ML20101S806

Annual Financial Rept 1983

ML20101S806
Person / Time
Site:	Comanche Peak
Issue date:	12/31/1983
From:	Farrington J TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC)
To:
Shared Package
ML20101S784	List: ML20101S790 ML20101S801 ML20101S806 ML20101S812 TXX-4403, Forwards Annual Financial Repts for 1983 for Facility CP Holders
References
NUDOCS 8502050650
Download: ML20101S806 (36)

Text

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TEXAS Umunes ELECUdC COMmNY 1983 ANNUAL REPOFU' EiffrRIC COMI ANY DIVISIONS DAUAS POWER & UGirr COMinNY TEXAS Etrrrnic service CournNY l l TEXAS RMER & UGirr COMinNY l

texas Urit.rrw.s GENERATING COMlWNY 0502050650 050124 PDR ADOCK 05000445 '

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TEXAS UTILITIES ELECTRIC attractions. The territory includes a COMPANY major part of the Permian Basin in Texas Utilities Electric Company, a west Texas, other oil and gas fields, wholly-owned subsidiary of Texas Util- major defense-related manufacturing ities Company, wa3 incorporated in industries and extensiw farming and September 1982.On January 1,1984, ranching areas.

Dallas Pbwer & Ught Company, Texas Texas Pbwer & Ught Company Electric Senice Company and Texas sents customers in 51 counties in Pbwer & Ught Company- formerly north central and east Texas. Included the electric utility subsidiaries of Texas are the cities of Carrollton, Farmers Utilities Company-merged into and Branch, Ining Killeen, Mesquite, became operating divisions of the Plano, Richardson,'lemple, Tyler, Electric Company alongwith a fourth Waco and 260 otherincorporated mu-division, Texas Utilities Generating nicipalities. The rich agricultural black-Company.The Electric Company is lands of central Texas, farming and engaged in the generation, purchase, ranching sections north and east of transmission, distribution and sale Dallas, part of the oil and gas fields of of electricity. east Texas and the Dallas-Fort Worth Dallas Pbwer & Ught Company Airport - the nationh largest airport senes Dallas, the nation's seventh - are all in the territory sened. This l largest city, as well as three adjoining area is also highly diwrsified with communitiesin Dallas Couny- light and beavy manufacturing elec-Cockrell Hill, Highland Park and Uni- tronics and substantialcommercial versity Park.1he area is a center for activity.

banking insurance, commerce, cultural Texas Utilities Generating Com-activities and regional distribution. pany is responsible for die planning Major industries include electronics engineering construction and opera-and aerospace manufacturingThe na- tion of all Eenerating stations and for tional headquarters of more than 1,300 planning and directing the dispatch companies are locited in Dallas, as and control of the transmission facili-are the regional headquarters of many ties of the Electric Company.

companies.

- Texas Electdc Service Company Texas Utilities Company has diree provides service in 48 counties in - other subsidiaries which provide spe-north central and west Texas.This - cialized senices at cost to die Texas area indudes Fort Worth, Arlington, Utilities Company System, including Big Spring Eastland, Grand Prairie, the Electric Company. Texas Utilities -

Midland, Odessa, Sweetwater, Wichita FuelCompanyowns a naturalgas 7.A - e, - -

reiis e#a 89 ether ie<orporeiea cities. eineti#e svstem eea ecueires. stores and delivers natural gas and provides FortWorth is a banking business and one of our widet nights..16ur industrial center.The area served be- other fuel senices for the generation pmple mmelmmaliaely after being aillat anda cmv aime outin the tween Fort Worth and Dallas is a of electric energy by the Company.

Incing rain, aplantithe tram- highly diwrsified complex of light in- Texas Utilities Mining Company owns bnnerauf ge lik>again.Many dustry, warehousing commercialde- and operates fuel production facilities

'h"'*' h' *h 8 "I S*'"' wlopment and recreational for the surface mining and recovery of lignite for use at the Electric Com-7heatm qudefun aletter writ.

panyh generating stations. Texas Util-en by a cmtomer h illmtmtalon the coner Other writta comments /un ities Senices Inc. provides financial, cm/omm an>idstmtaf on k/lating accounting and other administrative Pa9es senices to System companies.

OPERATING HIGHLIGHTS 1983 1982 Change Operating Revenues . . . . . . . . . . . $3,487,626,000 $3,237,664,000 7.7

. Operating Expenses Excluding Fuel and Purchased Pover . . . . $1,255,265,000 $1,206,275,000 4.1 Fuel and Purchased Power . . . . . . $1,617,809,000 $1,452,334,000 11.4 Fuel Cost per Million Btu ...... $2.24 $2.10 6.7

. C(instruction Expenditures . . . . . . $854,307,000 $858,683,000 (0.5)

Electric Plant : .'. . . . . . . . . . . . . . . 59,103,056,000 $8,268,898,000 10.1 Net Capability in Kilowatts * . . . . . 17,957,000 17,957,000 -

Peak Demand in Kilowatts . . . . . . 14,029,000 13,204,000 6.2 Electric Energy Sales in Thousands of Kilowatt-Hours . . 62,709,927 60,380,142 3.9 Customers' . . . . . . . . . . . . . . . . . . 1,788,347 1,695,863 5.5

• End oflear .

1983 Texas Utilities Electric Company Revenue Dollar WHERE IT CAME FROM HOWIT WAS USED Residential 35.8c .

Fue!&.

27.3C Commercial 48.3C Power Taxes 12.ic Afanagenmth Ldter . . . . . . . . 2-

- Other ; .

22.ne

' gy 5

g_3e s.ic Operahons . . . . . . . . . . . . . . . 4.

finanaalRmort .. . . . . . . . . 15

. Diredors . ~ . - . . . . . ~ ~ ~ ; 34 -

Industrial Depreciatior. _ Atained._ OMars - . ~ . - - . . - 35 Earnings, Senxe Ara 1Mqp .. . . . . . . 36 k'

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MANAGEMENTS LETTER /

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TO THE SHAREHOLDERS: One factor that historically has  !

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[H This is the first Annual Report of supported the effort to serve a grow- j

-. Texas Utilities Electric Company-- a ing demand for electricity has been f @' 2 - h new corporate entity formed with the responsible regulation in Texas. De- ,

Texas Utilities Company System's velopments during the year ra'. sed '

pl reorganization, which was effective uncertainties regarding the regulatory j January 1,1984. climate in the state.

j It is a single electric utility made A revised Public Utility Ref,ulatory i up of four divisions. Three operating, Act was adopted as part of the reg-I divisions - Dallas Power & Ught ular sunset miew by the state Irgis-Company, Texas Electric Senice lature. Changec included revision of Company and Texas Power & Ught procedures for recovering fuel costs Company- along with predecessor and establishment of an office of

_ companies have been providing public counsel. Some proposed electric service in Texas since before changes that would have been detri-the tum of the century. mental to elect.ic utility customers -

The fourth, Texas Utilities Generat- such as election, instead of appoint-ing Company, was formed in the ment, of Public Utility Commiscion early 1970s, when the Texas Utilities members - were not enacted.

Company System embarked on its These uncertainties, combined program to use lignite coal to gener- with inadequate rate increases ate electricity. The generating divi- approved for two operating divi-sion is primarily responsible for sions, contributed to decisions by two planning, engineering, construction major bond rating agencies to lower and operation of all power plants. the credit ratings of the Company's The new structure offers more op- first mortgage bonds from Triple A to portunities for efficiency and cost- Double A. We are disappointed by effectiveness in operations. It also these actions and are committed to reduces duplication of effort and of- maintaining and improving the fers increased financial flexibility. The Company's financial strength.

organization remains committed to The lowering of the ratings also the high standard of senice to cus- reflected industry developments that tomers that always has characterized were especially disturbing to utilities its operations. with nuclear power plants under con-Employees take pride in providing struction. These developments good senice to customers, knowing included cancellation of plants under that almost one-third the population growingcost and regulatory bu rdens.

of Texas depends on them for relia- Ucensing difficulties at specific nu-ble and reasonably-priced electric clear plants cast a shadow over the service. They take that responsibility nuclear industry, and as Comanche seriously. Because of their dedication, Peak's operation date grows closer, we are able to provide customers a the process for obtaining its operat-high quality of senice. ing license has become more Meeting that goal is especially difficult.

challenging in a senice area which Significant construction progress continues to experience steady eco- was made during the year at Co-nomic growth. Mainly because of the manche Peak. A number of major healthy economy of the service area, more than 92,000 new customers were added during 1983.

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. preoperational tests were completed $854.3 million, a slight decrease from

. on Unit 1, including hot functional $858.7 million the previous yeat

' testing of all major plant systems. long-term debt financing in 1983 Among other milestone events were totaled $142 million which included

delivery of nuclear fuel to the plant, $125 million of first mortgage bonds,

. licensingof 26 reactoroperators and sold at 12K%. The Company also afull-scaleexerciseof theemergency sold 650,000 shares of preferred preparedness plan in cooperation with stock for $64 million in 1983 and

' state a.xlcountygovemments.

- sold 5,795,300 shares of common

. Nuclear power is essential to the - stock to Texas Utilities for a total of nation, and Comanche Peak is es- $190 million. Fmancial plans in 1984 sential to the' service area. Plant include an expected sale in March of l licensing must be made less time- an additional 1,853,000 shares of i consuming and more predictable,. common stock to Texas Utilities for

. while still allowing public input and $66.6 million and the sale of $100

providing for public safety. _

million in first mortgage and collat-In the interim, we recognize the eral trust bonds in April. More long-

! critical nature of this process and term financingis planned in 1984.

. have placed high priority on doing Programs.to improve productivity ,

everything possible to obtain an op- - and control operating costs are con-eratinglicense for Comanche Peak in tinuing. Even with effective cost-a timely manner. reduction programs in place, rate

. Progress in use of lignite continued increases were needed during the during1983, the fifth consecutive l year and were approved for Texas

year more than 50% of the electricity Electric in December 1983 and for tused bycustomers was generated by Dallas Power in early1984.The in-lignite. Savings to customers had - creases were inadequate,' however, Tsurpassed $2.8 billion by year-end. and in March 1984, the Electric Com-In 1983, customers used a record pany filed a request for an 8% increase.

E number'of kilowatt-hours of elec- The internal changes which have . .

tricity and set a new summer peak _ taken place in the reorganization will i demand 6.2% higher than the 1982 - benefit customers through more effi -

' peak. The average residential cus ' cient operations. The transition was tomer used12,073 kilowatt-hours. madesuccessfullybecauseof the The average usage was slightly lower. dedication of employees, many of ~

' than in 1982, reflecting weather con- whom accepted reassignment to new

$ ditions and effective conservation by ' offices and locations. The spirit of qcustomers. . .

cooperation and pa'ie.a our em-The emphasis on helping cus-- playees showed m .de the changes Momers conserve energy through the much easier, and their efforts are JERRY FARRINGION Dsidential Conservation' Service. deeply appreciated chairman orthe Board t and load management programs - One aspect of oi .r operations hai and Chie/Exantive not changed - the dedication of '

i Energy continued in 1983.

Aid Program In addition, was introduced - a new; ' employees to ptoviding die reliable cto help customers who have severe electric energy necesary to sustain 1 financial hardships. .

- the good qualityof life in the area we

. The Electric Company's con-- - serve.

L struchonexpendituresin1983 totaled n ,

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bur of5ce staff uns attemely help- (

futand understanding during a my l diMa:h timein my life. Ipersonally '

thenkyou allagain bryourpa- l' tience and understanding scith my account:

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OPERATIONS PROVIDING QUALITY SERVICE temporary financial hardship or be-Providing quality senice to cus- cause weather conditions have caused '

tomers is a commitment that begins bills to be unusuallyhigh. Customer with planning that is aimed at prosid- representatives stand ready to help ing a reliable supply of electricity at a customers arrange workable pa>Tnent reasonable price. schedules.

It is continued with the efficient de- Under a "special friend' third-party sign, construction and operation of notification plan, a notice mn be sent generating plants to produce electricity upon request to a third partyif an for customers, as well as transmission arnount is past due. This senice is and distribution systems to deliver it particularly useful to the elderly and to homes and businesses. And itis their families.

carried out through day-to-day per-Energy Aid Program sonal contact between customers and An Energy Aid Program was begun 1983 Fuel Costs Per Million Btu employees.

in January 1983 as a means of helping At the end of 1983, sem.ce was ining presided to almost 1.8 million people with severe financial hardships [6 E EEOU5N

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The i esigned to help 5 o er e r n y r needy seruor citizens, people who are .-

. y M* ill or disabled or those whose financial

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Customers set a new peak demand setbacks make them temporarily un- '

of 14,029,000 kilowatts on August 15, able to pay for essential energ/ P 1]

1983. During the year, kilowatt-hour se sales reached a record 62.7 billion. ' ~

ar-end, the Company, its cus-About 55% of this generation was tomers and employees had contrib-fueled by lignite, which has been used uted more than $475,000 to the -

1 to produ more than half the elec-

"' ,dC program. More than 5,300 customers tricity prov,ided to customers in each had received assistance. 2"'

of the last five years. " '

in 1983, the average cost of lignite EMERGENCY PREPAREDNESS was $0.92 per million Btu. By contrast, Emergency preparedness planning the cost of natural gas averaged $3.74 is designed to maintain electric ser- .

per million Btu. The average cost of vice to customers during emergencies -

all fuel used in 1983 was $2.24. and to restore it as soon as possible 1983 Fuel Ma,x when itis interrupted.

CUSTOMERASSISTANCE An important part of the commit-Emergency and disaster prepared-ness plans outline responsibilities and g mg" --

ment to customers is making,ti as proside methods to mobilize em-convenient as possible for them to pioyees during emergency conditions.

communiate with employees about Miawernpim such Specialized equipment that includes as thelinanen andsemicanan shou n any aspect of their electric semce. In weather radar and communications fa- alue, help provide a high quality of that regard, telephone semce person- cilities also is available to assist in sen' ice to custornen nelin the Dallas and Fort Worth of- emergencies.

fices alone responded to more than 1.6 The Texas Utilities System Opera-million calls in 1983. tions Center, a part of the generating Average billing programs are of- division, acts as the North Texas Se-fered to customers to help even out curity Center for the Electric Reliability highs and lows in monthly bills.

Some customers need additional time to pay bills, either because of 5

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inspection . . I uns amazed at how uelleducated and wrsalshe uns \

on all topics of home energy. . All \

my questions uere ansuered thor-oughly and in laymank terms.'

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Council of Texas. In that role,it construction of energy-efficient build-monitors the generating msenes of ings, also pays off in dimet savings to s

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utilities in the North Texas area to customers. Further, conservation and make sure an adequate supply of elec- use of efficient equipmentlower the 1 growth in demand for electricity and x l tricity remains available.

l redu the need for new generating Record-setting Winter '

The dedication of employees to equipmentin the future.

. maintaining electric senice to Residential Conservation customers during the most severe Through the Residential Conser-weather was demonstrated in late vation Senice Program, free on-site -

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December 1983,when Texas was sub- analyses of household energy use u L ,

jected to a 13-day stretch of record- are offered. Energy specialists advise , jf """"

breaking cold. customers on what they can do to j .

A key factorin continuing reliable improve home energy efficiency, how '~~

senice during the cold spell was the much the improvements are esti- 6..  :

commitment of employees. Addi- matedtocostandhowmuchcustomers 0 tionally, lignite generation, the System- can expect to save on utility bills d,~ -

4 owned gas pipeline network and stra- if they act on the recommendations. M ta u a A tegically-kcated oil and gas storage fa- Numerous other consenation pro-cilities provided the necessary fuel grams and educational materials are  ;{r flexibility when commercial gas sup- available from customer represen- g .

tatives, home service advisors and plies were curtailed. Another impor-tant factor during the extreme cold was educational senices specialists. N'M a long-standhig equipment mainte- Infom1ation available through these nance program that provided substan- programs-and from numerous ~ ~

tial freeze protection at power plants. booklets and pamphlets - covers l

Customers also helped avert state- economical energy use pattems for r wide shortages of electric power by family members, free or inexpensive responding to requests for voluntary do-it-yourself methods for imprusing curtailment of all except essential use home energy efficiency, effective of electricity. home construction standards and cost-Texas Public Utility Commission effective equipment and lighting Chairman Alan R. Envin praised the selections.

efforts of employees in meeting the load Management emergency. It was the individual util- Ioad management activities include l

ity workers who spent their holidays the E-OK Bonus program, under working under extreme conditions which customers and homebuilders who really saved the system,' he said. are given incentives to install high-i "I assure you that I have a great new efficiency air conditioning units or heat mthermnditions actitateemer-gen 7 plans. Top to bottom umther respect for the people who work for pumps in new or existing buildings.

the electric utilities of Texas. The E-OK pmgram also has a goal of reducing the size of air conditioners

' l,I'r $"b!n dispatching /ne:e protection is addaf and CONSERVATION SERVICES Conservation pays dividends to installed in new homes by encourag- to pouer plant. and cntrs assist other ing construction of more energy. utilitia in npairing nunicane Nicia

! customers -in savings on their bills damage.

l and in the preservation of valuable efficient structures.

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of high-efficiencyelectricalequipment

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~ \"JC7"i  ; incentises also are provided to en- Production of lignite also surpassed 7 -

courage installation of thermal energy that of previous years. Mining opera-1 - '

storage systems by commercial, indus-trial and municipal customers to allow tions at three of the lignite plants-Big Brown, Martin Lake and Monti-j cooling equipment to be operated dur- llo- produced 28,776,000 tons. On ing off-peak periods. December 7,1983, the Company's 200 MjQ i

l Wj 't PRODUCTIVITY millionth ton of lignite was mined.

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Maintaining quality of sersice to Throughout all areas of employ-l

• ment, safety is a basic commitment Q' j ~~"7: p customers while holding operating costs as low as practical remains the supported by ongomg programs primary goal of programs to improve and recognition for outstanding Ol ,, achievements.

' productisity.

' Data processing innovations and Dedication by employees to safety expanded use of computers continue to led to a national record being set in save money and enhance productivity 1983 at the Monticello lignite plant at a i

through such programs as a Distribu. time when generation pmductisity e 7 tion Information System in Fort Worth was at record levels. On December I 27, the power department achiesed and Information Centers in Dallas and ,

Fort Worth. four million man-hours without a lost-The Distribution Information Sys. time injury- the most ever attained a tem makes it easier for distribution by a coal-fueled power plant

'" 2 engineers to gather and use informa- Reorganization

! tion; improves accuracy of cost esti- The reorganization of the Texas Util-mates, load forecasts, planning and ities Company System is a major step construction estimates, and reduces reflecting a commitment to efficient the time necessary to make compli- operations and oserall cost control.

catedcalculations. The reorganization broughtabout i The Information Centers are de- cost-savings in 1983 by allowing re- ,

signed to make the advantages of duction in the work force through computers available to employees normal attrition and an early retire-who do not deal with data processing ment program. During1983, while the on a daily basis. They offer training in number of customers increased, total the use of software products and employment was reduced by more terminals. than 350. j Production and Safety Records A number of productivity records were set during1983 by employees.

Ugnite was used to generate almost ution senices andproduc- 35 billion kilowatt-hours during the tivity are high-pdority items. Top to

' hottom:Imming consmurion tan-year, the highest annual total since the l niques through handsat training and Company began its maior lignite gen- j in school;chxhinginwntoryin a eration program in 1971.

plant main'enanx storeroom, and re-l pladng a substation transk>rmer 8 1 1

1 PIANNING FOR SERVICE Texas Utilities Fuel Company, the UT T "5 P l RELIABILITY Electric Company's supplier of natural

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"'~.-d fg1 (" s Long-range planning is a prere-quisite to providing a reliable supply of gas, has acquired such fuel under con-tracts expiring at intenals through #

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' 3 electricity at reasonable prices. An ex- 2003. Effective December 31,1983, the . 4 a ample of such planning, which is help- Old Ocean Fuel Company, formerly -

ing hold down costs to customers a subsidiary of Texas Electric,was

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today,is a program begun in the late merged into the Fuel Company. .

1960s to diversify fuel sources and re- Oil storage epacity available totals duce dependence on natural gas, the about 6.9 million barrels.The oilis r fuel once used to generate essentially used primarilywhen naturalgas sup- l all the electricity in Texas. plies areinterrupted orcurtailed.

Fuel Supplies Construction g' 7' ~, ' """ ME Resenes of relatively inexpensive Construction of new generating &

, lignite coal were under lease because plants to use lignite began in the late gy _

acquisition of the east Texas lignite had 1960s, and in the early 1970s, the  ; - -

o begun in the late 1940s. In addition, Company began buildingits Co- 3

! plans for the use of uranium, also a manche Peak nuclear plant.

low-cost fuel by comparison to gas, The major part of this construction hegan in the early 1970s. program has ended. Nine lignite- ' " N d,.; N *** J Because of this long-range planning, fueled generating units are in opera-g7 an estimard 845 million pmven tion, and Comanche Peak is nearing recoverable tons of lignite fuel are completion. Nqlki M

t available for use. Fourotherlignite units remain un- dhi The savings to customers from the der construction, scheduled for senice T:

use of lignite continue to grow, reach- between 1989 and 1991, to help meet 2 ing more than $2.8 billion by the end the gravth in need for electricity by of 1983 compared to the cost of the customers.

same amount of electricity produced Construction also began on a new by naturalgas. facility to house the System Operations Enough uraniumis undercontract Center, which will allow more efficient m for the first 17 years of operation of dispatching of the generation of elec-each Comanche Peak unit. long-term tricity from power plants. E ,

contracts for related fuel processing At least 25% of1983 construction .

_<- J senices other than disposal of spent expenditures invohed work on the s i fuel also have been signed. transmission and distribution system, M( ,

The Nuclear Waste Policy Act of much of it because of customer growth.

1982 authorized a plan underwhich T1 raining.sa49andproduairityare l the federal govemment will develop

! interim storage and permanent dis _ partners. Top to batom testing et/x-l posal facilities for spent fuel. Adequate storage for spent fuel is available on r dfoh$" in plant operations, and operation of the site for at least 17 years of operation, Distn'bution Inbrmation System.

j and this storage capacity can be l increased.

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Construction expendituresin1983, with its cost per kilowatt almost 30%

indudingan allowan for funds used below an awrage of $2,300 per kilo- e g 4 4 during construction, were $854,307,000 watt for comparable plants.

(exduding nudear fuel) lt is estimated The Company owns 87%% of

! that such expenditures for 1984,1985 Comanche Peak. Other owners are and1986 will be $881,000,000, the Texas Municipal Power Agency,

$894,000,000 and $1,248,000,000, 6.2%; Brazos Electric Power Cooper-respectively. atim, Inc., 3.8%, and Tex-La Electric The schedule for the generating units Cooperatim of Texas, Inc.,2Ve%.

underconstructionis: Comanche Peak Milestones Station - Unit Fuel I ttf) Da .The Comanche Peak nudear plant, 1,010,000* 1985 with its 2,300,000 kilowatts of gen- l Comanche Peak i Nudear Comanche Peak 2 Nudear 1.010.000* 1986 erating capacity, will be essential to cost or comanche neak <

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Twin Oak 2 Ne Ugnite 562.500* 1990 presiding a continued supply of relia-ble electricity to the Company's rigiiiiiii;ig~~gsegg l

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Martin take 4 Ugnite 750,000 1991 Customers.

' Net capability to the Electric Company During1983, significant progress P Kia feniaste/is] 1 Estimates Revised was made at the plant. At year-end, j During the 1983 annual review of Unit I was almost complete. l the construction program, schedule Milestones achieved during the year i changes were made affecting induded:

Comanche Peak and Unit 1of the The structural integrity test to ver- -

e

^

Twin Oak lignite plant. Based on cur- ify the strength of the containment ,

rent estimates, the first Twin Oak unit building. -

will not be needed until1989, and its The integrated leak rate test to en- / i

.. service date was deferred one year. sure the containment building meets He estimated fuelload date for design criteria for being airtight. pi - - -

Comanche Peak Unit I was re- Hot functional testing, a check of '

- - i scheduled from December 1983 to all major plant systems. 'C mid-1984, with the unit expected to be Awarding of operating license cer- _ - < V"E '" man in full service in early 1985. Operation tificates by the Nudear Regulatory  !

of Unit 2 is expected approximately 18 Commission to 26 reactor operators.

months after Unit 1. Delivery of fuel for Unit 1. i Comanche Peak UnitIwas 97% Full-scale exercise of the  ;

complete at the end of1983, but re- Comanche Peak emergency prepared- l mainingwork-such as painting, ness plan in cooperation with state electrical cables, documentation, final and county govemments.

inspections and testing activities -is Licensing Hearings Continue he comanchenuk nucAurplant taking more time than previously al- Further public hearings on the ap- came a number orsteps closer to op-I lowed for m scheduling. At the end of plimtion for an operating license for cration in 19s At top:the #rst 26 the year, Unit 2 was 65% finished, with Comanche Peak were conducted in nuctor operators to receim theirli-the owrall pm,ect j be,mg 84% 1983 by an NRC Atomic Safety and censes displav certi# cates. Bortom: a complete Ucensing Board. The ASLB has sched- '""* (""N"# P '# #'h' # **# #

The total estimated cost of "# # ""

uled additional sessions in 1984.

Comanche Peak also was raised All but one of the 25 contentions from $3.44 billion to $3.89 billion. Of originally raised by intervenors and the total, the Company's share is $3.31 the NRC staff either have been billion, or $1,640 per kilowatt. He cost dropped orfullypursued.

of Comanche Peak is among the lowest of the nation's nudear plants planned for service in the mid-1980s, u

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hankyou k>rthetemficshou:I 1 knmala kA Ikumalabout con-serving energy andIam going to .l remindmy familyabout consen:ing energy , . Ileamalabout pc>arr plants and thatyou shouldshut the dooruhmIgo outsideandlots of other things' f

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The remainingissue concems the energy sources and technologies to 'l h

construction quality assurance pro- improve reliability of electric service -

dj r gram. Management has been com- and lower its cost

• mitted to a strong and effective quality The Environmental Research assurance program since construction Center at the Big Brown lignite plant is began. During1983, this commitment a center for graduate-level study and ,

was reemphasized to all plant em- research carried out under the direc-ployees through a series of meetings tion of an independent committee of and printcommunications. university professors. These studies Several technically-qualified inde- have contributed to significant cost _

pandent groups have evaluated spe- savings and improvements in mining y' .

cific aspects of the Comanche Peak efficiency, land reclamation, environ-project-induding Sargent and mental protection and other lignite l Lundy, a consulting firm with exten- operations.

sive experien in the nudear industry The Electric Power Research In- - wF as an architect-engineer, and Cygna stitute,which is supported by the ':"~"

Energy Services, a Califomia-based Company and other electric utilities in - n consulting firm.These groups have the nation, currently has more than

"~~

conduded that Comanche Peak is 1,500 research projects underway. In .

being managed properly and built for addition, the work of the Texas Atomic safe, reliable operation. They have Energy Research Foundation, which is found no significant problems that helping develop nudear fusion as a would affect the safety of the plant future energysource,is supported. .J In 17te 1983, however, the AS expressed concem about the RATES des @ignAND REGULATION v Texas Electric applied for higher t ;

quality of the plant and asked for fur-ther assurances that the plant has rates in June 1983 and in December 6 been designed and built properly. The received an order from the Public j ' "d '

Utility Commission of Texas authoriz-Board requested that the Company file a plan to help resohe its concems. A ng an increase in operating revenues M of 6.1%.The rates were placed into * - m plan calling for further testing and effect in December. o. ~

analysis, preparation of detailed testi-mony and documented evidence and Dallas Pbwer applied for higher rates in July 1983. In January 1984, the 5 T

expansion of the independent assess-PUC issued an order granting an in-ment previously conducted by Cygna crease in operating reenues of about Energy Services has been presented 6.5%. Billing on the new rates began Management is committed to provid-in February.

ing the assurances the ASLB has re-The increases were the first for quested and beliews the plan will crivities at comanche /luk utre Texas Electric since October 1980 and full'Il thatcommitment *"id A' #* ""F AM P"'P""' ##

However, the uncertainties created the first for Dallas Power since March emergency plan etercise and, center a 19 81.

by tbese proceedings and related legal tour of the 1isitors Center is mnducta/

Texas Power received an order Batomc at the Encin>nmentalRe-and ngulatory developments are of from the PUCin June 1982 which smrch Center Axutalat the as concera.The Company cannot predict Broren lignite plant, c//ats on trildlife authorized an increase in operating what efft.ct these matters may have on are studia/

revenues of 5.8%. The rates were the projeced completion cost or ser-placed into effectin July 1982. l v date of the plant Texas Utilities Electric Company Research and Development filed a request for an 8.0% increase in I The Company is involved in on-going research aimed at finding new 13 i i

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Systemwide rates in March 1984.The after the effective date of the new Act, I PUC had specified,in its December noautomaticfueladjustmentclause 1982 order approving the System's would be allowed. Recovery of all fuel 9 reorgani7ation plan, that rate filings costs would be subject to PUC ap-ty after Janitary 1,1984, be filed on a pmval and would be part of base rates.

I 4;  ; combined basis for the Electric Each imestor-owned electric utility F Company. in Texas was required to file with the Rgulatory Act Amended PUC information necessary to estab-i

- In 1983, the state legislature ex. lish an interim fixed fuel factor to beco,me effective with September con- j

. . tended the life of the Public Utility Commission and made several sumption and to remain in effect until

• ,% amendments to theTexas Public permanent factors were established.

'/ Utility Regulatory Act of 1975.The No less than 12 months after imple-amended PURA became effective menting a change in fuel cost recov-

_* {1

~

September 1,1983. ery,a utilityis required to request reconciliation of any omr-recovery of '

Major changes affecting the electric utility industry included eliminating the fuel c' osts and may request reconcilia-4 ,, tion of any under-recovery of fuel use of an automaticfueladjustment clause. All rate changes resulting from costs. The rule provides that emer-fuel' cost changes'must receive prior- gency requests to change the fixed fuel i approval from the PUC after a public factor must be acted on within 30 days hearing. The legislation also created an bylhe PUCif unforeseeable circum-office of public counsel to represent stan s substantially change the cost of g fugl from the appmved factor.

e" ' f' residential and small comnjercial cbn-Dallas Power, Texas Electric and t sumers before the PUC.

i Construction work in progress is to Texas Power jointly filed the required infortdation and were granted an inte-

~

- "~ - e be an ex ptional form of rate relief..It

- < may be placed in the rate base if it is rim fuel factor. In July, applications necessary to the financial integrity of were filed for a new fuel factor to the utility and if the construction proj. become effectise in January 1984 ect has been planned and managed based on the Electric Company's esti-efficiently. mated fuel cost per kilowatt-hour dur-The Act sets certain time limits for ing1984. In December 1983, the PUC action by regulators on proposed rate remanded an examiner's report in the changes. It was amended to provide case to be amended with the stipula-for an increase from 125 to185 days in tion that recovery of fuel costs be j

- the period after filing of an application based on a historical test year adjusted for "known and reasonably predict-before new rates may be placed into Emptowes,attonpackagemate- able' changes. i

~

effect under bond.

On' January 12,1984, the PUC \

rialsin preparation br Eling a rate me. Bottom: data processing helps Fuel Cost Recovery Rule adopted its final rule relating to fuel impime e/Mciencyandholddown Developed cost recovery. The provisions of this a)sts m ma/zyphase ofoperation. Pursuant to amendments ruau,e to final rule are substantially the same as the PURA, the PUC in July 1983 thd emergency rule.The Company adopted an emergency amendment t cannot predict how this rule will be I

its substantive rules to provide that, furtherinterpreted or applied; i however, any significant delay in the l recomry of actual fuel costs may in-crease financing requirements.

('

l 14

1 9 FINANCIAL REPORT e

f i'

Contents: . .

. Mana,,gement's Discussion

and~ Analysis ~of Financial

. Condition and Results- - .

of Operations :. .j . . . . . . . . . . . 16 .

Statement of Income a . ; . . . . . . .18 '

Statembntof Source of Ftmds for .

~ Construction'. . . . . . . . . . . . . .:. 19 s

Balance Sheet . . . /. . . . s . . . . . . . 20

Statement of Retained Eamings . . .'22 -

i-

• L Notes t'o' Financial -

4

- Statements . . . . . . . . . . . a . . . . 23 a Accountants Opinion :. . . . . . . . . . 28

Financial Statistics . . . . . . . . . . . 30

. . Operating Statistics . . . . . . . . . . . . 31 -

- SupplementaryInformation .

~ Co'nce. ming Effects of ChangingL n Pnces ...............'..... 32-

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MANAGEMENT'S DISCUSSION AND ANAIYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

l I.JQUIDrIY AND h RESOURCES l Re primary capital requirements of the Company for preferred stock and 48% common stock equity. Similar 1983 and as estimated for 1984 through 1986 are as follows: ratios are expected to be maintained in the future. To 3933 3934 ig33 iggs preside for immediate cash requiiements during periods wm between long-term financings, the Company obtains short- i constnen expenditures - term loans from Texas Utilities, which had lines of credit (exdudingAWDC) $696,000 $713.000 $732,000 $U15.000 with commercial banks aggregating $300,000,000 at De-

. . 45.000 79.000 70,000 48,000 cember 31,1983. Re Company does not maintain separate sinking rund requirements . - 34.000 45.000 - 48.000 41.000 credit arrangements with banks or other lenders.  ;

raai . .. .. s775.ooo 5837.000 s848.000 s1.204.000 The Company expects to sell securities as needed, in-cluding (i) the anticipated sale to Texas Utilities in March For detail conceming major new construction work now in 1984 of 1,853,000 shares of its authorized but unissued progress or contemplated by the Company and commit- common stock for $66,550,100, Oi) the anticipated sale in ments with respect thereto, see Constmction April 1984 of $100,000,000 of first mortgage and collateral ne Company generates funds from operations sufficient tmst bonds,(iii) the possible future sale by the Company of

~to meet operating needs, pay dividends on capital stock up to 350,000 shares of preferred stock currently registered and finance a signifkant portion of capital requirements. with the Securities and Exchange Commission for offering Rese funds are deriwd Irom net income, depreciation, pursuant to Rule 415 and (iv) sales of additional securities

- deferred taxes and imestment tax credits. Factors affecting from time to time in amounts and types presently undeter-

' the ability of the Company to fund a portion of its capital mined. Although the Company cannot predict future regula-requirements from operations indude adequate rate relief tory practices and is to some degree exposed to fluctuating and regulatory practices allowing a substantial portion of economic and securities market conditions, it does not

-' construction work in progress in rate base, adequate de- currently expect any changes in trends or commitments preciation rates, normalization of federal income taxes, which might significantly alter its basic financial position or recovery of the cost of fuel used in the generation of ' ability to finance capital requirements. The new organiza-

- electricity and the opportunity to eam competitim rates of tion resulting from the merger should preside greater retum required in the capital markets. For 1983, approx- financing flexibility and achiese additional economies and imately 51% of the funds needed for constmction was gener- . efficiencies. (See Rates and Regulation and Note 9 to

~

~ ated from operations. _

Financial Statements.) .

Extemal funds of a permanent or long-term nature are - See Financial and Operating Statistics for additional obtained by the Company through the sales of common information.

.s oct k to Texas Utilities, preferred stock and long-term debt._

Re capitalization ratios of the Company at_ December 31, 1983 consisted of approximately 41% long-term debt,11%

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l RESUEr$ OF OrrJumONS . , ,

iOperating revenues lee increased $249,962,000 for Other interest charges were higher in 1982 as a result of

, . 31983 and $499,615,000 for 1982 primarily as a result of the the interest paid Ta-la on the portion of Comanche Peak remvery of higher fuel costs, inaeased rate levels and released by Ta-la and in 1981 due to higher interest rates l increased energy sales. Enery mnsumption is affected by paid to Texas . Utilities on higher loan balances.

imaterial variations in weather conditions.l Temperatures Net income for 1982 induded an increase of approx-1 during 1983 were relatively mild mmpared to the tem-- imately $3,400,000 as a result of the sale of the 2K%

1 peratures experien d during1982 and 1981, which were - interest in Comanche Peak. (See Note 8 to Financial

'relatively normal. (See Rates and Regulations and Operat- Statements.)

(ingStatistics.)? _ ._ .

The Company expects to pursue adequate and timely

' : Fuel and purchased power expense irEreased primarily; ~

rate relief in the future to offset the effects of increases in

~

= as a result of higher unit msts of fuel consumed and( ' ._  : the costs of prmiding electnc service.

mcreased generation (See Operating Statistics.) Operation The Company has prepared supplementary information j and maintenance expenses have increased as'a result of ' conceming the effects.of changing prices in compliance t inflabonary pressures on the mst of labor; materials and -~ , with the reporting requirements of Finanaal Amounting

!semces. In 1983, such inflabonary pressures were offset - Standards Board Statement No. 33; such information is J somewhat by cost mntrol measures taken by the Company ; " f included on pages 32 and 33.

and by a reimbursement lof approximately $17,000,0001 D from a munidpality representing water payments charged :

. j to expense in prior periods. (See Note 9 to Finanaal

? Statements.) Increases in taxes.other than income re-f ,

.s sulted primarily from increases in~ revenue'and property C based taxes.1 , m ._ ~s . . .

E increases in allowance for funds used during construchon U are primarily attributable'to the increase in the AFUDC ratei

, effective January 1982and increases in' the level of conb struchon work in~ progress of the. Company not allowed in L .

e rate base by regulatory authorities, and also for 1982 to the

? interest opitalized (net of tax) upon the assumption of the i i 2K% interest in Comanche Peak released byTex-la Electnc (Cooperativelof Texas,'Inc. (Tex-la) Otherm' come and L . . .

J deduchons -- net and related federal income taxes for 1983 ; ,

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~ '

$ )arelower than priorsears primarilybemuse'of the' gain.on t '

1. .1the sale'of the 2K% interest in Comanche Peak in 1982 and ~ -

" [ lthe expiration of income from Alma'for the construchon of V l

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• STA'IEMElVT OF INCOME ,

.=

b Year Ended December 31,

+ 1983 1982 1981 7housands of Douars j

~ J OPUW1NG REVENUES . . .. ...... 2.. .. ...... .. . .. . . $3,487,626 $3237,664, $2,738,049 '

.+> OPERENG EXPEkSES 1

" l Fuel and purdiased power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

~

. 1,617,809 1,452,334 1,143,770 >

Operabon ' ' . . . , u . . . . '. ' . . . . . . . . . . . . . . . . . ... . . . ..... , . . . . .. . . . 397,006 393,527 323,024 Mautenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228,277 223,247 192,885 Depreaabon . . . . . . . . . s . .. . . . . r. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . 191.944 179,509 167,856 Federal income taxesL(Note 6) :. . . . . . . . . . . . . . . . . . . . ... . .. . . .. . . . . ... . 232.216 224,085 237,067 .

h other than income ; . i . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . .. . . . . . -205,822 185,907. 167,472 7

s  ; Total operating e penses . . . (. . . . . . . . . . . . . . . . . . . . .... . . .. . .. .. . . , 2,873,074 2,658,609 2232,074 - -

I OPEIWING INCOME ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . ..

614,552 579,055 505,975 1

g a

m.,

? OmER INCOME).; i

^ Allowance for equity fdnds used duringmnstruchon . ~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,032 97,279 70,381

" Other income and deduchons -- net . . . . . . . . . . . . . . . . . . . . . . . '. . . . . i . . . . . . . . . .

J7,491 16.820 = 14,325 ;

Federal moome taxes (Note.6) ) . . . :. . . . c. . . . . . . . .... . . , e . . . . . . . . . . . . . . . . . . . . .

- (3,821) '(8281) 1(6.643) -

N Total other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,702 :105,818 - 178,063-

)',-

+

- i Tom. INCDME ; . . . . . . . . . . . . . . . . . . . . . . .' . . . . . . . . . . . . . . . ... .. .. ... ..... . . .... . . ~ 736254 '684.873 "584,038

+

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{.a., . _,, _ ,

~

_ t Interest on mortage bonds . . . . . ;. . ; . . . . . . . . .  ; 233,884 - i 202,707 L _ 157,238 ;,,,

, ( Inherest on other long-tenn debt d . i . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . n . . . . . . . . ; , , 12,315 , 14,291 '

14,451e

' Other interest a . L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g . . . . . . . . . . . 9,643 1 23,001c 20,465 .

- Allowance for bonowed funds used dunng construchon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,489)  :(38,765); ' (23,576) ' >

(Total interest charges . . . . c. . . . . . . . . . . ;. . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 215,353 1 202,134 . 4168,578

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' ^ 1 NEriNCoME'i. . . ... ............f.. [.~............,........................... . 520,901; K482,739 -- 1415,460 ?

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PRERRRED 81DCx DMDENDS . . . . . r. [. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 51.582 46.329 ' 46,329 ;

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- +.

/Ner INCOME Arnr.R F=uae.u Stock DMDENDS Y . . l. . . . . . . . . . . . . . . . , . . . . . . . . . . . . . $ I469,319. . $ 436.410  :$ 169.131, m . -

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See accompanying Notes to Finanoal Statements.

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- Teras Utilities Eledric Company STATEMENT OF SOURCE OF FUNDS FOR CONSTRUCIlON Year Ended December 31, 1983 1982 1981 7housands ofDollars c funds rROu OPERATIONS

- J Netincome .. ........ . . . . . .. . $520,901 $482,739 $415,460 -

- Depredation. . . . . . . . . . . . . . . . . . ..... .. .. .. . . .. . 191,943 179,509 167,856 Deferred fedualincome taxes- net . . . ... . . . . .. . 87 328 76,389 53,177

~ Federal imestment tax credits -- net i . . . . . . . . . . ... .. . . . 53,879 72,548 50,475

' Allowance for funds used during construction . . . .. .... . . .. . .. . ... (158,521) (136,044) (93.957)

. Total funds from operations . . . . . . .. ... . .... .. .... . .. 690,531 675.141 593,011

- less -- Dividends declared.

' Preferred stock . . . . . . . . . . .... .. . . ... .. ... 51.582 46.329 46,329

' Common stock . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. . . . 283,392 241.381. 205.656

- Total dividends declared .. . . . . . .. ... ... . . .. . . . . 334.974 287,710 - 251.985 1 Net funds from operations . . . . ..... ..... . ..... .. .... .. . 355,557 387,431 341.026

' FUNDS FROM RNANCING

. ~ Salesof securities-Mrst mongage bondA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 142,079 -300.414 218,507

Other long-term debt . . -. . . . . . . . . . . . . . . . . . . . . . . . . .

- 4,215 3,677 Prefen6d stodc . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... .... ....... . ... 64,366 - -

L Common stock ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,895 105.056 150,000-

Retirement ollong-term debt . . . . . . . . ........ . ................ ............. (34,456) '(23,653) (15.327) s  ; increase (decrease) in notes payable to Texas Utilities (parent) . . . . . . . . . . . . ......... (34,660) 39,230 (99,600)

/ Net funds from financing.. . . . ........ . .... .. ... .... . .. .. . ... 327,224 425,262 257,257 f.

(OmER SOURCES (USEs) OF FUNDS [ _

- _ Changes in working capital, admiing notes payable and long-term debt due currently:

Cash in banks and temporary cash imestments . . . . . ' . . . ... ... ........ . ..  ;(3,020) _ 56,963 (55,403)

Wmunts receivable - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... (32.298) .. (21,722) (34,388)l 3, Irwentories ! . . . . . . . . p . . . . . . . . . . . . . . . .- . . . . . . . . . . . . . . . . . c. . . . . . . . . . . . . . . .

. 54,656 - . (28,012) (24,836) 3 Acoounts payable . . . . . . . . . . . . . . . . . . . . ... ............................ .. . -9,366 - 3,707 . 6.948-i Taxes accrued c. , . . . . , . . . . . . . . . .' . . . . . .... . . . . . . .c..... . .... . ' 21,259 (1,132)- 35.406 n Mvance payment on' sale of electric plant (Note 8) . . . .' . . . . . . . . . . . . . . . . . . . . . . . . . . -

(90,420): 90,420

Other-net 2 '

.. . . . .... . . .. . . . .. .... ... . ..... .. .. ... . m ... ..... ' 27,356 c s (6.345) < .20,606; 7 . . ( Net change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... .............. . 77,319 (86,961)- 38,753

Nudear fuel '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... ...... '(45,381) . (29,551) _4,271 M of electric plant (Note 8) ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ... ........ -- 36,220 -

L Other - net . . .'. .' . . . .,. . . . . . . .- . . . . . . . . . . . . . . . .. .. ....... .. ..... ....... , (18.933) -  : (9,762) (5,554)

' ~

, Net other sources'(uses) of funds = . . . . . . .......... . . . . . . . . - . . ... 13,003: -(90.054) 37,470 L

Total' ........ . ............. .... ... . .......- ... . . . ..... $695,786 $722.639 ; $635,753 -

< CONsTRUCHON EXPENDrrUREs -

Electnc plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $854,307 $858,683 u Allowance for funds used duringconstruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... (158 521) -(136.044) _ (93,957)

$729,710

_ l CONSTRUCHON EXPENDrIURES (excluding allowance for funds'used during construction) . . . . . . . $695.786 ' $722,639 $635,753 '

See accompanying Notes to Finanaa! Statements.

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< Teias' Utilities Electric Company

' BALANCE SHEET-1

w. -

m De mber 31, a: ,

Assers -

1983 1982 l

= 1kmsands ofDouars Eu:cnuc Puwri

In. servi ::

s A "3 Ikxiuction . . ! . . . . . . . . . . . . . . . . . . . . . . . . . . ........ . . . .. . . . $2,759,413 $2,750,855

< : llransnussion . . . . . . . . . . . . . . . . . . . . . .. . .. . .. .. ... . . . ... 1.014,929 - 946,138

~

~

V Distribution . . . . .'. . . . . . . . . . . . . . . . . . . . . ... .. . . . . .. ... .... 1.917,418 1,733.862 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. . . .. . . . .... . 215.216 191,757 .

J~ 1 Total 2............................... . ..... ..... . . . ... . . ... 5,906,976 5.622,612 L Construchon(work in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . ... . ... 3,037,817 2,529,366 U Nuclear fuel ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . .. ... .. ... . . . 156,088 110,707 .

... . ... . .... . 7,175 6.213

~~ . Held lor future use . , . _.. .. . .,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

e ~

. 3 . ; Total electri,: plant . . . . . .. . . . . . . ............... . ... , ....,. .. . . .. .... 9,108,056 .8,268,898

+

ilAsmrumnLhi lepreciahon . . .... ... ... ......... .. .... ... ... .. ...... . ...... . 1,687,098 1.539,486 .

r Electnc pant,less accumulated depreaahon . . . . . . . . .. . . . . . . . . . . . . . ............. 7,420,958- 6,729.412

? ilsvEsmEvrs-at oost .... ..... ...... ......... .......... ... ...... ...... ........ .. 3,552 -- 3,366.-

. Cuned Assers5 _

iCash in banksb . . . i . . . . . . . . tu . . . . . . . . ... ... .. ......, ....................... 12,587 12,567 :

. 4 Temporary cashknestments at cost . . . . . . . . . . . . . . . . . -. ........ ........................ 3,000? +

g 5peaal deposits . . . . . . . . . . .3 . c. . . . . . . . . . . . n . . . : . . . . . . . . . . , ; . . . . . . . . . . . . . . O. . . . . . . . 27,076; '17,464;

. J" Aaounts' remnable. s . >_

Customers . . . #. . c . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .- . . . . . . . . . . . . . . . . . . . . . . 207,771i 170,814 ;

' 4 Other1. ; w.f.4 . . n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . s : 17,275 ' (21,892l

._ _ Alkmance for (Whin accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . J(8,999) : '. (8,957)!

~

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iW (Iment6 ries'-. generally at merage cost L :s -

^

. - - ! Mahnals and supplies; . . . . .' . . J . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . <. . . . . . . . . . . . . . . ~ ' 50,194 250.841:

?. JFue . .

J  ! i ..

1 59.807 - - 113,816 4 y

N Sl Workini stock . . . . . . ., . . . . . 4 . . . . . . . . . . . . .? .14,783 g funds M . . . . i . . . . . . . . . . . . . . . . . . . . . . ; . . . . . . . . . . . . . . . : . . . . . . . , , . . . . . . . . . . . . .

Other cunent assets . . &. . .- . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . l . . . . . . . . . . .. . . . . . . . . . . .

c38,724 -

. . . . . .E 28,745 4 1 38,821 &

. + . -

1 422,218 h446.003 -

, n, c'Ibial . ' cunent assets a  ; . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .v. . . . . . . . . . . . .x

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4 DERMED DEBUS . . . . . . ............. i i........M ..,'.'..... p....).f........ p....I[.. 50,603 S 17,726;

. f,,n. - iTosal..,...'..'........J.u..................w....'...'-..........'............

$7,897,421 ! . $7,196,507L

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December 31, t

J IJAmuREs 1983 1982 Thousands ofDollan CAPrmuZAnON Common stock -- without par value (Note 3):

Authonzed shares-180.000,000 '

. . Outstanding shares - 1983, 90,947,000; 1982. 85,151,700 . .. . ... .. . .. $2,108,450 $1,918.555 Retained eamings (Note 4) . . . . . . .. . . .. . ... . . . . .. .. 932,260 - 746,333-

' Total common stock equity . . . . . . . . . . ... .... . . .. . .... ... 3,040,710 2,664.888 '

-Prefened stock (Noe 3):

. Not subject to mandatory redemption . . . . . . . . . . ..... . . . ... . .. . . . 629,779 600,109'

' Subjectto mandatoryredemption . . ..... ..... . .. . . . ... .. 34,696 -

. long-term debt. less amounts due currently (Note 5) . ... . . .. . .. .. . .. . 2,592.152 2,496,773 Totalcapitali7ation . . . . . . .... ... .. ... ... . ... . ... 6,297.337 5,761,770 CURRENr IJABluBES

. Notes payable.-Texas Utilities (parent) ..... .. ..... ... . . . .. .... . ......... 37,570 72,230 L Long-term debt due cunently '. . . . . . . . . . . . . . . . . . . . . . . . . . . . ... ....... . .. . . .. 45,000 34,000 ' ,

Total (to be ,dinared) . . . . . . . . . . . .. ... .... .... .. ... .. ........ .. 82,570 106,230 Acmunts payable. . . J Affiliates ' ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .. .. ...... . ............... 129,521 .107.139

' Other '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................ ... ..................... 59,411: 72,427.;

. - - Dividends declared . . . . . . . . . . . . . . . . . . . . . . ........ .... .. ............ ......... ... 13,314 .11,582 : .

Customers deposits . . . . . . . . . . . . . . . . . . . . . . . . . . .. ... ..................... ....... 29,541 25,425:

Taxes aacrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,416 i  : 161.157 L

= Interest accrued . J. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  : 71,747 ;67,168 :

Other cunent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' 41,621 29,139 '

g- - Total cunent liabilities ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610,141 ~- 580,2670 -

~

RESFJNE FOR INSURANCE AND CASuALIIES . . . . . . . . . . . . . . . . . . . . . . . . . ..........c............... - 11,747 - 9,003

. n -

AccumutArED DEFERRED FEDERAI. INooME TAXES ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... 485,150 .l 404,547 i -

UNAMORUZED FEDERAI. INVESTMENr TAX CREDUS I -.......,................. ................... < 493.046  : 440,920 s

CouvrrMEM3 AND CONnNGENCES (Notes 2 and 9)

MIbtal . . . . . . . . . . . . . . . . . . . . . . . c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . T $7,897,421 ' J $7.196,507 %

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See accompanying Notes to l'inancial Statements. :

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Tems UtilitiesElectdc Company STATEMENT OF RETAINED EARNINGS Year Ended December 31.

1983 1982 1981 7housands ofDouars BAIANCE Ar BEGINNING OF YEAR . ... .... . . . .. $ 746,333 $ 551204 $487,829

- Aoo-NerlNCOME . ... . ... . .. .... .. 520,901 482,739 415,460 Total . . . . . . . . . . . .. ... ... . . .. . . . 1267.234 1.034.043 903.289 DEDUCr Cash Disidends Prefened stocic

$ 4.50 series ($ 4.50 per share per annum) .. .. . . . . 335 335 335 4.00 series ($ 4.00 per share per annum) . . . . . . .. 280 280 280, 4.56 series ($ 4.56 per share per annum) . . . .. . .. 610 610 610' 4.00 series ($ 4.00 per share per annum) . . .. . .. . . 440 440 440 4.56 series ($ 4.56 per share per annum) . . . . . . . . . . . ... . . . . 296 296 296 4.24 series ($ 4.24 per share per annum) . . . . .. ... . . . . .... 424 424 424 4.64 series ($ 4.64 per share per annum) . . . . . ...... ... ... . .. . 464 464 464 4.84 series ($ 4.84 per share per annum) ..... ...... ....... .. 339 339 339 4.00 series ($ 4.00 per share per annum) . . . . . . . .. ...... .... . 280 280- 280

' 4.76 series ($ 4.76 per share per annum) ... ... . .... .... ...... . 476: 476 476 5.08 series ($ 5.08 per share per annum) _. . . . . . . . . . ......... ... 407 407.- 407-4.80 series ($ 4.80 per share per annum) ' . . . . . . . . . .. ........ ..... ... 480 480. 480-

- 4.44 series ($ 4.44 per share per annum) . ............. . . ... ..... .. 666 666-' 666 7.20 series ($ 7.20 per share per annum) . . . . . . . . . . . . . . . . . .......... 1,440 1,440 1,440 7.80 series ($ 7.80 per share per annum) . . . . . . . . . . . . . . .- . . . . . . . . . . . . . . . :2,340 . ;2240- 2240' 8.92 series ($ 8.92 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . 1,784- 1,784 1,784

• 6.84 series ($ 6.84 pershareperannum) . .......... ........ .. . ..... '1,368 1,368 1,368:

7.24 series ($ 7.24 per share per annum) . . . . . . . . . . . . . . . . . ........... '1,810 - -1,810 1,810 L 7.44 series ($ 7.44 per share per annum) ; . . . . . . . . . . . . ............. .... 2232: 2,232- .2232 7.48 series ($ 7.48 per share per annum) . . . ......... .. ........... .. 2,244 2244 2244 8.20 series ($ 8.20 per share per annum) . . . . . . . . . . . . . . . . ...... .... .... 2,460 2,460'  : 2,460 -

8.44 series ($ 8.44 per share per annum) : . . . . . . . . ... ........... ..... '2,532- 2,532 2,532 . _

932 series ($ 932 per share per annum) ' . . . . . . . . . . . . . . . . . . . . . . ...... 2,796 2,796 - 2,796 936 series ($ 936 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,808 '2,808 - 2,808

,8.68 series ($ 8.68 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 2.604- :2,604 2.6041 8.16 series ($ 8.16 per share per annum) ....... .. ....... ........... 2,448 ' 2,448 ^ ' 2,448 -

832 series ($ 832 per share per annum) ' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,496 ' 2.496 2,496

= 8.84 series ($ 8.84 per share per annum) ..... .... ..... .... ....... .. L 2,652 2,652 : 2,652 :

? 10.92 series ($10.92 per share per annum) .................... . .......... 3276- l 3,276 -  : 3,276 :

10.12 series ($10.12 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '3,542 3,542 2 3.542 10.08 series ($10.08 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,725 -- -: 3

- 1132 series ($1132 per share per annum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,528 -- u-Common stock (per share- 1983, $3.19; 1982, $2.86; 1981, $2.59) . . . . . . . . . . . .. -282376 241381' 205.656'

. Total cash dividends . . . ..... .. . ..... ... . . ... . ...... . 333,958 287,710 ' 251,985 #

1.016 - - -

. . Dividends other than cash (Note 1) ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -

1 Total dividends - -

........ ..... .. ..... ..... 334,974 . 287,710 251,985 4 Transfer to common stock account (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100.000.

.Totaldeductions .............. ....... ......... . ..., ...... ... .. 334.974 287.710- 351.985 ~

lh!ANCE Ar END OF YEAR (Note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 932260 $ 746.333 - $551,304 -

See accompanying Notes to Financial Statements.

^

- 22 .

?

{.

fy . .

l lbcas UtilitiesElectric Company  ;

J NOTES'IO FINANCIAL STATEMElVIS l E L SmMNbCMr ACCOUrmMG PDUCES '

I

$ Merger--Texas Utilities Electnc Com'pany (Company), a . Allouance Abr Funds UsalDuring Constmdion - Al-

. .w holly-owned subsidiary of Texas Utilities Company (Texas ' lowance for funds used during construction (AFUDC) is a S Utilities), was incorporated under the laws of the State of _ cost accounting procedure whereby amounts based upon n'Ibras in September 1982, in anticipation of a revision of . interest charges on borrowed funds and a retum on other

~

s the wiir- hal structure of the Texas Utilities Company ' capital used to finance construction are charged to electnc System (System);Such revision involved the' merging of plant. 'Ihe accrual of AFUDC is in accord with established

? the electric utility subsuharies of Texas Utilities - Dallas - accounting prachces of the industry, but does not represent Ibwer & Ught. Company (Dallas Pbwer) Texas Electnc current cash income. Effectne January 1982 and 1981, the

Servi Company (Tecas Electric) and Texas Pbwer & Ught.. Company has capitalized AFUDC at a net of tax rate of 9%

t Company (Texas Pbwer)-into the. Company with the . and 8h%, respectiwly, compounded semi-annually, of ex-

.. merging comparues thereafter becoming divisions of the penditures incurred, ex pt for that portion of construcbon

, 7 Company. No other Tecas Utilities subsidiary was party to . work in progress allowed in rate base by regulatory au-the merger; howevec certain funchons which were per-_ thorities. 'lhese rates were determined on the basis of. but formed by such ~other subsidianes.will be camed out by a L - are less than, the cost of spital used to finance the

- lourth division of the Company responsible for engineer construcbon program. Effective January 1984, the Company S ing, construchon and operation of all generating facilities. began capitalizing AFUDC at a net of tax rate of 94%.

'Ihe merget which constitutes a tax-free reorganization, _ Depreciation - Depreciation is based upon an amortiza-became effechve with the commencement of business on : tion of the original cost of depreciable properties on a

? Januaryl,1984.L _ _ . . . .

straigil t-line basis over the estimated service lives of the u 'Ihe Financial Statements presented herewith include the' properties. Depreciation as a percent of average deprecia-i combined statements of Dallas Pbwet Texas Elecinc andi . ble property approximated 3.5% for 1983,1982 and 1981.

" L'Ibxas Pbweg adjusted to' eliminate intercompany items, as if . Faleral/ncome Tares -The Company is induded in

. ithe me'rger had been effechve during all periods presented. ~ < the consohdated federal income tax retum of Texas Utilities e 'Ihe merger has been accounted for in a manner similar to : and subsidiary comparues, and federal income' taxes are t a pooling of interests.1 a ., allocated to all subsidiary companies based upon taxable V Dispositarr ofSubsidiary - Effechve with the close of ; income or loss. Deferred federal income taxes are generally _

G $ business in December 1983, Texas Electric paid Texas Util-j provided for timing differences between book and taxable O Lities,'as a porbon of its quarterly dividend on its common ; fincome; such differences result primarily fro n the use of L

' i stock, all of the outstanding common stock of its subsidiary, ' liberalized depreciation and accelerated cost rectnery al-

! Old Oman Fuel Company (Old Ocean) Old Ocean wasi lowable under the Intemal Revenue Code. Inwstment tax i then merged with Texas Utilities Fuel Company (Fuel Com- ' credits are being amortized to income over the estimated

pany) 'Ihe Finanaal Statements presented herewith include service lies of the properties. (See Note 6.)

iOld Ocean prior to the disposition; all interoompany items a Reserve forInsurance and Casualties - The Company, as w >and transactions have been eliminated in consolidation;In ; ' allowed by regulatoiy authorities, has a reserve for major Jall' periods presented, Old Ocean had no effect on net.  : uninsured losses and claims. Effective January 1984, as

-income and the balance sheet amounts for Oki Ocean . prescribed by regulatory authorities, the Company discon-(were not material. (See Note 2.) . .. .. . _ . _

tinued additions to the reserve.

, ' Bectric Pkint - Electnc plant is stated at original cost. .

. Jihe cost of property additions charged to electric plant .

) includes labor and materials,' applicable overhead and -

' payroll-related costs and an allowance for funds used during .  :

, construebonn 12,=Amums . . , . _

i f'Ibcas Utilities provides common stock capital and shortz pany owns a natural gas pipeline system, acquires, stores (term financing to the Company. Texas Utilities has three and delivers fuel gas and provides other fuel services for

other. subsidiaries which perform speddixd services for

the generation of electnc energr, and Texas Utilities Mining ;

% the System Companies, including the Company: Tecas Utiff  ; Company (Mining Company) owns and operates fuel pro-

. ities Servi s.Inc. (Servi Company) fumishes finanaal, - duction facilities for the surface mining and recovery accounting and other administrative services; Fuel Coma - of lignite.

. 1 s

5-

, 23 sh

1 NOTES 'Io FINANCIAI. STAEMEMS (Continued) l

2. Amunits-(conduded)

The Company has entered into agreements with Fuel term notes of Fuel Company and of Mining Company

< L Company to procure certain fuels and related servi s and through payments described atxwe. Such notes mature at with Mining Company for the procurement and production various dates through 1999 and hase interest rates ranging of lignite: payments are at cost for the services receised from 8.50% to 12.20%. i

,i land are required by the agreements to be *at least equiv- In January 1984, Fuel Company sold an additional J alent in the aggregate to the annual diarge to income on $46,000,000 of 12.20% senior notes due 1990. 'lhe Com- i the bools of Fuel Company and of Mining Company. 'lhe pany is, in effect, obligated for the principal and interest on I

- Company is, in effect, obligated for the principal, these notes. i

$530,480,000 at December 31,1983, and interest on long-.

3.'ComeON AND PREFERRED 9:0CES Redemption Pri itr Share (before addingaccumulated Shares Outstand ng Amount dividends)

December 31. December 31- Esentual 1983 1982 1983 1982 Current ' linimum Thousands of Dollars Common stock- without par value; authorized 180,000,000 shares . . 90,947,000 85,151,700 $2,108.450 $1.918.555

' Preferred stock - cumulative, without par value; entitled upon liquidation to

, , $100 a share; authonzed 17.000,000 shares:

!.  ! NotSulyed to MandatoryPM"mm

. $ (50 series . . . .......'... ,.. . . 74,430 74.430 $ 7,443 $ 7,443 - $110.00 $110.00

100 series (Texas Ibwer) .. . . . . .... . . .. . 70,000 70,000 7.000 7,000 102.00 102.00

' 436 series (thxas Power) . . . . .. . .. .. . . . .- . 133,786 133,786 13.379 13,379 112.00 112.00 100 series (rezas Dectric) .. . u. ., . . .. . . .. 110,000 110,000 11,000 11,000 102.00 102.00 -

U 156 series (Texas Dedric) . . . . ... . . . . .. . 65,000 65,000 6,563 6.563 : ' 112.00 112.00 434 series '. . . . f. . . . . . . . ... . . .. . . . . 100,000 100,000 10,081 10,081' 103.50 10330

' 164 series . . . .. . ... .. ... .... .. ... . . 100.000 '100,000 10,016 10.016 10325 103.25 J184 series . .. .. ..  % .. . .. ... . 70,000 70.000 7,000 7.000 101.79 10139 s  : 100 series (Dallas ibwer) ...i. .. . . . .., . . . , . 70,000 -70,000 7.049 7.049 103.56 103.56

' '476 series . . ... .. . ..... . . . . .. . . 100,000 100,000 10,000 10,000 102.00 102.00 5.*3 series .. . .... . . . . . . . . . . .. . 80,000 80,000 8,0M 8,004 103.60 103.60 i 180 series . . . . .. ,, . . .. . .. . , . . .. 100,000 100,000 10,009 10.009 ' 102.79 10219 444 series . . .. .. . . . .... . . .... . 150,000' 150,000 15,061 . 15.061 102.61 . .102.61

-720 series . . . .... , ,. . . . . . ... .. . . .. . . 200,@0 200,000 ' 20,044 - 20,044 105.01 ' 103.21 -

z*... - 300,000 - 300,000 ' 30,030 730 series . . . . . .. , ,, .. . . .. . . . ..  : 30.030 105.20 10325 8.92 series .. . . .. .. . .... ... ... . . 200,000 200,000 20,076 20,076 10533 103.60 6.84 series . . ... . ... .. .. .. .. . ... . . ... 200,000 200.000 20,022 20,022 - 10176 103.05

7.24 series . .. ........ . .. ...... ... .. .. . . .. . 250,000 250,000 25,113 25.113 105.23 103.42 -

7,44 series . .... . ..... .i; . .. . 300,000 . 300,000 30,006 30,006 10126 102.40 :

c 7C series . . . .. . . ... .. .... . . . .. 300,000 .300,000 , 30,073 30,073 104.82 ~ 102.95

' 8.20 series . .. .. . ;. . . .. ,. ... . . . .. ... . . 300,000 L 300,000 _ 30.108 30,108 .10739 : 103.29' 1 8.44 series . . . .. . . . . ... ..... , . . . . .. 300,000 300,000 - 30,046- 30.046 107.40 ' 103.18

~ 932 series . . . . . . . . . . . . . . 300,000 300,000 29,625 - 29,625 106.99 10233 y . .. . ... . . .

300,000  ; 300,000 - 29,625' 29,625 f, 936 series . . ... . . ,, ... ... . . ,. . . . .

29,550 - 29,550 107.02 10234 L 8.68 series . . . . . . . . . . . . . . . . . . . ,. . .. .. . .. . . . 300,000 - 300.000 s. 106.26 :101.92 h, 4 8.16 series . ... . .. .. .... .. . .. . ... .. .. . 300,000 - 300,000 29,655 29,655 - 106.12 - 102.04 832 series . . . . . . . . . . . . ' . . . .... . . . . . ... 300.000 300,000 29,655 29,655 105.88 101.00 s y ; 8.84 series . .. . ... . .. .. ... ... . . .. ... . 300,000 300,000 29,591 29,591 108.17* 102.05

~ 10.92 series ,L . .. .. .. .. . .. .. . . . .. . 300,000 300,000 29,670 - - 29,670 110.92* 102.73 ~

...M 10.12 series ; .. .. .... . . .. .. . . . .. .. . . 350,000 - 350,000 34,615 ' 34.615 110.12* 100.00

- 11.32 series . . . . . .. . ... . ... . . . .. ... . . . . 300,000 - 29,670 4- 11132* 100.00 ~

M L 'Ibtal -. ., ..... . ... ... . .. . .... . .

6323,216 6.023,216 $ 629.779 $ 600,109 Sulped to MandatoryRedernphon 350,000 $110.08' $100.00

( $10.08 seriest' . . . . . . . . . . . . . . ... . ..

- $ 34.6g 5 -

' Redemption may not be effeded currently through certain refundmg operations "Annuall4,000 shares mandatory mdoiviin at $100 per share co.nmencing April 1,1989, with non-cumulative option of the Company to redeem an J additional 14,000 shares annually at $100 per share.

124i s

n.

.w4 e -

y.; NorES To FINANCIAI STATEhiMIS (Continued)

3. COMMON AND Eiu.muum STOCKS-(Concluded) y The Company issued and ' sold shares of its authorized stock account.

? common stock to Texas Utilities as follows: September 1983, he Company issued and sold shares of its authorized

• 1,775,000 shares for $61,225,000; August 1983,20,300 preferred stock as follows: May 1983,300,000 shares of shares foi; $669,900; March 1983,4,000,000 shares for $11.32 preferred stock for $29,670,000; and March 1983, i $128,000,000; September 1982,1,700 shares for $55,000; 350,000 shares of $10.08 preferred stock for $34,695,500.

- March 1982,3,500,000 shares for $105,000,000, Nommber No shares of the Companyh common or preferred stock 11981,'800,000 shares for $24.000,000; July 1981,1,500,000 are held by or for account of the Company, nor are any L. shares for $40,500,000; and March 1981,3,000,000 shares shares of such epital stocks resersed for officers and ifor $85,500,000; . . ,

employees or for options, warrants, conversions and other

- .. In Nommber 1981, the Company transferred rights in connection therewith.

$100,000,000 from retained eamings to the common iRETAINED EARNINGS RESUUCDONS i he Companyh articles of incorporation, the mortgages, that the Q)mpany shall not pay arry common dividend L as supplemented, and the debenture agreements contain . which would reduce retained eamings to less than one and e Tpraisions which,' under certah (nnditions, restrict distribu- one half times annual preferred dividend requirements.

. tions on or acxtuisitions of its common stock. At December . He mortgage restrictions are based primarily on the re < '

31,1983, $77,081,000 of retained camings were thus re- placement fund requirements of the mortgages.De restric-'

stncted as a' result of the praisions'of such articles of tion contained in the debenture agreements is designed to o

' incorporation. . maintain the aggregate preferred and (nmmon stack equity

.The articles ofjncorpor'atiori restriction prmides in effect - at or abo e 33M% of total capitali7ation.

t 5. IDNG-TERM DEIFT; less amounts due currently . <

MaturityGroups - Jinte' rest RalEGroupe Dewmber 31, To1 From -

From To :1983- !1982 7housands of Dollars :

? Fast mortgage bondsi! 43 , . . ..

;i 1984 f 1988. [ 3H% 12 % ~ . ,, .. .. . . . . . .. . ..... . . . . .., , - $ ' 121,500 -.$' 165,500 -

T1989 ? 1993 ( 4 % ) ;44- ., ... . .. . ... .... . ., .. ...... . . ., . .- . 69.000 ' 69,000 z

1994s 1998 54h

6% e .... .. . ...... .. . . . ..... . ;174,000 - 174,000 '

,. . ., .. ..,, y 1999 2003.{74 . 9% ' . . . . . . . .. . .., ...., ,. . ...... .. . . . ... m 365,000' 365,000 0 2004: 2006 a 8K 3 ;104 . . . ... . .. .. .. c. ... . . ... . . ..... y700,000 700.000 l 2009 ._ 2013- f 9% ' .17M - ,. .. ., .. <. ,. . . . ... .. ... , , , . ....... ... . ... ~ 850,000 - 725.000 i t

Ibilution control series;7 A

~

' 2 011 . .s 2012l 10! ,

1134 . . ... .. . , . .

110,000~. 110,000f

~

~- '

Funds on d positwith trustee .. .. .., ,.... . , . ... . . . ...... ..... . ,, , . . J (16,079) ._

, i Sinkingfund debentures *r 1985: >

-1989 7 44 / l 5% J ... - ... ... c.r.. .. . ., .. . . , . . . ... . -27,7611 --

'19932 41994 f 6% .

<7% ,. .... ., . .. .. . . ,, . . .. .... . .. ... ., , ~ 34.373 . .4 -

U Total , ..K. . . . , . .. .. .. . . ... .. .. . . . , ... ,. . ...,, , . .... .... ... .., 2.451.634 .: 2.292.421 _

i

$ bilutioncontiolresenue'bondsF , . .

_ 12001' y '2009-- 5.70 . 17% : . . . . . . . . . . . .. . . . .. . . . . ...... ,. , , . . :160,000 - 160,000 :

. Funds on deposit with trustee . .... ..,.. .. . ., ,,.. . . .. . . . , , . .. .. .. . . . - (4.856) - - (4A56) ~

f '

- Total h. . . . . . . . . . . . . -,4 . .. .. ,, ..4 . . . .. . . . .. ..,. ..., , , 155.144 15s.141 .

i j $inkingrunddeben'ures*i; t

' ' ll965 y -1989 C 4h ' -5%.,...... . . . . . . . . , . u ..,.. . ... --

27.851 Vl993 -  ? l994 ? 6 % ' 7% ' . . . , , , ,, .... . - .. . . .. ., ,. . . . .

34.739-11 beat i.. #. . o.. . . ... , . . ... .... .., ;. . . .. .. .. ... . , . . . . '62,590 '

i Ur-u,64 premium and discount ., .- . .. .... .. ... . . . o . . . . . . . .. (14.626) (13.382)

,  ! Toiat iong+rm delx less amonn:s due'cunently .s. .. ... . . ... ..... .. , ,, , .. $2.592.152 ' $2.496.773 e

. ' fin June 1983, the Cornpany collaieralized its outstanding sinking fund detuttures by depositing first inortgage bonds with the trustees of such debentures, effecthely

~

^ i rnaking sum debentures of equal rank with the outstanding first mortgage bonds.

c>:

> i p , e g > '

a

E 1 NOTES To FINANCLU STATEMENTS (continued) i i 5, IDNG-TERM DEBT, less amounts due currently-  !

' (concluded) . .

1 In December 1983, the Company issued its first series The total amounts of sinking fund debentures autho- j i of bonds under a new mortgage. On January 1,1984, the rized in the debenture agreements have been issued.

. Company assumed the mortgages and all of the first The Company's first mortgage bonds may be issued in mortgage bonds (Bonds) of Dallas Power, Texas Electric additional amounts, without limitation as to the max-L and Texas Power and such Bonds will continue to be -imum thereof, but limited by property, earnings and

! secured by a first mortgage lien on their respective . other provisions of the mortgages. None of the long-

- ' properties. The Company has also assumed all of Dallas term debt is pledged, held by or for account of the issuer, Power's, Texas Electric's and Texas Power's other long- or held in its sinking or other special funds. Substantially L term obligations. .

all of the electric plant is subject to the lien of the i Sinking fund and maturity requirements for the years mortgages.

1984 through 1988 under long-term debt instruments in

' effect at December 31,1983 were as followsi

• . sinking . Mimmum Cash

. Year 1 > Fund (a) Matunty Requirement (aXb)

. Thousamis of aviars

'1984 . , . . . . . . . $14.837 -$45.000.' $45,000 L 1985 . . ... . . . . . 15,001 45.270 45,896

1986 . .. ... .. 15.000 . 40.000_

41.000 .

,  : 1987 .. . .. . . 14.535. - 22.000 ' 23.085

'1988 . ... . . 14,750 . 22.500 23,800

0) Exduding requirements satisfied prior k) December 31.1983: $2.060.000 for 1984. -

- ~' $U94.000 br 1985. 3820,000 br 1986. $535.000 br 1987 and $320,000 br 1988.

" (b) other requuements may be satis 6ed by cert 6cahon of property edditions at the rate

~ '

(f 167% ci such requirements, eicept for sixteen issues at 100%.

16. FEDERAI. INCOME TAXES ~

The details of federal income taxes are as follows:

Year Ended December 31.

1983 1982 1981

._ } , 7housands of Dollars .

Charged to operating expenses-i 4 Cunent i . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J. . . . .. . . $ 96,009 $ 84,357 - $124.858 Deferred - net i .

4

. Differences between depreciation methods and liws . . . . . . . . . . . . . . . . . . . . .......... . .. 61,159 - 56.774 52.611 -

~

Certain capitalized construction costs . . . . . . .. . . ................. .. .............. . 11.215 10,178 8.956-Other.............?.........,........................ . ..... ........ ... . 9,954 228 167

Total....~...........u................................... ... ..... . . 82.328 67,180 - 61.734

Investment tax credits - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.879 72,548 50.475 ;

ETotal chaiged to operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232.216 224.085 237,067 h Charged to other income:--

=

Current:..'................................................ .................... 3,821 ~ (928). '15.200:

Deferred - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 9.209 (8.557)1 LTotal charged to other income . . . . . . . . . . . . . . . . . . . . . . . . . . ................... .......... 3.821 ; 8,281 . 6.643 '

r s Z Total lederel income taxes . . . . . . . . . . . . . . ..... m ..... ... ........ ... ......... $236,037 s232.366 $243,710

~

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, J 4.L.y.

Nmts To FINANCIAL STATEMENTS (continued) o . 6. FEDERAL. INCOME TAXES -(mnduded)

Federal income taxes were less than the amount computed by applying the federal statutory rate to pre-tax book income

' as follows:

Year Ended December 31.

1983 1982 1981 Thousands of Dollars

' Federal income taxes at statutory rate of 46% . . . . . . . $348.191 $328.949 $303.219 Reductions in federal income taxes resulting from:

1 Allowance for funds used during construction . .. ... . . . . .. . 72.919 62.580 43.220

- Depletion allowance . . . . . . . . . . . . . . . . . . ... 27,406 23,618 14.066 Amortization of inwstment tax credits . . . . . .. . 10.930 9.791 8.392 Other . .. .. . . . . . . 899- 594 (6.169)

Totaireductions . ... . . .. . . , 112,154 96 583 59.509

. Total federalincome taxes .. .. .. . . .. .. . . .. . . . $236.037 $232.366 $243.710 '

Effectiw tax rate . , .. . . ... . . .. .. .. . . . ... . 312 % 32.5% 37.0%

7. RETHtEMENT PIANS -1983 1982 The company has retirement plans covering substan - 7housands of Douars tially all employees. The costs of the plans are determined Actuanalpresentvalueof accumulated benefits-

by independent actuaries and are funded by the Company. - vested .. .. ... $241,754 $214.280 as accrued. The costs of the plans, induding amounts Nonwsted . .. . . . .. 19.740 ~ 17,344 capitalized, approximated $34,688,000 for 1983 (induding - Total . ......,.. .. . $261.494 $231.624

$2,428,000 associated with a one time early retirement Net fund assets . . , ,. . .., $262.486 - $196.691 -

programl $28,907,000 for 1982, and $24,799,000 for 1981.

l As of the latest annual valuations in 1983 and 1982, aC- An assumed rate of retum of 7% was used in determining the value of

' cumulated benefits and net fund assets were as follows: aaumulatedbenefits.

8. SAIE OF Etzermc Pimrr in January 1981, Texas Power completed an agreement to . tion be gisen to reducing such participation to 2Vs%JIn'

sell a 4M% undivided interest in the Comanche Peak . February 1982, Texas lher concuned in the Tex-la request 1 station, nuclear fuel and associated transmission facilities to - by agreeing, subject to regulatory approvals and completion ;

Ta-la Electric Cooperatise of Texas. Inc. (Tex-lal with : . of Tex-lah long-term financing arrangements, to assume-

. such' sale subject to regulatory apprwals and Tex-la's ability : . the 2K% ownership interest released by Tex la. In May

to obtain long-term financing arrangements. Texas Pbwer . = 1982, following regulatory approvals and completion of the : '

, received approximately $90,000,000 from Tex-la in con ' long-term financing arrangements, Texas Power completed nection with this agreement for that portion of the cost of. ' the sale of a 2R% interest in the Comanche Peak station,

. the plant and related facilities recorded through December ' nudear fuel and assaciated transmission facilities to Tex-la, 31,1980. Commencing in January 1981, Tex 7t a paid its pro E ~ assumed ownership of the 2K% released by Tex-la and rata share of the mnstruction costs of the facilities. In ' ' refunded approximately $66,000,000 for that portion of y ' January 1982, Tex-la notified Texas Pbwer that it was unable

~

. costs and interest expended by Tex-la allocable to the 2K% R

- to obtain long-term financing in an amount sufficient to , interest so released. (See Management's Discussion and s .

. support a 46% participation and requested that considera . ' Analysis of Financial Cor.dition and Results of Operations.) :

o 2, . 27 c- -

T,__

y' A

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~ MT.

P NOIES m FINANCIAI. STAMUNIs (conduded)

• ?? f, .+,

g~ 291COnaernHMS AND COrmMGENCIES z For major new construchon work now in progress or of portions of Ta-lah entitlement to capacity and energy

tcontemplated, and ~ commitments with respect thereto, see from the Comanche Peak station in declining amounts o~

Construction. . . . . . .

over the first eight years of commercial operation of each y y j ne Company has. entered into mntracts with public _ generating unit. Under the agreement, the Company is

'g ~ tagenoes to purchase coohng water for use in the generation required to make annual payments to Tex-La comprising a L [of elecinc energy and has~ agreed, in effect. to guarantee the .

pm rata share of operating costs plus a epital charge on 9 3 principal and interest on1 bonds issued to finance the reser- Ta-las net imestment appliable to the portion of Tex-Ias -

? voirs from which. the water is supplied. At December 31, entitlement assigned. (See Note 8.)

< 1983, the Company was' obligated for $52,310,000 principal The Company is involved in a proceedir.g before the

- 1 amount of such bonds, which mature at vanous dates Atomic Safety and Ucensing Board (ASW) with respect to

- Lthrough 2011 and have interest rates ranging from 5K% to the Companys application for hcenses to operate the Co-1 R 9E'lhe Company _is required to make periodic payments manche Peak nuclear generating station. In December.

s pequal to such principal and interest for the years 1984. .

1983, the ASW issued a memorandum in which it indicted

" that charges made in the proceeding had raised mncems ;

l through 1988 ~as followsi $4,406,000 for 1984,' 54,397,000 for -

L ~ f l985; $4,383,000 for 1986, $4,387,000 for 1987 and - about the design of the Comanche Peak station and re ; .

quested further eviden be submitted.'the Company has-J* ito$4,387,000 for 1988. In' addition, the Companyis obligated pay lcertain variable costs of operating and maintaining filed a plan with the ASW to provide the information L y the reservoirs. Total payments, including amounts cap-; necessary to satisfy the ASWh concems on design ade ;

A 'itahzed under such contracts, for 1983,1982 and 1981 were ' quacy. The Company is not able to predict the impact, if

$4,784,000, $4,806,000 and $3,184,000; respechvely. In any, of this matten or of related legal and regulatory de- ~ ,

2 '

3: (July 1983l the' Company received regulatory approval of an wlopments, on the li nsing schedule of the Comanche '

s /agreementwith a municipality for that municipality to as ; Peak station; arrf delay, howevet may increase the cost of. -

4 . Tsume all contract rights'and obligations in connectica with : the station and the related finanang requirements of the J

, 4 $108,845,000 remaining prindpal amount of bonds issued : LCompany. . m .

i for s:milar purposes which had previously been guaranteed Vlhe Company is involved in vanous legal and admini m;c by the Company; the' Company is, however; contingently, .istrative pro edings whidsin the opinion of the~Comi , -

bliable in the event of default by the municipality.L . . _.  ; pany, should not have a material effect upon the financial -

~

s

" i The Company entered. into an agreement with Ta-12 -

position ~or results of operationsJ q iwhereby the Company agreed to purchase an assignment -

1 A,CCOUNTAlflT OPINION _

y -

[w iTsas Utilities ElectncCom' p any:) -

'7"

" ~

, lWe hadexamined the balance shMt of Texas Utilities Electnc Company as of December 3(1983 and 1982'andlthe ' relates ~

l % statements'of inmme, retained eamings and source of funds'for construdion for each~of the th'ree years in the pe'riod ended -

~

v L Demmber 31,1983. Our examinahons were made in acmrdance with generally accepted auditing standards and, axualingly, ; -

f A induded such tests of the accounting records' and sudi other auditing procedures'as.we considered necessary in the !

~L fdrcumstancesd .

i . 3 .~ . n ._.... ..

. . .._.. t

@. 4 E ln our opinionithe financial statements referred to above present fairly the financial

? ~

y b T period ended December 31,1983, in conformity with generally accepted accounting prindples' applied oli a consistent basis after ? y l

% 4 giving vetroactive effect to the merger as described in Note I to the finanaal statements.- '

w ~

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• _ . DEIDI'ITE HASKINS & SEliS .

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L CERilFIED PUBUC ACCOUNIANTS -

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March 21,1984 :

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F m l TotalKikmmLI:n Sales Number of Customers Average Kikmatt-Hour Use

(&1 lions dKMH) ~

(MurEndin 7housands) 1%r Residential Customer 72 ' 1800 - 13500 g 64 - 1600 - 12000

.- 56 1400 . 10500 48 -

1200 9000 t . :40-  :-1000 7500 L.

w _ _ - _ _ _ .

36 : -800: 6000 24 a "J i600 4500 E _ _ _

=_ _ _ _ _ _ _ _ _ _ - _ _ _ _ _ . _ . _

16.:: L.400 - 3000

'. 8 200 - 1500

- 79.c ,80 .81 1:82.! : 83. . - . 79 180:  :

81_ - 82 83 79 80 81 82 83 4

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- iTexas Utilities EledrifCompany:

l War Ended December 31,

.c- . ,

e 1983 1982 1981 1980 1979 I l

L'Ibou. Assen end d year (thousands) . . . . f. . . . . . . . . .... $7.897,421 $7,196,507 $6,517,159 $5.839,502 $5,207,392 Q_;  ; ,

g c3 c

-3 Eurnue Powr end d year (thousands) h . .:. c. . . . . . . . . . . . . . . . . $9,108,056 $8.268,898 $7,439.982 $6,736,196 $6,026,546 AccumhL*d depieciation end d yearM . . . . . . . . . . . . . . . . . . . . . . 1.687,098 1,539,486 1,377,923 1,226,564 1,086,957 Construchon q=vi% (indudmg allowance for funds used during iConstmchon)l . . . . . . ._ . . . e. . . . . . . . d /. . . . . . . . . . . . . . . . . . . . 854,307 858,683 729,710 705.902 730,549

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c % .. I . G > .g-CArrmuzmON end dyear(thousands)? :h, '

Long-term debt f. . . ffcd . t. . . h . . . . . . . . .'. . . . . . . . . . . . . . . . 132,592,152 $2,496,773 $2,231,502 $2,039.476 $1,914,492

" PM stodi=

• n '

Not'subjed to mandatosy redempti6n {. . . .d . . . . . . . . . . . . . . . . . 629,779 600,109 600,109 600,109 535,824 )

Subject to mandatory sedemption .T4 . . . . . . . . . . . . . . . . . . . . . . ' 34,696 -

Common stodc equity ?. . . . . .i .bi. . /c.1. . . . '. . . . . . . . . . . . . . . ..

3,040,710 J 2,664,888 : 2,364.804 2,051,329 1,782.426-

~

M'Iblall.). . .I . . . . . .'. . . . . . .' .2. . t. . . . . . . . . . '. n . . . . . ; $6,297,337 .$5,761,770 , $5,196,415 . $4,690914 $4,232,742 '

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EMBEDDED IMIUtEST COST ON IDNo. TERM DEBT end d year [ . O.p. . .-, ,9.7% 19.5% 8.8% 7.9% 7.5%i z ?

EMBEDDED DMDEND COST ON PREFautED S10CK end d year . . . . . . . .

8.0%{ J7.7% 7.7% 7.7%' . 7.4%

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• LNerINcoME(thousands)?chh.y,,. p,l.r,......L........e...... i$520,90ln J$482,739; $415,460 : $350,223 $260,085 > 9

! CAsu DMDENDS DECMRED ON COMMON S10CK(thousands) ,..m. . . . , $282,376 L l $241,381 ? i $205,656 " $167,224i $148,144; w- +. 4 , , - n,_ .

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'C 1 RAno oE EARMNbS 10 ftXED CHARGESN...$ . . . . 2. .1. i'. . . . . . . 3.9 :  ; 3.9 - = 4.4 ; 4.0 - 13.6

' SuertEMENou. Rxno w EARMNGS 10 FIXED CHARGESb............. 7 3.51 ' ' r 3.4 13.7- 3.4 132 - -

. Auf#ANCE FOR FUNDS UsED DURIN(h CON 5mVCHON'AS PERCENT & ? .

/ EARNMCS 10 COMMON 510CK $ . . . . . . . . i E . . . . Z .' . . . . . . . . . . . 33.8% i 631.21- _25.5% -  : 25.1% = 26.8%i l i

• . RcrURN ON AVERAGE COMMON $10Cli Eouny . . . ; .i. . . . c. . . n . c;. . 116.5% 17.4% - ' 16.7% 16.0E- - 13.0 5 l 4 Ner FuwDs FROM OPERanONs M PERCENT OF CONSmOCnON ~ ,

0 g" , EXPENDrhURES (eldudmg akMence for funds used k .

j 51.1%1 - 53.6% 1 53.6% 53.1% - - 43.7% i 1du, ring ~ construction)M

%.,= s. . .ri;:. 6 d. . cM. . . . . . . . . . ; . . . . . .

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M in billed b CGT1pafly OII Senior.M d aNiM Mpa! des wilich

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'l pamde semeesllo.the Company. (See Note 2 to Financial Statements.)i  ; d s '

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Teras Utilities Eledric Company OPERA 11NG S'IATISTICS m Year Ended December 31, 1983 1982 1981 1980 1979 Ettenuc ENERGY GENElWID AND PURCHASED (mwh)

~ Generated -net stabon output . . . . . . . . . . . . . . . . . 67,706,594 64224,726 62.447,413 62,865,641 58,051,429

- Purchasedand netinterchange .. . .. .. . .. .. . . 343,581 371,190 ' 91,091 56,388 75,695

. Total generated and purchased . . . . . . . ... . ... 68.050,175 64,595,916 62,538,504 .62,922,029 58,127,124 Company use, losses, and unao:ounted for'. . . . . . . . . . . . . . 5,340248 4,215,774 . --4,166.327- 4,422,762 _ 4,001,684

^ ~ '

'Ibtal electnc energy sales . . . . . . . . . . . . . . ... ...... 62,709,927 60380,142 , 58372,177 58,499.267 54,125,440

- ' 1 FUEL Mac FOR Erzenue GENERADON Gas................................ .. .......... - 42.9% 44.4 % 146.4% - 49.0% 48.6%

-Oil.............................................. 1.7 ~ 0.6 -  : 0.2 0.1 1.4

~. fugnite . .y . . . . . . . . . . . . . . . . . . . . . . . . ... ............ 55.4 - 55.0 53.4 - 50.9 50.0

'Ibtal................-........................... 100.0%L 100.0 % 100.0 % 1 -100.0 % 100.0 %

' Etrenue ENERGY 5AtrS (mwh) .. . . _ _ _ _

Reraiential . . . . . . . . . ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c20,162,506 f l9,945,087z_ 18,676,240 E 19,844,409 17,394,402 Ovuuindd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ' '17,366,563 E 16,475253 il5,383,162 614,683,104 13264,436

- Industrial '. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . 18,690,077017,526,412J17,992,261%17,581265L 17,275,859 s 1 Gowemment and muniapal . . . . . . . . . . . . . . . . . . . . . . . .  : 1,790,476l 1,730,273 f L1,692,1061 1,796,988 1,669,726

. : Total general busmess . . . . . . . . . . . . . . . . . i. . . . . . . . . . 58,009,622 I 55,677,025 !? 53,743,769 T 53,905,766 : 49.604,423 Other elecinc utilities :. . . . . . . . . . . . . . . . .- . . . . . . . . . . . . . . c . . L 4,700,3051 14,703,1173 !4,628,408 4,593,501. 4,521,017-( Total'elednc energt sales,. . . . . . . . . . . . . . . .' . . . . . . . . . . '62,709,927 2 60380,142 Y 58,372,177i: 58,499.2671 54,125,440 w

~

- OPERADNG REVENUES (thousands)1

. _ j ; w ..s l ? _. f s

, Residential . . . . . . . .. . . . . . . . . . . . . . . . . . '. . . . . . . . . . . . . . j . . . . ; $1,306,912 j $1237,632 $$1,044,761 h$ 877,555 ? $ 672,340 -

- 2Cunuin dJ.......;n............... ................. 998,362/ l 911,487 M778,N)8 f 590,921 = ' 488,170 l industnal . . . . . . . . . . . . . . . . . . . . .. . . . . . . c. . . . . . . . . . . . . 1 0 808,016 i 1745,243 i 7 659,6781 1482,919 : 419224 Gowemment and municipal : . . . . . . . . . . 4. . . . . . . . . . rc. .Y. ;104,730 5 195,673i C 83,077 7 z 68,396) 54,565 l 4

tTotal general business . . . . . . . . . . . . . . . . . . . . . . . . . . g. 3,218,020 T i 2,990,035 ] 12,565,524 ? E2,019,791: )1,634,299?

L Other electnc utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . J . . . . . . . . 202,387 s190,727< &161,9980 "123.188 5 '105,306 N ~ . .

[ Total from electnc energy'salesi . . . . .. i. . . . . J . . . . . . . . 13,420,407M 3,180,762N 2,727,522 I 1 2,142,979) 31,739,605

- < Othef operating ' revenues ~ . ; . .'. . . . . . . . . . . . . . . . . . . . c.1. . ( ' # 67219? ' 56,902C ' 310,527J E 30,878 ; 15,657 -

~

1 Total operating revenues . . . .. . w.3. . . . . q. . m . . . 5$3,487,626s $3,237,6643 $2,738,0490 $2,173.857 J $1,755,262

EtrenueCuslousRs(endofyear); 3 'u tl i , 7. D aj [u ..2_

W i Residential : . . . . . . g. . r. . '. . ~. . . . . .u. . . . . . . . : . . ._ . . '. . . ; . . . #1,556,760? ?1,477,097W1,421273 ? 11,356,651 ,1,287,701

? ~, M Cunniadal M; . . . . . . . . . c. f. . c, . . . ; p ._ . . . . . . !. . 4. . . . ' (198,548, j187,065 ? 7177,269) (171,495 '164 291 1-  ? Indus' i rial b . . . . l. 2 : . . . . . . . . . . ; . . . . . i . . ; a. . . .s . .' . . ,122,761i N 21,478 ) ~220,692 / 119,590 ? _ 18,654 '

< ' e ' ! Govemment and municipalp . . . . . c. p.; . . .:. . . 1y. .L . . . j ' 110210FW10,1485 ' Y10,263 } ,110,488T 11,257-p'(, ,

h1 0therj Total general business . . . . . . . . . .'. . .'. . . . . . . . s; .G.O elednc utdines ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .;;. . .

p1,788279 [ hl,695,788j it,629,4974 f 1,5582241 l 1,481,903

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s 9 ,. ;f. ibi.aleledriccustomers n........................... ,

1,788,347? ' 1,695,8631 i 1,629,5753 it 558,304 - i 1,'481,983 -

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197,9451 6205,30h@H 213,905

& - dweihng units not induded in number of customers . . . . . . . . . . ;, . . -

2223,960 ' ; 240,164 -

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u Q Electric =ensrgy sales'(mwh)M, . . . . . . . . . . . . . . .. . . . . . . . . . . . ( 2,660,5641. . . 2,316,308 M2,848,997e 2,918,794 ' 3,076,399  !

p .g Operating rewnues (thousands) ~. . . . . . . . . .. ............< ' t $68, .,121 ?$68,0351 i$64,016 :

$48,813 $48,400

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. SUPPLEMENTARY INFORMATION CONCERNING EFFECTS OF CHANGING PRICES Unaudited information fumished in compliance with the productise capacity that might be incurred in a future reportingrequirementsof Anandal AccountingStandards period.

Board Statement No. 33, Rnancial Reporting and Changing Depreciation on the constant dollar and current cost Prices (FASB 33) follows. Re Statement indicates the need basis was determined by applying the Company straight-for experimentation in providing information about the line depreciation rates used for financial accounting pur-effects of changing prices. Such information is intended to poses b the appropriate indexed electric plant amounts, help readers better unc'erstand the impact of inflation on and is the only income statement item that has been the Company. Because the information is presented on an restated from the Rnancial Statements. In compliance with experimental basis, it should be viewed with caution. Cal- IASB 33, no adjustment has been made to federal income culation of the information inherently imches the use of- taxes.

assumptions, approximations and estimates and, therefore, Under rate-making rules prescribed by the Public Utility the resulting measurements should be considered in that Commission of Texas, only the original cost of electric plant mntext and not as precise indications of the effects of -. is recmerable through revenues as depreciation. Herefore, inflation. The effects of. changing prices are not recognized the excess of the cost of plant stated in terms of constant for income tax or rate-making purpc,ses; therefore, the dollars and cunent cost owr the original cost is not supplementary information should not be interpreted as recmerable through rates as depreciation and is reflected

adjustments to eamings reported in the Mnancial as Adjustment to Net Recoverable Cost of Electric Plant Statements. _

The Company beliews, based on past experiences, that it Information ccwm:ng the effects of general inflation will be allowed to recaer the imestment in electric plant (constant dollar) was determined by comerting historical - when replacement of facilities actually occurs.

cost amounts into dollars of equal purchasing power; as -- During periods of inflation, the holders of monetary measured by the Consumer Price Index for All Urban'- assets suffer a loss of general purchasing power while

. Consumers.; _. .

- holders of monetary liabilities experience a gain. The Information conceming changes in specific prices (cur- - amount shown as Gain From Decline i_n Purchasing Pbwer rent cost) represent such changes in electric plant from the .  ; of Net Amounts Owed reflects the net of these two items

~ date costs were initially incurred to present, and differs and is primarily attributable to the substantial amount of

' from mnstant dollar information to the extent that the n L long-term debt which has been used to finance electric specific prices have increased at a rate different than the plant. Since depreciation on this electric plant is limited by

_ general rate of inflation. The current cost of electric plant - regulation to the recmeryof historical costs, a holding gain

. was computed by indexing the existing historical cost of - on debt is not allowed and recmery is limited to only the -

plant by the Handy-Whitman Index of Public Utility Cons embedded cost of debt capital. To reflect the results of rate .

struction Costs for the South Central Region and other : . regulation, Gam From Dedine in Purchasing Pbwer of Net

! appropriate indicies. Such current costs are not necessanly Amounts Owed is offset by the Adjustment to Net Re .

representative of the replacement cost of the Companyt 1coverable Cost of Electric Plant.

L y

6 32-

SUMMARY

OF Ner INCOME ADJUSTED FOR EFFECIS OF CHANGING PRICES

= YEAR ENDED DECEMBER 31,1983 Historical Cost Reported in Adjusted for Changing Prices Finanaal General inflation Specific Prices Statements (Constant Dollar) LOtrrent Cost)

I Thousands of Dollars . herage 19W Dollars

- Operating revenues . . . . . . . . . . . . . . . . . . .. . . $3.487,626 $3.487,626 $3,487,626 Operating expenses (a) . . . . . . . . .... .... .

2,873.074 3.080,344 3.097,711 (Operatinginmme. . ..... ..... . . ,

614,552 407,282 389,915 Other inmme . . . . . . . . . . . . . . .. .. . .. . .. 121,702 121,702 121,702

Totalinmme . ... . .. .......... . .. .. . . " 6.254 528,984 511,617 Interestcharges . .. . .... ... .. .. ... . .... . .. _, .353 215 353 215353 Net income . . . ...... . . . . . . . . . .w.. . .... . . . . .

$ 520,901 $ 313,631 $ 296264

? Increase in specific prices of electric plant held during the year (b) . . . . . . . .

$ 223,174 Adjustment to' net recaerable cost of electric plant . . . . .. . $ (55.517) 211,079

~

Effect of general inflation on electric plant . . . . . . . . -. ... . . ... . (472,403)

~

Effect of geneml inflation in excess of increase in specific prices of electric plant after

. adjustment to net remerable cost . . . .... . ... .. .. (38,150)

Gain from dedine in purchasing power of net amounts owed . . . . . .. 133,489 133,489 Net change in purchasing power :. . . . . . . .~. . . . . . . . . . . .. .. .. $ 77,972 $ 95.339 l(a) Indudes depreaabon amounts of $191,944 for historical cost, $399,214 for constant dollar and $416,581 for current cost.

(b) At December 31,1983, electric phat' net of amumulated depreciation, was $13,036,303 for current cost and $7,420,958 for historical cost. ~

~

COMPARISON OF SEI.ECTED FINANCIAL DATA ADJUSTED mR EFFECTS OF CHANGING PRICES

~1983 1982 1981 1980 1979

< 1housands ofherage 19W Dollars L Operating revenues-

..... .....................; .... . $3,487,626__ $3,341,816 $2,999,390 $2,628,359 $2,409,246 -

s Constant Dollar Information .

Netincome . . . . . . . . ..... ..... ....., .. .. .g....  ? $313,631 $289,181 J '5262,337-- $246,532 $200,148 :

t Net. assets at year end at net recmerable mst . . . . . ..... .. $3,642,92.2 $3,331.938 $3.142,914 $3,061,877 $3,008,987 Current Cost Informab~on 1 Net inmme ; . . . . . . . . .-. . . . . . . .... ... . ............ ...

.  : $296,264 , $264,273 $232,070 - $207,078 $146,152.

Effect of general inflation in excess of increase in specific prices of

' electric plant after adjustment to net recaerable cost , ..... .. $(38,150) :$(13,325) .- $(318,628) $(521,708) $(593,152) -

" Net assets at year end at neti recmerable mst . . . . . . . . . . . . . . . . . . . . . . . ....... ...... - $3,642,922 $3,331,938 $3,142,914 . $3,061,877 $3,008,987 -

GeneralInformahon

= Gain from decline in purchasing power of net amounts owed . .. .. $133,489 $126,666 $279,313 $388,753 $423,443 _,

? Consumer price inder - aserage . . i . . . . - . . . - . . . . . . . . . 1298.4 289.1 272.4 246.8 - 217.4 M 33

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, - Directors Mvisory Directors

! W.W. Aston ' DeBaa Plswer & Lidt Caagany 1 A. Gooch R K. Carnpbell ' i Degas, Texas - --

Fort Worth, Texas DaPas, Texas i

P esWent, DeBas Pbwer ..M w ' W.W. Aston"Y- Senior Membec the finn of President. Texas Pbwer I

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& UEhtCompany u m pDanma limasi Pwsident, DeBas Pbwer '

Canley, Hanges Gooch, Munn & UghtCompany

& Cogins :

• Itery G Brittain :

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.. Ben H. Carpenter Dak Texas < 1. - O n . Paul Isonad DeBas, h Chairman d the Bodalf n j@ M I%'ry G Brittain s . Fort Worth,h Chairman d the Boad l cd Chief Executnie, ~ "% ' i Degas, Taasa. . . Investments and Chief Executiw ONicec Texas Unties Company 1 f Chairman d the Board . Southland Financial

' 4 and Chief Execuhve, EW. G Marquardt Corporation

j. R K Campbeu -

has Ueties Company Fort Worth Texas -

, Datas, Texas . x - ' # l of President,h Electne Marvin Gibbs

! President. Texas PbwerN Luoyd S. Bowles : -

Service Company Paris, Texas .

& UghtCompany j DmEas, Texas: -'

President, Fry & Gibbs -

W, _ . Chairman of the ._Bond s s . -

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. De James M. Moudy. - Puneral Home .

W Jerry Farnnston Ngand Ptemident, DeBas ff Fort Worth Texas : 2 i: DeBas,lhuas c . _ , O FederalSavings&Iman1  : Chancellor Ementus, Charles E Hawn Athens, Texas '

Chairman of the Board b and Chief Execubve,h L sje'o ~ Assoaabon 4% , of- - ,' ' Taas Chnstian University 'l resident, Hawn tamber 2

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Utdsties Electric Cow l.s George L Gerk 9 , C::?t Charles ILIbrryi Company, Inc. ; ,

and Pwsident.w , sp W.DaBas h y .. > 0 % Texas i 9 Utdities Company ' ~ E n 3Chainnan and Chief y _ Pwendent,1%rry L Thomas G ihrlier E ,. . a y jE . h=aanve o nces t i 6 , " ' investments, incJ ;Taykir,Teias' X

i Burl & Hulaey,Jc1 m <

W MercanIEe National Banki - -

..<f- Chairman of the Bonni -

h' Fort Worth,Texasi . u MkAeJat DaEasT m *J- E Bru'ce Sheet 1 Fiat-Taylor National Bank l >

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' ViceChairmanof the? TS ZW r Board, Texas Utgities C I' I W1.D. Francis dp - Sy -

1. 6 Mnt. e Graham, Texas.

Investments ' R L Ibland j Compant T'.".'rhg np g Degas,h N ,jif;.,

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, Plealdent, G Chairman of the Board .: .

W. G Marquardt g _ 2 M%.kWilienymashig;, ; g ; 7 Fort Worth,Taas i  ;

Fort Worth, Texas W - Investmals  ? and Chief Executsve ONice

>@eg9 Pampany of11mias 4; g '-

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[ yggg ggggygg <,NS Ridiard M. Hart 7; ~ , EJames A. Raneree , +

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- Chainnan,Taas Commerce Investments ,

M Erie Nyd 9 , - . _ J " NMiW i * ? the Board and Chief W ,u", Bank- Arlingon - _. .. < A

-~ ' 7 Degas, h 7'P> e2 aidant ,W Bank i MgL- 1MEAshainispadve Osceg%6@A , f R. E. Rnberts _ . .

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E Executive Vice . t interFirst ~,(

U (Teas Utdtties Company , Chainnan of the Board; y- .w 4 %y6:;wxp,NXM DaBas - A9g:g ~ d. Anderson '~ m fandChief Execuuve <

Michael D. Spence 1 ' ~a y J ' ^ "p Robert Mcdonald TW " %, m,J "A" ;%m , ~ ' , ^ ' W ? Oeicec Ranssire w* w Radiardson,Teias/ ~~,i y Ddu,-h ; pfp pqOwne@WWayr ,

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OFFICERS TEXAS UTILITIES ELECTRIC COMPANY

. Jerry Farrington .

I L Baker Peter B. Tankham Chairrnan of the Board and Mce President Secretary Chief Executive -

D. E. Kelch W. E Patterson W. W. Aston ' Mce President, Treasurer Assistant Controner Division President and Assistant Secretary Gary L Price

R K. Campbeu - T. R lake, Jc Auidant Controuer Division President - Mce President 1 P Knierim W. G. Marquardt . G. W. SeHar Assistant Treasurer

- Division President h President

. ~.. C. I's layton '

' Michael D. Spence S. S. Swiger Assistant Treasurer Dmsion President Mce President and ControBer Erle Nye .

E L Watson Executive Mce Presulent Mce President Dallas Power & 1]ght Conapany Texas Electric Service Cosmpany Texas Power & IJakt ('a=pany . Texas Utilities Generating Company W.W. Aston . - W. G. Marquardt  : R K.Campbeu Michael D. Spence President President President . Presulent J. A. Byrd.Je ; E. D. Scarth Gerson Berman 1. li Fikar

, Mce President -. Vice Premdent Vice Presulent - Executive h President I R Griffin , , W. M. Taylor ? '

1homas E. Blakey R 1 Gary Mce President - Mce President : Vice President . Executive h President D.1 Hampton - . e D. Williams . Imis W. Howard 3 Buly R Clements a  ; h Presiden' - Vice President - .' Vice President Vice President

. E. R Holcomb ' ' & A. Andress - . Joe M. Nelson  ! Joe R George Vice President - ' Controueri - Vice Premdent Mce President

~ 1 D. Kamey - E. C. StanphiH -; L- John D. Janak

ControDer - .

Mce Premdent : Vice Premdent ~

, 4 T Clark Choasei Imn imeless

- ControDer ~ Vice President

' M. H.Tannet Jz K Vice Premdent W. M. McDonough,Je e Controner

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P DIRECIDRY

- ; REGISTRAR, TRANSFER AGENT AND DIVIDEND

IRYING AGENT

RepubhcBank Dallas, National Association

' Cbrporalelhist Department In Box 2964 i Dallas,TX 75221.

l1he AnnualReport has bempreparaf k>rthepur- -

' pose ofpotn'iding shareholders with inkmation concerning the Company and rutin w ui a with :

': any sale or purchase O( or any OWer or soucitataan of

. an o(krto buyorsdlanysanrities.J YA copy of the AnnualReport to the Securities and Exchange Comminkau, Fonn 10-K will be farmshai l by the Cornpany upon raguest:;

. Aquests k>r cqpies or other'sharehoUer udormatnon

shouM bediredal to-

~ -:SnareholderRelatnons

Tszas Utilities Dktric Company

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' iMlas, &>an Toner ^ ;-

Tans 7520f

_(214) 653-4730 :

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- Taas Utilities Eledric Company ^

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2001 Bryan Tower >

Dallas, Taas 75201 (214) 653-4600

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