ML20134C415
| ML20134C415 | |
| Person / Time | |
|---|---|
| Site: | Oconee, Mcguire, Catawba, McGuire, 05000000 |
| Issue date: | 12/31/1984 |
| From: | Booth D, Willie Lee, Tucker H DUKE POWER CO. |
| To: | Adensam E, Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8508160301 | |
| Download: ML20134C415 (49) | |
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! About Duka Power Company i
1 i i Duke Power is the nation's of which were derived from
- eighth largest investor-owned North Carolina,30 percent electric utility. With headquar- from South Carolina. Revenues ters in Charlotte, N.C., the Com- totaled $2.7 billion.
- pany serves nearly 1.4 million 1
customers in a 20,000 square- Duke's retail customers are mile area of North and South served through 96 district and , Carolina known as the branch offices. In addition, the .: Piedmont. Company sells electricity to bulk users at wholesale and Duke operates two nuclear contractual rates. stations, eight coal-fired plants and 26 hydroelectric facilities. i A third nuclear station is under- ! going pre-operationaltesting l and is scheduled for commer- ! cial operationin 1985. Sales in 1984 totaled 54.4 bil-lion kilowatt-hours,70 percent l i l . l l l l l 1 l
Financial Highlight 0 Percent wicrease Duke Power Cornpany 1984 1983 (decrease) Kiowatt-hour sales 54,399,254,000 54,151,333,000 - Electnc reenues $2,710,015,000 $2,420,252,000 12.0 Earnings for common stock $ 399,545,000 $ 368.677,000 84 Common stock data Amrage shares outstanding 100,346,000 97,784,000 2.6 _ Eamings per share $3.98 $3.77 5.6 Drvidends per share $2.42 $2.32 4.3 Book value per share (yearend) $27.80 $26.26 5.9 Retum on average common equity 14.8 % 14.8 % - Rant construction costs $ 644,754,000 $ 679,726,000 (5.1) Total electnc plant, net $6,152,618,000 $6,162.492,000 - Peak load (Kw) Summer 11,043,000 11,554,000 (4.4) Winter 10,863,000 10.378,000 4.7 Eamings per share Retum on average common equity Donars Percent 16 50 % l l 6
$3 59' l ,
3 IS398 52 08
$195 l
l 1980 1981 1982 1983 1984 1980 1981 1982 1963 1W E A1JWed 'ettr1(NC pts *> at yes g@ _ 2 I DMdends hdcated rateper
$2 48share E Totat Correany rettri = . , g www ar==w, e two an w-ce twosi - so se r y e=rgy e - pa r ++ : %
- m_.L _ r Tb Our Sharehoklers:
1984 was a productim and profit- prowd a revised long-term financial plan able year for Duke Power Company. designed to maintain Duke's improved Eamings per share rose to $3.98, financial strength. up 5.6 percent from $3.77 in 1983. Total retum on common equity remained sta-ble at 14.8 percent. Superb nuclear performance Higher sales, increased investment Nuclear power continues to be a income and higher non-utility income success story at Duke Power. The Com-contributed to the improved earnings. pany's fim nuclear units compiled an The effect of rate increases was sub- operating record in 1984 unequaled in stantially offset by higher costs. the electric utility industry. And for the Total kilowatt-hour sales, including f rst time in the Company's history, more portions of electricity supplied to certain than half of its electricity was generated purchasers of the Catawba Nuclear Sta- with clean, economical nuclear power. If tion, increased 4 percent in 1984- this electricity had been generated with coal,it would have cost an estimated g $400 million in additional fuel expense. We also took major steps toward improwd eamings further wrapping up one of the largest nuclear strengthened the Company's long-term plant construction programs in the financial position, building on 1983's nation. noteworthy gains. We generated 86 per- Unit 2 of the McGuire Nuclear Sta-cent of our capital requirements from in- tion was brought through the regulatory temal sources. Fixed charges cowrage, thicket into commercial operation at the which indicates the number of times lowest cost of any comparable unit in earnings cover fixed costs before taxes the nation. Construction of the Catawba and dividends, increased to 4.21 times. Nuclear Station is nearing completion. Common stock equity as a percentage We loaded fuelinto Unit 1 of Catawba, of total capitalization climbed to 45 receiwd a full-power operating license percent. and began generating electricity during Each of these measures satisfied pre-operational testing. The unit is a target of the Company's long-term fi- scheduled for commercial service this nancial plan. In recognition of this spnng. Construction of Unit 2 is ahead stronger financial condition, major rating of its 1987 scheduled completion date. agencies again upgraded several of the inlate December the Company Company's secunties during the year. completed the sale of another portion of Responding to heightened inws- the Catawba station to a group of South tor concern about nuclear utilities, the Carolina municipal customers. The $457 Board of Directors in January 1985 ap- million received at closing added signifi-3
cantly to corporate liquidity. The Com- begin operating, corresponding rate in- outstanding service. We all benefited pany will retain the remaining 12.5 per- creases will be required. Although most from his wise counsel and wish him well cent of Catawba and will be responsible of the station has been sold, the Com- in future endeavors. W. W. Johnson, for the station's completion and pany will be purchasing large amounts chairman and chief executive officer of of power from the plant's other owners Bankers Trust of South Carolina, was operation, Duke's noted successes in the for some years. The cost of this pur- elected to replace Bill Watkins on the design, construction and operation of chased power, along with the cost of Board. We welcome him to the Duke what we think are the finest nuclear Duke's interest in the plant, will have to Power family. plants in the country are featured in a be reflected in rates - a fact not wd The continued hard work and special section of this report, beginning understood by many of our customers. dedication of our employees also de-on page 14. We prepared for this, and an active pub- serve applause. We must remember it is
- lic education effort is under way their individual achievements combined throughout our service temtory to ex- that produce the many accomplish-1985 and beyond plain the need for increases. ments we are so proud of as a The next severalyears will be a Similar educational efforts will be company period of both opportunity and chal- required to address a number of other Finally, thank you for your contin-lenge for Duke Power. With completion issues likely to confront the electric util- ued support. Let us hear from you if you of our nuclear construction program, we ity industry in the years ahead. These have any suggestions or questions.
expect to be able to finance near term include tax legislation, proposals to deal capital requirements entirely from inter- with acid rain, and nuclear regulatory re-nal sources. Therefore, no public offer- form. Management will continue to keep ings of common stock are anticipated for a number of years. This respite from ' capital markets, together with the pros-shareholders informed on these and other issues. As we look ahead, we understand
- %[
William & Lee pect of our area's continued economic we cannot be satisfied with past and cna,rman er tne sua aw cner necur~e ort,cer growth, strong nuclear generation and current successes. The environment for increased non-utility eamings, should Duke and all electric utilities is con-help sustain or improve our financial stantly changing. Markets and technolo-position. gies change. Laws and regulations The addition of CatawbaUnits 1 change. The needs of our customers m 2 T ~~ and 2 to Duke's generating system will change. We intend to approach all provide sufficient generating capacity areas of our business with the same guglas W. Booth and relatiety stable rates into the 1990s flexibility and determination we have caer operanno orr,cer
-tothe benefit of shareholders and demonstrated in our nuclear power pro- February 15' 1985 customers alike. We are working hard to gram. We face the future, alert to the dif-get both units into service on or ahead of ficulties, but confident in our abilities.
schedule and under budget. We would especially like to thank Howeer, some entical challenges William L Watkins, who retired from the still lie ahead. When the Catawba units Board of Directors after nine years of 4
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Year in Review
' l 1
Financial results in September, marked the ninth consec-utive year the dividend has been raised. Eamings per share of common it continued the Company's policy of stock rose 5.6 percent to $3.98 in 1984, regularly increasing the dividend and ; up from $3.77 in 1983. Total eamings maintaining a payout ratio of between l were $399.5 million, up from $368.7 60 and 65 percent. '
~
- Fin ncialStatementsandNotes e im% eamings were attnd-Wn on page 26.
utable to higher sales, increased inest-ment income and higher non-utility eam-Sales and customers ings. The effect of rate increases was substantially offset by higher costs. Total Total kilowatt-hour sales, including Company retum on common equity re- portions of electricity supplied to certain mained steady at 14.8 percent in 1984. purchasers of the Catawba Nuclear Sta-Eamings coverage of fixed tion, increased 4 per cent for the year. charges rose to 4.21 times, attaining Sales of electricity, excluding cer-the Company'slong-sought goal of tain joint Catawba owners, were essen-3.5 times. tially flat, reflecting milder weather during Duke generated 86 percent of its the year. Sales totaled 54.4 billion kilo-capital needs internally in 1984, includ- watt-hours, compared with 54.2 billion ing proceeds from the Catawba sale, in 1983. compared with 83 percent in 1983. The Of the 54.4 billion kilowatt-hours increase resulted primarily from the ad- sold in 1984, general service sales in-dition of Unit 2 of the McGuire Nuclear creased 5.6 percent, while residential Station to rate base and the $457 million sales rose 1.9 percent. received from the sale of 25 percent in- Total industrial sales increased 4.4 terest in Unit 2 of the Catawba Nuclear percent, primarily because of an 8 per-Station. cent rise in non-textile industrial sales. At year-end the Company's capi- Textile sales grew 0.5 percent for the tal structure consisted of 44 percent year. However, in the last quarter, sales long-term debt.11 percent preferred to textile customers declined 7.3 per-and prefercoce stocks, and 45 percent cent, compared with the fourth quarter common equity. of 1983. This reflected the rising pres-The Board of Directorsin July sure of imports on American textile raised the quarterly cash dividend on producers. common stock to 62 cents per share, Wholesale and other energy sales up from 59 cents. This brought the cur- declined 17.5 percent because of re-rent indicated annual dividend rate to classification of certain wholesale cus-
$2.48 per share, up from $2.36. The in- tomers who were joint owners of the crease, effective with the dividend paid Catawba Nuclear Station dunng the year.
i Sales Electnc revenues B4ons of KWH Buons of doRars M5 M2 M" 52 3 $2 4 51 4 M2
$19 t
1980 1111g,7 1981 1982 1983 1964 1980 1981 1982 1963 1984 3 ins nary 3 Rescent 5 tna non 3 Resdent 7 If E ht3Jstnal textee E MC1JSind tentde L ..
Of the Company's total sales in Rate increases will be filed in both and will be reset annually The funds are 1984, residential customers accounted North Carolina and South Carolina in to be used to finance pollution control for 27 percent, general service custom- early 1985 to reflect commercial opera- facilities at the Catawba Nuclear Station ers 20 percent, non-textile industrial tion of Unit 1 of the Catawba Nuclear in York County customers 21 percent and textile cus- Station and power purchased under At the time the bonds were sold, tomers 19 percent. Wholesale and other contracts with the station's joint owners. the county reimbursed the Company energy sales accounted for the remain- See Note 2 on page 37 for addi- $34.1 million for costs already incurred ing 13 percent. tionalinformation. for the facilities. The Company's customer base Also in October. Duke defeased grew 2.8 percent in 1984, totaling nearly Financing $32.9 million of its $50 million issue of 1.4 million at year-end. Duke financed its construction 14% percent first and refunding mort-Additionalinformation on sales and program and fulfilled other capital re. gage bonds, due in 1987. customers can be foundon page 39. quirements with internal funds in 1984. (A defeasance of debt is accom-For the second consecutive year the plished by placing into an irrevocable Rates and regulation trust a portfolio of U.S. Treasury secun-Company had no public sales of com-Regulatory commissions in both mon stock, and none are anticipated in ties that will meet all interest and pnnci-Carolinas approved rate increases in the foreseeable future. pal requirements of the debt being 1984, pnmanly to reflect operation of The Company received $457 mil. defeased. It is a method of removing Unit 2 of the McGuire Nuclear Station. lion on December 20 from the sale of a debt from the balance sheet before the Nevertheless, the Company's rates re- 25 percent interest in Unit 2 of the Ca- debt is retired.) mained well below the national average. tawba Nuclear Station to the Piedmont The Company also has chosen to The North Carolina Utilities Com- Municipal Power Agency. The agency redeem the remaining $17.1 million of mission authorized an 8.4 percent, or represents 10 wholesale municipal cus- the issue at par value on March 1,1985.
$131 million, rate increase in June. The tomers in South Carolina, the first call date.
ruling allows a 15.25 percent rate of re- A group of North Carolina munici- Two major rating agencies recog-turn on common equity The Company palities purchased 75 percent of Ca- nized the Company's improved finan-had asked the Commission for a 13.6 tawba Unit 2 in 1978. Groups of cooper- cial condition in 1984 by upgrading cer-percent increase that would have gener- atives in North Carolina and South tain of its secunties. For the second ated an additional $212.8 million a year. Carolina bought 75 percent of Unit 1 in consecutrve year, Moody's Investors The request sought a 16.5 percent rate 1981. The Company will retain a 25 per- Service, Inc., raised its ratings on the of return on common equity cent interest in Unit 1 and operate the Company's fixed-income securities. The Public Service Commission of station for the joint owners. Moody's raised its ratings on Duke's South Carolina approved a 17.4 per- Duke raised $40 million in October first and refunding mortgage bonds to cent, or $99.7 million, rate increase in through the sale of annual tender, Aa2 from Aa3, preferred stock to aa2 March. The decision allows a 14.75 per- pollution-control rewnue bonds issued from aa3 and preference stock to aa3 cent rate of return on common equity by York County, S.C. It was the Compa- from al. Duff & Phelps improved its rat-Duke had requested a 23.7 percent, or ny's first use of annual tender bonds. ing on Duke's first and refunding mort-
$136 million, increase with a rate of re- The rate on these 30-year, tax-exempt gage bonds to 4 from 5 and its ratings turn on common equity of 16.5 percent. bonds is 7% percent for the first year on preferred and preference stocks Capital structure acumme- Eamings coverage of fixed charges Billions of dolars ssi se2 SEC method
$58 43 % 45 % 4 21 s
$5 3 Goaf 3 5x 39 %
2 73-14 % 13 % 12 % '2% 11 % 44 %
\2%
4gg 47% 45 % 8 14R0 1981 Newa 1982 1983 1964 1 265s 1980 1981 1982 1963 1984 Long term debt
i L T F i one level to 5 and 6 respectivei, Construction the McGuire Nuciear Stanon int e Additionalinformation can be mercta operation n Var r %s x,rr founa on pages 38 and 39 After nearh tW0 decades of rapia pieted the station or Lake Nyma' ouiiding to meet the expand:ng energ, northwest of Charlotte N C Th e investor plans needs of the Piedmont Carohnas Duke 1180 000 miowatt ur mt enterea con me The Compang r January 1985 Power moved closer to completing 'is c:a seNce at the towest cost 1+ a , - i nuclear construction program dear un:t in the nation mmina on une i r>egan provong shares 'or the Cus I tomer Stock Purchase Plan and the Du The Company orought Und 2 of between March 1983 and Min 19E
@nd Rein sestment ana Stock Purchase
[h # ~ Pv t rough stoc k market ourchaseS , s l.f (-Q, '
% a result dudends reinvested in .c %. <. v<' , * =
N ,g -i.; ;*: ' s,... c sV aMtona! Shares of common Stoch dier [l ,[ f' s4. :/S . .;{. . Y f,. e. .(. [ .' " k QN '.' . V* tne first d the year no longer qualty for ."s r.> 1 i ; f,, c e :. , , , . -
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%dera' income ta= deferra' The deferra' .i h. .. .. , [? ~e,.. I .
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estment plans in the stock market
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More than 8 000 Duke Power cus [ y [ W j d . j } 3 , , C ' [. .[ H ' <. 4;T .. - - l. . : ;.) tomers have bought snares through the ;,'. # . K.) ~ s,/ . j p.J. +.. '
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r l l ! i l l l l Duke also began testing Unit 1 of Catawba Unit 2, the Company's the Catawba Nuclear Station, located in final nuclear unit, was 87 percent com- ) York County, S.C. The 1,145,000-kilowatt plete at year-end. It is scheduled for l i unit is scheduled for commercial service commercial operation in 1987 and is in the spring of 1985. It first generated currently ahead of that timetable. electricity dunng testing January 22, The Board of Directors in February l 1985, after receiving a full-power license 1984 set completion dates for the Bad i January 17. Creek Hydroelectnc Station, under con j struction near Lake Jocassee in north- i Western South Carolina. Units 1 and 2 of the 1,000,000-kilowatt, pumped-storage hydroelectnc plant are sched ufed for operation in 1991. Units 3 and 4 , are set for 1992. The station is designed to pump water from Lake Jocassee into an upper I _ . reservoir dunng penods of low demana i and then release it to generate electnc-
-. ity dunng times of peak demand E '. The project was 4 percent com-t plete at year-end.
- Generation and capacity
.i - For the first time in 11 years of h,'(. operating nuclear power plants, in 1984 L.s , Duke Power generated more tnan ha f of its electricity with the atom.
i[.y .y Duke's two nuclear stations pro- 7 h',..l, duced 56 percent of total generation for
@ the year, compared with the previous all-
;h y ,(1 time high of 42 percent in 1983.
, / The Company's network of eight unit 2 of ine oconee Nuclear station cornpleted 418 Coal-fired plants continued to carry a No dYEa1 9 htN$a$" ng tsconIn large portion of the load, producing 45 uous run. the 860.000 iaiowatt unit generated rnore percent of total generation. Hydroelec-8 biilon tulowatt nours of electncity. a national InC stations supplied 4 percent of sys-tem energy Interchange sales, pnncipally to certain Catawba owners. reduced tota!
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A generation available to Duke's custom- eration of a light-water reactor - 418 Light & Tbner magazine's most recent ers by 5 percent in 1984. days. It generated 8.3 billion kilowatt- surwy of comparative heat rates among The addition of Unit 2 of the Mc- hours of electricity during the uninter- ihe country's 100 largest investor-Guire Nuclear Station to the Duke gen- rupted run, a national reco d. owned electric utilities. erating system boosted nuclear output. Belews Creek Steam Station, the (Heat rate is the amount of energy The 1,180,000-kilowatt unit, declared largest coal-fired generating plant on the required to produce a kilowatt-hour of commercial in March, generated 7.4 bil- Duke system, celebrated its 10th anni- electricity) lion kilowatrhours of electricity dunng versary in September. At year end the in addition to the overall award, the year. two-unit,2,240,000-kilowatt facility had Duke's network of eight coal-fired gen-Concurrent with commercialoper- generated almost 125 billion kilowatt- erating plants was recognized as the ation of the McGuire unit, the Company hours of electricity since going into op- most efficient fossil system in the nation remoed 997,000 kilowatts of aging coal- eration. Belews Creek has consistently again in 1983. The coal-burning system fired capacity from service. The units are competed with the Company's Marshall has led the country in efficiency 12 of being prepared for extended cold shut- Steam Station for top national honors in the past 14 years. down for possible usein the future. generating efficiency, placing one of its Further, six of Duke's indrvidual Duke's nuclear units achieved their units first in the country three times. coal-fired units placed in the top 10 best operating performance ever in 1984. Duke Power's generating capacity among more than 2,000 fossil-fired The nuclear system achieved an overall as of December 31,1984, totaled generating units evaluated in the survey capacity factor of 76 percent for the year, 13,594,000 kilowatts. It consisted of Unit 3 of Marshall Steam Station was a substantial improvement over last year's 6,603,000 kilowatts of coal-fired capac- named the most efficient fossil unit in 68 percent and well above the industry ity,4,940,000 kilowatts of nuclear power, the country A Duke unit has held the averageof approximately60 percent. 1,452,000 kilowatts of hydroelectric ca- top spot seven of the past eight years. The three-unit Oconee Nuclear pability and 599,000 kilowatts of com if the Company's overall generating Station recorded an 83 percent com. bustion turbines. This represented 49 system had performed at the average bined capacity factor for the year, sur. percent coal,36 percent nuclear,11 efficiency of the systems surveyed, fuel passing 1983's record performance of percent hydroelectric and 4 percent costs would have been $73 million higher. 79 percent. McGuire Nuclear Station's combustion turbine capacity. Duke also operated the two most two units achieved a 68 percent capac- efficient pressurized-water reactor sty factor. Generating efficiency (PWR) nuclear units in the nation in (Capacity factor refers to the Duke Power was cited as the most 1983, according to heat rate statistics amount of electncity a unit produces in efficient producer of electncity in the compiled by the Nuclear Regulatory relation to the amount it is designed to United States in 1983, the latest year for Commission. produce if operated without interruption which industry operating statistics are Overall, the four nuclear units the year-round.) available. It was the third time the Com- Company operated placed among the On an individual-unit basis, Oco- pany has captured the honor in the past top sewn of the 46 units of similar de-nee Unit 2 led the nation in 1984 with a four years. sign. Unit 1 of the McGuire Nuclear Sta-capacity factor of almost 97 percent. Duke's combined coal and nu- tion led the nation's PWRs. A Duke nu-On January 29,1985, the unit set the clear generating system led the nation clear unit has ranked first in the United world record for longest continuous op- in fuel efficiency, according to Electric States seven of the past 10 years. Net generation BAons of KWH 59 6 61 0* 572 57 7 5 1980 1981 1982 1983 1984 5 HyGo and other * ' g
[ . i J Load management / peak demand 352,000 kilowatts and winter peak de-mand by 427,000 kilowatts in 1984. Duke Power's load management Since the load management effort program aims to reduce the rate of began in 1976, the Company has growth in peak demand while increasing achieved a cumulative reduction of 1.8 off-peak energy usage. The program million kilowatts in summer peak de-continued surpassing its targets by re- mand and 2.3 million kilowatts in winter i ducing summer peak demand by peak demand. The goalis to reduce the ! summer peak by 5.4 million kilowatts
-; s,- c ., ...# .% a . and the winter peak by 6.9 million kilo-Nh'.'.'9&Nhkg!
i . ! ,, , . p k [.i)$ M N i .1; ? I. M [. watts by 1999 and thereby avoid or l h TM[*": I delay the need to build costly new gen-( mq.f 478;N Q N jyNjk t*<[-N # Jh '[I'O / N[:.I l $ .7 .: ,.
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Expanding on 40 existing load
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s 5 OVc management programs, the Company 1 ,y ([o l -g
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introduced in 1984 an off-peak water 1 j k . ~- } L. F Q '.h.t:-?".1 ;[ ..f) heating rate for residential customers. It g.l , N . E.. S
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{l . L _ - ;- . .p.4 j < , ' J7. f Jg.], .. ,1, f. [,. - limited, off-peak hours. g,: 9 , ;J n;T, . -3 ; , ,. ,. g 4 . ,i ' Winter usage for 1984 peaked M Wj((,7A . E y i j .d i d',ib. 3 } : ; ,' 31 W ;.{ 4. f ,..' , , February 8, when customer demand reached 10,863,000 kilowatts. This fig-k,;yyf.
.20 ure was 4.7 percent above 1983's win-l
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3-of 11,043,000 kilowatts on July 11,1984.
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g percent below the all-time peak of j 9.A ,. ...r... 11,554,000 kilowatts set August 23, ) F 4,Y.N h..w .
- h. '
. 7.;: I' . , . ? . g f[E. S 2;U;.1983.
N . .,;,.~.[*? M i 9,1. ' S . <J ;f N ? A new all-time peak of 12.687,000 e x
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... 334, gg . kilowatts was reached January 21,1985, hA7- . QA.g- j"p ,9 ^ f. .
- 7. p ; t ' ;,g.ci. dunng record cold weather. The new y J. J ,3 ~ fi : 7..g . ' 'i %$.s-c"9g peak was 9.8 percent above the previ-
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; investrnent n new and expanded ndustry n Duke s i semce terntory rose to a record $2 6 txilon in 1984 a 43 percent increase over 1983 The General Electrc Microelectronics Center n Research Tnangle Park near Durharn. N C . rs representatne of the type of hegh i 12 technology that is beng attracted to the Piedrnont j Carolinas
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Employeeincentive program Through a related effort, the Com-p ny is awarding six, four-year college Duke Power's 20,000 employees scholarships and 14 honorary stipends continued to excel in the ever toughen-each year to high school seniors in its ing Employee incentive Goals Program service area. Called "The Duke Power in 1984, achieving eght of 10 goals, Scholastic Excellence Awards," the plus a bonus goal of cost reduction. scholarships and stipends willbe EmpI5yees met or surpassed tar-awarded to students who show excep-gets in safety, service reliability, affirma-tional scholastic ability and leadership trve action, load management, nuclear otential. generation, design and construction' Duke employees responded to the corporate spending and quality of nu-clear operations. 1984 general election by organizing a bipartisan good gwemment campaign Employees have achiewd 36 of cMed " Power in Citizenship." The grass 42 corporate goals since the program began in 1981 - an 86 percent suc-mts eff%stered neW 20,000 new voters, informed citizens about is-cess rate: Achievement of the goals re-sues and encouraged them to vote. sults in additional Company contribu-Duke Power set a record in 1984 tions to the Stock Purchase-Savings for United Way giving. Employee contri-mpa te gms to M ns e s ngent goals have campaigns across the service area to-been established for 1985' taled nearly $2.3 million, making Duke andits employees thelargest single Community service contributor in North Carolina and South
"~
Duke Power employees gam from Duke also expanded its Commu-the heart as well as the pocketbook in nity Challenge Heating Fund, which 1984, serving on community boards, helps the needy pay their heating bills. volunteenng in schools, supporting local The Company provided $1 to desig-churches and helping the less fortunate. nated community service organizations in addition to serving in traditional for ewry $3 raised from other sources. ways, the Company and its employees Duke pledged $150,000 in matching established important new civic pro-funds, making available $600,000. grams. Through its " Power in Education. program announced in Apnl, the Com-pany is marshaling its resources to im-prove primary and secondary education in the Piedmont Carolinas andis en-couraging other businesses and indus-tries to do the same. Cumulativeload management Wnter MW 6900 mo 1985 1990 1995 1999
,w.as 13
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TDuke is the only investor-owned kolectric utiHty that designs, buRds 9 anal operates its power plants with : j Aits own' work force. With the cond , i M pletion of Unit 2 of the Catawba the ' & g clear. Station, the, Company will have'1 L tuilt ansi placed inte service seven 5.' nuclear units in'20 years OaII at 4 costs atfor among the.lowestin the l (M d._ nation.f u; E'.'r; , . .L@: T 'w:?(f. -
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_ _ _ _ ._ e .__ _ Making Nuclear Power Work 1984 was generally a bad news wasn't new. The achievements of 1984 year for the nuclear power industry Re- simply continued a Duke tradition of ports of delayed and abandoned plants, making nuclear power work. Going skyrocketing costs, licensing holdups back to 1973, when the first unit of the and charges of mismanagement made Oconee Nuclear Station began opera-front-page news. In many cases these tion, Duke has built each of its nuclear problems found their way to Wall Street. plants at a cost substantially below the Against this bleak backdrop, Duke national average. And year after year Power's nuclear program recorded its they have ranked among the top in the "While other utilities are reeling most outstanding year ever. nation for efficiency from cost overruns ad operating The Company placed its fifth nu- Before exploring the reasons be-M clear unit into commercial operation at a hind Duke's nuclear success, it is ap-
, ,,, gg cost of only $918 per kilowatt - the propnate to assess the benefits: Why has compilesi a recored that is the lowest of any nuclear unit completed in should anyone evaluating Duke Power envyof theinclustryp its era. Duke also began pre-operational consider its nuclear program a plus?
rne non steer.rumat, october 17,1984 testing of its sixth unit, built at a price The answers are several, and they expected to be well below the compara- are allimportant. ble national average. The Company's frve operating nuclear units set records a Secunty. In the face of an uncertain for both capacity factor and efficiency. world energy picture, it would be impru-And far from being a financialliability, dent to rely on any one fuel source. the nuclear units were again credited Duke's mix of nuclear, coal and hydro-with boosting earnings. At the same electnc generation ensures its custom-time, fuel savings from the units helped ers a reliable supply of electricity The keep customer rates well below the na. Companyis dependent on no owrseas tionalaverage. country forits fuels. Duke's success 6s helped balance a Economy Despite higher construction the nuclear news of 1984 as upbeat costs, nuclear plants pay off through stories about the Company's program lower fuel expenses. In 1984 the cost of appeared in pnnt. One long-time nuclear fuel for electricity generated by Duke's cntic told The Mell Street Journal that nuclear plants averaged only .6 cents Duke was "the glaring exception," de-per kilowatt-hour - just over half a scribing it as "the company that man-penny By comparison, the per kilowatt-ages to do it right." Duke's top execu- hour cost for coal was 1.8 cents, while tives were repeatedly asked to share the oil and gas were many times higher. Company's nuclear philosophy and help formulate industry policy. e The environment. Nuclear plants offer While the attention was flattering, the cleanest available method of gener-the truth of the matter is that the news ating electricity on a large scale. That's i 15
f___ i , E 7 l
' especially important as Americans be- materials by purchasing them through comeincreasingly concerned about its subsidiary, Mill-Power Supply I acid rain. But more important than the fees Summing up the pluses, Duke's saved is the control gained with the use l .j nuclear plants promise a reliable, se- of in-house personnel. The people
- cure, cost-efficient and environmentally building a Duke Power plant work for sound source of electricity. With com- the same company that will operate it i pletion of the Catawba Nuclear Station for decades. They have a long-term in 1987, the Company will have a gener- commitment to Duke Power,its objec-
". . . Duke has an engineer's con- tives and its programs. Therefore, they ating system adequate to meet the ex- ; viction that the best-engineered panding needs of the Piedmont Caro- have a long-term stake in the piant's plantinevitably also will be the linas into the 1990s. quality, safety, reliability and efficiency .
most efficient, lowest-cost, most Duke put its faith in nuclear power Many of the skilled craftsmen reliable and,in the end, snost and is making it work for customers and building the Catawba plant today N' N
, shareholders alike. worked on the Oconee and McGuire plants before it. They share the pride Fcybes, Fetruary 11,1985 The do-it yourself approach when those plants lead the nation in ca-Duke's nuclear success is rooted pacity factor and efficiency in its "do-it-yourself" approach - Duke construction and operating unique among the nation's investor. employees are also part of the commu-owned utilities. Design, construction, nity in which a plant is being built. They operation - it's all done in-house, with and their families lim nearby, and their Duke people, from start to finish. This presence in the community is testimony do-it yourself tradition dates back 80 to their commitment to the plant's years to the Company's founders. safety and quality.
Duke's design engineenng staff of Finally, use of in-house talent en-nearly 1,500 qualifies it as one of the sures intimate management involw-principal architectural / engineering ment in the design and construction of teams in the nation. Add to that a 5,000- Duke's nuclear plants. Lines of commu-member construction force, ~a quality nication are short, and keeping them assurance team of 400 and a power op- open is a top priority Managers and su-erations department of more than pervisors work on-site and ask the 5,700, and Duke has the in-house re- tough questions, enabling them to iden-sources to meet any challenge, tify problem areas and make corrections Much like the do-it-yourselfer at early. This saves time and money. home, Duke saves money by avoiding Management attention to design contractors' fees, outside consultants and construction goes beyond the and mark-ups on materials. The Com- drawing board and construction site.
' p2ny reduces substantially its cost for Four of Duke's top fiw officers are i
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_ ._ _3 i Y , i I experienced engineers. Together they in design, construction, testing, opera-have accumulated 135 years of experi- tion, radiation monitoring and decom-ence in designing, constructing and missioning. In addition, Duke hired operating power plants. nuclear experts from the project, inte-grating their knowledge and talents into Experience and expertise the organization. The Company broke ground on its While there are advantages to first nuclear unit, Oconee Unit 1, in being a do-it-yourselfer, most people 1967. All three Oconee units were fin-
"Many electric utility analysts know from r ersonal experience that if
. hed in just seven years and at a total is have concluded that heavy reli- you don,t how what you,re doing, p cost of only $500 million, an average of ance on nuclear p spells had better call the plumber. So along
$194 er kilowatt. Today, Oconee has trouble. One utility that contra. with Duke's do-it yourself approach generated more electricity than any dicts this theory is the Duke came a commitment to acquire the ex-other nuclear plant in the nation. When Power Company." perience and expertise necessary to d Catawba Unit 2 is completed, the Com-Puche Utihres Fonnsghtly. November 22.1984 the Jcb nght.
any will haw designed and built sewn The importance of this was high-units in 20 years. Throughout that time, lighted in a report prepared by a leading knowledge acquired from the operating engineering and construction firm in units has been applied to ti.c design 1983 for the U.S. Department of Energy. and construction of new units. Experi-Not surprisingly, it concluded that the ence has been transfated into expertise. more experience a utility had with nu-In addition to on-the-jobleaming, clear power, the better its plants were built, Duke was one of the first utilities to es-less they cost and the better tablish formal training programs for nu-Duke started acquiring its isclear dear psonnel 4 ds Mnd hnng Center, adjacent to the McGuire Nuclear expertise early. In the late '50s and euly Station, the Company offers compre-
'60s, the Company participated with hensiw instruction for nuclear piant op-three other Southeastern utilities in an experimental reactor project at Parr erans as wen as for pdans in health physics, chemistry, maintenance, Shoals, S.C. Duke's top engineers instrumentation and electronics. Recruit-worked closely with the designer and
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contractor on the 17,000-ki!owatt ing mgstlylocalpeopfe from nearby heavy water reactor prototype. At the ecM SMs, Me WewW a highly skilled work force with a strong same time, others were sent to study loyalty to the Company and the com-nuclear operations at federal training m es R serws. centers and major universities. Duke and the other Parr owners operated the plant from 1963 to 1967, coming away with invaluable experience 19
4 1 ~ Looking ahead Through these actMties the Com-pany will continue to build on its tradi-
. With this kind of nuclear success tion of superior nuclear performance.
story, what path does Duke Power fol-Duke stands ready to take the lead Iow in an age in which the pundits are when the United States turns back to asking: "Is nuclear dead"? riuclear power and looks for the exper-in the face of today's regulatory tise needed to make it work. uncertainty, Duke has no plans for nu-clear units beyond Catawba Unit 2. e commd to no new nuclear "For winning big, our hats off to . . . construction until regulatory reform ena-h h h's leader William bles a utility to shorten the time neces-States Lee for proving that utili-ties can build nuclear power sary to complete a plant and accurately plants at affordable prices." predict its cost from the outset. While cun s Business Month. December 1984 the nation needs the nuclear energy op-tion, the Company cannot accept the fi-nancial nsk of new nuclear construction until public policy again supports the peaceful use of the atom. To help achieve this. Duke is work-ing to inform and educate the public about nuclear power. The Company is also participating in national efforts to shape a more supportrue nuclear policy. In the meantime, Duke looks for-ward to operating seven superior nu-clear units while constantly honing its skills to enhance safety, reliability and efficiency. In addition to operating its own plants, Duke will continue its role as an industry leader through support of the Institute of Nuclear Power Opera-tions and other industry organizations. And the Company will continue to put its nuclear expertice to work for other utilities through its Management and Technical Services section, established in 1982 to market its skills in design, construction and operation of power plants. 20
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Mensagement'a Dim == hat and Analysis of Financial Condition and Results of Operations Liquidity and resources in January 1985 the Company began , purchasing common stock on the j The Company demonstrated contin _ open market for its Dividend Reinvest- ! ued financialirrpromment in 1984. ment and Stock Purchase Plan and its During the year - and at year-end -
- the market price of the Company's Custamt St6rchase h 6 the next several years, the Company common stock exceeded book value ,
expects toissue new shares of com- ; _. for the'first time since 1978. Credit rat-mon stock only for the conversion of ings on first and refunding mortgage the outstanding 6.75%, Convertible l bonds, preferred stock, and prefer-Series AA Preference Stock. ence stock were upgraded during the year, reflecting the improved financial condition. Funds from operations including the proceeds from the sales in January 1985 the Board of Directors ons ome Ma@a Mear approved a revised long-term financial m, n e e mss plan. The goals estabhshed by the accwnN W 86 pement of Walcaph plan are designed to maintain the im- tal requirements in 1984 and 63 per-proved financial posrtion the Company cent for the period 1980 through 1983. has achieved in recent years. Maintaining this current lewl of inter-Fixed charges comrage nally generated funds will require timely Coverage of fixed charges, using the and adequate recomry ofincreasesin Secunties and Exchange Commission costs. These increases will occur be-method, increased to 4.21 times at causeof theCompany'sshareof the year-end. operating expenses, its inwstment in Constructum costs the Catawba Nuclear Station,and the 8 This improvement is the result of eam. requirements for the purchased capac-sasao
- ings increasing while fixed charges re. ity and energy expenses estabhshed mained relatively constant. The near by the agreements with the Catawba completion of major nuclear construc. buyers. (See Note 14, " Notes to Finan-ton projects and the sa'e of a portion cial Statements.")
I,7y 1 5679 7 15" 8 of the Catawba Nuclear Station re-duced the amount of long-term financ- Additionalfunds ing needed and contnbuted to stable Dunng the past five years, the Cor'n-fixed charges. pany ob'ained additional funds from A revised goal of 4.00 times has been the sale of $599 million in first and re-funding mortgage bonds and $88 mil-1 , 01 1982 1% i984 established to maintain the Compa. lion in preferred stock. Proceeds from ny's financial position. the sale of common stock, including gg theissuance of common stockin a Fbrcent Capitalstructure non-cash exchange for bonds, totaled The Company's capital structure at $462 milhon. (See Note 4, " Notes to Fi-assv year-end was 44 percent long-term nancial Statements") east sn 1937v 1333 debt,45 percent common equrty and 11 percent preferred stock. This com-position is in line with the revised goal of maintaining a capital structure with a The Company also received $978 mil-lion from the sales of portions of the Catawba Nuclear Station in 1984 and maximum of 45 percent long-term 1981. The December 20,1984 sale of 12eaII,33 debt,45 to 50 percent common eq-uity and the remainder in preferred stock. a 25 percent interest in Catawba Unit 2 to the Piedmont Municipal Power Agency contnbuted $457 million of 1980 i9ei i982 im ise, f MuuGBB SAW Cf porDonof CMaste f%raner Srgot 22
this total amount. The Company will tional revenues, were granted to the Construction and other expenditures continue to retain a 12.5 percent own- Company from 1980 to 1983. These ership interest in the two-unit station. rate increases sought recovery of the Total plant construction costs dechned (See Note 3," Notes to Financial Company's inwstmentin both units of during the penod 1980 through 1984 . Statements.") the McGuire Nuclear Station, higher because the Company placed the Mc-cates of return on common equrty, Guire Nuclear Station in commercial compensation for increased operating operation (Unit 1 in 1981; Unit 2 in 1984), in October.1984 the Company bor. expenses, and recoery for the amorti- sold portions of the Catawba Nuclear rowed the proceeds of the sale of $40 zation of two canceled nuclear proj. Station and canceled two nuclear proj-millionpnncipalamountof annual ects. In 1984 the Company was ects. As a result, construction work in tender, pollution-control revenue bonds granted 66 percent of the amounts re. progress as of December 31,1984, was issued by York County, SC. The quested from its retail jurisdictons, pri. less than $1.0 billion for the first time bonds were issued to finance marily to recover its investment in Mc. since 1975. pollutior> control and solid waste dispo. sal facihties at the Catawba Nuclear Guire Unit 2. (For rate information by Station. As of year-end the Company jurisdiction, see Note 2, " Notes to Fi- Expenditures for construction of major had received $34 raillion in proceeds, nancial Statements.") generating facilities and for nuclear fuel with the remainder to be received as constituted approximately 61 percent of expenditures are made. The Company intends to file rate re. capital requirements during 1984, com-quests with the North Carolina Utilities pared with 80 percent for 1980. Addi-Commission, The Public Service Com. tional funds were required for the expan-On October 2,1984, the Company mission of South Carolina and the Fed. sion and replacement of transmission transferred certain U.S government eral Energy Regulatory Commission by and distribution facihties, the refunding securities to an irrevocable trust for the the spring of 1985. These requests for of maturing secunties and the requ;re-defeasance of $32.9 millon of its 14% rate increases will reflect the Compa. ments of sinking funds. percent first and refunding mortgage bonds. The entire senes of the 14% ny's inwstment in Unit 1 of the Ca-percent bends will be retired by the tawba Nuclear Station and the ex. Future construction program Company on March 1,1985. (See penses related to purchased power Note 12," Notes to Financial contracts associated with portions of Major plant construction costs will con-the units that haw been sold. (See statute a lower percentage of the Com-Statements.") Note 14, " Notes to Financial pany's caprtal requirements from 1985 Statements.") through 1987, compared with the previ-The short-term obligations of one of ous fre years. Projected construction the Company's nuclear fuel trusts and nuclear fuel costs, excluding costs were reduced by $40 milEon in January Capital needs related to portions of the Catawba Nu-1985. This reduction resulted in a total dear Staton that ha e been sold, are balance of $85 million in the two nu_ Property additions and retirements $2.3 bilhon for the three-year period. clear fuel trusts. (See Note 12, " Notes to Financial Statements.") Additons to property and nuclear fuel of
$645 million and retirements of $410 mil. An operating license was granted to the The Companyintends to make a lion haw resulted in a net increase in Company for the Catawba Nuclear Sta-lump-sum payment of $122 milhon in gross plant of $235 million in 1984. tion on January 17,1985. Commercial mid-1985 to the Department of Energy operaton of Unit 1 is scheduled for the in accordance with the Nuclear Waste Since January 1,1980, additions to spnng of 1985. Commercial operaton Pohcy Act of 1982. This payment is for property and nuclear fuel of $3.7 billion f Catawba Unit 2 is planned for 1987, the obkgaton related to disposal costs and construction on that unit is currently and retirements of $1.5 billion haw re.
for nuclear fuel consumed prior to suited in a net increase in gross plarit of ahead of schedule. Apnl 7,1983. (See Note 1, " Notes to $2.2 billion. Retirements during the per-Financial Statements.") iod were unusually large because por- The Company's portion of the total este tions of the Catawba Nuclear Station mated construction and initial core nu-were sold and the Cherokee and Per- clear fuel costs for both units of Ca-Rateincreases kins nuclear projects were canceled. tawba is $517 milhon. This amount Retail rate increases, allowing approxi- (See Notes 3 and 5 " Notes to Financial includes $405 million spent as of De-mately 57 percent of requested addi- Statements") cember 31,1984. MS
l Construction of the Bad Creek Hydro- cent from 1980 to 1984. This growth interest and dividend income, subsidiary electnc Station continued in 1984. Units rate was largely the result of placing two eamings, merchandise sales, and Man-1 and 2 of the 1,000,000-kikmatt nuclear units into commercial operation, agement and Technical Services earn-pumped-storage facihty are scheduled additional Nuclear Regulatory Commis- ings increased from 1983 to 1984. for completion in 1991, with Units 3 and sion requirements and inflation. (See These non-utility eamings represented 4 in 1992. The estimated cost of Bad " Selected Financial Data - Effects of 10 percent of total eamings for 1984, an Creek totals $1.0 b&on, with $41.5 mil- Changing Prices," page 41.) increase from 5 percent in 1983. lion spent astf December 31,1984. In the last three years, fuel expense has Eamings and dividends forcommon Beyond the completion of Catawba and decreased at an annual rate of 5 per- stock Bad Creek, the Company has no plans cent. Fuel expense decreased in 1984 to place a new generating pMnt in ser- and 1983 becauseincreased nuclear Eamings per share increased at an an-vice before the mid-1990s. generation reduced the Company's nual rate of 7 percent, to $3.98 in 1984 need for coal, a more expensim source from $3.08 in 1980. of fuel per kilowatt-hour. The 1982 de-Results of operations crease reflected lower levels of produc. In 1984 the Company's total eamed re-tion mainly because of the economic re- tum on awrage common equity was Hemnues andsales cession. Fuel expense rose from 1980 14.8 percent, the same percentage to 1981 because the unit price of fuel eamed in 1983. Electric rewnues increased at an annual increased. rate of 13 percent from 1980 to 1984 Divioends paid increased at an annual because of increases in rates and kilo- rate of 6 percent, to $2.42 in 1984 from
. Net interchange and purchased watt-hour saless Kikmatt-hour sales fluc- $1.95 h 1980. Indicated annual divi-powa" expense decreased in 1984 and tuated dunng the fie-year penod. The dends per shareincreased to $2.48 in 1983. The decrease resulted from the factors affecting sales included the ec - 1984, up 5 percent from 1983.
McGuire Reliability Exchange, an agree. nanicm ssionin h eady 1980s, un-ment which entitles certain Catawba usual veather pattems and the eco-buyers to a portion of the energy from Significant trends nanic gowthin the ht Caminas the McGuire Nuclear Station prior to the owr the past few years. pany has expem commercial operation of Catawba Unit enced sewral years of solid growth, the
- 1. The energy purchased by the Ca-Kilowatt-hour sales in 1984, including next sewralyears present many tawba buyers, which was W e ges.
portions of electricity deliwred to certain corded as sales to wholesale custom-purchasers of the Catawba Nuclear Sta- ers,is now classified as a part of tion under the terms and conditions of Numerous factors could affect eamings. nterchange sales. their contracts, were 4 percent higher liquidity and capital resources. The most than in 1983, largely because of contin. significant of these is whether the Com-Other pany will recere timely and adequate uing economic growth in the Piedmont Carchnas. Allowance for funds used during con. rates to cowr costs of the Catawba struction (ADC)was equivalent to 32 mds afts they begh canmacial opaa-Non-textile industrial kilowatt-hour sales percent of eamings for common stock tion. Rewnues from sales to textile cus-rose 8 percent in 1984, while textie in- in 1984, a decrease from 67 percent for tomers could be materially affected if dustrial sales increased only slightly be- the penod 1980 through 1983. The re. the ecmanic pmblems caused by fa-cause of the recent slowdown in the duction of construction work in progress eign imports continue to plague the in-textie industry. While sales to textile resulting from the complabon of two nu. dustry Factors that mld haw a posi-customers amounted to approximately clear units, the sale of an additional por. tiw eHect on eamngs, hiddy and 19 percent of total Company sales, tion of the Catawba Nuclear Station and capital resources include continuing in-fourth quarter textile sales declined 7 the cancellation of tvm nuclear projects creases in non-utikty earnings, a steady percent from the same penod in 1983. caused a dechnein ADC from 1981 to growth in non-textile kilowatt-hour sales 1984. (See Notes 3 and 5, " Notes to Fi. and maintaining high levels of nuclear nancial Statements.") increases in con. gesatim. Operating expense structio in pmgess and & Non-fuel operation and maintenance ex. embedded costs of funds caused ADC pense rose at an annual rate of 17 per- to rise dunng 1980 and 1981. 24
f i Duke Power company Audetors' Opinion Duke Fbmy Company-We haw examined the balance sheets cial posebon of the Company at December ( and the statements of mit*ahno of 31,1984 and 1983, and the results of its Duke FbMr Company as of December operabons and the source of its funds for l 31,1964 and 1983, and the related state- plant constnacton costs for each of the ments of income, retained eamings and three years in the penod ended December l' < source of funds for plant construebon 31,1984, in conformity with generalty ac-costs for each of the three years in the cepted accounting pnncioies appled on a penod ended December 31,1984. Our ex- consstent basis. eis iats 6 were made in accordance with generally accepted auditing standards an , accordingly, included such tests of the accounting records and such other au- g i chting procedures as we cuhd nec-essaryin the crcunth Deloitte Haskins & Sells
, CertifiedPubic Accountants h our opruon, the frnncial statements re- Charlotte, North Carolina ferred to abow present fairty the finan- February 15,1985 Responsitdlity for The financial statements of Duke Power perform ther assigned funcbons. The Financial Statements Company are prepared by management, Company's accounting controls are con-which is responsble for their integnty and tinually reveved for effectNeness. In addi-objectivity. The statements are prepared in tion, wntten polcies, standards and proce-contorrruty with generaHy accepted ac- dures, and a strong internal audit program counting pnnciples appropnate in the cr- augment the Company's accounting cumstances to reflect in al material re- controls spects the substance of events and transactions which should be included
. The other informabon in the annual report The Board of Drectors pursues its over-
' is consistent with the financial statement & sight role for the francial statements in prepanng these statements, manage- through the audit commrttee, which is ment makes informed Judgments and esti- composed entrely of directors who are mat 9s of the expected effects of ewnts not employees of the Company The audit and transachons that are currently being committee meets with management and reported. internal audrtors penodcaly to revew the work of each group and to morutor each The Company's system of intemal ac- group's ckscharge ofits respunues counting controlis designed to prcmde The audit committee also meets penodi reasonable assurance that assets are cally with the Con pany's independent au-safeguarded and iis oaciiu 6 are exe-drtors, Delostte Haskins & Seus. The inde-cuted according to management's author pendent auditors have free access to the tzabon. Intemal accounting controls also audit committee and the Board of Drec-prtMde reasonable assurance that trans- tors to discuss internal accounting control, actions are recorded property, so that fi- audibng and financial reporting matters nancial statements can be prepared ac- without the presence of management.
cording to generally accepted accounting principles in addition, the Company's ac-t counting controls prtude reasonable as-gnM surance that errors or inegulanbes which could be matenal to the financial state-ments are preented or are detected by Norman P. Mc.tw employees within a timely penod as they Contper 25
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Ctatements ofIncome i Dolars r1 thousands I f 3 Year ended December 31, Duke Power Company 1984 1983 1982 Electric revenues (Notes 1 and 2) $2,710,015 $2,420,252 $2,244,480 Electric expenses Operaton Fuel used in electnc generaton (Note 1) 683,563 739,829 781,406 Net interchange and purchased power (credit) (36,408) (19,819) (10,685) Wages, benefits and materials 393,448 350,162 329,954 Maintenance of plant facilities 207,951 187,267 177,766 Depreciaton and amortizaton (Notes 1 and 5) 303,429 209,750 186,080 Generaltaxes 194,095 173,826 158,289 income taxes (Notes 1 and 6) 415,836 330,023 231,902 Totalelectnc expenses 2,161,914 1,971,038 1,854,712 Electric operating income 548,101 449,214 389,768 Otherincome(Notes 1 and 6) Allowance for equity funds used dunng constructon 98,711 144,048 146,214 Eamings of subsidiaries, net 17,221 10,415 7,039 Provision for loss on disposal of assets - - (30,000) Other, net 33,834 5,391 12,548 Income taxes - other, net (29,180) (3,037) (11,687) income taxes - credit 42,209 56,184 50,934 Totalotherincome 162,795 213,001 175,048 income before interest deductons 710,896 662,215 564,816 Interest deductions Interest on long-term debt 276,520 272,349 254,643 Other inttrest 3,075 6,766 12,802 Allowence 'or borrowed funds used dunng construcion(credrt)(Note 1) (30,030) (48,177) (52,506) Totalinterest deductons 249,565 230.938 214,939 income before extraordinary item 461,331 431,277 349,877 Extraordinary item (Note 4) - - 48,304 Notincome 461,331 431,277 398,181 Dividends on preferred and preference stocks 61,786 62,600 62,164 Earnings for common stock $ 399,545 $ 368,677 $ 336,017 Common stock data Awrage shares outstanding (thousands) 100,346 97,784 93.679 Eamings before extraordinaryitem $3.98 $3.77 $3.07 Extraordnary item - - 0.52 l Eardigs per share $3.98 $3.77 $3.59 Dihnds per share $2.42 $2.32 $2.24 See Notes to FunancialStatements. n i
.~,-..,,n.,- n.~ ,: _ _ ._ ... . . . . ~ . . . . . . . . . .. .
h of Sowce of M for Plmet Coristructions Costs Dohrsin thouswids 6 7_ - Duke Power Company Year andM December 31, 1984 1983 1982 Funds from opera 6cos
, income before noafund extraordinary item , ,
$ 461,331 $431,277 $349,877 Non-fund items _'_
Deprevauon and amciuauc.e (Notes 1 and 5) 469,711 324,608 268,651 Deferred income taxes and inwstment tax credit, netof amorteten(Note 6) 103,800 333,045 159,515 Equity component of the allowance for funds used during construction (96,711) (144,048) (146,214) Other, net (13,137) (6,073) 25,171 Furlas from operations 922,994 938,809 657,000 - DMdends paid (304,577) (289,564) (272,115) Funds retarned in the business 616,417 649,245 384,885 Funds from financings and sale of assets - not proceeds Sale of an interest in the Catawba Nuclear Station (Note 3) 457,066 - - Common stock (Note 4) . 37,194 84,326 199,134 Pollution-control series 60,720 45,648 - Nuclear fueltrusts 64,461 60,645 33,052 g Term notes - - 79,721 ] First mortgage bonds - - 221,521 Preferred stock 38,296
~
Decreasein notes payable - (57,210) (114.140) Funds from financings and sale of assets 639,461 133,409 457,584 . Total available funds 1,257,676 782,654 842,469 e Increase in working capital (Note 13) (303,952) (170,979) (20,816) Long-term debt retired / preferred stocks reacquired (Note 4) (136,652) (81,097) (194,555) .. Other, not (Notes 1 and 13) (269,231) 5,100 (37,252) Plant construction expenditues 546,043 535,678 589,846 Equity component of the allowance for funds used during Anstruction 96,711 144,048 146,214 Plant construction costs $ 644,754 $679,726 $736,060 Summary of plant construction costs ~' Production
' '$ . 253,025 ~$376,134 $405,329 Transmisson _
.42,766 32,022 40,599
. Distnbution [ ~ ~ 150,075
~
127,989 113,881 General
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e 56,566 -38,966 23,895
' Subtotal .
i ' ~ }J-, ' E ; 807,433 575,111 583,704 Wfuel - ' W " - : s a W
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Balance Shoots I Dotarsin thousands ] 4 r 2r Duke Pwer Company December 31. 1984 1983 . Assets ; Electric plant (at ongw1al cost - Notes 1,3,12 and 14) 3. Electric plantin serwce $7,810,094 $6,270,799 7 Less accurnulated deprecebon and aTu hmui 2,646,266 2,405.150 Electnc plant in serwce, net 5,163,828 3,865,649 4 Constructon workin progress 988,790 2,296.843 Totalelectnc plant, net 6,152,618 6.162,492 " Other prM and investments M Other property - at cost (less accurnulated depreciaton: 1984 - $7,423; 1983 - $8,022) 38,774 34,773 L Inwstments in and advances to subsdiaries (Note 1) 77,785 61,808 1-Other investments - at cost or less 22,596 29,317 Totalother property andinwstments 139,155 125,898 Current assets Cash (Note 7) 5,754 596 Short-term inwstments 815,628 125,590 Recervables (less allowance for losses: 1984 - $4,030; 1983 - $3,982) 262,669 232,577 2 Refundableincome taxes (Note 6) - 41,209 'i Materials and supplies - at average cost Coal 114,787 138,217 Other 107,831 105,735 Prepayments 8,073 10,316 Totalcurrent assets 1,314,742 654,240 e. ( Deferred detWts ? Debt expense, being amortized omr terms of related debt 4,068 4,045 ,,, Canceled construction projects (Note 5) 395,519 414,633 Other 12,716 18,137 1 Totaldefened debits 412,303 436,815 E Totalassets $8,018,818 $7,379.445 k t 4 December 31. 1984 1983 eT =mation h and Llateties [ Capitalization (See Statements of 09Ar -i) $6,214,754 $6,079,430 CurrentliebElties : Accounts payable 153,109 116,297 / Nuclear fuel deposal costs payable (Note 1) 122,003 - Taxes accrued 214,064 56,063 : Interest accrued 88,114 89,973 Other 67,668 26.075 Total 644,958 288,408 l
, Cunent matunbes of long-term debt and preferred stocks 119,819 55,993 i Totalcunentliabilibes 764,777 344,401 g.
l
; Accumulated deferred income taxes (Notes 1 and 6) 883,023 605,399 j i
Deferred cresSts and other Netselos 3 investment tax cnxit(Notes 1 and 6) 329,376 313,139 3 1 j Other 26,888 37,076 g i Total deferred credits and other liebthes 356,264 350,215 Y e
! Commitments and contingencies (Notes 5 and 14) - -
s e
; TotalcapiteNaation and Estelles $8,018,818 $7.379,445 y g,, m m s,_ , a ,; - a
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Statomonts of Capitalization and Retained Eamings . Dolarsin thousands j
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, = @ om w cornoany December 31. 1e84 1983 Capitsemation - Common stock equity (Note 9) Common stock, no par, 150,000,000 shares authonzed; 101,152,724 shares cubids g j for 1984 and 99,633,699 shares ou6is6 g for 1983 $1,859,639 $1,820,828 _ Retaned earnrigs 952,360 795,512
]
Totalcommon stock equity 2,811,999 2.616.340 _ Preferred and preference stocks without sinking fund requirements (Note 10) 420,534 422,148 { w Preferred stocks with sinking fund requirements (Note 11) 285,426 295,053 i Long-term debt (Note 12) First and refunding mortgage bonds 2,530,506 2,511,370 l Promissory note due subsidiary,16%% - due 1989 58,725 58,725 = Term note, floating rate - due 1987 21,000 21,000 3 Term note, floating rate - due 1985 - 2,000 4,000 Capitalizedleases 90,877 93,937 ; Nuclear fueltrusts 125,000 125,000 ; (17,894) (18,550) 4 Unamortized debt discount and premium, net Current matunties of long-term debt (113,419) (49,593) _= Totallong-term debt 2,696,795 2,745,889 - i Totalcapitalization $6,214,754 $6,079.430 i veer ended oeceneer 31, tes4 1983 1982 Retained Eamings j Bolence - Beginning of year $ 795,512 $ 653,981 $ 529,842 - e Add - Net income 461,331 431,277 398,181 - Total 1,256,843 1,085,258 928.023 $ 3 Deduct j i ' i Dmdends f Common stock .* 242,791 226,964 210,206 4 Preferred and preference stocks 61,786 62,600 62,164 : Capital stock transactions, net (94) 182 1,672 g Total %*vis 304,483 289,746 274,042 Bolence - End of year 8 952,360 $ 795,512 $ 653,981 j il See Notes to Financef Statements
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Notes to Financial Statesnents
- _ .q 3 ,
ode Poweicraveny Noes 1 Summary of significant accomeing n poGdos
~ A. AdcAdons to electric plant C.Depreciadon and amortization The assets of Eastoer Mining Company
.The Company captalizes al construcbon- Prtmsaons for devocaui are recorded and the related land leased from Eastoer reisied cimt labor and materials, as wel using the straight-ine method. The year- Land Company were sold in 1983. A provi-as indsect construchon costs indrect end wm ite os weighted-awrage depreci- sion for loss of $30 million (net of income costs indu_d_e general engineenng, taxes alion rates were 3.56 percent for 1984 and tax benefits of $28 million) was recorded and the cost of money (alcmence for 3.47 percent for 1983 and 1962. Al coal- in 1982.
funds used dtJnng construchon). The cost fired generahng units are deprecated at of reneweis and betterments of units of the rate of 3.57 percent. Nuclear units are E. Income taxes property is captalized. The cost of repars deprecated at a 4 percent rate, which in- The Company andits subsdanes file a and repiin,arents mpusa h g less than a ciudes an allowence for decemu nsic6ing consolidated federal income tax retum. In-unit of property is charged to electnc ex- co;ts come taxes are allocated to each com-penses The onginal cost of property re- pany based on its taxable income or loss. tred, together with removal costs less sal- Prcusions for amortizabon of nuclear fuel vage value, is charged to accumulated include amounts for desposal costs Such income taxes are allocated to electric deprecahon. prcmssons, which are included in " Fuel operating expense and to non-electnc op-used in electnc geraaliu6," are recorded erabons under 'Other income" The "in-
- 5. A5owance for funds used during using the unit-of-production method. come taxes-credit" classifed under construction (ADC) "Other income' results from tax deduc-ADC represents the debt and equity costs Under provisions of the Nuclear Waste Pol- tions of interest costs relahng to invest-of captal funds necessary to finance the icy Act of 1982, the Company began mak- ments in non-utility propertes, mainly construcbon of new facilites. ADC, a non- ing quarteriy payments to the Department CWIP not included in rate base and can-cash, non-operating item, is recognized as of Energy (DOE)in 1983. These payments celed construction projects.
a cost of "Construchon verk in progress" are based on nuclear fuel consumption with offsetting credits to "Other income" after April 7,1983. Deferred income taxes are provided for and " interest deduchons." After construc- trning dfferences between book and tax tion is completed, a utihty is permitted to The Companyis obligated to pay DOE a income, pnncipally resulting from acceler-
~
recoer these captal costs, including a fair one-time fee of $122,003,000 relating to ated tax depreciabon, captalized taxes, retum, through their inclusion in rate base deposal costs for nuclear fuel consumed employee benefits and loss on canceled andin the prcmsson for deprecebon before April 7,1983. The Company in- construction pojects. Inwstment tax tends to make a single payment for this credit is deferred and amorbzed oer the ADCis not captalized on construebon fee before June 30,1985. Although this usefullies of the related propertes. The work in progress (CWP) included in rate amount has been reclassified to current li- Company had no unusedinvestment tax base. Asof December 31,1984,noCWP abilibes from accumulated deprevatui credt as of December 31,1984.
.wes included in the Company's rate base. and amorbzabon, the increase in electnc CWP of appresamately $280 rnilion ves plant has been included in "Other, net
- on F. Fuelcost adjustment procedures included in North Carolina rate base as of the Statements of Source of Funds for Fuel costs are revewed semiannually in Dowitai 31,1983 and 1982. Plant Construebon Costs the wholesale and South Carolina retaiyu-nsdctions, with prcmssons for changing ADC, which is compounded semiannualy, 'D. hhah8=les such costs in base rates, These junsdic-was calculated on average embedded The Company uses the equity method to tions allow the Company to reflect in ree-rates (net of @*la income taxes) of account for inestments in its subsdanes, nues the difference between actual fuel 9.65 percent for 1984,9.45 percent for al of which are wholy owned. (See "Sub- costs incurred and fuel costs reccNered 1983 and 9.38 percent for 1982. adienes' peGe 43.) Rotened earnings as of ttrough base rates December 31,1984,' include $70,894,000 of undistributed eerrungs of subedenes in the North Carolina retal junsdicbon, an Dividends recermd from subsdanes were annual fuel heanng to revew fuel costs in
$2,300,000 in 1964, $2.250,000 in 1983 base rates is requred. In addition, fuel r and $1,000,000 in 1982. costs must be revewed dunng general rate case proceedngs.
30 s ,Y '
-*=w4D- 4 W4 Jh.h - " .up .h Wh'd * ^.a. -
Note 2 ' Rate matters The North Carchna Utihbes Cumis =Wi A summary of al general rate increases re-and The Public Senace Commsson of quested or implemented by the Company South Carolina must apprme rates for retail since January 1,1982,is as follows sales within the respectiw states The Fed-
- ^PP'"d eralEnergy Regulatory Commission (FERC)must approw the Company's hadchan and d'" ""d Requeged
**""'S A " *$
% of
'""'S'
$# 'enues
~
r pnmous End or narwoer ciame i2=neuesmmo rates for sales to wholesaie customers. The revenues shcwn (in mdlions of dolars) N.C retail are annuakzed on the basis of the filing March 1982 $197.0 $ 61.7 31.3 4.38 Nommber 1982 December 31,1981 test year. February 1983 112.9 76.2 67.5 5.18 September 1983 September 30,1982 November 1983 212.8 131.0 61.6 8.40 June 1984 June 30,1983 S C retal December 1980 103.7 57.0 54.9 13.00 Anuary 1982 December 31,1980 February 1982 99 4 40.7 40 9 7.10 March 1983 June 30,1982 September 1983 136.0 99.7 73.3 17.40 March 1984 Apnl 30,1983 FERC wholesale
- June 1981 46.9 30.7 65.5 11.90 August 1982 September 30,1982 August 1982 44.1 26.0 59 0 8.70 June 1983 December 31,1983 December 1983 9.5 8.0 84.2 9 60 October 1984 December 31,1984
*FERC wholesale filings beginning December 1983 do not include the North Carolina Municipal 1%er Agency Number 1, the North Carolina Electric Membership Corpora-tion and the Saluda Riwr Electnc Cooperatin, Inc. that in previous years purchased in-terests in the Catawba Nuclear Station. Effectiw July 1,1983, and Nowmber 1,1983, these lates are set through contractual agreements. Sales to these municipalities and cooperatiws previously represented a majority of the Company's wholesale rewnues.
1 I Note 3 Note 4 Note 5 Saleof assets Extraordinaryinom Conceled construction projects The Company sold a 25 percent interest r' i The Company ssued 3,727,544 shares The Cherokee and Perians Nuclear Sta-Unit 2 of the Catawba Nuclear Stabon on of common stock with a market value of tions haw been canceled. AX junsdcbons December 20,1984, to the Redmont Mu- $73,489,000 on January 7,1982, in ex- haw permitted reccwry of the costs in-nopal F%er Agency, which supiesans 10 change for porbons of seeral senes of cuned through Apn130,1983. These costs , South Carchna munopairbes. The Com- outstancing first and refunding mortgage a's being amarbzed pnncipally oer a 10-pany recerved $457,086,000 at closing bonds with a face value of $119,902,000. year penod begrining October 1983. The The $1.8 milion net of tax profit from the The transachon resulted in a non-taxable Company intends to seek reccury of the sale has been deferred. gain of $48,304,000, or $0.52 per share, remaining incurred costss on the (&anent of the bonds. As of December 31,1984, 'Construeban As of Decaiter 31,1984 and 1983, the work in progress
- reluded $404,823,000, balance for these canceled protects, ex-represenhng the Company's inwstment in ciuding land and net of amortzabon, was its remanng interest in Catawba. $611,971,000 and $632,127,000, respec- l trwiy ($395,519,000 and $414,633,000 net of income tax benefits, respectrely). (See Note 6.)
l l 31 L - .~m .~ _ . , _ _ _ _-- --- -
~~~ ~ , _ _ _ - - , . . , ~ . , - ~ ~ _ ~ _
Income tax expense income tax expense consnsted of the fol- (a) Cunent income tax expense for 1983 lomng(dolarsin thousands): is a credit principally due to the loss on 1984 1983 1982 the cancellation of allunits of the Cheto-Electnc expenses lee Nuclear Station and the deduction of Cunent r1come taxes the Company's liability to date under the Federal $271,960 $ 701 $ 58,118 Duke / Department of Energy Spent Nu-State ~ 47,876 (966) 21,694 clear Fuel Disposal Contract. The benefit 319,836 (265)(a) 79.812 of this tax loss for 1983 has been recog-Defened taxes, net nized as " Refundable income taxes" on Excess tax oer book dt:pw.auui 67,107 79,890 46,985 the Balance Sheets. 7his loss also elimi-Capdalized taxes, employee benefds, etc. 10,337 8,999 9.287 nated allinestment tax credit utilization Loss on w w.auui of for 7983. Cherokee Nuclear Staban(b) (2,234) 210,329 - Nuclear fueldisposal costs (c) (6,184) 51,260 (12.893) (b) Represents defened income tax ex-Other 8.143 (6.318) 6.456 pense related to the loss on the cancella-77,169 344,160 49.835 tion of allunits of the Cherokee Nuclear Investment tax creda Station. The related deferred income tax Defened 37,381 -(a) 109.596 credits has been classified as a reduc-Amorhzabon of deferments (aedit) (18,550) (13,872) (7,341) tion of " Canceled construction projects" 18.831 (13.872) 102.255 on tha Balance Sheets. (See Note 5.) Total electne expenses 415,836 330,023 231,902 (c) Reflects defened income tax expense related to the non-deductible portion of Other income nuclear fuel disposal costs.1983 also in-hcome taxes - other, net 91,497 (d) 3.037 11,687 cludes teersalof defenedincome tax ex-hcome taxes -(credd) (42,209) (56,184) (50,934) pense related to poor period liabilities Total otherincome 49,288 (53,147)(a) (39,247) under the DuAe/ Department of Energy Totahncome tax expense $465.124 $276.876 $192655 Spent Nuclear Tvel Disposal Contract. (d)locludes $62,317,000 resulung from Totalcunentincome taxes vere Totaldefenedincome taxes were ,
$69,344,000 for 1984, $346,934,000 for N s le of assetsin December fm
$376,949,000 for 1984, $(56,186,000) for '
1983 and $33,128,000 for 1982. Of these 1983 and $57,272,000 for 1982. Of these ' amounts, state income taxes were amounts,defened stateincome taxes eS e ' vere $7,687,000 for 1984, $42,773,000 for teflect a taxa & gainin excess oM
$57,587,000 for 1984, $(7,981,000) for 1983 and $7,430,000 for 1982. 9 '" ""C' " #~
1983 and $15,687,000 for 1982. , [ Income taxes differ from amounts com-puted by applying the statutory tax rate to pretaxincome as folows(dolarsin thousands): 1984 1983 1982 bcome taxes on pretax income at the statutoryfedereirateof 46% $426,169 $325,751 $263,365* bcrease (reduchon) in tax restibng front Akmence for at funds used dtring cxxistucton(ADC) (50,220) (88,424) (91,411) Amortzation of electric inestment tax oudd defennis (18,550) (13,872) (7,341) ADCin book depreciabon/amortzaban 45,298 23,884 12,798 State income taxes, not of federalincome tax benefit 35,832 18,874 12,132 bcreasein tax expense pnmarty becauseof excessof taxgen o,er book profit on sale of assets 27,280 - - Other Hems, net 8,315 10,663 3.112 Total rxxrne tax expense (see atxw) $465.124 $276,8M, $192.655
*Pretax income excludes provision forloss on disposalof assets of subsidianes re-coroed net ofincome tax benefits. (See Note 1.)
32
O Note 7 Short-term bomnnngs The Company had short-term credit facili- A summary of short-term bomwngs and ties with 60 commercial banks as of De- credt arrangements is as fokws (dotars cember 31,1984. These faciisties, plus the in thousands): 1984 1983 1982 sale of commercial paper, are normaHy used to finance current cash requrements' h outW at yearend (g rate The facistiesnhere on a fee basis and/or a $ - $ - $ 57,210 of 10.38% for 1982) compensatrxybalance basis, with total av-Maxrnurn amount outstandng dunng the year $ - $111,210 $189,950 erage balance requrements of $1,372,000. Bank loans are at the lendng bank's com-Aerage amount outstandng dunng the year $ - $ 30.951 $ 74,148 mercial pnme or market rate. Certari of the facilities may requre addtional balances Weighted awrage interest rate for the year related to usage. 8.92 % 4 38 % (computed on a dady basis) - Credt faokties at yearend $319,500* $385,400 $385,400
- Includes $40,000,000 allocated to the f 984 issue of annual tender, polluton<:ontrol rev-enue bonds.
Note 8 Retirement plan The Company and two ofits subsdanes A companson of accumulated plan bene-haw a norx:ontributory, defined benefit fits and plan net assets as of December retrement plan coering substantialy aR 31,1983, the date of the latest actuanal re-their employees. The Company's policy is port, and December 31,1982, is as fol-to fund pension costs accrued. Total pen- lows (dotarsin thousands): 1983 1982 sion expense, includng trustee fees, amounted to $32,828,000 in 1984 Actuanalpresent value of
$33,137,000 in 1983 and $32,000,000 in acmed pian benefits 1982. In 1983 the plan was amended to Vested $310,185 $251,426 Non-Vested 71,011 52,554 prwide for certain changes, including in-creased benefits for retred employees Total $381,196 $303.980 and additional survivor benefits. Also, the Net assets amiab6e for benefits $421.556 $343 430 plan ves changed in 1984 to include the Earty Retrement Supplement Plan, a one-tme early retrement offer to eligible em- The weighted-awrage assumed rate of re-playees. The effect of these changes dd tum used to determine the actuanal pres-not significantly increase the Company's ent value of accumulated plan benefits pension cost. was 8.6 percent in 1983 and 9.25 percent in 1982. The actuanal present value of ac-cumulated plan benefits does not con-sider future salaryincreases.
33
-w -
Note 9 Common stock and retained semings common seack Asummaryofissuancesof sharesof in 1983 and 1984 the Company began As of December 31,1984, a total of common stockis as folows(dolarsin using open-market purchases to satisfy 4,805,091 shares was reserwd for the is-tnousands). (See Note 4.) the requrements of certan stock plans. suance to stock plans and for the conver-sr s For the next seeral years, the Company sion of preference stock. Y'" " **""' anticipates using open-market purchases ,
~
1964 $ 37,194 1,451,607 to satisfy the requrements of al its stock Retamed sammgs 1983 84,326 3,605,900 plar,s and intends to issue new shares of As of December 31,1984, none of the 1982 199,134 7,274,724 common stock only for the conwrson of Company's retaned earrmgs were re-preference stock. stncted as to the declaraton or payment of dMdends. Note 10 Preferred and preference stocks vnthout sinking fund requirements The following shares of stock were author- Preferred and preference stocks without ized with or without sinking fund require- sinking fund requirements as of December ments as of December 31,1984 and 31,1984 and 1983, were as fonows (dol-1983: lars in thousands): Shwes Ame/senes ss outst 1984 1983 Preferred stock $100 10.000.000 4.50% C 1964 350,000 $ 35.000 $ 35.000 Preferred stock A 25 10.000,000 5.72% D 1966 350,000 35,000 35,000 Preference stock 100 1,500.000 6,72% E 1968 350,000 35,000 35,000 8.70% F 1970 600.000 60.000 60.000 8.20% G 1971 600.000 60,000 60.000 The outstanding preference stock,6%% 600,000 60,000 60,000 7.80% H 1972 h& Senes AA,is em into 1977 500,000 50.000 50.000 8.28% K shares of common stock at the adpsted 8.84% M 1978 400,000 40,000 40,000 conwrsion pnce of $23.89 per share, with 15.40% A 1982 1.600,000 40.000 40.000 each share of preference stock valued at 6%%, AA
$100 par. The converson pnce is subject Corwertible 1969 55.346 5.534 -
to certain adpstments de5 Jied to protect 71.482 - 7,148 the conwrson prMiege against diluton. In Total $420.534 $422.148 1984,1983 and 1982, shares of prefer-ence stock were conwrted into shares of common stock as fonows: vem ~N W 1984 16,136 67,510 1983 18,868 78.936 1982 45,759 191,463 34
_ _o< I Note 11 Preferred stocks with einidng fund m *..._.:. The folowing shares of stock were author- Prefened stocks with srilang fund requre-ized with or without suting fund requre- ments as of Ch6er 31,1984 and rnents as of December 31,1984 and 1983, wwe as fotows(dolarsin 1983: thousands): Par Year Shares value Shares Rase / sanes asued outstanding 1984 1983 Preferred stock $100 10,000,000 7.35 % i 1973 576,000 $ 57,600 $ - Preferred stock A 25 10.000,000 600.000 - 60.000 Preference stock 100 1,500.000 8.20% J 1977 440,000 44,000 - 460,000 - 46.000 8.375% L 1978 460,000 46,000 - 480,000 - 48,000 8.84% N 1979 483,750 48,375 - 500.000 - 50.000 11 00 % O 1980 500,000 50.000 50,000 10.76% A 1975 2,100,000 52,500 - 2,160.000 - 54.000 Less: Preferred shatcs reacquited for cunent and futum: snking fund requirements (at co:,t) Srwes reaccaned 10.76% A 120,000 (2,891) (2.899) 8.84% N 32,500 (2.529) (2.419) 11.00 % O 13,750 (1,229) (1,229) Less: Cunent sinking fund requirements 7.35 % 1 (2,400) (2,400) 8.20% J (2.000) (2,000) 8.375% L (2.000) (2.000) Total $285.426 $295053 The annual sinking fund requirements The call provisions for the outstanding pre-through 1989, net of amounts reacquired, ferred and preference stocks specify van-are $6,400,000 in 1985 and 1986, ous redemption pnces not exceeding 115
$9,525,000 in 1987 and $10,900,000 in percent of par values, plus accumulated 1988 and 1989, with some additional re- drvidends to the it,6? nip ^uo6 date.
denip^u o6s permitted at the Company's option. l I 35 l
. . . - . . ~ - -
Note 12 Long-term debt Frst and refunding mortgage bonds out- , On October 2,1984, the Company trans-standing as of December 31,1984 and ferred certain U S. gowrnment secunties 1983, vere as fonows (dollars in to an irrevocable trust for the defeasance thousands); of $32,850.000 of its 14% percent frst u di g rg g b ds. The cash saes Yew & 1984 1983 senes Yew due 1984 1983 flow from this trust will be sufficient to fund erest pay-3%% 1986 $ 30,000 $ 30.000 2003 $ 98,050 $ 98.050 ments on these bonds < Accordingly, in 14%% 1%7 17,150 50,000 9%% 2004 95.623 95.623 1984 this amount was removed from the 12 % 1990 75.000 75.000 9W% 2005 92.800 92,800 100,000 8%% 2006 96.850 96,850 balance sheet. The entre senes of 14% 15%% 1991 100.000 ew% 1992 50.000 50.000 8%% 2007 119,500 119.500 percent bonds will be retred on March 1, 4%% B 1992 50.000 50.000 9%% 2008 120.610 120.610 1985. 11 % 1994 71,000 77,750 10%% 2009 145,050 145.050 4%% 1995 40,000 40.000 10h% B 2009 148.000 148.000 The annual matunties of long-term debt 5%% 1997 72,600 72.600 14h % 2010 100.000 100,000 (including sinking fund requrements and 6%% 1998 68,500 68,500 13%% B 2010 50,000 50.000 capitalized lease pnncipal payments) 1999 56 56, 14% % 2012 125,000 125.000 through 1989 are $113.419,000 in 1985,
$80,095,000 in 1986, $32,844,000 in 8W% 2000 69.244 69l244 R*mn cmm 1987, $36.091,000 in 1988 and 8%%B 2000 95.635 95.635
$70.216,000 in 1989.
7W% 2001 97,900 97,900 7%%B 2001 38.050 38.050 7%% 2014 40.000 - 7%% 2002 78.100 78,100 Less: Funds held The and maws b M We W 7%% B 2002 , 67,900 67,900 in trust (58,478) million related to the reduction of one of (39.742) 7%% 2003 94.872 94.872 the Company's two nuclear fuel trusts. An-Total $2.530.506 $2.511.370 nual matunties through 1989 include amounts relatrig to the remaining $85 mil-Substantially allelectric plant was mortgaged as of December 3f, f 984. lion in outstanding obligations under the fuel trusts. The matunties are based on es-tmated fuel consumption. Instead of mak-ing cash payments, the Company intends to transfer title of additional nuclear fuel to the trusts as fuelis consumed. Note 13 Reclassification On the Statements of Source of Funds for Plant Constructen Costs, certain pnor year information has been reclassified to conform with 1964 classifications. m.' ;@ o _ v 36
=
. _._ _a -4 1 - _ _ _ _ _ _ ~ . m .----
Note 14 Commitments and contingencies A. Joint ownership of plants are $1.71 bilhon and $560 milhon, respec- The Company is also a member of Nu-The Company, the North Carolina Munici- tively. The program is subject to penodic clear Electnc Insurance Lmited (NEIL). pal Power Agency Number 1 (NCMPA No. revew and revision, and actual construc- This organization provides insurance for 1), the North Carolina Electnc Membership tion costs incurred may vary from such es- the increased cost of generation and/or Corporation (NCEMC), the Saluda Riwr timates Cost vanances are due to vanous purchased pcmer resulting from an acci-Electnc Cooperative, Inc. and the Ped-i factors, including revised load estimates, dental outage of a nuclear unit. If NEIL's mont Municipal Power Agency (PMPA) are the ou come of hcensing and environmen- losses eer exceed its reserves, the Com-joint owners of the 2.290.000-kilowatt Ca- tal matters, and the cost and avadability of pany would be hable, on a pro rata basis, tawba Nuclear Station. Unit 1 is scheduled capval. for additional assessments of up to $20 to begin commercial operation in 1985; milhon. This amount represents five times Unit 2 in 1987. The Company owns 12.5 L. Nuclear "1surance the Company's current annual premium to percent of the plant. Each participant has The Company's pubhc habihty for claims NEIL. provided its own financing for its share of resuaig from any nuclear incident is hm-the plant. sted to $620 milhon under prcNisions of the The Company purchases $450 mdhon Pnce Anderson Act, which provides for of property damage insurance through in connection with this joint ownership, the nuclear liability insurance up to that NEIL's Excess Property Insurance Pro-Company has entered into agreements amount. Under these provisions the Com- gram. This cowrage is in addition to the with these buyers to purchase dechning pany could be assessed up to $5 million $500 mdlion of cowrage provided by the percentages of the capacity aid energy for each of its hcensed reactors for a nu- Company's undertying property damage from the plant. The agreements will be ef- clear incident invoMng any hcensed facihty polices issued through NML If losses eser fectrve beginning with the commercial in the nation. If more than one nuclear inci- exceed the accumulated funds madable operation of each unit - 15 years for dent occurred, the Company could be as- to NEIL for the Excess Property insurance NCMPA No.1 and PMPA and 10 years sessed up to $10 milhon a year for each of Program, the Company would be hable, on for NCEMC and Saluda Rrver. Its hcensed reactors. As of December 31, a pro rata basis, for additional assess-1984, the Company had six hcensed reac- ments of up to $28 million. This amount Energy cost payments wdl be based on tors, including Catawba Unit 1, which had represents 7.5 tirnes the Company's cur-the vanable operating costs, a function of a low-power hcense but is not scheduled rent annual premium for excess property the generaton of the plant. Capacity pay- to begin commercial operation untd the insurance. ments wdl be based on the fixed costs spnng of 1985. of the plant. The estirnated purchased D. Other capacity payments through 1989 are $225 The Companyis a member of Nuclear The Company is invoNed in legal and reg-milhon in 1985, $425 mdhon in 1986, $624 Mutual Lmited (NML), which provides ulatory proceedings before vanous courts mdhon in 1987, $583 mdkon in 1988 and property damage coverage for certain of and agences with respect to matters ans-
$542 mdhon in 1989. The capacity and en- the Company's nuclear faciktes. If NML's ing in the ordinary course of business, ergy costs wdl be reported in " Net inter- losses ever exceed its reser es, the Com- some of which involve substantial change and purchased power"in the pany would be liable, on a pro rata basis, amounts. Management is of the opinion Statements ofincome for additional assessments of up to $70 that the final disposition of these proceed mdhon. This amount represents 10 times ings wdl not have a matenal adserse effect B. Construction program the Company's current annual premium to on the results of operations or the financial For the years 1985 through 1987, pro- NML. position of the Company jected construction and nuclear fuel costs 37
Long-h W med M of Assets its4 1983 1982 Pnce per Not Net Net Duke Power Company share proceeds proceeds proceeds To meet its capstal requwements, the Financings Company has financed with long-term Common stock debt and equity secuntes and has raised DmdendI% investment and additional captal through other types of Stock Purchase Ran* financings plus the sale of certain assets. (1,188,333 shares) $25.70 $ 30,539 - In March 1983 the Companyintroduced (1,226,818 shares) 23.56 $ 28,903 the Customer Stock Purchase Plan, (1,019,484 shares) 21.62 $ 22,042 which enables customers to purchase Customer Stock Purchase Ran* common stock without paying brokerage (263,274 shares) 25.28 6,655 fees. Financings and sale of assets from (403,911 shares) 23.37 9,439 1982 through 1984 were as follows (dol- Stock Purchase Savings Program tarsin thousands): for Employees * (1,831,618 shares) 23.32 42,712 (1,624,436 shares) 21.79 35,390 Employees' Stock Ownership Ran* (143,633 shares) 22.78 3,272 (903,260 shares) 22.04 19,909 Bond / Stock Exchange (3,727,544 shares) 19.715 121,793 Totalcommon stock 37,194 84,326 199.134 Preferred stock, $25 par 15.40% Series A,1982 (1,600,000 shares; March 2) 38,296 Totalpreferred stock 38.296 Long-term debt First mortgage bonds Pollution-Control Series 60,720 45,648 15%% Senes due 1991 (March 2) 98,680 14%% Series due 2012(September 16) 122,841 Total first mortgage bonds 60,720 45.648 221,521 Other financings Nuclear fuel trusts 84,461 60,645 33,052 Promissory note due subsidiary
- due 1989 58,725 Term note - due 1987 20,996 Totalother financings 84,461 60,645 112.773 Totallong-term debt 145,181 106.293 334.294 Total financings 182,375 190,619 571,724 i i
Sale of assets Sale of aninterestin the Catawba Nuclear Station 457,066 Totallong-term financings and sale of assets $639,461 $190,619 $571,724 l
*Aerage pnce per share I
Open rnarket purchases ntiated The Company began open-market pur- Employees' Stock Ownership Plan 1983 chases in the following years to satisfy Stock Purchase-Savqs Program for Employees 1984 the requirements of its stock plans: Dmdend Reinvestment and Stock Purchase Ran 1985 Customer Stock Purchase Plan 1985 38 1
Selecteel Financial Date ouse Nwer Company 1984 1983 1982 1981 1980 Condensed statements of income (thousands) Electne rewnues $2,710,015 $2,420,252 $2,244,480 $1,908,454 $1,682,822 Electnc expenses 2,181,914 1,971,038 1,854,712 1,632.104 1,402.722 Electnc openeng ocome 548,101 449,214 389.768 276,350 280.100 Otherincome 162,796 213,001 175,048 254,043 208,365 . Income beforeinterest deductions 710,896 662,215 564,816 530,393 488,465 Interest deductions 249,565 230,938 214,939 194,142 177.374 income before extraordnaryitem 461,331 431,277 349,877 336,251 311,091 Extraordnaryitem - - 48,304 - - Netincome 461,331 431,277 398,181 336,251 311,091 Dividends on preferred and preference stocks 61,786 62,600 62,164 57,895 58.612 Eamings for common stock $ 399,545 $ 368,677 $ 336,017 $ 278,356 $ 252,479 Common stock data Shares of common stock - year-end (thousands) 101,153 99,634 95,949 88,483 86,294
- awrage (thousands) 100,346 97,784 93,679 87,313 81,985 Per share of common stock Eamings before extraordinaryitem $3.98 $3.77 $3.07 $3.19 $3.08 Extraordinary item - -
0.52 - - Eamings $3.98 $3.77 $3.59 $3.19 $3.08 Dividends $2.42 $2.32 $2.24 $2.08 $1.95 Book value - year-end $27.80 $26.26 $24.89 $23.83 $22.82 Market price - high-low $30% 22% $26%-21M $24-20% $22%-15% $19% 14%
- year-end $29 $25% $23% $20% $18%
Balance sheet data (thousands) Totalassets $8,018,818 $7,379,445 $7,057,780 $6,531,044 $6,328,174 Long-term debt $2,696,795 $2,745,889 $2,712.372 $2,545,694 $2,594,008 Preferred stocks with sinking fund requirements $ 285,426 $ 295,053 $ 304,026 $ 308,674 $ 316.559 Electric and other statistics Kilowett-hour sales (milhons) Residential 14,493 14,219 13,711 13,861 13,765 General service 10,922 10,339 10,087 9,731 9,395 Industnal 21,821 20,907 19,345 20,667 20.060 Other energy and wholesale
- 7,163 8.686 8,237 9.289 9,091 Total kilowatt-hour sales 54,399 54,151 51,380 53,548 52,311 Number of customers - year-end Residential 1,199,718 1,167,846 1,139,248 1,125,371 1,105.035 Other 196,992 189,329 183,061 181,331 179,370 Totalcustomers 1,395,710 1,357,175 1,322,309 1,306,702 1,284,405 Residentiel customer data Aerage annual KWH use 12,210 12,278 12,065 12.392 12,560 herage rewnue bised per KWH 8.11e 5.67c 5.41t 4.514 4.11e Number of employees - year-end Operatog and mentenance 13,486 13,278 12.539 12,134 11,463 Engneenng and construction 6,800 7,687 7,735 7,943 8,149 Source of energy (mdhons of KWH)
Generated- Coal 28,304 32,466 38,927 42,513 40,964
- Nuclear 32,832 " 25,059 " 15,009 14,229 14,213
- Hydro 1,906 2,114 1,569 843 1,820
- Od and ges - 8 7 146 203 Not interchange and purchased pcmer* (2,908) (1,003) (301) 494 (472)
System awrage heet rate 9,883 9,762 9,666 9,633 9.675 Systemload factor 62.2 % 58.6 % 56.8 % 61.9 % 61.6 %
%hects the eNect of the McGune Rehatukty Enchege amoemd by certen muncopaktsee and cooperatnes that purchneed anteests on the Catewbe Nuc6 ear Starnon.
(See Note 2, "Nofee to Fnnecnal Stapements") 39 "incaudes hcGune unit 2 genounon onor to commercnar opeenon
,_a_ .m . _ _a _ m m ,. - _ _. _ . . A3 w,m,%, _ _ . , ._
Ebctnc Electre operatrg Net Eamags DtAe Ptwer Company revenues rcome rcome pe share Quarterly financialdata 1984 by quarter A summary of quarterfy financial data for Fourth $680,177 $129,979 $ 97,862 $0.81 1984 and 1983 is as follows (dollars in Third 729,047 156,746 139,001 1.23 thousands, except per-share data): Second 629,483 132,990 101,276 0.86 First 671,308 128,386 123,192 1.08 1983 by quarter Fourth $593,064 $ 91,310 $ 89,717 $0.74 Third 667.947 136,525 129.867 1.17 Second 553,388 103,450 96,922 0.83 First 605,853 117,929 114,771 1.03 Generally, quarterly eamings fluctuate with seasonal weather conditions, timing of rate increases, fuel cost adjustment procedures and maintenance of electric generating units, especially nuclear units. m Stock prce range m Stock pree range per share Hoh Low per share Hgh Low Stock marketinformation 1984 by quarter 1983 by quarter The Company had approximately Fourth $0.62 $30% $27% Fourth $0.59 $26% $24 120,395 holders of record of common Third 0.62 27 % 24 % Third 0.59 24 % 21 % stock as of December 31,1984, and Second 0.59 25 22 % Second 0.57 24 22 % 124,609 holders as of December 31, First 0.59 26 % 22 % First 0.57 24 22 1983. Dunng 1984, approximately 39,432,900 shares of common stock were traded, compared with 58,664,500 during the prevous year. The Company's common stock pnces, as quoted by the New York Stock Exchange, and drvidends paid are as follows:
Selected Financial Data i h Duke Power Company ) Effects of changing prices in recent years, the impact of general infla- Financial Accounting Standards Board re-ton and changesin specific pnces has quires certain disclosures of the effects of caused distortons in traditional accounting inflation on a company's operations and fi-measurements of income and capital. Al- nancelpositon though the rates of inflation in recent years have substantiaDy decreased, the replace- Because the accompanying supplemen-ment of existing plant capacity occurs at a tary informaton involves vanous assump-significantly higher cost than recoered tons and approximations, it should be through Nstoncal cost depreciation be- vewed as an estimate of the effects of in-cause of the high lewis of inflaton in previ- flation, rather than a precise measurement. ous years. In response to this problem, the Constant dollar accountmg Constant dollar accounting reflects the terms of dollars of equal purchasing omrall dechne in the purchasing power of power the dollar by restatog histoncal costs in Current cost accountmg Current cost accounting reflects changes costs by intemally generated indces or the in specific pnces of the property used in Handy Whitman index of Public Utihty the Company's operatons from the date Construction Costs Since plant facihtes the property was acquired to the present. are not expected to be replaced precisely TNs method differs from constant dollar in kind, " current cost
- does not necessar-accounting to the extent that costs of spe- ily represent the replacement cost of exist-cific utihty property haw increased mere or ing productive capacity Current cost de-less rapdy than the rate of generalir.fla- preciaton is computed by applying the tion. The current cost amounts of plant in same rates used in the histoncalcost service represent the estimated cost for re- statements to the current cost plant placing existing plant facilites and were amounts.
determined by indexog surviving plant Effects of rate regulation Under the Company's present ratemakog The Company has signifcant amounts of procedures, ordy the Nstorical cost of long-term debt outstanding whch serves plant in service is recowrable in rates as as a partial hedge against inflaton, as well deprecation. Therefore, in times of rela- as other net monetary liabdites, which wiD tlwly high inflaton, the eroson of plant in be paid back in dollars of less purchasing service resultog from inflation in the cur- power. In the accompanying schedules, rent year may be greater than is reflected the gain from dechne in purchasing power n current cost adystments andis re- of net amounts owed results from infla-flected as a reducton to net recowrable ton's effect on obligatons to pay cash at cost. TNs reducton was not necessary n a future date. 1984 and 1983 because the level of infla-ton wasless thanin prevous years.
+
Omer income statement items other than depre- made to them. No adystments toincome ceton haw not been adpsted. The Com- tax expense haw been made e comput pany's operation and mantenance ex- ing the impact of inflaton soce only histor-penses alreadyinclude the awrage ical costs are deductible for income tax effects of changing prices dunng the per- purposes, iod. Therefore, no adystments haw been 41
, _ _ . . a e '_ _ , .
supplementary statement of Eamings for common stock Agusted for chanoine Prices Dosarsin thousands Mstancal Current Dide Fbwer Company Year ended December 31.1984 dotar cost Electnc revenues $2,710.015 $2,710,015 Operating expenses 1,040,603 1,040,603
. Maintenance of plant fachbes 207,951 207,951 Depmoabon 303,429 566,691 Taxes 609,931 609,931 Totalelectric expenses 2,161,914 2,425,176 Electric operahng income 548,101 284,839 Otherincome 162,795 162,795 Income before interest deductons 710,896 447,634 Interest deductions 249,565 249,565 Netincome 461,331 198,069 Drvidends on preferred and preference stocks 61,786 61,786 Earrungs for common stock $ 399.545 $ 136.283 increase in specife pnces (current cost) of uthty plant held chnng the year * $ 117,903 Reducton to net recomrable cost" -
Effect of increase in general pnce lemi (376,032) Excess of increase in general price level oerincrease in specirc pnces (258,129) Gain from dechne in purchasing poer of net amounts owed 137,912 Net $ (120,217)
*N December 31,1984, current cost of eketnc plant, net of acrumulated depreciaten, ses $9,673,781,000. "Due to the decrease its the rates of instaron on recent yeart there is no reducten to the net recoerable cost of plant effected for 1984.
Five-Year Comparison of selected supplementary Financial Data A4usted for the Effects of Changing Prices in thousands of awrage 1984 dolars, except per share figures Duke Power Company 1984 1983 1982 1981 1380 Current costinformaton: Income before extraordinaryitem $190,069 $207,023 $135,244 $165,293 $190.979 Earrungs per sham before extraordinary item 1.36 1.45 0.72 1,13 1.43 Net assets at year-end 2,772,783 2,681,856 2,541,351 2,330,692 2,370,741 Decrease in the current cost of electnc plant in servce, net of inflation, after reducton to net recowrable cost 258,129 279,226 107,053 301,990 564,248 Constant donarinformaton: ' Electnc rewnues 2,710,015 2,523,259 2,415,281 2,179,589 2,121,256 Common stock drvidends per share 2.42 2.42 2.41 2.38 2.46 Market pnce per common share at year-end 28,60 25.75 24.74 22.79 21.82 Generalinformation: Purchasing pbwer gain on net monetary items 137,912 140,026 157,269 373,361 519,675 Average consumer pnce index 311.1 298 4 289.1 272.4 246 8 42
,~-.a.-~.--..~.a . f Stheiderles Duke Power company
- SaW impostnents 1984 1983 so M Pro erty and swestments - at cost Real estate, recreatonal and land dewlopment $39,323 $39,115 Net current assets, pnncpary irwestments, recervables and inwntories 42,485 27,600 Totalassets 81,808 66,715 Deferredincome taxes (4,023) (4,907)
Total hatAtes (4,023) (4,907) Irwestments in and advances to subsidiares $77,785 $61.808 Crescent Land & Timber Corp. b 1984 Crescent Land & Trnber opened norwthty property h additon to rwesti-its second major bustless park - the gatrig the potental for expanded indus-Richard C. Ranson 150-acre Greenway hdustnal Park located tnal, commercial and residential deecp-Pesdent just south of Charlotte. It also began ment, Crescent continued to carry out constructon of a 100,000-square-foot exploraton programs for minerals and build-to-suit fachty at the ate. Other natural resources that may exist on ds land. Crescent estabbshed its frst park, Lake-mont Business Park, in 1983. The 45-acre h 1984 Crescent harwsted 44.5 rreon dewlopment for hght industry, offee and board feet of trnber and 82.600 cords certarilmted retad uses, is located south of pulpwood and planted 3.3 rreon of Charlottein South Carchna seedhngs Crescent was formedin 1969 to own and manage approximately 270,000 acres of Duke Power Overseas Finance N.V. Duke Ptuer Owrseas Finance N.V. was Also in 1982, Duke Ptmer borrowed from formed in 1982 in Curacaq Netheriands the subsdary the net proceeds of the sale Antdies, to prcmde financial resources from in the Eurodollar market of $60 mdhon pnn-outsde the Unded States opalamount of notes The notes wt ma-ture Apri15,1989. Duke Ptwer made a capdal contnbubon to the stbsdary that year, which is invested in short-term secunbes. RM-Power Supply Company MsPbwer Supply Company conhnuedits tries then corwerting to electncity and to plan of growth in 1984 by es^und=y the act as Duke Ptwer's purchastig agent. W. T. Robertson, Jr. Applied Technologes Department. This The subsdary has 284 employees Pumsant new group in the Sales DMson represents MilPtwer's entry into the high-technology From its headquarters and verehouse in market. Charlotte, N.C, its detnbubon centers r1 C._ n;oic, N.C. Greenvee, SC, and b addibon to energy mana0ement equp- Lancaster, SC, and sales offces in Hck-ment which the subedary has marketed cry, N.C, and Kinston, N.C, MSPtmer's for seeral years, the new department has Seies OMmon conhnues to perform as added programmable contro8ers and one of the largest electncal wholesale ds-computer equpment and systems toits trbutorsin the Southeast. product knes Professsonal staff has been added alsat As Duke Pwer's purchastig agent, Mdi-Ptmer's Purchasing DMson purchased MEPtwer ves foundedin 1910 to supply approsumately $1 beion worth of equip-equpment to textile rnes and other indus- ment, fuel, servces and supphes in 1984. 43
..a.. _ u m,. w-- .~ -.- . . _
Board of Directors Officers William S. Lee George R. Herbert William S. Lane James R.Bavis C. Joe Sherrill Channan eut Pesakvg Reseach inamne Chennan of tre Bond auf Va Pesent Human Assistant Vce Pesent Chet Esecurne Ortcer'3
- Inst,tute= Cher Esecutne Orrcer Resources TransassertSubstaen owson NaomiG. Albanese John D. Hicks Douglas W. Booth Thomas C. Berry .
Dean Ementus Scrxxvor Seno Pesent and Vce Present Southem LOWis F. Camp, Jr. Home Economes Anars,Vce Pesdent Mc Ch,e!Operdung Oncer Desen Secretary and Assocte Unners,ty of h Cael,na Generd Counsel e G,een James V. Johnson Wl'liam H. Grigg Shem K. Blackley, Jr. vee Chanrei and oscror Execune Vce Pescent Va Pesdent Transmrsson Norman P. Morrow Douglas W.1 Booth or w eAnars r, nance and Adm,n,straron Cantow Pesent and CoceCda Botthng Ca. Ralph W. Bostian Crwr operat,ng Ortcer'
- Consdoated2 Warmn H. Owen vce aeseent Poducten Richard J. Osbome Esecutne Vce Pescent Support Department Teasuer Thomas H. Davis W. W. Johnson Eng,neenna. Constructen Cnannan or the Enscutne Chennan and and Poducron Goup J. Kenneth Clark Eugene C. Sites Conwnttree Chet Esecutne Ort.cer Vce Pesdent Corporate Assastant Contcher Pedmont Awatson,Inc2 BarWersJrust or South Austin C.Thies Commun,catons Caonne' Executne Vce Pescent Hansel D. Whitley Robert C. Edwards Tresm,ssen. astneuten William A.Coley Assistant Contoteer Chennan or tre aoud Buck Mickel and esecure operatons va p ,,o,ntop,,, ton lento Hat Corpormon3 Charman of the Board Goup Sue A.Becht Danet tnt enat Robert L Dick Assistant reasuer John L Fraley Corporat Henry L Cranford ya P,soent const,ucron vce Crarman and Sena vce Pescent W. Bruce Shannon CrerEn cutneOtteer Reece A.Overcash,Jr. owson operatons George W. Ferguson, Jr. Ass,stant Treasuer Cactone F Carrers Charman of the Boad and Va Pesdent and Deputy Caporat - Cher Execurne Oncer Donald H. Denton, Jr. cene,d Counser Carolyn R.Duncan Assoc,ates Corpormon or Senor Vce Pesdent Assistant Secretary Alestor G. Furman, lil North Amerca warnenng and Rates Excell O. Ferrell,111
$"Yln'*eF Warren H. Owen Enecutne Vce Pesent Steve C. Gnffith, Jr. Sena Vee Prescent auf
$**so*n**"' *****' fss S;c,er Steve C. Griffith, Jr. Eng,neenre. Construgen Generar Counser Elbert N. Hedgepeth, Jr.
Sen and Poducton Gou ""#***"'U"*" gVgPess/ent and John D. Hicks James C. Self Sena Vce Pesent Mc Duncan E. Lennon William H. Grigg Channanof treEnscurne Anarrs yce p,escent ad Tax Enecurne va Pescent Comen,'y ums. inc- Counset r, nance and Geomuxx Admin,straton'
- gg John F. Lomax Paul H. Henson D""S*"
Charinariare Maceo A.Sloan Cher Enocurn.Otroer vce Cr=rma, North unrtyt ledewmmuncatons. Caesna uutuar ore Paul G. Ma,rdn y,,p,,,,,,,,,,, Inc. Insurwce Compavy* Ausen C.Thies Dwight B. Moore N "s*sa$ 'O N Vce Pescent Centrd son and EApctrc operatons C'*"A William O. Parker, Jr. vce Pescent possor t Enecutne Commrttee Pmducton Departnent Richard B. Priory 4 F'.b,ce C na Conwnottee Cornmittee Vce Present Des,gn Engoneenng Wilham R. Stimart Vce Pescent Regulatory Arrars George E. Stubb6ns va Pescent onermaron Systems Hal B. Tucker Va Pesdent Nuchur Poducten Deparment Fred E. West, Jr.
< va nescent Chaette owson James W. White vceP scentGenerat Sarwces 44
Retireal Offloors Other Ireformation The folkwng offcers Noticeof annualmeeting The 1985 meetn] of holders of Duke Power Frank A.Jenkins Company common stock mG be held Fn-senor vce essoent day, Api 26, at 10 a.m. in the O.J Miller M * Auditonum of the Electnc Center,526 South Church Street, Charlotte, N.C. vce eesoent oss,an eng.neenng M. Thomas Hedey, Jr. Wansfer agent and registrar gan Guaranty Trust Company N 30 West Broadway Joseph G. Mann New York, N.Y.10015 pescent nortnern Paul H. Mann, Jr. Stock exchange listing vcpescent operaron E. Bruce h Duke Power Company common stock rs vm eeseent nansmisson listed and traded on the New York Stock John C. Goodman, Jr. Exchange. The trading symbolis DUK. Assistant SecJetary Corporate headquarters 422 South Church Street P.O. Box 33189
, Charlotte, N.C. 28242 704/3734011 Joe S. Major, Jr., vce Presdent, F%rsonnel, ded March 5, 7984. after more than 46 SEC Form 10-K and statistical yrs of senace to DvAe Ibner supplement Her are grateM lbr his rnany contnburons and eget his Upon request, the Company will prcMde passing mthout charge a copy of its 1984 Annual Report to Shareholders on Form 10LK as fded mth the Secuntes and Exchange Cuiniussul. Also available wthout charge rs the Statistcal Supplement to the 1984 Annual Report Requests for these docu-ments should be directed to Rchard WJ-hams, Irwestor Relatons, Duke Power Com-pany, P.O. Box 33189, Charlotte. N.C.
28242. Shareholders may call Irwestor Rela-tons at 3734579 (Charlotte) or at the fol-lomng ton-free numbers: 1 5)0'532-0492 (North Carohna); 1 J300-4380142 (elsewhere in the Urvted States).
v v 3 DUKE POWER GOMPANY P.O.190x 33180 CItAHLOTTE, N.C. 28242 HAL H. TUCKER TEI.EPHONE vs a emesment (704) 373-4538 9t80 LEAS PaubCOTWMe August 9, 1985 Mr. Harold R. Denton, Director Office Of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Ms. E. G. Adensam, Chief Licensing Branch No. 4 Re: McGuire Nuclear Station Docket Nos. 50-369 and 50-370
Dear Mr. Denton:
Please find enclosed ten (10) copies of the Duke Power Company 1984 Annual l Report. This financial report is submitted pursuant to 10 CFR 50.71(b). Very truly yours, Hal B. Tucker
//h SAG /hrp Enclosures (10) cc: (w/o enclosures)
Dr. J. Nelson Grace, Regional Administrator U. S. Nuclear Regulatory Commission Region II 101 Marietta Street, NW, Suite 2900 Atlanta, Georgia 30323 Mr. W. T. Orders NRC Resident Inspector McGuire Nuclear Station b oo r to 4 _ _ _ _ _ . _ _ . . - _ _ . _ . _ _______________ _____-________ _ __._._ _ . _ _ _ _ _. _ _ ___ , s}}