ML20247E249
| ML20247E249 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley, Davis Besse, Perry, 05000000 |
| Issue date: | 03/28/1989 |
| From: | Martin J TOLEDO EDISON CO. |
| To: | Dinitz I NRC |
| References | |
| NUDOCS 8904030010 | |
| Download: ML20247E249 (25) | |
Text
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TOLEDO L
EDISON -
A Centenor Enurgy Cornpany Docket Nos. 50-440 JAMES P. MARTIN -
50-346 contraer ano Treasurer 50-412
[419] P49 5UO March 28, 1989 Mr. Ira Dinitz Nuclear Regulatory Commission State and Licensee Affairs Office of State Programs Washington, D.C.
20555 RE: Retrospective Preraium Guare.ntee fler Perry Unit No.1, Davis-Besse Unit No. 1, and Beaver Valley Unit No. 2
Dear Mr. Dinitz:
The Toledo Edison Company hereby provides the documents described below and enclosed herewith.as evidence.of.its guarantee of its share of the retro-spective premiums which may be levied against the Perry Unit No. 1. Davis-Besse Unit.No. 1, and Beaver Valley Unit No. 2 reactor licensees, in the amounts of $1,991,000, $4,862,000, and $1,991,000, respectively.
1)
A-copy of The Toledo Edison Company's certified financial statements for the calendar year 1988.
2)
A Certificate of the Company, signed by James P. Martin, Treasurer, stating that the Company will guarantee payment of deferred premiums by maintaining a cash reserve as permitted by 10 CFR Section 140.21(e).
At December 31, 1988, the Company had a cash reserve in the amount of $254.8 million, in cash and short-term instruments.
Total cash and short-term investments at year-end 1988 are shown on page 10 of the Company's certified financial statements.
Sincerely, y O. 4&
Enclosures dh d/3 9904030010 890328
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PDR ADOCK 05000346 A
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PDC k
THE TOLEDO EDISON COMPANY EDISON PLAZA 300 MADISON AVENUE TOLEDO. OHIO 4365?
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1 CERTIFICATE OF THE COMPANY-THE TOLEDO EDISON COMPANY l
. Guarantee of Payment of Deferred Premiums The Toledo Edison Company hereby certifies that it elects to guarantee its share.of payment'of deferred premiums which may.be levied against the Perry Unit No.1, the Davis-Besse Unit No.1 and' Beaver Valley Unit No. 2 by.
- maintaining a cash reserve as permitted by 10 CFR Section 140.21(e).
The Company had cash, invested in short-term instruments, at December 31.
1988, in excess of $8,844,000, its share of the deferred premiums for Perry
' Unit No. 1, Davis-Besse Unit No. 1, and Beaver Valley Unit No. 2.
The deferred premiums.for each unit are $1.991,000, $4,862,000, and $1,991,000, respectively' based on the Company's ownership shares of 19.91% of' Perry Unit No. 1, 48.62% of Davis-Besse, and 19.91% of Beaver Valley Unit No. 2.
'The Company agrees to maintain cash reserves totaling $8,844,000 in cash and-short-term instruments, for the year covered by this filing.
THE TOLEDO EDISON COMPANY By S.
d Ja6 des P. Martin Treasurer
.v IUDITORS' REPORT l To the Sharc Owners of The Toledo Edison Company:
_We have audited the accompanying balance sheet and provide a reasonable basis for our opinion.
statement of cumulative preferred sad, preference in our opinion, the financial statements referred to stock of The Toledo Edison Company (a wholly-.
above present fairly, in all material respects, the finan-owned subsidiary of Centerie,r energy Corporation) as cial position of The Toledo Edison Company as of
'of December 31,1988 and 1987, and the related December 31,1988 and 1987, and the results of its statements of results of ope *ations, retamed eamings
. perations and its cash flows for each of the three o
H
. and cash flows for each of the three years m the period years in the period ended December 31,1988, in ended December 31,1988. These (mancial state-conformity with generally. accepted accounting ments are the responsibility of the Company's man-principles.
agement. Our responsibility is to express an opinion l
on these financial statements based on our audits.
As discussed furth'er in the Summary of Signif'ctnt i
Accounting Policies and Notes 8 and 13, a change was We conducted our audits in accordance with generally made m the methods of accounting for income taxes accepted auditing standards. Those standards require and unbilled revenues, retroactive to January 1,1988.
l that we plan and perform the audit to obtain reasona-
. ble assurance about whether the financial statements As' discussed further in Note 3, the future of Perry Unit -
are free of material misstatement. An audit includes 2 is undecided. Construction has been suspended examining, on a test basis, evidence supporting the since July 1985. Various alternatives are being consid-amounts and disclosures in the financial statements.
ered, including resuming construction, mothballing or.
An audit also includes assessing the accounting princi-canceling the Unit. Management can give no assurance ples used and significant estimates made by manage-when, if ever, Perry Unit 2 will go in-service or.
ment,~as well as evaluating the overall financial whether its full investment and a retum thereon will statement presentation. We believe that our audits ultimately be recovered.
Cleveland, Ohio February 14,1989 Arthur Andersen & Co.
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SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES j
General Fuel Expense
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The Toledo Edison Company (Company) is a wholly.
The cost of fossil fuel is charged to fuel expense based owned subsidiary of Centerior Energy Corporation on inventory usage. The cost of nuclear fuel, including (Centerior Energy). The Company's cpmmon stock interest, is charged to fuel expense based on the rate was acquired by Centerior Energy on April 29,1986, as of consumption. Estimated future nuclear fuel a result of a June 25,1985 affiliation agreement with disposal costs are being recovered through the base The Cleveland Electric illuminating Company rates.
(Cleveland Electric) approved by the share owners of The Company defers the differences between actual both companies on November 26,1985.
fuel costs and estimated fuel costs currently being The Company follows the Uniform System of Accounts recovered from customers through the fuel factor. This prescribed by the Federal Energy Regulatory Commis.
matches fuel expenses with fuel-related revenues.
sion (FERC) and adopted by The Public Utilities Commission of Ohio (PUCO).
Deferred Operating Expenses and Carrying Charges The Company is a member of the Central Area Power The PUCO authorized the Company to defer interest Coordination Group (CAPCO). Other members in-carrying costs, current operating expenses (including clude Cleveland Electric, Duquesne Light Company
. rental payments) and depre iation for Beaver Valley (Duquesne), Ohio Edison Company and Pennsylvania Unit 2 from its commercial in-service date of Novem-Power Company. The members have constructed and ber 17,1987 through December 31,198". The PUCO operate generation and transmission facilities for the determined that Perry Unit 1 was considered "used use of the CAPCO companies, and useful" on May 31,1987 for regulatory purpo,es.
Consequently, the PUCO authorized the Company to Related Party Transactions defer current operating expenses and depreciation f r Perry Unit 1 from June 1,1987 through December Operating expenses include those amounts for trans-22,1987, the date when these costs began to be actions with affiliated companies.m the ordm.ary recovered in rates. The PUCO authorized the deferral course of business operations.
of interest and equity carrying costs, exclusive of those The Company's transactions with Cleveland Electric associated with current operating expenses and de-are primarily for firm power, interchange power, trans.
preciation, for Perry Unit 1 from June 1,1987 through mission line rentals and jointly-owned power plant December 31,1987 and deferral of interest carrying operations and construction. See Notes 1 and 2.
costs from January 1,1988 through December 31, 1988. The amounts deferred for Perry Unit 1 pursuant Centerior Service Company (Service Company), a to the PUCO accounting orders were included in wholly-owned subsidiary of Centerior Energy, was property, plant and equipment through the November formed in May 1986. The Service Company provides 18,1987 commercial-in-service date. Subsequent to management, financial, admmistrative, engineering, le-that date, amounts deferred were recorded as de-gal and other services to the Company and other ferred charges. See Note 7 for a discussion of regula-affiliated companies at cost. The Service Company tory matters relating to the Company's investment in billed the Company $43,000,000, $21,000,000 and these Units. The deferrals will be amortized over the
$6,000,000 in 1988,1987 and 1986, respectively, for life of the related property.
such services.
Revenues Depreciation and Amortization is The cost of property, plant and equipment, except for Customers are billed on a monthly cycle bas. for their the nuclear generating units, is depreciated over their energy consumption, based on rate schedules author-estimated useful lives on a straight-line basis. Annual ized by the PUCO. Prior to 1988, these revenues straight-line depreciation provisions expressed as a were recorded in the accounting period during which percent of average depreciable utility plant in service meters were read, except for the portion of revenues were 3.6% in 1988 and 1987 and 3.5% in 1986. Depre-which was (Merred under the mirror construction-ciation expense for the nuclear units is based on the work-in-progress (CWIP) law discussed below. Utility units-of-production method.
service rendered after monthly meter reading dates through the end of a calendar month (unbilled reve.
Costs associated with four CAPCO nuclear generating nues) became a part of operating revenues the fol-units canceled in 1980 were written off in 1988. The lowing month. Effective January 1,1988, the Company net after-tax write-off was 56,000,000. Under the changed its method of accounting to accrue the esti.
January 1989 PUCO rate order discussed in Note 7, no mated amount of revenues for sales unbilled at the specific revenues associated with these costs were end of each month. See Note 13.
provided. Previously, the costs were being amortized A fuel factor is added to the base rates for electric h UC rat orders.
service. This factor is designed to recover fuel costs from customers. It is changed semiannually after a Effective July 1988, the Company began the external hearing before the PUCO.
funding of future decommissioning costs for its operat-3 w_ - - _ _ _ _ _ _
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itig nuclear units pursuant to a PUCO ord:r. Cash Intercst Charges contributions are to be made to the funds on a straight-line basis over the remaining licensing period Interest on long-term debt reported in the statement of for each unit. Estimated total decommissioning costs Results of Operations does not include interest on for the Company are $59,000,000 in 1986 dollars for nuclear fuel obligations, except for an immaterial amount for fuel in the Davis-Besse reactor. Interest on the Davis-Besse Nuclear Power Station (Davis-Besse) and $28,000,000 each for Perry Unit 1 and Beaver nuclear fuel obligations for fuel under construction is Valley Unit 2 in 1987 dolltrs. The current level of capitalized. See Note 5.
accruals being funded and recovered in rates from Property, Plant and Equipment customers over the remaining licensing periods of the Units is approximately $4,000,000 annually. The pre-Property, plant and equipment are statnd at original sent funding requirements for Beaver Valley Unit 2 cost less any amounts ordered to be written off. In-also satisfy a similar commitment made as part of the ciuded in the cost of construction are items such as sale and leaseback transaction discussed in Note 2.
related payroll taxes, pensions, fringe benefits, man-agement and general overheads and AFUDC.
Deferred Cain and Loss from Sales of Utility Plant AFUDC represents the estimated composite debt and equity cost of funds used to finance construction. This The Company is amortizing the applicable deferred noncash allowance is credited to income, except for gain and loss associated with the sales of utility plant in AFUDC for Perry Unit 2. Since July 1985, Perry Unit 2 1987 over the terms of leases under sale and lea.se.
AFUDC had been credited to a deferred income ac-back agreements. See Note 2. The amortization and count. Effective January 1,1988, the Company dis-lease expense amounts are recorded as operation continued the practice of accruing AFUDC on Perry expense.
Unit 2. See Note 3. The AFUDC rates, net of the income tax effect; were 10.97% in 1987 and 10.71% in Federal Income Taxes 1986. The gross AFUDC rate used in 1988 was 11.62%
(10.03% on a net-of-tax basis).
The 1988 financial statements reflect the liability method of accounting for income taxes as a result of Maintenance and repairs are charged to expense as adopting the new standard for accounting for income incurred. Certain maintenance and repair expenses for taxes. Prior to 1988, income taxes were accounted for Perry Unit 1 and Beaver Valley Unit 2 have been by the deferred method. Under the deferred method, deferred pursuant to the PUCO accounting orders deferred taxes and deferred tax credits were not discussed above. The cost of replacing plant and adjusted for subsequent changes in federal tax rates.
equipment is charged to the utility plant accounts. The Also, under the deferred method, the Company did cost of property retired plus removal costs, after de-not record deferred taxes on the temporary differences ducting any salvage value, is charged to the accumu.
between book and tax income where the PUCO used lated provision for depreciation.
the realized tax benefits to reduce allowable costs for ratemaking purposes. T_his practice was premised on Mirror Construction Work in Progress regulatory treatment which permits recovery of such The Ohio nGrror CWIP law requires that revenues deferred income taxes in future revenues.
authodzed by the PUCO and collected as a result of including CWlP in rate base be refunded in a subse-A major difference under the liability method is that quent period after the project is included in rate deferred tax liabilities are adjusted for subsequent tax base. Such revenues are deferred and recorded as rate changes. Also, the Company must now record refund obligations to customers. AFUDC continues to deferred taxes for all temporary differences between be capitalized during the construction period. The book and tax income. Initial application of the ac-deferred revenues are then recognized as operating counting standard in 1988 did not impact results of revenues in the statement of Results of Operations operations as the additional deferred taxes were offset over the period of the refund. Amounts collected by a regulatory asset on the balance sheet. Addition-through December 31,1988 under the mirror CWIP ally, allowance for funds used during construction law are being refunded pursuant to the January 1989
( AFUDC) and carrying charges that were previously PUCO rate order discussed in Note 7.
accounted for in the statement of Results of Opera-tions on a net-of tax or an after tax basis are now Reclassifications and Restatements stated on a pre-tax basis. Consequently, the 1988 Certain reclassifications have been made to prior years' federal income tax provision is equally higher.
f nancial statements to make them comparable with 1988 financial statements and consistent with terms of For certain property, the Compa sy received invest-the January 1989 PUCO rate order discussed in ment tax credits which have been accounted for as Note 7.
deferred credits. Prior to 1988, tax credits utilized were reflected as reductions to tax expense over the life of in 1988, a new accounting standard which requires the the related property. Under the new method of ac-presentation of a statement of cash flows in the finan-counting, the amortization of investment tax credits is cial statements was adopted. Previously, a statement j
reported as a reduction of depreciation expense. See of Source of Funds invested in Plant, Facilities and i
Note 8 for federal income tax details.
Special Deposits was presen'ed.
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-MANAGEMENT'S FINANCfAL ANALYSIS f
Relufts of Operations As discussed in Note 7, $277,000,000 of nuclear costs
).
1988 vs.1987 were written off in 1988 as a consequence of the l
January 1989 PUCO rate order.
Factors contributing to the 3.8% increase in 1988 operating revenues are as follows:
The total amount of AFUDC and carrying charges increase decreased in 1988. The change in status from con-Change in Operating Revenues (Decrease) struction to operation of Perry Unit 1 and Beaver i
i Valley Unit 2 in 1987 resulted in the cessation of Electric Revenues:
AFUDC. Instead, an accrual of post-in-service carrying Sales Volume.............
$ 27,000,000 Sales of Capacity to Cleveland charges pursuant to PUCO orders began on such investments not included in rate base. However, l
Electric.............
32,000,000 AFUDC and carrying charges that were previously Deferred CWIP Revenues......
7,000,000 accounted for on a net-of-tax or an after-tax basis were Fuel Cost Recovery Revenues...
(41,000,000) stated on a pre-tax basis in 1988.
Base Rates and Miscc!!aneous.....
(2,000,000)
Tota l.................... $ 23,000,000 Part of the proceeds from the 1987 sale and leaseback transactions was used to redeem outstanding high-Total kilowatt-hour sales increased 11.8% in 1988.
c st securities which reduced interest expense and Sales growth of 5.3% in the industrial sector reflected preferred dividends in 1988.
broad-based strength in the economy, particularly Results for 1988 at:so included a one-time net after-tax among automobile manufacturers. Residential sales increase of $6,000,000 related to a change in account-increased 4.6% in 1988 largely because of a substan-ing for unbilled revenues. See Note 13.
tially warmer summer. The hot summer also contrib-uted to a 3.1% gain in commercial sales as did new 1987 vs.1986 retail outlets. In 1988, the Company sold to Cleveland Factors contributing to the 5.7% increase in 1987 Electric a portion of its leased capacity entitlement in operating revenues are as follows:
Bruce Mansfield Plant (Mansfield Plant) and Beaver Valley Unit 2 for three and two-month periods, respectively. The increase in revenues attributable to Change in Operating Revenues
( ecrease) deferred CWIP revenues resulted from a reduction in Electric Revenues:
the level on revenues deferred under the mirror Base Rates and Miscellaneous....
$ 29,000,000 CWIP law. Lower fuel cost recovery revenues resulted Sales Volume..........
15,000,000 principally from the greater use of lower cost nuclear Deferred CWIP Revenues 2,000,000 fuel and the PUCO-ordered refund of certain re.
Fuel Cost Recovery Revenues.
_(13,000,000)
I placement fuel and purchased power costs collected Total........
........ $ 33,000,000 from customers during a 1985-1986 Davis Besse out-age. See Note 4. Rate incre tses ;;gnted to the Com-The rate increase granted to the Company in May 1987 pany in 1987 were offset by the impact of special accounted for most of the increase in base rates and i
contracts with large industrial customers.
miscellaneous revenues in 1987. Total kilowatt-hour s ncreased 3M in M87. Indusdal sales growth s
Operating expenses increased 22.1% in 1988. Lower fuel and purchased power expense in 1988 resulted 3.1% was broad-based, particularly,n the metal i
mainly from a decrease in deferred fuel expense.
fabn,cating sector. Residential and commercial sales Fuel and purchased power expense also was reduced increased 1.9% and 2.5%, respectively. The sales in-for the amortization of reserves previously established creases resulted mainly from the warmer summer but to match the PUCO-ordered refund discussed above.
were p rtially offset by the moderate temperatures i
The increase in other operation and maintenance during the wmter. The increase in revenues attribut-expense and depreciation expense mainly resulted aMe to MM NP mvenues resulted from a reduc-from a full year of operation of Perry Unit 1 and Beaver tion m the level of revenues deferred under the mirror Valley Unit 2 and a full year of lease expense for CWIP law. Lower fuel cost recovery revenues in 1987 j
Beaver Valley Unit 2 and Mansfield Plant. The increase resulted from increased use of our nuclear units.
in deferred operating expenses in 1988 was largely Operating expenses in 1987 increased by 3.3%. Fuel attributable to the deferral of Beaver Valley Unit 2 and purchased power expense decreased because al operating expenses for most of the year because they the return to service of Davis-Besse late in 1986 aer were not being recovered in rates. In 1987, Perry Unit an 18-month outage and the start-up of Perry Und 1 1 and Beaver Valley Unit 2 operating expenses were and Beaver Valley Unit 2 in 1987. Nuclear units deferred for only about seven and two months, provided 35% of electrici'.y generated in 1987 com-respectively, pared to a negligible amount in 1986. The reduction in 5
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. fuel and purchrsed power expense, low:r fedir:1 av rage el:ctric rates, including decreases in the full income taxes and savings from cost reduction pro-cost recovery factor, decreased; however, the costs of grams were offset by Mansfield Plant lease expense labor, materials and services used in operations were and higher operation expenses and depreciation ex-.
. higher. Changes in fuel costs do not affect our results pense.for Davis Besse.
of operations since those costs are reflected in the fuel c st recovery factor included in customer bills.
AFUDC and carrying charges were slightly higher in 1987 because of an increase in the amount of invest-Inflation will continue to have a negative impact on ment not in rate base. Interest charges were higher our results of operations. The January 1989 rate order -
because of an increase in outstanding long-term debt.
is primarily designed to recover deferred operating and capital costs of our new nuclear investments. The rder will not afford protection against future infla,
Effect ofInflation tion. Our cost-reduction efforts to date have been
' Inflation adversely affected results of operations over substantial and will continue to be an area of increas-the last three years. In the period 1986-1988, our ing importance as discussed in Note 7.
RETAINED EARNINGS rse rotsoo coisos couersy For the years ended December 31, 1988 1987 1986 (thousands of dollars)
Balance at Beginning of Year
$ 297,221
$ 305,130
$ -276,588 Additions Net income (loss )...............
(115,452) 165,171.
176,917 Deductions Dividends declared:
Common stock..............
(61,711)
(111,500)
(102,918)
Preferred stock..........
(26,269)
(40,212)
(45,457)
Preferred stock redemption expenses.........................
(4,175)
(21,368)
Net increase (Decrease)
(207,607)
(7,909) 28,542 Balance at End of Year...............
$ 89,614
$ 297,221
$ 305,130 The accompanying notes and summary of significant accounting policies are an integral part of this statement.
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RESULTS OF OPERATIONS.
THE TOLEDO EDISON COMPANY i
For the years ended December 31, 1988 1987 1986
- (thousands of dollars)
. Operating Revenues l-Electri c..................................................
$ 627,997
$605,037
$572,482 Operating Expenses Fuel and purchased power................................
116,161 140,176 158,763 Other operation and maintenance.... <.
358,823
.223,307 167,319 Depreciation and amortization............................
75,093 65,503 37,832 Taxes, other than federal income taxes.....................
80,138 59,658 51,398 Perry Unit 1 and Beaver Valley Unit 2 deferred operating L
ex pe n s e s...............................................
(83,813)
(39,797)-
Federal income taxes......................................
29,242 22,747 41,150 575,644 471,594 456,462 Operatin g income...........................................
52,353 133,443 116,020 Nonoperating income (Loss) t Allowance for equity funds used during construction..........
5,452 122,138 129,578 Other income and deductions, net..........................
30,233 (16,904)
(1,627)
' Write-off of nuclear costs.................................
-(276,955)
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Carrying charges on nuclear plants and other.................
129,632 14,989
. Federal income taxes - credit............................
86,244 42,726
-52,029 (25,394) 162,949 179,980 income Before interest Charges.............................
26,959 296,392 296,000 Interest Charges Lon g-term d ebt..........................................
150,658 182,196 170,722 S h ort. term de bt...........................................
(135) 3,297-3,675 Allowance for borrowed funds used during construction (1,833)
(54,272)
(55,314) 148,690 13i,221 119,083
~ Income (Loss) Before Cumulative Effect of an Accounting Change...................................................
(121,731) 165,171 176,917 Cumulative Effect on Prior Years (to December 31,1987) of an -
Accounting Change for Unbilled Revenues (Net of income Taxes of 54,177,000 ).....................................
6,279 Net income ( Loss).....................
(115,452) 165,171 176,917 Preferred Dividend Requirements............................
26,983 42,749 45,243' Earnings (Loss) Available for Common Stock.................
- $(142,435)
$122,422
$131,674 The accompanying notes and summary of significant accounting policies are an integral part of this statement.
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iAANAGEMENT!S FINANCIAL ANALYSIS.
Capital Resources and liquidity land Electric's rate orders which provide for specific.
levels f rate increases and earnings limitations for-We carry on a continuous program of constructing new facilities and modifying existing facilities to meet an; Centerior Energy through 1991. The availability of teipated demand for electric service and to com' ply capital to meet our external fint acing needs depends-uPon such factors as financial market conditions, with governmental regulations. Cash requirements -
eamings, our ability to pay dividends, the size of our for the construction program and mandatory retire-c nstrucdon program and our cree raungs. We ew ment of securities over the three-year period 1986-pect to be able to raise cash as needed.
- 1988 totaled approximately $656,000,000.
In 1986 and 1987, the capital required to finance our Current securities ratings for the Company are as construction program and to' retire securities was ob-follows:
Stan
- o tained primarily from external sources. Also,in 1987,
&p e
s we sold and leased back certam interests in three,
Corporation - Service generating units as discussed in Note 2. A substantial portion'of the net proceeds from the sale and lease.
First mortgage bonds...
B B B- --
Baa3:
Unsecured notes........
BB+
Bal back transactions was used in 1987 and 1988 to pay Preferred stock.........
BB+
Ba2 portions of short term debt incurred to finance the construction program, to redeem outstanding securi '
A write-off of the Company's investment in Perry Unit ties, to pay our construction program costs'and for 2 (as discussed in Note 3 " Construction and Contin-general corporate purposes. In 1988, the Company gencies - Perry Unit 2"), depending upon the mag-issued $50,700,000, of first mortgage bonds as collat-nitude and timing of such a write-off, could reduce eral to secure its obligations in connection with the retained earnings sufficiently to' impair the Company's sale of tax-exempt bonds by public authorities to ass. t ability to declare dividends. Such a write-off could is
. in financing certain pollution control facilities. At De-result in a default on the capitalization financial cove-cember 31,1988, the Company had $255,000,000 in nants discussed in the last paragraph of Note 2.
- cash and temporary cash mvestments available for future cash needs.
Cleveland ' Electric and Centerior Energy are renegoti.
Estimated requirements for the Company's cash con-ating certain financial covenants contained in an agreement under which the two companies are facing struction expenditures for. 1989-1991 are
$270,000,000. In addition, $257,000,000 will be re.
potential non-compliance after 1989. See the last quired for the redemption of debt and preferred stock paragraph of Note 2 for a discussion of the potential during this period. Nearly all of the Company's re, impact on the Company.
quirements in 1989 will be met with intemal cash The Tax Reform Act of 1986 provided'for a 40%
generation and current cash resources. We expect t average income tax rate in 1987 and a 34% income tax finance extemally about 50% of our 1990 and 1991-rate in 1988 and thereafter, the repeal of the invest-requirements. See Note 11 for mformation concerning ment tax credit, scheduled reductions in investment limitations on the,ssuance of preferred and prefer-i tax credit carryforwards, less favorable depreciation ence stock and debt. Our available short-term bor-rates, a new altemative minimum tax and other items.
rowing arrangements are explamed in Note 12.
The changes resulted in increased tax payments and a Our ability to meet our financing needs depends upon reduction in cash flow during 1987 principally be-our internal generation of funds and the availability of cause the alternative minimum tax reduced the capital from the financial markets. The Company was amount of investment tax credits allowed as an offset granted a rate increase in 1989 and in the next two to federal income tax payable. These changes had no h.
years pursuant to the January 1989 PUCO rate order, significant cash flow impact in 1988 because the See Note 7 for discussion of the Company's and Cleve-Company had a net operating loss for tax purposes.
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CASH' ELOWS' THE TOLEDO EDISON COMPANY '
For the years ended December 31,
_ 1988 1987 1986
-(thousands of dollars)
Cash Flows from Operating Activities (1)'
N et In come ( Loss )............................................
$(115,452) $ 165,171
$ 176,917 Adjustments to Reconcile Net income' (Loss) to Cash from Operating Activities:
Depreciation and amortization.................................
75,093 65,503-37,832 Deferred federal income taxes..............
(62,598)
(150,717) 22,424 Investment tax credits, net.....................................
. 6,920
- 79,332-(21,558)
Write-off of nuclear costs.....................................
276,955
. 20,185 21,939 Deferred and unbilled revenues...............................
-14,642 Deferred fuel................................................
(20,693) 15,848 (3,373)
Interest capitalized as carrying charges........................
(129,632)
(14,989)
Leased nuclear fuel amortization...............................
32,285 22,603
.117.
Deferred nuclear operating expenses..........................
(83,813)
(39,797)
Allowance for equity funds used during construction.............
(5,452)
(122,138). '(129,578)'
~
Amortization of reserve for Davis-Besse refund obligations to c us t o mers.................................................
(20,777)
Other non-cash items........................................
9,358
- 44,190 17,780 Cumulative effect of an accounting change.......
' (6,279)
Changes in working capital affecting operations.....
45,614 29,284
'44,245 Total Adjustments...................................
131,623 (50,696)
(10,172)
Net Cash from Operating Activities......................
16,171 114,475 166,745 Cash Flows from Financing Activities (2)
Pank loans, commercial paper and other short-term debt............
(68,000) 46,700 (7,700)
Debt issues:
50,700 41,000 100,000 First mortgage bonds...........................................
i-250,000 100,000 U nsecured de bt............................................
- Preferred stock issues...........................................
50,000 30,000 1,333
. Common stock issues.......................
- Equity contributions from parent.................................
30,000
~ 91,059 Maturities, redemptions and sinking funds...........................
(222,166)'
(550,075)
(54[718)
Nuclear fuel and trust obligations.................................
(32,285)
(20,954) 117)
(89,054)-
(155,515)
-(148,382)
Dividends paid Premiums, discounts and expenses..............................
1,489-(2,731)
(3,579)
Net Cash from Financing Activities......................
(359,316)
(311,575) 107,896 Cash Flows from investing Activities (2)
Cash applied to construction....................................
(113,174)
(177,019)
(268,569)
Interest capitalized as allowance for borrowed funds used during construction................................................
(1,833)
(54,272)
(55,314)
Cash deposited in decommissioning trusts.........................
(1,906)
Other cash received ( applied )....................................
5,394 (22,926)
(16,049) 1,075,988 Cash received from sale and leaseback transactions, net.............
Cash withdrawn from (deposited in) sale and leaseback trust..
109,976 (109,976)
- Cash withdrawn from pollution control escrow account.............
459 5,448 25,403 Net Cash from Investing Activities...
(1,084) 717,243 (314,529)
Net Change in Cash and Temporary Cash investments...
(344,229) 520,143 (39,888)
Cash and Temporary Cash investments at 8eginning of Year............
599,117 78,974-118,862 Cash and Temporary Cash investments at End of Year........
$ 254,888 5 599,117
$ 78,974 (1) Interest paid was $150,000,000, $183,000,000 and $170,000,000 in 1988,1987 and 1986, respectively.
Income taxes paid were $24,980,000 in 1987. No income taxes were paid in 1988 and 1986.
(2) Increases in Nuclear Fuel and Nuclear Fuel Lease and Trust Obligations resulting from the non. cash capitalizations under nuclear fuel agreements discussed in Note 5 are excluded from this statement.
The accompanying notes and summary of significant accounting policies are an integral part of this statement.
9
= = _
,1.,
BA. LANCE SHEET-December 31, 1988 1987-b (thousands of dollars)
> Assets
- Property, Plant and Equipment Utility plant in service......................................
$2,438,927
$2,600,511 Less: accumulated depreciation and amortization............
487,546 419,149 1,951,381
-2,181,362 Construction work in progress...............................
115,978 67,704 Perry Un it 2................................................
343,126 306,570 2,410,485' 2,555,636 Nuclear fuel, net of amortization.............................
260,362 265,046 Other property, less accumulated depreciation................
2,152 2,023 2,672,999 2,822,705 Special Deposits Pollution control construction funds,' unexpended.............
424 883 Deposits in trust, sale and leaseback preceeds.................
109,976
' Decommissioning trusts ".................................
1,906 2,330 110,859 Current Assets Cash and temporary cash investments........................
254,888 599,117 i mounts due from customers and others, net.................
49,394 62,866 A
Amounts due from affiliates.................................
31,050 15,840 Unbilled reve nues..........................................
13,415 Materials and supplies, at average cost........................
24,424 21,272.
Fossil fuel inventory, at average cost.........
19,189 23,245 Taxes applicable to succeeding years........................
53,752 61,614 Other 1,947 14,699 448,059 798,653 Deferred Charges Unamortized costs of terminated nuclear projects.............
17,223 Accumulated deferred federal income taxes.................
246,789 Amounts due from customers for future federal income taxes...
519,238 l
Unamortized loss, Beaver Valley Unit 2 sale................
127,367 134,475 Unamortizal loss on reacquired debt........................
30,809 19,784 Carrying charges and nuclear operating expenses...........
259,978 40,072 Other...............................................
73,892 87,027 1,011,284 545,370' f
l Total A s sets...................................
$4,134,672
$4,277,587 The accompanying notes and summary of significant accounting policies are an integral part of this statement.
10 lLm___ _
THE TOLEDO EDISON COMPANY December 31, 1988 1987 Capitalization and Wabilities (thousands of dollars)
Capitalization Common shares, $5 par value: 60,000,000 authorized; 39,134,000 outstanding in 1988 and 1987..................
$ 195,687
$ 195,687 Premium on capital stock....................................
481,082 482,770 Other paid.in capital.....................................
121,059 121,059*
. Retai n ed ea min gs..........................................
89,614 297,221 Common stock equity..................................
887,442 1,096,737 Preferred stock With mandatory redemption provisions....................
71,155 73,340 Without mandatory redemption provisions.................
210,000 240,000 Lo n g-te rm d eb t...........................................
1,291,444 1,400,292 2,460,041 2,810,369 Other Noncurrent Uabilities Refund obligations to customers..........................
47,719 67,177
- Other, primarily nuclear fuel lease and trust obligations........
269,345 260,429 317,064 327,606 Current Uabilities Current portion of long. term debt and preferred stock........
26,932 36,932 Current portion of lease obligations.......................
38,499 30,791 Accou n ts paya ble..........................................
99,442 79,970 Accounts and notes payable to affiliates.
16,059 84,269 Accru ed taxes..........................................
102,811 93,264 Accrued interest.......................
39,807 43,675 Dividends declared.....
6,423 7,497 Accrued payroll and vacations 7,728 8,116 Current portion of refund obligations to customers............
34,700 Other......................................
11,156 17,000 383,557 401,514 Deferred Credits
\\
Unamortized investment tax credits..
105,551 101,566 Accumulated deferred federal income taxes.......
484,913 237,103 Reserve for Perry Unit 2 allowance for funds used during construction..........
88,295 71,697 Unamortized gain, Bruce Mansfield Plant sale.....
255,973 275,618 Other......
39,278 52,114 974,010 738,098 Total Capitalization and Liabilities.
$4,134,672
$4,277,587 11
)
L STATEMENT OF CUMULATIVE THE TOLEDO EDISON COMPANY PP'EFERRED AND PREFERENCE STOCK 1988 Shares Current December 31, Outstanding Call Price 1988 1987 (thousands of dollars)
$100 par value preferred, 3,000,000 shares authorized; $25 par value preferred, 12,000,000 shares authorized; and $25 par value preference, 5,000,000 shares authorized - none outstanding Subject to mandatory redemption (less current maturities):
$ 100 par $ 11.00...................
44,800
$103.50
$ 4,480
$ 5,000 9.3 75.................
166,750 104.94 16,675 18,340 25 par
- 2. 81...................
2,000,000 27.50 50,000 50,000
$ 71,155
$ 73,340 Not subject to mandatory redemption:
100 par 4.25...
160,000 104.625
$ 16,000
$ 16,000 4.56..................
50,000 101.00 5,000 5,000 4.25..................
100,000 102.00 10,000 10,000
- 8. 3 2...................
100,000-102.46 10,000 10,000
- 7. 76...................
150,000 102.437 15,000 15,000 7.80.
150,000 102.60 15,000 15,000 1 0. 00..................
190,000 101.00 19,000 19,000 25 par 2.21......
1,000,000 25.90 25,000 25,000
- 2. 3 6 5..................
1,400,000 28.45 35,000 35,000 30,000 3.47...................
Series A Adjustable.......
1,200,000 30,000 30,000 Series B Adjustable.....,.
1,200,000 30,000 30,000
$210,000
$240,000 The accompanying notes and summary of significant accounting policies are an integral part of this statement.
l 1
12
NOTES TO THE FINANCIAL STATEMENTS (1) Property Owned with Other Utilities and Investors The Company owns, as a tenant in common with other utilities and those investors who are owner-participants in various sale and leaseback transactions (lessors), certain generating units as listed below. Each owner owns an undivided share in the entire unit. Each owner has the right to a percentage of the generating capabi!ity of each unit equal to its ownership share. Each utility owner is obligated to pay for only its respective share of the construction and operating costs. Each lessee is obligated to pay for the related lessor's share of those costs. The Company's share of the operating expense of these generating units is included in the statement of Results of Operations. Property, plant and equipment at December 31,1988 includes the following facilities owned by the Company as a tenant in common with other utilities and lessors:
Owner-In-Owner-ship Plant Construction Service ship Mega-Power in Work Accumulated Generating Unit Date Share watts Source Service in Progress Depreciation (thousands of dollars)
In Service:
Davis-Besse.
" 77 48.62 %
421 Nuclear $ 519,723
$ 86,438
$ 89,277 Perry Unit 1 & Common Facilities 1987 19.91 237 Nuclear 911,392 1,370 43,098 Beaver Valley Unit 2 & Common Facilities (Note 2) 1987 1.65 14 Nuclear 179,457 433 8,081 Construction Suspended (Note 3):
Perry Unit 2 Uncertain 19.91 240 Nuclear 343,126
$1,610,572
$431,367
$140,456 (2) Utility Plant Sale and Leaseback Transactions As a result of sale and leaseback transactions com-For pleted in 1987, the Company and Cleveland Electric For the Cleveland are co-lessees of 18.26% (152 megawatts) of Beaver Year Company Electric Valley Unit 2 and 6.5% (51 megawatts), 45.9% (358 (thousands of dollars) megawatts) and 44.38% (355 megawatts) of Units 1, 1989......
$ 106,000 63,000 2 and 3, respectively, of the coal-fired Bruce Mansfield 1990...
106,000 63,000 Plant (Mansfield Plant) for terms of about 29% years.
1991 107,000 63,000 The Company sold a substantial portion of its undi-1992.....
110,000 63,000 vided tenant-in-common interest in Beaver Valley Unit 1993.
111,000 63,000 2 and essentially all of its interests in Units 2 and 3 of Later Years.
2,813,000 1,706,000 the Mansfield Plant. The Company's proceeds from Total Future Minimum the transactions totaled $1,113,100,000. Cleveland Lease Paymeo
$3,353,000
$2,021,000 i
Electric also sold essentially all of its interests in the three units of the Mansfield Plant.
The amounts recorded by the Company as rental ex-As co-lessee with Cleveland Electric, the Company is pense for the Mansfield Plant leases were $43,095,000 i
also obligated for Cleveland Electric's lease payments.
and $12,600,000 in 1988 and 1987, respectively.
If Cleveland Electric is unable to make its payments Rental expenses for the Beaver Valley Unit 2 lease of under the Mansfield Plant leases, the Company would
$58,254,000 and $18,300,000 in 1988 and 1987, re-be obligated to make such payments. No payments spectively, were recorded in a deferred charge account j
were made on behalf of Cleveland Electric in 1988.
by the Company pursuant to a PUCO accounting
)
Future minimum lease payments required under these rder. Such amounts will be amortized to expense
{
ver the life of the lease beginning in 1989. Additional j
operating leases at December 31,1988 are summa-rized as follows:
rental expense for the Beaver Valley Unit 2 lease
)
charged to expense in 1988 was $13,556,000. The j
additional rent expense charged to expense in 1987 l
was not significant.
l f
l 1
1 13
)
i J
The Company is selling 150 megawatts of its Beaver could lead to the acceleration of payment of obliga.
Valley Unit 2 leased capacity entitlement to Cleveland tions under those agreements.
Electric commencing in November 1988. Revenues recorded for this transaction were $18,533,000 in (3) Construction and Contingencies 1988. We anticipate that this sale will continue for at Construction Program least ten years. The future minimum lease payments associated with Beaver Valley Unit 2 aggregate The estimated cost of the Company's construction
$2,068,000,000.
program for the 1989-1991 period'is $280,000,000, including AFUDC and excluding nuclear fuel. Should The Company and Cleveland Electric are responsible more stringent environmental regulations be adopted, under the leases for paying all taxes, insurance premi-particularly in the area of acid rain pollution control, ums, operation and maintenance costs and all other future construction program costs would increase similar costs for all their interests in the Units sold and substantially. However, such increases would not oc-leased back. The Company and Cleveland Electric cur until after 1991.
may incur additional costs in connection with capital improvements to the Units. The Company and Cleve-Perry Unit 2 land Electric have options to buy the interests back at Perry Unit 2, including its share of the common facili-the end of the leases for the fair market value at that ties, is about 58% complete. Construction of Perry time or to renew the leases. Additional lease provi-Unit 2 was suspended in 1985 by the CAPCO compa-sions provide other purchase options along w,th conds.
nies pending future consideration of several altema-i tions for mandatory termination of the leases (and tives which include resumption of full construction possible repurchase of the leasehold interests) for with a revised estimated cost and completion date, obsolescence and events of default, m, cluding those mothballing or cancellation. None of these attematives described in the next paragraph.
may be implemented without the approval of each of the CAPCO companies.
An agreement relating to a letter of credit issued in connection with the sale and leaseback of Beaver if Perry Unit 2 were to be canceled, the Company Valley Unit 2 contains several financial covenants af-would seek authorization from the PUCO to recover fecting the Company, Cleveland Electric and Centerior its investment in the Unit in rates. We have no assur-Energy. Among these are coverage covenants which ance that recovery would be allowed. In the event of require Cleveland Electric and Centerior Energy to such a cancellation, if and when it were to appear maintain earnings-to-interest expense ratios above probable that recovery would not be allowed, then specific levels. We believe that Cleveland Electric and the Company's net investment in Perry Unit 2 (less Centerior Energy may not be able to continue to any tax saving) wouH have to be written off. We comply with their respective coverage covenants after estimate that such a write-off, based on the Company's 1989, This matter is being discussed with the parties investment in this Unit as of Dece.mber 31,1988, to this agreement and we believe that new require-would have been about $172,000,000, after taxes. See ments will be agreed upon. This agreement also con.
Notes 2 and 11 for a discussion of other potential tains certain capitalization covenants which require consequences of such a write-off, the Company and Cleveland Electric to maintain com-Duquesne has advised the Pennsylvania Public Utility mon stock equity above specific levels and require Commission that it will not agree to resumption of Centerior Energy to mair tam the ratio of common stock equity and the rat (io of total equity to total construction of Perry Unit 2. Duquesne is continuing to pay for its 13.74% ownership share of maintaining capitalization above specific percentages. A write-off Perry Unit 2 while construction is suspended.
of the Company s and Cleveland Electric's mvestments in Perry Unit 2 could result in a default on all or some The increase in the Perry Unit 2 investment amount in of these capitalization covenants. See Note 3. These 1988 is primarily the result of the gross-up of AFUDC capitalization covenants also are being discussed recorded in prior periods related to the adoption of with the parties to this agreement and we believe that the new accounting standard for income taxes.
new requirements will be agreed upon which could be met in the event of a write-off of the Perry Unit 2 (4) Nuclear Operations and Contingencies investments, barring unforeseen circumstances. The Operating Nuclear Units failure of the Company, Cleveland Electric or Centerior Energy to comply with any of the covenants would A petition is pending before the Nuclear Regulatory constitute a default which could result in the accelera-Commission (NRC) and another petition is pending in tion of the obligations of the Company and Clevehnd the United States Court of Appeals for the District of Electric as co-lessees of Beaver Valley Unit 2. Also, Columbia Circuit, each seeking to halt the operation such a default would constitute a default under other of Perry Unit 1 and suspend its operating licerise until l
agreements which coritain cross-defau!t piovisions that certain safety-related actions are completed. We be-14
II ve th ss petitions ars unlikely to succeed. In 1986, The leas 3 and borrowing rates are based on bank the.NRC undertook a review of nuclear reactors de-prime and commercial paper rates. The nuclear fuel signed by Babcock & Wilcox Company, including the amounts capitalized included interest charges incurred reactor at Davis-Besse. The outcome of that review by the lessors amounting to $18,000,000 in 1988 and and its impact on the Company cannot be predicted.
$17,000,000 in 1987 and 1986. Under the leases, rental payments are made as the fuel is burned in a in 1987, the PUCO ordered a refund of certain re-reactor. The estimated future lea e amortization pay-placement fuel and purchased power costs incurred ments based on projected burr, are $38,000,000 in and collected from customers during an outage at 1989, $30,000,000 in 1990, $48,000,000 in 1991 and, Davis-Besse in 1985 and 1986, plus interest. The re-assuming replacement nuclear fuel financing arrange-fund is being made to customers over a period of 18 ments are entered into, $40,000,000 in 1992 and months beginning in February 1988 through operation
$46,000,000 in 1993. As these payments are made, the of the fuel cost rate adjustment. Of the $33,63'4,000 amount of credit available to the lessors becomes total refund to be made, $20,777,000 was refunded av ilable to finance additional nuclear fuel.
through December 31,1988. The refund reduced cash flow but did not adversely affect results of opera-At December 31,1988, a total of $268,000,000 is tions as adequate reserves were provided in prior committed under the nuclear fuel financing programs.
years.
This includes nuclear fuel in the Davis-Besse, Perry Unit 1 and Beaver Valley Unit 2 reactors with remain-Other Nuclear Risks ing payments of $58,000,000, $20,000,000 and
$12,M,000, respectively, as of December 31,1988.
The Company's interests in nuclear units may be im-pacted by activities or events beyond th.e Company's (6) Nuclear Insurance control. Operating nuclear generatmg units have ex-perienced unplanned outages or extensions of sched-The Price-Anderson Act limits the liability of the own-uled outt.ges because of equipment problems or new ers of a nuclear power plant. This limit is covered by regulatory requirements. A major accident at a nu-private insurance amounting to $160,000,000 (which clear facility anywhere in the world could cause the will be increased to $200,000,000 in early 1989) and NRC to limit or prohibit the operation, construction or an amount provided by an industry assessment plan in licensing of a nuclear unit.
the event of a nuclear incident at any unit in the United States resulting in losses in excess of private (5) Nuclear Fuel insurance, the Companys' maximum potential assess.
ment under that plan (assuming the other CAPCO The Company has inventories for nuclear fuel which companies were to contribute their proportionate should provide an adequate supply into the mid-share of any assessment) would be $58,503,000 (ad-1990s. Substantial additional nuclear fuel must be ob.
justed for inflation) per incident, but is limited to taiNd'to supply fuel for the remaining useful lives of
$8,844,000 per year for each nuclear inc4 dent.
Davis-Besse, Perry Unit I and Beaver Valley Unit 2.
More nuclear material and fuel would be required if The CAPCO companies have insurance coverage for Perry Unit 2 were completed.
damage to property at Davis-Besse, Perry and Beaver Valley (including leased fuel and clean-up costs).
The Company finances nuclear fuel under two pro-Ccverage amounted to $1,725,000,000 for each site as i
grams. Under one set of nuclear fuel leasing arrange-f January 1,1989. Damage to property could exceed ments, the Company can currently finance a maximum the insurance coverage by a substantial amount. If it amount of $205,000,000, of which $5,000,000 of this d es, the Company s share of such amount could have credit arrangement will terminate on November 30,
- *^
- rial adverse effect on the Companys, financial 1989, $32,500,000 will terminate on November 30, condition and results of operations.
1990 and $167,500,000 will terminate on November 30,1991. The Company expects to enter into re-The Company also has insurance coverage for the cost placement nuclear fuel financing arrangements.
of any replacement power purchased after the occur-rence f certain types of accidents at our nuclear Under a second set of nuclear fuel leasing arrange-
".ts. The amount of the coverage is 90% of the ments, the Company can currently finance a maximum estimated difference m replacement power costs per amount of $83,000,000. Approximately $12,100,000 "E
E'
."E of this credit arrangement will terminate in November after an accident and 45% of such estimate per week 1989. The balance of the arrangement is cancelable f r the next 52 weeks. The cost and duration of with one year's notice by the lender.
replacement power could substantially exceed the,n-i surance coverage.
l l
l l
15 l
l
m
,7 9:
'(7) RegYiatory. Matters.'
= ment and other rate matters will be terminated. One party who did not sign the settlement still will have an
. During the three years ended December 31,1988, the appeal pending before the Ohio Supreme Court relat.
> PUCO granted increases in electnc rates to the Com-ing to the Perry Unit 1 prudence disallowance in
' pany as follows:
which the PUCO disallowed. approximately'.
Annualized
$168,000,000 of the Company's share of Perry Unit 1 Date
' Amount.
construction costs.
TIi$"rs')
As a consequence of the order relative to the Com-pany, the Company recorded additional write-offs of May 1987
$43.0
$35,000,000 ($21,000,000 after tax), bringing the total December 1987.....
0.5 write-off of nuclear costs in 1988 resulting from the On January 31,1989, the PUCO issued orders for the rder to $277,000,000 ($181,000,000 after tax).
Company and Cleveland Electric which adopted a These involved write-offs of the remaining investment settlement reached between the companies and the m four canceled nuclear construction projects (as -
majority of the interveners in then pending rate cases, discussed in the Summary of Significant Accounting.
.The orders endorse agreements which reach beyond Policies) and certain deferred expenses for Davis-B'55'-
the issues in such cases and resolve, with respect to the participants, issues on appeal. We.cannot predict The phase-in plan contained in the PUCO's order with ~
whether any intervenor in the rate cases who was not respect to the Company meets the requirements'of
' a party to the settlement will appeal the orders.
the accounting standard for phase-in plans. The plan The orders provide for annual,' automatic rate increases provides for the recovery of the Company's remaining for the Company and Cleveland Electric of approxi.
investment and lease payments relating to Perry Unit -
. mately 9%, 7% and 6% on February 1,1989,1990 and 1 and Beaver Valley Unit 2. The deferred operating 1991, respectively. The revenues associated with the costs (including lease payments) and carrying charges
- Company's increases are as follows:
through December 31,1988 will be recovered in rates from customers'over the lives of the Units. The Annualized PUCO authorized the Company to record a full net-of-
^["h tax carrying charge of 9.2% on deferred rate-based dollars) investment commencing January 1,1989.- All deferrals 1989..
$ 50.7 after December 31,1988 (including carrying charges on deferred rate-based mvestment, depreciation and 1990...............
44.3 operation and maintenance expenses) will be recov-1991............
40.7 ered by December 31,1998.
$135.7 Under the orders, the Company and Cleveland Electric may not seek any further permanent rate increases to The above revenue increases are net increases after be effective before February 1,1992 unless fore-including adjustments required under the mirror CWIP casted eamings available for common equity, prior to law and the refunding of revenues collected by the extraordinary items, of Centerior Energy fall below Company in 1985 through 1987 pursuant to a Febru-either $210,000,000 over four consecutive quarters or ary 1985 rate order. The refunding requirement had
$435,000,000 over eight consecutive quarters. During no impact on net income because reserves had been this period, Centerior Energy's earnings available for provided in those years. Reclassifications were made t common equity, prior to extraordinary items and ex-prior years' financial statements for the related reve-cluding changes in expenses relating to any future sale nues and reserves.
and leaseback of assets, are limited to the following The orders provide for the permanent exclusion of amounts for any four consecutive quarters ending on
$495,000,000 of the Company's and Cleveland Elec.
or before the date indicated:
tric's combined investment in Perry Unit 1 and Beaver
$275,000,000 March 31,1990 Valley Unit 2. The exclusion includes $41,000,000 of
$295,000,000 March 31,1991 equity carrying costs authonzed by the PUCO but not
$310,000,000 December 31,1991
' recognized for financial reporting purposes because of the limitations set forth in the accounting standard if the earnings cap described above were to be ex-for phase-in plans. The exclusion resulted in a write-ceeded, an adjustment would be made to the amount off by the Company of $242,000,000 ($160,000,000 of the deferrals recorded under the phase-in plan to after tax) in 1988. All pending prudence investigations prevent any excess earnings. The adjustment would before the PUCO and pending litigation before the be applied proportionately between the Company and Ohio Supreme Court brought by the parties to the Cleveland Electric based on the earned returns of the settlement involving the Company's nuclear invest-two companies.
16
r
- 4. p The orders provida that any permanent rate increase
. effort or identified by the management audit and sought to be effective dr ing the period February 1,-
approved by the PUCO are to be used to reduce cost
'1992 to February 1,199. may only be based upon deferrals recorded under the phase-in plans for the costs associated with net new investment placed in two companies. Fifty percent of annualized savings service after February 29,1988 and changes in opera--
achieved or identified and approved for a period to be -
tion and maintenance expenses and other necessary determined will be used in reduce the 6% rate in-cost ir..reases (other than fuel and purchased power) crease scheduled for February 1,1991. As an incentive -
from the~ levels identified in a management audit -
to achieve the savings, the remaining 50% of savings
. (described below). Also, if Centerior Energy's retum in each of the periods will be retained by the Company on average common stock equity is below the bench-and Cleveland Electric, subject to the earnings cap mark rate established quarterly by FERC for rate cases '
described above,if the Company and Cleveland Elec -
subject to its jurisdiction, the Company and Cleveland tric do not achieve at least one-half of the savings Electric could seek rate increases to improve the identified by the management audit and approved by retum under certain specified conditions.
the PUCO, earnings would be reduced by the amount f the shortfall. Net savings are measured from the
- The Company and Cleveland Electric will undergo a 1988 normalized level of operation and maintenance management audit to assure that operation and main-tenance savings are maximized. Until the manage-expense (excluding fuel and purchased power) and ment audit is completed, an anr.aal savings target w uld be adjusted for changes in capital and operat-range of $40,000,000 to $100,000,000 from the 1988 :
ing com ahg kom certain evenu.
- normalized level of operation and maintenance ex-The orders set nuclear performance standards through pense (to be determined by an audit advisory panel) 1998. Beginning in 1991, the Company could be has been set for the two companies. A nuclear man- -
required to refund incremental replacement power agement expert will be ernployed to conduct a cost costs if the standards are not met.
reduction study at Davis-Besse.
The ' orders provide that 50% of the net after-tax sav. -
ings in 1989 and 1990 resulting from the cost reduction
.r (8) Federal Income Tax Federal income tax, computec; by ' multiplying the income before taxes and preferred dividend requirements by the statutcry rates, is reconciled to the amount of federal income tax recorded on the books as follows:
For the years ended December 31, 1988 1987 1986 (thousands of dollars)
Book Income (Loss) Before Federal Income Tax...............
$ (168,277)
- $145,192
$166,038 Tax on Book Income (Loss) at Statutory Rate................. $ (57,214)
$ E8,004
$ 76,377 increase (Decrease) in Tax:
AFUDC and Carrying Charges..........................
(76,464)
(85,050)
Accelerated Depreciation...................
529 1,666 (2,728)
Organization Costs.....................................
2,274 (25)
Taxes, Other Than Federal Income Taxes..................
4,292 3,015 (212)
Other items.......................
(2,706)
(6.200) 759 Total Federal income Tax Expense (Credit)....................
$ (52,825)
$(19,97J)
$ (10,879 )
17
b
~
I' Fed:ral incom3 tax expens3 is recordid in thm statzm:nt of R:sults of Oper;tions as follows:
For the years ended December 31, L
1988 1987 1986-(thousands of dollars)
' Operating Expenses:
Current Tax Provision.....................................
$ (3,132)
$ 71,050 -
$ 33,288-Changes in Accumulated Deferred Federal Income Tax:
Accelerated Depreciation and Amortization................
(1,354) 41,241 27,958 Nuclear Fuel Expense....................................
3,077 5,574 7,606 Sale and Leaseback Transactions and Amortization..........
14,763 (179,555)
Property Tax Expense..............,....................
(5,058) 5,454 1,245' Deferred CWIP Revenues................................
(4,331)
(7,681)
(9,613)
U nbilled Revenues....................................
(1,184)
Deferred Fuel Costs.....................................
'4,698 (6,441) 446 System Development Costs............................
3,639 1,355 3,611 Davis-Besse Replacement Power.....................
8,375 Federal income Tax Return Adjustments..................
(272) 760 (7)'
Reacquired Debt Costs.................................
'4,646 Deferred Operating Expenses...........................
4,039 10,356
' Net Operating Loss Carryforward........................
(4,295)
Ot her i te m s.............................................
(2,473)
(1,346)
(1,773)
Investment Tax Credits - Net.............................
6,920
' 83,164 (21,611)
Total Charged to Operating Expenses...............
29,242 22,747 41,150 Nonoperating income:
Current Tax Provision......................................
(31,209)
(42,915)
Changes in Accumulated Deferred Federal income Tax:
Davis-Besse Replacement Power........................
2,709 (10,114)
(6,026)
Write-off of Nuclear Costs..............................
(97,277)
AFUDC and Carrying Charges...........................
46,543 Net Operating Loss Carryforward.........................
(36,831)
Ot h er i t em s.............................................
(1,388)
(1,403)
(3,088).
Total Credit to Nonoperating income...............
(86,244)
(42,726)-
(52,029)
Federal Income Tax included in Cumulative Effect of an
[
Accounting Change for Unbilled Revenues..................
4,177 Total Federal Income Tax Expense (Credit).................
$(52,825 )
$ (19,979)
$ (10,879 )
j.
The Company joins in the filing of a consolidated federal income tax return with its affiliated companies. The I
method of tax allocation approximates a separate retum result for each company.
As discussed in the Summary of Significant Accounting Policies, a change was made in 1988 in the method of accounting for income taxes. Adoption of the new method of accounting did not impact net income.
For tax reporting purposes, a net operating loss (NOL) carryforward of approximately $187,018,000 is available to reduce future taxable income. The NOL carryforward will expire in 2003. Future utilization of this tax NOL 1.
carryforward would result in recording the related deferred tax. The tax effect of such carryforward ($63,586,000) l is included in the above table as a reduction to the deferred federal income tax relating to accelerated depreciation and amortization ($22,460,000) and as a reduction to other deferred federal income tax charged to operating expenses ($4,295,000) and to nonoperating income ($36,831,000).
Approximately $22,000,000 of unused investment tax credits are available to reduce future tax obligations. The unused credits expire in varying amounts in 2001 through 2003. Utilization of these unused credits is limited by provisions of the Tax Reform Act of 1986 and the level of future taxable income to which such credits may be
- applied.
l l
l l
18 l
i.
' (9) Retirement income Plan cnd Other Assumptions used for the actuarial calculations for
- Post-Retirement Benefits 1988 summarized in the table are: settlement (dis-c unt) rate - 8%, long-tenn rate of annual compen.
. We sponsor a noncontributing pension plan which sation increase - 5% and long-term rate of return on covers all employee groups. The amount of retirement plan assets - 8%. The 1987 assumptions for these L
benefits generally depends upon the length of service, r tes were 7%,5% and 7%, respectively.
. Under certain circumstances, benefits can begin as early as age 55. The plan also provides certain death, Plan assets consist primarily of investments in common
' medical and disability benefits. The Company's fund-stock, bonds, guaranteed investment contracts and ing policy is to be in compliance with the Employee real estate.
Retirement income Security Act Guidelines. '
The cost of post-retirement medical benefits funded in 1987, the Company adopted the new standard for amounted to $700,000 in 1987 and $1,600,000 in accounting for pensions. Also, during 1987, the Com-1988. No benefits wen funded in 1986.
L pany offered a Voluntary Early Retirement Opportu-nity Program (VEROP) which cost $6,300,000.
(10) Cuarantees Pension and early retirement program costs for the Under a long-term coal purchase arrangement, the years 1986 through 1988 were $4,400,000, $5,700,000 Company has guaranteed the loan and lease obliga-and $2,100,000, respectively. Net pension and early tions of a mining company. This arrangement also retirement costs for 1988 and 1987 were comprised of requires payments to the mining company for any the following components:
actual out-of-pocket idle mine expenses (as advance 3933 3937 (millions of dollars) payments for coal) when the mines are idle for Pension Costs:
reasons beyond the' control of the mining company. At Service cost for benefits camed December 31, 1988, the principal amount of the during the period...........
$ 4
$4 mining company's loan and lease obligations guaran-Interest cost on projected benefit teed by the Company was $27,000,000.
obligation...............
9 8
Actual retum on plan assets.....
(18)
(8)
The Company has also guaranteed the debt obligation Net amortization and deferral.,.
5 J) of a supplier. At December 31,1988, the principal Net pension cost 1
amount of the debt obligation guaranteed by the VEROP eost..................
2
_4-Company was $5,000,000.
Net pension and VEROP costs.
$ 2
$5 The following table presents a reconciliation of the funded status of the plan at December 31,1988 and 1987.
December 31, 1988 1987 (millions of dollars)
Actuarial present value of benefit obligations:
Vested benefits.........
$ 82
$ 86 Nonvested benefits..........
9 12 Accumulated benefit obligation 91 98 Effect of future compensation levels.........
25 30 Total projected benefit obliga-tion 116 128 j
Plan assets at fair market value.
152 141 Surplus of assets over projected benefit obligation '...........
(36)
(13)
Unrecognized net gain (loss) due to variance between assumptions and experience...
20 (2)
Unrecognized prior service cost..
2 (2)
Unrecognized VEROP cost.
L Transition asset at January 1,1987 L
being amortized over 19 years.
24 25 Net accrued pension cost in-cluded in other deferred credits
)
on the Balance Sheet
$ 10
$ 8 19
, j.
(11) Capitalization A loan or advanca by ths Company to Centerior En-i ergy requires PUCO authorization unless it is made in
.(a) CapitalStock Transactions the ordinary course of business operations in which Shares sold and retired during the three years ended the Company acts for Centerior Energy.
December 31, 1988 are listed in the following table.
No new shares of common stock have been issued (c) Cumulative Preferred and Preference Stock by the Company since April 1986.
1988 1987 1986 Amounts to be paid for preferred stock which must be (thousands of shares) redeemed during the next five years are $2,000,000 in Common Stock Sales:
each year 1989 through 1992 and $12,000,000 in Dividend Remvestment and Stock Purchase Plan.
263 1993.
Cumulative Preferred Stock The annual mandatory redemption provisions are as subject to Mandatory fo[jows:
. Redemption:
Annual Mandatory Redemption Provisions 25 par $2.81 2,000 Shares Price Retirements
$100 par $11.00..
(5)
(5)
(5)
To Be Beginning Per 9.375...
(17)
(17)
(17)
Redeemed m
Share 13.25.
(121)
(9)
Preferred:
12.65 (190)
(10)
$100 par $11.00.
5,000 1979
$ 100 14.80 (300) 9.375.
16,650 1985 100 25 par 3.75.....
(1,200) 25 par 2.81 400,000 1993 25 3.72 (1,400)
Net Change........
(22) (1,233)
(41)
The annualized cumulative preferred dividend require-Cumulative Preferred Stock ment as of December 31,1988 is $26,000,000.
Not Subject to Mandatory Redemption:
The preferred dividend rates on the Company's Series 5
A and B fluctuate based on prevailing interest rates, 25 par Adjustable Series B....
1,200 with the dividend rates for these issues averaging Retirements 9.33% and 10.18%, respectively, in 1988.
$25 par $4.28.
(800) 3.47.
(1,200)
Under its articles of incorporation, the Company can-Change (1,200)
(000) 1,200 not issue preferred stock unless certain earnings cov.
erage requirements are met. Based on earnings for Changes in premium on capital stock are summarized the 12 months ended December 31,1988, the Com-5 " #5 1988 1987 1986 pany could not issue additional p.'eferred stock. Also, a (thousands of dollars) write-off by the Company of its investment in Perry Balance at Beginning Unit 2 could adversely affect its ability to issue addi-of Year..........
$482,770 $482,787 $478,939 tional preferred stock in the future. See Note 3. The P em um, Net of issuance of additional preferred stock in the future will
- Common Stock.
5,041 depend on earnings for any 12 consecutive months of
- Preferred Stock.
(1,688)
(17)
(1,193) the 15 months preceding the date of issuance, the Balance at End of Year.
$481,082 $482,770 $482,787 interest on all long-term debt issued and the dividends on all preferred issues.
(b) Equity Distribution Restrictions There are no restrictions on the Company's ability to At December 31, 1988, retained eamings were issue preference stock.
$89,614,000. Substantially all of the retained earnings were available for the declaration of dividends on the With respect to dividend and liquidation rights, the Company's preferred and common shares. All of the Company's preferred stock is prior to its preference Company's common shares are held by Centerior stock and common stock, and its preference stock is
- Energy, prior to its common stock.
20
r-
- ]
o g
.m (d) Lo,ng* Term Debt and Other. Sorrowing -
-(12) Short-Term Borrowiig Arrangements _
' Arrangements '
The Company's bank credit arrangements at Decem.
1 l Long term debt, less current maturities, was as follows:
ber 31,1988 were as follows:
Actual (fhousan 8
December 31, In e 1 Year of Maturity.
. Rate 1988 1987
! of doHars) -
Bank Lines of Credit..............
. $69,050 (thousands of dollars)
First mortgage bonds:
Revolving Underwriting Facility.....
25,000
/ 1991 :................
15.00% $ 70,000 $ 70,000
$9,$8[,[,,.[..
U8 2g,0j 2gg,ol There were no borrowings under these bank credit -
5 2004-2008 ;............
9.64 101,900 101,900 arrangements at December 31,1988.
. 2009 2013...........
135,000 2022-2023........
8.06 91,700 41,000 Short term borrowing capacity authorized by the -
625,803 710,103 PUCO is $150,000,000. The Company and Cleveland Term bank loans due Electric have been authorized by'the PUCO to bor-g,, Q
,Q 3
row from each other on a short-term basis.
1990 3
Debentures due 1997
-11.25 125,000 125,000 Annual commitment fees range from 0.25% to 0.50%
Pollution control notes
. due 1990-2015.....
10.82 167,400' 167,500 on most of the lines of credit. For the bank without Other - net....,
(265)
(477) fee requirements, the average daily cash balance in the Total Long-Term
- bank account satisfied informal compensating balance Debt............
$1,291,444 $1,400,292 arrangements.
, Long-term debt matures during the next five years as At December 31,1988, the Company had no commer--
follows: $25,000,000 in 1989, $113,000,000 in 1990,'
cial paper outstanding. If commercial paper were out-
$113,000,000 in 1991, $119,000,000 in 1992 and standing, it would be backed by at least an equal
' $44,000,000 in 1993.
amount of unused bank lines of credit.
The Company's mortgage constitutes a direct first lien on substantially all property owned and franchises (13) Change in Accounting for Unbilled Revenues '
held by the Company. Excluded from the lien, among other things, are cash, securities, accounts receivable, in January 1988, the Company adopted a. change in accounting for revenues in order to record unbilled-fuel, supplies and automotive equipment.
revenues as discussed in the Summary of Significant The issuance of additional first mortgage bonds by the ~
Accounting Policies.
Company is limited by provisions in its mortgage. At December 31,1988, the Company could not issue The adoption of this accounting method mcreased first mortgage bonds pursuant to those provisions.
1988 net income, before the cumulative effect on However, at December 31,1988, the Company would periods prior to January 1,1988, by $218,000 (net of have been permitted to issue $105,000,000 of re-
$112,000 of income taxes). The cumulative effect of funding bonds.
the change on the periods prior to January 1,1988 was $6,279,000 (net of $4,177,000 of income taxes)
Certa.m unsecured loan agreements of the Company and has been included in 1988 net income, contain covenants limiting to 65% of total capitaliza-tion (as defined) the total of its short-term debt in if this change in accounting method were applied excess of $150,000,000 and funded debt, limiting se-retroactively,1987 and 1986 pro forma net income cured financing other than through first mortgage wedd have been as follows:
bonds and certain other transactions and requiring the Company to maintain earnings (as defined) of at least 1987 1986 1.5 times interest on its first mortgage bonds. The (thousands of doNars) earnings coverage ratio applies to $349,500,000 of Net income (as bevenu)es..
orted
$165,171
$176,917 unsecured loans and was 1.81 at December 31,1988.
Effect of Unbille (Net of income Taxes of A write off of the Company's investment in Perry Unit
($668,000) and $891,000, Respectively)
(1,005) 1,045 2 could significantly affect its ability to issue additional Pro Forma Net income.
$164,166
$177,962 debt. See Note 3.
21
___._____..__m.
_. _. _ _ _. _ _ _ _ _. _ _. _ _ _ - _ _ _. _. _. _ _. _ - -. _ _ _. _ _ _ _ _ _ _ _ _ - - _ _ _. _ _ - _ _ _. _ _ _ - _ _ _ _.. _ _ _ _.. _... _ _ _._.___.__._.___..___.._____..._._.--__._.-__.-________.__.________i
y J14) Quarterly Results cf Operations (Unaudited)
L The following is a tabulation of the unaudited quarterly results of operations for the two years ended December 31, 1988.
Quarters En' ed d
March 31, June 30,-
Sept. 30, Dec: 31,
.(thousands of dollars)'
1988.
Operating Revenues..................................
$156,689
$141,824
$170,102 : $ '159,382 Operating income...................................
17,000 16,481 17,655
~1,217 Cumulative Effect of an Accounting Change (Note 13)..
6,279 Net income ( Loss )....................................
26,803
-16,327
-19,764 (178,346)
Earnings (Loss ) Available for Common Stock............
19,150 9,922 13,295 (184,802)
- f 987 -
Operating Revenues.................,..,.............
$144,794
$148,419
$166,858. $ 144,966 Operating income...................................
34,891 30,653
. 35,848 32,051 N e t i n com e..........................................
47,950 35,715 46,832 34,674 Earnings Available for Common Stock......... :........
36,637 24,707.
35,477 25,601 Pro Forma Amounts Assuming the Accounting Change Were Applied Retroactively (Note 13):
Net i nc ome.....................................
45,432 37,100 48,723 32,911 Eamings Available for Common Stock..............
-34,119 26,092.
37,368 23,838 -
The unaudited quarterly results for the first quarter of 1988 have been restated to reflect the recognition of unbilled -
revenues. See Note 13. The results for the four quarters of 1987 have been restated to reflect the Company's
~
January 1989 PUCO rate' order as it relates to the refund requirements contained in its February 1985 rate order discussed in Note 7. The results for the last three quarters of 1987 have been restated to reflect the PUCO's February 1988 accounting orders for Perry Unit 1 deferred costs and carrying charges as disce, sed in the Summary of Significant Accounting Policies.
The restated information has been changed from the results previously reported for 1988 in the 1988 Quarterly Reports on Form 10-Q and for 1987 in the 1987 Annual Report on Form 10-K as follows:
Changes from Previously Reported Information for the Quarters Ended March 31, June 30, Sept. 30, Dec.31, (thousands of dollars) 1988 Ope rating Reven ues..............................
$ 4,592 Not Operating income...................................
2,598 Previously Cumulative Effect of an Accounting Change.............
6,279 Reported Ne t inc ome.........................................
8,877 Earnings Available for Common Stock.................
8,877 1987-Operating Revenues....
$(5,361 )
$(4,736)
$ (5,556)
$ (4,532 )
l-Operating income....................................
(3,066)
(2,709)
(3,178)
(2,592)
Ne t i ncom e.........................................
343 (733) 390 Earnings Available for Common Stock...............
34:,
.(733)
-390 1
1 1
22 L
=_
_ D
1 FINANCIAL AND STATISTICAL REVIEW Operating Revenues (thousands of dollars) steam Total Total Total Hearing Operattng Year Residential Commercial industrial Other Retail Wholesale Electric
& Cas Revenues 1988.
$200 916
$142 696
$199 521
$34 961
$578 094
$49 903
$627 997
$627 997 1987.
200 877 142 385 219 098 27 646 590 006 15 031 605 037 605 037 1986....
189 292 133 841 214 274 23 886 561 293 11 189 572 482 572 482 1985....
184 687 129 161 213 895 26 284 554 027 15 656 569 683 5 761 575 454 1984.
172 539 115 467 194 751 45 029 527 786 14 083 541 869 9 436 551 305
- 1978, 106 512 67 563 120 570 22 817 317 462 16 621 334 083 5 973 340 056 Operating Expenses (thousands of dollars)
Perry Unit 1
& Beaver Fuel &
Operation Depreciation Taxes.
Valley Federal Total Purchased Other Than Unit 2 income Operating Year Power Maintenance Amortization FIT Deferred Taxes Expenses 1988..
$116161
$358 823
$75 093
$80138
$(83 813)
$29 242
$575 644 1987.
140 176 223 307 65 503 59 658 (39 797) 22 747 471 594 1986.
158 763 167 319 37 832 51 398 41 150 456 462 1985..
158 990 141 608 44 338 47 772 52 873 445 581 1984.
139 780 125 351 49 971 46 602 66 411 428 115 1978.
137 889 58 487 26 532 24 320 27 397 274 625 Income (Loss) (thousands of dollars)
Carrying Other Charges on Federal income income &
Nuclear Income Before Operating AFUDC-Deductions, Plants Taxes-interest Year income Equity Net
& Other Credit Charges 1988.
$ 52 353
$ 5 452
$(246 722)(a)
$129 632
$86 244
$ 26 959 1987.
133 443 122 138 (16 904) 14 989 42 726 296 392 1986.
116 020 129 578 (1 627) 52 029 296 000 1985.
129 863 105 094 10 669 38 167 283 793 1984.
123 190 82 736 7 876 34 335 248 137 1978.
65 431 17 470 720 6 484 90 105 income (Loss) (thousands of dollars)
Income (Loss)
Cumulative Before Effect of an Earnings Cumulative Accounting (Loss)
Effect of an Change Preferred Available Interest AFUDC-Accounting for Unbdied Net income stock for Common Year Charges Dent Change Revenues (Loss i DMdends stock 1988.
$150 523
$ (1833)
$(121731)
$6 279
$(115 452)
$26 983
$(142 435) 1987.
185 493 (54 272) 165 171 165 171 42 749 122 422 1986.
174 397 (55 314) 176 917 176 917 45 243 131 674 i985.
155 025 (44 745) 173 513 173 513 41 362 132 151 l
1984.
129 401 (34 790) 153 526 153 526 34 9 %
118 530 1978.
42 746 (7 090) 54 449 54 449 13 020 41 429 (a) includes wnte off of nuclear costs in the amount of $276,955,000 in 1988.
[
I
.x THE TOLEDO EDISON COMPANY Electric Sales (millions of KWH)
Electric Customers (year end)
Residential Usage
' Average Average Average Pnce.. Revenue
. Industrial KWH Per Per Per
' Year Residential Commercial Industrial Wholesale Other Total' Residential Commercial & other ' Total Customer KWH. Customer 1988......, 2 068 1 579 '
3 780 '. 938 474 8 839 251 590 25 526 4 102 281 218 8 264 9.724 $802.87
'1987...,..1977 1 532 3 589 344 464 7 906 249 344 25 170 4 085 278 599 7 969 10.16 809.66 1986...... I941 1 495 3 482 242 449 7 609 247 256 24 655 4 004 275 915 7 881 9.75 - 768.43 1985...... 1 901.
1 436 3 429' 330 451 ~ 7 547 245 485 24 261 3 942 273 688 7 770 9.72 755.00 1984.......
1958 1 398 3 444 304 440 7 544 243 912 23 891 3 920 271 723 8 045 8.81 709.09 1978..... 1914 1 231 3 617 533 390 7 685 234 450 23 334 3 551 261 335 8 244 5.57 458.86 Load (megawatts)
Energy (millions of KWH).
Fuel Operable IN Peak Capacity Load Company Generated Pur ned Fuel Cost Year Of Peak (b)
Load Maryn Factor Fossil Nudear Total Power Total Per KWH KWH 1988.....
1 497 1 614 (7.8)% 62.8% 5 820 3 325 9 145 385 9 538 1.598 to 174 1987.
1 698 1 484 12.6 64.9 5 916 3 218 9 134 (647) 8 487 1.45 10 1 %
1986......
1324 1 423
( 7.5) 64.8 6 462 12 6 474 1 689 8 163 1.82 9 860 1985.......
1338 1 374 (2.7) 66.8 5 744 952 66%
1402 8 098 1.90 10 124 1984.....
1 641
.1 327 19.1 68.2 5 181 2 091 7 272 71 9 7 991 1,73.
10 193 1978......
1 813 1 386 23.6 67.1 5 402 1 278 6 680 1 566 8 246 1.20 10 283 Investment (thousands of dollars)
Construction Work in Total Utility Accumulated Progress Nuclear
- Property, Utility Plant in Depreciation &
Net
& Perry Fueland Plant and Plant Total Year Service Amortization Plant Unit 2 Other(c)
Equipment Additions Assets 1988...
$2 438 927
$487 546
$1951381
$ 459104
$262 514
$2 672 999
$170 501
$4134 672 1987...
2 600 511 419 149 2 181 362 374 274 267 069 2 822 705 380 974 4 277 587 1986.
1 442 812 415 745 1 027 067 2 169 945 269 022 3 466 034 463 163 3 813 889 1985.
1 392 346 390 565 1 001 781 1 766 927 228 425 2 997 133 388 555 3 385 268 1984.
1 372 963 365 015 1 007 948 1 413 328 196 530 26178%
356 221 2 936 162 1978..
950 609 176 450 774 159 351 %1 24 075 1 150 195 180 688 1 255 947 Capitalization (thousands of dollars & %)
Preferred Stock, Preferred Stock, without with Mandatory Mandatory Redemption Year Common Stock Equity Redemption Provisions Provisions Long-Term Debt Total 1988......
$ 887 442 36 %
$ 71155 3%
$210 000 9%
$1291444 52%
$2 460 041 1987.....
1 096 737 39 73 340 3
240 000 8
1 400 292 50 2 810 369 1986..
1 074 663 36 148 797 5
260 000 9
1 480 947 50 2 964 407 1985.
949 881 36 153 639 6
230 000 8
1 339 268 50 2 672 788 1984 813 895 36 157 828 7
200 000 9
1 110 122 48 2 281 845 1978....
382 084 35 9 500 1
150 000 13 560 644 51 1 102 228 (b) Capacity was reduced because of extended generating unit outages for renovation and irnprovements in 1984 (85 inw),1985 (401 mw),
1986 (416 mw) and 1988 (416 mw).
(c) 1984 and 1978 restated for effects of capitalization of nuclear fuel lease and financing arrangements pursuant to Statement of Financial Accounting Standards 71.
_ - -