ML19282A038
| ML19282A038 | |
| Person / Time | |
|---|---|
| Site: | Black Fox |
| Issue date: | 05/09/1979 |
| From: | PUBLIC SERVICE CO. OF OKLAHOMA |
| To: | |
| References | |
| NUDOCS 7905090359 | |
| Download: ML19282A038 (39) | |
Text
{{#Wiki_filter:. .. THIS DOCUMENT CONTAINS P00R QUAUTY PAGES PUBLIC SERVICE COMPANY OF OKLAHOMA A CENTRAL AND SOUTil WEST COMPANY Annual Report 1978
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Early in 19'9, neady 800 employees will begin their ( . ,. ,' move into PSO's new headquarters in downtown Tulsa-thehistoricCentralHighSchoolbuilding.The move will bring greater etliciency through consolida-tion of operations. The interior of the Tulsa landmark R.,g ,f
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has been remodeled to accommodate employees 10-cared on 27 floors in seven different buildings. Ex. terior design is retained with changes limissY primar-sly to windows and doorways. Significant savings
;r through energy conservation will be achieved with s 3 ,bM" the building's new look.
C~aN@dfJfl CONTENTS Highlights 1978 i President's Letter . 2 The Use of Electricity 4 Customer Service . 8 Rates, Regulation, Legislation, Negotiation . 10 System Expansion . 12 Fuels for Generating Electricity 16 PSO People 18
.\tanagement Discussion and Analysis of Summary of Operations 20 Consolidated Statements of Income and Retained Earnings 23 Consolidated Balance Sheets 24 Statements of Cansolidated Funds Provided for Gross Additions to Electric Utility Plant 26 Notes to Financial Statements 2' Auditors' Repost . 32 Comparative Ten year Statistics . 34 Public Service Company of Oklahoma Directors . 36 Public Service Company of Oklahoma Officers 36 Transok Pipe Line Company Otficers 36 Ash Creek .\ lining Company Officers 36 Public Service Company of Oklahoma Fiscal Agents . 36 Towns and Cities Served 3-This report is prepared primanly for the informatson of secunty holders of the Company and is not transmstred un connection u ith the sale ofany secunty or the snt statson to buy any secunty. Copies of thefinancsal statements of the Company included in thss report are avastable generally to all secunty holders of the Company, and a copy uilt be massed upon request to any secunty ho.' der or unterested party.
A copy of the Company's prrm 10-K. requsred by the he. cunties and Exchange Commissson. can be obtauned by trriting to Dennis M. Sharkey. Controller. Public Sert tce Company of Oklahoma. P O. Box 201 Tulsa. Oklahoma.
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Public Service Company of Oklahoma 212 East 6th Street Tulsa, Oklahoma 74119
Highlights 1978 Two Years Compared 1978 197- *a Increase Total Electric Revenues $ 439,925,831 s 368.669,183 19.3 Total Operating Expenses (Other than Taxes and Depreciation) 288,549,427 244."18,254 1 .9 Federal State and Local Taxes 61,951,545 49.840.828 24.3 Depreciation 26,073,725 25.036.988 4.1 Net income 52,526,611 34,651, 61 51.6 Plant Additions 200,325,187 126,084.802 58.9 Investment in Electric Plant 1,129,615,373 938.351.646 20.4 Total Kilowatt. Hour Sales 15,423,654,000 14,168.085,000 8.9 OUR 1978 REVENTE DOLL \R liow it was earned: How it was spent: Residential Customers 30.37 54.4G Fuel and Purchased Power Sales for Resale 29.99 14.19 Taxes Other 2.09 6.27 Wages and Employee Benefi 3* , Commercial Customers 21.0 7 7.59 Stockholders (for use of the money) Industrial Customers 16.8 7 5.9 T Depreciation 2.59 Interest 5.09 .staterials and supplies 4.47 Invested in New Property ( Earnings Invested) N
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- Excludes parmit t.nes. reages and employee benefsts charged to con.structton 1
President's Irrter We can mark 1978 as one of the most memorable The year brought some major victories in our years in our Company's history, efforts to build Black lox Station. We received a Several features are prominent on the profile of number of necessary permits from county, state the year: and federal agencies. The highlight came on July
= Kilowatt hour sales, revenues and net in- 26 when the Nuclear Regulatory Commission is-come all showed substantial increase over the sued a Limited Work Authorization ( LWA). Non-previous year. safety related work permitted by the LWA got a Construction of our coal fueled units at underway the next day. Attendance at a ground-Northeastern Station progressed toward breaking on the site in August showed that wide scheduled completion dates. support exists for Oklahoma's first nuclear power
- Work began on Black Fox Station under a station.
long awaited Limited Work Authorization. Interrenors continued to harass the project. e Steps were taken that further improve our They continued to bring up extraneous and im-ability to quickly and effectively respond to cus- material issues at public hearings. They appealed tomers' needs. decisions in the courts. As the LWA brought the Looking at our 1978 earnings picture we see first tangible signs of construction, foes resorted the hot, dry summer that spurred record electric to still another tactic designed to attract adverse use by PSO's retail customers. And we see the publicity toward nuclear power - unlawful tres-bitter winter weather that in concert with the pass of the construction site. national coal strike brought heavily increased Intervenor actions and the slow pace of the sales by PSO to other electric systems. regulatorv process promise further delays for In addition to weather, the earnings picture Black Fox. Our nation's leaders continue to urge reflects other less apparent but important utilities to install new coal and nuclear plants but elements. at the same time continue to add to the problem 60 was serving i1,453 new customers at the with unrealistic environmental regulations. end or 1978, a 3 percent gain for the year. Delay of construction progress and continued Fuel prices were fairly stable throughout the lack of leadership at the national level will con-year, reducing the amount of unrecovered fuel tinue to add to the already high inflation level for costs resulting from the two month lag in recov- cost of electricity and all other products. ery of these costs through the Fuel Cost Adjust- Black Fox safety hearings before the Atomic ment Clause. Also, fuel cost recovery provisions Safety and Licensing Board were completed in in our contracts with the Grand River Dam Au- 31 arch 1979. We expect to receive a full Con-thortty and the Southwestern Power Administra- struction Permit later in the year. tion u ere more realistic. Our units fueled by coal and uranium will en-Otr electric rates incieded the 56.4 million able us to provide adequate electric service in the incre.ne granted us by the Corporation Commis- face of growing customer demand and the sien Icre in 197- federally-mandated phascout of natural gas as Findy, Allowance for Funds Used During Con- boiler 'uel. structi n ( AFUDC). net of income tax. made up Increasing capital investments will be required about 21.4 percent of 19 8 earnings. AFUDC is a as we move ahead with the construction of Black non-cash income item representing the cost of Fox Station. the Northeastern Station coal units money used to finance construction. and other necessarv facilities to serve new and Our construction activity in 19 8 continued to existing customers. center on efforts to provide our customers elec- In 19 8 Central and South West Corporatien. tricity generated with coal and uranium fuels. our parent company, i3 sued ,541,1 5 shares of The first of two coal-fueled units at Northeast- new common stock. Central and South West in-ern Station will go into operation inJune 19 9. on vested $60 million of such funds in PSO in the schedule. The second is expected to meet its form of a capital contribution. Also. PSO issued scheduled 1980 completion date. 5 0 million of project bonds and 534 million of 2
pollution and environmental control bonds. Of brought back from customers are helping us im-the $34.' million of pollution and environmental prove the service we provide. control bonds, approximately 518." million was Customer comments led to the establishment spent in 19'8 on qualifying expenditures with the of our Average 31onthly Payment ( AM P ) plan. It is remainder available for 19-'9 and 1980 expendi- designed to help customers soothe the sting of tures. Considermg the retirement of $10.8 mil- their peak use bills. lion of bonds, PSO received a " net" $137.9 mil. Starked improvement in handling customer lion from investors. requests and problems came after the Tulsa Re-Retained earnings increased $19.5 million from gion Customer Information Center was re-net income after the payment of common and vamped. preferred dividends. Under Internal Revenue These and other events of the year will be Service Codes, PSO was able to " retain" $30.0 discussed in detail elsewhere in this report. million in deferred tax expense in the form of W. B. Carpenter, senior vice president - investment tax credits and other deferred taxes. Finance, and J. E. Daley, vice president - Law, For cash purposes, the Company also was able to were welcomed to the Company's board of direc-retain 533.2 million charged to depreciation ex- tors. They filled vacancies created when W. J. pense. Other funds declined $20.3 million, result- Bovaird chose not to stand for re election and R. ing in $200.3 million in gross additions to utility L lawrence retired as a director. plant. As always, the year's record of accomplishment in 1979, PSO's estimated construction program was built by peopic. . people working together in will be even larger - about $242 million,includ- a common cause. Because we are blessed with a ing AFUDC. At this time we anticipate receiving group of men and women who are dedicated to approximately 5150 million from outside inves- serving our custcmers, our communities and our tors in the form oflong term financing to support stockho!de s, we look forwarri to the future with our construction program and to retire $54 mil- enthusiasm and confidence. lion in maturing long-term debt. We expect to file for a rate increase for our retail customers shortly For the Board of Directors, aher the first coal unit is placed in service to cover the cost of that plant. Last summer, the Company filed with the Fed-jg eral Energy Regulatory Commission an applica. R. O. Newman tion to increase rates to our wholesale customers. Alarch 6,1979 Subsequently, we were successtui in negotiating a settlement agreement with these customers for a $1.4 million increase. InJanuary 1979, we began q v , collecting these settlement rates, subject to re- - Lg _ I fund, while awaiting final commission approval of - the agreement. 1 M' 5 Improving communication with our custom-ers in order to be as responsive as possible to h MD ' 8%
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~8' their needs remained a continuing objective. We Q. w p:3' ' i made notable progress. p _._j q Through our Customer Contact Program, we f*3 , ,
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'N3 tary basis as our customer contact representa-tives. The comments and suggestions they
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THE USE OF ELECTRICITY Retail Use, Off-System Demand Boost Kilowatt-Hour Sales Sales from PSO's system in 1978 totaled 15.4 bil- factor. So was a 2.9 percent gain in new lion kilowatt hours, up 8.9 percent over 19-- customers. Key factors in the year's kdowatt hour sales industrial sales of 3 billion kilowatt hours were results were a continued increase in consump- 6 percent higher than in 19- , Pace >etters in the tion by our retail customers and substantial off- industrial sector included forestry products, glass system sales. manufacturing, zink and steel production, aero-Con 3umption by retail customers was up 7.6 space and commercial aviation, and petroleum-percent to 9.3 billion kilowatt hours. based industries. Electric energy sales to other systems for resale by them showed a 10.8 percent increase. This was Area development steady due to the extremely cold weather over a large During 1978, 75 new plant construction and ex-part of the country through the first few months pansion projects were completed in PSO's ser-of the year and the coal strike. Electric utilities vice area. They represent an estimated growth in depending heavily on coal generation were ' connected load of 73.284 kilowatts. forced to conserve their dwindling fuel supplies In addition, completion neared for other major through purchases of electric energy from PSO projects and a number ofindustrial giants were and other systems. proceeding with plans for new or expanded PSO's net system demand on August 18 facilities. reached an all time high - 2.5 million kilowatts, American Airlines, Tulsa's largest single bettering the 19 7 peak by 122,000 kilowatts. employer, dedicated a 263.000 square foot addi-That same day new highs were set for total system tion to its facilities. It will house data processing, demand,2.8 million kilowatts; and electric use by communications services and related functions. PSO customers for 24 hours, 48.7 million In Bartlesville, Phillips Petroleum Company kilowatt hours. completed a 520 million information center. I't features an energy etlicient heat reclaim system Higher use by retail customers to heat 282,700 square feet of space. Although evidence points strongly to a more de- C. R. Industries, manufacturer of fluid sealing termined public effort to conserve energy, use by devices, completed a 56.5 million plant at ilobart all classes of PSO's retail customers increased for while, in Chickasha, Maremont Shock Absorbers the year. made a major addition to its plant. Residential use of electricity soared to 3.4 bil- The Goodyear Tire and Rubber plant in Law-lion kilowatt hours, 8. percent more than the ton, hailed as the most modern radial tire man-previous year. Severe summer weather was a fac- ufacturing facility in the world, is expected to tor as was a 3.1 percent gain in new customers begin production of 23,000 passenger tires a day and greater average use per customer. Average early in 1979 household use climbed 525 kilowatt hours above Also slated for earl} 19 9 operation is the 54.5 197 use to 10.129 kilowatt hours. million glass fabrication addition at the Ford Glass The year brought ,163 new single family resi- Company plant in Tulsa. dences and 1,927 apartments to Company lines. At the Tulsa Port of Catoosa. Agrico Chemical Consumption by commercial customers was Company continued its expansion program. up .9 percent over 197 to 2. billion kilowatt- Schwinn Bicycle Company, Baker Packers and hours. As with residential use, weather was a Hilti A.G. chose to locate new plants in Tulsa. Hilti 4
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Ford Glass Company is adding a 228.000 square foot glaw fabrication facility to its Tulsa plant. The addition, e.xpected to provide some 250 new lobs, is stated for 19~9 completion. 5
TIIE USE OF EU!CTIUCITY is the largest industry in the principality of the energy conservation story to homebuilders Liechtenstein. A liilti subsidiary, McCulloch In- and homebuyers. It encourages the construction dustries,Inc., expects to have a tool. making plant and ownership of homes built to EEE standards. ready for 1980 operation. EEE homes and apartment buildings feature the Already ranked among the ten fa.stest growing electric heat pump and " super" insulation for states, Oklahoma is expected to move into the maximum heating and cooling efficiency. tap five by 1980 on the crest of steady industrial PSO's Energy Efficient mobile display enjoyed plant construction and expansion. highly successful appearances at events across Generally, in 1978, economic conditions the Company > service area. Built in 19'? by across PSO's service area continued an upswing. Tulsa consumer service representatives to show In Tulsa, the year began with unemployment ways to conserve energy, the display was visited standing at 4 percent. By year end, the rate had by an estimated 63.000 people during the year. dropped to 3 percent. On the national level, un- " Tune l'p Your Home," PSO's computerized employment was in the 5.5 to 7 percent range energy efficiency program for existing homes. through the year. Tulsa was among the national remained active. Late in 197 , all residential cus-leaders in total value of building permits. The tomers received home energy audit question-city's retail sales were It percent ahead of last naires in their electric bills. Each of the more than year. 30.000 costomers returning questionnaires re-ceived a customized energy etliciency analysis, EfEcient energy use emphasized p inting to w ys energy can be saved. Through 1978, questionnaires were available to customers The Corapany's Energy Efficient Electric (EEE) at PSO business offices, attracting an additional program, established in 1976, continued to take 2,000 participants.
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J~ Authority PSO Vice President J. E. Daley. a < w. m - - left, welcomed Marcus Ifilti to Tulsa. 6
Diversification of Industrial Revenue Revenue (in thousands of dollars) 1973 1978 Oil and Gas Refining . . .. 5 2,245 $ 7,035 Pipeline Pumping . 2,000 6,620 Oil Production, including Water Flooding 1.845 5,115 Research and Testing Laboratories . 335 1,024 Other .. . .. . . 271 383 Agriculture, Related Products Food Processing . ... 915 2,085 Cotton-Oil afills and Gins, and Grain Elevators 421 535 Other . .. . . .. .. .. 50 157 Other Natural Resources and Related Products Steel. Iron and Other 31etals . . .. 3,454 13,713 Stone, Cement, Clay and Glass Products 1,903 8,252 Gravel Pits, Quarries and Rock Crushing . . 237 495 Other . . . . . .... 760 1,691 Other Industrial Revenue Chemical and Drug Stanufacturing 169 1,815 Textile, Apparel and Accessories . 283 610 Paper and Allied Products . .. . 2,597 10,090 Transportation Equipment . 974 2,663 Printing. Publishing and Allied Industries 300 765 Construction Special Trade Contractors 494 1,051 Alotor Freight Transportation . . . 133 292 Communication ... . . . 626 1,346 Stanufacture of Stachinery, instruments and Aliscellaneous Articles . . . . . 2,468 6,527 Sliscellaneous Industries . . 369 1,435 Total Industrial Revenue . . 522,849 $73,699 7
CUSTOMER SERVICE Customers' Ideas Aid Our Efforts to Improve Service Our Customer Contact Program featuring per- In the future, PSO will have a continuing cus-sonal, give and take, communication was de- tomer contact effort. Whatever form it takes, the signed to bring customers' ideas into our continu- purpose will be the same to hear what our cus-ing efforts to improve the service we provide. tomers have ro sayso that we can be more attuned The program was launched in June when vol- to their needs. unteer employee representatives began calling . on residential customers across the Company's AMP Offers customers a chOnce service territorv. The summer of 19-'8 was bringing many residen-These representatives were prepared to dis- tial customers the highest bills they had ever cuss the issues affecting us. Most importantly, received. Meanwhile, customers interviewed they were prepared to listen! through our Customer Contact Program were The first phase of our customer contact effort telling of difficulties in paying high bills during was concluded in October after some 600 peak use periods. employees had contacted over 11,000 customers. PSO responded with its Average Monthly Pay-Customer contact report forms were com- ment ( AMP) plan. pleted by our representatives during all inter- liome users of electricity were otfered a choice views. Comments, suggestions and questions of payment methods with bills mailed in August. from customers were fully noted. These findings Each billing envelope contained two statements. stand out: One showed charges for kilowatt. hours used dur-a Our service is rated as excellent or satisfac- ing the past month, the normal billing procedure. tory by 99.3 percent of the customers inter. The second statement was based on the average viewed. of the customer's current and preceding eleven
= The cost of electric service is the primary months bills. By sending in the latter statement, concern of our customers. An encouraging the customer automatically was enrolled in the number say they understand that costs are AMP plan.
going up and are really not otTended by the At the end of the year. 25,232 customers were price they pay for electricity. AMP plan participants.
= Many of our customers are concerned about This will be an ongoing program with custom-the future availability of electric service. Of ers able to either drop out or join the plan as they those expressing an opinion of Black Fox choose.
Station. 8.6 percent were in favor of the project. Team meter reading, customer e A significant number of our customers have infOrmatiOG problems in budgeting for their peak use In Tulsa, team meter reading was introduced and bills. the Customer Information Center revamped.
= A large number of those contacted express- Both steps have brought new operating etficien-ed appreciation that we demonstrated our cies resulting in improved customer relations.
concern by contacting them and were in- Tulsa's meter readers now make up six, six-terested in their opinions. member teams. Each team is taken to and from 8
routes in radio-equipped vans by working super-visors. Throughout the day, the working super-visor maintains personal contact with his team and radio contact with the home olfice. Previously, meter readers worked alone, driv- 9 ing personal vehicles to and from routes. , As 198 ended, customer service assistants in 'l the Tulsa Region Customer Information Center - were completing customers' first calls 90 percent 4,y,
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training for customer service assistants. v. g ur Customer service assistants completed ;s q' yf . , .f. I 367,107 customer calls in 1978. .. r .4 ,
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a The year brought team meter reading to Charlie George, vice president. was among the Tulsa Region. with out Inding results. the employees calling on residential Dramatic improvement in meter reading customers as PSO sought ideas with c:ficiency is helping build a higher level of its Customer Contact Program. goodwill between PSO and customers. Louis Daniels, left. Ralph Condit and Rick Wooten were members of an initial six man team. 9
RATES, REGUIATION, LEGISIATION, NEGOTIATION Application of Fuel Cost Adjustment Ruled Valid Corporation Commission approval of PSO's Subsequently, PSO successfully negotiated a method of applying its Fuel Cost Adjustment " settlement agreement" with its w holesale cus-( FCA) came inJuly after ajune 22 public hearing. tomers for a 51,406.395 rate increase. The set-In its order, the Commission recognized the tlement rates are being collected (beginning need to retain both natural gas transportation January 1979), subject to refund, while awaiting costs and line losses associated with electric sales final FERC approval of the agreement. Manage-as part of FCA. ment believes it is clearly advantageous from an The hearing was held in compliance with a economic and financial standpoint to negotiate state law passed in 1977 requiring such proceed. an agreement of this nature rather than undergo ings on FCA be held each six months for all elec- lengthy formal litigation over several years in tric and gas utilities in the state. The law is aimed Washington, D.C. at great expense to the Com-at tightening the methods and procedures used in pany and its customers. applying FCA. The increase affects eight municipalities and l'nder the rules it had estai>iished in imple- two electnc transmission cooperatives served di-menting the law, the Commission on September rectly by PSO in addition to 1I towns and two 18 conducted a generic hearing to review the Department of Defense sites served by PSO for application of the fuel, purchased gas and pur- the account of the Southwestern Power chased power adjustment clauses of all public Administration. utilities under its jurisdiction. It was determined that the utilities were conducting their adjust- GRDA-PSO pact approved ment processes in strict adherance to Commis-Effective January 1979, the Federal Energy Reg-sion orders. All fuel, purchased gas and purchased ulatory Commission accepted the eleventh power adjustment clauses were continued for another six months. amendment to the Markham Ferry Coordinating Agreement, the contract governing the PSO-Grand River Dam Authority (GRDA) relationship.
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Rate application planned The eleventh Amendment is a complete rewrite in 19 9 of the agreement, replacing the original contract and its first ten amendments. Another 197 state law calls for PSO and other utilities under Corporation Commission jurisdic' The FERL action concluded six vears of negotiation, legal action and rate filin'g proce-tion to undergo full scale rate investigations at least once everv two years. dures to alleviate inequities that began to appear in the agreement in 19'2. PSO was granted a general rate increase in The eleventh amendment brings about several September 197', indicating the Company's next significant changes: appearance for full scale rate examination is due a Rates for energy sold to GRDA are adjusted in the fall of 1979. Prior to that time, PSO expects ' each month for the cost of fuel. to have tiled a rate increase request with the a Commission which, when considered, will fulfill Rates for capacity sold to GRDA are adjusted statutory requirements for the two-year rate annually for the cost of power plant con-
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. GRDA is no longer economically restricted under the contract from installing new Wholesale nite action power generation and is building a large On July 28, PSO tiled with the Federal Energy coal fueled generating station scheduled for Regulatory Commission ( FERC) an application to service in 1982.
increase rates to its wholesale customers. The a After June 1,1981, PSO will no longer be Commission accepted the case for filing on Oc- expected to provide unlimited capacity re-tober 12 and made summary disposition of cer- quirements to GRDA and forecasts its capac-tain items contained in the application. ity sales to GRDA will cease after 1982. 10
Fuel Cost recovery request companies from operatmg interstate unless the
. terms ofits participation in the South Texas Pro-ject nuclear plant are modified. The Court pur.
PSO's application pending from 1977 for recov- ported to make findings of facts and conclusions cry of $10 million in fuel costs through a tempo- of law adverse to the Central and South West rary surcharge was dismissed in alarch by the System's position in other proceedings, but these Oklahoma Corporation Commission. tindings and conclusions will not necessarily be The Commission determined that considera- binding on other forums. The System companies, tion of the application constituted " retroactive of course, disagree strongly with the opinion and ratemaking," upholding an argument of the were disappointed by the Court's action. Appeal Commission staff attorney. of the fmal opinion is expected, although the determination of what action to take will be made Interstate @ ration Proceedings by the Board of Directors of Centrai and South West Corporation when it next meets. The Company, with the rest of the Central and South West System, continued in 19 8 to pursue During 19 9, hearings are expected to occur before the l'.S. Nuclear Regulatory Commission the various legal proceedings pending in connec-n w hether mtrastate utilities may condition par-tion with the System's plans for future operation on an entirely interstate basis. ticipation in their nuclear power plants on intra-state operation.
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At the Securities and Exchange Commission, additional hearings early in 1979 brought to a Appeals from earlier decisions by the Federal close Central and South West Corporation's pre. Power Commission (FPC) and the Public Utility sentation of evidence demonstrating the savings Commission of Texas, in which the System's posi-to customers and other advantages of interstate tion had essentially not been upheld, moved for-operation. However, the record remains open to ward during the year. The appeals from the Texas receive further evidence. Commission's 197 orders, forbidding the Sys-Provisions of the Public Utility Regulatory tem's Texas-based subsidiaries to continue in-Policies Act of 1978 confer on the Federal Energy terstate operation 3, were pending at year end in Regulatory Commission new jurisdiction both state and Federal courts. to order intrastate electric utilities to intercon- In December 1978, the Attorney General of nect in interstate commerce, wheel power and New 31exico independently filed an original ac-furnish other necessary services, provided that tion in the U.S. Supreme Court also attacking the specified criteria as to the reliability, economies, Texas Commission orders for their prohibition of conservation of energy and reimbursement for interconnections between utilities operating en-costs incurred are met. On February 9,1979, the tirely in Texas and those serving other states. Company and the other three operating sub- The Federal Court of Appeals for the District of sidiaries of Central and South West Corporation Columbia remanded a 1976 FPC order which had filed an application with FERC under these provi- refused to consider the System's claims that in-sions of the Act that are likely to be central to the trastate operation was anticompetitive. The accomplishment of their interstate plans. The ap- Court directed the FPC's successor, the Federal plication tiled by the operating subsidiaries re- Energy Regulatory Commission, to explain quests interconnection and wheeling and asks for further the 1976 decision or hold hearings on the relief from the 19- orders of the Public Utility System's claims. Commission of Texas which had directed the The legal principles in all of these proceedings System's two intrastate subsidiaries to refrain are complex, involving constit 2tional. antitrust from interstate operation. and utility law questions that are difficult to re-Dunng October and November 1978. trial took solve. Decisions for either side in any particular place in the Federal Court in Dallas regarding the case are almost certain to be appealed. It is re-antitrust suit brought by the two intrastate Sys- grettable that the electric utilities in Texas have tem compames. The suit sought a determination been unable to reach a reasonable accommoda-of the legality of restrictions on interstate opera- tion of their respective interests in the matter. tion placed upon them by other electric utilities The System is convinced of the economic, en-in Texas. On January 30,19 9, the Court issued a gineering and legal merits of its case and mtends memorandum opinion ruling against the plain- to pursue the goal of interstate operation with tiffs. The Court also enjoined one of the System continued vigor in 1979. 11
SYSTEM EXPANSION Investment in Facilities Now Totals Over S1 Billion PSO is engaged in the largest construction pro- Fint coal unit nears completion gram in its history as it turns from almost total In June 1 , Northeastern Station Unit Three dependence on natural gas to uranium and coal fuel to generate electricity. will go n line, m rking the return of coal fueled Construction expenditures in 1978 were generatbn to Ns mtem after an abence of 5200.3 million, boosting the Company's invest- more than a quarter century. It is one of two W, kilowatt coal units being built at the sta-ment in electric facilities to more than 51 billion. Expenditures of about 5242 million including tion. some 30 miles northeast of Tulsa. Allowance for Funds Used During Construction, l'nusually frigid and wet weather along with are planned for 19 9. steel delivery problems, boiler erection delays and an electricians' strike during the first part of 1978 financing accomplished 19 8 delayed construction of the unit. 31uch of the lost time was regained through the remainder U SCYUId MN of the year as nearly all pha3es of construction fluilding new generating plants to meet future activity were accelerated. The stepped up con-demand requires that large amounts of new capi- struction effort will continue to the time the first tal be raised from a varictv of money markets. unit is completed. To finance its 19 8 construction program and The second Northeastern unit is moving on retire maturing first mortgage bonds, the Com- schedule toward 1980 operation, with about 20 pany went to external sources for 5164. million. percent of construction completed a3 1978 The Company issued 570 million in two and ended. three year project bonds for the Northeastern coal units and $34. million m pollution control Iloth units will combine the use oflow sulphur bonds- $18. million of which was drawn down Wyoming coal, advanced electrostatic pre-c pirators and other environmental control from the trustee m 19 8. The Company also equipment to satisfy prevailing state and federal received 560 million in the form af a capital contribution from Central and South West Cor- air and water quality requirements. Environmen-
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poration, our parent company. tal equipment takes about 30 percent of the esti-mated 5292 million total cost of the units. 1979 construction financing program LWA received for Black Fox Financing the Company's 19 9 construction Stafor steps were taken in 19 8 toward the start of program will require several steps. T1.e Company full construction of Illack Fox Statien. .despite plans to issue approximately $20 million in frantic etYorts of anti nuclear protewors, uncer-common stock, 525 million in preferred stock, tain regulatorv requirements and continued
$100 million in first mortgage bonds, draw down licensing delays.
515 million of the pollution control bond funds The long awaited Limited Work Authorization held by the trustee until certain construction ( LWA ) was received from the Nuclear Regulatory takes place and close leases amounting to 516 Commission (NRC) on July 26. Non-safety re-million. During the year the Company plans to lated work permitted under the LWA go't under-increase short-term borrowings by $29.2 million way the next day. Nearly 1.000 people turned out and retire two-year project bonds of 554 million for ar. official groundbreaking on the site in in December 1979. August. 12
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Issuance of the LWA followed drawn out en- In late November, the NRC granted PSO's re-vironmental and site suitability hearings before quest for an amendment to the LWA. extending the Atomic Safety and Licensing Board ( ASLH). its scope. The extension allows excavation of the After lengthy sessions in the summer and fall of unit two site and uninterrupted geologic map-1977, the hearing record was closed only to be ping of both reactor sites. reopened in May 19~8 due to a generic matter Twenty-three permits from various agencies under consideration by the NRC. A hearing was are required for full construction of Black Fox to heldJune 5 and 6 for the limited purpose of taking proceed. At year end.19 of the permits had been testimony on the environmental etTects of Radon issued, another waived. 222, a radioactive gas resulting from the mining Black Fox Station, located near Inola about 23 and milling of uranium ore. miles east of Tulsa, will have two, advanced boil. Work on the Black Fox site brought a new wave ing water reactors rated at 1,150,000 kilowatts of anti-nuclear protestors, with tactics that car- each. The first reactor, subject to the re-analysis ried beyond the benches of the hearing room and mentioned,is stated for operation in 1984 and the appeals court. Stembers of the Sunbelt Alliance second in 1986. Associated Electric Cooperative, staged demonstrations on the site. Arrests were Inc., Springfield. Missouri and Western Farmers made during two separate episodes of trespass. Electric Cooperative, Anadarko, are participants Public hearings on the safety and health aspects in the project with PSO. Associated will have of the project were held before the ASLB in Oc- 250.000 kilowatts in each unit; Western Farmers, tober and December 1978 and February 1979. 200.000 kilowatts in each. PSO is the principal Due to longer delays than anticipated in the owner and will serve as operator, licensing process, a major re-analysis of the scheduled completion dates and cost estimates Tninsmission and distribution must be performed. The conclusion of the hear-Construction of transmission and distribution ings on March 1,1979, set the basis for the review, facilities to serve new customers and to meet load The results of this re-analysis, which will result in growth continued at a fast pace in 1978. a significantly increased cost estimate, will be The last of three 33 mva transformers in the available during the second quarter of 19~9. new 138.000-volt First and Cheyenne substation in Tu'.sa was energized. The facility stands on the site of the historic Cheyenne Street power plant that produced PSO's first kilowatts. The sub-station bolsters the distribution system serving 4 y"E,g,ggr _,. _M18'E
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concluded, P50 anticipates issuance of a full A Limited Work Authonzation was issued Construction Permit for Black Fox Station for Black Fox Station in July. In August, in 1979 a groundbreaking was held at the site. 14
downtown Tulsa and surrounding area. Seven Heat rate Continues to improve miles of 138.000-volt line from Sand Springs to PSO remains among the nation's best at efficiently the substation was completed. providing the new converting fossil fuel energy into electrical facility a third transmission source. energy. Over the pa3t six years, PSO's heat rate Construction wa3 completed on a 138.000 volt has steadily improved, decreasing from 10.226 line stretching 13 miles from Catoosa substation Bru3 per Mowat@our in C to W in W to the new Inola substation. Now providing heat rate was 9,964. C,ompared with 25 transmission service for the town of inola, the The 19 ye n go PSO can now produce a kilowatt hour line is desi 345,000 volts f electrical energy using ne third less fuel. when Black'gned for operation Fox Station at is completed. A substation serving Goodyear's new radial tire manufacturing plant in Lawton went into service ResearCh and development during the summer. Two additional transformers PSO's research and development activities in will be added to the substation during 19 9 as 19 8 continued to center on coal and oil gasiti-Goodyear expands operations. cation, solar energy and breeder reactor Substation and line construction continued t development. shape the 345.000 volt transmission loop that in 19 5, PSO joined in a Central and South will furnish a vital new source of bulk power for West gasification demonstration project at Cen-Tulsa, PSO's largest load center. A new 345.000- tral Power and Light Company's La Palma Station volt sub3tation at Riverside Station was ener- near San Benito Texas. The facility, dedicated gized. Work was started on a 22 mile, 345,000- late in 1978. is aimed at demonstrating gasifica-voit line from Tulsa North substation to North- tion of high sulphur fuel oils, coal and lignite. eastern Station. The line, a 345.000-volt substa- PSO remains a participant with eight other tion at Northeastern Station and a 345,000-volt companies in an Allis-Chalmers coal gasification Tulsa North substation are scheduled for comple- p lot plant project. It involves development of a tion in 1979. The loop will be completed in early gasification process known as "KILNgas." A large 1980 with the completion of a 345,000 volt sub- dem instration plant is proposed for construction station at Wekiwa and a 345.000-volt line from n lih 'ois. Wekiwa to Tul3a North substati a. An economic, environmentally acceptable ~ Another transmission source was made avail- substitute for natural gas - coal gasification - able to downtown Tulsa during the year with the would extend the useful life of existing natural completion of a two-mile, 138.000-volt line from gas-fueled generating units. Tulsa Power Station to Carson substation on the Also in l9 8. PSO' served as an advisorv utility south edge of the business core. for a six month study of solar hybrid repowering Fast paced residential and commercial build- for existing gas - or oil - fueled plants. The ing throughout PSO's service a(ca required study was hosted by Public Service Company of additions to the Company's overhead and New Mexico for the Department of Energy. underground distribution system. The number of solar test installations moni-tored by the Company is increasing, especially Oil-burning capability those featuring solar assisted heat pumps and Two of PSO's natural gas-tueled generating units water heaters in homes. PSO is working directly now have the capability to burn fuel oil for long with Tulsa University and Oklahoma State Uni-periods. Conversion of a Riverside Station unit versity on solar research. was completed in 19 8. Previously, a Tulsa Power PSO continues to provide its share of support Station unit had been converted. to the Clinch River Breeder Reactor as well as the Certain units have been selected for modifica- Gas Cooled Fast Reactor program. tion. By 1980, about half of PSO's gas-fueled units The Company is cooperating with the City of will have long-term oil burning capability. This Tulsa in its program to develop a facility to con-will afford a smoother transition to coal and nu- vert municipal solid waste to a boiler fuel. clear generation, providing some flexibility in the Refuse derived fuel would be co-tired with coal amount of natural gas reserves to be maintained. fuel at Northeastern Station. 15
FUEIS FOR GENERATING ELECTRICITY Continuing Program Provides Dependable Natural Gas Supply Transok Pipe Line Company, a subsidiarv. con- Coal shipments to tinues to deliver natural gas to PSO generating units. Its system, consisting of 701 miles of trans- Northeastern Station mission lines and another 989 miles of gathering Coal shipments to the Company's Northea3 tern lines with all the associated facilities reaches into Station coa! units will begin in the spring of 1979. 29 counties of Oklahoma, including all of the (*nder a contract with Kerr SicGee Corporation, major gas fields. Additionally, Transok serves as PSO is to receive up to 3.6 million tons (>f coal a PSO's agent in dealing with the gas producers and year over 16 years. is the Company's fuel oil purchasing agent. PSO, primarily through Transok, pursues an Contract for Umnium signed aggressive exploration and development pro- PSO signed a contract with 31obil Oil Corpora-gram aimed at assuring a dependable gas supply at tion to provide 3 million pounds of uranium the most reasonable cost. oxide (yellowcake) over a 10 year period begin-Spurred by favorable intrastate pricing through ning in 1980. This contract will provide a portion 1978 that promises reasonable return on the pro- of the Company's requirements for the two Black ducers' investments, drilling activity in Ok- Fox Station units. lahoma again was intense. PSO/Transok drilling Although the first Black Fox unit will not be activities in 19 8 achieved an 81 percent success operational until 1984, the uranium deliveries ratio. The Company participated in drilling ~4 will begin in 1980 to allow time for accumulation wells; 60 of the wells were completed as produc- of uranium inventory and for processing the raw ers. These producers have estimated reserves of uranium into nuclear fuel. 486,300 barrels of oil and 12.9 billion cubic feet of ga3 attributable to PSO's ownership. Ash Creek awaits permit The Company supported an additional 58 Ash Creek 31ining Company was maintaining a wells, gaining overriding royalty interests and minimal staff at PSO 31ine One at the end of 19 8. back-ins representing potential ownership of re-serves estimated at 20,100 barrels of oil and 1.2 The Company was awaiting issuance of a permit for a load-out facility which allows economical billion cubic feet of gas. movement of the coal from the mine north of The Company's generating units in 19 8 con- Sheridan, Wyoming to a point of use. With recov-sumed 14'.1 billion cubic feet of gas, erable reserves of about 15 million tons, the mine At year end, reserves totaling over 895 billion is designed to produce 500,000 tons of coal per cubic feet were dedicated to PSO. year. Coal Conversion Act CSW Fuels fonned On August 2.19 8, the Securities and Exchange and PSO Commission authorized the formation of Central It is PSO's understanding of the Coal Conversion and South West Fuels. Inc.. the fuel subsidiary of Act of 19~8 that the Company can continue to the CSW operating companies. On that date, all operate its gas-fueled plants, especially the more PSO Fuels Disision employee 3 located in the efficient new units, through their useful lives - Denver. Colorado office were transferred to this to about the year 2005. Exceptions provided in new subsidiary. the Act, part of the total national energy legisla- PSO. Southwestern Electric Power.and Central tion, will permit the continued operation. Power and Light each own 30 percent of the 16
stock of CSW Fuels while West Texas Utilities 1 I owns 10 percent. 4 [ % ~ J CSW Fuels will continue the coal, lignite and r.44T ; uranium exploration, acquisition and develop-ment activities that were previously conducted L () Q" g see , I by the PSO Fuels Division. It will manage the PSO -g' y, g rs ._ uranium and coal properties and Ash Creek Slin- g ,,2 4' y- .g ing Company. PSO's minerals production arm. - 4 -f , .vw Transok Pipe Line Company is not affected. E & h t Coal, lignite, uranium search widens - g'g'g 'e During 19 8, most of PSO's coal and lignite ac- y *agtf tivities were directed at joint ventures with other Tf 2 CSW system companies. The evaluation and ac- . , , ,7.k y quisition of coal reserves was centered in Texas, ' .. , , - ' Colorado, Utah and northern New Slexico. De-velopment drilling began on a lignite property in . east Texas. The acquisition of additional lignite .;h , resen es in Texas continued. Connie Yandell. Transok, takes a reading to tranium exploration efforts continued m. sev- determine the pressure on the pipeline system at eral western states. Exploratory drilling was done the Southwestern Station metering facility. at several locations in Colorado. Utah, New
' l .\lexico and Arizona. The Company, through CSW -
Fuels, is participating with the other CSW operat- pjp[ ! <- V ing companies in a frontier exploration program -
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PSO PEOPLE Company's Employment Program Displays Positive Approach In 1978, the Company took two significant steps floth on the. job training techniques and to improve its Equal Employment Opportunity Company-3ponsored classes are utilized, with Program. training aimed at meeting the specific needs of Affirmative Action plans were established at all employees. major Company locations. Each plan includes About 350 employees participated in man-realistic goals tailored to the specific location and agement courses during 19~8. reporting requirements to assure ongoing Various technical training courses, including compliance. transmission, distribution and substation design PSO began to implement the first phase of a engineering, involved about 350 employees dur-
.\tanpower Planning Program. Through this ap- ing the year.
proach of selecting and developing employees, Well-qualified journeymen are the product of the Company is assured of having qualified per- the Company's ongoing apprentice lineman sonnel for jobs of increasing responsibility. In program. The program features a week long class addition, .\tanpower Planning will expand job once each year for the apprentice. Forty three opportunity throughout the Company. employees attended these sessions. At year end, PSO and its subsidiary, Transok Ongoing programs conducted by the Safety Pipe Une, employed 2,395 people. group - first aid, defensive driving and cardio-pulmonary resuscitation - were presented to Wage and sahiry administration 1,100 employees. New payroll budgeting and merit increase For the second year, the Company provided guidelines were introduced. These guidelines pre retirement planning for employees who are were developed to give managers and super- withm a few years of retirement. Sixty two visors a better understanding of wage and salarv empi yees nd their spouses took advantage of this program in 19 8. administration and to more effectively and equit. ably compensate employees. PSO's Educational Assistance Plan helped 82 Two programs, Job Evaluation and Perfor- empi yees further their formal education at ap-mance Appraisal, are due for modification in proved colleges and universities. 1979. gg{ggy IBEW agreement Continues PSO has built an outstanding employee safety PSO employees represented by the International record over the years through strong emphasis Brotherhood of Electrical Workers were granted on accident prevention. Compared with the na-an 8 percent wage increase on October 1,1978 in tional tverage, PSO's record remained impressive accordance with a two-year working agreement n 19~8. It was, however, not up to Company signed in 19-- standards. Both employee and vehicle acciden't The Company's contract expires this year and frequency rates climbed above 19- figures. The 19 9 negotiations for wages and benefits will be employee accident frequency rate was 4. l per million man hours worked; the motor vehicle greatly influenced by President Carter's wage and price guidehnes. rate was 6.53 for each million miles driven. An inspection and test program was intro-duced to ensure the safety and reliability of PSO's alning aerial basket equipment. PSO's employee training efforts are aimed pri. The program combines daily inspection quar-marily at keeping employees abreast of their terly visual inspection and adjustment, and changing job requirements, developing a well- annual non destructive testing on each piece of motivated team of employees. aerial equipment. 18
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Benefit plans cirmged l
" N(J fjg7M'i The year brought changes in our pension, death ,
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Pension Plan - Employees now can take early u :- -- retirement between 62 and 65 with no reduction . in benefits. The factors in the minimum pension ; ' formula have been changed, resulting in a higher !! m 4 . c? 4 benefit than when figured using the old formula. ,
' __,, T Death Benefit - An amendment provides that .
participants who choose to continue their 19.i
,_, <gd, - L employment after reaching 65 continue to be T,$ ,
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Plan and the 31ajor Sledical Plan after they have LQ 6 0 W;i; c , reached 65. Benefit pavments are reduced by the 1-amount payable through 31edicare. i .. .- Disability Plan - It has been amended to Bruce Cook, meterman tests pulse provide coverage for those working beyond 65. metering equipment. ESOP part 2 The Employee Stock Ownership Plan ( ESOP) was
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['f ,/ ' . - 'i State I'mversity electrical engineering
- - student Darrell Hutton.
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Management Discussion and Analysis ofSummary of Operations Electric Operating Revenues ( 3) kilowatt hour sales to ultimate customers of 511.2 million and ( 4 ) kilowatt hour sales to other Changes m. electric operating revenue 3 for the utilities, primarily to non artiliated companies, of years 19 4 through 19 8 resulted from fuel re-covery, including the operation of the fuel ad- about 53'.8 million. justment clause. the effects of two rate increases The major factors in the 5 0.8 million increase which became effective in midalay 19 5 and in 19-~ revenues over 19 6 include increases in October 19- , respectively, and increased (1) fuel cost recovery from sales to ultimate cus-kilowatt hour sales in all years except 19 when tomers of approximately $4'.4 million. ( 2 ) re-venue fr m the 19- rate increase of 52.5 million, overall kilowatt hour sales decreased slightiv due to fewer kilowatt-hours being sold to other ( 3) kilowatt hour sales to ultimate customers of utilities. However, in 19" the decrease in $11.9 million and ( 4 ) kilowatt hour sales to other kilowatt hour sales to other utilities did not result utilities, primarily to non-affiliated companies, of in decreased revenues as price increases related bout 58.9 million. to fuel produced an overall revenue increase. Total additional revenues produced in 19'5 as The major factors in the 5't.3 million increase a result of the retail rate increase effective in that in 19~8 revenues over 19-~ include increases in year approximated 512 million. Additional re-( 1) fuel cost recovery from sales to ultimate cus- venues in 1976 approximated $15 million, an in-tomers of approximately $18.5 million. ( 2) re- crease of approximately $3 million as a result of venue from the 197' rate increase of 53. million. being in effect the entire year. (in thousands) For the Years Ended December 31. 19'8 197' 19~6 1975 19'4 Electric Operating Revenues $4 39.926 5368.669 529'.856 5224.195 51 5.64' Operating Expenses: Operating expenses other than Federal income taxes $ 3 3'.906 5290.508 522 616 5159,'35 5122.088 federal income taxes 38.669 29.088 24.3 5 22.311 18.523 53 6.5-'S $319.596 5251.991 5182.046 5140.611 Operating income 5 63.351 5 49.0 3 5 45.865 5 42.149 5 35.036 Other income and Deductions: Allowance for equity funds used during construction 5 8.9 9 5 2.204 5 ~32 5 1.046 5 89 Other ( net of tax ) 1.412 _ 492 33 50 1.160
$ 10.391 5 2.696 5 1.105 5 1.616 5 2.039 Total Income Before interest Charges 5 ~3, 42 5 51.~69 546.90 5 43. 65 5 3~.0 5 interest Charges 21.215 1 .1 I - 1 .046 14.85- 11.968 Net income 5 52.52' 5 34.652 5 29.924 5 28.908 5 25.10-Preferred Stock Dividends 5.016 5.016 3.906 2.96 2.636 Net income Available for Common 5tock 5 4~,511 5 29.636 5 26.018 5 26.112 5 22,4'l 20
Electric sales in Oklahoma are responsive to retletts a continuing decline in the rate of in-weather conditions. Summer tempewures, crease for fuel and purchased power costs. especially import'nt due to air conditioning Increases in cost of fuel are reflected in rates equipment, were below normal in 19 4, ap- charged to substantially all on system customers proached normal in 19 5, were again below by means of the Company's fuel adjustment normal in 19 6, slightly above normal for 19- clause. The fuel clause is determined on a current and well above normal for 19 8. The Company's month basis with approximately a two-month lag retail sales when compared with the previous in reflecting the increase in customers' bills. The year grew only moderately in 19 4, but re- cost of fuel for electric generation is charged to sponded to weather in 19 5 with substantial expense as used and no portion is deferred. gains for residential and commercial sales. Cur- When fuel and purchased power are excluded, tailed industrial activity resulted in only a moder- other expenses increased 24.5 percent for 19 8 ate increase in total 1975 retail sales. over 19-~ and 13. percent for 19" over 19 6. Industrial sales mcreased in 19 6 enough to Depreciation - otiset a lag in residential sales caused by mild Depreciation expenses increased during the five weather and conservation. Sales to other utilities Years Principally, due to increases in pla'nt in ser-grew significantly in 19 6, reflecting the availabil. vice except for 19-~ and 19 8. The increase is ity of both system energy and capacity. ' also due in part to higher depreciation rates for Retail sales in 19-~ increased significantly, re" production plant in 197 and, in 19 8. higher flecting the influence of weather and a favorable depreciation rates for transmission, distribution economy. A decrease in kilowatt hour sales to and general plant which were implemented as a other utilities retlected decreased demand for result of thorough review of the expected available system energy at quoted prices. economic lives of existing property. Extreme winter weather coupled with a na-Federal Income Taxes - tional coal strike permitted the Company the economic utilization of otherwise idle capacity Federal income taxes are generally related to during the Company's off-peak period. Intense changes in taxable income. Increases for 1978 summer heat also increased kilowatt. hour sales relate to increases in the provision for deferred for 19~8 to other utilities and retail sales to res . Federal income taxes related to liberalized de-dential, commercial and industrial customers. preciation and deferred investment tax credits, both on a larger amount of property additions. Ms w 3 offset by the increase in the equity por-ObvatinbEx nses and tion of the Allowance for Funds L3ed Durmg Other Charges Construction on which no deferred taxes are cal-culated. Also, the investment tax credit rate in-A comparison of operating expenses and other charges for the years 19 4 through 1978 reflects creased from 4% to 10% under the Tax Reduc-increases and decreases, which are explained as tion Act of 19". follows: Allowance for Funds Used During Fuel - Construction ( AFUDC)- The cost of fuel (predominately natural gas ) used The variatiors between years generally resulted in electric generation increased dramatically dur- from the changes in the amount of construction ing these years. Higher unit prices were chiefly work in progress and the exclusion, from the responsible though part of the increase reflects a amount of construction work in progress to rise in the amount of .6ystem generation in all which AFUDC is applied, of construction in-years except 19 Fuel and purchased power cluded in rate base. The Federal Power Commis-accounted for 52.6 percent of the total increa3e sion the predecessor agency to the Federal in operating expenses in 19 8 over 19 . This is Energy Regulatory Commission, adopted revi-less than the 80.3 percent for 19- over 19 6 as sions in its uniform system of accounts effective well as the 90.2 percent for 19 6 oser 19 5 and January 1,19 , which specify a procedure for the 21
determination of the maximum rate for comput- Other Income - ing AFL'DC and which requires that the portion Variations between vears in Other Income retlect applicable to borrowed funds be reported as a differences in amounts of construction funds not reduction of interest charges. The gross compo- yet dispersed and invested in short term site rate so determined and applied during 1978 securities. and 19' was 8.9't. Concurrently with the appli- Interest Charges - cation of the new composite rate, the Company . commenced recording the deferred tax effect
~
""""# #'*"'" * " ' """E # # I" "
"" "" to external Snancing required W tpe applicable to the debt component as a charge to deferred tax expense. Prior to 19.. allocation of Company,s construction programs and higher m-terest rates. First alortgage Bonds of $35 millicq AFUDC between borrowed and equity funds was not required and the entire allowance was re- at 8-1/ i% were issued in January 1974, 512 mil-ported as other income. The Company used an- lion of the subsidiary company's First 31ortgage Bond 3 at 9% in Slav 1975, and 550 million of the nual composite rates of 6.5% for 1974 and the Qmpany's First Siortgage Bonds at 8-3/4% in hrst five months of 1973 and ~% for the remain-der of 19~5 and 19 6 and did not record the J""" '"J#""* ' " *E*"I""
nro instaHment sales agreements oMgau. ng it"I#. deferred tax effect applicable to the debt compo-nent. A portion of AFUDC has been allocated with respect to 533. 00,000 of Pollution Control llevenue Bond 3 and $1,000.000 of Environmental retroactively for these years to borrowed funds and the resulting component reclassified and
'*E"#"*"" "Y """ "** "^ '" .
presented m. the same manner a3 that f.or 19 . Januarv 19~8, the Company sold Project Bonds of 533.300,000 at 8.25% and $16,700,000 at and 19 8. This allocation has been acct ..plished by taking the Company s average capitalization g_3,5%. In February 19 8. 520.000,000 of Pro-ratios and applying to the debt percentages the lect Bon s at 8.25% were sold. See " System Ex-cost oflong-term debt for the most recent issue of pn n cus n the Company s M the Company's first mortgage bonds. tinam ing pngram. It should be noted that Allowance for Funds Preferred Stock Dividends - Used During Construction is a non-cash account- The increase shown for 19'4 resulted from the ing item and does not contribute to cash flow sale of 250,000 shares of 92% Preferred Stock, except indirectly in the future to the extent that $100 par value. The increases shown for 1976 and such amounts may be included through rate pro- 19- resulted from the sale of 250.000 shares of ceedings in the capital cost of plant upon which 8.88% Preferred Stock, 5100 par value, in July, the Company is permitted to earn a rate of return. 19'6. 22
PUBUC SERVICE COMPANY OF OKIAHOMA Consolidated Statements ofIncome and Retained Earnings for the years ended December 31,1978 and 1977 1978 1977 ELECTRIC OPERATING REVENUES: Residential $133,516,545 s118,981,293 Comtrercial . 92,521,889 82,363,768 Industrial 73,699,465 65,838.166 Sales for Resale . 131,657,179 93.890,199 Other 8,530,753 7.595,757
$439,925,831 5368.669,183 OPERATING EXPENSES AND TAXES:
Operation, including cost of fuel . $258,320,896 5224,186,999 Power purchased for resale . 13,389,862 9,651,492 Maintenance . . 16,838,669 10,879,763 Depreciation . . . 26,073,725 25,036,988 Taxes, other than Federal income taxes 23,282,342 20,753,181 Federal income taxes . 9,762,387 10,917.358 Provision for deferred Federal income taxes (net) . .. 11,093,816 11,414.135 Deferred investment tax credit (net) . . 17,813 000 6.756.164
$376.574,697 s319.596.080 OPERATING INCO31E . . $ 63,351,134 5 49.073.103 OTIIER INCOA1E AND DEDUCTIONS:
Allowance for ecluity funds used during construction $ 8,978,682 s 2.204.038 Other(net) . . . . . 1,411,704 491.560
$ 10,390.386 s 2.695.598 TOTAL INCO31E BEFORE INTEREST CIIARGES $ 73,741,520 s 51.768.701 INTEREST CilARGES:
Interest on long term debt . . . $ 24,437,109 5 17,502,546 Allowance for borrowed funds used during construction . . (4,471,534) (1,318.922) Amortization of debt issuance cost . . . 319,520 167,263 Other interest .. . .. .. . 929,814 766.053
$ 21,214,909 s 17.116,940 NET INCOA1E . . . . $ 52,526,611 5 34,651,761 RETAINED EARNINGS, at beginning of year 47,983,304 42,437,924
$100,509,915 s 7~.089.685 DEDUCT -
Preferred stock dividends $ 5,015,600 s 5.015,600 Common stock dividends . 28,002,663 24.090.781
$ 33,018,263 s 29.106.381 RETAINED EARNINGS, at end of yer: . $ 67,491,652 s 47,983.304 The accompanyeng . Votes to Financial Statements as sn integmipart of these statements.
23
PL'BilC SERVICE CO51 PANT OF OKIAHO51A Consolidated Balance Sheets December 31,1978 and 1977 1978 1977 ASSETS Electric l'tility Plant, at original cost when constructed: Production . $ 421,058,132 s402,881.594 Transmission 143,630,079 128.084,882 Distribution . 267,899,684 250,939,475 General . 23,802,962 20.663.262 Construction work in progress . . 273,224,516 135.782.433
$ 1,129,615,373 s938.351,646 Less: Accumulated Depreciation . _ 160,636,221 234.184.403
$ 868,979,152 s704.167,243 Construction fund for pollution control facilities . . . . .. $ 16,010,811 s -
Current Assets: Cash . ..... .. . . . . $ 1,891,491 s 2,068,528 Temporary cash investments . . 7,800,684 5,947,850 Special deposits . . . 4,436,155 7,351,332 Accounts receivable . . . . .. 39,MS,369 28,543,752 Notes receivable . .. 9,792,458 3,770,496
.\laterials and supplies . . 8,375,759 7,792,082 Fuelinventory . . . 6,990,294 5,560,164 Prepayments . 5,512,591 5,227.746 Gas stored underground . . 4,819,100 6,423.468
$ 89,263,901 5 72.685.418 Deferred Charges $ 11,476,839 s 9,050,903
$ 985,730,703 5785.903,564 The accompanying hies to Financual Statements are an Integralpart of these statements.
24
1978 197-CAPITALIZATION AND LIABILITIES Capitalization: Common stock. 515 par; authorized i 1,000,000 shares; outstanding 10,482,000 shares $157,230,000 $ 157,230,000 Paid in capital . . 95,000,000 35,000,000 Retained earnings . ... . 67,491,652 47,983.304 Common Stock Equity . . . $319,721,652 5240,213,304 Preferred stock, $100 par; authorized 700.000 shares; outstanding 697,900 shares;inclurling premium of $136,410 . 69,926,410 69.926,410 Total Stockholders Equity . . $389,648,062 $310,139,714 Long-term debt . . . . 308,855,683 258,653.075 Total Capitalization . . .. .. .. . $698,503,745 $568,792,789 Current Uabilities: long term debt due within one year . .. . . $ 54,006,000 s 10.4 0,000 Notes payable to parent . ... . . 8,200,000 3" '75,000 Accounts payable . . .. 46,166,118 32,474,053 Accrued taxes . .. 18,125,916 9,941,606 Accrued interest . . . . 8,146,186 5,623.855 Customer deposits and other liabilities . . 13,113,860 11,692.722 Preferred dividends accrued .. .. .. 1,253,900 1.253.900
$149,011,980 $ 109.451.136 Deferred Investment Tax Credit . . . .. $ 45,467,705 s 27,844.933 Accumulated Deferred Taxes on income . $ 91,850,022 5 79,814.706 Other Deferred Credits . .. . .. . $ 897,251 s -
$985.730,703 3785.903.564 The accompanysng Notes to fsnancialStatements are an untegralpart of these statementt 25
PLTUC SERVICE COAIPANY OF OKIAHOA1A Statements of Consolidated Funds Provided for Gross Additions to Electric Utility Plant For the Years Ended December 31,1978 and 197' 1978 1977 FUNDS PROVIDED FROM OPERATIONS: Net income $ 52,526,611 s 34.651,761 Add (Deduct): Depreciation, including amounts charged to operating expenses and other accounts 33,250,888 33,597,993 Deferred Federal income taxes (net) 11,559,768 11,418,083 Deferred investment tax credit (net) . . 18,442,000 7.163,364 Allowance for equity funds used during construction (8,978,682) (2,204.038) Total from operations $ 106,800,585 s 84,627,163 1.ess: Dividends paid . .. . . . 33,018,263 29,106,381 Reinvested funds provided from operations $ 73,782,322 s 55,520.782 NET FUNDS PROVIDED BY INVESTORS: Contributions from parent .. . . . $ 60,000,000 $ 30,000,000 Increase in long-term debt . . . . . . 70,000,000 - Sale of revenue bonds .. . . . . 34,700,000 - Revenue bond funds held by trustees . . .. (16,010,811) - Retirement oflong-term debt . . (10,796,000) (858.000) Net funds provided by investors . . . $ 137,893,189 s 29.142,000 OTIIER FUNDS PROVIDED (USED). Accounts and notes receivable . $ (17,123,579) s (6,113,351) Inventories . . (409,439) (2,253,037) Notes payable to parent .. . . . (29,575,000) 37,775,000 Accounts payable . . 13,692,065 4,223,881 Customer deposits . . 899,437 1,478,362 Accrued taxes .. .. . 8,184,310 (I,603,316) Other, nct . . . . .. .... .. _ 4,003,200 5.710.443 Total other funds provided . . . . $ (20,329,006) 3 39,217,982 NET ADDITIONS TO El.ECTRIC UTIUTY PLANT . . $ 191,346,505 s 123,880,764 Add: Allowance for equity funds used during construction 8,978,682 2,204,038 GROSS ADDITIONS TO ELECTRIC UT1UTY PLANT . . $ 200,325,187 s 126.084,802 The accompanys'ng . Votes so financsalStatements are an integralpart of these statements. 26
Notes to FinancialStatements
- 1. ACCOUNTING POLICIES Consolidation - 4.1% and 4.3% of the cost of depreciable prop-The accompanying consolidated financial state. erty in 1978 and 1977, respectively, ments include the accounts of Public Service Reference is made to " Depreciation" in Stan-Company of Oklahoma and those of its wholly agement Discussion and Analysis of Summary of owned subsidiaries, Transok Pipe Une Company Operations with respect to depreciation matters.
and Ash Creek Slining Company. All significant income Taxes - intercompany transactions have been eliminated. The current reduction in income taxes arising Electric Utility Plant - from the investment tax credit is deferred and Electric Utility Plant is stated at original cost. amortized to income over the lives of the related Such costs include payroll related costs such as electric utility plant. Deferred tax accounting is taxes, pensions, and other fringe benefits, general used for timing differences in the recognition of and administrative costs and an allowance for the revenues and expenses for tax and financial re-cost of funds used during construction. porting purposes. Such differences include the Allowance for Funds Used use for tax purposes cf liberalized depreciation During Construction - including the ADR and class life system and re-The Allowance for Funds Used During Construc- lated conventions and expensing for tax purposes tion (AFUDC) is the result of an accounting pro, of certain costs normally capitalized in electric cedure whereby amounts, based upon the level of utility plant for financial reporting. Taxes de-construction work in progress, representing the ferred in prior years are credited to income when interest charges on borrowed funds and a return book depreciation of those property costs ex-on equity capital used to finance construction are ceeds the related tax deductions. included in income on the statement of income Total Federal income tax expense produces and construction work in progress on the balance effective rates of 43.8% for 1978 and 46.9% for sheet. The Company excludes from the calcula. 1977 which is less than the amount computed by tion of AFUDC the portion of construction work applying the statutory rr.te of 48% to income in progress included in its rate base. before Federal income taxes. These differences The gross composite rate used to determine were primarily due to the exclusion from taxable the amount of AFUDC was 8.9% for 1978 and income of the allowance for equity funds used 1977. The Company records the deferred tax ef. during construction. fect applicable to the debt component as a charge Electric Revenues and Fuel-to deferred tax expense. Revenues are included in income as billed to Depreciation - customers on a cycle billing basis. The Company The annual provisions for depreciation are pro- charges to expense the cost of fuel as it is con-vided at straight.line composite rates averaging sumed. 27
PUBUC SERVICE COMPANY OF OKIMIOMA
- 2. LONG-TE St DEBT At December 31,1978 and 1977, 75e long term debt of the Company consisted of; 1978 19r First Stortgage Bonds (Thousands )
Public Service Company of Oklahoma - Series C,3-1/8%, due 4/1/1981 $ 10,000 $ 10.000 Series D,3-3/8%, due 3/1/1983 6,000 6.000 Series E,3%, due 2/1/1984 12,500 12,500 Series F 41/4%,due 2/1/1987 . 12,000 12.000 Series G,3-7/8% , due 5/1/1988 , 16,000 16,000 Series I,41/8% due 1/1/1993 10,000 10,000 SeriesJ,5 I/4%,due 3/1/1996 25,000 25,000 Series K,7-1/4%, due 1/I/1999 25,000 25,000 Series 1,7-3/8% , duc 3/1/2002 30,000 30,000 Series St 8-l/4%,due 1/1/2004 . 35,000 35,000 Series N,8-3/4%, due 6/1/2005 50,000 50,000 Transok Pipe Line Company - 3-1/2% Series,due serially to 1980 345 690 4.78% Series, due serially to 1980 . 169 530 6-5/8% Series, due 1980 . . 15,000 15,000 9% Series,due 1980 . . 12,000 12,000 Pollution Control Revenue Bonds Public Service Company of Oklahoma - Scries A,5.90%, due 12/1/2007 33,700 - EnvironmentalImprosement Revenue Bonds Public Service Company of Oklahoma - Series A,5.90%, due 12/1/2007 1,000 - Subordinated Secured Project Bonds Public Service Company of Oklahoma - Series B,8.375%, due I/25/1981 16,700 - l'namortized discount on long term debt (1,714) (1,328) Other long-term debt . 156 262
$308,856 s258,654 Based upon the first mortgage bonds outstanding 533,300,000, $16,700,000 and $20,000,000 will at December 31,1978, the sinking fund require- be required to retire Series A, Series B, and Series ments of the Company will be $ 2.690,000, C Project Bonds maturing on December 20, s2,690,000, 82,215,000, 52,215,000, and 1979, January 25,1981, and December 20,1979,
$2,155,000 for the live years ended December respectively.
31,1983 These amounts include $375,000 an- For Transok Pipe Line Company, additional nually for each of the two years ended December cash payments of $706,000 in 1979 will be re-31,1980, for Transok Pipe Line Company. The quired to retire the 3-1/2% Series bonds and the sinking fund requirements may be satisfied with 4,78% Series bonds, each maturing serially to net expenditures for bondable property or with 1980. An additional payment of $27,514,000 in cash or bonds of the particular series. 1980 will be required to retire the remahing For Public Service Company, additional cash bonds. payments of $ 10,000,000 and 56,000,000 will be Substantially all property is subject to direct required to retire Series C and Series D First first mortgage liens under the Company's inden-Afortgage Bonds on April 1,1981, and 31 arch 1, tures of mortgage and deeds of trust. 1983, respectively. Additional payments of 28
- 3. PREFERRED STOCK The Company has authorized 700,000 shares of share. Preferred stock outstanding at December cumulative preferred stock, par value $100 per 31,1978 and 1977 was:
1978 19'7 (Thousands) 4% Series 97,900 shares . . . .. . $ 9,790 s 9,790 4.24% Series, 100,000 shares .. .. ... . .. 10,000 10,000 7.92% Series, 250,000 shares ... 25,000 25.000 8.88% Series, 250.000 shares ... . . . 25,000 25,000 Premium on preferred stock . . . . . . 136 1 16_
$69,926 569.926 The preferred stock is redeemable at any time or Series currently at $110.37, Shares of the 8.88%
m part from time to time, on 30 days' notice, at Series may not be redeemed prior toJuly 1.1981, the following redemption prices per share, plus in connection with any refunding operation in-unpaid accrued dividends: 4% Series at $105.75, volving the use of parity or prior ranking stock or 4.24% Series at $103.19,7.92% Series currently debt with a dividend or interest cost ofless than at 3106.18 effective January 1,1979 and 8.88% 8.85% .
- 4. SilORT-TER.\1 FINANCING De Company borrows funds from associated any month-end during the year ended December companies on a short term basis for its construc- 31,1978, was $17,725,000.
tion program. These loans are unsecured and are The Company had $10,000,000 and generally arranged for a period of time not to $9,500,000 of unused bank lines of credit at De-exceed twelve months at interest rates which cember 31,1978 and 1977, respectively. Terms of approximate the prime rate at the time. During the lines call for interest rates at the banks' prime the year ended December 31,1978, the average rates. At December 31,1978, compensating bal-amount ofoutstanding short. term borrowing was ances equal to 10% of the total available line plus
$ 2,808,000 and the weighted average annual in- 10% of any outstanding borrowings on the line terest rate thereon was 7.0%. The maximum were required, which amounted to $1,000,000.
amount of short. term borrowings outstanding at
- 5. PENSION PLAN The Company has a contributory pension plan vested benefits atJanuary 1,1978. the date of the covering substantially all of its employees. Pen. latest actuarial report, did not exceed the total sion cost accruals were approximately pension fund.
$2,291,000 in 1978 and $2,064,000 in 1977. in- The plan was amended in October.1978, to ciuding approximately $625,000 and $445,000 provide additional benefits which will result in charged to construction in 1978 and 1977, re- increased annual pension cost accruals of approx-spectively. The Company follows the policy of imately 30% in future periods. Had these changes accruing normal cost plus amortization of prior been in effect at January 1,1978, the actuarially service cost over forty years. The Company's computed value of vested benefits would have general policy is to fund pension cost annually as exceeded the total pension fund by approxi-it is accrued. The actuarially computed value of mately 51,200,000 at that date.
29
PI'BUC SERVICE COMPANY OF OKIAIIOMA
- 6. RESTRICTIONS ON RETAINED EARNINGS The mortgage indentures of the Company con- under the most restrictive of these provisions, tain certain restrictions on the payment of com- 547,983,304 of retained earnings is restricted as mon stock dividends. At December 31, 1978, to the payment of dividends.
7 REPL\CE.\ LENT COST DATA ( UNACDITED) In compliance with rules of the Securities and and 1977 and the provisions for depreciation for Exchange Commission, the estimated current re- the years then ended are summarized below. It placement cost of the Company's productive must be recognized, however, that such data may capacity (which excludes non-depreciable plant be imprecise as they are based on estimates and with an original cost of $23,773,000), the related predicated upon many subjective judgments. accumulated depreciation at December 31,1978 1978 (Thousands) 197' Estimated Comparable Estimated Comparable Replacement Original Replacement Original Cost Cost Cost Cost Productive capacity . 51,707,159 5832.618 51.615,454 5781,992 Less accumulated depreciation . 529,448 259,746 478.995 233.737 Net productive capacity . . 51,17l1 5572.872 51,136A 59 $548,255 Provisions for depreciation 5 67.138 5 32.808 5 65.251 5 33.261 The replacement cost of productive capacity age estimated replacement cost of productive was computed by applying certain indices to the capacity for the period. original cost of depreciable electric utility plant This information should not be interpreted to in service on a functional basis. The llandy- indicate that the Companies actually have pre-Whitman Index of Public Utility Construction sent plans to replace their assets or that actual Costs for the South Central Division was used to replacement would take place in the form and trend steam production plant, transmission plant, manner assumed in developing these estimates. distribution plant and general purpose buildings, This data does not purport to represent the cur-and the GNP Implicit Price Deflator Index was rent values of the3e assets or the amount which used for all other plant. could be realized if such as3ets were so'd. In The accumulated depreciation on a replace- addition, this information is not intended to rep-ment cost basis was determined by calculating rexnt amounts which might be applicable to the the ratio of the accumulated depreciation per regulatory rate-making process. Furthermore, as books to the actual related original cost and ap- the data is limited to productive assets and re-plying this ratio to the estimated replacement lated depreciation, it is not meant to provide a cost of productive capacity. basis for computing the inflationarv effects on the Provision for depreciation based on replace- overall operations or the financial position of the ment cost was determined by applying the annual Companies. book composite rate of depreciation to the aver-30
- 8. QUARTERLY EARNINGS (UNAL'DITED)
The following unaudited information for each of Information for quarterly periods is not neces-the four quarters of 1977 and 1978 includes in the sarily indicative of the results that may be experi. Companies' opinion all adjustments (consisting enced for a full year due to seasonal variations in only of normal recurring adjustments) necessary sales, rate increases and other factors. for a fair presentation of such amounts. Electric Operating Operating Net ihree Stonths Ended Revenues income income (Thousands) Starch 31,1977 . .. . . S 86,625 5 9,900 $ 5,802 June 30.1977 . .. . . 83,973 9,441 5.728 September 30,1977 , 116,685 19,088 15.333 December 31,1977 . 81,386 10,644 7,789 Starch 31,1978 , . 113,795 16,675 12.907 June 30,1978 . . 86,158 10,836 8,013 September 30,1978 . . .. .. . . 140,287 22,998 20,619 December 31,1978 . . . . . . 99,686 12.842 10,988
- 9. Bl.ACK FOX STATIONJOINT OWNERSilIP The Company is Project Manager and one of participant finances its own share of construction three participants in Black Fox Station, which expenditures and the participants have entered consists of two 1,150-megawatt nuclear generat- into an ownership agreement which specifies the ing units scheduled to begin operation in 1984 acquisition and ownership of the generating units and 1986. It became apparent, however, that a and related facilities as tenanti in common in major re. analysis of the scheduled completion accordance with their participating interests. The dates (and cost estimates) must be performed, Company's participating interest in the generat-primarily due to substantial delays in excess of ing units is 60.87% and its interest in the trans-those originally anticipated in the licensing mission facilities is 67.4%. As of December 31, process. Subsequent to December 31,1978, the 1978, the Company's share of the construction re. analysis was undertaken. The results will be expenditures carried in construction work in available in the second quarter of 1979. Each progress is approximately $52,945,000.
31
PUBLIC SERVICE COMPANY OF OKLAHOMA
- 10. LITIGATION In October 1977, four firms eng::ged in installing, laws and state laws involving restraint of trade.
leasing, servicing, and maintaining commercial The Federal complaint alleges treiste damages to-and industrial outdoor lights combined to file five taling 518,180.000 and the four state actions are separate complaints against the Company, four in also seeking treble damages totaling 59,090,000. the District Court in and for Tulsa County, Ok- The Company's legal counsel is of the opinion lahoma, and one in the U.S. District Court for the that these claims are without merit. Both man-Northern District of Oklahoma. The firms allege agement and legal counsel are of the opinion that that the Company's business practices with re- the liability, if any, resulting from these claims gard to the installation of commercial and indust- would not have a material effect on the Com-rial outdoor lighting violates Federal antitrust pany's financial statements.
- 11. CO51511T51ENTS The Company estimates that approximately December 31, 1979 Substantial commitments
$218,743,000 (excluding Allowance for Funds have been incurred by the Company in connec-Used During Construction) will be expended for tion therewith.
construction purposes during the year ended
- 12. RATES Reference is made to " Rates, Regulatio 1, Legista- respect to the status of rate and regulatory mat-tion, Negotiation'in the text of this report with ters.
AUDITORS' REPORT To the Stockholders and Board .)f Directors of In our opinion, the financial statetaents re-Public Service Company of Okla'aoma: ferred to above present fairly the financial posi-We have examined the consolidated balance tion of Public Service Company of Oklahoma and sheets of Public Service Company of Oklahoma Subsidiaries as of Decemter 31,1978 and 1977, (an Oklahoma corporation and a wholly owned and the results of their operations and funds pro-subsidiary of Central and South West Corpora- vided for gross additions to utility plant for the tion) and Subsidiaries as of December 31,1978 years then ended, in conformity with generally and 1977, and the related consolidated state. 2CCePted accounting principles consistently ments ofincome and retained earnings and funds 2PPli ed during the periods. provided for gross additions to utility plant for the years then ended. Our examinations were ARTIiU'R ANDERSEN & CO. made in accordance with generally accepted au-diting standards, and accordingly included such tests i *he accounting records and such other auditiug procedures as we considered necessary Tulsa, Oklahoma in the circumstances. February 14,1979 32
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5todified lines will carry electncity generated by Northeastern Station er i fueled units. 33
PUBUC SERVICE COSIPANY OF OKIAIIO31A Comparative Ten-year Statistics 1978 1977 19 6 NUMllER OF CUSTOMERS (year end) Residential 342,943 332,686 323,231 Commercial 40,927 39 - O 38,3 9 Industrial 3,628 3.607 3,551 Other 1,626 1.608 1.602 Total 389,124 _ 3-'.6'1 366.763 SALES KILOW'" tIO URS ( n thousands) Residential 3,417,427 3,144,188 2.861,518 Commercial 2,685,837 2,489,457 2,268,780 1ndustrial 2,972,973 2,804.273 2,518,895 Other 6,347,417 1730,167 6.636.464 Total 15,423,654 14,168,085 14.285.657 REVENUES (in thousands) Residential $133,517 5118,981 5 94,685 Commercial 92,522 82,364 64,394 Industrial 73,699 65,838 47,622 Other 140,188 101.486 91,155 Total $439,926 $ 368.669 5297.856 RESIDENTIAL SALES KW Hours per Customer 10,129 9,604 8,984 Revenue per Customer $395.71 5363.45 5297.28 Revenue per KWH Sold 3.91C 3.78C 3.31C ELECTRIC PLANT Electric Plant * $1,129,615 5938.352 s831,680 (in thousands) Electric Property per Dollar of Revenue * $2.57 s2.55 32.79 Generating Plant Investment Per Kilowatt of Capability $107 s105 s103 SYSTEM CAPAllILITY Kilowatts 3,136,150 3,379,183 3,344,498 (at tome ofpeak demand) SYSTEM PEAK DEMAND Kilowatts 2,7'9,000t 2,894.000t 2,821,000+
*ConsolsdatrJ Jata tincludes temporary sales to other systems.
34
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Public Service Company of Oklahoma DIRECTORS
). D. Bartlett Pressdent. Elk 5upply Company, Cisnton. Oklahoma Wright Canfleid Consultant. Pubisc 5ers sce Company of Oklahoma W. B. Carpenter Elected Dsrector un Aprst 19~8 - hensor Vice President, Pubisc hern sce Company of Oklahoma Itarry A. Clarke Pressdent. Clarke s Good Clothes. Inc.. Tulsa. Oklahoma ). E. Daley Elected Dsrector sn Aprst 19'8 - Vsce Pressdent.
Pubisc Sert Ice Company of Oklahoma Martin E. Fate.)r. Executus e Voce President. Pubisc \ers sce Company of Oklahoma M. R. Lohmann Dean 9merstus. Dss ssson ofEngsneerung. Technolo10 and Architecture. Oklatoma $ tate t'n verssty,5tillu ater, Oklahoma A. C. Martin Chasrman. Okemah Natsonal Bank. Okemah. Oklahoma C. R. Musgrave.)r. Coasrman of the Board. .tlajor Enterprsses. Inc.. Bartiestslie. Okuboma R. O. Newman President. Pubisc Sert ice Company of Oklahoma Joseph L Parker Chasrman of the Board. A nchor \ tone and Concrete Company, Tulsa. Oklahoma
- 5. B. Phillips.Jr. Chasrman and Cbsef Executis e Offscer. Central and South West Corporation. Dallas. Texas Robert B.
Taylor.)r., D.D.S. Okmuluce. Oklahoma Mrs. Gerald li. % cstby Cirsc and Cultural Affasrs. Tulsa. Oklahoma OFFICERS R. O. New man President A. T. OToole VisePressJent. Admsnsstralian. Asssstant Trewarer Martin E. Fate.)r. Executss e Ysce Pressdent E. B. Mo6ett,)r. Asssstant to the Pressdent W. B. Carpenter Senior 5 ice PrestJent D. C. Anderwn Assistant Vice Preudent E. L. Bolls Vice Pressdent. Operations K. R. Wasson Secretary J. E. Daley VicePressdent late Dwane R. Glancy Treasurer Charlic George Vice Pre. ident, Poun System Engsneersng Dennis M. Sharkey Controller Merl). Lindburg Vsce Pressdent. Pau er Generatson Wanda Conner Asssstant Secretary Frank). Meyer Vice Pressdent James). Lawson Assistant irrasurer Transok Pipe Line Company OFFICERS R. O. Newman Chairman Warren H. Davis i sce President Jerry C. Edmonson President John R. Taylor Vsce President D.C. Anderson Sensor Vice President NormaJean Lannon Secretary Charles B. Crane VicePressdent. Asssstantsecretary J.R Bischo5 Treasurer and Asssstant Treasurer D. E. Moore Ccomptroller Ash Creek Mining Company O FFICLR5 R. O. Newman Chasrman K. R. Wasma Secretary and Treasurer Paul C. Jones Pressdent C. W. Mc$padden Comptroller W. A. Cattson Vice PressJent O. C. ifotiman Asssstant secretary and Asssstant Treasurer A. T. O'Toole Vice Pressdent Wanda Conner Asssstant Treasurer N. D. Schoenhals Vsce President Pubuc Service Company of Oklahoma FISCAL AGENTS Transfer Agent - Preferred and Common Stock. Regotrar of Preferred $tock - Contmental Illinon Stock Transfer Company, 223 West I!!inon Nattor..d Bank and Trust Company of Jackmn Boulevard. Chscago. !!!inois MM6 Chicago. 231 South Lt5aue Street. Chicago. Illinon 64M93 36
+
TOWNS AND CITIES SERVED Adair Cedar Crest Gould McAlester sentinel Adamson Cement Gowen McCurtain Shidler Addington Cheyenne Gracemont Millerton Snyder Afton Chickasha Grandfield Stinco 5oper Albion Chouteau Grant Morns Spartnaw Alderson Clanta Grove Mountain Park 5 perry Alex Clarkssille Hailevs tile Mountain View Sportsmen Acres Allen Clay ton Hammon Nelogoney 5terling Amber Clearview Hanna New Butler Ntigler Antlers Clinton Hartshorne Ninnekah Strang Apache Coalgate Hastings Norge 5tnngtow n Arapaho Coalton Headnck Nowata Strong City Arpelar Colony Henrvetta Oakhurst Stuart Atoka Coody's BlutY Hinton Ochelata 5 wink Atwood Corn Hitchita Okemah Tabler Avant Cottonwood Hobart Okmulgee Talala Bache Coweta HotYman Oneta Talihina Barnsdall Crowder Hollts Oologah Temple Bartlesville Custer City Hoyt Osage Terral Bengal Cyn! Hugo Owasso Texola Betace Davidson Humphreys Panola Thomas Berryhill Delaware Hydro Pensacola Tipton Bessie Devol Idabel Pershing Tullahasce
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P50 serves communiues % k in the shaded areas y^- - [ v.cfig 1 p G POWER STAT 10NS E REGION HEADQUARTERS Big Cabin Dewar Indianola Pharoah Tulsa Binger Dewey Inola Phillips Turley Blur Dill City Jamestown Pittsburg Tushka Blanchard Dow Jay Ple2sant Valley Tuskahoma Boley Duncan Jenks Pocasset Tuttle Boswell Dustin Keota Porter Valliant Bradlev Eag!ctown Ketchum Porter Hill Vera Bridgeport East Duke Kinta Presten Verden Broken Arrow Edgewater Park Kiowa Prue Verdigris Broken Bow Elg:n Krebs Quinton Vernon Bromide Elk City Kusa Ramona Vinita Bryant Elmer ~ Lane Red Bird Wapanucka Burns Flat Erick Lang!cy Red Oak Waunka Busheyhead Fair Oaks Lawton Rocky Weatherford Cache Fanshaw e Leedey Rolling Hills Webb City Calvin Fletcher LeFlore Roosevelt W eleetka Canadian Fort Cobb Lehigh Rush 5pnngs Whitefield Canev Fort Towson Lenapah 5.altna White Oak C tnute Fow LcQuire Sand 5prings Wilburton Carnegie Foyil City Locust Grove 5avanna Willow Carter Garvin Lone Wolf Sawy er Wiste-Ca3 tic Golden Lookeba sayre Wnght City Catoosa Gotebo Martha Scnuiter Wynona}}