ML20206E525
| ML20206E525 | |
| Person / Time | |
|---|---|
| Site: | Haddam Neck File:Connecticut Yankee Atomic Power Co icon.png |
| Issue date: | 04/07/1987 |
| From: | Guglielmo F CONNECTICUT YANKEE ATOMIC POWER CO. |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8704130647 | |
| Download: ML20206E525 (15) | |
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CON N ECTICUT YANKEE ATOMIC POWER CObDANY
" 2 R L I.
GONNECTICUT P.O. box 270 e HARTFOdC, CSNNFCTICUT 06141-0270 TELEPHONE 203465-$000 April 7, 1987 Director Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C.
20555
Dear Sir:
In accordance with paragraph 50.71(b) of 10CFR, Part 50, enclosed is one copy of the 1986 Annual Financial Report of this Company, license holder, certified by Arthur Andersen & Company, certified public accountants.
Please acknowledge receipt by returning the duplicate copy of this letter in the stamped, self-addressed envelope enclosed for your convenience.
Very truly yours, j
F. J. Guglielmo Supervisor, Statistics and Regulatory Reports Northeast Utilities Service Co.
FJG/jem/SRR121c Enclosure 8704130647 W4 W
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CONNECTICUT YANKEE ATOMIC P'0WER COMPANY
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1986 Annual Report W
Together With Auditors Report l
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i Connecticut Yankee Atomic Power Company AUDITORS' REPORT l
- To the Board of Directors of Connecticut Yankee Atomic Power Company:
1 A We have examined the balance sheets of Connecticut Yankee Atomic Power l
Company (a Connecticut corporation) as of December 31, 1986 and 1985, and the related statements of income, retained' earnings and sources of funds for gross l
property additions for each of the three years in the period ended December 31, j
1986. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the financial statements referred to above present fairly the financial position of Connecticut Yankee Atomic Power Company as of December 31, 1986 and 1985, and the results of its operations and the sources of funds for gross property additions for each of the three years in the period ended December 31, 1986, in conformity with generally accepted accounting principios applied on a consistent basis.
ARTilUR ANDERSEN & CO.
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Hartford, Connecticut March 20, 1987 l
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Connecticut Yankee Atomic Power Company STATEMENTS OF INCOME For the Years Ended December 31, 1986 1985 1984-(Thousands of Dollars)
Operating Revenues.........................
$180,193
$152,381
$154,131 Operating Expenses:
Operation -
4 Nuclear fue1..........................
22,983 46,624 30,564 0ther.................................
55,245 39,605 39,279 Maintenance..............................
37,160 7,043 22,859 Depreciation.............................
17,202 15,735 15,068 Federal and state income taxes (Note 2)..
15,835 15,506 18,401 Taxes other than income taxes............
4,562 3,763 3,236 Total operating expenses..............
152,987 128,276 129,407 Operating Income...........................
27,206 24,105 24,724 Other Income:
Allowance for other funds used during cons t ruction....................
1,696 2,803 2,459
- other, net...............................
(79) 30 210 Income taxes applicable to other income (Note 2)........................
82 (63)
(114)
Other income, net....................
1,699 2,770 2,555 Income before interest charges.......
28,905 26,875 27,279 Interest Charges:
Interest on long-term debt...............
8,192 8,735 9,726 Other interest...........................
2,748 2,071 1,699 Allowance for borrowed funds used during construction....................
(3,032)
(3,722)
(2,762)
Interest charges, net................
7,908 7,084 8,663 Net Income.................................
$ 20,997
$ 19,791
$ 18,616 STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1986 1985 1984 (Thousands of Dollars)
Balance at beginning of period.............
$ 50,916
$ 50,725
$50,659 Net income...............................
20,997 19,791 18,616 Dividends declared on common stock.......
(21,350)
(19,600)
(18,550)
Balance at end of period...................
$ 50,563(a) $ 50,916
$50,725 (a) At December 31, 1986 there was approximately $42,806,000 of retained earnings available for payment of cash dividends on common stock under the provisions of the Company's First Mortgage Indenture.
The accompanying notes are an integral part of these financial statements.
'Csnnicticut Ycnkoa Atoric Pow 2r Cecpany STATEMENTS OF SOURCES OF FUNDS FOR GROSS PROPERTY ADDITIONS For the Years Ended December 31, 1986 1985 1984 usan a f ars)
Funds Generated From Operations:
Net income...............................
$20,997
$19,791
$18,616 Principal noncash items:
Depreciation..........................
11,589' 10,122
'11,326 Nuclear fuel. amortization and prior period spent fuel disposal i
costs................................
20,863 41,752 27,018 Deferred income taxes, net............
3,249 5,52.
11,230 1
Amortization of deferred charges and other noncash items..................
588 (213) 659 Allowcnce for other funds used during construction.........................
(1,696)-
(2,803)
(2,459)
Total funds from operations....
55,590 74,176 66,390 Less: Cash dividends on common stock..
21,350 19,600 18,550 Net funds generated from operations....................
34,240 54,576 47,840 Funds Obtained From (Used In) Financing Activity:
Increase (decrease) in short-term debt...
56,000 (13,000)
Increase (decrease) in nuclear fuel payable.................................
(14,745) 2,510 2,881 Tota1...........................
41,255 2,510 (10,119)
Less: Reacquisitions and retirements of long-term debt.....
11,873 7,398 9,126 Net financing activity..........
29,382 (4,888)
(19,245)
Other Sources (Uses) of Funds:
Changes in components of working capital:
Cash and special deposits.............
(3)
(1) 40 Accounts receivable...................
7,361 (4,809) 2,781 3,154 2,155 Refundable income taxes...............
Materials and supplies................
(5,403)
(788).
'(3,123).
Accounts payable......................
(5,574)
~(4,666) 13,395 Accrued taxes.........................
993 8,336 2,724' Other, net............................
(337)
(325)
(838)-
Net change......................
(2,963) 901 17,134 Establishment of an independent (14,520)'
decommissioning trust (Note 3)..........
Other, net...............................
(484)
(984) 127 Net other sources (uses) of funds..........................
(3,447)
(83) 2,741' Total Funds For Construction From Above l
Sources..................................
60,175 49,605 31,336 Allowance For Other Funds Used During Construction.............................
-1,696 2,803 2,459 GROSS PROPERTY ADDITIONS...................
$61,871
.$52,408
$33,795 1
Composition of Cross Property Additions:
Utility plant............................
$27,934
$17,901
$14,393
. 19,402 Nuclear fuel.............................
33,937 34,507 Total...........................
$61,871
$52,408
$33,795 i
The accompanying notes are an integral part of these financial statements.
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Connecticut Yankee Atomic Power Company BALANCE SHEETS At December 31, 1986 1985 (Thousands of Dollars)
ASSETS i
Utility Plant, at original cost:
Electric..........................................
$236,767
$202,781 Less: Accumulated provision for depreciation....
97,526 88,577 139,241 114,204 Construction work in progress (Note 8)............
20,579 28,576 Nuclear fuel, net of amortization.................
125,859 111,579 Total net utility plant......................
285,679 254,359 Current Assets:
Cash and special deposits.........................
13 10 Accounts receivable...............................
13,525 20,886 Materials and supplies, at average cost...........
14,785 9,382 Prepayments and other.............................
2,509 2,094 30,832 32,372 Deferred Charges:
Unrecovered spent nuclear fuel disposal costs.....
16,212 14,630 Unamortized debt expense..........................
863 551 0ther.............................................
1,619 1,733 18,694 16,914 i
Total Assets.................................
$335,205
$303,645 i
4 The accompanying notes are an integral part of these financial statements..-
Connecticut Yankee Atomic Power Company BALANCE SHEETS At December 31, 1986 1985 (Thousands of Dollars) 0
' CAPITALIZATION AND LIABILITIES Capitalization:
Common stock - $100 par value. Authorized 700,000 shares; outstanding 350,000 shares in 1986 and 1985 (Note 4).........................
$ 35,000
$ 35,000 Capital surplu s, p aid in.........................
2,964 2,964 Retained earnings................................
50,563 50,916 Total common stockholders' equity............
88,527 88,880 Long-term debt, net (Note 5).....................
106,639 109,008 Total capitalization.........................
195.166 197,888 i
Current Liabilities:
Notes payable to banks (Note 6)..................
56,000 Current portion of long-term debt (No t e 5 ).......
6,068 11,688 Nuc lea r f uel payable.............................
14,745 Accounts payable.................................
9,405 14,979 Accrued taxes....................................
13,855 12,862 Accrued interest.................................
2,115 2,503 0ther............................................
1,137 671 88,580 57,448 Deferred Credits:
Unamortized gain on reacquired debt..............
2,242 2,587 Accumulated deferred investment tax credits......
16,727 17,604 Accumulated deferred income taxes................
32,092 27,966.
3 0ther............................................
398 152 51,459 48,309 i
Commitments and Contingencies (Note 8)
Total Capitalization and Liabilities.........
$335,205
$303.645 i
i The accompanying notes are an integral part of these financial statements.
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C:nnecticut Yanksa Atomic Pow 2r Comptny NOTES TO FINANCIAL STATEMENTS (1)
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES General - Connecticut Yankee Atomic Power Company (the Company) owns and operates a single unit nuclear-power electric generating plant of the pressurized water type, having a net capability.of 582,000 kilowatts. The plant commenced commercial operation on January 1, 1968. The Company's common stock is owned by ten New England electric utilities.
The Company has entered into power contracts, as amended, with its ten stockholders (Sponsors) for the sale to them of the entire output of the plant for a minimum of thirty years commencing January 1,1968. Under the terms of the contracts each Sponsor is required to pay the Company an amount equal to its entitlement percentage of the Company's total operating expenses, including a return on net unit investment.
Northeast Utilities, whose operating subsidiaries have a combined 44 percent ownership interest in the Company, furnishes accounting, engineering, construction, maintenance, financial, legal and other administrative services to the Company. The total cost of these services billed to the Company amounted to $42,045,000, $26,228,000 and $23,406,000 for the years ended December 31, 1986, 1985 and 1984, respectively.
Public Utility Regulation - The Company and each of its Sponsors is a public utility under Part II of the Federal Power Act and is subject to regulation by the Federal Energy Regulatory Commission (FERC) with respect to, among other matters, wholesale rates and accounting procedures. The Company is subject to further regulation regarding both its long-term and short-term financings by The Securities and Exchange Commission under the Public Utility Holding Company Act of 1935. In addition, the Connecticut Department of Public Utility Control has jurisdiction over the Company's long-term financing.
Allowance for Funds Used During Construction (AFUDC) - AFUDC, a noncash i
item, represents the estimated cost of capital funds used to finance the Company's construction and nuclear fuel program. These costs, which are one component of the total capitalized costs of construction and nuclear fuel, generally are not recognized as part of the net unit investment until facilities are placed in service. AFUDC is recovered over the service life of plant in the form of increased revenue collected as a result of higher depreciation and nuclear fuel expense.
The effective AFUDC rates for 1986, 1985 and 1984 were 11.5 percent, 13.1 percent and 14.4 percent, respectively. These rates were calculated in accordance with FERC guidelines.
Nuclear Fuel - The cost of nuclear fuel is amortized to operation expense on a units-of-production method at rates based on estimated kilowatt-hours (kWh) of energy provided. Under the Nuclear Waste Policy Act of 1982 (the Act), the Company is paying the United States Department of Energy (DOE),
on a quarterly basis, a fee of 1.0 mill per kWh based on nuclear generation beginning April 7, 1983, for the disposal of spent nuclear fuel and high-level radioactive waste. _
C;nnecticut Ycnk:2 Ato ic Powsr Cozp:ny NOTES TO FINANCIAL STATEMENTS For nuclear fuel used to generate electricity prior to April 7,1983 (prior period fuel), the fees are based on the amount of energy extracted from such fuel. The Company has selected the option, as established by the Act, of payment for prior period fuel anytime prior to the first delivery of spent fuel to the DOE.
At December 31, 1986, fees due to the DOE for the disposal of prior period fuel are approximately $65.5 million (which is classified as long-term debt on the accompanying balance sheets), including accrued interest costs of $16.8 million. As of December 31, 1986,
$49.3 million had been collected through rates.
A portion of the Company's nuclear fuel was financed during 1986 pursuant to a fuel supply trust agreement under which the Haddam Fucl Supply Trust owned and financed natural uranium prior to the fuel being fabricated. The trust obtained funds through the sale of commercial paper.
On July 8,1986, the Company purchased all uranium and reimbursed the trust for all financing costs and payments made by the trust. Interest costs of approximately $667,000 in 1986, $1,188,000 in 1985 and $1,290,000 in 1984 were incurred in connection with financing nuclear fuel under the trust agreement. These interest costs were capitalized by the Company. The weighted average interest rate charged by the trust was 8.6 percent in 1986, 9.4 percent in 1985 and 11.9 percent in 1984. The Company terminated the trust agreement on February 12, 1987. The Company anticipates that its present short-term borrowing capability will be adequate to finance future purchases of nuclear fuel.
Depreciation - The provision for depreciation (which includes an accrual for estimated decommissioning costs) is calculated using the straight-line method based on estimated remaining lives of the depreciable utility plant in service, adjusted for expected salvage value and removal costs as approved by the FERC. Depreciation factors are applied to the average plant in service during the period. When plant is retired from service, the original cost of plant, including costs of removal, less salvage, is charged to the accumulated provision for depreciation.
The depreciation rates for the various classes of plant in service are equivalent to composite rates of 7.6 percent in 1986, 7.7 percent in 1985 and 7.6 percent in 1984.
Income Taxes - The tax eff ect of timing dif ferences (differences between the periods in which transactions affect income in the financial statements and the periods in which they affect taxable income) is accounted for in accordance with the ratemaking treatment of the FERC.
The Company had not provided deferred income taxes for certain timing differences during periods when the FERC did not permit the recovery of such income taxes through rates. The cumulative net amount of income tax j
timing differences for which deferred taxes have not been provided was approximately $16.1 million at December 31, 1986. As allowed under current regulatory practices, deferred taxes not previously provided are being collected in rates over the remaining life of the unit.
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Connecticut Yankee Atomic Power. Company
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NOTES TO FINANCIAL STATEMENTS (2)' INCOME TAXES The components of the federal and state income tax provisions are:
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For the Years Ended December 31, 1986 1985 1984
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(Thousands of Dollars)
Current income taxes:
Federa1...........................
'$ 9,137
$ 6,832
$ 3,536 State.............................
3,367 3,210 3,749 i
4 To t al curre nt...................
12,504 10,042 7,285 i
Deferred income taxes, net:
Investment tax credits............
(877) 2,158 8,899' Federal...........................
2,772 2,036 1,681 State.............................
1,354 1,333 650 Total deferred..................
3,249 5,527 11,230-i Total income tax expense........
15,753 15,569 18,515 Less: Income taxes included in other income.................
(82) 63 114 Total income taxes charged to
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operating expenses.............
$15,835
$15,506
$18,401 i
4 Deferred income taxes are comprised of the tax effects of timing
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differences as follows:
Investment t ax c re di t s............
$ (877)
$ 2,158
$ 8,899 Allowance for borrowed funds used during const ruction..............
1,567 1,893 1,921 l
Spent nuclear fuel disposal costs............................
1,500 3,486 (2,740) l Decommissioning cost accruals.....
(2,582)
(2,582) 4-Liberalized depreciation..........
3,011 333 2,655 0ther.............................
630 239 495 l
Deferred income taxes, net....
S 3,249 4 5,527
$11,230 j
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Cenn2cticut Ycnkso Atomic Pewar CompIny
' NOTES TO FINANCIAL STATEMENTS i
The effective income tax rate is computed by dividing total income tax expense by the sum of such taxes and net income. The differences between the effective income tax rate and the federal statutory income tax rate are:
For the Years Ended December 31, 1986 1985 1984 Federal statutory income tax rate......
46.0%.
46.0%
46.0%
Tax effect of differences:
Depreciation differences.............
0.9 4.2 6.7 Investment tax credit amortization...
(8.4)
(8.4)
(7.1)
State income taxes, net of federal benefit.............................
6.9 6.9 6.4 j
Allowance for other funds used
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during construction-not recognized i
as income for tax purposes..........
(2.1)
(3.7)
(3.0)
Other, net...........................
(0.4)
(1.0) 0.9 Effective income tax rate..............
42.9%
44.0%
49.9%
(3) NUCLEAR DECOMMISSIONING The Company accrues decommissioning costs, which are included in depreciation expense, on the basis of immediate dismantlement at retirement. The estimated decommissioning cost, based on a 1985 study, is approximately $130.6 million in year-end 1986 dollars. Decommissioning studies are reviewed and updated periodically to reflect changes in decommissioning requirements, technology and inflation. Changes in requirements or technology or adoption of a decommissioning method other than immediate dismantlement would change these estimates.
In 1984 the Company established an independent, irrevocable decommissioning trust with a commercial bank. Each month the Sponsors are billed for their proportionate shares of decommissioning expense and the i
funds collected are deposited in the trust. The trust balance, including interest earnings, must be used exclusively to discharge decommissioning costs as incurred. As of December 31, 1986, the decommissioning trust 1
balance was $30.4 million.
1, (4) CAPITAL CONTRIBUTIONS i
The Sponsors are obligated under the terms of the Capital Funds Agreements, entered into with the Company in 1964, to provide their percentage ownership of capital to the Company either through common stock purchases, loans or advances. The total obligation of the Sponsors under these agreements is limited to an aggregate amount of $70 million, of which
$32 million had not been drawn down at December 31, 1986.
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Connecticut Yankee Atomic Power Company
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NOTES TO FINANCIAL STATEMENTS (5) LONG-TERM DEBT Details of outstanding long-term debt (net of reacquired amounts) are:
December 31, 1986 1985 (Thousands of Dollars)
O.
First Mortgage Bonds, Series A, 4-1/2% due January 1, 1993..........
$ 4,628
$ 5,475 First Mortgage Bonds, Series B, 9-3/4% due July 1, 1986.............
6,800 Debentures, 17% due 1996 Series A............................
36,719 40,396
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Series B............................
1,728 1,902 i
Pollution Control Note, 6% due 1997...
4,125 4,500 Fees and interest due for spent nuclear fuel disposal costs.........
65,505 61,620 Unamortized premium...................
2 3
1 112,707 120,696 Less: Amounts due within one year....
6,068 11,688
$106,639
$109.008 The First Mortgage Indenture, secured by utility plant, requires deposits of $945,000 semiannually of cash and/or the expenditure of $945,000 of cash to purchase Series A Bonds for deposit into a sinking-fund through July 1, 1992.
The Company's 17% Debentures, which are guaranteed (Series A) or held (Series B) by the Sponsors, have annual sinking fund requirements of
$3,851,000 through October 1, 1995, and a final payment of $3,788,000 due on October 1, 1996. The 6% Pollution Control Note requires annual deposits of $375,000 into a sinking fund through November 1, 1996.
l (6) SHORT-TERM DEBT To meet its general working capital needs, the Company has a l
$25 million Revolving Credit Agreement with four domestic banks. Under the 1
terms of this agreement, the Company is obligated to pay a commitment fee of three-eighths of one percent per annum and an agency fee of one-eighth of one percent per annum, both on the daily average of the unborrowed portion of the commitment. Terms call for interest rates equal to the prime rate of The Connecticut Bank and Trust Company, N.A.
On December 31 j
1986, the Company had $16 million of borrowings outstanding under this l
agreement. The Sponsors have guaranteed their proportionate ownership i
shares of any borrowings under this agreement.
On November 20, 1986, the Company entered into a $90 million Credit i
and Letter of Credit Agreement with nine foreign banks. Under the terms of this agreement, the Company is obligated to pay a commitment fee of one-quarter of one percent per annum on the daily average of the unused amount. The agreement allows the Company to obtain funds through either direct borrowings (with rates based on the Libor rate plus a margin of t
t Cinnecticut Ycnkso Atocic Pow 2r Comp ny.
NOTES TO FINANCIAL STATEMENTS i
i one-half of one percent or.a certificate of deposit rate plus a margin of j;
. five-eighths of one percent or prime rate) or issuance of letter of credit backed commercial paper. The agreement allows for participations of portions of the commitment. -These participations will lower the effective cost.of funds to the Company. On December 31, 1986, the Company had no.
borrowings outstanding under this agreement. Borrowings under this agreement are not guaranteed by the Sponsors.
l On January 15, 1987, the Company terminated the $40 million Eurodollar -
Credit Agreement and repaid the outstanding borrowings. At December 31, i
1986, the Company had $40 million of borrowings outstanding under this.
agreement.
(7) RETIREMENT PLAN The ' Company has a noncontributory retirement plan covering all regular employees. The Company's policy is to fund annually the actuarially-determined contribution which includes that year's normal cost, and the i
amortization of prior years' actuarial gains or losses.and the amortization of prior service costs over periods approximating the remaining life of the i
plant. Total pension cost, part of which was charged to utility plant, approximated $556,000 in 1986, $833,000 in 1985 and $784,000 in 1984. The 4
decrease from 1985 to 1986 is attributed to an actuarial gain resulting from an increase in the market value of plan assets and a decrease in the j
number of plan participants.
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The actuarial present value of accumulated plan benefits and plan net 4
assets available for benefits for the Company's plan are:
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January 1, 1986 1985 (Thousands of Dollars) i Benefits:
Vested............................
-$ 2,972
$2,787 Nonvested.........................
1,237 1,080
$ 4,209
$3,867 Net assets available for benefits...
$11,543
$8,313 The assumed rate of return used to determine the actuarial present i
value of accumulated plan benefits was 7.5 percent for both years.
i In December 1985, the Financial Accounting Standards Board issued i
Statement of Financial Accounting Standards No. 87 (SFAS 87) entitled 1
" Employers' Accounting for Pensions." SFAS 87 supersedes previous pension accounting standards and is effective in 1987. This statement prescribes a
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standardized method for measuring pension costs and expanded footnote disclosures. Any change in pension expense.as a result of SFAS 87 will be reflected in rates charged to the Sponsor companies through the power j
contracts.
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Crnnecticut Ycnk3o Atomic Pow;r C:mpany
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NOTES TO FINANCIAL STATEMENTS In addition to pension benefits, the Company provides certain health care and life insurance benefits to eligible retired employees. The cost of providing these benefits was not material for the years 1986, 1985 and 1984.
(8) COMMITMENTS AND CONTINGENCIES Construction Program - The Company's currently approved construction budget for 1987 is $48.8 million, including AFUDC. A preliminary estimate for the construction program for the years 1988-1991 is $75.2 million, including AFUDC.
The construction program is subject to periodic review and revision.
Actual construction expenditures may vary from such estimates due to factors such as inflation, revised nuclear safety regulations, the availability and cost of capital, and the granting of timely and adequate rate relief by the FERC, as well as actions by other regulatory bodies.
Nuclear Fuel - The Company currently forecasts nuclear fuel expenditures of $82.8 million (excluding AFUDC) for the years 1987-1991, of which
$17.1 million is for 1987.
Nuclear Insurance Contingencies - The Price-Anderson Act currently limits public liability from a single incident at a nuclear power plant to
$695 million. The first $160 million of liability would be covered by the maximum amount provided by commercial insurance. The additional liability of $535 millicn would be provided by an assessment of $5 million per incident levied on each of the 107 nuclear units operating in the United States, subject to a maximum assessment of $10 million per nuclear unit in any year. Under the provisions of the Company's power contracts, an assessment would be passed on to the Sponsors.
Insurance has been purchased from Nuclear Electric Insurance Limited (NEIL) to cover the cost of repair, replacement or decontamination of utility property resulting from insured occurrences. Under this policy, the Company is subject to retroactive assessments if losses exceed the accumulated funds available to NEIL. The maximum potential assessment against the Company with respect to losses arising during the curren*
policy year is approximately $7.6 million which would be passed on to the Sponsor companies. Although the Company has purchased the limits of coverage currently available from conventional nuclear insurance pools, the cost of a nuclear incident could exceed available insurance proceeds.
Conn:cticut Ycnksa Atomic Pow 3r Company NOTES TO FINANCIAL STATEMENTS i
(9) LEASES l'
The Company is leasing a portion of Northeast Nuclear Energy Company's nuclear control room simulator building. In addition, the Sponsors which provide administrative support to the Company have entered into lease agreements for the use of data. processing equipment, office equipment, vehicles and office space. The Company is billed for. its proportionate share of these leases. For the years 1986 and 1985, the Company charged rental payments of.$1,279,000 and $929,700, respectively,'to operating expense. Future minimum lease payments, excluding executory costs,-are approximately:
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1987...................
$1,262,000 f
1988...................
813,000 j
1989...................
493.000 1990...................
274,000 i
1991...................
214,000 5
After 1991.............
2,603,000 l
$5,659,000 4
l (10) REGULATORY MATTERS J
j At an informal conference held on February 17, 1987, the FERC staff indicated that it wished to discuss a possible voluntary reduction in the Company's return on equity (ROE) before staff seeks to initiate a formal investigation and hearing at the Commission designed to lower the return.
l At the informal conference, the Company indicated it is planning to file's rate case in early April 1987, in'which it will propose a lower ROE, as well as a number of other changes in the power contracts, t
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