ML19322B886
| ML19322B886 | |
| Person / Time | |
|---|---|
| Site: | Oconee  |
| Issue date: | 09/24/1970 |
| From: | DUKE POWER CO. |
| To: | |
| References | |
| NUDOCS 7912110791 | |
| Download: ML19322B886 (38) | |
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DukePower 1969AnnualReport
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Y THE COVER Thousands of Carolinas youngsters are welcomed visitors to Duke Power installations of all types each year. Many of them thank us with letters, such as the one Debbie Smith of Charlotte wrote after visiting a steam station. DukePbwer Company l General Offices: 422 South Church Street Post Office Box 2178 Charlotte, North Carolina 28201 TRANSFER AGENTS FOR COMMON ETOCK Morgan Guaranty Trust Company of New York North Caroiina National Bank, Charlotte REGISTRARS FOR CCMMON STOCK
' First National City Bank, New York Wachovia Bank and Trust Company, Charlotte
l 1 HighlightsoftheYear Percent 1969 1968 as Electric Revenues. .. . . . $342,242,000 $312,246,000 9.6% ( j Earnings for Common Stock. . .. $ 47,448,000 $ 44,171,000 7.4 l Per Share of Common Stock: Earnings . . . . ... .... $2.05 $1.91 7.3 Dividends Paid . . . . ..... $1.40 $1.30 7.7 Taxes-Federal, State and Local. . S 64,269,0C0 $ 72,341,000 (11.2) Plant Construction Expenoitures. . $282,806,000 $197,148,000 43.4 Kilowatthour Sales (Thousands). . . 31,880,000 28,899,000 10.3 Peak Load (KW). . .. .. 5,613,625 5,364,165 4.7 Customers. . . 935,239 905,789 3.3 Earnings and Dividends Per Share Common Stock j $2.20 2.00 1.80 i 1.60 1.40 1.20 l l 1.00 i
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t 1960 61 62 63 64 65 66 67 60 1969 Earnings $1.10 1.15 1.25 1.34 1.48 1.66 1.72 1.85 1.91 2.05 Cividends 5 .72 .80 .85 .90 .95 1.00 1.10 1.20 1.30 1.40 Before extraordmary items and adjusted for stock spht. t Contents President's Letter .. . 2 Working With Youth 16 j Production .. . 4 Subsidiary Formed 20 Transmission . .. 6 Environmental Concern 22 Distribution 6 Tax Reform 24 Visitors Center 8 Financing . . . - 26 Oconee Nuclear Station . Foldout 10-Year Summary 32 Marketing 9 Directors & Officers 34 Personnel .. 14 Service Area Map _ Cover Foldout
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- heating in 1969. This has led to excellent 1
1 The President's Letter baiance in sum me,and winter peaks. and has i kept the Company first among all the nation's utilities in total-electric single family residences l j In 1969 our Company establided new records for four straight years. for electric energy sold, hieher revenues Industry continued to favor the Duke service l received, and creater earnings reported. area with a record investment of $661 million Total sales of electricity aggregated 31.0 in new plants and expansions of existing plants billion kilowatthours, a gain of 10.3 per cent in 1969. This was almost half of the total over 1968, and electric operating revenues were industrial investment in the two Carolinas,
- $342 million, up 9.6 per cent. despite the fact that Duke serves but one-fourth i Earnings for 1969 amounted to $2.05 per of the total land area. The diversitication of j share, up from $1.91 per share in 1968. The incoming industry continued to dominate this 1969 earnings figures reflect several significant bright area development picture.
accounting changes, which are summarized in The growing demand for electricity projected the Notes to Financial Statements. for the years immediately ahead is such that i Fuel costs, our largest single item of expense, your Company now is engaged in the most l increased substantially in 1969. We have filed ambitious expansion and modernization program with the North Carolina and South Carolina in its history. In 1969 our investment in new
- State llegulatory Commissions and the Federal power generation, transmission, distribution and
- Power Core.;ssion, a request to adjust charges other plant facilities was at the record level of l to our 'astomers when fo<sil fuel costs more $283 million, more than 43 per cent al>ove the than the 1968 average of 28e per million IITU. previous high in 1968. The capital construction This cost is now in excess of 32e. IIcarings on budget calls for expenditures exceeding an our request to the Commissions are scheduled average $345 million per year through 1972.
and if approval has not been granted by the Unprecedented failure of manufacturers to end of March, it is our plan to put these deliver equipment on schedule has hampered increased charges in effect under lxmd construction progress at the Oconee Nuclear as quickly as possible. Generating Station. Units 1 and 3 are close to Cost of money and other expenses continued the original schedule and are expected to be to advance in 1969. Your management is available for service in mid-year of 1971 and alert to the necessity of maintaining earnings 1973, respectively. Ilowever, Oconee 2 may be adequate to enable the Company to finance the delayed beyond its scheduled date of mid-1972. construction program now under way and will The 590,400 kilowatt Cliffside 5 unit, which was take such further action as is needed to undertaken because of the delay on Oconee 2. ( accomplish this end. is presently on schedule for substantial The Company solidified its position as the generation in the summer of 1972. dominant supplier of heating energy in its The Company's contention that it was service area as over 54 per cent of all new proceeding within the law in its construction homes and apartments chose electricity for of the Oconee Nuclear Station was upheld by The1969 RevenueDollar Where it came from DUKE POWER COMPANY DUKE POWER COMPANY p , 6 w ,, 6 *w , , 1,, PL[ A'E RtTUSN THI$ $708 WIDi ( p u er. od tai r, w w . THE PAYVLNT 10 YOUR LOCAL. s wr a now -.-* Diat PcwLR company onact
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t' , , , , , DEVERON DR 7g l QI[1M0710!1-) __u - ACCOUNT NUMBER dYdl
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a A m - = ~ ~ ~ - - ' ' - a decision of the United States Court of approve a proposal to eliminate the preemptive Appeals in November. The decision strengthened rights pertaining to the Company's common the Company's position in opposing the efforts stock. of 10 North Carolina municipalities to purchase As we move further into the high energy use a Imrtion of the $406 million Oconee plant. One period of the Seventies, your Company will of the original group of 11 cities seeking to intensify its long-standing policy of buikling and make this purchase withdrew from the action operating its electric facilities for minimum during the year. Thirteen other cities with impact on environment. Emerging technology municipal distribution and served by Duke did will be used to improve air quality, and the not join the suit. most modern design and equipment available The Company also voiced active opposition will assure maintenance of water quality at l and took positive steps in regard to a proposal generating plants. A major effort is underway I by some North Carolina electric municipalities to reduce stack emissions from existing plants, and rural electric cooperatives. This proposal, involving $12.8 million in electrostatic called Electric Power in Carolina by its authors, precipitators and related air pollution control calls for the construction of a $1.75 billion equipment. generating and transmission system to supply A discussion of tax reforms and how they Imwer to these groups by 1990. affect charges to the Company's customers Your Company promptly called public attention through their electric bills is on page 24. to the fact that EPIC is simply a tax evasion This report reflects the performance of our scheme. The potential savings its promoters entire employee force, which at year's end optimistically held out to the co-ops and numbered 9,529. 31ost of these are sharing in municipal systems is less than the taxes on the Company's success through participation in l that amount of business which the state's the Employees Stock Purchase-Savings Program, I investor-owned power companies would pay if and all are commended for a year to which they they continue to serve these customers. We contributed exceptional and devoted service. l expect to maintain a strong position against the One management change was made in 1969. l EPIC proposal and made this intention clear by B. F. Few retired from the Board of Directors ! intervening before the Federal Power after 13 years of significant contribution to the Commission to oppose the application by the Company's success. We are pleased that Herman l EPIC group for a permit to study a pumped W. Lay, Board Chairman of Pepsico, Inc. joined storage project on the Green River in North our Board in September. Carolina; For the Board of Directors The financm,g Lompany durmg 1969 obtam.ed by issuing capital expanston
$150,000,000 February 24, 1970 in First and Refunding 3fortgage Bonds and l $50,000,000 in Cumulative Preference Stock.
For further details see page 26. Ninety-five per cent of the shareholders voted W. B. 3fcGuire at a special meeting on December 12,1969, to President Ilow it was used l j $g GENERAL OFFICES: Duke Power Company i 422 SOUTH CHURCH STREET l Post Office Box 2178. Charlotte, North Carolina 28201 l OAT, YEAR OF g 69 i l
- Pu o T- To,,cin og LOCAL. STATE & FEDERAL GOVERNMENT TAXES S 64.269,000 SIXTMUR MILLION TWO IlUNDRED SIXTY NINE THOUSAND DoLLans l 17f OUKE POWER COMPANY Tases Fuel Costs Wages & EreriA Depreciation Interest Earnings For Benefits PurchaseJ Power on Debt Stodholders
& Others 3
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uring 1969 the Company announced plans to build additional Production generation that will more than double present capacity by 1977. A coal-burning station will be built on a 3.863 acre cooling lake at Belews Creek near Winston-Salem. This station will consist of two units, each with a net capability of 1,143.200 kilowatts. Unit 1 is scheduled for operation in the spring of 1974, followed by the second unit a year later. W rk on adding a 590,400 kilowatt unit at the ClifTaide Steam Peak Loads versus Station is well underway. This unit, also coal-fired, is scheduled Generating Capabilities ? i and Firm Purchases to join the system in the spring of 1972. This unit will utilize wnons u n io..us m large cooling towers to cool condenser water prior to its t recirculation to the condenser equipment. ( In November the Company announced that it had ordered nuclear reactors with related equipment for a second nuclear- 3 l fueled generating station. The cost of this plant, as yet unnamed and to be built at an undeterminad site, will exceed i $400 million and will consist of two nuclear-fueled generating units of about 1,150,000 kilowatts each. The plant is expected n2 to be in full operation by early 1977. After detailed economic, engineering and environmental l- analyses of nuclear and competitive fuels, nuclear fuel was chosen for this station. E Work on the Company's first nuclear-fueled generating facility, the Oconee Nuclear Station, continued at a vigorous pace. Unit 1 is scheduled for use in 1971 with similar units of 886,300 kilowatts each scheduled in 1972 and 1973. A total of 867,300 kilowatts was added to system capability during 1969. The 682,300 kilowatt unit at 5farshall Steam Station, the Company's first to operate at super-critical pressure, went into service in 5 fay. A similar unit will begin service at i 51arshall this spring, giving this coal-burning station a net 1959 1964 1969 / Capability of 2,137,000 kilowatts. The 5farshall Steam Station was the nation's most efficient for the fourth straight year.
" ' " " ' Seven combustion turbines totaling 185,000 kilowatts and g c.=nne cu.a.a.. operating either on gas or oil were installed at various points ver the system. These turbines supply capacity for peak load E < a-,
requirements and emergency service. Twelve of these quick-service units with a total capacity of 335,000 kilowatts are now on the line. In 1970 seven additional combustion-type peaking units with a total capacity of 126,500 kilowatts will be added l to the system. Ten more such units, totaling 209,000 kilowatts, have been ordered for 1971 installation. The 140,000 kilowatt Keowee Ilydro Station,'a portion of the
. Keowee-Toxaway complex in northwest South Carolina, is nearing completion and will be available for use in late 1970. Work also is progressing on the Jocassee pumped-storage facility, with two of these units to be ready in 1974 and two others in 1978.
Each Jocassee unit will have a capability of 152.500 kilowatts. All generating records were broken during the year as summer and winter peaks continued to climb. The previous peak load of 5,364,165 kilowatts on August 19, 1968, was exceeded many times during the year. The 1069 peak load of 5,613,625 kilowatts occurred on July 21 at noon, an increase of 4.7 per 4
cent over the peak load of the previous year. This has been surpassed, however, by the G,031,505 kilowatts recorded at 7 PM on January 8,1970-thus continuing the pattern of most previous years of each season producing a new peak. The Company had a generating capability and firm purchased capacity at the time of the 1969 peak load of G,293,734 kilowatts. The Company's total energy requirement during 1969 was 34.5 billion kilowatthours. Steam plants supplied 30.6 billion kilowatthours, while 1.8 billion kilowatthours came from hydro, 0.0 billion kilowatthours from combustion turbines, and 1.5 billion kilowatthours' was purchased from sources outside the Company. The Company continued to interchange blocks of power with neighboring companies during the year, and assisted in the formation of the Southeastern Electric Reliability Council. This Balanced Load Building organization (SERC) consists of all power suppliers in the wn.ons of co**tts interconnected network in the southeast with generating capacity 70 of 25,000 kilowatts or more. The Council includes 22 investor-owned, federal, state, county,
municipal and rural electric cooperative systems. The primary purpose of SERC is to assure maximum reliability in supplying
,.' power within the region.
ss > TRANSMISSION GROWTH s.o *,?** Work was begun in 1969 on the Company's first 525,000 volt
,. transmission line, an 85-mile segment connecting with American 45 Electric and Power Company. This is Duke's initial portion of a
..T 525,000 volt transmission loop that will interconnect with
.I i neighboring power companies as well as serving the Duke area.
{ ! Eighty per cent of all right of way for the 525,000 volt
,,.. "***' l l l segment, which originates near Cowans Ford Dam and joins 3o ,/ ' American Electric and Power near Galax, Va., has been cleared l
and half of the needed materials had been delivered to the job 25,....' l l site at the year's end. j ! This interconnection, and others to follow in rapid order, will allow interchange of bulk power, both by plan and in case of i ! emergency. This is one of several actions being taken by the ts j Company to improve the economy and continuity of electric j , i.o service. The Company added new or up-rated transmission circuits and s substations at a cost of $65,000,000 in 1969. This included 375 net circuit miles increase to the transmission system. An tuo si u o e4 es u o u im expenditure of $75,000,000 for new or up-rated transmission 3, circuits and substations is planned for 1970. This includes $12.5
.......,e.. s.,, , e.. million for 525,000 volt facilities.
DISTRIBUTION The Company added 1,205 miles of distribution lines in 1969, bringing the system total of these lines, which carry electricity from transmission lines to consumers, to 42,430 miles. Duke has been an industry leader in placing power lines underground in new residential developments. During the past year 200 miles of underground lines serving over 9,600 new 6 L
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Rapid progress is bein made on construction of Duke wer's first
$25,000 volt transmission line, an 85. mite segment connecting with American Electric \ \ \ .
and Power Company. Crews are presently erecting two of the grant towers per day. , 1 6
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2ne of the South's most modern and
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ell types of vehicles was erected by the , .I ' r.~ I-
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- smolar garage is being built on Durham. y _ ._
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residential customers were installed. A new Operating Center was completed in Lancaster, and others are being built in several major districts. One of the South's most modern transportation facilities, to care for area vehicles, was put into service in Greensboro, and a similar transit garage is underway in Durham. A new office was constructed and occupied in Hillsboro. Citizens of the Town of Ninety Six, South Carolina, voted 433 to 33 in April to sell their electric distribution system, which served 920 customers at the time, to Duke Power. The office at Ninety Six is, coincidentally, the ninety-sixth in the Company's retail system. The Company retained its longtime national lead in number of dusk-to-dawn lights in service. Duke added 11,320 such lights in 1969 for a system total of 100,237. This exceeded by far the 87,667 municipal street lights in service at year's end, ar.d represented a significant revenue item. The Company opened its Keowee-Toxaway Visitors Center VisitorsCenter on July 1,1969, and its success was both immediate and spectacular. For the six months ended December 31, the Center attracted 126,864 persons to see and hear the Story of Energy. This was an a.verage of 4.880 visitors per week-far beyond attendance at any other such electric industry facility in the nation. During its first six months the Keowee-Toxaway Visitors Center recorded guests from all 50 states and 28 foreign countries. A significant portion of the attendance has been school children. Hundreds of entire classes have been brought to the Center by bus, and many Carolinas school officials have said that visits to the Center will become a part of their annual program. The Center features animated displays depicting the story of energy all the way from the forces of nature through harnessing of the atom. It contains 13,000 square feet of endosed space and outside. patio-type overlooks where visitors are able to view construction of the Oconee Nuclear Station. Closed circuit TV also provides closeup views of construction and later will "take" the visitor into the actual control room of the nuclear station. The Center's grounds have been landscaped with native trees, flowering plants and huge pieces of colorful granite blasted from the area to be occupied by the Keowee powerhouse. Several dozen picnic tables have been provided along the shore of Lake Keowee and a nature trail, which winds through a wooded area on the Center's grounds, has been opened. I i I 8 l
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l l MarketingRecords Tumble Re idenoai Ser+e As eraue ('harge Per KWH a.n.s + ,u ~ o nw RESIDENTI Al. S Al.ES Every (' mpany record involving the ,aie of electricity for re-nien t ial pu rpo,c- wa< smashed in 1969. The most significant of the-c eains w a< in the tield of heating energy. headed by the fact that almo-t 55 per cent of all new residential living
. ant < completed in Duke Power territory in 1969 chose electricity for hea t me. Thi< w as an increase of five per cent in marketing pe ne t rat ion.
The year aw Is.621 totai electric homes, apartments and moi >ile homen added to Duke lines, an increase of 17.9 per cent ocer Ifh;8 and the fourth straight year the t'ompany has led the nation in t his catevorv. December <et an all-time one-month mark w hen 2. pi5 tot al-elect ric installatiens were completed. The l 'o m pa ny ', Electrical Modernization Dealer Program, t % n -et national marks m 1967 and 1968. retained that p< rit ion in 1969 by conversion < >f 3.119 homes from other heatine systems to riectric heat. This program has converted 1o.111 homes to ciertric heat in the past four years. ( )ne o f t he mo.-t 3pectacular gains in residential marketing erforts occurred in t he mobile home division. The Company's progr am to guide and assi ,t manufacturers and dealers in the productu,n and sale of total-electric mobile homes which meet Duke rate 3pecificaton< resulted in an 87 per cent increase in total-electric mobile home customers. Over 10.000 mobile living j units were added during the year. 669 of which were total-electric. The Company considers this an important market _" /
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penetration and the beginning of a significant trend. Duke Power now serves 91.162 total-electric dwelling units, 1(esidential Service c.801 of w hich were added durine the past eight years. Total- Annual Average Usage electric residential customers now account for over 1.7 biliion "**'t"" kilowat t hour 3 annually. Annual averaee usage of electricity per Duke residential co-tom-r made yet another dramatic rise to 9.179 kilowatthours in 196 an increase of 747 kilowatthours or 8.9 per cent over 1968. This signiricant increa.we was due in part to the strong strides in acquiring electric heating customers to balance the constant erowth of summer air conditianing loads. Averaee usaee per Duke residential customer . 40 per cent greater than the national averaee. while cost to Duke customers per kilowatthour has been held to 18 per cent under the national average. The average usage per Duke et stomer was 82 per cent greater in 1969 than it was when the decade began. The ('ompany's high saturation of residential water heaters in its service area continu u in 1969. Over 74 per cent of all Duke customers now use electricity for heating water. Ou e mtews pa, la*. tess aN ese 40 mre e lec t r ' C , Man 'f'e U S. 3. erase. 9 {
4 Number of tit INDUSTRIAL SALES Total Electric Residences \ New and expanded industrial loads, including resale and large Thousands of Residences eral servke Wstomrs, held even with the previous year's record gains. These negotiations represented a net increase in contractual load of 323,990 kilowatts, with the major portion of Tai these customers requiring 500 kilowatts or more. New plants and expansions of existing plants requiring contractual loads of less than 500 kilowatts made a significant contribution of 28,030 kilowatts to the overall system load. F The net addition of 48 total-electric industrial plants in 1969 brought the number of such plants on the system to 192, establishing Duke as the nation's leader in this category. Among g these were 16 industrial plants which converted to total-electric operation-a record number which continues a noticeable trend of several years standing in the Duke service area. U27 Examples of new total-electric firms joining Duke lines during
*_* the year are: Coats and Clark, Inc. (plastics); Engineered Custom Plastics Corporation (plastic molding); Wright 3Iachinery Company (packaging machines); United States Gypsum Company Tii (mineral refining); Wynick Corporation (underwear); 3felville g Furniture Company (mobile home furniture); Pilot Furniture Company (upholstered furniture); and International Wire
" Products Corporation (wire).
/ The industrial sales picture is characterized by continuing so st 62 es 64 es as 67 sa e' diversification of manufacturing selecting the Duke Power area.
over 54 per cent of all riew homes and apart-ments built in Duke's service area during 1969 (stamped metal products); American 3Ieter Company (fluid EL'*pfn'y*$*s'EeI tn"e Un"s'Ntiesn tnj meters); Amp Incorporated (wiring devices); Southeastern catery Injection 3 folding Company (plastic products); and Benjamin F. Shaw Company (fabricated utility piping). Noteworthy industrial expansions during the year included Kimberly-Clark Corporation (hygiene products); Great Lakes Carbon Corporation (carbon electrodes); The Singer Company (motora and blowers); Talon Division of Textron, Inc. (zipper tapes); and Drexel Enterprises (furniture). Textiles continued as the largest single industry group served by Duke Power. While sales to textiles have increased steadi!v each year, the percentage of total industrial sales today is 62.4 per cent as compared to 75.4 percent in 1960. This has been due mainly to the exceptional industrial diversification taking place in the Duke service area. The outlook for continuing progress in industrial sales in 1970 is good, with the number of total-electric plants continuing to increase. 1 l a & J 10 I
Ouke Power led the nation's urolities for the fourth strarght year m number of total electric homes. apartments and mobele homes added to Company lines The 18.621 total electroc single family residences added on 1969 rncluded 171 apartments built by The Ervin Company on charlotte. The development. named Provo jence Square. wrli add another 100 units. e' E' .n
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Duke Power s Mobile Home Division nas r *.s t-corked closely with the Unciersity of r North Caroirna at Greensboro un the r im '.. design of attractive total-electric mobile r ~ :a homes The turnature industry blorth Carotona State University and Georgia Tech also are participarong in the program. s **
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Mobule home manufacturers have made f feat strides in modernizing and beautifyrng their product un recent years. This is the kotchen and hvsng room area of a 'Otal-electric mobile home Ousit by a Duke service area manufacturer. Emceress Mobrie Homes. Division of AABCO Industrie* Clin.*on. South Carohna. The Company added over 10.000 mobrie home customers on 1969.
I 1 ! i 1 l l Consumer Price Index and CO.il.TIERCIAL SALES j Duke's Ascrage Charge Per K%II Total-electric commercial buildings joining Duke lines in 1969 ' j totaled 982. This represents a 37 per cent increase over the l j number added in 1968 and brings the system total to a l m nationally prominent 4,786. f . Two recent trends in Commercial Sales continued as j "'. commercial revenues exceeded the previous year's record growth a . by 11.3 per cent on sales of 4.8 billion kilowatthours. The first of these trends, toward total-electric educational i l m
# buildings, remained a strong factor as 11 colleges and secondary schools added total-electric facilities during the year.
Some of these were: Rockingham Community College, Wilkes Commumty College, Central Piedmont Community College, Duke ix University, and Wofford College. 3fany other total-electric j ! education buildings are under construction. l l " The other trend in Commercial Sales retaining a position of l y prominence was the choice of the total-electric concept by shopping centers. One of the largest such total-electric shopping e centers completed in 1969 was the IIolly Hill 3Iall (453,000 y square feet) in Burlington. One of the largest total-electric shopping centers in the Southeast, the SouthPark Shopping nu u u o o e a o a no Center (1,000,000 square feet) in Charlotte, will begin operation ns,3, . ix in 1970. Other large total-electric projects announced in 1969 included Burlington Corporation he. dquarters in Greensboro; North l Carolina National Bank computer headquarters in Charlotte; and ) the City Administration and Superior Court Buildings in Greensboro. Among other large, total-electric office buildings added during the year were Kemper Insurance, E. L DuPont, Educational Administration Center, the Little Ol' ice Building, and Court Plaza in Charlotte; Lamb-Young and a 31unicipal Convention l Center in Winston-Salem; and a 210,000-square-foot addition l to the 3Ierchandise 3 fart in Charlotte. In all, 75,000 kilowatts of Commercial electric space heating load was added in 1969. AGRICULTURAL SALES I The conversion of 211 farms to total-electric operation in 1969 held steady with the previous year's record growth in this marketing area. The additions brought the number of total-electric farms served to 1,484 and placed Duke Power among the nation's leaders in this category. The sale of electricity for farm purposes made another rise as electrically-powered equipment and machines continued to replace hard-to-find labor. The trend toward consolidation of smaller Piedmont Carolinas farms into larger, more etlicient units continued unabated in 1969. Farm classification customers now served by the Company total 40,619, while other rural customers number 398,619. Annual average usage by the total-electric farm classification customer in 1969 was 23,714 kilowatthours, an increase of 1,570 kilowatthours over 1968. All farms in the Duke service area have had electricity available for many years. 12 l l
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4 New and Espanded 566i INDl'STRIAL DEVELOPMENT Industrio,al Plant Growth Expansions of existing industrial plants highlighted an rui.ons oonars g
,m excellent year of industrial development in the Duke Power service area. Fifty-three per cent of all industrial expansion in the two Carolinas, representing an investment of $370 million, E occurred in Company territory.
In addition, investment in new plants in the Duke area accounted for an additional $291 million, giving the Company service area, which is but one-fourth of the Carolinas land area, nearly half of the record $1.4 billion invested in Carolinas pu"" industry during the year. The combined investment of a record $661 million for new and expanded industry in the Duke area represents 22.200 jobs and g\ an annual payroll increase of $110 million. For the six-year period ended 1969, Duke Power's service area has acquired 2.681 new and expanded industries requiring an sai s2is investment by those industries of $3.4 billion and creating over 146,000 jobs for a payroll increase of $631 million. Some of the larger new industries selecting the Duke area in 1969 were Burroughs-Wellcome & Co., Inc. (pharmaceutical research), Westinghouse Electric Corporation (turbine blades), The Timken Roller Bearing Company (bearings), and International Wire Products. Announcements of large expansions were made by PPG Industries Inc. (glass fibers), Broyhill 60 61 62 63 64 65 66 67 68 69 , , , and Parke, Davis and Company (pharmaceuticals). industrial custorners have invested 54.5 billion in nem and espanded plant facil. ties in Duke's service area durmg these years. g g The Company now has 9,529 employees,1,449 of whom were added in 1969. The Keowee-Toxaway Project required the addition of 906 of the new employees as construction of that large generating facility moved into its peak period. Duke Power is one of the few utilities in the United States which designs and builds most of its generating plants. The Company's Stock Purchase-Savings Program again attracted heavy participation by employees, with 85 per cent of all eligible employees purchasing stock in the Company during 1969. Employees have purchased 529,585 shares of common stock through payroll deduction since the plan's inception. The Comprehensive Medical Insurance Plan was improved during the year to provide broader medical coverage for employees (active and retired) and their dependents. All active employees except those with the Company less than 90 days are insured under the Plan and 7,164 employees are insuring their dependents. During the year the Company's stockholders approved substantial changes in the Employees Retirement Plan. The formula for computing benefits under the Plan was re-designed, thereby increasing the expected over-all retirement income for employees at their retirement. The benefits of the Plan have also been integrated with Social Security. The retirement income for employees who retired prSr to January 1,1969, was adjusted upward on a sliding scale from 1 per cent to 15 per cent depending on the length of time each had been retired under the Plan. Presently there are 907 l 14
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WorkingWithYouth Duke Power Company and its employees are helping Duke Power contributes one share of its common stock to each mold the youth of the Predmont Carolinas un many Science Fair winner in the Company's servoce area. One school, e Mr I of es ounty, posted % remadaWe rec 0M of ways These contacts with servoce area youth can five winners m 1969 Science Fair competstron. The school's come as a part of an employee s job. but just as superb science program is headed by Richard Harrts, Jr. (center). Otten they result from the employee s sense of service to his communoty Doke Power formly beheves that one
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of its most umportant duties as an anvestor-owned . . . ., a utrhiy is to be a quahty citizen on the area at serves. y [ Thos, as these pages show. includes working w:th - Our young people <
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School cholaren by the thousands are flocking to the .
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of Energy Many Carorinas schoots are makong a visit
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The Company's Home Service Adnsors conduct dozens of nomemakot'g classes for all ages during a year. On this particular day Eugenia Miles of the Greenville Distrrct was teaching Brownie Scouts the art of cook *e baking.
1 A number of employees take the Duke Power Story into the schoolroom, such as Jack McCachern of 4' > the Charlotte Distnct othce is doing here. Each of L ) , / , the Company's distncts wrH suopty teachers"
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, b. . The Junior Achievement program has long received enthusiastic support from
.r d4 Duke Power, and this interest :s reflected m the number of awards won by the youth companies sponsored by Duke and its subsrdranes. President W B. McGuire is obviously pleased to offer congratutat:ons to the instructors and ottocers of the Junior Duke Power partecipates in the 4-H Electric Achoevement companies whrch represented Duke Power and Mil: Power Supply l Company in Chart tte dunng 1969.
Congress m both Garchass, and in 1969 the winners m each state were from the Duke service ares. Shown checking airline schedules for their tno to the National 4-H Electric Cor'gress in Chncago are North Carohna wmnet Sylvia Walters of Davidson County and Sourn Caroima winner Rscky Looper of Puckens County. Helomg with the piane selection is Doug Booth, Vice President - Marketing.
employees and the surviving spouses of 16 employees receiving benefits from the Plan. Two union elections were held in 1969. On January 9th the employees of Allen Steam Station voted for union representation, and on February 5th the employees of Riverbend Steam Station rejected the union. Twenty-three per cent of the Company's eligible electric-system employees are represented by unions. Employee publications and communication programs helped keep employees aware of all developments affecting the Company business. RECRUITING The Company's recruiting efforts kept pace with other record-breaking aspects of Company operation in 1969. Although competition for the top-level college graduate remained intense, Duke Power's total placement activity increased by approximately 50 per cent over the previous year. Results were particularly pleasing in the acquisition of engineering graduates. A total of 85 engineers joined the Company during the year, 62 of whom were June graduates. Twenty-one of these 1969 graduates were attracted to the Company through a program of summer employment for students. Training in areas of electric operations, computer programming and economics of the free enterprise system is included in this program. Two hundred and twenty-six engineering students visited Duke Power's generating plants during the year, and these visits affected a number of job decisions in favor of the Company. Hundreds of other students also were guests at Company facilities. Recruiting at technical schools and community colleges for draftsmen and technicians was intensified. This resulted in the hiring of d technical school graduates durir.g the year. TRAINING PROGRAMS Full use was made of additional facilities at the Company's Lake Hickory Training Center as 228 supervisors and middle-management employees participated in the Supervisory-Management Development Program. This program has provided training for 1,703 management-level employees since its inception in 1959, plus review sessions for 910 of these employees.
' Seventy-six employees, completed 106 courses of study under the Company's Tuition Refund Program in 1969. Seventy-two employees are currently enrolled in classes under this system.
This involves primarily technical schools and correspondence schools. Another program, which is providing many of the licensed reactor operators to be needed at the Oconee -Nuclear Station, continued in 1969. Under this program selected employees are given two years of intensive training leading toward an Atomic Energy Commission operators license. SAFETY Observation of safe work practices by employees held the Company's frequency of accidents well below the' industry 18
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-s* many of these students back for tu!Itime Mt ' P empicyment following graduation. In u 1969 over 400 sUdents worked in this a +R:. . program, and 29 June graduates who accepted employment had become
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average. One distribution district. Gastonia, highlighted the accident prevention program by completing an entire year without a single vehicle accident or disabling injury. Five other Company units achieved safety records of 1,000,000 consecutive , manhours without a disabling injury. These achievements were cited by state and national organizations. ROHINSON AWARDS Lifesaving, a display of courageous citizenship, and psychological assistance that saved a distraught child from injury or death won Robinson Awards for three Duke Power employees in Slay. The Robinson Awards, given annually and named for the late W. S. O'B. Robinson, former Board Chairman, recognizes employees for outstanding service categories. The winners are nominated and selected by fellow employee.. Winners were David Glenn Beam, 3farrhall Steam Station construction force; Curtis Ward, Supervisor of Transmission Line 3faintenance, Greenville, S. C., and E. James Tyson, Supervisor of 3fobile llome Sales, Charlotte. Beam saved a fellow employee from drowning, Ward talked an 11-year-old girl into accepting , his aid in leaving a perch high in a transmiasion t_wer, and Tyson stopped and nelped apprehend thieves who were ransacking a neighbor's house. Since the awards were instituted in 1961, twelve have been > given for improved design and procedures, eix for community and civic activities and five for lifesaving. In April the direct rs appr ved the transfer of all of the SubsidiaryFormed Company's non-utility lands to Crescent Land & Timber Corp. Crescent is a wholly owned subsidiary and will manage and develop the approximately 300,000 acres of property involved for its best use. About 250,000 acres is presently considered forestry land, and about 150,000 acres of this is being used by the Wildlife Commissions of the Carolinas for game management areas. Over 9,000 acres is devoted to recreational cottage sites. It was announced in October that Crescent Land & Timber would be a participating partner in a $250 million amusement, resort, and residential development to be beilt astride the North Carolina and South Carolina state line near Charlotte. The project will faature a Disneyland type amusement. area and part of the land included in the total development is now owned by Crescent. Crescent Land & Timber also was the instrument for the donation of 1,000 acres of wooded land to the state of South Carolina for a state park. To be known as the Keowee-Toxaway State Park, the area lies across a peninsula formed by the entrance of two creeks, Eastatoe and Cehr, into Lake Keowee, and is split by the new S. C. Scenic Highway 11. The park will contain a museum of area artifacts including many of those found by the Duke Power-financed archeological explorations of historical sites in the lake bed. These explorations were conducted by the S. C. Department of 20
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Crescent Land & Tomber Corp., -'- % l gave the state of South Carolina 1.000 . * . .' . ; *:-. .
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acres of land on Lake Keowee for a state park. Governor Robert McNarr (lett)
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recerves a deed to the property from Duke ' - Power President W. B. McGuire and - C' ' h_} e Herman Hermelink, president of Crescent , k ^4X Land & Timber.
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Archeology. The park's recreation area will be called the Duke Power Recreation Area. The Company's Forestry Program, begun in 1939, will continue as part of the responsibilities of Crescent Land & Timber Corp. Crescent planted over 1.8 million trees in 1969 on 2,942 acres of watershed lands. This brought the total number of trees planted by Duke Power and its subsidiary to over 38 million on 49,812 acres in 30 years. Company lands now under scientific lu.*st management total 270.852 acres. Ci ' scent harvested 33,409,000 board feet of timber in 1969, along with 53,532 cords of pulpwood. The timber and .wlpwood are sold on the stump to private contractors who harveu it and prepare it for sale to pulp, furniture and construction industries in the Carolinas. The operations of Crescent Land & Timber produced about $1.2 million gross income in 1969. ENVIRONMENTAL CONCERN Environmental consideration, which has been an integral part EnvironmentalConcern of Company programs for many years, played its usual prominent role in Company actions and decisions in 1969. The Company expanded its program for installing air pollution control equipment at coal-burning power plants. All new coal-burning plants are being built to include high efficiency fly ash collection equipment. In addition, the collection effectiveness at existing plants is being upgraded through a separate $12.8 million program. This comprehensive air pollution abatement program is scheduled to be essentially completed before the end of 1972. All Duke plants burn low-sulphur coal and no special equipment is required for the control of sulphur oxides in the discharged gasses. Large steam electric generating units, whether nuclear or coal fired, require large quantities of cooling water, and provisions have been made to prevent the accumulation of objectionable heat in this cooling water. Duke's existing large steam generating units are or will be served either by man-made cooling lakes or cooling towers to dissipate the heat absorbed by the cooling water. Two new generating plints now being constructed, the Oconee Nuclear Station and tae Belews Creek coal-burning station, will have cooling lakes. The new coal-burning unit at Cliffside Station will utilize cooling towers. The Company is continuing its fourth year of participation in the industry's large-scale research project with Johns Hopkins University to study the biological effects of cooling water discharges on marine life. Thus far, the study has determined some beneficial and no ill effects in Duke lakes. The environmental aspects of nuclear power entered into the Company's November announcement that it would build a second nuclear plant. The Company's conclusion is that large nuclear power plants definitely can be compatible with the environment, and the absence of conventional air pollutants is a significant advantage for nuclear power. Strong public interest in environment was evidenced during the year by an unusually large number of inviktSns for 22
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Company personnel to participate in programs on the subject. Programs describing the Company's environmental activities are being constantly requested by groups such as college campus seminars, technical society meetings, civic clubs and high school science classes. The Company staged a Thermal Effects Conference for its service area news me<% and regulatory agency personnel in April which war well received.
^ main goa of the proposed tax reforms you've been hearing TaxReform. an.d .
Your ElectricBill about is fairer distributton of taxes. You may not know that the rederai tax inciuded in the eiectric bm of eiectric company customers is omitted from the electric bill of customers of government fmanced electric power businesses. For the future the U. S. Treasury has expressed interest in additional reforms, including reforms affecting exempt organizations. It would seem to be only a matter of time befpre a change in favor of tax equality among electric users is made. 3Ieanwhile, the Federal tax bill paid through the investor-owned electric utility amounts to over $1.5 BILLION a year. No Federal income taxes are collected from government power operations. Federal power projects, however, are very big business . . . more than $8 BILLION is invested in government plant and equipment to make and sell electricity. Since the government collects taxes through some electric bills, it's clearly fairer to collect taxes through all electric bills and not just those of customers of investor-owned companies. Both kinds of customers benefit from government services paid for through such taxes. The four out of every five electric users in this country served by investor-owned companies pay an average of about 22g out of every electric-revenue dollar in taxes. The 20 per cent of customers served by government financed power businesses pay only a fraction of this amount, paying no Federal income tax and usually lower state and local taxes. There is no good reason to continue this discrimination, especially when the government is trying desperately to balance the budget and arrest inflation. Equality of taxes imposed on electric bills would not only be fair for all concerned but also would provide additional mil: ions in support of the Federal budget. Even among our shareholders, people often are not aware that government-operated power businesses do not pay the same taxes as do investor-owned companies. But when it'is brought to their attention, surveys show that most people feel that government power businesses and government power consumers should pay their fair share of taxes. As future tax reforms are considered by the Congress, your Senators and Representatives in Washington would be helped in carrying out your wishes if they knew how you feel on this important issue. 24
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Capital expenditures during 1969 for new and g g g y* e improved electric plant and other facilities amounted to $282.806,000. This represented an increase of $85,658,000 or 43.4 per cent over the amount expended in 1968, reflecting a steadily increasing demand for electric service as well as the effects of intiation. About 20 per cent of the cash funds required to finance the 1969 construction program was obtained from current operations, after payment of interest and dividends to investors. The balance was obtainel from the sale of the Company's securities and from bank borrowings and scles of commercial paper. Permanent financing during 1969 consisted of an issue in February of $75,000,000 principal amount of First and Refunding Mortgage Bonds, 1999 Series, at an interest rate of 7 per cent; an issue in September of $75,000,000 principal amount of First and Refunding Mortgage Bonds, 1999 Series B, at an interest rate of 8 per cent; and a $50,000,000 issue, also in September, of GM per cent Cumulative Preference Stock, Convertible Series AA. The Preference Stock is convertible into the Company's Common Stock at an initial conversion price of $35.00 per share. During the year, a total of 79,440 shares of Common Stock were sold to the Trustee of the Stock Purchase-Savings Program for Duke Power Employees for $2,791,000. During the first quarter of 1970, the Company will issue 2.500,000 shares of Common Stock through a negotiated public ofYering, and
$75,000,000 principal amount of First and Refunding Mortgage Bor.ds at competitive bidding. The' proceeds from these two issues will be used to repay short-term obligations incurred to finance construction.
Estimated expenditures for electric plant facilities for the three years 1970-1972 are
$1.04 billion, including $358 million in 1970.
Of the three-year total about 62 per cent will be expended for new generating facilities, including the Oconee Nuclear Station, Units 1, 2 and 3, the Keowee and Jocassee hydroelectric units, Cliffside Steam Station Unit 5, Belews Creek Steam Station Units 1 and 2 two additional nuclear units to be built at a site near Cowans Ford Hydro Station, and several peaking units. The balance of_ plant additions will consist of electric transmission, distribution and other facilities. It is estimated that about 27 per cent of the funds required for the 1970-1972 construction program will be obtained from' operations and about 73 per cent from'outside financing. 26
Statementof Source of Fundsfor Plant ConstructionExpenditures T.., m.m.-' 1969 1968 SOURCE OF FUNDS: Operations-Earnings for common stock. .. ... . . . . . $ 47,448,000 $ 44,171,000 Less-Dividends on Common stock. . . . . 32,478,000
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30,069,000 Earnings retained for use in the business. 14,9 4 000- 14,102,000 Add-Noncash charges-Depreciation and amortization. . . 42,720,000 38,393,000 Investment tax credit, net. . . . 1,507,000 2,280.000 Funds from operations. . . .. .. . 59,197,000 54,775,000 Financing-First mortgage bonds. . . . 150,000,000 75,000,000 Preferred stock . . .. ..
- 35,000,000 Preference stock. . . . .
50,000,000 - Common stock ... . . . . 2,791,000 2.470,000 increase in notes payable. . . . . . . 28,477,000 18,940,000 Retirement of sinking fund debentures. ... ( 1,250,000) ( 1.250,000) Funds from financing. . . .. ... 230,018,000 130,160,000 Total available funds. . 289,215,000 184,935,000 Other-(Increase) decrease in working capital, etc. . . . (6,409,000) 12,213,000 PLANT CONSTRUCTION EXPENDITURES. . . . 5282,806,000 $197,148,000 Accountants' Opinion H AS KINS a S ELLS Cc ATWicD PUBUC ACCOUNTANTS DUKE POWER COMPANY: We have examined the balance sheet of Duke Power Company as of December 31, 1969 and the related statements of income and retained earnings for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying balance sheet and statements of income and retained earnings present fairly the financial position of the Company at December 31, 1969 and the results of its oper-ations for the year then ended, in conformity with generally accepted accounting principles applied (except for the change to accelerated tax depreciation end " flow-through" income tax accounting for certain electric plant additions as explained in (c) of note I to the financial statements) on a basis consistent with that of the preceding year. Charlotte North Carolina January 26. 1970 27
Balance Sheet ASSETS on m ow at hbh 1hbb ELECTRIC PLANT At original cost-Electric plant in service. .
$1,425,463,000 $1,251,993,000 Construction work in progress. .. .
310,398,000 214,881,000 1,735,861,000 1,466,874,000 Less-Accumulated depreciation (Note 2) 451,802,000 418,298,000 Electric plant, net. . .. . 1,284,059,000 1,048,576,000 OTHER PROPERTY At cost . ....... .. . . 14,688.000 21,650,000 Less-Accumulated depreciation . 2,148,0_00 3,807,000 Other preperty, net. . . 12.540,000 17,843,000 INVESTMENTS Common stock and advances to unconsolidated subsidiaries-at cost. . . . . . .... 21,874,000 9,446,000 Other securities-at cost or less. . 685,000 684,000 22,559,000 10,130,000 CURRENT ASSETS Cash.... ... ... .. ..... . . 14,790,000 14,315,000 Receivables, less allowance for losses. . 26,873,000 24,341,000 Materials and supplies-at average cost. . 33,991,000 34,067,000 Prepayments . . .. .. . . .. 407,000 335,000 76,061,000 73,058,000 DEFERRED DEBITS Debt discount, premium and expense, being amortized . . ... ... . . .. 2,180,000 804,000 Other . . . . . . . . . ... 1,577,000 2,664,000 3,757,000 3,468,000
$1,398,976,000 $1,153,075,000 1
28
LIABILITIES oec meer n 1hbh 1hbb CAPITALIZATION Capital stock and retained earnings (Note 3): Common stock, no par-outstanding 23,239,739 shares and 23,160,299 shares, respectively. . . .. . $ 319,249,000 $ 316,458,000 Retained earnings. . . 66,941,000 52,775,000 , Total common stock equity. . 386,190,000 369,233,000 1 Preference stock-$100 par: 6%% Convertible Series AA, outstanding 500,000 shares. 50,000,000 Preferred stock-5100 par: l 4.50% Series C, outstanding ' 350,000 sha res . . . . . . . . . . . 35,000,000 35,000,000 5.72% Series D, outstanding 350,000 shares. ........ . . 35,000,000 35,000,000 6.72% Series E, outstanding 350,000 shares. .. . .. . 35,000,000 35,000,000 Total capital stock and retained earnings. . . 541,190,000 474,233,000 Long-term debt (Note 4). . . . .. .. 663,750,000 515,000,000 Total capitalization. . . . . . . . . 1,204,940,000 989.233,000 CURRENT LIABILITIES Accounts payable . .... . . . .... . 12,615,000 12,729,000 Customers' deposits . ....... .. 2,460,000 2,101,000 Taxes accrued. . . . . ... ... 13,914,000 19,174,000 interest accrued . . . ... . .. 12,877,000 8,705,000 Other .. . ... ... 1,128,000 957,000 42,994,000 43,666,000 Notes payable for construction-pending permanent financing (Note 5). . . . .. 128,817,0_00, 100,340,000 171,811,000 144,006,000 DEFERRED CREDITS, ETC. Investment tax credit, being amortized (Note 1). . . ...... ....... 13,248,000 11,741,000 injuries and damages reserve. . . ... ... 2,264,000 2,258,000 Contributions in aid of construction. . . . . . 5,988,000 5,235,000 Other deferred credits. . . . . . . . . . . . . . . 725,000 602,000 Commitments (Note 6) 22,225,000 19,836,000
$1,398,976,000 $1,153,075,000 s.. in. .ccomo.nring not.. to rin.nci i statements 29
Statementof Income Year Ended December 31 ELECTRIC REVENUES . .. . . $342,242,000 $312,246,000 ELECTRIC EXPENSES AND TAXES: Operation-Fuel used in electric generation. . .. .. . . 91,135,000 76,035,000 Purchased power . . .... . 11,127,000 10,635,000 Wages and benefits, materials, etc. .. .... 43,996,000 39,407,000 Maintenance of plant facilities-wages, materials, etc.. . 16,146,000 14,020,000 Depreciation . . . . .... 41,934,000 38,075,000 Taxes-General . . . . .. ... . 31,242,000 28,104,000 Federal income. . .. ... .... 25,176,000 35,740,000 State income. . . . ... .. . 3,788,000 4,861,000 investment tax credit: Tax credit deferred. . . .. . .. 4,819,000 2,830,000 Amortization of deferments (credit). ... .. (3,312,000) (550,000) Total electric expenses and taxes. .. .... . 266,051,000 249,157,000 Electric operating income. .. ... 76,191,000 637089,000 OTHER INCOME: Dividends from subsidiaries. . . . ..... . 1,200,000 750,000 Other dividends and interest. . ....... .. 156,000 385,000 Other, net .. . .. . ... . .. . ... 984,000 1.592,000 Total other income . .. . .. . . .. .. 2,340,000 2,727,000 Gross income . . . . ..... .. 78,531,000 65,816,000 INCOME DEDUCTIONS: Interest on long-term debt. .. . . ... .. .. . 29,044,000 21,887,000 Other interest . . . . .. . . ....... . . 9,663,000 3,460,000 Interest charged to construction (credit). . .. ....... (15,711,000) ( 9,667,000) Other .... ... . ...... . . . .... .. ... 1,118,000 995,000 Total income deductions. . . .. ......... 24,114,000 16,675,000 Net income (Note 1). . . . ... 54,417,000 49,141,000 DIVIDENDS ON PREFERENCE AND PREFERRED STOCK. . 6,969,000 4,970,000
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Earnings for common stock. . .. ... $ 47,44(000 $ 44,1717000' PER SHARE OF COMMON STOCK (Note 1). . . .. .. $2.05 $1.91 See the accompanying notes to financial statements l l t l 30
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Statementof Retained Earnings I
..a, _. rm 1969 1968 RETAINED EARNINGS-Beginning of year. . .. .. .... . $ 52,775,000 $ 69,162,000 ADD-Net income for the year. . . . . . . . . . . . . . . . . . ..... 54,417,000 49,141,000 Total . . . . . . . ... ... . .............. 107,192,000 118,303,000 DEDUCT:
Cash dividends-Common stock ($1.40 and $1.30 per share, respectively) 32,478,000 30,069,000 Preference stock (annual rate $6.75 per share). .... 1,040,000 - Preferred stock-Series C ($4.50 per share). . ... .. .. . ..... 1,575,000 1,575,000 Series D ($5.72 per share). . . .... .... ... . 2,002,000 2,002,000 Series E ($6.72 per share). . . . .. .... .... . 2,352,000 1,393,000 Transfer to common capital stock account. . . . . . . . . . . . . - 30,000,000 Capital stock expense. .... .... ..... .. ... .. 804,000
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489,000 1 Total deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,251,005 ~~ 65,528,000 i RETAINED EARNINGS--End of year. . . . .......... .... $ 66,941,000 $ 52,775.000 l Notes to Financial Statements I. ACCOUNTING CIIANGES. Net income for 1969 has 4. LGNG. TERM DEBT. been increased by $5,125.000 ($.22 per common share) as a result of certain changes effective January I. ,1969, as First and Refunding December 31 follows: (a) $725.000 from reduction of dep eciation rates hfortgage Bonds: 1%9 1968 for electric generating facilities to the Internal Revenue 3% Series due 1975. . . .$ 40.000,000 $ 40,000.000 Service guideline rates t$l,629.000 reduction in depreciation 2.65% Series duc 1977. . 40.000,000 40.000,000 less related income taxes); tb) $2,650.000 from reduction of 2% % Series due 1979.. 40.000.000
. 40.000.000 the amortization period of deferred investment tax credits 3h % Series due 19MI. 35.000,000 35.000.000 from twenty-Hve to nye years; and (c) $1.750,000 from he 3%% Series due 19M6. . 30.000.000 30.000,000 adoption of " flow-through' income tax accounting in con. 4% % Series due 1992. . . . 50.000,000 50,000,000 nection with the use for income tax purposes of accelerated 4%% Series B due 1992. 50,000,000 50,000.000 depreciation on additions to electric generating, transmission 4%% Series due 1995. .. 40.000.000 40.000.000 and certain general plant facilities acquired after December 5 % % Series due 1997. . . . . . 75.000.000 75,000,000 l
- 31. 1967. 6% % Series due 1998. .. . 75.000.000 75.000.000 7% Series due 1999. . . . . 75.000.000 -
- 2. DEPRECIATION OF ELECTRIC PLANT. Provisions N% Series B due 1999. 75.000,000 -
for depreciation are recorded using the straight-line method Sinking Fund Debentures: at annual rates which averaged 3.30% for 1969 and 3.34% 4%% duc 1982. .. .. 38,750.000 40.000.000 for 1968. Total . . . . . . . . $663.750.000 $515.000.000.
- 3. CAPITAL STOCK. The Company's authorized capital stock consists of 1.500.000 shares of preference stock.
2.250.000 shares of preferred stock and 30,000.000 shares 5. FINANCING. See page 26 under " Financing" con. of common stock. The outstanding preference stock. 6%% cerning debt and equity securities issued during 1969 and to Convertible Series AA. is convertible into shares of common be issued early in 1970. stock at the initial conversion price of $35 per share, each share of such preference stock being taken at $100 for 6. COMMITMENTS. Capital expenditures for property such purposes. The conversion price is subject to certain additions for 1970-1972 are estimated at $1.04 billion of adjustments designed to protect the conversion privilege which $358 million is expected to be spent in 1970. A against ddution. At December 31, 1969. l.428.571 shares substantial pcrtion of such expenditures has already been of the common stock were reserved for the conversion fat committed. the initial conversion price) of the Series AA Preference Stock and an additional 470.415 shares were reserved for 7. RETIREMENT PLAN COST. The cost of the Com. issuance under the Stock Purchase-Savings Program for puny's non-contributory Employees' Retirement Plan is Employees. bawd on the consulting actuary's computation of require. The outstanding preference and preferred capital stocks ments. The Company's policy is to fund pension costs ac. are callable at the option of the Company at various re. crued. Costs for the year 1969 were $3.979.000 including demption prices not exceeding $110 a share plus accu. $8M5.000 for past service. As of December 31.1969 past mutated dividends to redemption date. Service costs were fully funded, with minor exceptions. 31
10-Year Financial and Statistica1 Summary INCOME DATA (DOLLARS IN THOUSANDS) 1969 1968 1967 1966 Electric revenues: Residential sales. . $ 126,145 $ 114,576 $ 103.127 $ 95,902 Commercial sales. .. . 66,378 59.650 52,490 47,547 industrial sales . 109.688 102.627 93,730 86,596 Other energy sales. . . 36,576 32.255 30,036 25,933 Other revenues. . . 3,455 3.138 2.939 2,716 Total electric revenues. . 342,242 312.246 282.322 258,694 Electric expenses and taxes: Operation and maintenance. . 162.404 140,097 123.121 111,396 Depreciation . .. . 41,934 38,075 34.544 31.524' Taxes. 61,713 70,985 64,731 61.538 Total electric expenses and taxes. 266,051 249,157 222,396 204,458 Electric operating income. . 76.191 63,089 59.926- 54.236 Other income. . . . ... . .. , ,. . .. 2,340 2.727 2,235 2.472 , income deductions. ...... .... 39.825 26.342 20.213 16.612 ' Interest charged to construction. credit. 15,711 9.667 4,245 1.638 , 4'll3i
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income before extraordinary items. . 54,4D 49,141 46,T93 Extraordinary items. . . 854 4.103 i Net income (a). ... ........ 54,417 49,141 47,047 45.837 : Dividends on preference and preferred stock. 6,969 4.970 - 3,514 2,141 . Earnings for common stock. . 47 448 447171 43.533 43,6961 Dividends on common stock. . 32.478 30.069 27.676 25,309 : Earnings retained for use in the business. 5 14,970 $ 14,102 $_ 15,8_57 5 18,387 COMMON STOCK DATA Shares of common stock-year end (thousands) (b). . . . . . . . 23,240 23,160 23,094 23.033 Per share of common stock (a) (average shares outstanding): Earnings before extraordinary items. .... $ 2.05 $ 1.91 5 1.85 $ 1.72 1 Extraordinary items, net of related income taxes. - -
.04 .18 :
Earnings for common stock (a). . 2.05 1.91 1.89 1.90 ' Dividends paid . . . . . . 1.40 1.30 1.20 1.10 ; Market value-high-low . . .. . . 43 %-27 % 43 % -33 % 43%-30 43-35% !
-Year end . . . . . 29% 38 % 37 40%
BALANCE SHEET DATA (DOLLARS IN THOUSANDS) Electric plant (original cost). . $1,735.861 $1,466.874 51,281.135 $1.124,220 Accumulated depreciation. ... , , 451,802 418,298 387,959 354,512 Capitalization and short-term notes: Common stock equity. . 386,190 369,233 353,150 335,016 l Preference stock. . . . 50,000 - - - Preferred stock . . . .. . 105,000 105,000 70.000 64,700 i Long-term debt . .... . .. 663,750 515,000 441,250 367.500 , Short. term notes payable . . . 128,817 100,340 81.400 41.000 . ELECTRIC AND OTHER STATISTICS Kilowatthour sales (millions): Residential . . . . . 7,340 6,547 5,777 5,320 ! Commercia! . . .. . .. . . ... 4,767 4,197 3,579 3,148 - Industrial . .. . . .. . .. 14.593 13,634 12,337 11,442 Other. . . . . . .. 5,180 - 4.521~ 4,223 3,532 Total kilowatthour sales. .. _ 3iT80 28!899 25,916 23,442 Number of customers (year end): Resid0atial . .. . . ... . 810,743 785.830 762,658 743.504 Other. . .. ... . .. ... 124,496 119,959 114,874 110,174 ' l Total customers. . .. . .. 935T239 905.789 877332 853,678~ Residential customer data: Average annual KWH use. ... ... . .. . . . 9,179 8,432 7,664 7.306 Average revenue per KWH. . . . . . .. ... . ... 1.72C 1.750 1.79C 1.80c Number of employees (year end): Operating and maintenance. . . ...... 7,210 6.666 6.290 5,988 1 Plant construction. . . ................ . ... . 2,319 1,413 906 493 Source of energy (millions of KWH): Generated-Steam .. . . . . ... 30.591 28.019 26,276 24.067 i
-Hydro . . ...... ........ ... .. . 1,784 1,521 1,315 1.401
' -Combustion turbines. . . . . . . . . . . . . . . . . . 643 173 2 - Purchased and net interchange. . . .. . ..... 1,758 2.024 799 430 Loss and company use. . . . .. . ... .... .. 2.672 2.615 2.223 2.259 :
*4 loss and company use. . .. . .......... . 7.7% 8.2% 7.8% 8.7% '
System average heat rate. . .. .. .. . 9.738 9.700 9.691 9.619 System load factor. . . .... . .............. 68,9 % 65.9 % 70.1% 66.1 % (a) See Note 1 in the accompanying Notes to Financial Statements. (b) Adjusted for 2 for 1 split in 1964 32
i i i Electric Plant Investment Mdhons of Dollars l l 1965 1961 1963 1962 1961 1960
$ 88.591 $ 83.757 $ 79,272 $ 74,574 5 71,972 5 65,973 45,867 41.317 37,177 34,550 31,616 29.238 ! 75,003 68.983 64,357 60,062 54.331 52,376 22.337 19,986 20,381 18,605 16,647 15,172 2.567 2,730 2,185 1,886 1,758 1,954 23I,365 216,773 203,372 189.677 176.324 164.713 96,344 89.063 85,450 78,082 73,069 69,645 28,855 27.693 26,199 25.063 23,604 21,267 58,268 ~
54,496 51,195 45,679
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44.471 41.049 183.467 1717252 162344 148 824 141,144 131,961 50.898 45,521 40,528 40,853 35,180 32.752 ' 1.970 1.613 1,747 1.477 1,335 1,277 15.321 14,079 13,335 14,763 11.306 10,730 4 2.215 2.488 2.983 2,430 2,025 2.292 39,762 35,543 31,923 29,997 27,234 25T91
-, 1,067 -
(1.244) - - - i 40.829 35,543 30,679 29,997 27,234 25,591 1 1,575 1,553 1.360 1.360 1.360 1.360 l 39,254 33,990 29,319 28.637 25,874 24.231 22.956 ~ 21.768 20,576 19,410 18.088 15,963 i $ 167298 5 12 222 5 8,743 $ 9,227 $ 7.786 $ 8,268 IJS9 1964 1%9 l 22,979 22,935 22.896 22,855 22,812 22.038 ,,g,,,,
$ 1.66 5 1.48 $ 1.34 $ 1.25 $ 1.15 $ 1.10 , , , ,
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(.05) - - - j 1.71 1.48 1.29 1.25 1.15 1,10 over si eithon was invested in erectne plant in 1.00 .95 .90 .85 .80 .72 the 10-year pened and rnore than $1 b,ihon is 44-35 37-31% 33-26 % 30 %-21 % 31 %-25 % 27-20 % scheduied for the years 1970-1972, 42 % 36% 31 % 28% 27% 27
$1,038.386 $ 973,121 $ 916.790 $ 854,968 S' 798,849 $ 743,704 2 5 327,166 302,251 280,588 256,194 234,986 214,649 al ,7m) ,n
{a , 314,985 296.404 285,058 275,071 264,656 239,361 I 25,384 35.b00 35.500 25.573 25.584 25,284 368,750 330,000 331,250 332,500 283.750 285,000 18,000 30,700 14,000 - 14,800 5,200 4.817 4,503 4.175 3.832 3,690 3.347 2,955 2.509 2,131 1.938 1,737 1.587 10,032 9.041 8.390 7,778 6,995 6,736 2.878 2.536 2,589 2.346 2,087 1.901 ssei 20.682 18.589 17,285 15,894 14.509 13.571 711.942 691,492 671,508 657,916 638,117 628.875 107,560 103.715 98,518 95.377 91,537 o0.938 $4.o 819"502 795.207 770.026 753,293 729,654 719.813 ; 6,856 6,590 6.279 5,900 5.636 5,382 1.84C 1.86C 1.900 1.950 1.95C 1.97C l 5,735 5.761 5.613 5,629 5,537 5.595 500 666 693 641 1,023 723 20,386 17,736 17,206 15.378 13,854 12.904
! 1,962 2,126 1,125 1.515 1,643 1,956
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. y EDWARDS VATTISON McGUIRE l
The Corepany s Directors got a iw t,rst-hant lock a, progress besng mace at t*re Keowee foxaway Protect during a visit to the site in September 1969. They are shown inspecting various portoons ct the project. Such as the Keowee Dam Visitors Center. Reactor Buriding. Turonne Buriding. and some of \ the hundreds Of bluecronts and drawings PARKER PERKINS I ' snvolved in the crotect 1 i l pt
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Directors Officer-Directors Other Officers q 4 T HOY AS L PERMiNS W 8 VrGUIRE Kenneth Austin a Robert E. Frazer
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JOHN D HlCKS Ass stant Treasurer y ,e-,,, . . .a, ., n e , 7
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*8 PORERT c EDWARDS CARL HORN JR i
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- Pate onsuitant I sf H ni. r s ,,.sr a .o", c .v . na D W JONES R. J. Ashmore
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. t . r> t .ee ,t,e bre P'eodent A C Thies Ass,stant contmi ler i
nan use, uns R,a 3 - < perai ons ,4 e P es, dent Pr W t on and Operahon P. A. Hauser RICHARD B HENNEY W S LEE Assistant CoetmUer
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&g mee' ' nN Assatant V.ce Presedent weai Estate John F. Day Assistant Secretary 9 - .,.. n > v + ., 4 ,ee e,, un u v,urt J P LUCAS JR 4 . f n, , .m, n , , nd ,, e pr s. dent W. J. Burton J. C. Goodman. Jr. ~* , ,n e mi m -,at n Pon! Assistant Secretary
- t. R e t a t acc s Assistant vu e President
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James S. Sease ! $[( r NSan[refegrapn corrmany '#"'"' *' Pres. dent P. D. Huff Assistant Secretary
,c o eren s t a nd.e d nr aacasting cornpany I""S i u nin and Ass.stant Vice President f lec enc I nsta d a t me's D,stnbution Engineering P i.;r i fe rm,,a m e . .cr pa ny
, HERVAN W LAY B PARKER Lloyd P Julian sa., man .* Boa d Peoser 6 ne * # **
"M'stant Vice President Power Ope r a t ion s Operahon f'tQ( t tI R J r net nai atr es J. W. Lewis y 9 amff i n ter nar meai Assistant vice Presacent 4
f t, r1 NaNnas ha"> at reashwoie District Operations F . r ., t Nat,oras H er > 6f Dadas
T > or .estern ve i n su r a n< corroan r C. E. Watkins VARSHALL I PIC K E NS $"n','tr "ctio
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[ i R E i. TOR 4 '/e t ro po h t a n 5.e,ings 4nd ! sa r' Awx n, tion af y The Comoany's New Dispatching Center. Completed in 1%'). Serves As A Background For This Officer Group.
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