ML20004F692

Annual Financial Rept 1980

ML20004F692
Person / Time
Site:	Hatch, Vogtle
Issue date:	03/03/1981
From:	GEORGIA POWER CO.
To:
Shared Package
ML20004F688	List: ML20004F687 ML20004F692 ML20004F693
References
NUDOCS 8106220185
Download: ML20004F692 (28)

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^o.orgia row company

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- N!b DOCUMENT CONTAlHS s

x 333 Piedmont Avenue eo. Box 4545 POOR QUAUTY PAGES, Atlanta, Georgia 30302 Telephone: 404-526-6526

~ Georgia Power Companyis an -

investor-owned electric utility _

serving 57.000 of the state's 59,000 square miles.The Soutnern Company i is the parent firm forGeorgla Power -

as wellas Alabama Power, Gulf Dowerand Mississippi Power.

q Together these companies comprise the Southern electric system.

I A copy of Form 10-K as flied with =

the Securities and Exchange Commission will be provided upon.

Written request to the office of the Corporate Secretary.

For additional information, contact

~

Mr. W. L. Westbrook.

Vice President. Secretary and Treasurer 404-526-6526 i

Registrar TrustCompanyBank. Atlanta All Preferred Stock Transfer Agents Officeof theCompany. Atlanta Trust Company Bank. Atlanta All Preferred Stock I

i Dividends Paid it has been determined that all dividends paid on Georgia Power Company Preferred stock (including Class A PNferred) for the year 1980, are 100% taxable.

This annual report is submitted as Information for stoc kholders and is not intended for use in connection with any sale or purchase of, or any of'crS or solicitation of of fers to buy or sell, any securit ies. except only to the extent incorporated byieterence in a prospectus.

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1980 1979

% Change Financial (in thousandsof dollars)

Total Operating Revenues.

51,808.408 51.519.942 19.0 L Total Operating Expenses..

$1.492.120 51.255,258 18.9

Net income Atter Dtvidends On Preferred Stock..

5195.345

$ 145.512 34 2 Dividends on Common Stock.

5136.400

$131.100 -

4.0 Gross Property Additions...

5690.959 5607.616

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Net Utility Plant (year-end),.

54.434.683 54.301.454 31 j

Electric Operations t

Kilowatthour Sales (millions).

46.306 43.235 7.1 Customers Served (year-end).....

1.215.714 1.192.770 1.9 Capital Structure Ratios tycar-end)..

1-Lon(flerm Debt'.

57.42%

57.08%

Preferred Stock....

8.75%

9.35%

._-i-Preferred Stock Subject to Mandatory

.t:

Hedemption*

1.71%

1.95%

't Common Equity.,.

32.12%

31 62%

Covera 9e Ratios

.j First Mortgage Bonds.

2.86 2.34 Preferred Stock.

1.81 1.66

• Includes amounts due within one year 4

4 Tatsle df C$ntirits

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. Hn)hlights 3

Letter to investors 4

Georgias Electric System 6

Selecte(J irinancial tlita 7

Management's Discussion 7

Financial Statements 13 Auditors' liepor t 21 I he er for s ant! Oflicers 22

I Georgta Fpver Company 4

1 Letter to investors 4

OR GEORGtA POWER Company, of the Georgia Public Service Commission l

1980 was a year of overall progress.

and more clearly define certain accounting

_s Dur ing the year we received aaditional treatments in rate cases.

revenues in both our retall and resale Customers were encouraged to conserve jurisdictions brought the last Unit of energy whenever possible through continuing the Willace Dam f acility into service, pursued load management programs in 1980. spotlighted j

additional 011-system power sales. Completed by such activities as the testing of load control certain sale and repurchase transactions devices. enes audits and Good Cents Home involving the Scher er Electric Generating Plant, programs. Despite these etforts, electricity used a four-unit coal fired facility. and continued during the summer heat wave reached an all negotiations Concerning additional participation time high. Even with the Governor issuing a call in our generating 1acihties for conserving power. urging all Georgians to Net income for the year totaled S195 3 climinate non-essential use of electricity and million. Compared with 1979 net income of with industrial customers having been asked to S 145 5 million. marking the tnird consecutive cut consumption, our customers used almost year of imptovement. The increase in 1980 is 3 bilhon kilowatt hours from July 6 through primarily attributable to addithnal revenues July 20 1 his was almost 27 percent more than l

resulting f rom higher rates and greater kilowatt-was used in the same period in 1979. The hour sales. of f-system power sales and gains combined demands of the Company's l

f rom the sales of assets.

customers andthecustomers of Oglethorpe f

The year tx:gan on a positive note with the Power Corporation (OPCL the Municipal Electric i

, ~I conclusion in January of proceedings related Authority of Georgia (MEAG) and the City of 10 our NovemDer 1978 retail rate case fihng Dalton (Dalton) reached a new peak of 11J 54 Approval was received in May 1980 f rom the megawatts on July 16th, surpassing by almost l

I ederal Energy Regulatory Commission (FERC) 1.000 megawatts the pr evious record set last l

with respect to rate case settlement agreements year. The new peak demand was an increase reached in 1919 between the Company and its of almost 10 percent over last year s peak. In l

wholesale customers We filed another addition.fi new record winter peak demand of i

wholesale rate increase application with FERC 9.203 megawatts was set in Januocy.1981. f3y j

in April 1980 with new rates becoming etfcctive having the generating capacity available and in Novemher.1980 Also in November.

Our plants in gocx1 oper ating Condition. we i

j settlement agreements were reJched with were ab!c to meet our Customers' energy respect to these rates. T hese settlemcht r equirements These increased sales were a j

agrcements have been submitted to F ERC for significant factor in our improved earnings.

apre oval. Based on these agreements. the Another factor which helped to improve j

Company will retain on an annual test year tMsis approximately $2/1 million in increased

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Mf revenues During the 1980 session of the Georgia jg

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,1 General Assembly, legislative proposals for

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1 improving the regulator y process were passed

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in both the House and Senate. but the session

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ended hefore a compromise measure could bc

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a consides ed Similar legislation was passed by j:

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'y the 1981 Georgia General Assembly and was E*

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legislation is intended to sti engthen the statf

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d Rober t W. Scher er i

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i carnings for the year was of f-system bulk-Utilities on possible additional partlCipation in power sales to neighboring utthfies in 1980.

Plant Vogtle and Units 3 and 4 of Plant Scherer, j

the Company, along with otner operating As a result of thue discussions. Gulf Power companies within the Southern electric Company, an af f: Gate of the Corroany, signed a system. have signed long term Dulk-power contractcffectiveasof Feoruary 19.1981 for contracts with five southeastern utthties. These a 25 percent undivided Interest in Plant Scaerer utilities are otherwise pr imarily dependent on Units 3 and 4.

Oil as a f uel for generation of cicCtricity.

Our continuing progress is a reflection of Certain pr ovisions of these contracts allow us a coordrnated management of fort. As a result to interrupt these sales. If necessary, to serve of continuous reviewof theCompany's j

our terrstorialload Thesearrangements direction and implementation of positive g

enable us to utill/c certain Capacity, if courses of action. we have Decome a sti onger available. to meet the needs of these utilities.

Company, better prepared to meet the Not only are these transactions advantageous challencesof tomorrow f r u'n a business viewpoint. we also Deheve Our progress in 1980 could not have been that they ar e in the national inter est since they achieved without the dedicated etforts of our reduce the country's dependence on oil emp!oyees and the support of our investors.

Constr uction expenditures for the year As we enter 1981. we continue our commitment amounted to $691 milhon. Work continued on to maintaining financial integrity while providing the coal-fired units at Plant Scherer. the Vogtte quality service to our customers i

Electric Generating Plant and the Rocky j

Mountain pumped storage hydro plant. During 1980. a combustion tur bine was placed into y

ser vice at ine wansiey eiectric Generating Plant ihe remaining five units of Wallace Dam were also completed and placed in service this Robert W. Scherer year. T his f acihty increased our hydro generating President and Chief Executive Officer capacity by 74 percent and is the first pumped March 3.1981 storage tiydro plant in the Southern electric system in late 1980. financing arrangements were

'j completed for the Company s new corporate headquarters in downtown Atlarita. This new bcility will bring together personnel from locations throughout the City. With its innovative 1

design and energv-efficient features, it is anticipated that the building will use 55 percent less ener gy (flan required f or similar structur es.

making it one of the most energy.cf ficient bui!Jings of its kind in the nation.

To of fset part of the financial burden of our construction program, procerty sales were consummated during the year.1 he Company sold a 60 percent interest in Plant Scher er Units 1 and 2 to OPC and an additional 15.1-percent inter est in these un:ts to ME AG Ihe Company retelved appr oximately 5116 million from these transactions. In conjunction with these sales.

We also repurchased the total ownerrhip of MEAG and ren in Plant Scherer Units 3 and 4. thus restoring the Company's ICXF per cent owner ship of these units. Discussions continued during the year with neighboring

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1 Georgia's Electric System '-

a-Generating Units Under Construction Fossil.

Name Plate Commercial Rating (kilowatts)

Operation Date Plant Scherer Unit No.1..

Plant Scherer Unit No. 2.

68.712(1) 1982 68.712t 1) 1984 Plant Scherer Unit No. 3.

818 000(1) 1987 Plant Scherer Unit No. 4.

Nuckar 818.000(1) 1989 Alvin W Vogtic Nuclear Plant Unit No.1.

588.12O(1) 1985 Alvin W. Vogtle Nuc! car Plant U01t No. 2..

588.12O(1) 1987 Hydro (Mrtietts Ferry Unit No. 5 and 6.

100.000 1985 t

Goat Hoch Unit No. 7 and 8.

Pumped Storage 67.000 1988

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Rocky Mountain Unit No.1. 2 and 3.

675.000 1987 d

-i!) GPC portion only, excludingJCIntpart'c/ pants 4

j 1980 Jointly Owned Plants

)4 Plant,

, Hatch Vogtle Scherer Wansley

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Uf'lls 12 12 1-2 3-4 1-2 Megawatt Copacity 1.630 2.320 1.636 1.636 1.730 Owned Georgia.

.50.10 50 70 8 40 100.00 53.50 OPC..

30.0 30 00 60 00 30 00 MEAG 1,.70 17.70 30 20 15.10 l'A11 ton.

2.20 1.60 1.40 1.40 Proposed 1981 Ownership i11 Plant Scherer

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Legend Units 3-4

' UI *=Y ~'a A Nuclear

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Megawatt

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="w w E Hydro Capacity 1.636

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25 00 (1) Plant Vogtle Certain Florida Utilities are

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Megawatts Steam

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Nuclear.

.817

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Gas Tbrbines 1.231

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Selected FinancialData Donarsintnousands t

Years Enced December 31 1980 1979 1978 1977 197c Operating Hevenues

. 51,808,408 51.519.942

$ 1.475.024 51.301.237 51.170.046 Net income Atter Divicends

.=

on Preferred Stock.

5195,345 5145.512 5136.014 5111.686 5121.118 To'al Assets.

55.288,504 54.847.197 54.524.415 54.106.788 53.904.549 Long-Term Debt.

52,326,627 52.168.272 51.953.553 51.880.798 51.827.470 Preferred Stock SutMect to Mandatory Redemption.

567,500 571.250 575.000 575.000 575.000 Cash Dividends Declared on Cornmon Stock.

5136,400 5131.100 5119.225 5109.400 5100.400 Gross Property Additions.

5690,959 5607.C16 5500.719 5534.153 5404.435 Kilowatthour Sales (in thousands).

46,305,741 43.234.692 44.145.118 43.818.826 41.329.966 Customers (year endt 1.215,714 1.192.770 1.164.822 1.138.470 1.112.063 Average Revenues per Kilowatthour-Total Sales-(centst 3.87 3.48 3.31 2.94 2.81 Average Cost of Fuel per

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Kii%uhi.ar Generated

-cents).

1.51 1.42 1.3) 1.27 1.12 Additional financial and statistical information Report. This report will be provided upon written for the period 1970-1980 is provided in the request to the office of the Corporate Secretary.

Company's Financial and Statistical Review Management's Discussion and Analysis of Results of Operations and Financial Condition Results of Operations i

EORGI A PCWER'S financial per-1979 and 1980. On April 4.1980, the Company Gdespite theincreasing cost of gen-formance r ontinued toimprove filed an application for increased whoiesale rates which became etfective in November.

J crating electricity. Atter two years of 1980. Thus the f ull etfect of these rates are not decline. the Company's carnings reflected in 1980 earnings. See Note 2 to the began to improve in 1978 and have shown finanClal statements for further discussion of steady Improvement through 1980. Net income rate matters. During 1980. the Southern electric f or 1980 totaled 5195 0 million. an increase of system entered into contracts to sell 700 34 2 percent over 1979 and 43.6 percent megawatts of capacity to neighboring util ties.

i Over 1978.

The contracts cover periods of up to six years.

Increases in operating revenues in each The Company s portion. in 1980. of these bulk-period ar e attributable principally to rate in-power sales amounted to 2.1 billion kilowatt-increases, recovery of increased f uel costs, and hours and revenues of 556 million.

increased energy sales in 1980and 1978. Retail Total Company Kilowatthour 91es have revenues over the perlod 1978 to 1980 increased increcsed 5.0 percent from 4A i billion in 1978 22 7 percent The most significant increase was to 46.3 billion in 1980. The rate of increase in in 10fV)which reflected the first fu!! year of new energy sales has been dec',ning as a result of retail r ates Wholesale revenues decreased only customer conservation ar 1 wholesale 3 5 percent as compared with the 16 6 percent customers' increased ability to meet their own dect case in wholesale kilowatthout slics over electrlCal demands I he inCr cases in sales the same penod T his was primarily cue to wholesale rate increases impiemented in 1978.

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8 during 1980 Ure primarily due to the extended the income tax etfect of the debt portion results summer heat Wave and increased Sales to Q

i neighboring uttilties. The combined demand of

. in a hon-cash charge. The allowance for funds -

the Company 1 customers and the customers -

used during construction. net of income taxes.

m as a percent of net income amounted to 29 -

s of Oglethorpe Power Corporation (OPC). the percer t in 1980. 41 percent in 1979 and 39 Municipal Electric Authority of Georgia (MEAG).

percent in 1978.

and the City of Dalton (Daltom reached a new -

Interest expense has risen steadily since peak of 11.154 megawatts on July 16tn.

1978. reflecting the higher cost of new debt.-

surpassing the 1979 peak by almost 1.000 Bonds sold in 1980 carried an interest rate of megawatts.

14M percent. up substantially f rom the 104 Expenses for generating electricity percent to 11 percent on bonds sold in 1979 continued to rise due to increased energy =

and the 9% percent to 9% percent on bonds.

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. product 100 and inflation. Fuel cost showed the sold in 1978.

most substantial change increasing 29.8 inflation has a significant effect on the percent from 1978_to 1980. However, under _

Company due to regulatory constraints. See E

fuel cost recovery mechanisms. the Company -

Note 13 to the financial statements for recovers the actual cost of fuel burned. Net supplernentary information concerning the -

purchased power expenses have decreased _

approximate elfects of inflation.

5751 million from 197Edo 1980, reflecting the Company's improved plant availability and The results of operations discussed above 4

i

. additional generating capacity.

are not necessarily indicative of future earnings.

It is expected that higher operating costs and

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' increases in depreciation and amortization carrying charges on increased investment in

. each year are due principally to the continued plant, if not offset by proportionate increases growth in_ depreciable plant in service. The in operating revenues (either by periodic rate composite straight-line depreciation rate was rellet or increases in sales). Will adversely -

. approximately 3.6 percent in 1978. 3.7 percent af fect future carnings. Increases in sales in the in 1979. and 3.8 percent in 1980.

. Fluctuations in income taxes resulted from f uture will be affected by the extent of energy changes in income betore income taxes. and conservation practiced by customers. the

't.

fromthereductionof thefederalincometax -

elasticity of demand. weather. and the rate of rate from 48 percent to 46 percent in 1979.

economic growth in the system service area.

Federal and state income tax proviPons are In recent years. earnings have tended to decline detalled in Note 5 to the financial statements.

during periods following the !ull 12 months' The allowance for funds used during realization of general rate increases and prior to receipt of further rate relief.

Construction represents the cost of capital applicable to utility plant under construction FinancialCondition which is not included in the rate base. Although OR THE YEARS 1978 through the cQuity portion of this credit represents non-1980. gross plant additions were cash income a significant portion of current

$1.8 billion. Taese additions reflect cash flow results f rom the allowance of a return on and recovery through depreciation of continuing investment in major generating projects and the con-previously capitallzed amounts. In addition.

structuring and upgrading of transmission and distribution lines, substations and other facilities. Plant additions were financed -

primarily by the issuance of $322 million of long-term debt. S45 million of preferred stock and the sale of undivided interests in certain plant facilities (5447 million). The Company's new corporate headquarters building was financed through a sale-leaseback arrangement and was recorded in utillty plant and other long-term debt in October.1980. The etfective cost to the Company of this financing arrangemant is 8.2 percent. considerably less than the cost of first mortgage bond financing. The balance of funds was provided from common equity contributions from The Southern Company and

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Internai sources. See Statements of Sources of in order to issue additionai iong-term debt Funds for Gross Property Additions for further and preferred Stock, the Company must comply

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with certain earnings coverage requirements The Company s capitalization ratios have contained in its mortgage indenture and remaltmd apptoximately the sarre in recent corporate charter. Earnings coverage of two years but the composite interest rate on long-jmes annuai interest cnarges on first mortgage -

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term debt has increased from 7.97 percent at bonds is required for the issuance of additional a

December 31,1977 to 8.44 percent at December bonds and one and one-half times annual l

31,1980 and the composite dividend rate on interest charges and preferred stock dividends pr efer r ed stock has increa'~,ed f rom 8 14 is requir ed for Ihe issuance of additional i

trrcent to 8 38 percent for the same period.

prefert ed stock. The coverages for the years At December 31.1980, the Company had ended December 31,1980 and 1979. were 2.86 5204 4 million of tempor ary cash investments and 2 34. respectively, for bonds and 1.81 and to meet its short term cash needs. To f urther 1.66. respectively, f or preferred stock.

pr ovide financial flexibihty. the Company The ability to maintain these coverages and currently has $450.750.000 in available lines of to generate f unds for day-to day operations and j

cr edit. 5400.000000 of which is available under to finance the construction program is primarily ievolving lines of credit agreements for a perk >d dependent on receiving adequate and timely of three years, and $50 750.000of which is rate increases The Company is committed to subject to annual renewal. No short-term bank maintaining its financial Integrity by continued I

loans were outstanding at year end emphasis on operating ef ficiency and by J

The increase in other accounts and notes v!gorous pursuit of rate increases vL hen receivable is partially attributable to a note appropriate. snouid tne Company ne unabie to received in connection with Ihe sale-leaseback obtain f unds from external sources in amounts of the Company s new cor porate headquarters which. togetner with internally generated building Payment of a major portion of this funds. will be adequate to carry out the present note was received by the Company in January.

construction program, delays or cancellations 1981 1 he r emaining inctcase is primarily of certain projects could become necessary.

attributable to receivables f rom joint owners of generating facilities Payment of these accounts j

was received in February.1981

.)

'I he Company's construction expenditures are estimated to total approximately 52 5 billion for the threc years 1981 through 1983. 't he construction program is subject to change and l

excludes amounts applicable to por tions of

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facillt!cs sold or to be sold as discusseo in Notes 3 and 4 to the financial statements. At Decemttr 31,1980. substantial purchase commitments were outstanding in connection willi the constr uction pr ogram ar.1 for the purchase of coal and nuclear fuel under long-term contracts in addition to the f unds required for the construction program, approximately $68,1 millico will be required by the end of 1983 in Connection with the sinking f und requirements and maturities of long ter m debt and preferred stock subject to mandatory redemption.

It is anticipated that the f unds required will tm derived f rom sour ces similar to those used in the past. A Company goalis to generate internally a gr cater portion of the funds needed for total construction eyrnditures

.Georola Power ComDany' r

10 i

Balance Sheetsin thousarcs i

December 31

~1980 1979 ASSETS UtlNty Plant Plant in service, at original cost.,

54,710,260 54,415.038 Less - Accumulated provision for depreciation.

1.141,263 1.006.439 3.568.997 3.408.599 Nuclear fuel, at amortized cost..

54,831 46.795 Construction wor K in progress (Note 3).

810,855 846.060 4,434,683 4.301.454 Other Property and investments Southern Electric Generating Company (Note 4).

16.400 16.400 Nonutility property. net.

t-3,299 3.254 i

19.6k9 19.654 Current Assets Cash.

7.731 6.081 Temporary Cash investments, at cost.

204.400 51.690 Receivables-Customer accounts receivable...

j Other accounts and notes receivable.

157,488 110.001 t 36,323 54.027 Intercompany.

Accumulated provision for uncollectible accounts.

13,886 15.593 (2,000)

(1,200)

Fossil fuel stock, at average cost.

265,352 245.341 i

Materials and supplies, at average cost.

30,375 27.700 Prepayments.

4,744 2.388 818,299 512.521 Deferred Charges Debt expense, being amortized.

6,771 6.992 Miscellaneous.

9 052 6.576 15,823 13.568 y

55,288,504 5_4_.847.197 J

I he accompanytnq note %u e an integral par t of Ihete statement %

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GeWOOfThvet C_.o.ri.speny 11 845ance Sheetsin tnousarx25 a

. December 31 1980 1979 CAMTAUZATION AND UA81UTIES Capitallration (see accompanying statements)

d

. Common stock cQuity.

51.314.315

$ 1.210.868

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FYeferred stock..

357.844 357.844 Prefer red stock subject to mandatory redemption (Note 83.-

67.Soo 7i.250 Long-terrodebt.

_2.326.627 2.168.272 4.066.286 3.808.234 V

Current Uabilities Preferred stoch sinking fund requirement (No' d).

2.575 3.520 Long term debt due within one year (Note 7).

22.796 17.169 Accounts payabic-3 Intercompany.

14.808 12.203 j

Other.

165.045 149.974 Revenues to be refunded iNote 2)..

1.569 5.067 k.

Customer deposits.

l Taxes accrued -

27.229 26.282 Federaland stateince Tie.

74.330 23.679 Other..

i 34.230 28.791

~ l Interest accrued.

54.855 52.036

]

Miscellaneous,

14.197 13.280 41>

332.001 Deferred Credits, etc.

Accumulated deferred income taxes.

560.403 501.009 Accumulated deferred Investment tax credits.

229.639 193.980 Miscellaneous.

20.542 11.973

_ 810.584

_706.962

]

Commitments and Contin 9ent Matters (Notes 2. 3. 4 and 11) 55.288.504

$4.847.197 i

9 1 he.x ( or npu tyt:w1 notes.): e.H) intet]r.11 pit t at these st.itettlents

T Ceotyta f wwer Corrmoy -

12 58aidsh khaghallhation in tnousanas

, December 31 1980

% of Total 1979

% of Total Coumon Stock Equity Common $tock (wtthout par value) d authorized 15.000.000 shares, outstanding 7.761.500 shares...

-s 344,250 5 344.250 Other paid in capital..

696,800 652.800 Premium on prcferred stock (Note 8).

1.636 1.104 Earnings retainedin the business (Note 10).

271,629 212.714 Totalcommon stoch equity..

1.314.31S 32.3%

1.210.56b 31.8 %

Cumulative Preferred Stock (witnout par value) authorized 14.000.000 shares.

Outstanding 6.578.439 shares Class S100 stated value-54 00 to S6 60 Series...

117,844 117.844 1

$ 7.72 to 17.80 Series.

105,000 105.000 58.20 to $9 08 Serles.

35,000 35.000 125 stated value-12.52 Serses 50,000 50.000

' i S2.56 Serles.

50.000 50.000 Total (annualdividend requirement

$2/.350.OOct 357.844 8.8 357.844 9.4 Cumulative Preferred Stock (without par value), subject to mandatory redemption (Note 8) 1 autnorized 3.000.000 shares, outstanding 2.803.000 shares

$25 stated value-52.75 series cannuai dividend requirement $7.708.000).

70,075 74.770 J

Less amount due within one year..

2.575 3.520 Total (excluding amount due within one year).

67,500 1.7 71.250 1.9 Long-Term Debt I trst mor tgage bonds (Note 7)-

Maturity Interest Rates Aptil 1.1980. 2-7/8%.

15.000 Junei.io8i. 3. i/2%.

20,000 20.0c0 July 1.1982.

3 3/8%.

20,000 20.000 Aprl! 1,1983. 3-3/4%.

8,073 8.073 Aprll 1.1984,. 3 1/8%..

11,000 11.000 May 1.1985.

3-3/8%

'1,988 11.988 1986 1990.. 3 5/8% to 51/4%.

56,978 56.978 1991 1995.. 4-3/8% to 4 7/8%.

127,500 127,500 1996 2000.. 5 3/4% to 11-5/8%.

423.107 428.107 2001 2005.

7-3/8% to 11-3/4%

825.968 825.968 2006 2010.. 9-5/8% to 14-1/2%.

549,500 474.500 Total first mortgage bonds 2,054,114 1.999.114 Other long term debt (Note GL 309.175 199.820 Unamorti/cd debt premium (discount) net.

i13,866)

(13,493)

Total long-term debt (annual Intere<,t optement $198.823.000).

2,349,423 2 185.441 Less amount due within one year.

22.796 17.169 Long term debt. excluding amount due within one year.

2,326,627 57.2 2.iO8.272 56 9 Total capitalization 54,066.286

.]OO.0%

53 808_234 100 0%

1 t he accompanying notes are an tntegral par t of these statements

..:

~

_u or 91.3_iwwer Oxr.guny 13 i

StatementsCincomein thousands Years Ended December 31 1980 1979 1978 Operating Revenues, 51.808.408 51.519.942 51.475.024 Operating Espenses d

. Operation-Fuel.........

716.566 598.254 551.971 Purchased and Interchanged pr;wer. net..

4.324 28.519 79.470 Other......

222,155 182.386 168.761 Maintenance....

144.344 126.051 121.263 Depreclation and amorti. atton...

153.245 133.888 118.208 Taxes other thanincome taxei 73.454 67.736 65.364 Federal and state income taxes (Note 5)..

178.032 118.424 126.953 Total operating expenses.

1.492.120 1.255.258 1.231.990 Operating Income.

Other income 316.288 264.684 243.034

' Allowance for equity funds used during constructioq.

35,6G3 40.224 36.774 Gain on sales of facilities (Note.4).

29.282 3.323 4.421 Interest income.

25.552 34.472

~ 18.336 Otter, net.

4.047 3.415 2.473 locome taxes applicable to other income (Note 5),

f22.570)

(14.315)

(9.494:

Incomebeforei terestcharges.

_ 388.262 331.803 295.544 g

Interest Charges J

interest on iong-term debt.

186.210 185.029 158.460 Allowance for debt funds used during construction.

I40,063)

(38.082)

(32.067)

Other interest charges.

10.741 3.579 1.660 Amortization of debt discount, premium and expense, net

805, 97.9 997 i:

Net Interest charges.

157.693 151.505 129.050 Net income..

230.569 180.298 166.494 Dividends on Preferred Stock 35.224 34.786 30.480 Net income after Dividends on Preferred Stock 5 195.345 5 145.512 5 136.014 Statements of Earnings Retained in the Business to thousands j

_ Yea _rs Ended Occcmber 31 1980 1979 1978 Balance, beginning of period 5 212.714 5 200.097 5 183.308 Add (deduct):

Net income af ter cividends on preferred stock.

195.345 145.512 136.014 Cash dividends paid on common stock.

!136.4001 (131.100)

(119.2251 Preferred stock issuance expense.

(301

( 1. 79_ 5)

Balance.end of period (Note 10).

5 271.629 5 212.714 5 200.097 Statements of Other Paid in Capitalin thousa. 3 Years Ended December 31 1980 19/9 1978 Balance, beginning of period.

5 652.800 5 627.800 5 557.800 Cash contribution to capital by parent company.

44.000 25 COO 70.000 Balance.end of period 5 696.800 5 652.800 5 627.eOO Tne accompanying notes ate an integral part of these statements

Q1of gia @wer Comp >ny 14 Statements of Sources of Funds for Gross Property Additions to thousinds Years Ended December 31 1980 1979 1978 Sources of Funds for Gross Prow.rty Additions:

Net income..,

5230,569 5180.298 5166.494 d

Add (deduct) princ! pal noncash items.

Depr( clation and amortization..

184,401 153.962 132.925 Deferred income taxes. Det.

79,343 80.206 77.909 Deferred investment tax credits.

40,823 32.395 57.220 Allowance for equity funds used during constructton.

135,663)

(40.224)

(36.774) 499,473 406.717 397.774 Less-Dividends on common stock.

136,400 131,100 119.225 Dividends on preferred stock.

35,224 34.786 30.480 327,849 240.831 248.069 Decrease (Increase) in net current assets, excluding long-term debt and preferred stoch due l

within one year-j Cash and sncn term investments..

1154,360) 190.526 (21.752)

Receivables.

Fossil f uel stock..

(126,376)

(43.786)

(16.079)

(20,0111 (46.447) 12.602 f

Materials and supplies,,

12,675)

(5.715).

(3.139i Revenues to be refunded.

13,498)

(1,932)

(6.4 34 >

j Accounts payable.

17,676 37.152 7,604 Taxes accrued 56,090 15.037 (41.663)

Interest accrued.

2,819 2.351 4,337 Other. net.

(492) 3.442 2.926 I

1230,827) 150.628 (61.598)

Other, net, including allowance for equity funds used during construction.

3,256 15.128 23.202 TotalInternal sources.

100,271 406.587 209.673 Exter nal Sources-J FirSt mortgage bonds.

75,000 225.000 200.000 Gonas retired or retunded at maturity.

(20,000)

(144.395)

(14.049) 55,000 80.605 185.951 Preferred stock.

50.000 f' fferred stock reacoutred.

(4,695)

(230) l uash contributions by parent company.

44,000 25.000 70.000 Pollution control obligattons.

40,673 13.455 26.550 increase (decrease) in other long-term debt.

68,682 4.692 (23.952)

Sales of facilitics. net book value(Note 4).

387,021 27.507 32.497 Total enternal sources

_590.681

_201.029 291.046 Gross Property Additions 5690,959 5607.616 5500.719 1

I he JCCO 1pdnyinn notes di e an Integral par t Of these statements.

u

. ~

' Georgia Fbwer Company

.15 Notes to Pinancial Statements Decembcr 31,1980.1979 and 1978 1

Note 1. Summary of Significant Accounting.

the spent fuel may require adjustments to fuel Policles:

expense. Pending ultimate disposition. sufficient d

storage capacity for spent fuel is available at GENERAL The Company.Is a wholly owned Plant Hatch into 1985. The Company is currently subsidiary of The Southerr; Company which is expanding its storage facilitics at Plant Hatch theparent companyof fouroperating companies and upon completion there will be sufficient and a system service company. The operating storage capacity into 1999.

Companies are engaged in the business of pro-vnding cles NC utilltyservice in four southeastern states. Operating contracts among the com.

PENSION COSTS. The Company has a trusteed panies covering interconnection arrangements, and noncontributory pension plan which covers interchange of electric power and joint owner-substantially all regular empoyees. The policy ship of generating facilities are subject to regu.

of tne Company is to fund each year's accrued

[

lation by the Federal Energy Regulatory pension costs for the plan which amounted to i

' Commission (FERC) and/or tM Securities and 518.377.000 in 1980. 516.501.000 in 1979 and Exchange Commission. The system service 513.486.000 in 1978. Of these amounts, company provides, at cost, technical and other 511.618.000 in 1980, 510.709.000 in 1979 and specialized services to the parent company and 58.519.M0 in 1978 were charged to operating to each of the operating companies, expe% and the balance was charged to con-7 The parent company is registered as a hold-struction and other accounts.

ing company under the Public Utility Holding The actuarial present value of accbmulated

,,j Company Act of 1935 and it and its subsidiaries plan benefits at January 1 1980, totaled are subject to the regulatory provisions of the 5141.351.000 for vested benefits and 58.044.000 Act. The Company is also subject to regulation for nonvested benefits. These amounts were by the FERC and the Georgia Public Service determined on the basis of accrued benefits Commission tGPSC) and follows generally ac-as of January 1.1980. whereas. the plan is cepted accounting principles and the accounting funded based on the premise that the plan will policies and practices prescritMd by the respec-continueln existence, which requires that future tive commissions.

events be cnnsidered. The net assets available for benefits at January 1,1980, amounted to 5170.332.000. The annual rate of return as-a UTILITY PLANT. Utility plant is stated at original sumed in determining the actuarial prese $t cost. Such cost includes applicable administra-value of accumulated plan benefits was tive and general costs, payroll related costs The unfunded prior survice cost under thu such as pensions, taxes and other fringe bene-plan and supplemental contracts amounted tits and the estimated cost of funds used during to approximately 519.475.000 and 520.900.000 construction. Maintenance and repairs. Includ-at December 31.1980 and 1979 respectively.

.l Ing replacement of minor items of croperty, are and is being amortized overa period of approxi-Charged to maintenance expense accounts as mately 15 years.

Incurred. The cost of replacements of property Is charged to the utility plant accounts.

DEPRECIATION. Depraclation is provJed on

~

the original cost of depreciable utility plant in REVENUES. Revenues are included in income service principally on a straignt-line basis over as billed monthly to customers on a cycle basis.

the estimated composite service life of the property. The depreciation provisions approxi-mated 3.8%. 3 7% and 3.6% of the average FUEL COSTS. Fuel costs are expensed as the cost of depreciable utility plant during 1980, fuel is consumed. The Company is allowed by 1979 and 1978. respectively. Such provisions state law and FERC regulations to recover fuel include a factor to provide for the expected costs and net purchased c.urgy costs through cost of decommissioning nuclear facilities.

fuel cost recovery mechanisms which are ad.

The Company's portion of the cost of decom-lusted as necessary to reflect increiues or de-missioning these jointly owned facilities, creases in such costs. Revenues are adjusted based on decommissioning promptly after the for differences between recoverabic fuel costs unit is taken out of service, is estimated at ap-and amounts included in current rates.

proximately $25.000.000 each for the two units The cost of nuclear fuel. Including a pro-at Plant Hatch. This estimate will be adjusted VIston for the estimated cost of permanent periodically to reflect changing price levels storageof spent f uel. ls amortized to f uel expense and technology. When property subject to de-

_ tused on the quantity of heat produced for cen-preciation is retired or otherwise disposed of, cration_of electric energy. Such amortization its cost, together with its cost of removal less was $20.756.000 in 1980. 511.153.000 in 1979 salvage. Is charged to the accumulated pro-and 56.358.000 in 1978. Final disposition of vision for depreciation.

16

s..

INCOME TAXES. The Company follows de-ficct the proposed sale of portions of Plant ferred income tax accounting for all significant -

Vogtle (see Note 4L The construction program Q

income tax timing differences. The Company.

Is subject to periodic review and revision. and

'is included in the consolldated federal income actual construction costs to be incurred may i

tax return teled by The Southern Company. y vary from such estimates because of various Note 5 for further information regarding in-come taxes.

factors such as increased costs, revised load estimates, the availability and cost of capital.

the granting of timely and adequate ' rate In-ALLOWANCE FOR FUNDS USED DURING creases by appropriate commissions. and CONSTRUCTION tAFUDCL AFUDC represents changes in the amount and timing of proposed the estimated debt and equity cost of capital asset sales.

funds which are applicabic to utility plant while The Company's construction additions are under construction. TM composite rate used expected to be financed from the issuance of q

by the Company in 1979 and 1978 to capitalize preferred stock and long-term debt the receipt j

the cost of funds devoted to construction was of common equity contributions from The 7.5% (net of income tax) as directed by the Southern Company. notes payable, asset saies

{.

GPSC.Beginning Janu"y 1.1980, the Company and internal sources. At the beginning of 1981.

J was directed by the G " to calculate me rate tl3 Company had S450.750.000 of unused lines l

In accordance with the.*mula prescribed by C :redit. 5400.000.000 of that amount in re-4 the FERC. The rate for 19eO was 7.87% (net of volving credit for a period of three years under e

income taxL The Company accounts for the ij income tax effect of capitalized debt cost as a agreements with nine nonterritorial banks and charge to income tax expense associated with

$50.750.000 in lines of credit subject to annual offrations with a corresponding credit to allow-renewal from one ponterritorial and various ance for debt funds used durinet construction.

territorial banks. In connection with these lines The income tax effect of capitalized debt cost of credit, the Company has agreed to pay cer-was $19.909.000. 518.344.OOOand 516.393.000 tain fees and/or maintain compensating bal-in 1980.1979 and_1978 respectively.

ances with the banks. These balances are not legally restricted as to withdrawal by the Com-Note 2. Rate Proceedings:

pany. Average compensating balances during i!]

1980 were approximately 510.500.000. There On April 4.1980. the Company filed an applica-Were no compensating balances at December 31.1980.

tion for increased wholesale rates with the FERC. The new rates were placed into effect To supplya portion of the wel requirements on November 1.1980. subject to refund and of its generating plants, the Lompany has en-1 were designed to increase wholesale revenues tered into various long-term commitments for by approximately 538.6 million annually. The the procurement of fossil and nuclear fuel. In most cases. such contracts contain provisions Company has reached a settiement agreement for price escaiations based on tne suppiiers-concerning this rate proceeding with its whole-sale customers. Subject to final approval from cost and/or other factors. Additional commit-the FERC. As a pad of the settlement agree-ments for coal and for nuclear fuel will be required in the future to supply the Company's J

ment. the Company would retain on an annual fuel needs.

l basis approximately $27.1 million in increased revenues. based on a test year ending July 31 Note 4. Facility Sales and Joint Ownership 1981. The Company has excluded from income Agreements:

~

the wholesale revenues applicable to 1980 which are expected to be refunded in 19,81.

Through December 31.1980, the Company has Note 3. Construction Program, Financing and 5010 u1 divided interests in Plants Hatch. Wans-Fuel Commitments:

ley. Vogtle and Scherer in varying amounts.

together with transmission facilities, to Ogle-The Company is engaged in a continuous con-thorpe Power Corporation (An Electric Mem-struction program and presently estimates con-bership Generation 8t Transmission Corpora-struction additions to be 5813.367.000 for 1981 tion) (OPC). the Municipal Electric Authority of Georgia a public corporation and an instru-and additional amounts of 5781.746.000 for 1982 and 5913.661.000 for 1983. These addi-mentality of the State of Georgia (MEAG) and tions include capitalized allowance for 'unds to the City of Dalton. Georgia (Dalton). These used during construction and exclude amounts sales resulted in gains. after income taxes, of applicable to portions of facilities sold Also.

57.425.000 in 1980. S1.503.000 in 1979 and the 1981 through 1983 estimated additions re-5375.000 in 1978. In addition to these sales, ficct the proposed sale of a partion of Plant the Company has signed a contract to sell a Scherer and the 1982 and 1983 additions re-25% interest in Plant Scherer Units 3 and 4 to Gulf Power Company, an afilliate of the Com-i

}

r 4,

,ai.

f ~.

H a.

l

~ pani,and is negotiating to sell approNmately-The Comoany's share of such amounts totaled 1G.5% interest inTfant Vogtle to certain Flor-570.067.000. 565.948.000 and 551.210.000 in Ida utilities. The consummation of any future 1980.1979 and 1978. respectively, and are In-d 4

sales is subject to all requisite governmental

- cluded in purchased pcwcr in the Statements 4

' approvals and, except with respect to such of income.

proposed sale to Gulf Power, the completion of agreements satisfactory to the respective At Decerr,ber 31,1980, the capitalization of -

'N SEGCO consisted of $32.800.000 of equity and parties, and completion of satisfactory finan-547,215.000 of long-term debt on which the clalarra ngements by the proposed purchasers, annual. Interest requirement is 53.037.000.

At December 31.-1980. the Company's per-Through December 31.1980. SEGCO has paid centage ownership and investment in these dividends equal to its net income.

Jointly owned 'acilitics were as follows:

Note 5. Income Taises:

wai cons w ien t

Megant Percent

' Plant.w ess A detail of the federal and State income tax -

Worst In caea n, owne<smo in a.erwe Un tnousands) provisions is set for th as f ollows (in thousands):

E i Haten Nuclear Plant 1.6 v 50.1% S479.494 5 5.139

W80, M79 M78 A. W. Vogtle Federal-6

' Nuclear Plant 2.320 50.7 453.878 Currently Plant Scherer pavaDie.,

S 64.387 5 13.884 S (5.d74)

J

. Units No I a 2 1.636' 84 739 49.822 Deferred...

90.089 78.361 83.o22

' Common Facilities -

23 5 43.593 Deferred in prfor W

- Plant Wansley 1.73o 53.5 277,51o 27 years (crediu.

(20.580)

(7,997)

(14 311)

Deferred invest.

Each participant provides for its own con-ment tan struction financing. The Company includes its credits

_ 4_o 823 32.395 _ 57.220 proportionate share of plant operating expenses t 74 713 116.643 120.257 in the corresponding operating expenses in the State-Statements of Income. The Company is con-currently i

.tractually obligated to cornplete those jointly payable 16.049 0.174 0.992 owned units st til under construction and to oper-r in prior ate and maintain the Units as agent for the 4

joint owners.

years (credit).

(2.645 (950) s t.842) 25889 66.o96 16.190 in con < iection with these sales, the Company Totat 200.602 132.739 136.447 has entered into agreements whereby the Com-Deduct income

- pany is required to purchase declining fractions taxes included in of OPC's and MEAG's capacity and energy of otner mcome (22 570)

< 14.315)

(9.4941 the respective generating units during a period Ry.'$c"t of up to ten years following commercial opera-l tion, such purchases to be made Whetner or charged to operations si 78.o,2 si i 8.424 si 26.933 not any capacity or energy is available. The cost of such capacity and energy is a function of each J

entity's carrying ano operation costs and is Deferred investment tax crHts are amor-included in purcl ased power in the Statements tized over the life of the property which gave of income.

rke to the credits Suen amontzation is applied as a credit to reduce depreciation in the State-The Company has entered into agreements ments of Income and amounted to S5.163.000 with certain Florida utilities regarding power in 1980, S4.197.000 in 1979 and S4 610.000 sales frorh Plant Scherer and other units of the in 1978.

I Southern electric system.

The provision for deferred income taxes The Company and one of its affiliates. Ala-results from the Company's tax deduction for bama Power Company, own equally all of the accelerated methods of depreciation and other outstanding capital stock of Southern Electric write-offs of property costs. as provided for by

['

Generat;ng Company. (SEGCO), which owns the locome tax laws. being greater than the electric Ocnerating units with a total rated ca-book depreciation of such costs. Income taxes 4

pacity of -1,019.680 kilowatts. together with deferred in prior years are credited to income awoc ated transmission facilities The capacity when the book depreciation of those property of the units has been sold equally to the Com-costs exceeds the related tax deductions.

i pany and Alabama Power Company under a The total provision for federal income tax contract expiring in 1994 which, in suthtance.

85 a percent of income before income tax requires payments su!!Iclent to provide for the amounted to 43.1%. 39 3% and 41.0"6 for 1980, operating expenses. taxes and debt service, in-1979 and 1978. respectively. The primary rea-cluding a return on investment, whether or not sons for the difference between the rates for SECCO has any capacity and energy available.

1980 wer e ( 11 the exclusion f rom ta xable income i

,.m.~

..m,_

L 18 of the allowance for equity funds used during 528.414,000 at December 31.1980 and 1979.

construction (4.9%). (2) the lower capital gains respectively. At December 31,1980. the com-tax rate on asset sales (2.6%). arm 3) the excess of posite Interest rate for the leased ralicars was the tax gain on asset sales over the book gain 9.54% the interest rate for the corporate head-(negative 4.2%). The difference between these quarters lease was 8.23% and the composite rates and the federal statutory rate of 46% in interest rate for the other leased buildings 1979 and 48% In 1978 was due primarily to the was 5.42%

exclusion from taxable inco.ne of the allowance The current portion of the capitalized lease for equity funds used during construction obilgations and the note payable for each year (6.2% for 1979 and 1978).

through 1985 is as follows: 52.796.000 in 1981:

52.524.000 in 1982. 52.767.000 in 1983; Note 6. Other Long Term Debt:

53.383.t 00 in 1984: and 53.662.000 in 1985.

Detalls of other long-terrn debt are as follows Note 7. Sinking Fund Requirements of First j,

(In thousands):

Mortgage Bonds:

1980 1979 obligations incurred in con-The annual first mortgage bond sinking fund nection with the sale by requirement (1% of the bonds authenticated fa prior to January 1 of each year) amounts to em ilu i

$25.226.000 and is due on or before June 1 control and industrial 1981. This requirement may be satisfied by use a

development J

of bonds specificahy authenticated for such pur-revenue bonds-59s ue November 1.

pose against unfunded property additions equal p 3 S R000 S 6 00 to 16Gh% of such requirement. The 11%%

9 00.6 due september 1 series due August 1. 2000. is subject to a manda-2005....

30.000 30.000 tory cash sinking fund requirement of 55 million 6.75% due November 1.

annually commencing August 1.1981.

6 due June 1. 2507.

2.

55.000.000 of its'11%% series first mortgage "Y

6 375% due April 1. 2008.

21.600 21.600 7.to% du'e December 1.

bonds which can be used to totally satisfy the 2008.

75.000 75.000 j

1981 cash sinking fund requirement and to 232.500 232.500 1.ess funds on deposit witn satisfy $5.000.000 of the 525.226.000 1981 lirst mortgage bond sinking fung requirement.

Trustee.

24.007 64.680 The gain on the reacquisition is included in

.208.493 167.820 Capitanzed lease obilgations-miscellaneous deferred credits in tne eaiance Sheets and is being amortized over the remaln-Halicars.

20.990 22.634 Corporare headquarters ing life of the original issue.

huliding.

70.64 j

Otner ottice buildings.

5.96 4 6.420 Note 8. Cumulative Preferred Stock-Subject l

97.616

__29,054 to Mandatory Redemption:

i Note Payable-6% due tnrough 1986.

3.066 2.946 The S2.75 Class A Preferred Stock has a Cum-

~

53_09E_

5.._199.8_20_

Ulative sinking fund provision requiring the The Company has authenticated and de.

stated value of 525.00 per share. commencing livered to the trustees, with respect to such November 1, 1980 and continuing until all pollution control and Industrial development shares are redeemed. Durir.g 1980 and 1979, revenuu bonds, an aggregate of $232.500.000 140.800 and 9.200 snere% respectively. were of its first mortgage bonds which are pledged reacquired to satisfy tre 1980 sinking fund re-as security for its obligations under pollution quirement and an additional 47.000 shares control and industrial development contracts.

were reacquired in 1980 to partially satisfy the No interest on these first mortgage bonds is 1981 requirement. The gains on these reac-payable unless and until a default occurs on the quisitions of 5532.000 and 515.000 for the installment purchase or loan agreements. No years 1980and 1979 respectively, are included twitw lpil nWments are due on the contracts with premium on preferred stock in the State-prsor to 1988.

ments of Capitalization.

Assets acquired under capital leases are re-corded in the Company's Balance Sheets as Note 9. Assets Subject to Lien:

utility plant in service and the related ODiigation is c!9ssifico as other long term debt. The net The Company's mortgage dated as of March 1.

book value of capitalized leases included in 1941. as amended and supplemented. securing utility plant in service was $94.850000 and the first mortgage bonds issued by the Com-

.+

19 pany, constitutes a direct first lien on substan-tive premium adjustment in the event that losses cially all et the Companys fixed property and exceed accumulated funds.. Tne Company's

'a franchises.

maximum assessment is limited to S17 million.

The Company is also a member of Nuclear Note 10. Common Stock Dividend Restrictions:

Electric insurance Limited. a mutual in3urer -

-established to insure member utilities against The Company's first mortgage bond indenture the extra expense incurred in obtaining replace-contalns various common dividend restrictions ment power during a prolonged outage at a which remain in effect so long as the bonds.

member's nuclear generating facility. Members are outstanding. At December 31. 1980, are insured against such increased costs in the

' $80.854.000 of retam.cd earnings.were re-amount of up to 52.000.000 per week (starting stricted against the payment of cash common 26 weeks after the outage) for one year and f

divid(.nds under terms of the mortgage 51.000.000 per week for the second year. The j

indenture.

Company is subject to a retrospective premium The terms of the sinking fund for the Com-adjustment in the event that losses exceed ac-

]

pany's presently outstanding $2.75 Class A cumulated funds. Tfic Company's maximum Preferred Stock prohibit the payment of cash assessment is limited to S13 million.

}

dividends on common stock during a default 1;

In the performance of the sinking fund Note 12. Quarterly Financial Data (Unaudited):

obligations.

I The Company's charter limits casti divi-Summarized quarterly financial information i

dends on common stock to 50% of net income f or 1980 and 1979 is as follows tin thousands):

available for sucf1 stock during a prior period e

af twelve months if, calculated on a corporate Netincome After tnsis, the ratto of common stock equity to totat Ne'nN nc N Pre QuanerEnced Capitalization including surplus. adjusted to rred oc reflect the payment of the proposed dividend.

fdhCh 15 below 20%. and to 75% of such net income if 30.

september 30.

Such ratio is 20% or more but less than 25%.

1979.

436.7ss 83.563 54.845 At.D.e. ccmbe_ r_31_, 1_980,_this_ra. tio_ _was.~32 3%.-- - December 31.

=

19/9 36s.071 71.46s 41.113 Note 11. Nuclear insurar ce:

March 31.1980 398.980*

72.891 39.206 June 30.1980 396.97s*

Gs.258 42.206 Under the Price-Anderson Act, the Company september 30.

maintains agreements of Indemnity with the 1980.

563.003-111 A21 80.007 Nuclear Regulatory Commission (NRC) which.

Def9 e

31.

together with private insurance, cover third-449.4s0 66.718 33.926 party liability arising from any nuclear incident occur ring at t he Company's nuclear power plant.

• Operating revenues for the first three quarters The Act lim lts public liabillt) claims that could or 1980 have been restated to reflect bulk power 8

arise from a single nuclear incident to $560 mil-sales made under long-term contracts initiated lion. Each reactor at the Company's nuclear plant in 1980 with neighboring utilities which were is insured against this liability to a maximum of previously recorded as a credit to purchased

$160 million by private insurance (the ma ximum and interchanged power. Operating revenucs amount presently available) and the remainder werc increased by SG.291.OOO. S9.133.OOO and l'

is provided by indemnity agreements with the S21.536.000, respectively with a correspond-l NRC. In the event of a nuclear incident involving ing increase in purchased and interchanged f

any commercial nuclear facility in the country, power a Company Could be assessed up to 55.000.000 per incident for caCh licensed reactor operated Note 13. Supplementary Information by it but not more than $10.000.000 to be paid Concerning the Effects of in a calendar year. On the basis of its ownership Changing Prices (Unaudited):

interest in the two nuclear reactors now in i

service. the Company could be assessed a maxi-The following supplementary information con-mum of $5.010.000 for any incident, but not more than $10.020.000 to be paid in any one cerning tt e effects of changing prices is pre-t year.

sented in accordance with the general concepts set forth in Financial Accounting Standards The Company is a member of Nuclear Mu-Board Statement No. 33, as modified to reflect tual Limited. a mutual insurer established to thc 7onomic ef f ects imposed on Georgia Power provide Insurance coverage against property Company by regulatory authorities. It should be i

damage to members nuclear generating fa-viewed as an estimate of Ihe approxtmate ettects

{

cilities The Company is subject to a retrospec-of inflation, rather than a precise measure.

F 20

~

, Constant dollar amourAs represent his-Increases effectively are receivables f rom cus-torical cost stated in terms of dollars of equal tomers. Therefore, such increases are not ig ^

- sumer Price Index for All Urban Consumers.

monetary assets. Income tax expense was not purchasing power, as measured by the Con-included in income but instead are treated as 1

Current cost amounts reflect cnanges in specific adjusted because only nistorical costs are de-prices of plant from the date the piant was ac-ductible forincome tax purposes.

YJired to the present. They differ from constant Holding assets such as receivables, pre-(ollar amounts to the extent that specific prices payments, and inventory results in a loss of

' nave increased more or less rapidly than the purchasing power during periods of inflation general rate of inflation. The current cost of because the amount of cash received in the plant.was determined by indexing each major future for these items will purchase less. Con-

. class of plant using the Handy-Whitman Index versely, holding monetary liabilities, primarily of Public Utllity Construction Costs. Current -

long-term debt. results in a gain because the cost does not necessarily represent the replace-payment in the future will be made with nominal ment cost of existing productive capacity be-dollars having less purchasing power. Georgia cause the utility plant is not expected to be Power Company has a net gain due to the sig-replaced precisely in kind.

nificant amounts of long-term debt outstanding.

The accumulated provision for depreciation Under the ratemaking prescribed by the for current cost was developed by applying, for regulatory commissions to which the Com-each major class of plant. the same percentage pany is subject. Only the historical cost of

- relationship that existed between gross plant plant is recoverable in revenues as deprecla-and accumulated provision for depreciation on tion and plant in rate base is limited to original a historical basis to the adjusted plant data.

Cost. Therefore. the cost of the plant stated in

- Depreclation expense for both methods was terms of constant dollars or current cost that determined by applying the current deprecla-exceeds the historical cost of plant is not pres-

-)

tion rates to the respective indexed plant ently recoverable in rates as depreciation and amounts reduced by the amortization of Invest-the amount of this excess that accrued as a ment tax credits wnich were first adjusted to resultof inflation in the current year ls reflected average 1980 constant collar amounts by year as a reduction to net recoverable cost. While of addition.

the use of debt financing reduced tne etfect of t

increases in the cost of electric generating this loss on the common stockholder. earnings j

fuel are recoverabic in revenues through oper-were not adequate to offset the erosion in the ation of fuel cost recovery mechanisms. Such purchasing power of its investment.

Statement of Income Adjusted for Changing Prices For the Year Ended December 31.1980 un Inousands of Average 1980 Dollars)

Constant Current Dollar Cost income Applicable to Common Stockholder, as Reported.

5195.345 S195.345 Erosion of Common Stockholder's Equity Because of Changing Prices:

i cost in excess of the original cost of productive facilities not recoverabic in rates as depreciation-Reportable as an additional provision for depreciation.

148.432 183.324 Reportable as an adjustment to net recoverable cost.

30 t.965 98.886 5450.39/

5282.210 Excessof thegenerallevelof prices (1913.802)in the current year over increase in specific price cnanges (s745.6151*

offsetting effect of debt fmancing.

168.187 (313.o63)

(313.o631 Net croston of common stockholder's equity.

5137.334

_ $137.334 Income (Loss) Applicable to Common Stockholder,as Adjusted **

Oncluding the effcct of debt financing).

$ 58.011 5 58.o11

• At December 31.1980, current cost of property, plant and equipment. net of accumulated depreciation, was

$9 tnllinn. and historical cost or net cost recoverable through depreciation was 14 billion

" Adjusted income lloss) applicable to common stockholder would be 547 mtth vn a constant dollar basis and $ 12 million on a current Cost basis if only the amount reportable as an additional provtsion for deprecla-tion were deducted from the reported amount of such income.

-4

+<=~'

~

-21

,W DN

-c Five-Year Comparison of Selected Supplementary Financial Data Adjusted for Effects of Changing Prices Ig

-_ Dollars in Thousands 1980 1979 1978 1977 1976

- Operating Revenues:

Lq Historical cost.

... $ 1.808.408 -

51.519.942 s1.475.024 51.301.237

$ 1.170.046 As adjusted *......,,.,..

1.808.400 1.732.734 1.858.530 1.769.682 1.696.567 Income (Loss) Applicableto Common Stochholder:

L Historical cost.

..........S 195.345 5 145.512 i

As adjusted for the net erosion of '

common stockholders' equity

• 58.011 3.256

- Common stockholder's investment (Net Assets),at yearend.

Historical cost.,

. $1.314.315 51.210.868 51.173.036 S t.086.246

$ 1.038.9G1 As adjusted *.

1.261.742 1.295.629 1.431.104 1.444.707 1.475.325-J Excessof theGeneralLevelof Prices Over increase in Specific j;

Price Changes *e.....

.,S 168.187 5 324.397 Effect of Debt Financing *.......... S 313.063 S. 360.201 l-Return of Average Common Equity:

l Historical...

'15.47%

12 21%

As adjusted for the net erosion of 1

common stockholder's equity *..

4.59%

0.27%

Cash Dividends Declared (Commonh Historical cost.

.S 136.400 S 131.100 S 119.225 S 109.400 S 100.400 i

As adjusted *..

136.400 149.454 150.224 148.784 145.580 g

Average Consumer Price index.

246.8 217.4 195.4 181 5 170.5

.i

-

• Adjusted amounts represent average 1980 dollars.

l l

lt.

Auditors' Report To the Board of Directors of

- Georgia Power Company:

l-We have examined the balance sheets and in our opinion, the financial statements statements of capitalization of Georgla-Power referred to above present fairly the financial

-l Company (a Georgla corporation and a wholly position of Georgia Power Company as of De-owned subsidiary et The Southern Company > as cember 31.1980 and 1979. and the results of i

of 17ecemt er 31,1980and 1979, and the related its operations and the sources of f unds for gross statements of income, earnings retained in the property additions for the periods stated, in

. business, other paid-in capital and sources of conformity with generally accepted accounting funds for gross property additions for each of principles applied on a consistent basis.

the three years in the period ended December 31,1980. Our examinations were made in ac-cordance with generally accepted auditing standards and, accordingly, included such tests ARTHUR ANDERSEN a CO.

of the accounting recorJS and such other audit-IrKJ procedures as we CJnsidered necessary in Atlanta. Georgia, the circumstances.

February 19.1981.

A r

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e 22 N'

Report of "".m.T 4

~The managernent of Georgia Power Company which management meets its responsibility for has prepared and is responsible for the financial fairness of financial reporting. They regularly -

1-statements and related financial information evaluate the system of internal accounting Con-L included in this report. The financial statements trols and perform such tests and other pro, were prepared in accordance with generally cedures they deem necessary to reach and accepted accounting principles appropriate un-express an opinion on the fairness of the fi-der the circumstances, and necessarily include nancial statements.

amounts that are based on best estimates and The Doard of Directors pursues its re-judgements w!!h appropriate consideration to.

sponsibility for reported financial information materiality. Financial information included else-through its Audit Committee. composed of where in this annual report is consistent with Directors who are not employees. The Audit the 16nancial statements.

Committee meets periodically with manage-I he Company maintains a system of internal ment, the internal auditors and the Independent accounting controls to provide reasonable public accountants to assure that they are carry-assurance that assets are safe-guarded and that ing out their responsibilities and to discuss the books and records reflect only authorized auditing, internal control and financial report-transactions of the Company. Limitations exist Ing matters. Doth the independent accountants th any system of internal control based upon and the internal auditors have free access to tne recognition that the cost of the system the Audit Committee at any time.

should not exceed the benefits derived. The We believe that these policies and pro-Company believes its system ot internal account-cedures provide reasonabic assurance that our a

ing controls. augmented by its internal auditing operations are conducted with a high standard.

function, appropriately balances the cost /

of business conduct and that the statements benefit relationship.

reflect fairly the financial position. results of The independent public accountants pro-operations and sources of funds for gross prop-j vide an objective assessment of the degree to erty additions of Georgia Power Company.

I-Board of Directors 4

+

Waltero Autrey I's esulent L O.Hardman 14l Dr. Gloria M. shatto Preskjent M 7rcasurer Pr esuk'nt i tan uitna Turpentine Co. Inc.

Har many Gt ove %us. Inc.

trbavat stof es1 Vakkxta.19/2 lierryCoHegearklik'rry Academy (tcatlles> Commer te.19/9 1

teducatunu Home.19tK)

H. O. Baker. Jr.-

Richard L Mattel SenH:n VicePreskjent KJttet I-ntet pr m inc.

Georgia Power Comptny Edward D. Smith unvestmentsi Atlanta 1973 Atlanta.19tK) i tanseil. Ptwt. I trandon 8 Dorsey (term expired b/lb/OO)

(etected s/1S/80)

(attorheysl AltantJ.196n,

Harold C. McKenzie. Jr.

Robert Ftrickland Bannett A. Brown Executive Vice Pt esMent Ciher nun of Ikurd j

C1t"r n un as R1 C hJef r mecutIve of ficer Geoga Power Compiny 1 rust Conniny ILirik I he Callies vs M t oit her i1 Nat k wut I Link Atlanta.19/2 HKH1hidgl Atlanta l9tM nunkingi Attanta.19/9 telected b/ I S/HI))

Executive Vice Pressdent Pr esnient N N. Burnes.Jr.

Georgu Power Company W C HradleyCompany Vice CfWr man Atlanta,1975 Home M.uiufacturing Company diridustrunstsiColumhus 1965 Itextiles> Home,1965 WiHlam S. Morris,in Alvin W. Vogtle, Jr.

Piesident Ii esident Wuttam E. Ehrensperger Mor ris Communicaltons Corporation

'Itie Souttier n Ccmipany

!.(1M V4 c t ie.h k nt aix!Gr oup F Wutive ipuDusturup Augusta.1907 Atuota.1968 G oniI r Cettipany William A. Parker, Jr.

Carl wwre Clutrman of ik urd WHuam A.Fickling.Jr.

Vice Presadent

-Cturnunof theIund Cheronceinvestment Company Coca Cola. u S.A (real estate n investments)

Cit er h r MWal Cg x ation bott or tok company Atlanta. Ekh 1

Omik.H f.tr Ath w M.h an 1973 Atlanta.1980 g G p,,,g,o mWM6 J. A. Gantt Clwrnun Scriu

• Yk e President AHen B. WHson Oct =qia1 \\mcr Ciwnputy.

PattiHoConstructton Company. Inc L va utIve VK e Presklent i irunce Atl.utta 19/o in wists octkim itcatur.19/2 Gsvou Power Company Atlanta.19/4 i' esecent & Cruel Executive othcer Georg!a Power Company Atunta.1969

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f EsecutiveCommittee /

f AuditCommittee _

Compensation Committee Honorary Directors c)+'

Robert W. Scherer. Chairman [ Edward D. Smith, Chairman

- H.G. Pattillo, Chairman Joe B. Browder

• E Harold C. McKentle, Jr.

N. N. Burnes, Jr.

William A. Parker,Jr.

Atlanta.1976 4

i

- James H. Miller, Jr.

Wlillam A.Fickling,Jr.

Wilitam B. Turner

. William A. Parker,Jr..;-

Edwin 1. Hatch

_M

• - H. G. Pattillo 1)

_O Tr outman. Sanders.

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. Edward D. Smith -

Atlanta.1978 c

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/J. A. Genet George P. Head Alvin W. Vogtle, Jr.

Robert W. Scherer' 4

President and Chief '

. Senior Vice President Vice President Vice President 4

ExecutiveOrficer _

t. /IstonOperations Gen Mgr., Fossila Charles F. Whitmer Age: 55

.t

Years of Service

34 :.

Age: 50 Hydro Generation Vice President Years of Service: 32 (elected I/16/80)

' f-Engineering

'. Harold C.McKenzie, Jr..

' R. Pierce need, ar.

Geraid T. Hodon Jack K. Widener,Jr.

Executive Vice President

. Senior Vice President Vice President

\\nce President External Affairs Administrative Services

- Put>lic Affairs 0

. Age: 49 Age: 53 Regulatory Affairs Yearsof service: 23 Years of Service: 33 C C'Pr

• '#* *'d"*'

e det James H. Miller, Jr.

4 J. Kelly Procurement and Materials Executive Vice President Senior Vice President g

ear Operations PowerGeneration J. Wyman Lamp Generation Age:58 Age. 58 VKe Wesident (elected 1/16/80)

Years of Service: 34 Years of Service: 31 09"*CM Charles R. Minors f.llen B. Wilson

/80)

C. & McManus, Jr.

AsWanmcc NSWm Executive Vice President '

James M. Plepmeler Vice President Consumer Affairs i

Finance

- Senior Vice President W

W. D. DeBardeleben, Jr.

Age-63 Strategic Planning Wade S. Manning Assistant Comptroller Years of Service:46.

Age: 37 Vice President H. Grady Baker, Jr.

Yeers of Service: 1 '

Land

'5enior Vice President,, *

(elected 6/01/80)

Assistant Comptrolier F. G. Mitchell. Jr.

Customer Service Warren Y.Jobe Vice President y

Age. 51 Vica! President and Comptroller ~ Generating Plant

[e

{

1. S. Mitchell, Ill Construction George W. Edwards, Jr.

Vice President and Secretary John A. Roberts Senior Vice President (retired 4/01/80)

Vice President St n Se retary External A"*rs (retired 12/31/80)

Age: 41 w,g w,,ge7,,g Energy Services C. L Ratterree C

&% SmetaG Romney E.Scon Yearsof Service: 11 and Treasurer Assistant Secretary

}

Vice Prestdent William E.Ehrensperger (elected 4/01/80)

Economic Services Robert C. Ford Sefuor Vice President and Asst 2cretaryand Asst' Group Executive Power Supply R E Conway Robed E Symoneue Treasurer V ce President Vice President and Assistant Age-58 (elected 1/01/80)

Years of Service: 38 Generating Plant Projects to President J. J. Cordova (retired 2/01/80)

E. Ray Perry t

Vice President Asst. Secretaryand Asst.

J. W. Talley. Jr.

Treasurer (elected 9/17/80)

Vice President A. W. D6hiberg Area Development Vice President Operations Planning and Control OlWf980ft Officers Ben H. Williams B. W. Rainwater B. S. Moss L.T. Wansley Vice President VKe Prestdent Vice President Vice President Athens Divtsion Augusta Dvisr4 Macon Dvision Valdosta Division E. A.Yates Jr.

Andrew B. Speed T. J. Allen, Jr.

Vice President Vice President Vice President AtlantJ Dvision Columt)us Division Rome Division

...