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Dountas R. Gipson vee fees, dent N.ceat Operatons e
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)SI[Oll Fermi 2 Ecison EdEfiFS2 ra.
April 20, 1993 NRC-93-0046 U. S. Nuclcar Regulatory Commission Attention: Document Control Desk Washington, D. C.
20555
Reference:
Fermi 2 NRC Docket No. f0-341 NRC License Nr,. NPF-43
Subject:
Annual Financ?al Report Pursuant to 10CFR50.71(b), please find attached one copy of the 1992 Annual Financial Report for the Detroit Edison Company.
If you should have any questions regarding this report, please contact Elizabeth Hare at (313) 586-1427.
Sincerely, J
Enclosure cc:
T. G. Colburn w/ encl.
A. B. Davis w/ encl.
W. J. Kropp w/ encl.
M. P. Phillips w/ encl.
i Region III b 39 4 260035 l
9304260038 921231 i
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146,998,485 146,945,932 146,SSS.SO9 Dividends Ihlared per Share
$1.98
$ 1.SS
$ 1.~8 5.3 5.6 Gross Utility Plant (le 7'luwun./11 512,402,581
$ 11.997,S62 511,749,142 3.4 2.1 Capitalization flu Thwundo
$7,421,366
$7,419,073 57,88S.634 (6.0)
System Sales of Electricity (iu Lafillium) 40,697 41,019 40,501 (0.9) 1.3 System Capability at Time of Peak (31u">
10,262 10,121 9,953 1.4 1.7 System Peak Demand (AIW'1 8,704 S,9so 9,032 (3.1 )
(0.6)
Electric Customers at Year End 1,950,000 1,942,(X)O 1,927,000 0.4 0.8 ha unrJ partna nhip has mans nuanings. hat anmmon to all
_.r isthis: a par turnhip is the sharing of a
tin i< spon>ihilitic s and re u ards of a relationship.
At I)< trnit i dison. u a ha licur both our hu u%ss and the pinsperit_s and grnu-th of i orn munitie > rre se rs< J<pa nd on the giac
'aru/ tak that distrugnish suurssfulpartrocr-shipt u e harv di utloped parturnhips u ith 3
ou r a u stamen. < ornmu nitics. supplien, sharrhedden. gourrumruts and regularon.
< mplou > and the ens irnument ut all sharx.
\\ua h parturnhips lead not onl, to sharing respoupihilttics qnd re uards, but to mutual O
u nden tanding a < or m nront fur su< ccs>.
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s Percent Change 1992
-i991 1990 92 vs. 91 91 vs. 90 -
Operating Revenues Ilu T/muundo 53,558,143 53,591.537
$3,576,.'S 1 (0.9) 0.4 Earnings for Common Stock Ile 7lua. undo 5557,549
$535,205
$479,280 4.2 1 1.-
Earnings per Common Share 53.79
$3.61
$3.26 4.1 11.7 Common Shares Outstanding (Arage) 146,998,485 146,915,932 146,8S8,809 e
Dividends Declared per Share SI.98
$1.88 51.78 5.3 5.6 Gross Utility Plant (In T/u,uundo S 12,402,58 i S11.997.862 S11,-'49,142 3.4 2.1 Capitalization (lu T/muvudo 57,421,366
$7,419,073 57,888,634 (6.0)
System Sales of Electricity II Wh-Alillious) 40,697 41,049 40,501 (0.9) 1.3 System Capabili y at Time of Peak (Af rs 10,262 10,121 9,953 1.4 1.7 t
System Peak Dan.u d (A!W) 8.704 S,9SO 9,032 (3.1)
(0.6)
Electric Customers at Year End 1,950.000 1,942,000 1,927,000 0.4 0.8 4
h< urord partm rship has
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ma.us mentnings. hut namnion to all is this: a parturrship is tha sharing of the ursponsibilitie s and reu ards of a y
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, sbipv u c hase desrloped partnership > u itb t H sta94/tTs, 4 oulniHnitic>. su{rfkit r>. y oui sharcbrJde r >. gourrnmeut> aud regularors.
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P R 0 FI L E O F D E T R 0 I T.
ED I S 0 N I
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Detroit Edison, serving some 1.9 million custom-cost reduction, lower Emi charges and better asset ers in 7,600 square miles of Southeastern Mithigan, is utilization. Among the means of accomplishing these i
the largest investor-owned electric is redirecting the internal corporate utiliry in the state. The company,
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culture to one focus - on employes I
like many of its largest customers -
4 teaming together to provide l
most of them automotive and superior customer value.
automotive-related industries and
.1 At your service steel producers -is making great i
p,.irmnierilyri@iriid:
Investor Relations strides toward positioning :tself for i,
M (313)237-8030 the more competitive marketplace l
For shanh<Dm:
of the future.
d Shareholder Services Growth of sales and revenues (800)551-5009 Detroit Edison into the new century is expated to 2000 Second Avenue be moderate, with earr.ings growth Detroit, Michigan 48226 linked to aggressive marketing and Y E A R E N D H I G H L i G H T S l
1992 -
1991-1990.-
- Customers Year-End. Sales (MWh) 90 of Sales Per Share Data
Residential 1 --,914 11,309,0(r 25.8 Slarket price 32~
3n 2x,
Commercial 167.099 S.668,326 19.-'
Industrial 2 ~94 18,543,334 42.2 Earnings
- 53. 9
$3 6i
$3.2(,
Ot her*
1,992 2,l'6,096 5.0 Disidends paid 51.955 51.855
- 51. 55 Total System 1,949,799 40,696, 63 Other Data:
Intercobection 3.204,357
.3 Return on equity 18.67 19.5'3 191c; Total Sales 43,901,120 Payout ratio 52'i 51G 5 j':;
l Price' earnings ratio 8 44 9.55 S.6-s f,,,4 < m;,,,, 2
,m, jjn,, f,,,p..y 1
l Operating Data:
R-bt ratings have remained constant throughout 1992, l
Employes 9.153 9,35-9,(>69 with ratings as follows at year-end 1992:
Fuel cost <c MBru) 150 5 153.3 155.s Standard.N Poor's Corp.: HHH+
licat rate ibru kWh) 9,990 9.9so 9,940 M"'d/s invesn>rs Scrm e: A3 l
Capability (MW) 10,410 10,26-10.130 l
t C
0 N
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letter to Shareholders 2
Governments lo Operations Review 5
Employes 11 Customers 5
Environment 12
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Communities 7
Suppliers 14 Sharehoiaers 9
rinanciai xepert 25 1
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he days when an ekctric utility - or any other shareholders' equity rose to 42 percent of total 4
j business enterprise, for that matter - could capitalization, fmm 38.4 percent in 1991 and display the independence and individualism once 32.8 percent in 1990.
associated with successful business people have long since passed, ifimleed thev ever existed. In last year we noted in this space that we op-3 today's society every business his an arrav ofcon_
posed many of the changes to utility regulation J
stituencies, or stakeholders, with such critical inter-then under consideration by the United States ests in its activities that they simply cannot be ig_
Congress. At the same time, we said we beliend 1
nored. In fact, we are convinced that relationships in the inevitability of many of those changes and with these constituencies must extend well tryond were preparing ourselves to operate successfuHy merelv heeding their calls for greater sensitivity, under them - if possible even leveraging our 4
better service,' increased environmental responsibil_
st rengths to benefit from them. That legislation j
i ity, improud slureholder value, more empkive
- the Energy Policy Act - was passed in late l
involvemem in workplace decisions and respon-1992. While we were not among its proponents, 2
sible community leadership. We believe we must we are gratified that it contains many of the pro.
j establish partnerships with them, based on trust, visions we insisted were essential to protect our 4
smaller customers and our shareholders fmm understanding and a willingness to collaborate on mutually acceptable courses of action.
being seriously hurt by its application. These protections were included thanks in large part to i
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While some might view this response as merely the willingness of key members of Congress, 1
conciliatory to changing economic and social gmls, including many from Michigan, to cooperate in we believe it represents good business.
the exchange ofinformation that we felt would 1
be helpful in crafting the kgislation. This is one
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This repon descn.bes the makeup - and conse-.
example of the kinds of pannerships that we are j
quences - of some of the partnerships Detmit Edi-t-mploving to help ensure the future well-being
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son nurtured dunng 1992. They are relationships of Detroit Edison.
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founded on mutual interests and goodwill which
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helped produce another year of fmancial improve-Not that we believe the federal legislation is ment as well as significant progress toward excel-perfect. We do not. In its electric utility provi-i lence in operations in a period of growing chal-sions, it opens the power-generation side of our lenges to our business They are partnerships we business to all comers - utilities and non-utilities 4
consider essential to our continued well-being, and alike - regardless of their home bases. In the pro-l we are committed to both extending and intensify-cess, non-utility generators may derive cenain ing them.
advantages that utilities do not have. The legisla-tion thus continues a movement toward encour-The benefits from these pannerships helped aging alternatives to the traditional vertical-inte-i produce another excellent year for Detroit Edison gration structure of electric utilities.
in 1992. Although system sales of 40.7 million 4
]
megawatthours (MWh) were down 0.9 percent The legislation also authorizes the Federal j
from the 41.0 million MWh in 1991 and operat-Energy Regulatory Commission (FERC) to order ing revenues of $3.56 billion were down 0.9 per-utilities such as ours to transmit over their lines cent from the $3.59 billion in 1991, we recorded ekctricity bought by other utilities from other record earnings for common stock of $557.5 mil-pr xlucers - even though such orders could lion - up 4.2 percent from the $535.2 million in threaten service reliability for the transmitting
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1991 - and record earnings per share of $3.79 - up utility's customers. We continue to believe that j
4.1 percent from the $3.64 earned in 1991. We the FERC should consider reliability and the
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also raised the dividend for the third consnutive impact on existing customers in issuing its trans-year (and a fourth straight year in early 1993) and mission orders and are hopeful that this sensitiv-ftmher strengthened our balance sheet as common icy will be reflected in these orders.
2 ne IMnc idnon 190 AnmrM Erpen
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The new Energy Policy Act ing superior customer value to also has its positive side. The meet potential competition was power-generation alternati <es seen as the only way we could J
that it encourages could be ben-maintain and increase share-y eficial in the long term by giv-holder value. We have made I
ing us additional lower-cost signi6 cant progress in meeting l
power-supply options without those objectives while oper-
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the power plant ins estments and ating since, January 1989 I
risks of the past.
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under a negotiated moratorium 1
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ap on rate changes. Earnings k
But while Congress included FM
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from our increased ef6ciency -
prmuhngs now under conswer-
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f and lower costs have en important protections in the federal legislation, unfortunately to rebuild our company's Gnancial strength, as noted in previous ation by the Stichigan Public
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reports.
Service Commission GIPSC) could essentially remove some of Now our customers have be-those protections in Alichigan, gun to share in those savings. We l
making our state the testing lowered rates effective, January 1
ground for the most far-reaching 1993 by an annual rate of about and one-sideJ clectric utility
$170 million, or 5 percent. The competition in the United States. As this report rate settlement, a win-win situation negotiated is written, the AIPSC has schedukd hearings to with customer representatives and state of6cials, determine appropriate rules and rates under was an ahernative to the traditional courtroom-which it could order Alichigan's major electric style contesud rate case ultimately decided by state utilities - Detroit Edison and Consumers Power utility commissioners. It was another example of Company - to transmit electricity purchased by doing business by partnership. In a separate case their customers from other electricity producers, we are seeking a modest rate increase in 1994 including producers outside the state of Alichi-which, if approved, will partially offset the 1993 gan. This of course could adversely affect employ-r duction.
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ment, the tax base and other factors important to our area's economic health.
The newly legislated and regulated competitive threats we have discussed actually are only the Requiring transmission of ekttricity to an-most recent in a series of pro-cornpetition moves other utility is known as num/and n Moa/c tr.m3-by government and large electricity users dating viiviw a ms; requiring transmission to an end-back to the Public Utilities Regulatory Policy Act user - a utility customer - is known as num/and
{ of 1978. Facing these threats, we have managed tc nod transvziuion a.mf. The potential threat to identify the needs ofour customers and the bene 6ts Detroit Edison if our customers suddenly are offered them by wmpetitors and - largely in part-given the option of shopping for electricity is nership with those customers - have found innova-obvious - particularly in a senice area suc h as tive ways to satisfy them. A few examples of these l ours that indudes many large industrial custom-successful partnerships are contained in this report.
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ers with annual electric bills running in the tens By contrast, during the last decade other utilities i
j of millions ofdollars. It was with this kind of have hist significant portions of their customer i
i competitive threat in mind that we intensi6ed bases to cogeneration and self-generation threats our etTorts more than 6te years ago to reduce our u hich they faikd to meet. So, the concept of I
l costs and impros e our performanc e in every area partnering, like the competition that has helped of the company. 31oreover, our focus on deliver-inspire it, is not new to us. What is new are the i
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many ways creative Detroit Edi-the necessary credentials and skills for providing unfamiliar son employes are finding, virtu-r j
ally daily, to partner with custom-products or services in an unfa-miliar market environment.
i ers and, as this report documents.
with stakeholders of all kinds.
Fortunately we have not been L
Moreover, they are constantly among those companies which, creating new partnerships with with all good intentions and confidence in their abilities, each other-building internal
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teamwork -in their continuing moved too forcefully into diversification and ultimately search for more effective ways of achieving our company's goals.
sustained large kisses and/or write-offs.
l In addition tc finding ways to i
retain our businen ;u the face of At the same time, in success-increasing competition, we have fully meeting an increasing very deliberately assessed the array ofcompetitive threats, we progress, the successes and the continue to acquire new skills failures of other energy companies and attitudes. We believe these that have sought aggressively to skills can now be leveraged, l
increase their revenues and eam-together with properly built ings outside their traditional partnerships, into new invest-business. To be totally realistic, even if we retain all ment opportunities without necessarily diverting of our business, the reduced margins forced by our attention from our primary responsibility, i
competition, combined with the slow growth of where it is needed today perhaps as never before.
]
the Southeastern Michigan market, will limit -
l and could begin to erode - our earnings potential.
Even as we change, however, we remain firm in our basic mission - to increase shareholder f
One option that has helped in this regard is our value by providing superior customer value. And marketing partnership with NERCO, a Western while we cannot predict with certainty what will coal supplier, which has been increasingly profit-be achieved in the years to come, we believe the able since it began in 19S0. Our coal transship-skills that have helped us deliver so well on that i
ment facility in Superior, Wis., and our knowkdge commitment in the recent past will stand our and respected status in the coal business have shareholders and customers in equally good stead proven to be valuable - and very leverageable -
in the years to come.
assets.
Yet the report card on broader diversification
// M ugh effons by utilities - particularly those that have
/
l gone farther afield - has not been very positive, and frequently has shown significant negative im-Larry G. Garberding 1
E' pact on the success of the basic business.
,n i an er We at Detroit Edison are committed, first and foremost, to running our core business exception-j ally well. We have deliberately adopted a "go slow" g [M/m j
approach to significant deviations; we have j
watched as many other companies, including utili-John E. Lobbia ties, have leamed that apparent marketplace oppor-Chairman of the Board, President runities are not necessarily profitable if you lack and Chief Executive Officer i
February 22,1993 l
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The Detron LJmm W)2 A&ual Krmft
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$$bfh I't/r/HerShll15 trilh CllSluillerS lcticllO "lis e better ch ctrically.'
51Hjfrot c(l CHSf01Her SillisfitCllOU -
Apphance manufaaurers are promoting more en-ergy-effcient maior home apphances, which help grell/er fillNe[17## tl C//S/0/#cT-customers control energy costs, aid Ihe environment Or/en/c(l /n/x O[Serr/ref </nrl hene[f/S and help ekttric utilities avoid building new power ut more up in>&eher efIkiency appliances gene plants. Ikrause hi l
-itUclit heil llhierlOCdleCOHO1HJ. A custamen often selea less expeni S/gu O[dn c((cClire fiar/ucrShi/, is <<
site, less efiicient ones. So Detroit Edison is offering i
fr/ U -tr/ M reS u [/.
builders and buyers of electrically heated homes inten-
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tives to buy more etiitient apphances, lighting, cooling Detroit Edison put its expertise to work and created systenn and insulation.
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just such a win-win situation with a major customer.
The pmgram is one of a dozen pilot conservation i
General Motors Cor;t (GAD was considering rept 'ing pmgrams intnduced recently to help customers control l l
an aging, inetiicient steam-pnducing pmerhouse a: its energy costs and thereby get greater value - part of a Saginaw Division-Detroit auto components complex
$13-million,1992 energy conservation pac kage ap-with a new facility that would generate both steam and provtd by the Mic higan Public Service Commission electricity. Detroit Edison gave GM an ahernative idea (MPSC).
- power the complex with steam from a mcdern though underunlized powerhouse at GM s I f amtramt k inns imm d&m is Mdig de l
Assembly plant a mile-and-a-half awav. This would gx>n aho gm a. nim look at an ahtnc. aun;m.uq e
lower energy expnses for both GM tacih..t es, thus SMART HOUSE, the result u a partnersh,ip or Detroit i
rdm WhPan hmim hbh Tromd helping to kttp the automaker companve.
& hildm hiadef hh-adi@h-GM agntd. The result: instead of waiting years for 5,000-square-foot demonstration home-the new facility, GM had a steam supply line operating the first ofits kind in the Midwest -
l l
l built, owns and operates the new steam lineaontinues in 1992 - on time and within budget. Detroit Edison was featund at the 1992 Spring i
Homearama.a regional show-to sell GM electricity for both plants and, in addition, case of new homes. As a sells low-sulfur Western aul to fuel the Hamtramck result of ktrn in-powerhouse.
ten st in this a
i Later this spring, another pipeline - also born of a j new tecgi-partnership - will delis er a useful comm<dity to
) nohigy, i
i Detroit Edison, while helping another customer prop-l erly rid itselfoia " waste pnduct" at little or no cost.
(
Great Ltkes Sutl, a division of National Sarl Corp.,
\\
l faced a problem: how to cost-ediciently dispose of 16 million cubic feet daily ofcoke-oven gas, a by-prod-3 uct ofcoke pnduction required to make suti.
Meanwhile, Detroit Edison, which burns coal at its nearby River Rouge Power Plant, was koking for ways to cut its fuel costs.
The result - again, win-win, with an extra " win" added for the environment. The surl maker will sell 6
i
! the waste pas to Detroit Edison, gaining revenue as it 7,^
9 l
! disposes of the gas in an environmentally accept-j
) able manner. Detroit Edison will gain a fuel supplement costing less than aul on a heat-s
)
equivalent basis.
l l
A trial partnership between Detroit a
l Edison and area home builders is giving new meaning to an old ekctric utility slogan, 1
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Tb Dme Lim Uh2 Mmual IW.n 5
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I 01 many SMART IIOUSE features now are available cost electric capacity to large manufacturing customers in Southeastern Michigan.
who are willing to accept possible service interruptions Another conservation partnership will help during periods of high ela tricity demand.
schools in Ann Arbor, Mich. and the The rate was designal with the help of business cus-Chippewa Valley district in Mount romers whose own abilities to remain competitive were Clemens, Mich. save a total of being threatened, and is widely supported by state oG-g nearly $ 100,000 a year in en-cials. This rate, an example of customer-oriented ergy costs. Both districts, facing pricing driven by customer nads, will help make the cha!!enges of operating Southeastem Michigan more attractive to new busi-schools in right economic times, are in-nesses and jobs. It also will help the company retain stalling advanced technology air condi-participating customers am.id the increasing array of tionmg systems which freeze water over-energy options available to them.
night - when both electric rates and On a larger scale, Detroit Edison Elai plans with demand are lower-and extract cool air the tollowing day usmg cool storage, de MPSC in 1992 for an enenT management pro-j gram to help hold down customers' energy costs,
- echnohipy. Detroit Edison provided pmvide price stability in the future and, at the same mcenoves to the schools to mstall time, reduce the need to build new power plants. This the high-te h systems, and will demand-side management (DSM) program is a key el-i monitor the results ihr four years ement of the com;uny's Integrated Resource Plan, starting this summer. He com-dia In s out ihe most etTective and least costh-
"8'"""*"
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n ilar st n t ra ls and businesses.
The prop (ud DSM plan, which would cost $75 l
million for 199 i-1998, encourages consen ation and j
l Partnerships with customers are emciency through energy audits, off-pak usage rates, more than developmg spatic pro-iM i ntives and programs custom-designed to grams with speci6c customers. Detroit meet spsi6c customers' needs.
j Edison's partnerships with customers be-gin with ful611ing a basic commitment to Meanwhile, the company is adding and renovating
.d/ customers - provide good senic e at service centers, combining Unes engineering and con-reasonable prices. Steps are being taken to struction groups in those facilities into teams for the ensure this commitment is met.
Erst time. Consolidation of these interdependent func-nunhancn coordination, improves response to t
C Customers are paying less for their, customer nnds, sytds new service instalianor 4nd Detroit Edison electric senice in 1993 -
l thanks to a rate reduction of about 51 0 I
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million, or 5 percent. The savings are Other steps to improve service in 1992 - part of the N
jk largely the result oflower fuel msts, passed customer partnership - includni checking nearly l
,y along to customers through a fuel adjust-7,000 miles ofelectric lines with the help ofinfrared ment settlement reachal among the tahnology and improving them where needed, testing f
company, representatives of customers and 82,000 wood poles for soundness and replacing them f'
/
state of6cials, including the staff of the as necessary, and trimming 800,000 trees to clear over-MPSC. The rate reduction also re6ects head lines. These improvements - with more to come d elimination of an expense surcharge in-
- already have resulted in a 39-percent decrease in out-l cluded in a 1988 negotiatal rate settle-age frajuency and a 65-percent decrease in outage ment. The reduction saves the averace resi-duration, compared with the past three years. In all, dential customer $2.16 a month - nearly about 75 percent of the company's $416 million in
$26 a year, based on average use of 500 1992 capital expenditures have gone toward improv-kilowarthours per month. The average resi-ing the wmpany's distribution system.
dential customer now pays S 16.58 monthly.
In addition, Detroit Edison installed a new interac-The company received MPSC approval tive telephone system with a new toll-free "800" for its Industrial Interruptible Rate, which number, and now can handle up to 40,000 calls per otters a total of 400 megawatts of nducal-l 6
n,tw % mewnamn l
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hour during emergencies - more Tlxsc and other improvements than 16 times the capacity of the F
in 1992 helped the o>mjuny deliver f 3rmer system. The system is lo-
.f on its pannerships with customers -
cared in a newir renovand
. k lowest ;xissible cost.
1 to provide improud service at the 130.OOO-square-foot facility in sub-urban South 6 eld,31nh..
consolidating telephone operations
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and ;x rsonnel inlm the com;uny's W
six geographic dmsmns. W ith the y
new system and -10 percent more (ustomer representatius busy sig-PctrliterShi!)S let/h the o
I, nals have been sirtualh eliminatal,
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facilitating immtdiate customer ac-k g pgfgg7 ff fSg cess and sptiding sen ke rcsuntion lcticlCrShl)),filittliciti!
following storms.
Hehind these many improse-Si/}}}} Ort Or}}erSOllcll ments are many less visible but j,,,ylpe,,,ey,j _ j,,7j,rype eqtully dramanc aaomplishments that hase helptd to nduce costs -
/bf (//ftt///J [ [ [C till([
another element of the company's crefffe gf /,c/fer [yffgjffeS3 partnership with customers.
CitrilT/11//lellt.
Detroit Edison ranked among the nation's 10 most ef6cient utilities in electric gen-W'ith this two-track benent in mind. Detroit Edison cration plants 6>r the fourth consecutive year. and the does not view its community parmerships as strictiv com;unis Stonroe Power Plant Unit 3 was the ninth philanthropy; it views them as gml business. Pantler-most ef6cient large generating unit. O.verall, the 20-ships benefit education.deliverv of health and human l million megawarthours pnduad by 31onnc's four sen ices, safety awareness. cultural institutions and the units marked the third-highest pnduction lesel in the community's overall quality oflife.
countrv in 1991 (the most recent data available), and was second-highest among aul-Gred plants.
Impros ing education in knal schools is a top priority for Detroit Edison. A better educand community pro-As energy demands have grown, the TO-year old vides the company and other area businesses with more 31arysville Pow er Plant was returned to sen ice in 1992 pnductive employes, a larger and more af6uent mar-at a cost of SS.5 million. It had last generaad power ket, and fewer social problems.
u>mmercially in 1988, and was placal in reserve when the Fermi 2 plant was aimplead in that year. 31arvs_
Detroit Edison lus pannerships with 29 schools, ville is the Grst plant brought out of resene under the many through the grass-nxits initiative of employes in uimpany's long-rance Integrand Resource Plan.
l P"" er plants, servic e centers and of6ces. The corner-
~
l stone partnership is eti' cad with the Detroit Public e
Also. Fermi 2 (ontinued its move toward top perfor-Schmis thnsuch the Detroit Com;uct,a maior effort mance among U.S. nuclear power plants in 1992. In conceind bv business and uimmunity leaders in the November, the plant u>mpleted its third refueling out-late 19 sos and a>or linated by the Greater Detroit age in 5' days,its fastest to date and third fastest Chamber of Commerce.
among all U.S. luling water reactor refuelings in 1992. Despite this outage and several shoner repair Under the Compact, the com;uny provides its pan-outages, the plant achiend a 79-;trcent capatity factor nership sc hml - Taft 31iddle Sc hmi - with an in 1992 --its best ever.
agreed upon level of funding, as u ell as niuipment and supplies, classroom speakers, mentors and tutors for in-Fermi 2 also receiud its best-ever Systematic Assess-l ment ofl xensee Performance " report card" from the dividual students, and a reliable panner to lean on.
Nuclear Regulatorv Gimmission m 1992, the third in 1989. Detroit Edison huame the nrst company to
~
consecutive year ofimproud performanc e 63r the plant.
sign Com;uct agreement as a business junner and Jurtnership-school undenvriter. Inspind by the sut-l h: omw I hn 19 d % iu! Kr pon 7
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cesses, the company is working to chapters where they live and work.
spread the Compact appnuch In 1992, employe and Detroit Edi-throughout the state.
S son Foundation gifts to United Way y
totaled nearly $2.5 million. Gifts i
y Among the more unusual and g
successful ducation procrams is an 9
per employe r nkW h among
~t Michigan utihues.
annual series ofgrants fr$m the De-2 l
troit Edison Foundation to Detroit Edison employes are i
kindergarten through 12th grade partners in numerous etTorts to ad-l teachets. Through the grants, teach-dress rising health-care costs and ers develop innovative programs to access-to-care issues, participating in teach students about the environ-the Greater-Detroit Area Health ment and thc nwd to protect it.
Council, the Washtenaw County i
Area Employer's Health-Care Coali-i At the college les.el, Detroit Edi-tion, the North Thumb Area j
son luundation financial support is t*
Health-Care Coalition, the Eco-tocused primarily, but not entirely, nomic Alliance For Michigan, and j
on science and engmeenng programs the Greater Detroit Chamber of at colleges and universines m Michi-t Commerce,s Health-Care Advisory I
gan. The Foundation gave 5400,(XX)
Committee. John E. Iobbia, chair-i to hieher education in 1992,includ-m n nd chiefexecutive officer, ine matching employe contributions.
chairs the Detmit Renaissance These and similar etTorts camed Health-Care Committee, composed I
the company the 1992 Business, labor and Industry of chief executive officers from area companies. Thev Award from the Michigan Education Association.
are assisting the Greater Detroit Area Health Council, l
Kwniv aware of the hazard of careless contact with an organization of more than 90 members, including electric wires and other ajuipment, Detroit Edison also business, labor, health-care providers, insurers, civic brings safety programs to area schools. These reached gmups and governmental agencies, working to im-8 some 20,000 students in 1992, and nearlv 280.000 in prove the quality of health care and slo v rising costs.
{
the past decade. Similar information is delivered to the As economic conditions ende public funding for the entire community through a constant stream of mass ans and cultural activities, Detroit Edison and the De-j media information. In a 1992 partnership initiated with trait Edison Foundation have steppd up their support.
l Elias Brothers' " Big Boy" restaurants, more than aiding some 43 cultural organizations and activities in f
20,000 children pledged to obey Detroit Edison's safety Southeastern Michigan. Both the Foundation and Se-rules and, in tum, earned big rewards - free ice cream nior Vice President and General Counsel,12cn S.
sundaes at their neighborhood Big Boy restaurants.
Cohan, were among nine individuals and organizations A partnership with communities also means helping honored at the 1992 Govemor's Arts Awards event, l
people in need. With those nwds growing, Detroit Edi-sponsored by the Concerned Citizens for the Arts in I
son increased direct assistance in 1992 with a new 54.6 Michigan.
million energy management program to help low-in-The Detroit Edison Foundation literally inflated its i
come customers use energy wisely, thereby reducing role in the 1992 Michigan Thanksgiving Day Parade their electric bills and avoiding service shutotTs. The in Detroit by providing a new entry - a 20-foot-tall company extended its grants program by pledging uP light-bulb-shaped balhion namd "Freddy Filamentl' to $1 million to match customer donations to help l
homeless shelters pay winter electric bills. Also,in re-pany w as a local sponsor of Nan.onal Night c
Out, bilk 11 as " America's Night Out Against Cnme.
sponse to the company's app als, thousands of j
customers joined the partnership by giving nearly $1.2 The company,s invohement included a lighting com-I million to The Heat and Warmth Fund (THAW) to P""'.i n among police precincts,empi ye c r wmdow etching and a kickoff parade m Detroit. Iur its 1991 help low-income households pay winter utility bills _
l all matched bv the Detroit Edison Foundatiori.
- ".wdvement, Detroit Edison camed the harional Elec-a rnc Utility Award for Michigan from the Nanonal For many years, Detroit Edison employes have pro-Association of Town Watch.
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vidd leadership-level giving to the United Way 1
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In all, cash contributions by the company, its em-In support ofits partnership with shareholders, the ployes and the Detroit Edison Foundation in 1992 company maintains its accessibility to debt and equity totaled more than $5.5 million - funds that will im-markets by working actively with the financial com-pmve communities, strengthen partnerships and help munity. This involves a comprehensive program to assure Detroit Edison of better-educated employes, provide security analysts and other financial profession-more disceming and safety-conscious customers, com-als and decision-makers with accurate and timely munities better able to care for their needy, and a more information about the company, its programs, progress vibrant economic envimnment.
and plans. The etTott helps maintain high visibility for the company and a quality flow ofinformation, which g
'E has earned the company respect on Wall Start - to the 7
ultimate benefit ofshareholders.
)-
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g Key to the company's financial performance is its Par /nerships u //h shareholders are overriainy commitment to improve sharehoiact vaiue best shou'n hy /he con [idence, /oya//y by providing superior customer value. Whether im-proving the reliability of service, providing special andtrus/ o[Shatcho/ders, /nos/ o[
incentive rates for inchistries or helping customers get n 'ho/n hold their stoch[or [ong periods, the most for their energy dollars, putting customen The coin />aiO' u/> holds //sI> art ofthe first means m re na better business and growth for the kral economy and the company.
halgain by doing ils bes/ /0 increase Some 40 percent of the com
's shareMders see shareho[ der ra[He.
both sides of this equation - they also are antunm.
Detroit Edison common stock has provided a strong return on investment over the past five years. Dividends per share incnrased from $1.68 in 1989 to an indicated annual rate of $1.98 in 1992 - an increase of nearly 18 percent in three years. While total return (price plus dividends) was flat in 1992, it averaged thirty percent per year over the last five years.
Detroit Edison's commitment to shareholden in-cludes strengthening its capital base. Keeping expenses down and redeeming bonds early helped increase common shareholders' equity to 42 percent of capitalization in 1992, up from 38.4 percent in 1991 and 32.8 percent in 1990. This has led to improved bond ratings and lower interest expense.
Thmugh redemptions and refinancings of bonds, Detroit Edison has achieved a reduc-tion in its average interest rate of1 percent - from 9.6 percent in 1988 to 8.6 percent at the end of 1992. This interest rate reduction and the reduced long-b term debt has saved more than
$100 milhon in mterest costs smce 1990 and will save about $100 mil-lion annually beginning in 1993, compared with 1990.
TFs Ikrron Ldaan 1992 Annual Re;mrt 9
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energy sourt e opt ions available to large customers.
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The hmpany playal a key coordinating role in the Ekctnc Reliability Coalition, a group of more than l'ar/Hersb/ps N'///)gorerun/en/s -
40 ekttric utilities sharing these common concerns.
feder<d, sta/c andloca/- help create In 1992 Detroit Edison developed its second Inte-
'po[lcles dud bus /Hess eur/TDunle#/s grated Resource Plan (IRP), the company's blueprint for mating customen' encrpy nenls over the next 15 uhich mege the best interests ofthe years. The 1RP evaluans not only the nen! 6>r addi-com!>an), its customers andshare-
" i"" P""" r" 'd "" '""' h"' h""" "h '""' '"'
methods for meetmg demand such as power purthases holders. Wh//e many regn/a/my from other generatJrs, mnsenution programs and spe-
/nYresses are adiersarialin theory.
<ial rates to encouraye otr-peak usage. The joint goal is Gnding the least costly mix of resources to meet cus-bc//cr Tc3uus are ob/a/ned N' Dell tomerh energy needs in a reliable manner. Updates are people on a// sides uverk /oumd l shared with the MPSC every nvo years.
common so[#/[ons.
In its IRP, the com;uny has carefully laid out plans for mating these future energy needs etlis tively while The development of public polig and the supporting considering all intensts, intluding ihe shifting trends legislation and regulations can be a roller-cutster process of public p>1 icy and,(ertainly, environmental protec-w hich, at the end of the course,levelizes - in the best of rion. The company's plans tbrough 2006 call for all worlds - to redat optimum public interest. As busi-demand-side programs exiu tal to eliminate the need j ness activity becomes incnusingly subject to legislatnl for more than 1,100 megaw atts (MW) of additional
{ controls, the best tool to help lulance varied interests is generating capacity. Thus, the company fonsees at this l communication - bnnging reliab!c, trnlible inf irma-time a neal to increase generating capability by 1,100
{ tion to bear on the pniuss.
MW, or about 11 grrcent, by 2006 - to a new peak It was this kind ofin6>rmational junnership with capability of 11,250 MW. This growth will be met by governments that:
"""IV"'i"8 P""u plant unin now in resene, adding l
uimbustion turbine capacity for peaking service and l
- Gave Detroit Edison and its customen casht in the upgrading Fermi 2 nutleur power plant capability.
1Wo Chun Air Act amendments for the signi6 cant sulfur dioxide reductions already made, makin f upgradm.g of F,ermi 2 already has taken place.
ther near-term reductions unnnessarv, comp $e ur- (ornpany fonnal a twMtur ong lunnmhip ul with other utdities whk h face billion-dollar environmental wa the Genna1 Qtric Ca u> upgratie the elatric capacity of t
. nm 2 plant unda a new unumbnnl inwstment s.
N,uclear Regulatory Com-
- Assural protections to Detroit Edison's mission (NRC) approval small customers as Congress insened provi-pn, cess. Thniugh a ch>se sions in the Energy Policy Act of 199' s
gunnership between that would incause a'
plant employes and Gen-eral Ekttric enginars -
and approval by the
- f.
NRC - Detroit Edison
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was able to increase the generat mg cajuoty of e
Fermi 2 by more than 4 rnent, 1
about 46 mega-watts. It was the a
Grst power in-( rease ofits IP e,
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boiling-water reactor under the new In 1992, Energy 31arketing and appmval process.
Distribution, which accounts for Relatmnships with county and nearly 40 percent of the comp,mv's employes, became the first major local governments m Southeastem hiichigan take many forms, mclud-company unit to complete the de-mg mformational. But perhaps the velopment of a comprehensive g(uls, measures and target.,(Gh1T) pro-most valuable partnerships center.
l amund the company s leadership m gram. Under the program, eath unit carefully defines team and indi-ronomic development. Govern-i ments and utitities are uniquely vidual gculs, performance measures similar-neither can pick up stakes and specific expectations to ensure i
and leave. Therefore, the retention, that all employes work toward the expansion and attraction of business same results. The process is aimed at encouraging all emploves to con-
- the hical pursuit ofgrowth - be-tinuousiv improve perii>rmance. It
' *" ^ ' ** " E'"I' now is lEing adopted by other orga-l Detroit Edison shares its exper-nizations in the company in the tise with area governments through pursuit of more etTective operation.
l counsel and seminars, and is a rec-j ogruzed mtormanonal resource on While Gh1Ts are moving gcul setting into the hands of errIrloyes, tmancmg, tax abatements and job training. The company helps gov-the com;uny's two incentive pay ernments and others mcid their plans - the Shareholder Value Im-policies and practices to become catalysts for success.
pmvement Plan (SVIP)and the G,am.shanng Plan for members of Iocal 17, International Brotherhood of In 1992, Detroit Edison initiated the Regional Eco-Electrical Workers - reward employes for their contri-nomic Development Partnership Program, which butions to meeting both bnud company goals, such as targets economic development messages and efforts at earnings per share and customer satisfaction, and nar-business and trade organizations, real estate developers rower organizational goals, such as power plant and brokers, colleges and universities, and lobbyists.
production costs, duration and frequency of service in-The company also is a leader in a similar statewide or-terruptions, and fuel quality. Financial rewards are ganization, the Utility Consortium, which is working predicated on the extent to which goals are met.
with the hiichigan Department of Commerce to im-prove the state's business and economic climate.
The SVIP was pd.oted for management employes in 1989 and in 1990 was extended to all of the company s nearly 5.800 non-represented employes. The Gain-
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- s tract negotiations. Afembers oflocal 17 will recche g g"f sharing Plan with Incal 17 was developed in 1991 con-l their first Gainsharing Plan checks in 1993.
h, nip lOyeparfHerSh/ps medn emp/ oyes N'ord/Ug /ogC/her torrard common Incentivizmg results, as opposal to pay for hours me,tca,is,,y,,sent,,;, eor,secunu,,i<3,nyest,t.
god [S /H pM'Su// O[ Con //unonS ing place at Detroit Edison to increase the com}uny's
/minnrement to meel CHSlomerand
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competitive eartric utihrv m
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Shdreho/ der needS.
tivators, helping to align the work'of all employes toward common goals and cementing partnerships For employe partnerships to work - and for Detroit throughout the company, l
Edison to achieve best-in-class operation - the gculs Basic t th.is new culture is greater invohunent of.
and work ofall employes must be aligned with com-pany goals. While such alignment seems natural and empi yes in pr cesses that atTect their work hves. I wo logical, in large corporations it doesn't always happen.
new pmgrams that do that are Posiove Dncipline, un-
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l At Detroit Edison, new processes are well under way tc>
der which empkiyes are encouragal to recogmze their ensure effective alignment.
rnponsibility for behavior - both good and bad - and d
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Dr Ibrmt rJen PN Annwd he;mn 11
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! ing on employe dispute-resolution
- Resp >nding to rising health-care pg costs, in January 1992 the c om-lxurds. Through ihese and other
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programs, employes are huommg pany established an Employe l
more accountable for their [thavior ilealth-Care Issues Forum to give and induential in key detisions.
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employes greater say in determin-Here are other ways employe g
ing whkh bene 6ts wouki be iM der the company's r
l ptrtnerships have paid dis idends fiir health-care plans.
i both emplops and the compmy:
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- A team of Belle River Power Plant 3
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employes, comp, sal of Power l
Generanon ennmeering tuhm.-
De/mit Ed/ Sons l
cians and a group oflaal 223, w
Unlity Workers Union of pg(jgg73jyjp y.jjj, jjyg
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men, as well as supervisors an[I 8"
j planners, worked together with an
/n //>e m/n//duy'S po[/cy
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njuipment manufacturer to re-3 plac e sootblower canopies in a way IU MUSE CI/lO/ Cull #!
that saved nearly $550,000.
enr/munientalfinpar/S
- Up to 51 million a y ear in repair
/nd//p/ dun /nqdud costs have been s.ncd bv Monroe "S '##! #
Pow er Plant employes ivho modifed the plant's Cons /du// Sech n'dyS /0 redure impdf/S Unit 2 bottom-ash hopper cooling system.
J j
- A pannership of power plant engineers and mainte-
/>eyond //>ofe retfu/ red />y pu/1//r po//cy.
i nante and tuel supply personnel made possible the j
increased use oflow-sulfur Western c ul, fostering With virtually all 9,1S3 Detroit Edison employes greater uimittition among suppliers and transponers and their families living in Southeastern Mkhigan, the of the ou!. The result is lower-cost eintricity for all company's environmental wmmitment takes on a Iwr-(ustomers in 1988, the mmpmy was using an aver-sonal "we-lis e-here-too" sincerity. This commitment -
j age of 4S penent Western uul in its uul-fired plants.
or pannership w ith the environment - is redectul daily l
l Today. the plants are using 6S grrcent Western uul, in pour plants, substations, service centers and oths, I
l making Detroit Edison the nation's second largest and in hundreds of outreat h awareness and advisory j
utility wnsumer of the low-sulfur fuel and, due to the programs for sc bool children, where employes take car-fuers lower cost. wntributing signifcantly to a 5-per-ing fiir the environment to a personal level.
cent cut in customers' rates in 1993-Sinc e the mid-1970s alone, Detroit Edison's partner-
- During 1992 utilities in the Midwest and South were ship with the environment has represented an importing utility linemen in their struggle to repair investment of more than $2.5 billion. Its wrnsponding their tornado-and hurricane-damagal electric sys-impic t on the quality of hfe in Southeastern Mk higan tems. Aware of the shonage oflinemen in the is beyond measurement.
Northern states, officials oflocal 17, International hoit Edim's ensironmental pirtnership also has
)
BrotherhooJ of Elatncal Workers, which r presents id bminm dividends. Amendments in 1990 to the Detroit Edison linemen, were instrumental in locat-fcderal Clean Air Act base sent utilities and other wm-ing available contractor line wnstruction c rews tc>
mies scurrane to determine the best means of kup the company s thne-year,3236-million reliabil-wmplyig (vitii the rightenal sulfur-dioxide emissions ity improvement program on schalule.
rniuirements. While many will fmd solutions wsting
- One of the area's 6rst corp > rate-sponsond, on-site in the billions of dollars, Detroit Edison already is in day-care centers for c hildren of employes was creatal compliant e with the phase-one requirements edirtive j
- with employes' parikipation - at the c ompany's in 1995. This comes largely as a result ofits pioneering j
new Customer Communkations Center.
programs in burning low-sulfur Westem uul as a l
blend with mid-sulfur uuls, providing the optimum
)
i i
12 Th Derma 1 Jun 1 +d Awaa krpat i
l S
R E
V I
E W
l balance between environmental protection and pnduc-and the Environment" mini-grants, "Envine Alagic" tion ediciency. Only a relatively minor investment will shows and the sn ond annual Environmental Poster be required by the company to meet sulfur dioxide Contest for elementary school students.
emissions standards for the year 2000 - either by using Detn it Edison's pannership with the environment even more low-s ffur Westem cml in power plant fuel lods hyond today to planning for tornorrow. Sfore blends or by participating in the new emissions allow-than a decade ago, Detroit Edison was a leader in the ances trading authorized by the 19W) federal law. Also, development and on-the-nud demonstration of emis-a moderate investment mav be needed to mwt require-sion-free electric vehicles. As a result, the company has ments for nitrous oxide emissions.
a unique understanding, born ofexperience, of the in-The following1992 actions demonstrate that Detroit frastructure nuds for electric vehicles. With today's Edison operations remain directed on the path ofenti-renewed emphasis on attemative-fuel vehicles, Detroit tonmental responsibility:
Edison is being looked to as a leader in partnerships
! with the nation's hically-based automobile manufactur-
- The company is mstalh.ng woonuous emnsions didwba S am uvomers of the cornpany.
motutors at its coal-fired power piants to anow pre-cise, around-the-clock monitoring ofemissions and company a runna with Fon! Stotor Co. m.. -
its
" '* """ " "" P"F ""'
continuous data collection.
gether with Ford, the Society of Automotive Engineers
- Plant operations engineers developed an Environmen-and the U.S. Department of Energy (IX)E), the com-tal Performance Index which, starting in 1993, helps pany also is a co-sponsor of the Hybrid Electric Vehicle managers monitor discharges, hazardous waste han-Challenge, a program to showcase emerging electric dling and disposal, and environmental training.
s ehicle technology.
I
- An internal waste-rtduction program encourages re-Another electric vehide Jurtnership is the cycling and identifies altematives to traditional com;uny's involvement with General Stotors Corp.,
hazardous materials. One component - the two-year-Electronic Data Svstems, Hoches Power Control Svs-old employe paper recycling program - savn! 5,000 l tems and the IXIE in the national Electric Vehicle' trees in 1992 alone.
I Infrastructure study and competition. Imkmg beyond
- In partnership with major industries, the Southeast j the whides thc mselves, this study is aimed at helping Afichigan Council ofGovemments and the Depart-l the nation's cities, highways, service stations and other ment of Natural Resources, Detroit Edison helped tacilities adapt to, accommodate and facilitate the new establish the Southeast 31ichigan Ozone Study ge of electric vehides.
(SE310S). This two-year, $1.5-million study will use sophisticated air quality monitoring and modeling to develop a cost-etfective strategy to reach federal ambi-ent air quality standards for ozone by 1996. SEA 10S is designed to balance environmental protection and economic growth - a clear win-win result.
- The company has negotiated additional waste-to-energy power supply contracts for landfill gas j
generation projects - which use a renewable j
fuel created from decomposing garbage.
V
= Detroit Edison has led the way nationally in zebra mussel research, developing an environmentally sound water spray method for removing the mussels from power plant intake systems.
- The company enlisted more than 50,(XX) Southeastem hiichigan school children in its environmental pannership through teaching programs supported by Detroit Edison. These included " Energy The Derrmt LJwn 17M Armod kepn ]3
'li a
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W Pipeline Co., headquanered in Port
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- R-natural gas pipeline and station to I'dr///CTSb//>S tr//h S
fuel the nearby Greenwuod Power SI//,/>//ers aiit/ coii/rdclors
...g Plant. The plant, which is used only during peak periods, was convened he//> 1et///ce cos/s dri(/
43 to burn yas as weii as resiauai fuci
//11/>mre (f//d///y, /ed(///Ig oil, adding flexibility for economi-6 i
cal opranon as fuel pnces varv.
/0 trill-trill 5////d/10115 1
Other Detroit Edison ;urtner-
[Ortheco/////d/1Jd1/t/
ship programs that are pay ing both those trho//1pr/c/c quality and cost dividends include:
/11Yx///c/s dil(/ services.
- Partnerships with design and con struction contractors working on Detroit Edsen is remgnind the company's $2%-million reli natiorully for creating partnerships abiliry improvement program -
with suppliers focusing on cost with local 17, International reduction while promoting fair Brotherhood of Electrical Work pricing.
ers - saved more than $25 million Fuel costs for electric teneration in 1992 alone. Sewn punamaion u>ntraaors and four hne dearance are the single largest component ofoperations expenses.
Because fuel is so critical, most ofit is bou h l
contractors work under innovative contracts that i
term contracts to ensure aJequate supply. 'c t on ong-In 1992, fuel provide fodruer u>mmunicanon, irrionmnce expenses dunased from $'58 million in 1991 to $T04 onitoring, joint njuipment selaoon and a n ward l
l million, or more than ' p rcent. A signi6 cant portion of synen, f nhe most ef6cient.
I i
this decrease nsulud from innovative treatment of fuel
= The Corp > rate Agrcement Stockless Purchase contracts, including renegotiations, buy-downs, buy-tCASP) program, w hereby the com;uny buys fre-outs, and shifting of coal sources and transponation quently used materials through innovative uintracts routes.
with suppliers. Suppliers warehouse the stocks and Fuel-cost uvings have twen realized through a variety deliver them on a "just-in-time" basis. Suppliers even of partnerships with coal suppliers and transporters.
recommend other cost-saving steps to enhance the These partnerships have earned Detroit Edison a posi_
Junnerdup. The program idennfad about $1 mil-tion of special respect in the national aul marketplace:
lion in savings for 199:> and beyond.
= Throuch its subsidiary, Midwest Energy Resources
- More than 200 agreements with suppliers to use Ca, th'e company lus helnd one major supplier and Elearonic Data Interchange, a cost-saving panner, NERCO, k relize its pnduction by helping "P3Irriess" syuem fonedering and paying for goods market uul to other industries when clearic utility and services, end use of Evaluand Receipts Settle-demand for aul is down. Detroit Edison shares in ment (ERST The ERS system has eliminand the NERCO's profas.
""d 6e invoias fmm suppliers and helnd the com-pany qualify for prompt-payment discounts.
l l = Through another partnership, the company is selling aul contracted for under long-term agreements and
= Initiatives to increase purchasing opportunities with nplacing it with lower-cost i
operation with rail carriers, the company contin-ues to be a national leader in convening its rail cars
= A p rtnership with Henry Ford Ikalth System to 3
used for shipping coal to power plants from sutl to P"'vidy com;uny employes with mammography lightweight all-aluminum construction. The result is mnmg. L'nder the program, employes pay no ad-more coal per trainkud and savings fce all parties.
dinonal costs for the seruce, and the company s self-funded heahh insurance plan is bilkd at half the
= The company formed a tunnership with SEMCO rates charged by other providers.
L 14 The ortimt ! den I W Annud Remn l
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.S Financial Retiew l-Comparatise Results of Operations 42 Report of Management's Responsibility Statistical Review 44 for 1inancial Statements 20 Report ofIndependent Accountants 20 Miscellaneous Corporate Data 46 Consolidated Financial Statements 21 Iloard of Directors 47 Notes to Consolidated financial Statements 26 Board of Directors-Committees 48 Management's Discussion and Analysis 37 Officers 48
=
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and building efetieuxies andperfortaame to
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' The resnits ofthese efforts ioxinded ouvad
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untie in 21 peurs. Despite the disidend.
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Il inc tease, the price ofwmmon stot k slid slightly from
! percent from $3.59 billion in 1991. Common shares 1
i l
l the 1991 level, as im estors evaluatal the uncertaintv I outstandine in 1992 aseraged 146,998,485, virtually connected with the end of the company's 6ve-year rate l unchanged from 146,945.932 average shares in 1991.
moratorium and some widelv publici7al manufactur-Detroit Edison common stock dosed the year at J
~
i ing dmsions attecting the hical nonomy.
5 i
j 32h down from the 34'. posting at year-end 1991.
I With the end of the rate moraronum on December During the year, common stoc k reached a chning high J
j 31,1993 - a 6te-year period during of 35% in 1992,down N from 35%
l whic h earnings thus far have in 1991. Average market price per increased dranutically - the com-share in the past 10 years has pany expects levels of return more in increased from 14% in 1983 to 32'
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!ine '-irh the indmtry. At the same in 1992 - an increase of about 123
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percent. The stock averaged an E N(
1 time, rate reductions made possible M
- i bv the imreased etiiciency and M
annual return of 26 percent from
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performance levels achieval during
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19S9-1992. The marlct-to-h*4
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the Just several years will place the ratio at year-end 1992 was 1.55,
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company in a better position to down from 1.80 at year-enJ 1991.
1 mmpete in the energy marketplace.
]
While price appreciation was a ai Detroit Edison's 1992 carwings negative 5.8 percent in 1992, I
j foraanmon stal totaled a record tracking parallel with the DowJones
$55.5 milhon, or $3. 9 per share, Electric Utilities index, the darease l
up 4.2 percent from 5535.2 md-was ofiset by the increase in the f
lion. or 53.M per share. in 1991.
diridend to an indicated annual rate l
These record eamings came on of $1.98, up 10 ants from $1.SS in operating irrenues of 53.56 billion, down less than 1 1991 and up 30 cents from $1.6S in 1989.
I 4
l 198S - 1992 Quarterly Dividend Rates for Common Stock j
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j 1988 1989 1990 1991 1992 n ~,n
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l Common shanholden'efully as a percentage of last year, kd by non-automotive-related manufactur-l total capitalization was 42 percent, up from 38A ing. Automotive and automotive-related manufactur-penent in 1991. Outstanding long-tetm debt (includ-ing increased 1.6 prcent and steel dareased slightly ing amounts due w ithin one year) decreased overall compand with last year.
from $1.8 billion in 1988 to 54.3 billion in 1992, despite the assumption of $537.1 million of debt in Pf)2 Financing j 1990 connectal with the purchase of Wolverine Power Supply Cooperative, Incfs interest in Fermi 2. The Gross company reduced the embedded cost of debt by a full id 1
)
R p rcent - from 9.6 percent in 1988 to S.6 percent in Gowa/ 6 Refundrer 1992 - through a decrease in debt and the refinancing AI'"1W U""l' August
$ 300.0 7.110-8.3107 of higher-u>st debt -
Iksember 50.0 6.830 1
$ 350.0 j
Cooler-than-normal summer weather in 1992 kd to pgfy,jyy c,y,7yf gy,3 l
s} stem sales ofelectricity totaling 40.7 billion Febmary 5 210 6.5007 arc h 0
kilowatthours (kWh), down fractionally from last year's
,,)
1 41 billion kWh. Reflecting nduced air conditioning May 33.8 6.875 l
use, residential sales were 11.3 billion kWh, down '.5 Augua 35.0 6.050 IAxember 85.0 6.550 l
percent from 12.2 billion kWh in 1991. Commercial s 27j.8
)
saks of 87 billion kWh were down 2.3 percent from Total Financing 5 621.8 8.9 billion kWh last year. Industnal sales totakd 18.5 l
billion kWh, up 1.5 ptcent from 1S.3 billion kWh
. qu,u rau 1990- 1992 Market Price Per Share Detroit Edison vs. DowJones Electric Utilities j
(Index of 49 Electric Utilities) l DetroitEdison i
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Operation and maintenance t O&% cxpenses m Securities Redeemed UUring IW
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i 1992 totahd 5 I L bdhon, down 6 pnent from 51.-
1 Pnnopal bdhon last year. Fuel exptnses totahng $ 01 mdhon fl A mount interest wcre down ~ penent from 5 5S mdlion let year. due Rm1 GI:F' +
in part to plant t tiienues and impms ed fuel put-Lar1 Itedemptions 3
G. w.;! & Rsa..!. s c hasmg praaites. Cont murd..nght-sving..and y,.,.
f g,,,j, "right-skilhng ~ throughout the company, with the j o.g, s.nes a 5 i on.o
- u. s( r help of attntion. pndated a drop m the number or 1%~ N nes f 1 u O 1" 125 4
l i
5 nts T
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l employes in 1992 to an atrage 9,195, down nearly 2 N r,es l'
~s o 9.150 l
percent from IW1 and nearly 5 penent from 1990.
Vnts 55 10 0 1 DJ45 5 6It)O j
l Detroit Edson customers now art benefitine from P,0., z. r: O,r.:mi ik.l.
a nduction m annu.d rate s totahng about 51 0 g g u ys g;jgs s so_3 5 nom mdhon, or 5 pnent whith tuik placeJan.1. I994 Pu %.i& PsM o.'.: 8:d
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u,sts, passed on to customers as the resuh of a settie-9 ur senes 4.-
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ment reached with mdustnal customers, the state 52 '5 Senes 2o 11 0;10 i
l Attorney General and the Michigan Pubhc Sers ice 1
5 low 4
- Comnussion stati The de( rease also rede( ts t he 4
j expiranon oian expense stabihzation pn(edure Total Earh Redempnons 5650 4 Mandatorv Hedemptions -;29n provided for bs the twe-vear rate moratonum acree-2 Total Rede rnpnorn S C)J r 1
ment of 19sS.
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REPORT OF M A N A G E111E N T ' S RESPONSIBITITY TGR FIN A N CI A L S TA TEMEN TS Ttse Dett:M Eastm Company and SAsid.ary Companies l
The consolidated 6nantial statements of The Detroit opinion as to w hether the 6nancial sratements are l Edison Company and subsidiary companies have been presenad fair:y.
j prepared by management m conformity with generally The Board of Directors, through its Audit Com-accepad accounting principles, based upon c urrently mittee consisting solely of outside directors, meets available facts and circumstanc es and management's with Price Waterhouse, repmsentath es of manage-g best estimates and judgments of hnown conditions. It is rnent and the Company's intemal auditors to review the responsibility of management to assure the integrity rbctivities ofeach and to discuss accountin and obn ctivity cf such Gnancial statements and to assu:r auditing and financial matters and the carryit$e,g out of
- that these statements fairly report the Company s msibilities and duties ofeach group Price financial position and the nsuhs of its operations.
Waterhouse has full and far access to mort with the To meet this r sponsibility, management maintains a Audit Committee to discuss its audit results and high standard of record kceping and an effective system opinions, without management repnsentatives ofinternal controls, including an extensive program of presenc, to allow for (omplete indepe ndence.
internal audits, written administrative p>licies and pnaduns, and programs to assure the sekttion and 7
/
f
'7M
/
training oiqualifed pnonnel.
/
Tluse Enancial statements have been audited by the Lmy G. Garberding Compmv's indep ndent accountants, Prite Waterhouse, EmuowWu e I'rmdent
""d C"#""# #"
whose report appurs on this page. Their audit was conducted in accordance with generally acceptcd auditing standards. Such standards in ude the esalua-h M%c,_.
tion ofinternal accountine (ontrols to establish a basis for des cloping the scope of the audit, as well as such M" I bb Ouirrnan of the Ikurd, l'usident other procedons they deem necessary for expressing an and Chid Exec ume Oner REPORT OF INDEPENDENT A C CO UN TA N TS I
200 RENAb5ANCE CENTER DETROIT,MICIIIGAN 182B To the Board of Directors and Shareholders of The Detroir Edison Company In our opimon, the c onsolidated 6nancial state-which require that we plan and perform the audit o, ments appearing on pages 21 through 36 of this obtain reasonable assurance about whether the 6nancia' l l
report present fairly, in all material nsp< ts, the statements are free of material misstatement. An audit l
Enancial pos: tion of The Detroit Edison Company and includes examming, on a test basis, evidence support-its subsidiary companies at December 31.1992 and ing the amounts and disclosuns in the Gnancial 19'>l, and the results of their operations and their cash statements, assessing the accounting principles used 60ws for each of the three years in the period ended and signi6c ant estimates made by management, and l
December 31,1992,in conformity with generally evaluating the overall 6nancial statement presentation.
l accepad accounting principks. These 6 nan. il We bdieve that our audits provide a reasonable basis j
statements are the rcsponsibility of the Compmt's 6>r the c. pinion expressed above.
i management; our nsponsibility is to express an opinion on these Gnancial statements based on our audits. We conducttd our audits of these statements in Q
accordance vith generally m epad auditing stcndards
// - =
[(/& c - - t 20 m t% %:4 u mm,.n
CONS 0lI0 A TED S TA TEMENT OF INCOME aaws m uovuws)
The Detroit Edison Company and Subsidiary Companies Mr Endetl December 31 1992 1991 1990 Operating Revenues Ekrtric - System 53,472,583
$3,458,871
$3,279,248 Electric -Interconnection 58,447 105,399 269,542 Steam 27,113 27,267 27,491 Total Operating Revenues S3,558,143
$3,591,537
$3,576,281 Operating Expenses Operation Fuel
$ 704,371
$ 758,467
$ 788,355 Purchased power 126.101 133,498 256,400 Other operation 548,520 567,275 523,630 Maintenance 262,803 289,670 279,528 Depreciation and amortization 423,407 412,253 406,330 Deferred Fermi 2 depreciation and amortization (14,984)
(27,583)
(39,208)
Taxes other than incon.e 252,011 243,122 254,661 Income taxes 302,758 270,937 215,930 Total Operating Expenses S2,60f,987
$2,647,639
$2,685.626 Operating income S 953,156
$ 943.898
$ 890,655 Other income and Deductions Allowance for other funds used dung constmction S
1,363 1,459 Deferred Fermi 2 return 13,785 47,566 78,379
{
Other income and deductions (21,179)
(34,074)
(24,973)
Income taxes 7,108
-12,215 8,303 Accretion income 45,695 47,298 48,794 Income taxes - disallowed plant costs and accretion income (15.576)
(6,480)
(8,198)
Net Other Income and Deductions S 31,196
$ 67,984
$ 102,305 Income Before Interest Charges S 984,352
$1,011,882
$ 992,960 Interest Charges long-term debt S 388,580
$ 437,337
$ 472,369 Amonization of debt discount, premium and expense 3,952 4,467 4,539 Other 5,169 4,233 4,853 Allowance for borrowed funds used during construction (credit)
(1,396)
(2,192)
(3,260)
Net Interest Charges S 396,305
$ 443,845 5 478,501 Net Income S 588,047
$ 568,037 5 514,459 Preferred and Preference Stock Dividend Requirements 30,498 32,832 35,179 Earnings for Common Stock
> 557,549
$ 535,205 5 479,280 l Common Shares Outstanding - Average 146,998,485 146,945,932 146.888.809 l Earnings Per Share 53,79
$344
$ 3.26 1
l (See accompanying Notes to Gnsolidated Financial Statements.)
i Tie !bnat I4um 1992 Annual Repin 21 l
C ONS0llD A TED BALANCE ~ SNEET tooues ts umvosi i
The Detron Edison Company and Subsidiary Companies December 31 1992 1991 i
ASSETS Utilit> Properties 4
Plant in service i
Electric
$12,199,718
$11,859,315 Steam 68,226 62,937 i
512,267,944
$11,922,252 less: Accumulated depreciation and amortization (3,784,843)
(3,439,635)
S 8,483,101
$ 8,482,617 i
Construction work in progress 131,637 75,610 Net utility properties S 8,617,738
$ 8,558,227 j
Property under capital leases (less accumulated amortization of S127,393 and S122,917, respectively)
S 170,690 187,118 a
Nuclear fuel under capital lease (less accumulated amortization of $296,154 and $237,005, respectively) 225,727 246,496 Net pmperty under capitalleases S 396,417 5 433,614 Total owned and leased properties S 9,014,155
$ 8,991,841
)
Other Property and Investments Non-utility property S
10,191 5
10,103 Investments and special funds 16,535 32,511 Nuclear demmmissioning trust funds 24,583 20,102 5
51,309 62,716 i
j Current Assets Cash and temporary cash investments S
9,414 6,841 Customer accounts receivable and unbilled revenues (less allowance for uncollectible accounts of $32,000 and $23,000, respectively) 206,052 215,120 Orher accounts receivable 24,372 42,187 inventories (at average cost)
Fuel 159,288 169,055 Materials and supplies 177,749 164,716 Prepayments 9,650 7,598 S 586,525 5 605,517 a
Deferred Debits Unamortized debt expense S
48,132 48,968 Accumulated deferred income taxes 136,792 193,405 Unrecovered plant costs 1.758 8,433 Fermi 2 phase-in plan 506,480 488,163 4
Fermi 2 deferred amortization 35,835 25,383 Other 64,867 39,198 5 793,864 S 803,550 Total
$10,445,853 510,463,624 (See accompanying Notes to Consolidated Financial Statements.)
22 The Demor lasm w>2 Armaal Re:wrt
CO NS0ll0 A TED BALANCE SHEET wasmrosms>
The Detroit Edison Company and Subsidiary Companies,
i l
December 31 1992 1991 l
LIABILITIES
?
f Capitalization I
l Common stock - $10 par value,400,000,000 shares authorized;
}
147,016,691 and 146,983,123 shares outstanding, respectively (365,273 and 398,876 shares, respectively, reserved for conversion of f
preferred stock) 5 1,470,167
$ 1,469,831 Premium on common stock 553,724 553,463 Common stock expense (48,163)
(48,150)
Retained earnings used in the business 1,138,159 872,428 l
Total common shareholders' equity S 3.113,887
$ 2,847,572 Cumulative preferred stock - $100 par value,6,747,484 shares authorized; 3,006,562 and 3,137,540 shares outstanding, j
respectively (3,539,827 shares unissued) l Redeemable solely at the option of the Company 236,759 237,343 l
Subject to mandatory redemption 49,344 61,709 Cumulative preference stock - $ 1 par value, 30,000,000 shares authorized; 2,200,000 and 2,580,180 shares outstanding, respectively (27,800,000 and 27,419,820 shares unissued, respectively) l Redeemable solely at the option of the Company 47,891 47,891 Subject to mandatory redemption 6,294 i
long-term debt 3,973,485 4,218,264 Total Capitalization
$ 7,421,366
$ 7,419,073 Other Non-Current Liabilities Obligations under capitalleases 155,885 170,074 Accumulated rate refunds, with interest 7,554 3,861 S
163,439 5
173,935 Current Liabil; ties Short-term borrowings S
28,994 37,994 l
Amounts due within one year l
Iong-term debt 306,299 319,074 l
Preferred and preference stock 14.250 16,750 Obligations under capitalleases 240,532 263,540 Accounts payable 138,517 161,915 Property and general taxes 31,970 45,239 Income taxes 29,684 25,101 Interest 86,157 101,356 Dividends payable 80,192 77,072 Payrolls 62,866 64,730 Fermi 2 refueling outage 2,918 9,002 Other 70,518 57,142 S 1,092,897
$ 1,178,915 Deferred Credits Accumulated deferred income taxes 5 1,314,765
$ 1,222,430 Accumubted deferred investment tax credits 373,433 290,201 Other 79,953 79,070
$ 1,768,151
$ 1,691.701 Comrnitments and Contingencies (Notes 2,4,10,13 and 14)
Total 510.445,853
$10,463,624 l
(See accompanying Notes to Consolidated Financial Statements.)
The Detrmi Ednon 1992 Annual Ryori 23 l
l l
CONSollD A TED S TA TEMEN T OF CASH FL O WS wouns m reusmsi The Detrort Edison Company and Subsidiary Companies f
Year Ended December 31 l
1992 1991 1990 I
j Operating Activities Net income 5 588,047
$ 568,037
$ 514,459
]
Adjustments to reconcile net income to net cash from operating activities:
Accretion income (45,695)
(47,298)
(48,794) l' Depreciation and amortization 423,407 412,253 406,330 Deferred Fermi 2 depreciation, amortization and return (28,769)
(75,149)
(117,587) i Defernxi income taxes and investment tax credit - net 132,179 116,778 100A53 d
Fermi 2 refueling outage - net (6,084)
(10,998) 20,000 j
Other 6,714 34.241 29,538 Changes in current assets and liabilities:
Customer accounts recchable and unbilled revenues 9,068 (29,186) 11.205 Other accounts receivable 17.815 (8,791) 25,233
{
i Inventories 5,239 6,066 (4,004)
Accounts payable (24,930) 8,773 (73,014)
Taxes payable (8,109)
(1,595) 21,972 j
Interest payable (15,199)
(7,570) 2,951
)
Other 9,807 (13A51) 34,676 J
Net cash from operating activities S1,063A90
$ 952,110
$ 923A18 Investing Activities Plant and equipment expenditures 5 (415,937)
$(272,121)
$(230,201)
Purchase from Cooperative - Fermi 2*
(2,507)
]
Sale of nuckar fuel 31,846 j
Changes in current assets and liabilities (7,897) 3,137 (15.522)
Other (3,049)
(11,673)
(20,735)
Net cash used for in esting activities 5 (426.883)
$(280,657)
$(237.119) 1 Financing Activities Sale of general and refunding mortgage bonds *
$ 350,000 1
Funds received from Trustees: Installment sales contracts and k>an agnements 348,960 159,301 98,679
]
Increase (decrease)in short-term Imrrowings (9,000) 37,994 Repayment of long-term debt (957,859)
(658,129)
(332,203)
Redemption of preferred and preference stock (22,005)
(22,500)
(19,500)
Dividends on common, preferred and preference stock (318,349)
(305,893)
(293,391) l Other (25,781)
(21,331)
(9,602) 1 j
Net cash used for financing activities
_ $ (634,034)
$(810,558)
$(556,01'"
Net Increase (Decrease)in Cash and Temporary Cash Investments S
2.573
$(139,105)
$ 130,282 Cash and Temporary Cash Investments at Beginning of the Period 6,841 145,946 15,664 Cash and Temporary Cash Investments at End of the Period 9,414
$ 6,841
$ 145,946 I
Supplementary Cash Flow Information Interest paid (excluding interest capitalized)
$ 406,571
$ 445,350
$ 469,372 Income taxes paid 178,786 141,839 110,359 q
New capital lease obligations 39,320 79,002 75,0$$
For purposes of the consohdated financial statements, the Company musaders investments purchased with a maturity of three months or less to q
he temporary cash investments.
- Excludes the non-cash investmg and financing effects of the Company's February 1990 purchase of the Fermi 2 ownership interest of Wolverine Power Supply Cmperative, Inc. through the issuance of $ 537.1 million ofits General and Refunding Mortgage Bonds.
(See accompanying Notes to Consolidated Financial Statements.)
24 Tlw D-tm Edmm 1992 Annual Rcym j
CONS 0llDATED S TA TEMENT OF COMMON SHAREHOLDERS' EQUITY mouns m reousmosi The Detroit Edison Company and Subsidiary Companies Premium Retained Common Stock on Common Earnings l
$10 Par Common Stcxk Used in the Shares Value Stock Expense Business l Balance at December 31,1989 146,859,569
$1,468,596
$552,501
$(47,742)
$ 396,705 Issuance of common srcxk on conversion of convertible cumulative preferred stock, 5MW series 62,126 621 484 (24)
Expense associated with preferred and j
preference stcxk redeemed (577) l Net income 514A59 i
Cash dividends declared
)
l Common stock - $1.78 per share (261,478)
Cumulative preferred and preference stock *
(35,093)
Balance at December 31,1990 146,921,695
$1,469.217
$552,985
$(47,766)
$ 614,016 l
1ssuance of common stock on conversion of convertible cumulative preferred stock, 5%W series 61,428 614 478 (24)
Expense associated with an increase in j
authorized number of shares of common stock (3(4)
(
Expense associated with preferred and preference stock redeemed (623)
Net income 568,037 l
Cash dividends declared l
Common stock - $1.88 per share (276,271)
I Cumulative preferred and preference stock *
(32.731)
{
il Balance at December 31,1991 146,983,123
$1,469,831
$553,463
$(48,150)
$ 872A28 i
Issuance of common stock on conversion of convertible cumulative preferred stock, l
5M% series 33,568 336 261 (13)
Expense associated with preferred and preference stock redeemed (847)
Net income 588,047 l
Cash dividends declared Common stock - $1.98 per share (291,066) j Cumulative preferred and preference stock *
(30,903)
! Balance at December 31,1992 147.016,691
$1 A70.167
$553,724
$(48,163)
$1,138,159 l
'At established rate for each series.
l l
(See accompanying Notes to Consolidated Financial Statements.)
l The Dernnt Edmm 1992 Annual Repn 25 i
NOTES T0 C0NSOllDATED FINANCIAL STATEMENTS The Detroit Ed: son Company and Subsidiary Compames i
N O T E 1
phase-in plan. Acmrdingly, the Company remrded non-cash in-(ome items ofdeferred depreciation and deferad retum totaling Significant Accounting Policies
$5065 manon d, ugh 1992. ne,c defarea amoum, wam amonized umpming egense as de cah nwery is realized INDUSTRY SEGMENT-The Detant Edison Company thmugh mwnues during the years 1993 through 1998. Deferred
("Companv") is a regulated public utihty engaged in the genera-rion. purd$ase, transmission distribution and sale of electric depaaanon is that portion of depreciation expense not covend in current rates and was $4 5 milhon, $15.7 milhon and $25.8 mil-
"""SE lion in 1992,1991 and 1990, respeaively. Deferred return is the REGULATION -The Company is subject to regulation by the aa rual of carrying charges on fermi 2 plant cost, not uwered in Michigan Pubbc Service Commission CMPSC") and the Rderal current rates and was $13.8 milhon. SR6 million and $78A mil-Energy Regulatorv Commission ("FERC7 with respect to ac-hon in 1992,1991 and 1990, nspturely.
countmg matters and maintams its accounts in accordance with DEFERRED FERMI 2 AMORTIZATION - The Dnember L rutorm Systems of Acmunts prescnhed by these agencies. As a reculated enntv, taking mto account the cost rnovery restrictions b h d&mi hbg MO co'ntained in a Ihember 19% MP5C rate order and the pnwi-punhay of Wohenne Power Supply G.operanve,Inc. C6p-s uanw mwnership mterest in fermi 2 for $5b mdhon to be sions of the Energy Policy Act of 1992 rEnergy Act"), the Com-
'""" "* a apulamy am with a 19-y ear principal amortization paay meets the cnteria of Statement or Financial Accounting Stan-and amiaamd imant of 8 n & debt and associated interest im.
t dards r5FA5") No. 71, " Anounting k>r the Efkcts of Certain mad in mnnasn ush th punase am to ne exduded from Tvres of Regulation!' This auounting standard recognaes the
~
the calculation of the Company s overall return on investment.
ratemaking pnxess which results in diderences in the application Since the straight-line amortization of the regulatory asset exceeds ofgenerally auerted accounting princi;sles between regulated and wwnun pmuded for such amortization during the first ten non-regula'ted businesses. Such ditierences mntern mainiv the t
ye rs of the mowy priod, the Company is recordmg deterred time at whah vanous items enter into the determination of net income in order to follow the pnnople of matchmg cmts and amonizatmn, a ryn-cash item ofinmme, totahng $67.2 million thmugh 1999 h>r 1992,1991 and 1990, the amounts deterred revenues.
were $10.5 milhon, $11.9 milhon and $13A mdlion, resgsthely.
PRINCIPLES APPLIED IN CONSOLIDATION - The Con-The deferred amounts will be amortind to operating expense as solidated Finanaal Statements include the accounts of all subsid-the cash rnovery is reahred through revenues during the years iary companies, all of which are wholly-owned.
2000 through 2008.
[
REVENUES.- The Company records unbilled revenues for ein-PROPERTY TAXES - The Company auounts for property tric and steam heatmg services providal after cycle billmgs taxes so that such taxes are aurued monthly during the fiscal pe-thmugh month-end.
nod of the applaable taxing authonty.
PROPERTY, DEPRECIATION AND AMORTIZATION, INCOME TAXES - Defernd mmme taxes are provided for 1
RETIREMENT AND MAINTENANCE - Unhty properties timing ddierences ktween book and taxable income to the extent i
are recorded at onginal cost less regulatory disallowances. The authorind by the MPSC. For federal mmme tax purposes the i
annual prousion for depntiation is calculated on the straight-line Company mmputes depredation using auelerated methods and remaming hfe method by apphing annual rates appmved by the shorter depreciable hves. Investment tax cashts utilized which l
MPSC to the average of year-begmning and year-endmg bahnces relate to utility property were deferred and are amortiwd owr the j
of depreciable propeny by primary plant aaounts. Prousion for estimated mm;uite service hfe of the related pmperty. Invest-depreciation of Fermi 2, exdadmg decommissioning expense, was ment tax crnhts utihnd whkh relate rodisallowed fermi 2 plant 2.639 of average depreciable property for 1992,1991 and 1990, costs were recorded in other income and deduttions in 1990 and extept for $.mo milhon being amornzed over 10 tars commenc-1991 under the flow-through meth(d ke Note 6.
3 mg in 1989 and $513 mdhon bemy amoruzed over 19 years mm-ALLOWANCE IOR FUNDS USED DURING CON 5TRUC-menong m 1990. See hte 3. Prousion for derwcianon of all g.
y
, g g
other unhty plant, as a percent of aserage depreaahle property, 7
M d Me FN l'h W dhe m iM-dW was 239 tor 1992,1991 and 1990 in general, the cost of proper-4
"" "" i"f b F"
ties retired in the norrnal course of business is diargni to accumu-mnu coon pupo nd a wamnM4e ran on othu tunds when so lated depreciation. Expenditures for mamtenance and repairs are charged to expense, and the cost of new property installed, u hnh used AFUDC invohrs an aaountmg pngdure whereby the nylaces property renred, is charred to property accounts.
approximate mterest expense and the tost of other(mmmon, pre-4 gg ggg.
dem&
DEFERRED FERMI 2 DEPRECIATION AND RETURN -
cost of construction are transferred from the inrorne statement to An MPSC authorized phase-m plan for Fermi 2, t tiecove m Janu-construcion work in progress in the bahnc e sheet. The cash recm-ary 1988, proudes for gradual rate increases in the early years of ery of AFUDC, as wdl as other msts of construaion, meurs as plant operation rather than a one-time substantial rate increase completed pmpcts are plaud in serthe and rdaud depreciatmn is whkh convennonal raremaking would provide 5F AS No. 92, authonzed to be recovered through customer rates. The Company "Reguhted Enterpnses - Acmunting for Phase-in Plans " permits capitalized AFUDC at 9 650 in 1992,1991 and 1990.
the capitalization of costs deferred for future recovery under a 26 N tkmia Ed%n i W Annui hque
i l
ACCREFION INCOME -In 1988, the Company adopted SFAS milhon ($513 million for plant, $23.2 milhon for nuclear fuel and No. 90," Regulated Enterpnses - Accounting for Alundonments
$3.4 million for materials and supplies and other).
and Disallowances of Plant Costs," and recorded indirect losses for See Note 3 for a discussion of the MPSC's treatment of Fermi 2 Greenwood Unit No.1, for the abandoned Greenwad Unit Nos.
project costs of $1858 bilion (including the purchase of the 2 and 3 and for a portion of Fermi 2 as a discount (reduction) of Goperative's interest in 1990).
the Company's investment in these units. These net after-tax LICENSING, OPERATION AND DECOMMISSIONING-l koses, due to discounting, originally totaled $195 million, which The NRC maintains jurisdiction over the licensing, operation and amounts are being testored m net income over the period 1988-duomn issioning of Fermi 2.
1998 as the Company records a non-cash return (accretion incouG During 1992,1991 and 1990, Fermi 2 was available for system on its mvestment m these units. The Company recorded $30.2 power genera. ion 79.9W,73.99 and 82.9% of the time, respec-million. 531.2 mdhon and 132.2 milhon of net after-tax accretion tively. %e plet's capacity factor (measured by the amount of income in 1992,1991 and 1990, respectively.
powr Wad mmd m full powedbdip "9%
CAPITALIZATION - DISCOUNT, PREMIUM AND EN-66.79 and 77AM, respectively, during these same periods.
PFNsE - The discount, premium and expense relatal to the issu.
The MPtC regulates tne recovery of costs of decommissioning ance oflong-term debt are amortized over the life of eath issue. In rnicler power plants. A January 1987 MPSC order authorized the accordance with MPSC regulations, the discount, premium arxi esuikhtmut of a $100 million external trust fund (in 1987 dol-expense, when related to debt redeemed without rrfundmp, are lars) m fnarxe the decommissioning of Fermi 2 when its operat-wntren off to other income and deducnons and, when related to ing licenw expires in the year 2025. The order approves a decom-debt redeemed with refunding, are amortized mer the life of the missioning surcharge on customer bills under which the Company replacement issue. Capital stock premium and expense related to is collecting approximately $3 million annually, with a like redeemed preferred and preference stock are written off against amount (harged to operations through depreciation expense. At retained earnings used in the business.
December 31,1992, the Company has a reserve of $19.1 mdlion, UNRECOVERED PLANT COSTS - Amortization of unre-which is mcluded in accumulated depreciation and amortization, covered plant costs commences whe.. recovery of such costs is for the future decommissionmg of Fermi 2, with a like amount authorized by accounting and raremaking orders of the MP5C. No
'P"' d
return on investment is provided for unrecovered plant costs. The EtTecure m. July 1990, an NRC rule requires decommissioning Company is amorttzing costs of $71.3 mdlion associated with the funding based upon a site-speatic estimate or a predetermmed abandon [xl Greenwood Unit Nos. 2 and 3 over the period 198;-
NRC formula. Using the NRC s formula, the Company estimates 1993. The unamortized balances at Dnember U 1992 and 1991 that the mst of decommissioning Fermi 2 is $199.8 million (in were 51.8 mdlion and SSA million, respect; av.
1992 dollaM The currently authonzed surcharge does not pmvide adequate funding under the NRC rule, however, the Company has FERMI 2 REFUELING OUTAGES-The Company recognizes requested an increase in the surcharge in itsJuly 1,1992 rate fding the cost of Fermi 2 refuehng outages over perioi.ls in which related with the MPSC and beheses increases in decommissioning costs l
revenues are recognized Under this procedure. the Company will be recovered in rates.
l remrds a provision for incremental msts anticipated to be incurred The Company also has a resent of $5.5 milhon at December dunng the next scheduled Fermi 2 refueling outage.
31,1992, which is included in other defened credits, for the LEASES - See Note 10.
future decommissioning of Fermi ), an expenmental nuclear urut I
on the Fermi 2 site that has been shut down since 19'2. Such l
EMPLOYES' RETIREMENT PLAN AND OTHER amounts are depositext in an external trust fund for the hture pay-l POSTRETIREMENT ilENEFITS - See Note 11 ment of decommissioning costs, which are estimated at $111 mil-RECLASSIFICATION - Certain amounts in prior years' Con-li n (in 1992 dollars).
solidated Statement ofIncome have been reclassified to conform to The Energy Act provided for a fund to be established for the the current year presentation decommissioning and decontamination of existing United States l
Department of Energy CDOE") uramum enrichment facilities.
l Utilities with nuclear facilities wdl be required to pay for a portion N O T E 2
of the cost by making annual payments into the fund over a 15 year period. The law directs state regulators to treat these pay-Fermi 2 ments as a nece sary ana tea onabie m t orfuet The Comnmy s share of the costs are estimated at $750,000 per sear.
GENERAL - Fermi 2, a nackar generating unit, began commer-cial operation in January 1988. On September 10,1992, the NUCLEAR FUEL DISPOSAL COSTS - The Company has a Nuclear Regulatory Commission CNRC~) approved the Com.
contract with the DOE for the future storage and disposal of spent pany's raluest to increase Fermi 2's hcensed capabilirt of 1,093 nuclear fuel from Fermi 2. Under the terms of the contract, the megawatts by over four percent to 1,139 megawatts [This unit Company makes quarterly payments to the DOE based upon a fee
~
npresents approximate!y 32'T of total assets,117 of total opera _
of I mill per kilowarthour applied to the F:rmi 2 electricity gener-tion and maintenance expenses and 119 of summer net rated ated and sold. The spent nuclear fuel disposal cost is included as a capability. In February 1990, the Company purchased the component of the Company's nuclear fuel expense. The DOE has Cooperative's 11.1987 Fermi 2 ownership interest for $539.6 The Thr 1xhwi IW2 Annual hymrt 27
1 1
~
N0TES T0 C0NSOll0ATED FINANCIAL STATEMENTS a
l The Dettert Ed: son Company and 54sid.ary Cornpanies
)l publidy stated that it will be unable to store spent nudeur fuel at I decrease costs by $5 milhon (1988 dollars adjusted by the Con-a permanent reposnory until 2010. Ibwe er, the DOE is pursu-sumer Price Index, " cpl") or mon annually. Also, an ex[rnse j
ing interim storage options. The Company esumates that existing stabilization pra edure, applicable to approximately $750 million j
temporary storage capacity at Fermi 2 will be suthient untd the of Company operation and maintenance expenses, irrmined rates 1
j 3 ear 2000.
to be adjusted by a sunharge through 1992 for the etTects ofinfla-tion. The annual revenues pmvidal by each surcharge were INSL,RANCE.- The Company insures Fermi 2 wnh pre damage insurance prmided by Nuclear Mutual Limned (;perty s
E mdlion, $55 million and $63 million for NML),
1990,1991 and 1992, respectively.
N,uclear Electric Insurar;ce Lim. d (.NEIL,,) and Amentan St M W i summary of the Company's actual and l
te Nudear Insurers ("ANI ). The NML and NEIL insurance pobo.es scheduled rate increases and other rate changes for the penod provide $500 milhon of composite primary coverage and $1.325 198849Fi, exdading nurcharges. This summary indodes the
^
bdhon of excess coverage, aspectnel, for stabilization, decon~
3 doh a FW 2 Min 4 tamination anJ debris removal msts and repair and or replacement of property. Under the NML and Nelt pohcies, the Comp,my ugny.d othu Tota could le hable for maximum nerospective assessments of up to h Rate Rate Annual cumulative appmximately $20 milhon per kiss if any one loss should exceed Year increases Changes Amounts Amounts the accumulated funds avadable to NML or NEIL An additional
'g, j
$ 65 milhon of excess cmerage is provided by ANI for which the
-m 52 Company pays an annual premium and iy not Lble for retrospec, ine assessments. Accordingly, tne combine i limits provide total g
~m z93
$g.,3 p
i propeny damage imurance of $2.59 bilhon. The Company is also 39g insun-d by NEIL for replaament power costs associated with acci-i dental plant Outares.
- Under the MP5Cs December 1988 order, $'O 8 mdhon required under i
As rtsjuired by federal law, the Company maintains $200 md_
the Ierrn 2 phase-in plan wdl be mcluded as a ust of serme component in the determmaoan ci the rate adiustment m 19W and beyond, te that lion of pubhc lubihty imurance for a nuclear incident. Further, under the Pnce, Anderson Amendments Act of 1988, deferred re-
"" #*"""'Id "* """d d """F ' D"" '" "# " " "
I December 31,1998, mium charges or $63 mdhon may be levied against each licensed nudear facihty, but not more than $10 million per year per facd-itv. On December 31,1992, there were 115 bcemed nudear See Note I for a dission of Deterred Fermi 2 Depreciation and Return and Deterred Fermi 2 Amortization.
i fa'cihties in the United States. Thus, deferred premium charges in the aggregate amount of approximately $7.2 bilhon could be For the pericd January 1989 through Decemkr 2003, the l
levied against all owners of licemed nudear facilities in the event Dn emb"r 198S MPSC order established (1) a cap on Fermi 2 of a nudear incident. Accordmply, public liabihty for a single capital dditions of $25 mdhon per year cumulat ve, adjusted by nudear incident is currently hmins! to approximately $7A billion.
the CPL (2) a cap on Fermi 2 non-tuel operation and mamtemnce i
expenses adrusted by the CPI and (3) a capacity factor performance standard based on a three-year rolling average commencing in N O T E 3
1991. Under the capacity performance standard, etTective January 1,1993, a disallowance of net incremental replacement power cost I
OBlO M BllBfS will ir imposed for the amount by which the Fermi 2 three-year rolhne average capacity factor is less than the greater of either the The Company is subject to the pnmarv regulatorv tunsdiction of average of the top 50'J of U.S. boiling water reactors or 50'7. For the MP5C, which. imm time to time, issues its orders pertaininF a capital investment of $200 milhon or more, the Company must to the Company's conchnons of service, rates and recovery of obtain prior MP5C approvJ to be induded in rate base. See Note certain costs mdudmg the costs of generating facdities.
1 - Regulation.
A December 1988 MP5C order apprmed a settlement agree-The Company has and believes it will continue to operate ment among the Company, MP5C 5tati, Michigan Attomey Gen-under ihe terms of the order wnh no significant adverse erints as I
eral FAG") and other intervenors, which together with a prninus a result of any cost ruoverv restrictions mntained therein.
4 April 1986 MPSC order (1) estabbshed a seven-year rate phase-in in anordance with De[ ember 1988 and Apnl 1986 MP5C rate plan for Fermi 2,(2) prmided for both chrect and indirect disal-orders, ratemaking treatment of the Compant's fermi 2 project lowances of fermi 2 plant costs,(3) exduded the Company s w>ts of $4.858 bdhon is as follows: (1) $3.01'S billion m rate base investment in its 795 megawatt Greenwd unit from rate base with remvery and return,(2) $300 mdhon amornzed over 10 ears 3
thmugh Dnember 31,1993. u) suspended the Power Supply with no retu'rn,(3) $513 million amortind mer 19 years with 1
Cost Recovery rP5CR") Clause for the four-year period January 1, associated intenst of H'# and (4) $1.027 billion disallowed and 1989 through Daember 31,1992 and (5) provided for a five-year wntten off by the Company in 1988 moratonum on base rate changes through December 31,1993 Under the Decemler 1988 MPSC order, if nudear operations 2
l Except ons to the moratonum were allowed for (1) previously at Fermi 2 permanentiv cease, the remaining net rate base inust-l authorized rate inc reases (the Fermi 2 phase-in plan) and (2) fed-ment amount shall be removed from rate base and amortized in eral income tax law or regulation changes, new acid rain legista-rates, without retum, over ten years with such amortization not to tion and new cogeneration legislation that would mcrease or a
j 4
2h TM Detut 1. dant. IW Anna krprt
]
i exceed $290 million per year. In this event, unamortized amounts MPPA's capacity and energy entitlement whith continued of deferred depreciation and deferred return, recorded in the bal-through 1990. Such purchases were 909 for 1991 and 80% for ance sheet under the phase.in plan prior to the removal of Fermi 2 1992 and are contracted to be 20% for 1993 and 10% for 1994.
from rate base, will continue to be amortized, with a full return on The cost for the buyback ofpower is based on Af PPA's plant-re-such unamortized balances, so that a!! amounts deferred are recov-lated investment, interest costs incurred by hiPPA on their origi-ered dunng the period ending no later than December 31,1998.
nal pmject financing plus 2.57, and certain other costs such as de-Also, amortization in rates of the $300 million and $513 million preciation and operation and maintenance expenses. Buyback pay-investments in Fermi 2 would continue.
ments to AfPPA were $70.3 rc liion, $58.1 million and $50.9 In an order dated October 19,1992, the hiPSC approved a million for 1990,1991 and 19W, respectively, and are currently settlement agreement providing for a 1993 P5CR Plan. Imple-estimated at $12.6 million and $6.1 millian for 1993 and 1994, mentation of the provisions of this order together with the termi-respectively.
naticn of the expense stabilization procedure on January 1,1993' is eqected to reduct the Company's operating revenues by LUDINGTON PLhiPED STORAGE-p.,. a mte-appoximtely SiO milhon m 1993.
nance and other expenses of the Ludington hapd Smrye Plant The Company has pendmg before the AIP5C an application Cludington") are shared by the Company adasumers Power requestmg an mc'rease m base rates m the annual amount of $91.6 Co.npany (.. Consumers.) in proportion to their respettive interests milbon, based upon a 1994 rest year and a 139 retum on com-in the plant. Se Note 13 for a discussion of contingencies related
mon equity. The request for an increase in base rates reflects: (1) h of the Company's Ludington generating capability O s mcreased fermi 2 decommissioning costs, (2) mcreased costs asso-ciated with implementing accounting changes rt ated to wher has been leased to The Toledo Edison Company through Decem-postretirement benefits (see Note 14),(3) costs associated with the bu 31,1993 return to rate base of the Grenwood generating unit,(4) Fermi 2 phase-in plan revenue requirements in 1994,(5) a five-year $75 N O T E 5
million demand-side management program and (6) other infla-tionan inueasesme Commnv is required m uP ate this APP <>-
Sale ofAccountS Receivable and d
h tion by Apnl 30,1993. It is anticipatexl that the hiPSC will issue an order e&rnve for service rendend on and afterJanuary 1,1994.
Unh///ed ReVenUBS in February 1989, the Company entered into a five-year program N O T E 4
for the sale of $200 million of the Company's accounts receivabic and unbilled rntnues. The sale was accomplished by an assign-Jointly-0wned Utility Plant ment of an undivided ownership interest in the Company's cus-l tomer accounts receivable and unbilled rnrnues. At Decrmber 31, The Company's pomon of jointly-owned utdity plant is as follows:
1992 and 1991, customer accounts reeivable and unbilled rev-enues in the Consolidated Balance Sheet have been reduced by
'"d '"F *"
$200 million reflecting the sale. All expenses associated with the nenc Rwer s ra pr gram are being charged to other income and deductions in the Consolidated Statement ofIncome.
l In-sernte date 1984-1985 1973 l
Undmded ownership mterest 497 investment (rullvmn
$ 1.o25.'
$16H 7 N O T E 6
Act umuLted depreoaturn mallemo
$ 246.1
$ 63.0
- The Companis undmded ewnnship mterest is 6237 m Unit No.1,
/DCorne TBXBS 81399 of the parnon of the fachties applicable to bdie Rwer used jointly i
by the heue River and 5t. CL:r Power PLnts,49 597 in certam transmnf Total income tax expense as a percent ofincome before tax s[on hnes and, at Ikember 31,1992 -'59 m faabnes used m common vanes from the statutory federal income tax rate for the following wah Unic No. 2.
reasons:
Percent ofIncome Before Tax BELLE RIVER - The hiichigan Public Power Agency CSIPPA")
""2 has an undivided ownership intuest in Belle River Unit No. I and certain other related facihties. AfPPA is entitled to 18.61W of the starutory mcome tax rate 34 ow 34.0 7 34 ow capacity and energy of the entire plant and is responsible for the Deferred Iermi 2 depreaution same percrntage of the plant's operation and maintenance expenses and return to )
< 2.1 )
<4 oi and capital improvements. The Company is obhgated to provide Amoc m 1) m 1)
<l a
(
AIPPA with backup power when either unit is out of service.
1""'*""""' tax ueda (t9)
(2 w (2 m l
In 1984, following commercial operation of Belle River Unit W " "" "
33 3
d No.1, the Company began contractual purchases of 100% of Etfernve mcome tax rate 34 6'#
31 M 29.67 lie Detroit Lden NM Annual Krptt 29
j
)
i I
i NOTES T0 C0NSOll0ATED F1NANClAl STATEMENTS f
De Detroit Edison Company and Subscary Companies Components of inco ne taxes were applicable to the 611cwing:
As authorized by the MPSC, deferred income taxes are recorded for tax credits generated under the Alternative Minimum Tax 1992 1991 1wo
("AMT") system created by the federal Tax Reform Act of 1986.
m-do These deferred income taxes are amortized at such time as the Operanny expenses AMT credits are used on the Company's federal income tax rerum.
Currem s20u46 5179.736 514to19 It is estimated that $50.5 million of AMT credits will be used to Deferred - nrt reduce the Company's 1992 federal income taxes currently pay-norrowed funds component able; t' ?refore, an equal amount was amortized to deferred income of ARfDC 0,os D 0,08 0 0 2,611) tax expense in 1992..At December 31,1992, the Company has an l
Dcpreoaton and amornunon
'o s64
'2,814 76,261 AMT credit carryforward of approximately $29 million, which can Property taxes 3.952 (3,822)
(5,308) g g7,ard mde6nitely to reduce regular tax liabilities l
i Unbded rtwenues (10,922) u-henever such liabilities exaed AMT liabilities.
l Ahematne mmimum tax 50,537 419 The cumulative net amounts ofincome tax timing ditTerences f ermi 2 cynahied labor and expenses 0,692f (1,o92) d,692) for which deferred taxes have not been pmvided at Duember 31, Indino construction cmts 0,268) 0,268>
(1,864) 1992 and 1991 are appmximately $1.8 billion and $2.0 billion, Uncouecuble accounts (3,06(o (4,420) 1,084 respectively. The tax expense related to these timing ditTerence Contnbunons in aid of amounts, for which the tax benents were previously flowed-construcnon (4,8??)
G.548)
M,952) through to customers, will be recorded when such taxes become Iermi 2 refuehng outage 2.068 3,740 (6,Hoth payable and are recoverable from customets.
Michgan 5mcle busmess Tax 6,324 (6,32 D In February 1992, the Financial Accounting Standards Board s choMer value imprmement CFASB") issued SFAS No.109, " Accounting for Income Taxes,"
with an effective date of 1993. SFAS No.109 requires an asset and PSCR property tax refund 30 5,5M (5,563) liability approach for 6nancial accounting and reporting for coal contrait burouts 0,918) m 3) 4.w6 Ot her 3.881 o<o6)
B72 D income taxes. It requires the Company to (1) recompute its tax l
~
115a so 68a 32 20771 liability at the then current tax rate and adjust the accumulated deferred income tax balances in the balance sheet and (2) record In estment tax creda - net Utilued 017) 36Ao8 M.468 additional deferred income taxes for temporary ditTerences not i
Amon aed 0 6,45 D o 3.n9) n 2.428) previously rewgnized (including the $1.8 billion discussed above).
o 6c68) 2to69 52a40 The Company is adopting SFAS No.109 in the first quarter of Total 302.758 2o.m7 215.930 1993 and, as a result, will record an increase in accumulated Other mcome and dedm oons deferred income tax liabilities of appmximately $740 million oft-Cunent (5 A64) O 1,l HM (7,565) set by an njual regulatory asset, representing the future revenue Deferred - ner t 1,64h d,027)
(HH)
TNovery from customers for these taxes as they become payable, Total D.lo81 0 2.215)
(8304 with no effect on net incorne.
Dnallowed plant costs and On February 8,1993, the MPSC issued an order, in a generic pmceeding, authorizing accounting procedures consistent with accrenon mwme current 0 9.s35)
(20,125)
(20,08 0 SFAS No.109 and providing assurance that the etTects of prni-y 6 owe &thmugh tax buie 6ts sW continue to be allowed rate o
san plant costs 19.874 20,135 20.088 Accrenon mwme 15,M7 16.oRI 16,591 I" *"T -
The federal income tax returns of the Company are settled Investment tax creda (9.611)
(H.400) thmugh the 3 ear 1986. The Intemal Revenue Savice is currently Total 15,5 6 6,480 8.198 l
examining the Company's tax retums for the years 1987 and Total inmme taxes i vn.226 $265,202 5215.825 1988 The Company believes that adequate provisions for federal income taxes have been made through Ikcember 31,1992.
In accordance with MPSC rajuirements, deferred income tax accounting was not followed for the borrowed funds component of AFUDC and indirect construction costs relating to Fermi 2, nor is N O T E 7
f it followed for mterest on nuclear fuel fmancmg (see Note 10) and tertain othe current income tax acaunions. -
Short-Term Credit Arrangements The Fermi 2 phase-m plan required the Company to record and 80rraw/nas additional deferred income tax expense related to deferred depre-o ciation totaling $33.5 million ($11.8 million, $9.4 million, $6.9 As described below, at December 31,1992, the Company had million, $4.2 mdlion and $1.2 million in 1988,1989,1990, total short-term credit arrangements of $363.7 million under 1991 and 1992, respectively), with these amounts amortized to which $29 million of borrowings were outstanding.
income over the pena.1 end ng December 31,1998.
4 30 The tMnut IAum IW2 Annul Rc;wn
The Company had bank lines of credit of $200 milGon. a!! of reserved for issuanct upon conversion and the conversion price are which had commitment fees in lieu of compensatmg b.i res.
subject to further adjustment in certain events. This Series may be Commitment fees incurred in 1992 for bank lines of cr
.c were r deemed at any time in whole or in part at the option of the approximately $0.3 million ne Company uses bank hnes of Company at $100 per share, plus accrued dividends.
credit to support the issuance of commercial paper and bank kuns.
The Company's 9.32W Series,7.680i Series,7.459 Series and All borrowmgs are at prevailing money market rates which are
?.369 Series Preferred Stock are redeemable solely at the option of below the banks' prime lending rates.
the Company at a per share redemption price of $101, plus accrued The Company has a nuclear fuel fmancing arrangement (heat dividends.
purchase contract) with Renaissance Energy Company ("Renais-The Company's $2.28 Series Preference Stock is redeemable l
sance"), an unEiliated company. Renaissance may issue commer-solely at the option of the Company at a per share redemption cial paper or borrow from participating banks on the basis of price of $25.25, rlus accrued dividends, on and afterJanuary 15, promissory notes. To the extent the m.uamum amount of fomds 1993 I
available to Renaissance (currently $400 million)is not needed by Apart from MPSC approval and the requirement that Com-l Renaissance to purchase nuclear fuel, such funds may be loantd to mon, Preferred and Preference Stock be sold for at least par value, the Company for general corporate purposes pursuant to a separate there are no legal restrictions on the issuance of additional autho-Loan Agreement. At December 31,1992. $163.7 million was rind shares of such stock.
available to the Company under such loan Agreement. See Note i
i 10 for a discussion of the Company's heat purchase contract with Renaissance.
~
N O T E 9
Cumulative Preferred and N O T E 8
pygfgygggy $gggy gygjggg gg
?
Common Stock and Cumulative Mandatory Redemption l
Preferred and Preference Stock At December 31, the outstanainy Cumuiative Preferrea ana Redeemable Solely at the Option Preference Stock subject to mandatory redemption was:
l of the Company o"
Issu nte 1992 1991 l
At December 31, the outstand ng Cumulative Preferred and Pref-gg erence Stock redeemable solely at the option of the Company was:
Prefern d sawk 9.729 senes,250.000 and U"# I 300f MIO shares, respectn ely Dec.19~8
$25,000
$ 30,000 issuanc e 1992 1991 9,27 wne SOjko M
<T h.iando f oJ oo shares. respecovely Jan 1979
$JoO 6Joo Preferred Sn ck 9 607 senes.159.750 and 549 cnnvernble senes.M.982 195,250 shares, respecuvely Oa.19'9 15.9'5 19,525 and ?O,960 shares. respecovely Oct.196'
$ 6A98 $ 7,096 9 60g senes.132,'50 and 9 327 series,499.080 shaes Oc t.19'O 49,908 49,908 162.250 shares, respecovely Jan.1980 13,275 16,225 1681 series, 500,000 shares Mar.19"l 50.000 50Joo Preferred sux k due w nhin l
'.45W senes,600J00 shares Nov.19'1 60J00 60.000 one year (9,250)
(9,250)
? 367 senes. 750J00 shares Dec.19'2 75Joo
'5,000 Preferred sur k expense (656)
C'91) l Prefernd snxk expense (4.647)
(4.661)
Toul Preterred Stoc k
$49.444
$61.709 Total Preferred Sax k
$ 2 56.~ 59 5237.343 Preference Sux k Preference Suck
$2 ~5 series. 180,180 diares
$2 28 senes,2,000Jou shares D-c. 197' $ 2,000 $ 2Joo in 1991 July I9'S
- $ 18e Premium on preferenu snak 4 % >0 48J100
$2.75 senes B.200/NO and Preferente suxk expense (2.109)
(2.109, 400.000 shares respecovely Dec.19'5 200 400 Total Preferena 5uxk
$ 4'p91 $ 47.891 Pnem m preferenn stoc k 4.800 13,924 Preferena snx k due w thin one year (5,000; p,500)
The Convertible Cumulative Preferred Stock,5%W Series, is Preference sutk expense 010; convenible by the holder into Common Stock. The conversion Total Preference Sux k
- $ 6.294 price was $17.79 per share at December 31,1992. The number of shares converted during 1992,1991 and 1990 was 5,978,10.937 and 11,060, respectively. The number of shares of Common Saxk l
The Drenur Won iW2 Arma.,1 Rymrt 31 i
W0TES T0 C0NS0LIDATED FINANCIAL STATEMENTS The Detroit Edtson Cornpany and Subsid:ary Cornpanies The following series of Preferred and Preference Stoc k are N O T E f 0 entitled to the benefit of sinking funds (provided that no dividend arrearages exist) providing for the annual redemption of shares at
[eBSeS f
stated per share prices, plus accrued dividends:
Future minimum lease payments under long-term noncancellable Non-CumuLthe leases, consisting of nuclear fuel ($280 milhon computed on a option to projected units of production basis), lake vessels ($60 million),
Redeem kscomotives and coal cars ($177 million), office space ($33 million)
Annual Pnce Addinun.d and computers, vehicles and other equipment ($29 million) at Number Per Shares in December 31,1992 are as follows:
of Shares Share Any Year (Mdim)
(Mdim) pg 9.2W 5eries 30.000
!!OO 30AKX) 1993
$117 1996
$ 63 9.609 Senes 42.500 100 32,500*
1994 92 1997 40 Preference Stock 1995 78 Remaming years 189
$2.75 Senes B 100AKo 25 100,000 Total
$579 l
- Not to exceed 220.000 cumulanve additional shares of whuh 97,500 shares were redeemed at December 31,1992.
The Company has a heat purchase contract with Renaissance which provides for the purchase by Renaissance for the Company The following numbers of shares were purchased for application of up to $400 million of nuclear fuel, subject to the continued to sinking fund requirements:
avadabilitu of funds to Renaissance to purchase such fuel. Title to the nudear fuel is held by Renaissance. The Company makes quar-1992 1991 1990 i
terly payments under the heat purchase contract based on the Preferred Stock,9'29 Series 60.000 60,000 30.c00 consumption of nuclear fuel for the generation of electricity. Ren-l Prderred Stock,9Rnf Senes 65.000 654K) 65Jxo aissance's investment in nuclear fuel was $226 million and $246 l
i Preference Stock, $235 senes 180,180 200.000 200 m0 million at December 31,1992 and 1991, respectively. He de.
I Preference Stock, $275 Senes B 200.000 200 000 200,000 crease in 1992 from 1991 of $20 million includes additions of $39 l
l million (purchases of $32 million and capitalized interest of $7 l
In the event that a payment due under requirements of a sink-million) less $ 59 million for the amortization of nuch ar fuel con-l ing fund for any series of Preferred or Preference Stock is not made, sumed in 1992.
l i
no dividend shall be paid (other than a dividend paid in junior Under SFAS No. 71, amortization ofieased assets is modifkd stoc L) or declared or other distribution made upon any junior so that the total ofinterest on the obbgation and amortization of i
sta i ' ommon and Preference Stock in the case of Preferred the leased asset is equal to the rental expense allowed for Sm and Common Stock in the case of Preference Stock) until ratemaking purposes. For ratemaking purposes, the MPSC has such payment is made.
treated all leases as operating leases. Net income is not affected by l
The following series of Preferred and Preference Stock, which capitalization ofleases.
l are redeemable pursuant to sinking fund requirements, may also Rental expenses for both capital and operating leases were l
be redeemed at the option of the Company at stated per share
$108 mdlion (including $70 million for nuclear fuel), $ 106 mil-redemption prices, plus accrued dividends:
lion (including $67 million for nuclear fuel) and $124 million I
(including $80 mdlion for nuclear fuel) for 1992,1991 and 1990, j
Decreasing Pnor On and respectively.
from To To After Preferred Stock N O T E f
f 9727 Series
$102 90 1-15-94
$ 10100 1-15-94
[Onn-Term Debt 9 607 Srnes 104 00 10-15 94 101.00 10-15-94 Preference Stock a
$2?5 Senes B 25.25 1-15-91 The Company's 1921 Mortgage and Deed of Trust (" Mortgage"),
the lien of which covers substantially all of the Company's proper-The combinul aggregate annual amounts of redemption ties, provides for the issuance of additional bonds. At December requirements at December 31,1992 for all series of Preferred and 31,1992, approximately $2.7 bilbon principal amount ofMort-Preference Stcxk are $14 million for 1993 and $6 million for each gage Bonds could have been issued on the basis of property addi-of the years 1994 through 1997.
tions, combined with an carnings test provision, assuming an interest rate of 8.35% on any such additional Mortgage Bonds. An additional $443 million principal amount of Mortgage Bonds could have been issued on the basis of bond retirements, after giving effect to the actual and planned 1993 issuances of $340 million of Mortgage Bonds.
32 The Drirme IJ ma 1W2 Annuai Repon
l l
i l
l L
I 1
l.ong-term debt outstanding at December 31 was:
Innreu Rate 1992 1991 In:erest Rate 1992 1991 W"'"M Unswured O"* "O Installment Sales General and Refunding Contracts, Mortgage Bonds duc 12'l 5/15 - 12/1119 9.16*
$ 290,360 $ 387,360 Senes R, due 12/1/96 6
9 $ 100,000 $ 100J00 Irst Amout.t due Senes S. due 10'l/98 6.4 150JKK) 150,000 within one year (1 JKK))
Series T, due l2:l/99 9
75fKK)
$ 290.360 $ 386,3N)
Senes U, due 7/14K) 9 15 75,000 lan Agreements, Senes V, due l2 '1 MK) 8.1 $
100.000 100,000 due 6/15/95 - 10'l/24 5.94*
$ 61,550 $ 51,210 l
Senes X, due 615 '01 8%
100JKK) 100fxx)
Isss: Amount due Senes Y, due 11/15/01 7b 60Jh o 60J00
,g,
Senes Z, due l/15/03 E
100,000 100.000 gg M.M0 $
49.8 m Senes 55. due 3/15/96 10 4 40JKK) 60,000 1980 5ents B. due 4!!!97 12n 26.850 33,500 31.113.409 8 993.883 1986 Senes A, due 4/15416 9%
200fKo 200J KK)
Unsecured Promissory Notes 1986 5enes B, due 8/15 /16 94 100.000 Fixed mterest rates, 1986 5enes C, due l2,15/16 9%
2(x1000 200Jxx) due l/13/93 9.49
$ 70,000 $ 100fxK) 1987 Senes A,due 2<15'17 9
300,000 300Joo less: Amount due 1987 Senes B.due 4/15'97 sb 175JKK) 175fKK) withm one year (70A KK))
(30JKX))
1987 Series C due 4'15'14 9%
225,000 225JKo 70fKo 1987 Series D, due 8'15'92 9%
250Joo Totallong-Term Debt
$ 3,97 3.485 $4,218,264 1987 Series E,due 8:15'96 10 4 150fxK) i 1987 Series F, due 6'15 '93 9%
200foo 200Joo
,Weighrt i average interest rate at December 31,1992.
l 1989 Senes A, due 7/1/19 9%
300,000 300JKo 1990 5eries A,due 3'31/20 7.9M 175,812 182,091 1990 Senes B.due 3/31/16 7.904 228,384 237,900 in 1993,1994,1995,1996 and 1997,long-term debt 1990 Senes C, due 3731/14 8.357 75,218 78.637 maturities consist of $306 million, $36 million, $37 million, 1992 Senes D due 81'02
$136 million and $194 million, respectively. In addition, the and 8m22 7.629*
300s00 Company redeemed its $225 million 1987 Series C Mortgage 1992 5enes E.due 12.15!99 6.83 50JK)0 Bonds in February 1993 l
less: Unamortized net duount (10,i24)
(11,883)
Amount due within N O T E f 2 one year (2 0,864)
U85.664)
$2.860n,6 $3.15 u 81 Fair Value of Financial
'b;L;c *"c""c """'
Instruments Secured by gnesp>ndmg The Company adopted SFAS No.107, " Disclosures about Fair amounts of General and Refunding Ertgage Bonds Value or Financial Instruments, in 1992. SFAS h.o.107 rer.juires Inst.diment sales 11 companies to disclose the fair value of all financial instruments, Contracts. due both assets and liabilities recognized and not recognized in the 6/1/93-9:1 24 s*
$ 371.875 $ 367,410 balance sher, for which it is practicable to estimate fair value.
less: Unamomzed net Descriptive information pertinent to estimating the value of a dmount (308)
(104) financial instrument is required, if estimating fair value is not Fund < on deFsit practicable, with Tnntee (148)
(138)
The following methods and assumptions were used to estimate Am""nt d"e the fair vaiue of each class of fmancial instruments for which it is with n one year (4 %)
(810) practicable to estimate that value:
$ 370.984 5 366.358 Imn Agreements.
Cash and temporary cash investments /Short-term i
due 7/15/08 - 81/24 6w
$ 390.515 $ 268.540 borrowings lxw Funds on densit The carrying amount approximates fair value because of the with Trustee c'i.i 85) short maturity of those instruments.
$ 490.515 $ 191.n3 Other investments The fair value of the Company's other investments was not estimated due to each investment not being a material amount and because some are already recorded at fair value.
The Derrmr lium Hn2 Annud Repwr 33
I i
l NOTES T0 CDNS0LIDATED FINANCIAL STATEMENTS The Detroit Ed: son Company and Sut:sdary Companies Sale of accounts receivable and unbilled resenues See Note 4 for a dncussion of buybac k commitments to MPPA The carn ing amount approximates fair value because of the related to the Belle River Power Plant.
short maturity of accounts receivable and unbdled revenues CONTINGENCIES-In 19% the AG and the Mahigan Natu-pledged for sale.
ral Resources Commission fikd a lawsuit against the Company Preferred / Preference stock and Consumers as cmowners of Ludington. The Com;uny is a The fair value of the Company's prefernd and preference snx.k 49;; m,wner of Ludmgton. The suitl which alleges vioiations of outstanding is esumated based on the quoted market prim for the the Michigan Environmental Protection Act and the common law same or similar issues-for daimed aquatic losses. seeks past damages (includ ng interest) long-term debt of approximately $148 million and future damages (from the time The fair vahie of the Company's long-term debt is estimated of the filing of the lawsuit) m the amount of appnaimately based on the quoted market prices for the same or similar issues or
$89,50() per day (of which 49'i would be applicable to the Com-on the current rates offend to the Gimpany for debt of the same pang In Novemler 1990, the Court granted the Company's remaming maturities.
motion saking dismissal of the case upon whid. ue AG filed a (Idi "I "PP'"I-Customer surety de;msits In 1986, two environmental organizations requested FERC to Surety deposits, mdudme mterest as spnified by MPSC regu-
- 'thdraw the Ludington license or provide some mitigation for lation, are returned to customtrs The carrying amount approxi-fish mortality. In April 1989, Consumers and the Company were mares fair value.
s,
ordend by the FERC to install a tem;mrary barrier net around the The estimated fair values of the Company. hnancul mstru~
plant to protect fish on an interim basis until permanent measures ments at December 31 are as follows:
could be develoird. At this time, a net has been in operation for four seasons and tl.e companies have proposed that it be utilind as g
part of the permanent solunon. The Company is unable to deter-W ""
mine w hat the total cost of the permanent measures w ill be, how-Amount n!""
ever, pendmg a decision by the FERC, the companies intend to I
@"**E continue to operate the seasonal net at an estimated annual wst of C. ash and rem; nary ush imestmem 9A14 9A14
$3 million.
)
other mvermenn 4.s e 3.5 m in January 1989, the Environmental Protection Agency MM) WW m Wasmhe da ah & Gwakmw sale of at t ounts rn enaue rui unbmed rnenues 2oo.om 200.ots, Ennonmental Response Compensation and Liabihty Act order-ing the Company and 23 other potentially responsible parties Preferred Preferena suk 355 6 %
m',t M
("PRPs") to begm removal artisities at the Carter Industrials lonprerm debt 4 ""994>
4.r 4 s o
'- ~
~s superfund sir. On Septemler 30,1992, the EPA apprmed a C,on-shon-term borromno 2m994 2m sent Ikcree, signed by the settling PRPs, to conduct the requind rustomer surety am,sc 9Aos 9.so s dean-up of the site. The U.S Justice Depanment has presented the Carter matter to the U.S. Distnct Court for the Eastem Dis-tnct of Mic higan and the Consent Decree was given ta die Court on January 19,1993. The Consent Decree is antk ipated to become N O T E f 3 final following a public mmment penod The Company has ntorded a habihrt of $10 million as its antic parni cost of the Commitments and Contingencies dean-up.
The Energy Act betame effective in Ottole 1992. While the COMMITMENTS - The Company has entend into pun hast Company is unable to predict the ulornate impact of tha lecisia-
=
commitments of approxirnately $ 450 mdhon at December 31, sn on iis operacions, the Company exin es that, over time [ non-1992. The Company has aho entered into substennal long-term nemon mm d kdeveloped w hic h will resuh m fuel supph and transportation commitments.
reater competition for power sales. Sw Note 1 - Regulation.
The Company has an Energy Punhase Agreement FAgrte in additior. to the matters reported herein, the Company is ment > for the purchase of steam and dectncity from the Detrmt involvni m bucanon and environmental martt rs deahng wah the Resource Recoverv Facility. Under the Agreement, the G;mpany mmerous aspeits of as business o;rrations The Company behtws wdl purchase steam through the year 200S and dectricity through that such horation and the matters discussed above wdl not hase i
June.30,2024. Purchases of steam and electricity were $21a a material eft'n t on its finantial posinon or resuhs of operations.
million for 1992 and annual purchase tomnutments are approx" See Note 2 for a discussion of contingencies rdated to Fermi 2.
mately $20.8 milhon 52 4., mdhon, $25 3 mdhon, $303 md-hon and $%4 milbon for 19W,1994,1995,1996 and 199',
respecth dy.
34 The theroa I dwt> 17 C Antiaa! kep>rt
N O T E f 4 The following table reconciles the funded status of the Plan to the liability rttordalin the Company's Consolidated Balante Employes, Retirement Plan and Sheet:
Other Postretirement Benefits D_mk,,,
199
1991 EMPLOYES' RETIREMENT PLAN - The Company has a (Thuuwm41 trusteed and non-contributory defined beneft reurement plan FPlan") mvering all eligible e;nployes u ho have mmpleted six Plan assets ai o,r value, pnmanly equiry l
months of service The Plan provides retirement benents based on and debt secunnes
$96% 5950m the employe's years of benefit sersice, average final compensation less actuanal present value of benefit and age at retirement. The Company's pdicy is to fund pension obhganon:
cost calculatal under the projected $ nit credit actuarial cost
^" "*".Id'*d b'""O' "hh "' i""' I"'I"d*F F
vested nenefits of $793,4 % and method, provided that this amount is at least equal to the miru-p3 33 7,,,,j y gyg 73,3gg mum runding requirement of the Employee Retirement income Increase in future compensanon levels 1 v.066 120.158 l
Security Act of 197, as amended. and is not greater than the Prokaa knent obhganon 951.013 893.538 maximum amount deductible for federal income tax purposes. The Pun assm in cuess of proieuni beneni l
Company was operating under the IRS full funding hmitanon obhgation 15,987 56.462 and, therefore, did not make a contribution to the Plan in 1990 Unrecoenited net asset n.sulting from ninal and 1991. In 1992, contributions totaling $23 ' million were apphinon (42.30 3 (46,809 made to the Plan.
Unnu,gnized net gam
( 12,8M) (41,222)
Net pension cost induded the following components:
Unrnornued pnor servue cost 45.456 14.880 Liabihty rnorded as Other Ikferred Crnhts 1992 1991 1990 m the Consolidated Balanc e Sheet S 6 / 63) 5(16.689)
( Thua:.ndu l
sen ne u>st - benc6ts camed Assumptions used in determining the projated benefit during the penod 5 21,644
$ 18.058 5 l',886 obligation are as follows:
Interest cost on projected bene 6t obligation
'O.511 65,48' 61.950 hmkr 31 Actual return on Plan assns (56.20N t 180.225 )
(18,150) l Net deferral and amornratnn:
1942 1991 Deferral of net gam (loss)
Discount rate 8.07 8 09 dunny current penod (2 4,52ro 104 %.
(54,9Yn Increase in tuture u>mpensation leseh 5.0 5.0 Amortizanon of unrecognaed pnor sertue ust 2,' 6 1.164 M8 Amoruzanon of unruognued The unrecognized net asset at date ofinitial application is net auer resultmg from being amortized over approximately 15 A years, which was the mital apphc anon n.;07 (4,507 a 50')
average remaining service period of employes at, January 1,1987.
Net pensmn cost s 10.688 5
4.73
,.068 In addition to the Plan, the Company has several supplemental non-quahfied, non-contributorv, unfunded retirement benefit plans for certain management employes.
Assumptions used in determining net pension wst are as follows:
OTIIER POSTRET)REMENT BENEFITS - The Company provides certain postretirement health care and hfe insurance 1992 1991 1990 benefits for retired employes. Substantially all of the Company's employes will become eligible for such benefits if they reach retire-eYm t$ture o>mpensation levels mem ge while still working for the Company. These benefits, as I
Expected long-term rate of rerum on w eH as similar benefas for acave employes, are provided pnnce Plan auets 25 95
- 9. 5 pally through insurance companies and other organizations. The premiums are the benents and administrative msts paid during the year. The Company nrognizes the mst of providing these benefits as the premiums are paid.
Tne Iktra Eikon 19W Annual Re put 35
NOTES T0 C0NSOlIDATED FINANCIAL STATEMENTS The Detroit Ed: son Company and Substary Companies N O T E f 5 1992 iwi 1990 Supplementary Quarterly m-" >
Cost to the Company of prouding heahh tare and hichnsurance RBRCIBlInf0TMBil00 (Unaudited) beneras to employes Acnve emplo>es
$47,982 $45.028 $38,(,20 j.,
Renred employes 23A46 22,695 19.o(,6 Total
$71 A28 $67.723 $57,686 M ^r 3I. lune 30 Sept.30 Det 31 (Thom1ank ez cpr je s/wr anwnto
$sv 82
,902 i 1,u6 869
_50,936 y19,522 q45A43 p7,255 4 "*"ng Revenon
.In December 1990, the FASB issual SFAS No.106, " Employ,,
Operatmg income (a) 3 ers Accounting for Postretirement Benefits Other Than Pensions.
gy, jn,,mc 156,105 125,774 155,370 150J98 SFAS No 106 estabbshes financial accounting and reporting Earnings for Common Snx k 148,353 118,072 147J71 143353 standards for employers that offer postretirement benefits other Earnmgs Per share 1.01 0 80 1.01 0.98 than pmsions. Most employers, includmg the Company, have accounted for such benefits on a pay-as-you-go (cash) basis. SFAS No.106 requires the accrual of postretirement benefits during the 199i quann i naea active service penods of employes to the date they attain full eligi-a y 33 p, 3g g zg gy, 33 bility for benehts. The Company is adopang the provisions of SFAS No.106 in the 6rst quarter of 1993 as required The transi-5"""d"^ "P' /" 'Ad" "'"'*""1 tion obligation at the time of adoption is estimated to range from Operating Revenoes
$s64,697 $886.561 $970A44 $h69.835
$525 million to $538 million and is expected to be amornzed over Qrrarmg Inu>me W 227,636 230.211 261,683 224,368 N" income M 133,093 135,525 163A84 135,936 20 vears. The lower estimate would rquire certain plan revisions.
The Company's incremental cost upon adoption of the new stan-E'"""F' '"r Conunnn sua 124J49 127,186 155352 127,918
'*'"*F'""*^'"
U 87 3 #'
"8 dard is estimated to range from $55 milhon to $58 milhon (depending upon the level of the transition obbgation) for 1993 W Operaung income has been rntated due to the ret lassification of which will he deterred pending a final order in the Company's rate expenses asscoured wnh the s,de of accounts receivable and unbilled
- case, revenues from other operation expense to other mcorne and deduc nuns.
On December 8,1992, the MPSC ordered that Michigan utili-I ties implement SFAS No.106 and that reasonable and prudent M N" 'nu>me fx the quann ended Ihemier 31,1991 mdudes $123 mahon ($0 gu stani nsuinng fmm e nwnsa o a hatulay fm aurual basis costs of postretirement benefits be adopted for the Michigan Smgle Itusiness Tax Capaal Alqumoon Deduaion raremaking in general rate case Olings, with external fundmg of apphcable to the year ended Ihember 31,19M benetits required after issuance of a rate order. The Com;uny expects that remvery of the incremental expense resulting from the Earnings per share amounts for each quarter are required to be adoption of SFAS No.106 will be providal in its pending rate case with no effect on net inwme.
c mputed independently and, therefore, may not equal the amount computed for the total year.
I l
36 The Iktnnt Edmn 1W2 Annual Rc;mrt
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS The Detroit Edison Company and Subsidiary Compames This discussion and analysis should be read in conjunction with KilowatthourSales the Consolidated Finasial Statements and accompanying Notes Kdowarthour sales increa-. idecreased) as follows:
thereto, contained herein.
39g 3993 Bssultsof0perations nes>denti i (7m 62*
"*"eraal (2m 2.1 In 1992, the Company's earnings for common stock were
$557.5 million, or $ L79 per share, an increase of 4.2W fmm the
[
h,f'
$535.2 million, or $3.64 per share earned in 1991. The earnings 7,,,, sy,,,,n to 9, 3.3 increase for the year was due to lower operating expenses, includ-
,m.. onnenmn (42.n (53.43 ing continuing reductions in fuel and purchased power expense, rot.d 6m 01.0 and interest savings associated with the early redemption and
.indudes sales for resale and unbated sales.
refinancing of high-cost debt and the redemption of maturing debt. The expense reductions were partially offset by lower operat-1992 ing revenues and lower non-operating income. The decrease in op-The decreases in residential and commercial sales were due crating rnenues for the year resulted fmm lower system sales due primarily to cooler weather during the searnd and third quarters to unseasonably cool summer temperatures and lower intera>nnec-which resulted in reduced air conditioning and avling-re'ated tion sales, partially offset by previously approved rate increases.
kuds, partially offset by gmwth in the number of customers.
At Detember 31,1992, the book value of the Company's com-Industrial sales increased primarily as a result of higher sales to mon stock was $21.13 per share, an increase of 97 since Decem-automotive and other manufacturing customers reflecting better ber 31,1991. Return on average total common shareholders' economic conditions. The increased sales to other customers reflect equity was 18.61 in 1992,19.59 in 1991 and 19.1W in 1990.
increased kud requirements of wholesale for resale customers.
The ratio of eamings to fixed charges for 1992.1991 and 1990 3993 was 3.09,2.74 and 2A2, respectively. The ratio of earnings m Residential and commercial sales increased due primarily to fixed charges and preferred and preference stock dividend require-warmer weather during the second and third quarters resulting in ments for 1992,1991 and 1990 us 2.79,2.50 and 2.21, respct-increased air conditioning and cooling-related loads, cooler wea-tinly.
ther in the fourth quarter resulting in increased heating-related loads and gmwth in the number of customers. Industrial sales OPERATING REVENLTES decreased pnman,ly as a result oflower sales to steel and automo-Total operating revenues increased Idecreased') due to the tive customers, reflecting recessionary conditions and competitive following factors:
pressures on the automotive industry. The increased sales to other 1W2 IWI customers reflect changes in unbilled sales and higher sales to Mfd! ann wholesale for resale customers R"**"*
Interconnection Sales 89 8
Interconnection sales represent sales between utilities to meet st b t
n pnx edure y
short-and long-term energy needs as a result of demand and/or g
generating unit availability.
System sales volume and rmx 04) 73 Intertonnection sales (4')
(l(d)
Interconnection sales and revenues decreased due primarily to Energy transrnisuon senne (2n lower sales to Consumers Power Company and Ontario liydro.
Pronsion for refund to custorners 12 Other - net (4) 1 1991 Toul
$ G3)
$ 15 Interconnection sales and revenues decreased significantly due to lower sales to Ontario Hydro. This decrease is offset by a corre-sponding decrease in purchased power expense, with no (Eect on Rate Changes l
A December 1988 Michigan Public Service Commission
("MPSC") rate order, issued as a result of a settlement agreement, Energy Transtnission Service prosided for a Fermi 2 phase-in plan and granted $527.1 million Energy transmission service rewnues represent fees for the trans-i of rate increases and other rate changes for Fermi 2 to be phased in mission of electricity for other utilities over the Company's trans-mission lir.es. The demand for this service decreased in 1991 from over the seven-year period 1988-1994. The order also prmides for a moratorium on other base rate changes for the five-year period the higher levels experienad in 1990.
1989-1993, an expense stabilization procedure (" ESP"), which Provision forRefundro Customers pmvided annual trvenues of $27 million, $55 mdbon and $63 The increase in 1991 was due to a 1990 provision for refund to million in 1990,1991 and 1992, respectively, for the effects of customers of prior years' PSCR costs due to a refund to the Com-inflation and a suspension of the Power Supply Cost Recmtry pany of pro;erry taxes on the Michigan Pubbc Power Agency's
("PSCR') Clause for the four-year period 1989-1992. Revenues ownership interest in the Belle River Power Plant. This increase in l
ccliected under the ESP expired for senice rendertd on and after operating revenues was offset by a correspondmg increase in pur-January 1,1993 and the PSCR Clause has been reinstated in 1991 chased power expense, with no effect on net income.
As a result of these two items,1993 operating revenues wdl be reduced by approximately $170 milhort w runs ihn um Ann =1 neien 37
I MANAGEMENT'S DISCUSSION & ANAL YSIS OF FINANCIAL CONDITION & RESULTS OF OPERA TIONS The Detroit Edison Company and Subsid.ary Compames OPERATING EXPENSES l DeferredFenni2DepreciationandAmortization Fu:IandPurchasedPower 1992 and 1991 Fuel and purchased power expenses decmased due to the Deferred Fermi 2 depreciation, a non-cash item ofincome, was following factors:
recorded beginning with the implementation of the Fermi 2 rate phase-in plan inJanuary 1988. The annual amount deferred de-3 9p~
g creased each year through 1992. Beginning in 1993 and continu-ing through 1998, these deferred amounts will be amonind to n[t$t erating expense as the cash recovery is realized through rev,
emet n enm 2 amortization, also a non-cash item of m-Other 7
(5) mme, w s remrded beginning with the Company's purdiase of the Total
$161)
$a 53)
Wolverine Power Supply Cooperative, Inc/s (~ Cooperative") own-ership interest in Fermi 2 in February 1990 The annual amoant Net system output and average unit costs were as follows:
deferred decreases each year through 1999 n992 s991 1po Taxes Other Thanincome Taxes
~
ah
.A 6%n.miei 1992 Power plant genmoon Taxes other than income taxes increased due primarily to higher Fossd
% 689 40.243 40,442 property taxes and an increase in Michigan Single Business Tax Nudear 7,338 6.157 7,000 CMSBT") expense due to the 1991 reversal of a liability for the Purchased power 2J05 3.133 U21 Capital Acquisition Deduction applicable to 1990, partially offset Net system output 46.732 49.533 55353 by lower MSBT expense recorded for the current and prior years.
Average urut cosr t$ Nepwarthour)
$16 49
$16 94
$134
]99]
Taxes other than income taxes decreased due primanly to the re-The decreases in average unit cost reflect dechning fuel prices versal of a liability for the MSBT Capital Acquisition Deduction due to greater use oflower-cost Western low-sulfur coal, lower applicable to 1990, partially offset by higher propeny and payroll l
purchases of energy from other utilities and, for 1992, greater use taxes.
oflow-cost nudear generation. Because market condinons have
/ncome Taxes changed and the Company is able to purchase cual at prices low er 1992 and 1991 than some existing long-term contracts, the Company is buying locome taxes increased due primarily to higher pretax income out fuel supply contracts whenever it is prudent and economic.
and the reduction of deferred Fermi 2 depreciation, amortiration Other Operation and return.
1992 DeferredFermi2 Return Other operation expense decreased due primanly to expenses 1992 and 1991 l
incurred in 1991 under an arrangement which pnnided for the Deferral Fermi 2 return, a non-cash item of income, was re.
voluntary separation from service of cenain employes, lower incen-corded beginning with the implementation of the Fermi 2 rate rive award expenses related to a shareholder value imprcnement phase-in plan in' anuary 1988. The annual amount deferred de-J plan and lower environmental. fossd plant and storm expenses.
caed each year through 1992. Beginning in 1993 and continu-These decreases were partially ottser by an accrual for low-level ing through 1998, these deferred amounts will be amonized to nudear waste disposal and higher ret rement plan expenses, operating expense as the cash ecovery is realized thmugh rev-1991 enues.
Other operation expense increased due primarily to higher Otherincome andDeductions uncollectible, employe insurance, environmental. mnsultant and 1992 injuries and damages expenses. These increases were panially offset by lower nudear plant pnduction expenses.
Other deductions decreased due primarily to premiums and Maintenance expenses incurred in 1991 for the early redemption of General and Refunding Mortgage Bonds CMortgage Bonds").
I 1992 1991 1
Maintenance expense decreased due primarily to lower nuclear Other deductions increased due primarily to premiums and plant maintenance and storm expenses.
expenses incurnd for the eady redemption of Mongage Bonds and 1991 a contribution to a charitable foundation, partially offset by the Maintenance expense increased due primarily to higher nudear expense in 1990 of establishing a decommissionmg fund for Fermi plant maintenance, line dearance and storm expenses, panially off-1, an experimental nuclear unit that has been shut down since set by lower fossil plant maintenance expenses.
1972.
Depreciation andAmortization Accretionincome 1992 and 1991 1992 and 1991 l
Depreciation and amort zation expense mcreased due to in-Accretion income, a non-cash item of income, was recorded creases in plant in service.
beginning in January 1988 to restore to income, mu the period 1988-1998, losses recorded due to discounting indirect disallow-38 The rkttmr 1.dum 1992 Annual Report
l 1
l ances of plant costs. The annual amount of accrenon income tv-at tivities, exduding changes in current assets and liabilities, in-corded dctreases each year through 1998.
creased Joe to hight r net mcome, higher non-cash charges to income Taxes - Disallowed Plant Costs and income (depreciation, amortization and defernd income taxes) and Accretionincome lower non< ash items of income (defernd Fermi 2 depreciation and l
ret urn).
y~
Net casis used for investmg activities mcreased in 1992 and Income taxes incn2 sed due to urdization in 1991 ofimestment 1991 due to higher expenditures for plant and equipment.
tax credit carryforwards related to disallowed Fermi 2 plant costs.
. The Company has increasingly utilized cash for 6nancing activi-which were recorded under the now-throuch method when uti-g' nes. Opo.onal and mandatory redempo.ons or high-cost long-term debt and preferred and preference stock mcreased following Interest Charges u>mpletion of the Company's power plant construction program 1992 and 1991 in 1988. In 1992, there was a substantial increase in debt re6nanc-Interest expense on long-term debt decreased due to the re-ing. Assuming favorable economic wnditions, the Company demption of maturing securit es and the early redemption and expects that it will continue to re6nante eustmg high-cost debt re6nancing of high-cost secunties.
and equity securities.
Preferred and Preference Stock Dividend Requirements AdditionalInfonnation 1992 and 199]
On January -',1993, the Company issued $225 million of its Prefnad and preference stuk dividend requirements decreased 1993 Series C Mortgage Bonds at an average interest rate of due to optional and mandatory redemptions of outstanding shares.
19391ri dueJanuary 15,2003 and January 13,2023. The pro-cads of this issue were used in February 1993 for the early re-IJQUldifyand Cap /fal86SOUFCes aemnion of the Commny 19s, Series C. 9x,1, uenyage s
The Company's hquidity has improved since the 1988 commer-Bonds.
cui operation of Fermi 2, a nudear generating unit comprising On February 8,1993, the Company issued $50 milhon ofits 329 of the Company's assets. a a result of scheduled rate increases 1993 Series B,6.839, Mongage Bonds due Dnember 15,1999 in accordance with the Company's December 1988 MPSC rate at a 'Jhunt of 99 6239.
i order and lower levels of capta] expenditures.
Orar about August 3,1993, The Economic Development Cor-fermi 2 piration of the County of St. Clair, State of Michigan FSt. Clair The commercul operation of Fermi 2 completed the Companv's FDC") is expu tal to issue $65 million ofits Series 1993 AA Bonds,6.409. The procuds of this issue will be used to refund power plant construction program. The Company has no curren't plans for additional generarme plants. Ownership of an operatine cenain outstanding collateralized tax exempt bonds. The Com-nudear generatine umt such A Fermi 2 subgxrs the Compant t; pany will repay its obligations to the St. Clair EIX' with respect to sigm6 cant additional risks. Nuclear plants are hichiv ngulated by the Series 1993 AA Bonds pursuant to a loan agreement which
~
u*ill be collateralind by the Company's 1993 Series AP Mortgage a number of govemmental agencies concerned with public health and safety as well as the environment, and consequentiv, are sub_
Bonds, due August 1,2024.
iect to creater risks and scrutiny than conventional fossil-fueled The Company has an effective shelf registration statement per-
~
plantsf mitting the issuance of up to 2 mdhon shares of prefernd stoc k.
At December 31,1992, fermi 2 was insund for property Jam.
A Nos ember 6,1992 MPSC order permits the Company to age in the amount of 52.59 bdhon and the Company had available issue approximately $3.5 billion of securities for the purp>se of
$14 billion in pubhc habihty msurance. To the extent that insur.
tv6nancing debt and prefernd and'or prefcrence stock prior to able claims for replacement pm er, property denage. decontami.
maturity N hen economic)and at maturity, and to replace funds nation, repair and replacement and other mts arising from a uvd for those pumoses. The Company is now authorized to re6-nudear incident at Fermi 2 exceed the policy limits ofinsurance, rance substantially all of its outstandmg taxable debt, as well as or to the extent that such insurance becomes unavailable m the preferred and paierence stock, with interest or dividend rates in future, the Company wdl ntam the risk of hm. Although the excess of' 91 Induded withm this $3.5 bdlion of refmancing Company has no reason to anticipate a serious nudear incident at authority is the ability of the Compaqy to replace approximately Fermi 2, if such an incident did happen it could have a material
$455 milhon of cor;, orate funds utilied for redemptions over the but presently undeterminable adserse impact on the Compant's twelve month priod ended September 30,1992. The Company liquidity and fmancal p>sition.
also has MPSC authonty to refmance substantially all non-tauble In February 1990, the Company purchasul the Cooperative's debt obligations issued pnor to 1990 11.1989 Fermi 2 ownership interest it r $539 6 million (5515 Cah requirements for schedukd long-term debt and preferred
~
mdlion for plant, $23.2 railhon for nodear fuel and $3A milhon md preference stock ra!cmptions are expected to tr 5545 million for materials and supphes and othert tincludmg $225 million for the optional redemption of the 1987 Series C Mortgage Bonds in February 1993 and $5 million for the C shGenerationandCashRegm.rements opional ndempion of Prefernd and Preference Stock in January Consolidated $tatement ofCash flow 5 1993L 542 mi!! ion 543 milhon. !142 mdlion and $200 millio'n The Company generates substantial cash flows from operatina for 1993,19911995,1996 and 19T, respstivelv.
activities as shown in the Consolidated Statement of Cash Flows-Effective April 15,1991 and 1992, the quarterly common stock Net cash from operating activities, w hich is the Company's pri-dnidend was mcreased from $0A 45 per share to $0A7 pt share mary source ofliquidity, was 5923 million in 1990, $952 million and from $0#' pr share to SOA95 per share, respecovely.
~
in 1991 and $1.063 million in 1992. Net cash from op rating h Ikw Iden % An%d lopin 39
MA NA GEMENT'S DISCUSS 10?d & ANAL YSIS OF FINANCIAL CONDITIO?d & RESUL TS OF OPERA TIONS The Detroit Edtson Comparg and Subscary Companies l
I Cash nyuirements for capital expendituns were $413 million i
The Energy An aho gives the Ftderal Energy Regulatory Com-in 1992 and are expn red to be approximately $2 bdlion for the mission ("fl RCl brmd discretionary authonty to order transmis-penod 1993 through 19C Emironmental expenditun s are ex-sion auess for wholesale pwer supphen u hen such auess is pried to approximate 5~1 mdlion over this same perid mtlud-deemed to be in the pubbt interest. The FERC is nyuind to com mg expenditures for Clean Air Act mmpliante requirements. See p!ete certain rulemaking action on a number ofitems relating to
~Emironmental MattersJ In lW3. ush requinments fir capital the Energy Act within the next year.
j expenatures are esnmatni at $ i12 milhon.
The uhimate impact of this legislation is not fully known and The Company's intertul cash generanon is expect d to le surii-the impact on the Company's oirrations cannot be currendy quan-dent to meet cash nyuirements for upit.d expenditures as well n6ed. However, the Company exptts that, oser time, non-utdity l
as schululed long-term debt and prefemd and preference stak generation resounts will be dnelopd which wdl result in greater adempoon nyuirements competition for power sales. In addition, the MPSC is currendy The Gimpany mcreastd its allowante for uncollatible atcounts considering an experimental retail uheeling rate (applicable to from $10 mdhon to $23 milhon dunng IW1 and to $32 milhon approximately 90 megawatts) which could potentially allow dunng 1W2 due to the erTeas of economic condinons in the retail consumers auess to generation resounes other than the Company's semce area on ertain customer segments.
Company's.
At Dnember ;1. lW2. cash and temporary cash imestments Meeting EnergyDemands totaled $N mdlion. The Gimpany had total short-term cndit During the past 15 y ears, mmpound annual sales growth was arrangements of $%3. milhon at thember 31,1992, under 1 percent and rak demand growth was 2 percera (after adjusting I
u hich 529 mdbon of borrowmys were outstandmg.
for the effa ts of unusual weathert System sales atJ demand are Capitalization opnted to grow at a mmpound annual rate of about 1.3 percent The Company's capital struaure ranos (exduding amounts of per year for the next 15 years Future s. des growth wdl be limited long-term debt and preferred and preferente snx k due within one by ex;rcted plant dosings by General Motors and other automo-year! were as follou s:
rive-related busmesses.
Sales to the non-manufacturing segment, which indade cus-g,g, y pm pm pu, -
tomers such as agribusiness, gnxery stores, restaurants and govern-ment are projected to grow at the strongest pace m the next 15 common wrchourtc tyum m
m en prs, a compound annual increase of 1.7 pen ent per vear. This snxL a5 4x a
Preferngna grewrenu prointed increase indicates the Company's customer base is be-Inrw/Ierrn hnt 54 5
%s 6M commg more diserse and less deirndent on the manufactunng loo m 10000 unow segment.
The Com}uny expects to meet its near-term demand for energy Ahhough the Gimpany has no plans to issue addinonal shares by the return to seruce. subint to environmental regulations, of i
! ofits common sun L. the Company's Restand Artides ofIncorN>-
power plant units currently in economy reserve strm when energy ration were amended m 1W1 to mcrtast the number of authorized demand and consumption requ rements prmide economic jusn6-shares of mmmon sutk from 160mt000 to 400Muxxt The cation. The return to service of these units is conditioned upon the l
authorind in< rease in mmmon stot k proudes the Company with outmme of a competitise bidding pnx ess which was established l
aJditiona! Gexibh:3 n 6nanu.d matters by an MPSC order asued on July 22. lW2. The order ruluins the i
Competition Company to Gle a Request for Proposals PRI P") on March 1, i
An ehrtric pubhc utihty must compete with other enerec su 1W3, detaihng future capacity and energy requirements. Follow-phers to meetits customtrs enerer ntnis. Senous issues flam p_
the mg MP5C approval of the initial RFP. bids wdl then be sohdted entire ehttric unhtv industrv m2iude dereculation munidpaliza_
from other supply-side souras and may ab.o indude a bid from the tion, mgeneration. mdgrnd' nt power pn Aluction and open access Com;uny to provide the nnded upac icy and energy. Bid evalua.
~
e to transmission. Unbry c ustomers have the opt on of self-genera _
tion and selection will be performed by the Company and moni-t 1
non or mgeneunon and. dependmc on the extent of future de.
tored by the MPSC.
regulation. rnay be able to enter mio contraas with other power
/nflation suppliers. In the furure, rather than being solely a suppher of ths-Intlanon is a measure of the punhasing power of the dollar. For l
triary. electnc unhnes rnay be requind to unbundle the pncmp the years 1992 and IWl, mflation mcreawd moderately, however, of their prcducts and seruces.
as a resuh of the L$P estabbshed by the lhember 1988 MPSC On atober 24. Un2 the Energy Pohcy Aa of 1W2 C Energy rate order. the Company has not experienced a loss in purchasmg I
Au") became law. This new legalation is exptred to t reate a power w hen wmpared to pnor perish. Revenues miletted under j more mm;rt tive bulk power supply market. In addmon, the the L5P expired for service rendemd on and afterJanuary 1, lW3 j Ener,qy Act amends a numirr of energy or energy-related statutes.
The Gimpany has requesux! rate nrovery for the effects ofinfla-l l
Prior to the enactrnent of the Energy Act, the Public Unhty t on m its rate use pendmg Iriore the MP5C. See " Regulation and i
Hokhng Company Act of 19D FPCHCA") seserely brmted the Rates!
dernt to whic h non-unlity enterprises muid engage in the pubhc Regulation andRates utdity business. The Energy Act estabbshes an exemption from Ik Denmber 19S8 MP5C rate order was designed to permit the provisions of PU)iCA for non-utihty generato s engaged ex-de Gimpny w ecowr from the effnts of a major comtruction dusisely m wholesale market sales, spxifymg that such entines program and the write-off of ertain plant costs. While the order will not be mnudered ekxtnc unhty wmparnes under PUIICA.
pmuded fou mmtonum on most base rato changes, it permitted 40 w % : t a - naw roi.on l
the Company to adjust estes for the etiects of mtlation on operation j which amount to approximately $1.8 billion at December 31, and maintenance expenses through the ESP. In addition, o 2 The Gepany. ;Japting SFAS No.101in the 6tst quarter pnded the P5CR Clause which allouxd the Company to immedi-of 1993 and, as a nsult w ill runn! an increase in accumulated ately realize the benc6ts of improved generanng system perfor-defernd inwme tax liabilities of approximately $40 million otT-mance and cost cutting etTorts dunng the moratorium penod.
set by an equal regulatory asser, representing the future nxenue The ESP allown] rates to partially rtdect the effnts ofinflation reawery from customers for these taxes as they bnome payable,
~ ~ and nsulted in a sunharge for each of the calendar years 1990, with no erlec t on net income.
s 1991 and 1992. The surcharge was termmated for service on and On February 8,1993, the M P5C issun] an order, in a generic afterJanuary 1,1993.
proutJmg, authorizing accounting pnxxduns consistent with The suspension of the P5CR Clause ended Dnember 31,1992.
5FAS No.109 anJ prmiding assurance that the etints of previ-In an order dated OaoM 19,1992, the MP5C appmrtd a settle-ously 6 owed-through tax bene 6ts will watinue to be allowed rate ment agreement reinstating the P5CR Clause in 1993. The 1993 recovery.
P5CR Clause wdl re6ect fuel economies achiemi during the EnvironmentalMatters suspnsion peri (d Prourting the environment from damage, as well as correcting The Company has pendmg before the NN an application past em ironmental damage, continues to be the focus of state and nyuestmg an increase in base rates in the annual amount of $91.6 ftderal regulators. Committees at both the state and federal lesel million, based upon a 1994 rest year and a 131 return on wm-are studying the etiects of a wide array of chemicals and ekctro-mon equiry. The nsjurst for an increase in base rates reflects: (1) magnetic 6 elds as well as global warming (as potentially atiecnd increased Fermi 2 demmmissioning costs. (2) increased wsts asso-bv carton dioxide emissionst legislation and or rulemaking re-ciaad with implementing accounting changes related to other stilting from these and any future studies could impact the electric postretirement benriits,(3) the wsts associated with the retum to utility industrv including the Company.
rate base of the Greenumd generanng unit. M Fermi 2 phase-in Tlie Envindrnental Protection Agen'cy CEPA")and the Michi-plan revenue nyuirements in 1994, a 5) a fne-y ear $75 milhon pan Department of Natural Resounes have aggnssne programs demand-side management program and (6) other mflationary in-regardme the cleanup of contaminated pmperty. The Company creases The Company is required to uplate this appbcation by anticipates that it will be periodically included in these types of April 30,1993. It is anticipatal that the MP5C wdl issue an order environmental pnseedings. Further, additional emironmental effectis e for senite rendered on and after,lanuary 1,199 L expenditures will be nuessary as the Company prepares to compiv in 1993, as a n-sult of the termination of the L5P and the re-with the 1990 Amendments to the federal Gean Air Act CCAA'i.
instatement of the PSCR Clause, as discussed abme, the Com-Title 111 of the CAA, Hazardous Air Pollutants, nyuires the pany's operating revenues will be ndu ed by approximately 5170 EPA to conduct a thatsyear study on toxic air emissions from mdlion. Although wst sarmps are vigorous!> bemy pursued, utility boilers, as well as a four-year study of mercury cuissions system investment, customer sente improsements and the sched-from fossil fuel-6nd toilers, to determine u hether regulations are uled rate redunions wdl lower camings m DM.
nquirni Until such studies are completal and resultIng regula-Accountingissues tions, if any, are promulgarnl, the impact on the Gimpany cannot The Company is adopting the provisions of Statement of hnan-be determmed.
cial Accounnng Standards FSFA5") No.106. ' Employers' Ac-Title IV of the CAA, Acid Deposition Control, rniuires a two-munting for Postretirement berfus Other Than Pensions," in tht phase reduction in sulfur dioxide r50.") emissions from 19S0 6rst quarter of 19W as required. The transition obhgation at the leveh by the year 2000 The Company currently meets Phase I time of adoption is estimated to range from 5525 mdlion to 553H
- 50. emission requirements. Phase 11 begins in the year 2000 and mdhon and is expected to be amornred mer 20 years. The lower pnwides that electric utility units greater than 25 megawatts uill estimate would reqmre certain plan revisions. The Company's be held to total annual 50 emissions tused on a formula. The incremental mst ujon adoption of the new standard is estimand Con.pany currently bums low-sulfur coal (less than one pnent to range from $55 mdhon to 558 milhon (depending upon the su! fur) at all ofits wal-6 red units and believes it can meet the ksel of rhe transition obhganonHor 1993 which w ill be deferred Phase 1150 emission requirements through additional blending pendmg a fmal order in the Company's rate case. On Dn ember H.
of coals. The additional blending muld result in increat,ed annual 1992, the MPSC ordend that 5bchigan unhties implement SFAS fael costs of approximately $ 10 million per year. AdditionJ capi-No.106 and that reasonable and prudent accrual basis u>sts of tal expenJitures are expecnd to be mmim.d.
postrentement bene 6ts be adopted for raremakmg in general rate The Company is not atietteJ by Phase i nitrogen oxides case 6hngs, with external funding of bene 6ts rnjuired after issu-FNOx") ermssions reqmrements under Title IV. The Phase 11 ante ofa rate order. The Company expects that rnovery of the NOx emissions reducnons may n11uire the installation oflow-incremental expense resulting from the adornon of 5FAS No.10f.
NOx burners on most Company units by the year 20(n However, wdl be prosided in its pendmg rate case with no effect on net there are ambiguities in the amendment which, under provisions income.
of Title 1, may require the mination ofinstallation oflow-NOx in February 1992, the Emancial Auountmg Standards Board bumers by May 1995. Capital expendituns. estimand at approxi-issued SFAS No.109, "Accountmg ti>r Inwme Taxes," uith an mately 5160 milhon. may be incurred to comply wah these re-efintive date of 1993. 5FAS No.109 reqwns an asset and hability quirements.
apprcuch for Gnancial accounting and nporting for mcome tam.
The Company bebens that substantia!!y all of the costs of envi-It rniuires the Company to(1) rewmpute its tax liabday at the ronmental wmphance wdl be n1mered through the ratemaking then current tax rate and adjust the accumulated defemd income pra ess.
tax balances in the balance sheet and (2) rewrd add:tional deferred income taxes for temporary dirietta es not pasiously rewgnized na tw,a inn we waa um,n 4l
COMP A R A TIVE RESULTS OF OPER A TIONS ows n re:ses The Det cit Edun Compary eM Scbstary Compames 1992 1991 19'>0 19H9 Operating I leunc - 5ystem 53,472,583
$ 3,4 5 8,8' l
$ 3,279,2 is
$ 3,171,456 Res enues Fleura - Intt rwonet tuin 58,447 105,399 169.54'
'02,574
)
Steam 27,113 27,267 27,491 31,575 lotal O;x ranng Rn enues
$ 3,5 58,14 3
$ 3,591,5 47
$ 4,5'6,281
$ 3,405,605 Operating Operanon Lxpenses Fud 5 704,371
$ ~ 5 8.467
$ '*88,35 5
$ 820,'65 Pun based pow er 126.101 133,498 256,400 344,814 Other operat on 548.520 567,275 523,630 4 N5,680 h r.tenann 262,803 289,670 2'9,528 291,365 IA preoarion anj amorn; anon 423,407 412,253 406,;30 371,682 Deterred iermi 2 deprenation and amortuanon (14,984)
(27,58s) 0 9,208) 6 5,234)
Taxes orher than mcome 252,011 243,122 254,661 230,193 Int ome taxes 302,758 2 0,937 215,930 135,H1 Tond Operatmg lapenses
$ 2,604,987
$ 2.647,6;9
$2.685.626
$ 2,644,596 j
Operatinc lncome 5 953,156
$ 9 6,898
$ 890,655
$ 761,009 Other Int ome Allounte for other funds used during constructon 5 1,363 5
1,459 and Deductions Deferred iermi 2 return 13,785 4',566 78,379 107,169 Other miomc and dedut nons (21,l'9) 64,0~4:
(24,973)
( 16,104 >
Income taxes 7,108 12,215 8,304 6,548 Disallowed p! ant tosts Au renon mt ome 45,695 47,29s 48,794 50,188 Irsome taxes - disallowed plant c osts unJ aurenon mtome (15,576)
(6,48m (s198)
(17,047)
Net Other Income and ikductions 5
31,196 6',984
$ 102,;05
$ 130,754 Income liefore Interest Charges S 984,352
$ 1,011,882
$ W2,960
$ 891,764 Interest Charges long-term Jebt 5 388,580
$ 437,;37 5 4'2,369
$ 4 44,204 Amortaanon of debt distount, premium and expense 3,952 4,467 4,539 4,368 Ot her 5,169 4.23; 4,853 20,980 A"owante for borrowed funds uscJ danng c onst rtu non ured:t >
(1,396 (2,192) 6.260) 6,40 )
Net Interest Charres S 396,305
$ 4M.N4 5
$ 4'8.501
$ 465,812 Income (Inss)liefore Cumularis e lifect of Accounting Changes 5 SN8JH7
$ 568.0C
$ 514,459 5 425,95i Cumularis e I ffect for Years Prior to 1988 of Acrounting Changes for:
DnaUou ed plant wsts and abandonments niet of mtome taxes or $111.25-)
UnMleJ reu nues t net of mt ome taes of 5 40,912)
Propt rts taxes (net of mcome taxes of $ 1013n6)
Net income ilus) 5 588.047
$ 56x,09
$ 514.09
$ 425,951 Preft rred and Preference Stock Dnidend Requirements 30.498 32.h ;2 35,179 57,018 Larnings (Inu) for Common Stoc k
$ 557,549
$ 545,205 5 479.280
$ ;88,93; Common Shares Outstanding-Aserage 146/N8,485 146,945,942 1 &%8.h09 146.816.36; Larnings (Inso Per Share ikfore tumulatne efica of auounnr>g changes
$ 3.79
$344
$ ;.26
$2 65 Cumulatne ertrct for years pnor to 19%
of anounting (hanges for:
D:s t!! owed plant osts and abandonments S -
UnLHed rnenues 5 -
Proputy taxn 5 -
Larnings (Inssi Per Share
$3.79
$ s #4
$ 3.26
$ 2.65 Disidends Declared Per Share of Common Stot k
$ 1,98
$ 1.88
$ 178
$ 16H Rano of Larnings to ined Charges (51 C Ilasid 3m 2 ~4 2A2 2.14 Ratio of I arnings to l'ixed Charges and Preferred and Preference $ toc k Dividt nd Requirements 61C liasisi 2.79 2 50 2.21 1 95 42 m h I w m ^%4 b;~n
1988 1987 1986 1985 1984 1983 1982
$3,070,724
$2,825,910
$2,832,945
$2,738,356
$2,439,835
$2,260,021
$2,078,965 l
133,518 128,473 78,(41 77,916 76,856 70,014 122,270 31,448 30,821 36,339 49,801 58,370 49,637 44,289 l
$3,235,690
$2,985,204
$2,947,325
$2.866,073
$2,575,061 52,379,672
$2.245,524
$ 846,678
$ 813,376
$ 741,206
$ 785,110
$ 700,789
$ 676,409
$ 718,431 280,291 176287 269,167 274,834 261,596 198,935 196,924 j
510,065 437,702 456,632 419,444 400,868 371,830 370,615 i
275,610 245,736 258,655 250,798 203,945 187,769 170,974 j
332,551 237,325 232,240 218,502 190.420 171,940 161,430 l
(44,143) l 216,615 182,652 180,283 178,245 147,219 145,077 120,689 l
89.944 159.488 126.596 124,939 131,459 145,559 96,912 f
$2,507.611
$2,252,566
$2.264,779
$2,251,872
$2,036,296
$1.897,519
$1.835,975
$ 728.079
$ 732.638
$ 682,546
$ 614201
$ $38,765
$ 482,153
$ 409,549 l
1,663
$ 136,452 5 117,069
$ 113.225
$ 130,350
$ 92,750
$ 47,995
[
134 264 (789)
(3,435)
(16,869)
(5,240) 1,829 7.877 (4,820) j (769) 663 8,827 1,642 (112)
(5,487) 1,155
)
(875,372) i 25.866 225,171 l
$ (489,966)
$ 133,640
$ 109.027
$ 109,627
$ 132,067
$ 95,140
$ 44.330
$ 238,113
$ 866,318
$ 791,573
$ 723,828
$ 670,832
$ 577293
$ 453,879
$ 451,-115
$ 417.474
$ 399,429
$ 401,272
$ 399,448
$ 351,854
$ 331,469 4.593 3,626 2,721 2,502 2,191 2,131 2,006 20,663 23,459 41,410 15,642 30,592 53,088 59,779 (3.224)
(133,215)
(129,082)
(133.103)
(163,336)
(194 A02)
(194,076)
$ 473.447 5 311.344
$ 314A78
$ 296.313
$ 268,R95
$ 212,671
$ 199,178 l
5 (235,334)
$ 554,974
$ 477,095
$ 437,515
$ 401,937 5 364,622
$ 254,701 1
i i
(344,147) i 61,367 l
139,288 l
$ (378,826)
$ 554,974
$ 477,095
$ 437,515
$ 401,937
$ 364,622
$ 254,701 l
49,757 78.240 9 8,8(13 1032(A 1(4,159 98.614 73,245
(
$ (428.583)
$ 476,734
$ 378292
$ 334251
$ 297.778
$ 266.008
$ 181 A56 146,761,458 146,729,292 146/>43,377 143,183,133 135,230.827 120,274,269 103,585,915
$(1.95)
$325
$2.58
$2.33
$220
$221
$1.75
$(2.34)
$ 0.42 5 -
$ 0.95
$(2.92)
$325
$2.58 12.33
$220
$2.21
$1,75
$1.68
$ 1.68
$ 1.68
$1.68
$ 1.68
$1.68
$1.68 0.05 2.54 229 228 2.19 2.22 1.85 0 04 2.09 1.81 1.75 1.67 1.67 1.49 The Derrmr Ldmm 1992 Anreuel Rqmr* 43
S TA TIS TICA L RE VIE W The Detrort Ed: son Company and Subsidiary Companies 1992 1991 1990 1989 Operating Residennal 5 1,098,027 5 1,154,440
$ 1,045,081
$ 1,013,677 Res enues G.mmercial 925.613 915,076 867,317 828,106 rTim ando Industnal 1,261.885 1,219,616 1,201,254 1,171,389 Other 214,171 197,006 193,087 189.859 Total System S 33 99,696
$ 3A86.138
$ 3.306,739
$ 3.203,051 Intert onno tion 58.447 105,399 269,542 202,574 Total 5 ;.558.144
$ A591.5 47
$ 4,576.281
$ L405.605 Sales Residential 11,309 12,222 11,513 11,524 (Afdliw e/in h Commercial 8,668 8,873 8,688 8,552 Industrial 18,543 18.262 18,707 18,762 Other 2,177 1.692 1,596 1,846 Total 5ystem 40.697 41,019 10.506 40,684 1ntenonnettion 3.204 5,544 11.887 9,301 Total 4;.901 46.5 M 52341 49,985 Electric Customers Residential 1,777,914 1,70.h59 1,757,878 1,738,494 (Mar Endi Commerual 167.099 166,314 161,919 162,255 Industrial 2,794 2,755 2,739 2,671 Other Ip)2 1,968 1,939 1,934 Total I,949,799 1,9 41.h96 1.927.475 1.905,;54 Aserage Annual Use Per Residential Customer #1Wh>
6,375 6,929 6,583 6.668 As erare Annual liill Per Residential Customer 561R93
$654.54
$59731
$586 50 Average Resenue Residential 9.71 e 9.45c 9.08r R80c Per kWh Commercial 10.68 1931 9.98 9.68 Industrial 6.81 6 68 6.42 6.24 Capitalization long-Term Debt
$ 3,973,485
$ 4,218,264
$ 4,923,999 5 4,561,005 (T/m undo Preferred Preferente $too k 333,994 353,237 376,183 399,188 Common Shareholders' Equity 3.113,887 2.847,572 2,588.452 2,370,060 Tot al 5 7,421,366 5 7,419.0M S 7.88R6%
$ "'3 ;0.253 Capitalisation hing-Term Debt 53.5 56.8 62.4 62.2 (Pmrnn Preferred Preferente Sta k 4.5 48 4.8 5.5 Common $hareholderi Equitt 42.0 48.4 32.8
~
32.3 Total 100.0 100.0 100.0 100.0 Common Stm k Earnings (Le Per Share 53.79
$3.61
$3.26
$ 2.65 Data Dmdend Paid Per $ hare 51.955
$ 1.855
$ 1.755
$ 1.68 Payout 52'i 510 5W 63W bhares Outstandmg Average 146,998,485 146,945,932 146.888,809 146,816.363 Return on Average Common hjmty 18369 19.55 't
'19.114 16.75';
Ikuk ulue Per $ hare 521.13
$19.32
$ 17.56
$1607 Erket Pnce. liigh 535 %
$35%
$30X
$25%
hm 5304
$27%
$20
$17%
Miscellaneous he rage Inte rest Rate on Inng-Term Debt 8.&7 9.19 927 9.59 Financial Data A,rraer Dmdend Rate or. Preferred:
Preferente hux k 8.59 867 879 88'7 long-Term Debt and Redeernable Preferred' Preterence $ toc k /Thwando S 4,525,501
$ 4,900,020
$ 5,;00,962
$ 5.028,961 lotal Assers t7bando
$ 10,445,853
$10a63.624
$ 10,573325
$ 9,949,599 Gnns Utaht) Plant (T/mando
$12,402,581
$ 11,997.862 111,749,142
$11,024,368 Net li bry Plant (74=wuda 5 8,617,738
$ 8.558,227
$ 8.624,923
$ 8,236,553 ti Capital ExpenditureWTiwando 5 415,937
$ 272.121
$ 230.201
$ 242.973 Misc ellaneous System Capabdity at Year End MW 10,410 10.267 10,130 10.081 Operating Data System Capabihty at Time of Peak-MW 10,262 10,121 9.953 9,942 System Peak Demand.MW 8,704 8,980 9.032 8,704 Reserve Margin at Tmic of Peak 17.9'i 12,7 9 10.24 14.2'i System bud Iactor 56.9 %
55 9'V 5 4.9'#
57,39-that Rare-litu per kWh 9,990 9,980 9,940 9,940 Tuel Cost.c Per Mdhon litu 150.5c 153.3c 155 He 169.2c Number of Emph>yes at Year Fnd 9.183 9357 9.669 10.254 44 Tb Demnt 1. den 1W2 Annua! Eqweg
I l
1988 1987 1986 1985 1984 1983 1982 l
$ 984.6N9
$ 905,208
$ 880,205
$ S27,210
$ 758,124
$ 741,3(19
$ 676,370 l
'60,040 701,275 693,0 1 651,559 570,082 513,292 473A98 1,139,778 1,056,906 1,063,551 1,034,374 919,490 818,6M 754,238 21,665 193,342 232A57 275,011 250,509 236,307 219.148
$ 3,102,172
$ 2,856,731
$ 2.869,284
$ 2,788,157
$2A98205 52,309,658'
$2,123,25 4 133,518 128A73 78.041 77,916 76,856 70.014 122,270 l
$ 3,2;5.690
$ 2,985204
$ 2.947,325
$ 2,866,073
$2,575,061
$2,379,672
$2,245,524 11,723 11,134 10,492 10,077 10,150 10,256 9,940 8310 7,873 7,501
'130 6,850 6A79 6252 19.080 18,225 17.240 16,613 16,324 15,162 13,751 2,031 2260 2,807 2,875 2,563 2,402 2,052 41,144 39,192 38,mo 36,695 35,887 34,299 31,995 6,671 6,665 3,252 2.870 2,797 3A06 4,078 l
47,81 $
46,157 41,292 39,565 38,684 37,705 36.073 1,718,835 1,697,326 1,664,226 1,M2,981 1,629.668 1,621,172 1,619,369 158,850 155,216 148,987 144,942 142,395 140,403 139,376 l
2,592 2,507 2,384 2314 2,246 2253 2,239 1,926 1,928 1,905 1.892 1,894 1,886 1,835 l
1,882,203 1,856.977 1,817,502 1,792,129 1,776.203 1,765,714 1,762.819 i
6.866 6,635 6,350 6,165 6,253 6.332 6,133
$ 576.70
$539A1
$53234
$506.06
$ 467.03
$457 74
$41,.33 j
NA0c 813r 8.39c 8.21 c 7A7e 7.23r 6.80c j
9.15 8.91 9.24 9.14 8.32 7.92 7.57 5.97 5.80
- 6. I7 6.23 5.63 5.40 5A9
{
$ 4,238,536
$ 4,693.687
$ 3,656,569
$ 3,770.863
$3,845,272
$3.512A38
$ 3.218,649 416,212 521,894 742,273 879,497 894,168 907,505 802A23 2,226,949 2,919,985 2,716A03 2,588,025 2,3'9,998 2,195,361 1,872,181 5 6.881,697
$ 8.135,566 5 7,115215
$ 7,238,385
$7,119A38
$6,61530) 55.893.253 l
61.6 57 7 51,4 52.1 54.0 53.3 54_6 8
60 6A 10 4 12,i 12.6 13.7 13.6 l
32 4 35.9 38.2 35.8 33 4 33.0 31.8
[
100 0 1O(LO 100.0 100 0 100.0 1000 100,0 l
St2.92)
$ 3.25
$2.58
$2.33
$2.20
$2.21
$ 1.75 I
$1.68
$1.68
$ 1.68
$ 1.68
$ 1.68
$1.68
$ 1.68 1
9 527 65'V 72'V 764 767 96'J 146,761 A58 146,729.292 146,M 3,3'i 143,18.1.133 135,230,82' 120,274.269 103.585,915 (15.91)7 16697 14 09W 13.319 12879 13.039 10.1 6
$15.10
$1975
$1834
$17A7
$ 16.91
$16 63
$16.60
$17*
$19
$19S
$17%
$16%
$16
$131
$12
$127
$15s
$14 511 7
$13
$11 l
9.6'T 9.5'1 92';
9.99 9.97 9.54 9.5 '7 l
[
8.97 10.'9 11.5 7 11.69 11.6 9 I I HJ l137
$ 5,148498
$ 5,232,662
$ 4,774 A95
$ 4.7 31,589
$4A60381
$4,155329
$ L792,982
$10,060293
$ 11,158,214
$10,377,125
$ 9,863,74)
$9,276,614
$8 A'7,218
$7.615,856
$10,766'55
$11,893 A18
$11,062A49
$ 10466,039
$9,752346
$8,845,779
$ 8,252.570
$ H,303,644
$ 9.682,875
$ 9,034,716 5 8.612.890
$8,076.168
$ 7,320,570
$6,821,058
$ 235,127
$ 709,084
$ 645,196
'10,699
$ 938,004
$ 1,014368
$1.135,015 10,0 M 9,164 9Jr0 9,296 8.898 8.162
"*762 10,038 9,020 9,199 9,367 9271 7,810 H569 9,133 HA 2" 8,050
',172
,3 50 7.063 6394 9.97 7.0'i 14.39 30.6W 26.1 g 10.67 34.0'J 5527 57.4 4 57.9%
63.3';f 6027 6027 613 4 9,990 10,060 10,090 9,990 9,990 10,010 10.000 l'3.8c l"2.9c 1892r 202.Oe 190 6c 1902c 19ut 10.614 11,221 10.967 11,086 11,136 11,152 11,208 m 0.wm h we Amul Rq,on 45
~ _.,.
. __. = _ _..
MISCELLANEOUS C0RP0 RATE DATA The Devoit Edison Company 31ARKET FOR Tile COh1 PANTS ANNUAL AIEETING OF SIIARE110LDERS i
CO5thtON EQLilTY AND He 1993 Annual Shrting t(Shareholders will be htId at 10 RELATED Sil AREllOLDER SIATTERS am. Detnut time Monday, April 26, as announasi in de proxy 3
The Company's Common Stock is listed on the New York mtement. Surcholden wdl be M m O ) dm menix mf
)
Stock Euhange, which is the principal market for such stock, the Ik urd of Dirtstors, and (2) ratify the a[pointment tf Pria I
and the Midwest Stock Exdunge. ne folk > wing table indicates Waterhouseasirkkperxkut acountants.
the reportesl high and low sales prices of the Company's
)
Common Stock on the composite tape of the New York Stoc k At the April 27,1992 Annual Mating ofShareholders, three i
l Exchange and dividends paid per share for each quanerly period dint tors, all of whom were incumbents, u ere ektml, and ihe f
during the past two y ears:
appointment ofindependent accuuntants was ratdied.
j Dnidends CORPORATE ADDRESS l
Price Range Paid The Detroit Edison Company i
Calendar Quarter Egh low Per Share 2000 krond Avenue, Detroit, Michigan 48226 f
j 1991 First 30%
275
$0.4 45 Telephone: (313)237-8000 l
I Second 30 %
28 OA7 I
INDEPENDENT ACCOUNTANTS l
Third 31 %
2sh OA7 l
Fourth 35 %
31 9 047 Price Waterhouse i
l 1992 First 35S 30a 0.47 200 Renaissance Center, Detroit, Michigan 48243 second 34h 30W OA95 FORM 10-K Third
~~;C*
~l%
OA95 Copies of Form 10.K. Securities and Exthange Fourth
~33 n 31 OA95 Commission Annual Report, are available.
At December 31,1992,147,016,691 shares of the Company's Requests should be dintred to-J f
l Common Stock were outstanding. ncse shares were held by a Susan M. Beale total of I61,146 shareholders.
Corporate $ceretary
{
The amount of future dividends will depend upon the The Detroit Edison Company Company's earnings, financial condition and other factors.
2000 Second Avenue, Detroit, Michigan 48226 DISTRIBUTION OF OWNERSillP OF TRANSFER AGENTS DF'mOIT EDISON COh1 MON STOCK He Detroit Edison Company j
(Dade3L 19921 2000 Second Avenue, Detroit Michigan 48226 l
Tvpc of Ou ner-b"'""
'N'"I"
""I j
Owners 56res Rotuld J. Gdowski Janet A.Scullen i
l Indniduals
's.080 19.395.142 Elaine M. Godfrey Jack L Somers l
Joint Accounts 71,73 24.821,784 SophieJ. Koziatek Gloria A. Williams j
Trust Accounts 10.069 5,~78.242 l
Nominees 80 Si,08),330 Shareholder Senices: (800) 551 -5009
)
i institurmns and foundations 221 99.526 I
Brokers and Secunty Dealers 17 14.083 REGISTRAR OF STOCK l
Others 906 12.826.584 The Detroit Edison Company l
l l
Total 161,146 147,016,691 2000 Second Avenue, Detroit, M khigan 48226 i
(Pnferred, Preferent e and Common Stoc k)
State and Country:
j l
l Owners Shares COh1 MON STOCK Mkhigan
~6,571 37Jo9.599 Listed on the New Yo. Sim k Exchange and the Midwest a
Florida 12,291 4,951,825 Stm k Exdiange.
l 4
Cahtorma 9,412 2,978,46; New York
~,792 85.191,6'8 Symbol - DTE Illinois
~.129 2,988,198 j
Ohio 5,501 1,538,872 44 Orher States 41,742 12,16,297 2
Foreign Countries 70S 190.759 l
Total 161.146 147,016,691 l
46 The I>tnur h! wn wo Anna Hern
B0ARD 0F 0IRECT0RS The Detroit Edison Company
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i Terence E. Adderley Theodore S. lxipprandt Eugene A. Miller President and Chief Executive 05cer, Marketing Specialist, Cmperative President and Chief Operating 05cer, Ke!]y Services, Incorporated (A provider Elevator Company Gundling export and Comerica Incorporated, and Chamnan of temporary help. business senices and domestic rnarketing of dry beans in the and Chief Executive Of6cer, I
home care services)
Thumb area)
Comerica lhnk Wendell W. Anderson,Jr.
John E. Imbbia Dean E. Richardwn Retired Cha:rman of the Bcurd and Chief Chairman, President and Retired Chairman of the Ikurd, l
Executive 05cer, Bundy Corporation Chief Execurn e 05cer, The Detro:t Manufacturers National Corp; ration (Manufacturer of steel tubmg. tlextble Edison Company and retind Chairman of the Exetutive hose and engineered plastic products >
Committee of Manufacturers National Patricia S. longe Bank of Nroit l.
Lillian Bauder Economist; Senior Partner, The longe l
President and Chief Executive 05cer, Company ( An economic consu! ting Alan E. Schwarti i
Cranbrook Educational Communitt and investment firm)
Partner, If onigman Miller Sc hwartz l
and Cohn (attorners at law )
l David Bing WalterJ. McCarthy,Jr.
l Cha:rman of the Ikcrd Bing Steel, Inc.
Retiwd Onirman of the Board and William Wegner l
(A steel ser. ice center)
Chief Executive 05cer. The Detroit Consultant; Owner of T-Squared, Edison Company incorporated ( A consulting firm Larry G. Garberding egg.M in providing sen ices to I
nuclear unlity companies)
I Executive Vice President and i
Chief Financial 05cer The Detroit I
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The Dettmt 1.deri IW2 Arm.J R9on 4'
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i 80ARD 0F DIRECT 0RS - C0MMiTTEES The Detroit Ed: san Company AUDIT ENERGY RESOURCES l
EXECUTIVE l FINANCE PLANNING Patricia S.12,.y John E. lobbia'
'l Dean E. Richardson' David Bini Lillian Bauder Terence E. Adderley Patncia S. longe" Wendell W. Anderson. f r.'
David Bing Lillian Bauder Terence E. Adderley Thuidore S. lopprandt Lan y G. Garberding 1
Nrirrding Walter J. AtcCarthv. Jr.
Ihan E. Richardson Dean E. Richardson Eu;.
4.ler William Wegner Alan E. Sc hwarti Alan E. Schwartz NO311NATING NUCLEAR REVIEW ORGANIZATION
& COSIPENSATION Alan E. Schwartz' William Wegner*
Wendell W. Anderson.Jr.
Lillian Bauder Terence E. Adderley" Patncia S. longe Patricia S. longe
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Wa!rerJ. ShCarthy.Jr.
WalterJ. hicCanhy,Jr.
Dean E. Ridurdson Eugene A. Afi!!er Alan E. Sc hwartz i
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'C/ ann.m "D,4 Chanway 0FFICERS The Detroit Ed: son Company John E. Imbbia Chairman of the Board, Ronald W. Gresens Vice PnsiJent and Controller Pnsident and Chief Executise Offker leslie L I2ximans Vice President and Treasurer Larry G. Garberding Executise Vice President and Chief Financial Officer Christopher C. Nern Vke Pnsident and Asviciate General Counsel William S. Orser Executise Vice President S. Alartin Taylor Vice Pnsident - Community Iron S. Cohan Senior Vice President and Governmental AtTairs and General Counsel SaulJ. Waldman Vice Ensident -
Frank E. Agosti Senior Vice President Corporate Communications Robert J. Buc kler Senior Yke Pnsident Susan bl. Ileale Corporate Secretary Stichae; E. Champley Vice Pres. dent - Afarketing and Sales Thomas J. Howlin Acting General Auditor 31alcolm G.1)ade,Jr. Vice Pnsident - Human Resounes Douglas R. Gipson Vice Presicient - Nuclear Operations OFFICER RETIREh1ENTS Stanley G. Carola, Vice Pnsident - Nuclear Engineering and Servius, retired on September 1,1992.
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