ML20216E420
| ML20216E420 | |
| Person / Time | |
|---|---|
| Site: | Seabrook  |
| Issue date: | 12/31/1986 |
| From: | Anderson G COMMONWEALTH ENERGY SYSTEM |
| To: | |
| Shared Package | |
| ML20216D932 | List: |
| References | |
| NUDOCS 8706300697 | |
| Download: ML20216E420 (146) | |
Text
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.Our System Credo .
Highlights 4 1986 1985 ommonwealth Energ3 i(n order lo bc successful. M stem and its subsidiaries owed the appros al and support of. our customers, our Financial Statistics Total Operating Revenues Total Operating Expenses
$612,940,000 573,015,000
$678,077,000 637,642,000 43,962,000 Net Income 41,173,000 emppices, the leaders of the ,
Earnings Applicable to Common Shares 38,093,000 40,698,000 communities we serse, and our Property, Plant and Equipment (including Work in Progress, net) 927,876,000 832,551,000 shareholders. Escr3 decision 69,034,000 Construction Expenditures 90,590,000 we make al esers lesel must he made wit'h this consideration in f,*r i gs P r Com on Share $4.12 $4.50 mind. It is lhe loundation of Common Share Dividend Rate our operalions. at End of Year $2.72 $2.52
- 1. Our customers are our Weighted Average Common Shares Outstanding 9,253,694 9,040,220 primary reason f or being in 21,244 Common Shareholders 19,639 business. W e will alwas s Operating Statistics consider their.nceds and - Customers Served concerns and make their Electric (including seasonal) 320,000 314,000 salislaction our highest Gas 211,000 208,000 prioril3 , .
Unit Sales MWH -Retail 3,908,642 3,734,360
- 1. Our employees are our most 2,088,355 2,191,032 Wholesale s aluahic resource. % e will MMCF-Firm 33,541 34,081 keep them well inf.ormed Interruptible 2,328 3,269 a'nd listen to their ideas, treating them as partners in working to achiese our goal Significant Events of customer satisfaction. Operational
- 3. W e will deal openl3 and
- Construction of Seabrook I was completed, honestl.s with our sarious
- Canal Electric's Unit I was again rated number one in the country in publics; local officials, heat-rate efficiency for an oil-fired generating facility, regulalors, the media, and -
- Phase I of Hydro-Quebec's Interconnection began operation in October, s arious groups that seek to
- The System's newest subsidiary - COM/ Energy Freetown Realty -
represent the interests of the purchased nearly 600 acres of land in Freetown, . Massachusetts for future , development. ! communities we serse.
- 4. It is our goal to proside our .
- Our new corporate headquarters has been completed and occupied.
shareholders with a proper - Financial return on their insestment.
- The System completed the largest annual financing program in its history.
If we conduct our business
- The System sold its 34.5% interest in Algonquin Energy, Inc.
with a recognition ot' and
- The market price of our common shares reached a new high of $45%.
deep concern for our
- The annual dividend rate on common shares was increased 8% in August customers, our emplo3 ees, to $2.72 per share. ,
and the cities and towns we . The Tax Reform Act of 1986 became law. serse, we will he able to { satisf3 the espectations of our shareholders. 3 1
To Our Shareholders: 1 l l at COM/ Energy. Therefore, in this year's Annual Report, we have decided to ask some me.nbers of our yWi/@ 1 s 4, s y . management team to respond to 3k< - e M+ ' Ml those most frequently asked jk,g%$ Kj$ $ s
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@ ,[d questions. We hope that you find this approach informative.
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y a How would you characterize m 1986 for COM/ Energy? As G. E. Anderson: 1986 a be described as a year of
- achievement, a year in which many qq positive events occurred which ag favorably impacted the System's h operating and financial performance.
Most notable were the unprecedented R. decline in interest rates, which provided the impetus for the largest single-year financing program in the system's j history; the decline in oil and gas l prices, which enabled our retail operating subsidiaries to lower rates to customers during the year; the lowest rate of inflation since 1961 - 1.1%; and a state unemployment rate which dropped to 3.8% - causing ! some of our service areas to experience labor shortages during the summer and year-end holiday periods. 1986 was also a year in which G. E. Anderson and R. E. Siegfried significant operational milestones were attained. First and foremost uring the year we respond to was the completion'of Seabrook Unit > I construction. Nuclear fuel loading j D many questions - questions posed by a diverse group of individuals including potential has been accomplished and zero-power testing is in process. It is shareholders, customers, hoped that the Nuclear Regulatory emplayees, analysts, brokers, Commission's (NRC) approval for bankers, and of course you, our low-power testing, the last step present shareholders. These have before commercial operation, will be dealt with topics ranging from our granted shortly. current earnings performance to Also of significance was the dividend stability and dividend commercial operation of Phase I of increases to the many emerging issues the New England / Hydro-Quebec affecting the future direction of our Interconnection which, together with gas and electric operations. We feel Phase 11, is scheduled to provide as that those questions most commonly asked are also on the minds of many others interested in what is going on 2
i much as 10% of New England's cial operation of this much-needed a With the flurry of takeover dem:nd by 1990. Although many new source of electric generation for a and merger activity on Wall people believe that this power is New England will occur. To that end, Street, are you concerned that more than adequate to replace the project's manager, New Hampshire COM/ Energy may become a , Se: brook, it has become apparent by Yankee, while still developing its own takeover target and what steps have virtue of the continued increasing evacuation plans for Massachusetts, been taken to deal with this issue? demand for electrichy that this is just filed a formal request with the NRC not the case. For example, our retail for a reduction in the size of the emer-sales of electricity increased 4.7% in gency planning zone to a one-mile 1986, and have grown at an average radius. We are presently awaiting a R. E. Siegfried: While I am rate of 5% over the past five years, the NRC's response to this request. a not overly concerned with the This growth exceeds that projected in takeover issue, we have taken certain our prior forecasts by one to two steps to protect our shareholders' percent, and we are expecting this interest in the event of such a develop-growth to continue at an average rate a How do you see the financial ment and will, in fact, ask that group of 4.1% over the next five years. a future of COM/ Energy in light to approve certain typical anti-take-of the two-year drop in earnings over measures at our Annual Share-from $4.75 in 1984 to the $4.12 holders' Meeting in May. These reported this year? measures will complement a number o What was the single biggest of existing factors we feel are already c disappointment in 19867 in our favor: our shares are now selling at a healthy premium over book value; our shares are widely A au The last greatly have been two to three by influenced yearsdistributed; the largest single owner a number of significant, nonrecurring of our shares is our own employees Ac aWhile we the many were positive encouraged developments itemsbyand activities designed to place savings plan; and our status as an rel ting to Seabrook and Canadian the system in the best possible position exempt holding company under the hydropower during the year, we were to deal with the complexities and op- Public Utility Holding Company Act extremely disappointed by the refusal portunities of the future. These included of 1935. of the Governor of Massachusetts to the sale of our corporate headquarters approve and submit emergency office complex in 1984, investment evacuation and response plans for in the Riverfront Office Park project, the six Massachusetts communities our purchase of Air Products and a How does the holding company within a ten-mile radius of Seabrook. Chemicals, Inc.'s interest in Hopkinton a status influence potential suitors Concern over the nuclear accident LNG Corp., the sale of our owner- in a takeover attempt? near the Ukrainian city of Chernobyl ship interest in Algonquin Energy, Inc. in the Soviet Union in April 1986 and the purchase of the 600-acre site was given as the primary reason for formerly used for that firm's SNG the Governor's decision. Although production. These events have caused a There are a number of provisions ! we agree that the accident raised our earnings to fluctuate over these u in the law that must be met to concerns about nuclear safety any . years. However, as our newer ventures attain and retain exempt holding comparison between the facilities mature and additional investments company status. In most cases, a at Chernobyl and Seabrook is com- are made in our basic electric and " corporate raider" would find these pletely unwarranted due to the fun- gas businesses, I see a more stable provisions too restrictive. The level damental differences in design, con- growth pattern in earnings. We will, of regulation experienced by public struction and regulation of the two of course, closely monitor the earnings utilities is also generally unattractive f;cilities. Unfortunately, this delay of our operating subsidiaries and will to those outside our industry, in the evacuation planning process file for rate increases when it becomes makes it extremely unlikely that com- necessary. It will soon be five years i mercial operation will be achieved by since any of our operating subsidiaries i the target of November 1987. Despite last had a base rate increase, this setback, we are hopeful that the issue will be resolved and that commer-3
b m A number of utility companies becoming the order of the day and e are getting into various" diversified . our managers, as you will see later in act vities," everything from insurance to this report, are moving to meet these fiber optics to real estate. COM/ Energy challenges. has had some diversified ventures in Regulation also presents us with the past and is currently involved in our greatest concerns for the future real estate activities.' Are there any as well. It is becoming virtually plans to expand these activities and, impossible to site, build and license if so, in what direction? utility property while maintaining some reasonable assurance of capital recovery and return on the investment.
. Company performance is now judged f against the ultimate standard - the ! AnaOver theoperations diversified last fewhave.
years, our
. 20/20 hindsight of the regulator.
centered on real estate development " Prudence" is defined as " skill and through our real estate subsidiaries, good judgment in the use of resources." the foremost effort being as a major Unfortunately, we cannot submit our partner in the Riverfront Office Park - Judgments pertaining to the future to complex in Cambridge, Massachusetts. a crystal ball as a check on their ac-Phase II of this project is now our curacy. We make our decisions based system's corporate headquarters. . upon the best available information Attention will now focus on the 600 and the needs and desires of our ecres of land which we purchased in customers and shareholders. An ironic Freetown, Massachusetts. Preliminary aspect of this whole issue is that, in plans call for a portion of the site to some instances, it is the action or
..be used for an electric generating inaction of a regulator which plant with'a multiple fuel capability, contributes to the finding of Electric Division personnel are conduct. imprudency at a later date, ing feasibility studies on the long-range We hope that you will find the development of an energy park for . remaining sections of this year's this area. report informative. in closing, we again thank our shareholders and employees for their continued support hnd hope that you direct i your attention to the remaining.
9m Whatfacing m challenges 19 7 and beyond? dotheyou system insee as the major sections of this year's report. For the Trustees, A ea G. side,E. Anderson: probably the mostOn the signif. positive g. icant and relatively new challenge facing both our gas and electric di-visions is that of deregulation and the resulting increase in competition. R. E. Siegfried Chairman
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These changes will create an opportu-nity for.our distribution companies to pursue aggressive marketing and service-oriented activities. Open access Cj h to utility products and services is fast G. E. Anderson President and Chief Executive Officer 4
r l Corporate Division l s In light of the continuing decline OM/ Energy Services Company, located in Cambridge, Massa- m in interest rates, do you anticipate Cdata processing, accounting, chusetts, provides financial, ' additional refinancing of long-term
- debt and will the increased use of O f legal, corporate planning and yL .
2 - m leasing affect future financing plans? other services to its affiliates, fq.
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o What does the new tax act M : Rm substantially, giving companies a mean to COM/ Energy in terms of earnings, dividends and share price? d'L'i. L
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an excellent opportunity to refinance expensive long-term debt. COM/ { y Energy has had very few high interest f cost issues; however, we recently called T Commonwealth Electric Company's 10%% Series G Notes and Hopkinton Ac aE. G. Cheney: At this time, specific answers to this question LNO Corp 's 10%Wo First Mortgage are difficult, if not impossible, but Bonds. With these refinancings, the let's look at what we do know. First, . . . . system has only one double-digit the top corporate tax rate will drop from tf 4 coupon rate debt issue outstanding. the current 46To to 34% in 1988. . J ... Canal Electric company's il%% 1987 will have a 40% " blended" '4 1983 Series D Bonds are not callable rate. However, we must be careful - until 1993 and their status will be here; the tax act contains many other reviewed at that time. provisions that broaden the tax base - Turning to leasing, yes, it does play and reduce or eliminate tax credits a role in our overall financing plans. previously allowed. Thus, the final in fact, we presently have leasing ar-effect of tax reform depends on the h rangements for furniture, fixtures net result of all these factors. While and computer and transportation we are researching these issues to the E. G. Cheney, President and Chief equipment valued at $11.4 million. Operating Officer We have found leasing to be a very greatest extent possible, it must be noted that a significant body of rules, attractive and competitive option, regulations and interpretations are a company's tax base and tends to especially when we deal in equipment pending for this legislation. Some of close the historical gap between tax- which, due to technological develop-the other major provisions referred able income and book income. Com- ments, becomes obsolete before it is to above include: the repeal of the panies must calculate both a regular fully depreciated. Many leasing com-investment tax credit (ITC); a revamp- tax and an AMT and pay the higher panies are highly leveraged and, as a ing of the accelerated depreciation rules of the two. It should be noted that result, can often provide funding for that generally provide for longer write- the depreciation and AMT provisions equipment at financing rates below our off periods; and the adoption of a carry significant new recordkeeping incremental cost of capital. Leasing I new corporate alternative minimum burdens for corporate taxpayers. also enhances cash flow, freeing up tax (AMT). As for our dividend policy, manage- capital which can be used elsewhere. . The loss of ITC and lesser amounts ment will have to take into considera- { of tax depreciation will hurt not only tion the impact of the new tax law earnings - but cash flows as well. when recommending dividend levels We are presently attempting to assess to the Board of Trustees. As for the a Why did COM/ Energy sellits in- 1 these impacts. The AMT amounts to a market price of our shares, as always, a terest in Algonquin Energy,Inc.? second tax calculation which broadens that will be the result of the invest-ment community's perception of the I system's earnings, dividend growth, long-term stability and many other A u From a financiaiperspective, our factors. M u management team, as well as our Board of Trustees, felt that the price was right. Our after-tax cash pro-5 _
4 l ceeds amounted to approximately $42 yrmyymmmme m> q' The COM/ Energy Building pro-million, and the sale generated a one-time book gain of approximately 55e M : ,,. N
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environment for our employees. per common share. g '< . ,, , Much thought and design work has From an operational perspective, our COM/ Gas subsidiary, the second f*,2 9 4 gone into creating a state-of-the-art, sophisticated computer facility to largest distributor of gas in New England, " serve the needs of our customers and will now have two large aggressive pipe- out own computer and telecom-line suppliers in the area - Texas munications systems. The leasehold is Eastern Transmission Corporation further enhanced by a comprehensive and Tennessee Gas Transmission , secunty system. All Services Com-Company. This competition should pany functional areas are now con-help to keep gas costs down, and in solidated on five floors, with expan-the process help us to expand our sion capabilities premised on 1990's market share, in spite of the fierce staffing levels. Further adding to the competition we receive from oil ambience is a full-service cafeteria dealers in our franchise area. The and a completely equipped health sale will also ensure a secure supply facility. All of these factors will of gas as Texas Eastern has direct result in improved employee morale access to wellhead supplies in the and productivity. Southwestern states. Transportation The new address and telephone of this gas will not present a problem number are: since Texas Eastern will now own 100% of the pipeline from the source One Mam. Street in the Texas / Louisiana area to the Cambridge, MA 02142-9150 end of the line here in New England. (617) 225-4000 Texas Eastern's financial commit- { ment to pursue aggressively the New j England market, as evidenced by this a Could you update us on the 1 E P. Sullivan, Vice President, Secretary additional mvestment m Algonqum, , and General Attorney a Shareholder Awareness Program? should provide the necessary impetus to help gas distributors such as COM/ Gas in expanding their service a Why was it necessary that area, a COM/ Energy Services Co. mThe Shareholder Awareness Ultimately, this consolidation move to a new corporate headquarters? m Program has been well received. should result in less complex rate fil- The following are items which have ings, which will enable COM/ Gas to been acted upon: move volumes of gas more quickly. = Shareholder Survey - a survey was This is vital in these times of pipeline deregulation and increased competition. A M. P. Sullivan: The Central rt a Square facility has been in use taken two years ago to begin our Program and learn more about our by the Services Company since 1961. shareholders. The survey received a i Over the span of 25 years, the Services favorable response and the highlights Company's expansion in this facility of the survey were reported to our resulted in operating inefficiencies, shareholders. including an inability to plan future *"800" Toll-Free Telephone Service usage in a comprehensive, well - the System has installed an thought-out manner. Our ability to "800" toll-free telephone line to meet the ever-burgeoning technical provide shareholder services. This requirements of a modern office en- service has been used rrgularly to vironment was severely restricted, assist our shareholders. If you have Over-crowding situations and disper-sion of employees throughout the leaschold with little or no recognition of interdepartmental requirements was common. 6 _
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a need for shareholder service, a First let me say that the best please call: p-NWm j, p Qw %W'D g t e telecommunications are those I that are invisible. By this i mean that S- ' i , 1-800-336-3773 (within Massachusetts) pp
, - 1800-447-Il83 (outside Massachusetts)
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,m y(yjg qw telecommunications is the facilitator to all of the above and should allow
- Facility Tours - we have arranged Q,4" gg the movement of information more i tours of the System's facilities for you, our owners. Of great interest gp
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quickly, accurately, and economically throughout the COM/ Energy system { has been our Canal Electric without user involvement or even generating plant in Sandwich, - awareness. To do this, we have Mrsnehusetts. Shareholders and selected those technologies and ser- , schoolchildren alike have enjoyed - vices that are not only state-of-the-art in terms of functionality, but also seeing this top-rated facility while visiting Cape Cod. , , , those that are highly flexible. f ' Shareholder Question and Answer For example, our network will be Sessions - In our interim reports to . c, , digital, using media such as fiber shareholders, we have attempted to optics, microwave and large capacity i 27,
, provhk responses to commonly asked services. These will not only improve questions by our shareholders. We accuracy and quality, but also will
' hope you have benefited from these allow for significant growth while responses, stabilizing our costs. For local inter.
We encourage you, our connection of personal computers, shareholders, to continue to let us we work with Digital Equipment know what you would like. Corporation components and a file server to allow individual users to share information within a group. This network also enables us to a Practically everything that is wrii. i . , connect personal computers with the O ten on Information Technology main-frame computer and equipment J. M. Brown, Vice President and Chief to y entreats management to utihze at our operating divisions. Addi-Information Officer technology to its strategic advantage. tionally, we are installing services What is COM/ Energy's current that permit telephone calls to come thinking regarding Information During the past 18 months, we directly to the called party, and a
-Technology? - have made major strides in introduc- computer-based service called " voice ing new technologies in the areas of mail," which allows for telephone office automation, telecommunica. answering and message pickup at tions, networking and new systems. any time of the day or night. {
These have resulted in productivity in short, we intend to use telecom- { Ac oJ,a replacement M. Brown:forTechnology leadership isincreases not in our workforce, improved munications to eliminate the disad- i or mam.gement. Leadership provides customer service and reduced operating vantages of distance, to ensure that the vWon for the future; manage- costs, we are responsive to providing the in-ment h the implemention of that formation we need to deliver customer vision. Information Technology is service and to develop a higher
- just one kind of technology, yet it is degree of employee productivity.
clearly among the fastest growing in a You have indicated that tele-importance. We at COM/ Energy a communications is central to view th4 technology as an enabling COM/ Energy's plans for using force - a tool - which, when proper- technology as a catalyst for customer ly utilized, will enable us to improve service and improved productivity. our productivity and better serve our This supports COM/ Energy's "one customers, system concept." Will you elaborate on this? 7
E a It is obvious that office automa- from "home-grown" systems and are Science of America. We anticipate a tion and telecommunications looking toward third-party-developed installation of both systems during have been high on the priority list software packages. the first quarter of 1988. for the past year. What about new Just recently, we completed replacing Finally, we are taking a hard look systems development? our entire general accounting system at our requirements in the general with new General Ledger software area of materials management. This ! from McCormack and Dodge (M&D). includes purchasing, inventory control, We have also acquired M&D's Ac- warehousing and distribution, materials counts Payable system and expect acquisition and transportation. Hope-this project to be complete by early fully, we will be at a decision-making As aThis us and has onebeen key that, right area now, is forsummer. point early this summer and begin undergoing substantial change. One We are alsoinstalling a new Customer implementation in the fall of this of our strategic objectives is to replace Information system originally developed year. all of our old batch processed systems at Iowa Public Service Company and New and responsive computerized with state-of-the-art on-line systems. a new fluman Resource Management systems in our key business areas are in this process, we are moving away system marketed by Management one of our top priorities. 1 Electiic Division i i 1 a How does COM/ Electric see and an agreement pending with a in Wareham, Massachusetts, a the present energy supply mix Maine utility for a 1,000 megawatt COM/ Electric, headquartered is the term used for our elec-tric division which includes our changing, considering the national goal of " energy independence?" interconnection in the 1990's. A significant portion of New England's 3 l 1 two retail electric distribution future energy needs will be supplied 1 companies, our wholesale generating from outside sources. The problem is company and our steam distribution that this energy, like imported oil, is company. Collectively, the division a J. V. Donovan: We do not see subject to the wants and needs of employs more than 1,400 people to a eusgy independence being at- others, which may not always be provide electric and steam service to tained in New England, considning consistent with the needs of the elec-approximately 320,000 customers in the politicai,' social and regulatiry tric customers of COM/ Electric. 41 communities, including Cambridge, forces driving the industry th'vard New Bedford, Plymouth, and the the use ef Canadian power, Canadian geographic area comprising Cape gas (with fuel-oil backup) and third-Cod and Martha's Vineyard. party generators. Examples of this a Will COM/ Electric participate trend away from energy independence e in large joint-owned generating include: the 490 megawatt intercon- projects in the future and, if not, nection between Hydro-Quebec and what options are open to COM/Elec-New England Power Pool participants, tric to meet the electric requirements which was placed in service in 1986 of ite customers? ad the expected upgrading of that interconnection to 2,000 megawatts. ' , There is another interconnection between Hydro-Quebec and Vermont ;. utilitics. that went into service in Wf6,
) . .) , s j ,
4
, -.-.-~.x.- '8 i l- i l_ L m__ J _ _ _ _ _ _ _ _ _ _ _ _
*Near-term purchases of capacity and p-e ~ q/f p/* q enargy from New England Power Pool V members experiencing temporary @s Xi excess supplies. ;f
*The contractual acquisition of energy pi 4 from others consistent with the f'*. '
_g [
%j regulations for " qualified p Ci facilities."
O
'The construction of smaller, multi-fueled, modular generating plants which would more closely match the company's future capacity needs, a What is COM/ Electric's position u regarding the co-generation of ele tricity and the use of third-party generators?
~
A a S. R. Fox: COM/ Electric has e always encouraged optimizing the use of energy. In fact, we have _S been involved in co-generation, the s synd simultaneous generation of electricity
.. ^ tgj and process-steam, for many years in
>s d the Cambridge area. COM/ Energy Steam has approximately 18 commer- S. R. Fox, Jr., Vice President Facilities
, J. V. Donovan, President and Chler Operating Officer cial customers in that city. The steam Development it sells is extracted from Cambridge Electric's turbines during the process of generating electricity. We are also 125 megawatts, are presently under Ac oThe makescurrent it highly regulatory unlikely that climate pursuing the potential for buying contract to COM/ Electric,25 mega-we will become involved in a large electricity produced through co- watts of which is already in operation.
. Jointly-owned electric generating proj- generation from our larger com- Our efforts in this area were recently ect in the foreseeable future. The mercial and industrial customers. acknowledged in a report prepared financial and service reliability risks As for third-party generators, you by the Massachusetts Energy Facilities attendant to such projects are just may recall previous references to the Siting Council which stated: "In its too great. We can ill afford to have SEMASS project located in our ser- supply plan, COM/ Electric presents our costly construction dollars and vice area. This $200 million waste-to- an aggressive policy in pursuit of much needed megawatts tied-up by energy facility has been under con- capacity and energy from alternate regulatory delays as in the case of struction for about 8 months now resources" and "The Siting Council Seabrook. Barring a major shift in and is expected to be complete in is pleased that COM/ Electric has l the direction of regulation, I see the late-1988. COM/ Electric has con- made a strong commitment to con-construction of large-scale jointly- tracted for the 50 megawatt output tract for ... alternate energy sources owned or pool-planned units as a of that plant. Another small power by setting an ambitious capacity target thing of the past. producer is the Boott Mills plant on and integrating that target into its The company does have a number the Merrimack River in Lowell, Massa- supp!f ;h:L ."
of options available to meet the energy chusetts which has been producing needs of its customers, including the hydroelectric power for almost a following: . year. These are just two examples
*The continued pursuit of demand- from a list of nearly 40 projects of a What programs are targeted at side strategies such as conservation varying types and sizes that we are a maintaining and/or improving and load management. These efforts pursuing. Eight of these, totaling rel ability of service?
are designed to reduce or delay the need for new generating facilities. 9
l Aa aAfacilities goodareadeal of effort in the a COM/ Electric has been involved is directed toward s in cncrgy conservation for some improving the reliability of service to time now and appears to be increas-our customers. For example, we have a g tN g , ,i, i ing its efforts. Does COM/ Electric, Reliability Assessment Program. This . C
- based on its findings so far, feel that ,
computer software package, developed j g energy conservation will provide i by the Electric Power Research in- A relief from adding costly capacity stitute, records each power outage and if so, for how long? as to location, duration and cause. .t Analysis of this data allows our . facilities personnel to assess overall system reliability and find trouble a Energy conservation and load I areas in need of improvement. ' a management do provide a secure We also have an Emergency and reasonably priced source of elec-Operation Plan. This plan is an tric supply for the long-term future. operating procedure designed to be Customer acceptance of these options placed into operation without ad- plays a critical role in the amount of vance notice in the event of a relief. Present findings indicate the l disaster, such as a sterm, fire, explo- need for additional capacity by the ' sion, or civil disorder that is expected early 1990's. to have a prolonged material effect y upon the companies' ability to pro-vide service. The primary objective of the procedure is to accomplish the .. s Does COM/ Electric expect to rapid and orderly repair of electric ,y a control customer load by billing service facilities for the protection of peak use at a much higher rate than the public health and safety and to g"m off-peak? If so, when will such a restore service to all customets in a g rate be available? mimmum amount of time. R. F. MacDonald Vice President. Customer Services a What types of programs does free service for the speech or hearing A sa We currently offer " Time-of Use" rates which are based on the ; a COM/ Electric have in place to impaired and another "800" number cs of providing electric service at maintain and improve customer and for our Portuguese and Spanish different times of the day. Customers community services? speaking customers, who shift their use from on-peak to ; COM/ Electric and its employees off-peak periods help to reduce the participate in numerous civic activ- requirement for construction of new l ities and organizations. We work capacity and receive a lower bill for 1 very closely with various community their electric energy consumption. A se customers R. F. MacDonald: is a primary goal at Service to our action prdgrams and elderly service I COM/ Electric. Our employees work agencies to assist in solving energy-hard and long to maintain the highest related problems. The company is levels of service to the many diverse also a sponsor of the " Good Neighbor customer groups in our system, in Energy Fund." We provide the vehic!c 1986 alone the company instituted a whereby our customers can contri-number of new programs. A Consumer bute to a fund administered by the Advisory Panel, made up of sixteen Salvation Army. Monies are distributed customers from various backgrounds, by that organization to low-income helps us stay on top of customer needs customers having problems paying and opinions. To facilitate communi- their energy bills. cations with sreial needs customers, Finally, we are very proud of our we installed telephone / teletype toll- employees' support of the United Way, not only through contributions but by giving their own time to work in the various " Loan Executive" programs. 10
1 Gas Division rx v "
'emM3 m The year 1986 continued at record headquartered in South- s construction levels, particularly ggj? 'Qq Commonwealth b Gas Company, borough, Massachusetts, has 3: 4 along Interstate 495, which runs through approximately 800 employees k N >h/ our service territory. This provided
. / *4 4- M us with many opportunities to add who provide natural gas service to more than 211,000 customers. The a p Q @,1 new commercial and industrial gas company serves 49 cities and towns in )
- customers to our system. We also ex-Massachusetts, including Cambridge, ;E s , , y"7
/ 4@4 panded our service area with receipt New Bedford, Plymouth and Worcester. g % gf of a franchise to operate in the town p -
of Mendon, Massachusetts. Also, the company has recently finalized a major i system expansion into the town of a What are the major factors 4 Holden, Massachusetts. This expan-a behind the sweeping changes in sion will allow us to serve three the natural gas business and how will major construction projects, in-these changes affect COM/ Gas and ciuding a 120,000 square foot shopping their customers? center and a 450-unit condominium project. Additional prospects include three bordering towns which current-ly have no gas service. We are very fortunate to be serving such a A ua W. G. factors tributing Poist:toThe thesemajor changescon- vibrantly healthy and prosperous include the deregulation of wellhead area. gas prices, the recent implementation of federal regulatory policies designed to encourage competition and the de-clining demand nationwide for natural a What is the long-term outlook gas - all of which led to the present a for natural gas supplies? supply surplus. W. G. Poist, President and Chief The flowcharts on page 13 dep.ic t Operating Officer the traditional gas marketing structure and the structure which is developing today. In the traditional structure, We believe that COM/ Gas is in an A L. R. Devanna: The supply rt e surplus that caused the price our pipeline suppliers faced minimal excellent position not only to remain of natural gas to decline over the competitive pressure in selling natural competitive but to increase our market past several years is largely the result gas; however, in today's developing share as well. Some of our ativantages of increased drilling activity between marketplace, a direct line to producers include: the ability to stimulate com- 1979 and 1984 when producers antici-is available to many previously captive petition for our business between the pated increased natural gas prices. pipeline and distribution company two pipeline suppliers in our service Hcwever, since the collapse of world customers. Similarly, our large com- territories; access to the Hopkinton oil prices and the apparent recognition mercial and industrial customen. will LNG facility with its large storage of decreasing energy demand, drilling also be presented new opportunities and sendout capability; an excellent activity has significantly declined. As to purchase their own gas supplies base of residential and commercial a result, the supply surplus which we permitting COM/ Gas to offer new customers which provide the load are enjoying today could be greatly customer services which could include stability necessary to weather the diminished over the next several years. firm and interruptible transportation, effects of volatile changes in the At that time, the level of renewed standby sales and peak shaving services, price of oil; and a strong management drilling activity will depend on the The menu of services applicable to commitment to continue our growth ability of producers to discover and our large customers will allow them while taking the necessary actions to deliver natural gas supplies which are new options to obtain natural gas in remain competitive. competitive with oil. Our expectations a developing competitive market. are that gas supplies will be ample for many years to come as supply responds to demand at market clear-a What has been the impact of all ing price levels. e the new building construction in the COM/ Gas service territory? 11
(W&, W F! {. tl '
./
years has implemented a series of plant improvements which will {- - N ,,
! o//t ensure the long-term reliability of this facility and its supply.
/ v
%. /
, j{ a N %, 4 M i'
% y, , %, . .. - i m Will you provide an update on 4<g$ m COM/ Gas' conservation efforts? s
%rp jt :
- - ~'
.t
~
L- ~~ a A a D. Johnson: Our original R m " Gopher Gas" conservation program was so well received that we s_ " have expanded it to cover a broader range of our customers. Under our f new " Gopher Gas Energy Conserva- # tion Program," we continue to offer 9" the installation of up to $50 worth of weatherization services and materials free of charge to our low income, elderly and handicapped customers. !
> In addition, we offer a streamlined energy audit and information on state -
and federally-funded energy conserva-tion programs. These customers also , , have the opportunity to purchase in- l L R. Devanna, Vice President-Gas a1 o an n " D. ohnson, Vice President-Customer 9 e als workmg with the Massachusetts Office of Energy Resources to provide zero-interest loans to middle-income cus- a What has COM/ Gas done in 9a Hopkinton LNG has been cited a as one of COM/ Gas' strengths. W at is the role of this facility in tomers who are making energy con-servation improvements. a the past year to attain system goals in the customer service area? COM/ Gas' supply plans? The recently completed " Heat Save" program went even further by offering up to $1,500 in services and materials for weatherization and in- a Customer satisfaction is generated sulation of gas-heated, nonprofit a from a wide variety of services Ama Hopkinton capability totaling LNG, with storage 3.5 billion charitable institutions. Nearly 200 in- provided by COM/ Gas - from meter
)
l cubic feet, is an essential element of stitutions participated in the program, reading to customer service to con-our winter gas supply, providing as These programs are being coordinated servation and other community assist-much as one-third of our peak day with various community agencies to ance programs.To keep track of how requirements. In our new competitive ensure that our customers have an we're doing and where we need to environment, this facility is becoming opportunity to utilize available state concentrate our efforts, we utilize the increasingly important to COM/ Gas and federal funds. This interagency services of a research firm to survey since it allows the company to con- networking is a key component of customer attitudes. tinue to grow with residential and our energy conservation efforts and commercial heat-sensitive loads we feel that these enhancements will ; without having to incur the signifi- encourage further conservation while cant costs of new gas supply projects. bringing us even closer to our customers. m What were the results of these Recognizing the importance of this a surveys? facility, Hopkinton LNG in recent 12
.. . __-_______-_--____-__-_________________-____--_______-___________-________-_-_______-___-__-_------_--_--_-_--i
l Natural Gas Trends Ama Our most was done recent survey by Cambridge Reports, in 1986 Inc. They asked a random sampling , of more than 800 customers about ResidentW the services provided by COM/ Gas, --* osas .. Traditional Gas Marketing consurnws j their attitudes toward the company, the cost of gas and other related questions. The results were very satisfying. Here are the highlights. ,
- Of those surveyed: . . .
*94'/o feel that the company pro- y .
vides reliatie service; * *
+87% feel that the company is prompt and efficient in responding
- to service emergencies;
*83'/o feel that the company has understanding and courteous employees;
*61% believe that they have control
- over the amount of gas used in Today's Gas Marketing their homes; e44% believe that they have control over the dollar amount of their gas bill; and _* --
*64% feel that COM/ Gas' rates are fair and reasonable. "
Cambridge Reports indicated that - the 64% response to the rate ques- ' - tion is the highest they have ever Reeldential recorded for a gas or electric utility. fD,, We are very proud of these results i g and I can assure you we are continu- U ing in our efforts to improve service to all customers. It will take a sus- ' _* (( w. ', tained effort on behalf of all our 3' employees to maintain and improve d this recently established standard in d4 -* . . customer service.
- L b
Source: Natural Gas Trends. Arthur Andersen
& Co. and Cambridge Energy Research Associates (l986) 13
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Management's Discussion and Analysis of Financial Condition and Results of Operations Commonweahh Energy System and Subsidiary Companies
' Regulation Results of Operations
, ' The System's operating subsidiaries are subject to the Operating revenues for 1986 decreased by $65.1 million jurisdiction of state and federal regulatory agencies with or 9.6% from 1985 despite an increase in retail electric respect to the establishment of rates affecting retail elec- unit sales of 4.7%. This decrease in revenues was at-tric and gas sales and wholesale electric sales. tributable to the lower cost of fuel used in electric pro-The Massachusetts Department of Public Utilities duction, principally oil, and reduced gas costs, which are (DPU) requires historic test-year information to support automatically adjusted in rates billed to customers. Also changes in rates. In 1982, the last year in which a system contributing to the change in operating revenues were retail rate increase became effective, the DPU allowed declines in unit sales to both firm and interruptible gas our system retail utilities to include known and measurable customers of 1.6% and 28.8%, respectively, and a changes in cost of service and rate base calculations and decline in wholesale electric unit sales of 4.7%. The lower-granted inflation allowances as well as higher returns on level of total gas sales was the result of milder weather common equity. These equity returns range from 15% to and increased competition from oil distributors. Fluctua-15.5% on capital structures with equity components of tions in the level of wholesale electric and interruptible - slightly more than 50%. We constantly evaluate the earnings gas sales have little, if any, impact on net income. performance of our regulated subsidiaries to determine if Residential and commercial sales to electric customers there is a need for rate relief. Other DPU proceedings on were the primary contributors to our improved retail rate restructuring and realignment of power cost recovery sales performance, reflecting the healthy economic condi-methods were held in late 1985 and, in part, require tions in our service area. Cambridge Electric to file for a final phase of equalized In 1985, operating revenues decreased nearly $46 cost of service rates in late 1987. Commonwealth Electric million due to a decline in wholesale unit sales and the may ultimately be ordered to file new rate structures lower cost of oil, purchased power and gas costs - all consistent with the Cambridge Electric final order. These despite significant increases in retail electric and firm gas proceedings are not expected to have a significant impact unit sales. The 1984 change in electric revenues reflects on revenues or net income. both the 28.7% growth in KWH sales and the costs The System's electric distribution subsidiaries have associated with producing that power. Power Cost Charge rate schedules subject to DPU regula- Fuel and purchased power costs per KWH were 5.0e, tion under which companies seek current recovery of 4.2e and 3.3e for 1984 through 1986, respectively. These substantially all fuel and purchased power costs. This costs declined over the periods due primarily to the same statute establishes that the DPU, at least annually, decrease in oil prices at our Canal generating facility, review the performance of such companies relative to the which averaged $28.56, $25.18 and $14.48 per barrel in operation of generating facilities, purchased power and those three years, respectively. During the same period, fuel procurement and empowers the DPU to disallow 1984 through 1986, the cost of gas per MCF averaged recovery of costs found to have been incurred imprudently. $4.52, $4.34 and $3.90, respectively, reflecting a much The DPU conducts such reviews of electric companies on improved gas supply situation and the greater availability a continuing basis, including certain of the system's suppliers of lower cost spot market gas, particularly in 1986, of electricity. Refer to Note 6 of the Notes to Financial In general, other operating and maintenance costs have Statements, " Replacement Power Costs" for further risen throughout the three-year period reflecting increases discussion of this issue, in the cost of labor, materials and other services. Addi-In September 1986, Canal Electric filed with the tionally, these expenses contain costs associated with ex-Federal Energy Regulatory Commission (FERC) new tensive repairs of a non-recurring nature to transmission rates designed to recover its costs incurred in the con- and distribution facilities in 1986 and repair work re-struction of Seabrook 2, now abandoned in November quired on system generating facilities in 1985. In 1986, 1986, the FERC allowed the rates to become effective other operations expense was also impacted by a signifi-April 11,1987, subject to refund. These rates are designed cant increase in the cost of insuring system property and to recover the estimated $23 million relating to Canal's operations. Operating expenses for both 1986 and 1985 Seabrook 2 investment, without carrying costs on the reflect the cost of operations of Hopkinton LNG Corp. unamortized amounts. In accordance with the FERC acquired on January 1,1985. order, an investigation and public hearings will follow Other income for 1986 decreased by $720,000, or 4.2%, in due course, the outcome of which cannot be predicted after increasing in both 1985 and 1984. The decline large-by Canal at this time. ly reflects the absence of $1.8 million of interest income on certain contested tax issues as well as the $5.3 million impact of lower equity earnings resulting from the sale of the System's interest in Algonquin Energy, Inc. Substan-tially offsetting these decreases were the $5.1 million gain realized from the sale of Algonquin and an increase of 15 COMEnergy
r.arnings and Dividends Net Income (in Minions) Revenues (in Millions) Total Capitalization (in Millions) []Earnins: Electric E Electiic E Gas L.ons-Term Debt . , IGI Dividends ' Gas W Eiecu n Wholesale Common Shareholders' Equity l Other i!.M Stear 2 and Other Preferred Stock s3.C3 s50.0 s800 s600 3.75 37.5 600 450 'I 2.50 .
- 25. 400 300 1,25
- h. $
12.5 200 150
, %{3 q zl gig "
lhkkb yy(i hh; l ,. q f 0 1982 '83 '84 '85 '86 0 198.9 '83 '84 '85 '86 0 1962 . '83 '84 '85 '86 0 1982 '83 '84 - '85 '86
$1.8 million in the equity component of allowance for- the operation of adjustment clauses. In 1986, the con. .:
funds used during construction (AFUDC). The increases 'sumer price index rose just 1.1%, the smallest increase ~1 in other income in 1985 reflected a $1.3 million increase since 1961, due primarily to the sharp decline in oil ) l in Algonquin equity earnings, a $1.5 million rise in equity prices, i AFUDC, the inclusion of the $1.8 million in interest on contested tax issues and $1.1 million relating to the 1984 Capital Resources ; sale of our corporate headquarters office complex. In Interim and permanent financing is secured on an in . > 1984, this last item amounted to $4.3 million. dividual company basis. The System purchases 100% of Total interest charges increased during the year reflecting all subsidiary common stock issues and provides, to the the 34% decrease in the allowance for borrowed funds extent possible, a portion of the subsidiaries'short-term - used during construction. However, interest charges for financing needs. The System's principal sources of capital both long and short-term debt continued to decline dur- are retained earnings and equity funds provided through I ing the three-year period due primarily to lower interest its Dividend Reinvestment and Common Share Purchase rates. Plan (DRP). These sources are supplemented, when Inflation can have a significant impact on the cost of necessary, with new equity and/or debt issues. fuels, purchased power, gas, labor, materials and other In late 1986 and early January 1987, system sub- , l services. However, regulation does provide for the sidiaries received proceeds relating to new long-term debt '] recovery of fuel, purchased power and gas costs through and equity issues as follows: j Subsidiary Long-Term Debt Common Stock Total 1 Cembridge Electric Light Company $ 10,000,000 $ 4,000,000 $ 14,000,000 - Commonwealth Electric Company 50,000,000 19,000,000 69,000,000
]
- Commonwealth Gas Company 50,000,000 18,000,000 68,000,000 Hopkinton LNG Corp. 7,000,000 - 7,000,000
$117,000,000 $41,000,000 $158,000,000
_ 16
-_ -____ _ _-__ - ____ - - _ - _ a
l The proceeds from these issues were used primarily to Over the next five years, we are projecting the follow-refund maturing long-term debt issues and reduce short. ing total system capital requirements: term borrowings. Also, Commonwealth Electric redeemed the $11.7 million principal amount of its 25 year 10%%
- Construction expenditures $420,976,000 Notes, Series G, Due 2000 at a general redemption price
- Maturing long-term debt. 20,927,000 of 106.12%. The premium will be amortized over the life
- Sinking funds 29,071,000
of the new 15 year 9.30% notes, which are due in 2002. $470*974'000 in addition, Hopkinton paid the remaining balance of a revolving line of credit and redeemed the 10%% First Mortgage Bonds, Due 1996 with the proceeds from an Seabrook I is no longer a significant item in our total 8.40% seven-year term loan of $7 million, construction program since construction is now con.
System companies also maintain lines of credit with sidered complete. However, projected expenditures in-banks. At December 31,1986, short-term notes payable clude $31 million for a proposed electric generating unit to banks were $84.2 million before reflecting the impact to be built on land located in Freetown, Massachusetts. of the last part of the aforementioned financing plan We anticipate generating approximately $270 million or which lowered the level of bank borrowings to $28.7 about 57% of our capital requirements internally. By the million. end of 1991, our financing program calls for the System's Subsidiary companies also participate in the COM/ Energy operating subsidiaries to issue approximately $153 million Money Pool (the Pool). This is an arrangement whereby of new long-term debt and $91 million in new equity subsidiary companies'short-term cash surpluses are used capital. to help meet the short-term borrowing needs of the utility subsidiaries, in general, lenders to the Pool receive a higher Tax Reform Act of 1986 rate of return than they otherwise would on such investments, The primary provisions of the Tax Reform Act of 1986 while borrowers pay a lower interest rate than those affecting the system are the reduction in the corporate in-available from banks. come tax rate from 46% to 34% effective July 1,1987; the repeal of the investment tax credit for most property-Liquidhy additions after December 31,1985; the lengthening of The System is able to generate sufficient levels of cash to depreciable lives; and the lowering of depreciation rates meet its needs through the collection of accounts receivable for certain property. The Act also requires the refunding generated from the sale of electricity, gas and steam to f excess deferred taxes to customers over the remaining retail and wholesale customers. Other cash sources in, regulatory Efe of the assets, the adoption of a new cor-clude rental income, dividends from investments, the sale porate 6ernative minimum tax which, in effect, would of common shares through DRP and periodic short-term broaden the tax base and close the historical gap between borrowings from banks, taxable income and book income and, finally, the recog-Construction expenditures for 1986 were approximately nition of income at the time that services are provided
$90.6 million, including allowance for funds used during rather than at the time those services are billed or metered.
construction and nuclear fuel. Of this amount, approx- The amount of this latter adjustment will be included in imately $24 million relates to our participation in the taxable income ratably over a four-year period. Seabrook project. The benefits of the reduction in federal tax expense resulting from lower tax rates will, in time, be passed on to customers as either a reduction in rates or by delaying the need to increase rates. Lower revenues will reduce in-ternal cash generation and increase external financing re-quirements which, in turn, will cause pre-tax interest coverage to decline. The effects of changes in the tax law are considered in arriving at the percent of internally-generated funds available for capital expenditures in subsequent years as discussed above. 17 _ COMEnergy
s. Report of Independent Public Accountants In addition, as discussed in Note 6, in prior years To the Board of Trustees of Commonwealth Energy the Massachusetts Department of Public Utilities (DPU) has disallowed Commonwealth Electric Company (Common-System, wealth), a subsidiary, recovery of a portion of the replace-We have examined the consolillated balance sheets and consolidated statements of capitalization of COMMON- ment p wer gosts required during Pilgrim Unit I outages by irnputmg m past orders the deemed imprudency of WEALTH ENERGY SYSTEM (a Massachusetts trust) Pilgnm's operator to this subsidiary. Commonwealth and subsidiary companies as of December 31,1986 and 1985 and the related consolidated statements of income, had unsuccessfully appealed a prior DPU order to a state c urt and is now seeking relief from the U.S. Supreme changes in common shareholders' investment, changes in Court, the outcome of which cannot be predicted. Com-redeemable preferred shares and cash flow for each of monwealth has been incurring replacement power costs the three years in the period ended December 31,1986. Our examinations were made in accordance with generally since April 1986 due to a Pilgrim, Unit I outage. It is not accepted auditing standards and, accordingly, included poss ble to predict what portion, if any, of the replace-such tests of the accounting records and such other ment costs resulting from this outage Commonwealth - auditing procedures as we considered necessary in the ay not ult,mately i be allowed to recover, in our pimon, based on our examinations and the circumstances. We did not examine the consolidated financial statements of Algonquin Energy, Inc., the report of other auditors and subject to the effects on the investment in which is reflected in the accompanying above financial statements of such adjustments, if any, as might have been required if the outcome were now known financial statements using the equity method of account- , of the uncertainties referred to m, the second paragraph, ing. The 1985 and 1984 consolidated financial statements and subject to the effects on the 1986 financial statements of Algonquin were examined by other auditors whose report has been furnished to us and our opinion, expressed f such adjustments, if any, as might have been required herein, insofar as it relates to amounts reported by if the outcome were now known of the uncertainties referred Algonquin, is based solely on the report of the other to in the third paragraph, the financial statements referred auditors, to above present fairly the fmancial position of the System and subsidiary companies as of December 31,1986 and As more fully discussed in Note 6, the System, through 1985 and the results of their operations and their state-its subsidiary Canal Electric Company, has ownership in-terests in Unit 1 and Unit 2 of the Seabrook Project, ments of cash flow, for each of th,e three years m the , Canal Electric Company has received approval from the peri d ended December 31, 1986, in conformity with ( generally accepted accountmg prm, erples applied on a Federal Energy Regulatory Commission (FERC) to bill, subject to refund, the System's two retail electric sub- consistent basis. sidiaries for its abandoned Unit 2 investment over a three year period beginning in 1987. Final approval for the recovery of the System's Y ph 2 investment will be subject Arthur Andersen & Co. to further hea,ings befot. i ERC s.a possible hearings at the retail jurisdictionallevel. There are uncertainties with regard to the recovery of Unit I which is not yet in Boston, Massachusetts, commercial operation. The recovery of the System's in- February 25, 1987. l vestment in Unit 1 is also dependent upon future i regulatory approval, it is not possible to predict what portion, if any, of the System's investments in these units may not be recovered. 1 l l' 18 _ . _ _ . _ . _ _ _ 1
s Consolidated Statements of income Commonwealth Energy System and Subsidiary Companies (Dollars in Thousands)
. Years Ended December 31,- 1986 1985 1984 Operating Revenues: ,
Electrie $373,882 $415,723 $465,891 Gas 228,113 248,901 242,617 Steam and other 10,945 13,453 15,139 612,940 678,077 723,647 Operating Expenses: Fuel used in electric production, principally oil 116,058 185,406 223,719 Electricity purchased for resale 83,531 66,166 80,780 Cost of gas sold 139,808 162,154 168,777 Other operation 136,520 122,291 110,494 Maintenance 34,765 32,261 28,899 Depreciation 24,609 22,921 20,586 Taxes-Local property 10,256 11,965 12,086 Income (Note 5) 20,880 28,602 29,144
' Payroll and other 6,588 5,876 5,707 573,015 637,642 680,192 Operating Income 39,925 40,435 43,455 Other Income:
Algonquin Energy, Inc.- (Note 2) Equity in carnings 2,114 7,381 6,090 Gain on sale of investment, net 5,124 - - Allowance for equity funds used during construction 7,218 5,420 3,930 Sale of buildings, net (Note 9) 740 1,065 4,340 Other, net 1,314 3,364 1,229 16,510 17,230 15,589 Income Before Interest Charges 56,435 57,665 59,044 Interest Charges: Long-term debt 16,576 17,371 17,693 Other interest charges 4,738 5,440 6,114 Allowance for borrowed funds used during construction (6,052) (9,108) (9,731) 15,262 13,703 14,076 Net income 41,173 43,962 44,968 Dividends on preferred shares _ ',080 3 3,264 3,423 Earnings Applicable to Common Shares $ 38,093 $ 40,698 $ 41,545 Weighted Average Number of Common Shares Oujianding 9,253,694 9,040,220 8,747,626 Earnings Per Common Share $4.12 $4.50 $4.75 The accompanying notes are an integral part of these consolidated Gnan/i statements. 19 COMEnergy
Commonwealth Energy System and Subsidiary Companies (Dollars in Thousands) 7ecember 31,. 1986 1985 Assets TProperty, Plant and Equipment, at original cost: Electric $508,410 $474,176 -; Gas 182,862 168,785. ; Other 62, % 9 .45,583 l 754,241 688,544 Less-Accumulated depreciation 262,892 ' 248,547: ! Accumulated deferred income taxes 91,258 85,457 400,091 354,540 Construction work in progress, net (Notes 5 and 6) _ 173,635 144,007-573,726 498,547 l l , Leased Property, net (Note 10) 11,410 '11,159
. Fquity in Corporate Joint Ventures:
35,984 Algonquin Energy, Inc. (34.5%) (Note 2) - Nuclear electric power companies (2.5% to 4.5%) 9,072 9,000 ) Other investments 1,786 1,940 l ' 10,858 46,924 Current Assets: Cash 2,967 2,411 Accounts receivable, less reserves of $3,037,000 in 1986, and $2,795,000 in 1985 - 57,602 68,522 Unbilled revenues 30,140 38,013 Inventories, at average cost-l' Electric production fuel oil - 4,134 5,503 Natural gas 15,356 16,944 Materials and supplies 7,113 6,778 Prepaid property taxes 5,605 6,497 Other 3,846 3,944 126,763 148,612 4
' Deferred Charges, net (Notes 5 and 6) 28,536 21,802
{ I
$751,293 $727,044 i
)
20 u _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
1 l (Dollars in Thousands) December 31, 1986 1985 i j i
.CIpitalization and Liabilities - j Ccpitalization (See separate statement): !
' Common share investment $275,010 $255,343 ;
Redeemable preferred shares, less current sinking j fund requirements 33,920 36,740 '! Long-term debt, less current sinking fund requirements and maturities 235,164- 160,240 l 544,094 452,323 CIpital Lease Obligations (Note 10) 8,887 7,869 Current Liabilities: Interim Financing- (Note 7) 4
. Notes payable to banks 28,660 61,250 i Maturing long-term debt - 15,236 43,837 43,8 % 105,087 ~
' Other Current Liabilities- ,
Current sinking fund requirements 4,341 6,103 i Accounts payable 51,797 65,036 Accrued taxes-Local property and other 8,620 8,694 - Income 17,566 9,006 Accrued interest . 3,534 3,892 , Dividends declared 6,761 6,572
. Capital lease obligations (Note 10) 2.523 3,290 Other 8,219 11,250 147,257 218,930 Deferred Credits:
Unamortized investment tax credits 38,653 37,263 Other 12,402 10,659 51,055 47,922 Ccmmitments and Contingencies (Note 6)
$751,293 $727,044 the accompanying notes are an integral part of these consolidated financial statements.
'21 COMEnergy
^ 3 Consoliilated Statements of Cash Flow !'
' Commonwealth Energy System and Subsidiary Companies i
(Dollars in Thousands)
' Years Ended December 31, 1986 1985 1984 .
i 1' p Cash Flow From Operating Activities: L Net income $41,173 - $ 43,962 $ 44,968 Gain on sale of interest in Algonquin Energy, Inc., net (5,124) -- - [ Effects of non-cash adjustments- ) Depreciation and amortization 24,609 23,139 22,345 L Deferred income taxes - long-term 8,883 10,344 16,000 Investment tax credits, net 1,390 3,866 1,398 Allowance for equity funds used during construction (7,218) (5,420) (3,930) Change in working capital (exclusive of cash)- Accounts receivable and unbilled revenues 18,793 ($,113) (9,355) Accrued income taxes 8,560 538 (7,167)
' Local property and other taxes 818 1,378 (2,746)
Accounts payable and other (16,248) 2,335 3,550
- All other operating items 1,367 2,960 12,075 Net cash flow from operating activities 77,003 77,989 77,138 Cash Flow From Investing Activities
Additions to property, plant and
. equipment (exclusive of AFUDC) l Electric (59,935) (38,157) (33,092)
! Gas (16,244) (15,263) (11,439). Other (1,141) (1,086) (368) Allowance for funds used during construction (13,270) (14,528) (13,661) Purchase of land and facilities (16,300) - - i Acquisition of remaining equity in Hopkinton LNG Corp. - (2,500) .- Dividends from corporate joint ventures 2,722 17,919 5,940 Equity in earnings from corporate joint ventures (3,868) : (9,041) (7,704) Proceeds from sale'of interest in Algonquin Energy, Inc., net 42,182 - - Net cash used for investing activities (65,854) (62,656)- (60,324) Cish Flow From Financing Activities: Sale of common shares 6,325- 6,608 6,108 Payment of dividends (27,831) (25,661) (23,355) ! Proceeds from (payment of) short-term borrowings (32,590) 7,150 (8,100) Long-term debt issues 112,540 - - Retirement of long-term debt and preferred shares through sinking funds (8,175) (6,518) (5,285) Long-term debt issues refunded (60,862) - (2,286)
- Net cash used for financing activities (10,593) (18,421) (32,918)
Net increase (decrease) in cash $ 556 $(3,088) $(16,104) The accompanying notes are an integral part or these consolidated financial statements. l I 22 l
Consolidated Statements of Capitalization 1
. Commonwealth Energy System and Subsidiary Companies l i (Dollars in Thousands) i December 31, 1986 1985 Common Share Investment: -- Common shares, $4 par value . I L Authorized-12,000,000 shares . l i Outstanding-9,328,666 in 1986 and 9,160,357 in 1985 $ 37,315 $ 36,642 -
k Amounts paid in excess of par value- 64,290 58,638
' Retained earnings (Note 4) 173,405 160, % 3-Total common share investment 275,010 255,343 ihdeemable Preferred Shares, Cumulative, $100 par value (Note 3):
Series A,4.80% 3,840 3,960 Series B, 8.10% 5,760 5,920 Series C,7.75% 13,140 13,680 Series D,9.80% ._ 13,000 15,000 Less current sinking fund requirements (1,820) (1,820)
-Total redeemable preferred shares 33,920 36,740 )
Long Term Debt, including premiums (Note 7): System Bonds, collateralized by common stock of utility operating subsidiaries, due-1987, 6% % ' 12,751 12,908
'1988, 6% % 2,625 2,795 3' 1996, 8% % - 3,457 3,557 I999, 4.80 % 2,475 2,700
' Less current sinking fund requirements (13,115) (521)
Total System long-term debt 8,193 21,439 Subsidiary companies' long-tenn debt
. Mortgage Bonds, collateralized by property of operating subsidiaries, due-1992, 8% % - 4,550 5,250 1993, 9 % 9,612 9,870 1996, 7 % 9,784 11,198 1996, 10% % 2,436 2,740 1996, 8.99 % 10,000 -
2001, 8.99 % 40,000 - 2006, 8.85 % 35,012 35,013 2007,-11% % 9,300 9,300 Notes due-1986, 4% % - 3,837 1986, variable rate 8.71% - 26,000 1986, variable rate 8.70% - 4,000 1986, variable rate 8.71% - 10,000 1986, variable rate 9.93% - - 5,375 1987, 4.90 % 2,485 2,520 i
' 1988, 3% % 3,190 3,241 l' 1992, 5% % 8,048 8,222 1992, 8.48 % 10,000 -
1993, 8.40% from 1987-91 and variable from 1992-93 5,000 - 1995, 8% % - 6,103 6,275 1997, 6% % 4,805 4,865 1997, 6% % 4,815 4,912
'1998, 8% % 14,444 15,033
' 2000, 10% % - 11,908 j 2001, 9 % % 3,000 3,200 2002, 7 % % 3,489 3,641 2002, 9.30 % 25,540 -
2012, 9.37 % - 20,000 - Less current sinking fund requirements and maturities (4,642) (47,599) Total subsidiary companies' long-term debt 226,971 138,801 Total long-term debt 235,164 160,240 I Total capitalization $544,094 $452,323
. The secompanying notes we an integral part ot these onsolidaed (inancial statements.
23 COMEnergy ;
Consolidated Statements of Changes in Common Shareholders' investment Commonwealth Energy System and Subsidiary Companies I
. Years Ended December 31,1986,1985 and 1984 (Douars in Thousands)
Amounts Par Value Paid in
$4 Per Excess of Retained Shares Share Par Value Earnings Total Balance December 31, 1983 8,596,802 $34,387 $48,177 $120,149 $202,713
- Add (Deduct)-
Net income . - - - 44,968 44,968 ; Sale of shares . 307,284 1,229 4,879 - 6,108 )
' Cash dividends declared-Common shares-
$2.27 per share - - - (19,932) (19,932)
Preferred shares - - - (3,423) (3,423) Balance December 31,1984 8,904,086 35,616 53,056 141,762 230,434 Add (Deduct)- Net income - - - 43,962 43,962 Sale of shares 256,271. 1,026 5,582 - 6,608 Cash dividends declared-Common shares-2 $2.47 per share - - - (22,397) (22,397) Preferred shares - - - (3,264) (3,264) Balance December 31, 1985 9,160,357 36,642 58,638 160,063 255,343 Add (Deduct)- Net income . - - - 41,173 41,173 Sale of shares 168,309 673 5,652 - 6,325 Cash dividends declared-Common shares-
$2.67 per share - - - (24,751) (24,751)
Preferred shares - - - _ 3,080) ( (3,080) Balance December 31, 1986 9,328,666 $37,315 $64,290 $275,010 _$1; 405 Consolidated Statements of Changes in Redeemable Prefened Shares
' Years Ended December 31,1986,1985 and 1984 Authorized and Outstanding Cumulative Preferred Shares-5100 Par Value Series A Series B Series C Series D Total -
4.80Vo 8.109o 7.75Vo 9.80Vo Shares Balance December 31, 1983 42,000 62,400 147,600 170,000 422,000 Less-Sinking fund redemptions 1,200 1,600 5,400 10,000 18,200 i Balance December 31, 1984 40,800 60,800 142,200 160,000 403,800 j- Less-Sinking fund redemptions 1,200 1,600 5,400 10,000 18,200 I Balance December 31, 1985 39,600 59,200 136,800 150,000 385,600 Less-Sinking fund redemptions 1,200 1,600 5,400 _ 2 _0,000 28,200 Balance December 31,1986 38,400 57,600 131,400 130,000 357,400 J The accompanying notes are an imegral part of these consolidated rinancial statements. [-- 24 i - - _ _ _ _ - - _ - _ _ _ _ _ _ _ _ _ _ _
Notes to Consolidated Financial Statements Commonwealth Energy System and Subsidiary Companies-
.a l
J 1
- 1. Significant Accounting Policies Depreciation Depreciation is provided using the straight-line method at General and Regulatory. rates intended to amortize the original cost of properties Commonv/ealth Energy System, the parent company,is over their estimated economic lives. The average composite.
referred to in thy report as the " System" and together depreciation rates were as follows: with its subsidiaries is sometimes collectively referred to as "the system." The operating companies are regulated ; by various authorities including the Federal Energy 1986 1985 1984 Regulatory Commission (FERC) and the Massachusetts Elec'ric 3.69 % 3.67 % 3.65 % ; Department of Public Utilities (DPU). Gas 3.03 3.03 3.02 Steam 3.56 3.52 3.58 Principles of Consolidation LNG 4.69 4.69 4.38 The consolidated financial statements include the accounts Allowance for Funds Used During Construction of the System and all of its subsidiary companies. All Under applicable rate-making practices, system companies sigmficant intercompany accounts and trarisactions have are permitted to include an allowance for funds used during been elimmated in consolidation. construction (AFUDC) as an element of their depreciable property costs.This allowance is based on the amount of Rect:ssifications Construction Work In Progress (CWIP) which is not Certain 1985 and 1984 amounts have been reclassified to , included in the rate base on which utility companies earn - conform with the presentation used in the 1986 financial a return. An amount equal to the AFUDC so capitalized - statements, n the current period is reflected in the consolidated statements of income. Equity Method of Accounting
. As a result of a 1984 FERC compliance audit and The system uses the equity method of accounting for
, , subsequent settlement, Canal Electric Company modified -
investments in corporate jomt ventures. Under this its method of computing AFUDC for the Seabrook project . method, it records as income the proportionate share of by reducing Seabrook CWIP by the related accumulated the net earnings of the jomt ventures with a correspond-
, deferred income taxes. The computation of the AFUDC ing increase in the carrying value of the investment. The rate was also modified. The effect of these changes reduced .
mvestment amount is reduced as cash dividends are the overall AFUDC for the Seabrook project by $2.'5 received.
. million in 1986 which had an after-tax impact of approx-The system does busm.ess with the corporate oin j. . t ventures imately $892,000.
In which it has m, vestments mcludmg Algonqum Energy' While AFUDC does not provide funds currently, these Inc. and four nuclear generat, m g facilities located in New amounts are recoverable in revenues over the service life England. The System sold its 34.5% interest in Algonqum of the constructed property. The amount of AFUDC in July 1986 (see Note 2). recorded was at a weighted average rate of 10% in both Operating Revenues Customers are billed for their use of electricity and gas on a cycle basis throughout the month. To reflect revenues 2. Salg of Algonquin Energy, Inc. in the proper period, the estimated amount of unbilled On July 15, 1986, the System sold its 34.5% ownership sales is recorded each month, interest in Algonquin Energy, Inc., a Massachusetts-based System utility companies are permitted to bill customers natural gas pipeline company, to Texas Eastern Corpora-for the total costs of purchased power, fuel used in elec- tion. The System received $56.3 million for its $20,134 tric production and gas. The amount of such costs incurred shares which had an original cost of $5.9 million and a but not yet reflected in customers' bills, which totaled carrying value, at the time of the sale, of $37.1 million. 53,348,000 in 1986 and $5,466,000 in 1985, is recorded as After a capital gains tax of $14.1 million associated with unbilled revenues. the sale, the System recognized a book gain of $5.1 million. Condensed consolidated financial information of Algonquin is as follows:
1 H . 4 1 Preferred shares may also be called for redemption, in j (Dollirs in Thoustmds) 1986 (1) 1985 1984 whole or in part, in excess of the required and voluntary j Condensed Statements (Unaudited) sinking fund redemptions. The obligation to make j of income as reported mandatory redemptions is cumulative and the System is ! by Algonquin not allowed to pay dividends to common shareholders or i Operating . make optional sinking fund payments if mandatory . l revenues $321,467 $709,528 $771,170 redemptions are in arrears. Details of redemptions for the income before . . four series of Cumulative Preferred Shares are contained income taxes 5 13,690 $ 38,644 $ 35,833 - in the following table: Provision for income taxes 8,312 17,177 18,647. Net income $ 5,378 $ 21,467 $ 17,186 S nking Funds Optional System's equity in Dividend I987'I99I RSdemption . Algonquin's Rate Mandatory Optional Call Prices net income $ 1,857 .$ 7,411 5 5,933 (Dollars in Thousands)
. Adjustment t, Series A 4.80% $ 120 $ 120 $102-epor d earnings 257- (30) 157 Seqes 0 W 160 W to W
.Senes C - 7.75 540 ' 540 103 to 101 Reported equity . . Series D 9.80 1,000 1,000 107 to 101 ;
in earnings $ 2,114 $ 7,381 5: 6,090 Condensed Balance Preferred shareholders have no voting rights except in Sheets as reported the event that six full quarterly dividends have not been by Algonquin paid. In this circumstance, the preferred shareholders are Total assets $246,303 $301,619 $292,668 entitled, voting as a class, to elect two of the nine Less- Trustees of the System. Long-term debt 34,200 34,200 39,900 The preference of these shares in involuntary Other liabilities and liquidation is equal to par value. The shares are of equal-deferred credits 104,820 162,502 122,282 rank and are entitled to cumulative dividends at the annual Net assets $107,283 $104,917 . $130,486 - rate established for each series. No dividend can be System's equity in declared on any series unless proportionate dividends are Algonquin's net assets $ 37,038 $ 36,221 $ 45,049 concurrently declared on the other outstanding series and-Adjustment to - in the event that dividend payments are in arrears, the Algonquin's System may not redeem any shares unless all shares of all
. reported earnings 20 (237) (207) preferred series are redeemed.
Reported equity in net assets S 37,058 $ 35,984 $ 44,842 4. Dividend Restriction At December 31, 1986, approximately $37,063,000 of
- (1) Through Junc 30,1986 consolidated retained earnings was restricted against the payment of cash dividends by terms of the indentures Dividends received from Algonquin totaled $1,040,000 securing long-term debt.
in 1986, $16,239,000 in 1985 and $4,161,000 in 1984.
- 5. Income Taxes
.3. Redeemable Preferred Shares The system files a consolidated Federal income tax re-The System's four series of preferred shares have been turn. For financial reporting purposes, the System and its issued at par value, $100 per share, and are subject to subsidiaries provide taxes on a separate return basis.
periodic, mandatory sinking fund payments. The System The following is a summary of the consolidated provi-can make additional voluntary redemptions, not exceed- sions for income taxes for the years ended December 31, ) ing the required redemption, at par, on a non-cumulative 1986,1985 and 1984- ) basis, on each sinking fund date. This option was exercised by the System on Jely 1,1986 with the redemption of an additional 10,000 shares of Series D. 26 ; d
., ,.i..,6 ..:- -
'j i
I l (Dollars in Thousands) ' 1986- 1985 1984 Total Federal State Federal State Total Federal State l _ Total ~ Currently payable $12,559 $10,224 $2,335 ' $ 7,769 $ 5,981 51,788 $15,240 $11,922 $3,318 1 Currently. deferred . ' (1,952) (1,316) (636) 6,623 5,857 766 (3,494) (2,996) (498) Long-term deferred 8,883. 7,834 1,049 10,344 9,030 1,314 16,000 14,914 1,086 Investment tax credits, net 1,390 1,390 - 3,866 3,866 - 1,398 1,398 - Tax on gain from sale of: Buildings 446 377 69 609 533 76 2,103 1,704 399' Algonquin Energy, Inc. 14.113 ' 14,113 - - - - - - --
$35,439 $32,622 $2,817 $29,211 $25,267 $3,944 $31,247 $26,942 $4,305 Timing differences result from. reporting income and The total income tax provision set forth above
- expense for tax purposes in periods different from those represents 469e in 1986,40Vo in 1985 and 41Vo in 1984
- used for financial reporting purposes. The system pro- of income before such taxes. The following table reconcites vides income taxes currently on all timing differences. The the statutory Federal income tax rate to these accumulated deferred income taxes.resulting from long- . percentages:
term timing differences are presented as reductions in the assets to which they relate, consistent with rate-making treatment. Additionally, CWIP is presented net of ac- 1986 1985 1984 cumulated deferred income taxes which totaled $19,797,000 Statutory Federal income
. in 1986 and $16,946,000in 1985. Deferred charges have also tax rate 46 % 469o 469e' been presented net of accumulated deferred income taxes increase (Decrease) from which totaled $8,808,000 in 1986 and $8,577,000 in 1985. statutory rate:
The system's long-term deferred provision for income Effect of capital taxes results from the following: gain from sale of Algonquin Energy, Inc. 7 - - Effect of capital gain from (Dollars in Thousands) 1986 1985 1984 Eff of d v nd received Abandonment of . deduction (2) (4) (4) Seabrook Unit 2 746 $ (159) $ 6,626 State tax net of Federal tax Accelerated depreciation . benefit 2 3 3-for tax purposes 5,470 5,434 5,061 Amortization of investment Capitalized interest tax credits (2) (2) (2).
-: during construction - 3,429- 5,117 5,262 Allowance for equity funds Cancelled nuclear units .- (69) (635) used during construction (4) (3) (2)
Other (762) 21 (314) Other, net - 1 1 Long-term deferred 46 % 40Vo 41 % income tax provision $ 8,883 $10,344 $16,000 - - - The tax effects of unbilled revenue of $3,882,000 and 6. Commitments and Contingencies
. other current timing differences are included in the current Construction deferred provision and accrued income taxes. Investment The system is engaged in a continuous construction program tax credits are deferred and amortized over the life of the presently estimated at $421 million for the five-year property givmg rise to the credits, in accordance w,th i the period 1987 through 1991. Of that amount, $96 5 million Tax Reform Act of 1986, investment tax credits were is estimated for 1987, including $19.3 million related to recorded in 1986 based upon the transition rules ,m the Act. the system's 3.52% interest in the Seabrook project, discussed on pages 28-29. The program is subject to periodic review and revision. See Management's Discussion on page 15 for a description of the system's f'mancing plans.
_ 27 COMEnergy
- i Seabrook Status Emergency evacuation planning is expected to continue '
The system's interest in the Seabrook project (project) is to be a controversial issue. Legislation has been proposed
. owned by Canal Electric Company (Canal) to provide for to require a ten mile evacuation zone for all nuclear plants the capacity and energy needs of Cambridge Electric Light and to give governors veto power over the licensing of new Company (Cambridge) and Commonwealth Electric Com- nuclear plants in or near their states if they determine that pany (Commonwealth). The project, which is currently the proposed evacuation plans are inadequate. It is not under the management of New Hampshire Yankee possible at this time to predict what will result from these (NiiY), a division of Public Service Company of New and other legislative proposals or what impact will result Hampshire (PSNH), was originally designed to have two on the evacuation planning process.
pressurized water reactors, each with a rated capacity of 1,150 MW. Regulatory Matters in April 1985, the DPU rendered its decision in a financing Seabrook Unit 1 proceeding (subsequently affirmed on appeal) involving Construction of the unit is now considered complete. Canal and three other Massachusetts joint-owners effec-However, difficulties and delays in plant licensing pro- tively denying their financing requests for Unit 1. However, cedures have resulted in postponement of the commercial the DPU stated that it was not precluding the investor-
. operation date until at least into 1988 and may, in fact, owned utilities from continuing to attempt to finance prevent commercial operation of the unit.' At December . additional Unit I construction by means, if any, which 31, 1986, Canal's expenditures in the unit were $182 do not require DPU approval. If financings requiring million, including AFUDC and nuclear fuel. Assuming DPU approval were to be used, such approval would be i for financial planning purposes a commercial operation conditioned on assurances by the utilities that the financial date of November 1987, Canal's investment in Unit I will risks associated with their continued participation in the be $201 million, project would be placed solely on their shareholders. The The unit has successfully completed all operating tests DPU indicated that it did not expect shareholders to of the main components, including a containment absorb the cost of expenditures up to the date of this building structural integrity test and a loss of off-site decision, provided that they were prudently incurred.
power test in the first half of 1986. Canal's share at that time was approximately $129.1 In the fourth quarter of 1986, the Nuclear Regulatory million. Canal will need to arrange permanent financing Commission (NRC) issued a conditional facility operating of its Seabrook related expenses and plans to do so upon license which permitted the loading of nuclear fuel for commercial operation of the plant. zero-power testing. The next step is low-power testing, Also in April 1985, the DPU had denied authority to , which will involve power production at a maximum 5% Massachusetts Municipal Wholesale Electric Company ! of capability. The NRC has delayed its approval of low- (MMWEC), a public power corporation, to issue bonds ! power testing until it considers the issue of whether to pay for further construction costs of its ownership emergency response and evacuation plans covering six interest in Unit 1. However, in January 1987, the DPU Massachusetts communities must be submitted first. approved a subsequent MMWEC request to issue $164 million in long-term debt to refinance the more expensive Emergency Response Plans short-term debt incurred for Seabrook related costs. In order to meet the conditions established by the NRC for full power operation, the approval of the Federal Seabrook Unit 2 Emergency Management Agency (FEMA)is required for Canal discontinued recording AFUDC on its Unit 2 in-emergency response plans for Unit 1, including evacua- vestment as of March 31,1984 as a result of a decision tion plans for those cities and towns within a ten mile by Canal's Board of Directors that the unit should be radius of the plant site. In September 1986, the Governor abandoned. In November 1986, the joint-owners , l of Massachusetts refused to submit such plans for the six authorized NHY management to begin the sale of all Massachusetts communities included in that zone. As a salvageable equipment and components from Unit 2 and result of this action, and as permitted by NRC licensing to return the construction permit for that unit to the procedures, NHY filed a request with the NRC in December NRC. The unit was approximately 25% complete when ! 1986 for a reduction in the emergency planning zone to a construction was halted in 1984. Since that time, funds ; ) one-mile radius. At the same time, NHY pledged to have been spent only to preserve and protect the equip- y ) honor its commitment to work voluntarily with all towns ment and components. l within 10 miles of the plant to develop the best possible emergency response plans, regardless of the NRC's decision on this request. i l 28 L_ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
P . i' p i b a
. In September 1986, Canal filed with the Federal Energy all rights to' the recovery of its investment. However, the !
L Regulatory Commission (FERC) new rates designed to system is unable to predict the outcome of future 1 recover its Unit 2 costs of $23 million. In November regulatory proceedings, the amount of investment :1 1986, FERC allowed the rates to become effective April recovery which will be allowed, or the recovery period. 11, 1987, subject to refund. These rates do not include-
. carrying costs. In accordance with the FERC order, an Power Contracts '
~ investigation and public hearings will follow in due- ~
The various subsidiaries have long-term contracts for thel
! course, the outcome of which cannot be predicted by purchase of electricity from various utilities. Generally,-
i-
- Canal at this time. ..
these contracts are for fixed periods and require payment
.. Two other proceedings are before FERC involving other of a demand charge for its entitlement in the generating _
joint-owners' recovery of Seabrook 2 costs and are at ad- capacity of each unit and an energy charge to cover the l vanced stages of resolution. In one case, a settlement has cost of fuel.~ Total costs under these contracts are includ- L
. been reached providing for seven years amortization of ed in electricity purchased for resale in the consolidated' ,
.85% 'of that company's costs and the other case is before ' statements of income and are normally recoverable in FERC on briefs. . . .
revenues under the system's power cost charges or base - In one of those proceedings, now pending before FERC, rates.
~ the agency is expected to determine whether carrying
- costs on unamortized abandoned plant' costs are Replacement Power Costs ., . .. ,.
L recoverable. In the event that such costs are determined . The system's electric distribution subsidiaries have Power -
. by the FERC to be recoverable; Canal will seek to . Cost Charge rate schedules subject to DPU regulation ;
recover the carrying costs associated with its Unit 2 which provide for the separate computation and' billing i
? investment. of purchased power, fuel used in electric production and ..
transmission costs to retail customers?
.'Other Seabrook Related Matters : The current statute, under which Massachusetts electric In December 1986, the Financial Accounting Standards- companies may seek current recovery of substantially all-
- Board issued Statement .No. 90, t' Regulated Enterprises ' fuel and purchased power costs, requires that the DPU,-
- Accounting for Abandonments and Disallowances at least annually, review the performance of such 'come of Plant Costs." The Statement, which the system will panies, including the performance of certain of those adopt in~1988, requires that recoverable costs associated companies' suppliers of electricity.
with an abandoned plant must be reflected in the finan- As a result of such performance reviews, the DPU <
- cial statements at the present value of future revenues disallowed the collection by Commonwealth, through its
.~using an incremental borrowing rate as the discount rate 1 Power Cost Charge, of a portion of the costs incurred whenever the return allowed on recoverable costs is less for replacement power required 'during an' extended =
than the incremental borrowing rate. The Statement also outage of Pilgrim Unit 1 in 1981-1982. Pilgrim is owned
- requires the recognition of a loss for disallowed costs of and operated by Boston Edison Company (BECO) and -
- a completed plant.- At this time, Canal is unable to deter- Commonwealth purchases approximately 11% of the '
- mine what Seabrook costs, if any, will not be allowed capacity and energy of the unit under a life-of-the-unit n, recovery in rates. contract. The DPU found that part of the outage period .
Canal's costs associated with Seabrook Units I and 2 was due to' imprudent conduct by BECO and imputed 1 are subject to a Capacity Acquisition Agreement with its such imprudence to Commonwealth. There was no finding customers, Cambridge and Commonwealth. This Agree- that Commonwealth itself had acted unreasonably or - ment, which has been accepted for filing as a rate schedule imprudently. By reason of the finding of imputed' i by FERC, entitles Canal to recover costs incurred in imprudence, however, the DPU further ruled that - connection with any unit covered by such Agreement . Commonwealth could not recover certain replacement - Lwhether or not the unit becomes operational. Accordingly,- power costs. The DPU interpreted the governing adjust- :
, Canal intends to bill Cambridge and Commonwealth ment clause statute to allow collection only of prudently L which, in turn, will bill those charges to their retail incurred costs of fuel and purchased power. Commonwealth f customers through rates which are subject to DPU appealed the DPU's decision to the Massachusetts regulation.
I: The system believes that its subsidiaries' participation in the project from its inception has been prudent, reasonable, appropriate and an integral and necessary l: o . element in planning for the power needs of its electric sustomers. Accordingly, the system will vigorously pursue b 29 COMEnergy
y ^ ._ IL Supreme Judicial Court (the SJC), which upheld the 7. Interim Financing and Long-Term Debt
. decision in 1986. The SJC broadly construed the DPU's Notes Payable to Banks '
(tuthority to review and disallow collection of replacement System companies have bankm, g relat,onships under i
' power costs, based solely upon findings of imputed ~ imprudence and ruled that such action is not preempted which borrowings are arranged as required for mtenm j , by Federal law nor otherwise prohibited by the United financing of their construction programs. The borrowings l St tes Constitution. Commonwealth subsequently sought are unsecured and are evidenced by notes having maturities 1 rehearing on the basis of a later decision of the United of 90 days or less. Lines.of credit with banks, against St tes Supreme Court, but the SJC denied rehearing. which these notes are applied, total $131,000,000.
Commonwealth filed a petition with the United States The terms of one hne of credit require the payment of ; Supreme Court for a writ of certiorari concerning the DPU's a fee equal to % of 1% of the line. Another line requires -] decision. The final outcome could have a . si;;nificant that when the system is borrowing, it must maintain normal. j financial impact on the System since these disallowed ' perating balances for cash demand and bank service i costs are absorbed by the shareholder, not the ratepayer. charges. Interest rates on the outstanding borrowings are at the
/There can be no assurance that further review or other action which may be sought by Commonwealth will bel lower of an adjusted money market rate or the prime granted nor that it will produce a different result. rate. At December 31,1986, notes payable to banks totaled The DPU has also disallowed Commonwealth recovery . $84,200,000. For financial reporting purposes, $55,540,000 of certain replacement power costs by reason of imputed was reclassified to long-term debt to reflect repayment of . ;
-imprudence with respect to a 1984 Pilgrim Unit i outage notes payable from the proceeds of two financings which and disallowed Cambridge recovery of certain replace-L closed in early January 1987. Commonwealth's financing.
agreement was executed in two parts -- $30 milhon at ment power costs by reason of imputed imprudence that; 1
- it found in connection with a 1984 outage of the Connec- 9.30% for a term of 15 years and $20 milhon at 9.37%. j ticut Yankee Atomic Power Company plant, from which I r 25 years. Cambridge's financmg agreement for $10 Cambridge purchases power. Both of these decisions have milhon is at 8.48% for 5 years.
. been appealed and are pending before the SJC.
I.ong-Term Debt Maturities The System believes that further cost disallowances , Under terms of the,ri various indentures, the System and may occur from time to time based upon the DPU's certam subsidiary companies are required to make
' finding of supplier imprudence regardless of the , ,
L reasonableness and prudency of the actions of the pen die smkmg fund payments for retirement,of , utstandmg long-term debt. The required sinkmg fund j System's subsidiaries. For example, in another recent payments and balances of maturmg debt issues for the proceeding involving BECO, the DPU disallowed BECO's five years subsequent to December 31,1986 are as recovery of certain replacement power costs incurred
- during a Pilgrim Unit 1 outage in 1985. The issue of I II *8 Commonwealth's recovery of replacement power costs ,
m incurred during the same outage period has been raised, Sinking Fund Payments Maturing but deferred to future proceedings for resolution. In Debt addition, Pilgrim Unit I has been out of service since . Year System Subsidiaries issues Total April 1986 due to safety concerns and while BECO plans (Dollars in Thousands) 1987 $364- 52,157 515.236 $17,757 to return Pilgrim Unit'l to service in mid-1987, it is. 9,141 1988 280 3,170 5,691 uncertain as to when the unit will return to service. During the shutdown, BECO's management of the plant
, has been severely criticized by legislators and regulators 1991 280 6,820
""~
3[ 3 7,100
- at both the state and Federal levels. It is highly probable that this outage will be the subject of a future perfor-m'.nce review by the DPU and could result in future disallowances to BECO as well as imputed imprudency
. disallowances to Commonwealth. Commonwealth has
' been incurring excess replacement power costs at a rate of cpproximately $30,000 per day since April 1986 or
, approximately $8 million through December 31,1986.
;The system cannot predict the amount of replacement
.' power costs, if any, it may not ultimately recover as a result of the 1986-1987 Pilgrim Unit 1 outage.
t !5
l l 1 1 1 i 80 Employee and Postretirement Benefits 9. Sale of Buildings In September 1984, COM/ Energy Realty Trust and i) The system has a noncontributory pension plan covering j substantially all regular employees who have attained the COM/ Energy Cambridge Realty, wholly-owned sub-age of 21. Pension costs are funded as accrued and include sidiaries of the System, sold the System's corporate
- amounts applicable to prior service costs which are being headquarters office complex located in Cambridge,-
amortized over a period of 30 years. Total pension ex- Massachusetts. The sale yielded an after-tax gain of pense was approximately $7,480,000 in 1986, $6,909,000 approximately $6.1 million, $4.3 million of which was '; in 1985, and $6,731,000 in 1984 The assumed rate of recognized in 1984. Due to the lease-back and continued i return used in determining the actuarial present value of occupancy of the properties by certain subsidiaries of the j accumulated plan benefits was 7H% in each of these System, accounting principles require that the remaining . l years. $1.8 million of the after-tax gain be deferred and amortized j A comparison of accumulated benefits and net assets ratably over the lease term. Approximately $1.1 million for the system's benefit plan is presented below: of the after-tax gain was recognized in 1985 and the re- ! maining $700,000 was recognized in 1986. 5 January 1, (Dollars in Thousands) 1986 1985
- 10. Lease Obligations System companies lease property and equipment under Actuarial present value of agreements, some of which are capital leases. Several .
accumu ated plan benefits:
$85,964 subsidiaries renegotiated certain lease agreements during .
3J24 ,
' Nonvested 2,106 1,331 1986. These new agreements are for a term of one year :
"" "*"**"
- Y ' ' * * * ' "*#8Y #"
$ 95'830 $87'295 vices Company, the System,s major capital lessee, has Net assets available for benefits $101,360 $79,880 agreements in effect for office furniture, computer, transportation and other equipment, one of which is supported by a letter of credit. Generally, these -
During 1985, the Financial Accounting Standards agreements require the lessee to pay related taxes, Board issued new standards on employers' accounting for maintenance and other costs of operation. The system pensions. Companies, such as ours, are required to adopt - anticipates that in the normal course of business, leases the new expense calculation and disclosure standards in will generally be renewed or replaced by other leases. the first quarter of.1987 and, in certain circumstances, to Leases currently m effect contain no provisions which _ reflect a minimum pension liability no later than 1989. prohibit system companies from entermg mto future lease These new standards will be adopted prospectively, and agreements or obligations. thus the financial statements included herein will not be The followmg is an analys,s, i by major class, of proper-restated. It is not expected that the new standards will ty under capital leases at December 31,1986 and 1985: have a material impact on the System's financial position
,or results of operations.
In addition to providing pension benefits, the system (D !!ars in Thousands) 1986 1985 provides certain health care and life insurance benefits for retired employees. Substantially all of the system's Office furniture and computer equipment S t3,596 $ 8,097 employees may become eligible for those benefits if they
'Iransp rtati n eqmpment and ther 108 4,759 reach normal retirement age while working for a subsidiary of the System, or if their age plus years of service at 13,704 12,856
'(early) retirement equals 75 or more. The cost of retiree Less: Accumulated amortization 2,294 1,697 health care and life insurance benefits is recognized as $11,410 $11,159 claims are paid, and totaled $1,253,000 in 1986, - -
- $1,202,000 in 1985 and $939,000 in 1984.
The system has an Employees Savings Plan which provides for system contributions equal to contributions
' by eligible employees up to four percent of each employee's compensation rate. The total system contribution was
$2,962,000 in 1986, $2,719,000 in 1985 and $2,537,000 in 1984.
31 COMEnergy
Future minimum lease payments, by period and in the The amount of identifiable assets represemed by the aggregate, of capitalleases and non-cancellable operating system's investment in corporate joint ventures consists leases consisted of the following at December 31,1986: principally of a percentage ownership in the assets of four regional electric generating plants. The system's ownership interest in the assets of Algonquin Energy, Capital Operating Inc. was sold in July 1986 (see Note 2). J (Dollars in Thousands) Leases _ Leases 1987 $ 3,335 $ 3,705 (Dollars in Thousands) 1986 1985 1984 ; 1988. . 3,263 3,072 ; 1989 1,646 2,030 Revenues from Unaffiliated 1990 .1,462 243 Customers: Electric $373,882 $415,723 $465,891 yond 1991 1, 2 Gas 228,113 248,901 242,617
. TotM future minimum lease payments 13, % 8 $10,717 Steam and other 10,945 13,453 15.139 , Less: Estimated interest element Total included therein 2,558 Consolidated 3 Estimated present value of future Revenues $612,940 $678,077 $723,647 j minimum lease payments - Operating income Before income Taxes:
Electric $ 42,747 $ 45,823 $ 49,507 Total rent expense for all operating leases, except those Gas 16,507 20,449 21,418 ' Steam and other 1,551 .2,765 1,674 with terms of a month or less, amounted to $5,900,000 in 1986, $3,248,000 in 1985 and $2,022,000 in 1984. Thert Total Consolidated were no contingent rentals and no sublease rentals for the Operating j income $ 60,805 $ 69,037 $ 72,599 ! ye*rs 1986,1985 and 1984, I In addition, the system has pre-1983 property under Identifiable Assets: c7pitallease which is not required to be recorded on Electric $526,862 $489,755 $479,169 the balance sheet, consistent with Financial Accounting Gas 177,000 178,799 176,915 St:ndards lloard Statement No. 71 transition period Steam and other 59,367 37,290 24,660 rules. The present value of this lease, net of amortiza- 763,229 705,844 680,5
~ tion, amounts to $5.3 million at December 31,1986. The Intercompany system also has an obligation for its 3.9% entitlement eliminations (22,794) (25,724) (50,975)
' in transmission facilities which approximates $5.5 million. Investment in corporate joint ventures 10,858 46,924 57,412
- 11. Segment Information Total
. . Consolidated System companies provide electric, gas and steam services Assets $751,293 $727,044 $687,181 to retail customers in communities located m central and eastern Massachusetts and, in addition, sell electricity at Depreciation Expense:
Electnc $ 17,699 $ 16,490 $ 15,813 wholesale to Massachusetts customers. Other operations C*8 of the system 3g,am and other 6 ! rental propert, include ies and the development other activities which do not and operation of ! presently contribute significantly to either revenues or Total , Consolidated
- operating income. Depreciation $ 24,609 $ 22,921 $ 20,586 i Operating income of the various industry segments in.
ciudes income from transactions with affiliates and is ex-, gdgge,alJaforgatgrgins
,,, to property
, additions is shown in the
. clus,ve i of interest expense, income taxes, and equity in earnings of unconsolidated corporate joint ventures which 1 provide energy and services for the system's gas operations, i
i 32
Selected Financial Data Commonwealth Energy System and Subsidiary Companies t (In Thousands Except Common Sharc Data) 1986 1985 1984 1983 1982 Operating Revenues: Electric $373,882 $415,723 $465,891 $356,895 $361,908 Gas 228,113 248,901 242,617 246,224 231,003 Steam and other 10,945 13,453 15,139 16,536 14,170 Total $612,940 $678,077 $723,647 $619,655 - $607,081 Net Income $41,173 $ 43,%2 $ 44,%8 $ 42,728 $ 23,597 Common Share Data-Earnings per share $4.12 $4.50 $4.75 $4.63 $2.45 Dividends declared per share $2.67 $2.47 $2.27- $2.04 $1.90 Weighted average shares outs:anding 9,253,694 9,040,220 8,747,626 8,451,316 8,103,922 Total Assets $751,293 $727,044 $687,181 $668,412 $615,506 Long-term debt _ $235,164 $160,240 $200,721 $206,303 $186,374 Redeemable preferred share investment 33,920 36,740 38,560 40,380 - 42,200 Common share investment 275,010 255,343 230,434 202,713 174,628-Total Capitalization $544,094 $452,323 $469,715 $449,396 $403,202 (Dollars in Thousands Except Per Share Amounts) 1986 by Quarter 1st 2nd 3rd 4th Operating Revenues $210,856 $126,163 $117,799 $158,122 Operating income 14,791 5,587 8,2 % 11,251 Income Before Interest Charges 19,186 7,364 16,1 % 13,689 Net Income 16,153 4,837 9,336 10,847 Earnings per Common Share 1.67 .43 .93 1.09 Dividends Declared per Common Share .63 .68 .68 .68 Closing Price of Common Shares-High 37 39% 45% 43% Low 29% 34% 38 38 (Dollars in Thousands Except Per Share Amounts) 1985 by Quarter 1st 2nd _ 3rd 4th Operating Revenues $227,255 $125,392 5138,079 $187,351 Operating income 15,884 7,366 5,383 11,802 , Income Before Interest Chaiges 21,577 9,767 9,464 16,857 Net income 17,897 6,724 6,204 13,137 Earnings per Common Share 1.91 .65 .59 1.35 Dividends Declared per Common c'are .58 .63 .63 .63 Closing Price of Common Shares-High 24% 29% 30% 30% Low 22% 23% 26% 26% 33 COMEnergy
- a Comparative Statistical Data-1986-1977 ;
Commonwealth Energy System and Subsidiary Companies 1 l l l 1986 1985 1984-() rations (Dollars in Thousands) Operating expenses-
. Operations 475,917 536,017 583,770 Maintenance 34,765 32,261 28,899 i Depreciation 24,609 22,921- 20,586 ;
Taxes 37,724 46,443 46,937 Total 573,015 637,642 680,192 i
> Operating income 39,925 - 40,435 43,455 Other income 16,510 17,230 18,589 ;
Total income 56,435 57,665- 59,044. l' Interest charges 15,262 l 13,703 14,076 Net income 41,173 43,962 . 44,968 Preferred dividends 3,080 . 3,264 3,423 1 Earnings applicable to common shares $ 38,093 $ 40,698 5 41,545 l ' Sources of Consolidated Net income-Electric $ 23,576 $ 26,323 . $ 23,588 - Gas - 6,295 7,426 8,251 Steam and other 11,302 10,213- 13,129 Total $ 41,173' S 43,962 . $ 44,968 Fixancial (Dollars in Thousands) Property, plant and equipment . .
- (including construction work in progress, net) $927,876 - $832,551 - $741,710
' Accumulated depreciation 262,892 248,547 ' 216,514 Accumulated deferred income taxes 91,258 85,457 75,507 Capitalization- '
Long-term debt $250,400 - $204,077 $200,721 Preferred shares 33,920 36,740 38,560 Common equity 275,010 255,343 230,434
. Total - $559,330 $496,160 - $469,715 St:tistics and Ratios Unit sales-MWH -Retail 3,908,642 3,734,360 3,552,535 .
Wholesale 2,088,355 2,191,032 2,557,652 MMCF-Firm 33,541 34,081 32,568 Interruptible 2,328 3,269 - 4,741 Capitalization ratios- ,
, Long-term debt 44.8 % 41.1 % 42.7 % '
Preferred shares 6.1 7.4 8.2 Common equity 49.1 51.5 49.1 Total 100.0 % 100.0 % . 100.0 % Return on common equity 14.4 % 16.8 % 19.2 % Common share dividend pay-out 65.0 % 55.0 % 48.0% - Average price / earnings ratio 9.1 5.9 4.4 r Data Per Common Share i Earnings per share * $ 4.12 $ 4.50 $ 4.75 ! Dividends paid 2.62 2.42 2.22 l Annual dividend rate at end of year 2.72 2.52 2.32 l Book value 29.48 27.87 25.88 Common share closing price range-
- High 45% 30% 25 Low . 29% 22% 16%
'
- Based on the weighted average number of shares outstanding.
34
e m 1
~ - .
U
]
l I H 1983 1982 1981 1980- 1979' 1978 1977
^
$619,655 $607,081 $563,455 $512,535 $386,843 $339,195 $359,746 l
.j 479,883 491,569 ' 453,787 394,683 285,678 . 236,264 255,942 25,780 26,371 :24,410 21,702 16,422 15,505 14,174 19,846 18,436 -18,188 17,172 16,721 16,119 15,590 50,373 . 38,131 38,114 43,878 37,770 41,277 42,368 575,882- 575,007 534,499 477,435 356,591 309,165 . 328,074 43,773 32,074 28,956 35,100 30,252 30,030 31,672' 14,262 ' 8,504 10,863 9,097 7,170 6,490 4,463
.58,035 40,578 39,819 44,197 !37,422 36,520 36,135 15,307 16,981 18,562 17,272 14,707 14,652 14,676 42,728 23,597 21,257 26,925 22,715- 21,868 21,459 3,601 3,734 3,08 4,033 4,093 ~4,154 4,183
$ 39,127 $ 19,863 $ 17,359 $ 22,892 $ 18,622 $ 17,714 $ 17,276
$ 24,382 $ 15,172 . $ 12,401 $ 15,550 $ 13,939 $ 14,165 $ 14,578 -
10,929 1,162 3,306 6,135 5,257 4,817. 4,837 7,417 7,'263 5,550 5,240 3,519 ' 2,886 2,044 15 42,728 $ 23,597 $ 21,257 $ 26,925 $ 22,715 $ 21,868 $ 21,459
$718,038 $663,245 ~ $613,216 $559,772 $528,674 $504,160 $484,848 '
202,265 186,673- 174,298 160,654 147,068 133,470 121,019-70,732 64,328 61,656 54,475 47,096 43,137 38,668
$306,303 - $186,374 $190,133 $173,764 $180,180 $183,109 $186,699 40,380 42,200 44,020 45,840 47,660 48,480 . 49,300 .
202,713 174,628 164,740 158,898 146,240 138,133 130,551
$449,3% $403,202 $398,893 $378,502 $374,080 $369,722 $366,550 3,349,755 3,164,336 3,072,810 3,121,583 3,048,612 2,974,570 2,888,557 1,396,427 2,109, % 9 2,230,786 2,418,540 2,586,954 2,687,955 3,023,877 30,830 32,448 32,309 33,174 29,590 30,795 29,06'3 -
4,717 3,844 3,586 3,571 4,549 4,674 3,648 45.9 % 46.2 % 47.787o 45.990 48.2 % 49.5 % 50.9Vo 9.0 10.5 11.0 12.1 12.7 13.1 13.5 45.1. 43.3 41.3 42.0 39.1 37.4 35.6 100.0 % : 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0Vo
- 20.7 % - 11.7% 10.7% 15.0 % 13.1 % 13.2Vo 13.6 %
44.3 % 77.8 % 84.9 % $6.3% 64.1 % 62.6 % 60.3 % 4.5 6.5 6.4 4.7 6.1 6.9 7.2 -
$ 4.63 $ 2.45 $ 2.22 $ 3.01 $ 2.50 $ 2.40 $ 2.36 2.00 1.88 1.84 1.66 1.58 1.48 1.40 '
2.12 1.96 1.88 1.72 1.60 1.52 1,44 23.58 21.05 20.78 20.65 19.48 18,63 17.75 J [ e 23 % 19 15% 16% 16% 18% 18% f i 18% 13 12% 11% 13% 15 15% 35 COMEnergy ;
m - y ; Tmsteeimd Officers
>w .; Commonmaltt, Ederry[5ystein and Subsidiary Companies q } / [' *i '
<l
<i
,] 1 ;% s y '
, s 3
Trusted o'i Commonwealth Energy System System Management j 1 c)1 Gerald E Anderson President and Chief Executive
. , Corporate Division '
Officer of the System and Chairman and Chief Executive s
- Gerald E. Anderson, Chairman and Chief Executive Officer L Officer of its prmcipal subsidiaries 0)(4) William M. Cdrier, Jr., Chairman of the Board and m
(" arl G. Cheney, President and Chief Operating Officer President of IbyBahks, Inc., Boston, Massachusetts 1
- 1Jmes M. Brown, Vice Presidmt and Chief Information -
cer
- 0) Hecry Dormitzer, Exhutive Vice President and Chief ;! \-
Operating Officer, W3 man-Gordon Company, Worcester,'
- Peter 3. hf#1ne, @c f' resident - Public Relations p* ;
Masw(tusetts
- Michael P. Sullivan, Vice President, Secretary and f 0)W Jilsynes' H. Fellows, Jr., formerly Vice President - ' General Attdrney l f Finance and Comptrolier, New England Telephoidand . john R. Williams, Vice President - Human Resources
! Telegraph 9 Company, Boston, Mvsachusetts c4 s Williant F, Burt, Assistant to the Chief Executive Officer '
J0'M' franklin M. Hundley, A Managmg Director, Rich, hf3y, .A e l Walter J. Cotting, Assistant Vice President - J Bilodenu & Flaherty P.C., Boston, Massachusettr ,
. (Attomys) , '1i M i 'd 5
Informatio: Services ll
- 0) CahtOly,d, President and Chief Executive Officerg ~ Russell D. Wright, Assistant Vice President - Finance l
Nim Ikgil;' incorporated, New Ysk, Ne York Edwin,M/ Holmes, Treasurer
- 0) Rokrijf Gegfried, Chairman of the hard$f Trustus f John A. Whalen, Comptroller !
of the System, formerly Chahnan of the Board and Chief fixecutive Officer, TheBadger Cgnpany, Inc, ;zs Camtiridge, !klassachusetts ; q 0)D) Sinclair Weeks, Jr., Chairman of the Board, I recident llactric Division ana' Chief Executive Officer, Reed & IWon CotN
- Jerhiah V. Donovan, President and Chief Operating Officer. '
i,M"Taunton, Massachusetts '
/ x S. Robert Fox, Jr., Vice President - Facilities Development
- 0) G3rsid L. Wilson, Dean of the School of Engineering, Vannevar Bush Professor, Masehusetts Institute of y Aterew S. Griffiths, Vice President - Admimstration ']
Technology, Cambridge, Massachusetts i Pobert E. Hes. ley, Vice President - Human Resources j
. Ronald F. MacDonald Vice President - Customer Services
' IN Membu of Audit' Committee M Manter of Executive Compensation Committee Jche M. Powers, Vice President - Energy Supply On Member of Nominating Committee W Member of Benefit Review Committee Gas Division
[ The name " Commonwealth Energy System" means the trustees for the sime bemg (as trustees but not individual-
- William G. Poist, President and Chief Operating Officer ly) under a Declaration of Trust dated December 31, John J. Connors, Vice President - Human Resources j 1926, as amended, which is hereby referred to, and a and Administration j copy of which has been filed with the Secreiary of The Leonard R. Devanna, Vice President - Gas Supply i Commonwealth of Massachusetts. Any agreement, obligation or liability made, entered into or incurred by Donald Johnson, Vice President - Customer Services or on behalf of said System binds only the trud estate, Kenneth M. Margosslan, Vice President - Facilities and no shareholder, director, trustee, officer or agent Development assumes, or shall be held to, any liability by reason thereof.
- Member of Policy Committee ;
The sole purpose of this report is to give present security holders information about this System and its subsidiary companies and it is not a representation, prospectus or circular in respect to any security of this System or of its subsidiary companies. 1 i 36 i
l: j S]fSteill Facts ] I l 1 l t System Companies Transfer Agents and Registrars Electric Common Shares
' Ccmbridge Electric Light Company Transfer Agent and Registrar:
C;nal Electric Company The First National Bank of Boston Commonwealth Electric Company Preferred Shares - Series A, B, C Gas Transfer Agem: Commonwealth Energy System Commonwealth Gas Company Registrar: State Street Bank and Trust Company Sixm Preferred Shares - Series D 1 COM/ Energy Steam Company - Co-Transfer Agents: Commonwealth Energy System and The First National Bank of Boston Other Companies . Registrar: State Street Bank and Trust Company
, COM/ Energy Services Company (service company) .
Dividend Payments COM/ Energy Acushnet Realty (leases land to Hopkinton (Paid by the System subject to declaration by Trustees) LNG Corp.) . Preferred on the 1st day of January, April, July, October COM/ Energy Cambridge Realty (organized to hold - Common on the 1st day of February, May, August, vtrious system non-utility properties) November COM/ Energy Freetown Realty (organized to develop a parcel of land for a generating station) ' Trustees UnderIndentures of Trust The First National Bank of Boston - The System's COM/ Energy Realty Trust (organized to own property in Bonds Massichusetts) Citibank, N.A. - Canal Electric Company Series B and D COM/ Energy Research Park Realty (organized to develop a Bonds research complex in Cambridge) State Street Bank and Trust Company - Other Subsid,aryi Darvel Realty Trust (joint-owner of the Riverfront Office i
- Park complex) Compames' Long-term Debt and the System's Bond Sinkmg Funds Hopkinton LNG Corp. (LNG service company) in addition, the system has a 1.4% interest in a jointly- Listing Affiliations ;
owned oil fired generating unit and also owns from 2%% ! to 4%% interests in four nuclear power plants (located in Common
. Massachusetts, Connecticut, Vermont and Maine). New York Stock Exchange, Inc.
Boston Stock Exchange T;rrit:ry of Utility Operating Companies Pacific Stock Exchange, Incorporated Electric Operations-1,ll2 square miles covering 41 Preferred - Series D H communities with population of 560,000 New York Stock Exchange, Inc.
- Gas Operations-1,067 square miles covering 49 cities and towns (including 12 servei with electricity) with population of 1,007,000 Form 10-K The System files annually a report on Form 10-K with j lectri 320,000 (includin8 52,000 seasonal) , ,
the Securities and Exchange Commission. Many of the Gas-211,000 information requirements of Form 10-K are satisfied by Employees and Shareholders at Year End this 1986 Annual Report. However, a copy of Form 10-K Employees-2,583 is available upon written request addressed to Michael P. Shareholders-19,639 Sullivan, Vice President, Secretary and General Attorney, Commonwealth Energy System, P. O. Box 9150, Cambridge, j Electric Plant Massachusetts 02142-9150. 1 [ Cipability-1,363.2 MW, including sales under long-term contracts with other utilities of 426 MW resulting in a net ( capability of 937.2 MW Peak demand-772 MW on August 15, 1985 j G:s Plant l Distribution lines-2,484 miles l Peak day send-out-289,693 MCF on February 15, 1987 j l t l L j
I. p LCOMEnergy Commonwealth Energy System ' Post Office Box 9150 -
- Cambridge, Massachusetts 02142-9150 Telephone (617) 225-4000
.]
H. t I: j.- s
r , av~ .
% l y.( : ,- Efje (Commentucaltfj of Alaggacfjugetts ~
l RETURN 1 i OF THE I
.. ... . . _ CITY, , , , op j
TAUNTON
/
t' ~ ( ') TO THE DEPARTMENT OF PUBLIC UTILITIES OF MASSACHUSETTS l For the Year Ended December 31, 1986 l Name of officer to whom correspondence should l' Joseph M. Blain be addre.ued reg;trding this report. ( cemeu x-se ss wer sueu 9 o u ,iis.. <m . .,d a ,, ._ :
,_ ,,,, , e,,,,
31 ( __________
r 3
- 1 J
TABLE OF CONTENTS t Page h General Information Schedule of Estimates 3 Customers in each City or Town 4 4 A propriations Since Beginning of Year C$anges in the Property 5 Bonds 5 G l; Town Notes Cost of Plant 7 Comparative Balance Sheet 8-9 10-11 Income Statement Earned Surplus 12-13 Cash Balances 12 Materials and Supplies 14 Depreciation Fund Account 14 Utility Plant-Electric 14 , 15-17 l' Production Fuel and Oil Stocks Miscellaneous Nonoperating Income 18 21 Other Income Deductions Miscellaneous Credits to Surplus 21 21 ) Miscellaneous Debits to Surplus 21 r Appr,opriations of Surplus Mumcipal Revenues 21 Purchased Power 22
. Sales for Resale 22 Electric Operating Revenues 22 Sales of Electricity to Ultimate Consumers 27 38 s Electric Operation and Maintenance Expenses 39-42 Taxes Charged During Year Other Utility Operating Income 49 /
50 ' Income from Merchandising, Jobbing and Contract Work 51 Electric Energy Account Q-57 Monthly Peaks and Output Generating Station Statistics 57
] Steam Generating Stations 58-59 Hydroelectric Generating Stations 60-61 .
Combustion Engine and Other Generating Stations 62-63 l Generating Statistics (Small Stations) 64-65 66 Transmission Line Statistics Substations 67 68 Overhead Distribution Lines Operated 69 Electric Distribution Services, Meters and Line Transformers Conduit, Underground Cable and Submarine Cable 69 Street Lamps 70 71 Rate Schedule Information Signature Page 79 81 FOR GAS PLANTS ONLY: Page Page Utilitv Plant-Gas 19-20 Gas Generating Plant Gas Operating Revenues 74 43 Boilers 75 Sales of Gas to Ultimate Consumers 44 Scrubbers, Condensers and Exhausters^ Gas Operation & Maint. Expenses 75 45-47 Purifiers 76 h Purchased Gas 48 lloiders Salos for ltesale 48 Transmission and Distribution Mains 76 77 5' Sales of 1:esiduals 48 Gas Distribution Services, llouse Governors 1 Record of Sendout for the Year in MCF 72-73 and Meters 78 : s - l' AGES INTENTIONALIJ ONITTE!h 23 to 36 and T>3 to f>G { u
~ '
> * ' *$\ '
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^ c
. L a w & zy.p _ m %
m%M L. y % m l TO THE MAYORS, SELECTMEN, MUNICIPAL LIGHT BOARDS AND MANAGERS OF MUNICIPAL LIGHTING IN THE SEVERAL CITIES AND TOWNS IN THIS COMMON-WEALTH OPERATING GAS OR-ELECTRIC LIGHT PLANTS: This form of the Annual Return should be filled out and one original and a duplicate copy (which may be a photocopy) should be retu'ned r to the Office of the Department of Public Utilities, 100 Cambridge Street, Boston, Massachusetts,02202 by March 31st of the year following the calendar year of the report in accordance with the statutes of the Commonwealth and the regulations of the Department made in pursuance thereof. t c Where the word "None" truly and completely states the fact, it should be given as the answer to any particular inquiry or portion of an inquiry. Ifrespondent so desires, cents may be omitted in the balance sheet, income statement and supporting schedules. All supporting schedules on an even-dollar basis, however, shall agree with even-dollar amounts in the main schedules. Averages and extracted figures, where cents are important, must show cents for reasons which are apparent. Special attention is called to the legislation in regard to the Returns printed on the last page. l
-4
~
e i
r: 8 A-GENERAL INFORM ATION. A ; I, - 1. Name of town (or city) making this report. City of Taunton
- 2. If the town (or city) has acquired a plant, Kind of plant, whether gas or electric. Electric Owner from whom purchased, if so acquired. Taunton Electric Co (Dec. 12,1895 , Oct 7, t89-Date of votes to acquire a plant in accordance with the provisions of thapter 164 of the General Laws.
Record of votes:' First vote: Yes, 7 ; No, 0 second vote: Yes, 8 ; No, O Date when town (or city) began to nell gas and deetricity, July 1, 1897
- 8. Name and address of manager of municipal lighting:
Joseph M. Blain ; 185 Shores Street ' 4. Name and addre$skhor r becken: Richard ~ Johnson 618 Norton Avenue Taunton,.MA 02780
- 5. Name and address of town (or city) treasurer:
~
William F. Carney
'122 Mayflower Avenue
- 6. Taunton, MA 02780
, t Name and address of town (or city) clerk:
Mary C. Gorden p 451 Middlebr g nue
- 9. 2 Names and ad ssesre.o mem Tau tonbrs of munfelpal light board:
John A. Martyniak, 24 Pine St., Taunton, MA 02780 Arthur G. Pimenta, 125 Fremont St., Taunton, MA 02780
- g. Manuel Paiva, 156 Myricks St., E. Taunton, MA 02718
- 8. Total valuation of estates in town (or city) according to last State valuation Residential and Open Space 8 643,853,173 Commercial, Industrial and Personal 189,808,387
- 9. Tax rate for all purposes during the year )
8 j Residential and Open Space 16.12 j Commercial, Industrial and Personal 28.36
- 10. Amount of manager's salary:
4 57,000/yr
- 11. Amount of manager's bond:
3 10,000
- 12. Amount of salary paid to members of municipal light board (each): .$ 4,400 Chairman
$ 4,000 Each other ;
member l i hi t
3 4 ,
*anaf e: Port af ..T.u m neliS81U8"h8 "'"
Y8t'sehd Dsc2mb5r 31,19 FURNISil SCllEI)ULE OF ESTIMATES REQUlRED BY GENERAL LAWS, CH APTER 164. SECTION 57 FOR GS A AND ELECTRIC LIGIIT PLANTS FOR THE FISCAL YEAR, ENDING DECEMBER 31, NEXT. INCOME FROM PRIVATE ooNSUMERS: A moun t. ( :. 0 1 From sales of gas
'2 From sales of electricity 8 28,124.65300_
3 ToTat 28J24,65f00~ _ { 4 6 EZrEN8ES: 6 For operation, maintenance and repaire 24,864,3 M00 7 For interest on bonds, notes or scrip 1,602,86C00 j 8 For depreciation fund ( 4% per cent. on ; 60,202,727.39 as per page 8) 2,W , MW ! 9 For sinking fund requirements 10 For note payments " 11 For bond payments i 445,00C 00 12 For loss in preceding year ] 13 l TOTAL 29'.320,28800 l 14 15 cost ! 16 Of gas to be used for munlelpal buildings 17 Of gas to be used for street !!ghts 18 Of electricity to be used for municipal buildings ; 19 Of electricity to be used for street lights 20 Total of the above items to be included in the tax l>ny -- I' h hh0 21 1,647,56)00 l 22 New construction to be included in the tax levy 1 23 j Total amounts to be included in the tax levy total 1,647,56300 .
}
- k. .
CUSTOMERS r Names of the cities or towns in which the plant supplies Names of the cities or towns in which the plant supplies GAS.with the number of customers' meters in each ELECTRICITY, with the number of customers' meters in each I cm ouToww
' Nug ofg cm on Toww Nagot gu,m='
, 3 Raynham, Town of 3,640 Berkley, Town of 1,257 Lakeville, Town of 415g N. Dighton, Town of 9V Taunton, City of 19,082 i
h i i I
- e. t
, ' 2 4
1 1 TOTAL ! mT4t 24,490 { M )
N . Anne.i ,mt .<............laug.9n., gun.4 cap.al ,p.43.ht,fgg,,f,1,ag,t ..................... -. ~ Year $aded Dec.enwr a n id.6,
'APPROPRI T13N5 SINCE BEGINNING OF YEAR (include also all items charged direct to tax levy, even where no appropriation is made or required.)
AL .' FOR CONSTRUCTION OR PURCHASE Or PLANT:
'At- meeting 19 , to be paid from t -5
'At ' meeting 19 . to be paid from t TOTAL $
i FOR THE ESTIMATED COST OF THE CAS OR ELECTRIC 17Y TO BE (JSED BY THE CITY OR TOWN FOR:
- 1. St reet lig hts . . . . . . . . . . . . . . . , . . . ...... .. .......... ... . . ..... .. . ... .. . s 405,600
- 2. Municipal buildings. . ...... .. .................. .. ... ..... ..... ................ 1,241,963
- 3. -
TOTAL sl,647,563 i
*Dete of nwetens and whether regular or special. tifere insert bonds, notes or tas levy, I
CHANGES IN THE PROPERTY j
- 1. Describe briefly all the important physical changes in the property during the last fiscal period including additions, alterations or improvements to the works or physical property retired, f
1 l In electric property:
. 1 I 1 Overhaul on Generation Unit #9 t'
I i l I In gas property: 1 i I; i
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C >
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- M ASSAC H u sir.TTS D2 010 6 0'J/ 4 0 2*5 01 D .
Name: City of Taunton, Massachusetts l
.)
Darcription of Issue: Electric Loan, Act of 1969 Bonds i Amount: $24,000,000.00 Raties various - As Listed Date of Issue: Feb. 1, 1976, , Dus: Payable as listed below '
\
D;ntetinations : l
$5,000.00 Coupon Amount: Various - As Listed -
'1
,. . l Callable: No ,, .
I Addrass: Eugene L. Gorey, Treasurer, City Hall, Taunton, Ma. 02780 .
, ., ,' l Payment Interest Coupon Interest Principal Maturing Total Payment ' Coupon Data Payable Numbers Rate Pa ,able - Bond Numbers Due Amount J
- 8/1/7G $948,440.00 2/1/77 948,440.00 J.
2 8.501A S200,000.00 S 948,440.00 , *j 1 - 40 1,148,440.00 $212.50 ' E- '/77 939,'940.00 3 - -
~
939,940.00 2/1'/78 939,940.00 4 8.50 .220,000.00 41 - 84 , .'1,159,940.00 212.550! 8/1/78 930,590.00 -5 * ' 930,590.00 2/1/79 930,590.00 6 , 8.50 235,000.00 85 - 131 1,165,590.00 212.50 8/1/79 920,602.50 7 , 920,602.50 2/1/80 920,602.50 8 8.50 255,000.00 132 - 182 1,175,602.50 212.50 Q/1/80 909,765.00 9
- 909,765.00 2/1/81 909,765.00 10 8.50 275,000.00 183 - 2.}7 1,184,765.00 212.50 8/1/81 898,077.50 11 898,077.50 l
2/1/82 898,077.50 12 8.50 300,000.00 238 - 297 1,198,077.50 212.50 8/1/82 885,327.50 13 .
.885,327.50 l -2/1/83 885,327.50 14 8.'50 325,3CO.00 298 - 362 1,210,327.50' 212.50 8/1/83 871,515.0,0 15 ? 871,515.00 2/1/84 871,515.00 16 8.50 350,0co.c0 363 - 432 1,221,515.00 212.50 S/1/84 856,640.00 17 856,640.00 2/1/85 856,640.00 18' 8.50 380,0CO.00 433 - 508 1,236,640.00 212.50 3/'g85 840,490.00 19 840',490.00 2, f86 ',840,490.00 20 -
7.30 410,CCO.C0 509 - 590 1,250,490.00 182.50 sourn eno careca r:s mer.c.e ave us g
' j reru.a. =u.cooc= scuac ::enco e c u io sistter i
L j
[ schjdups.cf;Intsrsch and Principal Payabla '( City of Tcuntsn ,
, Electrih Bonds.
Pygc,' 2. J ',
.[
@ayment; : Interest -Coupon Interest. Haturing . Total Payment Coupor
_jte- Payable Numbers ' Rate Principal-Payable . Bond Nu:tbers Due' 4 A::'oun t J. . . c3/1/86 '5825,525.00 21: ..
~
. $ 825,525.00' 2/1/87 825,525.00 .22 7.00% S445,000.00 591 - 679 1,270,525.00-
$175.00
~3/1/87 809,950.00' -23. -
809,950.00 2/1/88 809,950.00 '24 '7.10 480,000 00 ,680 - 775., 1,289,950.00
. 177.5C
.~ : .
3/1/88 792,910.00
- 25 *
~
792,910.00 ' 1/1/89 792,910.00 ,26 7.20' 520,000.00- 776 - 879' 1,312,910.00
.180.0C 1/1/89.: 774,190.00
-27 , ,
\ k ' 774 k190.00 1'
!/1/90 774,190.00 ,28 ... ,,7.30 565,000.00~.,880 - 992 ,.1,339,190.00 182.50
, . . , . . ,. , v,* . a ;. ,- 'd: -
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'l/1/90
'753,567.50 29-
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753,567.50
'/1/91 L753,567.50- 30 7.40 610,000.00 993 - 1114' 1,363,567.50 185.00 l
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'/1/91 .730,997.501 '31- ' - ' '
~-
730,997.50 . ,I 's $ J/1/92
. 730,997.50' 32 .,7.50 660,0'00.00 1115 - 1246- ,. 1,3'90,997.50
?
- 187.50 l
. .. l *
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/1/92 .706,247.50, *33
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706,247.50 d
-/1/93 '706,247.50
- 34 7.60 715,000.00 1247 - 1389
,1,421,247.50 '190.00=
s 3' u
/1/93 679,077.50 35 ,
679,077.50 '
~/1/94 679,077.50 .36 '7.70 775,000.00 1390 - 1544- 1,454,077.50 192.50 >
~
; /.i. 94' 649,240.00 -37 ' '
649,240.00
./1/95~ 649,240.00 38
- 7.75
- 840,000.00 1545 - 1712 1,489,240.00 193.75-
~
..'/1/95-
'616,690.00 39 -
616,690.00 -
1/1/96' 616,690.00 40' ,7.80 910,000.00 1713 - 1894 1,526,690.00 ' 195.00
'/1/96- 581,2'00.00 -
'41 - -
581,200.00 11/97 '581,200.00. 42 8.00 985,000.00 1895 .2091 1,566,200.00 200.00 h
-/1/97 541,800.00 43 -
r 541,800.00
/1/98 -
'541,800.00 44 ,8.00 1,065,000.00 2092 - 2304 1,606,800.00 200 00 '
-f1/98. 499,200.00 45 '
499,200.00 E#1/99 499,200.00 46 8.00 1,150,000.00 2305 - 2534 1,649,200.00 200.00-I'1/99- 453,200.00 47 453,200.00 L'1/2000 453,200.00 .. 48 8.00 1,250,000.00 2535 - 2784 1,703,200.00 200.00 1
'1/2000 403,200.00 49 403,200.00 1/2001 403,200.00 50 8.00 1,350,000.00 ,2785 - 3054 1,753,200.00 200.00 -:'l/2001 349,200.00 51 *349,200.00 4
I "L/2002. 349,200.00, 52 . 8.00 1,465,000.00 3055 - 3347 1,814,200.00 200.00
)002 290,600.00 53 .
290,600.00 t 172003 290,600.00 54 8.00 1,585,000.00 3348 - 3664 1,875,600.00 200.00 i V I
. ..+ E5AT/ Ol'Vc.unGcn . ~ . IBMctrLlc Bonds . .
' ' .,Prg2 - 3.,
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,;;-9. 6 Paymsnt '. In terest ~ Coupon. Interest Principal Maturing Total Payment -
._Date Pavable Ntt.?.be rn Patte Payable Coupon Bond Numbers Due Amount
~ (?) ,
- 8/1/2003 U227,200.'00 . .- 55
,2/* 1/2004. 227,200.00 $ 227,200.00
' 56 8.004 $1,750,000.00 3665 - 4014 l',977,200.00 $200.00 3/1/2004 x157,200.00-57 42/1/2005 157,200.00' 157,200.00
' 58 1,890,000.00.4015 - 4392. l
.8.00 2,047,200.00 200.00 3/1/2005 81,600.00' 59 -
))
!/1/2006 81,600.00_ 81,600.00 60 8.00, 2,040,000.00 4393 - 4800 2,121,600.00 200.00
)TALS'$39,848*,365.00 $24,000,000.00 *
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,@S !! - LI.99.t..................................... Year ended oecember a1.1o$$
*. COMPARATIVE BALANCE SHEET Assets and Other Debits sesence Seginning of Betence increase une N'*IA" # Year End of Year or (Decrease)
No. (e) (b) (c) (d) 1 UTILITY PLANT l 2 101 Utility Plant - Electrie(P.17). . . . . .. 33,196,508.91 36,026,431.30 2,829,922.39 ! i 3 101 Utility Plant - Gas (P. 20). . . . . . . . . . . 4 [ 5 Total Utility Plant . . . . . . . . . . . . . . . . .. 33,196,508.91 36,026,431.30 2,829,922.39 l 6 7 , 8 - ! 9 10 11 FUND ACCOUNTS '~
'O 12 125 Sinking Funds . . . . . . . . . . . . . . . . . . . . . . . . -
. . /
13 126 Depreciation Fund (P.14) .,. . . . . . . . . . . . . 6,356,798.37 5,861,488.03 ( 495,310.34 ) 14 128 Other Special Funds. . . . . . . . . . . . . . . . . . . . . , 15 Total Funds . . . . . . . . . . . . . . . . . . . .. 6,356,798'T7 5.861, 6 ( 495,310.34) h 16 CURRENT AND ACCRUED ASSETS 17 131 Cash (P.14 ) . . . . . . . . . . . . . . . . . . . . . , . . . 3,764,656.37 1,083,180.52 ( 2,681,475.84 ) : 18 132 Special Deposits. . . . . . . . . . . . . . . . . . . .. 281,193.18 317,629.9C 36,436.72 19 135 Working Funds. . . . . ............., .. 2,600.00 2,600.0C 20 141 Notes Receivable . . . . . . . . . . . . . . . . . . . . . .
. 21 142 Customer Accounts Receivable. . . . . . . .
3,476,598.55 4,456,471.6C 979,873.05 22
* (' 23 24 143 Other Accounts Receivable. . . . . . . . . . . . .
146 Receivables from Municipality. . ... .. 151 Materials and Supplies (P.14). . . . . 236,692.59 2,292,237.00 62,954.45 ( 1,662,835.9C ( 173,738.14 ) 629,401.1C ). (( = 25 26 165 Prepayments. . . .. . .. .... . . 210,005.00 323,157.2C 113,152.2C ! 27 174 Miscellaneous Current Assets. . . . . . . . 129,656.96 324,935.34 195,278.3E I 28 Total Current and Accrued Assets.. . . . 10,393,639.65 8.233,764.92 ( 2,159,874.72 ) 29 DEFERRED DEBITS l 30 181 Unamortized Debt Discount. . . .
.r 31 182 Extraordinary Property Losses. . . .
. 32 165 Other Deferred Debits . . . ..
33 Total Deferred Debits. . .. ,, i 34 . 35 Total Asset.s and Other Debits. 49,946,946.93 50,121,684.25 174 73TK
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11
,,e, n, 3,,,8,6 COMPARATIVE BALANCE SHEETIAsbtlities and Other Orodits 4 ( g ,,
potence Beginning ot Selence Une increase No. Yeer g.nd of Year (e) or (Decrease) (b) (c) (d) 1 APPROPRIATIONS 4 2 201 Appropriations for Construction. . . . . . . . 3 SURPLUS 4 205 Sinidag Fund Reesrves. . . . . . . . . . . . . . . . . . 6 206 Imens Repayment. . . . . . . . . . . . . . . . . . . . . . . 11,657,000.00 12,067,000.00 410,000.00 1 6 207 Appropriations for Construction Repayments 32,433.98 . 32,433.98 7 208 Unsppropriated Earned 8urplus (P.12). . . . 10,346,103:38 13,563,949.24 . 3,217,845.86 1 a Tota! surplus . . . . . . . . . . . . . . . . . . . . . . . . 9 IX)NG TERM DEBT 22. % 532.35 25,663,383.22 3,627,845.8f 10 221 Bonds (P. 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,460,,000.00 ~ 21,050,000 00 ( 410,000.0C) 11 231 Notes Payable (P. 7). . . . . . . . . . . . . . . . . . . 12 ; Total Bonds and Notes. . . . . . . . . . . . . . 18 21.460.000.0C 21.050.000.00 ( 410,000.0C ) ! CURRENT AND ACCRUED LIABILITIES 14 232 Accounts Payable. . . . . . . . . . . . . . . . . . . . . . . 3,558,117.45 1,726,810.75 (1,831,306.7( ) h 15 234 Payables to Municipality. . . . . . . . . . . . . . . . 16 235 Customers' Deposits. . . . . . . . . . . . . . . . . . . . 233'458.32 268,924.33 35,466.0C ' 17 23 6 Taxes Accrued . . . . . . . . . . . . . . . . . . . . . . . . . 18 237 Interest Accrued . . . . . . . . . . . . . . . . . . . . . . . 710,454.3E 697,983.55 ( 12,470.8: ) j 19 242 Miscellaneous Current and Accrued Liabilities 1,040,221.14 - 44,037.54 ( 996,183.6C 20 ) Total Current and Accrued Liabilities. . . 5,542,251.3C 2,737,756.17 (2,804,495.1: )
.- 21 DEFERRED CREDITS 22 251 Unamortised Premium on Debt. . . . . . . . . . . 67,355.9' 64,002.11 ( 3,353.8L) 23 I 252 Customer Advances for Con'struction.... ..
24 253 Other Deferred Credits. . . . . . . . . . . . . . . . . . . 25 g Total Deferred Credits. . . . . . . . . . . . . . . . 67.355.9: 64,002.11 26 ( 3,353 8.'. ) RESERVES 27 446,497.02 260 Reserves for Uncollectible Accounts. . . . . . . 519,477.2: ( 72,980.2. ) 28 261 Property Insurance Reserve. . . . . . . . . . . 29 262 Injuries and Damages Reserves. . . . ..... 30 !
- 263 Pensions and Bene 6ts Reserves. . .. ...
31 265 Miscellaneous Operating Reserves. , ..... 32 Total Reserves. . . . . . . . . . . . . ....... 519,477.2:, 446,497.02 ( 72,980.2L) 33 CONTRIBUTIONS IN AID OF ; CONSTRUCTION 34 271 Contributions In Aid of Construction- . . . 64.986.00 64,986.00 0 35 Total Liabilities and Other Credits. .. 49.689.607.82. 50,026,624.52 337,016.7) State below if any earnings of the munielpal lighting plant have been used.for any purpose other than discharging indebted. ness of the plant, the purpose for which used and the amount thereof. 1986 Transferred to City of Taunton f or tax reduction $ 1,260,000 Since 1923 Transferred to City for tax reduction $ 22,097.975
.Since 1934 paid directly for Veteran's Pensions . 822,866.
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13: Annual report ef....T. aunt.o.u..Mttu,141B0.1..L MTARE.P.l.a,q,t........ ....... ..................... year enee, e-ha! <n ev
^
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STATEMENTc OF INCOME FOR
- LEE YEAR
(.
~
Total tjne Q,, Increase er No. (Decreeso) from (e) Current Yeer Preceding Year (b) (c) 1 y OPERATING INCOME 2
- 4 00 Operating Revenues (P. 37 and 43) . . . . . . . . . . . . . . . . . . . . . . .
a Operating Expenses: 32,672,021.42 ( 6,682,206.41; 4 401 Operation Expense (P. 42 and 47) . . . . . . . . . . . . . . . . . . . . . . . 21,593,334.82 ( 10,390,349.61; 5 402
- Malatenanes Expense (P. 42 and 47) . . . . . . . . . .'. . . . . . . . . . 3,663,989.52 1,588,792.19 6 403 ,
Depreciation Expense ,'. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,344',556.'57 , ,62,647.89 7 407 ' Amortlaation ' '~of Property 14ases. . . . . . . . . . . . . . . .'. . . . . . . 8
. ~ l 9
10 408 Taxes (P.19). . . . 7.'. . . . . . . . . . . . . 1
................... ' l Total Operating Expenses. . . . . . . . . . . . . . . . . . . . j 11 27,601,880.91 ( 8,738,909.53 Operating Jncome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......
...... i 12 414 Other Utility Operating Income (P. 50). '. . .' . . . . . . . . . . . . . . . .
5.070.140.51 2,056,703,12 13 f 14 I { )' 15 Total Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.070,140.51 2,056,703.12 i OTHER INCOME j 16 4151ncome from Merchandising, Jobbing and Contract Work { 17 18 419 Interest Income . . . . . . . . . . . . . . . . . . . . . 375,706.95 .... . . . . . . . . . . . . . .(.P. 22,719.3'8 61) 421 Miscellaneous Nonoperating Income . . . . . . . . . . . . . . . . . . . . . . 19 Total Other Income . . .' . . . . . . . . . . . . . . . . . . . . . . . 375,706.95 C0 22,719.38 Total Income . . . . . . . . . . . . . . . . . . . . . . ...... . . . . . . . . . .5,445,847.46 21 2,079,422.50 MISCELLANEOUS INCOME DEDUCTIONS 22 23 425 Miscellaneous Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.3 ; 426 Other Income Deductions. . . . . . . . . . .. . . . . . ..... ..... 24 25 Total Income Deductions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4_ Income Before Interest Charges. . . . . . . . . . . . . . . . . . . . . . . . . . 26 5,445,847.46 2,079,422.5C r INTEREST CHARGES 27 28 427 Interest on Bonds and Notes. . . . . . . . . . . . . . . . . . . . . . . .1,653,544.17 .. ( 30,999.37 ) 428 Amortization of Debt Discount and Expense. . .. . . ..
'29 30 429 Amortization of Premium on Debt-Credit. . .. ...... ( 3,353.82) 0 4 31 Other Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,041.25 895.75 31 432 Interest Charged to Construction - Credit. . . . . . . . ... .... 32 Total Interest Charges. . . . . . . . . . . . . 33 NET INCOME.. 1.663.231.60 ( 30,103.5E)
... . . .. .. 3,782,615.86 2,109,526.0E EARNED SURPLUS Lin)
NL, (e) Debits' Credits (b)' (c) 34 208 Unappropriated Earned Surplus (at beginning of period). . 35 10,346,103.38 _ 36 1 37 l 433 Dalance Transferred from Income. ) 3,5 4,887,845.86 39 434 Miscellaneous Credits to Surplus (P. 21). . .
) )
435 Miscellaneous Debits to Surplus (P. 21). . . . 1,670,000.00 ' 40 436 Appropriations of Surplus (P. 21). 41 437 Surplus Applied to Depreciation.
. . -{
42 20$ Unappropriated Earned Surplus (at end of periodi. 13,563,949.24 43 ( ,' k 44
* *'S k 15,233,949.24 15,233,949.24 d u 1
2 l i4 i Annuet report of. . . . .I.@!P.I.9.n,,hy,n,1,c f p,y,},,L, f,g,hp 1p,g,,,y,f,n k . . . .. .... . . . . . . . . . . . . . . . .. ... . . . . . . . Year ended December 31.19.8.6 l l k',lbi CASH BALANCES AT END OF YEAR (Account 131) .,- u, . \
)1 Une items . Amount '
No. (e) (b) .,
'1 Operation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,083,180.53 J
)
2 Interest Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,705.57 3 4 Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ . Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
' ('
5 Customer-Deposit Fund 268,924.33 { 6 Petty Cash Fund 2,600.00-
]
'1 l s j 9 1 10 i 11 !
12 varat 1,403,410.43 I MATERIALS AND SUPPLIES (Accounts 151 159.163)
. Summary Per Balance Sheet hk
Amount End of Year une Account Electric Gas No. (e) (b) (c) IS Fuel ( Account 151) (See Schedule. Page 25) . . . . . . . . . . . . . . . . . . . . . . . . . 1,216,859.46 14 Fuel Stock Expenses (Account 152) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 15 Residuals (Account 153) . . . . . . . . . . . . . . . . . . . . . . . . ..... ....... 16 Plant Materials and Operating Supplies (Account 154). . . . . . . . . . . .... 445,976.44 17
.{ .
Merchandise ( Account 155). . . . . . . . . . . . . . . . .' . . . . . . . . . . . . . . . . . . . . 18 Other Materials and Supplies (Account 156) . . . . . . . . . . . . . . . . . . . . . . . . 19 Nuclear Fuel Assemblies and Components -In Reactor (Account 157) . . . g't 20 Nuclear Fuel Assemblies and Components - Stock Account (Account 158) 21 Nuclear Byproduct Materials (Account 159). . . . ..... ............. 22 Stores Expenae (Account 163). . . . . . . . . . . .... . .. .... . .... ... 23 Total Per Balance Sheet 3. . . . . . .. .. 1,662,835.90 I!b' DEPRECIATION FUND ACCOUNT (Account 136) Une Amount No. (a) (b) 24 DEBITS 25 ' Balance of account at beginning of year. . . . . , . . .... .. .. ... . .. 26 Income during year from balance on deposit. ... . .. . . .. .... . 27 Amount transferred from income. , . . . . . . . . . . 28 , 29 TOTAL 30 CREDITS 31 Amount expended for construction purposes (Sec. 57. C.164 of G.L.). . . . .. . 32 Amounts expended for renewals, viz.:- 33 34 35 36 37 (.' 38 a i 39 Balance on hand at end of year, _ _ _ _ _ , l 40 TOTAL M
4
. Annual report of Taunton Municipal Lighting' Plant- Ysar cndra Decembr.r 31,19.M.
4 u , f; . .I
, ;- l DEPRECIATION FUND' ACCOUNT (Account 126) !
J l Amount i DEBITS
~
, Balance of account at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,356,798.37 l
-Income during year from balance on deposit.......................... 310,628.03 l Amount transferred from income......................................- 2,344,556.57 Amount tranaferred for reserve for major'over. haul expenses 50,000.00
~ Amount transferred for reserve for jnit #9 principal and interest payments 1,950,000.00 TOTAL 11,011,982.97 CREDITS g'e fmount expended for cons'truction purposes (Sec. 57, c. 16h of G.L.). 3,074,479.94 Amounts expended for renewals, viz.:-
Bond principal and interest payment for Unit 2,076,015.00 i l
' i 5,861,488.03
.. Balance on hand.at end of year......................................
. TOTAL 11,011,982.97 'l w
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..............................................................................................vren.e.s o.come.,33,3,,gp
. .- MISCELLANEOUS NONOPERATING INCOME (Amat 428) ,
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- 4) Amount
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'8 l TOTAL OTHER INCOME DEDUCTIONS (Account 426)
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hi la 14 TOTAL l MISCELLANEOUS CREDITS TO SURPLUS (Account 434) , j "g*.* . Amount - 16
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- h. *- Item . am.ung 4)
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25 To City for reduction of taxes 1,260,000 26 Bonds. 410,000 21 28 29 30 31 32 TOTAL g.,670,000 ] APPROPRIATIONS OF SURPLUS (Account 436) Une item
* ' '48-Amount (a) (b) 83 34 )
.. . 35 36 37 38 39 40 TOTAL M'
i l i [. '22 . I Annves report of....I4HR$RR..M,u,n,1,c,(p,a,1,,,L,(ght,j ng y,}aq,t , ,,
, .... . . .. . . . . . .. . . . . . . . . .. . . .. . . . . . . . veee e ndeo oec emne< a n . i s. .S.6 7 MUNICIPAL' REVENUES (Accounts 482,444)
_ (X.W.H. nold under the provisions of Chapter 269, Acts of 1927)
. . .c . d. . . c.. c ,ee, (1
No. No. (a) - (b)
.e.e_e .ec...ed (c)
Aggg- (d) 1 482 ' i'
~ ~
Electr6c schedule M.W.H. Revenue Receeved
" *!'x$Uv""
e l (a) (b) gts j (c) (d) { 6 444 Municipal: (Other than Street Ughting) I s City of Taunton Building 4,075,276 445,465.97 10.9309 7 City of Taunton Power 12,200,953 725,705.67 5.9479 8 9 - l 10 (' 11 ) 12 . TOTAts 16,276,229 M71,171. 64--- 7 Tf56 18 Street Ughting:
. I 5 City of Taunton 5,088,21f7 389,956.58 7.6638 16 ,,
17 l 18 votats 5.088.287 389,956.58 19 totals 21,364,516 7.6638 _ ,, 1,561,128.22 7.'3071
~
5 j PURCHASED POWER (Account 555) (- Names of Utmties where and at Wfkat m on. del *P32n's vaa*** a*e 'a u H. ^"*"'
. .H i No. (a) (b) (c) (d)
#E'd)
(e) J I 20 Montaup Electric Co Cl-Flood Bus 61,945,473 1,943,247.19 3.1370 21 Braintree Light Yard 115 KV 2,433,563 126,151.48 5.1838 J 22 Maine Yankee " " 1 33,206,890 659,308.55 1.9855 ! 23 Vermont Yankee 9,472,875 583,892.78
" " 6.1638 I 24 Nepex, 156,804,000 4,602,787.35 2.9354 l 25 Northe'ast Util. Serv. " "
17,540,000 452,600.00 2.5804 MMWEC PASNY " " 26 35,731,969 339,076.25 .9489 27 Hydro Quebec - 23,852.57 - 28 29 m Ats 317,134,770 8,730,916.17 57531 SALES FOR RESALE (Account 447) Names of Utihties Where and at What t
- Em W"r D' dc vettes* Dehrered p[r"k"[$
- M.W.H. Amount
*) (b) (c) gesg (d) , (e) 30 Eastern Edison Raynham & Taunton 53,412 4,138.44 7.7481 . .
31 Boundary 4160 V 32 Montaup Electric Co Cleary Flood 69,396,604 5,885,437.10 . 33 Bus Yard 115 Kv . 34 N E Power Exchange " " 28,840,970 978,270.62 3.3919 35 'Braintree Electric " " 10,492,346 402,400.33 3.8352 36 Iludson Electric " " 1,927,340 86,728.64 4.4999 37 38 89 TOTALS 110,710,672 7,356,975.13 6.6452
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- 1. yer .iv .i o 1 3 4 5 6 0 2 4 5 6 8 9 7 ec2e Rsc 4 4 4 1 4 4 4 4 5 5 5 5 5 5 hn r p ac 4 4 4 4 4 4 4 4 4 4 4 4 4 4 tI ba e . -1 2 3 4 5 6 7 8 9 0 11 1 2 31 41 15 16 1 71 81 29 202 12 2 2 23 24 5 6 no iN 1 L
Aaaua w , 1 a u n t on M,u,ni,g,},yai,,,h,ig,p,in3,,,y,{,an.f.....,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,y , .ne., o 3.,3 3, 3,,,8,6 S SALES OF ELECTRICITY TO ULTIMATE CONSU.\lERS Report by secount, the K.W.H. sold, the amount derived sad the number of custorners under each Aled schedule or contract.
- Coetteet sales and unbilled sales may be toported sepurstely la total,
( * ( '.
,,, ,.d*,. ,.
88vmb.e,of Customers m, ms ..ne...e) (cents) Lia* Aesount Schedule K.W.H. Revenue (0.0000) sva r al. December 31, fee. Me. (a) (b) (c) (d) (e) (f) 1 440 Residential "A" 84,993,081 6,143,467.49 7.2282 16,081 16,368 8 440 Residential "A-1"' 31,472,927 2,180,253.43 6.9274 3,889 3,886 8 440 Residential "A-2" 18,070,204 1,211,888.24 6.7066 1,329 1,423 4 442 Comercial "H" . 36,038,465 3,455,323.95 9.5879 2.133 2,223 5 442 Comercial "P-1" 39,207,281 3,415,428.87 8.7112 248 244 6 442 Comercial "B-1" 2,580,280 217,356.67 8.4238 3 3 7 442 Comercial Private 8 Area Lighting 1,602,773 183,407.18 11.4432 250 250 8 442 Industrial P-2 117,552,968 6,832,152.71 5.8120 82 81 to City of Taunton 11 444 "H".
- 1,068,543 122,180.18 11.4343 84 93
, 12 444 "P-1" 3,006,733 323,285.79 10.7521 8 8
- 18 444 "P-2" 12.200,953 725,705.67 5.9479 7 6 14 Street Lighting 5,088,287 389,956.58 ,7.6638 1 1 15 445 Flat Rate B '
9,744 1,271.65 13.0506 1 1 16 445 Flat Rate P. 227,031 17,400.50 7.6644 1 1 IT 445 Flat Rate N.D. 110,732 7,702.30 6.9558 1 1 18 - 19 . 20 (. 21 I
=
=
24 tt 21
. 28 O
80 31 82 , O 84
'~
85 . 86 87 88 . O 40 41 , 42 . 48 - 44 ' 45 46 ( - 47 48 49 . TOTAL SALES TO ULTIMATE CONSUMERS (Pare 871ine 11) 353,230,002 25,226,781.21 7.1417 24,118 24,589
89 h Annual report et.... 7.4NIU.9D.. DAD.%dP41..MSN.N)R.2dEM .................................... Year eneed December St.19... in ELECTRIC OPERATION AND MAINTENANCE EXPENSES
. (
- 1. Enter in the space provided the operation and maintenance expenses for the year.
- 2. If the lacreases and decreases are not derived from previously reported Agures explain in footnote.
Increase or g g Account - Amount for Year I C' *'} " No. , ding Y (e) (b)
- (c) 1 POWER PRODUCTION EXPENSES $ .
4 2 STEAM POWER GENERATION 8 Operation: 4 500 Operation supervision and engineering . . . . . . . . . . . . . . . . . . . . . 352,279.13 16,303.05. 5 501 Fuel.................................................... 6,577,692.97 (6,212,302.17)' ; 6 502 Steam expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551,097.23 25,569.83
.7 508 Steam from other sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
{ -{ 8 504 Steam transferred - Cr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.9 503 Electric esponses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,614.96 ( 22,343.63) l 10 506 Miscellaneous steam pown expe nses . . . . . . . . . . . . . . . . . . . . . . . _ 419,457.99 32,335.85
- b. #
11 1 507 Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Total operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 'i 18
-8.035.142.28 $
(6.160.437.07) l Maintenance: i' 14 510 Maintenance supwvision and engineering. . . . . . . . . . . . . . . . . . . 123,727.18 34,697.57 15 511 Maintenance of structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,518.19 ( .69,560.32) I"* 16 512 Maintenanes of boiler plant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,146,019.50 514,755.85 17 518 Maintenance of electric plant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,554,265.16 1,180,341.99
- , 18 514 Maintenance of miscellaneous steam plant. . . . . . . . . . . . . . . . . 20,498.23 5,194.43 (4
19 Total maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.916.028.26
~
20 Total power production expenses - steam power. . . . . . . . . . 1.665.429.52'. 10 g51.170.54 (4.495.007.55) 21 NUCLEAR POWER GENERATION l 22 Operation: 28 517 Operation supwvision and engineering. . . . . . . . . . . . . . . . . . . . . 24 518 Fuel................................................... 25 519 Coolants and water. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
, 26 520 Steam expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27 521 Steam from othw sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - l'~ - . 28 522 Steam transferred - Cr.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . l 29 528 Electric expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . j 80: 524 Miscellaneous nuclear power expenses. . . . . . . . . . . . . . . . . . . . . . ' 81 525 Rents.................................................. 82 Total opera tion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Maintenance: 84 528 Maintenance supervision and engineering. . . . . . . . . . . . . . . . . .
- l 85 529 Maintenana of structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86 530 Maintenance of reactor plant equipment. . . . . . . . . . . . . . . . . I 87 531 Maintenance of electric plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 532 Maintenance of miscellaneous nuclear plant. . . . . . . . . .. . . . . .
, 89 Total maintenance . . . . . . . . . . . . . . .' . . . . . . . . . . . . . . . . . . .
40 Total power production expenses-nuclear power. . . . . . . . . . . 4 i 41 HYDRAULIC POWER GENERATION 42 Operation: 43 535 Operation supervision and engineering. . . . . . . . . . . . ......
,., 44 536 Water for power. . . . . . . . . . . . .. . . . . ....
45 537 Jiydraulie expenses . . . .. .. .. . . . .. . 46 538 Electrie expenses. . . . . . . . . .. .. ... .. ....... 47 539 Miscellaneous hydraulic power generation expenses. . . . . .. . . . 48 fl4 0 Rents . . . . . . . . . . . . . . . . . . . . . . ...... . . .......... 49 , Total operation . . . . . . . . . . . . .
a - 40 t .. ,3 Annual report et......? T.a..u..n..t..o.n.. .M..u..n.i.c..i.P.a.l....L..i.n
.. . v.
n h..t..i.n..v..P..l..a..n.t..................................v r .ne o e,33. 3.8. 6. - ELECTRIC OPERATION AND MAINTENANCE EXPENSES-Continued ' ( .* Increene or une *****"'- A**""*'Y**' ** No.
- (a)
(b) dls\ (c) 1 ! HYDRAULIC POWER GENERATION-Continued 4 4
,2 . Maintenanes: !
4
'8 641 Malstenenes supervision and :C f g...................
4 642 Malatenanes of structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 648 Maintenanes of reservoirs, dams and waterways. . . . . . . . . . . . . ! 6 644 Maintenanes of electric plant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ,
~7 4 646 Maintenanes of =I=aaH. -= hydraulic plant. . . . . . . . . . . . . . .
8 Toial maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-d( ,9 Total power production expenses - hydraulic power. . . . . . .
10 . OTHER POWER GENERATION p ',' 11 Operation: 4 12 646 Operation supervision and engineering. . . . . . . . . . . . . . . . . . . . . ., 18 14 647 Puel................................................... i 648 Generation expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 '16 649 Miseellaneous other power generation expenses . . . . . . . . . . . . . . t' ' p 16 660Rente.................................................. 17 Total operation . . . . . . . . i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .,
- b. 18 i 19 Maintenanes: -
661 Maintenance supervision and engineering. . . . . . . . . . . . . . . . . . . 20 ! 662 Malatenanes of structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . y. 21 22 668 Main e ====a= of generating and electric plant. . . . . . . . . . . . . . . .O ' 664 Maintenanes of =I=aanana== other power generation plant. .. jjp 28 Totai mainie. anes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Total power production esponses - other power. . . . . . . . . . , h' 26 OTHER POWER SUPPLY EXPENSES i 26 666 Purel ased power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,730,916.17 (3,098,773.05) i 27 666 System control and load Y" ; . . . . . . . . . . . . . . . . . . . . . . . \ 1,163.00 1,163.00 28 i f 667 Other espenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,195.01 ( 142,691.53) 29 Total other power supply expenses. . . . . . . . . . . . . . . . . . . . . . y ,, 30 R.772.274.18 (3.240.301.58) Total power peftetion expenses . . . . . . . . . . . . . . . . . . . . . . . . 31 19.723.444.72 (7.735.309.13) ! 1' . , TRANSMISSION EXPENSES 82 Operation: 88 660 Operation supervision and engineering. . . . . . . . . . . . . . . . . . . . . 17,735.59 721.70 84 661 lead dispatching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( 190.41) 86 662 Station expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,941.68 5,898.88 36 668 Overhead line expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120.63 ( 568.98) ; 37 664 Underground line expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.15 142.15 ! 88 666 Transmission of electricity by others. . . . . . . . . . . . . . . . . . . . . . . 134,513.22 126,245.10 89 666 Miscellaneous transmission expenses. . . . . . . . . . . . . . . . . . . . . . 2,893.00 ( 263.00) 40 667 Ren ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( M,M.@ 41 Total operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 48 Maintenance: 162.346.27 90,644.84 f 668 Maintenance supervision and engineering. . . . . . . . . . . . . . . . 82.42 27.48 44 669 Maintenance of structures. . . . .. .... ... ... .. . . -b 46 670 Msintenance of station equipment. . . . . . . . . . . . . . . . . . ... 4,402.40 3,810.29 (' 46 671 Maintenance of overhead lines. . . . . . . . 8,466.32 1,473.52 47 572 Maintenance of underground lines. . . . . . . . . . . . . - 0 "' .. .. 48 673 Maintenance of miscellaneous transmission plant. . . . . . .... 4-49 Total maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,951.14 3,311 a 60 ' . Total transmission expenses. . . . . .. ..... .. .. 175,297.41 95,956.13
.. , . . . . . - - . . . . . . . . . . - . . . . .. A
. . .. _..___..m
.. . 41 f.jf . Annuet report et....IM.9.%R.MHUI.9ARN.1d8.IABIL.SdP.9.T..................................... year ended December 131. ' E.6,,
t ELECTRIC OPERATION AND MAINTENANCE EXPENSES-Continued increase or
. P, h (gn, Account Amount for Year N **)
- No.
,, y (a) -(b) (c) 1 1 DISTRIBUTION EXPENSES $ $
. 2 . Operation 8 680 Operation supervision and engineering. . . . . . . . . . . . . . . . . . . . 196,251.97 9,890.67 4 681 Imad diera* M an........................................ 973.18 ( 2,969.81) 6 682 Station ==p=== . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,991.16 11,571.79 j 6 688 Overhead line expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,281.56- (40,954.73) {
7 684 Underground line expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,195.19 12,200.90 l 8 686 Stnet lighting and afsnel system expenses. . . . . . . . . . .. . . . . . . . 5,826.89 (17,486.95) ; 9 686 Meter expensee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,216.43 7,657.97 1
~
10 687 Customer installations expenses. . . . . . . . . . . . . . . . . . . . . . . .. . . . 13,006.54 4,002.04 , 11 688 Mina Haneous distribution expenses. . . . . . . . . . . . . . . . . . . . . . . . 71,064.87 13,955.50 ! 12 689 Rents.................................................. 107.76 ( 104.84) -- 18 . Total operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 577.01s.55 ( 2.237.46) 14 Malatenanos: . 16 690 Malatenance supervision and engineering. . . . . . . . . . . . . . . . . . . 7,316.60 1,900.81 ka 16 691 Main +=aana of structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,849.29 ( 1,756.39) M 17 692 Maintenanes of station equipment . . . . . . . . . . . . . . . . . . . . . . . . . 50,840.31 (20,919.47)
- h.L 18 698 Maintenance of overhead lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396,965.02 -(60,493.99)
Ih 19 694 Maintenance of underground lines . . . . . . . . . . . . . . . . . . . . . . . . . 89,274.43 ,(19,677.51)-
]l' 20 21 696 Maintenance of line transformers. . . . . . . . . . . . . . . . . . . . . . . . . .
696 Maintenance of street lighting and signal systems. . . . . . . . . . . 12,780.57 77,075.65 ( 4,839.52)- 12,574.62
- n./ 22 697 Maintenance of meters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,712.13 ( 6,695.46)'
28 698 Maintenance of =Im=Hanaaaa distribution plant. . . . . . . . . . . . . 6,240.04 1,974.26 y y 24 . Total maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 649,054.04 (97,932.65) 26 . Total distribution expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,176,969.59 (100,170.11) 26 CUSTOMER ACCOUNTS EXPENSES N. 27 Operation: 28 901 Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,349.97 1,432.81 b 29 902 Meter reading expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,673.29 ( 5,567.60)
- k 80 Pos Customer records and collection expenses. . . . . . . . . . . . . . . . . . . 511,655.10 10,505.92 l
i . bi 81 904 Uncollectible accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000.00 (, l 82 906 Miscellaneous customer accounts expensee . . . . . . . . . . . . . . . . , 92,960.13 1,479.70
! 88 Total customer accounts expenses . . . . . . . . . . . . . . . . . . . . . . . 807,638.49 7,850.83 84 SALES EXPENSES h ,( 86, Operation:
ul 86' 911 Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 912 Demonstrating and selling expenses . . . . . . . . . . . . . . . . . . . . . . . . 88 918 A'dvertising expensee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,348.66 ( 989.63) 89 916 Miscellaneous sales expensee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Total sales expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.348.66 ( 989.63) 41 ADMINISTRATIVE AND GENERAL EXPENSES 42 Operation: 48 920 Administrative and general salaries . . . . . . . . . . . . . . . . . . . . . . . . 326,695.64 25,094.61 44 921 Ofhee supplies and expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,383.76 9,115.24 46 922 Administrative expenses transferred - Cr.. . . . . . . . . . . . . . . . . . I f 46 928 Outside services employed. . . ... ....... ....... .. ... 273,325.39 120,300.25
"* ( 52,097.45) 47 924 Property insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,554.80 48 925 Injuries and damages. . . . . . . . . . . . .. . .. ... ...... .. .. 228,022.83 12,083.47 49 928 Employee pensions and benents. . . . .. .... .. .. . ..
2,026.649.12 (1,061,674.03)
'\ 14,362.09 60 928 Regulatory commission expenses. . . . . . . . ... . .. . . ( 13.485.96) 61 929 Duplicate charges - Cr. . . . . . . . . . . . .. . .. .. .. i' 62 980 Miscellaneous general expensee. . . . . . . . . . . ..
57,542.50 (161,014.23) 53 )GBI Rents . 93 3. .T rac apor.t a.t;19.n . M p.co s.q . , . . . . . . . 93,133.26 36,798.56 64 Total operation . . . . . . . . . . . .... . . .. .. .. 3, N ,bb9.39 1,084,879.54) u
~. .
I 42 b Annual report of...Dil.W3 AQU..HRU.if; AP.d..Lis.bting..P.3.ont......................................Yeer ended Dec:mber 31. 2s.Sh ELECTRIC OPERATION AND MAINTENANCE EXPENSES-Continued Acccunt incrase er - IDec * '*} ( .* Line Amount for Year p, c lng e No. (s) (b) (c) 1 ADMINISTRATIVE AND GENERAL EXPENSES-Cont. ; ( $ 2 8 Maintenance: 982 Maintenance of general plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,956.08 15,984.03
]a 4 Total administrative and general expenses. . . . . . . . . . . . . . . . 3,353,625.47 (1.068,895.51) 6 Total Electric Operation and Maintenance Expenses. . . . . . . 25,257,324.34 (8,801.557.42) 1 1
l
SUMMARY
OF ELECTRIC OPERATION AND MAINTENANCE EXPENSES l l
.h' j Line Functional Classification' Operation Melntenance Total ~,'. No. (e) (b) (c) l (d) l I: 6 Power Production Espenses 8 $ $
( 7 Electric Generation: 7; 8 8 team power. . . . . . . . . . . . . . . . . . . . 8,035,142.28 2,916,028.26 10,951,170.54 l
!l 9 Nuclear power. . . . . . . . . . . . . . . . . .
10 Hydraulic power. . . . . . . . . . . . . . . . ay 11 Other power. . . . . . . . . . . . . . . . . . . . . 12 Other power supply expenses. . . . . . . . 8.772.274.18 8.777_774.1R 18 Total power production expenses.. 16,807,416.46 2,916,028.26 19,723,444.72 l 14 Tranamt=fon Expenses. . . . . . . . . . . . . . . 162,346.27 12,951.14 175,297.41 3 15 Distribution Expenses. . . . . . . . . . . . . . . . 527,915.55 649,054.04 1,176,969.59 ,
'g 16 Customer Accounta Expenses. . . . . . . . . 807,638.49 807,638.49 ' *11 17 Sales Expenses. . . . . . . . . . . . . . . . . . . . . 20 348.66 20 18 Administrative and General Expenses. . .
3.267,.669.39 85.956.08 3.353,346.66.625.47 g 19 Total Electric Operation and g,' 20 Maintenance Expenses. . . . . . . . 21,593,334.82 3,663,989.52 25,257,324.34 {0 n p
,u, 21 Ratio of operating expenses to operating revenues (carry out decimal two places, e.g.: 0.00%) %
ha."E"E). MoIU"e"s"8d'IaNmNiIo*eT/ds. 7/)I.' d Y.N.'"'*" . 22 Total salaries and wages of electric department for year, including amounts charged to oper-sting expenses, construction and other accounts. . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . 4,068,661.66 28 Total number of employees of electrie department at end of year including administrative, 142 operating, maintenance, construction and other employees (including part time employees) ( ,,
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'Anneet eeport et...... Tau sstan. .Mus.ic ipa.1, . 1.ight ing. .P.lan t. . . . .. . . . . . . . . . . . . . .. ... .. .. . . .. . '. .. veer ended E
..- : at nRh .
OTHER UTILITY OPERATING INCOAfE (Account 484)] ,
, Report below the particulars called for in each column.
- p- .
. (..
Amount Geln or Line N'N Arnount of . Amowne of of Operating , Mo. investment flevenue Espenses (Less) from - ' (e) Operation I (b) (c) (d) (e) ( 1 None 4 5 7 3 ' 9 . 10 11 12 . 33 $I 14
. f 15 16 i 17 18 19 to . -
M 21 . ( '., ' a - 24 5' 25 26 27 u P 29 31 ' 32 i 38 , 34 35 36 37 .. .. 88 39 40 i 41 42 43 44 45 46 47 48 k 49 50 51 TOTALS t 4
..]
! . . ,r iA , ,. ,
li:ii Amauelreport et..........J.ggga @l $ Plaat 81 ! (.
. . . . .. . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vee r < nded o INCOME FROM MERCHANDI3!NC, JOBBING. AND CONTRACT WORK (Account 415) 1 workReport by utility departments the revenues. costs, espenses. and met income from merchandising, jobblog, and entrac '
during year. t c( Other Doctric Oss Utuity une stem copertment oopertment No. o ,artment vete (a) (b) (c) _ (d) (e) 1 : Revenues: 8 8 8 8 2 Merchandise sales, less discounts. 3 allowaness and sturns. . . . . . . . . . . . . . . . . . 4 Contract work . . . . . . . . . . . . . . . . . . . . . . . . .
-5 Cemrnissions . . . . . . . . . . . . . . . . . . . . . . . . . . . ,
4 Other (list seeerding to enajor elasses). . . . . . 7 . S 9 le Total Revenues . . . . . . . . . . . . . . . . . . . . . .
- 11 12
- 18 Costs and Expenses: I 14 Cost of sales (list according to major 15 classes of east) . . . . . . . . . . . . . . . . . . . . . . . . .
16 - 17 18 19 20 (( 21 n 23 Bi 24 25 26 Sales expenase . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Customer accounts expenses. . . . . . . . . . . . . . 28 Administrative and geners! expenses. . .. . . . . . . k 30 31 82 33 ' 34 35 36
- 31 38 39 40 41 .
42 43 44 45 46 41 *
.* \
48 49 50 TOTAL COSTS AND EXPENSES 51 Net Profit (or less)
Annual report of. ..... YlMfrihmMEN!" N*N'"""""""* * * * ** * *** * * * * * * *............... ............ Year ended December 31,19....
>W .c SALES FOR RESALE (Account 447)
- 1. Report sales during year to other electrie utilldes and to cities 'or other pubbe authorities for distribudon to and place an "x" in column (c) if sale involves orport, woes a state lina.
ultimate consumers.
- 2. Provide subheadings and A===Ify sales as to Assoeg.
- 3. Report separately arm, dump, and other power sold to the same utility. Describe the nature of any sales classiSed
(}' M ties, as Other Power, column (b). ated Utilitjes.(2)Nonassociated Utilities,(3)lic Other Pub Au orities. (4) R.E.A. Foreach Cooperatives, and (5)lassiacationin column saledesi 4. If deliver (b)(e)y. thus: In column is maderesat a substation indicate ownerahlp thus: Arm power,gnate statistical cFP; durnp or surplus , pcwer, customer DP; other, owned or leased, G, CS. pondent owned or leased. RS: c
- Kw or Km of Demand jE l j (Specify Which)
Selee k g Point of DetW M onth y Annual Une ego yg S Contract Maalmum Mealmum U W Me. Oomend Demand Demand (e) (b) (c) (d) (g) (e) (f) (h) 1 2 3 4 N 5 6 7 8 9 10 11 22 13 (j
*=
14 25 l w" 16 17 18
)
19 20 21 22 23 24 25 26 21 28 89 30 31 32 33 34 35 36 37 38 (.". 39 ( 40 j
- 41 l 42
.___w
h Annual report of......fN. k 53 r .W... . . . .. . . . . . . . . . . . . .. . . . . . .. . . ...'.. . .'.~. . SALES FOR RE8 ALE (Account 447)-Continued
- 6. If a axed number of idlowatts of maximum demand is specioed in the power contract as a basis of bGlings to 6. The number of kilowatt-hours sold should be the the customer this number should be shown in column ' quantitles shown by the bills rendered to the purchasers.
The number of kilowatts of maximum demand to be7.h(f). Explain any amounts entered in column (n) such as r and b) abound be actual based on monthly fuel or other Mustruent
-e la column (ds)hould(be furnished whether readings an determination of demand t.harges. Show in column (1) type 8. If or not used a contrset in thepoints of delivery and covers several of demand reading (instantaneous, 25, 80, or 80 minutes amau amounts of electric energy are delivered at each point.
integrated). such antes may be grouped. Vehese Revenue (Omit Cente) TPDe of et Revenue Demoed m gig ***tt' Demand P*' k*'s Reading Dellwored hours Cha (Cents)
'N W rsee i I (o, o) L n.
O (80 (r) y y 1
.. 2
$' 8 y 5 6 7 8 9 10 ( 11 i
.p %
~
12 l e; 13 D 14 15 16 17 18 19 l 20 21
'y 22 23 l 24 ,
l- 25 26 27 28 d 29 30 31 32 r 33 35 86
'r ' 37 38
(_ 39 40 4I TOTALS I I 42 [.
1 E. Ya . i ;. ; , u y: %" . % Annuel report 9f....... 7P.gggg gggigiggl @ M .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yea r end ed Dec em ber a l . 19. . . .
PURCHA8ED POWER (Account 858) , (except interchange power)
- 1. Report power purchased for resale during the year. Authorities. For each Exclude from this schedule and report on page as particulate Scation in entuma (b), thue: purchase Arm designate power FP;statistleal dump or classi.
conostning laterchange power tranenetions during the year, surplus power, DP; other,0, and plaos an "x," in column (e) -
- 2. Provide subbeedinge and classify purchases as to if purchase involves import across a state line.
(1) Assoelated (2) Naa===andated Utattles. 8) 8. Report separately Arm, dump, and other power pur. Associated Nonutill Utuities,(4) Other NomutDities. (5) Mu(ni-ehased from the same company. Desertbe the nature of any m edpalities, (6) R.E.A. atives, sad (7) Other Public purchaseo elamalftad as Other Power, column (b). Kw or Mwe of Demand (Specify Which)
. Awmp Purchased From Point of flocolat Monthly Annuel Line 11 Contract Demand Menimum Demand Menimum Demand No. (e) (b) (c) (d) (e) (f) (g) (h) 1 2
- 8 4
5 6 7 8 9 10 11 ( 12 18
.g 5-- 14 15 16 17 18
! 19 20 21 22 28 24 26 26 27
= l n
30 81 82 , 88 l
^
34 .. 86 86 87 kE 88 89 40 41 42 - > I
I 65 Annual r5 port af. .. .... .. p.,.y, .- .. .: u;--' *; r, r ,n*N 'gm ag* * * ** * * ** * * * ** * * * ** * * * * * * .* * * * * . . .. ,. ,,,,
. . . .. ...it.
f ,
'O
- PURCHASED POWER (Account 555)-Continued
. f;
'). (except laterebange power)
- I .
\ 4. . If receipt of power is at a substation Indicate ownerahlp in colume e thus: should - be furnished whether or not used in the determination owned or le(as),ed. SS. respondent owned or leased. RS; seller of demand charges. Show in column (i type of demand
- 6. If a Ased number of kilowatts of maximura deniand reading (instantaneous,15,30, or 60 minu)tes integrate is speel6ed in the power contract as a basis of bDling, this 6. The number of idlowatt hours
. (. number should be shown in column f). - The number of kilowatta of maximum demand to be s(hown in columnsExplain 9"** titles ab**" bY the P'wer bills, purchased abould be the g) any amount entered in column (n) auch as fuel -
, and (b) should be actual based on monthly readings a(nd or 7. other adjustments.
TFpe of Veitage Cost of Emergy (Omit Cents) g%g, Cost Demand at Which g ,, per Reeding Dellvered "WH Energy Other Charges Charges Charges (Cents) Total
' (I) (p . (g) (0.0000) Une (f) (en) . (n) 4.) g,) . %,
1 2 3 4 5 6 7 8 9 10 ((2 11 12 13
=*. 14
- 15 1 I 16 17 18 19 20 21 22 23
. 24 25
\ 26 'i I
. 27 j 28 29 30 )
31 32 33 34 35
.* 36 37 3S 39 40 41 TOTALS g
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)
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)
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- i fao s od ppnt i a n h d
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- A T
I nil n D, e t e netmasl atnpn ) O r la( I ( Bubpa rc e aeeo o $= d T f o p r M. i ( rnfnrc t &2 E t e x ae ot erg n t Rtersdepgepnt n e E a fr ett h e n - nfo m i d i W PI o ns otmseoc men or m e O ni -r.itt i l ta c l t t g P d ed arun rnrt e oeer e A c S e - E ho ewecr neocihs t d f - C sP e i sgami n o c nathn e g o - N nr ee ra u u n t olh s s a s A gd l u t nf p cf t . i H fnu al netxuI hrc g n t a e C eh c ne ni e s .di e e a D R lbc E late ormcr rimodf e p ri c eeehdc In r t h c r e T h nlscn or bhiind n f t n
)
c B w N sIaicoawma o I y f I ( r o dti s- - ,- .r a t nd e1 g: nsr) em n n 1to vt i ae r aUNi eebwo mu t n(n p P o dc i S er h i vo ee ce retah e praehme d r_ c u g cg t to al on . er ra I ni cO o oe c ha A s r h f ys)Crnc s
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. =. 4
- b
( li6 oct wde o ngra sn .t(i(h a en a sie nu s upm l ia .tl k gt e r r e a ei nlNi it oi tA einl i et het ywdoaU la iclt e epe d pl e s y wh ebetic ot hdeibtuaf t o c y n l eg guaianPs n sicu t s p a bn a irheosMe co rar sl a m o ) p m t s s hsu C a o toc C) rucdsA)Oct od p ri ede t nr)) evA o 5( ri r t e ( f i( o
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1 len du atieiuact nh .- no _ 1 2 3 4 6 6 ' 8 9 0 1 2 e, no - 3 uN . . 1 1 1 UN - 1 u15 c7 i 819 10 1 2 2 1 N
annuen veri es.....DlHIGSD..MO.1E A P3.l..ldSIlf. IRE,.URen ,t,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,y,,, 5'
,,,,, ,,,,,,,,,,, g,; ,p 6 ,, j y
P ELECTRIC ENERGY ACCOUNT ' neport bene, e i. sere.Li enri.d ser e e raine e di seine et esseerie ar seeeree.d. peche.ed. *=d ist a deine she year. - Line No. Mom (a) $U6eestt.4 eurs (3,)
- e. 1 ~
SOURCES OF ENERGY 2 Generation (enduding station use): j 8 i 4 Siemen.........................................................................'.... 147,360,000 l Nudear...................................... 5 Hydro...........................................................................
. oo,e,............................................................
34 598,000 e i T .............. .................... Total generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . { 8 .................... 181,958,000 ' 9 Purchasse....................................................... ......................... ............ 159,594,337
'In (grose). . . . . . . . . . 156,804,000 *******
10 Interchangen.............................< Out (groes). . . . . . . . . 28,840,970 . . . . . ... 11 12
, Net (inrb ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,963,030 )
Recalved . . . . . . . . . . . **=**** 18 Tranonission for/by others (wheehag). . . . . . / Delivered . . . . . . . . . . . 14 ******* 1 15 TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., Net (Inrb ) . . . . . . . . . . . . . . . . . . . . . . . . .! 16 DISPOSITION OF ENERGY 464?515.367 17 Sales to ultimate consumers (induding laterdepartmental sales 353,230,002 p, 18 Sales for resale . . . . . . . . . . . . .,. . . . . . . . . . . ...... . . . . ..........
. . . . . . . . . . . . . .) . . . .81,869,702- .............
, 19 Energy furalshed without charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............ .................. '
20 Energy used by the cornpany (enduding station use): 21 Electric department on1y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4,752,795 ...... ! 22 Energylosses: 23 Tranerniasion and con version losses . . . . . . . . . . . . . . . . . . . . . . . . .
/ 24
, 25 Distribution losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unaceountad for lesene . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
?6 Total energy losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,662,868 ......
. 27
~ Energy losses as percent of total on line 15. . . . . . . 6. .U. .. . .. . % '
28 TOTAL %- 469.515.367 MONTHLY PEAKS AND OUTPUT
- 1. Report bemeder the informaesen aan. see ases to eimes.
teneous penha statshabad meathly (sa kilowetas) monthly output (se s. staw type of meethly peak reading casianianeo= ss, 30. er ao haJewet> hours) for the sembined soureus of e6.ctrar energy of reopendent. asinut.e latesrated.)
- 2. Meethly pean est. (b) eheuld be respoedest*, maalasues he lead as 4. Meathly output eboeld be the sum o meuured by the sum of its soinciden tal met eentre and pur+h- plus er maises set noterchase,f andevependent's plus er manusmetmetsumerstien trane, er asieus set interehamee. minus tempersry del t.oe and purchases plus awan.oo or wheebag. Total for the year abound agree with line is above.
of emerseery posse to another estem. Meathlyernes pas met interchaasel imeludans such es a. If W respoedent bu two or amore power enterms set physsaally emerscoer debwer.es should be above is a feoemete with a bnsf espinaation as to she assure of tas eens acy ay,aneeted. g , W mformatsoa saland for below should be fureashed for each System Monthly Peek Dey ef Monthly output Llae Month susowetts (kwh) Oey of Week Month Hour No. - (e) / Type of Reading (See instr. d) (b) (c) (d) . (e) (f) (g) January........ 71,000 Thursday 15 P.M. 60 min. 7 57,114,653 30 February. 66,000 Tuesday 7 10 A.M. 60 min. 41,644,218 31 March . . . . . 62,000 Thursday 13 12 Noon 60 min. 45,096,345 32 A pril . . . . . . . . . 59,000 Wednesday 23 11 A.M. 60 min. 35,798,505 33 May,. ... 58,000 Monday 19 3 P.M. 60 mi,n. 29,307,225 34 J une . . . . . . . . . . 60,000 Monday 16 3, P.M. 60 min. 28,630,602 35 July . ...... . 65,000 Thursday 24 1 P.M. 60 min. 43,706,752 36 August. . . ... 65,000 Monday 11 3 P.M. 60 min. 35,651,024 37 September. . 59,000 Tuesday 30 12 Noon 60 min. 29,167,401 38 october. . . 66,000 Wednesday 01 12 Noon 60 min. 32,705,360
;. 39 November. 68,000 Thursday 20 10 A.M. 60 min. 40,491,914 40 December . 71,000 Tuesday l 09 5 P.M. 60 min. 50,637,990 41
_ 1 2 469,951,989 I
L,
. . . . . . . .. . .. . . u . . . .. . . n .*H W.'.*. .MW..I.....'.'t.. 8
............. ....... . . . . ... .. ......Ves t Caded December S t.19. . . 6
- CSNSRATING STATION STATISTICS (large Statione) *
(Eacept Nuclear. See Instruction 20) ,. 3.' eat. ,n ow.e. =
.e saari x.4 = m. ,.r.,:em of en ebedsae
- t. nod
.= et.m ow nyd,e 4.
acu Ke* er meert of inst y a d ou.n eutane et me.ii.if ,e.b demperned. bie,i.ewrine d s., op mimete se ses a=shw. esee et wh h and 2.400 Kw. te.vinti.ause empnesty ety, me se ressmas). PJ0.000 Eur yeedest are a24 App.000 ee ei nament leenroe operatans revenees of s* s. If ena are : ore.) eeport Leeof employees attende esere than ese tieg mtion. ' 2 to anch saaneen. the appreeaannte averese number of en res* a.senese Pe eIf ae m t.r C.e,n.r.an.asie.s. e .te,.s . d s es.es . e.r e. tweeted.me a Jesat ee 4.$sedstr. If gas b usedAndeente and such feels bypinal is Isamed. essente se a there boele, de S.L.s. eentent et
- a. s u e.na,t.steund ame pves
. the essuty el fuel acessmed essverted to ao enll.eceilt d det esif I.ne letals.plaat espacity is ,epotted le hva instead of hileostle
- 7. Quastilles of fuel censumed and the aversee enet per unit of fuel )
eneeumed abound be sema.elesa mith sharse to espener secounta Jol and une seem
" Psent M , P6 ant Plant W. Wath Stre eL CleatT-Flood ClearfGFlood 1 Kind of plant (steam, bydro,lat. oosab., gas turbine) Steam Steam Combined Cycle 2 Type of plant construction (conventional, outdoor Steam gas Turbine boiler. fu!I outdoor etc.). . . . . . . . . . . . . . .Conventional ......
. Conventional Conventional s Year originally constructed . . . . . . . . . . . . . . . . . . .. . 1902 1966
-4 1971 Year last unit was lastalled. . . . . . . . . . . . . . . . 1958 . .... 1966 1976 5 Totalinatalled capadty (maximum generator name )
6 plate ratings in kw). . . . . . . . . . . . . . . . . . . . . . . . . . 13*500 28,300 110,000 7 Net peak demand on plant. kilowatts (40 min.).. .* 26,000 110,000 1,883 Pla nt hours connected to load. . . . . . . . . . . . . . . . . . . 1.947 4 Net continuous plant espability. Idiowatta: 9 (a) When not limited by condenser water....... 10,000 25 10 110 000 (b) When limited by condenser water. . ... . .... 7,500 00 11 , 103,000 ' Average surnber of employew. . . . . . . . . . . . . . . . . . . 48 12 48 Net generation, emelusive of station use........... 13 Coat of plant (omit cents): 25'310'000 126,362,000 14 Land and land rights. . . . . . . . . . . . . . . . . . . . . . . . . 24 109 51,067 35 17 ,24 ,. Structures and improvements. . . . . . . . . . . . . . . . . . 229 558 1,195,175 16 17 Reservolts, dams, and waterways . . . . . . . . . . . . . .5*416*746 3,422,257 3,552,431 24,192,867 Q[ Equipment easts... . . . . . . . . . . . . . . . . . . . . . . . . . . - 18 Roads, railroads, and bridges... . . . . . . . . . . . : . . . 3 19 10 Total cost. . . . . . . . . . . . . . . . . . . . . . . .7.670.413 ......... 4.668,499 Cost per kw of lastalled capacity. . . . . .. .. .. . 27,919,547 ,
;3 568 j Production expenses: 165 254 22 Operation supervision and engineering... . .....
23 12,317.56 339,961.57 Station labor. . . . . . . . . . . . . . . . . . 54,485.22 24 Fue1..............................'..'...... ............. 1,055,681.84 496,612.01 25 Supplies and expenses, including water. . ... 1,104.60 4,222,417.72 26 111,793.34 254,193.45 27 Main tenance . . . . . . . . . . . . . . . . . . . . . . . . . .6,435.92 ..... 370,725.11 Rents..................................... . 2,538,867.23 16 29 Stea m from 'other sources. . . . . . . .... . . a.. . . . . . . . 80 Steam transferred-Credit. . . . . . . . . . . . . . . . . . . . To tal production expenses . . . . . . . . . . . . . . . . . . 31 7.540.s? 1 6ns nn1 n7 Espenses per met Kwh (6 places). . . . . . . . . . . . 7.852.051.98 82 Fuel: Kind .06341 .06214 t 83 Unit: (Coal. tons of 2.000 lb.) (Oil-barrels of 42 gals.) (Gas.M cu. It.) (Nuclear, indicate). . . . No. 6 011 Bbis No. 6 & No.2 34 Quantity (unita) of f uel consumed. . . . . . . . . . . . . Oil Bb1s 85 Average heat cont 4at of fuel (B.t.u. perlb. of eoal. 57.337.11 199.624.90 3:
- per gal. of oil or per cu. ft. of gas). . . . . . . . . . . 149,705 146,594 Average cost of fuel per unit, del. f.o.b. plant. . . .
87 Average cost of fuel per unit consumed. . . . . . . . . 16*1563730 16.4285874 .- 38 Average cost of fuel consumed per mi!!!on B.t.u.. 17.8096376 21,1517587 89 Average cost of fuel consumed per kwh net gen.. 2.832497 3.4354225 40 Average B.t.u. per kwh net generation. . . . . .
*040346 .026956 -
41 14'244 7,846 42 _-_-_---N
5
. Annual r: port af.....Xa,t;g p,9,9,,My,9f p,f,p,a1,,(,jghtjgg,f1a.9.I..................................... Year caded Decernber 31.19 0.h.
k:,i
.. GENERATING STATION STATISTICS (Large Statione)-Continued l (Escept Nuclear, see Instruction 10) !
\
M as shown en line SL operation with a conventional steam unit, the saa turbine should be included I f (
" a unta er of Aeoounta. Prodnetion as bensuo i unsa resor bed y'the rI8 bowever, do act inelede Puroytem
. I t operates a auckr pow genersh eMon submits (a) a br es lanatory statement eonesrouas accouaung for the Power. By m Ce mt of pow genera heludans any attnbutaca of enous mte to neaarch gy ,,et.e.g htrol an,N,,gy g nd Dispet.e.hing, and Other Espeasse and development esponses; (b) a bnel explanataos of the fuel assounting specifying the sooountang methods and types of cost unats used with
- 9. If any plaatis equipped with eombinations of steam hydro laternal roepect to the vernous components of the fuel cost, and (c) such additional sombusboa eagnae or gas turbara equipment, each should h repo,rted as a informauca as may be informauve coneermang the type of plant. kind of separate plast. Homover. If a esa turbine unit functions la a combined fuel used, and other physaoal and operating charseterasuca of the plant.
Pient Pient Pient Plant Plant Pient Line (*) (9 (8) (h) (1) (j) No. l l l 1 1 3 4 , 5 6 7 W. 8 9 ! 10 l l 11 l 12 30,286,000 13 14
- ( Note
- All cost figures 15 l
included under co] umn 16 l D except Fuel whic h 17
- s. is included below 18 19 20 21 22 23 24 25 1,299,593.41 26 27 l 28 29 30 31 32 No.t gas 83 Meu Ft.
440,225 34 1,031 E5 2.95 2.95 36 87 , 2.863348 ( .042911 38 14,986 39
. 40 41 42
annoen no.,i as.. ..... .Tatto. tan..tivn ArJull.h.18 h t.ing..P,1,an t,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,y,,, ,u,, 86 o,,,,,,3 3, 3,, , l' STEAM CENERATING STATIONS
- 1. Report the information called for concerning gener. :
sting stations and equipment at end of year. lessor, date and term of lease, and annual rent. For any generating station, other than a leased station or portion
- 2. Eaciude from this schedule, plant, the book cost of thereof for which the respondent is not the sole owner but which is included in Account 121, Nonutility Property,
- 3. Designate any generating station or portion thereof which the respondent operates or shares in the operation of, ("'
furnish a succinct statement explaining the strangement and for whleb the respondent is not the sole owner. If such property is leased from another company, give name of giving particulars as to such matters as percent ownership by respondent, name of coowner, basis of sharing output, , Boilers Name of Station tocation of Station Number Rated Men. Kind of fuel Reled meted and Year Continuous and Method Pressure Steam instelled of Firing M lbs. Steam in Ibs. Temperature
- per Hour No. (e) (b) (c) (d)
- (e) (f) (g) 3 2
500 W Water St W. Water St Taunton, MA 1 1933 011 Auto 450 725 90 8 4 1 1942 011 Auto 900 825 170 5 1 1952 011 Auto 900 825 150 6 1 1958 011 Auto 855 905 160
- 7
~
8 9 10 11 '* ' 12 13 *
- 14 15 16
.. 17 N
18 19 10 21 12 23 24 25 Cleary-Flood 1314 Somerset 26 . Taunton, MA 1 1966 011 Auto 850 900 .300 27 18
, 19 30 Cleary-Flood 1314 Somerset 31 Taunton, MA 1 1975 011 Auto 1800 1000/1000 557 32 33 34 35 36 37 --
~
Note reference: * *
~.
- Indicate rehest boilere thusly, 1050/1000.
d ., j 4
1 Annual s: pert et......T. a..u..n..t..c.,n. ...M..u..n.i.c..i..p a.l... .L..i.g h..t..i.n..g s k,,,- P..l.a..n..t.......... ..... ...................... year ended Decemi j T STEAM CENERATING STATIONS-Continued expenses or revenues, and how ezpenses and/or revenues are accounted for and accounta affected. Specify if lessor, 6. Designate any ptant or equipment owned not oper. sted, and not leased to another company. If suc,h plant or
- k coewner, or other party is an associated company,
- 4. Designste any generating station or portion thereof equipment was not operated within the past year explain leased to another company and give name of lessee date and whether it has been retired in the books of account or what disposition of the plant or equipment and its book cost are term oflease and annual rent and how determined. Specify . contemplated.
whether lessee is an associated company. Yurbine Generators
- Name Piete Rating Steam _.
in Kilowetts Pressure et At At Pressure Capacity Year Throttle Minimum Maximum Power Voltage Masimum InstsNed Typet g,p.48 a Hydrogen Hydrogen Factor Name Plate M' K.v.it Pressure Pressure Min. Mos. Ratingt g ,, (h) (1) (j) (k) (t) (m) (n) (o) (p) (a) (r) No. 1933 S.C 450 3600 7500 Air Cooled 80 13800 7,500 1 T.N.C . 2 1942 200# 900 3600 5000 Air Cooled 80 13800 5,000 3 S.C. 4 1952 1.5"H3 900 3600 10000 Air Cooled 80 13800 10,000 6
- 6 NOTE A 7500 KW No 3 unit not operate 1 since 1974. Unit is consi lered 7 irtef fic tent and unreliable 8 9
NOTE B Other u 11ts 1 Lsted abcve at We st Water Str( et Generation S :ation 10 have no : c.pe r tted sinc e Octobe r 31, : 978. None c f the uni :s at 11 Kest Wa :er St- eet have been re : ired ' rom t1 e bool< s. These units 12 w ill re nain inactive oad futur a retirement of thc se units >r I la reactiv f.ty ca lnot be c etermine l at this tin e. 14
~ 15
{' i 16 j N 17 q 18 j 19 20 21 22
)
23 S.C 24 j 1" HG PSIG PSIG 25 l 1~966 ABS 850 3600 22000 28300 0.5 30 85 13800 28,300 26 l 27 l 28 29 T.C 30 1.5"HC PSIG PSIG 31 1975 ABS 1800 3600 9000 0.5 30 85 13800 90,000 32 33 34 j 35
)
36 Torats 140,800 l 140.800 37 l l Note references:
,. ' Report cross-compound turbine-generator units on two lines - H.P. section and L.P. section.
(Indicate tandem-compound (T.C.); cross-compound (C.C.); all single casing (S.C.): topping unit (T), and noncondensing (N.C.). Show back pressures.
! Designate air cooled generators.
till other than 3 phase. 60 cycle. indicate other characteristle. t1Should agree with column (m). l 1
)
- Araues reeeet of....T,a,qp,3,9,9,,My,9,jp,,1,p,a,},,p,$3h,t,1,93,,p,},a,q,t......................................vur cadio oectmber a t HYDROELECTRIC CENERATING STATIONS
- 1. Report the taformation called for concerning gen.
ersting stations and equipment at end of year. Show associated rime movers and generators on the same line. propert is leased from another company, give name of lessor, ate and term of lease, and annual rent. For any (: '
- 2. Exci e from this schedule, plant, the book cost of generating station, other than a leased stat!on, or portion which is included in Account 121, Nonutility Property, thereof, for which the respondent is not the sole owner
- 3. Designate any generating station or portion thereof but which the re.ipondent operates or shares in the oper.
for whleb the respondent is not the sole owner. If such ation of, furnish a succinct statement explaining the ar. rangement and giving particulars as to such matters as water wheels Name of Station Location hme of Stream cross steile une Attended or Type of Year Heed with Me. (e) unettended unite instened rend run (b) (c) (d) (e) (f) '(s)- 1 None 2 3 4 . 5 6 7
.S 9
10 12 S gg . 14 15 16 f[J ( 17 18 19 20 21 22 23 24 25 , ' 26 27 28 29 30 31 32 33 34 35 36 \ 37 38 39
'liorizontal or vertical. Also indicate type of runner - Francis (F), fued propeller (FP), automatically adjustable propeller (AP). Impulse (!).
- g ., ,, , . . . ,~. . . . . . . . . . . . a . c. .w wn , . g egg g. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i r eiw .o u.com e>., a g , t 9, , , ,
1 HYDROELECTRIC CENERATING STATIONS-Continxed Y S whether lessee is an ===e3=+ad company.
' Ent of of ownernhlp sharing output, byexpenses, rW=t, name of co and or revenues, owner. how 5.
~
any plant er ognirmaat owned, not . expensee and/or revenues are secounted for and secounts ated and not 1====d to another company. If such p t afected. Spedfy if lessor, co owner, or other party is an or equipment was not 3 ( aseodated compeay, whether it has been within the past year erplain in the books of account or what
- 4. Designate any generating station er portion thereof disposition of the plant or equipment and its book cost an leased to another y and give name of lessee, date contemplated, and term of lease an annual vent and how dete! mined.
O Weter Wheels - Continued Generetors Total Installed Menimum hp. Name Plate Number Generating Capacity of Fre. Reting of of Capacity in Kil. Unit at Year quency Unit in Units in owetts (name Desisn Head R.P.N. Design Head insteHed Voltage Phase or d.c. Kilowetts Station plate ratings) Line (h) (1) (j) (k) (t) (m) (n) (o) (p) (q) No. 1 2 3 . 1 4 5 l 6 l 7 8 . 9 10 11 12 13 14 15 16 17 .. 18 19 20 21 22 23 24 25 l 26 27 2S j 29
. 30 l 31 32 l !
l 33 I
' 34 r ,
l 35 I i 36
- 3:
i ! ! ! as TOTALS 39
o , . . . . , . s 4 ,w ., .<c.a ' ^ ' '
" COMBUSTIQhl Eh'GINE AND OTIIER GENERATING STATIONS (tzcept nucitar stations)
- 1. Report the information caDed for conarning gen. party is leased from another com give name of ora cisted stations and equipment at end of year. Show asso.
movers and generators on the same line.
, date and term of lease, and aan ' rent. For any - ( i generating station, other than a leased station, or portion
- 2. clude from this schedule, plant, the book coes of which is included in Account 121, Nonutility Property.
thereof, for which the respondent is not the sole owner but which the respondent operates or shares in the operatioti (;,,' '
- 3. Designate any generating station or portion thereof of, furnish a succinct statement erplaining the arrangement for which the respondent is not the sole owner. If such and giving particulars as to such matters as percent owner-l Prime Movers j
Name of Station Olesel or Detted Location of Station Other Type Une Year 2 or 4 or Direct Engine Name of Maker installed Cycle Connected No . (a) (b) (c) (d) (e) (f) (8) 1 Cleary-Flood 1314 Somerset Ave Gas Turbine General Elec. 1976 - Direct l 2 Taunton, MA l ' 3 4 5 6 7 8 9 10 11 12 13 14 i i 17 k 18 ' 19 bi 20 21 22 23 24 25 26 27 28 29 30 i 31 8 32 l ,
, i ,
33 I 35 I ' ' 36 ' 37 38 , 39 ~
-g
i s
.?, Annute r? po,t at. ..... 14111& c.UAL..rLLLL&lE44)d A. .L L% .1.thg..& de dWs. ............ ...e.g.. ........... . 8 588 sa.usu ucs emuse J a , A v., g y k COM2USTION ENGINE AND OTHER GENERATING STATIONS-Continxed g (except nuclear stations) ship by respondent, name of co-owner, basis of sharing ; Specify whether lessee is an associated company,
(. output, expenses, or revenues, and how expenses and/or 5. Dem' enate a ty plant or equipment owned, not oper-revenues are accounted for and accounts affected. Specify if sted and not leased to another company. If such plant
. (" or equipment was not ted within the pastyear, explain
- t. co4wner, or other party is an associated company, lessor,
- 4. Designate any generating station or portion thereof whether it has been in the books of account or what date ' disposition of the plant or equipment and its book cost are
^ leased and term to another of leasecompany andrent and annual giveand name howofdeterm leesse,ined contemplated.
Prime Movers - Continued Generetors _ Total Installed Total Rated hp.
- f4eme Plate Number Generating Capacity Rated hp. of Station Year Frequency Ratingof Unit of Units in Kilowatts of Unit Prime Movers installed Voltage Phase or d.c. In Kilowetts in Station (name plate ratings) Line (h) (i) (D (k) (f) (m) (n) (e) (p) . No.
36,810 36,810 .1976 13.8 3 6011Z 26,100 1 26,100 2 3
.4 i
1 5 6 1 8 f 9 10 11 ! 12 i i 13
! 14 d( l 15 16 17 18 19 a
b 20 l l 21 I 22 l t 23 i 24 I 25 26 j 27 28 e l 29
' 30 31 32
' 33 34 l 35 36 37 l 3$
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I.p' l !, .. Annues c pEtt df...........Tauntnn.II;JniC. ipa.l..I.ighL.iD8..@Rt................................ Year endid orcsinon 31. n..@6 . i NQ~: ,
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- ., t, TR.WS.\f!SS10N LISE STATISTICS .
~b Report intorniation concerning transmission lines as indicated below.
1 1
? /- ' - 4 Designation Length (Pole Mbles) .I i .\ : Typ. or -
' 0 88-
<I# ,
' pro,n yo Operating Supporting ' on structurns of on Structures of Nugner une Designated Another une gre f )
l: Voltage Structure Careuits ' an'J Mater 6el
,. t (b) (c) .(d). (v) (g) (h) ] t' -
he lj ' y'i , s (t) y ( _. - (f) .
-q i
'i Gen St.'#2J Switch Sta 2 115 KV ,Sp. Wd. St 0.91 None 1 795 A' l
-i 2 (Cleary Flood ) !
3 4 Gen St.s#2 Switch Sta'2 115 KV Wood Poles *U.91 None 1 795 A 5 (Cleary 1Flood ) - 6 7 Gen St. #2. Sub'sta. #16 115 KV Wood Poles 1.27 .e None 1 795 A o y o- 8 Gen St. #2 Substa. #16 115 KV Wood Poles '1.27 None 1 795 A 9 i 10 < 11 .
^ '
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, 16
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., '43 1 ! ,
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e
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... ........ . ... ...... . . ......g.. .y, .,;; .%W.* 6......voir twees Decomber 31, 2 p....I 3 ikb , , , . pm.- @ tV, I
10\T.RHEAD DISTRIBUTION LINES OPERATED ~
- 1 4 4 Une Length (Pole MHos)
(
.7 Me.
Weed Poles 4 I steel Towers 1
~ Totet Miles - Berlaning of Year. . . . . . . . . . 372.64 {
2 372.64
- Added Durlag Year. . . . . . . . . . . . . . . . 5.14 8 5.14 Retired During Ysar. . . . . . . . . . . . . . .
4 Miles - End of Year. . . . . . . . . . . . . . . , 6 377.78
. s D 377.76
. ~6 l y . h 8
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7 i 9 Distribution System Characteristics - A.C. er D.C., phase, eyelse ower, and opei 3, , 4 60 HZ A.C. primary 4160V secondary 30 3 wire 240/480/600V
- l 11 ,
at 30 4 wire 120/208V. .I i* 3, 10 120/240V 60 Z A.C. primary 13.800V Secondary 30 4 wire 120/208V - 14 .- ,- 15 30 4 wire 277/480V
<- {1 t
s l ELECTRIC DISTRIBUTION SERVICES, METERS AND LINE TRANSFORME! Liao Ta'ensformers
,, Line, he. glectric hmber of r.a 4 tem Watt. hour Total Services M eters hmber+
Capetity { , 7' Is (kte) ! Number et beginning of year. . . . . . . . . . . . . . . . 16,554 4 17 26,,072' 4',058 118,798.70 Additions during years . 18 1,093 19 Purchased . . . . . . . . . . . . . . . . . . . . . . . .** . ***** '65 5,245
. Ins:alled . . . . . . . .~. . . . . . . . . . . ...... . . . . . . . . . .334
, 20 Assoelated with utility plant acquired. . . . . . ******* *******
11 t' 22 Total additloos. . . . . . . . . . . . . . . . . . . . . . . 334 . Reductions during year: 1.093 65 5,245 ) 28 24 Retirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,316 56
- Associated with ut!Ilty plant sold. . . . . . . . . .
738.50
$5 -
26 Tota 1 reductions. . . . . . . . . . . . . . . . . . . . . . . 1.316 56 738.50
' Number at End of Year . . . . . . . . . . . . . . . .
27 25.849 4,067 123,305.20 28 In st ock . . . . . . . . . . . . . . . . . . ......... . . . . . . . . . . . 302 . . . . . . . . . 1 6 . 811,057 227 88 29 Locked meters on customers' premises . . . . .. . . . . . . . . . . . . . . . . . . 30 Insetive transformers on system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f In customers. use. . . . . . . . . . In company's use . . . . . . . . . . . . . . . . . . . . .'. . . . . . . . . . . . . . . . . . '^25*489 111,090.70 I 31 .. 3*814 l 32i .................... ' 26 1,157.50 l Num ber a t End of Year. . . . . . . . . . . . ........... .................. ) 25.849 4,067 l 123,305.20
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, Municipal other Mun6cipal other Municipet No.
other Municipes other (a) (b) (c) (d) (.) (Q (g) (h) (1) (D i 3 Taunton 5517 1908 19 1864 346 ' 1244 136 3 Raynham 543 196 10 78 143 4 24 92 5 No. Dighton 152 0 2 122 6 6 13 9 7 Berkley 107 29 22 2 47 8 2 5 9 10 11 12 13
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g.y McN 57 ;' ', ;. ; d g 94. fy , ,, , OM RATE SCHEDULE INFORMATION
?.' L ~ 1. Attach copies of all Filed Rates for General Consumers.
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- 2. Show below the changes in rate schedules during year and the estimated increase or decreaw in annual revenue predicated
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. Estimated Effect on Date M .D.P.U. Rate Annual Pevenues Effective Number Schedule i increases Decreases I. I 10/01/86 100' Residential Service General -
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10/01/86 101 General Service ? 10/01/86 102 Secondary Light and. Power Service - - 10/01/86 -103 General Service - Primary: - - l 10/01/86 104 All Elect. Commercial Apt Bu11dini; - - j 10/01/86 105- Street Lighting' - -
, 10/01/86 106 Private Area Lighting - -
10/01/86 99 Power Adjustment Clause - - Service Classification No.1 j A% W I l ,,) ;. ! y g
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. J. x INDEX '
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' Appropriations of Surplus . .. . . . . .- . . . . . . . . . . . . . . 21.
Appropriations Since Beginning of Year . . . . . . . . . . . . . . . . . . 5 Bonds . . . . . . . . . . . . . . . . . . . . . . . . 6 Cash Bala- . . . . . . . . . . . . . . . . . . . . . . . 14.
'M." Changes in the Property : . .. . . . .. . . . . . . . . . . . . . . 5 4 Combustion Engine and Other Generating Stations . . . . . . . . . . . . . . . 64-65 .
'I Comparative Balance Sheet . . . . . . . . . . . . . . .. . . . . . '10-11 Conduit, Underground Cable and Submarine Cable ' . . . . . . . . . . . . . . . 70 '
Cost of Plant . . . . . . . . . . . . . . . . . . . . . . . 8-9 Customers in each City or Town . . . . . . . . . . . . . . . . . . . . ~4 Depreciation Fund Account . . . . . . . . . . . . . . . . . . .. . . 14 Earned Surplus . . . . . . . . . . . . . . . . . . . . . . 12 ~ Electric Distribution Services, Meters and Line Transformers . . . . . . . . . . . . . .' 66~ Electric Energy Accounts . . . . . . . . . . . . . . . . . . . . 57 Electric Energy Purchased . . . . . . . . . . . . . . . . . .
. . 22 Electric Operating Revenues . . . . . . . . . .
. . . . . . 37 Electric Operation and Maintenance Expenses . . . . . . . . . . . . . . . 39-42 GeneralInformation . . . . . . . . . . . . . . . . . . . . . . 3
' Generating Station Statisties - . . . . . . . . . . . . . . . . . . . 58-59 g Generating Station Statistics (Small Stations) ' . . . . . . . . . . . . . . . 66 Hydroelectric Generating Stations . .. . . . . . . . . . . . . . . . . . 62 Income from Merchandising, Jobbing and Contract Work . . . . . . . . . . . . . St.
Income Statement -' . . . .. . . . . . . . . . . . . . . . . 12-13 Materials and Supplies . . . . . . . . . . . . . . . . 14
' Miscellaneous Credits to Surplus . . . . . . . . . . . . . . . . . . . 21 Miscellaneous Debits to Surplus - . . . . . . . . . . . . . . . . . . . 21 Miscellaneous Nonoperating Income . . . . . . . . . . . . .. . . . 21
! Monthly Peaks and Output . . . . . . . . . . . . . . . . . . . . 57 '-
Municipal Levenues .- . . . . . . . . . . . . . . . . . . 22
- Other Income Deductions , - .
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Other Utility Operating Income Overhead Distribution Lines Operated 21 50
. . . . . . . . . . . . . . . . . 69 g- - Production Fuel and Oil Stocks . . . . . . . . . . . . . . . . . . 18 Rate Schedule Information . . . . . . . . . . . . . . . . . . . . 79 Sales of Electrielty to Ultimate Consume.rs . . . . . . . . . . . . . . . SS Sales for Resale- Electric . . . . . . . . . . . . . . . . . . 22 1 Schedule of Estimates . . . . . . . . . . .- . . . . 4 Steam Generating Stations - . . . . . . . . .,. . . . . .. 60-61
. Street Lamps . . . . . . . . . . . . . . . . . . . , . 71 Substations - .. . . . . . . . . . . . . . . . . . . . . . 68 Taxes Charged During Year . . . . . . . . . . . . . . . . . 49 Town Notes . . . . . . .. . . . . . . . . . . . . 7 R Transmission Ilie Statisties . . .. . . . . . . . . . . . . . 67 Utility Plant - Electric . . . . . . . . . . . . . 15-17 FOR GAS PLANTS ONLY:
Boilers . . . . . . . . . . . . 75 Gas Distribution Services and House Governors and Meters . . 78-Gas Generating Plant.. . . . . . . . . . . . . . 74 Gas Operating Revenues . . . . . . . . . . . . . 43
*' Gas Operation and Maintenance Expenses . . 45-47
;h Holders . . . . . . . . . . . . . 76
,. Purchased Gas . . . . . . . . . 48 Purifiers . . . . . . . . . . . 76 -. Record of Sendout for the Year in MCE . 72-73 i Sales for Resale 48 ,# [
- Sales of Gas to Ultimt.te Consumers . 44 ,
Sales of hesiduals , . 48 Scrubbers, Condensers and Exhausters 75 Transmission and Distribution Mains , , . . 77 ' i M- i j
q EXTitACTS FItOM CHAPTElt 164 OF THE GENEItAL LAWS AS AMENDED V
( SECTION SC. The Mayor of a city, or the selectmen or munielpal light board, if any, of a town acquiring a gas or electrie plant shall appoint a manager of munielpallighting who shall, under the direction and control of the rnayor, ocieetmen or municipal light board,if any, and subject to this chapter, havn full charge of the operation and management of the plant, the manufacture and distribution of gas or electricity, the purchase of su :
quantity and quality of the supply, the co!!cetion of bills,pplies, the employment and the keeping of agents of necounts.' and servants, Jils compensation andthetermmethod, of officetime, shall prie be fixed in cities by the city council and in towns by the r+1ectmen or municipal light board, if any; and, before entering upon the , performance of his o!!icial duties, he shall give bond to the city or town for the faithful performance thereof in a sum and fonn i and with suretles to the satisfaction of the mayor, nelectmen or municipal light board, if any, and shall, at the end of each municipal year, render to them r.uch detaih d statement of his doings and of the businen and financial matters in his charge as the ' department may prescribe. All moneys payable to or received by the city, town, manager or municipallight board in connection with the operation of the plant, for the saic of gas or electricity or otherwise, shall be paid to the city or town treasurer. All accounts rendered to or kept in the gas or electric plant of any city shall be subject to the inspection of the city auditor or ofliect having similar duties, and in towns they shall be subject to the inspection of the selectmen. Tbc auditor or oficer having similar duties, or the selectmen, may require any person presenting for settlement an account or claim against such before him or them, irt such form as he or they may prescribe, as to the accuracy of such account or claim. plant of a falso oath shall be punishable as perjury. The auditor or officer having simdar duties in cities, and the selectmen in towns, shall approve the payment of all bills or pay rolls of such plants before they are paid by the treasurer, and may disallow and refuse having to duties, orfor approve the payment selectmen, shall file wi in whole or in part,th the city or town treasurer a written statement of the treasurer shall not pay any claim or bill so disallowed. This section shall not abridge the powers conferred on town accountants by sections fifty-five to sixty-one, inclusive, of chapter forty-one. The manager shall tot any time, when required by the mayor selectmen muni ments, balances,cipallight board,if any, and of the indebtedness or town of the department, make a statement to such officers of his doings, business, recei in his department.l SECTION 67. At the beginning of each fiscal year, the manager of municipallighting aball furnish to the mayor, selectmen or municipallight board,if arly, an estimate of the income from sales of gas and (lectricity to private consumers during the ensuing fiscal year, and of the expense of the plant duting said year meaning the gross expenes of operation, maintensnee and repe.ir, the interest on the bonds, notes or certificates of indebtedness Issued to pay for the plant, an amount for depreciation equal to three per cent of the cost ci the plant exclusive of land and any water power appurtenant threto, or such smaller or larger amount as the department may approve, the requirements of the sinking fund or debt incurred for the plant, and the loas, if any, in the operation of the plant during the preceding year, and of the costs, as defined in section 53, of the gas and electricity to be used bv the town. The town shall include in its annual appropriations and in the tax levy not less than the estimated cost of the gas and electricity to be used by the town as above detined and estimated. By cost of the plant is intended the total amount ex to the beginning of the fiscal year for the purpose of establishing, purchasing, extending or enlarging the By same. loss pended on the p in operation is intended the difference between the actualirn:ome from private consumers plus the appropriations for maintenance for the preceding fiscal year and the actual expense of the plant, recconed as above, for that year in caw such expenses execeded the amour.t of such
, income and appropriation. Ibe income from rales nnd the money appropriated as aforesaid shad be used to pay the annual eapenso of the plant, defined as above, for the fiscal year, except that no part of the sum thercin included for depreciation shall be ured .i I
( for any other purpose than renewals in excess of ordinary repairs, extensions, recomtruction enlarymemts and additions. TLn surplus, if any, of said annual allowances for depreciation after making the above payments slmil be kept as a separate fund and
%( used for renewals other than ordinary repairs, extensions, reconstructions, enlargements and additions in succeeding years; and no debt shall be incurred under section forty for any extension, reconstruction or enlargements of the plant in excess of th9 amount needed therefor in addition to the amount then on hand in said depreciation fund. Said depreciation fund shall be kept and managed by the town treasurer as a sepsrnte fund, subject to appropriation by the city council or selectmen or municipallight board, if any, for the foregoing purpose. So much of said fund as the department may from time to time approve may also be used to pay notes, bonds or certific:,tes of indebtednces issued to pay for the epst of reconstructi.on or rer,ewals in acess of ordinary repatra when such notes, bonds or certificates of indnbredness become due. Mi appropriationa for the plant r. hall be either for the annual reconstruction expense purpose other det*med than thatas above, stated in thoor formaextensions, vote kirg the sarne., enlargements or additions; and rio aporopriatio
. No bonds, nites or certificates of indelitedncas shall be issued by a to.m for the annusi expenses as deilned in this rection.
SECTION 63. A town manufacturing or telling gas or electricity for lighting thall keep records of its work and doings at its manufacturing station, and in respect to its distributing plant as may b required by tLe department. It shallinstall and maintain apparatus, satisfactory to the department, for the measurem,ent and recording of the output of gas and electricity, and shall sell the same by meter to private con.sumers when required by the departracnt, and,if required by it, shall measure all gas or electricity consumed by the town. The books, accounts and returns shall be made and kept m a form prescribed by the department, and the accounts shall be closed annually on the last day of the fiscal year of such icwn, and a balance sheet of that date shall be taken therefrom and included in the return to the department. The mayor, electmen or municipal light board nnd manager shau, at any requ! red by it relative to the condition, manarement und operation of said businem,shah, The departmcnt time inonitsrequest, submit s annual report describe the operation of the several municipal plants with such detail an may be necesary to diaclose the financial condition and 4 results of each plant; and shall state what towns,if any, opernting a plant have failed to comply with thia enapter, and what towns if any, are selung gas or elect ricity with the upproval of the department at he thr.n cust. The maycr, or r.electmen, or rnunicinal light board,if any, shall annually, on ur before such dato as the department thes, make a return to the department, for the preceding fiscal year, signed and sworn to by the inayor, or by a majnnty of the selectmen or municipal light board, if any, and by the mananr, stating the financial condition of said business, the amount of authorized and esting mdehtedners, a statement of incomo and expenses in meh detail as the department may require, and a list of its sal.:ried ofricers and the ralary paid t o each. The mayor, the selectmen or the municipallicht board snay direct any ndditional returns to be made at such time and in nach detail os he or they may order. Any ollicer of a town manufacturing or :eMing gu or elect ricity for lighting wiio, being required by this reuon to mako an :tmtud rtturn to the department, neglects to make auch nunual return rhall, for the hrst fif tetu days or partion thereof during which such neglect continues, forfsit five dollars a day; for the second Ditee n days or any portion thereof, ten dollara a day; and for each day thereafter not more than fif teen dallara a day. Any such otheer who unreasonably refuses or neglects to m d:e such
- 4. return shall, in addition thereto, forfeit not innre than five hundred dollars, If a return i4 defective or appears to be erroneoua, the department shall notify the oilieer to amend it within fif teen days. Any suels otheer who neglects to amend nald return withm
', the time specilied, when notified to do so, rhall forfeit fif teen do!!ars for each thy juring v.Heh auch neglect contirues. All foricitures incurred under this nection may be recover. d I y nn infunnation in eqeity inought in the supreme judicia'. court by tbc attorney , e.
general, at the relation of the di partment, ami w han m reew ired Adl f e p od La iho wounonweaid Sim r!ON CW Tha cupre.no M. iJ e nH f- tbe e.ut.:; w hv N nm o i::O .'cd : bail hn e juridiction on paiPon of thc departmet.t or of tw emy taWe n.L 'aii w i of t he i o.. o t o c. ap-! . L. Ah." ui i n..o b, une town in co.cpti meo with u-etion Isfly+even t.pd E!!ymirbt, to previ nt nhy tow n f rom p:.r. in iny, ep-rating or t glM. . . rmi or electric ; lant in violstion e' nny provision of this chapter, and ren ra'ly 19 enfure" rumphame wph the tems and pr.,vi3 ions thereof relative to the manufacture or distribution of gas or electrhity by a town. M
h ' 81 s . Annuti toport f.f.'. . . . . . . .~. . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . .. . . . . . . .. . . . . . . . . . . Year Ended December 31. 19. . . .
.s. . THIS RETURN IS SIGNED UNDER THE PENALTIES OF PERJURY
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of1Ae . Beard ; 1 l SIGNATURES OF ABOVE PARTIES AFFIXED OtfrSIDE THE COMMONWEALTH OF MASSACHUSETTS MUST BE PROPERLY SWORN TO i i s. i
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Then personally appeared . .. . . . . . . . . d-1: and severally made oath to the truth of the foregoing statement by them subscribed according to their best knowledge and belief.
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88 I CO-O - PIFE Vol. 48 No. 4 April 1987 l VEC REA Not In Accord Dy OIARLES FAHRINGIN i VW's long-running negotiations with the cess power supply, and thereby reducing the debt Rural Electrification Administration appear to ba and thr amount of revenue we need fran members to nearing the finish line, and there is still no keep the co-op functioning. Working with our clear indication whether we can achieve a settle- power supply consultant, Richard LaCapra, we have { ment acceptable to both sides. identified sales plans that would accomplish our REA and V W have each subni t t ed long-range goals, but those plans must be approved by REA plans for resolving the co-op's financial prob- since as our prime lender, that agency holds lems, but so far neither side has agreed to mortgages on all assets, including the generating accept the other's position, projects. One of the conmitments we seek from REA The plan offered by REA projects a long-range is assurance that when the assets are sold, the rate schedule for members that VEC management and long-term liabilities associated with those as-trustees have declared is unacceptable. The rates sets also are transferred, and that no matter under the_ federal agency's plan would be signif- what happens to a particular generating source in icantly higher than the average paid by Vermont the future, VEC will have no responsibility. I consumers. Rates charged by V T , because of its For the past eight months we have talked and very rural service territory, historically have negotiated with REA toward this end. At the same been higher than the statewide average, but the time, we have made preliminary studies into the REA proposal would increase the disparity even procedures and potential consequences of filing beyond the levels of the past. for bankruptcy. REA and our other creditors are The long-range plan we have proposed to REA fully informed about those steps and know that we projects rates that are within the historical are continuing to examine the bankruptcy option, ratio that our Board of Trustees has said would . be acceptable. The REA so far has not approved S E O PeniH#S ! the plan, however, instead, REA Administrator Six seats on the 15-member Vermont Electric liarold V. Hunter has urged us to join in yet Cooperative Board of Trustees are ope 7 for elec-another study, tion this year. In four districts only one candi-The trustees and I believe V T has all the in- date has filed nunination petitions and thus no formation we need to work out a plan that deals contest exists in those districts, with our financial problems, and that a conmit- Districts in which there is a single candi-ment from REA is necessary before we enter into date are: District 1, where the incunbent, Doug-more studies. We have decided that until we ob- las Racine, is seeking re-election; District 5, tain such a conmitment, which would include an where incunbent Bertrand C. LaGue is seeking re-acceptable long-range rate level, additional election; District 6, where long-time Trustee studies of new plans would not be beneficial. Douglas Webb is not running for re-election and Meanwhile, the co-op continues to operate with Daniel J. Batchelder is running unopposed for the l a satisfactory level of service for our members four-year term; District 9, where incunbent Mark 1 and with rates that are no longer the highest in lluessy is seeking re-election. Vermont. In fact, this is the first spring in The two contests for trustee are in District many years when a rate increase has not happened. 8, where incunbent Bryan Deuso is challenged by Moreover, the 19.5 percent rate increase that David A. Whitcomb, and in District 14, where in-went into effect early in 1986 has been rolled cunbent Robert Grossbaun is challenged by Walter back, and we have no plans to request that any Zisman, part of that rate hike be reinstated. VEC trustees are all elected by district, and ; The debt owed by the VEC and VE&T continues only members in those districts may vote in the l to mount, -however, and the Board and I are in- election. The term for all V T trustees is four creasingly concerned that we must take action years, soon_ to deal firmly with that problem. The un- Mail-in ballots have been sent to all members manageable debt load was created by past invest- in districts that are holding elections this year. ments in various generating projects and the re- Winners in the contested races will be announced sult is that we have far more power than our own at the VW annual meeting on May 16 in Johnson. members can use. On Pages 3-4 are campaign statements sutmitted Our proposed solution involves selling the ex- by all eight candidate 0 for trustee.
)
Page 2 , VEC Financial Statements For 1986 in 1986, the Vennont Electric Cooperat ive's av- costs from the Vin T and the mounting payments crage revenue per kilowatt hour was 10.14 cents, demanded fran hfMIC, the retail rate levels even an increase of 10 percent above 1985. The in- with the two increases did not generate revenues crease in revenue was due largely to a 17.5 per- sufficient for VIE to pay all its bills. The VIE cent rate increase in July of 1985 and a 19.5 per nanagement and trustees were faced with a decis-cent increase in April of 198G. In the sumier of ion of increasing the rates again to a level of 1986, because of the rapidly increasing power 80 percent above the state average or ending VEC's long succession VEC of rate increases and finding another op-STATISTICS OF OPERATION YEAR ENDING DEC. 31, 1986 tion. After serious consideration about WHAT WE TOOK IN: 1986 1985 % CHANGE our members and long discussions with the TOTAL ELECTRIC REVENUE 11,025,754 9,346,214 17.97% REA, the trustees on NON OPERATING AND INTEREST REVENUE 255,741 286,049 10.60% August 26, elected to roll the rates back TOTAL 11,281,495 9,632,263 17.12% by 19.5 percent. The decision resulted in WHAT WE PAID OUT: rates corrparable to \ VEC's historic levels. ( PURCHASED POWER 8,962,933 4,657,026 92.46% Along with reliev- t OPERATION EXPENSES 806,199 672,078 19.96% ing the members of a MAINTENANCE EXPENSES 470,098 402,814 16.70% degree of econanic CONSUMER ACCOUNTS EXPENSES 519,290 472,326 9.94% burden and allowing SALES EXPENSES 34,177 23,363 46.29% VEC to pay its bill, ADMINISTRATIVE & GENERAL EXPENSES 876,736 762,646 14.96% exclusive of debt ser-DEPRECIATION & AMORTIZATION 765,577 717,440 6.71% vice, the rollback TAXES 392,639 348,553 12.65% provided REA an opor-INTEREST ON LONG TERM DEBTS 810,536 758,326 6.88% tunity to evaluate OTHER DEDUCTIONS 24,607 46,902 47.54% the co-op's existing i and rnounting financ- { TOTAL 13,662,792 8,861,474 54.18% !al difficulties. The year 1986 re-WHAT WE HAD LEFT (2,381,297) 770,789 -408.94% suited in a $2.4 mil-lion loss to VIC; an estimated $2 million BALANCE SHEET YEAR ENDING DEC. 31, 1986 resulted fran VIRT's soaring power costs ASSETS (WHAT WE OWN) because of increased power costs and a de-ELECTRIC PLANT IN SERVICE 26,890,642 25,527,521 teriorated short-tenn CONSTRUCTION WORK IN PROGRESS 545,270 737,294 sale market. The op-LESS ACCUMULATED DEPRECIATION (7,760,530) (7,145,870) erating losses includ-ed accumulated arrear-19,681,382 19,138,945 ages on unpaid debt.
- OTHER PROPERTY INVESTMENTS 1,424,904 1,437,054 Even with the losses OTHER CASH & CASH INVESTMENTS 464,905 177,252 in 1986, VEC was able CUSTOMER ACCOUNTS RECEIVAPLE 2,485,099 2,575,904 to operate effective-MATERIALS & SUPPLIES 537,443 577,055 ly by resorting to OTHER ASSETS 439,896 414,970 operating solely from DEFERRED CHARGES 3,460,669 1,009,611 revenues and t enni- ,
nating debt service TOTAL 28,494,298 25,330,791 payments to REA/CFC. All bills for normal LIABILITIES (WHAT WE OWE) operating were kept f current. All the VEC MEMBERSHIPS ISSUED, PATRONAGE capital additions and CAPITAL AND OTHER EQUITIES 4,147,736 6,143,676 improvements in 1986, LONG TERM DEBT TO REA & CFC 17,594,085 16,686,954 which normally a re NOTES PAYABLE, 9.125% 123,000 544,000 financed with REA, ACCOUNTS FAYABLE 5,430,638 1,401,911 were funded from CONSUMER DEPOSITS 152,711 126,916 monthly operating rev-OTHER LIABILITIES 1,020,966 406,462 enues. j DEFERRED CREDITS 25,162 23,872 i t TOTAL 28,494,298 25,330,791 f I i i ( < . 1
Page 5 VEG&T Financial Statements 1986 in 1986, the V W&T purchased and generated Mi were as follows: 158,197,390 kilowatt hours with total expendi- CVPSC, 72,979,100 MI, 5.07 cents; liighgate, l tures of $10,672,228 and an average cost of 8.53 33,758,400 MI, at 2.97 cents; Millstone III, ' cints per M1 19,224,000 M I, at 7.28 cents; Vermont Yankee, in 1986, purchase power costs conprised 54 per- 17,660,100 M I, 7.74 cents; Merrimack, 7,577,400 cent of the total expenditures. The power pur- MI, 3.90 cents; North liartland, 6,331,300 M I, chased and generated in 1986 and average cost per 32.80 cents; gas turbines, 296,800 M 1, at 25.88 cents; other sources, VEG&T 3 ; "o "'- a' 4 2S STATISTICS OF OPERATION YEAR ENDING DEC. 31, 1986 Total power supply expenditures in 1986 WHAT WE TOOK IN: 1986 1985 % CHANGE increased 32 percent from 1985's level of TOTAL ELECTRIC REVENUE 10,684,975 8,094,572 32.00% .$8,112,413 largely as a result of Mill-NON OPERATING AND INTEREST REVENUE 10,151 69,136 85.32% stone 111 becoming TOTAL 10,695,126 8,163,708 perational in April and Vermont Yankee WHAT WE PAID OUT: 148,358 being out of service for six months of the j PURCHASED POWER 5,800,718 6,123,845 -5.28% year. ' NUCLEAR PRODUCTION 390,432 - ERR Of the 158,197,390 HYDRO PRODUCTION 124,367 29,458 322.18% M 1 Purchased and gen-erated, VEGaT sold to TRANSMISSION EXPENSES 505,844 424,748 19.09% q 1,056 1,334 VEC 74,891,300 m i at j CONSUMER ACCOUNTS EXPENSE -20.84% ADMINISTRATIVE & GENERAL EXPENSES 191,783 147,049 an average cost of 30.42% l DEPRECIATION & AMORilZATION 869,496 270,038 12.38 cents per MI ' 221.99% TAXES 224,899 148,361 51.59% and to other utili-3,570,331 ties 83,306.090 M INTEREST ON LONG TERM DEBTS 3,356,151 6.38% ALLOWANCE FOR BORROWED FUNDS at an average cost of l USED DURING CONSTRUCTION (1,397,140) (2,597,903) 46.22% 2.60 cents per M f. OTHER DEDUCil0NS 390,442 209,332 86.52% mt t P i 10,672,228 Sales Agrement be-TOTAL 8,112,413 tween VEG&T and VII, i I WHAT WE HAD LEFT 22,898 51,295 which requires VEC to be responsible for VIXl&T's total cost of BALANCE SHEET YEAR ENDING DEC. 31, 1986 ratin shor ASSETS (WHAT IE OWN) tem market for ener-gy sales, pmver costs fr m the V eat to the ELECTRIC i'LANT IN SERVICE 31,579,316 17,280,172 CONSTRUCT!c4 WORK IN PROGRESS 20,311,354 30,505,191 VEC went far beyond LESS ACCUMUL.'TED DEPRECIATION (1,030,001) (157,670) b ee pay the 12.38 cents I 50,860,669 47,627,693 79,173 79,173 pu ! OTHER PROPERTY INVESTMENTS VEG&p,hadconsequently 1 a cash ! CASH & CASH INVESTMENTS 21,189 230,876 ACCOUNTS RECE!VABLE 4,179,881 1,119,081 ! OTHER ASSETS 54,485 34,127 a EG]1 b l sufficient to neet DEFERRED CHARGES 3,455,247 3,781,840 its operating costs TOTAL 58,650,644 52,872,790 V t P enice ard denied LIABILITIES (WHAT WE OWE) VI?G&'l s requests for MEMBERSHIPS ISSUED, PATRONAGE ong-t em W M ng CAPITAL AND OTHER EQUITIES LONG TERM DEBT TO REA & CFC 104,421 81,523 28,721,465 41,820,666 c$ltgr r al rth e March of 1986 and ACCOUNTS PAYABLE 8,875,577 4,744,191 " 19,714,298 5,268,179 NOTES PAYABLE OTHER LIABILITIES 1,234,883 958,231 t s ]al b to meet its debt ser-TOTAL 58,650,644 52,872,790 [ .[Cl
Page 6 Appliance Sales Halted The VEC trustees voted unaninously on March 31 of help if, as, and when needed. Some five years j 1 to discontinue sales of appliance and associated ago, that help was again provided both without pa r t s . Appliance sales will be halted as of May unnecessary time spent in learning the layout. 1, 1987. and responsibly as needed and as planned. The re- 1 The strong vote came af ter the board heard a lationship has been depended upon, and continues detailed report from Linus Kinner, a certified to be a factor justifying our confidence in our public accountant hired to analyze the Appliance co-op. Division that has been operated for many years by We bought all our electrical appliances fran the cooperative. the co-op. This because we were assured that Kinner found that the appliance sales "are not parts and service personnel would be provided by profitable and will not be for nany years," even the co-op on a continuing basis, knowledgeable, if prices were increased significantly, reliable, prarp t ly, and at a competitive cost. Further, Kinner reported, customer accounts in Such assurances have been kept, are appreciated the division "are in a pathetic state of decay." greatly, and used. You need only your own records lie also found that only a very small percent- to verify this continuing relationship, the most age of co-op members buy appliances from VII, and recent being the replacement of a control clock that a large majority of the sales are to members for our llotpoint stove at a cost for parts of living very near the Johnson heackl uarters. something approximating $100, together with labor Trustees followed Kinner's reconmendation in for installation of about half that sum for ser-voting to halt appliance sales, and they also ac- vice, including transportation. The relationship cepted his findings in voting to continue sales continues to be relied upon, and is needed, of wire. Let me suggest that in all business, there are sinply some relationships that cannot be measured entirely by dollars and cents. Your analysis of To VIE
- I ' write in regard to the analysis of the co- your appliance division must surely recognize this fact, op's appliance division. This portion of the ac-tivity of Verunnt Electric Cooperative has been, J.R. Meek and cont inues to be inportant to my family, and Iowell to me, as a participant in the cooperative. The
Dear Mr. Meek:
service, the facilities of this division have I want to thank you for your letter outlining been helpful, even essential, fran the time, in your relationship with the co-op appliance divis-1969, when we first became members of the co-op, jon. I am pleased that you have found the ser-We enployed your people to install all elec- vices to be helpful over the years. I have been trical wiring in the home we built. This was a asked by the interim nunager to respond to your decision based upon the conviction that your concerns. people would be a continuing, knowledgable source The division has been reviewed twice in the l past year to assess whether co-op members use the l Vir TRUSTLm services and if it is profitable. Profitability j has been on a downward trend over the past year l Dist. 1: Douglas Itacine, itFD 1, Box 218, Itichmond with an accounting loss of $8,485 recorded for l 05477; 434-2013 (11) 863-1141 (11) 1986. In the face of this decline, we had to l Dist. i.: 11. A. liarrJo, West 11erkshire, 05450; determine if the benefits outweighed the costs of 933-2245 the division. Dist. 3: Vince Taylor, 101 #1, Itichford 05476; Our findings indicate that less than 5 percent 848-3710 (11), 848-7891 (H) of the membership purchased appliances in 1985 or Dist. 4: Alvin Warner, Lowell, 05847; 744-2753 1986. The largest usage of services is concentra-Dist. 5: Bertrand LaGue, Caswell Ave, Derby Line, ted within a close geographical area of the co-op 05830; 873-3374 headquarters. The division is not profitable cur-Dist. 6: Douglas Webb, Fairfax 05454; 849-6038 rently and probably will never be in the future Dist 7: David Polow, Box 35, Johnson 05656; 635- due to increased conpetition in appliance sales. 7526 (11), 888-7870 and 888-7707 (H) The losses are borne by all members to the pos-Dist. 8: Bryan Deuso Eden 05652; 635-2985 sible benefit of a very limited ntsnber of members Dist. 9: Mark iluessy, Thistles, IUt2, llox 366A, and non-members, who also have access to reduced Jericho, 05465; 899-4883 prices. Dist. 10: Itobert Northrop, itD 1, Hox 540, Cam- The Board of Trustees voted on March 31 to bridge 05444; 899-2522 discontinue appliance sales as of April 30, 1987. Dist. 11: Fred Nye,Itidge Road, Hox 181, Willis- The decision was based on the findings stated ton 05495; 879-71P0 above as well as the desire for division person-Dist. 12: Davi f ".'estern, ItR 1, flox 185. Wes t nel to concentrate on activities that benefit all Townsnend, Vt. 05359; 874-4350 (11), members, specifically, collecting past-due ac-875-2146 (11) counts. Dist. 13: Edward Druke, Newfane Hill Rd. F1tl , I am sorry if this disappoints you as an inci-Newfane 05345; 365-7307 vidual, but we must do what we believe is best Dist. 14: Itobert Grossbaum, Box 526, Whitingham for all members. 05361; 368-7789 Tan Pet i t Dist. 15: George 13ut ler, Jacksonville 05342; 368- Office Services Manager 2344
- 7) ' FOR DISCUS $10N PURPOSE 3 ONLY. I A
VERMONT ELECTRIC COOPERATIVE, INC. FINANCIAL STATEMENTS , DECEMBER 31, 1986 AND 1985 l AND i AUDITORS' REPORT I l t q 4 l z
\ i
POR DISCUSSION PURPOSE 3 ONLY.
\
l To the Board of Directors of Vennont Elecric Cooperative, Inc.: k We have examined the balance sheets of Vermont Electric Coopera ive, Inc. (a Vermont nonprofit and non-stock membership (loss), statements of operations and marginscorporation) as of D 1986 and 1985, and the related changes in equities and changes in financial position forldd the years then Except as explained in the following paragraph, ;our examinations were accordance with generally accepted auditing standardsd and, res as accordingly, we inc such tests of the accounting records and such other auditing proce u considered necessary in the circumstances. the' Cooperative is a party in litigation and The As of December 31, 1986 statements. regulatory matters which are not disclosed in these financial effect of these matters on the Cooperative cannot presently be determined. l As explained in Note 6 to the financial statements, the Cooperat l deferred aggregate costs of $3,400,000through rates and, because of be determined. statements have been prepared on the going The accompanying financial concern basis which contemplates the realization of business. As shown inof theassets financialand the liquid liabilities in the ordinary course loss of $2,381,387 during the year statements, the Cooperative incurred a netIn addition, as described in Notes 4, 5 and 9, the ended December 31, 1986. Cooperative is in default of mortgage obligations to its primary ble lenders affiliated Cooperative is in default of mortgage obligations and accounts The Cooperative is paya to contractors and vendors as of December 31, 1986. The appropriateness of bility of responsibler for obligations of the affiliated its Cooperative.the C obligations. The the Cooperative to generate sufficient cash flow to meet financial statements do not include any adjustments relating i to f the recove and classification liabilities that might be ofnecessary recordedshould assetthe amounts Cooperative andbe the amounts unable to con in existence. 1 \ be. .
f0R DISCUS $10N PURPOSE 3 DNLY. In our opinion, subject to the effects on the 1981 financial statomante of such adjustments, if any, as might have been required had the outcome of the uncertainties referred to in the preceding paragraph been known, such financial statements present fairly the financial position of Vermont Electric Cooperative, Inc. as of December 31, 1986 and 1985, and the results of its in operations confomity with and changes in its financial position for the years then ended, generally accepted accounting principles applied on a consistent basis. Our examinations have been made primarily for the purpose of forming the The data contained in the Schedule, opinion stated in the preceding although paragraph. not considered necessary for a fair included with this report, presentation of financial position, results of operations, changes in equities and changes in financial position in conformity with' generally accepted This dataaccounting has been principles, is presented for supplementary analysis purposes. examinations of the basic , subjected to the auditIn procedures our opinion, appifed in the the data is fairly stated in all material ) financial statements. l respects in relation to the basic financial statements taken as a whole. .. { Montpelier, Vermont February 20, 1987 0 l I f I I l l 4
~ -~~-~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
R DISCUSSION PURPOSE 3 ONLY.
,Vf.RMONT ELECTRIC COOPERATIVE, INC.
BALANCE SHEETS - DECEMBER 31, 1986 AND 1985 1986 1985 ASSETS (Note 4) ELECTRIC PLANT, at cost (Notes 1 and 4):
)
$26,896,642 $25,527,521 Electric plant in service 545,270 757,294 Construction work in progress Less- Accumulated depreciation
- N0 ',
', 5',b 19,681,382 __
19,138,945 ; OTHER ASSETS AND INVESTMENTS, at cost: 42,952 42,952 Non-utility property 1,381,952 1,394,102 Other investments (Note 2) 1,437,054 1,424,904 CURRENT ASSETS: 464,905 177,252 Cash and temporary investments less allowance for doubtful y 322,768 337,184 Notesreceivable$000in1986and$4,185in1985 accounts of $2 Accounts receivabie less allowance for doubtful 598,013 725,304 accounts of $130 Accounts receivable,000 in 1986 and $95,123 in 1985- affiliated cooperative 75,086 38,600 (Note 9) 537 443 577,055 Inventories (Note 1) / 117,,128 77,786 Prepaid expenses 1,812,000 1,812,000 Advances - affiliated cooperative (Note 9)
~f,927,343 3,745,181 DEFERRED CHARGES, net of amortization (Notes 1 and 6) 3,460,669 1,009,611
$28,494,298 $25,330,791 LIABILITIES AND EQUITIES EQUITIES: $ 57,595 5 55 440 Memberships issued and subscribed 3,362,480 3,256,,500 Patronage capital (2,064,225) 418 101 Other equities 2,791,886 2,410,,635 Contributions in aid of construction 6,140,676 4,147,736
- 16,686,954 LONG-TERM DEBT (Note 4)
CURRENT LIABILITIES: 17,594,085 - Long-term debt (in default) (Note 4) Notes payable 7.25% and 9.125% in 1986 and 1985 123,000 544,000 (in defaultf (Note 5) 1,251 402 283 376 Accounts payable 4,179,236 1,118,535 Accounts payable - affiliated cooperative (Note 9) 152,711 126 916 Customer. deposits 1,020,966 406,462 Accrued expenses 24,321,400 2,479,289 25,162 23,872 DEFERRED CREDITS (Note 3) COMMITMENTS AND CONTINGENT LIABILITIES (Notes 11 and 12)
$28,494,298 $25,330,791 The accompanying notes to financial statements are an integral part of these statements.
- - _ - _ _ - _ _ _ _ _ _ _ %) ""Y Y w f0R DISCUSSION PURPOSE 3 DNLY. j VERMONT ELECTRIC COOPERATIVE, INC.
STATEMENTS OF OPERATIONS AND MARGINS (LOSS) FOR THE YEARS ENDED DECEMBER 31, 1986 AND 1985 1986 1985 a
$11,025,754 $9,346,214 OPERATING REVENUES (Note 1)
OPERATING EXPENSES: 8,962,933 4,657,026 Cost of power (Note 10) 503,722 379,435 Transmission - by others 32,370 25,416
- maintenance 302,477 292,643 Distribution - operations 423,515 359,803
- maintenance 519,290 472,326 Customer accounts 34,177 23,363 Sales 876,736 762,646 l
Administrative and general . 14,213 17,595 General plant maintenance 755,048 706,911 Depreciation (Note 1) 10,529 10,529 ' Amortization (Note 1) 392,639 348,553 Taxes 810,536 758,326 Interest on long-term debt 23,513 42,820 Other interest 1,094 4,082 Other deductions 13,662,792 8,861,474 Total operating expenses (2,637,038) 484,740 Net operating margins (loss) NONOPERATING MARGINS: 268,600 297,509 Interest and dividend income (12,859) (11,460) Other nonoperating expense, net 255,741 286,049 i NET MARGINS (LOSS)
$(2,381,297) $ 770,789 !
l The accompanying notes to financial statements are an integral part of these statements. 1 i 1
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' l l;l l ll ,l ll l)I \I'l !fl\. .
VERMONT ELECTRIC COOPERATIVE, INCc FOR DISCUSSION PURPOSE 3 ONLY. STATEMENTS OF CHANGES IN FINANCIAL POSITEnw FOR THE YEARS ENDED DECEMBER 31, 1986 AND 1985 1986 1985 FUNDS WERE PROVIDED BY: Operations - Net margins (loss) $(2,381,297) $ 770,789 Depreciation and amortization not requiring the outlay of funds in the current period 1,160,274 915,867 Funds provided from (used in) operations (1,221,023) 1,686,656 Proceeds from long-tenn debt 1,020,000 776,000 Proceeds from short-term debt 23,000 666,140 New membership fees 6,270 5,750
! Additions to donated capital 4,951 3,940 l Increase in deferred credits 1,290 6,644 New contributions in aid of construction, net 381,251 290,130 Accounts receivable - affiliated cooperative 12,150 J
227,889 3,435,260 3 FUNDS WERE USED FOR: Payment of long-term debt 112,869 325,835 Payment of short-tenn debt 444,000 122,140 Additions to utility plant, net 1,358,768 2,080,868 Increase in investments - 14,275
! Increase in deferred charges 2,795,001 632,496 Memberships expired 4,115 3,945 4,714,753 3,179,559 INCREASE (DECREASE) IN WORKING CAPITAL, EXCLUSIVE OF SHORT-TERM DEBT $(4,466,864) $ 255,701 i
CHANGE IN WORKING CAPITAL, EXCLUSIVE OF SHORT-TERM DEBT, IS COMPOSE 0 0F: Increase (decrease) in current assets - Cash and temporary investments $ 287,653 $ (445,130) Notes receivable (14,416) (23,619) Accounts receivable (127,291) 184,308 i Accounts receivable - affiliated cooperative 36,486 38,600 Inventories (39,612) (95,383) Prepaid expenses 39,342 8,479 Advances - affiliated cooperative - 1,494,000 182,162 1,161,255 (Increase) decrease in current liabilities - 83,706 Accounts payable (968,026) Accounts payable - affiliated cooperative (3,060,701) (901,038) Customer deposits (25,795) (20,465) Accrued expenses (614,504) (67,757) (4,669,026) (905,554) Increase (decrease) in working capital, exclusive of short-term debt, as above $(4,486,864) $ 255,701 The accompanying notes to financial statements are an integral part of these statements.
VERMONT ELECTRIC COOPERATIVE, INC. l NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 1. Sumary of significant accounting policies:
Basis of presentation - Vermont Electric Cooperative, Inc. (the Cooperative) is under the jurisdiction of the Federal Energy Regulatory Comission (FERC), the Rural Electrification Administration (REA) and the Public Service Board of Vermont (YPSB).- It maintains its accounts in accordance with their prescribed Uniform System of Accounts. 4 Revenues and expenses - The Cooperative recognizes revenues for electric service and related purchased power costs in the months that bills are rendered as opposed to recognizing revenues and power costs in the month.s that service is received. This method of recognizing energy revenue and power costs is consi' stent with other rural electric cooperatives. Had revenues and related power costs been recognized in the mont.h that service was rendered the following assets, liabilities, equities and margins would have increased (decreased) as of December 31: 1986 1985 Accounts receivable $1,188,127 $1,222,012 Accounts payable $891,488 $694,146 Patronage capital assignable $296,639 $527,866 Net margins $(231,227) $(102,120) Depreciation - The Cooperative follows the policy of charging to operating expenses annual amounts of depreciation which allocate the cost of the utility plant over its estimated useful lives. The Cooperative employs the straight-line and straight-line composite methods for determining the annual charge for depreciation. j The ranges of the estimated useful lives used are: l l Years Rate l Transmission plant 2.6% Distribution plant 3.0% Buildings and structures 15 - 50 Transportation equipment 4 - 22 General plant 3 - 10 Based on usage l Power-operated equipment Maintenance and repairs are charged to expense as incurred. Amortization - The Cooperative follows the policy of charging to operating ; expenses annual amounts of amortization which allocate the cost of various deferred charges over periods established by the Vermont Public Service Board. The Cooperative employs the straight-line method and periods of from 1 to 10 years for determining the annual charge for amortization. Amortization expense charged to t I - ---_-_-_9
VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 1. Summary of significant accounting policies (continued):
These amounts are operations amounted to $321,442 for 1986 and $154,011 for 1985. charged to various expense accounts including $10,529 in 1986 and 1985 classified as amortization in the statements of operations and margins (loss). Inventories - The major classes of inventories are stated at the lower of cost or market deter.nined by the latest invoice (first-in, first-out) method. Corporate structure and income taxes - The Company is a cooperative, nonprofit and non-stock membership corporation As a organized under provisions of the Electric result, the Cooperative is exempt from fe'deral Cooperative Act of Vermont. l income taxes in accordance with the Internal Revenue Code, Section 501(c)(12).
- 2. Other investments:
The investment account includes the following as of December 31, at cost: 1986 1985 l Investments in associated organizations - $ 726,760 N.R.U.C.F.C. Capital Term Certificates $ 726,760 86,845 98,995 N.R.U.C.F.C. Patronage Capital Certificates 1,000 1,000 Cooperative Finance Corporation membership 812 81 2 Rural Electrical Vermont Association membership 100 100 National Cooperative Services Other investments - 421,300 421,300 Vermont Yankee common stock 140,900 140,900 Velco common stock 235 235 Various electric utilities common stock 4,000 4,000 Other investments 566,435 566,435
=
$1,381,952 $1,394,102 Patronage capital due for distribution in 1986 by National Rural Utilities Cooperativ,e Finance Corporation in the amount of $12,150 was withheld pending resolution of defaulted indebtedness (see Notes 4 and 5).
f l
. . . ~ . . . . . . . . . .
FOR DISCUS $10ft PURPOSE 3 ONLY. VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 3. Deferred credits: i The balance in deferred credits consisted of the following as of December 31: i 1986 1985 I
$[ Special equipment installation Prepaid advertising
$24,656
$23,815 57 l
NYPA refund 506 - i i
$25,162 $23,872
/4. Long-term debt (in default):
The Cooperative was indebted as follows as of December 31: 1 1986 1985 ) Mortgage notes payable, U. S. Department l of Agriculture Rural Electrification ) Administration (R.E.A.) -
- l 2% mortgage notes 5 5,758,156 $ 5,834,720
]
5% mortgage notes 9,671,427 8,687,732 q 15,429,583 14,522,452 ! Mortgage notes payable, National Rural - Utilities Cooperative Finance Corporation (C.F.C.) - 7% mortgage note 199,879 199,879 11.25% mortgage note 198,992 198,992 11.5% mortgage note 298,039 298,039 8.75% mortgage note 1,122,162 1,122,162 14.0% mortgage note 345,430 345,430 2,164,502 2,164,502
$17,594,085 $16,686,954 The Cooperative is in default due to nonpayment of debt service on these notes in the amount of $1,243,500 due in 1986. Because of the default, the balance j has been classified as a current obligation as of December 31, 1986. An affiliated i cooperative (see Note 9) is also in default on debt service in the amount of
$3,709,078 due in 1986. This Cooperative is also in default due to unpaid debt service on a short-term line of credit in the amount of $123,000 (see Note 5). All of the assets of the Cooperative are pledged as security under these notes. ;
Negotiations with the lenders concerning possible debt restructuring are continuing. i
- t. . . .. ~ -
---------------_-a
VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 5. Line of credit (in default):
The Cooperative is also in default due to nonpayment of principal and interest on a line of credit agreement with the National Rural Utilities Cooperative Finance ~ Corporation (C.F.C.). The maturity date under this agreement was October 10, 1986. The Cooperative was indebted under this agreement follows 'as of December 31: - e 1986 _ 1985 Principal $123,000 $544,000 Accrued interest $7,220 $- l
- 6. Deferred charges: (
The balance in deferred charges consisted of the following as of December 31: Amortization Period 1986 1985 f f- Presurvey - 2 year work plan 1984 - 1986 $ , $ 790 l' 1983 - 1988 5,184 8,616 Disc drives 8,792 Major storms - Halifax 1983 - 1986 - Major storms - North 1983 - 1986 - 15,808 Major storm - 1986 1986 - 1989 120,000 Rate design None 6,763 - Walter N. C:.iok supplemental retirement and expenses 1979 - 1989 14,451 23,694 1982 - 1986 - 546 Truck body work 1980 - 1985 - 545 Rate case - 1980 14,672 Membership billing system 1982 - 1987 - 1981 - 1986 - 2,256 Vermont Yankee downtime 1,571 Supreme Court eppeal 1983 - 1986 - Microfilm recording 1986 - 1996 194,952 214,952 None 13,122 21,123 Clearing accounts 73,773 M.M.W.E.C. power None 1,249,710 Nome 35,202 9,077 Windham Hills 22,004 21,953 Heat r, ate experiment None Wone - 4,260 Temporary service panels ; 4,539 Computer search Wone 15,354 None - 1,447 l Rate case - 1985 16,467 Legal expenses - VEC vs. G & T Fone - Vt. Yankee Downtime - 1985/1986 549,696 None 1,768,893 (Note 8) 15,034 15,034 Unamortized debt - BH6 lione
$3,460,669 $1,009,611 s
i FOR OlSCUSSION PURPOSE 3 ONLY. j I VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 6. Deferred charges (continued):
Additional deferred charges are recorded on the books of an affiliated cooperative (see Note 9). The Cooperative originally provided for the recovery of costs associated l with Vermont Yankee Downtime, the 1986 major storm and the microfilm recording l project in its rate increase filed February,1986 (see Note 8). This rate increase ! was rolled back in October,1986 thereby not providing for the recovery of the { above-mentioned costs. In addition, various other costs have been deferred and are not presently provided for in rates nor amortized to current expenses. - In accordance with the Statement on Financial Accounting Standards No. 71, unless recovery of these costs is provided for in future rates, then the costs should be charged to operations in the current period. If these costs were charged to operations in the current period, the net loss would be increased by approximately $3,400,000.
- 7. Pension plan:
The employees of Vermont Electric Cooperative, Inc. participate in the National Rural Electric Cooperative Association (NRECA) Retirement and Security P rogram. This is a contributory pension plan covering substantially all employees subject to certain service requirements. In this master multiple-employer plan, which is available to all member cooperatives of NRECA, the accumulated benefits and plan assets are not determined or allocated separately by individual employer. The Cooperative's policy is to fund normal pension costs as accrued. Past service costs are being amortized and funded over 10 years. Total pension expense ' for the Cooperative was $120,805 and $118,061 for 1986 and 1985, respectively.
- 8. Change in electric rates:
On April 16, 1985, the Cooperative filed, with the VPSB, a request for a permanent 17.5% rate increase on services rendered after June 1,1985. This rate increase was placed in effect temporarily pending determination by the VPSB.
'On February 28, 1986, the Cooperative filed for an additional permanent 14.5% rate increase plus a 5% surcharge designed to recovery additional costs for replacement power purchased during the 1985-1986 period when Vermont Yankee was shut down for maintenance and piping repairs. The increase was temporarily The 5%
placed in surcharged effect af ter April 1,1986, pending determination by the VPSB. was anticipated to recover approximately $1,940,000 deferred replacement power costs over a three-year period. VERMONT ELECTRIC COOPERATIVE, INC. IVR DISCUSSION PURPOSE 3 ONLY, NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985 i
- 8. Change in electric rates (continued):
On September 25, 1986, the Cooperative filed for a 19.5% decrease in rates that would take effect on October 1, 1986. The rate decrease would in effect rollback the February 28, 1986, 14.5% request for an increase and discontinue the 5%
. surcharge by which Vermont Yankee replacement costs were being amortized. On October 22, 1986, the VPSB accepted the proposed 19.5% decrease effective on service rendered af ter October 1,1986.
- 9. Affiliated cooperative:
1 Certain officers and trustees of this Cooperative are also officers and l trustees of Vermont Electric Generation and Transmission Cooperative, Inc. ( the i G & T). Transactions between the Cooperative and the G & T, and related amounts receivable and payable from these transactions, are summarized as follows:
-l 1986 1985
" t 4.
- . Purchases of energy from the G & T $9,272,108 $4,386,252 3
Employee services provided for the G & T $146,763 $203,351 Interest earned on cash advance $84,099 $84,697 Accounts receivable $75,086 $38,600 Accounts payable $4,179,236 $1,118,535 Cash advance receivable $1,812,000 $1,812,000 Summarized financial information for the G & T is as follows: 1986 ~ 1985 ASSETS Utility plant, net $50,860,669 $47,627,693 Other investments 79,173 79,173 Current assets 4,255,555 1,384,084 l; Deferred charges, net 3,455,247 3,781,840
$58,650,644 $52,872,790 LIA8ILITIES AND EQUITIES Equities 5 104,421 5 81,523 Long-term debt 28,721,465 41,820,666 Current liabilities 29,824,758 10,970,601
$58,650,644 $52,872,790
VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 9. Affiliated cooperative (continued):
INCOME 1986 1985 Operating revenues $ 10,684,975 $ 8,094,572 Operating expenses (10,672,228) (8,112,413) IF J Nonoperating income 10,151 69,136 , Net income $ 22,898 $ 51,295 Through its membership in and wholesale power contract with the G & T the Cooperative (VEC) is comitted to purchase of power under a net flow-through, rate which passes all costs, margins and reserves of the G & T, not of revenues billed to others, on to VEC. Under this contract, VEC is comitted to payments of principal and interest on G & T indebtedness. Recovery of all current G & T costs has not {' been provided for in the Cooperative's current electric rates, which has resulted in the $4,179,236 account payable to the G & T as of December 31, 1986. The G & T is in default of long- and short-term debt payments in the aggregate amount of
$9,375,383 (see Notes 4 and 5). In addition, the G & T had accounts payable to contractors and vendors as of December 31, 1986 in the amount of $4,135,237.
- 10. Purchased power sources and comitments:
j The bulk of the energy needs of the Cooperative is provided by other sources through contractual obligation. Such purchased power contracts and commitments supply 100% of the present electric energy needs of the Cooperative's service area. A brief summary of the agreements as of December 31,1986 is as
, follows:
The Cooperative has an agreement with an affiliated Cooperative, Vermont Electric Generation and Transmission Cooperative, Inc. (the G & T see Note 9) to ( purchase power. The cost of the purchased power includes actual costs for electric power and energy, transmission services to the G & T, administrative and general costs, plus operating reserves, net of revenues received from sources other than the Cooperative. These costs are flowed through to the Cooperative on a monthly basis. The agreement expires in 2030. l r T.hrough the Vermont Department of Public Service, the New York Power Authority (NYPA) allocates approximately 4.22% 'of the State's contract to Cooperative consumers. This source is transmitted through the Cooperative's l distribution system directly to the consumer through a lease agreement that the State of Vermont has with each Vermont electric utility. This source is considered firm in that it is a guaranteed supply regardless of unit operation and does not carry a reserve requirement obligation under the New England Power Pool (NEP00L) agreement. 1
FDR DISCUSSION PURPOSE 3 ONLY. VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 10. Purchased power sources and comitments (continued):
Power is purchased from Green Mountain Power Corporation ("GMP") under a
& Federal Energy Regulatory Comission ("FERC") tariff rate schedule for wholesale C power, Rate W. Cost of power includes charges for metering points, demand, energy
- and fuel adjustments as filed. ,
T The Cooperative is required to purchase power from small power producers in accordance with Vermont Public Service Board, Rule #4.100. This accounts for a minor portion of the Cooperative's purchased power. The Cooperative has transmission agreements with Central Vermont Public Service Corporation and Citizens Utilities Company for power to be transmitted over
. their lines. The contracts apply only if power is transmitted.
y The percentage of energy acquired from the above power contracts and comitments for the years ended December 31 is as follows: q 1986 1985 VEG8T , .59.0% 67.1% NYPA (normalized) 31.3 23.9 GMP 8.8 8.4 Small power producers .9 .6 100.0% 100.0%
- 11. Comitments and contingent liabilities - MMWEC/Seabrook:
The Cooperative is a participant in the Massachusetts Municipal Wholesale Electric Company ("MMWEC"), a public corporation of the Commonweal th of Massachusetts. MMWEC is a coordinating and planning agency for the development of the } bulk power supply requirements of its members and project participants. MMWEC is authorized to purchase ownership interests in, and to issue revenue bonds to finance, generating units (Projects). MMWEC 3 ells the capability o' each of its Projects to its members and other utilities (Project Participants) unuer Power Sales Agreements. The Power Sales Agreement for each Project requires each Project Participant to pay its sh6re of MMWEC's costs related to the Project which includes debt service on bonds issued by MMWEC to finance the Project, plus 10% of debt service to be paid into a Reserve and Contingency Fund. In addition, MMWEC has entered into long-term take or pay power purchase contracts for which it has corresponding resale agreements with certain of its members and other utilities. The Project and power purchase contract amounts are payable from each Participant's electric system revenue and are required to be made whether or not the Project is completed, the unit is operating and notwithstanding the suspension or interruption of output of the unit.
. _ . . . . ... )
VERMONT ELECTRIC COOPERATIVE, INC. FOR DISCUSSION PURPOSE 3 ONLY. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985
- 11. Comitments and contingent liabilities - MMWEC/Seabrook (continued):
A substantial portion of lHWEC's construction program is its 11.59% owner- [6 ship interest in the Seabrook project being constructed by New Hampshire Yankee (NH Yankee), currently a division of Public Service Company of Wew Hampshire (PSNH), NH , Yankee upon receipt of regulatory approval, is to be established as an independent entity to construct and operate the Seabrook station on behalf of the joint owners. Seabrook Unit No.1 construction has been completed. Seabrook joint owners have 3 authorized NH Yankee to begin the sale of all salvagable components and equipment from Seabrook Unit No. 2 and to return the construction permit for Unit No. 2 to the Nuclear Regulatory Commission. IEWEC's $65,500,000 investment in Unit No. 2 was j charged as a Loss on Cancelled Units at year-end 1984. ,, A 40-year operating license for Seabrook Unit No. I was issued on October 17 by the U. S. Nuclear Regulatory Comission (NRC), subject to several .
, : 9, conditions.
The license allows project manager NH Yankee to load fuel and conduct a series of pre-operational tests, including checks of the reactor coolant system and tests involving water flow and control rod movement in the reactor core. During p these tests, the reactor will be loaded rith its full complement of fuel, but no fission reaction will take place and no power will be generated. Fuel loading began on October 22 and was completed on October 29. The "zero-power" tests are currently under way. J Before proceeding with low-power testing at Seabrook, during which the plant can be tested at up to 5% power, license ;onditions dictate that the Atomic Safety and Licensing Board (ASLB) of the NRC m.ast first render a decision on l NH Yankee's request for low-power testing authority. Subsequent to the unsuccessful i appeal of the Massachusetts Attorney General of the approval of zero-power testing without submission of proposed emergency response plans, the NRC, as a matter of policy and law, is determining whether such submission should be required prior to approval of low-power testing. The NRC and ASLB decisions are expected in early 1987, at which point the NRC's Office of Nuclear Reactor Regulation will evaluate the ASLB ruling and decide whether to allow Seabrook to proceed with low-power testing. Another license condition requires the resolution of off-site emergency response planning issues prior to NRC authorization to proceed with full-power test-ing and conpercial operation. At present, NH Yankee is pursuing a number of differ-ent options in its effort to resolve emergency planning issues. Among the options are development of a utility-sponsored emergency plan for the six Massachusetts communities involved and a possible change in emergency planning requirements for the project. One such change, for which application approval has been filed with the NRC in December,1986, involves reducing from 10 miles to 1 mile the emergency [ It is not known yet which option will be response zone around the Seabrook plant. chosen or what the extent of impacts will be on the schedule for commercial opera-tion of Unit No.1. Prior to the September 20th rejection of emergency plans for Massachusetts by Gov. Michael S. Dukakis, Unit No. I was scheduled 'or commercial operation in Spring 1987.
-g-
\
FOR DISCUSSION PURPOSE 3 ONLY. VERMONT ELECTRIC COOPERATIVE, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1986 AND 1985 i i
- 11. Commitments and contingent liabilities - MMWEC/Seabrook (continued):
g Other conditions on the operating license include a standard set of condi-
.a " These outline'such factors as compliance with all q lj[4tions placed on all NRC ifcenses.gtechnical specifications for plant operatio E Other events have occurred affecting MWEC and the Seabrook project in general. Such events include legal challenges by certain Project Participants and others of the validity of their Power Sales Agreements with WWEC and unfavorable decisions and orders by regulatory bodies in Maine, Vermont and Massachusetts such as disallowance of recovery of some Seabrook project costs, disengagement from or disposal of respective shares of the Seabrook project and strict limitations on future Seabrook financing. On November 28, 1986, a Vermont Superior Court judge ruled that the Power Sales Agreements between MMWEC and several consumer-owned utilities in Yemont are valid under Vermont law. The ruling rejects contentions by 6 ,r, the Yemont Department of Public Service, Vermont Electric Cooperative and the
+ Village of Stowe Water and Light Department that the contracts are invalid and therefore not binding agreements. The ruling has been appealed. Regarding the financing ifmitations, the Massachusetts Department of Public Utilities (DPU), in April,1985, denied the request of Massachusetts invesur-owned utilities for finan-cing authority to complete Unit No.1 unless they agreed to a,rrangements that would effectively shift the risk of further investment in Seabrook from the ratepayers to their stockholders. In the case of WWEC, since it has no stockholders to whom to shift the risk, long-term financing authority was denied outright by the DPU.
In September,1986, MMWEC replaced $120 million of 364-day Revenue Bond Anticipation Notes (BANS) due October 17,1986 with $110 million of 364-day BANS at an average annual rate of 14.08% to fund WWEC's share of Seabrook construction costs for its Nuclear Project No. 4 and Project No. 6, to fund interest on the BANS and to fund a portion of the 1986 and 1987 interest on Project No. 6 outstanding deb t. The BANS were issued to bridge the financing gap until regulatory approval of a long-term financing plan is received. MMWEC contemplated paying the BANS from the proceeds of long-term Revenue Bonds (Bonds). A. request for long-term financing authority to extinguish the BANS had been filed in February,1986 and on January 14, 1987, the DPU authorized long-term financing up to MMWEC's requested amount of
$164,500,000. MMWEC is currently analyzing the method and timing of the issuance of the newly authorized amount of financing.
Two utilities, Fitchburg Gas & Electric and Vermont Electric G & T Cooperative (0.87% and 0.41% ownership share of the Seabrook project, respectively) have ceased making Seabrook construction payments since May, 1985 and February, 1986, respectively. Advance payments have been made by five other joint owners to cover the shortfall. Vermont Electric Cooperative has a 7.2% interest in of MMWEC's Project No. 6 and has failed to make its monthly payments of $92,508 to MMWEC since February, 1986. I
FOR DISCUS $10N PURPOSE 3 ONLY. VERMONT ELECTRIC COOPERATIVE, INC. , NOTES TO FINANCIAL STATEMENT _S_ DECEMBER 31, 1986 AND 1985 l
, 11. Connitments and contingent liabilities - MMWEC/Seabrook (continued):
In November,1986. Eastern Utilities Associates (EUA), a Massachusetts investor-owned electric utility holding company, purchased the shares of Seabrook . l owned by Fitchburg Gas & Electric (0.87%), Central Maine Power Company (6.04%), c Bangor Hydro-Electric Company (2.17%), Maine Public Service Company (1.46%) and " l Central Vermont Public Service Corporation (1.59%). The purchases make EUA the , third largest Seabrook joint owner. 4 i As of December 31, 1986, the total estimated constructMn cost of M4WEC's l Projects under construction was $937,307,000 of which the amount usociated with the Cooperative's Power Sales Agreements was $37,206,000. Total construction expenditures amounted to $726,016,000 of which $27,708,000 represented the amount attributable to the Cooperative. It is estimated that $957,346,000 principal amount of debt obligations will need to be issued by M4WEC to finance the Projects in its construction program, of which $36,284,000 is attributable to the Cooperative. Debt issued and outstanding included Power Supply System Revenue Bonds totaling
$797,866,000 and 364-day Revenue BANS in the amount of $110,000,000 due on September 9,1987. The amount of each attributable to the Power Sales Agreements of the Cooperative is $27,402,000 and $6,224,000, respectively. On bonds which have been issued, the debt service requirement through the year 2018 is $2,604,247,000 of which $105,644,000 is attributable to the Cooperative.
Under the project Power Sales Agreement with M4WEC for Project No. 6, the Cooperative is required to make capacity and/or debt service payments to M4WEC. The aggregate amount of such required payments on bonds outstanding and significant power purchase contracts through MMWEC as of December 31, 1986 is shown below. These amounts exclude operating and maintenance expenses and the liability associated with the BANS, as well as the 10% of debt service billed for payments into a Reserve and Contingency Fund. Annual Cost For years ended December 31: 1987 $ 2,112,000 1988 3,435,000 1989 3,512,000 1990 3,534,000 1991 3,526,000 Later Fiscal Years 89,525,000 Total $105,644,000
VERMONT ELECTRIC COOPERATIVE, INC. N
- l ADMINISTRATIVE AND GENERAL AND GENERAL PLANT MAINTENANCE FOR THE YEARS ENDED DECEMBER 31, 1986 AND 1985 ji 1986 1985 ADMINISTRATIVE AND GENERAL: $133,369
$124,547 Administrative and 9eneral salaries 59,443 77,312 i0ffice supplies and expenses -
178,554 83,031
'Outside services 95,512 90,337
's Property and liability insurance 72,753 58,556
. Employee benefits - Blue Cross / Blue Shield 93,435 85,750 i s - retirement 12,100
- long-term disability 14,658 l 9,787 9,157
- 11fe insurance 26,228
- savings plan 28,375 9,240 35,943 Regulatory commission 604 72 General advertising 16,490
- 17,802 Association dues 4,695 10,903 Association meetings g ..
12,900 16,383 District and annual meetings
- e. J 37,937 83,331
;7 I Director's fees and expenses 17,589 23,810 v-Co-op 1.ife expenses Information requests 80,256 -
12,960 5,563 Employee meetings 876,736 762,646 GENERAL PLANT MAINTENANCE: 3,405 2,410 Office 9,855 12,089 l Office equipment 1,948 2,101 Warehouse and garage 14,213 17,595
$890,949 $780,241 s
ij . v
- x. ,
[ i i FINANCIAL STATEMENTS AND AUDITORS' REPORT TAUNTON MUNICIPAL LIGHTING PLANT 1 l December 31, 1986 L l i. l i 1 U
/ }
Ni . 1
.. i.$ i 14 C O N T.E N T S g .
I Page l AUDITORS'[ REPORT 3
' FINANCIAL STATEMENTS BALANCE SHEET 4 STATEMENT OF EARNINGS S STATEMENT OF SURPLUS 6 STATEMENT ~OF' CHANGES IN FINANCIAL POSITION 7 NOTES TO FINANCIAL STATEMENTS 8 f SUPPLEMENTAL INFORMATION 1
, AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION 13 UTILITY PLANT- 14 I OPERATING EXPENSES 16 1
F-.
....,-('.i ?a
Y3$t tfStrN Boston. MA 02109 617 723 7900 i . GranfIhornton E Accountants and Management Consultants Ihe U S Member firm of Grant Thornton international Municipal Light Commissian of the City of Taunton Taunton, Massachusetts We have examined the balance sheet of Taunton Municipal Lighting Plant (a department of the City of Taunton) as of December 31, 1986, and the related statements of earnings, surplus and changes in financial position for the year then ended. Our examination was 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 4 circumstances. As discussed in note F, Taunton Municipal Lighting Plant records pension expense based on a formula determined by the Town, whereas generally accepted accounting principles require the use of actuarial methods in determining annual pension expense. The effect on the financial statements of not using actuarial methods has not been determined. In our opinion, except for the effect on the financial statements of the accounting policy discussed in the second paragraph, the financial statements referred to above present fairly the financial position of Taunton Municipal Lighting Plant at December 31, 1986, and the results of its operations and changes in its financial position for the year then ended, in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Boston, Massachusetts March 18, 1987 3
Ol
- N, l ?. :
Taunton Municipal' Lighting Plant
. BALANCE SHEET
' December 31, 1986 ASSETS UTILITY PLANT - AT COST Plant in service .
$60,822,001 Less. accumulated depreciation (note A2)'
32,439,785 Net utility plant in service '$28,382,216 Construction work in progress (note D) 7,579,228 Total utility plant 35,961,444 .) i DEPRECIATION FUND (note A2) Cash and cash equivalents 5,861,488 CURRENT ASSETS Cash (note E) 1,085,781 Customer deposits (note E) Principal fund 268,924 Interest fund . 48,706
-Accounts receivable 4,844,550 Less allowance for doubtful receivables 446,497 4,398,053
' Materials-and supplies inventory (note A4) 1,658,535 Prepaid expenses. . 327,286 Total current assets 7,787,285
$49,610,217 1
o
. The accompanying notes are an integral part of this statement.
) 'l 4
/
4 - 1 LIABILITIES AND SURPLUS SURPLUS Appropriated surplus Loans repayment $12,067,000 Construction repayment 32,434 12,099,434 Unappropriated surplus 13,563,773 Total surplus $25,663,207 LONG-TERM DEBT (note C) Bonds payable 20,669,002 CURRENT LIABILITIES Accounts payable 1,726,810 customer deposits 268,924 Current maturities of long-term debt (note C) 445,000 Accrued liabilities Interest 697,984 Compensated absences 91,760 Payroll 47,530 Total current liabilities .3,278,008 COMMITMENTS AND CONTINGENCIES (note D) 4
$49,610,217
'JD[
APERTURE CARD O dvaMahle On T b Perture' Carat l s'16&30C(d7 -o / m .s
Taunton Municipal Lighting Plant
, STATEMENT OF EARNINGS Year ended December 31, 1986 1
Operating revenues Sales of electricity Commercial and industrial $14,103,670 Residential 9,535,609 Sales for resale (note D) 7,356,975 l Municipal 1,587,504 $32,583,758 Other operating revenues 88,265 Total operating revenues 32,672,023 operating expenses Power production 19,723,145 Transmission and distribution 1,352,440 Customer accounts 827,987 Administrative and general 3,251,420 Depreciation (note A2) 2,344,557 Total operating expenses 27,499,549 Earnings from operations 5,172,474 l
. Other income (expense)
Interest income 273,499 Interest expense on bonds (1,650,190) Other (13,167) Total other income (expense) (1,389,858) Net earnings before provision for payment in lieu of taxes 3,782,616 Provision for payment to the City of Taunton in lieu of taxes (note B) 1,260,000 NET EARNINGS $ 2,522,616 The accompanying notes are an integral part of this statement. 5
- 4
~
s Taunton Municipal Lighting Plant
; STATEMENT OF SURPLUS Year' ended December 31, 1986-Appropriated Surplus Loans Construction Unappropriated Repayment Repayment S,urplus Balance at January 1, 1986 as previously reported $11,657,000 $32,434 $10,345,927 Prior period adjustment (note G) _1,105,230 Balance at January 1, 19'86, as restated 11,657,000 32,434 11,451,157 ADD OR (DEDUCT)
Transfer from unappropriated surplus of bond payments during year 410,000 (410,000) Net earnings after payment to City of.Taunton 2,522,616 Balance at December 31,.1986 $12,067, C4g0 '$'32,434 $13,563,773 2d The-accompanying notes are an integral part of this statement. 6
'l I
Taunton Municipal Lighting Plant STATEMENT OF CHANGES IN FINANCIAL POSITION Year' ended December 31, 1986 Sources of working capital From operations Net earnings before payment in lieu of taxes $ 3,782,616 Charges (credits)'to earnings not-using (providing) working capital Depreciation of utility plant 2,344,557' Amortization of bond premium (3,354) I Funds from operations before payment
~
in. lieu of taxes 6,123,819 Provision for payment to City in lieu of taxes 1,260,000 ; Net working capital provided from operations 4,863,819 i Decrease in depreciation fund 495,311
- 5,359,130 Applications of working capital Current maturities of long-term debt 445,000 Utility plant additions - net 5,174,478 Total applications of working capital 5,619,478
'(DECREASE) IN WORKING CAPITAL (260,348)
Working capital-at January 1, 1986, as restated 4,769,625 Working capital at December 31, 1986 $ 4,509,277 i Changes in components of working capital Increase (decrease) in current assets i ( Cash $(2,681,475) Customer deposits { 36,437 Accounts receivable 1,230,581 Inventory (633,703) Prepaid expenses 117,281 (1,930,879) (Increase) decrease in current liabilities Accounts payable 1,675,486 Customer deposits (35,466) Current maturities of long-term debt (35,000) Accrued liabilities 65,511 1,670,531 (DECREASE) IN WORKING CAPITAL $ (260,348) ' The accompanying notes are an' integral part of this statement. 7 1 _]
a . y a Taunton Municipal' Lighting' Plant-
,. NOTES TO FINANCIAL STATEMENTS December 31', 1986 NOTE A -
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES A summary of Taunton ' Municipal Lighting Plant's ("the Plant") significant accounting policies consistently applied in the preparation of the accompanying financial' statements follows.
- 1. Rates
" Rates charged by the Plant are not subject to the approval-of regulatory agencies.- Pursuant- to state laws, -rates-must; be such that the resulting net earnings before payment to the City, less bond payments and interest income, do not exceed 8% - of the cost of utility plant.
During 1986, the ' Plant 's earnings, less bond payments, amounted to 4.7% of utility plant..
- 2. Depreciation-Pursuant t. o the Department of Public Utilities regulations, depreciation is-calculated as a percentage of depreciabla property at January 1. - Depreciation wasL l i
computed at 4% of the cost of depreciable property for the year. ' Depreciation fund cash is used in accordance with state laws for replacements and additions to the electric . plant-in service.
- 3. Pension Plan Substantially'all employees of the Plant are covered by a .
contributory pension plan administered by the City of Taunton in conformity with State Retirement Board requirements. In addition,- the Plant has a separate l Employees Retirement Trust for the financing of future ' pension payments. At December 31, 1986, the Retirement Trust had net assets'of $5,429,497. The Plant contributed
$1,403,832 for pensions in 1986, which included $350,000 to the separate Retirement Trust.
- 4. Inventory
. Materials and supplies inventory is carried at cost, principally on the average cost method.
e I l oip11 8 i:. , t- _._ .)
4
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c
; i Taunton Municipal Lighting Plant
. NOTES-TO FINANCIAL STATEMENTS - CONTINUED December 31, 1986 NOTE ~A -
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES - Contin 5.. Sick Leave Trust ! The Plant established financing of future a Sickleave sick Leavepayments. Trust ~in 1982 for'the q It is the i Plant's intention - that the Sick Leave Trust be funded ~ to the extent-of point the Plant's sick leave liability,'at which the Sick Leave Trust 1 will make all sick leave
' liability payments required under current Plant policies.
At December 31, 1986, the Sick Leave Trust had net assets of approximately .$1,207,000, which is
.$92,000 date. The less than,the Plant's sick leave liability atapproximatelythat
$92,000 is shown as a liability on the Plant's ..
financial statements. The Plant did not- make any contributions not G). to the Sick Leave Trust during 1986- (see NOTE B - CONTRIBUTION.TO THE CITY OF TAUNTON IN LIEU OF TAXES By vote of the. Municipal Light Commission, the Plant contributed
$1,260,000 contributions- to in 1986 to the City of Taunton in lieu of taxes. All the- City ,are voted by the commission and are voluntary. Municipal- Light NOTE C - LONG-TERM DEBT Long-term debt is comprised of the following:
1 Electric loan', Act of 1969 Interest rate - various rates from 7% to.8.5% dated February 1, 1976. Interest payable February 1 and August 1. Due' serially from . February 1, 1977 to February 1, 2006 $21,050,000 Unamortized premium 64,002 21,114,002 Less current maturities 445,000 i Total long-term debt
$20,669,002 Aggregate maturities of long-term debt are:
1987
]
1988 $ 445,000 1989 480,000 1990 520,000 1991 .565,000 1992-2006 610,000 i Bond premium 18,430,000 l 64,002 i r i 9 $21,114,002 j v_ 1
, >A t-c.
Taunton Municipal Lighting Plant
.1 NOTES TO FINANCIAL STATEMENTS - CONTINUED
.a December 31, 1986
' NOTE D ' COMMITMENTS AND CONTINGENCIES Interconnection Agreement The City of - Taunton, acting by vote.of its Municipal Lighting Plant Commission, has entered into an agreement with Montaup Electric company ("Montaup"), dated i July 31, 1970, as amended, concerning interconnection of electrical operations, purchase and sale of . ki~1owatt capacity, and construction by Taunton of a generating agreement unit of approximately 110 megawatt capability. The is for a period of twelve years following the '
commencement . of operations of Unit No. 9 on ' December 1, 1975. Under.the interconnection agreement, the City agrees to sell and' Montaup agrees to purchase all capacity of Unit 9' not-No.. utilized by the City with a maximum not to exceed 95 megawatts-in the first years. subsequent year of operation and on a declining scale in The Plant credited to sales for resale
$5,173,997 of capacity and ' energy charges billed to Montaup.
. Electric Company in 1986 for its share - of power under the interconnection agreement. This agreement includes a provision-that- Taunton will purchase 1.7123% of the capacity and associated energy from the Canal No. 2 generating unit, 50% of which is owned by Montaup, for the period November 1, 1978 through October 31, 1982. The agreement for capacity and associated. energy purchases from Canal No. 2 has been ' extended through October 31, 1987.
Entitlements The Plant-is a joint owner of the Seabrook Units 1 and 2 nuclear generating station located in Seabrook, New Hampshire. The lead i lparticipant Hampshire in the project is Public Service Company of New i
-(PSNH). The Plan t. 's ownership share is .10034%.
Expenditures'of $350,393 through December 31, 1986, are included in the construction work in progress account. Several j participants in the Seabrook Units have been successful in effectively cancelling Unit 2. The Plant is unable to' predict I whether any action will be ordered by the New Hampshire Public Utilities Commission or what effect such action, or any { financing difficulties of PSNH or any other participant, may ; have on the cost of completion of Unit 1. J i It cannot be estimated when Unit 1 will be put on line due to licensing problems. The Plant's ' latest estimates put its share
', of the cost for the completion and maintenance at approximately
$250,000 for 1987.
1 10 t
a Taunton Municipal Lighting Plant NOTES TO FINANCIAL' STATEMENTS ~- CONTINUED December 31,-1986 NOTE D - COMMITMENTS AND CONTINGENCIES - continued Environmental Matters t
'The ' Plant bas been notified by the United States Environmental Protection Agency .that a release of ' hazardous. . substances has-occurred at the Rose Chemical site in Holden,; Missouri and.there is a threat of further release of hazardous substances at the site. Polychlorinated 'biphenyls (PCB) shipped by the Plant- to '
the site. may have been disposed of improperly,'which creates the potential, for liability under the comprehensive . Response, j; Compensation and Liability Act. The Plant is unable to predict, , with any degree of' certainty, whether it wi11' ultimately be held ' liable for any costs associated with this matter. NOTE E - CASH Municipal Lighting Plant cash is in the custody of. the. City of ( ; Taunton. Treasurer and is commingled with other city funds. The
;, city maintains the cash in interest bearing accounts and credits
'the interest earned each year to the Plant's account.
1 NOTE F - DEPARTURE FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES l Pension expense is not
')
recorded accordance in with generally accepted accounting principles , which require, es. a' minimum, an- l annual provision equal to- the total of normal ~ costs. of . present j employees under-the plan, an amount equivalent to interest on any. 1 unfunded prior service costs, and a provision for vested benefits. l The Plant's pension expense is based on the current year contributions to the City's retirement fund and the Plant's Retirement Trust.- The' contribution to the City's retirement fund I is based on the projected benefits to be paid during the- year, while the contribution to the Retirement Trust is a straight-line , i funding of $350,000 per year for ten years. The Plant contributed
$350,000 to the Retirement Trust in 1986.
The effect- on the accompanying financial statements of this departure from generally accepted accounting principles has not been determined.
, NOTE G - PRIOR PERIOD ADJUSTMENT Retained earnings at the beginning of the year has been increased
.by $1,105,230, reflecting the net assets in the Sick Leave Trust l at December 31, 1985 which were available to fund the sick leave liability of the Plant.
The effect on the 1985 net income of the o Plant would have been an increase of $499,626 (see note AS). l 11 j
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. SUPPLEMENTAL INFORMATION ,
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AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION Taunton: Municipal Lighting Plant i Our examination was.made for the purpose.of forming an l opinion on the. basic financial statements taken.as a whole of $ j
'.Taunton-- Municipal Lighting Plant for the year. ended-December 31, 1986, which'is presented in the. preceding section 1
- of this report.- The supplemental information presented l
hereinafter is presented for purposes of additional analysis ! and'isfnot'a required part of the~ basic financial statements.
-Such information has been subjected to the audit procedures !
. applied in the examination of the basic financial statements and, in our opinion, except for the effect on the schedule of operating expenses of not determining pension expenses by using actuarial methods as explained in the second paragraph of.our i report on page 3 and 'as discussed in note F to the basic i financial statements, is fairly stated in all material' respects in relation to the basic financial statements taken as a whole.
i i Boston, Massachusetts
-March 18, 1987 f 4
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%s Taunton Municipal Lighting plant-t-
UTILITY PL ANT . Yea r ended - December 31, 1986 Balance January 1, 1986
- Jtility plant in ser vice Steam production plant Land and land rights $ 249,424 Structu res ;and improvements 6,899,702 Boiler plant equipment 15,672,092.
Tu rbo-gene rator units 13,979,398 Accessory electric equipment ~ 2,595,814-Miscellaneous power plant equipment 472,917 Total steam production plant 39,869,347 othe r . production plant Fuel holders, producers and accessories 507,963 Generators . 83,407 Accessory elect ric equipment 402,424 Total other production plant 993,794
' Transmission plant . . Land and land rights. 217,807 Clea ring land and rights of _way 28,901-St ructures and' improvements ,129,489 Station equipment 2,355,455 Towers and fixtures 859,446 Poles and~ fixtures 304,604 overhead conductors ~ and devices 309,322 Underground conduit 3,104 j Underg round conductors 6,112 ;
i Total transmission plant 4,214,240 .j Dist ribution plant Land and land rights 151,686 St ructu res and improvements 106,141 ; Station equipment 1,696,553 '
. Poles, towe rs and fixtures 2,152,157 Ove rhead conductors and devices 2,094,197 Underground conduit 1,467,879 Underground conductors and devices 1,574,350 Line t ransfo rmers 1,476,511 Services 320,325 Meters 1,131,413
' Street lighting and signal system 726,307 Sotal dist ribution plant 12,897,519 L
- Forward 57,974,900
~ % .- 14 . I
/
l Accumulated' Net Book Balance' Depreciation Value. December 31, December 31,- December 31, Additions Retirements 1986 1986 1986
$ 249,424 $ 249,424
$ 77,463 6,977/165 $ 4,133,981 2,843,184 68,954 15,741/046 8,230,741 7,510,305 237,779 14,217,177 6,093,418 8,123,759 2,595,814 1,923,071 672,743 4 ,91 7 477)834 162,062_ 315,772 389,113- 40,258,460- 20,543,273 19,715,187 507,963 197,291 310,672
'83,407 '32,341 51,066 402,424 156,745 245,679 993,794 386,377 607,417 217,807 217,607 28,901. 28,901 129,489 40,198 89,291 2,355,455 741,121 1,614,334 859,446. 329,825 529,621 304,604 102,106 202,498 309,322- 93,727 215,595 3,104 998 2,106 6,112 1,609 4,503 4,214,240 1,309,584 2,904,656 752 152,438 152,438 106,141 102,204 3,937 11,808 1,708',361 1,614,806 93,555 119,807 2,271,964 1,938,335 333,629 234,037 2,328,234 1,136,127 1,192,107 81,903 1,549,782 1,206,766 343,016 72,850 1,647,200 1,053,488 593,712 213,623 9fI 1,690,134 871,458 818,676 6,742 APERTURE 327,067 107,911 219,156 l 67,597 1,199,010 812,964 386,046 l 87,809 CARD 814,116 423,274 390,842 1
l 896,928 13,794,447 9,267,333 4,527,114 i Also lvaMahle On 1,286,041 Aperture Card _59,260,941_ 31,506,567 27,754,374
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, Taunton Municipal Lighting Plant UTILITY PLANT - CONTINUED <
I Year ended Decembe r 31, 1986 I . l o l Bala nce ! January 1, d' 1986
- l. Fo rwarded $ 57,9 7 4,9 00 q r'
Gene ral plant Land and land rights 35,691 i l St ructu res and improvements 401,308 [ Of fice f urniture and equipment 188,224 j T ransportation equipment 603,001 Stores equipment 7,116 To ols , shop and garage equipment 19,893 Laborato ry equipment 14,887 Power operated equipment 27,271 Communication equipment 86,859 Miscellaneous equipment { 64,203 V. l l Total general plant 1,448,453 Less contribution in aid of construction (64,986) r To tal utility plant in service 59,358,367 Const ruction work in progress 3,868,385 l . $ 63 ,22 6,75 2 1 h 15
~ ~ ~
g spgat ev +; sty tshrai"gres $NMettfalsty**hMJah*nhhM%= ' 6
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i f 7 4 Accumulated Ne t Book b Balance Deprecia tion Value Decembe r 31, December 31, Ad di tions Re ti reme nt s 1986- -1986 December
'1986 31,{.
y
$1,286,041 $ $ 59 ,2 60 ,941 $ 31,5 0 6,56 7 $2 7,7 54 ,3 74' [
I 35,691- 35,691 lt 46,559 447,867 269,858 178,009- ( 56,377 244,601 79,038 165,563' i 69,001 672,002 485,632 186,370 l' 7,116 1,740 5,376 { 19,893- 13,093 6,800 { 14,887 12,683 2,204 j. 27,271' 19 ,479 7,792 i 5,656 86,859 34,878 51,981 j 69 ,859 16,817 53,042 ,_ 177,593 1,626,046- 933,218 692,828 -. (64,986) (64,986)!i 1,463,634 60,822,001 32,439,785 28,382,216 3,710,843 l' 7,579,228 7,579,228
$5 ,174 ,4 7 7 - $_6 8,4 01,229 $ 3_2 $35,961,444 4
$ 2 4 39,78 5 h.
J I [1 I L TI !) APERTURE j-CARD b Xvailable On
'APerture Card [l c
i, k q 87063bo/o77-03 .
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. Taunton Municipal Lighting Plant OPERATING EXPENSES Year ended December 31, 1986 POWER PRODUCTION EXPENSES Operation Supervision and engineering 352,280 i Fuel $ i Labor and expenses 6,577,692 Maintenance _1,104,871 $ 8,034,843 ;
Supervision and engineering 123,727 Structures Boiler plant 71,518 Electric plant 1,123,578 , Miscellaneous 1,576,702 Purchased power 20,503 2,916,028 ! 8,772,274 { Total power production expenses 19,723,145 { TRANSMISSION Operation AND DISTRIBUTION EXPENSES S cervision and engineering 1 Labor 213,988 Supplies and expenses 129,548
- Meter expenses 19,991 102,216 Custoner installation 13,007 Street ~ lighting and signal systems Miscellaneous 5,827 Maintenance 205,686 690,263 Lines - electric 496,770 Otreet lighting and signal systems 66,718 Meters 6,712 Structures and equipment 9,166 4
Line transformers 12,781 Station equipment 50,840 Miscellaneous 19,190 662,177 Total transmission and distribution expenses 1,352,440 Forward 21,075,585 4 i e 16
,I Taunton Municipal Lighting. Plant
- ,.. OPERATING EXPENSES - CONTINUED Year. ended December 31, 1986 Forwarded $21,075,585
' CUSTOMER ACCOUNTS EXPENSES Operation Meter reading labor'and expenses $ 114,673 ,
Accounting and' collecting expenses 558,005 Unco 11ectible' accounts 42,000 Advertising expense 113,309 Total customer accounts expenses 827,987 ADMINISTRATIV'E AND GENERAL EXPENSES Operation Administrative and general salaries 326,696
-Office supplies and expenses 148,384 Outside services employed 273,325 Property insurance 99,555 Injuries and damages. 22?,023 Employee pensions and benefits 1,924,443 Miscellaneous general expenses 57,543 Transportation expenses 93,133 Regulatory commission expense 14,362 3,165,464 Maintenance General plant 85,956' Total administrative and general. expenses 3,.251,420 DEPRECIATION EXPENSE 2,344,557
$27,499,549 4
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