ML19209D094

Supplements Re NRC 790921 Request for Financial Info.Responses to Requests 1,2 & 9 Will Be Provided at Restart Meeting on 791017.Requests Ack of Receipt of Matl

ML19209D094
Person / Time
Site:	Crane
Issue date:	10/17/1979
From:	Hafer F GENERAL PUBLIC UTILITIES CORP.
To:	Vollmer R NRC - TMI-2 OPERATIONS/SUPPORT TASK FORCE
References
NUDOCS 7910190388
Download: ML19209D094 (17)

Text

.

GPU Service Corporation pmJ W

e 2e0 Cnerry siti soaa Pars;ppany New Jersey 07054 201 263-4900 October 17, 1979 Mr. Richard H. Vollmer Director, Three Mile Island-2 Support Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission 7920 Norfolk Avenue Bethesda, Maryland 20014 Re:

NRC Docket No. 50-289 TMI-l Restart Proceeding

Dear Mr. Vollmer:

Following up on my letter dated October 15, 1979, in re-sponse to the requests for financial information enclosed with your letter dated September 21, 1979 to R.

C. Arnold, enclosed are 8 copies of our response to Financial Information Request No. 3 (Pro Forma Sources of Funds Statements covering the period during which the TMI-l modifications will be made).

Responses to Requests No.

1, 2 and 9 are to be hand de-livered to you today by C. W.

Smythe of GPU at the TMI-l restart meeting in Middletown, Pa.

Also enclosed are 8 copies of a general statement by GPU in response to the NRC's financial information requests.

In conclusion, please acknowledge receipt of this material by signing, dating and returning the enclosed copy of this letter.

A stamped, pre-addressed envelope is enclosed for that purpose.

Sincerely, V

u D.

Hafer Vice President, Rate Case Management FDH:dmh Enclosures cc:

J. C.

Petersen - no attachments; to be distributed by NRC H. Silver - no attachments; to be distributed by NRC

)

\\

\\

7 91019 0 3 FF GPU Service Corocration is a sutsic:ary of Gereral uthe Utaties Ccrocrat:en

} } f') )b2

GENERAL PUBLIC UTILITIES CORPORATION Metropolitan Edison Company, Pennsylvania Electric Company and Jersey Central Power & Light Company NRC Docket No. 50-289 Three Mile Island Unit No. 1 Restart Proceeding Statement in Response to the NRC's Financial Information Requests Dated 9/21/79 The Commission's Order of August 9, 1979 directs in Item II-7 that the licensee "shall demonstrate his financial qualifications to the extent relevant to his ability to operate TMI-l safely." The questionnaire submit-ted appears to go well beyond that question.

Consequently, while the TMI-1 owners have endeavored to respond to all items of the questionnaire, they do not concede by submit-ting such responses that cil the data requested are relevant to the icsue posed by the Order and expressly reserve the right to contest the issue of the relevance and materiality of some of the inquiries presented.

The TMI-1 owners are major electric utilities with aggregate annual revenues for the 12 months ended September 20, 1979 of $1.4 billion.

While there are, and at all times will be, competing claims for available funds, there is no reasonable basis fot doubt that the TMI-1 owners would accord the first priority to the utilization of their resources to the safe operation of TMI-l and their other nuclear plants.

Their performance during the period subse-quent to the TMI-2 accident is a demonstration of that po'licy.

Promptly after that accident and on a continuing basis since that time, the TMI-2 owners have provided, without a moment's

\\\\15 553

hesitation, all the funds necessary - or possibly necessary -

to bring TMI-2 to a cold shut-down mode and to maintain it in that mode.

In the process, the TMI-2 owners have expended

$74 million through September, 1979.

The Pennsylvania and New Jersey public utility commissions have heretofore allowed the operating expenses for TMI-1 in their ratemaking determinations.

Recently, the Pennsylvania Public Utility Commission issued an order to Metropolitan Edison Company

(" Met-Ed") and Pennsylvania Electric Company ("Penelec"), two of the three owners of TMI-1, to show cause why TMI-l related costs should not be removed from their base rates in the light of your Com-mission's orders of July 2, 1979 and August 9, 1979 delaying the restart of TMI-1.

Met-Ed and Penelec believe that the delay in restart is not a proper basis for removing TMI-l costs from their base rates and have filed an answer to the order to show cause to that effect.

Regardless, however, of the outcome of that particular proceeding, the TMI-1 owners have every confidence that the Pennsylvania Com-mission and the New Jersey Board of Public Utilities (which regulates the rates of the third TMI-1 owner, Jersey Central Power & Light Company) would allow whatcver reasonable rate increases were necessary to assure the safe operation of TMI-1.

The action cf the Pennsyleania Commission and New Jersey Board in conducting expedited proceedings, in which 1175 534

. a they sat en bane to receive testimony as well as hearing oral argument, in orJer to take the actions necessary to enable the three companies to obtain the funds necessary for the purchase of power to replace TMI generation is a confirmation of the responsiveness of those bodies on that score.

If the issue were one of providing the funds neces-sary for the protection of the public health there can be no reasonable basis to doubt that they would be responsive within whatever time frame were required.

In that light, the detailed material sought by the questionnaires would appear to be essentially irrelevant.

In another respect, the questionnaire is trouble-some in that it implicitly ignores the fundamental impact of action of governmental agencies, starting with the Corumission, on the TMI-l owners' financial responsibility.

Prior to the entry cf the Commission's order of August 9, 1979, the TMI-1 owners made a number of sub-missions to the Commission.

In these submissions, they urged that, in establishing procedures for the considera-tion of IMI-l restart, the Commission take into account the National interest in limiting fuel oil imports and the outflow of foreign exchange and the economic inter-ests of the TMI-l owners and the four million residents whom they serve in permitting the restart of TMI-1 as soon as it could be determined that this was consistent with the public heath and safety.

They pointed out, for example, that replacement of TM1-1 generation requires the import 117 33C b

s

. 6 of seven million barrels of oil per year and associated outflow of foreign exchange and an economic cost to the TMI-1 owners and their customers of $168 million per year.

(The actions taken by the OPEC Nations since that time have increased this cost.)

The Commission's legal staff advised the Com-mission that it had authority to adopt procedures which permitted an early restart (see, for example, the memorandum, dated July 26, 1979, of the Commission's general counsel) but the Commission elected not to adopt such procedures.

As the TMI-1 owners have previously pointed out to the Commission, it is particularly troublesome that at none of the meetings of the Commission held to consider such procedures on July 12, July 24 (morning and afternoon), July 25, and July 27 was there any discussion 1; the Commission or its staff of the National and public interest in fashioning procedures which would allow the earliest possible decision on tne restart of TMI-l consistent with public participation in the making of the decision.

Indeed, although the TMI-l owners had urged by a letter delivered to the Commission on July 31, that the Commission schedule a special meeting at which representa-tives of the Department of Energy, the Pennsylvania Public Utility Commission, and the New Jersey Board of Public Utilities would be invited to address those considerations of National and public interest, the August 9 order was issued without the holding of such a meeting.

1175 336

-S-The Commission must be aware that these actions on its part have increased the problems of the TMI-1 owners and the burdens placed upon the public utility commissions which regulate their affairs, and ultimately upon the customers whom the TMI-l owners serve.

Given the alterna-tives that were available to the Commission, it is fair to suggest that, if there are any questions presented concerning the TMI-1 owners' financial qualifications to operate TMI-l safely (and the TMI-l owners believe that there should be no question), those questions are pre-dominantly raised and can be resolved by the Commission's actions.

The views of the TMI-1 owners on the issue posed by Item II-7 of the Commission's August 9 order can be summarized as follows:

1.

TMI-1 is an economic source of power which has had a superior performance record during the four and one half years of commercial operation prior to March 28, 1979; 2.

TMI-1 has demonstrated its significant value to ti.e Nation and to the region, and, when permitted to resume operation, should do so again; the TMI-1 owners and the public utility commissions have a sub-stantial interest in the safe operation of TMI-l as promptly as possible; 1175 337

-s-3.

The TMI-1 owners would necessarily take whatever action is required to enable TMI-1 to operate safely and to continue its significant contribution to the power supply and economy of the region served, and, for that purpose, would give first priority from funds available to them; and 4.

The TMI-1 owners have every reason to believe that the two State rate regulatory agencies would assure that funds were available and applied to that purpose.

10/17/79 1\\15 5,ha

2' Person Responsible for Preparation:

John G. Graham, Treasurer, GPU Service Corp.

Telephone: (201) 263-4900 x682 Da te : October 17, 1979 Page 1 of 11 GENERAL PUBLIC UTILITIES CORPORATION Metropolitan Edison Company, Pennsylvania Electric Company and Jersey Central Power & Light Com pany NRC Docket No. 50-289 Three Mile Island Unit No. 1 Restart Proceeding Response to NRC Staf f's Financial Information Request No. 3 Dated 9/21/79:

" Complete the attached form entitled, " Pro-Forma Sources of Funds,"

on a monthly basis for each licensee and GPU, through the month of estimated completion of long-term modifications and other actions related to Unit No. I as identified in the Commission's August 9, 1979 order.

Note that this statement is for system-wide expendi-tures including capital expenditures related to TMI-l and TMI-2.

Indicate the assumptions upon which the " Sources of Funds" state-ment is based. These assumptions include, but are not necessarily limited to: (a) rates of return on average common stock equity, (b) preferred stock dividend rates, (c) long-term and short-term debt interest rates, (d) market / book ratios, (e) common stock dividend payout ratios, (f) target and month-by-month capital structure, and (g) resultant monthly SEC and indenture coverages over the period.

Provide a brief explanation of the basis for each ass um p tion. "

Response

Enclosed are the requested " Pro Forma Sources of Funds" statements for GPU and its operating subsidiaries, Met-Ed, Penelec and Jersey Central, covering the forecast period from October, 1979 through Decembe r, 1980.

A listing of the assumptions on which these statements are based is also attached.

A preliminary budget estimate of the cost of the TMI-l modifications has been included in these statements because the estimate made in responding to the NRC's Financial Information Requests No. I and 2 has not yet been analyzed for the purpose of determining how much of the cost of modifying TMI-l will be expensed, and how much will be capitalized.

Once this determination has been made, a supplementary response incorporating the revised TMI-l modification cost estimate (i.e.,

the estimate made in response to Requests No. I and 2) will be submitted.

i175 339

Page 2 of 11 GENERAL PUBLIC UTILITIES SYSTEM FINANCIAL FORECAST - ASSUMPTIONS Forecast Pe riod October 1979 through December 1980.

TMI Units TMI-l returns to service 9/1/80.

TMI-2 out of service throughout pe riod.

Construction Reduced construction budget maintained through 1980.

Base Revenues The GPU System retains base revenues on TMI-1.

Penelec receives a $20 million annual increase effective 8/1/80.

Energy Adjustment Clauses Generally consistent with the ratemaking treatment demonstrated by both PUC's since the accident.

Current cost re-covery of the TMI replacement energy is not assumed because of the large increases in customer charges that would have re-sulted. The increase in energy clauses are:

JC - Jan. 1980:

$61 million repre-senting uncollected 1979 and 75%

of the gross of 1980 TMI replace-ment energy costs of 18 months.

- Mar. 1980: $45 million ($61 million on an annual basis) representing increases in fuel costs for non-TMI energy.

ME - Jan. 1980:

$38 million repre-senting 75% of the gross 1980 TMI replacement energy over 18 months and current recovery of other fuel increases.

PN - Jan. 1980:

$12 million repre-senting 75% of the gross 1980 TMI replacement energy over 18 months and current recovery of other fuel increases.

\\\\75 540

Page 3 of 11 Energy Costs Current oil prices used for 1979 and escalated in excess of 12% per year.

Does not reflect up to $30 million savings in 1980 from change in PJM Agreement.

TML #2 Restoration Insurance recovery lag of $60 million through 1981.

GPU Common Dividend Maintained at its current annual rate of $1.00 per share throughout period.

Subsidiary Dividend to GPU JC: None through 1980.

ME: None through 1980.

PN:

Payment of 100% of earnings above retained earnings of $40 million in 1979.

In 1980 payment of 90%

of earnings.

Capital Contributions to Subsidiaries None throughout period.

Financings JC:

Oct. 79 - $25 million FMB refinancing.

22.5 million FMB sale.

Interest Rates JC:

Oct. 79 - FMB sale at 11.625%.

Short-term debt at 12. 5.*4.

1175 34I

/

Page 4 of 11 GPU System Applicant: GPU Ccrporation Nuclear Plant : Three Mile Island Unit 1 Pro Forma Sources of Funds for System-Wide Construction Expenditures 6 Capital Structure

($ Millions) 1979 Oct.

Nov.

Dec.

Total External Financings Common Stock Preferred Stock Long-Term Debt 47 47 Notes Payabic (32) 2 13 (17)

Contributions f rom Parent (Net)

Other Funds (Temporary Investments) 2 24 20 46 Total External Funds 17 26 33 76 Internally Generated Cash Net Income 11 10 11 32 Less:

Preferred Dividends (5)

(4)

(2)

(11)

Common Dividends (15)

(15)

Retained Earnings 6

(9) 9 6

Deferred Taxes 6

5 6

17 Investment Tax Credits (Net)

(3)

(3)

(2)

(8)

Depreciation & Amortization 13 13 13 36 Change in Working Capital

• 22 (9)

(27)

(14)

Le ss : AFDC (4)

(4)

(4)

(12)

Total Internal Funds 40 (7)

(5) 28 Total Funds 57 19 28 104 Construction Expenditures Nuclear Power Plants 13 10 17 40 Other 12 13 13 38 Total Construction 25 23 30 78

_ 12)

Less:

AFDC (4)

(4)

(4)

(

Net Construction Expenditures 21 19 26 66 Other Capital Requirements Redemption of Maturing Bonds 36 36 Sinking Fund Redemptions 2

2 Total Other 36 2

38 Total Capital Requirements 57 19 28 104 Capital Structure - %

Long-Term Debt 53 53 53 Preferred Stock 13 13 13 Common Equity 34 34 34 Total 100 100 100

• Includes Increase (Decrease) in Deferred Energy 7

6 10 23_

Deferred Energy Balance 159 165 175 175 Return on Average Common Equity 7.3%

1175 342

=.

GPO System Applicant-GPU Corporation Nuclear Plant: Three Mile Island !' nit 1 Pro Forma Sources of tuuds for Syst em-Wide Const ruct ion t.xpend it ures & Capital Structure

($ Millions) 1980 Jan.

teb.

Mar.

Apr.

M J une July h

Sept.

Oct.

f.ov.

Dec.

Total External Financings Cummon Stock Preferred Stock long-Term Debt

.btes Pa ya b le 5

23 18 25 15 19 (1) (18) 14 (31)

(8)

(11) 50 Con t r i b ut io n s from Parent (Net)

Other Funds (Tem;sorary Investments)

(10) 7 (8) 24 16 (1)

(5) 10 (9)

(10) 12 7

33_

Total External Funds (5) 30 10 49 31 18 (6)

(8) 5 (41) 4 (4) 83 Interrally Generated Cash

'et ince=e 14 13 11 9

8 8

12 13 11 10 10 11 130 Less: Freferred Dividends (5)

(4)

(3)

(5)

(4)

(2)

(5)

(4)

(3)

(4)

(3)

(2)

(44)

Coe.mo n Dividends (15)

(15)

(15)

(15)

(60)

Re ta ined Earnings 9

(6) 8 4

(11) b 7

(b) 6 6

(6) 9 20 Deferred Taxes 19 13 12 3

3 5

5 5

(6)

(2)

(3) 3 57 investment Tax Credits (Net)

(3)

(2)

(3)

(3)

(3)

(3)

(2)

(3)

(3)

(2)

(2)

(2)

(31)

Deprec iat ion & A,nortization 12 12 13 14 13 14 14 14 14 14 14 14 162 Change in working capital *

(4)

(24)

(18)

(47)

(11)

(11) 11 21 14 48 23 2

4 Le ss : AF DC (4)

(3)

(4)

(3)

(4)

(3)

(4)

(3)

(4)

(3)

(4)

(4)

(43)

Total Internal Funds 29 (10) 8 (32)

(13)

H 31 28 23 61 20 22 115_

Total Funds

?4 20 la 17 18 n

25

.' o

?x 20 is

?w Const ruction Expendit ures uclear Powe r Plant s 9

11 9

7 7

8 6

8 13 7

6 7

93 other 10 12 11 12 15 20 20 14 17 14 th 13 174 Total Cons t ruc tion 19 23 2u 19 22 26 20 22 30 21 22 2U 2 77-Less: AF DC (4)

(3)

(2 )

(3)

(4)

(3)

(4)

(3)

(4)

(3)

(4)

(4)

(43)

Le t Const ruc tion Expenditures 15 20 lo 16 la 25 22 19 26 18 16 16 229 other Capital Requirements heae:ption of %turing Bond s 9

2 5

16 Sinking Fund Redemptior. -

2 1

1 1

1 2

2 1

2 13 Total other 9

2 1

1 1

2 2

n 2

29 Total Capital Requirements 24 70 lx 17 IM

/6 25, 20

?x

?o 24 18 2%

Capit al St ruc t ure - %

t.ona-Term Debt 53 53 53 53 53 53 53 53 53 53 53 53 Preterred Stock 13 13 13 12 12 12 12 12 12 12 12 12 Common Equity 34 34 34 35 35 35 35 35 35 35 35 35 s

Total 100 100 100 100 luo 100 100 t a lo too 100 loa 100 A

q

• Includes Increase (Decrease) in

?

LAferred Energy 36 25 18 1

3 6

5 (21)

(10)

(11) 1 53 E

%)'

u Deferred Energy Balance 211 236 254 255 255 258 264 269 248 233 227 228 228 tN p,

Ee t i i on Average Common Equity W.

6.2%

t Page 6 of 11 GPU System Appl. cant: Jersey Central Power & Light Company Nuclear Plant : Three Mile Island Unit 1 Pro Forma Sources of Funds for System-Wide Construction Expenditures & Capital Structure

($ Millions) 1979 Oct.

Nov.

Dec.

Total Exterr.al Financings Common Stock Preferred Stock Long-Term Debt 47 47 Notes Payable (29)

(3) 25 (7)

Contributions from Parent (Net)

Other Funds Total External Funds 18 (3) 25 40 Internally Generated Cash Net Income 7

5 6

18 Less:

Preferred Dividends (5)

(5)

Common Dividends Retained Earnings 2

5 6

13 Deferred Taxes 1

1 2

4 Investment Tax Credits (Net)

(1)

(1)

(1)

(3)

Depreciation & Amortization 6

6 6

18 Change in Working Capital

• 15 7

(17) 5 Less:

AFDC (3)

(4)

(3)

(10)

Total Internal Funds 20 14 (7) 27 Total Funds 38 11 18 67 Construction Expenditures Nuclear Power Plants 11 9

14 34 other 5

6 6

17 Total Construction 16 15 20 51 Le s s :

AFDC (3)

(4)

(1)

(10)

Net Construction Expenditures 13 11 17 41 Other Capital Requirements Redemption of Maturing Bonds 25 25 Sinking Fund Redemptions 1

1 Total Other 25 1

26 Total Capital Requirements 38 11 18 67 Capital Structure - %

Long-Term Debt 51 51 51 Preferred Stock 12 12 12 Common Equity 37 37 37 Total 100 100 100

• Includes Increase (Decrease) in Deferred Energy 1

4 5

Deferred Energy Balanet 81 82 86 86 Return on Average Common Equity 8.6%

Interest Coverage Ratio 2.07 Preferred Stock Coverage Ratio 1.45 1\\75 h44

=

CPU System Apolicant: Jersey Cent ra l Power & Light Co.

Nuc lear Plant : Three Mile Island Unit 1 Fro Forma Sources of tunds for Systen-Wide Construction Expenditures 6 Capital Structure

($ Niilions) 4 1980 Jan.

feb.

Mar.

Apr.

M June Julv Aug.

Sept.

Oct.

!.ov.

1)c c.

Total External Financines C.av n b t oc k

^

l're terred stuc k Long-Tera Debt iotes Payable 3

15 9

9 7

7 (25) 7 (23)

(16) 13 6

Contributions from Parent (Net)

Other Funds Total External Funds 3

15 9

9 7

~7 (25) 7 (21)

(16) 13 6

Internally Generated Cash

.e t Income 6

6 4

5 4

5 8

9 8

7 5

5 72 Le s s : ITeferred Dividends (5)

(5)

(5)

(4)

(19)

Com m o n Div id end s hetained Ea rning s 1

6 4

4 5

3 9

6 3

5 5

53

eferred Taxes 10 8

5 (1)

(1) 1 I

2 (5)

(2)

(2)

(1) 15 Investment Tax Credits (t.ct)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(12)

Deprec iat ion & Anortiza tion 5

5 6

7 6

7 7

7 7

6 7

6 76 Change in Working Capital *

(6)

(21)

(11)

(4)

(3)

(4) 5 19 (2) 26 IS (12) 5 Le s s : AFDC (3)

(3)

(3)

(3)

(4)

(3)

(3)

(3)

(3)

(3)

(3)

(3)

(37)

Total Internal Funds 6

(6)

(2) 1 5

1/

33 4

29 24 (n)

IN Total Fund s 9

9 9

7 x

11 1/

x 11 6

x 7

los Construction Expenditures a lear Powe r Plants b

8 6

5 6

6 5

6 10 5

5 4

72 Ut L..

4 4

4 5

6 8

8 4

4 4

6 5

62 total Construction 10 12 10 10 12 14 13 10 14 9

11 9

134 Le n

.u'vC (3)

(3)

(3)

(3)

(4)

(3)

(3)

(3)

(3)

(3)

(3)

(3)

(37)

et Const ruc tion Expenditures 7

9 7

7 6

11 10 7

11 o

6 o

{

Ot!'er Capital 8equirerents Ke r-ption or

.a t n r i n<

bo nd s 2

2 4

S t u k i n j; Ford Medemptions 2

1 1

1 5-

'lutal Other

_2 2

1 2

1 1

9 T.>tal Capi tal Kequi re:nent s 9

9 9

7 8

1.!

12 x

11 6

x 7

10%

Capital Structure - %

Lon;-lerm Mt 51 51 50 50 50 50 50 50 50 50 49 49 Pref erred Stock 12 12 12 12 12 12 12 11 11 11 12 12 Common Equity 37 37 38 38 38 38 38 39 39 39 39 39 Total 100 li io la' li n.

100 leo too 100 lea 10, ii.,

i i.o

• I nc l ud e s Increase (Decrease) in

[

s Icterred Energy

_2' 17 10 (3)

(3) 1 2

3 (11)

(5)

(4)

(1) 27 c

s

~

De fer red Energy Balance 107 124 134 131 128 129 131 134 123 118 114 113 113 o,

.>l

=

Eeturn on Average Common Equity 7.9%

j Interest Cove rar,e l<a t io 2.14 Preterred Stock Coverage Ratio 1.'31 U1

Page 8 of 11 GPU System Applicant: Metropolitan Edison Company Nuclear Plant: Three Mile Island Unit 1 Pro Forma Sources of Funds for System-Wide Construction Expenditures & Capital Structure

($ Millions) 1979 Oct.

Nov.

Dec.

Total External Financings Common Stock Preferred Stock Long-Term Debt Notes Payable (4) 7 (15)

(12)

Contributions from Parent (Net)

Other Funds Total External Funds (4) 7 (15)

(12)

Internally Generated Cash Net income 2

2 3

7 Less:

Preferred Dividends (2)

(2)

Common Dividends Retained Earnings 2

2 1

5 Deferred Taxes 4

3 3

10 Investment Tax Credits (Net)

(1)

(1)

(2)

Depreciation S Amortization 3

3 3

9 Change in Working Capital *

(11) 13 2

Le s s :

AFDC (1)

(1)

Total Internal Funds B

(5) 20 23 Total Funds 4

2 5

11 Construction Expenditures Nuclear Power Plants 1

1 2

4 Other 3

2 3

8 Total Construction 4

5 12 Less :

AFDC (1)

(1)

Net Constructicn Expenditures 4

2 5

11 Other Capital Requirements Redemption of Maturing Bonds Sinking Fund Redemptions Total Other Total Capital Requirements 4

2 5

11 Capital Structure - %

Long-Term Debt 51 51 51 Preferred Stock 13 13 13 Common Equity 36 36 36 Total l00 100 100

• Incl ud e s Increase (Decrease) in Deferred Energy 7

6 5

18 Def erred Energy Balance 64 70 75 75 Return on Average Common Equity 5.3%

Interest Coverage Ratio 1.89 Preferred Stock Coverage Ratio 1.30

{\\

GPU System Applicant: Metropolitan Edison Comgany Nucicar Plant : Three Mile Island Unit 1 Pro Forma Sources of Funds for System-Wido Const ruc tion Expendit ures 6 Capital Str uc t ure

($ Millions) 19tio Jan.

Feb.

tu r.

Apr.

M June July Auc.

Sept.

Oct.

Nos.

Dec.

Total 11ternal Financinas Common dtod Preterred Stock Long-Term Debt Notes Pa ya b l e I

b 15 1

8 (2) 5 (9)

(1)

(31)

(4)

Contributions t rom Parent (Net)

Ott.e r r unds Total External Funds 1

1 b

15 1

e (2) 5 (v)

(1)

(31)

(4)

Internally Generated Cash Set income 4

4 3

2 1

1 2

1 2

2 22 Icss: Freferred Dividends (3)

(2)

(3)

(2)

(10)

Common Dividen.'s Ketained Ea rn ing s 4

4 2

1 (2) 1 2

(s) 1 2

12 De ter red Taxes 4

3 3

3 3

3 2

3 1

(1) 1 25 Investment Tax Credits (Net)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(9)

Deprec ia t ion & Amortization 3

3 3

3 3

3 3

3 3

4 3

4 38 Change in Working Capital *

(5)

(9)

(19)

(4)

(8) 1 (4) 4 7

8 30 t

Les s : M DC (1)

(1)

(2)

Total Internal Funds 10 4

(4)

(12) 1 (4) 6 3

3 12 11 35 65 Total Funds 11 5

4 1

7 4

4 1

M 9

10 4

61 Construction Expenditures Nuclear Power Plants 2

2 2

1 1

1 1

1 2

1 1

2 17 Ot i.e r 2

3 2

2 2

3 3

2 4

3 3

2 31 Total Construction 4

5 4

3 3

4 4

3 6

4 4

4 46 le s s M DC (1)

(1)

(2) et Const ruc tion Expenditures 4

5 4

3 2

4 4

3 6

3 4

46 Other Capital Req ui renent s Etdemption ut u turing Bonds 7

5 12 Sinking fund Pedemptions 2

1 3

To r a l Ot he r 7

2 0

15 Total Capital Requirement.

11 5

4 3

2 4

4 4

x 4

lo 4

61 Cayital St ruct ure -I long-rerm Debt 51 51 51 51 51 51 50 50 50 50 50 Prererred stoc k 13 13 13 13 13 13 13 13 13 13 13 13 Cce. con Equity 35 36 36 36 36 36 36 37 37 37 37 37 Total I'o 1h0 lon 100 IUU 100 in" Ino 100 100 loo IM

• I nc i t.d e s Increase (Decrease) in Def ttred Energy 7

5 4

3 4

3 3

4 (4)

(2)

(4)

(1) 22 2

N I

y, De f e r red Energy Balar.ce H2 87 91 94 98 101 104 108 104 102 98 97 97 e

C~

Return on Average Common Equity 3.2%

U Intere t Cov e r a g,e Ratio 1.76 M*

/ refer w' Stock Coverage Ra t io 1.12 N

Page 10 of 11 GPU System Applicant: Pennsylvania Electric Company Nuclear Plant: Three Mile Island Unit 1 Pro Forma Sources of Funds f or System-Wide Construction Expenditures 6 Capital Structure

($ Millions) 1973 Oct.

Nov.

Dec.

Total External Financings Common Stock Preferred Stock Long-Term Debt Notes Payable Contributions from Parent (Net)

Other Funds (Temporary Investments) 2 24 20 46 Total External Funds 2

24 20 46 Internally Generated Cash Net Income 3

4 3

10 Les s :

Preferred Dividends (4)

(4)

Common Dividends (18)

(18)

Retained Earnings 3

(18) 3 (12)

Deferred Taxes 1

1 1

3 Investment Tax Credits (Net)

(1)

(1)

(1)

(3)

Depreciation & Amortization 4

4 4

12 Change in Working Capital

• 7 (5)

(21)

(19)

Less:

AFDC (1)

(1)

To tal Internal Funds 14 (20)

(14)

(20)

Total Funds 16 4

6 26 Construction Expenditures Nuclear Power Plants 1

1 2

Other 4

5 4

13 Total Construction 5

5 5

15 Less :

AFDC (1)

(1)

Net Construction Expenditures 5

4 5

14 Other Capital Requirements Redemption of Maturing Bonds 11 11 Sinking Fund Redemptions 1

1 Total Other 11 1

12 Total Capital Requirements 16 4

6 26 Capital Structure - %

Long-Tenn Debt 54 54 54 Preferred Stock 13 14 14 Common Equity 33 32 32 Total 100 100 100

• Incl ud e s Increase (Decrease) in Dcierred En. rgy (1) 1 Deferred Energy Balance 14 13 14 14 Return on Average Common Equity 9.5%

Interest Coverage Ratio 2.74 Preferred Stock Coverage Ratio 1.54

=

GPU System Applicant: Pennsylvania Electric Company Nuclear Plant :

'Ibree Mile Island Unit 1 Pro Forma Sources or k unds f or System-Wide Construction Expendituies & Capital St ructure

($ Millions) 1980 Jan.

M.

Har.

Apr.

g J une J uly Aug.

Sept.

Oct.

Nov.

Dec.

Total External Financincs Common Stock Pre f e r red Stoc k Lc og-Te r:n Debt Notes Pa ya ble 4

4 Cont r ib ut ions from Tarent (Net)

Other Funds (Temporary Inveuments)

(10) 7 (8) 24 16 (1)

(5) 10 (9)

(10) 12 7

33 Total External Funds (10) 7 (8) 24 16 (1)

(5) 10 (9)

(10) 12 11 37 Internally Generated Cash et income 5

5 5

5 4

4 4

4 4

4 5

5 54 Le s s :

l' referred Dividends (4)

(4)

(4)

(3)

(15)

Commoa Dividends (9)

(9)

(9)

(8)

(35)

Retained Earnings 5

(8) 5 5

(9) 4 4

(9) 4 4

(6) 4 le t erred Taxes 5

2 4

1 1

1 2

(1)

(1) 3 17 Investment Tax Credits (Net)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(1)

(6)

Depreciation 6 Anortization 4

4 4

4 4

4 4

4 4

4 4

4 46 Change in Working Capital

• 2 1

2 (26)

(4) 3 6

4 12 14 (3)

(14)

(3)

Le s s : AFDC (1)

(1)

(1)

(1)

(4)

Total Internal Funds 15 (2) 14 (17)

(It" 11 15 (2) 19 20 (5)

(4) 54 Total F und s 5

5 6

7 6

to 10 x

to 10 7

7 91 Const ruc t ion Expendit ures iclear rower Plants 1

1 1

1 1

1 1

1 1

9 Uther 4

5 5

5 7

9 9

8 9

7 7

6 81 Total Const ruc tion 5

6 6

b 7

10 9

9 10 6

7 7

9J Le s s : AF DC (1)

(1)

(1)

(1)

(4)

'et Const ruction Expenditures 5

5 6

6 6

10 9

6 10 6

7 6

to ot'er Capital Requirements Redemption ut Naturing Bond s Sinking Fund Redem pt io ns 1

1 2

1 5

Total Other 1

1 2

1 5

Total Capital Requirements 5

5 6

7 6

10 10 8

pi lo 7

7 91 Ca :'i t a l Structure -

ucc-Iccm o. t> t 54 54 54 54 54 5.

54 54 54 54 54 54 Preterred Stock 13 14 14 13 14 13 13 14 13 13 13 13 Cman Equity

_33 32 32 33 32 33 33 32 33 33 33 33 Total l i :o 100 100 100 100 100 loa 100 100 leo too luo

• Includes increase (Decrease) in s

Deferred Ehergy 8

3 4

1 (1)

(1) 1 (2)

)

(3)

(3) 3 4

[

q c

ikterred Energy P.alance 22 25 29 30 29 28 29 27 21 1R 15 18 18 U._ t Re t urn un Average Common Equit y 9.5%

W Intere t Coverage Ra t io 2.70

~

p Preterred Stock Coverage Ratio 1.51 d