ML20082Q174
| ML20082Q174 | |
| Person / Time | |
|---|---|
| Site: | South Texas  |
| Issue date: | 12/31/1990 |
| From: | Carey R CENTRAL POWER & LIGHT CO. |
| To: | |
| Shared Package | |
| ML20082Q163 | List: |
| References | |
| NUDOCS 9109110282 | |
| Download: ML20082Q174 (44) | |
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rinancia Summary CEN'IRAL FOWER AND UGilT COMI'ANY
SUMMARY
OF FINANCIAL AND OPERATING STATISTICS 1990 lim 9 % CilANGE FINANCIAL STATISTICS Ohousands) Operating Revenues 0948,520 $836,585 13 324,039 3'16,380 (4) Fuel and Purchased Power _ _ _ Other Operating Expenses 308.465 2 33,128 32 Taxes. Other1han FederalIncome 58,313 __ 43,196 35 Federallneome Taxes 95,263 62,275 53 Operating income 162,440 161,606 1 Net income for Common 181,342 123.223 47 OPERATING STATISTICS Kilowatt-hour Sales Ohousands) 15,722,323 15,306,774 3 System Maximum Demand (Kilowatts) 3,110,000 3,145.000 (1) Electric Customers (Year-end) 557,882 549,301 2 Average Kilowatt-hour NS Per Residential Customer 11,454 11,461 0 , Average Residential Rate Per Kilow att-hour 6.900 5.930 16 A30utle Cover Contents CPLSptem Map.. .1 Standing at a height of 4 M feet,the endangered whoopingcraneis North , f)"* . hum [ry. ;2 3 America's tallest bird. Now numbering about Operating Resuhs . . _. .. 6 200, the crane migrates some 2,500 miles Rate Case Settlement Appromi.. .. 7 Wholesale Rate Case.. .. 8 annually from Canada to the Texas Gulf Coast '
'lhis photo was taker at the Aransas Nationa;
.' Power For South Texas.. .. 9 I"
Wildlife Refuge in CPI's Northem Region, .. , Tl r 'i r Economy .. I where 140 crara spent the winter this past Reponstw Markedng.. .13 year. Onx nmnbering only 21 birds, its . Relationship With CSW sunival has depended on society's willingness -
~
. And CSW Subsidiaries.. .14 Our Relationship With Customers.. .15 to coexist in a fragile environment. Central Powr and lj ht g Company realizes it must balance the growing energy demands of South
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g i-ng And Quality Perfonnance.. .16 Texas with the natural envimament. We am The Work Environment.. . 17
# cpl. And The Envimament.. .18 mindful that besides doing business here, u Directors And Officers.. . 19 live here aswell .'
. . Financial Review. .21
' i .-
. Financial Statements.. . 23 Notes To Financial Statements.. .27 Selected financial Data.. . . . . . 34
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Management's Discussion And Analpis . .35
- e Comparative Statistical Record.. .39 Shareholder And Investor Infamiation.. .. 41 2
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)(# 0 nvironmentalissues captured headlines and the attention of the American d; ' public in 1990. Earth Day observamrs characterized a growing concern
- and awareness about this planet's fragile ecaystem.
Central Power and IJght company shares this concem, and italizes that these issues cannot be left for future generations to sche. This Company has made a commitment over the years to use technology that enables us to exist in hamiony with our surroundings. We car about the emironment because we call South Texas our home. This report will feature som. : of the measures cpl. has taken to enhance the emironment.
l, y i: l Ie i p , y b b We also took steps in 1990 to ensum success in the ever-changing busines: emironment. In the past, CPL planned for the future by concentrating primarily on [ generation and constmetion. Now we have developed a more fonnal business plan ig that will keep us focused on our corporate strategies and objectives for 1991 and beyond Our mission statement is simple: to meet the electric power needs of South { Texas at a profit. This comprehensive business plan will guide us through a period of stable earnings n:sulting from the rate case settlement for both units of the South Texas Project [{ g Electric Generating Station CPL is a 2i2 percent owner of the state's first fully p4 operati g nuclear power plant. We think the stipulated settlement was an equitable y solut'.a 'or N>th the customers and the Compan). It enables us to move forward into the '90s with STP in rate base and with competitive rates. (h p Our marketing efforts will be the key in meeting our ambitious business plan goak, since we have cut our operating expenses to the bare h)nes owr the past three yeaa [ All our marketing programs must fulfill a basic two-step criterion: They must be [; beneficial to the customer and profitable to the Company. CPL wants to help customers by tailoring solutions to their unique energy needs. Providing this type of customized senice gives us a strong position in an increasingly competitive market. [, Besides our increased marketing and customer senice efforts, w are excited about ! the tremendous gmwth potential in our senice territory. The thriving twin-plant [ industry along the Mexico border and new trade agreements between our govemments [ have made this area a hot spot for continued economic growth. We plan to capitalize b on this windowof opponunity. We've also responded to the changing business environmeat with a new {W management philosophy that pixes more emphasis on employee involvement in [ business decisions. Our continued commitment to training will help employees meet [ their increased respcusibilities. We view training costs not as an expense, but as an [ imestmentin our future. [ Meeting the demands of the natural and business emi onments will require our h vigilance. We must make sure that our actions will help the Company meet its {, objectives. At the same time, we must make sure these actions will have a positive , impact on our customers and South Texas I am confident CPL is up to the challenge. k i.
. l Robert R. care? N Prmtm eJuer Emume a n. E temn! Pwn at Ughi tunpam b
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t e-i 4 m Iwas the year of the envimnment. The nsponded with specific strategies and action steps The Hg 4 celebration of the 20-year anniversary of Earth Company focused on how best to use cpl s nsources to Dayon Annl 22,1990, brought renewrd intenst efficiently carry out its business m c2;; for otr. ;-4.1 and its resources. The The 1990 llusiness Plan and sulwequent 1991 plan emimnmem :7s a rallying piint, and my magazine committed CPL and its employtvs to fist main strategies for enthusiasucally pndeted that Earth Day would becon., N the future:
" largest global demonstration in history!
a provide for customer satisfaction through senice At that time, Central Powtr and Light Company could eienn: at competitne pnets; ' already point to many long-standing programs developed to enhance the environment, from our fuel choices to a achieve at least the allowed rate of retum in a manner cooperative mariculture programs The Company took consistent with enhancing the long-temi s alue of the shareholders' investment; additional environmental action in 1990. In keeping with _ the mood of the nation CPL agreed on a buried cane a devehip the human an.irces appropnate to the demands altematnt for its South Padre Island 138-kv transmission of the business environment that encourages invohrment line, started a wastepaper nqcling program and, through and nrognizes accomplishment, aggressive marketing strategies, renewed its commitment to
. encourage economic growth - be competitive and market help customers use energy nsources wisely. driven, and The Company also can point to many new programs dewloped to enhance its position in today's dynamic = strenighen relations with key public groups.
business environment. The Company's busmess Like the Earth itself, CPL has finite rtwurces to mitt the environment saw significant change in 1990 with approval future. The rate case settlement pmvides stable base rates of a stipuland settlement of CPL's rate case. The settlement through I!M but eamings must impmve incrementally recowrs CPL's costs associanti with its 2i2 percent irom settlement levels to med long term targets Ow! ownershipof the SouthTexasProject ElectricGenerating containment and customer senice have become our key Station (STP)Thile a strong financial xcomplishment. pricrities, and the Company has the strength to meet its settlement alone could not carry the utdity forward through objectives. Anned with a growing South Texas economy, the next decade. More was needed Dunng 1990, CPL committed employees and specific goals, CPL is confident of management scrutinized the busmess environment, then success in the h 5
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the % with cpl?s costs for both units of STP * ' ' JP - included in the rates it charges customers The Y I^ I .~ 4- I g * / .3 , rate increases as a result of the rate case seulement will ,' SA
- p~ 4, prmide approximately $264 million in ackhtmnal base rate '.- m
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rewnue. The wholesale rate case settlement will add . l g ,- 7 lp ' approximately $10 milhon Along with our commitment to 4 cost containment and efficient operatons this will enable i ' the Company to cam a return on common eqmty around 13 percent. jjp . . , g, .. 1 ' - ' CPlfs 19% total n3enues were up 13 percent Base l' 3 i
% E e rewnues increased by 24 percent, pnmanly due to the ~.. - '
implementation of the first of two increases from the . stipulated rate caae settlement in March 1990 A 3 preent o , increase in kilowatt hour (kwh) sales reflects the , (W't employees have ad6pted a nute long stietch of - strengthening South Texas economy. NIustang Nand loi semi annual deanups as part of the h*xas Adop1 A Weath Prugiam CPis Hay Auen { Net income for common increaci from $123 milhon in ' 1989 to $ 181 million in 1990. The increase is primanly fnvnnomenta! wordinaim m f nvoonnstat servme<. attr'buted to implementation of the first step of the rate case 9. %)arcts Noems County 3 tra(h Jeanup ettort wtucri , settlement 4 - mc ludes a maes of Mustana Nlrfti" l'ud and purchased pCN.tr costs decreased by 4 percent h "' Ihrough the piagtdm adnuneatured by the fexas due to the full operation of the nuclear phmt and effective a . Geneuilland Ottme volunteer gmups and av( orgain/atmns adopt a pomon of the teach as then natural gas and coal purchases. Principally because of the , , rate incream awrage revenne per Lilowatt-hour from responsitahh dudog the tleanup campaigus m Ap residential customers increased from 5 93106 90 cents. > d and Septembei the voluntegis gathei and tategonze Average residential usage per customer changed negligibly between du and 3 tons of ttash 84to 90 percent M from !! A61 kwh to 11,454 kwh The number of residential N, w wtoch tomes imm ottshme Partitutar care is taken to , a customers at year <nd was up by 2 percent to 475,5n @ Sepatate plastn debns tot mMmg tpiastaf accounts Commercial n3enues went up 16 percent with a 2 g[ tm to percent at beach ttastu . . percent increase in commercial kihuatt-hour sales. ga ~ hash on the beach e mate than just an eyesore Increased economic activity along the Mexico border is % Ahen says Annnafs can berome entangkid m Mastu ' expected to improve tlus percentage Industrial resenues mereased by 9 percent, and industrial kikwatt-hour saks hf or mgest it and it s been known to cause deaths ci" tt@eshnd whales I; - e [e p .
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i 1 1 I fi 1# RAI: CASE S: LEM ENF APPROVEJ mizq"myy ' "y-];p~ m gust.I he settlement of the Company % retail rate caw g h a 'f 4 ' during 1990 was the most signihcant factor in [g4 $ $[ M - cpi?s fmancial perfonnance CPL and the n
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;, . 4 lL . majonty of its intenenon reached a stipulatal agnement on Fth 8, lyp ne repany's rate caw filed on
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,I e". ** 7 T@ &h:/ of Texas (Pl4T) prudence review - detennining wht ther k "[f I
f cpl ls management decision-making process relatal to STP w as reasonable and prudem - could have nsluced the i i 1 - 4 \ g
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amount of imestment CPL could nrover from its customers. All issues, includmg prudence, were resohtd by the
% settlement, The compromie providal the Company much-needed financial tthef and offend customers competitive rates.
Eese rates will become eten mort competitive over the years
- * ~ as other utihties raise their rate while cpl ls base rata
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remain stable. The terms of the settlement pmvided for a two-step rate increase. The first step, a $1M million incream was made up incr(ased by 5 percent. Electric loads from the Fmit of the of two parts: a $39 million interim increase grantal by the loom textile mill in Harlingen, as well as the expansion of PlC in September 1989 and a $ 105 million interim base other industries, helped spearhead the incitase Thejavehna rate increase which took effect March 21,1990. These rates gas processing plant in Corpus Chnsti, which began were made permanent in October im The second step, a pnxiuction in December, is expected to increase electnc load $ 120 mdlion base rate increase appromi December 1990, even further in 1991, went into effect onJan.1,1991. The Plc orders in both rate i The Company continued its efforts to reduce its average cases mirror the terms of the $24 milhon settlement. , cost of debt in December 1989, the Company reacquiral l'nder the settlement terms CPL will hold base rates , through tender offers $68 million each of its 12 percent stable through 19H unless certain specifial, extreme Debentures and 1 IX percent Senes V First Mortgage Bonds. circumstances occur which would :dlow CPL to petition for i The remaining $ 17 million of each bond issue was called relief prior to the end of the rate freeze period dunng 1990. In March 1990, the Company issued $50 The settlement also features an economy rate for CPL million of Series AA, First Mortgage Pond at a rate of 7 M customers who use less ti an 500 kwh of ekttricity a month. l pentnt This rate assures that low-uw customers will be able to i
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3 G ~ G 6 - . hf . p , . .. . / ; o I [ s -< rtreiw essential senice at an affonlable price. The agttement includes two new pmgrams for industrial k. i' s and commercial customers An economic dewlopment i' - clauw provides a discounted demand charpe for new or $ ' expanded loads in certain industries The Commercial h - . s Awrage Monthly Payment Plan (CAMP) allon specific types of commercial customers to average their monthly bills. The f ' 4 - [j;
- settlement also benefits South Texas' growing economy in .
another way. With STP operating and included in CPL's rates, new businesses am assured an adequate, reliable electric p{p ' supply at reasonable, stable rates. 4 CPI's financial indica' ors are expected gradually to k , improw because of the settlement Under the agreement, , CPL is penuitted to file for increases in base rates to be {@ effectiw after 1994. Howver, the settlement generally subjects any increases in excess of 5 percent annually to ( p- ;Co w me* W % a :.u % 1m e w sgific reductions. n e 't-s> w ayno mink 12 oc appmn*ttm p? h tom Mon meg 3 Watt naurs af eghn q Bd b WF0 SA = %H CASE E ' '""*mamnu o"f dtai ela ele , MA: : low MRm!& k.
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' t Wrustatm umantan on tv oar toe PL also fikd a wholesale iate case in March 1990. While the PITT has jurisdiction over retail {/ getteraW; wt remme m perumt m me S e '
customers, the Federal Energy Regulatory p[ gartu ies that woual har entereg the attnosonen sI , Commission (FERC) has jurisdiction owr g Co% Den wiu not tr iequeed L add any em<ssiuo wholesale customers. OnJan. 29,1991, the Company and the t ghtrok m order to uompN wtth the amem1ments to the ' majority of its wholesale electric customers filed a settlement Clean An Ad he , A 1100 atg gummg resew 0J M used Io Wssipate
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e agreement with the FERC. The wholesale rate settlement P" ' ' proposes a $10 million increase. The increase was waste heat 4 shermen have tbund the lake and its tour implemented in two steps, subject to refund, in May 1990 4 veeks to contah some of the better Wong hoies m the andJanury 1991. 4holesale customers joining the FERC gg area settlement haw agreed to extend their contracts with CPL h Some angims emed the jst 20 pound cass in the through December 19% - the same period during which ht state of lexas to becaught m a power plant law where CPL has agreed not to seek ad6tional rate relief from its k hsh eat mwe to sustam higher energy levels veated by retail customers, except in the case of specified, unusual f warmer water temperatdres Ihus. these hst grow circumstances. iD- larger and taster than other hsh '
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p' 3 [3m by the end of the year in conjunction with burying the L1 V I cable, a four-acre seagrass and tidal presene and nature a SOUT 3(AS park on South Padre Island will be en>ated to compensate for disturbing seagrasses. The projet's estimated cost is $ 16 million. Wrf he South Texas Project Electric Generatmg The buried cable route and mitigation is the result of Station, of which ( Pl. owns 25.2 greent, had a extensive communication and cooperation among CPL the I((j ll modest improstment in overall perfonnance in affected communities and concemed emimamental gmups. 17)0 The first refueling of l' nit 2 at the end of The new line to Soutb Padre Is'and will increase senice September went more smoothly than the presious refuelings reliability to island customers. of Unit 1. This is considered a herald of more efficient Appmval to construct a 36kv transmission line between refueling operations, as personnel become increasingly CPI:s Ion C. Hill Power Station in orpus Christi and its experienced and proficient. During 1991, STP will be going Coleto Creek Power Station near Fanmn was sought from the to a longer fuel cycle. 'lhere typically will be 18 months PlTT in 17)0 beginning a lengthy state certification between refuehngs,instead af the current 12 months. The process The inn Hill /Coleto transmission line would meet longer fuel cycle is expected to yield better capaaty factors future power transfer requirements between cpl?s northeast and lower operating costs. area and the rest of its ssstem. Currently, the northeastem The Company's eight year effort to install a 138-kv postr area of the Company's service temtory has the ability to 5 line from South Padre Island to Port Isabel in the generate more electricity than it can consume. and the Company's Southem Region neared a close. During 1990, a central, southem and westem areas need more electricity solid dielectric buried cable system, cable route and than is generated there. In the future, they are expected to environmental mitigation plan were tentatively agreed upon nm! even more. Planning the line route has invohul by emironmental regulatory agencies and conservation extensive emironmental resiew, input gathenxi from the groups Final regulatory approval by the PITT and Corps of pubuc during community open houses, and negotiations Enginwrs is anticipated in early 1991. Actual construction is with intervenors Construction should begm in 1992 with expected to begin in mid-1991, and completieu is estimated completion in 1991 9
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I n , i 1 - L hile base rates went up, the fuel factor j i portion of customers' bills was reductd With y(p
- a wide sekction of fuel sounu audable for f .
Q/ " its ekctric generation, the Company was able . to aggressiwly pursue opportunities to purchase ftrl at the Ll', .. , lowest cost The first year of a fuel Procurtment Plan, h .y a.;f. [j.4, , . 3go i , f ~ < . . ; .- ' Qjgfyyy$pg'Igjfy7.c.- designed to manage fuel prices through 1999, yiekled Rl . . impressive results. Despite a tightening of supplies, the pnce {, g.i:qf9 QS C 9 '? CPL paid for natural gas went down 3 5 percent due to 9
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M4 aggressive management of new and existing coreacts for
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[~ natural gas The price of coal was reduced 2 percent through effective buying on the spot market. p . With both units of STP in operation, the Company also can take full advantage of low-pnced nuclear fuel STP saved an estimated $33 million in fuel a>sts in 1990. Through the g , year, the Company used 52 percent gas,28 percent coal and W ' 19 percent nuclear fuel to generate it.s kilowatt. hour , nyuirements. Fuel oil and hydm made up the balance. This p, . ' , diwrsity leaves the Company md its customers less & C f , minerable to seasonal fluctuations in the natural gas market hf CPI's fuel choices are compatible with its emimnmental p ' objectives. Natural gas, the Company's primary fuel, is the p '~
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cleanest burning of all fossil fuels. Low sulfur coal is used to P' generate ektricity at Coleto Creek Power Station. resultmg k Amgarms are a commarbyht at the Soutt' Ice I in minimal emissions. Even so, C"L has made contributions Pg I wtrm Generahog 5tahon we e , appror rtiatch 50 of the rephrt-daAe towintage o' W to the Electnc Powrr Research Instituis aad ram research program and other studies to mitigate the impacts of acid Q(%g nuacar plant s / 000 aue < ounoc resee a rain Nuclear g>wer recently has eamed a ymtiw place in p, Osprep a omtected species tuve um nmc mauw the environmental picture as one solution to concerns about the givenhouse effect. It is an important part of the 1991 h visitors to the reservw 3 st#gea as weh haw g ' emploges nave hom spn s nestma se ic eneuage Nationa! Lnergy Policy the four pans nt ospreys to take ut, permanent neshng " , New federal and state energy policies are expected to le @k( at STP compatible with CPL's fuel mix. While other coa!-buming , A wide vanety of wMhte make then nume an 9P< Utihties are fJCing major expenditures to comply with the y - protected t2 000 aae t ompound Bam raqho new Clean Air Act, CPL will see relatively httle impact in the [j Deregurm talcons anbhite f aaed hawhv se just a few near temt In addition to buming low-sulfur coal, the Coleto - 0t if* endangerHd specit%fhat L.an he found on (nf Creek station features electrostatic precip'tators which remove 99 o percent of the (h ash particles from the exhaust (( hy plants yrourxls The Audunno Souety uses STP Im e Chnstmas Bud Cnunt , 4 Ash fmm coal combustion is then sold and recyckd as a Other ari1rrtais found there intha.te white taued deet *5 M , cement additive, road base matena! or a waste stchihzation y ~ botiats red wolves coyouts wod hoys hmom ,4 . additive. fy , egrefs pehcans and (19seale spoonMk m f r , b P s 9 5.
p Vi' . j f 9 t 1 I ) ' { - .I L 191KK) bantls of oil a day and another that couki pnduce
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ECDNDMY ""~ C E CI-mas 22mmn . prison is being buik in Dilley that will employ 260 workers hroughout the CPL senice aira more than 30 Eagle Pass Processing Inc., which manufactuns livJeans and employs 350, opened in the spnng D companies built plants or expandal fxilitie 1990. All along the Texas 41exico hmier. maquiladoras - or twin plants - have The Rio Grande Valky is enjoying an economic resurgence. Fruit of the inom in llarhngen opentd a textile flourished, citating dynamic changes. Agriculture, tounsm, mill that will employ a total work force of 3,000 in fiw years commercial fishing and shrimping, high technologv. Allison Manufacturing Co of McAllen adled 200 employees, intemational trade, the mihtary, as well as the petrochemical and another clothing manufxturer, Edinburg
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industiy, and the oil and gas business contmue to prmide hianufxturing Co., which makes llaggar trousers, added more jobs and a diversified economy. 400 workers. A new greyhound racetrack in liarhngen Laredo is setting the pace for South Texas' gmwth. In emplop 250 Valley residents and pmsides a lure for tourists. excess of 1,209 trucks come into Lanxio emy day to support Coqius Chnsti is home to the Texas State Aquanum, and supply the maquiladora industry and the import-export which opened inJuly 1990 The facihty has a total economic business. The city has thrte new maior industrial parks open impact of $28 milhon per year and pmvides an additional for business. In 1990, the president of Mexico broke gmund 200 jobs. The Coq)us Chnsti greyhound racetrxk opened for a third bridge linking Lamdo and Texas with Columbia Nov.15, a day after llarhngen's track It is expected to and Nuevo Ian Resklential construction is flourishing A incmase the ama's value as a convention and founsm center. city hall, justice center and twu major school campuses have Industrial devekapment in the Corpus Christi area been built. accounts for a sizable portion of CPlis new electric load. A New drilling techniques have reopened the Austin Chalk new gas processing plant, theJavelina phmt, reprtsents the formatmn in Frio, Zavala, Dmunit and I.aSalle counties. In second largest retail load on the cpl. system. Gas refming 1990, more than 787 horizontal drilling permits were issued companies will send their waste gas to the plant for further in counties CPL serves. InJune 1990, exploration companies rtfinement to pnduce higher value materials, such as discovend a well that tested at a potential of more than prop >lene, ethylene and butane. Some of the refmed 11
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I e f g,, - i Expansions by OxvChem, Reynokls Metals and Ikechst t : > 4 , Celance added to the Company's electne load Texas Ichigh Cement transferred all its processing operations to Corpus {p' " ~ g' . 5
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Christi and doubled its paressing capacity due largely to ,' ' ' Cplis off-peak incentive rate. cpl. aho took owr part of the , . y King Ranch Utihty System in 1990 @% ' Rhino-X Industnes in Victoria o[wned a $36 milhon 5 - -
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plant that employs 275 workers in the manufacture of T , , garbage bags. $4- '
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While the future of Homeport at Nasal Station ingleside is still under review, the Navy has indicated it expects to have p3 . a presence there Support vessels and auxiliary support on y .. land will be needed Although it may not provide the 8,700 g s " jobs first indicated, Homeport is expected to provide future , N improvementin the area econoon ~ " With the number of increased economic opportunities CPt'eh ohns ssewahnu a uur natuu: - available, cpl. has focused its economic development #eshn Umtomers < dy receive ensqy ow hp< and a xtivities on helping communitbs dewlop their own kjL. . h; . rwmnipdatens 4etbetenh Adamq os*tum im usmgheonatat Hectut enenh mme
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business prospects The Company gives tne communities ana ad;ustmg are yst two metnot hv wto the ; ustumer i an edue tools to target industries they can accomnnlate. One suth Q.
,p the amnont d enenh needed ta mo; and heat the tool is a community economic dewtopment videotape produced by CPL Fise community videotapes have bee- g . home produced, with testimonials from industry leaders, and In CPL uttm cash in< enbves to homeowner who ~
footage disnlaying quahty of hfe, industrial parks and f instalt high eftiuency heat pumps and au Nn:htnyong systems Brathums utler guidance m outchasma ma , transportation. Another seven commumties an targeted for videotape productions in 1991. Another area dewtopment {pg.y ehicient erectncat apphance3 such as mirgjeutom
- tool is MATPAC-pC. a computer program that matches
( . ovens and washtog mactunes lhe wise ettiuent use o' energy helps mouce the 4 business needs with a community's capabihties. { demand on th4ntle naturat resources needed tu The Company also contit.ues its systemwide commitment to adult literacy and technical training by providing funding. $@ y* produce etectriuty Ihe ettoent uw af energy not onW dids ou' nalmal Bnvironment t)ut CPL s t)usmess educational and training fdms, advertising support and
- volunteers to programs in each of its regions. A literate. environment as well The ieduced demand tor .
educated work force is necessary for South Texas' economic @j electnci!y dmays the construchon of expensive new development. power pgnts ' h@ m' t. p' ei' h E w , ,f w ,
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'*""-"""*"""***"a""'""x pmgrams will be modified to increase their pmitiac effxts on l
l arketing will be one of cpl's key function 3 in load. revenue and contribution to faed cost. I the decade of the % Even though the Residental marketing will focus on energy-efficient Good Company has reached a settlement in its rate fents construction and Centsable retrofit programs. Ga d car it sull faces a near-tcrm fmancial tents promotes energv-efhcient housmg and supports the cnallenge. It has become increasingly important that CPL Company goah of impromi sptem load factors and lower add to its customer baw and electric load 'hrough ovendl costs per kibwatt-hour The programs are popular nsourceful marketing and economic development with residential customers. The 19w Corpus Cbnsti Parade New nwarch and analysis tools, such as the Electmnic of Ilomes exclusnely featured 13 Good (ents certifint houe Marketing htformation System (BilSh let the Company for the second consecutive year in Victoria, s!x of the 10 concentrate its efforts on marktting strategies with a direct houses built for the Parade of flomes were also Good fents-impact on the bottom line, DllS monitors markenng certified Electric heat pumps, which the Company has program efforts and results, summarizes them, and collects promoted for several years. are environmentally positise demographic data so that customer profiles can be refined since no emissions of spent fuel are nleased into the Marketing nwatch will be used to beuer understand cpl. atmosphere. They aho provide positne effects on CPL load by customers'needs andcompetitors weaknewes Marketing nxiucing summer demand. nsearch also will assist in targeting those customer segn end in addition to traditional heame; wkmg and hghtmg uluch hase high growth potential, demonstrate programs. cpl ls commercial and > ., vcial marketing opportunities for use of new electrotechnologies. and can efforts will focus on the Petter Thennal t iihzation (IrlT) exhibit higher pnducuvity through peak-demand nxiuction. program and electrotechnologies IrlT identihes energs cost l Osentil. CP!:s new marketing efforts in the % will tw and fuel sarmgs through the use of thennal energv aimed at encouraging the efficient use of electricity to conservation measures such as boiler and refrigeration l I \ 13 i l.._,_._ - - . . - . - - - - . . - -. _.-_--__ _ _ _ _ ___---_-
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M.e t v , j.; [c .[> gy, g , S . __ . It , f improsements. STU enables CPL to minimize kud losses to cogeneration by submitung attemative enngy cost reducuan ( , optons for large commerciat and small iriustrial 7 customers. W
- Ihe electrotechnologies pmgram has promoted new and fi efficient ways to assist CPI's manufacturing customers in h,' -
productivity. product quahtv and environmental concems. Key electrotechnologies on which CPL will focus are p(( p# 4A a % *'S- '.' a } .
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electmmagnetic induction, infrared, uhraviolet, microwave m , md radio-frequency and nsistance heaung technologies. ,p i# ,. . . .. . Y In 1990, CPL began establishing a single point of contact A .i . :1, '
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with the corporate decision-makers for 25 of our larget ;
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commercial customers, elevating energy-related ma!!ers 10 ,- the highest psible level within customer organizations and h> LPL apaces stewardsh,p m the ewnxmW + enhancing cpl's abihty to assist major customers in long- {; ytemp@ed by A% Lund and H 2e9 HWve' range energy planning. h em pme6 at (Dieta Oet$ Power b!dtt0L To increase efficiency, CPL reorganized its marketing b ust Augus' l una gett with w .,duen aM H%g. gmup in 1990 to standardize the marketing appmxh p 3evmeg a w m eng amng aa n to ask mw throughout the regions, centrahze reporting responsibilities. O. pwted the onte' yedntg gmunds o' me mJayd and assure effective program deph)yment. h wngogmg1 rJnr m the sattealet ma;shes / t% nes!',
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AhJ CSW SUBSDIARFS P g shortume, The im CPL eis also he pt11 abtyn bold new direction by CPI's parent company. B 00nahony tes and cerpent to< the piqiet t y Central and South West Corporation, is expected h, - The retuue is sCPl tomton and sar i py to increase the operating efficiency of the % there we M tawy i t'ougn! d was ; mutant tc . Company and other CSW subsidiaries Where { pr atM .. pnyer sad 1 t'm+ tt netp3 te yt nae once companies were highly diverse in their operations and aut them ana show the putu what the ' mpany n . business practices, consistent standards in selected btainess g"( aMut areas now are shared with many additional areas to be t some 140 cranes wn'er m the tetoge we is studied. Parallel structure among the companies helps h located r the GuP Coast tvtween Hosport and Pe Lavra Ihe aanes neped extmchon 50 years a@ tw J provide opportunities for career advancement through the five CST affiliates. and the standardization of certain [p p nos have a totat population of app ommaren 200 k h O-rn . hy e p e I'
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F...p' p among the k west rates in Texas Customer sunep showt i the Company s favorabihty raung droppd directly as a result of hi#ier rates To offset negative customer reaction p=y and regain its competitive edge, the Company redalicated
, s l itwlf to providmg the highest level of service
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electricity wwj) so that thes get maximum benefit, or A .g' helping our commercial and industrial customers sohe
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' i CPL nuts the customer senice challenge with strong
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programs, respinsne marketmg and increa3ed emplo>re functions provides increased purchasing peer and efficient ogrations For example, a comprehensise five->rar plan will
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share Information Senices technologs and resources in 70 K.L he Company's five customer service programs different pmiects in 11 different applications rangmg from started in 1989 - Equal Payment Plan, customer sen' ice to matenals management feasihihty g b Neighbor-!> Neighbor, Gatekeeper, Comunient Pavment Plan and Third Party Notification - studies are under way for some of the projects, with others to follow If positive, then implementation will be schaluted expanded this year to mclude the Automatic Payment Plxt Successful implementauon of all the five-year plan could In cooperation with kical banks, saving and loans and save CST Corporation at least $77 million annually and credit uaions, CPL designal a pmgram that allows boost retum on equity. customers to deduct their electric bills fmm checkmg, While CPL will retain its separate identity, the Company saving or any other statement xcount the) designate. About will benefit from an increasal abihty to leverage knmledge 1,200 customers have taken advantage of the senice. [ and effort, interchange n50urces, and impmve operations More than 1M8 customers signal up for the Equal This bmad, comprehensive planning will make the Payment Plan in 1990, which brought the EPP total to Company more responsive to potential changes such as 31,201 Paying an average monthly bill helped nxiuce stress deregulation. from the impact of summerume coohng costs. Contnbutions to Neighbor-to-Neighbor, the energv assistance pmgnun for OUR RELATIONSHIP - n r e stomer wereuP n in ercentover19s9
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WITH CUSTOMERS which CPL shareholders match. 5mce its meeption, r ate increases are not popular with ustomers. customer and corporate donations have totaled more than and it's our job to temper the impact. While the $239,000
)) Ej settlement's two increases have placed electric Trainui CPL employuw made 117 Gatekee}rr referrals to rates at a competitne mid-range for the state, community semce agencies, identifying distressed senior CPI:s residentia! customers were accustomed to pa)mg citizens and connecting them with community support.
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k. More than 710 wr;ior citizens and others on fixed incomes y[" ' benefited from the Convenient Pavment Plan, which alkus 4 ' them to select the due date of their bills to mon hdely h p, contspondwiththeamvalof theirch&ks Andmorethan 200 customers signed up for Third Party Notification, p+ designating a third party who can tv notihed if payment is .. j'. delinquent. The pmgram has particular appeal for okler b[", y, {. resulents who preftr to hw independently or who trael frequently ('[ _
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3EF09MANCE ' ' entr:d to the Company's efforts te achieve . (, excellence in customer senice is increased , w . employee training In 1990, the Compan) embraced the Grid managetaent phihdophy of {' v Atthe BayWy M Lpte Powtp Stahon m Corpus binsh (Pt ope @ons coeust *dh and enhance the
"" t consensus building and teamwork to help employres work nature pvnonmeW _
together to resolve customer senice issues and btamess k' s
# Ihe lexas Pw$s and W)idhte apattinent uses problems. Ily the end of the 3rar, the CEO vice presidents, h R,'
mdtsh hum ttm plant's cookog lake where wargi waters hMp muease tt}e grotticiatuin of manne ate as managers and supemsors had made a major commitment to Grid, with the maionty educated in the leadership btood fish tof tht Gutt boast Constpakon , progrant p$ Assogahpn/ CPL Wrme Developnent Cf$ tot H%W Grid's tenets are to get all employns invohed and give
.' opeales'the hatchety wbw.h Nis idpt'df th the them the reslunibility and authority to solve the problents $ release of more than 66 mdhon horprhfigE and 3 m mdhon try nuo the tuas bay systpfns unw 19tU they face in their day-t& day work. f ' ,
Outstandmg employees whose work had a significant R. Othm manculture stud % include trout and snook eftect on the bottom line were recognized thmugh the 7 h, breeding The hatchery which is situated on land donated by Preskient's Award In 1991, the Key Contributor Award CPL . m open to visitors it recently'ntmved an + program vill greatly expand employee recognition for [ ,. y outstandmg perfonnance. environmental achmement award from kenew Amm.as Nationalinvimnmental Awards Cououl -s From the llome Office to the hoe crews, CPL employas { Numemus%nidhte and wateriowi hnd ietuge on the s committed thentsehts to quahty perfonnance. Support and R dewkipment of employres and increasing their ahWiies to p powm stakont 2.000 acre compound The Nhtional do tht A was evident in the number of training programs [, Audubon Socmty ukes the grounds foi ds annual Chnstmas Bird Count llaman Resources and a task force from 0[rrations h' [, n i' g . g _ _ _ _ _ -- w -
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a i - i i S. b l kw I l Semces created a computer-bawd customer tramir g the same cost as the old system. For commumties that relied I program for customer senice representaints that provides on contract answenng semces to handle late-night self-paced instruction. The program will be updated and emergency call 3. the centrahzed phone centen hase been a expanded in 1991. sigmficant senite impnnement. In a pilot program. the l Linemen tramed in barehandmg techniques imp oved addaional technology of cellular phones and ponable fax ' senice rehability on the Cempany's 545 miles of 345-ks mxhines in Company semce vehicles has improved service power lines. Barehanding - using conductive gloses to response time. repair an energized hne - enables CPL crews to work on lines m areas hard to reach by bucket tmck The safety technique makes the hnemen pan of the hne. much in the i same way a bit can safely sit on an energized wire. - As a resun ne quahn Comous committee. suggestmns to improve pedormance and efficiency more -NVIRONM NT - than doubkd in CPils Operations Semces area In 1990 gMP ew policies on smokmg. drug and alcohol abuse more than 160 proposals were made, and almost half w ere implemented The committee's ck>se attention to contro!hng
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l reflect the Company 's comnutment to maintam a safe, productnr work envm>nment. Cpl also costs, mairo.aining senice reliabihty and workmg to suppon resised the equal empimment opportunin and customer senice and markenng efforb kd to a total net sexual harassment pohcies to broaden the defmnions more annua! savings of $65 900 and untold dollars in intangibles, than prestously such as improved morale. Savings a!so were significant as A sptematic approach to the accident presennon Central Senices took steps to improve purchasing and program was designed to increase dnving safety awareness j controlimenunes Company sehicles now are purcha. sed through education and recogmuon. While Compan) from a smgle dealer throuth a competnive bidding progrant mileage increased in 1990, the number of automotive
\ehicle mamtenance costs are monitored on a Compangide accidend decreased A program called Road Ready was l basis through a maintenance repair <nler systent deseioped by CPlis western Region This systematic j Centrahzed telephone centers ofkr a way ta handle appmach to education, operation and mvestiganon of l customer calls more efficiently, professionally and at about accidents will be expandal m 144L 1
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N a 0 t+ 3 LAND ~H: i_ C_\VIRONM:_9T
- n entral Power and Light is firmly committed to
{m enhancing the emironment - both the world d around us and the co potate emironment. @, Wildhfe habitat has bten presened around many of the Company's power stations. Emplopts haw E(' improved the habitat further by addmg osprey nests at STP and recycling Chnstmas twes for the creation of hsh habitat h Q in Company resenuits. f _w The Company uses wastewater treatment and control M systems at power stations and appropri,nely manages sohd (k ; ; , wastes generated within the Company to both minimize the k' '^ amount and assure proper handling The Company maintains exwllent compliance with state and federal [it - k' mgulations contm!hng air emissions, wastewater ducharge, ; 4
- M solid waste management and PCB management. PCih h ,
lf,. commonh svre used in transformer oil and now are $!! [/ . 4t.f restricted [The Company's extensive program to ehminate #Y ' PCBs imm the Company's transmission and distribution i systems exceeds rquiatory requirements. CPL also provides support for the dewhpment of shnmp ( k? mariculture by fumishing heated water from its fiames St (; Davis Power Station A decade ago at the same site, the M Company began a redfish hatchery pmgram in conjunction fy with the Texas Parks and Wildhfe Department and the Gulf $ Coast Conservation Association. Through can:ful monitoring k and cooperatne efforts, the redfish p(pulation has been h significantly restored in Gulf waters - amund 79 million redfish fingerhngs wtre released in Gulf bay sptems last year The Company is comnutted to conduct its business in the [hE same way, with careful monitonng, cooperatiw effort and a h strong vision of a heahhy emironment. While many people k jumped on Earth Day's emironmental bandwagon. the hg Company recognizes that credibihty is estabbshed through , vision and action consistent owr time. Whether it's helping our phpical environment by p(b rec)chng the wastes generated at CPL fac1htws or building hr our business environment through senice and cost control S strategies, Central Power and Light Company is dedicated to il operate responsibly and efhcienth I Ib ep % b o
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V , ,, e..i. a Kirk Shenbkn Bnxiks Can3 Board of Officers Directors Robert R. Carey ' ~ lwkmt xx1awf tattutm (&vt . , Rokrt R. (my Clayton R. Kirk % thkmt malChrf Em tneO!!at g g pmpy, Central hwr wui Ught Oxulwn, , '
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Osp thnsu P. Kkhard Shanblia ,E gg , Oa Pnwkmt , Ch.unnan,ihkmt ud def twutne B. 1.Teague (6xt, fantral ar mi Siuth 4tst ur Pinuknt Gnywatan IialbLi Rkhard P. )erryt Glenn Files M twkmt
\ut PnwkmL Centra! }Wr sul bght pg g g g Gota.G9Mhti M Iwd ni ..
Ruben M. Genla Pmemt or pruryC of wwral hrr.d GbnFila g pg.nt e;gapsiin cmenon ud lux! awlopnrnt, buwki Rotwrt %. Renkker Robert A. WAllen ' Litert A Mdhm ltweturnb l!K . Mar)I Sullivan
- 4 twin In munt Pete Morales,Jr. C. 4 syne Stice ., ,
Pnsumt xxt(eneral Maugtr. MtMan Moraks fitd bits, Inc . Inur g ,,} y,,gy,,, ,
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bid ** 4.v,nt.uit Ntnttn = jlm L Peterwn Pnwknt aiut Cf o Wraburgn Inc Corpto fline M. L Bonhelt ntnai * &nn,r j - II. Lee Rkhanis ML* Pnwhmt, thgna Dan. Hrhnpm L R. Brtwkslutanz d.mtor g, Feb 1.1%i P. Rkhard $hamblin
\e Pnuket.Exntral fwer .bx! Lght Cla3 ton R. Kirk nsemi e dtxtor Gunpam CorpteChrwu Jan 15. Iwl. ami mil retire a wnnt nr pnn kut h I.lWl.
B.%.T @ e M Pnwknt. Centra: fwr mx! bght Glenn Files twar.w dixtor a Gepam, Corpte Chmn JanliIW! -- - 1 Rkhard P. n crret 1. R. f arquhar.jr. rWgini m &nttor gk,+v.^ N** M Pmuknt, Central 1%n ard Ught Apnl 12. tw 0 g 03rnpany f '.pu Chnsti Dale E. 4ard
- 11. C. Petry. Jr. tenmi a extor April 12 PW hI E.
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1 j M Ensent. Central Power zal bght Ronald L kellett nwnn] a3 contndin [ Geparm Gne Gmt. ggg , p, gera!n tri m,u urt. Net!rni kegion. Robert N. Renkker heanw arteArt M liIW1 l lachan!s 19
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Financia' leview _ EPORT OF LWAGEhENT and tested by the Company's intemal auditors on a Management is rtsponsible for the preparation, integrity continultig basis. No intemal contml system can provide and ooiecthity of the financial statements of Central Power almlute assurance that errors and irn>gularities will not and IJght Company as well as all other information contained in this Annual Report. The financial statements occur due to the inherent limitations of the effectiwn(ss of intemal controls, howver, management strivts to mamtain have tren papared in confomiity with generally acceled a balance, recognizing that the cmt of such a sptem should accounting principles applied on a consistent basis and, in some casts, reflect amounts bad on the best estimates and not exceed the trnefits derntd. No material intemal control weaknesses haw been reported to managenent. judgments of management, ghing due consideration to Arthur Andersen & Co. was engaged to audit the financial materiality Financial information mntained elsewhere in statements of the Company and issue a report dmon Their this Annual Report is consistent with that in the finar.cial audit was conducted in acconlance with generally acapted statements, The Company maintains an adequate sptem of intemal auditing standants Such standards mjuli t review of intemal contmis, examination of selectcl em.*ctions and controls to preside reasonable azurance that transactions are executed in accordance with management's other pmceduns sufficient to provide reasonable assurance that the financial statements neither an: misleading nor authorization, that financial statements are prtyared in contain material errors. The Report of indqendent Public accordance with generally accepted accounting principles and that the assets of the Company are properly safeguanied. Accountants does not limit the rtsponsibihty of management The sptem of intemal contmis is documented, evaluated for infomiation contained in the financial statements and el;cwhere in the Annual Report.
/Y .,
. . V Rotert R Carev Pasi&nt miChief Execuuw Ohtr
< Wf w P. RichaiShah Vice Pre,i&nt, Firana j
l i 4 21
REPORT OF A'JDff C0tMTTEE Le Audit Committee of the Ibard of Dinrtors is composed of six outside directors. The members of the Audit and the independent public accountants the owrall scge Committee am Robert A McAllen, Chairman, Jim 1. and specific plans for their nspectiw audits. The Committe Petenon, Ruben M. Garcia, H. Ire Richards, PeteJ. Morales also discusses the Company 3 financial statements and the and S. loyd Neal.Jr.. The Committee held three meetings adequacy of ir,temd controk The Committee meets during 1990. regularly with the Company's intemal miitors and The Audit Committn owtsees the Company's financial independent public accountant to discuss the results of their reporting process on tchalf of the Board of Directors. In audits, their evaluations of intemal contmis, and the owrall fulfilling its responsibility, the Committee recommends to quality of the Company's financial reporting ne meeting the Bmd of Distors, subject to shareholder approval, the are deigned to fxilitate any private communication with selection of the Company's independent public accountants. the Committee desired by the intemal auditon or independent pubhc accountants. j The Audit Committee discusses with the intemal auditors k %'- Rolert A. McAllen Chirman. Audit Canmithx REPCRTOFINDEPENDENT
-PUBUC ACCOUNTANTS plan and perform the audit to obtain reasonable assurance Tothe Stockholden and about whether the financial statements are free of material Bcaniof Directors of misstatement. An audit includes examining, on a test basis, Central Power andI.ight CompanF evidence supporting the amounts and discimures in the We haw audited the accompanying balance sheets and financial statements An audit also includes assessing the statements of capitalization of Central Power and Ught accounting principles used and significant estimates made Compan'; (a Texas corporation and who!!y owned subsidiary by management, as wel: as evaluating the owrall financial-of Central and Souti. West Corporation) as of December 31, statement pnsentation. We believe that our audits pmvide a 1990 and 1989. and the elated statements ofincome, reasonable basis forour opinion.
retained eamings and cash fins for each of the three years In our opinion, the financial statements referred to almve in the period ended December 31,1990. These financial present fairlbin all material respects, the financial position statements are the responsli1:llv ef the Company's of Central Power and ught Company as of December 31, management. Our regocsibility is to npess an opinion on 1990 and 1989, and the results of its operations and its cash these financial statements base % our audits. flows for exh of the three yean in the period ended We conducted our audits in accodana eth generally December 31,1990, in conformity with generally accepted - accepted auditing standare.s. ucmtSM requirc that w accounting principles.
& & & c,6. m ) f C.
Dallas, Texas Arthur Andenen & Ca february 15,1991 22
L Statements 0f ncome - l t CENIRAI. LOWER AND IJGifT COMPANT For the Years Ended December 31 1990 T 19W 1988 (thousands) Eintsc Operating Revenues _, Residential S370t013 $312,850 $295,167_ _ _ Commercial 295,322 254,3'4. 244,082 Industrial 201,461 184,871 180,345
. Sales for resale .
37d1F. 47,356 35,458 Other 43,300 37,2N 35,380 948,5t0 Kiti.585 790,432 . Operatiggjxp>nses and Taxes _ Fuel _ _ _ _ , , _309,194 319,821 324.698__ Purchased power 14,545 16,559 18,931 _ Oth roperating 224 J)99_ _ _ 182,528 _ 136,181 Maintenance 61,683 61,435 42,338 Depreciation and amortization 119,453 113,738 71,497 Deferred SlT' costs (97,670) (124,573) - Taxes, other than Federalincome 58,313 43,196 45,430 Federalincome taxes 95,263 62.275 28,979 786,080 674,979 668,054 Operating income 162,440 161,606 122,378 Other Income and Deductions Allowance for equity ft nds used during construction 27,203 24,923 98,424 Deferred STP carrying costs 185,078 81,590 2,581 Other (1,687) 3.451 331 210,594 112,9M 101,336 income Before Interest Charges 373,034 274,570 223,714 Interest Charges Interest on long-term debt 126,584 129,535 122,356 Interest on short term debt and other 15,434 12,422 7,087 Allowance for borrowed funds used during construction 26,146 (15,168) (62,548) 168,164 126,789 66.895
-- ~_w__
14e ~.2ccme 204,870 147,781 156,819 _ Preferred Stock Dividends 23,528 24,558 21,525 gincome for Common Stock S181,342 S123.223 S135,294 Statements Of Retained Earnings CENTRAL POWER AND LIGHT COMPANY For the Years Ended December 31 1990 1989 1988 (thousands) Retained Earnings at Beginning of fear _
$794,179 _ S720,956 S585,662 Net income for Common Stock 181,342 123.223 135,294
- Deduct
- Common Stock Dividends 100,000 '50,000 -
Retained Farnings at End of Year 8875,521.. 8794,179 S720.956 23 The arrampanying nues to fmancial statements t.re an integral part of these statements.
., _ . _ . _ . ,_ _ , _ _ . . _.. m _.__ _ - . . _ _ _ _ . _ . _ - _ . - - _ . . _ _ m 3alance Sleets -a_ CFNIHA1,IU%TR AND IJGllTCOhf?ANY , As of Ctcmber"*! . HMK) 19m (thousands) ASSETS Electric Utility thut Production ~$3,380,266 S3,000,358 Transmission 318,573 309,125 Distribution 642,529 611,152 General 206,930 204 46'L Construction work in progress 56,917 52/(52 5 _ Nuclear fuel 132,972 121,709 4,738,187 1,298,859 less- Accumubted Deprechtion 892,686 769,880 3,845,501 3,528,979 C.u,rrent Assets Cash and temporary cash investments 4,877 1,839 Accounts receivable 26,354 32.398 _ Materials and supplies, at average cost 55,104 36,203 Fuelinventory, at average cost 2],297 31,801 Prepayments and other 9,026 7.859 122,658 110,1JO Deferred Charges and Other Assets Deferred STP co.,ts 491,704 299,163 Other 25,020 ~ 47,913 516,724 257,076 4,484,883 3.89i153
.e CAPITALIZATION AND LIAlllIJTIES Capitalization ~ ~ ~ ~
lommon stock, S25 par value, authorized 12,000,000 shares, issued and outstanding 6,755,535 shares 168,388 168,8M Paid-in capital 405,000 405,000 Retained earnings 875,521 7 9 Total Conunon Stock Equity 1.44te, ;"'o 1. ' o[ Preferred stock Not subject to mandatory redemption 250,351 250351 Subject to' mandatory redemption 44,053 47,272 tong-term debt 1,346,797 1 331.544 Total Capitalization 3,090,610 2,997,234 Current Liabilities long-term debt due within twelve months 168 158 Advances from affiliates 40,625 46,606 Accounts payable 47,370 58,358 Fuel refund due customers 8,2f 4 - Customer deposits 9,11r 8,895 Accrued taxes 12,324_ 5,680 Accrued interest 27,314 24,676 Other 24,529 18.492 169,680 162,865 Deferred Credits Income taxes 613,903 507,905 3r$ vestment tax credits 181,796 187,899 Other 428,894 40.252 1,224,593 736,056 S4,484,883 S3,896,155 24 He accompanying notes to financial statements are an integral part of these staternents-
Statements of Cas1 lows-Cl3 TRAL POMTR AND ljGRT COMPANY j ror the Years Ended December 31 1990 1989 19Ra J (thouunds) ,. OPERN11NG ACIT\TTIES L Net income _ _6204,870 jl4L781 Sly 3fj9_ Non-cash items incl _uded in Net income ,- Depreciation and amortization _ __1392722 130,396 82,569-Deferred income taxes 1Q3,326 1281 740 39&261 Deferred investment tax credits J6,103) _ (5 & l91_ (lj71 Allowance for equity funds used duringconstruction (111) (24,923) (98,424)_ Defe@lant costs _ (282,749)_ (209J63) 3 581)_ l- Changes in Ay, sets and thbilities [~ Acco!mta receivable _ 6,044 584
" " ' t 6. )
Fuel refimd due customers 8,234 (2J,063) (224)_ Fuelinventog 4,504 (6t755) 1,993 Aecounts payable - (10,988) . _17,429 _ gEW))_ Arcrued_ taxes 6,644 1 799 119,970) Other 49,595 (41,129) (36,239) 222,988 99.377 119,397 INVESITNG ACTnTTIES Ccastniction expenditures j98,558) (101fal) _ (168,250)
- Allowance for borrowed hmds used during constmetion (946) 0 5,168) (62,548)
(99,504) 0 16,799) (230,798) FINANCING ACIl\TTIES Proceeds From Issuance of long-tenn debt 50,000- 150,000 150,000 Preferred stock - - 85,000 Retirement oflong-term debt (11,149) (12,140) (158) Reacquisition oflong tenn debt .[37,514) (150,361) - l Retirement of preferred stock (3,525)_ - - Proceeds from pollution control bonds held in trust - _ g46 5,175 Change in short term debt (5,981) 46,606 (42,430) Payment of dividends (123,268) (74,576) (20,946) (120,446) (34,734) 164,659 ( ' NIT CilANGE IN CASil AND CASil EQUIVAI.EN'13 3,038 (52 11_56) _ 53_,258 l CASil AND CAS11 EQUTVAIENTS AT HEGINNING OF YEAR 1,839 53,995 737-l CASil AND CASil EQUIVAIIh'IS AT ENT) OF YFAR $ 4,877 8 1,839 S 53,995 SUPPIIMENTARY INFORMATION Interest paid less amounts capitalized 6153,618 $127.961 - $ 73,942 - Income taxes paid (8,390) (56,360) 14,895 . He accompan3ing notes to fmanaal statements are an integral pan of these statementt I 25
Statements O' Capitalization , GN'lHAI,l'0Wl:R AND IJGllT COMi'ANY As of Decendier 31 1990 1989 (thousands) CO3tMON S'11)CK EQUITY R 1,449,409 S1.3MJ07 3.'8EFERREILSMCK_,_. _ _ . . , _ _ _ . _ _ _ _ _ __ _ _ ,__ __ Cyntplatiye.$1Jo par vahn autkirigd_3p35Moyharts _ . _ _ _ _ _ _ _ . _ _ _ _ _ . _ . _ _ Number of Sbaren Curnnt Serica Outstanding Hedempthm Price Not subject tp rmmdatpry re3l emption 4 000 100.000 $105 75 _ _ _ 10,000 _ __ _10,000 4.2 m 75,nD 103 75 7,50(t _ _ _ _ 7,500 _.J'0 000___.____ _10lp0 _ _ _ _26,000 26,MK)
. 7 l?t 1 8.72% 500,W 102 91 _ _ . _50,000 _ _ _,_50$0 _
Auction Money Market 750,mo 100(o _ _75,000 _ _ _ 75/ 90 Auction Series A 425,000 100.00 -12,500 42,500 Auction Series H 425,0l0 100.00 4 2,5(>0__ __ __ 42,5u0 Issuance expense (3,149) (3.1 1 250,351 250,351 Subject to mandatory redemption 10.05% _ .- - .-._.- 4M,750 - _ - -104.76 .-. - - - . 46,475- ... - . 50,000. - . . . Issuange e,xpense _ ___ __ _ _ _____g92) _ _ _ (792) Unamortized redemption costs (1,630) O,936') 44,053 47,272 If)N(j TERM delft __ _ _ _ _ , __ _ _ __ _ . _ _ _ . _ _ First mortgage bonds Series J,6 %% due January 1,1998 28,000 28,000 Series K,8 %% dueJanuary 11 2000 _ _ . _ _ _ _ 25f)OO_ _ 25300 _. _ Series I,7% due Febmary 1,2001 _ _ . _ 36,000 _ 36M)0_ __ Series M,8% 1 due Nmygiber.k2m3 46,000 . , . _ . 46po Series N,9_T.,%, Jue June 1,2004 40,000 40,000 Series 0,8 %% due October 1,"007 75,000 75,000 Series P1 8 %%, due September li.hw 75,000., _ _ , _75p00_ _ Series T,7 %% due Dece_m_ber 15,2014 _ . _ __ _ _ _ _111,700 __111J00 _ Series U_19 %% due July 1,2015 H_l,700_ . 81,700 Series V,11 %% due August 1,2015 - 17,342 SerieslV,8 %%,due May 1, Ms6 . 200dM)0 _ Jop00 _ Series X,9 %% due November 1,1994 ._
. _ ._ _100,000 100,000
__SCbf8_Yi9 % \ d.ueJune1,1998 _,_ _ _ _ _ .
, 150,000 150/00
_Serpa Z,9 %%_1 dyt D fcymb'r h2019 _15(),000 150.000 Series AA,7 %% due March 1,2020 50,000 -
. Debentures - ___ ___ _ _ . _ _ _
Sanes 1985,12% due September 1,2015 - 16,909 Installmen.Laales _ agreements - Pollution control bonds ____ . _ _ . _ _ _ _ _ _ 7 %% dueJune 1,2004 9,6l10 _ _ _ 9,825_ _6$due November 1,2007. 34,235 34.235 7 %%1 du_e September 15,2014 6,330 6.330 10 %%31ue October 15,2014 _
.___.__ l '19,200 __ _13p,?00 7 %% due December J 1, }l6 60.000 Notes payable,6 %% due December 8,1995__ _ _ _ _ _ , _1,022__ __ __ ___60,000 _ __1,191_
N.namortized db cwnt . . _ _. _ _ _ _ _ (1H,323}__ _ (18.318) Unamortized costs of reacquired debt (53,697) (53,570) 1,346,797 1,331,541 TUFAL CAPITAllZATION S3,090,610 S2.997,231 ne m ompanying nues to finanaal smements are an inwgral part of thne swnnents 5
Notes to FinancialStatements t SUMRYOF SGECANT ACCOUNTING POUQES Central Power and Ught Company (Company or CPO Re Company recovers fuel costs applicable to sales to follows the Uniform System of Accounts prescrited by the - its wholesale customers, regulated by the FERC, dmogh Federd Energy Regulatory Commission (FERC). ine an automatic fuel adjusunent clause. Company, as a member of the Central and South West Under rules established by the Public Utihty System (CST System or System), engages in transactions Conunission of Texas (Texas Co nmission), the Company and coordmates its activities and operations with other recovers fuel costs as a fixed component of base rates The members of the CST System. The more significant difference between fuel rever.ues billed and fuel expense accounting polic:es are summarized below, incuned is recorded as an addition to or a reduction of Electric Utility Plant. Electric utihty plant is stated at revenues, weh a conesponding entry to accounts the original cost of construction, which includes the cost receivable ai iuel refund due customers, as appropriate. of contracted senices, direct labor, materials, overhead over recoveries of fuel are to be refunded to customers items and allowances for borrowed and equity funds used and under-n .meries may be billed to customers af'er during construction. Texas Commission approval. Allonnce for Funds Used During Construction. The Company sells its accounts receivable, without ne allowance for funds used during cmstruction recoune, to CST Cre? . Inc., a wholly owned subsidiary (AFUDC) is the result of an accounting procedure whereby of Central and South West Corporation (Csm, the amounts, based upon the level of comtruction work in Company's parent. progress (CTIP), representing the interest on borrowed Statements of Cash Flows. Cash equivalents are funds and a retum on equity capital used to finance comidered to be highly hquid debt instruments purchased construction, are reflected as credas on the statements of with a maturiy of three months or less. Accordmgly, income and charges to CTIP. AFUDC does not represent a temporary cash investments are considered cash current :ource of cash funds. Undet established regulatory equivalents. rate practices, a retum on and recovery of such costs is New Accounting Standards, in December 1987, the permitted in determimng the rates chargec for utility Financial Accounting Standards Board (FASB) issued services. he gross composite rates awraged 9.8% for the Statemem of Financial Accounting Standards (SFAS) No, year 1990 and 11.8% for the years 1989 and 1988. The tax 96, Am>unting for income Taxes, which wm be adapted effect applicable to the debt component is recorded as a by the Company by the required effective date, currently darge to deferred income tax expense. The Company 1992. This standard requires a change in the accounting excludes from the calculation of AFUDC that ponian of and reponing for income taxes from a deferral method to CWIP included in rate base for rate-making purposes, a liabi'ay approach, De expected change on the balance Depreciation. Provisions for depreciation of electric sheet will result in increases to the accumulat(d deferred utility plant are computed using the straight.line method, income tax liabihty, to a regulatory obligation and to a - generally at individual rates applied to the various clas es regulatory asset. Management belieces the adoption of tL of depreciable property. The annual composite rates standard will not have a matenal effect on the resuhs of averaged 3 0% for the year 1990 and 3.1% for the y-ars operations. 1989 and 1988. In December 1990, the FASB issued SFAS No.106, Nuclear Demmmksloning. The Company's portion Employers' Accounting for Postretirement Benefits Other of decommissioning the South Texas Project (STP) nuclear Than Pensions. Postretirement benefits primarily are power plant is $138 million, based on a 1989 estamate, medical and death benefits paid to employees after they This cost estimate will be reviewed and uprbted retire. This new standard requires that the cost of these penodically. The Company is recovenng decommissiorung benefits be accrued during the perimi employees render expenses through rates over the hfe of STP. The funds senice to quahfy for benefits. The Company, which received from customers appbcable to decommissioning currendy recognizes medical costs on a cash basis, is are paid to an extemal trust. requitect to adopt this new accountmg standard no later Electric hevenues and Fuel Electric resenues than 1993 generally are recorded at the time billings are made to The Company has not determined the full effect of customers on a cycle-billing basis and the cost of fuel is SFAS No.106 on its reported financial position or results of charged to expense as consumed. He cost of nuclear fuel operations ne new accounting standard allows for the is amoni7.ed to fuel expense based on a ratio of the accrued benefit obligation at the date of adopton to be estmwed Btu's used and available to generate electric recognized immediately or over a 20-year transition energy, and includes a provision for the disposal of spent period. Management believes the new accounting standard nuclear fuel will resuh in an increase in the amount of expense 27
- - - - - ~ - - - - - - - _ . - - - - - - _ _ , _ _ , _ _ - , _ , _ _ _ . _ - _ _ _ _ _ _
L):N rlal_ lWI R ANilij( lli COktl'ANY w Iceofrilled for l> birtilfe! Dent lCrKht; he el feil on the recostrO! tbroD% beUMent Id!c% ttsults of o;rrations wdlle mit:g.ced to the tuent that Rulmifkatbn. C,iam nunaal statement items for the Compan) is alkmed to de!ct for future rea .try prnt ) m base leen redas xd m uder to wnb rm k rw.tretrement benefit expenw in cuess of amouno the hm pmsent iaon 2NM [d IMO The Company, together with other niembers of the cst $ystem. files a consolahted hderal muime in rtturn OttllI3 ol I~cderal income tnes are a% lolkm s two um um irr w etta lTK!UMd Ih k pTd!W lljlCh%N ilfh$ l&W ( went 6(2.124) imm O*'F1 38d h.9.9 9 _.. - ._._ - - _ _ . _ _ __. h*"'M R M __.._ ___...-_ _ _ _ . _ _ _ _ _ _ _ _ . _ _ - . . . .%MS
'M _ M.
I h.ptyuten Me rne .. 4WD _ 41u4 , *y A,( kwpmlAht msts 29 _ (*!! Cwn iWevel.f pl _ _ _ _ . _ _
, (2f 2) , _ jN _ 13
.____MlMd'"?? t!__ _ __._ . _ _ _ - _ _ _ _ _ , _ ._ .- _ _ dkMO) . \l" _ NM i nhwa inem _ __ _. _ (11.033) _ are 29;t OM (t(47) !V K Mu 104,490 12'
- 4 0 3 '.
Nb a )k k b _.__.h M W .. (3721. . D_ NII n m.m (nmm,n n.- ti) (61D4) t , tl* f ! Wn ft ,hN 1.njadedjnJMn lrpp1ms ani ted., atony _ _ _ _ _ ___ _ _ _ _ J uytL _._ __,_ .__, __,___.._._ _ __ . FW) 1% M6 (164) n :t AH Idenni _ (954) '41 l Ik'
$44,409 i M 014 %014 l l t.
Total income ines ddict from the amounS computed meome before taes ne teamns for the ddferentes art by applying the statutory federalincome in rate. to as fo!km s
% in .
i ,4 % im k adh h r NMealbh \ lat h EdhliiW flin $101."21 R0 P117 34 0 MV 40 Nictum ArtNyutn (9,24H (3,1) m 4'in u ei 64 + o it' W (5,141) (19) RWil 42M #'4 Hi h Aremton of TK Oder ?,H.8 23 5 F12 2' Mu 05
$ %MN 313 iM mv .N 9 lbib 16 1 ensammaus anom saamaan namn sumanus usam
}nseS!Qer I in Cred!b t {I(J deferred m padr JearS are intone iM I! nun %difleientes f0f BbAh deferred mcome indaded e irwome over the ines of the related propenies ines had not been prouded and the related in effect A; Decender 31.1M the (umulatWe net an,unt of amounted to appnamutch it? nn! bon and th mdhon b
Notes to Tirancia Statements 3 LOG TERd(IB1 Tk mangage indenture, as anwnded and 1.lmitathins on Dhidends. The mangage indentate supplemered, xtunng first mortgage londs tssuni b) of the Gimpany, as amended and supplemented, contams the Gimpany, ainstitutes a direct ftN mangage ten on certain restnaions on the payment of common stot k substantr.ily all clatric utthty plant. daidendt At Daember 31, IM $Ni3MM of ret.unni Annual Requirements. The annual sirking fund earnings were available for pay:rwnt of cash daidena. requiremena are generally 1% of ftN mortgage londs Sale of long-Term Debt. In Man h IWO, the outstanding 1hese rtyutrements may tw sausfied by dw Qimpany issued $'0 milhon of 7 % Series AA, first apphcation of net expenditures for bondable pnipeny in Mongage Ibnds, due March 1,2020 uwd to wcure !?M an amount equal to 1(M4 of the annual rtyuirements Series Pollution Qintrol lkinds lhe procents from dc; Series T, U and AA first Mangage Ibne do not have pallution aintrol innds w ere used to ftnance certam sinking fund rtyuirements since they are collateral for pollution aintrol and sohd wTste disgsal facihties at STP. pollution control bonds. Reacquirrd long Term Debt. The Gimpany At December 31,17>0, the annual sinking fund rea(quiral $17 milhon of 11 % Series V, ftN Mongage requirements, exdusive of maturities, and the annual lbtds and $17 mdhon of 174, Series 19M Debentures in aggregate nutunties indudmg sinking fund requirements 19M The prenuums and related reacqui ition roc are of long-term debt are as followt dassifwd as y reduction to long term debt on the balanc. sheets and are being amonized mer 10 to 30 years. Annual sinking Annual Aggrt1pic Fund Itquirvnwnts Maturides UI.'"dik_ __ ._ N 9D 90)_ _ IW3 U% 10.491 j W4 fil% lW/R9 1M ft 2W 9th) 4 fREFERREDSTOCK 1he dividends on the Company's $160 mdhon auction f.ach senes of preferred stak, with the excepuun of pre %rred stocks are adjusted every 49 days, based on the 10 05Wries, is redeenuhle at the optico of the current nurket rates lhe dnidend rates averaged 7.34% Company upon 30 days notxe at the current redemptioti 7.77% and 6A3% during 1910,1991 and 199L pnce gr dure. Reden'ption pnces of the it??% and The Qimpany's 1005% Series, $1(0 par value preferred 10.0% Series dechne at specifwd intervals in future years. stock, ra iuires a mandatory sinking fund sufficient to lhe 10.05Wnes is nA redeemable until 1994 lie n1 ire h2M) stures in each 12-rixinth prood beginning Comtuny's diree iwucs of audion preferred stock totahnp february 1,1910, and ending January 1, 2001, and a $160 mdhon nuy also be inlecmed at par on any specified number of shares in each 12-month period dnidend payment date lhe premiums and redemption thereafter. The sinking fund rulemption price is $100 per costs are dnstfied as a reducunn to preferred stot on the share. In February IM the Company retired $3 'i25,000 balance sheets and are bemg amomzed over 10 yeart of its 1005% Series.
- 5. SFORTMRA FMC8 1he Company, together with other members of the commercial part and from banks 1he CSW System CSW System, ha estabbshed a System money pool to m,i-tairs nank hnes of unht aggregating $2969@F,
=
coordinate shon-te m turmwings and to nuke borrowings induding the Comp.ny's hnes of cretht. These hnes of ouoide the money pool through the issuance of crnht genendly requim an annual ftv. D 1 l
4 ClNihAl.luWI1( ANiil,1Glh COMI'ANY 0 KtUiiM6 11w Guguny, topther with other mem!rrs of the Aud I)ntmler 31. IM Iw9 and 19% the plan) rwt DW $ystem, parthtpates in a r.on<ontributor) definal awets cumkti the total aduarul present value of lenefit Irmion plan un enng substantially all its accumubini ttnefit ohhganom employtti lienefs are lusal on empkiyni yean of in ackhtion to the pemkin plan, the Gnnjuny aho sen kr, age at r.*tirenwnt and ounpenution.1he GW paniopates with other memlernif the GW System, in Sptem) funding p&y is lusni on actuarially determinni mnheal and death irnefit plam for substantully all active contnhutkirn, taking into attount amouno deduaible kn empknxv3 and emph9 res who retire frurri de GW inmme tax purynes and mtnimum motnh,iuom injuired Sptem.1he Genpanyi mst of providing those tenefe by the 1:mployee Retirement locome $ccurity Act of 1974, was $13 milhon in IVA anrnng 250 ac'he employen as amended Pemion ;)Ln awets comist pnmanly of and 130 retirco, $10 millam in IM mvering 250 -I unmnon stmks sind sheterm imestments aethe emidopts and 1 A0 reurces; and $7 milhon in 7
)
*he uvuponentud twt penskm cost and the 19% mvering 2,yo acute employtts and I,yv n tints awumptiom usal in accounting for pemium are as $tt New Annunting Standards in Note 1 kn infornution .
follows. relahng to $1 As No. l A I;mployers' Anuunhng lin l Pastantrenwn! lienefits other 11un Pemium 190 iu+2 tw UMuurxlo ! brit t' oHI h 4..N2 kN3 $ 43D1 insens ont m pritsted trrafa obhptm 11,494 12.s!? 11,031 Actual trtum on pLm Ws (1,931) 09M3' (h 4311 Nn arwmsutm afst i' &fenal ,, py ,,te9!, , spat sius s6w s t;6u, i Assom; bra , thMouf11 ralt 8,% 8j% N 4%, Inngtenn ntnperNhun irwre.nc 6.2 62 62 lirtum on pbn amt. 9.0 M M
- 7. J0t#LY OMED ELECTRC Ufl.ffY fWT ownenhip and operation of the 6f6 nwgawatt, nul-finti i 1he Onnpany is pany to joint ow nenhip agarments with non affilutal entities. Such agnements provide for Okbunion Power Station Unit Na 1 (Oklaunion) and its the }oint ownership and operation of S1T mmisting of rebted facihues 'llw statenrras of income refled the Gimpany's ponbn of operating costs associated with .;
two nuclear gercrating units. (see Note 8, litigation and Repdatory Pantshngs] Tiw Company also has a pint pbnt in senice. At ikwnher 31,19% the Gnnjuny had ownership agreement with other nwmlers of the GW interests in the generaung stauom and rebtnf fanhties as Sptem and non affiliated enuties in prmide for the joint shown Irlow: South ina PrtStt , olhunkm u%nyyug , _ , Mngn a1gt . _,__ _,, , _,_, ~,, __ _,_ _ _., _, $ 2 p gj__,_ __ ,,_, 14p C __
,ME!rmMedf]Mygt .__ $ Ql;01_., _ _ _ _ S4_jg _
.IM8 5MHtn!t_ .__ _ _ . _ _ _ __ 2R __ _ . _ e fdkM "L___._ -_ 25 "" _ _ _ _ _ JD ___
hre d capatry - mm - 6W 52 y)
\otes to :inancia Statements 8 UTMOJMDREGULAIORMOMDWS Introduction. CPL owns 25 h of STP a twunit thnugh rain danng periah when CWIP was included in nudear pwer plant which is k(ated near liay Cit,1cus. rate base were a tem;vran loan from customers The in addnion to CP1, thiuston 1.ighting & Power Q)mpany temjorary kun will be repaid through lowr rates from (litf), the proica nunager, owns ,%, the City of San 1991 through IW5, whk h appaninuto the length of itnw Antomo(San Antonk0 owns 2MN and the Cny of Augm danng w hkh the carmng costs were collcord from
( Austtnl owns 1MN S1T Unit I was placed in sen-ice in customen Th Minor CWlP liabihty willle reduced by August IW, and STP Una 2 was plaud in sen ke in June t!w recogniuon of non-cash income during the IW1 19 s through 1W5 amomzation penod %e STP Unit 2 Order STP 11nal orders CPL entered into non-unannnous provided for the recovery of deprecution expense on the stipulated agreements during 19N to roohr all issuo in Ahnor CWIP aswt m er the hfe of the plant. adets before the Texas Commiwion relatmg to STP 11w As part of the stipubted apeement, CPL has apeed to Texas Commission conduced full hearings for tfwse fnere baw rato, from January 1. lW1 through IW4
&dets in Ocober 194 the Texas Commission iwurd a subject to certain font nuieure es ents indadmg double-final order (S1? Unit 1 Order) w hich fully implenwnted a digit m0ation, nujor tax increases, extraordmary increaws stipubted apeement fikd in february IWO to re,ohe in operaung expenscuw wrious dechno in operatmg -
&dets then pendmg before the Texas Commission in toenues, Generally, font nurure prosiskms wouki not December IWO, tlw Texas Commiwion iwued a final apply unless annual expenses have thanged by more t}un order (STP Umt 2 Order) which fully implemented a $X million or baw revenues fall below certain speufied stipulated areement to resohr all issues regardmg CPlh _ levels After IWi, CPL nuy file fo, matases in baw rato invntment in STP Unit 2. as needed flow ever, for any baw rate in rease in excew 11w STP Unit 1 Order allowed CPL to increase baw of 5% annuall), the amount of the increase above 5%
ratn by $144 milhon on a total nimp. " baais. This base would be subpt to maximum annual reductions of $25 rate increase nude pernunent a $105 n. 'ior' interim luw mdlion for 1W5 and 174 and $w mill on for IW7 rate increaw placed :nto effect in March 19X) and a $.N tiuuugh 19W Tlw fud portion of customen' bilh will million interim base rate increase pbced into effect in contmue to be adpved after review and approval by th September 1989.11w STP Unit 2 Order providtd for a Texas Commission. permanent luse rate increase of $120 nulkon effective The stipubted aprenx nts were catered into by CPL January 1,1991. the Texas Commission Staff (Staff) anu a maionty of
%e STP Unit I and 2 Orden resohr all issues intenrnors including mahr citin in CPI's senice terntory
, penaining to the reasonable onginal cost of STP and tlw and nuhr industnal custoners %ese intenrnors appropriate amount to be indu& d in rate base Pursuant represent a signifiant nujonty of CPUs customen CPL to the Texas Commission orden. the original cost of CPUs and the Texas State Agencies reached aperments, w hich total ir, estment in STP h included in rate base. were subsn{uently approved by the Staff and other The STP Unit 1 Order provided for operating expenses signatones, whereby the Texas State Agencies apeed not and carrying osts on STP Units I and_2 to be deferred to oppose the stipulated agarments in any respect, from each unit's respatne commercial operation date except wnh n gard to defened accountmg and rate design until March 21, lWO. After March 21,1990, CPL deferred inues in the STP Unit 1 Order only. The Office of Public only carrying custs on us invotment in 517 Unit 2 untd l'tihty Counsd (OPUC) and a cualition of low-income January 1,1991, when rates reDecting STP Unit 2 in rate custe nen dechned to enter into the stipulated luse went into effect. The STP Umt i Order provided for apeements.
the deferral of carrying msts for interest charges, to the in Januaty 1991, the Texas Mate Agencies, OPUC and extent adual interest charges were incuned, and the the coalition of low income customen filed appeals of the resulting tax effects dunng the deferral penods. ARDC in STP Unit 1 Order in the Distnct Courts of Travis County 19% reflects a redawificanon of approximatdy $27 (Distria Couru requestmg reversal of the defened nulhon from ARDC4bt to AFUDCqairy consistent accountmg for STP Unit 2 and other changes These with deferred accounting in accordance with the STP Una appeals are pending before the Distna Court If these 1 Order. orders are ultima:dy reversed on appeal, the supulated v - Le STP Unit i Orus authorized the use of Mirror aperments would be nulhfied and the Company could Construaion Work m Propew (Mator CTIPX in which experience a signifiant adverse effea on its results of CPL recognized 5.%0 milhon of carrying costs as original operanons. \tmagement bdHves that the Texas umstruaion nists and e stabbshed a conesponding habihty Commission orders rdi be upheld to customers recorded in aber deferred credits. In . Defereed Accounting. In April 1949, CPL was panted complance with the order, carrying costs colleaed defened accounnng on STP Urut 1 by the Texas 31
Cl Nildt,1WI R AW !Elli COMPANY
- ilnliMion ( Pl w ds idwI dC cr!{nh 5 ' Unlk Wsb WhokNt(itak(b(tk1em(NkiNbe emher Fm bPt parsuant to a Teus Commien Aimrastratne law reathed a setdement tWholesalc $ctdemenu w ch all of in JoJge HAl))intennueder osued in lebmary Im linal w holesaic t ustomen, eucpt for one clednt m igratn e Teus ComnuWon appnwal of defened auounung for The 4 tu desales etiement ulb for an inacase m blT l'N! 2 Was granted in the flT frut I O!dtr These whdrsale rJtes ol approVnutt!) $10 a aan m luo steps orders albwed CPL to defer operaung and mamtenant e w hu h wcre p ased into dint subrect to retund. m Ly costs. t us depreconon and urnmg cosa (Sce STP IW and Januan P"1 The Whiesalc seulement is l'inal Orden ) Deferred axounung had an inminlute omstent w th the STP l'nn 1 and 2 Orders m all odict pisane died on net inmme, but ush cammgs were not respeus lhe Whoicsale seniement w n blnl w ah the inacased una; rate, went mto etfect reccetmg SIT m 11IK inJanuary lwl and wdi not bewn.c hnal untd sen ke. Pursuam to the STP l'mt I and 2 Orden. LPL s appnacd 011 upcets a hnal ordo m the noral quaner rain indade inmery of h eh sTP 1 nn 1 and 2 defertah ofPnl The following amauno were defened and are refinted IllP and Austin $ulk, CW and CFL are pamn to m the statemenS of inmme lawsaid m unous Trus state rouns regardme dw nunagement of blT in 19d Austin fded suit ag,unst lllf, tM 1r' aHcong dut il!P lud faded to propedy pedorm in dairs un w as pnice
- nuner in IM a State Dntud uiun jun-Opeuuy t sperm $ HL lih founJ 0e Ulf and cs parent limaton Industnes bronp + m 6 Inunpreed Hownn Ausun apgded dw dn nvin Tim M M appeal use w as heard by the Oiun of Appeak m irdrul mum um % *t Do emh r FW hut the Wrt lus not rendered th Vt in op 4110 $1w deusMn in jamun 1% Hit Idra smt awenmg t!ut if it n Defenni sTP 1 nit 1 msb of D rndhon annhutahie in luble to Ausun for any danuxc3 in the Ausun suit. Hlr n the penal from the comnercul oper. ann date through enuded to mntnbanon or mdemndy from (l L LW and Dnember 31. NM wcre rnornized m net mcome m 1M Delened utmng nuts of Wo nu' hon wcre $an Antomo beuuse all the .htninn comp!.uned of wett deusiorn or aan mn of the STP Wrugentnt Oimnunce, recogn!!cd in net hwome in F4) n a resah of addnional u huh ha<J membcn from all MT pamopans, therdure, arrpng wst deferrah for internt to the cuent of actial mternt charges annbuuble to 19* znd IM all pamuPanh are lub!c fut the aenons wmplamed of b)
Austm in July PM, UPit and the leus State Agenan hied In Wrth PM punaant to the SlT Pamupanon appeah of the leus Commmion s hnal order in Dntria Aperment. CPL and San Antonio eaHed for lundmg Coun reTrsting resersal ~f defened accounung for STP arbaranon of the dnputes with HLP. In August 1% the l' nit 1. In Neptember FM the Dntnct Coun osued a Omn panted LPL s and San Antonio's requesh to wmpel judgment affirming the Tem Commission's fmal order arktonon of the mun pinered by the pames and to approung defened accounung kn CPL's $TP l'mt I wsb stay the hnganon pendmg arktr.non In Aueust PNo,Illt In,12nuary 1991, OPl'C and the leus $ tate Avenun feed fded a monon for reconvderanon and a motion seekmg to appeak in a Sute of Tens Coun of Appeak of the leus rewnfgure the arbaranon panc! to include adJoonal CommiWoni f nal order approung defened aa outung for 517 l'mt != These appeah are penJmg before the wun-appunted arbaraton The Giun has not set ruled on HLP s monons Court of Appeah Ahhough nurugement annot predict the outwme of if the order granting defened accounung for STP l na 1 the vanous sTP legal prxecdme nunagement behnn is ulumatdy rnersJ on appeal the supulated agreemena tbt HLP de not hate a sustamable datm apast CPL or would be nuthfied and the Company would expenen;c a significant adsene effect on its rnuhs of operanons C$W Wnagement beheces that the defened accounung order ' wil! be uphdd y $ , i . It ts esumated t'ut the Company wdl spend and operanon of STP, the ownen have punhased the appmtunzdy $11MMM for congrucuan purposes m maumam lunas of nuclear haNhty msurance, as requaed 199L by law. and ha e necuted indemn:ficanon agreements Subcnual wmmitmens base been made in n ch the Nudear Regulatory Conuussion (NRC), in conneamn wnh the 1991 constmnton program accordance wth the fmancial protecnon requaemena of Nuclear Iraurarne. in connecnon wah the kensm; the Prke-Ander..on Act M
\otes to ZinancialStatements The Price Andermn Act, a comprehensive statutory llw owners of $TP cunrntly naintain on4ite snarwenent pnwiding hmitatiom on nudear lubihty and dauntamination lubility and pngeny danuge insurante gmrrnmental indemnities is in effect until August 1, XO! in the anwnint of $14 billion provided by A,uerican The linuts of liabihty unkt the Price- Anderson Ad for hudcar Imurerond Nudear lhvin( insurante lanuted hcenvxs of nudear power plants is $74 bilhon per (NI:!D. Pohcies of imurante issued b) Nill stipulate that incident 1he owners of $TP are imured for their share of pibcy pra mis must be used first to pay decontamirution this habihty through a combination of pnvate insurance and deanup aists, before tving uwd to cover dind and a mandatory industrywide pmgram for sdf imurance, losses te property 1he Gimpany and dw other owners of 1he nuumum amount Out ca;h htemee inay be aswswd STP luve entend ints an agarment that provnk s for the under the industrywide program of self.insurante total mst of demntanurution, habihty and property following a nudear incident at an imunti facihty a $%15 imuran (c for STP(indu&ug premiums and assessnent0 milhon (whkh amount may be adjusted for inflatum) for to it shared pro rata based u;on each owneri respauve each ikenwd reador, but not rnure dun $10 milhon per ownership interests in STP.
reador for cath nudear inddent in any one year. fer purposes of thew assessments, STP has two lkrnsed reactors 10 OJqiLY PFOR.%iOWJROED The following unauded quarterly inforn,ation l# effnt of the Gimpann defernd ant:untmg ordet indudes, in the Companyi opinion all adjustments on STP l'mt I rnorded in the quaner en&d March 31, humisting only of nonnal recurring adjustments cuept 199A as dnwwed in Note to nutssary for a f air for the 1988 and 19W eflat of the O)mpanyi $TP l'n i 1 presentation of such amounts: liate Case $ctdement recorded in January IWO and the 11ttrk Oyrsting Dyrsting Net t.Marter imled Arwnuen Inmtne inmme
. ~ . - . _ . . - - . - . ~ . - - . .
. , - - - . . - -nhrutsi - - - - - -
__ - - - - - - - - ~ . -- - - - --. Matth 31 51V1.w $12 % 510' 5 " june 51 h4le $W1 h 162 _3; watt so 2e3 vm em
!)erender 31 - 2R131 Vi % 2UK 1989 Mmh 31 junt 3D
. _ _ __[ 51*1h 193N0 N
41 014 5 E._ R412 _ y cn k Vi N241 s1593 42f3 IWendreil 212 'Is H bl 14ill Operating income and net income were tota:ed for l! nit 1 Ordem docussed in Note K the quarters ended March 31 and June 30,19W te reflect infonrutnin for quanedy periods is affected by the Texas Commissioni itnal Order approving the STP wasonal variations m salo, rate dunges and other factors
-B
._ _ . _ . _ . _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ . _ . . . _ __ m.
Seectec rinancia Jata The following Kkted financial data for each of the five years ended themler 31 are provided to highlight s,ignificant trends in the financial conditbn and results of operations for the Company.
~
1990 1949 IVAs 19C 1986 (thou ands, except ranos) ikonc Operating Revenues { 948',520 5 S n s85 $ 5 52 $ 7((2h $_jf9f[ Net injime 2K570 147281 1%H19 191.927 17E1M~
~
Preferred StockDrndends~ 23,s28 2435H fj~E5 190 1[diIi~ Ntt locorne for Comrnx 5iod 15M2 12M23 135.294 _176,107 1%,1%
~
iiiaflistu _ 4jli{883 3T8Q_ 3g0_j32 3.341,949 2,950,1J9] Preferred Stock
~hii5ubjectio Alandatory 250,351 250.351 2m368 166,782 166.705 Redemgim _
Subject to Mandatory Redemption 4 {053 47,27t _ 46,w2 _ atgM 4(g% i long-Term Debt 1,37Id97 1,331,544 1.325,977 1,179,456 1,W8,987 l l Ratio of Eamings to fixed ) Charges (SEC &thcxD 3.11 2.49 2 44 3 00 3 16
^
C231zalerLRatila _ _ _ Common Stock Equiry 46.9% _ _ 45.7% 44 4 % 45 4% . 45(N _ _heftrti d_Slod 94 33 ---- l!M H4 ---21_ long-Term Debt 43.6 44.4 45.4 46 2 45.7 I~ i 1 34
Management's Discussion and AnaVsis of Anancial Condtion and Results of Operations ctsts for interest charges to the extent actual intervst charRes wrteincurred. The following discussion and analpis of the lhe STP Unit 1 Order autimrind the uw of Mirmr P in which CPL nrognized $360 million of Companyi financial condition and n sults of operations relate to the financial Statements, Notes to financial can)ingmb as oqinalmnstmedon ce and etabliMud a mnolonding liabihty to customers Statemenund the Sektted Financial Data The infom1ation contained therein should be read m Wnum asume 6aWnga mW conjunction with and is essential in undentandmg the through rates during perials when CWIP was included followingdiscussion and analysis. In rate base wtre a temponu) loan fmm customers.1he _ __ temporary loan will be repaid through lower rates fmm OSEN 1991 thmugh 1995,which appmximato the length of time during which it was collected from customen.1he Net income for common stock for the year 1990 M rmt CWlP liabihty will be nduced by the recognition increased 47% to $181 million from $123 millio, in of non cash income during the 1991 through 1995 1989.1he increase in camings is primarily dee to the -
.unortlution perica The STP Unit 2 Order provided for Texas Commission's final order on October 19,1990, the recovery of dereciation expense on the Mirror which fully implemented the STP Unit 1 Settlement-CWlP asset over thelife of the plant.
f%TESANDEGULATORd/ATERS cpl's base rates will be frozen fmm January 1,1991; through 1994 subject to certain force majeurv events. STP Final Orders. CPL entered into non. The fuel portion of customers' bills will continue to be unanimous stipulated agreements during 1990 to adjusted after review and appmval by the Texas resche all issues in dockets lefore the Texas Commission. Commission relating to STP. Deferred Accounting,in April 1989,CPLwas lhe STP Unit 1 Order allowed CPL to increase base granted defernd accoenting on STP Unit I by the Texas rates by $ 144 million on a total company basis.1his Commission. CPL was also deferring STP Unit 2 costs base increase made pemianent a $105 million intenm punuant to a Texas Commission Alfs interim order rate increase placed into effect March 1990 and a $39 issualin February 1990 Final Texas Commission million interim rate inen a placed into effect appmval of deferred accounting for STP Unit 2 was September 1989. The STP Unit 2 Order provi&d for a gra;.ttd in the STP Unit 1 Onler. Thoe orders allowtd permanent base rate increase of $120 milhon effective CPL to defer operating and maintenance costs, taxes, January 1,1991.' depntiation and can)ing costs. Deferred STP Unit 1 The STP Unit i Order pmvided for opaating costs of $28 million, attributable to the period frum the expenses and carrying costs on STP Units 1 and 2 to be commercial operation date through December 31, defened from each unit's respective commercial 1988, were incluid in r'et income in 1989. Defernd operation date until March 21,1990 After March 21, carrying costs of $% million wen recognized in net 1990, CPL deferral only carrying costs on its inetment income in 1990 as a result of additional carrying cost in STP Unit 2 untilJanuary 1,1991, when rates deferrals for interest to the extent of actual interest reflecting STP Unit 2 in rate base went into effect. The charges attriMtable to 1988 and 1989. CPL will forego STP Unit 1 Order provided for the deferral of carrying thenrovery< equitycanyingcostsof approximately as
CINIVAl,powly AND tmillCOMPANY l l fo7 million not pasiously nrognizal for fmancial eporting purpus, pursuant to the Texas Comm:ssion DMMNNG order. liefernd accountmg had an inunediate positive Internal Generation. The fmancial strength of the effect on net income, but cash eamings wem not Company has improved due to rate relief received increased until rates went into effect refketing STP in dunng IWddoniOddine in dw Ompny s seMee. construction progtmn. l< ate relief provided for an Wholesale Rate Settlement. In September 1990, adequa atum on OHbmpany's invested capital In cpl. reachal a whoksale Settlement with all of its 19 0, die Q)mpany obtain(d die maionty of its capital wholesale customers, except for one ekttric cooperatne requirements Imm' internal sources and anticipates that The wholesale Settlement calls for an increase in its capital requirements dunng the 1991 through a93 whoksale rates of approximately $10 milhon in two pgg.dl lx' pnnided from intemal sources. steps 'lhese increases stre pland into efktt, subject t Inng-term 11nancing. During 1W0 the Comp.un' refund, in May 1990 and January 1991. Cpl. exptts a issual $ 50 million of first mongage lxinds, as discusse[1 final order in the swond quaner of 1991. in Note 3 of the Notes to Financial Statements lhe for additional infonnation. sw Note 8 of the Notes pmed fmm this issue were used to finance pollution to Fmancial Statements. contnd and solid waste disposal f acdities at STP. The Company also mtind $3 5 million of its 10.0% Senes CONSTRUCTrJ4 PFO3W prtfernd stock in the first quaner of 19% as discussed in Note 4 of the Ltes to Financial Statements. long-The company,s need for capital results primarily tenn financing by the Company involves the sale of first from its construction of facilities to provide reliable inungage bonds and preferred stock and the ntript of ekttric service to its customers During 1990, capital contributions from its parent company or other construction expenditures including AFUDC decreased f nancing ahematives The goal of the Company is to 30% to $100 million from $142 million in 1989. The pmvide a strong capital structure At December 31, d(dine in construction is due to the completion of STP 1990, the tapitalization ratios were 47% common stock Unit 2 inJune 1989 which marked the end of a major equity,9% prefernd stock and 4 A long.temi debt. The construction program it is estimattd that construction on ny WWtt muim any long-tenu expenditures during the 1991 through 1993 period will financ ng dunng the 1991. through 1993 penod aggregate $3M million Construction expenditures Custouter Accounts Sold. The Gimpany sells its during the next three years primarily wdl be made to bilkd and unbilkd accounts nteivable to CSW Credit, improve and expand transmission and distribution Inc., a wholly owned subsidian of CSW 'lhe saks facihtiesJihese improvements will t e requind to mwt pmvide the E>mpam with cash immediately and the nads of new customers and to !atisfy changing reduce working capiial and revenue requinments 'the requirements of existing customen . So new base-load mdaly average and year <nd amounts of accounts power phuits are currently phtanet until after the year ede fed a %300A0 ad $103MA0 in 1990, as compared to $S2,6001100 and $74 900,000 in 1989 w
Management's Discussion and Analysis of Anancial Condition and Results of Operations l Short term Financing. The Company, together STP Unit 2 of $23 million, net of tax, prior to itsJune with other members of the CSW Sptem, has estalched 1989 commercial operation date. See Note 8 of the a System money pool to coordinate short-term Nota to Financial Statements for additional lernming. These loans are umsund demand infonnation, obligations at rates approximating the Sptem's Electric Operating Revenues, Total electric commexial paper lorrowing costs. The company's operating mrnues inenfased $112 million, or 13% short-tenn borrowing limit from the money pool is from 1989 due to higher rates grantd in the STP Unit 1
- $200 million, and bontainp will le made during Order. Sm Note 8 of the Notes to the Financial 1991 as mjuirtd. During 1990, the awrage amount of Statements for additional infonnation on the short.tenn borrowings outstanding at month-end was Company's mgulatory proceedings.
$33,405,000 at a weighted average annual interest rate Residential wwnues increased slightly over 1989 of 8.48%. The maximum amount of short-term itflectmg an increase in customer grtuth and in total borrowings outstanding at aay month-end during 1990 kikm att-hour sales. Customer growth awraged 2%
was $90As7,000, and at December 31.1990, during 1990, with yearend customen approxim.iting
$40,626,000 was outstanding. 558,000. Revenue per customer was $791 in 1900, an increase of $112 owr 1989. This was the rtsult of the NEN ACCOUNTING STANDARDS retailcustomer teteincrease.
Reference is male to Note 1 of the Notes to Financial Commemial menues increasd 16% from 1989 as a Stuements - New Accounting Standards for a rty:lt of a slight increase in kikmatt hour sales and the discussion of Statement of Financial Accounting implementadon of the STP Unit i Ortier. Standants (SFAS) No. 96 Accounting for income Taxe, industrial evenues increaxd 9% from 1989 as a and SFAS No.106, Employer's Accounting for nsuh of petrochemical and refining customers taking Postretirement Benefits Other Than Pensions These advantage of incentive rates and the STP Unit 1 Order. standards have not twn ackpted by the Company. ' The incmase in industrial saks over the last three 3ran reflects improvement in the economy thmughout CPlfs SULTS OF OEfMTIONS - service area. The Company has responded to the effects of competition from cogeneration by offering incentive Net income for Common Stock. The Company's rates for late,e industrial customen. The Company is
. net income for common stock increasd 47% in 1990 t committed to continue its efforts to dewlop new
$181 million fmm $123 million in 1989. The incmaw business and retain existing customers in he fax of resulted from the STP Unit 1 Order which allov,rd cpl.
greater competition, to recognize income as a rtsuh of the deferral of STP Units 1 and 2 carrying costs for intertst charges to the Fuel and Purchased Power. Total fuel expense extent actual intemst charges sem incurrtd The f r1990damawdprimarilyasansultof adecreasein deferral of interest charges nsulted in $96 million of unit fuel costs attributable to the increasd usage of 1 wer c st nuclear fuel and s!!ght decreases in unit fuel net income in 1990 attributable to 1988 and 1989 %
-inemase in defened carrying costs was offset by the costs for both gas and coal. The awrage cost of fuel for recognition in 1989 of $28 million ofincome from h ye r w s $1.87 per million Btu as compand to II'99 in 1989. Natural gas was usd to generate 52% of defermi STP costs attributable to 1988 and AFUDC for i
1 37 4
t tN~lRA1.IU%Tl4 AND llGiff cOMl'ANY l l the Companyi hilowatt-hour requirements. inwme tnes. In addition Tuas gniss neciptsin Costs per million litu by fuel source wtrv: incmad slightly due to increased mtnum The sm, inervaw in hderal income in expense in 19W is due 19% 1*N dmud in part to arj jncreaw {n taxable inconte and ;ul co sui su se inemaw in defemd rideral income tne due to the cui ns n: W change in the medal of recordmg defemd STP wa M M % cning cm Refemna is mde to Note 8 of the Notn Reference is made to Note 1 of the Notes to Fmancial to financial Statements "STP rmal Onlers" for Statements,"r.httric Rewnues and fuel" for additional additional infomiation on the meth< d of ntording infonnation on nuclear fuelexpense defemd STP carrying c ots. Purchawd [mtr ex;rnw decreawd 12% in 1990 Interest Extdme and Prelerred Stock innn 1989. The decrease oser the last two years is a Dividends Interest on long-tenn debt deca axd due to nsult of STP l' nits 1 and 2 being phtad in sernce. the reacquisition of first mortgage bonds and Expenses and Taxes. Operating extenses, other debentures in the third quarter of 19%) and the founh than fuel and purchased power. increasal in part as a quarter of 1989 short-tenu interest ex;rnse incitased asult of the STp t' nit 1 onter which ended the deferral due to intertst accruals associatal with the settlement of of operating expenses on STP Units I and 2 in March ruleralincome taissues Ptriemddnidends 1990 decrtased due to the rttirement of $3 i million of in addition,in 1990 the Q3mpany charged to 10m Series pwfemd stock. as discussed in Note 4 of expense the remaining costs associated with the Notes to financial Statements, and to a lower dhidend 0)mpany's 1988 carly retirtment program of $10 rate on money market and auction prefernd stocks. mil! ion and the amortinttian and chaige off of rate Allowance foriunds bed During case extenses totaling 524 million Omstruction. The dechnes in the amounts c%tal Inflation rates, as measund by the Consumer Prict El'DC in IMO and 1989 wen due to STP Units 1 and 2 Index, have averaged 4 7% for the three-year period going into senice in August 1988 andJune 1989 endmg December 31,1990. The Company lelieve that El'DC in 1990 n& cts a ndassification of AlTI0 debt inflation, at these levels, does not materially a!kct its to Art'Icequity as a rtsuh of the defemd of intenst results of operat!ons or financial condition. Ilowestr-charge in accordance with the final order in the STP under existing regulatory practice, only the historical l'ait I rate case. cost of plant is recmtrable f rom customert As a resuh' Defermi Plant Qists and D:fernd Plant cash flows desigtni to provide recostry of historical Wng Qwts. Defemd STP carrying cost.s of $185 plant costs may not be adequate to rvplace plant in nullion wpn x nt the caming costs for interest charges future years. on STP l' nits 1 and 2, to the extent actual interest Taxes other than rederal income increawd in 1%0 charges wtre incurred. as granted by the Texas due to a Texas franchise tax refund received by the
. Gimmission. Of this amount. $96 n'nllion of net Company in the wcond quarter of 1989 totahng $9 4 income was attributable to 1988 and 1989 millian includingintemst, net of taxn The principal was endited to taxes other than rederal income tnes, and the related tn impact was recorded in rederal
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r Com3arative Statistical Record cr.vrRA1.Iunit ANIiimitI coMi ANY ltMO 1989 14 % AVEllAGE Nt1h1111:11 Olt ClNIOh11:ltS ~ Retidential 468,675 400,522 452,707 7 I'I I - 71,','J ,[ 7 Total 550,052 541,620 532,882 Nlthilliril Ol' CtNIUh1EltS - END Ol' l'l:l<!OD 557,882 549,301 539,896 54II'S - KIlpWAIT ilOUltS Ohouwmtin)_ _ _ _ i _ I.<Pt.slyntial _,_ ___ _ ___ - . _ _ _ , __ A368,128_ _ __ .._.5,277.991_ 4,915J41 Commercial 4,160,083 4,086,174 _ _ _ 3,898.835 Industrial . _ 4,812.279 4,587,Ui3 4.244,925 All other 1,381,833 1,351,976 1,528,082 Total , 15,722,323 15,3mi,774 14.617.583 IllNENWS @mmnd*L _ _ _ _ _ _ _ _ _ _ . , _ , _ _ . _ _ . _ _ _ _BeF rntial__ id _ _ _ , _ . _ _ _ _ _ , _ _ $370,613_ _ $312,850 __._J295,167 Commercial _295,322 _.__254,301... _.244p82 Industrial . 201,461 _ _ 184,871 180J145 A!1 other M1,124 84,560 70.838 Total 8948,520 R836,585 S790,432 RESIDENTI A1, AV_I;ltAGES ______ _lillowatt4mursper customer _ _ _ , _ _ _1 1,4 5 t_ _,_ .11,4 61_ _ _10p25 _lkvenues per customer 8190,77 $679 34 $652.00 Revenues per kilowatt-hour 6,900 5.930 5.97t SYSTEh! cal'AllllIIY AT l'EAK (Kihmnttw) CPL stations 3,966,000 3,947,000 3,801,000
~
SYSTEh! htAXIhlUh1 DEhtAND (Kilowntin) 3,110,000 3,145,000 3,013,RU I_Ul51r_IMI.El.ENQ' DATA. , _ _ _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _ . . _ . Average litu per net kwh 10,328 10,402 10,085 Cost per million Btu 81.87 $1,99 $2.11 Cost per kwh generated (mills) 19.43 20.70 21,26 11AIANCE SilEIT DATA (thoummdn) Electric utility plant $4,738,187 $4,169,ti37
~5Esu~alWns'tfusd additioni ~~~ - - - ~ ~ lt59,615-~$4,298,859
~~
141,725-~MU,525
~ Ac ~iuMdaiefdeiirkiatis ~ ~~~-~ 892,s55~ 765,~880~~ 6 5df5 Percentage of acwmulated depreciation to original cost 18.84% 17.91% 15.78 Calf!TAIRATION @munands)
Common stock equitC__ S1,44 9,109 _ . S1,368,067 _ _ S1,294 444 Preferred stock 294 p104__ 29_7,623 _ 297,334 long-term debt 1,346,797 1,331,544 1,325,977
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( l Nl LAl IW1 R ANO 11t,01 M!I'ANY IW7 l' M 14G lusi lW 1 %' l*l IWI 446,548 411,h19 432,9' Wi 420,187 107 A p > 391,43, 376.111 3hl,181 70,008 69,719 # a,720 67.217 65.359 63,541 m,386 57,401 6,518 6,713 6,827 6,717 6,6;2 6,5M 6.32J 6.014 3.277 3.251 ",2h8
, 1,2(Hi 3.185 3,171 3.108 3,OT.1 526.3N1 521,635 511 721 19i,627 482,202 167,752 -116,2m 428.147 532,516 527,392 521,261 5o7 -102 192.712 477,89,' 159Ai3 137,138
-. 4,100,356 4,567,961 1,4 W,hst 4,2( 0,Wi3 3,h63,79X 3.9 M,lll 3,736.235 3,571,151 3,736,151 3,731,321 3,661,417 3,452.9N9 3,2nh,206 3,27X p h 1 055,741 " 6%1,956 4,325,326 5.521,265 5,945,32b 6.280.810 5,910.099 5,532,3 A6 5,h67,765 5,fi75,723 1,136,327 1.816,170 1,5013no 1,1Ni.us7 1,116.201 1,111,911 1,531,25n 1,251,473 14.028.160 15.610.017 15.621,287 15.104.419 14.159,201 13,910 113 11,221,011 13,3X7.133 S273,; 23 $81,14 5 8295,03H $29x,166 82a6,182 52E2,616 S233,593 920'i,214 231,001 211,773 252,331 255,879 2D,255 242.215 202,819 171,017 198,481 251,626 300,915 31290 336,001 303,933 277,x24 234 p w; 65,556 79,231 76.621 75,219 74.210 70.422 79,70) 60.429 1
$768,2R1 sh59,915 S924,408 S472,Ih4 N916 ,'x 1 S899,186 8793.912 89;4,596 li),369 10,33S 10,325 10,010 9,193 10,111 9.925 9,897
. - - - $61186 $n13.53 S6s1.53 87(0 14 6703 14 s716.50 8620 53 h562 61 5.900 6.22c, 6.600 7 Osc 7 41C 7(Oc 6 USC 5 690 3,698.000 3,703,0( H 3.6S8 A O 3 667,(K0 3,625 9 ki 3,523,( k k) 3,523,4 0 2,951A n 2,881.Rki 2,974MO 3.022,R M 2,8329 0 2.569M U 2,X259 U 2,7319 0 2,505,(k o 10,164' 19,174 10.010 10,29s 10,231 10,236 10,171 10,374 S2.08 S2.33 82.89 $3.27 83 47 S3.51 S3.01 $2,55
..- -21.17 23.70 29.01 33 65 35.47 35.97 30.93 26 43
$3,853,568 S3,126,960 83,0;6,619 92,75X,977 82,385,459 92,110,140 81,880,195 S1,687,124
~
444,723' ' ' 433,061 I156,151 386,952 256,524 237,251 110,519 231,858 589,W3 S46.285 503,405 458,831 418.037 377,738 339,497 301.2te 15 31% 15.911 16.471 16304 17.520 179n 18 051 17,8m.
$1,159,'f50' Si,0(dj43 8971,413 SS51,80ff 8723,251 $635,019 5555,245 S478,191 213,442 213.060 181,979 181,989 182,021 132,770 132,770 132,796 1,179.456 1,04 8,', 87 981,481 866,551 728.149 617,401 573,427 509,021
V Slareloderand nvestor n'ormation s PRITERRED STOCK TIMNSIT.R AGENT / REGISTRAR OF F1DCK Centraland South West Seniasinc, , E 0. Ilox 660164 Dallas,TX 752fM)1M SKAREHOLDER SERVICES The shareholder senias staff is available from 8 a m. to 5 p.m., Central Time, Manday through Iriday to answer any questiorn pu may ham if you have a question, write- , j Centraland South ht SenicaInc. Shareholder Senkrs Department E 0.Ibx 660164 Dallas,TX 752(60164 or call: 14KX) 527 5797 (Outside of Thas)/18004421718 (In Texas) We nrommend that you wrxi stock anificates by either registend or artified mall. 11RST MORTGAGE BONDS TRUSTEE The fint NationalBank of Chicago One first NationalPlaza MallSuite0126 Chicago,11.60670
- Richard D. Manella- 012) 407-1841 ADDITIONALINTORMA110N 1his regut is prepared primarily for the infonnation of wcurity holden, emnloyas and customers of the Company and is not transmittid in connection 1 witli the sale of any security or offer to sell or offer to buy any security.
Copie of this repon and the fmancial statements included therein and the Strurities and Exchange Commission Annual Report on Fonn 10-K are available generally to all grurity holders of the Company. A copy willle mailed to any security holder or other intensted party upon written request to C. Ta)ne Stice, Secretary, P. O. Box 2121, Corpus Christi, TX 78403-2121. jT'w v~h:lN -h\
/ A ,1) 41 RECYCLED PAPER CONCEPT FIBER BY BECKETT
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