ML20206J046
| ML20206J046 | |
| Person / Time | |
|---|---|
| Site: | 05000000, Seabrook |
| Issue date: | 12/31/1985 |
| From: | Greenquist T BANGOR HYDRO-ELECTRIC CO. |
| To: | |
| Shared Package | |
| ML20206H943 | List: |
| References | |
| NUDOCS 8606260389 | |
| Download: ML20206J046 (43) | |
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'T. Increase 1985 1984 (Ihrease) i Operating Revenue (000's)
S 97,751 95,345 2.5%
- Operating Expenses (000's) 82,631 82,046
.7%
Earnings (Loss) Applicable to Common Stock (000's)
Before Loss on Investment in Seabrook Nuclear Units S
11,625 11,415 1.8%
Loss on Investment in Seabrook Nuclear Units, Net ofIncome Taxes S (17,036)
(100.0%)
Net S
(5,411) 11,415 (147.4%)
l Common Stock Equity (000's) 53,972 62,944 (14.3%)
(Construction Expenditures, Excluding AFDC (000's) 14,078 15,257 (7.7%)
$lant Investment (Net of Accumulated Depreciation) (000's)
$ 158,858
$ 155,116 2.4%
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l Sales (KWH)(000's)
Non-interruptible 1,185,790 1,154,178 2.7%
Interruptible 197,846 205,002 (3.5%)
Total 1,383,636 1,359,180 1.8%
Customers - year end 81,673 80,186 1.9%
Residential Customers - average 71,067 69,730 1.9%
Number of Common Stockholders - year end 10,426 10,164 2.6%
Number of Common Shares Outstanding - year end 4,450,684 4,450,684 Number of Common Shares Outstanding - average 4,450,684 4,448,896 Dividends Per Share Declared On Common Stock
.80 1.40 (42.9%)
Earnings (Loss) Per Share of Common Stock Before Loss on Investment in Seabrook Nuclear Units S
2.61 2.57 1.6%
Loss on Investment in Seabrook Nuclear Units, Net of Income Taxes S (3.83)
(100.0%)
Net S
(1.22) 2.57 (147.5%)
KILCWATT-HOURS SOLD FUEL SOURCES OF POWER l
Kilowatt-hours (millions)
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'85 O Residential O Industrial O Hydro O Oil O Commercial O Other O Nuclear 1
To the Stockholders:
Out of all the activity of yet another position, although it will take time to interest would eliminate the adverse busy year, three developments in recover from the write-offs that had effects of the ongoing risks and con-1985 can be singled out as having to be absorbed, troversy associated with participation major significance. First in order of The stipulation also addressed the in Seabrook. We see the sale as being importance, the hiaine Public Utilities recovery of the remaining investment in the best interests of the Company Commission approved a stipulation being incurred to complete Unit 1. In and its customers, despite the addi-we negotiated with the Staff of the essence, if Unit I were to be com-tional $1.6 million write-off that Conunission and the hiaine Public pleted without further difficulty and would be required (about $.36 per Advocate regarding the rate-making commence commercial operation on conunon share) and despite the possi-1 treatment of our Seabrook invest-its present schedule, and as long as it ble adverse impact, for a time, on the ments. Second, a realistic proposal operated well, timely recovery Company's financial performance, all was made for the sale of our Seabrook through rates of such remaining as explained elsewhere in this report.
interest. Finally, the price of oil has investment would be relatively The recovery of the Company's dropped dramatically.
assured by the provisions of the stipu-investment in Seabrook through As the financial results show, the lation. On the other hand, if commer-December 31,1984 has now been i
Company incurred a loss for 1985 of cial operation were delayed or the adJressed, and that will not change
$1.22 per common share. Without plant did not operate as well as whether we continue our Seabrook the Seabrook-related write-offs. earn-expected, the operation of the ownership or whether we sell it.
ings per common share would have
" benchmark rate" provisions of the While we still estimate that, based on been a positive $2.61, compared to stipulation would lead to future losses the cost to complete the plant, our
$2.57 in 1984. These write-offs for the Company. If the Company Seabrook interest would provide reflect the impact of the greatest por-sold its interest in the project, benefits to our customers over its pro :
tion of the concessions the Company obviously this risk would be averted.
jected 30-year life, over the shorter was required to make in order to Turning to the proposed sale, last term (the next 15 years or so) we achieve the rate. making settlement.
year we reported that the Company believe we could satisfy our custo-Although the magnitude of these was attempting to sell its Seabrook mers' needs more economically with-write-offs is difficult to accept, we interest in response to a mandate from out Seabrook.
believe the Company will benefit from the hiaine Public Utilities Commis-At this writing, our petition for 1
i this expeditious resolution of the re-sion, but that we really thought it was approval of the sale is pending before covery of the Seabrook investment, in the best interests of our customers the hiaine Public Utilities Commis-The stipulation, approved by the and stockholders to concentrate sion. The Company, the Staff of the Commission in October and imple-instead on completing Unit 1. We Commission and the hiaine Public mented as of November 1,1985, also noted that our efforts to sell were Advocate have agreed that if the sale resolved most of the uncertainty that not meeting with success. In July, were to go through the Company has plagued the Company concerning however, Eastern Utilities Associates, would implement a $1.2 million rate the recovery of the investment in Sea-a hiassachusetts company and a Sea-decrease. The Commission staff and i
brook. As we have previously brook participant, offered to purchase the Public Advocate have joined with reported, this uncertainty threatened the Seabrook interests of the hiaine the Company in seeking the Commis-the Company's credit access and Seabrook participants. The terms of sion's approval. We hope to have could have precipitated a liquidity cri-the offer are described in detail later more news on this subject by the time.
sis. Now, however, with the stipula-in this report, but essentially if the of the annual meeting in hiay.
tion in place the Company is begin-transaction is consummated Eastern The price of oil used for generat-ning to recover through customer Utilities Associates will assume ing electricity has declined dramati-rates 70% ofits December 31,1984 ownership of our Seabrook interest cally since the end of 1984. From investment in Seabrook Unit I and by taking over the Company's obliga-January I to December 31,1985 we i
60% of the investment in the can-tions and paying an amount about experienced a 21% decrease in oil celled Unit 2. The resulting improve-equal to the Company's investment in prices to the Company. The result, so ment in cash flow has greatly the project smce December 31,1984.
far, has been a decrease in charges to improved the Company's financial This transfer of our ownership our customers through the fuel cost 2
q
@ 3 9 M i yk g N Q adjustment factor equivalent to over through 1987. hiost importantly, the 7
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$11 million annually. Since year-
" quality" of the Company's earnings g
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end 1985, oil prices have continued to will improve, as the level of the non-1 decline, and if these lower prices are cash " allowance for funds used during W[ d I
maintained there could be further construction" associated with the w Cc 4'
$g decreases in the price of electricity to Seabrook investment is diminished.
our consumers. Offsetting the decline With the implementation of the stipu-in the price of oil will be the upward lation, the cash component of the L
price impact of "small power produc-Company's earnings has already o
ers" - the wood-fired projects with increased markedly.
which the Company has long-term The matters I've touched upon v
contracts - as they begin supplying above are more fully discussed in the t
energy into our system later this year.
remainder of this report, which 1
(
Two negatives that relate to the encourage you to read carefully.
T decrease in oil prices cannot be over-On July 31,1985, Robert N.
looked. As the price of electricity Haskell, then Chairman of the Board, g!%.
~
decreases, consumer apathy toward retired after 60 years with the Com-J 'g= + + gdy g
energy efficiency and conservation pany. We've devoted a page in this P,
-5m w
efforts will have to be addressed.
report to Bob's accomplishments. A Equally troublesome will be the abil-person of immense capability, intelli-ity of any additional non-utility small gence and insight, Bob dedicated those power producers to develop projects attributes for the benefit of the Com-as lower oil prices depress the price p my, the community, and the State of the Company is able to pay for their hiaine. We will miss Bob's experience output. We are expecting these small and guidance. We hope we can emu-power projects will play an important late his desire for perfection and his
-part in helping us meet our customers' talent for consideration of the human future demand for electricity.
elements that make a good working With the Company's financial organi:ation, dedicated to serving the condition improving, we are taking stockholders, customers and steps to rebuild your investment in employees for the benefit of each.
the Company and improve the service On behalf of the management we provide to our customers. A new and employees of the Company, I short-term credit facility is being want to express my deep appreciation implemented that will reduce the to you for supporting us through this Company's borrowing costs and allow difficult period. Hopefully we can us readier access to the short-term look forward to healthier and more money market. In the event our Sea-rewarding years in 1986 and beyond.
brook interest cannot be sold, the Company is in a much stronger posi-Respectfully submitted, tion to finance its share of the cost to complete the project. The Company's transmission and distribution con-struction and maintenance programs Thomas A. Gree t st have been restored to pre-1985 levels.
Chairman of the oard A new two-year labor contract was and
, successfully negotiated with our bar-President l gaining unit employees, which helps
'stabili:e the Company's labor costs hiarch 24,1986 3
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BOARD OF DIRECTORS o
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i ROBERT S. BRIGGS 1 p,o g
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1 llampden, Alainc4' ice President and Lv 1
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Cenaal Omnsel o[ the Onnpany
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WILLI Ahi C. BULLOCK, JR.
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,,,,,,,,c oc,,,, j Orrington, Alame-Chairman of the lhed D l,
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and President
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G. CLIFTON EAh1ES
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lkmgor, Alaine-President,
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"4 EASTPORT N. fl. [3ragg OF Sons (distributor, s
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anaomotin e and industrial supplies)
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<S.dary Commatcc>
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ROBERT H. FOSTER t
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- --E Afachias, Alaine-President and Treasurer,
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. ]e R. I1. Foster Inc. (petroleum distributor) i g
(Audit Commitree)
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THOhf AS A. GREENQUIST t-l Of sa ~poa 13rcicer, Adaine-Chairman of the lhard I
g,a9g and President of the Company k
-2 JOHN T. hiAINES
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O SroNINGTON
} { olden,,\\{aine.Negired faper Industry
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JAhtES G. SARGENT Ilampden. A1aine-President,11. E.
Sargent, Inc. (construction)
System Map DIVISION OFFICES (Sidary Commince and Chairman of
^" " U""'"'"##I BANGOR DIVISION 345 KV MEPCO transmission line 33 State Street 115 KV transmission lines P. O. Ihn ou 46 KV transmission lines OFFICERS Ikmgor, A1E e440:
34 5 KV transmission lines
@ nyoro-eiectnc generating piants HANCOCK DIVISION THOhiAS A. GREENQUIST (total of 34 MW)
@ steam-electnc generating plants E U Ib" 749 Chairn.an of the Ihard and President Ellsteorth, AiE 04 N ROBERT S. BRIGGS 6
@ o(cranam station-60 Mw) eseiei inc generating piants WASHINGTON COUNTY
\\' ice P'c5' den' ""d Ge"3"I O*"
@ division offices DIVISION JOHN P. O'SULLIVAN P. O. liox t39 - Atachias, AfE o4 34 l' ice Presidou and Treasura 6
P O. 130s 190 - Eastport. A1E 04 ~n 6
CARROLL R. LEE hilLO DIVISION l' ice President-Engincenng P. O.Ika 248 and Operations Atilo, A1E 044 3 6
PAUL A. LeBLANC hilLLINOCKET DIVISION grice president. administration P. O.ILn 60g Atillinocket. A1E e44 2 DAVID R. BLACK 6
Gmtroller LINCOLN DIVISION P. O. nu 2,9 ROBERT C. WEISER Lincoln,A1E o4457 Assistant \\' ice President Rates and Information Systems CARROLL A. BROCHU Anistant Treasurer FREDERICK S. SANiP Corporate Clak 4
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A Tribute to Bob Haskell In July 1985, Robert N. Haskell received the benefit of his partici-W
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retired as Chairman of the Board.
pation, leadership and counsel.
O Bob's retirement capped a re-Bob has also been a generous V
markable 60-year career with the contributor to the charitable
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_y Company - 50 of those years in organi:ations with which he was g)PJ positions of senior executive associated, and many other y
leadership.
worthy causes. He is responsible c!
e After graduating from the Uni-for the establishment of several y
S versity of hiaine in 1925, Eob scholarship funds at the University 3w k~
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'j joined Bangor Hydro as a design of hiaine.
- V engineer. By 1935, he had pro-Bob was also a prominent figure gressed to Vice President and in hiaine politics. He served in the
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General hianager, and became hiaine legislature from 1945 to x
President in 1958. In 1976, he 1959, and was President of the relinquished the title of President Senate from 1955-1959. He was but remained Chairman of the Governor of hiaine for a six-day 4\\
Board. He was a director of the period in January 1959, after then-ugag Company from 1938 until his Senator-elect Edmund S. hiuskie retirement. He served for many resigned to assume his Senate ment upon Bob's retirement last years as a director of hiaine Yan-duties and before the inauguration July: "Only those of us who have kee Atomic Power Company and of Governor-elect Clinton A.
been fortunate enough to become hiaine Electric Power Company, Clauson.
closely acquainted with Bob Has-Inc., two successful corporate joint There are probably few people kell can really appreciate the ventures which he was instrumen-who have received more awards, dimensions of his achievements.
tal in establishing.
honors and other recognition of Bob Haskell literally devoted his Bob also achieved prominence in their various achievements than life to our business, civic and char-other business endeavors, serving has Bob Haskell, and none are itable community, and the citi: ens for 32 years as a director of the more deserving. But apart from his of Eastern Maine benefited greatly Merchants National Bank of Ban-business and civic achievements, as a result. We'll miss him around gor (and 12 years as its chairman)
Bob's preference has been for a the office, but we also know he and for five years as a director of modest and unassuming private isn't far away."
Diamond International Corp-lifestyle. An avid outdoorsman, for oration.
many years he indulged in the Bob's services have been much enjoyment of the North Maine in demand by civic and charitable woods, and has worked to preserve organi:ations, and he has given the sanctity of that resource. Per-selflessly of his time. He is a haps it has been these qualities that former trustee of the University of have kept Bob in this part of the Maine, and served for many years country, rather than succumbing as chairman of the fm' ance commit-to the lure of greater opportunity tee of that board, and a former and personal gain elsewhere, which trustee and past president of the opportunities were surely available Eastern Maine Medical Center. In to a person of such capability.
addition to these, several other We think that President Tom local and regional organi:ations Greenquist said it well in a com-5
l FIN ANCIAL OPERATIONS Dominating the Company's vided by the Company's opera-F 1
financial results for 1985 were the tions - a welcome change after
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Seabrook-related write-offs. In several years ofinadequate internal May, as a result of an order of the cash flow.
Maine Public Utilities Commission Kilowatt-hour ("KWH") sales
("MPUC") concerning the pru-in 1985 increased 1.8% over 1984, dency of expenditures on Seabrook which also had a positive effect on Unit 2, the Company established a operating results. However, the
$3.1 million reserve, representing increase in sales was less than the the net-of-tax effect of the proba-4.3% increase experienced in 1984 ble loss of 40% ofits investment over 1983 due in large part to a in Unit 2. In No~ ember, the Sea-15% decline in interruptible sales brook Stipulation, described in to the Company's largest inter-detail in this report under " Sea-ruptible customer. KWH sales to brook" and in Note 9 to the that customer increased in 1984 by Financial Statements, became 2.5% over 1983. Firm, or non-effective, adding another $13.9 interruptible, KWH sales increased million net-of-tax write-off, for a 2.7% in 1985, compared to 4.6%
total of 1985 write-offs of $17 in 1984.
million after tax, or $3.83 per Despite a wage freeze for most of common share. The net result for the year, operation and mainte-the year was a loss of $1.22 per nance expenses increased in 1985 common share. Operations for by 7.4%. Principal factors were a 1985 without the write-offs would
$511,000 increase in insurance have resulted in earnings of $2.61 expense and a $481,000 increase per common share, compared to in energy efficiency and conserva-
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1984 earnings of $2.57 per com-tion expenses. The latter expenses mon share.
are recovered through a separate After absorbing the write-offs, conservation cost adjustment fac-the Company's financial condition tor in the Company's rates.
with the Seabrook Stipulation in In the "Seabrook" section and place has been improving.
in Note 9 to the Financial State-Although effective for only ments, the proposed sale of the November and December of 1985, Company's interest in Seabrook is the increase in basic rates was the discussed. The Company expects principal reason for an 8% increase this transaction to occur, if at all, in general rate revenue for the about mid-1986. If the sale were to trustee under the first mortgage year. The percentage of non-cash, occur, the Company would incur bond indenture, to be released to AFDC earnings in the fourth quar-an additional after-tax write-off of the Company over time as substi-ter of 1985 dropped to 37%,
about $1.6 million, or about $.36 tute property is certified. Although compared to 80% for the fourth per share, and a $1.2 million rate the amounts on deposit would be quarter of 1984. The implementa-reduction would be implemented.
invested by the trustee for the tion of the Seabrook Stipulation is In addition, the Company would Company's benefit, the return producing the anticipated effect of be required to deposit a portion of earned on such investments would increasing the amount of cash pro-the proceeds of the sale with the likely be substantially less than the 6
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return. Thus, the sale would have this effect.
?! an adverse impact on 1986 earn-Reference should be made to the
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to earn the return authori:ed from the Company's results of opera-7 time to time by the MPUC, unless tions and financial position.
a specific provision were allowed i
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Scabrook The Company has a 2.17%
Substantial progress is being ownership interest in the Seabrook made in completion and submis-
. m g' nuclear project in Seabrook, New sion of the emergency response t=
Hampshire, originally intended as a plans - a necessary step in acquir-two-unit project of 1150 megawatts ing the Nuclear Regulatory Com-("hlW") each. Unit 2 was effec-mission operating license. How-tively cancelled in hiarch 1984, ever, Seabrook's opponents are when it was about 21% completed.
focusing their efforts on this emo-Significant progress was achieved tionally charged, highly political in 1985 in the completion of Unit issue, and it remains as probably 1, which is scheduled for commer-the last significant obstacle to cial operation in late 1986 overcome in achieving commercial i
(although a delay is likely). The operation of Unit 1.
events of 1985 of most significance to the Company and its Seabrook Rate Treatment of the compants innstment investment were the implementa-tion of a stipulation regarding the in October 1985 the hiPUC recovery of the investment and the approved an agreement (the " Sea-possibility of a sale of the Com-brook Stipulation") among the pany's. interest.
Company, the Staff of the hiPUC and the hiaine Public Advocate, Construction Progress nvolving a comprehensive resolu-Last year at this time, the Com-tion of most of the rate-making pany reported that Unit I w matters arising out of the Com-about 83% complete, and c >:.
pany's participation in Seabrook.
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struction was progressing at a The Company agreed to write off reduced rate due essentially 30% ofits December 31,1984 to funding limitations and difficul-investment in Unit 1 exclusive of
, ;T ties being experienced by several of nuclear fuel, and 40% of its the joint owners.
investment in Unit 2 exclusive of Despite the continuation of con-nuclear fuel. The remaining 70%
struction funding limitations dur-ofits December 31,1984 Unit 1 ing most of 1985 and regulatory investment is to be recovered in and financial uncertainties with rates over a 30-year period, the respect to several of the joint remaining 60% of the Unit 2 owners, the Seabrook project investment is to be recovered over management succeeded in bringing a 7-year period, and the unamor-When Unit 1 achieves comrrercial Unit I to about 95% complete at ti:ed balances are allowed in rate operation, if the Company still year-end 1985. The " hot func-base and are thereby earning a owns its Seabrook interest this tional" test was completed in return.
post-1984 investment will also be November - ahead of schedule.
The Seabrook Stipulation also included in rates. However, to the This milestone signifies that, from addresses the rate treatment of the extent the Seabrook Unit 1 power l
a construction point of view, the Company's investment in Unit I costs, measured using the post-plant is almost complete and is incurred after December 31,1984, 1984 investment, exceed certain capable of producing electricity.
and all nuclear fuel investment.
" benchmark" rates, recovery of 8
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salvage investment in Unit 1 out any interest or return, to be incurred after December 31,1984, recovered in later periods if anu and the remaining 70'7, will be when the Seabrook Unit I power recovered in rate 3 over 30 years, costs become less than the bench-with rate base allowance of the mark rates. If Unit I is not com-unamortized balance.
pleted, the Company will write off The Company also agreed in the 30'% of its net-of-salvage nuclear Seabroek Stipulation to apply f
fuel investment and its net-of-30's of the non-fuel proceeds of 9
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recovered from ratepayers which
$12.4 million, due to decreasing would cause a further after-tax fuel costs the Company was able write-off of about $1.6 million at simultaneously to implement a the time of the sale.
$7.8 million decrease in fuel cost Revised rates implementing the recovery rates, thereby limiting the 10
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_ i-vestment in construction from Ri/ ~ h *g - :
Seabrook Stipulation also put an end to the uncertainty that has December 31,1984 to hiay 31, y '
plagued the Company for most of 1985 (about $6.6 million). Upon 2
the 1980's concerning the recovery closing, EUA would reimburse the u
of its Seabrook investment, which Company for its expenditures for 1'
-4 uncertainty had increased alarm-its share of Seabrook Unit I con-2 t
H c'd ingly with the spiralling project struction costs and nuclear fuel B.$
costs and financial crises of some costs incurred after hiay 31,1985.
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< m.3 of the participants. Although risks EUA would also pay an additional p
to the Company by reason ofits
$3.4 million by reason of a delay o,
Seabrook investment are not at an in closing beyond hiarch 31,1986.
end, the Seabrook Stipulation The Company would be entitled to
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reduced them to manageable pro-interest on the amounts paid at the portions and has allowed the closing, measured from June 1, Company to focus its attentions on 1985 in the case of the $12.6 mil-2 other important projects.
lion, and from varying dates in the f Y~
case of the other payments. In Jan-M Proposed Sale of Seabrook u.iry 1986, the agreement was 8
amended to increase the cash offer,
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Following the hiPUC's directive to extend the termination date of issued in December 1984, the the proposal and to omit certain Company and the other hiaine indemnifications that had been utilities sought offers for the pur-agreed upon by the hiaine utilities chase of their respective interests in the event of an official cancella-in Seabrook. Initially, these efforts tion of Unit 2. For the Company, w'--
produced no satisfactory results.
the cash offer was increased by $6 g
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79 setts utility holding company and, number of conditions, and may be Associates ("EUA"), a hiassachu-The transaction is subject to a
' mm;n_. m,.=_A_ 4 through one ofits subsidiaries, a terminated by either party ifit has Seabrook participant, offered to not taken place by June 30,1986.
purchase the Seabrook interests of For the Company, the most signif-the three hiaine utilities involved icant condition is the approval of as joint owners in the project. The the hiPUC on terms satisfactory to terms are essentially identical for the Company, and the matter is rate increase to about 5% overall.
each hiaine utility, differing only currently pending at the hiPUC.
As indicated earlier in this in proportion to their respective The Company, the hiPUC Staff report, the Seabrook Stipulation, Seabrook interests. For the Com-and the Maine Public Advocate taken with the hiPUC's earlier pany, as proposed in July EUA have agreed that if the sale is con-order regarding Unit 2, resulted in would pay $12.6 million for the summated the Company would write-offs in 1985 of about $17 Company's Seabrook interest mea-implement a rate reduction suffi-million and the reporting of a sub-sured as of hiay 31,1985, which cient to produce a decrease in stantial loss on the Company's would reimburse the Company for annual revenues of $1.2 million.
1985 Statement of Income. How-all ofits nuclear fuel investment With this understanding, the Staff 11
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proval of the sale.
stantial benefits to the Company's holders and customers, would i
llespite the adverse financial customers over the life of the unit, benent from the sale by eliminat-i consequences described under o er the shorter term future (until ing several risks - the risk that the
" Financial Operations", the ('om-about the end of this century) the power from Seabrook will exceed pany believes that the sale should Company e3timates that its custo-the benchmark rates included in take place. Although it is likely mers would benefit, in the form of the Seabrook Stipulation, the risk b.
that, based on the post-19M lower power costs, from a sale of of further construction delays, the 12
3 Power Supply Options
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One of the most impor' ant puter without the need for atten-ob ectis es of the ( ompany is to Jants. T he ( ompany has plans to y
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f }' N select, t' rom amone an increa'ing automate, moJernte or exparul range ot' alternatives, f uture po ver several hvJro sites w ithin its service supply sourtes to meet Customer area including a major rcJevelor-
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neeJs m the most economical, reh-ment at West EntietJ, a small 4
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7 able manner. Power supply repre-expansion at hiiltbrJ, a Joubimg sents (Y ' -7C ": it' the total C(st (it~
ilt Capacity at \\'c.cie anJ a new t
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pr(ividing service It) t ilst()mers an<l t}am at basin hIills In Of()nt). It a ! css Ikian tiptinlunl Clu)lCe Can tbesC pr() ject 5 are Con 1pleteJ, tiie ha\\ c an.h}\\ erse inip3Ct (in C(insti-(I)nlpany Will have nuire thari g
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nier c!cCtricity rates. A!st), it Jh)u er d()tib!Cd the.lllh) tint (){ e!CCtricity
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slipp}\\ s()tlit es d) Ikit ()perate rell-cerierateJ bv livJrtt ablv, eithe < tist(inier service w ill Aruither majiir orthin that has
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be detratletl ()r C(Sts w i}l be e\\(il\\ ed (w er Jtist the past f ew Increase <1 Jtic ti) t he accessits (it' vears is that (it' non-utility C()gener-prothllnd l% k-up power sources.
ation and small power proJuCtion Oct()Te new pi)u er supplv CapaC taCilit.es, st Fcalled 'qualif vmg it \\ is t(inmlitteJ. Ctistt iiner necJs taCilitiec tituler the teJeral Public
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aret.lreillll\\ ilssessed athi Jemarul l 'tilities Ilectilati)rv Rilicies Act i)t' 4
nlan.lgement ()pthins, stiCb as < t)M -
lN7M. Nth h f acilities are tinregu-i I
sers atitin ath} loaJ management, latcJ power generation sources are ctinsitlered arul iniplementeJ it' that sell kiwer til electric titilities s
i 4I I luth} t() be ct ht-cites tive. Irl Mlant at fleg(Itiated rates (>r rates set by he.i i
Cases it has been JetermincJ that the NiPll' At Bangor Hv fro, this the nu)Te elllCient tise (II electric
()pthin is cNpecteti It) l'CC(inie a a better (>pthin than the reality in 1956, with the aimple.
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proJumon of nuire rou er. The tion of three 15-2 5 htW w ooJ-( 'ompani is keen!v aware of the tireJ power plants located m necessity of inCith}ine economical lonesboro, West EnticlJ anJ ('hes-JemanJ management options in ter other projects are planneJ tor
- 1 it }'rtivides it) Clist()nlers.
the IIittire inCithling a 2 hlW services Niinctlleless, it is.Inticipatc<l that ret'use-t'uele<l plant in (3rringt< >n,
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aJJitional, new supphes or pow er whiCh would proviJe an aJJitional
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a be reemreu &,mmre.
bemem m reauCmahe mecuir Althouch one of the oldest lanJtills to hanJle mumcipal sohJ
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.- risk that its b< ensmC is Jela\\eJ Joe f or elc< tricity production, waste. Electric utihties Can also sour <es (t) < (inf rt)\\ crs\\ t u er the enlerderk \\
h\\ (lr(1-clet trh }h ad er has been
()M n tip f() 5C " (it' tile eq uit\\ (it response plan, anJ an\\ number of sclc< tcJ tbr an expanJeJ role at quahtvme t'acihties, anJ the ('om
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unspeciticJ risks associarcJ u ith Bancor livJro lh Jro has pro \\ en pany has requestCJ approval trom the tat t that htlC e,lr }klu er in tt i k'c \\ er\\ reliab!carhi(ifItMiglife, (be hIN l' (t) de\\ e!()p the West general. anJ scabrook m parth u anJ u ith moJern tc< hnolour has EnticlJ h\\ Jro reJevelopment pro-j lar, < ontinues to sutter trom a lat k het ome more etth ient anJ eco in t as a joint \\ enturer in sut h a u
(){ pti!itlCa! alhi rt'ulllatiir\\ s t i p}'t ir t f1(inlic,II. hit WI neu bvslTt) statit in s (ltialit\\ ind t;h ilit\\.
operate automath all\\ or bv < ou -
A thirJ option w hh h is ot
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importance for the tuture is t 'ana-the ('onservation Ilepartment and 1
Jian pow er Due to an abunJance Sales Forecasting Department were or natural resources, incluJine consohJateJ into a new Jerart-hydro m Quebec and coal m Neu ment, Marketme anJ DemanJ h
Brunswick and Nova Scona, and Management.
bcCause ()t pliblic ;xillev In ('allat}.1 This actu):i was anotlier ster in that C!lC()uraues the Jeveh>pment the ('omixinv's aintinuing ettort of nuclear ;3m r. ('anaJian ;xm er to aJJress the rieeds ot its ctistiu
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mers. It is a formal acknowleJg-7 sources are beine Jeveloped t'or sale at tavorable rates. The Com-ment of the Compauv's iJennty b
pans Ctirrently purchases signiti -
not (in}v as an electrical prthbiC-Cant quantilles of ;x)wer tr(1m Neu th)n and Jistributu)n aimpany, btit Brunsu ick ( a mix ot' hs Jro, also as an energy services com-nuclear and coal sources i anJ is pany. The Company's objet tive, S--'
I plannine to beein perchases trom through the et' torts ot' this Jerart-Quebec in l'% w hen a new ment, is to provide more energy trafismission hne Interconnection service to its customers from the 7
betw een Quebet alhi New Er.elaihl l'(imixuiv's existing energv supply.
completeJ. Expansion of these This is a value-aJJed concept g
is pur<hases is also under mtenJeJ to keep the Company's
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consiJeration product compentive anJ maintain It) Ille exten'. then, that O Wt -
or possibit inCrt ase its market g;
ettectn e t onsers ation anJ shart in the energy services busi-increased etthiena Joes not alle-ness without undesirably increas-e b
viate the reqtltrement II)r neu ine demaihi Iof e!cCtrlCity.
+[
sources of pow er, the ('ompans 's In 19M several aJJitions were potential for adJinonal hvJro-made to the Company's existme
=
e elet tru Jes elo,' ment, purchases energy conservanon programs.
i trom quahtyme tacihties. and trans-These include a Jemonstration F
a<nons with our l'anadian neich-house m Bancor at which people i
bors are c3 rectcJ to be available.
uill be able to see in use some ot' l
The l'ompany w ill cononue to the latest enerev ethcient applian-selet I a niix ()t these stillrces aihl Ces athl egllipment and observe ll am other neu sources that become weathen: anon and other energy available m orJer to provide an conservation techmqt. s, a hghtme f
econonucal, rehable suppiv of etticiencs program for commercial clatncuv.
customers, anJ a motor etticieno and JemanJ management are still program for commercial anJ being researt heJ. The (:ompany E n e r g y M a n mw nw n '
p mJuerial customers. In adJition, intends that its activities m this
. q ACilVitIP5 the( ompany continued to adnun-area will be focused anJ measured 7
[
Durine 10M the ('ompany took isti r six other conservation pro-m their unpact on both revenues 4
/
significant sters to aJJress the gr ims m the resiJent al and t om-and power supply requirements.
b isstie ( >I cheres ( tinservath)N athl niercial sect ()Ts with w hi< h it was E.mployees l i
- -F coeres manacement In the tourth previousls im olveJ.
s La I
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Stcckholders, Stock Income Tax Status Financial Prices and Dividends of Dividends Section At December 31,1085 there The Company estimates that 17 Management's Discussion were 4,450,684 shart, of common 100% of the dividends paid by the and Analysis of Results of stock outstanding and 10,426 Company on both its common and Operations and Financial common stockholders residing in preferred stock in 1985 will be Condition each of the fifty states and some taxable for federal income tax pur.
19 Statements of Income foreign countries.
poses. This estimate has been cal.
20 Balance Sheets The Company's common stock culated from the 1985 account 22 Statements of Capitalization is traded over-the-counter and is balances as reported in the accom.
23 Statements of Sources of Funds for Plant Additions quoted on the National Associa-panying statements. However, tion of Securities Dealers Auto-these amounts are estimates to the 24 Statements of Retained mated Quotations System extent that the Company's records Earnings 25 Notes to Financial Statements
("NASDAQ") under the symbol for 1985 have not been examined 39 Auditors' Report BANG, and is included in the by the Internal Revenue Service 40 Six Year Statistical Summary NASDAQNational Market Sys-and are subject to change when tem. The table below sets forth the such examinations are conducted.
high and low price range for the common stock as reported by the i
National Quotation Bureau Incorporated.
High Low C APITAL MIX 1984 Millions of Dollars First Quarter 13%
9X 1800 Second Quarter 11%
5M Third Quarter 11%
8M 1600 Fourth Quarter 11%
6M 1985 1400 First Quarter 8M 6%
Second Quarter 10 7%
1200 Third Quarter 10 %
9%
1000 Fourth Quarter 10M 9
800 Cash dividends of $.40 per common share were declared in 600 the first three quarters of 1984. In the fourth quarter of 1984 and for 400 each of the four quarters in 1985 200 the common dividend was declared at $.20 per share.
'81
'82
'83
'84
'85 5 Common Stock E Long-Term Debt E Preferred Stock E Short-Term Debt
[
Bang r Hydre-Electria Camp:ny Fin:ncial Statements C:nagement's Discussion and Analysis cf R cults of Operations and Firn:ial Condition General Sale of Seabrook Interest Stipulation on Seabrook Investment As described in Note 9 to the Financial Statements, the The resolution of the recovery of the Company's Company proposes to sell its interest in Seabrook to investment in the Seabrook nuclear project was the prin-Eastern Utilities Associates. If the sale is consummated, cipal financial event of 1985. Although this resolution the terms of the Seabrook Stipulation will require the resulted in the Company reporting a net loss in 1985, its Company to write off 30% of the Company's non-fuel overall long-run consequence is viewed as a positive investment in Seabrook Unit 1 incurred between January development.
I and hiay 31,1985, or about $1.6 million after taxes.
As is explained in Note 9 to the Financial Statements, Under an agreement reached in hiarch 1986 with the in October 1985 the htPUC approved the Seabrook Staff of the hiPUC and the hiaine Public Advocate, in Stipulation, an agreement negotiated among the Com-addition to the non-cash write-off of $1.6 million after pany, the Staff of the hiPUC and the hiaine Public taxes, the Company will reduce its annual general rate Advocate, which resulted in the write-off of 30% of the revenue requirement by $1.2 million if and when the sale Company's December 31,1984 investment in Seabrook to EUA is completed. With this understanding, the Unit 1, with the remaining 70% to be included in the hiPUC Staff and the Public Advocate have agreed to Company's rate base and collected ratably over a 30-year support the Company's application for hiPUC approval period. The Seabrook Stipulation also called for the of the sale.
write-off of 40% of the Company's investment in the Liquidity and Capital Resources cancelled Seabrook Umt 2, with the remaining 60% to be The Statements of Sources of Funds for Plant Addi-included in the Company's rate base and collected ratably over a 7-year period. These write-offs amounted to a tions reflect the Company's liquidity and its requirement total after-tax charge of approximately $17 million to the f r capital resources for 1983 through 1985.
Company's stockholders' equity which resulted in a net With the November 1,1985 implementation of the loss per common share of $1.22 for 1985 and reduced base rate increase pursuant to the Seabrook Stipulation, the balance in retained earnings to $6.9 million at cash provided from operations has increased, and the December 31,1985.
Company's liquidity is expected to show substantial The Stipulation also provides that if Seabrook Unit I unprovement.
is cancelled, the Company will write off 30% ofits post, if the sale of the Company's Seabrook interest is not December 31,1984 investment and recover the remain-c nsummated, the Company's need for external capital ing 70%. If the project is completed, the impact upon the will depend upon the level of expenditures necessary to Company's customers of the investment after Ilecember c mplete Seabrook Unit I and the date when it will 31,1984 will be limited to certain " benchmark rates",
c mmence c mmercial operation and can thereafter be I
whereby the collection of amounts that would otherwise fully retle.ted in the Company's rates. Assuming the unit exceed such " benchmark rates" will be deferred, without is c mpleted within its present cost estimate and in time allowance for carrying charges, for collection in future for the Company to have its post 1984 investment l
periods if and when the cost of power from Seabrook included in customer rates by January 1,1987, the Com-l Unit I becomes less than the benchmark rates.
p ny nticipates the requirement for only a small amount The Seabrook Stipulation and the revised rates imple, f external funds, in the latter part of 1986. Such j
mented in connection therewith became effective as of amounts are expected to be available from short-term November 1,1985.
credit arrangements. Delays and cost increases at the pro-i The benefits that the Company reali:es from the Sea, ject would increase the Company's requirement for brook Stipulation are an ending of the uncertainty con, extern I c pital. The Seabrook project management's cerning the recoverability of the Company's investment target date for commercial operation of Unit 1 is October in the Seabrook project (which investment amounted to 1986. However, delay beyond that date is possible for a over $100 million prior to the write-off), and, with the number of reasons, most notably due to delay in appro-inclusion in the Company's rate base of the recoverable val f the emergency response plans that must be de-J portions of Unit 2 and the December 31,1984 balance vel ped as one of the requirements for the receipt of an
{
of Unit I and the commencement of recovery of those oper ting license from the Nuclear Regulatory 1
Commission.
investments as of November 1,1985, the beginning of a marked improvement in the Company's cash position.
t i
17
Management's Ducunion amunued if the sale of the Company's Scabrook interest is con-maintenance expense increased by only $114,000 in summated under its present phas, the Company would 1984 (due, in part, to the Company's austerity program) have no requirement for external funds in the reasonably as opposed to $2.4 million in 1983. Included in the 1983 foreseeable future.
amount are two non-recurring charges of $784,000. Also if the closing of the sale of the Company's interest in impacting the comparison of operation and maintenance Seabrook took place on June 30,1986, the Campany expense was an increase in bad debt expense from estimates that it would receive about $35 million. Under
$631,000 in 1983 to $1.2 million in 1984. In 1985, bad the terms of the Company's first mortgage indenture, a debt expense was $629,000.
portion of this amount would be deposited with the The $468,000 of amorti:ation of the Seabrook nuctrar indenture trastee, to be released to the Company over units shown in 1985 redects two months of the 30-year time as rroperty additions are certified to the trustee.
and 7-year amorti:ations of the portions of the Com-p ny's investment in Seabrook Units 1 and 2 respec-Revenues tively, being recovered pursuant to the Seabrook Jeneral rate revenue increased by $3.8 million, or 8%,
b"I"I 'I "'
due to the base rate increase effective November 1,1985 Long-term debt interest expense redects the $19.5 mil-as well as a 1.8% increase in KWH sales in 1985. General lion f 12M% first mortgage bonds issued m Juh 1983, rate revenue also increased in 1985 due to the recovery of $695,000 in expenditures related to the Company's
! e variable rate pollution control revenue Imnds issued h
m December 1983 and the $11 million of 17.35% first energy conservation program, as described in Note I to nmrtg ge bonds issued m December 1984.
the Financial Statements. Fuel charge revenues have changed over the periods presented due largely to varia-Impact of inflation tions in fuel costs charged to the Company and then Indation, although moderate in 1984 and 1985, has billed to customers through the fuel cost adjustment.
increased the Company's operating expenses and cost of Fuel charge revenue declined by $1.4 million, or 3%, in capital. In0ation also increase i costs of the Company's 1985 due to the 17% reduction in the fuel cost a,1just-construction program and the replacement ofits plant ment which was implemented on November 1,1985, and equipment. Under the rate making practices pre-concurrent with the base rate increase as well as a 9%
scribed by the regulatory commissions to which the decrease in the fuel cost adjustment effective in April of Company is subject, only the allocation of the Com-1985. As is explained in Note I to the Financial State-pany's historical costs is included in the rate base used to ments, deferred fuel act aunting is employed by the establish the Company's rates. While the rate-making Company. Consequently, changes in fuel prices have a process gives no recognition to the current impact of minimal impact on earnings in0ation on the Company's rate base, it does allow the Company to earn on and recover the increased cost of Expenses sta ti lly f s tlyi c s
d i re es i l
a e
" I S"*""'"
" " " '"
- d
"d"" "I b revenues. Purchased power expense is affected by changes impact nd &m upon the Company.
in a major purchased power contract which provided 95 hiW,60 htW and 25 htW for the imwer years ended i
October 31,1983,1984 and 1985, respectively. The contract provides 25 hlW for the power year ending October 31,1986, at which time it will terminate. In 1983, portions of this power were resold to other New England utilities.
In 1985, other operation and maintenance expense increased by 7.4% even though wages were held at 1984 levels for most of 1985. A $511,000 increase in insu-rance expense and a $481,000 increase in expenses attributable to energy conservation programs contributed to the overall $1.1 million increase in the operation and maintenance expense category. Other operation and 18
BANGOR HYDRO-ELECTRIC COMPANY Ctatzm:nt3 Cf In3Cm3 For the Years Ended December.p, 1985 IW4 1%)
ELECTRIC OPER ATING REVENUES (Note 1):
General rate revenue
$ 52,175,340
$48,297,438
$46,263,378 I
Fuu charge revenue 45,575,464 47,047,810 37,463,677
$97,750,804
$95,345,248
$33,727,055 OP RATING EXPENSES:
Fuel for generation (Note 1)
$45,931,730
$46,431,868
$ 37,195,03 3 Purchased power (Note 8) 12,997,968 12,097,298 13,480,086 Other operation and maintenance 15,343,691 14,275,339 14,161,600 Depreciation and amorti:ation (Note 1) 3,707,582 3,613,273 3,560,074 l
Amorti:ation of Seabrook Nuclear Units (Note 9) 468,016 Taxes -
l Local property and other 2,608,536 2,559,949 2,383,071 l
Income (Note 2) 1,573,458 3,068,744 2,551,246
$82,830,981
$32,046,471
$73,331,110 CPER ATING INCOME
$15,119,823
$ 13,298,777
$ 10,395,945 CTHER INCOME AND (DEDUCTIONS):
Loss on investment in Seabrook Nuclear Units, net of reh,ted income taxes of $10,210,261 (Note 9)
(17,036,752)
Allowance for equity funds used during construction (Note t )
4,775,812 5,211,501 4,062,261 Other, net of applicable income taxes 589,219 190,406 42,497 INC ME BEFORE INTEREST EXPENSE S 3,448,102
$ 18,700,684
$14,500,703
{
INTEREST EXPENSE:
Long term debt (Note 5) 510,137,146
$ 8,452,162
$ 6,704,951 Short-term debt (Note 6) 2,102,804 1,713,470 1,830,192 Allowance for borrowed funds used during construction (Note 1)
(4,729,538)
(4,245,943)
(3,756,754)
S 7,510,412
$ 5,919,689
$ 4,778,389 j
NET INCOME (LOSS)
$ (4,062,310)
$ 12,780,995
$ 9,722,314 CIVIDENDS ON PREFERRED STOCK 1,349,132 1,366,299 1,343,049 EARNINGS (LOSS) APPLICABLE TO GCMMON STOCK
$ (5,411,442)
$ 11,414,696
$ 8,379,265 CARNINGS (LOSS) PER COMMON SH ARE, based on the weighted average number of shares outstanding of 4,450,684 in 1985, 4,448,896 in 1984 and 3,725,358 in 1983 S
(1.22) 2.57 2.25 CIVIDENDS DECLARED PER COMMON SNARE $
.80 1.40 1,58 ne m.,,nninyine naa are an intwat n,,,,,t e< tinandat,, arc,ncnn.
19
13ANGOR HYDRO-ELECTRIC COhtPANY Bal:nce Sheets December 3I, 1985 1954 A' SETS INVESTMENT IN UTILITY PLANT:
Electric plant in service, at original cost (Note 8)
$ 120,588,020
$ 115,435,642 Less - Accumulated depreciation (Note 8) 48,212,297 44,891,792
$ 72,375,723
$ 70,543,850 Construction in progress.
Seabrook Nuclear Unit One, plus related deferred income taxes of $6,203,790 in 1985 (Note 9) 81,267,817 73,876,524 Other 346,182 805,853
$153,989,722
$ 150,226,227 investments in corporate joint ventures (Notes I and 8)-
hiaine Yankee Atomic Power Company 4,743,771
$ 4,764,771 hiaine Electric Power Company, Inc.
124,912 124,900
$ 158,858,405
$ 155,115,898 CTHER INVESTMENTS, principally at cost 1,125,756 1,172,591 CURRENT ASSETS:
Cash 1,451,806 1,803,546 Temporary cash investments (Note 5) 4,083,800 12,122,000 Accounts receivable, net of reserve ($1,000,000 in 1985 and $950,000 in 1984) 9,536,545 9,468,615 Unbilled revenue receivable (Note 1) 4,910,930 4,961,298 Inventories, at average cost:
htaterial and supphes 1,671,105 1,601,202 Fuel oil 883,315 1,673,743 Prepaid expenses 549,429 485,566 Deferred fuel costs (Note 1)
(3,084,042) 1,067,480
$ 20,002,888
$ 3 3,18 3,450 CEFERRED CH ARGES:
Seabrook Nuclear Unit Two, less related deferred income taxes of $2,942,723 in 1985 and
$4,865,651 in 1984 (Notes 2 and 9) 4,571,623
$ 8,095.647 Other 2,868,555 2,806,340 7,440,178
$ 10,901,987 j
$ 187,427,227
$200,37 3,926 I
The am'inhan.ung nfes o'c un inrecal;> art of these hnanaal 'faternc' ts-l l
20
\\
BANGOR HYDRO-ELECTRIC COMPANY 1985 1984 LTOCKHOLDERS' INVESTMENT AND LIABILITIES UAPITALIZ ATION (see accompanying statement):
Common stock investment (Note 3)
S 53,972,052
$ 62,944,041 Preferred stock (Note 4) 4,734,000 4,734,000 Redeemable preferred stock, exclusive of sinking fund requirements (Note 4) 9,100,000 9,400,000 Long-term debt, exclusive of sinking fund requirements and a current maturity in 1984 (Note 5) 81,965,000 82,415,000 Total capitali:ation
$149,771,052
$159,493,041 CUIRENT LI ABILITIES:
Current maturity of long-term debt (Note 5)
S
$ 1,500,000 Notes payable (Note 6) 17,800,000 17,800,000
$ 17,800,000
$ 19,300,000 Other current liabilities -
Current sinking fund requirements S
750,000 750,000 Accounts payable 4,775,894 6,897,684 Dividends payable 1,222,566 995,878 Accrued interest 2,022,667 2,003,598 Accrued current and short-term deferred income taxes (Note 2)
(777,495)
(576,210) l Customers' deposits 151,122 122,853 Accrued pension plan contribution (Note 7) 429,350 191,350 8,574,104
$ 10,390,153
$ 26,374,104
$ 29,690,153 CCMMITMENTS AND CONTINGENCIES (Notes 8 and 9)
DEFERRED CREDITS AND RESERVES (Note 2):
Accumulated deferred income taxes S
8,404,507
$ 9,324,775 Unamorti:ed investment tax credits 2,117,153 1,234,924 Other 760,411 631,033
$ 11,282,071
$ 11,190,732 S187,427,227
$200,373,926 The acunnninyng notes are an intecal urt of thcsc financial staternents.
f l
)
l l
21
BANGOR HYDRO-ELECTRIC CON 1PANY Stat:m:nt3cf C pit:liz ti:n Decernber 31, 1985 1+4 CCMMON STOCK INVESTMENT (Note 3):
Con :non stock, par value $5 per share -
Authori:ed - 7,500,000 shares Outstanding - 4,450,684 shares in 1985 and 1984 S 22,253,420
$ 22,253,420
_ Amounts paid in excess of par value 24,818,570 24.818,570 Retained earnings 6,900,062 15,872,051 3 53,972,052
$ 02,944,041 PRZFERRED STOCK, non-participating, cumulative, par value
$100 per share, authori:ed 250,000 shares (Note 4):
Not redeemable or redeemable solely at the option of the issuer -
7%, Noncallable 25,000 shares authori:ed and outstanding S
2,500,000
$ 2,500,000 4' ef>, Callable at $100, 4.840 shares authori:ed and outstanding 484,000 484,000 4%, Se-ies A, Callable at $110,17,500 shares authori:ed and outstanding 1,750,000 1,750,000 4,734,000
$ 4,734,000 I
Subject to mandatory redemption requirements -
13% Callable at $111.92 in 1985 and $112.46 in 1984 50,000 shares authori:ed and outstanding S
5,000,000
$ 5,000,000 9V7,, Callable at $106.50 in 1985 and $107.00 in 1984 Authori:ed - 30,000 shares Outstanding - 28,000 shares in 1985 and 30,000 shares in 1984 2,800,000 3,000,000 9: v7., Callable at $103.05 in 1985 and $103.67 in 1984 Authori:ed - 20,000 shares Outstanding - 16,000 shares in 1985 and 17,000 shares in 1984 1,600,000 1,700,000 9,400,000
$ 9,700,000 Less - Sinking fund requirements 300,000 300,000 9,100,000
$ 9,400,000 LCNG-TERM DEBT:
First Niorteace Bonds (Note 5)-
34% Series due 1985 S
1,500,000 4% Series due 1988 2,500,000 2,500,000 4'i, Series due 1993 3,500,000 3,500,000 j
6V7, Series due 1998 2,500,000 2,500,000 8'v7, Series due 1999 3,500,000 3,500,000 10W5, Series due 2000 4,500,000 4,550,000 9W7, Series due 2001 2,595,000 2,640,000 Sh% Series due 2003 1,900,000 1,975,000 l
10WI, Series due 2004 6,720,000 7,000,000 15W7, Series due 1996 5,000,000 5,000,000 16WX, Series due 1996 15,000,000 15,000,000 12M% Series due 1998 19,500,000 19,500,000 17.35';, Series Jue 1994 11,000,000 11,000,000
$ 78,215,000
$ 80,165,000 Less - Sinking fund requirements and a current maturity in 1984 450,000 1,950,000
$ 77,765,000
$ 78,215,000 i
Variable rate demand pollution control revenue bon.1 Series 1983 due 2009 5
4,200,000
$ 4,200,000 Total long-term Jebt S 81,965,000
$ 82,415,000 l
Total capitali:ation
$ 149,771,052
$159,493,041 l
l The acco,nninying norcs are an integraf giare of thc5c financhal scarctncnts.
22 l
BANGOR HYDRO-ELECTRIC COMPANY Ctat ment 3 cf Ccuraco cf Funda f;r PI:nt Additirn3 1985 1+4 19M Cources of Funds:
Internal sources -
Operations -
Net income (loss)
$ (4,062,310)
$ 12,780,995
$ 9,722,314 Items not currently requiring or (providing)(unds -
Depreciation and amorti:ation 3,707,582 3,613,273 3,560,074 Amorti:ation of Seabrook Nuclear Units 468,016 Deferred income taxes 889,250 6,283,685 1,336,539 l
Investment tax credit, net 88:',229 18,788 (29,129) l Allowance for funds used during construction (9,505,350)
(9,457,444)
(7,819,015) l Loss on investment in Seabrook Nuclear l
Units, net of related deferred income
{
taxes of $10,210,261 (Note 9) 17,036,752 i
Funds provided from operations S 9,416,169
$ 13,239,297
$ 6,770,783 Other sources (uses) of funds -
Sinking fund requirements 3
(750,000)
(750,000)
(270,000)
Dividends declared (4,909,679)
(7,597,256)
(7,560,052)
Other, net 458,033 939,356 353,304 5 (5,201,646)
$ (7,407,900)
$ (7,476,748)
Chance in net current assets, exclusive of interim financing -
Cash and other temporcry cash investments (Note 5)
S 8,389,140
$ (10,818,802)
$ (1,963,082)
Receivables, unbilled revenue and deferred fuel costs 4,133,960 (835,473)
(608,948)
Other current assets 656,662 (356,202) 452,923 Accrued current and short-term deferred taxes (201,285)
(3,260,466) 1,593,046 Other current liabilities (1,614,764)
(1,490,868)
(2,652,969)
$ 11,363,713
$ (16,761,811)
$ (3,179,030)
Funds available from internal sources S15,578,236
$ (10,930,414)
$ (3,884,995)
External sources -
Notes payable S
$ 15,818,444
$(19,689,695)
Retirement of first mortgage bonds (1,500,000)
(1,000,000)
Proceeds from issuance of -
First mortgage bonds 11,000,000 19,500,000 Variable rate demand pollution control revenue bonds 4,200,000 Preferred stock 5,000,000 Common stock -
Public offerings (900.000 shares in 1983) 12,258,000 Dividend reinvestment plan (34,451 shares in 1984 and 99,624 shares in 1983)(Note 3) 368,876 1,334,283 Funds from external sources S (1,500,000)
$ 26,187,320
$ 22,602,588 Funds Available for Plant Additions S14,078,236
$ 15,256,906
$ 18,717,593 Funds Used For:
Seabrook Nuclear Units (Note 9)
S 9,006,574
$ 9,565,149
$ 13,143,002 Other plant additions 5,071,662 5,691,757 5,574,591 Funds Used for Plant Additions S14,078,236
$ 15,256,906
$ 18,717,593 The aconntunying notes are an inrecal part of these financial statements.
23
BANGOR HYDRO-ELECTRIC COMPANY Ctitam:ntacf R3trin d Ecrninga For the Years Ended December 3 r, 1985 1984 1983 CALANCE AT BEGINNING OF YEAR
$15,872,051
$ 10,688,312 5 8,526,050 ADD - NET INCOME (LOSS)
(4,062,310) 12,780,995 9,722,314
$ 11,809,741
$23,469,307
$18,248,364 DEDUCT:
Cash dividends declared on -
Preferred stock
$ 1,349,132
$ 1,366,299
$ 1,343,049 Common stock - $0.80 per share in 1985,
$1.40 per share in 1984 and $1.58 per share in 1983 3,560,547 6,230,957 6,217,003
$ 4,909,679
$ 7,597,256
$ 7,560,052 CALANCE AT END OF YEAR
$ 6,900,062
$15,872,051
$10,688,312 The accompanying notes are an integral part of thae financial statements.
The Revenue Dollar (in % of Total Dollars)
Where it Came From...
Where it Went...
60 60 50.1 35.8 4g 40 210 20 20 12.1 14.5 10 -N 10 -
1
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7.7 5.4 f
5P 5-
.d y
,f 3.6 3.6 3.0 3 --
3-p>_ "il e
+
i l '
I4 i
gc l
1 - - = - - - -
1-Nsfj N.-
,3
-2 l
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a' r
L M
mm, D Residential B Other Utilities D Fuel and Purchased Power E Common Dividends O Commercial E Street Ughting 5 Wages and Employee Benefits E Other Operating Expenses E Industrial Power E Miscellaneous E Interest and Preferred Dividends O Extraordinary Loss O Public Acencies O Retained Earnings D Taxes E Depreciation and Amorti:ation 24
Ban;2r Hydrc-Electric Company N ta To Financial Statements NOTE 1.
SUMMARY
OF SIGNIFICANT i AZOUNTING POLICIES Electria Operating Revenues Electric Operating Revenues include amounts for elec-chased power costs. See Note 8 for additional informa-tricity delivered to customers during the period, both tion with respect to these investments.
billed and unbilled. Prior to September 1985, a portion of the Company s residential and commercial customers Depreciation of Electric Plant and Maintenance p,g g, were billed on a bi-monthly basis. In September 1985, the billings to these customers were converted to a monthly Der eciation of electric plant is provided using the basis so that all customers are now billed on a monthly straight-line method at rates designed to allocate the orig-basis.
nal cost of the properties over their estimated service I ves. The composite depreciation rate, expressed as a in January 1985, the hiaine Public Utilities Comnu.s-sion ( hiPUC, ) approved a program whereby percentage of average depreciable plant in service, was the Company would formah:e its activities relating approximately 3.1% during the periods presented.
to the promotion of energy conservation. A separate The Company follows the practice of charging to main-rate was established to recover on a current basis the tenance the cost of repairs, replacements and renewals of expenditures related to this program. Over-or under-minor items considered to be less than units of property.
collections resulting from differences between estimated Costs of additions, replacements and renewals ofitems and actual conservation costs for the current period are c nsidered t be units of property are charged to the uti;-
included in the computation of the estimated conserva-ty plant accounts and any items removed are retired tion costs of the subsequent period. As a result, the fr m such accounts. The original costs of units of prop-Company expenses conservation costs when they are rec-erty retired and removal costs, less salvage, are charged to ogni:ed as revenue. Conservation costs not yet billed are "CC"*"I"I'd d'PI II""'
classified on the balance sheet as deferred charges. At Equity Reserve for Licensed Hydro Projects December 31,1985, deferred charges included $68,792 The Federal Energy Regulatory Commission ("FERC")
of conservation program expenditures.
requires that a reserve be maintained equal to one-half of Deferred Fuel Accounting e rnings in excess of a prescribed rate of return on the Under the existing htPUC fuel cost adjustment regula' Company's investment in licensed hydro property begin-tion, the Company is allowed to recover its fuel costs on ning with the twenty-first year of project operation under
' a current basis. The fuel charge is based on the Com' license. As required by an order of the FERC, the equity pany s projected cost of fuel for a twelve-month forward-reserve provided for licensed hydro projects is classified looking period. Over-or under-collections resulting from n Retained Earnings.
! differences between estimated and actual fuel costs for Allowance for Funds Used During Construction the current period are included in the computation of the The hiPUC, which regulates the customer rates that estimated fuel costs of the succeeding fuel adjustment provide about 98% of the Company's electric operating period. As a result, the Company utili:es deferred fuel revenues, requires the Company to accrue AFDC at a accounting. Under this accounting method, fuel costs are rate which reflects the Company's overall weighted cost expensed when they are recogni:ed as revenue. Retail fuel of capital (including short-term debt and the cost of costs not yet expensed are classified on the balance sheet equity allowed in the hiPUC's most recent rate decision as Deferred Fuel Costs. The fuel cost adjustment rate applicable to the Company). In addition, the hiPUC's includes a factor calculated to reimburse the Company or policy has generally been to require the accrual of AFDC i its customers for the carrying cost of funds used to at a " gross rate", which is the weighted cost of capital finance under-collected (deferred) or over-collected fuel without consideration of the tax benefit derived from the debt portion of the capital structure, as opposed to a net-costs.
, Equity Method of Accounting of tax rate (" net rate"), in which such tax effects are The Company accounts for its investments in the deducted from the gross rate. A gross rate is higher than a l
net rate, and results in the accrual of greater amounts of
{
common stock of hiaine Yankee Atomic Power Com' AFDC.
, pany ("hfaine Yankee") and hiaine Electric Power Com' Effective November 1,1985, with the implementation pany, Inc. ("hiEPCO") on the equity method of account-of the Seabrook Stipulation discussed in Note 9, the ing and records its proportionate share of the net earnings of these companies (substantially cJ1 of these Company ceased the accrual of AFDC on that portion of earnings are paid out in dividends) as a reduction of pur-25
4te x Gmtinued its investment in Seabrook Unit 1 (exclusive of nuclear tinue to have its AFDC accrued at a gross rate.
fuel) equal to the investment at December 31,1984, The AFDC rates computed by the Company averaged because, pursuant to the Seabrook Stipulation,30% of 12.9% for 1983,13.2% for 1984 and 13.3% for 1985.
that amount was written off and will not be collected For the period January through October 1985 the rate through customer rates, and the remaining 70% was was 13.5%. For the remainder of 1985, the AFDC rate l
thereafter included in the Company's rate base, to be applicable to the Seabrook investment not in rate base amorti:ed over a 30-year period. In addition, the Sea-averaged 9.4%, and for other investments averaged brook Stipulation provides that AFDC shall accrue on 13.0%.
)
the Company's post-1984 investment in Unit 1, and on As discussed in Note 9 Seabrook Unit 2 was effec-the investment in the initial nuclear fuel for the unit, at a tively cancelled in March 1984. As of April 1,1984, the net-of-tax rate. Other Company construction will con-Company ceased the accrual of AFDC on Unit 2.
N3TE 2. INCOME TAXES The individual components of federal and state income taxes redected in the Statements of income for 1985,1984 and 1983 are as follows:
Year Ended December 31, 1985 tw4 1983 Current:
Federal
$ 1,648,605
$( 1,729,852)
$ 1,694,123 State 697,794 (381,452) 322,049
$ 2,346,399
$(2,111,304)
$2,016,172 Deferred - Short-Term:
Federal
$(1,555,260)
$ (743,822)
$ (593,751)
State (327,667)
(145,579)
(55,808)
$(1,882,927)
$ (889,401)
$ (649,559)
Deferred - Other:
Federal
$(7,512,846)
$ 5,333,137
$1,247,966 State (1,808,165) 950,548 88,573
$(9,321,011)
$ 6,283,685
$1,336,539 investment Tax Credits, Net
$ 882,229 18,788
$ (29,129)
Total Provision
$(7,975,310)
$ 3,301,768
$2,674,023 Credited (Charged) to Other Income 9,548,768 (233,024)
(122,777)
Charged to Operating Expense
$ 1,573,458
$ 3,068,744
$2,551,246 l
l The rate making practices followed by the MPUC vided. It is expected that the taxes payable related to j
permit the Company to recover federal and state income these amounts will be recovered through future rates.
{
taxes payable currently and to recover deferred taxes only As the Company has concluded that Seabrook Unit 2 l
l when the tax law, in effect, requires such treatment or has been effectively cancelled, its investment in Unit 2 when MPUC approval is granted on specific timing was deducted in its 1984 tax return and deferred taxes diffcrences.
were recorded and are shown as a reduction to the asset i
Although this accounting differs from generally in the deferred charge section of the Balance Sheets.
accepted accounting principles followed by non-rate regu-The following table reconciles an income tax provision lated companies, which are required to record deferred calculated by multiplying income before federal income taxcs related to all timing differences, the Company taxes (as reported on the financial statements) by the l
expects that deferred taxes not recorded will be collected statutory federal income tax rate to the federal income l
through customer rates in the future when such taxes tax expense reported on the Anancial statements. The dif. l become payable. At December 31,1985, the Company ference is represented by the permanent reductions and had cumulative timing differences totaling approximately the timing differences on which deferred taxes are not
$19.4 million on which no deferred taxes have been pro-calculated.
1 26
1985 1984 1983 Amount Amount Amount (Dollars in Thousands)
Federal income tax provision (benefit) at statutory rate
$(5,537) (46)%
$7,203 46%
$5,539 46 %
Less permanent reductions in tax expense resulting front statutory exclusions from taxable income:
Dividend received deductien related to earnings of associated companies 265 2
206 1
190 2
Equity component of AFDC 2,197 19 2,397 16 1,869 16 Other 20 40 78 Federal income tax provision before effect of timing differences
$(8,019) (67)%
$4,560 29 %
$3,402 28 %
Less timing differences that are flowed through for rate-making and accounting purposes:
Interest component of AFDC on which deferred taxes are not recorded 1,656 14 1,333 9
1,110 9
Deduction of certain costs (primarily pension costs, payroll taxes and sales tax) for tax purposes that are included in the cost of electric property for book purposes 365 3
352 2
318 3
Deferred interest cost (312)
(2) 69 48 Loss on investments related to the 30% and 40% of Seabrook nuclear units written offin 1985 (3,294) (27)
Amortization of Seabrook nuclear units (55)
(1)
Assets acquired before 1971:
Book depreciation greater than tax depreciation (100)
(1)
(54)
(62)
(1)
State income tax liability deducted for federal income tax purposes 119 1
Other 139 (18)
(331)
(2)
Federal income tax provision
$(6,537) (54)%
$2,878 18 %
$2,319 19 %
The differences between the federal income tax expense As part ofits April 1982 rate order, the MPUC
. reported on the financial statements and the federal allowed the Company to record deferred taxes represent-income tax liability (income tax benefit for 1984) as ing the tax effect ofinterest expense on construction dur-reflected on the Company's tax returns are caused by ing 1981, the test year in the April 1982 rate order, timing differences on which deferred taxes are provided Deferred taxes of $559,884 in 1985 and $671,861 in and recovered through rates. These have been categori:ed both 1984 and 1933 were recorded for this item and are as Deferred Taxes - Other (principally related to deprect-classified as Deferred Taxes - Other, ation) and Deferred Taxes - Short-Term. The Deferred Under the federal income tax laws, the Company
' Taxes - Short-Term have been classified as current liabili-receives investment tax credits on qualified property ties to correspond to the accounting for the related assets additions. Investment tax credits utili:ed are deferred and (deferred fuel costs, portions of unbilled revenue and amorti:ed over the life of the related property. Invest-conservation costs).
ment tax credits available of about $9.1 million have not 27
Gre 2 Omiinued been atili:ed or recorded and, subject to review by the described in Note 9, it will lose $143,000 of investment Internal Revenue Service, may be used prior to their tax credits previously used on its tax returns and will also expiration, which occurs between 1993 and 2000.
lose $5.5 million of investment tax credits not used on its If the Company completes the sale ofits interest in its tax returns but which wodd have been available had the Seabrook investment to Eastern Utilities Associates as sale not been completed.
NOTE 3. COMMON STOCK Through December 31,1982, the Company had an may purchase common stock without payment of brok-employee stock ownership plan which qualified as a Tax erage commissions or service charges. Due to the uncer-Reduction Act Stock Ownership Plan. Annual contribu-tainties arising out of the Company's investment in the tions to the Plan by the Company equal to an additional Seabrook project, the Dividend Reinvestment and Com-1% investment tax credit allowed by federal tax law, less mon Stock Purchase Plan was suspended after the rein-administrative expenses have been made when the vestment of the January 20,1984 dividend payment and associated investment tax credit is utili:ed and have been has not been reinstated. In connection with these plans, in the form of common stock of the Company. The at December 31,1985, the Company had reserved Company also has a Dividend Reinvestment and Com-363,026 shares ofits authori:ed but unissued common mon Stock Purchase Plan through which stockholders stock.
N 3T3 4. PREFERRED STOCK Gencral-Authori:ed preferred stock consists of
$100 per share plus dividends accrued. The Company 250,000 shares, par value $100 per share, of which there must set aside in cash annually (1) on December 1 in are outstanding 141,340 shares. The remaining 108,660 each nar, an amount sufficient to redeem 1,000 shares of authori:ed but unissued shares (plus additional shares the 9WL Preferred Stock, (2) on August 1 in each year, equal in number to such presently outstanding shares as an amount sufficient to redeem 2,000 shares of the 9M%
may be retired) may be issued with such preferences, Preferred Stock, and (3) on January 31 in each year restrictions or qualifications as the Board of Directors commencing with January 31,1989, an amount sufficient may determine. The callable preferred stock may be to redeem a minimum of 2,500 shares of the 13% Pre-called in whole or in part upon any dividend date by ferred Stock, with the option on the part of the holders appropriate resolution of the Board of Directors.
of the 13% series to require the redemption of up to an The 9%%, the 9M% and the 13% series of preferred additional 2,500 shares.
stock are non-voting.
The aggregate annual amounts of preferred stock Rcdcemable Preferred Stock - The 9%% Preferred redempti n requirements f r each f the five years fol-Stock, the 9M% Preferred Stock and the 13% Preferred I wing 1985 are as follows: 1986-1988, $ 300,000 and 1989-1990, $550,000.
Stock are subject to mandatory redemption through the operation of sinking funds at the redemption price of NOTJ 5. LONG-TERM DEBT Under the provisions of the first mortgage bond inden-maturities of the first mortgage bonds for the five years ture, substantially all of the Company's plant and prop-subsequent to December 31,1985 aggregate $18,850,000 erty has been mortgaged to secure the Company's first as follows:
mortgage bonds. Sinking fund requirements and current Sinking Fund Current Requirements Maturities Total 1986 450,000 450,000 1987 2,450,000 2,450,000 1988 2,450,000 2,500,000 4,950,000 1989 4,400,000 4,400,000 1990 6,600,000 6,600,000
$16,350,000
$2,500,000
$ 18,850,000 28
On December 11,1984, the Company issued bank borrowings outstanding under the Company's $30
$11,000,000 of 17.35% first mortgage bonds. In its million revolving credit facility without further hiPUC order approving this transaction, the hiPUC decreed that approval. On February 19,1986, the hiPUC rescinded the Company may not repay any of the $17.8 million of this restriction.
NOTE C.SHORT-TERM BORROWINGS In August 1980, the Company entered into a $30 mil-tive, funds will be borrowed to repay the $17.8 million lion revolving credit and term loan agreement. The obligation now outstanding under the existing credit facil-agreement was amended and restated in February 1984.
ity, and the existing facility will then be terminated. A The Company has negotiated a new revolving credit comparison of the significant provisions between the new and term loan agreement which is expected to be in place credit agreement and the credit agreement existing on by mid-1986. When the new agreement becomes effec-December 31,1985 is as follows:
Credit Agreement Existing at New Credit Agreement December 31,1985 Amount of credit
$22,800,000
$30,000,000 Additional credit permitted outside of the agreements 8,200,000 1,000,000 Total permitted short-term debt
$31,000,000
$31,000,000 Term of revolving credit 3 years from effective date June 30,1987 of agreement Length of term loan 3 years from termination of 3 years from termination of revolvmg credit revolving credit Borrowing costs:
Revolving credit At the option of the Company, 107% of prime rate (105% before LIBO rate + 1% or 103% of June 30,1985) agent bank's reference rate Term Loan At the option of the Company, 109% of prime rate LIBO rate + 1M% or 105% of agent bank's reference rate Annual commitment fee 0.5% of unused credit balance 0.5% of unused credit balance Annual acent's fee
$50,000
$75,000 Due to the impact upon the Company of the uncertain-information in the table below) the Company has ties arising out of participation in the Seabrook project assumed that additional borrowings would not be avail-(see Note 9), since late-1984 the Company's ability to able under such agreement.
borrow additional funds under the existing credit agree-Certain information related to short-term borrowings ment has been uncertain. Accordingly, for some purposes is as follows on next page.
(including financial planning purposes, and including the 29
h c6 connnucJ 1985 1984 1983 Total credit available at end of period
$ 17,800,000
$17,800,000
$30,000,000 Unused credit at end of period
$28,018,444 Borrowings outstanding at end of period -
Under the credit agreement
$ 17,800,000
$ 17,800,000 Under the secondary credit facility (Terminated April 11,1984)
$ 1,981,556 Effective interest rate (exclusive of fees) on borrowings outstanding at end of period 10.2 %
11.3%
10.4 %
Average daily outstanding borrowings for the period
$ 17,800,000
$ 11,460,000
$ 14,143,000 Weighted daily average annual interest rate 11.3 %
14.5 %
12.7 %
Highest level of borrowings outstanding at any month-end during the period
$ 17,800,000
$17,800,000
$25,621,250 N3TE 7. SUPPLEMENTARY INCOME STATEMENT INFORM ATION The Company has a non-contributory pension plan fund was not required or permitted for 1984 or 1985.
covering substantially all of its employees. The plan was The pension expense for 1985 of $238,000 and 1984 of amended effective as ofJanuary 1,1985 to improve the
$191,350 has been computed by reducing the normal benefits of many employees working beyond age 65.
cost by a credit resulting from amorti:ing the current Prior to 1984, the Company funded pension costs overfunding (approximately $1.7 million as of January 1, accrued. The actuarial valuation as of January 1,1984, 1985) over a 10-year period. Pension expense was established that, on the basis of revised actuarial assump-
$517,704 for 1983. Pertinent pension plan information tions aprroved by the actuary, the plan was overfunded.
is as follows:
As a result, under applicable laws, a contribution to the January 1, 1985 1984 1983 The actuarial present value of accumulated plan benefits:
Vested
$ 7,648,000
$ 6,490,700
$ 6,460,000 Non-Vested 130,700 85,600 114,400
$ 7,778,700
$ 6,576,300
$ 6,574,400 Net assets available for benefits
$ 16,918,800
$15,297,000
$ 12,836,300 Assumed rate of return on plan investments 7M%
7M%
6M%
Assumed annual increase of salaries 6M%
6M%
SM%
During 1985, the Financial Accounting Standards ogni:ed for this item in 1985. The health care benefit Board issued new standards relative to employers' costs are expensed when the premiums are paid to insur-accounting for pensions which must be applied in 1987 ance companies for retired union employees and when financial statements. The effects this change in accounting direct benefit payments are made by the Company for the may have on the Company's financial statemen*s bave not other retirees. This expense totaled $155,811 for 1985 been determined.
and $94,917 for 1984.
In addition to pension benefits, the Company provides Depreciation and local property taxes and other taxes certain health care and life insurance benefits to its not based on income which were charged to operating retired emrloyees. Substantially all of the Company's expenses are stated separately in the statements of employees may become eligible for retiree benefits if they income. Rents and advertising costs are not significant.
reach normal retirement age while working for the Com.
No royalty or research and development expenses were pany. The liability for the retiree's life insurance benefit incurred.
(paid directly by the Company)is recogni:ed and Maintenance expense was $3,223,682 in 1985, expensed at the time of retirement. No expense was ree-
$2,599,046 in 1984 and $3,134,441 in 1983.
30
l l
i NOTE O. CAPACITY l The Company owns 7% of the common stock of pursuant to which such utilities have agreed to pay l Maine Yankee and 14.2% of the common stock of MEPCO's costs, based on their relative system peaks, if l MEPCO. Under purchased power arrangements, the MEPCO's revenues from transmission services are not i Company is entitled to purchase 6.9%, or about 58 MW, sufficient to meet its expenses. MEPCO's revenues have l(7.3%, or about 61 MW, before June 1,1983) of the been sufficient to meet its expenses since 1978, and the
! output of Maine Yankee, for as long as it is licensed to Company anticipates that MEPCO's revenues will con.
( operate, and is obligated to pay a like percentage of tinue to be adequate to meet its expenses.
Maine Yankee's costs, including estimated decommission-
'The Company purchases energy pursuant to an agree-
- ing expenses, regardless of the level of electric output.
ment with Boston Edison Company from its Mystic Unit
!The actual cost of decommissioning the plant in the No. 7, a 592 MW plant which can be fueled by either oil ~
- future is uncertain, and the pertinent technology con-or natural gas. Purchases under the contract were at a i tinues to evolve. The Company anticipates that its share level of 95 MW for the power year ended October 31,
]of decommissioning costs will change from time to time 1983,60 MW for the power year ended October 31, las the applicable rates are adjusted accordingly. In early 1984, and will be 25 MW per year through October 31, i 1985, the Company's share of Maine Yankee's annual 1986. The Company's share of non-fuel related expenses ;
! decommissioning expense increased from approximately under this contract was $7.7 million in 1983, $4.7 mil- -
- $126,000 to $270,000 as a result of a stipulation lion in 1984 and $2.6 million in 1985. In~ 1983, portions
- reached in Maine Yankee's rate proceeding before the of the power purchased under this contract were resold FERC.
to other New England utilities.
The Company also expects during 1986 to enter into The Company owns 8.333% (50 MW) of the oil-fired :
an agreement to guarantee its proportionate share of up 600 MW Wyman No. 4 unit. The Company's propor-to $50 million of Maine Yankee's debt issued pursuant to tionate share of the direct expenses of this unit is a nuclear fuel financing arrangement.
included in the corresponding operating expenses in the Several New England utilities, including the Company Statements of Income. Included in the Company's utility and MEPCO's other stockholders (two other Maine utili-plant are the following amounts with respect 'to this unit:
ties) are parties to a transmission support agreement 1
December 31,.
December 31, 1 December 31, 1985 1984 1983 Electric plant in service
$ 16,521,727
$16,488,516
$16,402,443 Accumulated depreciation (3,516,944)
(3,014,103)
-(2,513,665)
$13,004,783
. $13,474,413
$13,888,778 4
1 I
i
+
31
&te 8 OmunucJ Information relating to the operations and tinancial position of hiaine Yankee and hiEPCO is as follows:
hiAINE YANKEE h1EPCO 1985 1984 1983 1985 1984 1983 (Dollars in Thousands)
OPERATIONS:
As reported by investee -
Operating Revenues
$134,785
$128,080 $120,471
$ 85,839
$114,176
$129,717 Depreciation
$ 12,297
$ 12,183
$ 11,735 848 740 $
734 Interest and Preferred Dividends 16,188 19,944 18,124 599 679 774 Other, net 96,421 89,223 84,175 84,286 112,646 128,089 Operating expenses
$124,906
$121,350 $114.034
$ 85,733
$114,065
$129,597 Earnings Applicable to Common Stock
$ 9,879
$ 6,730 $ 6,437 106 111 120 Amounts Reported by the Company -
Purchased power costs
$ 6,936
$ 6,476
$ 5,386 130 159 $
165 Equity in net income (679)
(476)
(468)
(15)
(16)
(l8)
Net purchased power expense
$ 6,257
$ 6,000 $ 4,918 115 143 147 FINANCIAL POSITION:
As reported by investee -
Plant in service
$ 314,392
$295,486 $275,787
$ 20,729
$ 19,874
$ 18,592 Accumulated depreciation (101,630)
(99,306)
(89,037)
(10,979)
(10,151)
(9.410)
Other 157,665 174,895 199,535 9,245 8,750 14,083 Total assets
$370,427
$371,075
$386,285
$ 18,995
$ 18,473
$ 23,265 Less -
Preferred stock 9,055 10,069 10,296 Long-term debt 114,600 121,274 134,044 5,004 7,199 7,777 Other liabihties and deferred credits 178,915 171,597 174,375 13,111 10,394 14,534 Net assets
$ 67,857
$ 68,135
$ 67,570 880 880 954 Company's reported equity -
Equity in net assets
$ 4,682
$ 4,701
$ 4,730 125 125 135 Adjust Company's estimate to actual 62 64 (5) 11 i
I Equity in net assets as reported
$ 4,744
$ 4,765
$ 4,725 125 125 146 32
i N:t3 C. Ceabrook and Other Construction, Commitments and Contingencies Ocn:r:I The Company is a 1.6% participant in the NEPOOL/
what was to have been an identical unit, Seabrook Hydro-Quebec Phase I project, c 690 MW DC intertie Unit 2, which was effectively, although not
.between the New England utilities and Hydro-Quebec officially, cancelled in 1984. The Company first pur-being constructed by a subsidiary of another New Eng-chased a 0.37249% interest (8.6 MW) in the project in land utility, expected to require a total investment of December 1978, and acquired an additional 1.80142 %
about $150 million. The project is estimated to be com-interest (41.4 MW) during the period January 31,1981 pleted in July 1986. He participants will receive their to January 2,1982.
respcctive shares of the anticipated savings from energy The Seabrook project has been the subject of contro-transactions with Hydro-Quebec, and will be obliged to versy since its inception in the early 1970's. Long and pay for their respective shares of the costs of ownership complex proceedings were required to obtain the neces-and operation whether or not any savings are reali:ed.
sary regulatory and governmental approvals, although the The Company is also a 1.5% participant in the necessary approvals to construct the project had been NEPOOL/ Hydro-Quebec Phase 2 project, which obtained and construction was underway by the time the involves an estimated investment of about $600 million Company became a participant in late 1978. The project to increase the capacity of the intertie to 2,000 MW. The has been plagued by lengthy delays, labor difficulties, Phase 2 project is in the licensing and preliminary engi-public demonstrations by opposition groups, changes in neering stage and is scheduled to commence construction regulatory requirements and greatly increased costs. Since in mid-1987 with a target completion date oflate 1990.
the Company became a participant, the cost estimate for As in the Phase ! project, the Company will receive a the project (including AFDC but not including nuclear share of the anticipated energy cost savings derived from fuel) increased from about $2.6 billion to about $9 bil-purchases from Hydro-Quebec and capacity benefits pro-tion (before the cancellation of Unit 2). The cost of Unit vided by the intertiegand will be required to pay its share 1 upon completion is now estimated at $4.56 billion of the costs of ownership and operati~on whether or not (exclusive ofinitial nuclear fuel). Administrative and reg-any savings are obtained.
ulatory proceedings concerning the project are continu-The Company has been involved in preliminary studies ing, including the proceedings before the Nuclear Regula-and licensing activities with respect to additional hydro-tory Commission ("NRC") for the license to operate electric projects which, if all were constructed, would Unit I and efforts at several levels with respect to the require an investment of about $170 million or more. No development of satisfactory emergency response plans.
commitments have been entered into by the Company In early 1984 PSNH suffered a liquidity crisis which with respect to such construction, although the Company led to a construction shutdown and a transfer of project is presently seeking approvals to go forward with one of management from PSNH to a separate division (New such projects as a joint venturer with a development sub.
Hampshire Yankee) under the direction of a committee sidiary of a utility holding company. This project could made up of joint owner representatives. Construction on involve an investment by the Company of as much as an Unit I resumed in July 1984 and, despite funding limita-estimated $7.2 million (including the value of transferred tions throughout the remainder of 1984 and most of assets).
i985, substantial progress was made toward the Other than the Seabrook project, discussed below, and plant's completion. During this time, the ability of PSNH any construction involving Maine Yankee, MEPCO, or and some of the other joint owners (including, at times, Wyman No. 4 (see Note 8), the only construction in the Company) to continue to finance their shares of Sea-which the Company is involved is internal transmission, brook construction costs was uncertain. The uncertain-i distribution and general projects with respect to its facili-ties for most of the joint owners were resolved by the end ties within its service territory. Such construction expen-of 1985. With the issuance of a favorable court decision ditures, which were being held to a minimum as part of a on January 31,1986, the last of PSNH's obstacles to rash conservation program, were about $6.0 million in financing its share was removed, and, with minor excep-1985, and are estimated in 1986 at about $9.0 million.
tions, it appears that the uncertainty concerning the abil-n ity of the joint owners as a group to finance the comple.
"eabrook tion of the project has been largely resolved.
The Company,s construction in progress consists primarily ofits investment in Seabrook Unit 1, a 1150 As of March 1986, Unit I was about 97% complete,
%iW nuclear generatmg umt bemg built in Seabrook, with commercial operation presently scheduled for Mew Hampshire and owned jointly by the Company October 1986, although delays in licensing, due largely to tnd h other utilities, including Public Service Company delays in securing the required emergency response plans, are likely to delay the commercial operation date. The gf New Hampshire ( PSNH ), the utility with the largest interest at 35% The project also includes 33
d Note o cetinucJ cstimate as of hiarch 1986 for the cash construction cost of from the h1PUC or substantial external financings, or a completing Unit I was $294 million (including $69 mil-combination of both, in order to continue to meet its lion for contingencies), and the total investment in the obligations, including Seabrook construction costs.
project at completion (including AFDC and nuclear fuel)
In October 1985 the MPUC approved an agreement is estimated to be $4.76 billion. At December 31,1985, (the "Seabrook Stipulation") entered into by the Com-aftcr deducting the write-off when the Seabrook Stipula-pany, the MPUC Staff, and the Maine Public Advocate, tion was implemented (see below), the Company had providing a comprehensive resolution of the Company's
$75.1 million invested in Seabrook Unit 1 (including Seabrook-related rate making issues before the MPUC nuclear fuel of $3.8 million and AFDC of $26.7 million).
and a resolution of all other issues necessary to establish Assuming the Company does not sell its Seabrook inter-a revised revenue requirement. The Seabrook Stipulation est (see below) and assuming commercial operation has resulted in a base rate increase of $12.4 million, which been achieved by December 31,1986, the Company went into effect (along with a $7.8 million reduction in estimates that its investment (after the 1985 write-offs) in the fuel cost adjustment factor) on November 1,1985.
j Seabrook upon completion will be $85.2 million, includ-With respect to Seabrook issues, the Company agreed i
ing nuclear fuel of $4.1 million and AFDC of $35.9 to write off 30% ofits December 31,1984 investment million.
(exclusive of nuclear fuel) in Seabrook Unit 1, and 40%
CPUC Proceedings and Seabrook Stipulation s inwsunent gcksive of nuclear fuel)in Seabrook, Unit 2. The remammg,<0% ofits investment in Unit 1 is In mid-1984 the MPUC commenced a general investi-being recovered over a 30-year period, and the remaining gation concerning the Maine utilities' involvement in 60% of its Umt 2 investment is being recovered over a 7-Seabrook. The investigation was divided into two phases, year peri d, with rate base treatment of the unamorti:ed Phase 1 dealing with the reasonableness of the continued balances. If Umt 1 is completed and if the Company does investment in Seabrook and Phase 2 dealing with issues relevant to the recovery by the Maine utilities of the n t sell its interest in Seabrook, the Company will be 11 wed to include the remainder ofits prudently invcstment in Unit 2.
In December 1984 the MPUC issued an order in Phase incurred investment in customer rates, subject to the lim-I which, although not final, expressed doubt about the itation that if the power costs from the plant exceed cer-wisdom of continuing with Unit I and mandated that the tain " benchmark rates", recovery of the excess will be Maine utilities seek offers to purchase their Seabrook deferred, without the allowance of carrying costs, for interests. No satisfactory offers were forthcoming, and recovery in later periods if and when such power c sts become less than the benchmark rates. If the MPUC followed up with orders in January and Feb, ruary 1985, asking for the filing of plans by the Maine Unit 1 is cancelled or abandoned prior to completion, utilities for disengagement from the project. Appeals the Company will write off 30% ofits investment (net of were taken from these orders by the Company and the salvage value) incurred in Unit I after December 31, othcr Maine utilities. The Company has since withdrawn 1984, and of its nuclear fuel investment (net of salvage these appeals in light of the negotiated resolution value), and recover the remaining 70% over a 30-year
. described below.
period, with rate base treatment of the unamorti:ed bal-In May 1985 the MPUC issued an order in Phase 2 nce. The Company also agreed in the Seabrook Stipula-concerning the recovery of Unit 2 costs which indicated tion to credit 30% of the non-fuel proceeds of the then-to the Company th'at, if the order were upheld, the Com, envisioned transaction for the sale ofits Seabrook pany would have to write off 40% - 50% of its invest, interest to the benefit of the ratepayers. The Seabrook ment in Unit 2. The Company and the other Maine utili, Stipulation covers a number of other matters, including ties appealed this order (the Company's appeal has now the requirement of MPUC approval of any sale of the been withdrawn), and the Company established a net-of, Company's Seabrook interest.
tsx reserve, as of May 31,1985, of $3.1 million on the The implementation of the Seabrook Stipulation contingency that 40% ofits Unit 2 investment might be brought the Company's Seabrook-related write-offs in unrecoverable. The establishment of this reserve had a 1985 to $17 million after taxes and caused the Company negative impact on earnings of $.70 per common share.
to report a substantial loss for the year. If the proposed sle f the Company's Seabrook interest occurs, a further. ;
In late May 1985, one of the other Maine utilities entered into a stipulation in its then-pending rate pro, fter-tax write-off of $1.6 million would be incurred. In
~
ceeding before the MPUC which included a comprehen, addition, if the sale does not occur and if the cost of -
sive resolution of the issues surrounding that utility's p wer from Unit 1 is substantially greater than antici-Scabrook investment. Shortly thereafter, although it had p ted, the benchmark rate provision of the Seabrook no rate proceeding pending before the MPUC, the Com, Stipulation could cause the deferral of significant pany entered into negotiations with the MPUC Staff and amounts without any provision for the costs of car-other parties. Absent a negotiated resolution, the Com-pany would have required other expeditious rate relief 34
rying such amounts, and could call into question the re-would be effective in 1987 and would require either coverability of the amounts deferred. If Unit I experien-retroactive application to prior financial statement or ces unanticipated additional construction costs or if it cumulative adjustment for the accounting change in 1987 experiences delay in the attempt to achieve licensing for financial statements.
commercial operation, and then it is cancelled or aban-Proposed Sale of Seabrook Interest
. doned without achieving commercial operation, the level In July 1985, Eastern Utilities Associates ("EUA"), a of the Company s post-1984 investment in Umt I that it hi ss chusetts utilits holding company, ofi6ered to pur-
, would be allowed to recover pursuant to the Seabrook S ase the Seabrook interests of the three hiaine utihties h
Stipulation could be subject to challenge. Although con-
- 6e pmject. The terms are essentially identicru (struction costs of completing Unit I appear to be under l control, delays in achieving commercial operation could for each utility, differing only in proportion to their respective Seabrook interests. As proposed in July, l result from the failure to resolve in a timely manner the EUA is to pay $12.6 million for the Company s interest current uncertainties surrounding the necessary emer-ru asured as of Af ay 31,1987, which would reimburse gency response plans. The Company believes the matter the company for all ofits nuclear fuel investment will eventually be resolved and Unit I will achieve com-(about $6 million) and for its investment in construction mercial operation. However, accrual of AFDC during any fmm December 31,1984 to hiay 31,1985 (about such delay could add substantially to the Companv's
$6.6 million). Upon closing, EUA will reimburse the investment in the prcject and cost of power from the project, ahhough the Company does not believe that the Company for its expenditures for its share of Seabrook Unit I construction costs and nuclear fuel costs incurred cost of power from Unit I would be increased to such an extene that amounts deferred pursuant to the benchmark since hi y 31,1985. EUA will also pay an additional rate provision of the Seabrook Stipulation would be ren-
$3.4 milli n by reason of a delay m closing beyond htarch 31,1986. EUA will pay interest at 12.8%, on the dered unrecoverable.
$12.6 million from June 1,1985 until the closing, on the In December 1985, the Financial Accounting Stan-c nstructi n and nucle r fuel reimbursements from the dards Board issued an Exposure Draft entitled "Regu-lated Enterprises - Accounting for Phase-in Plans, date the Company paid such costs until the closing, and n the $3.4 million aggregate of additional payments Abandonments, and Disallowances of Plant Costs" which fmm the time it was determined such amounts would be would amend Financial Standard No. 71, " Accounting p y ble until the closing. In January 1986, the agreement for the Effects of Certain Types of Regulation". The pro-posed accounting included therein would require loss was amenged by increasing the amount payable (for the Company s interest, an increase o@ numon), to med recognition for operating plant disallowances, and plant the termination date of the proposal, and to omit a provi-abandonments would be reRected in the balance sheet at
\\the present value of future recoverable amounts using the sion calling for mdemnity payments to EUA m the event fn ffici l cancellation of Umt 2. The transaction is most recently allowed overall rate of return as the dis-subject to the satisfaction of a number of conditions, and count rate. The Company's accounting for its Seabrook m y be termmated by either party ifit has not taken investment as a result of the Seabrook Stipulation meets these requirements of the Exposure Draft. In addition, p} ace by June 30,1986. For the Company, the most sig-mRcant conditions are MPUC approval on terms satisfac-the Exposure Draft would not allow the deferral of costs t ry t the Company and releases by the other Seabrook related to a phase-in plan for a newly completed plant unless all such deferrals were approved for recovery I. int owners of the Company s obligations under the j int wnership agreement. The Company cannot predict within a 10 year period by the applicable regulatory whether such conditions can be satisfied. In March 1986 agency, such approval to be given at the start of the the Company, the MPUC Staff, and the Maine Pubhc phase-in. This provision as well as the requirement with Advocate agreed that if the sale is consummated the respect to balance sheet recognition at the present value Company would reduce its retail rates by $1.2 million.
of future recoverable amounts could be applicable to the With this understanding, the Staff and the Public Advo-accounting for the recovery of the Company's post-1984 c te have j,omed with the Company in seekmg MPUC investment in Seabrook Unit I due to the benchmark "PP" I
- SI"-
rate limitation described above. If adopted, the proposal e
35 i
NOTE 10. UN AUDITED QU ARTERLY FINANCIAL DATA Unaudited quarterly financial data pertaining to the results of operations are shown below:
Quarter Ended March 31 June 30 Sept. 30 Dec. 31 (Dollars in thousands except per share amounts) 1985 Electric Operating Revenues
$26,701
$22,168
$23,342
$25,539 Operating Income 3,416 3,130 3.146 5,427 Net Income (Loss) 3,161 (219) 3,119 (10,123)
Earnings (Loss) Per Share of Common Stock *
.63
(.13)
.63 (2.35) 1984 Electric Operating Revenues
$23,818
$23,383
$23,923
$24,221 Operating income 3,259 2,800 3.422 3.818 Net Income 3,460 2,340 2,942 4.039 Earnings Per Share of Common Stock *
.70
.45
.59
.83
- Indisidual quarters remparcJ luscJ on udghted aierage cwmon shares outstandmg durmg the yar.
NOTE 11. UN AUDITED INFORM ATION ON THE fiFFECTS OF CHANGING PRICES The following supplementary information is supplied F(_ r this reason fuel inventories are effectively monetary in accordance with the requirements of Financial assets.
Accounting Standards Statement No. 33, Financial Materials and supplies were treated as monetary assets Reporting and Changing Prices (as amended November due to the fact that they are subject to rapid turnover.
1984). This statement requires adjustments to historical The Company believes the historical s ist of this item costs to estimate the effect that changes in specific prices adequately represents its current cost. Income tax (current cost) have had on the Company's results of expense was not adjusted because only historical costs are operations and the stockholders' investment. This data is deductible for income tax purposes.
not intended as a substitute for earnings reported on a Under current rate-making policies prescribed by the historical basis; it does, however, offer sorne perspective MPUC, only the historical cost of utility property is of the approximate effects ofinflation rather than a pre-included in the rate base upon which the Company is cise measurement of the effects.
allowed to earn a return. Therefore, the cost of plant The current cost of plant was determined by indexing stated in terms of current cost that exceeds the historical e:ch major class of plant using the Handy-Whitman cost of plant is not presently recoverable in rates, and Index of Public Utility Construction Costs. Current cost accordingly has been adjusted down to its net recoverable does not necessarily represent the replacement cost of cost.
existing productive capacity since utility plant is not During periods of inflation, the holding of monetary expected to be replaced precisely in kind The current assets such as cash and accounts receivable results in a year's provision for depreciation on the current cost loss of general purchasing power because such items will amounts of utility plant was determined by applying the purchase less at a future date. The holding of monetary 3
Company's depreciation rates to the indexed plant liabilities such as long-term debt results in a gain of amounts. Current cost amounts reflect changes in specific general purchasing power because the amount of money prices of plant from the date the plant was acquired to required to ultimately settle the liabilities represents dol-the present.
lars of diminished purchasing power. The reduction of Fuel inventories, the cost of fuel used in generation, utility plant to net recoverable cost should be offset by and the energy component of purchased power costs have the gain from the decline in purchasing power of net not been restated from their historical cost in nominal amounts owned. This gain results from the Company's dollars. The fuel adjustment clause limits the recovery of substantial use of debt financing and it should be noted fuel and purchased power costs to actual cost incurred.
36
' that this is strictly an economic concept and that such gains will never be reali:ed.
Ctatement of Earnings Adjusted for Changing Prices for Year Ended December 31,1985 (In Thousands of Average 1985 Dollars)-
Current Cost (Loss) Applicable to Common Stock, as reported
$ (5,411)
Erosion of Common Stockholders' Equity Because of Changing Prices:
Cost in excess of the original cost of productive facilities not recoverable in rates as an additional provision for depreciation Reported as an additional provision for depreciation 7,125 Reported as a reduction to net recoverable cost 629
$ 7,754 Excess of specific price increases in the current year over the increase in the general level of prices (1,904)
Total amount not specifically recoverable in rates
$ 5,850 Gain from decline in purchasing power of net amounts owed including preferred stock (3,600)
Net erosion of common stockholders' equity 2,250 (Loss) Applicable to Common Stock, as adjusted
$ (7,661)
The Statement of Earnings (1 oss) Adjusted for Chang-provide necessary financial resources. This further ing Prices reveals an increase in the reported net loss exposes the Company to the effects ofinflation in the when depreciation expense is adjusted for changes in spe-form of increased financing costs. Consequently, the cific prices. As noted earlier, the regulatory process limits Company incurs a purchasing power loss which can only the amount of depreciation expense recoverable through be overcome by adequate rate relief through the regula-revenues to the historical cost of the Company's invest-tory process. While the rate-making process gives no ment in utility plant. This level of depreciation produces recognition to the current cost of replacing property, cash flows which are inadequate to replace property in plant, and equipment, based on past practices the Com-future years or to preserve the purchasing power of -
pany believes it will be allowed to earn on the increased common equity capital invested. As a result, the Com-cost ofits net investment when replacement facilities are
.;pany must increasingly rely on the capital markets to placed in service.
l t
37
Five Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices (In 1985 Dollars)
Year Ended December 31, 1985 1984 1983 1982 1981 (Dollars in Thousands Except Per Share Amounts)
Operating revenues:
Historical, as reported
$ 97,751
$95,345
$33,727
$S0,342
$80,637 Adjusted for general inflation
$ 97,751
$98,747
$90,405
$89,603
$95,379 Current cost information:
- Earnings (Loss) applicable to common stock adjusted for additional depreciation
$(12,536)
$ 4,599
$ 2,238 174 Earnings (Loss) per share applicable to common stock adjusted for additional depreciation
$ (2.82)
$ 1.03
.60
.06 Exces of increase in specific prices over increase in general price level
$ 1,904
$ 1,966 431
$ 4,133 General information:
Gain from decline in purchasing power of net amounts owed *
$ 3,600
$ 3,548
$ 2.959
$ 3,119 Common stockholders' investment at year end
- Historical, as reported
$ 53,972
$62,944
$57,391
$41,794 Adjuste ' for general intlation
$ 53,972
$65,190
$61,968
$46,611 Dividends declared per share Historical, as reported
.80
$ 1.40
$ 1.58
$ 1.54
$ 1.52 Adjusted for general inflation
.80
$ 1.45
$ 1.71
$ 1.72
$ 1.80 High bid price per share in Decen.. -
Historical, as reported
$ 10.25
$10.625
$14.125
$ 13.25
$ 10.75 Adjusted for general inflation
$ 10.25
$11.00
$15.25
$ 14.78
$ 12.72 Average consumer price index 322.2 311.1.
298.4 288.9 272.4
- Inforrnation not reawred for yean t"wr w 19h-
/
38
Auditors' Report To the Stockholders and Board of Directors of Bangor Hydro-Electric Company:
We have examined the balance sheets and statements of capitali:ation of BANGOR HYDRO-ELECTRIC COhiPANY (a hiaine corporation) as of December 31,1985 and 1984, and the statements ofincome, retained earnings and sources of funds for plant additions for each of three years in the period I
ended December 31,1985. 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 auditors' report dated February 14,1985, our opinion on the 1984 and 1983 financial statements was qualified as subject to the effect of such adjust-ments, if any, as might have been required had the outcome been known of uncer-tainties relating to the recovery of the Company's investments in Seabrook Unit I and Seabrook Unit 2. As explained in Note 9, during 1985 the Company obtained approval by the hiPUC in a stipulation which provided for recovery in rate base of a substantial amount ofits investments as of December 31,1984 in Seabrook Units 1 and 2 and the write-off of the remainder amounting to approx-imately $17 million after tax. The stipulation also specified the regulatory treat-ment of amounts invested in the Seabrook Units subsequent to December 31, 1984 if Seabrook Unit I were to be cancelled, if the Company were to sell its investment in the Seabrook Units or if Seabrook Unit 1 is completed and com-mences commercial operations. The Company has decided to sell its interest in I
the Seabrook Units if all regulatory and other approvals necessary to fulfill the terms of the purchase agreement are obtained. Even if the sale is not consumated, events in 1985, as discussed in Note 9, indicate it is probable that Seabrook Unit I will be completed and placed in commercial operation at a cost which the Com-pany would be able to recover ultimately through the rate treatment prescribed in the stipulation. Accordingly, substantial uncertainties have been resolved and our present opinion on the 1984 and 1983 financial statements, as presented herein, is no longer qualified.
In our opinion, the financial statements referred to above present fairly the finan-cial position of Bangor Hydro-Electric Company as of December 31,1985 and 1984, and the results of its operations and its sources of funds for plant additions for each of the three years in the period ended December 31,1985, in conformity with generally accepted accounting principles applied on a consistent basis.
Boston, hiassachusetts ARTHUR ANDERSEN & CO.
{
January 31,1986 (except with respect j
to Seabrook project matters discussed l
in Note 9, as to which the date is l
hiarch 19,1986) 1 39
CIX YEAR CTATILTICAL CUZM ARY FROM 1930 THROUGH 1985 seas i+4 i*n i+:
i+t ne TOTAL ASSETS (000's)
S 187,427
$ 2N.374
$ 172.620
$ 146,732
$ 126.503
$ W 849 CLE!TRIC PLANT (000's)
Tml Elurrw Plan:
5 207,070
$ 2N.0LV
$ IW.035
.$ 164.290
$ 140.064
$ 10M.696 Derreuarkm Reserve 48,212 44.892 41.MM8 59.124 36.324 33.929 Net Eintnc Plant S 158,858
$ 155.116
$ 144.147
$ 125.166
$ 103.740
$ 74.767 C APITALIZ ATION (000's)
Short-Term Debt S 17,800
$ 17.800 l.982
$ 21,671
$ 12.MN
$ 12.100 leng-Term Delw 81,965 82,415 73.365 50.835 51,005 32,175 Redeemable PreferrcJ Stock 9,100 9.4N 9.700 4.800 4.900 5.000 PreferreJ Shx k 4,734 4.7 14 4.7 34 4.734 4,734 4.7 34 Gwnmon Equity
$ 3,97 2 62.944 57,391 41.794 31,966 27,317 Total S 167,571
$ 177.295
$ 147.172
$ 12 3.8 34
$ 105,405
$ N!.326 CAPITAL STRUCTURE RATIOS (%)
Short. Term Debt 10.6%
1020 1.3 t.
17.5 %
12 2 %
149%
long-Term Debt 48.9 46 5 49 9 41.1 48.4 39.5 Pre (crred Stock 8.3 80 9.8 7.7
- 9. I 12.0 Comnum Equiry 32.2 35.5 39.0 33 7 30.3 33 6 Total 100.0%
1000L INhb 100St 100f L 10000 SUMM ARY OF OPER ATIONS (000's)
Oprarmg Revenue S 97,751
$ 95.345
$ 83.727
$ 80.342
$ NO,637
$ 66.694 Fuel & Purchased Power 58,930 58,529 50,698 52.358 57,466 45.094 Ogration 6a Mamtenance 15,344 14.275 14.162 11.786 10.541 9.015 Depreciaram 56 Amortuatmin 4,176 3.613 3 %)
3.500 3,413 3.111 Tases 4,181 5.629 4.9 34 3.N4 1.499 2.796 Other income (Expenses) (uxl. equiry AFDC)
(11,672)*
5.402 4.128 t.976 329 (11)
Interest Exrerne inct of borrowed AFDC) 7,510 5.920 4.779 5.258 4.121 3.981 Net tncome(Im)
$ (4,062) *
$ 12.781
$ 9.722 6,412 3.926 2.on6 COMMON STOCK Number of Stockho!Jers (Year End) 10,426 10,164 11.077 9.446 8.263 7,653 Shares Outstartimg (Year End) 4,450,684 4.450.684 4.416,233 3.416.609 2.608.773 2.08 3.6N Shares Outstandma ( Average) 4,450,684 4.441896 3.725,358 2.842.862 2.226,718 1.833,979 Earnmus tlow) pr Share S(1.22)
$2.57
$2.25
$2.00
$1.4 3
$1.06 DnklenJs DeclarcJ rer Share S.80
$1.40
$1.58
$154
$1.52
$1.52 Pavout Ratni (65.6)%
54.5 %
70.2%
77DL 106.3 %
14345 Book Value rer Common share
$12.13
$1414
$1300
$12.21
$1125
$13.11 PRODUCTION SOURCES IN KWH (000's)
HvJro Generatam (Gimpan5 )
207,823 226.479 231.077 229.094 239.855 228.038 Nuclear Generation (Maine Yankee) 368,302 353139 402.&M 329,583 379.659 320.626 Fml Fuel Generatk n (Cornpeny) 166,334 157.651 134.654 144.014 157.2N ~
184,lM6 Fossil Fuel Generarairi (PurchaseJ Power) 772,012 737.641 643.469 668.597 605,690 689.M55 Tml Generated 66 PurchascJ 1,514,471 1.474.910 1.412.008 1,371.288 1,382.404 1.422,705 f ALES IN KWH (000's)
Residennal 445,524 430.541 411,389 4 % 210 383.691 394.114 Commercial 331,816 325.902 312.364 296.974 295,733 2 6.924 Industnal 563,759 559.262 536,916 515.349
'547.837 578.934 Other 42,537 43.475 43.013 42,336 41.492 39.623 Total 1,383,636 1.359.180 1,303.682 1.260.869 1.268,753 1.309.595 Total Non-Interruptible Sales 1,185,790 1.154.178 1,103,810 1.091,594 1.063.847 1.065,175 REV MUE BY CUSTOMER CLASS (000's)
ResiJennal S 38,505
$ 36.141
$ 32.244
$ 31.187 5 28.594
$ 24,102 Commercial 26,794 25.788 22.795 21.434 20,699 16.871 Induernal 29,536 29,458 25.151 24.767 28.002 23,104 Other 3,271 3.364 3.108 2,913 2.788 2.245 Total S 98.106
$ 94.751
$ 83.298
$ 80.301
$ 80.083
$ 66.322 Total Non-Interrupable Sales S 89,275 5 85.359
$ 75.318
$ 73.2 %
$ 70,626
$ 57,579 RESIDENTIAL CUSTOMER DATA Average Number of Customers 71,067 69.730 68.472
. 67,341 66.606 65.768 Kikmart4 tours per Customer 6,269 6.174 6.003 6.0 32 5,805 5,998 Revenue per Customer
$ 541.81
$518.30
$470.91
$463.12
$429.30
$ 366.47 Revenue per Kilowart-Hour 8.64 c 8.394 7.844 7 684 7.454 6.124 '
EYlTEM DATA Net system Capahhty ar Time o(Peak (MW)(Firm) 294.66 294.66 289.66 268.99 273.23.-
280.17 System reak DemanJ (MW)(Wmrer reak) 242.14 24302 233 99 234 42 216.39 221.20 Reserve Margm at Time of Peak 21.7%
21.2%
23.8%
14.7 %
26.3%
26.7 % i System load Factor 65.2%
63.7%
68.9 %
66.8 %
72.9 %
73.4 %
- inchales loss of SI7.04M tS183 pee ensumon slwel de em l=sce e se bead % dew L,uss isee Nee 9 hnencel 3
I 40
l l
THE ANNUAL MEETING The annual meeting of stockholders of the Company will be held on Wed-nesday, May 21,1986 at 10:00 A.M.
.at the Bangor Civic Center,100 Dut-ton Street, Bangor, Maine.
OT3CK TRANSFER AGENTS Norstar Bank of Maine,2 State Street, Bangor, Maine 04401; Morgan Guar-anty Trust Company,30 West Broadway, New York, New York 10015 (common stock only).
REll3TR ARS OF STOCK The Merrill Trust Company, Exchange Street, Bangor, Maine
.04401; Fidata Trust Company, New York, Fort Lee Executive Park. One Executive Drive, Fort Lee, N.J. 07024 (common stock only).
FCRM 10-K The Company will provide without charge to any stockholder a copy of Form 10-K for the year 1985 as filed with the Securities and Exchange Commission. Requests for copies of the Form 10-K should be directed to the Stockholder Services Department of the Company, P. O. Box 1599, Bangor, Maine 04401-1599.
Graphic Design - Joanna hmg, Fred Ayer Photography -Joanna Young Printer - Knotelton 8 McLeary
I I
New Hampshire Electric Cooperative, Inc.
i esA d Eewt TO THE MEMBERS DIRECERS (for terms expiring) 1986 1987 1988 Fletcher Adams, Plymouth, Treasurer Edwin N1oulton, hieredith, Secretary James Page, Benton Fzra N1 ann, Woodsville, Vice-President Arthur Wcdleigh, Ashland Ted Putnam, Charlestown Gail F. Paine, Intervale Dennis Fenton, Andover, President Roger Wingate, hiirror lake Grace H. Bean, Waterville Valley Albert E. Carlisle, Tilton SIANAGER AUDITOR ATE RNEY John Pillsbury hiulrennan, Tyrrel & Gleason hiayland H. Alorse TO THE NIEN1BERS:
l 1985 was one of growth for your Cooperative. As shown elsewhere in this report, g i il :<
total sales of kilowatt-hours, per capita use of electricity, peak demand for electricity L
'f l
and the number of new members taking service from the Cooperative all increased during the year.
Growth registered 20 percent or more in some areas served by the Cooperative, reflecting the steady expansion that has made New Hampshire the fastest growing s
state in the northeast.
Your Cooperative has worked with its members to urge the wise use of electricity.
~
lead management, home energy audits and use of our newsletter to promote
' conservation has paid off.
A The strength of the economy in the state and New England has produced strong growth of sales despite these conservation efforts which your Co-op along with several utilities in the area have promoted.
i The power supply that meets the requirements of our members is generated by New England utilities which deliver to the Cooperative at more than two dozen delivery points. Each of the generating companies has its own blend of generation - oil, coal, water power and nuclear - but the New England Power Pool plans and operates the supply for the region. The New England mix is about 35% nuclear.
To achieve savings for members, the Cooperative in the early 1970's entered into a capacity contract with the hiaine Yankee Nuclear Plant which binds us to meet a percentage of its annual costs and which guarantees to deliver to the Cooperative the same percentage of the power generated. This power is by far the least expensive we receive.
During 1985 the construction of the Seabrook Nuclear Plant continued which brought the plant to 95% completion at the end of the year. It is expected that the plant will be completed this year.
Your Cooperative is owner of about 2% of the Seabrook plant. Its ownership contract permits it to sell back its interest for a period of time up to ten years to P.S.N.H. The Cooperative will exercise this " sell back" option in any year that by doing so will save money for members.
If Seabrook doesn't operate because of political opposition, the Cooperative will lose its imestment, and will have to obtain substitute power in addition to repaying the money borrowed for Seabrook.
If Seabrook is given its license to operate, its costs will be reflected in rates. The amount of the rate increases has not been set, but it is expected that a " phase-in" approach will be taken to spread the increases over several years. Since the Cooperative didn't buy into Seabrook until 1981 and we were able to finance our share of Seabrook with lower-cost Federal Finance Bank loans, our cost for Seabrook will be less than Seabrook generation owned by our other wholesale suppliers. -
NEW hah 1PSHIRE ELECTRIC COOPERATIVE, INC.
N(yl'E 'IO FINANCIAL STATEhlENT STATUS OF THE COOPERATIVE'S PARTICIPATION IN THE SEABROOK NUCLEAR PLANT The Cooperative, with a 2.17391 percent ownership interest, is a participant with fifteen other New England utilities in the Seabrook, NH nuclear generating plant; a two unit facility which has been under construction since 1976 with Public Service Company of New Hampshire (PSNH) as lead owner.
In September of 1983, construction of Unit 2 was reduced to the lowest possible level and in hfarch of 1984 the joint owners agreed to suspend construction on this Unit. Current expenditures on Unit 2 are at the minimal level required to preserve and protect the unit. The Cooperative's 1985 share of these costs was $39,831. There continues to be no viable plan for the completion of the construction of Unit 2. In December of 1985, the Joint Owners initiated a study to evaluate various options for this Unit. The Cooperative's total cost of Unit 2, including interest charges, is approximately
$12,146.000. This amount is included in the construction work in process category under utility plant on the balance sheet.
The Cooperative future plans, subject to regulatory permission, is to recover their costs uver a period of years through rates. The current New Hampshire State Laws prohibit these costs being included in rates, therefore legal action on this issue is anticipated in the future.
Early in 1984, PSNH experienced a serious liquidity crisis that threatened to cause the company to seek protection under the Bankruptcy code if the situation was not promptly relieved. As a result, in April, construction of Seabrook I was suspended for an indefinite period.
In May of 1984, the combined joint owners of the Seabrook Nuclear project adopted a resolution endorsing a financing plan for completion of Unit I. In June the Joint Ownership Agreement was amended to permit, subject to necessary regulatory approval, the transfer of responsibility for completion of the construction and operational control of the Seabrook plant from PSNH to a new entity, to be known as the New Hampshire Yankee, a division of PSNH. Upon receipt of all regulatory approvals, New Hampshire Yankee will become a separate corporate entity. The Cooperative's ownership percentage will remain at 2.17391%.
At December 31,1985, Unit I was estimated to be approximately 95% complete. All of the approvals and permits from various state and federal regulatory bodies required for completion of construction have been obtained with the exception of one of the Joint Owners (Fitchburg Gas & Electric Light Company - ownership.86519%). All of the other owners are currently fulfilling their contracted commitments to pay their share of construction costs on a timely basis. However there have been restrictive rulings by various state regulatory agencies as to financing and also to a possible forced sale of ownership by the three Maine Seabrook Joint Owners. These rulings are currently under appeal to higher courts.
Receipt from the Nuclear Regulatory Commission (NRC) of an operating license is necessary to commence commercial operations. In order to obtain this license, the appropriate state agencies in New Hampshire and Massachusetts along with the municipalities within a ten mile radius of the plant have to develop emergency response plans. These plans are subject to approval by the NRC. New Hampshire's plans have been submitted, however Massachusetts has not forwarded their plans. There is active opposition by intervenors in court cases as to the adequacy of these plans.
The Cooperative has invested $90,149,700 in Unit I construction and related nuclear fuel as of December 31, 1985.
The total cost of the Cooperative's investment in both Units will be in the range of $122,950,000 to $140,300,000 based upon management's estimated cost projections. The basic assumptions of these projections are forecasts estimating the date and cost of Unit l's completion. New Hampshire Yankee's more favorable projection is October 31 1986 while the joint owners' projection for financing purposes only is October 1,1987.
l The financing on this project will be by a Rural Electrification Administration (REA) guaranteed loan with the Federal Financing Bank (FFB). The interest rate of the loan will be based upon FFB's established rate at the time of each advance. The maturity of each advance shall not be less than two years nor more than thirty-four years, such period to be designated by the Cooperative at time of advance. REA has approved a construction loan of $186,250,000 for both Unit I and 11 and also a 5 percent $500,000 loan for transmission support payments during the construction period.
NEW HANIPSHIRE ELEC1RIC COOPERATIVE, INC.
Several years ago your Board established a committee system to allow Board members to be imulved in more detail with spcific areas of Co-op activities. Established Committees are Policy, Communication, Energy, Finance and Personnel and Proprty. All conunittees meet on an as needed basis. I encourage members with problems which need Board assistance to contact these committees.
In September of 1985 Whitman Ide of Belmont died suddenly while on a fishing trip. Whit was a valuable member of the Board and contributed much to the successful operation of your Cooperative. Albert Carlisle of Northfield was named as his replacement and has been nominated by the nominating committee to continue to serve as a board member.
l Grace Bean of Waterville Valley is not seeking re-election to the board and the nominating committee has selected Eldwin I
Wixson as her replacement hirs. Bean was the first woman to be elected to the Board membership. She has done an outstanding job as a board member, particularly in seeking better communication with the membership. I know her efforts are greatly appreciated by Co-op members.
Any organization measures its success by the ability and dedication of its employees. The number of Cooperative employees has stayed about the same over the past decade while membership and miles of line have increased. The men and women who work for the Cooperative do an exceptional job and mail received from the membership attests that their effort is appreciated.
The owners of the Cooperative are the members served by the Cooperative. With a franchise to supply the unserved areas of the state, your Cooperative has grown from its inception in 1939 to serve 50,000 meters from the Canadian border to the southernmost counties of the state.
The directors you have elected have depended upon the support and assistance of the members which has been constant. I thank you on behalf of the board. I hope you will be able to attend the Annual hiceting on June 3 in Plymouth. If you cannot attend, please feel free to write me or any Board Atember with your suggestions.
Please take time to cast your ballot. Your vote does count and your continued support is needed.
l Yours very truly,
/
Dennis E. Fenton, President i
AUDIT REPORT The annual audit of records was made by hiulrennan, Tyrrel & Gleason,88 Nashua Road, Route 102, Londonderry, NH 03953. Copies of the audit report are on file with the New Hampshire Public Utilities Commission, Concord, New Hampshire, the Rural Electrification Administration, Washington, D.C. and the Cooperative Office, Plymouth, NH.
1 GENERAL STATISTICS 1985 1984 1983 1982 1981 hiaximum kw Demand For System 116,156 107,750 94,009 97,962 105,438 Load Factor 45.4 %
44.8 %
47.9 %
45.6 %
41.5%
Number of Employees 179 177 176 177 176 Number of Customers Per Employee 280 271 264 257 253 Total hiiles of Line - End of Year 4,136 4,073 4,027 4.007 3,958 Number of New Services Added During Year 1,987 1,757 1,492 1,209 1,345 Uncollectible Accounts Written Off During Year
$130,393
$121,341
$121,084
$91,694
$88,763 Oper. & hiaint. Costs Per hiile of Line
$458
$387
$400
$377
$317 Consumer Accounts Expense Per Customer
$21
$21
$20
$18
$18 TAX EXPENSE:
1985 1984 Property Taxes
$740,854
$M8,348 U.S. Social Security - Unemployment Taxes
$6,126
$5,720 U.S. Social Security (FICA) Taxes
$184,922
$165,323 N.H. Unemployment Taxes
$65
$5,563 N.H. Franchise Tax (1% Gross Revenues)
$3M,768
$349,676 hiiscellaneous Taxes
$0
$247 Total Taxes
$1,2%,735 ~
$1,174,877 _ _ _
y NEW hah 1PSHIRE ELECTRIC COOPERATIVE, INC.
STATEAIENT OF INCOME AND EXPENSE December 31 OPERATING REVENUES:
1985 1984
~
Residential Sales
$ 23,697,762
$ 23,021,012 Commercial & Industrial Sales 11,878,035 11,348,943 Street & Highway Lighting Sales 247,033 255,569 Sales For Resale - Vermont 0
289 Rents From Electric Property 426,030 420,739 Miscellaneous Electric Revenues 342,697 306,297 NH Franchise Tax Collection 361 847 1
TOTAL OPERATING REVENUES
_$36,953 404
_$35,352149 OPERATING EXPENSES:
Purchased Power
$ 24,295,033
$ 23,652,507 Transmission Expense 9,486 6,297 Distribution Operations & Maintenance Expense 1,883,403 1,569,980 Consumer Accounts Expense 1,030,610 1,030,529 Administrative & General Expense 1,954,413 1,881,747 Depreciation Expense 2,2 %,495 2,130,813 Tax Expense 1,2 %,735 1,174,877 Other Expense 44,043 33,i12_
TOTAL OPERATING EXPENSES
_$3_2 810,_218
$31,479,862 1
NET OPERATING INCOME
$4,143,186
$3,872,987 OTHER INCONIE AND DEDUCTIONS:
Interest income 695,678 704,396 Income From Leased Property 35,542 35,542 Income From Job Work Sales 10,442 67,513 Miscellaneous Other Income 0
149 Leased Property Expense (9,482) <
(9,357)
Job Work Sales Expense
($9,536).
($59,048)
TOTAL OTHER INCOME AND DEDUCTIONS - NET
$722,644
$_739,19_5 INCOME BEFORE INTEREST CHARGES
$4,865,830 4
$4,612,182 INTEREST CHARGES:
Interest On Long Term Debt
$ 12,765,655
$ 10,805,728 Amortization Of Debt Discount & Expense 8,275 8,119 Other Interest Expense 57,549 46,547 Allowance For Funds Used During Construction (Seabrook, Unit I)
_($_8,770,536) -
_($7,525,547)
NET INTEREST CHARGES
$4 M 943
$3,334,84_7 NET INCOME
$804,887
$1,277,335 i
Capital Credits Allocated to Each Patron At Percentage Rate to Revenue 2.265 %
3.563 %
Capital Credits Assigned Accumulatively To End of Year
$7,506,390
$6,701,503
NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
HISTORICAL STATISTICS 1985 1984 1983 1982 1981 KILOWATT-HOUR SALES:
Residential 275,972,948 260,603,202 236,555,020 238.844,606 232,288.931 Commercial & Industrial 142,121,697 131,640,731 122,917,703 116,572,515 118,725,012 Street & Highway Lighting 1,386,074 1,384,467 1,375,892 1,379,360 1,385,075 Sales for Resale 0
5.268 19,NI O
O TOTAL 419,480.719 393,633,668 360,867,656 356,796,481 352,399,018 Increase / Decrease 6.57 %
9.08 %
1.14 %
1.25 %
4.15 %
REVENUES FRON1 SALE OF KILOWATT-HOURS:
Residential
$23,697,762
$23,021,012 $21,082,551 $20,014,777 $19,242,371 Commercial & Industrial 11,878,035 11,348,943 10,688,150 9,557,806 9,528,751 Street & Highway Lighting 247,033 255,569 255,634 237,681 238,621 Sales for Resale 0
289 1,064 0
0 TOTAL
$35,822,830
$34,625,813 $32,027,399 $29,810,2M $29,009,743 Increase / Decrease 3.46 %
8.11 %
7.44 %
2.76 %
26.34 %
AVERAGE REVENUE PER KILOWATT-HOUR SOLD:
Residential
$0.0859
$0.0883
$0.0891
$0.0838
$0.0828 Commercial & Industrial 0.0836 0.0862 0.0870 0.0820 0.0803 Street & Highway Lighting 0.1782 0.1846 0.1858 0.1723 0.1723
(
Sales for Resale 0
0.0549 0.0559 0
0 TOTAL
$0.0854
$0.0880
$0.0888
$0.0835
$0.0823 Increase / Decrease
-2.95 %
-0.90 %
6.35 %
1.46 %
21.24 %
AVERAGE NUN 1BER OF CUSTONIERS:
Residential 43,199 41,402 40,142 39,289 38,426 Commercial & Industrial 4,921 4,623 4,401 4,245 4,053 Street & Highway Lighting 40 40 42 42 42 Sales for Resale 0
1 1
0 0
TOTAL 48,160 46,066 44,586 43,576 42,521 Increase / Decrease 4.55 %
3.32 %
2.32 %
2.48%
2.78 %
AVERAGE KILOWATT-HOUR USE:
Residential 6,388 6,294 5,893 6,079 6,045 Increase / Decrease 1.49 %
6.8 %
-3.06 %
.56%
.54 %
KILOWATT-HOURS PURCHASED (BY VENDORS):
Public Service Co. of NH 406,721,437 370,031,713 337,193,053 346,460,755 329,773,557 Green Mountain Power Co.
1,641,600 1,586,700 1,502,400 1,512,300 1,523,100 New England Power Co.
4,888,900 4,617,600 4,512,200 4,663,300 4,490,800 Central Vermont Public Service Corp.
9,527,540 9,394,580 8,819,800 8,004,780 8,0M,060 Maine Yankee Atomic Power Corp.
39,264,800 37,642,400 42,021,900 33,179,600 38,219,700 Other Suppliers 14,400 0
0 0
1.092,800 TOTAL 462,058,677 423,272,993 394,649,353 393,820,735 383,164,017 Increase / Decrease 9.2 %
7.4 %
0.1 %
2.8%
1.7 %
COST OF KILOWATF-HOURS PURCHASED:
Public Service Co. of NH
$22,561,629
$21,516,670 $19,616,495 $20,579,337 $20,338,882 Green Mountain Power Co.
105,337 60,219 59,690 56,928 56,416 New England Power Co.
277,215 277,921 2M,572 256,034 271,818 i
Central Vermont Public Service Corp.
535,656 499,915 476,601 377,822 396,671 Maine Yankee Atomic Power Corp.
1,075,168 1,031,175 902,162 872,797 839,970 Other Suppliers 611 0
0 0
53,413
. TOTAL
$24,555,616
$23,385,900 $21,319,520 $22,142,918 $21,957,170 Increase / Decrease 5.0%
9.7 %
-3.7 %
0.8%
22.4 %
AVERAGE COST FER KWH PURCHASED POWER:
Public Service Co. of NH
$0.0555
$0.0581
$0.0582
$0.0594
$0.0617 Green Mountain Power Co.
0.0642 0.0380 0.0397 0.0376 0.0370 New England Power Co.
0.0567 0.0602 0.0586 0.0549 0.0605 Central Vermont Public Service Corp.
0.0562 0.0532 0.0540 0.0472 0.0492 Maine Yankee Atomic Power Corp.
0.0274 0.0274 0.0215 0.0263 0.0220 Other Suppliers 0.0424 0.0000 0.0000 0.0000 0.0489 TOTAL
$0.0531
$0.0553
$0.0541
$0.0562
$0.0573 Increase / Decrease
-4.0 %
2.2 %
-3.7 %
-2.0 %
20.4 % a.
NEW HAMPSHIRE ELECTRIC COOPERATIVE, INC.
BALANCE SHEET ASSETS December 31 UTILITY PLANT Electric Plant in Service
$ 70,187,252
$ 65,208,090 Construction Work in Progress - Seabrook 102,295,387 84,594,290 Construction Work in Progress - Other 2,265,375 1,051,432 Total Utility Plant
$174,748,014 -
$150,853,812 Accumulated Provision for Depreciation 17,595,401, 15,874,662 Net Utility Plant
. $157,152,613 '
$134,979,150 OTHER INVESTMENTS Other Utility Property 178,361
$187,118 Investments in Cooperative Finance Corp.
1,945,456 1,745,006 Deferred Compensation Funds 89,742 80,372 Other Investments 2,000 2,000 Total Other Property and Investments
$2,215,559
$2,014,4%
)
CURRENT ASSETS Cash - General 523,493 602,693 Cash - Loan Funds 31,461-1,000 Accounts Receivable - Net 3,147,782 3,122,464 Materials and Supplies 1,395,536.
1,316,330 Prepayments 985,993 694,958 Other Current and Accrued Assets
- 126,668 33,139 Temporary Cash Investments 5,F70,978 3,753,868 Total Current Assets
$12,081,911_
$9,524,452 DEFERRED DEBITS Other Deferred Charges
-438,996 616,546 Total Deferred Debits
_$438,996 _
$.616J46 TOTAL ASSETS
. $171889,079 -
$147,134,644 LIABILITIES December 31 EQUITIES & MARGINS Patronage Capital
$ ' 7,506,390
$ 6,701,503 LONG TERM DEBT Rural Electrification Administration
' $ 51,751,025
$ 51,193,910 Plymouth Guaranty Savings Bank
-154,315.-
170,643 Cooperative Finance Corporation (CFC) 5,488,220 -
1,925,736 Federal Financing Bank (Seabrook) 102,300,000-82,129,000 Total Long Term Debt
$159,693,560 "
$135,419,289 CURRENT LIABILITIES Accounts Payable L $ ; 3,220,671 -
$ 2,518,727 Customer Deposits 221,431-174,614 Other Current & Accrued Liabilities 760,049 '
646,910 Total Current Liabilities
$4,202,151 -
$3,340,251 DEFERRED CREDITS Other Deferred Credits 486,978
$ 1,673,601 Total Deferred Credits
$486,978 _ s
_$1,673,601 TOTAL LIABILITIES
$171,889M9 s
$147.134,644