ML18093B503

Forwards 1988 Stockholders Annual Repts of Each Owner of Facility & 1989 Projected Cash Flow Statements,Per 1975 Amends to Price-Anderson Act

ML18093B503
Person / Time
Site:	Salem, Hope Creek, 05000000
Issue date:	03/14/1989
From:	Miltenberger S Public Service Enterprise Group
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
NLR-N89045, NUDOCS 8903210133
Download: ML18093B503 (15)

Text

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j Public Service Electric and Gas Company Steven E. Miltenberger Public Service Electric and Gas Company P.O. Box 236, Hancocks Bridge, NJ 08038 609-339-4199 Vice President and Chief Nuclear Officer MAR 1 4 1989 NLR-N89045 United States Nuclear Regulatory Commission Document Control Desk Washington, DC 20555 Gentlemen:

GUARANTEED RETROSPECTIVE PREMIUMS FOLLOWING NUCLEAR ACCIDENT SALEM AND HOPE CREEK GENERATING STATIONS DOCKET NOS. 50-272, 50-311 AND 50-354 FACILITY OPERATING LICENSE NOS. DPR-70, 75 AND NPF-57 Pursuant to the 1975 Amendments to the Price-Anderson Act (Public Law 94-197), the owners of Salem Generating Station, Unit Nos. 1 and 2, and Hope Creek Generating Station, Unit No. 1, submit the following statements and supporting documents to satisfy guarantee requirements as provided under Alternative No. 5:

1. 1988 Stockholders' Annual Report of each owner.

2. Summary of Owners' 1989 Projected Internal Cash Flow Statements supported by individual certified Internal Cash Flow Statements showing 1988 Actual and 1989 Projected with Explanation of Significant Variations.

Similar documents will be filed by Philadelphia Electric Company for the owners of the Peach Bottom Atomic Power Station, Unit Nos. 2 and 3.

Sincerely,

//~~~

Enclosures

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8903210133 890314

._e.pR ADOCK 05000272

...., PNU L

Document Control Desk "' 1 4 MAR l()PO (All w/o Enclosures) c Mr. R. Wood, Financial Analyst Off ice of State Programs Mr. J. c. Stone Licensing Project Manager - Salem Ms. K. Halvey Gibson Senior Resident Inspector - Salem Mr. c. Y. Shiraki Licensing Project Manager - Hope Creek Mr. G. W. Meyer Senior Resident Inspector - Hope Creek Mr. W. T. Russell, Administrator Region I Ms. J. Moon, Interim Chief New Jersey Department of Environmental Protection Division of Environmental Quality Bureau of Nuclear Engineering CN 415 Trenton, NJ 08625 PSE&G Co-Owners L

JOINT OWNERSHIP OF NUCLEAR GENERATING STATIONS (SALEM AND HOPE CREEK)

SUMMARY

PROJECTED INTERNAL CASH FLOW STATEMENT FOR THE YEAR 1989 (Thousands of Dollars)

Public Service Philadelphia Atlantic City Delmarva Electric and Electric Electric Power & Light Gas Com:ean:z:: Com:ean:z:: Com:ean:z:: Com:ean:z:: Total Net Income $506 724 $ 563 016 $ 88 650 $ 87 633 $1 246 023 Less Dividends Paid 447 927 557 986 66 219 77 668 1 149 800 Retained in Business Adjustments:

$ 58 797 $ 5 030 $ 22 431 $ 9 965 ~ 96 223 e Unrecovered Purchased Power Costs $ $ $(19 660) $ $ (19 660)

Def erred Revenue 58 043 58 043 Levelized Energy Clause - Net 18 481 18 481 Depreciation 498 281 267 590 59 815 77 333 903 019 Amortization and Other 76 022 4 056 ( 2 722) 7 261 84 617 Def erred Income Taxes and Investment Tax Credits (14 244) 118 590 1 075 19 151 124 572 SFAS 92 Effect (11 805) ( 11 805)

SFAS 90 Effect (8 671) (8 671)

Nuclear Fuel - Limerick 60 399 60 399 Allowance for Funds Used During Construction (37 996) (157 414) . (4 222) (7 878) (207 510)

Total Adjustments , $513 392 $ 339 459 $ 52 767 $ 95 867 $1 001 485 -

Internal Cash Flow i~l~=1~2 ~=J~~=~~2 ~=l~=12~ ~1Q~=~J~ ~l=Q~l=ZQ~

Average Quarterly Cash Flow i1~J=~~l i==~g=J:~~ i=1~=~QQ ~=~g=~~~ ~==~z~=~~z Nuclear Generating Stations Percentage of Ownership Salem 1 42.59% 42.59% 7.41% 7.41% 100%

Salem 2 42.59% 42.59% 7.41% 7.41% 100%

Hope Creek 1 95.00% 5.00% 100%

Maximum Contingent Liability (Severally and not Jointly)

JOINT OWNERSHIP OF NUCLEAR GENERATING STATIONS (SALEM AND HOPE CREEK)

SUMMARY

PROJECTED INTERNAL CASH FLOW STATEMENT FOR THE YEAR 1989 (Thousands of Dollars)

Public Service Philadelphia Atlantic City Delmarva Electric and Electric Electric Power & Light Gas Company Company Company Company Total Net Income $506 724 $ 563 016 $ 88 650 $ 87 633 $1 246 023 Less Dividends Paid 447 927 557 986 66 219 77 668 1 149 800 Retained in Business $ 58 797 $ 5 030 $ 22 431 $ 9 965 $ 96 223 e Adjustments:

Unrecovered Purchased Power Costs $ $ $(19 660) $ $ (19 660)

Def erred Revenue 58 043 58 043 Levelized Energy Clause - Net 18 481 18 481 Depreciation 498 281 267 590 59 815 77 333 903 019 Amortization and Other 76 022 4 056 (2 722) 7 261 84 617 Deferred Income Taxes and Investment Tax Credits (14 244) 118 590 1 075 19 151 124 *;572 SFAS 92 Effect ( 11 805) (11 805)

SFAS 90 Effect (8 671) (8 671)

Nuclear Fuel - Limerick 60 399 60 399 Allowance for Funds Used During Construction (37 996) (157 414) (4 222) (7 878) (207 510)

Total Adjustments $513 392 $ 339 459 $ 52 767 $ 95 867 $1 001 485 e Internal Cash Flow ~~z~=1~2 ~=4gg=g~2 ~=z~=12~ ~!Q~=~J~ il=Q~Z=ZQ~

Average Quarterly Cash Flow ~!gJ=QgZ ~==~g=!~~ ~=!~=~QQ ~=~g=g~~. i==~zg=~6Z Nuclear Generating Stations Percentage of Ownership Salem 1 42.59% 42.59% 7.41% 7.41% 100%

Salem 2 42.59% 42.59% 7.41% 7.41% 100%

Hope Creek 1 95.00% 5.00% 100%

Maximum Contingent Liability (Severally and not Jointly)

r I

PUBLIC SERVICE ELECTRIC AND GAS COMPANY (SALEM AND HOPE CREEK)

Projected Internal Cash Flow Statement For Year 1989 - Compared to 1988 Actual (Thousands of Dollars)

Actual-1988 Projected-1989 Explanation of Significant Variations Net Income $537 319 $506 724 Principally due to increased employee fringe benefits and other A&G expenses Less Dividends Paid 393 417 447 927 Increased dividends Retained in Business $143 902 $ 58 797 Adjustments:

Depreciation and Nuclear Fuel Burnup $467 742 $498 281 Return to service of Peach Bottom 2 and 3 Amortization and Other 43 379 76 022 Full year's effect of Hope Creek 2 amortization of abandonment, write-down of Energy Development Corporation Deferred Income Taxes and Investment 63 424 (14 244) Principally due to over/under fuel Tax Credits recovery and decreased Hope Creek 1 tax depreciation Statement of Financial Accounting (38 761) (8 671) Accretion to income of the discount Standards No. 90 - Regulated related to Hope Creek and various Enterprises - Accounting for abandonments; adoption in 1988 of TB87-2, Abandonments and Disallowances which required a cumulative adjustment of of Plant Costs (SFAS 90) $26.8 million net-of-tax Allowance for Funds Used During (27 061) (37 996) Due to various CWIP expenditures and Construction Hope Creek refueling Total Adjustments $508 723 $513 392 Internal Cash Flow $652 625 $572 189 Average Quarterly Cash Flow ~!gJ=!~g ~!~J=~~z As indicated by this statement, the Average Quarterly Cash Flow covers the maximum contingent liability of Public Service Electric and Gas Company which amounts to $18,018,000 as shown on the Summary Sheet "Projected Internal Cash Flow Statement."

DATE_*¥___.__t__.3/!_fc?__,__ _ _

PUBLIC SERVICE ELECTRIC AND GAS COMPANY (SALEM AND HOPE CREEK)

Projected Internal Cash Flow Statement For Year 1989 - Compared to 1988 Actual (Thousands of Dollars)

Actual-:1988 Projected-1989 Explanation of Significant Variations Net Income $537 319 $506 724 Principally due to increased employee fringe benefits and other A&G expenses Less Dividends Paid 393 417 447 927 Increased dividends Retained in Business $143 902 $ 58 797 Adjustments:

Depreciation and Nuclear Fuel Burnup $467 742 $498 281 Return to service of Peach Bottom 2 and 3 Amortization and Other 43 379 76 022 Full year's effect of Hope Creek 2 amortization of abandonment, write-down of Energy Development Corporation Deferred Income Taxes and Investment 63 424 (14 244) Principally due to over/under fuel Tax Credits recovery and decreased Hope Creek 1 tax depreciation Statement of Financial Accounting (38 761) (8 671) Accretion to income of the discount Standards No. 90 - Regulated related to Hope Creek and various Enterprises - Accounting for abandonments; adoption in 1988 of TB87-2, Abandonments and Disallowances which required a cumulative adjustment of of Plant Costs (SFAS 90) $26.8 million net-of-tax Allowance for Funds Used During (27 061) (37 996) Due to various CWIP expenditures and Construction Hope Creek refueling Total Adjustments $508 723 $513 392 Internal Cash Flow $652 625 $572 189 Average Quarterly Cash Flow ~!g~=!~g ~!~~=~~z As indicated by this statement, the Average Quarterly Cash Flow covers the maximum contingent liability of Public Service Electric and Gas Company which amounts to $18,018,000 as shown on the Summary Sheet "Projected Internal Cash Flow Statement."

BLIC S~ANY

, DATE_M__.__1__..3~_fc;__,___ _

Parker C. Peterman

PHILADELPHIA ELECTRIC COMPANY SYSTEM Projected Internal Cash Flow Statement For Year 1989 - Compared to 1988 Actual (Thousands of Dollars) I I I I Projected - 1989 Actual - 1988 Explanation of Significant VariaUons (1)

• Net Income $563,016 $56.5 '950 Less: Dividends Paid 557,986 541,526 Retained in 'Business $ 5,030 $ 24,424 Adjustments:

Deferred Revenue $58,043 $ (6] ,231) Fourth year of revenue phase-in plan.

Depreciation 267 ,590 254 ,462 Deferred Income Taxes and Investment Tax Credits 118,590 126,308 Decrease due to Deferred Fuel and Liberalized Depreciation.

Allowance for Other Funds Used During Construction (157 ,414) (129,627) Increased CWIP on Limerick #2.

Nuclear Fuel - Limerick 60,399 28,033 1989 includes precommercial fuel costs of

$25,364,000 Statement of Flnancial Accounting Standards No. 92 (11,805) (12,872)

Amortization and Other 4,056 (43,L138) Change in Deferred Fuel Expense.

Total Adjustments $339,459 $161,635 Internal Cash Flow $344,489 $186,059 Average Quarterly Cash Flow $ 86,122 $ 46,515 (1) Significant variation equals $10 million and JO%.

The Company has sufficient cash flow to ensure that its respective premiums would be* available for payment.

__5%]ified ~Y//7

,/t:(' tt//ti'-0it771(d4.-- Date M. W. Rimerman Vice Preside~t, Finance and Accounting I I

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PHILADELPHIA ELECTRIC COMPANY SYSTEM Projected Internal Cash Flow Statement For Year 1989 - Compared to 1988 Actual

. (Thousands of Dollars)

Projected - 1989 Actual - 1988 Explanation of Significant Variations (l)*

Net Income $563,016 $565,950 Less: Dividends Paid 557,986 541,526 Retained in Business $ 5,030 $ 24,424 Adjustments:

Deferred Revenue $58,043 $ (6J ,231) Fourth year of revenue phase-in plan.

Depreciation 267,590 254 ,462 Deferred Income Taxes and Investment Tax Credits 118,S90 126,308 Decrease due to Deferred Fuel and Liberalized Depreciation.

Allowance for Other Funds Used During Construction (157,414) (129,627) Increased CWIP on Li.merick 112.

Nuclear Fuel - Limerick 60,399 28,033 1989 includes precommercial fuel costs of

$25,364,000 Statement of Financial Accounting Standards No. 92 (11,805) (12,872)

Amortization and Other 4,056 Change in Deferred Fuel Expense.

Total Adjustments $339,459 $161,635 Internal Cash Flow $344,489 $186,059 Average Quarterly Cash Flow $ 86,122 $ 46,515 (1) Significant variation equals $10 million and 10%.

The Company has sufficient c~sh flow to ensure that its respective premiums would be available for payment.

Date M. W. Rimerman r; Vice President, Finance and Accounting

I 1*

. ,_~ *\\'.:.:

DELMARVA POWER & UGHT COMPANY PROJECTED INTERNAL CASH FLOW STATEMENT FOR YEAR 1989 COMPARED TO 1988 ACTUAL Actual - 1988 Projected - 1989 Explanation of Significant Variations I

Net Income $84,721 $87,633 Note 1 Less Dividends Paid 73,741 77,668 Note 2 Retained in Business $10,980 $9,965 Adjustments:

Depreciation $71, 609 $77 ,333 Amortization and Other 1,198 7,261 Note 3 Deferred Income Taxes and Investment,Tax Credits 17,703 19,151 Note 4

• Allowance for Funds Used During Construction (5z520} (7,878)

Total Adjustments 84z990 95z867 Internal Cash Flow $95z970* . $105,832 Average Quarterly Cash Flow $23,993 $26,458 The Company has sufficient cash flow to insure that its respective premiums would be available for payment.

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• Per annual report $106,051. The difference of $10,081 is due to a different format that was used in annual report, which reflected- $7,873 of various working capital items and the

$2,208 allowance for borrowed funds as an investing activity use of cash.

By~ T?L __ Date ~,AJ, CPGPICF

Explanations of Significant Variations Note 1 Net income is expected to increase modestly due to higher expected sales. No significant base rate changes are expected during 1989.

Note 2 Delmarva increased its annualized common stock dividend rate from

$1.46 to $1.50 in December 1988. Additional common shares are projected to be issued by the Company through dividend reinvestment and common stock purchase plans during 1989. Additional preferred shares are projected to be issued by the Company through a public offering in 1989.

Note 3 Amortization and Other is expected to increase due to higher levels of nuclear fuel amortization and lower non-cash subsidiary income from leasing activities in 1989.

Note 4 Deferred Taxes and ITC are expected to increase due to higher tax .

closings resulting from increased construction activity in 1989 and due to reductions in deferred tax expense in 1988 which will not reoccur in 1989 associated with (1) the deferred gain on the sale and leaseback of .the Company's ownership interest in the Merrill Creek.

Reser,voir and (2) the inclusion in taxable income in 1988 of amounts to be collected from customers in later years related to the recovery of Summit income taxes.

PROJECTED INTERNAL CASH FLOW STATEMENT FOR YEAR 1989 COMPARED TO 1988 ACTUAL Actual - 1988 Projected - 1989 Explanation of Sig~ificant Variations Net Income $84,721 $87,633 Note 1 Less Dividends Paid *73,741 77,668 Note 2 Retained in Business Adjustments:

Depreciation

$10, 980

$71, 609

$9,965

$77' 333

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Amortization and Other l '198 7,261 Note 3 Deferred Income Taxes and Investment Tax Credits 17,703 19,151 Note 4 Allowance for Funds Used During Construction (5,520) (7,878)

Total Adjustments 84,990 95,867 Internal Cash Flow $95,970* $105,832 Average Quarterly Cash Flow $23,993 $26,458 The Company has sufficient cash flow to insure that its respective premiums would be available for payment.

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• Per annual report $106,051. The difference of $10,081 is due to a different format that was used in annual report, which reflected $7,873 of various working capital items .and the

$2,208 allowance for borrowed funds as an investing. activity use of cash.

Date ~f0i, CPGPICF

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• I J,

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Explanations of Significant Variations Note l Net income is expected to increase modestly due to higher expected sales. No significant base rate changes are expected during 1989.

Note 2 Delmarva increased its annualized common stock dividend rate from

$1.46 to $1.50 in December 1988. Additional common shares are projected to be issued by the Company through dividend reinvestment and common stock purchase plans during 1989. Additional preferred shares are projected to be issued by the Company through a public offering in 1989.

Note 3 Amortization and Other is expected to increase due to higher levels of nuclear fuel amortization and lower non-cash subsidiary income from leasing activities in 1989.

Note 4 Deferred Taxes and ITC are expected to increase due to higher tax closings resulting from increased construction activity in 1989 and due to reductions in deferred tax expense in 1988 which will not reoccur in 1989 associated with (1) the deferred gain on the sale and leaseback of the Company's ownership interest in the Merrill Creek Reservoir and (2) the inclusion in taxable income in 1988 of amounts to be collected from customers in later years related to the recovery of Summit *income taxes.

ATLANTIC CITY ELECTRIC COMPANY PROJECTED INTERNAL CASH FLOW STATEMENT FOR YEAR 1989 - COMPARED TO 1988 ACTUAL

<Thousands of Dollars)

Actual 1988 Projected 1989 Explanation of Significant Variations Net Income $ 80,221 $ 88,650 Projected higher KWH sales and lower anticipated interest expense.

Less Dividends 60,420 66,219 Projected includes full year impact of preferred series issued in second half of 1988 and increased common dividend rate.

Retained in Business Major Adjustments:

• Depreciation and Amortization 54,799 59,815 Levelized Energy Clause - Net (3,838) 18,481 Projected recognition of previously deferred fuel costs versus actual deferral in 1988.

Deferred Income Taxes and Investment Tax Credits 10,662 1,075 Reversal of deferred taxes associated with previously deferred fuel costs projected to be recognized in 1989.

Unrecovered Purchased Power Costs (18,110) <19,660)

Allowance for Funds Used During Construction (3,182) (4,222)

Other --1..J!_g (2,722) Primarily net changes in working capital items.

Total Adjustments 42,183 52,767

$ 61,984 $ 75,198 Average Quarterly Cash Flow Nuclear Generating Station Percentage Ownership Salem Unit #1 7 .41%

Salem Unit ll2 7 .41X Hope Creek 11 5.00%

Maximum Contingent Liability $ 1,982

<Severally and not Jointly)

As indicated by this statement, the Average Quarterly Cash Flow fully covers the maximum contingent liability of Atlantic City Electric Company which amounts to $1,982,000 as shown above.

ATLANTIC CITY ELECTRIC COMPANY By Date

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ATLANTIC CITY ELECTRIC COMPANY PROJECTED INTERNAL CASH FLOW STATEMENT FOR YEAR 1989 - COMPARED TO 1988 ACTUAL

<Thousands of Dollars)

Actual 1988 Projected 1989 Explanation of Significant Variations*

Net Income $ 80,221 $ 88,650 Projected higher KWH sales and lower anticipated interest expense.

Less Dividends 60,420 66,219 Projected includes full year impact of preferred series issued in second half of 1988 and increased common dividend rate.

Retained in Business 19,801 22,431 Major Adjustments:

D8preciation and Amortization 54,799 59,815 Levelized Energy Clause - Net (3,838) 18,481 Projected recognition of previously deferred fuel costs uersus actual deferral in 1988.

Deferred Income Taxes and Investment Tax Credits 10,662 1,075 Reversal of deferred taxes associated with previously deferred fuel costs projected to be recognized in 1989.

Unrecovered Purchased Power Costs (18,110) (19, 660)

Allowance for Funds Used During Construction (3,182) (4,222)

Other 1(852 (2(722) Primarily net changes in working capital items.

Total Adjustments 42i183 52(767

$ 61(984 $ 75i198 Average Quarterly Cash Flow $ 15(496 $ 18(800 Nuclear Generating Station Percentage Ownership Salem Unit #1 7 .41%

Salem Unit #2 7.41%

Hope Creek #1 5.00%

Maximum Contingent Liability $ 1,982 (Severally and not Jointly)

As indicated by this statement, the Average Quarterly Cash Flow fully covers the maximum contingent liability of Atlantic City Electric Company which amounts to $1,982,000 as shown above.

ATLANTIC CITY ELECTRIC COMPANY By Date

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ATLANTIC CITY ELECTRIC COMPANY PROJECTED INTERNAL CASH FLOW STATEMENT FOR YEAR 1989 - COMPARED TO 1988 ACTUAL

<Thousands of Dollars)

Actual 1988 Projected 1989 Explanation of Significant Variations Net Income $ 80,221 $ 88,650 Projected higher KWH sales and lower anticipated interest expense.

Less Dividends 60,420 66,219 Projected includes full year impact of preferred series issued in second half of 1988 and increased common dividend rate.

Retained in Business 19,801 22,431 Major Adjustments:

Depreciation and Amortization 54,799 59,815 Levelized Energy Clause - Net (3,838) 18,481 Projected recognition of previousl¥ deferred fuel costs *versus actual deferral in 1988.

Deferred Income Taxes and Investment Tax Credits 10,662 1,075 Reversal of deferred taxes associated with previously deferred fuel costs projected to be recognized in 1989.

Unrecovered Purchased Power Costs (18, 110) (19,660)

Allowance for Funds Used During Construction (3,182) (4,222)

Other ll852 (2l722> Primarily net changes in working capital items.

Total Adjustments 42! 183 52l767

$ 61,984 $ 75l198 Average Quarterly Cash Flow $ 15l496 $ 18,800 Nuclear Generating Station Percentage Ownership Salem Unit #1 7.41%

Salem Unit #2 7.41%

Hope Creek #1 5.00%

Maximum Contingent Liability $ 1,982

<Severally and not Jointly)

As indicated by this statement, the Average Quarterly Cash Flow fully covers the maximum contingent liability of Atlantic City Electric Company which amounts to $1,982,000 as shown above.

ATLANTIC CITY ELECTRIC COMPANY By Date