ML20050C042
| ML20050C042 | |
| Person / Time | |
|---|---|
| Site: | Limerick  |
| Issue date: | 04/05/1982 |
| From: | Bradley E PECO ENERGY CO., (FORMERLY PHILADELPHIA ELECTRIC |
| To: | Harold Denton Office of Nuclear Reactor Regulation |
| References | |
| NUDOCS 8204080061 | |
| Download: ML20050C042 (1) | |
Text
{{#Wiki_filter:_ - _ _ _ _ i
*~
- a. , -6 PHILADELPHIA ELECTRIC COMPANY 23O1 MARKET STREET P.O. BOX 8699 FDWARD G. BAUER. JR.
- ND GE AL COUNSEL 1215)041-4000 EUGENE J. BRADLEY AS$0C8 ATE GENERAL COUNSEL DON ALD DLANKEN cRin"x^; ate April 5,1982
- 7. H. M AHER CORNELL Ass s ANT GENERAL COUNSEL EDWARO J. CULL EN JR.
JOHN F. KENNEDY. JR. ASSISTANT COUNSEL to A Dr. Harold R. Denton .'A U "" ' y , Director 'Z Ap ~ -l Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission p@Wcg'u . g k d,~32 5$7 Washington, D. C. 20555 H,{ /
/
j Re: Philadelphia Electric Company .M Limerick Generating Station, Units 1 and 2 Docket Nos. 50-352 and 50-353 (Construction Permits Nos. CPPR-106 and CPPR-107)
Dear Dr. Denton:
Pursuant to Section 50.71(b) of the Commission's Regu-lations, I am forwarding herewith for filing with the Commission seven copies of the 1981 Annual Report of Philadelphia Electric Company. Very truly yours, b{ % EU NE . BRADLEY EJB/as Encls. 920405 p g* j
$$*SMEU05 S'o$ l 1
1
+ 1
- 1
(
', s r m /. . .
89 I
% ^s 1.
, mi $ 5 ' o 3 As.
' .y :
- c. M9 9'e , . ' e.
' ~
k, 4hhhhkeg # ',3 y' . e.e # 4fe e 4464;e r y l- A' ,4 [ me;ese e499eeegeie,eoeg3. Ndh* :j . ( A e, . ann 88, , .
% 888; as"est:
7g; g3: 57
- g l ; pggggggggggg- -
7'
- 3 )
l& '~#*- s I4 4.9999940eters:41 ;WD
# 9
(
~
*'.. WK Qry 1 $. ' esmsess ess eso. vs ~ . e q4
, f ig nf . 4m,. g. q;p' #yym, . ..
.- . % .M , as...sguse ; .e .o e e.
n: e .
.s.e e ;e;e:
ogggese - e:e y e
. e
. ee.e.een
- e. u . - -
M.r, ' E e M ' L '.
,e Q.i,4 ;a s . . . -
.if 8 4: ;:, . n; y.am Tanas :: .eaenee' s e ... .
e g:;g;s ' yg .; 9 . . n , , .4 p '.a ;. ' -
+ '~
f' a e W .. . . . .'W
~
; p., .
* , y. .e. , .
~
; of fg, -_ .g.. _
5 . h* -
^ :? .L' [
nl
' " .; w ya. ,.m
~.4 -
- Y ; ? ..i .h ; &. _
wn h ', f .. . 4
- k. % L &, . ,i.
9 fg,' . Q gg3- l f p l W k & ena>*g &( a ;.y m w6:l
- w. ! p.O pgy i -.4 43*"
W 2u W nn keppme'**n x* / s ob*i Q i4
- kl'h,w .? Ig L5f I?ib &%,g%g f h psWf ap.m a w
v, . l w. .. w> . . c ., : ;,. a. m v. 4 M pa st.,..g :e W; g . . .. .
. . . -. ., ~ ~
i--- '
~-
Y ? '. l :
^ _ ; y es 3, j . j
;f. ; _ [qae _
g m
-. f~ ;..
.i_
. . . .]; l <
. .; ~ * , ~' ? m..
W ^_' .f4 4.? ~ I J l+ [. a k
+ .
[[ 3.[
- f. .7
- . [
. ~*7* n . : q f^~[ y c. h ky p'*n [
; W:; y: ;c
, ll l_ =.; ; [ f. [: . lf,yj;&y&
~
..4f.
. .I 5[}
- A t.
* . . ; ' . .-s qT j ff fys ';%' ::' ; 5 }}&&f YQ ." - .' : s
- o} ONQ*h 5 W y 9 N.* f hr a$P% :-
I "
. g\ $ h
( [. I' 7bI % MC 4 g j' 7
, ~ '.; g [.. - -
,_' 4 i : Q j, Qih
, f:V Q ;'[; f, y: d '_ '{ hg;jl;' .- - . _ -
t
- y . . 3 4
. :e._ ,'r p v g. .,W.M . : Q., -
,, . w . .
/.; = ;g,s a sMt% , w lyt . " ~
?d ' fg= "
w
.r. s %:t. . 'o , .g
. ~. , , ..- ,. . . .
% ,4,,
4.s g%,*M" . :* ' " ~ 4 , ' - '+ . .g' h
)g,.hs e %.,;- N'.-.M.4 *g;, . 4 4 '
.,'e- . .. ' . '. - . . . " . " . ,, ....~,..,.[A,..". , =.'.4) g.. :j xAn.$. 'N.'. . dM4 -
. ' b..
, 0 , .
'a p-p.. ae
.?,_ o .* _ {, : - ' - "l ' *. .t
-[' _* ,' [ g ',- '...'l._' jf: W; j.' :. ... l _ ,. , I, _
' ; '. 4 l
, . _ . .'.:s $ Q l h... Q '.h.,;.(. .
g,.. y.,4_9%f.y&c .
. . 3_ . ' . g n- .....,,.e
,,.g ' " # , MQ.
f et -: g - . . . ' - , ,-
'G . -
, , .~ , , ,
e-- , Qy e
-;-'" ,[ o aw:' ," Mxy O ', ' '
- .h._ , _ ,^_,
p . .... b g:q.3)N .? h ;?g l?
. ~
g,3
, . - t ,
.. ;- - -i
.-... k h' .k}h,.h:
- . q f, . ;j , h. M o- j-T t ,
.e
.'). .: P4. __j ;".._ A.W".ht'.
_ r: , ; , j;g ; :
.' / l$ .' , .], 6.; A. h
- _'
, .. ,- , .= .
Y ? l-
'-}'~ 4; ' ' j. . :
.' .-'.l.f. *. ' . . _ , _ .' ' " . , .
,W. .. - . . . .
. , , . ._ s "
'1 4.4'J . ', .
- , . .u.. s * - -
L;.
....-.,.,..+- ,
g
,' V, :;. .. V. . 4. ;. ', 3. t. ' f. "., :
.-.. ", +Q . K _ '%.'
.....i.y .. . , *:
~
. .n , '
_rt : ?#. _ .
'g . *
..'..-:*-~ ^,., ..[". , . - .- - , C.9 3..,
. y '.sJ.r m h.:%, .-:.,. U.,::
, . - 3.1, _ . ' -
g . 4 .. ; h....c.,3.,..., .-
. ... . (9..
n- - s... , .. ' . .y, .m , . ,y ..c
~.
- n:*
. . . . . 2,.
, - q ..
' q):g Y,s%. b,
.- n
. . . ,a
'(, :*., .
f
~
.'. .;f: ', g _
e -
,, _ , ' - l- '
_. - ' . - ._ . . .p'[pn ,,,Y>..
- :3 ?;'..: .4 :W .. ,f;:
9 _. *
- ' _....n.,,,,,
.,q._ .n>
!"l. : .
.p
. ;;;- l
'r .* ,
[ ~ ' gxli. : .
.f.,
. . . . 5 , [ ' ,, ' ' . ;. . - ' .-
,' .. 5
,%. 9.-
r ; W" d *.- e - -
. .,- .s .
- 4:. , d' .. ;.. - .'
. , . ,.8.. ' . . .
. . s: .G
. - a :.. . : w :,. . . ., = .
r.
- .-: ...v,5 2' ..s..-
, _ . . - - - <: , ..5
,p - . .
.v . _ ; . .
. q ' _ ; . . - f_ .. 3 -
q; + . . . _ _ ,' - , [
- fs(
.h $! ." = "
- g I r;,y,,
42 ' , - ._. *.c, .
,%; ? * , _- :wg. .,- .
. .si , s. , Q .. .
.)..". '. ,'
i 7,i._;:%.
'f ::Q . ' :' ' .tr. ..~ . .. . __
.. .f
- - ; .. 1,(: f;y ', y g;.-f., ,::: .
>.._:y__._ G-} ; :
.g - ~s . , :.
;ip w.
. ?n .>. . . . . : M;
., ..ryy %.~,,.W m..n_
- 4. -
g:M .
. . . f '. u.% . ,'. g a. 1;; . ; n ; i .' . '_ . .
Vp _
. 't
. .=..a.-
y'i.:: ,. ,' y - ' %, _
;y .e . -
r.,. , s ; - ,: . ., -
. -yg , ; ..r/[: -s
!s
', ,;;. . s 1. ' . . . -
.. QQ Jby . ., , y<- ' 'gn -
. . s.,.
% W;' . :.,
a.:E g .~~,
... :.. ' w: -' . ; %~ ' v . ._ . ..
- '$,, . p . 5%.. ,W
.. .p .z- ~. ' . ,uy} %. s- .
- .;.~ > ' . . .'
. :; . e ; dh,;;
,___ .). 3,. .h. [: _ _ .,
;,. :q
-;.3 3 :--..,.. ; . c
- _ - - ;& g .y - , . . ._ ;- p, _. g ;., ,. y. . . _ ,, , ..
V .. ;
, . : 9 .
-9 __ f.V L. - Q). F =
' ') ,' ; .; '
's y ; .; ' . s.
p"..;..n .s
'.::..! v% +i.
.. l ': . .,. Gg. '- 2
.s -
. . . s..
. . . _ up .%.' ':- e y,a c
; .b:n :-
- ~, , , ' . ' _[ ; . 9. :, ~ -
- . 3 .; .. : _: y. ;; 3 ..s. ' - .,
3.
- ~ ' :.
p;;b
.s.:: . ..y
.:- .f.w%yv_ -
,.;y
, , ...._(,.
- g. ;y ,. j y. ..
.".o . s . .r - n. - - y ,t .?,o . . .
,_ __l _
. . . . >- "' ..,,, . ; l.; - -
)
4
' ' . - - (...-
";;(.9 *.., . a
.- 4 .\ -
~.g :
e _ - %
~
[ y- ,.
- ' ; 'we '
e
- g. ,s
, i;.
s
- M ,; . - - . . - -
-' ". . . i g '
, = " . . 4 ' , , ,
m e g
... 9-
.. .: *9-. W, e ..
9-
.' /#
...s 4
' NJ- .'
h SE ( , .m . . . A
'M&&W .
^
o-
~
m manyne86enaneeq -
\ " '
- ge .
m esseenassest ' .
~ -
m aaneenen *
., .)
% . er . - p .
- ~.
- , * "9 p a'
9 .-
' - m: , ,
4 . s 1- . e ; _-
- 4 .
~
O e - . *
' = . e . .,
Content 7 l 2 letter to Shareholders 4 Finaccial Matte.s s Electric Operations to Nuclear Activities 12 Gas Operations 14 Customer Activities is Technology 19 Communications 20 Personnel 21 Financial Section 40 Shareholder Infonnation 41 Officers and Directors Financial Highlights Percent 1981 1980 Change Operating Revenues $2,433,425,000 $2,123,394,000 15% i Operating Expenses $2,110,432,000 S1,857,428,000 14 % Taxes Charged to Operations S 274,796,000 $ 227,434,000 21 % Operating incomc $ 322,993,000 $ 265,966,000 21 % Earnings Applicable to Common Stock $ 223,761,000 $ 174,950,000 28% Earnings per Average Common Share $2.25 S2.00 13% Cash Disidends Paid per Common Share $1.90 S1.80 6% Aserage Shares of Common Stock Outstanding 99,557,000 87,302,000 14 % Construction Expenditures S 793,959,000 S 586,481,000 35% T>tal Assets $6,304,195,000 $5,702,549,000 11 % i 4
; Earnings and Dividends Paid Construction Per Share Expenditures Daans won orsars 2a ,000 2.00 -
800
,n _ .
7 i=- em u _ _ 13 - 500 - 1 00 - 400 - - - -
~ . _ _ - .
n- . . . . j - __ _ . .
,_ ,m _ .
0- - - - - 0- - - - - 00 b T o?' cg W D '
i l To Cur Sharsheldsrs: ()ur centenmal S car.1981. w as recorti amount I hese f unds were apphed prim.u a y ear of au omphshment. t hallenge ar.d oppor- dy to three map u proiccts in !951 the I imerit k tumt) lor Philadelphia l lettric ( ompany nuticar plant. the flue gas tican up sy stems
- A number of nulestones were at l dtly stone and ('romby. and the Nalem l'mt achiesed dunng ihe year includmg entouraging No 2 Imant ial results I anungs per share showed an 1.unent k is our plani of mt rease of I Ui to 52 25. prnuarily as a result of the f uture its tw o umts u ill add low tuel tost.
higher clettric rates granted in Apnl Howeser. modern base load t apat ity pernullmg the the return on our t ommon shareholtiers' equity iciirement of old. oil burning plants Although w as still only 12', , substantialls below the lh'i its capital cost w ill be in exceu of N4 billion. return illowed by the Pennsyisama Pubht l'nhty estnuated annual tuel sas mgs will approat h oi.e ('omnuwion i Pl'(l billion dollars per y car w hen it is f ully opera 1 ttettisc Neptember h t the tional in the late 19811 s quarterly disidend rate on t onunon sta k was Work on the flue gas c lean-up int reased 11', to 50 cents. or N2 Io per share on sy stems. or N(): scrubbers. f or our coal- burnmg an annual basis I he disidend nrprosement w as plants at 1;ddystone and Cromby progressed dur-the firs' int rease in tour years and w as w arranted ing 1981 I he contmued use of coal as a m.got bs improsed calmngs l'mt No 2 at the Nalem Nu ticar (ienculmg Station m Nalem. New Jersey began < ommercial operation on ()ctober 13 l'l ( 'il t)Wils 42 59 pcicent til the Nalenn Stalitin ( tinslius lisin alld tiperathili tit the pl. int is the lespolisibillis of Publh Ners k e I.let tlic A ( sas ,, ( ompany of New Jersey ()ur share of the output anil t.ip.h ily of Salem l' rut No 2 is bemp sold to lersey ('entral Power A I ight ('ompany, a sub siihary of (iencial Pubhc l'tihties l'orporation. under an agreement signed in 19'9 and ett'ectise through 19M4 t lur capital need were met bs i.nsmg moic th.m " blX nulhon of new capital. a J f ei. 1 John H. Robert E James L l Austin, Jr. Gilkeson Everett l I
.y
source of power, while fully complying with cellent employee organization responded dili-clean air regulations as required by law, is the gently to these challenges. goal of this project. The scrubbers will be in full The future is one of opponu-compliance with all air quality regulations by nity for your Company. With the completion of December,1982 for Eddystone and early 1983 Limerick and the planned retirement of older for Cromby. oil-fired facilities, our electric production plant The year 1981 also presented will be modern and efficient. We should require us with a number of serious challenges which no additional capacity until the late 1990's. Our impacted us in many ways. Continuing inflation electric generation fuel supply will increasingly resulted in escalating costs of construction, fuel, rely on domestic uranium and coal, thus n ini-wages, operating and maintenance expenses, mizing our use of costly oil. and in higher costs of money to finance construc- As we review the first tion and environmental programs. 100 years of Company operations, the past As a result of declining finan- prepares us for the future. Development and cial ratios, our security ratings were downgraded application of new technology, adherence to again by the rating agencies. A lower rating sound economics in design and operation of our raises the interest rate we must pay to sell our system, and superior services to our customers securities. In September, we sold mortgage will continue to be the keys to success. bonds rated tillB with a coupon of 18%9, a Our Company has a proud record high interest rate for th: Company. heritage. At the beginning of our second hun-Clearly, improved financial performance will dred years, we again express our appreciation continue to be a top priority in the days ahead. to our investors, employees and customers. With this in mind, in July the Company filed a request with the PUC for an annual electric rate increase of $344 million. The PUC is expected to reach a decision in the case by June 1,1982. Our ability to improve financial Robert E Gilkeson performance, increase the return on sharehold-Chairman of the Board ers investment and continue to provide funds for the construction program will depend upon that decision. A steam increase was filed in 1981 and was settled for $3 million in mid-January 1982. , g --- Also, a gas rate increase request was filed m 1981 and is pending. James L. Everett in other PUC matters, President hearings on the need for and economics of the and Chief Executive Officer Limerick project concluded in mid-November with a final determination expected in 1982. The Company's testimony clearly demonstrated the benefit of completing Limerick as planned. . We continued many projects to _ _ _ _ _ _ operate the Company more efficiently, to im prove productivity, and to reduce costs. Our ex-John H. Austin, Jr. Executive Vice President and Chief Operating Officer i l f l 3 Y L
Financial Matters Earriings increase. Common expenses, including those related to the new stock carnings in 1981 were $2.25 per share, Salem Unit No. 2. Your management continued an increase of 139 abme 1980 earnings of to hold controllable costs to the minimum, con-
$2.00. 'lbtal common stock earnings were sistent with good service. Interest charges in- $224 million, up $49 million or 28% from 1980. creased $61 million and preferred dividends Average shares outstanding increased 14% increased $2 million.
to 100 million shares. Rateincreases. As with any The increase in earnings was business in an inflationary period, Philadelphia due primarily to the $188 million electric rate Electric Company must regularly raise the prices increase, which became effective in April, and of its products to reflect their current costs and higher gas sales. Electrie sales to retail customers value. A continuing and active program of rate were off 2% due to poor economic conditions. increases is necessary to offset the effects of in-Operating and maintenance expenses were up flation, to improve the Company's financial per-139, interest charges rose 26%, and depreciation formance, to maintain its ability to attract new charges were 69 higher, capital, to balance supply and demand, and to Common Stock Dividend Raised. encourage consumer conservation. On June 22, the Board of Directors voted to In July,1980 the Company increase the quarterly common stock dividend applied for a $304 million electric rate request from forty-five to fifty cents per share effective and the Pennsylvania Public Utility Commission with the third quarter payment. As a result, divi- (PUC) granted 5188 million or 629 of the re-dends per share paid in 1981 amounted to $1.90 quest, effective April 25,1981. The major item as compared to $1.80 in 1980. Jisallowed by the PUC was a request by the This increase, the first in four Company to begin collecting certain interest years, recognizes the necessity of providing a charges uhich are now deferred to the future. competitive return on the common shareholders' On July 29,1981 application investment. In this period of continuing inna- was made for a $344 million, or 17.79, increase tion, the Company must be able to continue to in electric rates. The PUC hearings began on Oe-attract the capital necessary to complete its large tober 13 and were concluded in February,1982. construction program. A PUC decision is expected by June I,1982. Electric, Gas Sales Rise. 'lotal On September 28, the Com-electric sales increased by 29 to 28.3 billion pany filed a request for a $39 million, or I1.3%, kWh. The increase was due to the sale of power increase in gas rates w hich has been suspended to equivalent to the Company's share of the output June 27,1982 pending hearings. A request for a from Salem Unit No. 2 to Jersey Central Power $6 million steam rate increase filed on September and Light. 28 was settled for $3.4 million, etfective January Sales to regular customers, 15,1982, about 5 months prior to the maximum excluding Salem Unit No. 2, declined by 2% to suspension period. 27 billiori kWh. Sluggish economic conditions The Federal Energy Regu. resulted in depressed kilowatt-hour sales to large latory Commission accepted a settlement for commercial and industrial customers, while sub- wholesale electric rate increases to Conowingo stantially cooler summer weather in 1981 held Power Company, a wholly-owned subsidiary, dow n air conditioner usage. and to the Borough of Lansdale, effective Febru-Gas sales increased by 69 to ary 27,1981. The rates were increased by $1.9 73 billion cubic feet as a result of more custom- million, or 8.4%, for Conowingo and $524 ers and colder weather this year. Steam sales thousand, or 9.5%, for service to Lansdale. dropped 99 to five billion pounds as a result of On August 18, Conowingo continuing conservation by our steam customers Power Company filed a request for a $3.6 mil-and conversion to other fuels. lion electric rate increase. The request has been Revenue, Expenses increase. suspended by the N1aryland Public Service Iotal operating revenue amounted to $2.4 billion, Commission pending an investigation. 15% above 1980. Electric operating revenue rose Also, on February 1,1981 to $2.0 billion, an increase of $235 million or this subsidiary was permitted to implement an 13% over 1980. This increase reflects higher base Energy Cost Rate w hich collects from customers rates, the recovery of higher fuel costs through any additional cost of fuel above the amount adjustment clauses and $46 million of revenue previously allowed in the electric base rates from the sale of Salem Unit No. 2 output and prior to that date. capacity. Gas revenue amounted to $356 million, umorick Investigation. In Oe-an increase of 23% over 1980, and steam resenue tober 1980, the PUC instituted an investigation reached $75 million. into various aspects of the Limerick Generating Total operating expenses Station, including its necessity, economic justifi-amounted to $2.1 billion, an increase of $253 cation, and the reasons for increases in project million, or 14%, over 1980. The major factors costs and for delays in the anticipated completion contributing to this increase were higher fuel date. During the proceedings, which ran from costs and increased operating and maintenance Starch to November 1981,39 days of hearings 4
unter Financines Millions of Dollars 4 et Common Stock-5,000,000 shares S 59 4 et Mortgage Bonds-Private Placement 73.5 15%% Series due 19%
$52.5 million IV. Series due 19%
$21.0 million e et Pollution Control Bonds (tas exempt) 100 Average Yield,12.6%
7 st Mortgage Bonds 125 17%% Series due 201I set Mortgage Bonds 125 18%4 Series due 2009 e a1 Common Stock-7,800,000 shares 96
- Dividend Reinvestment and Employee Stock Purchase Plans-3,074,526 shares 40 wesi $618.5 1sst notaie nnee lacrossee Millions of Dollars Application Annual Date Approved Revenue siectric-Penneytvenie 7/29/80 4/25/81 $187.6 Penneytvente 7/29/81 Pending 344.0 Maryland 8/18/81 Pending 3.6 Gee 9/28/81 Pending 38.7 steem 9/28/81 1/15/82 3.4 were held and the record contained almost 4.000 ted by the Economic Recovery Tas Act of 198i pages of testimony. 'Ihe Company presented 17 and it allowed the Company to receive cash pro-witnesses while the intenening parties presented ceeds now w hich w ould otherwise have been de-20 witnesses. ferred to the future.
T he economics of 1.imerick as Ratings on the Company's presented by the Company showed that complet- mortgage bonds, preferred stocks, debentures ing 1.imerick would prmide customers with sav- and pollution control notes were lowered during ings ranging from about 5200 million to almost the year due to inadequate earnings and cash 51 billion per y ear w hen compared to the alterna- flow in the face of the need to raise large amounts tises of building a series of small coal plants to of capital for our construction program. This ae. replace 1.imerick or cancelling 1.imerick uithout tion has the effect of increasing the cost of bor-replacement. The Administrative I.aw Judge's rowing new funds and reducing the potential for Recommended Decision is espected soon. marketing the Company's securities. Financing Highlights. Dur- Our 1982 financing program ing 19M1, the Company successfully raised will require the sale of approximately 5670 mil-more than 5618 million, a record amount of new lion of new debt and equity securities. A satis-capital, to meet the needs of our construction factory conclusion to the present electric rate program and refundings. case is essential to assure adequate access to in addition, to the major the capital markets. financings show n above, arrangements were Construction Program. Ex-completed in April for a $100 million, two-year penditures for new plant and equipment in 1981 resohing 1.ine of Credit through a group of amounted to 5794 million. Estimated construe-liuropean banks. In November, the Company tion outlays are $881 million for 1982 and 53.1 linalized arrangements to finance its portion of billion for the entire 1982-85 period. Approsi-the Salem Generating Station nuclear fuel mately 60% of these construction funds are car-through a lease with an independent fuel com- marked for completion of the two nuclear units at pany in an amount up to $125 million. In De- Limerick and flue gas clean-up systems at the cember, the Company recessed 554 million by Eddystone and Cromby coal-fired units. selling, for Federal income tas purposes only, the tas depreciation and investment tas credit as-sociated with its share of the 'Jem Generating Station Unit No. 2.1his tra .saction was permit-5
Elsctric Opsrations Comi strike. ()n \1.ut h 2x. I ddrione and ( tomby (,encratmp Mations 19xt the t mied \1ine Workers beean a nation hid) stone l mt No I now operates w ith parth u w ide strike w hn h lasted lo weeks How e s ci. late w rubbers to m.nntain the stat k enuwion w rs ke to Pl t ustomers w as not atlet ted het ause for pann ulate and s iuble enussions w ithin the of adequaic toal inseniories w hh h were inc eased i ederal and state standards t he full program in anth ipation of the sinke. the a.nlabihty of the of implenientation of M ): remos al ss stems at ('omp.iny s nut lear plants and the purt base of I ddy stone and ( iomby St.itions is expected to energy f rom other utihties remose 'm of all V ); and pank ulate enussions New Ttansmission une Ener- diw harged at these utes t he Company. through gized. A 17 4 nule. mig k V hne betw een Pl ( % 's uluable espcMise gamed m retent y cars. has be new l Iros Nubstation m \1ontgomery ( ourity tonic a leader in the use of the magnesium oxide and Penlisyls ama Power A I ighti llosensat k regeneratis e air pollution tontrol tet hnology
\ubstation w as enerpued on \1 art h 22.19K1 't he w rubbing sy stem mstalla-af ter nearly five years of regulatory delays .ind tions are proteedmg on schedule and are co estenuse htipation I he connet tion w e de pet ted to be in tull t ompliance with all i ederal siened to I intort e iiur transnus ;on sy stem and and state .or quality regulations by December to at hics c ec onomics of oper ation 1982 f or I ddy stone and early 1983 for Cromby t he total cost of the proiev. ihe proietted tmal cost for the ensironmental mt luduig 1:froy substation, w as sl7 2 nuinon sy stems. including scrubbers and an upgraded bui the proiett will result in annual sasing to w ast. w ater treatnient tat ility at 1-ddy stone Sta-Philadelphia i lettrh of %4 nullion in reduted tion and scrubbers and a new w aste u ater treat-v, m lowes and lower-cost generation ment f acility at Cromby Station. is approxi-Eddystone and Cromby mately S Di nulhon Stations-Env6ronmental Projects. ( 'onst ruc t ion l'he operation of the scrubbing continues ori the flue gas scrubbing sy stems sy steni produces magneuum sulfite in order to beirip installed f or the toal-fired biniers at the consert tiiagneuuni sult'ite into its usable com-w N
i i l l l 1 l ay f KY ( one : David Wattin, a Power Director the power system in the Com-in System Operation, monitors pany4 control center. G I i
i
.: *$?M Ms -
dute ulturic aad i nese .. facihtics are t s px tc
% k, a '# t > cost approsim .tcls 575 milhon.
l -f Power Purchasen 4om 8s s g fVjf[ g Allegheny Power System and Central Hudson. I he
'ampany w as a pones r in des eloping in cro E act tions w ith oth"r sy sicms to pros ide hgh-1,gy y j.
.. j 'j W h ; , % ' kg 4: 731 i> 'CF' CC d' the Uwc i possible cost. Neu r
.y... . . .
'. .; . ...,.y .. '*:
. 94 m.. has this ettort h een more ' eneficial in reducing the cost of power to Pt. tuuomers th.m d eing
. {L ' ..
3 ; 1981. Construction of pollution. A decadt ago. the Company control equipment at Eddy- cons eded fise al its ma,ur generating plant'. from stone, a coal-fired station, coai to jow . sulphur oil to e ca a quahty regu-progressed in 1981. late The major escalawa in the price i t oil m i the past seseral year. bss dictated that PE snouhl ponent compounds. the Company is construcimg oou asoi.! operating these high-cos! plants two magnesium oude regeneration f acihties u heneser a :ower cost alternatise source of w hn h will be located ai the Albed Chenucal power w as asailable. ('ompany Sulf urn Acid Plant m Clay mont. Ilegmning in February 1981. Delaware and at the i sses Chenucal Company I 1. has purchased coal-fired electricity from sy s l Sulf uric Acid Plant m Chiton. New Jersey 'Ihe tems m West \irginia. Ohio. Indiana and ilhnok l regeneration facikhes w ill consert magnesium I he sasings produced by these purchases sulhte to magnesium oside and sulfur dioside. amountcl to 596 million in W81 l lhe magnesium oude wil! then be reused m the An additional 53 milhen was ! saubbing sy stems of the Company 's generating snel by contmuing the arrangemeno n ade in l lacihties l he sulf ur dioude will be used to pro- 1980 '.o purchne low er-cost oil-fired pu er dur mg summer peak load hour, from Central Hud-
~
.c.. '. son Gos and Elettne Corporation in New hk
',, Q ,. 2 . f ' - - These adsantageous powei
,m- i 5 t.,' . . , purchases from other snacins hase been posuble because of the strong intciconnected transmis-
-:f.u .. ,. 4
" ' 3 . , , .
~
sion sy ste n that PE has des eloped with
~
. neighboring systems. ___
,l ( f. ") '
~
Electric T&D Manpower Reduc-
$s ' .
tion Program. in the early 1970's. more than 2.500 m, tictri ir:msmiwion and Distribution (T&D)
.' '. . - . Department employces and oser 1.000 contract
^ - ~
., . ._ e
- . forces were needed to construct and maintain
+
facihties or perform other functions insolsed in
. ,' .- -,, M ' ,' Annual Savings from delisering power from gnerating stations to cus-a ; ..
PE Interchange and
~
power Purchases tomers. W hen the 1974 oil embargo and escalat-m o'*m ing futi costs resulted .a reduced growth in
- ; - J energs use. the construction program was re-
., ,, r , .1 ,,
' ',' duced accordingly. The resultine reduction in
.g . .. E '
' *. -. *. . . *: }. '.
I personnel requirements w as met fiist bv reducing 4 " : x -
,. ; s
-,". k{
<M contrau tortes As further reductions became
, , ). . 4 .
4
, , '. - nccewar), the number of employees was reduced 4
- d
~
- throuch attrition and bs two enh retirement in-
.. ., 5 ' ,
- - < n 4 -
centis. e programs. f/ 7 x . i Mj y) During 1980. an additional r - m h program for Electne TAD employees was initi-
.y h ated prosiding incentises for employees to trans-
~
+- ,
t , b p k. v fer to till needs in other Compans departments. - p., = , - g g
~
... - m or to retire earh. This plan w as completed dur-
; $ 4 s N y {9 mg W81 and cduced TAD manpower by an
_ ' ~ s 4., y < . w P 2 6N 8 %;< y additional li2 people.
-n j i d y These programs bas e been ef-
;., , h M 3 % fectise m reducing the total number of Electric
'*" ~
){ g
~
ly TAD employees by 700 without any layoffs to y[ p[ $ M h 9;c i keep the department's manpower and workload
. y.. .,n. s q c g in balance.
%n g %
r:;;
/;.. .; , . 9 y369L n m , w m 7
Y e I
i l l l a -. - ...sd{ _ ,, gg;f&T.? NT-l
. . 4 l
'- . [
u,;
? k 7 g. - A
,_ . j- .,7 4 . .wr .allilllP a+ 1 ~' . -
yg,
*j 1
i
I 73mmMMm A .LY L
~
l T P m I k P h Is k V
' awW^
.~- "'
m = = .%Qhyv& $
- . n n . ,. . x.c = a rs t Q ty $ ~ ~n'IY Y -
~~ h $ *) % M a y l & O k Q
[gdj; p,
- = '- ~%
ugympyy n
- w. '
~.. -
k
.p~ ~
..,% . ,. e
, . +
e i _f .
.~ ,m.m Q i - r -
i _ , . __ E 1 + = .-
&.sg . .
, . . ~ . 1.,
%>:,;. =
.,,ccccpd . y,,, ,, yyt t3; v'~ i ,
- . w: , .
, - 3 - h'gg-g a *Jgf A ER Ar.
- f. , ,f*} W f , ' -
y w .v _ g e-k_ _- [ _J i W ; = E & 1 s - m .
\ \
T
. .s v,
e s v Wj l M yM f v 4 V.
" e y.
y
.[ sn
-- M - '
{
$h,kN 4
,A
- t. ,
, t Construction Engineers installation at Umerick Station Jonathan Moffitt (center) and with manufacturer represent-Joseph Brozonis (right) dis- ative Charles Bruck (left).
cuss low pressure turbine beense w as made in March.19XI. Following a preliminars resit w. the NRC accepted the apph-cation f or dm keting in July.1981. Nuclear Activities Nuclear Training Limerick Training Center. The 1 imerit k Tratmng Center Limerick Construction. Con- began formal nuclear training on January 5. struction contmues at a rapni pace at lameritk 19SI. wi'h a group of heensed operators f rom Generating Station in 1981. the Company spent Peach Bottom receis mg requalitication training 5421 miilion at lamerit k bringmg the total ex- in the simulator. Cs ot' the simulator makes penditures through December 31.1981 on the it possible t'or operators to be trained in a piolet t to 52 O bilhon total consnuction cost shon period of tune without disrupting normal upon completion in 19S7 is estimated at about plant operations. 54 2 bilhon l' nit No I w a- (T i complete and l'he center 's training person-
~
l'mt No 2 w as 30's compicte as of December nel also mstructed a group ot operator trainees 11.19SI Commercial sets ice dates f or the two f or the lamerick plant. selected f rom the Com-units are 19S5 and 1957 llighlights during 1951 include _ _ . s completion of the l' nit No i coohng tower , fe [ ~ structure, excas ation of the IO-acre spray pond. -g; g-g., -j
~,
3 and completion of the Administration lluildme - Y ad T . ' L.icction of the l' nit No. I turbine-generator nears completion ( her 7(UMXI feet of small pipe A Qi ~'
~
and os er 1.tMK).IXX) !cet ot' cable were installed g i in 19Sl Prewure testing of pipine u stems com- T -
,y inented in preparation f or start-up testing in y
19S 1 I he workiorce teat hed 3.950 l' nit No 2 milestones include selling the generato: -tator and installation of the 70 (h M) condenser tubes An !nterestine side licht in July, a derailed flat car from occurred durmg the ycar a hen excas ation for ihe an 89-car freight train severed two legs of a 66kV transmis-spray pond uncos cred rocks bearmg thnosaur sion tower in Philadelphia. ' trat ks estimated to be os er 200 nullion y ears old Sixteen Transmission and
\pplication to the Nuclear Distribution men completed {
Regulatory Comnussion iNRCi tor an operatme the repairs within two days ; without any customer service j interruptions. 10
pany 's 1:lectra Production ikp.u1 ment Ihc the Peat h liottom leadors unul at least 1991 tramees underwent an IX-week uiurse m f unda l'hn uramum nunmp s enture n another of PF \ i.~ntals and theory as the beginnmg of traimng ettorts to obiam an assurut and Jnerse supply whh h will ultimately lead to cert thation as of uramum for our nuclear plants i ht ensed operators Pooled Inventory Management in addition. s anous engineer Service. In January.1981. Philadelphia 1:lectric oneniation wurses. laboratory t ourses and ('omp.my and ses en other utihties imtiated a j other short non-operator worses h.n e been ont shanng program for stocking spare common j wn(hh ted throughout the y e.n In Neptember. nuclear componenn f or similar nuclear plants l a senes of college lesel es emng courses. ton ow ned by thn group of utdities l he program. Juaed by I)rexel i'nnersits, were started at called Pooled Insentory N1anagement Sers ke the tranung t enter i PINIS L pros ides wiluable protection to our cus-Peach Bottom. lhulng lyxl tomers against lengthy outages at ?each liottoni l Pe.h h llottom l'mt No 1 underwent a scheduled caused by the unas.ulabihty of a nuclear compo-
- iiutage hn ref uelmg and complenou of a number nent at a traction of what it would cost the Com-l .51 mamr N R( ~ mandated motht h anons In order pany to stock thn equipment mdependently.
to mt rease the lesel of safety and improse the m-l . .. . . . .y l abihty of eqmpment and personnel to respond pioperly to pLmt m.dtuncnons, sigmtic mt j
.. [e y,.. . .. [" -y , ' -
Y ).y ,
%. c . '
.y _
4 i j. . I t hanges w cie made to the reactor pressure sup- ' pression 9 stem. the teattoi sessel feedw ater i.- b' b
9
'I O-
i mlet no//les. the emereencs wntrol rod msertion sy ste m .md spet it h dtely related pipmg and m-E 1-
~ $- .d ., 3 '
. . ,,' ' 1 ,.
l l strumenlahon I hese moihtications to the f.h ihty 4 [ '. ' .y 1.
,'Tf# e 5, w ere the resuh ot the I \11 expenence .n w ell as ' C' & * ,
l
~ .
on come PF and NRC concerns
, N^
n -
- 4. .N * *3 . I i ,-
N-- %4>
- h s1
?
s . .,a v % l -l ' I he cost of these modifica- 4 4 - . . ' ..- 4 +~s .
%g' .t,' l v.* c .'La.,,
~~
thiin (in l nu %) l anbiunlCd tti nHire than 535 5' fe i .. , [- .' " - nulhon i PF share 515 milhoni toward improsed F' . f-> { y j[[j. {. ; ] nuclear safety and were completed in sesen , ' '
. i s .._;- 4 e n
, Y.03~ [f's % j ,2 .
months \1thh of ihn uork has already been ! .. ,,[. f S ' M '. ( . ' t ompleted on Pmh h llottom I mt No 2 : ; . ~ " ,, -- j(a { .". ' ha.? #l"' ' -, f l sen with the extended ;~ ,
,f .* i,y $*
; 4 *7',; ..-. ,
outage of Pe.h h Hottom l'mt No 3. it n esh- .. ' V." , [, d;L , . . . .
' g.. .-( .c "
,. w mated that the nti tuel snings to Pld'o custom- w, 4
_! ;k , .-. . I cis trom the operanon of Pe.h h lionom was oser i# , N. *
.:. ~'."- y' .
. I' i
i
'sl55 nulhon m 19XI ,.,.v '
J e:.%;
' ' ~ ~' '
# .'A.
~.
~
Salem Unit No. 2 in Service. I he '
'& J= '
l l second umi of ihe Salem. New Jersey nuclear Peach Bottom Station engineer ! gener.itmg stahon w as pl.hed in commercul op_ inspects the reactor pressure eration on ()ctober 13 Pl on ns 42 59 percent of suppression system during l modifications at Unit No. 3. The the lointly -ow ned.1.115 megaw att station w hh h system provides cooling water l n operated by Pubhc Sersice I:letinc and (ias for emergency shut-down. j l'ompany of New brsey w hh h ow ns a smular penenlage of the plant ikhn.us a Power A I ight l'ompans and \tlanth Cits I:let inc s\ " ~~ , se s- 4~ ) i , (.ompany c.h h ow n , 4I percent .
* -. w.~
Lee Mine Construction. l)ur- y ; ". pc. ( ? .. '1E-' l ing 19NI . wnstruction started on the 1 ec N1me . ,, k * ' Ny l'ranium Prclect lot ated in New N1esico. 60 y , ' % g f .. Q(4 nules west of c\lbuquerque, under an apeement , e* -- y.. .$ - L' ? ' u h!ch PI: entered mio with Kerr Nic(iec Nuclear Corpouhon dunng 19X0 'l his n a iomt senture k.'*s , g-1 ~
- s. .
.'t f s-
-7 opeution m w hh h Kerr-NicGee n the wnstruc. .4 .'z 144 and wlll operale Ihe mine Ihe uranium Unit No. 2 at Salem was placed will be shared equally between k. err N1c(. ice in service during 1981 by and the Peach llottom ou ners PSE&G. PE owns 42.59% of the t he .mne shaf t now under station.
t onstruchon n 14 feet m diameter and uill extend mio the earth to a depth of 1.665 feet 't he first l uramum trom ihn nune will be produced m 1985 and. at f ull production. the nune w dl hase a 600 ton per day capacity l'ranium from thn nune will suppl) a portion of the requirements for 11 i _ . _ . _ _ . _ _ _ . _ _ _ _ . _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ - - . _ . - - , __ . . . . m.-m . . .
Gas Operctions Peak Gas Sendouts. During the The Company has increased its winter supply 1980-81 heating season, total gas sendout surpas- from underground storage by contracting for i sed the presiou., recorded peak day total on five an additional 39 of normal winter natural gas j days. Prior to Christmas Day,1980, the record supplies for the 1981-82 heating season. The next ! daily sendout had been 441 million cubic feet, phase of this storage expansion project is ex-l which occured on January 17, 1977. Total send- pected to provide a further increase of 2% for the i out for December 25,1980 established a pe: of 1982-83 winter heating season. 444 million cubic feet, when the average temper- Two New Gate Stations for ature was 4'll Continued cold weather produced Natural Gas Distribution. The increase in new gas ) a series of records in early 1981 and the final peak sales experienced by the Company over the past j daily total amounted to 486 million cubic feet on two > cars has been greater than in any similar l Monday, January 12 when the average tempera- period in the Company's history. The sharp in-ture was 7^1i crease in new load required the construction of ' l ! On January 17,1982, a new two additional supply points to feed the Com-l daily sendout record of $29 million cubic feet of pany's natural gas distribution system. The sup- ! natural gas was established as the temperature ply points, known as gate stations, are hications } averaged minus 2 li where the Company purchases gas from two Hecor_d Gas Sales. Gas sales natural gas transmission companies. increased 64 in 1981 to a record 73 billion cubie When placed in sersice j feet. This amount surpassed the presious yearly during the winter of 1981-82, one of the new j sales record of 70 billion cubic feet set in 1972. gate stations, hicated in Chester County, will re-j Gas Supplies increased for inforce the gas distribution system in the Paoli- . 1982 and 1983. Natural gas availability frma Downingtown-West Chester areas. The second j the Company's interstate pipeline suppliers un- station, hicated in llucks County, will pro- ! tinued to improse in 1981 and is expected to vide similar reinforcement to the Morrisville- ! , remain at the current level through 1982. Levittown-Bristol areas. With the addition of the l new stations, which hase a total expected cost l um of $1.8 million, the Company's natural gas dis-l tribution system will have a total of thirteen
- supply points feeding a network of 4,475 miles l j of mains. These mains cover an area of 1,475 L j -
square miles serving 293.000 customers. { Operation of the thirteen sup- ! .a. -4 ply points is directed from the Gas System Con-w trol Center in King of Prussia where distribution h system pressures and sendout requirements are constantly being monitored and updated j 4
, g' ] through a computerized network of supervisory l t control eqmpment.
"^
! During 1981, gas operations i contmued to expand as new gas connections were completed. In order to supply this new 4 load,88 miles of new main were installed at a l cost of $15 million. ( i 4 1 i William Fulmer(conter), Assistant Supervisor-Mains and Services, and Street-Mechanics Joseph Gambino (left) and Steven Allen (right) I inspect the. gauge on a hy- , draulle rump used to com-j press a coupling in making a final connection for a slu-Inch, plastic gas main extension for service to a new business area. I t
-12 , , .- ,
. _ . , . ..,-o .- p -
' ~
.g . . ~ l ' . '., l * ._
^~'
\ ' *
' g~ - ..
' $..I ..o [
- 4. , _p c ..,.' .
/ { ' ,_ i] .:
, , g , -%y i,# -
,4*~,. ..
,. Ih'-
.' ' ' ,. s "
t
,, 4 k .
.[ )i' i
.m.,.g ,.~-.8
, .'. ;k %
-',. * ~
-~ g
- .- ' aat *
-. '- +. ,
f . -% s ;Q;' '
,. e z c
. -y" . *
' ~~ '
,.a.
(
; $ .- J.y
? .,
.
- p;j'(%': '
n a, ,
- .. .. A j
.~', '
.e ", - .
. . r ..
, ~ ,a . ', 5 i
+ ..
. . y
, : ,, - g
. .i . . . .
,q
.. -? :. ..- -. .' - - ;
a "
".> .~ .- u . L i
=._'. 3., ' ' ~~ 9
.. ,., -e.{ s g
.- '; - y. . ' ' .' .' ,
, 2, ..
.g _
$< - j ; - ,
9 ' .. , ss .' * . 4 (, [k
'[
J * *
%_.,. -',Q
..,. 7.. , . .,
A..}' A . ' pa ' \,' . " ^ .: [-
'i 4 -
' {
s c ,.. J: _. s . . ..
'L
\- g
'..4 . 'g
?
;. .', .i .
L q. , .
;. ..; q ,
>- - .. w r
-.,,.'. e ye a , e v, y
4 ,9 ~- ,, y., .g 4 -
,u
< .h
- c. ,
y-y&% .
. < s-
+s . _
.y .
.i .. .3 -
,, , . .. - ~ ., . .
a -
.~.,
, .. . ,, , e e,. ,
Q.s,. 4.
.... r
.7 . , -;s .
.. ,. . .; < a ., - ; *
. .~
,,_ q . ., . .' -
9~- i
. . ,__ _ 9 ;, .- s
.. _;, g ,_ ., w
' . q p. n < .j . . ., p. s.'
./
~Q ;,,.
.- g .n:
,.s
% . n ;M
.i. -... ., L ' .
s . .4-
- g.g ..
.4
-[ e. E .'y .
kc' _
'?
5
~
+.
^ * '
- D s .
}. $ k];L , *'.' .. l; e % ' .a
, , s.
5 7' .. . .- , . -. :. . ,. 3 -- 'l k',, k ,s g
& :} .
w .
'... . +
'a .
. ,s: .,
> .q ._
-j ,. ._
.x.,
\ ., . .
;u . .. ,. - . .
,e -
4 '. . ,.
- c. .
%. +..p,,,.
. '.~
),'- . x : < .g .: : . : ; . -
.[. ,. -
-l ;..*4 s,. ..,. . ' - - . , . , . . .
g ' * ,
.; ./, ,,
._;p \. * .
ys
*. '. . . y .
1- 4'. /t . ~ k: .k. i g ' .; .
. -.-i .. ' % . t. :<. ,- ;. ./ . ' f,: '-
~
; _. _ ,- . r , <
?
~
(, a
;. ry , , p'_. .,-' , .
. s
~ . ...
- p - .. ,_ p j --
.( , ,
3 . ~.gf . ; _ .
- y e .a ,..
, a. .. 2 ~ .
A ; .
,. v .. ; a
. ,- _p.. , . . Qn; y v > : r, e , ~
.,,~
.y
. . . .* . . e - - py ,
v n- _ g _
,J ,; ; >- . ,
r ,. , i ,% r. " '
. 9 4, 4 y . s .
.- . t .
- r. . . , -
'l .T . .-
Twelve-m :h gas mam is welded River at the Betzwood Bndge.
- for crossmg the Schuyllull near Valley Forge.
l 13 i l l
.fY.
hgEN
.. ;-M : a.
, Md ? . a , : E
' , mf,;. p'%
. e %, t;;.D.',M
'y+
- - y x- .j .;c 1 jq;
, Q ,-Q l r ._
- y:' %.-y r4s r : -;y y htf;,
l_ .. f. ~ , ~ . ?_3 4 ,~
, %.- ~/ - .
, j p.Ed%-
y' ' . _L 3~ g: ~ ' "
._ ;;yyQ f; ;
#: ._ - ,i tCa.sc%&%y:P w . a#
;g : Y py :
; - - ,y4,
.. 7;'s'[c 7 i gj
? " "l.;. M n;;
-}-y Wly;%Q
- g; ;z. , c <- m'-
- p,
.s
.- c ,
'i'. I
.,"1. $
y b 8I
? .jg
- n I jE i.t d-r li I' f i
4 l i 3 I t . e [. i
) W_<
j f&
~ .; ,,
- 3. . u a
Home energy audits identify Auditor, operating a portable costs and savings of home computer terminal. conservation measures. A customer observes Mark generation and alternate energy sources This Thompson, Home Ener9Y group is insolsed with the applications of solar energy. wind energy and cogeneration facilities. Customer Activities For oser three years the Com-p ms has had a policy concermng the purchase of Cogeneration and Attornate electric energy from pnsate generating facilities Energy Sources. Alternatise methods of generat- and will contmue to extend escry cooperation to ing electricity are gaming wider attention through the customers who desire to operate their pri-the media and gosemment programs aimed at s att .ilities A process for the implementation conscrsing non renewable energy resources. of the Federal rules and regulations goserning the in April 1981, the Company manner in which we contract with a private gen-established an Alternatise Energy Section to eration customer is now being prepared by Penn-coordmate the increasmg msolsements of co- syis ama. w hile Maryland has its rules in effect 4
Home Energy Audits. In con- stalled in 9.800 additional units, of w hich 1,600 formance with the Residential Conservation were new construction while 8,200 convened Service (RCS) Program of the National Energy from oil. Conservation Policy Act, Philadelphia Electric While gas prices are expected Company began offering residential energy to rise further with complete deregulation, at year audits to its customers last summer. The charge end the cost of gas was equivalent to 74' per for this service is $15 per residence. gallon of oil. All residential customers were in the new construction mar-advised of the availability of audits by bill en- ket,699 chose electric heat w hile 16% chose gas closures. By the end of the year 11,400 custora- for a total penetration in 1981 of 85% for PECo ers had applied for audits of their homes, and energy. 1,400 audits had been completed. Area Development. In spite of The Company trained a team the high interest rates and the nation's depressed of ten Customen Service employees in the skills economy, the downtown Philadelphia construc-required to inspect homes and identify places tion boom, v,hich started in the last decade, con-i where adding weatherization improvements- tinued during 1981. The construction of office insulation, scaling, caulking, glazing-or im- buildings and new hotels is apparent throughout proving the efficiency and operation of the heat- the city. ing system can save energy and money for the A 40-story otTice building customer. At the conclusion of each audit, the joins three other office buildings in various customer receives a print-out from a portable stages of construction on Philadelphia's Market computer terminal. This informs the customer of Street. Another 30-story office building is under the approximate cost and savings of each con- construction at Logan Circle on the Parkway. In servation step that can be taken in his home. the suburbs, along the Turnpike and Expressway, Residential Space Heating. there is also growth ia office construction. During 1981,19,700 additional residential The growth of the hotel indus-units chose PECo supplied electricity and try indicates the confidence investors have in gas for space heating as oil . u es increased Philadelphia's future. Construction is underway to $1.25/ gallon. on a 25-story,450-room Hershey Philadelphia Electric space heating Hotel on Broad Street. An 8-story,375-room, was selected for 9,900 units,7,000 of which luxury hotel to be operated by Four Seasons is were new and 2,900 were conversions from under constmetion on the Parkway at Logan Cir-other heating systems, mostly oil-fired. Of cle. A 33-story luxury hotel and condominium these units,5,500 or 569 chose heat pumps, has been topped out on Rittenhouse Square, and an efficient source fo , ear-round comfort. At a 350-room Best Western llotel is underway in year end, there were 94,200 electrically heated City Line's Golden Mile area. Since 1975, almost homes on our lines. 400 new restaurants have opened. Gas space heating was in- The new office buildings, hotels, restaurants, other commercial develop-PECo Residential ment and cultural activities have stimulated resi-M*gUgmion dential development in downtown Philadelphia, w or um nemeems mnsnoon During the past year, ten ships
, _ . _ _ _ were assigned to the Navy Yard for refurbish-ing. Including tharcraft carrier Saratoga which arrived in late 1980, almost $800 million in con-
"~--
tracts have been involved in these projects. > m - 7f Nf m--.--- c_ j w _-_ e m ._ _ _ p- _ - to - 77 n M m ' e' The Stock Exchange Building
,,,, p% on Market Street features a seus PECo Dudnc (Olher Than Heat PwTn) multi-tiered atrium.
Guis Decnic Hem PwTo 15 ____.._s ,
- ^ '
+y. ^1
,. .7 .-
..p .)., ',=,<, .-v, 4., . . .:; g c; g ,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,g ,g,y
.4 up . .,;.,,,.;,; s ff y.y,.q .. . . .. .,
-' - - . i
- d'h
[ ,. ,.
. ;q,., . }
j '-' - - - --. _. _ 3 7 . '" j , + j .
. > ,. f T & _ \ g j j [ C 8 s. y f l. 4 4 1: YAM
~
~ "
. }. .
~,',,.;
' - *Y i..l t
$' [.~, J -
, g.
,5 g ; e. 'y.. b . . p -' * -M i ~' .. ., ...i.........ses s e e s s e t e e s e . e o s a s s e s s e . a . a o .1
*~ I ;
' [; ' .* ,
p
;; a. .
glyy - Ng . . .. .. [ ; y. j ; ; R.;QM. . -.. ......................:
-m . _ .
p. e f... . L,. .: ,. 1, og .. .
,p 12. ,T..
+ W f< o. . ,
.g
, . ? " ",. 4 ~ :h . , ...
% , h ; ~[ r ,c.* .g '
.% I h f **,...# T- 3.. L d7 7 7,4%h_3 3 gK JN, . .' n . '.f '. . ,
- q
~
e su.w. ,, .
.~ .
. :..: - Q- m x.
. ... : ~ , ,- . ; _&.
- ~.g;..,- -. : . .. y
'.r_._ ..$
. . .. . - . <g y
[. :. - y 1 -
.' .2
. . _, he *q 4 , _ ,
i - .
., - . _k .'. .'.'.; / , N-? '-" d4 b-
? -
^
"I A O .; [
kDk G:'N;I f W ' .%.& s 2 i - ?,. f f. ~ %.v . Q b N. '
; ..L x ' 9 C w el l.C.42p k.['l M 4 4 gfg T N}f W[V. - [ }; .
q w q q nx, ; g . 3ce ; 9 ; qm q g q g, g-; ; g yi pcy=l1 9 G.
' ' ~
1.1 ~ d. , .l -. . M.. .
. p - .- .
g %$ w_. . d,- p4- k, - (feji i r% p ; ,4. A< 7.4 .
'i<. '.n b.
m,,,,,,,,,,,. a
, ,.~; ;. . 'W s' ' ..
# ~ -enas. .,l ^l
,L -
;% e.C 9 ,
<q pn' ' : Q_: ~ - ammmmmw 4. 1
'4 ,
,Nm " , f: , AB, d'amaman=
. . l Nf
,,,,,. ,9 *.
..Yt;.'
l 1
- .g f . 4' f
.x .n j
- : ~ .:*
s p. -' 4k.; ' j,,-
. . .m
,- c
.. tw <
} % ,sc';
p@. . . . r rar:rr i. *-.g .
... a , .j , y my . ,
9 g l's k ' ., , .p -g,..., i . / ,- .,
, .[ s , ,
,(
, ;h .. g y
*( .(
.,Q ;_[. L .
f..--
},; . ; ;: .**.}Y 4Waew l
- 1. ,
'A
. g.g% G y c_ ..' , .> - . -
xc y> r >l t,' c.".' y.n.-;y,- $: . j '" N -
- g. [3.. . . .
8. t.
. s z.
p.r. .. ,-
-~ -
- -n .
,I
.-" , / l - ,., .- .
's *- -
4
,,y e
,g p ,,
'.....,',',.-,-%... , f-1..
y , , .j.. ..f
;- , ' *' _'. '- - - - - , ..? b :. }.
r,-
- f. .
_n en T h~;'.,^.f, ;Vg['- "
- u __ - . _&'
%-, - ,I The Gr eat Hall of the newly ac ross f rom Independenc e r enm ated Bau r se Building H all Pa r k m c enter < rt y 16
.. g . , . * :m .; :p x
.. .e . .
- - y -. ; y. 3; g7 y ,qg,g. ,g . , D _ .q., ., ", _ ~,, ,'.y
- -~ * 'i i'n,g . ?.?.
t y n - *' c 2rf,.4s gt. .. ' --' Qg , y. . f y_. g y., y .", '-
~
~'s .' l 1: 'q - Y - -.
+ ',-
D.. bk[d% +hd 4Q. . . i.[q:f- hht,);(; M ". ' l , "
.}
@ M,_sy p be:gg33.q p r. th < . ,1 s. , gy g . ',i '@ 2 , . # -
- g ,;- x .
._m...
-?. y.. - - ,
c~ qf . "
- (;
~
}*
>. *1-%
.=..e .-
I-.. /s ' s s A :: \ ," d *
.. - . mr *'N
.~.
* -- - e
*th.y:A
-- ww -e
. .f%
.s .* . .. , . .
n' '4 ".".- ,2
.l
'2 m . - ,_; . - .
fJ r. T* - y l' Y *
.. peg", ;l"; Ti fj k.
( Y [.: .. ' p
'k'.M.. - -
c ~ l .g' .'. [ - t .f ,. : , mn - ug. ; ', ; ; x .
.va ; m
- r. -- :? - ' , _ ,, , - .-
'l ' _. _ .
f f % b'Y? l e
..J- '.
. r g .-
.l . : ~.w l : l ;. lL ; 5 ' ;
4 f - f_ ,= l-
'Y * '
^
~ , e , . .- c , t d .. -. _ ,. -- ,,
.s -
4 .
- y. ..,.... ;' % .. *. ,* *
- a. .......,..........,,........,,.......,
c , " g
, , . , . . r ,
c.. , +i - _ , .- .. A - y<
" ., c, .
* . [ . "*
- G
- 6 ' ' ' -
in .y . . . .. .
. y 7 y
- p. ,. . ..
, l
.' _ s , , -, > >
. I .'
<* O '
i + -
, 7 u.... . . . . . . . . . . . . . . . . . . . . . . . . .
*l-' Nb l
... .- .. +$. - , .
,A- - -.L ,,s.-.--s, ... .n m , :
': . . , m - *
..y J' ' . . '. msg <; ,- 'y #, .-
[ .s
'_ _% , y n ', ', ' W
'} ,
c. y ' ' ' [ " _, ,.+<....E> pyanek *
- 'g#$
^
' ' N I '. $ _ _WS.*,) $ ' :. . ,V T 3*. . #g'T "~ g' , f. "
.'i'.'u O
;A * " f, C [ , .g A
[
,y .
(
~
em .4 .N / . euunsa . . ,
' It '
e~ % 4ss+ g, I a . f MI sh. ; ,. . . .. . .<3.asme M (,.g,4 .. ., +* - g --
, * * - - s - ..
.' + _ . 4 - . . $.
- g,,. -.. -
p/. .'c< .. -' ,. 7', . 7 e
*9 *g ,g^' ; ,, '
1
.}. ,'( ' , . ,-[ ,
l' .
',., ; , s. , .
, y '[ ' . .
' ~
s I{ g '- _
- N . ' . , . < -- . .' ] . .. -
31 ,. '.j y i; ;. , ,. -
. ' ' - " g v .,
v f.
,g eilim j N * , *
- l ,
,.,'. ', W-
,g ' . -
1
..,g. .
- _~...
i .g
' MilM98 . ..,
.g*
*-.,u
-4 magine
-, ,. g-s
?
'~.j ' .
* ' i . span ='*: ' f "
T . -
+. . . , g..
= : , , .
-..~ . ' - * * , , , ,.
9 8 a .
.._' i , -
T N'-
.,:.,,+.
1 q . . Q . , j$,, ' + , . . ,
- E, .: '#". '
\ . - .
,,6* W ' E4 4
.'.*l -
?
.L f . l. l.i .: . .z , .
i . -[6*- g&
.Q *ky, ' .,
, ' . ~ ..- .
gg' =
.y ..
m.,g g,. .. , ,
. e -. . ,
w ..
.,. s .g --
4 - - o -
,,* O [..'
3 ; {," ,- ( '
- 45. , =
'?.},h'(.'- ? ' '
#'N '
, L,' .
J, . l -
*-*K .
ft , - 5 ..c. : s^ *
, - .. w . * .
tni&g. . ' * . n
. . {. h. ", l ' ; [ . L. ,
I. . l x. y Y i - y y t
' ., z ( , - ,
,Y,' '. y* , , _ A ,,j - ,.-
's :W ~ : " = +
.-J . .'-
, . ' t 2 g (N,* ' ' -
3 .# q 4-. > , J
- e *
- s. .. N _._.. . ' ,.( ..
e = y s '. , .
. ,. . s
~,'.'r qk
(, c i ; '(
., *'.9'.pirg p, s ,= = . ~-
4
,. , , -- 1_
~.....
m .v . : .- .- A
. , . . . - ' ei . , ,'. . ,_ # .
8-E.
- Y The Bourse is an 88-year old, l sive reconstruction and is .
histoncally-certified building now a retail complex and which has undergone exten- office center 17
Tschncingy Cleaning Up PCB's. l'he Com- gosernment regulation. PCICs were manuf ac-pany is ticld testing a unique process designed tured on a large scale between 1929 and 1977 and to detoxity and destroy the suspected cancer were used in numerous products. intludmg adhe-tausmg thenneals know n as polychlorin.md sn es. mks. lubricants. p.unt s and plastics in the biphenals ( PCll'si ~Ihe Company is cooperating utihty industry. PCili were used as an insulat-with the Frankim Institute Research 1. abs (HRIJ mg fluid in capacitors and transf ormers. in this demonstration program. w hich msolses I he process has been ettec-a protess deseloped t.) FIRI. chemists I his tn e in laboratory truls and has the appros al piocess reduces PCICs to harmless table sah. of the Enuromnental Protection Agency i EPA i. therchy clinunating the hazards assocuted with the city of Philadelphia. and the Pennsylsama handimg and transporting this material. Ikpanment of Enuronmental Resources Once Pres iously, the Company the field truls are prosen successf ul, the Com-shipped transformer oils long distances to in- pany will seek the EPA's permission to con-cmerators or landtills. This is now presented by tinue batch processing This project is another
.,,; .y .
y.- ; ...
, gy + _
+. -
<_. ,l ..-, . .,
t
'.^gj ,
4 f ,[ , . " ' :[ "' ' g k'h y ' Q _ .. ',. PE la field-testing a unique process to destroy polychlor-insted biphenals, or PCBs. 3qjg L George Raudenbush, an gg Assistant Foreman in Main- p tenance Division, checks the PCB processing. , f q
' i j
rgh;, s y l l l I e a Bud Lockwood, a Senior Engi. The system provides voice i neer in Construction Division, and data communications be-inspects the coupling equip- tween the main office and the ment for the new microwave Peach Bottom-Muddy Run-communication system which Conowingo area as well as gg was completed in August 1981. intermediate points.
Ccmmunicnti:na example of how modern technology is being Community Outreach Program. applied effectively. The Corporate Communications Department is Electric Vehicles. Philadelphia carrying out a community outreach program, de-Electric Company was selected by the Depart- signed to bring the personal touch to meeting ment of Energy to participate in the Electric and customers' needs. The key to the program is let-Ilybrid Vehicle Demonstration Program. The ting people know that PE is really thousands of goal of the program is to advance electric schicle individuals trained and willing to help our cus-technology and market potential. tomers. The program also serves the Company Under the cost-sharing agree- by opening a dialogue with many customers, ment between Philadelphia Electric and the De. giving the Company a better insight into cus-partment of Energy, Philadelphia Electric pur- tomer thinking. chased 6 vans and trucks and 14 passenger cars Among the best ways to for use in its transportation fleet. Each electric achieve this give-and-take communication with vehicle will replace a petroleum-fueled vehicle. the public was to get groups of customers with During the three-year pro- similar broad interests together with Company gram, the Company will collect data on perform- people to talk over mutual concerns. Eight cus-ance, reliability and safety, vehicle maintenance tomer councils were formed by the suburban di-and public awareness. Periodic reports to the vision managers and by the Philadelphia district Department of Energy will record the Company's managers. 'Ihe councils meet regularly on raat-experience for use in a national data base. ters of topical and timely interest. Members of Acoustic Stress Monitoring. these councils live in the same geographic area Acoustic Emission Testing techniques, which and reflect broadly the opinions of their varied were initially developed by the Company to in- communities. A Clergy Council is made up of 40 spect buried gas pipe lines, have been recently members of the Philadelphia clergy who have applied to other Company structures. The most arranged for PE representatives to speak at recent successful application of acoustic emis- church meetings and after church services, sion by PE engineers is the development of a primarily on energy conservation. A Social Scr-system to continuously monitor the stress of fiber- vices Council is composed of over 50 members glas booms on aerial lift trucks. This system representing public and private social service measures the energy waves produced by the fiber- agencies. An IIispanic Council is composed of glas material indicating any deterioration of 41 members w ho represent business, social agen-the material well before failure, assuring the cies, civic and community groups and organ-integrity and safety of the boom. izations in the growing Hispanic community. An in a Research and Testing pro- Energy Education Advisory Council (EEAC) gram now underway, Acoustic Emission Testing was established in 1976 to broaden the base of techniques are being used to determine the in- public understanding on energy. The EEAC, tegrity of fiberglas ladders. An examination composed of teachers, administrators, cur-rig and associated instrumentation have been riculum and environmental specialists, has de-developed to test and qualify all Company veloped extensive curricula materials on energy fiberglas ladders. as well as debates, seminars, in-service training
- o j
, gg; e *p-7 m '
ranging the entire education spectrum. A Profes-
.; i .
sional Advisory Council on Energy was estab g, [ [ ' ' ' lished recently composed of professionals in sci-9.ck, , $, f i. ?. . ' ij '...,.;.., $ : : j
~
ence, engineering and technology.
.,y _ . .. .{
. IT L
The Company is participating in an electric vehicle demon-stration program sponsored by the Department of Energy. One of the electric cars is shown at Head House Square, Philadelphia.
- g. - _._ , .y _ _
19 a
l Paracnnisi Management Training Programs. During 1981. the third phase of an m-depth deselopnient program for management, supersisory employces began. I his third phase prosides training in managing performance and
~
will be ottered to about 1.80) employees Since 1976. all lesels of the Company 's management team hase under-gone traming to improse and upgrade managerial skills It is the aun of Philadelphia Electric Co., pany to proude managerial personnel with the tools to deselop to the tullest extent of their capabihties In addllion. the Company Continued trainmg in problem - solung and decision-making techmques 'l his program. w hit h began m 1976. has been ottered to I,MM) employees meluding both manageriai I superusory personnel and key non-supersisory e mploy ce s . C P R Program. Cardio-pulmonary Resuscitation ICPR) traming a ht'e sas mg methmi of resuscitation w hich combines mouth-to-mouth respiration and closed chest he.ut compressions. w as miroduced by the Com-pany m 1976 (her the past the years Company mstructors -all solunteers and Red Cross t ertified -hase trained oser 9.(NM) employees m the use of CPR. I he salue of this training was reall/ed within a few iiionths of its introduction
~
on the sy stem. In . lune of 1976 one ot the original mstructors successf ully apphed CPR to sase a neighborhood child. Smce this first success-tui etton titteen employees base receised retopmtion from the National Safety Council or the American Red Cross for their use of ('PR to sase or attempt to sase hses of sictims of ( ardiac arrest - j S* { 1 -9 6 y < 0 ?
+ 1 J
'h .
f w Y
- 'f g2' g
/
p YQ j-
*h. .
%. . ~"W - 5 j
- w. i y ' '2&107 ll"~[;
- M332ECb Customers Service Represent- puter technology to respond atives, such as Debby Morgan, rapidly to customer questions, g are assisted by modern com-
- -__a d a
Management's Discussion and Analysis Financial Snction Contants of Financial Condition and Results of Operations 21 \linagement s ! hw usshin uw General. I he res enue kilaly sis ill i Inancial pri w th iit reccilt s car s has been acaiinpanied fa tndithin Jnd Nesult' ilt bs sutwtantial ins rc.ises in iiperating ciwis and ( )perat ion s c.ury ine tharges on mereased ms estment in plant 23 ('onstihdated Statenients of and equipment \ny f uture increases in such I nt t inic t i hl s and t harges lild) be c\pected (ti atlet t l 24 ('onsohdated ILuante Shech tuttue net nicome and e.u nings per aserage 26 ('onsohdated Statenients ut tommon share adscisely unten periodit rate l Ret.uned I.arning rehet is obt.uned to ottset them See Note 14 of l 26 ('onsohdated Statements of Notes to Fmancut Statements for the estimated Changes m Emantul ettects of inflation In addition, the capital
!'t wit h )H Cali)ing charges ani>ci.ited wiih the construction 27 Notes it 1 inant ul Statements of the I.imerit k station and other proiet ts w hic h 35 Accou nt ant s ' Report .ne capitalized by t reditmg income with an 36 I inancial Statistics allow ance for tunds used Juang construttion 36 ()perating Stiltistit s I $1'l IX'l and recosered thri> ugh tuiure l
depTeCiiitlon Ut tw iCplesCuts J fHJlor Jhnllhin of net inconN and w il! Omtinue to increase until the l'irst I .iinefit k um! gocN into sersicC unlCss prior to that tune. some of the carrying charges are recos ered in res enue. Sluggish econonne conditions in the Company i sersice area also are has mg an ads erse ettect on operating results Although the return on as erage tommon equity has incre.ised slightly durmy the past three years. the return on msestment is still substantially below w hat the Pennsy h.nua Pubhc l'tihty Conunission i Pl'C) illlt)w Cd as a tail rate tit' return in the ('oinp.iny \ last rate order I:ttectn e .\pril 2 5.1951. the Company put mio ettect a rate increase for electric operations unounting to 5lSX nulhon ()n January 15. 1982. the Conip.iny ptit intis ettect a rate mcrease for ste.un operations Jnlounting to b3 4 milhon ()n luly 29.19SI. the Company filed i requot with the Pl'(' toi an additional 5344 nullion in electric iesenue llearings h.n e been completed w ith brict'mp. tiral argu!Hent and decision lo taillow t he Pt (' [ has suspended the rate mcrease under agreement with the Company to May 21.1982 w hen a final l order is exiscted ()n S rptember 28.1951. the Company tiled with the Pl'C for an additional 53S ' nullion m gas res enue l'he PI'C has suspended the rate increase un:il June 27.1982. 3 I llearings on the gas increase began m January. 19S2 l he total %3S 1 milhon of requested increases in res enue is designed to impros e the CoIHp.ill) \ carnings and cash flow to enable the g, l'ompany to attract the capital necessary to I y ti..J'^ tinance its construction program. I he Company has no .iwuratiec that all iir ariy ;wintion of the l i
'Y t requested lHCreases will be giallted I he ('olupany estiinates that 5h percent iit the il 90 per share disidend paid ti, coIHmtin shareholders in 19Sl represents a return t il Capital w hich is ntit taxable a . dis idend inCtHile Illr i Ctleral incoIIIe f a\ purposes.
21
p_ Electric Operating Revenue. Taxes, Other than income. Increases in 1981 and 1980 reflect both higher Taxes, other than income, have increased due to base rates and the recovery of higher fuel increases in revenue, which is subject to a gross costs through fuel or energy adjustment clause receipts tax, and due to higher capital stock, billings. In addition, the increase in 1981 over realty and social security taxes. 1980 reflects the tale of the energy and capacity Allowance for Funds Used equivalent of Salem Unit No. 2 to Jersey During Construction.The increases in AFUDC Central Power and 1.ight Company during the for the last two years resulted from a higher second half of 1981. Kilowatt-hour sales of cost of capital for construction and increases electricity to retail customers declined slightly in construction work in progress. throughout the period. Interest Charges. Interest Gas Operating Revenue. charges on long- and short-term debt increased Increases in 1981 and 1980 primarily reflect in the last two years because of higher costs of the recovery of higher fuel costs. Mef sales of money and additional debt outstanding. The ratio gas increaseo 5.5 percent in 1981 over 1980 and of carnings to mortgage interest, which is a 8.9 percent in 1980 over 1979, due to increased measure of the Company's ability to issue j house heating and small commercial customers. additional long-term debt, has remained only Fuel and Energy Interchange slightly above 2.0 times, which is the minimum Expense. Fuel and interchange expense increased required for the issuance of new mortgage debt. 8.9 percent in 1981 oser 1980 and 64.8 per- Capital Expenditures and cent in 1980 over 1979 as a result of higher Changes in Financial Position.The Company prices for all fuels. is carrying on a construction program which is l Other Operation and estimated to require expenditures of $881 million l Maintenance Expenses. Other operation in 1982 and $2.3 billion from 1983 to 1985. Of and maintenance expenses have increased in these expenditures, approximately $1.9 billion the last two years due to inflation and to relates to the construction of the Company's two, growth in utility plant. 1055-mw nuclear generating units at Limerick, Depreciation. Increases which are scheduled for commercial oper-in depreciation in the last two years result ation in 1985 and 1987. The final costs of these from additions to plant in service. The increase units are currently estimated to be $4.2 billion. of 6.0% in 1981 over 1980 is due primarily Successful completion of this program is to Salem Unit No. 2 being placed in dependent on the Company's ability to obtain commercial operation. cxternal financing, primarily through sales of Taxes on income. Taxes on new debt and equity securities which are subject operating income increased in 1981 and 1980 as to market conditions and certain earnings tests. q the result of higher income. Income tax credits, The program also is subject to the licensing I net, included in other income, have increased requirements of the Nuclear Regulatory in the last two years as a result of the Commission, financing approvals by the PUC higher Allowance for Borrowed Funds Used and changes due to litigation. The Company During Construction. cannot predict the outcome of such regulatory Y # #" Ratio of Earnings to Return on Average Mortgage Interest Common Equity have been or will be met and that the economic rmm c-s Peni, desirability of the program has been aso _ ___ ,,______ demonstrated and that the program will be
. . g., _ _ . _ _. _ _ . _
successfully completed. Placing the Limerick units into ns.-F7 Ve U -- W F - ie . service will enable the Company to retire some
~^ '
h 7N F of its older, less-efficient fossil units 'and to 8"~ $ [ [- [76,M-- M lessen its dependence on high-cost oil. In d Npp p{ hg(f
~ - --
addition, when the units are completed, it is p v2
-p expected that the Company will realize fuel /
p A t' --@ savings estimated to be from $250 million to
, so _ q f -h @y io J' $1.0 billion per year as compared uith obtaining us -p h 4 k l k p[ Ej Y ]f[[ypk electricity from alternative generating sources. .
e- a r 1E Interim financing of I
.p p h 4f _> 4 %f the construction program is provided by im . i p I M$ . _.. I h hk [ commercial paper borrowings and short- and
_ ( Y hi .M _b h]#My intermediate-term bank loans, which are also 3 (e [$ b d h 4_[y2 [y [g [ 3M.{E dependent on the Company's fir.ancial position. L {k i; @ f h ,#O
' fD N
%p be
_ n e L; a y p{n h J y, M'f, [a he e"'
':} %t k ;
k}' *k[ 0 m = L=a - - 0-r? 78 - 79 eo 81 77 78 79 80 et one Aamut ty PUC _ II tmus Actml
Philadelphia Electric Company and Subsidiary Companies ~ Consolidated Stat ment 3 of incima For the Year Ended December 31 1981 1980 1979 Operating Revenues (Thousands of Dollars) Electric S2,002,063 $1,766,956 S1,311,891 Gas 356,431 290,743 221,135 Steam 74,931 65,695 45,479 Operating nevenues 2,433,425 2,123,394 1,578,505 Operating Expenses Fuel and Energy Interchange 1,187,635 1,090,497 661,724 Other Operation Expense 360,840 279,587 247,152 Maintenance 156,878 136,963 117,491 Depreciation 130,283 122,947 120,608 Taxes on Income 129,484 93,673 79,055 Taxes, Other than income 145,312 133,761 106,676 Total Operating Expenses 2,110,432 1,857,428 1,332,706 Operaung income 322,993 265,966 245,799 Other income Allowance for Other Funds Used During Construction 65,013 50,483 46,008 income Tax Credits, net 63,164 49,025 33,884 Other, nel 2,457 3,425 1,710 Total Other income 130,634 102,933 81,602 Incime Before Interrt Charges 453,627 368,899 327,401 Interest Charges 1.ong. Term Debt 266,691 224,970 192,990 Short-Term Debt 33,155 13,865 7,315 Allowance for Borrowed Funds Used During Construction (123,784) (97,067) (67,375) Net Interest Charges 176,062 141,768 132,930 Net income 277,565 227,131 194,471 Preferred Stock Dividends 53,804 52,181 44,773 Earnings Applicable to Crmmon Stock S 223,761 S 174,950 $ 149,698 Average Shares of Common Stock Outstanding (Thousands) 99,557 87,302 80,529 Earnings Per Average Common Share (Dollars) S2.25 S2.00 $1.86 Dividends Per Common Share (Dollars) S1.90 $1.80 $1.80 See notes to financial statements. E
Philadelphia Electric Company and Subsidiary Companies , Consolidated - C:lznca Sheet 3 - i December 31 ; ASSETS 1981 1980 Utility Plant, at original cost (Thousands of Dollars) In Service Electric S4,163,088 S3,708,715 Gas 371,239 332,599 Steam 54,152 53.955 Common, used in all services 118,701 118,387 4,707,180 4,213,656 Less: Accumulated Depreciation 1,330,611 1,235,715 i 3,376,569 2,977,941 Net Utility Plant in Service Construction Work in Progress , 2,337,517 2,202,100 5,714,086 5,180,041 Nonutiuty Property and Other investments 77,780 58,697 i Current Assets , Cash and Temporary Cash Investments 30,678 6,678 Accounts Receivable Customers 277,292 262,447 Other 65,131 37,910 f Materials and Supplies, at average cost ; Fuel (coal, oil and gas) 83,612 82,216 Operating and Construction 48,581 38,870 Deferred Fuel Expense (31,299) 11,048 Prepayments 6,819 6,180 480,814 445,349 Deferred Debits 31,515 18,462 Total $6,304,195 $5,702,549 See notes to financial statements. 1 i 24
December 31 UASILITIES 1981 1980 Capitalization (Thousands of Dollars) Common Shareholders' Equity Common Stock $1,572,388 S1,377,463 Other Paid-in Capital 3,888 2,581 Retained Earnings 387,251 353,570 1,963,527 1,733,614 Preferred Stock Series Without Mandatorv Redemption Requirements 372,472 372,472 k Series With Mandatory Redemption Requirements 266,929 274,330 long-Term Debt 2,745,723 2,371,933 5,348,651 4,752,349 ) ~ Current UmbiHties Short-Term Debt llank loans 54,225 5,900 Commercial Paper - 46,690 l Current Maturities oflong-Term Debt 36,062 130,789 Accounts Payable 165,485 164,637 Taxes Accrued 68,421 72,121 Deferred Income Taxes-Fuel (17,052) 5,717 Interest Accrued 82,294 64,943 Dividends Declared 23,380 22,969 Other 18,130 17,372 ) 430,945 531,138 Deferred Credits Accumulated Deferred Income Taxes 273,528 224,953 Accumulated Deferred insestment Tax Credits 204,061 163,422 Other 47,010 30,687 524,599 419,062 Total $6,304,195 $5.702,549 h i See notes to financial statements.
- _ _ _ _ _ - _ _ _ - __ b
4 Philadelphia Electric Company and Subsidiary Comp'anies - 1 Consolidated Stat:maat3 of R;trined Ecrninga For the Year Ended December 31 1981 1980 1979 (Thousands of Dollars) salance, January 1 S 353,570 $338,154 S333,649 Net income 277,565 227,131 194.471 631,135 565,285 528,120 Cash Disidends Declared Preferred Stock (at specified annual rates) 53,762 52.973 44,760 Common Stock (51.90 per share in 1981 and 51.80 per share in 1980 and 1979) 189,476 157,423 144,984 Espenses of Capital Stock issues 646 1,319 222 243,884 211,715 189,966 Balance, December 31 S 387,251 $353,570 S338,154 Crnsolidated Statements of Changes in Financial Position Sources of Funds Net income S 277,565 $227,131 $194,471 Charges (Credits) Not Affecting Funds Depreciation, Amortization and Spent Fuel Costs 144,031 130,354 123.036 Deferred Income Taxes, net 2,011 (12,121) 44,854 Investment Tax Credits, net of Amortization 25,049 28,135 (3,019) Allowance for Other Funds Used During Construction (65,013) (50,483) (46,008) Total from operations 383,643 323,016 313.364 Sale. of Securities l l.ong Term Debt 423,500 275,000 200,000 Preferred Stock - 72,000 - Common Stock 194,925 137,816 99,988 increase (Decrease)in Short-Term Debt 1,635 (32,M7) 68,968 Sale of Salem Station Nuclear Fuel 100,166 - - Sale of Tas llenetits 53,743 - - Total from Financings 773,969 452,219 368.956 Total sources $1,157,612 $775,235 $682,320 ! Uses of Funds Additions to Utility Plant 787,075 579,802 421,615 Allowance for Other Funds Used During Construction (65,013) (50,483) (46,008) Dividends on Preferred and Common Stock 243,238 210,396 189,744 Increase (Decrease) in Deferred Fuel Espense (42,347) (72,464) 79,285 Retirement of 1.ong-Term Debt 137,470 140,671 56,169 l Increase (Decrease) in Other items of Working Capital 62,144 (36,286) (28,114) l Other, net 35,045 3.599 9,629 Tota Uses $1,157,612 S775,235 5682,320 l See notes to financial statements. _ .N
l Notes to Financial Statement 3 , r-l 1. significant General. All utility subsidiary companies of Philadelphia Electric Company are wholly-owned Accounting and are included in the consolidated IN meial statements. Non-utility subsidiaries are included in investments and Policies: accounted for by the equity method. The accounts are maintained in accordance with the uniform systems of accounts prescribed by the regulatory authorities having jurisdiction. Revenues. Revenues are recorded in the accounts upon billing to the customer. Rate increases are billed from dates authorized or permitted to become effective by the regulatory authorities. Fuel Expenses. For Gnancial reporting purposes, the Company defers the under or over collection of fuel expense w hich is recoverable under energy adjustment clauses until it is subsequently billed. For income tax purposes, fuel expense is considered an expense when incurred. The Company leases nuclear fuel for use in its nuclear generating stations. Nuclear fuel costs are charged to fuel expense on the basis of the number of units of thermal energy produced as they relate to the estimated total thermal units to be pnx!uced oser the life of the fuel. Commencing in May,1981, the estimated disposal costs of spent fuel are being charged to operations as permitted for rate making purposes. Such amounts, net of related deferred income taxes, are deposited in an escrow account for funding of future costs. The Company believes that any additional costs, which may be significant, would be recoverable through adjustments of rates charged to its customers. Depreciation. For financial reponing purposes, depreciation is provided over the estimated service lives of the plant on a straight.line basis. Commencing in May,1980, the estimated decommissioning costs of portions of the nuclear plants are being charged to operations as permitted for rate making purposes. Such amounts, net of deferred income taxes, are deposited in an escrow account for funding of future costs. The Company believes { that any additional costs, which may be significant, would be recoverable through adjustments of rates charged to its customers. The annual depreciation provisions, expressed as a percent of average depreciable utility plant in service, were appmximately 3.019 for 1981,3.06% for 1980 and 3.119 for 1979. Income Taxes. Deferred income taxes are provided for differences between book and taxable income to the extent permitted for rate making purposes. Investment tax credits, other than credits resulting from contributions to the Tax Reduction Act Stock Ownership Plan for employees which do not affect income, are deferred and amortized by credits to income over the estimated usefullife of the related utility plant. Allowance for Funds Used During Construction (AFUDC). AFUDC is a non i item which is defined in the uniform systems of accounts as "the net cost for the period of construction of t uwed funds used for construction purposes and a reasonable rate on other funds when so used." AFUDC is reco.ded as a charge to Construction %brk In Progress, and the equivalent credits are to " Interest Charges" for the pre-tax cost of bomowed funds and to "Other income" for the remainder as the allowance for equity funds. The rate used for capitalizing AFUDC, which averaged 8.659 in 1981,7.859 in 1980, and 7.45% in 1979, is computed under a method prescribed by the regulatory authorities. The rate is a " net after-tax rate" and the current income tax reductions applicable to the j interest charges capitalized,563,875,000 in 1981, 550,083.000 in 1980 and $34,754,000 in 1979, are recorded in "Other Income." AFUDC is not included in taxable income and the depreciation of capitalized AFUDC is not a tax-deductible expense. Retirement Plan.The Company has a non-contributory trusteed retirement plan applicable to all regular employees. Pension costs include normal cost for the year and amonization of unfunded prior service costs, over ten to twenty-year periods (see Note 10). Approximately 79% of such costs were charged to operating expense and the remainder, associated with construction labor, to the cost of new utility plant. f Gas Exploration and Development Costs.The Company has invested in several joint ventures for exploring and drilling for gas. These costs are capitalized under the full cost method and charged to operations commensurate with the use of gas produced by these ventures. Non-utility property and other investments at December 31,1981, and 1980, include unamortized capitalized costs of 546,294,000 and $32,224.000, respectively. 27 h
- 2. Common Stock: At December 31,1981 and 1980, Common Stock, wiihout par value consisted of 160,000,(XX) shares authorized and 108,507,097 shares and 92,632,571 shares, respectively, outstanding. At December 31 1981, there were 4,787,024 shares reserved for issuance under stock purchase plans.
Number of Shares Amounts Common Stock issued: 1981 1980 1979 1981 1980 1979 (Thousands cf Dollars) Public Sales 12,800,000 7,000,000 4,000,000 $154,786 S101,360 $63,460 Dividend Reinsestment and Stock Purchase Plan 2,667,081 2,399,418 1,740,991 34,809 31,593 26,389 Employee Stock Purchase Plan 407,445 349,937 279,315 5,330 4,863 4,416 Ta Reduction Act Stock Ownership Plan - - 350,225 - - 5,723 Totals 15,874,526 9.749,355 6,370,531 $194,925 S137,816 599,988
- 3. Preferred Stock, $100 par, cumulative, at December 31,1981 and 1980:
Number of Shares Amount Current Refunding Redemption Restricted Authorized Outstanding Price aa) Prior to ib) 1981 1980 1981 1980 (Thousands of Dollars) Series (without mandatory redemption requirements): 9.50 9 S106.50 750,000 750,000 750,000 $ 75,000 $ 75,000 8.759 107.00 650,000 650,000 650,000 65,000 65,000 7.859 105.00 500,000 500,000 500,000 50,000 50,000 7.80 % 105.50 750,000 750,000 750,000 75,000 75,000 7.75 % 103.00 200,000 200,000 200,000 20,000 20,000 ' 4.68 % 104.00 150,000 150,000 150,000 15,000 15,000 4.4% 112.50 274,720 274,720 274,720 27,472 27,472 4.3% 102.00 150,000 150,000 150,000 15,000 15,000 3.89 106.00 300,000 300,000 300,000 30,000 30,000 3,724,720 3,724,720 3,724,720 372,472 372,472 Series (with mandatory redemption requirements) ic) and id>: 15.259 (Sold 1980) 115.25 5-1-90 500,000 500,000 500,000 50,000 50,000 104 (Sold 1980) 104.44 5-1-85 220,000 220,000 220,000 22,000 22,000 9.529 106.25 5-1-86 500,000 453,920 490,210 45,392 49,uli 8.75 % 108.75 5-1-88 500,000 500,000 500,000 50,000 50,000 7.3259 104.98 750,000 660,000 690,000 66,000 69,000 79 104.00 400.000 335,370 343,090 33,537 34,309 2.870,000 2,669,290 2.743,300 266,929 274,330 Unclassified 3,405,280 - - - - Total Preferred Stock 10.000,000 6,394,010 6,468,020 $639,401 $646,802 a Redeemable, at the option of the Company, at the indicated dollar amounts per share, plus accrued dividends. ibi Prior to the date specified, none of the shares of each series indicated may be redeemed through refunding at aa interest cost or dividend rate which is less than the dividend rate of such series. m Redemption requirements (par value)in the period 1982-1986 are as follows: 1982-$3,000,000; 1983-$$,129,000; 1984-$5,800,000; I985-55,800,000; and I98(>--$I2,700,000. idi The escess of the aggregate par value of reacquired shares,74,010 shares in 1981,45,210 shares in 1980 and 40,490 shares in 1979, over the aggregate purchase price is reflected in Other Paid-In Capital: $1,307,000 in 1981, $378,000 in 1980 and $235,000 in 1979.
- 4. Long Term Debt, at December 31,1981 and 1980:
Philadelphia Electric Company 1981 1980 Series Due (Thousands of Dollars) First Refunding N1ortgage Bonds sai $ $ 2%% 1981 - 30,000 3%% 1982 35,000 35,000 3%% 1983 20,000 20,000 37a% 1985 50,000 50,000 4%% 1986 50,000 50,000 3%%-5% 1987-1989 130,000 130,000 4%%-15%% 1992-1996 455,256 383,007 i 6%%-11Ya% 1997-2001 559,988 565,089 8%%12%% 2002-2006 300,000 500,000 6W18%% 2007-2011 448,500 198,500 Total First and Refunding N!ortgage Bonds 2,248,744 1,961,596 Notes Payable-Banks ibi 1984-1987 225,000 225,000 Pollution Control Notes 5.5%-13% 1982-2011 130,205 31,250 Debentures 12%% 1981 - 100,000 Debentures 4.85% 1986 22,710 22,710 ILbentures 14%% 1990 50,000 50,000 Debentures 14%% 2005 100,000 100,000 Unamortized Debt Discount and Premium, Net (14,162) (7,190) Total Philadelphia Electric Company 2,762,497 2,483,366 Philadelphia Electric Power Company-a subsidiary: Sinking Fund Debentures 4%% 1995 19,356 19,429 Unamortiied Debt Discount (68) (73) Total Long-Term Debt 2,781,785 2,502,722 Current Maturities included in Current Liabilities ici (36,062) (130,789) Long-Term Debt included in Capitalization $2,745,723 S2,371,933 tai Utility plant is subject to the lien of the Company's mongage. ab) At interest rates ranging from prime rate to 112%9' of prime rate. sci Long-term debt maturities in the period of 1982-1986 are as follows: 1982 - 536,062,000;1983 - 529.207,000; 1984-585,300,(XX); 1985-5160,300,000, and 1986-$80,300,000. The Company has an agreement with a group of banks for a 5400 million revolving credit and term
!oan. The agreement provides a revolving credit as ailability through Ntay 31,1985 and repayment during the period June 1,1995 to May 31,1987. There is a commitment fee of %4 on the S400 million during the credit availability period and thereafter %% on outstanding balances. The interest rate during the credit availability period is 105% of either the prime rate of a major bank or 19 abose the rate on 90-day certificates of deposit, whichever is higher, and 1079 of such higher rate during the repayment period.
- 5. Short Term Debt: 1981 1980 (Thousands of Dollars)
Average Short-Term Borrowings $146,273 S54,716 Average Interest Rates, Computed on Daily Basis 17.80 % 15.07 % Maximum Short-Term Borrowings Outstanding $266,512 $161,143 Average Interest Rates on Short-Term Borrowings at December 31: Bank Loans 16.37 % 20.53 % Commercial Paper - 15.11 % included in Bank Irans as of December 31,1981 is $50,000,000 at an interest rate of 16.5%, under a $100,(XX),000 Two-Year Euro Dollar revoising credit facility, effective April 6,1981. Such credit facility prosides for a commitment fee of 3/89 on the unused amount of the credit facility. l As of December 31,1981 the Company had borrowed $4,225,000 under informal lines of credit with domestic banks aggregating $239,175,000. The Company generally does not have formal compensating balance arrangements with these banks. l l 29
V
- 6. Jointly-Owned The Company's ownership interests in jointly-owned utility plant, at December 31,1981 were as follows:
Electric Transmission Utility Plant: Production Plants Plant l Peach llottom Salem Keystone Conemaugh Operatoi Philadelphia Public Service Pennsylvania Pennsylvania Various Electric Electric and Electric Electric Companies Company Gas Company Company Company Participating Interest 42.49% 42.59% 20.99 % 20.72 % 21% to 43% Company's share of: (Thousands of Dollars) Plant in Service $387,761 $798,805 S47,015 $57,163 S69,141 Accumulated Depreciation 73,520 56,528 19,894 16,388 7,275 Construction Work in Progress 12,064 18,588 1,068 761 - The Company's participating interests are financed with Company f'mds and, when placed in ser ice, all operations are accounted for as if such participating interests were wholly-ow ned facilities.
- 7. Taxes on income: 1981 1980 1979 (Thousands of Dollars)
Included in operating expenses: Current Federal S 75,558 S 55,416 S 29,844 Current State 26,866 22,243 7,376 102,424 77.659 37,220 Deferrea Federal 6,007 (4,653) 41,058 Deferred State (3,996) (7.468) 3,796 2,011 (12,121) 44,854 t Investment tax credits, net of amormation-Federal 25,049 28,135 (3,019) Ltal Federal 106,614 78,898 67,883 Total State 22,870 14,775 11,172 f
$129,484 S 93,673 $ 79,055 Included in other income:
Current Federal (50,299) (39,132) (27,021) Current State (12,865) (9.893) (6,863) S(63,164) $(49,025) S(33.884) I Total income tax prosisions: Federal 56,315 39,766 40,862 State 10,005 4,882 4,309 S 66,320 S 44,648 S 45,171 Investment tax credits reduced Federal income taxes currently payable by $29,817,000 in 1981,532,428,(XX) 5 Dao :md $605,000 in 1979. Approximately $53,000,000 of additional investment tax credits avalable in 1981 have not been realized due to limitations based on taxable income. These credits may be used to reduce Federal income taxes in future years through 1996. Investment tax credits consist of(a) the basic credits allowable of 109 plus (b) a credit of 1 %9 resulting from the Tax Reduction Act Stock Ownership Plan for employees (56,200,000 in 1981, noce realized in 1980 and 1979). The additional credits w hich are passed on to the employees of the Company in the form of Philadelphia Eleeric Company Common Stock have no effect on net income. In December,1981, the Company sold the tax benefits attributable to its ownership interest in the Salem Station Unit No. 2. This transaction was structured under the safe harbor lease provisions of the Economic Recovery T,a Act of 1981, The proceeds from the sale, 553,743,000, have been credited to Deferred Income Taxes (524,759,(XX)) Deferred Investment Tax Credits (521,863,000) and other Deferred Credits ($7,121,000) and will be amortized by credits to income over the estimated useful life of the plant. lleginning May 1,1981, the normalization ofincome taxes associated with capitalized pension costs and payroll and realty taxes was adopted for both accounting and rate making purposes. 1 ~ ao
i Prosisions for deferred income taxes consist of the following tax effects of timing differences between tax and book income: 1981 1980 1979 (Thousands of Dollars) Depreciation and amortization S 25,452 S 25,655 S 26,981 Recoupment revenue - - (18,462) Deferred ruel expense (21,804) (37,369) 40,899 Other (1,637) (407) (4,564) S 2,011 S(12,121) S 44,854 The total income tax prosisions ditTer from amounts computed by applying the Federal statutory tax rate to income and adjusted income before income taxes for the following reasons: Net income $277,565 S 227,131 S 194,471 Total income tax provisions 66,320 44,648 45,171 Incon.e before income taxes 343,885 271,779 239,642 Deduct-allowance for funds used during construction (non-taxable) 188,797 147,550 113,383 Adjusted income before taxes S155,088 S 124,229 S 126,259 Income taxes on above at Federal statutory rate of 46% 71,340 57,145 58,079 increase (decrease) due to: Excess of tax depreciation oser book depreciation not normalized (551) (1,338) (2,987) State income tax, net of Federal income tax benefits 5,436 2,636 2,327
!] Taxes and pension costs capitalized but expensed for tax purposes (3,226) (7,028) (6,382)
Amonization of investment tax credits previously deferred (4,769) (4,293) (3,624) Other, net (1,910) (2.474) (2,242) Ltal income tax provisions S 66,320 $ 44,648 S 45,171 Prosision for income taxes as a percent of: Income before income taxes 19.3% 16.4% 18.8% Adjusted income before income taxes 42,8% 35.9% 35.8 %
- s. Taxes, Other than Gross receipts $100,912 S 90,487 S 67,385 income: Capital stock 19,600 19,046 17,030 Realty 9,555 9,398 8,819 Other, principally social security 15,245 14,830 13,442 Total S145,312 S133,761 $106,676
- 9. Leases: Certain leases, including the nuclear fuel contracts for Peach Bottom and Salem, meet the criteria of a capital lease as defined by Financial Accounting Standards, but are accounted for as operating leases in accordance with the rate making process. If these leases were capitalized they would not have a material effect on assets, liabilities or related expenses.
t The minimum rental commitments under all noncancelable agreements aggregated $378,514,000
; at December 31,1981. The annual rental commitments are estimated to be $83,020,000 for 1982; $89,459,000 for 1983; $89,995,000 for 1984; $46,034,000 for 1985; and $9,155,000 for 1986.
Rental pay ments charged to operating expenses were as follows: 1981 1980 1979 (Thousands of Dollars) Nuclear Fuel $26,709 S21,177 $21,747 Other 24,782 21,235 19,912 Total $51,491 S42,412 S41,659 The Company's proponionate share of the contractual liabilities to purchase nuclear fuel under f lease agreements for the Peach Bottom Station and Salem Station as of December 31,1981 was $199,045,000. independent fuel companies have been authorized to acquire and ow n up to a maximum of $425,000,000 of nuclear fuel at any one time and have contracted to sell the energy therefrom to the Company. l 31
]
l
- 10. Retirement Plan Retirement plan costs, which are funded as accrued, aggregated 531,7(X),(XX)in 1981, costs: 528,575,lXX)in 1980, and $25,713,(XX)in 1979. Plan data as of the dates of the most recent actuarial reports is as follows:
January 1 1981 1980 Actuarial present value of accumulated plan beneSts (based on 6.57< (Thousands of Dollars) assumed rate of return): Vested $326,786 S295,999 Nons ested 38,317 35,453 ! S365,103 $331,452 Net assets available for benents $332,027 S277,223 1
- 11. Segment Electric Gas Steam Total (Thousands of Dollars) 1981 Operating revenues $2,002,063 S356,431 $74,931 $2,433,425 ,
Operating expenses, excluding depreciation 1,586,506 322,008 71,635 1,980,149 l Depreciation 117,270 11,294 1,719 130,283 i Total operating expenses 1,703,776 333,302 73,354 2,110,432 Operating income S 298,287 $ 23,129 $ 1,577 S 322,993 ; Utility plant additions S 746,535 S 40,432 S 108 $ 787,075 December 31: Allocable assets Net utility plant (*) 5,372,240 314,652 27,194 5,714,086 N1aterials and Supplies 101,956 29,986 251 132,193 SS,474,196 S344,638 $27,445 5,846,279 Nonalk> cable assets 457,916 Total assets $6,304,195 1980 Operating revenues $1,766,956 $290,743 $65,695 S2,123,394 , Operating expenses, excluding depreciation 1,414,038 258,063 62,380 1,734,481 ! Depreciation 111,106 10,169 1,672 122,947 Total operating expenses 1,525,144 268,232 64,052 1,857,428 I Operating income $ 241,812 S 22,511 S 1,643 S 265.966 Utility plant additions S 540,628 5 38,833 S 341 S 579.802 ! December 31: Allocable assets: Net utility plant (*) 4,867,879 283,414 28,748 5,180,041 N1aterials and Supplies 102,193 18,582 311 121,086
$4,970,072 $301,996 $29,059 5,301,127 Nonallocable assets 401,422 l
Totas assets $5,702,549 1979 Operating revenues $1,311,891 $221,135 $45,479 $1,578,505 i Operating expenses, excluding depreciatica 975,414 194,416 12,268 1,212,098 , Depreciation 109,990 8,944 1,674 120,608 l Total operating expenses 1,085,404 203,360 43,942 1,332,706 Operating income S 226,487 $ 17,775 S 1,537 $ 245,799 l Utility plant additions S 401,674
,$ 19,490 S 451 $ 421,615 December 31: Alkicable assets:
Net utility plant (*) 4,449,522 261,719 30,141 4,741,382 Ntaterials and Supplies 91,685 18,017 299 110,001 S4.541,207 $279.736 $30,440 4,851,383 Nonallocable assets 389,877 I Total assets $5,241,260 i (*; Includes construction work in progress and allocated common utility property. l 32
- 12. commitments and The Company has incurred substantial commitments in connection with its construction program.
Contingencies: Construction expenditures are estimated to be $881,000,(XXI for 1982 and $2,267,(XX),000 for 1983-1985. These estimates are resiewed and revised periodically to reDect changes in economic conditions, revised load forecasts and other appropriate factors. The nuclear plant facilities under construction require numerous permits and licenses,w hich the Company cannot be assured will be issued at completion of the facilities. The Price. Anderson Act places a " Limit of Liability" of $560,000,000 on each licensed nuclear l facility for public liability claims that could arise from a nuclear incident invohing any licensed facility in the nation. The Company and its co-owners of the Peach flottom and Salem Stations have insured for this exposure by purchasing private insurance in the maximum available amount of $160,000,(XX) and the remainder is provided by indemnity agreements with the Nuclear Regulatory Commission. In the event of a nuclear incident involving any licensed reactor in the United States, the Company could be assessed up to $8,500,000 per. incident with a maximum amount of $17,000.(XX)in any one year. The Company is insured for damage to its nuclear plant facilities at Peach flottom and Salem. 3 This insurance provides coverage for losses up to $450,000,000 and an additional $247,000,000 for losses in excess of $500,000,00(). Under the terms of the various insurance agreements the Company could be assesscd up to $28,000,000 for losses incurred at any of the plants insured by the insurance companies. The C ,mpany is
> a self. insurer, to the extent of its ownership interests, for any property loss in excess of the insurance coverage.
The Company, along with other nuclear facility operators, formed an industry mutual insurance company to provide replacement power cost insurance cos erage up to a maximum of $179,400,(XX) for a single unit loss over a two-year penod in the event of a major outage at a nuclear station. The premium for this coverage is subject to an assessment for adverse loss experience, and the coverage currently applies to Peach llottom Units 2 and 3, and Salem Units I and 2. The Company's maximum share of any assessment is $13,805,000. Actions have been liled in the U.S. District Court against the Company with respect to alleged discrimination in its employment or promotion practices. Counsel is of the opinion that the ultimate outcome of these actions would not hwe a material adverse effect on de financial position of the Company.
- 13. Quarterly Data The data shown below includes all adjustments (consisting of normal recurring accruals) w hich the (Unaudited): Company considers necessary for a fair presentation of such amounts.
Earnings Average Shares Earnings Per Quarter Operating Applicable to Outstanding Average Share Ended Resenues Net income Commen Stock (Thousands) (Dollars) (Thousands of Dollars) 1981 1980 1981 1980 1981 1980 1981 1980 1981 1980 hlarch 31 $647,927 $564,353 $69,904 $53,605 $56,382 $42,125 92,706 82,944 S.61 S.51 June 30 543,612 455,326 58,475 43,891 45,017 30,308 98,383 83,649 .46 .36 September 30 c20,697 567,810 79,198 78,620 65,763 65,052 99,227 90,557 .66 .72 December 31 621,189 535,905 69,988 51,015 56,599 37,465 107,749 91,970 .53 .41 Electric Sales Gas Sales amon u =wi* m emon cweet
;ig - - --__ _ . - - e0 - - - - - - -
__..-g 4_ . _ _ _ = _ . 27 - 70 - - -
-- f s
-- -~
~
ar. .: - so - 7
;, _ e y .. 30 _ ,
]
22 - . 2o ._.
= .. .. 10 -
t) _ f 0- O- - - rr re n eo es rr 7e n 80 es MWe %wn #2 33 u _. ._ _
- 14. supplementary The following supplementary information is supplied to show the estimated effects of inflation insormation to because the Company is required to do so, according to the Statement of Financial Accounting Standards No. 33.
****j The methods required to develop this information are approximate and complex, and may not necessarily reflect the of Infiehn for the true effects of inflation on the Company. Under existing regulatory law, the Company is permitted to recover actual War Ended operating and capital costs incurred to serse customers and a reasonable return on investment, and the Company December 31, believes it will be allowed to recoser cost increases caused by inflation as such increases are actually incurred.
IM1 (Unaudited): gefect of inflation on Reported Income. In adjusting the Consolidated Statements of Income, as shown below, only depreciation expense is required to be adjusted for the effect of inflation. The " constant dollar" and " current cost" depreciation expenses were determined by applying the Company's depreciation rates to restated I 1981 average depreciable plant in service. Fuel inventories have not been restated from their original cost because the operation of fuel adjustment clauses permits the automatic recovery of fuel costs, if the Company had to replace its entire utility plant at this time, the costs to do so would greatly exceed the original costs incurred when the facilities were built because of the cumulative effect of inflation. These ;" plant replacement costs, net of accumulated depreciation, are estimated at $10,225,000,000 as restated for " constant dollars" and $10,851,000,000 as restated for " current costs." Under the " constant dollar" method, the Company is required to restate the original costs in terms of dollars of equal purchasing power, as measured by the Consumer Price Index for all Urban Consumers. The " current cost" method uses Handy-Whitman Indices of Public Utility ] Construction Costs. Results from the two methods differ because construction costs have increased more rapidly than consumer prices in general. However, during 1981,1980 and 1979, general inflation increased more rapidly than specific prices. Under the
- current cost" method, the effect ($856,000,000) of general inflation in 1981 on net utility plant exceeded the increase ($670,000,000) in specific prices by $186,000,000 and by $205,000,000 and
$85,000,000, for 1980 and 1979 expressed in average 1981 dollars. In the Company's opinion, the " current cost" method is more appropriate for estimating the effect of inflation on utility plant.
Consolidated Statements of income Adjusted for Inflation for the War Ended December 31,1M1 (Thousands of Ibtlars) As Adjusted For Constant Current [ Dollars Costs (Average ( Average As Reported 1981 Dollars) 1981 Dollars) Operating Revenues $2,433,425 $2,433,425 $2,433,425 Depreciation 130,283 293,000 331,000 Other Operating Expenses 1,980,149 1,980,149 1,980,149 Operating income 322,993 160,276 122,276 Other income 130,634 130,634 130,634 Income Before Interest Charges and Preferred Stock Dividends 453,627 290,910 252,910 Interest Charges and Preferred Stock Dividends 229,866 229,866 229,866 Earnings Applicable to Common Stock- S 223,761 S 61,044 S 23,044 { Earnings Per Average Share- $2.25 S0.61 $0.23
*Eamings applicable to Common Stock for 1980 and 1979, restated in average 1981 dollars, amounted to $54,887 and ' }
$46,633, respectively, for Constant Dollars and losses of $2,313 and $8,368, respectively, for Current Costs.
~ Earnings per average share for 1980 and 1979, based on the restated earnings were $0.63 and $0.58, respectively, for Constant Dollars and losses of $0.03 and 50.10, respectively, for Current Costs, f
I l 34 f
~
Effects of Inflation on Shareholders' Equity. The etTect of mfiation on the Company's actual original cost of net utility plant amounted to $456,000,000 for 1931 (9/26,000.000 for 1980, and $699,000,000 for 1979 expressed in average 1981 dollars). These intiationary ettects were not recovered because rates are based on depreciation of original cost plant. If the Company were required to charge these amou,nts against income in 1981,1980 and 1979, earnings applicable to common stock would have become losses of $232,239,000, and
$433,455,000, and $511,628,000, iespectively. The etreet ofinflation (8.99 for 1981,12.4% for 1980 ano 13.3% for 1979) on the value of the Company's debt and preferred stock approximated $308,000,000 for 1981,
$426,000,000 for 1980, and $48010(1.000 for 1979 (1980 and 1979 expressed in average 1981 dollars) and would l
partially offset the effect ofinflatian on utihty plant. l If the Company had earned at the rate of inflation (8.9%) on its common shareholders' equity in 1981, carnings would have been approximately $165,000,000 compared with reported earnings of $223,761,000. Thus, reported earnings applicable to common stock in 1981 were about $60,000,000 above the level necessary to offset the impact of inflation un shareholders' equity. Adjgtment of Selected Five Year FinancialInformation. In order to reflect the impact of general inflation on selected financial information for cach of the years 1977 through 1981, the following table shows actual data compared with data adjusied to 1981 doilars. Five Year Summary of Selected FinancialInformation Showing Adjustments to Reflect inflation 1%1 1980 1979 1978 1977 Development of Consumer Price Index Adjustment Factors Average During Year 272.4 246.8 217.4 195.4 181.5 Year End 281.5 2E8 4 229.9 202.9 186.1 Consumer Price Index N1ultiplier A = Average (272.4 +1ndex) 1.00. 1.10 - 11.2 5 1.39 1 50 - Il = Year End (281,5 +1ndex) 1.00 1.09 1.22 .1.39 1.51 ,
~
Actualand Adjusted Dividends Per Common Share Financialinformation Actual Paid $1.90 S1.80 S1.80 S1.80 $1.76 Adjusted ( Actual x A) $1.90 $1.98 S2.25 S2.50 $2.64 hlarket Price Per Common Share Actual year End $13.63 S12.50 S13.75 $15.50 $19.63 Adjusted ( Actual x II) S13.63 S13.63 S.16.78 S21.55 S29.64 Operating Revenues (thousands of dollars) Actual $2,433,425 $2,123,394 S1,578,505 S1,456,758 $1,394_,762 Adjusted ( Actual x A) $2,433,425 $2,335,733 S1,973,131 $2,024.894 S2,092,143 Common Shareholders' Equity , (thousands of C.lars) Actual Year End $1,963,527 S1,733,614 $1,580,004 S1,475,276 $1,437,202 Adjusted ( Actual x B) $1,963,527 S1,889,639 S1,927,605 S2,050,634 $2.170,175
' Accountants' Report ,
To the Shareholders and Board of Directors Philadelphia Electric Company We have examined the consolidated balance sheets of Philadelphia Electrie Company and Subsidiary Ccmpanies as of December 31,1981 and 1980, and the related consolidated statements of income, retained earnings, and changes in financial position for each of the three years in the period ended December 31, 1981. Our examinations were made in accordance with generally .iccepted audi ing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the consolidated financial statements referred to ,bove present fairly the financial position of Philadelphia Electrie Company and Subsidiary Companies as of Decem r 11,1981 and 1980, and the results of their operations and the changes in their financial positinn for each of the three years in the period ended December 31,1981, in conformity with generally accepted accounting principles applied on a consistent basis. 1900 Three Girard Plaza Philadelphia Pennsylvania February 2.1982 4 _ , [_ 35
~
\
- l. Financial Stati.; tic 3 l ' SurnmSry of Earnings (MHlions ct' Dollars) 1981 1980 1979 1978 1977 1976 1971 Operating Revenues (for details see pages 23 and 32) S2,433.4 $2,123.4 '1,578.5
, $1,456.8 S t .394.8 $1,224.1 $608.1 Ope'r ating Expenses Fuel and Energy Interchange 1,187.6 1,090.5 661.7 573.9 572 3 480.7 189.8 Labor 256.8 232.1 209.3 195.0 179.2 161.9 108.8 Other Materials, Supplies
, arut Senices 260.9 184.5 155.4 135.0 121.4 88.9 45.2 ;
. ' Intal Operation and Maintenante 1,705.3 1,507.1 1,026.4 903.9 875.9 731.5 343.8 Depreciation 130.3 122.9 120.6 116.5 107.8 98.0 55.9
'Ibes 274.8 227.4 185.7 194.7 188.9 183.2 80.8 Total Operating Expen.es 2,110.4 1,857.4 1,332.7 1,215.1 1,172.6 1,012.7 480.5 operating income 323.0 266.0 245.8 241.7 222.2 211.4 127.6 Other income /
Allowance for Other Funds Uwd During Construction 65.0 50.5 46.0 37.6 36.2 30.1 14.4 j Income Ta Credits, net 63.2 49.0 33.9 26.3 25.3 24.2 (1.7) Other, net 2.5 3.4 1.7 4.6 3.5 2.6 3.2 income Before T ta! Otherincorne 130.7 102S 81 S 68.5 65.0 56.9 153 interest Charges 453.7 368.9 327.4 310.2 287.2 268.3 143.5 Interest Charges Ixng-Term Debt 266.7 225.0 193.0 176.3 161.0 147.6 60.9 Short-Term Debt 33.2 13.9 7.3 2.5 2.6 3.6 6.3 Allowar;ce for Borrowed Funds ( Used Dermg Construction (123.8) (97.1) (67.4) (53.4) (49.8) (47.5) (17.3) Net Interest Charges 176.1 141.8 132.9 125.4 113.8 103.7 49.9 Net incoine 277.6 227.1 194.5 184.8 173.4 164.6 93.6 Preferred Stock Dividends 53.8 52.2 44.8 43.5 40.7 39.0 15.3 Earnings Applicable to l C mmon Stock 223.8 174.9 149.7 141.3 132.7 125.6 78.3 i Dividends on Common Stock 189.5 157.4 145.0 135.7 124.9 107.7 60.7 Earnings Retained S 34.3 $ 17.5 5 4.7 S 5.6 S 7.8 S 17.9 S 17.6 Earnings per Average Share (Dostars) S 2.25 S 2.00 S 1.86 S 1.87 $ 1.87 S 1.91 $ 2.10 Dividends per Common Share (Dollars) S 1.90 S 1.80 $ 1.80 $ 1.80 S 1.76 S 1.64 $ 1.64 Common Stock Equity (Per Share) $ 18.10 $ 18.72 $ 19.06 S 19.28 $ 19.26 $ 19.13 $19.54 Average Shares of Common Stock Outstanding (Millions) 99.6 87.3 80.5 75.4 70.8 65.6 37.3 Seu page 2, for Management's Discussion and Analysis of Financial Condition and Results of Operations. Operation and Maintenance Cotepadson of Electdc Expenses (Less Fuel Costs Per Million BTU Fuel and Interchange) om m m ooiLvs 5- - - - - - - - - 500 -- - - - - -- - -W
. - - . - _ _ _ - - - - . -~ _ . - . . - . ;
d
- f. --o- - - - ~ - - - - - - - - - .,.--,.n_ n..- .
E { _ _ _ _ ._.._. . 3_--_.-_____._._ 390 _ f n .- ,
+
^
- g. _ _ . _ . -
200 -- ' .
} _.
( r _ a ' 300 _. a . g , p~ i . r -- & 0-M n ., n .,- n 0--- -- . - - - O e, n ., n n n ea ., Amt Nudna min Coal M Synem Aenge sum 0
Summary of Financial Condition 1981 1980 1979 1978 1977 1976 1971 Dscomber 31 ( Alilhons of Dollars) Assets Utility Pltatiut original cost $7,044.7 $6,415.7 $5,885.5 55,502.5 55,121.1 S4,747.2 S2,851.0 1.ess: Accumulated Depreciation 1,333.6 1,235.7 1,144.1 1.053.3 955.3 860.3 585.7 Net Utility Plant 5,714.1 5,180.0 4,741.4 4,449.2 4,165.8 3.886.9 2,265.3 Nonutili'y Propeny and Other lutestments 77.8 58.7 47.4 30.0 27.4 13.2 6.0 Current Assets Cash and Temporary Cash Investments 30.7 6.7 10.6 38.6 30.8 23.8 25.2 Accounts Receivable 342.4 300.3 230.9 223.5 154.0 168.0 63.0 N1atenals and Supplies 132.2 121.1 110.0 93.3 102.3 88 3 34.2 Deferred Fuel Expense (31.3) 11.0 83.5 4.2 23.0 19.9 - Other 6.8 6.2 4.6 4.3 3.8 2.6 2.0 Deferred Debits 31.5 18.5 12.9 7.5 10.9 14.7 6.6 Total $6,304.2 $5,702.5 $5.241.3 S4.850.6 S4.548.0 $4.217.4 S2,402.3 Lesbilities Common Stock $1,572.4 S1,377.4 S1,239.6 S.,139.7 S1,106.7 St 002.8 S 528.2 Other Paid-in Capital 3.9 2.6 2.2 2.0 1.8 1.7 1.2 Retained Earnings 387.2 353.6 338.2 333.6 328.7 321.2 254.7 Common Shareholders' Equity 1,963.5 1,733.6 1.580.0 1,475.3 1,437.2 1,325.7 784.1 Preferred Stock: Senes Without N1andatory Redemption Requirements 372.5 372.5 372.5 372.5 372.5 372.5 222.5 Series With Ntandatory Redemption Requirements 266.9 274.3 206.8 210.9 161.7 162.6 40.0 I.ong-Term Debt 2,745.7 2,371.9 2.241.9 2,173.2 2,078.3 1,936.4 1,161.8 Ltal Capitalization 5,348.6 4,752.3 4,401.2 4,231.9 4,049.7 3,797.2 2,208.4 Current I.iabilities Short-Term Debt 54.2 52.6 85.2 16.2 14.9 7.2 49.3 Current N1aturities of 1.ong-Term Debt 36.1 130.8 127.8 52.9 28.7 36.9 17.1 Accounts Payable and
)
Disidends Declared 188.9 187.6 133.5 120.3 92.4 83.9 40.7 , Tases Accrued and Deferred 51.4 77.8 65.1 44.5 36.7 30.7 22.3 Interest Accrued 82.3 64.9 58.1 51.0 48.6 43.2 17.5 Other 18.1 17.4 13.9 7.9 4.1 4.6 15.2 Deferred Credits 524.6 419.1 356.5 325.9 272.9 213.7 31.8 T:tal $6,304.2 S5,702.5 S5.241.3 S4.850.6 $4,548.0 $4.217.4 S2,402.3 Cspital investment Baritkens 50- - - - 40-30
~"
y 'Y 20 ~ g__ s_ . q ' sMy
- a. ;3
- . , m .,
' gni xx
; 37
Operating Statistica El.ECTRic 1981 1980 1979 1978 1977 1976 1971 OPERATIONS Output imillions of kilowatt. hours) Steam 9,931 11,234 11,279 13,160 11,468 13,385 19,849 Nuclear 7,464 7,333 7.104 7,763 4,596 4,937 206 flydraulic 1,397 1,240 2,155 1,700 1,997 2,065 1,738 Pumped Storage Output 1,101 1,050 1,270 1,109 1,223 1,062 1,639 Pumped Storage Input (1,624) (1,526) (1,847) (1,606) (1,761) (1,506) (2.302) Purchase and Net Interchange 11,173 9,973 9,180 6,651 9,759 7,666 2,889 Internal Combustion 283 442 454 704 847 792 940 Other 528 - - - 716 36 86 Total Electric Output 30,253 29,746 29,595 29,487 28,845 28,437 25,045 Sales (millions of kilowatt-hours) Residential 8,014 8,341 7,968 7,875 8,110 7,585 6,649 Small Commercial and Industrial 3,115 3,065 2,928 2,888 2,825 2,755 2,428 1.arge Commercial and Industrial 14,916 15,056 15,428 15,302 14,912 14,662 13,296 All Other 2,223 1,159 1,277 1,329 1,350 1,271 1,085 Total Electric Sales 28,268 27,621 27,601 27,394 27,197 26,273 23,458 Number of Customers, December 31 Rcsidential 1,200,238 1,190,312 1,173,514 1,158,853 1,148,171 1,137,544 1,079,585 Small Commercial and Industrial 117,016 116,808 115,724 115,945 115,883 115,422 119,203 Large Commercial and Industrial 5,790 5,820 5,798 5,780 5,772 5,747 5,517 All Other 746 736 1,919 2.413 2,381 2,345 2,130 Total Electric Customars 1,323,790 1,313,676 1,296,955 1,282,991 1,272,207 1,261,058 1,206,435 Operating Revenues (millions of dollars) Residential S 643,7 $ 607.8 $ 461.0 S 430.8 S 427.6 S 373.2 S 198.3 Small Commercial and Industrial 285.9 249.8 189.0 176.5 168.4 149.3 78.6 Large Commercial and Industrial 917.1 813.9 587.4 544.0 513.4 442.9 198.2 All Other 155,4 95.4 74.5 73.1 68.3 59.4 31.6 Total Electric Revenues $2,002.1 $1,766.9 $1,311.9 $1,224.4 $1.177.7 $1,024.8 $ 506.7 Operating Expenses (millions of dollars) Operating espenses excluding depreciation $1,586.5 S1,414.0 S 975.4 S 896.3 S 881.2 S 750.2 S 344.2 Depreciation 117.3 111.1 110.0 106.3 97.9 88.0 50.4 Total Operating Expenses $1,703.8 S1,525.1 $1,085.4 $1,002.6 S 979.1 S 838.2 S 394.6 Electric Operating income (nd!! ions of dollars) S P'" 3 $ 241.8 $ 226.5 S 221.8 S 198.6 S 186.6 S 112.1 ee Not Electric Utility Plant (millions of dollars) $5,18% $4.867.9 S4,449.5 S4,167.1 $3,883.9 S3,604.5 S2,017.9 Average Use per Resid.ntial Customer (kilowatt-hours) Without Electric Ileating 6,022 6,411 6,227 6,290 6,584 6,298 5.968 With Elcetric IIcating 18,054 19,482 20,760 21,884 23,593 22,154 24,837
'Ibtal 6,699 7,058 6,829 6,833 7,097 6,710 6,187 Electric Peak 1.oad, Demand (thous. kw) 5,731 6,095 5,641 5,667 5,888 5,346 5,313 Net Electric Generating Capacity-Year End Summer rating (thous. kw) 8,006 7,698 7,727 7,727 8,198 7,742 6,366 Cost of Fuel per Million Htu $2.10 $1.90 S1.55 $1.29 S1.40 $1.24 S0.59 Btu ivr Net Kilowatt-hour Generated 10,930 10,787 10,810 10,773 10,882 10,529 10,782 38
GAS OPER ATIONS 1981 1980 1979 1978 1977 1976 1971 _ sales (millions of cubic feet) Residential 2,446 2,461 2,327 2,316 2,394 2,342 2,441 Ilouse IIcating 24,675 23,671 23,593 24,974 26,335 24,540 25,165 Commercial and Industrial 45,670 42,890 37,452 32,784 31,017 33,390 40,624 ; All Other 127 92 93 O 86 89 102 Total Gas sales 72,918 69,114 63,465 60,168 59,832 60.361 68,332 Eumber of Customera, December 31 Residential 78,426 81,346 85,315 87,715 88,775 89,459 95,478 Ilouse lleating 193,038 182,246 168,905 163,469 102,978 162,993 154,902 Commercial and Industrial 21,578 20,197 19.065 19,207 19,422 19,669 19,778 3 Total Gas Customers 293,042 283,789 273,285 270,391 271,175 272,121 270,158 Operating Revenues tmillions of dollars) [ Residential S 15.4 S 14.0 $ 10.7 S 9.9 $ 9.6 S 8.7 S 6.2 Ilouse Ileating 128.5 108.5 91.2 86.6 84.1 73.3 45.8 Commercial and Industrial 209.7 166.7 118.4 92.2 80.4 76.1 34.8 All Other 0.5 0.3 0.2 0.2 0.2 0.2 0.1 Subtotal $354.1 $289.5 5223.5 S188.9 $174.3 S158.3 S 86.9 Other Resenues 2.3 1.2 0.6 0.6 0.5 0.6 0.4 Tot:1 Gas Revenues $356.4 $290.7 S221.1 S189.5 $174.8 $158.9 S 87.3 Operating Expenses (millions of dollars) Operating espenses excluding depreciation $322.0 $258.0 $194.4 S163.0 S145.7 $128.1 S 67.1 Depreciation 11.3 10.2 8.9 8.6 8.2 8.4 4.5 Total Oporating Expenses $333.3 $268.2 $203.3 S171.6 S153.9 S136.5 S 71.6 G:s Operating income (millions of dollars) S 23.1 S 22.5 S 17.8 S 17.9 $ 20.9 S 22.4 S 15.7 N t Gas utility Plant (millions of dollars) S314.7 S283.4 $261.7 S250.5 S248.1 S247.5 $220.2 STEAM OPERATIONS l sales tmillions of pounds) 5,484 6,044 6,581 7,336 7,165 7,735 8,223 Number of Customers, December 31 593 618 638 660 670 679 733 Operating Revenues (millions of do: tars) S 74.9 $ 65.8 $ 45.5 S 42.9 $ 42.3 S 40.4 S 14.1 Operating Expenses (millions of dollars) Operating espenses escluding depreciation S 71.6 S 62.4 S 42.3 S 39.3 $ 38.0 S 36.5 S 13.3 Depreciation 1.7 1.7 1.7 1.6 1.6 1.5 1.0 Total Operating Expenses S 73.3 S 64.1 S 44.0 S 40.9 S 39.6 S 38.0 S 14.3 stzm Operating income (millions of dollars) $ 1.6 S 1.7 $ 1.5 S 2.0 S 2.7 $ 2.4 S (0.2) Net Steam Utility Plant (millions of dollars) S 27.2 S 28.7 S 30.2 S 31.6 S 33.8 S 34.9 S 27.2 39
Sh:rcholder Inf:rmati:n ' Stock Exchange Listings. N1ost PECo Securities are listed on the New York Stock Eschange and the Philadelphia Stock Eschange. Philadelphia Electric Power Company Debentures are listed on the Philadelphia Stock Exchange. Dividends.The Company has paid dividends on its common stock continually since 1902. The lloard of Directors normally considers common stock disidends for payment in March, June, September and December. The Company estimates that 56% of the $1.90 per share disidend paid to common shareholders in 1981 represents a return of capital which is not tasable as disidend income for Federal income tax purposes. Dividend Heinvestment and Stock Purchase Plan. Shareholders may use their dividends to purchase additional shares of common stock through the Company's Disidend Reinvestment and Stock Purcha.,e Plan. Philadelphia Electric pays all brokerage and service fees. All common and preferred shareholders hase the opportunity to invest additional funds in common stock of the Company, whether or not they have their dividends reinvested-also with all fees borne by the Company. The Plan has been amended to enable eligible individual participants in the Plan to elect to defer Federal income tas on up to $1,500 of reinvested dividends per year as provided by the Economic Recovery Tas Act of 1981. Nearly 229 of the common shareholders are participants. In 1981, they invested more, than $34
~
million through the Plan, including cash payments. Information concerning this Plan may be obtained from N1. W. Rimerman, Treasurer, Philadelphia Electric Company,2301 N1arket Street, P.O. Ilos 8699, Philadelphia, PA 19101. comments welcomed.The Company always is pleased to answer questions and provide infor-mation. Please address your comments to Mrs. I.. S. Binder, Secretary, Philadelphia Electric Company,2301 Market Street, P.O. Box 8699, Philadelphia, PA 19101. Inquiries relating to shareholder accounting records, stock transfer and change of address should be directed to Philadelphia Electric Company,2301 Market Street, P.O. Bos 8699 Philadelphia, PA 19101, Attn: Stock Transfer Section. (215) 841-5795 Annual Meeting.The Annual Meeting of the Shareholders of the Company will be held on April 14,1982, at 10:30 A.M. at the Franklin Plaza flotel,17th & Race Streets, Philadelphia, PA. Common stock shareholders of record at the close of business on March 5,1982 are entitled to vote at this meeting. Notice of the meeting, prosy statement, and prosy will be mailed under separate cover. Prompt return of the prosies will be app eciated. j Form 10-K. Form 10-K, the annual report filed with the Securities and Eschange Commission, is available to shareholders upon written request to Philadelphia Electric Company,2301 Market Street, P.O. Hos 8699, Philadelphia, PA 19101, Attn: Financial Disision. j Shareholders.The Company has 266,613 shareholders of record of common stock, a 20G increase in 5 years. Transfer Agents and Registrars. PillLADELPill A ELECTRIC COMPANY-Preferred and Common St6cks Registrars: Girard Bank, One Girard Plaza, Philadelphia, PA 19101 Morgan Guaranty Trust Co. of NY,30 West Broadway, New York, NY 10015 Transfer Agents: Philadelphia Electric Company,2301 Market Street, Philadelphia, PA 19101 Morgan Guaranty Trust Co. of NY,30 West Broadway, New York, NY 10015 PillLADELPill A ELECTRIC COMPANY-First and Refunding Mortgage Bonds Trustee: The Fidelity Bank, Broad and Walnut Streets, Philadelphia, PA 19109 New York Agent: Morgan Guaranty Trust Co. of NY,23 Wall Street, New York, NY 10015 PillLADELPill A ELECTRIC COMPANY-Debentures PHILADELPill A ELECTRIC POWER COMPANY ( A Subsidiary)-Debentures Trustee: The Philadelphia National Bank, Broad and Chestnut Streets, Philadelphia, PA 19101 New York Agent:Irving Trust Company, One Wall Street, New York, NY 10015 General Office.2301 Market Street, P.O. Hos 8699, Philadelphia, PA 19101.(215) 841-4000 NYSE-Composite Common Stock Prices, Earnings and Dividends by Quarters (Per Share) 1981 1980 Fourth Third Seconc. First Fourth Third Second First Qumer Quarter Quarter Quarter Quarter Quarter Quarter Quarter liigh Price $14% $14% $13% $14 S13 % S15% S15% $14% low Price $12% $12% $11% $11% S11 % S12 % $12% S11 % Earnings 53' 66' 46' 61' 41' 72' 36' 51' Disidends 50' 50' 45' 45' 45' 45' 45' 45' 40
I . ,. J >C j # i - r s
- t y ,
b a)i .,,'r'- , (? - , 1 + , p\ - *- fs # f *.-
- y i , r' g
i p; y t, 7 4.q - . s + x" *
.[ . . . " g .iL
=
[.k r 5 N
+
-p ;. %mg -
s .
#. g , a
. . , ' ' . ,** g
/.,3, ,,
g9 > + ca R r w
.. w ,.._ '? 'v,6-
'r .
.(!,-'g[
v 9 -J* ** f
, r ,.
, k~
a r 4
- m ,, t
. l' w','
y . / 2' g s.q y . s,..~.e..
, a 4 . ., [
4- -*$ g-- ,,, ( i' ' ; 4e ,O R3 ,{',
, ., --pr j .ep ? ,'c.J ;
e- s p, t ,_ e
'W' 'Y '
y _ 3 a
^$ s . :y: -
#L
- f I k 9
*rr i .fy
~ . <
$ f-N\ "
4, p * *Q. 4 _
.'= /
{.
, \_ q ,-, y
[
- f f ) # h g_ ', , ". er 8I .,J',- E #" t I '
p-7 N sY'*. t
.. 4 y ,
.,' MMI y /. g 3 7 j
% ('
/7 '!- %
i k. >- 2.,*w . : ,. x< 4 . ,-. 5 'e' % '"' -
}_' ,# s-
*M
% f
#' {
y . t > ,
, s l ,,
i t
).*
g t'-
, n . e .
V. y '*i' n ,.
"J'r , F s i re' *- e W 4 3
( 7 g g ,_ ' - i A ,- p. ,
+- .
A% y '.( ~ , T- + ~'<s - a "7 ~~ '
+
, c,. ,
a s ,
), . g 'Y$ J % s s;
s
. , 'g.. b
- = w 1 m y 4 %
'.] . 4 % + b <
$ 4 s ,- 4,
,. , , a ~ f sv .u, II' ~ > * )
t + *E1 g' . h f 4 ** A .c i,r
?,g -
's 7 *i f d 9 f gi ,e- *
< ./ - ' a' L ' < *- , % ' * , y -
-p
? t e 1
' # +
fV 4 (K" , e " . 4 s , , ,r5., ,,.
/ '
, t t l kI ? ~
' . , , w v -
, , n- .
. i
+
~
S g p %
.,%,.6b(
- a r # y b (; I
'1d'
] t ,
th.- 9 s -. s s# " p
-p-y 9 '~ ' ~ .n
-'t~l >4 g a '
p
-.5
. -- ' '=, 4 5
<+ .w
{m s << * .i, a? . 1..).. I
- - { %- ,
,r .J 4 ' ,, d YY f
- f g g .h 3
.- 33 - ,
,./ x e
. -u ., , e<,
x
, ;4; < g,
.K4 v y ;
a
- e. <*
3 3 4 eg "l f *,'R F, ',_h.A44 k 0 A.& . 4 n, 4 b x' ' v'.t , t 1
, aQ - -
t
,o.
e
, 4*\
'a
; y;
, _ y
, i'* $ 5.,* $ q,s - -
f* , ' j., i Q1 g , }, ' * .y,' s 4 41 3
+ fune q? - #'y ,&,
U ; ' h* fq 3m + xta #
- 5 ,' - . - + r-4 f , u 4'.1
+ e x
+ ,
'4 . ' - . 4 g n- j y _ ,
- j.,,
d
, --.{<
t, ,
,s @ g % , w ,. y y 4
,, y 7, M '
P- -ip *, , 5
, + - ,
4, a - , ,YT-[ _, b 'y' n
.,,3- ,, , 3; -a y . .mg ..
n,, , 4,9 p, * ,
, - - - <+ a; u-
. t , v
,3,s. S <r 'Mc , y &- , , .yp e ,_n %. . r s* , u v n
,, . , * , --u 1
.,~ e, n's+ v) , t , , -
,:-:,.s
,i pau .w, ,.
,s, ,, .
v.
,m , ,
'f $. Y ' 4 i) < ' , h u[l_'-
5 , i - c o ;n - ,E k'+ y , , y
, .m +
i t,,I fL ~,hb
.*N
, ,. . n mkl kcv. 4u e
,g i
~ v c7
%"l'
, w' 6 4
w-a,f 4< ,
+
4 I( : n .,' ' ,#_ i <<, v
. x 4 .
g- -,. w ,
). NA- M h, . # [ / . -N.e
*[, -.( E y 't *' . y Y.Q-( 'I -
#w4 ,M'- ,. " -
n, - i *
. ~4. -
, s .. s' - . 4
, v'
-., ..' , 'w. a--t#-. ,f i
.g , '$,j- ?i .-M, 'l 4. f' '
y, ,,, _ g, f ; f 6 y s' m2 s n - - . . i e
'. 4 M e .) j. .
, s -
~.'"./
5 . "s s-L , T.q' 5 , m. c m's
. % ,. <- -i~ n%
.s
^
,.x , _
- t _ I .s : e, ,
e v:.
"i* ,MM m Ah3 +.y<
, , v
. . n.a ,, a 1 #
,3
/ -
r
'4-..
w_ : > - , r , , .
'^
? + +
t O' j; , . . g e ,. . *u- n:e - s -) *
,_'.,'A.2+A.c. c $ ,v_p
. N' j )d-e 't3' w y~,- ,? ++; v . g., 1 ,
3: . Q.,v,si,
.:>"C' i
', t ,1 , % t,,
N : . ,,. r.. O. g_ . . i #s 4.m# 3# e h' .-4 . = . . c u ':-- > ,* i p. v . y v .}'p' 'f rh,4 m
,di.'s q,, Q. .y/
f
' _ '; -, ,r f.
s' .-. f....',' s. y /, W s o'4'.-.. m, g'4+ -i y[^.N'rg z . P *' j ,, * +k"?t
\,. 7
^ ' ' ' ' , j
,9
, '.4,'Q'
.7 f ., -%s4 3s , g , ,,
,.y f9 ,
, .4-
[^y *, * , ', - f% ,E' g I Q a'-_ 4
~l. ' ,.
g y
i',
- y. e , .,i-- - - e , a' w s
, ,, ; e ,, . e s . , . . , , , - -
h_ r cd @') [$MNP[i' NNC W% \ , /,, [ ,, k & " ff ""
# I f,. l:a 5
' i{ Y, ' ~~ f:&f?l,k
, y , ,,,.
.),,
n .;Y-mam.m AN% ? m w ,t. O W'W , m / v mm,
, Ly .
o
- m. vl , w. m ~:.w e n ~~ , ' - ,_.x b,. s u. = . m . . .
..#, * 'a,-
4 4 3 , m ,, s 'p _~m - ' ,' # . - - - - ,~
"fd C v(y,- - . "Nm'TTT.gy % hD5 W^y.sM - 8 f$ F.*?' N t ' " '"
[.. i
]V" Q j* % -Q , gfi,'
t %, w y7 [ . 'r, y a, nwww' (N."1_ sy-4 4#t a
* -k 4 -c'
*' .1 WJ m ' ,. 5 :*
- a
' / I'L r J+ 4
.,y y.- b . m '4l t ' ' < g 4
; ,, n' x .m -V g m
y t g a' 4.5 44q n'd ' s ff s s kN $ 01k hk. V9w$5&m 4 ?l ,l e 1 . 1
~^
m. a; .~ h,,_* , ,
. ?'
- u?s.NN a
-W. a 3 s## ] . W ^< , ?N" c* 4 ,. .y = g, .
- gg -% e L b [,
'fId';P)Y4%*IM p%,TMtWh.MMM*%dP'W-5 lN W%7*f% A $ +. ' ~'r,.[ Y m; ~
q,2 @* Q
% +g c '
&; f *
~m
> ~ ' p . + ;lm ., :h 9 mqmghwm&..+n.
W.. r}w@:Q; .p[ ] m. jn c ;&.n.}eJ: Q.- : 3G~p L. y - ,
< f :. ..%" 1 . m. , ~ - 6 .. < .; R s x < + w mm,OI&. e. , ..o >e % '
~ %. . , ; . .,o o - z v.g n u.ns a:
< .=~ w- e ..
hI I. f? h.I ,M0 (
- 4p'jm' - i.-^ "( *gs.
, ['I .
Je gl %
*+ Cf[k ,
f (,4 - [M "'
.I
,hk-g4'^ ,#
g ,' #' *
- gv
- M:, 4+ -Q "* '
'3 M -
b E' 'w[ ,ru ,w ' u'm' M,, ;w , m:-w p :n' xe.,., =>. . .,m. -v,~,4 w. eN e uT.ver sw w->
- ., c a3 , ,
m m' d.N 3
',*i. n p~ . .~
; ,, s
. w: . . ..
-u . . . , < -
-,2 4ua_s .ma ,'..
[ l.hk$s h -E L. e2 J4 ~ , *A 4 4.- d ' I ei. e3PW i -e'M 4 .h- N f*mih. g . J# - a @ g '
.c4 , ,m. ,,
7 l FRAndetIIIeWestle Congsmy , . BULK RATE
.:2301 Manut Stest .
- U.S. POSTAGE PAID PO Bou 8000 N PA PNiedsipNe PA 19101 - PWmit No. 378 t
l l 1
-u 4
0 h 3
.t i
- o. >
G2 0 i d " a ____ k.}}