ML20247J774
| ML20247J774 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 12/31/1988 |
| From: | Shockley T CENTRAL POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML20247J737 | List: |
| References | |
| NUDOCS 8907310319 | |
| Download: ML20247J774 (86) | |
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- c entral Power and Light Company i supplies electric service to a 44,000-square-Cmile area that reaches into 44 c South Texas. The Company is a subsidiary of Central and South West Corporation, a registered
_ holding company. At the end of 1988, Central Power and Light Company served 539,896 customers in 224 communities and the surrounding area. The Company also' supplies, at wholesale, a - part or all of the electric requirements of five rural electric cooperatives and two municipal electric systems. The territory served by the Company has a population of approximately 1.8 million. Principal executive offices are located at 539 N. Carancahua Street, Corpus Christi, Texas. Telephone: (512) 881-5300. i,I I- [hT[? s d$, anu E AmirRWm l i
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At CFL re regaaf Sxth Tcras'cducatienalfacilities l[n 1988 we witnessed the South Texas Project Electric ss ritalresc2rces that mnst be nurtured. The s realization of our long-1 Generating Station (STP) Compny's cc!1ege scholarship program is one s/ cur ,1 range fuel diversification et/ arts that enmplifies a commitment to education. achieved one milestone after program, fulfilled increasing another, culminating in the regulatory requirements, and commercial operation of Unit 1 adjusted to operating as a in August and fuelloading of new, more-streamlined Unit 2 in December. Since PRES / BENT'S organization. During this becoming operational, Unit 1 transition period, I'm proud to of the nuclear power plant has LETE say that our employees achieved an outstanding continued to exhibit dedication operating record. When Unit 2
,- and loyalty that has for so long begins commercial operation been the tradition and later this year, STP will place foundation of this Company. us in an excellent position to Throughout the year the defend against future fluctua-tions in our energy supply, a
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1 The completion of STP - develop the economy of South studies indicate that trend l Unit I heralded the time Texas. should continue. That speaks i when it must be reflected in We are seeking to defer well of our efforts to work our rates. A tremendous - certain operating and mainte- efficiently and to be a partner f amount of work and nance expenses associated with South Texas. l preparation for our rate case with STP until our new rates We are committed to j occurred last year, but we become effective. Without making the extra effort to I were not able to file a case deferred accounting our provide superior customer l until February 1989 because earnings deteriorate rapidly, service. Traditionally, we have ' thcre was no clear direction and our Company's financial been above average in ! from the Public Utility standing suffers. The PUCT delivering reliable, quality Commission of Texas (PUCT) completed its hearing of our services to our customers. on certain issues. deferred accounting request But to move from above Without doubt, this is the last August, and in February average to superior in our most significant rate case this 1989 the hearings examiner customers' minds means company has ever filed. Its issued a report, with which giving special attention to each outcome will have a tremen- the Company disagrees. The customer. dous impact on our Company PUCT is expected to issue a That means putting together and will determine our future final order soon. This and all the elements - reliability, ability to reliably serve our other regulatory subjects are reasonable rates, value, trust, customers. We also recognize covered in more detail in the community involvement and that it will have an impact on financial section of this report. respect for the customer - those same customers. For Our Company and our that makes the difference that reason we are asking the industry face numerous between above average and PUCT for a four-step increase challenges that require us to superior service. in rates to moderate the respond with bold initiatives. We are involved in a number effects of the change. Our Recognizing this, we of programs that will help us - l filing seeks an increase of streamlined our organization in achieve superior customer .i rates of $125 million in the 1988. service. Many of these first year. If we continue The reorganization programs support community through the full regulatory affected virtually every area of service projects, educational j process, we would not expect our operations. Through programs, and efforts to help 3 to see permanent rates until attrition and an early retire- low-income and elderly South l 1990. ment program, we reduced Texans. We continue to pursue our work force by 11% We As I said, we owe our ~ negotiations with the also implemented new successes in 1988 to the hard intervening parties to settle programs that centralize many work of our employees. I am this case and three other operations and allow us to confident this dedication will l regulatory proceedings related serve our customers more continue as we face the j to our investment in STP. We efficiently. difficult times ahead. The next . hve proposed a settlement These efforts tnmslate into year will not be easy, but we i that would increase rates in savings for our customers. will face the challenges with i two steps with base rates Our residential customers perseverance and come out a frozen at the second level continue to pay among the stronger company, fully . through 1995. lowest rates of investor-owned prepared to serve the future it is hoped that a settlement electric utilities in Texas. Even of South Texas. can be reached for the benefit with the proposed rate of our Company, our increases our rates are customers and all of South expected to remain competi- ! Texas. It is our desire to put tive within the state into the , e these regulatory issues behind 1990s and beyond. A recent 7 us as quicidy as possible so PUCT draft study shows that , i that we can concentrate on since 1976 our residential T. V. Shockley, III i serving the energy needs of rates have stayed below the President and Chief Executive Officer cmW Paer and @ cwny our customers and helping rate of inflation, and our own 1
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i yy ',N. ,, o COMMERCIAL OPERATIONOF i ? SOUTH TEXAS PROJECTUNIT1 0 STREAMLINING OUR CORPORATE STRUCTURE - f
- PREPARING FOR RATECASEFILING l These events dominated 1988 at CPL. ht, as important as they were to the Company's future, efforts to achieve excellence in customer service also ranked as a top priority. This will be the u , ,
^
case in 1989 and beyond. W W, ,U@$w m%y I$ y CPL approaches every customer mqimy or y ;' ; ;, problem with the objective of. creating a positive yb(4 ; customer contact. Our goal is 100% customer Ha c; .VR _y :; .
,1 satisfaction. A number of new programs and
%QQji fRQ} f%
initiatives got under way during 1988 to provide more reliable, convenient andfaster service. We believe excellence in service willprove the key to
&jg%g,-Q
~
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RJW Q f_>rospering in our increasingly competitive mdustry. )f% yf Q@i im Q, ~[41 w%&w 4;g7 w' wgg: ?g sv 36 . ' } Ile 80##1 TeJBS new era of greater fuel diversity for CPL, and stable- j$$W h Db , C " W > % Y ,l' Pro i#ect Commitment W ; ss k ' Of yp9; * )W priced electricity for South O y'%a Texas. We own 25.2% of the c ,. '<7 + b"'s/p@ MM!* 4 he South Texas two-unit, 2,500-megawatt ;4
/m!I Project Electric
.1 Generating Station power station in Matagorda 'L7 m '4 ,% @F'$
n
^'ET'M $ g County. g/K^ n' '
q , Jd (STP) underscores our After Unit I achieved its " commitment to customer first nuclear reaction March 8 J" " # o s ' < i
' M;"k 4 +5 M #
m service by providing reliable, successful low-power testing jhf* reasonably priced electricity for South Texas. of the unit continued through the spring. STP Unit 1 ff @gF 6 <
3gk /F. 3s
- im g, $ <
We became participants in received its full-power license W ' the nuclear project to help from the Nuclear Regulatory 9,
~
iM @ " @~p.'%'y" j' protect our customers from the uncertainty of gas Commission (NRC) March 21. When Unit 1 achieved 75% W
& y,o?R
- 2 W
Qkffq availability, its volatile price, and the resulting effect on the power, it became the single largest generating unit in the QpW A q '% ^ 3*[b cost and availability of state. The unit reached 100% M # N P 5 %@m, m c
%f <
- 4 electricity. Commercial power July 27, and went into htM, . MO f & - oMM operation of STP Unit I during commercial operation August kW , e 3 @O g[k 7 ;
the past year ushered in a 25. When Unit 2 goes on line gx. , G~ > %.; Mp[m 'v j$
) h @s !
%y ?)-{fYlll&l4 (? -
l this summer, STP will deferred accounting would two cases became outdated i represent 14.4% of our reverse this situation, and we while we awaited the PUCT's I generating capacity, and will would have an opportunity to decision to allow post test produce about 25% of our total recover most of the costs of year adjustments for major annual energy needs. Unit 2 rendering service incurred new generating facilities. l construction was completed on during the last months of However, commercial l the schedule set in 1982 by 1988. operation of STP Unit I has l Bechtel Engineering Corp., CPL's total revenues now enabled CPL to complete the project architect / engineer increased by 3% due to several and file the third case. This and construction manager. factors, the most significant case, based on a September. l This unit was granted a low- being higher fuel costs and 30, 1988, test year, was filed power license by the NRC higher kilowatt-hour sales. February 15,1989. It is by far December 16, and fuel load Base rate revenues decreased the most significant rate was completed four days later. by less than 1% while fuel request ever filed by CPL, Unit 2 is expected to ,be in revenues increased 8%, and both for our customers and for commercial operation in June kilowatt-hour sales were up by the Company. 1989. more than 4%. We seek to recover our One of our highest priorities Average revenue per investment in STP, which will be continued participation kilowatt-hour from residential represents more than half of in monitoring and evaluating customers increased from 5.90 our total assets. CPL has STP's perfonnance. Our focus cents to 5.97 cents during the invested $1.37 billion in cash is shifting from plant year, further reflecting and $842 million in allowance construction to its operation increasing gas prices. Average for funds used dming and efficiency. We will residential usage increased construction of the nuclear l continue to be active in fuel from 10,369 to 10,925 power station. In our filing, j procurement, setting kilowatt-hours, an increase of we have requested a four-step r operational goals, and plant 5%. The number of residential rate relief plan to moderate I budgeting. STP represents customers also increased. the impact on customers while l CPL's largest single maintaining the financial health In the commercial category, l investment, and we will do our revenue was up 6% due to of CPL. pad to ensure its efficiency, slight increases in kilowatt- . safety and reliability through If ur plan is approved, the hour sales and in the number the life of the plant. first merease would be l of customers. app ately M in 1990. l . Industrial revenues declined The plan will require three Operating ResultS by approximately 9%, and additionalincreases that are kilowatt-hour sales decreased estimated to be 11% m 1991, sis by approximately 2% The .
,\,ot since the fuel cn.
a of the early 1970s had CPL recorded a net
. of a major petrochemi-closm.g 7% m 1992, and 6% m, 1993.
Each of these increases will be cal plant, cogeneration and loss in the Company's monthly , subject to PUCT review and earnings report. However, in ince tive rates led to these approval. We project that our - the fourth quarter of 1988, CI,L's net income decreased base rate would remain stable CPL had a net loss of $3.3 , follow ng the finalincrease for million. This compares to net from $191.9 million in 1987 t at least five years, from 1994 income of $42.6 million for the through 1998. However, the s tt but let the same period in 1987. pnce of electricity may deferred accounting issue inadequate rates and the fluctuate to adjust for the cost 6scussed abom PUCT's delay in issuing a of fuel. We hope to have the decision regarding our request , new rate in effect by early for deferred accounting caused 8/68t/#g COMpelllNe 1990, if an earlier settlement the losses. This illustrates the D cannot be negotiated. (Sce: urgency of our effons to na eS settlement Proposat). receive fair rate relief from PL prepared several During 1988 we initiated the PUCT. Again, an order granting our request for j' rate case packages during 1988. The first several changes in our rate structure designed to keep our
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senice competitive and retain n our large industrial customers.
$gfffffyggf @gFgel bp 4, In August CPL obtamed .- PL has proposed to the ,
intervening parties a approval from the PUCT to g ' revise a tariff that can be used U settlement of all
. s for expansion of senice to regulatory issues concernmg -
existing large industrial STP. We are pursuing a 4 .~ customers. During 1989 we negotiated settlement - c 4 ' - I expect the Union Carbide involving representatives of = C facility in Seadrift to begin the cities served by CPL, ^ 1/M. yNd ' taking service under this other interveners in the rate a s revised tariff. Our rate filing cale and the PUCT. A - request is being reduced by settlement would benefit all ~
~
~
$1.5 million by this sale, and parties by shortening an .
we believe other large otherwise lengthy and industrial customers may also expensive rate proceeding. It yp m / take advantage of this senice. also would allow us to focus Q [ ,'> h. M~ b3 g/o , %_ d i Also, the retail rate case we our efforts on further l ~Q," 7t l < Fg ' l filed in early 1989 contains recovery and expansion of the South Texas economy, and f% m s
%[ gf p y _ p, l several proposals that will yG E;n yn ~ yQf permit us to remain competitive while benefiting prevent the buildup of additional interest charges i W ij on STP W 4, G our customers. These include:
j ,Q ggi,m. gyg.4g Mg 4- y. s g. Our settlement proposes a
- A fuel-supply plan to permit large industrial customers to two-step rate increase over
- f y. 44,d!: eQ supply their own fuel.
two years. Step one would g p g ,p g E g gtjg 4 ._ Keeping these customers on increase rates 28%. The average cost of a kilowatt-hour yppyys W (( 9fyj" g,g'p{"f{%p hg.pmPvP&pW; 'i %. line benefits all of our ' customers by spreading our w uld increase from 5.5 cente fixed costs over a greater to 7 cents, increasing annual revenues by !229 million. One 4 , ff4 S;' M
- %( *~$'
4 number of kilowatt-hour sales. year later, step two would [g 4 F, M . raise rates 11%. CPL's average , % g~ , #y" *# J > Expanded interruptable- rate would increase to 7.75 J ' D b- @c- ?,@ service options for large cents per kilowatt-hour, $ -
"*W industrial customers. increasing revenues by $115 U" ' % ' -
A[ d p'g V % An expanded off-peak rider million. Rates then would be $ on an experi nental basis for smaller commercial frozen, excluding fuel costs, double-digit inflation or other i %gMi i. f< , g' f A [ y/'h]b fJ ,Lq customers. abnormal, unforeseeable >WMTM ' N A separate rate for Good Cents Homes that provides a
*9 mic changes, through 1W1 ,ggg 44 h@f' "sM[: Q[t 4 v; It is projected that the g; g P ;g 'q lower price for these homeowners in the winter, proposed rates would be Eppy Q2 [g,Q w q FF based on their higher annual load factors.
comparable to those of other Texas electric utilities through
, Jg' %g7Q %w g 1995. We expect a lower than 1 . ' ** L MPC Retention of the commercial nomal return on common #sm
- 6
#TS heating and water-heating equity the first year of the V >
<'WMi nders. which are designed to settlement. The raturn on b m" w[E
'%/g.
reflect the benefits of these common equity would increase < > N;4 off-peak loads. 'E 6 p' .
,m ~
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. yAgiggggi in later years to returns from some two dozen
& .jm> typical of those now allowed suppliers. Diversification
. ;g .
E by the PUCT. We wi!! continue continued in 1988 with the 1 l a, , . ,,. [ to negotiate with interveners. completion of a gas line to our
. a, ,
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Ennis Joelin Power Station at J J Seeking Stable fuel Poirt comfort. Ali but one of 44 ~ nf 1 our stations have muiriph gas { %,. *,,(( T y& 4 . SN((h.08 suppliers, and several stations A. N TP requires a large have as many as five rd mML Jn; J e : f.]-43, @p Akt"$ m investment, but it suppliers. This increase in g' .,4
- r < ' ,W i f g w. . .: ?
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h(e will more than pay for itself through fuel savings for suppliers and resulting competition has helped bring EN .! g i
'[- .
our customers. Fuel savings down fuel costs. e T , .1, .F d. : are projected to be about Our customers benefited J @ " 'I . o + $5.39 billion through the directly from lower gas prices lV, , jNeNk.i pqqNkMy operating life of the plant. through fuel refunds. CPL $e, r g,K hp'fggg:pdd i While adding diversity to our refunded $21.2 million in fael ; y, 5 fuel mix, uranium is expected savings to custoners m Feb- j to remain plentiful and ruary 1988. And, in the spring { v m@ , '@- of 1989, we hope to refund O'% relatively inexpensive. STp i
@ '9 has suf6cient nuclear fuelin about $20 million in savings
,. gy j inventory or under contract to collected during 1988. !
* +7 4k .
P N ensure stable fuel prices Coal is the third main element of CPL's fuel supply. i
<,m l through 1995. l M M For the first time in CPL's The prices we paid for coal 1 remained relatively stable ;
' k @h [Mi% d y % d hwjg,3;gM7 [m(y, i
. history, natural gas repre_
o f sented less than 50% of our during 1988, and we expect ,.y ,44 that to remain the case for the g{y){V 3q 1 9 .nonthly fuel requirements N A5f during November and Decem. next several years. We g" M hl/M ;4 s, Q ber. When Unit 2 begins conducted coal test burns at our 600-megawatt Coleto g: i hR g commercial operation, our gas , y M M[g p% hb WSind j requirements should decrease Creek Power Station during fip W.@sy" Mj M C 1y further. However, natural gas the past year to determine if T mv O will remain our primary fuel vanous types of coal can be , p'(.k@ $gdi M D.h ':< 3 source. In 1990, the first fr;j burned effidently and within ! W cd.
~
W Jj year in which STP will be environmental standards. This completely operational, tbout procedure enhances
,%". 9 Q P, .--
half of our generation wii! be competitwn among suppliers, @ J
]f . lh"y ig d prosided by gas, and about helping us to further reduce M 25% each by nuclear fuel and our fuel costs m the future.
,d W '
Oi coal. We will continue ;.o test other 1 g .9 To maintain a relible gas coal from new appliers during supply and competition among 1989 to seek lower-cost fuel.
; K"g l T[ '
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? -
J suppliers, we continue to k g, Md diversify our sources of fuel SBfl#g [0/ the
$"t ns. OUSiOMBf e '? N A few years ago, CPL had N ome customers measure f, only four major gas suppliers. (% our efficiency and the ~
m }j Half of our power stations kJquality of our service 4 were served by only one only by the size of their bill. W,1p e[, , s j major supplier. We now have CPL had the lowest resider.tial m? 13 different pipeline systems rates of the nine investor-
; ; supplying firm and spot gas owned utilities in Texas for
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1,000 kilowatt-hours of programs for public schools. us, both as individuals and as a electricity for seven months But CPL's support of an adult Company, to put something during 1988. However, literacy program was a new back into our communities. keeping customers satisfied initiative. Needy families in South requires more than reasonably Without an educated, Texas who have trouble priced electricity. That is why literate workforce, South affording senice will benefit CPL emphasized customer Texas faces a threatened from a new program - CPL's senice programs in 1988. economic future. That is why Neighbor-to-Neighbor - Residential customers during 1988 we became a which will begin during the responded enthusiastically to corporate sponsor of the spring of 1989. Neighbor-to-our Equal Payment Plan, Corpus Christi Literacy Neighbor will seek small which averages their bills to Council. donations from customers who eliminate seasonal variations. Stockholder funds were can afford to help needy This equalizing of payments used to produce a public families pay their energy makes it easier for our awareness campaign called bills. Our stockholders will customers to budget for their " Windows to the World." provide up to $100,000 for this monthly bill, and it helps to Radio, television and print program. Community agencies stabilize our cash flow. More public senice armouncements throughout our senice area will than 13,000 customers signed proved very successful at both administer this emergency aid up for the program during attracting needed tutors for fund. 1988. the literacy council's program Last June we also made our - more tien 300 tutors The 80#fh TBIRS bills easier for customers to signed up - and making more g,no g, understand and more people aware of the unuupA informative by replacing educ .ional opportunities PL is keenly aware of postcard bills with letter-sized available through this free the importance of bills sent in envelopes. In senice. We plan to extend j% promoting new industry addition to providing larger, support for literacy programs in South Texas and more legible print, envelope throughout South Texas in diversifying our economy. Our billing allows us to include a 1989- Area Development and Large return envelope and brochures Another indication of our Industrials group played a about safety, energy community involvement is the major role during 1988 in conservation and customer new Reddy Neighbor encouraging many businesses senices offered by CPL. The Program. During December, to locate operations or to bill includes more information employee volunteers in every expand existing facilities in about customers' electricity region spent a Saturday South Texas. usage. On the back of the weatherizing and painting the Last year, 37 companies bills, we publish CPI's policies homes of four elderly, low- announced they would expand and eligibility requirements for incc,me families. Community their enterprises or begin new different senice rates. welfare agencies in each operations in our senice area. Customer surveys show the region recommended the The list included uranium ; change to emw' ope billing has families in need of help, and mining, food processing, I been popular and a benefit to CPL paid for the supplies. The shipyard construction, l customers. objective of the program is elec'tronics assembly, defense 1 Unfortunately, South Texas three-fold. First, it contracting, and interests such I has one of the highest reemphasizes, to all as General Dynamics, De illiteracy rates in the nation - customers, the importance of Dietrich, Fruit Of The Loom in some places 407c or more of weatherization for home and OxyChem. The largest the adult population cannot comfort and energy efficiency industrial expansion was read at a functional level. CPL Second, Reddy Neighbor announced by Formosa has traditionally supported exposes volunteers, and other Plastics Corporation USA in education in our area through South Texans, to the needs of November. Formosa will college scholarships, our less-fortunate neighbors. create 1,700 new, permanent educational materials and And third, the program allows jobs with its $1.32 billion plant ymm ) qq MMSM j
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M * $ ,fQ h W h N rl j)y:' f y;;$, & &@ 1 expansion at Point Comfort. constmction of the $22 million The investment is expected to facility with a sizable ; indirectly create nearly 8,000 contribution. We believe the i jobs, aquarium will prove both a ( Throughout South Texas, major draw for visitors, and a i maquiladora (or twin plant) valuable educational and growth continued at a research facility, phenomenal rate during D88. Our service area's $2 billion , There are currently 35 twin- agriculture industry suffered ' plant facilities in our service during 1988 due to depressed area, manufacturing everything markets and the drought that from rebuilt jet engines to plagued most of the nation. fiberglass bathtubs. The However, adequate rainfall this maquilas represent the spring could brighten the interest of many blue-chip outlook for South Texas f, manufacturers - Delco farmers and ranchers. Citrus Electronics, Ford Motor production has almost Company, General Electric, completely recovered from the Sunbeam, W. R. Grace, effects of the 1983 freeze. Westinghouse rnd Zenith. h f k. f d[fi 4f In Febmary officials broke Mgfkgf[gg [g[ggfg g 4dh@hhje My }L. - ground for Naval Station p 7h<hu Ingleside. Construction C#Sl0merseesS P ;'g i-QQ d kp$ ( gg continues at the new facility espite the sluggishness i FfJelgg f' which will be the homeport of of the South Texas m a M 4 p-4 g b@gg tk Pgh
'@ g the refurbished battleship USS Wisconsin and a support
. economy during 1988, CPL's Marketing group i
Y K. flotilla. When complete in continued to have success j th; W n'~/3 " ]Q b" 4 + 6pM$ fg%g g*f 1990, Naval Station Ingleside is expected to boost the promoting our services. %4p$ g y4" f 2 _o ^WQ[Ar Q
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yQ Corpus Christi area economy Total electric homes represent 80% of the new j% Mgg - ./.. s4y by $300 million annually. On- housing market, despite gfQ g{h site electrical load is projected aggressive competition from y fj p t be more than 20 gas companies in water and gQ w,, yp. m j j%y hkg_ megawatts. space heating. In 1988, 85% of y g7 f W D Lg g g The overall picture is all air-conditioned new homes y g . [p p; brightening in the had electric heat. MMP g'l7(g'wh petrochemical field, and South g y7 mA[g7q > .Q Lighting sales, an area in i p Texas is seeing an increase in which we achieved record-q%pg1 % , W % l o 3 plant development. The setting levels for our industry l p% %)g, " 7, , y y y g relatively low value of the dollar and petroleum feedstock during 1987, continued to be l
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groundbreaking for the Texas We also introduced a sfh W State Aquarium iook place in commercial floodlight program M , w]-aif yk m( :, [Cgykm diMg[g [7 n '% " hmlj March 1988. CPL supported durig 1988. More than 2,500 ,r'u +g;i j,g 3 3 M b yf 's 3 Cm w $& ' %ll g gy%' ~p; p[pf < pp;y] M. yg g&qQ r
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commercial floodlights were enhance our natural security procedures to control installed. These lights emironment for future theft of senice, improve represent one megawatt of generations. It symbolizes the money handling procedures in off-peak load, and sales of four strides we can make as a our area offices, and better million additional kilowatt- team. " protect employees and hours. We also participated in the equipment. Texas Coastal Cleantip in Septemscr. CPL volunteers Preserving Natural _ Jomed the statewide effort by Positive Customer ,, Resources adopting a one-mile stretch of Contact Training beach on Mustang Island and
/Phe Ben E VaughanJr. FPo ' setter reflect the b Hatchery and spending a Saturday mormng F importance of our pickmg up trash. All told, we A. people to the success 1 Research Center at our Barney M. Davis Power sacked more than a ton of of CPL, we renamed our Station in Corpus Christi was litter. Employee Relations group completed and dedicated in Human Resources in 1988.
1988. It stands as one more W0rkl#g 8Marter, That department initiated a example of our continued number f tr ining programs commitment to preserymg and W0rkl#"8 # ale'r to improve our employees improving South Texas' natural 7mproving customer senice ability to serve customers. In environment. The new }j was the driving force December we began an research facility also illustrates Ebehind a toll-free telephone extensive Customer Relations how industry, a conservation number we began in Senice training course. The group and a government December to provide 24-hour class teaches clerks and office agency can work together to customer service. Under this employees about human enhance our natural resources pilot program in our Central behavior and how to create a and t'ie economy. Region, customers in each positive, memorable contact This cooperative effort community can call a regular with each customer. We stress between CPL, the Gulf Coast CPL area office telephone that employees need to Conservation Association and during business hours, or a conduct business on a genial the Texas Parks and Wildlife toll-free numbe.r at any time of as well as a professional level. Department produced the the day. The 800 number Managers and supenisors latest addition to the GCCA/ connects customers with a receive training to help them CPL Marine Development central office staffed by recognize their role as coaches Center. The center, which trained CPL employees. We and developers of people, and opened in 1982, concentrates expeer the new centralized to keep alive the philosophy on restoring threatened senice to help shorten our taught in the training program. gamefish populations through response time, and to cut Another new training tool, a research, and providing costs. If successful, the self-taught computer program, fingerlings for release in senice will be made available teaches our customer senice Texas' coastal waters. With in all four CPL regions. employees extensive facts the new 14,000-square-foot Company employees about CPL Because our facility, the center can produce worked safer during 1988. We clerks personify CPL to 20 million gamefish fingerlings reduced the number of lost- customers, they need to have i per year. CPL has provided 69 time accidents during the past answers to all kinds of acres for the development four years by 75E Our questions - everything from center. accident average was about how to read a meter to the Texas Governor Bill hal f that of the industry's. latest progress at STP. Clements said at the June 17 CPUs Safety group is dedication of the center, "This currently creating a database day marks a milestone - a to track trends in injuries so milestone not only in our that we can continue to reduce efforts to improve fishing in accidents in the future. We the Gulf, but to conserve and also have formalized our [
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- M.'sVT, V. Shockley, HI 0pw.7, a3 pN 49M d M;Ki heedent
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p ,; y* e < _ % .u ' , m .- -eu w 9 1L 1lW s .4M. L Borch<elt ay; ,w eM'M;@.M ,+' ,/?et < ,' , f WlW. Nrman, hesicint adChiel Execwe y 1;Richwd F(Verret n p . . ,'".Ay / 9 r ..: m>
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, E h Nident ud Chief Engin, ee,rin,g,yOffur v y M,ci+M.l . .Js d.sForrm, Cemral and, su th ht con,uon,0 4
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, i g~ y" "M,, c y, M/?p'* fJohn W. Crutchfieldi; ; i3., , s ' . m fre ident e" i) ch . ~.
y :%' J 4 i hesident ad owne4 John W. Cndchriend C t hyeny (a diversirx d enn-any). ; e N, E- , " ; Clayton'R" ', Kirk"rcq
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; Retiremnd MmMrl Lavaca-l' W . nh he'id"* ? " i e i Navidad Rwer Auttecity, Edna g IGerald kV, hid '
, f 1Ruinn M. Garclaf n , s s . p ,
' bCounder f ' ' [ s j bendem w prunW at severd Arms engaged ( 4Ea 2 J i :L: yl5 - const,ructen and lasj devebpmen.t,'
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Laredo SMI.'ivani -4; ? on a i
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c 3 ; s . , . F Ronald L Kellett 5 4 o =i
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1 wm' 4 D5 beht'A/ M .AilenCh [.M M, ' E Mary E. Hunt f/];, q i s t
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1 : 4E ve h P,eodem, c,mrd Posa ; - fTRANSFER AGENT /J , d
. ?ghf Cawnx Com CW D REQSTRAR OF STOCKk -- "
? NifE Lee Richards( ,i z jj ["' sw.1 #.. - e o . m y, >
m 1 Central and South West d , i -
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;r :Ngdg' ~ v1 ' LPremdent, Hygein
.B. E Teague V 'EM 4
w.WDalry, plqItatinges;VW v. s TServices,inct.' s #% O i! C" W R O. Bot 660164 h / Ad%r % c.p a
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7 m [&q:{j. CampwtyoCarpunOn,isG 3s s xb Praidtnt, Central heer andjighp . . . .
--gfy%a .:n Dallas y &
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'A4 e h Freenient and Chief !$gineennghE[eM f{d rmatid secunty hoMen eWWThi
' / ' ! .and customers of the Company and is not
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s < Central Power and Light Cornpuny.e 3.:
< i <Cerpua. >Christi A ' ' - ' 'iJ:b \
' J t ransmitted its connectiongy'w
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Cany security or offer to scll or rdid to buy ( 4 Richani H. Bremer ?esigned'an Vice;
',any ' Copies security.11.3 of Wa rerunti anme fl 1, A 6nad 9- ' $ ii a
statements induded therein and15e : e < LPraident and th,rectooA. pnm. . In.. a --
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2Secutides and Endiange Commission. Annual-o hr r. noad Chalker retired as twetor,3 ,
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August 3t;In ' N i Report
- 10 aD security on Form staiders 104 of se are Compais availabk A r gen copy will be mailed to any security holder.or ! .
[ Walter A. Ratcliff transferred toCentrat and n . other interested party upon written request
. feuthwast Services, inc_, effnctne 11 arch L 19H9. ' l to Walter A. Ratchft, Secramy.. P 0, Box , H
' He was rephced by C. Wayne Wre..; ;2U1,T* pus ;Christi, Textri1403414 . ' '
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Y e 'y.OJ dM b;W 1,,,%CENTRALPOWER AND.lJGIITCOMPANY f
SUMMARY
OF FINANCIAEAND OPERATING STATISTICS.- , *,M m _.
. A
.; w% k. 7g@. t S 3 88 N 198h
. 3 CIIANGEJ %.
-$N m M.M[ G;5 ) ,
$an$7fdEFINANCIAL STATISTICS (Thotuands)3 - 4 , Operating Revenuco i $ M 790,432 8 768,264 L M ' M@F J3 s S M O y' U ;' p. M i M rj
+ 1
@m ya G EMt ' ' ' /343,6291 " d~ . 317,307 1 ' i84% +
% "hg
@Q p' M,C y/ t Fueland Purchaud - s Other Operating Expeuses c < Powet W T 250,016 ? , 1220,2FL C13 n (,0 %.4,ap$d,,cd Lp.M, , y a TaxesiOtherThan FederalIncomeD , f 45,430 - i 38,177; t19n #@N@a A% a U y g ?$ , a 1 Q FederalIncomeTaxes1
) (42)J R % f $ y %
[Na0paating income s
< 128,979, 122,378 E 50,063 f , . . a
> 1142,435 a < d 04) W '
N$i Qgh' , 6 Net income @ > s , J 156,819 L M91,927 ? , att8)v, s
,7%9 3 hg[ % OPERATING STATISTICSJ ( '%'W
.14,617,583 14,028,160 y4( y g [~ [g 4
-() cg$ [
4 9 .Kaowatt-hour Sales Uhousands) - s ((Nffy h' ' WSystem Maxanum Demand (Kuowatts); .. 3,0.13,000 + , 2,881,000 , L5" W U dir W 539,896 4 4 hh L@[i Electric Customers Near.endr ,k:, CAverage KGowatt-hour Sales Per Residential Custoruer '
!10,925:
5d546i
. 10,369 ;5?
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? Average Residential Rate Per KGowatt-hour
' .5.97c l 5.9% .
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muso n y l REPORT:0F. MANAGEMENT . v , 1 n.
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' o/L > 3 TManagemei:t is responsible for the preparation, . . Arthur Andersen' & C6. was eng5ged to audinhed ' ' MMY n : integrity and objectivity of the financial statements of
*jm financial statements of the Company and issue a report &ysgyl M i Central Power and Light Company as well as all other : thereon. Their audit was saducted in accordance w'ith 3 7 @Mul f1 h i jirformationic6ntainedin this ArmualRepert. Tbei . genera!!y accepted auditing standards,LSuchstandsdsi
' require a revietofintemalcontrolslexam %d 7, ( , ,
ifinancial statements have been prepared in conformity. , , S fwith'generaDy accepted accounting principles applied on selected. transactions and other procedures sufficient to - 4' '
? a consistent basis and/ in some casesjeflect amoants ' provide reasonable assuduce that the 5JKfinasci MiM h"h "
i ( basbd on the best estimates and judgments of manage 4 ' statements neither areinisleading nor containindial : ' d j;Q[ i mentigiving due consideration to materiality. Financial errors. The Report ofIndependent Public Accountants % %~ R', e information contain'ed elsewhere in this Annual Report ' does not limit the responsibility of managemtut.for ' . d
' a%
- Lis bonsistent with that in the financial statements. information contained in the financial Atateniedts andU % 8" WQ.
M 2h " ,*o
^The Company maintaind an adequate system of .
finternal controls to provide reasonaWe assurance that '
~elsewhere in the Annual Report.:
4- AMM$ i A Q % M,
. .J transactions.are executed in accordance with
'W,2s
@' C ' M management's authodzation, that financial sta'tements . /f a
- / ( ~ " . . i > w WM Mg(*,,
V - ) are prepared in accordance with generaty accepted - iaccounting principles ~and that the assets of the ' Q/,} ' 5 g<
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.c U Shdde 1( , ,. 4 m , q
- Yk ,N CCompany are properly safeguarded. The system of .Linternal controls d*'# ""d is'ducumented, ***"*'W Mki evaluated
@? dp ~ by the Company'sjinternal auditors on a continuing L; ( basis? No internal, control system mi provide absolutec ^. M' pyh%(N h 3 h M[M N s D xlahsurance that errors and irregularities will .not occur -
'f.R.
QO@%_- g Edue to se inherent limitations of the effectiveness of R$bert L konge ' M a M',OP g]&ds lhiQ M intemal dontiols hoversr, management strives to L Executive Mee Presidentb {' q WM, ?1 J maintain a hilance; itcoptizing that the cost of shch a ' w X .1 - *4
@ system:should not exseed W benefits derivd NC 1 1~
Sea.M M br'b + M ^, MYj l Q% p 'MC ~l , ' 4 inaterial juemal control weaknesses have been
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- 3 )reportedtomanagement, Gerald w.11 der 7*y > /j< %h f :m ., Controner
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,y; REPORT OF AUDIT COMMITTEE '-{ ,
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?The Audit Committee of the Board of Directors is # independent public accountants die overall scope hab 7 composed of seven outside direc%The members of i ' . sprific plans for their respective audits. The G . N
." U the Au&t Committee are: IL C. Petry, Jn; Chairman,( . 3 g . Committee also discusses the Company's' financial C P L,k ^
, j John W. Crutchfield, Ruben M; Garcia,'W,.R. Farquhar; My statements and thesdequacy of internal controls 2The$ ,
; Jr., Robert A. McADen, Ronald L. Kelled and 11. I.eef .v:M Committee meets regularly.with the Company's internalf M ,
. Richards. The Committee held three meetings ! '" N auditors and independent public accountants; without - ;M
' V c management present/to discuss the results of their ' 's
-- during 1988.- f .
The Audit Committee oversee:S the Company's ..
' financial reporting process on behalf of the Board of L
!;L taudits, their evaluatiotis ofinternal controls, and the t T 1overallquality of the Company's financialreportirig.The : $ m ' y > gg$i
- Directors. In fulfilling its responsibility, the Conraittee : meetings are designed to facilitate any private {.? 'aM' ^
recomtnends to the Board of Directors, subject to '. $geommunication with the Committee desired t
+9', Gby q
. sharehokler approval, the selection of the Compcny's, ; internal auditors or independent public accountantsSS 3 i;!
independent publicaccountants. The Audit Committee: a- ' "f , i'
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- k W ,,Hn E discusses %ith the intemal auditors and the s bi m o
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- u e ~ J H. C. Petry. Jr.t ' A
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.a A a REPORT OF INDEPENDENT - A A 4 o ,
PUBLIC ACCOUNTANTS . 1 & &' ' N < -ca
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y >44 w To the Stockholders and Texamming, on a test basis, eside'nce suppo ' Board of Directors of . amounts and disclosures in the financial statements. An' Central Power and Light Company: iudit also includes assessing the adounting principles 1 ky:2 " @ We have audited the accompanying balance sheet's used and significant esumates made by. management, as? - jy J and statements of capitdzation of Central Powes and weH as evaluating the overall financial statementy 3' 'i'@ Light Company (a Texas corporatia't and wholly owned presentation. ye beheve that our audits propa 3 . g subsidiary of Central and South West Corporation) as of . reasonabh basis fx ow opnonc 3 $ j p , gg~ g% '<
- In om opinion $e financial statements referred to N '1 December 31,1988 and 1987, and the related ,
.abow pasent fairly, i;n all material resphets,' the y A , ' y' statements of income, retained eamings and cash flows?
.= financial position of Central Power and Light CompanyC for each of the three years in the period endid December 31,1988. These financial statements are the as f December 31i1988 and 1987, and the msults of g ,
e responsibihty of the Company's management. Our its operations and its cash flows for each of th threeby y responsibility is to express an opinion on these financial C "I nu,ty wn generaHy years ya the paiod ended Denmber 3y19 accepted statements based on our audits. We canducte<l ouaudits in accordance with generaDy ' prmciples.
+
ingg gh yqyg gb g. j accepted auditmg standards. Those standrds require : [, . 4 [g } $*, that we plan and perform the audit to obtain reasonable . w.m ,. ~1 :n DaHas, Texas i - 1 T. Arthur Andersen & Co? , e assurance about whether the financial statenwnts are free of material misstatement. An audit indudes Februaky 23,1989; y
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