ML19309B883: Difference between revisions
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4 | , 1 In contrast to the previous two ' ' | ||
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19 | 19 vears,in which earnings declined, t.his past year showed an increase of 86.2 million in net earnings for fN ' si I | ||
vears,in which earnings declined, t.his past year showed an increase of 86.2 million in net earnings for fN ' si I | |||
.1 common stock over 1978. = | .1 common stock over 1978. = | ||
e TheyeE Two basic reasons for this marked improvement were the positive effects of the rate increase m e f $23.3 mitiion which went into effect September 1,1978, and continuing and successful efforts to constrain expenses at every level of Company operations. | e TheyeE Two basic reasons for this marked improvement were the positive effects of the rate increase m e f $23.3 mitiion which went into effect September 1,1978, and continuing and successful efforts to constrain expenses at every level of Company operations. | ||
| Line 462: | Line 240: | ||
financial strength over the next several years. These decisions were not rnade without risk, for they will affect ) | financial strength over the next several years. These decisions were not rnade without risk, for they will affect ) | ||
CAPCO terminated programs the supply of electricity in the ; | CAPCO terminated programs the supply of electricity in the ; | ||
involving the future construction of future. Reliability of electric service j four nuclear generating units and to customers may be particularly l delayed the scheduled completion affected in the 1990s. A more | involving the future construction of future. Reliability of electric service j four nuclear generating units and to customers may be particularly l delayed the scheduled completion affected in the 1990s. A more of two nuclear units which are complete discussion of CAPCO already under construction in construction schedule changes which the Company has an owner- appears later in the report. | ||
of two nuclear units which are complete discussion of CAPCO already under construction in construction schedule changes which the Company has an owner- appears later in the report. | |||
ship interest. | ship interest. | ||
In June 1979 the Company sold We and the other four companies $20 million in first mortgage bonds in CFCO remain convinced that to finance construction programs. | In June 1979 the Company sold We and the other four companies $20 million in first mortgage bonds in CFCO remain convinced that to finance construction programs. | ||
nuclear energy is a safe, economical Approximately $6 million principal amount of pollution control notes were issued by the Company in April corresponding to a like princi-pal amount of pollution control bonds sold by industrialdevelop- l | nuclear energy is a safe, economical Approximately $6 million principal amount of pollution control notes were issued by the Company in April corresponding to a like princi-pal amount of pollution control bonds sold by industrialdevelop- l l ment authorities, the proceeds I being used to pay part of the cost I | ||
COVER. On October 21,1879 Thomas Edison produced the world's first of the pollution control equipment successfulincandescent electric light. This at the New Castle Power Plant and glowing filament from a replica of that the Bruce.Mansfield Plant. | |||
l ment authorities, the proceeds I being used to pay part of the cost I | |||
COVER. On October 21,1879 Thomas Edison produced the world's first of the pollution control equipment successfulincandescent electric light. This | |||
at the New Castle Power Plant and glowing filament from a replica of that the Bruce.Mansfield Plant. | |||
light symbolizes the industry's obsertance of the Centennial of Light during 1979. | light symbolizes the industry's obsertance of the Centennial of Light during 1979. | ||
l c | l c | ||
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| Line 490: | Line 259: | ||
July 31,1977. Thus we have has sought solutions to this issue. | July 31,1977. Thus we have has sought solutions to this issue. | ||
m F. | m F. | ||
IfIghlights | IfIghlights | ||
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reached 1.9 billion, showing an increase for the fourth | reached 1.9 billion, showing an increase for the fourth | ||
| Line 502: | Line 269: | ||
3 | 3 | ||
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+ | + | ||
Brief Financial Summary 1979 1918 HEVENUES RECEIVED: Thousands of Dollars ,,.- | Brief Financial Summary 1979 1918 HEVENUES RECEIVED: Thousands of Dollars ,,.- | ||
| Line 521: | Line 281: | ||
12 Preferred stock dividend requirements 4,660 4,660 l Preferred stock dividends declared | 12 Preferred stock dividend requirements 4,660 4,660 l Preferred stock dividends declared | ||
* l in excess of requirements . | * l in excess of requirements . | ||
174 | 174 | ||
* l Common stock dividends , 12,278 5,452 | * l Common stock dividends , 12,278 5,452 Total. . 147,369 119,239 RETAINED EARNINGS . . S 4.268 S 4.689 I (1) Amounts for 1979 and 1978 include an increase of $1,686,717 and ' | ||
a decrease of $1,175,344, respectively, representing the net i amortization of the previously deferred energy costs. See Note 1 of l Notes to Financial Statements on page 28 herein. | a decrease of $1,175,344, respectively, representing the net i amortization of the previously deferred energy costs. See Note 1 of l Notes to Financial Statements on page 28 herein. | ||
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LEFT. J. A. Elser, right, Zelienople L | LEFT. J. A. Elser, right, Zelienople L | ||
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%1 District customer services represen tative, and builder check plans of totalelectric | %1 District customer services represen tative, and builder check plans of totalelectric | ||
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,' ' TL fa- 9'*W)& increase capacity of Chippewa Substation. | ,' ' TL fa- 9'*W)& increase capacity of Chippewa Substation. | ||
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where it came from, m, - | where it came from, m, - | ||
| Line 586: | Line 321: | ||
where .ti went -- | where .ti went -- | ||
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Part of the increase in operation and maintenance costs was due to A new system peak load of hour use per customer failed to extensive turbine repairs to Unit 554,000 kilowatts was established gain over the previous year, No. 5 at the New Castle Power | Part of the increase in operation and maintenance costs was due to A new system peak load of hour use per customer failed to extensive turbine repairs to Unit 554,000 kilowatts was established gain over the previous year, No. 5 at the New Castle Power July 16 and equalled August 1. although total residential kilowatt. Plant and the use of more expensive hour sales did increase 1.1 percent. low-sulfur coal since June at the Total kilowatt-hour sales were plant. Unit No. 5 was out of service 4 2.9 percent higher than in 1978. It should be noted that 1979 was from February 9 to June 7. In Kilowatt-hour sales showed an a year without the usual extremes addition, the Beaver Valley nuclear increase of 93,767,284 over 1978, of weather, resulting in less use of station was out of service from while total electric sales revenues heating and air conditioning in March 13 to August 20 for the increased 25.1 percent to $134.7 many homes. This was compound. Nuclear Regulatory Commission million. ed by lower general use because of (NRC) design investigation and higher energy costs. It was also a required modifications. Resuming The previous year's rate increase year which saw a slowing economic production in August,it again was of $23.3 million and increased fuel pace in its latter months. taken out of service December 1 for prices affected all retail rate classes refueling and further modifications. | ||
July 16 and equalled August 1. although total residential kilowatt. Plant and the use of more expensive hour sales did increase 1.1 percent. low-sulfur coal since June at the Total kilowatt-hour sales were plant. Unit No. 5 was out of service 4 2.9 percent higher than in 1978. It should be noted that 1979 was from February 9 to June 7. In Kilowatt-hour sales showed an a year without the usual extremes addition, the Beaver Valley nuclear increase of 93,767,284 over 1978, of weather, resulting in less use of station was out of service from while total electric sales revenues heating and air conditioning in March 13 to August 20 for the increased 25.1 percent to $134.7 many homes. This was compound. Nuclear Regulatory Commission million. ed by lower general use because of (NRC) design investigation and higher energy costs. It was also a required modifications. Resuming The previous year's rate increase year which saw a slowing economic production in August,it again was of $23.3 million and increased fuel pace in its latter months. taken out of service December 1 for prices affected all retail rate classes refueling and further modifications. | |||
and raised the average residential The limited growth in the resi- It is not expected to return to pro-rate to 5.64 cents a kilowatt-hour dential area was offset to some duction until July 1980. | and raised the average residential The limited growth in the resi- It is not expected to return to pro-rate to 5.64 cents a kilowatt-hour dential area was offset to some duction until July 1980. | ||
compared to 4.56 cents a kilowatt- degree by the record of industrial hour in 1978. and commercial use, Industrial Loss of production from these kilowatt-hour sales have shown a two stations required the operation Average use per residential solid growth trend for the past of less efficient units and also i customer was 7,626 kilowatt-hours three years. Industrial sales for caused purchased and interchanged compared to 7,679 kilowatt-hours 1979 rose by 3.4 percent to a level power costs to increase S4.4 million. | compared to 4.56 cents a kilowatt- degree by the record of industrial hour in 1978. and commercial use, Industrial Loss of production from these kilowatt-hour sales have shown a two stations required the operation Average use per residential solid growth trend for the past of less efficient units and also i customer was 7,626 kilowatt-hours three years. Industrial sales for caused purchased and interchanged compared to 7,679 kilowatt-hours 1979 rose by 3.4 percent to a level power costs to increase S4.4 million. | ||
in 1978. The average annual resi- second only to the high established dential bill was $430.01 compared in 1973. Commercial kilowatt hour Total operating taxes increased to S349.84 in 1978. sales rose 3.7 percent, to S17.7 million from S9.7 million in 1978. Interest charges rose, This was the first year since the Total operating expenses were amounting to S18.8 million, due depression years of the early 1930s $85.7 million, compared to S73.8 principally to the sale of first that the average residential kilowatt- l million in 1978. These expenses per mortgage bonds June 28,1979. | in 1978. The average annual resi- second only to the high established dential bill was $430.01 compared in 1973. Commercial kilowatt hour Total operating taxes increased to S349.84 in 1978. sales rose 3.7 percent, to S17.7 million from S9.7 million in 1978. Interest charges rose, This was the first year since the Total operating expenses were amounting to S18.8 million, due depression years of the early 1930s $85.7 million, compared to S73.8 principally to the sale of first that the average residential kilowatt- l million in 1978. These expenses per mortgage bonds June 28,1979. | ||
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j Workmen at the generator of Unit No. 3 at the Bruce Mansfield Plant. Unit No. 3 is scheduled forcommercial operation in October i980. | j Workmen at the generator of Unit No. 3 at the Bruce Mansfield Plant. Unit No. 3 is scheduled forcommercial operation in October i980. | ||
Most of the Company's construc- Company is the builder and the Company has ownership l tion funds are allocated for operator of the Bruce Mansfield interests. l generating facilities in conjunction Plant for the CAPCO group. The with th nstruction program of plant is located at Shippingport, PA. he four un s terminated by this On three occasions, in 1974, the Davis Besse Nuclear Power 1977 and 1978, the CAPCO Station near Port Clinton, Ohio This fivew ompany group, in | Most of the Company's construc- Company is the builder and the Company has ownership l tion funds are allocated for operator of the Bruce Mansfield interests. l generating facilities in conjunction Plant for the CAPCO group. The with th nstruction program of plant is located at Shippingport, PA. he four un s terminated by this On three occasions, in 1974, the Davis Besse Nuclear Power 1977 and 1978, the CAPCO Station near Port Clinton, Ohio This fivew ompany group, in companies revised construction and Units Nos.1 and 2 at the Erie addition to the Company and Ohi Nuclear Plant north of Berlin Edison, consists of The Cleveland schedules for generating units. | ||
companies revised construction and Units Nos.1 and 2 at the Erie | |||
addition to the Company and Ohi Nuclear Plant north of Berlin Edison, consists of The Cleveland schedules for generating units. | |||
l Forecasts indicated a slowing of Heights, Ohio. At the time of l | l Forecasts indicated a slowing of Heights, Ohio. At the time of l | ||
Electric Illuminating Company, customer electricity needs, and the termination all of these units were Duquesne Light Company and The in the design stage. | Electric Illuminating Company, customer electricity needs, and the termination all of these units were Duquesne Light Company and The in the design stage. | ||
| Line 640: | Line 358: | ||
ownership interests have been com- group announced major cutbacks in Perry Unit No.1 has been pleted. A fourth coal-fired unit, its construction program, termina- rescheduled from May 1983 to May Bruce Mansfield Unit No. 3, is ting four nuclear units and 1984. Perry Unit No. 2 has been scheduled to go into commercial extending construction periods for rescheduled from May 1985 to May operation in October 1980. The two other nuclear units in which 1988. | ownership interests have been com- group announced major cutbacks in Perry Unit No.1 has been pleted. A fourth coal-fired unit, its construction program, termina- rescheduled from May 1983 to May Bruce Mansfield Unit No. 3, is ting four nuclear units and 1984. Perry Unit No. 2 has been scheduled to go into commercial extending construction periods for rescheduled from May 1985 to May operation in October 1980. The two other nuclear units in which 1988. | ||
6 m q | 6 m q | ||
], | ], | ||
'. ; .t uaaa o | '. ; .t uaaa o | ||
i 1 | i 1 | ||
l Below are the various CAPCO ' | l Below are the various CAPCO ' | ||
~--m-&v - | ~--m-&v - | ||
--m- ! | --m- ! | ||
units and the Company's present - | units and the Company's present - | ||
share of ownership. , | share of ownership. , | ||
; | ; | ||
Coal. fired Bruce Mansfield No.1. | Coal. fired Bruce Mansfield No.1. | ||
y " | y " | ||
.. 4.2?e , | .. 4.2?e , | ||
Bruce Mansfield No. 2. . . . 6.8?o . | Bruce Mansfield No. 2. . . . 6.8?o . | ||
Bruce Mansfield No. 3. . . . 6.28?o | Bruce Mansfield No. 3. . . . 6.28?o | ||
* W. H. Sammis No. 7 . . . . . 20.87. N | * W. H. Sammis No. 7 . . . . . 20.87. N | ||
: n. - | : n. - | ||
Nuclear ~ 't ' ' t. | Nuclear ~ 't ' ' t. | ||
| Line 681: | Line 389: | ||
e between 1966 and 1973 averaged 6.9 percent. In the period following | e between 1966 and 1973 averaged 6.9 percent. In the period following | ||
.M2j$725@$1925dn.is!!ET7M the Arab oilembargo 1974 to 1978, demand declined in two of the five customers in northern and central years and annual growth averaged Ohio and western Pennsylvania,is only 1.6 percent in the state. The in the range of 2 to 4 percent each revised projected rate of growth in year. | .M2j$725@$1925dn.is!!ET7M the Arab oilembargo 1974 to 1978, demand declined in two of the five customers in northern and central years and annual growth averaged Ohio and western Pennsylvania,is only 1.6 percent in the state. The in the range of 2 to 4 percent each revised projected rate of growth in year. | ||
customer demand for electricity for the CAPCO group of companies, Expenditures of $62.0 million who serve about 2.5 million .were authorized for 1979 by the | customer demand for electricity for the CAPCO group of companies, Expenditures of $62.0 million who serve about 2.5 million .were authorized for 1979 by the board of directors. A total of $57.6 | ||
board of directors. A total of $57.6 | |||
. _ . - ~ _ _ , . , _ | . _ . - ~ _ _ , . , _ | ||
million was expended for construc-1 tion, $45.7 million of that amount l 4 , | million was expended for construc-1 tion, $45.7 million of that amount l 4 , | ||
l being utilized for power plant con- | l being utilized for power plant con-struction. Most of the remainder | ||
struction. Most of the remainder | |||
! was utilized in substation construe. | ! was utilized in substation construe. | ||
tion and expansion and for trans-mission line construction. | tion and expansion and for trans-mission line construction. | ||
{ | { | ||
l | l | ||
( D b LEFT. New direction Castle line of Foreman crew. | ( D b LEFT. New direction Castle line of Foreman crew. | ||
W. L. under 9 Doran, 3 replaces a pole along a country road. d _ - | W. L. under 9 Doran, 3 replaces a pole along a country road. d _ - | ||
TOP. The coal-fired Bruce Mansfield Plant along the Ohio Riverat Shippingport. PA. Its three units will have a net dependable capability of ' | TOP. The coal-fired Bruce Mansfield Plant along the Ohio Riverat Shippingport. PA. Its three units will have a net dependable capability of ' | ||
L ,' -- . 2,475 megawatts. | L ,' -- . 2,475 megawatts. | ||
l 7 l r | l 7 l r | ||
I - _ _ _ _ _ _ _ ____ _ _ - _ - - - - . . . . . . - - - - - - - - - - - . - - - , . - - - - . ~ ~ . . . , - - - - - . - - - - - - - | I - _ _ _ _ _ _ _ ____ _ _ - _ - - - - . . . . . . - - - - - - - - - - - . - - - , . - - - - . ~ ~ . . . , - - - - - . - - - - - - - | ||
l Serving Customers 3 | |||
l Serving Customers | |||
3 | |||
- p 3 | - p 3 | ||
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| Line 731: | Line 420: | ||
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.mdustrial s . .. . o . . | |||
ABOVE LEFT Residentral customer servuces representatives u'Ith builders m Neu Castle area check msulation 9 7 q ,_;p; techniques ' .3.;,.p. | |||
.mdustrial | |||
s . .. . o . . | |||
ABOVE LEFT Residentral customer servuces representatives u'Ith builders m Neu Castle area check msulation 9 7 q ,_;p; | |||
techniques ' .3.;,.p. | |||
, .y j l ABOVE RIGHT J. F Haas. Left, energy l'i cd30NYU2' application engmeer, and ou'ners and operators of a Neu Castic plastics manufacturer u'tth a feu of their many produc ts. | , .y j l ABOVE RIGHT J. F Haas. Left, energy l'i cd30NYU2' application engmeer, and ou'ners and operators of a Neu Castic plastics manufacturer u'tth a feu of their many produc ts. | ||
CENTER Worker pours molten metal . | CENTER Worker pours molten metal . | ||
| Line 774: | Line 441: | ||
8 l | 8 l | ||
1 Four prmeipal objectives guided pattern of growth contmued in our builders m meeting required energy j | 1 Four prmeipal objectives guided pattern of growth contmued in our builders m meeting required energy j | ||
the Company's marketing activities area for several years. conservation standards. | the Company's marketing activities area for several years. conservation standards. | ||
j durmg the year. | j durmg the year. | ||
I Growing customer acceptance of A majority of home builders in These were to: the neat pump is most evident in our area are complying with the | I Growing customer acceptance of A majority of home builders in These were to: the neat pump is most evident in our area are complying with the Improve the economic utilization the residential area. The past year standards set in the " Easy on of Company facilities, was excellent for new home Energy Homes , program and all construction: 547 heat pumps were huilders are kept mformed as | ||
* Assist and encourage customers installed compared to 322 in 1978. requtrements or changes are made to use electneity wisely; A total of 590 all-electne residen. m construction or insulation | * Assist and encourage customers installed compared to 322 in 1978. requtrements or changes are made to use electneity wisely; A total of 590 all-electne residen. m construction or insulation | ||
* tial mstallations were added to our standards. This program has been in Maintam favorable customer lines, bringing the total to 3.383, effect for nearly three years. | * tial mstallations were added to our standards. This program has been in Maintam favorable customer lines, bringing the total to 3.383, effect for nearly three years. | ||
attitudes toward the Company and the value of electric service; n merease of more than 21 percent over 1978. While total-electnc homes have | attitudes toward the Company and the value of electric service; n merease of more than 21 percent over 1978. While total-electnc homes have Assist area communities to been growmg in number, the mamtain a healthy economy. Workshops and semmars held average energy use in such homes durmg the year, and close-workmg has shown a gradual decline. This, Agam this year, as m 1978, the relationships with architects and in part, is due to improvmg con-Company's efforts to shift industnal bmlders, emphasizing the imper- struction and msulation techmques loads to off-peak periods showed tance and economics of energy and also because of the growth of defmite progress. Six thousand management. were key elements heat pump mstallations, which use seven hundred fifty kilowatts were which encouraged this growth less energy than resistance heatmg. | ||
shifted to off-peak by mdustrial pattern. School programs and customers Annual system load pubhc meetings, conducted by the Durmg 1979,12 of the Company's factor increased from 71.0 percent Company's home economics 18 largest industrial customers to 71.6 percent. representatives, contmued to showed increases in kilowatt-hour disseminate useful energy mforma- use New mdustnal load connected Load meters and off peak water tion. Durmg the year 1,441 school, during the year totaled 20,444 heating rates for residential home and public programs were kilowatts compared to 18,873 customers have for years been a conducted. kilowatts m 1978. | shifted to off-peak by mdustrial pattern. School programs and customers Annual system load pubhc meetings, conducted by the Durmg 1979,12 of the Company's factor increased from 71.0 percent Company's home economics 18 largest industrial customers to 71.6 percent. representatives, contmued to showed increases in kilowatt-hour disseminate useful energy mforma- use New mdustnal load connected Load meters and off peak water tion. Durmg the year 1,441 school, during the year totaled 20,444 heating rates for residential home and public programs were kilowatts compared to 18,873 customers have for years been a conducted. kilowatts m 1978. | ||
useful method of controlling system loads. Peak load and power factor-sensitive billing is employed In ddition to the usual on-the. The past year was excellent in for the majority of industnal and j b assistance given by Company respect to expansion programa by commercial customers, enabling customer service representatives to area mdustries, yvith 11 expending thew customers to reahze economies huilders, a new element was more than e36.o million, providing in their operations and simultane- introduced during the year. a video. employment for 22,, workers. The ously improve our system load t pe camera. Recording proper Company s area development fac t or . equipment installation and msula. representatives, workmg with tion techniques has upgraded the commumty, county and state Electne heat pump installations quality of workmanship and development groups, attracted 16 have contmued their steady rise, a materials and has been helpful to new firms to our service area, representing a capital mvestment | useful method of controlling system loads. Peak load and power factor-sensitive billing is employed In ddition to the usual on-the. The past year was excellent in for the majority of industnal and j b assistance given by Company respect to expansion programa by commercial customers, enabling customer service representatives to area mdustries, yvith 11 expending thew customers to reahze economies huilders, a new element was more than e36.o million, providing in their operations and simultane- introduced during the year. a video. employment for 22,, workers. The ously improve our system load t pe camera. Recording proper Company s area development fac t or . equipment installation and msula. representatives, workmg with tion techniques has upgraded the commumty, county and state Electne heat pump installations quality of workmanship and development groups, attracted 16 have contmued their steady rise, a materials and has been helpful to new firms to our service area, representing a capital mvestment | ||
.. . of more than 86.7 million and 380 L " | .. . of more than 86.7 million and 380 L " | ||
' - * . 7 new jobs. | ' - * . 7 new jobs. | ||
'.< [ | '.< [ | ||
, i * | , i * | ||
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| Line 798: | Line 458: | ||
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Au ards were presented I4 budders who | |||
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y"+. constructed fu e or more "Eas'. ,m | y"+. constructed fu e or more "Eas'. ,m | ||
( * .P , | ( * .P , | ||
Energy Homes ' durme the '. ear 1. L | Energy Homes ' durme the '. ear 1. L | ||
;. | ;. | ||
, ', ' | , ', ' | ||
* I Elser. ! cit. and C W Beighev. right. | * I Elser. ! cit. and C W Beighev. right. | ||
;. g , h customer <crnces representatwes m the | ;. g , h customer <crnces representatwes m the | ||
- , p. | - , p. | ||
:n | :n | ||
. .. . .. zet,cnople Distrwt. u ith budders 9 | . .. . .. zet,cnople Distrwt. u ith budders 9 | ||
l 1 | l 1 | ||
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l TOP TO BOTTOM. High pressure sodium vapor lights were snstalled on East Washington Street in New Castle s renovated downtown business district. ,, | l TOP TO BOTTOM. High pressure sodium vapor lights were snstalled on East Washington Street in New Castle s renovated downtown business district. ,, | ||
Life-sue Reddy Kilowatt captured attention of child at lawrence County 3 | Life-sue Reddy Kilowatt captured attention of child at lawrence County 3 | ||
: _,, M | : _,, M | ||
| Line 890: | Line 503: | ||
-5 l f-*j _ | -5 l f-*j _ | ||
~~''O p-- lg . l | ~~''O p-- lg . l | ||
{ {EE | { {EE J. A. Elser at solar home in Zelienople - | ||
nV1 District which has heat pump for basic l T7' 2 ^= "% | |||
J. A. Elser at solar home in Zelienople - | |||
nV1 District which has heat pump for basic l T7' | |||
2 ^= "% | |||
f* -- | f* -- | ||
heating requirements. | heating requirements. | ||
Moraine State Park, about 12 miles | Moraine State Park, about 12 miles | ||
;- ~~ | ;- ~~ | ||
east of New Castic, continues to grow . | east of New Castic, continues to grow . | ||
as a major recreation area. . | as a major recreation area. . | ||
e- 4- | |||
- -e c., - s m-7,__ - . .- - | - -e c., - s m-7,__ - . .- - | ||
: i. < | : i. < | ||
p4 . | p4 . | ||
'a ,,p .- | 'a ,,p .- | ||
3M' , ! | 3M' , ! | ||
kZ ' ~Q , _ _. | kZ ' ~Q , _ _. | ||
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- 1 | - 1 | ||
~ ? n r. - --r l | |||
~ ? n r. - --r | l 10 l | ||
l | |||
10 l | |||
i | i | ||
; | ; | ||
Problems Ar w 7MWVm w persist | Problems Ar w 7MWVm w persist q | ||
WT y %e m | |||
; legal environmental g%y)d: cy M A. & {; f yMi W -[ y | ; legal environmental g%y)d: cy M A. & {; f yMi W -[ y | ||
; | ; | ||
g | g | ||
; . gl g , | ; . gl g , | ||
lW [.,1 J *? ;.- y. ;4 .l l .. l j.. | lW [.,1 J *? ;.- y. ;4 .l l .. l j.. | ||
: Through its participation in the d 'I? piJ M .fi i. m i .. ~I . | : Through its participation in the d 'I? piJ M .fi i. m i .. ~I . | ||
'[4 '/ ' * " # ' | '[4 '/ ' * " # ' | ||
CAPCO arrangement and because 'i - M of construction of facilities in both | CAPCO arrangement and because 'i - M of construction of facilities in both | ||
/ /P M;e ; y Sd g- | / /P M;e ; y Sd g-4* | ||
4* | |||
p, .. | p, .. | ||
h3.j h- hj[ ' p y N" s | h3.j h- hj[ ' p y N" s Ohio and Pennsylvania, the jq Company is subject to environ- Rff n- 9-* .,yL.4 | ||
Ohio and Pennsylvania, the jq Company is subject to environ- Rff n- 9-* .,yL.4 | |||
'. "Ml i 's gie | '. "Ml i 's gie | ||
; mental regulations in those states in #' -% *4e ,L4 g. [. e E | ; mental regulations in those states in #' -% *4e ,L4 g. [. e E | ||
'y l'3 | 'y l'3 addition to federal regulations. ' | ||
addition to federal regulations. ' | |||
7 | 7 | ||
( s A '.< ,g -f | ( s A '.< ,g -f f | ||
.,~~7 u | |||
f | |||
.,~~7 | |||
u | |||
l l | l l | ||
Severallegal proceedmgs are underway and various negotiations | Severallegal proceedmgs are underway and various negotiations | ||
, 9;q | , 9;q | ||
%x - ., Wie g | %x - ., Wie g | ||
.g M_ .g { g, .~ _. | .g M_ .g { g, .~ _. | ||
4Q a,jr g,. | 4Q a,jr g,. | ||
are continuing with environmental | are continuing with environmental | ||
; authorities seeking reasonable This pattern of vessels and maze ofpipes is the air quality controlsystem for Units Nos. l arrangements that will have the 1 and 2 at the Bruce .Mansfield Plant. I least economic impact on the Company and on its customers' The proceeding brought in the limits after August 7,1979, with electric bills. United States District Court for the certain exceptions. Even if the l Southern District of Ohio, Eastern proposed changes and schedules , | ; authorities seeking reasonable This pattern of vessels and maze ofpipes is the air quality controlsystem for Units Nos. l arrangements that will have the 1 and 2 at the Bruce .Mansfield Plant. I least economic impact on the Company and on its customers' The proceeding brought in the limits after August 7,1979, with electric bills. United States District Court for the certain exceptions. Even if the l Southern District of Ohio, Eastern proposed changes and schedules , | ||
; The United States Justice Depart- Division, asks the District Court to submitted for the New Castle | ; The United States Justice Depart- Division, asks the District Court to submitted for the New Castle | ||
; ment, at the request of the Federal assess " appropriate" but unspecified Power Plant and W. H. Sammis Unit | ; ment, at the request of the Federal assess " appropriate" but unspecified Power Plant and W. H. Sammis Unit | ||
| Line 1,006: | Line 564: | ||
against Duquesne Light Company share of the W. H. Sammis Unit and Ohio Edison Company as co. No.7. g}A | against Duquesne Light Company share of the W. H. Sammis Unit and Ohio Edison Company as co. No.7. g}A | ||
* g . | * g . | ||
'~d | '~d g | ||
owners of W. H.Sammis Unit No. 7. | |||
The Clean Air Act Amendments co I | The Clean Air Act Amendments co I | ||
W" J- # | W" J- # | ||
of 1977 include, among other things, provisions requiring the j imposition of substantial non- | of 1977 include, among other things, provisions requiring the j imposition of substantial non- | ||
. compliance penalties for failure to i comply with applicable emission 11 | . compliance penalties for failure to i comply with applicable emission 11 | ||
l l | l l | ||
| Line 1,021: | Line 575: | ||
, - n ie r . w- , , . . ~. - w relating to price adjustment and | , - n ie r . w- , , . . ~. - w relating to price adjustment and | ||
- ' ; -- | - ' ; -- | ||
vi s . | vi s . | ||
. other provisions of theoriginal | . other provisions of theoriginal 3' . ; . 4-' ' contract between the two partie ,. | ||
3' . ; . 4-' ' contract between the two partie ,. | |||
g .- i ' | g .- i ' | ||
T 1. - | T 1. - | ||
The suit seeks to termmate the | The suit seeks to termmate the | ||
.~ , ,$ ' | .~ , ,$ ' | ||
1 | 1 yh - * .. . ', i contract, pursuant to which Kerr- . | ||
yh - * .. . ', i contract, pursuant to which Kerr- . | |||
C' McGee Corporation is to dehver | C' McGee Corporation is to dehver | ||
.. . e^{i> | .. . e^{i> | ||
4 , t h'' l | 4 , t h'' l | ||
- A approximately 12 million pounds | - A approximately 12 million pounds | ||
{ m -g e . . | { m -g e . . | ||
of uramum through 1985. and | of uramum through 1985. and | ||
..,..* .f . | ..,..* .f . | ||
seeks damages m an unspecified | seeks damages m an unspecified b '% ~# | ||
b '% ~# | |||
~ | ~ | ||
x- 'c amount. On June 28.1979 the | x- 'c amount. On June 28.1979 the | ||
| Line 1,053: | Line 595: | ||
7, . | 7, . | ||
, IP " ' | , IP " ' | ||
for a declaratory judgment and r | |||
for a declaratory judgment and | M* | ||
I ,E exemplary damages against Kerr-t | I ,E exemplary damages against Kerr-t | ||
-i. | -i. | ||
[L ' f .'- ' | [L ' f .'- ' | ||
McGee Corporation and Kerr McGee l | McGee Corporation and Kerr McGee l | ||
.A ' ~ | .A ' ~ | ||
Nuclear Corporation in the United l | Nuclear Corporation in the United l | ||
.J i | |||
.J | |||
i | |||
. States District Court for the l | . States District Court for the l | ||
~ .. ' " | ~ .. ' " | ||
l - | l - | ||
.L - | .L - | ||
-- . Northern District of Ohio. The com-l : | -- . Northern District of Ohio. The com-l : | ||
N , | N , | ||
( = | ( = | ||
: ; t 4 plamt requests the Court to declare the rights and legal relations of the | : ; t 4 plamt requests the Court to declare the rights and legal relations of the | ||
+ | + | ||
s . | s . | ||
g" s' 4,8 parties as to disputed portions of I f 4 : . | |||
g" s' | |||
4,8 parties as to disputed portions of I f 4 : . | |||
iMJ .. | iMJ .. | ||
. - the 1973 contract and to grant to | . - the 1973 contract and to grant to | ||
; | ; | ||
'< ; ' | '< ; ' | ||
J the plaintiffs costs and exemplary | |||
/ .g , e N damages due to defendants' unjusti- | / .g , e N damages due to defendants' unjusti- | ||
@, x ' ' | @, x ' ' | ||
-1 : * - fiable actions in attempting to | -1 : * - fiable actions in attempting to | ||
'g* | 'g* | ||
- '74/ extract price mereases from the | - '74/ extract price mereases from the | ||
. . r_ f '. _ . e.. . ... . . - - - | . . r_ f '. _ . e.. . ... . . - - - | ||
1 J plaintiffs. On September 21.1979 L. L. Ilill, laborator:. analyst conducting one of a variety of tests in the laboratory at the District Court in Ohio trans-the Bruce 3fansfictd Plant. ferred this action to the Federal District Court in Oklahoma. | 1 J plaintiffs. On September 21.1979 L. L. Ilill, laborator:. analyst conducting one of a variety of tests in the laboratory at the District Court in Ohio trans-the Bruce 3fansfictd Plant. ferred this action to the Federal District Court in Oklahoma. | ||
could require purchases of power at the financial effects on the Company prices significantly greater than the is not known at this time but the Two of the Company's munici-Company's cost of generation. effect could he substantial. pal resale customers, the Boroughs of Ellwood City and Grove City, The Company has pending a In July 1977, actions were filed filed a complamt October 3,1977 request for a variance from the against the CAPCO t mpanies by the against the Company, alleging that l thermal requirements of the water Borough of Shippingport, where the the Company violated the antitrust | could require purchases of power at the financial effects on the Company prices significantly greater than the is not known at this time but the Two of the Company's munici-Company's cost of generation. effect could he substantial. pal resale customers, the Boroughs of Ellwood City and Grove City, The Company has pending a In July 1977, actions were filed filed a complamt October 3,1977 request for a variance from the against the CAPCO t mpanies by the against the Company, alleging that l thermal requirements of the water Borough of Shippingport, where the the Company violated the antitrust discharge at its New Castle Power Bruce Mansfield Plant and the laws in respect to access to alterna-Plant with the Pennsylvania DER Beaver Valley Power Station tive sources of power and nuclear I and a request for a similar variance are located. These actions seek to generating facilities owned by the at the W. H. Sammis Plant is pend- enjoin operation of these two plants. C APCO companies, the " wheeling" ing with the Ohio EPA. If the In addition, individual plaintiffs of power to municipal systems, rate I variances are not granted, the have filed actions seeking monetary schedules and other acts concerning Company may be required to install relief in an unspecified amount for terms and conditions of service. | ||
discharge at its New Castle Power Bruce Mansfield Plant and the laws in respect to access to alterna-Plant with the Pennsylvania DER Beaver Valley Power Station tive sources of power and nuclear I and a request for a similar variance are located. These actions seek to generating facilities owned by the at the W. H. Sammis Plant is pend- enjoin operation of these two plants. C APCO companies, the " wheeling" ing with the Ohio EPA. If the In addition, individual plaintiffs of power to municipal systems, rate I variances are not granted, the have filed actions seeking monetary schedules and other acts concerning Company may be required to install relief in an unspecified amount for terms and conditions of service. | |||
l off-stream coohng at one or both of damages claimed to be a result of The plaintiffs claimed treble I the plants. alleged operational malfunctions of damages totaling $21 million. On l the flue gas desulfurization system June 6,1978 the Company filed a l The final determmation of many at the Bruce Mansfield Plant and motion to dismiss or in the alterna- l of these environmental matters and the threat of radioactive emissions tive to stay the action. The Court from the Beaver Valley Power on January 4,1979 granted the l | l off-stream coohng at one or both of damages claimed to be a result of The plaintiffs claimed treble I the plants. alleged operational malfunctions of damages totaling $21 million. On l the flue gas desulfurization system June 6,1978 the Company filed a l The final determmation of many at the Bruce Mansfield Plant and motion to dismiss or in the alterna- l of these environmental matters and the threat of radioactive emissions tive to stay the action. The Court from the Beaver Valley Power on January 4,1979 granted the l | ||
Station. Company's motion in part by j dismissing most of the claims, ' | Station. Company's motion in part by j dismissing most of the claims, ' | ||
A complaint, dated April 10, staying one claim, and allowmg one 1979, was filed against the CAPCO claim to continue. | A complaint, dated April 10, staying one claim, and allowmg one 1979, was filed against the CAPCO claim to continue. | ||
| Line 1,144: | Line 637: | ||
12 | 12 | ||
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l h '' | l h '' | ||
t Q%)l ; | t Q%)l ; | ||
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y | y l | ||
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$4 -. % | $4 -. % | ||
< a q' - | < a q' - | ||
) LEFT. Testing the unter quality of the f Beaver River at the New Castle Power Plant was done by a Pittsburgh firm, results wtll be made acallable to environ-mental and regulatory agencies. | ) LEFT. Testing the unter quality of the f Beaver River at the New Castle Power Plant was done by a Pittsburgh firm, results wtll be made acallable to environ-mental and regulatory agencies. | ||
' : "' ABOVE. The New Castle Power Plant at h--a | ' : "' ABOVE. The New Castle Power Plant at h--a | ||
* j West Pittsburg, PA with its banks of electrostatic precipitators and 750 foot | * j West Pittsburg, PA with its banks of electrostatic precipitators and 750 foot K' " ' | ||
K' " ' | |||
high chimney. | high chimney. | ||
a | a | ||
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~,M ' | ~,M ' | ||
l j' t ( | |||
l | |||
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g,;u s RLD b | g,;u s RLD b | ||
= | = | ||
| Line 1,195: | Line 662: | ||
base as a result of this or any out-age of the unit and whether Full discussions of legal <envtron-expenditures by the Company for mentalissues appear in the Notes to purchased power resulting from any Financial Statements in this report. | base as a result of this or any out-age of the unit and whether Full discussions of legal <envtron-expenditures by the Company for mentalissues appear in the Notes to purchased power resulting from any Financial Statements in this report. | ||
such outage should be disallowed for purposes of the Company's p | such outage should be disallowed for purposes of the Company's p | ||
) | ) | ||
energy clause. g ,y , g | energy clause. g ,y , g | ||
,u1 i t 1.a in a separate investigation, the PUC is considering whether addi-13 | ,u1 i t 1.a in a separate investigation, the PUC is considering whether addi-13 | ||
1 i | 1 i | ||
l l | l l | ||
l 0000000ODO00O0000000O0000000.00000OOOOOOO | l 0000000ODO00O0000000O0000000.00000OOOOOOO | ||
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Seldom has any subject captured In our desire to reach as many These two groups are a Speakers and held public attention over such citizens as possible' with useful Bureau and a Consumer Informa-a long period as that of energy and energy information,its costs,its tion Group. The Speakers Bureau, its problems. problems and its benefits, the consisting of 11 employees , | Seldom has any subject captured In our desire to reach as many These two groups are a Speakers and held public attention over such citizens as possible' with useful Bureau and a Consumer Informa-a long period as that of energy and energy information,its costs,its tion Group. The Speakers Bureau, its problems. problems and its benefits, the consisting of 11 employees , | ||
Company has for years utilized representing several departments in With all of our expertise in pro- newspaper and radio advertising, the Company, this past year ducing and delivering electric regular news stories, displays and presented programs on an average energy, the need to explain the information booklets and motion of once every 11 days, speaking to industry to our customers has picture films. total audiences of 1,449. Since grown proportionately with the 1979 was designated the Centennial attention energy's problems have The Company's monthly news of Light year by the industry, received. magazine for employees is nearing marking the anniversary of Edison's its 50th consecutive year of publi- invention of the incandescent light, cation;a quarterly magazine known particular attention was given this as " Profile"is now in its seventh topic by the Speakers Bureau. | Company has for years utilized representing several departments in With all of our expertise in pro- newspaper and radio advertising, the Company, this past year ducing and delivering electric regular news stories, displays and presented programs on an average energy, the need to explain the information booklets and motion of once every 11 days, speaking to industry to our customers has picture films. total audiences of 1,449. Since grown proportionately with the 1979 was designated the Centennial attention energy's problems have The Company's monthly news of Light year by the industry, received. magazine for employees is nearing marking the anniversary of Edison's its 50th consecutive year of publi- invention of the incandescent light, cation;a quarterly magazine known particular attention was given this as " Profile"is now in its seventh topic by the Speakers Bureau. | ||
| Line 1,232: | Line 685: | ||
- another useful communication tool, Ray E. Semmler during an employee information meeting; D * () r g U,]3b g , a particularly at a modern coal-fired plant such as the Bruce Mansfield Gary Brown exhibiting Centennial Plant, with its impressive array of of Light symbolduring a Speaker's environmental equipment. Requests Bureau presentation; for tours at this installation have l | - another useful communication tool, Ray E. Semmler during an employee information meeting; D * () r g U,]3b g , a particularly at a modern coal-fired plant such as the Bruce Mansfield Gary Brown exhibiting Centennial Plant, with its impressive array of of Light symbolduring a Speaker's environmental equipment. Requests Bureau presentation; for tours at this installation have l | ||
One of sevemigroupsparticipating been at a high level since they in Nuclear Energy Education Day began several years ago. About (NEED)last October. 2,300 visitors, ranging from 14 | One of sevemigroupsparticipating been at a high level since they in Nuclear Energy Education Day began several years ago. About (NEED)last October. 2,300 visitors, ranging from 14 | ||
00 0000 000'0000000000 00000000 000000000 | 00 0000 000'0000000000 00000000 000000000 | ||
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hp | hp | ||
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elementary school students to state newspaper. Several such sessions electricity. With respect to price,64 | elementary school students to state newspaper. Several such sessions electricity. With respect to price,64 legislators and engmeers from were also held for employees. percent rated electricity in the I | ||
legislators and engmeers from were also held for employees. percent rated electricity in the I | |||
foreign countries, toured the plant excellent or good category and 94 this past year. For the second consecutive year percent rated their electric service a random, direct-mail opinion poll excellent or good. Admittedly, a When Nuclear Energy Education was taken of 500 of our residential poll taken in this manner does not Day was observed nationally in mid- customers. Simple in design, have the scientific approach of the October, the Speakers Bureau quickly and easily answered, the professional pollsters, but we feel it sponsored a series of informal questionnaire sought customer does give a useful cross-section of information sessions throughout opinions about their electric service pubhc opmion. | foreign countries, toured the plant excellent or good category and 94 this past year. For the second consecutive year percent rated their electric service a random, direct-mail opinion poll excellent or good. Admittedly, a When Nuclear Energy Education was taken of 500 of our residential poll taken in this manner does not Day was observed nationally in mid- customers. Simple in design, have the scientific approach of the October, the Speakers Bureau quickly and easily answered, the professional pollsters, but we feel it sponsored a series of informal questionnaire sought customer does give a useful cross-section of information sessions throughout opinions about their electric service pubhc opmion. | ||
the service area. Nuclear specialists and quality of service, nuclear from a major manufacturer lent their energy, possible energy shortages In a continuing effort to expand expertise to many of these sessions, and value of products related to employee understanding of which were attended by interested price. The results indicated that 51 Company operations and current citizens. The event was thoroughly percent feel that nuclear energy events, Company President Ray E. | the service area. Nuclear specialists and quality of service, nuclear from a major manufacturer lent their energy, possible energy shortages In a continuing effort to expand expertise to many of these sessions, and value of products related to employee understanding of which were attended by interested price. The results indicated that 51 Company operations and current citizens. The event was thoroughly percent feel that nuclear energy events, Company President Ray E. | ||
covered by television, radio and should be used to generate Semmler for many years has conducted semi-annual special | covered by television, radio and should be used to generate Semmler for many years has conducted semi-annual special | ||
{.... + . . . . , . ., , , . , . | {.... + . . . . , . ., , , . , . | ||
.x - | .x - | ||
.? employee information meetings. | .? employee information meetings. | ||
.> , .: - .. ME Meetings have been held at locations hn4'NM_ | .> , .: - .. ME Meetings have been held at locations hn4'NM_ | ||
i* d".' k[. | i* d".' k[. | ||
throughout the Company area and | throughout the Company area and | ||
< virtually every employee has attended, with the opportunity to | |||
< virtually every employee has | |||
attended, with the opportunity to | |||
: l. .. - | : l. .. - | ||
x .. .- get answers to any and all questions | x .. .- get answers to any and all questions | ||
_ .) r e .gsgg Q., about the Company. | _ .) r e .gsgg Q., about the Company. | ||
4,., . ., . | 4,., . ., . | ||
~~ | ~~ | ||
r. | r. | ||
| Line 1,295: | Line 715: | ||
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,.,i_. _.,. y .. , y Requests continue for tours of the Bruce | ,.,i_. _.,. y .. , y Requests continue for tours of the Bruce | ||
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Stan field Plant This group is in the cor: trol room at the plant 15 | Stan field Plant This group is in the cor: trol room at the plant 15 | ||
a.. | a.. | ||
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| Line 1,368: | Line 751: | ||
/ | / | ||
/' | /' | ||
m leadership ; ' | m leadership ; ' | ||
, ; 1 1("J. . ~ | , ; 1 1("J. . ~ | ||
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and safety F i | and safety F i | ||
~ | ~ | ||
An outside firm conducted intensive sessions during a three-day Customer Contact Workshop for employees whose work involves consumer problems. | An outside firm conducted intensive sessions during a three-day Customer Contact Workshop for employees whose work involves consumer problems. | ||
Employment rolls continue to Employees represented by the techniques to be efficient, and the ' | Employment rolls continue to Employees represented by the techniques to be efficient, and the ' | ||
| Line 1,383: | Line 762: | ||
$492 per employee per month. lines of the President's Council on One of the most important, and Wage and Price Stability. perhaps most difficult, of all aspects of a company's operations | $492 per employee per month. lines of the President's Council on One of the most important, and Wage and Price Stability. perhaps most difficult, of all aspects of a company's operations | ||
% During 1979 the Company was lies in the area of employee safety. | % During 1979 the Company was lies in the area of employee safety. | ||
\[]tl [g | \[]tl [g selected, because of its small size, by g g q Oo i.. | ||
selected, because of its small size, by g g q Oo i.. | |||
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' "i d \a J - the PUC to be the first electric utility to be audited by an outside Although the Company had its first lost-time accident in several l consulting firm for management years because of an electrical effectiveness. Their findings showed contact, excellent safety records the Company's management have continued. The Company's 16 l | ' "i d \a J - the PUC to be the first electric utility to be audited by an outside Although the Company had its first lost-time accident in several l consulting firm for management years because of an electrical effectiveness. Their findings showed contact, excellent safety records the Company's management have continued. The Company's 16 l | ||
l | l | ||
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= | = | ||
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4 . ,. - at that time was executive vice t president and a director of Ohio | 4 . ,. - at that time was executive vice t president and a director of Ohio | ||
#; | #; | ||
v.' g.. - | v.' g.. - | ||
t - | t - | ||
3 y- Edison. When John R. White retired p - ) , | |||
3 | |||
y- Edison. When John R. White retired p - ) , | |||
.;, ,* 7 -= | .;, ,* 7 -= | ||
from his duties as chairman of the | from his duties as chairman of the | ||
.. c .: board on December 31,1979, | .. c .: board on December 31,1979, W ~ | ||
W ~ | |||
' L ' - | ' L ' - | ||
~ | ~ | ||
a - Mr. Rogers succeeded him as | a - Mr. Rogers succeeded him as | ||
,. g , _ , chairman. | ,. g , _ , chairman. | ||
'. l / [/ ~~ - | '. l / [/ ~~ - | ||
| Line 1,455: | Line 795: | ||
All of the Company's common j | All of the Company's common j | ||
.# ,' ( .-i +. . | .# ,' ( .-i +. . | ||
A stock is owned by the Ohio Edison i | A stock is owned by the Ohio Edison i | ||
.. .. Company, parent of Pennsylvama | .. .. Company, parent of Pennsylvama | ||
. +. . - | . +. . - | ||
' .s.% | ' .s.% | ||
Power Company. At year end, the | Power Company. At year end, the | ||
..r f .. ,2 ,, | ..r f .. ,2 ,, | ||
; Company had outstanding nine series of cumulative preferred stock Company supervisors attended classes to study the elements of effective management. held by 3,483 shareholders. There were a total of 599,049 preferred shares outstanding. The preferred Mercer County Substation Depart- Castle Power Plant's Operating stock is listed on the Philadelphia ment has worked more than 26 Department reached 800 days Stock Exchange, Inc. | ; Company had outstanding nine series of cumulative preferred stock Company supervisors attended classes to study the elements of effective management. held by 3,483 shareholders. There were a total of 599,049 preferred shares outstanding. The preferred Mercer County Substation Depart- Castle Power Plant's Operating stock is listed on the Philadelphia ment has worked more than 26 Department reached 800 days Stock Exchange, Inc. | ||
l years without a lost-time accident. without a lost-time accident. | l years without a lost-time accident. without a lost-time accident. | ||
Employees in the Zelienople District achieved 1,600 days and A single noncontributory BELOW. L. D Westerman, left, a member New Castle office employees trusteed pension plan covers all of the Zelienople District's meter depart-2,400 days without lost-time employees. At the end of the year ment and veteran of 33 accident. free accidents. In December the New 233 former employees and years with the company. challenged provisional payees or surviving R. W. .\ fann, center, a new employee in | Employees in the Zelienople District achieved 1,600 days and A single noncontributory BELOW. L. D Westerman, left, a member New Castle office employees trusteed pension plan covers all of the Zelienople District's meter depart-2,400 days without lost-time employees. At the end of the year ment and veteran of 33 accident. free accidents. In December the New 233 former employees and years with the company. challenged provisional payees or surviving R. W. .\ fann, center, a new employee in | ||
' ' r. | ' ' r. | ||
the district's line department, to match | the district's line department, to match | ||
~ | ~ | ||
'4'~'' spouses of deceased employees | '4'~'' spouses of deceased employees | ||
- - Y' were receiving retirement incomes Weste man 's perfect safety record. | - - Y' were receiving retirement incomes Weste man 's perfect safety record. | ||
\' '* Challenge was issued during observation | \' '* Challenge was issued during observation | ||
' E' through the plan Fourteen | ' E' through the plan Fourteen employees retired during the year. # " '"#""### #*## }"## "" 'A'# | ||
employees retired during the year. # " '"#""### #*## }"## "" 'A'# | |||
marked 1,600 days without a lost-time k' ,%\ ' - -' '' ' : = | marked 1,600 days without a lost-time k' ,%\ ' - -' '' ' : = | ||
During the past year the Board accident. President Rav E. Semmler joined hands with Westerman and .\tann | During the past year the Board accident. President Rav E. Semmler joined hands with Westerman and .\tann | ||
?- . | ?- . | ||
l L # of Directors had several changes in to seal the bargam. | l L # of Directors had several changes in to seal the bargam. | ||
personnel. In May, Victor A. Owoc Y b*,-,-\ and Justin T. Rogers, Jr. were elected to the board. Mr. Owoc is executive vice president and a director of Ohio Edison: Mr. Rogers, I l | |||
personnel. In May, Victor A. Owoc Y b*,-,-\ and Justin T. Rogers, Jr. were | |||
elected to the board. Mr. Owoc is executive vice president and a | |||
director of Ohio Edison: Mr. Rogers, I l | |||
~ | ~ | ||
now president of Ohio Edison, ,- 'r l | now president of Ohio Edison, ,- 'r l | ||
,k | ,k | ||
., , l l | ., , l l | ||
LEFT D E. Hackett, director. accident 4* | |||
prevention, left, received a Certificate of . | prevention, left, received a Certificate of . | ||
Appreciation from the Pennsylvania | Appreciation from the Pennsylvania 1 | ||
1 | |||
Electric Association for serumg as chair- p | Electric Association for serumg as chair- p | ||
= | = | ||
l man of the PEA .tccident Preventian _ , | l man of the PEA .tccident Preventian _ , | ||
.; | .; | ||
Committee from 1977 to 1979. Ray E. | Committee from 1977 to 1979. Ray E. | ||
Semmler. Company President and a past y' | Semmler. Company President and a past y' | ||
| Line 1,542: | Line 837: | ||
1 | 1 | ||
Service Area and = 1 CAPCO Power Pool (( ) | Service Area and = 1 CAPCO Power Pool (( ) | ||
c._....... | c._....... | ||
T. i, | T. i, | ||
,j i so,, e k CRAWf ORD | ,j i so,, e k CRAWf ORD | ||
____g,_,_. -- | ____g,_,_. -- | ||
ss ar m. ,,,,,,,,, | ss ar m. ,,,,,,,,, | ||
'" 0 cpEENYlLLE Davis Bisst | '" 0 cpEENYlLLE Davis Bisst ndyL.h. | ||
: y. c, l g, g keertete I s, ,,.. | |||
ndyL.h. | |||
: y. c, | |||
l g, g keertete I s, ,,.. | |||
.m.i e,:" | .m.i e,:" | ||
savEnva"f sedte 8' For .' | savEnva"f sedte 8' For .' | ||
| Line 1,567: | Line 855: | ||
1 . | 1 . | ||
,5::''c.. 1 i | ,5::''c.. 1 i | ||
PENNSYLVANIA POWER COMPANY GENEAATING UNITE g WR NT C DUQUESNE LIGHT COMPANY k O' l | PENNSYLVANIA POWER COMPANY GENEAATING UNITE g WR NT C DUQUESNE LIGHT COMPANY k O' l | ||
THE ILLUMINATING COMPANY New k > t osio to=N COMPANY c=~ ^M -"'a'. .. "" | THE ILLUMINATING COMPANY New k > t osio to=N COMPANY c=~ ^M -"'a'. .. "" | ||
u.. co .... | u.. co .... | ||
__ g 'W- - 4 ^ | __ g 'W- - 4 ^ | ||
''"***** * '*3 i / *, | ''"***** * '*3 i / *, | ||
THE TOLEDO EDISON COMPANY i l | THE TOLEDO EDISON COMPANY i l g j } | ||
g j } | |||
: o. l..g. .. | : o. l..g. .. | ||
c Chip a g,,,, ca, l | c Chip a g,,,, ca, l | ||
1 . | 1 . | ||
cei.,, , | cei.,, , | ||
| Line 1,590: | Line 869: | ||
power generation and transmission f acilities. Members include g BRUCE MANSFIELD I'*d'''d ***d' Pennsylvania Power Company, Duquesne Light Company, The BE AVER VALLEY Cleveland Electric illuminating Company. Ohio Edison POWER STATION NENY Company and The Toledo Edison Company. . | power generation and transmission f acilities. Members include g BRUCE MANSFIELD I'*d'''d ***d' Pennsylvania Power Company, Duquesne Light Company, The BE AVER VALLEY Cleveland Electric illuminating Company. Ohio Edison POWER STATION NENY Company and The Toledo Edison Company. . | ||
J k Per6 LEGEND | J k Per6 LEGEND | ||
-m us Vett LMs >-mitusmem | -m us Vett LMs >-mitusmem | ||
-01 pg ANB 18 N1 Volt (MS 9 CElllC 3[IVCl EIlll | -01 pg ANB 18 N1 Volt (MS 9 CElllC 3[IVCl EIlll | ||
| Line 1,597: | Line 875: | ||
D WT@ | D WT@ | ||
Ws ofs 1 k!/b | Ws ofs 1 k!/b | ||
Pennsylvania Power Company Operating Statistics 1979 1978 1977 1976 1975 1974 SALES IN KILOWATT. HOURS (MILLIONS) | Pennsylvania Power Company Operating Statistics 1979 1978 1977 1976 1975 1974 SALES IN KILOWATT. HOURS (MILLIONS) | ||
R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . 823.3 814.7 788.3 750.5 717.9 699.6 Com m e rcial . . . . . . . . . . . . . . . . . . . . . . . . . 512.6 494.5 487.8 467.6 442.4 414.5 I n d u st ria l . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,878.5 1,816.9 1,724.5 1,704.5 1,541.0 1,832.2 All O t h e r . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.4 125.0 123.4 112.0 104.8 105.3 Total. . . . . . . . . . . . . .. 3.344.8 3.251.1 3.124.0 3.034.6 2.806.1 3.051.6 REVENUES FROM SALES (THOUSANDS) | R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . 823.3 814.7 788.3 750.5 717.9 699.6 Com m e rcial . . . . . . . . . . . . . . . . . . . . . . . . . 512.6 494.5 487.8 467.6 442.4 414.5 I n d u st ria l . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,878.5 1,816.9 1,724.5 1,704.5 1,541.0 1,832.2 All O t h e r . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.4 125.0 123.4 112.0 104.8 105.3 Total. . . . . . . . . . . . . .. 3.344.8 3.251.1 3.124.0 3.034.6 2.806.1 3.051.6 REVENUES FROM SALES (THOUSANDS) | ||
R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . $46,425 $37,113 $31,763 $30,643 $29,967 $24,357 Co m me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 25,588 20,320 17,659 17,202 17,000 13,513 I n d u st rial . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,128 45,201 37,085 37,786 36,547 30,844 All O ther . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,540 4,994 3,555 2,955 2,465 2,500 To tal. . . . . . . . . . . . . . . . $134.681 $107.628 $90.062 $88.586 $85.979 $71.214 CUSTOMERS SERVED AT END OF YEAR R esid ential* . . . . . . . . . . . . . . . . . . . . . . . . . 109,032 107,126 105,197 103,725 101,924 100,545 Com me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 12,919 12,647 12,317 12,090 11,800 11,629 Industrial. . . . ...................... 135 133 133 135 133 133 All Other. ................. ....... 114 113 111 113 114 115 To ta l. . . . . . . . . . . . . . . . 122.200 120.019 117.758 116.063 113.971 112.422 | R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . $46,425 $37,113 $31,763 $30,643 $29,967 $24,357 Co m me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 25,588 20,320 17,659 17,202 17,000 13,513 I n d u st rial . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,128 45,201 37,085 37,786 36,547 30,844 All O ther . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,540 4,994 3,555 2,955 2,465 2,500 To tal. . . . . . . . . . . . . . . . $134.681 $107.628 $90.062 $88.586 $85.979 $71.214 CUSTOMERS SERVED AT END OF YEAR R esid ential* . . . . . . . . . . . . . . . . . . . . . . . . . 109,032 107,126 105,197 103,725 101,924 100,545 Com me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 12,919 12,647 12,317 12,090 11,800 11,629 Industrial. . . . ...................... 135 133 133 135 133 133 All Other. ................. ....... 114 113 111 113 114 115 To ta l. . . . . . . . . . . . . . . . 122.200 120.019 117.758 116.063 113.971 112.422 RESIDENTIAL | ||
RESIDENTIAL | |||
* CUSTOMER AVERAGES Average Kwh Used per R es.* Custo me r. . . . . . . . . . . . . . . . . . . 7,626 7,679 7,548 7,301 7,099 7,018 Average Price Per Kwh-R es.* (ce nts) . . . . . . . . . . . . . . . . . . . . . . 5.64 4.56 4.03 4.08 4.17 3.48 KILOWATT HOU RS G ENERATED (millions). . . . . . . . . .... . 3,194.8 3,320.1 3,550.6 2,779.3 2,375.0 2,620.5 KILOWATT. HOURS PURCHASED AND INTER CH ANG ED (millions) . . . . ..... 281.7 116.7 (205.8) 474.6 640.8 607.3 PEAK LOAD (kilowatts) . . . ....... .... 554,000 552,000 551,000 526,000 495,162 498,199 | * CUSTOMER AVERAGES Average Kwh Used per R es.* Custo me r. . . . . . . . . . . . . . . . . . . 7,626 7,679 7,548 7,301 7,099 7,018 Average Price Per Kwh-R es.* (ce nts) . . . . . . . . . . . . . . . . . . . . . . 5.64 4.56 4.03 4.08 4.17 3.48 KILOWATT HOU RS G ENERATED (millions). . . . . . . . . .... . 3,194.8 3,320.1 3,550.6 2,779.3 2,375.0 2,620.5 KILOWATT. HOURS PURCHASED AND INTER CH ANG ED (millions) . . . . ..... 281.7 116.7 (205.8) 474.6 640.8 607.3 PEAK LOAD (kilowatts) . . . ....... .... 554,000 552,000 551,000 526,000 495,162 498,199 | ||
* Includes farm customers | * Includes farm customers l | ||
19 | |||
P;nnsylvania Pow;r Company Financial Statistics 1979 1978 1977 1976 1975 1974 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $89,583 $87,212 $72,E10 Operating and Maintenance Expenses . . . . . 85,730 73,807 61,068 59,400 56,846 45,06 D ep reciation. . . . . . . . . . . . . . . . . . . . . . 12,517 11,887 10,654 7,342 5,984 5,856 Taxes: Federal and State income Currently Payable . . . . . . . . . . . . 2,241 (142) (979) (1,077) 5,713 2,472 Deferred (Net) . . . . . . . . . . . . . . 2,501 3,353 3,456 535 (126) 2,704 investment Tax Credits (Net) . . . . . 2,634 (1,458) (554) 1,423 701 238 G e n e ral . . . . . . . . . . . . . . . . . . . . 10,296 7,916 6,717 6.238 5,817 4,877 Operating income . . . . . . . . . . . . . . . . . . 29,421 23,755 20,481 15,722 12,277 11,347 Other income (Net) . . . . . . . . . . . . . . . . . 6,297 4,810 5,352 13,101 12,049 8,613 N et interest . . . . . . . . . . . . . . . . . . . . . . 14,512 13,578 10,322 12,304 8,941 7,484 income Before Cumulative Effect of a Change in Accounting Method. . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,476 Cumulative Effeet to December 31,1973 of Recording Metered but Unbilled Revenues (Net of related income taxes of $311,000) - - - - - | P;nnsylvania Pow;r Company Financial Statistics 1979 1978 1977 1976 1975 1974 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $89,583 $87,212 $72,E10 Operating and Maintenance Expenses . . . . . 85,730 73,807 61,068 59,400 56,846 45,06 D ep reciation. . . . . . . . . . . . . . . . . . . . . . 12,517 11,887 10,654 7,342 5,984 5,856 Taxes: Federal and State income Currently Payable . . . . . . . . . . . . 2,241 (142) (979) (1,077) 5,713 2,472 Deferred (Net) . . . . . . . . . . . . . . 2,501 3,353 3,456 535 (126) 2,704 investment Tax Credits (Net) . . . . . 2,634 (1,458) (554) 1,423 701 238 G e n e ral . . . . . . . . . . . . . . . . . . . . 10,296 7,916 6,717 6.238 5,817 4,877 Operating income . . . . . . . . . . . . . . . . . . 29,421 23,755 20,481 15,722 12,277 11,347 Other income (Net) . . . . . . . . . . . . . . . . . 6,297 4,810 5,352 13,101 12,049 8,613 N et interest . . . . . . . . . . . . . . . . . . . . . . 14,512 13,578 10,322 12,304 8,941 7,484 income Before Cumulative Effect of a Change in Accounting Method. . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,476 Cumulative Effeet to December 31,1973 of Recording Metered but Unbilled Revenues (Net of related income taxes of $311,000) - - - - - | ||
279 N et income . . . . . . . . . . . . . . . . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,755 Preferred Stock Dividend Requirements. . . . 4,660 4,660 3,873 3,626 3,035 2,120 Net in ome for Common Stock . . . . . . . . . $ 16.546 S 10.327 $11.638 $12.893 $12.350 $10.635 l | 279 N et income . . . . . . . . . . . . . . . . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,755 Preferred Stock Dividend Requirements. . . . 4,660 4,660 3,873 3,626 3,035 2,120 Net in ome for Common Stock . . . . . . . . . $ 16.546 S 10.327 $11.638 $12.893 $12.350 $10.635 l | ||
| Line 1,618: | Line 890: | ||
Non-redeemable Preferred Stock . . . . . . 9.5 10.1 11.0 12.5 12.0 13.6 Redeemable Preferred Stock . . . . . . . . . 4.0 4.3 4.7 2.4 2.8 - | Non-redeemable Preferred Stock . . . . . . 9.5 10.1 11.0 12.5 12.0 13.6 Redeemable Preferred Stock . . . . . . . . . 4.0 4.3 4.7 2.4 2.8 - | ||
Common Stock and Retained Earnings . . 35.2 36.1 37.0 35.2 37.5 39.4 20 . | Common Stock and Retained Earnings . . 35.2 36.1 37.0 35.2 37.5 39.4 20 . | ||
Pennsylvania Power Company Management Discussion and Analysis l | Pennsylvania Power Company Management Discussion and Analysis l | ||
l l | l l | ||
| Line 1,635: | Line 904: | ||
21 | 21 | ||
Management Discussion and An@rsis.-conuno.o In 1978 maintenance expenses the 30 mill rate and a one-time increased due to replacement of a surtax at 105 mills upon the failed step-up transformer at Beaver taxable value of items of utility Vcliey Unit No.1, replacement of a realty at December 31,1978 generator at W. H. Sammis Unit previously excluded from the tax No.7, along with forced and base less amounts of petitions for scheduled outages of various units refunds of the realty tax paid in ct the New Castle Power Plant prior years. | Management Discussion and An@rsis.-conuno.o In 1978 maintenance expenses the 30 mill rate and a one-time increased due to replacement of a surtax at 105 mills upon the failed step-up transformer at Beaver taxable value of items of utility Vcliey Unit No.1, replacement of a realty at December 31,1978 generator at W. H. Sammis Unit previously excluded from the tax No.7, along with forced and base less amounts of petitions for scheduled outages of various units refunds of the realty tax paid in ct the New Castle Power Plant prior years. | ||
during the year. The forced outages ct Beaver Valley Unit No.1 and Changes in the provisions for W. H. Sammis Unit No. 7 together income taxes for the years 1978 entailed nearly a year of downtime. and 1979 are set forth in Note 1 of Maintenance expenses in 1979 Notes to the Financial Statements. | during the year. The forced outages ct Beaver Valley Unit No.1 and Changes in the provisions for W. H. Sammis Unit No. 7 together income taxes for the years 1978 entailed nearly a year of downtime. and 1979 are set forth in Note 1 of Maintenance expenses in 1979 Notes to the Financial Statements. | ||
| Line 1,646: | Line 913: | ||
Commission. The increase of the placing in cornmercial operation | Commission. The increase of the placing in cornmercial operation | ||
! - $630,000 in 1979 is due to of Bruce Mansfield Unit No. 2 in additional plant placed in service. October 1977. The 1979 increase of $934,000 reflects the sale of | ! - $630,000 in 1979 is due to of Bruce Mansfield Unit No. 2 in additional plant placed in service. October 1977. The 1979 increase of $934,000 reflects the sale of | ||
. Taxes- pollution control notes and first | . Taxes- pollution control notes and first General taxes increased mortgage bonds in April and June | ||
General taxes increased mortgage bonds in April and June | |||
$1,199,000 for the year 1978 and of 1979, respectively, and the | $1,199,000 for the year 1978 and of 1979, respectively, and the | ||
$2,380,000 for the year 1979. The increase in short-term borrowings. | $2,380,000 for the year 1979. The increase in short-term borrowings. | ||
1,978 increase reDects higher gross The above increase is partially | 1,978 increase reDects higher gross The above increase is partially | ||
, receipts taxes as a result of higher offset by the allowance for l revenues, and additions to property borrowed funds used during construction, a credit amount, due | , receipts taxes as a result of higher offset by the allowance for l revenues, and additions to property borrowed funds used during construction, a credit amount, due h;ve resultedin higherproperty , | ||
h;ve resultedin higherproperty , | |||
taxes. The 1979 increase in general to the increase in the level of con. l taxes is principally due to an struction work in progress. ) | taxes. The 1979 increase in general to the increase in the level of con. l taxes is principally due to an struction work in progress. ) | ||
increase in Pennsylvania Gross Receipts Tax resulting from an increase in rates granted by the Pennsylvania Public Utility Commission effective September 1, 1978 and an increase in the Pennsylvania Public Utility Realty Tax due to an expanded tax base at 22' | increase in Pennsylvania Gross Receipts Tax resulting from an increase in rates granted by the Pennsylvania Public Utility Commission effective September 1, 1978 and an increase in the Pennsylvania Public Utility Realty Tax due to an expanded tax base at 22' | ||
Pennsylv:ni3 P w;r C mp;ny STATEMENTS OF INCOME AND RETAINED EARNINGS: For the Years Ended December 31,1979 and 1978 increase or 1979 1978 Decrease Thousands of Dollars Electric Operating Revenues (Note 1) . . . ........ .. $145,340 $119,118 +$ 26,222 Operating Expenses and Taxes: | Pennsylv:ni3 P w;r C mp;ny STATEMENTS OF INCOME AND RETAINED EARNINGS: For the Years Ended December 31,1979 and 1978 increase or 1979 1978 Decrease Thousands of Dollars Electric Operating Revenues (Note 1) . . . ........ .. $145,340 $119,118 +$ 26,222 Operating Expenses and Taxes: | ||
Operation-45,587 38,608 + 6,979 Cost of fuel (Note 1) . .. ... . . ......... ... | Operation-45,587 38,608 + 6,979 Cost of fuel (Note 1) . .. ... . . ......... ... | ||
| Line 1,667: | Line 926: | ||
Provision for depreciation (Note 1). . ...... . . 12.517 11,887 + 630 General taxes . . . . ... . ... ... .... .. 10,296 7,916 + 2,380 Income taxes (Note 1) . . . . . . . . .. ... 7,376 1,753 + 5.623 Total operating expenses and taxes. ... . . 115,919 95,363 + 20,556 Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 23,755 + 5,666 Other income and Deductions: | Provision for depreciation (Note 1). . ...... . . 12.517 11,887 + 630 General taxes . . . . ... . ... ... .... .. 10,296 7,916 + 2,380 Income taxes (Note 1) . . . . . . . . .. ... 7,376 1,753 + 5.623 Total operating expenses and taxes. ... . . 115,919 95,363 + 20,556 Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 23,755 + 5,666 Other income and Deductions: | ||
Allowance for equity funds used during construction (Note 1) . . . . .. . 6,258 4,592 + 1,666 Miscellaneous, net . . . .. . . . .. 78 419 - | Allowance for equity funds used during construction (Note 1) . . . . .. . 6,258 4,592 + 1,666 Miscellaneous, net . . . .. . . . .. 78 419 - | ||
341 Income taxes (Note 1) . . ..... . . .. . . . (39) (201) + 162 Total other income and deductions, net. . . 6.297 4,810 + 1,487 Total lncome . . . . . . . . . . . . . .. ........ ....... 35.718 28,565 + 7,153 | 341 Income taxes (Note 1) . . ..... . . .. . . . (39) (201) + 162 Total other income and deductions, net. . . 6.297 4,810 + 1,487 Total lncome . . . . . . . . . . . . . .. ........ ....... 35.718 28,565 + 7,153 Net interest: . | ||
Net interest: . | |||
Interest on long term debt. . .. . 17,353 15,292 + 2,061 Allowance for borrowed funds used during construction (Note 1). . . . . .. . . . .... (4,301) (2,613) - | Interest on long term debt. . .. . 17,353 15,292 + 2,061 Allowance for borrowed funds used during construction (Note 1). . . . . .. . . . .... (4,301) (2,613) - | ||
1,688 Other . . . . ... . 1,460 899 + 561 Net interest . . . . . . . . . 14,512 13.578 + 934 Ne t i n co m e . . . . . . . . . . . . . . . . . . . . . .......... 21,206 14,987 + 6,219 Preferred Stock Dividend Requirements. . . . . . . . . . . . . . . . 4,660 4,660 - | 1,688 Other . . . . ... . 1,460 899 + 561 Net interest . . . . . . . . . 14,512 13.578 + 934 Ne t i n co m e . . . . . . . . . . . . . . . . . . . . . .......... 21,206 14,987 + 6,219 Preferred Stock Dividend Requirements. . . . . . . . . . . . . . . . 4,660 4,660 - | ||
Net income for Common Stock . . . . . . . . . . . . . . . . . . . . . $ 16.546 S 10.327 +S 6.219 Retained Earnings-8alance at beginning of year . . . .. . S 32,828 $ 28,139 +S 4,689 Net income for common stock. . . . .. 16,546 10,327 + 6,219 Less-Dividends on common stock . . 12,278 5,452 + 6,826 | Net income for Common Stock . . . . . . . . . . . . . . . . . . . . . $ 16.546 S 10.327 +S 6.219 Retained Earnings-8alance at beginning of year . . . .. . S 32,828 $ 28,139 +S 4,689 Net income for common stock. . . . .. 16,546 10,327 + 6,219 Less-Dividends on common stock . . 12,278 5,452 + 6,826 | ||
-Dividends declared on preferred stock in excess of current period's requirements. . . | -Dividends declared on preferred stock in excess of current period's requirements. . . | ||
174 - | 174 - | ||
174 Capital stock issuance expense. - | 174 Capital stock issuance expense. - | ||
| Line 1,683: | Line 938: | ||
23 | 23 | ||
P:nnsylvania Pow;r Comp ny Balance Sheets: at oecember 31,1979 and 1978 Assets increase or 1979 1978 Decrease Thousands of Dollars Utility Plant (Note 1): | P:nnsylvania Pow;r Comp ny Balance Sheets: at oecember 31,1979 and 1978 Assets increase or 1979 1978 Decrease Thousands of Dollars Utility Plant (Note 1): | ||
In service, et original cost . . .. .. . .... . . S429,016 S414,657 +5 14,359 Less-Accumulated provision for depreciation. .... . 101,585 90,742 + 10,843 327,431 323,915 + 3,516 Construction work in progress . . . .. .. . .. .... 115,989 90,126 + 25,863 Nuclear fuel in process . . . . . ... .............. 1,739 1,591 + 148 445,159 415,632 + 29.527 Other Property and investments: | In service, et original cost . . .. .. . .... . . S429,016 S414,657 +5 14,359 Less-Accumulated provision for depreciation. .... . 101,585 90,742 + 10,843 327,431 323,915 + 3,516 Construction work in progress . . . .. .. . .. .... 115,989 90,126 + 25,863 Nuclear fuel in process . . . . . ... .............. 1,739 1,591 + 148 445,159 415,632 + 29.527 Other Property and investments: | ||
Construction funds held in escrow, including accrued interest. . . . .. ........... ........ 76 2,200 - 2,124 Other, at cost . . . . . . . ... . .. ... ........ 313 313 - | Construction funds held in escrow, including accrued interest. . . . .. ........... ........ 76 2,200 - 2,124 Other, at cost . . . . . . . ... . .. ... ........ 313 313 - | ||
389 2,513 - 2,124 Current Assets: | 389 2,513 - 2,124 Current Assets: | ||
Cash. ................ . ...... ....... 1,429 795 + 634 Receivabies-Customers (less accumulated provision of $180,000 and S160,000, respectively, for uncollectable accounts) . . . . 11,372 11,221 + 151 Parent Company . . . . ... ........ ........ 8,661 10,373 - 1,712 Other . . . . . . . . . . ...... .. ............ 7,786 9,228 - | Cash. ................ . ...... ....... 1,429 795 + 634 Receivabies-Customers (less accumulated provision of $180,000 and S160,000, respectively, for uncollectable accounts) . . . . 11,372 11,221 + 151 Parent Company . . . . ... ........ ........ 8,661 10,373 - 1,712 Other . . . . . . . . . . ...... .. ............ 7,786 9,228 - | ||
| Line 1,697: | Line 950: | ||
24 | 24 | ||
O | O Capitalization and Liabilities increase or 1979 1978 Decrease Thousands of Dollar: | ||
Capitalization and Liabilities increase or 1979 1978 Decrease Thousands of Dollar: | |||
Capitalization: (See Statements of Capitalization) | Capitalization: (See Statements of Capitalization) | ||
Common stockholder's equity . . . . . . . . . . . . . . . . . . . $154,396 $150,128 +$ 4,268 Non-redeemable preferred stock. . . . . . . . . . . . . . . . . . . 41,947 41,947 - | Common stockholder's equity . . . . . . . . . . . . . . . . . . . $154,396 $150,128 +$ 4,268 Non-redeemable preferred stock. . . . . . . . . . . . . . . . . . . 41,947 41,947 - | ||
| Line 1,705: | Line 956: | ||
400 Long-term debt. . . . . .............. ... .... 225,156 205,683 + 19,473 439,099 415,758 + 23,341 Current Liabilities: i Current maturities of long-term debt and preferred stock . . 3,400 - + 3,400 Notes payable to banks (Note 6) . . . . . . ...... .... 15,500 6,500 + 9,000 Accounts payable-Pa ren t Co m pa ny . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,503 1,971 + 532 Other . . . . .... . .. ............... .... 23,675 23,362 + 313 Accrued taxes. . ... ........ ............. 6,306 3,329 + 2,977 Accrued interest . . . . . . . . . . . ... ... .... . .. 3,483 3,219 + 264 Dividends declared on preferred stock . . . ......... . 934 934 - | 400 Long-term debt. . . . . .............. ... .... 225,156 205,683 + 19,473 439,099 415,758 + 23,341 Current Liabilities: i Current maturities of long-term debt and preferred stock . . 3,400 - + 3,400 Notes payable to banks (Note 6) . . . . . . ...... .... 15,500 6,500 + 9,000 Accounts payable-Pa ren t Co m pa ny . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,503 1,971 + 532 Other . . . . .... . .. ............... .... 23,675 23,362 + 313 Accrued taxes. . ... ........ ............. 6,306 3,329 + 2,977 Accrued interest . . . . . . . . . . . ... ... .... . .. 3,483 3,219 + 264 Dividends declared on preferred stock . . . ......... . 934 934 - | ||
Miscellaneous . . . . . . . . . . . . . . . . ... ........ . 2,321 1,872 + 449 58,122 41,187 + 16,935 Deferred Credits: | Miscellaneous . . . . . . . . . . . . . . . . ... ........ . 2,321 1,872 + 449 58,122 41,187 + 16,935 Deferred Credits: | ||
Accumulated deferred income taxes (Note 1) . . . . ... 10,139 9,853 + 286 Accumulated deferred investment tax credits (Note 1) . . . . 5,242 2,608 + 2.634 Other ...... ... . . . . . . . . . , . .. ... . . 4,683 4,441 + 242 20.064 16,902 + 3,162 i | Accumulated deferred income taxes (Note 1) . . . . ... 10,139 9,853 + 286 Accumulated deferred investment tax credits (Note 1) . . . . 5,242 2,608 + 2.634 Other ...... ... . . . . . . . . . , . .. ... . . 4,683 4,441 + 242 20.064 16,902 + 3,162 i Commitments, Guarantees and Contmgencies I (Notes 2,4 and 7) I 1 | ||
Commitments, Guarantees and Contmgencies I (Notes 2,4 and 7) I 1 | |||
$517.285 $473.847 +S 43.438 l l | $517.285 $473.847 +S 43.438 l l | ||
l l | l l | ||
l l | l l | ||
l l | l l | ||
l | l The accompanying Notes to Financial Statements are an integral part of these balance sheets. | ||
The accompanying Notes to Financial Statements are an integral part of these balance sheets. | |||
25 | 25 | ||
P nnsylvanis PowIr C:mpany Statements of Capitalization atDecember31,1979and1978 1979 1978 Thousands of Dollars Common stockholder's equity: | P nnsylvanis PowIr C:mpany Statements of Capitalization atDecember31,1979and1978 1979 1978 Thousands of Dollars Common stockholder's equity: | ||
Common stock, S30 par value, authorized-4,800,000 shares-outstanding 3,910,000 shares ...... ... ........ ..... $117,300 $117,300 Retained earnings (Note Sa). . . . . .... . ...... ....... 37,096 32,828 Total common stockholder's equity . . . . . ..... 154,396 35.2% 150,128 36.1% | Common stock, S30 par value, authorized-4,800,000 shares-outstanding 3,910,000 shares ...... ... ........ ..... $117,300 $117,300 Retained earnings (Note Sa). . . . . .... . ...... ....... 37,096 32,828 Total common stockholder's equity . . . . . ..... 154,396 35.2% 150,128 36.1% | ||
| Line 1,725: | Line 970: | ||
Cumulative, $100 par value Authorized-740,000 shares, issuable in series Non-redeemable: | Cumulative, $100 par value Authorized-740,000 shares, issuable in series Non-redeemable: | ||
4.24 % .4.64 % 141,049141,049 $102.980-105.000 $14,614 14,105 14.105 7.64 % . 8.00 % 118,000 118,000 106.380-107.270 12,605 11,800 11,800 8.48% .9.16% 160,000 160,000 107.320 109.160 17,319 16,000 16,000 Premium - - - | 4.24 % .4.64 % 141,049141,049 $102.980-105.000 $14,614 14,105 14.105 7.64 % . 8.00 % 118,000 118,000 106.380-107.270 12,605 11,800 11,800 8.48% .9.16% 160,000 160,000 107.320 109.160 17,319 16,000 16,000 Premium - - - | ||
42 42 Total non-redeemable | 42 42 Total non-redeemable preferred stock 4M4M $44,538 41,947 9.5 41,947 10.1 Redeemable (Note Sc): | ||
preferred stock 4M4M $44,538 41,947 9.5 41,947 10.1 Redeemable (Note Sc): | |||
8.24% 100,000 100,000 $108.240 $10,824 10,000 10,000 11.00% 80,000 80,000 112.110 8,969 8,000 8,000 1S0g001 M $19J93, 18,000 18,000 Redeemable within one year . . . . . . . . . ....... ....... .. (400) - | 8.24% 100,000 100,000 $108.240 $10,824 10,000 10,000 11.00% 80,000 80,000 112.110 8,969 8,000 8,000 1S0g001 M $19J93, 18,000 18,000 Redeemable within one year . . . . . . . . . ....... ....... .. (400) - | ||
l Total redeemable preferred stock . . .......... ... ... ............ 17,600 4.0 18,000 4.3 l Long term debt (Note 5d): | l Total redeemable preferred stock . . .......... ... ... ............ 17,600 4.0 18,000 4.3 l Long term debt (Note 5d): | ||
| Line 1,742: | Line 985: | ||
l i | l i | ||
Pennsylvania P wcr Compa,ny Statements of Sources of Funds d | Pennsylvania P wcr Compa,ny Statements of Sources of Funds d | ||
for Gross Property Additions: 54%7,T.Wionais78 1979 1978 Thousands of Dollars Sourcesof Funds: | for Gross Property Additions: 54%7,T.Wionais78 1979 1978 Thousands of Dollars Sourcesof Funds: | ||
| Line 1,751: | Line 993: | ||
4,500 First mortgage bonds . . .. .. .. . . .. .. .. .. .. . . 20,000 25,000 Secured notes and obligation . . . . . .... .. . . .... . ..... 6,000 314 ; | 4,500 First mortgage bonds . . .. .. .. . . .. .. .. .. .. . . 20,000 25,000 Secured notes and obligation . . . . . .... .. . . .... . ..... 6,000 314 ; | ||
increase in notes payable to banks . . .. . .. ... ... . ... .. 9,000 6,500 1 35,000 36,314 Payment at maturity of long term debt . l | increase in notes payable to banks . . .. . .. ... ... . ... .. 9,000 6,500 1 35,000 36,314 Payment at maturity of long term debt . l | ||
.. . .. . .. . . ... (3,500) (1,000) l | .. . .. . .. . . ... (3,500) (1,000) l Construction funds held in escrow includi,ng accrued interest. . . .. 2,124 5,540 l | ||
Net change in current assets and current liabilities excluding notes payable to banks and current maturities of long-term debt and preferred stock-Receivables . . . . . . . . .. ...... ... ... ...... ... 3,003 (13,216) | |||
Construction funds held in escrow includi,ng accrued interest. . . .. 2,124 5,540 l | |||
Net change in current assets and current liabilities excluding notes | |||
payable to banks and current maturities of long-term debt and preferred stock-Receivables . . . . . . . . .. ...... ... ... ...... ... 3,003 (13,216) | |||
Materials and supplies. . . . .. . .. .... . . .. (2.430) (616) | Materials and supplies. . . . .. . .. .... . . .. (2.430) (616) | ||
Accounts payable . . . . . . . . ... . . .... .... .. . 845 12,731 Accrued taxes. . ... . ... . . . .. .... .. ... 2,977 (360) | Accounts payable . . . . . . . . ... . . .... .... .. . 845 12,731 Accrued taxes. . ... . ... . . . .. .... .. ... 2,977 (360) | ||
| Line 1,763: | Line 1,001: | ||
Other, net (i) . l | Other, net (i) . l | ||
. . . .. . .. ... . . . .. 2,161 2,128 ! | . . . .. . .. ... . . . .. 2,161 2,128 ! | ||
Gross Property Additions (i) . . . . . .. . . ... . S 57.676 S 54.958 | Gross Property Additions (i) . . . . . .. . . ... . S 57.676 S 54.958 | ||
( ) Denotes negative amount (i) includes allowance for equity funds used during construction (Note 1). | ( ) Denotes negative amount (i) includes allowance for equity funds used during construction (Note 1). | ||
| Line 1,769: | Line 1,006: | ||
l 27 i | l 27 i | ||
Pennsylv:nia PowIr Comp:ny Notes to Financial Statements: | Pennsylv:nia PowIr Comp:ny Notes to Financial Statements: | ||
(1) Summary of Accounting Policies: Management expects that the Commission will allow the The Company follows the accounting policies and Company full recovery of any deferred costs including practices prescribed by the Pennsylvania Public Utility those relating to changes in the lag period or any other Commission (the Commission) and the Federal Energy changes,in accordance with the objectives of the energy Regulatory Commission (FERC).The more significant clause provisions included in its approved tariffs. | (1) Summary of Accounting Policies: Management expects that the Commission will allow the The Company follows the accounting policies and Company full recovery of any deferred costs including practices prescribed by the Pennsylvania Public Utility those relating to changes in the lag period or any other Commission (the Commission) and the Federal Energy changes,in accordance with the objectives of the energy Regulatory Commission (FERC).The more significant clause provisions included in its approved tariffs. | ||
| Line 1,784: | Line 1,019: | ||
l 1 | l 1 | ||
Notes to Financial Statements-Continued CAPCO Units in Service (b) CAPCO Units under Construction Bruce Bruce Perry W. H. Mansfield Beaver Mansfield 1and Sommis 7 1 and 2 Valley 1 3 2 Total Thousands of Dollars Utility plant in service . . . . . $ 25.113 $ 45.181(a) $101.749 $ - | Notes to Financial Statements-Continued CAPCO Units in Service (b) CAPCO Units under Construction Bruce Bruce Perry W. H. Mansfield Beaver Mansfield 1and Sommis 7 1 and 2 Valley 1 3 2 Total Thousands of Dollars Utility plant in service . . . . . $ 25.113 $ 45.181(a) $101.749 $ - | ||
$172.043 Accumulated provision for depreciation . . . . . . . . $ 5.343 $ 3.535 $ 10.185 $ - | $172.043 Accumulated provision for depreciation . . . . . . . . $ 5.343 $ 3.535 $ 10.185 $ - | ||
$ 19.063 Construction work in progress. . . . . . . . . . . . . . $ | $ 19.063 Construction work in progress. . . . . . . . . . . . . . $ | ||
Nuclear fuelin 34'7 W $ 8.537 $_27 451 $ 71.191 .$.1.QL982 process (c) . . . . . . . . . . . . $ 1.739 Company's ownership in, terest in unit capacity. . . . . _,29.B_% J 17.5% 6.28% 6.28% | Nuclear fuelin 34'7 W $ 8.537 $_27 451 $ 71.191 .$.1.QL982 process (c) . . . . . . . . . . . . $ 1.739 Company's ownership in, terest in unit capacity. . . . . _,29.B_% J 17.5% 6.28% 6.28% | ||
| Line 1,794: | Line 1,026: | ||
(b) The Company's portion of operating expenses associated with the common ownership of generating facilities is included in the corresponding operating expenses in the accompanying Statements of Income. | (b) The Company's portion of operating expenses associated with the common ownership of generating facilities is included in the corresponding operating expenses in the accompanying Statements of Income. | ||
(c) Unsegregated amount among the CAPC0 nuclear units. | (c) Unsegregated amount among the CAPC0 nuclear units. | ||
Nuclear Fuel-The cost of nuclear fuel in service is charged to fuel 1979 1978 expense based on the rate of consumption assuming a zero Thousands of Dollars net salvage value. The manner of disposition of spent Currently payable-nuclear fuel may not be determined for many years, $ 1,330 $ | Nuclear Fuel-The cost of nuclear fuel in service is charged to fuel 1979 1978 expense based on the rate of consumption assuming a zero Thousands of Dollars net salvage value. The manner of disposition of spent Currently payable-nuclear fuel may not be determined for many years, $ 1,330 $ | ||
Federal . . . . . . . . . . . . . . . . . . - | Federal . . . . . . . . . . . . . . . . . . - | ||
| Line 1,801: | Line 1,031: | ||
, Total provision for allowance utilizing a net of tax rate consistent with its rate income taxes * * * * * * * | , Total provision for allowance utilizing a net of tax rate consistent with its rate income taxes * * * * * * * | ||
* f 7'415 $ 1'954 treatment. The rate used during 1979 and 1978 wr.s 8E income Taxes- ( ) Denotes negative amount The provision for income taxes shown in the accompa- (i) 1978 reflects the reversal of previously nying Statements of income carisists of the following recorded investment tax credits, now being carried components: forward due to the carry-back of net operating losses. | * f 7'415 $ 1'954 treatment. The rate used during 1979 and 1978 wr.s 8E income Taxes- ( ) Denotes negative amount The provision for income taxes shown in the accompa- (i) 1978 reflects the reversal of previously nying Statements of income carisists of the following recorded investment tax credits, now being carried components: forward due to the carry-back of net operating losses. | ||
29 , | 29 , | ||
' Notes to Financial Statements-Continued Such provision is included in the accompanying investment tax credits were available to offset future | ' Notes to Financial Statements-Continued Such provision is included in the accompanying investment tax credits were available to offset future | ||
_ Statements of income as follows: Federalincome taxes payable, of which $4,000,000 expires | _ Statements of income as follows: Federalincome taxes payable, of which $4,000,000 expires at the end of 1983, $4,000,000 expires at the end of 1984, | ||
at the end of 1983, $4,000,000 expires at the end of 1984, | |||
. 1979 1979 $3,000,000 expires at the end of 1985 and $1.000,000 expires at the end of 1986. | . 1979 1979 $3,000,000 expires at the end of 1985 and $1.000,000 expires at the end of 1986. | ||
Thousands of Dollars The total provision for income taxes shown in the Operating Expenses . . . . . . . . . . . S 7,376 $ 1,753 accompanying Statements of income is less than the O ther income . . . . . . . . . . . . . . . 39 201 amount which would be computed by applying the Total provision statutory Federal income tax rate to income before | Thousands of Dollars The total provision for income taxes shown in the Operating Expenses . . . . . . . . . . . S 7,376 $ 1,753 accompanying Statements of income is less than the O ther income . . . . . . . . . . . . . . . 39 201 amount which would be computed by applying the Total provision statutory Federal income tax rate to income before | ||
| Line 1,819: | Line 1,042: | ||
~ | ~ | ||
Thousands of Dollars expense at statutory rate. . . . . . . 313,166 S 8,132 Debt component of allowance for increases (reductions)in taxes funds used during construction resofting from: (i) which is credited to plant . . . . . . $ 2,215 S 1,392 Allowance for equity Excess of tax depreciation allowed funds used during pursuant to the Class Life ADR construction which does depreciation system, net . . . . . . . 1,309 1,599 not constitute taxable Accelerated amortization of the income . . . . . . . . . . . . . . . . (2,879) (2,204) cost of certain facilities covered Excess of tax over book by Necessity Certificates. . . . . . . (182) (182) depreciation . . . . . . . . . . . . . (3,296) (3,837) | Thousands of Dollars expense at statutory rate. . . . . . . 313,166 S 8,132 Debt component of allowance for increases (reductions)in taxes funds used during construction resofting from: (i) which is credited to plant . . . . . . $ 2,215 S 1,392 Allowance for equity Excess of tax depreciation allowed funds used during pursuant to the Class Life ADR construction which does depreciation system, net . . . . . . . 1,309 1,599 not constitute taxable Accelerated amortization of the income . . . . . . . . . . . . . . . . (2,879) (2,204) cost of certain facilities covered Excess of tax over book by Necessity Certificates. . . . . . . (182) (182) depreciation . . . . . . . . . . . . . (3,296) (3,837) | ||
Property taxes applicable to sub. State income taxes, not of sequent periods, net. . . . . . . . . . 40 (8) Federalincome tax benefit . . . 841 277 Capitalized overhead costs. . . . . 254 - (105) 3,382 2,801 Amortization of deferred invest. | Property taxes applicable to sub. State income taxes, not of sequent periods, net. . . . . . . . . . 40 (8) Federalincome tax benefit . . . 841 277 Capitalized overhead costs. . . . . 254 - (105) 3,382 2,801 Amortization of deferred invest. | ||
Deferred energy costs, not. . . . . . . (881) 552 ment tax credits . . . . . . . . . . 66 | Deferred energy costs, not. . . . . . . (881) 552 ment tax credits . . . . . . . . . . 66 | ||
, (376) | , (376) | ||
Total deferred tax expense, Other,not............... (295) (375) no t . . . . . . . . . . . . . . . { 2]g.l.1.13.51 Total provision for income taxes . . . . . . . . f I43.5 l_laE4 | Total deferred tax expense, Other,not............... (295) (375) no t . . . . . . . . . . . . . . . { 2]g.l.1.13.51 Total provision for income taxes . . . . . . . . f I43.5 l_laE4 | ||
, ( ) Denotes negative amount | , ( ) Denotes negative amount | ||
; ( ) Denotes negative amount For income tax purposes, the Company has claimed (i) Under the established rate-making practices of the | ; ( ) Denotes negative amount For income tax purposes, the Company has claimed (i) Under the established rate-making practices of the liberalized depreciation (double-declining balance, guideline regulatory commissions to which the Company is lives and the Class Life ADR System provision methods) subject,it is expected that the deferred taxes not and, consistent with the accounting and rate making provided for currently will be collected in customers' policies of the applicable regulatory authorities, the rates when such taxes become payable. | ||
Company has followed " flow-through" accounting except asindicated above. .It is not expected that the cash outlay for income taxes with respect to any of the succeeding three years will The Company followsdeferral accounting with respect materially exceed income tax expense for such years. | |||
liberalized depreciation (double-declining balance, guideline regulatory commissions to which the Company is lives and the Class Life ADR System provision methods) subject,it is expected that the deferred taxes not and, consistent with the accounting and rate making provided for currently will be collected in customers' policies of the applicable regulatory authorities, the rates when such taxes become payable. | |||
Company has followed " flow-through" accounting except asindicated above. .It is not expected that the cash outlay for income taxes | |||
with respect to any of the succeeding three years will The Company followsdeferral accounting with respect materially exceed income tax expense for such years. | |||
to inveptment tax credits and amortires such credits to | to inveptment tax credits and amortires such credits to | ||
' income over the estimated life of the related property. At l | ' income over the estimated life of the related property. At l | ||
| Line 1,839: | Line 1,055: | ||
l | l | ||
~. , __ _ .. _ , _ , - - . . _ | ~. , __ _ .. _ , _ , - - . . _ | ||
Notes to Financial Statements-Continued Pensions- intends to seek approval from the Commission and the FERC The Company has a trusteed noncontributory pension to amortize these amounts plus contractors' cancellation plan covering substantially all full-time employees. Upon charges, if any, over several years and to recover the costs retirement, employees are provided a monthly pension from customers to the extent that they are not otherwise based on length of service and compensation. Pension costs recoverable. The Company believes that such costs for 1979 and 1978 were $2,321,000 and $1,949,000, were prudently incurred and has no reason to believe that respectively, of which $1,146,000 and $899,000, the regulatory authorities involved will not react favorably respectively,were charged to operating expenses and the to its requests and therefore believes that any loss of invest-balanceswere charged primarily to construction. Such costs ment and cancellation charges,if any,will be recoverable include the amortization of pastservice costs on an actuarial from its customers. Until orders are received from the basis over 30 years. The Company funds pension costs Commission and the FERC, none of the charges will be accrued. The estimated unfunded past servics liability of reflected in earnings. | Notes to Financial Statements-Continued Pensions- intends to seek approval from the Commission and the FERC The Company has a trusteed noncontributory pension to amortize these amounts plus contractors' cancellation plan covering substantially all full-time employees. Upon charges, if any, over several years and to recover the costs retirement, employees are provided a monthly pension from customers to the extent that they are not otherwise based on length of service and compensation. Pension costs recoverable. The Company believes that such costs for 1979 and 1978 were $2,321,000 and $1,949,000, were prudently incurred and has no reason to believe that respectively, of which $1,146,000 and $899,000, the regulatory authorities involved will not react favorably respectively,were charged to operating expenses and the to its requests and therefore believes that any loss of invest-balanceswere charged primarily to construction. Such costs ment and cancellation charges,if any,will be recoverable include the amortization of pastservice costs on an actuarial from its customers. Until orders are received from the basis over 30 years. The Company funds pension costs Commission and the FERC, none of the charges will be accrued. The estimated unfunded past servics liability of reflected in earnings. | ||
the plan at June 30,1979 (the date of the latest actuarial report) was $7,715,000. The market value of the pension (4) Lesses: | the plan at June 30,1979 (the date of the latest actuarial report) was $7,715,000. The market value of the pension (4) Lesses: | ||
fund at December 31,1979 exceeded the actuarially The Company rents or leases nuclear fuel, certain trans-computed salue of the vested benefits at June 30,1979.~ mission and distribution facilities, office space and other incidental equipment and property under cancelable and Purchased and Interchanged Power, Net- noncancelable leases. The total rent expense included in the Purchased and interchanged power, net in the accom- accompanying Statements of Income for 1979 and 1978 panying Statements of income includes the interchange of was $2,304,000 and $3,109,000, respectively. The future power with Ohio Edison Company, the Company's parent, minimum rental commitments as of December 31,1979 for which resulted in a net expense to the Company of all noncancelable leases are as follows: | fund at December 31,1979 exceeded the actuarially The Company rents or leases nuclear fuel, certain trans-computed salue of the vested benefits at June 30,1979.~ mission and distribution facilities, office space and other incidental equipment and property under cancelable and Purchased and Interchanged Power, Net- noncancelable leases. The total rent expense included in the Purchased and interchanged power, net in the accom- accompanying Statements of Income for 1979 and 1978 panying Statements of income includes the interchange of was $2,304,000 and $3,109,000, respectively. The future power with Ohio Edison Company, the Company's parent, minimum rental commitments as of December 31,1979 for which resulted in a net expense to the Company of all noncancelable leases are as follows: | ||
S7,600,000 in 1979 and $4,500,000 in 1978. Such amounts are determined in accordance with operating 1980.......................... $ 2,290,000 agreements entered into by the Company with the CAPC0 1981.......................... 3,968,000 companies.These agreements prescribe the method of 1982.......................... 4,125,000 accounting to be followed in the billing of power, and have 1983.......................... 3,627,000 been filed with the FERC. 1984.......................... 2,402,000 - | S7,600,000 in 1979 and $4,500,000 in 1978. Such amounts are determined in accordance with operating 1980.......................... $ 2,290,000 agreements entered into by the Company with the CAPC0 1981.......................... 3,968,000 companies.These agreements prescribe the method of 1982.......................... 4,125,000 accounting to be followed in the billing of power, and have 1983.......................... 3,627,000 been filed with the FERC. 1984.......................... 2,402,000 - | ||
19 8 5 - 2023 . . . . . . . . . . . . . . . . . . . . . 43,687,000 (2) Ohio Valley Electric Corporation (OVEC): | |||
The Company and Ohio Edison Company are partici- If all noncapitalized financingleases had been capitalized, pating with 13 other investor-owned electric utility the effect on total assets, total liabilities and expenses companies and with OVEC in arrangements with the would not be material. | The Company and Ohio Edison Company are partici- If all noncapitalized financingleases had been capitalized, pating with 13 other investor-owned electric utility the effect on total assets, total liabilities and expenses companies and with OVEC in arrangements with the would not be material. | ||
Department of Energy (DOE) to supply the power requirements of the DOE plant near Portsmouth, Ohio. The (5) Capitalization: | Department of Energy (DOE) to supply the power requirements of the DOE plant near Portsmouth, Ohio. The (5) Capitalization: | ||
| Line 1,855: | Line 1,068: | ||
In January 1980, the Company and all other CAPCO companies terminated plans to construct the fe!! awing four nuclear generating units-Davis Besse No. 2 and No. 3, and Erie No. I and No. 2. The Company's share of con-struction costs incurred as of December 31,1979 applicable to these units amounted to $14,761,000. The Company 31 | In January 1980, the Company and all other CAPCO companies terminated plans to construct the fe!! awing four nuclear generating units-Davis Besse No. 2 and No. 3, and Erie No. I and No. 2. The Company's share of con-struction costs incurred as of December 31,1979 applicable to these units amounted to $14,761,000. The Company 31 | ||
1 Notes to Financial Statements-Continued l | |||
1 | |||
Notes to Financial Statements-Continued l | |||
The preferred stock is redeemable in whole or in As of December 31,1979, the sinking and improve. | The preferred stock is redeemable in whole or in As of December 31,1979, the sinking and improve. | ||
part,unless otherwise noted,at the option of the ment fund requirements and maturities of long term Company, at any time upon not less than 30 nor more debtfor each of the five years ending December 31,1980 than 60 days notice. through 1984 will amount to: | part,unless otherwise noted,at the option of the ment fund requirements and maturities of long term Company, at any time upon not less than 30 nor more debtfor each of the five years ending December 31,1980 than 60 days notice. through 1984 will amount to: | ||
Redemption of preferred stock (excluding the 198 0. . . . . . . . . . . . . . . . . . . . . . . . . SS,019,000 4.24% - 4.64% Series) is subject to certain restrictions 1981.......................... 7,019,000 regarding refunding operations for five years from date 1982.......................... 7.824,000 of issue. The current redemption prices shown will 1983.......................... 2,019,000 decline to eventual minimums per share in accordance 1984........................ . 2,069,000 with the Charter provisions establishing each series. | Redemption of preferred stock (excluding the 198 0. . . . . . . . . . . . . . . . . . . . . . . . . SS,019,000 4.24% - 4.64% Series) is subject to certain restrictions 1981.......................... 7,019,000 regarding refunding operations for five years from date 1982.......................... 7.824,000 of issue. The current redemption prices shown will 1983.......................... 2,019,000 decline to eventual minimums per share in accordance 1984........................ . 2,069,000 with the Charter provisions establishing each series. | ||
(6) Notes Payable to Banks and Lines of Credit: | (6) Notes Payable to Banks and Lines of Credit: | ||
| Line 1,874: | Line 1,081: | ||
ability of $4,500,000 of the above-mentioned lines of years ending December 31,1980 through 1964 will credit. Such compensating balances, net of " float", are amount to: | ability of $4,500,000 of the above-mentioned lines of years ending December 31,1980 through 1964 will credit. Such compensating balances, net of " float", are amount to: | ||
expected to be maintained at an average of $320,000. | expected to be maintained at an average of $320,000. | ||
These balances are not subject to any contractual restriction 1980................ ......... S400,000 | These balances are not subject to any contractual restriction 1980................ ......... S400,000 against withdrawal. In addition, the Company is required to 1981.......................... 400,000 pay a commitment fee to assure the availability of an 1982.......................... 900,000 additional S4,500,000 of the above mentioned lines of 1983.......................... 900,000 credit. | ||
against withdrawal. In addition, the Company is required to 1981.......................... 400,000 pay a commitment fee to assure the availability of an 1982.......................... 900,000 additional S4,500,000 of the above mentioned lines of 1983.......................... 900,000 credit. | |||
1984.......... ............... 900,000 Additionalinformation with respect to these notes (d) Longterm Debt- 1 | 1984.......... ............... 900,000 Additionalinformation with respect to these notes (d) Longterm Debt- 1 | ||
~ payable is as follows: | ~ payable is as follows: | ||
| Line 1,882: | Line 1,087: | ||
jg7g gg7g interest rate on outstanding ; | jg7g gg7g interest rate on outstanding ; | ||
Based on the amount of bonds authenticated by the an ne ow ngs at trustee through December 31,1979, the annual sinking and improvement fund requirements amount to Mn er ...... .. 15.14% M S2,019,000. It is presently contemplated that these Maximum amount drawn ; | Based on the amount of bonds authenticated by the an ne ow ngs at trustee through December 31,1979, the annual sinking and improvement fund requirements amount to Mn er ...... .. 15.14% M S2,019,000. It is presently contemplated that these Maximum amount drawn ; | ||
requirements will be satisfied in 1980 by pcrmanently down during the year. . . . $19.500.000 S12.000.000 waiving the Company's right to issue bonds against Average borrowings during S2,019,000 of the $2,798,000 of retired bonds that are the year. . . . . . . . . . . . . S 8.083.000 S 2.913.000 presently available for that purpose. In the alternative, the Company could deposit funds in the amount called Weighted average interest for which could then be withdrawn upon surrender for rate during the year (based cancellation of a like principal amount of bonds on the daily amounts specifically authenticated for such purposes against outstanding-excluding unfunded property additions.The withdrawal of sinking . commitment fee). . . . . . . M85 8 1M | requirements will be satisfied in 1980 by pcrmanently down during the year. . . . $19.500.000 S12.000.000 waiving the Company's right to issue bonds against Average borrowings during S2,019,000 of the $2,798,000 of retired bonds that are the year. . . . . . . . . . . . . S 8.083.000 S 2.913.000 presently available for that purpose. In the alternative, the Company could deposit funds in the amount called Weighted average interest for which could then be withdrawn upon surrender for rate during the year (based cancellation of a like principal amount of bonds on the daily amounts specifically authenticated for such purposes against outstanding-excluding unfunded property additions.The withdrawal of sinking . commitment fee). . . . . . . M85 8 1M and improvement fund deposits in this manner results in a minor increase in the amount of the annual sinking and improvement fund requirements for the Company. | ||
and improvement fund deposits in this manner results in a minor increase in the amount of the annual sinking and improvement fund requirements for the Company. | |||
32 | 32 | ||
Notes to Financial Statements-Continued l | Notes to Financial Statements-Continued l | ||
' (7) Commitments, Guarentees and Contingencies: expenditures of approximately SS1,000,000 may be The currently estimated cost of property additions and required by the Company,of which approximately , | ' (7) Commitments, Guarentees and Contingencies: expenditures of approximately SS1,000,000 may be The currently estimated cost of property additions and required by the Company,of which approximately , | ||
| Line 1,899: | Line 1,098: | ||
companies, has made long-term coal supply arrangements with Quarto Mining Company (Quarto).The CAPCO in some proceedings, criminal fines or civil penalties companias have severally, and not jointly, agreed to ultimately could be imposed under the Clean Air Act l guarantee their proportionate shares of Quarto's debt Amendments of 1977 and the Federal Water Pollution l and lease obligations incurred in connection with Control Act as amended by the Clean Water Act of 1977 or developing and equipping the mines whether or not the the Company could be forced to shut down significant coal can be utilized because of environmental considerations. amounts of coal fired capacity.The Federal government has | companies, has made long-term coal supply arrangements with Quarto Mining Company (Quarto).The CAPCO in some proceedings, criminal fines or civil penalties companias have severally, and not jointly, agreed to ultimately could be imposed under the Clean Air Act l guarantee their proportionate shares of Quarto's debt Amendments of 1977 and the Federal Water Pollution l and lease obligations incurred in connection with Control Act as amended by the Clean Water Act of 1977 or developing and equipping the mines whether or not the the Company could be forced to shut down significant coal can be utilized because of environmental considerations. amounts of coal fired capacity.The Federal government has | ||
) | ) | ||
As of December 31,1979, the Company's share of the begun legal proceedings against the Company under the ' | As of December 31,1979, the Company's share of the begun legal proceedings against the Company under the ' | ||
guarantee was $30,702,000 ($11,619,000-long term Clean Air Act asking the courts to assess civil penalties for indebtedness, $11,681,000-lease obligations and alleged continuing violations of particulate emission regula- ! | guarantee was $30,702,000 ($11,619,000-long term Clean Air Act asking the courts to assess civil penalties for indebtedness, $11,681,000-lease obligations and alleged continuing violations of particulate emission regula- ! | ||
S7,402,000-short term bank credit), which is ultimately tions at the W. H.Sammis Plant and sulfur dioxide emission i expected to increase to S35,640,000 based on presently regulations at the Company's New Castle Power Plant. The l budgeted mine construction costs of $431,000,000. Clean Air Act amendmentswhich became effectivein August, I Because of significant difficulties experienced during the 1977, permit the imposition of civil penalties of up to i development period, the CAPC0 companies are reviewing $25,000 per day of violation. The penalties,if any, that the various alternatives available to reduce unit production may be imposed by the courts for alleged past violations are costs, which are presently in excess of the current spot not now determinable, but such penalties could be substan-market price of coal. Management believes that the costs tial. Ohio Edison, the operator of the Sammis Plant, and ; | S7,402,000-short term bank credit), which is ultimately tions at the W. H.Sammis Plant and sulfur dioxide emission i expected to increase to S35,640,000 based on presently regulations at the Company's New Castle Power Plant. The l budgeted mine construction costs of $431,000,000. Clean Air Act amendmentswhich became effectivein August, I Because of significant difficulties experienced during the 1977, permit the imposition of civil penalties of up to i development period, the CAPC0 companies are reviewing $25,000 per day of violation. The penalties,if any, that the various alternatives available to reduce unit production may be imposed by the courts for alleged past violations are costs, which are presently in excess of the current spot not now determinable, but such penalties could be substan-market price of coal. Management believes that the costs tial. Ohio Edison, the operator of the Sammis Plant, and ; | ||
incurred in connection with this project will be recovered the Company expect to comply with any final orders of the 1 through the operation of the Company's energy clause or courts and in the meantime to conduct the operation of the l through base rates. plants so as to minimize the applicable emissions to the greatest extent that they deem to be practicable; therefore, The Company is subject to regulation with regard to air the litigation described above should not result in the I and water quality and other environmental matters by imposition of any substantial civil penalties for future l various Federal, state and local authorities. For compliance conduct. | incurred in connection with this project will be recovered the Company expect to comply with any final orders of the 1 through the operation of the Company's energy clause or courts and in the meantime to conduct the operation of the l through base rates. plants so as to minimize the applicable emissions to the greatest extent that they deem to be practicable; therefore, The Company is subject to regulation with regard to air the litigation described above should not result in the I and water quality and other environmental matters by imposition of any substantial civil penalties for future l various Federal, state and local authorities. For compliance conduct. | ||
therewith,it is presently estimated that additional capital | therewith,it is presently estimated that additional capital 33 | ||
33 | |||
Notes to Financial Statements-Continued The Federal Environmental Protection Agency (EPA) electric power. Damages of $7,000,000 (to be trebled) and had tentativeliindicated an intention to seek to enforce injunctions against the unlawful acts are sought. On noncompliance penalties beginning August 7,1979, for January 4,1979, the Court granted summary judgment in failure to comply with applicable emission limits, as required favor of the Company as to certain allegations of the com- ' | Notes to Financial Statements-Continued The Federal Environmental Protection Agency (EPA) electric power. Damages of $7,000,000 (to be trebled) and had tentativeliindicated an intention to seek to enforce injunctions against the unlawful acts are sought. On noncompliance penalties beginning August 7,1979, for January 4,1979, the Court granted summary judgment in failure to comply with applicable emission limits, as required favor of the Company as to certain allegations of the com- ' | ||
under the Clean Air Act; however, final regulations have plaint. Management is unable to predict the ultimate out-not been issued. Even if the application to change the State come of this action. | under the Clean Air Act; however, final regulations have plaint. Management is unable to predict the ultimate out-not been issued. Even if the application to change the State come of this action. | ||
| Line 1,917: | Line 1,111: | ||
. l 34 | . l 34 | ||
Notes to Financial Statements-Continued (8) Summary of Quarterly Financial Data: | |||
Notes to Financial Statements-Continued | |||
(8) Summary of Quarterly Financial Data: | |||
The following data summarize certain operating results for the four quarters of 1979 and 1978. | The following data summarize certain operating results for the four quarters of 1979 and 1978. | ||
Three Months Ended March 31, June 30, September 30, December 31, 1979 1979 1979 1979 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . . . $37,335 $35,444 $36,595 $35,966 Operating Expenses and Taxes. . . . . . . . . . . . 29,496 29,080 28,367 28,976 O perating income . . . . . . . . . . . . . . . . . . . . 7,839 6,364 8,228 6,990 Other income and Deductions, net . . . . . . . . . 1,363 1,510 1,646 1,773 Net Interest . . . . . . . . . . . . . . . . . . . . . . . . 3,355 3,592 3,717 3,848 Net income . . . . . . . . . . . . . . . . . . . . . . . . $_Q152. 1.4 282 j_j 1 1]l $_4 0.11 Net income for Common Stock . . . . . . . . . . . $ 4.687 g j_4 222 $_1159. | Three Months Ended March 31, June 30, September 30, December 31, 1979 1979 1979 1979 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . . . $37,335 $35,444 $36,595 $35,966 Operating Expenses and Taxes. . . . . . . . . . . . 29,496 29,080 28,367 28,976 O perating income . . . . . . . . . . . . . . . . . . . . 7,839 6,364 8,228 6,990 Other income and Deductions, net . . . . . . . . . 1,363 1,510 1,646 1,773 Net Interest . . . . . . . . . . . . . . . . . . . . . . . . 3,355 3,592 3,717 3,848 Net income . . . . . . . . . . . . . . . . . . . . . . . . $_Q152. 1.4 282 j_j 1 1]l $_4 0.11 Net income for Common Stock . . . . . . . . . . . $ 4.687 g j_4 222 $_1159. | ||
| Line 1,927: | Line 1,117: | ||
1,163 1,508 , | 1,163 1,508 , | ||
N e t I n te rest . . . . . . . . . . . . . . . . . . . . . . . 3,026 3,300 3,457 3,795 Ne t income . . . . . . . . . . . . . . . . . . . . . . . . }._1892. .f.119J .L2191 L12Q1 Net income for Common Stock . . . . . . . . . . . $ 2.637 123Zg }jdZg $_1925. | N e t I n te rest . . . . . . . . . . . . . . . . . . . . . . . 3,026 3,300 3,457 3,795 Ne t income . . . . . . . . . . . . . . . . . . . . . . . . }._1892. .f.119J .L2191 L12Q1 Net income for Common Stock . . . . . . . . . . . $ 2.637 123Zg }jdZg $_1925. | ||
35 | 35 | ||
Auditors' Report AnTHUR ANDERSEN & CO. | Auditors' Report AnTHUR ANDERSEN & CO. | ||
1045 AVENUE OF THE AMERICAS l | 1045 AVENUE OF THE AMERICAS l | ||
NEW YORK . N. Y. tOO19 To the Board of Directors of Pennsylvania Power Company: | NEW YORK . N. Y. tOO19 To the Board of Directors of Pennsylvania Power Company: | ||
We base examined the balance sheets and statements of capitalization of | We base examined the balance sheets and statements of capitalization of Pennsylvania Power Company (a Pennsylvania corporation and a wholly-owned subsidiary of Ohio Edison Company) as of December 31,1979, and 1978, and the related statements of income and retained earnings and sources of funds for gross property additions for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. | ||
In our opinion, the financial statements referred to above present fairly the financial position of Pennsyhania Power Company as of December 31, 1979, and 1978, and the results ofits operations and sources of funds for gross property additions for the years then ended,in conformity with generally accepted accounting principles applied on a consistent basis. | |||
Pennsylvania Power Company (a Pennsylvania corporation and a wholly-owned subsidiary of Ohio Edison Company) as of December 31,1979, and 1978, and the related statements of income and retained earnings and sources of funds for gross property additions for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. | |||
In our opinion, the financial statements referred to above | |||
present fairly the financial position of Pennsyhania Power Company as of December 31, 1979, and 1978, and the results ofits operations and sources of funds for gross property additions for the years then ended,in conformity with generally accepted accounting principles applied on a consistent basis. | |||
February 8,1980 he _ua/ h A*t -'- # Y - | February 8,1980 he _ua/ h A*t -'- # Y - | ||
36 | 36 | ||
PENNSYLVANIA POWER COMPANY Supplements y Financial Data Financel Reporting and Changmg Prices Statement of Financial Accounting Standards No. 33, | PENNSYLVANIA POWER COMPANY Supplements y Financial Data Financel Reporting and Changmg Prices Statement of Financial Accounting Standards No. 33, | ||
'' Financial Reporting and Changing Prices"(SFAS No. 33), | '' Financial Reporting and Changing Prices"(SFAS No. 33), | ||
| Line 1,958: | Line 1,133: | ||
For the Year Ended December 31,1979 (in Thousands) | For the Year Ended December 31,1979 (in Thousands) | ||
O pe rating R even ues . . . . . . . . . . . . . . . . . . . . . . . . . . $145,340 $145,340 $145,340 Operating Expenses and Taxes: ; | O pe rating R even ues . . . . . . . . . . . . . . . . . . . . . . . . . . $145,340 $145,340 $145,340 Operating Expenses and Taxes: ; | ||
Operation and maintenance. . . . . . . . . . . . . . . . . . . . 85,730 85,730 85,730 Provision for depreciation. . . . . . . . . . . . . . . . . . . . . 12,517 22,373 24,123 G e ne ral ta x es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,296 10,296 10,296 Income tax es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,376 7,376 7,376 Total operating expenses and taxes. . . . . . . . . . . . . . 115,919 125,775 127,525 O perating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 19,565 17,815 | Operation and maintenance. . . . . . . . . . . . . . . . . . . . 85,730 85,730 85,730 Provision for depreciation. . . . . . . . . . . . . . . . . . . . . 12,517 22,373 24,123 G e ne ral ta x es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,296 10,296 10,296 Income tax es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,376 7,376 7,376 Total operating expenses and taxes. . . . . . . . . . . . . . 115,919 125,775 127,525 O perating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 19,565 17,815 0ther income and Deductions, net . . . . . . . . . . . . . . . . 6,297 6,297 6,297 N et i n te rest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,512 14,512 14,512 Preferred Stock Dividend Requirements. . . . . . . . . . . . . 4,660 4,660 4,660 income from Continuing Operations (excluding reduction to net recoverable i c o st ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16.546 $ 6.690(a) $ 4.940 ) | ||
I Increase in specific prices (current cost) of property, plant and equipment held during* 1 th e y ea r (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,358 i | I Increase in specific prices (current cost) of property, plant and equipment held during* 1 th e y ea r (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,358 i | ||
Reduction to net recoverable cost. . . . . . . . . . . ... . $ (44,074) (20,374) | Reduction to net recoverable cost. . . . . . . . . . . ... . $ (44,074) (20,374) | ||
| Line 1,971: | Line 1,144: | ||
l l | l l | ||
37 l | 37 l | ||
PENNSYLVANIA POWER COMPANY Five Year Comparison of Selected Supplementary Financial Data Adjusted for the Effects of Changing Prices For the Years Ended December 31,1979 1979 1978 1977 1976 1975 Thousands of Dollars Operating Revenues ! | PENNSYLVANIA POWER COMPANY Five Year Comparison of Selected Supplementary Financial Data Adjusted for the Effects of Changing Prices For the Years Ended December 31,1979 1979 1978 1977 1976 1975 Thousands of Dollars Operating Revenues ! | ||
- As reported in the primary statements. . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $ 89,583 $ 87,212 I Adjusted to average 1979 dollars . . . . . . . . . . . . . . . . . . . $145,340 $132,529 $120,789 $114,225 S117,617 l l | - As reported in the primary statements. . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $ 89,583 $ 87,212 I Adjusted to average 1979 dollars . . . . . . . . . . . . . . . . . . . $145,340 $132,529 $120,789 $114,225 S117,617 l l | ||
| Line 1,986: | Line 1,155: | ||
property, plant and equipment into average 1979 dollars, thus giving an indication of the effect of general inflation income taxes . included in income from continuing opera-on the principal assets of the Company. tions adjusted for general inflation and for changing prices is the same as the provision reported in the primary Current cost of property, plant and equipment other financial statements, in conformity with SFAS No. 33. | property, plant and equipment into average 1979 dollars, thus giving an indication of the effect of general inflation income taxes . included in income from continuing opera-on the principal assets of the Company. tions adjusted for general inflation and for changing prices is the same as the provision reported in the primary Current cost of property, plant and equipment other financial statements, in conformity with SFAS No. 33. | ||
than land was ca!culated by applying the Handy-Whitman . | than land was ca!culated by applying the Handy-Whitman . | ||
Index of Public Utility Construction Costs for the North Dur.ing mflationary periods, the investment necessary to Central Division and the Bureau of Labor and Statistics ''P! ace property, plant and equipment will be more than | Index of Public Utility Construction Costs for the North Dur.ing mflationary periods, the investment necessary to Central Division and the Bureau of Labor and Statistics ''P! ace property, plant and equipment will be more than engineering indices to functional accounts by vintage years, their original cost. Because the Company is permitted to except for large construction projects which were trended recover in revenues, through a depreciation allowance, only based on the year that costs were incurred. The current cost the historical costs of such assets, the addit,ional cost of of land was calculated by applying the CPI U to the actual plant as adjusted for @Jnging prices is indicated as a costs in the respective years of acquisition. The current cost "Fleduction to net recoverable cost." | ||
engineering indices to functional accounts by vintage years, their original cost. Because the Company is permitted to except for large construction projects which were trended recover in revenues, through a depreciation allowance, only based on the year that costs were incurred. The current cost the historical costs of such assets, the addit,ional cost of of land was calculated by applying the CPI U to the actual plant as adjusted for @Jnging prices is indicated as a costs in the respective years of acquisition. The current cost "Fleduction to net recoverable cost." | |||
data approximately reflects the curren: cost of acquiring property, plant and equipment identical to assets currently Net monetary liabilit.ies of the Company consist owned | data approximately reflects the curren: cost of acquiring property, plant and equipment identical to assets currently Net monetary liabilit.ies of the Company consist owned | ||
* primarily of long-term debt and preferred stock. Dur,mg inflationary periods, the Company will be repaying these Depreciation expense adjusted for general inflation and net monetary liabilities with dollars having less purchasing for changing prices was determined using the same rates and power than dollars had when the liability was originally methods used in calculating the provision in the primary incurred. The difference is indicated by the " Advantage financial statements. The accumulated provisions for resulting from the decrease in p:;rchasing power of net depreciation were estimated for each functional class of monetary liabilities." | * primarily of long-term debt and preferred stock. Dur,mg inflationary periods, the Company will be repaying these Depreciation expense adjusted for general inflation and net monetary liabilities with dollars having less purchasing for changing prices was determined using the same rates and power than dollars had when the liability was originally methods used in calculating the provision in the primary incurred. The difference is indicated by the " Advantage financial statements. The accumulated provisions for resulting from the decrease in p:;rchasing power of net depreciation were estimated for each functional class of monetary liabilities." | ||
| Line 1,994: | Line 1,161: | ||
38 | 38 | ||
Pennsylvania Power Company Directors and Officers J. F. DUNLEVY JUSTIN T. ROGERS,JR. | Pennsylvania Power Company Directors and Officers J. F. DUNLEVY JUSTIN T. ROGERS,JR. | ||
Vice President of the Company Chairman of the Board New Castle, Pennsylvania RAY E. SEMMLER J. R. EDGERLY President Secretary and General Counselof the Company, New Castle, Pennsylvania W. K. CONOVER Vice President D. BRUCE MANSFIELD Retired-formerly Chairman of the J.F.DUNLEVY Board and President of the Company Vice President Akron, Ohio W. F. REEllER V. A. OWOC Vice President Executive Vice President of the Company's parent, Ohio Edison M. L. WILSON Company, Akron, Ohio heasurer W. F. REEllER J. R. EDGERLY Vice President of the Company Secretary and General Counsel New Castle, Pennsylvania R. P. ARMSTRONG JUSTIN T. ROGERS,jR. Assistant Secretary and Assistant Chairman of the Board of the Com- heasurer pany, and President ofits parent, Ohio Edison Company, Akron, Ohio W. A.MARGRAF Assistant Secretary and Assistant W. II. SAMMIS heasurer Retired-formerly Chairman of the Board and President of the Com- ANGELINE COMPARONE - | Vice President of the Company Chairman of the Board New Castle, Pennsylvania RAY E. SEMMLER J. R. EDGERLY President Secretary and General Counselof the Company, New Castle, Pennsylvania W. K. CONOVER Vice President D. BRUCE MANSFIELD Retired-formerly Chairman of the J.F.DUNLEVY Board and President of the Company Vice President Akron, Ohio W. F. REEllER V. A. OWOC Vice President Executive Vice President of the Company's parent, Ohio Edison M. L. WILSON Company, Akron, Ohio heasurer W. F. REEllER J. R. EDGERLY Vice President of the Company Secretary and General Counsel New Castle, Pennsylvania R. P. ARMSTRONG JUSTIN T. ROGERS,jR. Assistant Secretary and Assistant Chairman of the Board of the Com- heasurer pany, and President ofits parent, Ohio Edison Company, Akron, Ohio W. A.MARGRAF Assistant Secretary and Assistant W. II. SAMMIS heasurer Retired-formerly Chairman of the Board and President of the Com- ANGELINE COMPARONE - | ||
| Line 2,008: | Line 1,173: | ||
1 | 1 | ||
Pennsylvtnia Power Company U. S. Postage | Pennsylvtnia Power Company U. S. Postage | ||
~ Annual Report Bulk Rate 1 E. Washington Street PAID New Castle, PA 16103 Permit No.158 New Castle, Pa. | ~ Annual Report Bulk Rate 1 E. Washington Street PAID New Castle, PA 16103 Permit No.158 New Castle, Pa. | ||
l i | l i | ||
l l | l l | ||
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l oo w w .j u o o | l oo w w .j u o o | ||
D'3'l . . 7 y , | D'3'l . . 7 y , | ||
1.y , | 1.y , | ||
' CONTENTS d E Y | ' CONTENTS d E Y | ||
*I | *I i s 1979 The year in profile. . ... 2 : | ||
i s 1979 The year in profile. . ... 2 : | |||
. Highlights . . . .... . 3 | . Highlights . . . .... . 3 | ||
' - ;2 3E' . Brief Financial Summary . . . . 4 E | ' - ;2 3E' . Brief Financial Summary . . . . 4 E | ||
..e | ..e | ||
,\,- - I 1 Money: where it came from. . .. 5 | ,\,- - I 1 Money: where it came from. . .. 5 g , | ||
Report on Construction . .... . 6 L ,,' | |||
g , | |||
Report on Construction . .... . 6 | |||
L ,,' | |||
Serving Customers. . .. . 8 | Serving Customers. . .. . 8 | ||
- Problems persist . .. . 11 Communications. . . . . . 14 e - | |||
- Problems persist . .. . 11 | |||
Lessons in leadership and safety. . . 16 5 I c--- | Lessons in leadership and safety. . . 16 5 I c--- | ||
Map . .... . .. . . ... 18 7~1 , . .* m,- | Map . .... . .. . . ... 18 7~1 , . .* m,- | ||
Operating Statistics . . . . . .. . 19 yDidj j-fllW'^ %. | Operating Statistics . . . . . .. . 19 yDidj j-fllW'^ %. | ||
i Financial Statistics. . . 20 y ro@9 gqs$ Q MONEY $ W: >~ , . ManagementDiscussionand Analysis. 2122 | i Financial Statistics. . . 20 y ro@9 gqs$ Q MONEY $ W: >~ , . ManagementDiscussionand Analysis. 2122 f% Kilowett4mur sales, reveness ;';' | ||
f% Kilowett4mur sales, reveness ;';' | |||
Financial Statements . . . . . . 23 25 29 Auditors | Financial Statements . . . . . . 23 25 29 Auditors | ||
* Report. . . ... . . 36 fir @ltyiffpsose. | * Report. . . ... . . 36 fir @ltyiffpsose. | ||
| Line 2,064: | Line 1,203: | ||
Directors and Officea . . . ... | Directors and Officea . . . ... | ||
. 37 38 39 W N M Sp;5g l w | . 37 38 39 W N M Sp;5g l w | ||
, . . , w | , . . , w | ||
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fe - - | fe - - | ||
' ,f . AC | ' ,f . AC | ||
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at.' bf l | at.' bf l i b I | ||
i b I | |||
A A. | A A. | ||
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pn s | pn s | ||
.' ;,;g . . _ . '. _ ,'y, < | .' ;,;g . . _ . '. _ ,'y, < | ||
f" SERVING CUSTOMERS : . # PROBLEMSPEPSISTil COMMUNICATIONS T 3.Four' objectives guided our ? ll.agel/ewironmental; 17 Telling our story is an endless l , . x. , u . - efforts. ' ' ' i.# , -p.11 J task. | |||
f" SERVING CUSTOMERS : . # PROBLEMSPEPSISTil COMMUNICATIONS | |||
T 3.Four' objectives guided our ? ll.agel/ewironmental; 17 Telling our story is an endless l , . x. , u . - efforts. ' ' ' i.# , -p.11 J task. | |||
l , ,- | l , ,- | ||
.x | .x | ||
' p. 8 ' .* ,. | ' p. 8 ' .* ,. | ||
p.14 . | p.14 . | ||
t . | t . | ||
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-.. . _ . . . _ - . . . _ _ _ _ . _ _ _ _ _ _ ___ . _ _ - _ _ . _ _ _ _ - . _ _ __}} | -.. . _ . . . _ - . . . _ _ _ _ . _ _ _ _ _ _ ___ . _ _ - _ _ . _ _ _ _ - . _ _ __}} | ||
Revision as of 11:58, 1 February 2020
| ML19309B883 | |
| Person / Time | |
|---|---|
| Site: | Beaver Valley |
| Issue date: | 03/11/1980 |
| From: | PENNSYLVANIA POWER CO. |
| To: | |
| Shared Package | |
| ML19309B882 | List: |
| References | |
| NUDOCS 8004070298 | |
| Download: ML19309B883 (40) | |
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, 1 In contrast to the previous two ' '
^
19 vears,in which earnings declined, t.his past year showed an increase of 86.2 million in net earnings for fN ' si I
.1 common stock over 1978. =
e TheyeE Two basic reasons for this marked improvement were the positive effects of the rate increase m e f $23.3 mitiion which went into effect September 1,1978, and continuing and successful efforts to constrain expenses at every level of Company operations. Increases in kilowatt-hour sales were also positive factors in the improved picture. Kilowatt-hour sales showed a 2.9 percent rise over 1978 figures. This, plus the full year of revenue from the already Justin T. Rogers, Jr. and Ray E. Semmler noted rate increase, produced a 25.1 percent improvement in electric sales revenues. Total operating and environmentally superior revenues were $145.3 million. method of generating electricity. Unfortunately, the increase in While they did not affect 1979 regulatory and political uncertain-earnings, decisions made by the ties following the accident at Three Central Area Power Coordination Mile Island made it highly advisable (CAPCO) group in January 1980 for us to reduce the level of our will reduce our financing burden heavy financial commitment to this and have a positive effect on our energy source. financial strength over the next several years. These decisions were not rnade without risk, for they will affect ) CAPCO terminated programs the supply of electricity in the ; involving the future construction of future. Reliability of electric service j four nuclear generating units and to customers may be particularly l delayed the scheduled completion affected in the 1990s. A more of two nuclear units which are complete discussion of CAPCO already under construction in construction schedule changes which the Company has an owner- appears later in the report. ship interest. In June 1979 the Company sold We and the other four companies $20 million in first mortgage bonds in CFCO remain convinced that to finance construction programs. nuclear energy is a safe, economical Approximately $6 million principal amount of pollution control notes were issued by the Company in April corresponding to a like princi-pal amount of pollution control bonds sold by industrialdevelop- l l ment authorities, the proceeds I being used to pay part of the cost I COVER. On October 21,1879 Thomas Edison produced the world's first of the pollution control equipment successfulincandescent electric light. This at the New Castle Power Plant and glowing filament from a replica of that the Bruce.Mansfield Plant. light symbolizes the industry's obsertance of the Centennial of Light during 1979. l c
l l l 1 I Financing plans during 1980 applied to the Pennsylvania Public At the present time we are awaiting include a private sale of $22 million Utility Co;nmission for an $18 that agency's response to certain of first mortgage bonds (10.9% million increase in rates. Application proposals suggested as solutions by Series) to a group of insurance for the increase was filed the Company. More detailed companies and a private sale of $10 January 16,1980, to become information concerning this impor-million of 10.5 percent preferred effective for all retail customers on tant matter and other matters in stock to a single insurance com- and after March 17,1980. On litigation appear later in this report. pany. Late in the year we plan to February 15,1980 the Commission ) sell to our parent company, Ohio suspended the increase pending The Company lost a valued Edison,340,000 shares of common further proceedings. member of its board when Wesley S. stock (par value $30, total $10.2 Hodge, director since 1965, died million). Approximately $2 million The Company's first mortgage July 4,1979. We shall miss his will be obtained through the bond ratings have not changed, counsel, his experience as a business issuance of a pollution control note Moody's presently gives us a Baa and industrialleader and his in the summer of 1980. A portion rating on our first mortgage bonds, friendship. of this total of $44.2 million was while Standard & Poor's gives us an used March 1,1980 to retire at A rating. John R. White, chairman of the maturity $3 million of first mortgage board since 1975, elected to take Meeting air and water pollution l bonds (2 3/4% Series). The early retirement effective i remainder will be used for new control requirements has been a December 31,1979. The past five I construction and improvement of most challenging problem for the years have been among the most i existing facilities. Approximately past several years. The problem re- difficult in the history of the utility l
$59.6 million has been budgeted mains with us, even though our industry and we are grateful for his for such work in 1980. total estimated expenditures over effective leadership.
several years amount to $61 million As noted earlier, our present or more for air and water quality While columns of statistics and l financial health is somewhat better and other environmental require- rows of figures are the heart of any than that of the previous two years. ments. One of the most difficult annual report, our major asset is But inflation continues its nagging problems involves sulfur dioxide our strong team of employees process of erosion, rising 25 emissions at our Newfastle Powet ~ whose daily dedication to providing percent since the test year which Pignt..A contlnuing series of meet- good service often requires more was used as we sought the rate ings with representatives of the than ordinary effort. We sincerely increase mentioned above. That test Pennsylvania Department of appreciate their talented contribu-year was for the 12 months ended Environmental Resources (DER) tions and continued support. July 31,1977. Thus we have has sought solutions to this issue. m F. IfIghlights
'"""'"'""~"""
reached 1.9 billion, showing an increase for the fourth
/J y
consecutive year. " #' = = Total operating revenues were
$145.3 million, a 22.01%
increase. CAPCO group termm.ated plans to build four nuclear President generating units in major New Castle, Pennsylvania construction cutback. March 11,1980 On July 16,1979, a new system peak load of 554,000 kilowatts was recorded and on Aserage annual use per resi-August 1 this mark was dential customer was 7,626 equalled. kilowatt-hours, a drop of 53 kilowatt-hours, first year since the early 1930s to show a decrease in average annual use. 3
;,
+
Brief Financial Summary 1979 1918 HEVENUES RECEIVED: Thousands of Dollars ,,.- Operating revenues-From sale of electricity and [c; miscellaneous revenues . $145,340 $119,118 "I Other income - net. 6,297 4,810 g Total. 151,637 123,928 REVENUES PROVIDED FOR: *P Wages to employees, including costs of pensions, group life insurance, h hospitalization and other benefits. 14,978 14,154 Cost of fuel (1) . . 45,587 38,608 Materials and supplies and other , i expenses . 17,649 17,911 l Electricity purchased, plus net I ! interchange with other electric , l utility companies. . 7,516 3,134 - Taxes - federal, state and local . 17,672 9,669 ,' Provision for depreciation . 12,517 11,887 Amortization of debt discount, premium and expense . net . 114 112 Interest expense - net . 14,398 13,466 Capital stock issuance expense . - 12 Preferred stock dividend requirements 4,660 4,660 l Preferred stock dividends declared
- l in excess of requirements .
174
- l Common stock dividends , 12,278 5,452 Total. . 147,369 119,239 RETAINED EARNINGS . . S 4.268 S 4.689 I (1) Amounts for 1979 and 1978 include an increase of $1,686,717 and '
a decrease of $1,175,344, respectively, representing the net i amortization of the previously deferred energy costs. See Note 1 of l Notes to Financial Statements on page 28 herein. l l l 1 1 l
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LEFT. J. A. Elser, right, Zelienople L y nn ' ' _. /
%1 District customer services represen tative, and builder check plans of totalelectric
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- 3 apartment complex in Mars, PA.
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- A :} RIGHT. Substation crews move
' y y . transformer during construction to s
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l t l l E@X EY: . where it came from, m, -
" N kilowatt-hour sold were 2.56 cents gm. . .. compared to 2.27 cents m 1978.
where .ti went --
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Part of the increase in operation and maintenance costs was due to A new system peak load of hour use per customer failed to extensive turbine repairs to Unit 554,000 kilowatts was established gain over the previous year, No. 5 at the New Castle Power July 16 and equalled August 1. although total residential kilowatt. Plant and the use of more expensive hour sales did increase 1.1 percent. low-sulfur coal since June at the Total kilowatt-hour sales were plant. Unit No. 5 was out of service 4 2.9 percent higher than in 1978. It should be noted that 1979 was from February 9 to June 7. In Kilowatt-hour sales showed an a year without the usual extremes addition, the Beaver Valley nuclear increase of 93,767,284 over 1978, of weather, resulting in less use of station was out of service from while total electric sales revenues heating and air conditioning in March 13 to August 20 for the increased 25.1 percent to $134.7 many homes. This was compound. Nuclear Regulatory Commission million. ed by lower general use because of (NRC) design investigation and higher energy costs. It was also a required modifications. Resuming The previous year's rate increase year which saw a slowing economic production in August,it again was of $23.3 million and increased fuel pace in its latter months. taken out of service December 1 for prices affected all retail rate classes refueling and further modifications. and raised the average residential The limited growth in the resi- It is not expected to return to pro-rate to 5.64 cents a kilowatt-hour dential area was offset to some duction until July 1980. compared to 4.56 cents a kilowatt- degree by the record of industrial hour in 1978. and commercial use, Industrial Loss of production from these kilowatt-hour sales have shown a two stations required the operation Average use per residential solid growth trend for the past of less efficient units and also i customer was 7,626 kilowatt-hours three years. Industrial sales for caused purchased and interchanged compared to 7,679 kilowatt-hours 1979 rose by 3.4 percent to a level power costs to increase S4.4 million. in 1978. The average annual resi- second only to the high established dential bill was $430.01 compared in 1973. Commercial kilowatt hour Total operating taxes increased to S349.84 in 1978. sales rose 3.7 percent, to S17.7 million from S9.7 million in 1978. Interest charges rose, This was the first year since the Total operating expenses were amounting to S18.8 million, due depression years of the early 1930s $85.7 million, compared to S73.8 principally to the sale of first that the average residential kilowatt- l million in 1978. These expenses per mortgage bonds June 28,1979.
*0'T
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(( , j ' i ._ '* j Workmen at the generator of Unit No. 3 at the Bruce Mansfield Plant. Unit No. 3 is scheduled forcommercial operation in October i980. Most of the Company's construc- Company is the builder and the Company has ownership l tion funds are allocated for operator of the Bruce Mansfield interests. l generating facilities in conjunction Plant for the CAPCO group. The with th nstruction program of plant is located at Shippingport, PA. he four un s terminated by this On three occasions, in 1974, the Davis Besse Nuclear Power 1977 and 1978, the CAPCO Station near Port Clinton, Ohio This fivew ompany group, in companies revised construction and Units Nos.1 and 2 at the Erie addition to the Company and Ohi Nuclear Plant north of Berlin Edison, consists of The Cleveland schedules for generating units. l Forecasts indicated a slowing of Heights, Ohio. At the time of l Electric Illuminating Company, customer electricity needs, and the termination all of these units were Duquesne Light Company and The in the design stage. l resulting construction slowdown Toleco Edison Company. eased to some degree the need for Total estimated cost to build the the huge amounts of construction four terminated units was $7.3 Since the CAPCO program began, capital. billion, with the Company's share three coal-fired units and one nuclear being $455 million. , unit in which the Company has In mid-January 1980 the CAPCO l ownership interests have been com- group announced major cutbacks in Perry Unit No.1 has been pleted. A fourth coal-fired unit, its construction program, termina- rescheduled from May 1983 to May Bruce Mansfield Unit No. 3, is ting four nuclear units and 1984. Perry Unit No. 2 has been scheduled to go into commercial extending construction periods for rescheduled from May 1985 to May operation in October 1980. The two other nuclear units in which 1988. 6 m q
],
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i 1 l Below are the various CAPCO '
~--m-&v -
--m- !
units and the Company's present - share of ownership. ,
;
Coal. fired Bruce Mansfield No.1. y "
.. 4.2?e ,
Bruce Mansfield No. 2. . . . 6.8?o . Bruce Mansfield No. 3. . . . 6.28?o
- W. H. Sammis No. 7 . . . . . 20.87. N
- n. -
Nuclear ~ 't ' ' t. Beaver Valley No. l. . . . . . v ; 17.5?o ? i
- Perry No.1. . . . . . . . . . . 6.2S?o - 1_,' t .
- Perry No. 2 . . . . . . . . . . 6.28?o ;
7 ! Figures published by the Pennsylvania Electric Association g gy
+A25NN_._, .,_- g,,,.-%g$ - M M *~"T '~
(PEA)in mid.1979 show that demand growth for the state's
,,Jg T F;g k %-~-~-_
l i electric utilities in the eight years ~S-N-az.~7 T HNNF* T g @TEMY%pJ7' m =1 HVM_.-;;$ 2: e between 1966 and 1973 averaged 6.9 percent. In the period following
.M2j$725@$1925dn.is!!ET7M the Arab oilembargo 1974 to 1978, demand declined in two of the five customers in northern and central years and annual growth averaged Ohio and western Pennsylvania,is only 1.6 percent in the state. The in the range of 2 to 4 percent each revised projected rate of growth in year.
customer demand for electricity for the CAPCO group of companies, Expenditures of $62.0 million who serve about 2.5 million .were authorized for 1979 by the board of directors. A total of $57.6
. _ . - ~ _ _ , . , _
million was expended for construc-1 tion, $45.7 million of that amount l 4 , l being utilized for power plant con-struction. Most of the remainder
! was utilized in substation construe.
tion and expansion and for trans-mission line construction. { l ( D b LEFT. New direction Castle line of Foreman crew. W. L. under 9 Doran, 3 replaces a pole along a country road. d _ - TOP. The coal-fired Bruce Mansfield Plant along the Ohio Riverat Shippingport. PA. Its three units will have a net dependable capability of ' L ,' -- . 2,475 megawatts. l 7 l r I - _ _ _ _ _ _ _ ____ _ _ - _ - - - - . . . . . . - - - - - - - - - - - . - - - , . - - - - . ~ ~ . . . , - - - - - . - - - - - - -
l Serving Customers 3
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ABOVE LEFT Residentral customer servuces representatives u'Ith builders m Neu Castle area check msulation 9 7 q ,_;p; techniques ' .3.;,.p.
, .y j l ABOVE RIGHT J. F Haas. Left, energy l'i cd30NYU2' application engmeer, and ou'ners and operators of a Neu Castic plastics manufacturer u'tth a feu of their many produc ts.
CENTER Worker pours molten metal . from electric furnace Ever grou me use l l of electric furnaces m area industries is contributing heavily to industrial scles. 8 l
1 Four prmeipal objectives guided pattern of growth contmued in our builders m meeting required energy j the Company's marketing activities area for several years. conservation standards. j durmg the year. I Growing customer acceptance of A majority of home builders in These were to: the neat pump is most evident in our area are complying with the Improve the economic utilization the residential area. The past year standards set in the " Easy on of Company facilities, was excellent for new home Energy Homes , program and all construction: 547 heat pumps were huilders are kept mformed as
- Assist and encourage customers installed compared to 322 in 1978. requtrements or changes are made to use electneity wisely; A total of 590 all-electne residen. m construction or insulation
- tial mstallations were added to our standards. This program has been in Maintam favorable customer lines, bringing the total to 3.383, effect for nearly three years.
attitudes toward the Company and the value of electric service; n merease of more than 21 percent over 1978. While total-electnc homes have Assist area communities to been growmg in number, the mamtain a healthy economy. Workshops and semmars held average energy use in such homes durmg the year, and close-workmg has shown a gradual decline. This, Agam this year, as m 1978, the relationships with architects and in part, is due to improvmg con-Company's efforts to shift industnal bmlders, emphasizing the imper- struction and msulation techmques loads to off-peak periods showed tance and economics of energy and also because of the growth of defmite progress. Six thousand management. were key elements heat pump mstallations, which use seven hundred fifty kilowatts were which encouraged this growth less energy than resistance heatmg. shifted to off-peak by mdustrial pattern. School programs and customers Annual system load pubhc meetings, conducted by the Durmg 1979,12 of the Company's factor increased from 71.0 percent Company's home economics 18 largest industrial customers to 71.6 percent. representatives, contmued to showed increases in kilowatt-hour disseminate useful energy mforma- use New mdustnal load connected Load meters and off peak water tion. Durmg the year 1,441 school, during the year totaled 20,444 heating rates for residential home and public programs were kilowatts compared to 18,873 customers have for years been a conducted. kilowatts m 1978. useful method of controlling system loads. Peak load and power factor-sensitive billing is employed In ddition to the usual on-the. The past year was excellent in for the majority of industnal and j b assistance given by Company respect to expansion programa by commercial customers, enabling customer service representatives to area mdustries, yvith 11 expending thew customers to reahze economies huilders, a new element was more than e36.o million, providing in their operations and simultane- introduced during the year. a video. employment for 22,, workers. The ously improve our system load t pe camera. Recording proper Company s area development fac t or . equipment installation and msula. representatives, workmg with tion techniques has upgraded the commumty, county and state Electne heat pump installations quality of workmanship and development groups, attracted 16 have contmued their steady rise, a materials and has been helpful to new firms to our service area, representing a capital mvestment
.. . of more than 86.7 million and 380 L "
' - * . 7 new jobs.
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- I Elser. ! cit. and C W Beighev. right.
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_, __ '[. _ l TOP TO BOTTOM. High pressure sodium vapor lights were snstalled on East Washington Street in New Castle s renovated downtown business district. ,, Life-sue Reddy Kilowatt captured attention of child at lawrence County 3
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Farm Show. J'
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{ {EE J. A. Elser at solar home in Zelienople - nV1 District which has heat pump for basic l T7' 2 ^= "% f* -- heating requirements. Moraine State Park, about 12 miles
;- ~~
east of New Castic, continues to grow . as a major recreation area. . e- 4-
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Problems Ar w 7MWVm w persist q WT y %e m
- legal environmental g%y)d
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- Through its participation in the d 'I? piJ M .fi i. m i .. ~I .
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CAPCO arrangement and because 'i - M of construction of facilities in both
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p, .. h3.j h- hj[ ' p y N" s Ohio and Pennsylvania, the jq Company is subject to environ- Rff n- 9-* .,yL.4
'. "Ml i 's gie
- mental regulations in those states in #' -% *4e ,L4 g. [. e E
'y l'3 addition to federal regulations. '
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l l Severallegal proceedmgs are underway and various negotiations
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4Q a,jr g,. are continuing with environmental
; authorities seeking reasonable This pattern of vessels and maze ofpipes is the air quality controlsystem for Units Nos. l arrangements that will have the 1 and 2 at the Bruce .Mansfield Plant. I least economic impact on the Company and on its customers' The proceeding brought in the limits after August 7,1979, with electric bills. United States District Court for the certain exceptions. Even if the l Southern District of Ohio, Eastern proposed changes and schedules , ; The United States Justice Depart- Division, asks the District Court to submitted for the New Castle ; ment, at the request of the Federal assess " appropriate" but unspecified Power Plant and W. H. Sammis Unit ! Environmental Protection Agency civil penalties for alleged violations No. 7 are accepted by the environ-(EPA), filed suit against the of particulate emission regulations mental agencies, substantial non- i Company on May 16,1979, alleging promulgated under the Clean Air compliance penalties may result. In-l the Company's New Castle Power Act. addition, the Company could be !
Plant has been in continual viola- forced to shut down those plants tion of the Pennsylvania Depart. The Company has submitted that do not comply. The effect of ment of Environmental Resources proposed regulation changes for the any such shutdown on the costs to (DER) rules and regulations for New Castle Power Plant and com- and operations of the Company is sulfur dioxide (SOo) emissions pliance schedules for the W. H. not presently determinable, but it Sammis Unit No. 7. If such
~
since prior to Augti'st 7,1977. The ; suit requests that the Court impose proposals are not accepted by the < i civil penalties of $25,000 per day environmental agencies, substantial for the alleged violations. civil penalties may result. If it is
; necessary to install additional equip- i On December 18,1978 the ment. to satisfy any court order, the l Company was served with an capital cost of such equipment amended complaint joining it in a could be approximately $85 million ,
legal proceeding begun August 2, at the New Castle Power Plant and l 1978, by the federal government $26 million for the Company's ' against Duquesne Light Company share of the W. H. Sammis Unit and Ohio Edison Company as co. No.7. g}A
- g .
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owners of W. H.Sammis Unit No. 7. The Clean Air Act Amendments co I W" J- # of 1977 include, among other things, provisions requiring the j imposition of substantial non-
. compliance penalties for failure to i comply with applicable emission 11
l l l l
, - n ie r . w- , , . . ~. - w relating to price adjustment and
- ' ; --
vi s .
. other provisions of theoriginal 3' . ; . 4-' ' contract between the two partie ,.
g .- i ' T 1. - The suit seeks to termmate the
.~ , ,$ '
1 yh - * .. . ', i contract, pursuant to which Kerr- . C' McGee Corporation is to dehver
.. . e^{i>
4 , t h l
- A approximately 12 million pounds
{ m -g e . . of uramum through 1985. and
..,..* .f .
seeks damages m an unspecified b '% ~#
~
x- 'c amount. On June 28.1979 the
) CAPCO companies filed an action l p 3 ._ :
7, . , IP " ' for a declaratory judgment and r M* I ,E exemplary damages against Kerr-t
-i.
[L ' f .'- ' McGee Corporation and Kerr McGee l
.A ' ~
Nuclear Corporation in the United l
.J i
. States District Court for the l
~ .. ' "
l -
.L -
-- . Northern District of Ohio. The com-l :
N , ( =
- ; t 4 plamt requests the Court to declare the rights and legal relations of the
+
s . g" s' 4,8 parties as to disputed portions of I f 4 : . iMJ ..
. - the 1973 contract and to grant to
;
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J the plaintiffs costs and exemplary
/ .g , e N damages due to defendants' unjusti-
@, x ' '
-1 : * - fiable actions in attempting to
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- '74/ extract price mereases from the
. . r_ f '. _ . e.. . ... . . - - -
1 J plaintiffs. On September 21.1979 L. L. Ilill, laborator:. analyst conducting one of a variety of tests in the laboratory at the District Court in Ohio trans-the Bruce 3fansfictd Plant. ferred this action to the Federal District Court in Oklahoma. could require purchases of power at the financial effects on the Company prices significantly greater than the is not known at this time but the Two of the Company's munici-Company's cost of generation. effect could he substantial. pal resale customers, the Boroughs of Ellwood City and Grove City, The Company has pending a In July 1977, actions were filed filed a complamt October 3,1977 request for a variance from the against the CAPCO t mpanies by the against the Company, alleging that l thermal requirements of the water Borough of Shippingport, where the the Company violated the antitrust discharge at its New Castle Power Bruce Mansfield Plant and the laws in respect to access to alterna-Plant with the Pennsylvania DER Beaver Valley Power Station tive sources of power and nuclear I and a request for a similar variance are located. These actions seek to generating facilities owned by the at the W. H. Sammis Plant is pend- enjoin operation of these two plants. C APCO companies, the " wheeling" ing with the Ohio EPA. If the In addition, individual plaintiffs of power to municipal systems, rate I variances are not granted, the have filed actions seeking monetary schedules and other acts concerning Company may be required to install relief in an unspecified amount for terms and conditions of service. l off-stream coohng at one or both of damages claimed to be a result of The plaintiffs claimed treble I the plants. alleged operational malfunctions of damages totaling $21 million. On l the flue gas desulfurization system June 6,1978 the Company filed a l The final determmation of many at the Bruce Mansfield Plant and motion to dismiss or in the alterna- l of these environmental matters and the threat of radioactive emissions tive to stay the action. The Court from the Beaver Valley Power on January 4,1979 granted the l Station. Company's motion in part by j dismissing most of the claims, ' A complaint, dated April 10, staying one claim, and allowmg one 1979, was filed against the CAPCO claim to continue.
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- 3 . ~"" ' ' 1 y i p" N" M h W7 b District Court for the Western The PUC instituted an investiga- i District of Oklahoma by Kerr- tion into an outage of Beaver l McGee Corporation. The complaint Valley Unit No.1 during the period I concerns an alleged breach of a 1973 March to August 1979. The outage uranium supply contract provision had been ordered by the NRC.
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This pending investigation includes tional construction costs resulting consideration of whether Beaver from deferral of construction Valley Unit No.1 should be elimi- projects should be excluded from nated from, or adjustments should rate base in subsequent rate be made m, the Company's rate proceedings. base as a result of this or any out-age of the unit and whether Full discussions of legal <envtron-expenditures by the Company for mentalissues appear in the Notes to purchased power resulting from any Financial Statements in this report. such outage should be disallowed for purposes of the Company's p
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,u1 i t 1.a in a separate investigation, the PUC is considering whether addi-13
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l 1 s o, . ., , 4 , Seldom has any subject captured In our desire to reach as many These two groups are a Speakers and held public attention over such citizens as possible' with useful Bureau and a Consumer Informa-a long period as that of energy and energy information,its costs,its tion Group. The Speakers Bureau, its problems. problems and its benefits, the consisting of 11 employees , Company has for years utilized representing several departments in With all of our expertise in pro- newspaper and radio advertising, the Company, this past year ducing and delivering electric regular news stories, displays and presented programs on an average energy, the need to explain the information booklets and motion of once every 11 days, speaking to industry to our customers has picture films. total audiences of 1,449. Since grown proportionately with the 1979 was designated the Centennial attention energy's problems have The Company's monthly news of Light year by the industry, received. magazine for employees is nearing marking the anniversary of Edison's its 50th consecutive year of publi- invention of the incandescent light, cation;a quarterly magazine known particular attention was given this as " Profile"is now in its seventh topic by the Speakers Bureau. year and continues to gain public acceptance as a publication offering The Consumer Information a variety of credible energy informa- Group has been meeting regularly tion. This magazine is sent to with Company representatives since opinion leaders in communities its formation nearly two years ago. throughout our service area as well Its 9 citizens represent church, as to employees. civic, educational and union and senior citizen groups. Listening to In the past 18 months, two new the concerns of this group and simul-groups have emerged which are taneously providing the group with enhancing public understanding of insight into Company operations the complex issues of our industry. and problems is useful to both parties and serves to sensitize the Company to consumer concerns. Power plant tours continue to be ACROSS TOP OFPAGE. President c
- another useful communication tool, Ray E. Semmler during an employee information meeting; D * () r g U,]3b g , a particularly at a modern coal-fired plant such as the Bruce Mansfield Gary Brown exhibiting Centennial Plant, with its impressive array of of Light symbolduring a Speaker's environmental equipment. Requests Bureau presentation; for tours at this installation have l
One of sevemigroupsparticipating been at a high level since they in Nuclear Energy Education Day began several years ago. About (NEED)last October. 2,300 visitors, ranging from 14
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elementary school students to state newspaper. Several such sessions electricity. With respect to price,64 legislators and engmeers from were also held for employees. percent rated electricity in the I foreign countries, toured the plant excellent or good category and 94 this past year. For the second consecutive year percent rated their electric service a random, direct-mail opinion poll excellent or good. Admittedly, a When Nuclear Energy Education was taken of 500 of our residential poll taken in this manner does not Day was observed nationally in mid- customers. Simple in design, have the scientific approach of the October, the Speakers Bureau quickly and easily answered, the professional pollsters, but we feel it sponsored a series of informal questionnaire sought customer does give a useful cross-section of information sessions throughout opinions about their electric service pubhc opmion. the service area. Nuclear specialists and quality of service, nuclear from a major manufacturer lent their energy, possible energy shortages In a continuing effort to expand expertise to many of these sessions, and value of products related to employee understanding of which were attended by interested price. The results indicated that 51 Company operations and current citizens. The event was thoroughly percent feel that nuclear energy events, Company President Ray E. covered by television, radio and should be used to generate Semmler for many years has conducted semi-annual special {.... + . . . . , . ., , , . , .
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An outside firm conducted intensive sessions during a three-day Customer Contact Workshop for employees whose work involves consumer problems. Employment rolls continue to Employees represented by the techniques to be efficient, and the ' grow steadily, due principally to bargaining unit are presently in the report was favorable to the l the manpower needs at the Bruce second year of a two year contract. Company. l Mansfield Plant where Unit No. 3 The contract with Local 140 of the I is expected to go mto operation in Utility Workers Union of America The Company's managem'ent l October 1980. ( AFL-CIO) provided for wage structure was also subjected to increases of six percent on intensive study by outside con-Hiring of new employees, how- September 1,1979 and an sultants during the year and certain ever, has been carefully monitored additional two percent on March 1, changes were recommended which in an effort to control costs. 1980. we feel will further improve manage-ment efficiencies. At the close of the year the Members of the International Company had 1,500 employees, Brotherhood of Electrical Workers Educational programs for specific compared to 1,335 at the end of ( AFL-CIO) received a similar six per. groups of employees were held 1978. cent increase August 15,1979 and during the year. Supervisory an additional two percent on employees attended Management These increases plus the granting February 15,1980. by Objectives sessions, while of wage and salary increases brought customer contact employees total wages and salaries and the cost All employees received a one per- attended a Customer Contact Work-of fringe benefits to $21.8 million, cent wage increase on December 21, shop which was conducted by an compared to $20.3 million in 1978. 1979, retroactive to October 1, independent firm. l The cost of fringe benefits reached 1979, in accordance with the guide- l
$492 per employee per month. lines of the President's Council on One of the most important, and Wage and Price Stability. perhaps most difficult, of all aspects of a company's operations
% During 1979 the Company was lies in the area of employee safety.
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' "i d \a J - the PUC to be the first electric utility to be audited by an outside Although the Company had its first lost-time accident in several l consulting firm for management years because of an electrical effectiveness. Their findings showed contact, excellent safety records the Company's management have continued. The Company's 16 l
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; Company had outstanding nine series of cumulative preferred stock Company supervisors attended classes to study the elements of effective management. held by 3,483 shareholders. There were a total of 599,049 preferred shares outstanding. The preferred Mercer County Substation Depart- Castle Power Plant's Operating stock is listed on the Philadelphia ment has worked more than 26 Department reached 800 days Stock Exchange, Inc.
l years without a lost-time accident. without a lost-time accident. Employees in the Zelienople District achieved 1,600 days and A single noncontributory BELOW. L. D Westerman, left, a member New Castle office employees trusteed pension plan covers all of the Zelienople District's meter depart-2,400 days without lost-time employees. At the end of the year ment and veteran of 33 accident. free accidents. In December the New 233 former employees and years with the company. challenged provisional payees or surviving R. W. .\ fann, center, a new employee in
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marked 1,600 days without a lost-time k' ,%\ ' - -' ' : = During the past year the Board accident. President Rav E. Semmler joined hands with Westerman and .\tann
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l L # of Directors had several changes in to seal the bargam. personnel. In May, Victor A. Owoc Y b*,-,-\ and Justin T. Rogers, Jr. were elected to the board. Mr. Owoc is executive vice president and a director of Ohio Edison: Mr. Rogers, I l
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LEFT D E. Hackett, director. accident 4* prevention, left, received a Certificate of . Appreciation from the Pennsylvania 1 Electric Association for serumg as chair- p
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Committee from 1977 to 1979. Ray E. Semmler. Company President and a past y' president of the PEA. made the .
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Pennsylvania Power Company Operating Statistics 1979 1978 1977 1976 1975 1974 SALES IN KILOWATT. HOURS (MILLIONS) R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . 823.3 814.7 788.3 750.5 717.9 699.6 Com m e rcial . . . . . . . . . . . . . . . . . . . . . . . . . 512.6 494.5 487.8 467.6 442.4 414.5 I n d u st ria l . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,878.5 1,816.9 1,724.5 1,704.5 1,541.0 1,832.2 All O t h e r . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.4 125.0 123.4 112.0 104.8 105.3 Total. . . . . . . . . . . . . .. 3.344.8 3.251.1 3.124.0 3.034.6 2.806.1 3.051.6 REVENUES FROM SALES (THOUSANDS) R esidential* . . . . . . . . . . . . . . . . . . . . . . . . . $46,425 $37,113 $31,763 $30,643 $29,967 $24,357 Co m me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 25,588 20,320 17,659 17,202 17,000 13,513 I n d u st rial . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,128 45,201 37,085 37,786 36,547 30,844 All O ther . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,540 4,994 3,555 2,955 2,465 2,500 To tal. . . . . . . . . . . . . . . . $134.681 $107.628 $90.062 $88.586 $85.979 $71.214 CUSTOMERS SERVED AT END OF YEAR R esid ential* . . . . . . . . . . . . . . . . . . . . . . . . . 109,032 107,126 105,197 103,725 101,924 100,545 Com me rcial . . . . . . . . . . . . . . . . . . . . . . . . . 12,919 12,647 12,317 12,090 11,800 11,629 Industrial. . . . ...................... 135 133 133 135 133 133 All Other. ................. ....... 114 113 111 113 114 115 To ta l. . . . . . . . . . . . . . . . 122.200 120.019 117.758 116.063 113.971 112.422 RESIDENTIAL
- CUSTOMER AVERAGES Average Kwh Used per R es.* Custo me r. . . . . . . . . . . . . . . . . . . 7,626 7,679 7,548 7,301 7,099 7,018 Average Price Per Kwh-R es.* (ce nts) . . . . . . . . . . . . . . . . . . . . . . 5.64 4.56 4.03 4.08 4.17 3.48 KILOWATT HOU RS G ENERATED (millions). . . . . . . . . .... . 3,194.8 3,320.1 3,550.6 2,779.3 2,375.0 2,620.5 KILOWATT. HOURS PURCHASED AND INTER CH ANG ED (millions) . . . . ..... 281.7 116.7 (205.8) 474.6 640.8 607.3 PEAK LOAD (kilowatts) . . . ....... .... 554,000 552,000 551,000 526,000 495,162 498,199
- Includes farm customers l
19
P;nnsylvania Pow;r Company Financial Statistics 1979 1978 1977 1976 1975 1974 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $89,583 $87,212 $72,E10 Operating and Maintenance Expenses . . . . . 85,730 73,807 61,068 59,400 56,846 45,06 D ep reciation. . . . . . . . . . . . . . . . . . . . . . 12,517 11,887 10,654 7,342 5,984 5,856 Taxes: Federal and State income Currently Payable . . . . . . . . . . . . 2,241 (142) (979) (1,077) 5,713 2,472 Deferred (Net) . . . . . . . . . . . . . . 2,501 3,353 3,456 535 (126) 2,704 investment Tax Credits (Net) . . . . . 2,634 (1,458) (554) 1,423 701 238 G e n e ral . . . . . . . . . . . . . . . . . . . . 10,296 7,916 6,717 6.238 5,817 4,877 Operating income . . . . . . . . . . . . . . . . . . 29,421 23,755 20,481 15,722 12,277 11,347 Other income (Net) . . . . . . . . . . . . . . . . . 6,297 4,810 5,352 13,101 12,049 8,613 N et interest . . . . . . . . . . . . . . . . . . . . . . 14,512 13,578 10,322 12,304 8,941 7,484 income Before Cumulative Effect of a Change in Accounting Method. . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,476 Cumulative Effeet to December 31,1973 of Recording Metered but Unbilled Revenues (Net of related income taxes of $311,000) - - - - - 279 N et income . . . . . . . . . . . . . . . . . . . . . . 21,206 14,987 15,511 16,519 15,385 12,755 Preferred Stock Dividend Requirements. . . . 4,660 4,660 3,873 3,626 3,035 2,120 Net in ome for Common Stock . . . . . . . . . $ 16.546 S 10.327 $11.638 $12.893 $12.350 $10.635 l Common Stock Dividends. . . . . . . . . . . . . $ 12.278 $ 5.4E2 S ~7.220 $ 8.470 $10.008 $ 3.852 U tility Plant . . . . . . . . . . . . . . . . . . . . . . $546,744 $506,374 S454,522 $409,062 $350,123 $307,306 l Depreciation Reserve . . . . . . . . . . . . . . . 101,585 90,742 81,542 72,058 65,680 60,702 j
$445.159 $415.632 S372.980 $337.004 $284.443 S246.604 j CAPITALIZATION Long-Term Debt . . . . . . . . . . . . . . . . . $225,156 $205,683 $180,385 $167,813 $135,075 $117,349 Non redeemable Preferred Stock . . . . . . 41,947 41,947 41,947 41,947 33,947 33,947 Redeemable Preferred Stock . . . . . . . . . 17,600 18,000 18,000 8,000 8,000 -
Common Stock and Retained Earnings . . 154,396 150,128 140,939 118,554 106,118 98,341 Tota l. . . . . . . . . . . . . . . . . . . S439.099 $415.758 $381.271 $336.314 $283.140 S249.637 CAPITAllZATION RATIOS Long-Term Debt . . . . . . . . . . . . . . . . . 51.3 % 49.5% 47.3% 49.9% 47.7% 47.0% Non-redeemable Preferred Stock . . . . . . 9.5 10.1 11.0 12.5 12.0 13.6 Redeemable Preferred Stock . . . . . . . . . 4.0 4.3 4.7 2.4 2.8 - Common Stock and Retained Earnings . . 35.2 36.1 37.0 35.2 37.5 39.4 20 .
Pennsylvania Power Company Management Discussion and Analysis l l l I Operating Revenues- Operating and Maintenance Expenses-Total operating revenues The increase in 1978 of contributing to the overall increase ) increased $18,275,000 and $12,739,000 reflects an increase of in cost of fuel is an increase of
$26,222,000 during the years 1978 $2.89 in the cost per ton of coal $2,862,000 due to the operation of and 1979, respectively. The 1978 consumed, as well as the fact that the Company's deferred energy increase was due to an increase in kilowatt-hours generated clause. Purchased and interchanged i cnergy cost revenues of 28.5% and from Beaver Valley Unit No.1 power increased $4,382,000 or an increase in kilowatt-hour sales of (Nuclear) decreased 7.4% while 139.8% in 1979 over 1978 due to a 4.1%. In addition, the increase in kilowatt-hours generated from oil reduction in kilowatt-hour deliveries retail base rates of 12.6% resulted combustion units increased 43.1%. to the parent, Ohio Edison from the annualincrease of 40% in Also contributing to the increase in Company,in 1979 compared to base rates granted by the Pennsyl- operating costs was the placing in 1978 when Ohio Edison Company vania Public Utility Commission, commercial operation of Bruce received substantial deliveries from effective September 1,1978. Mansfield Unit No. 2 in October Pennsylvania Power Company as a Municipal resale revenues increased 1977, thus reflecting a full year of result of a coal strike during the 56.4% as a result of implementing expenses. Purchased and inter- first quarter of 1978. In addition, in September 1977 a proposed rate changed power increased due to the the Company sold fewer kilowatt-increase, subject to refund, pending Company's buy / sell position as a hours to other CAPCO companies a final decision by the Federal member of CAPCO caused by during 1979 as a result of a change Energy Regulatory Commission. extendedoutages of various CAPCO in our buy / sell position and the l Surcharge revenues related to the units, which put the Company in a unavailability of the Beaver Valley ;
collection of certain Pennsylvania " Net Receipt" position. Nuclear Unit caused by a Nuclear taxes imposed on utilities, increased Regulatory Commission Order. due to increased kilowatt-hour sales The increase in 1979 of and the increase in retail base rates. $11,923,000 reflects an increase of The 1979 increase of 22.0%is mainly S3.58 in the cost per ton of coal due to an increase in base rates consumed along with a minimal granted by the Pennsylvania Public increase in tons consumed and Utility Commission, effective kilowatt-hours generated. This September 1,1978, which resulted increase is partially offset by a
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l in a 21.9% base rate increase. On 38.9% decrease in kilowatt-hours July 1,1978, the Company rolled generated from oil combustion 95% of the energy costs for the 12- units. The overall kilowatt-hours month period ended July 31,1977 generated from all units decreased I into base rates as a result of a 125,347,100 or 3.8% while the cost l Pennsylvania Public Utility of fuel consumed for all units Commission Order. Surchargo increased S4,117,290 or 10.4%. Also revenues increased 34.1% and i kilowatt-hour sales increased 2.9%. I s Since September 1977, the Company has been collecting rates subject to refund from the munici-pal resale class pending a decision by the Federal Energy Regulatory Commission. The 1979 revenues have been adjusted to exclude an estimated $1,023,923 which is the amount estimated to be refund-able to the municipal resale customers for this 28 month period. 21
Management Discussion and An@rsis.-conuno.o In 1978 maintenance expenses the 30 mill rate and a one-time increased due to replacement of a surtax at 105 mills upon the failed step-up transformer at Beaver taxable value of items of utility Vcliey Unit No.1, replacement of a realty at December 31,1978 generator at W. H. Sammis Unit previously excluded from the tax No.7, along with forced and base less amounts of petitions for scheduled outages of various units refunds of the realty tax paid in ct the New Castle Power Plant prior years. during the year. The forced outages ct Beaver Valley Unit No.1 and Changes in the provisions for W. H. Sammis Unit No. 7 together income taxes for the years 1978 entailed nearly a year of downtime. and 1979 are set forth in Note 1 of Maintenance expenses in 1979 Notes to the Financial Statements. increased principally due to scheduled outages at the New Other income (Net)- Castle Power Plant and W_ H. The decreasein1978 of $542,000 Sammis Unit No. 7. The No.5 Unit results principally from the ct the New Castle Power Plant was decrease in allowance for funds down approximately four months used during construction, reflecting for a boiler and turbine overhaul. the placing in commercial operation Escalating wage and fringe benefits, of Bruce Mansfield Unit No. 2 in i increased material and other costs October 1977, although the overall also contributed to the overall rise rate for computing the allowance in the level of expenses. was increased slightly. The increase in 1979 of $1,487,000 reflects a Depreciation- higher level of construction work in The provision for depreciation progress. increased $1,233,000 for the year 1978 due to placing in service Net Interest-Bruce Mansfield Unit No. 2 in The increase in 1978 of October 1977 and other additional $3,256,000 reflects the sale of first property. The 1978 increase was mortgage bonds in April 1978, and partially offset by the adoption of a decrease in allowance for reduced depreciation rates approved borrowed funds used during con. by the Pennsylvania Public Utility struction, a credit amount, due to I Commission. The increase of the placing in cornmercial operation ! - $630,000 in 1979 is due to of Bruce Mansfield Unit No. 2 in additional plant placed in service. October 1977. The 1979 increase of $934,000 reflects the sale of . Taxes- pollution control notes and first General taxes increased mortgage bonds in April and June
$1,199,000 for the year 1978 and of 1979, respectively, and the $2,380,000 for the year 1979. The increase in short-term borrowings.
1,978 increase reDects higher gross The above increase is partially , receipts taxes as a result of higher offset by the allowance for l revenues, and additions to property borrowed funds used during construction, a credit amount, due h;ve resultedin higherproperty , taxes. The 1979 increase in general to the increase in the level of con. l taxes is principally due to an struction work in progress. ) increase in Pennsylvania Gross Receipts Tax resulting from an increase in rates granted by the Pennsylvania Public Utility Commission effective September 1, 1978 and an increase in the Pennsylvania Public Utility Realty Tax due to an expanded tax base at 22'
Pennsylv:ni3 P w;r C mp;ny STATEMENTS OF INCOME AND RETAINED EARNINGS: For the Years Ended December 31,1979 and 1978 increase or 1979 1978 Decrease Thousands of Dollars Electric Operating Revenues (Note 1) . . . ........ .. $145,340 $119,118 +$ 26,222 Operating Expenses and Taxes: Operation-45,587 38,608 + 6,979 Cost of fuel (Note 1) . .. ... . . ......... ... Purchased and interchanged power, net (Note 1) . . ... 7,516 3,134 + 4,382 Other operation expenses . . . ... . .. . .... 19,204 19,483 - 279 Total operation. . ... ... ... ... ...... 72,307 61,225 + 11,082 13,423 12,582 + 841 Maintenance. ... . .. . .. .. .. . Provision for depreciation (Note 1). . ...... . . 12.517 11,887 + 630 General taxes . . . . ... . ... ... .... .. 10,296 7,916 + 2,380 Income taxes (Note 1) . . . . . . . . .. ... 7,376 1,753 + 5.623 Total operating expenses and taxes. ... . . 115,919 95,363 + 20,556 Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 23,755 + 5,666 Other income and Deductions: Allowance for equity funds used during construction (Note 1) . . . . .. . 6,258 4,592 + 1,666 Miscellaneous, net . . . .. . . . .. 78 419 - 341 Income taxes (Note 1) . . ..... . . .. . . . (39) (201) + 162 Total other income and deductions, net. . . 6.297 4,810 + 1,487 Total lncome . . . . . . . . . . . . . .. ........ ....... 35.718 28,565 + 7,153 Net interest: . Interest on long term debt. . .. . 17,353 15,292 + 2,061 Allowance for borrowed funds used during construction (Note 1). . . . . .. . . . .... (4,301) (2,613) - 1,688 Other . . . . ... . 1,460 899 + 561 Net interest . . . . . . . . . 14,512 13.578 + 934 Ne t i n co m e . . . . . . . . . . . . . . . . . . . . . .......... 21,206 14,987 + 6,219 Preferred Stock Dividend Requirements. . . . . . . . . . . . . . . . 4,660 4,660 - Net income for Common Stock . . . . . . . . . . . . . . . . . . . . . $ 16.546 S 10.327 +S 6.219 Retained Earnings-8alance at beginning of year . . . .. . S 32,828 $ 28,139 +S 4,689 Net income for common stock. . . . .. 16,546 10,327 + 6,219 Less-Dividends on common stock . . 12,278 5,452 + 6,826
-Dividends declared on preferred stock in excess of current period's requirements. . .
174 - 174 Capital stock issuance expense. - 12 - 12 Retained Earnings-Balance at end of year (Note 5) . S 37.096 S 32.828 +$ 4.268 ( ) Denotes negative amount The accompanying Notes to Financial Statements are an integral part of these statements. 23
P:nnsylvania Pow;r Comp ny Balance Sheets: at oecember 31,1979 and 1978 Assets increase or 1979 1978 Decrease Thousands of Dollars Utility Plant (Note 1): In service, et original cost . . .. .. . .... . . S429,016 S414,657 +5 14,359 Less-Accumulated provision for depreciation. .... . 101,585 90,742 + 10,843 327,431 323,915 + 3,516 Construction work in progress . . . .. .. . .. .... 115,989 90,126 + 25,863 Nuclear fuel in process . . . . . ... .............. 1,739 1,591 + 148 445,159 415,632 + 29.527 Other Property and investments: Construction funds held in escrow, including accrued interest. . . . .. ........... ........ 76 2,200 - 2,124 Other, at cost . . . . . . . ... . .. ... ........ 313 313 - 389 2,513 - 2,124 Current Assets: Cash. ................ . ...... ....... 1,429 795 + 634 Receivabies-Customers (less accumulated provision of $180,000 and S160,000, respectively, for uncollectable accounts) . . . . 11,372 11,221 + 151 Parent Company . . . . ... ........ ........ 8,661 10,373 - 1,712 Other . . . . . . . . . . ...... .. ............ 7,786 9,228 - 1,442 Materials and supplies, at average cost-Fuel., ...... .................. ....... 9,745 8,138 + 1,607 Other.. ............ ........ .. ....... 4,146 3,323 + 823 Prepayments and other. .. .................... 617 484 + 133 43,756 43,562 + 194 Deferred Debits: Deferred energy costs (Note 1). . . . ....... ...... 3,030 4,717 - 1,687 Deferred cost of terminated construction projects (Note 3) . 14,761 - + 14,761 Other......... ................... ...... 10,190 7,423 + 2,767 27,981 12,140 + 15,841 I S517.285 S473.847 +S 43.438 l l l The accompanying Notes to Financial Statements are an integral part of these balance sheets. 24
O Capitalization and Liabilities increase or 1979 1978 Decrease Thousands of Dollar: Capitalization: (See Statements of Capitalization) Common stockholder's equity . . . . . . . . . . . . . . . . . . . $154,396 $150,128 +$ 4,268 Non-redeemable preferred stock. . . . . . . . . . . . . . . . . . . 41,947 41,947 - Redeemable preferred stock . . . . . . . . . . . . . . . . . . . 17,600 18,000 - 400 Long-term debt. . . . . .............. ... .... 225,156 205,683 + 19,473 439,099 415,758 + 23,341 Current Liabilities: i Current maturities of long-term debt and preferred stock . . 3,400 - + 3,400 Notes payable to banks (Note 6) . . . . . . ...... .... 15,500 6,500 + 9,000 Accounts payable-Pa ren t Co m pa ny . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,503 1,971 + 532 Other . . . . .... . .. ............... .... 23,675 23,362 + 313 Accrued taxes. . ... ........ ............. 6,306 3,329 + 2,977 Accrued interest . . . . . . . . . . . ... ... .... . .. 3,483 3,219 + 264 Dividends declared on preferred stock . . . ......... . 934 934 - Miscellaneous . . . . . . . . . . . . . . . . ... ........ . 2,321 1,872 + 449 58,122 41,187 + 16,935 Deferred Credits: Accumulated deferred income taxes (Note 1) . . . . ... 10,139 9,853 + 286 Accumulated deferred investment tax credits (Note 1) . . . . 5,242 2,608 + 2.634 Other ...... ... . . . . . . . . . , . .. ... . . 4,683 4,441 + 242 20.064 16,902 + 3,162 i Commitments, Guarantees and Contmgencies I (Notes 2,4 and 7) I 1
$517.285 $473.847 +S 43.438 l l
l l l l l l l The accompanying Notes to Financial Statements are an integral part of these balance sheets. 25
P nnsylvanis PowIr C:mpany Statements of Capitalization atDecember31,1979and1978 1979 1978 Thousands of Dollars Common stockholder's equity: Common stock, S30 par value, authorized-4,800,000 shares-outstanding 3,910,000 shares ...... ... ........ ..... $117,300 $117,300 Retained earnings (Note Sa). . . . . .... . ...... ....... 37,096 32,828 Total common stockholder's equity . . . . . ..... 154,396 35.2% 150,128 36.1% Optional Redemption Price Number of Shares Aggregate Outstanding (in 1979 1978 Per Share Thousands) Preferred stock (Note 5b): Cumulative, $100 par value Authorized-740,000 shares, issuable in series Non-redeemable: 4.24 % .4.64 % 141,049141,049 $102.980-105.000 $14,614 14,105 14.105 7.64 % . 8.00 % 118,000 118,000 106.380-107.270 12,605 11,800 11,800 8.48% .9.16% 160,000 160,000 107.320 109.160 17,319 16,000 16,000 Premium - - - 42 42 Total non-redeemable preferred stock 4M4M $44,538 41,947 9.5 41,947 10.1 Redeemable (Note Sc): 8.24% 100,000 100,000 $108.240 $10,824 10,000 10,000 11.00% 80,000 80,000 112.110 8,969 8,000 8,000 1S0g001 M $19J93, 18,000 18,000 Redeemable within one year . . . . . . . . . ....... ....... .. (400) - l Total redeemable preferred stock . . .......... ... ... ............ 17,600 4.0 18,000 4.3 l Long term debt (Note 5d): First mortgage bonds-2-3/4% Series due 1980 . . . . . . . . . . . . . . . . . ............... - 3,000 9 5/8% Series due 1981 . . . . . . . . . . . . . . . . . . . . . . .......... 5,000 5,000 l 3-1/4% Series due 1982 . . .............. ......... .... 5,805 5,805, I 91/2% Series due 1985 ..... ............... .......... 25,000 25,000 4 3/8%.10-1/2% Series due 1992 through 2000. . ............. 68,000 48,000 i 7 5/8% 1/2% Series due 2001 through 2008. . . . . . . . . . . . . . . . . . 74,000 74,000 . Total first mortgage bonds . ..... ............... ... 177,805 160,805 l Secured notes and obligation-Pollution control- ] 1973 Series A, average interest rate 5.75%, due 1984 through 2003 . . . . . . . . . . . . . . . . . . ... .......... .... 'i S00 3,500 1974 8-3/8% Series A and 8, due 1990 through 2004. . . . . . . . . . . . . . 6,047 6,547 l 1976 7-7/8% - 8% Series A and D, due 1992 through 2006 . . ....... 20,C X) 20,000 1977 4-3/4% Series E, due 1979 (refinanced in 1979). . . . . . . . .... - 3,500 1977 6-3/4% Series B, due 1998 through 2007 . . . . . . . . . . . . . . ... 10,600 10,600 1978 7.30% Obligation, due 1988 through 2003. . . . . . . . . . . . . . . 314 314 1979 7.80% Series C and F, due 2004. . . ...... ............. 6,000 - 46,961 44,461 1 1976 7.90% Environmental Note, due 1992 through 2001. . . . . . . . . . . 1,000 1,000 , i Total secured notes and obligation . . . . . . . . . . . . . . . . . . . . . . 47,961 45,461 1 ! Net unamortized premium (discount) on debt. . . . . . . . . . . . . . ...... (610) (583) Total long-term debt . . . . . . . . . . . . . . . . .............. 225,156 51.3 205,683 49.5 Total capitalization (Note 7) . . ....................... S439.099 100_p%_ $415.758 100.0% The accompar.ying Notes to Financial Statements are an integral part of these statements. l 26~ l i
Pennsylvania P wcr Compa,ny Statements of Sources of Funds d for Gross Property Additions: 54%7,T.Wionais78 1979 1978 Thousands of Dollars Sourcesof Funds: Net income . .. .... ... ....... ........... . ..... .. S 21,206 S 14,987 Less-Dividends on common stock . . . . . . . . . . .. .. .... ... . .. 12,278 5,452 Dividends on preferred stock. . . .. ................ ... ... 4,660 4,834 4,268 4,701 Principal non-cash items-Depreciation and amortization-Charged to provision for depreciation . ........... .. .. ...... 12,517 11,887 Charged to other accounts. . . . .. ......... ...... .... .. . 201 199 Deferred income taxes-net . ... .... ..... .. . ... . .. . 3,382 2,801 l Investment tax credits-net . ... ..... . . . ... .. .. . ... 2,634 (1,458) l Alfowance for equity funds used during construction. . .... . . . '(6,258) (4,592) i Deferred energy costs, net of deferred income taxes (increase) decrease. .
)
. .... . .. ... ..... ...... .. ... 806 (624)
Total funds from operations . ..... . . . .. 17.550 12.914 Proceeds from issuance of-Common stock . .... .... .. ... . ...... .. . .. - 4,500 First mortgage bonds . . .. .. .. . . .. .. .. .. .. . . 20,000 25,000 Secured notes and obligation . . . . . .... .. . . .... . ..... 6,000 314 ; increase in notes payable to banks . . .. . .. ... ... . ... .. 9,000 6,500 1 35,000 36,314 Payment at maturity of long term debt . l
.. . .. . .. . . ... (3,500) (1,000) l Construction funds held in escrow includi,ng accrued interest. . . .. 2,124 5,540 l
Net change in current assets and current liabilities excluding notes payable to banks and current maturities of long-term debt and preferred stock-Receivables . . . . . . . . .. ...... ... ... ...... ... 3,003 (13,216) Materials and supplies. . . . .. . .. .... . . .. (2.430) (616) Accounts payable . . . . . . . . ... . . .... .... .. . 845 12,731 Accrued taxes. . ... . ... . . . .. .... .. ... 2,977 (360) Other, net ...... ... .... . .. ...... . . . . . .. (54) 523 1 4,341 (938) ; Other, net (i) . l
. . . .. . .. ... . . . .. 2,161 2,128 !
Gross Property Additions (i) . . . . . .. . . ... . S 57.676 S 54.958 ( ) Denotes negative amount (i) includes allowance for equity funds used during construction (Note 1). The accompanying Notes to Financial Statements are an integral part of these statements. l l l 27 i
Pennsylv:nia PowIr Comp:ny Notes to Financial Statements: (1) Summary of Accounting Policies: Management expects that the Commission will allow the The Company follows the accounting policies and Company full recovery of any deferred costs including practices prescribed by the Pennsylvania Public Utility those relating to changes in the lag period or any other Commission (the Commission) and the Federal Energy changes,in accordance with the objectives of the energy Regulatory Commission (FERC).The more significant clause provisions included in its approved tariffs. policies are summarized below. Utility Plant, Depreciation and , Maintenance-Revenues- Utility plant is stated at the original cost of construction The Company's residential and commercial customers which includes payroll and related costs such as taxes, are metered on a cycle basis. The Company's policy is to pensions and other fringe benefits, general and include in revenue residential and commercial service administrative costs and an allowance for funds used during revenues relating to meters read through the end of the construction (see Allowance for Funds Used During month. Construction). Effective September 11,1977, the FERC authorized the The Company provides for the depreciation of Company to increase its rates for municipal resale service to depreciable plant in service on a straight line basis at various yield approximately $1,317,000 of additional annual reve- rates over the estimated lives of the property. In the nues based on the test year data. The approved rates are opinion of management, the amounts provided have been being collected subject to refund pending the results of adequate and the methods used to determine the amounts further hearings. For each of the years 1979 and 1978, meet the requirements of the regulatory commissions. The operating revenues and net income, attributable to such rate offective annual composite rate for 1979 and 1978 is increase, amount to approximately $1,500,000 and approximately 3.1%.The Company was granted a total
$475,000, respectively. Management believes that any allowance of approximately S2,300,000 for its share of the refunds which may be required in this case would not estimated decommissioning costs of the radioactive have a significant effect on the results of operations for the components of its only nuclear generating unit in service in periods presented. its recent rate case and began providing for such costs in 1979.
Revenues attributed to the Company's largest customer amounted to approximately $17,465,000 and $14,200,000 Property additions, renewals and replacements are for 1979 and 1978, respectively,which. represented charged to utility plant accounts. Property considered to be approximately 12.0% of the Company's total operating retirement units, retired or otherwise disposed of in the revenues in each year. normd course etbusiness, together with the cost of removal,less salvage,is charged to the accumulated Deferred Energy Costs- provision for depreciation and no gain or loss is recognized The Company defers certain increased energy costs in the income accounts. Repairs of property are charged to incurred and estimated to be billable to most customers in maintenance. succeeding periods in accordance with its energy clause. Effective July 1,1978, the Commission adopted an energy Common Ownership of Generating Facilities-clause which replaced the fuel adjustment clause. The The Company and other Central Area Power energy clause provides for the recovery or refund, over a six- Coordination (CAPCO) group companies own various month period, which commenc]s two calendar months power generating facilities as tenants in common. Each of after incurrence, of energy costs which differ from the companies is obligated to pay a share of the costs of established base energy costs. The energy clause also any such jointly owned facilities in the same proportion as provides for an adjustment for any over or under collection its ownership interest therein. The amounts reflected in the resulting from the operation of this clause. accompanying Balance Sheet under utility plant include such costs at December 31,1979 as follows: The effect of the Company's accounting, which has been approved by the Commission, was to decrease net income for 1979 by S806,000, and to increase net income for 1978 by $624,000. 28 , l 1
Notes to Financial Statements-Continued CAPCO Units in Service (b) CAPCO Units under Construction Bruce Bruce Perry W. H. Mansfield Beaver Mansfield 1and Sommis 7 1 and 2 Valley 1 3 2 Total Thousands of Dollars Utility plant in service . . . . . $ 25.113 $ 45.181(a) $101.749 $ -
$172.043 Accumulated provision for depreciation . . . . . . . . $ 5.343 $ 3.535 $ 10.185 $ -
$ 19.063 Construction work in progress. . . . . . . . . . . . . . $
Nuclear fuelin 34'7 W $ 8.537 $_27 451 $ 71.191 .$.1.QL982 process (c) . . . . . . . . . . . . $ 1.739 Company's ownership in, terest in unit capacity. . . . . _,29.B_% J 17.5% 6.28% 6.28% (a) includes common facilities. (b) The Company's portion of operating expenses associated with the common ownership of generating facilities is included in the corresponding operating expenses in the accompanying Statements of Income. (c) Unsegregated amount among the CAPC0 nuclear units. Nuclear Fuel-The cost of nuclear fuel in service is charged to fuel 1979 1978 expense based on the rate of consumption assuming a zero Thousands of Dollars net salvage value. The manner of disposition of spent Currently payable-nuclear fuel may not be determined for many years, $ 1,330 $ Federal . . . . . . . . . . . . . . . . . . - therefore necessitating storage of such fuel for an mdefinite S ta te . . . . . . . . . . . . . . . . . . . . 950 59 period. The Company will seek regulatory approval for recovery of such costs through its rate case proceedings. Total currently payable 2,280 59 Deferred, net-Allowance for Funds Used During Construction- Fede ral . . . . . . . . . . . . . . . . . . 1.893 2,880 The allowance for funds used during construction, a State............. .. .. 608 473 non-cash item which is charged to construction work in Total deferred, net progress during the period of construction, represents the (see below) * - - 2'501 3,353 net cost of borrowed and equity funds used for construct. ion purposes. The amount of the allowance varies as a result Investment tax credits. net of of changes in the level of construction work in progress and amortization (i). . . . . . . . . . . . . 2,634 (1.458) in the sources of capital. The Company computes the
, Total provision for allowance utilizing a net of tax rate consistent with its rate income taxes * * * * * * *
- f 7'415 $ 1'954 treatment. The rate used during 1979 and 1978 wr.s 8E income Taxes- ( ) Denotes negative amount The provision for income taxes shown in the accompa- (i) 1978 reflects the reversal of previously nying Statements of income carisists of the following recorded investment tax credits, now being carried components: forward due to the carry-back of net operating losses.
29 ,
' Notes to Financial Statements-Continued Such provision is included in the accompanying investment tax credits were available to offset future
_ Statements of income as follows: Federalincome taxes payable, of which $4,000,000 expires at the end of 1983, $4,000,000 expires at the end of 1984, . 1979 1979 $3,000,000 expires at the end of 1985 and $1.000,000 expires at the end of 1986. Thousands of Dollars The total provision for income taxes shown in the Operating Expenses . . . . . . . . . . . S 7,376 $ 1,753 accompanying Statements of income is less than the O ther income . . . . . . . . . . . . . . . 39 201 amount which would be computed by applying the Total provision statutory Federal income tax rate to income before
. for income taxes . . . . . . $_Z 4]1 j.lgj4 income taxes. The following table summarizes the major reasons for these differences:
Deferred tax expense results from timing differences in 1979 1978 the recognition of revenues and expenses for tax and accounting purposes. The sources of these difforences and Thousands of Dollars tax effect of each are asindicated below: Book income before provision for income taxes . . . . . . . . . . . . . . $2832.1 }.1.jj4]. 1979 1978 Amount of Federalincome tax
~
Thousands of Dollars expense at statutory rate. . . . . . . 313,166 S 8,132 Debt component of allowance for increases (reductions)in taxes funds used during construction resofting from: (i) which is credited to plant . . . . . . $ 2,215 S 1,392 Allowance for equity Excess of tax depreciation allowed funds used during pursuant to the Class Life ADR construction which does depreciation system, net . . . . . . . 1,309 1,599 not constitute taxable Accelerated amortization of the income . . . . . . . . . . . . . . . . (2,879) (2,204) cost of certain facilities covered Excess of tax over book by Necessity Certificates. . . . . . . (182) (182) depreciation . . . . . . . . . . . . . (3,296) (3,837) Property taxes applicable to sub. State income taxes, not of sequent periods, net. . . . . . . . . . 40 (8) Federalincome tax benefit . . . 841 277 Capitalized overhead costs. . . . . 254 - (105) 3,382 2,801 Amortization of deferred invest. Deferred energy costs, not. . . . . . . (881) 552 ment tax credits . . . . . . . . . . 66 , (376) Total deferred tax expense, Other,not............... (295) (375) no t . . . . . . . . . . . . . . . { 2]g.l.1.13.51 Total provision for income taxes . . . . . . . . f I43.5 l_laE4 , ( ) Denotes negative amount
- ( ) Denotes negative amount For income tax purposes, the Company has claimed (i) Under the established rate-making practices of the liberalized depreciation (double-declining balance, guideline regulatory commissions to which the Company is lives and the Class Life ADR System provision methods) subject,it is expected that the deferred taxes not and, consistent with the accounting and rate making provided for currently will be collected in customers' policies of the applicable regulatory authorities, the rates when such taxes become payable.
Company has followed " flow-through" accounting except asindicated above. .It is not expected that the cash outlay for income taxes with respect to any of the succeeding three years will The Company followsdeferral accounting with respect materially exceed income tax expense for such years. to inveptment tax credits and amortires such credits to
' income over the estimated life of the related property. At l
December 31,1979, approximately $12,000,000 of unused
- 30. .
l
~. , __ _ .. _ , _ , - - . . _
Notes to Financial Statements-Continued Pensions- intends to seek approval from the Commission and the FERC The Company has a trusteed noncontributory pension to amortize these amounts plus contractors' cancellation plan covering substantially all full-time employees. Upon charges, if any, over several years and to recover the costs retirement, employees are provided a monthly pension from customers to the extent that they are not otherwise based on length of service and compensation. Pension costs recoverable. The Company believes that such costs for 1979 and 1978 were $2,321,000 and $1,949,000, were prudently incurred and has no reason to believe that respectively, of which $1,146,000 and $899,000, the regulatory authorities involved will not react favorably respectively,were charged to operating expenses and the to its requests and therefore believes that any loss of invest-balanceswere charged primarily to construction. Such costs ment and cancellation charges,if any,will be recoverable include the amortization of pastservice costs on an actuarial from its customers. Until orders are received from the basis over 30 years. The Company funds pension costs Commission and the FERC, none of the charges will be accrued. The estimated unfunded past servics liability of reflected in earnings. the plan at June 30,1979 (the date of the latest actuarial report) was $7,715,000. The market value of the pension (4) Lesses: fund at December 31,1979 exceeded the actuarially The Company rents or leases nuclear fuel, certain trans-computed salue of the vested benefits at June 30,1979.~ mission and distribution facilities, office space and other incidental equipment and property under cancelable and Purchased and Interchanged Power, Net- noncancelable leases. The total rent expense included in the Purchased and interchanged power, net in the accom- accompanying Statements of Income for 1979 and 1978 panying Statements of income includes the interchange of was $2,304,000 and $3,109,000, respectively. The future power with Ohio Edison Company, the Company's parent, minimum rental commitments as of December 31,1979 for which resulted in a net expense to the Company of all noncancelable leases are as follows: S7,600,000 in 1979 and $4,500,000 in 1978. Such amounts are determined in accordance with operating 1980.......................... $ 2,290,000 agreements entered into by the Company with the CAPC0 1981.......................... 3,968,000 companies.These agreements prescribe the method of 1982.......................... 4,125,000 accounting to be followed in the billing of power, and have 1983.......................... 3,627,000 been filed with the FERC. 1984.......................... 2,402,000 - 19 8 5 - 2023 . . . . . . . . . . . . . . . . . . . . . 43,687,000 (2) Ohio Valley Electric Corporation (OVEC): The Company and Ohio Edison Company are partici- If all noncapitalized financingleases had been capitalized, pating with 13 other investor-owned electric utility the effect on total assets, total liabilities and expenses companies and with OVEC in arrangements with the would not be material. Department of Energy (DOE) to supply the power requirements of the DOE plant near Portsmouth, Ohio. The (5) Capitalization: sponsors are entitled to receive from OVEC, and are (a) Retained Earnings-obligated to pay for the right to receive, any available Under the Company's indenture, the Company's power in excess of the DOE contract demand.The proceeds retained earnings not available for payment of cash from the sale of power by OVEC are to be sufficient to dividends on the Company's Common Stock was meet all of its costs including amortization of debt capital S13,124,000 at December 31,1979. over a period ending December 31,1981, and to provide for a return on common stock. At December 31,1979, (b) Preferred Stock-OVEC had debt capital of approximately $24,000,000 The Company had 140,951 shares of preferred remaining to be amortized.The participation of the stock authorized and unissued at December 31,1979. Company in the power arrangements is 2E (3) Terminated Construction Projects: In January 1980, the Company and all other CAPCO companies terminated plans to construct the fe!! awing four nuclear generating units-Davis Besse No. 2 and No. 3, and Erie No. I and No. 2. The Company's share of con-struction costs incurred as of December 31,1979 applicable to these units amounted to $14,761,000. The Company 31
1 Notes to Financial Statements-Continued l The preferred stock is redeemable in whole or in As of December 31,1979, the sinking and improve. part,unless otherwise noted,at the option of the ment fund requirements and maturities of long term Company, at any time upon not less than 30 nor more debtfor each of the five years ending December 31,1980 than 60 days notice. through 1984 will amount to: Redemption of preferred stock (excluding the 198 0. . . . . . . . . . . . . . . . . . . . . . . . . SS,019,000 4.24% - 4.64% Series) is subject to certain restrictions 1981.......................... 7,019,000 regarding refunding operations for five years from date 1982.......................... 7.824,000 of issue. The current redemption prices shown will 1983.......................... 2,019,000 decline to eventual minimums per share in accordance 1984........................ . 2,069,000 with the Charter provisions establishing each series. (6) Notes Payable to Banks and Lines of Credit: (c) Redeemable Preferred Stock-The Company has lines of credit that provide for
, The 11% Sen,es m, eludes a provision for a rnandatory borrowings of up to S20,000,000 at rates varying from smkmg fund sufficient to retire a minimum of 4,000 prime to 108% of the prevailing prime interest rates. Short-shares at $100 per share plus accrued dividends on term borrowings may be made under these lines of credit !
January 1 m each year begmnmg m 1980. The 8.24% on unsecured notes of the Company. All of the current Senes meludes a provision for a mandatory smkmg fund i lines expire December 31,1980;however, all unused lines l sufficient to retire a minimum of 5,000 shares at S100 are cancelable at the option of the banks. I per share plus accrued dividends on December 1 in each year beginning in 1982. The Company maintains cash balances on deposit with the bank to provide operating funds and to assure avail. The sinking fund requirements for each of the f.ive ! ability of $4,500,000 of the above-mentioned lines of years ending December 31,1980 through 1964 will credit. Such compensating balances, net of " float", are amount to: expected to be maintained at an average of $320,000. These balances are not subject to any contractual restriction 1980................ ......... S400,000 against withdrawal. In addition, the Company is required to 1981.......................... 400,000 pay a commitment fee to assure the availability of an 1982.......................... 900,000 additional S4,500,000 of the above mentioned lines of 1983.......................... 900,000 credit. 1984.......... ............... 900,000 Additionalinformation with respect to these notes (d) Longterm Debt- 1
~ payable is as follows:
Substantially all property owned by the Company is subject to a direct first mortgage lien. jg7g gg7g interest rate on outstanding ; Based on the amount of bonds authenticated by the an ne ow ngs at trustee through December 31,1979, the annual sinking and improvement fund requirements amount to Mn er ...... .. 15.14% M S2,019,000. It is presently contemplated that these Maximum amount drawn ; requirements will be satisfied in 1980 by pcrmanently down during the year. . . . $19.500.000 S12.000.000 waiving the Company's right to issue bonds against Average borrowings during S2,019,000 of the $2,798,000 of retired bonds that are the year. . . . . . . . . . . . . S 8.083.000 S 2.913.000 presently available for that purpose. In the alternative, the Company could deposit funds in the amount called Weighted average interest for which could then be withdrawn upon surrender for rate during the year (based cancellation of a like principal amount of bonds on the daily amounts specifically authenticated for such purposes against outstanding-excluding unfunded property additions.The withdrawal of sinking . commitment fee). . . . . . . M85 8 1M and improvement fund deposits in this manner results in a minor increase in the amount of the annual sinking and improvement fund requirements for the Company. 32
Notes to Financial Statements-Continued l
' (7) Commitments, Guarentees and Contingencies: expenditures of approximately SS1,000,000 may be The currently estimated cost of property additions and required by the Company,of which approximately ,
improvements presently expected to be required by the $26,000,000 has been expanded prior to 1980 and ; Company during the period 19801984, inclusive,is $24,000,000 is included in the estimated construction costs approximately $251,481,000 of which $59,600,000 is for the 19801984 period referred to above if the use of ; applicable to the year 1980. The major portion of the low sulfur non Ohio coal is not permitted for compliance Company's construction activities during the 1980-1984 with Federal sulfur dioxide emission limitations at Sammis period relates to the CAPCO companies' program for the Unit No. 7, estimated capital expenditures would be joint development of power generation and transmission increased by approximately $26,000,000 and annual facilities. In connection with the future commercial opera- operating costs wouid be increased substantially. Similarly, tion of nuclear generating units, the CAPC0 companies if a flue gas desulfurization device must be installed at the have entered into commitments with respect to the supply Company's New Castle plant to comply with such emission of nuclear fuel. The Company's share of the cost associated limitations,it is estimated that the capital expenditures l with such commitments is estimated to be $230,000,000. would be increased by $85,000,000 and annual operating expenses would increase by approximately $15,000,000. The Company presently contemplates a financing lf the Company is required to install additional off-stream program during this five-year period which will include the cooling in connection with the operation of the New Cast!'e sale or issuance from time to time of appropriate additional plant and W. H. Sammis Unit No. 7, additional substantial amounts of first mortgage bonds, secured pollution control but presently undeterminable costs would be incurred, and environmental notes and obligations, preferred stock Although the Company is unable to predict the ultimate and common stock.The issuance of additional first results of the legal proceedings pending in Ohio and mortgage bonds and preferred stock is subject to the Pennsylvania relating to compliance with environmental limitation requirements of the Company's mortgage regulations or any additional capital and operating indenture and charter. expenditures that may be necessary as a result tnereof,it expects that the impact of any such costs eventually The Company, together with the other CAPC0 would be reflected in its rate schedules. companies, has made long-term coal supply arrangements with Quarto Mining Company (Quarto).The CAPCO in some proceedings, criminal fines or civil penalties companias have severally, and not jointly, agreed to ultimately could be imposed under the Clean Air Act l guarantee their proportionate shares of Quarto's debt Amendments of 1977 and the Federal Water Pollution l and lease obligations incurred in connection with Control Act as amended by the Clean Water Act of 1977 or developing and equipping the mines whether or not the the Company could be forced to shut down significant coal can be utilized because of environmental considerations. amounts of coal fired capacity.The Federal government has
)
As of December 31,1979, the Company's share of the begun legal proceedings against the Company under the ' guarantee was $30,702,000 ($11,619,000-long term Clean Air Act asking the courts to assess civil penalties for indebtedness, $11,681,000-lease obligations and alleged continuing violations of particulate emission regula- ! S7,402,000-short term bank credit), which is ultimately tions at the W. H.Sammis Plant and sulfur dioxide emission i expected to increase to S35,640,000 based on presently regulations at the Company's New Castle Power Plant. The l budgeted mine construction costs of $431,000,000. Clean Air Act amendmentswhich became effectivein August, I Because of significant difficulties experienced during the 1977, permit the imposition of civil penalties of up to i development period, the CAPC0 companies are reviewing $25,000 per day of violation. The penalties,if any, that the various alternatives available to reduce unit production may be imposed by the courts for alleged past violations are costs, which are presently in excess of the current spot not now determinable, but such penalties could be substan-market price of coal. Management believes that the costs tial. Ohio Edison, the operator of the Sammis Plant, and ; incurred in connection with this project will be recovered the Company expect to comply with any final orders of the 1 through the operation of the Company's energy clause or courts and in the meantime to conduct the operation of the l through base rates. plants so as to minimize the applicable emissions to the greatest extent that they deem to be practicable; therefore, The Company is subject to regulation with regard to air the litigation described above should not result in the I and water quality and other environmental matters by imposition of any substantial civil penalties for future l various Federal, state and local authorities. For compliance conduct. therewith,it is presently estimated that additional capital 33
Notes to Financial Statements-Continued The Federal Environmental Protection Agency (EPA) electric power. Damages of $7,000,000 (to be trebled) and had tentativeliindicated an intention to seek to enforce injunctions against the unlawful acts are sought. On noncompliance penalties beginning August 7,1979, for January 4,1979, the Court granted summary judgment in failure to comply with applicable emission limits, as required favor of the Company as to certain allegations of the com- ' under the Clean Air Act; however, final regulations have plaint. Management is unable to predict the ultimate out-not been issued. Even if the application to change the State come of this action. Implementation Plan which would bring the New Castle Power Plant into compliance and the submitted schedule On April 10,1979, Kerr McGee Nuclear Corporation to bring the Sammis Plant into compliance by 1984 are filed a complaint against the CAPCO companies alleging a accepted, substantial noncompliance penalties may result. breach of a 1973 urani~um supply contract, thus allegedly Until final regulations are issued, the date from which entitling Kerr-McGee to treat the contract as having been penalties will begin and the method of calculating such terminated. Kerr McGee also seeks unspecified damagas, penalties will not be known. costs and such further relief as the Court deems just and proper. If the uranium is not delivered by Kerr McGee, in addition, the following summarizes certain other steps will have to be taken to effect other arrangements, outstanding legal actions and complaints against the which may result in additional but presently undeterminable l Company: costs to CAPC0 members. On June 28,1979, the CAPC0 members filed a counteraction against Kerr-McGee Corpora-In 1977, the Borough of Shippingport, Pennsylvania, tion and Kerr McGee Nuclear Corporation seeking a filed actions against the CAPCO companies seeking to declaration by the Court as to the rights of the parties and a enjoin the operation of the Bruce Mansfield and Beaver . granting by the Court of the plaintiffs' costs and exemplary Valley plants and to obtain damages resulting from alleged damages due to defendants' attempt to extract price operational malfunctions of the flue gas desulfurization increases from the plaintiffs. systemat Mansfieldand the threat of radioactive emissions at Beaver Valley, in addition, numerousindividual plaintiffs The Commission instituted an investigation into an have filed actions seeking monetary relief in an unspecified outage of Beaver Valley Unit No.1 during the period amount for damages claimed to be the result of the same March August 1979,which outage had been ordered by the alleged operational malfunctions. Although unable to Nuclear Regulatory Commission to analyze possible seismic predict the ultimate outcome of the matter, the Company deficiencies of safety related piping and pipe supports in the believes that the ultimate disposition will not result in any Unit. This investigation is to determine whether, as a result material adverse effect on the Company's financial position of this outage, the Unit should be eliminated from, or and results of operations. adjustments should be made in, the Company's rate base and whether expenditures by the Company for purchased in 1977, the Boroughs of Ellwood City and Grove City, replacement power should be disallowed for purposes of , Pennsylvania, filed a complaint against the Cumpany, the Company's energy clause. In a separate investigation, l alleging that the Company, individually and in conspiracy the Commission is considering whether additional con-with Ohio Edison and other CAPC0 companies, has - struction costs resulting from deferral of construction violated Sections 4 and 16 of the Clayton Act to restrain projects should be excluded from rate base in subsequent and monopolize trade and commerce in alleged markets for rate proceedings.
. l 34
Notes to Financial Statements-Continued (8) Summary of Quarterly Financial Data: The following data summarize certain operating results for the four quarters of 1979 and 1978. Three Months Ended March 31, June 30, September 30, December 31, 1979 1979 1979 1979 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . . . $37,335 $35,444 $36,595 $35,966 Operating Expenses and Taxes. . . . . . . . . . . . 29,496 29,080 28,367 28,976 O perating income . . . . . . . . . . . . . . . . . . . . 7,839 6,364 8,228 6,990 Other income and Deductions, net . . . . . . . . . 1,363 1,510 1,646 1,773 Net Interest . . . . . . . . . . . . . . . . . . . . . . . . 3,355 3,592 3,717 3,848 Net income . . . . . . . . . . . . . . . . . . . . . . . . $_Q152. 1.4 282 j_j 1 1]l $_4 0.11 Net income for Common Stock . . . . . . . . . . . $ 4.687 g j_4 222 $_1159. Three Months Ended March 31, June 30, September 30, December 31, 1978 1978 1978 1978 Thousands of Dollars Operating Revenues. . . . . . . . . . . . . . . . . . S27,305 $26,352 $29,556 $35,905 Operating Expenses and Taxes. . . . . . . . . . . . 21.334 21,141 24,471 28,417 Operating income . . . . . . . . . . . . . . . . . . . . 5,971 5,211 5,085 7,488 Other income and Deductions, net . . . . . . . . . 857 1,282 . 1,163 1,508 , N e t I n te rest . . . . . . . . . . . . . . . . . . . . . . . 3,026 3,300 3,457 3,795 Ne t income . . . . . . . . . . . . . . . . . . . . . . . . }._1892. .f.119J .L2191 L12Q1 Net income for Common Stock . . . . . . . . . . . $ 2.637 123Zg }jdZg $_1925. 35
Auditors' Report AnTHUR ANDERSEN & CO. 1045 AVENUE OF THE AMERICAS l NEW YORK . N. Y. tOO19 To the Board of Directors of Pennsylvania Power Company: We base examined the balance sheets and statements of capitalization of Pennsylvania Power Company (a Pennsylvania corporation and a wholly-owned subsidiary of Ohio Edison Company) as of December 31,1979, and 1978, and the related statements of income and retained earnings and sources of funds for gross property additions for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly the financial position of Pennsyhania Power Company as of December 31, 1979, and 1978, and the results ofits operations and sources of funds for gross property additions for the years then ended,in conformity with generally accepted accounting principles applied on a consistent basis. February 8,1980 he _ua/ h A*t -'- # Y - 36
PENNSYLVANIA POWER COMPANY Supplements y Financial Data Financel Reporting and Changmg Prices Statement of Financial Accounting Standards No. 33,
Financial Reporting and Changing Prices"(SFAS No. 33),
provides for the preparation of :upplementary financial information to disclose the estimated effects of inflation and changes in prices on property, plant and equipment. Historical This data is presented in accordance with SFAS No. 33, As Reported Cost Adjusted for however,it is not intended as a substitute for earnings in the Adjusted for Change in reported on a historical cost basis. Primary General Specific Prices Statements inflation (Current Cost) Adjusted for the Effects of Changing Prices (Average 1979 Dollars) For the Year Ended December 31,1979 (in Thousands) O pe rating R even ues . . . . . . . . . . . . . . . . . . . . . . . . . . $145,340 $145,340 $145,340 Operating Expenses and Taxes: ; Operation and maintenance. . . . . . . . . . . . . . . . . . . . 85,730 85,730 85,730 Provision for depreciation. . . . . . . . . . . . . . . . . . . . . 12,517 22,373 24,123 G e ne ral ta x es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,296 10,296 10,296 Income tax es . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,376 7,376 7,376 Total operating expenses and taxes. . . . . . . . . . . . . . 115,919 125,775 127,525 O perating income . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,421 19,565 17,815 0ther income and Deductions, net . . . . . . . . . . . . . . . . 6,297 6,297 6,297 N et i n te rest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,512 14,512 14,512 Preferred Stock Dividend Requirements. . . . . . . . . . . . . 4,660 4,660 4,660 income from Continuing Operations (excluding reduction to net recoverable i c o st ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16.546 $ 6.690(a) $ 4.940 ) I Increase in specific prices (current cost) of property, plant and equipment held during* 1 th e y ea r (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 65,358 i Reduction to net recoverable cost. . . . . . . . . . . ... . $ (44,074) (20,374) Effact of increase in the general price level on property, plant and equipment . . . . . . . . ...... (87,308) Excess of incresse in the general price level over increase in specific prices of property, plant and equipment after reduction to net recoverable cost . . . . . . . . . . . . . . . . . . . . . . . . . . . (42,324) Advantage resulting from the decrease in purchasing power of net monetary liabilities. . . . . . . . 35,752 35,752 Net..................................... $ (8.322) $ (6.572) (a) including the reduction to net recoverable cost, the income (loss) from continuing operations adjusted for general inflation would have been $(37,384,000). (b) At December 31,1979, property, plant and equipment, net of accumulated depreciation, all adjusted for changes in specific prices (current cost) was $741,128,000, while historical cost (net cost recoverable) was $445,347,000. See Notes to Supplementary Financial Data on page 38. l l 37 l
PENNSYLVANIA POWER COMPANY Five Year Comparison of Selected Supplementary Financial Data Adjusted for the Effects of Changing Prices For the Years Ended December 31,1979 1979 1978 1977 1976 1975 Thousands of Dollars Operating Revenues !
- As reported in the primary statements. . . . . . . . . . . . . . . . $145,340 $119,118 $100,843 $ 89,583 $ 87,212 I Adjusted to average 1979 dollars . . . . . . . . . . . . . . . . . . . $145,340 $132,529 $120,789 $114,225 S117,617 l l
Historical Cost Information Adjusted for General inflation i (in Average 1979 Dollars)- 1 Income from continuing operations (excluding I reduction to not recoverable cost). . . . . . . . . . . . . . . . . . . S 6,690 Current Cost Information (in Average 1979 Dollars) Income from continuing operations (excluding reduction to net recoverable cost). . . . . . . . . . . . . . . . . . S 4,940
- Excess of increase in the general price level over increase in specific prices of property, plant and equipment after reduction to net recoverable cost . . . . . . . . . . . . . . . . . . S(42,324)
Other Information ~ Common stockholder's equity at December 31 at net recoverable cost (Average 1979 Dollars) . . . . . . . . . . . $146,947
. Advantage resulting from the decrease in purchasing power of net monetary liabilities (Average 1979 Dollars) . . S 35,752 Average consumer price index . . . . . . . . . . . . . . . . . . . . . 217.4 195.4 181.5 170.5 161.2 Notes to the Supplementary Financial Data The Consumer Price index for All Urban Consumers Whitman Index to a vintaged theoretical reserve for (CPI U) was used for converting historical amounts for depreciation.
property, plant and equipment into average 1979 dollars, thus giving an indication of the effect of general inflation income taxes . included in income from continuing opera-on the principal assets of the Company. tions adjusted for general inflation and for changing prices is the same as the provision reported in the primary Current cost of property, plant and equipment other financial statements, in conformity with SFAS No. 33. than land was ca!culated by applying the Handy-Whitman . Index of Public Utility Construction Costs for the North Dur.ing mflationary periods, the investment necessary to Central Division and the Bureau of Labor and Statistics P! ace property, plant and equipment will be more than engineering indices to functional accounts by vintage years, their original cost. Because the Company is permitted to except for large construction projects which were trended recover in revenues, through a depreciation allowance, only based on the year that costs were incurred. The current cost the historical costs of such assets, the addit,ional cost of of land was calculated by applying the CPI U to the actual plant as adjusted for @Jnging prices is indicated as a costs in the respective years of acquisition. The current cost "Fleduction to net recoverable cost." data approximately reflects the curren: cost of acquiring property, plant and equipment identical to assets currently Net monetary liabilit.ies of the Company consist owned
- primarily of long-term debt and preferred stock. Dur,mg inflationary periods, the Company will be repaying these Depreciation expense adjusted for general inflation and net monetary liabilities with dollars having less purchasing for changing prices was determined using the same rates and power than dollars had when the liability was originally methods used in calculating the provision in the primary incurred. The difference is indicated by the " Advantage financial statements. The accumulated provisions for resulting from the decrease in p:;rchasing power of net depreciation were estimated for each functional class of monetary liabilities."
property, plant and equipment by applying the Handy. 38
Pennsylvania Power Company Directors and Officers J. F. DUNLEVY JUSTIN T. ROGERS,JR. Vice President of the Company Chairman of the Board New Castle, Pennsylvania RAY E. SEMMLER J. R. EDGERLY President Secretary and General Counselof the Company, New Castle, Pennsylvania W. K. CONOVER Vice President D. BRUCE MANSFIELD Retired-formerly Chairman of the J.F.DUNLEVY Board and President of the Company Vice President Akron, Ohio W. F. REEllER V. A. OWOC Vice President Executive Vice President of the Company's parent, Ohio Edison M. L. WILSON Company, Akron, Ohio heasurer W. F. REEllER J. R. EDGERLY Vice President of the Company Secretary and General Counsel New Castle, Pennsylvania R. P. ARMSTRONG JUSTIN T. ROGERS,jR. Assistant Secretary and Assistant Chairman of the Board of the Com- heasurer pany, and President ofits parent, Ohio Edison Company, Akron, Ohio W. A.MARGRAF Assistant Secretary and Assistant W. II. SAMMIS heasurer Retired-formerly Chairman of the Board and President of the Com- ANGELINE COMPARONE - pany, Akron, Ohio . Assistant Secretary RAY E. SEMMLER DIVISION MANAGER President of the Company J. R. TOPPER New Castle, Pennsylvania Mercer County C. M. WillTTANER Mr. Rogers is president of the parent Retirec:-formerly Chairman of the company, Ohio Edison Company. The Board, Universal Rundle Corporation, principal employment of allother a plumbing fixture manufacturer, officers is with the Company. Alew Castle, Pennsylvania :l, REGISTRAR for Preferred Stock: M. L. WlLSON First Seneca Ba sk and hust Com. heasurer of the Company pany, Washington Centre, New Castle, Pennsylvania New Castle, Pennsylvania 16101 G. L WINGER TRANSFER AGENT Group Vice President-Foundries, for Preferred Stock: Midland-Ross Corporation, castings Office of the Company, manufacturer, Sharon, Pennsylvania New Castle, Pennsylvania 16103 GENERAL OFFICES: 1 E. Washington Street, New Castle, Pennsylvania 16103 l Pennsylvania Power Company is an equal opportunity employer. 39 , 1
Pennsylvtnia Power Company U. S. Postage
~ Annual Report Bulk Rate 1 E. Washington Street PAID New Castle, PA 16103 Permit No.158 New Castle, Pa.
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' CONTENTS d E Y
*I i s 1979 The year in profile. . ... 2 :
. Highlights . . . .... . 3
' - ;2 3E' . Brief Financial Summary . . . . 4 E
..e
,\,- - I 1 Money: where it came from. . .. 5 g ,
Report on Construction . .... . 6 L ,,' Serving Customers. . .. . 8
- Problems persist . .. . 11 Communications. . . . . . 14 e -
Lessons in leadership and safety. . . 16 5 I c--- Map . .... . .. . . ... 18 7~1 , . .* m,- Operating Statistics . . . . . .. . 19 yDidj j-fllW'^ %. i Financial Statistics. . . 20 y ro@9 gqs$ Q MONEY $ W: >~ , . ManagementDiscussionand Analysis. 2122 f% Kilowett4mur sales, reveness ;';' Financial Statements . . . . . . 23 25 29 Auditors
- Report. . . ... . . 36 fir @ltyiffpsose.
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