ML20126G916
| ML20126G916 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 03/13/1981 |
| From: | Rogers J OHIO EDISON CO. |
| To: | |
| Shared Package | |
| ML20126G913 | List: |
| References | |
| NUDOCS 8104020377 | |
| Download: ML20126G916 (43) | |
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) M 4) , , - Ohio Edison 1980 Annual Report
Ohio Edison Table of Company and Contents t Subsidiary , I l 1 l Continuing Commitment i / Ohio Ec'ison's 50th anniversary last , year provided us an opportunity to Page Ohio Edison Company, with recall the many ways electricity has Ohio Edison Company and , headquarters at Akron, Ohio, improved people's lives over the Subsidiary .2 , provides electric service to about years. Ever since the incandescent Financial Highlights , . .3 l 834.000 customers in an area of light bulb replaced the kerosene Year in Review , . . 4, 5 approximately 7,500 square miles in lamp. electricity has grown in Financial Performance , , .6 central and northeastern Ohio. The importance-so much so that it has Electric Rates . .. . . .9 Company's wholly owned subsidiary, become an indispensable ingredient System Operations . . . 10 Pennsylvania Power Company, with in every segment of today's society. Financing .. ... .13,14 , l headquarters at New Castle, People at Ohio Edision are proud of Power Supply Planning .14,15 Pennsylvania, provides electric our past achievements, and we will Fuel Supplies . . . . .15 service to about 123,000 customers continue our commitment of meeting Environmental Activities . . .17 in an area of approximately 1,500 customers'ever-changing and growing Management Changes / Employees .18 square miles in western Pennsylvania. need for electricity. Company Officers . .20 Other Officers! Division Managers / i Board of Directors . . . . 21 gg Management Report . . .22 w @! Selected Financial Data . .23
) ....,.# , M..i c.h Management's Discussion . .24
.T98 k-... _ wig ? MW Consolidated Financial
$]$[pf WMb Q !$MM Statements . , .. .25 31 l
y QM%@g Notes to Consolidated Financial Statements . .32 40 gg' ', &MC %.4 .. oQ'[
- ll Auditors' Report ... . . 40
., ? 3 Consolidated Financial Statistics .41 g
4 ..Dg ~. g rA. Consolidated Operating Statistics . 42 Stockholder Information . . .43 ABOUT THE COVER: View from underneath l < the 950 foot chimney for Units 1 and 2 at the g-~,,,.,,. Bruce Mansfield Plant. The Planrs third coak
'MQT f fired unit was placed in commercial operation in september,1980.
l l w l sERYlCE TERRITORY l OHIO EDISON COMPANY l and Pennsylvania Power Company Construction repairmen install grounding cable in the Cuuhoga River Valley near the Gorge Plant in Akron. l l 2
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Yearin The year 1980 was one of tough decisions and important accom-of the $128.4 million requested. While we were successful in Rev.iew plishment, for the Companies. It obtaining other rate increases later in was a year in which we achieved a 1980 and in February,1981, the rates marked improvement in power p!arit approved by the Ohio and performance, eased our financial Pennsylvania regulatory commissions burden, resolved complex fell short of what was needed to I environmental and legal matters, offset the effects of inflation and negotiated a long-term, no-strike mounting environmental costs. We agreement with plant employees, were granted a total of $101.2 initiated innovative financing mi!! ion, ca 75 percent, of the $135.7
, programs and ended our involvement million applied for in rate increase
- in the unpro% table stemn-heating m applications filed with the regulatory
.- w business in A!:on and Youngstown. commissions last year.
? ,, However, the benefits we derived A $10.6 million interim rate increase ;
from these achievements ware nc,t
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- E affrting the 21 Ohio municipal elec-fully realized because of last year's tric systems we serve at wholesale
~, + : , adverse economic cond tions. The became effective January 10,1981.
l s ,. ; effects of inflation and high interest This interim increase, which is subject
-w rates coupled with a 9.4 percent drop to refund,is part of the $13.9 million
,, in kilowatt hour sales to industrial we originally sought in an application
- cunomers were largely responsible filed with the Federal Energy Regula-
'I for the 15.6 percent decrease in earn- tory Commission on June 10,1980.
ings per share of common stock in Public hearings to consider the full l 1980. Earnings per share for the year amount of our request are scheduled ' were $1.52 compared to $1.80 in 197% to begin in May. Even though earnings per share in 1980 were below our goal and less Power Plant reformance Continues to improve l than the current annual dividend ($1.76 per share), your Board of it is a pleasure to report that we 4 Directors, utilizing $16.7 million in exceeded our objective.of achieving
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I . retained earnings, was able to declare an equivalent generating unit avail-an unchanged quarterly dividend of ability of 71 percent in 1980 with a
. . 44C per share of common stock for 72.1 percent rating, improving upon r
- each quarter of 1980. the 65 percent availability we aver-aged in 1979. Overall, we realized New Rates Approved better operating results at all our
) On March 4,1981, we filed an power plants last year-an accom-application with The Public Utilities plishment which is properly a source Commission of Ohio (PUCO) seeking of pride to the employees involved.
a $139.2 million rate increase. A final We also achieved a 21 percent Justin T. Rogers. Jr. ruling by the PUCO on this proposed reduction in the amount of power . rate increase k not expected until received from other companies late 1981 or early 1982. compared to 1979. At the same time, You will recall that on January 30, our delive ies of power to other 1980, the PUCO granted the companies increased 38 percent. Company an additional $25.4 million Contributing to these achievements of the $128.4 million permanent rate was the joining of employee and increase request we filed for in Apni, management efforts at the W. H. l 1979. The Commission in May,1979, Sammis Plant. which represents 36 granted us an $86.2 million emer. percent of our total generating gency rate increase pending their capacity. These efforts included final decision in the case. The total reo",anizing the Plant into two sub-increase amounted to $111.6 million plants-four generating units in one, 1 4
three in 't he other. By dividing the mal Corporation. Also, we received and will assign low priority to non- - Plant, we were able to place greater approval from the PUCO to phase out compliance penalties. The latter emphasis on planning and mainte- steam service for our last few custo- could involve millions of dollars. nance to reduce costly downtime and mers in Springfield by May,1981. We also agreed to operate the
' mprove i unit availability. Sammis Plant's three largest units in September,1980, the third and Innovative Financm.g under a reduced particulate emission final coal-fired generating unit at the Programs initiated rate for 10 years and install air
$1.3 billion Bruce Mansfield Plant was in fulfilling our obligations to meet pollution monitors on a number of placed in commercial operation and customer needs for electricity, we generating units in our system.
has performed well. We own 50.7 spent more than $5d million last A favorable settlement was reached percent, or 1,196 megawatts, of the year oa system improvements and earlier in 1980 resulting M our total generating capacit/ of het Plant, power plant construction. Through dismissal from legal p'oceedings in an which is jointly owned by N five 1985, system improvements and antitrust case brought by the city of companies comprising the Central Area additions will amount to about $2.7 Cleveland against the CAPCO Group. Power Conrdinnion Group (CAPCO). billion, with approximately $518 The $327 million lawsuit alleged, in million of that amount earmarked for part, that the CAPCO companies
'No-Strike, Agreement Negotiated environmental projects. violated the Sherman and Clayton We were successful in negotiating However. high interest rates and a Acts to the detriment of the new two year agreements with union- tight money market have made it operation of the city's municipal '
represented employees which included increasin;;ly difficult to raise the electric plant. improved benefits and wage increases capital required to meet these needs. The agreement, which in no way that satisfied federal wage guidelines. In an innovative response to these conceded any liability, included The agreement with Edisor obligations, we established the Ohio providing the Cleveland system our employees represented by .ility Edison Energy Trust to finance a engineering expertise over a two-year Workers Union of America at .ur of portion of our share of the cost for period and a cash payment of our largest power plants contains a Beaver Valley Unit 2 and completed $ 500,000, in doing so, we eliminated provision unique to the eiectric utihty negotiations which will make our unnecessary involvement in a industry-it provides the means for European money available to us. lengthy, comphcated and extremely settling the next three labor agree- Together, these new sources of wstly trial Moreover, we avoided a ments without the threat of strikes. funding make available up to $530 burdensome expense to our custo-million in financing. mers and to you, oui stockholders. Major Cost Savings Achieved As reported to you last year, the Favorable Settlements Reached Groundwork Laid - CAPCO companies agreeri *o We settled, in the past year, !ong- for Future Progress terminate construction ot !wr standing environmental cases which While there's no denying that the nuclear generating units in northern threatened to impose heavy fines and challenges ahead will be no easier Ohio, the estimated cost of which penalties on the Company. than the ones we experienced this was $7.3 billion, with $3.1 billion of The most critical cases involved past year, I believe our achievements that amount representing our share. suits filed by the Justice Department in 1980 have placed us in a stronger We also delayed, for up to three on behalf of the U.S. Environmental position to improve our financial , years, three CAPCO nuclear units Protection Agency (EPA) over alleged condition and performance. I am now under construction which are particulate emission excesses primarily optimistic that the proven perform- - scheduled to he operational in the from the Sammis Plant and also other ance of our people and the support mid- to latc . plants in Ohio. In December.1980, of our stockholders and customers We eliminated continuing operating aftet nearly four years of nego- will enable us to attain those goals. losses that in 1979 alone totaled tiat:ons, a tentative agreement was nearly $2 million bv selling two of reached in which we will pay a civil the Company's tb steam-heating penalty amounting to r.early $1 A g i g systems. In Septer < . 1980, the city of Akron assumed ownership of our rnillion, considerably less than the
$35 million the Agency originally QL T /% _ .,
i s downtown steam-heating system, and sought. And, as long as we comply - V ,A an order issued by the PUCO allowed with the two consent orders we Justin T. Rogers, Jr. us to sell our downtown Youngstown signed, the EPA will not enforce President steam system to the Youngstown Ther- actions relating to other civil penalties i March 11 1981, Akron, Ohio
finanCial ' percent, fr m $968.7 million in 1979 } mainly from increases in the cost of to $1.1 bdhon in 1980. This increase ! labor, materials, services and an Performance was due primanly to rate increases ' intensified preventive maintenance which became effective dunng the program at our power plants. year and through fuel adjustment clause recoveries which reflecteo Interest and Da.vi.dends increases in the cost of coal and Interest and other charges increased other fuels in 1980. 28.4 percent to $131.1 million in 1980,
. compared to $102.1 mdlion in 19N, Operating Expenses due to increased long-term debt Operating expenses for the year .
totaled $774.7 milhon-an increase or ! outstanding and abnormally high interest rates. as well as dividends Electric Sales and Revenues
$5* "' '7 P**" **' Pdid " ' "** **"*5 I P '*f*"*d 1979. l stock issued by Pennsylvania Power Ohio Edison and Pennsylvania Fuel costs continued to be the j in April,1980.
Power customers used approximately major expense item, accounung for Preferred and preference stock 22.4 bdlion kiSwatt hours of 34 cents out of every revenue dollar ' dividends were $33.7 mdlion in 1980, electricity in 1980, a decrease of 2.5 received in 1980. These costs totaled compared to $29.7 mdhon in 1979. percent as compared to customer $364.9 million-a 15.3 percent This increase reflects payment of a use in 1979. The main reason for the increase over 1979. full year's dividend on preference decrease in total kilowatt hour sales Net purchased and interchange stock sold by Ohio Edison in July and last year was the 9.4 percent dror in power costs-our exchanges of October,1979. electric use by industrial customerb electricity with other electric whose operations were curtailed as a companies totakng $26.1 million an Net income for Common Stock result of the recession. Kdowatehour 1980. decreased by $34.2 milhon, or After we made provisions for sales to residential customers 56.7 percent, from 1979. This drop ' payment of preferred and preference increased 2.3 percent and sales to was attnbutable to the improved stock disidends, net income avadable commercial customers were up 2.5 asadabihty of our generating units. , for common stock for the year was percent. Other operation and maintenance ! $101.4 mdhon, compared with Despite the sharp decrease in sales costs for 1980 increased by $56.6 l $105.1 mdhon for 1979. The aserage to industrial customers, resenues mdlion. or 23.4 percent, to $298.3 ' number of shares of comrnon stock from electric sales increased by 9.5 mdlion. These increases resulted outstanding increased dunng the year to 66.7 mdhon from 58.3 mdhon - shares in 1979, On a per share basis,
- Dmdends Per Share .-52.50 earnings were $152 in 1980, ammum Earnings Per Share I' compared to $1.80 in 1979.
Divioends of 44 cents per share on 52m l the Company common stock ofbyOhio were declared the Edison i Company's Board of Directors for each quarter of 1980.
$1.50 -
1 51.00 ' Top iert: s erna siwo a plant operaior. uses a p lanc e to clean slag ort us boiler tubes at the
' samma Plant.
Bottom left: workman sinne cable on the g 5.30 ' uwlosolt Perrv-Hanna trarismnsion line in Portage Counts.
, Right: Damel P. Zeno (U manager. )
gosernment aitars and lames D. wilson, i manager rate departfrient. resiew uptommg 70 71 72 73 74 75 76 77 78 79 80 l'E"'Id t'"" di 'h' S'd H"" '" C "I"* b"'- Year 6
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; yggfyk g gg $17.6 million rate increase request to review every six months. The new l filed in January.1980, A new rate law will require public heanngs every )
i filing will be made in Apnl,1981. six months to determine the amount ; I We also filed an application with of fuel costs to be included in electric the PUCO, in March,1981, requesting rates for the subsequent six month a $139.2 million rate increast. period. I wholesale Rates Customer Refund
! in an application to the Federal As a resu9 of a Company audit of I Energy Regulatory Commission our coal suppliers and a subsequent filed in June,1980, we requested a order issued by the PUCO, we began
$13.9 million increase in wholesale a $1.8 million refund to our rates for the 21 Ohio municipalities ust. Because the t Rate Applications owning electric systems and buying customers PUCO directed in Aug' t hat the refund be As the cost of producing anc i bulk power from us. made over a 10-month period, we i delivering electricity continues to Although we intend to pursue the are making the refund by ceducting
' full $13.9 million increase, we did $180,000 per month from our
! climb due to high environmental costs,inflation we are and implement on January 10,1981,a recoverable fuel costs in the fuel
! obhgated to be aggressive in our $10.6 million interim rate increase, adjustment calculation.
i efforts to obtain electric rates that which is being collected subject to The refund stems from a dispute - will enable us to maintain the quality refund. Public hearings on our rate involving the price of coal the and reliability of our electric service request are scheduled to begin in Company received under a long-term and provide a reasonable return May,1981. contract with the North American
- on insestment. Coal Corporation.
Fuel Adjustment The dispute became the subl ect of Retail Rates Last Apnl. a bill was passed in Ohio htigation when North American filed i l On January 30,1980, we were designed to eliminate the fuel suit after we notified the Corporation j granted $111.6 million of the $128.4 adiustment clause, which allowed that, as of April,1981, we intended million rate increase request we filed electric companies to pass a portion to terminate our agreement with
- ! with The Public Utilities Commission of their fuel costs along to customers them for coal received from two of
- I of Ohio (PUCO)in Apnl,1979 on a month-to-month basis, subject their mines.
including $86.2 milhon the Commission authorized on an emergency basis in May,1979. We filed a $118.1 million f permanent rate increase with the manMw Sales j PUCO in May,1980, and, in February, .,
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! 1981, the Commission granted us a I $91 million increase. 22--
1 Pennsylvania Power was granted, in 20-- , j June,1980, a $10.2 million rate $ 18-
- increase from the Pennsylvania Public -@ .
l Utihty Commission, thus settling a q 16--
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4 Lett: Wns sacationers enios recreational actnitms along the shores of Lake f rie-here. :s 8-- m-- Total i lishinit at suntre near sermdion Ohio
- 4 6" 4 Top nght: The renovated former Quaker Oats men Industnal factors houses numerous shops and a new 4-~
---- Residential
; Hilton Hotelin Akron. .,
j ( Bottom right: An outdoor fulv 4 concert is
- Commercial rndu ed under a gaiebo at Public square in 0 70 71 72 73 74 75 76 77 78 79 80 Year 9
i System Another major change in the seven- System Dispatching Center unit,2.233 megawatt coal-fired Plant Progresses on Schedule dperat,ons i was the restructunng of its engineer-Our new 510.1 million System ing section to improve operation, performance and maintenance. Dispatching Center, designed to in addition, the reorganization will increase the operating efficiency of , allotv us to more effectively determine ur generation and transmission system, is progressing on schedule. causes for generating unit outages, ; The building's exterior is complete. th.is minimizing generating unit l de .vntime. and work is continuing en the interior construction. The Center will utikre a dansfield Plant Complete dual computer arrangement to t T% hird and final coal-fired improve the automatic, econornic i Generating Unit generating unit at the Bruce Mansfield operation of the System's generating Availability improved Plant in Shipcingport. Pennsylvania. units, increase operating secunty of the transmission system and improve f In 1980, we exceeded our goal of was placed in commercial operation achieving an equivalent overall by Pennsyhania Power in September. generating unit response to changes generating unit availability of 71 1980. We own 50.7 percent, or 1,196 in customer demand that occur on a megawatts of the total generating minute-to-minute bass. The facility is percent. The 72.1 percent rating achieved was a marked improvement capadty of the Plant-compnsing scheduled for operation by fall,1982. over the 65 percent availability rating two F80-megawatt units and one 800 megawatt unit-which we jointly System Peak I.oad Record Set we aseraged in 1979. This improved performance not only helped hold wn with the other three Central On July 21,1980, we recorded a down increases in operation and Area Power Coordination Group new System peak load record of maintenance costs, but also enabled (CAPCO) companies: The Clevelancl- 4,210 megawatts per hour. The new Electric illuminating Company, energy-demand mark, resulting from us to deliver 38 percent more power to other electric companies than in - 9"'5"' Light Company and The an extremely hot and humid period. Toledo Ed.ison Campany. surpassed the previous tecord of 1979. In 1980 we generated 94 Utilizing the most sophisticated 4.134 megawatts per Scor set on July percent and purchased 6 percent of 20,1977. envir nmental control technology in the energy required to meet ," custor.ier demand for electricity, t ' " " " o th 5 3 bilio po lan be an Steam Business Ending Our total power plara generating in June.1971. More than one dollar By selling two of our three stearp. capacity of 5,688 megawatts includes out of every three dollars in construc- heating systems last year, we began about 86 percent (4.899 megawatts) tion costs was spent for the instal- ehminating continuing operating nuc ea d
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cent 364 lation of environmental controls. losses that totaled nearly $2 million in 1979 alone. In September.1980, megawatts) oil-fked ger eration. We own or share in the ownership of 11 ea adey nit 1 the city of Akron assumed ownership ' Returned to Serv, ice of our downtown steam-heating plants comprising 44 generating units. On November 20, Unit 1 at the system. and an order issued by the Samm.esPlant Reorgan.ized Beaver valley Power Station in PUCO allowed us to sell our With the cooperation and support Shippingport, Pennsylvania, was downtown Youngstown system to the Youngstown Thermal of the union and employees, we returned to commercial service. The 810-megawatt nuclear unit, operated Corporation. Also, we received ap-reorganized the Sammis Plant near Stratton. Ohio into two sub-plants by Duquesne Light Company and of pr val from the PUCO to phase out
-four generating units in one, three which we own 52.5 percent or 425 steam service for our last few custo-megawatts, was taken out of service mers in Springfield by May,1981.
in the other. This division of our , largest plant allowed us to narrow on November 30,1979, for refueling, the area of responsibility for two new inspecnon and maintenance, and for superintendents, each of whom modifications called for by the Right: Turbine blades are inspected for darnage i report to a chief plant supenn- Nuclear Regulatory Commission as part of an merhaul of a generaimg unit at tendent. In effect greater emphasis is (NRC) as a result of revised require- ',6 ',j,'"ll]"jjd['"!g",'d$
,, ork.
being placed on planning and mainte- ments following the accident at the soo,, io distnanile. clean, repair and ' l nance to improve unit availability. Three Mile Island Plant. reassernbie. i 10
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private placement of bonds at an in Apnl. This issue totaled $10 million j ggggS interest rate of 12.75 percent with an and has a dividend rate of 10.50 average life of 13 ears. Of the f percent. proceeds from this issue, $16 million were made available in February and Oh.ioEd.ison Energy Trust l j 594 million in May, in addition to the security sales. we
! Ohio Edison issued, through a were also involved in a number of public offering, two series of bonds in other financing efforts. The most April. These consisted of two $50 innovative was the establishment of million issues-a 15.25 percent senes the Ohio Edison Energy Trust, which maturing in 1987 and a 15.50 percent a#ords us additional financing series maturing in 2010. flexibility and improves our In June, Ohio Edison' sold, by public borrowing position in the highly Secun.ty Sales offenng, $100 million of bonds competitive money market.
Dunng 1980, we raised approx- carrying an interest rate of 11.875 The Energy Trust will nWe available imately $496 million in long-term percent and a matunty date in 2010. up to 5500 milhon to pay part of our
- oss or ea m a y nit 2, an
- capital. A major portion of the Pollution Control Notes j proceeds from our various sales of 833mgawatt nudear generamg st in August. Ohio Edison sold, through j secunties reduced short term loans under c nstruction in Shippingport, the Oh'io Air Quahty Development -
and were used for construction and Pennsylvania. The Company s share j Authority, two series of pollution f the total construction cost of the i 3C9"!sition or betterment of facilities. control notes. One series in the i The following se urity sales were amount of $25 milhon carries an
"" ' "Y * " * "'
concluded dunng the year: f the five CAPCO companies, is interest rate of 10 percent and pr jected at $875 milhon. The Unit is Common Stock matures in the year 2000. A second i scheduled to be complete in 1986- ! In February, Ohio Edison offered 6.5 senes. also for $25 million has an The Trust will enable us to defer a l milhon shares of common stock with interest rir:e of 10.125 percent and p rtion of the long-term financing a reahzation to the Company of matures in 2010. I requirements for the project until
$12.97 per share. or $84.3 millicq. The proceeds from these issues I"*'**"'I"* C#"
! We also raised $29.6 milhon from were used to finance certain air I included in electric rates established the issuance of 2.4 milhon shares of pollution control faalities being by the regulatory commissions. A ! common stock through our Dividend installed at our Sammis and Niles Reinsestment and Stock Purchase Plan. Plants. per anent f a i g or thi project First Mortgage Bonds Preferred Stock will occur at a time when our capital l Pennsylvania Power finalized a Pennsylsania Power completed a requirements are expected to be pnsate placement of $22 million in pnvate placement of preferred stock lower than they are now. ! bonds in January. This issue carries an interest rate of 10.90 percent and an $ 500.000,000 1 average life of 13 years. New Long Term Capital in February. Ohio Edison completed j arrangements for a $100 million $400.000.000
- $300 000.000 1
- $200,000,000
- 1 Diverufied area industrv makes such products as estruded alummum parts (iop leh) by Genera htrusion Company in iounintossn.
ohi cable (top nght) bv Parker Hannilin . Corporation in Rasenna. and golf balls l ibutiom) by sictor Comptomeief Corporation '
- II'"d -
lIl 70 71 72 73 74 75 76 77 78 79 80 Year M00 M 000 13
b d
! Financing (continued) i Power May,1988. We wiH own 35.2 percent, or approumately 850 megawatts, of Supply the generating capacity of the two nuclear units European Money Market Planmng Beaver vaney unit 2 at We entered into a two-year Shippingport, Pennsylvania, which is agreement in 1980 that makes being built and mil be operated by available up to $30 million in short- Duquesne Light Company, and for term, unsecured loans from a group which construction began in May, of foreign banks and permits us to 1978. is about 40 percent complete take advantage of any cost benefits and is scheduled to be operational in that may exist between domestic and May,1986. The 833 megawatt unit, of European interest rates. In addition, which we will own 41.9 percent, or the agreement provides us name Nuclear Plant , 349 megawatts, will cost an recognition in the European market Construction Continues estimated $2.2 billion.
for possible future eurobond tonstruction is continuing on three financing. nuclear-powered generating units Nuclear Units Terminated being financed and built by the As we shared with you in last year's Bond Rat.mg CAPCO companies. report, the CAPCO companies in March,1980, Standard and The two 1,205-megawatt units at terminated in January,1980, plans to Poor's, a New York-based investor's the $4 billion Perry Nuclear Plant. build four nuclear units that were in service, announced a reduction in the which is being built and will be the design stage. rating of Ohio Edison's first mortgage operated by The Cleveland Electric The four terminated units were bonds from Single-A-minus to Triple- Illuminating Company, are about 58 Units 2 and 3 at the Davis-Besse B-plus. General positive percent complete. Construction on Nuclear Power $tation near Port developments were acknowledged, the units began in September,1974. Clinton, Ohio, and Units 1 and 2 at but inadequate recosery in several Unit 1 is scheduled for commercial the Erie Nuclear Plant near Berlin key financial performance areas were operation in May,1984 and Unit 2 in Heights, Ohio. The estimated cost cited in their decision to lower our to build those four units was
! bond rating. However, our bonds still $7.3 billion.
carry a Single-A rating from Moody's The companies also made changes investors' 5ervice. affecting the ownership of Units 1 and 2 at the Perry Nuclear Plant near North Perry, Ohio, reducing our Financing , ownership in each of the two uriits by Total Capitalization at December 31 - 53 E m 000 80 megawatts. Ownership by The Cleveland Electnc illuminating
- Common Equity Company will be increa3ed by a
--52.500.000.000 corresponding amount.
-== Preferred & Preference 5tock Load Management Urged
- Long-Term Debt " 52,000m000 In these demanding times of inflation and energy shortages, with.
. -51.500.000,000 esery ne seeking ways to sase energy and hold down costs, we are l deeply involved in programs geared t
__51m000m to reduce or limit increases in the system peak demand for electricity. l ll-in doing so, we not only reduce the __33oomooo need to build costly new generating i I plants but also make available to our customers ways they can use electricity more efficientiv-thus. 70 71 72 73 74 75 76 77 78 79 80 helping our customers draw more Year 14 1
e value from each energy dollar they Work Begins on spend. Coal Gasification Project fuel l Last year's System load manage-We participated in groundbreaking
$gpplje5 l ment results were the best since our ;
. program was started in 1976. We l ceremonies at East Alton, Illinois, on reduced the average system peak j October 31,1980, fc. a $135 million demand by 41,000 kilowatts and. '
coal gasification project,which wil1 oser the four year period, achieved j produce a clean-buming fuel for a 112.000-kilowatt reduction. j power plants from high-sulfur coal Large industnal and commercial l like that mined in Ohio. customers.who shifted their use of ! The demonstration plant, to be built i electricity to off-peak penods or , by A!hs Chalmers Corporation, will { controlled their use during on-peak > process 600 tons of coal per day and j penods,were primanly responsible produce a low Btu gas for an existing , Coal Suppl.ies i for the results we achieved. 50-megawatt generating unit at More than 9.9 million tons of coal in add: tion, our load management Illinois Power's Wood River Plant near were burned at the Companies' 11
- programs for residential customers in East Alton. power plants in 1980. A substantial 1980 encouraged the installation of ;
Following the planned completion portion of Ohio Edison's coal energy control desices and changing i and successful operation of the purchases are made through long-
' the customers' time-of-use for major project, large-scale plants term contracts with those coal appliances, Also, residential capable of processing up to 5,000 supplies coming from southeastern customers were advised on a new tons of codi per day will be commer- Ohio and western Pennsylvania. The total-home energy-control system to cially marketed by Alks-Chalmers. So remainder is purchased on the open manage electricity-230 of these l far, we have spent 51.3 million on market from the same region and control systems were reported I the project and will insest another f,om eastern Kentucky. Pennsylvania installed in 1980. 52.5 million through 1984 Power buys its coal from central and western Pennsylvania.
i improved Coal Quality
! Last sear we reahzed continued improsement in the quality of coal l we received at our power plants from supphers-coal that is higher in .
)
Power Supply Planning -- 52,500.000.000 heat value and lower in ash content. l As a result, we were able to further l improse the operation of our power
- Net Plant in Service plants.
- Construct >on Wark in Progress --52 m M W l Uranium Supply Agreement Ohio Edison and the other CAPCO companies reached a settlement with Kerr-McGee Nuclear Corporation in
! December,1980, which permitted
' : the resumption of deksenes of more l than 12 million pounds of uranium to
--- $1.500.
000'000 j the companies through 1985. kerr-l3lIlllIIlI1IlI l' 1979. McGee ided against a complaint the CAPCO Group in Apn
- 5500 000.000 i alleging a breach of a provision of
{ a 1973 contract rdating to p ice l adjustments. E ; 70 71 72 73 74 75 76 7 78 79 80 Year 15 - -. . _ _ _ . ~ ._. . , _ . _ . _ _ . _ _ _ _ _ _ _ __ , .,_ . _
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_ . ~ . _ _ . I e C k t Clean Air Act Up for Review Environmental emissions from the Plant. In addition, several retrofit projects This year the Clean Air Act comes Activities are underway at tbree other power befo,e cong,ess fo,a ,cheduied plants in Ohio. We are installing two review. We will aggressively work to electrostatic precipitators and a new improve the Act, especially as it " 393-foot chimney at the Niles Plant in relates to the feasibility of various i Niles, which is scheduled for requirements and their public benefit I completion in July,1981, at a cost o' as compared to ultimate costs to
$35.9 million. Two precipitators are the consumer.
under construction at the Burger Of particular concem is the Plant in Shadyside, scheduled for possibility of premature regulation in completion in March.1982, et a cost the area of so-called " acid rain"- f $45.3 rniuion. At the Edgewater descnbing precipitation containing Air Quality Control Plant in Lorain, one precipitator is pollutants that bring about an Proj.ects Underway being installed and is scheduled for increase in acidity. Although the Environmental regulations remain a completion in March,1982, at a cost majonty of experts outside the EPA major and costly concern for us in of $28.4 million. and the environmental movement the 1980s. To comply with existing beheves current scientific knowledge , clean air standards, we will spend Regulatory Changes Occur is insufficient to justify " acid rain about $518 million through 1985 on - Sulfurin-Coal Averaging Extended regulation, environmentalists are pollution control refinements at our An important development in the advocating new and costly emission area of regulatory policy took place limitations. l power olants.Croundbreaking forinour most October,1980. when the U.S. extensive clean air project took place Environmental Protection Agency in March,1980, at the Sammis Plant (EPA) announced it would extend near Stratton, Ohio. The $450 million 30 day. sulfur in-coal averaging for project is about 550 million greater industries in Ohio until March 1, than the total original capital 1982. As compared with an earlier, investment at the Plant and includes more-restrictive federal policy, the , erecting a bridge-shaped deck oser a new guideline allows for greater use four-lane highway to support of less expensive Ohio coal. pollution coritrol systems which will Various communications and replace existing equipment. supporting documentation we The deck, which will be about 140 supplied to the federal government in feet wide and 915 feet long, will support of 30-day averaging were a support huge dust collectors which factor in achieving this important must be added to control particulate regulatory relief. ; New Sulfur Dioxide Limit Proposed in Penrwylvania, the Department of Environmental Resources (DER) approved in October a proposal to - l ease the sulfur dioxide emission limit for the Lawrenu County portion of the Beaver % fey Air Basin, which includes Pennsylvania Power's New 1 Top tert: A total of 200 concrete columns Castle Plant. The previous limitation will serve as a foundation for a ded to support dust collection equipment at the sammis Plant. would have required the installation f scrubbers at the New Castle Plant,
. < aattom tert: A boiter.io.iurhine sicam rine at a Cost of approximately $85 undergoes inspection at the Bruce Mansfield Plant. million, and would have increased 4 Right: L'nder normal conditions, a coal suppl, annual operating expenses by $15 of f>0 da,s is maintained at our coal. fired million. The DER ruling is subject to .
plants. I approval by the U.S. EPA. i 17
- . . . . . __ _ _ , -_,.__-m - , _
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/danagement elected three officers. Secretary and EmplOyeeS Ceneral Counsel James R. Edgerly Changes l was elected vice president and general counsel: Robert P.
Wushinske senior attorney and acting treasurer, was elected secretary and treasurer;and Byron D. Burford, ) manager of general accounting, was elected comptroller. I
< Board of Directors
'[ Age Policy Revised j A number of c' nges were made Earlier in 1980, the Board of i on the senior management level of Directors of Ohio Edison adopted a New l. abor Agreements both companies during the year: resolution which precludes election Negotiated 1 i by the Board. or designation by the New two year agreements were Oh.ioEd.ison Board of nominees for election or negotiated with The Utility Workers On September 16,1980, the Board reelection, persons who have Union of Amenca (UWUA) and the l of Directors of Ohio Edison elected attained the age of 69. The board Wemational Brotherhood of Electrical Assistant Treasurer Gregory F. passed a similar resolution in 1972, Wo:kers. The agreements provided LaFlame to the office of secretary of but it exempted those who were increases in wages and benefits which the Company succeeding Donald D. members of the board at that time. were in compliance with guidelines Vowles, who retired on November 1 The May resolution eliminates that essablished by the Council on Wage after more than 43 years of service. exemption. Four board positions are and Price Stability.
Financial Analyst Mark T. Clark was immediately affected. , Worthy of special note is a new elected assistant treasurer succeeding ' To affect an orderly change in i agreement with employees, Mr. LaFlame. board membership, compliance will represented by the UWUA at our The Board also welcomed Robert L. be achieved over a two-year period. four largest power plants, that Loughhead as a director. He had Directors Walter H. Sammis and J- contains a provision unique to the been unable to serve as director Robert Croff will not be designated electnc utility industry: a " final 1 since his initial election to the Board . as nominees for reelection at the i I I in December,1978 until authorized i 1981 Annual Meeting of l position arbitration" plan which, if previous agreement patterns to do so by the Federal Energy Stockholders. Directors D. Bruce ! Regulatory Commission on August Manstield and Fred H. Zuck will not ! continue, of a strike atwill eliminate these the possibility plants through i 28,1980. stand for reelection in 1982. Upon retirement from the board. ! mid-1988. h d d .
!' C rv eld teel pan in Directors Sammis. Croff, Mansfield l Affirmative Action Promoted Warren, Ohio. He is a group vice and Zuck will serve as directors i Ohio Edison has long been president of that firm's parent emeritus, without compensation. l committed to Equal Employment in an unrelated matter, William R.
companv-Copperweld Corporation, ' Opportunity and Affirmative Action
; Pittsburgh, Pennsylvania.
ai an Programs. Our policy of positive s e ec ed etire from # " { Pennsylvania Powet the Board, effective Apnl 30.1981. Mr. Tappan has served as director 1 hi c e nd elp ssed By 1 The Board of Directors of ; ! activities directed toward responsible nnsylvania Power on September j 5 ,' c mmunity inv Ivement pr grams to
..,1980. named Ohio Edison's e e grateful for the wisdom and leadership these men have provided impr se the employment ; Marion Division Manager Wayne i PPortunities of minorities, females, the Company during their many ; Cole president,of genrsvivania years of service, the handicapped and veterans. ; Power succeeding uy E. remmler, ,
j who retired on January 1.1481, after i ;
; more than 41 years of der 'icated i
> service. Mr. Semmler had served as senice area actiurs includes The world series p {
president of Penn Power since 1972. oi coif ttop terth the oso 8411et nop middlet l s, wnrid nap right) and The Ali.4mentan At its meeting in May, the Board t soap Boi Derhv tbotiomb 18
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Top left: (1. to r.) Frank E. Derry, Vice President; justin T. Rogers Jr., President: Russell J. Spetrino, Vice President and Ceneral Counsel: D. J. List, Vice President. l Top right: (1. to r. front) D. W. Tschappat, Executive Vice President: Clyde W. Fredenckson, Vice President;
- Robert J. McWhorter, Senior Vice President; R. C Zimmerman, Senior Vice President: (back) Lynn Firestone, Senior Vice President.
I l Bottom (1. to r. front) Victor A. Owoc, Executive Vice President: H. Peter Burg, Treasurer: (f. to r. back) W. B. Marvin, Comptroller: C. F. Laflame,
- Secretary.
l I I 20 i
. . ~ . . ._ . . . . -
I I 4 4 i Board of Directors William R. Tappan . Ohie Edison William A. Derrick Retired-formerly Chairman of the i Company independent Eiect,;cai and Board of the Tappan Company, Mansfield. Ohio, manufacturer of ; Mechanical Eng;neering Consultant, microwave ovens. appliances, kitchen also President of Leisure Industries.. cabinets and bathroom vanities, . Inc., Sandusky, Ohio, developer of real estate and residential building. Chairman, Salary Committee. Menher, Salaty Committee. Douglas W. Tschappat John L Feudner, Jr. Executive Vice President of. .; this Company. , Executive Director of Akron . Community Trusts, Akron, Ohio. F ank C. Watson Chairman, Audit Committee. President of The Your.gstown Other Officers Welding and Engineenng Company,
- Dr. Lucille G. Ford Warren C. Fouch - Youngstown, Ohio, fabricator of non.
- Vice President and Dean of Business Assistant Comptroller Administration, Economics, and the ferrous alloys. Member, Audit Committee. t Mark T. Clark Cill Center for Business and Economic Assistant Treasurer Education, Ashland College, Robert G. Zimmerrnan Ashland. Ohio. Senior Vice President of '
Charles N, Clasgow this Companyi ; Assistant Secretary J. Robert Groff Consultant to The James Leffe! & I Fred H. Zuck Joanne Martin Retired-formerly Chairman of th e Assistant Secretary Company, Springfield, Ohio, . manufacturer of hydraulic turbines Board of Sandusky Foundry & and steam generating equipment. Machine Company, Sandusky, Ohio, manufacturer of centnfugal castings. Disisjon Managers Robert L toughhead , President of Copperweld Steel Harold W. Miller Company, Warren. Ohio, , Akron Division manufacturer of carbon and alloy ; i Anthony N. Corant blooms, billets and bars. Bay Division [ D. Bruce Mansfield James E. Markle Retired-formerly President of th,s i
' (#e Erie Division Company and Chairman of the Board Mdcolm E. Cash of its subsidiary, PennsyWania Power i Mansfield Division Company, Member, Audit ,
I
! Donald L Rearick, Jr. Committee.
Manon Division Victor A. Owoc Norman R. Monahan Executive Vice President of Spnngfield Division this Company. Robert E. Dawson justin T. Rogers, Jr. Stark Division President of this Company and I David C. Bixler, Jr. Chairman of the Board of its ~ I subsidiary, Pennsylvania Power I !
, Warren Division Company, l David R. Cundry
! Youngstown Division W. H. Sammis Retired-formerly President of this li Company and of its subsidiary, I Pennsyivania Power Company.
Member. Salary Committee.
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I ' The consolidated financial statements wEre' prepared ' . The Audit Committee consists of three non-employee . 9j#C j by the management of Ohio Edison Com'pany, who takes directors whose duties include: inquiry into the number, j 4 1 responsibility for their integrity and objectivity. The extent, adequacy and validity of regular and special y, j statements were prepared in conformity with generally audits conducted by independent public accountants t [ accepted accounting principles and are consistent with _. and the internal auditors; the recommendation of J .' l C k,other report. Arthur financialinformation Andersed&Co.l independent appearing public, ky : audit elsewhere and special purpose in this auditsj as
- independent may be required; account l 4
;R@ accountants, have egressed an opinion on the Q Q A 'arW reporting to the Board of aJ M Compan/s financial statement $ Tar Sowr on page .402 h (? /AThe, Company's intemat additdrirkho'a[re' responsible $ Committee's findings hd 7' and Ndit Committee held two y , ql h% g to the Audit'Comtpittee/of
- 4. review'the results and performance of operatiria the Board units of Directors,M@M meetings dunn31980. auditing functions.Nf6 n.
L_ &
~ y k;w ithin the Company $or adequacy 7 effectiveness and kQM:M, -E relicbirity of iccountina aidrepocing'systemstaiwell 6 WA
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- . [r s Executive Vice President Comptroller j(,
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; m 9 qqye.NiN3b T -and Subsidiary: Company 1' .
q.' ' ^, w.s p g, 7.~ r' C' P A 1' u, (> a, W
~, *a- .9' p
p
- s& .,. e ,, f. .J TQ[ .
y'QQfp5 ' l ' ' , p, \ [lh[ [A.Ql & C .'~.q, If m.pg..q .g gg,u]-4: jg.g. g,u mmx s.g.g,jp. x g m p.m.x . s; Selected Financial:DataM$$ggy@ M M M M M .g %g g g ;,gMMML ' .QM
? W4MW Wn*N:v%g..mjiv.MwQ.4$mWa g"w"*p"t,.9 (in thousands, encept per share "'"4 e ' amounts)
~M' i .""
i 1 Opefating Revenuesp g.14f 'tigia J.MQ.y$y.9!We $1,088,869 - I . 994,585 i $' 862.956 ' 5 7%,289 $ 644,852 .. .; Operatingincome .b'. ~ hh kbb/Nk. .s;p$ $' 169,383 - $ > 163,744 ~ -
$ 123,945'
$1146,508 - $ 122.217 5 Net Income. .:..+..U."2 . .M,',7.q m.. y; Z. c.f.QM .-W4g .4. g/;$ 135,150-- M,U.y.: $'i,134.807 . $ fic.,030 $ 111.574 5 103,176 i a 4 M $.tock1#'M.
iM. #. , e,= $ 101,403 $ 87.863 Net income for
.. - Common.
4. v g@q)q.y.g
$ 105,120 :$ 61.259
.. a,.,:. $ 82.777 M f4' g,g.pp Eamings per share of Common Stock f A, , %. y . . 4
'% M, ,@
' 2J .
-#) 1 (based on average outstanding during the yearp.r,6.O number
.n -
of
.Q.DM I$1.52 shares i E[Fkp ~ $1.80 '
. Mp,'g.Z.a
' ' $1.19 ~ c 6 % $1.97 L T
, @% $2.14 MC
- p. 9 -
hnm Dividends Declared per Share of Common $w :$1.76 4 qp @r mStocNQ3. " j'J.+- $1.67 y
$1.76 ' - $1.76 r $1.715 i Total Assets at Dece be h .h *k b b N $3,979,%5 $3.446,454 $3.010.914 , $2,715,903 $2.343,924 .y,k
- 4L
..r Preferred and Preference m Stock. f/qgph,hgw.g/g ,
.. J .. 4,.gM;p' 4 ,
t : $s . 3 '$ x .. ;156,450 < 1 Subject to Mandatory Redem 5 ?k GJ.% - ~ $ 150,850 - .$a98.000 -
-c 98,000 $ 88,000 k, <% . J' Long-Term. Debt dbbe u Q#a& nf. (
M
' .& ' .Fg..gn.h" W mq$1,594384 $1,410,782 ' ~ $1,343.195 $1,189.821 $1.087,755
. s 4 Q. p 1 h ' ' ~~ '
~ '
common std@$$ tbn@@MMM@@M%A.4 & f7f The Company's Common Stock is listed ' ort the'New York and Midwest Stock Exchanges and is traded on other registered exchanges. : 9 Stock" cx a v q .w a- V s Price Range ' of Common WUM: ;y.s.W,;pu .pw ;th f,0 .T W "1980~ J . * 'R'; 4*M wi T N a S~N';"g ' ' 1979-
~ *'
I
. W' ly.Mb ,dt @@.- 4 %T "
' '( ',
Q p%pg.XO[N h/ Secor.d Quarter High-Lown [ .%.'.n.:.l', .i.M.i.X.I .h 151/4 J9;113/4. ., First Quarter High-L5 ., ;16-7/8 3y 14-7/8 15 . ' % ,W2. V 12.T. .n, 14-5/8 }. 3 Third Quarter HighLow Tl1M.W.a c.T.'.[GQ.Q,h.%M.h . 14 7/8 , @d121/2 ? @o.
'1 6-112 :R ' J '161!8. 141/2 g' E Fourth Quarter Hightow l QMT. 3TM .M34 3 11 1/8 I:" y . i .16
'151/2 - 13-1/8 Yearly High-Low .N . y #iM . .v.'a m M bf s7b^P't.h"Mb.]d.
ob Wi#i;/.~. . . d 151/4 r - ,Ub, T.Q .4Rl.T. Q7/8 ' 13-1/2 . ., y'1/8kl 11 f,. 13 1,!8 y^;.gg.;. ;.+ 3, g :;m ' gg- 4,g.t. m. */ , ; @ k'Exchan8e Compo<>.s ,it e Transactions.a Prices are as quoted onggYor 1 Classificatid$fiNolMMf5Comniorf Stock TMM i as of Decemtidr}3$198dNP,$@M4Midd@W' ' h D ;
.fp W $WE'i,Q;W3Wn#hWMf,i & Holders of Record?. li/s NS Shares Held -4
)
fW Individua&{ lg. . (f$
'A
$hk .kh F 162,08) 2 9,5,19,897.g 57.7
~ % ~
i,} Fiduciaries .:.p g g .e,,9 p r .. g.16,81t.'y qt.2gj Q415,228 , p 5.0 ; 1 Brokers . . .'.D59, Nomineesd.N hh fQ
- l.
, ' ' f g ; .)!N k[ [d7h
~N h h29,31.9' I f.d 22N18,376, ; .M 32.7 '
0.6, j
, )
1 fir &tMTh " N BankhFina$ ' %[b M NT Mi3'4,3421 ' l0.21 i tk ' y O5h M)%I).7 .N M - d21,522 i , 2.1 '
~
]
insurance.Compa. nies ;- Om,p. m - e.S yy 4{ try 4,4
&- u w -
I0$p e.&g Mje 'p472,78 e Chantable. Religious &EducationalInstituts , t A. 3 K 0.7 t Pensions, Pro' fit Shark 8 NNN N .4 @ 46 ug)602.g W121 r 1: w 714,706 ' 1.0 TOTAL.'. .'. . ;dF5Di[ 5% . Jk@ M A183,767 %s )100.0 K.m e 168,526.172 100.0
,. ?f
. ' As of Januarys31/1961 thgwese,185 5
.fkh75" ofh?? ?l p;gq w pp<9. g l.rqy 68,613,719 shares of the Company'ss CommortStocith,e p(p; 45
.q 2
x . .M +::g ;*q p m.Qs gyg'qtt;%g &[d 2 - Quarterly 'dividerd 448 per safe'were 'crithit Company'sy.Womm.ipf +80.an 9. t
, eamings available for payment of cash dividends liO,gven in Note 5b on page mon Stock dunns 19
[' _ -~~~~2 3
Results of Operations The Companies' operating revenues have been increasing Trust (see Note 6). The Companies expect to spend approx-primanly because of rate increases and increased co!!ec- imately $2.7 bel! ion for construction from 1981 through tons under the Company's fuel adiustment clause. Increased 1985. Thus. the Companies are faced with the challenge of collections under the Company's fuel adiustment clause funding this new construction in hght of the dif6cu't or-represented approumately one-fourth of the total increase cumstances presently existing in the regulatory and in conschdated operating resenues in 1980. Revenues were economic climate under which they operate. The Com-adversely affected in 1980 by a 9.4% drop in kdowatt-hour panies currently expect to fund a maior portion of this new sales to indestnal customers as a result of the economic construct on through the ismance of add. tonal secunties. downturn emerienced in Nortneastem Ohio and Westem The constant problem of regulatorv lag has worsened in Pennsyhania. Total kilowatt-hour sales decreased 2 5% in recent years due to rapidly nsing intlanon. This has resulted 1980 after haung increased 2.9% in 19M in an eros 4on of eammgs and the amount of funds generated Mapr cost saungs were achieved in 19fo due to the from operations. thus causmg the Companies to irut: ate substantially improsed performance of t"e Companies' more frequent rate increase applications. generatmg units. The plaang in serdce of Druce Mansheld The most dramatic development current!y plaguing the , Unit No. 3 further increased operating ef6cencies in 1980 Companies is the extremely high fesel of interest rates. The The increased generating asailability reduced he Com- Companies sold 5322 milbon pnnapal amount of 6rst mort-panses' dependence on generanon from mom costly oil- gage bonds with interest rates of 10.9-15.5% dunng 1980. In hred units. which held down the increase in 1980 fuel costs contrast. 561 mdhon pnnapal amount of first mortgage by approumately 519,000,000 under the amount that the bonds with interest rates of 2-3 4-2-7,8% were redeemed at contmually increasing pnces for coal and od would have matunty dunng the year. The resulting increased interest othersdse produced. costs hase an immediate adserse edect upon earrungs until The Companies' dependence upon power supphed by they are considered in subsequent rate appbcations. other utshties has bean greatly reduced as eudenced by the Since projects under construction are not included in rate decrease in purchased and interchanged power, net. from base in Ohio untd they are at least 75% complete, a portion 591.509.000 in 1978 to 526 089.000 in 1980. This rs due in of the 6nancing costs apphcable to such projects is capetab large part to the improved generating unit performance ized by crediting a!!owance for funds used dunng construc-discussed abose. The Companies became net seHers of in- t on. wnich correspondmglv increases net income. These terchange power to other utihties in each of the last four credits are not currently cash earnings, but. in future months of 1980- penods. will be included in rate base upon which cash cam-mntenance costs base been increasing because of the ings wdl then be derned. Thus dunng panods when the Companies' ongomg ehorts to enhance the asailabihty of Companies are undertak2ng massne constructen programs, their generatmg units. Other mamtenance performed at the funds generated intemails wdi be adsersely afected due to Companies' Bruce Mans 6 eld and Beaser VaHey plants ac. the outilow of cash to seruce the caprtal with no cor-counted for over one-half of the increase in mamtenance e: responding cash retum on the protects current!v t;nder penses for 1980. Bruce Mansheld Unit No.1 expenenced a construct on. scheduled outage dunne most of the fourth quarter of 1980 To combat some of these obstacles and to increase 6nanc-for os erhaul of its turbine and generator. Beas er Vallev Unit ing flexibihty. the Company estabushed the Ohio E hson No.1. which was taken out of seruce in November 1979 for Energy Trust to 6 nance a porton of the Company's imest-refuehng and mspect on. also required mod 6 cation which meet in Beaser VaHey Urut No. 2. which is currenth under was not part of the Companies' general plan to enhance un:t construction. As descnbed in Note 6. up to 5500 mdhon avadabihn. Seaser VaHey Unit No 1 resumed operations in may be nnanced through the Trust. This arrangement allows, Nosember 1980. the Company to deter permanent 6nancmg for these Total inte*est costs in 1980 and 1979 increased substantia;lv fachties untd Beaser Valley Unit No. 2 becomes part of rate due to signi6cantly mcreased interest rates and increased base, at which time a cash retum wdl be eamed on those borrowmgs dunng both years. as discussed more fully below. facihties. Informahon with respect to the estimated e#ects of infla. A recent positive deselopment which will improse the tion upon the Comoanies is gisen in Note 10. Company's near term 6nanctal capabihtv is the 591 milhon
. rate increase recened in February 1981 which included an Cap.tali Resources and L.iquidity aHowance for recosery. oser a ten year penod. of the costs in order to adequately sen,e the present and future needs expended for the four nudear unats which were terminated ,
of their customers. the Companies not only produce and by the CAPCO companies in lancary 1980. The Company ' distnbute electnoty but also construct new tahties. The expects that the gradual economic recosery which anpears cost of the Companies' constructen programs over the last to be taking place in its seruce temtory will increase fne years was approumately 52 bdlion, which required per- kilowatt-hour safes. In additon. any downward trend m in-manent 6nanong of approumateh 517' bilhon. in additon terest rates that may occur will moderate the lesel of the to 5265 mdhon received through the Oho Edison Energy Company's intermediate 6nancing costs. 24
1. ((
~
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}. 5 "
~
Ohio Edison Company'j
~
and Subsidiary Company ?
- s. . , > A
.y M.
- e e" b ' m-, c;j..~
. , ; .4. . ..,
e , . aq Statements of C6nsolidded;e.sIncome%,,, .,. For the Years Ended December 31;MG@Q$.MMM,j$. ;:p '1980 4 . s We' 1979 yq 1978 y ,g4 , p - (in thousands, except per share amounts) y .sq[7,4,M:[g OPERATING REVENUES:
' }y ' *y,~A:
. , ', , . Q])G Electric .. ... . ..r..,......
.....,........'v.. 1. . ' u;... 4 ,..;l..... $1,076,582 $989,217 $857,545 "/
5.411 ;)y' w .J....... Heating . . ........
.. .:.... 4,287 5,368
.. ,e Total operating revt nues .. ..'..... 2,.... ,;.....;.5 ., ;..... 1,080,869 994,585 862,956 <h
..q
, t .. +; y 4, ,
3, - am Q:#~%: ,, _ nP.i OPERATING EXPENSES AND TAXES:, , . . .
, ,; a 3 Operation- , 3l5 ?ak W, 37& W ..' E. ?v G U r, E '
'" Y? 4 d,"l. LM. M~ .d7 y y't.Sm ;w'.~. ,.I'. .W;, ; -
, .. +
Cost of fuel - 364,894 316,536 276,570 ft i Purchased and interchanged poder[neS.M. 26,089 60,313 91,509 @cs Other operation expenses . .i6.'Y$de).4.E .; . . ; W r.2w$f. ' o d. ky. . .l , #. 170,351 138.712 134,595 M Total operation . . .
,+ . w g %
. , . . . . . '.w. .4, /Q.g.,q .M.A t.g. N : .p;p . ,I. oi N. y%. 561,334 515,561 .502,674 g, a Q
Maintenance. . . . . . . Provision for depreciation' . .~ '.. . 1.'3.1.CN$h N.d$ Nd ~3
. .M. '.f.V.',.Q$.Mh.Q.,,
127,935 NN$'dQ[) 102,936 87,738 85,455 81,224 ( 77,812h 85,143 89,122 ' 76,804.A General taxes . . . . , Income taxes-provision (credit)'.. SW, .%.aQ.Ud[.N,,. . . . . . .?N;e.M.$/.bd5My@.LM,7,; . M ,,.l m
,"1 51,619 M 41,998 (6,017) M g ,
o a c4 . yl.. i 911,486 739,011. ' NJ
.4 Total operating expenses and taxesh. ; q & . ,
, - 830,841 OPERATING INCOME _ .e. . . . . . . l %. .'. l'.n , M N.?.n.'i
. , ; .1. "'. . -.w J./ .v. g< '. i,. , . . ,,, ' .
169,383
. ',V.M. - 163,744
.m 7. .W.';123,945' ici4 a i,, ,. . -
p
. - Ms.: _, r VF;g . g.O, eg.l n. tr
'2' "g OTHER INCOME AND DEDUCTIONSP . L #.w,' ',.P%' A.,4 sPJ8 p, , / .'
Allowance for equity funds used during construction 9. c. ' .J.7. L , m 57,715 50,571 35,895 ' Q,4 :f, Miscellaneous, net . . . ... a v : . ... . a ,d.6. .E .h . M. C 6 2,104 1,399 3,767 j . income taxes-credit . . 37,017 21,189 9,143
. .. . . .boa,43[p.W.1,V.
- .m . , % !D. q. , .'.dv . i.Q- q}' !,
Total other income and deductions, net . J.V.W. :, '.O . A, . . ; J. . M.' ; . 96 836 73,159 48,805 : 172,750 ,hh.p
' ' ". . V. . .h.N 266,219 236,903 TOTAL. INCOME . .f.U,h [$ %$@
.. x y , .. . ,n 41. v.o Q.h) 9d A."' 3SMQNhd..fi[.N.h
,3
- * ?z
+" ; g:
NET InterestINTFREST on long-termAND debt , .OTHER . /M.nW.Hp.".$ ~CHARCE5dWp'pg[g*
. . . . b i . ~ 1. " :. ' 147,290
- 3g%M/g ' ' 0 108,401. M TRN,6/* y
, 98,100 2 a Interest on energy trust (Note 6p. W.9 M.h M . ,( 5 057 .<; f*;, a y ^
Allowance for horrowed funds h used,during %;;Q]Qt[f #([ (48,814 t p:0 ' ." . , k * , ;, ' t N ' I ,3T
.s
?.t a$j
'T construction'.3J!@M$h Subsidiary's
. Other interest spen' sed.
preferredstockdividend r M[.h%.b4 nts$dM.it fe%Id9.% f require %s*h.b 4,660: - P J ,$hhdh 5 ,004 4,660 -
.., . . www g. ~ 4~ -@
Net interest and other charges . 7 1..#w,4%gL,y
. , :p n .H u r.
m .u. y;d.r h4 9 u:d.QV 131,069 ,:p', 102.096 86,720 F g rW . 134,807 86,030 , .y INCOME . . .,. . a . ..a-. NET . .. PREFERRED AND PREFERENCE STOCK DMDEND REQUIREMENT 5%. 33,747
;.g u; R, u_:g.
. a w_
A,4b, .OA4,w.. ,
'+~
- 29,6874, %.,. yUg,h 24,771. -iy 4.
$ 61,259 )
' ~
NETINCOMEFOR COMMONSTddK$,Ndh. l.NMh45@ $ 101,403 $105,120 ;
.: ~u &; yf g.ggyp ,.
$ff ' + i ,, n , ,
AVERACE OUTSTANDING . ;, ... .:." NUMBER ,n M8d.%:OD;[m w xe OF SHARES me Ol'. COMMON '66,683 STOCK51,620 58,290-4,pU$p g 3o=
- EARNINGS PER SHARE OF COMMONJTOCK:,Y.%dyb,..yM.bh n , 4 d
(based on average number of sha'res o ' utstandingT%gF 7M Q W
' 7 9 'u $ 1.80 $ 1.19 3 DIVIDEND $ DECLARfD PER SHARE' OE%COMMONM,h during the year) . . . . J.W. MA',$,n. 4 q ~.m/q,#. O.bi Mf % 5 1.52- ~hl9
, l t,
, e rom D.u. g 5TOCK.V,T.
i r 5 1.76 $ 1.76,,% 9 s
>,< The accompanying Notes to ?, .p. % s :p ,
Consolidated at Statements are ar) integral Finano;ms part of these statements. ogmy kp.T.M i'.,;yS 1 C,
< N. ~ .s. f, # s+c @v as. ~k..
g ? M gg & y. Q., ms , .~. a~ it% a .~.j ?,f' m+&.cw ,M4%,, pm f cj. x , 6, r",g'. q.s' p.^ -. eu%,4 <,*Y,)&p j ),y q .)
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+ w ..~.2%.+.=.Mw< w .. m .;
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$Uf5 Co nsolidated; Balsnce:ShshtsyM@@@$j;M[iMdMs*8W.W'O !&SMMP At December 31iiMMM.ds CQ47Jsa$$ @$p%@@,WMQQM1990 iffd5.M979N8 #
s m.
.we @ M g.g g. 4t"# 7'yM g. g A . A, 'e 4 mOF6D y M,r sFDiNc WG,M
' .. y ~
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, S'g.qqk@p; l %.& ppg
~f.w 3.J T., j t RJe Thm: W f%4
-n gp pigq~ N* @q,3,4,34.,'
ASSET 5 4 % w gyh4 e@a.-#f@j m Q % .y.w
.jMy%w.
.)QQW.;'.>%. L4 glmnu. .kM Q.: . Q...
',v -
fgw UTILITY PLANT: i gsw J/f*p., q g fy 'Ofh. in service, at original cost Y. . j. ci d .6.y)?.".dMM . g.p;g ,. p.g;;W., y og,aye less- Accumulated provision for,M/.C depreciation Lfi.Q .' V6. . '. .k.h. kW.W h'. M.*46f.W
.' .In f 745.2%#
n SQ 'QdMOMMOhhhh'fk> ?f /i#[h 806,739;Q Construction work in progress .V. . . JMg Energy trust construction (Note yk.;chN J?dh i. Npf;,2,203,923 948,228 f [h;1,908,
' !Ird 6pd!!*h*t;d@DT% #75. M4d@M/IM 4W 270,05' f
p Nuclear fuelin process!.. d.i t.7.@h)dM.N. i S% hQ.hf.'M.giCd@b$W 13,059 f11304 t[f FM %
. . f ,' , m.a; \ ?
. Y 1gQh . ; .Q
'#l' ?'g4. 'Q (
OTHER PROPERTY ANC INVESTMENTS:g x, W bgi M y9.';j $g gMy.hMgg.q$pqf g . g 3iiMb4t g N Construction funds held in escrow; including accruedi Common stock of Ohio Valley Electric Coeporation{restg#Yg 7 27.396 M' kM ky,jg.WWWgg48,334{ t N pggn%Q MfiW 9 I at cost (Note 2) im 4.s,1.g;C .:, ?d (Mh i;g J. .t.p@i.@f/ # .Q T4 (dQ.g#NNg1,6501i9.
. ,e M 4.962 ^ s Other,atcost.:.M!OS@%@Q#M' C Mk g b 7 }if.y A w G.b_w.%p@, gy pp .fNM 4
~ %* >N[ ;4.
,. s . m~ j.gQu .g s sas ..
o '32,660 p.3
,9,y q h95['..hh;g s f o.vy. u CURRENT Cash,.........t.w,e.:..yIc.act.a?'.h. ASSET e Y
g.[,$
'h,,w.m n r.r4 . m.;.yty&...g.
kh 4..r. %c. p L.wa @-$h ,mM h h
$j$ %M/@p.%g r12,924. h
~
,h..h6?h:.W.>,.h Receivables- ' J ! %.E NN'QD' f $1,247 000 andM*t9[bj6 w M.N Customers (less accumulated provision o , .
W M%.fS> e.d 'q : , . iM 1i 51,094,000, respectively, for uncollectible accounts)K.M.%?.@ F. 2 U.W %@Nld96 Other. ..
.........'.......'. O n % ..ri 37,975 ? 19,455- ,
Materials pue; . . and supplies, at
, i,
. .f., ' .M. .. .
. averagelost%u%w%@$g.We?.
n/w ga
..ym%% c.o% g,,g 9 phi Ulyi
~.64, 49 4@9M
' y'
.m- g,g 6
u Other. . ... ... ' .O. 8.W . . . .a. gM. .,M4'd,p WMJJ pf 34,393 29,762 3 Prepayments and other U. ih'.Y.".O.Ekt'D$,W.T
. &.W.i. Z.2 NJ%@cpMS.NKj#gg '14,268 9 l 12.286 4
~
^
' ~
7- g hh f. k :A . - O,p p ,t k. 290,007" h 223,295 DEFERRED DEBIT 5: d'-I ; ,;;.g,yr.piggh @ ' NMM y e v,y n.,.N: N.$ .N' - i . h, f f ~.fC'h* *4 Property taxes applicable to subseqt.ent penedA(Deferred %f,
.$i h.% fueland 312,144 dy. ,j energycosts!.Lff ,3,0303 t
. .? Deferred cost of terminated construchoo r
T .$p'Q^pW h'*M f %'d M,gTr.% ' d" gg+.Q99,9 38,772 Mp .37,743 . '
- z.' < 48,832yp 37,358 ,,.1 f *Other . . c.Wl@34'"# " p
" )g%,t -
"",N M-i D199,745gM178.302 c 1
i
,,g%g?g[f%gk r
m w
.% pseM y % - "
$3.979.965 g@53,4
%'My,g.xm A
[f ',6;. p ..wg. s gO p y , y
~
.y s 4 h_c1 kYh.h i[Nh(.3
- a)N h h hnn 4.g 7 $+ y - J Sart, . w m;
-.F .+ r E W Q yy 9 ",. M' n 2 -
. w. m%w ggf w .wn ;x u v.nmq h.Q, x . a
- y e p+. .
F, y w- . %agm +a emo .~ Qi % dis % & n& a1 1 Wt
- W-lnk
? '
r UNW wu o n p
" n0ud . ["dya k 6y1rnO+&.
? Q~
%m* "; .m: uNiQinWdm.<d ? i, "
.1
%y
& t.Ab 7.. < V l !. ?!.A*.
- v. x e . .* t.+.y*WiE, j ir %rc ,JVg3.-%y'%'d 7.#.7 '*:
a (i)[ kF. $%p 3Q 4
, gN(
hidyf %;t,t ,y k ~. / % d e I g.g,, y,,$QN,.') ['f 4 : r h;a ' fD4hM
' ~
? x[MMdi,.8D,wD
~
s at gy w a :.n m,.e, p ) y g ', as Q gg,,r Jg<m,eQ. 3 4
. . ~ .,,mw
1 s
&l l
. . Ohio Edison Company J l
" f ;.:' .
and Subsidiary Company 7 l s 4 , f_f 6
,L' ' f, l
* . . ~ '..,!
O.: 1 . . .;> , , .v
.~.
,4 a
Consolidated Balance Shie.ets % ., - E y At December 31 il.#WMc ' M r W W W,4pf m , ' 1980 V. ,1979 Q 33
> #y. g +qryon ; . M w:s e s~ c ~I ,A .
., .s- a jk ,'
s' sna : p;,.,g
,.~gy m - - . (in,Tho'usands)y, y w,a;. , y-
. w.frP : oa nrrCAPITAUZATION n . A ,v .~ ,m
. F. AND UABluTIES ' -
,J
, . WpA @geyrj . j, . . . . .
'y Jg' I.
CAPITALIZATION (See Statements of Consolidated Capitalization): ; Common stockholders' equity. ......U ...'.. ..... . ... ... .. . . . . $1,066,957 $ 969,543 i Preferred stock- ' '*# . s" Not subject to mandatory redemption .~'. . .'. . . .N , . 4. . . . . . . . .... . ... . 265,525 265,525 3 ; Subject to mandatory redemption ,'. . . s . . . . . . . . .. . . . . ... ...... .... 72,000 76,000 4 Preference stock subject to mandatory redemption .'.T.N. . . . . . . . .. . .. . . . 57,250 57,250 j{ 3 M7 ,, a- t
-{h :
Preferred Not subject to stock mandatory of consohdated redemption,. . . subsidiary .i..i .4[. jh,.p9 ..' , ...,. ...... .. 41,947 41,947f (j Subject to mandatory redemption -. . . '.C .~. .'. >.'. . . d ;i .~!! ; . . . , . . . . . . . . . 27,200 > 17,600 F Long-term debt, . . . 4 .. .,.s.i., . . p .IM. '2.'.2W/! . . . . . . (;b. . . ..... ......
~ _1,594,384 1,410,782 d ;j p' ,3, .o w . ng~ w- (, y .g p, , cd
~. n
,' y a rc A . 5 4 3,125,263 2,838.647 ' 2
, ~, c .. . . , . .wf,u.x,~,
. n.
.w , -
, i ENERGY TRUST OBLICATION(Note 6)fd.9 *g' w *g x ,,$.s.,.,,,..,...,.. 265,000 . , ' -
, -. ?N j i G%y. &t f h:hd *,;fkk.Me@%gGf@:% . iM';[.. '
~, , ;
;e $ @q 4.e;e WQW.%;J 4 M y.w1./m. '. ..
2 o:....< t %n...A, o. > CURRENT LIABILITIES: b 9 JWf.tfm. .:fgs.,'W.,ufmf4 J R + W ;q/,9 t h E,44 s .
+ * *g'...
..4
;('&
Current maturities of long-term debt and. ; mpreferred
...c :?., ........ stocb :y? 6, ~' '157,000
;. L 63.411 ..
Notes payable to banks (Note 7)s 6 d.J . IMA ,6 l[. Cf.M . , . . ';. . . . . . , . . 41,482 , 191,999 4 Accounts payable . . ; . . . {*dMifMQ y U (M.\ . . .'. .$ . ' , . . . . , . . i . . , 103,525 102,051 Accrued taxes . 4.n. 4.M.i . .MR. ..v.$c. ' i .:. Jal 5.W . . . . ,. . . . . . . . . . . 59,159 60,345 4. Accrved interest M ?. .1,$ O. 5 i M.'!!J,Y[. .#.J. f. .I.i. . .',-. . . . . . . . . . . . . .. . 39,697 28,975 ,) . Dividends declared on preferred and preference stock . f. , . p. . . . . . . . ... . . 3,973 4,159 3 i Miscellaneous ,;. . . , ; .d.k,w .Y.'.s. t.h , . ';i . .... 4 ...... .... . ... 17,867 12,382 ', d'M. M i h N. . .e < MO'N
.ig ,
- y. L W 6.yf f: g w .pd- w>
4 'C ~s 422,703 463,322 ,
~:
- a
>+y ., Q, 4 ggy y A;g y
.:.wg ;ply p. , ',
~ mm ,
me N .. DEFERRED CREDITS: . _ d Q 5 " i $$ Ch ', 1 Accumulated deferred income taxes ! / ,T. . . . .' . [I. [. . . . . . . . . .'. . . . . . . . . ... .. 84,630 39,784 i Accumulated deferred investment tdcredits . . . h..c.'. . . . . .'. . . . . ; . . . . . . . . . . . . 28,743 55,944 }, Property taxes apphcable to subsequent period *.~. J,. . A , J.b. . L .h . . . . l , . . '. . . 38,772 37,742 i Other . . . b c);i. ; f.X ' 14,854 . 11,015
- g; 'M [ . .hk O;,* 166,999 ,, 144,485
[d/.K .M;.",g,$M ,8 &;9,"d #y .h. . m~ . ..2" .t. .
,~ W[f,h!%
COMMITMENT 5; CUAMNTE AND CONJINGENOES (Notes $. 4 and 8) ?. 3.Z J,4 r.
~
c, I . fh f The accompanying Noteg to Cgnsolidated FinancsaIStatements are an integraf part of these balance sheets./ W mn . % <a,Q .. o(*. d
.s ' c,. c i
-r g.ew.w w&pWy @M m
pr . ~ ,
.',e. -
F hy
. q ,s. m,hAqkhy$&$m.-.m.
,$,m.e:m.h a 4 4 % a, aM W T.w?.m mmy.w
.1.,.L
.g w w $ N f,y-? ?. 0 + Y, - ?w 4h+N en-4 a ,Y .q . m me.c~w. :, n r + ,
~ ' N' 7 ,,pe e s. wp.n .. p., m $;f , - c - ,
A,@. , Mm.v.m $ wgh v.f.s y f f,
,hE
$ .h.
i
?' ? \
. .. v y 44 w m e w . sv r , .a >
N . , .. W 7 .. . np%f m.g kgM ~ an YD uw h$N-.N.k~hM"e~Lu s m.mp wepw gg; M,s.M,%w,@;e$x. o g mW$ g, gum + Qm .n{g.J'&n @
. wi..,4O+..eA yvn
. c, h ;
g T
~ <e-m' MggMMR$
i
.1 ygggg m%Q%ygues xm &g R;fy M
ym h a%m%w]VW4WM gug,gggggg m .h..P: npE M wamggggg emnu
- ~ _ _. _
.4,, n.
y , m~#
., . . ~
.L[ ,r
, e a
' . ,, M Statements of Consolidated Capitalliation - -
Vf,.J At Decem6er 31 ' . 1980 1979. COMMON STOCKHOLDER 5' EQUITY; s
'y,M-
., , i + 'a> c , , .; . k 9 '
x? (in Thousands)
'(- s-1 Common stnck. 59 par va'ue, authonzed 100,000.000 shares-d E lC Q-- 4W3p g .i D,,J 68.526,172 and 59.622,369 shares outstanding, . ,.pa respatively (Note Sa), ,.$".616,736 , . p.,M,hl.).d4.. $. 536,602 ?,. . }34 ..
Other paiden carntal; .. . 4 . .. , s. g. , G. 316,629 282,389~ gJ$ Retained carrungs (Note 5b) .4 % ..*4 l/y a .. w f.4. i4.s;l. d ".4 .t.i.d M d .n .- 'cr J.-h.ii's..r.IQl. . ;, .J.133.592 4 4 6.. y -g'". 150.552 y c b y ,7 L Totalcommon stockhddersfequity , 4,M*d K, ? .p.pphd(fl$r%. dig.p,4hfM @ M1.066.957 M g ' [ 9%543p Y
-' y p ,(..
ay' My[,0 f p g )g pyegd M gWOpe@al {d yg yv .; g Pr j i'M J h t/g s 1980 gg.1979.h( T Perbre*%A ._1housands) [' Redemption ; M 7b o - !, y . . J. i - @ gj. PREFERRED STOCK (Note Sch .i s ,, Cumulatne, 51CO par value% Authorued 6.000.000 shares 1 h,VQJd1[f> o 2 %.' QC
%FA $' K[@iW
" s
.'$g".@j*$j,
-a
.A
%d fy Ug7s.4,L@ Q h 4 ,n . M,' e' '
- GM t,* E *. A
- '{: ' ' Je# "* g" 'g
?
q f !g' Y*W M@hq.4 y Oi NOT 5UBJECT TO MANDATORY . - , I
*'*AO N
diCip O [Mi*7*"'*w f ' . J .> 4 i "S.MI1N, -- ' y q ^ Gr'.,y pt 3 L i , . . . , REDEMPTION- ; ..
.,100.000 3 90+ - 7.24 % . . .J. H.,100.0tn 7.36 & 8.20 % . . .n . . 3y.MN 3.,M.* $1.000.000
. 800.000 A 800,000 ([1,000,000 q .106.520107.400 A $[$101375108.000. f
- 85.612 ;;,,' $105,468 80.000 , 80.000 w.. M*p 8 64%--9.12% . .
.. ;. . n . . -. . 106.640 109.120 . 92,560 85,000 85,000 ; ' ' '
Premium . . ' , . . . J. J. 4 . L 850,000- 7 '
* *850,000
' - J- a/ ,W ^ s ,o - 525 V
.s..
D r, . . , 52Sf.g '.
+_# h P y@3 t- ,. y Total not subg<t :o 3 ,, ,%ew .' Y mandatory redemotion . . . , d. 'p.7 7.650.000 'it.Zj$0&q. Mh.c pt 4 ~ . /%* h~,. ; $283.640 A . . M* 265.52.1 265 525 p 9 ..
SUBJECT TO MANDATORY
,r
,U @ ret g,,l u .
.. . -d- 3
;3' Y* 9 OdW f" o. p/ W 4 O M -h E'C W .~i.g. 'I.' y REDEMPTION (Note 5d):
10 48 % -10.76%. .... M. . . e og.Q" -r
- 740 n00, 'D<'k]
f '780 0 W ' 00 + p $107.860,111.870' 74,000
* - - 5 61.260 .' 78,000 Redemption w:then one year . r;4f.M.,wiMG 4.Mih.g..n.d.N ;w.'. ig~ .. . , (2.000l (2.000h Total subeect to a4' YdhM.C.yd l , .-
+ ~76 nn0%
..A 4.~ bIl 72.000 mandatory redemption 9. C@M% l@LU d *dhipg $(y.QL J/NK...s M !.
PREFERENCE Cumulatrve. no par 5TOCK value- (Note 5c) D '. [ hyN:h .' ?h Mk y 7 4.; . ~> 74
'$. . ,W J
;3;;g , . -a y, .k I.
#g(/i n.
Authonzed 4 000.000 shares3d
- AH gj MA ;j ' '.
,+ @x Mi p W 34 g,,r,My"e:p:t.
;g M k h % 1-
- 1p , g 5L'BIECT TO MANDATORY -
A*
%* '7 - @r .
* ". l, .k.
- -Q A <W> 1.& b " .i t :f .WY: W OV % 4'
- RlDEMPTION (Note Se> ' ]' :T f $i; 27,000
[..//.[J.Q.h .s' 2 .. 595 00-5102.50 5enes ~ 9 27.000 Y" Wn$1,095.(XDt.102.5003 l5 29,700 , 27.000 ' 27.000 .,k 5180 Senes . ,y..,,. :.uJ. 4.W2.000.000 $000000 70.g 516.925;.f; >lf 33 850 ' . 30.250 3029 / Total subtect to i.9'(eefI% ' *. ".U'W Mt~ W-e i' 027 0nD j.j: ..yp b g' 4 % mandatory redemption . ... 4.;;.4. y 7027.000 W',2 *
. , _ 5 63350
. 57.250 57 250 1 .
yy PREFERRfD STOCK Of CONSOLIDATED l% h $ '. M?4%E/',i[ k M t.f ' ;.
%UBSIDIARy ('kste Sc.)- . , gy %.U Qi; yy(5 y Cumulative. $100 par value-
.. L o k L;w , yy f ' ' > < .)
Authonzed 740.000 shares c M ', -4 + Wj.D' . ~m t , s.. .3
%.Q ' S '$pJ"M. b. :." 7' ".$,.yrp*M ,I NOT SLBIFCT TO MANDATORY $
.?
RE DEMFrflON: .
% .J *
' - 049
**e e" 5. .k 424%-916%. . . , . . *. . . R ' 414049 2' ;'419 '
,%, l $102.98&109.160 , # 5 44.538 41.947 41947 3
$UBl[CT TO MANDATORY- I; , /W*' .r r ! ":.Q:
N-n 'q,mN hMM bh ' . r ~.,b 3 M. USr T / .
.I-
. cvh h
REDEWTION (Note 5d):
.4 J.Q.W 272.000 y180.000P . $108.240112.110.
- 5 29.4a6 27.200 8.24% -11.00% . 17A00-Q.
LONGTIRM DEBT (Note sfh
- 9 AM. s m N. j 33h i < W. LyO First mortgage bonds:
g, , 2 t % S o ONo Ednon Company- - 10t tenes due 19M - /
. .<J'. . . . . . m. . . .a/. .Y.Q. . J. .' .4,7 M . w[. .... s J.,p.
, , ., d .:',[%, - ., 3 d? ba000 '" , t.;
,,fv' p
'.O 3-1144 5enes due 1984 and 1985 . . .l. . .' mr.. . /.-.O hJ,0.. ...'.........
../.i.r. .%.%. ,. i. O . 50.491 SQ491 - . 1 4-1!4%-151/4% 5enes due 71/2%-12 3/4% 5enes due1995 through 2CD3'.d.Ql 4.C.dtl.M 1987 .
through 1991 n
'ji'. 4.kJJ4InLad
.M.V
. . M . . .Wi. .l . .. .<,J'
...,.a.,, 150,000 425.000 100.000 325.000 a r .
g 648%-15-1/2% 5enes dee 2006 through 2010J." W M M .... G ly.WiM a ;. /~ .C,14Q.N. 2..h t 17
. % 465,000 31 tono d , 440,491M
. % /r(b71 5 5-
- {. O - 1,090,491
~
yyc.1 ff qn. 6
- y. Nl. ~~ 4 P A e w d'.**d Pennsvivania Powerthroud 2008:,.Company Tg.,iY sS '."NN%.$oQ*AD.y. g ~ [e'4.nM ' gk.Qg 177M . & .
;? g, 344%-10.9% 5enes due 1981
.A .. ' 194.805 N;&# 11182% ' 9 NNp;e,3 4.Q.I.T.Od&: #
Total first mortgage bonds l. 1.285.296 Oh.onotes
~ Secured Ed. son Comoany-and obrigatore#
u 19n Senes A, avmge interestrate mm, m4 husk m%[p, N' WW' '" %hpM%em% fT.fjMdMw
- -pg
%g. pp.v..Wr '
D in ; ,
' 35,000 .
o w. .
, a p5.000 y% h y '
1974 eb-& 3/8% Senes A and B, due 1990 thsough ' A:Mg % ? 4.f gL,.L.g S . ;; 30.453 .
' , 30,453:
w., iy . 3 40,000 thr1976 7-718% Senes D.P h.4 %9 ;gMdd,'3f '. 8,186 2 4a000. 8.186 . fMj
- 1978 7.3&E Obhganon, d0e 1988 200 due 1992J%.L'. through pfd 2006 :,.bMM w%hA9 1979 74,&b-9.206 5enes A, f and C5 m 1980105-10 tew Senes B, due 1990 throustr2010' <
1995 ' - [ ' *N 8.W. fN. W2FnM,Wl b@C #
'. .rf: 4 4 w '
53.000 50.000
, - 53.00& ,Lp M
i he ii' Pennsylvania Power Com 1973-1979 5 3/4%-e.3 8% b due1984 througlt ' ' h 4' h '
'M 47.961 L
47 461 .
%.4. j. 4 MTA$ hvW.',.3 214 6m ' g 2c?4...gu Totalsecurednotes andobriganonsM,?. /L . lp " 264.60_g 80.000 y.
q
- s. unsecured notes of oh.o Edison Cornpany.1111
'i MNet unamormed premium @eunt)on de@
'due 198h M
h ' NhCM " p@ O f@ NQ 1.594384 50.000
~ (5.512) (2.114L W
$W . ?c Totallong term ded a.M J w ,s h p Q $ $ 1410.782,M Mf TOTAL CAPf7ALIZATION(Notef$ p a '%NQ bdyM,[% jh .fj d M ,U 53.)25.26) 52.838 6& j Yj wemn m s36-a .- g .x; 1,w n%' Statements are an meegr x.~ 4.w ~.,v.y L,. M %v.;.3 g Thhccompanyng Notes to Consolidated r nese statement pLg mt bis MM
I I I *.
-f c
~ '
mi ~
.. . Ohio Edison Company 2 Jf ,
and Subsidiary Company M
+ +i ~ . ^ w. ,w.
- uw,ga,www,. q. .(
;. a ;p j L
.m :p
~, ,
~. . p .
x , ...
., ,a f:j x
9 M Statements of Consolidated.Is.$q,,yiNdd EiNirfgM,. . %.t 5. , ,. . . . .. . w
; For the Years Ended December 31 - e W g @ N W e W W g M!Y 1980 ' F - 1979++.-:<,i1978: Q%
- 4 n 1
<.v Fy% Thousands)H .p1 .
,.;;.,b.W. d150.552 Q Balance Netincome . . J. . at beginnirig
......6;A.i.'M %CQst/WO'p of period @ . g.gh 4g.bfWn%yg%.dhhy Ny 135,150 i + ' '134,807 = ' '"y@,M.%
86,030 @ Deduct:
, , ~ >
;~ 7 '%
.t
.hea I .
&c
+f
; ; 285,702 ,, 284,422 ?" ' 266,560 n DID4NO:.I ,724 t
33 29,950 24,945 nO Preferred and (reference ., . . . . . . . .;. .stock dividends . k! Q Common stoc dividends c.4 4.M;P ':'103,356 90,790 . .; Capital stock issuance expense ~ . . . . c.d.yy Q.".' R ^J." ;,Nf/h 249 hh.h.y Q. O.'.118,137 564 1,210 .
.7 -v yy AMh, gy b gn % q. 152,110 133,870 116,945 Balance at end of penod (See dNote
. - t. . L x We 5b y, for dividen,$,,g;g.q t. ? OS. .% - -
.s restriction) . . . . . . . . . . . . . '. . . .'.4 -m d. . .
~.%. . f d, e l$. 3.s, .~hf,o@r.M,Wy%, o.
$133,592 -
C $150,552 ;j 9 . $149,615 4 j [
- . . ,owymu w .y ; .: ;
yQQj.Q,QW
,:g /,5 yl0 } a&m ;!y. ww n., g :srm e, pgnvkm, 1.
g {
, c. m Qg 1 w'
.. g m /&. ag. '
Statements of Consolidated? Cap,,it l'Stod. g. and Other Paid-l'n Capit'al@MM$@@&yMi. s%N " l@g, ip i n >.o - S:Wg a R}c. &% "M W@o.O a-ils , O: *4* Preferred Stock ' # %' 9 + .MiWqd.Wff,QT.y g gyt/j6fyr'nf;. Subject to S
',; e s 9A Mandatory 7 Common ..q;k Stoc .MY';-)pm:'o Not Subject to i. iM Mandatory Redemption -
Redemption y
.c ,s. MY.Other jfy 6 , ,, OK .c ,
- Number , ,i Par gf;, Paid-Irqil Number : L Par ' .
a Number Par of Shares Value b Capital o of Shares - Value Premium of Shares Value
$: .. . , , (Donars in Thousands) j Balance. January 1,1978 .. . 51,206,665 i5460,86')$ $225,335 2,619,049, 5261.905 5 567 980,000 5 98,000 Dewdend Reinvestment Plan. . .913,565 17 ' 8,222; y 7,087,4 ff- @f - - - - 4 g
Sale of 9.12% 5enes. . . .. . ' * - W F' 7 ! !-V 'R:u @ J 450.000 N 45,000 '
- .'i .i Balance. December 31,1978. 52,120.230 ' 409,082 1 232,4227 , i3,069,049a,306,905 , 567 980,000 98,000 s Sale of Common Stock . . . ' 6,000,000f 54,000 ;g. 41,820 L , e -- 1
-(,f - . - - -
Dnidend Reinsestment Plan. , s .: - > , t' -- - - - Sanking Fund Redemption 10.76% Senes . . . . ., 1,502,139 w < ' ..'. 13,520 %
- e Was 7F U -r
.8,068 .-:+-s*Y.MJjd,W'p s *
- (20,000) p%.(2.000)
Balance, December 31,1979. . . .
- 59,622.369 : e 536,602s - -
567 960,000 %,000 M,
~
Sale of Common Stock . . . . . .i L 6,500,000gf 58,50h,282,389 J" Q J 3 Dividend Reinvestment Plan. 4 l 2,403,803 g21,63Q-f77 K' 4 , pe M~ d ~ ~ ~ '
H Sale of 10.50% Senes . . .b ;Q M ,-f,AQp b f .'" r ; O A 100,000 10,000 Y Sinking Fund Redemptions i f, tM fM M.d W *'yW N.;u t U' #6g[ U (2,000)
"Y .
-1 10.48% Senes .4. .Op 10.76% 5enes . . .J . . .. < . , .4 d &* '
. .M. .. .$h/1753 J. , hlI d.lyMy: bbA ip$ M260 W@M+,4 We (8.000) b pa ! ; , 3
-! g ,h;h i
(20.000) 4 , '(20,000) (2,000) 11.00% 5eries . . i.% /$ MAS MMg,4M/?/21M)#@ . (800) Balance, December 31,1980,Y. 68,526,172 4 5616,736415316,629 # 3,069,049 : > 5306,905 54 567 1.012.000 5101.200 .,
-A i; 1 t ;
The accompanying ~ Notes: to Cmsolidated ipfinancial Statements are art:(integral part oQhese statements. G f s l'*
- Q. RNQ
,f,'Q _ ..yffy 'QGG.,&n, R QR 4.Q.9
.s uy'N&yy'QW.? ,2% Q' r &
.;+
% w. 7g y yrs, mi n.
h g. w &g~o,;g
& &.e.
- p. mm x W+
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,& n <
w ,._7.~ s p- w ww e in 4 . qw%.y
, 4._
q fpg ,,c> w n. k +.
. ;pm w, ,
O 76d +W-M* m' .M % % >%+ w% M6 %.q%K 4k Vd d ',. -
.N f,, i l.. Q, %. .
~ '
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e i %, L , p y $. w , , k? Nijk
~'
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$^'l.';',^dl.f,Q.4r;&Q&.,
1 hj awn [,h d k h hm. & .Q U M%Mh.h[ .,s f~ 6m m,. a m%...mmesw c. n. & ganww.c
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ay
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.,5 . m u p.s.,,. w,~w,~ ,a > m,s..y p. yw . p.~m q x.
n
,. .:*.aas n, , ~. -
Statements ,of.~C665olidatsdJ a S- os;,~c..esfof
~ FundW:ww.WE5 S
.- n. L- 4 for Gross Pro. perty; Addit ons , . h.1~M%b. @.gPf : 'o c~ .
.:s .
For the Years Ended December 312NR&#Pic P.WCitNYW2M m 1980 M O Ur1979 a' n1978 d SOURCES O Net income.".%:MM2 p h h f.;if !!! ' ] i $135,150MrT$1 e 07.w.:h,T $7 86, } Less-Dwidendson commonstochl f gv djf@;3k,.
, p VN %,fA 118,137$ M103,356MM
~
Dividevis on preferred sod pied rence,fmM stivk,".fp iMW g.S ;Ny f?dd,M A 33,724 24,945 i K$29.95 h E ~ NN.h; hk N K5017.r.i' (29,705) ' 99 Pnncipal norycash itemsW&9e%@NM[gfk>&w , S.f y ';g . e. ' Jit' . a -- {'hh{jk,.y. ,. Deprecation Charged to provision and for amortization depreciatical Ji. +MwWe'c.,;gn. i M .l.T. 85,455 y,~
'7 ,
r f 81,224 E , .^~ y ;77,812 O j Charged to other accounts @ A.hd;.:f. 4 X<.dA . , . 1,282 . ' ' ' : 1,5% i " 1,857 d
,'40,636 2,910' < (350 N.
Deferred Investmentincome taxes, net 2.yd ip% p@M: g~p>dif.M .: [Y'E et '.(27 5 201 . ' f ? 13.815" % (13.893 O tax credits; net.MiJS. Mf.g.J;.MW3dfc , Allowance for equity funds ided,dthin g'constnict onW M; MMb ., ~ (57,715 Q": Deferred fuel and energy costs net of deferred income taxesMG.M M.(4,904 W (50,571) ~i, V (35,895 3
. 806 s J , , ' s (624 1.f Total funds from^operationd$%$$.if.k.# 1 D$dh,. . .h 20,842 N 51,2812 -- . (798) financing actwities-MM'gprern$
i ND$NkYN$ddW, x 0. m aa 4 n;% 15,309 _ . , Common stock,includin iungR,@,5N.k d WJI.T.:M113,918 ; Mk117,400I;? a 7AM&%ET.WUF M^$m@7E,. V 45,0000 4i # Preference stockNMdigM Preferred stock h.%&Q@pi@Mk$2Mpa!.MN.%27310,000P. d%5,57,2502
.' ky- N first mortgage bondsh.*MQ@7hhbl.MMgM@WNW Secured notes and ob@ations QWMb$$Mi ."iDid 322,000
-d!7.4 :59,000 50,000 8 500 i 20,000.M@$145,000 Unsecuredlong-term.notesiM Energy trust mi .WNNk.py, %df.f f.1Nh. 265,000 P.! AN.-W80,000N@k
% Qg5t.N4;.d2M. wad 6 NM3i G M, ~O Retirement chong-@feirrideh EricI 'eferredstikk increase (decre,ase)in noted pq w e to banks'.
(95,800). #5 (32,000)J.% %%Dfk@.Ef.% 13,000) ' .", 2 wm w e b ~ - Net change in current assets M excludingh; andg& M .gg'g(!7 r current'llabilities%u
.t 514,601 gy.- 357,053 % " .285.430 7'*
- C i:P _ .4pg ^ . ..
~b,w N yMO notes payable toW6 banks and 'cunent S & K.a rnaturities uf of long-term $ @Q;,W 4 u i3 investment stock @iM$;%$ib ~$68UM.k.$!N.M7, yNH@ Y ,. I -eC %
e debt Temporary andcash preferred '38.'000 Receivables ;cl .'r(.@l.T. 'aj . .'. h MA R.R J 29,171) : 1.Q(13,235) - m (15,412) ./ Materialsandsupplit:sMg/{sshC@WW@%.N.W.pl@!Q wy . ( } (33,&43) . " 1 - (267)
. M g12,0 '.J l Accounts pJyableMCMf'h2 1,474 Wgh 'E 6.500 h tt-i-iNiQ.7.$%Wh c. O S13,734 ;; @a t * "2,548 y4 Accrued W C.yW taxes % h h. J.WV11Y,df;MM[Mh;$.D M.%M Other, net , .~JM,I4.S. L , %, = M,,g na E mv sv (4.005) .
989 7 l 1 l
! M k f M , M K h D M N N $ _ y,i-M nyMWOw? (50,403) 67,598 j
~
Other, net- 1 2km 3,545)" " ' . [ f 11,461; y Construct Allowance for onequity funds funds helclin used during escr6w,incluhng construction:JMQWM.b accrued interest CCM ?g -35.895 i(20,938) Mrstellaneous,netWG' M MQpM.Q.Mj (6,797) /Ud ,.5. Cy (9,533)y (4.424)' Lf - 54 ll
.Ni nM if$n M, T,' ' b)g#u$fk'd[Y j$@N57,715 l
ADDm h nru m42.QPhg,@ 29,580 Z,Dd37,493%Y
- w. 5395,162 . - 42.93 a '
CROSS PROPERKswww .m S g - e n d g c ,J dfinancbbf$tatements arelbtby $515,020 O -M 5476.746h tY ya The accompMb tt% . l MN,.hEfpN ,. ma,, 3 T k.h[h
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y y$ ,a msum Wa 2lg/ f&V3!n v m ; Ohio Edison Com9anY T 7 , at s ce v 3a s m% f5m
& m% o w%, .
w,we er 3 r.
, .s .. n, p >c .
t Qe . .. a'nd a ,y~u. Subs ~ *d.iar -i ComPan-)' ~#.,' , , s ]nngw .t 7 ,d ' p((w*'3% ik') ka gj1. waI, w \ ~ '$ wm :r g . .n g %.xmn .- _ g , . p ~ f ; ,, , ,, . x : , - . g x : a Statemdnts of.ConsolidatidlTaxesW
. A 'a? < : e . e : .o j.s For the Years Ended December 31@W ANT!M@.CM4 @ ': # + 1980 ' M N 1979) m
>1978' S d
" CENERAL TAXES
.. .u #4%M/ W; dsp.sgJ1.%. .nk$ 37,183, 7 p,M41,042M syu $ 33,971 State gross receipts J. '. M. . .QM ' dE 38,753 4/N41,127@? .35,2651 A
.Real Unemployment and and oldpersonal age benefits ?.s M property N,WJ MJ Ku& [EsNMG.@J;g[-W@4h
& ( , . 6,408 %.M 5,569
~ ' 2,799 ' ' M ~ 1,384 4
' -4,645 ' J7 2.923i; 1G 7 Miscellaneous.
Total general tax 5I. . . e. @MNIld,.;WA . ict T @PNM bM d >Y$85143
. . .. , $ 89,122 5 76,804 5
. s ~. s PROVISION Charged (credited) to operating FOR expenses:W INCOMEq.s, TAXES -g,2 f$.n.n4(468 Sg'. ,s h 9 y Mf,y:f 1
- FetQ'q,$p @ty.
,, . '( (;f
.y
,Q W.NW% ' W%, h .. b . . v c.
. '. p kQ*.M Wh/Q~;p +M tb ; > ' i 1,391." WU 2,001 -M -324fdf,i Current! payabfe- :
~ %
Federaf State ,c,.. C ...T . . Pdd .p'.U M di.$Q)Q ypb@Q@Jfy.UT.' M,f $ W,583 '. t M5 24,153 7 C $ J.7,350 a , $ - 4 M% b; dD N h?hb .33,974 v ' 26,154 / ' r ' 7.674Nf , kki $N Deferred, r (see"b low I d e hi Mi/~.Wihvi L n[~ 4f A g,+ l1,789 4
* ' (10) 31 Federal State . . ..:.. .. .. p",.f.1 '.V. M@G.C. J.yk gNP ac.?q gDM.T. AW'. WWV 43,830 L 1,016. 4/s . 240- N' " 212I M
,h k%j 44,846 %h 2,029 202-' h investment tax credits,IneM w T: .mortization p)',g.4 a.hh
- H (27,201)
Totalincludedin operati
.. . - ng -
QMy. gdW.+%.:~,.
,pm wmGh
. /,$, -51,619tllu @ ,141,998 %> , (6.017)g ' ',M M,,: u 13,815 Nw i - (13.893)[i m A
Credited to other incomi.ngexpenses W WWu . r'" a. w RM Currenti 1% k *
.:F ..[p r,p ySp %ygadr.M.D4;i%e
* %MhMM dp ed#gf j .. J ,MNh.c!4 ,,p ]
Federaf payable .c.v; 6E M 935,626) s . % (20,422' )i '
- M (8,878); .M. a
- Db4@
; (767)' 'o .,
State Total..... ... W. Z.in included . du A incomeiyp . &@ other . ic .M...g.'h w; ;%M. ' " (1,391) (21,189) a%. (9.143)'
' (265)i.
g , Total provision-pfor income taxeMy[h. my V.C.yd m J A ;&...5(15.160):
, d ; ,.M,N SOURCES OFconstruction DEFERRED i .a gy c r&4pN .
TAX3)ME EXPENSE e
@y){W;pq ;W:
W,EU.WAM@n
- e. ~ c.'
Cost of terminated projects (Note W["$ 33,181 N' E $3 - v / ,
$' - F 1 Excess the Class oflife taxADR depreciation depreciationallowed system, netM
%$hbMW pursuant to)d[?QdMhSh.? WN % 9
,. V 2-
' i! .
V s 1,768
>4 N Gb ,334 M. ,J M
Accelerated facihties covered by amortization Necessity Certificates % of the yXb!df.+@ cost of 4 CWcertainY%QW@d ' E. ., 2 (1,382); h^ o . Amortization resultmg from liberalized of previously depreciation deferred //C. income taxespM.L .;W. ' &" .M.t" (972) .\' .;'Y '(1,176) s : (1,442) ' Property taxes applicable to subsequent net periods,M A. . .i. .J1. . . . . fk 475 ,s 123 706
'> 40,636 f (350) rgy" costs netWW SQ1p. hMM : 4,210 Q.Wy 2,910 pFO';db (881).* ~ 552 Deferred
. Total deferred ta(expdiI/,gnitIfL RECONCILIATION Of.FEDERALINCOML
,, % *. fuel and E M ATh
% % fh ene$1NNedW%'WR@9
% ],. $ 44,846 MG, e %~pF W
.m o $ 2.029 ,, r.-
$ 202
.' C,
,-]
' STATUTORY RATE TOTOTAL PROVtSIOhffpR)WJJlCQMN hi@dillhb@ @,p 4, / 7 M $155,616VNh. % $ 70.870 W
Book income before proWsion for'mcotWtaxes -..
- dr w w%. M$149,75209r g-
' Federalincome.-
e tax expenkht ww6rmw.f;ykry statutory 4 * - r,#. .$ 5.71,583.in %V $ 34,018 - M Increases (redo tions)in taxes resulting [ gNE" \}68,886 @. fi M ']a
.gf.M%$Ugd%.5,i W'c shgm %
'/ > ' >Allowance for funds used dun'ng'constructio V
~
. w W i WK k ~y %l(49,003)[7..cp,h(36,781) which does not coristitute taiablei
. Excess of tax overbookdepreciatior@g;fNg L, Capitalized penslott costs,andtaxes
$y gg 4' r.
Mh(6 5,874) ek@eg(9,918) 'p lf; C g ' s(18,423) ;l.
?
) . lD ' (1,765)- N currently for tax purposes'PCP" ^ - 4.uWT!.q%,'. jn
.MTkN @ hb f"f :(3,326)f@j$d,gM.M.2 ((2,
,.r ' Other, net i@a u.hp f &W4M! 3,919 -i n 1,401) 4 ., (1.659) e:
v.4 a 3 e . Totalprovision)s
- . + .r s,w.
~r...Vio ., _._ .p.
W . e . .,mcom,et.axesy,,m9 etgegy.p,. gfy-[n s> o %mff.,
- 4. 7 5 - 14,602 ; M. $ 20.809 g $ (15,160)
< _ - ]
M Amounts for 1980 and 1978 refec Investment tax credts and related amortizaton, now being camed forward due to [y,U ' the carryback of net operating MtMgM%4, W(IbEfewerealel" @@b;4fM'MWWlikeyM&W;'ONE t P-O ;The accompanyin Notes to; ia
~
'are ar{ integral pa of the statementig+w wp 3 YYkk%
ap .
. ~i> %
- t. f; e
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g Summary of Significant Accounting NN Policies: ' 4 The consolidated financial statements include Ohio Edison generating unit in service. In 1979, Penn Power began pro . G Company (Company) and its wholly-owned subsidiary, 'viding for the cost of decommissioning radioactive com- Q Pennsylvania Power Company (Penn Power). All significant , intercompany transactions have been eliminated.The Com-(j . : ponents only, in ac pany policies and and Penn practices prescribed.by Power (Companies) The Public Utilities follow thea accounting {(;CC Croup (CAPCO) co'mpanies own, as tenants in commonM
^
Commission of Ohio (PUCO), the Pennsylvania Public Unlity Commission (PPUC) and the Federal Energy Regulatory 'various power generating facilities. Each of the companies ism Commission (FERC). The more significant policies are sum- obligated to pay a share of the costs of any jointly owned h marized below. " facility in the same proportion as its ownership interest. The. 9 Companies' portions of operating expenses associated withly Revenues , these jointly owned facilities are included in the correspond-L q The Companies' residential and commercial customers are ing operating expenses on the Statements of Consolidatedg metered on a cycle basis. Revenue is recognized for electric . Income. T'.e amounts reflected on the Consolidated M service based on meters read through the end of the month. Balance Shr et under utility plant at December 31,~1980 in- 9 c et w ng: Deferred Fuel and Ene Costs . s amnxaadworit comnL conQ j uthey Plant J Prowsson for.- in . 3 Owrership The Company records the cost of fuel when it is consumed, hneraung uns = n serme oe m iaoon - Process - ' interes - m except as discussed in the following paragraph.
. on Thousanog u , - . , . .. d in a recent fuel adjustrr.ent clause hearin'g, the PUCO s,$$[,",,"f,,'dd" w29 - s 2m
. {36 . Ja A
ordered that the Company not include the cost of coal pur - ; - #2 2nd .3 . . . .. b 66ta72 1 chased from Quarto Mining Company (Quarto)(see Note 8) VM stws M 12o49yesamWk 42,792 ; fC x2s7 s2w
' 8"va'ney e"2 .:, ~ . ' 3s(636 9
- Beaver -.- 4tsesM,lp
'b 4 ;-+63a296 t 364.566 in the fuel adjustment clause at more than generally prevail- i < rerry st ander . .. ? Y- - ' 3s.24w 4, ej ing market prices without prior PUCO approval Thus, the . Tow . smus ss m w Company deferred 59,852,000 of such costs not included in sti2aw = 3 <1 f the fuel adjustment clause since June 1,1980. In its order, . g % _ ,,,, g, ,,,,,, y,g ,#
y the PUCO stated that it will permit the Company to recover M see Note 6. < . , ,, ', , All nuclear fuelin process relates to the CAPCO units'buf is N Q ks actual Quarto costs including the previously deferred : not segregated among them. costs when the weighted average price of Quarto coal for 1 , Jq _%9 Nuclear Fuel' ""' six consecutive months approaches the level of 25% above .
. ., y h gf the generally prevailing market price of comparable coal. The cost of nuclear fuel is charged to fuel expense based on Q Management has no reason to believe that the PUCO will the rate of consumption, assuming a zero net salvage value. .-
not allow full recovery of the deferred costs. Storing of spent nuclear fuel is necessary until the manner of Penn Power defers certain increased energy costs which it : its disposal is determined, which may take many years.'A estimates will be billable to most customers in future January 1980 PUCO rate order authorize periods, in accordance with the energy clause adopted by begin recovering these disposal costs from its customers.J the PPUC. The clause provides for: 1) the recovery or re. Penn Power will seek regulatory approval for recovery off fund, oser a six-month period beginning two months after these costs through its rate case proceedings. incurrence, of energy costs which differ from established ' 4 base energy costs; and 2) an adjustment for any over ' - A!!owance for Funds Used During Construction' 4 under collection resulting from the operation of the clause. (AFUDC) N Management expects the PPUC to allow Penn Power full ,- ; AFUDC, a nordcash item charged'to construction'(vor 4 cs recosery of the deferred costs, including those relating tog s pr gress during the construction period, represents the net:q, changes in the lag period, or any other changes, in accordge st of borrowed funds and equity funds used for construc g ance with the objectives of the energy clause provisions ing,tiori. AFUDC varies according to changes in the level of corv : its approved rates. .3 ,
.6.'
- l stmcbon work in progress and in the cost of capital. The r9 MlvW 4 Company used net of tax rates of 10.14% and 8.75% and a e Utility Plant and Depreciation"(
Utility plant reflects the original structiori,'in.:11978f cost of con $@@ j grossconsistent respectively, rate of with 9.5% PUCO for.ratecomputing treatment.1 AfU duding payroll and related costs such as taxes, pensionsand Menn Power used a net of tax rate of 8% during all three 9;, other fringe benefits, administrative and general costs and Eyears/ consistent 'with PPUC; rate; treatment. AFUDC apgk allowance for funds used during construction (see AFUDC).;.f;' plicable to tie energy 1 trust is based on actual interest'ac-; M The Companies provide for depreciation on a straight-line cmed during the year (see Note 6).fp, f fM V basisin at duded plantvarious in service. rates The effective over the estimated composite rate for E justment lives of FERC in the propertyin-;MThe formula used to calculate Company's the rate.The - t198 electric pany's plant was depreciation 3.3%provisions rates include for 1980,1979 foc the and 1978. The Com@g{significant under estimated decommissioning costs for its ontp nuclear @ ;gress in1980 as a resultof.the failure of the formula to give 74
,_ .7 " ~ ,,yyy$QQQ ?@J; gQQgf ggg pg gM;gg p: ,l ; a.qQ n W j M' Q
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. 32
~'
m -
'.y U@%
b . o.w:w,4 mn? % C.WQQNMMf39 w f :y 4 y p w. g 3 G n m $y Y X / l p x %u A t e _w . w 2 s ci u h 5 E Y,7 , ~ N &WWY 5&AAWMMW8kabh? m _ y"'b
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- , [d adequate effect to interest costs actt.allyincurred in financing service and compensation. Pension costs fc,r 1980,1979 and $
3 construction activities. This adjustment increased 1980 1978 were $14,931,000, $13,731,000 and $12,008,000, r , AFUDC by approximately $11,628,000, net of income tax i ' ' respectively.Of those amounts,59,259,000,59,163,000and@ ~ ,l effect. The Company received permission from the PUCO 3 i S8,058,000, .respectively, were charged to. operating'exy ( staff to record the additional AFUDCisubject.to determina/ff:7penses The balances were charged primarily to construc~
~
tion by the PUCO of its includability>in future rate base /V tion. Such costs include the amortization of past service 1 il Management has no reason to believe that this amount willTf costs on ar. actuarial basis over 30 years. The Companiesj ' a be daallowed in future rate proceedings. . J Income Taxes
~
., ~
. f(C fund pension plan benefits and costs plan netaccrued. assets fromA thecomparison two latest ac-Wof accumul Details of the total provision for income taxes are shown ony tuarial reports is as follows: * %.
the Statements of Consolidated Taxes. The deferred tax ex-pense results from timing differences in the recognition of -
- 1980 June 30.
]$
1979- M ;p revenues and expenses for tax and accounting purposes t U < Actuarial present value of j W
^
The Companies allocate'the income tax credit resulting7 ' accumutated plan benefits: . from interest expense related primarily to construction work i + Vested . . . . . . . . . .. ... 5130,268,000 5167,512,000 in progress, to income taxes-credit included under other ! 5 L Nomested . . . . . . . . . ., 9.971.000 16.705M j income and deductions on the Statements of Consolidated ' ^ $ 5140,239.000 $184,217,000 ti p Income * )~5% ..y Net assets available , di for income tax purposes, the Companies have claimed sf forbenefits ,. ..r....... 5191.678.000 5166.646.000 );i hberalized depreciation (double-declining balance.T Assurned rate of retum for , ,d , guideline lives and the Class Life ADR System provision e J actuarial present value of ,
.f" y methods) and, consistent with the rate treatment, have W accumulated plan benefitsl.. . 8% 5%
- T followed " flow-through" accounting except as indicated onth i the Statements of Consolidated Taxes. During 1980 andMThe increase in the assumed rate of return in 1980 had th j; 1979 the Company provided deferred taxes on 100% and -
75% respectively, of the excess tax depreciation allowed /, effect of reducing the actuar under the Class Life ADR System for additions after 1976, ' This change reflects the estimated average rate of retum ongg consistent with its rate treatment. Penn Power defened . . De P ans' l assets which are currently held and also on assetsg31 taxes applicable to 10C% of the excess depreciation allowed ; which are available in the market. -g b A under the the Class double-declining Life balance ADR method System during over all three years, guideline rates
' benefits reflects pensionusing benefits ' i The above applicable total to eligible actuarial em-L < prese also consistent with its rate treatment. . ,Gt w The Companies expect that' deferred taxes not provided fork%. ' 'ployees basedthrough uponJune present 30,1980.salary lesels gen-g and past ye
~
service accumulated This is the currently will be collected from their customers when the : 1 erally accepted reporting procedure set forth by the Finan- 5.y s taxes become payable, based upon the established rate : Tcial Accounting Standards Board. The Companies' annual y making practices of the PUCO, the PPUC and the FERC. _ contnbutions to the plans, however, consider estimated i ,4 The Companies defer investment tax credits utilized and ultimate salary increases due to inflation and other factors - jp amortire these credits to income over the estimated life of 7. ; and tne estimated total service expected to be accumulated _, j the related property. At Decembe'r 31,1980, approximatelyM by empi yees. This is a widely recognized funding tech 7J4
$83,000,000 of unused investinent tax credits were" di i h the recommendation of the available to offset future Federal income taxes payable Q,pnique an s cons sten y}
l These credits expire at the 'end of the following yearse % e ;and the Companies utilize, r a di iPurposes. Differences between funding bases and reporting T!' 1983 . . . d. ,;al,M 1984 .....'.3i . M.M.?QMM4d:.$10,000,000 b . $ If W 20,000,000 3' %mequirements can have a significant effec 1986 - .. a. g;g M 9,000,000 /s nspown above ,. 7 ;, ( 1985 ......Q Q.j} agg[g 7,000m;# MOhioValley Electric Cor
. . . ; . ._ .7 . , -f. . .qM.g M, .p ,,The 1987 r 29,000,000Companies, .along with 13 other investor. owned
~ .
g elec ,, g a
, . v,V+bh,874d.F
. g/ M I583,000'000D@Utric utilities and OVEC participate in arrangementsnwith the in addition, the Companies have approximately $12,000,000;,f Department'of Energy (DOE) to s
~
( l of net operating losses available,to carry forward until the,p.Ements of the DOE plant near Portsmouth, Ohio. The Com-66, I end Pensions of 1987. ; MCMm y q g,pgg,UM;k
; WNt?
WQV panies' participation in these power arrangements is 16.5E M f
.9 The sponsors are entitled to receive from OVEC, and ared Q
. The Companies' trusteed,'nonc' o ritributory pension'plansM, obligated to pay for, any available power that exceeds ifj@
..U cover almost a!! full-time' employees Upon retirementM DOE's contract demand.The proceeds from OVEC's power F @
employees y - receive a monthly pension based on length'o@hk$k0 ' s (sales Ak are to b
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l y Ur*40 y p t V. R V; , ' 3llQ f ; i R*~q (c & S M M.3y .; A; ,]f ., i Y f R R t Q . Q c h' M , L 44 C b !N ~
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.m y 4 3, n.* * + .. : W n iu; m% .c-Notes to Consolidated u. h.V . Financial q. f W , ~, ' ' Statim:nts .;w O % SW Q%' e . ?
(Cont.)" t
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5 y y gl }h 1,.:Y a? '
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^ u, , _,"Q w,A e . p A , 4 3r tization of debt capital over a period ending December 31m[ Statements of Consolidated Income for,,1980,:1979cand$
1981, and also to provide for a retum on common, stock. At . X1978 were $9,373,000, $10,356,000'and ,$11125;000Q December 31,1980, OVECs unamortiged dekca approximately $4,00U,000.9 Mi@g%]pital.was%sespectively.The g'M Decemberag.y for 'all nonca'nsefable fses a're:5.g future minimum
^
. OVEC common stockholde ( wnp 05
,jpggJ pgM i
. have also agreed to supp!p quirements if needed, including $10,000,000 fo'r.additic a rea M'OVEC'certain' 1982 fM.1983'.
capM7,556,000QA
'l['nalj@h1981
.15,081,0001;cs l'
common stock. OVEC has deferred this need byissuing -+ indM.T984 ' gfggg, 4.Myy N.gy.WQW15,135,000g < tenm debt to banks. , p
- e.. #. , ye . T y gi Me pq$ .1985 . .'.T h n,:r.'.".MjW@310,349,000 %
Years thereafter e . J.al& . JM 309,937,000%
- The Securities and Exchange Commission, acting under the@y if bli ncncapitalized financing leas Public Utility Holding Company Act of 1935, reserved 6 the effect on total assets, total liabilities and expenses would D jurisdiction for future determination of.whether y or noWnot be materialc Ma wh& d OVECs securities could be retained by the, Company or9p n. a > 4ggfaMp others 5 Capitalization: .,, yg g;;p3 9 M%9 3@K MW9M M/%rd, sion has subject to the Act. Hearings were, held, but been rendered.m sno-n d,ecif@yx a c' %
..:m : q a.p@c A q M fg TE Mweg,WMK(a), Common Stock ; M.fg eWdgMMMj,@
@ Term,inated Constructiort Progcf DMNThrough f the MP Dividend)Reirsest'm[nban[SidPurchasef '
in January 1980, the Com'panies and ad other CAPCO comy.pPlan, holders of Common Stock and mostof lthe Com
^
panies terminated plans to construct nuclear generating unitMDavis-Besse fioc2 arid No.3/and the, Company's Common theStock fo!fowing fourh, h full-t by autoinatic' ally.reiiNesting Ene No.1 and No/ 2. Cbnstruction'costilncuhed bp theKall:or a portion of their. Common Stock' dividends and by% Company and Penn Po'wer,as'of December 31i.f,1980'adfmaking optional cash payrSts? Purchases;madeMith. P plicable
$14,525,000,to these units,7 respectivelyJThe PUCO. amounted rehentlyTauthorizedbaverage to:$85,472,000landrheitsested of the high and low market prices dividends on the iniest? are mm a the Company to begin recovering costs expended to datekinent dates, and purchases .made with optional cash pay-1 from its customers ovei a ten year period begirining in 1981.W ments are made at a price equal to 97%of.s The PUCO also granted another CAPCO company)eigDecember,31,"1980, the Company'had 4,799,047 s "
mission to recover such costs, but that decision has been ap.greserved for issuance under this plan and 2,000,000 shares pealed to the Supreme Court of Ohio by the Ohio Office of 7 of Common Stock reserved for possible conversion of the .3
, y 55 (;g@,
proval from the PPUC and proval from the FERC, and Penn Power intends to seek apM ~ ~ the FERC, med Earnin to recover the W'M3g3y ' ostsq(b) 'R T c Under the Company'k e q from recoverable.customers The FERC gaveto the ertent that the Companies
~
they'aie,,nofotherwis'eV solidated retained eamings unr'e peinUs'si5n,forg accounting purposes only, to amortize these amounts; plus gcash dividends on the Company's Common, Stock.were4 at December 31 1980. Under Penn Power's ~ j contractors' cancellation charges, if bny,'oser:aftenteary[$50,167,000 c penod beginning with the date that rates in their next ratep Charter, $24,337 400 or retained eamings at December 31,jg fihngs providing for ecovery of the costs becomfeffectivegd:1980 were unrestricted for payment of cash dividends to the g yc ;ggy The prudently Companies incurred and have believe rio feason 6 that the construction'66sts%erey%(c)mpany y, j , ,4Pr requests. The B6 cock % QVricox Cpmpany,kfyzupon;PPUC
'sha45 oM6ulative $25 vahie Class'A Prefeired StockM, and th e e mY( g ptaff peWW ^m preference 9 the nuclear steam suppfp systems for the unit 4 claims in connection with: delays 1ri,Yahif
-Me mpam prefene(and .
of, the units. The Companief ' share'sM.thefteh may be redeemed in whole, or tiw!tidilina'f ' a . less than 30 nor rnore than 60;da !n partg upon any time approximately:$62,900,000; fotp "Bes ~se x snotice unlessotherg 565.600,000 its, before, a Wd.dRwedeinption*of ocknessue s - -
-~an. ' pre frr'eWan,d prefere to certain.:
ta.in credits .infor the.Ene..un.d amounts..Ther Co<mp wh~s years ts.su o ithi.n undetemsne an s no reasc.ito believ'e'that' dattellatWcliayes
" .!c hn,p~ega'r,d..the~past'ing
~ s g
% s refundig:g. -ppera u-payable,if an ,wilf riotberdcoverable $rs '~*"'~~ . n c ep sh owtgw,til Jdec'lin ed oye y ent ualy
.p~- nemums per 9
- m. emptionf p' share'according t y
' ( ' ' MQ"W
~'
[ Leasesh M%M~* d y?thaiestablish'dsch e M MQL.C E A % kriesdFj The Companies' lease 'noclealf (certalr m.ew Preferred m %Stock w'Subje. mctp fag gbh g ? g:f facilities, computer' m equip' ent/6fficedacW(tiardrhi4hgp - h , cidental propert si f to riyQO.48% Mandatory Series 3 rid (1 RedemptionQ ~Sene eschan g n cancelable leasg) and equipment 6n, dRcaIIhe prowstons fora mandato
~tof.ar: ielity 7
~ sinkiiig '" ^ ~ s
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wegw a f ': re;fundage p a4 m%ggy j w -
~~ $Q hMN1 # MM
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minimum of 20,000 shares esery year on December 1 and , : increa<es in the amount of the annual sinking fund require- F January 1, respectively, at $100 per share plus accrued ments. Penn Power contemplates that its requirements will I dividends. Penn Power's.11% Series includes a provision for,ni be satisfied in 1981 a mandatory sinking. fund;td,Ntirefa ininimumjof 4,000g Endsagainst $2,239,000 of the $3,559,000 of retired bonds :, 3 shares every;yeat on Janu' i a i[1,\ at $100.perl,shart plus'i6t*pthakare presently available for that purpose. Penn Powerpgy
?
- c. rued dividends, a mandatory sinking fund and its 8'24%
to' retire a minimum 5eries of 5,000includes C% ompany., Orovision 4 , 4 for"/46dould g . 3 also fulfill its" requirem shares on December 1 in each year beginning in 1982, ati J As of December 31, 1980, the Companies' sinking and .
$100 per share plus accrued dividends: Penn' Power's( ' mprovement i fund requirements and maturing long-term debt for the next five years are: -
/
10.50% Series includes.a provision for mandatory'redemp-tion of the entire series on April 1,2040.ja . i e, .f ^ .. . 1981 . . . m . . . . . . . .. ... .., . $175,847,000 ;.. The sinking fund , 'x 3 yIequirements 2 4, p y v fo'r the ne next five h$rs a~ reb.p( . a ,1982
.......... . . . . . c26,652,000 20,847,000 1981 1982
. _. J. M.W!m. .',Tif. hb$4,900,000 :d.fD.52,000,000 ? M 1984; ...y.. 4 ,7... . . .....
9 %61983 .
- . .1. . 47,673,000.
. . . ;. a . . . . . . . . .
73,990,000 1983 . J..21. m. Q,i@
/.4 -;!.M[yh 4,900,000g[h1985 ' . . (. a U.'.
4 1984 c.c 4 - -
- <. Nw 3ggg '**
.'. . . J, J. .W.LI;,f. .N K. Q
* '? "y'jf gfj~ 9%y &y ~;N / 900,000 y pSl4,900,000 i poltur ion control af,notes J The in January Companies' 1981. Theissued notes are (e) Preferer ce Stock SubjeEt a MhMO"'983.and bear variable interest rates which are 60% of the 9-J h yg W. Ag .m% applicaule prevailing
- c. m prime intetest rate. -e to Mandatory Red.emph,on.o o.. a,i ., .. a.y All of the Company's outstandm.g
% . ,. c g pre rence .g stoc,owas.
y ..
. ,a ,j.W!
0 - gg- . ~- zw issued in 1979. No other increases lor decreaser have~oc-yfj@' w . -Ohio Edisoniy Energy Trus curred during the three. years, ended Dec;ernber 31/1980 5 tfin November 1980, the Trust was created for financing part * .I 1 The $102.50 Series and the $95.00 Senes each' included of the Company's investment in Beaver Valley Unit No. 2. provisions for a mandatory sinking fund to retire a minimum ' ~ 0The Trust has two lines of , evolving credit available to it for j of 900 and 1.800 shares, respectively, on July l in each yearf $400,000,000 and 5:00,000,000, respectively. The latter . beginning in 1984 and 1985Prespectively, at $1,000 perm ' credit also serves as a stand-by facility in connection with share plus accrued dividends. The $1.80 Series includes aj Trust commercial paper salet total borrowings under that 1
-C provision for a mandatory sinkirig fund to retire a minimumWcredit and ce qmercial paper outstan6ng may not exceed of 100,000 shares on October,1 in each year beginning in,7 $100,000,000 at any time.
1985. at $15.125 per share plus accrued dividends The sinking fund requirements begin'in 1984lyh @ The Company has transferred 3 its amount to $900,000 and $4,213,000 for 1984 and 1985,1?Kfacilities) to the Trust, where the assets are used to secure f respectively. f .7" W ,, ' Y - y,n y'. Trust borrowings. All Trust obligations will be assumed by The $1.80 Series is corwertible $ts Corrimon 5tchck at f f the Company when they become due, but not later than December 31,1986. At the Company's option, all obliga- , pnce of $15.125 per share, at any timeiuntess previously '.f, redeemed.' Holders will receive'one share of Common 3 tions outstanding under the $400,000.000 revolving credit Stock for each share of $1.80 Preference Stock converted;p arr ngement may be convertedinto a four year term loan to b., Company. a . subject . to adjustment under"certain conditions.2 %' W'accrues The Company j interest applicable to the Trust which 4
'{
J. y< -@e gg m..s : f;i gp
% .g m-0 g, JS"$6bsequently capitalized interest on borrowing! under -
(f)long.Tetm Debt 1 E . the $400,000,000 line of credit is computed at the appli-The mortgages and their'suppfeme; M@ %nts,, _ ,h secure lall [dcable prevailing prime the Companies' first mortgage bonds.$erve as a diiect firstu! mitment fee of 1/2% on the unused portion of this line. No . '.
' mortgage tien c*n substantiallfall pro;perty and fratichtses _ direct borrowings are expected to be made against the '
other thar1 specifically excepted. proper . thee . l $100,000,000 line of credit, but the Trust will issue and base respective Companiesg,gg en. 'cated.g g owned by $ f.Toutstanding commercial paper supported by this facili by,thshI' the Based 'on"tfie" amount' of bonds'au [ extent that'borrowings or issuances of commercial Trustees through December 31,;1980; the Companies' arWpaper are less than the $100,000,000 available under this nual sinking and improvement fund re'quirements amount to $f line of:redit, the Company must pay a commitment fee of
$ 20,847,000. The Coinpany ' contemplates th'at fundsWJ/2%.Under the stand-by support, an irrevocaNe bank letter deposited in 1981 will be withdrawn bpon the s(urrender for A of credit will be issued upon which the Tr cancellation of a like principal amount of boWwhichareM1/8% of the amount of commercial paper notes outstanding.
i
. specifically,' authenticated.forisuch bposest againsCurf $ The average anriual interec rate on Trust borrowings was
' funded property additiors This method will' result iriminch 21.4% in 1980. The Trust issued no commercial paper in 1980.
.. N.M h .Q;. hkM9%dN$ _ bS' .
$. _. 35)
.d. R$.M[hmn k^ ,
Q . , m.m
fdfx Notes to Consolidated financial Statements (Cont.) . 4 1 t [ Notes Payable to Banks . secured or unsecured pollution control and environmental'? and Lines of Credit: u J-" run e ' ' - a n tes nd bhgatims, uns-d long-term mees, preferred . d ygr 'Q that provide for borrowings of uptheto:The Companies Trust (see Note 6), The Companieshave a're limitedlinesby theif ( q ,{m that vary from prime up to 108% of the,prevariing pnme irw5168,000,000 at rates'. drespe
- 'ditional first mortgage bonds and' preferred ' stock they mayM terest rates. Short term borrowings may be made under ' issue, e ' -
Qr
'.'s
'these lines of credit on the Companiciunsecured notes. All of the current lines expire December 31,1981; however, all #
'Ci -k The Companies, together with *he o'ther'CAPCO com ir - - r
?
unused lines may be cancelled by the banks. 3 - panies have made long-term coal apply arrangements with The Compan+es maintain cash balances on deposit with ' Quarto. The CAPCO companies have severally, and not' P banks to provide operating funds and to assure availability-of 592,264,000 of the hnes of credit._These compensating jointly, agreed to guarantee their proportionate shares of. 3 '< balances, net of " float," are expected to be maintained at an ~ing Quarto's debtthe and lease 9 and equipping mines. Theobhgations guarantees will incurred remain wh ( average of approximately $5,000,000 and are not subject to - even if environmental regulations prohibit the use of this d any contractual restriction against withdrawal. Penn Power is required to pay a commitment fee zo assure the availabihty ,
- coal. As of December 31,1980, the Companies' sha guarantee was $236,210,000 ($111,192,000-long term G p of 517,000,000 of the knes of credit. g? ? 4 ' % debt; $87,486,000-lease obligations and $37,532,000- 4
[ The Company has trust demand note' arrangements with a 1 short term bank credit). The guarantee is expected tcd
- i. horrowing limit of $20,000,000. Amounts borrowedt increase to $250,000,000 based on budgeted minejong
- r. ($17,982,000 and $19,499,000 at December 31/1980 and- s struction costs of $431,000,000. J ',. ,, !,4 _ M
[ 1979, respectively) are callable on demand, The Company J The mine development penod ended'on May 31,1980hThe
; holds available a portion of its bank lines to cover any call ' ' current price of Quarto coal to the Companies is based lonN '. - for pay ment. The interest rate on these borrowings is based
- among other things, the actual production costs plus amor-
? on rates for certain directfy placed, high quahty commercial ' tization of certain production expenses which were not in-; " !; ' paper. There are no compensating balancejequirements ' cluded in the price of coal to the Companies during;the c :
associated with these credit arrangementy ; , , development period. The current price of Quarto coal et .
'n " in August 1980, the Company 'obtair$ed 'a'.530,000,000; ceeds the current generally prevaihng market price of coar ,
Eurodollar hne of credit from a group of foreign banks.~ Reference is made to Note 1 for a discussion of the recently ' * [ Amounts are borrowed for a penod of one, three or six concluded PUCO fuel adjustment clause heanng which cur- '
/
months, and are renewable at the Company's option. The rently limits the Company's inclusion of the cost of Quarto E interest rate is currently 1/2% above the London Interbark coal in the fuel ad;ustment clause to generaUy prevailing k Offered Rate. The Company is also required to pay a com. market prices. q f; , mitment fee of 1/2% per annum cn the unused portion of 5 ' The PPUC ordered an investigation, in December 1980, to
- r this credit line. There were no borrowings under this credrt determine the reasonableness of the costs of Quarto coal S y arrangement at December 31/1980. The, revolving credit being recovered through Penn Power's energy clause. In
;f facihty expires in August 1982.~ ,,, # g .- January 1981, the PPUC issued a further order which in ef- -
' % g' %
fect prohibits Penn Power from including the costs of
@ Commitments, GuaranteeQ ?M , ' ' Quarto coal in its energy clause at more than the market p[ , ' and Contingencies:ggj Construction Program';Mmi2WM$v O e pp i f
$p prce oManagement A M, yvestigation.
bl comparabelieves l d e coa,thatpen l Penning f Power competwill { hg ~
> r 4. he T Compan. _iexpect ies to ispendp u. . imatefy?ms.
approx ultrmately be able to recover
- s the
-- total costs <. of Quarto coal.,4
$2,700,000,000 'or property!additiorfsnd improvirentsh . cThe. Company is presently continuing to study and evaluate M+iy$l from 1981 th"rodgh 1985/.of3hihh'approiimately3, cthe eco omics D;C 19f $588.000,000 is applicable to1961.4The7 major portion.ofifl natives available to re hk the Companies"constructi6rWctKitiesburirig this fiveyeajq tive long-term supplies.of coa!)(The Company sub hh$ S(jointperiod relates developm'ent of powei~to' generation tfielCAPCO' compan@"and.trandnissiord that, over the
'Wfacilities; and to' bririg the' Companies"eiusang~ generating
'$ units into compuanci;with environmentaGegulations; gmarket. price of comparable; Also,pof coal.Quarto' Management coal haswillno3be
- 4 che CAPCO companies havsenteredintoiommitments (the & reason to befies e' that the costs incurred with this project a hY , 7 Companiesi share being.$766,000,000) f6t thejup will not be recovered through the Company's fuel adjust . : ,
Q_ l pg[ nuclear fuel in connection with. thenfutur(commercial., Environmental Matt g operation of nucleaf gmat}ngjjnipy8MMM((Varicus Federal, state and g'
$Q[1985 wt!Iinclude trie iale orissuanc' from tirrs td ti
. The Companies' financing piograms chnng'1981 througb .
- NM appropriate 'additionalfirriounts. 6f "rifortgalg( bonds,% environmental matters. The Companies estimate that comW ima s_a_
1
' '~ ,
r h, i e pliance will require capital expenditures of approximately be significant. However, in connection with the settlements "
$ 590,000,000 for projects remaining to be completed. Of referred to above, the Federal Environmental Protection this amount, approximately $72,000,000 was spent prior to , Agency (EPA) has acknowledged that its policy is to assign a fj 1981, and $518,000,000 is included in the above construci low enforcement priority to companies in compliance with .A 2
tionenvironmental for estimate for 1981 through improvements 1985; amounted Capital. expenditures to $59,837,000 . . ; outstanding consent orders such as the
' . these settlements. .
i'n 1980. If a flue gas desulfurization device must be installed Penn Power has had dispersion modeling studies done for M at Penn Power s New Castle Plant to comply with emission limitations, estimated capital expenditures would increase its New Castle Plant, and the results of those studies M together with the data from its air monitoring sites in the U by approximately $85,000,000 and annual operating ex- v c nity of the Plant indicate that the current sulfur dioxide penses by approximately $15,000,000. If the Companies are. , required to install additional off-stream cooling in connec-(50) emission standards are more stringent than necessary @b to meet the Federal ambient air (health) standards. Penn .I tion with the operation of the New Castle and 5ammis , Power requested the Pennsylvania Department of En- ' plants, additional substantial, but presently undeterminable, vironmental Resources (DER) to adopt a less stringent emis-costs would be ir. med. The Companies expect that the inP sion standard for 50, which would enable Penn Power to' c pact of any such upital and operating expenditures would meet the emission standards with the low sulfur coal it is >d# eventually be reflected in their rate schedules *4, now burning at the New Castle Plant. DER proposed such an 23 The Federal govemment began legal proceed (ings against emission standard for the portion of the air basin in which - $ the Companies under the Clean Air Act,asking the courts to the Plant is located and adopted the proposal on October i> assess civil penalties for alleged continuing violations of par-- 21,1980. This revision of the State implementation Plan (SIP) ; rM ticulate emission regulations at the Companies' Ohio Plants' ' , has been sent to the EPA for approval. Pending the review of L g j and sulfur dioxide emission regulations at Penn Power's: this proposed change to the SIP, management believes no ' T j New Castle Plant.'The Clean Air Act Amendments' which , notice of noncompliance will be issued. A' N became effective id August 1977; permit the imposition of civil penalties of up to $25,000 per day of violation. The ' Other Legal Actions and Complaints < y; < cases with respect to the Ohio Plants have now been settled and the Company has agreed to pay a* civil penalty of in 1977, the Boroughs of Ellwood City and Grove City, Penn-sylvania, filed a complaint against Penn Power, alleging that . y ', d-
$1,500,000, of which approximately $200,000 will be shared Penn Power, individually and in conspiracy with the Com- 7<
by Penn Power and Duquesne Light Company because of' pany and other CAPCO companies, has violated Sections 4 ) their ownership interests in W. H. Sammis Unit No. 7. The and 16 of the Clayton Act by restraining and monopolizing $- Company also agreed to complete an ongoing program that trade and commerce in alleged markets for electric power. { will bring these Plants into final compliance with particulate ' Damages of $7,000,000 (to be trebled) and injunctions regulations in 1984. The estimated cost of compliance is in- against the alleged unlawful acts are sought. In 1979, the Iy cluded in the capital expenditures referred to above. With - Court granted summary judgment in favor of Penn Power as respect to the New Castle Plant,'the penalties, if any, that to certain allegations of the complaint. Management is ~f-; may be imposed by the court for alleged past violations are unable to predict the ultimate outcome of this action. l not now determinable, but such penalties could be sub- The PPUC is investigaung an outage of Beaver Valley Unit stantial. In addition,.Penn' Power could be forced to shut No.1 which occurred dunng the period March-August 1979. down significant amounts of coal-fired capacity, Per'n. Power The outage had been ordered by the Nuclear Regulatory expects to comply with any final order of the court and, in . Commission to analyze possible seismic deficiencies of 1 the meantime, to conduct operation of tne plant so as to M safety-related piping and pipe supports in the Unit This in- *- minimize the applicable emissions to the' greatest extent 7 vestigation is to determine whether, as a result of the :,
; deemed practicabletTherefore;.thW litigationf should not);th outage, the Unit should be eliminated from, or adjustments result in se imposition of any substantial civil penaltie's'forW made in, Penn Power's rate base. Also, it will determine if *)~ -
- future
' Final conduct.jpQgggfg(pgf regulations .implementingcertainL provissons of [the Mj ment power should
~
Clean Air Act Arnendmentsof1977 havenoW been promulM rate case proceeding involving another CAPCO company, b-gated which provide for the' imposition'of. noncompliance ; lthe PPUC ordered that the Unit remain in that company's P 1 penalties based:on 'anyyonomic benefiGalized by the(y rate base and that an unspecified amount relating to
> operator of a pollution sournas a resialt of failuretocomplyMCreplacement power costs during the outage period be ex-with pollution control laws and regulations after January 1, D ~ cluded from that company's energy clause. If Penn Power is .
,1981. The Companies have filed Petitions for Review of l m ~ required at some future time to make a similar adjustment,it p
~
these regulations. The Companies did not; achieve com-. - . is not expected that the amount of any such adjustment pliance with all such' reFulations by ariuary 1,.1981 so that : would be material to the Company's consolidated results of ' sc such penalties could be sought against them, but the Com-7. poperations. In a separate investigation, the PPUC is consider-M panies cannot determine lat this time whether they will beV (ing whether additional construction costs which result from < Y s k, or, be if they are the amount of economic benefit that could; ( deferral of construction projects shoul established , f Ghl$f(if sought h?f~f andimposedisuch
' .' k h Yill penalties ^couldQ rate base in future r '
R wv MhpA <
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n . m v;. n,,; n e A p + gw ren. . e gnge;. syn.. p A.g gg&w. gg ,, w:. ygg u y .~gm Financial Statem:nts VM W; gem
. c . (Cent.)w n m uinMMM,r.S/M@w y4 Notes to Consolidated.& .,,,W W Q...s fnw
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<. y n y :e 43 ^ w App .J,
@ Summary of,Qidrterly, Financial. Data:
- . , . .. .. m ,u,,.r.g,y g. w . ve w w.y The foUowing summarizes q - ;;, .s, certain e ~ cortsolidated . m '*operating 3 + m,,e w results nu for
%. the v ' four x ,. quarters x of;vc 1980MAar d June 30,.
r , . y'[f
,* R. [?/ h ; -1980. . i =. March twin -31,, ,10,1980
' 7' =Septrenber N S u 31.1980y Decemties... 1979 dM.ude~M 31,' c'it June 301979'4 1 september Q
, "' . M 1979 9 a 31,1979 t 4 ?,fN 9 d M.P O g @ nds,e Operating Reverses E ji per share amount $ y f, .M M gn p -Q )g 7/3l291 Operaung Expenses and taxeh4 4gW7?,7htZj25.2A0k $Td31,#53 U$V499gM@D4M(Dg3750,4Mg523&565., 21483TtM9tVf5W WO7J72Y , 20f;771$254 -.
' operatingincor%E@}Mb, 47.,udg h,"&fT2.1M>e212,6#
. Other Incorne and DeducticirA M p .
M175%i4rt2efrg.38,,4M 35,5 M7. ass g7W ya36 6, -28 732.w m32 272N'%30M M3 7584,23 442 !v ~326.076 24 607 s ' .,02hQ23/7 thet interest and Other Charges % t[.C8 , , , ,
! , n 27,477 .
Nedncome . . . . dim.mfbo..b h,x f"41,925M.$ 31,050N $b32.0101 f
' $%16W $ '26938WS 30,'271 ~ 1 "$ 39.949 ' "i . 37.649 T jf' Net incorne for Common Stokk O. gI!$. b $ '33,434, ,-
'$ 22,590V $ '23 607 # $ 21,772 ':$ 19.984 < $ 23,318 D -$ 32,515 $ 29.301 %
u
- $',a Average Number of Shares c'( N Nhg.f,Q Ql T , , @j?;N}QTSM k,t ' ' '
~ ('58.562' J @ ,' @58,945 l , [ - )lI NN '$M.j Common stod Outstanding _.? c . .. y i;~;d18 64,227 W ' 66.897 92 67462 1 - 68.14s 56.264 i - 59.390 tarnings per Share of Commui5tod.M & $452M L $ .34 M' $ 13$ & $ 232 M e $ .36 M "$140 - $M ' Y $.49 h 3 i %&4%$ % r% s+,,w p s < wM t M a,,s m s s ,.e.n,m e $2,727,000 ($.04 per . .share)
, ; . o'2,671000 and $ ($.0% 4 to reflect a fourth quarter, (see Note 1). The effect was to increase net income $2,662,000 adjustment share)L1,the: 6rst
$ M ,lsecond
,to pAM the,.1980 and . tNrd "'$ UW. quarters.,respectiv A. ^ $.
AFUDC
- .hkkfh h bhji apf h
@SupplementalryfqanaalDatah[inandadepo es h
Statement of Finandal; Accounting. $tandardiNtQL7dndhi W. plaid mi"eduiphknt TNs data is presented infaccordince%ith y Reporting and Changing PriceqSFA5 NM 3 piovideQo the 65FASN6 y preparation of supplementaryfinancial,inf5m)a)iorito t ipeporte(Q3ihoweverllt'is chsdose(ahef
~ on,ydsforidal, cost basis riotintended
/$N' @%1,pf as a y subst 4 X%pWNDMiN
~ '
esumated effects '=% w Wp;m& of inflatfors priceMM;f% and changer, i{nz$cM-jn6pirtgd %2% r$ pH WC & d k. M(T@ M M. [$, W
. ; - m. :
.t s
Adjusted for the Effects of Changing Prices. For the, Year Ended December 31,1980 (In Nusands) R$/$hM.MMN / -
. J.-
J Qid(7 ,: Qf y fM . 9 Mon'the tz-
'g4.M w
' f,e tmh,m.dii*
jg As Reported M up HistoricaQg >4 l@QNgp*;% p w.y nighpw.g@g YJgPrimaryY[NI g, . TAdiusted forCost Adjusted TM Change AP@pr in' '3 D M3M MRIM'M h(hhh Nk, [NLM Statements "O N inflation de[,Q
;e [ k .NMrMh(
4 h . (Current Cost) 1 s e3 wp.- yef q.- c g: py. q .q,,("itk, g 4 Rg,xg@1,080.869 h.4 h , , o/EMwy. i,
' ' % ?$ (Average 1980 Dollars) ; . J i.080,869-Operating Revenues J,Mi J ,v, , % e4 W$ $1,080,869 y Operating Expenses Operation and mainterecFh;a 4
~ s c .u > w g and 3
.WM.;g,a~!E*%.dy[,4ryc r
Tixesg.gf,p) " Ar .% /4gg p M cMiFJ5/?.i2(j~i.,4!4'jfy 1
, p , , _ .,,b E % Q O r .A g 3689,269*: 7' O 689,269T 1 ' 689,2690 W
;&~ 199,182 7
- Provision General taes for .depreciation
.. ...I d.7sy'$$DMbt.hW IN %.CW% 32?.4/4%%
bMi.%dMM9 4Q&"M,'- 85,143J'85,455 'V_ 85,1431 E@ds ., 165,%1 I : 85,143 i ' & Income tases.
.f.184, J.dMDL .l.f,77 $l@ M JMM 51.619'
- TN 51,619 51,619 P TotaloperatingexpInNNtakNkk[hh$, dhE911,486 ih 'f fE % 991,992 # ' 1,025,213 -
Operatingincomed.'hhh MMk (4 @' $ . "169,383Q. 2, 88,877pg.s 55,656:, c$, Other income and Dedbettors, netdpR't ""[96E36h pp' . ; 96,836 g
% 836,y T Net interest and Oths.Cha ~T
i
$" y y*w , +,A ^. 31.D69t; 33,747f,P
, 13t069MDd131,069.
$3,74?neDW E33,747 , j'ig-Preferred Income (loss) from
.,<3 ,
and Prefered,et M.pg{.wp * ('ytmtinuing s
,).
'a vN I#$j?O.M f %. 3-dWMMQQ . @
. c 1 a.
, (exdudNin ,mrq reducton'thnet.renoverable w 9 g 4.101,4037 6in -20,8976) M $ ', (12,324) e A '. Increase in'specificprbH ay&so'stf, ' s h usstar n 16 . ,, Q Q @ Q if M ,F % W / M e < plant andequiprnentheldd thi '
7 Imb.dtpf $7 551,157C.~g ~ Reductiontonetreicserhble ~ ~ , / s Q #(296,5431_
- W (95,655)M m
W ' '(w~ $ ' W 7 c(718,824) ,, .M?{
~
w,w,q y f ', - w% g;,%
- 3.% c. r . ,.+W t
P.4 bCess , Effect or increase in trie
' - ] of property, plant andequipmetialt ofincrease4rt sener asemte shep%qd ' ' ' ' ' ccat
' etc,d ,
a
'QWCa S/q$ 25u3%.
Advantage resurtins from the 4ewWpg}bpeg mngpowerornew ~
,het. 52M&fdM w e^ " ;;gi g"q g pr n gpM, 2su34ew e&
6 g m %g y;g!S b mM5 J10,oB8) W% g G> 4h93.309)
% d G h W$#PM. .. . .. . v.
M kw m ~ ~ -'p W s @h nun,the,educurun w ,w. c"t p w a, e red enuin e m.v G gh7 M j,* w wmid hue been $t273
;.]W .cg3 R 1w, 0-.m
? .,56,6049%006.wr NiehiWoNcal o w.A . 9 ,e(@; #pMbr+M f s
- ,e NkhkfhkhkbN;uttet mdrecoverable N was Nb{b{b:gI $1440,D200
-s . ..e. .~. w r .
n,. ;, .r . _ M
- ,.,../,. . ;. pie
;.,. ' ,.c ,
G 4 s
.;i,+,ge,n.rp y.t w.,,n : u ,; ,.
4 7,y r: . s* ."- ,.,, 3 :. A
$ , b'
~
~s , '
e .s
, Q RQA /. ,_"^ '
" }
J $l,7t_,4i, 70 % , ( 'f ,' K n-f'..R
, e :t .. ,,v. ..
j n,8 'p 9 Five. Year Comparison :
' o. ; '
1
.y 1 . l> . 1 .
' X.M l&
of Selected Supplementary Financial Data (Uriaudited) Adjusted for tid Effects of Changing Prices , 4gNRf,
'~
'M
+
f
.p , m feQR,4fgG M;% p,M s'N e &- Year Ended December 31, MI M. -
N i h 1979 py 1978 N l'1977 . 1976'
- Er .%
' (In Thousands)1 Mp$W&W $Ne. M@Q;gg}'Nb k A.,
.: Mw-M ~M- @ 9 97 '; p ; g' u 4 6.f f "
Jh pri } OPERATINGREVENtMygg% jy %g,1fAAs reported on'the '
%N j statements. . ... 2.v.W;.N. .%;/ W.Nf.Qp;L. b. t.w. $1,000,869 .$ 994,585 5 862,956. $ 796 289 ~ $644,852 '
Adjusted to avc.erage 1980 dollars Q Te f, 2 *;U,;3 ;p.E.W.:'. $1,129,053 .M.. $1,080,869 $1,089,924 $1,082,745 $933,400 ?n 'd' d; .
, .g . . -
n! .
, . w _g. ,
HISTORICAL COST INFORMATIOff ADJUSTED FOR,gQ: $g . ;'gQfW ~ , . sp i CENERAL INFLATION . ; . ;;4 - c;;p o g M N Q W& %
,j (in Average 1980 Dolhrs)ly 9,1.. f3WjgQ.QQ. @f ' . 4j r income reduction to from cononuing net secoverable operationsg, cost)g%!,Q4 pig i (excluding y
^
3;QG:gp&p -, (,-q
, ;g.,
- lj
' #g (in thousands) . :i,WJ.M. .;W.1.r,'d, . t - ym .4 Jh.,:.;,g
. ., p ..f20,897;- $yW
~, ; $.
3 , 47,482 1 ,
, ?, 4 Alq W 4 7,j3c W Income , rom continum. ._ -g operacons per commorriM; gs $ .% ? .-
share (excluding reduction tomlM.N,..M s W W t N. netWWW.M.%g,J;y%@k.Y$[3p ' f w-Oy saf recoverable cost). . ; ; f...;.V.Qy.d.Um
- 3. :: 2.. A.
ht %g:w; n n w : a , s 1
$' .81 E.h' I
'R. ,
CURRENT COST INFORMATION M u,Wh?jM@8!A4[p;NdWM:i".*f % (loss) >from 1.*'
,'f. ,"E ' .Q " . N[ [*+
(in Average 1980 Dollars)Q@MMIncome i continuing-toperationshcludi ' f@A ,' * [ f . / - 4 d %'3 fU
' ^A j$;4
$@M y# f
. reduction to net. recoverable cost) . t
. (in thousands)hNC MA,N.,LSgMi %gghgg%'fd$' gMt .
112,324) ~ $ ' T16.069 ~- 9 , ,/
<x 7
J, *
$ 'i :WRp income (loss) from continuing operations pe@r commor%ng ~'j{[,.t;JVl share (excluding reduction to netgpigp(~ 'G .
i
/ Q p*7 recoverable cost)f;#h;s ...Agg# $(.18) . , . $ .28 -
' i 4 ,c'.!;: f d {,
Excess of increase in the'ge%?.%:.c. dLt45.A rieral price fevel overjg F$iT y, '
~
l TI I 2 increase in specific prices of property; plant and;y %y@d.$g[ equipment after reduction to pet recoverable gf % yQr .i1 g, . ;l.4. . CN
- h.wr. v9 cost (In thousands);v.);i. . .
OTHER INFORMAT!ONMmx w ;m qq.~ M;Mg..M..gpa;7;- hw 14li.e $ (263.322) $ (303,627)
.Q h/(GMi%%fhyd/fl{v.Q . , . ~' '
, M. d Common stockholders' equity at December 3fatQ9! % of%% 4 O 4 Si S net recoverable cost (In thousands of Average *zd ' %dQ@9 I ",,1980 Dollars) . . .Ql Oc $/.W Advantage purchasing power resulting of net monetary from liabilitiesq
'the decrease d%Q ~in 7JS$f@Ci$9 dita %]. ,,' ,
7i'h
) y J.
1p (in thousands of Average 1980 Dollars). .;.M.- h1 . .Y.E An 5 ' 253,234 5 280,700 .l C b As reported . . . . . % ', . /. .. . , .l..JC%g $. f /k \ Cash Adjusted to dividends average 1980 doltar6.C declared .Jid; QWper hJ,M M. common l 51.74
$1.76 share,'i DV - M W(g.y . ; ,
$1.76
$1.99
$1.76 12.20
$1.715
$2.32
$1.67 '
$2.41 Market pnce per commonM;b~tr.M share at. December 31)4fy[@R QQ64:?!? $$11.875 i H. _
$13.375
- $14.875 , $19.50 $20.875 ;g 'i1.
As reported Adjusted to average,. .$.W.".i2t, 1980 dolla~rs @T WMk.?{Mdb "h $11.34iE<;. $14.36 c $25.86 . $29.56 Y. i.
.' X)$18.10 ' Ls 170.5 b;ft 3
i 1246.8 @.C.217.4; 195.4 y .181.5 L_ Average consurner pnc'eindes # U,T M b k0%Q .k$$ h-h% , '
?. ;.
{ h Ww
'~
Q&. ;.M;;
. Y f$W 'T c [
D. -s* ' ?; . a - ; a
, @ <.w'u'.p'% .,s p, '
%;%Myear A bethat% - wg,&. D. B ; v< _M *m
-c
.n s g
,. "yy -:o L .. ~*'
,; ' p
# The Consdmer PriceIndes Mi Consdn, ers I costs were incurrediThe current cost of land a 4 was used forTconsedhistontai;Jimounts'.f6c plant and equip'rdsnt frito%erage)60 dolla'rs thusghing the respective years propErtyy{dwas proximately reflects the current cost of acquiri of acquisition. The currentcalculated cost data ap by a
. :an indication of thefe#edtlofjenerglinflationjiithe
.c N cipal assets, n. -us.n of x the~ Companies,qgQgJg, a
f,f s n . ..
%. . w$g {Oplant and equip 1 W v
~ Current costof property / plant and,eqtupment other' 4 Depreciation expense adjusted for general inflation and for
^ tand was calculate'd by'appiping the Handy-Whitman Iri gchanging prices was determined using the sam 7 of Public Utih Constrsttion Costs'for the' North CentralM methods used in calculating the provision in the primary <
Division and tha Bdriatiof Labofadd Statistics engineedng financial statements. The accumulated provisions fo
#g i ' ndices to functtwinaccounts Sf'vetagiPfears;except for,$[depr^eciation 'were esti
~
1 ,,m n , 3 y - - , g m n n_ - - . . . n. ..--
~
. t L*
~
v/g@ Notes to Corisdudated Hnancial St5temehd on b # Y f* if 5 N.r esg a uu. Mr.3A-h ,ix h h 4 t
"J 4 8
, _ Y? x gs ..
4[#9/.; n ?k? 6 g% %. m - N
- f. Whitman, my .H sec6serfasi enuesj rou w@ m;m @: j f d 3eprecia ' ' " tlW isessts56~ ' [p5,a;n .de , :. [ tion allowa
~
m .'. m g, w.additioW __ Pe ",_,,, ,
. @, . . . .a g .
MM Mas; n , r ,,- ,
^~
- and? preferred?st4Duririg it'dfaf
# M44 Mith %pamesh.cpa'ying M nermoneflarsJhaving'l W7.hNo.33.'W"i Vfyp.m , , . .&[ "
il
; During-inflat , f.:.nec when the liability.was originally incurred.Tlie? ~ l y4J7 ;hreplace property) plans [and, , , ivill,tieltnote '%{ergindicated b[thep" Advantage r_esultingl f' rom
.'. fe c y .3 ?.! their original cost.hrai . .are permetted ' rchasi er of net moneta ~ liabili gqqME
' ~ '
s' g, a.o pig A M4
- 4 p m, m
,.l' '. : . Y.tf lf,$ry. ~?
'~
WBYQ. 4 m;44DMm .ve i > f; w . 4 6 q y ' M, w uv G4Au_di.i o .. n. MW .ARTHultl 1 m IM}J@1345 Avenue #' (jg$ ew York . . n.% hMTQh. 2 T ..
.., % L . ., h p~,r %m C 3. y -
Qsaca,om g4
,y ' g;i:y,,q' LMrdbWe- vt ,p yy.
!,E:.Mfstatements ~ot'c-:M" ; ~
- sfiOhisE .
thh finMdal position of Ohidr Edmort Company D; cCompany(anOhi f.lp& pS Pennsylvanis piubsidiaiy" g ecember31 ^3 itbubsidiiryYompany Mid the ~resultsW their operado6s as of'DecesntW'the'so' and u kesofD
- N".'lh' and 1979[and' theCrelate( _ ry'o{ corwolidated JudfoiM prop'erty? additions.for'each of the'thredE"! *
,Q FMT come; retaineiflsarrurigs?c' ' ~ !sufTother posde : ' ~'irithe period ended December ~~ 3 ' 1980lh'conforinity M %w*dcapitaCsourj#ar(r "es:of Usigil t
^ ^ ' "additfope ..p ?
. .. q
'gesrally; accepted - ~ "oun--
p taxes foeda YV ' 'yN # h Decembd N??cordancs s%'19fd1itit siendradfC .. iiudisng'standmeds ' ,kVW! M . #~ M ' s H -
- W%~
c dWaccordinglyl5c,ludedmsucli . WWcounangW .9 .hf 3 .. Y. " ry :
.f e
n m.
, ..c a;n . ~ . .
v.c g . w.,.:'
.nn. ~. +)A'n,.
e . . ' .. -
.t . .
($n<
._v q;. ..
s .'
.Q .
r. _~ m.g-x : '. . .w.- &w. ps Q .
=
x
. ;. . ~. ;
~
h .I : .g . T GQ*y I .( . pf 1 ". :' ,. , ; .4 ,' ..c f.6 f .' : MW:
.) \ f ..
.. ' .' s:lh ,4 '?,h f h i H .g3-mg..- ..
aw ..
.r '
- v. %.:
b
.f. . '. w 1051 , ,~
. , . , . -'( ,ti
*)..
' ~ ' '
? ,". - . ., .
#Js- :~g -' i;.
, , , , . ;~ .:. , [ [Q.-D
'w. ., ,,. .
- a .
y,} rj *. - - ~ '
'o e j _.' %.l. ,' f.Rff 3. qg,.]
~, ,.,.. m.m
.v - ;., . . ..
.c. 7 w a
x,- 7 yy , n
,.cs, 4%tw, -
- y. c _
n- s-,
- N. % g .1 i
gp
.. ,, a . v :o ->
,:( -;,r ~,' m W
' n ',f) f c e 1
; ^
J..e- . . Ohio Edison Company'd a, . s4 w m ~, w, , .- . : . g .7 ,
, and Subs.d.iary i Company.m Consolidated Financial Statistics .
WWE MQ General rinandal Information - 1980 si 1979 Y,, 1978 1977 1976- ~1975. g Total Operating- p , p ,.q p M ." % ; Q . R g g n'a . . ', Revenues (000) . 4.ti ,6, s df ,a..u $1,080,869 d_.;994,585.c.. $ ,862,956 , $ 796,289 - $ ,644.852 , $ L 593,324 % $281,821p '
, V
.M41970.-
]
Sf169,383%$6163,74 $J123,945Q $" 122,217 " ' $189 663 1$ TOperatingincome(000): Net income for_Com ~y 1f
;015toqk(000)inc.g,@M 9hM J .p;W wtg h g 7.W4^ gf$fMAp OM,- M7Mf8fM,c146,508N.d[M.WlM%,1h'r$
S- 01,4e3: 72 dV*k 19 61,2SO$h 87,863 3 $4 82,777M $d(67,6@a$ 641 c % k g 2
' Ratio of Net ome N
*9N# Wk W WME DN Q . .I. #4 MU ",$
/
for Common Stock hh"Qh ,I*h9.4%wrQ10.6%Mk;{]7,1% N .]
<$' o'}n,M hhh _
Operating Revenues ,1%.4 . g, t1 16.8 Times interest Before income , b QQ Tax Eamed , %.W.1,. 4. O Q, i.;2g N2.05s P.@g 2.31xA, Q k'p 41.67x'Qg;.fM "r 238x 4
?>./
~ 1; . $Q.fr' }' 1.4%
' 2.22xP 11.0%
t 12 - Net Unlity P! ant at ' 7JSNOd %@Er-d -NN,.C ' - && ' i '2.34x C1M 'd 0 4.93xr' . December 31(000)iiks.Md!@ $2,115,798 . $1,850,490 $928,751 $ 'M ' M'
%F $lNf pNt.%Mf QuM p "N.S , b s .i.4$$
Gross Property . 'dj'6. N' i [ ,
$3,435,26%[33,012,197 ,.)i
$. 282,892 t$107, y $2,7
.- .r '
Additions (000) '. . 3 k$ ~ 515,0202 76,746- s
. Capitalization at 5 iMWJp F }}9 6 ' ,, A%;rN f 4 d k 'n- D ., @sl... ..& .' 3~F N 2 JNQ
' December 31:(000) MWQg, >$@.M go % MW # $ ,9 .,. g Common Stockholders' Eq'vitys.p $1.,066,95p,y e 969,54Qf3 851 n
. 1 Preferred Stock Not
Subject:
e MPS,$ ?J07,472'$N 307,47fs[7q ' s 4 ; p ..;$.( 'DAdgNd 5 to Mandatory Redemption & .d g' . .
' Preferred Stock Subject Mpll T.pp,%
307s472 "
. }lh [j* 9) M 262,4721 " , f
- 262,472 5. J.Q ig214,472! fig f{7 W:W.N A
'l to Mandatory Redemption! w a '93,60]% @96,000SM 98,000 W -5. 88,000 i '
j Mysph ; Preference Stock Subiecf '
$,. p s to Mandatory Redemption G% e} $g99,208W
'57,250 'DO!j-+ KMg'$g;4W.:
57,250M%{7 wyM y -- f%,Q? ;. # g Q:@$488,000Q 4.D A f Ly . o Ja t [ W' 9, ,Lf,594,384 6., N16,782> 1343,195N1,189,821 P 1,087.755 C. 920,932 s 475.1 !
% , j tong. Term Debt.,'.jf,gQ f, g $3,125,263 ' $2,838,647)A 52,599,786 U $2.417.018 $2.072,934 $1,769,108 - $897,052 7 TotalCapitaliiatinry%
- &.9 p,,%j
/* N Capdalization at December 31: .#&4.i t
RatioWMy&lfc.c Wg, ,'k
.$ P %..gf;b f , QQ .y S.g%g g&g W
' Common Stockholders' Equityg s: 34.2E f, - (34.2% WLh&Q 532.7% C 9 ? 35.9T, W ,,. ." {T 30.6%i .
30.8%zg %/ y 38.3
, Preferred Stock Not Subject Wr ; RX,Tjh.4 ' hM$.$lx ' $.. y 12.7( M! 12.1 J.'. .
f y ,} MAT 1Q'Q 6 10.8l k' J1.8@ .NW M ~' ?.d% A ,.9 K"["% . ' 8.7gh f %. % p 9.4 .
/10 to Mandatory Redemption
. Preferred Stock Subject &c ! ?,lQ..
k'JQ .> _ W,4 C MMg g h[3.8j g/ i- ,36 y .s-4
.0 g , f 4.24-pq -g n p 5.0.;,@:.g to Mandatory Redemption ,pg.,,g ,.,.,
Preference Stock Subiectr g6 g.e d%. . o
& 17 >
to Mandatory Redemption MDMh1.8 F,$ 2.0% 1 t v p.m.pk.y@. p'i , , - '.'--
- J. 7N' y@ . -
L. ,W:51.ek . 49.7 Nh5f7 M
- T49.2' " 1 52.5' ' 52.1 Na /53.ON Long-Term Debt
. w.iG.;,
. . . .N. j"TO Y@
,.#. <.100.0%W& 100.0%W100.0% 100.0% ' Q
"-. Total Capit4izatiori/G. 100.0% 100.0% 4
- 100.0 %
q hg Cost of~--a Preferred &i .h,afc
;mGW Qitf fgp C ...e9% 0jem 3 g
, , y i*, = M ?139Eh l Preference 5'ock ." W. M $.0 y;f-EgjyWM:W f3d@t.fM.BI? r ii l
Outstanding at December 31 :.b,G /cr 4 8.38%(M 7.85% . , 7.84% 7.70% . 434% g
/WM
~,
- m
'a
%n% %~[f;<836$47,99% yj a,.M.;%4fp Cost of Long-Term Debt' 319# WMd 'A
! outstanding ar December t3%;4 q 71%i it7 l l
t, . tL , . mmy 19.16%2
. kN wggr$yb.gM : ' W N/d / W t % M N h. %g M Ly w kw 5x:%,!M.2pp g? 7.17% ..
% U
% Common per SeraserStoch
..m.
Data.m
._fih L . tbs w ~ ~
baming CommonShat -
~
<g"w- .
ss tt m su7 p$ue,wmge3 v m) M %n 9 mwy ;$t95 4 y$ e g g p M M/ g%vCommon Retumfor(Meragg Equnya $. '@ A 1% . g1t7h g 13. m%y ogw
$nda P4Pg5harenw.
v1 % p$167 d A yE$t vmmy -er MV98W l c.icommon $tod omdend, . - 1 6 T48Hyp[87% M k W @y M@ p W 78V d MM fp & B5%
~
4 1 7 NPay6ut G Common Stockind Ratio &I.f.%endd.;J p r. ' O at%g pMpMMd " x 8t cenaminggatxiatoecembeo 31TZfag -
.- .sQ M9.0 f 9.9%h 6.1WS &
- p. gW
%yteldatDecernber: g gg.13.
159,62 ">I4 52,120 @ gr.s x 74 } M3haies of CommonstockC@$g L
. wxiff %ss,s2e w . . Wacue@m Si 39,8ss Ny dMM e .s LjM outstanangno-cembeP41 g Book value percommont , .w+4 e M.tr 314.2e & ti6.33b516.93 d V $15.93gy $15.294.$13.28r r M M N M P:MC
- p@y&%atoecember3tg' rket e*@
h - u w
< 1h ' j.87 f . C $y3%w$20.875 p$16.75M$ n. m# n% w% 25 e
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-w M:' i Nh4d E. 1;s Registration
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' $po $ Na,z, h;p.%2 p%3 n xhh8 ment and Stock ' Ohio Purchase Edison Plan raised Dividend e >
2
%. Q)M.QQ) Tpertaining to the transfer or 4[ registration of all classes of Compariy@ $
,:;y;hy pq p stock can be'obtained bpcontacting / . Tup 37 percent over 1979. 'y: '. M 3: Q gone of the following Transfer Agents 3,@ A total of 34,316 participants, or 195 . f kr SMIOMf .o 4dp w Mh9.,$,/W'M3;g@h.43 M a or fegistrariof OhioIdison C6mpanydfo percent of Edison's stockholders of {fg, ' li i DIM record, had signed up for the plan bywgy O
' 5 R'" f $ / }ITr'ansfer'CINkTt@y@g@gNy6the,end,of the year, By reinvest pg
,, , >i f q$Qgg g76 OhioSouthEdisonMain StreetCdr'npa ds gMg their dnndends totaling $15.8
.: w MW.Q. FAk >; x 2 A Jhthey acquired y 1,314,959 rdditional9g,MJo .
of y(W 7 s <- i
< y t~ j c. wm$n.W-:q , p p Contine'ntalr Stock ron, Ohio,44308m$r#
Transfergp ;. s M,5W. the optional cashshares payment feature of common sto
" P
%.3 h9e Rector Str 'W the plan, participants also made cash t .j V m
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O qg Afbh)hd$- h f! h hWh gBancOhio Natione! Bard$mM N ghg Qh. payments of $13.8 milkon for the- 2gpur
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. w > .d, A pte l OnetC6 cede Plaza f
,,.my p%:904 4 9 gAkron, Obo 44306h, MQgg&f6 eg h py their quarterly drvidends automaticallyl n% p,!
.'c 2 g ( . %;g { Attn: Registrar g M. r v'P 11n additional shares of common stoc 3
i. s; OhMM: g m. q:% [3Mbstinh s -em M g, at a price equal to 95 percent of M.h2y$$ 9 % market value. Also, they may buy . 4
.%ph f
Q additional shares through optional
- e. WJg j wgyf. W d, The Company's ilisted on the New York and Midwest commori stock is fj,j; cash payments at a price O' equal -
to 5 ?f:r M-: 4 - - NW6M;$ i$%p jciFi!N hlfN[f)$dIf 5tock on the Exchar+ges and,rospectus traded can be on other3-n . $. c.. kb Additional
- Mw ; * ~ . boliOE - gp cdfi Y ;%v %M^ MfWe % W " *.". ~ # Nobtamed by wnting to Stockholders a
d d 15ennces or;by calling 1-216-384-5513hM% _
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" 4, i b d G dersh g . =2 1 * + e <u~ % Q vjg5 (' q w w$Annudk . . ^ ' Availabilityof A-W~~.WMbV Form 10 KP.m&,% N'*g ,
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, ' 'noito attend abarmeetmg, (be itockholMIf p ovided you would withoutcharge like to g r.2 M y; t W%ph,.Mq0;N :
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receive a copy wnte eM to Cregorof this report, a1 pleasey
; W: WND Mrr3 qK .? j ' (oitthsprony' cavam pais^ nted onihe tienis o# hosiness y F.13 Flame, Secretary,i y N q @S,kA&f ;.
e af tkmeetmg card by Elling 5 mailed that toy Ohio Edrson Company,76 South , @ G7i
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j M idaeach stockholder,approximately
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