciation timing differences not normalized 7,247 7,941 10,672 State mcome tax, net of Federal income tax benefits 14,867 12,597 14,627 Amortization ofinvestment tax credits previously deferred (7,752)

(6,210)

(7,214)

Taxes and pension costs capitalized but expensed for tax purposes (802)

(673)

(3%)

Other net (6,449)

(5,137)

(3,067)

Totalincome taxprovisions

$130,326

$112,114

$131,824 Provision for income taxes as a percent of:

Income before income taxes 20.9 %

22.4 %

28.2 %

Adjusted income beforeincome taxes 48.7%

49.8 %

51.7 %

9.ESCn0lVDE90$1TS Escrow deposits are stated at cost plus accrued interest, which approximates market, and consist of cash equivalent securities held in trusteed accounts which are restricted as to withdrawal pending the Company's incurring qualified costs. Below is a summary of such escrow deposits at December 31,1984.

1984 1983 (Thousandsof Dollars)

Pollution Control Facilities Under Constmction

$31,305

$ 7,951 Other Facilities Under Construction 4,955 l

Nuclear FuelDisposal 51,816

$88,076

$ 7.951 10.MVESThltWTS l

[

At December 31 1984 1983 (Thousandsof Dollars)

Gas Exploration and Developmentjoint Ventures

$46,406

$47,736 Real Estate Developments and Other Ventures 12,120 11,233 Nonutility Property 13,441 14,668 Escrow Deposits for Nuclear Fuel Disposal (See Note #9) 19,656 Escrow Deposits for Decommissioning Nuclear Plants 7,792 4,927 Other Deposits 1,112 1,225 l

Total

$80,871

$99,445 l

Phdadelphu Electnc Company and Subsidwy Companes Notes D FinancialStatennets (continued)

11. MKES,0TMR TNANNCONE 1984 1983 1982 (Thousandsof Dollars)

Gross receipts

$122,881

$108,211

$106,090 Capital stock 13,240 19,198 18,928 Realty 48,030 30,975 22,505 Other 22,712 20.231 16,988 Total

$206.863

$178,615

$164,511 12.MTMENEMTNAM Retirement plan costs,which are funded as accrued, aggregated $42,000,000 in 1984, $41,000,000 in 1983, and $37,800,000 in 1982. Plan data as of the dates of the most recent actuarial valuations is as follows:

January 1 1984 1983 Actuarial present value of accumulated plan beneftts (7.0% assumed rate of return)

<Thousandsof 001 tars)

Vested

$447,994

$404,673 Nonvested 54,174 48,545

$502.168

$453,218 Net assets available for benefits

$573,372

$477,748 1.1.90STRETIREMENTBEMFITS The Company and its subsidiaries provide certain health providing these benefits by charging the annual insurance care and hfe insurance benefits for retired employees.

premiums to expense. The cost of providing those benefits Substantially all of the Company's employees may become for approximately 2,400 retirees during the years 1982-1984 eligible for these benefits if they reach retirement age while is not separable from the cost of providing benefits for still working for the Company. These benefits and similar approximately 10,000 active employees for the same period.

benefits for active employees are provided by an insurance Total premiums amounted to $26.6 million, $24.3 million, company whose premiums are based on the benefits paid and $17.2 million for 1984,1983 and 1982, respectively.

during the year. The Company recognizes the cost of 9

1 14.SEGNEMIM0RNAINW Electric Gas Steam Total (Thousands of Dollars)

Operating revenues

$2,435,731

$462,966

$82,320

$2,981,017 Operating exynses, excluding depreciation 1,858,505 413,938 75,989 2,348,432 Depreciation 162,959 13,474 1,893 178,326 Totaloperating expenses 2,021,464 427,412 77,882 2,526,758 Operatingincome

$ 414,267

$ 35,554

$ 4,438

$ 454,259 Utility plant additions

$1,022,4%

$ 30,613

$ 135

$1,053,244 December 31:

Allocableassets Net unlity plant (*)

8,068,233 369,239 22,443 8,459,915 Inventories 116,775 32,572 1,189 150,536 Deferred energy costs 227,524 4,147 (1,776) 229,895

$8,412,532

$405,958

$21,856 8,840,346 Nonallocable assets 715,383 Totalassets

$9,555,729 1N3 Operating revenues

$2,107,897

$417,042

$71,111

$2,5%,050 Operating expenses, excluding depreciation 1,592,027 377,624 67,365 2,037,016 Depreciation 150,898 12,694 1,735 165,327 Totaloperating expenses 1,742,925 390,318 69,100 2,202,343 Operatingincome

$ 364,972

$ 26,724

$ 2,011

$ 393,707 Utility plant additions

$1,004,219

$ 26,020 82

$1,030,321 December 3I:

Allocable assets Net utility plant (*)

7,257,594 353,979 24,599 7,636,172 Inventories 98,391 32,350 343 131,084 Deferred energycosts 116,661 29,359 3,226 149,246

$7,472,646

$415,688

$28,168 7,916,502 Nonallocable assets 627,% 2 Totalassets

$8,544,464 1M2 Operating revenues

$2,180,960

$390,427

$73,366

$2,644,753 Operating expenses, excluding depreciation 1,688,365 354,093 69,720 2,112,178 Depreciation 130,225 11,916 1,707 143,848 Totaloperating expenses 1,818,590 366,009 71,427 2,256,026 Operatingincome

$ 362,370

$ 24,418

$ 1,939

$ 388,727 Utility plant additions

$ 843,371

$ 27,125

$ 219

$ 870,715 December 31:

Allocable assets Net utility plant (*)

6,393,223 335,036 26,473 6,754,732 Inventories 105,035 37,645 350 143,030

/

$6.498,258

$372.681

$26,823 6,897,762 Nonallocable assets 463,244 Totalassets

$7,361,006 l

(') includes construction work in progress, leased property and allocated common utihty property l

Years pnor to 1984 have been resuted to conform with SFAS 71-See Note #2 to finanoal sutements.

35 l

,/

1 Phdadelphh Electnc Company and Subsidiary Companies j

NotesDNnancialStatements(conmem

15. LEASES Leased property capitalized consists of the following at December 31,1984 and 1983:

1984 1983 (Thousands of Dollars)

Nuclear Fuel

$424,721

$409,540 Electric Plant 48,342 46,303 Common Plant 3,702 33.532 Gross Leased Property Capitalized 476,765 489,375 Accumulated Amortization (124,632)

(125,447)

Net Leased Property Capitalized

$352,133

$363,928 In accordance with SFAS 71, leased property capitalized is 1984, $19.0 million in 1983, and $19.3 million in 1982. In amortized commensurate with the amortization of the re-1984 and 1983 the Company sold magnesium oxide lated lease obligation. The nuclear fuel obligation is amor-regeneration facilities for approximately their net book ti:ed as the fuel is burned. Amortization ofleased property values of $55.9 and $37.7 million, respectively. The Com-capitalized totaled $39.1 million, $28.8 million, and $50.8 pany has use of these facilities under a tolling agreement million for the years ended December 31,1984,1983 and and a lease agreement. hiinimum future lease 1982, respectively. Other operating expenses also include payments as of December 31,1984 are:

interest on capital lease obligations of $22.0 million in Year Ending December 31 CapitalI cases Operating 1. cases Total (Thousands of Dollars) 1985

$102,985

$ 28,367

.$131,352 1986 97,788 27,565 125,353 1987 95,845 26,603 122,448 1988 83,854 24,102 107,956 1989 33,165 24,600 57,765 Remaining Years 35,477 122,291 157,768 Total hiinimum Future Lease Payments 449,114

$253,528

$702,642 Imputed Interest (rates ranging from 6.5% to 17%)

(96,981)

Present Value of Net hiinimum Future Lease Payments

$352,133 Rental expense under operating leases totaled $29.2 million, $19.3 million, and $15.8 million,in 1984,1983, and 1982, respectively.

16.nGCLEARFUEL NSPOSAL The Nuclear Waste Policy Act of 1982 requires the United escrow account and are invested for the funding of the lia-States Department of Energy (DOE) to assess utilities one bility related to pre April 7,1983 generation. This liability mill for each kilowatthour of electricity generated by a nu-is expected to be paid in 1985. The Company's liability for clear generating station after April 6,1983, and to make an its share of Peach Bottom and Salem's generation prior to equivalent assessment for such generation prior to April 7, April 7,1983 is approximately $61 million and full recov-1983, for the shipment and permanent disposal of fuel dis-ery in rates has been approved by the PUC. The liability for charged. Since hiay,1981, the Company has be:n charg-current generation is expensed as incurred and paid to the ing operations for such costs as permitted for rate making DOE quarterly.

purposes and such amounts have b,een deposited in an 17.lANEMCKGENERATINGSTATNW The Company has two nuclear units under construction at mercial operation. Prior to resuming construction of Unit Limerick, Pennsylvania. Unit No.1 is complete and is No. 2, the Company is required to submit a cost. benefit undergoing pre-commercial testing. A license has been assessment report to the PUC. Pursuant to an order en-issued by the Nuclear Regulatory Commission which tered August 7,1984, the PUC is investigating various permits testing and operation at power levels not to issues prior to resumption of construction of Unit No. 2 exceed 5 percent of full power.

(PUC investigation) and has directed the Company to dem-Construction of Unit No. 2, which is approximately 31%

onstrate that completion of Unit No. 2 is in the public inter-complete, has been suspended until Unit No.1 is in com-est. The issues to be addressed in the PUC investigation as a

4 include adequacy of reserve margins without Unit No. 2, which requires the PUC to compare the actual cost of other altematives to obtain power or decrease consumption, constructing an electric generating facility with the estimate the effect of the capital requirements necessary to complete submitted at the commencement of constmction. The law Unit No. 2 on the Company's financial health, remedies to provides that if the actual cost exceeds the estimated cost, guarantee cancellation of Unit No. 2 if its completion is the PUC must exclude the excess cost from the utility's rate found not to be in the public interest and a plan for induce-base unless the utility can show that some or all of the excess ments for timely and cost efficient completion if construc.

cost was necessary and proper. In 1974 the original esti-j tion of Unit No. 2 is found to be in the public interest. On mated cost of construction of the Umerick Generating Sta-December 3,1984, the Company presented its expert testi-tion was in the range of $1.7 to $2 billion. Estimates at earlier mony which concluded that completion of Unit No. 2 is in stages were significantly lower but the Company does not j

the public interest and represents the least cost alternative believe that such earlier estimates are applicable to deter-for meeting the future requirements ofits customers.

mine the excess cost applicable under the law. The Company This investigation is not expected to be completed before also believes the amounts invested in the Umerick Generat-Spring 1985.

ing Station are necessary and proper.

Operation of Umerick Unit No. I and Unit No. 2 requires an As of December 31,1984, the Company had invested adequate supply of supplementary cooling water. Construc-approximately $4.05 billion in the Umerick Generating tion of the pumping staticns, resevoir, pipeline, and related Station, $2.19 billion in Unit No.1, $792 million in Unit facilities which will transport supplementary cooling water No. 2 and $1.07 billion in common facilities. The Company from the Delaware River to the Umerick Units has been is accming AFUDC on its entire investment in Umerick.

suspended pending the final outcome oflitigation Part of the The Company believes its investment in Umerick will be re-facihties are to be constructed by the Company and other covered through rates charged to customers. If the PUC were portions are to be constructed by government agencies. The to disallow recovery of a portion of the costs of the Umerick Company is involved in the litigation to protect its interests facilities and its action was sustained after legal appeals, such in the facilities. Utigation to date has been favorable to the daallowed costs would be amortized to expense over the life Company's interests. Any delays in obtaining an adequate of the plant under present accounting practices. However, supply of supplementary cooling water could delay the undet preliminary proposals being considered by the Finan-scheduled dates of commercial operation (1985 for Unit No.

cial Accounting Standards Board, the Company might be I and 1990 for Unit No. 2), restnct the operating capacity required to charge any such disallowed costs to expense and increase the cost of the units.

immediately.

Recently, the Commonwealth of Pennsylvania enacted a law 18.CGMNITMBTSAN CNTINBCMS The Company has incurred substantial commitments in con-The Company is a member of an industry mutual insurame nection with its construction program. Construction ex-company which provides replacement power cost insurance penditures are estimated to be $766 million for 1985 and in the event of a major outage at a nuclear station. The

$2.6 billion for 1986-1988. These estimates are reviewed and premium for this coverage is subject to an assessment for revised periodically to reflect changes in economic condi-adverse loss experience. The Company's maximum share tions, revised load forecasts and other appropriate factors.

of anyassessment is $13 million.

Plant facilities under construction, particularly the Umerick The PUC is conducting several investigations invohing the Generating Station, require numerous permits and licenses, Company's management of major plant outages during 1983 which the Company cannot be assured will be issued at and 1984 and the resulting impact on energy costs recovera-completion of the facilities.

ble from customers under the electric energy cost rate. On The Price Anderson Act places a"Umit of Uability"of $620 October 7,1983, the PUC ordered the Company to show million on each licensed nuclear facility for claims that could cause why it should be pennitted to charge ratepayers for the arise from an incident involving any licensed nuclear facility incremental costs, if any, of replacing Salem Unit No. I gen-in the nation. The Company has insured for this exposure cration during outages that started in 1983. On March 20, through a combination of private insurance and indemnity 1984, the PUC also instituted an investigation of plant out.

agreements with the Nuclea-Regulatory Commission. In the ages occurring in 1983 and 1984 at Peach Bottom Units No.

event of such a nuclear incident the Company could be 2 and 3 and Eddystone Units No. I and 2. As a result of these assessed up to $13.5 million per incident with a maximum investigations, the PUC staff, consumer advocate and other amount of $27 million in any one year.

parties have claimed that recovery of between $100 and $113 The Company maintains property insurance, including ra-million of energy costs should be denied. The Company be-diation contamination coverage, for loss or damage to its nu-lieves its management of the aforementioned station outages clear facihties. Although it is impossible to detennine the was prudent and intends to vigorously contest the claims total amount of the loss that may result from an occurrence which have been asserted. Counselis of the opinion that the m hese facilities, the Company maintains the maximum Company has meritorious defenses in these matters. The amount ofinsurance i resently available, ($1.06 billion for Company believes it should not be precluded from recover-f each station). Under the terms of the various insurance ing the above costs and that it is remote that ultimate reso-agreements, the Company could be assessed up to $32 mil-lution of these matters will have a material adverse effect lion for losses incurred at any plants insured by the insur-on the results of operations or financial position of i

ance companies.

the Company.

37 r

Phdadelphia Electnc Company and Subsidiary Companies Notes C RnancialStatements fcontinuem 19.QUARTEnlYDATA (NAWTED)

The data shown below include all adjustments which the Company considers necessary for a fair presentation of such amounts.

l Operating Revenues Operating Income Net income Quarter Ended 1984 1983 1984 1983 1984 1983 (Thousandsof Dollars)

March 31

$818,031

$723,216

$128,942 $105,871

$134,838 $103,975 June 30 703,219 572,153 100,680 79,374 108,151 76,071 September 30 755,619 668,259 121,524 121,703 132,339 122,003 December 31 704,148 632,422 103,113 86,759 117,061 87.040 Earnings Apphcable Average Shares Earnings Per Average to Common Stock Outstanding Share Quarter Ended 1984 1983 1984 1983 1984 1983 (Thousandsof Dollars)

(Thousands)

(Dollars)

March 31

$115,451

$88,248 143,044 126,064 5.81

$.70 June 30 87,098 59,186 150,266 133,021

.58

.44 September 30 111,340 105,146 153,519 134,909

.73

.78 December 31 95,818 69.125 160,274 141,235

.60

.48 1983 fourth quarter results include the write-off of approximately $9.5 million (net of $10.1 million of related income taxes) of operating and maintenance costs of certain pollution control facilities which had been deferred during the first three quarters of 1983 pendmg a final determination by the PUC as to their recovery. Recovery was denied by the PUC on November 22,1983, at the conclusion of the Company's retail electric rate case.

20. SUPPLEMENTARY MFORMA UQW 70 DISCLOSE THE ESTMATED EFFECTS OFINFLATIQW FOR THE TEAR ENED DECEMBER 31,1984 (NAWTED)

The following supplementary information is supplied to effect ofinflation. Depreciation expense was determined by show the estimated effects of inflation under the " current applying the Company's depreciation rates to restated 1984 cost" method. The techniques required to develop this infor-average depreciable plant in senice. Other Operating Ex-mation are approximate and complex, and may not necessar.

penses were not required to be adjusted.

ily reflect the true effects ofinflation on the Company Under if the Company had to replace its entire utility plant at this existing regulatory law, the Company is permitted to recover time, the costs to do so would greatly exceed the original actual operating and capital costs incurred to serve cus-costs incurred when the facilities were built because of the tomers and a reasonable return on investment, and the Com-cumulative effect ofinflation. These plant replacement costs, pany belicves it will be allowed to recover cost increases net of accumulated depreciation, are estimated at $13.4 bil-caused by inflatiori as such increases are actually incurred.

lion. The effect ($489 million) of general inflation in 1984 on Effect ofinflation on Reported income.

net utility plant was greater than the increase ($192 million)

In adjusting the Consolidated Statements of income, as in 5Pecific Prices by $297 million.

shown below, only depreciation expense was adjusted for the Consolidated Statements ofincome Adjustedfor injiationfor the Year Ended December 31,1984 As Adjusted As Reported (Average 1984 Dollars)

(Thousands of Dollars, except per share amounts)

Operating Revenues

$2,081.017

$2 o81.017 Depreciation 178,326 474,371 Other Operating Expenses 2,348,432 2.348,432 OperatingIncome 454,259 158.214 Otherincome 251,147 251,147 income Before Interest Charges and Preferred Stock Dividends 705,406 409.361 Interest Charges and Preferred Stock Dividends 295.699 295,699 Eamings Applicable to Common Stock

$ 409,707

$ 113,662 Eamings Per Average Share 2.70

.75 l

3

Adjustment ofSelected Fiw Year Financial Information.

In order to reflect the impact of general inflation on selected financial information for each of the years 1980 through 1984, the following table shows actual data compared with data adjusted to 1984 dollars.

Five YearSummary ofSelected Financial Infonnation and Current Cost Data (Thousands of Dollars, except per share amounts) 1984 1983 1982 1981 1980 Dewlopment ofAdjustment Factors Consumer Price Index Average DuringYear 311.1 298.4 289.1 272.4 246.8 Year End 315.5 303.5 292.4 281.5 258.4 Consumer Price Index Multiplier A = Average (311.1 + Index) 1.00 1.04 1.08 1.14 1.26 B = Year End (315.5 + 1ndex) 1.00 1.04 1.08 1.12 1.22 Actual and Adjusted Elistorical Financial Infonnation Disidends Per Common Share Actual Paid

$2.20

$2.12

$2.06

$1.90

$1.80 Adjusted (Actualx A)

$2.20

$2.22

$2.17

$2.27 Market Price Per Common Share Actualyear End

$14.87

$14.38

$17.00

$13.63

$12.50 Adjusted (Actual x B)

$14.87

$14.%

$18.36

$15.27

$15.25 Operating Revenues Actual

$2,981,017

$2,5%,050

$2,644,753

$2,433,425

$2,123,394 Adjusted (Actual x A)

$2,981,017

$2,699,892

$2,856,333

$2,774,105

$2,675,476 Earnings Applicable to Common Stock Actual

$409,707

$321,705

$278,623

$223,761

$174,950 Adjusted (Actual x A)

$409,707

$334,573

$300,913

$255,088

$220,437 Earnings per Average Common Share Actual

$2.70

$2.40

$2.39

$2.25

$2.00 Adjusted (Actual x A)

$2.70

$2.50

$2.58

$2.57

$2.52 Common Shareholders' Equity ActualYear End

$2,890,975

$2,569,323

$2.254,435

$1,963,527

$1,733,614 Adjusted (Actualx B)

$2,890,975

$2,672,096

$2,434,790

$2,199,150

$2,115,009 Current Cost Data Excess of increase in General inflation over increase in Specific Prices on Utility Plant Cost Actual Current Cost

$2%,690

$147,379

$ (9,011)

$186,585

$185,922 Adjusted (Actual x A)

$2%,690

$153,274

$ (9,732)

$212,707

$234,262 Purchasing Power Gain on Net Amounts Owed ActualCurrent Cost

$190,521

$165,235

$148.672

$307,972

$387,110 Adjusted (Actual x A)

$190,521

$171,844

$160,566

$351,088

$487,759 Earnings Applicable to Common Stock Actual Current Cost

$113,662 5 51,049 5 48,471

$ 23.044

$ (2,103)

Adjusted (Actual x A)

$113,662

$ 53,091 5 52,349

$ 26.270

$ (2,650)

Earnings per Average Common Share Actual Current Cost

$0.75

$0.38

$0.42

$0.23

$(0.02)

Adjusted (Actual x A)

$0.75

$0.40

$0.45

$0.26

$(0 03) e 39

Phdadelphia Electrh Company and Subsidiary Companies FinancialStatistics SNMM4T8FEMWs(MillionsofDollars)

For the Year Ended 1984 1983 1982 1981 1980 1979 1974 Operating Revenues (for details see pages 42and 43) 52,981.0

$2,596 0

$2,644.8

$2,433.4

$2,123.4

$1,578.5

$1,011.7 OperatingExpenses Fueland Energy Interchange 1,122.2 986.6 1,128.5 1,187.6 1,090.5 661.7 439.2 labor 345.3 317.2 291.1 256.8 232.1 209.3 134.0 Other Materials,5upplies and Services 427.3 354.6 320.5 260.9 184.5 155.4 73.4 TotalOperation and Maintenance 1,894.8 1,658.4 1,740.1 1,705.3 1,507.1 1,026.4 646.6 Depreciation 178.3 165.3 143.8 130.3 122.9 120.6 77.8 Taxes 453.6 378.6 372.2 274.8 227.4 185.7 134.3

_TotalOperating Expenses 2,526.7 2,202.3 2,256.1 2,110.4 1,857.4 1,332.7 858.7 Open.ringincome 454.3 393.7 388.7 323.0 266.0 245.8 153.0 OtherIncome Allowance for Other Funds Used During Construction 134.5 108.1 65.7 65.0 50.5 46.0 25.3 Income Tax Credits, Net 116.4 87.9 75.8 63.2 49.0 33.9 25.5 Other, Net

.2 (3.1)

(0.7) 2.5 3.4 1.7 0.3 TotalotherIncome 251.1 192.9 140.8 130.7 102.9 81.6 51.1 income Beforcinterest Charges 705.4 586.6 529.5 453.7 368.9 327.4 204.1 Interest Charges I.ong-Term Debt 402.5 330.2 308.9 266.7 225.0 193.0 106.3 Short-Term Debt 30.9 35.2 32.0 33.2 13.9 7.3 14.2 Allowance for Borrowed Funds Used During Construction (220.4)

(167.9)

(147.6)

(123.8)

(97.1)

(67.4)

(45.5)

NetInterest Charges 213.0 197.5 193.3 176.1 141.8 132.9 75.0 Netincome 492.4 389.1 336.2 277.6 227.1 194.5 129.1 PrefenedStock Dividends 82.7 67.4 57.6 53.8 52.2 44.8 33.7 Farnings Applicahic to Common Stock 409.7 321.7 278.6 223.8 174.9 149.7 95.4 Drvulends on Common Stock 334.3 283.6 240.5 189.5 157.4 145.0 86.4 Farnings Retained

$75.4

$38.1

$34.3

$17.5

$4.7

$9.0 Earnings PerAverage Common Share (Dollars)

$2.70

$2.40

$2.39

$2.25

$2.00

$1.86

$1.81 Dividends per Common Share (Dollars)

$2.20

$2.12

$2.06

$1.90

$1.80

$1.64 Common Stock Equity (PerShare)

$17.81

$17.99

$17.93

$18.10

$18.72

$19.06

$20 21 AwrageShares ofCommonStock Outstanding (Millions) 151.8 133.9 116.5 99.6 87.3 80.5 52.7 Jiatings on Philadelphia Elactric Company's Securities Mortgage Bonds Debentures Preferred Stock Agency Raung Date Estabhshed Raung Date Establahed Raung Date Established Duff and Phelps,Inc.

9 3/80 10 3/80 11 2/83 Fitch investors Service BBB 9/82 BBB-9/82 BB +

9/82 Moody's Investors Service Baa3 1/83 Bal 1/83 bal 1/83 Standard and Poor's Corporation BBB-932 BB +

9/82 BB 9,82 40

SinmMRY WMEANCML CNWTN Mlbas of Dollars)

Em i,31 1984 1983 1981 1981 1980 1979 1974 Assets UtilityPlant,atoriginalcost

$9,834.1

$8,864.2

$7,905.7

$7,044.7

$6,415.7

$5,885.5

$4,123.9 1.ess: Accumulated Depreciation 1,726.3 1,592.0 1,450.1 1,330.6 1,235.7 1,144.1 717.8 Leased Property. net 352.1 364.0 299.1 270.0 139.3 116.0 92.3 Net Utility Plant 8,459.9 7,636.2 6,754.7 5,984.1 5,319.3 4,857.4 3,498.4 Investments 80.9 99.4 91.4 77.8 58.7 47.4 12.7 CurrentAssets Cash and TemporaryCash Investments 30.4 57.2 50.0 30.7 6.7 10.6 16.0 Escrow Deposits 88.1 8.0 Accounts Receivable 384.2 338.6 342.2 342.4 300.3 230.9 130.0 inventories 150.5 131.1 143.0 132.2 121.1 110.0 72.5 Deferred Energy Costs 229.9 149.3 (85.4)

(31.3) 11.0 83.5 21.7 Other 48.9 44.3 40.2 35.1 31 8 27.7 18.3 DeferredDebits 82.9 80.4 24.9 31.5 18.5 12.9 6.0 Total

$9,555.7

$8,544.5

$7,361.0

$6.602.5

$5,867.4

$5,380.4

$3,775.6 Capitalization andLiabilitics Common Stock

$2,361.0

$2,110.5

$1,826.2

$1,572.4

$1,377.4

$1,239.6

$ 782.9 Other Paid-in Capital 6.7 5.9 4.6 3.9 2.6 2.2 1.3 Retained Earnings 523.3 452.9 423.6 387.2 353.6 338.2 293.7 Common Shareholders' Equity 2,891.0 2,569.3 2,254.4 1,%3.5 1,733.6 1,580.0 1,077.9 Preferred Stock Without Mandatory Redemption 572.5 522.5 372.5 372.5 372.5 372.5 307.5 With Mandatory Redemption 326.2 284.9 292.3 266.9 274.3 206.8 178.9 1.ong-Term Debt 3,778.0 3,381.8 3,028.5 2.745.7 2,371.9 2,241.9 1,597.7 TotalCapitalization 7,567.7 6,758.5 5,947.7 5,348.6 4,752.3 4,401.2 3,162.0 Current Liabilities Short-Term Debt 260.0 267.5 64.7 54.2 52.6 85.2 177.9 Current Maturities oflong-Term Debt 50.4 21.3 36.1 130.8 127.8 91.9 Lease obligations due within one year 68.3 61.5 32.5 53.9 18.5 18.1 10.3 Accounts Payable and Dividends Declared 200.1 179.9 188.5 188.9 187.6 133.5 78.8 Taxes Accrued and Deferred 158.0 102.3 22.6 51.4 77.8 65.1 28.0 InterestAccrued 91.1 91.8 99.8 82.3 64.9 58.1 30.5 Other 127.2 54.1 24.7 18.1 17.4 13.9 3.9 Deferred Credits and Other Liabilities Obligations Under Capitalleases

'283.8 302.5 266.6 216.1 120.8 97.9 82.0 Other 749.1 726.4 692.6 552.9 444.7 379.6 110.3 Total

$9,555.7

$8,544.5

$7,361.0

$6,602.5

$5,867.4

$5,380.4

$3,775.6 Years pnor to 1984 have been restated to conform with 5FAS 71-See Note #2 to Imancial statements.

o 41

Ntadelph1 Electric Company and Subsidiary Companies operatingStatistics BECTREOPERATIONS 1984 1983 1982 1%1 1980 1979 1974 Output (hfillions ofKilowatthours)

Steam 11,085 10,457 8,598 9,931 11,234 11,279 16,649 Nuclear 6,462 5,520 10,743 7,464 7,333 7,104 1,745 Hydraulic 2,085 1,739 1,581 1,397 1,240 2,155 1,938 Pumped Storage Output 1,100 979 1,126 1,101 1,050 1,270 1,075 Pumped Storage input (1,579)

(1,427)

(1,665)

(1,624)

(1,526)

(1,847)

(1,515)

Purchase and Net interchange 11,975 12,181 11,120 11,173 9,973 9,180 5,300 Internal Combustion 425 491 178 283 442 454 1,200 Other 528 1,016 TotalElectric output 31,553 19,940 31,681 30,253 29,746 29.595 27,408 Sales (htillions ofKilowatthours)

Residential 8,515 8,467 7,877 8,014 8.341 7,968 7,159 Small Commercialand industrial 3,543 3,284 3,142 3,115 3,%5 2,928 2,558 large Commercialand Industrial 14,881 14,478 14,178 14,916 15,056 15,428 14,622 AllOther 1,061 1,003 1,012 1,005 1,159 1,277 1,217 ServiceTerritory 28,000 27,232 26,209 27,050 27,621 27,601 25,556 Jersey Central Power and l_ight (Salem #2) 1,395 346 3,352 1,218 Total Electric 5 ales 29,395 27,578 29,561 28.268 27,621 27,601 25,556 NumberofCustomers, December 31 Residential 1,230,883 1,217,635 1,206,944 1,200,238 1,190,312 1,173,514 1,113,036 SmallCommercialand Industrial 121,676 119,292 118,407 117,016 116,808 115,724 117,237 Large Commercialand Industrial 5,100 5,437 5,616 5,790 5,820 5,798 5,724 AllOther 751 751 762 746 736 1,919 2,248 TotalElectric Customers 1,358,410 1,343,115 1,331,729 1,323,790 1.313,676 1,2%,955 1,238,245 Operating Rewnues (htillions ofDollars)

Residential

$854.9

$744.0

$694.4

$643.7

$607.8

$461.0

$314.4 SmallCommercialand Industrial 360.2 316.6 310.6 285.9 249.8 189.0 122.0 1.arge Commercialand Industrial 1,008.5 877.4 922.3 917.1 813.9 587.4 388i AllOther 145.1 139.4 118.3 109.5 95.4 74.5 M0 ServiceTerritory 2,368.7 2,077.4 2,045.6 1,956.2 1,766.9 1,311.9 8/3.5 Jersey Central Power & Light (Salem #2) 67.0 30.5 135.4 45.9 TotalElectric Rewnues

$2,435.7

$2,107.9

$2,181.0

$2,002.1

$1,766.9

$1.311.9

$873.5 Operating Expenses (htillions of Dollars)

Operating expenses excluding depreciation

$1,858.5

$1,592.0

$1,688.4

$1,586.5

$1,414.0

$975 +

$669.6 Depreciation 163.0 150.9 130.2 117.3 111.1 110.0 68.4 TotalOperatingErpenses

$2,021.5

$1,742.9

$1,818.6

$1,703.8

$1,525.1

$1,085.4

$738.0 Electric Operatingincome (hfillions ofDollars)

$414.2

$365.0

$362.4

$298.3

$241.8

$226.5

$135.5 Average Use per Residential Customer (kilowatthours)

Without Electric Heating 6,160 6,319 5,875 6,022 6,411 6,227 6,154 With Electric Heating 17,293 16,523 16,813 18,054 19,482 20,760 22,140 Total 6,960 6,990 6,544 6,699 7,058 6.829 6,460 Electric Peak 1. cad, Demand (thousands of kws) 5,925 5,879 5.691 5,731 6,095 5,641 5,431 Net Electric Generating Capacity-Year lnd Summer rating (thousands of kws) 7,765 7,974 8,006 8,006 7,698 7,727 7,808 Cost of Fuelper hhllion Bru

$2.22

$2.25

$1.57

$2.10

$1.90

$1.55

$1.42 Btu per Net Kilowatthour Generated 10,920 10,906 10,918 10,930 10,787 10,810 10,676 n

SAfSPfitAT30NS 1984 1983 1982 1981 1980 1979 1974 Sales (hIillions ofCubicFeet)

Residential

!.941 2,168 2,442 2,446 2,461 2,327 2,281 House Heating 25,429 22,981 24,237 24,675 23,671 23,593 23,793 Commercialand industrial 41,145 39,043 41,660 45,670 42,890 37,452 35,913 AllOther 1,282 672 422 127 92 93 79 TotalGes Seles 69,797 64,864 68,761 72,918 69,114 63,465 62,066 NunderofCustomers, December 31 Residential 70,794 72,501 76,638 78,426 81,346 85,315 90,870 House Heating 211,984 206,443 198,910 193,038 182,246 168,905 163,093 Commercialand Industrial 23,442 22.810 22,324 21,578 20,197 19,065 20,276 TotalGas Custoners 306,220 301,754 297,872 293,042 283,789 273,285 274,239 Operating Rcwnues (hfillions ofDollars)

Residential

$19.0

$19.1

$18.1

$15.4

$14.0

$10.7

$7.1 l

House Heating 191,7 165.8 147.1 128.5 108.5 91.2 '

55.4 Commercialand industrial 243.7 227.3 221.1 209.7 166.7 118.4 45.7 AllOther 5.6 3.0 1.8 0.5 0.3 0.2 0.1 Subtotal

$460.0

$415.2

$388.1

$354.1

$289.5

$220.5

$103.3 Other Revenues 3.0 1.8 2.3 2.3 1.2 0.6 0.6 TotalGas Rewnues

$463.0

$417.0

$390.4

$356.4

$290.7

$221.1

$105 Operating Expenses (hfillions ofDollars)

Operatingexpensesexcludingdepreciation $413.9

$377.6

$354.1

$322.0

$258.0

$194.4

$82.2 Depreciation 13.5 12.7 11.9 11.3 10.2 8.9 8.1 TotalOperating Erpenses

$427,4

$390.3

$366.0

$333.3

$268.2

$203.3

$ 90.3 Gas Operatingincome (Afillions ofDollars)

$35.6

$26.7

$24.4

$23.1

$22.5

$17.8

$18.6 STEAAf0PEMDOWS Sales (Afillions ofPounds) 4,735 4,552 5,086 5,484 6,044 6,581 7,600 NumberofCustomers, December 31 540 545 571 593 618 638 710 Operating Rcwnpes (Afillions ofDollars)

$82.3

$71.1

$73.4

$74.9

$65.8

$45.5

$29.3 Operating Expenses (kfillions of Dollars)

Operating expenses excluding depreciation $76.0

$67.4

$69.8

$71.6

$62.4

$42.3

$29.1 Depreciation 1.9 1.7 1.7 1.7 1.7 1.7 1.3 TotalOperating Expenses

$77.9

$69.1

$71.5

$73.3

$64.1

$44.0

$30.4 Steam Operatingincome (Afillions ofDollars)

$4.4

$2.0

$1.9

$1.6

$1.7

$1.5

$(1.1)

,. ~ ~

m -

r m

.o w.

3 i

E 40 i

M 81 0

83 84 M

el G

83 84

& SakmUmtNo.2Saks o

Phdadelphia Electnc Company and Subsidiary Companies ShotpholderInformnNon Stock Exchange Listings 7326. From within Pennsylvania dial 1-800-242-7326. local Most PE securities are listed on the New York Stock Ex-Philadelphia calls should be made to 841-5795.

change and the Philadelphia Stock Exchange. Philadelphia A""MalMeeting Electric Power Company debentures are listed on the Phila-The Annual Meeting of the Shareholders of the Company delphia Stock Exchange.

will be held on Apnl 10,1985, at 10:30 A M. at the Wyndham Franklin Pla:a Hotel,17th & Race Streets, gg The Company has paid dividends on its common stock con-fo ffn s ck shareholders of record at the c tinually since 1902. The Board of Directors normally consid-ness on March 1,1985, are entitled to vote at this meeting.

ers m s oc di ds for payment m March, June' Notice of the meeting. proxy statement, and proxy will be mailed under separate cover. Prompt retum of the proxies The Company estimates that 66% of the $2.20 per share divi-willbe appreciated.

dend paid to common shareholders in 1984 represents a re-tum of capital which is not taxable as dividend income for Form 10 K Federalincome tax purposes. All dividends on preferred Form 10 K, the annual report filed with the Securities and stock are taxable.

Exchange Commission, is available, without charge, to shareholders upon written request to Philadelphia Electric Dividend Reinwstment and Stock Purchase Plan Company,2301 Market Street, PO. Box 8699, Philadelphia, Shareholders may use their dividends to purchase additional PA 19101, Attn: Financial Disision.

shares of common stock through the Company's Dividend Shareholders Reinvestment and Stock Purchase Plan. Philadelphia Electric pays all brokerage and senice fees.

The Company has 300,856 shareholders of record of com-Customers of the Company who are not shareholders may mon stock,a 21% increase in 5 years.

enrollin the plan by making a one-time purchase of com-TransferAgents and Registrars mon stock directly from the Company.

PilllADELPHIA EECTRIC COMPANT-All shareholders have the opportunity to invest additional Preferred and Common Stocks funds in common stock of the Company,whether or not Registrars:

Mellon Bank (East) N.A., Four Mellon they have their dividends reinvested - also with all fees borne Bank Center, by the Company.

Philadelphia,PA 19102 The Plan also enables chgible participants in the Plan to elect Morgan Guaranty Trust Co.of NT, to defer Federalincome tax on up to $750 ($1,500 forjoint 30 W. Broadway, NY, NY 10015 returns) of reinvested dividends per year as provided by the Transfer Agents:

Philadelphia Electric Company, Economic Recovery Tax Act of 1981.

2301 Market St., Phila., PA 19101 Over 33% of the Company s common shareholders are par-ticipants. In 1984, they invested more that $95 million Morgan Guaranty Trust Co. of NY, through the Plan, including cash payments. Information 30 W. Broadway, NY, NY 10015 conceming this Plan may be obtained from M.W. Rimerman, PHILADELPHIA EECTRIC COMPANY-Treasurer, Philadelphia Electric Company,2301 Market First and Refundmg Mortgage Bonds Street, P.O. Box 8699, Philadelphia, PA 19101.

Trustee:

Fidelity Bank N.A., Broad & Walnut Sts.,

Phila.,PA 19109 Comments Welcomed New York Agent: Morgan Guaranty Trust Co. of NY, The Company always is pleased to answer questions and 30 W. Broadway, NY, NY 10015 provide information Please address your comments to Mrs.

L S. Binder, Secretary, Philadelphia Electric Company,2301 PHILADELPHIA EECTRIC COMPANY-Debentures Market Street, PO. Box 8699, Philadelphia, PA19101.

PHILADELPHIA EECTRIC POWER COMPANY Inquiries relating to shareholder accounting records, stock (A Subsidiary)-Debentures transfer and change of address should be directed to Phila-Trustee:

The Philadelphia National Bank, Broad delphia Electric Company,2301 Market Street, PO. Box

& Chestnut Sts., Phila, PA 19101 8699, Philadelphia, PA 19101, Attn: Stock Transfer Section.

New York Agent: Ining Tmst Co.,One Wall Street, Toll-Free Telephone Line Toll free telephone lines are available to the Company's GeneralOgice shareholders for inquiries conceming their stock ownership.

2301 Market Street, PO. Box 8699, Phila., PA 19101.

When calling from outside Pennsylvania, dial 1800 223 (215)841 4000.

TSE-Camposife Commen Stock Prfces, Estnisps and DMdesds er Guerfors (Per Shore) 1984 1983 Fourth Third Second first Fourth Third Second brst Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter High Price

$15%

$13%

$14%

$16

$18%

$17%

$18V.

$18 low Price

$12%

$9

$11%

$14

$13%

$15%

$16%

Eamings 60(

73C 58(

81C 48(

78(

44c 70(

Disidends 55C 554 55C 55c 53e 53C 53C 53(

44 9

t Oltsetojs

.... = _ -

> Officers a.-_--

t John H. Austin,Jr.

y-_

.--w.---~-..-

James L Everett Philip G. Mulligan

}

President and ChiefOperating Oficer Chairman oftheBoard Vice President oftheCompany andChiefExecutiveOjiur Gas Operations I

William T. Coleman,Jr., Esq.

John H. Austin,Jr.

Joseph E Paquette,Jr.

I SeniorPartnerofthelawfirm President and ChiefOperating Ogicer Vice President i

of 0Melveny &Myers Vincent 5. Boyer Finance and Accounting M. Walter D'Alessio SeniorVice President A. Lewis Parry,Jr.

President and ChiefExecutive Oficer NuclearPower Vice President Latimer & Buck,Inc.

Edward G.Bauer,Jr.

PurchasingandGeneralServices i

(Mortgage BankingandRealEstate Vice President and Lucy 5. Binder Development)

GeneralCounsel Secretary James L Everett Chiford Brenner Morton W. Rimerman Chairman ofthe Board Vice President Treasurer andChiefExecutiveOficer Corporate Communications

'I'""P""I James D. Lynch Thomas W.Coppock Assistant Secretary William S. Fishman Vice President J RobertC Chairman of the Executive Committee Electric Transmission Assistant Treasurer ARA Services, Inc. (Service Management) andDistribution Robert E Gilkeson

^

Shields L Daltroff A3)j t, Chairman ofthe Executive Committee Vice President William W. Hagerty Electric Production William M. lennox,Jr.

Retired President, Dreral L'niversi'J Charles L Fritz Robert D. Harrison Vice President Vice Chairman PersonnelandIndustrialRelations John Wanamaker, Philadelphia Raymond E Holman

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(Merchandising)

Vice President Paul R. Kaiser GeneralAdministration l

Chairman Emeritus John 5. Kemper g'

Tasty Baking Company Vice President t

(DiversifiedManufacturing)

Engineeringand Researth h

JoseP C.ladd William B. Morlok Chairman andChiefExecutiveODica Vice President

Fidelity Mutual Life Insurance Company CommercialOperations EditheJ. Levit, M.D.

President and ChiefExecutive Oficer NationalBoardofMedicalExaminers I

h 305eP J.McLaughlin President andChiefExecutiveOfuer Management Change:

BeneficialMutualSavings Bank OnJune 25,1984, A. Irwis Parry,Jr. was elected Vice President, Purchasing and General Services, succeedmg Clair V.

. Member of the Executive Committee Myers,who retired September 1,1984.

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